RECENT UPDATES AND INFORMATION (Also scroll down to the Q&A's):

SATURDAY, JANUARY 26, 2008: MIRANT UPDATE: There are all kinds of rumors and stories floating around about the Lovett plant, and what is expected over the next few months and years. Even the stories in the media seem to be all over the place. I have had some discussions with various people who should have pretty accurate information on what is happening, and would like to share that here. This is what I have been told. It is rather blunt, but I believe quite reliable:

Mirant is not selling anything to Alliance (the alleged $10 million offer), and the Lovett Station WILL be demolished. Mirant is currently receiving bids from demolition/reclamation companies, the names and contacts of which I have been or will be provided. I have discussed this situation with people who have personally been part of the teams leading these companies through the plant for sight visits. Steel is a high priced commodity that will generate substantial revenue for Mirant, and they are proceeding aggressively.

Bids for this demolition are required to be submitted by the end of January, and a bid award is expected to be issued on February 15^th. As it stands right now, by April of 2009 the Lovett site will be no more than a vacant lot. The companies bidding on the demolition have also been instructed to include the cost of an environmental clean up, which at this point is believed to involve excavation of contaminated soil, and the filling and grading of the remaining area (I wonder where that soil is going??).

On April 15^th the last operating unit, number 5, will be shut down. On May 15^th, all permits, including operating and environmental, will be withdrawn or left to lapse, and the keys to the Lovett plant will be turned over to the highest bidder for demolition and reclamation.

Despite the recent web cast held by CEO Ed Muller denying any interest in selling, and the half-hearted effort of Mirant to seek state approval to let Unit 5 run on gas, that is not their true plan or intent. They are going through those motions simply to save face, and point blame at Albany, Governor Spitzer, and Attorney General Cuomo. It is not economically feasible to operate the Unit on Gas - it was not designed to run on gas, and they have no intention of running it on gas, even as a “peak” source plant.

As for the alleged $10 million offer by Alliance, you may see them come back – however, it will be to buy VACANT River front industrial zoned property, which, of course, is much less expensive than buying a power plant, and likewise, will have a substantially smaller tax bill. To put that in real numbers, Mirant currently pays about $3 million to Stony Point and $10 million to the School District for the plant. That is roughly 22% of all the taxes collected in Stony Point ($13 million in taxes collected) and 7% of the total $142 million in school taxes collected. The critical issue, obviously, is who makes up that $13 million shortfall?? (yes, we taxpayers will).

Sorry to ruin your Saturday. Until next time……STEVE

TUESDAY, DECEMBER 5, 2006: AN UPDATE: At this point, I have only two things to say. First, yes, it looks like we probably have a settlement involving all parties, and some real finality, at least through 2006. Basically, it is the Court ordered decision with a few minor adjustments. I say "probably" because there are still a few minor details to work out, which the lawyers and numbers people are discussing. This brings me to the second issue, which I find absolutely unbelievable.

The lawyer that was representing Stony Point, Haverstraw and the School District all at the same time (Dodge Watkins' long time friend, lawyer and associate Jonathan Nye of the Whiteman Osterman firm), has been advised numerous times that his representation of all three parties was a serious conflict, because both Town's and the District were effectively negotiating against each other for the right to pay as little as possible back to Mirant. Despite this, Mr. Nye is STILL trying to represent Haverstraw and the School District (see "Lawyer Conflict" tab on the left), and he is doing so after having represented Stony Point, still a party to the action. In my opinion, not only is this a serious conflict, but it has caused more delays and problems, and has created additional hurdles for all, simply because of Jonathan Nye's desire to squeeze as many millions of dollars in legal fees as possible out of the already drained North Rockland Taxpayer pockets. In fact, with all of this said, and all of these conflicts, he even had the nerve to recently submit another bill to Stony Point for over $100,000 for additional "legal fees" over the past few months. I am furious over this, and I will NOT hold my tongue despite the subtle hints from Mr. Nye and his firm that they may sue me if I don't shut up. All I can say to that is, "join the club".

WEDNESDAY, OCTOBER 18, 2006: MIRANT - DON'T LET HOWARD PHILLIPS MESS IT UP AGAIN. Would someone please explain to me why Howard Phillips is still playing political obstructionist AND calling the shots for the school district regarding the Mirant case?? Howie issued press releases, sent letters to all taxpayers, and screamed at the top of his lungs that we should have agreed to the proposed settlement rather than go to court. He never spoke truthfully about the required borrowing for the illegal trust, yet that was the ONLY problem with the proposed settlement. Not only was the trust illegal, but it required us (we taxpayers) to BORROW over one hundred million dollars to create it (He tried to make it look like Mirant was giving us the money). Stony Point agreed to settle without the trust, and initially, the school district agreed to settle without the trust. Then, Howie Phillips returned from vacation, screamed at Brian Monahan and the school board, intimidated them into reversing their decision, and ended up forcing a Court decision.

