A proposal by the Johnstown town supervisor to establish a revenue-sharing agreement with the cities of Gloversville and Johnstown as a way to promote economic development in Fulton County is drawing a cool response from Glove Cities officials.
Town Supervisor Nancy MacVean said the proposal would help end conflicts among the municipalities she said are costing the county jobs and revenues from sales and property taxes.
MacVean said the area has already lost several potential new businesses because of the conflicts, including an Olive Garden restaurant, a Taco Bell and JCPenney store, all of which wanted to build in the town.
Her idea is to divide among the town and cities the property and sales tax revenues on projects built in the town and using city sewer lines. The alternative, she said, is for the town to fight efforts by either city to annex town land, a process that could take months to resolve and offers no guarantee of victory for either side.
“If we had an agreement, we would have a lot of great things coming in here,” MacVean said. “It would be like saying ‘Welcome to Fulton County,’ and they would come and there would be more people working and less people on welfare,” she said.
If the cities refuse to cooperate with the town, MacVean said she is willing to fight their annexation efforts. “If I knuckle under for these annexations, I figure they will be able to walk all over me. The key is cooperation.”
MacVean said she expects annexation battles with the cities to continue as both seek to expand their tax bases at the town’s expense. The town surrounds the two cities.
MacVean said the city of Gloversville is debt-ridden and needs to expand its tax base to survive. She said the city of Johnstown is not debt-ridden but has direct access to Route 30A, a major thoroughfare, which businesses covet. Gloversville has no such direct access.
Officials from the two cities reacted with caution to MacVean’s proposal. Johnstown Mayor Sarah Slingerland said she has yet to see the proposal but said any deal with the other municipalities would have to cover her city’s actual costs to provide services outside of its borders.
“The city of Johnstown cannot afford to give away services for free,” Slingerland said. “It has to make fiscal sense for the city because of the cost of services.”
She added that several of the projects cited by MacVean are interested in locating in her city and have not asked to annexation proceedings against the town.
Robin Wentworth, a Gloversville councilwoman, also was cautious about the idea. “We are all about helping each other, but if businesses continue to locate outside of the city and they want city services and the city loses, that does not help the city,” she said.
She said she had not heard of the proposals cited by MacVean.
Among factors city officials cite in their evaluation of MacVean’s proposal is that property taxes in the town do not generate as much revenue as property taxes in the two cities. The town tax is $1.13 per $1,000 assessed value versus $21.71 in the city of Gloversville and $17.20 in the city of Johnstown.
As such, property taxes generated for a building in the town would not cover a respective city’s costs to provide services under a revenue-sharing agreement.
One reason the town’s tax rate is so low is the town does not have sewer and water services, which are built generally with municipal bonds. Nor does it have professional fire departments and police departments, which come with associated personnel costs.
The lack of infrastructure has affected development in the town, said Ryan Fagan, town code enforcement officer. He said when developers come to the town Planning Board with a project, they are told to obtain letters from both Gloversville and Johnstown agreeing to provide sewer and water hookups. “Then we never see them again,” he said.
The two cities must sign-off on sewer hookups under a joint operating agreement that applies to their co-ownership of the Gloversville-Johnstown Wastewater Treatment Facility.
For reasons of self-preservation, the cities often refuse to grant the approvals, leaving businesses the option of pursuing annexation of town land with the cities, of moving their businesses outright into the cities, or of giving up on their projects.
“We do not pursue annexation. That is a decision of the business,” Wentworth said.
Under an annexation action, a panel appointed by an appellate court decides the merits under general municipal law. Annexation is granted based on what is the general public’s best interest.
In the past, the town did not fight annexation, MacVean said. “It riled me up and I found the public felt the same way,” she said, and it is why she ran for supervisor last November and won, she said. Several new Town Board members who shared her view also were elected.