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.”
This article appears in A cultural gem in a high-tech hub.
