Groups still hashing out control of NYPA money

LOUISVILLE —An attorney for a group of St. Lawrence River towns looking to control $16 million and 20 megawatts of low-cost power from the New York Power Authority says the group can mete out the funds and electricity legally for economic development through another entity — but that's not what the agreement governing the group says, according to a St. Lawrence County lawmaker.

Legislator Frederick S. Morrill, D-DeKalb Junction, said the agreement under which the proposed St. Lawrence River Valley Redevelopment Agency will operate does not specifically state that another entity will administer loans, grants or power on the river agency's behalf.

Mr. Morrill is a member of the county's Industrial Development Agency, which also wants to control the money and power.

"I thought it was quite clear that the money and power were going to be allocated to them, and they would reallocate it to private enterprise," he said. "It sounds to me like they know they can't do what they've said they're going to do, and now they're looking for other ways around it."

Eric J. Gustafson, Massena Electric Department attorney and adviser for the river group, was joined by town representatives Thursday at the Local Government Task Force meeting here. He said the towns will not themselves administer the money and power.

The five-member group, which plans to use the assets to spur economic development, will include representatives from St. Lawrence County and the towns of Lisbon, Waddington, Louisville and Massena.

"The towns and the county are prohibited from giving out loans or grants. This proposal has always contemplated using our partners at the IDA and the Power Authority for that," Mr. Gustafson said. "I see this as validation of what we've been doing from the beginning."

MED Superintendent Andrew J. McMahon said the structure is similar to the Greater Massena Economic Development Fund's relationship with the IDA's Local Development Corp.

"They're using a public benefit corporation to act as a trustee for the funds," he said.

Justin S. Miller, an attorney with Harris Beach LLP, recently issued a legal opinion to the IDA that says the towns could not legally accept or administer the money and power for economic development projects.

"Ideally you need a special act of the state Legislature to create an agency that has its own purposes and powers," Mr. Miller said. "In taking cash from a public benefit corporation like the New York Power Authority, it would become municipal cash. They don't have the power to give that money away to private enterprise, nor do they have the power to directly sell energy."

The IDA and the river group disagree over who should control the money and power.

The towns view the $16 million, money NYPA committed to the now-defunct St. Lawrence Aquarium project, and power as compensation for inequities between NYPA's relicensing settlements for the St. Lawrence-FDR power project in Massena and the Niagara project in Western New York. IDA officials have said their agency already has the necessary legal structure to administer the funds and power.

The towns and county Legislature have approved the agreement to form the river agency. Task force members said the next step is to discuss a working relationship with IDA officials. Task Force Chairman Robert O. McNeil said a meeting will be set up among both groups and Assemblywoman Addie J. Russell, D-Theresa, before the group's representatives meet with NYPA officials. Mr. McNeil said he hopes the IDA and towns can reach an understanding before NYPA trustees meet May 19.