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R-20-27RESOLUTION NO.2020-27 RESOLUTION APPROVING A PLAN TO FINANCE VARIOUS CITY PROJECTS THROUGH THE ISSUANCE OF A REVENUE NOTE BY THE CITY OF FAIRFAX ECONOMIC DEVELOPMENT AUTHORITY, AUTHORIZING THE EXECUTION OF CERTAIN DOCUMENTS IN CONNECTION THEREWITH AND APPROVING THE FORMS OF SUCH DOCUMENTS WHEREAS, the City of Fairfax Economic Development Authority (the "Authority") is a political subdivision of the Commonwealth of Virginia (the "Commonwealth") created and existing pursuant to Chapter 643 of the Virginia Acts of Assembly of 1964, as amended (the "Act"); and WHEREAS, the Act authorizes the Authority to, among other things, (a) finance facilities for use by, among others, a city, (b) issue its revenue bonds, notes and other obligations from time to time for such purpose and (c) pledge all or any part of its revenues as security for the payment of principal of and interest on any such obligations; WHEREAS, the City Council (the "Council") of the City of Fairfax, Virginia (the "City"), desires to obtain, in conjunction with the Authority, a loan to finance portions of the projects set forth in the City's capital improvement plans for fiscal years 2020 and 2021 (collectively, the "City Projects"); WHEREAS, the City desires to request the Authority (a) issue and sell its Revenue Note (City Projects), Series 2020 (the "Note"), pursuant to the terms of a Note Purchase and Loan Agreement (the "Loan Agreement") between the City, the Authority and the Lender (as hereinafter defined), in order to provide for a loan and its repayment terms, (b) loan the proceeds of the Note to the City pursuant to the terms of the Loan Agreement to finance, as needed, the costs of the City Projects and to pay the related costs of issuance, and (c) secure the repayment of the Note by an assignment to the Lender of certain payments due from the City to the Authority in accordance with the terms of the Loan Agreement; WHEREAS, the City has requested Davenport & Company LLC, as the City's financial advisor (the "Financial Advisor"), to solicit proposals for a loan from banking and other financial institutions; WHEREAS, the Council has reviewed a summary of the proposals received and has determined to authorize the City Manager to (a) select the proposal from the banking or other financial institution that the City Manager, in consultation with the Financial Advisor, deems to offer the most favorable loan terms to the City and the Authority and (b) request that the Authority award the Note to such institution; and WHEREAS, there has been presented to this meeting a draft of the Loan Agreement that the City proposes to execute in support of the transactions described above, a copy of which shall be filed with the records of the Council; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAIRFAX, VIRGINIA: l . The Council hereby approves the following plan in connection with the loan and the financing of the City Projects: (a) the Lender (as hereinafter defined) shall make a loan to the Authority; (b) the Authority shall issue and deliver the Note to the Lender as evidence of such loan and further loan the proceeds of the Note to the City; (c) the City shall use the proceeds thereof to finance the City Projects and agree to repay such loan from amounts appropriated from time to time by the Council, all in accordance with the terms set forth in the Loan Agreement; and (d) the obligation of the Authority to make payments under the Note and the Loan Agreement shall be limited to the payments, if any, received from the City, which shall be assigned to the Lender pursuant to the terms of the Loan Agreement. This plan of financing shall contain such additional requirements and provisions as the City Manager may approve and determine, in collaboration with the Chair or Vice Chair of the Authority, to be in the best interests of the City and the Authority. 2. The Council hereby authorizes the City Manager to select the proposal that he, in consultation with the Financial Advisor, deems to offer the most favorable loan terms to the City and the Authority (such selected proposal herein referred to as the "Proposal") and to negotiate the final terms of the loan with the banking or other financial institution offering such Proposal (such institution herein referred to as the "Lender"), all in such manner as the City Manager shall determine to be in the best interests of the City and the Authority; provided that the Note evidencing such loan shall (a) provide for the Lender to make one or more principal advances from time to time in an aggregate amount not to exceed $6,750,000, (b) mature no later than July 31, 2025, (c) bear interest at a per annum rate not to exceed 2.60% (subject to adjustment upon an event of taxability or an event of default), (d) be sold to the Lender at a price not less than 100% of the principal amount thereof and (e) be subject to optional prepayment no later than the third anniversary of the issue date. Following the sale of the Note, the City Manager shall file a certificate with the records of the Council setting forth the final terms of the Note and the Loan Agreement. The actions of the City Manager in approving the terms of the Note and the Loan Agreement shall be conclusive, and no further action shall be necessary on the part of the Council. 