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Fulton foreclosure amendment could reinstate years-long lease for Cayuga Community College

U.S. Bank National Association and C-III Asset Management are looking to amend a foreclosure judgement on property in Fulton, which if granted may keep Cayuga Community College on the hook for a lengthy lease agreement that could cost it about $12 million over time. 

The foreclosed properties, 13-41 River Glen Drive, are next to CCC's Fulton campus at 11 River Glen Drive. They're owned by River Glen Holdings LLC, formed in 2011 by the Cayuga Community College Foundation. The then $9.4 million properties are now valued at just over $6 million, real property records show. In 2016, the subsidiary had a $7 million balloon payment due to the mortgage holder, but it defaulted. 

Mortgage holders U.S. Bank National Association through special servicer C-III Asset Management, filed a judgement of foreclosure sale with an auction set for April 2. The judgement does not affect CCC's Fulton campus, which Cayuga County owns in trust for the college, nor does it affect an approximately 46-acre land parcel on Maple Avenue that the county owns nearby.

The mortgage holders abruptly canceled the auction at the end of March, and county and college foundation officials said they did not know why. 

On April 4, attorneys representing the mortgage holder from Kilpatrick Townsend & Stockton sent a letter to Oswego County Judge James W. McCarthy that included a request to amend the foreclosure judgement. The amendment seeks to remove CCC and K-Mart, which is leasing a vacant approximately 90,000-square-foot space, from the action "because Plaintiff seeks to allow the tenancy interests of Kmart and CCC to survive the foreclosure sale."

Guy Cosentino, the college foundation's executive director, had told The Citizen in March that past college officials had negotiated a kind of secondary lease for the properties next to the campus. Many had been storefronts, including the K-Mart, and the college was supposed to pay $5 per square foot of those spaces as they became vacant and other leases ended. Cosentino had said that lease agreement could have cost the college $12 million if it carried into the 2030s, but the foreclosure judgement terminated those leases and removed that liability.

Cayuga County Attorney Fred Westphal, who also represents CCC, said he received a courtesy copy of the plaintiff's amendment motion on April 9.

"Right now the leases are canceled, and I believe this may be an attempt to extend those, and we'll receive the papers and review them and respond," he said. 

The college has not officially been served, he said, and as of Thursday he had not been advised as to whether there is a court return date. McCarthy's chambers declined to comment, and Brandofino did not return The Citizen's calls or emails. Sears Holding Corporation, which owns K-Mart, also did not respond to a request for comment.

According to the foreclosure judgement, the properties must be auctioned by May 2, but Brandofino's communication requests to push that out 90 days.

"The time frame is shrinking fast," Westphal said. "I assume the request to extend it is based on the fact that the date is May 2, and the papers are going in now. They want to probably preserve their right to sell the property regardless of what the judge does."

CCC President Brian Durant said the college and its attorneys are holding internal discussions to determine the college's next steps. 

Auburn department heads propose new hires in budget presentations

AUBURN — The remaining city of Auburn department heads presented their preliminary 2018-2019 budget request to the Auburn City Council Thursday. 

Director of Municipal Utilities Seth Jensen kicked off the budget presentations by noting that his department is "pretty much holding the line with our budgets." The department, which is split into three separate operating budgets for water services, sewer services and power utility and landfill services, is forecasting a budget increase of less than 1 percent and will add several new employees. 

The most significant staffing change will be the addition of a technical director, who would split his or her time between the water and sewer departments. 

Councilor Jimmy Giannettino said he was supportive of creating the new position. 

"I think it makes sense," Giannettino said.  

Additionally, Jensen would like to implement a software program, called Sensus Customer Portal, that would allow residents to track their water usage online. He said the initial start-up cost of $25,000 could be offset by a one-time user fee for those who would like to use the program. Council will have to decide to impose a fee or not. 

More staffing changes were proposed for the code enforcement office. Director of Planning and Economic Development Jenny Haines, whose department oversees code enforcement, said the city can save around $30,000 a year by eliminating its trash, grass and snow contracts with private companies. That savings will go toward hiring two part-time laborers who will be responsible for maintaining the upkeep of houses that are not up to code. 

Auburn Fire Chief Joseph Morabito said that the biggest increase to the department's budget, nearly $300,000, is due to contractual obligations relating to salaries, retirement, benefits and overtime. He also noted that there are 244 properties within the city on the vacant building registry. Buildings placed on this registry are required to pay yearly fees between $300 and $2,000, depending on how long they have been abandoned. 

Morabito explained that the city charges fees for these properties in an effort to get them fixed up and put back on the tax roll.

