By Staff Reporter
BUFFALO — For the first time since 2007, the City of Buffalo wants the state-created board that watches over its finances to borrow money on its behalf. Mayor Sean Ryan’s administration has asked the Common Council to approve up to $20.06 million in bonds issued through the Buffalo Fiscal Stability Authority, the control board, to pay for emergency repairs to community centers and fire stations and to design a handful of “shovel ready” projects.
The city’s elected fiscal watchdog is not convinced. In an Oct. 14 letter to the mayor, City Comptroller Barbara Miller Williams asked for the numbers behind the plan: the interest savings, the repayment schedule, the annual debt service, the total cost and a side-by-side comparison with the city simply borrowing on its own.
The request lands in the middle of the most strained stretch for Buffalo’s finances in years. State auditors have pegged the city’s structural budget gap at about $103 million. All three major rating agencies took negative action on the city this summer. And the comptroller and the administration have already fought in court over how much Buffalo should borrow, a fight the comptroller has lost so far.
The Buffalo Chronicle reviewed the comptroller’s letter and capital report, the state comptroller’s budget review, the court ruling, the control board’s own records and public statements by city officials. Here is what the city is asking for, what it hasn’t yet shown, and what the Council could demand before it votes.
What the city wants
The request is filed as Common Council Item No. 26-000830, a “Declaration of Need.” That is the step that allows the control board to sell bonds for the city. The authority has not done so since 2007, according to the comptroller’s office and WKBW.
Deputy Mayor Benjamin Swanekamp told WKBW the money would address a series of “critical, emergent issues,” including community-center roofs, fire-station infrastructure and the emergency architecture and engineering work that goes with them. At the King Urban Life Center on the East Side, which is waiting on a city-funded new roof, the borrowing would pay to fix water damage that has left walls peeling and crumbling, the station reported.
“The idea is to stabilize where there could [be] a life-safety issue or more rapid deterioration,” Mr. Swanekamp said, as quoted by WKBW. “We’re trying to work swiftly to get those projects done.”
The city normally borrows for repairs through its annual capital budget, which is due Nov. 1 and isn’t approved until December. The administration says some of these jobs can’t wait that long. The Chronicle reported Oct. 17 that the city had declared an emergency at the Broadway Barns after concrete panels fell, a sign of how far some city buildings have slipped.
Mr. Swanekamp also argued the city has borrowed too little for too long. “Buffalo has been under bonding and under borrowing for capital projects for a very long time,” he said. “A municipality of our size should frankly be bonding $75 to $100 million a year. We’re not asking for that much here, but it’s important that we invest in our infrastructure. If you don’t invest things get more expensive over time as they deteriorate.”
The administration’s other argument is price. After this summer’s rating actions, WKBW reported, borrowing through the control board is expected to carry a lower interest rate than the city could get on its own.
What the comptroller wants to see
Ms. Miller Williams’s office, formally the Department of Audit and Control, normally sells the city’s bonds. The control-board route goes around it. Her Oct. 14 announcement lists what she asked the mayor to provide:
- Why the arrangement is being pursued now, and why direct city borrowing wouldn’t work.
- The projected interest-rate savings, repayment period, annual debt service and total borrowing cost, compared with the city’s own bonds.
- The cost of issuance, and whether the control board’s roughly $1 million annual budget would grow to handle the work.
- Whether the $20.06 million counts against the city’s $36 million debt capacity for 2026-27 or comes on top of it.
- Whether any debt running longer than 11 years could stretch the authority’s life past June 30, 2037.
She also flagged two process problems. A 2021 Declaration of Need, Council Item No. 21-359, expressly called for consulting the city comptroller on the timing, terms and amount of control-board bonds. That consultation “has yet to occur” on this request, her office said, and the new proposal doesn’t require it. And the Citizens Planning Council’s recommended capital budget and four-year capital program, due Oct. 7 under Section 20-23 of the City Charter, had not been filed as of Oct. 9.
“The City must have a clear understanding of why this financing is necessary, considering the Comptroller’s Office has been successfully borrowing on the City’s behalf for almost two decades,” Ms. Miller Williams said. “In addition, I am requesting a detailed analysis of what this capital borrowing will cost, and whether it provides a measurable financial benefit compared with borrowing directly through the existing City Charter established channels.”
