BUFFALO, NY -- 2 On Your Side tried to get Mayor Byron Brown's response to this; but city spokesperson, Mike DeGeorge, tells us he was out of town Tuesday afternoon. He put 2 On Your Side in touch with Kevin Helfer, the co-chair of the mayor's fiscal sub-cabinet, who admits the city knowingly used reserve funds for the past two years to balance the budget. "Allows us to keep taxes low or lower taxes, spurs economic development. Going forward we know that we're going to have to be very diligent, make sure we tighten our belt."
Schroeder claims that the city of Buffalo is making a habit of dipping into it's reserves. On June 30, the city had estimated they would need $10 million of the $41 million in the unassigned fund balance. But now, there is only $6.5 million available in savings for the coming fiscal year.
"Using more fund balance this year than ever before in the six years that I've been here is problematic," said Schroeder, during a press briefing Tuesday afternoon. "It needs to be addressed by the City of Buffalo"
Schroeder named a number of reasons for the budget gap. One was overly optimistic revenue projections.
For instance, the City projected it would make about $8,238,000 on land sales; however, records show only about $922,000 in property sold.
Also, state aid from casino revenue fell short $4,473,000 primarily due to less than anticipated tribal compact funds awarded during the year.
A second reason for going over budget: increased spending. The Comptroller describes the Solid Waste Fund, as "money hemorrhaging." They budgeted $3.2 million for it, but needed an additional $1.6 million this year.
Also, Schroeder says the city could save money if it fixes staffing issues at the Buffalo Fire Department to cut down on overtime issues.
Helfer claims the city does plan to hire dozens of new fire fighters to decrease overtime. He says the city can pay 65 new hires at $30,000 which would save the city $2 million.
The Mayor's deadline for a new budget is May 2018, so it's not clear what a tighter budget will mean for taxpayers. But the comptroller's office claims the takeaway from his announcement is that poor budgeting and spending could ultimately lead to a downgrade in the city's credit rating; plus it could mean some difficult decisions down the line such as tax increases, layoffs, and even reduction in services.
"The rating agencies warned about this," explains Schroeder, "of which I have conveyed this to the Mayor each and every year. The rating agencies say when it becomes a trend, which is not good...the term trend is not good in this particular case...it means the city is relying too much on it's savings to balance the budget. And it's problematic."
Helfer says there are some land sale numbers that are still pending, which may boost those revenue numbers by a couple of million dollars, once they're in. But it's not clear when that will happen.