La Center council

La Center city councilors deliberate during a 2016 meeting. The council recently approved its 2018 city budget that uses past years surpluses to counter lost revenues from gambling taxes.

File photo

Following a year of financial uncertainty with the opening of ilani Casino Resort, the city of La Center has approved a budget for 2018 that dips into city reserves but allows for several significant expenditures in public safety, economic development and utilities among others.

The city’s budget for this year was approved unanimously by La Center City Council during their Dec. 13 meeting. Several key expenditures were highlighted at the meeting by La Center Finance Director Suzanne Levis. 

Chief among them was full funding of an additional police officer position with the city, as well as going to two part-time public works maintenance positions instead of one full-time. Levis also mentioned the budget provided for a new stormwater utility, economic development at the Interstate 5 junction and Timmen Road, repayment of loans from the sewer utility to the general fund and a commitment to work with the cardroom industry as it adjusts to competition. 

With all of the expenditures the city was still able to not increase the sewer utility rate, Levis added.

In a letter submitted as part of council documents, Mayor Greg Thornton laid out the state of affairs, touting a fiscally conservative approach for 2017’s budget that led to a general fund surplus by the end of the year.

That surplus, expected to be in excess of $300,000 according to Thornton’s letter, was delivered in spite of the closure of the New Phoenix Casino in March, leaving only two cardrooms in the city. The mayor explained that tax revenue collected from the cardrooms made the majority of general fund revenue at about 55 percent.

The closure of the New Phoenix Casino came weeks before ilani Casino Resort opened across I-5 from the city. 

Even with apparent pressure from ilani, La Center was not devastated by the opening of competition. That said, Thornton admonished that “significant uncertainty remains for 2018,” with lower revenues and higher operating costs for the two remaining gambling centers in the city. Although projected revenues from cardrooms was higher than a year before, 2018’s expected rate of $1.6 million was still about half what the revenue had been in 2016.

“Even with the expected decline, gambling taxes paid by the local card rooms are expected to make up 46 percent of our general fund revenue in 2018 — down from 69 percent several years ago,” Thornton wrote. 

Other than cardrooms he also touched on development with an expected 40 new home starts in the city in 2018.

With all that uncertainty the city’s plan was to use surpluses from the past two years to balance the budget, Thornton wrote, hence the dip into reserves. According to a budget summary presented to the council the overall drop in total funds will be about $480,000 with about $380,000 coming from the general fund. This would drop that fund’s balance to about $1.5 million of the city’s total $13.4 million in reserves.

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