The Monadnock Regional School Board will meet next month to discuss the district’s next steps after Wednesday’s N.H. Supreme Court ruling, which held that more than $390,000 in leftover health-care funds should remain available to the Monadnock District Education Association.

Wednesday’s decision was the latest legal development in a long-running dispute between the union and the district over the money remaining in an employee health insurance pool.

In a unanimous 4-0 decision, the court reversed an October 2018 Cheshire County Superior Court ruling in which Judge David W. Ruoff ordered that the unexpended $392,381 in the pool should be returned to taxpayers. The union appealed that decision to the Supreme Court last March, and the two sides argued the case before the high court last November.

“We are pleased the Court upheld the contract terms the Association and the District agreed to back in 2012,” Marie Szymcik, the immediate past president of the union, said in a statement Wednesday. “We look forward to our members finally receiving the benefit of this agreement.”

Szymcik added that the union hopes to hear from the district soon about its plan to release the funds.

Superintendent Lisa Witte said Wednesday that the Monadnock school board will explore its options moving forward and discuss them at the board’s next meeting, scheduled for Aug. 4. She did not specify what those options might be.

The Supreme Court ruled that Ruoff incorrectly interpreted an article of the collective bargaining agreement between the union and the district that established the health insurance pool funding system when voters approved the four-year contract in 2012. Under that collective bargaining agreement, any health-care money left over each year after the district paid its portion of health insurance premiums would go into a pool, which was available to help offset employees’ premiums.

“We conclude that the Article [of the collective bargaining agreement] created an obligation to distribute pool funds to employees but gave the Association discretion in implementing those distributions,” Associate Justice Anna Barbara Hantz Marconi wrote in the Supreme Court’s decision.

The union, which has about 160 members, represents teachers, division leaders and department heads, certified librarians, media specialists, reading specialists, technology integrationists, interventionists and social workers.

The union did not tap into the health insurance pool after each of the first three years of the contract but still has discretion over how to disburse those funds, Hantz Marconi added, so long as those payments meet the terms of the contract.

The collective bargaining agreement, which expired in 2016, stipulated that money from the health insurance pool must be distributed equally among employees with the same plan classification, that the funds can go only toward offsetting insurance premium costs and that no employee should receive more than the actual amount of an annual premium, Hantz Marconi wrote.

The Supreme Court also found that, based on the language of the 2012 collective bargaining agreement, voters knew the financial consequences of the health-care funding system the district and union agreed upon.

“By approving the CBA, the legislative body authorized the appropriation — and expenditure — of the money necessary to fund employees’ health insurance benefits, including the provisions governing the pool funds,” Hantz Marconi wrote in the decision.

In March of 2016, voters in the Monadnock district — which covers Fitzwilliam, Gilsum, Richmond, Roxbury, Swanzey and Troy — rejected a new collective bargaining agreement, which included a provision that would have allowed any unused money in the health insurance pool to go toward employee premiums during the term of the new contract.

Later that year, the school board voted to use some of the estimated $560,000 that had accumulated in the pool since the contract took effect to fund up to 100 percent of insurance premiums that association members paid during the 2015-16 school year. That left $392,381 in the pool, and the union requested to use the money to reimburse health insurance premiums that members paid over the previous three years of the collective bargaining agreement.

The district rejected that proposal, which led the union to file an unfair labor practices complaint. The two sides took the matter to nonbinding arbitration, which concluded in February 2017 with a decision in the union’s favor. But the district still felt that the money should be returned to taxpayers, Witte said Wednesday.

“The Monadnock School Board believed that the pool funds were part of the year-end fund balance that should have, as a matter of law, lapsed back to the taxpayers to offset taxes,” Witte wrote in a statement. “Thus, it would be unlawful for the School Board to transfer the pool funds to the Association without violating the law and its fiduciary duty to the taxpayers.”

The district brought the case to Cheshire County Superior Court in March of 2017. Ruoff ruled in favor of the district based on RSA 37:2, which says that all appropriations made at annual meetings lapse at the end of the fiscal year unless they meet one of several exceptions.

But the Supreme Court agreed with the union’s argument that the health insurance pool did meet one of the exemptions, namely that the funds had “become encumbered by a legally-enforceable obligation, created by contract or otherwise.”

“The funds in the pool were encumbered by an obligation that such funds ‘will be distributed’ to employees,” Hantz Marconi wrote. “This constituted an enforceable obligation for the expenditure of those funds under RSA 32:7.”

Jack Rooney can be reached at 352-1234, extension 1404, or Follow him on Twitter @RooneyReports.