Court: Charter schools don't owe millions to KC district

KANSAS CITY, Mo. -- An appeals court ruled Tuesday that a Cole County judge erred in ordering charter schools to repay millions to the Kansas City School District.

At issue was money diverted from charter schools to help the Kansas City district pay off bonds that were issued to build and upgrade schools as required by a long-running federal desegregation case. Between $800 and $1,000 per student was withheld annually from Kansas City charter schools from 1999 to 2005, then later resumed in smaller amounts.

The withholdings began when the publicly funded schools opened in the city and began luring district students, and temporarily ended in 2005, when the Missouri Board of Fund Commissioners found the district didn't need the money from the charter schools to pay off the bonds.

The district alleged that the state was reneging on a 1997 settlement in which the state paid $320 million to exit the district's desegregation case. The district, which remained a defendant until court supervision of the desegregation case ended in August 2003, said the settlement agreement stipulated that the state refrain from acts that would undermine the district.

The withholdings resumed after a federal judge ruled in June 2006 that the money was needed to pay off the bonds. The district then sought to get back the $6.2 million it was unable to collect over that one-year span.

In October 2011, a Cole County judge sided with the Kansas City district and said it was owed the $6.2 million from the state, plus interest. The trial judge also ordered some of the charter schools to repay the district if the state did not.

But the appeals court disagreed in Tuesday's ruling, saying the district had paid the money voluntarily and couldn't get it back.

"This has been going on for seven years," said Douglas Thaman, executive director of the Missouri Charter Public School Association. "And it's time to put this to bed and focus on educating kids."

The association's attorney, Chuck Hatfield, said the district could seek a rehearing or ask to have the case transferred to the Missouri Supreme Court. But he added: "We are hopeful this decision spells the end."

The district didn't immediately comment.