Cripple Creek’s Role as Preservation Watchdog May Have Backfired

State auditors recommend more historic guidelines

~ by Trevor Phipps ~

It used to be that the state government could only audit other Colorado entities and not municipalities.

But that was before the arrival of limited stakes gaming, which generated millions of dollars in taxes and historic-related dollars, a hefty share of which went to Cripple Creek, Black Hawk and Central City.  

 Recently Cripple Creek officials helped rally to get a law written that allowed the state government to audit the gambling towns regarding the use of historic preservation funds.

The audits are now conducted to make sure that Colorado’s gaming communities are using the money they get from the state’s historical fund appropriately. This issue has been a topic of much debate over the last few years, and finally a system was established to monitor how the gaming towns were spending historic dollars.  

Colorado casinos have to pay a percentage of the gaming proceeds they earn each year to the state as a tax. The government then takes this money and uses it to support many state programs. The state takes a percentage of the money each town generates and gives it back to the three gaming communities for historical preservation purposes. Under this formula, the more a town generates in gaming revenue, the more money they get back each year to use to preserve their town’s history. Some critics, including officials in Cripple Creek, have questioned if this funding process was getting abused.

Towards the end of November state auditors went into each city that allows gaming and recorded how they spent historic preservation dollars. However, the auditors had little guidelines as to what was considered historical preservation and what wasn’t. The only rules they had to go by were out of the Colorado State Park’s manual that described what historical preservation meant as far as state parks were concerned. The manual defined historical preservation projects as things like replacing walls in old buildings and other procedures that physically help preserve historic structures.

However, the state officials don’t believe that using these guidelines was fair, since all three of the gambling towns use money from the state fund to do other related projects than just aesthetically restore structures within their communities. For example, the audit found that Cripple Creek uses a large amount of the state historic fund money they get back on such expenses as operating museums in town and doing historic classic melodrama shows at the Butte Theater. The city of Black Hawk, meanwhile, uses a good chunk of the money they get back to improve infrastructure within the city.

Officials from all three towns argued that many of these projects were essential for preserving the history of the area. The state auditors did not disagree due to the fact that there is currently no legislation that defines what can be considered historic preservation and what can’t.

So, with this report, auditors decided to classify all of the money spent by the cities into two categories. The first category was considered the “narrow” definition that dealt directly with restoring old buildings. The second category, the “broad” definition, lumped together all of the other expenditures that do not have anything directly to do with preservation of historic structures.

The results showed that Cripple Creek had the largest percentage of state money spent on items that fell into the broad non-preservation definition. Black Hawk spent the biggest percentage on restoring structures, but also spent more of their money on infrastructure improvements than any other gaming city did. Unlike Black Hawk, Central City and Cripple Creek used a healthy percentage of the state fund to operate museums. Cripple Creek is the only town of the three that spent some of their state historic monies on theater operations and marketing for the city.

According to Cripple Creek City Administrator Ray DuBois, the state audit found that there was no wrong doing with the way any of the three cities spent their allotted money. The state report hints that a big hurdle with this auditing process is that no specific laws state what the voters believe constitutes historic preservation and what doesn’t.

More historic scrutiny down the road?

The audit report suggests that state legislators draft a law that clearly depicts what the state historical fund money can be spent on.

However, officials of all three gaming municipalities were on record in the audit report as objecting to this recommendation. Moreover, they do not believe there is a need for the state to outline what historic projects the cities can spend their money on. Gaming town officials argue that each community is different. Consequently, what can be done to preserve history in one town may vary from the next.

Initially, Cripple Creek leaders supported the idea of the audit report because they contended that major abuses were occurring in Black Hawk, and they wanted more guidelines on how these historic monies could be allocated. Creek officials argued that a level playing field didn’t exist, with Black Hawk shattering the idea behind the limited stakes gaming law that emphasized saving historic buildings and preserving a historic look.   

As a result, the findings may come as a disappointment to some Cripple Creek leaders, who were hoping that state officials would come out swinging and cite the state’s gaming Goliath town with many historic violations. That obviously didn’t happen.