A court settlement between five Upstate counties and the Hudson River-Black River Regulating District over its financing will mean a $3.7 million payment to Saratoga County.
Saratoga County’s Law and Finance Committee unanimously approved the settlement on Wednesday, Feb. 13, and the full Board of Supervisors will vote on it Feb. 26.
“It’s a good settlement,” said Ryan Moore, management analyst for the Saratoga County Administrator’s Office. “Everyone gets what they want.”
The agreement involves Albany, Rensselaer, Saratoga, Warren and Washington counties, the five counties that the river district starting billing for its operating costs in 2010 after a federal court said it couldn’t bill downstream hydro-electric producers.
The district was formed more than 80 years ago to manage the flow of the Sacandaga River as a way of controlling flooding along he Hudson River. In Saratoga County, the Conklingville Dam on Sacandaga Lake is the primary beneficiary of the district.
According to Moore, for years the regulating district had paid for its operating costs by assessing downriver power plants. A federal court case in 2008 ruled that they could no longer do that. As a result, HRBRRD couldn’t pay its operating expenses, so they came up with a new method to stay in business.
“They looked at Albany, Rensselaer, Saratoga, Warren and Washington counties and they defined those counties as benefiting from their activities because of flood control,” said Moore. “They came up with a method to assess the five counties for their operating fees.”
The counties sued over the legality of the bills, but state courts ruled against the counties. Last May, the Appellate Division upheld the legality of the bills, but said the state should also pay a share of the district’s expenses. The settlement is based on that ruling.
Moore said it was challenged in court because when the state created this district, the intention was never to have county property taxpayers pay the costs.
“We went after their assessment of the counties and this is something that’s dragged out for a long time,” said Moore.
During the process, Saratoga County has been paying the town and school district taxes the regulating district was supposed to be paying since 2010. The regulating district stopped paying taxes when the lawsuit was filed. That amounted to $3.7 million over three years.
“There has been a lot of pressure to settle this case,” said Moore. “They are in arrears and the counties are hurting. We never agreed to the principal that they could assess us.”
Moore said the case has been dragged out for a long time, but one thing accomplished was to get the district to agree the state was also a beneficiary, so the state now has a portion of the assessment.
Under the settlement, the district will receive a total of $3.5 million to settle the last three years of unpaid assessments. Albany County will pay $1.2 million; Rensselaer, $634,000; Warren County, $284,000; and Washington County, $161,000.
Moore said the reason Saratoga County was getting $3.7 million credit was because of the pressures on the district to pay its taxes. Moore said Saratoga County’s policy is to make the schools and towns whole. When the schools and towns were not paid taxes, the county paid them on their behalf.
“At the end of the day, HRBRRD essentially owes all those taxes,” he said.
As a result of the settlement, Saratoga County will pay its portion of the settlement by credit. Going forward, Saratoga County’s payment will be a little more than $1 million for its portion of the settlement, but because of the credit, they will not be paying for the first three years.
“The regulating district now has operating revenue that they can use to stay in business and they can start to pay off their taxes to the towns,” said Moore.
Moore also said Saratoga County is in a better spot than at the beginning of the litigation because now the county only has to pay just over $1 million a year.
“That’s a lot better than paying $2 million,” said Moore. “That’s what they were initially trying to get out of us.”