Cavan-Monaghan Receives Q4 OLG Payment

Last month, Cavan Monaghan received the fourth quarter (January 1 – March 31) payment from the Ontario Lottery and Gaming Corporation (OLG) totaling $72,868 for hosting Shorelines Slots at Kawartha Downs.  This payment brings the township’s total payment for OLG’s fiscal year to $324,499.  Since the gaming site opened in November 1999, Cavan Monaghan has received $61,698,336.

When this income stream began, it was used to subsidize the township’s operating expenses and fund capital purchases which reduced the municipal property tax rates required to maintain a balanced budget. Given the uncertain nature of this income, the township approved two external studies, Potential Impact of Loss of OLG Funding Report (2012) and the Modified Service Delivery Review (2013) to assess the impact of a potential elimination of this income stream.  The recommendations were to bring Cavan Monaghan tax levels up to comparator municipalities and no longer utilize the OLG revenues to subsidize the municipal tax rate. This triggered a decision to begin the process of increasing our municipal property tax rates to ensure the township continues towards independent financial sustainability.  In 2013, the OLG revenues were eliminated as a source of funding from the operating budget, and by 2015 this revenue was no longer funding annual capital expenditures either.  At that point OLG funds were no longer the primary source of revenues for investment to the Asset Replacement Reserve.  Since 2016 the municipality has transferred approximately 77% of the annual audited depreciation to the ARR without the use of OLG revenues.

When the construction tenders for the Cavan Monaghan Community Center (CMCC) facility came in over budget in 2019, Council decided to fund the overrun of $2.4 million through an internal loan (borrowing the funds from its own reserves) with repayments from the annual OLG revenues.  Since 2020, OLG revenues have been used to repay this loan, but unfortunately Covid struck and interrupted this revenue stream for more than one year.  Since its return in 2022, it provides approximately $300,000 of revenue per year.  At the end of 2023, the outstanding balance on this internal loan was $1.3 million, and should these payments continue at this level, the loan will be paid off in the next three to four years.

OLG payments to the host communities are based on a formula consistently applied across all gaming sites in Ontario using a graduated scale of gaming revenue at the hosted site.  The objective is to share the proceeds of casing gaming with the host communities.  All OLG profits are reinvested within the province.  KG

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