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Lowville loses exemption suit against Lewis County

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LOWVILLE — Lewis County is not bound by a 1998 exemption agreement on the village’s watershed property, according to a judge.

State Supreme Court Justice Hugh A. Gilbert, in an eight-page decision filed in the Lewis County clerk’s office, ruled that county legislators’ establishment last August of a gradual, across-the-board reduction in tax exemption on village utility properties constitutes a “legislative change” that would allow them out of the agreement.

On those grounds, the judge dismissed a lawsuit filed by the village asking that the original contract — signed by then-Mayor Danny L. Salmon, now a village trustee, and the late Ralph K. “Pete” Farney, then Legislature chairman — be upheld. The agreement granted the village a county property tax exemption on its water source near Crystal Dale in the town of Watson “so long as the property is used for the public purpose,” barring an amendment to the state Real Property Tax Law, court judgment or “other legislative change.”

“It’s a good result,” said County Attorney Richard J. Graham. “The judge upheld the county’s approach to municipal tax exemptions, that they should be fairly applied.”

Judge Gilbert also recognized the due diligence done by county legislators and the county’s authority to “do what it did,” he said.

“At this point, it’s a little frustrating,” said Mayor Donna M. Smith. “Contracts aren’t written in stone anymore. Lawyers wrote up a contract they thought was correct.”

Village Attorney Mark G. Gebo said he wouldn’t have filed the lawsuit had he not thought the village’s case had merit.

“Obviously, nobody likes to lose,” he said.

The ruling affects not only village residents, but also municipal water customers in outside districts, Mrs. Smith noted.

The village provides water to non-village residents in specified water districts in the towns of Lowville, Watson, Martinsburg and New Bremen at a rate 1 times that of village residents.

The water system has roughly 1,400 customers, according to village officials.

Under the county plan, all exemptions on village utility properties outside their corporation boundaries will be gradually reduced by 25 percent each year, starting in 2013, until they reach full taxation in 2016.

Once the exemption is fully removed, the village of Lowville is anticipating a $30,000 increase in its tax obligations to the county.

Village officials have not yet decided whether they will appeal Judge Gilbert’s decision.

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