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April 23, 2013
<br />(4) I am able to participate in the public hearing, discussion, and vote on this
<br />matter fairly, objectively, and in the public interest."
<br />At this time, I ask that the Clerk take an electronic roll call vote of each Council
<br />member as to his or her agreement with the declaration. A "Yes" vote signifies
<br />agreement.
<br />Ayes: Cherry, Edmonds, Meeks, Moody, Psimas, Randall, Wright
<br />Nays: None
<br />13 -185 Public hearing with respect to the proposed adoption of an ordinance to
<br />authorize the City to contract a debt and issue general obligation bonds of
<br />the City, or notes in anticipation thereof, in a principal amount not to
<br />exceed $175, 000, 000.
<br />1. Phil Smith, 5716 High Street, spoke in support of this item.
<br />2. Judy Mallory, 4205 Nina Drive, spoke in support of this item.
<br />3. Geraldine Granger, 1413 Horne Avenue, spoke in support of this item.
<br />4. Robert Brown, 5105 Greenbrook Drive, spoke in support of this item.
<br />5. Jack Welsby, 4424 Point West Drive, spoke in support of this item.
<br />6. Mark Geduldig-Yatrofsky, 2713 Sterling Point Drive, spoke in support of the
<br />$153,000,000 portion of the Obligation Bonds, and spoke in opposition to the portion
<br />to fund the offset.
<br />7. Pat Simons, 801 Mimosa Road, asked the Council, in the future, to take care of
<br />responsibilities within the city before spending any money.
<br />8. Russell Bailey, 404 Park Manor Road, thanked the City Manager and staff and spoke
<br />in support of this item.
<br />Motion by Mr. Moody, and seconded by Ms. Psimas, to change order of
<br />business, to consider item 13-187 of the City Manager's Report, and was adopted by
<br />the following vote:
<br />Ayes: Cherry, Edmonds, Meeks, Moody, Psimas, Randall, Wright
<br />Nays: None
<br />13-187- Adoption of an ordinance authorizing the issuance and sale of City of
<br />Portsmouth, Virginia General Obligation Pension Obligation bonds in an
<br />aggregate principal amount not to exceed $175,000,000. Vision Principle:
<br />Efficient, Responsive Government.
<br />Background:
<br />• At the January 8, 2013 Council Work Session, City staff briefed Council on the
<br />financial status of the City's two closed pension plans. All pension plans have two basic
<br />components: assets, which is essentially available cash in the plan, and liabilities,
<br />which consist of the retirement benefits that we pay. These two components must be
<br />in equilibrium for current and future benefit payments. For every $1 in liability, we
<br />should have $1 of assets. Instead, the City's two closed pension plans have 28 cents
<br />and 32 cents of assets per dollar of liability, respectively. The City has consistently
<br />funded the Annual Required Contribution (ARC), but that amount has not been sufficient
<br />to increase the funding levels of the plans.
<br />• There are essentially two problems affecting the fiscal viability of the plans:
<br />insufficient cash flow and assets that have deteriorated to the point where one bad year
<br />of investment losses could jeopardize the solvency of the plans. It will take $150 million
<br />just to get the plans to 80 cents of assets per dollar of liability, but that would be a
<br />significant improvement and would bring the funded status of the plans to an acceptable
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