Agenda Index City of Vancouver

ADMINISTRATIVE REPORT

TO:

Vancouver City Council

FROM:

Director of Community Services, Social Planning and Director of Legal Services

SUBJECT:

Meekison's Gaming Report and Execution of Financial Host Agreements

 

RECOMMENDATION

GENERAL MANAGER'S COMMENTS

COUNCIL POLICY

On January 27, 1987, Council asked the Attorney-General to begin a review of the regulations governing the operation of casinos as soon as possible, and that the City, and other concerned groups and individuals be given the opportunity to express in detail their concerns and suggestions for improvements. Council also expressed its concern that revisions to casino gambling regulations adhere to basic principles including that the maximum financial benefits accrue directly to the social service agencies sponsoring the events; and that appropriate, strict controls be in place to discourage or prevent possible negative social consequences, such as compulsive gambling or criminal activity.

· On July 26, 1994, Council requested that the Provincial government ensure that there will be municipal participation in the evaluation of community impacts for any expansion to gaming activity, including video lottery terminals, gaming on First Nations lands and major casinos. Council further requested that gaminglegislation or regulations include municipal endorsement of specific gaming locations prior to approval, and that approval of any new gaming activity be conditional on a portion of the revenue being available to local government for mitigation measures.

· On November 1st, 1994, Council passed a resolution opposing gaming expansion including the introduction of video lottery terminals (VLTs) and, that the City of Vancouver considered gaming expansion a matter of determination by the people of British Columbia through appropriate broad and local involvement in a meaningful consultation program.

· On March 25, 1997, Council reiterated its demand to the Provincial Government for a comprehensive Gaming Act before expanded gaming activity goes forward. Council further advised the Minister of Municipal Affairs and the Minister of Employment and Investment that Vancouver opposed the addition of slot machines as an expanded gaming option.

· On October 7, 1997, Council adopted amendments to the Zoning and Development By-law to permit a limited number of charity-operated casinos in certain areas of the city and to prohibit casinos with slot machines. The amendment prohibiting casinos with slot machines was challenged by the B.C. Lottery Corporation and the City successfully defended the By-law in the B.C. Supreme Court and Court of Appeal.

· In January 1999, the Province introduced the White Paper on Gaming which recommended legislation changes which could have drastically limited historic municipal powers in relation to casinos and other gaming establishments. On March 9, 1999, Council responded to the Provincial White Paper, by reiterating its stand on the preservation of municipal powers on issues surrounding gambling expansion.

UBCM POLICY

On September 23, 1994 the UBCM unanimously endorsed the resolutions submitted by the City of Vancouver:

On June 17, 1999 UBCM signed a Memorandum of Agreement with the Province, whereby the Province fully affirms the municipal powers related to casino location, relocations and scope and type of gaming in gaming facilities within municipal boundaries.

PURPOSE

This Administrative report provides Council with information regarding the report "Relocation of and Changes to Existing Gaming Facilities in British Columbia: Review and Recommendations", prepared by Dr. Peter Meekison on behalf of the Province, and released on January 31, 2000.

This report also requests Vancouver City Council to authorize staff to execute the "Host Financial Contribution Agreement" with the Province of British Columbia, for each of the five casinos in the City of Vancouver. The signing of these Agreements is consistent with both UBCM and Council policy.

These Agreements relate to existing community casinos (formerly known as charity casinos) which have operated in the city since 1987. The Agreements allocate 10% of casino gaming revenue to the City.

BACKGROUND AND DISCUSSION

Meekison Report

On June 17, 1999, the Province signed a Memorandum of Agreement on Gaming Policy with the UBCM (Appendix A). On the same day, the provincial government indicated its commitment to bring an independent perspective to the issue of relocation and changes to existing gaming facilities in British Columbia.

Dr. Peter Meekison was then appointed in July 1999 to conduct a review and bring forward recommendations. Meekison's recommendations (28 recommendations) cover a process of dealing with issues of relocation of and changes to existing gaming facilities. The Meekison's Report recognizes and validates many of the positions taken by the City of Vancouver for the last number of years. Some of the recommendations include:

1. The prompt introduction of Gaming legislation.

2. The establishment of an independent Gaming Control Commission to regulate and oversee all other gaming agencies, including the Lottery Corporation and the GamingCommission, bringing a more comprehensive approach to policy and regulatory decisions.

3. The enhancement of the role of municipalities, and particularly the role of UBCM, on deciding gaming related issues. It fully validates the terms of the Memorandum of Agreement signed on June 17, 1999.

The first two recommendations have been made in other studies and reports to the Province. The Minister responsible for gaming has indicated that they will be implemented this time.

The report also recommends the lifting of the moratorium on casino relocations.

A copy of the Meekison's Report is on file in the Social Planning Department. Copies can be obtained through the Internet at the following address:

Financial Host Agreements

These Agreements were first presented by Provincial Gaming officials to municipalities hosting casinos, at the Annual Convention of the Union of British Columbia Municipalities (UBCM) in September, 1999. Upon receiving the proposed agreements, City staff reviewed them and had concerns about some of the terms of the proposed agreements, particularly in relationship to inconsistencies with the terms of the Memorandum of Agreement signed with the UBCM on June 17, 1999.

City staff indicated these concerns to the Province in early October, 1999. City staff and provincial officials subsequently met and the City concerns were discussed. City staff were informed that many municipalities had already signed the agreements in their original form, and furthermore, that the Province had provided a clarification letter to all municipalities involved, on October 14, 1999 (Appendix B). This letter from the province indicates that the provincial intent was not to derogate from the provincial government's obligations under the MOA signed with UBCM on June 17, 1999.

