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The City of Jamestown and Jamestown Board of Public Utilities (BPU) officials expressed disappointment that the Appellate Division denied the City’s petition on novel procedural grounds, thereby precluding the annexation of the Dow Street Substation property into the City at this time. However, the Appellate Division made no finding with respect to the merits of the City’s petition thereby leaving the door open for the City of Jamestown to continue to pursue annexation of the Substation property.
In the meantime, the decision will continue to cost the BPU at least $173,000 in increased expenses each year, which will have both short-term and long-term negative impacts, not just on the BPU, but on all ratepayers, including those who reside in the Town of Ellicott and the Village of Falconer.
The Substation sits on property in the Town of Ellicott and the Village of Falconer on Dow Street between Tiffany Avenue and south of East Second Street. The substation is assessed at $7,861,599.
The proposed annexation would have saved the BPU approximately $173,000 in property tax payments to the Town, Village and School District annually. The City and the Jamestown Public School District each would have received tax equivalency payments of around $80,000 a year from the BPU. These amounts are less than the amount that the BPU currently pays to the municipalities involved in the litigation.
Currently, the Electric Division pays $72,000 per year to the Village of Falconer; $40,000 per year to the Town of Ellicott; $155,000 per year to the Falconer Central School District and $69,000 a year to Chautauqua County for an annual total of $336,000 paid in taxes for the Dow Street Substation property.
When the BPU and the City of Jamestown initiated proceedings to annex the Substation two years ago, officials representing the Town of Ellicott, the Village of Falconer and the Falconer Central School District spoke out against the action. Since that time, the proposed annexation has progressed through the process of public hearings, comment periods and judicial review until it reached the Appellate Court in 2019.
BPU Chair Gregory Rabb who also served as Jamestown City Council President at the time the annexation proceedings commenced, stated that City Council was doing its job in endeavoring to annex the Dow Street Substation and believes that had the City’s petition been addressed on the merits, the annexation would have been found to be in the overall public interest.
Rabb said, “On behalf of our Jamestown residents, we will consider all our options to preserve and improve the financial picture of the City as well as our utility operation. Jamestown improves almost daily as an enjoyable place in which to live and do business. We intend to explore all available options for continuing to pursue the annexation, including refiling the annexation petition and/or seeking to appeal the court’s decision.”
Jamestown Mayor Sam Teresi stated that the City is disappointed that the Appellate Division issued a decision that seemingly contravenes the spirit of municipal cooperation that is at the heart of the annexation law.
Mayor Teresi added that the City “leaves no stone unturned” when it comes to searching for potential cost savings for both the City’s general fund, and its utility operations, and exploring opportunities to better protect and preserve the City’s municipal utility infrastructure, thereby ensuring reliable service for the utility’s customers. “The City sought to annex the Dow Street Substation as a savings for not only the City owners of the utility, but for all electric utility customers, both within and outside of Jamestown, and to ensure that the City’s critical electrical infrastructure would be protected by the City’s professional Police Department and Fire Department,” affirmed Teresi. “We will strongly consider all of our options including refiling the annexation petition and pursuing further judicial review of the Appellate Division’s decision.”
“Naturally, we are disappointed by the outcome, but recognize that we can still pursue our initiative to annex the City-owned Dow Street Substation property into the City,” noted City Council President Marie Carrubba. “We pursued this case to assist the BPU Electric Division in keeping rates affordable for all BPU ratepayers, both inside and outside the City, and to enable the City to better manage, control, maintain and protect the Substation. This decision is a temporary setback in that work.”
“We pursued annexation of the Dow Street Substation for the cost savings we would have seen on property taxes that the BPU currently is required to pay,” said BPU General Manager David L. Leathers. “The BPU works hard to provide affordable, reliable services to all customers of our five Divisions. This decision delays the opportunity to reduce costs and better protect our municipal infrastructure but does not preclude future annexation of the property.”
City and BPU officials indicated that they will be considering and evaluating all available and viable legal options moving forward.
All questions should be directed to Kathleen Bennett, Esq. of Bond, Schoeneck and King, PLLC.