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CITY OF SOUTH BEND I OFFICE OF THE CLERK <br /> Mrs. Hockenhull replied, no not on this report, but I can provide the details of that this week. <br /> Councilmember Scott asked, In Kronos, do you have the growing rate report? <br /> Mr. Frierson replied,It's about two-four percent(2-4%)of the majority of your debt. The City has <br /> been very good at entering the market from a debt standpoint,it's at an all-time low.Nathan Flynn <br /> who joined Crowe a little over a year ago, a former under writer, can give details from a market <br /> interest standpoint. <br /> Nathan Flynn, Crowe Representative followed up, The average cost of your debt reflects the fact <br /> that you have a lower credit rate and we have been at a historic low in terms of interest rates.That's <br /> reflected in your borrowing rates currently. <br /> Councilmember Jake Teskha asked, That's changing, correct? <br /> Mr. Flynn replied, Your current debt rate will not change. We have not seen a sufficient increase <br /> in rates at this point. <br /> Mrs.Hockenhull stated, On page eleven(11),this is just giving you our principal balances and it's <br /> page nine (9) and ten(10)together with just the principal balances through 2025. You can see the <br /> balance being paid down. And I should point out that for reporting purposes, the Zoo Bond is <br /> included in this presentation, should it pass in all these reports. <br /> Councilmember Teskha stated,During first(1st)reading last night it was three point seven percent <br /> (3.7%) and today it is four point two percent(4.2%)? <br /> Ms. Hockenhull stated, Yes, the three point seven percent (3.7%) will be the bond interest. It's <br /> going to include any debt reserve funds that may be required. We are required to put the last year <br /> principal interest in a standalone account. In our last conversation, we discussed the debt reserve <br /> bond per ordinance. <br /> Mr. Frierson stated, I would like to add a couple of things as it relates to the Zoo Bond. Those are <br /> estimates. But much of that make up is what we have called a Debt Service Reserve Fund. When <br /> you do pre-revenue deals, it's usually one (1) year's principal interest set aside. Once again, it's <br /> all estimated. Regarding the Debt Service Reserve Fund, the City, due to its strong credit rating <br /> and great management, gets something called a surely policy which is in lieu of the Debt Service <br /> Reserve Fund. We're anticipating trying to obtain that, when we go out to the market place. <br /> Mr. Dougherty stated, I'll add on that, What we promised through the Park Board is to deliver <br /> three point seven percent(3.7%)and here's what you're going to use this to build with. The 4.205 <br /> you see is the approval ordinance and it is the highest amount that we would need to get Council's <br /> approval to ensure that we are going to be able to deliver three point seven percent (3.7%). After <br /> that of course, each step along the way is to make it as affordable as possible. This summary is the <br /> result of the best debt service we can get,from what the underwriter has somewhat told us how we <br /> would expect to price the bonds. It's double from the perspective of everyone on the bonds team. <br /> Councilmember Teshka stated, I think it's important for the public to understand the language so <br /> EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT <br /> 455 County-City Building 1227 W Jefferson Bvld'South Bend,Indiana 466011 p 574.235.92211f 574.235.91731TTD574.235.55671www.southbendin.gov <br /> 11 <br />