Share this article

print logo

Control board fails to win support for borrowing Meeting doesn't sway county legislators

Erie County legislators got their sit-down with the state-appointed control board Monday and a chance to examine its claim that it can save money by taking over as the government's borrowing agent.

Lawmakers weren't swayed. They said the saving -- about $25,000 a year for 20 years for a county that spends $1.4 billion annually -- isn't worth the cost of prolonging a control board for decades.

Thursday, the full Legislature is expected to vote on the Erie County Fiscal Stability Authority's offer to borrow $52 million for road and bridge repairs and other work.

The offer now appears headed for rejection, continuing the stalemate over who borrows for necessary upgrades at the Buffalo Zoo, Erie County Medical Center, Erie Community College and Ralph Wilson Stadium, along with assorted bridges, roads and culverts.

To pay the bills for its new rain-forest exhibit, the zoo had to secure its own line of credit. Come January, the interest will hit $28,000 a month, an expense zoo officials never anticipated because they thought the county would make good on its $4 million commitment.

"There is not a compromise right now," Legislator Robert B. Reynolds, D-Hamburg, chairman of the Finance and Management Committee, said as he drew Monday's meeting to a close. Reynolds has said he does not want the control board to supplant Comptroller Mark C. Poloncarz as the government's borrower, as have Majority Leader Maria R. Whyte, D-Buffalo, and most members of the Democratic caucus.

Chairwoman Lynn M. Marinelli, D-Town of Tonawanda, says she wants lawmakers to acknowledge the control board's power and to avoid gridlock. She now is in the minority.

A few weeks ago, Poloncarz arranged a $52 million bond sale to pay for this year's improvements. But the control board took him out of the deal.

The board said it rather would handle the transaction with its own consultants and financiers, reasoning that the control board's superior credit rating could lower costs.

The state Budget Division estimated the control board can save $400,000 to $556,000 over 20 years. But the control board can't proceed without the Legislature approving a "declaration of need," as required by the state law that created the board and let it borrow money.

Lawmakers had demanded their own look at the numbers, and Monday they met with three of the six current control board members: Joseph Goodell, Stanley J. Keysa and Kenneth Kruly. A control board lawyer and financial adviser, as well as Kenneth Vetter, the board's executive director, also attended the session.

Goodell said the board wants to save the county money by acting as its borrower for years. Then, when the county can borrow more cheaply than the control board, the state authority would relinquish that role, Keysa said.

Control board officials downplayed claims of trying to prolong the agency or that the county comptroller would face difficulties returning to the bond market after an extended absence.

Unlike other distressed governments under state control, the county never has needed its control board to ensure access to Wall Street. Investors still snap up bonds backed by the state's largest upstate county.

"Are we setting precedent here?" asked Legislator Thomas A. Loughran, D-Amherst.

"You are accepting an opportunity to save money," Kruly responded.

e-mail: mspina@buffnews.com

There are no comments - be the first to comment