Niagara Gazette — “I think the mayor’s just hoping that the casino money comes in,” Choolokian said. “I hope he’s right.”
The New York Power Authority offered the city a deal to bring a large influx of cash into the city’s general fund in November. The authority agreed to consolidate 44 years worth of payments from an agreement that was part of the 2007 Niagara Power Project relicensing agreement converting the $850,000 annual payments into a one-time $13.4 million windfall. The deal includes an option to return the money and resume the original agreement.
In his email to the Gazette, Jacobson, the Moody’s spokesperson, said the NYPA deal is a possible solution to the city’s short-term cash needs.
Members of the city council majority balked at the deal, arguing that it would be unwise for the city to accept the one-time shot of revenue when it is owed a total of $44 million over the course of the existing power authority agreement.
Choolokian said that the NYPA deal, as it was originally proposed, is still off the table.
“That’s something we’re not even interested in,” Choolokian said.
Dyster said individual council members’ public opposition to the NYPA deal has factored into the city’s rating downgrade.
“For council members to be preemptively taking a position on the NYPA deal, it’s not helpful to us in defending our bond rating,” Dyster said.
Taking the NYPA deal off the table tells bond rating agencies that the city will not exercise that option if the casino revenue is not delivered, and so will run out of cash, Dyster said.
“Criticizing the NYPA deal puts a downward pressure on the bond rating,” Dytser said.
City Controller Maria Brown expects the latest bond rating downgrade will make it much more difficult - and likely more costly - for the city to go to the bond market to raise funds in the future.
“I don’t know what the other two rating agencies will do as a result of this action,” Brown said. “This is not good for the city. It’s going to put a huge financial burden and cost on us, even if we can borrow.”With mug of Dyster Paul Dyster Waiting on casino cash decision Contact reporter Justin Sondel at 282-2311, ext. 2257