2002 Comprehensive Annual Financial Report

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CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) B. Subsequent Events On March 21, 2003, the City's Redevelopment Commission approved Resolution 1965, which authorizes the sale of bonds not to exceed $13,000,000. The proceeds will be used to finance infrastructure costs in an economic development area. The bonds shall be repaid solely from taxes on real property located in the redevelopment area (tax increment). On April 28, 2003, the Common Council approved Ordinance 9415-03, which authorized the execution of a lease for the construction and equipping of a new fire station and renovation of the police station. The costs will be financed through the sale of bonds, not to exceed $26,000,000, by anot-for-profit building corporation. The City pledges county option income tax revenues to the payment. of the debt. City officials are in the process of authorizing temporary loan tax anticipation time warrants not to exceed $53,599,553. These warrants will be repaid during 2003 from tax distributions to be received. During 2003, the County will be unable to distribute taxes in a timely manner because of delays with reassessments. C. Contingent Liabilities College Football Hall of Fame Operations The City's General Fund has advanced a total of $1,750,000 to the College Football Hall of Fame Fund in various amounts during the years from 1996 to 1999. The City has always recognized that these advances would be repaid from excess operating revenues of the Hall of Fame. No payment schedule has been established. Beginning with 1996, the first full year of operations, through 2000, the Hall of Fame financial statements show net losses ranging from $521,345 to $1,481,657. During 2001, the City turned over the operations of the Hall of Fame to the National Football Foundation and College Football Hall of Fame, Inc. (NFF). The interim agreement authorizing the NFF to operate the Hall of Fame shows that NFF has contributed $1,900,000 to cover operating deficits of the Hall of Fame during the period prior to December 31, 2000. The interim agreement is in effect until December 31, 2005. At that time, the NFF can terminate their participation in the operations and the City shall reimburse the NFF the full amount of the NFF contributions towards operations. The reimbursement will be made in five annual install- ments beginning December 31, 2005. If the NFF elects to continue their participation, then the City will resume operating the Hall of Fame as it had done from 1996 to 2001. The $1,900,000 contingent liability to the NFF is not recognized on the financial statements. Protect Future The Common Council approved Resolution 3037-02 in which the City pledges support to Project Future through the year 2006. Project Future promotes the City for economic development purposes. The City has committed $110,000 for each year from 2003 through 2006 contingent upon the fiscal condition of the City. 53