Minutes 09/25/2007 - Laserfiche WebLink

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September 25. 2007 Discussion: . Whenever any of the facilities are to be financed with the proceeds of tax-exempt bonds, state law requires approval by the governing body of each local governmental unit that is a member of SPSA. Absent Portsmouth City Council approval, SPSA will be forced to issue taxable debt for the improvements to be located in the city. The amount relating to Portsmouth projects is $13,631,524. . Once member communities and SPSA's Board pass the resolution, a portion of the $31,500,000 proceeds will payoff the earlier 2007 SPSA bond issue, which was not tax exempt and carried a higher interest rate. Financial Benefit: . $10,000,000 in improvements equates to $720,000 in interest expense savings accrued as a result of refinancing at lower interest rates and with tax-exempt status. Staff Recommends: Adoption of proposed resolution. Vision Principle: A Robust and Prospering Economy. Next Steps Following Council Action: . The SPSA Board of Directors will meet on September 26, 2007 to approve the financing plan for this year. Motion by Ms. Randall, and seconded by Mr. D. Smith, to adopt the following resolution, and was adopted by the following vote: "RESOLUTION OF THE CITY COUNCIL OF PORTSMOUTH APPROVING THE PROPOSED ISSUANCE OF CERTAIN REVENUE BONDS BY THE SOUTHEASTERN PUBLIC SERVICE AUTHORITY OF VIRGINIA, A PORTION OF THE PROCEEDS OF THE BONDS TO BE USED TO FINANCE OR REFINANCE FACILITIES LOCATED IN THE CITY. WHEREAS, the Southeastern Public Service Authority of Virginia (the "Authority") anticipates making certain capital improvements and intends to finance or refinance such capital improvements (the "Tax-Exempt Improvements") through the issuance of one or more issues of revenue bonds in an aggregate principal amount up to $31,500,000 (the "Tax-Exempt Bonds") which bonds will finance or refinance the facilities described in Exhibit A, all or a portion of which are or may be located within the City of Portsmouth (the "City"); WHEREAS, under the Internal Revenue Code of 1986, as amended, prior to the issuance of the Tax-Exempt Bonds, the Authority must hold a public hearing and receive governmental approval of the issuance of the Tax-Exempt Bonds; WHEREAS, such governmental approval can, by virtue of the location of certain of the Tax-Exempt Improvements within the City, be given as to such improvements by the City; WHEREAS, Section 15.2-4906 of the Code of Virginia, 1950, as amended (the "Local Approval Provision"), requires that, if certain authorities created pursuant to law in Virginia hold a public hearing in accordance with federal law as a prerequisite to undertaking a tax-exempt financing, such authorities must receive approval for the financing from the governing bodies of the localities in which the improvements to be financed are to be located; WHEREAS, the Authority is an authority subject to the Local Approval Provision; WHEREAS, on September 7, 2007, the Authority held a public hearing (the "Hearing") regarding the issuance of the Tax-Exempt Bonds pursuant to a notice of public hearing published twice, on August 25, 2007 and September 1, 2007, the last such date being not less than six days after the second publication of such notice;