City officials prefer private funds, not casino tax money for aquatic center project

Casino revenue could sweeten the pot for construction of an indoor aquatic center in Cape Girardeau, but city officials would prefer to use private donations and grants to complete the funding.

City manager Scott Meyer and Mayor Bob Fox said Monday they don’t want to dip into casino revenue if other funding can be found.

The city and the Cape Girardeau School District combined have pledged $10 million to the project, but officials have said more money will be needed to build the aquatic center.

The city council in 2012 adopted a policy on how to spend revenue the city receives from Isle Casino Cape Girardeau. Among other things, it stipulates casino revenue won’t be used for general operations and recurring expenses such as salaries.

Fox said “in no circumstance” would he support using any casino money to pay city operating expenses for an aquatic center or any other city service.

Using casino money to pay operating costs would pose a financial problem if the casino dollars decline or the casino shuts down, city officials said.

Still, Meyer and Fox said the current council or a future council could change that policy if it so desired.

Fox said the council might consider using some casino money to match a private donation or grant for the aquatic project.

The city began receiving casino revenue in November 2012.

The city receives about $3 million annually in casino revenue, Meyer said.

But much of that money is already committed to other projects, Meyer and Fox said.

“Generally, it is tied up,” Fox said.

“We have tried to use it in cases where money is not available (from other sources),” he said.

Some of the casino money is earmarked for the city’s Legacy Fund to provide a reserve for future needs.

As of June 30, the Legacy Fund had a balance of nearly $1.5 million, finance director John Richbourg said. The goal is for the Legacy Fund to operate as an endowment fund in which the city would spend the interest accrued but not touch the principal.

The city has dipped into the Legacy Fund, but only to provide loans to city governmental departments that are then repaid with interest, Richbourg said.

Cape Girardeau city government earmarks 10% of annual casino revenue for the Legacy Fund, 20% for the Innovation Fund and 40% for capital improvement projects.

The Innovation Fund, according to city policy, is earmarked for projects that improve efficiency.

Another 3% is split among the cities of Jackson and Scott City and Cape Girardeau County.

According to the Missouri Gaming Commission, Cape Girardeau County was allocated more than $52,000 in casino revenue this fiscal year; Jackson, more than $30,000; and Scott City, nearly $10,000.

The casino provides $190,000 to $200,000 a year to the Riverfront Economic Development Fund as long as the city matches it. Richbourg said 30% of that money goes to help fund the Old Town Cape downtown revitalization organization.

The rest of the casino money is not allocated for a specific use, he said.

Richbourg said the amount of casino revenue spent each year varies depending on the projects.

In fiscal 2018, city data provided to the Gaming Commission showed the city spent more than $6 million on projects, about twice as much as allocated for the current fiscal year.

Richbourg said the city in fiscal 2018 spent $4 million in casino money for major upgrades to the city’s radio communications system.

In fiscal 2019, which ends June 30, the city allocated more than $2.4 million in casino money to make the retirement plan for city employees more competitive with plans offered by other governmental entities.

While city officials projected some increase in annual expenses as a result of the move, casino money was not allocated for those recurring expenses.

Another $460,000 in casino revenue is spent annually on purchase payments for the Greater Cape Girardeau Business Park property.

The city in 2012 bought 247 acres, at the Interstate 55-East Main Street/LaSalle Avenue interchange, from Southeast Missouri State University. Under the transaction, the city is paying the university $460,000 a year for 12 years, officials have said.

The city’s capital improvements plan states the city will have an estimated balance of more than $969,000 in casino revenue by June 30, the majority of which would be available for capital improvements.

But city officials aren’t rushing to earmark casino money for the aquatic center project.

Meyer said the city has already committed $6 million in parks/stormwater sales tax money to the project and “you don’t want to bid against yourself” to secure additional revenue.

City officials also need to consider future funding for possibly a new city hall and renovations to the Common Pleas Courthouse, Meyer said.

mbliss@semissourian.com

(573) 388-3641