title
To provide for the issuance of public utility revenue refunding bonds of the City of Richmond, Virginia, in the maximum aggregate principal amount of $225,000,000 to refund all or portions of certain public utility revenue bonds previously issued by the City, and to authorize the Director of Finance, with the approval of the Chief Administrative Officer, for and on behalf of the City, to sell such refunding bonds for such purpose, to provide for the form, details and payment of such bonds, to approve the form of supplemental indenture of trust, and to authorize the issuance of such bonds as either federally tax-exempt or federally taxable bonds, or both.
body
WHEREAS, the Public Finance Act of 1991, Sections 15.2-2600 et seq. of the Code of Virginia of 1950, as amended (the “Public Finance Act”), permits the issuance of bonds at one time or from time to time, in order to finance the cost of capital improvement projects for the City of Richmond, Virginia’s gas, water and wastewater utilities systems (collectively, the “System”) and to refund bonds previously issued for such purposes; and
WHEREAS, the City of Richmond, Virginia (the “City”), previously issued its Public Utility Revenue Refunding Bond, Series 2026A (the “2026A Bond”), in the original principal amount of $209,705,000, pursuant to a resolution duly adopted by the Council of the City (the “Council”); and
WHEREAS, the City may achieve debt service savings by refunding all or a portion of the outstanding 2026A Bond (such refunded portion, the “Refunded Bond”); and
WHEREAS, the City administration, in consultation with the City’s financial advisor, has recommended to the Council that the City issue and sell one or more series of its public utility revenue refunding bonds to refund the Refunded Bond, to fund any necessary or desirable reserve funds and to pay the related costs of issuance and refunding; and
WHEREAS, the Council desires to delegate to the Director of Finance of the City (the “Director of Finance”), with the approval of the Chief Administrative Officer of the City (the “Chief Administrative Officer”), the authority to determine the principal amount of the outstanding 2026A Bond, if any, that will constitute the Refunded Bond; and
WHEREAS, the Council desires to provide that all or a portion of the public utility revenue refunding bonds may be issued as taxable bonds (the “Taxable Bonds”); and
WHEREAS, it is the consensus of the Council that the City should provide for the issuance and sale of either tax-exempt or taxable public utility revenue refunding bonds, or both, in the maximum aggregate principal amount of $225,000,000 (the “Bonds”) to refund the Refunded Bond, to fund any necessary or desirable reserve funds and to pay the related costs of issuance and refunding; and
WHEREAS, such Bonds are to be issued pursuant to a supplement to the Master Indenture of Trust dated as of April 1, 1998, between the City and U.S. Bank Trust Company, National Association (successor Trustee to U.S. Bank National Association, Crestar Bank and SunTrust Bank), as Trustee, as previously supplemented and amended (the “Master Indenture”); and
WHEREAS, there has been presented to this meeting a draft of a Supplemental Indenture of Trust (the “Supplemental Indenture”) between the City and the Trustee, providing for the issuance, security and form of the Bonds, pursuant to the Master Indenture (together with the Supplemental Indenture, the “Indenture of Trust”);
NOW, THEREFORE,
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF RICHMOND:
§ 1. There shall be issued and sold public utility revenue refunding bonds of the City in the maximum aggregate principal amount of $225,000,000 to refund the Refunded Bond, to fund any necessary or desirable reserve funds and to pay the related costs of issuance and refunding. The Bonds may be issued in one or more series and may be combined with the issuance of other public utility revenue refunding bonds and the issuance of public utility revenue bonds for capital improvements to the System. The Council elects to issue the Bonds under the Indenture of Trust pursuant to the terms of the Public Finance Act and, to the extent required by the Public Finance Act, the Charter of the City (the “Charter”). The Bonds shall be designated “Public Utility Revenue Refunding Bonds” or “Public Utility Revenue Refunding Bonds (Federally Taxable)”, as appropriate, or such other designation as the Director of Finance may deem appropriate. The Bonds shall be secured by Net Revenues (as defined in the Master Indenture) of the System equally and ratably and on a parity basis with the outstanding principal amount of the City’s public utility revenue bonds previously issued and currently outstanding under the Master Indenture and supplements thereto, and any other obligations secured by a senior pledge of such Net Revenues. The Bonds shall be limited obligations of the City, the principal of, premium, if any, and interest on which shall be paid solely from Net Revenues and from other funds that are or may be pledged for such purpose under the Indenture of Trust, and nothing in the Bonds or the Indenture of Trust shall be deemed to create or constitute an indebtedness of or a pledge of the faith and credit of the Commonwealth of Virginia or of any political subdivision thereof, including the City.
