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2010-2562010-256 Resolution Authorizing the Supervisor And/Or the Attorney to the Town to Enter into a Memorandum of Understanding Tolling the Statute of Limitations in Connection with Potential Litigation Involving PETNY At a regular meeting of the Town Board of the Town of Wappinger, Dutchess County, New York, held at Town Hall, 20 Middlebush Road, Wappingers Falls, New York, on August 16, 2010. The meeting was called to order by Christopher Colsey, Supervisor, and upon roll being called, the following were present: PRESENT: Supervisor Councilmembers ABSENT: Christopher J. Colsey William H. Beale Vincent F. Bettina (arrived at 6:26PM) Ismay Czarniecki Joseph P. Paoloni The following Resolution was introduced by Councilman Bettina and seconded by Councilwoman Czarniecki. WHEREAS, the Workers' Compensation Board (WCB) has assumed the responsibility for the administration and distribution of assets of Public Entity Trust of New York (PETNY), a municipal group self insurance trust in which the Town of Wappinger was formerly a constituent member; and WHEREAS, PETNY is alleged to be insolvent; and WHEREAS, the WCB has levied assessments against all of the former constituent members of PETNY; and WHEREAS, the Town of Wappinger, along with several other constituent members, has disputed the assessments, alleging that the methodology adopted by the WCB is contrary to the New York State Constitution, New York State Statutes and New York State Regulations applicable to Workers' Compensation; and WHEREAS, the WCB and several former members of PETNY have jointly agreed on a Memorandum of Understanding (MOU) which would toll the applicable statute of limitations, that is extend the time within which the Town of Wappinger and the other former members of PETNY may bring a legal challenge to the assessments made by the WCB; and WHEREAS, as consideration for the tolling of the statute of limitations, the WCB will require the former members to pay fifty percent (50%) of the 2010 Final Assessment Charges levied against the Town of Wappinger as the rate corresponding to the longest repayment plan available, to wit, $3,397.41 per month, during the term of the agreement. NOW, THEREFORE, BE IT RESOLVED: 1. The recitations above set forth are incorporated in this Resolution as if fully set forth and adopted herein. 2. The Town Board Members have read the MOU and understand the provisions thereof. 3. The Town Board hereby authorizes the Town Supervisor, Christopher J. Colsey, or Attorney to the Town, Albert P. Roberts, to execute the MOU by and on behalf of the Town in substantially the form attached hereto. 4. The Town Board further authorizes the Town Attorney, Albert P. Roberts, to negotiate any amendments to the MOU deemed necessary to preserve the Town's rights to bring an appropriate action to challenge the methodology adopted by the WCB. The foregoing was put to a vote which resulted as follows: CHRISTOPHER COLSEY, SUPERVISOR Voting: AYE WILLIAM H. BEALE, COUNCILMAN Voting: AYE VINCENT F. BETTINA, COUNCILMAN Voting: AYE ISMAY CZARNIECKI, COUNCILWOMAN Voting: AYE JOSEPH P. PAOLONI, COUNCILMAN Voting: AYE Dated: Wappingers Falls, New York 8/16/2010 The Resolution is hereby duly declared adopted. PHN C. MASTERSON, TOWN CLERK MEMORANDUM OF UNDERSTANDING This Memorandum of Understanding ("MOU") is between the Workers Compensation Board and those certain former members of the Public Entity Trust of New York (PETNY) who have executed this MOU. WHEREAS, on or about August 2, 2007, the Board assumed the administration and final distribution of the assets and liabilities of PETNY; and WHEREAS, upon the Board's assumption of the administration and final distribution of PETNY's assets and liabilities, the Board commissioned a forensic accounting of PETNY with the stated purpose of verifying PETNY's accumulated deficit, as determined by Lumsden and McCormick, LLP, and allocating the accumulated deficit among the former employer members of PETNY (PETNY Forensic Accounting); and WHEREAS, after the Board's assumption of PETNY's assets and liabilities, the Board determined pursuant to 12 NYCRR §317.20 that PETNY was insolvent and, pursuant to Workers' Compensation Law (WCL) §50(5)(fl, the Board has been meeting the obligations of PETNY out of its administrative fund and simultaneously obtaining a cash flow by assessing the self insurance community pursuant to WCL 50(5)(g); and WHEREAS, the PETNY Forensic Accounting has been completed and the Board has provided to all former members of PETNY a copy of the Deficit Reconstruction and 2010 Assessment, dated April 6, 2010, by mailing it to the PETNY members, and has made available on its website a copy of the April 6, 2010 Forensic Analysis of the PETNY Trust; and WHEREAS, the Board has also served all former members of PETNY with invoices detailing their alleged pro rata share and joint and'several