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19900213 r-90-4RESOLUTION NO. R-90- 4 RESOLUTION PROVIDING FOR THE ISSUANCE OF $1,510,000 SCHOOL BONDS, SERIES 1990A, OF THE CITY OF FAIRFAX, VIRGINIA, HERETOFORE AUTHORIZED, TO BE SOLD TO THE VIRGINIA PUBLIC SCHOOL AUTHORITY, AND SETTING FORTH THE FORM AND DETAILS THEREOF WHEREAS, by ordinance adopted February 13, 1990, the City Council (the "Council") of the City of Fairfax, Virginia (the "City"), has determined that it is necessary and expedient to issue its general obligation bonds in the maximum amount of $1,510,000 to finance capital projects for school purposes, and to sell the same to the Virginia Public School Authority (the "VPSA"), which the City is authorized to do pursuant to S 22.1-166, Code of Virginia of 1950, as amended, without hold- ing an election to approve the authorizing ordinance as other- wise required by the City Charter; and WHEREAS, the VPSA has offered to purchase the City's $1,510,000 school bonds pursuant to a Bond Sale Agreement dated as of February 21, 1990 (the "Bond Sale Agreement"); NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FAIRFAX, VIRGINIA: 1. Authorization of Bonds and Use of Proceeds. The Council hereby determines that it is advisable to contract a debt and issue and sell general obligation bonds in the aggre- gate amount of $1,510,000 (the "Bonds") for the purpose of fi- nancing certain capital projects for public school purposes. The Council hereby authorizes the issuance and sale of the Bonds in the form and upon the terms established pursuant to this Resolution. 2. Sale of Bonds. It is determined to be in the best interest of the City to accept the offer of the VPSA to pur- chase the Bonds at par, and to sell the Bonds to the VPSA at par upon the terms established pursuant to this Resolution. The Mayor of the Council and the City's Director of Finance, or either of them, are hereby authorized and directed to exe- cute the Bond Sale Agreement in substantially the form sub- mitted to the Council herewith at this meeting, which form is hereby approved, and deliver such Bond Sale Agreement to the VPSA. 3. Details of Bonds. The Bonds shall be issuable in fully registered form in denominations of $5,000 and whole multiples thereof; shall be dated the date of their issuance and delivery; shall be designated "School Bonds, Series 1990A;" shall bear interest payable semi-annually on June 15 and December 15 (each an "Interest Payment Date"), beginning December 15, 1990, at the rate or rates, and shall mature on December 15 in the years (each a "Principal Payment Date") and in the amounts, established in accordance with paragraph 4 of this Resolution. Interest on each Bond shall be payable (a) from its date, if it is authenticated prior to December 15, 1990, or (b) otherwise from the June 15 or December 15 that is, or im- mediately precedes, the date on which it is authenticated (un- less payment of interest thereon is in default, in which case such Bond shall bear interest from the date to which interest has been paid). Principal shall be payable to the registered owners upon surrender of the Bonds as they become due at the principal corporate trust office of Sovran Bank, N.A., Richmond, Virginia (the Registrar). Interest shall be payable R-90-4 by check or draft mailed to the registered owners at their ad- dresses as they appear on registration books kept by the Reg- istrar on the first day of the month of the interest payment date. Principal and interest shall be payable in lawful money of the United States of America. 4. Award of Bonds; Interest Rates. The Director of Fi- nance is hereby authorized and directed to award the Bonds to the VPSA at a price of par and at an interest rate or rates established by the VPSA, provided that no such interest rate shall be more than one-tenth of one percent (1/10 of 1%) over the annual rate to be paid by the VPSA for the corresponding maturity of the bonds to be issued by the VPSA (the "VPSA Bonds"), the proceeds of which will be used to purchase the Bonds, and provided further, that no interest rate on the Bonds shall exceed nine percent (9%) per year. Principal of the Bonds shall be payable in installments in years and amounts as set forth on Exhibit A, without option of prior re- demption; provided, however, that the Director of Finance is hereby authorized to award the Bonds to the VPSA in accordance with a principal payment schedule different from that set forth in Exhibit A as the VPSA may propose, provided that such schedule shall provide for annual payments in the years 1990 through 1999, inclusive. The Bonds shall not be issued, how- ever, prior to the ratification by the Council of the final interest rate or rates and principal repayment schedule for the Bonds. The execution and delivery of the Bonds as de- scribed in Section 7 hereof shall conclusively evidence the same as having been approved and authorized by this Resolu- tion. 5. Form of Bonds When