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POLICY1 Background: CASE ON EXPENDITURES OF THE CHARITABLE GAMBLING SPECIAL REVENUE FUND //270 By: Ryan Schroeder, City Administrator Pursuant to re~ent ICouncil action, the City's Finance Department has set up a fund within which all receipts of eh~rita[ple gambling proceeds from the 10% of net profits from lawful gambling will be placed. Enaldjsed For your review is that portion of Chapter 349 of State Statutes which deals with this 10% prO~sio~ and that portion of Chapter 349 which deals with expenditure from the fund. For those of }/9u w~ho remember revenue sharing, you may recall that the original intent of revenue sharing was t{5 provide a non-restricted fund to be utilized by cities as they so chose for capital expenditureS, iYo~ will also recall that in reality since there were not any particular strings or rules attached to ti/is r~enue source, many if not all cities towards the end of revenue sharing were using these f~nds ~'~or operating capital. I wholeheartedly believe that one of the reasons for the demise of federal ~'evenue sharing is just,this, that it became operating capital as opposed to the original intended 0'apital purchase fund. I d like to draw your attention to 349.12, subdivision 1 la, including sub~ara~:aph 4 and subparagraph 7. I believe in reading the Statute that these are the only appropri/lte e:kpenditure areas for which money should be spent from the charitable gambling fund. Howav~r, r6, calling revenue sharing and being fearful that if we designate in any on-going way gamblinl~ prdceeds for operational expenses, when and if this revenue source is no longer available to u~, itlMll be more difficult to wean us from that revenue source then if monies were spent entirely ~or Cipital infrastructure or facilities. Recommend~ation: It is the Stall rei[ommendation, pursuant to subdivision 11, subparagraph 7 of 349.12, that proceeds reali:~edihto the charitable gambling special revenue fund are to be expensed exclusively for recreation; .1, community and athletic facilities intended primarily for persons under age 21 provided that: uchl. facilities and activities do not discriminate on the basis of a gender and not for operating equi )mebt, supplies, wages or any other non-capital expenditure. CommiSsion Ac!ion: Motion to rec~omrb, end to City Council to adopt this policy on expenditures of the charitable gambling spec!al re?enue fund//270. Review Cl~e{ckli~;t: Copies also distributed to: City Adminis~tor BC: 04/28/92 Finance Officer