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Worst is over, Lockport mayor says, as State of the City speech sets positive tone

LOCKPORT – “2015 will prove to be a memorable year for the right reasons,” Mayor Anne E. McCaffrey promised in her State of the City address Tuesday.

McCaffrey succeeded Michael W. Tucker after his Feb. 21, 2014, resignation and found herself struggling against a financial crisis that was finally resolved with a series of difficult decisions: layoffs, a tax increase, the abolition of city ambulance service and the virtual abolition of city youth programs, while the city was saved from going broke by accelerated state aid and more than $4 million in emergency borrowing to cover past deficits.

Now, McCaffrey assured her audience at the weekly Rotary Club luncheon meeting in the Lockport Town and Country Club, the worst is over.

“The city’s financial problems of 2014 are becoming history,” McCaffrey said. “We are seeing a renewed energy, optimism and excitement that we haven’t seen in some time. The City of Lockport has momentum now, and my goal continues to be to keep the momentum going and to make Lockport a place of pride to live, work, play and visit. I believe that we have positioned Lockport to be a better and stronger city for years to come.”

One sign of progress, McCaffrey said in an interview after the speech, is that auditors from the State Comptroller’s Office aren’t hanging out in City Hall anymore.

“They were physically present in City Hall for months,” she said. State auditors were in the building regularly from January through August, working on a cash-flow audit, and came back in November to figure out exactly how large the accumulated deficits were in order to approve the amount of the borrowing.

McCaffrey said she must submit quarterly financial reports to the comptroller, and starting this fall, the city’s annual budgets must be preapproved in Albany. Those were conditions of the special state law that allowed Lockport to borrow money to pay off deficits, something not usually allowed for local governments in New York.

Among the changes coming is the appointment of a director of finance, a new $75,000-a-year official who will be assigned to do many of the things that the City Treasurer’s Office was supposed to do, but failed to do successfully, according to the state and private audits.

A new Audit Committee of three Lockport business leaders will hire an outside auditing firm and oversee its work to make sure fiscal problems are detected, after the city’s longtime auditing firm failed to discover that the city was out of money at the end of 2012.

That and a reliance on what proved to be incorrect financial reports from Treasurer Michael E. White led to a 2013 budget that appropriated nonexistent surplus funds and triggered the city financial crisis.

McCaffrey said she expects to choose the finance director sometime in February. She said John P. Schiavone, of the Lumsden & McCormick accounting firm that has created the last two city budgets, has been doing much of the recruiting, and about a dozen résumés are in hand.

The city also needs to hire an accountant to succeed Ruth E. Ohol as accountant and auditor. She retired last week.