<!--Rick Forgione--><table width="234" border="0" cellspacing="0" cellpadding="0" background="http://static.cnhi.zope.net/flashpromo/niagaragazette/images/byline_234x60.jpg" height="60"><tr><td><div align="center"><font size="3" face="Arial, Helvetica, sans-serif">By Rick Forgione</font><font face="Arial, Helvetica, sans-serif"><br /></font><font size="1" face="Arial, Helvetica, sans-serif"><a href="mailto:rick.forgione@niagara-gazette.com">rick.forgione@niagara-gazette.com</a></font></div></td></tr></table>
When it comes to rebuilding a city, $60 million apparently isn’t enough.
But it’s a start.
Over the past six years, Niagara Falls has received $60,262,670 as its share of slot machine revenue from the state’s gaming compact with the Seneca Niagara Casino.
As explained by local leaders, that money has done much to rejuvenate the city after decades of decline and broken promises. It has helped bring about long-anticipated projects, such as the new Niagara Falls International Airport Terminal and the Municipal Safety Complex on Main Street. It has begun replacing an aging fleet of vehicles and equipment in the Department of Public Works to fix more streets and plow snow faster.
It has served as a financial boost to numerous hotel and business renovation projects in the key tourism area and allowed the city to sponsor free outdoor events and concerts that have breathed new life into downtown.
And these are just a few of the major accomplishments city officials boast about.
“One day when your children and grandchildren look back at this, we can point to specific things and say ‘that’s what we got out of casino revenues,’ ” Mayor Paul Dyster said.
Though that may turn out to be true, the question city leaders mostly hear now is “what have we gotten out of casino revenues?” Hardly a City Council meeting goes by without a resident or businessman criticizing how the money is being used or questioning what has changed in the city since the slot machines went live.
They want to know how the city could’ve spent $60.2 million and still not fixed every street, knocked down every vacant structure and duplicated the scene across the river.
Among the most vocal critics is state Sen. George Maziarz, R-Newfane, who helped write the original compact between the state and Seneca Nation. At that time, Maziarz said he warned that if the money went to the city in an unrestricted fashion it would be wasted.
“What I predicted is exactly what has happened,” Maziarz said Friday. “If you look at the last six years, the city has gotten worse so how can you say (the casino money) has been used to make a positive impact?”
Maziarz said the city’s spending of casino funds should be investigated by State Comptroller Thomas DiNapoli’s office.
“I think the money has been mishandled repeatedly,” Maziarz said. “I have asked (the city) in writing how they’ve spent the money and they have refused to give it to me.”
City Controller Maria Brown believes Dyster, as well as past administrations, have spent the money in a transparent manner. When the city’s share arrives from the state, it is deposited into a tribal revenue fund account separate from other city finances, and all of the city’s casino cash expenditures are on file with the state Legislature and governor’s office.
“Everyone has records of what we’ve spent and every dime is accounted for,” Brown said. “It’s important for the public to know there’s nothing to hide.”
Brown believes the city has spent the casino funds wisely in the best interest of residents — and in accordance to the “99-h” state law that mandates the money be used only for capital, infrastructure and economic development. Still, she cautions the city cannot afford to be reckless when allocating the cash.
“We need to slow down right now and really prioritize how we can use this money for the best interest of residents in the city,” she said. “We can’t give departments everything they ask for.”
If Brown sounds uneasy, that’s because out of the $60.2 million the city has received in casino funds since 2004, only $56,763 remains unallocated as of Friday. Not to mention the city is still waiting for the second half of its 2008 share to arrive, estimated to be about $8 million. It was expected to be deposited to the state by Dec. 31.
“There’s no due date or penalty for (the Senecas) not paying on time,” Brown said, noting nearly all of the expected $8 million already has been earmarked. “That money is critical for the city.”
Doling out the shares
Dyster doesn’t mind hearing questions about how casino funds are being spent. He just doesn’t understand the criticism.
“I think people overestimate the amount of casino dollars over which the city has discretionary control,” Dyster said.
He pointed out the city hasn’t spent $60.2 million alone. Almost one-third has been lopped off the local share and, through state legislation, earmarked to a handful of agencies and bodies, including the Niagara Falls School District, Niagara Falls Memorial Medical Center, Niagara Tourism and Convention Corp., Niagara County, the HOPE VI housing project and the Niagara Frontier Transportation Authority for the before- mentioned new airport terminal.
Combined, those mandatory payments have sucked out $18.4 million from the local share, leaving the city with $41.8 million.
While he thinks most of the casino allocations are well-spent, City Council Chairman Samuel Fruscione is critical of outside agencies taking away millions of dollars from the city.
“The state mandates aggravate me the most,” Fruscione said. “We’re basically just throwing casino money out of the window without any accountability.”
Assemblywoman Francine DelMonte defends the state earmarks and said the $18.4 million have funded some major projects countywide, including providing $3.7 million toward the new $31.5 million airport terminal.
