IN THE SUPREME COURT OF IOWA No. 51 / 05-1255
Filed September 28, 2007
IOWA ASSOCIATION OF SCHOOL BOARDS,
Appellant,
vs.
IOWA DEPARTMENT OF EDUCATION and THE IOWA AUDITOR OF STATE,
Appellees.
Appeal from the Iowa District Court for Polk County, Scott D.
Rosenberg, Judge.
Nonprofit corporation representing interests of school districts
appeals district court decision on judicial review affirming agency
declaratory orders refusing school districts’ request to use special
property tax levy to pay portion of districts’ fuel costs. AFFIRMED.
Dennis W. Johnson and Cristina F. Kuhn of Dorsey & Whitney
LLP, Des Moines, for appellant.
Thomas J. Miller, Attorney General, and Christie J. Scase,
Assistant Attorney General, for appellees. 2
TERNUS, Chief Justice.
School districts in Iowa want to use a special property tax levy to
pay for a portion of their transportation fuel costs. The appellant, Iowa
Association of School Boards, sought separate declaratory rulings from
the appellees, Iowa Department of Education and the Iowa Auditor of
State, that would authorize member school districts to expend property
taxes levied under Iowa Code section 298.4 (2003) on fuel purchased
under a “fleet services program” administered through the association.
Both agencies ruled school districts could not use monies raised by the
special property tax levy permitted by section 298.4 for this purpose.
The agencies’ declaratory orders were affirmed by the district court on
judicial review. After considering the arguments of the parties and the
relevant legal authorities, we agree with the district court and affirm its
decision.
I. Background Facts and Proceedings.
The facts in this case are undisputed. Every school district in Iowa
is required to provide transportation to students living more than a
specified distance from the student’s designated school. Iowa Code
§ 285.1(1). The annual cost of fuel to provide this transportation is a
major expense for school districts. While the expense of fuel poses a
challenge in itself, budgeting for this expense in a time of fluctuating fuel
prices is even more challenging.
School districts operate on a fiscal year of July 1 through June 30.
See id. § 24.3. Local property taxes and state aid are the two primary
funding sources for the districts. See generally id. ch. 257. In order to
allow sufficient time to set property tax rates for the following year,
districts must certify a budget for the upcoming fiscal year by April 15.
See id. §§ 24.17, .20. After a budget is certified and the time for 3
amendment has expired, the district’s authorized expenditures may not
exceed the budgeted amount, as supplemented by any unspent balance
from the preceding year. Id. § 257.7. In addition, the authorized tax
rates and levies computed on the basis of the certified budget are final
for the ensuing fiscal year. Id. § 24.20.
Because budgets are finalized so far in advance, school districts
face a constant uncertainty over the impact an increase in fuel prices will
have on their operating budgets. The Iowa Association of School Boards,
a nonprofit organization representing the interests of its public-school-
district members, devised a way to assist school districts in reducing and
managing unpredictable and rising fuel costs. Through a program
administered by the association, Iowa Joint Utilities Management
Program, Inc. (IJUMP), participating members are offered the opportunity
to purchase fuel at a set price throughout the fiscal year. Under IJUMP’s
“fleet services program,”1 each participating district enters into a twelve-
month, renewable participant agreement that designates IJUMP as the
district’s contracting agent for the purchase and delivery of vehicle fuel.
The district is then permitted to purchase fuel throughout the fiscal year
at a guaranteed price that is established on January 31 of the preceding fiscal year.
In addition to promising to pay for gasoline purchased pursuant to
the agreement, the district agrees to pay an annual “risk management
fee” determined on the basis of the price per gallon and the total number
of gallons that the district “elects to insure” during the term of the
1The “participant agreement” between the individual school districts and IJUMP refers to the fuel-purchase arrangement as “Fleet Services,” “the Fleet Services Program” or “IJUMP-Fleet Services.” In contrast to the contractual language, the association refers to the fleet services program in its pleadings and briefs as a “fuel risk management program.” We, like the agencies whose decisions are challenged in this appeal, choose to use the contractual language. 4
contract. IJUMP uses the management fee collected from the
participating district to pay any difference between the guaranteed fuel
price and the actual price of fuel delivered to the district. At the end of
the fiscal year, any surplus in the district’s account, i.e., any remaining
management fee paid by the district, may be rolled over to the next fiscal
year. Alternatively, the district may choose to receive a payment based
on the number of gallons of fuel purchased during the year, minus
program administration costs. If the management fee is insufficient to
cover the difference between the guaranteed price and the actual cost of
the fuel used by the district, IJUMP will bill the district for the shortfall
or will charge a higher fee in the following year to cover the deficit.
