Riverside and county argue over debts

    The attorneys representing Washington County and the City of Riverside argued their case today at a hearing in the Washington County Courthouse. The county filed a declaratory judgment against the city, seeking the two payments of $175,000 that Riverside has refused to make. The city has argued that the agreement under which the city owes the county that money is not a legal agreement and is unenforceable.

    In 2005, Riverside and the county negotiated and signed the Infrastructure Finance and Development Agreement, which required Riverside to make annual payments of $175,000 to the county by July 1 of each year from 2008 to 2017. The city made its first payment in 2008 but did not make it in 2009 or 2010. The county agreed to issue $9.4 million in urban renewal tax increment revenue bonds to finance major sewer and water projects needed to supply the Riverside Casino and Golf Resort.    

    District Judge Joel Yates presided over the case. Paul Burns of Iowa City represented Riverside, while Tom Hobart and William Sueppel, also of Iowa City, represented the county. The opposing sides agreed that there was no disagreement between them over the facts of the case ? only on the proper interpretation of case law. In light of this consensus, Yates canceled the trial set for Oct. 21. He said he has ?a lot of reading to do? before he makes his judgment, referring to the cases that were brought up during the hearing. 

Judge Yates asked Burns if he thought that it was ?unjust enrichment? for Riverside to receive a benefit of $9.4 million while only paying $175,000 per year to the county.

    ?Initially, Riverside went to county to ask for its debt capacity,? said Burns. ?The county?s going to benefit because the casino?s going to locate here. In the end, everyone was going to benefit. The county agreed in a memorandum of agreement. The county agreed to issue the bonds subject to a public hearing. There was nothing unjust about it in June when they agreed to it in the memorandum. It was only after that, when there was opposition at meetings, that they (the county) came back to the city and said they weren?t going to agree to it unless you (Riverside) agree to pay $175,000 for 10 years. Riverside agreed. There?s no doubt about it. There wouldn?t be any unfairness to begin with because they agreed to it in the summer. As a legal matter, it makes no difference anyway. The law is very clear. If it?s a violation it?s a violation, like it or not.?

For the full story, see our Oct. 1 print edition.