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HomeMy WebLinkAbout1990-12-28 Resolution 30E a r. RESOLUTION NO. 30 RESOLUTION OF THE SOUTH BEND REDEVELOPMENT AUTHORITY APPROVING AN OFFICIAL STATEMENT RELATING TO THE ISSUANCE OF THE SOUTH BEND REDEVELOPMENT AUTHORITY LEASE RENTAL REVENUE BONDS (AIRPORT ECONOMIC DEVELOPMENT AREA PUBLIC IMPROVEMENT PROJECT) AND AUTHORIZING DISTRIBUTION OF INFORMATION WHEREAS, the South Bend Redevelopment Authority (the "Authority") at a meeting on December 17, 1990 adopted Resolution No. 27 (the "Bond Resolution") authorizing the issuance and sale of bonds to be known as the "South Bend Redevelopment Authority Lease Rental Revenue Bonds (Airport Economic Development Area Public Improvement Project)" (the "Bonds") pursuant to IC 36-7-14.5 et se ., in the aggregate principal sum of Two ;Million Three Hundred Fifty Five Thousand Dollars ($2,355,000), the proceeds of which are to be used to finance certain land and public improvements (the "Improvement Project") and to pay the costs of issuance of the Bonds; and WHEREAS, an Official Statement dated December 21, 1990, (the "Official Statement") relating to the issuance of the Bonds has been prepared by H. J. Umbaugh & Associates, as financial advisors to the Authority, and presented to the Authority; WHEREAS, the Authority desires to publish notice of intent to sell bonds as provided for in the Bond Resolution; and NOW, THEREFORE, BE IT RESOLVED BY THE SOUTH BEND REDEVELOPMENT AUTHORITY AS FOLLOWS: 1. The Official Statement is hereby approved in the form presented to the Authority at this meeting, contained therein, and the Official Statement in the form presented at this meeting is hereby deemed final for purposes of the provisions of Rule 15c2-12 of the Securities and Exchange Commission. H. J. Umbaugh & Associates is hereby authorized and directed to cause to be distributed such statement substantially in the form presented to this meeting, with such changes as may be required by amendments to the Lease between the Redevelopment Authority and the Redevelopment Commission dated August 1, 1990 which are approved by the Authority's legal counsel as H. J. Umbaugh might recommend to describe adequately the Bonds and information related thereto, to all parties who in their judgment may be interested in bidding on such Bonds; and the Authority shall place a copy of such Official Statement as presented to this meeting with the minutes of this meeting. 2. The Secretary of the Authority is authorized and directed to publish notice of intent to sell bonds as provided for in the Bond Resolution in the Tri-County News, the South Bend i ~~ N... Tribune, and The Indianapolis Commercial and The Indianapolis Star on December 21 and December 28, 1990. 3. This Resolution shall be in full force and effect from and upon compliance with the procedures required by law. ADOPTED at a meeting of the Authority held on December 21, 1990, in the offices of the Authority, 1200 County-City Building, 227 West Jefferson Boulevard, South Bend, Indiana 46601. CITY OF SOUTH BEND REDEVELOPMENT AUTHORITY By: ose Wroblewski, President ATT ST: Donald Fewell, Secretary-Treasurer -2- \rlhill\sthbnd\aixport\resoluti\ra-aos.te;tmg;12-19-90; South Bend Redevelopment Authority South Bend, Indiana Preliminary Official Statement $2,355,000 ..ease Rental .Revenue Bonds Bond Saie Time and Date of the Sale Will be by Notification ]2U0 County•City Building South Bend, Indiana .. r ~ , ' ago r.r,. ~ ~ i~~~. ~d"~, ~ Rating: DEC Moody's o ~ ° PRELIMINARY OFFICIAL STATEMENT DATED DECEMBER 21,.1990 r~~ ~;~ ~ Indianapolis, Indiana, under existing laws, E In the opinion of Baker & Daniels, g ° ~ regulations, judicial decisions and rulings, interest on the .Lease Rental Bonds is o a excludable from gross income under Section 103 of the Internal Revenue Code of d ~ 0 1986, as amended, for federal income tax purposes. Such. exclusion is conditioned g o A on continuing compliance with the .Tax Covenants (hereinafter defined). In he R•r d opinion of Baker & Daniels, Indianapolis, Indiana, under existing laws, e `-'' udicial .decisions and rulin s, interest on the Lease Rental Bonds is ='s s regulations, j g r t ~ exempt from income taxation in the State of Indiana, except with respect to the d s ~ Indiana Franchise Tax. imposed on financial institutions as more fully described ~_ "~ ~'a herein. See "TAX MATTERS" herein. m O .°o N d = a ~---- $2,355,000 f :_o~ A ~ SOUTH BEND REDEVELOPMENT AUTHORITY N -d.. ~ SOUTH BEND, INDIANA .y r LEASE RENTAL REVENUE BONDS - ~ R ai O ~? (Airport Economic Development Area .~ },~ ~ Public Improvement Project) .~ ~ ~n o R Original Date: March 1, x,991 Due: August 1st as shown below _; d o '~ R o The South Bend Redevelopment Authority (the "Redevelopment Authority") is issuing o $2,355,000 of Lease Rental Revenue Bonds (Airport Economic Development area Public d- o a ~ Improvement Project) (the "Lease Rental Bonds") for'the purpose of widening and o ~ ~ extending roads and utilities and land acquisition. In addition, bond proceeds .will .provide for issuance expenses :and capitalized interest. The Lease Rental ~~ y~ Bonds 'are payable from semi-annual lease rental payments to be paid by the' South A o Bend Redevelopment Commission (the "Commission") directly to Society Bank located o E d in South Bend, Indiana, as Trustee (the "Trustee"), under a Trust Agreement, dated o 0 o as of December 1, 1990, between the Redevelopment Authority and the .Trustee (the o "Trust Indenture") and a lease dated as of August 1, 1990 and restated and amended ° ~'~_ as of December 21, 1990 (the "Lease") between the Redevelopment Authority as Lessor d~._ " ~•" and the Redevelopment Commission as Lessee. 3 E H d .° y R o The Lease Rental Bonds are being issued pursuant to ZC 36-7-14.5. The Lease Rental ._ •~ _ ~ Bonds will be issued in fully registered form in the denomination of $5,000 or any d •- integral multiple thereof. Interest payable August 1, 1991, and semi-annually d d U 3 .thereafter, will be-paid by check .mailed by the Trustee to the registered owners at o ~ ~ their addresses as shown on the registration .books maintained by the Trustee. The v ._ C o d ° Lease Rental Bonds are'subject to optional-redemption, prior to maturity., beginning ~~ ~ ~ August 1, 2000 as more fully described herein. oN L ~ ~ LEASE RENTAL REVENUE BONDS ~o " = "' Interest Interest e E d Maturity Principal Rate Price Maturity Princital Rate Price d -- h :~ L d ~, _.. N ~°` ~ 8/1/97 $ 50,000 ~ ~ 8/1/05 $150,000 $ ~ .`-'co 8/1/98 70,000 ~ $ 8/1/06 160,000 $ ~ z d y 8/1/99 90,000 $ ~ .8/1/07 170,000 ~ ~ ~~~ E ~ ~ 8/1/00 100,000 ~ ~ 8/1/08 185,000 $ $ •a ~ d 8/1/01 110,.000 $ ~ 8/1/09 200,000 ~ $ " ''~ 8/1/02 120,000 $ ~ 8/1/10 210,000 $ ~ ~~~ 8/1/03 130,000 $ ~ 8/1/11- 230,000 ~ ~ 8/1/04 135,000 ~ ~ 8/1/12 245,000 ~ ~ The Lease Rental Bonds are being offered for received by the Underwriter and subject to Daniels, Indianapolis, Indiana, Bond Counsel. to be available for delivery in Indianapolis, ,^. arr ~ n T ~r a ~ ? ~ 9 ~ ~ 93990 delivery when, as and~i'f issued and the approval of legality by Baker & The Lease Rental Bonds are expected Indiana, on or about March 8, 1991. IN CONNECTION WITH THIS .OFFERING THE UNDERWRITER MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE LEASE. RENTAL BONDS OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET, AND SUCH STABILIZING, IF COMMENCED,. MAY BE DISCONTINUED AT ANY TIME. No dealer, broker, salesman or other person has been authorized by the Redevelopment Authority or the Underwriter to give any information or to make any representations, other than those contained in this Official Statement, and if given or made, such other .information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an .offer to buy nor shall there be any sale of the Lease Rental Bonds by any person in the State in which it is unlawful for such person to make such offer, solicitation or sale. The information set .forth herein has been provided by the Redevelopment Authority and other sources which are believed to be reliable but it is not guaranteed as to accuracy or completeness and.. is not to be construed as a representation by, the Underwriter. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale of the .securities described herein shall, under any circumstances, create any implication .that there has been no change in the affairs of the .Commission since the date of delivery of the securities descrioed herein to the initial purchaser thereof. However, upon delivery of the securities, the Redevelopment Authority will provide a certificate stating that there have been no material changes in the information contained in the final Official Statement, since its delivery. TABLE OF CONTENTS Page Introductory Statement. 1 Description of the Bonds . 1 Security for the Bonds . 2 Bond Rating 2 Redemption Provisions 2 - 3 Risk Factors to be Considered by Investors. 3 Schedule of Amortization of $2,355,000 Principal Amount of Lease Rental Revenue Bonds . 4 Estimated Sources and Uses of Funds 5 Underwriting . 5 Opinion of Bond Counsel 5 Litigation. 