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R-24-32RESOLUTION NO. R-24-32 RESOLUTION APPROVING A FISCAL YEAR 2025 PLAN TO FINANCE VARIOUS PUBLIC FACILITIES PROJECTS THROUGH THE ISSUANCE OF ONE OR MORE SERIES OF REVENUE OBLIGATIONS BY THE CITY OF FAIRFAX ECONOMIC DEVELOPMENT AUTHORITY, AUTHORIZING THE EXECUTION AND DELIVERY OF CERTAIN FINANCING DOCUMENTS IN CONNECTION THEREWITH AND APPROVING THE FORMS OF SUCH DOCUMENTS WHEREAS, the City of Fairfax Economic Development Authority (the "Authority") has been duly organized pursuant to Chapter 643 of the Virginia Acts of Assembly of 1964, as amended (the "Act"), and possesses the powers set forth in the Act and, with respect to the power to issue bonds, the powers conferred on industrial development authorities pursuant to Chapter 33 of Title 15.1 of the Code of Virginia of 1950, as amended (together with the Act, the "Enabling Legislation"); WHEREAS, the Authority is authorized to exercise all the powers set forth in the Enabling Legislation which include, among other things, the power to finance and refinance facilities for use by, among others, a locality, to issue its revenue bonds, notes and other obligations from time to time for such purposes and to pledge all or any part of its revenues as security for the payment of the principal of and premium, if any, and interest on any such obligations; WHEREAS, in furtherance of the purposes of the Enabling Legislation, the City Council (the "City Council") of the City of Fairfax, Virginia (the "City"), has determined to request the Authority to undertake one or more projects, and the Authority has determined to issue from time to time, its public facility revenue bonds and notes and to use the proceeds thereof to finance costs incurred in connection with such projects for the benefit of the City; WHEREAS, such bonds and notes will be issued pursuant to the terms of the Agreement of Trust dated as of November 1, 2023, as supplemented (the "Master Trust"), between the Authority and Truist Bank, as trustee (the "Trustee"), and will be secured by payments appropriated from time to time by the City Council and payable to the Authority in accordance with the terms of the Financing Agreement dated as of November 1, 2023, as supplemented (the "Master Financing Agreement"), between the Authority and the City; WHEREAS, the City Council desires to finance or reimburse, in conjunction with the Authority, the costs of certain projects in the City's Capital Improvement Plan, including (without limitation) capital expenditures related to the following governmental purposes: (a) parks, recreation and cultural and (b) fire, police and other public safety (collectively, the "Series 2025 Project"); WHEREAS, the City Council desires that the Authority issue revenue obligations in the form of one or more series of notes or bonds (such obligations collectively referred to herein as the "2025 Bonds"), and use the proceeds thereof to (a) finance or reimburse the costs of the Series 2025 Project, (b) pay, if and as desired, interest on the 2025 Bonds for up to one year following completion of the Series 2025 Project, (c) fund, if and as desired, reserve funds for the 2025 Bonds, and (d) pay the related costs of issuance; and WHEREAS, the 2025 Bonds will be issued and sold in one or more series pursuant to the following documents (collectively, the "Documents"), which documents shall be in substantially the forms of the documents of the same or similar name used in connection with the issuance and sale of the Authority's Public Facility Revenue Bonds (City of Fairfax Project), Series 2023, for the benefit of the City (the "2023 Bonds"), with such completions, omissions, insertions and other changes as shall be approved by the City Manager in consultation with the City Attorney and the City's bond counsel: (a) a Second Supplemental Agreement of Trust (the "Supplemental Agreement" and together with the Master Trust, the "Trust Agreement"), between the Authority and the Trustee, pursuant to which the 2025 Bonds are to be issued and which is to be acknowledged and consented to by the City; (b) a First Supplemental Financing Agreement (the "Supplemental Financing Agreement" and together with the Master Financing Agreement, the "Financing Agreement"), between the Authority and the City, pursuant to which the City will undertake, subject to appropriation, to make payments to the Authority in amounts sufficient to pay the principal of and premium, if any, and interest on the 2025 Bonds and certain other related costs; (c) a Preliminary Official Statement of the Authority relating to the public offering of the 2025 Bonds (the "Preliminary Official Statement"); and (d) a Continuing Disclosure Agreement (attached as Appendix F to the Preliminary Official Statement), pursuant to which the City agrees to undertake certain continuing disclosure obligations with respect to the 2025 Bonds; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAIRFAX, VIRGINIA: 1. The City Council City Council hereby finds that the undertaking of the Series 2025 Project and the financing thereof will be in the best interests of the City and its citizens. The City Council hereby requests that the Authority undertake the following plan to issue the 2025 Bonds for such purposes. The Authority will issue the 2025 Bonds (in one or more series) and use the proceeds thereof to (a) finance or reimburse the costs of the Series 2025 Project, (b) pay, if and as desired, interest on the 2025 Bonds for up to one year following completion of the Series 2025 Project, (c) fund, if and as desired, reserve funds for the 2025 Bonds, and (d) pay the related costs of issuance. Pursuant to the Financing Agreement, the City will undertake to make certain Basic Payments and Additional Payments (each as defined in the Financing Agreement) to the Authority in amounts sufficient to amortize the 2025 Bonds, to pay the fees or expenses of the Authority and the Trustee and to pay certain other related costs. The obligation of the Authority to pay principal of and premium, if any, and interest on the 2025 Bonds will be limited to the Basic Payments and Additional Payments received from the City. The 2025 Bonds will be secured by an assignment of the Basic Payments and certain Additional Payments due under the Financing Agreement, all for the benefit of the holders of the 2025 Bonds. The undertaking by the City to make Basic Payments and Additional Payments will be subject to the appropriation by the City Council from time to time of sufficient amounts for such purposes. The plan to issue the 2025 Bonds and to finance the Series 2025 Project shall contain such additional requirements and provisions as may be approved by the City Manager (the "City Manager," which term as used herein shall also include the Chief Financial Officer of the City) in collaboration with the Chair or Vice -Chair of the Authority. 