City of Buffalo Popular Annual Financial Report Buffalo, New York • For Fiscal Year Ended June 30, 2018 About This Report
Table of City of Buffalo Contents Department of Audit & Control ___
Business & Economic Development As the chief fiscal office of the City of Buffalo, we are pleased to present to youour Pages 2 - 3 Popular Annual Financial Report (PAFR) for the fiscal year ended June 30, 2018. ___ Annually, the City issues audited financial statements, known as the Comprehensive Annual Education & Financial Report (CAFR), which is prepared in accordance with Generally Accepted Culture Accounting Principles (GAAP). The CAFR contains detailed financial and disclosure information for the City that, although extremely informative, can prove challenging to Page 4 interpret for those who do not regularly review financial statements. ___ The PAFR, on the other hand, presents the financial information from the CAFR in a more Demographics concise and user-friendly format. Please note that this PAFR is unaudited and presented Page 5 on a non-GAAP basis. Only general government financial data is provided in this report. Information about component units and enterprise funds is available in the CAFR. ___ The City’s last five PAFRs received Awards for Outstanding Achievement in Popular City Annual Financial Reporting from the Government Government Finance Officers Association of the United States and Canada (GFOA). Page 6 The GFOA also awarded a Certificate of ___ Achievement for Excellence in Financial Reporting to the City for last year’s City CAFR, the twelfth consecutive year Finances Buffalo has earned that honor. Electronic copies of both the CAFR and PAFR can Pages 7 - 9 be found at our website: www.buffalocomptroller.com
In addition to information about the City’s finances, this PAFR contains information about Buffalo’s governmental structure, economic progress, business climate, education system, cultural attractions, and demographics. Thank you for your interest in our City, and we hope you enjoy this report!
1 Business & Economic Development
Largest Public Companies M&T Bank Moog National Fuel Gas Gibraltar Industries Astronics Columbus McKinnon Sovran Self Storage Computer Task Group Synacor Financial Institutions, Inc. Largest Private Companies Rich Products Corporation Delaware North Basil Family Dealerships Employer Services Capitalizing on its Lake Canalside’s popularity John Danforth Co. Erie shoreline and historic has led to more than a Stampede Presentation Products significance as the western half billion dollars in Jack Hunt Coin Broker terminus of the Erie Canal, private development in Curbell Buffalo has recently made the area surrounding the Sevenson Environmental Services great strides in developing attraction. This includes Rosina Food Poducts its waterfront. HarborCenter (above, Largest Employers The centerpiece of background), where the New York State this effort is Canalside National Hockey League’s United States of America (above, foreground), a Buffalo Sabres have built Kaleida Health year-round destination a $250 million, 20-story Buffalo City School District in downtown Buffalo, facility that recently Catholic Health that attracts more than hosted the 2016 NHL M&T Bank 1.5 million visitors a year. Draft and the 2017 World University at Buffalo Explore & More Children’s Junior Championships. Tops Markets Museum, currently under Waterfront development Erie County construction, will add to has spread past downtown, Seneca Gaming the many attractions at including the Outer Harbor Canalside. and the Buffalo River. Headquartered in Buffalo M&T Bank Moog Ralph C. Wilson, Jr. foundation Delaware North announces $100 million in funding Rich Products for waterfront park and trails Labatt USA New Era Cap In 2018, the Ralph C. Wilson, Jr. Foundation announced Lactalis American Group $100 million in funding for improvements to LaSalle Park, located on Buffalo’s waterfront, as well as a shoreline Source: Buffalo Business First, trail system that connects Buffalo to Niagara Falls, NY. 2018 Book of Lists 2 Business & Economic Development
$7.5 Billion in construction projects either completed or underway in the City of Buffalo since 2014 $18.1 Billion in construction projects either completed or underway in the Buffalo region since 2014
Source: Buffalo Business First Two major projects were recently completed on the Buffalo Niagara Medical Campus, bringing the total number of employees at the 120-acre site to more than 17,000. Both Kaleida Health’s $250 million Oishei Children’s Hospital (right) and the University at Buffalo’s $375 million Jacobs School of Medicine and Biomedical Sciences (above) opened for business on the campus, which is a consortium of the region’s top health care, education, and research institutions. The campus was already home to Roswell Park Cancer Institute, Buffalo General Hospital, and the Innovation Center, a business incubator. More than 130 start-up companies have been founded at the campus, capitalizing on synergy created by so many different entities on one site. 3 Education & Culture
Colleges & Universities The Buffalo area is home to 21 colleges & universities, for a total of 110,000 students and 32,000 employees in higher education, creating a $3.2 billion economic impact.
