Minutes 10/24/2017 - Laserfiche WebLink

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October 24, 2017 WHEREAS, the City Council (the "Council") of the City of Portsmouth, Virginia (the "City"), has determined that it is necessary to finance the costs of the rehabilitation and repair of, and the provision of equipment for, certain public schools in the City (the "School Projects"), and that it is necessary and expedient to borrow up to $4,117,195 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: (a) 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 (b) 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 (c) A requirement that the eligible local education agency specify the type and quality of contributions from private entities acceptable to be counted as "qualified contributions" for purposes of the private business contribution requirement; and WHEREAS, for purposes of this resolution: The term "qualified purpose" means, with respect to any qualified zone academy, (i) rehabilitating or repairing the public school facility in which the academy is established, and (ii) providing equipment for use at such academy. The term "qualified zone academy" means any public school (or academic program within a public school) that is established by and operated under the supervision of an eligible local education agency to provide education or training below the post-secondary level if: (i) 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 the increasingly complex workforce; (ii) students in such public school or program (as the case may be) will be subject to the same academic standards and assessments as other students educated by the eligible local education agency; (iii) the comprehensive education plan of such public school or program is approved by the eligible local education agency; and (iv) such public school is located in an empowerment zone or enterprise community or a certain percentage of the students attending such school or participating in such program (as the case may be) will be eligible for free or reduced-costs lunches under the school lunch program established under the National School Lunch Act.