VANDERBURGH COUNTY

BOARD OF COMMISSIONERS

SPACE ALLOCATION MEETING

OCTOBER 20, 2003

The Vanderburgh County Board of Commissioners met in special session this 20^th day of October, 2003 at 5:05 p.m. in Room 307 of the Civic Center Complex with President David Mosby presiding.

President Mosby: Call to order Vanderburgh County Board of Commissioners space allocation meeting for October 20, 2003. I’m not sure what’s on the agenda.

Commissioner Fanello: Mr. Rector is going to update us.

President Mosby: Well, I figured that much.

David Rector: A couple of things, just an update from your request from our last meeting. I did talk with 5/3, Old National and Integra and have some possibilities for some short term bond anticipations loans, whatever we want to call it, from 5/3 and Old National. Integra, I don’t believe understood what we were trying to accomplish or hadn’t done that before. Both 5/3 and Old National said they were more than willing to work with us, and gave us pretty comparable rates that I can give you copies of. Then also I talked with Steve Meno at 5/3, and he gave us some information about bond anticipation notes from the Indiana Bond Bank and what a 13 ½ or a ten million dollar bond might mean in today’s market if they were sold. I think I owed you that information, and then, of course, as you are all aware, based on Council approval here, the next two meetings with the $90,000 from the CCD we’ll be able to keep design going and have that completed, hopefully by the end of the year when the Health Department moves out. I know that Floyd Edwards in Human Relations has identified a couple of places, and it appears funding may not be quite the same problem with him, and he should be out by the end of the year also. So, that space should be available to start construction for the new court space as soon as everybody is out of there. Judges, if you’ve got anything else. I know that some of you were aware of this, and some of you weren’t. I’d caught some of you, and some I didn’t. So, I don’t know if–

Carl Heldt: Aware of the meeting?

David Rector: Of the money for the design. Okay, I couldn’t remember who I had talked to and who I hadn’t yet. So, I don’t know if they have something to add, but I think that’s all you had asked of me at the last meeting.

Commissioner Crouch: Mr. Rector, do you have the information from 5/3 and Integra?

David Rector: Yes, I’ve got all of that. I’ve got the information from Steve Meno, and the, I don’t want to call it quotation, I guess proposals from 5/3 and Old National. I guess, the big decision is now, is how and when do we approach Council for the complete funding for whatever phases of this project you want to do? Do we want to go for just the approximately two million for the Health Department and juvenile court space renovation? Do you want to go priority wise for a large chunks of it for the full renovation when the old jail moves, or for the whole complete project? I think the most important, obviously, is that we need to find that two million dollars to keep the project moving forward downstairs.

Commissioner Fanello: What’s the $90,000 covering? That’s covering design?

David Rector: That will be complete design and bid specifications for the Health Department area, Human Relations area, existing juvenile court, probate area, and Judge Heldt’s office upstairs.

Commissioner Fanello: Okay. Okay. Well, I think we need to look as soon as possible at the old jail. I’ve requested a meeting with Councilman Winnecke and Councilman Raben regarding operations and staffing of the new jail. So, I mean, I think it would be appropriate to bring up renovations for the old jail at that time too, but I think that needs to be our second priority after the courts and the Health Department.

David Rector: Yeah, and I think your decision is do you try to fund it in sections, phases, whatever you want to call it, or do you want to try to fund the whole project?

Commissioner Fanello: I think, personally, I think that decision is up to the Council.

President Mosby: I agree, I mean, it’s up to the Council and what they can afford, but I would also like to see what it’s going to cost us if we do it in phases as opposed to outright one time. I mean, are we going to be paying double the cost?

David Rector: I would assume, it’s obviously going to cost more, because at whatever point we sell bonds, I don’t think we’re probably going to see bond markets like this, or we hope we don’t again any time soon. Then bid packages and construction would be more. Labor contracts come about in April each year, those would be more. So, the more you delay this, the more it’s going to cost over time. I understand the funding situation, and you just may not be able to afford it.

Commissioner Fanello: I think it would be helpful though, as Commissioner Mosby said, though, I think it would be helpful to show that analysis to the Council, you know, dividing it up into sections versus doing it all at one time. Because, I mean, good business practice is you do as much as possible when the market is good.

David Rector: Okay, I could probably break it down, maybe by areas, by floor.

Commissioner Fanello: Somehow showing them if we did section, or, you know, if we incurred this much cost–

David Rector: Sure.

Commissioner Fanello: –I don’t know if maybe somebody in the finance industry could make some projections about the bond market. That’s kind of hard to do, but some kind of analysis showing how the cost will be different doing it in phases versus doing it all in a big chunk.

David Rector: Okay. The most immediate, obviously, will be...we’ll have the design done, and the space will be empty, and we’re just sitting waiting on money then to start the Health Department renovation.

President Mosby: That’s definitely the most important.

David Rector: Yes.

President Mosby: I would agree with that.

Carl Heldt: May I say something?

President Mosby: Sure.

Carl Heldt: I would hope that you would go ahead with the Health Department and the court over there for the reasons not only have we got the plans ready to go, we’re ready to go, and there would be empty space, and I hope that we don’t have to wait until the jail is empty before, because that’s a two or three year deal down the road.

President Mosby: That’s not my thought at all.

Commissioner Fanello: That’s not our thought.

President Mosby: Once that space is empty, I think we’ve got to utilize it. So, I mean, it’s my thought that when that empties out at the first of the year, we have to have a plan to be ready to go.

Carl Heldt: Okay. Thanks.

Commissioner Fanello: But, I think we need to be thinking about, in relation to the total cost–

David Rector: And I think your indication and desire to move forward with the design tells the judges that you want the project to keep moving.

President Mosby: Right.

