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HomeMy WebLinkAbout9637-05 Pledging the use of revenues for repayment of a section 108 loanORDINANCE No. 9637-05 Passed by the Common Council of the City of South Bend, Indiana November 14, Attest: Presented by me to the Mayor of the City ofSoutl: Bend, Indiana 05 November 15 ZO City Clerk President of Common Council City Clerk Approved and signed by me ~d o v e m b e r 1 ~.~ 20 .~..5__ Mayer 20 05 ORDINANCE NO. ~ ~" ~~ ` ~ AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, PLEDGING THE USE OF REVENUES FOR REPAYMENT OF A SECTION 108 LOAN FROM THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TO THE CITY OF SOUTH BEND STATEMENT OF PURPOSE AND INTENT: On November 22, 2004 this Common Council adopted Resolution Number 3402-04 authorizing the Mayor to submit the City of South Bend's application (the "Application") to borrow $21,000,000 through the United States Department of Housing and Urban Development's ("HUD") Section 108 Loan Guarantee Program ("Section 108 Loan"). Following discussions with HUD, the City reduced its loan request to $11,980,000. In accordance with HUD policy, the City must provide security for the repayment of the notes issued to evidence the Section 108 Loan. The City has determined to make loan payments from several sources of funds including TIF from the Sample Ewing Development Area, income tax and sales tax revenues from the Community Revitalization & Enhancement District ("CRED"), and proceeds from the sale of land in the Studebaker/Oliver project area. The South Bend Redevelopment Commission adopted a resolution at its meeting on Friday, November 4, 2005, pledging TIF revenues that maybe generated from the Sample Ewing Development Area to the payment of the Section 108 Loan. The South Bend Advisory Commission on Industrial Development has also pledged income tax and gross retail incremental revenues which are expected to be generated in the Studebaker/Oliver CRED for the purpose of paying debt service on the Section 108 Loan. The term of the City's Section 108 loan is up to ZS years with repayments by the City ranging from a low of approximately $268,250 in 2006 to a high of $1,834,500 in 2023. NOW THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: 1. The Common Council hereby determines to issue obligations of the City to evidence the Section 108 Loan pursuant to Indiana Code 36-4-6-19 (the "Act") for the purposes set forth in the Application. The City shall use the proceeds of the Section 108 Loan solely for the purposes described in the Application. 2. The Common Council hereby authorizes the issuance of an obligation of the City for purposes of evidencing the Section 108 Loan in an aggregate principal amount not to exceed $11,980,000 (the "Obligation"). The Obligation shall be designated as the "City of South Bend, Indiana, Section 108 Loan Guaranty Program Variable/Fixed Rate Note." The Obligation shall be issued in fully registered form in the denomination of $1.00 or any integral multiples thereof not exceeding the aggregate principal amount of the Obligation to be issued. Principal of and interest on the Obligation shall be paid pursuant to the terms of the Application and as set forth in the schedule attached to the Obligation. The Obligation shall be sold by private, negotiated sale at price at par to the United States Department of Housing Urban Development or its BDDBOI 4224876v2 nominee pursuant to the terms of the Application and the Obligation. The Obligation shall be dated as of the date of its issuance. The Obligation shall mature on a date not later than 25 years from the date of original issuance thereof and shall bear interest at rate or rates not to exceed such rates as maybe determined by the terms of the Application and of the Obligation. The Obligation may be redeemed by the City in whole or in part, upon 14 days notice as provided in the Obligation at the purchase price of 100 % of the outstanding principal amount to be redeemed, plus accrued interest thereon to the date of redemption and without premium. 3. The Clerk of the City is hereby appointed as Registrar (the "Registrar") for the Obligation and is hereby charged with the responsibility for authenticating the Obligation. The Registrar shall keep and maintain at his principal office books for the registration of the Obligation. The Obligation shall be transferable or exchangeable only upon the bond register by the registered owner thereof in person, or by his attorney duly authorized in writing, upon surrender of such Obligation together with a written statement of transfer or exchange satisfactory to the Registrar duly executed by the registered owner, or his attorney duly authorized in writing, and thereupon a new fully registered Obligation in the same aggregate principal amount and of the same maturity shall be executed and delivered in the name of the transferee or transferees to the registered owner, as the case maybe, and in exchange therefor. 