Department of Revenue guidance gives mayor discretion over MGM community development fund; councilors raise concerns about transparency

Kathy Jarrett of the finance team told the Finance Committee on Jan. 27 that Department of Revenue guidance issued in December 2023 changed how the city may use payments from MGM’s community development fund, and that the guidance places appropriation authority with the mayor.

“That money is now, is the considered the mayor's money. He makes all the decisions on this money,” Jarrett said. She told the committee the city has received $15,000,000 into the MGM Community Development Fund to date and that about $6,000,000 remained unallocated at the time of the meeting.

Councilors reacted strongly to examples of recent uses and to the process. One councilor said roughly $7.9 million had been spent on the Court Square Urban Renewal Plan and questioned whether downtown-focused spending reflected the broader community’s priorities. “That is really, really disturbing to me,” a councilor said, adding concern that the council and community were not notified before commitments were made.

Jarrett described the mechanics: department heads submit requests to the mayor; the law department confirms eligibility under the uses set out in the community agreement; finance certifies the availability of funds; and the mayor decides whether to appropriate. Commitments listed for the community development fund included affordable housing through the SRA, early education, and renewal work in Court Square and Bruce Landau Way (an estimate of about $960,000 was cited for Bruce Landau Way work).

Committee members requested the law department memo and mayoral letter that explain the Department of Revenue’s reinterpretation; Jarrett said she would circulate the law department memorandum and other supporting materials. Several councilors asked that the council be given an opportunity to propose priorities or recommend allocations to the mayor. Jarrett said the mayor could hold funds or consider proposals presented by councilors and department heads, but the formal authority to appropriate rests with the mayor under the DOR guidance.

Other funding items discussed: one-time MGM host-community payments were used in FY24 to help balance the general fund after DOR guidance required certain receipts to enter the general fund; Jarrett said that FY24 use was approximately $2.9 million. Councilors also asked for a fuller accounting of MGM-related revenue streams (including Chapter 121A payments and other casino-related receipts) and for transparency on how those separate buckets are being spent.

Some councilors proposed directing unallocated casino or cannabis stabilization funds toward property tax relief or neighborhood needs; committee members agreed to review the figures, consult colleagues, and return with proposals. The committee scheduled continued follow-up and asked finance to circulate memos detailing past commitments and the remaining balances.