Legislature never approved law firm in Valley View case

County executive didn't approve contract either, his office says

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By Nathan Mayberg

— When local attorney Michael Sussman sued the county over the formation of a local development corporation (LDC) to decide the fate of Valley View nursing home, the county was represented by the upstate law firm Harris Beach.

But the county legislature — which was sued along with the county executive and the LDC itself — never approved hiring the firm to represent them. According to the legislative clerk responding to a Freedom of Information Law request, there is no record of "any resolution authorizing the law firm of Harris Beach to work for the county and any authorization for them to represent the Orange Valley View Development Corporation."

Dain Pascocello, spokesperson for County Executive Steve Neuhaus, wrote in an emailed response: "Harris Beach does not possess a written retainer with Orange County for its work on Valley View nursing home."

Messages left with the chair of the Orange Valley View Development Corporation, Paul Ernenwein, were not returned. A Freedom of Information Law (FOIL) request was sent to the LDC's FOIL officer, Elaine DeLuca, who is also the county's purchasing agent for the Office of General Services.

That is significant, since the county has claimed in correspondence through Harris Beach that the LDC is not connected to the county.

The LDC was formed through resolution by the county legislature when it approved transferring ownership of the Valley View nursing facility. However, that vote was struck down by State Supreme Court Judge Elaine Slobod for not having the required supermajority.

But the county has continued to defend the legality of the LDC. In an emailed response to questions, Pascocello wrote that "the judge's ruling invalidated the legislative resolution related to the LDC, not the LDC's status as an incorporated entity that has registered its documentation with New York state."

Sussman disagrees with that assessment, saying a second ruling by Judge Slobod made clear that the LDC itself was null and void, and not just the legislative resolution.

Messages left for Neuhaus were not returned.

The rules of engagement

Pascocello wrote in another email that Harris Beach was also contracted by former County Executive Ed Diana to do bond counsel work in 2012. The contract runs through the end of 2014, with options to renew, he said. Pascocello said the agreement did not have to be approved by the legislature.

"Under the county charter, the county executive approves contracts," Pascocello wrote.

According to state law, each municipality is required to set up its own procurement policy, which sets up how contracts are awarded.

"Generally, the policies must require alternative proposals or quotations, or a similar method of procurement," said state comptroller spokesman Brian Butry. "However, the statute also permits the LG to provide for exceptions in its policies for 'circumstances when, and types of procurement for which, in the sole discretion of the governing board...the solicitation of alternative proposals or quotations will not be in the best interest' of the LG."

Meanwhile, the county legislature has no record of any contract with the firm of Marcus and Millichap to handle the bidding on the nursing facility. Last month, Ernenwein said the national firm received all of the proposals to purchase the facility and made a report that was sent to county legislators.

Legislator Shannon Wong of Goshen had told The Chronicle earlier that, at a recent LDC meeting, she heard a conversation about reimbursing a Marcus and Millichap representative, and that she did not know what account such funds would be drawn from. She said on Sept. 9 that she "fully supported the county responding in a timely way to Freedom of Information Law requests because people have a right to know how and if county funds are being used for the LDC."

According to Justin Miller, an attorney for Harris Beach, the firm which has been representing the county and the LDC in the lawsuit, the county has not paid Marcus and Millichap for its work. Its contract is "fully contingent on a sale," meaning they will get a percentage of the sale by the county, Miller said.

County Attorney Langdon Chapman did not return numerous calls seeking comment.

Harris Beach contributed $2,000 to Neuhaus' campaign for county executive last year.

Sussman calls for Ernenwein's resignation

Meanwhile, Sussman has called on Ernenwein to resign in the wake of controversial comments and personal attacks he made to The Chronicle last week.

"The county executive should immediately call for his resignation," Sussman said. "He is not fit to run that office."

Sussman said Ernenwein is "not fit to run that LDC" and called the comments "absolutely shocking."

Pascocello said Neuhaus would not be commenting on the matter.

Sussman has called on the LDC to stop its work per the court order. He said the county should hold a referendum on the privatization of Valley View.

To reach reporter Nathan Mayberg, contact comm.reporter@strausnews.com or call 845-469-9000 ext. 359.

Editor's note: Pamela Chergotis contributed to the reporting of this article. The original article incorrectly quoted Legislator Shannon Wong as saying that she saw checks handed over to a Marcus and Millichap representative, when she had only heard a conversation about reimbursing the representative. The error has been corrected here.

Related story: "Officials: Elant connection not a conflict for LDC chair": http://bit.ly/1CuHpPY.

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