Court: Regulating district can bill counties for flood control

PHOTOGRAPHER: Stephen Williams

The Hudson River-Black River Regulating District can legally bill five counties downstream of the Great Sacandaga Lake for its operating costs, but has over-billed them, a midlevel appeals court ruled Thursday.

The Third Department Appellate Division found the HRBRRD should have calculated and subtracted “benefits to the state” before billing the counties $4.5 million annually for flood control protection.

The appeals court sent the matter back to the regulating district to recalculate the charges. The judges said the benefits to the state from flood protection are potentially financially significant.

“Numerous state roads, bridges and other infrastructure, as well as state parks, [are] located throughout the counties,” the judges wrote.

The ruling comes after Saratoga, Albany, Rensselaer, Warren, Washington and Rensselaer counties sued the district to overturn its billings.

“It’s a partial win, but we were hoping for more,” said Mark J. Schachner of Glens Falls, the attorney who represented the five counties.

The decision could be appealed to the state’s highest court, the Court of Appeals, he said — but that won’t be decided until after consultations with the five counties.

HRBRRD officials are still analyzing the decision, but are generally pleased.

“We think that all in all, this is a positive decision,” said Michael Clark, executive director of the district. “It supports the methodology we used for apportioning the costs of flood control, with the one exception.”

In April 2011, state Supreme Court Justice Stephen A. Ferradino in Ballston Spa had dismissed the counties’ case, saying state law clearly allowed the HRBRRD to bill them for providing flood control to county property owners. The counties appealed that decision, leading to Thursday’s decision.

In the interim, none of the counties have paid the bills, leaving the district in an ongoing financial crisis.

The Mayfield-based district has struggled with the issue of how to pay its bills since a federal court ruling in 2008 overturned its 80-year-old practice of charging downstream hydroelectric plants for most of its operating costs.

The district was established in the 1920s to control flooding on the Hudson River. The Conkingville Dam, which holds back the Great Sacandaga Lake and allows the district to control the flow of the Sacandaga River, is one of its primary facilities.

In March 2010, the district billed the five closest downstream counties $4.5 million for flood control services provided by the dam in Hadley.

Calculating the bill based on the value of downstream property located within the 100-year flood plain, the district billed Albany County $1.7 million, Saratoga County $1.3 million, Rensselaer County $961,000, Warren County $297,000 and Washington County $175,000.

Under the court ruling, some of that cost should be borne by the state because of the flood protection provided to state property. The counties believe there are 5,300 miles of state highway and 800 state bridges that benefit, as well as state parklands.

Calculating how much of the district’s costs should actually be paid by the state will be “complex,” the court acknowledged. Depending on what that calculation is, the counties could go back to court, Schachner said.

“There is obviously extremely valuable state property that the district has discounted,” he said.

In its previous methodology, the HRBRRD hadn’t calculated a bill for the state because officials said the district couldn’t force the state Legislature to pay. The appellate court, however, said that the state law which created the district requires it, and not making that calculation is “irrational.”

“The fact that the Legislature has historically refused to make such appropriations provides neither this court or respondents with a basis to disregard the express statutory mandate to deduct the benefits to the state,” the five judges wrote in a unanimous decision.

The decision did not establish a timetable for determining how much the state should pay and recalculating the bills for the counties.

Clark said the decision is still being analyzed, and it’s too soon to know what the district will do.

A large part of the district’s $5.8 million budget goes to pay property taxes to the rural communities and school districts around the lake. Last year the district drained other funds to pay two years of back taxes, but it has not paid the current year’s taxes.

Peter VanAvery, co-founder of the Batchellerville Bridge Action Committee, who represents property owners around Great Sacandaga Lake, said the dispute could drag on for years.

“I don’t understand why the state doesn’t simply pick up the whole bill,” he said in an email. “Great Sacandaga Lake is a major tourist magnet and the Conklingville Dam’s ability to regulate the flow of the Hudson has an impact as far downriver as Poughkeepsie.”

Poughkeepsie is generally as far north as saltwater from the Atlantic Ocean reaches.