5 - b Miscellaneous 6 Appendices as Tabbed: A Notice of Intent to Sell B General Information C Accounting Report D Lease E Trust Indenture Excerpts. F Legal Opinion and Tax Matters v ,-'T ~' • • ~s 1 3 PRELIMINARY OFFICIAL STATEMENT :$2,355,000 SOUTH BEND REDEVELOPMENT AUTHORITY LEASE RENTAL REVENUE BONDS (Airport Economic Development Area Public Improvement Project) ~~ ~ ~q era j r ~+-^~~ INTRODUCTORY STATEMENT This -0fficial Statement sets forth certain information concerning. the offering of $2,355,000 of aggregate principal amount of Lease Rental Bonds by the South Bend Redevelopment Authority. The. Lease Rental Bonds will be issued under the provisions of the Indiana Code, Title 36, Article 7, Chapter 14.5 and in accordance with the terms of the Trust Indenture.. Under the Trust Indenture, Society Bank located in South Bend, Indiana, has been designated the Trustee for the Lease Rental Bonds. The Redevelopment Authority was organized for the purpose of financing, acquiring land, constructing and leasing to the Redevelopment Commission certain sewer and road improvements in or serving the Redevelopment-Area, which is in the District, (collectively, the "Projects"), under the Trust Indenture and the Lease. The Lease Rental is payable from ad vslorem property taxes. If the Redevelopment Commission determines that tax increment will be insufficient to pay the Lease Rental, the Redevelopment Commission must annually: levy a tax on all taxable property in the District in an. amount which, together with tax. increment to be collected, will be sufficient to produce the necessary funds-with which to pay the Lease Rental provided for in the Lease as it becomes due and payable. The District is coterminous with the City. DESCRIPTION OF THE BONDS General The Lease Rental Bonds will be dated the first day of the month in which they are delivered (anticipated to be March 1, 1991), and mature in the amounts and on the dates and bear interest at the rates set forth on the cover page of this Official Statement. Paying, Agent The principal and redemption price of the Lease Rental Bonds are payable at the principal office of Society Bank, located in South Bend, Indiana, as Trustee. Interest is payable by check mailed by the Trustee to the registered owners at their addresses as shown on the. registration books maintained by the Trustee on the fifteenth day of the month immediately preceding the interest payment date. -1- i -~ i ~ r~ ~ `..:- ~ DES` i 9~ t89d SECURITY FOR THE BONDS The Lease Rental Bonds are being issued by the Redevelopment Authority and are secured by .payments. of Lease Rental to be paid by the Redevelopment Commission directly to the Trustee (for the account of the Redevelopment Authority) pursuant to the terms of the Lease. The Lease Rental is payable beginning on the later of the date on which the Projects are complete and ready and available for use or July 28, 1992. Thereafter, the Lease Rental is payable semi-annually on each January 28th and Juiy 28th. Capitalized interest in the amount of $416,225 will be used to pay a portion of the interest on the-Lease Rental Bonds. The Lease Rental to be paid by the Redevelopment Commission during-the term of the Lease is required to be in amounts sufficient to pay the principal of and interest on the Lease Rental Bonds. Such annual rental is payable from ad valorem property taxes.. The bonds are secured by a pledge of unlimited ad valorem property taxes levied on all taxable properties in the District. Each year on July 1st or when the City prepares its budget, the Redevelopment Commission shall estimate the amount of tax increment expected to be collected in the subsequent calendar year. To the extent tax increment is not available or is not expected to be available on the dates on which the Lease Rental is due in the subsequent .year, the Redevelopment Commission shall annually levy a special benefits tax on all taxable property in the District in accordance with IC 36- 7-14-27. BOND RATING Moody's Investors Service, Inc. (Moody's) .has assigned a bond rating of to the Lease Rental Bonds. Such rating reflects only the view of Moody's and any explanation of 'the significance of such rating may only be obtained from Moody's. The rating is not a recommendation to buy, sell or ..hold .the Lease Rental Bonds, and such rating may be subject to revision or withdrawal at any time"by Moody's. Any downward revision or withdrawal of the rating may have an adverse effect upon the market price of the Lease Rental Bonds. The-.Redevelopment Authority did not apply to any other .rating service for a rating on the Lease Rental Bonds. REDEMPTION PROVISIONS The. Lease Rental Bonds due on August 1, 2001, and thereafter are redeemable at the option of the Authority on August 1, 2000 or any date thereafter in order of maturity and by lot within maturities as follows: Redemption Dates Redemption Prices August 1, 2000 or thereafter on or before July 31, 2001 ~ 102 August 1, 2001 or thereafter on or before July 31, 2002 101 August 1, 2002 and thereafter prior to maturity 100 • C~ _2_ a iw,,, ... ~ ... ~~ ~:°~ z r ~.,. ~~ ~ ~~ 6.30 To evidence its intention to exercise the right of redemption, the Redevelopment Authority shall, not .less han 45 days prior to the date selected .for ~ redemption, file with the Trustee written notice of its intention. to redeem, designating the date fixed for .redemption, and if less than all of the outstanding Lease Rental Bonds are to be redeemed, stating the aggregate " principal amount of Lease Rental Bonds which the Redevelopment Authority desires .~ to redeem. :lotice of redemption shall be mailed to the address of the registered owners of the Lease Rental Bonds to be redeemed as shown on the registration record of the Trustee not less than 30 days prior to .the date fixed for redemption. Any notice shall specify the date and place of redemption. Interesx on the .Lease Rental Bonds so called for redemption shall cease on the redemption date fixed in such notice, if sufficient funds are available at the place of redemption to pay the redemption price, including interest accrued to the redemption date, on the date so named. Failure to give such notice by mailing, or any defect in such notice,- with respect to any Lease Rental Bond shall not affect the validity of the redemption of any Lease Rental Bonds. RISK FACTORS TO BE CONSIDERED BY INVESTORS Prospective investors in the Lease Rental Bonds should be aware of the following risk factors: . 1. The Lease Rental Bonds are payable solely from lease rental payments from the Commission to the Authority and other Pledged Funds as defined in the Trust Indenture. The Authority has no taxing power. Under the Lease., the lease payments will not begin until the later of July 28, 1992 or completion of the Projects. Zn the event the Projects are not completed, the lease payments would not be made. 2. In reference to the risk described in number 1 above, in the event there is excessive delay in completion of the Projects so as to be delayed beyond July 28, 1992 sufficient revenues :may not be available to meet the 'interest payment due on'August 1, 1992 and subsequent interest and principal payments. 3. In the event the Projects should ever be totally or substantially destroyed, the lease rental shall be abated during the period in which the Projects are unfit for their intended use. However, rental value insurance will be available to make Lease Rental Bond payments during the time the cease rental is abated, for a period of up to two years. If either.(i) the cost of reconstruction of the Projects would exceed. the amount of insurance proceeds or (ii) such reconstruction cannot be completed within the period of time covered by rental value insurance, the insurance proceeds will be applied to the redemption of all outstanding Lease Rental Bonds and the full discharge of all obligations pertaining thereto. 4. No provision has been made either for redemption of the Lease Rental Bonds or for an increase in the interest rate on the Bonds in the event that interest on the Lease Rental Bonds becomes subject to income taxation. • 5. In the event of delayed billing, collection, or distribution of property .taxes by the county auditor, sufficient funds may not be available to the Commission in time to make lease rental payments when due. -3- • J I ~ y h,~ 5 ~.'~}~ SCHEDULE OF AMORTIZATION OF S2.355.000 PRINCIPAL ~°`~ ~~°~~~~^b1v AMOUNT OF LEASE RENTAL REVENUE BONDS ~E~, ~ g ,~D~~ Debt Service Payment Principal Interest Bond Year Date Balance Principal Rate Interest Total Total (In Thousands) (In Dollars) 8/1/91 $2,355 2/1/92 2,355 8/I/92 2,355 2/1/93 2,355 . 8/1/93 2,355 2/1/94 2,355 8/1/94 2,355 2/1/95 2,355 8/1/95 2,355 2/1/96 2,355 8/1/96 2,355 2/1/97 2,355 8/1/97 2,355 $ 50 2/1/98 2,305 8;1/98 2,305 70 2%1/99 2,235 .8/1/99 2,235 90 2/1/00 2,145 8/'_/00 2.,145 100 2/1/01 2,045 8/1/01 2,045 110 2/1/02 1,935 8/1/02 1,935 120 2/1/03 1,815 8/1/03 1,81.5 130 2/1/04 1,685 8/1/04 1,685 135 2/1/05 1,550 8/1/05 1,550 150 2/1/06 1,400 8/1/06 1,400 160 2/1/07 1,240 8/1/07 1,240 170 2/1/08 1,070' 8/1j08 1,070 185 2/1/09 885 8/1/09 885 200 2/1/10 685 8/1/10 685 210 2/1./11 475 8/1/11 475 230 .2/1/12 245 8/1/12 245 245 Totals 2 355 • I • -4- ~; i ,.