09-24-18 Council Minutes - Laserfiche WebLink

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REGULAR MEETING September 24, 2018 Zoo's Master Plan. We are leveraging $450,000 of Regional Cities funding and we also raised $1.5 million of private funding that includes a landmark $500,000 gift. That is the largest gift in the Zoo's history. The Zoo's new entrance is designed to accommodate more guests per year and overall improve the flow of entry to the Zoo. Since 2014 when we formed the first (1St) private- public partnership with the City of South Bend and Venues, Parks & Arts, the Society has raised over $3.5 million in funds for new capital projects. The Zoo entrance project will address several issues. ADA compliant bathrooms and thoroughfares are big ones. We know the ways into our Zoo, right now, are not ADA compliant. Both hills are not ADA compliant. Several of our restrooms were grandfathered into non-compliance. This new building will be completely ADA compliant as well as have a family restroom. A new point of sale system is in the cards as well as our current point of sale system is archaic. There will be improvements to our gift shop as well. There will be twice as much space for education and classes and then a dedicated group and field trip entrance as well.That entrance also has a lot of needs.That is a general overview of the projects for what that$1.5 million plus the $2.2 million will be going toward. Randy Rompola, Barnes&Thornburg with offices located at 100 N. Michigan Street, South Bend, IN stated, We are serving as Bond Counsel for the financing. The Ordinance is a parameters ordinance which means it provides for the issuance of these bonds with a maximum interest rate of six percent (6%), a maximum principle amount and a maximum term. The intent is that once the bonds are sold we would have a rate locked in and we expect it to be less than six percent(6%). As part of the approval process, we need to identify not-to-exceed amounts and that's why those are set forth in the Ordinance. The bonds per the Ordinance are to be payable from the Economic Development Portion of the Local Income Tax.There are some bonds outstanding and these bonds would be issued on parity with those bonds. The Ordinance also approves a form of financing agreement with the Zoological Society. The bond proceeds, once the bonds are issued, would be deposited with a bond trustee. The Zoological Society would be spending the proceeds on the project. The bond proceeds would be released from the trustee to pay for those costs upon approval of a City representative. What is typical in these economic development transactions is a process by which the payment requisition would come to the City,the City would sign off and it would go to the trustee to be sure the monies are being spent for the projects referenced in the ordinance. Herschel Frierson,Crowe LLP with offices located at 135 North Pennsylvania Street,Indianapolis, IN, stated, We are serving as municipal advisor to the City on this bill. As Randy laid out,this sets the max parameters. Currently, looking at the market we are expecting about four percent (4%) but again, until we price the bonds we won't know that for sure. This is just more of a framework of what we come into. Councilmember Oliver Davis stated, Thank you all for the work you are all doing and for the presentation. I know we've talked about it being this bond and everything else being spread out over some time. If it was done in a shorter length of time, say ten(10)years,would we save money in doing it from that standpoint instead of having it extended out when you consider all the interest and everything else from that standpoint? Mr. Frierson replied, I will say the shorter the life of the bond, you'll be paying less in interest. At this particular point in time, I don't have that difference but certainly in the bond issue you will be paying less in interest. However, you will be paying higher in debt service to reduce the principle amount in a shorter period of time. Councilmember Oliver Davis interjected, Question for you. Given our financial situation having a double A (AA) rating and everything else, are we able to then, with all of our financial situation, pay it with shorter terms and pay more monies?That's what I would like to see instead of it being spread out if we are able to do it. You know, it's like the issue of wanting to finance your house over thirty (3 0) years or fifteen (15) years. If you are able to do it in fifteen (15) years, it makes better sense. Or on a car note, when I was going through a tough time I did it in six (6). When I was going through a better time I did it in three(3). And so,and we save money that way. So given the strength of the City's finances, are we able then to do it at a shorter time to save on interest and money while getting the Zoo their needs. At the same time we could save the taxpayer's money and we could use that money on other issues. Mr.Rompola replied,From a rating agency standpoint,the higher the annual payment on the bond, the more stress you have on finances. So you may actually place at risk the great rating the City 19