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Thread: True surplus in Buffalo

  1. #1
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    True surplus in Buffalo

    The City has actually cut , and slashed its way to a true surplus. That includes setting aside money, as well as, is over and above the borrowing that the Control Board did. That is remarkable. I never thought a munincipality could turn itself around in such a short time. Nice job to the City Workers, and Administrators.

  2. #2
    Member steven's Avatar
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    Surplus for city is best in decades

    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."

    http://www.buffalonews.com/editorial...09/1007325.asp
    People who wonder if the glass is half empty or full miss the point. The glass is refillable.

  3. #3
    Member 300miles's Avatar
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    Great News.

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    The unions and school district will be salivating!!!!

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    I'd love to say "Congratulations".

    But like every other article written on the City's year end audit, this article leaves this accountant befuddled.

    For instance, consider this: "The $77 million positive fund balance also includes nearly $27 million the city borrowed over two years to help make ends meet." Wowee. They've apparently borrowed their way to surplus. Why didn't they borrow a couple of billion and show a really manly surplus. Maybe they could have borrowed enough so we wouldn't have to collect any taxes for ten or twenty years.

    Don't try this at home.

    Or these gems:
    --"The city's positive fund balance for the fiscal year ending June 30 was $77 million."
    and
    --"The $39.2 million fund balance..."

    So which is it.

    I guess you could say they assigned some cub reporter to this boring story and he/she was in over their head.

    But they seem to have found the same cubbie for the same story for the past three years.
    Truth springs from argument among friends.

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    I think..

    from what I understand, the citys surplus was 77 million. They anticipate paying out about half of that to lawsuits, unanticipated OT, and other unforseen expenses. That is why they are declaring a surplus of only 39 million. I think it is great news for the City and its employees, and residents. It appears the city won't have to borrow to balance its budgets...Who knows, maybe one day the City will be able to pay to knock down the Skyway etc. and not rely on the State of Fed govt. Or reduce the garbage fee. Wouldn't that be somthing ??? I think they should pay back the money that the CB borrowed in order to get them out of the picture asap. I don't trust that they are an independent entity.

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    Re: I think..

    Originally posted by Treeguy
    It appears the city won't have to borrow to balance its budgets...Who knows, maybe one day the City will be able to pay to knock down the Skyway etc. and not rely on the State of Fed govt.
    Treeguy-you're saying this like borrowing is a bad thing.

    According to the article, borrowing helped create the surplus.

    So we should look forward to doing more borrowing.

    Right?
    Truth springs from argument among friends.

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    Re: I think..

    Originally posted by Treeguy
    I don't trust that they are an independent entity.
    I know you and your drinking buds hate the CB. But without them, there would be no surplus.

    Real or fabricated.
    Truth springs from argument among friends.

  9. #9
    Member citymouse's Avatar
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    They have with held contractual obligations to city employees. For example if you are hired you get a set of increment steps for the first five years. They freeze you at the bottom. Or if you take a promotional exam and are promoted. you are frozen at the lowest step they can give you. They bundled it in with the wage freeze.
    It's wrong and it's illegal and with the projected surplus it is not financially a burden.
    The bastards!
    "If you want to know what God thinks of money just look at the people he gave it to."

    By the way, what happened to biker? I miss the old coot.

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    I've always believed in profit-sharing, so maybe it's time to loosen up.

    If we knew what the profit really is.

    Time to get someone other than Brian Meyer to write these annual hatchet-job stories.
    Truth springs from argument among friends.

  11. #11
    Member steven's Avatar
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    Originally posted by WestCoastPerspective
    The unions and school district will be salivating!!!!
    Sad But True

    City unions say surplus should end wage freeze
    City union leaders say news that Buffalo ended its fiscal year with the largest surplus in decades only proves that a wage freeze should be lifted.
    But the control board that watches over city spending insists the freeze is one reason why Buffalo's finances are improving, and that any talk of lifting it is premature.

    The $39.2 million cushion that remains after the city sets aside millions for anticipated expenses has some skeptics saying that Buffalo's fiscal crisis is a mirage.

    Not true, city and control board officials insisted Friday. They said the $77 million positive fund balance Buffalo racked up prior to setting aside nearly half of the sum for anticipated expenses must be put into perspective.
    The wage freeze that was imposed 19 months ago is responsible for $17 million of the savings in the fiscal year that ended June 30. Then there's $26.8 million the city borrowed over two years to balance its budgets. Officials also pointed to a $15.6 million state windfall the city received.

    While control board Executive Director Dorothy A. Johnson called the report encouraging news for a city that has made some "hard decisions," she said it doesn't justify increased spending.

    "This could evaporate in a moment if market conditions change or if more state aid were not forthcoming," said Johnson, adding that it's important the city continue to build its reserves.

