19981222 r-98-67RESOLUTION NO. R-98-67
RESOLUTION APPROVING A PLAN OF FINANCING WITH
THE INDUSTRIAL DEVELOPMENT AUTHORITY
OF THE CITY OF FAIRFAX, VIRGINIA,
TO REFINANCE CERTAIN PROPERTY AND
APPROVE THE FORM OF CERTAIN DOCUMENTS
WItEREAS, pursuant to a Trust Agreement dated as &November 1, 1994 (the "1994
Trust Agreement"), between the Industrial Development Authority of the City of Fairfax,
Virginia (the "Authority") and Signet Trust Company, as trustee (succeeded in interest by The
Bank of New York), there were issued $2,790,000 Taxable Public Facility Lease Revenue
Bonds (City of Fairfax Project), Series of 1994 (the "1994 Bonds"), the proceeds of which were
used to finance the acquisition of certain Property (as hereinafter defined) and costs of issuing
the 1994 Bonds; and
WHEREAS, pursuant to the terms ora Lease Agreement dated as of November 1, 1994
(the "1994 Lease Agreement"), between the Authority and the City of Fairfax, Virginia (the
"City"), the Authority leased to the City the Property and all improvements thereto (the "1994
Project") in return for which the City has agreed to make certain payments of rent; and
WltEREAS, the City desires to undertake the refinancing of the Property through a
replacement of the 1994 Lease Agreement and the delivery of a new lease agreement by which
the Authority will issue lease revenue refunding bonds and use the proceeds thereof to refund
the 1994 Bonds and pay the costs of issuing such lease revenue refunding bonds (the "Project");
and
WHEREAS, the City requests the Authority to (a) issue its Taxable Public Facility
Lease Revenue Refunding Bonds (City of Fairfax Project), Series 1999 (the "Series 1999
Bonds"), in a maximum principal amount not to exceed $2,100,000, pursuant to the terms of the
Trust Agreement (as hereinafter defined), (b) use the proceeds of the Series 1999 Bonds to pay
the costs of the Project, including the costs of issuing the Series 1999 Bonds, (c) lease the
Property to the City pursuant to the terms of the Lease Agreement (as hereinafter defined) and
(d) secure the Series 1999 Bonds by an assignment to the Trustee (as hereinafter defined) of
certain rights of the Authority pursuant to the terms of the Assignment Agreement (as
hereinafter defined); and
WHEREAS, Crestar Bank (the "Purchaser") has offered to purchase the Series 1999
Bonds; and
WltEREAS, there have been presented to this meeting drafts of the following
documents (the "Documents"), proposed in connection with the undertaking of the Project and
the issuance and sale of the Series 1999 Bonds:
(a)
Lease Agreement, draft dated December __, 1998 (the "Lease Agreement"),
between the Authority and the City, conveying to the City a leasehold interest in
the Property;
(b)
Trust Agreement, draft dated December ~ 1998 (the "Trust Agreement"),
between the Authority and Crestar Bank, as trustee (the "Trustee"), including the
form the Series 1999 Bonds, pursuant to which the Series 1999 Bonds are to be
issued and which is to be acknowledged and consented to the City;
(c)
Assignment Agreement, draft dated December __, 1998 (the "Assignment
Agreement"), between the Authority and the Trustee, assigning certain of the
Authority's rights under the Lease Agreement to the Trustee; and
(d)
Bond Purchase Agreement, draft dated December ~ 1998 (the "Bond Purchase
Agreement"), between the Authority and the Purchaser, which is to be consented
to by the City;
R-98-67 -2
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY
OF FAIRFAX, VIRGINIA:
1. The following plan for financing the Project is approved. The Authority is
requested to issue and sell the Series 1999 Bonds in the maximum principal amount not to
exceed $2,100,000 to the Purchaser. The City will make payments of Basic Rent and Additional
Rent (each as defined in the Lease Agreement) to the Authority in amounts sufficient to
amortize the Series 1999 Bonds and to pay the fees or expenses of the Authority and the
Trustee. The obligation of the Authority to pay principal of and premium, if any, and interest on
the Series 1999 Bonds will be limited to payments of Basic Rent and Additional Rent received
from the City. The obligation of the City to make payments of Basic Rent and Additional Rent
will be subject to the City Council making annual appropriations in sufficient amounts for such
purposes. If the City exercises its right not to appropriate money for such payments, the Trustee
shall have the right to terminate the Lease Agreement and to exercise any remedies provided in
the Lease Agreement upon an event of non-appropriation. The plan of financing for the Project
shall contain such additional requirements and provisions as may be approved by the City
Manager.
2. The Project is hereby declared to be essential to the efficient operation of the
City, and the City Council anticipates that Project will continue to be essential to the operation
of the City during the term of the Lease Agreement. 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 annual appropriations in future fiscal years in
amounts sufficient to make all payments under the Lease Agreement and hereby recommends
that future City Councils do likewise during the terms of the Lease Agreement.
3. The City Manager is hereby authorized and directed to execute the Documents,
which shall be in substantially the forms submitted to this meeting, which are hereby approved,
with such completions, omissions, insertions and changes not inconsistent with this Resolution
as may be approved by the City Manager, his execution to constitute conclusive evidence of his
approval of any such completions, omissions, insertions and changes. The City Manager is also
authorized to cause such of the Documents as are necessary to be recorded in the Clerk's Office
of the Circuit Court of Fairfax County, Virginia.
4. In making completions to the Lease Agreement, the City Manager shall provide
for payments of rent in amounts equivalent to the payments on the Series 1999 Bonds, which
shall be sold to the Purchaser on terms as shall be satisfactory to the City Manager; provided
that the payments of rent shall be equivalent to the Series 1999 Bonds maturing in installments
of combined principal and interest commencing in the year 1999 and ending not later than in
2004; having a principal amount not exceeding $2,100,000; bearing interest at a rate not
exceeding 5.68% per year; being subject to optional redemption at a premium not exceed 2.0%
of their principal amount; and being sold to the Purchaser at a price not less than 100.0% of the
aggregate principal amount thereof. The City Manager is further authorized to approve (a) a
lesser principal amount for the Series 1999 Bonds and (b) a maturity schedule for the Series
1999 Bonds as the City Manager shall determine to be in the best interest of the City.
Following the sale of the Series 1999 Bonds, the City Manager shall evidence his
approval of the final terms and purchase price of the Series 1999 Bonds by executing the Bond
Purchase Agreement. The actions of the City Manager in approving the terms of the Series
1999 Bonds shall be conclusive, and no further action shall be necessary on the part of the City
Council. As set forth in the Lease Agreement, the City agrees to pay such "late charges" and
other charges as provided therein.
5. Any authorization herein to execute a document shall include authorization to
deliver it to the other parties thereto and to record such document where appropriate.
R-98-67 -3
6. All other acts of the City Manager, the Director of Finance and other officers
of the City that are in conformity with the purposes and intent of this Resolution and in
furtherance of the issuance and sale of the Series 1999 Bonds and the undertaking of the
Project is hereby approved and ratified.
7. This Resolution shall take effect immediately.
Introduced:
Adopted:
December 8, 1998
December 22, 1998
The motion to adopt the resolution was approved and recorded as follows:
Councilman Coughlan
Councilman Greenfield
Councilman Lederer
Councilman Petersen
Councilman Rasmussen
Councilman Silverthome
Vote
Aye
Aye
Aye
Aye
Aye
Aye
ATTEST:
Mayor