LOCKPORT – Speakers at a public hearing Tuesday blamed Lockport’s elected officials for running up a deficit that the city now seeks to pay off by borrowing $5.35 million.
The Common Council voted unanimously to send the request to the State Legislature to pass a bill giving Lockport the authority for deficit financing a 10-year bond issue that also requires the city to report its situation frequently to the State Comptroller’s Office.
Mayor Anne E. McCaffrey said City Treasurer Michael E. White will have to drive a certified copy of the Council resolution to Albany today, since a fax or email isn’t legally sufficient.
McCaffrey said she is optimistic that the bill authorizing the bond issue will make it through both the Assembly and the Senate before the Legislature goes out of session Thursday.
McCaffrey said the city’s regional contact in the Comptroller’s Office, Kevin Burns, advised her Friday to seek the deficit financing rather than carry out a plan to again borrow money in the short term.
“We’re getting our fiscal ship in order,” McCaffrey said. She told the audience that the 10-year borrowing will cover deficits run up from 2011 through 2013, including the $2.7 million revenue anticipation note the Council approved Oct. 2.
“You are all responsible for this, except Mr. Franco,” Nanette Singleton said during the hearing. She was referring to Alderman Ronald A. Franco, R-2nd Ward, who joined the Council by appointment in March.
Singleton said, “The treasurer, Mr. White, is extremely incompetent and shouldn’t be in the job.” White is an elected official whose term runs through 2015.
The Comptroller’s Office said last fall that White gave the Council incorrect financial statements for 2012, showing the city with a small surplus when a state audit showed a $1.15 million deficit.
The Bonadio Group, an Amherst accounting firm that reported on the situation to the Council in March, said the Treasurer’s Office was understaffed because of the city’s failure to fill vacancies caused by illness, leading to incomplete and much-delayed bookkeeping.
“I don’t believe any of the problems we have in the city have to do with the workers,” resident Russell Bruning said. “It’s the people sitting here and our former mayor (Michael W. Tucker, who resigned Feb. 21) and Mr. White.”
“I think addressing what happened in the past isn’t going to help us in the future,” said Franco, who said he still hasn’t decided whether to run this fall for the rest of the Council term McCaffrey vacated when she succeeded Tucker.
McCaffrey said that without the borrowing, “there will be a serious cash-flow problem this summer that will endanger city operations.”
But the bond issue doesn’t cover any deficit the city may run up this year. The city is hoping to win a lawsuit over cuts it wants to make in Fire Department operations, which Fire Chief Thomas J. Passuite has predicted are on pace to run up as much as $1 million in overtime.
The Comptroller’s Office will be looking over Lockport’s shoulder for the next decade. The state has to determine the exact amount of the deficit before the city sells the bonds, and McCaffrey must send report explaining the reason for the deficit to Albany at least 30 days before the bonds go on the Wall Street market.