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Lead Agency Dispute: City of Jamestown City Council v. the Town of Ellicott Town Council

New York State Department of Environmental Conservation Commissioner's Determination of Lead Agency Under Article 8 of the Environmental Conservation Law

PROJECT: A proposal by the City of Jamestown (City) to annex territory situated within the Village of Falconer (the Village), an incorporated village within the Town of Ellicott.

DISPUTING AGENCIES: The City of Jamestown City Council ("City Council") v. the Town of Ellicott Town Council ("Town" or "Town Council")

I have been asked to designate a lead agency to conduct an environmental review under the New York State Environmental Quality Review Act (SEQR; Article 8 of the New York State Environmental Conservation Law [ECL], with implementing regulations at Part 617 of Title 6 of the Official Compilation of Codes, Rules and Regulations of the State of New York [6 NYCRR Part 617]) of the City's proposed annexation of approximately four acres of land within the territorial limits of the Village of Falconer, an incorporated village within the Town of Ellicott. The designation of the City Council as lead agency for this review is based on my findings that the City has the broadest authority to conduct the environmental review.

ACTION AND SITE

The City has proposed to annex four parcels of land that it owns within the Village of Falconer, a portion of another parcel which the City leases from National Grid (collectively, the "property"), and a portion of an adjoining avenue. The City's Board of Public Utilities (BPU)1 maintains an electrical substation on the property. The BPU's service area extends beyond the City's limits and includes the Villages of Celoron and Falconer and portions of the Town of Ellicott. Further, the City owns all the improvements on the leased portion of the property. The City has indicated that, if annexed, the BPU would continue to operate the substation. According to the City, the purpose of the annexation is to enable the City to exert greater control over the substation and better protect it by providing efficient provision of municipal services to the substation, including fire and police protection, and to reduce its operating expenses and tax liability to the Town and the Village.

REGULATORY SETTING

The role of lead agency may only be assumed by an involved agency with authority to make discretionary decisions on one or more components of the overall action. The determination of public interest that a municipality must make prior to granting or denying an annexation petition, pursuant to General Municipal Law (GML) §711, is a discretionary approval subject to SEQR. City Council of City of Watervliet v. Town Board of Town of Colonie, 3 N.Y.3d 508 (2004). Here, the competing agencies must make the determination of public interest required by GML §711 (N.Y. Const. Art. IX, § 1[d]) and are therefore involved agencies under SEQR.2

DISCUSSION

Typically, an annexation involves a change in land use or a desire for public services which may be more readily available from one municipality than another and involve a change of use or development. In this case, the City proposes to continue the existing use of the property as an electrical substation.

In resolving a lead agency dispute, under 6 NYCRR Part 617.6(b)(5)(v), I am guided by the three criteria listed in order of importance as follows:

  1. whether the anticipated impacts of the action being considered are primarily of statewide, regional or local significance (i.e., if such impacts are of primarily local significance, all other considerations being equal, the local agency involved will be lead agency);
  2. which agency has the broadest governmental powers for investigation of the impacts of the proposed action; and
  3. which agency has the greatest capability for providing the most thorough environmental assessment of the proposed action.

My designation of a lead agency must be based strictly on applying these criteria to the facts of each individual case.

FIRST CRITERION

The first criterion asks whether potential impacts from the proposed action are primarily of statewide, regional, or local significance. While both disputing agencies acknowledge that the proposal would likely cause impacts of only local significance, the direct impacts are fiscal rather than environmental ones (e.g., loss of tax revenue to the Town and Village and a gain in revenue (from reduced substation operating expenses and tax liability) to the City.

I fully appreciate the Town's concerns regarding loss of tax revenue if the annexation were to occur. Unless those tax base losses can be directly related to losses of the Town's services or other changes to the Town's functions and character, they would be outside the proper scope of an environmental assessment to determine the environmental significance of an action under SEQR. Young v Pirro, 170 A.D.2d 1033 (4th Dept. 1991). Even if the Town's predicted tax base losses were related to environmental impacts, the question relevant to this discussion remains whether such impacts are local or regional. See DEC Commissioner's determination of lead agency, Town of Granby v. City of Fulton, (October 12, 2012). With regard to this particular annexation, involving no significant change in town function or character, any potential impacts would be a local issue. Inasmuch as the first criteria seeks to determine whether the predominant impacts are local or regional and the direct impacts here are fiscal, it is difficult to draw a meaningful distinction here. I conclude, the first criterion favors neither agency.

