TIVERTON — After nearly two hours of argument and debate, a divided Tiverton Town Council  voted during an August 5 virtual public hearing to adopt a new ordinance restricting casino gaming revenue for the 2020-21 fiscal year.

The decision comes after the town faced financial hardship this spring when the COVID-19 crisis temporarily shuttered the Tiverton Casino Hotel. After realizing that the state was not going to honor its $3 million “guarantee” in light of the casino’s closure, council President Patricia Hilton said the town was left with a gaping hole in its operating budget, forcing interim Town Administrator Christopher Cotta to put a freeze on expenditures.

But while the town had managed to avoid financial disaster at the end of FY19-20, Ms. Hilton said it is still at risk of landing in the same exact position in the upcoming budget cycle; there was no preventing a petitioner’s budget from passing that included casino revenue in the operating budget. And if a second wave of the pandemic shut the casino down again, Ms. Hilton said it would be the municipal side of the budget that would suffer from the lack of a revenue stream. 

“We have already…cut it to the absolute bone,” she said. “There’s no gravy there.”

That was the motivation behind introducing the new ordinance, Ms. Hilton said. The rule would effectively direct any revenue or payments from the casino into two accounts – first, into the restricted general fund reserve account, should that balance happen to fall below the 3 percent minimum; then into the restricted municipal capital projects account.

Whole she acknowledged that a similar charter change had been proposed – and failed – back in 2018, Ms. Hilton said that she believes a number of voters are now more aware of the implications surrounding the state’s so-called guarantee. She added that should be in no way construed that this was an attempt at a “power-grab,” given that she is not running for reelection.

“This is the best, wisest thing that we can do,” Ms. Hilton said. “It may not be popular, but I think it is the safest thing that we can do.”

Voters' role impacted

Not everyone on the council agreed, however. Donna Cook took issue with what she said amounted to Ms. Hilton pinning the blame on voters, arguing that it should have been the then-solicitor’s job to point out any red flags.

Meanwhile, Nancy Driggs said that a far more reasonable solution could be to do what Lincoln does with its Twin River Casino Hotel revenue – hold on to the monies until the following fiscal year. Passing this ordinance would be interfering with the Financial Town Referendum (FTR) process and voter involvement, she said, pre-determining what the public can and cannot consider.

“I find this very upside-down, and I do find it power hungry,” Ms. Driggs said.

But in Town Solicitor Mike Marcello’s view, it is completely in the council’s right to introduce and consider new regulations, adding that it is their “fiduciary obligation” to ensure Tiverton’s financial well-being in the long run. Without this ordinance, he said there is no safeguard against someone introducing an alternative budget that factors casino revenue into the operating budget, and having it gain traction amongst the town majority.

“You may have to have 300 people convinced that this is a crazy idea, we’re not doing it,” Mr. Marcello said. “But what if those 300 people think this is a good idea?”

The part that concerned him about the ordinance, councilor Steve Clarke said, is that there was no clearly defined process for how the money will be allocated once it is in the restricted capital projects account. Resident Thor Aakre agreed, adding that there is no real guarantee that the new regulation is only short-term and that a future council would make adjustments.

“You can say, ‘Oh, that’s not going to happen,’” Mr. Aakre said, “but unless there’s something in place that restricts it now that makes people feel more comfortable, I think people are going to feel uncomfortable.”

To that end, Ms. Hilton said she is willing to add an expiration date of June 30, 2021; Ms. deMedeiros recommended that they also prohibit any spending from that account until next year.

Mr. Marcello added that a future ordinance could further outline a procedure for reviewing and distributing the casino revenue moving forward.

But when Ms. Driggs suggested that the council table a vote for two weeks, stating that the ordinance was not “ready for primetime,” Ms. Hilton said they were in a bit of a time crunch considering that the budget committee was meeting the next day, Aug. 6. Once those numbers were final and the FTR process began, Ms. Hilton said there would be nothing they could do.

Although both Ms. Driggs and Ms. Cook took issue with this, resident Jerry Larkin (speaking for himself, not on behalf of the school committee) advocated for the council to use its best judgement on the matter, even if it meant diminished public participation.

“I think this is an opportunity for you guys to really be fiscally responsible for the town,” he said.

Ultimately, the majority of the council agreed, voting 5-2 to pass the ordinance with a June 30, 2021 expiration date and the following amendment: that “any monies transferred into the municipal capital account cannot be expended until FY22, with the exception for any emergent need upon a super majority vote of five out of seven council members.”

Ms. Cook and Ms. Driggs cast the two dissenting votes.