The Erie County Legislature on Thursday unanimously approved a $30 million road and bridge repair package for the 2015 construction season, along with a resolution to borrow $35 million for various capital projects.
But instead of resolving the issue, the vote reignited the debate on who should borrow the money: the county or its state-appointed financial control board.
It remains unclear whether County Executive Mark C. Poloncarz will seek to do the borrowing through the County Comptroller’s Office, or issue a Declaration of Need to request that the Erie County Fiscal Stability Authority – with its superior credit rating and ability to borrow at a lower interest rate – do the borrowing on the county’s behalf.
The Poloncarz administration has argued in the past that the county needs to start borrowing on its own to begin boosting its credit rating and get out from under the control board.
“We’re not going to market yet, though we did pass a resolution unanimously last week that called for the county executive to issue a declaration of need,” Majority Leader Joseph C. Lorigo, C-West Seneca, said after Thursday’s special session of the Legislature. “The Legislature still believes that the control board should do the borrowing to save money.”
Kenneth J. Vetter, executive director of the Erie County Fiscal Stability Authority, told lawmakers earlier Thursday at a committee meeting that borrowing through the control board could save the county, conservatively, about $588,000 in interest charges. County Comptroller Stefan I. Mychajliw said the county’s outside financial adviser estimated that the interest savings could be as high as $927,000.
County budget office officials remained skeptical, however. Deputy Budget Director Timothy C. Callan said his office had not received any documentation from the Comptroller’s Office supporting the claims of nearly $1 million in interest savings if the control board were to borrow on behalf of the county.
“The control board at least provided PDF files purporting to show what it would cost the county to sell bonds (and) what it would cost the control board to sell the bonds for 2015 work,” Callan said. “We would need some sort of analysis by the county’s financial advisors, First Southwest. Until the Comptroller’s Office does a request for proposal for underwriters to see what it might really cost … it is premature to even discuss who should be doing the borrowing.”
A portion of the funds from the bond sale would help pay for some of the bridge and road repair projects, as well as for other budgeted capital projects, including those at the three Erie Community College campuses, the Buffalo & Erie County Public Library and the Buffalo & Erie County Botanical Gardens.
This year’s proposed $29.4 million highway package is $8.3 million higher than last year’s. In his 2015 budget plan, which was later approved by the Legislature, Poloncarz allocated about $21 million in funding for roads and bridges.
The highway package includes a mix of funding sources, including $10.8 million in real estate transfer tax revenue from the county’s 2015 road repair reserve fund, along with $2.47 million in transfer tax surplus funds from 2014.