SECOND CRITERION

The second criterion favors the City. Both the Town and the City have the authority to approve or to deny the annexation petition. However, the City is also the owner of the majority of the property and operator of the substation. Whether the annexation succeeds or fails, the City will continue to have a significant property and public utility-related interest within the territory and will remain responsible for carrying out any actions necessary for operation and maintenance of the substation - giving it broader powers than the Town both with respect to investigation of impacts and overall custodianship of the property. This analysis is consistent with DEC Commissioner lead agency determinations in Town of Granby v. City of Fulton [decided October 12, 2012] and North Greenbush Town Board vs. City of Rensselaer Common Council (decided September 15, 2008), published on the DEC's website (last accessed August 16, 2017).

The Town cites DEC Commissioner's lead agency determination in Town of Mohawk Board v. Fulton County Board of Supervisors v. Montgomery County Legislature vs. City of Johnstown (decided May 6, 2016) as favoring designation of the Town as lead agency. While that case also concerned a proposed annexation in which I designated the Town Board as lead agency over the counties and the City of Johnstown, the facts of that decision are very different. In that case, the other lead agency contestants neither owned the property that was the subject of the annexation petition nor did they provide any services to it. The Town's jurisdiction and connection to the property was far greater than the counties.

The Town cites the statement in DEC's SEQR Handbook (PDF version, page189) (published on DEC website at http://www.dec.ny.gov/permits/6188.html), "[i]f no development activities requiring discretionary decisions by other agencies are anticipated within the proposed annexation, only the municipal legislative boards would be involved agencies and eligible to serve as lead. All other considerations being equal, the most logical choice for lead agency is the agency which has had the longest standing jurisdiction within the area. This is normally an agency of the municipality from which the annexed parcel may be taken."

In the case at hand, I find that all other considerations are not equal because of the City's interest in the parcels it proposes to annex.

THIRD CRITERION

Both parties to this dispute possess the necessary staff or the ability to obtain the assistance of consultants to undertake an adequate environmental review for the proposed action. Therefore, there is no real distinction between the disputing agencies as to the third criterion.

FINDING

After considering the relevant criteria under 6 NYCRR Part 6l7.6(b) (5) (v), I conclude that the City of Jamestown City Council should be designated as the lead agency for the environmental review of the proposed annexation.

My decision does not change or diminish the jurisdiction of the involved agencies. The City must consider any significant environmental impacts identified by the Town and other involved agencies during the review of this project. I encourage the Town, as well as any other involved agencies, to actively participate in the City's environmental review of the annexation proposal. I further encourage the City to openly facilitate that participation by the other involved agencies.

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1 The BPU is an appointed management board governing the day to day operations of the City owned utility.

2 The Town suggested that the Commissioner could designate the City and the Town as co-lead agencies. As I discussed at length in the New York State Thruway Authority and the New York State Department of Environmental Conservation vs. Town Board of the Town of Newburgh, et al. (April 27, 2016), the arrangement should be avoided except in unusual circumstances that are not present here.

Dated: August 24, 2017
/s/ Basil Seggos, Commissioner
Albany, New York

Distribution of Copies:

Disputing Agencies/Applicant
Sam Teresi, Mayor, City of Jamestown
Patrick W. McLaughlin, Supervisor, Town of Ellicott
Kathleen M. Bennett, Esq., Bond Schoeneck & King (e-copy)
Pietra Zaffram, Esq., Harris Beach PLLC (e-copy)

Involved/Interested Agencies
James Rensel, Mayor, Village of Falconer (e-copy)

New York State Department of Environmental Conservation
Dave Denk, Regional Permit Administrator, DEC Region 9 (e-copy)
Lawrence H. Weintraub, Office of General Counsel, Central Office (e-copy)


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