The final part of the October 4, 2016, minutes of the Crystal Lake Civic Center Authority.
At Mr. Kost’s request, Mr. Lewis clarified “pro forma” to the group, advising that would include operating, repairing, maintenance and other expenses and there was a legal requirement that the Raue Center must show they will be able to meet expectations.
Mr. Filippini added that the pro forma has to show revenue coming in to pay expenses, including
- replacement, as well as
- enough money to pay the debt service
in order for the CCA Board to have a reasonable expectation to issue the bonds.
Mr. Filippini stated that the question the CCA would need to consider was whether it would be reasonable for the CCA to issue bonds equivalent to the current note.
Mr. Reece noted that in 20 years, serious work will need to be done on the building, and the ability to issue another bond would be important, so it was imperative that dollars are set aside by the Raue Center to meet their current obligation to ensure financing avenues would be open at that time.
Mr. Lewis stated that he would follow up with Mr. Koczwara and work on a term sheet with Mr. Kost, and after the next CCA Board meeting, Mr. Filippini and Mr. Kost would work on the legal documents. He stated that the best case scenario would be 2-3 months before issuing the bonds.
Lisa Waggoner asked if there was any doubt about issuing the bonds.
Mr. Filippini stated that the CCA has the legal authority to issue bonds, but must meet standards of tax and securities laws and determine if the bond payment is commensurate with the outstanding debt.
A man in the audience asked who would negotiate with Home State Bank, and Mr. Reece and Mayor Shepley replied that the Raue Center would do that.
Mayor Shepley added that the note with Home State Bank comes due in 2018.
Tom Hayden stated that the bank has no hold on the property, and Mayor Shepley acknowledged that was true but beyond the scope of the current discussion.
Mr. Filippini stated that they have an encumbrance on the property which does not conform with the Statue.
Mr. Lewis suggested that the Raue Center could hold fundraisers, seek community involvement and ask for matching forgiveness from the bank, noting that the Raue Center is an important element of the community but the numbers just weren’t working out and it was possible that community support could bring down the debt and have a positive result.
A man in the audience suggested that the Raue Center’s position with Home State Bank was enhanced because the CCA has no authority to transfer ownership of the building.
Mr. Kim stated that the use of the proceeds from all of the smaller loans would help to sell the
bonds, but they need that information from the Raue Center.
Mr. Kost stated that he also needed information regarding donations equity for the original $8 million.
Mr. Lewis stated that he would put all of the needed information in an email.
Lisa Waggoner asked if the pro forma would include costs for major repairs or upgrades, and if that information would come from the City.
City Manager Gary Mayerhofer stated that it would be better for it to come from the Raue Center, since the City did not have all of that information.
Mr. Wickham asked how the public is informed about the CCA Board meetings.
Mr. Koczwara stated that the CCA meetings are subject to the Open Meetings Act and agendas are placed on the City’s main lobby bulletin board and on the City’s website calendar at least 48 hours in advance.
Gregg Daniels assured the Raue Center representatives that the CCA Board would not micro-manage them, and that they were doing a great job.
Date/Time of next meeting
The consensus of the CCA Board was to hold their next meeting on November 1, 2016 at 5:30 p.m. at City Hall.
There being no further business, Gary Reece moved to adjourn the meeting at 7:25 p.m. Mike
Splitt seconded the motion. All voted yes. Motion passed.