19940322 r-94-11RESOLUTION NO. R-94- 11
RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF
GENERAL OBLIGATION WATER BONDS, SERIES OF 1994, IN
THE MAXIMUM AMOUNT OF $2,010,000, OF THE CITY OF
FAIRFAX, VIRGINIA, AND PROVIDING FOR THE FORM,
DETAILS AND PAYMENT THEREOF
WHEREAS, the issuance of bonds by the City of Fairfax,
Virginia (the "City"), in the maximum amount of $2,011,000 was
approved by the qualified voters of the City at an election held
on November 2, 1993, to finance improvements to its water system
(the "Project"), none of which bonds have been issued;
WHEREAS, the City Council has determined that it is in the
best interest of the City to sell $2,010,000 of such bonds for the
Project, and to sell such bonds as a single issue;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF FAIRFAX, VIRGINIA:
1. Authorization, Issuance and Sale. There is hereby
authorized to be issued and sold, pursuant to the Constitution and
statutes of the Commonwealth of Virginia, including the Public
Finance Act of 1991, general obligation water bonds of the city in
the maximum principal amount of $2,010,000 to pay costs of
financing the Project and to pay costs incurred in connection with
issuing such bonds.
2. Bond Details. The Bonds shall be designated "General
Obligation Water Bonds, Series of 1994," shall be dated May 1,
1994, shall be in registered form, in denominations of $5,000 and
multiples thereof, and shall be numbered R-1 upward. Subject to
paragraph 8, the Bonds shall mature in installments on each May 1
beginning no later than the year 1995 and ending no later than the
year 2014. Interest on the Bonds shall be payable from their date
beginning May 1, 1994, and semiannually on each May 1 and November
I thereafter. The City Council authorizes the issuance and sale
of the Bonds on terms as shall be satisfactory to the City Manager;
provided, however, that the Bonds (a) shall have a net interest
cost not to exceed 6.5% taking into account any original issue
discount or premium, and (b) shall be sold at a price not less than
100% of the original aggregate principal amount thereof (excluding
any original issue discount). Principal and premium, if any, shall
be payable to the registered owners upon surrender of Bonds as they
become due at the office of the Registrar, as defined below.
Interest shall be payable by check or draft mailed to the regis-
tered owners at their addresses as they appear on the registration
books kept by the Registrar on the fifteenth day of the month
preceding each interest payment date. Principal, premium, if any,
and interest shall be payable in lawful money of the United States
of America.
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 shall enter into a Letter of Representations relating to a
book-entry system to be maintained by DTC with respect to the
Bonds. "Securities Depository" shall mean DTC or any other
securities depository for the Bonds appointed pursuant to this
Section.
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In the event that (a) 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 its
responsibilities hereunder, or (b) the City in its sole discretion
determines (i) that beneficial owners of Bonds shall be able to
obtain certificated Bonds or (ii) 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 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
5; provided, however, that such form shall provide for interest on
the Bonds to be payable (A) from the date of the Bonds if they are
authenticated prior to the first interest payment date, or (B)
otherwise 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 such Bonds shall be payable from the date to which interest has
been paid). In delivering certificated Bonds, the chief financial
officer 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 beneficial
owners. Such certificated Bonds will then be registrable,
transferable and exchangeable as set forth in Section 7.
So long as there is a Securities Depository for the Bonds (1)
it or its nominee shall be the registered owner of the Bonds, (2)
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 Securi-
ties Depository and shall be effected pursuant to rules and
procedures established by such Securities Depository, (3) 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, (4) 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
(5) in the event of any inconsistency between the provisions of
this Resolution and the provisions of the above-referenced Letter
of Representations, such provisions of the Letter of Representa-
tions, except to the extent set forth in this paragraph and the
next preceding paragraph, shall control.
3. Redemption Provisions. The Bonds may be subject to
redemption prior to maturity at the option of the City on or after
dates, if any, determined by the City Manager, in whole or in part
at any time, at a redemption price equal to the principal amount
of the Bonds, together with any accrued interest to the redemption
date, plus a redemption premium not to exceed 3% of the principal
amount of the Bonds, such redemption premium to be determined by
the City Manager.
