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19920314 1992-4ORDINANCE NO. 1992-4 AN ORDINANCE AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION SCHOOL BONDS, OF THE CITY OF FAIRFAX, VIRGINIA, 1992, SERIES A IN AN AMOUNT NOT TO EXCEED $1,100,000, TO BE SOLD TO THE VIRGINIA PUBLIC SCHOOL AUTHORITY, AND PROVIDING FOR THE FORM AND DETAILS THEREOF. WHEREAS, there has been filed with the City Council (the "City Council") of the City of Fairfax, Virginia (the "City"), a certified copy of a resolution adopted by the City School Board of the City of Fairfax on March 2, 1992, determining the necessity and desirability of undertaking capital projects for public school purposes, requesting the City Council to adopt an ordinance authorizing the issuance of school bonds of the City in an amount not to exceed $1,100,000, and consenting to the issuance of such bonds; WHEREAS, the city Council has determined that it is necessary and expedient to borrow not to exceed $1,100,000 and to issue its general obligation school bonds for the financing of capital projects for school purposes; WHEREAS, the City Council held a public hearing, duly noticed, on the date hereof, on the issuance of the Bonds, as defined below, in accordance with the requirements of Section 15.1-227.8(A), Code of Virginia of 1950, as amended (the "Virginia Code"); WHEREAS, the Virginia Public School Authority, a state agency prescribed by the General Assembly of Virginia pursuant to Article VII, Section 10(b) of the Constitution of Virginia (the "VPSA"), has offered to purchase the city's school bonds in an amount not to exceed $1,100,000 pursuant to a Bond Sale Agreement with the VPSA (the "Bond Sale Agreement"); NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAIRFAX, VIRGINIA: 1. Authorization of Bonds and Use of Proceeds. The city Council determines that it is advisable to contract a debt and issue and sell general obligation school bonds in an aggregate amount not to exceed $1,100,000 (the "Bonds") for the purpose of financing certain capital projects for school purposes. The city Council authorizes the issuance and sale of the Bonds in the form and upon the terms established pursuant to this Ordinance. The Bonds shall be issued solely pursuant to the Public Finance Act of 1991, Section 15.1-227.1 of the Code of Virginia of 1950, as amended. 2. Sale of Bonds. It is determined to be in the best interest of the City to accept the offer of the VPSA to purchase, and the City to sell to the VPSA, the Bonds at par upon the terms established pursuant to this Ordinance. The Mayor and the City's Director of Finance, or either of them, are authorized and directed to execute the Bond Sale Agreement dated March 25, 1992, with the VPSA providing for the sale of the Bonds to the VPSA in substantially the form submitted to the City Council at this meeting, which form is approved, and deliver it to the VPSA. 3. Details of Bonds. The Bonds shall be issuable in registered form in denominations of $5,000 and whole multiplies thereof; shall be dated the date of issuance and delivery of the Bonds; shall be designated "General Obligation School Bonds, 1992-4 -2- )2 Series A;" shall bear interest payable semi-annually on June 15 and December 15 (each an "Interest Payment Date"), beginning December 15, 1992, at the rate or rates established in accordance with paragraph 4 of this Ordinance; and shall mature on December 15 in the years (each a "Principal Payment Date") and in the amounts, set forth on Schedule I attached hereto (the "Principal Installments"), subject to the provisions of paragraph 4 of this Ordinance. 4. Interest Rates and Principal Installments. The Director of Finance is authorized and directed to accept the interest rate or rates on the Bonds established by the VPSA, provided that no such interest rate shall be more than ten one- hundredths of one percent (0.10%) over the annual rate to be paid by the VPSA for the corresponding maturity of the bonds to be issued by the VPSA (the "VPSA Bonds"), a portion of the proceeds of which will be used to purchase the Bonds, and provided further, that no interest rate on the Bonds shall exceed nine percent (9%) per year. The Principal Installments are subject to change at the request of the VPSA and upon approval by the Director of Finance. The Director of Finance is authorized to accept changes in the Principal Installments at the request of the VPSA, provided that the aggregate principal amount of the Bonds shall not exceed the amount authorized by this Ordinance. The execution and delivery of the Bonds as described in Section 8 hereof shall conclusively evidence such interest rate or rates established by the VPSA and the Principal Installments requested by the VPSA as having been so accepted as authorized by this Ordinance. 