David A. Paterson, Governor
HUDSON RIVER-BLACK RIVER REGULATING DISTRICT
December 11, 2009
HUDSON RIVER – BLACK RIVER REGULATING DISTRICT
TO PERFORM BENEFICIARY REAPPORTIONMENT
Revenue Needed for Taxes and Operations
ALBANY, NY – At the December 8 Board Meeting of the Hudson River – Black River Regulating District, the Board directed staff to conduct the necessary studies to develop an apportionment based on flood protection for a supplemental 2009-2010 assessment in the Hudson River Area. These internal studies will utilize real property data and a geographic information system (GIS) assessment model. The Regulating District intends to use the Federal Emergency Management Agency’s (FEMA) Hazards U.S. Multi-Hazard (HAZUS-MH) flood model to calculate the flood benefit derived by Albany, Rensselaer, Washington, Warren and Saratoga Counties from the operation of the Conklingville Dam at Great Sacandaga Lake. Although the Board hired consultant American Economics Group (AEG) to perform a reapportionment study, that study may not be completed until June 2010. After Board approval of the consultant-based apportionment and determination of the assessments, revenue might not be received until the fall of 2010. An internal apportionment, performed by Regulating District staff, could expedite the process by months. The Board plans to utilize AEG’s study for the 2010-2011 apportionment and assessment.
Also at the December 8 meeting the Board authorized the engagement of Fiscal Advisors & Marketing, Inc., to assist in the issuance of a Tax Anticipation Note (TAN). The Regulating District’s bond counsel, Lemery Greisler LLC, advised the Board to consider the issuance of a TAN and recommended the Board retain a financial advisor.
“The Regulating District Board is actively pursuing options to re-establish revenue on both a short-term and long-term basis,” stated Glenn A. LaFave, Executive Director. “The Board plans to continue operating our dams and reservoirs in a safe and appropriate manner, while meeting all financial obligations as soon as possible.”
At the direction of the Federal Energy Regulatory Commission (FERC), Oak Ridge National Laboratory is conducting a Headwater Benefit Determination to quantify the benefit received by the hydroelectric projects downstream from the Conklingville Dam and Great Sacandaga Lake, so the Regulating District can assess them via Section 10(f) of the Federal Power Act. For decades the Regulating District assessed these hydroplants using New York State statute; however, in 2008 the U.S. Court of Appeals ruled against FERC’s decision that allowed this practice to continue. Now the Regulating District is prohibited from assessing these hydro plants until the study is completed, causing a revenue shortfall of $4.5 million. Future assessments on the FERC-licensed hydroelectric projects will not cover operations expenses including school and property taxes, as these hydro plants can only be assessed for maintenance, interest and depreciation.