OCTOBER 24, 1977 Res re PA CorpITEM #1142]
Final negotiations for the purchase and acquisition of Princess Anne, Aragona and
Pembroke Utilities have been completed. Revenue projections have been made on
the system, and it is anticipated that th(* purchase of these utilities and cost
of improvements can be borne solely by tht? present and future customers within
the present certificated area of the private utilities. Through research by
officials of the State Corporation Commission, the City Manager determined that
this is the largest private utility purchase made by a municipality in the history
of the Commonwealth of Virginia. The report prepared by Hayes, Seay, Mattern and
Mattern places the value to be greater than $15 million, and as Council is aware,
the City will be acquiring it for $8.1 million.
The major aspects of the agreement are as follows:
$5.1 million will be paid for the stock in the
P. A. Corporation, which includes Princess Anne,
Aragona, and Pembroke Utilities.
$3 million will be paid to the Virginia National
Bank in order to liquidate debts owed it by the
P. A. Corporation.
3. Settlement date wi]l be December 15, 1977, and the
City will take over full operations at that time.
4. A 45-day joint control period will run from October 31
to December ]5, ]977.
5. October 31, 1977, will serve as the audit date for all
Corporation f~mds.
6. No expenditures or receipts after October ]1, 1977,
will be allowed without joint review.
Ail liabilities prior to closing date and any
representation warranty or condition contained
in the contract, will be indemnified by the $5.]
million.
After considerable discussion, Councilman Ferrel] made a motion, seconded by
Councilman Riggs, to adopt the following Resolution of the Council of the City
of Virginia Beach author[zing the execution of a contract to purchase the
stock of Princess Anne Corporation. The recorded vote ~s as follows:
Ayes: Councilmen John A. Baum, Robert B. Cromwell, ~lr., George R. Ferre]l, John
R. Griffin, Mayor Clarence A. Holland, J. Henry McCoy, Jr., J. Curtis Payne, Roger
L. Riggs, Vice Mayor Patrick L. Standing, and Floyd E. Waterfield, Jr.
Nays: Councilwoman Meycra E. Oberndorf*
Absent: None
City Council voted to adopt the following resolution of the Council of the City
of Virginia Beach authorizing the execution of a contract to purchase tbe stock
of Princess Anne Corporation:
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RESOLUTION OF THE COUNCIL OF THE CITY
OF VIRGINIA BEACH AUTHORIZING THE
EXECUTION OF A OC~TfRAC~ TO PURCHASE THE
STOCK OF PRINCESS ANNE CORPORATION
WHEREAS, on April 11, 1977, the City Council of t2]e City of Virginia
Beach authorized the City Manager to negotiate for the purchase of the water
and/or sewer systems operated by Aragona Utilities, Princess Anne Utilities and
Pembroke Utilities; and
WHEREAS, it appears that the most practical wry for the City to acquire
these systems is to purchase all the stock of Princess Anne Corporation which
owns all of the stock of these t~%ree companies and then to dissolve Princess
Anne Corporation and the companies and to integrate their water and/or sewer
systems into the City's water and sewer system; and
WHEREAS, there has been presented to the City Council the form of a
contract between Edward S. Garcia and John X. Aragona, as sellers and the
owners of all the stock of Princess Anne Corporation, and the City, which the
City proposes to execute to carry out the transactions described above, a copy
of which shall be filed with the minutes of t~is ~eeting; and
WHEREAS, there has ailso been presented to t3~e City Council a letter from
Virginia National Bank agreeing to accept certain revenue bends of the City
representing a portion of the purchase pr/ce of the stock of Princess Anne
Corporation, upon the execution of the above contract and the consu~nation of
the conditions and transactions set forth in sucL contract.
THEREFORE, BE IT RESOLVED BY THE COL~CIL OF THE CITY OF VIRGINIA BEAC~,
1. The execution of a Contract with Edward S. Garcia and John X. Aragona
for the purchase of all tJ]e stock of Princess ~ne Corporation is hereby
approved. The City Manager amd the City Clerk aze authorized and directed to
execute and deliver a Contract on behalf of the City for that purpose.
