Town of Norwood could triple tax rates for non-village residents
Sunday, December 16, 2012 - 5:14 pm


NORWOOD -- Despite the many obstacles and unknowns involved in creating a Town of Norwood, Mayor Jim McFaddin still believes the idea should be explored with further study before the village votes on dissolution.

But should a Town of Norwood encompasing the entire 13668 zip code in the Town of Potsdam come to fruition, tax rates could triple for those now living outside the Village of Norwood.

The creation of a town isn't altogether a new idea in New York State, according Jill Symonds of the consulting firm CGR of Rochester, who presented the firm’s final report on dissolving the village last week.

She said new towns have been created five times in the state, but the intricacies of Norwood's situation make its circumstances unique.

Once the information is made clear, McFaddin expects more villages will consider the option as a way of reducing costs and becoming more self-sufficient.

"We may be the first to take on the issue but we won't be the last," he said.

Tough Row to Hoe

The Village of Norwood exists in two separate townships, meaning consensus would likely be needed from voters in both Norfolk and Potsdam for the town plan to move forward.

At the very least, it would require action from the state legislature and Norwood’s support, which could pose a problem. The projected tax savings shown from the town option is significantly less than the savings achieved through simple dissolution.

If the village simply dissolves, Symonds said Norwood residents could see their tax rates drop from $16.70 per $1,000 of assessed value to $8.10 per $1,000, and town taxes would go up slightly.

But if the village instead became a town that also included property outside the village, two scenarios might be possible, both showing less savings for village residents than dissolution.

The first would expand the boundary for the proposed town to include Norwood Lake. In this scenario the study showed Norwood's tax rate dropping from $16.70 to $11 per $1,000.

The second option would expand the new boundary to include the entire 13668 zip code. This plan would reduce the tax rate to $14.40 per $1,000.

Obtaining approval from Potsdam voters would likely be more difficult based on current numbers provided in the study, which showed massive jumps in tax rates for Potsdam property owners.

Under the first proposal, Potsdam residents who live in the proposed town boundary would see their tax rate jump from $3.20 to $9.10 per $1,000, according to the study.

The larger boundary showed the tax rate increasing to $11.20 per $1,000, more than triple the current rate of $3.20.

Numbers were not provided on the impact for Norfolk taxpayers, or on Potsdam taxpayers outside the proposed area. However, the towns would likely see increases, as the new town would reduce the tax base in both towns. Only a small part of the village is located within the Town of Norfolk.

Procedure Unclear

Aside from the tax implications, the process is also a bit foggy. It appears voters in all three municipalities – the Village of Norwood and towns of Potsdam and Norfolk -- would need to pass referendums and the state legislature would need to pass a special act, but that is not entirely certain.

At last week’s meeting attended by about 20 people, Symonds said she did not know what would happen if Norfolk and Norwood favored the plan, but Potsdam opposed it.

The problem stems from the lack of a solid precedent, according to Symonds. While there have been similar cases, there have not been enough to establish a firm process.

Changes in Service

Potsdam residents who become part of the new township would gain some services for their higher tax rates.

Under the plan, Norwood Police would patrol the entire new township, not just the former village, and McFaddin said the water district would probably be expanded.

Other services, such as lighting, would be contained and paid for by current residents through special districts.

McFaddin also stated that the numbers in the study are rough, and would likely change for the better with a bit more research and planning.

Planning Ahead

To identify true costs and potential savings, McFaddin would like to enlist help from the colleges to develop "the most cost effective service plan for its residents." McFaddin said he also hopes to find funding for a grant to research forming a town more thoroughly and have CGR perform the work as a continuation of their current project.

McFaddin said he has written Gov. Andrew Cuomo about the issue, focusing on the fact that the majority of villages engaged in dissolution studies choose not to dissolve. He said the coterminous option (creating a town from a village) is more appealing to residents of the village.

There is some evidence that state officials are on board. The Citizens Empowerment Tax Credit, a state incentive issued to villages that dissolve, has been extended to include coterminous towns, which is what Norwood would become. Symonds said this change was made recently at the state level.

Citizen support?

While the Dec. 4 meeting drew a mixed crowd of people, some members of the audience believed the idea of creating a township should be explored, even if they didn’t like the initial numbers.

Norwood resident James Doran said "progress is a wonderful thing, if we can afford it." He said the option didn’t look great, but thought the idea was worth investigating.

"Right now they are just spit-balling," he said. "We want to know what is the best solution."

Ned Meader, who lives outside of the current village but would live inside the new township, feared the massive increase of taxes from the proposal, but was also not opposed to studying the option further to find out the true costs and possible savings.

"If it saves taxpayers money I'm in favor of it, if it doesn't I'm opposed."

Others at the meeting called the proposition a fantasy. Some expressed support for dissolving the village, which showed substantial savings and posed fewer questions. Regardless, the committee will pass the study on to the town board for approval at the Dec. 17 meeting.

McFaddin plans to ask the board to support further study before deciding on whether or not to call for a dissolution vote.

He acknowledged that the current projections weren’t feasible, but he also believed they didn’t accurately represent the costs. He said there is merit in continuing the study, before moving on.

“If we dissolve the village, there is no chance of creating a town. If we are going to look at this option we need to do it now.”