Niagara Gazette

Editorials

May 19, 2013

EDITORIAL: Plan B needed on casino funds

(Continued)

Niagara Gazette — Taxpayers in Niagara Falls deserve to know they’ll be protected either way. After all, they are the ones — city employees included — who will be on the hook should the worst-case scenario unfold. 

In recent years, the city — through sound fiscal management and good stewardship — has been steadily improving its image as a worthwhile investment.

In a matter of months, without backing from casino revenue, it has fallen back into the financial abyss, a stunning and depressing turnaround that has included not one, but two bond rating downgrades and a third ratings company assigning the city’s bond to “watch” status. 

In the latest blow to the city’s standing, Moody’s Investors Service downgraded the rating on the city’s $65 million in outstanding general obligation debt to Baa3 from Baa1 while assigning a “negative” outlook. 

In announcing its decision, the ratings firm took note of the city’s “highly stressed liquidity position” amid the casino revenue delay. It also incorporated the same old list of familiar issues — the weak economy, high unemployment, depressed income levels and elevated debt position. 

“The negative outlook reflects the city’s projected depletion of cash as early as November 2013 if the money due from the Seneca Nation is not remitted or an alternate liquidity source is not identified,” Moody’s concluded.

We certainly hope the arbitrator’s ruling results in the city of Niagara Falls getting all of the money it is owed.

We also believe the city, and its partners at the state, should have a plan in place for the alternative, just in case. 

Failing to do so would just compound one of the city’s longest-standing and most distressing concerns: Failed leadership lacking the vision necessary to prepare for the future, no matter how uncertain. 

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