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City of Utica strikes preliminary deal with school district

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CNY/NNY/S. Tier: City of Utica strikes preliminary deal with school district
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The Utica City School District and the City of Utica are coming close to an agreement to get the school district over one million dollars in delinquent property taxes. Our Andrew Sorensen gives us the details of the proposal going through the initial stages this week.

UTICA, N.Y.-- The Utica City School District breathed a sigh of relief after surviving a $10 million shortfall this budget season. That moment was short lived.

"The city collects property taxes for the school district and we guarantee those school taxes whether we collect them or not," Common Council member Ed Bucciero explained.

Bucciero said this year's financial issues made it difficult for Utica to play the middle man, making the district short another $1.4 million.

"Under the situation that the city has found itself with no cash reserves, the comptroller was unable to make that payment of the uncollected taxes by June 30," said Bucciero.

"Either we would have had to lay off people or we would have had to go borrow and incur all the cost of the borrowing," UCSD School Business Official Maureen Albanese said.

But the district views that as impractical because their money comes in through the city. Now the school board is in the preliminary stages of a deal with the Common Council that seems to cover everyone's problems.

"We will borrow the money, they will reimburse us for all the costs associated with borrowing that money," Albanese said.

The city has a BBB bond rating, making it safer and cheaper for the tax payers for the school district to take out the money.

"One of us is going to have to go out and borrow, it makes sense for the school district to do it because they can do it more efficiently, cheaply and effectively than the city can," said Bucciero.

The city would have one year to pay off the loan, making it easier for them to budget the loss. The deal also opens negotiations on the money transfer system.

"Now we're looking for them to send us what's been collected as it's collected," said Albanese.

She believes that will make budgeting easier throughout the year.

But both parties are still looking to reform the collection system, as any delinquent property taxes could leave both short and upend their progress.

Utica's Common Council will vote on the proposal after the school district looks it over. Then a formal deal will be created and voted on again.

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