§ 2. The Director of Finance, with the approval of the Chief Administrative Officer, is authorized and directed to determine the principal amount of the 2026A Bond, if any, that shall be refunded and to cause to be called for optional redemption such principal amount thereof, to fix the date for redemption of such Refunded Bond and to provide notice thereof, all in accordance with the provisions of such 2026A Bond and the Indenture of Trust. Such determination may be made based upon such level of debt service savings as the Director of Finance deems to be sufficient in her opinion to warrant refunding, provided that the Director of Finance may also determine to refund all or a portion of the outstanding 2026A Bond for the purpose of restructuring debt service payments whether or not any savings is achieved from such restructuring so long as the Director of Finance determines such restructuring will achieve other efficiencies in the management or timing of the servicing of the City’s debt. In connection with the refunding authorized pursuant to this resolution, the Director of Finance is authorized to retain the services of independent consultants to provide verification reports (each a “Verification Agent”) on aspects of the refunding to the extent useful and customary in similar transactions and is further authorized to retain the services of one or more escrow agents (each an “Escrow Agent”) to the extent needed to hold portions of the proceeds of the Bonds and other funds as needed pending their application to refund the Refunded Bond.
§ 3. The Bonds (a) shall be in registered form and (b) shall (i) be designated by title, date and series, (ii) be dated, (iii) be in denominations, (iv) be numbered and (v) bear interest at rates from their date or dates and payable on such dates as provided in the Supplemental Indenture as determined by the Director of Finance, with the approval of the Chief Administrative Officer, but in no event shall the net interest cost of the Bonds exceed the rate of interest herein authorized. The Bonds shall mature as provided in the Supplemental Indenture and subject to the terms of this resolution. Principal, premium, if any, and interest shall be payable in lawful money of the United States of America.
§ 4. (a) The Bonds may be subject to redemption or purchase prior to maturity at the option of the City on or after dates, if any, determined by the Director of Finance, with the approval of the Chief Administrative Officer. The Director of Finance, with the approval of the Chief Administrative Officer, is authorized and directed to approve such optional redemption provisions for the Bonds as such officer or officers determine to be in the best interest of the City.
(b) Any term Bonds may be subject to mandatory sinking fund redemption as determined by the Director of Finance, with the approval of the Chief Administrative Officer.
(c) The City shall provide for the purchase of Bonds in the manner specified in any Bonds subject to purchase as approved by the officers authorized to do so pursuant to this resolution.
§ 5. The Supplemental Indenture in substantially the form attached to this resolution and marked Exhibit A is hereby approved. The Director of Finance, with the approval of the Chief Administrative Officer, is hereby authorized to execute the Supplemental Indenture in substantially such form, with such completions, omissions, insertions and changes not inconsistent with this resolution as may be approved by the Director of Finance, whose approval shall be evidenced conclusively by the execution and delivery of the Supplemental Indenture. The Supplemental Indenture shall contain the appropriate designation as to its number as the Director of Finance determines is appropriate to indicate its numerical order among supplemental indentures entered into pursuant to the Master Indenture.
