Atlanta Public Schools to settle city lawsuit with $2 million payment

The Atlanta Board of Education agreed to pay $2 million to settle a three-year-old lawsuit with the city of Atlanta over school bond debt.

The board approved the agreement Tuesday without discussion. Board documents state that APS will release funds held in escrow “to fully resolve” the 2019 lawsuit filed by the city in Fulton County Superior Court. An Atlanta Public Schools spokesman declined to comment.

“The city is pleased that we are working toward resolution of the matter,” said a spokesman for Mayor Andre Dickens.

The city managed the public school system until 1973, when the two became separate entities. In its suit, the city alleged that it paid off school bond debt in 2014 and 2016 and said APS owed more than $9 million for the principal and interest on the bonds.

ExploreCity suit claims Atlanta school district owes it $9 million

In a 2019 court filing in response to the lawsuit, APS attorneys wrote that information provided by the city about the bonds “has been inconsistent, unexplained, unverified, and insufficient to show that APS owes any money to the city for the bonds.”

The question over the bonds also has been noted in a couple of the district’s recent annual financial reports. In those reports, APS contends “it is not legally obligated to pay the sums requested by the city.”

The legal dispute is one of several battles between APS and city hall in recent years. The school system and city have fought over who should control the deeds to school properties and the use of future school property taxes to incentivize development projects.

Dickens, who took office in January, has said he wants to repair the strained relationship. He named Lisa Herring, hired as superintendent in 2020, as an honorary co-chair of his transition team. In a symbolic gesture, he attended the school board’s swearing in ceremony earlier this year and pledged to partner with the district.

The mayor also backed a plan to raise $20 million, including a contribution from the city, to invest in early childhood learning, long a priority of APS leaders.

Staff writer J.D. Capelouto contributed to this article.