OBSERVER Photo by M.J. Stafford The Dunkirk Common Council confers Wednesday prior to approving an $18.5 million emergency bond to fund city government. From left to right are Nick Weiser, Natalie Luczkowiak, Abigail Yerico, James Stoyle, and Nancy Nichols.

Dunkirk officials blamed the NRG power plant shutdown for the city’s financial crisis Wednesday, as the Common Council approved an $18.5 million bond lifeline.

Councilors had a 30-minute executive session in Mayor Kate Wdowiasz’s conference room, concerning “personnel” as stated by Councilman-at-Large Nick Weiser, before passing the bond resolution.

Meanwhile, in the council’s meeting room, Department of Public Works Director Randy Woodbury distributed a two-page handout from city government justifying the emergency bond. The bonding move will require city officials to regularly report on Dunkirk finances to state Comptroller’s Office watchdogs.

The handout was titled “Why the City of Dunkirk Fiscal Recovery Act is Needed” and cites a projected $17 million negative fund balance by year’s end.

As City Attorney Elliot Raimondo later noted, if nothing changes, the city would run out of funding in May.

“The city has approximately $198,000 in cash on hand and debt obligations of $16.29 million,” he said.

“This is something that has been years in the making,” Raimondo added. He referred to the handout, which states, “In short, the budget deficit comes from the NRG tax revenue monies dropping from almost $3 million to $0 over the course of seven years.”

The city was getting “mitigation funding” from the state to replace tax revenues lost after NRG mothballed the plant. However, that funding has now ended.

“The plant did not come back online and no planning to replace the lost revenue was done,” the city’s handout states. “This is demonstrated by past budgets and audits.”

Raimondo said the city is currently unable to pay back the Revenue Anticipation Note it took out last year, and still owes tax warrants to Chautauqua County and the Dunkirk City School District.

As the handout notes, Dunkirk is also behind on payments into the state retirement system for municipal employees. The city also owes $1.75 million for new fire trucks.

Raimondo noted that State Sen. George Borrello and Assemblyman Andrew Goodell have endorsed the move to get Albany’s help.

“This is in the best interest of the city moving forward,” said Councilmember Nancy Nichols.

“This moves us to zero, and moving forward, we get to make responsible budgets,” said Mayor Kate Wdowiasz.

Weiser said that although “We all understand the city is in a difficult position financially,” it offers an opportunity to explore new things, and new ways of doing things.

Councilmember Natalie Luczkowiak distributed her statement on the situation to the media after the meeting: “Please know Mayor Wdowiasz, council and Attorney Raimondo, along with Fiscal Affairs Director (Ellen) Luczkowiak and Treasurer (Mark) Woods have looked at and discussed the past as to how the City of Dunkirk arrived at this critical point of (a) financial obstacle. I admire the bravery of the mayor and the diligence of Attorney Raimondo for leading us on a greater path with the City of Dunkirk Fiscal Recovery Act offered by New York state. I am hoping this begins with a style of fiscal responsibility that lasts.”

While Common Council meetings are normally taped for public viewing on television or the Internet, there were no cameramen Wednesday. The council’s session was a special meeting; it normally meets every other Tuesday.