Schenectady school district facing $1.3M aid loss

PHOTOGRAPHER: David Lombardo

The Schenectady City School District could face a $1.3 million budget shortfall this year if state funds withheld because of a filing error are not restored by Gov. Andrew Cuomo.

Sitting on the governor’s desk is a bill that would allow the district to avoid any penalties stemming from five years of a transportation contract that had been funded by state aid, even though the contract had been advertised incorrectly in 2003. This mistake was caught by the state Education Department in 2008, which has since begun to cut its aid to the district by millions to make up for the overpayment.

“The state decided to take away aid that they had paid us over a number of years because they had found some technical glitch,” said John Yagielski, acting superintendent for the district.

The glitch was in two advertisements the district ran in The Daily Gazette that did not include a description of the criteria that would be used to judge the bids for a transportation contract. The criteria was included in the information sent to the interested contractors.

Now Yagielski is counting on the governor to sign a bill that passed both houses of the state Legislature. If he does not, the district will have to cut $1.3 million from this year’s school budget, after already closing a $7.1 million gap.

“It’s really important to us this coming year,” he said. “I don’t want to go back and do any more cutting.”

The potential $1.3 million cut comes after the district was denied a couple million dollars in aid last year for the same reason, according to Yagielski. He said the district will have similar problems next year if its aid is cut again. “If they’re going to collect all that money back from us, it’s going to be a big hit,” he said. “Next year we’ll have a problem with property tax decline and it doesn’t look like the state is going to do much … Things are going to get tighter and tighter for us.”

The state Legislature tried to ensure that funding would not be reduced in 2009, when legislation passed without opposition and was then vetoed by Gov. David Paterson. He said the state’s dire fiscal situation at the time made it impossible for him to sign the bill, which Sen. Hugh Farley, R-Niskayuna, contended was a flawed argument.

Farley, a sponsor of the proposal in 2009 and this year, noted that the Education Department has already paid these contracts, so it wouldn’t have cost the state additional money. He added that the state would have to dole out some money now to reimburse the district for the funds denied last year. According to the memo accompanying his legislation, these funds have been set aside by the Education Department.

“This is an unusually excessive penalty,” said Farley, who suggested that these types of bills historically have been signed. “Let’s hope the climate is a little different [from 2009],” he said.

Assemblyman George Amedore, R-Rotterdam, who sponsored the bill in 2009 and now, was optimistic. “I believe the governor will sign it,” he said. “I believe the governor will do the right thing.”

He said that during the state budget process Cuomo had asked districts to make cuts and root out inefficiencies, which the Schenectady City School District has done. “They’re doing everything they can to live within their means,” Amedore said.

This was reiterated by Yagielski, who stressed that the district had made unprecedented cuts and did a lot of the restructuring the governor’s office had recommended. “We didn’t whine about things,” he said.

The governor’s press office did not respond to inquiries. It was submitted to the governor Sept. 12 and he has 10 business days to sign it or veto it. If he does neither it will become law automatically.