Falls Council Votes to Freeze Spending

April 2, 2012 Updated Apr 2, 2012 at 11:18 PM EDT

By Ed Reilly
By Allen Leight

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April 2, 2012 Updated Apr 2, 2012 at 11:18 PM EDT

NIAGARA FALLS, NY (WKBW) - The Niagara Falls City Council in favor of a strict spending freeze that would cut everything but essential services.

The measure passed by a vote of 4-1.

The move comes as the City is facing a serious cash flow issue due to the on-going dispute between the Seneca Nation and New York State over casino revenue.

Under the original 2002 compact, host communities are supposed to get a portion of the electronic gaming revenues.

The Seneca Nation of Indians stopped making payments after they claimed New York State violated the Seneca's guarantee of exclusivity by allowing electronic gaming at non-native racetracks.

The issue is now in arbitration.

Last week, Niagara Falls City Controller Maria Brown raised the alarm after learning that no resolution was in sight.

"I have to give the warning, with no definitive time frame when these funds will be here . . . how can you possibly keep spending?" says Maria Brown.

The council says that the freeze will prevent layoffs and tax increases, but it will still affect residents and visitors as things like street repair and demolition will be severely affected.

"[Road repairs are] coming to a screeching halt. We received some federal cash to do approximately 20 streets this year. There will be no 40, 50 or 60 streets at all anymore. Those days have come to an end," said council chair Sam Fruscione.

Council member Kristen Grandinetti was the lone 'no' vote, and expressed concerns over the wording of the referendum. She would also prefer to consider budget items on a case-by-case basis.

"So I think that we need to take a look at things on a case-by-case basis and re-evaluate whether we can afford to do them or whether we can't afford not to do them," she told Eyewitness News after Monday's council vote.

And with no end in sight to the stalemate between the Seneca's and the state, lawmakers on both sides are becoming equally frustrated that the city is forced to squeak by without the casino revenue.

"We're having to scrape around and not hire people to do landscaping? Because of something that's going on between the state and the Seneca's..." said Grandinetti.

"We usually receive the short-end of the stick here, continuously," added Fruscione.