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City auditor quits post amid fiscal problems

City auditor Steve Pachla has submitted his resignation, effective Jan. 31, leaving it up to a successor to sort out Olean's tangled financial troubles.

Mayor David Carucci said Friday that Pachla did not provide a reason in a retirement letter handed over in a private meeting with him Thursday. His files have been sealed, but Pachla will remain a city employee until the end of January, to report for work as requested. A search for a new auditor will begin right away.

Carucci said he hopes to meet in executive session soon with the Common Council to discuss some options for the retirement package that Pachla, 55, requested during the meeting.

Pachla spent a little more than five years on the job. He has been unavailable to comment in recent days.

The resignation comes as the city has been forced to borrow millions of dollars. And, it comes on the heels of Pachla's revelation that he diverted capital bond funds to cover the city's other pressing cash-flow needs.

The resignation is not due to any negligence on Pachla's part, "as far as I'm concerned," said the mayor, who blames the cash-flow problems on the previous administration's poor budget planning. He also said aldermen are at fault for not knowing the score, required by the City Charter to obtain financial information needed to run the city.

A first draft of the state comptroller's recently completed audit of the city's finances is expected to be handed over to Carucci soon.

The results may not be known for at least 30 days, well after the Carucci administration reviews it and offers input for a final draft.

"Nothing has changed since we went after bonds for $3.8 million [to fill in cash deficits] and $3.4 million [to cover operating deficits] in August," Carucci said. "The Council says they are shocked [at the city's financial problems]. They have been told. Until they are hit in the head with a baseball bat in public they don't seem to understand anything."

In the meantime Carucci said he will have to organize a new attempt to legislate a $3.4 million bond that will allow the city to launch a badly needed East Olean sewer repair and upgrade, and to begin working toward complying with a state DEC consent order to eliminate sewage discharges into the Allegany River. The Council authorized borrowing $3.8 million in August.

"We have got to get our ducks in a row [for the 2007-08 budget preparation] and we don't have an auditor now," Carucci said. "We will keep going. We will continue to go forward. We can't do the sewer until we get the $3.4 million."

Carucci said he will talk about the situation in his State of the City address at 6 p.m. Tuesday during the Council's annual meeting in the Municipal Building.

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