The City of Carmel Local Public Improvement Bond Bank
Indiana law permits each first and second class city in the state to have a local public improvement bond bank governed by a five-member board appointed by the mayor. The purpose of a local bond bank is to serve as a clearing house of sorts for bonds issued by the city and its various taxing districts (such as park, storm water and redevelopment districts). The underlying bonds of the city and/or its taxing districts are purchased by the bond bank, and the bond bank issues its own bonds out to the public to fund the purchase. When a city has several bond issues that are preparing to go to market at the same time, it can be more efficient to sell them all through one large bond issue of the bond bank.
For example, the City Council in Carmel approved the issuance of 13 separate general obligation bonds, three bond issues by the City’s redevelopment authority, and a storm water district bond, all payable from or backed up by a general property tax pledge. Rather than having these entities issue 17 different bond issues directly to the public in varying amounts, they can all be pooled through Carmel’s bond bank who can then issue one large bond issue out to the public to fund the various projects. This creates efficiencies in being able to market and sell just one large bond issue instead of 17 separate bond issues, and increases the likelihood of obtaining overall more favorable interest rates than if the bonds were each sold separately.
Board of Directors (5)
Clerk Treasurer, City of Carmel
Bruce Donaldson, Barnes & Thornburg