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NYS Comptroller

THOMAS P. DiNAPOLI

Audits of Local Governments and School Districts

Monroe County – Sale of Iola Powerhouse (2012M-23)


Released: June 1, 2012 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to examine the activities related to the sale of the Iola Powerhouse for the period January 1, 2002, to April 11, 2011.

Background

Monroe County (County) is located in Western New York on the south shore of Lake Ontario. The County is comprised of 19 towns, 10 villages, and the City of Rochester, and has a population of approximately 750,000 residents. The County Executive and 29-member County Legislature (Legislature) govern County operations. The County’s budgeted appropriations for the 2011 fiscal year were $932 million. The County owned and operated the Iola Powerhouse (Powerhouse) to produce and supply steam to six major governmental buildings and building complexes.

Key Findings

  • The County used Newpower, a Local Development Corporation (LDC), to purchase the County’s Iola Powerhouse; this sales transaction was not in the County’s best interests. Newpower purchased the Powerhouse for $7 million and issued bond anticipation notes for this amount essentially on the County’s behalf to pay for operating expenditures in the 2002 fiscal year. The County is not authorized by law to issue debt for operating expenditures.
  • Although the County initially issued a request for proposals (RFP) for the sale of the Powerhouse and provision of energy services, it disregarded the proposals it received, deemed the Powerhouse a surplus asset, and sold it to Newpower, a newly-created LDC. County officials could not provide any information on their decision to disregard the RFP process and contract with Newpower.

Key Recommendations

  • Discontinue using another entity to execute actions the County is unable to perform itself, such as issuing debt to fund operating expenses.
  • When an RFP process is authorized, allow sufficient time for vendors to analyze and respond, then thoroughly review and analyze all proposals using formal evaluation/rating criteria, and document their recommendation prior to awarding contracts. County officials should retain this documentation.

Local Government and School Accountability Contact Information:

Phone: (518) 474-4037; Email: localgov@osc.state.ny.us
Address: Office of the State Comptroller, Division of Local Government and School Accountability
110 State Street, 12th Floor; Albany, NY 12236