Legalizes, validates, ratifies and confirms the actions of the Panama central school district regardless of the failure of such district to timely file final building cost reports

Title of bill

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

Purpose or general idea of bill

This bill would legalize, validate, ratify and confirm the actions of the Panama central school district regardless of the failure of the district to timely fine final building cost reports.

Summary of specific provisions

Section 1. allows the Education Department to consider the final cost report for Panama Central School as legalized, validated, ratified and confirmed so long as it was submitted before December 21, 2012, the commissioner approved the cost report, all state funds were properly expended for such building project, and the failure to submit the report in a timely manner was an inadvertent administrative or ministerial oversight.

Section 2. Effective Date

Justification

The Panama Central School District was assessed a $4 million penalty as a result of a late final cost report from a 2005 capital project. In 2005, the Panama Central School District completed a small maintenance project that was closed out. In 2009, Panama Central School District verified that this project was complete as shown on the state website. Panama then started a new project in 2008.

In 2012, Panama Central School reviewed the state's website to find that they had an "open" project with a substantial completion certificate filed on August 28, 2002 and December 12, 2005. This information was not previously made available to Panama Central School when they were closing out their 2005 building project. This meant that Panama Central School neglected to file a Final Cost Report for a building project with the Office of Facility Planning of the State Education Department (SED) within the established time frame.

In the 2013-14 State Budget, a plan was negotiated that allowed for a 10-year repayment plan to help the school manage what remained a tremendous penalty for a small rural school district. Also provided in the 2013-14 State Budget was a $500,000 Supplemental Valuation Impact Grant through the Education Department/Aid to Localities budget bill, which was provided for again in the 2014-15 State Budget, the 2015-16 State Budget. This bill would forgive the remaining amount, $2.5 million, of the assessed penalty. Without full forgiveness of this penalty, the 516 students who attend Panama Central School and the District's taxpayers will be left holding the bag for administrative oversights from nearly a decade ago.

With our small, rural schools already facing the heavy burdens of limited state aid, tax revenues and loss of enrollment and tax base, Panama Central School faces particularly significant cash flow problems that threaten its very operations if not addressed.

Prior legislative history

New Bill.

Fiscal implications

$2.5 million in remaining final cost report penalty

Effective date

This act shall take effect immediately.