Town Council - Ways & Means Committee

Braintree Town Council MEMBERS Meredith Boericke, Chairwoman Committee of Ways & Means Peter Morin, Vice-Chairman One JFK Memorial Drive Joseph Reynolds, Member Braintree, Massachusetts 02184 Julia Flaherty, Member Elizabeth Maglio, Member MINUTES Wednesday, October 9, 2024 A meeting of the Committee of Ways & Means was held in Cahill Auditorium on Wednesday, October 9, 2024 at 6:30pm. Councilor Boericke was in the Chair. Clerk of the Council, Susan Cimino conducted the roll call. Present: Meredith Boericke, Chairwoman Peter Morin, Vice-Chairman Julia Flaherty, Member (REMOTE on phone) Elizabeth Maglio, Member arrived at 6:46pm Joseph Reynolds, Member Also Present: Erin V. Joyce, Mayor Kara Nyman, Chief of Staff Carolyn Murray, Town Solicitor Michael Esmond, Director of Municipal Finance Kristina O’Connell, Treasurer Approval of Minutes • None Old Business • None October 9, 2024 Ways & Means Committee 1 of 6 New Business • 24 053 Mayor: Authorization for Costs of Final Settlement of Weichel v. Town of Braintree, et al. or take up any action relative thereto Erin V. Joyce, Mayor stated tonight we are here to seek approval to continue on the process to fund and borrow for the Weichel settlement. A memo provided gives a little history and how we got here and what we are looking to do. Mayor Joyce summarized the below memo. Memo states: On September 19, the Town of Braintree reached a settlement agreement in principle in the matter of Frederick Weichel v. Town of Braintree, et al. Mr. Weichel sued the Town separately in 2020 and 2022, alleging injuries stemming from his arrest, imprisonment, and wrongful conviction for the May 1980 murder of Robert LaMonica in Braintree and alleging that the Police Department concealed the exculpatory evidence and the Town failed to properly train and supervise the Police Department. Mr. Weichel served more than 36 years in prison and lost most of his adult life as a result of this conviction. In 2010, new information was discovered in the case in response to a public records request to the Town of Braintree which ultimately led to Mr. Weichel's 2017 release from prison and exoneration. In lawsuits that followed his release, Mr. Weichel sued public authorities, including both the Commonwealth of Massachusetts and the Town of Braintree. In a 2022 trial with the Commonwealth, the jury awarded Mr. Weichel $33 million. However, his recovery was limited to $1 million by a law that protects the Commonwealth from liability exceeding $1 million. The Town of Braintree does not have the same legal protection from liability exceeding $1 million. Heading into settlement discussions with Mr. Weichel and his attorney, the Town of Braintree faced greater monetary exposure because of the uncapped liability and recent trends of large jury awards in similar cases tried against municipalities. After years of casework, legal consultation, and a lengthy mediation, the Town settled with Mr. Weichel for $14.9 million. In settling this matter, the Town was cognizant of the many jury verdicts around the country in cases of this nature that have resulted in substantially larger damages awarded. Before engaging in the mediation process that resulted in this settlement, my administration consulted with legal advisers as well as the Town Council. I am deeply sensitive to the Town's financial situation, particularly on the heels of layoffs and other spending reductions as well as our residents vote to approve a Proposition 2 1/2 override in June 2024. I have decided it is in the best interests of the Town to achieve this settlement in order to avoid the risk of a potentially much greater jury verdict. My administration is working diligently to maximize the amount of insurance recovery payments the Town will receive to limit the overall financial impact of this settlement. At the time of this filing, the Town has received $3 million in net insurance proceeds, with litigation pending against at least two additional carriers. In order to comply with the terms of the settlement with Mr. Weichel, the Town, in accordance with the Motion below, will seek approval from the Commonwealth's Municipal Finance Oversight Board (MFOB) to borrow the remaining $11.9 million of the settlement amount as we cannot afford to use existing Town cash reserve resources to fund this amount. Under state law, approval is required for a city or town to borrow for the purpose of paying a settlement. In seeking this approval, the Town will also October 9, 2024 Ways & Means Committee 2 of 6 request the option to issue debt using the state's qualified bond program, which typically allows towns to enhance their credit rating and lower borrowing costs. Finally, my administration is consulting with our financial advisors and bond counsel on the best way to issue and structure this debt to limit impacts on the Town's annual budget and finances overall. The measure below will require a public hearing by Town Council following the publication of the full motion in a local newspaper in advance of the hearing. I will personally attend your meeting to discuss and answer any additional questions. I greatly appreciate your support and collaboration on this solemn and urgent matter. Director Esmond explained where we are and where we still need to go. The settlement is at the $14.9 million. Right now