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R-19-33RESOLUTION NO. R-19-33 RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF TWO SERIES OF GENERAL OBLIGATION REFUNDING BONDS OF THE CITY OF FAIRFAX, VIRGINIA, PROVIDING FOR THE FORM, DETAILS AND PAYMENT THEREOF, PROVIDING FOR THE REFUNDING OF A PORTION OF THE CITY'S OUTSTANDING GENERAL OBLIGATION REFUNDING BONDS, SERIES 2012B, AND AUTHORIZING THE EXECUTION AND DELIVERY OF CERTAIN DOCUMENTS IN CONNECTION THEREWITH WHEREAS, on September 26, 2012, the City of Fairfax, Virginia (the "City"), issued its $35,685,000 General Obligation Refunding Bonds, Series 2012B (the "2012 Bonds"); WHEREAS, the City's administration, in collaboration with Davenport & Company LLC, in its capacity as the City's financial advisor (the "Financial Advisor"), has recommended to the City Council of the City (the "City Council") that the City authorize the refunding of a portion of the outstanding 2012 Bonds (such refunded portion, the "Refunded Bonds") to achieve debt service savings; WHEREAS, on behalf of the City, the Financial Advisor has solicited and received bids from various commercial banking and other financial institutions to make a loan to the City to be evidenced by the purchase of one or more general obligation refunding bonds of the City (the "Bonds" as hereinafter described); WHEREAS, the City's administration, in collaboration with the Financial Advisor, has reviewed the bids received and recommended that the City issue and sell the Bonds through two direct bank loans with TD Bank, N.A., or a subsidiary thereof (collectively, "TD Bank"); WHEREAS, pursuant to their terms, the Refunded Bonds may not be redeemed before January 15, 2022; WHEREAS, pursuant to the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), the City may not issue a federally tax-exempt bond to effect the refunding of the Refunded Bonds more than 90 days in advance of the first optional redemption date; WHEREAS, in light of the foregoing limitation on the redemption of the Refunded Bonds, the City's administration, in collaboration with the Financial Advisor, has recommended that (a) the City issue and sell a federally taxable general obligation refunding bond (as hereinafter described, the "2019 Bond") to fund an escrow account to pay the principal of and interest due on the Refunded Bonds to and including the first business day on which the Refunded Bonds can be optionally redeemed (the "Redemption Date"), and (b) subject to the conditions set forth in this Resolution and the hereinafter described Forward Delivery Agreement, the City issue and sell a general obligation refunding bond, either as a federally tax-exempt bond or as a federally taxable bond (as hereinafter described, the "2022 Bond"), to refund the 2019 Bond at maturity; WHEREAS, the City Council desires to (a) provide for the issuance and sale of the 2019 Bond pursuant to the terms of this Resolution and the bid of TD Bank and (b) provide for the issuance and sale of the 2022 Bond pursuant to the terms of a Forward Delivery Agreement between the City and TD Bank (the "Forward Agreement"), the form of which has been circulated prior to this meeting of the City Council; and WHEREAS, the City Council has determined to approve the financing parameters for the Bonds and to delegate to the City Manager the authority to negotiate the final pricing terms of the Bonds within such parameters; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAIRFAX, VIRGINIA: 1. Issuance and Sale. Pursuant to the Constitution and statutes of the Commonwealth of Virginia, including the Public Finance Act of 1991, the City Council hereby authorizes (a) the issuance and sale of the 2019 Bond in a principal amount not to exceed $35,000,000 to refund the Refunded Bonds and to pay the related costs of issuance and refunding and (b) the issuance and sale of the 2022 Bond in a principal amount not to exceed $35,000,000 to refund the 2019 Bond and to pay the related costs of issuance and refunding. The 2019 Bond is hereby awarded, and shall be sold, to TD Bank in accordance with the terms of its bid and this Resolution. 2. Approval of Forward Agreement. The form of the Forward Agreement circulated prior to this meeting is hereby approved. The Mayor and the City Manager, either of whom may act, are authorized to execute the Forward Agreement in substantially such form, with such completions, omissions, insertions and changes not inconsistent with this Resolution as may be approved by the officer executing such instrument, whose approval shall be evidenced conclusively by the execution and delivery thereof. 