City Adjusts Agreement to Share Casino Revenue
Original agreement didn’t contemplate mid-year opening, city manager said.
City council approved a change to the development agreement it with Rivers Casino owner Midwest Gaming and Entertainment, 7-0, which will streamline payments to the state and the disadvantaged communities Des Plaines agreed to share revenues with at a meeting on Monday.
Des Plaines receives a five percent gaming tax. Additionally, while there is no admission cost to patrons, Midwest Gaming pays a $3 admission tax to the state for each patron, one dollar of which goes to Des Plaines.
Also part of the agreement, Des Plaines is required to pay $10 million in gaming tax revenue to the state annually, divide 40 percent of the remainder among disadvantaged communities and can collect the remainder.
In an interview with Patch, Dorothy Wisniewski, finance director, said because the casino opened in mid-July and the timing of gaming tax revenue and admission tax payments to the city made calculations more complicated, keeping track of what the city owed to the state and disadvantaged communities was easier after prorating payments for the first half-year and starting fresh Jan. 1, in-line with the city’s fiscal year.
“The July 15 [casino opening] date posed a hindrance to being able to calculate the amounts received for the gaming taxes, which are remitted monthly and the admissions taxes, which are remitted quarterly,” Wisniewski said.
Wisniewski said the best scenario was to establish a fiscal year that matches the city’s fiscal year, the same as the calendar year.
“That way the city knows how much its received and it can budget for the following year,” Wisniewski said.
In June, Des Plaines made payments to the state and the disadvantaged communities for the second half of 2011. Michael Bartholomew, city manager, said it was a prorated amount verbally agreed upon by the city, casino and state, but not in writing.
While the resolution passed unanimously, Fifth Ward Alderman James Brookman said the city’s payments to the state and the communities prior to city council’s approval of the change was improper.
“I’m concerned about us spending millions of dollars and sending out checks before they appear on the warrant register,” Brookman said. “I think that’s just what we shouldn’t do.”