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Niagara Falls officials want a new plan if casino money ever comes back

If the flow of casino money to the City of Niagara Falls resumes, city officials plan to spend less of it on day-to-day operations.

A policy regulating how to spend the city's share of Seneca Niagara Casino slot machine profits may come to a vote as soon as April 11, said City Council Chairman Andrew P. Touma.

As of now, the casino no longer pays a share of its profits to local governments. The compact between the Seneca Nation and New York State does not require payments after 2016, the Senecas say. The state disagrees, and the sides are supposed to go to arbitration sometime this year.

If the sides reach an agreement to restore casino funding, city officials want fixed rules on how to spend it. Over the years, candidates for office and other critics have accused the city of spending the money rather than putting some of it aside for a rainy day.

Without a deal to restore casino revenue, the 2019 city budget might be more of a cloudburst than a simple rainy day. Major spending cuts and property tax increases might have to fill the gaps.

"If it doesn't come into play, we'll have to make more decisions," Touma said.

Mayor Paul A. Dyster said a policy in 2008 sought to avoid using too much casino money in the general budget.

"The problem we're trying to address is, over time, City Councils have found ways of covering larger and larger expenses with casino money," Dyster said. "I've tried to hold the line. Every single cent of casino revenue has been spent in line with resolutions of the City Council."

"From my experience, we've asked the mayor to put a policy together," Touma said.

He said that was a couple of years ago, but he contended Dyster didn't respond. So the Council went to work on a policy.

"Obviously, this was Council-driven," Touma said.

The goal is "to spend less dollars on day-to-day operations," he said.

The state law covering the city's share of casino revenue requires 26.5 percent off the top go to local agencies and organizations such as Niagara Falls Memorial Medical Center and Niagara Falls International Airport.

As part of the proposed Council plan, 5 percent of what's left would get socked away in a contingency fund. After that, the city has to pay $1.5 million a year to USA Niagara Development, the state development agency for Niagara Falls, said City Controller Daniel Morello.

The proposed policy then calls for up to $4.5 million to be applied to paying off the city's bonded debt. The city is paying $6.3 million this year on principal and interest on its $65 million in debt, Morello said.

After covering those obligations, the city would assign 35 percent of what's left to the general fund, 25 percent to infrastructure, 15 percent to business development, 10 percent to major equipment purchases, 8 percent to housing and community renewal, and 7 percent to another contingency account to be called the "tribal fund."

Exceptions would be allowed for major purchases or emergencies.

Based on the casino revenue in 2016, the last year it flowed to the city, those percentages would be used to divide up about $6.5 million.

"The Council and mayor would have to agree on how that money would be spent," Touma said. "We're going to have to make some substantial cuts on the expense side to get down to the $6 million."

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