Niagara Gazette

March 5, 2013

Falls council majority approves another city spending freeze

By Justin Sondel
Niagara Gazette

Niagara Gazette — The City Council has imposed a freeze on non-essential services.

The council passed a resolution calling for a freeze on spending for items such as “consultants, engineering studies, training, conferences, travel, events, concerts advertising and all meals (including the city council’s meals) and planning consultants” by a 3-2 vote. Council Chairman Glenn Choolokian and council members Robert Anderson Jr. and Sam Fruscione voted for the measure while council members Charles Walker and Kristen Grandinetti voted no.

Choolokian said with so much fiscal uncertainty facing the city — there is $7 million in the adopted budget that is anticipated funds — the city has to do everything it can to prepare for financial difficulties as the year wears on.

“This year is going to be worse than ever,” he said.

The anticipated funds are set to be paid from the approximately $60 million owed to the city as part of the 2002 gaming compact between the Seneca Nation of Indians and New York state. The Senecas stopped paying the state in 2009 because, they contend, the state violated the compact’s exclusivity clause by placing “racinos” within the exclusivity zone.

The binding arbitration process under way that will bring an end to the dispute is expected to come to a conclusion by mid-year. Mayor Paul Dyster has maintained absolute confidence that the city will be paid what it is owed, though there is no guarantee that the arbitration panel will side with the state.

Choolokian said Dyster’s administration and the council need to come together to prepare for every situation, including a continued absence of the casino revenues.

“We have to work together because it’s not going to get any better,” Choolokian said.

A preliminary review of expense lines included in the adopted budget showed the city could save as much as $800,000 through the freeze, according to Choolokian, approximately enough to cover the interest payment for the $5 million worth of bonded debt tied to the public safety building on Main Street due this year.

Similar freezes have been put in place over the past several years. Last year Dyster’s administration, the council and other departments continued to spend on items like travel and meals during the freeze.

State law requires that certain civil servants receive appropriate training for their positions, some of which would require travel and lodging expenses.

Choolokian acknowledged that there are necessary expenses to stay in compliance with the state and said this year the types of spending that will be acceptable will be better “spelled out.”

“Whatever we are mandated to do, we will do,” Choolokian said. “Whatever we don’t have to, that will stop.”

Walker said he voted against the measure because he was concerned about some of the language in the resolution.

In particular, he didn’t like that it described the council as a “control board.”

“A control board looks over the city’s shoulder,” Walker said. “We’re the city. How are we the control board too?”

In addition, Walker raised concerns about the freezing of spending on consultants and engineering studies for projects that are reimbursed by the state or federal governments.

Walker pointed to issues that came up last year during the spending freeze with projects the city had already invested significant resources into and needs to complete to recoup that investment.

“If we don’t move on this project we face a situation where we may have to pay back money that’s already been given to us,” Walker said. “Situations like that will actually cost the city more than help the city.”

Dyster has said he has been, and will continue to, monitor the cash flow situation in the city.

“We should be trying to save money in our general fund even with the expectation that we’re going to receive the casino revenues,” he said.

Dyster told the council during the 4 p.m. work session that he had sent a letter to Gov. Andrew Cuomo asking that the Falls be included in a financial restructuring assistance program announced during Cuomo’s State of the State address.

“Even when we’re in receipt of the casino revenues we still have long-term structural problems with our budget that need to be addressed,” he explained.

Dyster said he had yet to see the list of spending lines the council had identified in its preliminary review of discretionary funding, but that he would work with the council to identify which items were discretionary.

But, with so many spending freezes put in place over the years, it has become continuously harder to find savings, Dyster said.

“We keep paring things in the budget,” the mayor said. “After a while you start running out of things to cut.”