HomeMy WebLinkAboutFinance statement regarding ban •
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Members of the City of Carmel Honorable James C. Brainard, Mayor
Redevelopment Commission Ms. Diana Cordray, Clerk-Treasurer
City of Carmel City of Carmel
City Hall City Hall
One Civic Square One Civic Square
CCarmel, IN 46032 Carmel, IN 46032
Re: City of Carmel, Indiana, Redevelopment District
$2,995,000 Golf Course Revenue Bond Anticipation Notes, Series 2006
•
® Dear Ladies and Gentlemen:
The purpose of this letter is to provide financial information that will be useful to members of the
City of Carmel Redevelopment Commission (the "Commission"), City officials, administrative
personnel, the bond purchaser, attorneys and others following the sale of the Golf Course Revenue
Bond Anticipation Notes, Series 2006 (the"Notes"). The Notes are being issued to finance the cost
P of acquiring the Brookshire Golf Club, to make certain improvements thereto, and to fund other
projects set forth in the Amendment to Resolution No. 19-2006 (the "Project").
Sale Results
Y The Notes were purchased by Oppenheimer & Co. Inc. (the "Initial Purchaser") on December 21,
2006. The Initial Purchaser has agreed to purchase the Notes at an interest rate of 5.25%per annum
to maturity on February 1, 2009. The Initial Purchaser may trade the Notes in $100,000 minimum
denominations to accredited investors as defined in the Securities and Exchange Act of 1933, as
amended.
Bond Delivery
Upon delivery of the Notes, which is scheduled to be December 22, 2006, the Commission will
receive the principal amount of$2,995,000 less the underwriter discount of$44,925. The Notes are
dated as of the date of delivery; therefore, the Initial Purchaser will owe no accrued interest.
Members of the Carmel Redevelopment Commission
Honorable James C. Brainard, Mayor
Ms. Diana Cordray, Clerk-Treasurer
December 22, 2006
Page 2
Bond Delivery (cont'd)
The amount of Note proceeds to be received is as follows:
Par amount of Notes $2,995,000.00
Less: Underwriter discount (44,925.00)
Net proceeds to be received by Fifth Third Bank, $ ,950.075.00
Indiana, Cincinnati, on behalf of the Commission
We have confirmed with Oppenheimer&Co. Inc. the amount of$2,950,075.00 of net proceeds will
be wired at closing to Fifth Third Bank, Cincinnati, into the City's bank account:
® ABA#: 042000314
Further credit to: Fifth Third Bank, Indiana
Account#: 999-93427
Account Name: City of Carmel
Contact: Carl Mills
Distribution of Proceeds
Pursuant to the Bond Resolution, the following funds are to be created: the Carmel Redevelopment
District Golf Course Revenue Bonds Capital Fund (the"Capital Fund")and the Golf Course Sinking
Fund,which consists of a Bond Account and a Reserve Account. Note proceeds in the amount of
$95,653 will be deposited into the Bond Account of the Golf Course Sinking Fund to pay interest
due on the Notes on August 1, 2007. Note proceeds in the amount of$78,619 (an amount equal to
six months interest on the Notes, the Debt Service Reserve Requirement)will be deposited into the
Reserve Account of the Golf Course Sinking Fund. The remaining Note proceeds, in the amount of
$2,775,803,will be deposited into the Capital Fund. The funds in the Capital Fund are to be used by
the Commission to pay expenses incurred in connection with the Project and for issuance costs of the
Notes.
