Davenport’s due diligence costs from its attempted acquisition of the Rhythm City casino are expected to total near $600,000.

The city has paid $150,046.31 and is processing a $387,500 bill for accounting services, bringing the total to $537,546.31. Interim finance director Brandon Wright expects a few other bills to eventually bring the total to nearly $600,000.

Data generated through the due diligence process is expected to be applied to any land-based casino project presented to the city during the current search process to determine the financial impact on the city. The Riverboat Development Authority decided earlier this month that it would lead the process of finding a possible operator for a land-based casino.

Funding for the due diligence is paid for with capital improvement funds, Wright said. How it would affect other capital projects hasn’t been determined because future gaming revenue could be involved.

“We’ll wait a little bit to see what happens,” he said.

When the Quad-City Times asked for the name of the accounting firm that billed the city $387,500, Wright declined to identify the firm other than it was one of the “big four.” Those are generally identified as Deloitte & Touche, Ernst & Young, PriceWaterhouseCoopers and KPMG.

The accounting company had demanded confidentiality as a condition of doing the work, which is a standard practice in projects such as this, city attorney Tom Warner said. If someone wanted to push the issue, the city would have to alert the company and give it the opportunity to get a court order to prohibit disclosure.

Costs already billed are $77,413.95 to Ahlers and Cooney of Des Moines for attorney fees, $49,627.29 to Public Financial Services for financial consulting, $21,341.20 for gaming consultant Gary Buettner, $1,165.12 for travel and $498.75 for lunches.

Editor's note: On Tuesday, March 26, 2013, the city identified the accounting firm as Deloitte and Touche after getting permission from the company to do so. The company’s bill will eventually appear among a list of city bill payments.

(33) comments

davenportchick

Altogether now everyone Google "How to IMPEACH A MAYOR" and start proceeding on it NOW. IT IS POSSIBLE.

Voice of Truth

DChick - agreed. But really, most all of the council should be rotated out of office. Almost all fell in step with Gluba and voted for spending the money and moving forward. Lemmings. Many of them participated in the "meetings" that took place and jumped on the band wagon about this issue.

The only one that didn't fall into step, formed his own conclusion and could see that the City should not be in this business was Matson. He was the sole vote against.

Keep Mike Matson, dump the rest.

billy hoyle

I'll vote for him if he admits to being a coward for sending out info using other alderman's names......allegedly.

REFORMAT ME!!!

Terry W

What a bunch of BS.......I regret the day I moved to this city, they take your money and give you NOTHING. I tell everyone I can to NOT move to Davenport. These City leaders are a joke!

billy hoyle

Long story short - it cost the city $600K to get the RDA off their a**

LNorman

There no comparing Dubuque Sioux City nor Prairie meadows here. they don't have any competition We have 5 in less than 50 miles apart a Casino in Dav, Bett, RI, Lone Tree and off track betting at E.M.Downs soon to have slots I haven't seen any discussion on this.

beman101
beman101

When you pay someone for advice they will always tell you what you want to hear. this has been a total waste of taxpayer money. remenber this when it's time to vote. unless they want to change that now.

Voice of Truth

Crusader- my point isn't that they didn't hire consultants. My point is the project should have never been started. City Government should NOT be in the gaming business, regardless of the so called success stories from other places. This is not what government was intended to do. Also, when a public governmental body has to conduct confidential and secret meetings regarding the project, prepay contracts (for no apparently reason) and spend almost $1M on due dillegence...perhaps the caution flag is going up. When a City government hires a contractor to build a road, replace sewers, build water lines, fix traffic signals...those are projects a government knows how to deal with. Clearly, when this many "consultants and advisors" are needed, it is another Caution Flag that perhaps....they don't know what they are doing.

The next issue is the outrage from the public. At no time, did the Council listen to the public or ask their opinion about this project. Spending $50M and they don't listen to the public, they just forge ahead with blinders on, hoping the consultants and advisors know what they are doing. The reality is those advisors and consultants have vested interests in making sure this project goes forward, that assures them of continued fees and work.

