DANC Response to PSC Intervenor Fund Denial

7/28/2019 DANC Response to PSC Intervenor Fund Denial

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ANDERSON WISEDENNIS G. WHELPLEYSTEVEN C. HAASCATHERINEBURN5 QUENCE.RKEITH B. CAUGHLINANN E, PHIWPSGEORGE E. MEAD IIIWCY M, GERVISS' ALSO ADMITTED IN FlOIUDA

[email protected]

SCHWERZMANN & WISE, PCATTORNEYS AT LAW

j ( \ I i . ~ ~ j / " M f U \ i ! J f J f J i l xP.o. BOX 704

WATERTOWN, NEW YORK 1360134 18315788-6700FAX 315 788-2813

137 MAIN AVENUEMay31,2013

RICHARD F. SCHWERZMANN(1918-2000)

LESLIE H. DEMINGOF COUNSEL

Jeffrey C. Cohen, Acting SecretaryState of New York Department of Public ServiceThree Empire State PlazaAlbany, NY 12223-1350Re: Development Authority of the North CountryIntervenor Funding Case No. 12-F-0410

Gentlemen:Attached is our response to the Hearing Examiners Reasoning concerning theirinitial determination on the Development Authority of the North Country's request forIntervenor Funding.

DGW:casEnclosure

Very truly yours

( i H W E R Z M A ~ W I ' ~ : . t / )I: r ' \ ,/ . ')"" ' / "" ' _ l ~ ~,r l' . . ) :.:. .. " , '" v--- ~ If , , " tI r--" ~ - . ,. ...r--, ,. ' ._".~ . '

Dennis G, Whelpley


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SCHWERZMANN & WISE, P. C.137 Main Avenue, P. O. Box 704

Watertown, New York 13601315 788-6700FAX: 315788-2813

[email protected]

MEMORANDUMTo: Paul Aqresta, Esq., Chief Hearing ExaminerMaria Villa, Esq., Hearing ExaminerFrom: Dennis G. Whelpley, Esq.Re: Eligibility ofthe Development Authority of the North Country ("DANC") forIntervenor Funding, Case No. 12-F-0410Date: May 30, 2013

Thank you for your email of May 22,2013 setting forth the rationale of the HearingExaminers regarding the above-referenced issue and offering this opportunity to respond.

The purpose of the Intervenor Funds is for the Applicant to a Public Services Law("PSL") Article X proceeding to "provide funds to support intervenor participation inthe sitting process both at the preapplication and hearing phases of the proceeding" (seeNew York Sponsors Memorandum 2012 A. B 8510 dated October 5, 2012, Legislative BillJacket). The obvious reason for this legislative requirement is to ensure intervenorparticipants are encouraged to participate in a meaningful manner.

In the Division of Budget's Memorandum in support of the current PSL Article XLegislation, it stated that the purpose of the Intervenor Fund is to pay for consultant, legalor other fees incurred by "interested parties to the proceedings" without undue economic


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hardship on those parties. (id. , emphasis added). It is for this reason that DANe seeksIntervenor Funds, as all unreimbursed costs incurred by it are ultimately borne by theultimate end-users of the water from its pipeline. These ultimate end-users are innocentinterested parties concerned over the potential adverse impacts of the Applicant's proposedProject on the pipeline which supplies their drinking water. The issues ofconcern regardingthis proposed Project and DANC's pipeline are set forth in DANe's comments on thePreliminary Scoping Statement and reference is made thereto for the sake ofbrevity, but notfor lack of importance.

It appears that the sole issue regarding the award of Intervenor Funding is whetherDANe is a "local party" pursuant to PSL 160(9). It does not appear to be a dispute as towhether DANe "may be affected" by the proposed project. Therefore, the sole issue to beaddressed from the reasoning you sent me is whether DANe is "local" as that word is usedin PSL 160(9). On the face ofPSL 160(9) and its legislative history, it appears that it is.

However, the reasons set forth in your email indicate a dichotomy exists betweenstate and local; even though PSL 160(9) and 1000.10(a) of he implementing regulationsmakes no such differentiation. The term "state" is not even used in the statutory languagein reference to the intervenor funds. It is respectfully submitted that based upon the plainlanguage of the statute and the implementing regulations, DANe is a "local party".

