By Staff Reporter
This is an opinion column. It reflects the views of the writer.
Nobody in Buffalo should have to argue for fixing a leaking firehouse roof. Water-damaged walls at the King Urban Life Center, worn-out fire station systems and failing roofs on community centers are exactly the kind of work a city should never put off.
So the question in front of the Common Council on Oct. 27 is not whether those repairs happen. It is whether the Council approves $20.06 million in new debt, through a state-created board the city hasn’t used for borrowing since 2007, before anyone has put the full cost on paper.
The Council should approve the repairs. It should not approve them blind.
What the city is asking for
Mayor Sean Ryan’s administration wants the Council to pass a “Declaration of Need,” Council Item No. 26-000830. That step would let the Buffalo Fiscal Stability Authority, the control board, sell up to $20.06 million in bonds on the city’s behalf for emergency work at more than 15 city buildings, including fire stations, community centers and Sahlen Field, WGRZ reported. The Council’s Finance Committee spent more than 90 minutes on it Tuesday, WBEN reported, and sent it to the full Council.
The administration’s case is real. Deputy Mayor Benjamin Swanekamp says the control board can borrow more cheaply than the city after this summer’s downgrades, and that the work can’t wait for the capital budget the Council won’t approve until December.
“This is a completely legal process as set out by state law,” Mr. Swanekamp told WGRZ, calling the control board “a great tool” that “saves taxpayer dollars and helps keep projects moving.”
Fred Floss, an officer of the control board, put the urgency plainly. “We need to do this relatively quickly so that we can make sure that some of these buildings don’t really hurt somebody and that the costs in the future don’t go up dramatically because we didn’t fix things,” he said, according to WGRZ. “These aren’t sexy projects but they need to get done,” he told WBEN. “Waiting is going to cost a lot more money.”
That is the strongest argument for a quick yes, and it deserves to be taken seriously. Deferred maintenance is its own kind of debt. The Chronicle reported Oct. 17 that the city declared an emergency at the Broadway Barns after concrete panels fell.
Why “trust us” isn’t enough
But “cheaper” is a claim, and right now it is only a claim. In an Oct. 14 letter to the mayor, City Comptroller Barbara Miller Williams asked for the numbers that would prove it: the projected interest savings, the repayment period, the annual debt service, the cost of issuance and a side-by-side comparison with the city borrowing on its own, as The Buffalo Criterion and the Chronicle reported.
“Any proposed financing must be supported by a documented fiscal need, provide appropriate financial oversight, and protect the City’s long-term financial flexibility,” Ms. Miller Williams said.
Those are not unreasonable asks. Mr. Swanekamp told WBEN that more information would go to the comptroller. It should go to the public, too, before the vote.
The city’s own record is the reason to insist. In a May review of the mayor’s budget, the state comptroller’s office found a structural deficit of about $103 million and warned that city officials “historically have adopted budgets that relied on nonrecurring revenues to fund operations and underestimated expenditures.” S&P and Fitch downgraded the city this summer, and Moody’s moved its outlook to negative. A city in that position can’t afford to take any borrowing plan on faith.
The comptroller is not a neutral party here. She has lost in court, unanimously at the Appellate Division, over whether she can refuse to sell bonds the Council has approved, and she is still appealing. The control board route also goes around her office. Council members are right to weigh her letter with that history in mind. But the questions in it stand on their own, and nobody has answered them in public.
The money already sitting there
There is a harder question than interest rates. According to the comptroller’s annual capital report, as of June 30 the city had $42.2 million in bond money available to spend on open projects, and several of those projects “have remained inactive for more than five years.” Some of it is likely locked to specific uses by the original bond resolutions. Some may not be.
Before Buffalo borrows $20 million more, the Council should know how much of the $42.2 million it already borrowed could legally go to roofs and fire stations instead. It should also know whether the new $20.06 million counts against the $36 million the comptroller says the city can prudently borrow this year, or comes on top of it.
And the city can still borrow on its own. In September, the comptroller’s office sold a $21.5 million school note at 4.09% after drawing 13 bids, and $13.13 million in other notes at 3.22%. Any savings through the control board should be measured against rates like those.
What the Council should do on Oct. 27
The Council doesn’t have to choose between safe buildings and honest books. Before or as part of its vote, it should require four things:
- A project-by-project list, with cost estimates and a sentence on why each job can’t wait for December.
- A written cost comparison of control-board bonds and city-issued bonds, covering interest, term, issuance costs and total debt service.
- A plain answer on whether the $20.06 million counts against this year’s $36 million debt capacity, and a review of which idle bond money could be redirected.
- Language like the 2021 Declaration of Need, Council Item No. 21-359, requiring the comptroller to be consulted on the timing, terms and amount of the bonds.
Finance Committee Chair Mitch Nowakowski said after Tuesday’s meeting that some concerns were addressed, including whether the borrowing would extend the control board’s life past 2037. “We were told it does not by state legislation,” he told WGRZ. That is one answer. The Council should get the rest in writing.
The control board itself should also speak up. It would be issuing the debt, and the mayor asking for the money sits on its board. Residents deserve to hear from the authority, in public, what these bonds will cost.
Fix the roofs. Fix the firehouses. But the Council, led by Mr. Nowakowski’s committee, should insist that the administration show its math before Oct. 27. Residents should call their Council members this week and tell them so. If the deal is as good as the administration says, the numbers will prove it.
Featured photo: Engine 34 and Ladder 7, a Buffalo firehouse. Photo by Andre Carrotflower via Wikimedia Commons, CC BY-SA 4.0. Cropped.
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