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Warren, Washington and Saratoga counties collectively owe millions in back fees to the Hudson River-Black River Regulating District, a three-member state Supreme Court Appellate panel ruled Thursday in a unanimous decision.

Warren, Washington, Saratoga, Albany and Rennselaer counties jointly filed suit in 2009 after the district, which operates dams and reservoirs throughout the region, sought to charge the local governments operating and maintenance costs.

The district, a public corporation, noted the substantial benefit the downriver counties enjoy because of the district’s flood-preventing dams, like the one at Conklingville.

Thursday’s decision could cost Washington County up to $701,000, four years’ worth of back bills.

“The bill’s probably already in the mail,” said Washington County Attorney Roger Wickes.

The five counties have withheld payment ever since the district first imposed the assessment-based fees in 2009. That means Warren County’s bill could be as high as $1.2 million, while Saratoga County could owe more than $5 million in back payments.

“We’re not happy about it, but we’re not alone,” said Dan Stec, chairman of the Warren County Board of Supervisors.

The ruling also means that each of the counties will have to budget for the annual payment moving forward.

Warren County would owe the regulating district $297,216 each year, while Washington County and Saratoga County would owe $175,250 and $297,216, respectively. Albany County would carry the largest annual burden if the payment rates remain unchanged, annually contributing $1.75 million.

But Thursday’s ruling has one bright spot for local governments.

The court agreed with the municipalities’ contention that the regulating district didn’t consider the flood protection benefits afforded to the state when calculating the funding level for each county.

That aspect of the ruling will require the state to contribute a now undefined level of funding to operation of the district.

The unanimous decision rules out an appeal, a local official said.

The court took direct aim at the state Legislature in its decision, calling for regular state funding.

Local officials said the state’s funding level would likely be decided in the lower courts and the state contribution will affect the amounts owed by the counties.

The regulating district’s move to collect operating fees from the five counties within its purview followed a federal court decision that limited the amount of fees the public corporation could collect from private dam operators downstream. The federal decision cost the district $4.5 million in operating revenue, the state court reports.

The local governments challenged the methodology the district used to determine how much property each had within the floodplain.

Wickes said that regulating district officials included parcels in the apportionment that abut the plain and included the entire value of utilities, like power lines, which may cross the flood plain but continue on for miles.

“They included almost the entire city of Albany,” Wickes said.

The three-member state panel rejected the argument of the five counties, finding the district’s methodology legally appropriate.

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