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Legislators stand up to control board Faceoff stalls funds for county projects

The Erie County Legislature has few powers over the state-appointed control board. So for the most part, lawmakers only have moaned and groaned about what they decry as the board's heavy hand.

Last week, however, they refused to let the control board become the county's borrowing agent, saying they don't want the state authority hanging around for decades longer than needed just to handle payments on a multiyear loan.

"Some fights are worth fighting," said Legislator Thomas A. Loughran, D-Amherst.

This latest stalemate pits the control board against the Legislature and County Comptroller Mark C. Poloncarz. The board recently barred Poloncarz from arranging the county's next loan for major projects because it wants to handle the deal.

But the County Legislature has refused to make the required request because it does not want the board supplanting Poloncarz. So no one, as yet, can borrow the $52 million needed for roads, bridges, sewers and ongoing upgrades for the Buffalo Zoo and Erie Community College, among other things.

Control board members say they focus on the taxpayers' long-term interests. But lawmakers and Poloncarz are so frustrated they hope state legislators and Gov. Eliot L. Spitzer will examine the board's recent actions to determine whether it is more of an obstacle than an aid.

For example:

*In January, the board said this year's budget faced a potential $15.5 million deficit, so it remained a "hard" control board with authority to overrule elected leaders. But the county is on pace to end the year with a surplus, without the board altering the budget's structure.

*When Poloncarz and the Legislature sought in June to obtain the one-year loan needed each year until reimbursements for welfare programs arrive, the board delayed approval to the eleventh hour, risking a shutdown because it wanted to handle that arrangement. It relented, allowing Poloncarz and his staff to borrow the funds, because it expected to handle the next loan.

*In September, the county's labor negotiators asked the board's support in telling arbitrators that the county could not raise the pay of patrol deputies in the Sheriff's Office. But the board took a pass, after privately deciding to leave labor matters to the next county executive.

*When the Legislature, the county executive, the comptroller and the Buffalo Niagara Partnership endorsed a plan to sell the county's tax liens, the board balked, saying many companies were begging for the deal and forcing a new round of bids. Weeks later, only the same two companies bid on the business, and the best offer came in $7 million lower than before.

*Though board members said they dislike tax-lien sales, they allowed it with a caveat: The board's stable of financiers and consultants, not Poloncarz's, would borrow the money needed this year for the large-scale projects.

By selling long-term bonds, the Erie County Fiscal Stability Authority can hamstring any effort in Albany to dismantle it, in the same way the Thruway Authority will exist until it repays bonds decades from now.

Lawyers disagree on when the board, established under a law that runs for more than 30 pages, would fade away. One passage says its soft-control functions would end in 2012 if county leaders are balancing budgets. But the board cites a passage saying its mandate will extend to December 2039.

The county never has needed the board's help with borrowing money because it still is financially strong enough to sell bonds on Wall Street. But board officials argue that their agency can borrow more cheaply than Poloncarz and have spent about $50,000 in tax money readying the first loan.

The board needs only a request from the Legislature, which brought the matter to a head Thursday. Behind the scenes, the Legislature's dominant, 12-member Democratic caucus was deciding next year's chairman, and the contenders for that crown drove the debate.

In the end, the harder line advocated by Legislators Robert B. Reynolds of Hamburg and Maria R. Whyte of Buffalo won out over the compromises urged by current Chairwoman Lynn M. Marinelli of the Town of Tonawanda.

Lawmakers agreed to meet soon -- on their turf in County Hall -- with control board members. All borrowing costs are to be laid on the table with the same details Poloncarz provides when he seeks approval of a loan. Legislators then will discuss the best long-term course.

In the end, the tax liens, the linchpin that the board used to ensure it borrows the money, might not be sold this year, anyway. County Executive-elect Christopher C. Collins questions the wisdom of selling to a private company the right to collect and keep overdue property tax payments, saying the county should do that work.

The county has enough cash on hand to finance some major projects covered by the proposed borrowing, but that probably would leave its books out of balance at year's end.

Poloncarz, therefore, has said he would not allow such outlays until he is sure of obtaining a loan to replenish the county's checking account.

e-mail: mspina@buffnews.com

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