2000-10-02 Redevelopment Authority Minutes

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J • b. Authority approval requested for Resolution No.142 authorizing the issuance of the South Bend Redevelopment Authority Lease Rental Revenue Refunding Bonds of 2000 (College Football Hall of Fame Project) and. other related matters. Mr. Rampola said Resolution No. 142 provides for refunding of the bonds. The plan of finance is to refund the variable rate debt for the College Football Hall of Fame into affixed-rate debt. Currently, the interest rate is reset weekly, and payable monthly, and has had a cap of 7%. The cap expired last year and a new cap agreement would have to be entered into, but with interest rates rising, the cost of the cap would be more expensive. The administration desires more level debt service payments on the bond. Currently under the existing documents, the principle is not payable until .2006. Reamoritization of the debt will cause us to start repaying the principle in 2001., which will result in savings. The bond resolution itself provides for the issuance of bonds in an amount not-to-exceed $.17,450,000. The actual amount expected to be paid is closer to $16 million. The maximum rate of interest is set at 6.5%. The Redemption provisions in Section 3 show that the bonds can be refunded at no premium in 10 years. Section 4 cuts down on the Trustee expenses by having one bond for the length of the financing which would cover the mandatory redemptions. Section 5 explains the Trust Agreement that has a fixed interest rate. Section 6 approves the Escrow Agreement whereby the bond proceeds will be deposited in the escrow for approximately two weeks, and earn some interest in the two-week period. Crowe Chizek will do a report stating the • escrow is sufficient to pay the bonds off at the time of the issuance of the new bonds. Section 7 is for the Continuing Disclosure Undertaking Agreement relating to the number of bonds the City has. Because we have more than $10 million worth of bonds, we need to comply with the FCC in disclosing certain information on our bonds. Section 8 provides for the sale of bonds to the underwriter. City Securities bid the lowest on interest rate, with Bank One coming in second. City Securities would take the majority of the bonds, and Bank One would take a minority of the bonds. Section 9 authorizes all the documents to be signed and put into records. Section 10 authorizes the bond counsel to give legal opinion. Section 11 approves the Official Statement. All of the documents are being approved in draft form and Section 12 states that Resolution No. 142 authorizes changes to be made to get the documents to final form. Section 13 authorizes the redemption notice. On the day the bonds are issued one of the documents that will be executed would be the letter to the Trustee directing them to redeem all of the bonds. If the fixed rate drops in the future we would have the opportunity to advance refund the bonds (put money in escrow for the entire term of the fixed -rate so that we can take the bonds out one more time). Section 14 relates to the TEFRA Hearing and the need for the Mayor to approve the issuance of the bonds. Upon a motion by Ms. Pfotenhauer, seconded by Mr. Alverez, and unanimously carried, the Authority approved Resolution No.142 authorizing the issuance of the South Bend Redevelopment Authority Lease Rental Revenue Refunding Bonds of • 2000 (College Football Hall of Fame Project) and other related matters. H:\WPDATAWUTHORTY\ 100200.min.wpd