Dubuque Racing Association - Request to Purchase Slot MachinesCITY OF DUBUQUE, IOWA
MEMORANDUM
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Dubuque Racing Association
The Dubuque Racing Association is requesting approval to spend $122,000 in DRA
reserve funds to purchase fourteen video reel slot machines. Using this source for
this mid -year unanticipated expenditure avoids using annual operating funds. The
use of operating funds would decrease the amount of the annual distribution to
charities and the City.
I respectfully recommend Mayor and City Council approval of this request.
MCVM /j
Attachment
- ��, ice
M ichael C. Van Milligen
cc: Barry Lindahl, Corporation Counsel
Tim Moerman, Assistant City Manager
Bruce Wentworth, General manager, Dubuque Racing Association
July 29, 1999
July 20, 1999
DRA Reserve Funds:
Depreciation & Improvement Fund:
DRA Oneratine Cash:
I respectfully request that the City
schedule.
Sincerely,
Bruce Wentworth
General Manager
Dubuque Racing Association
BW/aw
llhiiUQ1
CASINO
Honorable Mayor and City Council
Dubuque City Hall
50 West 13 Street
Dubuque, IA 52001 -4864
Dear Honorable Mayor and City Council:
At the monthly Dubuque Racing Association meeting held on July 20, 1999, the DRA Board of
Directors approved a 3 amendment to the 1999 DRA CIP Schedule, to allow for the purchase of
fourteen video reel slot machines at a cost not to exceed $122,000, with the source being DRA
Reserve Funds - Contingency.
Provisions within the DRA/City Lease require City concurrence and approval for certain projects
involving DRA Reserve Funds.
The 1999 Original and Amended Schedules list the following total expenditures. Amendment #1
was previously approved by the City Council for a racetrack surface replacement project in the
amount of $38,875, which exceeded original cost projections by $11,373. Amendment #2 was
previously approved by the City Council for the purchase of office furniture for a total of
$20,000.
Amendment #3 is the purchase of fourteen slot machines not to exceed $122,000.
Ori¢inal Amendment #1
$1,967,759 $1,979,134
$ 444,855 $ 444,855
$ 429.383 $ 429,383
$2,841,997 $2,853,372
Amendment #2
$1,999,134
$ 444,855
$ 429,383
$2,873,372
Amendment #3
$2,121,134
$ 444,855
$ 429,383,
$2,995,372
Council concur with this 3` amendment to the 1999 DRA CIP
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P.O. Box 3190 • 1855 Greyhound Park Drive • Dubuque, Iowa 52004 -3190 • 319- 582 -3647 800-373-3647
7
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DUBUQUE RACING ASSOCIATION
Date: July 16, 1999
To: DRA Board of Directors
From: Roger Hoeger
Issue:
Discussion:
Amending the 1999 CIP Schedule to Purchase 14 Slot
Machines Using Funds from the DRA Reserve Fund.
(The total cost is $121,430 based on quoted prices
from Williams and Aristocrat, exclusive of cash
discounts.)
Recommendation:
The Executive Committee recommends to the Board of Directors the
purchase of the 14 slot machines using funds from the DRA Reserve Fund.
Impact on Fiscal 1999 Operations
The net positive cash flow increase in Fiscal 1999 is projected to be
$217,293, which is based on the following assumptions.
• Fourteen replacement machines operational beginning September 1, 1999
for a total of 91 days in Fiscal 1999.
• Net increase in Win per machine per day of $275.14, based on present
machine performance of similar machines at DGP & C, less win of
machines being replaced.
• Net increase in direct costs comprised of gaming tax, rent, and purse
supplement of $104.58 per machine per day.
• No provision for any positive or negative impacts on existing machines.
PO Box 3190 • DUBUQUE, IA 52004 -3190 • PHONE 319.582.3647 • FAX 319 582.9074
DRA's potential sources of funding capital acquisitions are as follows:
• Operating Funds
Using these funds would decrease distributions. Additionally, the Board
voted in favor of funding future CIP acquisitions from non - operating funds
(i.e. Depreciation and Improvement Fund or the DRA Reserve Fund)
effective in the year 2000.
• Depreciation & Improvement Fund
The purpose of this fund is to pay extraordinary costs of maintenance and/or
repair of the dog track complex or for the replacement of major equipment,
which are of a long -term character (minimum of a ten -year life).
Additionally, with the currently approved expenditures, the $250,000
minimum balance requirement would not be met if further material
expenditures were expended from the D & I Fund.
• Machine Lease
This option is not a financially attractive, since the payments would exceed
an outright purchase, even when opportunity costs are considered.
