The next mayor of Buffalo will have giant budget holes to fill; a hard control board is needed

There is much at stake in this year’s election for Mayor of Buffalo which will affect every city resident and others beyond the city limits. The decisions that have been made in City Hall in recent years have left giant holes in the city’s operating budget. Previous posts have detailed some of the major budget issues. You can read those posts here and here.

American Rescue Plan money which is arriving over a two year period will help with many things, but when it comes to the city’s operating budget the value will be fleeting. The legislation that created the relief pot of money has requirements and limitations on the use of the money. The law in part states that the funds may be used to:

“(A) respond to or mitigate the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19) or its negative economic impacts;

“(B) cover costs incurred as a result of such emergency;

“(C) replace revenue that was lost, delayed, or decreased (as determined based on revenue projections for the metropolitan city, nonentitlement unit of local government, or county as of January 27, 2020) as a result of such emergency; or

“(D) address the negative economic impacts of such emergency.

Mayor Byron Brown’s administration has released a draft plan for the use of the Rescue Plan funds over the next two years.  The majority of money will go to a variety of public works, housing and social service related activities.  The biggest single portion of the funds, however, will go for the replacement of revenues that were “lost, delayed, or decreased” due to the pandemic.  One hundred million dollars is assigned for such purposes.

The $100 million for revenue loss replacement, according to the plan, will be allocated 70 percent toward the already completed 2019-2020 and 2020-2021 fiscal years revenue holes and 30 percent for the 2021-22 budget.  While the plan identifies general categories of revenue losses, details are lacking.  The amount of sales tax and parking revenues that are claimed to have been lost seems to be on the high side but cannot be definitively determined without further documentation.

The Brown administration is also reporting that the replacement of revenues includes $4 million for traffic improvements; $1.5 million for city cybersecurity; $1.2 million for Buffalo Urban Development Corporation operating assistance; and $0.53 for BFD Self-Contained Breathing Apparatus upgrades.  It would be interesting to know how they are justifying such expenses as revenue replacements to the Treasury Department.

In addition to the direct use of the money to fill budget revenue gaps the administration also expects to use $5.5 million “to provide low-income residents with assistance in clearing any debts or outstanding bills related to their City [garbage] user-fee.”  Money going toward residents “clearing any debts or outstanding bills” likely means that the debt forgiveness cash will directly or indirectly find its way into the city’s general fund.  Likewise with another allocation of funds in the plan: “$13 million will be allocated to forgive the outstanding balances of every household’s water and sewer bills.”

Add up the revenue replacement ($100 million) plus the four spending projects ($7.23 million) plus the debt and outstanding balances forgiveness ($18.5 million) and you have a tidy $125.73 million in some form of revenue replacement relief.

The one-time federal money is filling budget gaps over a three fiscal year period that will end on June 30, 2022.  So what happens then?  How will the city fill the recurring gaps after that date?  Here is what the plan says about that:  “             .”

Overestimating revenues and the lack of real planning concerning the out-year finances is nothing new for the City of Buffalo.  The Brown administration, the Common Council, and more recently the City Comptroller’s office have been mostly vague or simply not forthcoming in providing such information.  Hoping that any of the city powers-to-be can or will step up now to speak truthfully about the seriousness of the city’s financial problems and propose the hard solutions that are necessary is not something you might want to hold your breath about.

As you might have noticed there is an election for mayor in 2021.  So where does the winner of the Democratic primary stand on these issues.  Who knows?

India Walton’s campaign website has a Key Campaign Issues section which outlines some short and long term goals. The document, like many campaign policy plans, is long on generalities and action verbs (prioritize, establish, increase, create, etc.) but lacking in details about how to implement or pay for its proposals.

The only direct reference to the city budget is a comment about including the public in annual budget development.  All well and good.  But we have no idea what Walton knows about the city’s financial difficulties or if she will be proposing her own plans for the budget, both long and short term.  We also know nothing about who might be advising her about such matters.  We see various proposals for creating or expanding programs but there isn’t a dollar sign anywhere for anything.

It is understandable that a campaign is about winning and the governing part comes later.  But Walton has a serious chance of taking over as mayor in five months so it is not unreasonable to want to see her put numbers to paper so that city residents and other interested parties can kick the tires and see if their purchase (vote) is worth it.

With reserves exhausted and budgets balanced only in a theoretical sense it is clear the Brown administration has major short comings in managing the city’s money going forward.  The Common Council and the Comptroller have shown little or no interest in setting the city straight.

Walton’s campaign has been mostly about process and generalities about what she wants to do. There are no plans, no specifics, and no indication that Walton is ready at this time to manage the city’s finances.

This all means that the Buffalo Fiscal Stability Authority has to be brought back to life as a hard control board no matter who is elected mayor.  A hard control board will have the power and authority to nudge or push the mayor who is in office in January to make the hard decisions that allow city government to function properly.

The problem is, the control board itself is not able to function appropriately and aggressively.  Excluding the mayor and the county executive, who are ex-officio members, there are supposed to be seven members.  There are four.  The quorum requirement for board action is five members.

One of the current members had his four-year term expire six years ago.  Two other members’ terms expired more than four years ago.  The only member whose term is current is Andy San Filippo, the former city Comptroller and Deputy State Comptroller.  San Filippo is more than capable of doing what needs to be done but he needs help. 

When the federal operating budget relief money dries up next year the city budget will have gaping holes to fill.  The State of New York already provides more than $160 million annually to support the city.   Unless the governor and State Legislature are willing to come up with millions of dollars more every year they need to look at alternatives.

The federal funds are buying the city a little time but it is up to Governor Andrew Cuomo and state legislators to reconstitute the Buffalo control board and direct the new members to actively step forward to respond to the city’s fiscal crisis.

There have been several local news stories dealing with past negative actions of one of the candidates.  More charges will fly back and forth between both campaigns before it’s over on November 2nd.

This blog will leave such things to others who have an interest in discussing them.  What is important is what the candidates know, what they plan to do, who comprises their respective teams, and how honest they are about such things.

There are many things to review in the coming weeks not just about the city’s finances but also program proposals and how they might serve the public.

Watch this space.

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