If less than all of the Bonds are called for redemption, the
Bonds to be redeemed shall be selected by the chief financial
officer of the City in such manner as he may determine to be in the
best interest of the City. If less than all the Bonds of any
maturity are called for redemption, the Bonds to be redeemed shall
be selected by DTC or any successor 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, (a) the portion of any Bond to be redeemed shall be in the
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principal amount of $5,000 or some integral multiple thereof and
(b) in selecting Bonds for redemption, each Bond shall be consid-
ered 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
transmission, registered or certified mail or overnight express
delivery, not less than 30 nor more than 60 days prior to the
redemption date, to DTC or its nominee as the registered owner of
the Bonds. The City shall not be responsible for mailing notice
of redemption to anyone other than DTC or another qualified
securities depository or its nominee unless no qualified securities
depository is the registered owner of the Bonds. If no qualified
securities depository is the registered owner of the Bonds, notice
of redemption shall be mailed to the registered owners 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 hereof.
4. Execution and Authentication. The Bonds shall be signed
by the manual or facsimile signature of the Mayor of the City,
shall be countersigned by the manual or facsimile signature of the
City Clerk and the City's seal shall be affixed thereto or a
facsimile thereof printed thereon; provided, however, that if both
of such signatures are facsimiles, no Bond 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.
Bond Form. The Bonds shall be in substantially the
following form:
REGISTERED
REGISTERED
No. R-
UNITED STATES OF AMERICA
COMMONWEALTH OF VIRGINIA
CITY OF FAIRFAX
General Obligation Water Bond, Series of 1994
INTEREST RATE MATURITY DATE DATED DATE
CUSIP
% May 1,
May 1, 1994 304081
REGISTERED OWNER:
PRINCIPAL AMOUNT:
CEDE & CO.
DOLLARS
The City of Fairfax, Virginia (the "city"), for value
received, promises to pay, upon surrender hereof to the registered
owner thereof, or registered assigns or legal representative, the
principal sum stated above on the maturity date stated above,
subject to prior redemption as hereinafter provided, and to pay
interest hereon semiannually from its date on each May I and
November 1, beginning May 1, 1994, at the annual rate stated above.
Principal, premium, if any, and interest are payable in lawful
money of the United States of America by the City Treasurer, who
has been appointed Registrar (the "Registrar"). Notwithstanding
any other provision hereof, this bond is subject to a book-entry
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system maintained by The Depository Trust Company ("DTC"), and the
payment of principal and premium, if any, and interest, the
providing of notices and other matters shall be made as described
in the City's Letter of Representations to DTC.
This bond is one of an issue of $2,010,000 General Obligation
Water Bonds, Series of 1994, of like date and tenor, except as to
number, denomination, rate of interest, privilege of redemption and
maturity, and is issued pursuant to the Constitution and statutes
of the Commonwealth of Virginia, including the Public Finance Act
of 1991. The bonds have been authorized and issued pursuant to a
resolution adopted by the City Council of the City (the "City
Council") on March , 1994, and were approved at an election on
November 2, 1993, to provide funds to finance certain improvements
to the City's water system.
Bonds maturing on or before May 1, __, are not subject to
redemption prior to maturity. Bonds maturing on or after May 1,
, are subject to redemption prior to maturity at the option of
the City on or after May 1, __, in whole at any time or in part
on any interest payment date, upon payment of the following
redemption prices (expressed as a percentage of principal amount
of bonds to be redeemed) plus interest accrued and unpaid to the
redemption date:
Period During Which Redeemed
Both Dates Inclusive
Redemption
Price
If less than all of the bonds are called for redemption, the
bonds to be redeemed shall be selected by the chief financial
officer of the City in such manner as he may determine to be in the
best interest of the City. If less than all the bonds of a
particular maturity are called for redemption, the bonds to be
redeemed shall be selected by DTC or any successor securities
depository pursuant to its rules and p~ocedures 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 deter-
mine. In either case, (a) the portion of any bond to be redeemed
shall be in the principal amount of $5,000 or some integral
multiple thereof and (b) 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 transmission, registered or certified mail or
overnight express delivery, not less than 30 nor more than 60 days
prior to the redemption date, to DTC or its nominee as the
registered owner of the bonds.
The City is required to charge rates or fees to users of its
water system, to fix and maintain such rates or fees at such level
as will produce sufficient revenues to pay all costs of operation
and the principal of and premium, if any, and interest on the bonds
and any other bonds heretofore or hereafter issued on account of
such system and secured by a pledge of water revenues, as the same
become due. In addition, the full faith and credit of the City are
irrevocably pledged for the payment of principal of and premium,
if any, and interest on this bond.
All acts, conditions and things required by the Constitution
and statutes of the Commonwealth of Virginia to happen, exist or
be performed precedent to and in the issuance of this bond have
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happened, exist and have been performed, and the issue of bonds of
which this bond is one, together with all other indebtedness of the
City, is within every debt and other limit prescribed by the
Constitution and statutes of the Commonwealth of Virginia.
