Margaretville seeks budget cuts to lower tax increase

By Joe Moskowitz
One week ago, Margaretville Village Treasurer Beth Bush dropped a bomb shell, saying that village taxes could go up by as much as 25 percent in the coming fiscal year.
Bush, and the village’s budget committee members, are working to try and reduce the hike to 14 percent, but she says that will be the lowest increase possible. There just isn’t any more room to cut.

Margaretville got into this tax predicament for three reasons. Hurricane Irene resulted in a reduction of $1 million in the value of property in the village and the Federal Emergency Management Administration (FEMA) still hasn’t reimbursed the village for $140,000 in “out of pocket” spending as a result of the flood.

But the huge problem is the tax assessment on the New York City Department of Environmental Protection’s (DEP) waste treatment plant that serves the village.

Sewage plant values
For many years, the village, the Town of Middletown and the DEP battled over the value of the plant. Local municipalities said the plant had become worth $74 million as real estate values soared in the Catskills and the Town of Middletown did a tax revaluation to bring assessments up to 100 percent of true value. The assessed value of the entire village, including the sewer plant, was around $89 million.

But the DEP insisted in a lawsuit that the plant was over assessed. The city argued that the plant is a unique property with no resale value. Eventually the DEP, with far greater resources to fight the legal battle, and some would say with a stronger argument, won the case.

Template agreement
All of the parties agreed to a template, which is essentially a lower payment plan based on a reduced assessment. The assessed value of the plant is now set at $41 million. Based on the old assessment of $74 million, New York City paid approximately $250,000 in village property taxes in the 2012-13 fiscal year when the entire village budget was about $400,000.

On Tuesday village officials were unsure of exactly how much the city would pay in fiscal year 2013-14 but it will be substantially less than last year. The balance has to come from somewhere and that’s why Margaretville is facing this problem.

Mayor Bill Stanton, who is retiring in a matter of weeks, says the village will survive, but he says it will get worse. He says the DEP will seek a reduction of an additional $12 million when the current Filtration Avoidance Decree expires. Not so, says the DEP.

A spokesman told the Catskill Mountain News that for one thing, the current FAD expires well before the year 2020 and he says the template is in effect until then. He says the DEP agreed to the template in good faith and “intends to honor the agreement.”

Meanwhile, in the other village in the Town of Middletown, Fleischmanns’ preliminary budget should be released next week. Mayor Todd Pascarella says Fleischmanns is also facing a loss of tax revenue and unreimbursed FEMA funds.

But, he says, unlike Margaretville, his village gets no tax revenue from its treatment plant to begin with so while it has problems, its financial situation is not nearly as serious as is Margaretville’s.