Assemblyman Andrew Goodell, R-Jamestown, is leading state efforts to help the city of Dunkirk through its looming financial crisis by making up to $18.5 million available.

As was reported Saturday in the OBSERVER, the city is facing serious cash flow issues that have led Mayor Kate Wdowiasz to tell department heads and Common Council members the city has to slow its spending. She has also noted she thinks the city’s American Rescue Plan Act funding was misspent. There have also been questions how the city was budgeting as state aid following the closure of the NRG power plant were phased out.

On Monday, Goodell introduced the City of Dunkirk Fiscal Recovery Act (A.9589) in the state Assembly to authorize the city of Dunkirk to issue bonds to liquidate certain actual deficits, impose on the city additional fiscal accountability requirements, and provide for the establishment of a Special Debt Service Fund for the city to be held by the state comptroller in order to restore the City’s fiscal integrity and improve its ability to market bonds.

“The fiscal health of the City of Dunkirk has significantly worsened in recent years due to the closure of the NRG electric generation plant,” Goodell wrote in his legislative justification. “This has created a substantial imbalance between revenues and expenditures, resulting in a deficit for the city.”

Goodell wants to make $18.5 million available through bond issuances to close deficits in the city’s general fund, water fund, sewer fund and capital projects fund that are projected to exist by the end of the 2024 fiscal year. The bonds would be repaid over 15 years. Goodell proposes state Comptroller Thomas DiNapoli review and confirm the deficits in the city before the bonds can be issued, and bonds would not be allowed to be issued for more than the deficit amount unless deposited in a special debt service fund that would be established if the bill is passed by the state Legislature and signed by Gov. Kathy Hochul.

The legislation also requires the Dunkirk treasurer to prepare quarterly reports comparing budgeted revenues and expenditures to actual revenues and expenditures, along with a trial balance of general ledger accounts. Each report would also include actions recommended by the city Fiscal Affairs Officer to resolve any unfavorable budget variance.

Moving forward DiNapoli’s office will be required to examine the city’s proposed budget and make recommendations to the city prior to the adoption of the budget. The City Council would be required

to make adjustments to the proposed budget consistent with any such recommendations.

Dunkirk’s Fiscal Affairs Officer will also be required to prepare, along with the proposed budget, a three-year financial plan that includes projected employment levels; projected annual expenditures; reserve fund amounts; estimated annual revenues; and the proposed use of one-time revenue sources. In addition, the financial plan would identify actions necessary to achieve and maintain long term fiscal stability, including, but not limited to, improved management practices, initiatives to minimize or reduce operating expenses, and potential shared services agreements with other municipalities. The city Fiscal Affairs Officer would be required to update the financial

plan consistent with the adopted budget and quarterly budget reports.

The legislation also brings increased state Comptroller’s Office oversight of city spending when it comes to contracts. The bill would require the city treasurer to notify the comptroller at least 15 days prior to the issuance of any bonds or notes or entering into any installment purchase contract, and the comptroller may review and make recommendations regarding the affordability to the city of any such proposed issuance or contract.

When the bonds are issued the city will establish a Special Debt Service Fund with the state Comptroller for the purpose of paying city debt service due or becoming due in future years. The state Comptroller would be authorized to deposit state aid payable to the city and a portion of the city’s property tax collections in the Special Debt Service Fund as necessary to ensure sufficient moneys are available to make scheduled debt service payments over the succeeding 12 months after accounting for the city’s receipt of taxes and state aid. As soon as practicable thereafter, the comptroller would be required to pay over to the city any remaining amounts of state aid and city property taxes that are not needed to reserve for debt service.

Goodell said the state comptroller’s administrative responsibilities related to the Dunkirk aid package can be accomplished within existing resources. By authorizing Dunkirk to issue deficit bonds, Goodell said, the city can restore its fund balance while also maintaining adequate essential services while the increased state fiscal oversight of the City and Special Debt Service Fund would improve the city’s ability to market future bond and note

issues at a lower cost.

“The comprehensive measures outlined in this act are essential for restoring the city’s fiscal health and bolstering its capacity to attract bond investments,” Goodell wrote. “This legislation requires stricter budget controls and heightened financial supervision by the state, introduces a state-managed debt service fund to guarantee timely bondholder payments, and allows for temporary deficit financing to safeguard critical city services during the recovery phase aimed at achieving long-term fiscal stability.”