R-13-52 RESOLUTION NO. R-13-52
RESOLUTION AUTHORIZING THE CITY OF FAIRFAX,
VIRGINIA
IN THE
TO ENTER INTO A LEASE/PURCHASE FINANCING APPROVING THE FORM OF A
MAXIMUM PRINCIPAL AMOUNT OF $1,800,000,
LEASE AGREEMENT PREPARED IN ONNECTION T THE MEEWITH AND
AUTHORIZING THE EXECUTION AND DE L
WHEREAS,the Council (the "Council") ofc n of Fairfax,
equipment
desires to provide for a plan of lease/purchase financing
for the City and its various departments (the "Equipment");
WHEREAS, the City's administration, in collaboration with Davenport & Company has solicited
LLC, the City's financial advisor (the "Financial Advisor"),
City to City ke a lease/purchase
commercial banks and leasing entities to provide
in the maximum principal amount of$1,800,000 related to the Equipment;
WHEREAS, there has been presented to th o be entered d a draft of an into by the City the
Lease/Purchase Agreement (the "Lease Agreement")
financing lessor selected by the City for the lease/purchase of the Equipment;
WHEREAS, plans for the acquisition of the Equipment have advanced, and the City
ment (the
expects to advance its own funds to pay expenditures ent and for eceive reimbto the
sement for
"Expenditures") prior to entering into the Lease Agreement
Expenditures from proceeds of the Lease Agreement;
NOW, THEREFORE, BE IT RESOLVED BY TH COUNCIL OF THE CITY
OF FAIRFAX,VIRGINIA,THIS 12 S DAY OF NOVEMBER,
1. The Council authorizes the acquisition of the Equipment through a
company
lease/purchase financing arrangement with the lationfwrth the F nlancial Advisorndetermines
(the "Lessor") that the City Manager, in
has submitted a proposal with the most favorable leasing terms to the City (the "Lessor"),
subject to the parameters set forth in Section 2 below.
2. The City Manager (such term to include any Deputy City Manager) is
authorized to negotiate with the Lessor and to accept such pricing der terms as the City (n)the
shall determine to be in the best interests of the City; p payable, that: (a) the
aggregate amount of principal components (b)thetLease Agreement shall terminate not
Lease Agreement shall not exceed $1,800,000,
later than December 31, 2032, (c)the interest components of Basic Rent payable under the
Lease Agreement shall bear interest at an annual rate the t re ayment penalty, if f any shallnot
interest penalties and subject to a rate reset), and (d) p P
exceed 3% of the principal amount to be prepaid. The ityo Manager is further
(constituting rs both
determine the payment dates and installment amounts
principal and interest components) due under the Lease Agreement.
3. The City Manager is authorized to execute a final Lease Agreement
such
substantially in the form presented to this meeting, isResohrtionitas may
completions, omissions, insertions, and changes not i nconsistent with th
be approved by the City Manager. In the alternative,
the City Manager is authorized in his
discretion to execute an additional schedule (the "Schedule")an entity evidence
with which the City has
of the Equipment should the City Manager select as
already entered into a master lease agreement. The execution by
the the C tyrMnag Manager oft the
Lease Agreement or such additional Schedule and the delivery
conclusive evidence of the City of and changes of
The
Agreement or Schedule and any related completions,
officers of the City are authorized and directed to execute atake deliver
all actions necessary odr
instruments, including a project escrow agreement, and to
desirable in connection with the execution and delivery of the Lease Agreement.
4. The undertaking by the City to make payments under the Lease Agreement
shall be a limited obligation payable solely from funds to be appropriated by the Council for
such P urpose and shall not constitute a debt of t faith and within the
the tax
ing power of
constitutional or statutory limitation or a pledge of the purpose.
the City beyond any fiscal year for which the City has appropriated funds for such urp
5. The City is authorized to grant a security interest iprompt the Equipment acquired
with proceeds of the Lease Agreemt as security
by the City of�is other obligations under the Lease
amounts payable and the p rmanc
Agreement.
