An audit concludes that the landmark 2004 agreement to let Erie County's Parks Department care for Buffalo's parklands was a financial failure in its first full year.

Taxpayers countywide subsidized the city's parks, the report said. Meanwhile, service suffered at county-owned parks in the towns, as many suburban residents know.

The $1.8 million a year that City Hall pays Erie County for parks maintenance fell short of the actual cost by $1.2 million last year, County Comptroller Mark C. Poloncarz said Wednesday as he described the audit's findings. The deficit was softened by $500,000 that Buffalo gave Erie County when transferring its workers to county control.

The comptroller's report was promptly downplayed by an architect of the 2004 agreement, County Attorney Laurence K. Rubin. He said the pact helped Buffalo in a time of need and revived the major Buffalo parks that are treasured by all county residents.

"We acknowledge that we've had problems. It's a $40 million agreement over 15 years," said Rubin, who was County Executive Joel A. Giambra's director of environment and planning when the agreement was signed in June 2004. But Rubin said he didn't think the problems are as great as the audit indicates.

"When the Giambra administration sought to take over the city's parks," Poloncarz said, "they stated that it would be budget-neutral to the county and would have no adverse fiscal impact on the county's general-fund budget. Our audit confirms that is not the case."

Auditors found that in 2005 the costs of personnel caring for city parkland exceeded estimates by about $350,000. In addition, the income expected from fees and other governments fell short by $750,000, with a shortfall in state aid a significant component.

When the agreement was sold to lawmakers, advocates vowed to lower labor costs by putting welfare recipients to work in city parks with tasks that would qualify as job training and would not tread on union rules. Those welfare workers and their overseers would be paid under federal and state programs promoting job training and welfare-to-work arrangements.

But in the agreement's first full year, when Erie County finances were in a nose dive, parks supervisors were laid off, the state Department of Social Services questioned the job-training effort, and the income didn't flow as planned. Rubin says the problems have since been worked out.

"2005 was probably not a good practice year for this," he said.

"There were valid reasons to assume the money would be there," said Poloncarz, who wants the combined operation improved, not scuttled. He called the parks deficit another casualty of the government's financial crisis and "an example of significant management failures."

His auditors drew a picture of an agreement that did not get the constant care it needed. Consider:

• Every City Hall payment has been days, weeks or months late. Though the agreement doesn't allow it, the city comptroller's office delays payments to determine how much gasoline from Buffalo's pumps - which are in the parks - is used by county-owned parks vehicles. Then the city's staff deducts a charge from its payment. The city's latest quarterly check, reconciled for the fuel, was handed over Wednesday - more than a month late and just hours after Poloncarz released his audit.

• The agreement lets county officials address the lack of payment by withholding the sales tax money Erie County receives from Albany and distributes to local governments within its borders. But the agreement failed to recognize that the Buffalo control board gets Buffalo's sales tax money from Albany. So county officials never had the leverage to take what was due.

• The payments can be raised, but not until 2007. If the city and county cannot agree on a new amount, the increase is capped at $135,000 a year for three years. That in itself is too little to close the gap, the audit said.

• Under the agreement, the county hires the Olmsted Parks Conservancy to care for Buffalo's renowned parks designed by Frederick Law Olmsted. The county is entitled to a share of fee income above a certain threshold. But county officials have never asked the conservancy for an income report, Poloncarz said.

Two years ago, the agreement was hailed as a cooperative milestone between the county's two largest governments. Buffalo was under pressure from the control board to shed costs. And though some suburban lawmakers, such as West Seneca's Timothy Wroblewski, suspected the agreement shortchanged suburban residents, a comfortable majority of county lawmakers approved it as the right thing to do for a needy Buffalo.

Times have changed. Erie County closed its suburban parks for several months in 2005 as it laid off workers and jettisoned services. This year, the county's two beaches are staffed with lifeguards only on weekends. Meanwhile, some Buffalo residents say they encounter a frustrating runaround whenever they call on city or county officials to address problems at neighborhood parks.

There are rumblings to return to the old days. Common Council Majority Leader Dominic Bonifacio has introduced a resolution calling for a study on whether to retake Buffalo's 180 parks and playgrounds. But he admits the Buffalo Fiscal Stability Authority would balk at taking back the 50 to 60 employees.

Poloncarz and Rubin agree that's not the thing to do. Poloncarz recommended that officials with the city, county and the conservancy renew the effort to work out problems.

Said Rubin: "It's clear that parks in the city are better operated today than when the city was on the verge of collapse. Everybody can always take shots at it, but the fact is the parks are doing pretty well."