Niagara County Treasurer David S. Broderick is asking the County Legislature for emergency borrowing authority to make sure county employees' paychecks and social services benefit checks don't bounce.
Broderick said Friday that the past two payrolls have been met with money that came in during the same week the checks were issued. He said the cash flow problem is only expected to deepen as the year winds to a close.
He is seeking advance authority to issue revenue anticipation notes, which are short-term borrowing vehicles, any time he feels they are necessary. The Legislature's Finance Committee will consider the measure Monday, and if it approves, the full Legislature will vote on it Tuesday.
Broderick said the county pays its approximately 2,000 employees every two weeks, on Fridays. The biweekly tab is about $2.2 million. "Right now, we're scrambling to cover payrolls," Broderick said.
He said the Sept. 7 payroll was met because the monthly sales tax collection arrived from Albany, and the Sept. 21 payroll was met with expected state aid payments. Broderick said the payroll this Friday will depend on the sales tax again.
"The problem is going to be the one on Oct. 19," Broderick said.
"That's what happens when you don't have a fund balance," said Budget Director Sharon Sacco.
The county's unappropriated fund balance, commonly called the surplus, has disappeared. Audited figures showed that at the end of 2000, the county's general fund was $368,000 in the hole.
Revenue anticipation notes generally mature in a few months. They are backed by the expectation of a scheduled revenue, such as state aid, that hasn't come in yet. Broderick said if authorized to do so, he would offer them to local banks for bidding. He said if he decides to issue such notes, he would have the borrowed money within a week.
"The budgets we've had over the last six or seven years, we've kind of strapped ourselves," Broderick said. The county either froze or cut the amount of property tax it collected for six consecutive years, before increasing taxes less than 3 percent for this year.
Making payrolls was never a problem when the county had a surplus, Broderick said. If there wasn't enough cash flow, he could dip into the surplus.
"Last year, it got a little tight the last three weeks," Broderick said. "Vendor payments were held up until after Jan. 1, when I got into the 2001 money."
Sacco said: "Last year at budget time, we talked about having a cash flow problem. No one wanted to listen."
Broderick said, "It's hard to explain to people, because I've got $45 million to $50 million in the bank." But he said that money is off-limits, because it includes the county's tobacco-settlement revenue, reserved for debt payments and major projects, and a large self-insurance fund set aside for property and casualty losses.
The county's largest union, the Civil Services Employees Association, issued a statement Thursday claiming that the county's fund balances were more than $39 million at the end of last year.
The union, through spokesman Ron Wolford, said it would be unable to provide a detailed analysis of its claim until Monday. Paul J. Roman, the county's chief accountant, said, "I can't comment until I know what they're talking about."
Sacco said she suspects the union is counting the tobacco money and the insurance reserve. "They have taken all the year-end financial data and completely misread it," she said.