The Riverhead Central School District has sued the Town of Riverhead for payment of property tax revenues collected by the town on behalf of the school district for the 2019-2020 school year.
The district is seeking payment of nearly $4.2 million, plus interest, in property tax money the district says is owed to it by the town on the district’s $86,769,307.68 2019-2020 tax levy.
The Riverhead receiver of taxes collects the school district’s property tax levy in trust for the school district. The town is required, under the Suffolk County Tax Act to disburse monies collected on behalf of the school district according to deadlines specified in the tax act.
The town has failed to make the full disbursement and still owes the district $4,144,695.90, according to the complaint filed in State Supreme Court last week and served on the town today.
The money was due to the district by June 30, the end of its 2019-2020 fiscal year, Riverhead Central School District Deputy Superintendent Sam Schneider said at a school board meeting in July, when the school board authorized litigation to collect the tax revenue from the town.
“Riverhead is the only town that doesn’t remit the tax collections to the school districts by June 30,” Schneider said at the July meeting. “Of all the school districts in Suffolk County, there are only three that weren’t made whole by June 30: Riverhead, Shoreham-Wading River and Mattituck-Cutchogue, all of which have not been paid by the same town — the Town of Riverhead,” he said.
The problem is unpaid property taxes, Riverhead Receiver of Taxes Laurie Zaneski said. Riverhead Town has a higher proportion of unpaid taxes than other towns, she said, and a large school district tax levy. Once the county audits the tax collections of all 10 Suffolk towns, it approves their tax warrants and sends the towns their remaining outstanding taxes. It’s then up to the county to collect the taxes from the property owners. The county can and often does sell the properties at auction to recoup unpaid taxes.
Supervisor Yvette Aguiar said Wednesday the county has completed its audit and the town should be “made whole” on its tax warrant next week. As soon as that happens, the town will disburse the balance due the school district.
“The town and the town receiver violated their fiduciary and statutory obligations pursuant to the Suffolk County Tax Act provisions above by not providing the district with the remainder of the moneys collected for its benefit,” the school district said in its complaint.
In addition to interest on the amount owed, the school district is seeking reimbursement of costs and expenses. The lawsuit was filed by the school district’s law firm, Ingerman Smith of Hauppauge.
The survival of local journalism depends on your support.
We are a small family-owned operation. You rely on us to stay informed, and we depend on you to make our work possible. Just a few dollars can help us continue to bring this important service to our community.
Support RiverheadLOCAL today.