HomeMy WebLinkAboutVideo Lottery Fund UpdateTO: BOARD OF COMMISSIONERS
FROM: DAVE INBODY
SUBJECT: VIDEO LOTTERY FUND UPDATE
DATE: 12/18/2009
CC: DAVE KANNER, ERIK KROPP
Background
Since the Oregon Lottery began, in 1985, more than $6 billion in profits have been allocated to public
education, economic development and natural resource protection. Video lottery revenue, which represents
the largest component of Oregon Lottery funds, are distributed to various education, natural resources and
economic development programs. This includes 2.5 percent of video lottery proceeds that is distributed to
counties on a quarterly basis for economic development. The chart below shows the quarterly payments
received by Deschutes County beginning in FY 2004.
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3Q CFS
W. '; b
Total
FY 2004
$113,174
$85,923
$110,049
$115,120
$424,266
FY 2005
$118,007
$123,985
$126,718
$66,524
$435,234
FY 2006
$130,694
$141,354
$152,138
$175,914
$600,100
FY 2007
$180,994
$189,864
$193,582
$183,560
$748,000
FY 2008
$193,159
$193,316
$183,773
$179,774
$750,022
FY 2009
$188,136
$171,726
$160,508
$97,491
$617,861
FY 2010
$119,116
$116,490
$114000*
$1 ; '
$46 ,106*
*Values in italics represent projections assuming a 2% decline from the previous quarter payment in 3Q & 4Q.
Deschutes County Allocation of Video Lottery Funds
Resources for the Video Lottery Fund was originally budgeted to be $581,000 in FY 2010. After receipt of
two payments, it is projected to be $464,500 ($461,106 in payments + $3,394 in beginning net working
capital).
Most of the expenses in the Video Lottery Fund are for grants. There are two exceptions: administration
and internal service charges, which are expected to be paid as budgeted a total of $16,662. Grants from this
fund are allocated in one of four ways.
• Service Partners ($212,773) - These grants go to organizations providing services directly
connected to county service requirements or obligations. These payments are made on a monthly
or quarterly basis.
• Community Grant Program ($200,000) - These funds are distributed to local non-profit
organizations for providing emergency food, clothing or shelter, protecting the abused and
neglected or providing health care, mental health and addiction treatment. These grants have
already been disbursed.
• Discretionary Grant Program ($75,000 budgeted, $30,000 projected) - Each county
commissioner was originally budgeted for $25,000 to be distributed to local non -profits
throughout the fiscal year. This was later reduced to $10,000 per commissioner after initial
disbursement projections were received from the state. Thus far a total of $9,950 has been
disbursed.
• Unallocated Grant Funds ($31,530 budgeted, $5,000 projected) - Additional funds were set
aside for grants that did not fit into any of the three established programs. In the past such
allocations were referred to as "off -the -top." This was also viewed as a source to adjust expenses
if payments came in lower than expected. Thus far $5,000 has been transferred to the Sheriff's
Office in support of the Shop -with -a -Cop program.
Potential Budget Shortfall due to Lower Revenue
Current expense projections can be met based on current revenue projections. However, this is through
utilization of nearly all of the contingency funds. With an understanding that revenue my decline in excess
of the current projections, the following options can be made to reduce the risk of underfunding
commitments from the Video Lottery Fund.
1. Withhold from spend the remained of the unallocated grant funds ($21,530 under budget).
2. Expenses for grants to service partners are based on four quarterly payments within FY 2010.
Since payments are not made until the conclusion of each quarter, fourth quarter payments will
not be made until FY 2011. For most service partners this is offset by a fourth quarter payment in
July 2009 for the final quarter of FY 2009. However, Deschutes County 2-1-1 is a new service
partner and therefore, will only receive three of four payments within the fiscal year ($6,250
under budget).
3. Maintain self-imposed cap on discretionary grants at $10,000 per commissioner. In addition,
consideration should be given to disbursing any additional grants immediately or after receipt of
the third quarter payment in February 2010 ($45,000 to $65,050 under budget).
4. Capital outlay of $100 is a placeholder for the fund and is not expected to be spent ($100 under
budget).
5. Contingency funds of $49,935 can also be used to offset any revenue shortfall ($49,935 under
budget).
Here is a summary of FY 2010 funds as originally allocated, spending through November 2009 and the
recommended allocation assuming the inclusion of the options listed above:
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Projected"
Administration
$8,282
$3,412
$8,282
Internal Service Charges
$8,380
$3,493
$8,380
Grants to Service Partners
$212,773
$97,110
$206,523
Community Grants
$200,000
$200,000
$200,000
Discretionary Grants
$75,000
$9,950
$30,000
Unallocated Grants
$26,530
$5,000
$5,000
Contingency & Capital Outlay
$50,035
$0
$0
TOTAL REQUIREMENTS
$581,000
$318,965
$458,185
TOTAL RESOURCES
$581,000
$238,613
$464,500
SURPLUS (l'EFICIT)
+$0
($80,352)
+$6,315
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