Lawsuit stalls water district formation

By THANE GRAUEL

The effort to form a water district to bring clean water into Scotts Corners will be delayed by a recently filed lawsuit from a property owner.

The groundwater in Scotts Corners has had a variety of environmental issues for years from septic systems and a fuel leak from a service station. A more recently emerging problem was the detection of per- and polyfluoroalkyl substances, also known as “forever chemicals,” at levels health officials call unsafe.

The $11 million plan for the water district was to lay pipes from downtown to the Connecticut border in Stamford, and tie into the Aquarion water system. The district’s formation was approved by property owners in the designated area, which is basically the Scotts Corners business district and nearby residences. But the water district won’t be an official entity until it’s OK’d by the State Comptroller’s Office, which approves the formation of new taxing districts.

The timeline for that approval — hoped for in March — is more uncertain because of the lawsuit challenging the district’s formation, Donna P. Simons v. New York State Environmental Facilities Corporation and New York State Department of Health.

“The Town’s Application was riddled with misrepresentations, misstatements, errors of law and other fundamental flaws,” the suit states. 

“Petitioner, along with over 20 other residents of the Town, objected to this Application based on these flaws, and they submitted letters to the EFC and DOH in the public comment period, notifying these agencies of the many errors in the Town’s Application and the severe prejudice that will result from funding this Project,” it continued. 

“Instead of giving these critical flaws in the Application the requisite ‘hard look,’ the EFC ignored them and then rubber stamped the Town’s Application without any analysis of these substantial errors, in violation of its own procedures and guidelines,” the suit states.

“For example, the Town blatantly lied in its Application about its failure to submit timely annual financial reports (‘AUDs’) to the Office of State Comptroller (‘OSC’) as required by New York Law,” the suit states. “The EFC requires the Town to disclose whether it is compliant with the OSC’s reporting regulations and, specifically, whether the town has ‘submitted timely Annual Report Update Documents (AUD) to OSC for each of the last three years.’ ”

“Recognizing that this failure to comply with the OSC’s regulations would call into question its financial responsibility and ability to manage an $11 million infrastructure project, the Town lied about its non-compliance,” it states.

Because of this, the suit alleges any approval should be nullified.

The suit lists several other areas in which it alleges the town misrepresented facts, including the seriousness of the PFAS threat. Simons said in her suit that she shouldn’t be compelled to fund a clean water system she doesn’t need.

“Petitioner already has an effective water filtration system, but she will be forced to use municipal water of questionable quality under this Project,” her suit states.

Town Supervisor Kevin Hansan told The Recorder on Thursday that the suit against the state had the district’s approval on hold.

“It’s put a delay in things,” he said. “They can’t approve a water district while there’s a lawsuit there.”

The town has obtained a $7.6 million grant from the state for the work and has applied for the rest of the funding under the Bipartisan Infrastructure Law, he noted Thursday.

The town was confident it would get that funding, federal money administered by the state, or a good portion of it. But, Hansan said, “We’re not 100 percent sure how much that will cover, because we won’t know until we get the water district approved and get everything set up, and also we don’t know if anything at the federal level is going to impact that funding.”

But because of governmental funding uncertainties the Pound Ridge Town Board on Tuesday approved pursuing another funding source, known as Congressionally Directed Spending, for $3.5 million. Hansan said that was at the advice of Sen. Kirsten Gillibrand’s office.

“Basically as a backstop, in case we don’t get 100 percent of it covered through the other two original funding sources,” he said.

Town Attorney William Harrington was to give the town board an update on the lawsuit on Tuesday, but couldn’t attend the meeting for family reasons. The update is now expected at the April 15 meeting.

John McCown, who has been highly critical of the town’s handling of financial statements, spoke at Tuesday’s meeting. He had questions about whether the grant Gillibrand’s office recommended was the right kind. He said that from what he read, “this type of grant requires a 20 percent public equity share, which is inconsistent with what the town seems to want to get.”

Also, he said, “the grants are only available to a public entity or a district. As I understand the water district hasn’t been formed. So my read is, there’s little chance that this will be approved.”

Simons’ suit asks that the EFC’s grant to Pound Ridge be annulled and revoked, that she be awarded attorney’s fees and costs, and whatever other relief the court “finds just and proper.”