09/29/04
Comptroller Naples Reports $37.4 Million In Sales Tax Distributions For September 2004
Erie County Comptroller Nancy A. Naples today released details regarding September sales tax distributions totaling $37.4 million to Erie County, its municipalities and school districts. This amount represents an increase of 1.7% from September 2003 cash distributed.
"The State paid $7.1 million of September sales tax to which Buffalo and its school district were entitled directly to the Buffalo Fiscal Stability Authority (BFSA) as required by legislation establishing the control board for the City of Buffalo," Naples stated. "Of the $30.3 million that remained after direct payment to the BFSA, the County retained $19.2 million of the September receipts, and distributed $11.1 million to the towns, villages, and remaining school districts and cities," Naples continued.
"Sales tax is an important source of revenue for the County and other municipalities. We are constantly monitoring this major revenue account as it is highly sensitive to changes in the economy," Naples concluded.
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07/29/04
Moody's Downgrades Erie County Bond Rating
Moody's Investors Service has downgraded the rating on the County's outstanding bonds from A2 to A3, assigned an A3 rating to the County's upcoming sale of an estimated $85 million in Public Improvement Serial Bonds, and placed a negative outlook on these ratings.
"Both this downgrading from Moody's, and Fitch's downgrading earlier this week, reflect the warnings I have been issuing for years," Naples said. The Comptroller noted that for several years she has cautioned both the Giambra Administration and the County Legislature against their continued use of reserves and other one-shot revenues to balance the County budget. "Now that the warnings are coming from both Fitch and Moody's, it is imperative that the Giambra administration and Legislature take corrective action on the structural budget imbalance," Naples said. "If corrective action is not taken, the County can expect additional downgradings from the rating agencies."
Moody's stated the downgrade reflects the County's limited liquidity levels resulting from three years of draws that reduced fund balance from 24.4% of General Fund revenues to about 13.6%
"The 2005 County budget process is just beginning and the Giambra Administration and County Legislature must work together to resolve the longstanding structural budget problem. As I've said before - and I will continue to say - it is imperative to finance recurring expenditures with recurring revenues," Naples concluded.
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05/09/03
COMPTROLLER NAPLES CLOSES BOOKS ON 2002
Erie County Comptroller Nancy A. Naples today announced that her Office has completed the 2002 year-end closing process. "Expenditures exceeded revenues by $40 million last year, resulting in a $40 million loss for the County's General Fund," Naples stated. "However, when the 2002 budget was adopted it included the use of $64 million of existing fund balance, but only $40 million of that amount was used. Because of this, the County shows a favorable variance of $24 million for 2002," Naples said.
In a letter to the Erie County Legislature and County Executive Giambra, Comptroller Naples presented a comparison of Fund Balance components for the County's General Fund for 2002 and 2001. "The County's finances are stable, but the Fund Balance has again been reduced," Naples said. Based on formulas established by the Government Finance Officers Association (GFOA), and supported by the County's independent auditor, Erie County's Unreserved Fund Balance should be somewhere between $38 million and $135 million. "At $118 million, Erie County's Unreserved Fund Balance is at the high end of the acceptable range," Naples stated. "My concern is that it's decreasing," she said.
Comptroller Naples noted that this is the second consecutive year in which the General Fund realized an operating loss (2001 had a loss of $10 million) and further noted that the 2003 Adopted Budget anticipates a loss of $50 million. "If 2003 actual operations match the budget, and the unaudited 2002 results are confirmed by our independent auditor, that would result in a $100 million reduction in the fund balance over a three-year period," Naples noted.
Comptroller Naples repeated warnings from past years against extensive use of fund balance in the budgeting process. "Recurring expenditures should be financed by recurring revenues, not by the use of one-time revenues, and that includes fund balance. Continued reliance on fund balance creates a structural deficit that becomes increasingly difficult to remove," Naples stated. The Comptroller called for fiscal restraint and for the timely issuance of budget monitoring reports. "In order to effectively manage the County's finances, complete and timely disclosure is essential," Naples concluded.
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