Niagara Gazette

June 19, 2013

State comptroller's analysis shows Falls ranks high among challenged communities

By Justin Sondel
Niagara Gazette

The New York State Comptroller’s Office has once again delivered bad news to the city of Niagara Falls.
The city was ranked in the top category - “significant stress” - by Comptroller Thomas DiNapoli’s office in the first round of municipalities analyzed as part of the state’s new Fiscal Stress Monitoring program.

DiNapoli said that while the Falls scored in the top category for this year, it is likely to drop in the rankings as the delivery of casino revenues will reduce financial burdens for the city.

“Certainly that news will significantly boost the outlook for Niagara Falls,” DiNapoli said during a Tuesday morning teleconference with reporters from around the state.

The analysis only covers 2012 so the resolution to the four-year gaming compact dispute, which came last week, was not considered for the report. The city received a score of 67.5 out of 100 - determined by a set of objective measurements - making it the fifth most fiscally stressed municipality of the counties, towns and cities evaluated in the report.  State auditors analyzed municipalities with fiscal years ending with the end of the calendar year. Municipalities with fiscal years ending mid-year will be detailed in a follow-up report, according to DiNapoli’s office. 

DiNapoli said Niagara Falls still faces financial challenges as expenses have for years outpaced revenues.
“We’ll see how they score next year,” he said.
The program, announced last September, aims to provide analysis and advice from the comptroller’s office for financially struggling municipalities throughout the state. Many counties, towns and cities, particularly upstate, are under fiscal stress as they try to deal with shrinking tax bases, increased costs in areas like health care for employees and legacy costs for retired employees.
DiNapoli said the goal is to work with local governments to find solutions and implement long-term plans to deal with those issues.
“By having a more clear set of criteria to identify stress I’m hoping it will elevate the discussion in a much clearer way,” DiNapoli said.
The comptroller’s office also handed down a highly critical audit on the Falls earlier in the month, scolding the city for using “one-shot” or non-recurring revenue sources to plug holes in the budget.
DiNapoli acknowledged that the casino dispute had a significant affect on the city’s financial situation, but also noted the city’s continuing structural deficit issues in a statement that accompanied the audit.
“While the dispute over gaming revenue is significant, the city’s budget challenges also stem from a number of socio-economic factors including population loss and a high unemployment rate,” DiNapoli said. “The mayor and the city council are actively trying to manage their considerable hurdles, but getting on firmer financial footing will require a resolution of casino gaming issues and likely even greater assistance from the state.”
Mayor Paul Dyster said that while the delivery of withheld casino revenues will help the city deal with immediate issues related to cash shortages, dealing with long-term deficit issues remains a priority for his administration.
“We just need to try to find a way to grow the tax base faster but also to hold our costs down,” Dyster said. “That’s a multi-year effort.”
Dyster said he plans to ask city lawmakers to approve the city’s participation in the comptroller’s program for financially distressed cities. The city has already committed to being part of the state’s Financial Assistance Restructuring Program.
“We’re looking for assistance from outside experts to help us address these things,” Dyster said.