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THE BUFFALO NEWS
Collins, control board spar over money
Cost of borrowing becomes contentious as capital improvement program stalls
By Matthew Spina NEWS STAFF REPORTER
Updated: 05/03/2008 7:11 AM
Erie County’s sorely needed capital-improvement program fell into a mess Friday during a shouting match between County Executive Chris Collins and the state-appointed control board.
Collins questioned the board’s motives and said it had a credibility problem, given its wildly inaccurate forecasts of year-end deficits when the government had ended three straight years with a surplus.
Control board members, specifically Chairman Anthony J. Baynes and Vice Chairman Robert M. Glaser, said Collins sounded like “a politician,” given his adversarial tone with a board he had pledged to work with.
They flung insults and accusations on their way to a stalemate over who will borrow the millions of dollars needed to: repair roads and bridges, rebuild Wehrle Drive, fix the prison roof that fugitive Ralph “Bucky” Phillips pried through, and continue the routine upkeep at Ralph Wilson Stadium, among other needs.
The control board insists it can borrow the millions more cheaply than the government itself, but by law the board needs a request from the county executive before it can borrow money on the government’s behalf.
The government’s elected leaders — meaning the county executive, the comptroller and the Legislature — don’t want the control board to borrow money because it must then exist, at taxpayer expense, for the decades it will take to repay the loan.
The elected officials, however, cannot borrow on their own without the approval of the “hard” control board.
So it’s a standoff between the six members of the Erie County Fiscal Stability Authority and the elected leaders. Both sides say the other should be blamed if important repairs to Erie County’s decaying infrastructure go undone.
If this sounds familiar it’s because it’s a repeat from 2007, when Joel A. Giambra was county executive. Giambra feuded with the control board, which eventually was cleared to borrow for the government — sort of.
The Legislature and Comptroller Mark C. Poloncarz agreed they and the control board would jointly sell “mirror bonds” on Wall Street. But the lawyers and underwriters proceeded to stumble over the costly problems with mirror bonds — until the new county executive pulled the plug on March 28.
Collins said the elected leaders should be free to borrow on their own, without control board involvement, as Erie County had done in its pre-control board days.
He devised this strategy: He would give the control board a sound plan to balance budgets over four years. Then the control board, seeing a four-year plan it liked, could revert from its powerful “hard” phase to advisory status.
Poloncarz, Collins and the Legislature don’t need the permission of an advisory control board to borrow money.
Collins on Friday presented his four-year forecast to the control board, which has 15 days to review it.
Baynes thanked him, then asked him to stick around for a while.
Minutes later, a board lawyer unveiled a six-page statement for the board’s approval. It shot down the critics and reaffirmed the board’s stance: It would be “inclined to reject” the county’s sale of bonds unless county officials can show their repayment costs are cheaper — a difficult task with the county’s poor credit rating. The statement recommended the county executive turn to the control board to borrow for capital expenses.
With Collins seething in the front row, the statement passed unanimously.
Control board officials said they can save taxpayers $2 million over the 30-year term of the $87.6 million loan.
But Collins and other county officials believe they might be able to get state legislators and the governor to dissolve the control board before 30 years. Collins and the others believe any savings should be balanced against the cost to run a control board, now about $600,000 a year.
When Collins reached the podium to respond to the control board’s vote, the arguments grew with taunts, challenges and veiled insults from both sides.
“Mr. Kruly, I thought you had a financial background,” Collins told board member Kenneth Kruly, a county budget director in the 1990s, when Kruly tried to spin one of Collins’ arguments against him.
Baynes tried to call off Collins.
“I wish you would not insult my members, please,” Baynes said.
Collins vowed that within the next four years, as his duty to the taxpayers, he would seek state legislation to dissolve the board.
Glaser, the managing partner for a local accounting firm, returned to the fray.
“What happed between the point in time you were elected on a platform of supporting the control board and now? Now you are against it. That sounds like a typical politician to me,” Glaser said.
“Well if you want to insult me you can,” responded Collins, who ran for office as a nonpolitician. “I answer to the taxpayers . . .”
“That’s not an insult,” said Baynes. “You are a politician.”
“I answer to the taxpayers, I don’t answer to your board,” Collins said.
“The law says you do,” Baynes said.
Collins later told reporters that he, Poloncarz and the Legislature need to determine which major projects can proceed with money on hand. He was especially concerned about road and bridge repairs during the summer construction season.
As for the control board: “They require a ‘determination of need’ from me in order to borrow, which is something I will never give them,” he said.
mspina@buffnews.com
Copyright 2008 - The Buffalo News
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