Opinion ID: 2787659
Heading Depth: 3
Heading Rank: 4

Heading: Trial Court’s Ruling Excluding Perpetual Park

Text: Operating Costs from the Schedule of Contractual Obligations ¶42. When the hearing concluded, Judge McGehee took the matter under advisement and later issued his ruling, adopting the Tann, Brown & Russ audit’s schedule of liabilities. Judge McGehee found that Lamar County withdrew from the district on September 6, 2011, and that an independent auditor had determined that Lamar County’s portion of “contractual obligations . . . that [we]re outstanding on the date of [the] [C]ounty’s withdrawal” was $337,088. ¶43. Judge McGehee also found “that under the provisions of Section 51-15-118, Lamar County [wa]s not responsible or liable for perpetual park operating costs,” and “that 16 perpetual park operating costs are not provided for in Section 51-15-118.” The trial court supported its finding with the following reasons: (a) Section 51-15-118 does not specify perpetual operating costs as an obligation; (b) Section 51-15-118 provides that the county is responsible for those “that are outstanding on the date of such county’s withdrawal from the District,” and there were no such perpetual operating costs outstanding on September 6, 2011; (c) Section 51-15-118 provides that the determination shall be by an independent audit and that has been done and accomplished in accordance with the statute and by agreement of the parties; (d) Section 51-15-118 provides that the determination should be made by a certified public accountant. The legislature, by this provision, indicated its clear intent that accounting standards would be applied in making the determination. The applicable accounting standards in this case are promulgated by the Governmental Accounting Standards Board (“GASB”). GASB standards, which were introduced . . . during the hearing, do not support a finding that the perpetual park operating costs fall within the specified obligations of the withdrawing county; (e) [T]he District’s own financial records, its own prior audits, do not include the claimed perpetual park operating costs as a liability of the District; (f) [T]he contracts that the District has with the federal government . . . do not require the level of activity that the District has assumed and there is no obligation upon the District consistent with the position it takes and thus there is no contractual obligation, liability[,] or indebtedness relative thereto which can be imposed, in proportionate part, upon the withdrawing county; (g) [T]he contracts that the District contend give rise to its claim for perpetual park operating costs do not constitute contractual obligations or liabilities under GASB standards which, under the statutory scheme as specified in Section 51-15-118, must control; 17 (h) [E]ven if GASB does not control, the District’s position is not supported by any evidence other than its own claim which is clearly contradicted by its own records; (i) [A]s a footnote, the [c]ourt cannot conceive that the legislature intended that a withdrawing county would be responsible for operating costs in perpetuity because: (a) it would be contrary to the whole concept of withdrawing—why withdraw? (b) it specifically stated that the measuring date is the date of withdrawal. ¶44. After Judge McGehee issued his thorough and well-reasoned ruling, the District appealed to this Court.