By HEATHER NELLIS
Recorder News Staff
FONDA -- A recent settlement between the city of Johnstown and Walmart Corp. that reduces the company's assessment of its local distribution center will require the cash-strapped Fonda-Fultonville Central School District to pay back $132,000.
It will reimburse the company for taxes it paid to the school district based on the previous over-assessment of its complex in the Johnstown Industrial Park, and will also reduce the amount tax revenues collected from the company in the future.
School district Treasurer Carey Shultz said the repayment will be paid out of the upcoming 2013-14 budget. He said one idea being considered to foot the bill is using the district's approximate $750,000 debt reserve in some way, but the exact means is still being discussed.
"Tax certioraris not uncommon," Shultz said, adding the district was faced with a similar situation with National Grid four years ago. In that case, the district had to pay back $360,000. "But when we get one of these notices, it's like a death sentence because we have to pay it. We don't have a say."
The Johnstown Common Council at it November 2012 meeting approved the settlement, reducing the distribution center's assessment from roughly $36 million to $23 million over the next four years, according to city Treasurer Michael Gifford.
The multi-billion dollar corporation's Property Tax Department sued the city in July 2012, also naming the Board of Assessment Review and sole assessor in the complaint, which sought to reduce the assessment by more than half at $15 million.
Walmart alleged the distribution center was assessed at a higher percentage of value than others on the roll, and Supreme Court Justice Richard T. Aulisi ordered a settlement that was negotiated in October.
Gifford said the city's assessment roll is set annually, and generally starts each year with the September school tax bills.
"By the time the deal was finalized, the school bills were already issued," Gifford said. "That's why Fonda-Fultonville would be required to pay a refund, based on the assessment reduction."
Interim Superintendent Ray Colucciello said tax certioraris are "a fact of life. Decisions are made outside of your purvey, and are part of the legal process for taxation in America."
"I certainly understand businesses are looking at ways to increase their bottom lines by reducing their tax liability," Colucciello said. "It just happens to be one of the most inopportune times while we try to balance our budget."
The district is in dire financial straits, attributable to declining revenues and escalating costs. Since 2010, the district's aid has been reduced by almost $6 million in the state's exercise of the Gap Elimination Adjustment formula, and in the same time frame, pension and health insurance benefits have increased more than $2 million.
Colucciello said the district is trying to save as much money it can between now and the rest of the school year, and budget development continues.
The Board of Education's next budget workshop is scheduled for March 11 at 6 p.m.