http://www2.news.gov.bc.ca/news_releases_2005-2009/2006PSSG0041-001061.htm Aug. 25, 2006 PENTICTON –
The Province has approved $40 million in long-term funding to support the proposed South Okanagan Events Centre, MLAs Bill Barisoff and Rick Thorpe announced today.
The provincial government will designate gaming revenues over the next decade to the Events Centre, in addition to a $9.7-million provincial grant from the Major Regional Sports Facilities Initiative announced earlier this year. The project is being made possible through a funding arrangement between the Province, the City of Penticton, the local casino company, Lake City Casinos Ltd., and the British Columbia Lottery Corporation. ++++++++++++++++++++++++++++++++++++++
The press release from the Provincial Government made it appear that the Penticton Taxpayers had won the Lottery and 40 million dollars was being offered to them. This in turn sparked the furor in Vernon asking why our local M.P. Tom Christensen couldn’t deliver a similar amount for water projects. Mr. Christensen was quoted as saying that these monies were coming from a completely different funding stream and not from the infrastructure stream that he was striving to access for Greater Vernon. Well he is right, this is a different funding source and when we examine this shell game, we find that there is much more than meets the eye.
THE REAL SOURCE OF THE MONEY: · Based on the Mar 31/06 fiscal year end Penticton receives $2,359,976 as their share of the Casino Revenues. This is 16.67% of the net take from the casino. (Penticton casino is one of the 3 major destination casinos that get a 16.67% payoff as compared to Vernon’s local casino that payoff at 10%). Penticton seems to have agreed to only take 10% for the next 13 years and designate the extra 6.67% to the new Event centre. This would amount to $944,274 per year or $12,275,556 for the 13 year term of the agreement.
Development Assistance Compensation (DAC) funds which is earmarked to help further develop the "destination aspect of the casino. There are 13 years left on this agreement between the Casino operator and the Province. Each year 16.67% or $2,359,976 (based on 2006 fiscal year) is put aside in this reserve that the Casino can access to make capital improvements to its casino property. Previously, the funding has been used to help pay for such projects as the parkade and Hooded Merganser restaurant at the Penticton Lakeside Resort. The Casino operator Lake City Casinos has agreed not to apply for any portion of the DAC funding during the next 13 years effectively giving up $30,679,688
$12,275,556 + $30,679,688 = $42,955,244.
The first 12 million is the Penticton's taxpayer’s monies that are now being used to fund this project. Their 5 year budget * would have factored this in as revenue and this shortfall will have to be made up somewhere else through tax increases or cuts to service etc. The 32 million comes from the funds Lake City Casino (not the Provincial Govt.) is giving up that normally they would have used over the next 13 years for capital improvements etc. These projects would have created employment and economic spin-offs and the local municipal Government would have realized the taxes from the increased property assessments each year. What consideration Lake City Casino will get for this funding arrangement is unclear but perhaps their report to Shareholders will shed some light on their Community Benevolence.
When the deal is analyzed it seems that there is no money being given or foregone by the Provincial Government or the B.C. Lottery Corp with the exception of the $9.7 million from the Major Regional Sports Facilities Initiative announced in early 2006.
Penticton City Financial Plan shows only a $1,700.000 from Municipal Proceeds - Gaming in the each year 2005 to 2009 ?
Other Articles of interest:
By John MoorhouseTuesday, August 29, 2006, http://www.pentictonherald.ca/article_1903.php
By Theresa McManus, Record reporter Wednesday, May 12, 2004 News article 1
By Wolf DepnerStaff ReporterAug 23 2006 News article 2
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