Town of Riverhead v. Cnty. of Suffolk
| Decision Date | 15 May 2020 |
| Docket Number | INDEX NO.: 02872/17 |
| Citation | 2020 NY Slip Op 31962 (U) |
| Parties | THE TOWN OF RIVERHEAD AND THE TOWN BOARD OF THE TOWN OF RIVERHEAD, as the governing body of the RIVERHEAD SEWER DISTRICT, and such TOWN BOARD MEMBER WHO ARE RESIDENT TAXPAYERS OF THE RIVERHEAD SEWER DISTRICT, Petitioner, v. THE COUNTY OF SUFFOLK, Respondent. |
| Court | New York Supreme Court |
Berkman, Henoch, Peterson, Peddy &
Fenchel, P.C.
100 Garden City Plaza
Garden City, NY 11530
This hybrid Article 78 and Declaratory Judgment proceeding was commenced by The Town of Riverhead and the Town Board of the Town of Riverhead, as the governing body of the Riverhead Sewer District, and such Town Board Members who are resident taxpayers of the Riverhead Sewer District. The Town of Riverhead is a municipal corporation duly formed under the laws of the State of New York with principal offices at 200 Howell Avenue, Riverhead, New York. The Town Board of the Town of Riverhead is the governing body of Riverhead Sewer District (also referred to herein as the "District"), which is a municipal sewer district duly formed under Town Law of the State of New York and is located within the territorial boundary of the County of Suffolk, State of New York, with principal offices at 200 Howell Avenue, Riverhead, New York (collectively "Riverhead"). Certain members of the Riverhead Town Board are alleged to be taxpayer/residents of the Riverhead Sewer District.
The County of Suffolk ("County") is a municipal corporation duly formed under the laws of the State of New York having its principal offices at the H. Lee Denison Building, 100 Veteran's Memorial Highway, Hauppauge, New York.
This proceeding was initiated by Order to Show Cause with a Complaint/Petition attached ("Complaint") requesting: a judgment pursuant to CPLR Article 78, as to the First Cause of Action directing the County to pay Riverhead from the New York Sales Tax revenues collected and paid to the County pursuant to Section 1210-A of the Tax Law of the State of New York, in the sums of $537,140.00 and $1,466,712.00, being the amounts necessary to stabilize Riverhead's assessments and taxes for the years 2016 and 2017 and as mandated pursuant to §C-12-2(D) of Article XII of the Suffolk County Charter, and granting such other and further relief to Riverhead as this Court deems just and proper, together with its costs and disbursements herein.
The Complaint has six causes of actions. The first as noted above, is cast as an Article 78 Mandamus directing the County according to CPLR 7803 (1) to pay Riverhead sums due to stabilize its Sewer Rates for 2016 and 2017.
The Second Cause of Action is for a Declaratory Judgment pursuant to New York CPLR §3001 declaring that pursuant to § C12-2(D) of the County Charter, the County is required to pay the District the sums due to stabilize its Sewer Rate for 2016 and 2017 and for future years where the Sewer Rate exceeds 3% of the Sewer Rate for the immediately preceding year.
The Third Cause of Action is for a finding of waste pursuant to General Municipal Law § 51 and directing the County to restore and make good the funds collected from the tax imposed under Tax Law §1210-A(a) to the Assessment Stabilization Reserve Fund (also referred to herein as "ASRF") that were illegally transferred and expended for purposes other than Sewer Rate stabilization.
The Fourth and Fifth Causes of Action seek that the Court find that the County's actions violated the District's, the Taxpayers, and the other resident taxpayers' rights to equal protection under 42 U.S.C. 1983 and the Fourteenth Amendment of the United States Constitution and Article I, § 11 of the New York State Constitution.
The Sixth Cause of Action is for an accounting so as to compel the County to provide the District and the Taxpayers a full and complete accounting of the Assessment Stabilization Reserve Fund, including, but not limited to, all payments received from the State of New York and all disbursements made from the fund and any other relief the Court deems just and proper.
The County interposed a motion to dismiss the Complaint pursuant to CPLR §§ 7804(f) & 3211(a)(1), (2), (3), (5), (7) & (10) based upon: the failure to join necessary indispensable parties; the applicable statutes of limitations barring such actions; Riverhead's lack of standing; that such claims are non-justiciable; that the County's taxing and spending actions are purely discretionary acts not subject to mandamus; that the claims are barred by laches and estoppel; Riverhead's failure to state a claim for which any court could grant relief and for such other further and different relief as the Court deems equitable and proper.