~.. s x '~ ~ 5 ESTIMATED SOURCES AND USES OF FUNDS ~ ~ G ~ 9 fi~9O The proceeds from the sale of the Lease Rental-Bonds will be applied to the costs of constructing the Projects, the ..payment of capitalized interest and the ,payment of bond issuance costs. The- estimated sources and uses of funds are summarized below; Estimated Sources of Funds: Proposed Lease Rental Bonds $.2,355,000 Estimated Uses of Funds: Construction and related costs $1,830,000 Allowance for capitalized interest 416,.225 Underwriters discount 47,100 Bond issuance costs 105,000 Less: Capitalized interest fund earnings (43.325) Total estimated uses of funds ~2,35~ S~®¢000 UNDERWRITING The Lease Rental Bonds are being purchased for reoffering by the Underwriter, (the "Underwriter") at a purchase price of $ plus accrued interest from March 1, 1991. The Notice of Intent to Sell provides that all of the Lease Rental Bonds will be purchased by the Underwriter if any of such Bonds are purchased. The Underwriter intends to offer the Lease Rental Bonds to the public at the offrering prices set forth- on the inside cover page of this Official Statement. The Underwriter may .allow concessions to 'certain dealers (including dealers in a selling group of the Underwriter :and other dealers depositing the Lease .Rental Bonds into investment trusts), who may reallow concessions to other dealers. After the initial public. offering, the offering price may be varied from time to time by .the Underwriter. OPINION OF BOND COUNSEL Legal matters incident to the authorization and issuance of the Bonds are subject to the unqualified approving opinion of Baker & Daniels, Indianapolis, Indiana, Bond Counsel.. Copies of such opinion will be made available by the. Authority at the time of the delivery of the Bonds. Bond Counsel has not undertaken to review the accuracy or completeness of any representation contained in this Official Statement and expresses no opinion thereon nor assumes any responsibility in connection therewith. A form of the legal opinion can be found as Appendix F of this Official Statement. LITIGATION At the time of delivery of the Bonds, the Authority will certify that there is i no litigation or other proceedings pending or, to the .knowledge. of the Authority, threatened in any court, agency or other administrative body restraining or contesting the issuance of the Bonds or in any way affecting the validity of any provisions of the Bonds. eye ...~, ~ Y s .~ ;. .~ ~. As of the date of this Official Statement, legal counsel for the Authority, to . the best of his knowledge, is aware of no meritorious litigation pending against the Authority wherein an unfavorable decision or decisions would result in an award or awards which would, separately or collectively, adversely affect in a material manner the financial condition of the Authority. MISCELLANEOUS The references, excerpts and summaries of all documents referred to herein do not purport to be complete statements of the provisions of .such documents, and reference is directed to all such documents for full and complete statements of all matters of ..fact relating to the Lease Rental Bonds, the security for the payment of the Bonds and the rights and obligations of the owners thereof. This Official Statement is submitted in connection with the sale of securities as referred to herein, and may not be reproduced or be used, in whole. or part, for any other purpose. The delivery of this Official Statement at any time .does not imply that information herein is correct as of any time subsequent to its date. No dealer, salesman or any other person has been authorized to give any information or to make any representation other than as contained in this Official Statement and if giver. or made, such other information or representation must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer of any securities other . than described on the inside cover page or an offer to sell or a solicitation of = an offer to buy in any jurisdiction in which such offer, .solicitation or sale would be unlawful. ' Any statements in this Official Statement involving matters of opinion, projections or estimates, whether or not expressly so stated, are intended as such and not as representation of fact. This Official Statement is not to be construed as a contract or agreement between the Authority and the purchasers or owners o~f any of the Lease Rental Bonds. The execution of this Official Statement has been duly authorized by the South Bend Redevelopment Authority. A,..• 3 u i ~? 3. By: President, Redevelopment Authority -b- b APPENDIX A (To be provided by Baker & Daniels) ~. APPENDIX B Y .'.y ? ~ ~ ;'y TABLE -0F CONTENTS D~~ ,1 9 Project Personnel Project Description General Physical and Demographic Information Location. History. and General Characteristics . Population . Government . Transportation . Police and Fire Protection. . Education Communication Utilities Health Care Recreation/Culture/Library. . General Economic and Financial Information Financial Institutions . ,. Indus trv . Large Employers Employment and Labor Force Data Miscellaneous Economic Data . Building Activity Historical Net Assessed Valuations of the City of South Bend. Detail of Net Assessed Valuations of the. City of South Bend. Historical Schedule of Total Tax Rate and Detail of City Tax Rate Property Taxes Assessed and Collected . Large Taxpayers Schedule of Bonded Indebtedness . Notes to Bonded Indebtedness. . Debt Ratios Pension Liabilities Comparative Balance Sheet - All City Funds. . Comparative Statement of Revenues, Expenditures and Changes in Fund Balances.. Pa e s 1 3 3 3 4 4 4 4 5 5 5 5-6 7 7-9 10 11 12 13 14 15 16 17 18 19-20 21 22 23-24 25 ~~ ~ 3 ah `.~ . ~~ r ~( ~ PROJECT PERSONNEL SEC ~ 9 i9~fl Names and positions of officials of the City of South. Bend and professionals who have taken .part in the planning of this project are: Mayor Joseph E. Kernan, Mayor Common _C__ouncil Thomas Zakrzewski, President Loretta Duda, Vice President Sean .Coleman Stephen Luecke Donald Niezgodski William Soderberg Ann Puzzello Linda Slavinskas John Voorde Redevelopment_Commission F. Jay Nimtz, President Paula N. Auburn, Vice President Roman J. Piasecki, Secretary Sandy Combs Michael Donoho Redevelopment Authority Joseph W. Wroblewski, President Donald K. Fewell, Vice President -- George W. McCullough, Jr., Secretary-.Treasurer Department of Economic Development - Jon R. Hunt, Executive Director Ann E. Kolata, Deputy Executive Director Bond Counsel Richard L. Hill Baker & Daniels 205 West Jefferson Boulevard South Bend, Indiana 46601 Bond Counsel Richard Starkey Baker & Daniels 300 North Meridian Street .Suite 2700 Indianapolis, Indiana 46204 Financial Advisor Myron H. Frasier H. J. Umbaugh & [associates Certified Public Accountants Suite 100, 20 East 91st Street P.O. Box 40458 Indianapolis, Indiana 46240 -1- (This page intentionally left blank.) -2- _' Project Descrivtion The proposed project to be financed by $2,355,000 of Lease Rental Revenue Bonds includes extending water .and sewer lines, land acquisition and constructing streets to development sites .within the area. The City's Airport 2010 project, in which this issue is the first phase, is a major, long-term economic development project which will develop 2,300 acres of land around the Michiana Regional Airport. The complete project is expected to result in hundreds of millions of dollars of private investment, including a new office park, hotel/golf. course that will create thousands of jobs in North Central 'Indiana. GENERAL PHYSICAL AND DEMOGRAPHIC INFORMATION Location The City of South Bend is located in St. Joseph County in North Central Indiana, approximately 140 .miles north of Indianapolis and .90 miles east of Chicago. The City borders on the State of Michigan and is commonly known as the "Michiana" area. History and General Characteristics ~~~ ~ 9 199D The City of South Bend was incorporated in 1865. In the 1800's Potawatomi Indians, trappers and missionaries traveled through sections of South Bend on j~ the banks of the St. Joseph-Kankakee River. The Indians and Frenchmen settled. in the beautiful area surrounding the southern most tip of the St. Joseph River (to be known as "South Bend"). Through the .years many businesses started in South Bend including the Studebaker Brothers Manufacturing Company which became the largest wagon maker in the world. In 1892 the Holy Cross Brothers founded Notre Dame University .which has grown to over 1,200 acres and 10,000 students.- Notre Dame provides a positive impact on South Bend's economy (estimated at $432 million per year) and on .the community. The South Bend area has a mix of agriculture, manufacturing, commercial and tourism industries. This diversification provides the city with varied employment opportunities and provides for a strong economic future. Population The population for the City of South Bend and St. Joseph County is provided by the U.S. Bureau of Census.. City of South Bend St. Josep h County Percentage Percentage Increase/ Increase/ Year Population Decrease Population Decrease 1940 101,268 (2.8)~ 161,823 1.1 ~ 1950 115,911 14.4 ~ 205,058 26.7 ~ 1960 1970 132,445 125,580 14.3 $ (5.2)~ 238,614 2#4,827 16.4 $ 2.6 ~ 1980 109,727 (12.6) 241,617 (1.3)~ 1988 (est.)* 106,190 (3.2)~ 244,200". 