Minutes 09/28/1999 - Laserfiche WebLink

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September 28, 1999 WHEREAS, the Council (the "Council") of the City of Portsmouth, Virginia (the "City"), has determined that it is necessary to finance public school building renovation, rehabilitation and repair and public school equipment acquisition projects constituting a portion of 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 $5,950,764.00 and to issue general obligation bonds of the City to provide funds 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 (1950), as amended (the "Virginia Code"); and WHEREAS, the federal Taxpayer Relief Act of 1997 added a new section, Section 1397E, to the Internal Revenue Code of 1986, as amended (the "Tax Code"), to authorize a new 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, as set forth in Resolution R-99-34, entitled "A RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF QUALIFIED ZONE ACADEMY BONDS," adopted by the Council on May 25, 1999 (the "Initial QZAB Resolution"), the Council has found and determined that the QZAB program presents a unique opportunity to secure Iow-cost financing for certain public schools in the City and that it is advisable (i) for the City to incur debt and to issue general obligation QZABs, and (ii) to take such actions as may be necessary or desirable to the issuance of valid QZABs under Section 1397E of the Tax Code and Virginia law; and WHEREAS, in addition to the $4,950,764.00 in Virginia's QZAB issuing capacity already reserved for the City by the Virginia Secretary of Education (the "Secretary") as reflected in the Initial QZAB Resolution, the Superintendent of Portsmouth City Schools reasonably expects that the Secretary will reserve up to an additional $1,000,000.00 in Virginia's QZAB issuing capacity to be allocated to QZABs to be issued by the City; and WHEREAS, Council desires to amend the Initial QZAB Resolution to reflect the additional allocation of QZAB issuing capacity to the City; and WHEREAS, as authorized by the First Resolution, the City Manager issued a request for proposals for the purchase of QZABs to be issued by the City and the proposal of Wachovia Bank, National Association ("Wachovia") was selected; and WHEREAS, the foregoing arrangements will be reflected in the following documents, forms of which have been filed with the City's official records: (i) a general obligation QZAB of the City; (ii) the Commitment Letter of Wachovia (the "Commitment Letter"); (iii) the Funding Agreement between the City and Wachovia, and its successors and assigns (the "Funding Agreement"); and (iv) the Tax Compliance Agreement of the City and the Portsmouth School Board (the "School Board") (the "Tax Compliance Agreement"); NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Portsmouth, Virginia: The Council hereby determines that it is advisable to contract a debt and to issue and sell general obligation QZABs of the City in an original aggregate principal amount not to exceed $5,950,764.00. The issuance and sale of the general obligation QZABs in one or more series from time to time in accordance with the terms of this resolution are authorized. Each series of the general obligation QZABs shall be styled "City of Portsmouth, Virginia, General Obligation Qualified Zone Academy Bonds," with an appropriate series designation. All such general obligation QZABs shall be referred to below as the "Bonds." The proceeds from the issuance and sale of the Bonds shall be used to pay all or a portion of the costs of the School Projects.