"We felt charging them a fee would help push them along to get them to where they should be," Morabito said. "In some cases it works and in some cases it does not." 

In the corporation counsel's office, long-time city attorney John Rossi will leave the city as a part-time employee but continue to work with the city as a consultant. The department's budget will otherwise remain largely unchanged.

The city preliminarily budgeted $147,365 to operate the Equal Rights Cultural Heritage Center that will open downtown in October. However, the city recently received a $50,000 grant from the state to put toward offsetting operating costs. City Clerk Chuck Mason said during his budget presentation that between the grant and the estimated $15,000 that will be collected in rent from the Downtown Auburn Business Improvement District and the Cayuga County Office of Tourism, who will relocate to the new building, the city will spend around $82,000 to operate the center in its first year. 

Overall, the city is looking at a 1-percent spending increase, which puts the city's general fund budget at $34,287,715. The preliminary tax levy increase is set at 5 percent, which would be over the state tax cap. With this tax levy increase, the city would not have to dip into its fund balance to balance the budget. Garbage collection, sewer and water fees are not expected to increase.

A public hearing on the budget will take place during the May 24 city council meeting and final council approval is scheduled for June 7. 

Delays abound for state English tests across Cayuga County area

Delays plagued English language arts assessments across Cayuga County-area schools Wednesday and Thursday.

Auburn Enlarged City School District Director of Instruction Dennis Taylor and Port Byron Central School District Superintendent Neil O'Brien said the Central New York Regional Information Center — the internet provider for several state BOCES components — had connectivity problems Thursday that delayed testing for some students trying to complete the exams online. 

Taylor said the decision was made to delay sixth-grade testing Thursday morning. Instead of risking having students submit their tests only to find out that they didn't send properly and that work being erased, Taylor said, assessments have been delayed to April 17 and 18.

"We decided to alleviate the stress on our students and put them through it," Taylor said.

Sixth-grade students were meant to tackle the assessments electronically Thursday and Friday, while fifth-grade students took the assessments on Tuesday and Wednesday. Third-, fourth-, seventh- and eighth-graders in Auburn are taking paper versions of the tests.

O'Brien said that despite internet issues, each grade scheduled to take assessments in Port Byron Thursday, with the exception of the fifth-grade students, were able to take their tests. Those students will take the assessments Friday, he said.

Other assessment obstacles occurred Wednesday, as it was widely reported that some state districts experienced problems logging into the online testing system. 

After state aid concerns, Port Byron school district to have a tight budget

PORT BYRON — The Port Byron Central School District will have a tight 2018-2019 budget after state aid issues.

At a district board of education meeting Thursday night, the board approved the 2018-2019 budget to be brought forth to taxpayers for the budget vote May 15. Mitch Toleson, the district's assistant superintendent for business and finance, said during a budget presentation before the vote that "this is probably one of the tightest budgets we've had in quite a few years."

The district's total budget is set to be $21,273,209, the same as last year. The board approved a 1.20-percent tax levy increase. The district tax cap established by the state is 5.84 percent. Toleson said the board has raised the levy 1.2 percent for years, since it was found the community struggled to pay high tax levies.

"We have decided we're only doing 1.2 (percent) because you've decided as a board many years ago that our taxpayers can't pay the burden," Toleson said.

Toleson said no staff or programs are set to be cut. District Superintendent Neil O'Brien said after the meeting that a kindergarten through 12th-grade BOCES curriculum specialist will be added. The specialist will work in the district one day a week, with a focus on English language arts.

The major driver of cost increases have included special education costs and contractual increases, Toleson said. The district's state aid dropped by $263,951 under the state's finalized budget. Toleson and O'Brien attributed that drop, at least partially, to a 2015 lottery win in the community. That $42 million windfall affects the district's combined wealth ratio, as a district's overall income impacts the aid amount it receives. O'Brien said the 2.9-percent foundation aid increase the district received from the state's final numbers helped mitigate the loss, as well.

"We still lost some, but we didn't lose (funds) substantially," O'Brien said.

O'Brien said he is still waiting to hear if the district will receive aid to help the district mitigate the funding loss from the lottery. He said he has lobbied for that assistance with state Sen. Pam Helming's office. Toleson noted the district won't receive as much in building aid, as the district has been paying less in debt from previous building projects.

In other news

O'Brien said the district is on track to offer free breakfast and lunch for all grades next year. The revenue would come from the Community Eligibility Provision, a federal program that is "a non-pricing meal service option for schools and school districts in low-income areas," according to the U.S. Department of Agriculture's website.