1.1 ~ *Estimate as of July 1 -3- ~,~~~ j ~ J -- is u 21 Government ~~~ ~ ~ -~~ The City government of South Bend is comprised of a Mayor, a nine member Common Council and City Clerk all elected to four-year terms of office. The Common Council is composed of six members elected from districts and three members at- large. Supplemental governing bodies include the Redevelopment Commission, Board of Public Works, Board of Safety, and Board of Parks and Recreation. Transportation Transportation is easily accessible in South Bend with interstates I-80 and I-90 running east and west and U.S. 31, the main North/South route in the City which leads travelers to Michigan within minutes and Indianapolis in less than three hours. In addition, 45 truck lines provide carrier services. Fire rail systems provide freight and passenger service and the. Chicago South Shore Line connects with downtown Chicago's "loop". Amtrak provides service to major U.S. cities also. Bus transportation within the City is provided by the municipal bus service (Transpo) and STS For the elderly. Three major bus lines provide travel to many cities in the United States. The Michiana Regional Airport serves the City with nine passenger lines providing flights.. to major cities. Commuter and freight service flights are also available . Chicago's O'Hare Airport is located approximately 120 miles from South Bend. ?olive and Fire Protection The City of South Bend Police Department provides police protection for residents of South Bend and consists of 230 officers and 105 vehicles.. The department consists of K-9 patrols, a swat team, metro drug task force and bicycle and motorcycle patrols. The South Bend Fire Department includes 212 firefighters with equipment consisting of pumpers, river rescue boats, ambulances, ladder trucks and hazardous materials trucks. Education The City of South Bend is served by the South Bend Community School Corporation and the Penn-Harris-Madison School Corporation. The school systems provide a variety of academic and extracurricular activities. The Penn-Harris-Madison School Corporation has an enrollment of 7,847 students for the 1990-91 school year and has a certified staff of 444 and a non-certified staff of 325. The school system includes one high school, two middle schools and nine eiementaries. Penn-Harris-Madison School Corporation is finishing a $39.5 million renovation/addition project that began in the fall of 1987. Most of the new construction included a 4,000 seat gymnasium, auditorium, library and pool. The South Bend School Corporation includes five high schools, five middle schools and 25 elementaries with a total enrollment of 20,565. Certified staff includes 1,489 and non-certified staff includes 1,419 employees. South Bend has nine institutions of higher education and/or technical training including the University of Notre Dame, St. Mary's College, Indiana University at South Bend, Bethel College, Holy Cross College, a Purdue Program, Indiana Vocational Technical College, Michiana College and Davenport College. These educational institutions have a total enrollment of over 20,000 students. -4- ;".~.. ..-3.. ~i *A . ~ ~~ a~~ ~ Communication #3EC a 9 x.99? Communications are provided by the daily South Bend Tribune and the Tri County `~ News provided on a weekly basis. Several'AM and FM radio stations within South Bend and Elkhart, as well as stations from Chicago, provide news and music to a variety of listeners. All major television networks are available to residents of the City with signals originating in Elkhart and Chicago. Cable television is also available throughout most of the City. Utilities The City of South Bend receives natural gas from Northern Indiana Public Service Company (NIPSCO), electric service from Indiana and Michigan Electric Company and telephone service from .Indiana Bell Telephone Company. Water and sewage treatment and collection are provided by the City's Municipal Utilities. Health Care The City of .South Bend and the Michiana area is served by four acute care hospitals, Memorial Hospital, Michiana Community Hospital, St. Joseph Medical Center in South Bend and St. Joseph .Hospital in Mishawaka. Memorial Hospital is a 526-bed hospital with 2,100 employees.. The hospital is undergoing extensive growth including a $9.5 million ambulatory care and outpatient surgery center. The Center will provide six operating rooms, two of which will have laser-equipment, and admitting and recovery area. This project is expected to be completed by November, 1991. Additions and renovations also include a $1 million Leighton Center for senior resources which will be completed in May,. 1991, a $1.8 million expansion of the open heart recovery area and a renovation of the pediatric intensive care center. The St. Joseph Medical Center employs 1,685 full and part-time employees and is licensed for 339 beds. They opened a $8 million outpatient care facility in January of 1989. The hospital is also undergoing several internal remodeling projects and additions, including more operating rooms. The Michiana Community Hospital employees 450 and is a 107-bed hospi al. Charter Hospital of South Bend is a psychiatric care facility with: treatment programs for alcohol and drug abuse. In addition, there are 13 nursing homes in the City of South Bend. Recreation/Culture/Library The City of South Bend has a wide-variety of recreational facilities available to the residents. The City has 71 public parks covering 1,400 total acres which provide swimming- pools, softball and baseball diamonds, tennis courts, 35 supervised playgrounds and a recreational center. The Parks Department also provides two 18-hole championship golf courses and one 9-hole course. The City of South Bend is the home of the South Bend White Sox, a minor league team of the .Chicago White Sox. Coveleski Regional Baseball Stadium, named after Hall of Famer, Stanley Coveleski, is a new 5,000 seat facility which is rated as one of the best stadiums in minor league baseball and holds sold-out crowds during the White Sox's season. Last year the team won the Midwest League Championship and placed third in attendance in comparison to all Class A teams. _ -5- b..5 t a ~ ~,• __ Recreation/Culture/Library (Cont'd) The- St. Joseph River flows through the City and provides scenic and boating pleasure. The Olympic-class East.Race Waterway runs adjacent to the St. Joseph River and is a 2,000 yard man-made rafting and kayaking course. This waterway is the only man-made white rapids in the United States. In the summer, national and regional competitions are held on the course. Other attractions include the Morris Civic Auditorium which offers Broadway plays and the South Bend Symphony, the Studebaker Museum which houses a collection of carriages, wagons, cars and trucks, the Potawatomi Zoo and the Morris Conservatory. Century Center,. located on the riverfront park, has 54,000 square feet of exhibit and convention space available as well as a recital hall, performance area and theatre. Activities are also available at the many colleges and universities in the City, especially St. Mary's College, Notre Dame University, Bethel College and Indiana University at South Bend. The St. Joseph County Library, as well as the Indiana University at South Bend Library, and the Mishawaka-Penn Library provide a wide range of library services to residents of the area. The St. Joseph County Library is currently completing $8 million of renovations and additions to several branches. One addition to the largest library branch is completed, as is a parking lot addition at another location. The 40,000 square foot addition to the main library is expected to be completed by Summer, 1991.. i i -6- ..:J,%' `~~ ~ ~ r~ ~;. A ~O' L.` ~ J~ 1 9 Y~i. GENERAL ECONOMIC AND FINANCIAL INFO RMATION Financial Institutions I The following is a list of financial institutions in the City of South Bend. Total resources are reported as of September 30, 1990 as follows: i Number of Number of -Locations in Reported _ Locations South Bend Resources Standard Federal Bank 114 3 $9,485,000,000 First Source Bank 27 12 1,193,174,000 Society Bank, Indiana 42 11 1,103,51.3,000 Ameritrust National Bank, Michiana 26 1 1,061,201,208 (1) Valley American Bank & Trust Co. 20 8 541,755,000 First Interstate Bank 8 8 259,914,000 (2) Sobieski Federal Savings & Loan Ass oc. 4 4 62,500,000 Midwest Commerce Bank 16 1 27,-026,207 Summit Bank of South Bend 1 1 19,153.,000 (1) Was formerly known as Pionee r Federal Savings & Loan Association. Was bought out~by Ameritrust May, 1990.. (2) On January 30, 1991 will consolidate into Norwest Bank, Indiana. Industrv The industries of South Bend manufacture a variety of products including engine controls, plastic pipes, vinyl siding, electric switches and garden tractors. The Michiana area provides varied employment opportunities and for the calendar year 1989, .the average total employment was at an all-time high of 129,890 out of a total labor force of 135,820, with an unemployment rate .of 4.4~. As reported by the Indiana Department of .Employment and Training Services. The attraction of new business and the development of four industrial parks has expanded. the economic base during the last five years. Total employment for 1989 in the .industrial parks was 4,741 with an annual payroll of $114.2 million. In early 1990, $4:9 million Redevelopment District bonds were sold and will be used for the. acquisition and demolition of the old industrial corridor that used to house the Studebaker plant. A new industrial park is expected to be developed and .will provide for more economic development opportunities in South Bend. Bendix Aviation Corporation,. initially an automotive brake factory is now a major part