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A long-standing controversy flared against last week over how much Niagara County is owed by localities that left its workers' compensation insurance pool three years ago.

This time, the county is threatening to withhold sales- and mortgage-tax sharing with municipalities that owe money, which an attorney for two of the affected localities called illegal.

"That's like a guy saying, 'You owe me money, but before I prove it, I'm going to go down to the bank and take it out.' You can't do it. It's called misappropriation. There are laws against that kind of thing," said Robert S. Roberson, attorney for the towns of Niagara and Royalton.

The law that set up the Mutual Self-Insurance Plan calls for departing members to pay a withdrawal fee based on the value of outstanding claims for employee injuries. The county contends that it is owed a total of about $4.1 million, about half of that by the City of Niagara Falls.

Others who left and owe money are the City of Lockport, the Niagara-Wheatfield School District and the towns of Niagara, Royalton, Somerset and Wheatfield.

"It's never been their position that they don't owe the money," County Attorney Claude A. Joerg said. "None of the agencies except the Town of Niagara has questioned the amounts."

"That's simply not true," Roberson responded. "The City of Lockport has, the City of Niagara Falls has, Niagara-Wheatfield has."

Lockport Mayor Michael W. Tucker said the Common Council voted in October to pay the county $219,896, but no check has yet gone out.

"We're paying what we think is fair. I don't know if they think it's fair," Tucker said. "It was less than they wanted." The county says Lockport owes about $500,000, including interest.

The issue arose in a budget session of the County Legislature's Administration Committee last week. Majority Leader Malcolm A. Needler, R-North Tonawanda, said the county's budget situation is better than it looks because next year the county will collect the $4 million from the former pool members.


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