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A report from the state Comptroller's Office says Monroe County didn't break any laws when it sold a power plant to a quasi-governmental local development corporation. The county did, however, skirt borrowing laws via the sale, it says.

In 2002, Monroe Newpower Local Development Corporation bought the former Iola Campus power plant from the county for $7 million. The LDC borrowed $33 million to cover the combined cost of the purchasing and upgrading the facility. As part of the deal, the county entered into a 32-year agreement to buy energy from the LDC.

The report says the county used the proceeds to help plug a budget gap and in doing so subverted laws prohibiting it from borrowing to fund operating expenses. The report says that the county's only benefit from the transaction was a quick, one-off cash infusion. The Comptroller's Office has criticized the county's use of and relationship with LDCs in previous audit reports. (The office's report on the county's relationship with Upstate Telecommunications Corporation is one example.)

County officials have repeated the Newpower approach several times since 2002, selling assets to an LDC or company and then contracting for the service. Critics, including county Democrats, say it obscures county borrowing and spending. But the approach is not illegal, a fact the county seized on in its response to the audit report.

"Rather than offering conjecture in the guise of an audit report concerning a transaction from a decade ago, the Comptroller's Office would be better served convincing the State Legislature to amend existing law concerning LDCs to accomplish this political agenda," writes Scott Adair, the county's Chief Financial Officer. "The controller's dislike of existing legislation is not a valid reason to burden taxpayers with endless audits that rarely if ever offer productive recommendations for the governments that abide by said law."