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City Boasts 7th Straight Surplus But With Caveat

State’s fiscal fallout could be disruptive

By Phil Fairbanks
Buffalo News Staff Reporter

The City of Buffalo will end the year with a cash surplus — its seventh in as many years — but well aware that the state’s fiscal woes could dampen its rosy outlook.

City Comptroller Andrew A. SanFilippo is announcing the $4 million surplus at a news conference today, but with the caveat that bad times may lie ahead.
The fear is that state budget cuts could force City Hall to dig deep into its $50 million reserve fund or $34 million “rainy day” fund set aside for unexpected expenses.

“Reading the tea leaves coming out of Albany is not encouraging,” SanFilippo said Tuesday. “Our concern is a drastic cut in state aid.”

Even without a large cut in state aid next year, a portion of the city’s reserve fund is already set aside for use in balancing future budgets.

City accountant Anne Forti- Sciarrino said the city’s four-year plan anticipates using about $25 million over a three-year period.

SanFilippo is nevertheless up-beat about the city’s fiscal future and suggested that it may be time to consider spending some of its savings.

He offered a laundry list of possible uses, from cutting taxes and reducing debt to hiring more police and assisting cultural organizations.

“Obviously, that’s a responsibility of the mayor and the Council,” SanFilippo said, but “I think that’s something the city should explore.”

He said the city’s strong financial outlook also points up the need for Buffalo’s state-appointed control board to revert from its current “hard” status to “soft” — advisory only.

His comments came just a day after Gov. David A. Paterson vetoed legislation that would have weakened the board’s powers. The board is preparing to move on its own into advisory-only status.

“That just demonstrates how uninformed the governor is about [Buffalo’s] finances,” SanFilippo said of Paterson’s veto. “We are hardly a candidate for a hard control board.”

To help make his point, he noted that in addition to the $84 million set aside in the reserve and rainy day funds, the control board is sitting on nearly $18 million in unspent state aid administered by the board. City officials want to ensure that money will still be available to them in the future.

“The question,” Deputy City Comptroller Darby R. Fishkin said, “is: What is the status of those funds?”

The control board, which was imposed on the city in 2003, has played a major role in stabilizing the city’s once-troubled finances.

The board currently has the power to approve or reject all spending that exceeds $50,000 but is perhaps best known for freezing the salaries of city and school employees for a three-year period that began in 2004.

SanFilippo’s report card gives the city, including the Brown administration, high marks for fiscal management and says the city’s total fund balance — $142 million, accumulated in recent years — has never been higher. Of that, about $58 million is set aside for future anticipated liabilities.

The city also is seeing the benefits of its continuing debt diet. Over the last eight years, the city’s overall debt has dropped from a high of $431 million to $303 million.

Despite those positive trends, SanFilippo said, the city should be cautious. He knows, for example, that union leaders and others have been critical of the city’s tightfisted approach to finances. He also knows that pension and health care costs are likely to rise in the years ahead, even if the city continues to downsize its work force.

SanFilippo is announcing the year-end fiscal results at to-day’s news conference and later during a meeting with the local business community.

“I’m trying to change the negative attitude about Buffalo,” he told The Buffalo News. “We have a great story to tell, and I’m going to tell it.”