University at Buffalo Buffalo State College Fredonia State College Canisius College Niagara University Alfred State D’Youville College Daemen College The Buffalo area is home to world-renowned architecture, Alfred University museums, and other cultural attractions. Medaille College St. Bonaventure University Cultural Attractions: Notable Architecture: Houghton College Albright-Knox Art Gallery Darwin D. Martin House Hilbert College Buffalo History Museum (above) H.H. Richardson Towers Empire State College Burchfield Penney Arts Center Guaranty Building Villa Maria College Buffalo Philharmonic Orchestra Our Lady of Victory Basilica Erie Community College Shea’s Performing Arts Center Electric Tower Ellicott Square Building Niagara Community College Chautauqua Institute Genesee Community College Central Terminal Buffalo Zoo Jamestown Community College Graycliff Buffalo & Erie County Bryant & Stratton College Botanical Gardens (below) Kleinhan’s Music Hall Trocaire College Buffalo Museum of Science Buffalo City Hall
4 Demographics
City Population (2010 census) 261,310 Occupations (2013-2017) City Population (2017 estimate) 258,612 Management, Business, Science 32.7% up 1,710 & Arts Erie County Population 923,995 Service 24.1% (2017 estimate) Sales and Office 25.3% Metropolitan area population 1,136,856 Natural Resources, 5.2% (2017 estimate) Construction, Maintenance Land area in square miles 40.38 Production, Transportation & 12.7% Persons per square mile (2010) 6,470 Material Moving Male (2017) 47.7% Class of Worker (2013-2017) Female (2017) 52.3% Private worker 80.7% Persons 65 or older (2017) 12.2% Government worker 15.7% Per Capita money income $22,294 Self-employed 3.6% (2013-2017) up $728 By Household (2013-2017) Persons below poverty level 30.9% Households 110,636 (2013-2017) down 0.3% Median Value of Owner $77,800 Speak language other than 17.6% Occupied Housing up $5,200 English (2013-2017) Median household income $34,268 Foreign-born (2013-2017) 9.5% up $1,149 Homeownership rate 41% Persons Per Household 2.26 (2013-2017) Unemployment rate Mean travel time to work 21 minutes (as of 6/18)* (2013-2017) Buffalo (metro)* 4.6% Education attainment down 0.5% (over the age of 25) New York State* 4.5% High school graduate or higher 83.9% United States** 4.0% (2013-2017) Source: U.S. Census Bureau Bachelors degree or higher 25.8% *Source: N.Y.S. Dept. of Labor (2013-2017) **Source: U.S. Dept. of Labor 5 City Government
Leadership MAYOR Byron W. Brown 201 City Hall Buffalo, NY 14202 (716) 851- 4851 COMPTROLLER (Vacant) 1225 City Hall Buffalo, NY 14202 (716) 851- 5255 COMMON COUNCIL Darius G. Pridgen Council President Ellicott District (716) 851-4980 Departments David A. Rivera ADMINISTRATION, FINANCE, LAW Majority Leader POLICY, & URBAN AFFAIRS Prosecutes and defends all actions Niagara District Includes Divisions of Budget, and proceedings brought by or (716) 851-5125 Treasury, Collections, and Purchase. against the City. Also responsible for drafting and reviewing all Christopher P. Scanlon AUDIT & CONTROL contracts involving the City. President Pro Tempore Led by the Comptroller, includes PARKING South District Divisions of Accounting, Audit, and Responsible for parking meters (716) 851-5169 Investment & Debt Management. and city owned parking ramps. Joel P. Feroleto ASSESSMENT & TAXATION Responsible for the preparation and PERMITS AND INSPECTIONS Delaware District mailing of City property tax Conducted 65,500 inspections (716) 851-4553 and sewer rent bills. and 113 demolitions in 2018.* Richard A. Fontana COMMON COUNCIL POLICE DEPARTMENT Lovejoy District The legislative body of the City, which Made 12,906 arrests and enforced (716) 851-5151 also oversees the City Clerk’s office. 41,172 traffic violations in 2018.* David A. Franczyk COMMUNITY SERVICES MANAGEMENT Fillmore District Includes Divisions of Youth INFORMATION SYSTEMS (716) 851-4138 Services and Senior Services. The City’s Information Technology Joseph Golombek Jr. EXECUTIVE DEPARTMENT department provides computers North District Includes Office of Strategic and internet service. (716) 851-5116 Planning and Divisions of PUBLIC WORKS, Ulysees O. Wingo Citizen Services and Real Estate. PARKS, & STREETS Responsible for maintenance and Masten District FIRE DEPARTMENT capital improvement to infrastructure (716) 851-5145 Responded to 34,752 calls in 2018.* and buildings, street lighting, sanitation, Rasheed Wyatt HUMAN RESOURCES snow removal, and parks maintenance. University District Responsible for all personnel functions, (716) 851-5165 including benefits and training programs, *Source: 2018 Comprehensive for the City’s 2,788* employees. Annual Financial Report 6 City Finances