4. The Obligation to be issued by the City to evidence the Section 108 Loan shall be secured by the pledge of the CRED revenues and the TIF. On behalf of the City, the Common Council hereby agrees to apply the funds TIF pledged by the Redevelopment Commission and the CRED pledged by the Advisory Commission to the payment of the principal of and interest on the Obligation when due. 5. The Mayor and the Clerk of the City are hereby authorized and directed to execute, attest and deliver and the Clerk is hereby authorized to affix the seal on, when and if appropriate, the Obligation together with any documents, instruments or certificates they deem necessary or appropriate upon the advice of counsel to complete the transactions contemplated herein. The Obligation shall be executed in the name of the City by the manual or facsimile signature of the Mayor of the City and attested by the manual or facsimile signature of the Clerk of the City, who shall cause the official seal of the City to be impressed or a facsimile thereof to be printed on the Obligation. Subject to the provisions for registration, the Obligation shall be negotiable under the laws of the State of Indiana. 6. This Ordinance shall be in full force and effect from and after passage by the Common Council and approval by the Mayor and shall not be repealed or amended in any manner which would serve to adversely affect the Section 108 Loan, the issuance of the obligation or the funds identified herein which have been pledged for the payment of principal of and interest on the Section 108 Loan. BDDBOI 4224876v2 - 2 - Member of the Common C nil Attest: ity CI k Presented by me to the Mayor of the City of South Bend, Indiana on the l S~~ day of ~wz,r~,~Q,~ , 2 C~0 , at 3 '~ ~~ o'clock ~p .. m. '~a.~-~ p,,..k City Clerk ,~-ppraved and signed by me on the /~ day of ~"' 2 ~ ~ , at S ; ~ o'clock. m. ~~ w-- ~ May r, City South Bend, Indiana 1st READING 14 ~'??`'~' OS PUBLIC NEARING (~-('(-aS"" ~S ~~~~~~ ~ 3rd READING (~-l'~~S- Ck.S S'e,4~os~-+.~~~ NOT APPROVED REFERRED t, ; ~~ ti~ PASSED ~t-t i-~ a ~ 5 U ~f''?-3-- Filed in Cierk'e ~f~ice i~OV " 9 2005 JOHN VOOADE ~m(Ct,EAK, SO. gEND, IN. TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: Your Committee of the Whole, to whom was referred: BILL NO. 83-05 A BILL OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, PLEDGING THE USE OF REVENUES FOR REPAYMENT OF A SECTION 108 LOAN FROM THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TO THE CITY OF SOUTH BEND Respectfully report that they have examined the matter and that in their opinion, this bill is being recommended to the full Council with a favorable recommendation. Roland Kelly Chairman 1ZOO COUNTY-CITY BUILDING 227 W. JEFFERSON BOULEVARD SOUTH BEND, INDIANA 46601-1830 PHONE 574/235-9371 FAx 574/235-9021 TDD 574! 235-5567 CITY OF SOUTH BEND STEPHEN J. LUECKE, MAYOR COMMUNITY ~ ECONOMIC DEVELOPMENT SHARON T. KENDALL EXECUTIVE DIRECTOR November 9, 2005 South Bend Common Council Fourth Floor Council Chambers 400 County City Building South Bend, IN 46601 Dear Council Members: Attached is a substitute Bill No. $3-OS which is scheduled for second reading on November 14, 2005. When we filed the original bill there was some uncertainty about the source of funds that would be used to repay the Section 108 loan for the Studebaker/Oliver project. The original bill pledged County Option Income Tax to repay the Ioan. Since that time we have determined that the loan will instead be repaid from Community Revitalization Enhancement District (CRED) funds and TIF funds. The Advisory Commission on Industrial Development has pledged the use of CRED funds for repayment of the loan and the South Bend Redevelopment Commission has pledged the use of TIF funds from the Sample Ewing Development Area as a second source of repayment. I will attend the Council meeting on the 14th. In the meantime, please call me at 235-9374 if you have any questions. Sincerely, Ann E. Kolata Senior Redevelopment Specialist cc: Aladean DeRose COMMUNITY DEVELOPMENT ECONOMIC DEVELOPMENT PAMELA C. MEYER DONALD E. INKS 574/235-9660 5741235-9371 FAX: 574/235-9697 Filed !n Cterk's Office NOV - 9 2005 .10HH YOORDE CITY CLERK, S0. BEND, tN. FINANCIAL RC PROGRAM MANAGEMENT ELIZABETH LEONARD 574/235-9371