Niagara Gazette

November 14, 2012

NYPA deal discussed

By Justin Sondel
Niagara Gazette

Niagara Gazette —

City officials met Wednesday afternoon to discuss a multi-million-dollar offer from the New York Power Authority.

Mayor Paul Dyster, City Council Chairman Sam Fruscione, Councilman Glenn Choolokian and city attorneys Craig Johnson and Mort Abramowitz all met at city hall Wednesday to discuss the potential benefits and weigh the possible risks of accepting an accelerated payment of funds owed to the city by the power authority as part of a 50-year relicensing agreement. 

Dyster has encouraged city lawmakers to accept the authority's offer to provide $13.45 million in relicensing money upfront, arguing that the move would help alleviate some of the city's financial burden heading into 2013. Several council members have questioned the plan, including Fruscione and Choolokian who have said they want assurances that the deal is the best one available to the city long-term. 

Following Wednesday's meeting, Dyster said the group of city officials discussed a variety of ideas, including potential tweaks to the authority's proposal. He said his administration now intends to pass those ideas along to officials from the power authority, which will be responsible for hammering out the specific details of the advanced-payment plan. 

"I had some ideas. They had some ideas. We are going to take some of those ideas back to NYPA," Dyster said. 

"We are going to see if we can make it work," he added. 

The proposal, unveiled last week, calls for the authority to give the city a lump sum payment of $13.45 million, enough to put a serious dent in the "disaster budget" that Dyster presented on Nov. 1. Dyster and other officials supportive of the plan have suggested it would allow the city to limit tax hikes and layoffs next year. 

The city receives $850,000 each year under the relicensing agreement with the power authority. In accepting the authority's offer of an upfront, lump sum payment, the city would run the risk of forfeiting 44 years worth of remaining host community payments, an amount equal to about $22 million. 

The proposal does contain a clause that would allow the city to return any money it receives in advance should it begin to collect gaming revenue it is owed by the state under the Gaming Compact with the Seneca Nation of Indians. It would, essentially, allow the city to revert back to the terms of its original host community agreement, something Dyster considers a key element of the offer currently on the table.

Dyster said that he fully expects for the city to be paid the more than $60 million that has been withheld since 2009 and the city could then use that money to pay back the authority's acceleration of funding and return to the original deal.

But Fruscione said that with the uncertainty of the outcome of arbitration he doesn't feel that taking the deal - and risking the long term payments from the power authority - is the right decision.

"NYPA is aware of the fact that we are in arbitration and that we may not be able to return to the original deal," Fruscione said.

Council members would be willing to accept a deal in which the power authority either gave the city all the money it is owed in a lump sum or if the city continued to receive host community payments, Fruscione said.

"We still have some objections to the deal and we want the mayor to go back and negotiate for a better deal," Fruscione said.

Fruscione also said council members have found enough unnecessary budget lines in the mayor's proposed budget to lessen the burdens on taxpayers and city employees without taking the deal. Fruscione said he and Choolokian figure they can reduce spending in the mayor's proposed budget by more than $4 million.

State Senator George Maziarz, R-Newfane, said the city shouldn't take the deal if it doesn't like the terms, but that the state - through the authority - was trying to help Niagara Falls while an ongoing arbitration process between the state and the Seneca Nation of Indians plays out.

The senator said if city officials feel they will be able to eliminate enough spending to pass a budget without the the authority's help, they should do what they feel is right.

"If it doesn't work for the city, then they should do what's best for them," Maziarz said.