The New York Power Authority has approved a plan to accelerate payments to the City of Niagara Falls to help the city deal with its budget crisis.
NYPA will provide the city with a one-time lump sum payment of $13.45 million. That is money that otherwise would have been paid out in an annual payment of $850,000 over the next 44 years under the authority's 2005 relicensing agreement for the Niagara Power Project.
The city has been going through financial difficulties due to an ongoing dispute between the Seneca Nation of Indians and the state over casino revenues. The Senecas have withheld nearly $60 million from the city.
Niagara Falls Mayor Paul Dyster is thanking the power authority and Governor Andrew Cuomo, who has been assisting in negotiating the agreement. Dyster proposed a "disaster" budget recently that included a tax hike and layoffs.
"Having this $13.4 million available in the short term gives us some tools to work with in trying to mitigate some of the negative impacts of the 2013 budget," Dyster told WBFO News.
State Senator George Maziarz, Chair of the Senate Energy Committee which has jurisdiction over NYPA, says he hopes the payment will minimize the tax increase.
"Hopefully, within a short time period, the dispute will be resolved with the Seneca Nation and we can resume those payments and the city will be back on good financial footing," Maziarz told WBFO News.
Rep. Brian Higgins, in a statement, says the city "deserves much better."
“This acceleration provides these payments at a discount rate of 6.25% despite the fact that interest rates are at all-time historic lows and near 0%. Despite claims that the “net present value” of the payments to the city are preserved, they are actually diminished," Higgins says.
“Revenues generated at the Niagara Power Plant exclusively are in the hundreds of millions of dollars. In 2008, NYPA had a surplus of $309 million; $236 million of this, or 76%, came from the Niagara Power Project. Last year alone, NYPA brought in $39 million more than budgeted because of excess water and therefore generation at Niagara."
Higgins says NYPA’s own studies found that only 14% of the economic benefit from the Niagara Power Project remains in Western New York. He says more of that should stay in Western New York.
The NYPA proposal still needs the approval of the city council. Dyster says he will submit an amended budget to the council.