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Paul Millus Quoted in Long Island Herald, "Consent Decree Will End Housing Suit"

Dec 12, 2013Litigation & Dispute Resolution

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The residents of Island Park have dodged a $5.4 million bullet that would have cost every homeowner in the village more than $1,130, thanks to a federal consent decree that will dramatically reduce the fine, which was imposed on the village in 1995 in connection to a lawsuit alleging housing discrimination.

The consent decree was signed on Nov. 8 by Village Attorney Paul Millus and U.S. Attorney Loretta Lynch.

There are still two steps that must be taken before the decree is official, however. The Second Circuit Court of Appeals must remand the case back to the U.S. District Court for the Eastern District of New York, and U.S. District Judge I. Leo Glasser must sign off on the agreement.

Millus said this week that those steps should be completed shortly.

The agreement will allow Island Park to end the lawsuit by paying the federal government a total of $1.96 million, most of which would be earmarked for efforts to ensure that the village aggressively seeks minority homeowners. The payment represents nearly half of the village’s entire 2014 budget of $4.1 million.

The settlement includes $568,000 in fines, and up to $300,000 to hire a new village official who would establish a fair-housing program designed to attract 17 new African-American homeowners to Island Park over the next four years. The rest of the money would fund the program.

The decree allows the village four years to pay off the judgment, beginning in 2017, but requires that nearly $1 million be divided among three escrow accounts within 60 days of the court’s approval.

Millus told the Herald that the agreement is a great deal for the village and its taxpayers. “The sins of the fathers need to be resolved,” he said. “We don’t have to pay the $5.4 million and the 9 percent interest each year that attaches to the judgment, and the insurance company — National Casualty Company — will pay $900,000. This is a fresh start for the village, and it’s as much about the future as it is the past. Enforcing the entire judgment would have destroyed the village. “We would have had to say, ‘Take it and run it yourself.’ You can’t leave a village vulnerable like that.'

“The government and the village have engaged in complex negotiations in the past four years,” Millus added. “This is an appropriate settlement that benefits the residents of Island Park.”

In addition to the initial $1 million, beginning in June 2017, the village will have to pay $21,000 per month for 78 months to satisfy the remainder of the judgment.

Millus said that about $1.06 million would be funded by tax increases that would begin in 2017, but that it is still too early to know just what those increases would be.

In addition to the monetary punishment, there are other sanctions as well, stemming from the village’s acknowledgment in the decree that it discriminated against minorities more than 20 years ago, when the federal government built minority housing in Island Park, but the houses all went to political insiders and locals. According to court papers, as of last month, only three black families owned homes in Island Park. The 2010 Census lists 89 African-Americans as residents of the village, about 1.91 percent of its population.

In accordance with the decree, the candidates for the fair-housing administrator’s job must be vetted by both the village and the federal government, and the court must approve the selection. In addition, all employees of the village must undergo yearly anti-discrimination training.

The administrator will develop an affirmative marketing plan to support African-Americans who want to buy homes in the village, and must identify and develop sources of funding for prospective minority homeowners.

The village has four years to attract an additional 17 African-American homeowners. According to Millus, the federal government wanted to make that number a demand, but it was negotiated down to an “anticipated number.”“Four years down the road, we’ll look at what we’ve got and whether or not there was any discrimination involved, and then we’ll re-evaluate the situation,” he said. “There are no new homes being built under the program, nor is there additional money involved for subsidizing homes or for low-cost mortgages. This is a market-based solution. … [I]f we don’t get the anticipated number, then we’ll see if it’s due to market conditions or to discrimination. We just want to give everybody a fair shake.” Millus said that he would attend a Jan. 9 town meeting to detail the agreement for residents and to answer their questions. “People have a right to complain,” he said. “But they don’t have the right to make up their own facts. There has been a lot of misinformation, and we will clear that up in January.” No time or site for the meeting has been determined.