Your email indicates the reason for your initial determination is that DANe isnot local and "is in fact a state entity". The following is intended to address those stated

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concerns.Public Authorities Law ("PAL") Section 2703 (4) in relevant part states:

The members, officers and employees of the Authorityshall be deemed to be state officers or employees and theAuthority shall be deemed a state agency SOLELY for thepurposes of sections seventy-three and seventy-four of thepublic officers law. (emphasis added).

The operative word is solely. Section 231 of McKinney's Statutes reads that:In the construction of a statute, meaning and effect

should be given to all its language, ifpossible, and words are notto be rejected as superfluous when it is practicable to give toeach a distinct and separate meaning.

Section 240 of McKinney's Statutes states:The maxim expressio UnIUS est exculsio alterius is

applied in the construction of statutes, so that where a lawexpressly described a particular act, thing or person to which itshall apply, an irrefutable inference must be drawn that what isomitted or not included was intended to be omitted or excluded.

Section 232 of McKinney' s statutes reads:Words ofordinary import used in a statute are to be given

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their usual and commonly understood meaning, unless it is plainfrom the statute that a different meaning is intended.

In light of the above-referenced rules of statutory construction, it is respectfully submittedthat the legislation creating DANC is very clear that DANC is not a state agency, except fortwo limited express provisions of the Public Officers Law which deal with ethics andconflicts of interests. Applying the above rules of statutory construction, for the purposesof PSL Article X, DANC clearly is NOT a state entity or agency.

This reading of the PAL Section 2703(4) is consistent with other relevant sectionsof the legislation creating DANe. (see McKinney's Statutes Sections 97 and 98).

While the Governor appoints five non-voting members, PAL Section 2703(2) ISclear, "The powers of the Authority shall vest in the voting members, thereof' (emphasisadded). The voting members are appointed by the three "Participating Counties" Boards ofLegislators and the Common Council of the City ofWatertown, all local governments. Thevoting members file their oaths of office with their County Clerks of their respectiveresidencies, as required by Section 10 of the Public Officers Law. The voting members donot file their oaths of office with the Secretary of State, as they are not state officers asdefined in Section 2 of the Public Officers Law, but are local officers. PAL Section 2703(1)requires each voting member to be a resident ofthe appointing municipality. State Officerstypically can reside anywhere in the State (see, Hulbert v. Craig, 124 Misc 273, affirmed 213AD 865, affirmed 241 NY525).

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In the event that DANC is terminated, its property and rights pass to and vest in thecounties, not the State (see PAL 2703(7); cf. discussion of Lake Champlain BridgeCommission and Commissioners of he Niagara Reservation, infra.) The term "ParticipatingCounties" is defined in PAL 2702(7) as meaning Jefferson, Lewis and St. LawrenceCounties. The term Participating Counties is used throughout PAL Title 29 (e.g. PAL2705, 2706, 2708, 2709, 2710). The term is used to convey an intent that DANC is a localentity. Any bonds or other financial obligations issued by DANC are not a debt of theState (see, PAL 2711 (11)) .

DANC's authority to undertake the infrastructure projects set forth in PAL Title 29is limited to the three Participating Counties. (e.g. PAL 2706, 2707, 2708, 2709; cf. 1912Opn of Atty Gen. 113)

In response to your observation concerning PAL 2720, those services may beprovided to DANC, but those state entities are not required to provide those services. Thesection merely states what is generally available to any municipality in the state. Please notethat the vast majority of opinions issued by both the Comptroller and Attorney General arein response to municipal inquiries. The Division ofAudit and Control's primary mission isto serve and oversee local governments and their finances.

Finally, in response to your comments as to analogies to other entities, we note thefollowing:

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Lake Champlain Bridge CommissionThis was a six member commission, 3 members of which were appointed by the

Governor of New York and 3 were appointed by the Governor of Vermont. Its soleresponsibility was the construction and maintenance of a bridge across Lake Champlain toconnect the two sovereign states. It was supported with annual appropriations from bothstates legislatures. It was abolished in 1987 and its functions and properties and rightsin New York were taken over by the New York State Department of Transportation. (SeeLaws of 1986, Chapter 918).In this comparison, DANC bears no relevant similarities to this defunct Commission in thatthe Regional Waterline is not supported financially by annual State appropriations, andDANC's governing board in which its powers are vested, is not appointed by the Governor,but its constituent local government legislative bodies. DANC's waterline is not part of abi-state compact, while the Commission was to provide a vital transportation link for personsand commerce between two sovereign states and their people. DANC's regional waterlineis a local source of water for local residents. In the event of DANC's termination, thetransfer of its rights and property is to the local levels of government, not the State ofNewYork. (See Laws of 1986 Chapter 918.); also, see former NY State Finance Law 92-M, acopy of which is attached for convenience.) Finally, DANC still exists and the LakeChamplain Bridge Commission is gone.

