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GREENBUGH, N.Y. – The Valhalla School District must repay $1.8 million to the Town of Greenburgh after a State Supreme Court judge ruled it was illegal for the town to give a grant to the school district in exchange for allowing a homeless shelter within its borders.
In March 2004, Greenburgh Town Supervisor Paul Feiner signed an agreement with the Valhalla schools that would give the school district payments of up to $650,000 annually over a 10-year period. The money was to come from the rent paid to the town from WestHelp, a homeless shelter in Greenburgh.
“The grant was improper, as a matter of law," State Supreme Court Justice Nicholas Colabella wrote in his decision. "The town is entitled, therefore, to recoupment of all funds that were improperly expended.”
The Valhalla School District records showed it received $1,864,151.80 from the Town of Greenburgh. The New York State Supreme Court ordered it all to be repaid to the town.
William Rosenberg, president of the Valhalla School District's Board of Education, did not return a phone message left at his home on Monday evening.
Feiner said the town’s intention was to keep WestHelp in the town. However, the Knollwood Civic Association, which is partly in the Valhalla area, did not want the homeless shelter in their community, and felt that the community should be compensated if it was. At the time, Feiner and the civic association came to the agreement that the Valhalla School District should receive money.
"Feiner explained that he was thinking outside of the box, but sometimes when you're thinking outside of the box, you get involved in illegal activity," said Bob Reninger, president of the Broadview Civic Association, located in Greenburgh.
At the time, several members of the Greenburgh community rallied against the grant agreement, saying they were unhappy with Feiner's evasive reasoning for giving the money to Valhalla schools. Those opposed brought their concerns to the New York State Comptroller and the Westchester County Board of Legislators in 2003, saying that it was illegal for a town to award money to a school district.
"I don't think it's unfortunate now because the Town of Greenburgh gets its money back," said Terry Williams, president of the Greenburgh Central 7's Board of Education. "But it's unfortunate for the Valhalla School District."
In court, the Town of Greenburgh was represented by Deputy Town Attorney David Fried. Herb Rosenberg, a former Dobbs Ferry judge, and Bob Bernstein, a former president of the Edgemont Community Council acted as interveners.
Bernstein could not be reached Monday evening for comment.
Williams said the money would have benefited the school district to have looked into the grant agreement in 2004 to ensure that there would be no misconduct or transgressions.
He also said it was clear that the town board members at the time voted to grant the money. "The problem was a lack of leadership at the town board level and the town supervisor level because this shouldn't have happened,” he said. “I'm glad to see that we're getting our money back, but the bigger thing is that the proponents for this are still in power."
Feiner said he still thinks the grant made sense.
"Although our intention was good, the law says that we can't do it," Feiner said. "I believe that from a political standpoint, the government has to do something for the common good so that nobody loses."
The Edgemont Community Council, Inc.
Town officials are trying to impede residents Bob Bernstein and Herb Rosenberg from continuing to protect the rights of town taxpayers in the Valhalla matter by prohibiting them from having any direct communications with elected and appointed town officials in connection with the Valhalla court case.
Instead, they are requiring that all such communications be held through the Town Attorney's office, a measure generally required when parties are not on the same side as they are here, but are on opposite sides. In addition, Feiner, who supports the illegal grant and was Valhalla's principal witness seeking to enforce it, has requested that Mr. Bernstein and Mr. Rosenberg henceforth include the Town Attorney's office on "all legal strategy discussions regarding the appeal."
Mr. Bernstein and Mr. Rosenberg have declined to do that because, contrary to the successful arguments that Mr. Bernstein and Mr. Rosenberg made, the Town never argued that the grant was illegal, argued that the grant was not a gift but a "contract," and never brought any claims under the grant's indemnification provision.
Mr. Bernstein and Mr. Rosenberg believe that because the court held that, as town taxpayers, "they stand in the shoes of the town and may assert what the town could assert on behalf of the town," they have a responsibility and a right to communicate directly with other town taxpayers, town civic leaders, village officials and, of course, all town elected and appointed officials.