The $7.8 Million Divorce

Join me, please, in a thought experiment.  Let’s compare the withdrawal of Sandown from the Timberlane Regional School District to the divorce of a married couple.

Since getting married, Mr. Timberlane and Ms. Sandown have amassed a modest real estate empire. They have jointly and fully acquired by equal contribution

  • a family home
  • a summer cottage
  • a rental property
  • a house for Mr. Timberlane’s relatives

[For the purposes of this argument, ignore that tax law and domestic property law treats these properties differently.]

Ms. Sandown now wants a divorce. She tells Mr. Timberlane that she will leave the marriage with the family home and he can have the rest of the properties.  Ms. Sandown, feeling guilty for breaking up the relationship, considers this more than generous since she owns half of all four properties and is just asking for the family house.

Mr. Timberlane, on the other hand, insists that Ms. Sandown buy him out of her half of the family home and forfeit all her equity in the other properties.

In real life here’s what would happen – (again ignoring the special legal/financial status of a marital home):

  • The market value of the three properties would be determined. Half that value is what should be paid to Ms. Sandown.  Then she would pay half of the market value to buy the family home from Mr. Timberlane.

A more simple-minded approach would:

  • Add up Ms. Sandown’s contribution to all of the three properties. That figure should be subtracted from the half that Mr. Timberlane paid for the family home.  (This leaves Ms. Sandown forfeiting all the growth in the investment which is a windfall for Mr. Timberlane.)

This is what Mr. Timberlane is demanding:

  • All of what he paid for his half of the family home with no credit at all for what Ms. Sandown paid for the other properties jointly owned.

Mr. Timberlane’s position is exactly the position taken by the Majority Committee and the district with the support of the district’s lawyer.  The position is outrageously unfair to Ms. Sandown and is grounded in an arguable reading of RSA 195:28.

CHAPTER 195
COOPERATIVE SCHOOL DISTRICTS

Withdrawal From Cooperative School District

Section 195:28

195:28 Disposition of Property. –If a pre-existing school district withdraws from the cooperative school district, the cooperative school district shall transfer and convey title to any school building and land located in the withdrawing district to the withdrawing district upon payment by the withdrawing district of the costs of capital improvements and additions to said school building incurred by the cooperative school district, less the share which the withdrawing school district has already paid toward such costs and the share which the withdrawing school district is required to contribute toward such costs as provided in RSA 195:27. The amount of said capital improvements and additions and the time of transfer of title shall be determined by the agreement for withdrawal between the cooperative school district and the withdrawing school district. The withdrawing school district forfeits its equity in all other cooperative school district facilities.

Source. 1977, 439:1, eff. Sept. 3, 1977.


I believe this RSA is at the very least ambiguous.  “The withdrawing school district forfeits its equity in all other cooperative school district facilities,” should be understood to mean the forfeiture happens after withdrawal not during the negotiating process. Clearly this RSA was not written with the unique complex cooperative district that is Timberlane in mind. The objective of the law was to prevent towns from leaving a district with a financial advantage and to the detriment of the remaining towns in the district.  The objective could not have been to strangle towns wishing to depart a cooperative so that they would have a heavy financial burden in paying twice for what they paid for once. Every atom of fairness cries out against the majority committee’s interpretation of the RSA.

Furthermore, why does the district think they are entitled to a windfall when a town leaves the district?  (Mr. Collins himself uses “windfall” to describe the buyout.) The district has no offsetting expenses to deal with and no new obligations.  There is nothing in natural justice that says the district is entitled to anything more than they have gained already from Sandown and in fact they will be left with millions of dollars that we contributed to the district that Sandown can’t take with it. That is what is meant by forfeiting our equity.

Since 2000 Sandown will have contributed $11.5 million in capital contributions to the district when the bond is paid off.  The preliminary buy-out number proposed by the Majority Committee is $7.8* million.  They can keep going back to the district’s inception to make their preliminary number bigger, but the point remains that individual towns that have paid more to the district than they have received in capital investment should not owe a thing to withdraw.

Let me leave you with one last thought experiment.  Suppose Sandown pays $8 million in ransom to leave the district. Then Danville pays $6 million to leave the district.  Then Atkinson pays $7 million to leave the district. Plaistow tax payers would be sitting on a completely unearned pot of gold. Does this make any sense whatsoever?  The logic of this interpretation of the RSA is patently unfair and leads to absurdity.

Tomorrow I’ll post clips from last night’s the Majority Committee meeting.

*Mr. Collins seems to have a different understanding of the total buyout number than I do from a reading of the documents provided to the Majority Committee. He says the number is $6 million.  Here are the documents.  Good luck figuring out which is correct:  SWFC buy out doc to SWFC-7-30-15 (1)      I’m thinking that total capital cots in Sandown were $7.8 million.  Sandown paid approximately 21% of those costs, so the buy-out number is closer to $6 million. Again, this is going back only to 2000. From inception of the district, the buy-out number would be larger.

