Minutes 10/24/2017 - Laserfiche WebLink

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October 24, 2017 Discussion:  In order to qualify for the QZAB borrowings certain criteria is needed as listed below. Portsmouth meets or will meet all of the eligibility criteria.  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 school lunch program established under the National School Lunch Act.” The Portsmouth Public Schools identified as a Qualified Zone Academy (QZA) are listed on Attachment A hereto.  All of the bond proceeds must be used for a qualified purpose such as rehabilitating or repairing of a public school facility, providing equipment, course materials, or teachers’ training for eligible schools.  The QZAB allocation requires written approval from City Council and the Portsmouth School Board approving the use of the QZAB’s with a description of the projects to be funded.  The Portsmouth Public Schools must provide proof that a private entity qualified contribution has been secured. This proof should include a signed commitment with one or more businesses or private entities under which the contributor(s) pledge a combined contribution having of at least 10 percent of the gross proceeds of the QZAB or $411,720 over the life of the bond. Eligible contributions include: equipment; technical assistance in developing curriculum or training teachers; services of employees as volunteer mentors; internships, field trips or other educational opportunities; or any other property (including cash) or services specified by the local education agency. The Portsmouth Public Schools has obtained this written assurance from STARBASE Victory, Inc. and the Portsmouth Schools Foundation.  The city must obtain assurance that a financial institution or other qualified buyer is willing to purchase QZAB bonds issued by, or on behalf of, the city of Portsmouth. Davenport & Company, the city’s financial advisor, is assisting to provide this assurance. Financial Impact:  QZABs will be a general obligation of the City. The repayment period for these bonds is expected to be twenty but may be up to thirty-one years.  Ten percent of project costs must be encumbered within six months of bond issuance. All project costs must be spent within a three year timeframe of bond issuance.  As these bonds are low interest, the amount of debt service will be less than that normally paid for 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 projects. Recommended Action:  Conduct a public hearing.  Adoption of the ordinance. 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 Ms. Lucas-Burke, and seconded by Ms. Psimas, to adopt the following resolution, and was adopted by the following vote: “RESOLUTION AUTHORIZING THE ISSUANCE OF UP TO $4,117,195 IN CITY OF PORTSMOUTH, VIRGINIA GENERAL OBLIGATION QUALIFIED ZONE ACADEMY BONDS AND SETTING FORTH THE FORM, DETAILS AND PROVISIONS FOR THE PAYMENT THEREOF.