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398
<br />
<br />March 12, 1996
<br />
<br /> "Recent lower interest rates have prompted us to examine
<br />the outstanding debt of the City to determine if any savings
<br />could be achieved through refunding of existing debt with new
<br />debt having lower interest rates. Our financial advisor
<br />examined our outstanding general obligation debt and
<br />concluded that there are maturities in both the January 1992
<br />and April 1992 bond issues that could be likely candidates
<br />for advanced refunding. Estimates on the savings for
<br />refunding of these bonds are in the $500,000 range on a
<br />present value basis. As these bonds would be an advanced
<br />refunding, State law requires that we apply for approval from
<br />the State Council on Local Debt,
<br />
<br /> In order to proceed with the refunding, the following
<br />actions would need to be considered.
<br />
<br /> o Adoption of a resolution authorizing the refunding of
<br />the maturities from the January 1992 and April 1992 General
<br />Obligation Public Improvement Bonds ($16,820,000) and similar
<br />maturities from the Public Utilities Bonds from these s~une
<br />two issues {$6,155,000).
<br />
<br /> o Adopt an ordinance appropriating $30,000 from the
<br />Capital Improvements Fund and $20,000 from the Public
<br />Utilities Capital Improvements Fund for the purpose of
<br />defraying the expenses to be incurred with the refunding
<br />process.
<br />
<br /> These issues were brought to the February meeting of the
<br />Municipal Finance Commission and were favorably considered by
<br />that Commission. I have attached a letter from the Chairman
<br />indicating Commission's support for the refunding.
<br />
<br /> I recommend that the attached resolution and ordinance
<br />be adopted as the potential savings can be substantial to the
<br />taxpayers. While interest rates are certainly volatile, we
<br />will have a six month period from the date approval is
<br />received from the State Council on Local Debt to market the
<br />bonds. Historically, interest rates have a tendency to be
<br />lower prior to presidential elections, and we should be
<br />prepared to take advantage of this trend to lower our debt
<br />service payments.
<br />
<br /> With your approval of this item, the remaining balances
<br />of bonds authorized, but not yet appropriated, in the Capital
<br />Improvements Fund will be $2,821,410 and $20,447,424 in the
<br />Public Utilities Capital Improvements Fund."
<br />
<br /> Motion by Mr. Martin, and seconded by Mr. Robinett,
<br />adopt the following resolution, and was adopted by the
<br />following vote:
<br />
<br />to
<br />
<br /> "A RESOLUTION OF THE COUNCIL OF THE CITY OF PORTSMOUTH,
<br />VIRGINIA, APPROVING THE ADVANCE REFUNDING OF A PORTION OF OR
<br />ALL OF THE CITY'S $12,685,000 OUTSTANDING PRINCIPAL AMOUNT OF
<br />CITY OF PORTSMOUTH, VIRGINIA, GENERAL OBLIGATION PUBLIC
<br />IMPROVEMENT BONDS~ SERIES 1992, DATED JANUARY 1, 1992 AND
<br />MATURING AUGUST 1, 2002 TO AUGUST 1, 2012, BOTH INCLUSIVE,
<br />THE CITY'S $4~195,000 OUTSTANDING PRINCIPAL AMOUNT OF CITY OF
<br />PORTSMOUTH~ VIRGINIA, GENERAL OBLIGATION PUBLIC UTILITY
<br />BONDS~ SERIES 1992, DATED JANUARY 1, 1992 AND MATURING AUGUST
<br />1, 2002 TO AUGUST 1, 2012, BOTH INCLUSIVE, THE CITY'S
<br />$4,135,000 OUTSTANDING PRINCIPAL AMOUNT OF CITY OF
<br />PORTSMOUTH, VIRGINIA, GENERAL OBLIGATION PUBLIC IMPROVEMENT
<br />REFUNDING BONDS, SERIES 1992, DATED APRIL 1, 1992 AND
<br />MATURING NOVEMBER 1, 2002 TO NOVEMBER 1, 2005, BOTH
<br />INCLUSIVE, AND THE CITY'S $1,960~000 OUTSTANDING PRINCIPAL
<br />
<br />
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