Tribal-backed transit bonds near delivery in California

| 11/29/2005

Officials in California are looking to cash in the state’s winnings from gambling agreements negotiated by Gov. Arnold Schwarzenegger for a $1 billion transportation bond financed by five Indian tribes.

The California Infrastructure and Development Bank earlier this month approved initial preparations for a bond sale that could take place early next year. The bonds, however, may still face legal obstacles.

The bonds have been blocked for nearly a year by separate lawsuits from the state’s major horse racetracks and a large Los Angeles-area card club, The San Diego Union-Tribune reported. Both suits have been dismissed, but attorneys involved said that appeals and other legal options are under consideration.

The $1 billion has been budgeted for fourth-quarter spending in the current state budget.

Projects that are eyed for work with help from the money are the new state Route 905 in Otay Mesa, repair and widening of an interchange connecting Interstate 5 and Interstate 805, as well as regional rideshare programs and numerous mass in San Diego County, the newspaper reported.

The bonds would be repaid in the next 17 years with a dedicated revenue stream of $100.8 million to be paid annually by the five tribes.

The Auburn, Pala, Pauma, Rumsey and Viegas tribes were the first to renegotiate their gambling compacts at the request of Schwarzenegger, who sought to fulfill a campaign promise to bring in a larger share of Indian casino profits for the state.

In return for increased payments and other regulatory concessions, the tribes received new deals that permit unlimited slot machines.