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P age | 2 <br />3.NEW BUSINESS <br />A.Resolution No. 213 (Approving Lease and Determing to Issue Bonds COSB 2023 <br />Projects Financing) <br />Caleb Bauer Presented Resolution No. 213 (Approving Lease and Determining to <br />Issue Bonds COSB 2024 Projects Financing). Mr. Bauer introduced himself and <br />Randy Rampola from Barnes and Thornburg, which is bond council for the city. <br />Randy Rampola introduced Resolution 213 which is an initial resolution that <br />provides for lease financing for two series of bonds. The first series of bonds <br />would be for improvements in the River West and River East TIF districts. The <br />second series of bonds would be for a project at Beacon Memorial. The bonds <br />would be a maximum principal amount of $64M (that is not to exceed amount). <br />We expect slightly less than that amount. This resolution also approves a form <br />of lease between yourselves as lessor and the Redevelopment Commission as <br />lessee. A portion of Portage Avenue would serve as the lease premises and the <br />lease will allow you as the Redevelopment Authority to issue bonds. Those <br />bonds would be payable from lease payments at the Redevelopment <br />Commission which is set up for a maximum lease term of 20 years and maximum <br />lease rental of $10M annually. We anticipate the lease term to be slightly less <br />and are hopeful the maximum resort will be significantly less than that. These <br />are parameters. <br />The chief revenue is projected to be more than sufficient to cover the debt <br />service on the bonds. In fact, the coverage, meaning the excess money that <br />would be left every year after all the debt services paid is in excess of 200%. <br />There is certainly enough TIF to cover, but Baker Tilly, the municipal advisor’s <br />recommendation as well that and the city desires to do this is to utilize the tax <br />levy as a backup. What the backup allows is the bonds to be issued at the lowest <br />possible interest rate in the market because that tax levy allows the backup, the <br />prospect of that allows these bonds to be sold at a better rating which will <br />provide for a lower interest rate. <br />There are two series of bonds. The first series would be tax exempt or is <br />anticipated to be tax exempt, meaning they would be even a lower interest rate. <br />The second series would be applicable for the Beacon project. Currently we're <br />contemplating them being taxable issued on a taxable basis, in part because of <br />how the proceeds may be used, those might be at a slightly higher interest rate. <br />Many of the projects are scheduled to begin in the spring. The second series of <br />bonds are the Beacon project would be issued at a later date; there is some <br />flexibility with respect to the maximum lease rental, because there's a built-in <br />assumption as far as an interest rate that we would anticipate the rates would <br />be lower.