“That airport would not be open today and operating if it hadn’t been for the local share of casino funds,” DelMonte said.
Most recently DelMonte and State Sen. Antoine Thompson pushed forward legislation to create the Underground Railroad Heritage Commission, which will be fueled by annual allocations of $350,000 from the city’s share of casino funds.
Balancing the budget
Besides state earmarks to outside agencies, the largest deductions to the casino cash account have been $14.2 million to help balance the city’s budget. Specifically, the funds have been used to cover the loss of tax revenue from the properties on the Seneca Nation’s footprint being taken off the tax rolls, and to fund overtime, additional staff and equipment for the city police and fire departments needed for casino-related law enforcement efforts.
Most of the $14.2 million has been used to pay down the city’s bond debt from the construction of the new Municipal Safety Complex. In 2010, the city is using $3.3 million of casino funds to cover debt payments, something Brown said isn’t a sound practice.
“Casino money is being used in the budget and that’s a major concern,” she said. “But at this point, it’s not something you can avoid. What are the alternatives? Raise taxes and cut services?”
Three-plan attack
Dyster said he’s held the same strategy throughout his administration on dispersing casino cash. The first goal is to address the fastest places where improvement can be made, such as upgrading equipment through capital “pay-as-you-go” projects. While the police department has received new patrol cars ($796,500) and the fire department has received a fire engine ($302,338), the biggest benefactor of the upgrades by far has been the Department of Public Works, which has received more than $5.3 million in new vehicles and machines to aid in their job to fix city roads and sidewalks. The most recent purchases have been the $120,000 Zipper street paving machine, a 10-ton roller and a Barber-Greene machine.
Public Works Director David Kinney said the purchases have allowed his department to upgrade an aging fleet and put better equipment into fixing and plowing streets and cutting down trees. He noted the new equipment helped his department pave a record number of roads in 2009.
“Now that we’ve replaced some of our older equipment with newer equipment, we are at the point where we could increase our fleet and have more trucks out on the street at one time,” Kinney said.
Upgrading DPW’s fleet correlates with the second of Dyster’s three priorities, which is improving the city’s infrastructure — from fixing streets to demolishing derelict houses to repairing and renovating city-owned buildings. In the past six years, the city has allocated about $3 million to repair specific streets, $1.3 million for demolitions and $2.2 million for building improvements.
Fruscione said spending casino cash on new equipment, street repairs and demolitions was an easy decision to make.
“Nobody is going to complain about us fixing their street and doing demolitions in their neighborhoods,” he said.
Dyster said once the city’s fleet and equipment are built up and infrastructure is addressed, the first two components of his three-prong attack won’t require as large an investment of casino cash.
“You would expect as time goes on we’re going to be giving more emphasis on the economic development portion of our plan,” he said. “We know that we need to be prepared to set aside funds so when an economic development project comes up, we’re prepared to move forward.”
The city has earmarked $7.2 million for the Urban Renewal Agency and NFC Development Corp. to dole out business loans and grants, including $250,000 to the newly opened Rapids Theatre on North Main Street. Other projects receiving funding were the International Train Station ($2.8 million), the Customhouse restoration ($500,000), the LaSalle Facade program ($100,000) and the Century Club park restoration ($50,000).
Considered to be another form of economic development, the city has used $195,000 to fund various concerts and events, most notably $139,000 to the Niagara Falls Hard Rock Cafe in 2009 to co-sponsor three free outdoor concerts and the Rockin’ New Year’s Eve Gibson Guitar Drop celebration downtown. A resolution is on Monday’s City Council meeting agenda to use an additional $180,000 to co-sponsor six more concerts with the Hard Rock in 2010.
“We don’t do that just because we like to have a good party,” Dyster said. “We’re hoping the attractions bring more people to the downtown area and we’re looking for spin-off business and future investment. The overall objective is to attract economic development and create jobs.”
Another major casino cash expenditure is a total of $4 million for the Niagara Falls Housing Authority’s HOPE VI housing project, including $1 million that was mandated under an old memorandum of understanding with the state. Most of the other $3 million was needed to remove incinerator ash found at the site.
The city also has used $867,393 in interest earnings from banked casino funds to support more than 30 local projects, equipment purchases, businesses and agencies. The interest earnings dropped from $450,019 in 2008 to $105,527 in 2009. Currently, only $79,448 is unallocated.
Despite criticism and questions from some members of the public, Dyster insists his administration and City Council members have worked together to establish sound policies using casino revenues and have put a lot of thought into each expenditure.
“There are a lot of temptations along the way but we’re trying to have discipline and stick to the strategy we’ve established together,” Dyster said. “We’re trying to do the right thing for the long-term interest of the city.”
Niagara Falls’ take
Below is the gross casino revenues thecity has received, along with the year they were earned:
2003 $3,275,000
2004 $6,823,440
2005 $6,885,329
2006 $14,464,932
2007 $18,740,028
2008 *$10,073,941
* The second half from 2008 has notyet been received.
