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Republican legislators defend fees over NYPA; Focus on $225,000 as suit is dismissed

Republican Niagara County legislators insisted Monday that they didn't waste $255,000 in legal fees, after an appellate court dismissed the county's lawsuit against the New York Power Authority.

In a unanimous four-page ruling issued late Friday, the Fourth Department of the Appellate Division of State Supreme Court in Rochester said the county's case should have been thrown out by the first judge who saw it.

The county brought suit in May 2009 to protest the Power Authority board's vote the previous February to send $544 million of its surplus funds to the state treasury to balance the 2009-10 state budget.

Critics called that move a "sweep" of funds away from the authority.

The ruling said the county didn't show that it was harmed by the authority's move.

"There is nothing in the Public Authorities Law prohibiting [the Power Authority] from contributing surplus funds to the state," the five-judge panel wrote.

The lawsuit was financed out of the county's pot of Seneca Niagara Casino revenues, since cut off by state law. The Legislature voted to sue over that cutoff, too, but never did.

The county has $229,000 in casino money left, Budget Director Daniel R. Huntington said.

In 2009, State Supreme Court Justice Ralph A. Boniello III, who once served as Niagara County attorney under a Republican-controlled Legislature, refused to dismiss the case. He should have, the appellate court said.

"The authority remained confident in its position on the case, and we appreciate the court's reasoned decision," authority spokesman Michael Saltzman said Monday.

Assemblyman John D. Ceretto, R-Lewiston, was a county legislator when the suit was filed, and was one of four legislators whose names were on the suit as individual plaintiffs.

"It wasn't a waste of money," he said Monday. "We were trying to defend our region."

Ceretto argued that the Power Authority wouldn't have provided low-cost electricity for the Yahoo! data center in Lockport or the now-defunct deal for the Verizon data center in Somerset if the county hadn't sued. The authority has denied that claim repeatedly.

"We believe the litigation opened a line of dialogue with the Power Authority," said Majority Leader Richard E. Updegrove, R-Lockport, another of the plaintiffs.

He said the Yahoo and Verizon deals were "ancillary benefits of this dialogue."

"I think we were right in standing up for Niagara County," said Legislature Chairman William L. Ross, C-Wheatfield. "I think we sent a strong message, but that strong message cost us a lot of dollars that I would have liked to have seen go to some organizations that are in need of help at the present time."

"I'm disappointed that for the second time in 10 days, the Fourth Department has cost us jobs and development in Niagara County," said State Sen. George D. Maziarz, R-Newfane. He was referring to the court's refusal to accelerate a lawsuit challenging the Verizon project, which was canceled because of delays at court and in buying the necessary land.

Power Authority President and CEO Richard M. Kessel has said the lawsuit played no role in the delay in announcing the "Niagara Initiative," an aid package to the county and its municipalities, first promised last summer.

Ross said he takes Kessel at his word. "We're still in the running for the Niagara Initiative, and certainly I'm going to keep pushing for that," Ross said.

The only county legislators who voted against filing the lawsuit were three Niagara Falls Democrats -- Dennis F. Virtuoso, Jason J. Cafarella and Richard A. Marasco.

"It's not that I agree with the sweep, but it was a waste of money [to sue]," said Virtuoso, the minority leader. "We were the only ones who voted against it, because it was frivolous. [A sweep] was done before, by the Pataki-Maziarz administration."

Maziarz said Virtuoso was willfully misrepresenting the facts. "When the Democrats did it, it was sweeps to the state's general fund," he said. "Previous sweeps were for energy-related expenses, Power for Jobs and so on. It was exactly what the Power Authority should be doing."

The suit asserted that if the Power Authority had such enormous surpluses, it must be overcharging for electricity.

The suit demanded a refund of the $544 million to the authority and that the money be used to pay rebates to Niagara County electric customers.

"The Power Authority should not be allowed to send money from the sale of electricity to the state's general fund," Updegrove argued. "This Legislature was not afraid to draw the line in the sand."

County Attorney Claude A. Joerg said he thinks a possible appeal to the Court of Appeals will be discussed at the April 5 Legislature meeting.

Charles E. Graney, a Webster Szanyi partner, said there is no automatic right to appeal because the Appellate Division ruling was unanimous.


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