The upcoming fiscal year – 2022-23 – marks the last time the town of Danville will have a budget without casino revenue flowing into its coffers.
Starting in 2023-24, city officials must decide how to spend that money after Caesars Virginia Casino in Schoolfield begins operating in late 2023.
The $500 million casino is expected to generate about $38 million in annual revenue for the city by its third year of operation. But that number is only a projection and is difficult to determine with certainty until Caesars Virginia is operational, said Danville City Manager Ken Larking.
“We won’t know for sure until it actually opens and then we see what it actually looks like,” he said.
That projected $38 million would include $12 million in annual payment from Caesars, $22 million in annual gaming tax revenue, and $4.2 million in other tax revenue, including sales taxes, l accommodation, meals and property.
As for how the city will spend that money, officials will use citizen feedback gathered by the Invest in Danville committee that has been temporarily formed to consider how to invest casino revenue.
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An interim report from the committee, along with a more comprehensive report completed in December 2020 by financial advisory firm PFM, found that public education and economic development were top priorities identified by citizens for investment.
This is followed by public safety, infrastructure, community health, quality housing, financial stability and quality of life amenities.
When asked how he would like the money to be spent, Mayor Alonzo Jones said the city should follow the committee’s suggestions and findings.
“My thing would be to track exactly where citizens would like to see that money go,” Jones said Friday.
Deputy City Manager Earl Reynolds agreed.
“That’s what the community wants to see,” Reynolds said. “Our objective [with the committee and report] was to try to meet the priorities of the community.
Reynolds, along with Larking, assistant city manager Amanda Paez, chief financial officer Michael Adkins, budget manager Henrietta Weaver and human resources manager Sara Weller, all play a role in developing the annual budget.
Creating a budget involves looking at trends in city revenue from previous years and the current year, collecting information from city departments on how much money they need to continue providing services, reviewing the costs of planned special projects and determining whether they are helpful in achieving Danville’s objective. mission, Larking said.
“We are looking at all of these expenses,” he said. “You do your best to meet the requests provided by the departments.”
Councilman Sherman Saunders said he would like casino revenue to help the city continue to build on its three priorities: improving education, reducing crime and developing Danville.
“Danville City Council continues to work extremely hard on these priorities,” Saunders said Friday.
After pointing to the reduction in crime in the town in recent years, Saunders added that Danville was growing in population and in the number of businesses moving into the area.
“We must have a skilled workforce to meet current and future needs,” he said, adding that quality infrastructure must be considered to accommodate a growing city.
Caesars Virginia’s plans include a $500 million resort casino with 500 hotel rooms inspired by the local landscape. There will also be a spa, swimming pool and fitness center.
The casino will feature more than 1,400 slots and table games, Caesars Sportsbook and WSOP Poker Room, a live poker room bearing the name and spirit of the legendary World Series of Poker with 25 tables, Caesars Entertainment said.
Meeting and convention space will total 40,000 square feet with an entertainment room that can accommodate up to 2,500 guests. There will also be restaurants and bars. Nine hundred construction jobs will be filled as well as 1,300 operating jobs.
Larking stressed that casino revenues should not be spent on routine operational costs to provide city services, but on one-time expenses, including infrastructure improvements; quality of life amenities such as improvements to parks and other parks and recreation facilities; tourist assets; and economic development projects.
Larking would also like to see improved housing stock for households at all income levels.
With all the extra money coming from the casino, budgeting will be different.
Instead of looking at steady revenues hovering around plus or minus 1%, city officials will be dealing with much higher margins, Larking said. Even without the casino, the city has seen revenue growth of 3 to 4 percent over the past two years due to economic development and an improving economy, he said.
As an independent city, “we have to be self-sufficient,” Saunders said.
“Extremely wise investments will lead to a prosperous and continued municipality,” Saunders said. “Hopefully with additional revenue, the city’s future will continue to be bright.”