A map depicting the BPU substation property (in red) that sits adjacent to the border between Jamestown and Village of Falconer/Town of Ellicott.

JAMESTOWN – The cost of the Annexation issue between the city of Jamestown and town of Ellicott, Village of Falconer and Falconer School District is costing taxpayers and local utility customers more than $450,000.

At issue is the city’s effort to annex a piece of property owned by the city, the Jamestown Board of Public Utilities Dow Street Substation, which sits in Falconer near the city line. The city claims it is in the public’s best interest to have the property annexed into the city, while the neighboring municipalities and school district claim it is simply a money grab for the city in an effort to avoid paying taxes on the property. The matter is currently awaiting a review and ruling from the State Supreme Court Appellate Division, Fourth Department in Rochester.

On Monday the BPU increased the amount of money it will likely spend on legal fees in the annexation case by $110,000 – bringing the new total for the city’s share to $280,000.

WRFA has since reached out to the Village of Falconer, Town of Ellicott, and Falconer School District to learn how much each of those three municipalities have spent.

Falconer School District superintendent Steve Penhollow tells us the district has committed $112,930 to this point.

According to Ellicott Town Clerk Mike Elrlandson, the town has spent $12,060 to date on the annexation.

Meanwhile, Falconer village clerk Anna Fales says village has spent $51,997.34 through the end of may, though additional costs are expected once the village is billed for the months of June, July and August.

Combined with what Jamestown has committed through money from the BPU electric Division, the total amount in legal fees spent on the annexation issue is $457,000, with more expected to be spent before the process is over.

More than 200 people were on hand for a joint public hearing on the proposed annexation of the BPU’s Dow Street Substation Property. The hearing was held at Falconer Central School Monday night, June 12, 2017.

The city has retained the law firm Bond, Schoeneck, and King as its outside council. The side fighting the annexation has retained the law firm Harris Beach PLLC.  The law firms were not only brought in to help prepare for a June 2017 Public Hearing on the matter, but have also been retained to assist with the matter as it proceeds through the court process.

SAVINGS FOR BPU, LOST REVENUE FOR CITY’S NEIGHBORS ON THE LINE

While some argue the ever-increasing legal fees connected to the case is an exorbitant amount, even more money is on the line when it comes to the possible outcome of the annexation.

According to a 2017 report from the Post-Journal, of the $322,090 the BPU paid in annual property taxes, $153,852 went to the Falconer School District; $68,789 went Falconer; $67,217 went to the county; and $32,232 went to Ellicott. The totals are all less than 1 percent of the total operating budget for each, except for the village of Falconer, where the total BPU tax payment comprises just over 5 percent of the total revenue for the village’s operating budget.

If the Appellate Court were to rule in favor of the annexation proceeding, the BPU would save around $160,000 a year because it would no longer be making property tax payments, with the city and the Jamestown School District receiving a tax equivalency payments of around $80,000.  Over the next decade, the BPU would save more than $1.6 million. The city of Jamestown and Jamestown School District would also see an additional $800,000 each over the next decade.

Meanwhile, the Falconer School District would be the biggest loser, with over $1.54 million lost over 10 years. The village of Falconer also stands to lose an estimated $688,000 over the same time period and Ellicott would lose $323,000.  That lost revenue would have to be made up for through cuts in local services and/or increased taxes for the local property owners.

AN OUTCOME TWO YEARS IN THE MAKING

It was in January 2017 when it was first announced the BPU would be looking into the annexation and the Jamestown City Council unanimously voted to annex the property in August 2017.

In early September 2017 the Falconer Village Board voted against the annexation and the Ellicott Town Board did the same. As a result, the matter has to be settled in state appellate court.

The court in Rochester has yet to set a date for when oral arguments in the case will take place, but Jamestown Mayor Sam Teresi said Monday night that things are moving forward with preliminary meetings and a hearing schedule for September and October. All that will be in preparation for oral arguments before the Rochester-based appellate court, likely in November.  After that, the decision from the Appellate Court could come by the end of this year or in early 2019, two years after the process got underway.