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Board allows county to borrow $100 million But members demand role in other loans

Erie County officials will be able to avoid a government shutdown now that the state-appointed control board grudgingly agreed Friday to let them borrow $100 million.

"I'm prepared today to vote to allow the county to make this borrowing as a way of showing that we are willing to work together," said Joseph Goodell, a control board member who admitted he had decided only hours earlier to allow the loan.

"However," he continued, "I expect that, from now on, the county will reciprocate, and we will find the county willing to work together on a wide range of issues."

Specifically, he and other members expect county officials to let the control board in coming weeks borrow the millions needed for road and bridge repairs and other long-term improvements.

After spending time and money to attain a high-level credit rating, the Fiscal Stability Authority, as the state control board officially is known, is itching to take out a loan on the government's behalf, arguing it can borrow more cheaply than the county.

The Legislature and County Executive Joel A. Giambra have refused to go along, saying requests for such borrowings must come from lawmakers and the county executive. The board, they add, has yet to prove its case.

Many lawmakers harbor the long-shot hope that state leaders might dismantle the control board if convinced that oversight is no longer needed. But the board would be able to avoid that if it has outstanding borrowings.

In recent summers, the county has needed to borrow money to pay bills until state reimbursements for expensive social programs arrive later in the year. Until Friday, the control board had been reluctant to let Comptroller Mark C. Poloncarz proceed with the $100 million one-year loan he had arranged with Bank of America.

Anthony J. Baynes, board chairman, said the board could save $146,000 on repayment costs if it borrowed the $100 million with its superior credit rating.

Poloncarz, however, said Baynes did not include $50,000 for professional fees and the fluctuations in interest rates that would determine the final cost for county taxpayers.

The control board could have rejected the loan, forcing the Legislature and Giambra to ask the board to borrow the money. But the county was fast running out of cash. Poloncarz's money managers figured they would be unable to pay vendors or meet the payroll by the end of this month.

"We are not about to shut down the county because of this," said Kenneth Kruly, a control board member. "So I will reluctantly vote for this thing today. But I'm doing so with the feeling that the taxpayers are losing $146,000 in the process."

County leaders had asked influential state politicians to pressure the control board to approve the loan. According to some reports, county workers planned to protest at the homes and workplaces of control board members.

The board's five remaining members needed only a few minutes Friday afternoon to vote unanimously to authorize the loan.

e-mail: mspina@buffnews.com

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