20050628 R-05-41RESOLUTION NO. R-05-41
RESOLUTION APPROVING A PLAN OF FINANCING WITH THE CITY
OF FAIRFAX ECONOMIC DEVELOPMENT AUTHORITY, TO
ACQUIRE, CONSTRUCT, RENOVATE, IMPROVE AND EQUIP
CERTAIN PUBLIC IMPROVEMENTS, APPROVING THE FORM OF
CERTAIN DOCUMENTS PREPARED IN CONNECTION THEREWITH
AND AUTHORIZING THE EXECUTION AND DELIVERY OF THE
SAME
WHEREAS, the Council (the "City Council") of the City of Fairfax, Virginia (the
"City"), desires to acquire, construct, renovate, improve and equip various public
improvements, including certain downtown redevelopment improvements and the City's
capital contribution for the costs of a new library to be shared with Fairfax County, Virginia
(collectively, the "Project"); and
WHEREAS, the City desires to undertake the Project through a plan of lease
financing with the City of Fairfax Economic Development Authority (the "Authority"), by
which the Authority will issue its public facility lease revenue bonds and use the proceeds
thereof to finance the costs of the Project and the costs of issuing such bonds; and
WHEREAS, the City hereby requests the Authority to (a) issue its Public Facility
Lease Revenue Bonds (City of Fairfax Public Improvement Projects), Series 2005 (the
"Bonds"), in a maximum principal amount not to exceed $45,000,000, pursuant to the terms
of the Trust Agreement (as hereinafter defined), (b) use the proceeds of the Bonds to pay the
costs of the Project, including the costs of issuing the Bonds, (c) lease certain real property
and the existing improvements thereon owned by the City, including City Hall and the
Property Yard (the "Collateral Property") from the City pursuant to the terms of the Ground
Lease (as hereinafter defined), (d) lease the Collateral Property back to the City pursuant to
the terms of the Lease Agreement (as hereinafter defined) and (e) secure the Bonds by an
assignment to the Trustee (as hereinafter defined) of certain rights of the Authority pursuant
to the terms of the Assignment Agreement (as hereinafter defined); and
WHEREAS, the City's administration has recommended that Citigroup Global
Markets Inc., be approved as the senior managing underwriter for the Bonds (the
"Underwriter") and that Hunton & Williams LLP, Richmond, Virginia, be approved as bond
counsel; and
WHEREAS, there have been presented to this meeting drafts of the following
documents (the "Documents"), proposed in connection with the undertaking of the Project
and the issuance and sale of the Bonds:
(a)
Ground Lease (the "Ground Lease"), between the City and the Authority,
conveying to the Authority a leasehold interest in the Collateral Property;
(b)
Lease Agreement (the "Lease Agreement"), between the Authority and the
City, conveying to the City a leasehold interest in the Collateral Property;
(c)
Trust Agreement (the "Trust Agreement"), between the Authority and a trustee
to be named (the "Trustee"), including the form of the Bonds, pursuant to
which the Bonds are to be issued and which is to be acknowledged and
consented by the City;
(d)
Assignment Agreement (the "Assignment Agreement"), between the Authority
and the Trustee, assigning certain of the Authority's rights under the Lease
Agreement to the Trustee;
(e)
Bond Purchase Agreement between the Authority, the City and the
Underwriter;
(f)
Preliminary Official Statement of the Authority relating to the public offering
of the Bonds (the "Preliminary Official Statement");
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(g)
Continuing Disclosure Agreement pursuant to which the City agrees to
undertake certain continuing disclosure obligations with respect to the Bonds;
and
(h)
Leasehold Deed of Trust between the Authority and individual trustees named
therein, as trustees, pursuant to which the Authority has granted a lien for the
benefit of the Trustee on its leasehold interest in the Project.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY
)F FAIRFAX, VIRGINIA:
1. The Authority is requested to issue and sell the Bonds pursuant to the
following plan of finance for the Project. The City will make payments of Basic Rent and
Additional Rent (each as defined in the Lease Agreement) to the Authority in amounts
sufficient to amortize the Bonds and to pay the fees or expenses of the Authority and the
Trustee. The obligation of the Authority to pay principal of and premium, if any, and interest
on the Bonds will be limited to payments of Basic Rent and Additional Rent received from
the City. The obligation of the City to make payments of Basic Rent and Additional Rent will
be subject to the City Council making annual appropriations in sufficient amounts for such
purposes. If the City exercises its right not to appropriate money for such payments, the
Trustee shall have the right to terminate the Lease Agreement and to exercise any remedies
provided in the Lease Agreement upon an event of non-appropriation. The plan of financing
for the Project shall contain such additional requirements and provisions as may be approved
by the City Manager.
