MAYFIELD - Local school district officials say the inability of the Hudson River-Black River Regulating District to pay its school tax bills on time could have serious ramifications for their districts.

The regulating district does not have the cash flow it normally would because of a U.S. Court of Appeals decision last year that said it could not get its money from the same places it generally does. It is no longer allowed, for example, to charge certain downstream entities for headwater benefits they receive from the regulating district's operation of the Conklingville Dam.

Because its $5.4 million budget is no longer being supported by those downstream entities, which include companies such as Albany Engineering and National Grid, the regulating district has been forced to look at other ways it can pay its bills.

Executive Director Glenn LaFave said the regulating district's board has decided it wants to use some of its reserve funds for that purpose, but said such a move must first be approved by the state comptroller's office. The office has not yet done so, and LaFave said he did not know when it might.

"We were optimistic that those approvals might have been forthcoming by [Tuesday], by the [regulating district's most recent] board meeting, but they did not," LaFave said.

Once it receives the approval-it has requested $3.8 million in reserve funds be freed for use-the regulating district would pay its school taxes, which amount to $1.4 million.

The Broadalbin-Perth, Mayfield and Northville central school districts will be affected by the regulating district's inability to pay its school taxes on time, as will other school districts around the Great Sacandaga Lake.

Northville Superintendent Kathy Dougherty said the regulating district owes the school district $326,000, but if that amount is not paid soon, the school district will be forced to borrow money because it would have significant cash-flow problems without revenue from those taxes. It has not budgeted for the interest it would be required to pay on such a loan, meaning the school district might have to find areas to cut to meet its budget.

"Because we have a fixed amount of money that was raised, something else would have to be eliminated," Dougherty said. "We'd look at anything that wasn't mandated or negotiated by contractual agreement."

The district's business manager, Bruce Ellsworth, said the regulating district would not be penalized for paying its taxes late in the form of late fees or interest penalties because taxes paid on state properties are exempt from being fined.

That won't stop Broadalbin-Perth Superintendent Stephen Tomlinson from attempting to ensure the regulating district pays for its tardiness in some form.

"You can bet I'm going to try," he said. "In my eyes, they're no different than any other taxpayer in our community."

Tomlinson said the school district is owed $256,000. Normally, he said, the regulating district fulfills its tax obligations later than most entities, but this year it will pay later than it ever has before.

"You're going to tell me all of a sudden they didn't know they didn't have money?" Tomlinson asked. "I mean, come on. That doesn't make a whole lot of sense."

Zach Subar covers rural Fulton County news. He can be reached at ruralnews@leaderherald.com.