Heather Nellis - For the Express

ALBANY — The Hudson River-Black River Regulating District’s decision to tax five Capital District counties more than $4 million proved to have worse consequences than a lawsuit filed against it May 28, as two county executives successfully lobbied state legislators to introduce bills Thursday to dissolve the agency in its entirety.

In both the state Senate and Assembly, bills were introduced to eliminate the regulating district, which oversees the Great Sacandaga Lake, devolving its powers to the state Power Authority.

The bills seek to repeal three sections of Environ-mental Conservation Law: One creating the regulating district as a unified entity from the Hudson River and Black River districts; one granting the district’s authority and transferring associated documents to the district’s secretary; one maintaining the separation of the Hudson River area and Black River area’s budgets.

The bills were introduced by Sen. Neil Breslin of Albany and Assemblyman Ron Canestrari of Cohoes.

“We’re drawing the line in the sand,” said Rensselaer County Executive Kathleen Jimino, whom along with Albany County Executive Mike Breslin, the senator’s brother, asked the legislators to introduce the bills.

Sen. Breslin also introduced Gov. David Paterson’s program bill in February that sought to allow interfund transfers between the Hudson River area and Black River area budgets, which would rectify a $4.5 million shortfall in the Hudson River area budget.

Regulating district officials considered the bill, which still hasn’t been voted on, to only be a temporary fix, however, and then doled out the following apportionment to the counties as a more permanent solution: Albany ($1.709 million), Saratoga (1.5 million), Washington ($171.357), Warren ($290,616), and Rensselaer ($781,400). Using the 100-year flood plain, the regulating district hypothetically determined those counties’ flood benefits from operations of the Conklingville Dam at the Great Sacandaga Lake.

The counties united to file a lawsuit against the regulating district’s bills, arguing the apportionment is “arbitrary, capricious,” and “constitutes an abuse of discretion and was reached in violation of lawful procedures.”

Jimino said when the counties received notice in February about the unexpected and unbudgeted tax bills, executives began taking a closer look at the regulating district.

“It raised a lot of questions about whether or not this is the most cost-effective way to get the job done. There is a huge payroll and budgeted expense associated with the district. We think this could be done by another agency and done much less costly,” she said.

The regulating district has a total operating budget of $8.5 million; $5.4 of that for the Hudson River area. The Hudson River area budget saw a shortfall of $4 million when a federal Court of Appeals ruling issued November 2008 ended the regulating district’s 83-year-old practice of levying annual headwater benefit charges from Hudson River hydroelectric power companies licensed by the Federal Energy Regulatory Commission.

The regulating district, created in the 1920s, manages a network of dams and reservoirs, including the Great Sacandaga Lake, which provide flood control along the Hudson and Black Rivers. There are two hydropower projects in the district: The E.J. West Hydroelectric Project on the Conklingville Dam and the Stillwater Hydroelectric Project on the Stillwater Dam.

The state Power Authority currently manages several dams and reservoirs, operating eight hydropower plants.

“We have no supervisory input [in the regulating district’s functions]. It makes no sense for us to be paying for it nor for us to be supervising it. The regulating district is a state agency, so it should be supervised and funded by the state, and if run right, making some money for the state,” Breslin said.

Still, other officials are calling the bills a “knee-jerk reaction” that don’t consider the scope of its ramifications.

Executive Assistant Peter Edman, speaking on behalf of state Sen. Hugh Farley, R-Niskayuna, noted that both sponsors are from Albany County.

“But the district also includes the whole Black River side. There are a lot more people affected than just the sponsors. It’s not just a local Albany bill,” he said.

Edman said it appears the bill was “thrown together,” as even the accompanying memo, which typically explains cause, “said nothing.”

Sacandaga Protection Committee co-President Joe Sullivan said he looked over the bills and spoke with the organization’s attorneys Thursday morning.

“I think it’s a knee-jerk reaction, not to mention the sponsor and Albany executive are brothers,” he said. “Our biggest concern is the unknown factor, and what this will do to the tax bases in Fulton and Saratoga counties. But without understanding how all that would be impacted, it’s hard to say whether it’s a good or bad idea.”