The lawsuit stemming from intergovernmental strife in Woodland Park has been ruled in favor of its city council.

A Teller County District judge issued a ruling Monday to dismiss the case against the city of Woodland Park by its local school district.

The complaint alleged that the city council had violated its intergovernmental agreement (IGA) with Woodland Park RE-2, the city’s home rule charter and procedural requirements when it repealed the sales tax contributing to local school funding during an emergency meeting in March.

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The school district specifically alleged that council members went into an executive session without following the proper procedure at the meeting and that their decision to repeal the tax was rooted in political reasons rather than legislative.

The decision to repeal the sales tax that contributed more than $3 million annually to the school district came as a swift response to its board of education’s attempt to sell one of its buildings to local charter school Merit Academy.

One condition of the IGA also was for the district to submit detailed reports to the council about how exactly the tax dollars were being used. That became a point of contention when submissions were deemed inadequate. 

When councilmembers learned about the agenda item one day after they had voted to indefinitely suspend an ordinance to repeal the tax, they then called the emergency meeting to repeal it because they believed it was the latest act in bad faith by the board of education.

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In its complaint, the school district requested a temporary restraining order for the repeal, damages related to the alleged breach and awards for costs and attorneys’ fees.

In the motion to dismiss, District Court Judge William Moeller noted that both parties acknowledge the city council’s authority to enact, amend and repeal local ordinances and that their legislative decision to repeal the tax was not subject to judicial review.

“I note that Plaintiff alleges fraud but offers no specificity as to what the fraud entailed other than making a claim that no emergency existed,” Moeller wrote.

“(The) Plaintiff does not make a specific claim as to how the Council failed to comply with the City Charter or how the City Council’s acts constituted a quasi-legal action.”

He went on to note that, while Colorado law requires voter approval for the imposition of local taxes, it does not require voter approval for their repeal.

Regarding the school district’s allegation that the city council violated their IGA, Moeller ruled that the council’s legislative authority usurped the interpretation of these agreements as “perpetually binding” and that there was no promise to maintain the sales tax in this case.

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As for the alleged motivations behind the council’s decision, Moeller said this claim is not supported by law.

“The underlying issue here is a political dispute between two government bodies that must be resolved by the voters,” Moeller said.

When reached for comment, Woodland Park Mayor Kellie Case said that she was pleased with the result for local taxpayers and appreciated the court’s decision. 

The 1.09% sales tax earmarked for schools was originally approved in 2016 to supplement the RE-2’s annual budget. Now that the IGA has been repealed, it could only return through a new ballot measure either initiated by citizens or legislatively referred by the city council. 

Case said that she wouldn’t advise the city to go this route again, calling the revenue source “atypical” and “not appropriate” for a school district.

“The city has its own priorities with its funding,” she said. “And the school district should be in charge of its own funding, not the city.”  

Woodland Park RE-2’s board of education approved the general budget for the 2025-26 school year during its regular board meeting June 11, which did not factor in the tax revenue like previous years. The sales tax most recently accounted for more than $3 million of the district’s $30.8 million budget for the 2024-25 school year.

During the board’s regular meeting on May 7, it was suggested that the lost revenue from the sales tax contributed to a 10% reduction of the district’s workforce and eliminated any salary raises for the remaining workforce this fiscal year.

Woodland Park RE-2 Board President Mick Bates added that the forensic audit currently being conducted for the district’s finances also accounts for one-time expenditures in their current budget.

He said that he was “obviously disappointed” with the court’s ruling, but noted that no programs in the district, to date, have been cut because of the lost revenue. 

Bates added that possible new revenues discussed since the lost sales tax included a county-wide sales tax that would benefit their district along with the neighboring Cripple Creek-Victor RE-1, since initiatives to increase property taxes through mil levy overrides and new bonds don’t have a great history of success. 

Bates said the recent actions of the city council members were “beyond anything I could have imagined.” 

“I don’t think those decisions on city council were for the kids of Teller County,” he said. “And if they want to do this to punish the school board, then so be it. But they need to realize that this ultimately hurts the kids.”