If talk wasn’t cheap, Dunkirk might have gone a long way toward cutting its multimillion-dollar deficit Tuesday.

The city’s troubling financial situation, and a loan package that was given state Assembly approval on Tuesday, dominated the Common Council meeting.

“This $13 million loan (proposed in the state Assembly) will never come to the city of Dunkirk, and in fact, it will go directly from Albany to New York City, because the city is in debt by $13.7 million based upon previous Revenue Anticipation Notes to cover its operating expenses,” City Attorney Elliot Raimondo said. “The term (to pay it back) is 15 years, the state’s going to take that money directly from state aid to the city.”

Chautauqua County Legislator Bob Bankoski, speaking as a member of the public but introducing himself as a legislator who represents part of Dunkirk, backed the loan but criticized its terms.

“I understand why you need to take the loan because the (Revenue Anticipation Note the city took out in 2024) is due July 27. I get it. — our back is against the wall, we need to stop the bleeding,” he said. “My only issue with the loan is the terms of it,” expressing concerns with the 7.5% interest rate. He said that at that rate, the city would pay $22.5 million if it needed the entire 15 years to pay the loan off.

Prior to Bankoski’s comments, another member of the public asked about a proposal backed by state and local Republicans — a financial control board. Mayor Kate Wdowiasz subsequently explained her opposition to such a board.

“With a control board, there’s always a cost associated with a control board. One of my big concerns is, a control board could not get up and running and issue bonds in time to make the July 24 payment,” she said. “So in addition to the $1.3 million annual payment the city would have to make to the state, we would have to add additional funds onto that so that the control board could function.”

The mayor said that the state’s rules for a control board outline that lawyers, accountants and independent auditors must all be on staff — and paid for by city residents.

Wdowiasz went on to complain about the state Comptroller’s Office refusal so far to certify the city’s debt under the 2024 Fiscal Recovery Act. That was supposed to help the city with around $15 million. The mayor said the loan up for debate in the state Assembly basically does the same thing as the Fiscal Recovery Act.

“They keep saying that they’re holding out for the 2024 audit. That’s not the way the Fiscal Recovery Act reads,” Wdowiasz said. “It reads that they can certify our debt through the end of 2024…there is a clear statement (from) our independent auditors showing that there is a $15 million deficit across all funds, so I don’t know what the delay with certifying our deficit is on their end, and certainly we’ve been trying to work with them to get them whatever records they need.”

Common Council members had plenty to say about the financial situation Tuesday during their own report times.

Councilwoman Natalie Luczkowiak said, “It is gloomy, but there is light at the end of the tunnel. This loan which will pay off that note… will raise our credit rating, and perhaps we can take any other outstanding debts and consolidate them. During financial meetings, if anybody wants to join us, we have been deep-diving.”

Councilwoman Abigail Zatorski asked a series of questions. The first was if the Comptroller’s Office is only waiting for the 2024 audit to certify Dunkirk’s debt. Fiscal Affairs Officer Ellen Luczkowiak confirmed that — but said the auditors, Drescher and Malecki, are unable to do the audit until October. Zatorski wondered if the city should find another auditor.

Zatorski also asked if the city had looked at refinancing options for the Revenue Anticipation Note in the private sector. Raimondo said it had, “but at the moment, the (loan) bill that’s passing would kind of obviate that need because this bill is automatic, it’s not discretionary.”

Zatorski wondered when discussions of the loan bill began. “The first we heard about it was when it made the paper,” she said.

Raimondo replied, “My position was, during the state budget process, that hopefully that the state would come through with, I don’t want to say, a bailout for the city of Dunkirk for the Revenue Anticipation Note. When that did not come through, we evaluated having to refinance it (through) the private sector. The fear on the state’s end… was that no one would refinance the debt. The state of New York does not want one of its local municipalities defaulting.”

The city attorney reiterated, “This bill would immediately take our state aid funding and start paying off the Revenue Anticipation Notes.”

Zatorski said a little later, “It just doesn’t sit well with me that we’re willing to give up state aid, like free money, to borrow money. Whether it’s going to pay our debts or not, it doesn’t sit well.”

Councilwoman Nancy Nichols asked for an explanation of what state aid the city would give up under the loan terms. Treasurer Mark Woods replied that it was money used in the city’s general budget fund. The loss of that aid would have to be figured into the city’s 2026 budget, he pointed out.

“So there is a possibility with all that figured in, that our tax rate could go up, unless there’s other decisions along the line,” Nichols said.

“God willing, the 2024 audit gets done and we can take this (loan) to market for a lower interest rate,” Raimondo said. “Obviously, the council would set the tax rate around budget time, and we’re going to start having those debates…conversations, I shouldn’t say debates, in the upcoming months.”

Nichols also criticized Drescher and Malecki. “These people are supposed to be professionals in doing it and that’s why the city hires them to do it. I know they’re not doing it for nothing. They should understand the situation we’re in, that it needs to be expedited as fast as they can get to it.”

Wdowiasz defended the auditors. “They are working on it and they do understand it’s urgent. Unfortunately, we got on their books late. To their credit, they did catch up three years’ worth of our audits in the last year and half.”

Councilman James Stoyle said, “I just don’t understand how come the (city) school district, who uses the same company (for audits), has no problem whatsoever.”

Wdowiasz replied, “I don’t believe that their records are nearly as bad as ours.” Stoyle shot back, “Yeah, because they had people who knew what the hell they were doing.”

Councilman-at-large Nick Weiser had the final words Tuesday from city government on the financial situation.

On discussions in Albany, he stated: “I want to be clear, the Common Council has no authority or vote in this matter. The state loan and alternative proposals, including the idea of a financial control board, are decisions being made entirely at the state level.”

He said the latest loan “is intended to help the city avoid default, which would obviously carry severe and long-term consequences… The council did budget for the interest payment (on the Revenue Anticipation Note due July 24) this year, but not for the principal, based on the understanding at the time that it would be addressed through the (Fiscal Recovery Act) deficit financing. However, as the mayor mentioned, the Comptroller’s Office has since indicated that it will not certify the city’s deficit in time.”

Weiser, a Democrat, noted Republican support for a control board. “That’s definitely a conversation worth having and one I expect will continue. A control board can be a legitimate policy tool in certain circumstances — but it’s important to understand it does not eliminate our existing debt, and that it also comes with additional costs that have been mentioned.”