liability for PETNY's alleged accumulated deficit (2010 Final Assessment), as determined by the PETNY Forensic Accounting and adopted by the WCB; and WHEREAS, annexed hereto as "Attachment A" is a list of former member(s) of PETNY (Former PETNY Members) who dispute their liability and/or the amounts assessed in connection with their membership in PETNY as set forth in the PETNY Forensic Accounting and the 2010 Final Assessment and assert that the methodology adopted by WCB to assess deficiencies violates the New York State Constitution, the Workers' Compensation Law, the Local Finance Law, and 12 NYCRR Part 317 WHEREAS, the Former PETNY Members seek a thorough review of the PETNY Forensic Accounting and the 2010 Final Assessment by expert actuaries, claims reviewers or other appropriate professionals to determine the accuracy of the amounts assessed and wish to explore alternative allocation methods relative to the deficit of PETNY; and WHEREAS, the Former PETNY Members seek the production of necessary documentation to permit the review of the PETNY Forensic Accounting and the 2010 Final Assessment contemplated by the whereas clause above and wish to avoid the time, effort and expense of litigation, including, but not limited to, Article 78 proceedings, actions for declaratory judgment or other discovery proceedings and/or FOIL requests to obtain same; and WHEREAS, the Board believes that the allocation methodology as contained within the PETNY Forensic Accounting and 2010 Final Assessment is enforceable as against the Former PETNY Members but is in need of a steady flow of funds from the former employer members of PETNY, including the Former PETNY Members, to meet the obligations of PETNY; and WHEREAS, the Board and the Former PETNY Members wish to toll any applicable Statute of Limitations, in order to provide the Board and the Former PETNY Members with the opportunity, inter alia, to perform additional analysis and acquire additional information as hereinafter set forth in an effort to resolve their differences without resort to litigation; and WHEREAS, the Board and the Former PETNY Members wish to avoid the time, effort and expense of litigation regarding payment of the 2010 Final Assessment by the Former PETNY Members; and WHEREAS, both the Board, and the Former PETNY Members wish to preserve all of their legal and equitable rights with respect to the Board's assessment and the execution of this Agreement is done without prejudice to the rights of any party hereto NOW THEREFORE, in consideration of this Agreement and for other good and valuable consideration, receipt of which is hereby acknowledged, the Former PETNY Members, as reflected in Attachment A, and the Board hereby agree as follows: 1. Tolling of Limitations Periods. The time period during which this Agreement is in effect, plus 45 days, commencing, for each Former PETNY Member on the date it executes this MOU, shall not be included, asserted, or relied upon in any way in computing the running of the time under any applicable statute of limitations, or by way of laches, in defense of any administrative and/or civil action brought by the Board or its agents against the Former PETNY Members or brought by Former PETNY Members against the Board, including, but not limited to, actions arising under Article 78 of the CPLR. Nothing in this Agreement shall have the effect of reviving any claims which were barred by the passage of time or the statute of limitations as of the execution date hereof. For purposes of seeking collection of any assessments, or challenging the methodology employed by the WCB or the amounts assessed to a particular member, the parties agree the decision of the WCB at issue was finalized for purposes of a potential Article 78 challenge on May 11, 2011. 2. Standstill Commitment by the WCB. During the time that this Agreement is in effect the Board and its agents will not commence an administrative and/or civil action against any individual Former PETNY Member who executes this Agreement to collect the 2010 Final Assessment or any subsequent assessment so long as that Former PETNY Member is in compliance with the obligations of Paragraph 9 herein. The failure of one or more Former PETNY Members to comply with the obligations of Paragraph 9 shall not trigger an administrative and/or civil action by the Board or its agents against Former PETNY Members who are in compliance with Paragraph 9. 3. Standstill Commitment by Former PETNY Members. During the time that this Agreement is in effect, the Former PETNY Members will not commence any civil action and/or proceeding pursuant to CPLR Article 78 against the Board to challenge the PETNY Forensic Accounting, the amount of the 2010 Final Assessment or for any other reason and will not file FOIL or other information requests with the Board relative to the PETNY Forensic Accounting and/or the amount of the 2010 Final Assessment. 