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COMMITTEE ON BUDGET AND
APPROPRIATIONS
MINUTES
NOVEMBER 13, 1996
ATTENDANCE:
B & A MEMBERS: Wishnie, LaMotte, Darcy,
Abinanti
OTHERS: C.E.’s Office: Gina Angiulo,
Neil DeLuca, Jamie Hastings; Budget: Joe Phelan; CBAC: George
Hosey; Women’s Advisory Board: Bette Wurster; Planning:
Gerry Mulligan; Finance: Commissioner Langeloh, Kate Tooher,
Thurston Hartford, John Knox; Law Dept: Marilyn Slaatten, Denise
D’Ambrosio, Greg Meehan, Sheryl Neiman, Rick Cashman, Terry
O’Rourke; PRC: Commissioner DeSantis, Joe Stout, John
Condon, Bob Young; BOL: Legislator Carsky, Legislator Albanese,
Pat Gorski, George Gretsas, Dan Rodriquez, Gary Kriss, Robert J.
Boland, Glenn Guzi, Tina Seckerson
Co-Chair Wishnie called the meeting to
order at 3:00 p.m.
DISCUSSION: (There is
a cassette tape on file for more detailed information):
MINUTES: On motion of Legislator
Darcy, seconded by Legislator LaMotte, the motion to approve the
Minutes of October 28, 1996 and November 4, 1996 was carried by a
vote of 3-0. (Legislator Abinanti out for vote)
BOND ACTS: Items III: (from the July
Bond Package):
55. PROPOSED BOND ACT: $270,000 -
GEOGRAPHIC INFORMATION SYSTEMS
64. PROPOSED BOND ACT: $210,000 - BUS
MINI-TERMINALS.
61. PROPOSED BOND ACT: $1,384,000 - TRANSIT
COMMUNICATIONS LOCATION SYSTEM.
62. PROPOSED BOND ACT: $680,000 -
PERSONALIZED LOCAL TRANSIT VEHICLES PHASE II.
63. PROPOSED BOND ACT: $192,000 -
PERSONALIZED LOCAL TRANSIT VEHICLES PHASE III.
70. PROPOSED BOND ACT: $3,500,000 -
REFURBISH INFLUENT HEADWORKS
COMMITTEE ON BUDGET & APPROPRIATIONS
MINUTES - NOVEMBER 13, 1996
PAGE 2
With regard to Bond Act Items #62 and #63,
Mr. Darcy asked why Phase II and Phase III are being requested at
the same time. Mr. Phelan responded that it is because of the
availability of federal funds.
NOTE: The above referenced bond acts were
discussed in detail at the November 4th B & A meeting
On motion of Legislator LaMotte, seconded
by Legislator Darcy, the motion to approve Bond Act Items 55, 64,
61, 62, 63 and 70 was carried by a vote of 3-0. (Legislator
Abinanti out for vote)
INVESTMENT POLICY:
Proposed Act repealing Act 156-1993 which
establishes an investment policy for the County of Westchester
and which establishes a new investment policy for the County of
Westchester pursuant to New York State General Municipal Law
Section 39. (Item II, 10)
Changes from the original policy
include the addition of a requirement that internal controls
be maintained to assure that financial computer systems are
safeguarded against improper use, revisions in the list of
banks and trust companies that are authorized depositories
for County monies by adding new institutions to the list
contained in the 1993 Investment Policy and deleting other
institutions contained in the 1993 Investment Policy, adding
the requirements that all repurchase and reverse repurchase
agreements are to be considered as purchases and sales and
shall be so identified to all trading partners and that all
repurchase and reverse repurchase partners acknowledge
receipt of the County Investment Policy and the inclusion of
zero coupon obligations of the United State government, which
were not authorized by the 1993 Investment Policy, on the
list of approved collateral instruments.
On motion of Legislator Darcy, seconded by
Legislator LaMotte, the motion to approve this item was carried
by a vote of 3-0. (Legislator Abinanti out for vote)
VALHALLA ARMORY:
Proposed legislation authorizing the County
to acquire certain improvements at the Valhalla Armory. (9/9/96)
The building is 50,000 sq. ft; shared
by the County and the National Guard since 1982; located on
the Grasslands Reservation next to the Fire Training
Facility.
COMMITTEE ON BUDGET & APPROPRIATIONS
MINUTES - NOVEMBER 13, 1996
PAGE 3
This legislation would authorize the
County to enter into an 18 month lease with the Division of
Naval and Military Affairs for certain garage and parking
spaces located at the armory. This would allow the County to
use the entire facility. In the agreement to surrender the
lease the County would purchase the improvements (the
existing armory facilities) located within the demised
premises described in the lease and re-enter the demised
premises in exchange for a one time payment by the County to
the Division of $750,000).
