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TO: Mayor Richard C Irvin
FROM: Christopher A. Minick, City Treasurer-Chief Financial Officer
DATE: June 27, 2022
SUBJECT:
A resolution renewing the Line of Credit (LOC) with Fifth Third Bank in the amount of $15 million for a one year term to expire July 22, 2023.
PURPOSE:
To approve a renewal of the Line of Credit (LOC) with Fifth-Third Bank in the amount of $15 million for a one year term to expire July 22, 2023.
BACKGROUND:
The City initially approved LOCs with Old Second Bank and Fifth Third Bank in 2019 for $10.0 million. The City has used the LOC's to provide short-term financing for the City contributions to various land acquisition and economic development projects when bond financing is not practical. Staff anticipates that there will be additional need for short term financing of economic development projects in the future and the LOC's provide a practical and cost effective vehicle for those needs. The City makes periodic payments on the LOC's as appropriate when long term bonds are issued.
Each LOC is renewed separately, and the Old Second LOC renewal was presented at the June 16 Finance Committee Meeting and appears on the Consent Agenda for the June 28, 2022 City Council Meeting for anticipated final consideration.
DISCUSSION:
The attached table shows the activity of the Fifth-Third Bank LOC. The current balance on the LOC is $6,500,000. The LOC is anticipated to be reduced by payments from the recent GO Bond Series 2022B. Additionally, the City will also receive repayments from developers from various costs initially financed by the City, primarily related to historic preservation tax credits. Once received, we will apply these payments to the LOC used to initially finance the short-term timing difference between construction costs and repayment of these credits.
The renewal LOC, has slightly different interest rate terms due to the elimination of the London Interbank Loan Rate (LIBOR) on which the expiring LOC interest rate is...
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