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Charitable gambling revenues dropping fast

Revenues going into a charitable fund Cottage Grove has used in the past to help finance youth -- and community-oriented groups is shrinking fast, leaving City Council members searching for ways to continue the subsidies.

The city's Charitable Gambling Fund has seen a "precipitous drop" in returns from pull-tab activity in recent years, according to city administrator Ryan Schroeder, putting disbursements for programs like matching funds given to the Jaycees for Fourth of July fireworks into question. In 2005, fund revenues were about $24,000, in 2006 they were $10,000 less.

The city gets 10 percent of net profits from any lawful gambling.

In the late-1990s, the city decided to support agencies and programs like Strawberry Fest, crime board and the city's ice arena through gambling proceeds Cottage Grove received from pull tab revenues. But as establishments like DeMori's and New Moon closed their doors, and ones like Ruby Tuesday's moved in, the city has seen those charitable funds drop -- and fast.

"We didn't want to create dependencies to the general fund," Schroeder said.

Neither the ice arena, Strawberry Fest nor the crime board received any allocations in 2007.

At a July 18 workshop, Mayor Sandy Shiely and other council members expressed concern at the lack of money available for payout from the fund. Opinions differed, though, as to whether a "contingency fund" of general operating budget money should be used to continue allocations to the groups in need.

Shiely said she feared Cottage Grove would "lose things that make the community fun" if donations from the charitable gambling fund cease. "The value of this fund is that every citizen of Cottage Grove gets to benefit from that $3,000 that we spend," on fireworks funding, she said.

Council member Fred Luden said he wouldn't disagree with infusing the charitable fund with an allocation from the general operating budget.

"The incremental cost isn't that great to give people something they enjoy," he said. "I wouldn't mind seeing us do contingency out of the general fund."

But visions of the kid-in-the- candy-store-type problem of groups asking for more and more money worried council member Pat Rice.

"I like sticking with the program we have going right now," he said. "Who knows, we might get another business who wants to bring back pull tabs."