IN WITNESS WHEREOF, the City Council of the City of Fairfax,
Virginia, has caused this Bond to be issued in the name of the city
of Fairfax, Virginia, to be signed by its Mayor, its seal to be
affixed hereto and attested by the signature of its City Clerk, and
this bond to be dated May 1, 1994.
ATTESTED:
city Clerk, city of Fairfax
Virginia
(SEAL)
Mayor, city of Fairfax,
Virginia
ASSIGNMENT
FOR VALUE RECEIVED the undersigned sell(s), assign(s) and
transfer(s) unto
(Please print or type name and
address, including postal zip code, of Transferee)
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF TRANSFEREE:
the within bond and all rights thereunder, hereby irrevocably
constituting and appointing
, Attorney, to transfer
said bond on the books kept for the registration thereof, with full
power of substitution in the premises.
Dated:
Signature Guaranteed
NOTICE: Signature(s) must be
guaranteed by a member firm
of the New York Stock
Exchange or a commercial bank
or trust company.
(Signature of Registered Owner)
NOTICE: The signature above
must correspond with the name
of the registered owner as it
appears on the front of this
bond in every particular,
without alteration or enlarge-
ment or any change whatsoever.
6. Pledge of Full Faith and Credit and Revenues. The full faith
and credit of the City are irrevocably pledged for the payment of
principal of and premium, if any, and interest on the Bonds.
It is hereby covenanted and agreed with the holders of the
Bonds that so long as any of the Bonds are outstanding and unpaid
the City shall:
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(a) charge rates or fees to users of its water system
and fix and maintain such rates or fees at such level as will
produce sufficient revenues to pay the cost of operation and
administration, the cost of insurance against loss by injury to
persons or property and the principal of and premium, if any, and
interest on the Bonds authorized hereby and any other bonds
heretofore or hereafter issued on account of such system and
secured by a pledge of water revenues, as the same become due;
(b) apply the revenues derived from the operation of
such system in each fiscal year first to the payment of such costs
of operation, administration and insurance during such year and
then to the payment of principal of and premium, if any, and
interest on the Bonds and any other bonds heretofore or hereafter
issued on account of such system and secured by a pledge of water
revenues becoming due in such year;
(c) unless other funds are lawfully available and
appropriated for timely payment of the Bonds, 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 the
principal of and premium, if any, and interest on the Bonds, as the
same become due; and
(d) segregate and keep segregated from all other City
funds all revenues derived from the operation of such system and
keep proper records and accounts therefor, separate and apart from
all other records and accounts.
7. Registration, Transfer and Owners of Bonds. The City
Treasurer is appointed paying agent and registrar for the Bonds
(the "Registrar"). If no qualified securities depository is the
registered owner of the Bonds, the city may appoint a qualified
bank or trust company as paying agent and registrar of the Bonds.
The Registrar shall maintain registration books for the registra-
tion of Bonds. Upon surrender of any Bonds at the office of the
Registrar, together with an assignment duly executed by the
registered owner or his duly authorized attorney or legal represen-
tative in such form as shall be satisfactory to the Registrar, the
City shall execute and the Registrar shall authenticate 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 his 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, premium, if any, 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 fifteenth day of
the month preceding each interest payment date.
8. Sale of Bonds. The City Council approves the following
terms of the sale of the Bonds. The Bonds will be sold by competi-
tive bid, and the City Manager, in collaboration with Municipal
Advisors Incorporated, the City's financial Advisor (the "Financial
Advisor"), shall receive bids for the Bonds and award the Bonds to
the bidder providing the lowest net interest cost, all subject to
the limitations set forth in paragraph 2. The City Council further
authorizes the City Manager, in collaboration with the Financial
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Advisor to (a) determine the principal amount of the Bonds, subject
to the limitations set forth in paragraph 1, (b) determine the
maturity schedule of the Bonds, subject to the limitations set
forth in paragraph 2, and (c) establish the redemption provisions,
if any, for the Bonds, subject to the limitations set forth in
paragraph 3. Prior to the sale of the Bonds, the City Manager, in
collaboration with the Financial Advisor, may change the dated date
of the Bonds to a date later than May 1, 1994, to facilitate the
sale and delivery of the Bonds. Following the sale of the Bonds,
the City Manager shall file a certificate with the City Clerk
setting forth the final terms and purchase price of the Bonds. The
actions of the city Manager in selling the Bonds shall be conclu-
sive, and no further action with respect to the sale and issuance
of the Bonds shall be necessary on the part of the City Council.
9. Notice of Sale. The City Manager, in collaboration with
the Financial Advisor, is authorized and directed to take all
proper steps to have prepared and distributed, in accordance with
standard practices of municipal securities, a notice of sale to
advertise the Bonds for sale. Such notice of sale shall be in a
form that is not inconsistent with the provisions of this Resolu-
tion and as the City Manager may consider to be in the best
interest of the City.
