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Brown logs small gains with grants

The first major spending plan of Mayor Byron W. Brown's administration makes better use of federal aid to combat poverty and promote economic development, but stops short of overhauling a program that's long been a blueprint for waste, a Buffalo News analysis shows.

The $19.3 million budget for the Community Development Block Grant program reins in pork barrel spending and includes measures to hold public service agencies more accountable for the way they spend, The News found.

But the budget does not alter spending priorities. Spending on bureaucracy continues to consume a relatively large share of the budget, while a small amount is earmarked for brick-and-mortar projects.

Moreover, the Council continues to play a big role in funding for public service agencies, regardless of what kind of job the organizations are doing. In fact, a few of the poorest-performing agencies received the biggest increases from the Council.

The News analysis shows Buffalo's use of block grant funds continues to be out of step with practices across the country.

Administrative overhead and repayment of loans, many the result of failed development projects, account for 49 percent of Buffalo's spending, nearly triple the national average of 17 percent.

Buffalo plans to spend just 3 percent of its budget on public improvements -- brick and mortar projects -- vs. 32 percent nationally.

Timothy E. Wanamaker, the city's director of strategic planning and chief architect of the spending plan, characterizes the improvements as "modest."

Others also note progress, while saying the improvements do not go far enough.

"I think we're no further than halfway," said Jody Harvey, executive director of the Buffalo Community Center Collaborative, which is made up of a dozen human service agencies that receive block grant funds.

Wanamaker, in crafting the budget for the upcoming year, was confronted by a $1.5 million federal funding cut.

In total, the city's new block grant budget is about 15 percent less than this year's. The reduced funding resulted in across-the-board cuts.

Money earmarked for administrative costs, primarily salaries and benefits, was cut by $1 million, or 14 percent. As a share of the overall budget, however, administrative costs are up by about 2 percent.

Unlike the current budget, which avoided any job cuts, Wanamaker said the City Hall payroll funded with block grant dollars will be cut come July 1. Some 124 jobs are paid for in whole or part with block grant dollars.

"You can't take that big of a hit and not lose jobs," he said.

Money for capital improvements is down more dramatically, by three-quarters. That's largely because pork barrel spending for pet projects in Council districts was dramatically scaled back.

A year ago, the Council insisted on $1.55 million in capital spending in their districts. All they would get in the new budget is $270,000, or $30,000 per member.

"They wanted their $1 million again this year. We wouldn't let them change it," Wanamaker said. "They were reasonable, though, and listened to us.

Politics has largely influenced funding decisions. Last year, for example, city officials conceded that a quarter of the agencies getting funds weren't doing a satisfactory job, but the money kept coming largely at the insistence of the Council.

The city over the past year instituted a process to monitor and evaluate agencies.

"We had much better intelligence," Wanamaker said.

The administration used that in making funding recommendations to the Council. The five top performing agencies were slated to receive the same amount of money as in the current budget; the remainder would see funds cut.

The Council, however, cut funding for two of the top and increased funding to five of the 10-lowest ranked organizations.

Two agencies that received the biggest increases over the administration proposal received an unsatisfactory rating -- the North Buffalo Community Development Corp. and Metro Community Development Corp.

Brown opted not to veto.

Rather than earmarking money for other projects deemed legitimate, the administration opted not to spend. Wanamaker said it was one of the least painful ways to cope with the reduction in block grant aid.

Money for demolitions was cut by more than $500,000, but is more than made up by the sale of bonds to raze abandoned houses and buildings.

Money to help pay the salaries of building inspectors was cut by more than $600,000, largely because of the city's failure last year to get inspectors to use hand-held computers to document the work that would have been eligible for federal reimbursement.

The block grant budget includes one major initiative. Nearly $1.5 million is earmarked to repay a line of credit with Fannie Mae, a government-sponsored company that buys mortgages from lenders, to help finance housing and economic development projects.

Among the intended uses: construction of 48 houses on the East Side to complete the troubled Home Ownership Zone program; rehabilitation and resale of houses foreclosed on by the federal government; and the revitalization of the 800 block of Main Street with residential and commercial development.

The Section 108 loan program continues to be a drain. The city is spending 17 percent of the budget -- some $3.3 million -- to repay the federal government for loans.

The most contentious aspect of the budgeting process involved money allocated for public service agencies that provide youth, senior, recreational and other services.


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