RSS 2.0 FeedFebruary 10, 2011, Freeport-Baldwin Leader
Water Works settlement concerns village board
Lengthy discussion over property settlement.
What seemed like a relatively simple agenda meeting with no public comment on Monday turned into a lengthy discussion over an issue relating to the village’s debt in a legal settlement with Water Works Realty Corp., which was tabled even before most of the discussion by audience members even began.
Village Attorney Howard Colton presented a resolution for a $2.82 million serial bond or bond anticipation note (BAN) in connection with its payments in a settlement claim by the corporation and Gary Melius.
For readers who may be in the dark about the issue, including most of those attending Monday’s board meeting, in September 2009 the village settled a lawsuit brought by Melius against Freeport and Nassau County over his contention that the Brooklyn Water Works property valuation was too high. The issue arose under the Glacken administration.
Since it was a legal matter, details of the behind-the-scenes litigation proceedings were not discussed at any public meetings of the board during the entire period of the proceedings, but Mr. Colton said at one point that the issue was discussed “in four or five executive sessions in excess of 10 hours.”
The county settled its part of the suit for $500,000. The cost to Freeport was $3.5 million.
Mr. Colton explained that the reason for the sudden introduction of the resolution was to take advantage of a drop in BAN interest rates that could save the village $500,000 over the next two years. He said the savings could be used to offset tax certiorari payments.
After the two-year period the bond anticipation note would be converted to a regular bond, and there would be a $1.8 million balloon payment in the next three years.
Trustee William White quickly expressed misgivings about the action. “Something’s not right here, Mr. Colton,” he said, noting that back-up correspondence and material from several department heads were coincidentally all dated February 4.
“This settlement cost the taxpayers $3.5 million,” Mr. White continued. “Nassau County also was sued and settled for only $500,000…This is a budget issue and should be done with some thought. You say it has to be done tonight but there has been no discussion about this, no deliberations.”
He urged that the board should “come up with a long-term bonding plan that’s not slipshod.”
But Mayor Andrew Hardwick replied that the issue about the property had already been discussed. “You were there for the entire process,” he responded. “When the federal court judge gave the property back, you sat there with the risk management people who told us what the future looked like. We will lose half a million dollars for no reason.”
But there was no motion to vote on the resolution and Mr. Colton announced it would be tabled.
An audience member asked whether the issue could be discussed during the meeting.
In response, Trustee Robert Kennedy then made a motion to allow public discussion, which received unanimous board approval.
Jim Butler asked that, since the issue had already been settled, “Why is it coming up now?”
The mayor responded that the reason concerned how the money would be paid on the settlement. “We have a chance to save $500,000,” he said.
But Mr. Butler replied that the amount of long-term debt that would be incurred was not being considered.
Peggy Lester, a Nassau Avenue resident, complained, “I don’t appreciate seeing a bond being floated when I can’t get my road fixed by putting out a bond with matching funds. A $2.8 million bond would go a long way in this village. If you can bond this you can bond my road.” She added, “This doesn’t improve the quality of my life; fixing my road does.”
“All of a sudden, I’m finally hearing some of the pieces of this case,” said Pat Lewis. She noted that when the case first arose, Mr. Melius had mailed copies of his assessment to every resident in the village.
Alan Jay spoke critically of Mr. Melius and urged the board to “settle (the issue) as best we can and learn from it.”
Stephen Malone, former deputy village attorney in the Glacken administration, said the lawsuit came about because of “a defective Nassau County tax deed.
“The county should have been the one with the larger liability, not Freeport,” he said. “We did nothing wrong as a village on this matter.”
Mr. Malone expressed concern about how future fluctuations in the interest rates could adversely affect the debt. “It makes no sense,” he said. “We don’t know what the interest rates will be.”
Michael Pomerico questioned Mayor Hardwick’s friendship with Mr. Melius and said it was “not appropriate for this forum.” He asked the mayor if he would recuse himself from voting on the issue. Mr. Hardwick did not respond to his statement, but said at another point, “I’m friends with a lot of Freeporters who have businesses here. But it doesn’t negate my obligation to the citizens of this village.”
Mr. Colton cautioned that political discussions should be avoided and limited only to the bonding issue.
Kelly Martinez asked if the amount of the settlement had been budgeted in the previous year and why bonding wasn’t considered for other projects such as street repair.
Mr. Colton replied that settlement payments had not been budgeted last year and explained that road projects are topics still being discussed as part of the village’s capital plan. He added that the plan “has not been finalized at this time”
Resident Michael Raab demanded that the board contact the state attorney general’s office and investigators at the federal level to investigate the entire case.
Mayor Hardwick replied that he had requested such an investigation “a long time ago.”
As Mr. Raab’s time limit had expired, he continued to press the issue and two police officers stationed at the entrance to the meeting room approached Mr. Raab who reluctantly proceeded to take his seat.
The officers followed him and ordered Mr. Raab to leave the room. A perplexed Mr. Raab, apparently unfamiliar with the recently implemented policy of evicting audience members who speak without permission from the seats, questioned their action but proceeded out of the room at the urging of other audience members.
A final speaker, Jim Caracciolo, praised Mayor Hardwick for “the great job you are doing. You came and took on a difficult job. Nassau Avenue didn’t start falling apart in just a year and a half.”
He continued, “This administration wants to have this village move forward.”
Deputy Mayor Carmen Pineyro noted that the board has been surveying the roads “to see where major road repairs are needed,” and that the capital plan has not been finalized yet.
Mayor Hardwick concluded the discussion by stating that “these types of discussions are not only necessary, but healthy. This is what it’s all about.” He added that “there should have been a lot more dialogue before the village got into nearly $100 million worth of debt.”
Other business
In other actions, trustees:
• Approved an agreement with P&G Fleet Services Inc., of Holtsville for repair services for the Electric Department of up to $30,000.
• Transferred $117,000 in the budget for the roof replacement project at the Freeport Memorial Library. A $58,000 library grant will help offset the cost.
• Approved a $540,000 contract with Frank Robustello and Sons Incl. of Rockville Center for a road improvement project for Gill Avenue, Summers Place, Bond Street and Powell Street.
• Approved the purchased of two bay doors for Fire Department Hose Co. No. 1 on Southside Avenue from Emergency Door Repair of North Massapequa at a cost of $5,100.
• Adjusted a sanitation and disposal fee for 281 Westside Avenue, from $900 to $465.
Trustees adjourned to executive session following the end of the meeting. Next regularly scheduled meeting will be Feb. 28.