10. Official Statement. The City Manager and the Director
of Finance, in collaboration with the Financial Advisor, are autho-
rized and directed to have prepared and distributed, in accordance
with standard practices of municipal securities, a Preliminary
Official Statement of the City describing the Bonds. The City
Manager and the Director of Finance, in collaboration with the
Financial Advisor, shall make such completions, omissions,
insertions and changes not inconsistent with this Resolution as the
City Manager and the Director of Finance, in collaboration with the
Financial Advisor, may consider appropriate. The City Manager and
the Director of Finance shall make such completions, omissions,
insertions and changes in the Preliminary Official Statement not
inconsistent with this Resolution as are necessary or desirable to
complete it as a final Official Statement. The City shall arrange
for the delivery to the underwriter 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 underwriter initially sells Bonds.
11. official Statement Deemed Final. The City Manager and
the Director of Finance are authorized, on behalf of the City, to
deem the Preliminary Official Statement and the final official
Statement to be final as of their dates within the meaning of Rule
15c2-12 of the Securities and Exchange Commission, except for the
omission from the Preliminary Official Statement of such pricing
and other information permitted to be omitted pursuant to such
Rule. The distribution of the Preliminary Official Statement and
the Official Statement shall be conclusive evidence that each has
been deemed final.
12. Preparation and Delivery of Bonds. The officers of the
City 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 underwriter upon payment therefor.
13. Arbitrage Covenants. (a) Except for the city's general
obligation public improvement bonds in the maximum amount of
$7,560,000, the City represents that there have not been issued,
and covenants that there will not be issued, any obligations that
will be treated as part of the same issue of obligations as the
Bonds within the meaning of the Code.
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(b) The City covenants that it shall not take or omit
to take any action the taking or omission of which will cause the
Bonds to be "arbitrage bonds" within the meaning of Section 148 ofI
the Code, or otherwise cause interest on the Bonds to be includable
in the gross income of the registered owners thereof under existing
statutes. Without limiting the generality of the foregoing, the
City shall comply with any provision of law which 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.
14. Non-Arbitrage Certificate and Elections. 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 proceeds of the Bonds, 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.
15. Limitation on Private Use. The City covenants that it
shall not permit the proceeds of the Bonds to be used in any manner
that would result in (a) 5% or more of such proceeds being used in
a trade or business carried on by any person other than a govern-
mental unit, as provided in Section 141(b) of the Code, (b) 5% or
more of such proceeds 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 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. Qualified Tax-Exempt Obligations. The City designates
the Bonds as "qualified tax-exempt obligations" for the purpose of
Section 265(b)(3) of the Code. The city represents and covenants
as follows:
(a) The City will in no event designate more than
$10,000,000 of obligations as qualified tax-exempt obligations in
1994, including the Bonds, for the purpose of such Section
265(b) (3);
(b) The City, all its "subordinate entities," within the
meaning of such Section 265(b)(3), and all entities which issue
tax-exempt obligations on behalf of the City and its subordinate
entities have not issued, in the aggregate, more than $10,000,000
of tax-exempt obligations in 1994 (not including "private activity
bonds," within the meaning of Code Section 141, other than
"qualified 501(c)(3) bonds," within the meaning of Section 145 of
the Code), including the Bonds;
(c) Barring circumstances unforeseen as of the date of
delivery of the Bonds, the City will not issue tax-exempt obliga-
tions itself or approve the issuance of tax-exempt obligations of
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any of such other entities if the issuance of such tax-exempt
obligations would, when aggregated with all other tax-exempt
obligations theretofore issued by the City and such other entities
in 1994, result in the City and such other entities having issued
a total of more than $10,000,000 of tax-exempt obligations in 1994
(not including private activity bonds other than qualified
501(c)(3) bonds), including the Bonds; and
(d) The City has no reason to believe that the City and
such other entities will issue tax-exempt obligations in 1994,
issued in an aggregate amount that will exceed such $10,000,000
limit; provided, however, that if the City receives an opinion of
nationally recognized bond counsel that compliance with any
covenant set forth in (a) or (c) above is not required for the
Bonds, the City need not comply with such covenant.
17. Other Actions. Ail 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 are approvedl
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.
18. Repeal of Conflicting Resolutions. Ail resolutions or
parts of resolutions in conflict herewith are repealed.
19. Effective Date. This Resolution shall take effect
immediately.
Adopted this 22nd day of March, 1994.
Attest:
c TY
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