MOREAU — The Town Board decided to cut SCA Tissue’s assessment nearly in half Tuesday, over vehement objections from South Glens Falls Mayor Harry Gutheil. He called the tax cut devastating.
“I just think my people have been sold down the river,” he said. “I can tell you, you’re doing a disservice to the people.”
The settlement calls for the main plant for SCA Tissue — now called Essity — to be reduced from an assessment of $25.5 million to $20 million this year, then to $17 million in 2018. From 2018 to 2021, it would be reduced from $17 million to $14 million, decreasing by million-dollar increments each year.
But it may not be a done deal yet. The South Glens Falls school board gets a vote as well, and schools Superintendent Mike Patton indicated he is uneasy with the settlement.
He noted that the appraiser hired by the town to appraise SCA Tissue had not completed his work before the settlement vote.
“That’s the challenge for the school board. When there’s been no appraisal, it’s hard for me and the board to have a recommendation,” he said.
He believes the settlement would cost the school district $800,000 in taxes over the course of five years. That is the equivalent of 1 percent of the total tax levy each year.
“It’s a pretty significant loss of revenue,” he said.
The board will vote on Dec. 18.
For the village, the settlement is even worse. Gutheil expects to lose $317,872 over the course of five years. That’s 4 percent of the village’s total tax levy each year.
In practical terms, it means the village needs to cut about $63,500 from its budget or raise taxes.
Gutheil isn’t giving up.
“I’m looking at my legal options right now,” he said.
But the cost to village and schools would be worse if the town went to court, town Supervisor-elect Todd Kusnierz said.
“If we go to court and we lose this case, on an assessment we all know we can’t maintain — all of us are not willing to put the village residents in that position,” he said.
He called a trial “risky” when Guthiel urged him to try to fight for a better deal.
“You’re OK with rolling the dice?” Kusnierz asked Gutheil in disbelief.
Gutheil said yes, noting his success when he went to trial on a big assessment case when he was town supervisor.
“I’m willing to work with you. I’ve been in the trenches,” Gutheil said.
But Kusnierz said settlement was the safest way to go.
“We do risk assessment and we do risk management,” he said. “We had significant exposure to the village with refunds.”
The village would have faced paying a possible tax refund of $225,000 plus interest, in addition to the loss of tax revenue, Kusnierz said.
“While this is not a perfect outcome, I think from the standpoint that for no one except for the school district to have to pay refunds, it’s a pretty good outcome,” he said. “We felt it was in the best interest of our community.”
The school district was at risk of paying a maximum of $650,000 in refunds. It’s not clear yet how much the district will have to pay, Patton said.
The lack of an appraisal did not deter the board from voting.
“We may not have a piece of paper, but we have had conversations with the appraiser,” said board member Gina LeClair.
Supervisor Gardner Congdon and Town Board member Bob Prendergast voted against the settlement, which passed by a vote of 3-2.
Congdon said the board should have brought Gutheil in from the start and should not have made any decisions without an appraisal.
Other board members and town attorney Karla Buettner said they could not give Gutheil all of the information on the case, because then it would become public under the Freedom of Information Law. Gutheil argued that they were wrong and even offered to sign a non-disclosure agreement, to no avail.
A reporter asked Buettner about that, noting that FOIL allows officials to withhold litigation strategy from the public and to withhold intra-agency documents, such as legal advice, shared between the Town Board and Village Board.
Buettner could not explain.
“I’m not familiar with that law,” she said of FOIL.
Contacted the day after the Town Board vote, Committee on Open Government Executive Director Bob Freeman confirmed that the Town Board could share litigation-related documents with the Village Board without making them public under FOIL.