Last week, Deloitte & Touche issued a FY 2006-07 audit for the City of Buffalo and reported a $21,695,000 surplus, the largest in the city's history and the fifth consecutive surplus reported since the fiscal crisis began in 2001-02. This latest double-digit surplus brings the City's total fund balance to just over $117 million, with $76 million free from any financial commitments or restrictions. Good news indeed, right?
"It is now time to acknowledge that the fiscal crisis in Buffalo is over and that the Buffalo Fiscal Stability Authority immediately begin to transition the city from a fiscal control period to an advisory period," said Mayor Brown in a written statement. "I am proud of the success my Administration has achieved in budgeting responsibly and maintaining a measurable city surplus. We have faithfully followed the conservative fiscal management principles I announced when taking office. The control period perpetuates old stereotypes of Buffalo and clouds the economic revival that has taken place with over $4.4 billion in new economic development projects throughout the city, as well as the healthy growth in property values in our residential neighborhoods and business districts."
Buffalo has met all of the tests stipulated in the BFSA Act, which are necessary before it can transition into an advisory period: Three successive years of balanced budgets and the demonstrated ability for the City to issue its own debt.
At the end of the control period, an advisory period would commence. The City would still be required to produce balanced four-year financial plans for Control Board review and the City must continue to ensure its budget is balanced each year or it would revert back into a control period according to state law.
“While the same tough fiscal controls would be in place, what would be different is that Buffalo would no longer be under the cloud of a financial control period,” said Mayor Brown. “This outcome would send a powerful signal nationwide that Buffalo is fiscally sound, economically strong, and is a stable place to live, work, and invest.”
Is Buffalo on solid fiscal ground? Is it time to shift the control board to advisory-only? Are the surpluses only due to increased and undependable State aid and wage freezes? Can the hen house open its doors?
Entry Image: CitySky Photography by Nate Farnsworth.