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Lead Agency Dispute: Town of Granby v. Fulton, New York

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

PROJECT: Proposed annexation of land from the Town of Granby, Oswego County, to City of Fulton, Oswego County

DISPUTING AGENCIES: Town Board of the Town of Granby, Oswego County, New York v. Common Council of the City of Fulton, Oswego County, New York

I have been asked to designate a lead agency under the New York State Environmental Quality Review Act ("SEQR"; codified in Article 8 of the 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"]) to conduct the environmental review of the City of Fulton's proposed annexation of 65.9 acres (the "territory") from the Town of Granby, Oswego County to the City of Fulton, Oswego County. The designation of the City of Fulton ("City") as lead agency for this review is based on my findings that the potential impacts from annexation and future development of the territory will have a greater effect on the City than the Town, and that the City has the broadest authority to conduct the environmental review as the owner of the non-submerged property within the territory. If the annexation proceeds, the City would possess the broadest authority to implement any findings resulting from the environmental review of the proposed annexation.

Action and Site:

The action involves a petition by the City to annex 65.9 acres of territory from the Town of Granby (Town) to the City. A portion of the property, 20.9 acres, consists of underwater lands owned by the State of New York underneath the Oswego River (but under the territorial jurisdiction of the Town). The 45 acres that is not owned by the State is owned by the City. The City's wastewater treatment plant occupies a portion of the site. The City states that its purposes in annexing the territory are to facilitate the efficient provision of services to its property, and to reduce its operating expenses and tax liability to the Town of Granby. The City contends a reduction in its tax and operating expenses would defray the cost of improvements to the wastewater treatment plant required under the Department's consent order with the City.1 The plant provides wastewater treatment services to both the City and large portions of the Town. At the same time, the City indicates that it has contemplated developing a portion of the territory not in use by the wastewater treatment plant for passive recreational use. However, it has no present plans to do so or to sell the property to private owners for other types of development.

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 plan. The determination of public interest which 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). As stated by the Court of Appeals in that case, "[a]nnexations are often the first step toward the development of real property and may involve a change in municipal services or land use regulation. A principal goal of SEQR is "to incorporate environmental considerations into the decision making process at the earliest opportunity" [citations omitted]. Id. at 518.

The Town and City must each review and then grant or deny this annexation petition. They are, therefore, each involved agencies, and both have stated their interest in serving as lead agency. There do not appear to be any other involved agencies.

Discussion:

Annexation typically involves a change in land use or a desire for public services that may be more readily available from one municipality than another. Typical impacts from annexation are primarily fiscal but may also be environmental.

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

  • 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);
  • which agency has the broadest governmental powers for investigation of the impacts of the proposed action; and
  • which agency has the greatest capability for providing the most thorough environmental assessment of the proposed action.

A. 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 stated impacts appear to be fiscal rather than environmental ones. Following annexation these would be primarily potential impacts from a loss of tax revenue to the Town and a gain in such revenue for the City. Nonetheless, assuming that there may be some environmental impacts, the City is also the landowner, which arguably gives it a larger stake in the annexation process and any future land use decisions affecting the territory proposed for annexation. As a result, I conclude, this criterion favors designation of the City of Fulton as lead agency.

B. Second Criterion

The second criterion is breadth of authority. Both the Town and the City have the authority to approve or to deny the annexation petition. However, in addition to having authority to act on the annexation, the City, as discussed above, is also the landowner (of the territory) and operator of the waste water treatment plant. The City points out that whether the annexation succeeds or fails it will continue to have a significant property interest within the territory. Following annexation, the City would also acquire a territorial interest. The City is also the agency principally responsible for carrying out any actions necessary for management of the City's waste water infrastructure. Based on the foregoing, I conclude that the City has the broadest authority to implement the environmental review of the annexation.

C. Third Criterion

The third criterion relates to the capacity of an agency to provide for a thorough environmental assessment.

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.

