July 19-25, 2007
Politicians Clash With New Reservoir
Company request for lowered tax assessments triggers a spat
By FRITZ MAYER
SULLIVAN COUNTY, NY - Now that they own four reservoirs, they thought the county should have a boat.
So Alliance Energy Renewables, the company that bought Swinging Bridge and three other reservoirs in Sullivan County, sought to donate a patrol boat to the sheriff's office. Local elected officials, however, declined to attend a press conference related to the matter, and the future of the boat is now unclear.
On May 1, Alliance took title to the four reservoirs that were previously owned by the Mirant, Inc., subsidiary New York-Gen, which was in bankruptcy. At about the same time, Alliance executives decided to donate a boat, worth $44,827, to the Sullivan County Sheriff's Office for patrol of the Swinging Bridge Reservoir. Alliance also now owns the Toronto, Rio and Mongaup Falls reservoirs.
On May 17, Sullivan County lawmakers passed a resolution allowing Sheriff Mike Schiff to accept the donated boat from Alliance. Subsequent to that, however, the company started proceedings to have the tax assessments of their holdings in Sullivan County lowered significantly, and attitudes about the company and the donated boat began to harden. The relationships between the company and some local politicians became strained.
A planned news conference regarding the donation of the boat, scheduled for July 13, was cancelled at the last minute, as was a scheduled meeting between local politicians and company officials on July 16. If Alliance gets the lowered assessments it is seeking, the tax implications could be serious, especially for Lumberland. Alliance is seeking a reduction of its Lumberland property from about $20 million to somewhere near $3 million. This would wipe out about 20 percent of Lumberland's real property tax revenue.
Alliance is also seeking to lower assessments of its property in the towns of Bethel, Forestburgh and Thompson, which would result in a loss of tax revenues in those towns. The Eldred and Monticello school districts would also face a loss of tax revenue.
The assessors in the towns have already denied the grievances, and all sides believe the matter will be decided in court.
The properties in all four towns were assessed at about $24 million. At the bankruptcy sale, however, the company was reportedly able to purchase the properties for $5.1 million. Alliance is seeking the steep reductions based, at least in part, on their low purchase price.
Bill Rieber, a realtor and a Thompson councilman, said judges don't usually see a bankruptcy price as a good reflection of value. However, it will be up to the municipalities to show that the properties are worth more than the assessment requested by Alliance.
Jane Rubinstein, a spokeswoman for the company, said the issue of the assessments was under legal review and would be settled with the use of "formulas and guidelines."
She said the question of the company donating a boat to the sheriff's office was one of public safety, and as far as her company is concerned, the boat will still be donated. She said she "would hope politics would not trump public safety."
Local officials are no longer commenting on the matter.