LORAIN, Ohio — The bitter dispute between the Lorain City Schools Board of Education and CEO David Hardy Jr. will not be settled by a state mediator. 

Hardy wrote a letter to district employees announcing that a scheduled Friday meeting between the two sides, to be mediated by the Ohio Supreme Court’s Government Conflict Resolution Services, has been cancelled.

The meeting was apparently to help figure out how to handle the district's treasury situation in the aftermath of a restraining order filed against Hardy by the Board of Education.  

RELATED: Lorain City Schools Board of Education files lawsuit against CEO David Hardy Jr.

The restraining order is part of a lawsuit stemming from an ongoing contract dispute between Lorain and South Euclid-Lyndhurst schools. Lorain Treasurer Josh Hill recently submittted his resignation so he could accept the same position with South Euclid-Lyndhurst. And while Hardy says he's accepted Hill's resignation, the school board has not.

The restraining order bars Hardy from letting Hill officially resign, but also stops Hardy from other lawful CEO duties.

In a letter sent last week to district staff, Hardy stated that because of the restraining order, he would not be able to pay the district's 900 employees. One day later, the board's attorney clarified that according to state law, employees must be paid.  

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"Despite this stalemate in the mediation process, I do not foresee an adverse effect in regards to your scheduled, September 13th pay period," Hardy wrote in his most recent letter to Lorain staff members. 

Shortly after Hardy's letter was released, Board President Mark Ballard released a strong response. 

“We decided that the best course of action is to prepare for our court hearing instead of engaging in sham negotiations with David Hardy. David Hardy is a lame duck because he knows his contract will not be renewed, he just received failing grades for his job performance, and all five members of the sitting Academic Distress Commission have stated that they want Hardy gone.

In light of those realities, Hardy’s willingness to allow Josh Hill out of his contract and leave Lorain high and dry is further evidence that he will not stop harming our district. We now realize that there is no point in mediating a dispute caused by the individual in question.  We will be prepared for our court hearing and we look forward to an impartial judge making his ruling. The fact is, any responsible leader would not leave a school district in this much turmoil, without a treasurer.  It is irresponsible and harmful for Hardy to release one of the only district employees left who understands where the money went.  If Hardy wants a renewal levy, this was the exact wrong way to show our community that he respects us and is a good steward of our local funding.”