Riverhead settled a tax lawsuit last week, but officials wouldn’t disclose the terms

Riverhead taxpayers should not have to wait until their next tax bill arrives to find out what their Town Board has agreed to pay in a tax certiorari settlement.

That is the result of what happened Tuesday night when the Town Board voted to authorize settlement of United Riverhead Terminal’s lawsuit challenging the assessed value of its Northville petroleum terminal properties. The resolution said the board had reviewed the proposed settlement with the town attorney, the town assessors and special counsel representing the town in the litigation. It authorized the town attorney to sign the settlement agreement.

But the resolution did not say what the board agreed to. It did not disclose the amount of any refund due URT. It did not disclose the assessment reductions. It did not tell taxpayers how much they will be asked to pay.

When one taxpayer asked for those terms of settlement, instead of a direct answer, she got deflection and double-talk and was told she could submit a Freedom of Information Law request for the document.

I have submitted a Freedom of Information Law request for the settlement agreement the board authorized the town attorney to sign — an agreement which, sooner or later, will become part of the court record anyway. I don’t yet know what the Town Board, on behalf of the taxpayers, agreed to. But here’s what the court record discloses so far. 

United Riverhead Terminal, in its court filings, sought a dramatic, roughly 90%, reduction in assessed value. Its petition challenged 12 parcels with a total assessed value of about $3.81 million and claimed the assessment should be about $381,160. Its appraisal valued the main terminal assemblage at about $17.3 million to $19.1 million over the tax years at issue.

The town’s own appraisal took the opposite position. It valued the property at roughly $37.7 million to $48 million and concluded, in substance, that there was no overassessment.

That was the dispute. Now the Town Board says it has accepted a settlement. So what did it accept?

Did the town agree to a refund? If so, how much? Did it agree to reduce future assessments? If so, by how much, and for how long? 

We don’t know, and somehow, the Town Board feels no obligation to inform us.

This is not some private side deal. It is a settlement of litigation involving public officials, public assessments and public money. The fact that the refund will not be paid out of the town’s general fund does not make it cost-free. It only changes the route by which taxpayers are billed.

Tax certiorari refunds are paid by the county and then charged back directly to town taxpayers, bypassing the town budget. That is a function of state and county law, and while it provides town officials with convenient “cover” to duck behind, it hits our tax bills just the same. 

When the current year’s tax bills were issued in December, Riverhead taxpayers were surprised by a litigation settlement payment of more than $7.2 million, a cost carried by individual taxpayers according to their property’s assessed value. For an average home, it was hundreds of dollars added to a town tax bill that already reflected a 6.74% tax rate increase over the prior year. It hurt. And it seemed to come out of nowhere, since it had never been publicly discussed by the Town Board. It just showed up near the bottom of our tax bills on a line obtusely labeled “NYS REAL PROP TX LAW.”  No public discussion. No prior disclosure.

To pay off that $7.24 million “chargeback” we were charged $8.60 per $1,000 of assessed value. That’s more than we paid for ambulance services ($2.27 per thousand), or our library ($5.60 per thousand), or our street lights ($0.955 per thousand), and nearly as much as we paid for highways ($8.695 per thousand) and fire protection ($9.066 per thousand). 

It’s not insignificant. That $8.60 per thousand added $417 to my tax bill this year. Residents were, understandably, quite upset — and angry.

Yet here we are, just eight months later, and the Town Board votes unanimously to approve the settlement of a tax lawsuit brought by one of the largest taxpayers in the Town of Riverhead without a single word of explanation or disclosure.

Supervisor Jerry Halpin’s response made the problem worse. He went out of his way to point out that the money doesn’t come out of the town’s general fund budget. So what? It comes out of the taxpayers’ pocketbooks all the same. 

The impacts of this settlement on individual tax bills — whatever it is —  can’t be known until other calculations are made by the town’s assessors. But the overall settlement amount and structure certainly must be known by the board. If it’s not, that’s a bigger problem. Board members have a duty to know and understand what they’re voting on. And we have the right to know what they approved.

The New York State Open Meetings Law says public bodies may discuss litigation and settlement strategy in “executive” session — in other words, behind closed doors. But once a proposed settlement number is known to both parties and approved by a public body, it is doubtful that the amount can properly be withheld under the Freedom of Information Law merely because officials prefer not to disclose it.

And if the Freedom of Information Law makes a record public, then that record must be provided to the public when it’s on the board’s agenda for discussion or a vote. 

The law starts from a presumption of openness. Government records are public unless a specific exemption applies, and public business is supposed to be conducted in public unless the law permits otherwise. Time and again, Riverhead seems to take exactly the opposite tack.

Transparency is not optional just because the bill comes due later. In fact, it is especially necessary when the bill comes due later, through a process most taxpayers do not see until the charge appears on their tax bill in December.

Riverhead Town Hall has never been a paragon of open government. Those of us who had hoped a new supervisor would be an agent of change in at least this regard have been sorely disappointed. 

A supervisor who is a “minority of one” doesn’t have many options when it comes to making changes to town policy. He can be outvoted every time if he chooses to take a stand against the majority, something this supervisor seems loath to do anyway. But one thing within his reach as a supervisor — indeed, one thing within the reach of any board member — is to swing open the shutters, pull back the curtains, and let the sun shine in. 

And that, to borrow one of the supervisor’s favorite words, would be awesome.