When Decisions Matter.

Contracts over $100: Districts must have an affirmative vote of the majority of the full board

As a general rule, a majority of the members (quorum) on a school board must be present for the meeting to take place. Many agenda items may be approved by a majority of those members present at the school board meeting. In certain circumstances, Pennsylvania law requires the affirmative vote of the majority of the full board in order for a particular agenda item to pass.

The rule, derived from Section 5-508 of the Pennsylvania School Code, outlines the particular subject areas in which voting requirements may apply. Such subjects include appointing or dismissing district superintendents and principals; adopting the annual budget; levying and assessing taxes; and… entering into contracts of any kind, including contracts where the amount involved exceeds one hundred dollars ($100). Failure to comply with §5-508, which requires a record of how each member voted on the subject, renders the acts of school directors void and unenforceable.

An often forgotten provision of this section requires a majority vote of the full board for contracts exceeding $100.00. Virtually all contracts that school districts enter exceed this threshold, thus implicating the §5-508 vote requirement. Examples of such contracts include such minor contracts for things like yearbooks, books, and supplies. So, are school boards correctly voting on every contract exceeding the $100.00 threshold? Two Pennsylvania cases suggest that they are not and illustrate the unenforceability of contracts that fail to receive the §5-508 vote requirement.

In 2004, the Commonwealth Court held that a contract entered into by the school district’s duly appointed and authorized agent was unenforceable because the Board failed to hold the required §5-508 vote. Berkheimer Associates ex rel. N. Coventry Twp. v. Norco Motors, 842 A.2d 966 (Pa. Commw. Ct. 2004). The school district and local township appointed Berkheimer as a tax collector who entered into a $100,000 settlement agreement to resolve a tax dispute. The Court held that “persons relying on agreements with an agent of the school district without first obtaining approval by a vote of the majority of the members [of the full school board] at a public meeting do so at their peril.” A majority of the full board did not approve of the settlement agreement, therefore the contract was unenforceable, whether the tax collector was an appropriate agent or not.

Oral and written modifications to existing contracts are also subject to the §5-508 vote requirement. In Wayne Moving & Storage of New Jersey, Inc. v. Sch. Dist. of Philadelphia (3d Cir. 2010), the school district entered into a valid contract for consolidating administrative buildings and complied with the §5-508 voting requirement. Later, after unexpected delays, a school administrator “agreed” to pay additional expenses incurred by the moving company. The Third Circuit Court of Appeals refused to enforce the additional $830,071.68 incurred by the moving company because the school board failed to approve the additional expenses with the required §5-508 vote to amend the contract.

Pennsylvania courts have maintained a strict interpretation of the §5-508 vote requirement. Oral and written contracts exceeding $100.00 must receive a majority vote of the full school board to be enforceable. Contracts that are not approved through the §5-508 vote requirement are subject to legal challenge. Contact the School Law Group with any questions regarding school board voting requirements or any other school law related issue.

Subscribe to our Newsletters

Get the latest news and information from the trusted professionals at Stock and Leader delivered straight to your inbox. Select areas of interest below.

Select your area of interest:
  • Select your role:
  • Select your role:
  • Select your role:
  • Select your role:

©2020 Stock and Leader, Attorneys-at-Law.
All Rights Reserved.

Stock and Leader strives to maintain an accessible website compliant with the Americans with Disabilities Act.