The City of Niagara Falls is in a financial bind because of the loss of more than $13 million a year in Seneca Niagara Casino revenue, but its plan to replace part of the money with a new $198-a-year garbage user fee is drawing overwhelmingly negative reviews from residents.
The new fee gives the city a chance to collect from parcels that are exempt from property taxes, such as churches and other not-for-profit organizations.
"I don't think it's fair for organizations that do services in the community to have to pay additional garbage pickup fees," said Rev. Dion Greer, pastor of St. John African Methodist Episcopal Church.
"The city needs to consider some other alternatives, because individuals are highly taxed," senior citizen Gloria Dolson said. "Very few are employed, and if they are, they have limited income."
The fee would bring in an estimated $3.6 million a year and is not subject to the state-mandated 2 percent tax cap.
City leaders say the alternative to the fee is to lay off dozens of city employees, particularly police officers and firefighters.
"Public safety is two-thirds of my budget," City Administrator Nicholas A. Melson said. "Three-point-six million (dollars) is a lot of people. Say that's 40 people. I can't do that without touching public safety."
The proposed 2019 budget, to be officially unveiled Oct. 1 by Mayor Paul A. Dyster, also will include a property tax increase right up to the 2 percent cap, as well as some layoffs and elimination of vacant jobs, city officials said Friday.
But the $198 fee for garbage and recycling services has drawn the most public attention in the weeks leading up to the budget announcement.
"We've already been taxed enough," said Candace Corsaro, a real estate agent. "We already pay for garbage, and they're going to tax us again."
"I don't see us needing a tax increase if we get a user fee. Maybe to the cap, but that's about it," Melson said.
Niagara Falls City Council Chairman Andrew P. Touma said the average city budget in New York State derives 19 percent of its revenue from fees, but in Niagara Falls, that figure is 7 percent.
"It's becoming more and more popular in a tax-cap world," Niagara Falls Controller Daniel R. Morello said.
"That would assist us with the constitutional taxing limit, too," Dyster said. The city is at 81 percent of that limit.
Morello said the fee probably will be billed in semiannual installments.
The city also is hoping for some special state aid to make up for the end of casino revenue. The Seneca Nation of Indians stopped paying the state a share of the slot machines profits from Seneca Niagara Casino after 2016, contending that the payment clause in the original casino compact between the Senecas and the state had expired.
The state took the Senecas to arbitration, a process that began last month with the exchange of legal briefs between attorneys for the two sides. However, Dyster said the three-member arbitration panel won't hold its first hearing until mid-December, after the city budget adoption process will be over.
Looking for revenue
The loss of casino revenue blew a $13.6 million hole in the city's $91.4 million budget, Melson said.
Thus, the city sat down with Dawn M. Timm, Niagara County environmental science coordinator, who did similar consulting work when Lockport adopted a garbage fee seven years ago.
Dyster said a user fee was recommended last year by the state Financial Restructuring Board for Local Governments and by a financial advisory panel chosen by the City Council.
The state panel also recommended a reassessment of the property in the city, which could turn out to be another flash point for controversy.
"They're going to reassess the property and the taxes are going to go up," predicted Corsaro, the realtor. "It is now a seller's market. We can't understand why (housing prices) have gone up so much. They're selling so quick we can't even make a call to set up a showing."
The $198 user fee was based on Niagara Falls' annual garbage costs divided by the number of users, Timm said.
She added that businesses and residents who have more than one set of garbage and recycling totes, or who want more than one pickup a week, would pay more than $198.
The fees would be recalculated based on the city's disposal costs in a new garbage contract to be approved during 2019. The city's current deal with Modern Disposal runs out April 30, and a new request for proposals is to be issued soon, Timm said.
Niagara Falls' 17,387 garbage accounts include many not-for-profit entities who haven't paid for garbage services before.
"We think there's a fairness issue," Dyster said.
Greer, the St. John AME pastor, said he doesn't think it's fair at all. He said Niagara Falls is not an easy place to live in for the low-income members of the community.
"It's a lot, $200 a year, particularly when you're already paying a lot in housing and taxes," Greer said. "I've lived in places where housing and utility costs are a lot less."
"A lot of seniors can't afford to pay for this," Corsaro said. "Almost everybody is on welfare."
Census statistics show 27 percent of Niagara Falls residents live below the poverty line. In the 14301 ZIP code, 37 percent are on welfare or food stamps, and in the 14305 ZIP code, that figure is 32 percent.
Dolson suggested that the city should charge more for parking, a cost faced primarily by tourists, if it needs to avoid public safety layoffs.
Tax load could be worse
Melson said the city has used casino funds to pay for regular expenses instead of raising taxes significantly.
In the past five years, the homestead tax rate has risen by 30 cents per $1,000 of assessment valuation, equaling a tax bill increase of $15 during that period on a house assessed at $50,000. The current city tax bill on that $50,000 house is about $900.
"In actuality, we haven't asked the taxpayers to pay," Touma said. "I think this (garbage fee) would be the only fee we would ask them to do."
For 2019, Morello said, total city spending probably will go down.
Melson said the administration is working with the city unions "to close the deficit through measures that would keep as many union workers on the job as possible. There's going to be some job cuts through attrition, and some layoffs, but I'm hoping to avoid public safety layoffs."
The Senecas have requested the steady assignment of one police officer to patrol the casino and offered to pay his salary.
"This is not something that's a windfall for us," said Dyster, who hasn't signed the agreement the Senecas worked out with the Police Department.
"The best time to resolve that would be in the context of a settlement of the broader issues," Dyster said. He added that if there is such a settlement, he's willing to consider having the city, not the Senecas, pay for a full-time cop at the casino.
The Seneca Nation's leaders offered a different view of Niagara Falls' fiscal troubles.
"Unfortunately, just as when he refused to meet with Nation leaders following the completion of our 14-year compact payment obligation to New York State, Mayor Dyster has refused to act on the negotiated public safety agreement for the last several months," Seneca President Todd Gates said.
"Rather than actually leading and trying to move forward on a positive path, the mayor continues to use the Seneca Nation as a scapegoat for the city’s financial state. Public safety should not be used as some sort of political pawn," Gates said.