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Disagreement continues on who does borrowing

Nobody in Erie County government disputes this point: The county could save roughly $860,000 during the next 13 years if it allows a state-appointed control board to borrow on its behalf.

What elected officials can't agree on is whether it's worth giving up that savings to chase after a better credit rating for the county.

County Executive Mark C. Poloncarz and County Comptroller David Shenk want the county to do its own borrowing for big projects this year for the first time in six years despite the higher interest rate the county will pay. They hope that will mean a higher credit rating and lower interest rates in the future.

Six county legislators disagree, and they're pressing Poloncarz to change his mind.

"A majority of this Legislature is extremely concerned about him going forward with borrowing," Legislator Thomas A. Loughran, an Amherst Democrat, said of Poloncarz's plan.

The decision, however, is now in Poloncarz's hands, and his staff says he will direct Shenk next month to sell 13-year general obligation bonds to pay for $24.2 million in projects this year.

"The longer the county is out of the credit markets, the more difficult it is to re-enter them and continue our dramatic financial progress since 2009," Deputy Budget Director Timothy C. Callan said Thursday. "I want to be clear, re-entering the credit markets is one part of getting a rating upgrade and continuing our progress."

Callan was clear on another point in a meeting Thursday with legislators. This is no longer their decision since the Legislature authorized the borrowing in March.

"You approved the bond resolution," Callan told the legislators. "You directed the county executive and the comptroller to move forward with the borrowing."

Since that March Legislature vote, financial advisers for the Erie County Fiscal Stability have calculated the county would save roughly $70,000 a year during a 13-year period if the stability authority issued the bonds. The Comptroller's Office has since estimated the savings would be $66,000 a year.

"The consensus of the board is that this is a savings for the county, and there's a recommendation that Erie County take that savings," said Kenneth J. Vetter, executive director of the stability authority.

Because the stability authority has a better credit rating than Erie County, it has been able to borrow at a lower interest rate since it was created.

The potential savings have since given some legislators pause, and they spent more than an hour Thursday attempting to persuade Shenk and Poloncarz's staff to change their view.

"That all adds up," said Legislator Lynne Dixon, an Independence Party member from Hamburg. "Every penny counts."

Dixon and a coalition of four other legislators aligned with the Republicans told Shenk in a letter last week they would do "whatever is necessary" to stop the county from moving forward with its plan to borrow.

Other legislators support Poloncarz's proposal.

"If we don't borrow now, then when?" Chairwoman Betty Jean Grant, a Buffalo Democrat, asked. "If we don't take the training wheels off this year, which year?"