Owned by VPSA. For as long as the VPSA is the registered owner of the Bonds however, the Bonds shall be in the form of a single, temporary typewritten bond substantially in the form attached hereto as Exhibit B. Upon 20 days written notice from the VPSA, the City shall de- liver, at its expense, Bonds in marketable form in denomina- tions of $5,000 or any integral multiple, as requested by the VPSA, in exchange for the temporary typewritten Bond. Such Bonds in marketable form shall be in substantially the form of Exhibit B hereto, with such changes as shall be necessary or appropriate for the Bonds to be in marketable form, as are not inconsistent with the provisions of this Resolution and as may be approved by the officials of the City executing such Bonds. 6. Payment to VPSA; Paying Agent and Registrar. (a) For as long as the VPSA is the registered owner of the Bonds, all payments of principal of and interest on the Bonds shall be made in immediately available funds to the VPSA at or be- fore 11:00 a.m. (Richmond, Virginia, time) on the applicable Payment Date, or, if such date is not a business day for Vir- ginia banks or for the Commonwealth of Virginia, then at or before 11:00 a.m. (Richmond, Virginia, time) on the business day next preceding such Payment; and (b) Ail overdue payments of principal of or inter- est shall bear interest at the applicable interest rate or rates on the Bonds. 7. Execution of Bonds. 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 affixe~'thereto or a facsimile thereof printed t~he~'~on; prov' ~ l~.d, h~.,F~ver, that R-90-4 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. 8. Pledqe of Full Faith and Credit. For the timely payment of the principal of and the interest on the Bonds pro- vided for by this Resolution as the same shall become due, the full faith and credit of the City are hereby irrevocably pledged, and in each year while any of the Bonds shall be out- standing, unless other funds are lawfully available and appro- priated for timely payment of the Bonds, the Council shall levy and collect in accordance with law an annual ad valorem tax upon all taxable.property in the City subject to local taxation sufficient in amount to provide for the payment of the principal of and the interest on the Bonds as such princi- pal and interest shall become due, which tax shall be without limitation as to rate and amount and in addition to all other taxes authorized to be levied in the City. 9. School Board Approval. The City Clerk is hereby au- thorized and directed to cause a certified copy of this Reso- lution to be presented to the City School Board. The Bonds authorized hereby shall not be issued by the City until the City School Board shall have adopted an appropriate resolution requesting the issuance of the Bonds to finance the capital projects. 10. State Non-Arbitraqe Proqram; Proceeds Aqreement. In accordance with the requirements of the VPSA, the Council hereby determines that it is in the City's best interests to participate in the State Non-Arbitrage Program in connection with the Bonds, and hereby authorizes and directs the City Treasurer to take such action as shall be necessary or desir- able therefor. The appropriate officers of the City are hereby authorized and directed to execute and deliver a Pro- ceeds Agreement with respect to the deposit and investment of proceeds of the Bonds by and among the City, the other partic- ipants in the sale of the VPSA Bonds, the VPSA, Public Finan- cial Management, Inc., as investment manager, and Central Fi- delity Bank, as depository; provided, however, that such proceeds shall be invested in such manner that none of the Bonds will be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, including regulations applicable to the Bonds (the Code). The Proceeds Agreement shall be in such form as shall be approved by the City's bond counsel. 11. Maintenance of Tax-Exemption. The City hereby cove- nants that it shall not take or omit to take any action the taking or omission of which will cause the Bonds to be "arbi- trage bonds" within the meaning of Code Section 148, or other- wise cause interest on the Bonds to be includable in the gross income for federal income tax purposes of the registered own- ers thereof under existing law. Without limiting the general- ity 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 in- vestment of the gross proceeds of the Bonds. The City shall pay any such required rebate from its general funds. 