The Mississippi Supreme Court has ruled in favor of the Simpson County School Board’s validation of up to $27,600,000 in trust certificates for a lease/leaseback transaction to fund the construction of a consolidated and centrally located high school for Simpson County pursuant to the Emergency School Leasing Authority Act (E.S.L.A).
In 2022, after the Simpson County School Board had voted to build the consolidated high school, objectors Thomas Ray Floyd, Ray Floyd, Lee McCoy, and Jason McCoy, filed a motion objecting to the validation of the School Board’s resolution to approve a lease purchase agreement, citing that the board could not use the E.S.L.A because it was extinct and that the notice published by the Board was insufficient and violated due process.
The objectors also argued that the Board does not have the authority to create a corporation to engage in the lease/leaseback transaction, and that the Board had unlawfully amended its minutes.
Simpson County Chancery Judge Gerald Martin ruled to validate the School Board’s right to enter a lease purchase in September of 2023. During the trial Judge Martin stated that there is limited case law available concerning this matter and that the Mississippi Supreme Court has not heard a case such as this one to date.
After hearing testimony, Judge Martin ruled that the Simpson County School District did meet all of the requirements of the statute. Martin agreed that the published notice was not very informative, but it did satisfy the statutes.
The court ruled that the proposed capital lease should be validated. Judge Martin ruled that the objectors could file an appeal to a higher court without supersedeas.
On November 14, 2024, The Supreme Court of Mississippi upheld the ruling by Judge Martin. The Supreme Court stated that the chancellor’s finding in favor of validation for the Simpson County School Board is affirmed. The Supreme Court concluded that the Board properly amended its minutes, and the Board properly gave notice under the statutory requirements. Under the Mississippi Non-Profit Corporation Act, the District could create a corporation, and the Board could use the procedure set forth in the E.S.L.A. as its statutory funding mechanism.
School Board member Stan Bulger said, “Our next step is to move forward with the consolidation project. I’m pleased with the ruling that we expected from the Supreme Court that followed the laws of Mississippi.”
The board previously voted to enter the lease purchase agreement to build a consolidated high school via a majority vote with board member Stacey Herrin being opposed.
As of January 2025, the board will consist of three new members since the initial vote to build a consolidated high school. These new members include current board president Ralph Walker, Terra Mallete, and Thomas Ray Floyd, who was named as an objector in the filed motion.
Thomas Ray Floyd offered a comment on behalf of the objectors to the Supreme Court ruling. Floyd said, “We are of course disappointed with the ruling. The capital lease financing proposal was an effort by the school board to circumvent the will of the majority of Simpson County. In March 2022, Simpson countians rejected overwhelmingly the school board's proposal of a consolidated high school and a $39 million bond issue to build it. We rejected the consolidation and bond issue by a wide margin of 57 percent to 43 percent for several reasons.”
Floyd said the school board was asked to be sensitive to the will of the people and to drop the idea of consolidation. He emphasized that he and the others did not sue the school board but simply objected to the capital lease resolution.
Floyd said, “Our attorney, Mr. George Whitten from Greenwood, pointed out several defects in the resolution. The chancellor validated the resolution, but in issuing his ruling, stated that he had no case law to guide his decision. “
The Supreme Court ruling has established a precedent for other chancellors to follow in validation hearings under the E.S.L.A that created capital lease financing.
Floyd said, “As everyone knows, I was elected by the people of District 3 to represent them on the school board, starting in January. I received 50.23 percent of the vote, which made a runoff unnecessary. I ran openly to continue to oppose consolidation. Mrs. Bri Kelly also ran openly against consolidation and received 21 percent of the vote. In other words, the people of District 3 have said they are still opposed to consolidation by a margin of over 70 percent.”
The Simpson County School District plans to move forward with building a consolidated high school.