The CIty of Davenport needs to do the business of the people. Period. The City of Davenport needs to stay focused on projects and business they understand and are prepared to deal with, not something nuts like gaming. My goodness, just think what the City could have done with $1M...spent on business incubator, street repair, the museum, parks, etc...you know...the business of government, This was a complete mistake that cost the City $1M in funds that are crapped away on consultants and advisors for no gain and no value.


nancyjo2020
nancyjo2020

We might as well have Rita Crundwell running this city.

Crusader

Stop. Think. Please, think for just a few seconds. All of you who have accused the city of NOT doing their due diligence, that they didn't "have a clue", I would submit this as evidence that they knew exactly what they were doing. A gaming expert, financial experts, bond experts, Big 4 accounting firm. And this doesn't include the analysis done by Wil Cummings, THE expert on gaming in Iowa. You folks need to get out of the way (QC Times included) and let the experts do there job, make the city money and lower taxes. But nooooo, you all are the experts. You all are the ones who are the experts. Really?

credit island

Stop to think yourself, Crusader , the DCIC did not have any legal legs. That is why the City gambling proposal went down. Sorry you can't see this, Crusader. Next up, spend some time figuring out what the City of Davenport's liability is to Ingenus Management and Consulting. You know, the group that was chosen by a vote of the DCIC. Back side of a barn.

Crusader

You have yet to show how it was not legal. I have read the by laws and the specifically the conflict-of-interest sections. None of the members could earn a salary from their position. They all want the casino to be successful. Please tell me how there is any conflict. I have asked many times on a number of posts and have yet to receive an answer. A conflict means they can make a decision that would lead to their financial benefit. Please show me how that can happen. What has happened is that enough people just smart enough to be dangerous have cried "wolf" and the have scared some good people from doing the right thing. More revenue, lower taxes. You would poke yourself in the eye with a sharp stick if someone told you it would hurt the city. Ingenus should hold liable the RDA and specifically Don Decker, personally, who has done nothing but blow smoke up peoples' behinds, and Christine Fredricks (DCIC member and sister of Cathy Cartee, lawyer, muckraker and yelling attendee at Decker's personal party at Pepperjack's) who has blown up the deal for no reason. Connect the dots. That is who should be sued.

credit island

Crusader
Read this section 11.1 of the DCIC bylaws ,slowly. Take off your bliders and read it slowly so you understand what is says. Do you know what the definition of the word entity is. If you still can not get it, you can't be helped. Just can't be helped. Sorry.
ARTICLE XI
NO VOTE ON CONFLICTING MATTERS AND TRANSACTIONS IN WHICH
OFFICERS OR DIRECTORS ARE INTERESTED
Section 11.1. No Vote On Conflicting Matters. Every Director of the Corporation owes
a duty of loyalty to the Corporation. Further, it is imperative that each Director avoid any
conflicts of interest with his or her duties as Director. Accordingly, no Director shall vote on any
matter which grants, confers or otherwise conveys economic benefit to such Director or to an
entity of which any Director or any member of his or her immediate family is an officer, director,
shareholder or employee. On an annual basis, and on a form approved by the Corporation's
Board of Directors, each Director shall confirm in writing that he or she (and his or her family)
have no conflicts of interest with the Corporation or, if so, the nature of such conflicts.

