Once Casino Dollars Flow, City Leaders Should Park Dough in Bank, Start Thinking Long-Term

If tens of millions of dollars in casino payments start flowing into the Everett city treasury, how will the city ever say no to a public employee union again?

Likewise, how will the city ever say no to a good, local organization, public or private, that wants a portion of those payments for a worthwhile-but-previously-too-costly project?

And how will the city ever be able to turn down a poor, disabled or disadvantaged local resident who desperately needs assistance, financial and otherwise?  

[The cynical dog in me can’t help but also ask, How will the city prevent an influx of ambulance-chasing attorneys bent on turning every slip and fall on a local sidewalk into the kidnapping of the Lindbergh baby?]

Answer: City leaders should declare from the outset that Everett intends to use its casino windfall solely for capital improvements, strategic investments, such as eliminating the huge unfunded liability in the city employee pension fund, and targeted initiatives in public education, especially in pre-school through third grade, where children are most vulnerable and the payoffs are greatest for professional intervention.

In other words, Everett should tell everybody in town to chill out, this money is not for making us feel good today, it is for making the entire community better over the long haul, as measured by the timelines and tools of historians.  

For the purposes of this blog post, let’s assume that Wynn Resorts will win the competition for the state license to operate a casino in eastern Massachusetts.

Under the host city agreement Wynn recently concluded with the mayor of Everett, Wynn Resorts is obligated to pay the city $30 million on the day it starts constructing a casino on a large Mystic River-front site on lower Broadway/Route 99.

And let’s assume Wynn is ready to break ground a year from now, on May 15, 2014.

No later than 30 days before the groundbreaking, the mayor should announce that he intends to deposit  all but $450,000 (1.5%) of that $30-million-dollar initial payment in a special account and leave it there, untouched, for 18 to 24 months.  (The mayor will have already spoken with members of the City Council and persuaded a majority of them to go along with his don’t-touch approach.)

Further, the mayor should say that he intends to spend that $450,000 slice of the casino pie on just two items:

·         One, advice from a nationally recognized money management expert on how to invest and manage that initial payment from Wynn, and all subsequent payments, so as to achieve the best long-term results; and,

·         Two, an engineering study that would thoroughly evaluate the city’s infrastructure – roads, sidewalks and bridges, water and sewer pipes, parks and playgrounds, school and municipal buildings, etc. – in order to determine the best, most cost effective ways to upgrade and maintain those critical assets over the next 50 to 100 years, while fostering optimal development of the local economy.    

Further, the mayor should announce that he will introduce an ordinance change to establish a permanent casino revenue oversight structure in the city.  The purposes would be to ensure that, when the city spends any of its casino dollars, all laws governing municipal expenditures and procurements were followed, and that all records of those activities were promptly and permanently posted online.

At the apex of the oversight structure, the mayor should signal his intention to appoint a new casino auditor whose salary will be paid entirely by casino dollars.  The casino auditor will be given primary responsibility for: (a) ensuring proper allocation of casino proceeds, (b) periodic reports on all casino-related revenue and spending, and (c) complete transparency of all records pertaining to casino-related income and outgo.

To ensure the independence and integrity of the position, the mayor will stipulate that the casino auditor be a certified public account, a non-resident of Everett, and have no family members currently serving in elective offices in the community.

As an added safeguard, the ordinance change will contain language relative to the appointment and operation of a new, unpaid, five-member, municipal Casino Oversight Board.  The board will assist the casino auditor in the definition and performance of his or her duties, and regularly certify that the casino auditor is doing his/her job with a high degree of integrity and effectiveness.

Appointments to the Casino Oversight Board would be made through several separate and independent pathways. Each of the following would be allowed to appoint a board member: the Attorney General of the Commonwealth, the Inspector General of the Commonwealth, the Mayor of Everett, the Everett City Council, and the Everett School Committee.  Everett residents could serve on the board, but so could out-of-towners. 

The casino auditor will report to the Casino Oversight Board and could be removed from office by the mayor, with the concurrence of a supermajority of the board (4 members).

These are just a few of the ways that a sincere, well intentioned cadre of municipal leaders could deal with the scary challenges and problems of using casino revenue wisely.  No doubt there are many other ways.

But if nothing new is done in this regard, the municipal equivalent of a “lottery winner tragedy” is almost bound to occur.