2. The Project is hereby declared to be essential to the efficient operation of the
City, and the City Council anticipates that the Project will continue to be essential to the
operation of the City during the term of the Lease Agreement. The City Council, while
recognizing that it is not empowered to make any binding commitment to make
appropriations beyond the current fiscal year, hereby states its intent to make annual
appropriations in future fiscal years in amounts sufficient to make all payments under the
Lease Agreement and hereby recommends that future City Councils do likewise during the
term of the Lease Agreement.
3. The City Manager is hereby authorized and directed to execute the Documents,
which shall be in substantially the forms submitted to this meeting, which are hereby
approved, with such completions, omissions, insertions and changes not inconsistent with this
Resolution as may be approved by the City Manager, his execution to constitute conclusive
evidence of his approval of any such completions, omissions, insertions and changes. The
City Manager is also authorized to cause such of the Documents as are necessary to be
recorded in the Clerk's Office of the Circuit Court of Fairfax County, Virginia.
4. In making completions to the Lease Agreement, the City Manager shall
provide for payments of rent in amounts equivalent to the payments on the Bonds, which shall
be sold to the Underwriter on terms as shall be satisfactory to the City Manager; provided that
the payments of rent shall be equivalent to the Bonds (a) having a principal amount not
exceeding $45,000,000, (b) having a true or "Canadian" interest cost not exceeding 6.0% per
year (taking into account any original issue discount or original issue premium), (c) maturing
no later than December 31, 2035, (d) being sold to the Underwriter at a price not less than
98% of the aggregate principal amount thereof (without taking into account any original issue
discount) and (e) being subject to optional redemption at a redemption premium, if any, not
exceeding 1.0% of their principal amount. The City Manager is further authorized to approve
(a) a lesser principal amount for the Bonds and (b) a maturity schedule, including serial
maturities and term maturities for the Bonds, as the City Manager shall determine to be in the
best interest of the City.
Following the sale of the Bonds, the City Manager shall evidence his approval of the
final terms and purchase price of the Bonds by executing the Bond Purchase Agreement. The
~ctions of the City Manager in approving the terms of the Bonds shall be conclusive, and no
further action shall be necessary on the part of the City Council. As set forth in the Lease
Agreement, the City agrees to pay such "late charges" and other charges as provided therein.
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5. The Preliminary Official Statement in the form presented to this meeting is
tpproved with respect to the information contained therein pertaining to the City. The
Underwriter is authorized to distribute to prospective purchasers of the Bonds the Preliminary
Official Statement in form deemed to be "near final," within the meaning of Rule 15c2-12 of
the Securities and Exchange Commission (the "Rule"), with such completions, omissions,
insertions and changes not inconsistent with this Resolution as may be approved by the City
Manager. Such distribution shall constitute conclusive evidence that the City has deemed the
Preliminary Official Statement to be final as of its date within the meaning of the Rule, with
respect to the information therein pertaining to the City. The City Manager is authorized and
:lirected to approve such completions, omissions, insertions and other changes to the
Dreliminary Official Statement that are necessary to reflect the terms of the sale of the Bonds,
:letermined as set forth in paragraph 4, and the details thereof and that are appropriate to
:omplete it as an official statement in final form (the "Official Statement") and distribution
thereof by the Underwriter shall constitute conclusive evidence that the City has deemed the
Official Statement final as of its date within the meaning of the Rule, with respect to the
information contained therein pertaining to the City.
6. The City covenants that it shall not take or omit to take any action the taking or
omission of which shall cause the Bonds to be "arbitrage bonds" within the meaning of
Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"), and regulations
thereunder, 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 of America any part of the
earnings derived from the investment of the gross proceeds of the Bonds. The City shall pay
from its legally available general funds any amount required to be rebated to the United States
of America pursuant to the Code.
7. Any authorization herein to execute a document shall include authorization to
deliver it to the other parties thereto and to record such document where appropriate.
8. All other acts of the City Manager, the Director of Finance and other officers
of the City that are in conformity with the purposes and intent of this Resolution and in
furtherance of the issuance and sale of the Bonds and the undertaking of the Project are
hereby approved and ratified.
9. This Resolution shall take effect immediately.
Introduced: June 28, 2005
Adopted: June 28, 2005
ATTEST:
- - City Cler'i~ '
The vote on the motion to approve was recorded as follows:
VOTE:
Councilwoman Cross aye
Councilman Greenfield aye
Councilwoman Lyon aye
Councilman Rasmussen aye
Councilman Silverthome aye
Councilmember Winter aye
37832.(
~.pproved as to
Form and Legal Sufficiency:
City Attorney ~
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