Opinion ID: 2571648
Heading Depth: 1
Heading Rank: 2

Heading: State aid and the school district's obligation under the contract.

Text: ¶ 11 The school district concedes that it cannot lawfully enter into a contract which obligates it to exceed the budgetary limitations of a fiscal year. [8] Relying on the language of the contract, the school district asserts that it was not required to reimburse Southern for the 1998-1999 school year because it did not actually receive any aid that year. Southern contends that, pursuant to the contract, the school district was obligated to reimburse it because its eligibility to receive State aid was determined during the 1998-1999 contract, even though it was not received until the next school year. ¶ 12 Southern also insists that it reached a settlement agreement with the school district regarding the payment of the $238,323.31 and that it is entitled to payment regardless of whether the underlying debt is constitutional. The school district argues that a settlement agreement was never reached. It also contends that it would be unlawful for it to pay a settlement if the underlying debt were unconstitutional. Even if a settlement agreement were reached, [9] resolution of this cause depends upon the original contract because unconstitutional contractual obligations could not be subsequently validated by settlement of the contractual dispute. [10] ¶ 13 The 1998-1999 contract provides in pertinent part: ... The amount owed by SCS to the District during the term of this Agreement shall be reduced by the sum of all funds the District receives or becomes eligible to receive during the term of this contract as State and/or Federal aid, textbook allocations, School Lunch Program reimbursements or any other allocations or reimbursements generated by the presence within the District's boundaries of those children residing at the Center. The sum of aid funds described above shall be the amount to which the District is entitled as determined by the State Department of Education, Finance Division.... (Emphasis supplied.) ¶ 14 If the terms of a contract are unambiguous, clear and consistent, they are accepted in their plain and ordinary sense and the contract will be enforced to carry out the intention of the parties as it existed at the time it was negotiated. [11] The interpretation of a contract, and whether it is ambiguous is a matter of law for the Court to resolve. [12] Contractual intent is determined from the entire agreement. [13] If a contract is complete in itself and viewed in its entirety is unambiguous, its language is the only legitimate evidence of what the parties intended. [14] The Court will not create an ambiguity by using a forced or strained construction, by taking a provision out of context, or by narrowly focusing on the provision. [15] ¶ 15 Applying these general principles, we hold that the obvious purpose of the contract was to outline the specific terms by which the school district was to provide education for the children at the juvenile facility. [16] The provision in contest unambiguously required the school district to reimburse Southern by an amount equal to any State aid that it either received or became eligible to receive during the 1998-1999 contract which was attributable to the children living within the school district's boundaries. Clearly, the parties contemplated and intended that the school district would not recoup a double payment from Southern and from the State for the educational services it provided. ¶ 16 Funding for public education through State aid is appropriated by the Legislature and administered by the State Board of Education. [17] State aid is calculated based in part on the average daily attendance of the school district of the two preceding school years. [18] It is undisputed that a school district receives State aid in one year which is attributable to children who resided in the district in the previous year. ¶ 17 Pursuant to statute, the school district did not receive any aid attributable to the children living at the juvenile facility during the 1998-1999 school year. Eligibility for State aid attributable to those children was based and calculated on attendance in the 1998-1999 school year. Under the terms of the contract, the school district was obligated to reimburse Southern in an amount equal to the State aid, if any, which was attributable to the children who resided at the juvenile facility during the 1998-1999 school year even though the funds were not actually received during that school year.