State Sen. George Borrello speaks at a news conference in March. This week Borrello introduced legislation that would implement a fiscal control board in the city of Dunkirk.

A control board in the city of Dunkirk could be coming by the end of June under legislation introduced Monday by state Sen. George Borrello, R-Sunset Bay.

Borrello said in late March he was going to introduce legislation to implement a fiscal control board in the city of Dunkirk. Assemblyman Andrew Molitor, R-Westfield, told the OBSERVER in late March he will introduce a companion bill in the state Assembly. Monday’s introduction of S.7497 provides greater detail on the proposal than Borrello and Molitor discussed in March. It has been referred to the Senate Corporations, Authorities and Commissions Committee.

“The city government’s failure to anticipate the loss of tax revenue from the NRG closure, combined with its inability to adjust spending accordingly, has only deepened these financial challenges.

Therefore, the City has experienced substantial budget gaps and a considerable increase in local taxes,” Borrello wrote in his legislative justification. “To prevent further financial deterioration and stabilize the city’s finances, the creation of an interim finance authority is essential.”

The City of Dunkirk Interim Finance Authority will function as a corporate governmental agency and an instrument of New York state authorized to issue bonds exclusively for the purpose of financing city-related costs – including the refunding of existing bonds – and for establishing and funding reserves necessary to pay for those bonds. In addition to its financing powers, the authority will implement fiscal oversight and budgetary requirements on the city aimed at restoring financial stability and enhancing the city’s long-term fiscal management. The legislation also provides for state assistance to support the city in efficiently resolving and paying tax certiorari claims, further alleviating the city’s financial burden.

The control board would have nine members, including one each appointed based on the written recommendation of the Senate president, Senate minority leader, Assembly speaker, Assembly minority leader and the state Comptroller’s Office as well as four members appointed directly by the governor. Six members would be Chautauqua County residents. Control board members would be unpaid but reimbursed for actual expenses.

Beginning within one year of issuing bonds, the authority must report annually to Dunkirk’s mayor, Common Council, city fiscal affairs officers, budget director, state Assembly speaker, state Senate temporary president, minority leadership in both chambers of the state Legislature and the state Comptroller’s Office on the costs it has financed and the amount of financing for each cost over the past year.

The city would decide and formally state when it is requesting the City of Dunkirk Interim Finance Authority to finance certain costs, with the city mayor requesting the authority to provide financing. Upon approval by the authority, at its discretion, the authority may enter into agreements with the city. The city, acting through the

mayor and with the approval of the Common Council, may also enter into agreements with the authority. Agreements have to specify the particular eligible costs to be financed in whole or in part by the authority; outline the financing plan for those costs; detail the method, responsible parties,’and terms and conditions under which money provided by the authority will be disbursed to the city.

The total principal amount of bonds issued to cover the financeable city costs – specifically those resulting

from certiorari proceedings initiated on or after June 1, 2025 – shall not exceed $800 million in total. That limit excludes bonds, notes, or other obligations issued to refund or repay previously issued obligations. Beginning in the year 2031, upon request by the city, the authority shall issue bonds in the requested amount, not exceeding $15 million, to pay tax certiorari settlements or judgments of any kind involving the city. That number decreases to no more than $10 million in 2032. The authority would also not be able to exceed the city’s debt limits under the state constitution.

The control period specified in Section 3769 of this title will begin on June 30, 2025, unless before that date the mayor, with approval from the Common Council, submits to the authority a modification to the city’s budget for the 2025 fiscal year, as it stands on May 10, 2025; and the authority determines that the modification, once implemented, will reduce the projected gap – through recurring or nonrecurring actions – for the 2025 fiscal year, and, together with any prior budget modifications through recurring actions before May 10, 2025, will ensure

a reduction of at least $50 million per year for the following three fiscal years.

“This framework is designed to equip the city of Dunkirk with the tools needed to meet its financial obligations while maintaining its status as an independent municipal corporation of the state,” Borrello wrote. “It also seeks to improve investor confidence in the city’s debt issuances and enhance the city’s ability to access capital markets during its recovery process. The authority will remain in existence until all of its responsibilities, oversight functions, and liabilities are fulfilled or otherwise discharged. Upon its dissolution, all rights, assets, and property of

the authority will be transferred to and vested in the City of Dunkirk, ensuring a seamless transition as the city moves forward with its financial recovery.”