Early rebate for speedway approved
At a special meeting held Monday night, the Newton City Council conditionally approved a loan agreement for the ownership of Iowa Speedway to receive its annual TIF rebate payment about two months early.
“The speedway has some major events coming up which will require some significant investments,” the city staff report to the council stated. “They have proposed to pay their taxes early and expedite the rebate payment from the city so they can have access to their cash for these expenditures.”
Typically, the speedway makes its tax payment in early September each year. That payment is directed to the Jasper County Treasurer’s Office. Once the Treasurer of State’s Office sends the annual certified allocations, the funds are disbursed to various entities, including Jasper County and the Newton Community School District.
Much of the City of Newton’s share of the tax bill — roughly 90 percent of the total — is rebated back to the speedway each year as part of the current TIF district agreement in place. The payment is always for the previous fiscal year, which ends June 30 each year.
The speedway is due to pay nearly $895,000 this year. City Development Director Bryan Friedman said the speedway’s tax bill will increase to $1.8 million at the end of the current fiscal year.
“We will deduct from the amount we give to the speedway any attorney fees or other costs associated with this deal, as well as some contingency, just in case,” Friedman said. “Last year, the speedway received 88.9 percent of its tax payment as a rebate. This agreement represents about 85 percent.”
During a brief discussion prior to the vote to approve the loan agreement, councilors were told all of the money paid to the speedway would be covered solely by tax revenue paid early by the speedway. City Attorney Darrin Hamilton said there are some documentation and clarification the city still requires from the speedway before a check would be cut to the speedway.
“Paid taxes can’t be clawed back in the case of a bankruptcy,” he said. “But these would be taxes paid early, before the Treasurer’s Office has been able to actually submit a tax bill, so we’re not entirely sure what that means.”
Hamilton said that issue is one that would be addressed before a check is sent to the speedway. He noted some documentation also was needed before a check is cut.
“If the feedback we receive is negative to the city in any way, I’m sure we will have another of these special meetings of the council to address it,” he said. “But, the check to the speedway is contingent on having all of our concerns addressed.”
Bob Eschliman can be contacted at (641) 792-3121 ext. 423 or via email at email@example.com.