The Altamont mayor’s decade-long quest to find a purpose for an unused reservoir property in Knox, or at least not to pay taxes on it, has resulted in the village suing Knox.

“The assessment is too high,” Mayor James Gaughan told The Enterprise on Thursday, the day a tax certiorari proceeding against Knox was filed in state Supreme Court, the bottom tier of a three-tiered system.

The village’s lawyer, Jason Shaw, with Whiteman, Osterman & Hanna, said he had been surprised to learn that one municipality could tax another. The same law, he notes, would allow the village property in Knox to be exempted from tax.

“Albany County did that, which makes sense,” said Shaw. “The town of Knox has not and will not, and the Guilderland School District has not and will not. They’re collecting tax from the village taxpayers of Altamont, which is weird.”

When Gaughan appeared before the Guilderland School Board two years ago, making an exemption request, the board president at the time said the board was sorry but the school district could not spare the income.

The parcel is 303 acres, according to Knox assessor Russell Pokorny; it includes both an upper and a lower reservoir and is valued, in total, at $1.6 million.

Asked how he arrived at that figure, Pokorny said, “In 1997, New York State supplied resources through the Office of Real Property Services to evaluate the reservoir property. They came up with a detailed list of components besides the land.”

This included such things as “gates that open and close valves,” said Pokorny, adding, “They’re big and expensive.” He also said, “There’s a lot of cement infrastructure.”

The full value of the land alone, he said, is $447,200. “That’s probably on the high side of average,” said Pokorny. “Farmland would be cheaper.” The land has open meadows around two reservoirs, about a half-mile apart. A service road wends through heavily wooded land between the two bodies of water.

While the full value of the reservoir property is $1.6 million, Knox’s state-set equalization rate is 62 percent, making the value for taxing roughly $1 million.

The village pays the school district $33,198 annually in taxes and pays Knox (in town, highway, and fire district taxes) $5,281 annually, Pokorny calculated. If the property were to be exempt from taxes, to make up that difference, each of the roughly 1,000 households in Knox would pay an extra $38 in taxes annually, he said.

Shaw said the village hired an appraiser, Jeff Robinson, who is familiar with reservoir properties, a rarity. According to a resolution the village board passed, 4 to 0, at its July 12 meeting, the village appraisal set the full-market value of the reservoir property at $390,000. When the village made its case in May to the Knox Board of Assessment Review to lower the assessment to $241,800 based on the equalization rate, it was denied.

While Gaughn says that the reservoir is of no use to the village and is, rather, a liability, Pokorny said, “A municipality is legally required to have a backup water supply,” and this could serve that function for Altamont.

The value of water will increase over time, said Pokorny. “Water is the new oil,” he said.

History

Gaughan, on the other hand, sees no current or future value for the village property. It had value only in the past, he said.

The reservoir was built at the turn of the 19th to the 20th Century, Gaughan said. “There was a natural body of water up there, fed by underground streams or rainwater,” he said. “They dug another pond to make an upper and lower reservoir that feeds into a spillway.

“Small parcel by small parcel, it grew to over 300 acres,” he said. Until the early 1950s, the reservoirs were the village’s sole source of water.

In the 1950s, the village opened a well on Gun Club Road and, in the early part of this century, added more. “We switched to groundwater because it’s safer,” said Gaughan of the village’s water supply. “For surface water, we’d have to upgrade with a filtration system, which would be expensive.”

Since becoming mayor, Gaughan said he looked at other uses for the reservoir property, such as using it to generate electric power, which “did not pan out,” he said.

“I approached the Mohawk Hudson Land Conservancy to see if they would want to turn it into a recreational or hiking site.” He said the conservancy was not interested for the same reason the village finds it a burden: “We have to maintain that dam,” said Gaughan. “It makes the property worthless, a liability.”

The area is considered a flood zone, which would damage nearby properties if the dam were to give way, said Gaughan. “When there are heavy rains, we have to contact the county emergency and put people on alert,” he said.

The mayor stressed that the property is a burden, not an asset, for the village.

If the court were to accept Robinson’s assessment, he said, the village would be paying two-thirds less in taxes. “We could buy a fire truck with that in seven years.”

Two views

Shaw summed up the village’s position this way: “It’s not a reservoir; it can’t be used as a reservoir for the future. Our appraiser valued the land under the water. That’s what it is worth. The water is personal property. It’s not real property. It’s not like anybody is buying the water; it doesn’t generate income.

“The dam is a liability; it’s not an asset. Who wants a dam you have to maintain?...To add insult to injury, the village is charged for it.”

“I represent the town of Knox,” said Pokorny. “I’m trying to represent them in the most fiscally responsible way I can….We’re going to have to research the value.” Referencing the 1997 figure, which is the same one Knox is using today, $1.6 million, Pokorny pointed out that is reduced already to 62 percent because of the equalization rate.

He went on, “Is it worth less? The same? More? ... One thing we’ll stick with is: The reservoir still has value as a reservoir….To think that water has no value is ridiculous.”