Control Board Viagra

My friends, it’s a coup d’etat.

First, please go read BuffaloGeek’s straight piece on what happened last night.

I attended the first half of yesterday’s meeting of the Erie County Fiscal Stability Authority, and liveblogged it up to a point but didn’t have the luxury of an access code to the convention center’s wifi.

The control board meets in an antiseptic – almost morgue-like – basement room in Buffalo’s concrete convention center. The members of the control board look like pallbearers, what with the black curtains literally surrounding them.

On 10/18/06, the ECFSA received Giambra’s 4-year plan, along with the 2007 proposed budget. The board charged the finance committee to review both documents. On 10/23, the finance committee listened to a presentation of the 2007 budget and the 4-year plan by Hartman and Giambra. The finance committee reviewed both documents, and had severe concerns about the viability of both.

Those concerns were expressed to the county government by letter 10/26/06. A response was received on 10/30/06. After review of that response, the ECFSA still had significant concerns. It met on 10/31 to discuss them, and a report was prepared with findings & recommendations.

Ken Vetter took the podium and explained that the finance committee had gone through the 4-year plan and assessed the likelihood of success for each revenue-enhancing and cost-saving proposal therein. They made the evaluation based on criteria listed thusly:

- Specific Historical data or other county data that supports the initiative/item
- Stated support from relevant officials to help make the initiative/item come to fruition
- Current probability of achieving target.

The control board doesn’t want hopes and prayers. It wants a reasonable assurance that what’s in the plan is real and feasible in out years. On 10/26. they requested add’l information on 31 separate items about which the board had questions. The report is contingent on what came back on the 30th.

Vetter’s mantra:

“Wanting it so doesn’t make it so.”

Here are some of the items:

Increase some registrar fees.
Would save $4.3 million by adding revenue. No historical data was provided, and there was no support indicated from county clerk revenues. There was “undetermined” probability of achieving the target. The recommendation, therefore, is to discount $4.3 million – the entire amount – from the plan.

Vetter is explaining that, in his view, because there’s no basis to conclude that the clerk would implement it or go along with it, or if he supported it, the board can’t conclude that it would be implemented and it’s a pipe dream.

“Investment Management”
Through add’l investment techniques, EC would earn add’l $1.3 million in revenue. No historical data. Comptroller would work to maximize overall interest revenue. Since the probability of achieving the target was undetermined, the recommendation is to discount $1.3 million – the entire amount – from the plan. There was “no substantiation” of the number whatsoever. But Vetter does indicate that the Comptroller is doing a good job maximizing revenue.

“Surcharge”
$8 MM in “revenue”. No 2006 data was received (historical). There is stated support from the administration, and there is a “medium” probability of achieving the target, so the recommendation is to discount $1.2MM from the plan. Revenue would remain flat, and can’t assume additional inflation on it. That’s where it comes from.

Full Fleet Consolidation
$1.15 MM in savings. No historical data. The administration indicated that it would support the plan, and there is a “medium” probability of achieving the target. So, the recommendation is to discount $574k from the plan. No details provided as to who would do what, how.

It continued like that until the finance committee had chiseled $51+ million from the four-year plan.

I left before they went into executive session (behind closed doors) to discuss with their lawyers the probability that the county will sue. When they returned,

Baynes opened the session by stating, “We have given county officials every opportunity to demonstrate that their plan was realistic. Instead, it includes increased debt, fiscal gimmicks, and capital borrowing for operations. It is the judgement of this panel that the county is not capable of making the decisions necessary to create a balanced four year plan and we are recommending the imposition of a hard control board.”

The panel voted unanimously to impose the hard control board, enact a county-wide hiring freeze, and oversee all contractual approvals. Erie County now has the distinction of being the only county in New York State that is home to both a city and county control board.

We may not like our county executive or the job he’s doing, but he’s elected, and we can be rid of him next year. We may not like our county legislators or the job they’re doing, but they’re elected and we can be rid of them next year, too. All of them answer to us; we are their constituents.

The control board is no less political than our elected officials. In fact, there’s so much politics going on behind the scenes it would sicken people. The control board has manipulated the process to reach this conclusion, but their decision to go hard may be unsupported by statute. Unnamed members of the control board have told county offiials that they may lose in court, but they win in the court of public opinion. The subtext? Go ahead and sue; we dare you.

People may indeed support the control board because it sounds easy and Buffalo’s has done an overall good job restoring fiscal health to a city that had reached its taxation limit. Erie County hadn’t reached that point, and there is no question that the legislature and executive had put great effort into balancing 2007’s budget and proposing a 4-year plan that was as supportable as any 4-year plan could be. No one is prescient. Shit happens.

Under §3957 (2)(e) of the statute establishing the ECFSA(pdf):

The authority shall, in the event it disagrees with elements of the financial plan provided pursuant to paragraph (c) or (f) of this subdivision provide notice thereof to the county, with copies to the director of the budget, the state comptroller, the chair of the state assembly ways and means committee and the chair of the state senate finance committee, if, in the judgment of the authority, such plan: (i) is incomplete; (ii) fails to contain projections of revenues and expend-itures that are based on reasonable and appropriate assumptions and methods of estimations; (iii) fails to provide that operations of the county and the covered organizations will be conducted within the cash resources available; or (iv) fails to comply with the provisions of this title or other requirements of law.

Has any of that been done? We don’t know. But word is, the ECFSA believes that this provision has nothing to do with subsection (2)(c) or (2)(f), which deal with the budget projections in the annual budget, and the 4-year plan, respectively.

Instead, the control board skips right down to §3959, enabling the establishment of a “control period” which we have now.

No one from elected government was permitted to address the control board last night, and they had until the 5th to reply to the ECFSA’s concerns about the projections.

The control board has voted itself a lawsuit. The people of Erie County are now governed by an unelected, yet hugely political junta.

All based on Vetter’s assertion that his best guess was better than county government’s best guess.