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CITY OF SOUTH BEND OFFICE OF THE CLERK those needs. So, even though there is $14 million here, that money above the reserve requirement, that money is restricted as to where we can use it. He continued, The other thing to keep in mind, as I said earlier, is that we don't necessarily want to spend this down all the way to our reserve requirement because we want to make sure that we have a certain healthy margin above that reserve requirement. The reserve requirement is really set as a bare minimum that we need. Councilmember McBride asked, So, as it relates to that, when you're looking at, for instance, the redevelopment and TIF,is that where the determination of being in alignment based on the reserve and the cash available? Mr.Parker replied,Yep,so that the redevelopment and the TIF funds,all of that money is restricted in terms of its use. It has to be spent on very specific capital projects within the TIF area. So, that money is being spent on those projects, and really sort of the difference between cash available and reserve requirements. It's more of a timing difference than anything else.That money is largely spoken for in terms of as these projects progress, it will be spent down. Committeemember John Voorde asked, What is an example of special revenue? Mr. Parker replied, Most funds that are not the General Fund, EDIT or COIT are special revenue funds. Parks, for example, are special revenue funds. The DCI Operating Fund is an example of a special revenue fund. So, they include most funds that have a specific purpose but are not just the General Fund or the income tax funds. Actually, income tax funds are technically special revenue funds, but I broke them out because generally we look at those just a little bit differently. Committeemember Voorde followed up, Is that where Local Roads & Streets is located? Mr. Parker replied, Yep, Local Roads & Streets is in there. MVH, Motor Vehicle Highway is in special revenue. He continued, All right. In terms of other cash-related questions, I think I hit on most of the things that I wanted to hit on. Like I said, about $5 million where cash is invested, we do have an investment policy that drives what types of investments we do invest in, and that is largely driven by Indiana Law. Indiana pretty heavily dictates what types of investments we are able to invest in. Basically, what it amounts to is US treasuries, US government securities, and highly rated certificates of composite, which are all highly liquid. The Board of Finance every year talks to our investment advisor Paul over at Pt Source Bank, and he'll tell you every year that we can sell any of our investments immediately, they're all very liquid and actively traded. Committeemember Voorde asked, What would be an estimate of what it would cost to borrow these days, to issue a bond? Mr. Parker replied,To issue a bond? It's a good question. In terms of cost of borrowing,we've just issued a capital lease and just went through the Board of Public Works and the interest rate we got on that was two-point two eight percent (2.28%). EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227W Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 l I U574.235.5567 www.southbendin.gov 8