Loading...
R-21-07RESOLUTION NO. R-21-07 RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF GENERAL OBLIGATION REFUNDING BONDS OF THE CITY OF FAIRFAX, VIRGINIA, IN THE MAXIMUM PRINCIPAL AMOUNT OF $22,500,000 PROVIDING FOR THE FORM, DETAILS AND PAYMENT THEREOF AND PROVIDING FOR THE REFUNDING OF CERTAIN OUTSTANDING GENERAL OBLIGATION BONDS OF THE CITY WHEREAS, on August 4, 2016, the City of Fairfax, Virginia (the "City"), issued its $I8,871,000 General Obligation Refunding Bond, Series 2016A (the 112016A Bond"); WHEREAS, on August 19, 2016, the City issued its $3,235,000 General Obligation Refunding Bond, Series 2016B (the "2016B Bond" and, together with the 2016A Bond, the "2016 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 (i) the refunding of all or a portion of the 2016 Bonds (such refunded portions, the "Refunded Bonds") and (ii) the issuance and sale of a series of general obligation refunding bonds (as more particularly described hereinafter, the "Bonds"), if acceptable debt service savings can be achieved; WHEREAS, the City's administration, in collaboration with the Financial Advisor, has solicited proposals from commercial banking and other financial institutions to provide a direct bank loan to the City to be evidenced by the purchase of the Bonds (a "Direct Bank Loan"), and eight proposals have been received; WHEREAS, the City's administration, in collaboration with the Financial Advisor, has reviewed the proposals and advised that, while the City can realize reasonable debt service savings through a Direct Bank Loan with one or more of the proposers, the City may be able to realize greater debt service savings by selling the Bonds through a public offering either by a competitive sale (a "Competitive Sale") or a negotiated underwriting (a "Negotiated Sale"); WHEREAS, the City Council desires to issue and sell the Bonds to refund the Refunded Bonds and to pay the related costs of issuance and refunding; and WHEREAS, to best position the City to maximize the amount debt service savings realized through the issuance of the Bonds and the refunding of the Refunded Bonds, the City Council desires to delegate to the City Manager the authority to determine (a) the method by which the Bonds shall be sold, (b) the entity to whom the sale of the Bonds shall be awarded (in any of the funding options the purchaser(s) of the Bonds shall be referred to herein as the "Purchaser"), (c) the final terms of the Bonds within certain parameters set forth below and (d) the portions, if any, of the 2016 Bonds that shall constitute the Refunded Bonds; 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 hereby authorizes the issuance and sale of the Bonds in the maximum aggregate principal amount of $22,500,000 to refund the Refunded Bonds and to pay related costs of issuance and refunding. 2. Bond Details. a. The City Council hereby authorizes the City Manager to undertake the issuance and sale of the Bonds and, subject to the terms of this Resolution, to determine the final terms of the Bonds as he shall deem to be in the best interests of the City. The City Manager is authorized to determine the appropriate series designation, the dated date, the record date(s) for registration (each a "Record Date") and the numbering for the Bonds. in no circumstances shall the Bonds (i) be issued in an aggregate principal amount exceeding the limits set forth in Section I above; (ii) have a "true" or "Canadian" interest cost exceeding 3.00% (taking into account any original issue discount or premium), (iii) be sold to the Purchaser at a price less than 98% of the original aggregate principal amount thereof (excluding any original issue discount or premium) or (iv) have a final maturity date later than December 31, 2030. Any refunding of the Refunded Bonds shall result in an aggregate net present value debt service savings to the City of at least 2.00% of the amount of such Refunded Bonds, as calculated by the Financial Advisor in accordance with industry standards. (b) Each Bond shall bear interest from its dated date at such rate as shall be determined at the time of sale and payable semi-annually on dates determined by the City Manager. Principal of and premium, if any, and interest on the Bonds shall be payable by wire transfer, check or draft sent to the registered owners as they appear on the registration books kept by the Registrar (as hereinafter defined) on the Record Date prior to each payment date. If any payment date is not a business day, such payment shall be made on the next succeeding business day with the same effect as if made on the stated payment date, and no additional interest shall accrue. Principal, premium, if any, and interest shall be payable in lawful money of the United States of America. 3. Methods of Sale; Award of Bonds. a. The Bonds shall be sold through a Direct Bank Loan, a Competitive Sale or a Negotiated Sale, as determined by the City Manager to be in the best interests of the City. (b) If the City Manager determines that the Bonds shall be sold through a Direct Bank Loan, the City Manager is authorized, on behalf of the City and in collaboration with the Financial Advisor, to determine which proposal offers the best terms to the City, and, subject to the limitations set forth in Sections 1 and 2, to arrange for the issuance and sale of the Bonds to the Purchaser. Following a Direct Bank Loan, the City Manager shall file a certificate with the City Council setting forth the final terms of the Bonds. The actions of the City Manager in selling the Bonds by Direct Bank Loan shall be conclusive, and no further action with respect to the sale and issuance of the Bonds shall be necessary on the part of the City Council. (c) If