Now, Mirant appealed both the Lovett and Bowline decisions, giving us a SECOND CHANCE. Mirant has tentatively agreed to go back to the original settlement proposal WITHOUT the trust. Howard Phillips has not given any legitimate reasons whatsoever why he will not settle, and has already started setting the stage to mess this whole thing up again by demanding even more money (for purely political reasons), and insisting on the illegal trust. I don’t understand why the settlement was so great last month, and no good now (parenthetically, in his September 22, 2006 letter to Haverstraw taxpayers, he said the court order will cost $9 million more than the settlement. If we settle now, doesn’t that mean he could use that $9 million to reduce the tax burden on his residents?)

The school district, by the way, has simply been hiding while awaiting instructions from Howard.

We (the people) need to take control - LET'S GET THIS THING SETTLED LEGALLY, IMMEDIATELY, AND FINALLY. Let’s demand that Howard Phillips set aside his political motives and ambitions for a moment and actually ACT in the best interests of his taxpayers, not just mouth the words like he did in the newspaper and on the radio earlier today. The exact same settlement offer is available right now from Mirant, WITHOUT the illegal trust and the extra $100 million in loans. Call him – write him – visit him at Town Hall. Any suggestions on how to do this would be greatly appreciated. STEVE

WEDNESDAY, OCTOBER 4, 2006: REVISED MIRANT UPDATE FOR STONY POINT TAXES - I now have the additional numbers needed to determine the total Town tax effect of Mirant, and corrected total tax revenue numbers. In addition to the $600,000 additional funds needed to service the debt to pay back Mirant and the County (about a 5% tax increase), we also have to make up the difference in the amount of taxes Mirant was paying, and the reduced amount they will be paying in the future. This is the big number.

Last year Stony Point raised $13.3 million in taxes (not $10.3 as initially reported). The estimated cost for the debt service to repay Mirant and the County for next year is about $600,000, which is about a 5% increase. However, we also have to make up for the lost tax revenue from the Mirant assessment reduction. I just received those numbers, and it looks like this will add another 20% increase, for a grand total of 25%.

This is how those additional numbers add up. Based upon the Court order, Mirant's current tax bill will be reduced by about $2.2 million, to about $2.3 million, from the $4.5 million they were billed last year (the settlement we rejected only required them to pay $1.7 million). So to try to keep it simple, here is what we have:

1. We raised $13.3 million last year;
2. If we taxed Mirant at the $2.3 million the Court is requiring, rather than $4.5 million, we would have raised $11.1 million;
3. If there is no other increases in spending this year, we would need to raise $13.3 million (last years tax amount), plus the $600,000 for the new debt, for a total of $13.9 million;
4. $13.9 million is $2.8 million more than the $11.1 million we raised without the extra Mirant money;
5. $2.8 million is about 25% more than $11.1 we raised last year without the extra Mirant money. Thus, this looks like the total effect of Mirant on the Town taxes (about 5% too pay the debt, and 20% to make up for the lost revenue)

As for the actual dollar affect on each of us, according to the Town tax office, the "average" town tax bill (excluding school, County, etc.), is about $1,240. Thus, Mirant will result in an increase of about $310 per household (25% of $1,240).

My thought is that we should strive to bring the budget in at least at a 0% increase except for Mirant, and if possible, to try to make some additional cuts to try to absorb some of Mirant. This is what I suggested to the School District, but they ignored me. Let's see how we make out on the Town level. STEVE

SUNDAY, OCTOBER 1, 2006: Here is my response to a request for additional documentation showing that Mirant was NOT going to "give" any money to Haverstraw or the School District, and in fact, the district and Haverstraw were actually borrowing the money to fund the trust themselvves:

Dear ******: The information you are looking for is in the Bowline Stipulation of Settlement agreement for the Bowline plant (click here to see a copy http://www.colehatchard.com/doc/Bowline_Stipulation.DOC ). First, the “trust” is not really a ”trust”. It is a bank account that the school district and Haverstraw were going to open to place borrowed money, to make it look like taxes didn’t go up as much as they did. It is purely a political animal. There were two primary problems (and many smaller ones). It is illegal for any municipality (towns, school districts) to borrow for operating expenses. That is why Haverstraw and the school district were going to borrow the money, and give it to Mirant to give back to them. Not only is it illegal, and a real stupid politically motivated idea, the second problem was that the borrowing was going to cost an extra $130 million in interest and expenses. Now here’s the “documentation” you requested.

