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REASONS I AM OPPOSED TO NYS LITIGATION SETTLEMENT by MARY JANE WATSON

I am opposed to the proposed settlement offer from New York State regarding the seven parcels located on Carry Falls. The State of New York, either in fee or easement, currently controls over 42% of the acreage of the Town of Colton, paying approximately 19% of the taxes. With the rescinding of the IP and GMO vetoes, those percentages will increase. And, they want more land and little taxes! Towns with a large percentage of State owned land, such as Colton, face a future with stagnant tax bases because of the loss of potential development opportunities. Colton, especially, must rely on tax base growth only on the land area outside the Park where the majority of us live. To me, this places an unfair tax burden on residents, many of whom are on low or fixed incomes, with the future consequence of high taxes such as experienced by surrounding towns. Our young people already are leaving the area to find employment. Higher taxes will force them to leave in order to find affordable housing.

I have spent a lot of time and effort researching this matter and I find the State’s argument both inconsistent and spurious. Therefore, I am opposed to the proposed settlement with the State of New York for the following reasons:

RAQUETTE BOREAL FOREST UNIT MANAGEMENT PLAN
(1) The major access to the contested state parcels on Carry is from the water according to the UMP. Without the water access, apparently these parcels would be completely landlocked. Yet, the State claims it is not waterfront property.
(2) The deeds issued by NiMo to New York State on Carry granted specific littoral and riparian rights to the State. Of all the parcels in the Town of Colton that NiMo sold, these deeds are the ONLY ONES granting littoral and riparian rights to a new landowner. Not even the Town’s deed to the Morgan Road property grants riparian and littoral rights.
(3) The UMP indicated ongoing New York State litigation with Lassiter over the old Oval Wood Dish logging rights below the 1460 contour line. If the state doesn’t own the waterfront because of the FERC line, why is the state protesting Lassiter’s logging rights? ORPS identifies the land owned by Erie Boulevard on Carry as land under water. No allocation is made for the land from the waterline to the FERC line. Who owns it and why is the State trying to control it?

OFFICE OF REAL PROPERTY TAX SERVICES
(1) Advisory opinions issued by ORPS to assessors regarding the assessment of property located along a FERC or highwater line advise assessing it as waterfront property. One opinion states “The Appellate Division held that ‘riparian rights’ or rights of an owner of land on the bank of a water course (I Bouvier, 931) are incorporeal hereditaments but constitute real property for some purposes. Riparian rights appurtenant to riparian land, while not land itself, are includable in the assessment of such land as an enhancement of its value.” Apparently, this applies to only non-state owned land! It clearly differs from the State’s own position regarding the Carry property.
(2) In the ORPS inventory, one parcel along Carry is identified as waterfront property. This property was acquired many years ago, prior to the conveyance of the adjoining similar property that the State acquired from Nimo that is now under litigation.
(3) At Higley Flow State Park, the deeds dating back to the 1920s and 1930s indicate that the State only owns to within ten feet of the high water line (pre-FERC line designation). Yet, this property is inventoried as waterfront property without specific littoral and riparian rights and the State maintains a public beach there.

STATE APPRAISAL
(1) The appraiser for the State used an economic unit approach to valuing the largest Carry parcel. The economic unit approach is generally used for industrial appraisals. Thus, we have a strong argument that that approach does not apply in this case.
(2) The value of the timber included in the State’s appraisal is discounted to 25% of the State’s own appraised value.
(3) The State appraiser specifically stated in his appraisal that he was advised that the parcels were not waterfront property. He made no independent valuation based upon his own experience with similar properties. He was following orders.

TOWN APPRAISAL
(1) The Town’s appraisal for land value only for the seven parcels is $16,000,000.
(2) The Town’s appraisal for the timber value for the seven parcels is $2,500,000.
(3)The appraisers used by the Town were certified appraisers.
(4) The current trend for this type of property shows appreciation at more than 5% per year. Yet the Town is locked in to reduced values through 2011.

FUTURE AFFECT ON THE TOWN’S EQUALIZATION RATE
(1) While the settlement offers an immediate benefit of no payback for the years under litigation, the future tax impact can be disastrous.
(2) Any reduction in State land values will adversely affect the equalization rate within the next couple of years. The EQ rates will continue to spiral down as our share of county and school taxes climb upwards. What is the future cost benefit of this settlement? Is there one?

PARALLELS WITH MORGAN ROAD PROPERTY
(1) The deed from NiMo to the Town of Colton on the Morgan Road property clearly indicates that the Town only owns to the FERC line. In fact, the FERC line in one section is 200 feet on the north side of the road.
(2)If the State’s land on Carry isn’t waterfront property, how can the Town’s property on the Morgan Road be developed as waterfront property or is it just an area for a near-water experience?

