The village plans to withdraw a court appeal over an Agency of Education decision that it says jeopardizes nearly $100,000 in revenue for its recreation department and instead work with the state on a legislative fix to their dispute.

The controversy centers on a designation under Vermont’s universal pre-K law, Act 166, known as “prequalification.” The status allows preschool programs to partner with school districts and pass along up to 10 hours of funding per week.

In an appeal filed this June, the village claimed the AOE incorrectly terminated Essex Jct. Recreation & Parks’ prequalification status and never informed the village of the change, allowing its preschool program to continue accepting school district funds without the correct credentials.

Downplaying the clash, village attorney Claudine Safar said she doesn’t think the village is in a “completely adversarial” posture with the state, noting it has tentatively agreed to dismiss its court action without prejudice and instead pursue the legislative route. Attempts to reach AOE’s legal counsel were unsuccessful.

Court documents filed in the appeal show the AOE’s decisions could have ramifications not only for EJRP but also its partner districts, which can count preschoolers who attend prequalified programs in their student population numbers, or “average daily membership.” Calculated on a two-year rolling average, ADM is used to determine homestead tax rates.

According to Safar, under the current AOE ruling, those partner districts can’t count students who attended the EJRP program. Now, some of those districts want their money back, and the village fears others could follow suit.

EJRP began its preschool program in 2009 at its Maple Street headquarters and two years later became accredited under the Step Ahead Recognition System, or STARS, which rates adherence to state regulations and overall performance and is a condition for prequalification.

EJRP expanded its preschool program during the 2014-15 school year and started another classroom in the Park Street School. The AOE then granted EJRP prequalification status for a three-year term starting June 2015, but it only applied to the Maple Street license. A month later, EJRP consolidated its preschool program into the Park Street location, expanding that state license to include both rooms and ending the license at Maple Street.

That’s where things get tricky.

According to the appeal, the department’s STARS accreditation transferred to Park Street, but its prequalification status didn’t – a fact state officials shared in an email more than a year after the move. EJRP reapplied for the prequalification the following day.

The AOE denied that request in a letter sent to Park Street – a location where the department says it doesn’t receive mail – instead of the Maple Street address included on its application.

“There was no ability for them to know that the application was denied, and there was no way for them to appeal that denial,” Safar said.

Meanwhile, EJRP’s program remained listed on an AOE database that parents and school districts use to verify prequalification status. The department continued providing preschool services until 2017. Safar said the AOE agreed to waive its termination up until that point.

But it refused to move on the most recent school year, and some of EJRP’s partner schools who say the department violated its agreement with them are asking for a reimbursement of over $5,800, with the potential for other districts to do the same, a potential cost of $92,000.

EJRP learned through one of its partner districts in April that the AOE no longer considered it a prequalified program, at which time it submitted another application.

The AOE notified the village a month later that it “cannot and will not” retroactively reinstate the program’s status.

The AOE explained its position, the appeal says, by noting all prequalified programs must be currently licensed, and therefore, when the Maple Street license ended, so did its prequalification status.

The appeal says that position is inconsistent with AOE and Agency of Human Services guidance issued in 2014 that says prequalification and STARS will transfer to a program’s new license number when it doesn’t “substantially change.”

“It was the same program providing the same services to the same kids in a location that was already being used,” Safar said, later adding, “Everybody was relying on something that, from our perspective, was not very clear.”