Aurora has delayed any fee increase for video gambling machines in the city. (David Sharos / The Beacon-News)
It appears discussion of any change in fees for video gambling machines in Aurora has been delayed for at least a year, possibly longer.
Aldermen during a recent City Council meeting, discussing the issue because it had been tabled from another council meeting, let the issue die.
But because the issue of any change in fees actually involves two distinct issues, it could come back at a later date.
One of the issues in making an ordinance change is that state law has changed, and city officials wanted to change their ordinance to match the state. The state has said that the terminal operator – which in the state law is called a distributor but either way is the entity supplying the machines – and the establishment must split the fees charged by local jurisdictions.
Most city laws across the state had a structure that charged the machine providers, or terminal operators, more than the establishment.
For instance, in Aurora’s fee structure, the terminal operator pays an application fee of $250 and an annual citywide license fee of $1,000.
A licensed establishment pays only a fee of $25 for each machine, each month.
Mayor Richard Irvin has pointed out that the city intended to favor the establishments, having them pay less.
Because many city laws across the state were like that, the state decided to change statewide law to mandate that the fees be shared equally between terminal operators (which the state calls distributors) and licensed establishments.
The law does allow for the terminal operators to pay the licensed operators’ fees for them, provided a written, signed agreement is reached between the two.
Christopher Minick, the city’s chief financial officer, told aldermen that in talking with Illinois Gaming Board officials, they are not ready to begin implementing the new state language requiring terminal operators and establishments to split the fees.
“The board needs to engage a rules-making process that has not yet begun,” Minick said. “So it may be some time before we know what those procedures would be.”
City Council members were content to let changing the ordinance die at the full council. But aldermen also had discussed a second issue, actually raising the fees themselves.
Owners of both for-profit restaurants and bars that have video gambling, and not-for-profit private clubs, told City Council members that changes in the fees would be a hardship right now, particularly coming out of the coronavirus pandemic shutdown, and the resultant hiring difficulties and inflationary pressures.
So aldermen also let that die for the time being, although that, too, could be revisited in a year. October is when fees are renewed, so if the city does not change things by then, it would go to October 2023.
The issue of the fees themselves had been referred to the council’s Finance Committee, which discussed the fees recently. Nothing was voted on, but discussion showed two differing viewpoints of the fee question.
Ald. Sherman Jenkins, at large, said he thinks the city “should maintain the current fee structure” because input from the business and not-for-profit community clearly showed that changing the fees would be a hardship.
“We love to say COVID’s over, but, well, we know it isn’t,” he said.
Jenkins said the not-for-profit agencies have been in the city for many years, and they are the ones that supply funding for social service organizations, as well as sponsorships of sports teams and other community groups.
“These are organizations that give back to the community,” he said.
Ald. Carl Franco, 5th Ward, Finance Committee chairman, pointed out that the only reason for raising fees is to cover the city’s costs. He said if the fees do need to increase to cover costs, then the city should do it.
“Otherwise we subsidize gambling,” he said. “Gambling should be subsidized by those who take part in gambling. If we didn’t get money from gambling, the state of Illinois wouldn’t even have gambling.”
He said he would like to see the Finance Committee revisit the question at a later date “because I think we need to talk about that.”
The Aurora City Council this week further delayed consideration of any increases in video gambling device fees.
Aldermen this week delayed both routine changes in the ordinance to match a change in state gaming law, and also a proposed change in fees for the video gambling devices.
The delay in changing city code to match the state is for at least two weeks, and will come back to the full City Council at its Aug. 23 meeting.
The delay in increasing the fees was referred back to the City Council Finance Committee, because aldermen agreed there are several issues involving the actual fees that need to be discussed.
Because the agenda already is set for this week’s Finance Committee, it won’t be discussed until the Aug. 25 meeting.
Aldermen made the moves during discussion of the gaming fee ordinance, and after hearing from some local establishments that have video gambling machines.
Jay Wessells, owner of AC’s Pub on the far West Side, said the higher fees would be a hardship because his establishment suffered a fire last December, right after going through problems connected to the coronavirus pandemic.
While the bar and restaurant is getting set to reopen Sept. 1, insurance did not cover all the damage, he said, and the fee increase would be difficult.
“We really don’t need a hit like that,” he said.
Joe Lusk, of the Luxemburger Club on High Street on the East Side, presented another side to the issue. Unlike AC’s, the Luxies Club is a not-for-profit, which uses a lot of the money it raises to donate to social service agencies throughout the city.
He suggested the city adopt lower fees for non-profits than for regular businesses.
“We give money to many organizations, so we’re not just a bar,” Lusk said. “I understand a lot of businesses profit from this; we’re not one of them.”
That suggestion was one reason City Council members wanted to send the fee question back to the Finance Committee.
“We might want to take a look at that,” said Ald. Edward Bugg, 9th Ward, a Finance Committee member.
Ald. Sherman Jenkins, at large, said one reason the council delayed the fee question two weeks ago was to hold a meeting between the city and interested parties, such as bars, restaurants and clubs.
Aurora Ald. Sherman Jenkins. (The Beacon-News)
“That did not happen,” Jenkins said. “We need to consider (them) before we take a vote on this. We need at least to have a meeting of the minds.”
Under the city’s current fee structure, the terminal operator – which in the state law is called a distributor but either way is the entity supplying the machines – pays an application fee of $250 and an annual citywide license fee of $1,000.
A licensed establishment pays only a fee of $25 for each machine, each month.
Mayor Richard Irvin pointed out that the city’s “intent was to give favor” to the licensed establishments.
“Our intention was to have the licensed establishments pay a lot less,” he said.
Many city laws across the state were like that, and the state decided to change statewide law to mandate that the fees be shared equally between terminal operators (which the state calls distributors) and licensed establishments.
The law does allow for the terminal operators to pay the licensed operators fees for them, provided a written, signed agreement is reached between the two.
Aurora’s proposed changes to the fees, which would take effect Oct. 1, would change the $1,000 citywide license fee to a license for each location of $1,000, to be shared between the terminal operators and the licensed establishment.
The monthly terminal fee of $125, which had been allocated $100 for the terminal operator and $25 for the licensed establishment, would be evenly apportioned as well.
City officials estimated that for a licensed establishment, it would represent an annual cost of $750 for each machine, or an increase of $450 for each device. The total impact to a licensed establishment as a result of these changes would be between $950 and $2,750 each year, depending on the number of machines on site, officials estimated.
The fees would change again Oct. 1, 2023. The annual license fee would increase by $100 for each location and the monthly operational fee would increase by $50 a machine.
Officials estimated this would be an increase, for each machine, of $600, to be split evenly between the terminal operator and the licensed establishment. With the $100 location fee, it would increase that fee by between $350 and $1,500 annually, depending on the number of terminals.
City officials said this week a second proposal was simpler – to increase the fee to $4,250 for each machine, which would be split between the operators and establishments.
“We decided to make one change, to have one fee, that would be required to be split,” said Richard Veenstra, the city’s corporation counsel.
All of those proposed fees will be looked at by the Finance Committee.
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