Arguably related to the third criteria, the Town contends that the City would have a conflict in discharging its lead agency responsibilities because it would benefit from any future development of the territory, and, therefore, should not be designated to serve as lead agency. The City counters that the Town also has a conflict in that its decisions would be motivated by the potential loss of tax revenues rather than environmental considerations. In past lead agency annexation disputes, the Commissioner has indicated that the possible motivation of the disputing agencies is not relevant to resolution of the dispute. See, e.g., Commissioner's lead agency decision in Town Board of the Town of North Greenbush v. City of Rensselaer, September 25, 2008, and Commissioner's lead agency decision Town of Queensbury v. City of Glens Falls, April 14, 1997.2 Further, Article 8 of the Environmental Conservation Law and its implementing regulations compel the result here, notwithstanding any asserted conflict, inasmuch as a lead agency is defined as the agency with principal responsibility for carrying out or approving an action, which in the case of direct actions usually means the agency undertaking the action. See ECL §8-111(6) and 6 NYCRR §6l7.2(u).3

Finding:

After considering the relevant criteria under 6 NYCRR Part 6l7.6(b) (5) (v), I conclude that the City of Fulton must be designated as the lead agency for the environmental review of the proposed annexation. Because the City is the actual owner of property within the territory proposed for annexation, it would be directly affected by the outcome of the annexation proceeding.

Further, under the second criterion, the City not only has jurisdiction to approve or deny the annexation petition but it is also the agency with the greatest breadth of authority over the annexation area. Thus, the City would be best able to implement any findings resulting from the environmental review of the proposed annexation.

My decision does not change or diminish the jurisdiction of the involved agencies. Impacts identified by the Town, along with any other involved agencies, must be considered during the review of this project. The record developed during the environmental review must support the decisions of each agency. Accordingly, I encourage the Town, as well as any other involved agencies, to actively participate in all phases of the environmental review of this proposal. In particular, I encourage the involved agencies to identify the information needs and impact evaluations necessary to support their decisions. I further encourage the City to openly facilitate that participation.4

1 In the Matter of Violations of Article 17 of the New York: State Environmental Conservation Law and of Title 6 of the Official Compilation of Codes, Rules and Regulations of the State of New York, Part 750, by City of Fulton, Oswego County, New York, Case No. R720100513-32, August 20, 2010. Under the order on consent, the City is required to upgrade and modernize its grit removal and digester mixing systems.

2 Commissioner lead agency dispute decisions are published on the Department's website at http://www.dec.ny.gov/permits/6186.html.

3 In cases where the project sponsor is also the lead agency, the public may legitimately fear that the project sponsor/lead agency would not be able to objectively review its own project. SEQR does, however, have its own built-in checks and balances, namely its public process and disclosure requirements and the willingness of the courts to scrutinize agencies' compliance with SEQRA. See Gerard, Ruzow and Weinberg. Environmental Impact Review in New York, §3.03[1] (LexisNexis 2011).

4 In discharging its duties as lead agency, the City should review its classification of the action as Unlisted based on the Town's assertion that the annexation proposal includes the Oswego River which, according to the Town, is a recreation area within the meaning of the SEQR statute. If this is the case, the proposal likely exceeds the 25% threshold requirement under 6 NYCRR Part 617.4(b) (10).

Dated: 10/12/2012

/s/ Joseph J. Martens, Commissioner

Albany, New York

Distribution of copies:

Agencies/Applicant

Town Board of the Town of Granby: Attn: Ed Williamson, Supervisor and Scott F. Chatfield, Esq., Special Counsel

City of Fulton: Attn: Hon. Ronald L. Woodward, Sr., Mayor and Kathleen M. Bennett, Esq., Bond, Schoeneck & King

New York State Department of Environmental Conservation, Region 7
Attn: David Birnber, Regional Permit Administrator

New York State Department of Environmental Conservation, Albany
Lawrence H. Weintraub, Esq., Office of General Counsel
Robert L. Ewing, Division of Environmental Permits


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