Audit: Monroe County used LDC to cover expenses, saddling taxpayers with $33-million in debt
Posted at: 06/01/2012 2:23 PM | Updated at: 06/01/2012 4:11 PM
An audit released by the New York State Comptroller’s office says through the use of a local development corporation, Monroe County has saddle taxpayers with $33-million in debt.
Comptroller Thomas DiNapoli says the County used Monroe Newpower Corporation to issued bonds to cover the County’s operating expenses. “Monroe County used a shadow entity it created to cover daily operating expenses. This backdoor borrowing loaded taxpayers with debt for three decades. This marks the second time we've seen Monroe County misuse LDCs to fund county operations. This is clearly not what LDCs are intended for and it needs reform."
DiNapoli and Attorney General Eric Schneiderman currently are investigating the use of two other Monroe County local development corporations with regard to management fees and a multil-million dollar upgrade of the County's emergency communications system.
According to the audit, the County created the Monroe Newpower Corp. and used it to purchase the County's 75-year-old coal-burning plant for $7-million without an appraisal. DiNapoli said the County then used that $7-million to cover its operating expenses and secured $33-million in bond anticipation notes which county taxpayers must repay over the 32-year life of the bond.
Monroe County Legislator Vincent Esposito said he’s troubled by this. “I'm not the least bit surprised by it because it's become sort of the standard operating procedure of this administration, as it was in the previous one, which is to basically farm out operations of county government that are supposed to be done in a public transparent manner with the oversight of the legislature and put them into entities that are very mysterious at best in terms of the boards that run them. And in many cases, seemingly waste taxpayer dollars."
Monroe County Chief Financial Officer Scott Adair said, “I think these types of reports are subject to opinion and it is just that. It's his opinion that these local development corporations don't work. I'd love to sit down at a table and just sit down and have a frank discussion and show him what we've tried to show him in our response to the report -- that they do work."
The audit recommends Monroe County stop using local development corporations to finance operating expenses and allow vendors time to respond to requests for proposals.
Congresswoman Louise Slaughter is running against current Monroe County Executive Maggie Brooks for the 25th Congressional District. A spokesperson for Slaughter responded to today’s audit in saying, “Maggie Brooks has driven Monroe County into $389 million worth of debt. Rather than tell local taxpayers the truth, Maggie Brooks has expanded the improper use of Local Development Corporations to hide hundreds of millions of dollars worth of additional debt and provide her campaign donors and political allies with jobs. Now, Maggie Brooks wants to bring this abysmal and self-serving record to Washington."
Last year, DiNapoli’s audit found that Monroe County officials wasted millions in taxpayer dollars when they created Upstate Telecommunications Corporation to support the county's information system needs.