RIC

People are rightfully concerned...but is anyone going to do anything about it? $70K for attorney fees because our city attorney is incompetent. They cut cops and fire fighters but throw money away on an albatross . So sad but no one will stop it

Voice of Truth

$600,000 in fees and costs to do an analysis of a project that so many people didnt want that it died due to lack of interest. Truely speechless. $600,000 in tax payer funds truely and completely wasted. Some one besides the tax payers should pay for this. The statement about confidentiality of the accounting firm who billed the City $400,000 in fees for their expert analysis should be disclosed. You take a public client, you accept the public nature of the business. Willing to bet the actual firm was more of a large local firm vs. the big four, Confidentiality...What a joke, at what point in this process is the CIty of Davenport council finally going to figure out that this is public money and there are citizens involved and you are spending public money. Confidentiality is what got you into this mess. Rotate everyone out...except Matson. He was the ONLY one that could see it!

billy hoyle

If only he had the stones to take information public under his name.....allegedly. REFORMAT ME!!!

Arc Angel

Lets vote on it!

LNorman

THEY BEEN TRYING SELL US THEIR DOWNTOWN PLAY FOR 25 YEARS BY USING EVERY WORM IN THE CAN AND ALL THAT HAS DONE IS COST US MORE MONEY WITH VERRY LITTLE RESELTS WE DON'T NEED TO OPEN A NEW CAN OF WORMS. I WANT TO USE MY TAX MONEY TO FIX MY ROAD THAT WE USE EVERYDAY THAT'S WHAT ITS TO BE USED FOR INSTEAD OF USING IT TO BUY A CASINO MOST OF US DON'T EVEN GO TO. NOW THEIR TRYING TO RE- SELL US ON THE TERREST TRADE AGAIN THAT HAS NEVER BEEN AFFECTIVE THE FIRST TIME YET. THE TRUTH IS THE COST OF SAVING DOWNTOWN HAS PROVIN TO BE TO COSTLY IT'S NOT A PLACE TO SHOP ANY LONGER IT NEED TO BE GREEN THEN ALL WE NEED TO DO IS CUT THE GRASS AND THAT WOULD MAKE IT EASER AND LESS COSTLY TO CLEAN UP AFTER THE FLOOD

StarvedRock

$600,000 are you kidding me! Gluba you and your cronies are out of control! Please leave...

CGE
CGE

This, amoung other reasons, is why city residents and business owners wanted to be part of the decision making process from the beginning. It should not be just a small group of city leaders who think they know what is best. $600K wasted. Thanks.
Wish we could hear the truth from all the Alderman who know more about this.

Mister Know It All
Mister Know It All

It's time for Davenport's Elected Officials to stop coming up with one goofy idea after another (Casino, Round Abouts, Planters in the middle of the Road, reducing the number of traffic lanes a major thoroughfare), and start paying attention to the deteriorating infrastructure of the City.

KingJoe

In September Kurt wrote the following: "Davenport has put an early end to its two-year agreement with a developer who had the rights to bring a land-based casino to the city and will pay the developer $99,000.

By getting out of the agreement that would have ended in November, the city is able to speak with other interested gaming companies or developers immediately, rather than be limited to those brought to the table by Chicago developer MSEG Inc.

The termination agreement includes an immediate payment of $49,000 to MSEG, followed by a contingency payment of $50,000 when a third party applies to the Iowa Racing and Gaming Commission for a license."

Where is this accounted for? Why did the city opt to pay off MSEG to start speaking with other developers some 60 days earlier then the contact experation date? Now 6 months later and $600,000.00 plus, plus spent and the city is no further along. In the private sector this type of incompetence would result in multiple firings. In government we end up giving theses same people raises. No accountantablity...yes spelled right....no one at the city responsible. The Chamber hiding as usual. This paper should have filed under the freedom of information act a long time ago and got answers. Grow a set and investagate.

Betttaxpayer

I know it's not a grat deal of money but I never understand why these politicians can't buy their own lunches! Geez, they get a paycheck, can't they buy their own lunch like the rest of us?

credit island

I guess for some Bettendorf taxpayers this would not be lots of money, but not to Davenport taxpayers and wait until Igenus Management and Consulting gets done suing, Malin, Warner and the City of Davenport for it's illegal DCIC and selection of their proposal. This money total is yet to go up. In the meantime enjoy the bald eagles, for free, at Credit Island, while you can, before the City is forced, once again, to cut back on park upkeep and maybe sell property to meet its debts.

