Valley Stream school district withholds payments over IDA issue

Valley Stream School District 24 is withholding $2 million from its central high school district, which is considering litigation to get the money, officials said.

The high school district’s board of education voted Tuesday to ask the state education commissioner to intervene. The high school district wants to prohibit three of its members, who also serve on District 24’s board, from participating in discussions or voting on potential litigation against the district, documents show.

Bill Heidenreich, the central high school district’s superintendent, said the move is “based on a perceived conflict of interest.” The central high school district’s board of education is made up of members from its three elementary school district boards, including District 24.

“That’s the conflict — you can’t sue yourself,” he said.

District 24 Superintendent Ed Fale called the high school board’s vote seeking to prohibit District 24’s representatives from engaging in discussions about potential litigation “inappropriate and illogical.”

District 24 was to pay the central high school district about $20.1 million by mid-May under the current funding formula, in which the elementary school districts give a portion of their tax levy to the central high school district.

But District 24 only paid $18.1 million and is holding the remaining $2 million in an escrow account, Fale said.

“We are withholding money,” Fale said. “We’ve reached the amount that we believe we owe the high school district.”

Heidenreich said the $2 million is part of their general operating budget.

“District 24 holding off the money is somewhat puzzling because they’ve already collected it. They don’t need it to operate their schools, whereas we do,” he said. “It could potentially have an impact on our programs for students as well as staff.”

The discrepancy comes from payment-in-lieu-of-taxes, known as PILOT, agreements that are granted by the Nassau County or Hempstead Town industrial development agencies. Properties that receive PILOTs come off the tax rolls, changing the amount each elementary school district is supposed to pay the high school district.

Since October, the Valley Stream districts have been embroiled in a controversy over PILOTs granted by the Hempstead Town IDA to the Green Acres Mall and adjacent shopping center, Green Acres Commons. When the mall and commons came off the tax rolls, it changed the proportions of the elementary districts’ payments to the central high school district. The Green Acres PILOTs were revoked in April by the IDA but it has not been determined if or when they will go back on the county’s tax rolls.

District 24 believes properties that receive PILOTs should be treated as if they are still on the tax rolls so as not to affect the districts’ budgeting, Fale said.

The central high school district has hired new attorneys because the firm they currently use also represents District 24’s teachers, nurses and clerical staff as labor counsel, Heidenreich said.

“I think the high school board majority continues to spend more and more on lawyers rather than working with us in good faith to amicably restore our disagreements,” Fale said.

As of Thursday, the state education department had not received any communication from the central high school district.

“Because the Board’s resolution seeks an order from Commissioner [MaryEllen] Elia, we cannot comment on the matter in any way,” spokesman Jonathan Burman said in an email.