FUTURE ECONOMIC AID
(1) Hank has indicated that the State has promised an economic development grant to Colton as its equivalent of a signing bonus for rescinding our veto of the IP and GMO easement deals. The Town faces the loss of upwards of a quarter million dollars in tax revenues per year from New York State over the next five years. Do we break even?

BOARD ACTIONS
(1) On April 12, 2005, Dick faxed us a memo accompanying Jack Varney’s negotiated settlement offer with Phil Hembdt. Dick wrote, “This is a bad deal that we have to accept. Jack Varney agrees…I see no alternative AT THIS TIME.
(2) Subsequently, the Board agreed to replace Varney with Roger Linden and to pursue the litigation.
(3) At the June 8, 2005 the Town Board authorized Mr. Owens to contract with a state certified appraiser to appraise the Carry Falls parcels.
(4)As recently as the February 8, 2006 Town Board meeting, after an update by Dick Owens, Hank moved and Grace seconded the following motion: “to authorize Mr. Owens to move ahead and do what he deems necessary to continue with the NYS litigation.” Carried unanimously. Why is the Board condemning his actions now?
(5) Grace indicated that the State does not trust Dick’s word and requires Dick’s signature in order to finalize the deal. She indicated that Dick had backed out of prior deals. The only deal that I am aware of where the Town backed out was the one negotiated by Jack Varney. Dick met with the Board and we all agreed that we should back out! We subsequently switched attorneys. Yet, Dick is getting blamed for backing out.
(6) We have all heard Roger Linden repeatedly praise Dick’s work and his cooperation in getting information together to aid us. Since the Board agreed to pursue this litigation, Dick has done this to the best of his ability.

ADDITIONAL THOUGHTS
(1) I have no strong opinion either way as to whether the State should acquire more land in Colton. One advantage to the Town is the increased tax revenue with the negation of the §480 exemptions. However, I strongly object to the State suing the Town over its assessment. When the State acquires real estate, it should guarantee that the taxes, at a minimum, should be equal to those paid by the prior owner.

No refund of back taxes for 2002, 2004, 2005 and 2006 is the only plus in this deal, but who is to say that the Court would have not ruled in our favor or that any court-ordered assessment would not have been higher? I feel strongly that we have prepared a good case on behalf of the Town. Given evidence to the contrary, I find signing this settlement offer equivalent to snatching defeat from the jaws of victory!

ADDENDA AS OF 1/31/07:

BACKGROUND: As a result of the settlement with New York State, the Town of Colton, and Colton-Pierrepont Central School will lose approximately $250,000 annually in tax revenue from New York State. The amount of this loss, of course, is dependent upon the amount each taxing entity needs to raise from taxes each year. The State sued the Town for refunds of Town, County and School taxes as follows:

In the agreed settlement with New York State, the assessed value of the seven Carry parcels was reduced by $500,000 (or $7 million full value). The total assessed value for the Town of Colton dropped from approximately $15.5 million to $15 million.

ADDITIONAL THOUGHTS: I worked with Dick Owens and Roger Linden in preparing the Town’s case against NYS but no to avail since Hank convinced the other Board members we didn’t stand a chance in spite of what Owens, Linden, and I had been telling them.. After I wrote this and just before we would have been scheduled to go to Court in December, Owens subsequently found the following on Pataki’s website under news releases.

News Release dated September 14, 1998: Governor Announces Raquette River Hydroelectric Agreement-Historic Agreement Restores Water Flows, Provides Public Access to 12,800 acres.

The fourth paragraph on the first of four pages states: “The result of this innovative collaboration is an agreement that will greatly improve the natural resources of the Raquette River, provide public access to more than 12,800 acres of prime recreational lands, protect jobs in the timber industry and ensure local governments receive full tax payments on these protected lands,” Governor Pataki said.

Last September, when Hank insisted that the entire Board and the three assessors go to Albany to meet with a representative of the Governor’s office, Owens quoted this promise from a Niagara Mohawk document that was distributed to the Town at a meeting in Canton. The state representatives were especially concerned whether we had this promise in writing from the State. At that time we did not have it. They must have known that it existed since they were so concerned and the promise was the only thing that got their attention at that meeting. When Owens went to Florida in November (yes, he does do Town work while there) he spent a lot of time on the Internet looking for it and was successful. This was the icing on the cake as far as I’m concerned with the Town’s Court case. But, Hank was working a deal!!! His payback followed in January by firing Owens as Assessor Chair and firing Linden as town attorney. Instead, the Board hired Hank’s personal attorney.