you have to remember, the 10% fee was negotiated between the state and city for administering the collection of the surcharge.  hence, there was no intimidation by the state.  after a couple of years  it was found that the 10% was too high and should be reduced, but the city did not try to do so (though berg was screaming bloody murder).  the suit was brought by a 3rd party not the city.  your thinking and the author is looking only at the suit, this is a funding issue and now that the state has taken control of the funding, they can dictate how and where the funds are coming from and how to be used.  further, the 10% skim was never considered as part of the funding from the surcharge to be used for construction.  hence, any recovery based on equity does not give the city to the right of the funds to be used for construction or for any other matter.  it does sound unfair if you take the narrow view.  you have to look it as a funding issue, the correct perspective.