Richmond City Council will not be throwing caution to the wind despite a record $21 million windfall last year from River Rock Casino and Resort revenues.
That’s because the long-term fate of the casino, including an agreement that sees the B.C. Lottery Corporation provide 10 per cent of casino revenue share to the city, is not set in stone.
The city has spent $148 million from its bag of casino cash, since 2004.
Councillors discussed a future vision for the casino money — which represents 4.8 per cent of the city’s entire revenue stream — at a committee meeting Monday.
“We’re not guaranteed these funds in the future and if we’re spending all the funds now then we’re in real trouble and will have problems in the future in terms of how you make up for that big hole that will blast into the city budget,” said Coun. Harold Steves.
The land beneath the casino is owned by the Musqueam First Nation and leased to the Great Canadian Gaming Corporation until 2041.
It's unclear at council what exactly are the possible outcomes follwoing 2041. Chuck Keeling, spokesperson for the Great Canadian Gaming Corporation, confirmed its lease expires in 2041 and that the Musqueam could take control of the building. But he said the company would retain the gaming license with the B.C. Lottery Corporation.
No one from BCLC or the Musqueam returned the Richmond News' phone calls.
At the committee meeting, there was general consensus that the city needs to use the money for future uses; although council recently passed a motion to pare $1.8 million of the casino funds for a one-time property tax cut.
Coun. Chak Au suggested the city create an endowment fund. However, he was told by staff that interest rates are too low to have any discernable impact.
Coun. Bill McNulty said he wanted the city to acquire land, but was told by staff that the city is in the midst of reviewing its land acquisition strategy.
On Monday, the committee also tentatively approved the creation of a new $3 million discretionary account to sponsor community initiatives as well as close to a 70 per cent bump to annual community grants.
The changes are a result of the committee’s unanimous endorsement of a staff recommendation for simplifying how casino money is dispersed, as was asked by city council late last year given the news of the record windfall.
The $3 million Council Community Initiative Account was created from a $15 million surplus of unallocated funds. The other $12 million will be put in the capital reserve account for infrastructure improvements.
Thus, the city’s policy to use casino money on one-time infrastructure expenditures remains largely in tact.
Coun. Carol Day said she wants to see more guidelines as to what constitutes a “community initiative.”
The report indicates the account will allow council to fund one-time initiatives for “social, environmental, recreation and sports, heritage, arts and culture, safety and security and infrastructure projects.”
Recently, the city had been budgeting to receive $15 million from the casino each year. In 2014, it received the aforementioned $21 million. It’s now budgeting for $18 million, annually.
Put plainly by Coun. Derek Dang: “It’s a good problem to have.”
A fixed $5 million over the next 10 years will pay for Minoru pool and seniors centre while the city will spend $700,000 on four extra RCMP officers.
Starting in 2016, two per cent of revenues will be used to top up the community initiative fund, annually.
Grants will account for 15 per cent of revenues, which should allow council to disperse an additional $550,000 to community groups (a total of $770,000 was dispersed in 2014 from casino funds, plus $1.4 from the city’s operating budget).
As well, 30 per cent will go to capital reserves.
Whatever the city stands to gain beyond its budgeted $18 million will go to capital infrastructure accounts.
The staff proposal gives less money to grants than proposed by councillors Au and Ken Johnston before the election.
Dang said he worries about being too involved in social agency funding, because it’s a provincial and federal responsibility.
“We don’t want to be taking over for what we shouldn’t be doing,” he said.
Au said more money is needed for grants, whether council likes to admit it or not.
“It’s obvious we have social service agencies facing problems,” said Au, who proposes more grant money be applied to groups to create a short-term (two to three years) financial bridge if or when their upper-level government funding is cut.
Andrew Nazareth, the city’s chief financial planner, told the committee the staff recommendation is only a model and that council can change it as it sees fit. He said the recommendation as based on council’s prior directives to fund one-time expenses.
City council may endorse the plan next week. Click here for the full report
