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County ordered to pay ECMC Capital project funds already being allotted

A State Supreme Court justice on Wednesday said Erie County is obligated to provide $18.37 million to Erie County Medical Center for its capital improvements for 2004 and this year.

The county had been moving -- belatedly -- in that direction.

County Comptroller James M. Hartman signed an affidavit saying $3.1 million was available to demolish and replace a building on ECMC's campus on Grider Street. And the Legislature a week ago pledged the remaining $15.3 million when it agreed to borrow millions for county projects, including those at the hospital.

However, county officials had said they might not sell their capital improvement bonds until Nov. 15, because they wanted to determine whether Erie County's control board could borrow the money at less cost.

A consent decree worked out by the county and ECMC months ago said capital projects would be financed by Aug. 15. That deadline came and went amid uncertainty over how the government would patch its deficit.

Justice Joseph G. Makowski said that county officials should make the $3.1 million Hartman referred to "immediately available" and that he expected the county to advance the rest to ECMC as needed without waiting for the bond sale.

He set a new hearing for Sept. 29 to discuss how he would monitor progress, whether ECMC is entitled to interest and whether he should order the bonds be sold by a certain date, among other things.

"Today's ruling is significant to ECMC in a good way," said its lawyer, Anthony J. Colucci III of the firm Colucci & Gallaher. "The big picture is that all hospitals are challenged to find their capital money. Today, Erie County Medical Center found its capital money."

Colucci said ECMC was owed $7.7 million for 2004 and $7.4 million this year, plus the $3.1 million to raze one of its buildings. Yet the hospital's attempts to collect always seemed to take "four steps forward and three steps back."

"Today's ruling avoids any more delay," he said.

County Attorney Frederick A. Wolf said that so far, he sees no reason to appeal because county officials always accepted their duty to finance the hospital's long-term improvements.

"These items aren't troublesome to us. I currently do not think this is something that demands an appeal," Wolf said. "All this stuff was in the pipeline and moving toward this direction. No one was saying 'no.' "

One of Wolf's assistants, George Zimmerman, had told Makowski that ECMC contributed to the delay because as late as April 19 it was altering descriptions of its projects.

"I think it's clear, your honor, that ECMC didn't really know what it wanted to do with this money," Zimmerman said.

"The obligation to fund is not contingent on providing descriptions," Colucci countered.

The hospital's list of projects includes the purchase of new furnishings for offices and patient rooms, the purchase of medical equipment, upgrades to its information systems and structural improvements.

Past practice requires the medical center to send its contractor's invoices to the county for payment, so the hospital is not likely to get its $18.37 million in one lump sum.

Hartman could not be reached to comment Wednesday on whether advancing payments to ECMC from the general fund -- before the borrowed money is in hand -- will cause problems by draining cash.

Erie County often advances money from its general fund for capital projects, which is partly why county leaders now need to borrow more money, to meet everyday expenses.

The Legislature a week ago agreed to borrow $86 million for capital projects, but most of the money will go to projects authorized from 2000 to 2004: road improvements, energy upgrades at the Botanical Gardens, renovations at the courthouse, assorted needs for the new public safety center, and approximately $15 million for ECMC.

This year's capital bond issue should be the largest of the next few years. County Executive Joel A. Giambra's four-year plan says the government will winnow its capital needs to no more than $30 million a year starting in 2006, uncommonly low for the Giambra era.

ECMC and county leaders are embroiled in other court actions, since the county is eager to lessen the support it provides the medical center now that it is owned by a public benefit corporation and is expected to become self-supporting.

Giambra wants to cut a $13.5 million subsidy to ECMC next year. A trial date on that question has been scheduled for December in Makowski's court.

e-mail: mspina@buffnews.com

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