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CL-2539 New Business   Item #: H.       
Meeting Date: 05/04/2021  
Subject:    Authorization of the Transfer of Casino funds for Various Projects
From: Cynthia Thomasson

COUNCIL ACTION
Business Meeting:     05/04/2021
SUMMARY
An appropriation ordinance was passed in December 2020 for the purpose of appropriating funds from Caesars Virginia, LLC in the amount of $15,000,000.  Of these funds, $2,900,000 was appropriated for the construction of a new police station.  The remaining $12,100,000 was appropriated to a Capital Project holding account to be transferred as approved by City Council for specific projects or operations.  The Fiscal Year 2022 Proposed Budget includes use of a portion of these funds as outlined in the attached resolution.
BACKGROUND
As a result of voter approval by referendum for the operation of a casino to be located in Danville, an award was made to Caesars Virginia, LLC to construct and operate a casino at the Schoolfield site. The approved development agreement with Caesars called for a $15 million upfront payment to the City upon passage of a casino gaming referendum.  The City Council-adopted appropriation ordinance accepting these funds states that future spending of these funds must be separately approved by City Council by resolution.

During an all-day City Council Work Session held in February, the City Council received a report from Davenport and Associates regarding a fiscally-conservative financing strategy that would enable the City to pay for much-needed investments in the community using current and anticipated gaming revenues.  This included the use of the remainder of the $15 million upfront payment and the anticipation that there would be a guaranteed minimum of $5 million per year in gaming tax revenue starting in FY 2024. Davenport and Associates recommended the use of Bond Anticipation Notes in combination with the upfront funds to pay for projects.
RECOMMENDATION
It is recommended that City Council approve the attached resolution authorizing the transfer of funds to projects as outlined in the resolution.

Attachments
Resolution


    

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