Erie County’s state-appointed control board burst on the scene almost two years ago to protect taxpayers and to teach the county’s elected leaders the value of a dollar.

But for the control board’s inaugural meeting, two of its lawyers collected almost $10,000 in tax money to journey up from Wall Street.

A no-bid financial consultant dispatched from Albany was burning through an $860,000 allowance and would bolt in about 10 weeks.

And the board’s executive director was charging taxpayers for his lodging as well as his salary.

Quietly or not, the board members who were outside the leadership loop did not like the example being set.

By summer 2006, there was a new lineup: four new members in all, including a chairman and vice chairman, and a new executive director, none of whom can be blamed for those past extravagances.

The entire board — seven members when at full strength — then took on a more aggressive review of county finances. And taxpayers now are better served. Right?

That depends on your view of recent decisions. Consider:

• The control board recently rejected a deal arranged by the government’s elected leaders to let a company pay $36 million for the right to collect and keep overdue property tax payments the county has been unable to collect itself.

  The deal was praised in some quarters. Buffalo Niagara Partnership President Andrew J. Rudnick called it a way for the county to draw in cash and avoid hiring more workers to collect delinquent taxes.

  But the control board sent county leaders back to the drawing board, insisting they seek more offers. The delay has cost about $5,000 a day in lost interest income and, if a new contract is not cobbled together, will force officials to borrow more this year.

• In November, voters approved a referendum to modernize the County Charter and usher in performance-based budgeting, a system that would let budget officials and taxpayers assess government efficiency. In theory, it would help officials examine the cost to, say, pave a mile of road, register an auto or inspect a restaurant.

  The control board has not helped the government implement performance-based budgeting by 2008, as voters demanded. The board rejected the county’s request for money to hire a consultant to guide the conversion. And one of its more vocal members, Kenneth Kruly, has called performance budgeting expensive and difficult to implement.

• Board members have longed for more cooperation from the elected leaders. But both sides speak bluntly. When County Executive Joel A. Giambra decided not to appeal the court decision that let the control board remain a “hard” board, he said he was hoping he and its chairman, Anthony J. Baynes, could strike a cooperative chord.

  Baynes responded this way: “The administration has been more interested in distracting the board by fighting lost causes in court than in working with us to find reasonable solutions to the county’s fiscal crisis. I am pleased that the county has not added to the regrettable burden of this baseless case by pursuing what would have been a frivolous appeal.”

• The State Association of Counties updates county leaders on common issues, and it successfully lobbied Albany to cap the Medicaid expenses shouldered by county governments. That change alone will save Erie County tens of millions of dollars over the years.

  Yet in a split vote, the control board refused to let Erie, the largest upstate county, pay its more than $50,000 in association dues. To sidestep that refusal, Giambra renegotiated the dues to just under $50,000 — the threshold requiring control board consent.

Baynes says the Giambra administration provides inconsistent answers to control board questions — the recent discussion about “tax liens” providing just one example. Public officials, he says, don’t have the same attitude about money that is found in the private sector.

“There is still work to be done to push Erie County down the path toward enduring, longterm fiscal stability,” he and the other members said in their report for 2006.

Confrontational stance

At many turns, the Legislature, Giambra and his staff have bristled under control board command. After all, they argued, a non-elected panel had supplanted the elected officials.

Legislator Cynthia Locklear, a West Seneca Democrat who ran for office under the Primary Challenge banner, had taken a slightly different view, welcoming the advice “because who would ever decline or push aside good advice?” she said.

She now sees little good emanating from the board, which budgeted $1.5 million for itself this year.

“I don’t see what value they are adding to the political process and good government. They are acting in an obstructionist role without putting forth a clear vision of what they see for Erie County,” she said. “The individual actions they are taking seem to be more in the line of challenging the decisions of the duly elected representatives.”

For the first time, a control board this year will be in the background for a county executive’s race. And the appearance that county finances are adrift — with Giambra to blame — benefits candidate James P. Keane more than any other, according to political strategists interviewed for this article.

Keane is the former deputy county executive to Dennis T. Gorski, whom Giambra defeated en route to his first term. Keane can remind voters that his opponent in the Democratic primary, West Seneca Supervisor Paul Clark, had endorsed the Republican Giambra, whose abysmal approval ratings indicate the public will not let him out of the doghouse even in the sunset of his political career.

Gorski has endorsed Keane, who also claims to be backed by the “Gorski wing” of the Democratic Party. But don’t assume that includes control board members Stanley J. Keysa, Sheila Kee and Kruly, all department heads in the Gorski administration.

“I am not going to support anybody,” Kruly said. “I know Keane and Clark from past experience. I don’t know Chris Collins [the Republican candidate]. If one or the other wanted to speak to me as a control board member, I would be happy to, as a public service, and not as a political activity. Contributing or helping a campaign is not something I want to do. And I’m sure the others share the same opinion.”

Rendered ‘useless’

Of the control board decisions that make government officials shake their heads, the shredding of a deal that would have drawn $36 million into county coffers looms largest.

The income, from Xspand of Morristown, N.J., would have pushed the county’s rainy day fund above a $50 million goal without raising taxes, said Comptroller Mark C. Poloncarz, who was in rare agreement with Giambra on the deal. The Legislature, too, had approved it, 12-3.

Control board members raised several objections: The contract was vague; too little was known about Xspand or the county entity that policed past tax-lien agreements with Xspand. But chiefly, the control board complained that officials should have sought offers from more companies. Then the board broke the proposed contract.

If county officials meet several conditions, Xspand can buy and service years-old tax liens considered less valuable. But as for the more fruitful liens placed in 2006, the board wants the county to seek other offers.

That makes the deal unattractive to Xspand. The company told the county last week it is unwilling to take just part of the deal. In the meantime, more than $5,000 in interest income is lost with each day of delay, according to Giambra’s budget staff.

“The actions of the control board clearly render the deal useless,” said Joseph Maciejewski, the county’s director of real property tax services.

mspina@buffnews.com

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