The present dispute arises from participating districts’ desire to
pay the management fee required by the fleet services program through a
special “district management levy” authorized by Iowa Code section
298.4. Section 298.4 allows a district to levy a property tax in addition
to the property taxes for the general school fund permitted by chapter
257. The tax collected through the district management levy must be
placed in the district’s management levy fund and can be expended only
for purposes specified in section 298.4.
In January 2005, the association, on behalf of its members, filed
petitions for declaratory order with the Iowa Department of Education
and the Iowa Auditor of State seeking declaratory rulings that the school
districts had the authority to use district management levy funds to pay
the management fee required for participation in IJUMP’s fleet services
program. The association contended this expenditure was authorized by
section 298.4(3), which allows payments from the district management
levy fund “[t]o pay the costs of insurance agreements under section
296.7.” 5
In identical declaratory orders, the department and auditor ruled
that the fleet services program was not “insurance” as that term is used
in section 296.7. The agencies stated that “[t]he essence of an insurance
agreement is that one party pays consideration to a second party in
return for the second party assuming some specified risk for the first
party.” They noted that, under the fleet services program, “no risk is
assumed by IJUMP. The risk remains with the participating districts at
all times.” The agencies concluded the fleet services program was “akin
to a budget-billing plan where the certainty of the price of fuel is set for a
twelve-month period, but increases are still eventually absorbed solely by
the district.” Based on this analysis, the agencies ruled the management
fee for the fleet services program did not represent the cost of an
insurance agreement, and accordingly, “a district may not fund any part
of its participation from the district’s management levy funds.”
The association filed a petition for judicial review, asking the court
to reverse the agencies’ decisions. Initially, the district court determined
the Department of Education had authority to interpret chapters 296
and 298. Therefore, granting appropriate deference to the department’s
interpretation of the pertinent statutes, the district court reviewed the
department’s decision under section 17A.19(10)(l). This statute states, in
part, that the court “shall reverse, modify, or grant other appropriate
relief from agency action” if the agency action is “[b]ased upon an
irrational, illogical, or wholly unjustifiable interpretation of a provision of
law.” Iowa Code § 17A.19(10)(l). After analyzing the language of section
296.7(1), the court agreed with the agencies that the participant
agreement for the fleet services program was not an “insurance
agreement” as contemplated by that statute. Therefore, the court held, 6
“the agencies logically, rationally and justifiably applied [the governing
statutes] to the facts of this case.”
The association has appealed the district court’s decision, raising
two issues. First, the association contends the department’s
interpretation of section 298.4(3) and section 296.7(1) is not entitled to
deference. Secondly, the association argues school districts have
authority to use district management levy funds to pay the management
fee required for participation in the IJUMP fleet services program. We
address each issue separately.
II. Standard of Review.
A. General Principles. We review district court decisions on
judicial review of agency action under the standards of Iowa Code
chapter 17A, the Administrative Procedure Act. Mosher v. Dep’t of
Inspections & Appeals, 671 N.W.2d 501, 508 (Iowa 2003). Section
17A.19(10) governs review of the agency action itself. Applying the
standards of section 17A.19(10), we determine whether our conclusions
are the same as those of the district court. Id.
In this case, the association’s challenge is based on the agencies’
alleged erroneous interpretation of the controlling statutes.
Consequently, one of two possible standards for review applies. Under
section 17A.19(10), a court must reverse agency action when
“substantial rights of the person seeking judicial review have been
prejudiced because the agency action is any of the following”:
c. Based upon an erroneous interpretation of a provision of law whose interpretation has not clearly been vested by a provision of law in the discretion of the agency. .... l. Based upon an irrational, illogical, or wholly unjustifiable interpretation of a provision of law whose 7 interpretation has clearly been vested by a provision of law in the discretion of the agency.
Iowa Code § 17A.19(10)(c), (l). As a comparison of these provisions
reveals, the appropriate standard of review depends on whether the
legislature has clearly vested the interpretation of the statute at issue in
the discretion of the agency.
When an agency has not clearly been vested with the discretion to
interpret the pertinent statute, the court gives no deference to the
agency’s interpretation of the statute. Id. § 17A.19(11)(b). Under these
circumstances, the court on judicial review simply determines whether
the agency’s interpretation was “erroneous.” Id. § 17A.19(10)(c); see also
Auen v. Alcoholic Beverages Div., 679 N.W.2d 586, 590 (Iowa 2004).