The National Guard would continue to
use the garage and a small parking area for 2 years.
Mrs. LaMotte asked if there is a
possibility of other groups being able to use/lease the
space. Mr. Mulligan said that possibility is being discussed.
Mr. Darcy stated that he would like to
see a plan of what the facility will be used for. Mr. Wishnie
stated that perhaps the B&A Committee and the Committee
on Public Safety could meet jointly and visit the site. The
site visit will be set up for sometime after December 2nd.
Mr. Wishnie asked if there is a timing
issue with regard to this legislation. Mr. Meehan will check
on it.
CERTIORARIS:
(11) COUNTY EXECUTIVE: Forwarding a package
of court-ordered certioraris.
On motion of Legislator Darcy, seconded by
Legislator LaMotte, the motion to Receive and File this item was
carried by a vote of 3-0. (Legislator Abinanti out for vote)
RANS & CASH FLOW:
Proposed Revenue Anticipation Note Act
($30,000,000)
Commissioner Langeloh stated that they
need the authorization for the RAN and recognize that once it
is approved there is a 20 day waiting period before they can
take any action on a sale. Although they have not pinpointed
the dollar amount, they are looking to sell the RAN during
the first two weeks of December.
The Commissioner stated that cash is
watched on an aggregate basis daily.
79% of 1995 federal aid was received
after 9 months
62.6% of 1996 federal aid was received
after 9 months
75% of 1995 state aid was received
after 9 months
69% of 1996 state aid was received
after 9 months
Projected Amounts (developed in January
of 1995):
Federal: $86,926,910
State: $98,884,292
Cash received for calendar year 1995:
Federal: $66,918,283
State: $92,626,061
Projected for 1996:
Federal: $71,916,712
State: $89,331,521
COMMITTEE ON BUDGET & APPROPRIATIONS
MINUTES - NOVEMBER 13, 1996
PAGE 4
Mr. Abinanti requested the following
question be answered, in writing, by the Finance Department:
Why are we short on cash and what revenue do you anticipate
(and when) will be coming in?
Co-Chair Wishnie stated that he feels
the Committee has an obligation to sign this matter out and
put it before the entire Board, with the caveat that Mr.
Abinanti’s question be answered, in writing, by Monday.
Commissioner Langeloh responded that
his office will do so and that in addition he will be happy
to address this issue individually with any Legislator who
wishes to do so.
With the provision that Mr. Abinanti’s
question be answered in writing by Monday, on motion of
Legislator Darcy, seconded by Legislator LaMotte, the motion to
approve this item was carried by a vote of 3-1 with Legislator
Abinanti being recorded in the negative and Legislators Darcy and
LaMotte signing Without Prejudice.
GLEN ISLAND CASINO:
Proposed Local Law authorizing the County
to enter into a lease agreement with Continental Hosts, LTD for
the Glen Island Casino for a term of ten years with the option of
one ten year renewal. (11/4/96)
Mr. Darcy commended the County
Attorney’s Office and the Department of Parks for the
extent of information provided. He further stated that he
would have preferred being made aware of the problem earlier.
Mr. Darcy stated that the agreement was
basically between Island Casino and Soundview.
Ms. Slaatten explained that when the
County informed Island Casino that they were in default of
the lease the Trustee for the United States was there for two
interests: one, for their interest of S&A Concrete (on a
RICO conspiracy Mr. Auletta got his interest in this taken
away and the government took the interest over), and the
other half interest in Island Casino was from Charles
Sapienza, who was not indicted and convicted on the RICO but
when Mr. Sapienza died Mr. Hess, the Trustee informed us that
he would also be representing that portion of Island Casino.
In essence Mr. Hess represented the entire portion of Island
Casino.
Mr. Hess came to the County with a
proposal not to terminate our lease and get a Warrant of
Eviction, which we had started the process on and noticed
them on default, but instead, allow an assignment of the
lease (which was the primary asset of Island Casino) to
Soundview. In return for that assignment, and there is
provision in the lease that allows an assignment and requires
us to take a good faith look at an assignment, Soundview (who
Mr. Hess told us had been checked out by both the Justice
Department and the FBI as well as financial backers being
checked out and documentation being supplied) would be
willing to take care of the arrears. In order to do the
assignment (and there were other provisions added to in the
agreement, including one Mr. Wishnie had asked for in terms
of escrow) that would require both the Board of
Legislators’ and later Board of Acquisition and Contract
approval. The assignment would go from Island Casino to
Soundview. This would require County approval and then the
County’s relationship would be with the Assignee --
Soundview.