Take a look at the stipulation (http://www.colehatchard.com/doc/Bowline_Stipulation.DOC). On pages 7 and 8, I highlighted the section that talks about the REAL refund due Mirant - $17.6 million. Then, it talks about a separate “additional” payment to Mirant totaling about $96 million. This is “extra” money the school district and Haverstraw were going to borrow to give to Mirant, to give back to them. Skip to page 10. This is where Mirant is giving it back to the district and Haverstraw by putting it into a so called “trust”. It goes on to prohibit the use of the money to pay anything back to the County. It requires that the money be used to pay taxes “just like the pilot” program. This is why it gets confusing – it really has nothing to do with the PILOT program. The pilot program simply sets the amount of taxes Mirant has to pay to the school and Haverstraw for a 7 year period. It is a fixed payment in lieu of them getting a tax bill, so the amount can’t go up (IE: Payment In Lieu Of Taxes = PILOT) By requiring the “Trust” funds be used in the same manner as the PILOT payments simply requires that the money be treated as if it were additional tax revenue to the district and Haverstraw (for operating expenses).

Bottom line – IF Haverstraw and the school district would have gone along with the settlement WITHOUT the “trust” like we asked, we would have saved a HUGE amount of money. However, since the cost of borrowing to fund the trust was going to be over $130 million in interest and expenses over a 30 year period, the Court order still saved money over the settlement. Just to clarify that, Howie Philips and the school district now claim that the Court order requires the payment of $68 million more than the settlement with the trust. However, when you add in the $130 million cost of the “trust” that was in the settlement agreement, the Court order is cheaper. Settlement without the trust would have been BEST.

One important point to clarify the end result – if the school district and Haverstraw had agreed to proceed with the settlement but without the trust, the entire section about the “extra $96 million” would have come out. The money would NOT have been paid to Mirant. If there was no “trust”, they did NOT have to give the extra money to Mirant at all. Mirant came out the same in either case – they were never getting the $96 million. With the “trust” they were getting it and giving it back; without the “trust”, they just didn’t get it in the first place. This is where Howie Phillips is really deceiving the public. He keeps saying “if we settled, we would have had ‘access’ to the ‘trust’ “. He fails to mention that the “trust” was NOT being given to us by Mirant – we (the school district and Haverstraw) were borrowing the money to create the “trust”.

By the way, don’t be concerned that this seems confusing to you – that was the intent all along. They wanted this to be so confusing they could shove it down everyone’s throats without anyone being the wiser. That is why they are so pissed at me – and why I hate politicians almost as much as I hate lawyers (ironic, huh!!?). STEVE

WEDNESDAY, SEPTEMBER 19, 2006: The Journal News printed a headline today which gave the startling appearance - though not true - that Mirant has all of a sudden come out of nowhere and announced that it is closing the Lovett plant. The Journal News really did a disservice with this headline and story, because although certain of the underlying facts are true, the headline and thrust of the article present the story in a slanted, sensationalized manner which has caused even more undue stress to North Rockland overtaxed payers. Yes, Mirant announced that they were preparing to close Lovett - but they have been making that announcement regularly for over two years now, in press releases, at negotiating sessions, and to the Attorney General's office. Here is the REAL story:

A few years ago, Mirant entered into an agreement (a "consent order") with the New York State Attorney General's Office, and the New York State Department of Environmental Conservation ("DEC"), whereby Mirant agreed and is required to reduce the pollution created by the coal burning at the Lovett plant. The required equipment cleans the emmisions AFTER the coal is burned, right before it comes out of the smoke stack, so it is referred to as "Back End" pollution control equipment. The cost of that pollution control equipment is estimated to exceed $200 million, and because it is "back end" cleaning equipment, the life of the Lovett plant will not be extended despite those expenditures. As a result, Mirant has made it clear that they will NOT spend that money or install the required equipment. Thus, Mirant has two remaining choices: 1) close the Lovett plant, or 2) come up with some type of alternative to reduce pollution rather to adding the $200 million in back end pollution control equipment.

As for the first of the two remaining choices, Mirant could certainly close Lovett if they really wanted to do so. However, this option is not in the best interests of Mirant economically, and they are in the business of producing energy, not buying and closing energy plants. The chances of closure happening are slim - very slim. Nonetheless, in order to actually close the plant, there are many steps that have to be taken, and the time frames involve years, not weeks or months. So, in order for Mirant's threat of closure to appear real, the process was started a couple of years ago. Since then, and for the reasons described below, Mirant has been following the "potential closure" script like a professional public relations firm. Why the Journal News decided to report it now, and in the unnecessarily sensationalized manner that they did, is beyond me.

The REAL reason Mirant has taken this avenue is NOT because they really want to close Lovett. Mirant is very slick - they are using the threat of closure as a negotiating tactic with the Attorney General's office and the (DEC) in their attempts to avoid spending the $200 million in pollution controls, and get the additional time they need to execute their real plans for Lovett..

