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CIB saves $1M after state agrees to lower loan rate

July 16, 2010

The city’s cash-strapped Capital Improvement Board received a drop of good news recently when it learned that a reduced interest rate on a state loan will save the agency about $1 million.

CIB officials are expected to publicly announce that news at a meeting Friday afternoon at the Indiana Convention Center, where they'll also vote on a $33 million bailout plan for the Indiana Pacers.

The CIB is expected to approve allotting $30 million over the next three years toward the operation of Conseco Fieldhouse, the home of the Pacers, in addition to at least $3.5 million for capital improvements to the 11-year-old building.

Though the CIB already announced its plans to give the Pacers the money at a press conference Monday, CIB members still must approve the funding.

“I expect this to be a widely attended meeting,” CIB President Ann Lathrop said. “I’m sure we’ll have some comments from the audience and a lively discussion of this among [CIB] members.”

The CIB is the public agency that manages several downtown facilities, including Lucas Oil Stadium, the Indiana Convention Center, Conseco Fieldhouse and Victory Field, among others.

Due to the CIB’s fiscal difficulties, the state last year agreed to loan the CIB $27 million through the State Treasurer’s office. The interest rate provided in December on the first $9 million of that loan was 5.25 percent. The rate was set due to the tenuous financial condition of the CIB and the fact that the 2008 financial statements were issued in May 2009 with a “going concern” opinion, explained Robert Vane, spokesman for Mayor Greg Ballard.

Although the 2008 financial statements were re-issued in November 2009 removing the “going concern,” the treasurer still found the CIB to be a potential financial risk.

After the CIB’s 2009 financial statements issued by the State Board of Accounts found the CIB to once again have a clean audit and no “going concern,” CIB officials reached out to the state treasurer’s office and asked them to consider a rate reduction on its state loan, explained Vane. A 1-percentage-point reduction was granted this month, bringing the interest rate to 4.25 percent, saving the CIB approximately $1 million over the life of the $9 million loan.

The CIB has until December of this year to determine if it needs the second $9 million installment of the loan, and until December 2011 to decide if it needs the third installment. The interest rates will be determined on those installments at the time the loan is granted.

“Anytime you can save the taxpayers $1 million, it’s a good day,” said  Lathrop. “We’re very pleased with this determination.”

 

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