the City Manager determines that the Bonds shall be sold through a Competitive Sale, the City Manager is authorized, on behalf of the City and in collaboration with the Financial Advisor, to take all proper steps to advertise the Bonds for sale, to receive public bids and to award the Bonds to the bidder providing the lowest "true" or "Canadian" interest cost, subject to the limitations set forth in Sections 1 and 2. Following a Competitive Sale, the City Manager shall file a certificate with the City Council setting forth the final terms of the Bonds. The actions of the City Manager in selling the Bonds by Competitive Sale shall be conclusive, and no further action with respect to the sale and issuance of the Bonds shall be necessary on the part of the City Council. (d) If the City Manager determines that the Bonds shall be sold through a Negotiated Sale, the City Manager is authorized, on behalf of the City and in collaboration with the Financial Advisor, to choose an investment banking firm to serve as underwriter for the Bonds and to execute and deliver to the underwriter, as Purchaser of the Bonds, a bond purchase agreement reflecting the final terms of the Bonds. The bond purchase agreement shall be in a form approved by the City Manager, in collaboration with the City Attorney, the Financial Advisor and the City's bond counsel. The actions of the City Manager in selling the Bonds by Negotiated Sale shall be conclusive, and no further action with respect to the sale and issuance of the Bonds shall be necessary on the part of the City Council. (e) Following the determination of which method of sale shall be used, the City Manager is hereby authorized to determine (i) the principal amount of the Bonds, subject to the limitations set forth in Section 1, (ii) the interest rates of the Bonds, the maturity schedule of the Bonds and the price to be paid for the Bonds by the Purchaser, subject to the limitations set forth in Section 2, (iii) the redemption provisions of the Bonds, subject to the limitations set forth in Section 5, and (iv) the dated date, the principal and interest payment dates and the Record Dates of the Bonds, all as the City Manager determines to be in the best interests of the City. 4. Securities Depository Provisions for Public Sale. If the Bonds are sold through a Negotiated Sale or a Competitive Sale, the following provisions shall apply: (a) Initially, one Bond certificate for each maturity of the Bonds shall be issued to and registered in the name of The Depository Trust Company, New York, New York ("DTC"), or its nominee. The City has heretofore entered into a Blanket Letter of Representations relating to a book -entry system to be maintained by DTC with respect to the Bonds. The defined term "Securities Depository" shall mean DTC or any other securities depository for the Bonds appointed pursuant to this Section. (b) In the event that (i) the Securities Depository determines not to continue to act as the securities depository for the Bonds by giving notice to the Registrar, and the City discharges the Securities Depository of its responsibilities with respect to the Bonds, or (ii) the City in its sole discretion determines (A) that beneficial owners of the Bonds shall be able to obtain certificated Bonds or (B) to select a new Securities Depository, then its chief financial officer shall, at the direction of the City, attempt to locate another qualified securities depository to serve as Securities Depository and authenticate and deliver certificated Bonds to the new Securities Depository or its nominee, or authenticate and deliver certificated Bonds to the beneficial owners or to the Securities Depository participants on behalf of beneficial owners substantially in the form provided for in Section 7; provided, however, that such form shall provide for interest on the Bonds to be payable (1) from the date of the Bonds if they are authenticated prior to the first interest payment date or otherwise (2) from the interest payment date that is or immediately precedes the date on which the Bonds are authenticated (unless payment of interest thereon is in default, in which case interest on the Bonds shall be payable from the last date to which interest has been paid). In delivering certificated Bonds, the chief financial officer of the City shall be entitled to rely on the records of the Securities Depository as to the beneficial owners or the records of the Securities Depository participants acting on behalf of the beneficial owners. Such certificated Bonds will then be registrable, transferable and exchangeable as set forth in Section 9. (c) So long as there is a Securities Depository for the Bonds (i) it or its nominee shall be the registered owner of the Bonds, (ii) notwithstanding anything to the contrary in this Resolution, determinations of persons entitled to payment of principal, premium, if any, and interest, transfers of ownership and exchanges and receipt of notices shall be the responsibility of the Securities Depository and shall be effected pursuant to rules and procedures established by such Securities Depository, (iii) the Registrar and the City shall not be responsible or liable for maintaining, supervising or reviewing the records maintained by the Securities Depository, its participants or persons acting through such participants, (iv) references in this Resolution to registered owners of the Bonds shall mean such Securities Depository or its nominee and shall not mean the beneficial owners of the Bonds and (v) in the event of any inconsistency between the provisions of this Resolution and the provisions of the above -referenced Blanket Letter of Representations, such provisions of the Blanket Letter of Representations, except to the extent set forth in this Subsection and Subsection 4(b), shall control. 