Erie County Executive Chris Collins is pulling out of the sale of “mirror bonds” with the state-appointed control board, the compromise last year that was to provide cash for major projects but is now stalled by legal kinks.

“You start to ask yourself, ‘Why are we doing all of this?’ because it’s so convoluted,” Collins said this week.

While awaiting the proceeds from mirror bonds, county managers have paid for projects with money on hand, including from the windfall in sales-tax revenue delivered by shoppers from Canada.

But money managers still need the $37 million that was to be borrowed in 2007 for various improvements. So county officials have worked with the control board for months to tackle the dilemmas of mirror bonds.

This week, another issue arose. To Collins, Comptroller Mark C. Poloncarz and their attorneys, it seems insurmountable. So Collins late Friday formally notified control board Chairman Anthony J. Baynes that he will not pursue the deal.

Baynes said Collins is making too much of the issue and the board’s lawyers are working through it. Baynes still wants his board involved in borrowing money on the county’s behalf because the state authority has a better credit rating than county government.

“The ball is in their court, and they are playing with taxpayers’ money,” Baynes said, speaking primarily of Collins. “They should stop the nonsense and get this ball rolling. They are returning to status-quo politics.”

The latest snag emanates from the state law that created the “Erie County Fiscal Stability Authority” and governs its involvement in bond sales.

The law says any amount being borrowed “shall be consistent with the adopted budget and financial plan of the county.”

But the control board late last year rejected Joel A. Giambra’s 2008 budget and fouryear plan without offering a budget or fouryear plan of its own.

County officials still follow Giambra’s final budget, which the Legislature approved with minor changes. Still, the county’s lawyers wonder how the control board can assure Wall Street that the $37 million being borrowed is “consistent” with documents it never adopted.

With mirror bonds, the control board sells a set of bonds on Wall Street. Then, years later, when the county’s poor credit rating improves into the “A” range, those bond-holders swap control board-issued bonds for county-issued bonds. That swap would extinguish the control board’s long-term obligation, and the board could fade away if no longer needed as a watchdog.

Collins and Poloncarz have cited other problems:

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