This week’s movement in Albany has brought Erie County one step closer to borrowing money on its own.
After the Erie County Legislature convened a special session last Friday to request the power to borrow without Erie County Fiscal Stability Authority approval, state lawmakers answered the call. Now the legislation is on its way to the desk of Gov. David Paterson, who holds veto power over the move.
At their Thursday session, legislators approved a resolution to acquire property around Tonawanda Creek Road so the county can reconstruct the street. But the $3.2 million local share for the plan is contingent on the county’s borrowing package, just one of many reasons Paterson should OK the bill, said Legislator Robert Reynolds, Jr., D-Hamburg.
“For the last two years, we’ve sat back and had to discuss the borrowing,” Reynolds said. “I hope after this we can go forward as a community.”
Chairwoman Lynn Marinelli, D-Town of Tonawanda, compared the repair project to the replacement of the Lincoln Park roadway, saying the project had been around for quite a while and needs to be completed.
Erie County Comptroller Mark Poloncarz said the county is on its way to fiscal stability, having achieved three consecutive years of balanced budgets with surpluses. With three bond ratings in the investment grade category, Poloncarz said the county is ready to borrow on its own.
“This state legislation enables the county to go to Wall Street for our standard borrowing needs and to get desperately needed county road, highway, bridge and other projects moving again after eighteen months of delay,” Poloncarz said.
ECFSA Executive Director Kenneth Vetter said they’re still moving along under the hand-shake agreement reached a month ago with the county executive, comptroller and legislature chairwoman to pursue a bond anticipation note deal. The delays are in part due to the comptroller’s office not getting estimates on the cost for the county to borrow to the FSA for comparisons, Vetter said. Even if the state legislation is signed into law, that doesn’t mean the FSA can’t borrow for the county.
“Regardless of what happens in the state legislature, if we can save (up to) $500,000, that legislation won’t prevent us from being able to borrow,” Vetter said. “The question is, if the numbers come out to show we can save taxpayers money, what will the county do?”
At this point, most county leaders seem to be on the same page, aiming to go around the FSA to get the borrowing done. Poloncarz said he’s hopeful this round of borrowing will be the first step toward improving the county’s credit.
“Resolution of the ongoing stalemate and confirmation that the county will be able to borrow under its own authority as long as it has at least two investment grade ratings will further assist the county in its ongoing efforts to achieve a ratings upgrade from the credit rating agencies, all of which benefits the taxpayers,” Poloncarz said.
While Vetter said the FSA is also looking to improve the county’s credit situation, having the county do its own borrowing isn’t the only way that can happen. Ratings companies keep up with municipalities and some, like Buffalo, have seen their ratings increase while doing no borrowing at all, Vetter said.
“The city didn’t do their borrowing for years and had three rating increases over that period,” Vetter said. “The example is only two blocks away from city hall.”
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