5. Redemption Provisions. (a.) Subject to the limitations contained herein, the City Manager is hereby authorized to determine the redemption provisions of the Bonds, including provisions for optional, extraordinary and mandatory sinking fund redemption. (b) The Bonds may be subject to redemption prior to maturity at the option of the City on or after the dates, if any, determined by the City Manager, in whole or in part at any time, at redemption price(s) that the City Manager determines to be in the best interests of the City based on financial market conditions, together with any interest accrued to the date fixed for redemption. Such redemption price terms may include traditional redemption prices not to exceed 103% of the principal amount to be redeemed, as well as "make whole" redemption prices. (c) Any Bonds sold as term bonds may be subject to mandatory sinking fund redemption upon terms determined by the City Manager. (d) If less than all of the Bonds are called for redemption, the maturities of the Bonds to be redeemed shall be selected by the chief financial officer of the City in such manner as such officer may determine to be in the best interests of the City. In the case of a Competitive Sale or a Negotiated Sale, if less than all the Bonds of a maturity are called for redemption, the Bonds within such maturity to be redeemed shall be selected by the Securities Depository pursuant to its rules and procedures or, if the book -entry system is discontinued, shall be selected by the Registrar by lot in such manner as the Registrar in its discretion may determine. In either case, (i) the portion of any Bond to be redeemed shall be in the principal amount of $5,000 or some integral multiple thereof and (ii) in selecting Bonds for redemption, each Bond shall be considered as representing that number of Bonds that is obtained by dividing the principal amount of such Bond by $5,000. The City shall cause notice of the call for redemption identifying the Bonds or portions thereof to be redeemed to be sent by facsimile or electronic transmission, registered or certified mail or overnight express delivery, not less than 30 nor more than 60 days prior to the date fixed for redemption, to the registered owner(s) of such Bonds. In all circumstances, the City shall only be responsible for giving notice of redemption to the registered owner of the Bonds, which, in the case of Bonds sold through a Competitive Sale or a Negotiated Sale, shall be DTC or another qualified securities depository or its nominee (unless no qualified securities depository is then serving as the registered owner of the Bonds). If a portion of a Bond is called for redemption, a new Bond in principal amount equal to the unredeemed portion thereof will be issued to the registered owner upon the surrender thereof. (e) In the case of an optional redemption, the notice may state that (i) it is conditioned upon the deposit of moneys, in an amount equal to the amount necessary to effect the redemption, no later than the date fixed for redemption or (ii) the City retains the right to rescind such notice on or prior to the date fixed for redemption (in either case, a "Conditional Redemption"), and such notice and optional redemption shall be of no effect if such moneys are not so deposited or if the notice is rescinded as described herein. Any Conditional Redemption may be rescinded at any time. The City shall give prompt notice of such rescission to the holder(s) of the affected Bonds. Any Bonds subject to Conditional Redemption where redemption has been rescinded shall remain outstanding, and the rescission shall not constitute an event of default. Further, in the case of a Conditional Redemption, the failure of the City to make funds available on or before the date fixed for redemption shall not constitute an event of default, and the City shall give immediate notice to all organizations registered with the Securities and Exchange Commission (the "SEC") as securities depositories or the holder(s) of the affected Bonds that the redemption did not occur and that the Bonds called for redemption and not so paid remain outstanding. 6. 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. 7. Bond Form. The Bonds 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 Bonds, whose approval shall be evidenced conclusively by the execution and delivery of the Bonds. 8. Pledge of Full Faith and Credit. The full faith and credit of the City are irrevocably pledged for the payment of the principal of and premium, if any, 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 annually, at the same time and in the same manner as other taxes of the City are assessed, levied and collected, an ad valorem tax upon all taxable property within the City, over and above all other taxes, authorized or limited by law and without limitation as to rate or amount, sufficient to pay when due the principal of and premium, if any, and interest on the Bonds. 9. 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 Manager is hereby authorized, on behalf of the City, to appoint a qualified bank or trust company as successor paying agent and registrar of the Bonds if at any time the City Manager determines such appointment is in the best interests of the City. The Registrar shall maintain registration books for the registration of the Bonds and transfers thereof. Upon presentation and surrender of any Bonds 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 the owner's 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 the name(s) as requested by the then registered owner or such owner's 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 the principal of and premium, if any, and interest on the Bonds 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 applicable Record Date. 10. Preparation and Delivery of Bonds. After the Bonds have been awarded, 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 terms and to deliver the Bonds to the Purchaser upon payment therefor. 