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Release Date: November 19, 2011

On April 26, 1990, Westchester County (County) entered into a 30-Year “Ground and Facilities Lease Agreement” (Master Lease) with the Town of Greenburgh (Town) that would commence upon the expiration of a 10-year lease agreement between the County and the Westchester Housing Enterprise for the Less Privileged (WestHELP) for a homeless housing facility. At the end of the 10-year lease term the homeless housing program would end and the County would lease the facility to the Town for a period of 30 years. The facility was to be used for low-to-moderate income family/senior citizen housing.

Near the impending expiration of the original lease agreement, the County continued to have a need for the homeless housing facility. The County requested a modification of the “Ground and Facilities Lease Agreement” with the Town, and asked the Town to sublease the facilities to WestHELP for another 10 years. Under the terms of the contract WestHELP would pay rent to the Town. On September 18, 2001, the County, Town and WestHELP entered into a “Sublease and Homeless Housing Facilities Agreement” (Sublease). The Town subleased the facilities to WestHELP for another 10 years. In consideration, the Town would receive rental payments of $1,200,000 for the initial period from September 18, 2001 to September 30, 2002, and $1,222,844 each year for the remaining term of the agreement.

In order to alleviate some of the perceived financial burden supposedly placed on the community in which the homeless housing facility was located, the Town entered into an “Educational Grant Agreement” with the Valhalla Union Free School District (District) to provide up to $650,000 annually for the development and implementation of enhanced educational programs. The “Educational Grant Agreement” stipulates that grant monies may not be used to supplement or pay for the standard educational activities engaged in by the District, but rather must be used to fund academic programs, the purpose of which is to provide educational benefits not otherwise available in the District.

The State Comptroller's office determined that the town agreement with the school district was invalid. The town immediately stopped paying the school district the dollars that had been agreed to--after we were advised that the agreement was not authorized by state law. The Comptroller stated that

The Town can only fund programs that are for Town purposes. The general function of providing education to children is a school district, not a town, purpose.1 Since the 2003-04 school year, the Town has provided more than $1.8 million of funding to the District. The programs funded by the educational grant that the Town makes to the District do not further Town purposes, but rather further the purposes only of the District. Therefore, the grant cannot be made in the manner that the Town currently follows. Moreover, even if the funding had furthered proper Town purposes, none of the funded programs are made available to the surrounding communities within the Town and, consequently, benefit only those Town residents who coincidentally reside within the District.

The Valhalla School district filed a lawsuit in NY State Supreme Court--objecting to the fact that the town was complying with the state comptroller's decision. In a decision just released, a NYS Supreme Court Judge denied Valhalla's claim in the decision--(link to decision is below). The court indicated that the town is entitled to recover monies previously paid to the Valhalla School district. Over $1.8 million had been paid out to the Valhalla schools previously.

link to decision below:


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