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Change from 'hard' to 'soft' status set for control board vote May 29

The state-appointed financial control board for the City of Buffalo will hold a special meeting in two weeks, when it is expected to vote on changing from "hard" to "soft" status July 1.

The Buffalo Fiscal Stability Authority board Monday voted, 7-1, to schedule a special meeting for May 29 to potentially make the shift, which would give the city government and the Buffalo Public Schools more freedom over their own finances.

"We are a year late. This really should have gone soft last year," said board member George K. Arthur. Arthur was referring to a 2010 situation where the city missed a borrowing deadline by two weeks, which many believed pushed back the ability of the board to move to advisory status.

Board Chairman R. Nils Olsen Jr. cast the lone vote against setting the special meeting.

The board's vote came after some discussion and after board members spoke with a public finance expert via videoconference.

The opinion of William H. Holder, dean of the Leventhal School of Accounting at the University of Southern California, was sought by the board to address questions raised by the vagueness of the criteria in state law outlining what is required for the control board to move to advisory status.

The state established the control board in 2003 and gave it power over the city and the school district.

Among the powers of a hard -- but not a soft -- control board are the ability to impose wage and hiring freezes and to reject collective-bargaining agreements.

A hard control board also must approve any expenditure of more than $50,000.

Later in Monday's meeting, Olsen outlined his continuing concerns over the financial condition of the school district.

In its four-year fiscal plan submitted to the control board, the district projects that it will be left with a deficit of more than $70 million even after serious cuts.

It is a situation that Olsen called "beyond dismal."

Under state law, the control board will exist in some form until June 30, 2037. Any change to that would require an amendment to the law.

The control board retains the ability to shift back to hard status after it moves into advisory mode.

email: abesecker@buffnews.com