COMMITTEE ON BUDGET & APPROPRIATIONS
MINUTES - NOVEMBER 13, 1996
PAGE 5
Mr. Darcy stated that for whatever
reason the contract, or agreement, between S&A Concrete
and Soundview was never consummated. Ms. Slaatten stated that
the County had to be part of the closing on it because the
arrears were to come to us at the time of the closing.
Commissioner DeSantis stated that the assumption was made
that their finances dried up because they never closed with
the County. They missed the first closing date of April, 1996
and the second in June of 1996. Ms. Slaatten stated that
there were several other missed closing dates which were
extended by the court until September, 1996.
Mr. Darcy asked: Why was Soundview
permitted to operate without a contract?
Commissioner DeSantis stated that they
never sanctioned Soundview being in there.
Ms. Slaatten stated that Soundview was
not permitted under the lease to operate. Their issue was
that our agreement was with Island Casino.
We were in Federal Court, before Judge
Scheindlin, who was in Manhattan, to remove the case from
Manhattan and this Judge to White Plains (which eventually
got done). When that application was made, Mr. Hess wrote to
Judge Scheindlin telling the Judge that he did not want it
removed from her and put in writing that, in fact, by the
way, the proposed assignee was operating the casino. That was
the very first time the County was told of that. The County
immediately moved and filed with Mr. Hess a Notice of Default
and wrote to the Court that under the lease agreement Mr.
Hess did not have the right on behalf of Island Casino to
have Soundview operate it and served them with a Notice of
Default for defaulting on the lease and violating that
provision. Mr. Hess then responded to the Court that in fact
Soundview was not operating it but instead the Soundview
employees were in there in order to manage it and that Island
Casino had the right to have the management expertise that
they chose. Ms. Slaatten said that this is true, but we did
not remove the Notice of Default on them for that.
Mr. Darcy asked during that period of
time that Soundview was managing the casino whose books
monies from event bookings went to. Commissioner DeSantis
responded that the money went to Island Casino’s books.
Ms. Slaatten explained that we could not get in there to do
an audit. She reminded the Committee that one of the reasons
we defaulted them and looked for a Warrant of Eviction is
because they did not give us the annual audits. The Finance
Department attempted to go in and do an audit, because of
concerns about what was going on and how this was dragging
on, but could not get in there. In Court, Mr. Hess said that
this was interfering with the operations of Island Casino and
we were directed not to do an audit. The Court also, at Mr.
Hess’ application, didn’t let us do the "walk
through" on the RFP that was pending in case Soundview
didn’t close, which we appealed that from the Magistrate
to Judge Brieant and lost it. When Soundview Management and
Island Casino basically said they weren’t going to close
and Mr. Hess admitted the same, and their presence was
minimal at the Casino, the Finance Department, with the Parks
Department, was able to get Bennett Kielson to go in to see
what they could find on the books. That was around October
23rd of this year. Bennett Kielson has orally told the
Finance Department that the books were in a major shambles.
Bennett Kielson has orally stated to Finance that
preliminarily from what they have seen, the monies were paid
through Island Casino, but they are still trying to resurrect
and put together the books and they are preparing a report
for Finance. Bennett Kielson found that Island Casino was
using the money from deposits people put down on events to
pay current bills. They found that Island Casino was using
those monies and in fact vendors were also due and owing
money. The County could not find this out because we were not
allowed to go and do an audit.
COMMITTEE ON BUDGET & APPROPRIATIONS
MINUTES - NOVEMBER 13, 1996
PAGE 6
Mr. Darcy stated that he would then
assume that the liquor license was Island Casino’s. Mr.
DeSantis confirmed this.
Mr. Darcy inquired as to the status of
the tax liens. Ms. Slaatten stated that in the course of
going for the closing with Soundview, one of the backers of
Soundview requested, from Soundview, a title report - from
which no liens were picked up. She further stated that
Soundview was notified that at the closing the County would
expect them to show free and clear of any liens that might
impinge upon any lease that the County might enter into.
Soundview finally refused to close and Mr. Hess finally
admitted that they would not be closing. Up until the very
end Mr. Hess kept asking the Court for more adjournments and
dates. Every closing date the County called them and sent all
necessary documents and asked if they would be coming. The
closing date would arrive, they would never show up, never
call, so we never got a final answer on liens.
Mr. Darcy asked if the tax liens
against S&A Concrete, which flowed to Island, would have
an impact on the Casino itself, the property or the lessee?
