Troubling signs from Buffalo’s comptroller

News and analysis by Geoff Kelly, Investigative Post's political reporter

Well, she went ahead and did it. There was no good reason to do it, but she did it anyway.

Interim Buffalo Comptroller Barbara Miller-Williams has issued an amendment to her own office’s critical assessment of Mayor Byron Brown’s projected 2019-2020 budget.

The initial comptroller’s response was released on May 10, the deadline for the comptroller’s office to issue its response to the mayor’s annual budget proposal, according to the city charter. This new, amended response is dated May 15 and wasn’t submitted to the Common Council until a week after that — too late to count.

But let that slide: It’s the least of the numbers that don’t quite add up in the amended report. The differences between the two documents are stark, baffling, and sometimes comical. We’ve annotated the new report below for your edification and entertainment. (Click on yellow highlights for notes.)

The original comptroller’s response took issue with the mayor’s revenue projections, particularly its reliance on casino revenues, city-owned real estate sales, increased parking revenue, and several new and untested proposed revenue streams in order to balance the budget.

It also warned that city was likely underestimating overtime costs for the police and fire departments, as it does nearly every year.

The new budget response offers a much friendlier take, as well as “a new format.” It is intended, Miller-Williams writes, to “reflect some additional information that has been received by my office.” That new information is not explicitly identified in the report, nor is its source.

The report concludes that “overall revenues appear to be realistically budgeted.” By contrast, the initial budget response warned that the mayor’s 2019-2020 budget relies on revenue sources that are “untested,” “uncertain,” and “risky.”

A subsequent assessment by the Buffalo Fiscal Stability Authority, known colloquially as the control board, reached much the same conclusion as the original comptroller’s budget response. At a May 21 control board meeting, one member half-joked, in reference to the Brown administration’s revenue projections, “I think it is appropriate to banish words like ‘expected’” from all future city budget documents.” Another suggested the administration ought to draft and submit “a secondary action plan” in the event that projected revenue fail to materialize.

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Why plot an alternative? Because in recent years projected revenues — particularly casino revenue and revenue from real estate sales — have failed to materialize, leading the city to deplete its cash reserves to balance its budgets.

The Brown administration has used up $57 million in cash reserves in the past two years, and $107 million over the past eight years, leaving the fund balance available to plug future budget gaps at zero.

All that’s left is $38 million in the “rainy day” fund, which comprises 30 days of emergency operating funds. The city charter says this is not to be used for balancing budgets.

Miller-Williams’s new, amended budget response maintains the city “will end the current Fiscal Year with a surplus to reduce the use of budgeted fund balance.” But the initial comptroller’s response projected that the city would end the current fiscal year, which ends June 30, with a deficit between $10 million and $27 million, depending on whether the city receives the $17 million in casino revenue payments it projected it would receive this year.

At Tuesday’s Common Council meeting, Fillmore District Councilman David Franczyk lit into the new report.

“What I see here is what I feared,” Franczyk began. “You have parallel financial reports. These are parallel universes. These are different reports.”

Franczyk then went through the report, pointing out changes and inconsistencies. The first report, for example, warned that state officials had warned municipalities against budgeting casino revenues; the new report insists the state says it’s fine to do so.

“The old report talks about fear of depleting the rainy day fund,” he said, turning a page over in his hand, as if looking for something that was no longer there. “That has been entirely expurgated from the new report.”

Franczyk worried that the new report was evidence of the mayor exerting influence over the comptroller’s office. Indeed, there can be no other reasons for Miller-Williams to have submitted an amended report apart from ego and politics: The Common Council has been on a course to accept the mayor’s budget without substantial changes, despite the warnings issued in the original comptroller’s report, which echo those expressed by the control board and the city’s bond rating agencies.

Maybe Miller-Williams bristled at holdover staff, hired by her predecessor, producing a report with her name on it that undercut her political ally, the mayor. Perhaps the mayor was irked that he’d worked a political deal to put Miller-Williams in the comptroller’s office, only to have her sign and issue a report that read just like the ones his rival Mark Schroeder had issued year after year.

“You can’t have branch of government constantly dominating or trying to dominate another branch of government,” Franczyk said. “If this is the kind of work we’re going to get from the comptroller’s office, then this Council needs to hire its own auditors.”

Miller-Williams did not attend Tuesday’s Council meeting to present her new assessment.

Lovejoy District Councilman Rich Fontana, who chairs the Finance Committee, seconded Franczyk’s concerns.

“It’s almost like watching Fox News, then watching CNN, on the same report,” he said.

Fontana said the Finance Committee would consider the inconsistencies between the two reports, as well as a recent communication from the bond rating agency Moody’s expressing concerns about the depletion of the city’s fund balance.

“Maybe it’s up to us to show the new comptroller where these issues lie,” Fontana said.