6, The Council determines that the acquisition e Agreement tnare necessary and
Equipment and the financing of the City and through
w the
to be necessary and proper to
proper to the efficient operation
efficient operation of the City through the fiscal year ending June 30, 2033. payable
7. The City believes that funds sufficient le recognizing payment
that rt islnoamounts mpowered to
under the Lease Agreement can be obtained. payments beyond the current fiscal year, the
make any binding commitment to make such paY appropriations for future fiscal years in
Council hereby states its intent to m ment and that future councils do
amounts sufficient to make all such paym
, or
ents
during the term of the Lease Agreement. n directs the
t e Clity'saannual
such other officer as may be charged with the responsibility
bud g et, to include in the budget for each fiscal year during
nder the Lease Agreement du ng
an amount sufficient to make all Rental Payments paya ble
such fiscal year. The City Manager is authorized and directed o deliver later the
than Lessor within to Y
ten days after the adoption of the budget for each fiscal year, days
after the beginning of the fiscal year, a certificate stating du heth r h amount year has the
aft Agreement g
estimated amounts
Council in any such budget.
by
or
8. The City covenants that it will not take or be "a t arbitrage the
wi hing he
omission of which will cause the Lease Agreement to
mea g
de"), and
nin of Section 148 of the Internal Revenue Code of 1986 interest on amended
d (the e "Co
under the
regulations issued pursuant thereto, or otherwise cause e e
Lease e A reement to be includable in the gross income of the n gi the City hall comply with owner thereof
current statutes. Without limiting the generality of the foreg g,
any
any provision of law that may require the City at any time torrrebatpeto the Unit der to Lease
part of the earnings derived from the investment o
Agreement, unless the City receives an opinion of nationally recognized bond
under the counsel that
such prevent interest on proceeds such compliance is not required to
Agreement from being includable in the gross income for federal income tax purposes of the
registered owner thereof under existing
to
9. Such officers of the City as may be requested are
and horized nt od the funds
execute an appropriate certificate setting forth the expected use
received under the Lease Agreement, and any elections such h officers
lying with Sedeon 14e
regarding rebate of earnings to the United States, for purpose s
of
the Code. Such certificate and elections shall be in such form as may be requested by bond
counsel for the City.
se
10. The City covenants that during the term pt of performung
or permit the use of any portion of the Equipment other than for the urpose
e
one or more governmental or proprietary functions of the City consistent is the Equipment the
a of the
City's authority and �tentity other han the use
Crty any portion
business of any person o
11. The City designates the obligations under the Lease
of gee Code as `The qualifie
C d
tax-exempt obligations" for the purpose of Section 265(b)(3))
represents and covenants as follows:
(a) The City will in no event designate more LOase Agre0 of sfor
qualified tax-exempt obligations in calendar year 2013, including the h
as
the purpose of such Section 265(b)(3);
(b) The City, all its "subordinate entities," within the meaning of such Section
265(b)(3), and all entities which issue tax-exempt obligations on behalf of the City and its
subordinate entities have not issued, in the aggregate, more than $10,000,000 of tax-exempt
obligations in calendar year 2013 (not including "private activity bonds," within the meaning
of Section 141 of the Code, other than "qualified 501(c)(3) bonds," within the meaning of
Section 145 of the Code), including the Lease Agreement;
(c) Barring circumstances unforeseen as of the date of delivery of the Lease
Agreement, the City will not issue tax-exempt obligations itself or approve the issuance of
tax-exempt obligations of any of such other entities if the issuance of such tax-exempt
obligations would, when aggregated with all other tax-exempt obligations theretofore issued
by the City and such other entities in calendar year 2013, result in the City and such other
entities having issued a total of more than $10,000,000 of tax-exempt obligations in calendar
year 2013 (not including private activity bonds other than qualified 501(c)(3) bonds),
including the Lease Agreement; and
(d) The City has no reason to believe that the City and such other entities will
issue tax-exempt obligations in calendar year 2013 in an aggregate amount that will exceed
such$10,000,000 limit;
provided, however, that if the City receives an opinion of nationally recognized bond counsel
that compliance with any covenant set forth in (a) or (c) above is not required for the Lease
Agreement to be a qualified tax-exempt obligation, the City need not comply with such
covenant.
12. The City intends that the adoption of this Resolution confirms the "official
intent" within the meaning of Treasury Regulations Section 1.150-2 promulgated under the
Code.
13. All other actions of the City in conformity with the purposes and intent of this
Resolution and in furtherance of entering into the Lease Agreement are approved and
confirmed.
14. All resolutions or parts of resolutions in conflict herewith are repealed.
15. This Resolution shall take effect immediately.
ADOPTED this 12`h day of November, 2013.
c�-vYJ cJ•��
Mayor
ATTEST:
9
7/7, j #, ;■ /
City Clerk
The vote on the motion to approve was recorded as follows:
VOTE:
Councilman DeMarco Aye
Councilman Drummond Aye
Councilman Greenfield Aye
Councilman Meyer Aye
Councilmember Schmidt Aye
Councilman Stombres Aye