1998-10-19 Redevelopment Authority Minutes

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The South Bend Redevelopment Authority • October 19, 1998 Meeting Minutes Mr. Rompola stated that the underlying financing mechanism for the 1998 bond issue is the same as the 1992 bond issue: a lease between the South Bend Redevelopment Commission and the Redevelopment Authority. The Commission has the ability to levy a tax upon the redevelopment district to pay lease rentals to the Redevelopment Authority. Mrs. Kolata stated that the Commission has not yet needed to levy this tax, but that a guarantee secures a better bond rating and lower interest rates. At present, the lease rentals are being paid through the Blackthorn Golf Course revenues. Mr. Rompola stated that every year the Redevelopment Commission evaluates the revenues to see if a tax levy is needed or not. The lease rental will stay in place, and after the refunding bonds are sold the lease rentals will be reduced because of the lower interest rates for the 1998 bonds. Mrs. Kolata stated that she did a payment comparison and found that in the first two years the projected savings are minimal, but after 2001 or 2002 the savings will be around $50,000 to $60,000 a year. The savings will depend on the date of the sale and the actual interest rate. Mr. Rompola stated that the 1998 bonds will be sold publicly in the same manner the 1992 bonds were. Crowe Chizek will prepare an official statement, distribute it to the underwriting firms that bid on bonds in Indiana, and the notice of the sale will be published in the newspaper. Upon 24-hour notice, Crowe Chizek and the City of • South Bend will determine the date of the sale, which is tentatively set for November 10, 1998. The market rates will determine the actual day of the sale, and Crowe Chizek will determine the best bidder. If rates suddenly go up and it is no longer profitable to sell the bonds, the sale will be postponed until the rates are favorable. Mr. Alvarez asked about the payment to Baker and Daniels if the bonds are not sold. Mr. Rompola stated that Baker and Daniels is only paid from the proceeds of the bonds. Mr. Alvarez noted that Crowe Chizek's proposal stated that they expect payment whether the bonds are sold or not. Mrs. Kolata stated that Crowe Chizek has already put in a considerable amount of time preparing for this sale and does expect payment for their time and out-of-pocket expenses, which are not to exceed $20,000. Baker and Daniels is only asking for their out-of-pocket expenses if the bonds are not sold. Mr. Alvarez asked about Crowe Chizek's proposal for hourly rates and out-of-pocket expenses, and asked that Crowe Chizek clarify their proposal. Mrs. Kolata stated that the only costs that would go over the $20,000 would be for the printing of the official statement, which is usually $1,500 to $2,000. Ms. Pfotenhauer requested that Crowe Chizek rewrite their proposal to clarify their costs, and Mrs. Kolata stated that they would. Upon a motion by Mr. Alvarez, seconded by Mr. Kahn, and unanimously carried, the Authority approved the proposal from Crowe Chizek for financial advisory services, with the clarifications requested. • 4 H:\WPDATA\AUTHORTY\ 101998.MIN