Ms. Slaatten responded that there are two sets of liens. One
is a set of IRS liens, which take precedence over any other
liens, to which they can go after any asset in the amount of
$12 million. The other is a set of liens that we did a title
search on and came up with about $1.9 million worth of liens
that were state, New York City, etc. liens. In terms of the
leases, the Judge signed a federal Warrant of Eviction. As
you may remember, Mr. Hess, when he was supposed to be
negotiating with us, took the Summary Eviction proceeding in
New York State Supreme Court (which is where they are
supposed to be) and removed the case to Federal Court, which
is why there is a Federal Warrant of Eviction. And, indeed we
learned it from the Court. That Warrant of Eviction earned a
judgment which closed out Island Casino’s rights in the
lease in the facility. We did an inventory with the IRS and
that is a schedule attached to the judgment, signed by the
Court and consented to by the IRS so that there is no issue
as to what it is that they have the right to (basically
things like the glassware, cutlery, etc.) The IRS said to us
when we didn’t want to go further on an extension that
they would come in and take their stuff. We told them to go
ahead, knowing that it would cost them more to take it. They
didn’t take it. They are currently speaking with
Continental Hosts to make arrangements on the stuff, if the
BOL approves a long term lease with them so they can start
with the necessary glassware, cutlery, etc. There will not be
an issue with someone taking away everything in the place as
there is this schedule.
Mr. Darcy asked if Mr. Hess is
completely out of the picture. After asking for the last
adjournment, Mr. Hess didn’t come to anymore of the
Court conferences, in fact, the U.S. Attorney didn’t
come anymore either. Mr. Hess informed the County that he has
been discharged as the Trustee, and even if he wasn’t
discharged as the Trustee for Island Casino, they have no
more right in the lease and the Judge signed the Warrant of
Eviction and terminated the lease, so Mr. Hess is out.
Mr. Wishnie asked if we believe Mr.
Hess behaved improperly can the County take action against
him? Ms. Slaatten stated that she can take a look at if they
Committee would like but she would discuss more specifically
in Executive Session possibly sending a communication to the
U.S. Attorney’s Office about what happened to the assets
here under the purview of Mr. Hess as the Trustee.
COMMITTEE ON BUDGET & APPROPRIATIONS
MINUTES - NOVEMBER 13, 1996
PAGE 7
Mr. DeSantis stated that there may be
one individual left for continuity for those bookings that
were made for the out months. They did not wish for the
public to suffer. Continental Hosts is in there on a short
form contract. They retained, for booking knowledge alone,
one individual under the short form contract.
Mr. Darcy asked how far out the short
form contract goes. Mr. DeSantis replied until the end of the
year (December 31st). Mr. Darcy asked how far out the
bookings go. Mr. DeSantis stated they go well into next year
but there is an appreciable gap after mid-January until
April. There are two and one-half to three months where there
are no bookings. Mr. DeSantis stated that they anticipate
that there is about $75,000 worth of deposits. Ms. Slaatten
stated that while we do not have to make good legally on
bookings, the County Executive has instructed Mr. DeSantis to
make arrangements so that people do not lose their deposits
and have to start all over again. Continental will honor the
contracts of the people who put deposits down. The only fee
Continental is getting for that time is equal to the amount
of deposits which were lost (about $20,000). Mr. DeSantis
stated that the other option would be to close down and
cancel bookings.
The legislation before the Committee
would authorize the County to enter into a lease agreement
with Continental Hosts to begin January 1, 1997.
Mr. Darcy inquired as to how new
bookings will be handled during the short term agreement. Mr.
DeSantis stated that Continental has been asked to honor
previous bookings not to absorb additional bookings.
The principals of Continental are Stan
Lewin and Stu Dornfeld.
Mr. Abinanti stated his concern with
the 10 year renewal. Mr. Albanese stated that it is his
experience that 10/10 is a standard agreement.
Commissioner DeSantis reviewed the RFP
process and criteria and stated that Continental Hosts stood
out head and shoulders above the other respondents.
Continental Hosts made a commitment for
$1 million worth of capital improvements to the facility and
would be responsible for payment of all property and taxes
and utilities. The County will be paid a minimum annual rent
of $50,000 in years one through three of the lease, $75,000
in years four through ten of the lease, and if the option to
renew is exercised by continental Hosts, $100,000 in years
eleven through twenty of the lease. In addition, Continental
will pay the County, as additional rent, 4% of annual gross
revenues exceeding $1 million in years one through four of
the lease, with the amount rising to 4.5% of the annual gross
revenues exceeding $1 million for the remainder of the lease
term.
On motion of Legislator Darcy, seconded by
Legislator LaMotte, the motion to approve this item was carried
by a vote of 4-0.
There being no further items for
discussion, on motion of Legislator Darcy, seconded by Legislator
LaMotte, the meeting was adjourned at 5:20 p.m.
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