The North Bend School District has sued the South Coast Education Service District, alleging it diverted money meant for North Bend to other districts.
North Bend argues the practice violates the funding formula established in state law.
Educational service districts are regional public education agencies that provide funding to school districts for services like technology support and special education.
"North Bend, like many districts around the state, is underfunded relative to the needs of its students, and its funds were taken from it and given to other districts," said attorney Jeanne Sinnott, who represents the school district. "It was treated inequitably compared to other districts within South Coast, and there was just no legal basis for doing so."
School districts receive money from the state school fund through a formula based on enrollment, with more funding for students who are pregnant, in poverty or English language learners, among other factors.
In a statement, Steve Ungar, the attorney representing the education service district, said it has “consistently implemented the regional funding model in alignment with long-standing agreements”.
The lawsuit also names the ESD's current superintendent as well as two former superintendents.
"No other district within South Coast ESD faced the same treatment," it reads, while other districts received more funding than they should have.
The suit claims this practice began in the 2015-2016 school year and only stopped in December 2024, when North Bend's administration discovered it.
"In late 2024, when South Coast brought this funding agreement forward for review with the region’s school district business managers, North Bend’s superintendent requested a change and South Coast immediately honored that request," Ungar wrote.
The school district is seeking acknowledgment that what happened violated state law, a permanent injunction prohibiting the ESD from doing it again and the $1.2 million it says it is owed, according to the lawsuit.
Sinnott said formal mediation was unsuccessful, and the education service district hasn't given a reason why it sent the money elsewhere.
"Whether it's direct services, like speech pathology or nursing, or it's administrative support, teacher training, technology support," she said. "It's just less money to provide the services that students are entitled to."
Ungar said the South Coast ESD "remains committed to working in good faith to reach a shared understanding and resolution of all issues raised in the now pending litigation."