§ 6. The Council hereby approves the following terms of the sale of the Bonds. The Bonds may be sold all at one time or at separate times, in one or more series or otherwise, all as may be determined by the Director of Finance, with the approval of the Chief Administrative Officer. The Bonds shall be sold by competitive bid or by negotiation with one or more underwriters or other purchasers as the Director of Finance may determine pursuant to the Public Finance Act, at such price or prices as the Director of Finance, with the approval of the Chief Administrative Officer, shall determine to be in the best interest of the City, provided that in no event shall (a) the true interest cost of the Bonds, after taking into account any premium or discount on the Bonds, but excluding credit and/or liquidity enhancement premium, exceed 5%, (b) the sale price of the Bonds to the underwriters, excluding any original issue discount, be less than 97% of the aggregate principal amount thereof, and (c) the final maturity of the Bonds be later than January 15, 2035. The Director of Finance, with the approval of the Chief Administrative Officer, is authorized to negotiate and acquire credit and/or liquidity enhancement for the Bonds or any portion thereof and to acquire a surety bond or other form of insurance to fund any necessary or desirable reserve funds. The Director of Finance, with the approval of the Chief Administrative Officer, is also authorized to enter into contracts with respect to the Bonds, commonly known as interest rate swap agreements, and contracts providing for payments based on levels of, or changes in, interest rates, or for the purpose of placing the Bonds on the interest rate, cash flow or other basis desired by such officers, provided that the form of such contract or arrangement shall have been previously approved by resolution or resolutions hereafter adopted by the Council. These contracts or arrangements may be entered into by the Director of Finance, with the approval of the Chief Administrative Officer, in connection with, or incidental to, entering into, or maintaining any (x) agreement which secures bonds or (y) investment, or contract providing for investment, otherwise authorized by law. These contracts and arrangements may contain such payment, security, default, remedy, and other terms and conditions as determined by the Director of Finance, with the approval of the Chief Administrative Officer, after giving due consideration to the creditworthiness of the counterparty or other obligated party, including any rating by any nationally recognized rating agency, and any other criteria as may be appropriate. This resolution is intended to grant to the Director of Finance and the Chief Administrative Officer full and complete authority to finalize the terms of the Bonds and provide for their issuance under the Indenture of Trust and the sale thereof and to execute and deliver any and all documentation in connection therewith without further approval by the Council, unless otherwise required in connection with any refunding, consistent with the requirements of this resolution, the Public Finance Act, the Charter and the Constitution and other laws of the Commonwealth of Virginia. If the Bonds are sold by negotiation, the Director of Finance is authorized to negotiate, execute and deliver a bond purchase agreement with the underwriters or other purchasers of the Bonds, a copy of which shall be filed with the City Clerk. If the Bonds are sold by competitive bid, the Director of Finance shall file a certificate following the award of the Bonds setting forth the final terms of the Bonds with the City Clerk. If the Bonds are sold to the Virginia Resources Authority, the Director of Finance is authorized to negotiate, execute and deliver a financing agreement or local bond sale and financing agreement with the Virginia Resources Authority, a copy of which shall be filed with the City Clerk. In connection with the obtaining of any credit and/or liquidity enhancement, surety bond or other form of insurance, interest rate swap or similar agreements, the Director of Finance, with the approval of the Chief Administrative Officer, is authorized to include in the borrowing the cost of obtaining such credit and/or liquidity enhancement, interest rate swap or similar agreements. The actions of the Director of Finance in selling the Bonds, together with the approval of the Chief Administrative Officer, shall be conclusive, and no further action shall be necessary on the part of the Council.
§ 7. The Chief Administrative Officer, the Director of Finance and the City Clerk are authorized and directed to take all proper steps to have the Bonds prepared, executed and authenticated in accordance with the terms of the Indenture of Trust and to deliver the Bonds to or for the account of the purchasers thereof upon payment therefor. The Bonds shall be signed by the manual signatures of the Chief Administrative Officer and the Director of Finance, and the City’s seal shall be affixed to the Bonds and attested by the manual signature of the City Clerk.
§ 8. The Chief Administrative Officer and the Director of Finance are authorized and directed to have prepared and distributed, in accordance with standard practices for municipal securities, one or more Preliminary Official Statements of the City describing the Bonds as authorized herein, the security therefor, and providing any other pertinent or relevant information. The Director of Finance shall make such completions, omissions, insertions and changes in such Preliminary Official Statement not inconsistent with this resolution as are necessary or desirable to complete it as a final Official Statement. The City shall arrange for the delivery to the purchasers of the Bonds of a reasonable number of copies of the final Official Statement, within seven business days after the date the Bonds have been awarded, for delivery to each potential investor requesting a copy of the final Official Statement and to each person to whom such underwriter or bidder and members of the underwriting or bidding group initially sell Bonds. The Bonds may be described in a Preliminary Official Statement and a final Official Statement that combine the issuance of the Bonds with the issuance of other obligations of the City.
§ 9. The Director of Finance is authorized, on behalf of the City, to deem such Preliminary Official Statement and such Official Statement in final form, each to be final as of its date within the meaning of Rule 15c2-12 (the “Rule”) of the Securities and Exchange Commission (the “SEC”), except for the omission from such Preliminary Official Statement of certain pricing and other information permitted to be omitted pursuant to the Rule. The distribution of such Preliminary Official Statement and such Official Statement in final form shall be conclusive evidence that each has been deemed final as of its date by the City, except for the omission from such Preliminary Official Statement of such pricing and other information permitted to be omitted pursuant to the Rule.
