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Welcome to the Buffalo City Comptroller’s webpage. This site is a valuable resource for a wealth information on the financial affairs of the City. The Comptroller is the City’s top fiscal watchdog, responsible for ensuring that your tax dollars are spent wisely, efficiently, and in ways that make your neighborhood a better place to live. This Department is responsible for all accounting services for the city, in addition to conducting audits to eliminate waste, fraud, and mismanagement in city government. It also is responsible for managing the city's investments and selling its municpal bonds.
Thanks for visiting the “digital” Comptroller’s office. If there is any financial information about the city that you can’t find on this webpage, please feel free to contact me. I am honored to serve the citizens of Buffalo, and privileged for the opportunity to protect their tax dollars as City Comptroller.
Standard & Poor’s upgrades Buffalo to “A+”
“A+” rating by Fitch and “A1” by Moody’s are maintained
Citing recent economic development and “strong financial management,” Standard & Poor’s has upgraded the City of Buffalo’s bond rating to “A+” in its rating report released today.
“We are pleased that Standard & Poor’s has recognized the progress the City of Buffalo has made, both financially and economically,” said Buffalo Comptroller Mark J.F. Schroeder. “This is an exciting time for Buffalo, and Wall Street has taken notice.”
Schroeder took analysts from Standard & Poor’s on a tour of Buffalo last May – with stops at the Buffalo Niagara Medical Campus, the waterfront, and Larkinville – in an effort to showcase the city’s economic development projects.
“I wanted the analysts to see first-hand the momentum our economy is experiencing,” said Schroeder, who enlisted Congressman Brian Higgins, Howard Zemsky, and Patrick Whalen, chief operating officer of the medical campus, as tour guides. “I believe they left here impressed with the direction the city is headed.”
In addition to noting the city’s “very strong reserve position,” Standard & Poor’s pointed out that “a number of development projects centering on health care and high-tech manufacturing are currently in progress…and could add to the city’s employment, tax base, and income levels in the long term.”
Schroeder also took Moody’s on a similar tour last year, and that rating agency affirmed its “A1” rating in its report released earlier this week. The city also maintained its “A+” rating with Fitch in its latest report.
The comptroller said the Buffalo’s ratings will work to the taxpayers’ advantage when he goes to the bond market next month to finance the city’s capital projects.
“We sell our bonds in a competitive bidding process,” said Schroeder. “Better ratings mean lower interest costs for taxpayers.”
The “A+” rating from Standard & Poor's is one notch higher than the “A” the city has received the previous three years.
“This upgrade represents the respect we have for city residents and sends a clear signal to the business community, the financial markets, and our many other partners that Buffalo is strong and getting even stronger,” said Mayor Byron W. Brown, noting his administration’s continued commitment to prudent and conservative budgeting.
“We are creating investor confidence in Buffalo with strategic investments and I’m pleased that Standard & Poor’s has recognized our diligent efforts,” Brown added. “The upgrade reinforces the message of positive change in our city that includes $4.3 billion in new economic development activity. Buffalo is ready for the next wave of investment, job creation and growth.”
Too many question marks surround revenues
in proposed budget, warns Schroeder
Comptroller also criticizes "unprecedented" use of reserves to close budget gap
Comptroller Mark J.F. Schroeder said that there is too much uncertainty surrounding more than $15 million in revenue in Mayor Byron Brown's proposed budget, and he is also concerned about the use of nearly $28 million in reserves to close the budget gap.
"Because of the structural budget deficit, an unprecedented amount of reserves will be needed to balance the budget," said Schroeder. "That will weaken the City’s strong cash position, which had been a major factor in improving Buffalo’s bond ratings."