we are estimating with a high degree of confidence there is a net proceeds of $3 million. Those will be paid directly to the plaintiff from the legal team we are using. We could see the $11.9 million that we need to borrow be reduced based on continuing litigation. We have at least 3 insurers that are still outstanding and may represent a meaningful number of additional recovery for the town. We might do some short-term borrowing while this plays out which would reduce the impact on the operating budget to only interest until we figure out what is the true town share. Director Esmond showed some scenarios on payments. We will work with our financial advisory team to help manage this. Councilor Morin stated I would be very hesitant to use Chapter 70 funds to pay for this. I do support this initiative. I support this settlement. I think it is in the best interest of the town putting it into the correct context, however. This is going to have a significant impact on our budget going forward. You’re leaving no stones unturned, and I appreciate that. Councilor Reynolds asked if the plaintiff would be open to a scheduled payment plan. Carolyn Murray, Town Solicitor stated it was broached and the $3 million was asked for now and we were given up to April 1st to figure out the balance. They are asking for the balance by April 1st. Councilor Maglio stated we are bonding and paying back the bond with Chapter 70? Carolyn Murray, Town Solicitor stated not necessarily. By state law we can only borrow for a judgment for one year. We are hoping to extend that payback period. We are hoping for the 15 year range. We are seeking with this vote to seek qualified bonds. The benefit is the repayment is guaranteed through local aid payment through the state so in theory it costs less to borrow the money perhaps. Those lending the money know they are going to get paid. It is just an option, giving us the flexibility to go that route. Councilor Morin stated why it bothers me is Chapter 70 money and unrestricted government money can be used by the town in a variety of ways. What this would be like if you pushed your snow debt out more than 2 years and you’re on your 3rd year they knock it off your local aide. It’s like that. Say they give us $10 million and take $300,000 towards the debt service, they will get paid first. Like a secured lender, they get paid first and everyone else lines up after. I don’t like the state coming in and saying you got to use any portion of your local aide in a certain way. If we are paying this on our own, we are still stuck paying for it. October 9, 2024 Ways & Means Committee 3 of 6 Director Esmond stated Bond Counsel recommended this for other communities that may not have a stronger credit rating like Braintree, it still might be advantageous depending on how much you are authorized to borrow and the terms. It could be a meaningful number. If we need to borrow in the future, unrelated to the Weichel matter, we could get a better rating. Councilor Maglio asked have we exhausted any kind of borrowing from the state. If we have to pay this can we get some sort of interest free allotment in the state budget. Carolyn Murray, Town Solicitor stated we have not exhausted all legislative options to date. Several of us have started to shine a bright light on this issue that Braintree is not alone and this could be an absolute crippling payment for a community. I still think there are options. Councilor Reynolds stated even though we are asking for $11.9 million it is not yet the full amount we will end up bonding. Carolyn Murray, Town Solicitor stated correct we hope for less. Chairwoman Boericke stated so we got $3 million from insurance and we think we will only at the most receive an additional $5 million from all the years of paying insurance companies. Carolyn Murray stated the biggest potential amount is with our current insurance carrier. Councilor Reynolds stated we are not actually going to abandon the funding to our schools from our local aid. I think that is an important message to get across. Mayor Joyce stated this is sobering and worst case scenario we will have to pay in ten years the $11.9. It is ironic the state has a $1million protection but then they can tell you how long you have to pay it off. All these restrictions make it incredibly hard for towns to absorb something like this. We will fight to improve that. Motion by Councilor Morin for favorable recommendation to the full Council: Motion: To see if the Town of Braintree will appropriate the sum of $11,900,000 to pay costs of a final settlement in the matter of Frederick Weichel v. Town of Braintree et al., No. 1:20-cv-11456-IT and Frederick Weichel v. Town of Braintree et al., No. 1:22-cv-12126-IT (D. Mass.) relating to the incarceration of Frederick Weichel and claims he asserted against the Town and Town officials, including the payment of all costs incidental or related thereto, which settlement shall contain such terms as the Mayor, upon the advice of the Town Solicitor, shall determine to be in the best interests of the Town, and that to meet this appropriation, the Treasurer, with the approval of the Mayor is authorized to borrow said amount under and pursuant to G.L. c. 44, §7(3) or any other enabling authority, and to issue bonds or notes of the Town therefor. In connection with the borrowing approved by this order, the