Saturday, November 19, 2011

valhalla loses WESTHELP lawsuit

On April 26, 1990, Westchester County (County) entered into a 30-Year “Ground and Facilities Lease Agreement” (Master Lease) with the Town of Greenburgh (Town) that would commence upon the expiration of a 10-year lease agreement between the County and the Westchester Housing Enterprise for the Less Privileged (WestHELP) for a homeless housing facility. At the end of the 10-year lease term the homeless housing program would end and the County would lease the facility to the Town for a period of 30 years. The facility was to be used for low-to-moderate income family/senior citizen housing.

Near the impending expiration of the original lease agreement, the County continued to have a need for the homeless housing facility. The County requested a modification of the “Ground and Facilities Lease Agreement” with the Town, and asked the Town to sublease the facilities to WestHELP for another 10 years. Under the terms of the contract WestHELP would pay rent to the Town. On September 18, 2001, the County, Town and WestHELP entered into a “Sublease and Homeless Housing Facilities Agreement” (Sublease). The Town subleased the facilities to WestHELP for another 10 years. In consideration, the Town would receive rental payments of $1,200,000 for the initial period from September 18, 2001 to September 30, 2002, and $1,222,844 each year for the remaining term of the agreement.

In order to alleviate some of the perceived financial burden supposedly placed on the community in which the homeless housing facility was located, the Town entered into an “Educational Grant Agreement” with the Valhalla Union Free School District (District) to provide up to $650,000 annually for the development and implementation of enhanced educational programs. The “Educational Grant Agreement” stipulates that grant monies may not be used to supplement or pay for the standard educational activities engaged in by the District, but rather must be used to fund academic programs, the purpose of which is to provide educational benefits not otherwise available in the District.

The State Comptroller's office determined that the town agreement with the school district was invalid. The town immediately stopped paying the school district the dollars that had been agreed to--after we were advised that the agreement was not authorized by state law. The Comptroller stated that

The Town can only fund programs that are for Town purposes. The general function of providing education to children is a school district, not a town, purpose.1 Since the 2003-04 school year, the Town has provided more than $1.8 million of funding to the District. The programs funded by the educational grant that the Town makes to the District do not further Town purposes, but rather further the purposes only of the District. Therefore, the grant cannot be made in the manner that the Town currently follows. Moreover, even if the funding had furthered proper Town purposes, none of the funded programs are made available to the surrounding communities within the Town and, consequently, benefit only those Town residents who coincidentally reside within the District.

The Valhalla School district filed a lawsuit in NY State Supreme Court--objecting to the fact that the town was complying with the state comptroller's decision. In a decision just released, a NYS Supreme Court Judge denied Valhalla's claim in the decision--(link to decision is below). The court indicated that the town is entitled to recover monies previously paid to the Valhalla School district. Over $1.8 million had been paid out to the Valhalla schools previously.

link to decision below:



gary said...

Two town residents, Bob Bernstein and Herb Rosenberg yesterday won summary judgment in New York State Supreme Court dismissing the Valhalla School District's $4.5 million claims against the Town for breach of contract and they have also won summary judgment for the Town on their $1.8 million counterclaim for indemnification from the school district for the return of all funds illegally disbursed by the Town under the so-called "grant agreement" under which Feiner illegally agreed to give away up to $6.5 million of town revenues.

Mr. Bernstein, the former ECC president, and Mr. Rosenberg, a former village justice from Dobbs Ferry, last year successfully intervened in the lawsuit that Valhalla brought against the Town after arguing that Feiner's s support for the illegal grant created a conflict of interest in the town attorney's office that prevented the Town from fairly representing the Town's taxpayers. Among other things, the Town had allowed Valhalla to submit a copy of the grant to the court without including the indemnification provisions that were the basis of the counterclaims that Mr. Bernstein and Mr. Rosenberg brought.

The court found the grant to be illegal and unenforceable and further found that the risk of illegality was assumed by the school district when it agreed to the indemnification provision in the original grant, as well as when it agreed to a second indemnification provision when the grant's legality was under review by the state comptroller. The state comptroller subsequently ruled the grant to be illegal, but its legal opinion was not legally binding on the parties.

Feiner agreed to the Valhalla grant in 2004 as a means of rewarding town residents of the Valhalla school district who lived near a homeless shelter on the campus of Westchester Community College for not opposing Feiner's decision in 2001 to allow the shelter to remain in operation for an additional ten years in exchange for $1.2 million a year in rent. The court noted, among other things, that the grant served a school purpose, not a town purpose, that the town had no legal authority in New York to give away town revenues for a school purpose, and that, in any event, the grant could never have served a town purpose because, as the interveners pointed out, two thirds of the residents of the school district do not even live in Greenburgh.

The court did not enter judgment yet for the specific amount of the counterclaim because of minor discrepancies in the amount. However, the school district conceded that it had received $1,864,151.80, which means the amount of the judgment, when it is entered, will be at least that amount.

Terry Williams said...

Mr. McCormack was one of the leading proponents of this grant, while Mr. Astorino, who served on the Westchester County Board of Legislators, voted at least once to renew the awarding of the money to the Valhalla Union Free School District; Sue Swanson, who he succeeded in that position, introduced the initial legislation. For a person who positions himself as an independent voice, it would have spoke volumes about Mr. Astorino’s character and intellect (it’s not rocket science that this was illegal) if he had voted no while on the board.

Given the current fiscal crisis facing the county, and the potential fines for violating the affordable housing settlement with the federal government, can we afford to have Messrs. McCormack and Astorino in leadership positions? Their track record says no; just ask the taxpayers in the Valhalla School District who will have to foot the bill.

Mr. Astorino, who ironically ran of a platform of fiscal responsibility, should ask Mr. McCormack to resign immediately. And if Mr. Astorino fails to do so, Mr. McCormack should tender it. He has failed miserably in his duties as communications director, chif of which is to protect the reputation of the county executive. As for Mr. Astorino, he would be well advised to re-examine who is giving him advice, lest he be taken for a puppet.

Anonymous said...

Mr. Williams, who else besides Mr. Astorino voted for this deal? Which Democrats should join in resigning, besides Greenburgh's Mr. Feiner and Ms. Juettner, the only two remaining on the Town Board who voted for it.

gary said...

feiner and juettner should both resign or be charged with violating their oath of office to defend the constitution of the state of new york as well as for their violation of the us constitution in the fortress bible case.

Terry Williams said...

To Anonymous: Steve Bass and Eddie-Mae Barnes, both of whom are no longer on the board, voted for this, although they have both admitted they were wrong; not excusing them, but just providing full disclosure. Francis Sheehan was on the board the second time that it came up, and he voted in favor. He has since admitted that it was wrong to do so.

Greenburgh County Legislators who voted to transfer the lease payments from the county to the town for the purposes of paying off the Valhalla School District, were Sue Swanson, Tom Abinanti, now an Assembyman, and former chair Lois Bronz. Former County legislator from Yonkers, Andrea Stewart Cousins, who now reps Greenburgh in the state senate, also voted for this.

gary said...

abinanti also voted for taxter ridge and supported feiner against the fortress bible church

feiner and abinanti - career politicians