Mayor: Wastewater Treatment Plant’s Tax Status Won’t Change

Taxpayers in the town of Poland don’t have to worry about their taxes increasing if the Jamestown Local Development Corporation purchases the city’s wastewater treatment plant.

Sam Teresi, Jamestown mayor, told The Post-Journal Thursday that the property will remain taxable if the proposed transfer is completed. On Monday, Teresi proposed the idea to the Jamestown City Council of selling the city’s wastewater treatment plant located in Poland to the Jamestown Local Development Corporation. The property assessed for between $15 million to $20 million is currently not exempt from taxes.

“According to the real property tax law, the only properties that are tax exempt are religious, educational or where charitable activities take place,” he said. “The same way the city pays full property taxes on the wastewater treatment plant, so will the JLDC. The JLDC is a nonprofit corporation, but it is not a charity or an educational facility or owned by a religious organization. As such, just like the city of Jamestown, the JLDC will continue to be taxed. People can remove the fear from their systems. This isn’t some type of way to get tax exempt status in Poland.”

Under the proposal, the city would sell the wastewater treatment plant to the JLDC in an effort to create a capital infrastructure and equipment program fund. Teresi said the proposed list for the capital infrastructure and equipment fund programs, which isn’t finalized, includes replacing sanitary sewer lines and slip lining; upgrading the wastewater treatment plant; replacing or reconstructing water mains; continued energy or structural improvement programs for city facilities; enhanced storm water management improvement programs; Public Works and Parks departments equipment replacement fund; a debt service and sewer rate stabilization fund; and a future property tax reserve with additional property tax and rate relief.

The total value of all of these programs comes to about $16 million.

Under the proposal, the Board of Public Utilities and the JLDC would enter into a use and administration agreement in which the Jamestown Board of Public Utilities would operate the plant on behalf of the JLDC. Likewise, the existing city and BPU labor agreements would remain status quo.

Teresi said the proposal will have no impact to the lending abilities the JLDC performs regularly to help small businesses and organizations in the city. JLDC is a nonprofit corporation created by the Jamestown City Council in April 1981, which serves as the lending agency of the city Department of Development. No taxpayer dollars are used as loan money. Seed money for this revolving loan fund was provided by repaid loan proceeds from Urban Development Action Grant, Community Development Block Grant and Jamestown Urban Renewal Agency projects.

The JLDC offers fixed, low interest rate loans for a variety of purposes including business start-up, real estate acquisition and renovation, machinery and equipment purchases, local artisan development, downtown restaurant development, technology-based business development, and energy efficiency improvements to commercial and industrial buildings.

“There will be no impact whatsoever. It is a different pot of money. The money obtained to run economic development loan programs comes from different sources. Cannot be used for any other purpose. The money will still be available for the lending programs,” Teresi said. “The JLDC is just issuing the bonds for the proposal. It is a separate function from funding economic development. Another new function is the $600,000 the JLDC will be receiving from the state through the (Downtown Revitalization Initiative) to implement a downtown events and activities fund.

“That $600,000 will be managed by the JLDC, which will be yet another function. None of the JLDC functions will be commingled. It is under the same administrative umbrella, but the funds will not be commingled.”

Teresi said he first announced the desire to find a funding mechanism to launch a capital infrastructure and equipment fund program during the 2017 State of the City Address he delivered to Jamestown City Council last January. He said since then several officials have been working on the proposal, which was made public for the first time Monday.

The team involved in producing the proposal included Kenneth Bond, a senior partner of Squire, Patton and Boggs; Joseph Bellitto, city comptroller; Todd Thomas, city clerk and administrative services director; Jim Olson, retired city clerk and financial services manager; Marilyn Fiore-Lehman, corporation counsel; and Vince DeJoy, city development director.

“I have to give credit where credit is due to the team … who helped develop this financing approach that I think is quite creative and innovative,” Teresi said. “I put the charge out in January to come up with a mechanism to put in place and they did.”

Teresi said there was also a second team that worked on projects to include in the capital infrastructure and equipment fund program. He said Jeff Lehman, city public works director; John Williams, parks manager; David Leathers, BPU general manager; and DeJoy produced the possible list of projects to improve infrastructure, energy efficiencies in buildings and equipment to save taxpayer money.

Teresi said he has introduced the idea. It is now up to Jamestown City Council and the JLDC to move the proposal forward. During Monday’s meeting, the council asked for a draft proposal resolution that could be voted on during their Monday, Dec. 18, voting session meeting. Teresi also said the JLDC board is in the process of scheduling a meeting for later this month.