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Casino slots' cash flows easily in Salamanca Joint contract covers dispersal of revenue

It may seem like a dream to local lawmakers, but residents in another part of the state are enjoying their share of last year's revenues from a Seneca casino right now.

The Seneca Allegany Casino opened in Cattaraugus County in May 2004, and local slots' revenues have flowed smoothly through a contract that was drawn up by city, school and county leaders before the first payment was made.

Salamanca Mayor Jeffrey Pond said that before the casino opened, state lawmakers met with him and said they would adopt an agreement if the city could work one out with the county.

The money there first goes to the city, which then distributes the funds under a detailed agreement.

In contrast, city and county officials have been locked in a lawsuit over revenues from the Seneca Niagara Casino, which opened in Niagara Falls nearly three years ago.

A memorandum of understanding as to how last year's local revenues are to be spent has yet to be approved by the State Senate and Assembly and Gov. George E. Pataki.

Niagara County residents and businesses have suffered as a result:

A marketing blitz that would have promoted hotels and attractions in the city and county last spring was canceled.

More sidewalks and streets went unfixed.

Planned purchases of new snow, leaf collection and recycling equipment were stalled.

The demolition of eyesore homes near the casino has been put on hold.

> The local share

Both agreements regarding the local share of Seneca casino revenues are the same, as will be the one that governs profits from the Senecas' Buffalo casino, scheduled to open by 2007.

Under a compact the Seneca Nation has with New York State, 18 percent of slots revenue is split between the state and host municipality through 2006. The state gets three-quarters of the money; the local host community, one-quarter. The state and local share becomes 22 percent after that and increases to 25 percent of slots revenues in 2010.

In Niagara County, lawmakers disagree as to whether Niagara Falls should receive the full funding, which the city would then appropriate.

A state commission -- which included city representatives -- decided how to divvy up the local share the first year after the casino opened on New Year's Eve 2002. Under that plan, all of the $9.5 million share went straight to the city or to city-related projects.

No one had a problem back then, but things have changed.

After the State Legislature did not renew the commission for last year's allocation -- $11.9 million -- Assemblywoman Francine DelMonte, D-Niagara Falls; State Sen. George Maziarz, R-Newfane; and Niagara Falls Mayor Vince Anello took over the responsibility of working out a spending plan.

Then things fell apart.

Niagara County filed a lawsuit against the city and state this year, claiming it should receive 75 percent of the local share because it is a host municipality. Legislators also have complained that they were left out of the negotiations on how to split the money when the casino arrived.

Anello and DelMonte, both Democrats, want the money from Seneca Niagara to flow first through the city, like it does in Salamanca.

Maziarz, however, wants some of it to flow from the state to various local entities and also wants the agreement to stretch for the remainder of the compact, 13 years.

DelMonte argues that is too long and ties the hands of future lawmakers.

Niagara Falls school and hospital officials -- who hope their institutions end up with some of the casino cash -- said getting the money directly from the state would give them better bond ratings for capital improvement projects.

Maziarz, considered the most powerful political figure in Niagara County, doesn't represent Niagara Falls. Buffalo mayoral candidate Byron Brown does. But Maziarz used his muscle in Albany last year to put the brakes on a renewal of the casino cash commission and expressed concern about the lack of specifics Niagara Falls city leaders have laid out when it comes to spending the money.

> A paper trail

Both DelMonte and Maziarz want four entities -- Niagara Falls International Airport, Niagara Tourism and Convention Corp., Niagara Falls City School District and Niagara Falls Memorial Medical Center -- to receive funds.

"There's no rational reason why the [memorandum of understanding] is not signed today," DelMonte said last week.

DelMonte said she has a paper trail of draft proposals and agreements and requests for responses to prove she has worked hard to try to get the local share allocated.

"Any action regarding the local share has been done by me and roadblocked by the Senate," DelMonte said. "I don't like to be painted as a blockade when I've made so many overtures."

She said the county would benefit under the latest plan she has circulated in Albany, because the Tourism & Convention Corp. markets the entire county and the airport is in Wheatfield.

Maziarz said last week that he agrees the county should not directly receive a portion of the funds and would benefit from Tourism & Convention Corp. support.

He said the two problems he has with DelMonte's proposals have been the specific allocations for the four entities and the length of time an agreement would cover.

"Niagara Falls and DelMonte are insisting on 100 percent to be initially turned over to the city without any stipulations that it be required to be used for economic development or job creation," Maziarz said.

He said he would be happy if a recent proposal circulated by DelMonte were accepted by the city but would want to pass additional legislation he has written that would spell out how the remaining 10 years' revenue would be allocated.

"The NFTA, school and hospital are going to use this for capital construction," he said. "They need a definitive source of revenue for the entire term. [DelMonte] and I have gone around and around about that."

> Plan that works

The City of Salamanca and Cattaraugus County had no trouble getting a two-year contract approved by their state representatives, County Supervisor Jack Searles said.

"We tried to provide the state lawmakers with a proposal . . . instead of waiting for them to come to us," Searles said

The localities in Cattaraugus now have a plan that will last them until 2007. It calls for all money to flow through the city and then be appropriated.

First, the revenues reimburse the city, county and school district for any property taxes lost through land becoming sovereign. Then direct costs are covered -- including bonds the county and city take out for projects associated with the casino.

The final cut is divided 75 percent for the city and 25 percent for the county. That pot may be used for three things: economic development, job expansion and treatment for those with gambling addiction, Searles said.

Anello has estimated Niagara Falls has spent at least $300,000 in casino-related expenses -- for things including police protection, snow removal and improved infrastructure -- and lost about $130,000 in property taxes due to Seneca purchases of private property near the casino.

Already into budget planning for 2006, none of the Seneca Niagara Casino 2004 local slots revenues meant to be spent this year have been allocated to any municipality or entity.

So, while Niagara Falls waits to move ahead with a new public safety center and other capital improvements, Salamanca is already at work creating a Planning Department and adding police officers and firefighters with part of the $1.1 million it received this year.

"There's been a lot of hard feelings with the county and city over the years," Salamanca's Mayor Pond said. "My thought was that if the city develops and the county is stagnant, that doesn't help anyone."

e-mail: gnorheim@buffnews.com

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