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July 25, 2004

 

Washington County Board of Supervisors

Attn:  Larry DeLong, County Supervisor

Jack Dillon, County Supervisor

Robert Stout, County Supervisor

PO Box 889

222 West Main Street

Washington, IA  52353

 

Dear Washington County Board of Supervisors,

 

This letter is to formally request that you not sign any “Memorandum of Understanding” with Catfish Bend Casinos nor the Washington County Riverboat Commission, Inc. (WCRC, Inc.).  In a previous email we sent you we indicated a few reasons but more reasons have surfaced since last week.  There are multiple alarming reasons why signing this document would not represent the best interests of the citizens of Washington County:

 

1)  The language in the document does indeed indicate a contract for exclusive rights given to the owners of Catfish Bend to pursue a gambling license in Washington County.  By simply having the County Attorney change the language and signing with the stipulation of the referendum passing, you have not gained anything at all.  If the referendum fails, the casino would be forced to leave anyway.  By signing now you have not changed the benefit to the casino owners.  They would still have the desired contract with the full benefits.  We would urge you to not sign this contract at all.  Not before the vote and certainly not after the vote.

 

2)  The casino owners are asking you to lock into a formal agreement with the WCRC, Inc. as well.  The memorandum is a favor that the casino is asking for since they will be spending huge amounts of money in this County to get the referendum passed.  Unlike the casino, our organization is made up of hundreds of volunteers and personal donations and our goal is to educate the entire county about the false promises the casino has presented.  We feel that Kehl Management is asking the taxpayers to accept a bad deal and is asking for the Supervisor’s support of it.  We feel that Kehl Management is asking taxpayers to support their quest to become the largest casino operator in the State of Iowa.  Most businesspersons would agree that huge expansion requires their companies to invest first.  That is the cost of expanding business.  The owners of the casino are asking for a contract to secure their expansion.

 

3)  Other counties in Iowa have handled this matter differently and will benefit greatly by doing so.  For example, in Wapello County (Ottumwa), the gambling referendum was presented to the county voters and was passed.  No single casino sponsored or paid for the vote.  As a result, their county has four different casinos negotiating with the county to support their license application.  The county officials are looking at all of the different casinos that the potential owners currently operate.  They are looking at the reputation of the companies and are also negotiating better contracts so as to maximize benefit to the county citizens.  This is also occurring in Polk and Black Hawk Counties.  Webster County already has given exclusive rights to the owners of Catfish Bend, and during the referendum Kehl Management funded the casino proponents with $330,000 to win the referendum.  The opposition group painstakingly raised only $15,000 to educate the voters.  By signing the MOU, Kehl Management will spend whatever it takes to win the referendum here.

 

4)  When our County advertises a contract for qualified companies to bid on, such as a new jail construction, it is able to determine not only which companies are qualified, but which ones can provide the best deal to the county.  We feel that the casino is no different and no single company should be granted exclusive deals.  WCRC, Inc., the non-profit commission, is offering a payback to our county organizations, schools, and churches of only 3%, the lowest available by State Law.  We could and should negotiate better terms.  We are relying on you to open up the bidding process now.

 

5)  The non-profit commission (WCRC, Inc.) has revealed new details about how their commission will operate.  To avoid Commissioner bias, the individual commissioners are forbidden from investing directly into the planned casino.  However, it was revealed at last week’s Washington City Council meeting that those Commissioner’s spouses may invest directly in the casino.  In addition, nothing in their bylaws prevents the Commissioners from benefiting from their respective businesses that deal directly with the casino.  We feel that this is the primary reason that the Commissioners of WCRC, Inc. have been resistant in allowing language in their contract that would require equal representation of our County’s communities.  The President of the Commission did not allow at the Riverside City Council meeting any possibility of negotiating fair and equal representation of commission members.  He was very persuasive, and as the tape of the meeting reveals, very insistent on closing the deal immediately.

 

6)  The owners of Catfish Bend gave you a handout that boldly stated “600 JOBS”.  We would like you to ask the Daniel Kehl, the principal owner of two riverboats in Iowa, what the unemployment rate is in those three counties he operates in.  According to the June 2004 Iowa Workforce Development news release, Washington County’s unemployment rate was at 4.8%.  The three counties that Mr. Kehl operates casinos in had:  Lee County 7.6%, Clinton County 5.5%, and Des Moines County 5.9%.  These numbers show that true economic development and job numbers in Washington County are not guaranteed by bringing in a casino.  Furthermore, the casino has promised jobs that pay $12-14.  They failed to mention that those wages were elevated by including both tips and the combined benefits package.  We note that in the current Iowa Workforce Development job listing site, the riverboat in Clinton owned by Mr. Kehl is currently hiring six positions that include deckhand, change person, slot staff, count team, food and beverage, and security.  Their salary listed is in fact $6.45 ($13,416 / year if Full-Time).  This was not the average salary quoted to the Washington Board of Supervisors.

 

7)  The non-profit commission has told the Board that they would all volunteer their time in the management of the 3% distribution rules.  The Articles of Incorporation of WCRC, Inc. (available on the Iowa Secretary of State website) indicate however “that the Corporation shall be authorized and empowered to pay reasonable compensation for services rendered.”  In addition, the corporation’s Article IX indicates that it could become a “private foundation.”  These Articles should be questioned.

 

Our organization would request because of these issues that you refrain from signing the said “Memorandum of Understanding” at any time.

 

Thank you, 

 

Brad Franzwa, Organization Chair, Communities Against Riverboat Expansion (CARE)

PO Box 602

Riverside, IA  52327

Phone 319-648-2095, Cell 319-330-8137

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