NIAGARA FALLS – Mayor Paul A. Dyster on Tuesday outlined his administration’s general plans for the city’s $89 million in slot machine revenue from the Seneca Niagara Casino.
In an afternoon news conference in City Hall, Dyster highlighted a 10-step plan for how he believes the city should move forward now that a deal has been struck between the state and the Seneca Nation of Indians, who operate three casinos in Western New York, including Niagara Falls.
The mayor also responded pointedly to what he called some “miscommunication” about “owed funds” coming from other elected officials about the city’s financial situation relative to the casino cash.
“We do not owe vendors casino funds. There is no pile of past-due invoices sitting some place here in the building,” Dyster said. “We were very conservative with casino funding in the budget before the dispute started. We built a reserve; when the casino funds stopped coming, we tapped into that reserve.”
The city also did not run out of reserves or “hit the wall,” he said.
“While there are plenty of critics out there, facts are facts,” Dyster continued. “Our financial planning kept us out of harm’s way for over 40 months.”
Funding will be coming to the city in a lump sum within the next few weeks, Dyster said.
The initial steps of Dyster’s plan call for the city to repay its general fund $22.7 million, as well as $15.7 million to the city’s Tourism Fund and the Tribal Revenue Fund, which is the account that actually receives casino revenue.
Another of the most immediate actions to be taken will be a second round of street repaving to take place later this year to the tune of about $1.5 million.
Earlier this year, the city announced it planned to repave only about one-third the amount of roadway it did four years ago. The key cause of the cutbacks as noted then – the lack of casino cash.
Another one of the early steps, once the city receives the money, will be to distribute it to several entities that are owed a portion under the gambling compact between the state and Senecas. While final calculations have not been completed, the total amount to be distributed to those entities is estimated to be $23.5 million.
Those entities that will receive funds, and the estimated amount they will receive, are:
• Niagara Falls School District: $3 million.
• Niagara Falls Memorial Medical Center: $3 million.
• Niagara Tourism and Convention Corp.: $6.2 million.
• Niagara Frontier Transportation Authority: $4 million.
• Underground Railroad Commission: $1.4 million.
• Fund for infrastructure and road improvements: $5.9 million.
Last week, Gov. Andrew M. Cuomo and Seneca President Barry Snyder Sr. came to Niagara Falls to announce that a deal had been struck in the multiyear dispute in which the Senecas withheld more than $600 million in payments owed the state.
The Senecas held onto the cash because they said the state violated their gambling exclusivity deal with its racetrack casinos.
As part of the deal, the state agreed to keep non-Indian casino operators out of the Senecas’ exclusivity zone as defined in the original 2002 compact.
The state also will stop marketing its racetrack-based casinos in Hamburg, Batavia and near Rochester as “casinos,” which it had started doing in 2008. It also will stop marketing video lottery terminals as “slot machines.”
Buffalo, the Salamanca area and Niagara Falls will share $140 million as the host communities to the Senecas’ three casinos.
Dyster said the Seneca Nation also has indicated it would be interested in partnering with the city and the state in establishing an economic development fund with some of the $209.8 million the Nation kept as part of the deal with the state.
That fund would be used for projects outside of the Senecas’ sovereign land, the mayor said.
The city also will be re-establishing a “responsible reserve fund,” as well as reviewing and revising capital project plans.
Dyster said he expects the city will have a “substantial” fund balance thanks to the casino cash payments.
Showing Wall Street credit-rating agencies the city is on more sound fiscal footing will allow the city’s credit rating – which was lowered by Moody’s twice in the first five months of this year – to improve, the mayor said.
Dyster said he hopes the casino funding can help with a couple of other time-sensitive items: funding a grants administrator and meeting the city’s obligations with USA Niagara Development Corp. stemming from a downtown parking study.
Finally receiving the city’s share of casino revenue doesn’t get the city out of the woods over the long term, Dyster admitted.
“We just need to try to find a way to grow the tax base faster and hold costs down,” he said.
The City Council holds final approval over much of the city’s spending.
Councilman Samuel F. Fruscione, a member of the majority, said it was “a little disappointing” that Dyster has yet to bring city lawmakers to the table to talk about uses for the casino revenue.
Fruscione, while saying he supported Dyster’s proposal to pave more streets, said he hopes the mayor will reach out to Council Chairman Glenn Choolokian to set up some meetings to begin the discussion.
“We need to be included at every step of this process,” Fruscione said.