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Poloncarz, Legislature reach pact on lawsuit settlement

Weeks of wrangling between Erie County lawmakers over how to pay a $7 million legal settlement ended Thursday with an agreement to pay it in cash.

Pressured by a looming deadline to pay a Buffalo woman who suffered brain damage after she nearly drowned in a public pool, County Executive Mark C. Poloncarz agreed to use sales tax and leftover legal funds for the settlement.

Poloncarz and Republicans in the County Legislature had been at odds for weeks over whether to dip into the county's extra cash to pay the settlement or whether to borrow the money.

The county faced potential interest penalties if it did not pay the bill by March 5.

Mark Cornell, a spokesman for Poloncarz, said the county executive did not want to engage in a "political game of chicken" over how to pay for it.

"In our view, there was no other choice to avoid costing the taxpayers the interest penalty charges that could be upwards of $200,000," Cornell said. "This wasn't the best solution, but it was the only solution at this late date that could ensure that the expense was paid."

Poloncarz wanted the county to borrow the money through a low-interest, five-year judgment bond so that the county could reserve the cash for other expenses. The Legislature's Republican-led minority caucus wanted the county to pay cash so that it could avoid paying interest.

Under a deal approved unanimously by the County Legislature on Thursday, the county will use $5.7 million in higher-than-expected sales tax revenue from 2011 and $1.3 million from the county's risk retention fund to pay the legal settlement.

The county's risk retention fund is money that the county sets aside each year to pay for legal claims, judgments and settlements, and to pay for private attorneys the county hires.

In the same deal approved Thursday, county legislators agreed to roll over $5 million that was never spent from the risk retention fund last year into this year's budget. That money could also be used to pay for legal counsel and consultants hired by the county for negotiations over the lease agreement for Ralph Wilson Stadium, according to documents submitted to the Legislature.

Poloncarz and the Republicans had each offered compromise deals in which the county would have paid cash for a portion of the legal settlement and would have borrowed the rest, but they were unable to agree on the terms.

The county late last year agreed to pay $7 million to Janette Morales to settle a personal-injury lawsuit that blamed the county for not properly training or supervising lifeguards at a city-owned pool in which Morales nearly drowned in 2009. At the time, the county operated and maintained the city's pools and parks.

Morales' attorney, Jed Dietrich, has said the money will be used for her long-term care.