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Lackawanna schools vote on fund

With Erie County having exhausted all legal avenues to undo a tax settlement between Lackawanna and the owners of the former Bethlehem Steel site, the School Board unanimously agreed Thursday to liquidate a $1.2 million tax reserve fund held in escrow for several years and return the money to the district's general fund.

"It's over," said Sam Masry, the district's business administrator.

Back in 2008, city and school officials unanimously approved a settlement in a years-long challenge of tax assessments by AcelorMittal, the current owner of the property.

Under the settlement, the assessments for 2001 through 2007 were revised to zero, though neither the city nor the school district was required to refund tax revenue that had been collected. Throughout the challenge, Mittal made annual payments of about $1 million to the city and hundreds of thousand of dollars to the school district.

Masry said the school district had built a reserve of more than $1.5 million toward any legal fees or refunds.

That appeared to be a possibility when Erie County tried to intervene in the settlement in an attempt to avoid refunding $2.1 million in taxes and sewer fees that the county had collected from Mittal.

But State Supreme Court Justice Donna M. Siwek sided with the city and school district and agreed to the settlement in May 2008, effectively closing a case that had gone on for seven years. The county has since exhausted its appeals of Siwek's order.

Thursday, the Lackawanna School Board directed that the tax reserve fund be liquidated and the $1.2 million returned to the school district's general fund.

e-mail: hmcneil@buffnews.com

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