3. Bond Details. (a) The 2019 Bond (1) shall be issued as a federally taxable bond, (ii) shall be in the form of a single, typewritten bond, designated "General Obligation Refunding Bond, Series 2019 (Federally Taxable)," or such other designation as may be approved by the City Manager, (iii) shall be in registered form, (iv) shall be dated the date of its delivery and (v) shall be numbered R-1. The 2019 Bond shall contain such final terms as the City Manager, in collaboration with the Financial Advisor, shall determine to be in the best interests of the City; provided, however, that the 2019 Bond (w) shall be issued in a principal amount not exceeding the limitations set forth in Section 1, (x) shall bear interest at an annual rate not to exceed 2.10% (subject to adjustment as described in the form of the 2019 Bond attached hereto as Exhibit A , (y) shall be sold to TD Bank at a price of 100% of the original principal amount thereof, and (z) shall mature no later than January 30, 2022. (b) Subject to the conditions set forth in the Forward Agreement, the 2022 Bond (i) shall be issued either as a federally tax-exempt bond or a federally taxable bond, whichever status the City Manager shall determine to be in the best interests of the City, (ii) shall be in the form of a single, typewritten bond, designated "General Obligation Refunding Bond, Series 2022," or such other designation as may be approved by the City Manager, (iii) shall be in registered form, (iv) shall be dated the date of its delivery and (v) shall be numbered R-1. The 2022 Bond shall contain such final terms as the City Manager, in collaboration with the Financial Advisor, shall determine to be in the best interests of the City; provided, however, that the 2022 Bond (w) shall be issued in a principal amount not exceeding the limitations set forth in Section 1, (x) shall bear interest at an annual rate not to exceed 2.45%, if issued on an federally tax-exempt basis, or 3.00%, if issued on a federally taxable basis (in each case subject to adjustment as described in the form of the 2022 Bond attached as Exhibit A-1 and Exhibit A-2 to the Forward Agreement), (y) shall be sold to TD Bank at a price of 100% of the original principal amount thereof, and (z) shall mature no later than January 31, 2037. (c) The principal of and interest due on the Bonds shall be payable on dates and in amounts as determined by the City Manager to be in the best interests of the City. (d) Following the determination of the final pricing terms for the 2019 Bond and the 2022 Bond, the City Manager shall execute a certificate setting forth such final pricing terms and shall file such certificate with the records of the City Council. The actions of the City Manager in selling the 2019 Bond and the 2022 Bond shall be conclusive, and no further action with respect to the issuance and sale of either Bond shall be necessary on the part of the City Council. (e) If the date on which any payment is due with respect to either Bond is not a Business Day (as hereinafter defined), the payment shall be made on the next succeeding Business Day. "Business Day" shall mean a day on which banking business is transacted, but not including a Saturday, Sunday, legal holiday or any other day on which banking institutions are authorized by law to close in the Commonwealth of Virginia. (f) Principal and interest shall be payable by the Registrar (as hereinafter defined) by check or draft mailed to the registered owner at the address as it appears on the registration books kept by the Registrar on the date selected by the City Manager as the record date for the Bond (the "Record Date"); provided, however, that, at the request of the registered owner of the Bond, payment will be made by wire transfer pursuant to the most recent wire instructions received by the Registrar from such registered owner. Principal, premium, if any, and interest shall be payable in lawful money of the United States of America. 4. Prepayment of Bonds. (a) The principal installments of the 2019 Bond shall not be subject to optional prepayment in advance of their scheduled payment dates. (b) The principal installments of the 2022 Bond shall be subject to optional prepayment in advance of their scheduled payment dates, in whole or in part at any time, at a prepayment price 2 equal to 100% of the principal amount to be prepaid, together with any interest accrued to the date fixed for prepayment, without any prepayment penalty. 5. Execution and Authentication. The Bonds shall be signed by the manual or facsimile signature of the Mayor of the City and shall be countersigned by the manual or facsimile signature of the City Clerk or any Assistant City Clerk, and the City's seal shall be affixed thereto or a facsimile thereof printed thereon; provided, however, that no Bond signed by facsimile signatures 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. 6. Bond Forms. (a) The 2019 Bond shall be in substantially the form of Exhibit A attached hereto, with such completions, omissions, insertions and changes not inconsistent with this Resolution as may be approved by the officers signing the 2019 Bond, whose approval shall be evidenced conclusively by the execution of the 2019 Bond and delivery thereof to TD Bank. (b) The 2022 Bond shall be in substantially the form of Exhibit A-1 or Exhibit A-2 attached to the Forward Agreement, with such completions, omissions, insertions and changes not inconsistent with this Resolution and the Forward Agreement as may be approved by the officers signing the 2022 Bond, whose approval shall be evidenced conclusively by the execution of the 2022 Bond and delivery thereof to TD Bank. 