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Casino money to back bond payoff

Riverside OK’s bond sale to finance water, sewer improvements

Mary Zielinski

The Gazette

November 11, 2006

[Note: This material is copyright by The Gazette, and is reproduced here as a matter of "fair use" for non-commercial, educational purposes only. Any other use may require the prior approval of The Gazette.]

Riverside’s issuance of $2.2 million in urban renewal bonds will use revenue pledged from the local casino as security for the bond repayment.

The bond sale was approved after a public hearing at the town’s Monday night City Council meeting. The bonds are part of the financing for the water and sewer improvements, including a new water and a new wastewater treatment plant, that provide service to the Riverside Casino & Golf Resort.

The bond issue, handled by Ruan Securities of Des Moines, will be for seven years with a 6.5 percent interest rate.

Washington County already has issued $9.4 million in urban renewal bonds to finance the project. Repayment for that will be from tax increment financing revenue.

The county lent the city its bonding capacity to issue bonds.

Additional funds were needed when it became clear the project would exceed original cost projections.

The casino contributed $1 million, coupled with its $750,000 connection fee payment, and the city agreed to match it with money from the $ 1.75 million annual payments the casino is giving the city.

‘‘With the city receiving at least $142,000 per month from the casino, there should be no problem covering the debt,’’ Jeffrey Heil of Ruan Securities said.

The projected costs and repayment schedule also acknowledges the $175,000 annual payment Riverside will make to the county to offset the use of tax increment financing funds for the county bond issue on behalf of Riverside.