As my tenure as chairman of the Buffalo Fiscal Stability Authority comes to a close, I would like to take a moment to thank the control board and staff, who have provided me with tremendous support over the last two years, and praise the efforts of everyone who has assisted in achieving the financial success the city and its covered organizations have attained over the last six years. However, lest anyone forget where we were in 2003 and how fragile our current financial situation remains today, I would be careful about “pounding our chests” too often.

We must remain cautious of the tidal wave of continued bad decisions and economic news constantly forthcoming from our state capitol. The reason this is important to remember is that the state has been and continues to be the “granddaddy with the deep pockets” that regularly bails out municipalities and school districts across the state. Fortunately (or depending on how one looks at it, unfortunately) for us, Buffalo has truly been a high-end recipient of the state’s generosity.

We are all pleased with the accumulated reserves that our city and school district have been able to set aside over the last several years, and kudos go out to everyone in City Hall who has worked tirelessly to achieve these successes. However, there are some individuals, and there is no need to mention names, who feel that as a result of the buildup of these reserves that the control board has lived beyond its useful life. Sadly, nothing could be further from the truth.

The fragile state of the finances overseen by the city’s control board can best be understood by just one factor — while general fund reserves available to the city and its “dependent” school district are approximately $113 million and $99 million at June 30, 2008, respectively, our Albany support system today provides state aid of approximately 42 percent and 83 percent of each entity’s total 2008 budget (state aid of $179 million and $551 million, respectively). So our reliance, or more appropriately our dependency, on continued increases in state aid remains the number one factor in enabling these entities to balance their annual budgets and provide increased reserves for future “rainy days.”

Over the past six years, since the inception of the control board, Albany has increased its aid to Buffalo and the Buffalo School District by more than 48 percent and 57 percent, respectively. We all know that this level of continued support is not only unreliable but also unavailable with the current state of New York State finances.

Then again, while Albany is having its own problems, we must remain cognizant of the other “storm clouds” that remain on the horizon and could ultimately disrupt the fragile state of our financial situation. These “clouds” can best be described as pending lawsuits and unresolved collective bargaining agreements. For example, unresolved litigation facing the city and school district (such as the “salary step litigation” and “single insurance carrier litigation”) could cost upward of $9 million and $111 million, respectively, and while both the city and school district have “set-aside reserves” in case this litigation is lost, the impact on the overall reserves that have been built up would be significant, particularly at the school district.

On top of this issue, negotiating new collective bargaining agreements for the three largest unions in the city — police, firefighters and teachers — remains elusive and one can only speculate as to the potential burden these additional costs will place on residents.

Fortunately, the collective-bargaining agreements resolved up until this point have provided some benefits toward resolving long-term issues such as “Other Postemployment Benefits” (OPEB) and management rules, but the problem remains in that they have not moved the needle far enough.

As a point of reference, over the past six years alone the cost of health insurance benefits for city and school district employees and retirees has almost doubled, despite a dramatic reduction in the number of employees. These increased costs have forced the administrations to eliminate from the budget other desirable and necessary services along with many very pressing capital projects, and will do so in an increasing fashion as the cost of health insurance continues to grow.

The long-term OPEB obligations of the city exceed $945 million and the school district’s are more than $1.2 billion. This equates to more than $7,800 for every person living in Buffalo, and there is no need to remind everyone that our city is ranked the third poorest in the country. With our school district remaining in the most fragile state of potential financial duress and the potential for state aid cuts looming on the horizon, the idea of moving the control board from “hard” to “advisory” could become a moot point — unless there is a way to bifurcate the two entities, and this solution appears impractical in light of the “dependent” nature of our school district.

In order to achieve long-term fiscal stability, many parties must be willing to come to the table to alleviate the basic problems that are causing the continued financial straitjacket we find ourselves in. Some of the biggest problems facing counties and municipalities must be resolved in Albany — for example, the Medicaid system, state pension reform and the Taylor Law.

Locally we can and must begin to display a new attitude of cooperation and willingness to work for the long-term success of Western New York and, in particular, the city’s future. We must leave behind the attitude of “what’s in it for me” and become more cooperative and, at times, take a regional approach to many of our issues so that our children, and their children, have not only opportunities to live and work in our community but an interest to stay here.

Paul J. Kolkmeyer, who has served as chairman of the Buffalo Fiscal Stability Authority for two years, is stepping down so that he can devote more time to personal projects.