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29e414 ce a <br />515 Little Canada Road, Little Canada, MN 55117 -1600 <br />(612) 484 -2177 / FAX: (612) 484 -4538 <br />March 3, 1995 <br />TO: Mayor Fahey and Members of the City Council <br />FROM: Kathy Glanzer, Administrative Assistant <br />RE: Reduction of 3% Gambling Tax <br />MAYOR <br />Michael 1. Fahey <br />COUNCIL <br />Beverly Scalze <br />Jim IaValle <br />Steve Morelan <br />Bob Pedersen <br />ADMINISTRATOR <br />Joel R. Hanson <br />Attached is a history of the 3% Gambling Tax since the City began <br />collecting that tax in 1992. As you can see, at the end of 1994 <br />there is a balance of $78,416.09 in the 3% Fund. Based on our <br />expense experience over the past three years, I believe that the <br />City could reduce the tax rate to 1 %. Averaging revenues for the <br />past three years, I estimate that the City would collect <br />approximately $17,000 during 1995, which added with our balance <br />on hand should be more than sufficient to cover expenses during <br />1995. <br />As you know, the enforcement tax can only be spent on expenses <br />that the City incurs relative to gambling activities. A <br />reduction in the tax to 1% would begin to spend -down the balance <br />which the City has accumulated. However, this approach should <br />still be conservative enough to ensure that the City's expenses <br />during 1995 are covered by the fund even allowing for the <br />continuation of the Mover's Warehouse action. Staff will <br />continue to monitor expenses closely during 1995 to make sure <br />that this is the case. <br />Therefore, it is staff's recommendation that the 3% Gambling Tax <br />be reduced to 1% retroactive toL February 1st. <br />Page 77 <br />