Lena Sin, The ProvincePublished: Friday, March 23, 2007 Canada.com
Four new Richmond Mounties, the receptionist for an immigrant-services agency, Coquitlam's newest public swimming pool and the downtown street lights of Prince George all have one thing in common. They were paid for by gamblers. With casino revenue doubling in five years, B.C.'s cities have become increasingly reliant on gambling to fund their projects and even their operations. In the last fiscal year, ended March 31, 2006, $65 million in casino revenue was funnelled to 20 cities across the province -- up from $32.5 million in 2000/01, when only 15 communities were home to casinos. How that cash is spent is entirely up to the cities. Prince George, for example, used its share of $2.4 million last year for a tax reduction, an arena upgrade, a mountain-pine-beetle initiative, downtown street lighting and a parking-lot replacement. In Coquitlam, nearly $1 million of the city's $9 million share of casino revenue went to non-profit groups -- money that wouldn't otherwise have been available.
But are cities relying too much on the winning hand? While the B.C. Lottery Corp. plans to roll out more resort-style casinos to boost gambling revenue, New Westminster is learning the hard way to free itself of an addiction to gambling bucks. In the past two years, the casino tap has started to dry up for the Royal City -- in part because of the closure of one casino and the rise of destination casinos like River Rock in Richmond, which has been gaining market share. With gaming an increasingly unreliable source of income, city council is debating whether to wean itself off casino dollars. But in a city where gambling bucks are used to directly fund the operating budget -- rather than put away for a rainy-day fund or used to pay for "one-off" projects -- dealing with lower profits is proving to be tough. "This was a lesson learned in terms of the stability of casino revenue," says Gary Holowatiuk, director of finance. "The thing with [using casino dollars to fund the operating budget] is if you lose $3 million in a year to your operating budget, you're going to have to deal with service cuts."
New Westminster's casino revenue dwindled to $3 million last year from $6.8 million six years ago. Meanwhile, the city faces a costly shopping list this year: It has the oldest water and sewer system in the province, and it needs to be replaced. Wages for city staff are set to rise. And there's the Kiwanis outdoor pool that needs replacing. The future of many long-term projects is now in question while city council decides on a new plan on how casino revenue is used. Holowatiuk says the reality is that casino money is the only reason taxes have been kept low in the city. "For the council of the day, there was a lot of pressure from the community, who were saying, 'Why are you increasing taxes when you're bringing in so much money?'" says Holowatiuk. "It was a lot of political risk to go down that road at the time. They decided to fund the operating budget, and it worked quite well for a number of years." Richmond, Burnaby and Coquitlam -- the top three casino earners of 2006 -- have had the benefit of learning from New West.
Those three cities put the bulk of casino dollars into reserves to pay for one-time capital projects instead of ongoing operational costs. In theory, that means their ability to deliver services isn't at the mercy of gamblers. Richmond Mayor Malcolm Brodie conceded that for the first time last year, $483,000 of casino revenue was spent on hiring four new RCMP officers -- contradicting the city's long-held view that gambling bucks should not be used for ongoing costs. "But this is an exception for the RCMP," said Brodie. "Because if the revenues from the casino would fall, presumably, the need for this RCMP activity would also decrease." In the recent wake of attacks on gamblers, Richmond has recognized the need for more police to investigate crimes such as loan sharking at River Rock. Brodie says the new officers' salaries will continue to be funded by casino revenue in future years. In Coquitlam, city spokeswoman Therese Michelson says council is acutely aware that its casino may not always be as profitable as it is today. That's why for every major capital project being funded by gambling money, replacement costs are also being set aside so that 20 years from now, when the new pool being built this year, for example, needs replacing, the cash will be there. When asked how the city would cope without the casino -- which is essentially building a new pool, ice rink and seniors centre -- Michelson freely admits that none of those projects would be going ahead without gambling bucks. "All of those projects are moving forward more quickly because of the casino," she acknowledged.
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Canada.com
Coquitlam received about $9 million in casino revenue last year, up from $6.5 million in 2005, and the city puts 87.5 per cent of those funds into a capital fund for infrastructure renewal while the rest is doled out to community groups. "We don't use the money for operating funds because you don't want to grow too dependent on it," Wilson said. "There's no guarantee you'll have that revenue in the future."
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