Town, city reach tax-sharing deal for use of water supply

The long-awaited tax-sharing plan between Gloversville and the town of Johnstown was agreed to Tuesd
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The long-awaited tax-sharing plan between Gloversville and the town of Johnstown was agreed to Tuesday after a meeting of the two municipalities.

Mayor Dayton King said the tax-sharing agreement is much better than deals made in the past, which extended Gloversville’s water to commercial developments on Route 30A without any compensation other than a higher water rate.

“This deal is 1,000 percent better for the city,” King said.

The complex agreement, written by town attorney David Seward and city attorney Matthew Trainor, enables the town to use a special tax-sharing law passed by the state legislature in 2009 to give Gloversville a 60 percent share of the property and sales tax revenues, as well as other fees, generated by properties provided water and other services by Gloversville.

The 60 percent share for Gloversville is not required for any tax-sharing deal but is expressed as a goal by both. Johnstown Supervisor Roy Palmateer said Gloversville will likely get a higher percentage of the taxes because it will provide paving and road maintenance for properties generating shared taxes. He said he will probably seek to increase revenues from the properties by levying additional fees because the town tax rate is too low.

“Our town tax rate is only $1.09 per $1,000, and 50 percent of that isn’t much,” he said.

annexation deal

The tax-sharing agreement builds on an annexation deal between the two in June. The town of Johnstown agreed to allow Gloversville to annex two vacant parcels of land owned by the Fulton County Federal Credit Union on Route 30A in exchange for Gloversville’s commitment to reserve a portion of the tax revenues from the parcels, which will likely be developed, into a dedicated water fund to pay for water lines to properties on Hales Mills Road Extension in the town.

The tax-sharing concept has been fought for by both municipalities for years as part of a push to establish a Walmart supercenter in Gloversville and promote economic growth. Officials expect the supercenter, which could break ground in October, will attract development on Route 30A.

The town of Johnstown has land ready for that development but not the water and sewer services necessary for business. Gloversville has been desperate to generate revenues for its nearly insolvent city government but has lacked the land needed for growth.

Tuesday’s tax-sharing agreement does not limit the sharing to development on Hales Mills Road. The agreement creates a framework for establishing tax-sharing for any town property receiving city services.

King admits one remaining flaw in the plan is that Gloversville jointly owns its sewer plant with the city of Johnstown and both cities must agree to sewer connections that extend beyond their borders.

The Walmart supercenter project was endangered when the city of Johnstown refused to grant all of the sewer connections required by all of the parties involved. The city of Johnstown agreed to hook up the Walmart and the Fulton County Federal Credit Union, which has a septic system that would be destroyed by an access road needed for the Walmart, but not the credit union’s vacant parcels. The credit union’s price for allowing the access road to be built was sewer connections for its vacant lots.

Gloversville and the town of Johnstown solved the problem by allowing Gloversville to annex the vacant lots, which was not what town officials had originally wanted.

Palmateer said that if the city of Johnstown holds up future development by denying sewer connections, he intends to sue them. He said in the meantime he’s searching for land to build a $100,000 septic system to facilitate growth on Hales Mills Road Extension.

Categories: Schenectady County

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