HomeMy WebLinkAboutRES.2718.10-01-2012BILL NO. 12-140
RESOLUTION NO. <----?'17S
A RESOLUTION ADOPTING A CASINO FUNDING
POLICY FOR THE CITY OF CAPE GIRARDEAU,
MISSOURI
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF CAPE
GIRARDEAU, MISSOURI, AS FOLLOWS:
ARTICLE 1. The City Council of the City of Cape
Girardeau, Missouri hereby adopts a Casino Funding Policy,
a copy of which is attached hereto, as exhibit A and is
incorporated herein by reference.
PASSED AND ADOPTED THIS DAY OFD , 2012.
4=4yEIRCeniger, Mayor
ATTEST:
yleA L. Conrad, City Cl
GTRAn
THE UNION �%
CITY of CAPE GIRARDEAU
OFFICE OF THE MAYOR & CITY COUNCIL
Casino Funding
Policy
Adopted
October 1, 2012
401 Independence Cape Girardeau, MO 63703 573-339-6320 Tel 573-339-6302 Fax
cityofcape.org/mayor cityofcape.org/citycouncil
City of Cape Girardeau, Missouri
Casino Funding Policy
Purpose:
The purpose of this policy is to define the proper use of the new casino revenue the City
will receive. The City Council appointed a Sub -Committee comprised of two council
ambers, Kathy Swan and John Voss, and City Manager Scott Meyer, to create a
Casino Funding Policy. The Sub -Committee felt the City would benefit from a
contemplative process that drew from the experiences of other casino cities, non-profit
organizations, and successful business models to establish the direction and use of the
new revenue source. The Sub -Committee spent over one year drafting a proposal, and
the full City Council endorsed the policy with a few minor changes.
Transparency and Accountability:
As with any fiduciary responsibility of the City, the importance of transparency and
accountability is vital to the confidence of the citizens in the use of these funds.
A new Casino Fund shall be established, similar to other special revenue funds of the
:'ity and reported on semi-annually to the City Council . As with all special revenue
funds, staff will estimate revenues available for each upcoming year and will track
revenues and expenditures to stay within that budget. All revenues do not have to be
spent within each fiscal year and can be carried over for the next year's budgeting
process. Fund balances can be accrued to pay for specific larger projects. The Casino
Fund shall be split into four funding categories:
• Casino Obligation
• Legacy/Endowment
• Capital Improvement
• Innovation
Separate accounts shall be maintained for each category. Unspent revenues in each
category will be carried forward as available revenues for that category in the following
year.
Process:
The planning for expenditure of the casino funds shall -,be through the normal CIP and
Operating Budget process. Input for the use of Casino revenues will thus be taken
during the normal hearings for these processes and those priorities measured against
other priorities in the City.
Casino Funding Policy 1 Adopted 10/01/12
Funding Categories:
Casino Obligation - "as promised"
Regional Economic Development
(Adjacent Community Fund)
Riverfront
70% of total revenues to be used
For capital improvements in the
downtown area
10-15%
3%
8% approx.
Legacy/Endowment
Revenues to be set aside by the City to build an
endowment; it is the intent that the endowment only
use the interest many years in the future.
Capital Improvement
Revenues to be used for projects selected by the City
Council from the City's CIP budget; will include the
funding for design and construction.
10-20%
40-60%
Innovation 20-30%
Revenues to be used to support one-time costs for innovation
purchases that will save operating budget into the
future.
Casino Funding Policy 2 Adopted 10/01/12
Funding Category Descriptions:
• Casino Obliaation:
o Regional Economic Development: (adjacent Community): This is money off
the top, three percent, that would be used for regional projects (such as an
industrial park) that would benefit surrounding communities. The City Council
would decide on the projects that could be submitted by the surrounding
communities or organizations. It is not required that the full amount be spent
each year, but if not, it will be carried over in anticipation of a larger or more
desirable project.
o Riverfront Fund : This fund will account for revenues allocated to the
Riverfront category. Available revenues are comprised of the extra revenues
given to the City by the casino and the matching funds provided to the fund
out of the City's Casino Fund. This fund is restricted to projects and
operations in the downtown river front area, essentially in the Old Town Cape
area, or as may be designated by the City. The fund is restricted in that no
more than 30 percent of the funds each year can be spent for operations in
the downtown area , i.e. Old Town Cape operations.
Legacy/Endowment: Revenues allocated to this category would be invested to
gain the most interest to accumulate balances to be used in future years when
the City could use the interest. Ideally, it would be difficult to use or remove
accumulated revenues (principle) or interest until a principle amount goal is
reached. After that, an amount would be removed each year from the interest to
the benefit of the City, but the principle would never be touched, and may be
further enhanced.
• Capital Improvement: Revenues allocated to this category would be used to do
projects in the City's Capital Improvements Program (CIP). The City would use
the existing CIP process to prioritize and identify which projects are funded.
Innovation: Revenues allocated to this category would be used to support one-
time costs that result in reduction of ongoing operational costs. One-time
expenses shall be evaluated on a cost -benefit ratio by staff and recommended to
the City Council for approval. The allocated revenues could also be used as one-
time "pay for performance" to departments or employees exceeding
performance and/or customer service goals.
Casino Funding Policy 3 Adopted 10/01/12
Why Not Spend on Re -Occurring Expenses:
The Sub -Committee and City Council received much advice regarding the use of these
revenues. The one unanimous piece of advice received from leaders of existing casino
cities was to not use casino revenues to fund re -occurring expenses. This advice was
received even from cities who are currently using funds in this manner. Keeping this
new source of revenue free from becoming a part of general operating expenses keeps
the City from becoming dependent on the revenues and free from worry should anything
happen to the revenues by situations beyond the City's control, such as weather, a new
casino, or losing a casino license. If the City would use these revenues for re -occurring
expenses and a situation such as this occurred, the affect could be catastrophic,
depending on that level of dependence.
Casino Funding Policy 4 Adopted 10/01/12