The Erie County Legislature last week approved asking its control board to borrow money on the county’s behalf. The Erie County Fiscal Stability Authority is set to market $170 million of tax-exempt bonds in May to finance new capital spending and to take out $103 million of bond anticipation notes.
Roosevelt and Cross Inc. will underwrite the bonds, which will be marketed as serials out to 13 years. Phillips Lytle LLP is bond counsel and Capital Markets Advisors LLC is financial adviser.
The deal comes after years of acrimony and stalemate between county lawmakers and the FSA over which entity would borrow for the county. Neither could borrow without the other’s consent.
The stalemate is over, but the acrimony is not. The Legislature approved a certificate of need, the formal request for the authority to borrow in a 10-5 vote.
County Comptroller Mark Poloncarz had prepared a bond deal to take out the Bans last month when the FSA said it might reimpose a “hard” control period that would block county borrowing.
The FSA and County Executive Chris Collins surprised Poloncarz days later when Collins announced a deal to allow the debt. The county’s borrowing had been one area where rivals Collins and Poloncarz had been in agreement.
Collins, who had said he would never allow the FSA to issue long-term bonds, last month changed his tune and averted the reimposition of a control period. Executive director Ken Vetter said borrowing on the FSA’s higher rated credit would save $17 million. The authority could also be called on to do a $90 million bond refinancing for the county, Vetter said.
Associate deputy comptroller Timothy Callan said the savings may be less than advertised because the county could be upgraded when Moody’s Investors Service converts to its global ratings scale and narrows the difference between the credits. Moody’s rates the county’s general obligation debt Baa2 and the FSA Aa2. Both have stable outlooks.