2. The delivery of certain revenue bends of the City to Virginia National
Bank, as a portion of the purchase price of the stock of Princess Anne Corpora-
tion, under the terms of the letter of Virginia National Bank is hereby approved.
The City Manager is hereby authorized to accept such letter from Virginia
National Bank on behalf of the City.
1¢)/74/77
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3. The contract and the letter shall be in substantially the form
of a contract and letter submitted to this meeting, which are hereby approved,
with such completions, omissions, insertions and changes as may be approved by
the City Manager and the City Attorney, execution by the City Manager to
constitute conclusive evidence of his approval of any such omissions, insertions
and changes.
4. The appropriate officers of the City are hereby authorized and directed
to execute and deliver ali certificates and instrumants and to take all sud~
further action as they may consider necessary or desirable in connection with
the purchase of the stock of Princess Anne Corporation.
5. All other acts of the officers of ~J]e City which are in conformity with
the purposes and intent of this resolution and in furtherance of the purchase
of the stock of Princess Anne Corporation are hereby atmproved and confirmed.
Adopted by the Council of the C~ty of Virginia Beach, Virginia, approved on the
24th day of October, 197;
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10-24-77
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ITEM f~l142](h)
On motion by Councilman R~ggs, seconded by Councilman McCoy, and by recorded vote
as follows:
Ayes: Councilmen John A. Ba~m, Robert B.
R. Griffin, Mayor Clarence A. Holland, J.
L. Riggs, Vice Mayor Patrick L. Standing,
Cromwell, Jr., George R. Ferrell, John
Henry McCoy, Jr., J. Curtis Payne, Roger
and Floyd E. Waterf~eld, Jr.
Nays: Councilwoman Meyers E. Oberndorf
Absent: None
City Council voted to approve on first reading the following ordinance authorizing
the issuance of water and sewer revenue notes of the City of Virginia Beach, Virginia,
in an amount not to exceed $5,100,000 and $3,000,000 Water and Sewer Revenue Bonds of
the City of Virginia Beach, Virginia:
A~ ORDINANCE ~' ~l · ~'
A~.zh_RIZI~,G THE ISSUANCE
OF WATER A~D SE~.,~R RE\~NUE Nf~TES OF
~g CITY OF VIRGINIA BEACH, VIBCII~IA
IN AN ~-~OUNT NOT TO E):CEED $5,]00.000
AND $3,000,000 WATER AND SEWER ~VENUE
BONDS OF THE CI~ OF VIRGINIA BEACII,
VIRGINIy~
~rHEREAS, a~ z~ part of a program for acquiring water
and sewer facilities located within the bound~e~ of
City, the City Co~ncil ha~ dete~ined that it ~ desirable
to acquire the sewer gyst-~'ms of Princess Anne Utilitima
and Aragona U~ilitics and the water and sewer system
Pen/broke Utilitia~; and
WHEREAS, the City proposes t'o acqt~rc such systems
by the purchase of the stock of PA Corp. which ow~s ail the
stock of Aragona Utilities. Princess Anne Utilities and
Pembroke Utilities and following ~a:ah aCqilJsit~.o~ to dis-
solve the COrpOration~ and to integrate their water and/or
sewer systems into the City's wager and sewer
WHE~S, the City by regolt~gi, on (~dopted o~ October 24,
197~, has authorized the execution of a contract with the
o~m,~rs of all thc stock of PA Col'p. for the purcha,e of ,uch
st~ck (the Stock P0r~'ha~c Contract);
WIlE~kS, the City prop~se~ to pay for the acquSsStSon
of 8~.~c11 ~tock through the issuance of two ~ep;~rate isnt~am of
its obligati, o~lf; in an aggregate principal amo~t not to exceed
$8,100,000 as conlt, mplated by the f'~r"~l~";ng contract.
