Minutes 08/23/2016 - Laserfiche WebLink

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August 23, 2016  As these bonds are low interest, the amount of debt service will be less than that normally projected on general obligation bonds. This will have a favorable impact on the city’s goals with respect to debt service as a percent of operating revenues, while accomplishing the same level of debt funding. Recommended Action:  Conduct a Public Hearing of the Ordinance. (Attachment B). Adoption of the ordinance. Vision Principle: Efficient Service Delivery Next Steps Following Council Action:  Staff, Davenport, and the city’s bond counsel will take all required action to facilitate the issuance of the QZAB’s. Motion by Dr. Whitaker, and seconded by Mr. Moody, to adopt the following resolution, and was adopted by the following vote: “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. WHEREAS, the City Council (the “Council”) of the City of Portsmouth, Virginia (the “City”), has determined that it is necessary to finance a portion of the public school building rehabilitation and repair projects in the City’s Long-Term Capital Improvement Program for the Portsmouth Public Schools (the “School Projects”), and that it is necessary and expedient to borrow up to $6,143,000 and to issue general obligation bonds of the City and use the net proceeds thereof to pay the costs of the School Projects; and WHEREAS, a public hearing on the general obligation bonds has been held after notice was published in accordance with the requirements of Section 15.2-2606 of the Code of Virginia of 1950, as amended (the “Virginia Code”); and WHEREAS, Section 54E of the Internal Revenue Code of 1986, as amended (the "Tax Code"), authorizes a type of debt instrument known as a qualified zone academy bond ("QZAB"); and WHEREAS, QZABs are taxable bonds issued by a state or local government the proceeds of which are to be used for qualified purposes with respect to certain eligible public schools; and WHEREAS, Section 54A of the Tax Code provides that an eligible holder of a QZAB will receive a federal income tax credit for each year the QZAB is outstanding in lieu of receiving all or a portion of periodic interest payments from the issuer; and WHEREAS, the federal income tax credits provided by Section 54A of the Tax Code are designed to compensate the QZAB holder for lending money to the issuer and to function as payments of interest on the QZAB, and the intent of the federal tax credits is to permit the QZAB to be issued with little or no stated interest or original issue discount; and WHEREAS, Section 54E of the Tax Code sets forth a number of certification and similar requirements to be satisfied for a valid issuance of QZABs, including, without limitation, the following: (1) A requirement that 100 percent of the available project proceeds of a QZAB issue be used for a qualified purpose with respect to a qualified zone academy established by an eligible local education agency; and (2) A requirement that the QZAB issuer certify that it has written assurances that the private business contribution requirement of Section 54E(b) of the Tax Code will be met with respect to the academy; and