P-J file photo by Dennis Phillips

Oral arguments were made Wednesday in the annexation case pitting the city of Jamestown against the town of Ellicott, village of Falconer and Falconer Central Schools.

The proposed annexation of the Jamestown Board of Public Utilities Dow Street substation located in the town of Ellicott and the village of Falconer, bordering the city, has been an ongoing case for more than two years.

The attorney, Pietra Letterei Zaffram, representing the town, village and school district said the referees assigned the case for the Fourth Department Appellate Division in Rochester ruled correctly that the annexation is not in the best interest of the public. Prior to Wednesday’s oral arguments, a three-member panel — cited as the referees — heard both sides of the annexation argument during a preliminary hearing in Mayville last fall.

Zaffram made three points to the five-member Appellate Court. One point is that the city didn’t file the necessary paperwork in time for the Appellate Court proceedings to even occur. Zaffram said city officials didn’t file the necessary notice within 30 days of the town’s — the main representative for the village and school district as well — filing that the annexation is not in the best interest of the public with the Chautauqua County Clerk’s office.

Stephanie Campbell, the attorney for the city, said that the city wasn’t notified of the town’s filing.

Also, she said that the statute of limitations on the filing for the city, who filed that it is in the best interest of the public, is not an issue because the case didn’t officially start until an opposing view also filed a notice with the clerk’s office.

One judge asked, if the court did throw the case out if it was determined the notice was not filed in time, could the city again go through the process of trying to annex the substation.

Campbell said it wouldn’t be in the public’s best interest to do it again just to make the same arguments.

Zaffram’s second argument was that the substation property has to be adjoining the city for an annexation to take place. She said according to county tax maps and a land survey, Dow Street is the border between the two municipalities and that intervening highway prevents the contiguity of the two entities. She added the area being proposed to be annexed consists of five parcels — four the BPU owns and one leased by the BPU owned by National Grid. Zaffram said the interconnection point to the electric grid isn’t even owned by the BPU.

“The most critical point of the property is not owned by the city,” she said.

Zaffram’s third point is that the annexation is not in the best public interest because of the loss of property tax revenue the town, village and school district receives from the BPU would hurt its taxpayers. The BPU pays a total of around $325,000 in property tax payments to the village of Falconer ($69,000); town of Ellicott ($34,000); Falconer Central Schools ($154,000); and Chautauqua County ($69,000).

Campbell argued that the fact taxpayers in the town, village and school district would pay more in taxes doesn’t outweigh the interest of the city. She said the city is in dire economic circumstances, is financially stressed and has to “pinch every penny.”

If the annexation is approved, the BPU would save around $157,000 in property tax payments annually and the city and the Jamestown Public School District would each start to receive tax equivalency payments of around $79,000 from the BPU.

Campbell also argued that the city is in the best position to maintain, control and protect its own property with the BPU being a city-owned utility. She said the case is an anomaly because typically a municipality doesn’t have to pay taxes on its own utility property when it’s located inside its own border. She added in case of an emergency, city officials who work for the police and fire departments are in a better position to coordinate with BPU officials.

Campbell said the referees pointed out that the property hasn’t had the need for fire and police services in the past. She said that determination shouldn’t be based on what has happened in the past, but to determine today if an emergency does occur at the substation in the future the municipality that is best suited to respond. She added that the $7.9 million city-owned substation serves 48,000 people in Jamestown, Ellicott, Falconer and adjoining municipalities.

According to the Fourth Department Appellate Division website, decisions on cases heard April 1 through April 11 should be released April 26 or May 3.

It has been 21 months since the city of Jamestown passed a resolution to annex the substation in August 2017. In September 2017, both the town and village Falconer boards voted against the annexation, which lead to the case being decided by the Appellate Court.

In January, the BPU approved a change order of $125,000 for the payment for the law firm — Bond, Schoeneck & King — to handle the case for the city. Since January 2017, when the BPU initiated the annexation case, the city-owned utility has paid $405,000 in legal fees.

In January, Stephen Penhollow, Falconer Central Schools superintendent, told The Post-Journal the year-to-date cost paid to Harris Beach, the law firm hired to handle the annexation case for the village, town and school district, is $202,683. Anna Fales, Falconer village clerk, said the village has paid around $93,000 in legal fees. Mike Erlandson, retired Ellicott town clerk, said the town has funded $24,131 toward the case. The total for all three entities is $319,814 in legal fees.

Officials in Falconer and Ellicott have publicly stated they are against the annexation proposal because it would cost them tax revenue.