Dubuque Racing Association - Lump Sum Principal PaymentsTHE CITY OF Cam,,,. Dubuque
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Masterpiece on the Mississippi
2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Proposed DRA Lump Sum Principal Payments
DATE: February 23, 2009
Dubuque Greyhound Park & Casino Chief Executive Officer/General Manager Jesus
Aviles is requesting approval of the Dubuque Racing Association paying down principal
on two existing loans for the period April 2009 to November 2010, saving the DRA
about $362,218.
I respectfully recommend Mayor and City Council approval.
Michael C. Van Milligen
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Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Jesus Aviles, CEO/General Manager, Dubuque Greyhound Park & Casino
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Date:
To:
February 20, 2009
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Honorable Mayor Buol and City Council Members
CC: City Manager, Michael Van Milligen
From: Jesus Aviles, CEO/General Manager
Issue: Proposed DRA Lump Sum Principal Payments
DRA currently has two notes in the amount of $12.SM with interest rates of 7.925% and 8.175%.
The DRA feels it is in a strong enough cash position to pay down the principal due for the period
Apri12009 through November 2010 for these two notes.
The goal is to reduce interest expense by means of making a lump sum principal payment in the
amount of $4,015,590. Interest only payments would then be made until the balloon payment is
due in December 2010. The interest expense reduction should approximate $362,218. This
transaction would increase cash flow by reducing interest expense. The opportunity cost of
reduced interest income is nominal; a 1% rate is presently earned on deposited monies.
The Dubuque Racing Association approved these payments at their regular meeting of February
17, 2009. As stated in the Third Amendment of the City Lease Agreement with Dubuque Racing
Association, I am formally asking for City Council approval to proceed with this transaction.
If you need additional infoi~nation, please feel free to contact me. Thank you for your assistance
with this matter.