Penn Yan village officials speak out on lawsuit

Gwen Chamberlain

Village officials spoke out about a legal battle with the Town of Jerusalem at the end of their village board meeting Oct. 20.

After meeting in executive session for about 30 minutes, Mayor Douglas Marchionda Jr. proceeded to lay out his position on the status of disagreements between the village and town over sewer contract payments.

Marchionda said the people who are benefitting from the lawsuits are the lawyers, and the people who are paying are the water and sewer customers in the village and town.

He explained the costs for the village’s legal representation — $79,577.76 so far — are paid through fees paid by sewer customers, including sewer customers in Jerusalem and Milo.

Sewer customers in Jerusalem are paying $24,669.11 of Penn Yan’s legal expenses and Sewer customers in Milo are paying $7,910.33 of Penn Yan’s legal bills.

That’s because 31 percent of the cost to operate the village’s sewage treatment plant is billed to Jerusalem’s sewer districts and 9.94 percent is billed to Milo’s sewer district, as spelled out in contracts with those municipalities.

In addition, Jerusalem sewer customers are paying for the legal expenses paid by the town of Jerusalem in the dispute.

“If this were a private customer, their services would have been shut off,” said Marchionda, later adding, “One would think if you pay a bill for nine years, you accept that bill.”

In a phone conversation later in the week, Jerusalem Town Supervisor Daryl Jones, commented, “All we want to do is re-negotiate a contract and get a better rate for our East Bluff customers.”

Rom French, chairman of the Penn Yan Municipal Utilities Board,  met with the village board in executive session, and said afterwards, “It’s pretty difficult to look at the (Penn Yan) ratepayers and tell them they are subsidizing the Town of Jerusalem. We’re still servicing them and yet we are not getting any cooperation.”

In the last audit of Penn Yan financial records, it was estimated that more than $100,000 in sewage fees are past due from the town. Now, Marchionda says, the Penn Yan funds are about $175,000 short.

The village filed the suit against the town of Jerusalem in 2008 because the town had stopped making payments for a portion of wastewater treatment services from the village.

The two municipalities first entered into a sewage disposal agreement in 1995. An addendum to the agreement was added in February 2002 when the town created Keuka Park Sewer District Extension #2. That addendum spelled out that the  Jerusalem district would pay Penn Yan $61,015 for the additional 60,000 gallons of sewage treated per day. The addendum allowed Jerusalem up to 265,000 total gallons per day of use. But Jerusalem officials say the town’s district often does not use even 50 percent of that, and the highest use was 130,603 gallons per day.

In January 2007, five years after the addendum was approved, Jerusalem officials notified Penn Yan that because the town never used the amount laid out in the addendum, “the municipal cooperation agreement forming the basis for Penn Yan’s claim expired by operation of law.” At that point they terminated payments based on their belief that the addendum wasn’t necessary.

Penn Yan officials argued that the addendum was excepted from the five year limit.

Bender agreed with Penn Yan Village officials. Jones says the town of Jerusalem is keeping the option to appeal that decision open.

But Jones also says, “I would love to be able to sit down and talk.”

Earlier this year, Jerusalem presented a Notice of Claim to the Village of Penn Yan, asserting that the village has over-charged the town for sewage disposal services to the tune of $325,680. A notice of claim is a legally required first step in filing a lawsuit against a municipality.

Jones says the town has not filed a lawsuit from that notice of claim.