2. The City Council, while recognizing that it is not empowered to make any binding commitment to make appropriations beyond the current fiscal year, hereby states its intent to make appropriations in future fiscal years in amounts sufficient to make all payments due under the Financing Agreement and hereby recommends that future City Councils do likewise during the term of the 2025 Bonds. The City Council hereby confirms that the facilities and purposes of the Series 2025 Project are either essential to the efficient operation of the City or important to the welfare or quality of life of City residents, and the City Council anticipates that such facilities and purposes will continue to be so during the term of the 2025 Bonds. 3. The City Council hereby authorizes the Documents to be prepared in the manner described above, and further authorizes and directs the Mayor and the City Manager, either of whom may act, to execute the Documents to which the City is a signatory, with such completions, omissions, insertions and other changes not inconsistent with this Resolution as may be approved by the officer signing such Documents. Such officer's execution and delivery thereof shall constitute conclusive evidence of such officer's approval of any such completions, omissions, insertions and other changes. 4. In making completions to the Financing Agreement (which may relate to one or more series of 2025 Bonds), the City Manager, in collaboration with Davenport & Company LLC as the City's financial advisor (the "Financial Advisor"), and the Authority, shall provide for Basic Payments and Additional Payments in amounts equivalent to the payments on the 2025 Bonds and certain related costs and expenses, which Bonds shall be sold to the purchaser(s) thereof on terms as shall be satisfactory to the City Manager. The City Council consents to the issuance by the Authority of one or more series of 2025 Bonds pursuant to the provisions of the Trust Agreement; provided that (a) the aggregate principal amount of all series of 2025 Bonds shall not exceed $54,500,000, (b) the "true" or "Canadian" interest cost of the 2025 Bonds of any series issued on a federally tax-exempt basis shall not exceed 6.0% (taking into account any original issue discount or premium), (c) the "true" or "Canadian" interest cost of the 2025 Bonds of any series issued on a federally taxable basis shall not exceed 6.0% (taking into account any original issue discount or premium), (d) the 2025 Bonds of any series shall mature or be subject to mandatory sinking fund redemption in installments ending not later than December 31, 2050, (e) the 2025 Bonds of any series shall be sold to the purchaser(s) thereof at a purchase price not less than 98% of the aggregate principal amount thereof (without taking into account any original issue discount or premium), (f) the 2025 Bonds, if subject to optional redemption, shall not have a redemption premium exceeding 2.0% of the principal amount to be redeemed or a "make whole" redemption premium, and (g) no 2025 Bonds may be issued after June 30, 2025, without further approval by the City Council. The City Manager is also authorized to approve, in collaboration with the Chair or Vice -Chair of the Authority, the timing for the issuance of the 2025 Bonds of any series, the determination of whether the 2025 Bonds of any series are issued on a federally tax-exempt or taxable basis, the aggregate principal amount of each series (subject to the aggregate limit for all 2025 Bonds set forth in clause (a)), the maturity schedule (including serial maturities and term maturities for the 2025 Bonds) for each series and the redemption provisions for each series, all as the City Manager shall determine to be in the best interests of the City. 5. The City Council hereby approves the following terms of sale for the 2025 Bonds of any series: (a) Each series of 2025 Bonds shall be sold through a competitive sale or a negotiated sale, as the City Manager, in collaboration with the Financial Advisor and the Authority, determines to be in the best interests of the City. (b) If the City Manager determines that a series of 2025 Bonds shall be sold by competitive sale, the City Manager is hereby authorized to receive bids for such Bonds and award such Bonds to the bidder providing the lowest "true" or "Canadian" interest cost, subject to the limitations set forth in Section 4. Following a competitive sale, the City Manager shall, in collaboration with the Chair or Vice - Chair of the Authority, file a certificate with the Authority and the City Council setting forth the final terms of such Bonds. The actions of the City Manager, in collaboration with the Chair or Vice -Chair of the Authority, in selling such Bonds by competitive sale shall be conclusive, and no further action with respect to the sale and issuance of such Bonds shall be necessary on the part of the City Council. (c) If a series of 2025 Bonds is sold by competitive sale, the City Manager, in collaboration with the Financial Advisor, is hereby authorized and directed to take all proper steps to advertise such Bonds for sale pursuant to the terms of a notice of sale, the form of which shall be prepared by the Financial Advisor and the City's bond counsel and approved by the City Manager. (d) If the City Manager determines that a series of 2025 Bonds shall be sold by negotiated sale, the City Manager is hereby authorized, in collaboration with the Financial Advisor and the Authority, to choose one or more investment banks or firms to serve as underwriter(s) for such Bonds and to execute and deliver to the underwriter(s) a bond purchase agreement (a "Bond Purchase Agreement") in a form to be approved by the City Manager in consultation with the City Attorney and the City's bond counsel. The execution of a Bond Purchase Agreement by the City Manager shall constitute conclusive evidence of his approval thereof. Following a negotiated sale, the City Manager shall file a copy of the applicable Bond Purchase Agreement with the records of the City Council. The actions of the City Manager in selling such Bonds by negotiated sale to the underwriter(s) shall be conclusive, and no further action with respect to the sale and issuance of such Bonds shall be necessary on the part of the City Council. 