COUNTY WASTES $406,650 ON CAPITAL BORROWING
County Executive’s refusal to borrow through the Control Board wastes taxpayer dollars
(Buffalo, New York) – Erie County Comptroller Stefan I. Mychajliw announced the close of the sale of the county’s bonds. Over the past several months there has been disagreement between the Legislature and the County Executive over which entity should borrow on behalf of the county, the Comptroller or the Erie County Fiscal Stability Authority (Control Board). County Executive Mark C. Poloncarz refused to sign the necessary paperwork that would have allowed the Control Board to borrow, forcing the Comptroller to do so.
“Now that the bonds have sold, the true cost of the County Executive’s unfortunate decision has come to light. It was $406,650 more expensive for the county to conduct the borrowing than for the Control Board. Hundreds of thousands of the taxpayer’s dollars were wasted on the County Executive’s decision,” said Comptroller Mychajliw. The higher borrowing costs are attributed to the County having a lower credit rating than the Control Board. “I want to be clear that my hands were tied on this decision. The County Executive forced this issue on me. I did not want to do this,” Mychajliw continued.
The bonds were sold to fund various capital projects, totaling $28,851,784 and Sewer District improvements totaling $2,789,666. Bond term lengths range from twelve to fourteen years. “With few exceptions, this is an annual function the county goes through in order to have cash on hand to start capital projects. The most visible projects are road and bridge work, improvements to Ralph Wilson Stadium, classroom upgrades at ECC and an investment into a Library Bookmobile,” said Comptroller Mychajliw.
Several of the projects the Administration and Legislature agreed to borrow for are less than the $406,650 the County wasted on conducting the borrowing itself. “Had the County Executive chosen not to throw away that $406,650, we could have delivered more to the taxpayer,” said Mychajliw.
Earlier this year, the Comptroller released an audit of the Buffalo and Erie County Public Library that revealed they had spent over $420,000 on out of town lawyers and lobbyists to create their own taxing authority, similar to a school district. The Comptroller touched on this point to highlight another area where borrowing costs could have been reduced.
“Reckless spending of taxpayer dollars is something I work toward stopping. Today, the county borrowed $250,000 to buy the Library a bookmobile. We are going to pay interest on that, and it will end up costing us even more,” said Mychajliw. Mychajliw continued by noting that had the Library not wasted nearly half a million dollars on lawyers and lobbyists on a fool’s errand, they could have bought two bookmobiles, had them two years ago, and saved the taxpayers money.
The Comptroller concluded by saying, “although the decision to borrow was not my own, my team and I did the best we could with a bad situation and worked with our underwriter to get taxpayer’s the best deal possible.”
The Comptroller’s Office is expected to receive the cash transfer later today. Mychajliw and his staff will then set up the appropriate capital accounts and fund them so that the projects can begin, or in some cases continue, without delay. Attached is a complete listing of the projects.
For a PDF of the Press Release, click here.