Relates to Buffalo fiscal stability authority financial crisis determination

Title of bill

An act to amend the public authorities law, in relation to the Buffalo Fiscal Stability Authority (BFSA) financial crisis determinations

Purpose

Clarifies the determination of an advisory period by the Buffalo Fiscal Stability Authority (BFSA).

Summary of provisions

This bill clarifies that the wage freeze is not authority assistance for determining the end of a control period and the beginning of an advisory period.

Existing law

Section 1 of the bill amends Subdivision one of Section 3851 of the Public Authorities Law to clarify that the definition of BFSA assistance for determination of the transition to an advisory period is governed by Subdivision three of Section 3851. It amends Subdivision three of section 3851 of the Public Authorities Law and stipulates that anything not specified in the definition of BFSA assistance shall not be construed as BFSA assistance.

Justification

The fiscal crisis for the City of Buffalo has abated as demonstrated by four successive end of year City surpluses, two successive increases in its credit ratings, and a lifting of the Buffalo Fiscal Stability Authority (BFSA) imposed wage freeze. However, there presently are numerous lawsuits and conflicting legal opinions regarding the lifting of the control period and the transition to an advisory period. Statutory clarification is required to avoid continued lawsuits and disagreements over the terms of the BFSA Act (Chapter 122 of the Laws of 2003), the legislation that established the BFSA and imposed a control period on the City.

The BFSA Act calls for three consecutive budgets that were balanced without authority assistance (through debt service savings and deficit financing) and for the City to have sold securities and demonstrated market access before the control period ends and an advisory period begins. The BFSA presently considers the imposition of a wage freeze as authority assistance to the City, without which the City budget would not have been balanced for the past two years. In addition, while the City has demonstrated the ability to access the bond market, the BFSA board has determined to date that it is less expensive for the BFSA to borrow on behalf of the City and has continued to assume this responsibility.

The BFSA was modeled on other successful control boards, like those created for New York City, Troy and Nassau County. As in those cases, the Legislature's intent was strictly to have the control board work with the local government to a point where it could achieve fiscal stability on its own, a mission that all prior control boards followed.

This bill would provide necessary amendments to the BFSA Act to clarify the terms by which the BFSA determines when a control period ends and an advisory period begins. In addition, it would ensure that the City's three consecutive fiscal years with surpluses greater than the BFSA assistance received are acknowledged.

Legislative history

None.

Fiscal implications

None. EFFECTIVE DATE : Immediately.