Niagara Gazette

Local News

November 13, 2012

Power deal debated by city council, mayor

(Continued)

Niagara Gazette —

"They do no favors for the city of Niagara Falls," Fruscione said. "The state should step up and say, 'look, we're just going to give you $37.4 million because we already overcharge you for utilities, we suck all of your electricity downstate and we sell the rest to New Jersey and Connecticut.' "

Fruscione said that he is not willing to take a lump sum payment that will ultimately cost the city approximately $22 million over the years.

"If they give us the whole wad up front, we'd have no problem accepting that and then we'll put our own strings attached to it on how it's going to be spent,"  he said.

Fruscione believes that he and members of the council will be able to cut between $4 and 5 million out of Dyster's proposed budget — which includes an 8.3 percent tax hike for homeowners, 20 layoffs and cuts in services — meaning that they would not have to take the power authority deal, he said.

"Our part has to be considered unless the state is willing to give us all of the money that is owed to us," Fruscione said.

The acceleration of funding has been described as bridge financing by Dyster and other officials, meant to hold the city over until there is an outcome in the gaming compact dispute between the Seneca Nation of Indians and New York state.

The Senecas have not made payments to New York since 2009 because, they assert, the state has violated the exclusivity clause in the gaming compact making the agreement void. In turn the state has not paid the host cities of Niagara Falls, Buffalo and Salamanca. The stoppage in casino revenue payments is a major factor in the city's current financial woes. Niagara Falls had been recieving around $18 million in casino revenues a year and is now owed over $60 million.

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