01-26-15 Agenda, Packet and Committee Meeting Notice

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under Indiana Code 6- 3.5 -7 -15 (the "Plan ") that specifies the uses for which CEDIT will be disbursed. A Plan must identify projects to be funded from CEDIT proceeds, provide total cost estimates for each project, and supply a schedule for the planning, development and construction of each project. The Plan must encompass a period of not less than two years and must provide for the expenditure of at least 75% of CEDIT to be received by such unit during the period that such Plan is in operation. If the county or a unit in the county fails to adopt a Plan or designate the county or another unit in the county as the recipient of its share of the distribution, that county or unit may not receive its CEDIT distribution. The county treasurer will retain such distribution and any designated distribution for such county or unit in a separate account until the county or unit adopts a Plan. If the county or unit fails to adopt a Plan for three succeeding years, the balance in such account will be distributed to the county or other units in the county that have adopted a Plan. Such redistribution will be based on property taxes first due and payable to the county or units during the calendar year in which the three year period expires. For a project to be paid for or financed with bonds or leases payable from CEDIT, it must be (i) deemed an "economic development project" by the county or unit within the county receiving such revenues, or (ii) a capital project for which the county or unit could issue general obligation bonds. An "economic development project" is any project that promotes gainful employment, attracts a major new business enterprise or retains or expands a business enterprise within the jurisdiction; and involves expenditures for a combination of, or singly, the purchase of land, infrastructure improvements, enlargement or construction of buildings, and the acquisition of machinery, furniture and fixtures. The CEDIT statute provides that CEDIT may be pledged to defray the debt service for bonds or long term lease rentals to undertake improvements and expenditures pursuant to a Plan. If bonds are issued and outstanding pursuant to the CEDIT Statute, a county income tax council or a county council may not reduce the CEDIT rate below a rate that would (or could be projected to) produce 1.25 times the maximum annual debt service on such bonds. The calculation for such minimum tax rate must be based on the average of the county's preceding three years' tax collections. DISCUSSION OF RISK FACTORS Prospective investors should be aware that there are certain unique risk factors associated with the purchase and ownership of the Bonds. The following describes some of those risk factors, but is not, or is not intended to be, exhaustive. The Bonds are secured by the CEDIT Revenues and if such CEDIT Revenues are insufficient, the City is not obligated to pay the principal of or the interest on the Bonds from any other revenues, funds or taxes. 2. There can be no assurance that CEDIT revenues will continue to be collected at the levels indicated in the Consultant's Report (See Appendix C). 3. The rate at which the CEDIT is imposed cannot be modified unless the St. Joseph County Income Tax Council (the "County Income Tax Council ") takes the necessary action. The County Income Tax Council is prohibited by statute from taking any action that would result in a civil taxing unit having a smaller distributive share than the share to which it was entitled when it pledged the CEDIT revenues. -4-