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Casino mitigation funds held up by state

By Sam Womack/Staff Writer

State officials are withholding $1.3 million — derived from Indian gaming proceeds — intended to help pay for police, fire and other public-safety needs in communities surrounding the Chumash Casino Resort in the Santa Ynez Valley.

The funds are part of the Indian Gaming Special Distribution Fund (SDF), which is made up of payments from Indian tribes — including the Chumash — operating state-sanctioned casinos.

A portion of the funds are supposed to be used to provide grants for local governments adversely affected by tribal gaming operations, according to state law.

For the past few years, Santa Barbara County has benefited from the grants, which helped pay for increased sheriff’s deputies, paramedics and road work.

State officials held up payments from the fund after determining that some of the grants were being used for inappropriate purposes.

A bill that would revise the grant process is pending in the Legislature. If it is not approved, Santa Barbara County will be $1.3 million short of what it needs to continue public-safety operations at the same level as previous years.

Without the grants, said County CEO Mike Brown, “I have a $1.3 million problem in my (2008-09) budget.”

The Santa Ynez Band of Chumash Indians is one of 25 tribes with a state compact stipulating that payment would be made to the SDF based on gross revenues earned from operating class III gaming devices in use before the ratification of the 1999 compact, according to a state audit.

The Chumash have paid $30,251,239 into the SDF since 2002, and the last four quarterly payments totaled $6,442,456, said Frances Snyder, a spokeswoman for the tribe.

A state audit in 2006 revealed that local governments did not always use SDF money to mitigate the effects of the tribal casinos.

For example, according to the report, “The Sheriff’s department in San Diego County received over $149,000 to purchase a device to analyze chemicals from arson ... and suggested that in the future some of these investigations may occur in the area around the casino.”

Because of this and other concerns, Gov. Arnold Schwarzenegger, in essence, froze mitigation funds until the grant process was reformed, according to state department of finance reports.

However, mitigation grants to local agencies are the lowest priority for the SDF under state law.

The first priority of the SDF is to backfill, if necessary, a separate fund, called the Indian Gaming Revenue Sharing Trust Fund (RSTF), which provides $1.1 million to each non-gaming Indian tribe in California.

Funds are also allocated to gambling addiction and awareness programs, and to provide for the regulatory activities of the gambling commission and the department of finance.

The 2008-09 state budget proposal shows that $40 million is set to be transferred from the SDF to the RSTF.

Funding for local agencies to offset the impacts of a casino in the community shrunk from $30 million to $285,000, according to state department of finance officials.

None of the SDF monies are scheduled to be dispersed to agencies in Santa Barbara County.

As of June 30, 2009, the state department of finance estimates that about $158.8 million would be available in the SDF. However, with amended compacts, the number of tribes donating decreased to 21.

“The potential threat of the loss of SDF monies for much-needed funding for important projects that affect the entire community has us all worried,” said Chumash Chairman Vincent Armenta in a column published today by Santa Maria Times. “Communities ... depend on the funds for critical projects and services that may not be funded otherwise.”

Santa Barbara County CEO Mike Brown said the tribe started providing funds to the county to mitigate the effects of the casino before the 1999 compacts were drafted.

Since the compact, the mitigating grants have provided three full-time equivalent (FTE) paramedics and six FTE sheriff’s deputies — one through a grant to the city of Buellton.

Sheriff Brown said he is confident a bill in the Legislature to reform the grant process to local agencies will be approved.

Assembly Bill 1389, by Assemblyman Alberto Torrico’s, D-Freemont, has been referred to the Senate Governmental Organization.

“It’s an important resource that we need in order to provide service to the Santa Ynez Valley,” Brown said. “We’ve been working hard through the state sheriff’s association to fix this problem.”

The grant-funded paramedics provide a necessary resource by providing medical assistance while the three-man fire crew can attend to other emergency situations.

“For five years, it’s been a benefit to them, to Station 32 in the Santa Ynez Valley, to the community and to the county,” Santa Barbara County fire Capt. Eli Iskow said.

Sam Womack can be reached at 739-2218 or swomack@syvnews.com