When the agency has been granted discretion to interpret the statute at
issue, the court must “give appropriate deference” to the agency’s
interpretation. Iowa Code § 17A.19(11)(c). In this situation, the agency’s
interpretation of the statute will be followed unless it is “irrational,
illogical, or wholly unjustifiable.” Id. § 17A.19(10)(l); see also ABC
Disposal Sys., Inc. v. Dep’t of Natural Res., 681 N.W.2d 596, 602 (Iowa
2004).
In deciding whether the interpretation of a statute has clearly been
vested by a provision of law in the agency’s discretion, we give no
deference to the agency’s view of this matter. Iowa Code § 17A.19(11)(a).
To inform our decision, we consider “ ‘the precise language of the statute,
its context, the purpose of the statute, and the practical considerations
involved.’ ” Mosher, 671 N.W.2d at 509 (quoting Arthur E. Bonfield,
Amendments to Iowa Administrative Procedure Act, Report on Selected
Provisions to Iowa State Bar Association and Iowa State Government 63 8
(1998) [hereinafter Bonfield]). Based on this review and using our “ ‘own
independent judgment,’ ” we decide whether
“[w]e have a firm conviction . . . that the legislature actually intended (or would have intended had it thought about the question) to delegate to the agency interpretive power with the binding force of law over the elaboration of the provision in question.”
Id. (quoting Bonfield at 63).
B. Discussion.2 Iowa Code section 256.1 establishes the
Department of Education “to act in a policymaking and advisory capacity
and to exercise general supervision over the state system of education
including . . . [p]ublic elementary and secondary schools.” The director
of the department has numerous specified duties. See Iowa Code
§ 256.9. Section 256.9(16) provides that the director “shall . . .
[i]nterpret the school laws and rules relating to the school laws.” Id.
§ 256.9(16). It is undeniable that this statute clearly vests the director
with discretion to interpret “school laws.” Although the association
acknowledges the director’s duty and authority to interpret school laws,
it argues sections 298.4 and 296.7 are not school laws. According to the
association, these provisions are taxing statutes. We disagree.
Section 298.4 authorizes school districts to levy a tax on all taxable
property in the district, requires that the proceeds of the levy be
deposited in a district management levy fund, and specifies five purposes
for which this fund can be expended. Section 296.7 authorizes school
districts to enter into specified insurance agreements and to levy taxes
2As noted above, the auditor’s declaratory order was identical to the department’s declaratory order. Therefore, if either agency has clearly been granted discretion to interpret the pertinent statutes, we must give deference to the agency interpretation and review the agency order under the “irrational, illogical, or wholly unjustifiable” standard. Because we determine the department was given such discretion, we need not consider whether the auditor had any discretion with respect to this matter. 9
under section 298.4 to pay for such agreements. While sections 298.4
and 296.7 certainly deal with taxation, we think their primary purpose is
to delineate and control school spending. The principal focus of these
statutes is not on the assessment and collection of the tax, but on the
expenditure of the tax revenues. Moreover, both provisions are located
in Title VII, “Education and Cultural Affairs” subtitle 6, “School
Districts,” rather than in Title X, “Financial Resources,” which
encompasses various taxing laws. Chapter 256, in which the director is
charged with the interpretation of “school laws,” is also in Title VII
governing education. Thus, the context of sections 298.4 and 296.7
supports the district court’s conclusion the department, acting through
its director, has been vested with discretion to interpret these provisions.
In addition to the purpose and context of these laws, the practical
considerations involved also support our conclusion. Because school
financing is so complex, there are practical reasons the legislature would
want all laws affecting school finances subject to the interpretive
authority of the agency charged with oversight of those finances—the
Department of Education. In an analogous situation, we held the Iowa
Utilities Board had clearly been vested with discretion to interpret laws
governing telecommunications companies based on the board’s “broad
authority . . . to regulate the rates and services of public utilities.” AT&T
Commc’ns of the Midwest, Inc. v. Iowa Utils. Bd., 687 N.W.2d 554, 561
(Iowa 2004). Similarly, in the present case, the department has broad
authority over school budgeting and financing. See generally Iowa Code
§§ 257.30 (establishing a school budget review committee in the
department, chaired by the director), .31 (describing extensive duties of
school budget review committee, including review of each district’s
proposed and certified budgets). Consequently, it would be odd, indeed, 10
to exclude from the director’s duty to interpret school laws the provisions
governing school districts’ establishment and use of the district
management levy fund simply because the source of this fund is tax
revenues.
