Elk Grove City Council to vote on agreement with Wilton Rancheria Tribe
At the Elk Grove City Council meeting on Wednesday, September 28, the city council will vote on the proposed MOU (memorandum of understanding) between the city and the Wilton Rancheria Tribe regarding the proposed casino near the future outlet center. Because the casino would be on what is considered sovereign land, the tribe will not pay taxes and fees that other businesses would have to pay. This would lead to a loss of revenue for the city from sales and property taxes. In exchange for that, the city and the tribe have negotiated an MOU that will replace the lost revenue to the city and will pay for expenses expected to be incurred for the casino such as police and fire services, as well as traffic. The total amount paid to the city over 20 years would be $131 million. The Elk Grove City Council does not have the right to approve or deny the casino project itself. The BIA (Bureau of Indian Affairs)
The full text of the MOU can be found on the city website
Highlights of the agreement:
- Roadway Improvements – $10,469,711 for Citywide roadway improvements including but not limited to: Kammerer Road widening and extension, Lotz Parkway, Whitelock Interchange, Grant Line Road, traffic signals, and intersection improvements. This amount was calculated based on the traffic study and trip generation from the EIS, applied to the City’s existing roadway impact fee program. Fifteen percent of the total payment is considered an additional contribution above what is required to mitigate for traffic impacts of the project.
- Regional Roadway Contribution – $1,824,028 for improvements to regional or shared roadways with the County, including Kammerer Road and Grant Line Road.
- Police equipment – $250,000 for Police vehicles and equipment.
- Community facilities – $2,000,000 for the construction of other community facilities at the City’s discretion. This payment is not required for mitigation of the project, but is an additional voluntary payment of the Tribe to the community. Payment of this amount is dependent on the Tribe receiving a credit from the State of California through the State Gaming Compact.
The non-recurring payments total $14,543,739.
Recurring Mitigation Payments
Recurring mitigation payments would be made on a quarterly basis beginning one year after Facility opening, and continue in perpetuity. Recurring payments are summarized below:
- Police and Code Enforcement services – $1,500,000 annually with a 2% annual inflationary adjustment for Police, Code Enforcement and related City service impacts. These payments are meant to offset staffing and service impacts on the City associated with the Facility. Sixty percent of the total payments are considered direct mitigation to address both on-reservation and off-reservation potential crime impacts, while the remaining forty percent is considered an additional contribution made for the purpose of providing additional and improved services to the residents of the City. The total payments by the Tribe for these services over the first twenty years of the MOU are calculated to be approximately $36,446,055.
- Roadway maintenance – $500,000 annually with a 2% inflationary adjustment for roadway maintenance purposes. The total roadway maintenance payments over twenty years are calculated to be approximately $12,148,685
- General mitigation – City tax revenue in-lieu – As trust land, the Facility would not be subject to any form of local taxation. The payments shown in the following table are meant to offset the loss of tax revenue and pay for any other community impacts not addressed above.
- Year 1 $2,000,000
- Year 2 $2,150,000
- Year 3 $2,350,000
- Year 4 $2,500,000
- Years 5 and beyond Increased 2% per year from the previous year. The total value of these general mitigation payments over twenty years is approximately $56,530,177.
- Elk Grove Unified School District – $400,000 annually with a 2% inflationary adjustment to the Elk Grove Unified School District as property tax in-lieu.
- Charitable organization – $100,000 annually with a 2% inflationary adjustment to a charitable organization(s) that benefits the Elk Grove community.
The combined recurring payments contained in the MOU in year one total $4,500,000. Staff estimates that the total annual tax revenue that could be generated from a similar project within the City limits would be between $2 million and $2.4 million. Therefore, the proposed MOU would provide more financial resources to the community than would typically be generated by tax revenues from a similar private project. The total recurring payments over twenty years are estimated to be $117,273,602.
Agreement Does Not Approve the Entertainment Facility or Casino As previously noted, the proposed MOU does not approve a project nor does it facilitate the construction of the Facility. However, it is a binding obligation between the Tribe and the City to provide funding for impacts related to the Facility in the event that it is ultimately approved by the United States government and the State of California.
The following steps outline the required approval process for the Project:
1. The EIS must be approved by the BIA through the Secretary of the Interior. As part of the approval process, the land would be taken into trust for the development of the Facility by the Tribe.
2. In order to offer gambling as part of the Facility, a state gaming compact must be approved by the Governor and ratified by the California State Legislature.
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