of Allied-Signal Inc., composed of three major businesses: aerospace, automotive, and engineered materials. Today, Bendix carbon brakes are used in a number of commercial and military aircraft and is a world leader in this field. Small manufacturing firms (50 employees or less) are a growing force in the area's economy with 81.3 percent of all St. Joseph County manufacturing firms being within this category. -7- ~ ~ ~~ S...i:~ 3 4 ~Y QED ~ 9 ~~~ Industry (Cont'd)- Retail and shopping facilities also employ a large work force in the South Bend area. .There are four enclosed malls as well as a Buyers' marketplace and several shopping centers throughout the County providing consumer goods to residents. The following are excerpts from the South Bend-Mishawaka area Chamber of Commerce reports on business expansion and new investment activity in St. Joseph County. FEDERAL EXPRESS is planning a major expansion of its air cargo operation on five to six acres of land leased from the Airport Authority on the south side of the Michiana Regional Airport. Plans call for construction of a building enclosing 50,000 square feet along with installing a plane holding ramp and a taxiway connecting the facility to the airport runways. The proposed expansion will serve as both an air cargo operation and a trucking center with the building being used to house and maintain 50 local delivery trucks. Employment is expected to increase from its current figure of 80 people. FIVE STAR ENTERPRISES is completing a $1.8 million condominium office building. The 23,000 square foot faacility features impressive views of the river from 10 ft. wide open porches constructed on each of the building's three levels. Portions of the building have been sold to Resources Planning Group, Michiana Neuro Surgery, Professional Employers Service, an accountant and a financial consultant. Once finished, approximately 50 people are expected to be employed there. I/IN KOTE is the. latest joint venture by Inland .Steel Industries and Nippon Steel. Corporation now being built adjacent to the, completed I/N Tek plant near New Carlisle. The $450 million addition will add two zinc coating lines - a 400,000 ton electrogalvanizing line and a 500,000 ton hot-dip galvanizing-line for producing the highest quality coated steel needed by automobile and appliance manufacturers. Construction started a year ago, with completion planned for the end of 1991. Estimates put employment at 170 people bringing the total number of workers to 400 at the two plants. The two plants represent a total investment of $900 million making it the largest American-Japanese joint venture in the country. It becomes the largest single building project in the history of St. Joseph County. Three governments and private agencies are jointly planning construction of $14 million in roads, sewer lines and a water•treatment plant to accommodate the new I/N Kote plant. LEIGHTON CENTER FOR SENIOR HEALTH will be a two-story, 7,000 square foot comprehensive senior citizens health center to be built next to Memorial Hospital. The home-like facility will feature a library, activities rooms and a demonstration kitchen for dietary education keyed to older adults and care- givers.. Construction began in July and is expected to be completed in May, 1991. n MEIJER. INC. has three sites of approximately 30 acres each under contract in St. Joseph County. The Grand Rapids, MI firm builds "combination stores" of approximately 195,000 square feet that specialize in one-stop shopping. Site preparation for the 27 acre site at Edison Lakes should begin early next year and take about 13 months to build once construction starts. Stores generally cost at least $10 million .and employ 800 to 900 part-time workers. -8- jj ,6 .. ,e '~~yj~ iaet ~~ g r4~n„ ~ ~( DEC~g~~ ~ndustrv (Cont'd) NORTHERN INDIANA HISTORICAL SOCIETY held a grand opening .for Cophaholm, the 38- ~ room Oliver Mansion turned into a house museum, at ..the corner of West Washington and South Chapin Streets. Phase one includes .remodeling the existing carriage house into a visitor's center and entrance to the new museum, .and construction of a two-story gallery by late 1990. Phase two is the building of the museum ' itself to be completed by late 1992 or .early 1993. The cost of the total project will be $7 million of which $4.8 million has already been received through a County general ob ligation bond issue.. Lame Employers Below is a list of Sou th Bend's largest employers. Medical services, government and educational institutions reported employment includes full and part time employees. Reported employment is according to company personnel or the South Bend-Mishawaka Chamber of Commerce. Reported Name Tvpe of Business Em~lovment - University of Notre Dame ~ Higher education 3,300 South Bend Community School Corporation Public education 2,908 Memorial Hospital Acute. care health .facility 2,100 St. Joseph Medical Center Acute care health facility 1.,600 Allied Signal Divisions Airplane and auto-parts 1,522* City of South Bend City government 1,400 St. Joseph County County .government 900 RACO, Inc a Electrical switches and boxes 535 Automatic Molded Plastics Custom injection molders,. 525 Allied Products Corp. Sheet metal stamping 500 Michiana Community Hospital Acute care health facility 450 Wheel Horse Products Lawn and garden equipment 393 *Per South Bend/Mishawaka Chamber of Commerce C -9- ;: 3 Employment and Labor Force Data ~ E~ ~ 9 ~g~ Unemployment percentages for St. Joseph County are reported as provided by tl~ Indiana Employment. Security Division and the Indiana Department of .Employment and Training Services. Unemployment Rate St. Joseph County Year St. Joseph County Indiana Labor Force 1981 9.4~ 10.0$ 123,100 1982 9.9$ 12.0$ 120,200 1983 9.1$ 11.1 118,800 1984 7.3~ 8.6~ 118,700 1985 6.9~s 7.9~ 125,200 1986 5.9~ 6.7~ 126,500 1987 5.6~ 6.4~ 127,300 1988 4.9~ 5.3~ 130,760 1989 4.5~ 4.8~ 133,640 1990, Oct.* 5.1~ N/A~ 132,350 *Is not annually adjusted. Labor Force Data Manufacturing: Durables Nondurables Non-Manufacturing: Contract construction Transportation, communications and utilities Trade -Wholesale Trade - Resale Finance/insurance/real estate Services Government ~'stablishment Employment (In Thousands) Oct., 1990 Oct.. 1989 ~ Change 15.0 15.3 (1.9)~ 7.6 7.8 (2.5)~ 8.4 7.2 16.7 5.1 5.1 0$ 7.7 7.7 0~ 25.0 24.6 1.6~ 6.4 6.3 1.6~ 39.0 37.1 5.1$ 12..9 12.0 7.5~ 127.0. 123.1 3.2~ Total -10- ^$ -~~M Earnings by major employment divisions in 19$8 for St. Joseph County are as follows: s Percent of Industry Earnings Earnings (In 1,000's) Services $ 763,414., 27.5 Manufacturing 744,951 26.8$ .Wholesale/retail trade 490,349 17.7 Government 256,393 9.2~ Contract construction 178,301 6.4~ Transportation, communication and public utilities 173,387 6.2~ Finance, insurance. and real estate 149,313 5.4~ Agriculture services, farming 20,241 .7~ Mining. 2.155 .1~ Total $2,778,504 10~~ Miscellaneous Economic Data The following information cor the State of Indiana has been State Library. Per capita personal income in Median family income in 1980 kerning the City of South Bend, St. Joseph County and obtained from Bureau of Census Reports and the Indiana St. Joseph South Bend County Indiana 1987 $ 11,124 $ 11,697 $ 11,078 $ 18,899 $ 20,628 $ 20,536 Average weekly earnings in manufacturing (1st qtr. of 1990) N/A Population per square mile in 1980 3,023 Value added by manufacturing in 1982 $682,100,000 Retail sales in 1987: Total retail sales N/A Sales per capita N/A Sales per establishment N/A $ 552,91 $ 568.43. 526.4 152.8 $ 991,300,000 $25,747,000,000 $1,686,866,000 $33,097.,064,000 $ 6.,938 $ 5,985 $ 1,073,753 $ .1,000,425 -11- O h ~O of N a aD ~0 a 0 a 0 n ~o O~ 0 ~ aD ~e1 n a A r O O m n n A a a m N ~ .-1 N .~ ~o ~O n h - of .r q y h N a f ~ F+~xabref ~J-: - ,bi f7D OD ~O O ~O n v1 M r1 O~ P1 !~ -"[ .~ co n w m ~'+ ~~ ~ C~~° 0 C O O ~ O O p-::~rrS O .+ .'1 ~O O O h O ~O O }eeran~aa~ ~ u 7 d 7 ~O e~ ao of u {, ~ u .d ~ ~0 a O N M ~O N ~O m u U y E ++ N > rn a M ~p Y "'+ Y C ~ N u () y N d N d O W .G u b C N T e W O e 'O r o y ro l+ y S U .w m ~O a ~O ' ~"~ ~ ~ o y ] a U U S .d W .. 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E ro ~ .i N ~T r ~ h v N U O u u 0 y~ ro ro k, ,,,,~ .~ L C d ..+ C O a d U .-i L ro u .a N •J ro N C ro U ~ .d P P1 h m .+ u d m L .a [O .~ J N N N 7 O % Y y 7 E ~ N y y u ~ z 0 o 0 0 0 d C Y o o 0 o 0 o m C ro ..~ O N ~/1 O O~ O O ` O ~ N O P1 W 00 01 O O a 1y y r N c0 n O m .a ] ~ ..~ ] N e~i to t~f n Y~ P .~ N > a •D .~+ ~O N a N C .~ N v1 N „~ ~ ro ro ~! w E N en a o n Q ro 'y N N N .~ y W m d b ] d 'O ] d b ] E O U C U G U C j . i ..+ v1 n ~t1 a n N N -+ N N 00 N a ~+ .-+ ~ .r P b ~ O H N t~1 N ..~ 2 v v .. s o .~ y, a m ao n m ao m a m ~ o u a v N Y u Y Y O~ O~ O. O+ O~ O O (~ ~ ~ N r{ N ~ N z ~ i N ~' r ; ; .: :~ f h r' 4 ~; 1 9 d Historical Net Ass Sout essed Valuations of the City o en (Per St, Joseph County Auditor's Office) Year Personal Pa ab a Real Estate Utilities Property Total .1981 $278,440,b53 $18,358,130 $112,828,582 $409,627,365 1982 279,874,483 18,957,970 114,710,976 413,543,429 1983. 280,282,619 20,455,950 122,148,057 422,88b,626 1984 282,089,259 20,873,970 114,996,397 417,959,626 1985 281,152,034 21,973,060 103,898,740 407,023,834 - 1986 284,.893,744 20,967,360 127,172,176 433,033,280 1987 285,897,178 20,633,920 123,167,379 429,698,477 1988 290,297,209 20,850,010 122,907,516 434,054,735 1989 292,823,.013 20,343,450 121,251,803. 