4. Other than the commitments made herein, both the Board and the Former PETNY Members reserve all other rights, defenses and claims that may be asserted in administrative actions, civil actions and/or proceedings pursuant to CPLR Article 78, or any other applicable statute or regulations including actions for declaratory judgment, except as modified by Paragraphs 2 and 3 above. 5. Term of Agreement. This agreement shall expire on April 1, 2011 unless either party terminates the agreement pursuant to Paragraph 7 below or renews the agreement pursuant to Paragraph 6 below. 6. Extension of Agreement Term. The Former PETNY Members and the Board may agree in writing to extend the tern of this Agreement. 7. Termination of Agreement. Either the Former PETNY Members, acting jointly through counsel, or the Board may terminate this Agreement by giving ninety (90) days prior written notice of such termination to the other party hereto. 8. Notices. Any notice given pursuant to this Agreement shall be made by any delivery with proof of service, addressed to the other party as hereinafter set forth, or to such other address as a party may designate, and shall be deemed given upon mailing or hand delivery. a. Any such notice given to the Board shall be addressed to: Kenneth J. Munnelly General Counsel Workers' Compensation Board 20 Park Street Albany, New York 12207 b. Any such notice given to the Former PETNY Members shall be addressed to: Hon. John C. Masterson, Town Clerk Town of Wappinger 20 Middlebush Road Wappingers Falls, NY 12590 Either party may amend this notice provision by providing notice of change of address pursuant to the terms of this paragraph. 9. Monthly Payment of Portion of Assessment. Each and every one of the Former PETNY Members, shall, within thirty (30) days of the execution of this Agreement, and monthly each and every month thereafter, so long as this Agreement is in effect, remit payments to the Board in an amount equal to fifty percent (50%) of the 2010 Final Assessment charges against that Member, at the rate corresponding to the longest repayment plan available to such Former PETNY Members. All funds received pursuant to this paragraph shall be applied to reduce the principal of the amount claimed owed by the Board by each Former PETNY Member, as set forth in the PETNY 2010 Final Assessment for each Former PETNY Member. The amount due monthly from each Former PETNY Member is shown on the attached Attachment A 10. Interest and Penalties. All Former PETNY Members who begin and continue to make the monthly payments set forth in Paragraph 9 above, do not seek any recoupment of such payments except pursuant written agreement or to a final court order determining the legality of the PETNY 2010 Final Assessment, and comply with all other terms of this Agreement, shall not be assessed by the Board or its agents in any administrative and/or civil action(s): (i) any interest, collection fees and/or penalties associated with the State Finance Law or any other law or rule relative to the payments made pursuant to this Agreement; (ii) any interest for the period of this agreement. 11. Discovery. The Board shall provide the attorneys, expert or experts selected by the Former PETNY Members with access to all documentation reasonably required by a set of duly accredited and licensed accountant, attorneys, actuaries and claims reviewers (herein collectively the "Experts") to review the PETNY Forensic Accounting and 2010 Final Assessment, as well as any subsequent assessment, for accuracy as against all former employer members of PETNY as a whole and the Former PETNY Members in particular, subject to the restrictions on disclosure and confidentiality protections set forth below, and to support any Former PETNY Members arguments regarding the proper allocation methodology and the amount of allocations. The actuarial Experts selected shall be a fellow or associate of the casualty actuarial society, the claims Experts selected shall have had at least seven years experience performing independent claim reviews and/or claims audits in the capacity of an independent claims management consultant. The review performed by the Experts shall consist of the production of the following documents and/or the providing of access to said documents at the following times and in the following manner: A) Claims Review: Not later than November 15, 2010, the Experts shall provide the Board with a proposed process to be used in connection with the granting of access to PETNY's claims reserve data contained at the office of the Board's third party administrator in Buffalo, New York. Said process must include the execution of a confidentiality agreement, to be drafted by the Board and mutually agreed upon by both parties, and a detailed recitation of the manner in which the Experts plans to prevent disclosure of any and all individually identifiable claimant information contained within the reserve