Originally posted by RaginTaxpayer
I read all those memo's she sent to Giambra warning him of the crisis ahead.

They were on her county website.


05/21/02
COMPTROLLER NAPLES ISSUES AUDIT OF USE OF
MONIES FROM SALE OF COUNTY'S TOBACCO ASSET

Erie County Comptroller Nancy A. Naples today released an audit of capital project expenditures financed with funds received from the sale of the County's share of the National Tobacco Settlement. The purpose of the audit, which covered the period from January 1, 2001 to February 28, 2002, was to determine if the monies received from the sale of the County's tobacco asset were used in accordance with applicable guidelines.

"The County received $211.7 million in October 2000," Naples said. "The original plan was to invest the proceeds from the sale and to use about $30 million annually for approximately nine years for various operating and capital purposes. However, IRS concerns about using monies raised from the sale of tax-exempt tobacco bonds for working capital purposes resulted in these monies being designated only for capital projects," Naples continued.

The review of $18.9 million of expenditures recorded in tobacco capital projects (excluding payroll or debt service payments) identified about $1.4 million in charges that were deemed inappropriate. In addition, over $600,000 in charges were identified as questionable because their specific use was unclear. "Considering the size of the County's capital budget, there should be no problem using the tobacco funds only for appropriate purposes," Comptroller Naples noted.

"The Comptroller's Office worked with the Division of Budget, Management & Finance, as part of the year-end 2001 closing process to remove inappropriate and questionable expenditures from tobacco capital projects," Naples said. "Adjusting entries have reclassified $1.7 million of expenditures to the County Road Fund and $300,000 to the County General Fund," Naples added.

During the period covered by the examination, the audit also noted that detailed daily time records were not available to support over $8 million in payroll and fringe benefit costs recorded in tobacco-funded capital projects. "The issue is not whether the individuals involved received the proper amount of pay for the hours that they worked. Rather, the problem is that there is limited documentation to show that the work performed was related to a tobacco funded capital project," Naples said.

The audit also found that although projects financed with tobacco monies must have average reasonably expected economic lives of at least 17.79 years in the aggregate, thus far significant amounts have been used to pay for items whose useful lives are well below the required average. "County management needs to exercise care to assure that they comply with this requirement," Naples concluded.

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03/17/05

Comptroller Naples Criticizes County Parks Department
Cites Gross Mismanagement

Erie County Comptroller Nancy A. Naples today cited certain operations in the County Parks Department as examples of gross mismanagement.

“County parks have been closed since January, yet Parks Department employees remain on the payroll. Since the parks have been closed the County has paid nearly $500,000 in salaries for Parks Department staff. What have the parks workers been doing? Why have they remained on the county payroll?,” Naples said.

“It appears that mismanagement is not just a product of the County budget crisis. We discovered that a Park Ranger with a base salary of $44,000 was paid over $105,000 in 2004,” Naples added. In a letter to Parks Commissioner Angelo Sedita, immediate explanations were requested.

Comptroller Naples indicated that there is a need to look deeper in the operations of the Parks Department, as well as all County departments. “This is only one example of why it is imperative that we continue independent monitoring of County operations. The Comptroller’s Office has been so severely cut, I don’t see how we can continue to meet this need. This Office has been cut by nearly 66%, and the audit staff has been all but eliminated,” Naples continued. “The lack of audit oversight is a weakness that provides an opportunity for more and more abuse. Now more than ever, our taxpayers deserve a strong Comptroller’s Office. I will continue to fight to restore staffing levels in this Office so that we can continue to serve as the Taxpayers Watchdog,” Naples concluded.

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03/14/05

Comptroller Naples Calls For Discussion Of Deficit Financing To Help Solve The 2004-05 Deficit

In a letter released today to the Erie County Legislature, Erie County Comptroller Nancy Naples advised them that the operational deficit for 2004 was $106 million, the structural deficit of the County is $127 million, and urged the Legislature to consider deficit financing as part of the plan to balance the 2005 budget.

“Last week I released the preliminary 2004 deficit number and provided reports to the Administration documenting that deficit. My staff continues to finalize the reports that will be turned over to Deloitte & Touche, LLP, the County’s independent auditors. Those reports indicate a $106 million deficit resulting from 2004 operations. Any further adjustments to these results will be proposed by Deloitte & Touche as their audit progresses,” Naples said.

A quick review of the 2004 results and the 2005 budget indicates that the County has a deficit situation facing it in 2005 similar to what it faced in 2004. “The County has a structural deficit that has not been closed by the months of work the Legislature has done on the 2005 budget,” Naples stated.

“All of the fund balance is gone; the $32 million in fund balance budgeted for use in 2005 does not exist. Despite my warnings to the Giambra Administration about their ill-advised budgeting practices of the last five years, they continue in 2005: sales tax overestimated; turnover overestimated; fringe benefits underestimated and departmental revenues overestimated. Those are just the highlights,” Naples continued.

Naples’ staff has begun discussions with the County’s bond counsel to determine what is needed to effectuate deficit financing in order to help plug the growing deficit. “The obvious problems of the 2004 budget which I raised were ignored. The results are now known. Erie County needs to face the situation and realize that cutting alone is not the answer. It may be too late to raise revenues, but it is not too late to examine deficit financing to meet the needs of the County,” Naples stated.