12. Use of Proceeds Certificate. The appropriate offi- cers and agents of the City are hereby authorized and directed to execute a Use of Proceeds Certificate or Certificates -3- R-90-4 setting forth the expected use and investment of the proceeds of the bonds and containing such covenants as may be necessary in order to show compliance with the provisions of the Inter- nal Revenue Code of 1986, as amended (the "Code"), and appli- cable regulations relating to the exclusion from gross income of interest on the Bonds or on the VPSA Bonds. The City cove- nants that the proceeds from the issuance and sale of the Bonds will be invested and expended as set forth in such Use of Proceeds Certificate and that the City shall comply with the other covenants and representations contained therein. Furthermore, the City covenants that the City shall comply with the provisions of the Code so that interest on the Bonds and on the VPSA Bonds will remain excludable from gross income for Federal income tax purposes. Such certificate may also provide for any elections relating to the provisions of Code Section 148 as such officers deem desirable. 13. Restrictions on Private Use. The City covenants that it will not permit the gross 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 governmental unit, as provided in Code Section 141(b), (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 Code Sec- tion 141(b)(4), 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 Code Section 141(c); provided, however, that if the City receives an opin- ion of bond counsel to the City with respect to the Bonds, and bond counsel to the VPSA with respect to the VPSA Bonds, that compliance with any such restriction is not required to pre- vent interest on the bonds of both issues 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 restriction. 14. Qualification for "Small-Issuer" Status. hereby represents and covenants as follows: The City (a) The City, all its "subordinate entities," with- in the meaning of Code Section 148(f)(4)(iii), and all entities which issue tax-exempt obligations on behalf of the City and its subordinate entities, have together not issued more than $5,000,000 of tax-exempt obligations in 1990 (not including "private activity bonds," within the meaning of Code Section 141), including the Bonds; (b) Barring circumstances unforeseen as of the date of delivery of the Bonds, the City will not issue tax-exempt obligations itself or approve the issuance of tax-exempt obli- gations of any of such other entities if the issuance of such tax-exempt obligations would, when aggregated with all other tax-exempt obligations theretofore issued in 1990 by the City and such other entities, including the Bonds, result in the City and such other entities having issued a total of more than $5,000,000 of tax-exempt obligations in 1990 (not including private activity bonds); (c) The City has no reason to believe that the City and such other entities will [ssue tax-exempt obligations in 1990 in an aggregate amount that will exceed such $5,000,000 limit; and R-90-4 (d) At least 95% of the proceeds of the Bonds shall be used for "local government activities" of the City, within the meaning of Code Section 148(f)(4)(ii); provided, however, that if the City receives an opinion of bond counsel to the City with respect to the Bonds and bond counsel to the VPSA with respect to the VPSA Bonds that com- pliance with any restriction set forth in (b) or (d) above will not prevent the City from having to rebate to the United States any part of the earnings derived from the investment of the gross proceeds of the Bonds, the City need not comply with such restriction. 15. No Sale of Bonds of Same Issue. The City covenants that it will not, without the Authority's consent, sell or de- liver any general obligation bonds which are part of the same common plan of financing (and paid for from the same source of funds) as the Bonds between the dates that are 31 days prior to the date of sale of the VPSA Bonds and 31 days after the Closing Date. 16. Filinq of Resolution; Publication of Notice. The appropriate officers or agents of the City are hereby autho- rized and directed to cause a certified copy of this Resolu- tion to be filed with the Circuit Court of Fairfax County and, within ten (10) days thereafter, to cause to be published once in a newspaper having general circulation in the City a notice setting forth (a) in brief and general terms the purposes for which the Bonds are to be issued and (b) the amount of the Bonds. 17. Further Actions. Each member of the Council and all other officers, employees and agents of the City are hereby authorized to take such action as they or any one of them may consider necessary or desirable in connection with the issu- ance and sale of the Bonds, and any such action previously taken is hereby ratified and confirmed. 18. Repeal of Resolutions in Conflict. Ail resolutions or parts thereof in conflict herewith are hereby repealed. 