Rochester, New York – July 12, 2012. While the press is deluged by dog park and pickleball court ribbon cuttings, there has been little discussion of County Finances. The County’s Comprehensive Annual Financial Report (CAFR) for 2011 was quietly released a month ago. Unfortunately, the news is not good.
Democratic Leader Ted O’Brien (D-Irondequoit) said, “As in years past, the Brooks Administration has used what I like to call ‘Enron accounting’ to balance County Budgets. By continuing to utilize one-shot revenue sources—instead of making annually recurring spending reductions—this administration has decimated the County’s financial well-being. With net assets having declined almost 50% in the past decade, this County is headed straight for bankruptcy.”
The County reports that we ended 2011 with a balance in the General Fund of $7,842,000. But, a careful review of the CAFR reveals that this fund balance was only accomplished by failing to record and pay part of our pension costs to the State Retirement System. At the end of 2011, the County has deferred $13,651,000 of pension costs for 2010 and 2011. If the County had recorded its unpaid pension bills, the General Fund would have had a deficit of $5,809,000. And there are other unpaid unrecorded bills such as the $11,628,000 of sales tax money that is still owed to the suburban school districts as a result of the failed so-called FAIR Plan.
The long term decline in the County’s financial position is abundantly clear; the County’s total net assets declined by $48,563,000 in 2011 to $522,258,000. The County’s net assets have declined by 46.8% in the last ten years. But if you dig into the numbers, the news is even worse. Without the recent federal stimulus money, the County’s total net assets would have declined by $59,563,000 in 2011 to $445,258,000, a ten year decline of 54.6%.
“We have been warning about this rapidly approaching fiscal crisis for five years. We are not alone. Erie and Nassau counties have Fiscal Control Boards. Rockland and Suffolk counties are in serious trouble. The first step to solving this critical problem is to stop hiding the financial report and admit that we have a critical problem. The second step is to begin a meaningful dialogue across the aisle and with the community about the problem and possible solutions. We must find some way to work together to staunch this hemorrhaging of assets before a control board is forced upon this county,” O’Brien added.