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DolZSEY WHITNEY <br /> • Mayor sundland' and Members <br /> of the City Council <br /> October 16 , 1987 <br /> Page 5 <br /> A. prizes ; <br /> B. gambling supplies and equipment; <br /> C. rent; <br /> D. utilities used .during, gambling occasions <br /> E. compensation paid to members for conducting <br /> gambling; <br /> F. taxes imposed by .Minnesota Statutes, section <br /> 349 . 212; <br /> G. maintenance of devices used in lawful gambling; <br /> H. accounting services; <br /> I . license renewal ; <br /> J. bond for gambling manager; <br /> K. insurance on gambling activities ; <br /> L. investigation fee; and <br /> M. advertising. <br /> I see nothing which would prevent the City from requiring that <br /> a greater percentage of gambling profits or gross receipts be <br /> • expended for "lawful purposes" than is required by § 349 . 15, or <br /> that a specific percentage of the funds expended for lawful <br /> purposes be contributed to local charities. <br /> 7 . . Can the City impose more stringent requirements on <br /> gambling operations being conducted on property owned by the <br /> City? <br /> With a few exceptions, the City' s authority to impose <br /> restrictions on lawful gambling at all locations within its <br /> jurisdiction appears to be limited only by the state and federal <br /> constitutional rights of the organizations applying for <br /> licenses . Although it is sometimes stated that a city acting in <br /> its proprietary capacity may lease its property on the same basis <br /> as a -private owner, see State v. City of Cleveland, 181 N.E. 24 <br /> (Ohio 1932 ) ; Woodward v. Fox West Coast Theaters, 284 P . 350 <br /> (Ariz. 1930) ; 56 Am. Jur . 2d. Municipal Corporations, etc . § 556 <br /> ( 1971 ) , proprietary judgment will not insulate a city from <br /> liability for restricting use of its facilities in an unconstitu- <br /> tional manner . See Southwestern Promotions , Ltd. v. Oklahoma <br /> City, 459 F.2d 282, 283 ( 10th Cir. 1972) (to grant right to use <br /> civic auditorium to one production and withhold it from another <br /> "in the name of proprietary judgment" is "arbitrary in the <br /> absence - of some rational proprietary reason" ) . Therefore, the <br /> criteria you select as a means of determining which organizations <br /> are permitted to conduct gambling in City-owned establishments <br /> • must at least be rationally related to legitimate governmental <br /> or proprietary concerns . <br />