The second choice mentioned above is what Mirant really desires. Recently, newly developed technology has become available to Mirant that will meet the pollution requirements required by the State and the DEC, yet at a substantially lower overall cost. Moreover, this technology will update and extend the useful life of the Lovett plant a great deal, justifying the expenditure. The technology is fundamental to the way energy is produced by burning coal, and is much different that the "back end cleaning" approach previously discussed. The problem is, although it currently exists and is available, the technology is very new, and will take a few of years for Mirant to retrofit Lovett and fully implement the program. It can not be completed within the time frames currently mandated by the Attorney General and DEC for the installation of the back end pollution controls systems. Thus, Mirant must not only obtain the State's approval for the alternative technology, they must also get an extension of time to install and implement it. This is where the threat of closure was born, and why Mirant announced and commenced the closure process a couple of years ago. Closure is not their desire, but they have made it clear that without the approvals and extensions they need, it is a possibility.

The Journal News really should have clarified all of this, especially the fact that this was not the first time Mirant has made this closure announcement. I guess panic sells papers. I hope this helps. STEVE

MONDAY, SEPTEMBER 11, 2006: The "Illegal Trust": I've had dozens of emails asking for clarification on the illegal trust the school district and Haverstraw were attempting to set up as part of the Mirant settlement. Here's an overview.

1. Under New York law, a municipal entity like a town or school board, can NOT borrow money to pay regular bills and operating expenses - it is illegal. They can only borrow for capital improvements such as to build schools or make major repairs, and for certain other special items like to pay for a judgment. This can include the money that is owed to Mirant.

2. Under the settlement proposal, the school district and Haverstraw were going to borrow money to pay back Mirant, which would have been fine. However, they were also going to try to borrow EXTRA money to pay regular bills and operating expenses over the next few years, in order to hide the real tax increase resulting from Mirant and the Haverstraw reassessment. The School District was going to borrow about $96 million, and Haverstraw, about $15 million. Since it is illegal to do this directly, they tried to make a deal with Mirant to get around the law, which is where this "trust" came in.

3. Here is how the school district was doing it. Haverstraw was doing the same thing but with less money. The school district was going to borrow $96 million extra (above what they owed Mirant), and to try to get around the law, they were going to give it to Mirant, and Mirant was going to give it back to the school district. The school district was going to put the borrowed money into a bank account, which they were calling a "trust" (It was not a real trust - they were just using the term for political reasons ) . Then, the school district was going to take about $14 or $15 million out of the account each year to pay regular school bills (the amounts varied, but they planned on spending it all within about 8 years). For those 8 years, it would give the appearance that school spending and taxes didn't go up as much as they really did. There were numerous problems with this scheme, including the following:

a. It is illegal. Just because they were going to give the money to Mirant to give back to them doesn't make it legal - the scheme still violates the law against borrowing for regular expenses (the legislature compares it to using your credit card each month to pay your mortgage and O&R bill);

b. The COST of borrowing that $96 million over a 30 year period would have been $130 million MORE - so taxpayers would have had to pay back a total of $230 million or so (this cost was conveniently omitted from the County's recent cost analysis) ;

c. In 8 years, when the borrowed money ran out, we would get clobbered with another tax increase, AND we would still have to pay back the $230 million; and

d. Mirant told Howard Philips, Brian Monahan, me, and all of the lawyers involved that if the district and Haverstraw decided to settle without the trust, they WOULD NOT want the extra $96 million. So we could have settled without the trust and all the costs and problems that came along with it. However, this would have been political suicide for Howard Philips - he would have had no way to hide the reassessment mess he just created in Haverstraw. So, he worked hard to kill the whole deal. Ask Howard about this - it was at the Hilton in Pearl River a few months ago, and if he denies it, he is lying. There were many witnesses, including Mr. Bob Driscol, VP of Mirant.

If anyone has any further questions, feel free to email me. STEVE

MONDAY, AUGUST 28, 2006: The decision in the Mirant case as relating to the Lovett plant has just been handed down. The following is a summary of the numbers, as well as a comparison to the proposed settlement agreement that we previously rejected.

A brief explanation is in order first. The thrust of the lawsuit by Mirant is their claim that they have overpaid taxes on the Bowline plant since 1995, and on the Lovett plant since 2000. The initial claim that they have been overpaying was not at issue, rather, it was how much of a refund they should receive and how much in taxes they should pay in the future. Since they are in bankruptcy, Mirant has not paid their taxes since 2002, so the County has paid their taxes to the Towns and the school district pursuant to State law. Thus, the repayment of back taxes (refunds) is split between repayments to Mirant through 2002, and repayments to the County for 2003, 2004 and 2005. The numbers listed below are the amount of refunds Stony Point taxpayers will have to pay back to Mirant and Rockland County. It does not include the school district, nor does it relate to the Bowline plant.

In summary, under the proposed settlement that we rejected, Stony Point was to have paid back a total of $13 million to Mirant and the County. Pursuant to the Court decision today, Stony Point will have to repay less than $7.5 million - about $5.5 million less - as follows:

Pursuant to Court Decision Under Proposed Settlement
Tax Year(s) To Mirant To County Total To Mirant To County Total

2000, 2001, 2002       $2.5 million          $0              $   2.5 million     $3 million            $0              $ 3 million
2003, 2004, 2005              $0             $5 million      $   5 million               $0             $10 million    $10 million
                               TOTAL FOR PERIOD:             $   7.5 million                                                 $13 million

Please note I will make minor changes and adjustments as further analysis requires, so if you see changes from the last time you checked here, that is why. Also, there will actually be further savings to taxpayers for a number of reasons, but I don't want to confuse the issues right now. Suffice to say, Mirant will have to pay 12% interest and a 5% penalty on all back taxes owed for the period 2003 through 2005.

