City Council Regular Meeting
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New Business   Item #: D.
Ordinance Authorizing Use of Fiscal Year 2022 Debt Capacity
The City's Charter grants the ability to issue bonds, within a specified annual limit, without a referendum. Each year's bond capacity may carry forward to the next fiscal year, if the authorization is granted by Council prior to June 30. Approving the attached Ordinance does not allow the City to issue debt, it only reserves the capacity to issue debt based on the Fiscal Year 2022 legal limits for issuing debt without a referendum. This capacity is only available from now until the end of the subsequent fiscal year (June 30, 2023). Council would need to approve a Resolution for the issuance or refunding of debt before the City can actually issue debt. A separate Resolution will be presented at a future meeting for approval in order to issue new bonds to finance the FY 2022 Capital Improvement Plan in accordance with Council's adopted budget for FY 2022.
The City's Charter grants the ability to issue up to $6,000,000 principal amount of bonds to finance any capital expenditures other than expenditures relating to the City's water, sewer, gas, and/or electric systems. Further, the Charter grants authority to issue up to $10,000,000 principal amount of bonds to finance capital expenditures related to the City's water, sewer, gas, and electrical systems, or other specific undertakings from which a revenue may be derived. The Charter also allows an additional $25,000,000 in principal amount of bonds to be issued to finance capital expenditure relating to the City's water treatment, wastewater treatment, stormwater treatment, solid waste disposal, or recycling facilities, and any extraordinary maintenance improvements or expansion of transmission and distribution infrastructure for the electric or gas systems. Each of the amounts may be authorized annually without referendum and may carry forward one fiscal year, if authorized prior to June 30.
The Fiscal Year 2022 budget for capital projects includes potential bond financing of approximately $8.9 million of general governmental projects. The passing of this Ordinance will allow access to the borrowing capacity needed to finance these approved projects, but does not actually authorize the issuance of the bonds. A separate Resolution to authorize bonds will need to be approved in order to issue the debt.
It is recommended City Council approve the attached Ordinance authorizing utilization of the City's Fiscal Year 2022 borrowing capacity to issue General Obligation bonds of the City of Danville, Virginia, in the maximum principal amount of $6,000,000, pursuant to Section 9-7A of the City Charter, as well as a maximum amount of $10,000,000, pursuant to Section 9-7D of the City Charter.
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