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City Posts Welcome Surplus

The cupboard is not bare. The City of Buffalo finished last year with some money left over, for the sixth year in a row. That’s the best kind of “Groundhog Day”moment, but such news often comes with storm warnings—and this year is no different.

Buffalo City Comptroller Andrew A. SanFilippo announced a surplus for the city and again suggested its strong state oversight “training wheels,” in the form of a control board, should be loosened. We agree, to a point.

The city’s control board doesn’t just oversee city finances. It also oversees the school district for which the city is financially accountable, even though the district is legally separate. Although the district also has done a good job of controlling costs in an uncontrollable state fiscal environment, there remain serious financial issues and the state’s control board legislation doesn’t allow—at least, yet—for separating city and school fiscal concerns.

State lawmakers could seek a way to bifurcate the Buffalo Fiscal Stability Authority’s oversight responsibilities, allowing it to become a “soft” control board if the city continues to show progress. That hasn’t happened yet, though, and the state’s proposed budget poses major new financial challenges for a school district heavily dependent on state aid. Given the circumstances, it’s not yet time for a scaled-back advisory control board role.

Meanwhile, though, Mayor Byron W. Brown and his administrative team deserve credit for bringing in another year’s surplus and for recognizing the need to remain fiscally conservative during unsteady economic times on both the state and national levels.

Brown has announced plans to offer city homeowners a modest reduction in property taxes this summer, and invest in efforts to create jobs, increase tourism and improve quality of life. All are proposals that will undoubtedly be appreciated by homeowners and taxpayers, but likely will not silence criticism from city employees who see a surplus they believe is being built on the backs of workers.

There is a larger issue, though, that bears directly on the use of any surplus. Given the chaotic financial times and the state’s plans to cut aid to local governments and schools, the city has to do its best to stay prepared for the unknown. So far, it has done much better than other upstate communities —through sound financial management aided in large part by the creation in 2003 of the control board, which held down wage hikes and acted as a fiscal-policy hammer of sorts. The cost-conscious climate created here before the national economic collapse is paying dividends now.

The city has managed to store $48.2 million clear of any fiscal obligations, and there is another $33.6 million in a “rainy day” fund for emergencies—a total of $82 million in undesignated reserves and emergency funds. That’s a huge plus as other communities face cutbacks without that kind of cushion. But as SanFilippo pointed out, the storm brewing in Albany could very well mean severe reductions in state aid and significant increases in pension and health insurance costs.

There’s also the largely unknown cost of retaking control of city parks from the county and the question of whether there will continue to be an influx of federal stimulus dollars at current-year levels. Litigation and collective bargaining agreement issues also have to be considered. Prudence dictates caution, but even those dark fiscal linings should not obscure the silver cloud—of coins in the coffers, as the city posts a welcome surplus once again.