Buffalo board hears $83M deficit projection as commissary and $64M capital plan advance

Chief Financial Officer Jim Barnes told the Buffalo Board of Education’s executive committee that the district is operating within its adopted budget but remains on track for an $83,000,000 projected deficit for the fiscal year. Barnes opened a three-part update during the committee’s Dec. 4 meeting, covering first-quarter financial results, a proposed food commissary and a $64 million capital program that the district intends to finance with a $54 million bond and $10 million in district cash.

Barnes said the district’s two-year plan addresses a prior-year loss of about $90,000,000 and declining enrollment; the plan relies on roughly $83,500,000 of fund balance in the current year. He described personnel moves that removed about 226 mostly vacant positions from the budget while adding 158 general-fund FTEs to preserve student-facing services, a shift that will increase salary and benefit expenditures and reduce vacancy savings.

On enrollment, Barnes said K–12 counts as of Oct. 31 were up “between 300 and 400 students,” the first annual increase in roughly a decade. He cautioned the first-quarter cadence is not fully representative of the year because salary payments and some school-year spending come later.

Barnes reviewed cash-flow tables showing beginning cash and investments of $444,000,000 and reiterated the $83,000,000 deficit projection. He said first-quarter results were roughly $55,000,000 ahead of the original cash plan and that, if the pace continued, ending cash could be substantially stronger — but he emphasized that the remainder of the year remains uncertain.

On the commissary plan, Barnes said design and construction documents have been submitted to the state and the district is negotiating a 15-year lease with Maguire. He estimated total project costs near $43,000,000 and said Maguire would cover the bulk of construction costs; the district would pay direct costs for furniture, fixtures and equipment and has set aside a $5,000,000 contingency. Barnes outlined two financing alternatives: (a) pay from capital (C) fund reserves as originally planned, or (b) fund portions through general-fund cash pending state lease-aid approval. He said the district expects the state’s building-aid unit and counsel to review the lease-aid request but that a final cash-flow projection for the lease-aid alternative is not yet possible while the review is pending.

Barnes also summarized the capital list: 27 projects totaling about $64,000,000, including a larger renovation (described in the presentation as a Da Vinci/college-prep project) and roughly $30,000,000 of smaller health-and-safety work (windows, roofs, lighting, ventilation). The district plans a $54,000,000 bond sale to pay vendors, with building aid expected to cover an estimated 97.3% of eligible costs; Barnes said that aid should largely offset annual debt service and produce minimal net financial impact to the city and district after the first-year timing lag.

Barnes gave an implementation timeline: submit design and construction documents to the state by Jan. 1, 2025; expect an approximately eight-week state review; receive project approvals and building-aid calculations by about March 1, 2025; and target a $54,000,000 bond issue on or around April 2025. He recognized plant, finance and project-management staff for their work shepherding the list.

Board members asked follow-up questions about other capital projects, the possibility of including a community-serving restaurant or student training program at the commissary, whether the city borrows district cash (Barnes estimated the city may draw on district resources three to four times this year), and the status of plans for Middle Early College. Barnes and Superintendent Dr. Williams Knight said they would provide additional updates on outstanding items.

Next steps listed in the presentation include finalizing lease negotiations for the commissary, awaiting state lease-aid determination, finalizing construction cost estimates if a construction manager is engaged, submitting remaining design packages to the state by Jan. 1, and preparing the district for a spring bond issue if approvals and aid calculations are received.