The Comptroller said that the several significant sources of revenue, both in the 2014-2015 recommended budget and the four-year financial plan, appear to be overly optimistic. This overestimation of revenues could result in an even greater amount of reserves being needed to balance the budget, both in the next fiscal year, and subsequent years, Schroeder added
"It appears the recommended budget and four-year plan were prepared envisioning a best-case-scenario unfolding. While many of the assumptions included in the budget are possible, the likelihood of all of them coming true is highly unlikely," Schroeder said. "It would be prudent to adopt more conservative budgeting practices that rely more on historical trends and solid evidence than speculative assumptions."
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Schroeder puts financials in user-friendly format
Comptroller issues Popular Annual Financial Report
In an effort to share Buffalo’s financial information in a user-friendly format, Comptroller Mark J.F. Schroeder has issued the city’s first Popular Annual Financial Report.
“Every year we issue our audited financial statements in a 168-page report known as the Comprehensive Annual Financial Report,” said Schroeder. “Without an accounting or financial background, it can be daunting for the average citizen to interpret the vast amounts of data in that report. So we took the most important information and presented it in a clear, concise way.”
In addition to financial data, the Popular Annual Financial Report contains information on the city’s demographics, economic development, business climate, and higher education system.
“The report gives a total picture, not just for residents, but also outsiders who may be looking to relocate or invest in Buffalo,” said Schroeder. “We sell millions of dollars’ worth of bonds every year. This document will help us show the bond market that it is a great time to invest in Buffalo.”
Year-end financials show highest
fund balance in Buffalo’s history
Comptroller Schroeder says increased reserves
will be needed to cover upcoming expenses
Comptroller Mark J.F. Schroeder issued the Buffalo’s year-end financials today, which show the city’s fund balance at nearly $166 million, the highest in its 181-year history.
“The record-level fund balance is definitely an indicator of Buffalo’s financial strength,” said Schroeder. “However, those reserves will be needed to cover some significant upcoming expenses in the near future.”
Nearly $16 million from the Seneca Buffalo Creek Casino came into the city coffers in the fiscal year that ended June 30, representing more than three years’ worth of Buffalo’s share of slot machine revenue. That revenue, as well as money set aside to cover the new firefighters’ contract and the police union’s arbitration award, helped increase the fund balance by nearly $52 million over the previous year.
Schroeder said that raises included in the new firefighters’ contract, which weren’t budgeted for, and the depletion of additional state aid and other one-time revenues will eat into the fund balance over the next few years.
“Since the budget had already been adopted when the firefighters’ contract was signed and the police arbitration award was given, the pay raises resulting from these developments were not reflected in the current year budget or the four-year plan,” said Schroeder. “The money that was set aside will be needed, both in this current fiscal year and subsequent fiscal years, in order to cover these raises.”
Erie Basin Marina operator owes Buffalo nearly
$350,000 in rent, Schroeder’s audit finds
Contractor underpaid the city in each of the past five years;
more than 20,000 gallons of gas unaccounted for
Brand-On Services owes the City of Buffalo $343,245 in rent after underpaying the city in each of the past five years for its lease of the Erie Basin Marina and Hatch Restaurant, according to an audit by Comptroller Mark J.F. Schroeder.
“We will not rest until the taxpayers of Buffalo get back the money that they are owed,” said Schroeder. “We also recommend that the city terminate the contract with Brand-On Services and look for other firms to operate the marina and restaurant. The Department of Public Works commissioner agrees with this recommendation, and is preparing Requests for Proposals for these services.”
While the audit only covers the past five years, Brand-On Services has been operating the Erie Basin Marina, including the Hatch Restaurant, since 2001. Its contract with the city requires it to pay Buffalo a percentage of fuel sales, revenue from the restaurant and marina.
“More than 20,000 gallons of gas is completely unaccounted for,” said Schroeder. Brand-On’s fuel supplier informed Schroeder that it supplied the company 383,173 gallons of gas over the five-year audit period. Brand-On reported to the city that it only sold 362,484 gallons during that time. “The taxpayers of Buffalo deserve to know what happened to those 20,000 gallons of gas.”
