The independently elected Johnstown Water Board has filed a lawsuit seeking to regain control of its NBT bank accounts, the city’s Water Department personnel and its budget from the city of Johnstown and lame duck officials Mayor Vern Jackson and City Treasurer Mike Gifford.
Water Board member Brandon Lyon introduced the resolution to hire Albany-based law firm Goldberger & Kremer at the board’s meeting Tuesday, stating Johnstown City Attorney Michael Poulin has denied the Water Board’s requests to “enforce the city charter” and has advised the Water Board that the Common Council will not authorize the Water Board to hire outside legal council to begin legal action against the city. The board voted unanimously to hire the law firm anyway, defying Poulin and the Common Council’s authority.
“The Water Board has determined it must commence legal proceedings to enforce the charter,” Lyon said.
Water Board President Mike Capparello is listed as one of the plaintiffs in the lawsuit, which was filed in state Supreme Court Wednesday by attorney Bryan Goldberger. Jackson and Gifford, who have both announced they will not seek re-election in November, are listed as respondents to the lawsuit.
The Article 78 lawsuit, which is a lawsuit filed against a local government entity, states the Water Board seeks a court judgment awarding all costs and fees associated with hiring Goldberger & Kremer to be paid for by the city government.
The lawsuit also seeks these judgments:
• Declaring the city, Jackson and Gifford have failed to perform a duty required of them by law and have exceeded their jurisdiction by failing to comply with the Johnstown city charter.
• Compelling Gifford to return control of all Water Board assets, including the water revenue NBT Bank accounts, to the Water Board.
• A court order requiring the city Common Council to stop modifying the Water Board’s Water Department budget without permission.
• A court order requiring the mayor and city Common Council to stop interfering with the hiring of a water superintendent for the city Water Department.
In November the Water Board survived the second of two referendum attempts over the past five years to abolish it, with the majority of voters, 1,600 to 1560, voting to maintain the Water Board, by a margin of 40 votes.
Unlike nearly all other municipalities in upstate New York, the city of Johnstown, and its neighboring city Gloversville, have independently elected water boards which by city charter are given authority and control over the two cities’ water rates, water fee revenues, and Water Department expenses and personnel.
But Johntown’s Water Board has had its autonomy challenged in several ways by Mayor Vern Jackson and City Treasurer Mike Gifford. The Water Board’s lawsuit seeks to restore its authority, arguing Jackson, the city Common Council and Gifford have violated the city’s charter.
In February the Johnstown Water Board attempted to hire former Gloversville Department of Public Works Director Dale Trumbull as the city’s new water superintendent, a position that had been vacant for years.
A Fulton County grand jury probe of allegations of official misconduct against members of the Johnstown Water Board had advised the board to hire a water superintendent in order to prevent future disagreements over the management of Water Department personnel. The grand jury decided not to press charges against any of the members of the Water Board, but provided a report offering suggestions to improve the relationship between the city and the Water Board, most of which appear to have been ignored. Jackson and the Common Council prevented the Water Board from hiring Trumbull.
“The newly hired water superintendent was terminated by respondent city and escorted off city property by respondent Jackson and two police officers on or about Feb. 18,” reads the lawsuit. “Such action by respondent city was done at the direction of respondent Jackson and without the consent or approval of the Water Board. Petitioners have demanded that it be permitted to hire a water superintendent as specifically authorized by the charter, but respondents have failed or refused to allow to do so.”
On Sept. 3 City Treasurer Mike Gifford obtained control of two NBT Bank checking accounts containing approximately $3.4 million that had previously been under the signatory control of the Water Board’s appointed water clerk, Barbara Koehler, who subsequently resigned. Gifford’s rationale for taking control of the accounts was an “investment policy” passed by the Common Council in April which put all control of revenues coming into the city under the city treasurer’s authority. NBT agreed to hand over control of the accounts to Gifford. NBT Bank is not named as a respondent in the lawsuit.
Gifford told The Daily Gazette in September that he had held off on implementing the city investment policy until August, in part because he didn’t know for certain the action would hold up to a legal challenge.
“In a sense, yeah, I do wonder about that, and I do get concerned about all of this back and forth, arguing and such, and I don’t like that,” he said. “Sometimes I think there are times when you just talk it out, and, apparently, we can’t, so it’s sort of a last resort.”
Since then, Gifford has said he is certain he has legal authority over the accounts and has asserted the Water Board will never regain control of those accounts.
“Respondents, pursuant to the charter, do not have the authority to take control of the Water Department’s bank accounts and such actions, as described above are in violation of the charter,” the Water Board’s lawsuit reads.