Next Legislature must do better

I just finished reading the entire Office of State Comptroller audit of Franklin County’s finances. It is one of the most scathing indictments I’ve ever read of local government financial mismanagement.

The audit covered the four fiscal years between 2009 and 2012, and found the performance of the Franklin County Legislature to be as reckless as it was incompetent. Specifically, the audit found that the Legislature failed to adopt realistic and financially sustainable budgets, routinely drained significant amounts of fund reserves to finance operations, failed to maintain reasonable levels of surplus funds, and did not develop even the most basic financial planning tools: comprehensive, multi-year financial and capital plans.

In fact, the audit found that the county’s cash balance was “so depleted” over the last four fiscal years that it could not transfer the full amounts budgeted for the county highway department and the nursing home. Last May, the county even voted to borrow $4 million because it lacked the cash just to pay its bills on time. Of course, this “payday loan” carries interest charges that will only add to the county’s distress.

The audit’s prognosis was sobering: It predicted further decline in the county’s finances for 2013, occasioned in part by expenditures of $1,452,000 for which the county had not budgeted. The audit concluded that “these declining trends could result in fiscal instability if allowed to continue.” As you may have guessed, “fiscal instability” is an accounting euphemism for financial meltdown.

I understand that state-imposed mandates – particularly the share of burgeoning Medicaid costs that each New York county must bear – have wreaked financial havoc on county governments, especially those like Franklin that are heavily dependent on property taxes as their revenue source. There have been some encouraging signals from Albany, including the possible future state takeover of county Medicaid contributions. However, there is no guarantee that relief will ever be adopted, and even if it were, the effect would not be immediate, since current proposals would phase in state assumption of these costs over an eight-year period.

In any event, the gravity of the comptroller’s report makes clear that Franklin County’s fiscal morass requires immediate attention. We simply don’t have the luxury of waiting for possible future state action.

Let’s be clear about where the responsibility for this mess lies: Under New York state law, the Franklin County Legislature – more specifically, the seven-member Franklin County Board of Legislators – is solely responsible for the financial planning and management necessary to maintain the county’s fiscal health.

This November, the entire Board of Legislators is up for election. Those hoping to “clean house” will be disappointed. Three incumbents – Guy Smith, Billy Jones and Paul Maroun – are running unopposed. Of the four remaining seats, two involve challenges to incumbents and two offer fresh faces. This means that at least three, and as many as five, board members who have guided the county’s finances in the past will continue to do so for the next three years.

At a minimum, each candidate – including those running unopposed – should make the following commitments before November’s election:

to work with the Office of the State Comptroller and other financial experts to establish a sound budget and financial system that is responsive to each of the audit’s points

to put all options on the table – including tax and other revenue increases, as well as spending cuts, including reductions in the size of county government

to assume the mantle of leadership that has been sorely lacking and to take whatever steps are necessary – however painful – to put the county on the road to fiscal health

to navigate this process in a transparent way that informs, and is informed by, the county’s residents and other stakeholders

to continue insisting on state mandate reform, but to address the county’s current financial challenges in the context of current realities, without blaming the current situation on state mandates or invoking possible Medicaid reform as an excuse for failing to act.

Hopefully, the next Board of Legislators will end the financial mismanagement of the past and spare us all from the financial meltdown that the OSC audit finds is otherwise inevitable.

I find it distressing that the Adirondack Daily Enterprise has yet to express an editorial opinion on the audit and on what steps the next Board of Legislators needs to take to restore the county’s fiscal health. As I’ve said in previous letters to the editor, the paper has an important role and voice in shaping community opinion. I fully expect that the community will have the benefit of their views on both the issues and the candidates in advance of the coming election. I can think of no more important issue facing our county, and no other local institution better positioned to provide this important service to county residents.

Finally, as a longer-range goal, I would urge the next Board of Legislators to begin a discussion about returning the county to the board of supervisors model of county government that existed before 1970. As we’ve seen in Essex County, such a system has problems of its own. However, I believe that it could offer better representation to the county’s residents by moving the locus of power from Malone to the level closest to the people – our towns.

Edward Murphy lives in Vermontville.