AGENDA DATE: 5/19/2021
TITLE:
Title
Albemarle County Debt Financing - 2021
BODY
SUBJECT/PROPOSAL/REQUEST: Authorize the County to issue Revenue Bonds via the Economic Development Authority of Albemarle County to refinance existing bonds and finance certain School and General Government improvements
ITEM TYPE: Regular Action Item
STAFF CONTACT(S): Richardson, Kamptner, Birch, Greene, Allshouse, Bowman, Mitchell
PRESENTER (S): Nelsie Birch, CFO and Davenport & Co., Financial Advisors
LEGAL REVIEW: Yes
REVIEWED BY: Jeffrey B. Richardson
BACKGROUND: Beginning in Fiscal Year 2009 (FY 09), the County had a practice of issuing debt on an every-other-year basis, using its cash as an interim/temporary source of funding until such time as the next debt was issued. As authorized by the annually adopted reimbursement resolutions, the County reimburses itself from bond proceeds. Between 2010 and 2017, the County issued five Revenue Bonds through the EDA. The County also issued a $30.5 million General Obligation Bond for school projects based on a referendum in FY 17.
In June 2020, the County modified its practice by securing a line of credit to be used, if needed, to temporarily provide funding to meet timing requirements that may occur between debt issuances. According to the County's Financial Advisors, this is a practice being used more and more by local governments because of the uncertainty regarding the timing of when capital projects, which have previously been authorized, are ready to proceed. Too often the funding takes place and the capital funds are left unused, sometimes for extended periods while the project ramp-up takes place, and under current market conditions, the unused funds are invested at rates much lower than the rate of borrowing. To date, the County has not utilized the line of credit to issue short-term debt in large part due to the pandemic and the slowdown of capital projects.
At this time, the County has the opportunity t...
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