6. The City Council hereby authorizes the preparation of the Preliminary Official Statement in a similar form to the Preliminary Official Statement for the 2023 Bonds, with such completions, omissions, insertions and other changes not inconsistent with this Resolution as may be approved by the City Manager. The City further authorizes distribution of the Preliminary Official Statement to prospective purchasers of the 2025 Bonds of any series in a form deemed to be "final" (within the meaning of Rule 15c2-12 of the Securities and Exchange Commission (the "Rule")) as of its date, except for the omission of certain pricing and other information permitted to be omitted pursuant to the Rule. Such distribution shall constitute conclusive evidence that the City has deemed the Preliminary Official Statement to be "final" (within the meaning of the Rule) as of its date. 7. The City Manager is hereby authorized and directed to approve such completions, omissions, insertions and other changes to the Preliminary Official Statement that are necessary to reflect the terms of sale of the particular series of 2025 Bonds, determined as set forth in Section 4, and the details thereof that are appropriate to complete it as an official statement in final form (the "Official Statement"), and distribution thereof to the purchaser(s) of such Bonds shall constitute conclusive evidence that the City has deemed the Official Statement "final" (within the meaning of the Rule) as of its date. 8. The City covenants that it shall not take or omit to take any action the taking or omission of which will cause any series of 2025 Bonds issued on a federally tax-exempt basis to be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"), and regulations thereunder, or otherwise cause interest on such Bonds to be includable in the gross income for federal income tax purposes of the holders thereof under existing law. Without limiting the generality of the foregoing, the City shall comply with any provision of existing law that may require the City at any time to rebate to the United States of America any part of the earnings derived from the investment of the gross proceeds of such Bonds. The City shall pay from its legally available general funds any amount required to be rebated to the United States of America pursuant to the Code. 9. The City covenants that during the term of the Financing Agreement it shall not permit the proceeds of any series of 2025 Bonds issued on a federally tax-exempt basis or the facilities financed therewith to be used in any manner that would result in (a) 10% 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, provided that no more than 5% of such proceeds may be used in a trade or business unrelated to the City's use of such facilities, (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 such Bonds from being includable in the gross income for federal income tax purposes of the holders thereof under existing law, the City need not comply with such covenants. 10. Such officers of the City as may be requested by bond counsel for the City are authorized and directed to execute an appropriate certificate setting forth (a) the expected use and investment of the proceeds of the Financing Agreement (derived from any 2025 Bonds issued on a federally tax-exempt basis) in order to show that such expected use 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 bond counsel for the City, and such elections shall be made after consultation with bond counsel. 11. All costs and expenses incurred in connection with the issuance of each series of 2025 Bonds and the financing of the Series 2025 Project, including the Authority's fees and expenses and the related fees and expenses of bond counsel, counsel for the Authority, and the Financial Advisor, shall be paid from the proceeds of the particular series of 2025 Bonds or other legally available funds of the City. If for any reason a series of 2025 Bonds is not issued, it is understood that all such fees and expenses incurred in connection with such series of 2025 Bonds shall be paid by the City from its legally available funds and that the Authority shall have no responsibility therefor. 12. Any authorization herein to execute a document shall include authorization to deliver it to the other parties thereto and, if applicable, to record such document where appropriate. 13. All other acts of the City Manager and other officers of the City heretofore taken that are in conformity with the purposes and intent of this Resolution and in furtherance of the issuance and sale of the 2025 Bonds and the financing of the Series 2025 Project are hereby authorized, approved and ratified. The City Manager and other officers of the City are hereby authorized and directed to execute and deliver all certificates and instruments and to take all such further actions as they may consider necessary or desirable in connection with the issuance of the 2025 Bonds and the financing of the Series 2025 Project. 14. This Resolution shall take effect immediately upon its adoption. Adopted: November 12, 2024 Mayor ATTEST: ALI_, City Clerk The vote on the motion to approve was recorded as follows: VOTE: Councilmember Bates Aye Councilmember Doyle Feingold Aye Councilmember Greenfield Aye Councilmember Lim Aye Councilmember Ross Aye Councilmember Stehle Aye