11. Deposit of Bond Proceeds. The City Treasurer is authorized and directed to provide for delivery of the proceeds of the Bonds in such manner as necessary to (a) refund the Refunded Bonds and (b) 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. 12. Redemption of Refunded Bonds. The City Manager is authorized and directed to (a) determine which portions, if any, of the 2016 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. 13. Arbitrage Covenants. The City covenants that it shall not take or omit to take any action the taking or omission of which will cause any of the Bonds to be "arbitrage bonds" (within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, and regulations issued pursuant thereto (the "Code")), or otherwise cause interest on any of 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 any part of the earnings derived from the investment of the gross proceeds of the Bonds, unless the City receives an opinion of nationally recognized bond counsel that such compliance is not required to prevent interest on the Bonds 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 its legally available funds. 14. 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 Bonds 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. 15. Limitation on Private Use. The City covenants that it shall not permit the proceeds of the Bonds 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 any of the Bonds 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. 16. Official Statement. If the Bonds are to be sold in a Competitive Sale or a Negotiated Sale, the City Manager is authorized to prepare a Preliminary Official Statement (the "Preliminary Official Statement") describing the Bonds by which the Bonds will be offered for sale, in a form that shall be consistent with prior offering materials of the City, with such completions, omissions, insertions and changes not inconsistent with this Resolution as the City Manager may consider appropriate. The City Manager is authorized and directed to execute an Official Statement in final form (the "Official Statement") and deliver it to the Purchaser. The Official Statement shall be in substantially the form of the Preliminary Official Statement, with such completions, omissions, insertions and other changes as may be approved by the City Manager, the execution thereof by the City Manager to constitute conclusive evidence of his approval of any such completions, omissions, insertions and changes. The City shall arrange for the delivery to the Purchaser of a reasonable number of copies of the final Official Statement, within seven business days after the Bonds have been sold, for delivery to each potential investor requesting a copy of the Official Statement and to each person to whom the Purchaser initially sells Bonds. 17. Official Statement Deemed Final. The City Manager is hereby authorized, on behalf of the City, to deem the Preliminary Official Statement and the Official Statement in final form, each to be final as of its date within the meaning of Rule 15c2-12 (the "Rule") of the SEC, except for the omission in the Preliminary Official Statement of certain pricing and other information permitted to be omitted pursuant to the Rule. The distribution of the Preliminary Official Statement and the execution and delivery of the Official Statement in final form shall be conclusive evidence that each has been deemed "final" as of its date by the City, except for the omission in the Preliminary Official Statement of such pricing and other information permitted to be omitted pursuant to the Rule. 18. Continuing Disclosure Agreement. If the Bonds are to be sold by a Competitive Sale or a Negotiated Sale, the Mayor, the City Manager and such officer or officers of the City as either may designate, any of whom may act, are hereby authorized and directed to execute a continuing disclosure agreement (the "Continuing Disclosure Agreement") setting forth the reports and notices to be filed by the City and containing such covenants as may be necessary to assist the Purchaser in complying with the provisions of the Rule promulgated by the SEC. The Continuing Disclosure Agreement shall be substantially in the form appearing as an appendix to the draft Preliminary Official Statement described above, which agreement is hereby approved for purposes of the Bonds; provided that the City Manager, in collaboration with the Financial Advisor and the City's bond counsel, may make such changes to the provisions of the Continuing Disclosure Agreement not inconsistent with this Resolution as the City Manager may consider to be in the best interests of the City. The execution thereof by such officers shall constitute conclusive evidence of their approval of any such completions, omissions, insertions and changes. 19. 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. 20. 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. 21. Repeal of Conflicting Resolutions. All prior resolutions or parts of resolutions in conflict herewith are repealed. 22. Effective Date. This Resolution shall take effect immediately. Adopted: February 9, 2021 Mayor ATTEST: The vote on the motion to approve was recorded as follows: VOTE: Councilmember Harmon Aye Councilmember Lim Aye Councilmember Miller Aye Councilmember Ross Aye Councilmember Stehle Aye Councilmember Yi Aye