Comptroller will have veto over Lockport budgets for 10 years - The Buffalo News

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Comptroller will have veto over Lockport budgets for 10 years

LOCKPORT – The city has agreed to allow the State Comptroller’s Office to have a veto over city budgets for the next 10 years as a condition of obtaining emergency deficit financing, Mayor Anne E. McCaffrey said Monday.

Common Council President Joseph C. Kibler said he agreed with McCaffrey’s decision to accept what Kibler called “a control board coming in the back way.”

“Any spending we do, it has to be approved by the comptroller. That’s all it is. I think it’s a good idea,” Kibler said. “Having another person look at it won’t hurt us.”

The new requirement came when Gov. Andrew M. Cuomo’s office asked for changes in the bill the State Legislature passed in June, allowing the city up to $5.35 million in bonding authority to pay off accumulated deficits. Cuomo has not yet signed the bill, which means the city can’t borrow the money.

McCaffrey said the key change pertains to a provision that, in the original version, said the city has to submit its proposed budget for comments from the Comptroller’s Office. Under the June bill, if the comptroller made any recommendations for budgetary changes, the Common Council could accept them or reject them.

The change is that the Council will no longer have the right to reject the state’s suggestions.

“It’s not optional,” McCaffrey said. “We are no longer allowed to say no. The comptroller will have the final say over the city budget this year and for the ensuing years.”

The bill allows the city to borrow its way out of debt, although it will take 10 years to pay it off.

“If we don’t agree to it, we don’t get the deficit financing,” McCaffrey said. “We’ve agreed to the new terms.”

She added, “There are other communities that have not adopted the comptroller’s recommendations and continue to be in trouble.”

Mark Johnson, a spokesman for the Comptroller’s Office, said that office had not been informed of the changes in the bill.

The city is about to begin its 2015 budget preparation process, as McCaffrey is meeting Monday with staffers from Lumsden & McCormick, the accounting firm that prepared the 2014 budget.

“The push will be for us to do a really good budget,” the mayor said.

Lockport was listed among cities that were listed by the Comptroller’s Office last year as “moderately fiscally stressed.” But a December audit showed the city had made its 2013 budget based on wrong information about its fund balance from City Treasurer Michael E. White.

The Council thought the city had surplus funds left, and appropriated most of them to keep taxes from rising too much. But actually, the city was more than $1.1 million in the hole as of the end of 2012, the audit showed. The estimated deficit for 2013 was $2.35 million.

A second audit on the city’s cash flow is to be released shortly, and a third audit on other aspects of the city’s financial crisis also is coming. The city borrowed $2.7 million against anticipated water and sewer bill collections last October to deal with a cash flow crunch.

The city has applied for more help from the state’s Financial Restructuring Board. The board’s website said it has the authority to grant or lend up to $5 million to municipalities in trouble.

“They could make suggestions, or they could make suggestions with grant money attached,” McCaffrey said. Asked about the chance of the state handing the city a $5 million grant instead of having the city borrow $5 million on the bond market, McCaffrey said: “I don’t expect that to happen.”


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