434,418,266 1990 494,756,776 20,268,470 131,705,499 646,730,745* 1991 607,279,000 est.-~ NOTE: The real property assessment in Indiana that was effective March 1, 1979, was based upon-1975 costs of land, material and labor, and applied. to 1979 taxes payable in 1980 through 1988 taxes payable in 1989. The real property reassessment effective March 1, 1989 .and is based upon 1985 costs of land, material and labor, and will apply to 1989 taxes payable in 1990 through 1994 taxes payable in 1995. For taxing purposes assessments .are made at 33 1/3~ of true tax value. Net assessed valuations represent the assessed value less certain deductions, such as deductions for mortgages, veterans, the aged, the blind and tax-exempt property. The net assessed valuations also do not include valuation of the City's Urban Enterprise Zone, abated valuations, and tax incremental assessed valuation. The personal property assessed value of the Urban Enterprise Zone totalled. $24,468,.820 for tax year payable 1990. This. valuation is removed from the tax rolls for a period of ten years which began in 1984. Real and personal property tax- abatements reduce the taxable valuation of~ property by decreasing amounts over a term of up to .ten years. The total abated valuation. in payable year 1990 was $32,848,630. The tax incremental assessed valuation which will eventually .become part of the tax .base totalled $28,447,694. * According to the St. Joseph County Auditor's office, appeals have been filed regarding the property tax values; consequently, :the net assessed value is subject to change. C -13- Detail of Net Assessed Valuation of the City of South Bend (Per St. Joseph County Auditor's Office.) For the tax year 1989 payable 1990. Value of land and lots Value of improvements -Total value of real estate Less: Mortgage, veterans', age 65 and other deductions Tax-exempt property Net value of real estate Utilities Personal Property Less: Deductions Net value of personal property Total net assessed valuation ~v ;,,7 ' ; ~~,..~.~ DEC 1 ~ ~~~`' $107,255,041 596.847.900 704,102,941 (131,457,095) (77.889.070) 494,756,776 20,268,470 $190,922,383 (59,216,884) 131.705,499 5646.730,745 ~- ~ I -14- • J O O ~D P1 O J O~ W O~ O O r•1 ~ J h O T C ' Y J O T O~ J 00 V1 n1 r4 Ht ~O O n ~O P1 W 01 0~ •.1 • U O ~1 - 01 O~ a0 J U1 O CD N O f+1 J N h '~ ~ "~ O -u& r G J .••I N J O O O O O O O .-1 CO 0~ O O /~ O G W O~ ..1 W M O O O O O O O O O O O •- `Q h n V5 n ~ a O rl r•1 ~ N a•1 '~ m N N N N N H Yf u a N L' 3 b . 0 Y M V w . 0 u e~ V1 .•~ of .r aD ~1 O N n n n O~ .r .r ~O a1 s1 W .. .o M ~o .n v ~o ao o e+ N+ .n ~o 0 0. n a n ~ a ..+ b 01 J ~O .-~ n O J er N ~O O J .r N V1 vt ~O ~O .-~ b 3 O O .•~ ~`1 ~O N O O .~ O O O t+1 O dD O !D P1 f0 ~ a E T N 1 O O O O O O O O O O O ~O 'O ~O ~O ~O 'G O '~ N N ' N N Vf Vf Vf a --} a u C a 3 ~ O ~'1 j ~ a+ O C 1 q U m O ' q~ ~ h v CD O. 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O b f0 .-+ r r O v T O~ •D O v > v ~ h h 'b b b b O V ~ L .T O~ O P O O~ b O n O •p N r Ol O N W Y1 r r a S N M h b ./1 c0 r O~ u0 d d L 4 O~ O O N r N a b b N U V1 ~1 N .T J N Y1 .••i N1 d N .•+ b en en r r 41 O) E X o a .. .~ .^. F y y v b O. a0 .~ T O O~ O~ N a y ~ r c0 O T T v1 O O) .•. O~ b d E b . / d d O O~ O fD P1 O r !+1 h O~ [0 ro U V N v e+ T b a1 O~ r V1 O r L a U N J b s v A O O m r m N .+ . a x c0 O~ O O .+ .r .ti A A A N d a .. ', .. .~ .~ .. .~ ~ C [ h b1 N C'f m b P1 O .•i O O~ 00 r N O~ b r ~r m v v .•1 r C N v1 O~ In Y1 b to - b r ~f1 T ,.1 . . . , . . . . . q y .-1 r ~/1 00 W ~•1 v b N b .-1 U / r P'1 .+ v v O r M o1 T T O M CO .~ v r b N v O .~ T N a o W O b r O v1 b r P1 r b O M a1 l'f •v o J v v1 ~A h t~1 V? d C• C y W 0 ~ 0 -+ u W O O .+ N Pf S V1 b r a) O. O n d m ao m m co ao ao ao m ao a v .~ o~ a a a a a a a rn o~ a a. .a .~ .r .~ .a .~ ., .~ ., .+ .~ .. O U X ..~ a C A d u Y ...i m a t ~ C E u v a .~ . ,~ N N L u V W .•~ C .. - o s m y ~ M O G O 7 Y N C -~ O F ..1 u q u ., v u a ,C d A < '-~ C v > e -+ q A E Y a H Y Y O 1i '•1 q u Y O .•1 O ,~ 7 0. d L 7 a L 01 E m A >. a 7 u ~ b A C U O O d d q w u / .. w ..~ O .C n d b / b F 6 A .C O d .•1 M N M '~ N V a r a ++ 7 w o. t N u C C p p, U L C a O q u .+ a h -+ d y C u u u a 7 N d y N O ~ ? / / C v m -' y w G •p u / N a ••~ d U N u d % / v C L O N a U W -•~ / v d / d w / -~ d .+ 7. / ro w ro ~ ro o b d O d C y 4 d ~-+ X 7 a u U N ro d C y C o u 3 -+ A d d L O w ..' S a O d S V L CO ~ •O N ro / rn .r d N .. u u w ~ L X ~ O ',y L ~_ J 71 'L 7 ,y X N •p y L 4 d ro N C = T U N u d ~ O u d N C G W ... ro "'~ y "a p / y U ro N / c -+ r y C ro / ~ T -~ L d 1. '•'f ro •-+ E ~ u w b d d d u ro C o C L u -~ d ro C d ro u a u C -a 7 u 6 ro ro -+ •O d 7 C C d L 'O C N O •'+ '+ u •v C ~+ S E 'o u d d N 7 a -+ U % L W N ... q a / N W O d y N / •.~ o n L A C w ..~ d -+ / a ~. o f d u - u u ro u ro b C ~E / N iv / a L C -'~ ~ ' d O N u N a a d C. N d V) C A 1a O d a. O a 4 ,'n b d L •-I •b O. •~ C L ++ 1a L d L d y u d v > v d L W ~ O. y •'~ .a •v ro o, a o v d x 7 E d J u d v 3 .-+ U 'O. 6. 1+ d U X ^+ •b d u N • C O > -+ / 4 a C N •.1 M M a v a N O / a d o. v - ro -+ C •v o. N .a u ~. S / d d ro u .-~ o -+ ro E u / o F ~ u N v o ~ b v c E ++ o N d u v d -+ d C O. d ..~ •fl L N ro N y ~ N ,•y .~ (J .•1 L N O O N o a u u 6 U v a v y N x X d T O a a U A d .r C N d E E / a t -~ a d 'b u u a o X u •v b d C d ^' a C C a n a - C u 7 a d ++ d ~. O •O O u O N U' -+ C a a b d d U O a d / C E y O~ U n m o C 7 o C u a -+ o C F a w S ~ L A W O. ••~ o E •o u -+ .a N ••~ 'y N O1 a N y V^ s Large Taxpa~ rs t~ ~' .The following is a list of large taxpayers in .the City of South .Bend as shown by the St. Joseph County Auditor's office and the State Board of Tax Commissioners. ~ Net assessed valuations are for taxes payable in 1990. Taxpa~r Allied/Bendix Corporation Indiana Bell Telephone Co. Indiana Michigan Power Co. New Energy Company Marriott AM General Corporation Ameritech , Edward Rose of Indiana Northern Indiana Public Service Co. RACO, Inc. Total Net Assessed Tvne of Business Valuation Airplane and auto parts $21,361,990 Telephone utility 9,876,030 Electric utility 8,228,450_ Ethanol plant 6,893,900 Hotel 6,524,370 Military trucks 5,086,160 Communications 4,769,080 Apartments and real estate 4,363,410 Gas utility 4,07b,600 Electrical switches and boxes 4.063,630 • $75,243,620 The total net assessed valuation of the City of South Bend for the year payable 1990 is $646,730,745. The ten largest taxpayers represent 11.63$ of the total net assessed value. -17- , a 5aeri ~~~~t~ Schedule of Bonded Indebtedness ~ ,,,,,., The following schedule shows the outstanding bonded indebtedness of the City of South Bend and the taxing units overlapping its jurisdiction as of November 28, 1990 as reported by the respective taxing units. Percent Amount Allocable Allocable to City of to City of Property Tax .Supported Debt Total Debt South Bend South. Bend Direct Debt: Redevelopment Authority $20,660,000 (1) 100 $ 20,660,000 Park District 1,050,000 (2) 100 1,050,000 Redevelopment District 5,100,000 (3) 100 5,100,000 City of South Bend Capital Lease Debt 5,737,525 (4) 100 5.737.525 Total Direct Debt 32.547.525 Overlapping Debt: St. Joseph County 6,625,000 (5) 44.6 2,954,750 St. Joseph County Public Library 10,299,500 (6) 64.6 6,653,477 South Berd Community Schools 10,937,128 (7) 66.1~s 7,229,442 Penn-Harris-Madison Schools 60,613,871 (8) 2.4~ 1,454,733 St. Joseph County Airport Authority 1,900,000 (9) 44.b~ • 847,400 Mishawaka Penn Township Public Library 2,500,000 (10) 2.1~ 52.500 Total Overlapping Debt 19.192,302 Total Direct and Overlapping Indebtedness $ 51,739,827 Revenue Supported Debt: City of South Bend $13,344,162 (11) 100 513.344.162 Additional debt which is not an obligation of the City includes: Tax Incremental Financing Bonds S 7,700,000 (12) -I8- q ~ m ' '~ C Notes to .Bonded Indebtedness ... may; _1 ~ . (1) Proposed 1990 Lease Rental Revenue Bonds (Airport • Economic Development Area Public .Improvement Project) $ 2.,355,000 Proposed 1990 Taxable Lease Rental Revenue Bonds (Airport Economic Development Area Public Improvement Project) 4,200,000 1990 Lease Rental Revenue Bonds (South Bend Central Development Area Public Improvement Project) 4,895.,000 1988 Lease Rental Revenue Bonds (Parking Garage Facility) 4,500,000 1988 Taxable Lease Rental Revenue Bonds (Coveleski Stadium) 4,710.000 Total $20,660,000 Note: Although all the Redevelopment Authority Lease Rental Revenue bond issues are supported by a property tax. pledge, the Coveleski Stadium Lease Rental Bonds are the only bonds intended to be, and actually being, paid from a property tax levy. The other Lease Rental Revenue bond issues, including this .proposed Bond issue, are intended to be paid (and those issued actually are being paid) primarily from tax .increment revenues and _ other revenues such as parking garage revenues. , (2) 1982 Park District Bonds S 1,050,000 (3) 1990 Redevelopment District Bonds (Studebaker Corridor Project) $ 4,900,000 1972 Redevelopment District Bonds 200.000 • Total $ 5,100,000 (4) Century .Center Civic Center Lease $ 3,673,.636 Studebaker Museum Land Contract 255,207 Master Equipment Lease 1,129,947 Police, Fire, EMS CAD Computer System 395,945 Leaf Loaders 181,748 Fire Rescue unit and Ambulance 101.042 Total $ 5,737,525 (5) St. Joseph County Capital Improvement Bonds $ 4,800,000 St. Joseph County Park Bonds. 