Permissible payment methodologies under A.R.S. § 15-393(L)(9)

To:

Kevin Koebel, Director of Legal Services, East Valley Institute of Technology

Pursuant to A.R.S. § 15-1448(H), we generally affirm the conclusions reached by the opinion you prepared for the East Valley Institute of Technology (“EVIT”), a career technical education district (“CTED”),regarding whether various payment methodologies comply with A.R.S. § 15-393(L)(9).^[1] That opinion is attached hereto as Appendix A. 

CTEDs (formerly known as “joint technological education districts”) are education districts formed by two or more school districts to provide career technical education (“CTE”) courses and programsto students within those districts. See generally A.R.S. §§ 15-391(3), 15-392. CTEDs may provide CTE courses and programs at a central campus owned or operated by the CTED or on a member district’s campus pursuant to an intergovernmental agreement (“IGA”) with the member district. A.R.S. § 15-393(L).

A.R.S. § 15-393(L) sets forth specific requirements for an IGA between a CTED and a member district. One is that the IGA must “completely and accurately specify . . . [t]hat the payment for services shall not exceed the cost of the services provided.” A.R.S. § 15-393(L)(9). 

The submitted opinion outlines, at a high level, four methods for calculating payments owed to member districts for services provided by them in connection with CTE courses and programs on their campuses pursuant to A.R.S. § 15-393(L)(9). It concludes that two of the methods appear to accurately reflect the actual cost of services, as required by § 15-393(L)(9), while two do not.

We generally agree with the conclusions reached, based on the provided descriptions of the four payment methods. But we express no opinion on whether these methods, as presented here, comply with other statutory requirements, including those in other subsections of A.R.S. § 15-393(L), nor do we express an opinion on whether the methods discussed herein comply with the Uniform System of Financial Records. Further, there could be language in other provisions of the final IGA that could significantly affect the manner in which payments are calculated that may affect the distribution of the payments between the parties. Thus, while we can make general conclusions and provide general guidance with respect to the specific language presented in isolation here, whether an IGA containing this language is compliant with A.R.S. § 15-393(L)(9) will necessarily require review of the complete agreement, rather than just certain or select portions thereof. 

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Kris Mayes

Attorney General