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Erie County among 14 local governments susceptible to fiscal stress

Erie County is among 14 local governments across New York State susceptible to fiscal stress, according to an update of an early-warning fiscal monitoring system put into place by State Comptroller Thomas P. DiNapoli.

Two downstate counties, Rockland and Suffolk, received more dire designations under the comptroller’s monitoring system.

“The increased number of municipalities in fiscal stress underscores the seriousness of the challenges facing local governments,” DiNapoli said in a statement Wednesday.

“By shining a light on the financial issues confronting our municipalities, we can jump-start discussions at the state and local levels about fiscal stress so that corrective actions can be taken,” he added.

The update is a follow-up to the release of the monitoring system’s initial scores released in June. It provides a designation for 88 local governments that either had not previously filed the necessary financial information with DiNapoli’s office or had been listed as “under review.”

The monitoring system examines nine financial indicators, including the ratio of a municipality’s fund balance to its overall general fund budget, whether its operating budgets are structurally balanced, what its poverty rates are, and whether its property values significantly changed.

Based on the measurements, the Comptroller’s Office designated municipalities as being in significant fiscal stress, moderate fiscal stress or susceptible to fiscal stress, or having no designation at all.

Despite Erie County’s designation as being susceptible to fiscal stress, Timothy Callan, the county’s deputy budget director, said its fiscal condition is not as dire as the comptroller’s report suggests. Compared with Rockland County’s score of 86.7, which topped the list as the most fiscally stressed local government in the state, Erie County had a score of 48.3.

“That score indicates to the Division of Budget and Management that we’re in a healthy place, and were it not due to the comptroller’s hyper-technical measure and ranking system ... Erie County would not have been rated as susceptible to fiscal stress,” Callan said.

He said the county was heavily penalized on the first two measures of the comptroller’s nine-measure warning system, which account for 50 percent of a municipality’s score. For example, he said, the county was penalized for paying its early retirement bill to the state in December instead of February to save several hundred thousand dollars in interest. As a result, the county has less cash available in that fund.

“The more cash reserves you have, the better your score,” Callan said. “If we had $80,000 more in cash, we would not have been awarded any penalty points under the comptroller’s early-warning monitoring system.”

DiNapoli said the fiscal stress monitoring system aims to help local governments pursue better long-range planning and honest conversations about how they operate when their regional economies, demographics and traditional revenue sources change.