Niagara Gazette

March 6, 2013

Dyster wants Falls to be first in state Financial Assistance Restructuring Program

By Justin Sondel
Niagara Gazette

Niagara Gazette — Mayor Paul Dyster wants Niagara Falls to be the first city in line to participate in a state program aimed at helping upstate cities meet short-term financial goals and deal with long-term structural budget issues.

Dyster sent a letter to Gov. Andrew Cuomo’s office asking that the city be one the first participants in the state’s Financial Assistance Restructuring Program, which Cuomo outlined during his State of the State address in January.

“These are trying financial times for all levels of government and the city of Niagara Falls is facing serious financial challenges,” Dyster said in the letter. “I believe that continuing to work with your administration, the New York State Comptroller’s Office, and the Attorney General’s Office, will yield creative short- and long-term strategies to deal with our most pressing budgetary concerns.”

During the annual address, Cuomo described the program as a joint task force with representatives from the Comptroller’s Office, the Attorney General, the Division of Budget and private sector consultants who will offer restructuring advice to state municipalities.

Dyster said the state-level wisdom can help the city identify initiatives and funding opportunities it might not otherwise find.

“You’ve got a bunch of expertise that’s available for nothing,” Dyster said. “You always want to avail yourself of that sort of advice.”

Dyster likened the task force’s third party perspective to a second opinion from a doctor.

“That makes it clear that this is analysis coming from an objective perspective, rather than being driven by local politics or personalities,” he added.

Requests for more information on the program and possible timelines for implementation of the program made by the Gazette to the governor’s office were not returned by the time the paper went to press.

Members of the city council and City Controller Maria Brown have raised concerns in recent weeks over looming financial issues tied to $7 million in anticipated casino revenues included in the 2013 budget.

The Seneca Nation of Indians and New York state are currently going through a binding arbitration process that will put an end to the four-plus year dispute over the exclusivity clause in the 2002 gaming compact that caused the Senecas to stop making payments to the state and, in turn, the host communities of Niagara Falls, Buffalo and Salamanca in 2009.

Dyster and state officials close to the situation maintain the arbitration process is on schedule to end by mid-year and that the state will receive the money it is owed.

But, if the process is at all delayed or the arbitration panel sides with the Senecas, the city could face major financial issues this summer.

Brown told the Gazette last week that with no new revenue source the city would face cash flow issues by late summer.

Her first priority is to continue to make bond debt payments and pay pension obligations.

“I’m going to pay the bond before anything else,” she said.

Dyster said the governor’s program could help the city deal with any complications or delays in the delivery of the casino revenues, as well as the long-term structural financial issues the Falls and many other upstate cities are facing.

“We’re going to be aware of whatever other initiatives there are out there that could be helpful to us,” Dyster said.

Councilman Charles Walker raised concerns over the possible cash crunch at the Feb. 19 council meeting. Last week he told the Gazette that he was hoping to help the city put together a seven-person panel with representatives from the council, the mayor’s administration, various department heads and public safety officials to analyze and prepare for any issues.

At Monday’s city council meeting Walker said the program could work hand-in-hand with the city panel to compliment and guide its work, but should not be viewed as a replacement.

“I don’t think the state program goes far enough, but I would definitely be willing to work with it,” he said.

Walker agreed with Dyster’s call for a serious look at the city’s financial future beyond the possible financial issues that might come this summer.

“We’ve got to look at long-term issues and not just what we can do today,” Walker said.

Councilman Sam Fruscione was one of three council members to vote to impose a freeze on all discretionary funding at Monday’s City Council meeting.

He, Council Chairman Glenn Choolokian and Councilman Robert Anderson Jr. voted to impose the freeze to create savings where the city can in order to prepare for any cash flow issues, Fruscione said.

During the council meeting Fruscione asked Dyster if the program would help to address the short-term issues, saying that although the imposed spending freeze would not cover the possible $7 million gap the savings would help to ensure that the city would not have to cut services or jobs if the casino revenues are not delivered on time.

“What the council has on the agenda plans will provide at least $800,000 worth of savings,” Fruscione said.

Fruscione said he supports the city participating in the program but does not see it as a solution to potential short-term issues during a phone interview Tuesday afternoon.

“We still have a $7 million gap coming our way,” he said. “This is not going to solve our problems.”

And while the program could lead to funding opportunities it may take a long time for those funds to materialize, Fruscione said.

“We need funds,” he said. “Not advice.”