Who should pay for Great Sacandaga Lake dam operations? Cuomo vetoes study

By MICHAEL VIRTANEN

Great Sacandaga Lake has gone quiet for the season, with many of the roughly 4,500 lakeside camps and nearby cottages now shuttered.

Legislation recently sent to Gov. Andrew Cuomo’s desk promised to reignite a heated debate in the community over who should pay the costs for operating the dam that created the massive southern Adirondacks lake in 1930.

But Cuomo vetoed the bill on Dec. 7.  The funding issue remains before the Hudson River-Black River Regulating District’s board.

But Cuomo vetoed the bill on Dec. 7.  The funding issue remains before the Hudson River-Black River Regulating District’s board.

“Everything is status quo,” board chairman Mark Finkle said. “It was something we were hoping for.”

In a veto message, Cuomo wrote that the district already has a comprehensive process for budgeting its costs,  apportioning them to public corporations and real estate parcels, and making modifications when appropriate after public notices and hearings. The proposed study also would drive up district costs, he said.

“Since those affected by the apportionment process have notice of the assessment and apportionment process, and the existing methodology has been vetted through the courts, the use of state resources for a study and report is inefficient,” Cuomo wrote. He noted that the district lacks the authority to control how the property within it is assessed and taxed.

Five downstream counties got saddled with the biggest share of the bill after a 2008 federal ruling sharply cut payments by hydropower companies. They want some relief. Lakeside residents feared somebody would try to stick the cost on them for the dam originally built for flood control. That was tried once before.

The legislation would have required the district to do “a comprehensive study” of dam beneficiaries and establish “a standard methodology” for future property tax apportionments.

As it stands, the roughly $6.5 million budget of the Hudson district comes mainly from those five downstream counties paying nearly $3 million; hydropower companies paying $1.8 million; New York State, almost $1 million; private property owners buying lake access permits, $400,000; and $480,000 in miscellaneous revenue.

The legislation passed the Assembly 137-0, followed quickly by the Senate at the end of their annual session in June.

“Addressing the inequity is long overdue,” wrote the lead sponsor, Assemblyman John T. McDonald, a Cohoes Democrat. In a memo, he cited the disproportionate financial impact on downstream jurisdictions, which include his.

McDonald noted that “the smallest source of revenue” comes from the annual permits. They are paid by lakeside or nearby property owners for exclusive use of their respective pieces of the 125-mile state-owned waterfront. Most pay less than $100 a year—or $412,000 altogether.

He told the Adirondack Explorer that that his goal ideally is to shift the $3 million county cost to the state, and not to property owners around the lake, where a small increase in their permit fees wouldn’t suffice. He noted that their permit fees haven’t increased in over a decade.

The state should pay more because the water management provides a state benefit and has an impact on parts of New York farther downstream, especially with flood threats overall worsening from climate change, McDonald said. It’s unfair for residents far from the Hudson in those five counties to be paying for it currently, he said.

The lake also has public beaches and boat launches. The study would be done by the regulating district.

Lake residents hope to avoid a repeat effort at charging them.

“We’re not against a beneficiary study per se, but we think it needs to be focused on the true beneficiaries, the downstream beneficiaries,” said Joe Sullivan, who has lived lakeside, upstream of the Conklingville Dam, for 30 years. There was an attempt a decade ago to push the costs onto permit holders and raise their fees by a factor of 10. That proposal, from the executive director of the district, who has since left, prompted an outcry and decision by then-Gov. David Paterson to kill it, he said.

Sullivan and others formed the Sacandaga Protection Committee to fight it. The group has recently made its concerns about the proposed new study known to the governor’s office, he said.

Cuomo also appoints the board of the regulating district, which in recent formations hasn’t advocated raising lake access fees for the camps, second homes and primary residences around Great Sacandaga Lake.