5. Form of Bonds. For as long' as the VPSA is the registered owner of the Bonds, the Bonds shall be in the form of a single, temporary typewritten bond substantially in the form of Exhibit A attached hereto. On 20 days' written notice from the VPSA, the city shall deliver, at its expense, Bonds in marketable form in denomination of $5,000 and whole multiples thereof, as requested by the VPSA, in exchange for the temporary typewritten Bond. Such Bonds in marketable form shall be in ~antially the form of Exhibit A attached hereto, with such changes as shall be necessary or appropriate for the Bonds to be in marketable form, as are not inconsistent with the terms of this Ordinance and as may be approved by the City officials executing such Bonds. 6. Payment; Paying Agent and Registrar. The following provisions shall apply to the Bonds: a. For as long as the VPSA is the registered owner of the Bonds, all payments of principal of, premium, if any, and interest on the Bonds shall be made in immediately available funds to the VPSA at or before 11:00 a.m. (Richmond, Virginia, time) on the applicable Interest Payment Date, principal Payment Date or date fixed for prepayment or redemption, or if such date is not a business day for Virginia banks or for the Commonwealth of Virginia, then at or before 11:00 a.m. (Richmond, Virginia, time) on the business day next preceding such Interest Payment Date, Principal Payment Date or date fixed for prepayment or redemption. b. All overdue payments of principal, and interest to the extent permitted by law, shall bear interest at the applicable interest rate or rates on the Bonds. 1992-4 -3- c. NationsBank, Richmond, Virginia, is designated as Bond Registrar and Paying Agent for the Bonds (the "Regi- strar''). 7. Prepayment or Redemption. The Principal Installments of the Bonds held by the VPSA coming due on or before December 15, 2001, and the definitive Bonds for which the Bonds held by the VPSA may be exchanged that mature on or before December 15, 2001, are not subject to prepayment or redemption prior to their stated maturities. The principal installments of the Bonds held by the VPSA coming due after December 51, 2001, and the definitive Bonds for which the Bonds held by the VPSA may be exchanged that mature after December 15, 2001, are subject to prepayment or redemption at the city's option prior to their stated maturities in whole or in part, on any date on or after December 15, 2001, upon payment of the prepayment or redemption prices (expressed as percentages of principal installments to be prepaid or the percentages of principal installments to be prepaid or the principal amount of the Bonds to be redeemed) set forth below plus accrued interest to the date set for prepayment or redemption: Prices Dates December 15, 2001 to December 14, 2002, inclusive 103% December 15, 2002 to December 14, 2003, inclusive 102 December 15, 2003 to December 14, 2004, inclusive 101 December 15, 2004 and thereafter 100 Provided, however, that while the VPSA is the registered owner of the Bonds, the Bonds shall not be subject to prepayment or redemption prior to their stated maturities as described above without first obtaining the written consent of the VPSA. Notice of any such prepayment or redemption shall be given by the Registrar to the registered owner by registered mail not more than 90 and not less than 30 days before the date fixed for prepayment or redemption. 8. Execution of the Bonds. The Bonds shall be signed by the manual or facsimile signature of the Mayor of the city, shall be countersigned by the manual or facsimile signature of the City Clerk and the city's seal shall be affixed thereto or a facsimile thereof printed thereon; provided, however, that if both of such signatures are facsimiles, no bond shall be valid until it has been authenticated by the manual signature of an authorized officer or employee of the Registrar and the date of authentication noted thereon. 