Des Plaines approves policy for spending casino revenues

The Des Plaines City Council Monday night approved guidelines for spending gambling revenues from the Rivers Casino.

The vote was 5-3 to to adopt the policy limiting the use of casino revenues to primarily infrastructure projects and to pay down the city's roughly $62.5 million debt load, a large portion of which was incurred for land purchases in special taxing districts, and infrastructure projects related to improving streets and water mains. The dissenting aldermen — Dick Sayad (4th Ward), Jim Brookman (5th), and Mark Walsten (6th) — said they thought the policy was too restrictive.

The city has received roughly $18.7 million in wagering and admissions tax revenue from the casino since it opened last July through April 2012, according to Finance Director Dorothy Wisniewski.

As part of the deal that landed Des Plaines the 10th and final casino license, the city must pay the state $10 million for the next 30 years, and share 40 percent of the remaining revenues with 10 disadvantaged communities.

On Monday, the city paid roughly $4.7 million to the state — its prorated share of revenues from the time the casino opened on July 15 through Dec. 31 — and distributed checks for a total of $2.5 million to the 10 communities. Des Plaines' share for that period amounts to roughly $3.7 million, which is what will be earmarked for use in 2013.

Des Plaines Mayor Marty Moylan announced the disbursement of casino revenues during a news conference Monday afternoon with five aldermen and city staff present.

Brookman objected to payments being made to the state and other communities without the city council voting on the matter.

“It's clearly improper and I think it possibly could be illegal,” Brookman said. “If the city council does not have to approve expenditure of this kind of money, I think this is a big problem. We put ourselves at serious risk.”

Moylan responded that the state sent Des Plaines a letter asking for its money.

“These towns and the state has been begging for their money,” Moylan said. “It was the only prudent thing to do.”

All eight aldermen agreed infrastructure should be the biggest priority for casino money because it's what residents want.

Sayad said he didn't see the need for a spending policy because the city staff was professional enough to follow the wishes of the council. He wanted the language of the policy to be simplified and the city's finance committee to review it one more time before the council adopted it.

“This is very critical,” Sayad said. “This is the guideline we are going to give our staff to go by.”

Walsten, whose ward is home to the Rivers Casino, said aldermen have been talking about spending casino revenues on infrastructure and debt for years.

“I'm not comfortable with having that tunnel vision,” Walsten said, adding that he would want the flexibility to use casino revenues to provide incentives to developers or for other investments.

“This ties our hands to other creative thinking,” Walsten said. “As long as we keep the gaming fund separate, we can look at it yearly. It would also give us the ability to think outside the box.”

Finance Committee Chairman Matt Bogusz said past city councils haven't always made the best financial decisions as is evidenced by the $40 million in tax increment financing debt the city has incurred over the years betting on future development.

“To me, that $40 million is the product of creative thinking of previous councils,” Bogusz said. “This is not your typical tax revenue. This is an entirely new fund and something that we haven't done before. We will be different from the nine (casino) communities that came before us, and that's OK because they are relying on casino revenues to support essential services.”

Revenue policy

The Des Plaines policy approved Monday expressly states casino revenues can be used for only these specific purposes:

Ÿ Capital infrastructure projects, including street and sidewalk reconstruction, resurfacing, flood control and mitigation projects/programs, the construction, expansion or renovation of city facilities, and improvements to the city's water and sewer system, but not to purchase equipment, do maintenance of existing equipment or facilities, or for operational costs

Ÿ Paying off existing city debt

Ÿ Fees for professional, legal, financial or administrative services related to authorized gambling revenue expenditures

Ÿ Lobbyist services for the protection of this revenue source from federal or state regulation