§ 10. The City covenants that it shall not take or omit to take any action the taking or omission of which will cause the Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, including regulations issued pursuant thereto (the “Code”), or otherwise cause interest on the Bonds to be includable in the gross income for federal income tax purposes of the registered owners thereof under existing law. Without limiting the generality of the foregoing, the City shall comply with any provision of law that may require the City at any time to rebate to the United States any part of the earnings derived from the investment of the gross proceeds of the Bonds, unless the City receives an opinion of nationally recognized bond counsel that such compliance is not required to prevent interest on the Bonds from being includable in the gross income for federal income tax purposes of the registered owners thereof under existing law. The City shall pay any such required rebate to the United States from its legally available funds. This Section shall not apply to Taxable Bonds.
§ 11. Such officers of the City as may be requested by the City’s bond counsel are authorized and directed to execute appropriate certificates setting forth facts and covenants related to (a) the expected use, expenditure and investment of the proceeds of the Bonds in order to show that such expected use, expenditure and investment will not violate the provisions of Section 148 of the Code and (b) any elections such officers deem desirable regarding rebate of earnings to the United States for purposes of complying with Section 148 of the Code. Such certificates shall be prepared in consultation with the City’s bond counsel, and any such elections shall be made after consultation with bond counsel. This Section shall not apply to Taxable Bonds.
§ 12. The City covenants that it shall not permit the proceeds of the Bonds or the facilities financed with the proceeds of the Bonds to be used in any manner that would result in (a) 5% or more of such proceeds or the facilities refinanced with such proceeds being used in a trade or business carried on by any person other than a governmental unit, as provided in Section 141(b) of the Code, (b) 5% or more of such proceeds or the facilities refinanced with such proceeds being used with respect to any output facility (other than a facility for the furnishing of water), within the meaning of Section 141(b)(4) of the Code, or (c) 5% or more of such proceeds being used directly or indirectly to make or finance loans to any person other than a governmental unit, as provided in Section 141(c) of the Code, provided, however, that if the City receives an opinion of nationally recognized bond counsel that any such covenants need not be complied with to prevent the interest on the Bonds from being includable in the gross income for federal income tax purposes of the registered owners thereof under existing law, the City need not comply with such covenants. This Section shall not apply to Taxable Bonds.
§ 13. The Director of Finance is hereby authorized and directed to execute a continuing disclosure agreement setting forth the annual reports and notices to be filed by the City and containing such covenants as may be necessary to assist the underwriters for the Bonds in complying with the provisions of the Rule. Such continuing disclosure agreement shall be in the form approved by the Director of Finance, in collaboration with the City Attorney and the City’s bond counsel, the execution thereof by the Director of Finance to constitute conclusive evidence of the Director of Finance’s approval of such continuing disclosure agreement.
§ 14. The Director of Finance is authorized and directed to execute one or more escrow deposit agreements (the “Escrow Agreement'”) between the City and the Escrow Agent providing for the deposit and investment of a portion of the Bond proceeds, together with other funds to the extent needed and available for such purpose, for the refunding of the Refunded Bond, provided that any such escrow arrangements may be addressed in the Supplemental Indenture in lieu of an Escrow Agreement. The Escrow Agreement shall be approved by the Director of Finance and approved as to form by the City Attorney. The execution thereof by the Director of Finance shall constitute conclusive evidence of the Director of Finance’s approval of such agreement. The Escrow Agreement shall provide for the irrevocable deposit of a portion of the Bond proceeds thereunder, together with other funds to the extent needed and available for such purpose, which shall be sufficient, when invested in obligations that are permissible investments for public sinking funds pursuant to Section 2.2-4500 of the Code of Virginia of l 950, as amended, together with interest earnings thereon, to provide for payment of principal of and premium or breakage fee, if any, and interest on the Refunded Bond being redeemed or paid at maturity.
§ 15. All other actions of officers of the City in conformity with the purposes and intent of this resolution and in furtherance of the issuance and sale of the Bonds and the refunding of the Refunded Bond are approved and confirmed. The officers of the City are authorized and directed to execute and deliver all such other agreements, certificates and instruments and to take all such further action as may be considered necessary or desirable in connection with the issuance, sale and delivery of the Bonds and the refunding of the Refunded Bond, including entering into contracts and arrangements to provide credit and/or liquidity enhancement or insurance for all or a portion of the Bonds and for the investment of the proceeds of the Bonds. The authorization granted herein to the Director of Finance, the Chief Administrative Officer and the City Attorney shall apply equally to any person serving in such capacity on an interim or acting basis pending a permanent appointment to any such office.
