Judge busts trust fund

North Carolina’s school districts could soon be millions of dollars richer — but at the expense of city and county governments’ revenues from fines and penalties. That’s the potential consequence of a state appeals-court ruling in a local lawsuit, Asheville and Buncombe County officials were warned at a Sept. 25 emergency meeting called the WNC Regional Air Quality Agency board.

Betty Donoho, later joined by the Buncombe County School District, filed suit against the agency and the city and county governments two years ago to prevent more than half a million dollars in civil penalties originally collected from local air polluters from going to a newly established Clean Air Community Trust Fund. The fund’s purpose is to leverage grants for air-pollution education and cleanup. The Donoho suit argued that a little-noticed provision in the North Carolina Constitution (Art. IX, Sect. 7) requires state regulators to turn over all fines and penalties they collect to public schools.

Reversing an earlier Superior Court decision in the agency’s favor, the three-judge appeals court unanimously agreed with her, dismissing the city and county’s contention that the requirement does not apply to the regional air-quality agency because it is a locally chartered program, not a state one. “If such were the case,” the court’s Sept. 17 opinion holds, “every county and local government unit could circumvent the state constitution by setting up a local air quality enforcement unit … and thereby develop a new revenue stream.”

But the broader implications of the court’s ruling could dry up city and county governments’ existing revenue stream from penalties altogether, air agency attorney, Jim Siemens, warned two local officials who attended the meeting. “You could find yourselves remitting library-book fines, parking fines, any other fines you assess, to the school board,” he told Buncombe County Board of Commissioners Chairman Nathan Ramsey and Asheville City Council member Carl Mumpower.

A Wake County judge’s recent ruling that such fines are payable to the schools has raised concerns among municipal attorneys across the state, Siemens noted. The state attorney general is also litigating the issue, he said.

Asheville City Attorney Bob Oast told Xpress: “The air-quality agency was created pursuant to a comprehensive statutory scheme that includes a provision that deals specifically with fines and penalties collected by such agencies. The decision may or may not have broader implications for local governments.”

Filing a petition for review by the state Supreme Court before the Oct. 22 deadline is one of three options the agency’s board says it will discuss with the city and the county. The other choices are to return to Superior Court to hash out the fate of the $535,000 at stake — or to simply settle. Ramsey thinks it’s time to sit down with the plaintiffs and work out a settlement “if they’re willing to accept a reasonable amount of money. If they ask for the sky, we can’t settle.” But “there’s three players in this — everybody’s got to align” before deciding which option to pursue. “This may bring us closer to closure,” hopes Mumpower, who expects City Council to take up the issue at its next meeting. “It’s an anvil hanging over everybody’s head.”

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