Albany Water Board sues Westerlo over assessment of reservoir properties

Enterprise File Photo — Noah Zweifel 

The Albany Water Board, which owns the Basic Creek Reservoir, seen here, is suing Westerlo over the value of this and other properties it owns in the town under the belief that it’s being over-taxed.

WESTERLO — Unhappy with the taxes it’s paying on its reservoir properties in Westerlo, the Albany Water Board is suing the town — along with Bethlehem and Coeymans, in separate suits — in an effort to lessen its burden. 

Westerlo Supervisor Matthew Kryzak told The Enterprise this week that the town is going to “fight them for every penny they owe the Westerlo taxpayer.”

The city of Albany owns three properties in Westerlo: the Basic Creek Reservoir, the Alcove reservoir, and an apparently unnamed watershed on Flood Road. Altogether, those properties cover nearly 2,400 acres in the town, and their combined taxable value is $228,763, according to Westerlo’s 2023 assessment rolls.

The reservoirs are used by the city of Albany for its water supply, together contributing “the majority of the city's drinking water,” according to the city’s website.

In the Article 7 suit against Westerlo, the Albany Water Board claims that the value of the properties should be $14,641 based on its own assessment of full-market value (which is a tenth of the assessed taxable value for each property) and after accounting for what it says is the town’s 64-percent equalization rate.

Westerlo hasn’t conducted a town-wide revaluation in more than a half-century; the state sets rates to equalize property values among municipalities that assess differently so that similar properties pay similar taxes.

Further, the Albany Water Board says in the suit, it should be considered tax-exempt as a public authority. 

As a public authority, the Albany Water Board is considered exempt from all taxes on properties it owns, according to a state Department of Taxation and Finance chart that goes over the various authorities and their exemptions. 

However, the department notes that “property acquired from the city and located outside the city boundaries is exempt only to the extent that it would be exempt if it were owned by the city.”

The department’s Director of External Affairs Darren Dopp told The Enterprise he could not comment on the matter since it involves pending litigation, as did the press secretary for the Office of the State Comptroller, Mark Johnson.

However, both referred The Enterprise to section 406 of the Real Property Tax Law, which says that “real property owned by a municipal corporation having a population of less than one hundred thousand or a population of two hundred twenty-five thousand or more but less than three hundred thousand used as a water plant, pumping station, water treatment plant, water shed or reservoir, including necessary connections and appurtenances shall be wholly or partially exempt from taxation and wholly or partially exempt from special ad valorem levies and special assessments, by any municipal corporation in which located, provided the governing board thereof shall so agree in writing.”

As of the 2020 census, the city of Albany has a population of 99,224; the official population estimate as of July 2022 is 100,826.

The Albany Water Board could not immediately be reached for comment on why it decided to file a lawsuit over its tax obligations after paying the taxes for years. 

Kryzak said that Westerlo will be represented by attorney Paul J. Goldman, who specializes in real-estate law. Kryzak said having Goldman represent the town was “like having Babe Ruth as a pinch hitter when the bases are loaded.”

Goldman has experience with cases that involve what Kryzak described as “specialty properties” in a letter to the town that was shared with The Enterprise, including two reservoir cases. 

In the letter, Goldman states that an assessment review will require the city to pay for both an engineer and an appraiser to evaluate the property. 

Kryzak said the hope is that the city has underestimated the expense of the effort and will abandon what he believes is an attempt to save money.

“They just want to pay pennies on the dollar … and unfortunately, in a small town, we don’t have a lot of resources,” he said. “And when [these] guys take our most valued and cherished resource and don’t want to pay for it, it harms us.”

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