The first cash payments from the Niagara Power Project relicensing settlement were distributed Tuesday, with $8 million going to seven Niagara County communities and school districts.
Officials said that most of the "signing bonuses" would be spent on capital projects -- such as setting up systems to use the low-cost electricity that's also part of the deal -- or to reduce taxes in forthcoming budgets.
The money distributed Tuesday was a one-time payment, ahead of annual payments of at least $5 million each year for 50 years. Starting after the license approval, set for 2007, those will be split among Niagara Power Coalition members as well.
It was broken down this way: City of Niagara Falls, $1,360,000; Town of Lewiston, $1,360,000; Niagara Falls School District, $1,120,000; Lewiston-Porter Central School District, $1,120,000; Town of Niagara, $1,040,000; Niagara County, $1,040,000; Niagara-Wheatfield Central School District, $960,000.
With allocations of low-cost electricity over the next 50 years, coalition members said the total compensation would be worth more than $1 billion.
The City of Niagara Falls has included its share in its adopted 2006 city operating budget. While Mayor Vince Anello said he would have preferred to complete capital projects with the revenue, he decided to include it in the city's general fund to make up for increased health care and overtime costs expected next year.
The city's share will drop to $850,000 in subsequent years, but the Niagara Falls City Council left the payout in the general fund. It made $600,000 in cuts to the $78 million budget, and, with the savings, reduced the proposed property tax increase for homeowners from 6 percent to just under 4 percent.
"In a sense, you can say part of the Power Authority money is being used to make up part of that tax break," Anello said.
The Town of Lewiston plans to save about half of its signing bonus -- $600,000 to $700,000 -- to develop a town electrical system to distribute its share of low-cost power to residents. Town Supervisor Fred Newlin said the town would spend a few hundred thousand dollars on roadwork, expanding the town parking lot and making Town Hall more accessible.
In the Town of Niagara, the Town Board plans to put $600,000 into the second phase of the town's community center, and will put $400,000 into the general fund. The board will then use half that to repay money borrowed for state-mandated pension costs, Town Supervisor Steven C. Richards said.
Niagara County Legislature Chairman William L. Ross, C-Wheatfield, said the county will use $750,000 of its amount as general revenue in the 2006 budget.
"That $750,000 is being used to reduce the property tax increase," Ross said. "It's a one-time revenue."
The remaining $290,000 is being allocated to the cost of setting up a municipal distribution agency to funnel reduced-cost electricity to county buildings and the other members of the Niagara Power Coalition.
"I made sure that there was enough money there so we wouldn't be caught short," Ross said. If the agency doesn't require all $290,000, what's left will revert to the county's general fund, he said.
Reporters Nancy A. Fischer, Pam Kowalik, Gail Norheim and Thomas J. Prohaska of The News Niagara Bureau contributed to this report.