As for the school district, the savings over the proposed settlement agreement is HUGE - tens of millions of dollars.

For a full copy of the decision in .pdf format, click here:
http://www.colehatchard.com/doc/Lovett_Decision-08-28-06.pdf

FRIDAY, AUGUST 18, 2006: The Wednesday headline in the Journal News about Mirant being costlier is wrong, not because the numbers are necessarily off, but because the analysis is incomplete. First, you should know that the so called "expert" quoted in the paper, Larry Farbstein, is the guy Stony Point fired earlier this year after finding over $20 million in mistakes in his Stony Point portion of his analysis.

Here's the bottom line - assume that Mr. Farbstein's numbers are close to being correct. He and Howie Phillips have stated that the School District will have to pay Mirant almost $80 million more than the proposed settlement, because Mirant was going to "give back" $79.5 million of the payment to the District. That part of the analysis and that statement by Mr. Phillips IS A FLAT OUT LIE, and they know it. Mirant was not "giving" anything back. The school district was borrowing that money to place in a "trust". The cost of that trust was going to be an extra $127-$130 million to the district over 30 years. Thus, the Court decision is about $50 MILLION CHEAPER FOR THE TAXPAYERS THAN THE PROPOSED SETTLEMENT. The same holds true for Haverstraw Town and their proposed settlement. The trust was an illegal and poorly planned political attempt by Mr. Phillips and the School District to hide what is really going on, and they were willing to spend $50 million of our tax dollars to do that!! More importantly, they have a so called "expert" who, in my opinion, simply gives them and tells them what they want to hear for a large fee. People should be outraged over these shenanagans.

AUGUST 11, 2006 UPDATE: The Court has rendered a decision in the Mirant case as relating to the Bowline case. It is a complex, 151 page opnion, and can be viewed at the following link:

http://www.colehatchard.com/doc/Bowline_Decision_8-11-06.pdf

In summary, at first look I believe Haverstraw did much better than they would have under the proposed settlement agreement. Under the proposed settlement, the assessment of the Bowline plant was to have been reduced by about 70%. The following numbers show the actual reductions ordered by the Court for the 8 years involved (1996 was excluded from the case). In all years except 2001 the Court decision was much better than the settlement. However, a thorough review of the numbers, with interest and cost calculations must still be done in ordeer to fully digest the decision. I hope this helps as a quick initial overview:

YEAR PERCENT REDUCTION OF ASSESSMENT ORDERED

1995 28%
1997 37%
1998 40%
1999 38%
2000 61%
2001 70%
2002 60%
2003 63%

As noted, the settlement called for a reduction of 70%. I will provide additional information as it becomes available. STEVE

JULY 28, 2006 UPDATE: The proposed Mirant settlement is currently at a stand still, though a few developments are worth noting.

First, the Texas Judge and the New York Judge have agreed in the past few days that if a decision is required by the Court, IT WILL BE MADE BY THE NEW YORK JUDGE IN WHITE PLAINS, NOT IN TEXAS.

In addition, many of you also know that one of the primary reasons I have been opposing the Mirant settlement is because under that proposed settlement, the School District wants to borrow$230 million, even though only $100 to $120 million is required for the settlement. Aside from the money actually needed for the settlement, in an effort to "defer" (hide, actually) the real tax increase resulting from the Mirant case, the proposed settlement was going to allow the School District to borrow an "extra" $100 million to put in a bank account it calls a "Trust Fund". Then, over the next 7 or 8 years, the School Board was going to withdrawmoney from that fund to pay itself for operating expenses. All of this was going ot be done WITHOUT voter approval, as would otherwise be required. The primary problem with this plan is that aside from violatingNew York Local Finance Law, the COST of the extra borrowing would be about $130 million in fees and interest. Then, when the "trust" fund is depleted in 7 or 8 years, our taxes would skyrocket again. This scheme would have placed ourschool district in debt to the tune of almost a quarter BILLION dollars!!

Now, despite our blocking the Mirant settlement, the School Board is apparently still trying to borrow that money! It is beyond me how they believe they can do this legally, and this should be one of the issues we force them to answer at the Augustschool board meeting.

JUNE 23, 2006 EVENING UPDATE: Word came in late this afternoon that Mirant has REJECTED the proposal by Haverstraw and the school district to proceed with the settlement. If any further information is received, it will be posted here immediately.

