Minutes 03/23/2010 - Laserfiche WebLink

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March 23. 2010 Motion by Mr. Moody, and seconded by Mr. Whitehurst, to adopt the following ordinance, and was adopted by the following vote: "ORDINANCE ESTABLISHING A PERSONAL PROPERTY TAX RELIEF PERCENTAGE OF 55% FOR CALENDAR YEAR 2010 PERSONAL PROPERTY TAX BILLS." Ayes: Heretick, Moody, Psi mas, Randall, Smith, Whitehurst, Holley Nays: None 10 - 138 - Adoption of an ordinance of the Council of the City of Portsmouth, Virginia (the "City") authorizing the General Obligation Guaranty by the City of the timely payment of a portion of principal of and interest on certain Guaranteed Subordinated Revenue Bonds and Senior Subordinated Revenue Bonds previously issued by the Southeastern Public Service Authority of Virginia. Vision Principles: A Robust and Prospering Economy. Background: . On April 28, 2009, Council adopted a resolution to: sanction and endorse the Chief Administrative Officers of the Owner Communities' proposal (CAO Proposal entitled "Financial Assistance Plan for SPSA"); approve certain Virginia Resources Authority (VRA) requirements relative to SPSA; and, support additional objectives relative to the management of SPSA and SPSA's assets. . Further, on May 12, 2009 Council adopted an ordinance authorizing the several general obligation guaranty by the City of the timely payment of a portion of the principal of (not to exceed $26,481,454) and interest on certain guaranteed subordinated revenue bonds of SPSA (2009 SPSA Local Bonds). . The 2009 SPSA Local Bonds were issued on June 17, 2009 in the principal amount of $71,985,000 and were purchased by VRA. The proceeds of the 2009 SPSA Local Bonds were used to restructure and refund certain outstanding SPSA bonds, some of which were held by VRA and some of which were not held by VRA. . SPSA is currently indebted to VRA in the amount of approximately $140.7 million of bonds, consisting of guaranteed subordinated revenue bonds (including the 2009 SPSA Local Bonds) and senior subordinated revenue bonds, issued to finance and refinance various capital expenditures of SPSA (collectively, SPSA Local Bonds). . SPSA has entered into a purchase and sale agreement for the sale of SPSA's RDF Plant and Power Plant (Waste to Energy - WTE). A portion of the proceeds of the sale of the WTE facilities are expected to be applied to the prepayment of a portion of the SPSA Local Bonds. VRA has required that the timely payment of principal of and interest on the SPSA Local Bonds remaining after the WTE Sale (Remaining SPSA Local Bonds) be severally guaranteed by a moral obligation pledge of the County of Southampton and the general obligation pledge of the other Owner Communities, including the City. . The ordinance proposed herein authorizes the City's several general obligation guaranty of a portion of the principal of (not to exceed $5,135,000) and interest on the Remaining SPSA Local Bonds, conditioned upon the termination of the existing guaranty. Discussion: . The terms of the new guaranty are in a Guaranty Agreement and the repayment to the Owner Communities of any payments made by the Owner Communities under the new guaranty are in a Reimbursement Agreement among SPSA and the Owner Communities. . It is advisable for Council to pledge the full faith and credit of the City in an amount not to exceed $5,135,000 in order to severally guaranty the timely payment of a portion of the principal of and interest on the Remaining SPSA Local Bonds pursuant to the Guaranty Agreement and the Reimbursement Agreement. . Upon adoption of the proposed ordinance, the full faith and credit of the City will be pledged for the payment of any amounts due by the City under the Guaranty Agreement. If in the future SPSA were to be in default with respect to the Remaining SPSA Local Bonds, under usual and customary circumstances the City would be called upon to pay only the then current annual or semi-annual debt service (principal and interest), not the entire amount of outstanding debt guaranteed by the City.