Fighting over scraps

Lawyer: Municipalities near agreement on Presque Isle Downs revenue split
By ROBB FREDERICK
Lawyers for Erie County Gaming Revenue Authority, Summit Township and four other municipalities are close to a settlement that could restructure the way grant money from gambling at Presque Isle Downs & Casino is apportioned, negotiators said in court this week.

The agreement would free up $7.4 million in grant money -- funding that was left over after the Gaming Revenue Authority rejected grant applications by townships and volunteer fire departments.


That money needs to be apportioned, said Erie County Judge Michael E. Dunlavey, who met with the negotiators Wednesday.


"We need to get over this hump," Dunlavey said. "The costs, and the delays, already are having an impact."


The Gaming Revenue Authority rejected 26 grant applications earlier this year and in 2009. The lead plaintiff is the Summit Township Industrial and Economic Development Authority. It and the groups that requested the money -- the Perry Hi-Way Hose Co., EmergyCare Inc., the McKean Hose Co. and McKean, Greene and Waterford townships -- appealed, forcing a "de novo" hearing before Dunlavey on Wednesday.


The townships and their legal allies hope to change the way the Gaming Revenue Authority distributes part of the local share of casino slots revenue.


That money, which amounts to $11 million to $12 million annually, is now divided into two buckets, one called "restricted" and one called "unrestricted."


Erie County government administers the unrestricted funds. Much of that has already has been allocated to help pay for the Erie International Airport's $80.5 million runway extension, the $42 million renovation of Tullio Arena, and to support the library system.


"Restricted" funds, according to Pennsylvania gaming law, are intended to be used for casino-related projects in the host community and in contiguous municipalities, as well as the host county. That funding so far has paid for road and sewer improvements in the communities, and for ambulances and other emergency equipment.


The 10 lawyers in Dunlavey's courtroom Wednesday were wrestling over leftovers -- the so-called "uncommitted" funds that remain in the authority's "restricted" account, which now amounts to about $7.4 million.


But the proposed settlement would also change how the restricted funds are handled in the future.


"We're just trying to develop ongoing, consistent support," said Evan Adair, an attorney for Millcreek Township. "Right now, we don't see any binding promise that people can count on."


The agreement now being negotiated would do that.


If accepted -- Erie County Council and the supervisors in each affected municipality would have to sign off on the plan -- the county and municipalities would agree not to seek restricted funding. In return, they would split 25 percent of the money in the fund. At current funding levels, that would mean splitting $1.5 million six ways, or about $250,000 to each party annually.


The Gaming Revenue Authority would distribute the remaining $4.5 million among regional assets, economic development projects and other efforts.


The fire departments and EmergyCare no longer would apply to the authority for money. Instead, they would work with the supervisors of their respective municipalities.


There's a catch: The Gaming Revenue Authority would have to agree to apportion no more than 40 percent of the remaining funding to "regional assets," such as the Erie Art Museum and the U.S. Brig Niagara, for five years.


The authority had resisted that request. Its solicitor, Tom Talarico, said the 40-percent rule would undercut the authority's role in determining how uncommitted funding is distributed.


"This would in essence rob ECGRA and its members of their discretion," Talarico said Wednesday.


The municipalities, meanwhile, would be guaranteed a fixed percentage of the money in the "restricted" fund.


"That would provide certainty for all the parties," said Dan Pastore, an attorney for the Summit Township Industrial & Economic Development Authority, and the primary author of the plan.


Under the new plan, officials in Summit Township and the other four townships could expect consistent funding levels from year to year, and could budget accordingly, Pastore said.


"We essentially know what that amount will be every year," Pastore said. "That eliminates a lot of the uncertainty in this process."


Pastore would not discuss the plan in any additional detail when contacted at his office Wednesday afternoon.


The promise of consistent year-to-year funding is itself something of a gamble, said Dunlavey, who wondered in court Wednesday how the development of additional casinos might affect business at Presque Isle Downs.


"We're all assuming that the goose that laid the golden egg is going to continue to lay golden eggs," Dunlavey said.