The Town of Niagara has scored a legal victory over Niagara Mohawk Power Corp. that will save the town from having to reimburse the utility company $200,000 in sewer charges.

Town officials issued a press release Wednesday announcing the impact of a ruling made by State Supreme Court Justice Richard C. Kloch Sr. last month that negated an attempt by Niagara Mohawk to be refunded $200,000 in paid sewer taxes.

Supervisor Steven Richards called the decision a victory over a “predatory utility company” that imposes among the highest service rates in the nation but took a small town to court over sewer taxes.

“This decision is a success for the many upstanding individuals and businesses residing in the Town of Niagara who do not seek to be treated differently than all other taxpayers and who will now not have to pay Niagara Mohawk’s share of the costs of the sewer system,” Richards said. “It also marks a significant victory for municipalities against utility companies attempting to avoid paying legitimate public assessments.”

Niagara Mohawk was challenging the assessment of special sewer district charges from 2003 to 2009 on certain transmission lines, associated towers, and distribution substations located in the town. The suit claimed the facilities were not connected to the sanitary sewer and therefore received no benefit from it.

During a two-day, non-jury hearing before Kloch last June, Town Attorney Michael B. Risman argued that the appellate courts have set a high threshold for property owners attempting to avoid paying special district assessments. According to a recent decision, if a property is capable of receiving the service funded by the special ad valorem levy, even if the benefit is potential or even theoretical, the property is considered to receive sufficient benefit from it to warrant special district taxation.  

The town also argued the sanitary sewer system acts as a catch basin and receives storm water from properties throughout the entire town. This provides an actual benefit to the transmission and distribution facilities by reducing flooding around those facilities, according to town officials.

Niagara Mohawk is currently challenging numerous similar special district assessments in municipalities across the state. Town officials believe Kloch’s ruling sets an important statewide precedent regarding the assessment of special ad valorem levies.

Richards compared the situation to a homeowner who still has to pay school taxes even if they don’t have children receiving an education in the district.

“They still pay their taxes, because that’s what a responsible person would do,” he said.