IN 1`HE UNYFED STATES DISTRICT COURT
`_ __ . · FOR THE DISTRICT OF BELAWARE
DONALD M. DURKIN CONTRACTDWG, INC. ) Civil Action No.: O4-0163 GMS
) 1 .
Plaintiff, )
vs. )
` }
- CITY OF NEWARK, HAROLD F. GODWIN, ).iURY TRIAL DBMANDEB
JOHN H. EEEARRELL, IV, §[email protected] CLIFTON, )
KARL Ci. KALBACHER, DAVID J. ATI~llZ€Y, )
FRANK J. OSBORNE, JR., Clr·lRiSTlNA REWA )
AND URS CORPORATION )
Dezfendants, ) 1
)
vs. )
_ )
FEDERAL INSURANCE COMPANY )
)
.. .. · ‘ Third Party Oefeneiant. )
` AFHDAVIT OF CAROL S. HOUCK
STATE OF DELAWARE :
: ss
†COUNTY OF NEW CASTLE :
Carol S. Houck, being duly sworn, does clepose amd say:
1. I speak from personal lmowlecige and am competent to make this Affidavit.
2. I am employed by the City of Newsrlc ("Newarkâ€) as Assistant to the City Manager. l O
have held this position for nine yars. J
3. I spoke to Nadine Ei.ss1er‘o1’ St. Paul Travelers who advised that they could provide
I Newark with a $5 million bcmcl. ·
4. Newark cannot obtain a. supersecleas bond for $37 miilion because it does not have
H H sufficient collateral and the ammal premium wouid eeuse undue hardship tbr Newark
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broker Willis lnsuracnce Company who advised me that they could obtain a bond for $37 million
for Newark out that the premium would be approximately $700,000 annually and the bond
would need to be fully coilateralizecl. because of the size of the _l1»lClg'lT1B1‘Il1 and because Newark’s
tax revenue would not cover the judgment. Ms. Cole and Mr. Mulvaney also advised that the p
bond would. require liquid collateral in the form of cash or irrevocable line of credit.
6. I spoke to Randy Taylor of Delaware National Bank, wltich is Newark’s bank, regarding
obtaining. an irrevocable line of credit. Mr. Taylor advised me that it would take 10 days to
I prepare and that, stttriect to review, Newarlc could potentially only take an irrevocable line of
credit up to $15 million. The irrevocable line of credit would require that Newark pledge the
entire amount of its reserve investments.
7. . Newark’s outside bond counsel, Timothy A. Frey, Esquire, has advised me that Newarlds
City Cltaifteitprcvidcs no express authority to assume indebtedness through an irrevocable line of
credit to commit to reimburse amounts drawn thereunder.
8. The annual cost alone for a supersedeas bond, which is non-refundable, would cause
T . severe financial hardship on Newark. Newark will be forced to take the money {rom its self A
insurance fund, and as at consequence, this fund will be cut in half thereby eliminating coverage
for personal injury and property claims not covered by its liability insurance as well as all
workers compensation claims. Newark will be forced to repay the self insurance fund by
utilizing funds for capital improvements, which, for 2007, includes street repair and resurfacing,
construction of new electrical lines and services to ITI ect increased demand, and water quality I
improvement efforts associated with expanded EPA guidelines.
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9. If execution upon the judgment is permitted by the Court and lliurléin attaches City funds,
Newarkis payroll will be implicated which would cause immediate and potentially devastating l
harm to 30,000 City residents including 19,000 University of Belawere students because City
services will cease. The City payroll covers police services, trash pickup, operation of the water
., .. _ and sewer utilities, street maintenance, maintenance ofthe City fleet, buildiitg and fire
inspections, City Aldermans’ Court, bill collections, parks and recreation. which includes facility
maintenance etiforts, tree removal, bet`cre~ and after-school gzrograms, City preschool and other
soft services. l
- . Carol S. Houck -
swerm ro me auescmoen berm me me _2@g__ day or z~r¤vemba~,
i ‘‘`` *
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i, ` I ,,.,34, I .; · W>‘.izW.‘» ·,| •· it `p» A'1'5 3::·=_‘r·!
Notary Public JDANG. =' RREIT **;.5;,, _,-,w*'il»-. ..=
- , A more _ PueucwARé:>;ii,$ .j;s_ .——· ‘
r-·` " †- _ ` W OOMNWSION EQKPIHES
Case 1:04-cv-00163-GMS
Document 315-2
Filed 11/09/2006
Page 1 of 3
Case 1:04-cv-00163-GMS
Document 315-2
Filed 11/09/2006
Page 2 of 3
Case 1:04-cv-00163-GMS
Document 315-2
Filed 11/09/2006
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