Riverhead Town’s $2 million claim for a sewer tax stabilization payment from the county’s drinking water protection program fund has been rejected by a State Supreme Court judge.
Supreme Court Justice John Leo, in a decision dated May 15, dismissed an action filed by the town in June 2017, that sought $2,003,852 from a portion of the county’s quarter-percent sales tax revenue collected by the county for the drinking water protection protection program. The funds were sought by the town to stabilize the Riverhead Sewer District’s assessments and taxes for 2016 and 2017.
The county sets aside a portion of its drinking water protection program funding — which the county collects as sales tax — in an Assessment Stabilization Reserve Fund. A sewer district is eligible for funding from the Assessment Stabilization Reserve Fund if it will have to raise district taxes by 3% or more. But the county is not mandated to to use the fund to cap sewer assessment increases at a maximum of 3%, the court ruled.
“The court will not substitute its opinion as to the use of funds or intervene in the budgeting process of the county executive and the county legislature,” the judge wrote in an 18-page opinion.
The judge dismissed claims asserted by the town under the Equal Protection Clause of the U.S. and N.Y. State Constitutions, noting that “Riverhead has received subsidy payments greater than a number of town/village districts and a greater subsidy than 15 of 20 county districts.”
The court also rejected the town’s demand for an accounting of the Drinking Water Protection Fund on the ground that the town did not establish a confidential or fiduciary relationship between the county and the town.
Riverhead completed a $24 million upgrade to the sewage treatment plant in 2016. The county awarded the town an $8.1 million grant for the upgrade.
Former supervisor Sean Walter said in 2017 the town sewer district kept taxes down by applying sewer district reserve funds and without the application of those reserves, sewer district taxes would have doubled.
Town attorney Robert Kozakiewicz could not immediately be reached for comment on the court’s decision.
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