The Sellersburg Redevelopment Commission was told Aug. 4 that its tax-increment financing (TIF) bond sale is slated to close Aug. 20, with the bonds privately placed and purchased by Regions Bank and proceeds to be held by a trustee until disbursement.
Nick Lawrence, a consultant with The Wheatley Group, told commissioners that the bond placement eliminated a previously expected debt service reserve and produced a lower interest cost. “So right now we are, slated, I believe, to close on August 20 for our for our bonds and to receive proceeds from that,” Lawrence said. He summarized the placement as privately negotiated and noted that the removal of the debt service reserve and the interest-rate savings materially improved the financing.
Why it matters: the bond proceeds and TIF cash balances fund capital projects and reimbursements the commission has approved. Lawrence said total project costs for the issuance were $8,645,000 to produce about $8,400,000 in proceeds; the financing was privately placed with Regions Bank and shows a draft interest rate of 4.33%, down from earlier underwriting assumptions near 6%.
Commission staff and consultants said the placement increased coverage on the new lease-rental bonds to about 154–155%, above the roughly 140% coverage projected earlier. Lawrence said estimated tax-increment remaining for debt service in future years ranges from about $530,000 to nearly $700,000 based on current TIF projections, and that the commission currently holds roughly $2,000,000 in cash. He added the commission could still have between $500,000 and $600,000 net of debt service available yearly under current projections.
Details from the fund report presented at the meeting show year-to-date TIF revenue of $964,814.06 and a current fund balance of $2,081,577.06. Lawrence also noted amounts approved but not yet applied to appropriations, including a previously approved $30,000 JTL facility assessment and other claims that will appear on the next claims register.
Lawrence said final legal documents are being circulated in preparation for closing, and that proceeds will be held by a trustee with a pay-application process for expenditures. He said the commission can begin procurement for projects such as the Camp Run sewer component and will reconcile reimbursements for costs already incurred on the Ivy Tech wastewater project once trustee funds are available. “We should have funds in trustees’ hands before the end of the month,” he said.
Discussion at the meeting included routine reconciliation of claims and appropriations and planning for an end-of-year spending plan; commissioners did not vote on bond terms during the meeting and were told closing documents are being finalized. The commission’s next steps are to close the placement, reconcile any reimbursement requests, and proceed with procurement and project execution as appropriate.
The commission approved routine fund reports and claims in separate votes during the meeting; no formal commission action on the bond placement was recorded Aug. 4.