9. Pledge of Full Faith and Credit. For the prompt payment of the principal of and premium, if any, and the interest on the Bonds as the same shall become due, the full faith and credit of the City are irrevocably pledged. In each year while any of the Bonds shall be outstanding, the City Council shall levy and collect in accordance with law an annual ad valorem tax upon all taxable property in the City subject to local taxation sufficient in amount to provide for the payment of the principal of and premium, if any, and the interest on the Bonds as such principal, premium, if any, and interest shall become due, which tax shall be without limitation as to rate or amount and in addition to all other taxes authorized to be levied in the city to the extent other funds of the city are not lawfully available and appropriated for such purpose. 1992-4 -4- 10. Maintenance of Tax-Exemption. 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 (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. The City shall pay any such required rebate from its general funds. 11. Use of Proceeds Certificate. The City Manager and the City Treasurer, or either or them, are authorized and directed to execute a Certificate as to Arbitrage and a Use of Proceeds Certificate or Certificates setting forth the executed use and investment of the proceeds of the Bonds and containing such covenants as may be necessary in order to show compliance with the provisions of the Code, and applicable regulations relating to the exclusion from gross income of interest on the Bonds and on the VPSA Bonds. The city covenants that the proceeds from the issuance and sale of the Bonds will be invested and expended as set forth in such Certificate as to Arbitrage, Use of proceeds Certificate and other Certificates and that the City shall comply with the other covenants and representations contained therein. Furthermore, the city covenants that the City shall comply with the provisions of the Code so that interest on the bonds and on the VPSA Bonds will remain excludable from gross income for Federal income tax purposes. Such Certificates may also provide for any elections such officers deem desirable regarding rebate of earnings to the United States for purposes of complying with the provisions of Code Section 148. 12. Restrictions on Private Use. The City covenants that it will not permit the gross proceeds of the Bonds to be used in any manner that would result in (a) 5% or more of such proceeds being used in a trade or business carried on by any person other than a governmental unit, as provided in Code Section 141(b), (b) 5% or more of such proceeds being used with respect to any "output facility" (other than a facility for the furnishing of water), within the meaning of Code Section 141(b) (4), or (c) 5% or more of such proceeds being used directly or indirectly to make or finance loans to any persons other than a governmental unit, as provided in Code Section 141(c); provided, however, that if the City receives an opinion of bond counsel to the City with respect to the Bonds, and bond counsel to the VPSA with respect to the VPSA Bonds, that compliance with any such restriction is not required to prevent interest on the bonds of both issues from being incudable in the gross income for federal income tax purposes of the registered owners thereof under existing law, the City need not comply with such restriction. 13. State Non-Arbitraqe Proqram; Proceeds Aqreement. The City Council determines that it is in the City's best interests to authorize and direct the Director of Finance to participate in the State Non-Arbitrage Program in connection with the Bonds. The City Manager and the Director of Finance, or either of them, are authorized and directed to execute and deliver a Proceeds Agreement with respect to the deposit and investment of proceeds 1992-4 -5- of the Bonds by and among the city, the other participants in the sale of the VPSA Bonds, the VPSA, Public Financial Manage- ment, Inc., as investment manager, and Central Fidelity Bank, as depository, substantially in the form submitted to the city Council at this meeting, which form is approved. 14. Filinq of Ordinance. The appropriate officers or agents of the City are authorized and directed to cause a certified copy of this Ordinance to be filed with the Circuit Court of Fairfax County. 15. Further Actions. The members of the City Council and all officers, employees and agents of the City are authorized to take such action as they or any one of them may consider necessary or desirable in connection with the issuance and sale of the Bonds, and any such action previously taken is ratified and confirmed. 16. Effective dat~. This ordinance shall take effect upon signature by the Mayor. INTRODUCED: March 10, 1992 PUBLCI HEARING: March 10, 1992 ADOPTED: March 10, 1992 ! Date ATTEST. ' T¢:~¥ ~lerk