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How Thompson-Okanagan municipalities are handling loss of gaming revenue

November 27, 2018 - 5:30 PM

KELOWNA - Cities hit hardest by the 29-week strike at Gateway Casinos won’t make up the shortfall by raising taxes, but it was a close call in Kelowna.

Last week, reported that all four Interior cities where workers picketed casinos owned by Gateway lost municipal gaming payments.

Kelowna was impacted the least, being down only $38,000 from $1.2 million. Had that loss been of the same magnitude as Vernon or Penticton, it might have been passed on to taxpayers because Kelowna is the only city of the four that uses gaming payments to fund operations.

“That money goes directly to fund the RCMP,” Kelowna Finance Director Genelle Davidson said. “It reduces the tax demand.”

There is an RCMP reserve fund to cover things like retroactive wage increases. It could have, at least in part, been accessed had the losses been greater.

Revenues in Kamloops dropped by about $200,000 to $520,000 for the first three months of the strike.

“Traditionally that money is used to help support new initiatives for the city,” said Dave Hallinan, Kamloops’ Planning and Procurement Manager. “We look at taking advantage of those funds and being able to utilize them for new things the community might be looking for.”

The money is not used to cover ongoing operating costs, he said.

Theoretically, city council could choose to raise taxes to cover the loss of revenue but it’s more likely, Hallinan said, that some projects just won’t go ahead this year.

Hardest hit of the four cities was Vernon, whose payment was down by about $400,000 to $162,000.

“The casino revenue goes toward funding future capital projects,” wrote Vernon manager of communications Nick Nielsen in an email. “Some capital projects will be impacted and will have to find other funding sources while some projects might need to be delayed. Of course, we were aware of the strike and were able to budget accordingly to account for the loss of revenue.”

The City of Penticton’s payment is down $364,000 to $208,000.

Jim Bauer, Penticton’s chief financial officer, told that most of the gaming funds for his city are earmarked for paying down the debt on the South Okanagan Events Centre. But some have been kept in reserve. Those reserve funds will be used so taxpayers will not be taking a hit.

B.C. Lottery Corporation supplied the figures for the first three months of the strike, which coincided with its fiscal quarter. The final six weeks of the strike were in the current fiscal quarter so won’t be tallied until next year.

To contact a reporter for this story, email Rob Munro or call 250-808-0143 or email the editor. You can also submit photos, videos or news tips to the newsroom and be entered to win a monthly prize draw.

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