Minutes 08/11/1998 - Laserfiche WebLink

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August 11. 1998 Purgose and Need: In 1994 the City Council, with the subsequent approval of the voters, approved the issuance of $22.9 million in General Obligation Public Utility Bonds primarily to upgrade the water treatment plant. Of this amount, $13.0 million has been previously issued and expended. The balance is now needed to continue payments of the vendors for this multi-year renovation. Bond Council has provided the attached resolution authorizing and ratifying the issuance of the notes. It is expected that permanent financing will be sought through a bond issuance in the latter part of 1999. Financial Impact: By issuing permanent bonds we are required to comply with certain spending requirements. When it is not anticipated these requirements may not be met, the use of BANs is preferable. OUr practice has been not to issue permanent financing until the spending requirements can be ready adhered to. · The cost to the Public Utility System for the 12-month duration of the note will be approximately $378,000, wh ich will be paid from their operating budget. The BANs rate is lower than the expected rate of permanent financing on which interest cost is normally paid. The issuance of BANs will prevent the need to use General Fund cash. · The lowest bid was from Crestar Bank at 3.78%. Motion by Mr. Benn, and seconded by Mr. Pitts, to adopt the following resolution, and was adopted by the following vote: "RESOLUTION OF THE COUNCIL OF THE CITY OF PORTSMOUTH, VIRGINIA, APPROVING THE SALE OF $9,900,000 PRINCIPAL AMOUNT OF CITY OF PORTSMOUTH, VIRGINIA, GENERAL OBLIGATION PUBLIC UTILITY BOND ANTICIPATION NOTES AND THE FORM AND OTHER DETAILS THEREOF; AC~CEPTING THE PROPOSAL OF CRESTAR SECURITIES CORPORATION TO PURCHASE SUCH NOTES; AUTHORIZING THE CITY MANAGER, THE DEPUTY CITY MANAGER FOR FINANCE AND THE CITY TREASURER TO TAKE ALL ACTIONS AS SHALL BE REQUIRED IN CONNECTION WITH THE ISSUANCE~ SALE AND DELIVERY OF SUCH NOTES; AUTHORIZING THE CITY TREASURER TO EXECUTE SUCH NOTES; AND OTHERWISE PROVIDING WITH RESPECT TG THE ISSUANCE OF SUCH NOTES. WHEREAS, the Council (the "Council") of the City of Portsmouth, Virginie (the "City"), on August 23, 1994 adopted an ordinance, entitled "AN ORDINANCE TO AUTHORIZE THE CITY OF PORTSMOUTH, VIRGINIA, TO CONTRACT A DEBT AND ISSUE TWENTY-TWO MILLION NINE HUNDRED THOUSAND DOLLARS G$22,900,000) PRINCIPAL AMOUNT OF CITY OF PORTSMOUTH, VIRGINIA, ENERAL OBLIGATION PUBLIC UTILITY BONDS TO FINANCE THE COSTS OF CAPITAL IMPROVEMENTS, EXTENSIONS AND ADDITIONS TO THE REVENUE- PRODUCING WATER AND SEWER SYSTEM OF SUCH CITY, UNDER AND PURSUANT TO ARTICLE VII, SECTION 10(a)(2) OF THE CONSTITUTION OF VIRGINIA, 1971, AND CHAPTER 5.1 OF TITLE 15.1 OF THE CODE OF VIRGINIA, 1950, AND AUTHORIZING AND PROVIDING WITH RESPECT TO THE ISSUANCE AND SALE OF A LIKE PRINCIPAL AMOUNT OF CITY OF PORTSMOUTH, VIRGINIA, GENERAL OBLIGATION PUBLIC UTILITY BOND ANTICIPATION NOTES IN ANTICIPATION OF THE ISSUANCE AND RECEIPT OF THE PROCEEDS OF SALE OF SUCH BONDS", authorizing the issuance of $22,900,000 principal amount of City of Portsmouth, Virginia, General obligation Public Utility Bonds for the purpose of providing funds to pay the costs of capital improvements, extensions and additions to the revenue-producing water and sewer system et