Minutes 03/28/2000 - Laserfiche WebLink

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March 28, 2000 - City Manager's Report - 00 - 64 - Adoption of a resolution to authorize the issuance of $28 million in General Public Improvement ($8 million) and Public Utility ($20 million) Bond Anticipation Notes BANs). These bonds have been previously authorized and are being issued in anticipation of a 2001 permanent financing. Recommendation: · Adoption of a resolution to authorize the issuance of $28 million in General Public Improvement ($8 million) and Public Utility ($20 million) Bond Anticipation Notes (BANs). Purpose and Need: · The City has $8.9 million of General Public Improvement Bonds that have been authorized, but not issued. Many of the projects related to this authorization have commenced. As discussed at the Council Retreat in February, a bond issuance is not anticipated until January/February 2001. In order to provide adequate cash flow until the permanent financing is in place, it is necessary to issue BANs in the amount of $8 million. · On July 13, 1999, the City Council approved the rollover of $9.9 million in Public Utility BANs to provide the necessary cash flow for Public Utility capital projects prior to the issuance of bonds, the permanent financing. At the time of the rollover, a 2000 bond issuance was anticipated and therefore the maturity date of the BANs was set for March 31, 2000. Due to the change in our issuance strategy, it is necessary to pay-off these BANs. Rather than roll the BANs with the current holder, Crestar Bank, the $9.9 million plus an additional $10.1 million were bid with the General Public Improvement amount in order to obtain the most competitive rate. The additional $10.1 million in Public Utility BANs is needed to fund the projects planned for the upcoming 12 months. · The new BANs will be scheduled to mature on March 31,2001. The permanent bonds are expected to be sold prior to the 2001 maturity date. Financial Impact: · The FY2001 budget will include a sufficient appropriation to pay the anticipated interest cost at the time of maturity for both the General Public Improvement BANs and the Public Utility BANs. · The issuance of BANs prevents the need to use operating cash for capital projects and protects our operating cash flow. · The Iow interest rate bid on these BANs was 5.78% by First Union. Motion by Mr. Robinett, and seconded by Mr. Moody, to adopt the following resolution, and was adopted by the following vote: "RESOLUTION OF THE COUNCIL OF THE CITY OF PORTSMOUTH, VIRGINIA, AUTHORIZING THE ISSUANCE OF $28,000,000 PRINCIPAL AMOUNT OF CITY OF PORTSMOUTH, VIRGINIA, GENERAL OBLIGATION PUBLIC IMPROVEMENT AND PUBLIC UTILITY BOND ANTICIPATION NOTES FOR THE PURPOSES OF REFINANCING $9,900,000 CITY OF PORTSMOUTH, VIRGINIA, PUBLIC UTILITY BOND ANTICIPATION NOTES DATED AUGUST 16, 1999 AND MATURING ON MARCH 31, 2000, FINANCING THE COSTS OF CAPITAL IMPROVEMENTS, EXTENSIONS AND ADDITIONS TO THE REVENUE-PRODUCING WATER AND SEWER SYSTEM OF THE CITY AND FINANCING THE COSTS OF VARIOUS PUBLIC IMPROVEMENTS PROJECTS IN THE CITY AND APPROVING THE FORM AND OTHER DETAILS THEREOF; AUTHORIZING THE CITY MANAGER AND THE CHIEF FINANCIAL OFFICER TO TAKE ALL ACTIONS AS SHALL BE REQUIRED IN CONNECTION WITH THE ISSUANCE, SALE AND DELIVERY OF SUCH NOTES; AUTHORIZING THE CITY MANAGER TO EXECUTE SUCH NOTES; AND OTHERWISE PROVIDING DETAILS WITH RESPECT TO THE ISSUANCE OF SUCH NOTES.