Control board rejects Collins’ fiscal plan
Control board rejects Collins’ fiscal plan
County executive resists borrowing demand; budget director is resigning at end of month
By Matthew Spina
Updated: 05/16/08 6:38 AM
Erie County’s state-appointed financial control board swiftly rejected County Executive Chris Collins’ fouryear financial plan Thursday and remained as a so-called hard control board, demanding that it borrow millions of dollars on the government’s behalf.
“I would suggest this control board is trying to nitpick our county like no other county in the state,” Collins responded later, insisting he will never let the control board borrow for Erie County.
“The word ‘never’ can be used in capital letters,” he said.
The control board says it can save taxpayers money on repayment costs, but like other state authorities, it must exist as long as it has debt.
Collins, the County Legislature and County Comptroller Mark C. Poloncarz want the panel dissolved long before the 30 years it would take to repay the next loan, or the year 2039, the longest the board can survive under the state law that created it. The elected leaders want to borrow money the old-fashioned way, through the comptroller.
“I don’t see where they are bringing any value to the taxpayer,” Collins said of the control board after its Finance Committee rejected his fouryear plan and the full board unanimously ratified the decision minutes later, 6-0.
It was the day’s second blow to the Collins administration. Earlier, Budget Director Beth A. Kornbrekke told her staff she would resign at month’s end. Collins had selected Kornbrekke from one of his companies, where she served as controller. But she felt uncomfortable in one of county government’s most demanding and high-profile jobs.
“She is comfortable being a numbers person, but not with being the public face of the department,” said Grant Loomis, a spokesman for Collins.
Collins, Kornbrekke and her staff had fashioned a financial plan that showed Erie County can balance its budgets through the year 2011. Collins figured that by satisfying the control board with a reasonable four-year plan something former County Executive Joel A. Giambra was never able to do the state overseers would relax into an “advisory” role.
Then, as a panel of advisers, the control board could not block Poloncarz, Collins and the Legislature from borrowing the $86 million they need to rebuild crumbling roads such as Wehrle Drive, shore up rusting bridges, complete this year’s upgrades to Ralph Wilson Stadium and continue with the makeover of the Botanical Gardens and the Buffalo Zoo, among other things.
The $86 million includes the money that should have been borrowed for 2007’s summer construction season, too, because the same debate about who can borrow raged last year and no bonds were sold for capital projects.
When the control board’s Finance Committee first reviewed the four-year plan May 8, it pounded Kornbrekke with questions and asked her to provide written answers. She provided the responses in a pile of documents more than an inch thick. But within six minutes Thursday it became clear the Finance Committee would reject the four-year plan.
“It is the opinion of the staff and board members who have reviewed the submission that the substantiation isn’t there,” said Executive Director Kenneth J. Vetter. He suggested a more cautious sales tax forecast and found that the Collins team had overestimated the savings that will come from keeping jobs vacant and from a new round of union contracts, new technology and efficiency ideas.
Vetter, in a report that laid the foundation for the full control board’s vote, also said Collins should not count on revenues from the Seneca Nation’s new Seneca Buffalo Creek Casino since they were originally destined for City Hall, nor should he expect $21 million in efficiency grants from the control board when the panel has just $16 million left to dispense.
The board members called it premature for Collins to present a four-year plan so early in his first year in office.
“It just is prudent as businessmen to take a wait-and-see attitude,” said Vice Chairman Robert M. Glaser.
Though state law implies the control board should now recommend its own four-year plan, the board has never done so and will not start now. The members said they do not expect that the county’s elected officials would follow it.
Control board Chairman Anthony J. Baynes said that if the panel did write a four-year plan, it would include the millions of dollars that could be saved by letting the board borrow on the government’s behalf.
With its far-better credit rating, the board can save on repayment costs, about $2 million in today’s dollars over the 30- year life of the $86 million loan. Baynes said the savings could reach $6.5 million if the board arranges subsequent loans.
Collins said the board has an agenda. “This board wants to be a hard board,” he said. “They want to exist for 30 years.”
So what does everyone think about this?
