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A MESSAGE FROM MAYOR CHRISTOPHER P. SCANLON Upon becoming mayor, one of my first orders of business was to conduct a thorough analysis of the city’s financial conditions. During that review, my administration determined there was a $17 million budget shortfall for 2024-2025. My administration also discovered a structural deficit that exceeded $70 million for fiscal year 2025-2026, an amount much greater than previous estimates. My administration immediately established vacancy control measures and directed reductions to non-essential spending. As a result of these and other cost-saving measures, we are now projecting a budget surplus of $1 million for the 2024-2025 fiscal year. To curtail shortfalls from occurring in future budget years, we made changes to past budgeting methods and revenue projection practices. For the upcoming fiscal year, department heads were directed to do more with less and decrease their respective budgets. Through the examination of spending practices, my administration was able cut departmental spending by $10 million and realize an additional $16.5 million in vacancy savings. In total, our cuts and cost-saving measures closed the budget gap by almost $30 million, avoiding layoffs and preserving city services. Many expenses in the city’s operating budget are determined by external factors and beyond our control. These costs increase on an annual basis and have a direct impact on our bottom-line. This includes employee fringe benefits, healthcare, prescription drugs and pension costs. The 2025-2026 budget contains conservative revenue projections aimed at preventing shortfalls that would result in further cuts. The city’s main source of revenue is property taxes, which remained flat for nearly 20 years. I have proposed an eight percent increase to the property tax levy, which will generate approximately $13.7 million in revenue. We have identified practical ways to generate new recurring revenue for the 2025-2026 fiscal year and beyond. In a continued effort to hold negligent property owners accountable, we increased fines for various code violations. 1 ---PAGE BREAK--- We proposed two state legislative requests that are paramount to the operating budget: the Buffalo Parking and Mobility Authority (BPMA) and the Buffalo three percent Hotel Occupancy Tax (Bed Tax). These critical initiatives will help rectify the City’s inherent structural deficit with an immediate infusion of cash and yearly recurring revenue. This revenue will be used over several years, and is reflected in the 4-year financial plan. Both initiatives provide individual sources of recurring revenue totaling about $6 million annually. Without these key initiatives, the only alternatives would be a drastic property tax increase and severe cuts to city services. I am honored and appreciate the opportunity to present my proposed $622 million operating budget for fiscal year 2025-2026. While we face obvious financial challenges, together we must turn them into opportunities to build a better future for Buffalo. 2