data from public disclosure, including a limitation on written or verbal disclosure to counsel for the Former PETNY Members and disclosure in any subsequent report created. The Board shall evaluate the reasonableness of such process and, not later than January 15, 2011, either approve, propose amendments to, or disapprove, with good faith reasons therefore, such proposed process. In the event of a good faith disapproval, then the parties shall have an additional thirty days in which to arrive at a mutually agreeable process. Within thirty days after the approval of a mutually agreed upon process, the Experts shall be granted access to the reserve data pursuant to the agreed upon process and at an agreed-upon time that will minimize disruption to the Board's consultants and cause no interruption in the provision of benefits to injured workers. Within thirty days of the completion of a final report, such report shall be provided to the Board. B) Updated Loss Run: At least twice, but not more than four times, within ten business days of the receipt of a written request from the Former PETNY Members to the Board, the Board shall provide a summary loss run and detailed loss run for use by the Experts. In the event that this Agreement is extended pursuant to paragraph six (6) herein, then the Board shall subsequently provide bi-annual loss runs to the extent the same are reasonably necessary. Said loss runs shall be redacted to remove all individually identifiable claimant information contained within the loss runs and shall be produced in Excel format unless the loss runs do not exist in Excel format, in which case the Board will provide the loss runs in another mutually agreeable format that will minimize the time and expense of manually inputting data. . C) Accounting Review: Not sooner than November 15, 2010 the Experts shall provide the Board with a proposed process to be used in connection with the granting of access to documents sufficient to review the PETNY Forensic Accounting and 2010 Final Assessment and, to the extent not included within the foregoing, the workpapers prepared by Lumsden and McCormick, LLP, in connection with the PETNY Forensic Accounting; all copies of assessments levied by WCB relative to PETNY, whether or not paid, and any documents demonstrating how said assessments were calculated. Said process must include the execution of a confidentiality agreement, to be drafted by the Board and mutually agreed upon by both parties, and a detailed recitation of the manner in which the Experts plans to protect from verbal or written disclosure to the Former PETNY Members and the Public any and all individually identifiable claimant information contained within the material referenced within this paragraph. To the extent that counsel for the Former PETNY Members will seek access to the Employer Material then counsel to the Former PETNY Members shall execute the same or similar confidentiality agreement executed by the Experts. The Board shall evaluate the reasonableness of such process and, within thirty days of its receipt, either approve, or disapprove, with good faith reasons therefor, such proposed process. In the event of a good faith disapproval, then the parties shall have an additional thirty days in which to arrive at a mutually agreeable process. Within thirty days after the approval of a mutually agreed upon process, the Experts shall be granted access to the Employer Material pursuant to the agreed upon process and at an agreed-upon time that will minimize disruption to the Board's consultants and cause no interruption in the provision of benefits to injured workers. Within thirty days of the completion of a final report, such report shall be provided to the Board. D) Allocation Review: Not sooner than November 15, 2010 the Experts shall provide the Board with a proposed process to be used in connection with the granting of access to documents sufficient to review the appropriateness of the allocation methodology contained within the PETNY Forensic Accounting and 2010 Final Assessment. Said process must include the execution of a confidentiality agreement, to be drafted by the Board and mutually agreed upon by both parties, and a detailed recitation of the manner in which the Experts plans to protect from verbal or written disclosure to the Former PETNY Members and the Public any and all individually identifiable claimant information contained within the material referenced within this paragraph. To the extent that counsel for the Former PETNY Members will seek access to the Employer Material then counsel to the Former PETNY Members shall execute the same or similar confidentiality agreement executed by the Experts. The Board shall evaluate the reasonableness of such process and, within thirty (30) days of its receipt, either approve, or disapprove, with good faith reasons therefor, such proposed process. In the event of a good faith disapproval, then the parties shall have an additional thirty days in which to arrive at a mutually agreeable process. Within thirty days after the approval of a mutually agreed upon process, the Experts shall be granted access to the Employer Material pursuant to the agreed upon process and at an agreed-upon time that will minimize disruption to the Board's consultants and cause no interruption in the provision of benefits to injured workers. Within thirty days of the completion of a final report, such report shall be provided to the Board. 