Article 5-A of County Law authorizes the establishment or extension of County water, sewer, drainage or refuse districts. Districts are funded through special ad valorum levies, special benefit assessments or a system of user rates, charges and rentals. (County Law §§ 250, 266, 270-71). There are twenty-six sewer districts in Suffolk County.
The Riverhead Municipal Sewer District duly exists and was formed under Article 12 of Town Law. It is governed and operated by the Town Board of the Town of Riverhead.
In 1984, the New York State Legislature passed § 1210-A of the Tax Law authorizing the County to adopt a one-quarter of a percent (1/4%) county-wide sales tax. The County Legislature adopted a resolution in 1984 levying the sales tax and setting an Assessment Stabilization Reserve Fund ("ASRF").
Tax Law § 1210-A provided that the collection from the tax "for a period beginning December first, nineteen hundred eighty-four and ending November thirtieth, nineteen hundred eighty-eight shall...be deposited in a special fund, to be designated as an assessment stabilization reserve fund ... [which monies] in said fund may be appropriated from and transferred to in order of priority to, (i) "an account or accountsfor the Southwest Sewer District... in such amount or amounts as shall be determined by the county executive...and approved by the county legislature...as necessary to stabilize assessments in such sewer district in any given year; (ii) to an account or accounts for any other sewer district established by the County of Suffolk in such amount or amounts as shall be determined by the county executive and approved by the county legislature...as necessary to stabilize assessments; and (iii) for distribution to the towns and villages within said county which have established or created a sewer district or benefitted area to provide sewer improvements or are constructing a sewer or sewage system in such amount or amounts as shall be determined by the county executive... and approved by the county legislature...to stabilize assessment or taxes. The dates for which these taxes could be utilized for sewer rate stabilization for the recipients (i.e. December 1, 1984 to November 30, 1988), for continuing payments to Town/Village has not been extended by the State or County Legislatures.
Money deposited in the ASRF was distributed in the form of loans. Since 1985, Riverhead and six other Town/Village Districts received monies from the ASRF as elective payments/subsides to help stabilize sewer assessments and taxes as recommended by the County Executive and appropriated by the Legislature,
The Suffolk County Drinking Water Protection Program ("DWPP") was added to the County Charter in 1987. See Local Laws 40-1987 and 35-1988. This replaced the ASRF and broadened the environmental and countywide purposes for which the Tax Law § 1210-A quarter percent (1/4%) sales tax funds could be used. These amendments removed sewer stabilization as was previously set forth in Tax Law § 1210-A(b), and provided that such future sales tax be utilized solely for countywide environmental programs and purposes. Recurring additional funding of the ASRF was terminated. See Local Law 35-1988.
To provide continued sewer tax stabilization to districts (including those in towns and villages) which had previously received funds, Charter § 12-7 provided that the money remaining in the ASRF as of December 31, 1988, together with "an amount equal to the actual amount of the sales compensating use tax that would have been collected from the "sewer district quarter-percent sales tax' in 1989" would be aguaranteed amount to be spent by the County Executive and the County Legislature, in their discretion until depleted. See: Local Law 40-1987; Tax Law §1210-A(b).
In 1988, the New York State Legislature amended Tax Law §1210-A by extending the quarter percent (1/4%) tax to November 20, 2000, and ending yearly recurring and continuous replenishment funding for the ASRF, and also created the Drinking Water Protection Program. See: Tax Law §1210-A (d).
The State Legislature removed requirements that any new funds from the 1/4% sales tax be extended as to the priorities and recipients previously set forth in the statute. This new amended law is vacant of any recurring or direct appropriation from the new DWPP fund for sewer rate stabilization. See: Tax Law §1210-A (d).
In July 2000, Tax Law § 1210-A (d) was amended to extend the sales tax to November 20, 2013 and to provide that the DWPP could be utilized to include sewer taxpayer protection. There was no provision requiring the County to consider the needs of the Town/Village Districts included in the DWPP Tax Law §1210-A(d)(i-v ). Aside from constantly depleting the ASRF under Tax Law §1210-A(d)-(b), the Town/Village Districts were not among the general or specific purposes permitted by the new DWPP.
In 2000, an amendment to the County Charter, which took effect on December 1, 2000 and was valid through December 31, 2013, the County Legislature changed DWPP. This amendment included...
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