Dunkirk, County Lands Much-Needed NRG State Transition Aid

Empire State Development assistance from the Electric Generation Facility Cessation Mitigation Program will be distributed to the city, school and county.

DUNKIRK — The long-awaited announcement of state transition aid for the city of Dunkirk, Dunkirk City School District and Chautauqua County finally came Thursday.

Empire State Development assistance from the Electric Generation Facility Cessation Mitigation Program will be distributed to the city, school and county due to the loss of tax revenue from the closure of NRG’s Dunkirk Power Plant.

The program has $30 million in funds and was enacted as part of the 2016-2017 state budget. The city of Tonawanda and Kenmore-Town of Tonawanda Union Free School District were also assisted through the program due to the closure of NRG’s Huntley plant.

“These communities were facing very difficult financial decisions as they examined how to absorb the loss of revenue from the closure of the Huntley and Dunkirk power plants,” said Empire State Development President, CEO & Commissioner Howard Zemsky. “That’s why the state established the Electric Generation Facility Cessation Mitigation Fund — which is now supporting communities with funding to help reduce tax burdens in order to lessen the effect on local property taxes, small business and those on fixed incomes.”

The program provides grants to eligible local government entities that demonstrate qualifying reductions in the tax liability and/or payments in lieu of taxes owed by an electric generation facility subject to their taxing authority. Eligible local government entities may apply to receive program grants on an annual basis for up to five years provided that the application and supporting documentation confirms that the tax loss each year remains above 20 percent, although the maximum potential grant value will decline over the five years.

In 2017, the Dunkirk City School District will receive $2,714,152, the city of Dunkirk will receive $1,792,967 and Chautauqua County will receive $1,037,423 — the full amounts the entities applied for. The entities would have received $4 million, $2.68 million and $1.5 million respectively as part of the full 2017 PILOT payment.

According to Assemblyman Andy Goodell, R-Jamestown, the Dunkirk area was the first to submit an application for the funds, knowing that the statute said “first-come, first-served.”

The awards are subject to approval by the Empire State Development Board of Directors on Dec. 15 and proof of the tax loss.

City, school and county officials thanked Gov. Andrew Cuomo, state Sen. Cathy Young, Goodell and ESD for the their efforts to see this assistance come to the area.

“On behalf of the students, parents and taxpayers of our school district, we appreciate the efforts of Governor Cuomo, Senator Young and Assemblyman Goodell, and the staff at Empire State Development in bringing this 10-month process to conclusion,” said Dunkirk City School District Business Manager William J. Thiel. “This award preserves essential educational programming for our students and community as we chart our way through the long-range financial challenges that remain.”

Chautauqua County Executive Vince Horrigan emphasized that this assistance is only for five years, decreasing each year, meaning something has to change.

“The funding is important for the city of Dunkirk and the Dunkirk City School District, but it is still very significant for the county, as well. … It’s a transition and the aid is the largest this year, but it gets less and less each year for five years. So, while it provides some temporary assistance, still five years from now we have to transition to additional revenues or find different structuring or something that will enable us to keep our programs and our services intact. The first year is very helpful, but we have a lot of work to do. We always remain hopeful that possibly NRG will get repowered; we don’t have anything new on that, but obviously that would be the absolute best situation,” he explained.

City of Dunkirk Mayor Wilfred Rosas thanked the state and ESD for working closely with him on this assistance that will allow the city to adjust to the loss of revenue.

However, the city may not be completely out of the woods due to expected cash flow problems.

“To finally receive notice of the financial aid in writing is great news. … As chairman of the the finance committee, my concern at this point is the timing of those two $900,000 payments from New York state,” Councilman-at-Large Andy Woloszyn explained. “Traditionally we have received NRG’s PILOT payment in two installments — half in December and half in January — thus giving us control of the money for the entire coming year. But, according to the guidelines of the aid, we have to prove the payment shortfall at the time it happens in December and January and submit that to the state in order to get their two large aid payments. How long will it physically take to get that money and have control of it? The timing of those two payments could drastically effect our day-to-day cash flow.”

The Electric Generation Facility Cessation Mitigation Program is administered by ESD in conjunction with the New York State Energy Research and Development Authority and the Department of Public Service. This fund is available to counties, cities, towns, villages, school districts and special districts to replace property taxes paid by electric generating facilities that close on or after June 25, 2015.

In order to qualify for the funding, a local government must demonstrate that the closing of the facility has caused a reduction in the collection of real property taxes or payments in lieu of taxes of at least 20 percent of the taxes owed by the electric-generating facility. The maximum potential grant award is reduced each year, starting with up to 80 percent of tax loss in year one and concluding with up to 20 percent of tax loss in year five.