Municipal Center

SALAMANCA — Mayor Michael “Smitty” Smith said state officials have told him the city should receive $12 million in retroactive state revenue sharing payments as a result of the Seneca Nation arbitration decision.

A three-member arbitration panel announced Tuesday that it upheld New York state’s challenge to the Senecas’ claim that revenue-sharing payments to the state were not required past the 14th year of the compact.

In a statement issued Wednesday, Richard Azzopardi, senior advisor to Gov. Andrew Cuomo, said, “We're thankful the arbitration panel held a fair hearing of the facts and ruled in favor of the state and the local communities that have been hurt by the Seneca Nation's actions.”

Azzopardi added: “It was clear to us that the Nation had an obligation to continue payments — period.”

The arbitration process was called for in the compact to resolve conflicts. “Now that it's concluded, we ask that the Nation to cease any further delays, make the state and local communities whole and resume payments.”

The Seneca Nation paid New York state more than $1.4 billion in revenue-sharing payments from 2002 to 2016, representing 25 percent of the proceeds from slot machines at the Seneca Allegany Hotel and Casino in Salamanca as well as casinos in Niagara Falls and Buffalo.

“Now that the panel has issued its opinion, we will take the appropriate time to review and respond to the opinion, and move forward,” Seneca President Rickey Armstrong Sr. said Tuesday.

The Nation maintains that the compact did not address revenue sharing past the 14th year.

The arbitration was supposed to be binding. The Seneca Nation chose a representative, the state chose another and the two parties agreed to a third member to arbitrate the dispute.

Smith said he spoke Tuesday with the Seneca president about the decision. No decision has been made by the Senecas on their next move.

Later, Smith said he spoke with a representative from the governor’s office who told him the city could expect around $12 million in a lump sum payment but gave no timetable.

The Seneca Nation could still appeal the arbitration decision in federal court in Buffalo.

The mayor said he would like to restore some of the city jobs that were eliminated when the revenue sharing money was cut off — especially in the police and fire departments. “I’d like to restore departments to where we can properly serve the residents of the city,” he said.

“I’m glad (the decision) came sooner than later,” Smith told The Press. “It happens as we are going into our budget process.”

The mayor said the city still had some of its state revenue sharing from the casino in the bank.

He said he will recommend adoption of a $9 million city budget, down from $10 million before the revenue-sharing funds dried up. “New York state owed us the money,” Smith said, “not the Senecas.”

Smith also said he hopes to bank as much of the lump sum the city is expecting from the state in anticipation of the end of the compact in 2023 as well as another interruption in the funding stream.

“We didn’t let it affect us when the money was gone, and we won’t let it affect us now that it looks like it’s being restored,” Smith said.

Cattaraugus County Administrator Jack Searles said the county was notified of the arbitration decision Tuesday by the New York State Association of Counties.

“We don’t have anything official on this and there is an ability for the Senecas to appeal,” Searles said.

Cattaraugus County has applied its share of the casino revenue sharing into three tiers: The amount of exempt property owned by Senecas in the city of Salamanca, which is on the Allegany Territory, direct costs and economic development.

Just over $1 million was used to make up for the loss of property exempt from taxes.

Searles said the county hasn’t budgeted for the state revenue sharing for the past two years. Any lump sum retroactive payment will go into the general fund, he said.

More than $50 million a year in state revenue sharing payments from the casinos were going to 16 Western New York counties.

(Contact reporter Rick Miller at rmiller@oleantimesherald.com. Follow him on Twitter, @RMillerOTH)