§ 16. The City Clerk, with the assistance of the City Attorney, is authorized and directed to see to the immediate filing of a certified copy of this resolution in the Circuit Court of the City of Richmond and is directed to make a copy of this resolution continuously available for inspection by the general public during normal business hours at the City Clerk's office from the date of adoption hereof through the date(s) of the issuance of the Bonds.
§ 17. This resolution shall be in force and effect upon adoption, and any and all resolutions in conflict with the provisions hereof are repealed.
DATE: March 24, 2026 EDITION: 1
TO: The Honorable Members of City Council
THROUGH: The Honorable Dr. Danny Avula, Mayor
THROUGH: Odie Donald II, Chief Administrative Officer
THROUGH: Tanikia Jackson, DCAO Finance and Administration
THROUGH: Al Wiggins, DCAO Operations
THROUGH: Scott Morris, Director of Public Utilities
THROUGH: Meghan Brown, Director of Budget
FROM: Letitia Shelton, Director of Finance
RE: Authorization for the issuance of Utility Revenue Refunding Bonds of the City of Richmond to achieve debt service savings
ORD. OR RES. No.
PURPOSE:
This request is to authorize the issuance of Utility Revenue Refunding Bonds of the City of Richmond, Virginia in a principal amount not to exceed $225 million to refund all or portions of the principal maturities of the outstanding Series 2026A Public Utility Revenue and Refunding Bonds previously issued by the City, and to authorize the Director of Finance, with the approval of the Chief Administrative Officer, to sell such refunding bonds. The new refunding bonds will carry similar principal maturities as the old bonds, and thus, will not extend final maturity of this debt.
BACKGROUND:
In the fall of 2023, the City advance refunded the taxable Utility Revenue Refunding 2016A bonds by issuing the 2023B series. The 2023B series was slated to convert from taxable to tax-exempt bonds in January 2026 thereby becoming the Utility Revenue Refunding 2026A tax-exempt series. Based on current market interest rates and analysis, Finance Department staff and our Financial Advisors have identified the Utility Revenue Refunding 2026A tax-exempt series as potential candidates for refunding to enable the City to achieve debt service savings. The 2026A outstanding bond series is being repaid from the Utility Revenue Fund.
The City is currently planning to issue new Utility Revenue bonds later this spring and being able to include these refunding transactions with a planned new money bond issue, will save the City duplicative legal and other issuance costs, while potentially achieving debt service savings if interest rates remain favorable. The refunding target will be to achieve approximately three percent or greater Net Present Value savings on each bond issue at the time of the refunding. The actual amount of debt service savings to be achieved in the refunding this debt, if any, will be based on the interest rate environment available in May 2026, at the time of the actual refunding bond pricing. This resolution will allow the City’s Director of Finance, with the approval of the CAO, to refund either all, some, or none of the Series 2026A Public Utility Revenue and Refunding Bonds principal maturities, based upon market conditions and the interest rate environment at the time of the bond sale in the spring.
COMMUNITY ENGAGEMENT: None
STRATEGIC INITIATIVES AND OTHER GOVERNMENTAL: None
FISCAL IMPACT:
If current market conditions remain favorable at the time of the proposed bond sale, the refunding would produce debt service savings at or above the approximately three percent Net Present Value targeted threshold, inclusive of all costs of issuance. Based on today’s interest rate environment, achieving 3.0% to 4.0% net present value savings on both bond issues would achieve over $9.0 million in total annual debt service savings over the remaining years maturing in 2035. The actual principal amount of bonds to be refunded, however, and any associated debt service savings, will be determined based on many variables, including the interest rate environment and the supply and demand for bonds at the time of the proposed bond sale. All costs of issuance including underwriting, legal and other expenses have been included in the refunding analysis.
DESIRED EFFECTIVE DATE:
Upon adoption.
REQUESTED INTRODUCTION DATE:
April 13, 2026.
CITY COUNCIL PUBLIC HEARING DATE:
April 27, 2026
REQUESTED AGENDA:
Regular agenda.
RECOMMENDED COUNCIL COMMITTEE:
Finance and Economic Development Committee on April 16, 2026.
AFFECTED AGENCIES:
Department of Finance and City Attorney’s Office.
RELATIONSHIP TO EXISTING ORD. OR RES.: None.
ATTACHMENTS: None
STAFF: Michael Nguyen, Deputy Director of Finance, 646-6993