After five years of operating losses, the city last year was able to balance its budget and show a small surplus, according to an auditor's report to be reviewed this evening during a City Council conference session.
The 7 p.m. meeting in City Hall is open to the public.
In the fiscal year that ended March 31, the city took in $14,779,378. After expenses, it showed an undesignated fund balance of $32,950, according to the report from Freed Maxick & Battaglia.
Three years ago, the city had a deficit of $2.2 million and had to borrow to pay operating expenses.
At that time, Jason R. Molino was hired as city manager. Several Council members credit Molino with securing federal and state grants and starting new management controls to help reduce the deficit and eliminate more city borrowing.
The auditor credits the turnaround to better management, an increase in sales and property taxes and the city's commission from video lottery terminals at Batavia Downs Casino.
Financial woes forced the Council to raise real property levies by 8.5 percent in the 2009 budget, after the rate had remained relatively stable in recent years.
Despite a rosy picture, the city faces both short- and long-term challenges in terms of its future financial health.
Among those challenges are imminent back pay for police officers, a matter now in arbitration; a write-off of $1.1 million in loans for the Genesee County-wide ambulance service, which the city discontinued Aug. 31; and negotiations with two municipal worker unions.
Molino also has noted long-term factors that include a liability of $9.2 million for retirement benefits, presently not funded; reserves for compensated absences, such as vacation and sick time; and retirement and health care costs, which are expected to increase significantly during the next several years.
The city manager also wants to restore the undesignated fund balance to at least $1.3 million as a backup for needed capital projects and emergencies.
"Planning will be the key to future city successes," Molino said in a report. That planning, he said, must consider future employee benefits and funding for future equipment, facility and infrastructure needs.
"Planning today for tomorrow," Molino said, "will be the city's top priority moving forward."