The Town of Babylon is paying $4.2 million to settle a 23-year-old lawsuit that claimed commercial property owners were unfairly charged a garbage fee.
The lawsuit, which was the longest-remaining litigation against the town, was filed in 1995 after Babylon created the first townwide commercial garbage district on Long Island. The district, in which the town hired a carter to collect nonresidential garbage and deliver it to a newly built Covanta waste-to-energy incinerator, was designed to help the town keep waste from being taken to landfills off Long Island.
"If we don't do something to make sure the garbage stays in town and goes to the facility, we're bankrupt," town Supervisor Rich Schaffer told Newsday in 1994. Schaffer was supervisor then, as he is now.
At the same time, the town was obligated under federal law to close and remediate the town’s landfill. Paying for this left the town in a $120 million hole, so the town sought to mitigate its debt by placing a “benefit assessment” on the tax bills of all commercial properties in the town, including the three villages. In 1996, the first year of the assessment, the town’s 3,000 properties were each charged an average of $251, town spokesman Kevin Bonner said.
Thousands of commercial properties in the town objected to this fee and banded together to sue the town, charging that the fee was illegal. The plaintiffs claimed that because the fee was calculated as $2.6378 per $100 of assessed value, it was actually a tax levy, not a benefit assessment, which would have been the same flat fee for each property.
The property owners continued to file claims to recoup the fees until 2014. That was the last year the town placed the assessment — which averaged $107.93 — on tax bills, Bonner said, when the town paid off bonds for the landfill cleanup. At this point, the plaintiffs numbered in the hundreds, including Deer Park Associates, Grand Boulevard Associates and the Nowak Family Partnership.
The town hired outside attorneys Stagg, Terenzi, Confusione & Wabnik Llp of Garden City for the litigation. The town only had information on the last five years they were used, in which the town paid the firm a total of $115,815, Bonner said.
Town attorney Joe Wilson declined to answer questions about the lawsuit but in a statement said both sides agreed to the settlement because they “collectively desire to avoid further litigation expenses and resolve all disputes among them.” The statement also notes that the agreement should not be "construed as an admission by any of the parties of the truth of the claims" and does not constitute "liability, fault, or wrongdoing."
The attorneys for the commercial properties, Koeppel, Martone & Leistman Llc of Mineola, did not respond to a request for comment.
The settlement had been budgeted for over the years, Bonner said, and will be paid out of the commercial garbage fund.