12. CRM Litigation Proceeds. All damages that are recouped from the Board's action against Compensation Risk Managers, LLC, Index # 10288-09 (Albany Cty. Filed Dec. 9, 2009) and that are ultimately allocated to reduce the cumulative deficit of PETNY, will be used first to repay prior statutory assessments relative to PETNY levied upon other self-insured employers; second to repay current statutory assessments relative to PETNY levied upon other self-insured employers; and third to third to reduce the remaining estimated deficit of PETNY. 13. Attorney General Litigation Proceeds. All damages that are recouped and provided to the Board as a result of any action brought, or disposition obtained, by the Attorney General with respect to PETNY, and that are ultimately allocated to reduce the cumulative deficit of PETNY, will be used first to repay prior statutory assessments relative to PETNY levied upon other self-insured employers; second to repay current statutory assessments relative to PETNY levied upon other self-insured employers; and third to reduce the remaining estimated deficit of PETNY. 14. Analysis of Potential Alternate Allocation Methodology. The Board, in consultation with the Former Members of PETNY, shall investigate the feasibility of an alternate allocation methodology based upon actual losses of PETNY. By so doing, the Board does not, in any way shape or form, either implicitly or explicitly, acknowledge or agree that the allocation methodology contained within the PETNY Forensic Accounting and 2010 Final Assessment is unenforceable as against the Former members of PETNY, by reason of the operation of the New York Constitution Article VIII, or any other reason. Moreover, in the event that the Board determines that such an alternate allocation is feasible and actually creates such an allocation, the Board's creation of such an alternate methodology does not require the Board to actually implement such allocation methodology and/or abandon its current methodology, nor does the Board's determination limit or waive any party's right to pursue through administrative or judicial forums a particular allocation. 15. No Third Party Beneficiary. This Agreement is not intended to create and does not create any rights in or benefits to any third party. 16. Effective Date, Counterparts. This Agreement shall become effective upon its execution by the parties hereto, through their respective counsels. This Agreement may be executed in counterparts, each of which shall be an original, but all of which, taken together, shall constitute one Agreement binding on all parties. 17. Use of Agreement. This Agreement may not be introduced into evidence, construed as an admission or otherwise mentioned in any action or other proceeding between the Board and/or its agents and the Former PETNY Members except to enforce compliance with this Agreement, demonstrate compliance with the terms of this Agreement or to establish the Former PETNY Members' agreed upon payment schedule during this Agreement's term. 18. Governing Law. This Agreement shall be governed by the laws of the State of New York, without giving effect to rules of conflict of laws. 19. Authority to Sign Agreement. The signatory on behalf of the Former PETNY Members warrants and represents that it is duly authorized to enter into this Agreement on behalf of the Former PETNY Members set forth on Attachment A. 20. Bi -Lateral Negotiations. The parties acknowledge that this Agreement is the result of negotiations between the parties hereto. It is understood and agreed that both parties shall be deemed to have drafted this document in order to avoid any negative inference by any court as against the party preparing this Agreement. 21. Captions. All captions set forth herein are for ease of reference only and shall not affect the meaning of the paragraph. 22. Amendment. This Agreement may not be amended, modified, or changed except in writing with notice as set forth above. 