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Use of casino revenue to plug Niagara Falls budget holes could spark debate

NIAGARA FALLS – City lawmakers want to use casino revenue to cover an additional $1.8 million in expenses next year, including more than $1.1 million in overtime for the police and fire departments.

In a move likely to spur debate over how Niagara Falls should be spending its share of slot machine revenue from Seneca Niagara Casino, the City Council has amended Mayor Paul A. Dyster’s 2015 budget to use casino funds to also cover things like security at the Department of Public Works, maintenance and security at the former Rainbow Centre mall and overtime for city services like snow removal, code enforcement and forestry.

In amendments approved last week, lawmakers also voted to restore 11 positions that were to be eliminated in Dyster’s spending plan. They also voted to cut the salaries of three positions that will be empty due to retirements, eliminate stipends for three posts and cut four other city jobs.

The budget changes - which are subject to Dyster’s veto and then a potential override by the Council - also include a variety of other cuts, including funds to cover residency investigations, travel and training costs, as well as office and other supplies in several departments.

On the other hand, a funding cut of $75,000 to the Niagara Falls Public Library was restored.

Nearly all the changes were spurred by a flurry of budget amendments introduced by Councilman Glenn A. Choolokian, who said his goals were to eliminate the residential and commercial property tax increases in Dyster’s budget and keep city employees from losing their jobs.

“I was looking at a plan to get us through this year,” Choolokian said, “because what an awful year we had. So I wanted definitely no tax increase and to keep the people working.”

The state law that defines what casino funds may be used for – including economic development, infrastructure, neighborhood development and public health and safety – is “vague” and his proposals fit within those categories, asserted Choolokian, who said he introduced a total of 89 budget amendments at Friday afternoon’s session. Councilman Robert A. Anderson Jr. voted for all of Choolokian’s proposals, while the other three lawmakers, to varying degrees, supported some of the measures.

What may prove to be a key point in the debate is whether casino funds should be used to cover general fund expenses with revenue that’s not guaranteed year to year and that is subject to limits under the law.

Dyster’s proposed budget for next year – which included tax-rate hikes for residential and commercial property of 2.7 percent and 7.8 percent, respectively – would have eliminated 17 positions from the payroll, a move the mayor said was necessary to reduce expenses. His $100.8 million spending plan would utilize $4.9 million in one-time revenues and $4.9 million in reserves.

Twenty-two city employees have signed up to accept a $20,000 retirement incentive, though the exact number who take it won’t be final until the end of the year. In addition to the cash incentives, paid out over five years, each employee will also be paid for leftover vacation, sick and personal time.

With respect to amendments that would shift the source of funds from tax dollars to casino funds, those changes are considered modifications to the budget that increase revenue and thereby require the mayor’s approval, according to the Law Department. It appears to be a fine legal point, but one that may arise before the budget is finalized.

The city has used casino revenue to cover variety of expenses before, , including repaving of roads, purchase of new equipment for the police and public works departments.

Dyster said he was concerned because he believes the Council’s recent actions are an “attempt to broaden still further the definition of what it’s reasonable to pay for” under state law.

He plans to use his veto power to hold the line on vacant positions, adding “we absolutely must reduce the size of city government.”

Earlier last week, lawmakers voted to fund all salaries and benefits of employees in the Planning and Economic Development Department with casino revenue. Lawmakers on Friday reduced the amount of casino funds to be used for that from $336,000 to $191,000.

The city received about $21 million as its share of slot machine revenue in 2012, about $20 million in 2013, and about $8 million for the first two quarters of 2014, City Controller Maria C. Brown said.

Lawmakers must finalize any amendments to Dyster’s budget by the end of today. They will hold their final hearing on amendments at 4 p.m. in City Hall.