JUNE 23, 2006 UPDATE: Despite what the school district and Haverstraw stated to the Federal Judge on Monday (when they finally looked at the settlement numbers), it looks like their meetings with Mirant this week proved fruitful - for somebody at least. Although the proposed settlement has remained substantially unchanged since Dodge Watkins and Howie Phillips rejected it in Court, they have now agreed to proceed with Mirant. As reported by the Journal News online today, it looks like they are just waiting for the final approval from Mirant. As I noted in prior posts, apparently Dodge is going to get that $200 million loan placed after all. That of course is the confusing part - he has 8 days left in our school district, yet he has been fighting adamantly to get this agreement signed so he can get that $200 million loan in place. I can't help but wonder why??

If their proposal to Mirant includes the Lovett plant, I see two problems with Haverstraw and the School District attempting to proceed in that manner. First, under the settlement, the Rockland County Industrial Development Agency will have to attempt to remove the Lovett plant from the tax rolls of Stony Point over the objections of the Stony Point Town Board. I will push to take the IDA to Court if necessary to stop this attempt. In addition, the school district wants to borrow over $200 million, with less than half going to Mirant. The extra $100 million or so is going to be placed in a savings account, which the district will draw from over the next 8 years to pay bills. Once it is depleted, we will owe that $100 million, plus the extra $127.5 in costs and interest. No folks, it is NOT OVER YET. Haverstraw and the school board have two choices - remove the Lovett plant from their proposed settlement, and REFRAIN from borrowing the extra $100 million, or face a long, drawn out challenge in every forum possible.

JUNE 19, 2006 UPDATE: A Court conference in the Mirant Bankruptcy matter was held today in Ft. Worth, Texas, with all parties (Stony Point, Haverstraw, the School District, Haverstraw Village the Village of West Haverstraw, Rockland County, and Mirant) in attendance. The primary purpose of the conference was to determine two issues:

1. Whether the proposed settlement would proceed without Stony Point; and

2. How the case would proceed in light of the Town of Stony Point rejecting the proposed settlement, opting for a Judge to decide the value of the Lovett plant.

At the hearing, Mirant spoke first. They advised the Court that they would like to proceed with the settlement even though Stony Point rejected the proposal.

Next, the County of Rockland representatives advised the Court of the following:

a. The County supports the settlement even without Stony Point's participation;

b. The County is not at fault for all the delays, and now there would be further delays because new documents would have to be prepared to proceed without Stony Point;

c. The County has tried to pressure Stony Point into agreeing to the settlement, but to no avail, and that they had no way to force Stony Point to agree.

After the County spoke, the attorney for the School District and the Town of Haverstraw spoke, and what they had to say was surprising, to say the least. He advised the Court that under the circumstances (Stony Point refusing to agree to the settlement), Haverstraw and the School District would NOT BE IN A POSITION TO PROCEED WITH THE SETTLEMENT. The Judge, apparently seeking clarification, asked if Haverstraw and the School DIstrict were "pulling out" of the settlement, to which their attorney simply responded, "Yes".

At that point, the Judge determined that there was no longer any need to hear from the other parties, and made a number of rulings from the bench, as follows:

1. He wants the case resolved within the next 4 months no matter what;

2. He prefers to have the value of the plants determined by Justice Dickerson in New York;

3. He indicated his desire that Justice Dickerson render the decision in the next 4 months;

4. If Justice Dickerson is unable to do so in 4 months, he would obtain copies of the trial documents from Judge Dickerson, hold any hearings necessary, and render the decision; and

5. He requested copies of the trial documents, and scheduled hearings in the interim, in order to prepare to make a decision if Justice Dickerson does not do so.

The conference then ended.

After the conference, I inquired as to the status of the case before Judge Dickerson in New York. I was advised that the trial has been completed, and both parties have already submitted their final briefs. The only thing left to do is for our side to submit a "reply" brief, which should be easily completed within 30 days.

One final comment, and one question to ponder:

1. The Whiteman firm has been representing all parties in this matter, and under normal circumstances, would be responsible for the reply brief. In light of their recent actions, I can only hope they do not try to walk away at this late date in an effort to delay filing of that brief, which, as they are well aware, would place us in a severely prejudiced position, and would be completely improper;

2. If the settlement agreement was such a great thing for the School District and Haverstraw, and Stony Point was not paying far more than it should, as we have alleged, why did Haverstraw and the School District suddenly change their minds and decide not to proceed withou Stony Point?

