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July 23, 2019 <br /> <br />Next Steps Following Council Action: <br /> <br /> Balance of July - Update rating agencies / update offering documents. <br /> <br /> By Mid-August - Enter the credit markets and sell 2019 Pension Refunding <br />Bonds. Interest rate locked in if market conditions allow. <br /> <br />Motion by Mr. Clark, and seconded by Ms. Lucas-Burke, to adopt the following <br />resolution, and was adopted by the following vote: <br /> <br />“RESOLUTION DEDICATING ALL SAVINGS REALIZED FROM THE REFINANCING <br />OF THE CITY’S 2013 PENSION OBLIGATION BONDS TO THE PORTSMOUTH <br />SUPPLEMENTAL RETIREMENT SYSTEM AND THE PORTSMOUTH FIRE AND <br />POLICE RETIREMENT SYSTEM FOR THE SOLE PURPOSE OF ENHANCING THE <br />FUNDING STATUS OF THE SYSTEMS. <br /> <br />WHEREAS, <br /> the City of Portsmouth has two closed pension funds, the Portsmouth <br />Supplemental Retirement System (PSRS) and the Portsmouth Fire and Police Retirement <br />System (PFPRS); and <br /> <br />WHEREAS, <br /> in 2013 the City issued nearly $170,000,000 in Pension Obligation <br />Bonds (the POB) to significantly improve the funding status of the PSRS and PFPRS; <br />and <br /> <br />WHEREAS, <br /> while the POB were effective for that purpose, the funding status of <br />the plans has declined since the injection of the bond proceeds in 2013; and <br /> <br />WHEREAS, <br /> market interest rates have fallen significantly since 2013, and the City <br />therefore has an opportunity to refinance a portion of the POB and achieve a savings of <br />several million dollars by issuing refunding bonds; and <br /> <br /> WHEREAS, <br /> by Ordinance 2019-34 adopted on May 28, 2019, City Council <br />authorized the issuance of refunding bonds; and <br /> <br />WHEREAS, <br /> it is anticipated that the refunding bonds will be issued in August of <br />2019; and <br /> <br />WHEREAS, <br /> the savings from the issuance of the refunding bonds will be <br />structured to reduce the City’s FY 2020 debt service payment obligation on the POB, <br />which will make money that was originally budgeted to pay debt service available for a <br />direct contribution to the PSRS and PFPRS; and <br /> <br />WHEREAS, <br /> using the savings realized from the refinancing of the POB to make <br />direct contributions to the PSRS and PFPRS will improve the funding status of the plans; <br />and <br /> <br />WHEREAS, <br /> City Council recognizes that providing adequate funding to meet its <br />pension obligations is critical to the City’s financial health, both from the standpoint of <br />maintaining the City’s present credit rating and from the standpoint of ensuring the City’s <br />future liquidity; <br /> <br />NOW, THEREFORE, BE IT RESOLVED <br /> by the Council of the City of Portsmouth, <br />Virginia, that the City Council hereby commits to use any savings realized from the <br />issuance of FY 2020 refunding bonds to make a direct contribution to the PSRS and the <br />PFPRS for the purpose of enhancing the funding status of the systems, and for no other <br />purpose; and <br /> <br />BE IT FURTHER RESOLVED <br /> that the savings so contributed shall be in addition <br />to, and not in place of, funding already included in the adopted FY 2020 City budget for <br /> <br />said purpose.” <br /> <br />Ayes: Battle, Clark, Glover, Lucas-Burke, Psimas, Rowe <br />Nays: None <br /> <br /> <br /> <br /> <br /> <br />