City staff have concluded that the clarification letter, together with the recommendations in the Meekison Report, and statements made by the Minister responsible for gaming about the report, have addressed the initial concerns in a satisfactory way. Therefore, staff are requesting authorization from City Council to execute the Host Financial Agreements for each of the five casinos in Vancouver.

The five existing casinos in Vancouver are:

· Great Canadian Casino at 2477 Heather Street
· Great Canadian Casino at 1133 West Hastings Street
· Royal Diamond Casino at 750 Pacific Boulevard (planning to relocate to 800 Terminal)
· Grand Casino at 725 S.E. Marine Drive
· Gateway Casino at 611 Main Street.

The Province has already put aside the City portion of revenue corresponding to the first and second quarters. For the quarter from July 1st to September 30, 1999 the amount is $983,761. For the second quarter (October 1 to December 31, 1999) the amount is $1.08 million.

As indicated earlier, these revenues relate to the activities of existing local casinos. It is not clear however, that all of the existing casinos will remain in the city. Some casino operators have indicated their interest in seeking relocation to other municipalities where they could be allowed to have slot machines.

It is difficult therefore to make any projections on the size of annual revenue for all casinos in the City of Vancouver, and furthermore, provincial gaming policy in the past, has proven to be susceptible to changes. It is perhaps too early to consider this source of revenue as a reliable, permanent source.

The requirements from the province under the Host Financial Agreements are that the funds, once received, be set apart in an special gaming account. The same funds may be used for any purpose within the legal authority of the City. Staff are not making any specific recommendations at this point as to how the monies could be spent.

CONCLUSION

The Meekison Report strongly supports the authority and powers of local government over gaming issues.

The City's initial concerns with the Financial Host Agreements have been addressed, and staff recommend that the City now sign these Agreements.

- - - - -

This document dated for reference the 17th day of June 1999.

Memorandum of Agreement
On Gaming Policy

Between:

The Union of BC Municipalities (UBCM)

-and-

The Government of British Columbia (the Province)

The Province and UBCM have agreed to govern their relationship with respect to gaming issues according to the following principles:

The Province:

· affirms the jurisdiction of local governments, specifically with respect to their land-use and by-law making powers;
· affirms the ability of local governments to make decisions as to whether new facilities or re-located facilities will be permitted within their boundaries;
· affirms local government's ability to direct and define the extent, scope and type of casino and bingo gaming within their boundaries. It also affirms the ability of local government to decide whether slot machines or other similar devices could be placed within their boundaries;
· will provide an independent and transparent selection process for new and re-located gaming facilities;
· will share gaming revenue with local governments as set out in the White Paper;
· will share gaming revenue with local governments that host gaming facilities, regardless of their stated opposition to gaming, and without the adoption of a Council/Board resolution;
· will consult in a meaningful way with local government in the development of gaming policy changes that may affect local governments;
· will consult in a meaningful way with local governments regarding the form and content of gaming legislation before it is introduced into the Legislature;
· will ensure that charities are guaranteed an ongoing source of revenue from gaming and that eligibility rules for this funding will be maintained;
· will ensure there is a legislative mechanism for consultation / mediation with adjacent communities; and
· reaffirms its commitment that video lottery terminals will not be permitted in British Columbia.

The UBCM intends to:

· actively and cooperatively work with the Province, in the development of comprehensive gaming legislation.

The Province and UBCM intend to:

· bring resolution to existing and future disputes through negotiations, where possible, and, in a manner consistent with the principles of this Agreement.

These principles will govern the parties' actions with respect to gaming henceforth, and until legislation consistent with these principles is passed in the Legislature.

John Ranta Honourable Jenny Kwan
President of UBCM Minister of Municipal Affairs

British
Columbia

October 14,1999

City Clerk/City Manager
The City of Vancouver
453 West 12th Avenue
Vancouver, BC V5Y IV4

Dear City Clerk/City Manager:

Re: Host Financial Assistance Agreement

By now you should have received copies of the Host Financial Assistance agreement for community casino(s) within your municipality. I am writing to follow up and ensure that all municipalities that will be executing this agreement, understand the nature and intent of the agreement. You should know that this agreement mirrors that of the Host Financial Assistance Agreement used for destination casinos, and has been fully negotiated with the host local governments of destination casinos that have received final approval.

The provincial government is committed to ensuring that there is transparency -and accountability in the expenditure of all public funds, and in particular, gaming funds. For that reason, a number of reporting and accounting sections are required in the agreement to meet the province's commitment to ensure that the gaming funds flowing to municipalities are spent in a transparent and accountable manner. The government does not otherwise intend to limit the use of these funds, beyond requiring that the expenditures made are within local governments' legal authority.

Ministry of Labor Regulation Division P.O. Box 9311 Telephone: (604 )387-0757

In addition, there are clauses in the agreement that are required, to affirm the provincial government's legal authority to conduct and manage gaming in the province. Clause 13 is one of these. This clause is not intended to interfere with local governments' public and lawful responsibilities with respect to public safety and other duties. Further, this clause is not intended to derogate from the provincial government's obligations under the MOA signed with the UBCM -on June 17, 1999. Clause 13 is meant to confirm that, within the scope of the MOA, the provincial government alone conducts and manages casino gaming, as required under the Criminal Code of Canada,

I understand that municipalities may require a public process in order to approve these agreements, and that this may not be completed by October 15 , the date set out in clause 3(a), as the date of the first quarterly payment. It is the position of the Province that, notwithstanding the date the agreement is signed, any payments made pursuant to an agreement will be effective on July 1, 1999, however, we would appreciate it if you would provide us with the time frame under which you expect to return the agreements to us.

I hope that this clarifies the Province's position with respect to this agreement. If you need any further information please contact Mr. Mark MacKinnon at 250-387-0757.

Yours truly,

Donald J. Chiasson
Assistant Deputy Minister

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