On the surface, it would appear to be good news that the City of Buffalo ended its fiscal year $10.2 million in the black. But celebrations ought to be held off until further notice. Buffalo has a long way to go before it's out of the fiscal woods.
As pointed out by City Comptroller Andrew SanFilippo, the surplus is easily overshadowed by looming fiscal problems, among them increased health insurance and pension costs and pending lawsuits from unions over a wage freeze.
And not long after the news about the surplus was released, the state financial control board overseeing Buffalo's finances posted its own warnings. The control board wants to know how Buffalo came up with the numbers that showed it in the black by more than $10 million. Robert Wilmers, chief executive officer of M&T Bank, called the report "confusing."
Moreover, the city had to borrow money from the control board -- $7.8 million in the 2003-04 fiscal year -- to ensure a balanced budget. City officials contend they would have had a $2.4 million cushion even without the borrowing. The surplus notwithstanding, a city that has to borrow to operate is not on solid footing.
Still, it's good the city is taking the control board's advice and putting whatever small amount of surplus it has into a reserve to try to establish a rainy-day fund. And a lot of rain is in the forecast. Buffalo is counting on $7 million of new money from the county sales tax for the next fiscal year, starting next July 1, and then $14 million and $21 million in the succeeding years. That is dicey, at best. The control board allowed those revenues to go into the city's four-year fiscal plan, but only with a proviso that the city must return in February with evidence it has the money. Otherwise, city officials will have to come up with a revised plan.
So while black ink is always better than red, this audit is like a sunny day in Florida just before a hurricane hits. It feels good now, but tough times are likely on the way.