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- Senator introduces bill for I-57 that would connect Sikeston with Little Rock (04/28/16)4
- Law firm requests information about Cape's traffic cameras (04/25/16)3
- Local lawmakers split over failed medical marijuana bill; voters may have a say (04/26/16)19
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- Man accused of pointing BB gun at Chaffee resident (04/26/16)2
Cape Girardeau City Council planning policy on casino revenue
A Cape Girardeau City Council subcommittee has drafted a proposal that it says should serve as a road map for how to spend the roughly $3 million in revenue it expects to begin collecting after Isle of Capri's new casino opens this fall.
From creating an endowment fund to setting aside a significant portion for capital improvements, committee members said the draft proposal has the potential to be a long-range and comprehensive spending policy that guides city leaders for generations.
The committee -- made up of council members John Voss and Kathy Swan and city manager Scott Meyer -- has been working for the past nine months on what they call the Gaming Revenue Draft Proposal. While the plan wouldn't be binding, Voss said that he believes it strikes the best balance.
"We wanted to provide a framework for future councils to follow on how to spend this money," Voss said. "It is our desire that they would consider this plan very seriously when they are making these decisions. We believe at this time that this is the best use of those funds."
Missouri casinos pay a $2 admission tax per patron per two-hour visit, with half going to the host city. Casinos in the state also pay a 21 percent tax on adjusted gross revenue, with 19 percent of that going into the state's general revenue fund and 2 percent going to the host city. Conservative city estimates show that Cape Girardeau will receive about $3 million a year in casino revenue.
The plan shows how it should be spent.
"I like the flexibility that the plan gives us," Mayor Harry Rediger said. "We can wrestle with 10 percent higher in one [fund] or 10 percent lower in another one. All in all, I think it's a fair and flexible plan that will serve the council, staff and will serve our citizens well."
Under the plan, the bulk of the money, between 30 to 60 percent -- $900,000 to $1.8 million -- would be used for projects selected by the council from its Capital Improvements Program. That program sets priorities for the city's major and minor transportation, recreation and environmental projects, many of which lack funding.
"There's always more demand than there is supply for scarce tax dollars," Voss said. "So this is an opportunity for us to continue to build quality of life in our community, to invest in some of these large capital projects."
From 20 to 30 percent -- $600,000 to $900,000 -- would be put into an innovation fund, to be used to support one-time costs for "innovation" purchases that are intended to save money from the operations budget into the future. One recent example is the city's switch to automated leaf collection, Voss said, which eliminates operational costs and improves customer service.
Money doesn't always exist for such innovative ideas, he said.
"Like any business, you have to invest in your business to be able to provide those quality of services," Voss said.
One of the plan's loftier and long-term goals calls for the creation of the Legacy Foundation, a new fund to build an endowment that could eventually generate in more than $1 million a year in new revenue. The plan calls for investing between $300,000 to $600,000 a year to build the fund at some point in the future. Based on annual total casino proceeds of $4 million, a 20 percent investment would result in $16 million in the fund in 20 years. Assuming 5 percent interest, that increases the $16 million to $26 million and more than $1 million each year in interest alone.
"That's a significant amount of money that you can really go and make some improvements in your community," Voss said. "Nothing says you have to spend it. You can continue to invest it. But at some point the idea is you begin to have the opportunity to spend some of that money."
The plan also calls for spending 10 to 15 percent on what the subcommittee labeled the "as promised" fund. About 8 percent of that, or $250,000, would go in a riverfront matching fund. As spelled out in the development agreement, up to that amount would be matched by Isle of Capri to create a half-million dollars each year to make capital improvements to the downtown area.
About 3 percent, between $90,000 and $120,000, would be used for revenue sharing with Jackson, Scott City and Cape Girardeau County. While the council originally tossed around the idea of creating a grant system for each community to apply to, the subcommittee now thinks it's a better idea to use the money on economic development.
The money could go toward regional projects, such as an industrial park, that would benefit surrounding communities, Voss said. The council would also decide on projects that could be brought forward by the surrounding communities or organizations.
Overall, Voss says he believes it's a good plan. Next, the council will discuss the plan before voting on it as a resolution.
"This is a windfall, a once-in-a-lifetime opportunity in terms of a revenue stream of this magnitude," Voss said. "I think it's our responsibility to be very wise stewards of that money and to plan for generations to come."
401 Independence St., Cape Girardeau, MO