The monthly financial distribution to the City of Dubuque from the nonprofit license holder for Dubuque’s casinos has gone up nearly 40% this year compared to the same point in 2021.
The lease agreement between the city and DRA was amended at the beginning of this year, giving the city a higher monthly distribution from the Dubuque casinos’ revenue, from 1% to 1.5%. As a result, the city has received $6.3 million as of the end of October, a 38% increase from the same time period last year.
“The biggest benefit is that the citizens of Dubuque pay lower taxes,” said Alex Dixon, president and CEO of the DRA and Q Casino, of the increase. “… We benefit from the lowest property tax rate among the large cities in Iowa. A large part of the funding that goes into the general fund are from the combined contributions of Q Casino and Diamond Jo (Casino).”
The property tax rate for fiscal year 2023, which began in July, is $9.71 per $1,000 of assessed value, down from $9.89 the previous year.
City Manager Mike Van Milligen said the increase in the monthly distribution from the DRA was anticipated in the city’s budget for the year.
“We are right on budget for our targeted numbers,” he said. “It did allow us to add positions to the city from the budget process and other things to the city without raising property taxes.”
However, Dixon also noted that terms of the city’s lease agreement with the DRA means that the city will receive a smaller portion of the casinos’ profits at the end of the year.
The previous lease agreement split the casinos’ annual profits evenly between the city and local charities. The current lease agreement now splits those profits three ways: among the city, local charities and improvements to Chaplain Schmitt Island.
“The net effect basically is they (the city) get more money up front and less money on the back end,” Dixon said.
The lease agreement with the DRA soon will come again before the Dubuque City Council for changes.
At the DRA’s monthly board meeting on Tuesday, board members unanimously approved to further negotiate the lease. Terms will be discussed further at a City Council meeting yet this year.
The proposed changes would allow the DRA to take $2.5 million budgeted this year to pay off debts and use it for future development projects on Schmitt Island.
Dixon said the anticipated debt was not taken out this year. But without city approval, the $2.5 million instead would be included in the three-way distribution at the end of the year.
“Instead of borrowing more debt in the future, we can instead use cash we have on hand,” he said. “It’s important to get our ducks in a row now before we take the next step.”
Exact plans for the $2.5 million have not been announced, but the City of Dubuque previously applied for a $7.3 million Destination Iowa grant for an outdoor amphitheater and trail connections on Schmitt Island.