Riverhead Town is taking Suffolk County to court.
At issue is the right to payment from a special fund administered by the county that’s intended to stabilize sewer district assessments and taxes in Suffolk.
A state tax law provision allows Suffolk County to collect a sales tax of one-quarter of 1 percent for the purpose of stabilizing assessments and sewer rates in sewer districts established in the county, including town and village sewer districts. The law gives the county executive and county legislature discretion to determine the amounts to be distributed for assessment and rate stabilization purposes.
Following a $24 million upgrade to the Riverhead wastewater treatment facility, the Riverhead Sewer District is entitled to payment from the fund to stabilize sewer district taxes, according to Riverhead Town officials.
“The county has never promulgated rules for how the sewer stabilization fund should be distributed, or even how claims for the funds can be made,” Riverhead Supervisor Sean Walter said in an interview in December.
“So it’s basically on a whim,” he said.
The county legislature determined that stabilization funds should be used to limit the annual assessment or sewer district tax increase to a maximum of 3 percent.
Riverhead officials say the Riverhead Sewer District is entitled to stabilization fund payments of $537,140 for 2016 and $1,466,712 for 2017. The county did not respond to Riverhead’s request for those payments and in December, the town board authorized filing a $2 million notice of claim — a run-up to the lawsuit authorized last week.
“It’s a question of fairness,” Walter said in December. The sewer stabilization fund was set up to do exactly what we want to do and it’s doing that for county sewer districts, he said.
“The county should treat the town’s sewer district the same as it treats the county sewer districts,” he said.
In December, County Legislator Al Krupski agreed. “It’s very fair for them to ask for it,” he said in an interview. “We spend an awful lot of money on the west end sewer districts.”
A spokesperson for the county executive declined comment at the time because of the prospect of litigation by the town against the county.
“We would like to point out that the county provided the town with an $8 million grant for the sewage treatment plant upgrade,” county spokesperson Vanessa Baird-Streeter said.
The county owns and operates 22 sewage treatment plants and 90 pump stations.
According to Riverhead officials, Suffolk County has at least $100,000,000 in the assessment stabilization fund.
Walter said Riverhead sewer district taxpayers are facing a 400-percent rate increase without the stabilization fund payment.
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