The local discussion about changes to Shelby County’s two public schools systems has shifted this week to efforts by leaders of the county’s six suburban towns and cities to form their own school system or systems.

And the first public review of the reports Tuesday, Jan. 17, by the Germantown Mayor and Board of Aldermen indicated the leaders were encouraged by a report that concludes a suburban school district would not have to pay the countywide school system to get buildings within the boundaries of a separate school district they might form.

The reports by Southern Educational Strategies LLC of Memphis do not recommend a course of action.

Germantown Mayor Sharon Goldsworthy said the city’s next step is a Feb. 1 townhall meeting to gauge public reaction and political will to move to a May referendum on forming such a school system. The city leaders will then talk about what they’ve heard at a regularly scheduled Feb. 2 and Feb. 3 retreat. A good part of the retreat would be spent “toward the question of where do we go from here,” Goldsworthy said.

“We’re going to be very busy, very fast if we are going for a May referendum,” she added citing a goal of opening schools in the new district in August 2013.

Each school district would have an elected board and the election of that board would be the “second major step” in creating the school system following a referendum on local funding for such a school system. The wording of the referendum, according to the SES report, would likely have to be broader to make it clear those favoring a sales tax or property tax funding option also want to take on the responsibilities of operating a municipal school district.

Leaders of each of the six towns and cities voted last year to have feasibility studies done by SES on how such a separate school system could work for each of their municipalities.

And leaders of each government got their reports Monday and Tuesday with the first public meetings to discuss the reports scheduled through the end of this week.

Dr. James Mitchell of SES, and a former Shelby County Schools superintendent, led the Germantown presentation concluding it is feasible for Germantown to create its own municipal school district of 8,142 students and eight school buildings. It would include students who live in Collierville or its annexation reserve area and students in city of Memphis annexation reserve areas north and south of Germantown.

The Collierville school system would have 7,591 students and it would include not only those school age children within Collierville and its annexation reserve areas but students who attend Bailey Station Elementary and Tara Oaks Elementary and live in city of Memphis annexation reserve areas.

The Bartlett report outlines a school system of 9,029 students. The enrollment would be not only public school students within Bartlett but public school students in the Bartlett annexation reserve areas and those students attending public schools in Bartlett but who live outside the city limits.

That would take in students in Lakeland who attend Bon Lin Middle School and students in the Memphis annexation reserve areas north and west of Bartlett who now attend schools in Bartlett.

However, Bartlett High School could not handle the capacity of students from all of those areas. And some high school students within Bartlett who now attend Arlington High School would continue to attend Arlington under the scenario outlined in the report.

The general conclusion on the critical question of school buildings is the same in each of the three reports.

“It is the opinion of SES and its attorneys that a Bartlett municipal school district has the legal authority to receive transfer of and control of school facilities now located within its boundaries and to have that transfer occur without the imposition of costs with respect to those facilities,” the Bartlett report’s executive summary reads. Identical language changing only the name of the town is also used in the Collierville and Germantown executive summaries.

The reports acknowledge the amount of local spending by taxpayers in each municipal school district that would be required under state law amounts to a 15-cent increase in the city’s property tax rate. But SES concludes the same amount of revenue in each case could be raised by adding half a cent to the local option sales tax rate.

There would have to be a referendum on either option and both options could not be used.

The summaries of all three reports also note that the Norris-Todd state law specifically governing the coming consolidation of Memphis City Schools and Shelby County Schools does not address the transfer of school buildings or the debt of building those structures even though the law specifically provides for the creation of such a separate suburban school system.

The conclusion relies heavily on the absence and on applying Tennessee court rulings from cases involving the transfer of schools when an area is annexed by a city.

How buildings would be transferred to a suburban school district and what if any cost there would be is crucial to the feasibility of such a school system.

The SES reports rely on a legal opinion from the Memphis law firm Jackson, Shields, Yeiser & Holt, Attorneys at Law. The law firm includes Debra D. Owen, former staff attorney for the Jackson-Madison County Schools system.

The attorneys, using case law in Tennessee and what they see as the “underlying theories” behind state laws conclude the school buildings within Bartlett, Germantown and Collierville are held in trust by Shelby County Schools.

“The residents of Bartlett whom the Bartlett municipal school district would serve would become the beneficiaries for whom the trust exists,” the legal opinion reads. “Accordingly the annexation or overtaking of services – namely the municipal school district’s assumption of operating schools within the boundaries of Bartlett – requires a transfer to the new school district of the existing facilities within its boundaries without any obligation on the part of the new district to purchase the facilities.”

Mitchell was careful not to mix the reports. But his summary on the same point regarding a Germantown school system was the same.

“It’s not our job to speculate on what might happen if there’s a fight,” Mitchell said after the Germantown session when asked about a possible court fight on the point. “The weight of legal authority says that the school buildings are held in trust for the community. That’s the Tennessee Supreme Court ruling plus 45 years of transfer of school facilities here. There’s been no evidence of direct payment by the Memphis City Schools for any of the county schools that were taken in by annexation.”

Critics of the move toward a suburban school district and specifically such terms for a transfer of school buildings have argued an annexation by a city is not comparable and would not apply to the creation of a new public school system within Shelby County.

The report admits there is “less clarity” about transferring school buildings on which taxpayers are still paying debt. There is no requirement in the Norris-Todd law that such debt be assumed. The attorneys conclude state law and the Tennessee Constitution as well as several cases support the idea that county government debt on schools remains the obligation of county government and county taxpayers in Bartlett, for instance, would continue to pay that debt as part of the overall county property tax rate they already pay.

“Apart from every other reason, any demand for assumption of debt would ignore this reality – and inequitably so,” the opinion reads.

But the report leaves open the possibility of some negotiations on the debt questions short of a Chancery Court lawsuit based on other parts of state law.

“In either setting it is believed that the stronger argument supports the right of a Bartlett municipal school district to receive transfer and control of the school facilities located within its boundaries and to have that transfer occur without any requirement to purchase the facilities or assume debt obligations,” the report concludes. “But as for any debt that may encumber facilities, a demand for assumption of some or all of such debt may occur and may be based on ‘public policy’ or ‘principle of equity’ – however thin the argument.”

All three reports deal with individual municipal school districts that go beyond the existing borders of those cities or towns. Each of the three count students from city of Memphis annexation reserve areas. Bartlett and Germantown would each include students from neighboring suburban municipalities.

The attorneys in their report cite three state laws governing the joint operation of schools under contract between the municipal school districts. Mitchell described them as “complex.”

The schools from each municipal school district remain part of that district even though they can be “established, maintained and operated under such a contract.”

The report lays out two scenarios. One is joint operation of schools from several school districts in which the boards of education where each school is located control them. Or there could be a single “board of control” prepared and carried out with help from the Tennessee Attorney General and the Tennessee Commissioner of Education.

“Clearly such an arrangement can present practical, cost-saving options for school districts when it comes to agreement between local boards of education permitting non-resident students to attend schools in municipal school district,” the report reads.

There could also be a contract among school systems for transportation, maintenance, information technology and school nutrition programs.

There could also be a contract between the countywide school system and the municipal school district for the same general purpose.

That’s an option Collierville Mayor Stan Joyner mentioned last week as he talked in broad terms about what the reports might include in the way of scenarios.