“Any proposed financing must be supported by a documented fiscal need, provide appropriate financial oversight, and protect the City’s long-term financial flexibility,” she added.
On the life of the board, Mr. Swanekamp told WKBW that state law already settles it. “As of right now there are 10 years left on BFSA’s existence for 2037, so that means we can issue bonds with a 10 year expiration note on them, which is pretty standard bond length,” he said.
The money already on the books
The comptroller’s own capital report, her annual Estimate and Report, raises a harder question than interest rates: why the city needs new debt when it hasn’t spent all of its old debt.
As of June 30, open capital projects totaled $387.3 million, the report says. That includes $42.2 million in bond money that is available to spend and $45.9 million in unspent bond proceeds overall. The report says several of those projects “have remained inactive for more than five years.” It also counts $82.2 million in projects the Council has authorized by bond resolution but the city hasn’t yet borrowed for.
Unspent bond money isn’t free. The report notes that carrying it “results in unnecessary interest costs.” Some of it may be tied to projects that can’t legally be moved to roofs or fire stations, depending on how the original bond resolutions were written. But the Council could ask which of the $42.2 million could be redirected, and why emergency repairs weren’t funded from it.
“This year’s report demonstrates that while the City’s debt capacity has increased, that should not be viewed as an invitation to borrow more, it is a reminder to borrow wisely,” Ms. Miller Williams said when she released it. “The increase in the debt cap reflects the City’s current financial capacity to support additional debt service, but with all three major bond rating agencies expressing concerns about the City’s financial condition, it is more important than ever that we reserve borrowing for true capital improvements, strengthen project planning, and avoid unnecessary debt.”
The city can still borrow on its own. In September, the comptroller’s office drew 13 bids on a $21.5 million school note, won at 4.09%, and sold $13.13 million in other notes at 3.22%, including a $7.48 million city note for road work on Jefferson Avenue, Busti Avenue and Main Street, according to her office. Any savings from the control-board route would need to be measured against rates like those.
The court fight behind the letter
The letter is the latest round in a long dispute over who controls Buffalo’s borrowing. After the Council approved two capital budgets that exceeded the comptroller’s recommended $28 million debt cap, then-Acting Mayor Christopher Scanlon and Council Member Mitch Nowakowski went to court to make her sell the bonds. The comptroller’s office says the ruling went in favor of Mr. Ryan, Mr. Scanlon and Mr. Nowakowski.
They won. In April, the Appellate Division, Fourth Department, unanimously affirmed that issuing bonds the Council has authorized is a ministerial duty, not a discretionary one, and that her debt cap is advisory, as the New York Daily Record summarized the ruling in Scanlon v. Miller-Williams.
“The more the City of Buffalo borrows, the more the citizens and taxpayers will have to pay in property taxes,” Ms. Miller Williams said after the decision. She has since moved to appeal again, warning that the case will decide “whether the office will continue to serve as an independent fiscal watchdog or be relegated to Spectator Status, borrowing whatever amount the Mayor recommends and the Common Council Members approve,” according to a statement from her office.
Seen in that light, the control-board request does two things. It may save money. It also routes $20 million around an official the administration has already beaten in court once.
The budget hole
None of this is happening in a healthy budget. In a May 8 review of the mayor’s proposed 2026-27 budget, the Office of the State Comptroller found a projected general-fund structural deficit of about $103 million. City officials, the review said, “historically have adopted budgets that relied on nonrecurring revenues to fund operations and underestimated expenditures,” and used up their fund balance doing it.
The proposed budget covered $46.1 million of the gap with a property-tax increase and the remaining $56.9 million with money the state auditors said “may not materialize.” That included $15.2 million from selling city parking ramps to the Buffalo Municipal Parking Authority, $15 million in temporary state aid, $16.2 million in past-due taxes and fines, and $10.5 million in casino revenue “for which there is no current Compact agreement.” The review also found the city had used $331 million in federal stimulus money since 2020-21 without replacing it, and that five of its eight union contracts had expired.
