Buffalo ended its fiscal year $39.2 million in the black, the largest surplus in at least 25 years, according to a report prepared by outside auditors and scheduled for release today.
The surplus for the 2004-05 fiscal year would have been even bigger -- more than $77 million -- but nearly half of that is being set aside for anticipated costs.
City officials view the report prepared by the accounting firm Deloitte & Touche as encouraging news for a city that has been operating under a state financial control board.
"Are we out of the woods yet? No," Mayor Anthony M. Masiello said. "But we're in a healthier position now than we've been in years, possibly decades."
City Comptroller Andrew A. SanFilippo, who was scheduled to detail the report in a news conference today, agreed, saying, "This sends a message, loud and clear, to residents that the city is managing its affairs."
But officials acknowledge that Buffalo's fiscal problems are far from over.
Pending lawsuits from unions over a wage freeze that is likely to remain in place for quite some time and rising health insurance costs are just two looming issues that could affect the city's long-term fiscal health.
The city's positive fund balance for the fiscal year ending June 30 was $77 million. Almost $38 million has been set aside for anticipated expenses. For example, $12 million will be used to cover a shortfall in garbage operations, while $11 million will be set aside to cover costs related to borrowing.
The $77 million positive fund balance also includes nearly $27 million the city borrowed over two years to help make ends meet.
Officials would not discuss specifics contained in the report in advance of today's news conference.
There has been speculation for months that when the city closed the books on the 2004-05 fiscal year, it would show a significant surplus. Finance officials recently briefed Common Council members with preliminary year-end trends, and the control board that oversees city spending also has been reviewing figures.
Increased revenues from sales taxes and property taxes, combined with reductions in personnel costs, contributed to the positive fund balance. A hiring freeze imposed by the control board, job cuts through attrition and other spending cuts also have helped the bottom line, the report says.
Revenue from parking fines and investment income also were up last year.
The $39.2 million fund balance is what fiscal analysts call "free and clear" money that is left after all contingencies have been met. In the previous fiscal year that ended June 30, 2004, the city was $10.2 million in the black after all contingencies were deducted from a $53.9 million positive fund balance.
Masiello and SanFilippo said the encouraging budget news was achieved while maintaining vital city services. The mayor said that even with the fiscal hurdles Buffalo faces, it would be hard to view the year-end report as anything but positive.
"I would rather face those challenges with this kind of positive fund balance," he said. "It gives us a chance for a solid foundation."