7. Pledge of Full Faith and Credit. (a) The full faith and credit of the City are irrevocably pledged for the payment of principal of and interest on the Bonds. Unless other funds are lawfully available and appropriated for timely payment of the Bonds, the City Council shall levy and collect an annual ad valorem tax, over and above all other taxes authorized or limited by law and without limitation as to rate or amount, on all locally taxable property in the City sufficient to pay when due the principal of and interest on the Bonds. (b) The City Council believes that funds sufficient to make all debt service payments on the Bonds and all other present and future general obligations of the City 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 City Council hereby states its intent to make all such payments on the Bonds and all other present and future general obligations of the City without any preference as to payment between any such general obligations and hereby recommends that future City Councils do likewise so long as any of the Bonds are outstanding. 8. Registration, Transfer and Owners of Bonds. The Bonds shall be issued in registered form without coupons, payable to the registered holders or registered assigns. The City Treasurer is appointed paying agent and registrar for the Bonds (the "Registrar"). The City may, in its sole discretion, at any time appoint a qualified bank or trust company as successor paying agent and registrar of the Bonds. The Registrar shall maintain registration books for the registration and registration of transfers of the Bonds. Upon presentation and surrender of any Bond to the Registrar, or its corporate trust office if the Registrar is a bank or trust company, together with an assignment duly executed by the registered owner or its duly authorized attorney or legal representative in such form as shall be satisfactory to the Registrar, the City shall execute, and the Registrar shall authenticate, if required by Section 6, and deliver in exchange, a new Bond or Bonds having an equal aggregate principal amount, in authorized denominations, of the same form and maturity, bearing interest at the same rate, and registered in names as requested by the then registered owner or its duly authorized attorney or legal representative. Any such exchange shall be at the expense of the City, except that the Registrar may charge the person requesting such exchange the amount of any tax or other governmental charge required to be paid with respect thereto. The Registrar shall treat the registered owner as the person exclusively entitled to payment of principal and interest and the exercise of all other rights and powers of the owner, except that interest payments shall be made to the person shown as owner on the registration books on the Record Date. 9. Preparation and Delivery of Bonds. The Mayor of the City and the City Clerk or any Assistant City Clerk are authorized and directed to take all proper steps to have the Bonds prepared and executed in accordance with their respective terms and, with respect to the 2022 Bond, the terms of the Forward Agreement and to deliver the Bonds to TD Bank upon payment therefor. 10. Mutilated, Lost or Destroyed Bonds. If any Bond has been mutilated, lost or destroyed, the City shall execute and deliver a new Bond of like date and tenor in exchange and substitution for, and upon cancellation of, such mutilated Bond or in lieu of and in substitution for such lost or destroyed Bond; provided, however, that the City shall so execute and deliver only if the registered owner has paid the reasonable expenses and charges of the City in connection therewith and, in the case of a lost or destroyed Bond, (a) has filed with the City evidence satisfactory to the City that such Bond was lost or destroyed and (b) has furnished to the City satisfactory indemnity. 11. Escrow Deposit Agreement. The City Manager and the Assistant City Manager Director of Finance, either of whom may act, are hereby authorized and directed to execute an escrow deposit agreement in connection with the Refunded Bonds (the "Escrow Agreement") between the City and an escrow agent to be appointed by the City Manager (the "Escrow Agent"). The Escrow Agreement shall be in the form approved by the City Manager, in collaboration with the City Attorney and the City's bond counsel, the execution thereof by the City Manager or the Assistant City Manager,'Director of Finance to constitute conclusive evidence of such officer's approval of the Escrow Agreement. The Escrow Agreement shall provide for the irrevocable deposit of a portion of the 2019 Bond proceeds (the "Escrowed Refunding Portion") in an escrow fund that shall be sufficient to provide for payment of the principal of and interest on the Refunded Bonds. If requested by the City Manager, the Escrow Agent is hereby authorized and directed to execute subscription forms, contracts and other agreements providing for the purchase of noncallable obligations of, or unconditionally guaranteed by, the United States Government, to provide for payment of the principal of and interest on the Refunded Bonds. 