What price water? Hurley says its NYC settlement is a compromise

(Photo by Dion Ogust)

What’s the real story behind the settlement that the Town of Hurley has reached with New York City regarding its tax assessment of the city’s Ashokan Reservoir holdings?

According to Hurley supervisor Gary Bellows, he decided to okay a compromise assessment figure of $155 million, set to go up to $160 million in incremental steps starting in 2018 and running through 2021, because he couldn’t saddle his taxpayers with the $300,000 he figures Hurley’s been paying in legal bills to fight for the $185 million assessment figure they felt was right.

“Unfortunately, they had more money than us to fight their case with,” he said, while noting that the $155 million figure was still substantially above the $40 million he says the city wanted to pay. “With the state’s two percent tax cap, we had no more money to fight this with. Things are tough enough already.”


Terms of the deal, the supervisor noted, included a stipulation that all previous discrepancies between the city and town prior to the current year would be written off, and the city has agreed not to sue Hurley over assessment matters for the 10-year life of the agreement.

Bellows added that the Hurley Town Board had passed a resolution okaying the terms of the agreement earlier this month, which would authorize him to sign the deal once it’s finalized and signed by New York City in the coming weeks. During that interim, he added, he didn’t feel right disseminating the agreement.

“Onteora knows about it. They and Ulster County were invited to all proceedings,” he said in regards to the local school board’s current consideration of the assessment reduction, which they are currently aiming to discuss and vote on at their upcoming October 2 meeting. “Onteora’s attorney was there with our attorney, Jack Darwak, when the numbers were agreed upon.”

In a recent interview, Onteora Assistant Superintendent for Business Victoria McLaren noted that the school board would also have to discuss what to do with a reserve fund that had been set up to handle costs should the city have won its assessment request. She noted that the amount held was over $4 million, including several other such reserves.

Calls to Ulster County Executive Michael Hein about any similar reserves covering the county’s portion of its tax income from the now-settled court case went unanswered as of press time.


Hurley left on its own

“We had set aside only enough to cover our battle costs,” Bellows said of any gains Hurley might make of the settlement. “We’ll be covered for this year,” he added, in regards to any extra tax share it will have to cover for the current year — the taxes on the difference between the $185 million assessment and the $155 million settlement — which the supervisor noted as being covered by what it had set aside for its legal costs in fighting the battle in court.

As for the future, McLaren noted that she estimated additional costs to be shared among Onteora district towns for the new shortfall to be about $200,000. Bellows chose to speak about the problems of wrangling a new town budget over the coming weeks when “just the normal stuff will result in a 2.7 percent tax hike,” outside the state’s mandated tax cap.

“Just our social service costs are going to double,” he said. “You get to a point where something has to give. For Hurley, it was this lawsuit, even though we’d won similar things twice in the past.”

Bellows noted how, at first, the Catskill Watershed Corporation had helped Hurley and neighboring Olive with assessment lawsuit costs, pulling from a fund the city was required to set up for such purposes when it signed a Memorandum of Agreement regarding new watershed regulations in the late 1990s. But eventually, around the time that Olive reached a settlement with New York City several years ago, that fund dried up.

“After that we were left on our own,” Bellows said. “I felt we had a great chance of winning this given the consultants we were working with and the comparable costs we had found the City paying for, including the new Yankee Stadium.”

He said he was now waiting on New York to get him a signed agreement before he released any further details of what he was planning to sign.

“They could still change things before signing,” he said. “I don’t trust anything without a legal signature on it.”

He paused, acknowledging for a moment his pleasure to be serving during his town’s 350th anniversary, held last weekend, while also sighing over his current budget woes.

“Is it a victory?” he asked himself. “Not for me. My opinion rests that the assessment we had for that reservoir, at $185 million, was what it’s worth… and fair.”