“The County’s cash situation is precarious and the rating agencies have put us on notice that we must solve our problems quickly. Absent revenue enhancements, we need to look at alternatives in addition to cuts. One alternative we have not discussed is deficit financing. It is now time to put it on the table, work to close the 2004-05 deficits and begin work on the 2006 budget,” Naples continued.

Comptroller Naples urged the Legislature to ask the New York State Comptroller to conduct an audit of the County’s finances. “I am confident that my numbers will be supported in their findings,” she concluded.

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11/12/04

Comptroller Naples Critical Of Giambra's Red Budget

Despite Massive Layoffs and Drastic Cuts in Services Budget is "A Recipe for Disaster"

Comptroller Nancy A. Naples today issued her review of the County of Erie's 2005 Tentative Budget. In her letter to the Erie County Legislature and County Executive Giambra, Comptroller Naples said, "The 'Red Budget' is likely to produce a significant deficit, despite the draconian cuts that will occur if it is adopted. The reasons for this are that reserves are again being used, revenue estimates are overstated, and appropriations are understated. This is a recipe for disaster," she stated.

Comptroller Naples once again criticized the use of reserves to balance the budget, this year in the amount of $28 million. Naples noted in her letter that she has warned for many years against the use of reserves to balance the budget and that her warnings continue to be ignored. "Moody's and Fitch Ratings both downgraded the County's credit ratings this year," Naples noted, "citing the County's large reliance on one-shot revenues and reserves. Wall Street will notice the use of reserves once again, and they will not like what they see."

Naples said that the County's practice of using reserves in the budget produced three consecutive deficits in 2001, 2002 and 2003 totaling $96 million, that another significant deficit is expected for 2004, and that barring significant changes to the proposed budget, another significant deficit will occur in 2005.

The Comptroller's report notes that in addition to the use of $28 million in reserves, the "Red Budget" also includes multi-million dollar, overly-optimistic estimates of sales tax revenue, as well as materially understated appropriations for personal services and fringe benefits.

The Comptroller's report detailed the following:

The 2005 Tentative Budget projects an unrealistic Sales Tax growth of over 10%. The actual year-to-date growth compared to 2003 has been a negative 1.3%.
Debt Service payments would increase from $34.8 million to $56 million over the next four years, and will have to be funded by a different revenue source given that tobacco proceeds will no longer be available to pay for debt service after 2006.
Fringe benefit appropriations provided in the Tentative Budget appear to be significantly less than what will actually be required.
Employee Turnover Account estimate of $9.5 million is very optimistic and could result in a significant deficit for 2005.
ECMCC subsidy of $4 million will likely put severe pressure on the Corporation's 2005 operations.
East Side Transfer Station is budgeted with an implied deficit of $1.7 million.
Interest Earnings estimated by the Comptroller's Office were arbitrarily increased $2.2 million by the Administration.
The Tentative Capital Budget totals $80.5 million, inconsistent given the extensive cuts in services and personnel that will occur if this budget is adopted.
"For years I have warned the County Executive and the Legislature that the practice of using reserves to fund current operations is a recipe for fiscal disaster. This budget is the result of years of following this reckless practice. I urge the County Executive and County Legislature to work together to pass a budget that makes fiscal sense," Naples concluded.

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03/14/05

Comptroller Naples Calls For Discussion Of Deficit Financing To Help Solve The 2004-05 Deficit

In a letter released today to the Erie County Legislature, Erie County Comptroller Nancy Naples advised them that the operational deficit for 2004 was $106 million, the structural deficit of the County is $127 million, and urged the Legislature to consider deficit financing as part of the plan to balance the 2005 budget.

“Last week I released the preliminary 2004 deficit number and provided reports to the Administration documenting that deficit. My staff continues to finalize the reports that will be turned over to Deloitte & Touche, LLP, the County’s independent auditors. Those reports indicate a $106 million deficit resulting from 2004 operations. Any further adjustments to these results will be proposed by Deloitte & Touche as their audit progresses,” Naples said.

A quick review of the 2004 results and the 2005 budget indicates that the County has a deficit situation facing it in 2005 similar to what it faced in 2004. “The County has a structural deficit that has not been closed by the months of work the Legislature has done on the 2005 budget,” Naples stated.

“All of the fund balance is gone; the $32 million in fund balance budgeted for use in 2005 does not exist. Despite my warnings to the Giambra Administration about their ill-advised budgeting practices of the last five years, they continue in 2005: sales tax overestimated; turnover overestimated; fringe benefits underestimated and departmental revenues overestimated. Those are just the highlights,” Naples continued.

Naples’ staff has begun discussions with the County’s bond counsel to determine what is needed to effectuate deficit financing in order to help plug the growing deficit. “The obvious problems of the 2004 budget which I raised were ignored. The results are now known. Erie County needs to face the situation and realize that cutting alone is not the answer. It may be too late to raise revenues, but it is not too late to examine deficit financing to meet the needs of the County,” Naples stated.

“The County’s cash situation is precarious and the rating agencies have put us on notice that we must solve our problems quickly. Absent revenue enhancements, we need to look at alternatives in addition to cuts. One alternative we have not discussed is deficit financing. It is now time to put it on the table, work to close the 2004-05 deficits and begin work on the 2006 budget,” Naples continued.

Comptroller Naples urged the Legislature to ask the New York State Comptroller to conduct an audit of the County’s finances. “I am confident that my numbers will be supported in their findings,” she concluded.

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