625,000-ti Jail Renovation Bonds of 1979 1.200,000 Total $ 6,-625,000 *Will pay off on 12/30/90 The County Auditor's office stated that $1,825,000 of additional debt will be issued in December, 1990 with a one year payout. (6) South Bend Library Leasing Corporation $ 2,455,000 Less cash and investments (5.500) • $ 2,449,500 G.O. Bonds - Series,. 1988 3,900,000 G.O. Bonds - Series, 1989 3.950.000 Total $10,299,500 -19- (7) G.O.- Bonds of 1988 South Bend Middle School Building Corporation Less cash and investments Common School Fund Loans Judgement Funding Bonds of 1990 School Bus Loans Total $ 5,355,000 (3.252) (8) Bittersweet School Building Corporation $ 2,545,000 Less cash and investments (681.681) PHM School Building Corporation Refunding (private) Elm Road School :Building Corporation Bonds '86 (private) Penn High School Building Corporation Participation Certificates of 1987 Brick Road School Building Corporation Bonds of 1988 (private) Common School Fund Loans Veterans Memorial Loan Total In addition the School Corporation anticipates $1,500,000 of additional Common. School Funds Debt payable in 1992 for 20 years at 5~. (9) St. Joseph County Airport Authority G.O. Bonds - 1977 G.O. Bonds - 1985 Total (10) 1987 General Obligation Refunding Bonds (11) 1989 Sewage Works Revenue Bonds Capital Lease Debt: Sale Leaseback of Off-Street Parking Facility Clay Utilities Solid Waste Equipment Total (12) 1985 Tax Increment Financing Bonds 1986 Tax Increment Financing Bonds 1988 Tax Increment Financing Bonds Total ~ y ;~~: ~.^-~~ a ~~ z~~s 1 9 1990 • Notes to Bonded Indebtedness (Copt d) $ 3,550,000 5,351,748 1,283,002 400.,000 352.378 $10,937,128 $ 1,863,319 8,370,000 4,615,000 37,694,309 5,962,831 1,802,912 305.500 560,613,871 $ 900,000 1,000.000 1.900,000 S 2,500,000 $ 9,500,000 3,040,000 625,000 179.162 $13,344.162 $ 4,150,000 1,750,000 1,800.000 $ 7,700,000 • -20- ~ ~ ~. " ~ .' z ;~ ~.~; .. .. Debt Ratios DEC.. ~. ~ tg~ The following schedule .presents the ratios relative to the property tax supported and property-tax secured indebtedness of the taxing units overlapping the City of South Bend as of November 28, 1990. Allocable Total Direct-Debt Portion Direct and Including of All Other Overlapping Proposed Tax-Supported Supported .Issue Debt Debt X32.547.525 519.192,302 551.739,827 Per capita (1) $306.50 $180.74 $487.24 Percent of .net assessed valuation (2) 5.03 2.97$ 8.00 Percent of assumed market value (3) 1.68 .99~ 2.67 (1) Based upon 1988 census data, the population of the City of South Bend is estimated at 106,190. (2) The net assessed valuation of the City of South Bend for taxes payaole in 1990 is $646,730,745 according to the St. Joseph County Auditor's office. (3) Assumes that the net assessed valuation is 33 1/3~ of fair market value. -21- `~ :~., a Pension Liabilities ~~~ i 9 "t9$0 Employees of the City of South Bend have pensions funded under the Public Employee's Retirement Fund _(PERF) of the State of Indiana. Provided below is a statement of unfunded accrued liability as reported by PERF computed on' the basis of amortized cost. At June 30, 1989, the City had 698~employees covered by PERF. The employer contributions for the twelve months ended December 31, -1989 were $593,652. Unfunded 1990 Accrued Employer Liability Percentage of 6/30/89 Contribution City of South Bend $1,283,316 5.00 ., ~ • • -22- -a i APPENDIX C • '~ 3 _.j . 1 MYRON H. PRASIER. C. P. A. ROGER L. UMBAUGH. C. P. A. ` EDWARD W. GUNTZ. C. P. A. GERALD G. MALONE, C. P. A. CHARLES A. DALTON, C. P. A. DAViD C.' FREDERICK. C.P. A. HERSCHELL J. UMBAUGH. C. P.A. 11915 -19 B 91 H.J. UMBAUGH ~ ASSOCIATES ecsftftcd Jn-u`rftc ~ceounfanfs SUITE 100. 9100 MERIDIAN SQUARE 20 EAST 91sT STREET P. O. BOX 40458 INDIANAPOLIS, INDIANA 46240-045 8 TELEPHONE l3i71 844-7288 TELECOPIER 13171 848-3604 December 18, 1990 South Bend Redevelopment Authority City of South Bend 1200 County-City Building South Bend, Indiana 46601 PLYMOUTH OfPICE X2191 935-5178 Re: $2,355,000 Lease Rental Revenue Bonds !embers of the Redevelopment Authority: In connection with the issuance of $2,355.000 principal amount of Lease Rental '- Revenue Bonds, we have, at your request, compiled this special purpose report including the following schedules: Pa e s 2-3 General Comments 4 Summary of Estimated Project Costs and Funding 5 Schedule of Amortization of $2,355,000 Proposed Lease Rental Bonds 6 Maximum Lease Payment Schedule 7 Analysis of Debt Service and Estimated Tax Increment 8 Bond Year Schedule In the preparation of these schedules, assumptions were made as noted regarding certain future events. As is the case with such assumptions regarding future events and transactions, some or all may not occur as expected and the resulting differences could be material. We have not examined the underlying assumptions nor have we audited the historical data. Consequently, we express no opinion thereon nor do we have a responsibility to prepare subsequent reports.. • SOUTH BEND (INDIANA) REDEVELOPMENT AUTHORITY ~,~ y"~ i ~ ~~-~ Y GENERAL C01~SENTS _._ Dry 1 9 ~~~0 -= ,s ~< The Redevelopment Authority of the City of South Bend, Indiana (the "Authority") is issuing $2,355,000 of-Lease Rental Revenue Bonds (the."Lease Rental Bonds".) Proceeds from the sale of the Lease Rental Bonds, after payment of issuance expenses, will be used for constructing roads., extending utilities, and acquiring land (collectively, the "Projects") in support of the City of South Bend's Airport 2010 project. A lease agreement dated as of August 1, 1990 and restated and amended on December 21, 1990 (the "Lease") has been executed between the Authority and the South Bend Redevelopment Commission (the "Commission".) The Lease provides, among other things, for the Commission to make semi-annual lease payments to the Authority after completion of the Projects in amounts that will enable the Authority to pay the principal, interest and fiscal agency fees on the Bonds. In order to have funds to make the lease payments, the Commission will levy a sufficient debt service property tax rate on all taxable property within its taxing boundaries which are coterminous with the corporate boundaries of the City of South Bend. However, the Commission anticipates the tax increment within the tax allocation area to be sufficient to provide funds to .make the lease payments without a tax levy being imposed. Summary of ~'st~mated Proiect posts and Funding - Page 4 This schedule presents known and estimated project costs. The Lease Rental Bonds will be the source of funding for the proposed Projects. Schedule of Amortization of S2 355 OOO Lease Rental Bonds - Page 5 The amortization of the $2,355,000 Lease Rental Bonds is presented in this schedule. The bonds will mature serially over a period 'of approximately twenty- one years and five months with the final bonds due August 1, 2012. The bonds. are amortized based on the actual interest rates from the winning bid as determined by competitive bidding.. ~Saximum Lease Payment Schedule - Page 6 The Lease provides for a maximum first semi-annual lease rental .amount of $300,000 which shall be due on the day the Projects are. completed or July 28, 1992 whichever is later. If the Projects are completed later than July 29, 1992, the first installment will be pro-rated. However, after the sale of the bonds, each semi-annual lease rental amount is to be reduced to wn amount which will be equal to the principal and interest payments in any bond year, rounded upward to the next $1,000 plus $4,000 for payment of fiscal agency charges, and divided by two, as provided in the Lease. A maximum lease payment schedule is provided on page 6. (Continued on next page) -2- ~i SOUTH BEND (INDIANA) REDEVELOPMENT AUTHORITY GENERAL COMMENTS Analysis of Debt Service and Estimated Tax Increment - Paee 7 (Cont'd) The Redevelopment Commission anticipates that tax increment revenues will be sufficient to meet the debt service payments when due. Capitalized interest in the amount of $416,225 will be available to augment the tax increment revenue in the early years, so that the two sources combined will be sufficient to meet the debt service. Estimated annual tax increment revenues and capitalized interest will provide a bond coverage ratio ranging from 1.00 to 1.12. To the extent that tax increment revenues and capitalized interest are available to make debt payments, no debt service tax levy will be required. It should be noted, however, if none of the projected tax increment revenue were received, a debt service tax levy would be required resulting in a maximum debt service tax rate of $.07 per $100 of net assessed value assuming a net assessed value of $u06,i63,605 for the .South Bend Redevelopment District. Bond Year Schedule - Paee °8 The calculation of the bond years for the Lease Rental Bonds. is presented in this schedule. It is assumed that the Bonds will be dated March 1, 1991. -3- a SOUTH BEND (INDIANA) REDEVELOPMENT AUTHORITY SUMMARY. OF ESTIMATED PROJECT COSTS AND FUNDING _' N~ Project Costs: Land, construction, related costs and contingencies Bond issuance costs Underwriters discount Capitalized interest Less interest earnings Total estimated project costs Project Funding: Proposed Lease Rental Revenue .Bonds $1,830,000 