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CITY OF SOUTH BEND
<br />NOTES TO FINANCIAL STATEMENTS
<br />(Continued)
<br />B. Subsequent Events
<br />During 2005, the City approved a loan from the U.S. Department of Housing and Urban Development
<br />for $9,180,000 to finance economic development activities. During 2006, the City received
<br />$3,222,000.
<br />During 2006, the City approved a series of revenue bonds, total not to exceed $56,380,000, to finance
<br />improvements to the wastewater utility. The City sold $7,630,000 during 2006 and is in the planning
<br />stage of selling a portion of the bonds during 2007, estimated at $16.6 million.
<br />Also during 2006, the City approved the sale of real estate commonly called the Studebaker Stamping
<br />Plant to the South Bend Transportation Company (TRANSPO). TRANSPO paid the City $1,000,000
<br />during 2005 and will pay the $3,000,000 balance to the City after demolition and infrastructure
<br />improvements are completed (estimated late in 2007 or early in 2008).
<br />During 2007, the Common Council approved Resolution 3705-07 authorizing the Board of Public
<br />Works to enter into a guaranteed energy savings contractwith a contractor to upgrade traffic signals.
<br />This construction cost will be financed by an estimated one million dollar loan which the City will repay
<br />from anticipated energy savings resulting from the upgrade.
<br />Effective January 1, 2007, the City's Century Center, an enterprise fund, will be operated and man-
<br />aged by a private business. The management agreement is for a three year period. All City employ-
<br />ees working at Century Center become employees of this private business. The City's Common
<br />Council will continue to approve the annual budget for Century Center.
<br />C. Contingent Liabilities
<br />College Football Hall of Fame Operations
<br />The City's General Fund has advanced a total of $1,750,000 to the College Football Hall of Fame
<br />Fund in various amounts during the years from 1996 to 1999. The City has always recognized that
<br />these advances would be repaid from excess operating revenues of the Hall of Fame. No payment
<br />schedule has been established. Beginning with 1996, the first full year of operations, through 2000,
<br />the Hall of Fame financial statements show net losses ranging from $521,345 to $1,481,657.
<br />During 2001, the City turned over the operations of the HaII of Fame to the National Football Founda-
<br />tion and College Football Hall of Fame, Inc. (NFF). The second interim agreement authorizing the
<br />NFF to operate the Hall of Fame shows that NFF has contributed $1,900,000 to cover operating
<br />deficits of the Hall of Fame during the period prior to December 31, 2000.
<br />Under the second interim agreement, the City is obligated to provide the NFF $600,000 in 2006 and in
<br />2007, $550,000 in 2008 and in 2009, and $500,000 in 2010 in operating subsidies. The City is also
<br />obligated to pay capital expenditures and to maintain a $1,000,000 capital reserve fund.
<br />The second interim agreement is in effect until December 31, 2010. At that time, the NFF can termi-
<br />nate their participation in the operations and the City shall reimburse the NFF the full amount of the
<br />NFF contributions towards operations during the period prior to December 31, 2000. The reimburse-
<br />ment will be made in five annual installments beginning December 31, 2005. If the NFF elects to
<br />continue their participation, then the City will resume operating the Hall of Fame as it had done from
<br />1996 to 2001. The $1,900,000 contingent liability to the NFF is not recognized on the financial state-
<br />ments.
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