For the foregoing reasons, we are convinced the legislature
intended to vest the department’s director with the discretion to interpret
sections 298.4 and 296.7. Accordingly, we give appropriate deference to
the agency’s interpretation of these statutes by reviewing its
interpretation under the standard set forth in section 17A.19(10)(l).
Under that standard, we will not reverse the agency’s interpretation
unless it is “irrational, illogical, or wholly unjustifiable.” Iowa Code
§ 17A.19(10)(l).
III. Use of District Management Levy Fund For Fleet Services Program Management Fees.
A. Relevant Statutes. As previously noted, a school district that
establishes a district management levy fund under section 298.4 may
use monies from this fund only for specified purposes. One such
purpose is “the costs of insurance agreements under section 296.7.” Id.
§ 298.4(3). Section 296.7 provides in pertinent part:
1. A school district . . . may . . . enter into insurance agreements obligating the school district . . . to make payments beyond its current budget year for one or more of the following mechanisms to protect the school district . . . from tort liability, loss of property, environmental hazards, or any other risk associated with the operation of the school district or corporation: a. To procure or provide for a policy of insurance. b. To provide a self-insurance program. c. To establish and maintain a local government risk pool.
Id. § 296.7(1). 11
B. Parties’ Contentions. The department interpreted the term
“insurance agreements” in a traditional sense, holding an agreement
must at least transfer the risk of loss from one party to another to fall
within the statute. The association criticizes this interpretation, arguing
section 296.7 allows a school district to use the district management levy
fund for any mechanism that protects the district from any risk
associated with the operation of the school district. It argues the
legislature’s authorization of self-insurance programs and local
government risk pools indicates section 296.7 “is not limited to only
traditional insurance agreements or insurance policies.”
The department rejects the association’s broad interpretation of the
statute for several reasons. First, it asserts, the plain language of section
296.7 limits the included “mechanisms” to “insurance agreements” in the
form of “a policy of insurance,” “a self-insurance program,” or “a local
government risk pool,” none of which encompasses the fleet services
program agreement. Second, it contends if the fund could be used for
any expenditure that protects the district against any risk, there would
be no limit to what expenses could be transferred out of the general
budget and into the district management levy fund:
The purchase of a sprinkler system or rental of an off-site computer data back-up site reduces the risk of disruption to the delivery of educational programs which could result from fire or a computer system crash. Similarly, inoculation of teachers with flu shots or hepatitis vaccine offers protection against teacher illness and protects against the potential cost and disruption to the operation of a school caused by teacher absences and the hiring of substitutes.
Finally, the department points out the limitations on taxing and
spending authority contained in the basic school finance formula, see id.
§§ 257.1–.4, would be readily circumvented under the association’s
interpretation, thereby thwarting the legislative goal in controlling school 12
spending: “to equalize the amount of funds available to finance the
education of every child in the state regardless of where the child lives.”
Exira Cmty. Sch. Dist. v. State, 512 N.W.2d 787, 793 (Iowa 1994).
C. Discussion. We focus our discussion on the core requirement
of section 296.7 that, regardless of what “mechanism” a district chooses
to employ (a policy of insurance, a self-insurance program, or a local
government risk pool), that mechanism must be “an insurance
agreement” that “protect[s] the school district . . . from tort liability, loss
of property, environmental hazards, or any other risk associated with the
operation of the school district.” Iowa Code § 296.7(1). The department
suggests this language restricts covered mechanisms to those that
accomplish the traditional purpose of insurance: protection against the
risk of loss. The association interprets the phrase “any risk associated
with its operation” literally and broadly to mean any risk, not necessarily
a risk of loss. Based on our study of the statute and relevant authorities,
we are convinced the department’s interpretation of section 296.7(1) is
not irrational, illogical, or wholly unjustifiable.
The goal of statutory interpretation is to ascertain legislative intent,
and that intent is determined by “the words chosen by the legislature.”
Auen, 679 N.W.2d at 590. Consequently, to determine whether the
contract between IJUMP and the districts is an “insurance agreement”
that protects the school district from a “risk associated with the
operation of the school district,” we must identify what the legislature
meant by “insurance” and “risk.” Because these terms are not defined in
the statute, “we look to prior decisions of this court and others, similar
statutes, dictionary definitions, and common usage.” Gardin v.
