TRR photo by David Hulse Newly installed county manager Dan Briggs, left, and legislator Steven Kurlander (RC-9) listen to proceedings at the September session of the Legislature. It was the first time on the dais for Briggs, who took office last month. (Click for larger image)

By DAVID HULSE

MONTICELLO - Legal issues on Thursday prompted county legislators to reject a deal that would have provided Sullivan County with a $13.2 million upfront buyout of its interests in future payments from the multibillion-dollar national tobacco damage settlement.

The upfront payment was balanced against what would have been the apparent loss of some $25 million, which Sullivan is expected to receive over the 30-year payment plan for the settlement. The question being weighed was: would the tobacco companies stay in business long enough or find a way out of the settlement agreement.

Assistant County Attorney Tom Cawley recommended against the so-called "securiti-zation" plan at a special session of the Legislature's finance committee. Cawley explained an issue involving indemnification in the transferal of the county's rights to a local development corporation that would be responsible for actually issuing the bonds. "If it's not created legally, it may not qualify as a not-for-profit... if it fails, the county would be liable," he summarized.

"Thank you, but no thank you. Maybe in the spring," finance chair Cathy LaBuda (D-2) said quickly in response.

The bonds are being offered by a group of New York counties and a second offering is possible next spring, representatives of PaineWebber and First Albany said last week. But, they also gave the impression that the prices of the spring offering could be lower.

Legislative chair Rusty Pomeroy (D-3) also seemed concerned about the loss of the annual funding, some of which is already budgeted. "Securitize and the funding goes away. We need to resolve the legal issues first. We should sit it out for six or seven months and talk about policy then."

Leni Binder (D-7) spoke as a supporter of the bonding plan last week, but regrouped on September 26. "We'll wait until spring... If it's that good a deal, we won't be shut out."

"I don't see any great damage [in waiting.] There's still going to be money in it," said county manager and former treasurer Dan Briggs.