Erie County Legislator Kathy Konst has introduced a resolution that would have the county borrowing less and re-establishing a pay-as-you go policy. Erie County Legislator Kathy Konst stated, "I have reviewed the Capital Bond Projects proposal and feel that the County should only borrow $7.2 million. This will cover the costs for projects that have been identified as mandated. I also believe that the county should use $4.7 million from accounts that have been identified as having positive variances in the April Budget Monitoring Report. This money should pay for projects that the county will receive direct reimbursement for within the year."

Konst explained that there are several projects that have been included in this year's Capital Bond that the County receives 100% reimbursement for. Konst stated, "Erie County wants to include $4.5 million in long term borrowing for Capital Overlay and Road Reconstruction, but through the State's Consolidated Highway Improvement Program the county will receive 100% of the funds reimbursed within 90 days after the work is completed."

"Why would we borrow money for projects that will be reimbursed so quickly and instead pay interest for 30 years?" she questioned. "That practice makes no sound fiscal sense."

The Erie County Fiscal Stability Authority has identified several accounts that anticipate positive variances through the end of 2006:

• Comptroller's interest earnings $2-3 million in excess of the 2006 Budget amount;
• Medicaid was overestimated in the 2006 County Budget by $12.7 million in savings, due to estimate of the cap on Medicaid expenses by the State of New York; this positive variance available for transfer for other county purposes in July 2006;
• Sale Tax Revenue: $5 to $6 million more than budgeted;
• Savings from personnel vacancies: $5 to 6 million.

"The Erie County Executive has stated that he wants the anticipated surplus put into reserves with the hopes that Wall Street will look favorably on the County by giving Erie County a better bond rating. My proposal will not reduce the County's anticipated surplus because the county will be reimbursed by the end of the year, "concluded Konst. "But more importantly, we can stop the practice of borrowing for projects that should not incur long-term debt."

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