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The Commissioners of the Niagara ReservationThe Niagara Reservation was the predecessor to the current State Park at Niagara

Falls and was established in concert with the Province of Ontario and the CanadianGovernment. The Commissioners of the Niagara Reservation was created by Legislature in1883. Its voting members vested with the power to act on its behalf were all appointed bythe Governor and were not residents of Niagara County, in fact, three of the five initialmembers were residents ofNew York City. The funds of the Commission were providedby appropriations of the State Legislature. The Commission was abolished by the Laws of1928, Chapter 242 and the park is now governed by Parks, Recreation and HistoricPreservation Law (PRHPL) 7.03, (for a contemporaneous history of the inception of theCommissioners of the Niagara Reservation see the attached article in the New York Timespub l i s hed May 24 , 1 883 wh ich can be found at:

h t t p e r y . n y t s . c o m l g s t i a b s t r t . h t m l A0915FD3F55 1173 8DDDADOA94DD405B83 84FOD3.)

In 1912 Opn ofAtty Gen 113, the opinion makes note that the Commissioners did nothave to reside in the locality of the Reservation, could acquire land anywhere in the State andthat it would submit any revenues it derives to the state treasury. It is respectfully submittedthat this defunct ancient Commission, which was a predecessor to an important part of thecurrent State Parks system, under the jurisdiction of the Office of Parks, Recreation andHistoric Preservation, is not analogous to DANC in its character or nature. The Commissionwas created to preserve, protect and promote one of the seven natural wonders of the United

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States. By contrast DANC runs a local regional waterline to serve a sparsely populated ruralarea with a source of potable water from a local source.

Finger Lakes State Park CommissionThis Commission is not analogous to DANe. The Finger Lakes State Commission is

one of he twelve parks regions that the State is divided into byPRHLP 7.01 and is the fourthregion established by PRHLP 7.03(4). Its only members are appointed by the Governor, withthe advice and consent of the Senate (See PRHLP 7.05(l). None of the members ofwhichneed to reside in the areas of the region comprising the Finger Lakes Region of the ParksSystem (cf. PRHPL 7.05 and PAL 2703(1. It is a component fo the State Department ofthe Office ofParks, Recreation and Historic Preservation (See Article 7 ofPRHPL). The casereferred to by reference in the annotations to Section 2 of the Public Officers Law appears tobe Hulbert v. Craig City Comptroller, 124 Misc 273. In that case the plaintiff was a City ofNew York Alderman who was contending that he did not forfeit his position as an aldermanto the CityofNew Yorkby accepting an appointmentto the Finger Lakes Park's Commission.The issue in that case was whether the position on the Park's Commission was a "stateoffice", because under the New York City Charter he would have vacated his citygovernment position by taking a state office. The Court held that the position was a stateoffice and not a local office, because it was an appointment by the Governor with the adviceand consent of the Senate, the powers were not restricted to an area of the state and thatqualifications for appointment were not restricted to residency within the region of the State

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for those State Parks (id. at 275). The oath of office was filed in the Secretary of State andnot the political subdivision where the plaintiff resided. The Court held the plaintiff held astate office based on those facts, and thus vacated his position as a New York City Aldennanpursuant to the provisions of the City ofNew York Charter.

However, those are not the facts or law in the instant matter. The voting members ofDANC must be residents of the municipality appointing them (see, supra); the appointingauthority is not the Governor but the Participating Counties and the City ofWatertown (see,supra). The geographic authority of DANC is limited to the Participating Counties (see,supra). The funding ofDANC is not supported by annual appropriations of the Legislature(see, DANC's original request for intervenor funding) . It is respectfully submitted that theforegoing decision is not to analogous to DANC in the matter at hand.

In summary, as stated in the initial request for intervenor funding, if such request isdenied the net result is that the local ultimate end-users of the water provided through theWestern Jefferson County Waterline will, of necessity, have to pay the all costs associatedwith DANC'S participation in the Article X process, to protect DANC' s and their ultimateinterests in the waterline. This obviously runs contrary to the purpose and intent of theIntervenor Funds requirement as evidenced by the plain language ofPSL Article X and theregulations promulgated thereto. In addition, it is contrary to the Legislative history containedin the Bill Jacket of the Legislation authorizing PSL Article X. (See, supra.)

