MINUTES OF

THE INDIANAPOLIS LOCAL PUBLIC IMPROVEMENT BOND BANK

 

Minutes of the Special Meeting of the Board of Directors

 

June 23, 2008

 

 

 

MEMBERS PRESENT:           Briane House  

                                                Sahara Williams 

            Fred Miller

            Justin Christian

            Jim Carr

                                                 

                                               

BOND BANK PRESENT:    

 

 

                                    Kevin Taylor

                                    Kyle Willis                                                        Jacqui Coe

Deron Kintner

Dario Requiz

Monica Durrett

 

OTHERS PRESENT:

 

Kostas Poulakidas, Krieg Devault

Curt Fritsch, CRF Financial Group

Terry Leffew, Raymond James

Diana Hamilton, Sycamore Advisors

Sharon Karst, BNY

Sue Beesley, Bingham McHale

Lucy Emison, Ice Miller

Angie Steeno, Crowe Chizek

Tom Guevara, Crowe Chizek

 

 

 

Hans Steck, Bingham McHale

Jim Merten, City Securities

Paul Jones, Ice Miller

Molly Williams, IDI

Denise Barkdull, Ice Miller

Sandra Mowell,

Steve Meno, Fifth Third

Jay Ryals, Fifth Third

Eric Green, Backstrom, McCarley, Berry

 

 

 

 

            A Special Meeting of the Indianapolis Local Public Improvement Bond Bank (“Bond Bank”) convened at 12:00 noon, Monday, June 23, 2008 in the City-County Building, 200 East Washington Street, Suite 224, Indianapolis, Indiana, pursuant to notice given in accordance with IC 5-14-1.5.  Mr. House called the meeting to order after determining that a quorum was present.

           

            The first item on the agenda was the approval of the minutes. Mr. House asked the Board for approval of the May 19, 2008 meeting minutes. A correction was noted on page 3, paragraph 1. Mr. Miller made the motion to approve, seconded by Ms.Williams. All voted in favor and the minutes were approved as amended. 

           

            Mr. Taylor and Mr. Kintner updated the Board on matters of the Bond Bank. The first matter was the issuance of the 2007 Rollover Tax Warrants. The warrants were priced the week prior by City Securities at a favorable true interest cost of 1.82%. The total issuance amount was $71.6 million, with a September maturity. In working with the Controller’s office, it was determined that the liquidity for the Qualified Entities should be sufficient to defer borrowing for the 2nd half of 2008 until later in the year.  

 

            Mr. Taylor then updated the Board on the Waterworks bonds. The Board approved the issuance of up to $60 million to redeem the auction rate series, subject to the receipt of the Waterworks Department’s 2007 audited financials, which has yet to occur.

 

            Mr. Kintner updated the Board on the Fuel Hedge Agreement with Keybank. Mr. Kintner noted that the hedge is a financial transaction, not the purchasing of fuel. The agreement is effective beginning June 1, 2008 through December 31, 2008. He then stated that 60% of the hedge is in a collar that is capped at $3.35, with a floor of $3.12. The additional 40% is fixed at $3.22. The current hedge authorization from the  City-County Council expires at the end of 2008. The staff, the Controller and DPW are planning for future years’ hedge options. Mr. Taylor added that a hedge was in place in 2007 and was allowed to expire in December. He explained that the fuel hedge serves DPW’s Fleet Services Division. Mr. House asked a question regarding consumption. Mr. Kintner stated that the hedge is based on market prices rather than the amount of fuel consumed.

 

            A brief overview was given regarding the Charter School Tax Warrant Program. Mr Kintner stated that the Bond Bank has been working with Regions Bank for the program. There are six or seven schools that are needing to borrow and the Bond Bank is looking at a $1.5 million program. The financing should close in the next week or so.

 

            The other item of discussion was the Indianapolis Airport Authority bond issuance. The pricing is scheduled to occur on Wednesday, June 25, with the closing on June 26, 2008. The financing is expected to be $350 million, although $450 million was approved.

 

            Mr. Taylor gave a brief update on the Bond Bank’s work with the Department of Public Works and the Clean Stream Team. The effort is in regard to the sanitary district and the wastewater treatment facility. This will address the capital needs of the consent decree and upgrades of both systems. The Bond Bank is looking at open market debt issuance, State Revolving Fund debt issuance and a commercial paper program toward the end of the year and into 2009. He mentioned that there are some existing SRF funds that need spent down.

 

            Mr. Taylor then provided a printout of the ratings volatility of the bond insurers and the current status of the respective ratings. He stated that the Bond Bank is considering each series individually. In some cases there are surety agreements with the insurers in place of funded debt service reserves.

 

            Mr. Taylor then went over some Bond Bank housekeeping items regarding staff mid-year reviews. He is considering hiring an additional staff member with an accounting background. There was a question regarding the possibility of advertising the position. Mr. Taylor stated that it could be done if necessary.

 

            Mr. House asked for a motion to adjourn. Ms. Williams made the motion to adjourn, seconded by Mr. Carr. All voted in favor and the motion passed.

                    

 

            Mr. House adjourned the meeting at 12:35 p.m.