The dispute between St. Helena school officials and the Napa County Office of Education over tax revenue from Howell Mountain and Pope Valley could be headed to court any day.

The county has threatened to initiate legal action to settle the matter unless the two sides agree to mediation. St. Helena is game for mediation, but Napa County Superintendent of Schools Barbara Nemko said she needs to know more before she’s ready to mediate.

“We’re fine with mediation, but we think we’re not ready for mediation yet because we haven’t heard the basis of their legal argument,” said Nemko. “So far all we’ve heard is a recitation of the history of how property taxes were paid and allocated, but no legal justification for why they should get that tax money.”

According to Sandra Woliver, an attorney for the St. Helena Unified School District, the two sides have already exchanged legal arguments, and now it’s time for mediation.

The school board and top district officials say the district deserves some of the tax revenue generated within the boundaries of the K-8 Howell Mountain and Pope Valley school districts.

Right now the money goes to the county office of education. St. Helena officials say that most of the high school-aged kids who live in those districts attend St. Helena High School, so “the money should follow the kids.”

The school district claims the county office owes it $628,298 for the 2008-2009 school year, and $4.8 million going back to 1991.

County education officials say the money is being allocated according to local tax codes.

Nemko has argued that St. Helena, a relatively wealthy school district, is not legally entitled to the funds, and that the county office provides services such as after-school programs and vocational training to students from Howell Mountain and Pope Valley.

Meeting in the middle?

The county officials in charge of parceling out the tax money are clearly eager to see the dispute resolved.

In February, Jacqueline M. Gong, deputy county counsel, responded to a letter the St. Helena school district had sent to the offices of the county treasurer and auditor-controller.

Gong said the county “strongly urges” the school district and the county office of education to consider mediation with former Napa County Superior Court Judge Scott Snowden.

Gong’s letter said the two sides have “until April” to agree to mediation — then the county, which receives and distributes funds for local school districts and other agencies, will ask the courts to resolve the issue.

“In these difficult economic times, it is in the best interest of students and taxpayers to avoid costly litigation,” she said.

“Both agencies have presented substantive analysis of a very complex legal question and we see merit on both sides of this issue,” wrote Gong. “However, it is not for the county to legally resolve this dispute.”

According to Woliver, the district has agreed to mediation, but they’re not willing to provide any more legal arguments that the county has requested.

“Mediation is a conciliatory process,” she said. “If you’re going to exchange legal briefs, you might as well be in court."