By JAIME STUDD

For the Express

JOHNSTOWN — Three Fulton County school districts will collect more than $940,000 in school taxes owed to them by the Hudson River-Black River Regulating District for the 2011-2012 school year, but the money will come courtesy of Fulton County, not the regulating district.

On Monday, July 9, the Fulton County Board of Supervisors unanimously voted to  direct Fulton County Treasurer Terry Blodgett to pay the Mayfield, Northville and Broadalbin-Perth school districts $372,036, $337,981 and $230,169, respectively, their share of the taxes owed by the district.

The vote followed a recent ruling by Supreme Court Judge Richard T. Aulisi, in which the county was found to be legally responsible to make the districts “whole” for the unpaid taxes.

The ruling was in response to an Article 78 proceeding filed by the school districts on May 25 seeking the taxes owed to them. Both the county and Blodgett were named in the proceeding.

The county had repeatedly claimed that it did not have the funds to pay the district’s delinquent taxes, as they are required to do under the state’s real property tax law.  

According to the resolution passed by the supervisors, the county will use a portion of its fund balance to comply with the order.

On July 9, Fulton County Board of Supervisor’s Chairman Michael Gendron described the county’s payment of the taxes as “a step” toward resolving an issue that has plagued the county, the schools and the regulating district for some time.

Gendron said he is “optimistic” that the regulating district will be able to return the money to the county.

Prior to that vote, Northville Superintendent Kathy Dougherty addressed the board.

“I think it’s a shame that the school districts had to incur the legal costs of filing an Article 78,” said Dougherty, noting that it was “clear” that the county was required to make the districts whole.

“We are all county taxpayers,” Dougherty added. “If we look at it in a larger sense, we’re essentially suing ourselves.”

Following the meeting, Dougherty said she is happy to have the matter resolved for the time being, but she fears that the cycle will begin anew when it comes time for the district to pay its 2012-13 bill.

“It’s a temporary solution, but I’m very pleased they took the actions they did as quickly as they did,” Dougherty. “I’m reluctant to predict how this will play out.”

Though there is still no guarantee from the regulating district that its taxes will get paid, Dougherty said Aulisi’s decision has “laid the groundwork” for the future.

“We certainly have direction with regards to what should happen,” Dougherty said.

Trouble for the regulating district began in 2008, when a court ruling eliminate the HR-BRRD’s ability to levy taxes against hydropower plants down state, essentially wiping out 80 percent of its revenue and sending the agency into financial distress.

It then attempted to recoup the approximately $4.5 million it was out by seeking money from Albany, Rensselaer, Saratoga, Warren and Washington counties — all of which benefit from the regulating district’s flood control measures around Great Sacandaga Lake.

Though the district originally won that case, the five counties appealed, tying the district’s fiscal hands for several years.

In response to another court order by Aulisi, the HR-BRRD liquidated more than $3 million from the Black River portion of the agency in order to loan it to the Hudson River arm, last summer. That ruling followed a joint lawsuit filled by both the county and the school districts.

This year, the school districts held the county legally responsible for the taxes in place of the district, a move that seems to have been upheld by Aulisi’s decision.

In May, the supervisors voted, as it had the previous year, to sue the regulating for approximately $1.7 million, reflecting the nearly $720,000 owed by the regulating district to the county itself in delinquent property taxes, plus those owed to the districts.

The regulating district also owes million to Hamilton and Saratoga Counties for several years worth of delinquent property and school taxes on land the district controls in those areas. Both Saratoga and Hamilton counties have already paid the regulating district’s delinquent taxes to their respective districts.

In its own legal dealings with the five downstate counties, the regulating district has repeatedly come out on top, having won the original case and withstood an appeal.

But because the court ordered the district to recalculate its apportionment methods in order to account for state land, the HR-BRRD has yet to see any revenue from those municipalities.

According to the resolution passed by Fulton County supervisors, the county is required to pay the districts within five days of the court’s decision. That ruling was handed down on July 5.