Monday, May 9, 2016

Dinolfo asks state lawmakers to help dismantle LDC's

Posted By on Mon, May 9, 2016 at 4:37 PM

Monroe County Executive Cheryl Dinolfo says that dissolving two county-linked local development corporations will save taxpayers a few million dollars in debt and administrative costs. But she needs the State Legislature to pass a new law to make it happen.

The LDC's have one source of income and that's the county, which has multi-decade contracts with the LDC's to perform various services, such as providing government buildings with electricity and steam, upgrading copiers and computers, operating a parking garage, and so on. But in order for the LDC's to dissolve, the county needs to buy out those contracts, since the LDC's in turn borrowed against that promised income to do their business. 

But the county lacks the legal authority to borrow money for the purpose of paying off contracts.  Republican Senators Joe Robach and Rich Funke introduced legislation on Friday, at Dinolfo's request, that would address the issue. The legislation would give the county authority to buy out active contracts let by Upstate Telecommunications Corporation and Monroe Security and Safety Systems, the two LDC's that had starring roles in a  high-profile bid-rigging case that wrapped up on Friday (see this earlier post for the details). The county formed M3S to upgrade and operate the countywide emergency communications system, and it formed UTC to periodically upgrade county office technology.

In a press release, Dinolfo said that her administration has also been discussing the matter with Assembly Majority Leader Joe Morelle, a Democrat, about getting legislation in that house. 

Democratic County Legislator Justin Wilcox, who has sponsored legislation to strengthen oversight of county-linked LDC's, said that the legislation makes sense. He said that he is inclined to support it — the state legislation would require a formal request from the County Legislature — but that he wants some questions answered before he backs it. Among them: how much the county has paid the two LDC's and how much debt it would need to take on. 

"We need real transparency and not governing by press release," Wilcox said on Monday afternoon.

As she campaigned for county exec last year, Dinolfo promised that she would dissolve the county's LDC's and move their assets and operations back onto the county's books.  Part of that process involves assuming each entity's debts. Dinolfo's press release from Friday doesn't say how much debt the county will need to assume, though it promises that dissolving M3S and UTC would save taxpayers $4.3 million over an unspecified time essentially through reduced interest rates. 

Dinolfo also said that dissolving the Monroe Newpower LDC, which operates a power plant for Monroe Community College and Monroe Community Hospital, could save another $8.1 million over time. That LDC hasn't begun the dissolution process, but the Robach/Funke bill would authorize the county to buy out the LDC's contract.

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