Through the Looking Glass

Not a great deal of money? Maybe this money would be better spent on cops for patrol and enough fire fighters to staff all of the fire trucks so one isn't closed every day! How many pot holes does this fix? Our city leaders should be on trial.

Jeffrey Smith

Simple boys, the law says the information resulting from their study is accessible to the public. Who actually did the work does not have to be. These companies may feel that it could have a serious and negative impact on their business if their name was released.

Voice of Truth

Who knows...but if a reporter really wanted to find out, they can FOIA the City's payments and see who was cut a check for $380K & change. Might be a tell tail sign. Because the City won't disclose it...we can speculate, it likely wasn't a big 4... it was perhaps another more "local firm", made up of City Council pals and cronies. You are right....it would have a negative impact.

Jeffrey Smith

That really depends. FOIA is not all encompassing. There are exemptions from FOIA.

But you are right - there is little use of FOIA here - which can be the easiest and fastest way to get information.

credit island

This is the Quad City Times Editorial Board back in October, 2012


Davenport officials today will announce a plan to enter the casino business by purchasing the Rhythm City Casino for $46 million.

Officials who met Monday afternoon with the Quad-City Times Editorial Board said the purchase will not require taxpayer money and will bring millions of dollars in revenue to the city.

At a news conference today at City Hall, officials will lay out their plan.

The Davenport City Council will have its first discussion of the asset purchase terms with Isle of Capri, owner of Rhythm City, at its meeting Wednesday. A council vote expected on Oct. 24 will allow the city and Isle of Capri to negotiate further and also open up discussions with the Riverboat Development Authority, the nonprofit group that holds the casino’s gambling license.

Mayor Bill Gluba called the proposed purchase “a game changer” on Monday. The purchase could be completed by mid-2013, but that is an aggressive timeline, officials said.

The city would continue to operate the casino in the current riverboat until a land-based casino could open. Officials said that could be in 2015.

The purchase terms were completed Friday but aren’t the end of negotiations, Isle of Capri spokeswoman Jill Alexander said Monday.

Joining Gluba at Monday’s meeting were City Administrator Craig Malin, aldermen Jeff Justin, 6th Ward, Bill Boom, 3rd Ward, and Gene Meeker, At-Large, and City Attorney Tom Warner. Also attending at Davenport’s invitation was Dubuque City Manager Mike VanMilligen.

Contemptio

B.S. If Tax dollars are used, the books must be open.

When the Quad-City Times asked for the name of the accounting firm that billed the city $387,500, Wright declined to identify the firm other than it was one of the “big four.” Those are generally identified as Deloitte & Touche, Ernst & Young, PriceWaterhouseCoopers and KPMG.

The accounting company demanded confidentiality as a condition of doing the work, which is a standard practice in projects such as this, city attorney Tom Warner said. If someone wanted to push the issue, the city would have to alert the company and give it the opportunity to get a court order to prohibit disclosure.

TruthOnlyBeTold
TruthOnlyBeTold

I agree, that does seem odd. I always thought that public entities had to publish all their expenditures on a regular basis in the newspaper. How can any company that is doing work for the taxpayers have the right to keep their name a secret from the very people they are working for? And why in the world would they want to keep their name a secret? Are they not proud of their work?

Why would this interim finance director even bother to narrow it down to "one of the big four"? Is he just teasing the public by saying that? Sort of like...I know, but I'm not gonna tell you even though you are paying the bill...but just between me an you...here's a hint....

Whatever....keep it a secret then...one good thing, come election time people will remember.

mendelmen

Thats alot of unfilled potholes.

KAQ

What a shameful waste. Somewhere down the line this $600,000.00 will ultimately come out of the tax payers pockets. It's no wonder the economy is in the trash with politicians spending needlessly like this. Oh well take another trip Gluba, you worked hard to spend our money - you deserve it.

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