SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF BRONX:Part IA-1~ ------------------------------------------------------------X Index #260573/09 THE WESTCHESTER SQUARE/ZEREGA

IMPROVEMENT ORGANIZATION,INC., JOHN BONOZIO,SANDI LUSK,HANNAH ACAMPORA and JOHN LIU, Comptroller Of The City Of New York, Motion Cal. # Motion Seq. # Plaintiff-Petitioner(s), DECISION/ORDER Pursuant To Present: -againstHon. Geoffrey Wright Judge, Supreme Court SETH H DIAMOND,Commissioner Of The New York City Department of Homeless Services, THE CITY OF NEW YORK, SAINTS TOWER LLC and "JOHN DOE" and "JANE DOE," Defendant-Respondent(s), --------------------------------------------------------------X Recitation, as required by CPLR 2219(a), ofthe papers considered in the review of this Motion to: compel discovery PAPERS Notice ofPetition/Motion, Affidavits & E~ibits Annexed Order to Show Cause, Affidavits &Exhibits Answering Affidavits & E~iibits Annex Replying Affidavits & E~iibits Annexed Other (Cross-motion) &Exhibits Annexed Supporting Affirmation NUMBERED 1

2 3,4,5,6,7,8

Upon the foregoing cited papers, the Decision/Order on this Motion is as follows: This proceeding began with the reaction ofthe Petitioners to conversion on a building advertised as new luxury rental property to a shelter for homeless families. When I was confronted by this issue, I held in favor ofthe Petitioners, determining, after argument,that the use ofrental ofthe apartments for the sheltering of homeless families ran counter to the prevailing City rules for certain expenditures. The Petitioners have now had the opportunity to depose the Respondents, and now move for a declaration that the procedure employed in this instance is a violation of City regulations. For the reasons set forth below, I agree with the Petitioners,.and. so hold: 78

The history of the funding of the homeless shelter in question is suffused with subterfuge, double talk and, evasion. The case began with an application by local organizations upset by the opening ofa shelter for homeless families in what was advertised to the public as a luxury rental residence. Local applicants complained of being turned away when they made inquiries about renting apartments. Notwithstanding the use of the term luxury in publicizing the new building, the Department of Homeless Services ended up paying more than the general public would have paid in rents. The Department of Homeless Services defends this proceeding on the ground that it is absolved ofcompliance with the procurement of provisions of310(1)ofthe City Charter and PPB Rule 1-02(a), because the arrangement made concerning the apartments used to house homeless families did not involve the purchase ofgoods or services to be paid for out ofthe City treasury or out of money under the control of, or assessed by or collected by the City (citing City Charter 3101(1)). Whence cometh, once might ask,the funds used to cover the checks written to the landlord or community service in question? Obviously here, there is an internecine dispute over the interpretation of the City charter provisions for procurement ofservices. As a general proposition,"[W]here a statute is subject to interpretation, the court will in general defer to the construction given to it by the agency responsible for its administration, as long as the construction is not unreasonable or irrational(23REALTYASSOC. v. TEIGMAN,213 A.D.2d 306,308,624 N.Y.S.2d 155 [1st Dept.1995]). The opinion ofthe City Comptroller, who is responsible for the administration of the City exchequer is that the Department of Homeless Services has acted outside of its authority by entering into contracts for housing and related services without complying with the City Charters. In this back forth, I find myselfin agreement with the Comptroller, as the responsible entity, and I also hold that its opinion is neither irrational nor unreasonable. The Respondents do not convincingly challenge the notion that to supply housing is to supply a service [CITY OF NEW YORK v. SMARTAPARTMENTSLLC, 39 Misc.3d 221, 959 N.Y.S.2d 890,2013 N.Y. Slip Op.23054,"a transient resident is a consumer ofconsumer goods and/or services. "]The families installed in the St. Peters house, were at the least transient residents, if not more, considering the plan for the building. Iflong or short term housing is a service, then compliance with applicable procurement rules is required.In this case, both the original petitioners and the Comptroller argue that the Department ofHomeless Services made certain improper representations atthe beginning ofthe proceeds that were proved untrue.I so found in my second decision, after first coming down in favor ofthe Respondents. My change of heart was based on the actions of the Respondents, not their representations. I find the hair splitting by the Respondents to be strained. I challenge the Respondents, the operators of St: Peters, the program hired to oversee the residents of St. Peters, to describe the difference between the per diem period of operation and the contract period. Also, in the context of this proceeding, it is impossible to ignore the black op tenor surrounding the formalization of the agreement with St. Peters. The attorney for the Comptroller advised in open court that it could not, as I suggested, cut offthe money supply when it is dissatisfied with the submission by the Respondents. 79

The Respondents, having offered, in defense of their actions, reasons why the City Charter does not apply, offers no examples of when its requirements must be adhered to. To accept the Respondents' view,no procedure is necessary before committing the City to long term, potentially budget destroying expenditures. In essence, the Department of Homeless Services has made itself a little like a CIA black op, spending unbudgeted funds without apparent restraint. I find the attempts at hair splitting by the Respondents to be unpersuasive. To accept their arguments would be to vitiate, if not annul the City Charter. The motion for a declaration that the procedure followed in this instance is contrary to statute is granted. The Comptroller has cogently set forth a viable procedure already in existence for emergency procurement. There is no credible explanation as to why the Respondents apparently made no effort to make use of the emergency procurement procedures referred to by the Comptroller. The cases e~ibited by the Comptroller evidence a prompt response time when recourse to the emergency procurement system is employed. In sum,then, the Dept. OfHomeless Services circumvented established rules for the funding ofits activities without an acceptable excuse. I therefore declare that the practice of entering into housing/service agreements for clientele is contrary to law, and not excused by allegedly exigent circumstances. This constitutes the decision and order of the Court.

Dated: May 31, 2013 GEOFF'R~Y ~.~VR~GH1'



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