School aid dispute moves to court

PHOTOGRAPHER: Michael Goot

Lawyers for the city school district and International Charter School of Schenectady were in court on Thursday fighting over what Schenectady said could be $1 million in aid that was wrongly sent to the charter school.

Attorney Mark Rushfield, special legal counsel for the city district, said as many as 84 students claimed by the charter school may not be residents of Schenectady. The city pays about $9,500 for every pupil that attends the Rotterdam-based school, which is closing at the end of the month.

Starting last fall, the Schenectady City School District began withholding money, stating it did not receive proper documentation about the number of enrolled students. ICSS officials responded by filing “intercepts” to get the state Comptroller’s Office to send the charter school this money directly — bypassing Schenectady.

The Schenectady City School District filed an Article 78 action to recoup some aid payments. Both parties argued their case in state Supreme Court before Judge Eugene Devine.

Rushfield, of the Poughkeepsie-based law firm of Shaw Perelson May & Lambert, said the state Education Department and the Comptroller’s Office erred by not certifying that these students were residents of the city. It merely “rubber stamped” the ICSS figures, he said.

Assistant Attorney General Aaron Baldwin, who was arguing on behalf of the state, said that under statute, the charter school is required to submit the number of enrolled students and the city school district has an obligation to pay the money. Any needed corrections to the amount of aid because of a change in enrollment can be resolved later.

Devine said the fact that the school is closing may change the situation. “You can’t really rely on the correction after the fact,” he said.

ICSS attorney Harold Gordon said the district kept changing the amount of students for whom it lacked documentation. It started with questioning 79 out of 715 students, about 11 percent, and then by the time it refused to pay the last bill, it was claiming that 46 percent of the students were not residents.

Enrollment at the school dropped sharply at the start of the school year to about 585 students after roughly 150 students that enrolled left because of a lack of transportation. Following the SUNY Board of Trustees decision in March to close the school, enrollment declined further. ICSS President Tracy Petersen said current enrollment is at 532 students.

Gordon said if the district wins this legal action, it would be an invitation for every school district not to pay charter schools — obviously not the intent of the charter school law.

“The Legislature has clearly said ‘don’t let the districts play games,’ ” he said.

Gordon also pointed out that the district gets roughly $14,000 in state aid for every student. They send $9,500 to the charter school and then keep another $4,500 for transportation and other overhead expenses associated with those students. Devine said the city may have been overpaid as well.

“If these students are found not to be residents, nobody should have gotten any money,” he said.

Rushfield agreed that the money should go back to the state. However, this is why the Comptroller’s Office should examine these results and conduct an investigation.

Devine stated he needs some proof in order to award money to the city district. He asked why the parties cannot reconcile these numbers, and Baldwin said Schenectady and ICSS officials cannot get along.

Devine took the matter under advisement.

Petersen said after the hearing the charter school has not billed for students who were not enrolled. She said the city keeps changing the standards for what it will accept as documentation, for example saying a lease agreement from a private landlord is not acceptable.