The Erie County Legislature, during a special session Thursday, unanimously approved a measure that will allow the control board to conduct short-term borrowing on the county’s behalf, saving the county an estimated $220,000 in financing costs.
Whether the county should conduct its own short-term borrowing, or use the superior bond rating power of the Erie County Fiscal Stability Authority – also known as the control board – had been a source of contention between County Executive Mark C. Poloncarz and the Republican-aligned members of the Legislature.
Poloncarz, a Democrat, last month declined to issue a declaration of need, allowing the control board to issue a $110 million revenue anticipation note on the county’s behalf to cover any cash flow shortage the county might experience through early next year.
Poloncarz had argued that, while he was in favor of borrowing at the cheapest rate possible, it was also about time the county began coming out from under the control board’s shadow.
Since March, Poloncarz said, he had been after County Comptroller Stefan I. Mychajliw, a Republican, to seek proposals from banks willing to underwrite the county’s bonds in order to see if any could offer an interest rate that was less expensive than the rate at which the control board could borrow.
The comptroller eventually solicited those proposals. Mark Cornell, a spokesman for Poloncarz, said Thursday that the Comptroller’s Office last Friday completed its analysis of those proposals showing that the control board offered the greatest savings, after which Poloncarz, on the following Monday, agreed to issue a declaration of need to conduct the county’s short-term borrowing through the control board.
However, in a statement Thursday, Legislature Majority Leader Joseph C. Lorigo, C-West Seneca, lamented that Poloncarz took too long to issue the declaration of need.
“Unfortunately, this has been the administration’s standard operating procedure with regard to borrowing,” Lorigo said in a statement Thursday.
“Each year, he has waited until the last possible moment to issue the declaration of need, which calls into question whether he believes in saving taxpayer money,” said Lorigo, who also is chairman of the Legislature’s Finance and Management Committee.
Cornell on Thursday dismissed Lorigo’s lament as political posturing.
“The county executive has said all along that before deciding whether or not to request a declaration, he wanted to see who could borrow a short-term note cheaper, the county or the control board. The only way we could find that out is after the comptroller did his (request for proposals) and did his analysis,” Cornell said.
The Legislature at its June 26 session approved a resolution strongly urging the county executive to issue the declaration of need. Before going into its summer recess on July 24, the Legislature approved the revenue anticipation note in order to ensure that the money could be bonded and county government remain operational, Lorigo said.
The bonding process is expected to be concluded at the end of this month.