David Rector: I’ll get you copies of the information from the banks and Steve Meno, tomorrow morning?

Commissioner Fanello: That’s fine.

President Mosby: That’s fine.

Madelyn Grayson: Dave, can I have one for the record also?

David Rector: Sure.

Commissioner Fanello: So, I guess, the question is though, how long is the design going to take? I’m sorry, did you say?

David Rector: Assuming we get Council approval from that, the first of November we’ll start immediately. I would hope soon after the first of the year, very soon. I’ll push them. It’s ready to go to bed as soon as that space is vacant.

Commissioner Fanello: I’m just thinking of the timing of the appropriation to actually move on the work. Don’t we need an appropriation for the...as soon as possible?

David Rector: I’ll have it designed and bid before they probably get through the appropriation for the money to do it.

Commissioner Fanello: Right. I mean, I think we need to make a decision on when we’re going to turn in that appropriation to the Council.

Commissioner Crouch: Did you say, I’m sorry, Mr. Rector, how long it will take approximately for that design work to be completed?

David Rector: I’ve been saying all along I thought about three months. So, I’ll try to push them now, three months would be November, December, the end of January. With that being vacated, according to what happens to the appropriation, I’ll try to push that along and have it done very soon after the first of the year.

Commissioner Crouch: Perhaps if you could forward–

David Rector: And what I could...excuse me, Suzanne, what I’ll do is I’ll prioritize it, we’ll try to move this along first, because that’s the first phase of construction. We’ll follow up then on that design, and maybe be able to do it by phases.

Commissioner Crouch: If you could forward the information you’re going to share with us to Council, that might at least get them–

David Rector: Okay.

Commissioner Crouch: –prepared and thinking about what’s coming next.

David Rector: Sure. Would be happy to.

President Mosby: Any other comments?

Commissioner Fanello: No, but you have a couple of people in the audience.

President Mosby: Is there somebody else that wants to speak?

Richard Cannon: I’m Richard Cannon, Vice President of Hillyard Lyons here in Evansville. I want to introduce, take a minute just to introduce our company to you guys, to the Council, to the Commissioner, Commissioners. Hillyard Lyons is the largest retail outlet in Indiana, and the largest in Evansville as well. This is David Wimmer, our investment banker from Indianapolis. We are owned by PNC Bank, and the local office of Hillyard Lyons is the largest producing office in the entire organization. What that means to you is that we can get bonds in local hands, people love to buy local, whether it’s Deaconess Hospital or Vectren or Old National or whatever, people really enjoy being able to buy local issues. Plus we have the retail outlet to sell the bonds, and so it’s going to be cheaper and lower interest rate for you rather than sell them all to an institution, because they demand a higher interest rate. So, I’m going to introduce David Wimmer from Indianapolis, our banking investment manager.

David Wimmer: Thank you, Richard. Certainly we’ve seen over the last few months the Commissioners doing a couple of major financings which we’ve not had a chance to be part of, so, certainly I apologize for not being here sooner. Just to let you know that we would love to be part of a transaction as you move forward when it comes to issuing debt. If you turn to page ten, you have a snapshot of what Hillyard Lyons is all about. We have 16 offices in the state of Indiana, with our biggest office here in Evansville, Indiana. As Richard had said, the more bonds that you can put in your local market, and in the state of Indiana, the lower the interest rates will be for you. We recently completed the financing for the Evansville School Corporation of $50 million. I’ve done school transactions for Warrick schools. I recently did a German Township refunding for the water utility, so we’ve had some major financings down in this market place recently, and it sounds like you’re moving forward with another one. We also do bond anticipation notes. We’re in the competitive market all the time. So, all we seek is your consideration, if and when the time presents itself, just as another opportunity for you to go out and solicit a bid. We do financings across the state, and section C is a list of financings we have done this year, just to give you a flavor for all the markets that we have touched. So, if and when the time presents itself that you want to seek a second bid from a local firm, we would be more than happy to respond to it.

Commissioner Crouch: Is it possible for you to get with Mr. Rector and give him kind of a quote–

David Wimmer: Sure.

Commissioner Crouch: –along with the other three banks?

David Wimmer: If I can get some information with regards to what you’re looking at.

Because that’s what we do for a living, and we are the largest firm in the state. We have the most offices, and we have the biggest brokerage distribution outlet. When you have 130 folks picking up the phone to market your bonds, you know, that’s twice the size of the next competitor. The more that you can park here in Indiana, the lower the interest rates. That’s demonstrated in appendix A where we’ve compared recent financings that we have done to other Indiana firms, and you get a flavor for how we’ve been able to derive a lower yield, which ultimately saves the taxpayers money. So, thank you.

Commissioner Fanello: Thank you.

President Mosby: Is there any questions? Thank you.

David Rector: Maybe what we can do is if they do loans, short term loans like that too, see what their bids may be. What we had done before with the other was use Building Authority Depreciation Reserves as collateral for this, for the loan. Then, and you’ll see it when you get the presentation, a percentage off of that, and they were still paying us for it. I guess, at some point, then we’ll need to decide are we going to do this using the Building Authority money as collateral, or somehow the Council, Commissioners saying taxpayer increment is going to be the collateral for it, but, obviously, banks are going to want something to say they are going to get it back. So, there’s a lot of decisions yet to be made on how we move forward once you decide to move forward.

President Mosby: Any questions? Anybody else that would like to speak? Seeing none. If there is no further business we will adjourn the October 20^th space allocation meeting.

(Meeting adjourned at 5:20 p.m.)

VANDERBURGH COUNTY

BOARD OF COMMISSIONERS

David W. Mosby, President

Catherine Fanello, Vice President

Suzanne M. Crouch, Member

Recorded and transcribed by Madelyn Grayson.