NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A10514
SPONSOR: Morelle
 
TITLE OF BILL:
An act authorizing the financing of and providing for a period of proba-
ble usefulness to the pre-payment of certain service contract obli-
gations
 
PURPOSE:
Authorizes Monroe County to finance, by the issuance of bonds of the
county, the pre-payment of the certain service contract obligations in
amounts sufficient to redeem bonds issued by certain local development
corporations (LDC).
 
SUMMARY OF SPECIFIC PROVISIONS:
Section 1. Authorizes the issuance of bonds of the county to pre-pay
service contract obligations in amounts sufficient to redeem the bonds
of the following LDCs:
*Monroe Newpower Corporation
*Monroe Security and Safety Systems Local Development Corporation
*Upstate Telecommunications Corporation
Section 2. Provides that the financing of service contract obligations
shall be considered a specific object or purpose of the County.
Section 3. Provides that the probable usefulness for the financing of a
service contract obligation shall be twenty years.
Section 4. Provides that the bonds may be sold at public sale in accord-
ance with Title 4 of the local finance law.
Section 5. Effective date.
 
JUSTIFICATION:
Monroe County has requested legislation authorizing the County to issue
bonds, the proceeds of which would be used to purchase the Service
Contracts that are the framework for the contractual relationships
between the County and three LDCs. The purchase would also include the
physical assets of each LDC.
The three LDCs, Upstate Telecommunications Corp. (UTC), Monroe Security
& Safety Systems Local Development Corporation (M3S), and Monroe Newpow-
er Corporation (MNP) were incorporated with the approval of the County
to provide services and assets that would be customarily provided
directly by the government entity. Those services included the manage-
ment and acquisition of information technology services, safety and
security systems, and energy supply services.
Representations that these entities could provide basic government
services more efficiently and at a lower cost to the County and its
taxpayers were inaccurate. The Office of the State Comptroller has
issued three reports critical of each of these LDCs.{1}
When LDCs are organized to provide fundamental government services, the
Monroe County experience with UTC, M3S, and MNP is evidence that they
provide little or no benefit. Monroe County could have, provided the
same services with lower operating costs, lower borrowing costs and with
the openness and transparency expected of government operations.
The County estimates that there will be savings going forward of more
than $19 million from reduced interest and administrative costs from the
termination of the agreements with the LDCs.
 
LEGISLATIVE HISTORY:
New bill.
 
FISCAL IMPLICATIONS:
None to the State.
 
EFFECTIVE DATE:
Immediate.
{1} Audit Report State Comptroller 2010M-237 Monroe County: Use of Local
Development Corporations to Contract for the County's Information Tech-
nology System Audit Report of the State Comptroller 2012M-23 Monroe
County: Sale of the Iola Powerhouse Audit Report of the State Comp-
troller 2012-123 Monroe County: Use of a Local Development Corporation
to Contract for Public Safety and Security Systems