Long Beach Mortgage Co., 661 N.W.2d 193, 197 (Iowa 2003). In addition,
“we consider the context of the provision[s] at issue and interpret the 13
provision[s] consistent with the entire statute of which [they are] a part.”
State v. Kamber, 737 N.W.2d 297, 299 (Iowa 2007).
We begin with the common meaning of the word “risk.” Black’s
Law Dictionary defines “risk” as “[t]he chance of injury, damage, or loss;
danger or hazard . . . .” Black’s Law Dictionary 1328 (7th ed. 1999). The
general dictionary definition is similar: “possibility of loss or injury.”
Merriam-Webster’s Collegiate Dictionary 1008 (10th ed. 2002).
Significantly, the common meaning of this term is consistent with its
usage in the context of insurance. A leading treatise on insurance law
suggests that the primary attribute of insurance is “the assumption of a
risk of loss and the undertaking to indemnify the insured against such
loss.” 1 Lee R. Russ & Thomas F. Segalla, Couch on Insurance 3d § 1:9,
at 1–16 (1995) (emphasis added); accord 1 Eric M. Holmes & Mark S.
Rhodes, Holmes’s Appleman on Insurance 2d § 1.3, at 16 (1996) (noting
common-law definition of insurance describes insurer’s obligation to pay
“ ‘upon the destruction, loss or injury of something in which the [insured]
has an interest’ ” (emphasis added) (quoting Mass. Gen. Laws ch. 175,
§ 2 (1935)) [hereinafter “Appleman on Insurance 2d”]; 43 Am. Jur. 2d
Insurance § 2, at 49 (2003) (“Insurance, therefore, is a means of
distributing the risks of loss.” (Emphasis added.)). Another notable
treatise in this field states: “In the insurance contract, the risk of an
actual loss is distributed (socialized) among a large group of persons
exposed to a comparable risk of loss.” 1 Appleman on Insurance 2d § 1.3,
at 11 (emphasis added). “Loss” means “destruction,” “a person or thing
or an amount that is lost,” or “the amount of an insured’s financial
detriment by death or damage that the insurer becomes liable for.”
Merriam-Webster’s Collegiate Dictionary 687. Finally, we note the other
contingencies against which the school district may protect itself by 14
using an insurance agreement—tort liability, loss of property, and
environmental hazards—all contain an element of injury, loss, or
damage. Based on these considerations, we think it is rational, logical,
and wholly justifiable to interpret section 296.7(1) as permitting only
insurance agreements that pay for mechanisms protecting the school
district against a risk of loss.
The participant agreement for the fleet services program does not
protect the district against a risk of loss. As the department concluded,
the fleet services program is a budget-billing plan that allows the district
to defer payment of fuel costs in excess of the guaranteed price to the
next fiscal year. Under the program, there is no loss incurred by the
district, and the district remains liable for the full cost of its fuel
purchases. The fleet services program does not provide loss protection.
The association argues the possibility of high fuel costs is not the
only risk “insured” by the fleet services program:
School districts fund their fuel expenditures from their general fund. Therefore, unanticipated increases in fuel expenditures during the fiscal year may at times force school districts to reduce educational programs or services for the students. IJUMP is intended to protect school districts from this risk of disruption in the delivery of educational programs and services.
Although avoidance of a disruption in the delivery of educational
programs and services may be the goal of districts participating in
IJUMP’s fleet services program, there is no provision in the contract
between IJUMP and the districts that even remotely addresses the
coverage of losses caused by a realization of the risk of such a
disruption. The department’s refusal to interpret section 296.7(1) as
authorizing expenditures from the district management levy fund for any
mechanism that assists a district in merely avoiding a loss was not 15
irrational, illogical, or wholly unjustifiable. Not only is the department’s
interpretation dictated by the language of the statute, such a dramatic
expansion of a district’s ability to transfer expenses out of its general
formula funding would undermine the limitations on spending imposed
by the school finance formula.
We also reject the association’s argument that the legislature
intended to give districts wide latitude in spending the district
management levy funds because section 296.7(1) authorizes the use of
noninsurance mechanisms—self-insurance plans and local government
risk pools. See Iowa Code § 296.7(5) (stating a self-insurance program
and a local government risk pool are “not insurance” and not subject to
regulation under Iowa’s insurance laws). Section 298.4(3) only
authorizes expenditures for “insurance agreements authorized by section
296.7,” and section 296.7 only authorizes school districts to enter into
specifically described “insurance agreements.” (Emphasis added.) We
think the legislature’s use of the term “insurance agreements” in both
statutes demonstrates its intent that the self-insurance programs and
risk pools permitted by section 296.7(1) be alternatives to traditional
insurance and not arrangements with a wholly different purpose.
