Newton Independent
The Newton City Council will discuss the the execution of a $760,000 loan agreement between the city and the owners of the Iowa Speedway at a special meeting set for 6:30 p.m. Monday at city hall.
The City has been requested to assist the Speedway in freeing up their funds for some immediate obligations and significant investments related to upcoming Speedway events, like the motorcycle rally set for next week.
Under the current agreement, the Speedway would typically pay their taxes in September and receive an immediate rebate from the city once the County releases the funds to the City and council gives approval.
Speedway officials have proposed paying their taxes early and expedite the rebate payment from the city so that they can have access to their cash for their expenditures. Their taxes are kept in a special escrow account which is required to be used only for their tax purposes. As such, the Speedway does not have access to these funds which restricts their cash flow. By rebating the taxes early, the Speedway can access their money.
Because this is out of the normal process and schedule for tax payments, the Speedway can pay their taxes early, but the County cannot release the funds until certified allocations are sent by the state.
An agreement is being prepared, council members were told in a report on the matter released today, that will allow the city to cover the rebate costs once the taxes have been paid. A check for $706,402, equal to the amount of the rebate, will be sent to the Speedway upon approval of the agreement and verification that the taxes have been received by the County.
The Speedway is agreeing to cover all costs of the City, including lost interest on the payment, attorney fees and any other out-of-pocket expenses incurred by the city.
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