19. Effective Date. immediately. This Resolution shall take effect ATTEST: R-90-4 Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 EXHIBIT A Principal Payment Schedule Amount $150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 160,000 R-90-4 EXHIBIT B (FORM OF TEMPORARY BOND) NO. TR-1 $1,510,000 UNITED STATES OF AMERICA COMMONWEALTH OF VIRGINIA CITY OF FAIRFAX School Bond, Series 1990A The CITY OF FAIRFAX, VIRGINIA (the "City"), for value received, hereby acknowledges itself indebted and prom- ises to pay to the VIRGINIA PUBLIC SCHOOL AUTHORITY the prin- cipal amount of ONE MILLION FIVE HUNDRED TEN THOUSAND DOLLARS ($1,510,000), in annual installments on December 15 of the years, together with interest on the unpaid installments at the annual rates set forth below from the date of this Bond until payment of the principal sum hereof, such interest to be payable commencing on December 15, 1990, and semi-annually thereafter on June 15 and December 15 of each year (each an "Interest Payment Date"; together with any Principal Payment Date, a "Payment Date"), as follows: Year of Principal Interest Year of Principal Interest Maturity Amount Rate Maturity Amount Rate 1990 $ % 1995 1991 1996 1992 1997 1993 1998 1994 1999 $ % without option of prepayment. Ail payments on this Bond are payable in lawful money of the United States of America. For as long as the Virginia Public School Authority is the registered owner of this Bond, Sovran Bank, N.A., Richmond, Virginia, as Bond Registrar, shall make all payments of principal of and interest on this Bond, without the presen- tation or surrender hereof, to the Virginia Public School Au- thority, in immediately available funds at or before 11:00 a.m. (Richmond, Virginia, time) on the applicable Payment Date. If a Payment Date is not a business day for banks in the Commonwealth of Virginia or for the Commonwealth of Vir- ginia, then the payment of principal of or interest on this Bond shall be made in immediately available funds at or before 11:00 a.m. (Richmond, Virginia, time) on the business day next preceding the scheduled Payment Date. Upon receipt by the registered owner of this Bond of said payments of principal and interest, written acknowledgement of the receipt thereof shall be given promptly to the Bond Registrar, and the City shall be fully discharged of its obligation on this Bond to the extent of the payment so made. Upon final payment, this Bond shall be surrendered to the Bond Registrar for cancella- tion. The full faith and credit of the City are irrevocably pledged for the payment of principal of and interest on this Bond. R-90-4 This Bond is duly authorized and issued in compliance with and pursuant to the Constitution and laws of the Common- wealth of Virginia, including the Public Finance Act, Chapter 5, Title 15.1, Code of Virginia 1950, as amended, and an ordi- nance and resolutions duly adopted by the City Council to pro- vide funds, together with other available funds, to finance capital projects for public schools. This Bond may be exchanged without cost at the principal corporate trust office of the Bond Registrar for an equal ag- gregate principal amount of bonds in definitive form having maturities and bearing interest at rates corresponding to the maturities of and the interest rates on the installments of principal of this Bond then unpaid, issuable in fully regis- tered form in the denomination of $5,000 or any integral mul- tiple thereof. This Bond is registered in the name of Virginia Public School Authority as to both principal and interest on books of the City kept by the Bond Registrar, and the transfer of this Bond may be effected by the registered owner of this Bond only upon due execution of an assignment by such registered owner. Upon receipt of such assignment and the surrender of this Bond, the Bond Register shall exchange this Bond for defini- tive Bonds as hereinabove provided, such definitive Bonds to be registered as to both principal and interest on such regis- tration books in the name of the assignee or assignees named in such assignment. Ail acts, conditions and things required by the Constitu- tion and laws of the Commonwealth of Virginia to happen, exist or be performed precedent to and in the issuance of this Bond have happened, exist and have been performed in due time, form and manner as so required, and this Bond, together with all other indebtedness of the City, is within every debt and other limit prescribed by the Constitution and laws of the Common- wealth of Virginia. IN WITNESS WHEREOF, the City of Fairfax, Virginia, has caused this Bond to be signed by its Mayor, to be counter- signed by its City Clerk, its seal to be affixed hereto, and this Bond to be dated __, 1990. COUNTERSIGNED: City Clerk, City of Fairfax, Virginia (SEAL) Mayor, City of Fairfax, Virginia B-2 R-90-4 ASSIGNMENT FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING ZIP CODE, OF ASSIGNEE) ' PLEASE INSERT SOCIAL SECU- RITY OR OTHER IDENTIFYING NUMER OF ASSIGNEE: the within Bond and irrevocably constitutes and appoints attorney to exchange said Bond for definitive bonds in lieu of which this Bond is issued and to register the transfer of such definitive bonds on the books kept for registration thereof, with full power of substitution in the premises. Date: 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.) 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 altera- tion or change.) B-3