8638-95 Increasing Appropriation within General Fund 1995

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„ 4, SOU Ty B;'t 1. � \ \\ , I � iC Nino:/ ''� - �;- City of South Bend•% x1,' Joseph E. Kcrnan. Mayor Z_-x` ,??,?;,/865. x Department of Administration and Finance Kevin C. Horton November 22, 1995 Steve Luecke,President Personnel&Finance Committee South Bend Common Council Dear Steve: Over the past three years the City has been actively engaged in the development of the College Football Hall of Fame. In the early stages of the project, the City incurred costs related to planning, negotiating the agreements with the NFF,preliminary architectural work,feasibility studies,etc. These "predevelopment costs”are typical of any project of this magnitude. It has always been anticipated that these costs would be born by the Redevelopment Commission and the TIF District. The total amount of these expenses were approximately$350,000. I suggested that we pay for these costs initially from the bond proceeds even though they were not a contemplated part of the issue,with the hope that excess interest earnings from bond proceed investments would cover the costs. The interest earnings have not and in addition to these we have one overrun on the project,the City's tunnel of about$160,000. Had the City's TIF District not have taken a large downward hit as a result of tax appeals,they would be picking up this difference as originally planned. However,they are not currently in that position. Our proposed solution to this is to have the Civil City purchase the tunnel,which is a public improvement from Redevelopment for an amount equal to our$550,000 shortfall. We will lease it back to the commission for a maximum of three years,thereby repaying the General Fund in full with interest. This internal fmancing is less expensive than external financing and therefore is good business. I am more than happy to explain this in greater detail at your convenience.Of urgency,however,is that there are contractors who are in need of payment and who are rightly due this payment as soon as possible. To repeat,this is a short-term loan and is another reason why General Fund balances are important to the overall stability of the City. Sincerely 14-en -&-v\ Kevin C.Horton \--?.- County-City Building • South Bend, Indiana 46601 • 219/235-9216 Fax 219/235-9928 Catherine A. Hubbard Jeffrey A.Rinard Isabel Gonzalez Ronalda Minnis Gatha Vaughn Director Human Resources Finance Director Safety&Risk Manager Benefits Manager Barrett Law