MINUTES OF

A Special Meeting of the Indianapolis Local Public Improvement Bond Bank (“Bond Bank”) convened at 12:00 noon, Monday, September 15, 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 August 27, 2008 minutes. Mr. Miller made the motion to approve, seconded by Ms. Williams. All voted in favor and the motion passed.

Next, Mr. Taylor briefly discussed the changes made to the Indianapolis Bond Bank’s 2007 audit report since last month’s meeting. Stating that the main changes were to the supporting notes. Mr. Scott Schuster gave an overview of the 2007 audit. Mr. Schuster stated that the Bond Bank issued $1.1 billion in bonds and notes for 2007. There were $465 million in bonds, $150 million of which were refunding bonds. There were $600 million in notes, primarily due to the property tax situation at the time that necessitated larger than normal tax warrant issues. There was a net decrease in assets of $1.3 million due to several extraordinary transfers to City-related projects. He stated that the audit then was ready for approval. Mr. House expressed his appreciation of the well prepared document.

Mr. Taylor stated that the internal control letter had no edits. He added that the internal control letter and the management letter would be the roadmaps to guide the Bond Bank with regard to internal controls and accounting work. Mr. Taylor then explained the delay in approving the audit and noted that the delay was a result of the accounting work that needed to be completed before the actual audit. Mr. Miller asked a question regarding the $1.3 million net loss and wondered if there was need for concern. Mr. Schuster stated that the loss was due to unusual circumstances, but certainly it could not be done on an ongoing basis. Mr. House added that the matters in the 2007 audit causing concern were out of the current Board’s control.

Mr. House thanked Mr. Schuster and his team again for the comprehensive audit and their hard work. He then asked for a motion to approve the 2007 audit. Ms. Williams made the motion to approve, seconded by Mr. Miller. All voted in favor and the motion passed. Mr. House stated for the record that the Bond Bank would work towards finishing the audit on a more accelerated basis.

Next, Mr. Kintner presented Resolution No. 9 – Series 2008 C-E Tax Warrants. Mr. Kintner stated that the resolution represents the Bond Bank’s second-half 2008 tax warrant program. He reminded the Board that a similar resolution was presented to them and approved in May. However, in June as the issue date approached, the City decided that it had sufficient liquidity to delay issuing the warrants until the fall. The new issuance now looks like it will occur in October. This will result in lower interest costs to the City. He explained that the only difference from what the Board adopted in May would be the maturity date, which is now on or before December 31, 2009. Mr. House made mention that there was a savings by holding off on the issuance until the funds are needed.

Mr. House asked for a motion to approve Resolution No. 9. Mr. Christian made the motion to approve, seconded by Ms. Williams. All voted in favor and the motion passed.

Next, Mr. Taylor gave an update on the Bond Bank’s year-to-date 2008 budget. He stated that the Bond Bank is in-line with revenues and expenses, with the exception of professional services, where some expenditures remain to be paid, including invoices for Katz, Sapper & Miller and a few other service entities. He will have a better sense of the numbers at the October meeting and will introduce some preliminary numbers for the 2009 budget. Ms. Williams asked whether since the Bond Bank had not filled some staff positions that were budgeted, could those funds be used to offset the over budget items. Mr. Taylor stated that the Bond Bank is well within the budgeted wages and benefits overall due to two unfilled budgeted positions and would be well within its overall expenses to offset some of the professional services. The Bond Bank’s budgeted expenses are $2.687 million, and as of August, the expenses totaled $1.692 million, leaving a positive variance of $996,000. Mr. House added that the additional expense of professional services had been anticipated earlier in the year. Mr. Taylor then stated that some of the expenses include financial advisory work and consulting for projects, which the Bond Bank should be reimbursed. Ms. Williams asked if the new debt management software that was discussed in the previous meeting had been added to the budget. Mr. Taylor stated that the software system may not have a cost associated with it because the Indianapolis Bond Bank is working with the Indiana Bond Bank, who has offered its system as a starting point.

Next was the discussion of Union Station, Ms. Mary Hauser, Browning Investments, Property Manager, gave a brief update. Ms. Hauser first discussed the facility’s revenue side. She stated that they are hopeful to extend a letter of intent to a company that is considering a 5-10 year lease occupying approximately 10,000 sq. ft. on the southeast corner. There is also a national healthcare facility that is looking at available Union Station space. Other interests have ranged from culinary schools to technology schools. R.W. Armstrong has also expressed interest in expanding in the building. Mr. Taylor mentioned that there is currently a 92% occupancy.

Ms. Hauser then discussed the cooling tower cost recovery. She stated that in May 2007 they commissioned two new cooling towers that have a 20-year lease. The cost recovery is going better than expected, with the budgeted amount being $79,131 in the first year and the actual savings totaled $121,503. There is a chance now to make residual changes internally to the building. Browning is in the preliminary stages of reviewing exterior conceptual plans for upgrades such as lighting, masonry and bridge work. She then stated that she hopes to have Browning’s annual business plan to Mr. Taylor on or before December 1, 2008.

Mr. House asked what Ms. Hauser would consider a sustainable occupancy level. Ms. Hauser stated that the current downtown market is approximately 78%. Union Station is considered a class C+ space and one of the goals is to bring it up to class B, which will increase the rent and bring longer-term leases. Mr. Taylor expressed his gratitude for Ms. Hauser’s hard work. He also mentioned that he would be working with the Department of Metropolitan Development to focus on a strategic plan for Union Station, as they are looking to improve the facility in the next four to five years. The working group is composed of representatives from the Bond Bank staff, Metropolitan Development Planning Division, the Historical Preservation Group and Department of Public Works. He then asked if anyone from the Board would like to be involved in the working group.

Mr. House asked, if there is a way to project a savings in the Union Station budget category, given the potential higher occupancy. Mr. Taylor stated that it would be hard to determine at that time, but he would look into it.

Next, Mr. Taylor He stated that Mr. Charlie Brandt and Cory Senger of Katz, Sapper & Miller are working on the accounting needs of the Bond Bank. The Bond Bank is currently putting in place an internal accounting and trust management system. In addition, Mr. Taylor will begin interviewing individuals this week for the trust accounting position. The Bond Bank’s objective is to have a clean management accounting report for 2008.

Mr. Taylor then informed the Board about the current market conditions. He stated that due to the unfavorable market the past week, he wanted the Board to be aware that it has not impacted the City’s credit, nor should it negatively influence the note issuance that was just approved. He expressed that the underwriter on the notes, City Securities, has always done an extremely good job.

Next, Mr. Kintner informed the Board that one of the financings that the Bond Bank had anticipated, the Project School, was not going to be handled by the Bond Bank. The Bond Bank is looking at alternative means to help the school acquire a loan.

Lastly, Mr. Taylor extended an invitation to the upcoming City Market fundraising ball.

Mr. House asked for a motion to adjourn. Ms. Williams made the motion to adjourn, seconded by Mr. Miller. All voted in favor and the motion passed and the adjourned the meeting at 12:35.