Niagara Gazette

January 13, 2013

Dyster confident Falls will move forward despite fiscal challenges

Dyster confident projects will continue in the Falls despite significant fiscal challenges

By Justin Sondel
Niagara Gazette

Niagara Gazette — Another year of uncertainty stands in front of the city of Niagara Falls.

As 2013 begins, the city enters into its fourth year without the casino revenue it was promised in the 2002 gaming compact between the Seneca Nation of Indians and New York state.

While many prognosticators have predicted the dispute will be settled in the first half of 2013 — whether through arbitration or through a settlement — many in the city remain skeptical.

They’ve heard those predictions before.

Mayor Paul Dyster, now in the second year of his second term, remains optimistic. 

While he understands the potential pitfalls the city faces as a result of its financial situation, he remains enthusiastic about the progress the city has made in recent years and the potential for more positive changes to come. 

“There’s going to be this engine trying to move forward and accelerate the pace of economic development,” Dyster said during a recent sit-down interview with the Niagara Gazette. “And then there’s going to be this anchor sort of holding everything back. That’s going to be all of these nagging worries about the city’s cash position, liquidity, and about our ability to take the steps that need to be taken to bring our revenues and expenditures into balance.”

With many capital projects already under way in the spring, residents will see the city come to life with the continuation of projects that have already begun, according to Dyster. The final touches are set to be put on the painfully long Lewiston Road saga. Buffalo Avenue — another severely deteriorated road — is scheduled to be rebuilt. The final phase of the $44 million Niagara Falls Intermodal Transportation Center will get going once the final snows have melted. 

But if the city doesn’t receive some or all of the $60 million that has been withheld since the Senecas stopped paying the state gaming revenues in 2009, it is unclear how it will continue to pay for these projects.

Through it all, Dyster — who ran for re-election in 2011 under the slogan “fast forward” — insists the city will change for the better this year and residents will continue to see a fair share of public infrastructure improvements in the days and months ahead. 

“As the weather turns and as some of these development agreements get concluded, people are going to see, once again in 2013, a very active construction season here,” he said.

And recent developments in the state — the implementation of Gov. Andrew Cuomo’s “Buffalo Billion” plan and related projects being developed for Niagara Falls — have Dyster believing the city may soon cash in on the initiatives. 

“There is a very strong role for Niagara Falls, especially in the tourism industry segment,” he said.

The mayor acknowledged the condition of the city’s finances may make it difficult for city officials to keep those projects on track.

“We’ve juggled our funds in order to be able to keep all of the projects moving forward,” Dyster said. “But, it’s getting harder and harder to do that.”

In addition to cash flow issues related to the lack of casino funds, the city will now have a tougher time borrowing money through municipal bonding - the other option available to continue to cover costs for large-scale projects.

This week, the bond rating agency, Moody’s Investors, dropped the city’s rating by two positions, meaning borrowing for municipal projects will come at higher interest and, therefore, higher costs. 

“The two ways that we had for making our match for capital projects like road construction projects are both becoming problematic,” Dyster said.

In addition to the cash flow and borrowing issues, Dyster worries about some lines in the city’s adopted budget for 2013. Specifically, he said he’s concerned about $7 million counted as revenues - money set to pay the debt service on the Main Street Public Safety Complex and other financial obligations. Dyster maintains that they were sourced from anticipated casino revenues. If the city does not receive money before those bills are due, it will be in trouble, Dyster said. 

“I’m very concerned that our expenses and our revenues are not in balance for, not just subsequent years, but for 2013,” he said. 

COMING MONDAY New Niagara Falls Police Chief Bryan DalPorto sets his agenda for 2013