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Supreme Court says Suffolk County must 'immediately' pay back $29.4M

Paul Sabatino, co-counsel for the Pine Barrens Society,

Paul Sabatino, co-counsel for the Pine Barrens Society, said the refunded money only can be used to lower sewer tax increases in existing districts, including the Southwest Sewer District. Credit: Danielle Silverman

Suffolk County will have to "immediately" pay back $29.4 million that it took in 2011 from a sewer fund to balance its budget under a ruling made by State Supreme Court Justice Joseph Farneti.

The decision said that an earlier judgment in the case should have directed the county to refund the money to the fund, which was raised through a voter-approved, quarter-cent sales tax. Suffolk County has filed a motion to reargue the case before the Appellate Division, a county spokesman said.

Pine Barrens Society Executive Director Richard Amper, a plaintiff in the case, said the ruling will ensure this and other publicly approved tax measures are spent as voters intended.

"Politicians can't change a voter-approved referendum," he said. "They can't take money designated for one thing and do something else" with it.

Suffolk County officials declined to be interviewed for this story.

In a statement, Derek Poppe, a spokesman for County Executive Steve Bellone, said Suffolk has "fully satisfied" its obligations by already spending $29.4 million for water quality and land acquisition projects as laid out in a 2014 settlement.

"This is an attempt to double-bill taxpayers for monies that have already been spent on environmental projects," Poppe wrote.

The money is collected under the Drinking Water Protection Program, which was approved by voters in 1987. The money was taken from the Suffolk County Assessment Stabilization Reserve, also known as Fund 404, that was established to lower sewer tax increases in existing districts, according to Paul Sabatino, co-counsel for the Pine Barrens Society with attorney Jennifer Juengst.

The refunded money only can be used to lower sewer tax increases in existing districts, including the Southwest Sewer District, he said.

"This lawsuit is not about how the money should be spent. It’s about the principle: You can’t lie to the voters and double-deal them without consequences," Sabatino said.

Rulings and legal motions in the case have bounced between Farneti and the Appellate Division for years. The appeals court in its original 2012 decision ruled the diversion of money was “illegal, null and void and of no force and effect” because the county failed to get voter approval in a public referendum as required by the county charter.

In a 4-0 ruling June 26, the Appellate Division in Brooklyn threw out an earlier judgment by Farneti. That judgment "should have contained provisions directing the defendants to take all actions and make all budgetary adjustments as are necessary," according to Farneti's decision released Thursday.

The original loan was taken out under former County Executive Steve Levy, but Bellone had continued to fight repaying the money to the fund, according to Amper.

Levy, in an email, said the money was not for groundwater protection, but for sewer rate stabilization. "Since we had enough money to stabilize sewer rates for twenty more years we felt that surplus should be returned to taxpayers or utilized to clean our waters via sewer and septic improvements," he wrote.

In 2014, Bellone and environmental groups reached an agreement that allowed the county to borrow $171.3 million from the county sewer fund from 2014 to 2017, that will be repaid through 2029, and funded environmental projects.

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