    Union leaders branded the control board's reaction predictable and said it will be tough for fiscal experts to continue spinning tales of gloom and doom.

    "It's time to lift the wage freeze and get back to bargaining," said William Travis, who represents thousands of blue- and white-collar employees.

    "It means the city never had a true fiscal crisis," insisted fire union President Joseph Foley.

    Foley accused Johnson of lying during arbitration hearings earlier this year, claiming she painted a gloomier picture of Buffalo's finances than existed. Johnson branded Foley's accusation "inflammatory," saying her testimony focused on projected budget gaps that were being forecast at the time if certain steps weren't taken to avoid a deficit.

    The long-awaited year-end report is expected to be a key discussion topic when the control board meets Dec. 21.

    While Comptroller Andrew A. SanFilippo and Mayor Anthony M. Masiello hailed the surplus as a sign that finances are stabilizing, they also expressed caution. The city's long-term outlook continues to be clouded by a shrinking tax base, the absence of a revenue stream that provides annual growth, and potential liabilities. For example, the city's fiscal condition would worsen if the city loses pending lawsuits filed by unions over the wage freeze.

    Mayor-elect Byron W. Brown called the surplus "good news."

    Brown said any decision to lift the wage freeze would have to be carefully studied to see how it would affect long-range finances. He said actions that jeopardize the city's fiscal stability would only prolong the existence of the control board in its active phase. The goal, he said, must be to achieve budget stability so that the oversight panel can be put into advisory board status as soon as possible.

    Common Council leaders vowed Friday to continue efforts to hold down costs.

    "This shouldn't be a sign to spend," said Council Majority Leader Marc A. Coppola. "It should be a sign to stay the course."

    Council President David A. Franczyk expressed similar views, saying the surplus cannot be viewed as a license to engage in "gratuitous" spending.

    SanFilippo, whose office worked with outside auditors to close the books on the prior fiscal year, said many people deserve credit for the improved fiscal outlook, including the mayor, the Council and the control board. Elected officials and Johnson also credited city employees for agreeing to be placed under a single health insurer, a move that saves the city millions of dollars a year.

    "The incoming administration will be inheriting a city that is on the rebound financially," said SanFilippo.



    http://www.buffalonews.com/editorial...10/1019873.asp
    People who wonder if the glass is half empty or full miss the point. The glass is refillable.

  12. #12
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    Originally posted by citymouse
    They have with held contractual obligations to city employees. For example if you are hired you get a set of increment steps for the first five years. They freeze you at the bottom. Or if you take a promotional exam and are promoted. you are frozen at the lowest step they can give you. They bundled it in with the wage freeze.
    It's wrong and it's illegal and with the projected surplus it is not financially a burden.
    The bastards!
    It is a financial burden until debt is paid down, the size of government is reduced, taxes are slashed and the private sector economy results in a standard of living equivalent to a government employee's standard of living.
    The path is clear
    Though no eyes can see
    The course laid down long before.
    And so with gods and men
    The sheep remain inside their pen,
    Though many times they've seen the way to leave.

  13. #13
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    Originally posted by DelawareDistrict
    It is a financial burden until debt is paid down, the size of government is reduced, taxes are slashed and the private sector economy results in a standard of living equivalent to a government employee's standard of living.
    Well Said.
    a governement at its taxing limit has no business giving anyone a raise until it pays down some debt and lowers taxs to at least the national average.
    People who wonder if the glass is half empty or full miss the point. The glass is refillable.

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    I just don't follow you guys:

    a governement at its taxing limit has no business giving anyone a raise until it pays down some debt and lowers taxs to at least the national average
    and

    It is a financial burden until debt is paid down, the size of government is reduced, taxes are slashed and the private sector economy results in a standard of living equivalent to a government employee's standard of living.
    Brian Meyer's article announcing the surplus ascribed part of it to borrowings over the past couple of years.

    So what we really need to do is borrow hundreds of millions and simply eliminate all fees and taxes.
    Truth springs from argument among friends.

  15. #15
    Member tronix75's Avatar
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    Originally posted by citymouse
    They have with held contractual obligations to city employees. For example if you are hired you get a set of increment steps for the first five years. They freeze you at the bottom. Or if you take a promotional exam and are promoted. you are frozen at the lowest step they can give you. They bundled it in with the wage freeze.
    It's wrong and it's illegal and with the projected surplus it is not financially a burden.
    The bastards!
    By some twisted logic, you think you deserve a pay increase.
    You tax consuming public sector folk have caused us tax paying private sector folk to receive a pay decrease through your increased taxation.
    If anybody deserves a pay increase, it's the tax paying private sector folk.

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