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Pittsburgh wants Rivers Casino to volunteer $10M payment

Bob Bauder
| Wednesday, Oct. 5, 2016, 6:33 p.m.
A man walks across the street in front of the Rivers Casino on the North Side on Sunday, April 14, 2013.
Justin Merriman | Tribune-Review
A man walks across the street in front of the Rivers Casino on the North Side on Sunday, April 14, 2013.
A dealer waits for players at a Let it Ride table inside Rivers Casino on Monday, July 21, 2014.
Guy Wathen | TRIB TOTAL MEDIA
A dealer waits for players at a Let it Ride table inside Rivers Casino on Monday, July 21, 2014.
The Drum Bar inside Rivers Casino on Monday, July 21, 2014.
Guy Wathen | TRIB TOTAL MEDIA
The Drum Bar inside Rivers Casino on Monday, July 21, 2014.

Pittsburgh officials said Wednesday they want Rivers Casino to pay the city $10 million a year — voluntarily — in the wake of a recent court ruling that jeopardizes the fee casinos pay their host municipalities.

Pittsburgh Finance Director Paul Leger said after a meeting with the Intergovernmental Cooperation Authority, one of Pittsburgh's state-appointed financial overseers, that he is confident Rivers will comply with the request.

The ICA's board approved Pittsburgh's proposed $539 million operating budget contingent upon the city verifying within 120 days that it will receive the $10 million from Rivers Casino.

Board members Michael Danovitz and Nick Varischetti were absent.

“They expected to pay this when they opened the casino,” Leger said. “There has been no resistance from the casino. Our discussions have been very cordial.”

Rivers spokesman Jack Horner confirmed the casino is considering the city's request.

“Discussions are under way, and options are being considered,” he said in an email.

The Pennsylvania Supreme Court last week struck down the “local host fee,” ruling that a “local share assessment” is unconstitutional because it treats the state's 12 casinos unequally. Justices gave lawmakers four months to amend the law.

Under the state's 2004 casino law, casinos must pay at least 4 percent of gross slot machine gambling revenue to their host communities. That includes 2 percent to counties and 2 percent or $10 million, whichever is greater, to municipalities.

The local share in Pittsburgh's case has defaulted to $10 million a year, and the city budgeted for that amount in 2017.

ICA board members voted to approve the budget.

“We didn't want to disapprove it because we are very confident in the numbers now,” said Reynolds “Renny” Clark, the authority's interim executive director. Clark is not a voting member.

Relations between Mayor Bill Peduto's administration and the ICA have improved compared to prior years. The previous ICA board rejected city budgets in 2014 and 2015 and withheld about $20 million in gambling tax revenue.

New board members released those funds and on Wednesday approved a final payment of about $68,000.

“The ICA is not sitting on any gaming revenue,” Clark said.

The board transferred about $1.3 million in gambling tax revenue to the city for 2016, requiring that money to be used for capital improvements to city buildings and grounds.

Clark said the authority is operating in the current fiscal year with a $300,000 operating deficit, mainly because of legal fees stemming from a lawsuit Pittsburgh filed against the ICA last year in a bid to obtain the gambling tax revenue.

“There is a gap in the budget, and we are working with the city and (state) to close that gap,” ICA Chairwoman BJ Leber said.

Bob Bauder is a Tribune-Review staff writer. Reach him at 412-765-2312 or bbauder@tribweb.com.

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