That $10.5 million in casino money is now in more doubt. On Oct. 2, Seneca Nation President J. Conrad Seneca told Buffalo Toronto Public Media, “We negotiated an agreement in principle that, right now, contains no revenue sharing provision with New York State.” A spokesperson for Gov. Kathy Hochul said, “There is currently no agreement and conversations are ongoing with stakeholders.” Revenue sharing under the old compact has been placed in escrow, BTPM reported.
The ratings followed. S&P Global lowered the city’s general-obligation rating to A from A+ in July, according to the comptroller’s office. Moody’s kept the city at A1 but moved its outlook to negative, BTPM reported. Fitch downgraded the city to A with a negative outlook on July 27. A lower rating raises what the city pays to borrow, and it’s the main reason the administration says the control board can borrow more cheaply.
The foundation money that hasn’t arrived
Council members are also asking the administration about an earlier promise. Last December, introducing four new deputy mayors paid $200,000 each, then-Mayor-elect Ryan said philanthropy would help the city. “We’re working on that now, and we hope soon to be announcing a partnership between major philanthropic organizations and the City of Buffalo in an effort to align the values,” he said, according to WGRZ. By June, he told the station, “We have some soft pledges. We’re still trying to break a million.”
The fund still isn’t final, WGRZ reported Oct. 14. Mr. Nowakowski, who chairs the Council’s Finance Committee, told WGRZ last summer, “We were told that those salaries would have been subsidized by foundations.” At a recent committee meeting, Council Member Rasheed N.C. Wyatt told a deputy mayor, “we were told that this money was going toward paying salaries. However, we were told that they couldn’t specify what it’s going toward.”
Council Member Zeneta Everhart said she “would 100 percent hope that the administration is not looking to again try to put this money into salaries. That money is crucial to the survival of programs that operate on our streets.” Deputy Mayor Maria Whyte, formerly chief of staff at the Community Foundation for Greater Buffalo, maintains the foundation money was never meant for deputy mayors’ salaries and says the city is still working on an agreement, WGRZ reported.
The foundation fund and the bonds are separate matters. But they raise the same question for the Council: whether the administration’s financial plans come with documents attached.
Who decides, and who’s watching
The Council approves the Declaration of Need. The control board would then sell the bonds. Its board has nine seats, and its chair and vice chair are listed as vacant on the authority’s website. Two seats are held ex officio by Mr. Ryan and Erie County Executive Mark Poloncarz, so the mayor asking for the borrowing also sits on the board that would issue it. The authority’s executive director is Jeanette M. Robe, a former deputy comptroller of the city.
In May, the control board voiced support for the mayor’s budget proposal, Spectrum News reported, and it issued formal findings on the plan. The Chronicle found no public statement from the authority on the new borrowing request.
What could fix it
The Council doesn’t have to choose between fixing leaking roofs and protecting the city’s credit. It could ask for several things before it votes:
- A project list with costs. Every repair, its estimate and why it can’t wait for the December capital budget.
- A cost comparison in writing. The interest rate, term, issuance cost and lifetime debt service through the control board, next to the same figures for a city-issued bond. That is what the comptroller has asked for.
- A count against the cap. Whether the $20.06 million comes out of the $36 million the comptroller says the city can prudently borrow for 2026-27.
- A look at idle bond money. Which of the $42.2 million in available bond funds could legally be moved to emergency repairs instead.
- The missing capital plan. The Citizens Planning Council’s recommended capital budget, which was due Oct. 7.
- Consultation language. A clause like the one in the 2021 Declaration of Need requiring the comptroller to be consulted on timing, terms and amount.
None of those steps would stop a roof repair. All of them would show taxpayers what they’re signing up for. The Council’s Finance Committee meets Tuesday at 10 a.m. The full Council meets Oct. 27.
The Buffalo Chronicle has asked the comptroller’s office for a copy of the Oct. 14 letter and the project list, and has asked the control board whether it has reviewed the request and what issuing the bonds would cost. Any responses will be added to this story.
Featured photo: Buffalo City Hall and the McKinley Monument in Niagara Square. Photo by Michael Barera via Wikimedia Commons, CC BY-SA 4.0. Cropped.
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