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TO: Mayor Richard C. Irvin
FROM: Martin S. Lyons, Chief Financial Officer/City Treasurer
DATE: July 1, 2021
SUBJECT:
A resolution amending and expanding the Line of Credit (LOC) with Fifth Third Bank from $10.0 million to $15.0 million for the purposes of short term financing related to economic development activities.
PURPOSE:
To approve the renewal and expansion of the $10.0 million Line of Credit (LOC) to $15.0 million with Fifth Third Bank for one year.
BACKGROUND:
The City initially approved LOCs with Old Second Bank and Fifth Third Bank in 2019 for $10.0 million. The renewal of the LOC for Old Second was due in June however the LOC for Fifth Third is due now. Presently the City has $6.0 million in funds drawn on the LOC with Fifth Third Bank, however, future development projects could involve a larger draw. Specific projects could involve:
1)The development along the Fox River just north of the Downtown on both sides of the river.
2)The development of the Farnsworth and Bilter Road areas.
3)The redevelopment of the Fox Valley Mall.
4)The continued support of downtown redevelopment
5)Potential development of Orchard Road area.
DISCUSSION:
The attached table show the projected use and payoff of the current $10.million in total LOC for Fifth Third Bank. Certain draws in the future could be changed between Old Second and Fifth Third banks, as well as projected payoffs of the respective LOCs.
The renewal LOC at $15.0 million, has slightly different interest rate terms due to the London Interbank Loan Rate (LIBOR) being an adjustable rate. The rates actually incurred during 20-21 are projected to be at or below those in 2021-22 as total interest rates rise over the next year . The amendment renewing the LOC agreement is attached.
IMPACT STATEMENT:
Approval of this resolution will renew this ongoing line of credit, which is necessary for the City's continued economic development project financing.
RECOMMENDATIONS:
That this resolution be a...
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