9637-05 Pledging the use of revenues for repayment of a section 108 loan

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ORDINANCE NO. ~ ~" ~~ ` ~ AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, PLEDGING THE USE OF REVENUES FOR REPAYMENT OF A SECTION 108 LOAN FROM THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TO THE CITY OF SOUTH BEND STATEMENT OF PURPOSE AND INTENT: On November 22, 2004 this Common Council adopted Resolution Number 3402-04 authorizing the Mayor to submit the City of South Bend's application (the "Application") to borrow $21,000,000 through the United States Department of Housing and Urban Development's ("HUD") Section 108 Loan Guarantee Program ("Section 108 Loan"). Following discussions with HUD, the City reduced its loan request to $11,980,000. In accordance with HUD policy, the City must provide security for the repayment of the notes issued to evidence the Section 108 Loan. The City has determined to make loan payments from several sources of funds including TIF from the Sample Ewing Development Area, income tax and sales tax revenues from the Community Revitalization & Enhancement District ("CRED"), and proceeds from the sale of land in the Studebaker/Oliver project area. The South Bend Redevelopment Commission adopted a resolution at its meeting on Friday, November 4, 2005, pledging TIF revenues that maybe generated from the Sample Ewing Development Area to the payment of the Section 108 Loan. The South Bend Advisory Commission on Industrial Development has also pledged income tax and gross retail incremental revenues which are expected to be generated in the Studebaker/Oliver CRED for the purpose of paying debt service on the Section 108 Loan. The term of the City's Section 108 loan is up to ZS years with repayments by the City ranging from a low of approximately $268,250 in 2006 to a high of $1,834,500 in 2023. NOW THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: 1. The Common Council hereby determines to issue obligations of the City to evidence the Section 108 Loan pursuant to Indiana Code 36-4-6-19 (the "Act") for the purposes set forth in the Application. The City shall use the proceeds of the Section 108 Loan solely for the purposes described in the Application. 2. The Common Council hereby authorizes the issuance of an obligation of the City for purposes of evidencing the Section 108 Loan in an aggregate principal amount not to exceed $11,980,000 (the "Obligation"). The Obligation shall be designated as the "City of South Bend, Indiana, Section 108 Loan Guaranty Program Variable/Fixed Rate Note." The Obligation shall be issued in fully registered form in the denomination of $1.00 or any integral multiples thereof not exceeding the aggregate principal amount of the Obligation to be issued. Principal of and interest on the Obligation shall be paid pursuant to the terms of the Application and as set forth in the schedule attached to the Obligation. The Obligation shall be sold by private, negotiated sale at price at par to the United States Department of Housing Urban Development or its BDDBOI 4224876v2