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15 Comments

Filed under Sandown Issues

15 responses to “The $7.8 Million Divorce

  1. Reblogged this on timberlaneandsandown and commented:

    I’m reposting this because there has been discussion of a different buy-out number. I’ve added the Majority Report so you can see which number is correct.

  2. Curt Springer

    I think Rob’s interpretation is correct. I don’t see any ambiguity. I’m not saying it is fair.

    • Cathy

      “I think”. (??)
      The Minority Committee will “confirm” if the District’s Withdrawal Study Committee (not Rob’s) interpretation is correct.

      • Curt Springer

        Cathy, I have my opinion, the minority committee can have its opinion. Really only judges “confirm” opinions (or not). I said “I think” as a way of inviting other opinions.

      • Curt,
        I know Cathy well. Sometimes the tone of emails are not reflective of the spirit of the comment because they are sent off in a rush. I don’t think she meant to sound combative. A discussion is welcomed.

    • Thanks, Curt. Timberlane is the only district of its kind in the state that has tried to come apart, so to speak. No other cooperative districts that have experienced withdrawals jointly own school buildings. I do see ambiguity. The forfeiture of equity comes into play after the separation, not during the calculation of the capital costs owed. The RSA doesn’t say one way or another. The district’s interpretation violates natural justice and leads to absurdity.

      I enjoy your posts and got a laugh out of the zipper image on FOEAT. Once again, thank you for checking with the court twice daily.

      • Erich Beyrent

        It’s possible that the law was written that way to make it difficult for cooperative districts to split apart on a whim. As Cathy said on FoE, laws are written in plain language and you get in trouble when you start interpreting.

      • A whim? A warrant article, a six-month study, approval by the Board of Education, and approval of the voters…. hardly constitutes a whim.
        Mediocre general academic achievement matched with skyrocketing budgets doesn’t seem to me a whim either. There is also the issue of management by an AWOL school board as demonstrated by the fiasco that is the “closing” of Sandown Central and the problem the district has generally with financial transparency.

  3. Erich Beyrent

    Yes, a whim. To continue with your divorce analogy, where was the marriage counseling? Where’s the independent mediator to help settle the issues? This has gone from zero to sixty in a flash and is the equivalent of school-yard politics – “This is not fair so I’m taking my ball and going home.”

    Yes, the School Board messed this whole thing up. They never should have written the warrant article, they should have given this a year to plan out and work out the issues. I sat in front of you and the rest of the board twice and practically begged for a year to plan this properly.

    Plus, you’re getting ahead of yourself when you talk about approval by the Board of Education and the voters. This is “just a study”, right? There’s no authorization from the voters for anyone to actually move forward with this study and present it to the Board of Education for approval.

    The voters believe this is in fact “just a study”.

  4. Curt Springer

    It is not just a study. Either the district wide study committee or the town minority committee can present a withdrawal plan to the state BOE with no further action by voters. If the BOE approves a plan, it will be submitted to the district voters for an up or down vote either at the next annual meeting or at a special meeting.

    • This does not preclude a vote by Sandown before a plan is submitted to the BOE, however. That may happen.

      • Curt Springer

        Donna, what kind of vote? And when you say “Sandown” do you mean voters or a minority committee?

      • I mean that it is possible the BOS could call for a general referendum vote by the people of Sandown on the withdrawal proposal before it is submitted to the Board of Education. Nothing precludes that from happening if Sandown’s own withdrawal committee finds withdrawing feasible.

  5. Erich Beyrent

    AccoRding to Cathy, it’s just a study. She claims that the judge said as much in the court hearing two weeks ago. I personally heard you, Donna, tell voters it was just a study.

    I’ve been disputing that claim all along; if the minority committee deems withdrawal to be feasible, it has every intention of following through and taking action on that plan. That was NEVER told to the voters. Not once.

    If either committee takes action on their respective study without express consent of the voters, you will have purposefully deceived the voters in your support for that warrant article.

    • Curt Springer

      Replying to this reply by Donna:
      “I mean that it is possible the BOS could call for a general referendum vote by the people of Sandown on the withdrawal proposal before it is submitted to the Board of Education. Nothing precludes that from happening if Sandown’s own withdrawal committee finds withdrawing feasible.”

      The BOS has no authority to call for a referendum on any topic. They could call for a special town meeting, which would be subject to the requirements of SB2, with a deliberative session followed by a ballot vote. The warrant article would not be binding in any way because the town has no authority to act on school district matters beyond the specific powers granted by the legislature. AFAIK the power to compel the district to do the study is the only such town vote that is allowed.

      Because it would be a vote to do what a town is not authorized to do, approve or disapprove a withdrawal proposal, depending on how the warrant article is worded, it would not be a town action, just the personal expression of those who voted for or against. Given the low turnout at regular town meetings, it is likely that participation would be even lower. But no matter the number of votes, there would be no way you could say that the “town” voted in favor even if there were more votes in favor than against.

      It is exactly the same as the alleged censure vote against you last summer, which was not an authorized action of the school board, just the personal expression of those members who voted in favor.

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