2013-02-01~ ~ 'STENGER, ROBERTS,
DAVIS & DIAMOND, LLP
Attorneys and Counselors at Law
1136 Route 9
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Wappingers Falls, New York 12590 ~--u ~=:%'' `~ ~ ~~ '=
(say) 2ss-2ooo FEB 01 2013
FAX (845) 298-2842 January 31, 2013
www.srddlaw.com TOl~~N Q~' °~~J~,~,PPINQER
e-mail: info~srddlaw.com BY FASCIlVIILE 845-227-6154 T~ ~~~~ ~~9 ~ ~ ~~ R~
AND FIItST CLASS MAiL
Kenneth M. Stenger
Capital Market Advisors, LLC
Albert P. Roberts North Hopewell Plaza
Thomas R. Davis 1075 Route 82 -Suite 4
Hopewell Junction, New York 12533
Stephen E. Diamond Attention: Ms. Beth Ferguson
Joan F. Garrett""
Re: Town of Wappinger
Pending and Threatened Litigation
Kevin T. McDermott
Angel I. Falcon Dear Ms. Ferguson:
James P. Horan""`*
Pursuant to your email request of January 29, 2013, the following is the status of
Lisa M. cobb Material Pending or Threatened Litigation, Claims and Assessments which could
M. Ellen O'Sullivan have a material effect on the financial position of the Town of Wappinger, as
known to the best of my knowledge through the date of this letter.
Marina O'Neill
Melissa A. Manna-Williams Please be advised that Tax Certiorari proceedings have been assigned to Scott L.
Volkman, Esq., formerly of Gellert & Klein. Scott Volkman has joined our firm
"Of Counsel" as of January 1, 2013. I have no knowledge of the validity of any of
OF COUNSEL the Tax Certiorari claims that were or are pending against the Town. I am
Scott L. Volkman forwarding a copy of this letter to Scott so that he may respond appropriately to
Karen MacNish you,
Please be advised that upon information and belief there are several tort actions
PARALEGALS pending against the Town of Wappinger .which aze being defended by counsel
sands Oakley assigned by the Town's insurance carriers. I am unawaze of the exact number,
Dawn M. Paino nature, status or probability of success with respect to any of those actions.
_ ccoslNC cooRDINATOR ___...-P---ENDING OR--THREATENED LLTIGATION_ _ . .. _ _ ..-- --.__.._._._.. _-.----.-- - - -..----- -. - .. --
Maria L. Jones (Excluding Unasserted Claims and Assessmentsl:
I hereby report as of the date of this letter, to the best of my knowledge, the only
• ALSD ADMR7ED IN FL b MA
-ALSDADMITTEDINCT material Pending or Threatened Litigation matter 711 which the Town of
^`~°"°M"~'~'""' Wappinger is or may be named as a parry is the case listed below.
O:\Wappinger\Town Board\PendingLitigation(.0060)\O1-30-131etter to Capital Market Advisors.doc
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January 31, 2013
Capital Market Advisors, LLC
PETNY (Public Entity Trust of New York Deficiency
For the years 2004 through 2007, the Town of Wappinger had been a participant in the Public
Entity Trust of New York, a self insured Trust which was to provide the Town with Workers'
Compensation coverage for its employees. The Trust was terminated in August 2007 by the New
York State Workers' Compensation Board. The Workers' Compensation Board then hired an
independent accounting firm to conduct an audit of the books and records of PETNY and to
calculate what appeared .to be significant deficiencies necessary to cover outstanding workers'
compensation claims of the employees of the constituent municipalities. The audit was
conducted by Lumsden & McCormick, LLP, who estimated the PETNY deficiencies to be
approximately $7,557,515.00 and further determined that the Town of Wappinger share of said
deficiency is $283,752.78.
This matter was previously reported in my letter dated March 7, 2012. As previously indicated,
the Town has vigorously opposed payment of the sum and had entered into an interim Tolling
Agreement by which the applicable statute of limitation would be tolled pending the negotiation
of the amounts due. However, since last reported, the Workers' Compensation Board has failed
to provide requested information and has failed to provide required accounting analysis of the
purported sums due. The Town of Wappinger, along with several other members of PETNY, has
ceased paying the Workers' Compensation Board pending the outcome of the required
accounting analysis. Furthermore, there have been two lengthy court decisions issued indicating
that the Workers' Compensation Board's determination of deficiency is inconsistent with
applicable law.
The matter is still pending and the Town of Wappinger, along with the other constituent
municipalities, are awaiting further responses from the Workers' Compensation Board.
I know of no other material claims or actions pending or threatened, brought or anticipated to be
brought against the Town.
UNASSERTED CLAIMS AND ASSESSMENTS
This letter includes matters that existed as of January 31, 2013.
- ~ - - -The--undersigned knows of no-other-unasserted-claims ~or assessments consider-ed to-be-probable - - - ~ - -
of assertion and/or if asserted, would have a possibility of an unfavorable material outcome.
However, in the course of performing legal duties for the Town of Wappinger with respect to
O:\Wappinger\Town Boazd\PendingLitigation(.0060)\01-30-13 letter to Capital Mazket Advisors.doc
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January 31, 2013
Capital Market Advisors, LLC
a matter recognized to involve an unasserted possible claim or assessment that may call for
financial statement disclosure, and I have formed a professional conclusion that the Town should
disclose or consider disclosure concerning such possible claim or assessment, as a matter of
professional responsibility to the Town of Wappinger, I will so advise the Town and will consult
with the Town concerning the question of such disclosure and the applicable requirements of
Statement of Financial Accounting Standards No. 5.
There are no other potential liabilities or loss contingencies that are required to be disclosed or
accrued in the financial statements, other than the abovementioned matters.
There are no other potential liabilities or loss contingencies which in my professional judgment
are required to be disclosed or accrued in the financial statements. All contingent liabilities set
forth above are as of the date of this correspondence. The scope of this letter includes litigation
commenced against the Town to present, except as noted above.
To the best of the knowledge of the undersigned, there are no actions that have been commenced
against the Town, or threatened to be commenced against the Town, nor are there any actions
pending which would subject the Town to any monetary payment or financial loss, except as
above stated.
The undersigned knows of no other unasserted claims or assessments considered to be probable.
Very truly yours,
STENGER, ROBERTS, DAVIS & DIAMOND, LLP
ALBERT'P. ROBERTS
APR/so
cc: Hon. Barbara A. Gutzler, Supervisor (by email)
Hon. Christine Fulton, Town Clerk (by email)
Scott L. Volkman, Esq. (by email)
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