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South Bend Pedevelopment Commission <br />Regular Mee ing August 23, 1985 <br />6. NEW BUSINESS (Cont.) <br />a. Conjtinued .. . <br />staff in this process and who helped pull the <br />necessary information together. Mr. Hunt also <br />thanked State Senator Douglas Hunt who <br />assisted in the State legislation necessary <br />for the TIF process. Mr. Hunt lastly thanked <br />the Redevelopment Commission for having the <br />for sight to move ahead during a difficult <br />period of time and backing the staff on the <br />project. <br />Mr. Hunt introduced Mr. Richard Treptow, Vice <br />Pre ident of Springsted, Inc., noted the fine <br />w,or ing relationship that the staff has <br />maintained with Mr. Treptow, and thanked Mr. <br />Tre tow along with Springsted, Inc., in taking <br />the lead in this project. <br />Mr. Treptow proceeded to describe Tax <br />Increment Financing. One of the problems with <br />TIF is that it is a brand new financing tool <br />in 'Indiana. This will be the State of <br />Ind ara's first TIF bond. Mr. Treptow <br />sumnarized the key concepts of TIF that came <br />out of the report prepared by Springsted, Inc. <br />Mr. Treptow explained that this is a pure <br />rev ue bond. There are two basic kinds of <br />bonds - general obligation bonds which are tax <br />backed and pure revenue bonds. This TIF bond <br />is mot a general obligation bond, but most TIF <br />bonds sold are general obligation bonds where <br />the principal and interest bond payments are <br />paid by tax increments and are general <br />obligation backed bonds, so if revenues are <br />not sufficient then the City may levy a tax to <br />support any shortfall. This particular issue <br />is a pure revenue bond which is where the <br />principal and interest payments are paid only <br />by designated revenues. It is illegal and not <br />perindtted to pledge any type of tax levy <br />support. These issues are relatively <br />dif icult to sell because the bond holders <br />want every assurance that their principal and <br />interest payments will be made in a timely <br />manner. What they normally look for in a <br />municipal bond is some kind of taxing power. <br />In this case, we have ample projected revenues <br />in cess of estimated principal and interest <br />pa ents to guarantee a successful sale. <br />-5- <br />