The city ended its fiscal year $10.2 million in the black, according to a report that will be released this week.
City Comptroller Andrew A. SanFilippo called the accumulated surplus "positive news" but cautioned that the fund balance is dwarfed by looming fiscal problems. Buffalo faces increased health insurance and pension costs and pending lawsuits from unions over a wage freeze.
What's more, the city's fiscal recovery plan makes a highly speculative assumption that Erie County would start sharing more sales tax revenue beginning in 2006.
Still, SanFilippo characterized the review for the fiscal year that ended June 30 as positive.
"It's encouraging news for citizens to know that the city is not bleeding to death," SanFilippo said Monday. "We still face serious issues, but the (report) indicates that the city is managing its affairs during some very difficult budget times."
Officials of the state financial control board were reviewing the report this week and deferred any comments until the oversight panel holds its monthly meeting Wednesday. Analysts from Deloitte & Touche, the city's outside auditor, are scheduled to attend the 1 p.m. board meeting in the Buffalo Convention Center.
Increased revenues from the property tax, sales tax, parking violations and mortgage tax lifted the city's bottom line in the last fiscal year. Personnel costs were down by $7.8 million, although those savings were more than offset by a $7.8 million increase in health insurance costs and a $10.3 million increase in pension expenses, the report concludes.
Mayor Anthony M. Masiello said he thinks the year-end numbers demonstrate that city officials are "managing the heck out of this place." He expressed hope that the accumulated surplus might allow the city to slash planned borrowings in the coming year.
"I've said all along that borrowing should be the last thing we do," Masiello said.
The city borrowed $7.8 million in the 2003-04 fiscal year to ensure a balanced budget. Even without the borrowing, officials said, the city would have had a $2.4 million cushion.
Technically, the city ended the fiscal year with a $47.3 million fund balance. However, $37.1 million has been set aside for various anticipated expenses, including special state aid reserved for departmental restructurings, funds for legal claims, shortfalls in the city's garbage enterprise fund and other costs.
The city posted an $8.3 million accumulated surplus in the fiscal year that ended in June 2003. It ended the 2001-02 year with no fund balance and the 2000-01 year $9.7 million in the black.
SanFilippo said elected city officials, union leaders, employees and the control board all deserve credit for taking some tough steps. A hiring freeze, job cuts and other spending reductions have helped the bottom line, he said.
"The mayor and Common Council have had to make some courageous and unpopular decisions," SanFilippo said.