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City to get help with debt

Wednesday, December 24, 2008

The City of Brazil is getting some help with its debts.

Mayor Ann Bradshaw confirmed to The Brazil Times recently the city has chosen First Financial Bank as the buyer of a General Obligation Bond.

General Obligation Bonds are used by states and local governments as a tool to also raise funds for various public works projects.

The bond, which was initially approved at a special meeting of the Common Council of the City of Brazil Oct. 21, is for a total of $990,000.

"We've worked well with First Financial Bank in the past and have taken out Tax Anticipation Warrants with them as well," Bradshaw said.

The interest rate provided in the bid from First Financial Bank starts out at 2.95 percent and maxes out at 4.8 percent by the end of the 10-year bond period. This bid was chosen over the only other one provided, which came from City Securities Corp., Indianapolis. City Securities' interest rate was proposed at 5 percent for the first payable year of the bond and 7 percent for the remainder of the term.

The bond will help bring the city out of a large debt, which Clerk-Treasurer Karen McQueen attributed to the sidewalk project and mismanagement of funds by previous administrations.

"The cost of the sidewalks became much more than the city initially expected," McQueen said.

"Also, in the past, the project was paid for out of city funds rather than taking out a bond or loan."

She elaborated by explaining Dan Hedden, CPA Principal for Umbaugh and Associates, Indianapolis, told both her and Bradshaw a bond had been needed for a long time.

Although the bond is for a total of $990,000, the city is responsible for paying $320,000 of it.

While the other $670,000 is coming through an interlocal agreement with the Clay County Redevelopment Commission as Special Taxing District Bonds.

From figures determined by Umbaugh, $122,406.11 in interest will accrue on the bonds during its 10-year term, which the city will also be responsible for paying, making the city's total repayment obligation $442,406.11.

"We will be paying a fiscal total incrementally each year," McQueen told The Brazil Times.

"It is scheduled to be paid by Jan. 15 each year starting in 2010, so we will be able to start figuring it into our budget."

Bradshaw added Sue Beesley, partner with Bingham McHale, LLP, Indianapolis, will be acting as bond counsel for the city.

In a Nov. 11 meeting, Hedden informed the council the bonds are essentially restructuring the city's debt and opens up the potential to create other streams of revenue.

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In my opinion Ann Bradshaw is really doing a good job as mayor. I called her office once and left a message. She returned my call in less than a half hour. She answered my questions quite professionaly. I truly believe we have a MAYOR capable of doing their job now. But thats my opinion!

-- Posted by rooster1 on Thu, Dec 25, 2008, at 12:31 PM

I believe Ann Bradshaw is trying to do a good job for the city of Brazil, but you can't do much when no money to do it with.The city doesn't have money to fix the streets or sidewalks. SOme of the sidewalks got fixed and others did not. I wish something would be done to beautify our town. I do not know about others in this town but even if there was small increase in property taxes and it was used to fix the streets of our town, I would not mind. Ann is doing a wonderful job so far. At least you do not see city workers leaning on their shovels and 5 men working on one job but only one of them really working! Ann has fixed that. I just hope that when it comes time for re-election the city knows what is good for them and re-elects her because there is no way she can get anything fixed in Brazil without being re-elected at least once!!!

-- Posted by concernedcitizen1 on Thu, Dec 25, 2008, at 7:29 PM

I admit that at first I had my doubts, I thought that it would be business (read politics) as usual here in Brazil. I am glad to see that I was proven wrong, My hat is off to Mayor Bradshaw. I wish her the best and hope she accomplishes what she sets out to do for the city.

-- Posted by Localguy1972 on Mon, Dec 29, 2008, at 1:18 PM

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