Lawsuit Looms over AUSD

Lawsuit Looms over AUSD


Measure B1 parcel tax in question

Three owners of commercial property in Alameda — Nelco, Inc., Santa Clara Investors II and Edward Hirshberg — have filed suit in Alameda County Superior Court against the Alameda Unified School District (AUSD). Records list Hirshberg as president and two other members of the Hirshberg family — Jerilyn and Wilson — as part-owners of Nelco Inc. 

The suit challenges the validity of Measure B1 that Alameda voters approved on Nov. 4, 2016. The school district put Measure B1 on the ballot to extend the life of Measure A, which voters passed in 2011. Measure A is set to expire in 2018. Measure B1 essentially extends the Measure A parcel tax through 2025.

These same three plaintiffs sued AUSD over two other school bond measures. They were parties to the 2008 lawsuit that George Borikas filed over Measure H. They sued again in 2011 over their obligations to pay the Measure A parcel tax.

On Feb. 21, 2008, Borikas & Co. sued the school district, claiming that Measure H’s different rates for residential and commercial property owners were not uniform, something state law requires.

On June 3, 2008, Alameda County Superior Court Judge Kenneth Mark Burr ruled in AUSD’s favor. In his ruling Burr stated that the tax structure of Measure H was acceptable. Borikas & Co. appealed, and in a unanimous decision, the California Courts of Appeal agreed with them. On Dec. 6, 2012, the First District, Courts of Appeal declared “Measure H’s property classifications and differential tax burdens exceed the (School) District’s taxing authority.”

AUSD appealed the ruling to the California’s Supreme Court. The judges at the highest state level refused to hear the case. The Courts of Appeal ruling stood, and in 2014, the school district refunded some of the money that the plaintiffs had paid as their share of the tax. 

In 2011, while the appeals in 2008 lawsuit over Measure H were still underway, the plaintiffs were back in court. This time they were suing over Measure A, the school bond measure that voters approved on March 8, 2011. Less than two months later, on May 6, 2011, Hirshberg told the courts that Measure A “implements the same unfair tax structure as its predecessor.” 

That same month, Measure A opponents submitted documents to the Attorney General of California’s office stating that they could establish that school employees used district computers and other resources to campaign for Measure A. 

On Sept. 13, 2011, the courts ruled in favor of AUSD. Hirshberg & Co. did not appeal the ruling. 

On Nov. 6, 2016, in a record turnout, 74.2 percent of Alameda voters approved the Measure B1 parcel tax. In a press release rebutting the lawsuit against Measure B1, AUSD stated that Hirshberg & Co.’s actions threaten more than $12 million in annual revenue, the school district’s second-largest revenue stream. 

AUSD stated that this money is “allocated to a wide range of programs and services, including small class sizes for grades K-3, neighborhood elementary schools and high school sports.” Loss of this money could also jeopardize Advanced Placement (AP) classes, programs to close the achievement gap, as well as visual and performing arts, AUSD stated.  

“We are disappointed that these plaintiffs continue to try to block this funding. But we structured Measure B1 in a way that we believe is fair and legal, and we will fight for this tax, these students and our community with determination and diligence,” said Superintendent Sean McPhetridge.

Ironically, some claim that the Measure B1 tax is unlawful because it imposes a cap of $7,999 per parcel. Critics have pointed out that the measure benefits the owners of large properties, like the current plaintiffs, Hirshberg, Nelco, Inc. and Santa Clara Investors II.