19770316 r-77-5RESOLUTION NO. R-77-5
WHEREAS, the City of Fairfax, Virginia, [hereinafter referred
to as "City"] entered into a certain agreement dated January 9,
1970, entitled "Capital Contributions Agreement", with the
Washington Metropolitan Area Transit Authority [hereinafter
referred to as "Authority"] and certain local political subdivi-
sions to provide for the construction of a regional rapid rail
transit system; and,
WHEREAS, at or about the same time the City was requested to
enter into a transit service agreement with the Authority to
provide for the apportionment of any deficit incurred in the
operation of the said regional rapid rail transit system and for
the funding of a portion thereof by the City; and,
WHEREAS, during the consideration of that agreement, Jackson
Graham, the General Manager of the Authority, advised the City,
by letter dated April 17, 1969, that, prior to the commencement
of revenue transit operations at the Nutley Road Station, "no
liability for any portion of an operating deficit would accrue to
Fairfax City since no trains in revenue service would then be
stopping at the Nutley Road Station"; and,
WHEREAS, on November 20, 1973, at the request of the Authorit~
the City Council adopted a resolution whereby the Council pledged:
[T]hat it will take all action necessary to make
sufficient financial assistance available to
enable the Authority to meet its obligations to
the United States under agreements between the
Authority and the Secretary of Transportation
entered into pursuant to the revenue bond guarantee
provisions of the National Capital Transportation
Act of 1972, such assistance to be provided jointly
by the parties to the Capital Contributions Agree-
ment of January 9, 1970, entered into by the Author-
ity and the Washington Suburban Transit District,
the District of Columbia, the Counties of Arlington
and Fairfax, and the Cities of Alexandria, Falls
Church and Fairfax, and in the same proportions as
are determined for the contributions of the respec-
tive signatories in accordance with Schedule "B"
attached to and made a part of said agreement;
and,
R-77-5 -2
WHEREAS, at the time of the adoption of said resolution the
Authority advised the City that the original and then current
financial plans assumed that fares would rise in direct proportion
to the costs of operation as the Authority, by the terms of its
Compact, is required to establish fares at a level sufficient to
pay operating expenses, debt service and other costs unless the
local jurisdictions agree to fund any operating deficits; and,
WHEREAS, the Authority issued certain bonded indebtedness
t~hereafter to be paid from the operational revenues of the rapid
rail transit system; and,
WHEREAS, the Authority has failed to establish fares at
a level sufficient to pay operating expenses, debt service, and
other costs; and,
WHEREAS, the City has been informed that the Authority is
unable to meet the debt service requirements for its outstanding
transit revenue bonds and that the Authority intends to default,
in part, in its payment of such obligations; and,
WHEREAS, the City has never agreed to fund any operating
deficits for the said regional rapid rail transit system and it
has never agreed to incur any liability for any portion of such
an operating deficit; and,
WHEREAS, the Authority and the other political subdivisions
which are signatories to the Capital Contributions Agreement
dated January 9, 1970, have breached the said Agreement with
the City; and,
WHEREAS, it is unlikely that the regional rapid rail transit
system will ever be extended to the Nutley Road Station to serve
the City; and,
WHEREAS, the Authority, by letter dated March 2, 1977, has
requested that the City enter into a transit service agreement
with the Authority to provide for payment by the City of certain
R-77-5
-3
deficits incurred in rail operations not serving the City; and,
WHEREAS, in light of the breach of the Capital Contributions
Agreement by the Authority and the other political subdivisions,
and in view of the improbability of any portion of the regional
rapid rail transit system serving the City hereafter, it would
not appear to be appropriate or proper for the City to incur any
additional obligations in furtherance of a rapid rail transit
system which does not serve the City.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of
Fairfax, Virginia, that the City will not assume liability for
deficits incurred by the Authority in the operation of the regional
rapid rail transit system until such time as the City expressly
consents to the assumption of such liabilities by subsequent writte
agreement with the Authority and the other political subdivisions.
BE IT FURTHER RESOLVED that any liability for operating
expenses, debt service or other costs in excess of revenues incurre
by the Authority or the other political subdivisions shall be the
exclusive responsibility and obligation of the Authority and the
other political subdivisions, and the City hereby expressly dis-
claims liability for any such operating expenses, debt service or
other costs until such time as the City expressly consents to the
assumption of such liabilities by subsequent written agreement
with the Authority and the other political subdivisions.
BE IT FURTHER RESOLVED that in the event of any claim against
the City for such operating expenses, debt service or other costs
by any person or entity, including the government of the United
States, the City shall look to and require the Authority and the
other political subdivisions to hold it harmless from any such
claim and to indemnify the City from any amounts for which the
City may be determined to be liable by a court of competent juris-
diction.
BE IT FURTHER RESOLVED that the City Clerk forward a
certified copy of this Resolution to the Authority, each political
subdivision which is a signatory to the Capital Contributions
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Agreement and Guaranty Agreement, and to the Secretary of the
United States Department of Transportation.
Adopted: March 15, 1977
Attest:
C~ty C~erk