|Date:||October 1, 2021|
By Becca Bass, Elizabeth Quinlan & Johnny Qiu |
Each week, PPG summarizes important takeaways from the major Buffalo Common Council meetings. We also include information from Council meetings related to our Community Agenda items.
This week, the Common Council held three committee meetings. For this summary, we will focus on the Finance Committee, Community Development Committee, and Legislation Committee meetings. The Finance Committee concerns all matters about the budget and issuance of bonds. The Legislation Committee focuses on local laws, ordinances, and general legislation – except for civil service matters. The Community Development Committee focuses on matters pertaining to work or improvement using revenue from another government unit.
The sole agenda item for the Finance Committee Meeting was the presentation and discussion of the Fitch Ratings assessment of the City of Buffalo's finances. Deputy Comptroller Delano Dowell, Sr., presented the rating.
Fitch Ratings is one of the three credit rating agencies in the country designated by the U.S. Securities and Exchange Commission. (The other two are Standard & Poor's and Moody's.) The independent credit ratings provided by these agencies reflect their assessments of Buffalo's ability to meet its financial obligations, and it impacts the interest rates that the city is eligible to receive when borrowing money. (Read more about Fitch Ratings' system here.)
In the annual report, Fitch upgraded the City of Buffalo's outlook from "negative" to "stable." This improvement was attributed to the following:
Buffalo's bond rating remained an "A," reflecting an upper-medium grade for credit — meaning the city has high credit quality with low risk. (For reference, the highest possible bond rating is "AAA," which reflects the highest credit quality and lowest risk).
Deputy Comptroller Dowell highlighted that the key drivers of the bond rating and outlook include Buffalo's ability to raise property tax, obligation to pay fixed and contractual costs, long-term debt obligations, and general fund reserves.
In response to questions from councilmembers, Deputy Comptroller Dowell shared that while Fitch reviewed the new reserve fund Common Council is pursuing, it will not likely improve the city’s ratings until we have demonstrated a consistent trend of contributing to the reserve fund. He also clarified that while the city budgeted for a loss of $65 million in revenues during COVID-19, the revenue loss was closer to $40 million, which was covered through federal stimulus funds.
The Fitch report states the Buffalo Fiscal Stability Authority (BFSA) has a "modest stabilizing effect." BFSA is an oversight board created to oversee Buffalo's financial operations and associated entities — including the Buffalo School District, the Buffalo Municipal Housing Authority, the Buffalo Urban Renewal Agency, and the Joint Schools Construction Board. However, some councilmembers expressed concern about this less than ringing endorsement of the role of the BFSA. While multiple councilmembers acknowledged that the upgraded outlook was positive, several also voiced concerns that the improved outlook should not distract the City of Buffalo from the work that needs to be done to pursue long-term financial stability.
Councilmember Rivera commented that the report shows Buffalo's reliance on state and federal aid and that we are not in good shape to weather future crises without federal stimulus aid. He emphasized what poor financial shape the city was in before the pandemic. Councilmember Bollman highlighted that the report states that the natural growth of expenditures is outpacing anticipated revenues. Councilmember and Finance Committee Chair Wyatt said that annual revenues have averaged $475 million, while budgeted expenses are $535 million. Councilmember Wingo confirmed that there is currently $38 million in Buffalo's "rainy day fund."
Deputy Comptroller Dowell shared that approximately 72-73% of the city’s budget is allocated to contractual or fixed costs — including commitments to pensions, debt service, public safety, education, and health insurance for former and current employees — making it more challenging to trim costs. He expressed that identifying additional revenues is under the purview of the Common Council and the mayoral administration. Dowell also shared that the Comptroller's Office will finish the annual audit for the fiscal year 2021 in October, and that Standard and Poor's and Moody's will both provide ratings by April 2022.
Council President Pridgen called for the city's mayoral administration, the Common Council, and the comptroller's office to work together to pursue long-term financial stability. Finally, Councilmember Wingo summed up the discussion by saying, "I want to make sure the community knows that none of us are delusional with the city's outlook. None of us think the sky is falling, but none of us think we're doing great."
During the brief Community Development Meeting, the Council discussed the reported sale of 3241 Bailey Avenue. A community member who owns the adjacent property spoke to councilmembers about his unsuccessful attempt to purchase the property. He wants to establish a barbershop and develop both properties, but by the time he figured out how to apply for the purchase online, the property was listed as sold. Councilmember Wyatt requested that that discussion about the sale be tabled rather than approved to give real estate a chance to explain the situation. The motion was passed.
At the Legislation Committee Meeting, Buffalo resident Stephanie Klaver submitted an open letter signed by more than 20 community members into the record, asking for an update to police reform efforts. In March 2021, Buffalo submitted its plan to Albany in response to then-Governor Cuomo's call for the need to reform law enforcement in light of the 2020 uprisings and deaths of unarmed Black men.
Council Member Wyatt filed a resolution in support of the Clean Slate Act (S1553B/A6399A). If passed and signed into law, Clean Slate would remove barriers to basic human rights for the formerly incarcerated after completing their jail/prison time, probation/parole, and steering clear of subsequent convictions or charges.
Tanvier Peart, PPG Just Recovery Coordinator and member of the Clean Slate NY Coalition, spoke in support of the bill and how it will remove barriers for jobs, housing, and education for those recently incarcerated. She noted New York State has a higher incarceration rate than the UK, France, and Canada combined and how Clean Slate will reduce recidivism. Councilmembers Wingo and Rivera also spoke in support of this legislation. The Legislation Committee all voted yes to adopt this legislation.
During the meeting, councilmembers discussed 901 Fuhrman Blvd, the Outer Harbor location for a new amphitheater proposed by the Erie Canal Harbor Development Corporation. (PPG and its partners at the Our Outer Harbor Coalition have opposed the plan for a $10 million waterfront amphitheater, as the wrong use for our Great Lakes waterfront.) This project has been moved forward without recommendation. A proposed pedestrian and bicycle path will be included and adopted by councilmembers Rivera, Scanlon, Feroleto, and Nowakowski. Golombek was the only member to oppose.
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