Norfolk's Energy Conservation Bonds & Tax Revenue

The amount isn’t much – just $2.47 million, a miniscule amount of debt the city plans to issue soon to finance various citywide projects and the refinancing of bonds with higher interest rates.

In total, the Norfolk plans to issue $229.61 million in debt (figures are rounded) before the end of the year.

Just recently, Wall Street’s ratings agencies – Moody’s and Fitch -- blessed Norfolk’s bond rating with an AA+, respectively. Standard & Poor’s gave Norfolk’s debt an Aa2 rating.

This is impressive. It means Norfolk’s borrowing will be lower than if the ratings were lower. City officials crowed about these ratings in prepared statements recently.  

Norfolk will issue the bonds in three series: 2013A, 2013B and 2013C; the third issuance is the qualified energy conservation bond.

Norfolk will use proceeds from the 2013A and 2013C bonds for citywide projects, to buy property and to construct and renovate Crossroads Elementary School, an official statement said.

 The Energy Improvement and Extension Act of 2008, enacted in October 2008, authorized the issuance of Qualified Energy Conservation Bonds that may be used by state, local and tribal governments to finance certain types of energy projects, according to DSIRE, the Database for State Incentives for Renewables and Efficiency.

The October 2008 enabling legislation set a limit of $800 million on the volume of energy conservation tax credit bonds that may be issued by state and local governments, the online portal said. The American Recovery and Reinvestment Act of 2009, enacted in February 2009, expanded the allowable bond volume to $3.2 billion.

 Norfolk has pledged tax revenues and fees as collateral for payment of the principal and interest of the bonds.

Norfolk can pay.

Norfolk collected total revenue of $657 million for 2013, up from $509.9 million for fiscal year 2003.

Property taxes, the bulk of Norfolk’s treasure chest, reached $252.9 million for fiscal year 2013, up from $168.9 million for fiscal year 2003, a 50 percent increase.