The net proceeds of the Notes should be deposited in the above described accounts as follows:
To the Capital Fund: $2,775,803
To the Bond Account of the Golf Course Sinking Fund: 95,653
To the Reserve Account of the Golf Course Sinking Fund: 78.619
Total 2 95 7
Members of the Carmel Redevelopment Commission
Honorable James C. Brainard, Mayor
Ms. Diana Cordray, Clerk-Treasurer
December 22, 2006
Page 3
Real Estate Closing and Reimbursement of Note Proceeds from Other Commission Funds
Per Michael Walsh, the attorney representing the City on the golf course acquisition, the real estate
closing is scheduled for 1:30 p.m. on Wednesday, December 27, 2006. The City Clerk-Treasurer
will direct Fifth Third Bank, Indiana to wire$2,675,000 of Note proceeds out of the Capita] Fund to
Chicago Title Insurance Company into the following account:
�j Account Name: Chicago Title Insurance Company
Account#: 192186047
Bank Name: JP Morgan Chase Bank, N.A.
Bank Address: 111 Monument Circle, Indianapolis, IN 46255
® ABA #: 021000021International Swift Code: CHASUS33
It is the intent of the Commission that the Note proceeds be spent only on the Project as described in
the Bond Resolution and the Amendment to Resolution 19-2006(the"Amended Bond Resolution");
which includes projects and improvements that would not endanger the tax-exempt status of the
Notes.
Although$2,675,000 of Note proceeds will be wired to J.P.Morgan Chase to complete the purchase
of Brookshire Golf Course by the Commission on December 27, 2006, the Commission intends to
reallocate proceeds from future sales of land within the Redevelopment District to a portion of the
acquisition cost of the Golf Course. Such land sale proceeds will be reimbursed to the Carmel
Redevelopment District Golf Course Revenue Bonds Capital Fund and, then, used for other
permitted projects under the Amended Bond Resolution, including parking facilities, road and
streetscape improvements, and underground detention improvements in the Redevelopment District.
Note Amortization Schedule
The Notes are dated December 22,2006. The attached schedule of amortization of the Notes shows
that the principal will be payable at maturity on February 1, 2009. The schedule shows the interest
payments due semiannually on February 1 and August 1,beginning August 1,2007. The Notes will
bear interest at 5.25% (calculated based on twelve 30-day months for a 360-day year). The
Commission anticipates issuing long-term bonds to retire the Notes.
Optional Redemption: The Notes are redeemable at the option of the Commission, upon 30 days'
notice, on any date, not earlier than February 1, 2008, without premium.
Members of the Carmel Redevelopment Commission
Honorable James C. Brainard, Mayor
Ms. Diana Cordray, Clerk-Treasurer
December 22, 2006
Page 4
Flow of Funds and Repayment of the Notes
Repayment/Security for the Notes: The principal and interest on the Notes is payable from proceeds
from the sale of the City of Carmel, Indiana, Redevelopment District Golf Course Revenue Bonds,
Series_"(the"Future Bonds") or from the net revenues(gross revenues after deduction only for the
payment of the reasonable expenses of operation,repair and maintenance)derived from the operation
of the golf course facility(the"Net Revenues"), which are irrevocably pledged to the payment of the
Notes. In addition, the Notes may be paid from any other revenues legally available to the
Commission. The Notes are not a general obligation of the City or the District.
® As additional security for the repayment of the Notes, the Commission, on behalf of the District,has
covenanted in the Note Purchase Agreement that,in the event the Commission is ever unable to pay
any debt service due on the Notes from the sources pledged in the Bond Resolution or other funds
made available to the Commission for such purpose,the Commission will commence the procedures
required under IC 36-7-14 to sell the real estate comprising the Project, and will apply the net
proceeds of such sale first to the repayment of all principal and interest due on the Notes.
The Bond Resolution authorizes the following funds and flow of funds related to the operation of the
golf course and the repayment of the Notes.
Golf Course Revenue Fund: All income and revenues derived from the operations of the golf course
4 T will be deposited into the Golf Course Revenue Fund upon receipt.
91 Operation and Maintenance Fund: On or before the 25th day of each month,there will be deposited
into the Operations and Maintenance Fund (the "O&M Fund") an amount sufficient to pay the
expenses of operation, repair and maintenance of the golf course for the next succeeding two months.
