BILL NUMBER: S1239A

SPONSOR: SERINO
 
TITLE OF BILL:

An act to legalize, validate, ratify and confirm the actions of the
Spackenkill union free school district notwithstanding the failure to
timely file final building cost reports with the education department

 
PURPOSE:

To forgive a penalty levied on the Spackenkill Union Free School
District for filling a late final cost report.

 
SUMMARY OF PROVISIONS:

Section 1: Legalizes, validates, ratifies and confirms the actions of
the Spackenkill Union Free School District regardless of the failure of
such district to timely file final building cost reports that were
required to be filed with the Education Department before December 31,
2012.
              

Section 2: Provides that the Commissioner of the State Education Depart-
ment shall not recover from the Spackenkill Union Free School District
any penalty arising from the late filing of a final cost report pursuant
to section 31 of part A of chapter 57 of the laws of 2012, provided that
any amounts already so recovered shall be deemed a payment for money due
for prior years pursuant to paragraph c of subdivision 5 of section 3604
of the education law and shall be paid to the Spackenkill Union Free
School District pursuant to such provision.

Section 3: Provides the effective date.

 
JUSTIFICATION:

Spackenkill Union Free School District, a NYSED nominated Blue Ribbon
School, was assessed a penalty of $9,603,719 due to filing a final
building cost report after the deadline at the end of 2012 despite the
fact that their EXCEL grant money was not disbursed until March of 2015.

The penalty levied on the school district is nearly equal to the state
aid received by the district, and is excessive given the modest size of
the school.

The Spackenkill Union Free School District voters approved a $13,934,000
project for renovations and an addition to Spackenkill High School in
2009. The architectural firm enlisted for the project filed Certificates
of Substantial Completion forms with Facilities Planning in 2010 and
2011. In February 2015 the district's business manager, requested in
writing an extension to file the Final Cost Report (FCR) because the
district could not close out the project because the EXCEL money from
the Dormitory Authority had not been received, and the district was
negotiating with three vendors over billing and work performance.

One month later in March 2015, the Business Manager received correspond-
ence that the EXCEL payment would be made to the district.  In June
2016, the school's former Superintendent signed the Final Cost Report
and it was submitted to Facilities Planning.

In February 2018, the current Superintendent and Business Manager were
made aware of the building aid penalty. The superintendent went to the
Facilities Planning web site upon learning of this issue and could find
little to no information on the project or any indication of lateness.
The superintendent contacted the State Department of Education and
learned of the penalty. The district was told that this penalty would be
amortized over several years and have estimated that the annual penalty
would be almost $1,000,000 per year on the $46,000,000 school budget.

The district is in receipt of correspondence indicating that the FCR was
due by June 30, 2013. This date does not acknowledge that the project
could not be closed out until EXCEL money was received in 2015. No other
correspondence or warning was given to the district, a point exasperated
by the fact that the district chose the expedited review process for the
current capital project that was passed in December 2017. At no time
during this planning and approval process for this project did state
officials indicate that the FCR was late from a prior project. The
district paid the additional money for an expedited review in January
2018, but was told that the check was never received. The district later
learned that the check was applied to another district's filing.

While the 2018-19 state budget included critically important provisions
that will reduce the district's penalty modestly, the district will
still be required to pay back millions. This legislation would forgive
the remaining amount of the penalty to help preserve the high quality
educational programs that the district has worked to create and main-
tain.

The district understands the need for accountability and established
deadlines in this process, however to levy such a severe penalty against
a district for what amounts to no more than a highly atypical adminis-
trative error, will do a significant disservice to the community's
taxpayers, and most importantly its students.

 
LEGISLATIVE HISTORY:

2017-18: S.8603 Passed Senate

 
FISCAL IMPLICATIONS:

TBD.

 
EFFECTIVE DATE:
This act shall take effect immediately.