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An audit of the city budget ending March 30 shows finances are in order, and the books were closed with a surplus of nearly $300,000.

Robert Irwin of R.A. Mercer of Cattaraugus gave details of the audit of the $3.5 million budget during a Council meeting Wednesday.

In a separate letter to the mayor and Council, auditors had a few criticisms of how the city keeps its books. They suggested an annual reconciliation of the tax rolls for changes in ownership and exemptions, and they could not find a reconciliation for the taxable value of the prior year's roll.

In other business, Mayor Carmen Vecchiarella sponsored a resolution asking state and federal governments for financial assistance to offset the city's eroding tax base due to Native American tax immunity, which he said is around $275,000 a year.

Most of the city lies on the Allegany Reservation of the Seneca Nation of Indians, and Senecas living there are exempt from property taxes.

The resolution asks Gov. George E. Pataki and other local state and federal elected officials to sponsor legislation to provide assistance.

Vecchiarella noted that since 1991, the number of immune parcels has risen from 130 to 391. The assessed value of those parcels increased from $3.25 million in 1991 to $6.42 million this year. Overall in the past decade, the city has lost about $2.4 million in property taxes because of the exemptions, the mayor said.

"The steady and continuing erosion of the tax base jeopardizes the ability of the city to provide its customary and required municipal services as are necessary for the health, welfare and safety of those within the city," the resolution said.

The mayor and Council will hold a public hearing at 7:30 p.m. Oct. 10 regarding proposed changes to the city's Comprehensive Plan and Zoning Law and to designate the Council as lead agency for reviewing the changes according to the state Environmental Quality Review Act.

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