Last month not only resulted in Thanksgiving turkey leftovers, but some financial leftovers from Bettendorf's fiscal 2012-13 budget year which ended June 30.
City Finance Director Carol Barnes walked the city council through the year-end financials at its November meeting and a few items deserve a second look to compare the "hoped for" of last year's budget projections and the cold reality of the end-of-year numbers.
• Despite five years' of significant gambling revenue declines, last year's budget projected an increase in gambling dollars for city coffers. That turned out to be a bad bet.
The city received just $1.58 million in gambling revenue last year, a nearly 6 percent drop from the previous year. Gambling revenue in fiscal 2012-13 was the lowest amount since 1998 when the city take was $1.4 million.
Gambling revenues have fallen more than 30 percent since 2004 when the city's cut from the riverboat gambling hit a high of $2.27 million. The fall off also is noteworthy because it came despite added hotels rooms (to attract out-of-town gamblers) and the addition of a city financed entertainment facility (QC Waterfront Convention Center) that was seen as a way to attract more tourists to boost gambling revenues.
• Despite popular new exhibits (at a cost of $1.3 million from the city's capital improvement fund) and a significant uptick in visitors, the city owned Family Museum posted another net operating loss of more than $1 million. The museum did managed to pay 50 percent of the cost of operating the facility, but still needed $758,000 from the city's share of gambling money and $150,000 from the city's general fund to balance the budget.
Last year's budget estimated only $647,000 in gambling revenue would need to balance the Family Museum budget, and that the estimated annual subsidies of the facility from gambling dollars would fall to $600,000 annually for the following four years.
The year-end financials shown the city council now estimate the museum will need $707,000 from gambling funds in the coming year, increasing to $735,000 in fiscal 2014-15 and $750,000 annually for the next three years.
Finance Director Barnes was upbeat in her assessment of the Family Museum's higher visitor numbers and its ability to generate increased attendance and earn just 50 percent of the revenue needed to operate the facility.
The museum is one of the city's "enterprise funds" which are defined by the city as "those operations financed and operated in a manner similar to private business, or where the council has decided the determination of revenues earned, costs incurred and/or net income is necessary for management accountability."
The enterprise funds also are those operations for which the city spends the majority of the money it receives each year from casino gambling.
The bottom line for the city's enterprise funds at the end of June was:
- Family Museum, $1.11 million operating loss with user fees paying 50 percent of its budget.
- Palmer Golf Course, $328,000 operating loss with user fees paying 74 percent of its budget.
- Splash Landing, a $291,000 loss with user fees paying 44 percent of its budget.
- Life Fitness Center, $262,000 operating loss with user fees paying 71 percent of its budget.
(The city also classifies the storm water utility, sewer utility and recycling/solid waste as enterprise funds, but charges for each function are not optional, or market-driven, but set by the city council and assessed on all property owners to cover the cost of their operations.)
• Also, for the first time since it opened five years ago, the QC Waterfront Convention Center turned a profit. But that doesn't mean the city will be getting a cut of the convention center revenues any time soon. The waterfront center, operated by the Isle of Capri Casino, reported a $223,650 profit at the end of June. But under terms of the city/casino development deal, the casino will only start sharing profits with the city after it earns $7.7 million.
Last year's budget projected a shortfall of $259,000 for the waterfront center. In its first full year of operation, the center had a $276,000 net loss, in fiscal 2010-11 it lost $271,000, and in 2011-12 it had a $260,000 deficit.
Under terms of the city/casino agreement, the Isle of Capri also picks up any deficits in the center's operations.