2.
THEREFORE.
CITY OF ViRGiNIA BEACH, VIRGINIA:
1. It is hereby determined to be
expedient for the Ci~y of Virginia Beach
sewer systems of Princess A~ne Utilitiv~
BE IT ORDAINED BY Tile COUNCIL OF THE
1~ e ce.~ s ~l~'y al]d
to acquire the
and Aragona utilities
and the water and sewer 0ystem of Pembroke Utilities through
the purchase of all ~he ~tock of PA Corp. and [o finance in
part such acquisition throngl~ the i%%S~nr,~a of $3,000,000
water at~tl sewer revenue bonds of the City and ;eater and sawer
revet%ue notes of the City in an amount not to exceed $5,100,000.
2. Pursuant to tho Authority of the Charter of the
City of Virginia Be.~ch (Chapter 147, Acts of Assembly of 1962,
as amended) and the Pub]it Finance Act. at; amended, there are
hereby authorized to ba if4soed ~
-- va,O00,O00 water and sewer
rever~ue bonds o£ th~ City of Virginia Beach and water and sewer
revenue note~ of thc City of Virginia Beach in an amount not
to exceed $5,100,000 to provide funds together with other funds
that may be available for the acquisition of Princess fume
through
Utilities, Aragona Utilities nl~d Pen~brr,ke
the purchase of all the stock of PA
3. The details of the bonds will be specified
~ appropriate resolution or resolutions adopted
hereto ~d will ba n~ nocct;sary to carry out the
the Stock Puraha~ Contract.
subr;equent
terms of
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4, The detail~ of the notes will be..Icczfxed in
an appropriate resolutJo~l or resolution.e odopted subsequenE
hereto and will be aa nece.~s0ry t'o carry out th~_ terms of
the Stock p ' -
- . urcnase {.(w~l.~act.
5, The bonds and r. he notes shall be limited obligations
of the City payable solely fromm thc revenues to be
from the water and sewer system of thc City~ Thru bouds ~:d
the notes shall state that they nh~i] ~ot bc deemed to create
or constitute a~] ~ndebtednesn of or a pledge of the full faith
and credit of the City, the Co~om,'e~tth of Virgin~ or any
political subdivisi~m of thru C~)mmcmw,%a]t}1~ The issuance
tile bonds and thc nc~tes and the undertaking of the covenant~,
cotldltions and agreements to be collt~;~ined in the re~oluti0n 0r
resolution~ to be adopted hare;fft',f shall not directly,
directly o~7 colltingcntly obl~gagc thc City. the Co~onwea]th,
Of ~y other political subdivision of '~
~c f.o~onw~alth
levy and collec~ any taxes whatsoever, therefor, or make any
appropri~3tion, therefor, exc(q~t from thc revenues of the
water and .-~
ocwer system pledged to payment o: pr~ncip;]l of and
interest on ghe bond and the
6. The ~t.,,olut~on c,r rcso]_ut~on~ to be adop~md hero-
after authorizing thc issuance of the honda a{'~d rile 3~tc~ and
providing the details thereof shall contain appropriate
coven;~ts requiring the City t:o fi~, c},;,tg, and collect such
rates, fees and other chorgc~ for tkc use of and for the
~..~]cd by its water and sewer .qystcm
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v~$e the same from time to time and as often as shall be
necessary .~o os to produce suffic~er}t net_ revenue.s ~.o pay
principal of .and interent on g}le bOnd~ and the nota~ as the
same become due and to provide a margin ~f ~ofety ~herefor,
Such resolution ahall also include such additional covenants,
agreements and other terms as ,gte c!]stomar¥ for the protection
of the holders of w,~ger aBd sewer ~evemm ob]igarAous,
First Reading:
Se..cond ~cadzng:
October ~4~ 1977
day of
Adopted by
· (-,Ounc!l Of V]rg~x~la Be~.~ch 0~ the
1977.
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10-20-77