Niagara Gazette — Mayor Paul Dyster drew a rough sketch of plans for the $89 million in withheld casino revenues that will soon hit city accounts during a press conference Tuesday at City Hall. Dyster said the delivery of the funds will alleviate some of the financial stress caused by a looming cash crunch that would have come to a head this fall had the casino cash dispute not ended last week. He also stressed that city officials will need to continue to work together to deal with ongoing structural deficits in the budget in the weeks and months ahead.
“This is a great victory for the city of Niagara Falls, but now is the time for work, not celebration,” Dyster said.
Dyster said the first steps will involve receiving the funds and then distributing the money to various accounts and entities that were either borrowed from or not paid during the dispute.
Specifically, Dyster said the city will:
• Repay $22.7 million borrowed from the general fund.
• Release $23.5 million to other entities, including the school district and Niagara Falls Memorial Medical Center, which are owed as part of the compact.
• Repay $15.7 million borrowed from the tribal revenue and tourism funds.
Dyster disputed claims made in various media reports by city officials he did not identify by name that the city owed vendors and has fallen behind on payments because of the dispute.
“We were very conservative with casino funding in the budget before the dispute started,” Dyster said. “We built a reserve. When the casino funds stopped coming, we tapped into that reserve.”
Dyster held up a cash flow analysis spreadsheet dated May 29 from City Controller Maria Brown’s office that showed the city would have carried on without needing to address cash flow issues into October had the dispute continued.
The looming cash issues were mostly related to the $7 million counted in this year’s budget as anticipated casino revenues set to repay bond debt tied to the Public Safety Complex on Main Street. Those funds will now be in place by the time the bond debt payments are due, Dyster said.
“Our financial planning kept us out of harms way for over 40 months,” Dyster said. “We avoided layoffs, tax increases and the need for increased borrowing.”
Dyster said his administration can now work to get back to the multi-year financial plans it began to plot when he took office in 2008 and to mitigate some of the damage caused by the casino revenue drought.
To that end, Dyster said his administration will work to restore the city’s bond rating which has been downgraded by several bond rating agencies in recent months. He said the administration also will replenish the city’s reserve fund and begin work on infrastructure and economic development projects that were put on hold during the dispute.
Dyster said he’ll seek the city council’s help in quickly approving several construction projects - including an additional $1.5 million worth of road paving projects - in order to get some important repairs done before winter.
“Now that the situation has been resolved, it’s an opportunity, as I said the other day, for us to shift back into fast forward in terms of our work on economic revitalization,” Dyster said.
Councilman Sam Fruscione, who is part of a three-person majority on the city council, said he was disappointed Dyster had not reached out to him or other members of the majority to discuss a plan for the casino revenues before publicly presenting the details of the next steps.
“We’re willing to work with (Dyster) and we’ll continue to work with him, but he’s got to bring a lot of stuff to the table so that we can have a consensus of what needs to be done,” Fruscione said. “Because the residents are very concerned that this cash is going to be squandered.”
Fruscione said he would like to see more of the casino money put into savings for the city in the future.
“As long as the city council is in charge, the money won’t be squandered,” Fruscione said. “There’ll be a lot of savings and a lot of frugalities moving forward.”
Fruscione said the city will continue to have fiscal issues if the administration and the council do not work together towards bringing the city into a state of financial stability.
“It’s going to require teamwork,” Fruscione said. “You’ve got to have the administration and the legislative branch to have complete teamwork. Otherwise, it’s not going to work out at all.”