South Whidbey School Board looks into district’s earthquake liability

South Whidbey School Board members may have a case of the shakes.

If a serious earthquake occurs between now and the closure of Langley Middle School in June 2012, what exactly is the legal liability for the district and individuals?

That question was posed to a law firm hired by the district late last year after the board voted to close the 76-year-old school rather than pay $3 million to bring it up to modern seismic standards. The same question was asked of the district’s insurance carrier.

The response was mixed at best.

First, the good news.

In her letter to the board, attorney Jennifer Divine concluded that “while there is a risk of liability from the decision to house students in LMS over the next one or two years, the risk is reasonably low.”

She added that her firm does not believe school board members run any significant risk of personal liability if an earthquake strikes while LMS is still in use.

In her finding, the attorney added that the district has no statutory or regulatory duty to retrofit older school buildings, especially if closing the school and moving students elsewhere — in this case, to South Whidbey High School — is already a work in progress.

Divine said, however, that should damage result from an earthquake, the district can expect lawsuits. Even a minimal risk of injury from a catastrophic earthquake could have a significant dollar value attached.

“Clearly, the school board must weigh the risk of harm to students arising from a possible earthquake with the potential disruption to students’ education caused by an immediate closure,” Divine wrote.

And now, the not-so-good-news.

The message from the district’s insurance carrier, Washington Schools Risk Management Pool, carried a sterner warning.

In an e-mail from assistant director Deborah Callahan, board members were told the legal risk is higher.

“In short, because the district has a building in service which is already compromised for its structural soundness during an earthquake, there exists a strong risk of having an uninsured loss and a financial shortfall,” Callahan wrote.

She added that, depending upon the number of injured and the severity of injuries, the district’s $20 million liability coverage may be exhausted, leaving the district with exposure to more claims than it can pay.

School board member Fred O’Neal found the two conclusions to be contradictory at best.

“Under some circumstances, there is district and personal liability,” he said. “But the lawyer said the risk is slight because we are taking steps to move students out of the building. And the risk pool said we could be in deep financial trouble. What is certain is that this issue is not black-and-white.”

Divine spent 27.3 hours crafting her letter at a cost to the district of $5,500. The insurance carrier’s response was part of its contract and cost nothing.

The reason for the decision to close LMS is related to the current budget crisis, primarily driven by a decline in enrollment. The district must deal with a shortfall next year of just under $1.6 million. That’s on top of last year’s $1.85 million deficit.

District officials cited the seismic work that was needed when they made the decision to close LMS. In the March 30 letter from the school district’s attorney, Divine noted that state law does not require the retrofitting of schools that were built before current seismic standards were put in place.

At 6:30 p.m. tonight, the board will discuss the letters from the attorney and risk management pool.

Also on the agenda is District Superintendent Fred McCarthy’s suggested timeline for the consolidation of LMS and the high school and updates to modernization costs from business manager Dan Poolman.

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