City Council remains in gridlock over Rialto’s funding request

Megann Horstead | For the Bugle

Discussions regarding the state of the Rialto Square Theatre has dominated public meetings the past several weeks as city and Rialto officials work to save the theatre and address other community needs.

The Joliet City Council continued these talks during a special session on Dec. 14.

The Rialto board recently forwarded a multi-year contract to the Joliet City Council for the purposes of discussion. Several weeks earlier, city officials presented a budget that didn’t highlight any funding for the theatre.

Councilman Michael Turk, noting that no one has the answers to the issue, said the theatre would likely go dark for a long time if not for the city.

“I think every year we’re going to have to subsidize it to ‘X’ number of dollars, but I don’t know what the ‘X’ amount of dollars is,” he said. “It needs to be a figure the city is comfortable with, and that we know the Rialto is doing their job to get the entertainment in, and that kind of thing. I think that in every community that has a theatre in it, from what I understand, they do subsidize their theatre to a certain amount of money. It depends on whether it adds to hotel/motel tax or the entertainment tax or whatever it is the patrons attend there.”

Turk added that those are matters Joliet officials need to look at moving forward.

VenuWorks is currently operating on a contract with the Rialto set to expire at the end of 2016. That agreement sets forth that management services are provided to the theatre in the amount of $1 per month.

Under the terms of VenuWorks’ proposed contract extension is one condition: requiring back payment of the theatre’s accounts payable.

The Rialto board approved an intergovernmental agreement with the city for multi-year funding at its Dec. 14 meeting. None of its members appeared at Joliet’s special council session that immediately followed.

The city said it remains unclear what happens to the relationship between the Rialto and VenuWorks beginning Jan. 1.

Mayor Bob O’DeKirk said it appeared to him that VenuWorks may walk away if the city doesn’t commit to their new contract proposal.

“I would think that before we were going to do anything, we’d need to see the contract between the Rialto board and VenuWorks, outline what VenuWorks is going to make, what they’re going to invest or pay,” he said. “I don’t know how we can make an intelligent decision without that information.”

Councilman Terry Morris agreed.

“We don’t know what VenuWorks is going to do,” he said. “I know they’re saying they need money to do what they’re going to do. It’s like us giving them money to see what they’re going to do.”

Long before the current council members and the Joliet mayor took office, the Rialto’s financial woes were adding up.

 

City attorney Marty Shanahan, pointing out a piece of state legislation outlining the authority of governmental agencies to issue general obligation bonds, said the Will County Metropolitan Exposition and Auditorium Authority [a unit of local government, created in 1978 to own and operate the Rialto Square Theatre complex and surrounding properties] has had the ability to help themselves and they’re not putting their powers to use.

O’DeKirk tried to explain further.

“They had the ability to have a referendum on the November ballot asking the voters of Will County if they could take a bond out for ‘X’ amount of money, whatever they thought they needed,” he said. “Instead of doing that, they chose not to do it. Instead, they’ve come back to the city of Joliet time and time again. This has really turned into in my opinion a public shakedown of the city of Joliet.”

O’DeKirk added that he doesn’t know, nor does the city control, the Rialto’s fate based on the council’s vote at their Dec. 20 meeting.

“To me, the current format is not working,” O’DeKirk said. “I think if we’re going to do anything, we have to look at making a whole-sale change and how we’re going to do business moving forward.”

O’DeKirk said it’s frustrating to know the city may have to pay for someone else’s wrongdoing.

“We can give money, but if we’re not going to give the full amount and VenuWorks is walking, then I’m not sure what we’re paying for,” he said.

Councilman John Gerl questioned whether the city should get involved in the Rialto’s problems stemming from nonpayment of accounts payable.

“Those are not our obligations,” he said. “I think the Rialto is going to have to work that through with VenuWorks, with the foundation, with the vendors themselves. I’m not sure how long any business is going to continue to float the Rialto, but I view those as [not] our obligations.”

City staff revealed that’s not the case.

Joliet officials learned recently from the accounting firm Wermer, Rogers, Doran and Ruzon, which prepares the city’s audit, that a bill to their firm was unpaid, as the Rialto owes the firm $20,400 for a 2015 audit.

Auditing standards require that auditors be independent. The fact that bills haven’t been paid poses a violation to their independence.

If the audit is not complete, the city of Joliet will receive either a qualified opinion or a disclaimer of opinion for their audit, which ends as of Dec. 31.

During the current fiscal year, the city allotted $600,000 toward the Rialto. Of that amount, $22,000 remains.

Gerl said a long-term solution is needed, but the council needs to take some action in the meantime.

The council came to a consensus that officials must vote at its Dec. 20 meeting on three separate measures.

  • The city will look to enlist the help of senators and state representatives to initiate legislation to rescind the public act establishing the Will County Metropolitan Exposition and Auditorium Authority board and transfer ownership of the Rialto properties to the city.
  • Joliet officials will consider making a request of the Rialto board to investigate and ask for a countywide referendum to be able to support themselves.
  • The council will look to authorize a $20,400 payment of an audit bill on behalf of the Rialto board using monies from the 2016 budget.

 

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