Governor Hochul Signs Legislation to Avert a Municipal Default in the City of Dunkirk

Governor Hochul signed into law legislation authorizing an emergency loan from the State of New York to the City of Dunkirk. The City of 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 more costly and expensive alternative measures, such as the creation of a financial control board.

“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,” Governor 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.”

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.

Assemblymember J. Gary Pretlow said, “This legislation is a necessary and prudent step to prevent fiscal collapse in the City of Dunkirk, while ensuring state resources are used responsibly. By authorizing this emergency loan with clear repayment terms and robust oversight, we are not only helping a city in crisis but protecting the financial health of the entire state and reaffirming our commitment to sound, accountable governance.”

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.”