The City of Troy, New York, "Where Henry Hudson Turned Around."

Tuesday, April 01, 2008


Water, water everywhere....

Everyone agrees that the city of Rensselaer owes Troy money for water. The initial question is: How much?

The Administration says $3,500,000. Rensselaer says anywhere from $2.2-2.6 million. In January, Republican Councilman, Mark Wojcik stated he did not believe the total amount owed was more than $3,000,000:

Wojcik Monday said he didn’t believe that Rensselaer’s total balance due was in excess of $3 million. He likewise admitted that he had not been made aware that a water contract between the cities had expired, which is something Dwyer claims.

The easiest part should be determining what is actually owed for the H20. From that, we can calculate interest. There's also the issue of penalties. Some of what Troy claims is from penalties. This is further complicated by the fact that penalties only derive from written contracts. While written contracts cover a portion of the time period involved, there is currently no written contract. Certainly, no one has produced an executed contract.

So, what can we do?

Lawsuit: A lawsuit has been filed, or so we're told. It seems like slow going. That suit was filed at least 9 months ago but no depositions have been conducted. Lawsuits are expensive. They take time. If they do not settle, there's a trial. After a verdict, the losing side will appeal.

There's little doubt that Troy would prevail in a suit. The question will be what Troy can prove. It could be that Troy prevails but the amount owed is more in line with Rensselaer's calculations that Troy's calculations. That's always a gamble.

More significant is Rensselaer's ability to pay. There seems to be an assumption that the City of Rensselaer will pay the full amount of any award in one, lump sum. That is, scribble out a check for $3,500,000. If Rensselaer's budget is, as mentioned, $8,000,000, Rensselaer will not be able to pay a judgment nearly one half of it's annual budget. That's simple fact. You may not like that fact but it's no less a fact because of your displeasure.

Settlement: The other option is settling the claim. This is an attractive option because the details of the settlement agreement are limited only by the imagination of the parties.

For instance, here's one possible agreement.

This is what an agreement may look like. Troy does not get every penny on the dollar. Rensselaer does not skate away. What is wrong with such an approach? Obviously, some penalties and interest are waived in this proposal. Does this agreement "sell Troy down the river?"

The most important thing for Troy in any agreement is to create a mechanism by which Rensselaer will remain current in it's obligation to Troy. With that in place, Troy can continue to profit from one of it's best and most valuable resources, water. What we don't want to do is bankrupt a customer.

The remaining issues about what is owed from 2000 or 2002 or 2004 can be dealt with in any number of ways, including the proposal set forth above.

What gets us nowhere is a lot of chest-thumping, macho bullshit about collecting every last penny one lump sum. Unless Rensselaer has some off-shore accounts in the Caymans, that's simply not realistic. It may not be fair but it's not realistic.

Lastly, but more importantly, is water as an issue and a future revenue source. Many communities throughout the region are either in desperate need of a water source or will be in the future. If this issue can be handled in a calm, mature manner, it would go a long way to lining up future customers. If it's handled with chest-thumping and meaningless threats, would-be customers may think twice about seeking water from Troy.

The only changes we might make to the above agreement is demanding a few of the children of Rensselaer's elite as hostages. Just a few. To keep Rensselaer in line.

Note: A few days ago we mentioned a candidate's blog for the 109 Assembly District but forgot the link. The candidate is Republican Eryn Foster.

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