Thanks to the Seneca Nation of Indian’s victory over a dispute involving casino funds, the City of Buffalo managed to finish on a $948.715 surplus for their 2018-2019 fiscal year.
The tribe received a $7.5 million advance from the $17m owed by the state according to the annual financial report, and the city can expect plenty more millions in Seneca’s revenues once a federal judge rules out the remaining balance due to Buffalo on Friday.
Though this is great news for Buffalo’s economy, the Common Council’s Chairman Richard A. Fontana said how they must continue to be frugal and keep a close eye on the city’s money pot.
“You can never exhale. … The budget is a living, breathing document that you have to constantly put effort into,” said Fontana. “It’s a constant battle.”
The city’s reserves sat at $92.9m at the end of June this year; increasing by $900,000 the year prior according to the Comprehensive Annual Financial Report, and evidence from independent auditors. The Financial Committee is due to discuss the report’s findings in a meeting on November 19.
Not Guilty
Earlier in the year, the Seneca Nation were wrongly accused of withholding over $255m in revenue payments from the state of New York. District Court Judge William M. Skretny favored the arbitration panel when the case was being review in court on Friday. If the tribe hadn’t appealed their side of the argument, the judge’s ruling would have resulted in a resumption of casino payments to several different localities across Western New York.
25% of the payments would have counted as the state’s share of hosting fees, and although the tribe wanted the matter reviewed by the U.S.
Department of Interior, Skretny rejected their request.
Buffalo is owed another $9.5m in casino revenue from the state too. The city put $11m to one side out of their $508.6m spending budget for the 2019-2020 fiscal year.
Following the judge’s decision in a written statement, Byron W. Brown, the city’s Mayor, said that “We hope that (the) ruling ends the Seneca Nation’s attempt to delay payments owed to the state and the city, that we can resume our usual good relations with the Seneca Nation and that the millions of dollars owed to Buffalo and its residents are paid quickly, so that our city’s excellent financial position can no longer be questioned.”
After fears over the city drawing on their yearly reserves (as they have done so far every year so far), the Mayor’s administration also confirmed that any amount above the $11m budget will be used to “replenish and fund balance.”
Bad Grades
One of the 3 most prolific rating agencies, Fitch Ratings dropped the city’s credit rating from AA- to A+ following the city’s avid reputation for dipping into their reserves; depleting Buffalo’s financial resources and its ability to deal with any economic hardship.
The control board and 2 other credit rating firms have also expressed similar worries over the city’s poor spending choices. This has resulted in the city’s saving account balance being reduced to zero. Before, this was used to fill the gaps in the budget, and has now been noted as an “indicator of fiscal pressure,” according to the Government Finance Officers Association. A fund balance replenishment program is now being considered by the board.
Although the Mayor cut property taxes every year since he went into office almost 14 years ago, 2018-2019 is the first time Brown has had to increase property taxes as a result of the city’s financial struggles.
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