Central City neutral in Free-Play Gaming tax issue

Too many concerns prevent Council from supporting controversial proposal

By David Josselyn

Work Session

The Central City Council met with Staff on May 16, 2017 at 6:04 pm for a work session prior to the regular council meeting. The topics of conversation were the Free-Play Gaming Tax Proposal and extending the marijuana licensing moratorium.

Manager Miera talked about the marijuana licensing reporting on the revenue since the sales tax went into effect and there has been a 26% increase in revenue between January through April 2016 compared to January through April 2017 in locally generated taxes. The comparison data is between four total licensees, but they are not the same four in 2016 as they are in 2017. The current year holds five licensees, but those numbers would be an unbalanced comparison and so are not reflected in the 26%.

Manager Miera also reviewed the Free-Play Gaming Tax Proposal by the Gaming Association. The City was asked in April to submit a letter in support of the measure and the Council wanted to hear from several of the gaming establishments before giving their support. Miera presented some statistical data from around the country and presented a model representing a 3.5% increase in revenues that would trigger tax rebates for the participating casinos and other entities. The statistical model presented made it evident that should the proposal pass and should revenues increase as hoped, the City of Black Hawk and Gilpin County would also see an increase in tax revenues whereas the City of Central and City of Cripple Creek would suffer a loss of up to 26% of tax revenue depending on the amount of increase. Miera made it clear that the model is in no way a prediction of what might happen, but is a probable scenario only. Manager Miera gave the Council three options; to support the proposal as is, to offer conditional support expressing concerns, or to oppose the proposal in its entirety.

Alderman Aiken argued that the whole concept is a fallacy because people will travel regardless of the free-play offerings. Comparing it to tourism dollars he said “it would be like Colorado saying too many of our residents are spending money outside the state” so the State would offer rebates for people to stay here. People will travel and they will spend money wherever they go.

Mickey Rosenbaum, General Manager of Century Casino, addressed the Council. Rosenbaum sits on the Gaming Association board and stated the intent of the proposal is not “to build a wall around Colorado and prevent people from leaving,” but to create an opportunity for more revenue by using promotional materials to market to our players. “We feel this is a way to grow our business.”

Alderwoman Laratta expressed her “expert opinion as a gambler” that people will gamble where they feel comfortable and she would stay at the same place regardless of the coupons. Alderman Aiken argued that as an ex-gambler, he would gamble at whichever place he got the most offers.

Joe Behm addressed the council representing Gregory Gaming, a John Zemple company, and said that cash coupons are more desirable by players and so casinos will continue to support that kind of promotion even though they “cash and dash.” He recommended the Council either support or conditionally support the proposal.

Jeff Hentschel, part owner of Easy Street and Famous Bonanza, spoke opposition to the proposal. They (Easy Street and Famous Bonanza) oppose it because “they would be left out” and it would put them at a competitive disadvantage. “I don’t think any legislative body has any business making a ruling on a marketing strategy,” said Hentschel. “We won’t change what we do.”

In the interest of keeping things on track, Attorney McAskin recommended that the Mayor convene the regular meeting and they can hold additional comment during public forum considering it was already 15 minutes past the posted start time.

Regular Council Meeting

The Central City Regular Council Meeting of Tuesday, May 16, convened at 7:16pm in City Hall Council Chambers. Council members; Mary Bell, Jeff Aiken, Judy Laratta, Shirley Voorhies, and Mayor Kathy Heider were present. In attendance for Staff were City Clerk Reba Bechtel, City Attorney Marcus McAskin, Finance Director Abigail Adame, City Manager Daniel Miera, Community Development Director Ray Rears, Public Works Director Sam Hoover, Utilities Director Jason Nelson, Fire Chief Gary Allen, and County Sheriff Captain Tom Ihme.

Mayor Heider led the Pledge of Allegiance and then asked for any amendments or additions to the evening’s agenda. There were no additions or amendments to the agenda.

Consent Agenda

The Mayor called for a motion to approve the consent agenda which consisted of the minutes from the May 16 meeting and regular bill lists through May 31. Alderwoman Voorhies moved to approve the Consent Agenda and was seconded by Alderwoman Laratta. The motion passed unanimously.

Public Forum

Mayor Heider opened the floor to the public for anyone who wished to speak to a topic on that night’s agenda. No one chose to address the Council further on the Free-Play Gaming Tax proposal, and so Manager Miera asked Council for direction regarding the requested letter of support. The Council directed the City Manager to draft a letter of conditional support outlining the concerns expressed tonight by both Council members, casino owners, and the public.

Don Boring, owner of Annie Oakley’s Emporium, chose to address the Council regarding the extension of suspension on new marijuana licenses. Boring quoted figures from his own business stating that their revenue growth between January 1, 2016 and June 6, 2016 was 18%; however, revenue growth for the exact same time period in 2017 showed only 4% growth. Boring attributes the difference several factors. First, in 2016, there was still a curiosity factor that brought more people in to try something that had been illegal. The second is that there are seven states with legal retail marijuana in 2017. The third being that with more licensed retail units in Central in 2017, the business is stretched thinner. Boring also said he talked to the owner of Green Grass today and his numbers match Don’s.

Water Source Structure Renovation

Mayor Heider opened a public hearing regarding the repairs planned for the structures diverting water for the City system. A project is underway to modernize the current structures and get them compliant to modern water rights code. The project requires a public hearing after they complete a series of studies before beginning permitting and construction phases. A 2015 survey deemed the intake structures inadequate due to age, failures, shifting, and other reasons, and recommended a replacement plan which would cost about $750,000 (a worst case scenario cost). With available grants, the cost could go down considerably. The City established a new water rate system which took into account the cost of replacing the source water structures to comply with State and Federal standards. The City must add metering to each intake to hold their water rights per the water code. Pictures shown during the meeting revealed the aged structures to be deteriorating. No decision was required of the Council as this was purely an informative public hearing allowing for public input. No one chose to address the Council regarding the project.

Green Enterprise Still on Hold

Attorney McAskin introduced the first reading of Ordinance 17-05 which would extend a 180-day moratorium on marijuana licensing imposed with Ordinance 16-07 an additional five months. The current extension expires June 30, 2017 and the new extension would expire November 30, 2017.

Alderman Aiken commented that it’s good to have the extension so that they have enough time to make an informed decision.

Alderwoman Voorhies moved to approve Ordinance 17-05 and set the second reading on a special meeting Thursday, June 29, 2017 at 7:00pm, and was seconded by Alderman Aiken. The motion passed unanimously.

Council Comments

Alderwoman Voorhies invited everyone to the annual Madame Lou Bunch day on June 17th.

Alderwoman Laratta stated in reference to the recent cleanup day that the City looks beautiful.

Public Forum

Mayor Heider opened the floor to the public for anyone who wished to speak to the council on any items not on the agenda.

Barbara Thielemann addressed the council regarding the annual clean up day proclaiming it a success even with the change of date due to snow conditions.

Resident Mike Schick next addressed the council thanking them for the fence project around the cemeteries. “It has worked out really good” and he has already seen a reduction in vandalism and illegal motorized vehicle operation.

Mark your calendars

The Council moved to go into Executive Session at 7:56pm to discuss legal questions and instruct negotiators regarding request for payment under terms of Intergovernmental Agreement for conduct of the 2014 Coordinated Election. The next regular Council Meeting will be Thursday, June 29, 2017.

About Aaron Storms

Publisher & Managing Editor Weekly Register-Call
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