Until next time - STEVE

JUNE 15, 2006 UPDATE: On Wednesday evening, June 14, the Stony Point Town Board voted 4-1 to reject the proposed Mirant settlement. The very terms of the agreement, as well as the representations made to us by "our" lawyers, Mirant management, and everyone else involved, were very clear - all parties (Town of Haverstraw, Village of Haverstraw, Village of West Haverstraw, the School District, and the Town of Stony Point) would have to agree to the settlement, or Mirant would not proceed. After painstaking analysis and consideration, Stony Point rejected the proposal for many reasons, including the following:

1. Under the settlement, Dodge Watkins and the School Board planned on borrowing $200 million dollars, which was DOUBLE the amount they actually needed for the settlement. They were going to take the extra $100 million, put it into a bank account they refer to as a "trust", and draw from it over the next 7 or 8 years for operating costs, giving the false impression that taxes did not go up as much as they really did. When that money runs out, we would be stuck with the debt, costs and lost revenue. The cost of that $200 million loan over a 30 year period will be approximately $255 million ABOVE the loan itself, totaling $455 million dollars - almost a HALF BILLION DOLLARS;

2. Our internal analysis indicated that the settlement agreement put us in about the same position as we would be in a "worst case" scenario in Court;

3. Our attorney (John Nye, the same attorney that represents the School District and Haverstraw) advised us in executive session before we voted that neither of his other clients, the Town of Haverstraw or the North Rockland School District, requested or reviewed any analysis or exposure estimates relating to a court decision versus the settlement agreement before they voted to approve the settlement;

4. Mr. Nye also advised us in executive session that he concurred with the conclusion that in all probability, our worst day in court would be no worse than the settlement agreement;

5. Mr. Nye confirmed for us that Mirant's taxes to be paid on both the Lovett plant and the Bowline plant would be frozen for at least the next 7 years;

The result, of course, was that by a 4 to JUNE vote, Stony Point rejected the proposed settlement.

THEN, WITHIN HOURS OF THAT VOTE, Mirant notified the Bankruptcy Court in Texas, by motion (click on the following link to read the motion) that it still intends to proceed with the settlement with the Town of Haverstraw, the School District, the County of Rockland, the Rockland County IDA (the agency that freezes Mirant's taxes), the Village of West Haverstraw, and the Village of Haverstraw.

http://www.colehatchard.com/doc/show_case_doc_14151,178704,0,MAGIC,0,1.pdf

Under normal circumstances, this would have been a good thing for Stony Point. It would allow us to either get a prompt decision from the Supreme Court on the value of the Lovett plant, or deal with Mirant directly, without the interference of the school district. However, what this REALLY means is that Dodge still gets to force US to borrow all that money. In essence, this is why I am disgusted:

Dodge Watkins was fired from his previous job as Wappingers Superintendent. We voted down his outrageous school budget. Stony Point rejected the Mirant settlement proposal to stop Dodge from borrowing hundreds of millions more. Dodge is leaving our community forever in a few weeks with a half million dollars in taxpayer cash in his pocket. And he still isn't satisfied - he hasn't destroyed us enough. He's doubled the number of principals and assistant superintendents in the district, doubled their salaries, and quadrupled their benefits and cash bonuses, yet his response to the budget rejection is to fire school nurses and maintenance workers, cut the School Resource Officer from Farley, cancel an emergency roof repair on an elementary school, charge little league to play ball, and threaten to make first graders walk to school. And that is still not enough.

The real Dodge Watkins legacy is going to be his last act, days before he leaves - he is about to put our community almost A HALF BILLION - YES BILLION - DOLLARS in debt, between his planned loan, costs and interest, and he is doing so with arrogant impunity. I don't know what to say. WE are the community. WE are the "District". WE are the "Town". When was this taken away from us? Who the hell does Dodge Watkins think he is, why are the school board members sitting there allowing this to happen, and why are we allowing all of them to do this to us? Why is a man who is walking away in a few weeks still in such unfettered control of our destiny?

We've protested, voted, attended meetings in mass, and all the other things we are supposed to do in a democracy, and one man is about to destroy all that we and generations before us have worked for. We have pleaded with "our" school board to act, but they continue to blindly support Watkins - I don't know if it is fear, ignorance, or something else - but it IS wrong. This guy is leaving us with more debt than the gross national product of some third world nations, he will not have to pay a single dime of it, and we are told there is nothing we can do about it. Well that is NOT ACCEPTABLE TO ME.

So DODGE: Hear me now - You have more money and more lawyers than me (tax dollars of course), but I promise you that if I can't stop you from consummating these outrageous acts, I WILL at least do the following:

1. I will utilize every available tool I have to block the borrowing of all money not required to actually repay Mirant - including the "trust" money which is clearly a loan to pay operating expenses, regardless of how you term it;

2. I will assure that Bankruptcy Judge Lynn is made aware of the alleged payment of $96 million to Mirant, who will then "gift" it back to the District to fund the trust - if it truly is a payment to Mirant, under the law, it would be creditor property; if not, it is an illegal attempt to subvert the Local Finance Law;

3. I will track every single dollar of that $200 million you want to borrow, for as long and far as it takes me, including the finders, LEGAL, and brokers fees, and ALL other expenses, and if so much as one penny of that money ends up where it shouldn't, I will stand on top of that penny until someone goes to Federal prison; and

4. I will challenge any action of the IDA that is not in complete compliance with the law, including any attempt to retroactively adopt a revised PILOT program, or to remove the Lovett plant from the tax roles of the appropriate assessing jurisdiction, Stony Point.