• DRA Reserve Fund
Staff recommended this option and the Executive Committee concurred to
fund the slot machine purchase from the DRA Reserve Fund. There is a
projected balance of $1,290,307 after deducting the CIP projects to be
funded in Fiscal 1999 from the Reserve Fund. (The Fiscal 1999 CIP
projects, which are paid for by this fund, are not expected to exceed budget
as of this date.) The Reserve Fund balance is comprised of the following
categories and the associated balances:
1 Restricted Funds
1 Restricted Funds
Restricted Funds
1 Restricted Funds
1 Total
— Operating
— Contingency
— CIP
— Debt Reserve
$668,289 1
$622,018 1
$01
$01
51,290,307 1
If you have any questions, please contact Bruce, Brian Rakestraw or me.
July 20, 1999
Honorable Mayor and City Council
Dubuque City Hall
50 West 13 Street
Dubuque, IA 52001 -4864
Dear Honorable Mayor and City Council:
J!U
CASINO
At the monthly Dubuque Racing Association meeting held on July 20, 1999, the DRA Board of
Directors approved a 3 amendment to the 1999 DRA CIP Schedule, to allow for the purchase of
fourteen video reel slot machines at a cost not to exceed $122,000, with the source being DRA
Reserve Funds - Contingency.
Provisions within the DRA/City Lease require City concurrence and approval for certain projects
involving DRA Reserve Funds.
The 1999 Original and Amended Schedules list the following total expenditures. Amendment #1
was previously approved by the City Council for a racetrack surface replacement project in the
amount of $38,875, which exceeded original cost projections by $11,373. Amendment #2 was
previously approved by the City Council for the purchase of office furniture for a total of
$20,000.
Amendment #3 is the purchase of fourteen slot machines not to exceed $122,000.
DRA Reserve Funds:
Depreciation & Improvement Fund:
DRA Oneratine Cash.
I respectfully request that the City
schedule.
Sincerely,
s
Bruce Wentworth
General Manager
Dubuque Racing Association
BW/aw
Original
$1,967,759
$ 444,855
$ 429.383
$2,841,997
Amendment #1
$1,979,134
$ 444,855
$ 429.383
$2,853,372
Amendment #2
$1,999,134
$ 444,855
$ 429383
$2,873,372
Amendment #3
$2,121,134
$ 444,855
$ 429.383
$2,995,372
Council concur with this 3 amendment to the 1999 DRA CIP
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No
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P.O. Box 3190 • 1855 Greyhound Park Drive • Dubuque, Iowa 52004 -3190 • 319 - 582 -36-17 800 -373 -3647
0
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0
Date: July 16, 1999
To: DRA Board of Directors
From: Roger Hoeger
Issue:
Discussion:
DRA
DUBUQUE RACING ASSOCIATION
Amending the 1999 CIP Schedule to Purchase 14 Slot
Machines Using Funds from the DRA Reserve Fund.
(The total cost is $121,430 based on quoted prices
from Williams and Aristocrat, exclusive of cash
discounts.)
Recommendation:
The Executive Committee recommends to the Board of Directors the
purchase of the 14 slot machines using funds from the DRA Reserve Fund.
Impact on Fiscal 1999 Operations
The net positive cash flow increase in Fiscal 1999 is projected to be
$217,293, which is based on the following assumptions.
• Fourteen replacement machines operational beginning September 1, 1999
for a total of 91 days in Fiscal 1999.
• Net increase in Win per machine per day of $275.14, based on present
machine performance of similar machines at DGP & C, less win of
machines being replaced.
• Net increase in direct costs comprised of gaming tax, rent, and purse
supplement of $104.58 per machine per day.
• No provision for any positive or negative impacts on existing machines.
P.O. Box 3190 • DUBUQUE, IA 52004-3190 • PHONE 319.582.3647 • Fax 319.582.9074
DRA's potential sources of funding capital acquisitions are as follows:
• Operating Funds
Using these funds would decrease distributions. Additionally, the Board
voted in favor of funding future CIP acquisitions from non - operating funds
(i.e. Depreciation and Improvement Fund or the DRA Reserve Fund)
effective in the year 2000.
• Depreciation & Improvement Fund
The purpose of this fund is to pay extraordinary costs of maintenance and/or
repair of the dog track complex or for the replacement of major equipment,
which are of a long -term character (minimum of a ten -year life).
Additionally, with the currently approved expenditures, the $250,000
minimum balance requirement would not be met if further material
expenditures were expended from the D & I Fund.
• Machine Lease
This option is not a financially attractive, since the payments would exceed
an outright purchase, even when opportunity costs are considered.
• DRA Reserve Fund
Staff recommended this option and the Executive Committee concurred to
fund the slot machine purchase from the DRA Reserve Fund. There is a
projected balance of $1,290,307 after deducting the CIP projects to be
funded in Fiscal 1999 from the Reserve Fund. (The Fiscal 1999 CIP
projects, which are paid for by this fund, are not expected to exceed budget
as of this date.) The Reserve Fund balance is comprised of the following
categories and the associated balances:
•
Restricted Funds
Restricted Funds
Restricted Funds
Restricted Funds
Total
— Operating
— Contingency
— CIP
— Debt Reserve
$668,289 I
$622,018 1
$0
$0
S1,290,3071
If you have any questions, please contact Bruce, Brian Rakestraw or me.