The Niagara Power Coalition is finalizing a settlement deal that could end a $37.5 million lawsuit filed by its former executive director, Mark Zito.

Members of the coalition, which represents seven local municipalities and school districts, entered into executive session during its meeting Thursday to discuss the lawsuit Zito filed in August 2007, which claims he was not properly reimbursed for his work in negotiating a settlement with the New York Power Authority in support of the relicensing of the Niagara Power Project.

As a result of the settlement, the power coalition’s entities will receive $9 million annually for the next 50 years to use for projects along the Niagara River Greenway, cash for capital projects and cheap hydropower.

Zito’s attorney, Steven Cohen of the Buffalo-based firm Lorenzo & Cohen, told the Niagara Gazette he has been in settlement negotiations for the past eight months with the firm Nixon Peabody, which was hired to defend the coalition as a whole. He said both parties have agreed terms of any settlement will be kept confidential. While he didn’t attend Thursday’s meeting, he believes a proposal from the coalition is reaching final approval.

“That’s my understanding, but nothing has been set in stone yet,” Cohen said. “We have discussed rough parameters, but I haven’t seen a final proposal.”

Cohen later added, “It will be very much in the taxpayers’ best interest if they’re able to settle because going to trial would present the Niagara Power Coalition and the seven entities with great exposure.”

The coalition consists of Niagara County, City of Niagara Falls, the towns of Niagara and Lewiston and the Niagara Falls, Lewiston-Porter and Niagara-Wheatfield school districts. Each entity has a chosen representative sitting on the coalition and any agreement must also receive support from the individual boards.

Niagara County Legislature Chairman William Ross, who also serves as chairman of the coalition, confirmed Zito’s case was discussed in executive session Thursday, but said a settlement proposal hasn’t been finalized.

“We’re not at that point, but we’re moving along,” Ross said. “... people are still taking (a settlement proposal) back to their respective entities. We’ll meet again on Nov. 18 and I expect we’ll move forward then.”

Reached by phone Thursday night, Nixon Peabody partner Stan Widger Jr. said he would “neither confirm nor deny” settlement talks are taking place.

Zito’s suit claims the coalition and its members had agreed to pay him a bonus commensurate with his bargaining performance on the settlement with the power authority. According to his estimates, the deal is worth at least $1 billion to the coalition’s entities over the next 50 years.

He had been seeking $30 million for breach of contract, $2.5 million for the value of services rendered and $5 million for “great emotional stress and anxiety” stemming from his ongoing dispute with coalition members.

Both Cohen and Zito have said the lawsuit could’ve been settled a long time ago for $300,000, but that figure is now off the table. Cohen declined to say how lucrative the potential settlement could be.

“When I receive it, I will present it to Mr. Zito and he will decide whether to accept it,” Cohen said. “I’m optimistic that a resolution to all parties can be reached.”

Back in May, State Supreme Court Justice Richard Kloch ruled to eliminate all but one of Zito’s case actions. Afterward, Cohen said the judge not dismissing the entire case against the coalition was an optimistic sign and leaves Zito eligible for anywhere between 5 to 15 percent of the settlement’s total value, based on industry standards.

The coalition has started the appeal process in hopes of having the final action eliminated.

Zito, who suffered a stroke earlier this year, declined to comment Thursday, saying he’s focusing on his health condition and leaving the lawsuit in the hand’s of his attorney.