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September 10, 2009

Contact: Dana Woodson - 757.393.8641


Portsmouth Allocated $18 M in Stimulus Bonds
For a New Simonsdale Elementary School

Portsmouth, VA -- Chief Financial Officer Betty Burrell announces that the City of Portsmouth was notified today that Governor Timothy M. Kaine has allocated $18 million of no-interest Qualified School Construction Bonds to the City of Portsmouth for the Simonsdale Elementary School Project. The no-interest bonds, established by the American Recovery and Reinvestment Act, are available to localities for K-12 school construction, renovation, and land acquisition for schools.

“This announcement is great news for Portsmouth. The $18 million allocation in Economic Stimulus Funds for a new Simonsdale Elementary School is like a ‘once-in-a-lifetime’ opportunity since we will not be required to pay any interest. This will amount to a tremendous savings for the City of Portsmouth, Portsmouth Public Schools, and our citizens.

In order to prudently structure the financing schedule, Portsmouth is working with financial advisors, Davenport and Company, and bond counsel, McGuire Woods. The goal is to determine how debt service payments for Simonsdale can be structured to allow for minimal debt service payments for the first six years, with larger debt service payments in later years.

“Structuring the debt in this manner should preserve Portsmouth’s current bond rating and ensure that the City has the ability to meet its 12% debt service-to-revenue policy and minimize the cash flow burden required for the debt service payments,” said Burrell.

Davenport and McGuire Woods will be in communication with the Virginia Public Schools Authority (VPSA), the entity that will issue the bonds on behalf of the participating jurisdictions. VPSA will make the determination on the repayment schedule that the City of Portsmouth proposes.

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