Approach to using casino-generated revenue will look different in long term, city council says

With decisions on how to spend $2.2 million in anticipated revenue from the first eight months of operation of the casino now behind the Cape Girardeau City Council, its members say the public soon will see the emergence of a different, yet long-intended approach to managing and spending future revenue.

In February and March, the council approved two sets of casino-revenue-funded projects planned for this year; it used a strategy unlike a policy created last year for dedicating casino-generated revenue.

Ten percent of the total state taxes paid by the casino and half of admission fees for patrons go into a city Casino Revenues Fund. The fund is expected to net about $3.3 million annually.

The council's different approach to funding projects first became evident at the March 18 regular meeting, at which amendments were made to the city's 2013-2018 five-year capital improvements program.

In order to fund the projects that are taking place this year, the council reviewed a list of projects created by city staff that were meant to be immediately visible, as advocated by Cape Girardeau Mayor Harry Rediger in an effort to push a positive public perception of the relationship between the casino and the community.

Streetlights come on as night falls Saturday in downtown Cape Girardeau. (ADAM VOGLER)

Among the projects funded with money collected since the casino's opening and to be collected through the end of June are construction of parking lots, lighting and trail improvements, purchasing of equipment for sports fields and parks, demolition of the former Convention and Visitors Bureau building at the corner of Broadway and North Main Street, a space-design survey of the city's police station and addition of a dog park.

As they move ahead to considering costlier projects that could be funded once the first full fiscal year of casino operation starts in July, the council is beginning to separate spending on planning and actual execution.

Concern arose among the council while considerations were underway about whether to approve the initial project list without fully vetting it themselves, some members said. How the community would benefit from the projects wasn't clear enough, they said, and they worried the strategy they were choosing to spend casino revenue for the first time differed from their dedicated-funding policy.

"We didn't have any parameters about who the projects would affect and how many citizens would be benefited by them," Councilwoman Loretta Schneider said. "In my opinion, the decisions were made far too hastily. That won't be done that way in the future."

Councilman John Voss was among the most vocal with his concerns -- he was worried, he said, the city was in too much of a rush.

"There is no need to hurry," Voss said on Friday, recalling how he felt when the council discussed whether to approve the staff-created list. "No one has offered to me any reason why we have to act fastly as a council."

All members of the council, except Rediger and Councilman Trent Summers, who were absent when the vote was held, voted for the final passage of the ordinance that appropriated funds for the first set of projects. Summers, along with Voss, were the only members of the council to vote against appropriating funds for the second set of projects.

As a result of council members' concerns, some revisions were ultimately made to the list of projects to be completed this year.

The dedicated-funding policy for spending casino revenue states the city will use 40 percent to 60 percent of annual revenue for capital improvements and place 20 percent to 30 percent in an innovation fund for supporting one-time purchases that will result in savings in future operating costs. Ten percent to 20 percent to savings also will go into a legacy endowment fund, and 10 percent to 15 percent will be placed in a "Riverfront Development Fund." That fund will receive matching contributions from the casino to pay for regional economic development and capital improvements in the downtown area.

Desire for the council to follow the policy is the reason only planning costs, and not construction costs, for some longer-term projects to be funded with casino revenue included in the city's five-year capital improvements program recently were approved by the council by passing a resolution, Voss said.

"I think we should be much slower and much more deliberate in making these decisions," Voss said. "We don't have a crisis that we are trying to fix right now, so why do we have to hurry through this and move onto other things?"

Voss said there is a need for the council to have the spending plan for casino revenue under close control so precedent is not set.

"If we approved all of the capital improvements program now, and those projects are in there for a certain dollar amount, then we've told the public that we are going to fund them, regardless of the cost," Voss said. "I don't think we ought to be saying that we are going to do that regardless of what it's going to cost. Instead, it first needs to become a discussion point to compete with other needs in the community, and we need to say, 'what can we afford?'"

One project proposed for casino revenue funding that had planning and construction costs included in the capital improvements program was a $1.15 million project to add lighting and replace aging wiring and fixtures in the downtown area. The project was identified and endorsed as a top priority by the downtown revitalization organization Old Town Cape. The organization said the project should be paid for through multiple years of revenue from the Riverfront Development Fund, but only the $150,000 planning cost for the project was approved March 18 by the council for inclusion in the capital improvements program.

"I think it's a great project," Councilman Mark Lanzotti said to a representative of Old Town Cape and city staff during the meeting. "Later on, bring it up, propose it, and I think you will probably be wildly successful."

But Lanzotti and other council members, apart from Meg Davis, would not approve including the construction cost in the capital improvements program when the exact amount of revenue the casino will provide remains uncertain.

Davis did not return a call seeking comment after a message was left Saturday on her cellphone.

Kent Zickfield, who owns Zickfield Jewelry at 29 N. Main Street in downtown Cape Girardeau and serves on Old Town Cape's board of directors, said the lighting project makes sense as a first to be paid for with casino revenue. New sidewalks for downtown also are planned within the next few years, and the underground wiring that needs to be replaced would need to go in before or at the same time the sidewalks are built, Zickfield said. He also said downtown business owners are looking forward to having new, brighter lighting.

"There's a lot of activity down here at night, and we want people to be comfortable, so we are going to push for it to be a very well-lit area," Zickfield said.

While the council did not give the go-ahead for the lighting, Zickfield said he believes the project still will happen, and is glad the council is given thorough consideration to project costs.

"I think you should take your time and study things closely before you jump in and start spending," he said. "Just because you have money in your pocket doesn't mean you have to spend it. Create an overall plan, prioritize the most pressing needs and work from that plan. Use the money to address those needs as the money comes in."

Voss said he does not intend for the council to have any further discussion about how future casino revenue should be spent until mid-July, when the city will be able to see if the $2.2 million already committed comes through as predicted.

The council on March 18 did commit to using casino revenue for the planning and installation costs of a $1.2 million sewer system on land the city recently purchased to form a business park. Only planning costs were left in the program for several other proposed projects, including installation of 200 new streetlights throughout the city, a new police station and improvements to a transfer station.

Voss pointed out the council already is using its long-term funding policy with the innovation fund by purchasing a software system that will save money in operating costs, allow more efficient use of employee time and better customer service. An electronic ticketing system also has been purchased for use by the police department, and the legacy endowment fund is an area for which the city is putting aside money that will generate interest, Voss said.

From now on, council members say they'll continue to move away from its initial spending strategy.

"I think we'll have a completely different approach to it," Schneider said. "I just hope all that we do will be a benefit to Cape Girardeau and all the citizens. That's really what we want to happen."

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