Authorizes the commissioner of education to make a payment for the allotted balance of state aid to which the city school district of the city of Little Falls is entitled for a debt service payment for school building purposes.
TITLE OF BILL: An act authorizing the commissioner of education to make a payment for the allotted balance of state aid to which the city school district of the city of Little Falls is entitled for a debt service payment for school building purposes
PURPOSE: To ensure that the City School District of the City of Little Falls receives all of its state aid payments due resulting from a building project.
SUMMARY OF PROVISIONS: Section 1 sets forth the legislature's findings and outlines the various capital projects undertaken by the school district eligible for state aid, and details the various bonds and payments due the district.
Section 2 authorizes the commissioner to make a payment to the district for the balance of the state aid due the district.
Section 3 is the severability clause.
Section 4 is the effective date.
EXISTING LAW: No law directs the commissioner of education to make a final payment to the district.
JUSTIFICATION: The City School District of the City of Little Falls (the "district") issued $16,405,000 in serial bonds in 1997 (the "Series 1997 bonds") to finance various capital improvements at its elementary, middle and high schools. The district began receiving state building aid on the debt service relating to the Series 1997 bonds in school year 1997-98. The district was advised in 2013 that it would not be receiving its expected full final payment of state building aid in the amount of $1,253,313 in school year 2013-14 for the debt service coming due on the Series 1997 bonds in school year 2013-14. Instead, the district was advised by SED that only $314,740 would be paid to the district, leaving a shortfall of approximately $939,000 and posing a severe budget challenge to this small city school district. Upon discussion with the staff of SED, the district was advised that the bond issue date had been "re-set" to the 1996-97 fiscal year of district. The impact of the "re-set" by SED was to have triggered the receipt of state building aid one year earlier. SED maintains that all payments have been made under the "reset" payment schedule. However, a review of the district's records, including its audited financial statements, does not disclose any state building aid related to the Series 1997 bonds having been received by the district in 1996-97. Failure of SED to disburse the full amount of the anticipated state aid payment to the district in 2013-14 will pose a significant financial hardship on the district and pressure on the local tax levy.
LEGISLATIVE HISTORY: New bill.
FISCAL IMPLICATIONS: $939,000 from existing state building aid allocation
EFFECTIVE DATE: Immediate
STATE OF NEW YORK ________________________________________________________________________ 6673 IN SENATE February 26, 2014 ___________Introduced by Sen. SEWARD -- read twice and ordered printed, and when printed to be committed to the Committee on Education AN ACT authorizing the commissioner of education to make a payment for the allotted balance of state aid to which the city school district of the city of Little Falls is entitled for a debt service payment for school building purposes THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Legislative findings. The legislature hereby finds that the city school district of the city of Little Falls approved five capital building projects which were designated by the state education depart- ment as project numbers 0001-005, 0001-006, 0001-007, 0008-008, 0008-09. In addition, the projects were eligible for certain state aid. The legislature further finds that the school district issued serial bonds in 1997 to finance the capital building projects. The legislature further finds that the school district began receiving building aid on the debt service relating to the serial bonds issued in 1997 in the 1997-1998 school year. The legislature further finds that due to the state education department's reset of the bond issue date the payment of the building aid was to start in the 1996-1997 school year. The legisla- ture further finds that the state education department reduced the building aid to the school district for the final debt service payment due on June 15, 2014 on the serial bonds issued in 1997 for the 2013-2014 school year by the amount of aid the school district was to receive in the 1996-1997 school year. The legislature further funds that the school district did not receive payment of that building aid in the 1996-1997 school year. The legislature further finds that without such apportionment of state aid, the payment by the school district in June, 2014 of the debt service payment for the serial bonds issued in 1997 for the capital building projects will impose an additional, unanticipated hardship on school district taxpayers. S 2. Notwithstanding the defects described in section one of this act or the provisions of any other law to the contrary, the commissioner of education is hereby authorized to make a payment for the allottedEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD14120-01-4 S. 6673 2
balance of state aid to which the city school district of the city of Little Falls, county of Herkimer, is entitled for the June 15, 2014 debt service payment in an amount equal to $939,000, representing the allot- ted balance of state aid relating to the June 15, 2014 debt service payment for the serial bonds issued in 1997 to finance projects 0001-005, 0001-006, 0001-007, 0008-008, 0008-009 pursuant to paragraph a of subdivision 5 of section 3604 of the education law. S 3. If any clause, sentence, subdivision, paragraph, section or part of this act be adjudged by any court of competent jurisdiction, to be invalid, such judgment shall not affect, impair or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, subdivision, paragraph, section or part thereof directly involved in the controversy in which such judgment shall have been rendered. S 4. This act shall take effect immediately.