A review of pertinent authorities reveals that self-insurance and
risk pools, while not “insurance,” are recognized alternatives to
insurance that are designed to accomplish the same purpose as the
purchase of an insurance policy: protection against risks of loss. As one
treatise explains:
In self-insurance the company, governmental entity or individual chooses not to purchase insurance but rather retains the risk of loss. In order to protect against losses, the self-insured will often set aside funds on a regular basis to provide its own pool from which losses will be paid. This can be analogized to the situation where a party purchasing 16 traditional insurance pays premiums to the insurer on a regular basis. However, in a self-insurance situation there is no shifting of the risk from the individual person or company to a larger group.
1 Appleman on Insurance 2d § 1.3, at 10 (emphasis added); accord
St. John’s Reg’l Health Ctr. v. Am. Cas. Co., 980 F.2d 1222, 1225 (8th Cir.
1992) (stating in a self-insurance program, “the risk of loss” is retained
by the person who bears the risk (emphasis added)); State v. Continental
Cas. Co., 879 P.2d 1111, 1116 (Idaho 1994) (“Self-insurance occurs
when an entity, rather than purchasing insurance to cover potential
losses, elects to pay off its losses as they arise, or to set aside fixed sums
into a reserve account to pay off intermittent losses.” (Emphasis
added.)); Cordova v. Wolfel, 90 P.2d 1390, 1392 (N.M. 1995) (stating “self-
insurance is a process of risk retention whereby an entity ‘set[s] aside
assets to meet foreseeable future losses’ ” (emphasis added) (quoting
Robert E. Keeton & Alan I. Widiss, Insurance Law: A Guide to
Fundamental Principles, Legal Doctrines and Commercial Practices § 1.3,
at 14 (1988))); Physicians Ins. Co. v. Grandview Hosp. & Med. Ctr., 542
N.E.2d 706, 707 (Ohio Ct. App. 1988) (“Self-insurance is the retention of
the risk of loss by the one upon whom it is directly imposed by law or
contract.” (Emphasis added.)); Black’s Law Dictionary 807 (defining “self-
insurance” as “[a] plan under which a business sets aside money to cover
any loss” (emphasis added)). Thus, self-insurance, like an insurance
policy, contemplates protection against a risk of loss.
Local government risk pools commonly have the same purpose. In
City of West Branch v. Miller, 546 N.W.2d 598 (Iowa 1996), this court
discussed a risk pool that had been formed by county governments. The
pool self-funded certain risks and purchased private insurance for other
risks. City of West Branch, 546 N.W.2d at 599. We observed that, with 17
respect to the self-funded coverages in the risk pool, “the pool pays the
claims from the pool of money collected from pool members. In effect,
pool members share and pay the claims.” Id. at 603; accord Dobrowolska
ex rel. Dobrowolska v. Wall, 530 S.E.2d 590, 595 (N.C. Ct. App. 2000)
(holding that in order to constitute a risk pool, the risks of two or more
municipalities must be put in one pool for payment of all claims of all
entities). Thus, the purpose of risk pooling is to spread the risk of loss.
Consequently, local government risk pools are simply another way for
districts to protect against a risk of loss in lieu of purchasing a policy of
insurance.
We conclude the inclusion of self-insurance and risk pools in
section 296.7(1) does not indicate a legislative intent to broaden
permissible expenditures from the district management levy fund beyond
those associated with protecting against risks of loss traditionally
covered by insurance policies. Given the commonly understood meaning
of risk in relation to insurance, self-insurance, and risk pooling, the
department was not irrational, illogical, or wholly unjustified in refusing
to expand the definition of “risk” to include an arrangement that does not
involve an actual loss.
IV. Summary.
Because the department has clearly been vested with discretion to
interpret sections 298.4 and 296.7, we give deference to the department’s
interpretation of these statutes and will reverse that interpretation only if
irrational, illogical, or wholly unjustifiable. We conclude the
department’s interpretation of these statutes does not meet this standard
for reversal. Accordingly, we affirm the declaratory rulings of the
department and the auditor that school districts may not use district 18
management levy funds to pay the management fees required for
participation in IJUMP’s fleet services program.
AFFIRMED.