A five-year probe by the state comptroller’s office into the handling of water connection fees in the city has ended, city officials said.
Saratoga Springs City Attorney Vincent DeLeonardis told the City Council that files Comptroller Thomas P. DiNapoli’s office has had since 2014 were returned by a representative from his office, who said the matter was “concluded, without report.”
The comptroller’s office only indirectly confirmed there ever was an investigation. “We do not have an investigation underway. We decline any further comment,” said spokeswoman Kate Gurnett.
The investigation stemmed from a 2014 dispute within the city over whether the city Department of Public Works had inappropriately waived then-required water connection fee payments for certain developers and not others.
The investigation was requested by former Mayor Joanne Yepsen in December 2014. During the investigation, the City Council voted 5-0 to approve connection waivers that were in question for a project on Weibel Avenue.
The council that year also voted to abolish the water connection fee, saying it has been advised to do so by legal counsel.
“The conclusion of the comptroller’s investigation without a report confirms that the council made a sound decision in 2014 to eliminate connection fees because it was a bad policy, plain and simple,” said city Public Works Commissioner Anthony “Skip” Scirocco. “The only issue with water connection fees was their existence in the first place, and when they were challenged in court multiple times, the city lost.”
Water connection fees were first approved by the City Council in 1992. The fee remained in place even though court decisions in 1998 and 1999 found the fee to be illegal, since city officials believed the rulings applied only to the individual cases that had been brought.
City policy allowed land developers to avoid the fee if they made water infrastructure improvements in the public right-of-way significant enough to benefit more than their own project, and it was the granting of such waivers that led to the 2014 dispute. In late 2014, after the matter had already been submitted to the comptroller’s office, the council voted 4-1 to end the fee entirely, as unneeded and probably illegal under the earlier court rulings.
Most new connections were charged $3,000 for the first unit and $2,000 per additional unit, so the cost to developers could be substantial. Former city public works director William Mc-Tygue charged that Scirocco inappropriately waived $800,000 in fees in the four years prior to 2014 for Bonacio Construction, then and now one of the city’s most prominent builders.
At the time, Scirocco cited a section of city code saying the commissioner of public works “reserves the right to waive or amend the standards for acceptance, to reduce or increase the period of conditional acceptance and to waive the bonding requirement.”
The city finance department conducted its own internal audit of water fees in 2014, based on McTygue’s concerns, and found there were no issues, said city Finance Commissioner Michele Madigan.
“It’s unfortunate it took five years for the state to reaffirm what the Finance Department, and a majority of the City Council, rightly believed at the time,” said Madigan, who like Scirocco was on the council in 2014. “I’m glad that we can now put this issue to rest.”
The fees collected were going toward a plan for the city to take water from Saratoga Lake, which was strongly opposed by other communities around the lake, and never came to fruition. In 2014, four new wells were developed at the Bog Meadow reservoir, and the city now has an adequate water supply, city officials said.