AGENDA DATE: 2/1/2017
TITLE:
Title
Albemarle County Debt Financing - 2017 General Obligation School Bonds
BODY
SUBJECT/PROPOSAL/REQUEST: Resolution approving a plan to finance certain school facility projects through the issuance of general obligation school bonds.
ITEM TYPE: Regular Action Item
STAFF CONTACT(S): Walker, Letteri, Kamptner, Burrell
PRESENTER (S): Davenport & Co., Financial Advisors
LEGAL REVIEW: Yes
REVIEWED BY: Douglas C. Walker
BACKGROUND: On July 6, 2016, the Board of Supervisors adopted a resolution authorizing the referendum on $35,000,000 of general obligation (GO) school bonds and requesting the Circuit Court to order a bond referendum. The bond resolution provides for the sale of the bonds within certain parameters and delegates to the County Executive to finalize the sale of the bonds. The qualified voters of the County overwhelmingly supported the bond referendum in the election held on November 8, 2016 to finance various capital improvements for school purposes.
STRATEGIC PLAN: Prioritize, plan, and invest in critical infrastructure that responds to past and future changes and improves the capacity to serve community needs.
DISCUSSION: Qualified voters for Albemarle County decidedly approved a Bond Referendum at an election held on November 8, 2016, thus approving the financing of various capital improvements for school purposes. These GO bonds would be sold through a Public Sale in a maximum aggregate principal amount of $35,000,000. Based on the County's current excellent triple-AAA credit rating, it is expected that the debt would be issued with AAA ratings. Recent Federal Open Market Committee (FOMC) meetings strongly indicate that U.S. interest rates are set to increase in 2017. Therefore, there is risk of higher interest rates if the bonds are not sold now in this near historically low interest rate environment. There are also certain economies of scale gained with respect to offsetting future costs of...
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