Superintendents from 41 school districts in Wallowa, Baker, Umatilla and Morrow counties heaved a collective sigh of relief this week.

Four years after the Oregon Department of Education (ODE) hit the districts with a bill for $3.3 million ODE claimed it overpaid for alternative education programs, an agreement has been reached between the districts, Union-Baker ESD, which is the provider of the alternative education programs, and the state.

The agreement was reached during an intense mediation session, Dec. 9., overseen by retired Oregon Supreme Court Chief Justice Edwin J. Peterson.

In the end, ODE recalculated the debt several times, admitting “potential errors” of calculation that ranged from $51 to $74,000, and gradually reducing the original charge by about $800,000.

Union-Baker ESD agreed to assume $1.1 million in repayment and the 41 school districts shouldered $700,000 of the debt.

The initial $3.3 million bill was the result of a 2004 Secretary of State audit of ODE books that revealed a bookkeeping system so confusing that Union-Baker ESD officials were found innocent of any criminal behavior despite allegedly over-billing the state by millions of dollars for the years of 1999-2003.

District superintendents, for their part, have consistently contended that they were never privy to the bookkeeping between ODE and Union-Baker ESD and simply handed over 80 percent of all funds received from ODE for alternative education to Union Baker ESD. If there was over-charging, Union-Baker ESD did it, according to Enterprise Superintendent Brad Royce.

In any case, districts across the state are celebrating the final deal, which reduces their individual bills by thousands and tens of thousands and provides them with reasonable payback schedules.

“It’s a good deal for everybody involved,” Royce said.

Joseph School District Superintendent Rhonda Shirley agreed. “I was relieved to have a settlement and happy that all three groups could come to an agreement that didn’t hurt any one group,” she said.

Enterprise, which was initially billed for $173, 669 for allegedly over-reporting the number of students served, is now expected to pay back $36,468 over three years. Another winner was the Wallowa School District. Originally hit for $68,831, WSD will now pay $13,895 over two years.

Joseph School District wins some and loses some. Originally billed $189,000 for over-reporting, it will now pay $51,738 over nine. However, an additional charge of $107,310 was assessed for “double-claiming” one year.

“We’re negotiating that,” said Shirley. “We still don’t know who sent the bills in, that was two superintendents back in our history. We think it was more of a computer issue at ODE but we did receive those additional dollars. I’m working with ODE to figure out how repay that.”

Joseph’s final bill comes to $159,048 and Shirley expects the entire amount to be eligible for the nine-year payback schedule.