Monroe County officials used a local development corporation to issue bonds to cover county operating expenses, costing taxpayers $33 million in debt, an audit released Friday by state Comptroller Thomas DiNapoli reports.
The county created Monroe Newpower Corp. in 2002 to purchase Iola Powerhouse—its 75-year-old coal-burning plant—for $7 million without an appraisal, the comptroller’s office said.
The county used the $7 million to cover operating expenses and secured $33 million in Newpower bond anticipation notes to be repaid by taxpayers over the 32-year life of the bond, the statement says.
“Monroe County used a shadow entity it created to cover daily operating expenses,” DiNapoli said in a statement. “This backdoor borrowing loaded taxpayers with debt for three decades.
“This marks the second time we’ve seen Monroe County misuse LDCs to fund county operations. This is clearly not what LDCs are intended for and it needs reform.”
DiNapoli and state Attorney General Eric Schneiderman are investigating the use of two other LDCs regarding management fees and a $224 million upgrade of the county’s emergency communications system.
In a letter of response included with the audit, county officials state they disagree with the audit’s opinions and conclusions. They all question the timing of the audit because the sale occurred during the tenure of a prior administration and staff.
“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,” Chief Financial Officer Scott Adair wrote.
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