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Manchester Board of Education reopens lawsuit against Coffee County

Posted on Tuesday, August 12, 2014 at 8:13 am

By Josh Peterson, editor

The Manchester City Board of Education has filed a lawsuit against Coffee County seeking $1,560,076.88 plus pre-judgment interest in what amounts to the re-opening of litigation that the board dropped in 2007.

According to court documents filed Aug. 5 in Coffee County Circuit Court, the city school system is seeking approximately $1.5 million from the county government to allocate for misappropriated second half sales tax collections between 1983 and 2007.

The city school system was originally part of a lawsuit filed by Tullahoma City Schools and both Tullahoma and Manchester municipalities July 11, 2006, seeking the money but Manchester dropped out of the lawsuit in 2007. Tullahoma City Schools were seeking $4.1 million from the county, did not drop the lawsuit, and eventually settled for $2 million in October, 2009.

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“The $1.5 million would amount to about 16 cent property tax increase on Coffee County residents to cover and that is the only way to pay for it,” said outgoing Coffee County Mayor David Pennington, who was in office during the lawsuit with Tullahoma. “You can’t finance a lawsuit, so a property tax increase will have to happen.”

The lawsuit is asking for the judgment to cover the misappropriation of second half sales tax that the county was to share with the city school systems during the stated time frame. Instead, the money was allocated to the county’s general purpose school fund. The practice was corrected July 1, 2007.

The county paid the lawsuit with Tullahoma in installments. The first installment of $250,000 was paid in Oct. 2010. The remainder was paid in $350,000 yearly installments (including interest) beginning Dec. 31, 2011.

“I’m not sure what stirred the pot and has brought this back up, but I hope that someone will influence this before it gets a head of steam,” said Coffee County Commissioner Rush Bricken, who is chairman of the county finance committee. “When any of these entities sue each other, everyone is hurt. It is not a game here.”

The current lawsuit filed by the Manchester School Board is also seeking pre-judgment interest.

“The county knew about this and the amount was clearly affordable, so the court can rule in favor of pre-judgment interest,” said attorney Clifton Miller, who is representing the school board in the lawsuit. Miller also represented the Tullahoma City Schools during its lawsuit. “This lawsuit basically is asking for the exact same amount as before. The only difference is we did not have the information for [fiscal] year end 2007, which is on this one.”

The addition of fiscal year 2007 adds approximately $78,437.10 to the lawsuit amount.

The Manchester Times attempted to reach Director of Manchester City Schools Dr. Keith Brewer for comment but he was unable to be reached.