Hydroelectric companies previously had paid most of the dam’s operating cost and passed it on to their customers, until a federal court in 2008 ordered the formula changed to comport with federal regulations. The power producers sell electricity generated by the water flow from the big dam and other smaller dams in the watershed. Their payments to the regulating district were reduced.

After further legal wrangling, a temporary settlement in 2013 put the additional cost on downstream counties and put some more on the state instead. The funding issues would have been reopened in a new study about who benefits.

The settlement was for five years, so the matter of apportioning costs remains before the regulating district’s board.

District general counsel Robert Leslie said while that agreement has run its course, it remains “durable,” and there’s no reason to change its terms unless something changes.

Finkle told the Explorer that they also had studied the issue as the legislation proposed. “It really already had been taken care of,” he said.

The Conklingville Dam restricts the Sacandaga River, creating the 39-mile-long, 42-square mile southern Adirondacks lake.

That waterway empties into the Hudson River, which had produced some major floods in Albany, Troy and other riverfront communities in the late 1800s and early 1900s.

The five downstream counties—Albany, Saratoga, Rensselaer, Warren and Washington—now share almost $3 million in payments annually for the dam’s water management and flood protection. State legislators from Saratoga, Rensselaer and Warren counties sponsored the new measure to study who benefits and should pay.

“Inasmuch as the original intent was to prevent downstream flooding, the reality is that the creation and continued operations of the district has created opportunity and benefit for many entities both private and public outside of the five counties currently carrying the financial burden,” McDonald wrote.

Ed Ludlum, incoming president of the Greater Sacandaga Lake Association, said the lake was formed as a flood-control reservoir at the request of the downstream beneficiaries who agreed to pay the operating costs. “As people who live around the lake, we don’t actually derive flood-control benefit,” he said.

“Permit holders are recreational users, and through the years there have been court arguments and all kinds of things about this very topic,” Ludlum said. “And we think—the GSLA and I believe all our members think—the permit system as it stands now is a fair way to assess our recreational use of the lake, which is secondary to the flood control purposes.”

Permit fees are not supposed to exceed the cost of the permit program itself, Ludlum said.

The reservoir also releases water during low river flows to support sewage treatment plants and hydro stations. The district is required to maintain the lake level within certain parameters.

The widest expanse of Great Sacandaga Lake lies in economically stressed Fulton County, about 10 miles long and 3 miles wide. A narrower arm stretches for 20 miles east into more affluent Saratoga County.

The approximately 2,500 lakeside and 2,000 other nearby permit holders already pay much higher property taxes because of their proximity to Great Sacandaga Lake, Sullivan said. Many are second homes. Real estate prices range from $1.6 million for a large lakefront house on a couple of acres to about $200,000 for small house on a back lot with a permit for exclusive use of a 10-foot stretch of waterfront. The holder can put in a dock, a picnic table and boat mooring, he said.

The property prices there are lower than on Lake George, another large Adirondacks waterway, he said.

“The lake is a gem, and why would we want to screw that up?” said Sullivan, a former business owner who now sells real estate. He was a founder of the decade-old Sacandaga Protection Committee established during the attempt to shift costs onto permit holders a decade ago. The committee now has 17 board members and advocates have been in touch with the governor’s office to express their concerns, he said.

Richard Ferrara, the regulating district’s chief financial officer, said the board of the district has defined beneficiaries as those that would be downstream of the dam. “So anybody who is a permit holder, for example, who owns land around the impoundment, the board never considered them beneficiaries. They’re paying for annual revocable permits to access their part of the lake by crossing state land, so they’re already paying,” he said.

Three seats on the seven-member board are currently vacant.

The legislation’s beneficiary and tax apportionment study by the district would have been due by 2020 to the governor, state comptroller and Legislature.

The district also manages the Black River watershed dam operations, farther west. Those are calculated separately, though the districts were combined by the Legislature in 1959.

CORRECTION: This story has been altered to correct the name of the legislation’s sponsor to John T. McDonald.