Fund Balance General Fund: $92.0 million The City’s main operating fund
Includes: Emergency Stabilization Fund $38.7 million 30 days’ worth of expenditures; only for unanticipated non-recurring Positve Trends expenses. Also • An arbitration panel has ruled in favor of New York known as the Rainy State in a dispute with the Seneca Nation of Indians Day Fund over the sharing of revenue from various casinos in New Non-spendable York State, including the Seneca Buffalo Creek Casino $31.0 million located in the City of Buffalo. The annual share of casino Land Held for revenue Buffalo had been receiving from New York State, Resale, Solid Waste before the Seneca Nation stopped making payments in fiscal Deficit, Prepaids year 2017, was approximately $7 million. As a result of the decision, the City should resume receiving revenue sharing payments (which Restricted could increase due to the installation of additional slot machines) as well as back $8.8 million payments due to the City. Capital Outlay, Emergency • According to the United States Census Bureau, the City of Buffalo’s 2017 Medical Service population estimate increased by 1,710 to 258,612, the first population increase in more than 50 years. Assigned $13.4 million Encumbrances, Negative Trends Judgments and • Buffalo needed more than $23 million from its General Claims Fund Balance in fiscal year 2018 in order to balance Unassigned operations. This is on the heels of a $35 million Fund $0 Balance draw in fiscal year 2017. Without any funds Free and clear for available in Unassigned Fund Balance, the City will need general purpose use to address the structural imbalances in its budget in order to avoid depleting its Emergency Stabilization Fund, which should not be used to balance operations. 7 City Finances Revenues & Expenditures
General Fund General Fund revenues increased 2018 2017 2016 by $4.6 million, (in millions) while General Fund Beginning General Fund Balance $114.9 $149.5 $151.2 expenditures were largely unchanged Revenues 453.4 448.8 452.5 from year to year. Expenditures (464.9) (465.0) (435.8) This consistency in Transfers to Debt Service and Refuse Funds (29.3) (31.5) (28.4) expenses was largely due to constraints put Other Transfers from Water and Parking Funds 17.9 13.1 10.0 on spending. Even Net Change in Fund Balance (22.9) (34.6) (1.7) with such constraints, revenues have not Ending General Fund Balance $92.0 $114.9 $149.5 been keeping pace with expenditures. The City must address this discrepancy in order to provide a structurally balanced budget and to avoid completely depleting its reserves. Revenues Expenditures Revenue Source Expenditure Type 2018 2017 2016 2018 2017 2016 (in millions) (in millions) Intergovernmental $263.3 $263.4 $266.3 Personal Services $199.0 $200.0 $187.2 Property Tax 137.5 134.2 135.8 Fringe Benefits 135.2 130.2 125.1 Charges 30.2 28.9 26.7 Supplies 9.4 8.7 8.6 Gross Utility Tax 7.8 8.3 7.6 Utilities 15.7 17.1 13.4 Other Taxes 7.1 7.3 6.8 Services 24.9 24.6 23.1 Miscellaneous 7.5 6.7 9.3 Miscellaneous 80.7 84.4 78.4 Total $453.4 $448.8 $452.5 Total $464.9 $465.0 $435.8 Intergovernmental Gross Utility Tax Personal Services Supplies New York State Aid and Paid by providers of Salary and overtime for Includes gasoline and Sales Tax revenue. utilities on a percentage of City employees. automotive supplies. their gross receipts. Property Tax Fringe Benefits Utilities Imposed on taxable Other Taxes Includes City employees’ Predominately electricity for property in the