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Texas School Bonds Hit Another Roadblock

DALLAS - A Texas law designed to prevent a single disgruntled voter from stopping a bond issue through a lawsuit appears to be coming up short.

Late last week, the state's Supreme Court refused to order the release of the Waller Independent School District's $49 million of general obligation bonds that have been ensnared in a lawsuit since last summer.

Plaintiff DeWayne Charleston, a Waller County justice of the peace, has lost at the trial court and the appeals court and failed to pay the appeal bond required to take the case to the last available appeal. Waller ISD has also won a bond validation suit in which the state district court cleared the bonds for issue.

But lacking a Texas attorney general's ruling that the bonds were litigation free, the district asked the Supreme Court to order the attorney general to approve the sale. The court declined the request on Thursday, threatening to prevent the sale altogether. If the bonds are not issued by March 14, they will lose their triple-A backing by the Texas Permanent School Fund.

The high court's failure to intervene "will effectively lead to nullifying the bond validation system," according to a brief in the case filed on behalf of the Texas Municipal Advisory Council.

In another friend-of-the-court brief, the Texas Association of School Boards wrote that the case poses a threat to all of the state's 1,040 school districts.

"If protracted litigation were permitted by one or more individuals who were unhappy with the bond issue approved by their fellow citizens, then the issuing political entity either would be forestalled in fulfilling important public purposes, or it would be effectively forced to 'renegotiate the deal' after the election with opponents about the use of bond proceeds," the association's brief read.

In refusing to authorize Waller ISD's bonds, the attorney general's office noted that the Houston Independent School District faces similar problems as it seeks to market $400 million from $805 million of bonds authorized by voters last September.

Ty Clevenger, the attorney representing Charleston in the Waller ISD case, has filed a federal lawsuit against Houston ISD, making similar claims to racial discrimination and violation of open meetings laws. Clevenger has also sought to overturn Houston ISD's successful bond validation ruling in a Travis County state district court, nearly 200 miles from Houston.

Despite those legal entanglements, Houston ISD does not consider itself to be in the same boat with Waller ISD, said spokesman Terry Abbott. The most serious threat is the federal lawsuit. But Abbott said that suit involves district policies, rather than any particular project covered by the pending bonds.

Clevenger has also targeted the law designed to keep plaintiffs like his clients from halting bond sales. The state's Declaratory Judgment Act allows the courts to consolidate cases involving a bond issue and to issue rulings that allow the sales to go forward. Clevenger says that court rulings designed to prevent further litigation in federal court violate the U.S. Constitution.

Frustrated by their inability to issue debt, Houston ISD officials earlier this month issued a public plea to the litigants to drop the lawsuit and allow needed construction to take place.

HISD superintendant Abelardo Saavedra said the people of Houston "hope the attorney general will move quickly on our request and let us carry out the will of the people of Houston who want better schools. And we also call on those that had opposed us to now join us and work with us to build schools for children, instead of trying to delay the process. Such delays will only hurt our children."

The superintendent of Texas' largest school district said taxpayers would be hurt by delays as well. The longer HISD waits to sell the bonds, the higher interest rates could rise, "and if that happens, it will cost taxpayers millions of dollars to repay this debt over time," Saavedra said.

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