105,000 47,100 416,225 (43.325) 52.355,000 $2,355,000 (Subject to the comments in the accompanying report dated December 18, 1990 of H. J. Umbaugh & Associates.) -4- SOUTH BEND (INDIANA) REDEVELOPMENT AUTHORITY SCHEDULE OF AMORTISATION OF 52.355.000 PRINCIPAL AMOUNT OF PROPOSED LEASE RENTAL REVENUE BONDS Principal payable annually on August 1st. Interest payable semi-annually, February 1 and August 1 Based on actual coupon interest rates. Assumed dating of bonds, March 1, 1991. Bond Year Debt Service Ending Principal Interest Au }ust 1st Balance Principal Rate Interest Total (---In Tho usands---) (-------In Dollars-------) 1991 $2,355 $ 0 7.50 $ 73,594 (1) $ 73,594 1992 2,355 0 7.50$ 176,625 176,625 1993 2,355 0 7.50 176,625 176,625 1994 2,355 0 7.50 176,625 176,625 1995 2,355 ~ 0 7.50 176,625 176,625 1996 2.355 0 7.50 176,625 176,625 1997 2,355 50 7.50 176,625 226,625 1998 2,3-05 70 7.50 172,875 242,875 1999 2,235 90 7.SO~s .167,625 257,625 2000 2,145 100 7.50 160,875 260,875 2001 2,045 110 7.50 153,.375 263,375 2002 1,935 120 7.50$ 145,125 265,125 2003 1,815 130 7.50 136,125 266,125 2004 1,685 135 7.50$ 126,375 261,375 2005 1,550 150 7.50 116,250 266,250 2006 1,400 160 7.50 105,000 265,000 2007 1,240 170 7.50~s 93,000 263,000 2008 1,070 185 7.50 80,250 265,250 2009 885 200 7.50 66,375 266,375 2010 685 210 7.50 51.,375 261,375 2011 475 230 7.50 35,625 265,625 2012 245 245 7.50 18.375 263.375 Totals 2.355 $2,761,969 $5,116,969 (1) Includes five month's interest. (Subject to the comments in the accompanying report dated December 18, 1990 of H. J. Umbaugh & Associates.) -5- ;;.,~ ~.. 3 SOUTH BEND (INDIANA) REDEVELOPMENT AUTHORITY MAXIMUM LEASE PAYMENT SCHEDULE (Assumes 7 1/2~_interest rate) (Subject to the comments in the accompanying report dated December 18, 1990 of H. J. Umbaugh & Associates.) -6- ~. i _I it .1 H W ~+ S F W O ~ xaz O G .~ F Q _ ~ ::7 W W ¢F¢ a S W H :a] Nn E in s] !a] W I ~ D OS O 2 _ W 6 rA 6 O W W U °a > °z °i w H O N .. o O F D m W I/1 O .^'i :'1 N O H Vf o v, O ~ N N r Z 0 0 0 0 0 0 O~. a h N O~ b h m .T O b N M .1 N1 b Y .y b N h .T t+1 m m •+ O b O. O~ O~ .T v > n1 h W 0 b m O O N Y'1 O~ O O O m CO .~ u N Y . . . . . . . . . . . . . . . . . b J1 N .~ O~ h V1 h a N N .~1 m O h n d 7 U N h f0 .~ en b O~ N V1 m .~. .i b O N V1 .r .r C .r .~ .-~ .y N N N t+1 to to v v :t o a d w .. a ~ U N 00 O O O O O b r~ ~1 m O\ b N N N h V7 b '+ N .t ~1 O O O O O .-1 N O O O O O N O O .+ O O N O rl O O O O O N rl N N .-1 N e-1 N N rH N H N rl N N Y m 1 N N A N rl H N~ .M r/ eM N rl N N N eM H N ed N d 4.O v -+ > N O d U C 0 0 0 0 0 0 O. II1 t+1 V1 h h eti .~ b b b b rl .d N ri b eel J b J h m I/1 O N h h N O O I/1 O 1' N P'1 .t O N h .ti N O .y t•1 d1 .y O O h 0 CO ..' C d .-I b Q~ h m m m h N h m O m h N h O h 7 O. 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(. ~+ ,z -~ O I/1 ~/1 O O PI N V1 V1 v1 V1 Y1 ./1 V1 O O O O v1 ~/1 N h r1 ~ C N h O N .y N h N n h N N h u1 O O !/1 h h N h .~ - ~+ 'O N -m a N b b m b m t~1 .-~ '+ t+1 N O O N n1 P1 b P1 b L N d . . a 7 ~+ h•' Vl h m b b N h O t•1 U1 b ~-1 b I/1 f~1 Vl b .-1 h M J1 C~ b m .~i .~ h N J~ b b b b b. b b b b b b b b ~e'1 ~ N 7 .-I .y '+ N N N N N N N N N N N N N N iV N h ro aJ > O' • :~ _ v u v J o r X .. .r ill O ~ v i.+ voo~n~nc~+oo 0000 0000000000 n aoa .n h N N O~ O ~/1 N h N I/1 ~O O '.O W .-1 L . y O ro Y C1 O~ O 0\ m ti ^+ h~ 'O al v h O O~ v1 N ~O ~O v O ..~ N C .~ <n n c0 > u C. 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"1 C '~ I • ~ h ~ W t N O O d D\ U ~ d ~ u u O u ~ a+ U U d v o .~ L b v t/1 al v ro 'O SOUTH BEND (INDIANA) REDEVELOPMENT AUTHORITY $2,355,000 LEASE RENTAL BONDS BOND YEAR SCHEDULE Bond Year Endin Bond Years From Bond Cumulative August ~st ---------- Retirement ---------- 3/1/91 ---------- Years ---------- Bond Years ----------- 1997 $50,-000 6.4167 320.8333 320.8333 1998 70,000 7.4167 519.1667 840.0000 1999 90,000 8.4167 757.5000 1,597.5000 2000 100,000 9.4167 941.6667 2,539.1667 2001 110,000 10.4167 1,145.8333 3,685.0000 2002 120,000 11.4167 1,370.0000 5,055.0000. 2003 130,000 12.4167 1,614.1667 6,669.1667 2004 135,000 13.4167 1,811.2500 3,480.4167 2005 150,000 14.4167 2,162.5000 10,642.9167 2006 160,000 15.4167 2,466.6667 13,109.5833 2007 170,000 16.4167 2,790.8333 15,900.4167 2008 185,000 17.4167 3,222.0833 19,122.5000 2009 200,000 18.4167 3.583.3333 22,805.8333 2010 210,000 19.4167 4,077.5000 26,883.3333 2011 230,000 20.4167 4,695.8333 31,579.1667 2012 245,000 21.4167 5,247.0833 36,826.2500 Totals: $2,355,000 36,826.2500 Total bond years 36,826.2500 Times. interest at 7.5$ (Assumed rate) $75.00 Total Interest $2,761,964 Interest 1/20 of Interest 1/10 of 1~ 1~ 18,413.13 36,826.25 Interest 1/8 of Interest 1/4 of l~ 1~ 4b,032.81 92,065.63 interest 1/2 of l~ 1~ 184,131.25 368 262.50 Interest , Average Maturity 15.6375 (Subject to the comments in the .accompanying report dated December 18, 1990 of H. J. Umbaugh & Associates.) -8- ',~ . APPENDIX D (Amended Lease to be provided by Baker & Daniels) ",~ } - __ APPENDIX E (New Trust Agreement to be provided by Baker & Daniels) 1 r APPENDIX F (Proposed corm of Legal Opinion to be provided by Baker & Daniels) `„ i w ~ ~ a ~~ ~ ~ ~ TAX MATTERS ~~~ ~ ~ ~~ In the opinion of Baker & Daniels, Indianapolis, Indiana, Bond Counsel, under law existing and. in effect on the date of such opinion, .and assuming continuing compliance by the Authority with its Tax Covenants (as hereinafter defined), the interest on the Bonds is excludable from gross income for :purposes of Federal income taxation pursuant to Section 103 of the Code as in effect on the date of delivery of the Bonds. In the opinion of Bond Counsel, interest on the Bonds is exempt from taxation in the State of Indiana for all purposes except the Indiana financial institutions tax and the Indiana inheritance tax. As amended by the Tax Reform Act of 1986, the Code prescribes a number of qualifications and conditions, including continuing issuer. compliance, for the interest on state and local .government obligations to be and remain excludable from gross income for federal income tax purposes. Under the Trust Agreement, the Authority has made certain covenants (the "Tax Covenants") not to take any action or to fail to take any action with respect to the proceeds of the Bonds or any investment earnings thereon which would. result in constituting the Bonds as "arbitrage bonds" under the Code or-would otherwise cause the interest on the Bonds to cease to be excludable from gross income for purposes of Federal, income taxation. The Authority shall comply with the arbitrage rebate requirements under Section 148 of the Code to the extent applicable.. Noncompliance with the foregoing Tax Covenants may cause the interest on the Bonds to be includable in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds. Further, even assuming compliance by the Authority with its Tax Covenants, certain provisions of the Code may. affect certain owners of the Bonds. The Code imposes alternative minimum taxation on corporations (as defined .for Federal income tax purposes) and individuals. The Borids are not "private' activity bonds" for the purpose of treatment of interest thereon as a direct preference item in calculating the alternative minimum tax. However, for corporations (as defined for federal income tax purposes) the alternative minimum tax is determined under the Code at 20~ of each corporation's alternative minimum .taxable income. Such alternative minimum taxable. income includes 50$ of the amount by which "adjusted net book income" exceeds the corporation's "alternative minimum taxable .income." After. 1.989, such alternative minimum taxable income will include 75~ of the amount by which "adjusted current earnings" exceed. "alternative minimum taxable income." Interest on a Bond would be includable in the "adjusted net book income" and "adjusted current earnings" of a corporation. for purposes of such alternative minimum tax. In addition, the Code imposes an environmental tax on corporations for .the years beginning after 1986 and. before- 1992 equal to 0.12 of the excess of "modified alternative minimum taxable income" over a specified amount, generally $2 million.. Interest on a Bond would be taken into account in computing such environmental tax. Further, the Gode imposes a branch profits tax on U.S. branches of foreign corporations equal to 30~ of the adjusted earnings and profits. of such corporations attributable to income that is effectively connected, or treated as such, with the conduct of .trade or business in the United States. Interest on the Bonds would be includable in such earnings and profits. Under the Code, ownership of tax-exempt obligations may also result in collateral .federal income tax consequences to certain taxpayers including, without limitation, S corporations, .financial institutions, property and .casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax-exempt obligations. No provision has been made for redemption of the Bonds, or for an increase in the interest rate on the Bonds, in the event that interest on the Bonds becomes subject to income taxation. The foregoing does not purport to be a comprehensive discussion of the tax consequences of owning the Bonds. Prospective owners of the Bonds should consult their own tax advisors :with respect to the foregoing and other tax consequences of owning the Bonds. ~