3. The Council hereby directs the City Manager to request that the Authority undertake the issuance, sale and award of the Note to the Lender in accordance with the terms of the Proposal and this Resolution. 4. The Council hereby authorizes and directs the City Manager to execute and deliver the Loan Agreement. The Loan Agreement shall be in substantially the form presented to this meeting, which is hereby approved, with such completions, omissions, insertions or changes not inconsistent with this Resolution as may be approved by the City Manager, whose approval shall be evidenced conclusively by the execution and delivery thereof. S. The undertaking by the City to pay any amounts under the Loan Agreement shall be a Iimited obligation payable solely from funds to be appropriated by the Council from time to time for such purpose. Nothing herein or in the Loan Agreement shall constitute a debt of the City within the meaning of any constitutional or statutory limitation or a pledge of the faith and credit or taxing power of the City. 6. The Council believes that funds sufficient to make payment of all amounts payable by the City under the Loan 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 Loan Agreement. The Council directs the City Manager or such other officer who may be charged with the responsibility for preparing the City's annual budget to include in the budget request for each fiscal year during the term of the Loan Agreement an amount sufficient to make the payment of all amounts payable under the Loan Agreement for such fiscal year. So long as the Note is outstanding, if at any time during any fiscal year of the City, the amount appropriated in the City's annual budget in such fiscal year is insufficient to pay when due the amounts payable by the City under the Loan Agreement, the Council directs the City Manager or such other officer who may be charged with the responsibility for preparing the City's annual budget to submit to the Council a request for a supplemental appropriation sufficient to cover the deficit. 7. The City covenants that it shall not take or omit to take any action the taking or omission of which will cause the Note to be an "arbitrage bond" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"), or otherwise cause interest on the Note 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 Note, unless the City receives an opinion of nationally recognized bond counsel that such compliance is not required to prevent interest on the Note from being includable 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. 8. Such officers of the City as may be requested by the City's bond counsel are hereby authorized and directed to execute an appropriate certificate setting forth (a) the expected use and investment of the proceeds of the Note in order to show that such expected use and investment will not violate the provisions of Section 148 of the Code and regulations issued pursuant thereto 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. 9. The City covenants that it shall not permit the proceeds of the Note or the facilities financed therewith to be used in any manner that would result in 5% or more of such proceeds or facilities, as applicable, (a) 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) 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) 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 Note from being includable in the gross income for federal income tax purposes of the registered owner thereof under existing law, the City need not comply with such covenants. 10. The Council has previously received and reviewed the Information Statement, describing the State Non -Arbitrage Program of the Commonwealth of Virginia ("SNAP") and the Contract Creating the State Non -Arbitrage Program Pool (the "Contract"), and the Council hereby authorizes the City Manager in his discretion to utilize SNAP in connection with the investment of the proceeds of the Note. The Council acknowledges that the Treasury Board of the Commonwealth of Virginia is not, and shall not be, in any way liable to the City in connection with SNAP, except as otherwise provided in the Contract. 11. All costs and expenses in connection with the undertaking of the City Projects and the issuance of the Note, including the Authority's fees and expenses and the fees and expenses of bond counsel, counsel for the Authority and counsel to the Lender, shall be paid from the proceeds of the Note or other legally available funds of the City. If for any reason the Note is not issued, it is understood that all such expenses shall be paid by the City from its legally available funds and that the Authority shall have no responsibility therefor. 12. All other actions of officers of the City in conformity with the purposes and intent of this Resolution and in furtherance of the plan of financing are hereby ratified, approved and confirmed. The officers of the City are hereby 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 completion of the plan of financing. 13. All resolutions or parts of resolutions in conflict herewith are repealed. 14. This Resolution shall take effect immediately upon its adoption. This resolution shall be effective as provided by law. Adopted: June 9, 2020 k9L 4,4 i, i4k, 4/ Mayor ATTEST: " V City Clerk The vote on the motion to approve was recorded as follows: VOTE: Councilmember DeMarco Aye Councilmember Lim Aye Councilmember Miller Aye Councilmember Passey Aye Councilmember Stehle Aye Councilmember Yi Aye