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MINUTES OF

THE INDIANAPOLIS LOCAL PUBLIC IMPROVEMENT BOND BANK

 

Minutes of the Special Meeting of the Board of Directors

 

May 4, 2009

 

 

MEMBERS PRESENT:           Briane House                                       

            Fred Miller

                                                Jim Carr

                                               Sahara Williams

                                               Justin Christian

 

                                                BOND BANK PRESENT:

                                    Kevin Taylor

                                    Deron Kintner

                                    Brad Busse

                                    Jacqui Coe

                                     

Laurie Canatsey

Kyle Willis

Monica Durrett

Dario Requiz

 

                                                OTHERS PRESENT:

                                               

          Sharon Karst, Bank NY Mellon              John Kirkwood, Kreig DeVault                                                             Kim Wilson, UMB Bank                                  Sandra Mowell, Citizen

          Molly Williams, IDI                                            Julie Bolling, Kreig DeVault

          Hans Steck, Bingham McHale                            Bob Kocher, Bank of NY Mellon

          Angie Steeno, Crowe Chizek                              Brian Shaw, Hilliard Lyons

          Dawn Tabler, KeyBank                          Steve Meno, Fifth-Third Bank

          Paul Jones, Ice Miller                                          Curt Fritsch, CRF Group                     

          Eric Green, Backstrom, McCarley& Berry          Terry Leffew, Raymond James

          Jim Merten, City Securities                                 Dennis Otten, Bose McKinney

          Diana Hamilton, Sycamore Advisors                   Tom Guevara, Crowe Harworth

          

       


 

 

            A Special Meeting of the Indianapolis Local Public Improvement Bond Bank (“Bond Bank”) convened at 12:00 noon, Monday, May 4, 2009 in the City-County Building, 200 East Washington Street, Suite 107, 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.

           

            For the first order of business, Mr. House asked for a motion to approve the minutes of March 16, 2009. Mr. Miller made the motion to approve, seconded by Mr. Carr. All voted in favor motion passed.

           

             Mr. House then asked Mr. Kintner to give a brief summary on Resolution No.6- Tax Warrant Rollover & 2009 2nd half. Mr. Kintner stated that the resolution covers the anticipated 2009 2nd half borrowing, but also the rollover of the tax warrants that were issued in November, 2008. The warrants were issued with a maturity date of May 31, 2009. Due to the delay of receipt of the 2008 property tax payments, the Bond Bank will rollover those notes to August 31, 2009, which is when the 2008 property tax settlement is scheduled to occur. The 2009 warrants will mature on March 31, 2010. There is an optional redemption on December 31, 2009. Mr. Kintner stated that the borrowing amount for the 2009 warrants were incrementally higher than what was sent to the Board on the Friday prior and there has been an increase of $600,000, to make the total $164,500,000 to provide for various other issuance costs and borrowing amounts.

 

            Mr. Kintner stated that the rollover amount, which is currently $132 million, is most likely overstated by approximately $67 million, since the City does not expect to rollover because they have enough funds available to make the scheduled payment. He then stated that the Bond Bank felt that it would be wise to at least authorize the $132 million since circumstances could change. Mr. Miller asked if the County Treasurer and City Controller expect that the bills will be collected in time to allow for payment of these warrants. Mr. Kintner stated that the August 31, 2009 maturity date is safe since the final 2008 payments from taxpayers will be due by the end of July early August 2009. The 2009 property tax settlement is less certain.   

           

            Mr. House asked for a motion to approve Resolution No.6. Ms. Williams made the motion, seconded by Mr. Christian. All voted in favor and the motion passed.

 

            Mr. Taylor updated the Board on the status of the Waterworks Revenue Bonds. He stated that the Bond Bank is working closely with the new Waterworks Director and Morgan Stanley. He explained that one of the components was the rate increase request which has been submitted and under review by the IURC. He stated that he will give oral testimony on May 19, 2009.    

           

            Mr. Taylor then informed the Board that the Bond Bank is also moving forward with the audit process.

 

            Ms. Williams asked Mr. Taylor about the Bond Bank’s role in the Waterworks testimony. Mr. Taylor stated that the Bond Bank’s role is with the situation surrounding the requested rate increase, the structure of the outstanding debt, interest cost and the swap cost. He also stated that his testimony will explain why the rate increase is necessary and essential. He then stated that he will explain the planned financing from the operating and the debt side and how it will work. Mr. House added that regulatory proceedings look to make sure that there is a reasonable rate of return on the assets with the utilities that are used and useful, or that there is a reasonable rate-of-return on the equity. Essentially, the IURC would like to know if the need of the increase is necessary, fair and enterprising.

 

            Mr. House then stated that in spending time with Mr. Taylor and Mr. Kintner,     they have expended extraordinary efforts and time working on the situation. He then thanked them.

 

            Mr. Kintner asked the members of the Board if moving the next meeting to June 1 would fit into their schedules. The Bond Bank will need the Boards approval for the final phase of the Waterworks Refundings, which includes the swap termination. The Waterworks Refunding will need to occur before June 30th.     

           

            There being no further questions, Mr. House for a motion to adjourn. Ms. Williams made the motion to adjourn, seconded by Mr. Miller. All voted in favor and the motion passed. The meeting was adjourned at 12:10p.m.