Sale allows city to save more than $41 million in additional interest costs over next 20 years; reduces payment period for new school construction by five years

Follows reaffirmed AA+ bond rating by Fitch and Standard & Poors, Aa1 rating by Moody’s   

Based on a competitive bidding process finalized on November 19, on December 10, 2020, the City of Richmond will close on its $103.5 million tax-exempt General Obligation (GO) Bonds, Series 2020A in order to issue new debt for city and schools projects, and its $51.6 million taxable Series 2020B bonds to refund existing debt service for interest rate savings.
 
Through the tax-exempt bond sale, the city is avoiding about $41.6 million in additional interest payments over the next 20 years compared to previous borrowing assumptions.
 
The overall true interest cost of funds for the city’s 2020A Bonds was approximately 1.42 percent, which is the lowest cost of long-term GO bonds for city and schools projects in the city’s history, other than federally-subsidized Build America bonds issued many years ago.
 
The bond sale follows the city administration’s virtual meetings with all three credit rating agencies, and then the affirmation of the city’s strong bond ratings from each firm attesting to strong financial management. Fitch and S&P reaffirmed their strong ratings on the city’s 2020 GO Bonds at AA+, while Moody’s listed the city as Aa1, consistent with a recent upgrade. 
 
The city’s FY2021 general fund debt service budget presumed 4.0 percent interest on the $50 million portion of the bonds for City CIP projects. Based on the 1.42 percent pricing, the debt service expenses over the next 20 years is estimated to be $15.4 million less than it would be at 4.0 percent.
 
In terms of funding for the recently completed three new schools, $60 million (the remainder of the $150 million plan for Richmond Public Schools) is now locked in for 20 years. That portion will be paid off in 2041, rather than in 2046, per previous projections that also presumed a 5 percent long term rate. To provide some context for cost avoidance, debt service for $60 million over 20 years is $26.2 million less at the 1.42 percent interest rate, compared to 5 percent. This cost avoidance will alleviate long term pressure on the 1.5 percent meals tax levy that has been dedicated to fund the three new schools and has been negatively impacted by COVID-19.
 
The refunding components of the 2020 bonds will result in over $5 million in debt service savings over the next 15 years.
 
“These savings will allow us to pay off debt from the construction of three news schools early and be better prepared to fund future city- and school-related capital projects,” said Mayor Stoney. “The strong credit ratings demonstrate Wall Street’s confidence in the city and its financial management.”
 
Lenora Reid, Acting Chief Administrative Officer, added, “Selling these bonds at remarkably low rates really helps position the city well for our capital spending and will benefit our citizens for many years to come.”

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Click here for application materials 

Applications for the city’s General Fund non-departmental grants, which go to local organizations to fund community-oriented programming, are now available on the city website.
 
Eligible organizations may apply for the city to fund specific programming in three key priority areas: children, youth and education; housing, human services and health; and the arts and culture. Additionally, this application continues to be the form for all quasi-governmental organizations to apply for city funding.
 
This is a one-year funding opportunity for non-profits and public sector organizations working on a grassroots level to promote equity in the City of Richmond.
 
A virtual informational workshop will be held in early December to assist applicants with completing their materials. Information on that opportunity will be available on the same webpage as the application materials, here.
 
All proposal materials are due by 4 p.m. on Friday, December 18, 2020. Late submissions will not be accepted. Applicants should read guidelines carefully, as some materials have changed since last year’s application process.
 
Application materials should be submitted via email at BudgetNDRequests@richmondgov.com. If the applicant is not able to submit materials via email, an in-person drop box will be accessible on the first floor of City Hall from 8 a.m. to 4 p.m. December 16-18.
 
Applicants with questions should contact the Office of the Deputy Chief Administrative Officer for Human Services at 804-646-3096.

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The Task Force to Reimagine Public Safety today publicized its final recommendations to the Stoney administration.
 
Click here to read the report.
 
The final recommendations come after the task force met twice monthly for three months. The task force’s three subgroups met weekly throughout that time.
 
Statement from Mayor Stoney:
 
“I’m mindful and appreciative of the emphasis the task force placed on equity and restorative justice throughout the process. The report is firmly rooted both in those shared values and an acknowledgement of the difficulty of changemaking on a large, permanent scale. 

“My administration is committed to starting the necessary work to turn these recommendations into the policies, procedures and practices required to make this a safer city for each and every resident.
 
“Building the long-term, innovative, equitable public safety infrastructure envisioned in this report will take sustained effort, community engagement and education, but I have full faith that this community will come to the table to realize this vision.”
 
Statement from Chief of Police Gerald Smith:
 
“Maya Angelou said, “When you know better, do better.” And that’s what Richmond Police wants to be for the residents of Richmond. We want to be better.
 
“Our recent Advanced GOLD Standard Reaccreditation for Law Enforcement Agencies proves Richmond Police is very good when it comes to consistent policies and management practices and provides accountability through checks and balances on all levels of the agency. However, the input of the task force, the voice of the community, is vital to ensure that our work is implemented in the way our community needs and expects.
 
“We look forward to thoroughly evaluating these recommendations to enhance current practices and reimagine public safety with the community.”
 
Statement from DCAO for Human Services Reggie Gordon:
 
“Over the past several months, I have heard many community members, and members of RPD, state that the best solutions for a way forward require an expansion of the role of human services in public safety. This report aligns with that perspective. I look forward to putting these ideas into action.”

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Click here for the real-time data for 2020 Election Results from Richmond General Registrar. 

The City of Richmond will be closed on Tuesday, November 3, 2020 to allow city employees ample time to vote and care for their families, many of which include children who will have the day off from school.

While city offices will be closed, city-owned buildings hosting polling locations will be accessible during voting hours.

For more information visit RVA.gov