Poloncarz, Republican Legislators At Odds Over Settlement

9:58 AM, Feb 20, 2012   |    comments
  • Share
  • Print
  • - A A A +

BUFFALO, N.Y. - Erie County has until March 5th to pay a $7 million settlement to a woman who nearly drowned in a Buffalo pool operated by the county.

Erie County Executive Mark Poloncarz says Republican legislators are blocking his lawsuit settlement payment plan, claims he laid out in a press release Thursday afternoon.

Poloncarz accuses Republicans of "putting the County at risk of incurring hundreds of thousands of dollars in interest penalty charges and jeopardizing its ability to pay settlements related to other pre-existing lawsuits."

Poloncarz says that if an agreement doesn't happen soon, the county could also owe about $200 thousand in interest penalties; a claim Republicans say isn't valid.

"First off, (Poloncarz) has $5.5 million of the $7 million in risk retention," said Legislator Kevin Hardwick (R). "There's no question, administration officials have admitted, they could find the other million and a half."

But Hardwick says it shouldn't come to that, because Republicans have already offered to agree to allow Poloncarz to use a low-interest bond to pay for $4 million of the settlement, if the county pays the rest in cash. Hardwick adds he was surprised by Poloncarz's press release, which blasts Republican legislators.

"Up until this point, we've had seven good weeks, in fact our discussions or meetings that we've had with him on this subject have been good," said Hardwick.

Through a spokesman, Poloncarz declined to answer questions from 2 On Your Side, instead saying he wanted the press release to "speak for itself."

"I am surprised by that press release, because we have been the ones that have gone more than halfway," said Hardwick.

Initially, Hardwick says Republican legislators did not want the County to borrow any money to pay the settlement, rather, they wanted to use the risk retention fund, which was created for instances like this, to pay it.

" We said in the spirit of compromise, we'll go off our position of zero, we won't go to your seven, but we'll go three, and then eventually we said four," said Hardwick.

Poloncarz needs at least two republican legislators to agree to his plan to get it approved, which Hardwick says isn't likely to happen.

"This is a fight worth fighting, because again you're talking about getting us back into that culture of debt," said Hardwick.

Read County Executive Mark Poloncarz's full press release here:


In Washington-Style Display of Political Gamesmanship, GOP Legislators' Refusal to Compromise Could Cost County Hundreds of Thousands in Interest Penalties and Put Risk Retention Fund in Jeopardy

Erie County, NY- Today, County Executive Mark C. Poloncarz blasted the Erie County ("County") Legislature's Republican Caucus for their display of political gamesmanship at its worst in blocking a plan to pay a $7 million legal settlement and putting the County at risk of incurring hundreds of thousands of dollars in interest penalty charges and jeopardizing its ability to pay settlements related to other preexisting lawsuits.

"In rejecting the compromise plan I have put before them, the Legislature Republicans have made it entirely clear they are more interested in 'Washington-Style' political gamesmanship than acting in a fiscally responsible manner and getting this settlement paid before the March 5th deadline," said Poloncarz. "It is time to put petty politics aside and do what is in their constituent's best interests before it is too late."

In early January, Republicans rejected the prior administration's initial request to borrow $7 million in a low-interest judgment bond to cover the cost of the lawsuit settlement, instead putting forth a plan that would designate $3 million from the County's risk retention fund ("Risk"), while borrowing the rest ($4 million). While Poloncarz has come to the table several times offering compromises of $6 million borrowed and $1 million Risk, $5.5 million borrowed and $1.5 million Risk and now today, $5 million borrowed and $2 million Risk, Republicans have refused to compromise and move from their initial proposal.

Poloncarz added, "While I have come to the table several times, the Republicans have unreasonably refused to compromise based on one bogus claim after another. The latest claim is that they are saving taxpayers hundreds of thousands or millions of dollars in interest charges associated with the judgment bond. In reality, their hardline stance is over a little more than $4,000 a year, while they insist on gambling with about $200,000 in interest penalty charges. How is that a compromise or fiscally responsible?"

A $5 million judgment bond would require a total debt service of $301,958.33 (which includes interest and the cost of issuance), while a $4 million bond's debt service would cost $260,250.00, a difference of $41,708. Over the 5 year life of the bond, that would amount to $8,341.67 a year. Coupled with the $4,000 in interest lost due to non-investment of $1 million in conjunction with the Republican's plan, the net taxpayer savings are reduced to $4,341.67 a year.

As per the terms of the stipulated settlement, if the $7 million settlement payment is not remitted to the plaintiff by the March 5, 2012 deadline, the County will immediately incur a $155,342 interest penalty with an additional $1,726.03 in penalty charges each day thereafter. The legislature will have one last opportunity to approve a plan on February 23, 2012, before the payment deadline. If a plan is still blocked by Republican inaction, the next Legislative Session will not be until March 15, 2012, ten days after the deadline, which would mean at least $172,602 in penalty charges would be assessed before a potential resolution.

While designating an additional $1 million out of Risk (as the Republicans have proposed) rather than borrowing does not lead to any real interest savings, it also has the negative effect of jeopardizing the County's ability to pay settlements for the hundreds of preexisting lawsuits initiated by the previous administration. Currently, the risk retention fund has approximately $5.5 million and under the Republican proposal that would be reduced down to $2.5 million.

Poloncarz concluded, "Not only does their unreasonable refusal to compromise not save the taxpayers any actual interest, but it also puts in jeopardy the County's ability to self-insure itself against lawsuits by depleting the fund to pay settlements below what is necessary. The Republicans are holding this agreement hostage and putting the County at an unnecessary risk just to prove a point. I would think they would hold taxpayer dollars in higher regard than that."

















Most Watched Videos