Nov 18
2020
Missing persons report for city’s control board
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Editor’s note: The original version of this column incorrectly reported on events related to actions by the Buffalo Fiscal Stability Authority involving the city’s four-year budget plan.
The source of the errors: The control board, on its website, incorrectly labeled videos of special meetings held on June 16 and July 20. Investigative Post based its reporting in part on those videos, which resulted in a conflating of events.
The text below has been revised accordingly. A control board spokesman said the agency was attempting to correct the errors on its website.
Three times in the past five months, the city’s state-imposed financial control board had trouble passing resolutions its core membership all agreed to.
The board’s directors wanted to pass the resolutions. They expected to pass them.
The resolutions didn’t fail because there were any “nay” votes. No one voted against them.
There simply weren’t enough directors to vote yes.
Why?
Because the control board — formally known and the Buffalo Fiscal Stability Authority — is short three members.
And why is that?
Because Gov. Andrew Cuomo, who appoints seven of the board’s nine members, has neglected the control board for years. So have State Comptroller Thomas DiNapoli and the leadership of the State Legislature, who recommend two of the governor’s appointees.
The resolution instructed Mayor Byron Brown to come up with a more realistic four-year financial plan than the one he’d offered two months earlier to reckon with a financial crisis created by years of the city spending more than it took in and exacerbated by the COVID pandemic.
It’s a crisis unfolding in real time: Just to close the budget year that ended this June, three months into the pandemic, the city was compelled to borrow $18 million.
The resolution faulted the mayor’s four-year plan for relying on $65 million federal relief funds that have not been approved and casino payments that have been frozen for three years, as well as other uncertain revenue streams. Brown’s plan calls for borrowing more money if none of those revenues pan out — and on unspecified job and program cuts to pay off the resulting debt.
Potentially, that debt is huge. The mayor’s plan, according to the control board, could result in a deficit of $79.8 million in the budget year that ends June 30, 2021, and a deficit of $46.6 million the year after that.
Of the six directors present at the board’s June 16 meeting, four — all Cuomo appointees — favored the resolution demanding the city go back to the chalkboard.
Two abstained.
The two abstentions were representatives of the city’s mayor and the Erie County executive, who are both control board directors by virtue of their offices.
The mayor’s representative is Donna Estrich, the city’s finance commissioner. She abstained due to conflict of interest: She is the principal author of the four-year financial plan the resolution found wanting. The county executive’s representative is Benjamin Swanekamp, deputy budget director, who abstained because his boss, Mark Poloncarz, hadn’t yet read the analysis behind the resolution.
That left four “ayes,” one short of the five needed to pass anything, per the board’s enabling legislation.
The Poloncarz abstention was clearly a surprise: The other board members had expected the resolution to pass that day, despite the mayor’s obvious need to abstain.
The board’s chairman, Nils Olsen, and its secretary, George Arthur, blamed the failure on the vacancies.
“This is such a critical time to be able to act,” Olsen said during the June 16 meeting. “To be paralyzed by the lack of ability to achieve a majority is unfortunate.”
The board took a recess and reconvened the next day. At that meeting Swanekamp voted in favor, and the resolution passed.
Alas, the mayor did not respond by providing the control board a new four-year plan.
But if at first you don’t succeed, well, you know, try again.
The board called another special meeting July 20. This time, a reiteration of the same resolution failed because one director, Arthur, was absent. Estrich abstained. That left just four votes in favor — again, one shy of the five votes needed.
So, the board called for yet another special meeting — this one scheduled for Oct. 29. The resolution was amended to note, among other minor changes, the reasons for its failure to be adopted in July. And it set a Dec. 1 deadline for the mayor to comply by submitting a new plan, so that it could be considered at the board’s Dec. 9 meeting.
Alas, the Oct. 29 meeting was canceled. The board couldn’t make a quorum of five. A spokesman for the control board said he didn’t know which directors couldn’t come.
In any case, the resolution languishes. And the state’s neglect of financial oversight of a city that has spent down $100 million in reserves in 10 years — compromising its credit rating and its ability to weather the current crisis — continues.
Additional hands may be on the way. The state comptroller’s office tells Investigative Post it has sent a nomination to the governor’s office for approval. A spokesman for the governor’s office said it is “awaiting the return of background check documents so it can advance” the comptroller’s nomination. Neither office would say who the nominee is.
Meanwhile, the governor’s office said, the governor is “reviewing options to fill the one vacant seat directly appointable” by Cuomo. No name has been sent to the governor by the leadership of the State Legislature for approval.
Meantime, the control board remains a few cards shy of a full deck.
And the mayor stands pat, despite the board’s misgivings. Before instructing his representative to abstain in the June 16 vote, Brown expressed his “utmost respect” for the critical feedback received from both the board and the Common Council regarding his budget projections.
Then he politely told them to pound salt.
“The city is going to have to stand by its budget proposal at this time,” Brown said.
Update: The day after this column was originally published, the BFSA scheduled another special meeting for Monday, Nov. 23. The agenda for that meeting was not available at the time of this update.
