4 November 2006 4 November 2006
Bruce L. Fisher
The control board gets hard
Deputry Erie County Executive Bruce L. Fisher sent this November 4 memo to Erie County department heads in response to the November 3 announcement by the Erie County Fiscal Stability Authority that it was moving from an "advisory" to a "control" role.
Dear Colleagues:
Many of you are doubtless concerned about the impact of the action taken by the Erie County Fiscal Stability Authority (ECFSA) yesterday Friday November 6).
The Erie County Attorney has determined already that the ECFSA, in voting to move from an "advisory" to a "control" period, acted illegally because the ECFSA failed to follow the clearly detailed steps laid out in the state law that created it.
A few points about the ECFSA:
1. This is not Bob Wilmers's control board. This is not the Buffalo Fiscal Stability Authority, a properly-constituted board that includes the Mayor, the County Executive, senior financial executives from across New York State and people with deep experience of public finance.
The ECFSA is a 6-person political outfit that stars three former County commissioners whom Joel Giambra refused to hire, or fired; two local executives with no public finance experience; and a former state appointee who spent years helping heap expensive mandates on counties. (Remember: Giambra retained several commissioners from the previous administration -- because they are professionals. He retained the Commissioners of Social Services, Central Police Services, Emergency Services, Personnel and Real Property Services -- but not the three individuals who now sit on the ECFSA.)
The Buffalo Fiscal Stability Authority, like the control boards created for New York City, Yonkers and Troy, was created in response to a crisis in the City's credit-worthiness. The specific circumstance of the City of Buffalo was that it reached its constitutional taxing limit of 2 percent of the assessed value of the real property.
No such issue of fiscal capacity faces -- or has EVER faced -- Erie County government. The taxable assessed value of real property in Erie County is over $35 billion. That means that Erie County could have a property tax levy of around $700 million. The Erie County property tax levy today is around $190 million -- less than one-third of the limit.
Similarly, there is no crisis in the debt load of Erie County, which is under 10 percent of its capacity. The credit rating agencies describe Erie County's indebtedness as "low," and our debt is among the lowest of all the major counties of this state.
There is, in short, no fiscal crisis in Erie County that would warrant imposition of a control board.
2. Notwithstanding the rhetoric you hear or read, Erie County has a valid Four Year Financial Plan for the fiscal years 2006 through 2009. This plan was proposed earlier this year by the Erie County Executive; it was supported by a majority vote of the Erie County Legislature; it was accepted by the Erie County Fiscal Stability Authority. This plan was prepared under the watch of the former budget director, who now works for the ECFSA.
The newly-proposed Four Year Financial Plan for fiscal years 2007 through 2010 is entirely consistent with the plan already in place. Yet the former budget director, now ECFSA director, has advised his board to reject the plan. This inconsistency is apparently not going to be reported by any news media here nor questioned by the ECFSA's members -- but that should not stop elected officials from doing so.
3. Two of the ECFSA's members are former budget directors of Erie County during the previous administration, when the workforce was approximately 1,200 larger than it is now, and when the tax levy was over $225 million. One of these former budget directors lost his job when the new administration took office in 2000. The other lost her job as CEO of ECMC when a new ECMC board majority voted to endorse our Public Benefit Corporation structure, under which a new professional management team has reversed the previous incumbent's practice of running up $20 million+ annual deficits. The new management, under the new structure we created, is succeeding where the previous CEO failed -- yet the previous CEO is on the ECFSA!
4. The ECFSA acted to impose a hiring freeze but not a wage freeze. This action is punitive to you as managers because if this stands, you are prevented from hiring replacements for your key positions as they become vacant due to any kind of attrition, yet you are still forced to budget without any control over automatic step-increases or any potential wage increases. Yet the ECFSA board chairman is empowered, by the resolution passed yesterday, to personally approve the hiring of new appointees on a case-by-case basis.
5. The ECFSA also moved to grant itself the authority to approve any County contract over $50,000. If the ECFSA action stands, then just about every contract for health, human services and professional services, and every contractual grant-in-aid to not-for-profit and cultural groups, which have undergone our normal process of scrutiny and which will have been approved by the Erie County Legislature in the normal process of legislative oversight, will now be subject to an additional level of oversight.
6. Notwithstanding the actions of the ECFSA on Friday, we have been assured by the leadership of the Erie County legislature that the normal Charter process of Legislative deliberation on the proposed Erie County budget will continue. That process began when the Erie County Executive submitted his proposed budget on October 15. It is the opinion of the Erie County Attorney that the ECFSA acted prematurely because it failed to await the conclusion of the Charter budget process. That process will continue, and a balanced budget will either be passed by the Legislature or, according to the terms of the Erie COunty Charter, a balanced budget as proposed will go into effect by default.
7. The Erie County Attorney will be briefing Erie County elected officials early this coming week on both the consequences of the ECFSA's actions and on the legal options open to Erie County elected officials.
8. Please note that the independently-elected Erie County Comptroller, the independently-elected Legislature Chair as well as the Erie County Executive and the Erie County Attorney have all stated that the ECFSA's actions were premature and unwarranted as a matter of law.
Sadly, I do not expect any reduction in the level of anti-government rhetoric any time soon. Notwithstanding the disruption that this illegal ECFSA action may cause, I am confident in the ability of our management team to continue to meet our legal, Charter and professional obligations as servants of the people of this county.
Copyright 2006 by Buffalo Report, Inc.