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Finger pointing as Evans tries to recover from financial brink

Ask anyone in Evans who is responsible for the town going broke, and you get lots of answers. Mostly, they say, it's because of the other guy.

There's no disputing the crisis. Erie County issued a short-term loan of $980,000, and the Bank of Evans recently agreed to lend the town $600,000 so the town could cover its payroll.

Evans Town Supervisor Mary K. Hosler realized the town was in serious jeopardy when it attempted to float a new revenue anticipation note last month. Nobody bought it, in large part because the town had missed payments on prior short-term borrowings.

“When the RAN didn’t get bought in the marketplace, that’s when the panic set in for me as a supervisor,” she said.

Most agree Hosler, who took office Jan. 1, came into a mess, and is trying to dig the town out of a decade of problems.

A deficit showed up in the water fund in 2006, according to a state audit. Poor record keeping exacerbated problems when the town combined $12.6 million borrowed for a water project with the rest of the town's funds. A state audit showed that $2 million of that money was used to cover operating expenses, mostly for the town's troubled water operations.

"I'm sick of being thrown under the bus for something I wasn’t there for," said former Town Supervisor Robert R. Catalino II. "Whatever they did with that money, I have no idea, I wasn’t there."

Hosler replaced former Supervisor Keith Dash, who also worked full time as a teacher in the Lakeshore Central School District, she said. And Dash, who had been a Town Board member before winning election as supervisor, took over the supervisor's office from Francis J. Pordum. Pordum had replaced Catalino.

"That hole was there before I took office," Pordum said, adding that he did not know the bond money had been used to pay some operating expenses.  "They used money from that bond to run government operations."

Catalino denied spending money inappropriately. He said when he was supervisor, the Town Board knew about a deficit in the water fund of more than $400,000.  He said there was discussion about raising water rates, and then the thinking was to roll the deficit into the upcoming bond for the capital project. But when the money from the bond came into the town in 2008, he was out of office.

Dash could not be reached to comment, but a Dash supporter, Paul Pinto, said there has been too much finger pointing at Dash. He said the previous administrations made financial mistakes.

"The boards did not do a good job of oversight and the supervisors were sloppy," he said.

A state comptroller's office audit this year that looked at the previous four years concluded that "the board is not in a position to properly monitor the town’s financial condition.”

Hosler accused prior administrations of “dragging their feet.” Bad audits resulted in corrective action plans that weren’t followed. Mandatory documents to assess the town’s financial stress were supposed to be filed with the State Comptroller’s Office annually but weren’t done for years.

Hosler said it’s ultimately the role of the board and the supervisor to show proper fiscal oversight.

“There are obviously a lot of people who dropped the ball,” said Comptroller Stefan Mychajliw, who repeatedly praised Hosler for tackling the town’s financial burden head on.

Looking ahead, staff from Mychajliw’s office will assist the town in developing a long-range fiscal plan to help get the town back on its feet. The State Comptroller’s Office has also offered to assist. Meanwhile, Hosler imposed a spending and hiring freeze earlier this month and is hoping to contain expenses through personnel attrition. She also laid off all part-time positions.

The town has 87 full-time positions left and operates its own Police Department, which represents a major expense. Hosler said she has made no decisions regarding future cuts in town services, but that everything is on the table. She also said the town may have to pursue a deficit budgeting model in the future.

Timeline of Evans budget crisis

Jan. 1, 1996 to Dec. 31, 2007: Supervisor Robert R. Catalino II

Catalino signs agreement May 2, 2007 for Erie County Water Authority to take over town water system.  In August, 2007, Town Board authorizes $12.6 million in bonds for to pay for water system improvements before the takeover.

Jan. 1, 2008 to Dec. 31, 2011: Supervisor Francis J. Pordum

Town Board authorizes borrowing nearly $1 million in December 2011 to keep government running until tax revenue comes in.

Jan. 1, 2012 to Dec. 31, 2015: Supervisor Keith Dash
State audit of 2007-2012 says town officials allowed sustained water fund operating losses, including a loss of $423,134 from 2009-11, and on Jan. 4, 2011 the Town Board improperly authorized lease-purchase agreement.
March 2013: Erie County water Authority approves a 10-year lease-management agreement with the Town of Evans.
Jan. 1, 2016-present: Supervisor Mary K. Hosler
State audit issued in 2016 says town never followed up on 2012 action plan. Evans secures loan from Evans Bank and Erie County.
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