AGENDA DATE: 6/3/2020
TITLE:
Title
Albemarle County Capital Line of Credit
BODY
SUBJECT/PROPOSAL/REQUEST: Resolution approving a Line of Credit in order to finance certain public facilities and equipment projects prior to the issuance of long-term financing. This Line of Credit would be issued using a revenue note structure issued through the Economic Development Authority of Albemarle County.
ITEM TYPE: Regular Action Item
STAFF CONTACT(S): Richardson, Kamptner, Letteri, Shifflett K, Greene
PRESENTER (S): Davenport & Company, Financial Advisors
LEGAL REVIEW: Yes
REVIEWED BY: Jeffrey B. Richardson
BACKGROUND: Borrowed proceeds represents the major funding source for the county's capital improvement program. As projects are approved, the Board simultaneously approves a "borrowing resolution", allowing staff to secure debt in connection with the project when needed.
Over the years, staff has employed a number of options for securing debt proceeds, including Lease/Revenue bonds issued through the EDA, direct bank placement loans, Virginia Public Schools Association (VPSA) pooled financing, and bonds issued through public referendum. The timing of when debt is incurred is important to ensure sufficient liquidity, adequate fund balances, and to avoid unnecessary interest costs. In recent years, staff has developed more sophisticated modeling techniques, to include the incorporation of spend plans, to better predict the timing of when debt should be incurred. To the extent possible, we have also applied available county funds to support projects, particularly in the early phases of the project.
Other factors can impact the timing of when debt is issued. Delays or interruptions in the execution of projects, volatility in the bond market or interest rate environment, and availability of county cash resources, to name a few.
Establishing a Capital Line of Credit is another widely used best practice to deal with the volatility and unce...
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