And that’s just the beginning.

So I ask - HOW AND WHEN DID IT GET THIS BAD??

QUESTION #1: Steve - We are in the Austerity budget, which, by state law, limits the increase to 3.x% over last years budget. How then can the increase in taxes be 42% versus the 46% we had voted down? Said differently, how is it my no vote did not spill over into Mirant? I voted the budget, inclusive of the Mirant settlement down. Was there a special vote I was not aware of? Please advise. Thanks.

ANSWER: No, there was no special vote - just another little trick by the school board. When I asked them that question, they told me that it is their opinion that they have the right to settle Mirant, borrow the money for it, and increase our taxes by the needed 39% extra as an "exception" to all the applicable rules, laws, and the recent budget rejection!

Obviously I am furious over this. First of all, I think they are wrong and what they are doing is illegal. More importantly, even if they could do this legally, what about the 4,200 voters and taxpayers that just told them not to?

In response, I have a few things lined up. First, I am preparing a challenge to the election of Sarah Keenan and Kenneth Ingenito to the school board as a result of what I see as substantial election irregularities. I hope to have the documents finalized and ready to file by the end of the week.

I also started preparing a petition challenging the School Board’s planned borrowing of the “extra” $100 million for the Mirant case, against the wished of a majority of the taxpayers and voters, which I believe violates New York State Local Finance Law.

I have also committed to prepare an analysis of the Mirant settlement versus court decision situation. This is necessary so we can all make a rational, well informed decision on how we should proceed. The next Q & A below discussed that further.

The only real problem I am having, of course, isn't the law or the papers, it's actually time. I could really use about 30 or so hours each day!! Nonetheless, I am marching forward, and these items WILL get done.

So the bottom line answer to your question is yes, you are correct in your suspicions, and yes, we will be doing something about it!! Thanks. STEVE

QUESTION #2: I am wondering whether the potential legal fee we will incur to have our own representation(Stony Point) worth it? Is there that much to potentially gain or possibly lose? Are there any rough numbers yet? I just heard the meeting is cancelled for Tuesday until we have time to review documents we do not have in hand. Does that mean we don't even have any draft documents?

ANSWER: I am afraid that my answer to your questions here are, of necessity, somewhat circular. Right now, we really do not have legal counsel on the Mirant case, because “our” lawyers are also the lawyers representing the School District and Haverstraw, and substantial amounts of evidence exist that they are not particularly sensitive to the needs of Stony Point (in other words, I don’t trust them).

However, you have a point - do we really NEED a lawyer? Although this vote is effectively a vote on the second largest loan the Town has ever taken, and will reduce our largest taxpayer value by 60%, the overriding question is whether a litigated alternative is better, worse, or somewhere in between the proposed settlement.

One problem, of course, in answering this question at this time is that we have no reliable numbers to use for an analysis. The numbers I was provided in January were so far off, we fired the "expert" who prepared them (He still represents the school district and Haverstraw). Once I receive the proposed agreement, I can certainly prepare an analysis showing: 1) how much in back taxes we and the school district would have to pay Mirant and the County; 2) how much we and the school district would have to borrow; and 3) what the effect would be on Town and school taxes. But that's only part of it. We really should have an analysis of the possible outcomes of a decision by the New York State Supreme Court, so we know if there is there is any benefit in holding out for a court decision versus locking ourselves into a settlement which we know has problems. My thought is that an analysis should be done using three scenarios: 1) best case court decision; 2) worst case court decision; and 3) middle of the road, or most likely, court decision. Those figures should be in the same form as the settlement analysis discussed above (total repayment, loan amount, and tax effect).

I intend on starting just such an analysis as soon as I finish up the challenge to the school board elections which I have been preparing. I hope to file that by the end of the week. It will take some time, though, as I'll have to do review the Lovett and Bowline numbers together so we can also analyze the school district results. Once I get that done, hopefully we will have the settlement papers so the settlement analysis can be done. Then we can do a real comparison, make some reasonable judgment calls, and come up with a decision on how best to proceed. I'll provide further information as I receive it. STEVE

QUESTION #3: Why vote on Mirant proposal at all; until we know who the owners of the Lovett Generating Plant and Bowline Power Plant will be? As long as Mirant has taken Con Edison and Orange and Rockland to court to dissolve their agreement and return the property back to the original sellers, wouldn’t there be a question as to the appropriate parties to the agreement?

ANSWER: I think the problem here is that the court will not wait for the outcome of that case, so we will have to decide if we want to settle or take a court decision anyway. Just like the tax case, the settlement should follow the plants, not the owners – however, without the settlement agreement in hand, we really don’t know if that issue is addressed either. Thanks. STEVE

The next four questions are actually split from a single question submitted to me. I broke it into seperate pieces in order to better facilitate a discussion: