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What 'market access risk' means for Erie County

Politically charged debate over who should do Erie County's borrowing has been around almost as long as the state-appointed control board.

It's been no different this year, as County Executive Mark C. Poloncarz and County Comptroller David Shenk prepare to sell the county's first general obligation bonds since 2006.

There are six legislators -- including three Republicans, one Democrat, one Conservative and an Independence Party member -- that have been outspoken in their opposition to the plan because of the higher costs Erie County will see if it borrows on its own.

Staff for Poloncarz have made the argument that returning to the bond market will help the county get better ratings from the Wall Street ratings agencies in the future, which in turn would mean cheaper interest rates.

A story in today's City & Region section looks at what analysts from the ratings agencies had to say about that.

Pressed by county legislators for written documentation that the ratings agencies look at whether the county has issued its own general obligation bonds when they determine what rating to give, the Poloncarz administration has pointed to a line in a ratings report from Standard & Poor's completed in December.

In it, analysts note that one of the risks facing Erie County is: "Market access risk for purposes of financing operations during low cash-flow periods."

So what does that sentence mean? It is a comment on the county's low cash flow.

Analysts for Standard & Poor's said that refers to the fact that the county must rely on short-term borrowing each year to cover some of its finances, a tactic many municipalities without a lot of extra cash use to cover expenses as they wait for revenue to arrive.

"What that's referring to is the fact that the county issues cash-flow notes each year to finance operations," said Lindsay Wilhelm, primary Erie County credit analyst for Standard & Poor's. "So basically, during low-cash periods, they'll have to go out to the market to just finance their day-to-day, and we see this a lot. This is definitely not unique to Erie County."

Why is that a risk? Because, in an extreme credit crisis, a county might not be able to borrow that money -- a scenario the analysts said they don't currently foresee.

"They might not be able to sell the notes if there was a real financial meltdown of epic proportions," said Richard Marino, an analyst for Standard & Poor's. "You can sell notes, even if you have weak credit, you can still sell them. It just costs you more."

-- Denise Jewell Gee

Jerry Zremski's Week in Washington, July 30, 2012

 

Five Questions with Tim Kennedy

Every Sunday, we'll publish a quick Q&A with someone from the local political world. Instead of touching on the latest in policy issues and proposed legislation, the intent is to catch a glimpse of the person behind the title. The interviews are done via email.

KennedyState Sen. Timothy M. Kennedy speaks during an event in February. (Sharon Cantillon/Buffalo News)

Timothy M. Kennedy 

The basics
Age: 35

Job title: State Senator

Family: Married to Katie; father to Connor, 6, Eireann, 3, Padraic, 1. Son of Martin and Mary, brother to four siblings.

Education: Bachelor’s and master’s degrees in Occupational Therapy from D’Youville College.

Party affiliation: Democrat

Salary: $79,500

Continue reading "Five Questions with Tim Kennedy" »

The Sunday Politics Column -- Politics Now version

   A family emergency prevented the Politics Column from appearing in its usual op-ed page corner this week in the Sunday Buffalo News.
   But the Internet has proven a wonderful tool for those who might miss their normal Thursday deadline for the pre-print op-ed section. And as a result, the Sunday Politics Column makes a rare visit to the Politics Now blog:

    Mark Poloncarz has made it clear in recent weeks he wants to have a say in the selection of the next Erie County Democratic chairman.
   Indeed, the county executive addressed a joint meeting of town and zone chairmen last week during a meeting at Curly's Restaurant in Lackawanna, where sources say he emphasized the process should be completed sooner rather than later.
   He even named four men who have declared their candidacy, granting tacit approval. They include Frank Max, chairman of Cheektowaga Democrats; Jim Eagan, a prolific Democratic fund raiser; Jeremy Zellner, chief of staff for the County Legislature , and attorney Marc Panepinto.
   He also listed the qualities he would like the new party leader to possess -- including the ability to unify -- that has eluded so many Democratic chairmen over the years.
    It's an interesting -- and risky -- tack for the still new county executive. He could follow a path favored by predecessors like Dennis Groski, who distanced himself from the party politics as much as possible. His philosophy was to let a chairman like Steve Pigeon serve as his lightning rod, absorbing the political pot shots that inevitably result from running county government.
   But Poloncarz also recognizes the unique opportunity before him. An ambitious Gov. Andrew M. Cuomo is making his mark in New York in a number of ways , and would not mind demonstrating his political prowess either. After an attempt to unify Erie County Dems orchestrated by his own political operatives failed in 2011, he is now allowing Poloncarz the chance to follow through.
  The first step -- the departure of Cuomo persona non grata Len Lenihan from the chairmanship -- has already been accomplished. But now Poloncarz must find someone who is acceptable to all of Erie County's warring factions, including Lenihan's Headquarters crew, Mayor Byron Brown and Congressman Brian Higgins  -- not to mention Albany Democrats.
   That's why more mad more locals are watching for some new candidate to suddenly emerge. Maybe it will be former Mayor Tony Masiello, a Cuomo favorite who has not the slightest desire to even discuss the subject. Attorney Anthony Colucci III's name -- mentioned in the Politics Column several months ago -- has again surfaced. Others are sure to follow.
    So far, even party outsiders such as Mayor Brown's camp are watching with curiosity. Brown has survived quite nicely over the years without help from Headquarters, relying on his own party apparatus to get the job done. But if an acceptable candidate came along, that faction might be willing to once again fund itself visiting Ellicott Square.
   The point of all this is that Poloncarz -- by inserting himself into the process -- has undertaken a significant risk. He is betting his strong victory in 2011 and his early days of presiding over county government gives him enough political gravitas to pull off what no other local leader has achieved in decades.
   Democrat leaders are slated to again meet on Aug. 6 to hash out the situation. While any official designation of a new chairman must legally take place after the primary election in September, a gathering of party elders such as what is slated for Aug. 6 just might result in white smoke.
   That's exactly what happened the last time the party engaged in this exercise when top honchos gathered in the upper room at Cole's on Elmwood Avenue.
   If any Democrat types make a move in the next few days to reserve the room at Cole's, we'll know exactly what is under way.

*          *        *

   If Republican congressional candidate Chris Collins has remained on the quiet side over the past few days, it doesn't mean he has not been pounding the pecuniary pavement. Sources close to his campaign report he raked in $100,000 at a local event hosted by long time Collins financial supporter Paul Harter.
   Another soiree put together by national Republicans in Washington netted an additional $100,000, giving the former county executive a significant start in the fund raising that will prove crucial in his upcoming faceoff with Democratic incumbent Kathy Hochul for the 27th District.

--Robert J. McCarthy

Jerry Zremski's Week in Washington, July 23, 2012

 

Five Questions with Joseph Lorigo

LORIGO

Legislator Joseph C. Lorigo at an Erie County Legislature meeting in January. (Sharon Cantillon/ Buffalo News)

Joseph C. Lorigo

The Basics:
Age: 30
Party: Conservative
Job Title: Erie County Legislator, 10th Legislative District (Aurora, Colden, East Aurora, Elma, Holland, Marilla, Wales, West Seneca)
Family: Wife, Jean; and dog, Henry
Town: West Seneca
Education: Canisius College, bachelor of arts, 2003; State University of New York at Buffalo Law School, law degree, 2007; UB School of Management, master of business administration, 2007.
Salary: $42,588

The Questions: 
What's one thing people don't know about you?
I have played the piano since I was 12 years old, and it is truly something I love to do.  I don’t play nearly as often as I used to, but it is still something I do as a way to relax. While I haven’t played in public in quite some time, I used to play dinner music at restaurants when I was younger. There is a part of me that would love to play the piano in a band.

What music have you been listening to lately?
I enjoy a variety, including country music, classic rock and others.

What's your favorite restaurant? 
I really enjoy Tantalus and Rick’s on Main in East Aurora, and Schwabl’s in West Seneca.

Who is your political hero? 
My political hero would have to be Abraham Lincoln. He was someone who believed in what was right and stuck to his principles. I also admire him for his ability to unify the country after it had been torn apart by civil war.  I sometimes think that the nation is more divided today than it has been in years, which I find troubling.  Nobody is ever going to completely agree on everything, but I would like to see people working together to do what’s best for the people, not necessarily what’s best for themselves or their party.

What's the worst part of your job? 
Not being able to be in two places at once. There are always meetings, charitable fundraisers, festivals and other events going on. I would like to attend them all, but sometimes I am logistically unable to.

-- Denise Jewell Gee

Video: Who will be the next head of county Dems?

Who will be elected the next chairman of the Erie County Democratic Party? News Political Reporter Bob McCarthy tells Brian Meyer that some interesting names are surfacing as possible successors to Len Lenihan.

Eagan making calls for Democratic chairmanship

   If you're a Democratic committee member in Erie County, chances are you will receive a phone call soon from James J. Eagan, a major fund-raiser who is now very much vying for the party chairmanship.

   A financial consultant and commissioner of the Niagara Frontier Transportation Authority, Eagan is emphasizing his fund-raising abilities and connections with top Democrats as he makes his case.

   "I've raised millions of dollars over the last five years for the Democratic Party," he told Politics Now on Friday. "And there's not a political leader in this state who does not return my phone call."

   Indeed, Eagan has been instrumental in raising dollars for county executive candidates and the State Senate. Now he wants to emphasize candidate recruitment by appealing to Democratic ideals.

   "If we know what we stand for, we can attract good candidates," he said.

   Some observers say Eagan may have financial connections, but no political base from which to launch a serious candidacy. But he says he is not a member of any one local faction looms as his strength.

   "I have no faction pushing me and I don't want any faction pushing me," he said.

    Others being mentioned for the job include  Lackawanna Chairman Francis Warthling, Cheektowaga Chairman Frank C. Max Jr., former Mayor Anthony M. Masiello, and Legislature Chief of Staff Jeremy J. Zellner.

--Robert J. McCarthy

Cuomo doesn't like DiNapoli's rhetoric on Thruway

ALBANY – Never shy about disagreeing with state Comptroller Thomas DiNapoli, the Cuomo administration today is fighting back against comments the Democratic comptroller made about the Democratic governor’s Thruway Authority.

In a written response to questions from the Buffalo News about a planned 45 percent Thruway toll hike on trucks, DiNapoli on Tuesday said the increase would hurt businesses during a struggling economy. He raised the possibility of conducting an audit of the agency – as called for by Unshackle Upstate this week. And he sharply criticized Thruway officials for not aggressively moving on cost-cutting suggestions he made to the agency several years ago.

“Where was the comptroller the last five years when all of these financial mistakes were being made?’’ a Cuomo administration official said this morning. The official noted the Thruway Authority contracted with an outside firm before proposing the rate increase; the firm found oversight and management problems at the agency contributed to a financial problem that now needs to be addressed by toll hikes.

Cuomo has not yet given his position on the 45 percent toll increase plan, though he has suggested new revenues are needed by the agency. Thruway officials, in a recent bond issuance document, said they saw “no reason’’ why their toll increase plan would face any major changes.

UPDATE:

The comptroller's office, without specifically saying so yet, rather strongly disagreed with the thinking of the Cuomo administration. A spokesman fired off via email a series of audits and financial reviews DiNapoli has conducted the past five years -- on everything from overcharging for gasoline at Thruway rest stops to failure to collect penalties, late fees and other revenues from E-ZPass customers.

With his own set -- though on-the-record -- jabs at DiNapoli jabs, the Thruway's executive director, Thomas Madison, this afternoon responded to the comptroller's concerns, saying the financial problems at his agency were the result of "years of poor management and reckless financial decisions, which were left completely unchecked by every part of state government.''

Madison said new leadership under Cuomo ordered an outside review, which recommended bringing tolls on trucks in line with other nearby states and ending a practice of borrowing to pay for Thruway operating expenses.

Madison said his agency is taking steps to cut costs "after years of inaction from state government.''

-- Tom Precious

DiPietro gains Conservative nod in 147th Assembly District

    The crowded 147th Assembly District has assumed one bit of clarity in the past few days after the state Conservative Party officially nominated David J. DiPietro as its candidate.

   Erie County Conservative Chairman Ralph C. Lorigo said state Chairman Michael R. Long has informed him of the choice, since the multi-county district requires the approval of the party's state committee. DiPietro, the former East Aurora mayor, beat out Republican David P. Mariacher, who is also running in the GOP primary and had sought the Conservative nod as well.

   Lorigo as well as former GOP gubernatorial candidate Carl P. Paladino -- who has grown close to party leadership since also running on the Conservative line in 2010 -- are thought to have played key roles on behalf of DiPietro.

   The Republican field also includes Daniel J. Humiston and Christopher Lane. Humiston also filed an Independence Party petition.

    Petitions from the Independence Party's Christina Abt were also filed for the Independence, Democratic and Working Families lines.

--Robert J. McCarthy

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About Politics Now

Robert J. McCarthy

Robert J. McCarthy

A native of Schenectady, Robert J. McCarthy came to The Buffalo News in 1982 following a six-year stint at the Olean Times Herald. He is a graduate of St. Bonaventure University, and has been covering local, state and national politics since 1992.

rmccarthy@buffnews.com


Tom Precious

Tom Precious

Tom Precious joined The Buffalo News in 1997 as bureau chief at the state Capitol, where he covers everything from statewide politics and state government fiscal affairs to health care, environmental and municipal government matters. Prior to The News, he worked for news outlets in Albany and Washington, DC.

tprecious@buffnews.com


Jill Terreri

Jill Terreri

Jill Terreri is an Amherst native and has covered politics and government in upstate New York since 2003. She joined The Buffalo News in 2012 and covers City Hall.

@jillterreri | jterreri@buffnews.com


Jerry Zremski

Jerry Zremski

Jerry Zremski, The Buffalo News Washington bureau chief, has reported from the nation's capital since 1989 after joining The News as a business reporter in 1984. A graduate of Syracuse University, Zremski is a former Nieman fellow in journalism at Harvard University. In 2007, he served as president of the National Press Club.

@JerryZremski | jzremski@buffnews.com

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