Iowa Gov. Kim Reynolds holds a news conference on COVID-19 in Johnston on May 5, 2020. Des Moines Register
Before the COVID-19 pandemic hit, Polk County supervisors were mulling whether they could lower the county’s property tax levy next year.
But without millions of dollars coming in from county-owned facilities such as the Prairie Meadows racetrack and casino and the Iowa Events Center — both shut down because of the COVID-19 pandemic — those leading the state’s most populous county are being forced to budget differently.
A $200 million 2021 budget approved Tuesday by the five supervisors keeps the county’s levy the same as in the 2020 fiscal year that ends in July. It focuses revenue on existing projects and continuing to prop up hard-hit nonprofits trying to serve the county’s hungry, mentally ill and financially destitute.
“The budget that we’re approving is based upon on our best guess as to where we think we will end up,” Chairman Matt McCoy said. “But there are a lot of unknowns right now.”
With many large sporting events, concerts and conventions canceled at Wells Fargo Arena and Hy-Vee Hall, the company that runs the Iowa Events Center, Spectrum Management, will be keeping profits from the first quarter of this year to sustain operations in the third quarter.
Typically, a portion of the profits from events at the county-owned Iowa Events Center would flow back to the county. But the events center will lose about $700,000 to $800,000 in revenues because of cancellations this spring and summer.
Chris Connolly, general manager of the Iowa Events Center, said many big acts who were forced to cancel because of the pandemic, such as Elton John, Michael Buble and Cher, are rescheduling — but not until next year.
All sports scheduled at the Events Center for the fiscal year that ends in July have been postponed, but convention business is likely to return in the latter part of the year.
“We had a very, very strong year last (fiscal) year, so we’re very lucky,” Connolly said. “We’re not going to hit the numbers that we usually hit, but we’re not losing a lot of money.”
Layoffs of 1,130 employees at Prairie Meadows in Altoona, which has been closed since March 16, began Sunday. That also will affect the county’s bottom line in 2021.
Prairie Meadows CEO Gary Palmer has not announced whether horses will run this year at the racetrack, but that’s looking doubtful.
“As long as these (positive COVID-19) numbers keep going up, it doesn’t make sense to me,” Palmer said. “My worst nightmare is reopening and then having to shut down all over again.”
Some in the horse trade have threatened legal action if they don’t get their purse money this year, Palmer acknowledged.
Under Iowa law, purses at the racetrack are supposed to be funded by 11% of gross receipts from the previous year’s casino gambling. This year, the amount budgeted for 67 days of thoroughbred racing and 26 of quarter horse racing, as well as a mixed meet, was $21.7 million.
But Palmer said horsemen come from across the country to race, which poses additional health risks to employees and the public. Simulcasting doesn’t make sense, because other tracks remain closed, as does the casino.
Even if Gov. Kim Reynolds were to reopen the whole state by mid-May, the track and the casino still would not be safe for patrons or workers, Palmer said. Unclear is whether the state will go through a second wave of coronavirus, which experts have said could be worse than the first.
“We’ve been called every name there is, plus other things. … But this pandemic is not up to me,” Palmer said.
Prairie Meadows loses roughly $800,000 to $1 million every day it stays closed. Under its agreement with Polk County, it still is required to pay $1.4 million a month in rent.
But it also is required to give the county 5% of its gross revenue in a profit-sharing agreement — and that margin will be thin heading into the next fiscal year.
Polk County uses rent payments from Prairie Meadows to make bond payments on existing programs. And the supervisors typically use the gambling proceeds to award community betterment grants, large and small, to a mix of organizations.
Many events the county helps fund, such as high school graduation parties, have been canceled. Supervisors plan to use what’s left to help the residents hit hardest by the pandemic. They say charitable contributions to nonprofits aiding the county’s neediest residents have dried up, and many receive no stimulus money.
Supervisor Robert Brownell said food banks, refugee organizations and those serving people with disabilities need the county’s help.
“I’m not saying cultural festivals and events aren’t important, but we need to prioritize right now,” he said.
While the county is stretched, it does have reserves and should weather the 2021 fiscal year better than many, he said.
Lee Rood’s Reader’s Watchdog column helps Iowans get answers and accountability from public officials, the justice system, businesses and nonprofits. Reach her at [email protected] or 515-284-8549. Follow her on Twitter at @leerood and on Facebook at Facebook.com/readerswatchdog. Our subscribers make the Reader’s Watchdog possible.
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