Minutes 08/23/2016 - Laserfiche WebLink

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August 23, 2016 ST “ORDINANCE TO APPROPRIATE $522,141 OF TITLE IV, PART B, 21 CENTURY COMMUNITY LEARNING CENTERS GRANT FUNDING FROM THE VIRGINIA DEPARTMENT OF EDUCATION TO THE FY 2017 GRANT FUND BUDGET FOR THE PORTSMOUTH PUBLIC SCHOOLS, WITH $441,633 OF SAID AMOUNT APPROPRIATED IN THE INSTRUCTION CLASSIFICATION, $5,748 IN THE ADMINISTRATION, ATTENDANCE & HEALTH CLASSIFICATION, AND $74,760 IN THE PUPIL TRANSPORTATION CLASSIFICATION.” Ayes: Cherry, Edmonds, Moody, Psimas, Whitaker, Wright Nays: None 16 - 271 - Adoption of a resolution authorizing the issuance of up to $6,143,000 in City of Portsmouth, Virginia General Obligation Qualified Zone Academy Bonds and setting forth the form, details and provisions for the payment thereof. Vision Principle: Efficient Service Delivery. Background:  The Federal Taxpayer Relief Act of 1997 first authorized the use of a debt instrument known as a qualified zone academy bond (QZAB), which provides low cost borrowing for certain school construction projects. The city has used this type of borrowing previously for school projects in 1999 and 2001.  Adoption of this resolution is necessary for the city and PPS to apply formally to the state for an allocation of QZAB cap authority. Subject to approval of the final application, the state has reserved $6,143,000 of bond authority for use by Portsmouth.  The School Board passed a resolution on August 6, 2016 approving the use of QZABs and requesting City Council to issue QZABs (Attachment A). Discussion:  Portsmouth meets or will meet all of the eligibility criteria for QZAB issuance.  Federal code defines “qualified zone academy” as any public school (or academic program within a public school) ….if (1) such public school or program (as the case may be) is designed in cooperation with business to enhance the academic curriculum, increase graduation and employment rates, and better prepare students for the rigors of college and increasingly complex workforce and … (ii) there is reasonable expectation (as of the date of the bond issuance) that at least 35% of the students will be eligible for free or reduced cost lunches under the National School Lunch Act. The K-12 Portsmouth Public Schools were collectively identified as a Qualified Zone Academy for the 2001 QZAB issuance, and the list of schools has been updated by the August 6 PPS Resolution.  All of the bond proceeds must be used for a qualified purpose such as rehabilitating or repairing of a public school facility, or providing equipment, course materials, or teachers’ training for eligible schools.  The Portsmouth Public Schools must provide proof that a “private entity qualified contribution” has been secured. This means that private businesses or entities must commit to provide, over the term of the bonds, a contribution equal at least 10 percent of the gross proceeds of the QZAB (i.e. $643,100 over approximately 15 years). Eligible contributions include equipment, technical assistance in developing curriculum or training teachers, volunteer mentorship, internships, field trips or other educational opportunities, or other eligible property (including cash) or services. PPS has obtained this assurance from STARBASE Victory and the Portsmouth Schools Foundation.  The city must obtain assurance that a qualified buyer is willing to purchase the bonds. Davenport & Company is assisting to provide this assurance. Financial Impact  QZABs will be a general obligation of the City. The repayment period is expected to be fifteen but may be up to thirty-one years.  The issuance of the bonds for school construction projects will be considered an “advance” of future CIP authorizations for projects begun in FY2017 which have additional appropriation requests for FY2018 on the 5-Year Capital Improvements Plan.  Ten percent of project costs must be encumbered within six months of bond issuance. All project costs must be spent within three years of bond issuance.