The Erie County Fiscal Stability Authority plans to sell $174 million of bonds on behalf of the New York county in a deal announced Friday.
The agreement between the authority and Erie County Executive Chris Collins appeared to have erased years of acrimony, with authority chairman Daniel Oliverio and Collins praising each other’s efforts.
“Things do change,” Collins said on Friday.
Two years ago Collins had said that as long the county had an investment-grade rating, he would never allow the authority to sell bonds. But last week he said that the lack of affordable bond insurance meant that borrowing on the higher-rated agency’s credit could save the county $21 million over a 13-year maturity for the bonds.
“With the new data, I’m the first to say I’ve changed my mind,” Collins said. “Twenty-one million dollars is a staggering amount of money. It’s something I could not ignore.”
A week earlier, conflict appeared on the horizon after the authority’s finance committee voted to reimpose a control period unless the county demonstrated how it would address out-year spending gaps. A flurry of meetings between the authority and the county executive’s office convinced the authority board on Friday to remain in advisory status, Oliverio said.
“We got very comfortable with the plan,” he said. “The county executive has committed to working cooperatively with the authority.”
Oliverio, senior partner at Hodgson Russ LLP, was appointed chairman of the authority two weeks ago after serving as acting chairman since November.
Neither the authority nor the county could borrow without the permission of the other as long as the board was in a control period, as it had been two years ago. A kind of fiscal trench warfare ensued, delaying capital projects. Compromises brought short-term debt to market, but which entity would ultimately fix out the debt had remained an open question. Relations warmed up after the authority went out of control status and into advisory mode in June.
Phillips Lytle LLP is bond counsel. Capital Markets Advisors LLC is financial adviser. Roosevelt & Cross Inc. will lead manage the deal. Pending approval by the county Legislature, the deal could come to market in the next month or two, Oliverio said.