12. Deposit of Bond Proceeds. (a) The City Treasurer is authorized and directed to (i) provide for the delivery of the Escrowed Refunding Portion to the Escrow Agent for deposit in the Escrow Fund and (ii) deposit the remaining 2019 Bond proceeds in a special account held by the City or the Escrow Agent to be used to pay the related costs of issuance and refunding. The City Treasurer is further authorized and directed to take all such further action as may be necessary or desirable in connection with the payment and refunding of the Refunded Bonds. (b) The City Treasurer is authorized and directed to provide for delivery of any proceeds of the 2022 Bond in such manner as necessary to (i) refund the 2019 Bond at maturity and (ii) pay the related costs of issuance. The City Treasurer is further authorized and directed to take all such further action as may be necessary or desirable in connection with the payment and refunding of the 2019 Bond. 13. Redemption of Refunded Bonds. The City Manager is authorized and directed to (a) determine which maturities of the 2012B Bonds shall constitute the Refunded Bonds, (b) take all proper steps to call for redemption the Refunded Bonds and (c) prepare and deliver any such notices and correspondence necessary therefor. 14. Arbitrage Covenants. The City covenants that, if the 2022 Bond is issued as a federally tax-exempt bond, the City shall not take or omit to take any action the taking or omission of which will cause the 2022 Bond to be an "arbitrage bond" (within the meaning of Section 148 of the Code), or cause interest on the 2022 Bond 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, if the 2022 Bond is issued as a federally tax-exempt bond, 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 2022 Bond, unless the City receives an opinion of nationally recognized bond counsel that such compliance is not required to prevent interest on the 2022 Bond from being included in the gross income for federal income tax purposes of the registered owners thereof under existing law. The City shall pay any such required rebate from legally available funds. 15. Tax Compliance Documentation. Such officers of the City as may be requested by the City's bond counsel are authorized and directed to execute an appropriate certificate setting forth (a) the expected uses and investment of the proceeds of the 2022 Bond in order to show that such expected uses and investment will not violate the provisions of Section 148 of the Code and (b) 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 shall be prepared in consultation with the City's bond counsel, and such elections shall be made after consultation with bond counsel. n 16. Limitation on Private Use. The City covenants that, if the 2022 Bond is issued as a federally tax-exempt bond, it shall not permit the proceeds of the 2022 Bond or the facilities refinanced therewith to be used in any manner that would result in (a) 5% or more of such proceeds or facilities being used in a trade or business carried on by any person other than a governmental unit, as provided in Section 141(b) of the Code, (b) 5% or more of such proceeds or facilities being used with respect to any output facility (other than a facility for the furnishing of water) (within the meaning of Section 141(b)(4) of the Code), 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 Section 141(c) of the Code; provided, however, that if the City receives an opinion of nationally recognized bond counsel that any such covenants need not be complied with to prevent the interest on the 2022 Bond from being includable in the gross income for federal income tax purposes of the registered owners thereof under existing law, the City need not comply with such covenants. 17. Election to Proceed under Public Finance Act. In accordance with Sections 15.2- 2601 and 15.2-2643 of the Code of Virginia of 1950, as amended (the "Virginia Code"), the City Council elects to issue the Bonds pursuant to the provisions of the Public Finance Act of 1991, Chapter 26 of Title 15.2 of the Virginia Code, without regard to the provisions of the City Charter. 18. Other Actions. All other actions of officers of the City in conformity with the purposes and intent of this Resolution and in furtherance of the issuance and sale of the Bonds and the refunding of the Refunded Bonds are hereby ratified, approved and confirmed. The officers of the City are authorized and directed to execute and deliver all certificates and instruments and to take all such further action as may be considered necessary or desirable in connection with the issuance, sale and delivery of the Bonds and the refunding of the Refunded Bonds. 19. Repeal of Conflicting Resolutions. All resolutions or parts of resolutions in conflict herewith are repealed. 20. Effective Date. This Resolution shall take effect immediately. Introduced: September 10, 2019 Adopted: October 29, 2019 Mayor ATTEST: z% � f -Ran City Clerk The vote on the motion to approve was recorded as follows: ►L8110 4. Councilmember DeMarco Aye Councilmember Lim Aye Councilmember Miller Aye Councilmember Passey Aye Councilmember Stehle Aye Councilmember Yi Absent