Erie County’s comptroller need not worry, top officials with the state-appointed control board said Wednesday: The $75 million will arrive by the end of this month.
Comptroller Mark C. Poloncarz called a news conference early in the day to warn that without a $75 million bridge loan by Sept. 30, he could not pay the government’s October bills. Poloncarz said he wouldn’t have the $24 million to meet the Oct. 3 payroll, nor would he be able to forward $42 million in sales tax proceeds to towns, villages and school districts.
Cultural groups would not collect the county aid they were expecting, and the county’s vendors would have to wait even longer for payment, he said.
“Some people will criticize me for saying the sky is falling,” Poloncarz told reporters. “However, it is my duty to warn . . . ”
“I would rather warn about a problem and have it fixed than have the county grind to a halt,” he said.
Indeed, his alarm was not welcomed. The top control board director saw it as unnecessary. And County Executive Chris Collins said that if Poloncarz foresaw a dire situation, he should have acted sooner, not a few weeks before the cash ran out.
Even though Erie County’s financial health is improving, it runs short of cash each year while awaiting federal and state reimbursements for social programs and other sources of income.
In the past, county comptrollers bridged the gaps by selling one-year “revenue-anticipation notes.” But in recent years, Erie County’s state-appointed control board has insisted it will arrange the government’s loans. With its superior credit rating, the board can borrow at better terms.
The elected leaders who handle county budgets — Collins, Poloncarz and county legislators — have not wanted the control board to borrow. They don’t want the Fiscal Stability Authority existing for decades just because it has long-term debt. The dispute has raged for about two years.
Recently, Collins agreed to let the control board handle a short-term loan. The Legislature concurred and let the control board arrange a long-awaited $90 million loan for major repair projects and building upgrades. The loan will have to be refinanced in a year.
Collins is now asking the Legislature to let the control board borrow the $75 million that will keep the government operating beyond Sept. 30. Lawmakers are expected to act on the request today.
“The control board has assured us they can accomplish the borrowing and have the cash in the bank,” Collins said, while adding that if Poloncarz were to sound an alarm, he should have done so sooner.
“It wasn’t until Sept. 4 that Mark Poloncarz said we need to do the borrowing and gave us less than a month to deal with the issues,” Collins said. He was speaking of the date that Poloncarz asked the Legislature to authorize a bridge loan, though he’d been telling lawmakers for months that a cash infusion would be needed this year.
Kenneth Vetter, the control board’s executive director, and Robert Glaser, its acting chairman, were in New York City on Wednesday to meet with a credit rating agency, Moody’s Investors Service, as a precursor to both loans.
Vetter said that if the Legislature today lets the control board secure the bridge loan, the $75 million will be in the county’s accounts on Sept. 30.
Copyright 2008 - The Buffalo News
