JAMESTOWN – Jamestown city officials were bombarded with concerns and questions regarding a proposal to sell the Jamestown Board of Public Utilities wastewater treatment plant to the Jamestown Local Development Corporation (JLDC) in an effort to leverage money for infrastructure, vehicle and other capitol purchases, and to help address the city’s growing financial challenges.
Last week Jamestown Mayor Sam Teresi presented the proposal to sell the wastewater treatment plant, located in the Town of Poland, to the JLDC for between $18 and $20 million. The JLDC would take out bonds to purchase the plant outright from the city of Jamestown, and the city would then then pay to lease the plant for use until the bonding was fully paid off. At that time, the property would revert back to city ownership. The payments for the lease-to-own agreement would come from wastewater rates collected from throughout the wastewater service area, which includes areas outside of the city limits.
The mayor said such a move would be a monetization of assets, allowing the city to not only pay for infrastructure and capital improvements for the BPU and city operations, but also help establish a tax stabilization fund for the city. In return, the mayor has said the move would benefit local business and even help spur job creation.
On Monday night, the Jamestown City Council held a work session in the mayor’s conference room, which was filled with individuals who had questions about the proposal, as well as numerous concerns.
Among those who spoke was Chautauqua County Chamber of Commerce and Manufacturers Association of the Southern Tier president Todd Tranum, who called the plan reckless.
“A point of concern is that no preliminary numbers or perfoma have been put together related to this transfer. It puzzles us as to how a decision can be made next Monday without at least a preliminary understanding of how this could impact rate payers, of how this is going to cash flow, and how this is going to be funded. From our perspective this sale to the JLDC is a reckless scheme,” Tranum said.
Tranum also said that it’s his understanding that the sale of the plant, even if from one city agency to another, would require a public referendum before it could be completed, saying that the council’s unilateral action to sell the plant would be a violation of the city charter.
“Under Sections 51 and 52 of the City Charter, neither the City Council nor BPU can sell or lease the waste water treatment plant to any person or corporation unless authorized by a special election vote. Our counsel has advised us that even a sale to a local development corporation still requires voter authorization under the Charter,” Tranum said.
A portion of Section 51 of the city charter states:
Neither the City Council of said City nor the Board of Public Utilities shall have the power or authority to sell or lease any public utility system to any person or persons, corporation or corporations except when authorized by a vote of the resident taxpayers of the City at a special election.
Joining Tranum in voicing concerns was former Jamestown BPU member and chairman John Zabrodsky.
“This sale will do nothing but subject this city and our greater community to legal, financial, and political difficulties, Zabrodsky said. “This type of decision needs careful consideration, a formal plan, and significant due diligence. One could say making such a decision without planning and due diligence is reckless. It seems as though the city administration is taking the approach in order to avoid transparency and make it easier to take profits of a successful enterprise fund to try and fill the bottomless holes of its budget.”
Also addressing the council was city resident, development consultant, and former Jamestown Renaissance Corporation Executive Director Greg Lindquist.
“From my perspective and as a property tax payer in the city of Jamestown, I as much as anyone else would like to have property taxes under control. I would love to pay less in property taxes, but I do not want to leverage our future in order to accomplish that and that, I feel, is what would occur with the sale of the wastewater treatment facility to JLDC,” Lindquist said.
Lindquist was also concerned with what would happen to the lending funds at the JLDC’s disposal, since they may have to be used to leverage the bonding needed for the agency to purchase the wastewater plant.
City Officials Don’t Respond to Concerns, Questions, Due to Litigation
Tranum also stated Monday night that the chamber and MAST have hired the law firm Harter Secrest & Emery LLP as legal council and will be in touch with the city corporation council later this week. As a result, city attorney Marylin Fiore-Lehman instructed the council members and mayor that they shouldn’t address any questions or publicly comment on the matter because of the possibility of litigation.
“Based on Mr. Tranum’s comments that he has retained council, and that that council will be contacting the city, I would recommend that both the council members and the mayor refrain from making comments at this time until we have the opportunity to discuss the matter further with Mr. Tranum’s council,” Fiore-Lehman said.
Afterward, Tranum voiced his frustration with the city’s unwillingness to address the various concerns and questions that had been brought forward…
“responsible government is transparent and what we saw today at this meeting is one more example of things being done behind the scenes, things being manipulated in such a way that certainly doesn’t benefit the taxpayers or in this case the ratepayers when it comes to a utility and its really unfortunate that it’s come to this,” Tranum said.
Earlier this month Teresi had said that a draft resolution on moving the proposal forward would come before the council, though one wasn’t presented or discussed during last night’s work session.
WRFA will talk with Mayor Teresi about the proposal during this week’s Community Matters program, which will air at 5pm Thursday on WRFA.