Fife looking for money after Puyallup tribe denies request for $2.7 million

For more than a decade, the city of Fife has counted on Puyallup Tribe of Indians money to help balance the city’s budget.

Recent letters from the tribal Chairman Bill Sterud changed that. The tribe, which operates one of its two Emerald Queen casinos in Fife, won’t be giving the $850,000 it usually contributes to the city budget this year, Sterud told the city. Nor will the tribe fund the city’s request for $1.926 million to help improve Pacific Highway East near the casino.

That $850,000 had been the amount the tribe has been giving to the city for more than a decade under an agreement with Fife and several other local governments.

A committee of tribal members and local government representatives is in charge of allocating each government’s share of 2 percent of the tribe’s gaming revenues to help pay municipal costs created by the tax-exempt tribal properties.

This year, that committee recommended no contribution to Fife unless the city specifically enumerates its costs for serving the casino with police, fire and transportation services.

Fife City Manager Subir Mukerjee maintains the agreement the city signed requires an automatic contribution without any specific itemization of the city costs of serving the casino. The tribe said it has left the door open to discussing the issue, but no talks have yet been scheduled, Mukerjee said.

With the issue still in play, the City Council this week is scheduled to consider a revised budget for the second half of the year to plug a shortfall of $1.2 million. Much of that shortfall is attributed to the lack of the tribal contribution. Mukerjee has proposed a series of interim measures to make up for the lost funds. None of those short-term measures involves cutting services this year, but future budgets may demand that action, he said.

The city signed the 2004 agreement after the tribe bought Fife’s largest hotel, the Executive Inn, removed it from the tax rolls and converted it into a tribal casino and hotel.

Tribal spokesman John Weymer said that the demand from local governments for tribal gaming revenues has grown to the extent that the tribe must be more selective about distributing those funds. The tribe is trying to ensure that the funds are targeted specifically for governmental services associated with the casinos, he said.

“If the truth be told, the impact of the casinos on local governments wasn’t nearly as much as they feared,” Weymer said. “In fact, because of the jobs they have created and the business they’ve attracted, they’ve been a positive impact on the communities.”

While the tribe intends to continue its charitable contributions that have aided community projects, such as a renovation of the Fife municipal pool, it likely will be more selective in its contributions to local governments, the tribal spokesman said.

The tribe, too, faces new monetary demands as it plans to update its casinos on both sides of the freeway. It has begun construction of a new multimillion dollar casino and parking garage just off Portland Avenue in Tacoma to supplement the existing casino on the east side of Interstate 5.

“Money is tight,” tribal attorney John Bell said.

The other local governments that asked for tribal money this year were granted their requests. In both cases, their requests included more detail.

The city of Tacoma asked for and was awarded about $723,000 from the tribe for police, fire and municipal court services that were direct results of responding to the casino in 2015.

Budget director Tadd Wille said the city gives the tribe a specific bill of services rendered to the casino at the end of each year. Last year, that included 565 Tacoma Fire Department calls to Emerald Queen Casino billed at $1,076.63 per call, 120 cases that went through the city prosecutor’s office, and miscellaneous jail fees from the Police Department of about $21,000.

“We had to sit down with them and showed them how we backed into the numbers and proved what we’re saying is true so they could get a sense and a feel of, ‘Are you really asking for what you really need or what you really did for us?’ ” Wille said. “This year they went a little more in-depth in trying to understand the numbers behind it, but there’s always some sort of review.”

Pierce County, according to a letter from Sterud, asked for about $550,000 in reimbursement for services and was awarded that amount. The county’s claims included specific amounts for jail services, prosecuting attorney services and medical examiner services.

In Fife, the potential loss of tribal funding could be cushioned by higher-than-expected sales tax collections as auto purchases at the city’s numerous dealers have rebounded from recession levels and construction activity has increased. That unanticipated income amounts to more than $900,000.

But council members have noted that more draconian measures, such as cutting programs and eliminating capital projects, may be necessary to balance the 2017-2018 budget. The city expects that in future years income from construction projects will level out or decline as land for building becomes more scarce on the margins of Interstate 5 where car dealers in recent years have built new multimillion-dollar showrooms.

The city’s highway improvement project is likely to be cut back without tribal funds to finance it, according to the city manager. That project would add a turn lane and sidewalks to Pacific Highway South.

Mukerjee said he was surprised the tribe declined to fund the highway upgrade. “It directly benefits the casino,” he said. “We asked the tribe for less than a third of the project costs.”

Fife Mayor Winston Marsh declined to talk about the denied funding request, saying the City Council values its relations with the tribe.

“We’d rather not comment about the money now,” he said. “We’re hoping for a good outcome.”

Mukerjee said the city has yet to consider how it could enforce the agreement if the friendly talks don’t produce a mutually agreeable result.

“We’ll deal with that if the time comes,” he said.

Tribal attorney Bell said the tribe has strong hopes the situation can be ironed out without having “to call out the lawyers.”

This story was originally published August 21, 2016 at 11:53 AM with the headline "Fife looking for money after Puyallup tribe denies request for $2.7 million."