23. Compliance. For purposes of this agreement, "compliance" shall mean full compliance, provided that neither the Board nor a Former PETNY Member shall be found not to be in compliance until that party has been given the opportunity to cure the defect during a period of ten days from receipt of written notice to its counsel, in the manner set forth in paragraph eight (8). In the event that an individual Former PETNY Member defaults on its payment obligation under Paragraph 9 of this Agreement and fails to cure such default in accordance with this Paragraph then the entire amount due and payable by such Former PETNY Member pursuant to this agreement shall become due and payable immediately and that the Board shall have the option of taking whatever actions it deems appropriate to collect such funds with such actions being in addition to, and separate and apart from, any other remedy at law or in equity that the Board has or may, have with respect to the entire amount owed by such Former PETNY Member in connection with its membership in PETNY. IN WITNESS WHEREOF, the parties have caused this agreement to be signed and intend to be legally bound hereby, as of August 1, 2010. Dated: August [� , 2010 On Behalf of Former PETNY Member By: Al b�+ P, Rob e/I, est- Albe,vk- R 12obes�-t5 fi ei ser Nt1-c em" to Tuv�rl Town of Wappmger 20 Middlebush Road Wappingers Falls, NY 12590 Telephone: Dated: August 03, 2010 Attorney for the Board M Lr"Jx Ke neth J. Munney Esq. General Counsel Workers' Compensation Board 20 Park Street Albany, New York 12207 (518) 486-9564 8/9/2010 ATTACHMENT A Member Name Maximum Monthly 50% of Monthly Payment Plan Payment Payment 1 Town of Wappinger 48 6,794.81 3,397.41 /VA MORRIS ASSOCIATES ENGINEERING CONSULTANTS, PLLC Elks Lane, Poughkeepsie, New York 12601 Tel: (845) 454-3411 Fax: (845) 473-1962 ❑ 64 Green Street, Suite 1, Hudson, New York 12534 Tel: (518) 828-2300 Fax: (518) 828-3963 August 23, 2010 Town of Wappinger 20 Middlebush Road Wappingers Falls, NY 12590 Attn: Christopher Colsey Town of Wappinger Supervisor RE: Carnwath Farms Electrical! and Communication Service Replacement Rebid Results and Recommendation MA# W20807.0 Dear Supervisor Colsey and Town Board: On August 23, 2010, the Town of Wappinger received four (4) bid proposals for the Carnwath Farms Electrical and Communication Service Replacement project; the breakdown of these bids is as follows: Contractor: Bid Price: Alt mate #1: Stoneykill Contracting, Inc $83,200.00 $83,200.00 Peak Construction $90,400.00 $6,000.00 P & D Electric $94,700.00 $76,000.00 R. Costa Electric, Inc. $102,950.00 $89,900.00 This office has completed our review of the bid proposals for the above referenced project. The lowest responsible bidder meeting the bid specifications was Stoneykill Contracting, Inc. with a base bid price of $83,200.00. Included was a bid price for Alternate #1, in which it was requested that the contractors include a price to complete all the work except for all costs associated with the trenching; Stoneykill Contracting, Inc. supplied a bid price for Alternate #1 of $83,200.00. In their bid, Stoneykill explained why the Alternate #1 bid is the same as the base bid. Their explanation is that it was not to their advantage to have outside help providing the trenching, as the size of their excavating equipment would allow them to complete the project in a timely manner (a copy of their fetter of explanation is attached). The bid also included a per cubic yard price of $145.00 for the rock removal. ......................... . Supervisor Colsey and Town Board August 23, 2010 Town of Wappinger Page 2 The bid price submitted from Peak Construction for Alternate #1would appear to be the amount that they feel the cost of the trenching is valued at and therefore their bid price for Alternate #1 would be $84,600.00. This bid amount has no significance in the awarding of the bid to Stoneykill Contracting, Inc. Moms Associates is very familiar with Stoneykill Contracting, Inc and knows them to be a well respected contractor and is qualified to perform the proposed work required for this project. All portions of the bid prepared by Stoneykill Contracting, Inc. appear to have been correctly executed. Based on the above, this office recommends award of the noted contract bid to Stoneykill Contracting, Inc. If you should have any questions regarding the above, please contact me at 454-- 3411 ext. 30 (office) or (14) 475-5749 (cell) Very truly yours, MORRIS ASSOCIATES ?obert J. Gray, PE Engineer to the Town Enc. Cc: Albert P. Roberts, Esq., (via email and fax) Tim Hunt, Stoneykill Contracting, Inc. (via e-mail) John Masterson, Town Clerk, (via email) EAdocuments\T Wappinger\a W2008XW20807 Carnwath\Award Recomendation Electrical Rebid 8-23-10.docx STONEYKILL CONTRACTING, INC. 113 Stoneykill Road, Wappingers Falls, NY 12590 (845) 838-1328 Town of Wappinger 20 Middlebush Road Wappinger Falls, NY 12590 August 23, 2010 Contruction Rebid For The Carnwath Farms: I would like to explain why the "Alternate Bid" is the same price as the "Base Bid". I feel it would not be to my advantage to have any outside help working on the trenching. I will be using a large excavator (Komatsu PC 160), which will allow me to finish the job in a timely fashion. Thank you for the opportunity to bid this job. Respectfully submitted, Tim Hunt