The Roseville City School District has settled its suit against St. John's Parish and the Episcopal Diocese of Northern California for a little over $100,000 about half the amount owed to the district.
The suit, filed last summer, originally asked for more than $200,000 to cover two years of unpaid rent for St. John's School, as well as for utilities, insurance, interest and attorneys fees.
"The district is pleased that a satisfactory resolution was reached that brings this unfortunate situation to a close," said Rich Pierucci, superintendent of Roseville City Unified.
St. John's School rented the school district's Barbara Chilton Middle School campus at 4501 Doyle Drive in Roseville for four years.
School district and church officials say a prolonged court battle would have cost all parties much more in the end. Attorneys in the case applauded the leaders of all three organizations for their efforts to resolve the suit amicably.
"We are happy with the settlement," the Rev. Cliff Haggenjos, rector of St. John's Parish, said Friday. "We are really just here to serve the community."
The settlement is the latest chapter in the demise of the private Episcopal school, which closed abruptly in May because it could not pay its bills. School officials filed for bankruptcy protection in September, listing nearly $1 million of debt.
Parish and diocese officials have always said that the school was independent of the church and that they were not responsible for the debt. But they opted to work "cooperatively with the district to resolve this dispute for the benefit of the community," according to a joint statement released last week..
The school and the parish have been closely associated over the years. St. John's School founded by the Episcopal Church of Roseville in 1989 shared the Barbara Chilton campus with St. John's Church for two years before the church moved to its new campus at 2351 Pleasant Grove Blvd. The church rector also held a permanent seat on the school's board of trustees, although he had no vote.
Some have said that the Rev. Paul Hancock was the cause of the school's financial troubles. They said the headmaster mismanaged school funds, including borrowing $220,000 from the church to draw up plans for a new school when there wasn't enough money to complete the project. In May, Hancock told The Bee the school's financial woes started four years ago because of declining enrollment and nonpayment of tuition.
Hancock resigned in November 2011 in connection with the school's financial problems, according to a letter from parish officials.
Bankruptcy records show that the school has more than 50 creditors with a total debt of $930,000. Court documents show the school's debt includes nearly $10,000 in taxes owed to Placer County, $5,400 to the city of Roseville, $95,000 to the Episcopal Diocese of Northern California and $26,470 to Wells Fargo.
A Placer Superior Court judge awarded textbook publisher McGraw-Hill $6,511 in July for textbooks it delivered to St. John's School.
Two parcels of land valued at approximately $906,000 are listed as assets, as well as $50,170 in uncollected tuition and $32,000 worth of school furniture and office equipment.
The future of the land is uncertain. The property adjacent to St. John's Parish is now in the hands of the bankruptcy estate, although the parish and Episcopal Diocese hold liens on the property for more than $460,000 owed them by the school.
The use of the property, donated by a builder, also is subject to a number of conditions. It can only be used for a school and for educational purposes consistent with the canons of the Episcopal Church, according to court documents.
The facility must be at least 25,000 square feet, have approximately 15 classrooms and have construction permits by July 2, 2014.
The conditions on the property make its actual value difficult to determine, according to court documents. Haggenjos said the land will be used to serve the community if it comes back into the control of the parish. He said he has no specific plan at this time.