Tonawanda News

November 10, 2012

NYPA agrees to plug casino budget gap

BY JUSTIN SONDEL
The Tonawanda News

Tonawanda News — Mayor Paul Dyster’s proposed budget is no longer a disaster.

The Dyster administration announced Friday morning that a deal has been reached that will allow the New York Power Authority to provide the city of Niagara Falls with some much-needed financial assistance.

The power authority approved a measure which will spur the acceleration of $13.45 million in aid to help the city as it deals with cash flow issues related to the stoppage of casino revenue payments from the Seneca Nation of Indians. The Senecas stopped paying New York state in 2009 because, they assert, the state violated an exclusivity clause in the gaming compact between the parties signed in 2002 by operating slot machines in race tracks within the exclusivity zone outlined in the agreement.

Dyster credited the power authority’s board of trustees and Gov. Andrew Cuomo for helping to put the deal together and said that while the funding will change the outlook of the 2013 budget for the city, “difficult decisions” will still need to be made in the weeks ahead. 

“Many New York municipalities face economic hardship, but our case was special and needed unique attention,” Dyster said. “The state is just starting a major recovery from Hurricane Sandy and government operations have been disrupted with previous priorities pushed aside to deal with the emergency situation. Despite all of that, Governor Cuomo made helping Niagara Falls a top priority.”

The money - an acceleration of state aid referred to as a spin-up of aid in political circles - comes out of the host city payment, $850,000 a year that the city receives as part of the 2005 relicensing of the Niagara Power Project. The city will get the remaining 44 years worth payments in a lump sum at a discount rate, but has the option to return the money and go back to the original deal if and when it is paid the approximately $60 million it is owed in the gaming compact dispute.

Dyster eluded questions from reporters regarding what might happen if the state, and so the city, does not get any money as a result of the ongoing arbitration between the state and Senecas, saying that he would not entertain hypotheticals.

“Our expectation is that the arbitration will conclude in 2013, that it will conclude successfully from the perspective of the state and that will result in the state being paid what the state is owed and then the city being paid what the city is owed,” Dyster said.

Dyster said that U.S. Rep. Brian Higgins, D- Buffalo, who was elected to a new look 26th Congressional District that includes the city of Niagara Falls this week, was instrumental in ensuring that the deal would not hurt Niagara Falls down the road.

“If we decide to go back to the original arrangement there won’t be a windfall for the power authority,” Dyster said.

Dyster delayed the presentation of his proposed budget by a month, detailing what he had described as a “disaster budget.” It includes an 8.3 percent tax hike for homeowners and layoffs for 20 city employees.

The power authority trustees were scheduled to vote on the acceleration of aid at an Oct. 29 meeting that was cancelled because of Hurricane Sandy and rescheduled for Friday.

“I hope the council and the public now understands that negotiating this agreement affected the timeliness of the 2013 budget presentation,” Dyster said. “If we could have announced this initiative weeks ago, it would have changed the budget projections and timeline.”

Dyster said he now hopes to meet with city council members - who still need to approve the deal - to work towards amending his proposed budget with the power authority funds. 

“Ultimately the council makes decisions on expenditures of funds, but I’d like to sit down with council and propose a budget,” Dyster said.

Council Chairman Sam Fruscione said he can’t comment on the accelerated aid before discussing the terms of the deal with other council members and city attorneys, but it appears to be good news.

“I need to make sure that everything is on the up and up,” Fruscione said. “We’ll see how it all rolls out.”

In his address Dyster thanked State Sen. George Maziarz, R-Newfane, and Assemblyman John Ceretto, R-Lewiston, for their efforts to make the acceleration of the state aid possible.

Maziarz said the deal will work out well for all parties involved.

“It should go a long way towards helping with the city’s financial hardships,” Maziarz said.

Maziarz, who was re-elected to a new look 62nd District that will include Niagara Falls on Tuesday, said even though his district has not included the city for over a decade he has always been working to help out as a senator in the region.

“I’ve been working pretty hard for this city right along,” Maziarz said. “This is certainly a big positive for the city.”

Dyster said he hopes that he and the council will be able to use the accelerated aid to address some of the issues in his proposed budget - tax hikes, layoffs, cuts in services - but that ultimately the city’s financial issues are still very real.

“NYPA assistance is critically important, however, it obviously does not resolve the ongoing issue with the Seneca Nation,” Dyster said. “The $13 million spin-up does not solve all of the city’s issues and no one is pretending it will. Arbitration is still ongoing and there are long-term questions that need to be answered. I am assured the state will continue to explore ways to assist the city of Niagara Falls and look forward to working with our state representatives in seeking solutions to the outstanding issues.”