In addition to the missing gas, Brand-On has been underpaying the city on the gas it did report. The contract stipulates that Brand-On pay the city 10 percent of gas sales. Brand-On has been paying the city 10 cents per gallon, roughly a quarter of what it should been paying. Between underpaying on the gas it did report, and not paying anything on the 20,000 gallons that are unaccounted for, Brand-On owes the city $82,923.
The remainder of the $343,245 owed to the city comes from unauthorized deductions in rent and underreporting of sales from the store, restaurant, and slip rentals.
“In the past two years, the city has borrowed nearly $2 million dollars in capital funds to invest in the Erie Basin Marina and Hatch restaurant,” said Schroeder. “I want to ensure that the taxpayers are getting their money’s worth for these investments, because right now, they clearly are getting ripped off.”
Brand-On Services is also the operator of the City Hall cafeteria, the Clinton’s Dish concession stand at Canalside, and First Buffalo River Marina on the Buffalo River, which is owned by the New York Power Authority.
“Needless to say, we are currently looking into this vendor’s operation of the cafeteria. The department of Public Works has also issued a Request for Proposals for a new operator of the cafeteria,” said Schroeder. “We have also alerted the folks at Canalside and the New York Power Authority of our findings.” said Schroeder.
Schroeder selects firm to assist in street light audit
Buffalo-based Troy & Banks is national leader in utility audits
With roughly 32,000 street lights, electric bills totaling more than $16 million per year, and a complex set of laws and regulations governing utilities, Buffalo Comptroller Mark J.F. Schroeder knew that an audit of the city’s electricity costs would require some outside help.
“With the manpower and expertise required for this type of audit, we knew we needed a firm with extensive experience a solid track record for getting refunds for its clients,” said Schroeder.
After a competitive bidding process that resulted in proposals from across the nation, Schroeder found the winning bid in his own backyard. Buffalo-based Troy & Banks, a national leader in utility audits, has performed more than 10,000 utility audits in all 50 states. Its client list includes the United States Postal Service, M&T Bank, the University at Buffalo, Amtrak, the Port Authority of New York and New Jersey, Proctor & Gamble, the New York State Department of Transportation, New York Stock Exchange, General Electric, and Calspan.
But it was the company’s experience in Buffalo that really impressed Schroeder.
“Troy & Banks efforts in the 1990s led to a $1.5 million settlement with the city’s electricity provider,” said Schroeder. “This company knows the city’s electrical infrastructure and the laws governing it.”
Equally impressive as its experience was Troy & Banks price.
“We don’t pay a dime unless we get money back from National Grid,” said Schroeder. “The city only pays for these services if a refund is recouped or a reduction on future billing is achieved.”
According to the agreement, the city will pay 33 percent of refunds up to $100,000 and 25 percent of refunds from $100,001 and above. For any reductions in future costs resulting from Troy & Banks, Inc. analysis, the fee is 25 percent of the amount saved each month for 18 months.
“Troy & Banks usually charges its clients 50 percent of refunds, but our competitive bidding process resulted in the company offering an even better deal for the taxpayers,” said Schroeder.
The comptroller said that he will ensure these types of audits are performed periodically in the future, as there is six-year statute of limitations on overbillings.
“We don’t want to miss out on refunds down the road, so we will make sure this type of audit is done at least every six years,” said Schroeder.
Schroeder credited Common Council members Richard Fontana and Christopher Scanlon for initiating the audit by sponsoring a resolution earlier this year. He also thanked public works commissioner Steve Stepniak for his assistance throughout the process.
“This is a team effort, and we are all committed to making sure the city gets a fair shake on its utility bills,” said Schroeder.
Schroeder uses innovative approach to reduce
interest costs on capital borrowing
Short term notes, reduced borrowing will yield savings for city
“I found that the city borrowed more money for capital projects than it was prepared to spend,” said Schroeder. “This resulted in unnecessary interest costs and millions of dollars in unspent funds that increase our debt burden without providing any benefit to our citizens.”
