R-15-44RESOLUTION NO. R-15-44
BE IT RESOLVED, by the City Council of the City of Fairfax, Virginia that the following
resolution is hereby authorized:
RESOLUTION AUTHORIZING THE CITY OF FAIRFAX,
VIRGINIA, TO ENTER INTO A LEASE/PURCHASE
FINANCING FOR FIRE EQUIPMENT IN THE
MAXIMUM PRINCIPAL AMOUNT OF $1,250,000,
AUTHORIZING THE CITY TO ENTER INTO A
SUBLEASE OF SUCH EQUIPMENT WITH THE
FAIRFAX VOLUNTEER FIRE DEPARTMENT, AND
AUTHORIZING THE EXECUTION AND DELIVERY OF
SUCH AGREEMENTS
WHEREAS, the Council (the "Council") of the City of Fairfax, Virginia (the "City"),
desires to undertake the lease/purchase financing of a new fire truck (body type — tower
ladder) and related equipment (collectively, the "Equipment") for use by the City and the
Fairfax Volunteer Fire Department (the "Volunteer Department");
WHEREAS, the City's administration has solicited proposals from commercial banks
and leasing entities to provide for the City to undertake a lease/purchase financing in the
maximum principal amount of $1,250,000 related to the Equipment and has recommended, in
consultation with Davenport & Company LLC, the City's financial advisor, to recommend
that the Council accept the proposal of TD Equipment Finance, Inc. (the "Lessor");
WHEREAS, there has been presented to this meeting a draft of an Equipment Lease
Purchase Agreement (the "Lease Agreement") to be entered into by the City and the Lessor
for the lease/purchase of the Equipment;
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY
OF FAIRFAX, VIRGINIA, THIS 27" DAY OF OCTOBER, 2015, THAT:
1. The Council authorizes the acquisition of the Equipment through a
lease/purchase financing arrangement with the Lessor in accordance with the provisions of the
bid from the Lessor dated September 30, 2015 (attached hereto as Exhibit A), and the terms of
this resolution.
2. The City Manager (such term to include any Deputy City Manager) is
authorized to negotiate with the Lessor and to accept such pricing terms as the City Manager
shall determine to be in the best interests of the City; provided however, that (a) the aggregate
amount of principal components of basic rent (the "Basic Rent") payable under the Lease
Agreement shall not exceed $1,250,000, (b) the Lease Agreement shall terminate not later
than December 31, 2023, and (c) the interest components of Basic Rent payable under the
Lease Agreement shall bear interest at an annual rate not to exceed 1.806% (exclusive of any
interest penalties and subject to adjustment as set forth in the Lease Agreement). The City
Manager is further authorized to determine the payment dates and installment amounts of
Basic Rent (constituting both principal and interest components) due under the Lease
Agreement and the provisions (including any make -whole prepayment price) relating to any
prepayment of such Basic Rent.
3. The City Manager is authorized to execute a final Lease Agreement with the
Lessor substantially in the form presented to this meeting, which is hereby approved, with
such completions, omissions, insertions, and changes not inconsistent with this Resolution as
may be approved by the City Manager. Further, the City Manager is authorized to execute a
sublease agreement (the "Sublease") for the lease of the Equipment to the Volunteer
Department upon such terms as the City Manager shall determine to be in the best interest of
the City, subject to the terms and provisions of the Lease Agreement. The form of the
Sublease shall be approved by the City Attorney and the City Manager. The execution by the
City Manager of the Lease Agreement and the Sublease and the delivery thereof to the other
parties shall constitute conclusive evidence of the City Manager's approval of the final forms
of such agreements and any related completions, omissions, insertions, and changes. The
officers of the City are authorized and directed to execute and deliver all certificates and
instruments and to take all actions necessary or desirable in connection with the execution and
delivery of the Lease Agreement and the Sublease.
4. The City is authorized to grant a security interest in the Equipment acquired
with proceeds of the Lease Agreement as security for the prompt payment when due of
amounts payable and the performance by the City of its other obligations under the Lease
Agreement.
5. The Council determines that the acquisition and continuing use of the
Equipment and the financing of the same through the Lease Agreement are necessary and
proper to the efficient operation of the City and will continue to be necessary and proper to
efficient operation of the City through the fiscal year ending June 30, 2024.
6. 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 purpose and shall not constitute a debt of the City within the meaning of any
constitutional or statutory limitation or a pledge of the faith and credit or the taxing power of
the City beyond any fiscal year for which the City has appropriated funds for such purpose.
7. The City believes that funds sufficient to make payment of all amounts payable
under the Lease Agreement can be obtained. While recognizing that it is not empowered to
make any binding commitment to make such payments beyond the current fiscal year, the
Council hereby states its intent to make annual appropriations for future fiscal years in
amounts sufficient to make all such payments and hereby recommends that future councils do
likewise during the term of the Lease Agreement. The Council directs the City Manager, or
such other officer as may be charged with the responsibility for preparing the City's annual
budget, to include in the budget for each fiscal year during the term of the Lease Agreement
an amount sufficient to make all Rental Payments payable under the Lease Agreement during
such fiscal year.
8. The City covenants that it will not take or omit to take any action the taking or
omission of which will cause the Lease Agreement to be an "arbitrage bond" within the
meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"), and
regulations issued pursuant thereto, or otherwise cause interest on the proceeds under the
Lease Agreement to be includable in the gross income of the registered owner thereof under
current statutes. 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 under the Lease
Agreement, unless the City receives an opinion of nationally recognized bond counsel that
such compliance is not required to prevent interest on the proceeds under the Lease
Agreement from being includable in the gross income for federal income tax purposes of the
registered owner thereof under existing law.
9. Such officers of the City as may be requested are authorized and directed to
execute an appropriate certificate setting forth the expected use and investment of the funds
received under the Lease Agreement, and any elections such officers deem desirable
regarding rebate of earnings to the United States, for purposes of complying with Section 148
of the Code. Such certificate and elections shall be in such form as may be requested by bond
counsel for the City.
10. 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.
11. All resolutions or parts of resolutions in conflict herewith are repealed.
12. This Resolution shall take effect immediately.
Adopted: October 27, 2015 '
Mayor
ATTEST:
City Clerk
The vote on the motion to approve was recorded as follows:
VOTE:
Councilman DeMarco
Aye
Councilman Greenfield
Aye
Councilmember Loftus
Aye
Councilman Meyer
Aye
Councilmember Miller
Absent
Councilmember Schmidt
Aye