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JULY 28 - AUGUST 04, 2015

State Audit Rejects Dyster’s Version of Fiscal Facts Dyster Blames State-Seneca Impasse For City Financial Woes

By Anna Howard

JULY 28, 2015

Hard to fathom how Mayor Paul Dyster could imagine that things are well in Niagara Falls and that progress is being made. How come the residents can't see it?

Niagara Falls Mayor Paul A. Dyster recently told the city’s finance review panel that his budget problems were due to the fact that the city’s casino cash had been delayed before its eventual 2013 delivery. There’s one large problem with Dyster’s “the dog ate my homework” excuse. The mayor’s excuse had already been dismissed by the New York State Comptroller as part of the state’s audit of city finances two years ago.

However, Dyster being Dyster, and this being the home of a spectacularly incurious local media, the mayor has repeatedly been allowed to use the bogus excuse for his busted City budget.

Page 18-21 of the state audit contains the mayor’s four page written response to the Comptroller’s blistering report of how the City mismanaged its finances. Worth noting in Dyster’s communiqué is the somewhat nasty tone the four pages take regarding the Comptroller’s fiscal critique.

Dyster writes, “With respect to that portion of the Report dealing with ‘Financial Condition,’ we would like to note that much of the subject matter of the report deals with the circumstances impacting the City’s finances that are either direct or indirect consequences of the multi-year delay in the delivery of tens of millions of dollars owed to the City…The City has been forced to choose among largely bad options with little guidance as to what constitutes best practices under often unique circumstances. Given the State’s involvement and responsibility in this matter, we find it somewhat ironic that an agency of the State of New York would now find itself in a position to critique our attempts to deal with a crisis in which the State itself has been a central actor.”

Pretty strong words from His Honor as he slammed the State, but it gets stronger.

Mayor Dyster wrote, “The Report goes on to take issue with City funding certain structural deficits by relying on ‘one-shots.’ The City’s strategy should not be characterized in this way.”

Dyster continued, “…the City felt it had little choice but to prepare its budgets factoring in Casino Revenue…The City has been assured regularly by the State that the State will prevail in arbitration or settlement…Although not currently booked as such, make no mistake: the City views the Casino Revenues as an account receivable.”

Note the final sentence as the mayor delivered a veritable “in your face” to Comptroller DiNapoli, by writing what amounts to, “We consider the casino funds to be part of our budget and we don’t care what you say.”

Did the Comptroller buy Paul Dyster’s “the dog ate my homework” excuse? No.

Page 22 of the State audit neatly summarizes the State Comptroller’s response to Mayor Dyster’s confrontational letter by writing, in part:

 “We acknowledge the significant financial problems facing the City, attributable in large part to the casino moneys not being received, as well as the limited options available to the Mayor and Council to address the City’s fiscal stress. It is important to note however that even if the City had received casino payments, as budgeted, the structural deficit remains at approximately $7 million annually. To put this in perspective – of the approximately $81 million in general fund costs expected to be incurred in the 2013 fiscal year, which is a decrease from the 2012 spending plan, the City will not have recurring resources sufficient to cover as much as 9 percent of its cost, and that assumes it will receive the $5.2 million that was budgeted for casino moneys in 2013. City officials should develop comprehensive multiyear financial plans including revenue and expenditure projections, not merely the anticipated use of casino revenues and fund balance.”

But what good did the audit do? Dyster’s City Hall: continues to promote the fiction that the problems are due to the State and Seneca Nation dispute; continues the infamous “one-shots” to close the inexplicable “structural deficit”; continues to waste taxpayer dollars; and continues to deny responsibility for the financial mess that is Niagara Falls. But, what you read here isn’t the end of Mayor Dyster’s impudent defense of his homegrown budget disaster.

Next week: We report how the mayor’s letter explained away the reason for unspent project funds not being properly returned to the City coffer. You’ll read how the mayor’s finger pointing at the Engineering Department and his written remarks to the State Comptroller don’t seem to mesh with employee statements made to the Comptroller’s staff during the execution of the audit. 


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