A bill signed Tuesday by Gov. Arnold Schwarzenegger could end up netting the city of Temecula millions of dollars from the state's Indian Gaming Special Distribution Fund, an account that some tribes with casinos pay into each year.
The bill, SB 856, is known as a "trailer bill," a piece of legislation that ties up loose ends following the passage of the state's annual budget.
In 2007, the governor raided the distribution fund, diverting $30 million into the state's general fund that was tabbed for cities and counties because, as he said at the time, he was concerned about how that funding was being spent.
His action Tuesday "restores" that funding and it is to be used, according to the text of the bill, for providing grants to local government agencies affected by tribal casinos.

"Those concerns (prompted by a state audit) have been addressed in the administration's view," said H.D. Palmer, a spokesman for the governor's Department of Finance.

Temecula Councilman Ron Roberts, the city's liaison with the Pechanga Band of Luiseno Indians, heralded the bill's signing as great news for the city and he said it would be applying for millions of dollars to help offset the costs the city incurs related to the tribe's casino.

"A minimum of $2 (million) or $3 million," he said, detailing the amount the city will be seeking.

In the past, the money has been used for police and fire services and road projects. Roberts said he expects the city will make similar use of the money this time.

The city earlier this year submitted a grant application for $1 million from the fund but City Manager Shawn Nelson said Tuesday that the city would be resubmitting an updated application consistent with the range Roberts described.
According to the Legislative Analyst's Office, the distribution fund is running a multimillion-dollar annual deficit due to amended compacts the state signed with the Pechanga, Agua Caliente, Morongo and San Manuel tribes.
Those tribes no longer pay into the fund; they send money directly to the state's general fund ---- Pechanga must send a minimum of $42.5 million to the state each year ---- and the loss of revenue means the fund could be depleted by the end of 2011-12.

If the distribution fund is exhausted, Drew Soderborg of the analyst's office said the general fund would need to be tapped to backfill the hole.
The analyst's office has recommended cutting the amount of money that goes to local government agencies from $30 million to $5 million or $10 million a year. But that assumes that some tribes either have entered or are entering into separate agreements with the government agencies directly affected by their casinos.
In Temecula, that is a point of contention, and the city is suing the Pechanga tribe because, it claims, the tribe has not fulfilled its obligations per the compact.
The tribe, earlier this year, signed a deal with the city that would have the tribe paying the city $2 million a year and, in a few years, $10 million for the Temecula Parkway interchange project.

A clause in that deal, however, states that it doesn't take effect until a separate agreement with the county of Riverside is signed and city officials have said the tribe and the county aren't making progress, a situation that forced the city's hand on the lawsuit.

The tribe has called the city's lawsuit a "political ploy" because it was filed before the election, even though tribal leaders say there was still a possibility for more talks.

Roberts said that any money the city gets from the fund would be deducted from the amount the tribe is on the hook for under the terms of the agreement that has not yet taken effect.

"It's a credit," he said. "We all win."

In addition to grants for government agencies, the money in the distribution fund is used for casino regulation, problem gambling programs and grants for non-gambling tribes.

Call staff writer Aaron Claverie at 951-676-4315, ext. 2624.