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JAN 20 - JAN 28, 2015

Dyster Keeps Spending Casino Cash as Casino Revenue Falls

By Anna M. Howard

January 20, 2015

Artist’s representation of consultants and other beneficiaries of Mayor Paul Dyster’s casino cash spending plan (above).


The Niagara Falls casino cash is dwindling- rapidly. According to figures from 2012 through three quarters of 2014 that dwindling means a more than $3 million dip for the city.

Last Sept., the Reporter detailed the falling numbers and dangers presented by growing casino competition in two stories: “Read It and Weep: Controller’s Report Reflects Drop in Casino Cash”, and “Gaming Industry Future Uncertain While City Pins Hopes on Comeback.”

This week, the Reporter obtained a memo from City Controller Maria Brown, sent to the mayor and the city council on January 16. It confirms everything we wrote.

Her memo titled “Subject: Casino funds decreasing again from 2013 VS 2014 year to date” reports casino revenue dropped for 2013 from 2012 by $1,451,935 and revenue for the third quarter of 2014 compared to the first three quarters for 2013 dropped by another $1,494,670.

In light of diminishing casino revenue Brown wrote, “I met with the Council chairman last night to go over the concerns of not having a proper ‘Casino Spending Plan’ in place and now with this news I think this needs to be discussed immediately.”

A Jan 18, Niagara Gazette story titled, “City records show decline in gaming payments” contained a quote from Mayor Paul Dyster. After seven years of casino revenue spending, the mayor said “If revenue is coming in lower than you expected you have to make adjustments to your plan.”

The mayor has never had a casino-spending plan. The mayor knew for more than a year that revenue is falling yet continued to spend at a frightening rate throughout the year; expenditures included: $3.2 million for a planned animal shelter, $2.2 million for trash totes, $1.5 million to subsidize the state for the conference center and parties and events on Old Falls St., $304,000 for planned golf course cart paths, $521,000 to support part time jobs and engineering consultants, and $4 million for the governor’s economic development competition.

Dyster told the Gazette, “The best use of casino revenues is to get things of lasting value that will help you grow that tax base.”

So he spent $500,000 to the nonprofit Isaiah 61 for their failed housing and reuse store project, $150,000 to Community Missions to bail them out of a tax lien problem, $250,000 for a roof on the golf course clubhouse, $3.2 million for an animal shelter when the S.P.C.A. does a fine job now, millions of dollars to consultants to study the ice pavilion and city parking, $60,000 for tree stump removal, $100,000 for tree trimming, $350,000 for a needless second bidding of the train station, $2.2 million for trash totes, $4 million toward the building of the train station, $3.3 million annually to cover the $46.5 million courthouse thirty-year mortgage, and even $6,200 for planning department office rugs and drapes, and hundreds of thousands of dollars for city hall salaries for economic development employees.

Perhaps the most disingenuous quote in the Gazette article is Dyster’s contention that, “I have argued throughout my time as mayor that we should treat casino revenues as non-recurring revenues.”

The Reporter has written at length that 1) there is no Dyster plan as to how to use casino funds and 2) Dyster weaves in and out of the “economic development” clause in 99-H (the state law that requires casino money to be used for economic development).

Dyster told the media in a June 2013 city hall press conference, “I’ll have a casino plan put together shortly.” That was more than 18 months ago. And since he announced his plan to make a plan casino revenues have dropped by $3 million.

The record shows Dyster tells the council, the media, and residents what is and what is not acceptable casino cash expenditure. It hinges on his use of his power as mayor to put forth personal views of what is and what is not “economic development” and sell it to the people as growing the tax base.

Meantime, the tax base continues to shrink, and no new private sector jobs have been created by the mayor’s spending of almost $200 million of casino cash.

There are three layers to casino cash expenditures: mayor, controller and council. The controller signs off on expenditures. She has sounded a warning.

The council deliberates on expenditures and has the power to approve or disapprove. Consistently the council majority (Andrew Touma, Kristen Grandinetti, Charles Walker) has given the mayor every approval he has sought. Council Chairman Touma told the Gazette, “I think the fact that we’re getting less revenue from the casino is definitely a concern…My concern going forward is that we have to be very cautious with how we use that money especially for personnel.”

The recent past informs us that the council majority isn’t up to the job of analyzing, much less repairing the casino cash situation. The council majority can't say no to Dyster and has consistently enabled the mayor in his spending habits.

Casino cash revenues for the last three years are: $21.6 million in 2012; $20.3 million in 2013; and a projected $18.5 million for 2014.

Since the Seneca Niagara Casino opened on New Year's Eve, 2002, 17 new casinos have been proposed, are opening or have opened in the Northeast – Midwest region dramatically increasing the competition in gaming.

Presque Island Downs and Casino in Erie, Pa., and the Horseshoe Cleveland are two big draws close by. Gov. Cuomo has proposed five new casinos in New York State and another dozen are opening or in the planning stages in New Jersey, Pennsylvania, Ohio and Massachusetts. One wonders what the tipping point will be for casino gaming in the Northeast.

Niagara Falls has received around $190 million in casino cash since 2003.

Niagara Falls City Councilman Glenn Choolokian said the money has been largely squandered. “I don’t think you’d find anybody who would say that the city is better off now than it was prior to the opening of the casino,” Choolokian said.

Artist’s representation of Mayor Paul Dyster’s casino cash spending plan (above).






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