EDMONDS, Wash. – If you have a child in school, you know money for education is tight. That's true in the Edmonds School District, where it's having to cut about $5 million from its budget this year.

That prompted a KING 5 investigation into the district's finances which has uncovered a land deal that may have cost taxpayers millions of dollars.

The six month investigation found the Edmonds School District violated its own policies and the spirit of Washington state law when it bought an 11 acre piece of property in Lynnwood. Our experts believe the district paid close to double what the property is worth and that taxpayers deserve an answer.

The Edmonds School District is the biggest educational system in Snohomish County – 40 schools and 20,000 students. 125 buses get all the kids where they need to be.

Its buses are currently housed across the street from the busy Alderwood Mall. A few years ago, the district decided that prime location should become a money maker – move the buses out, bring a rent-paying retailer in.

"So it was a means of funding school construction and construction projects without having to ask the taxpayers for new taxes," said Marla Miller, Assistant Superintendent of Business and Operations for the Edmonds School District.

The district found an 11 acre parcel in Lynnwood in 2005 – a potentially great location to move the buses. The asking price was $6.2 million.

Consultants hired by the district had concerns. It was an old construction landfill with questionable soil for building.  Contamination was also found on the site. But, the administration pushed on. It was centrally located and right next to property they already owned.

"Because of this unique location, we were very interested in the property," said Miller.

Before buying property, state law requires school districts to hire an appraiser to find the true market value. Their appraiser's assessment on the land was $3.3 million.

The number didn't go over well.

"The appraisal that came in was not acceptable to the owner," said Miller.

So the district and seller worked out a deal: The seller would hire his own appraiser and if that value came in near the original sale price, deal done.

The seller's appraisal was nowhere near the district's of $3.3 million. It came in at $5.6 million.

The district paid it.

"They're accountable to the taxpayers for that money," said Snohomish County Councilmember John Koster, a former state representative.

Koster sponsored the bill that became law mandating school districts hire their own appraiser to make sure taxpayer dollars aren't wasted.

"That was the whole idea. It was meant to make sure school boards knew what the market value was and that's what they would pay for it, or close to it, for the properties. They didn't do it in this case," said Koster.

Why would a school district pay 70 percent more, close to double, what its own appraiser said the property was worth?

We posed the question to Miller.

Frame: "Do you think this is fair market value?"

Miller: "Yes, we do."

Frame:  "Because the seller's appraiser said it was?"

Miller: "Because a number of appraisals said it was."

It's true the seller had other appraisals from past years. One said the land could be worth $9 million. Respected real estate attorney Paul Brain reviewed all the appraisals for KING 5 News.

His analysis?

"It's apples to oranges and they apparently didn't pick up on the difference," said Brain.

He says the old appraisals included estimated values for projects like apartment buildings that were never built and should not have been considered.

"This whole process that the district went through doesn't make any real sense to me based upon my experience," said Brain.

The KING 5 Investigators hired Jim Irish to review what happened.  Irish is president of the Appraiser's Coalition of Washington and wrote most of our state laws involving appraisal practice.

Irish surveyed the site, conducted interviews and spent hours pouring over documents.

Frame: "When you look at the district's appraisal and the seller's appraisal, which one makes more sense to you?"

Irish: "The district's appraisal."

Frame: "No doubt in your mind?"

Irish: "No doubt in my mind."

Irish says the seller's appraisal ignored consultant reports pointing out problems with the property. On top of that, he and other experts we interviewed were shocked the district didn't get more information when the two appraisals came in so far apart.

"Typically, a client that saw that would get a third appraisal," said Irish. "They would say 'holy cow.'"

The Edmonds School District is in a budget crisis this year, cutting teacher positions and increasing class size. Money is scarce, but they stand by their purchase price.

"I think the district got a good result," said Miller when asked if the district would do it over again.

"I would prefer to pay less," added Miller, "but I can't choose the value of the property."

The district defended its position by sending out a letter to parents and community members after KING 5 started asking questions.  It says the deal makes great financial sense and that the school board signed off every step of the way.  But we found their attempt to discredit our story wasn't cheap. The district spent more than $6,000 in printing, postage and staff time to get its message out.