Minutes 11/09/2010 - Laserfiche WebLink

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November 9. 2010 Ayes: Cherry, Edmonds, Heretick, Moody, Randall, Whitehurst, Wright Nays: None - City Manager's Report - 10 - 515 - Adoption of an ordinance authorizing the issuance and sale of general obligation public improvement bonds and general obligation refunding bonds in an aggregate principal amount not to exceed $30,000,000. Vision Principles: Thriving Neighborhoods and a Sense of Community; A Robust and Prospering Economy. Background: . On December 9, 2008, City Council adopted an ordinance authorizing the issuance of an aggregate principal amount not to exceed $30,000,000 of general obligation bonds (the "New Money Bonds") and notes in anticipation thereof, for the purpose of providing funds to finance or refinance various capital improvement projects (the "Projects"). At the time, credit markets were extremely violatile, and access to capital markets was limited as a result of the credit crisis. . Subsequently on December 18, 2008, the City issued its General Obligation Bond Anticipation Note, Series 2008 (the "BAN") in anticipation of the issuance of the New Money Bonds, in order to finance or refinance the Projects. . On August 24, 2010, City Council was advised by its Financial Advisors, Davenport and Company, that it is advisable to issue and sell the New Money Bonds before the end of calendar year 2010 in order to enjoy the benefit of the current favorable interest rate environment rather than delay taking out the BAN until next year. . Also, given the favorable interest rate environment, Davenport has advised the City that certain maturities of the City's existing debt may be able to be refunded for savings purposes should they provide at least 2.5% Net Present Value savings at the time of pricing. Discussion: . The City is in the position of having good rating agency momentum as a result of positive FY09 and FY10 financial results. It is in the financial best interest of the City to take advantage of this opportunity in order to save money. Financial Impact: . The long-term interest rate the City can expect to lock-in in the current market (low 4% range) will save over $5 million in total debt service versus the initial interest rate used in the initial planning (2008/2009) of 5%. . The City will remain compliant with its debt affordability guidelines. Recommended Action: . Adoption of the attached ordinance authorizing the issuance of the New Money Bonds in an amount not to exceed $30,000,000 and the issuance of refunding bonds in the event the City is able to achieve the targeted debt service savings. Vision principles: Thriving Neighborhoods and a Sense of Community; A Robust and Prospering Economy. 1. Mark Geduldig-Yatrofsky, 2713 Sterling Point Drive, asked City Council to consider using some of the money to fund the sound wall at 1-164. Motion by Mr. Whitehurst, and seconded by Mr. Heretick, to adopt the following ordinance, and was adopted by the following vote: "ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PORTSMOUTH, VIRGINIA AUTHORIZING THE ISSUANCE AND SALE OF GENERAL OBLIGATION PUBLIC IMPROVEMENT BONDS AND GENERAL OBLIGATION REFUNDING BONDS IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $30,000,000." Ayes: Cherry, Edmonds, Heretick, Moody, Randall, Whitehurst, Wright Nays: None