Town is authorized to seek the approval of the Commonwealth’s Municipal Finance Oversight Board to (i) amortize such borrowing over a term in excess of one year, as permitted by G.L. c. 44, §7(3) and (ii) to qualify under G.L. c. 44A any bonds or notes authorized by this order, and any other bonds or notes of the Town that have been authorized but not yet issued as of the date of adoption of this order. The amount authorized to be October 9, 2024 Ways & Means Committee 4 of 6 borrowed by this order shall be reduced to the extent of contributions received by the Town from its insurance carriers in connection with this matter. Motion: by Councilor Morin to approve Order 24 053 Second: by Councilor Reynolds Roll Call Vote: For (5 – Boericke, Flaherty, Maglio, Morin, Reynolds), Against (0), Absent (0), Abstain (0) • 023 24 Councilor Boericke/Councilor Morin: Resolution - Weichel Council resolution DRAFT or take up any action relative thereto We would also like to submit a Resolution… (see copy of DRAFT) This will be on the Town Council agenda on October 15, 2024 Chairman Boericke stated we acknowledge that Mr. Weichel was wrongfully incarcerated. We want to persuade our delegation to help this from happening in the future. Councilor Morin stated it is an obligation of the Council to not only find a way to address a payment of the settlement but to address the oversight of the legislature and the erroneous convictions of how the law works. A statute provides a cap to the state for $1million. It does not provide similar protection to municipalities. I think this is just an oversight. When Mr. Weichel won his wrongful conviction case for $33million but only got the $1million from the state he said it wasn’t enough so went after the town. We would not be on the hook if the state did not have a cap. DRAFT: Whereas Robert Lamonica was murdered on May 31, 1980, on Faxon Street in the Town of Braintree, and Whereas Frederick Weichel was wrongfully convicted of Mr. Lamonica’s murder in August 1981, was wrongfully incarcerated for 36 years and subsequently had his conviction vacated in 2017 based on new evidence, and Whereas the Town of Braintree acknowledges his wrongful conviction, and recognizes his desire for compensation having missed out on most of his adult life, including the opportunity to have a family, to travel, or to enjoy all the normal experiences of life we take for granted Whereas, after his release from prison, Mr. Weichel filed a civil lawsuit against Commonwealth of Massachusetts, the Town of Braintree and other governmental entities for damages related to his wrongful incarceration, and Whereas, following a civil trial against the Commonwealth of Massachusetts a jury found in favor of Mr. Weichel and awarded damages in the amount of $33 million, and Whereas section 5 of Massachusetts General Law Chapter 258D limits the Commonwealth’s liability in civil actions relating to erroneous convictions to one million dollars effectively reducing the jury award to Mr. Weichel by $32 million and Whereas the statute does not limit the liability of municipalities in civil actions, leading Mr. Weichel to seek compensatory damages from the Town of Braintree, and Whereas, in light of the large settlements and verdicts awarded to individuals in erroneous conviction cases similar to Mr. Weichel’s, the Town of Braintree, through its Mayor and Town Council determined that it was in its best interest to enter into a settlement agreement with Mr. Weichel in the amount of $14.9 million, and October 9, 2024 Ways & Means Committee 5 of 6 Whereas the Town of Braintree is endeavoring to recover compensation from the nine insurance companies who were paid annually to provide coverage to the Town of Braintree over the last four decades for claims of this nature, and Whereas, due to the age of the claim and disagreements over coverage obligations, the Town of Braintree has been forced to initiate legal action against all nine of its insurers, and Whereas the current residents of the Town of Braintree will bear a substantial financial burden relating to actions that were taken decades before many of them resided in Braintree or were even born. Now Therefore be it resolved that the Town Council, directs its legislative representatives to petition the Great and General Court of the Commonwealth to pass remedial legislation that will provide cities and towns with the protection provided the Commonwealth by section 5 of Massachusetts General Law Chapter 258D, and to further create a compensation fund for individuals who have been erroneously convicted, providing them justice and fair compensation without imposing an undue financial burden on cities and towns. Motion by Councilor Morin for favorable recommendation to the full Council: Councilor Morin stated I move to adopt this Resolution. Motion: by Councilor Morin to adopt this Resolution Second: by Councilor Maglio Roll Call Vote: For (5 – Boericke, Flaherty, Maglio, Morin, Reynolds), Against (0), Absent (0), Abstain (0) It was unanimously voted to adjourn the meeting at 7:49p.m. Respectfully submitted, Susan M. Cimino Clerk of the Council Documents provided for Meeting • 24 053 Mayor: Authorization for Costs of Final Settlement of Weichel v. Town of Braintree, et al. • 023 24 DRAFT Resolution - Weichel Council Resolution October 9, 2024 Ways & Means Committee 6 of 6