Polk County voted last week to allow slot machines at the Prairie Meadows racetrack, giving the county another source of revenue to pay off general obligation bonds that financed the track.
Larry Millang, chief financial officer for the county, said the county will use the slot machine proceeds to pay the annual $3.3 million of debt service on the bonds, which will reduce property taxes for residents. Any surplus slot machine revenues will be used to pay the county's other GO debt, Millang said.
A preliminary study estimated that the slot machines, which will be installed by January 1995, could generate $22 million annually, Millang said. However, the county must first pay a 20% state tax, operational costs for the machines, and any renovation costs before any funds can be used for debt service.
Last year, Polk County issued $38.8 million of GO bonds to refinance revenue bonds that were sold in 1984 to build the track. The revenue bonds were remarketed under a lease purchase agreement in 1987.
But the track, owned and operated by the Racing Association of Central Iowa, went bankrupt in 1991. The county then acquired the race track.