City Finances Must be De-Constructed Before Re-Structured by State Board

Mayor Paul Dyster sought a restructuring board to help his administration figure out how to cut expenses. Dyster seen here at a Hard Rock taxpayer- funded concert.

 

The city council, at the their July 20 meeting, waved the white flag of fiscal surrender by agreeing 4-1 to submit to the New York State Financial Restructuring Board for Local Governments. As you read this article the city departments are preparing their individual presentations for the soon-to-visit state board.

The restructuring board is, according to their web site – www.frb.ny.gov  – “a ten-member panel available year round to offer assistance to eligible municipalities.” Its ten members, interestingly, includes the NYS Attorney General.

While the city has voted to invite the panel to town there’s an elemental difference between the average struggling NYS city and Dyster’s Niagara Falls: Dyster’s Niagara Falls had $90 million of casino revenue in hand. Paul Dyster essentially won a $90 million lottery and eight years later his city is not only broke but in debt.

Before the restructuring board makes any recommendations they must examine the how and why of the Dyster fiscal mystery…a mystery of waste, and mismanagement joined with the mayor’s refusal to follow recommendations made by the state Comptroller in 2013. The restructuring board should critically review the last eight years of Dyster spending. If those eight years aren’t deconstructed then history will repeat itself, sooner if not later.

How did the Dyster administration arrive at this point?

It took: a $50 million courthouse that was supposed to cost $27 million; a $44 million train station with no visible means of post construction support that includes a shuttered and lawsuit mired “Underground Railroad Interpretive Center”; an ice pavilion renovation that climbed from $4 million to $13 million; $2.2 million in trash totes; a “train station re-bid” at $350,000; $500,000 for the troubled Isaiah 61 project; $150,000 for penguins; $150,000 for a tax troubled Community Missions; $130,000 for a “parking study”; $275,000 for a parks study; $250,000 for a golf course restaurant roof; $400,000 for city hall’s parking lot; $850,000 for the Highland Industrial Park; $1 million for legal consultants; more than $1 million in loans and grants for Third Street; $450,000 for Hard Rock concerts; millions of dollars to Global Spectrum to “manage and develop” Old Falls Street…this only touches the tip of the iceberg and doesn’t include the cricket field, Jayne Park, kayak launches, consultants digging “test trenches” on 72nd Street, 72nd Street repair work, $100,000 city hall salaries, overtime and stipends for favored employees, SWEET jobs for Dyster’s friends, job promotions in return for Political Action Committee contributions and on and on.

The restructuring board should realize that Mayor Dyster has refused to reveal his stealth casino-spending plan. The restructuring board ought to understand that Dyster has already signed off on a ten-year extension of the existing casino compact with zero input from city residents and local elected officials.

The restructuring board should appreciate that while Dyster publicly proclaimed himself “the gatekeeper of casino funds” he’s never precisely explained his understanding of how the casino money can be used. Dyster’s casino revenue expenditures have been whimsical and solely dependent on how he chooses to spend the money on any given day. Richard Nixon famously said, “If the President does it, it can’t be illegal.” We characterize Dyster’s approach to casino revenue as, “If the Mayor spends it, it can’t be wrong.”          

The restructuring board should grasp the fact that the state Comptroller audited the city and delivered a blistering report of how the city could repair its financial problems. Dyster refused to follow the audit recommendations. The audit reported on mishandled money with over $1 million unaccounted for. The mayor turned a blind eye to the audit findings and yet he’s now asked the restructuring board to to fix his budget. Dyster has set the record for unmitigated political nerve and it raises a key question: exactly what is Mayor Dyster up to?

The heart of the answer to that question could be in plain sight on the restructuring board website, as it reads. “The board also serves as an alternative arbitration panel for binding arbitration. If a municipality is a Fiscally Eligible Municipality and eligible for binding arbitration with a municipal union (e.g. police, fire or deputy sheriff union) the municipality, by resolution of its governing board with the concurrence of its chief executive, and the municipal union may jointly agree to have the Board serve as its binding arbitration panel.”

There are approximately 150 firemen and 150 police officers. Those 300 employees approximate 34% of the city’s $100 million budget. Public safety is important but the budget is in crisis due to Dyster’s spendthrift ways. Logic dictates that most cuts will be made where most of the money is…personnel, with public safety personnel costs representing more than 50% of all city personnel costs.

In what other ways will Dyster possibly make cuts? We understand the mayor is considering the privatization of the city engineering department. Under the plan he’d close the department and hire, for example, Clark Patterson Lee to perform all city engineering work on contract.

It’s been suggested behind closed doors that the city could outsource billing and collection along with the administration of worker comp claims. The Dyster administration, with support from council chairman Andrew Touma, may consider “shared services” with the city school system. Those services could include purchasing, grounds keeping, computer-technical, law and budget.

Additionally, snow removal could be contracted seasonally or contracted for emergency purposes. And of course there’s the ever-present subject of “privatization” of the city golf course with it being sold or leased.

In any event the restructuring board must understand that the city’s dire financial straits are due to the mismanagement of the mayor’s $90 million casino revenue windfall…a windfall that could have secured the city’s financial future for decades to come if only it had been managed properly.