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NIAGARA FALLS - Mayor Paul A. Dyster said Tuesday that the city would stop providing fire service to the Seneca Niagara Casino before it lays off any firefighters in the midst of a budget crisis.
At a 9/11 memorial service, Dyster told city firefighters that he would find it difficult to ask them to respond to fires at the casino if the city were forced to trim its ranks because of a cash shortfall caused by more than $60 million in unpaid casino revenue from the casino.
"I just wanted to let them know I understood this would be a very difficult situation for us to be asking firefighters in the Fire Department to risk their lives to protect the profits of the Seneca Gaming Corp. at a time when the gaming corporation wasn't paying their fair share to support, among other things, equipment that makes our firefighters safer," Dyster said.
The words mark Dyster's strongest sentiments yet in the dispute between New York State and the Senecas, who have withheld more than $60 million in slot machine payments to the city because of a dispute about racetrack casinos.
Without the funds, the city has struggled to fight downtown blight, pay economic-development staffers and provide other services as it confronts a cash shortfall that city officials previously said could reach $21 million by year's end.
"We're just basically out of cash," Dyster said.
"At this point, we're meeting our obligations, but we don't have a fund balance there to deal with any sort of unexpected circumstances."
The mayor said the city would, at this time, continue to provide fire services to the casino. But as the city prepares a "disaster budget" for next year, he said, that service is not guaranteed.
"I hope it doesn't come to something like that, but I feel as though the City of Niagara Falls has been victimized through no fault of its own," Dyster said. "I want to start reminding the Seneca Nation and the Seneca Gaming Corp. of the responsibilities that we had dutifully taken on since the casino was constructed, because I don't want them to take for granted our continuing to hold our part of the bargain up if they're not holding theirs."
A spokesman for the Seneca Nation of Indians declined to comment, other than to say that "the state is free to pay the three host cities the money they're owed."
A spokesman for the Seneca Gaming Corp. declined to comment.
A plan to allow the Senecas to make direct payments to Buffalo, Niagara Falls and Salamanca was scuttled by the administration of then-Gov. David A. Paterson and last year by Seneca tribal leaders.
Dyster said the city would not discontinue service without first notifying the tribe.
At the behest of his critics, Dyster has taken a diplomatic tone during much of the dispute.
But after standing in front of the city firefighters Tuesday - and in front of fire trucks that were paid for with casino revenues - the mayor's patience appeared to be wearing thin.
"I continue to consider layoffs of city personnel to be the absolute last resort, and they can count on their mayor to take some pretty bold [action] to try to resolve the situation before it gets to that point," Dyster said. "But we're running out of time."
To cover the casino revenue gap, the city already has depleted its $20 million rainy day fund, which is used for special projects and emergencies.
As it plans its 2013 budget, it is dogged by a recurring $5 million debt payment for the city's Main Street police station.
"If you're trying to close that type of gap, it creates a very profound and disturbing impact across the board for all of the city," Dyster said.
"We're working on cash flow to get through the rest of this year, . but were operating without a net."

email: cspecht@buffnews.com