There is nothing in the language of PSL Article X or the regulation promulgated

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thereto which differentiates between a State or local agency, but assuming there is, DANC isnot a State agency because:

1) The language creating DANC is clear that for the purposes of PSLArticle X it is a local not a State agency (PAL 2703(4); and supra.)

2) DANC is not analogous to the entities cited in your email. (see, supra.)3) DANC has no more benefit from the Attorney General , Audit & Control

or other state agencies than that afforded every municipality of the State.(see, supra.)

It is respectfully requested that DANC be awarded the Intervenor Funds it requestedto avoid unnecessary burdens to its ultimate end-users to cover the costs necessary to protectits and their interests in this PSL Article X proceeding commenced by the application of asubsidiary of a large multinational enterprise. The incomplete nature of the Applicant'sPreliminary Scoping Statement as it relates to the potential impacts on the Waterline, furthernecessitates DANe's active involvement in the preapplication phase of this PSL Article Xproceeding and, further justifies DANC receiving the requested intervenor funding.

In light of the foregoing, DANC's initial request for intervenor funding, and itscomments in the Preliminary Scoping Statement, it is respectfully submitted that the law andequity requires that DANC's request for intervenor funding be granted. Thank you for thisopportunity to respond.

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N. Y. STF. LAW 92-m : NY Code - Section 92-M: Lake CIJampJain bridges fund Page 1 of 2

In a FOR LEGAL PROFESS IONALS.L .Y STF. LAW 92-m ;NY Code - cction 92-M: Lake Champlainhridg-ps fundSearch N.Y. STF. LAW 92-m : :"IV Code - Section 92-M: Lake Champlain bridges fund

1 . There i s hereby es tab l i shed inthe custody of the s t a t e compt ro l l e r a ~ d che commissioner o f t axat io nand f inance a spec ia l fund t o be knOlJenty-one o f the laws o f n i n e ~ e e n hundred twenty-seven re la t ing t o toecreat ion o i the Lake Ch ampla i.n bridge commission", (b ) expenses relat.edto the d .i : ; solut ion o f the I..ake Champla in bridge commiss i on , and (c) the

http: //codes.Jp.fmdlaw.com/nycode/ TF IG92 -m 5124 /20 [3


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N.Y. STF. LA W 92-rn : NY Code - Section 92-M : Lake Champlain bridges fund Page 2 of2

cos t of improvements to th e Lake Champlain br idge .4 . Notwithstanding the provis ions o f an y general o r spec i a l lcti-J , nomoneys s h a l l be ava i l ab l e from the La ke Champlain br idges fund u n t i l a

c e r t ~ ~ i c a t e 0:: appro v a l o f avai lab i l j t :y sha l l have been i s sued by thed ~ r e c t o r o f th e budget , upon the reCOI'!li."i1en a t ion of th e c ommiss ioner 0 ::transpor a tj on , an d a copy of such cer tif_l c a te f i l ed ;",li th t_he s ta tecompt r o l l e r , the chalrman o f the senate f ina nc e conunittee and th echa irman o f the assembly ways and means cornmittee . Such c e r t i f i c a t e maybe amended f ro n: t ime to t ime b y th e d i r ec to r of the budge t , upon th er.econrrnenddtion o f the commissioner of transpo r tat ion , and a c opy of eachsuch amendmen t s haLi be f i l ed wi t.h the s ta te compt.rol ler , th e c ha Lrmano f t.he senate f in ance cormnittee and the chairman o f t he assembly >laysand me ans committee.5. Any mone ys in such fund, a t the d isc r e t ion o f the s tacecompt ro l l e r , may be i nves ted jn s e c u r i t i s s and ob l i gac ions def ined bys e c t i o n s n inety - e i g h t and ninety-e ight -a o f th i s a r t i c l e . Any ir..come ori n t e r es t fr om su c h inves tment s h a l l be cr e di ted to such fund .6 . The moneys, f o l l owing a l loca t ion , s h a l l be paid out. of t he fund onthe aud i t and warrant of the c omptrol ler on vouchers c e r t i f i e d o rapproved by the c O ~ l f f i i s s i o n e r o f t r anspor ta t ion , o r by an of f i ce r o remplo yee of th e depa""tment o f t ran s p or t a t i on des ignated by thecornnlissioner .

Homelesshousing andassistance fundFUNDS OF THESTATE

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DANC Response to PSC Intervenor Fund Denial

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