The Erie County control board turned up the volume Monday on its offer to refinance the government’s debt and borrow new money on its behalf, asserting it could save taxpayers almost $5 million over 13 years by borrowing more cheaply than elected leaders can.

The state-appointed control board can take whatever money it needs from Erie County’s sales tax revenue, so its credit rating towers seven notches above the County Hall rating that sank en route to the budget crisis of 2004-05. Two rating agencies place Erie County’s bonds one notch above junk status, the worst in the nation for a large county government.

Consequently, the control board can get a slightly better interest rate and, more important, pay less money insuring its bonds than the lowranked government will pay insuring its bonds against default, according to the financial adviser the control board hired to analyze the savings.

The firm Capital Markets Advisors, which would make money if the control board takes out a loan, said the board could save taxpayers $4.1 million over 13 years by refinancing the government’s existing debt.

Meanwhile, if elected officials borrow the entire $62 million that County Executive Joel A. Giambra proposed this year for large-scale projects — the control board wants them to borrow half that amount — taxpayers would save another $850,000 in repayment costs if the control board took out the loan, the advisers concluded.

“If it was their house, this would have been refinanced six months ago,” said control board Chairman Anthony Baynes. “. . . We are waiting for two politicians to say yes, go ahead and do this.

“It’s not up to us,” he said. “They have to ask us.”

The state law that set up the Erie County Fiscal Stability Authority lets it borrow money only if requested by the county’s elected officials. Otherwise, Comptroller Mark C. Poloncarz arranges the loans after they are identified as ecessary by the county executive with Legislature consent.

So far, Giambra and Poloncarz have been reluctant to let the control board borrow. Poloncarz reasons that any savings the control board predicts must be balanced against the taxpayer cost of having to maintain the state authority years into the future because it must remain in existence to repay the debt.

The control board budgets slightly more than $1 million a year for its operations but in 2006 spent about a third of its budget, or $485,000. Control board members insist that borrowing money does not mean they must remain as a so-called hard control board, with more staff and responsibilities, for the life of the loan.

The members could in future years return to an “advisory period” and spend even less than they did in 2006, said member Stanley J. Keysa.

The control board’s six members unanimously sent a statement to Giambra and Poloncarz asking them for a plan to let the Fiscal Stability Authority refinance debt and issue new debt as needed. It will be up to Giambra and Poloncarz to respond.

mspina@buffnews.com

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