So Schroeder reduced the city’s maximum borrowing amount by 15 percent – from $22 million to $19 million – and made it clear if a project is not ready to begin, then the debt for that project should not be sold until it is.
“In past years, a limit was set, and the city borrowed to that limit,” said Schroeder. “Not only did I reduce the limit, but I made the starting point zero dollars, and would only increase that amount if I was comfortable that each project was ready to begin.”
So when it came time to go to the market to borrow for the city’s $21.3 million capital plan, Schroeder had determined that he would borrow only $17.8 million this year.
“The other $3.5 million in projects are not going away,” said Schroeder. “We just aren’t going to borrow for them and incur interest until we are certain that they are ready to go. It could be next year, or the year after. It will be when we are confident that the money is ready to be spent.”
Schroeder, however, wasn’t done changing the city’s approach to capital borrowing.
“We decided that doing short term borrowing – known as Bond Anticipation Notes – could save the city even more money on interest costs,” said Schroeder.
Bond Anticipation Notes, known as BANs, are issued in advance of a normal bond sale and are paid back within a year of being issued.
“The BANs make the $17.8 million in capital funds available immediately, at a lower interest rate than a conventional bond sale,” said Schroeder.
The rate Schroeder ended up getting on the BAN sale, 0.337 percent, was even lower than he was expecting.
“We had eight investors bidding, and the lowest bidder, TD Securities, offered an interest rate at roughly a third of a percent,” said Schroeder, pointing out that Moody’s rated the BAN sale at MIG1, the highest possible rating for short-term borrowing. “Needless to say, the taxpayers of Buffalo got the best deal possible.”
Schroeder saves $11 million in latest debt refinancing
In less than a year, Schroeder has saved $62 million by refinancing old debt
Buffalo Comptroller Mark J.F. Schroeder’s refinancing of school reconstruction debt will save more than $11 million in interest costs, the latest of six refinancing deals since last April, totaling more than $62 million in savings.
“Over the past year, we have been able to take advantage of market conditions and the city’s improved bond rating to save taxpayers a great deal of money,” said Schroeder. “The less money we spend on interest costs, the more we can spend on providing services to our citizens and making capital improvements to our city.”
The refinancing of 2009 debt from the Buffalo Schools Reconstruction Project reduced interest rates by more than two percentage points, from 5.61 percent to 3.32 percent. Schroeder was expecting to save $9.8 million on the refinancing, but by the time the deal was finalized, the total savings jumped to more than $11.1 million.
Last week, Schroeder sold a bond that saves taxpayers $807,394 by refinancing debt from 2004, dropping interest rates from 5.46 percent to 2.96 percent. A refinancing of the school reconstruction debt last April resulted in savings of $27.9 million, while three other refinancing deals in 2012 yielded more than $22.2 million in savings.
Schroeder unveils Watchdog Hotline
Citizens encouraged to report waste, fraud, and mismanagement in city government
Buffalo Comptroller Mark J.F. Schroeder unveiled the Watchdog Hotline, a phone number and website dedicated to exposing waste, fraud, and mismanagement in city government.
“Citizens and city employees who see their tax dollars being wasted or stolen can use the Watchdog Hotline to alert our office,” said Schroeder, who heads the department responsible for rooting out wrongdoing in City Hall. “They don’t have to give their name, but they should provide as many details as possible to help our auditors begin an investigation.”
Citizens can call 851-8779 or use the watchdog website to anonymously report wrongdoing.
“Whether it is quarters from a parking meter, or a sophisticated embezzlement scheme, it’s taxpayer money and we need to know about it,” said the comptroller.
“Once we get the information, our auditors will step in to restore the public trust.”
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Phone: (716) 851-5255
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Photos by Angel Art LTP, compliments of the Greater Buffalo Convention and Visitors Bureau. Additional photos by Adrian Roselli, compliments of Algonquin Studios