City. The Includes Franchise Tax, and retirees’ health and street lights and buildings; Homestead and Non- Mortgage Tax, and Foreign dental insurance, FICA, also includes natural gas. Medicare, and Workers’ Homestead rates for 2018 Fire Insurance Tax. Compensation costs. Services were $17.88 and $26.76 per Also includes increased Professional services $1,000 of assessed value, Miscellaneous contributions to the state provided by contractors. respectively. Includes reimbursement retirement system, when for items sold, insurance coupled with an increase Miscellaneous Charges reimbursement, interest in health care costs, largely Includes an annual payment License and permit fees, income, and other rental accounting for the growth to the school district, nearly fines, and other service revenue. in this expenditure. 90 percent of this expense. charges. 8 City Finances Assets & Liabilities To understand the City’s flow of financial resources, we looked at where the money comes from and goes. When looking at the City’s financial condition we focus on the net position: assets minus liabilities. By looking at this in an accrual basis of accounting, we consider all assets and liabilities at a certain date. This is different than the previous general fund analysis that was presented in a modified accrual basis of accounting. Over time, increases or decreases in net position serve as an indication of whether the financial condition is improving or deteriorating. Our Primary Government consists of governmental activities as well as the activities of our Refuse, Parking and Water Funds (Business-Type activities). Statement of Net Position (Primary Government) Our Assets and Outflows (What We Have) (in millions) Unrestricted current assets consisting mainly of cash and amounts owed to the City $ 355.4 Restricted cash and cash equivalents 132.5 Real estate acquired for resale 9.6 Deferred outflows of resources 115.6 Net capital assets consisting primarily of buildings, equipment and vehicles 702.0 Total assets and deferred outflows of the City $1,315.1 Our Liabilities and Inflows (What We Owe) Current liabilities consisting of all the amounts the City owes and expects to pay in 2017, except City bonds $ 264.5 Other amounts the City owes and expects to pay after 2017, except for bonds, other post-employment benefits and net pension liability 44.9 Other post-employment benefits and net pension liability 1,299.6 Amount of bonds payable 370.2 Deferred inflows of Resources 286.6 Total liabilities and deferred inflows of the City $2,265.8 Net Position ($950.7) Due to the implementation of Governmental Historical Net Position Accounting Standards Board’s Statement No. (in millions) 75, Accounting and Financial Reporting for ($500) Postemployment Benefit Plans Other Than ($550) ($600) Pensions, the City recorded an entry that reduced ($573) ($589) ($606) Net Position by $850.4 million as of June 30, 2017. ($650) This entry represents expected payments in the ($700) ($685) future to active and retired employees due to ($750) ($722) ($729) their past service. In order to fairly present the ($800) ($790) ($793) change in net position over the past 10 years, ($850) ($835) all years have been restated by this amount to ($900) capture this adjustment. Net position continues ($950) ($923) to trend downward over the past decade largely ($951) ($1,000) a result of annual revenue streams being less than 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 annual expenses. 9 Presented by:
Comptroller Mark J.F. Schroeder City of Buffalo Department of Audit & Control 1225 City Hall Buffalo, NY 14202 (716) 851-5255 www.city-buffalo.com/comptroller
Mission Statement: “The Department of Audit & Control will protect, report, and strengthen the City’s finances to help ensure an efficient, effective, and transparent government that will better serve the citizens and taxpayers of Buffalo.”
Vision Statement: “To advance as a world class financial organization by unleashing our full potential.”
The Mission and Vision Statements were developed by the employees of the Department of Audit & Control.