Carmel settles tax dispute with New York City 

The Carmel Town Board voted Oct. 7 to accept a settlement agreement resolving a series of lawsuits involving New York City and property tax assessments on city-owned land within the town.

The litigation involved challenges to assessments on properties owned by New York City as part of its watershed system, which supplies drinking water to millions of residents in New York City and surrounding communities.

The town is home to numerous city-owned watershed properties, including land associated with reservoirs and other water supply infrastructure. Although owned by New York City, these properties are subject to local property taxation under applicable state law.

The settlement addresses multiple tax years and properties involved in the litigation. The lawsuits were filed in state Supreme Court in Putnam County and challenged assessments established by the town.

Under the agreement, the parties have established revised assessments for the affected properties. The settlement also contains provisions governing the resolution of the pending court proceedings.

The Town Board approved a resolution authorizing the settlement and permitting the town's legal counsel, Costello & Folchetti LLP, to execute the necessary documents.

Property assessment disputes between New York City and watershed communities have been a recurring issue in the region. The city owns extensive acreage throughout Putnam and Westchester counties to protect the reservoirs and waterways that make up its drinking water supply.

Those properties are an important component of the local tax base. Changes to their assessed values can affect the amount of property tax revenue collected by municipalities and school districts, although the financial impact of this particular settlement on Carmel taxpayers has not yet been established.

Town Supervisor Mike Cazzari said he did not know how much total revenue would be lost as a result of the settlement but noted that it would have to be made up elsewhere. He said taxpayers would likely see the impact of that lost revenue on their tax bills in September 2027.

The town of Carmel lies within the Croton watershed, part of New York City's water supply system. The watershed includes portions of five Putnam County towns: Carmel, Kent, Patterson, Putnam Valley and Southeast.