Medina wants Shelby, Ridgeway to pay towards Niagara County water costs

By Tom Rivers, Editor Posted 1 August 2014 at 12:00 am

The Village of Medina, for the first time, has sent bills – totaling more than $30,000 – to the towns of Ridgeway and Shelby to help pay costs from the Niagara County Water District, the water provider for the community.

Medina has paid the full shot of the “ad valorum” costs since the two towns started hooking into the village water system more than two decades ago. That bill is currently $134,437 and is due Aug. 31.

An auditor, Bonadio & Co., went through Medina’s books and told village officials it shouldn’t bear that full NCWD charge. The firm tried to determine a fair share of the charge and calculated $24,171 for Shelby water users and $6,748 for Ridgeway water users.

The village would still pay about $100,000 of the charge. The village sent letters to the two towns in April, notifying them they would now be expected to pay towards the NCWD charge.

Shelby has refused to pay, and Ridgeway hasn’t responded.

The issue comes when Shelby is trying to renew contracts with the village to provide the water for town water districts. The village buys the water from the Niagara County Water District and then sells it to the towns. Before Medina signs off on a new contract, it wants Shelby to agree to help pay the charge to the NCWD.

Two village trustees, Marguerite Sherman and Mike Sidari, questioned the hardball stance, especially as Shelby pursues a new water district and needs Medina to formally approve an agreement, supplying the water.

“Are we going to hold people’s lives and health in the balance over this?” Sidari asked at Monday’s Village Board meeting.

He urged the board to sign off on the water supply agreement so the water districts could move forward. Trustee Marguerite Sherman also wants the village to sign off on the agreements so Shelby doesn’t miss out on a grant or have its water project delayed.

Mayor Andrew Meier said the village is obligated to pursue the funds from the two towns, especially after being put on notice from the auditors. The village shouldn’t have to subsidize the town water users, Meier said.

The water districts can move ahead if Shelby signs the agreement and agrees to help pay the NCWD charge, Meier said.

Town of Shelby Attorney David Schubel, in a June 20 letter to village attorney Matthew Brooks, said town officials don’t believe the NCWD fee applies to the town because the village is NCWD’s water customer. The “ad valorum charge” is applied to the village to ensure Medina receives the same water rates enjoyed by communities in Niagara County, Schubel said, citing a meeting with NCWD officials.

The village adds 1.6 times the village water rate or about another $1.50 per 1,000 gallons to the town rate. Schubel said that added cost should be enough to pay the NCWD charge and other village costs.

“It would seem that a premium rate of 1.6 should be adequate to cover the actual cost of water and the related costs incurred by the Village in supplying water to the Town and the ad valorum charge,” Schubel said in his letter.

He noted the town is working on two water districts that will need water supply agreements with the village. Schubel sent another letter on July 23 requesting the village approve the water supply agreements.

Shelby officials don’t see the “ad valorum charge” as a mandated or imposed charge from the NCWD, but a membership fee, Schubel said in his letter.

But Medina Attorney Matthew Brooks sees it differently. An August 1993 water supply agreement with the Town of Shelby obligates the village to seek a share of the ad valorum charge, Brooks said.

That agreement says, “Shelby further agrees to pay Medina the actual costs and charges which shall be, from time-to-time, mandated or imposed by the Niagara County Water District, concerning sales of water outside of Niagara County, in lieu of charges assessed from Niagara County Water District in Niagara County taxes, deficits and charges.”

Brooks said the issue could very well go to litigation.

“Right now the town only pays for the water it uses,” Brooks told the Village Board. “To say, ‘We don’t have to pay any additional water,’ doesn’t hold water, so to speak.”