HomeMy WebLinkAboutDECEMBER 12, 1973
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Tliis is a very impoi- In@l wc-, liope tllit, Ll,l
Counci.1w,cia will @-iblc,, t@c) l,c,
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I'lic iliciiilcrs of tlie Sl)eci@il J)'oiidiii@', ".011 @@,@IC)II is as follc)k,,S:
@Ir. Wriglit Cli@tii-iiiai) of tlic ]3oard
Virginia Natioilal i@alti,
Mr. (,. Powell I)avis, )'i @;iclc@lit
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REPOP@T ()F SPE@l('C!@l.-I CITY 11, OF
Your C)f tlie pr,,)I,)er
f i n a nc i ng o f n,-! C-@ d c- c f z@ C, @:i, 1-L c, v@:i, t@, C,@ L_@, f V i Z 4
.1- C) _ gl.nia BL@ach,
with particular I,,,-,ing u@)o@-, C-i;.@,.rter cl.-@.ngL@s set-ti'-Ig
bonding li-mit@,-tj City -,egiiJ-atL,(3
the oxisting C:;.ty oi (,ity bc)@d,@ in relati(-.,.n
to its assessct,,@ ,,zilue i-@rue wich (@c,,nsequeriL cffect-lip')I@
the interc,-st r@it L@rid C)4 1-1, .
It is our @l-'E@lillg L the C.!@ ;,s to bc, cor@x,-,era---d for tlie,
progress wbich it h@is iri adi,-)g -L-hc,, riting of
tlie City over tlic past 20 years l@iat 'LL bc- L,,Iviise -,o tz,3-c,
stops ,vhich could concc@i.vz:tl,,Iy be ',-c tlie City' credit r-,il@-ing
and result in a reductioi-i in inves'.@ol confi(l(@nce in obligatic)ns
of tlie City. With ttlic, iii T,.iind, @,-e E r.-e incli.ne,71 to recommend Z'zl
alteriiate to the s--ecoi-,iric,,nJ-ut@ions C)i (,@e ac3.irL@@iiiELrativc,, s-laff whicli,
as we understai-icl i-t, ccu,),@, wit-ti tl- @ ;,aic-l.ioii of the City Council
now or in the fuliire, resilii.t in borrowings on tTi@, part of the
City which could tlie credit r@ ',,ing of tlie City.
Because of tl@- limj-',-a'lions b@,.L;( d up@)n tlie prese-itt City Charter,
it has been necesscnry for the City t@( rE-,ques-@ am(,-ndircnLs to -L-lie
Charter in all recci,.t ses@;ic)ns of tl,( lc@g@LslEiturc,.. It is our
understanding thit c)nl, o t e- i.y in t
11 I c lie State has similar
restri-ctions and we do not feel th,-.t these restrictions are conducive
to sound f inar)cial I)Iaiini-i-jg, ilo-- feel they Fi,,sure present
or future bondholders tihzd-@ thr-, City .iiaii,.L&in its pi.-esent
fin-@inci,-il condi-.'@-ioii@,. Co,i@;cqu(,-nLly, @,ic- rc-cc).m-nend that this policy
be discontinue(@.
In oraer to crc,,,it:c-, aii @.iveniic, fo@ pl.z)nniylg -,inci at the
P@cjo 2
sz-ame ti)iie give @d invc@@;t-or,@ 6f
Virginia T3each t@o tlic-, c)f pic-sent zand -@utut,@--,
qu-,Ility, w,-- @@nat LIL,-3 'l- @l@ -ef C'it@, be j),moiided t:o
all-ow the C4ty to c) sc-11@--
CT 1-
@-upporting indc.@l,',-.c T@rti(21@ V II, Chal3ter X o
tlie Consti-tu'@iori o;- t,.@cici mount
v,'nic2i will not 1-0@Y, of va.ILI@--, nor e.,,.cc@ed 6%
of true valul-, c)f zil'] ),,c!al @i-i Eii,@ iiT,.-.L,@-diate bz,,fis, this
would prov:Lde ari n@&,rc ;.n ol@- $31 million.
As time progresse.@,, @@ol:tld rc.aucing its do-bt
through payinent o:E (-),-i ou-1, I)ond i.,;sues, @ind
presumabl-y, its F@n(l- 1--Le v@i @l,- o@ rcal T)ropertv i,7ould
continue to increase on a colisisi-(-,IIL Llii)@; afford:!.ng the Ci..ty
greater borrowiiig c-,-,pacity to fina@c@ orde-rly qrowth. Howe.,.,er, ill
ordc,.r to j-mpress up@-)p tlie ii-iveFztol- ajlcf 1--lie CC)rl,,iiuiiity th(@ seriousiiess
with which the City gu@irc3s its fir-iLin(,i@-1 cc)noi-@ion, we reco=end
that the amendment '@--o the City Ch,,rt,.t-- al@,o prc)@,7ide that any futiire
requests by the Ci,t--v to a,-,teiid its Cli;@,-te-r in alny itian.ner so as to
allow greater borrowi.ng capacity v@il., prior to sucl) request by the
City to the, Generz,.I. A,.,;cmbly, be zLpi.,i c)vc-,d by m@,jority votc i:,.i a
public referendum. It woi).l@t a,,Dp,,-3ar ',@r@at sucl-i z-n amendment would
resulL in the Citv'- contiiii-i-@Ing tc) s@,it@i-@tically compare favoral)ly
with other "A" and "I@" rate@,' iiiunicill@,,Iit'c.-@ th@oughout the Stato.
Ile think tliat the wr,,,ild bc, fzt,,c)r..-Lbl-y re (@.@t.ved bN7 investors
I
and, hopefully, ',-he rati.ng serv4-coE,, to P- great degree affect
the interest rate..- @).t @,jhj.ch gcner@.1 f7,ell. -.Et should 1-@
noted tliat these a:c@@,tr:@ctio.,i@, j)ore hars!i thin thos@, appl@-(-.,d
to any otlior city Llie StiL(@ C)f r@ting; 110\,,evcr, we
feel -,hat this I,,I@ wc)ii]@i nc)t 1)0 !:)ii": vc@ry
F@trongly underl-j,,i-l@c, lt[,, City,@, t--o @,c)i)nci fin@iiici@il. I)I@i)ning.
,lj
Attached tr) th@-@@ @@-,po@it th-@
effecL. of thc-,
Cii-y rf Vir@,,-*(.-nia maiz rati.o oi- iiet
bonded debt to values @@iid v,@lue, riet bc)iidecl ctl-bt E)er
ca3.:)i-t-a and rzitio 01- copit,-2 1).!,, capi'l-l@l iricome
compared to o',-her c]-Iiies.
The Coiricti-i7.tc@o i@, @.lzrticula-iy to i-ts men-Lber G. Powell
Davis and Iiic; fi=t, T'l,c@ Cor-@@@@-L:@,t-Lon of Virginia, for
their detailed s-tudy o:@--- tlie su@:7h Cliirter changcs may have
on thr@ abilit@,7 of t-1,@@ Cl,:@tty of Vi:,-girj- B,@z@ch to main+--zlin its rating
and thus a favo@lc o, -- nds.
Re.,j,,,Lctfully submitted,
W. lli-ight HZ42:rison, Chair.,nan
G. i'o',qell Davis
SIG@N,El) By
@T-ar,icis Crc)uch
Baray Antliony
C),
I,!PD
Al-fr(@d Craft
At:t-ttiir I).
T'i Ciii I-Lt J @1/2 t,!)!)C)ll
Cit)' of Virj,iiii@l i3c"@icii,
Vir lilia
Dcc(,,iiibey 12, 1973