When

City Council

Special Meeting
Council Chambers
City Hall
Thursday, September 29, 2011
3:00 P.M.

III.
Discussion on Ordinance No. 2011-160
(Patron: Mayor Jones) – To authorize the Chief Administrative Officer, for and on behalf of the City of Richmond, to execute a 2011 Memorandum of Understanding between the City of Richmond and the Richmond Metropolitan Authority for the purpose of accepting a prepayment amount of $60,333,919 in full satisfaction of loans provided by the City of Richmond to the Richmond Metropolitan Authority between 1975 and 1991.

 

 

Thursday, September 29, 2011 4:34 PM

Richmond, VA – In a new development related to the City’s pursuit of monies owed from the Richmond Metropolitan Authority (RMA), the City Administration says it will pursue the full amount owed, rather than the initial arrangement which included an interest rate discount.

In June of this year, Mayor Jones announced a proposal in which the RMA would return funds to the city before the year’s end. The amount owed is more than $60 million. The RMA had originally asked for some interest rate forgiveness and the city introduced a paper for City Council consideration that would have foregone about $2 million in debt. Today the Administration acknowledged that current financial market conditions make it likely that the RMA could repay the entire amount with no discount attached.

“Anticipating favorable action by the RMA Board, I am withdrawing Ordinance No. 2011-160,” stated Mayor Jones. “I am hopeful that City Council shares my enthusiasm for not only the early repayment of the debt, but the full repayment of the debt.”

The Mayor has previously said, “As we consider the use of these funds, there are some guidelines I feel we should be governed by. These funds can help to repair some of the issues caused by displacement of families and businesses, and can also help to move us closer to a AAA bond rating. We have the opportunity to invest wisely by taking actions like getting our undesignated fund balance to 10% and paying off some of our own outstanding debt.”

The Administration provided financial data today showing that the return of these funds has no loss in future financial value. The transaction also presents no loss of property rights, and RMA will still transfer the property to the city in the future.

The RMA Board is expected to vote in October.