The funds in the O&M Fund will be used for the payment of the reasonable and proper operation,
repair and maintenance expenses of the golf course facilities on a day-to-day basis. Any funds in the
O&M Fund in excess of the expected operation, repair and maintenance of the golf course for the
next succeeding month may be transferred to the Golf Course Sinking Fund if necessary to prevent a
default on the Notes or the Future Bonds.
Golf Course Sinking Fund: After meeting the requirements of the O&M Fund, there shall be set
aside and paid into the Golf Course Sinking Fund monthly, as available, a sufficient amount of the
Net Revenues for the payment of(a) the requirements of the Bond Account(as hereinafter defined)
and the Debt Service Reserve Requirement in the Reserve Account, and (b) the necessary fiscal
agency charges for paying the principal of and interest on the Notes and the Future Bonds. Such
payments shall continue until the balance in the Bond Account and the Reserve Account equal the
amount needed to redeem all the then outstanding golf course revenue bonds of the District.
Members of the Carmel Redevelopment Commission
Honorable James C. Brainard, Mayor
Ms. Diana Cordray, Clerk-Treasurer
December 22, 2006
Page 5
Bond Account: Within the Sinking Fund, will be established the Bond Account. On the day of
closing,Note proceeds in the amount of$95,653 will be deposited into the Bond Account of the Golf
Course Sinking Fund to pay interest due on the Notes on August 1, 2007. On or before the 25th of
each month,Net Revenues will be transferred from the Revenue Fund equal to one-sixth(1/6)of the
interest due on the next succeeding interest payment date and one-sixth(1/6)of the principal due on
the next succeeding principal payment date until the amount in the Bond Account is equal to the next
succeeding interest and principal amount. Because $95,653 of Note proceeds will already be on
deposit in the Bond Account to cover the interest due through August 1,2007,no additional deposits
of Net Revenues will be needed until the 25th day of August, 2007.
The Clerk-Treasurer, on behalf of the Commission, will transfer sufficient funds from the Bond
® Account held at Fifth Third Bank, Indiana, to Wells Fargo Bank N.A., Indianapolis, Indiana (the
"Paying Agent") to pay principal and interest when due on the Notes (and the Future Bonds).
********************************
We are glad to have had this opportunity to assist you with the issuance of the Notes to facilitate the
acquisition of the Brookshire Golf Course. Please call or e-mail me if you have any questions or
need additional information.
Very truly yours,
UMBAUGH
Loren M. Matthes
LMM/ceb
Enclosures
cc: Mr. John Alexander
Ms. Kimberly W. Blanchet
Mr. Bruce Donaldson
Mr. Karl Haas
Mr. Tyler Hoch
Mr. Ralph McGinley
Ms. Sherry Mielke
Mr. Carl Mills
Mr. Bryan Nelson
Mr. Les Olds
Ms. Cindy Sheeks
Mr. Michael Walsh
CARMEL REDEVELOPMENT COMMISSION
Brookshire Golf Course
AMORTIZATION OF$2,995,000 PRINCIPAL AMOUNT OF
REDEVELOPMENT DISTRICT GOLF COURSE REVENUE BOND ANTICIPATION NOTES,SERIES 2006
Notes dated December 22,2006
Payment Principal Interest Total Capitalized Net Bond Year
Date Balance Principal Rate - Interest Debt Service Interest Debt Service Total
(%)
08/01/07 $2,995,000 $95,652.81 $95,652.81 ($95,652.81) $0.00
02/01/08 2,995,000 78,618.75 78,618.75 78,618.75 $78,618.75
08/01/08 2,995,000 78,618.75 78 618.75 78,618.75
02/01/09 2,995,000 $2,995,000 5.25 78,618.75 3,073,618.75 3,073,618.75 3,152,237.50
Totals $2.995,000 $331,509.06 $3,326,509.06 ($95,652.81) $3,230,856.25 $3,230,856.25
Prepared by:
Umbaugh
8365 Keystone Crossing,Suite 300
P.O.Box 40458
Indianapolis,Indiana 46240-0458