11-30-10 Special Council Meeting Agenda & Packet

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The American Recovery and Reinvestment Act of 2009 (the "Stimulus Act ") added Sections 140OU -1 through and including 140OU -3 to the Internal Revenue Code of 1986, as amended (the "Code "), which authorized local governments to designate and issue Recovery Zone Economic Development Bonds pursuant to volume cap allocated among the various states and counties and large municipalities within the states based upon relative declines in unemployment in 2008 to finance certain capital expenditures paid or incurred with respect to property located in a designated recovery zone and certain other expenditures identified in Section 140OU -2 of the Code (each of such expenditures being referred to herein as a "Qualified Economic Development Purpose "). The City received an allocation for Recovery Zone Economic Development Bonds of Four Million Nine Hundred Eighty -three Thousand and 00 /100 Dollars ($4,983,000) (the "Volume Cap "). The Common Council previously adopted Resolution No. 4019 -10 on March 22, 2010, designating the entire geographic area of the City as a Recovery Zone for purposes of Section 1400U -1(b) of the Code, which would include the Area and the Stadium. The Project qualifies as a Qualified Economic Development Purpose. Issuance of the Bonds as Recovery Zone Economic Development Bonds will permit the District to receive a credit from the United States Treasury in an amount equal to 45% of the stated interest to be paid on such Bonds as provided by Sections 140OU -2 and 6431 of the Code. It is expected that the Bonds may be issued as Recovery Zone Economic Development Bonds if that designation provides the lowest net interest rate. The Common Council deems it in the best interest of the City and its citizens and of public utility and benefit: (a) that the District issue the Bonds, the source of payment for the principal of and interest on which shall be the PSCDA Revenues and if such PSCDA Revenues are insufficient then from the COIT Revenues and (b) to pledge the PSCDA Revenues received by the City for the payment of the principal of and interest on the Bonds and also pledge the COIT Revenues distributed to the City for such purpose in the event the PSCDA Revenues are insufficient, provided that such Bonds shall not be issued (i) in an aggregate principal amount that exceeds Four Million Nine Hundred Eighty Thousand and 00 /100 Dollars ($4,980,000) and (ii) for a term that exceeds twenty (20) years. NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AS FOLLOWS: Section I. The Common Council does hereby authorize and approve the issuance of the Bonds by the Commission for and on behalf of the District in an aggregate principal amount not to exceed Four Million Nine Hundred Eighty Thousand Dollars ($4,980,000.00) for a term not to exceed twenty (20) years, the source of payment for the principal of and interest on which shall be the PSCDA Revenues and if the PSCDA Revenues are not sufficient, the COIT Revenues. To provide for the issuance of the Bonds for or on behalf of the District for the purpose of financing a portion of the costs of the Project, the Common Council does hereby approve and irrevocably pledge the PSCDA Revenues received by the City for the payment of the principal of, premium, if any, and interest on the Bonds (the "PSCDA Pledge "). In the event the PSCDA Revenues are not sufficient, the Common Council does hereby approve and -2- BDDBOI 6401968v 1