County seeks judgment against city of Riverside

By Mary Zielinski
Washington County Monday filed a petition in Washington County District Court for declaratory judgement against the City of Riverside, seeking the $175,000 payment Riverside refused to make in July and all future payments required in the Infrastructure Finance and Development Agreement signed by the city and county December 26, 2005.
The county’s action follows the board of supervisors’ closed session September 30 with County Attorney Barbara Edmondson and special counsel William Sueppel, retained especially for the case.
Additionally, the petition asked that all court costs be assessed to Riverside, as well as any other relief “as may be just and equitable.”
The agreement between the city and the county came after the county agreed to issue $9.4 million in urban renewal tax increment revenue bonds to finance major sewer and water projects for the city to meet the needs created by the $140 million Riverside Casino and Golf Resort.
At the December 12, 2005, public hearing on the issue, there was considerable opposition to the county losing tax increment financing (TIF) revenue. Igt led to further negotiations between the two, resulting in the infrastructure agreement where Riverside agreed to pay $175,000 to the county annually for the term of the bonds. The Riverside payment was to help offset the loss of TIF money with the $175,000 derived from the $1,750,000 paid each year to Riverside by the Washington County Casino Resort (WCCR) or gaming tax collected by the state. The agreement specifically said the payments “shall not constitute a general obligation of the city, but shall be payable solely and only from the Casino Revenue Fund.”
The Fund essentially is an escrow account in which Riverside was accumulate the $175,000 from its WCCR payment and pay the county on or about July of each year for the term of the bond indebtedness. It was estimated to be no more than ten years and county officials said more likely it would be eight years.
Riverside made its first payment, per the agreement, July 1, 2008, but in March, 2009, it told the county it would not may any more payments, that it was “an un-constitutional debt” that violated state law and was “void and unenforceable.”
Besides seeking the 2009 payment, the county also wants a temporary and permanent injunction to guarantee the city deposits at $175,000 in the Casino Revenue Fund immediately and then each year following while the case is pending.
The petition states that if Riverside is not restrained, the county believes the city “will not place the required funds in the special account during the pendency of this litigation and then declare it cannot make the payments because the special account does not contain the necessary funds.”
The city has 20 days to respond to the petition.