State Gov. Kathy Hochul in Dunkirk in 2023.

Gov. Kathy Hochul signed into law legislation authorizing an emergency loan from the state of New York to the city of Dunkirk.

“Having spent years in local government, I understand the challenges our local leaders are experiencing, and this financial support to the city of Dunkirk is necessary to avoid a potentially devastating default that could ripple far beyond Dunkirk’s borders,” Hochul said. “This legislation reflects the State’s commitment to stabilizing local governments in crisis while protecting the broader financial integrity of New York municipalities.”

In the news release, Hochul’s office said Dunkirk is facing a severe fiscal crisis, driven by years of structural deficits and compounded by a looming deadline to repay a major revenue anticipation note. This legislation safeguards Dunkirk residents from alternative measures, such as the creation of a financial control board.

Those sentiments, however, are not completely true. Dunkirk’s fiscal mess was due to a lack of attention to detail by those in power locally. Financial information was not being compiled in a timely matter, audits were not being completed while previous Mayor Wilfred Rosas and past and present Common Council members approved spending plans from 2020 to 2024 that were not realistic. It led to an $16 million deficit in March 2024.

Much of the turmoil also stems from city leaders not accounting for a loss of $4 million annually in revenue from the former NRG Energy Inc. station that ceased operations in 2016.

In December, the Common Council approved an 84% increase in city property taxes.

Legislation S.8413/A.8870 enacts “The City of Dunkirk Revenue Anticipation Note Refinancing Act,” which allows the city to use state funds to repay its $12.7 million revenue anticipation note due July 24, 2025, which it would otherwise be unable to pay in full. The loan carries a 15-year amortization period at a 7.5 percent interest rate and must be repaid using city revenues, including through offsets to state aid.

The Act also requires the city to demonstrate that it has made good faith efforts to raise the necessary funds independently and includes provisions for state oversight of future fiscal practices while the loan is outstanding.

The Act also requires Dunkirk to provide annual attestation of its inability to refinance through deficit bonds or notes and remains subject to the oversight framework established under the Dunkirk Fiscal Recovery Act of 2024. The Act supports the City’s efforts to secure their long-term fiscal future and demonstrates the Governor’s commitment to the fiscal health of all state municipalities.

City of Dunkirk Mayor Kate Wdowiasz said, “On behalf of the City of Dunkirk, I want to extend my sincere gratitude to Governor Hochul for signing the critical legislation that authorizes the state loan to assist our city during this unprecedented fiscal crisis. This support is a vital step forward in helping Dunkirk stabilize its finances, continue delivering essential services, and begin the long-overdue process of rebuilding our financial foundation. The Governor’s action today reaffirms her commitment to communities like ours and allows us to correct decades of mismanagement and move toward a more sustainable future.”

State Sen. George Borrello, R-Sunset Bay, was less appreciative of the action. “It’s a bad deal that trades essential state aid for more debt, with no oversight or accountability to fix the real problems that got us here in the first place. This is exactly the kind of short-sighted thinking that’s driven Dunkirk deeper into fiscal crisis over the years.

“Worse, it bypassed standard legislative protocol by moving forward without a home rule message. Local leaders and residents on both sides of the aisle opposed this measure. They rightly recognized it as a short-term patch with long-term consequences.”

Borrello and Assemblyman Andrew Molitor introduced legislation to create a financial control board. He called it a responsible, long-term solution that would bring structure, transparency, and real reform. “I continue to urge the governor and my colleagues in the Legislature to support our proposal to establish an independent financial control board for Dunkirk. That would deliver the accountability and support the city truly needs,” he said.

“Finally, if the governor truly wants to make a meaningful investment in Dunkirk’s future, I again call on her to stand up to the radicals in her party and restore energy production in Dunkirk, starting with natural gas power as a bridge to an eventual nuclear facility. That’s the kind of investment that would bring jobs, tax revenue, and lasting economic growth — not just another bill for local taxpayers to pick up.

“Dunkirk deserves real solutions, not political Band-Aids.”