Encore Boston Harbor has not made its quarterly Host Community Agreement (HCA) payment on March 31 to the City, but it has assured City leaders it would make two quarterly payments of $12.5 million by at least June 30.
Mayor Carlo DeMaria and Chief Financial Officer Eric Demas said they continue to meet with Encore every Tuesday remotely – as they have done for years now – and have agreed to allow the company leeway as they focus on paying their employees a full salary while they bring in no revenue due to the COVID-19 casino closures (in Boston and Las Vegas).
“They did not make the payment on March 31,” said Demas. “They are in transition right now. I think they are one of the first companies to say they would pay their employees, and that includes tipped employees…They said they will be making payments soon and they told the City not to worry and would be fulfilling all of their obligations. They always have done what they said, so we support that…We understand their focus is on their employees right now and are 100 percent committed they will make good by June 30.”
Payments are due on the last day of each quarter, with the first payment in the current fiscal year coming last September. That payment was also late, but the Dec. 31 payment came early. Because of the COVID-19 situation, they will miss the March 31 payment, but have promised to make up the final two payments before the end of the fiscal year on June 30.
Quarterly payments come in two separate sums, one of $5 million and another of $1.25 million, for a total of $6.25 million per quarter.
“They’ve been an excellent business partner in the city,” said Demas. “Our liquidity remains strong so as long as their payment comes in by June 30, we’ll be fine.”
The payment, also, is subject to the Mayor’s extension on excise and property tax payments – as the HCA payment is technically both of those. So, like other taxpayers, Encore was officially granted the extension to June 30.
Rethinking the Budget
Right now, City finances all over the region are at a standstill, and with Fiscal Year 2021 looking to be very difficult, Everett is no exception though its financial position is stronger than some neighboring communities, Demas said.
“Fiscal Year 2021 is going to be tough,” he said. “Unfortunately, there not a lot that is known. It’s a waiting game. Right now the states are waiting to see what the federal government will do with Stimulus 4. They already will get 75 percent reimbursement for COVID-related expenses, so we know that. Until the federal government takes action, the states can’t take action. Once that happens, cities and towns across the country will know what to expect and what resources will be available.”
Everett is in a good position, however, because the City isn’t as dependent on revenue streams like meals taxes and hotel excise taxes. For year, Everett got little to no revenue from those sources. With the opening of Encore, that was going to be a new, and lucrative, stream of revenue. However, this being the first year of those revenues, Demas said the City was very conservative in its expectations.
The City budgeted to collect $3.2 million for both revenue streams this year, and as of March 31, they collected $3.7 million with one more quarter – albeit a very light quarter – to go.
That said, there are a lot of questions about real estate taxes and personal property taxes and this coming year’s budget.
“We had our budget together and nearly complete five or six weeks ago,” he said. “we were ready to start polishing it when this broke out…We are in the process of completely re-starting our budget process again…What I’m hoping is the state can get together as a group and put out one budget and streamline that state process so cities and towns will know what to expect.”
He said, for the City, they won’t have full numbers until two or three weeks from now, especially with deadlines being extended on most bills.
He said that despite the extension and the complications from the pandemic, Everett residents are doing a great job of paying online and dropping payments in the City Hall drop box.
“With the uncertain times we’re in, it’s important to realize all the positive things we have here in Everett,” he said. “We’re fortunate compared to a lot of other places.”