02-11-19 SPECIAL FORMAL SESSION AGENDA CITY OF VIRGINIA BEACH
"COMMUNITY FOR A LIFETIME"
CITY COUNCIL G1NA'BEA0
MAYOR ROBERT M. "BOBBY"DYER,At LargeL. �.
VICE MAYOR JAMES WOOD,Lynnhaven-District 5 �� 4,'r'
JESSICA P.ABBOTT,Kempsville-District 2a N
BARBARA M.HENLEY,Princess Anne-District 7 V /„ ,� a
LOUIS R.JONES Bayside-District 4
SHANNON DS KANERose Hall-District 3 , . �_,y,/,/ �••
JOHN D.MOSS,At Large
DAVID NYGAARD,Beach-District 6 °F o°: ..°"•
AARON R.ROUSE,At Large
ROSEMARY WILSON,At Large
SABRINA D. WOOTEN,Centerville-District 1
CITY HALL BUILDING
CITY COUNCIL APPOINTEES SPECIAL FORMAL SESSION 2401 COURTHOUSE DRIVE
CITY MANAGER-DAVID L.HANSEN VIRGINIA BEACH, VIRGINIA 23456-9005
CITY ATTORNEY-MARK D.STILES PHONE: 57 385-4303
CITY ASSESSOR-RONALD D.AGNOR CITY COUNCIL AGENDA FAX(757)385-5669
CITYAUDITOR-LYNDON S.REMIAS E-MAIL:CITYCOUNCIL@vbgov.com
CITY CLERK-AMANDA BARNES February 11,2019
MAYOR ROBERT M. "BOBBY" DYER
PRESIDING
8:30 A.M.
I. CALL TO ORDER—Mayor Robert M. "Bobby" Dyer
II. MAYOR'S READING OF CALL TO SPECIAL FORMAL SESSION
III. RESOLUTION
1. Resolution to PROVIDE for the issuance and sale of Storm Water Utility Revenue Bonds,
Series 2019, in a maximum principal amount of$35-Million, PROVIDE for the form, details
and payments thereof to finance the cost of improvements to the Storm Water Utility System and
AUTHORIZE the execution and delivery of document related to such financing
IV. ADJOURNMENT
G1NIA•BE/r
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City of Virginia Beach
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VBgov.com
Robert M."Bobby"Dyer MUNICIPAL CENTER
MAYOR BUILDING 1
2401 COURTHOUSE DRIVE
February 8, 2019 VIRGINIA BEACH.VIRGINIA 23456-9000
(757)385-4581
CELL(757)749-4659
bdyer@vbgov.com
HONORABLE MEMBERS OF CITY COUNCIL
In accordance with the Virginia Beach City Code Section 2-21, and by the authority
vested in me as Mayor of the City of Virginia Beach, I hereby call for a SPECIAL
FORMAL SESSION of the VIRGINIA BEACH CITY COUNCIL:
Monday, February 11, 2019
8:30 A.M.
Parks and Recreation Administration Building
2154 Landstown Road
The purpose of this SPECIAL FORMAL SESSION is to vote on the Resolution of
the City of Virginia Beach, Virginia to Provide for the Issuance and Sale of Storm Water
Utility Revenue Bonds, Series 2019, in a Maximum Aggregate Principal Amount of$35-
Million Providing for the Form, Details and Payment Thereof to Finance the Cost of
Improvements to the City's Storm Water Utility System and Authorizing the Execution and
Delivery of Certain Documents Related to Such Financing.
Sincerely,
Robert M. Dyer
Mayor
Cc: City Manager
City Attorney
City Clerk
Deputy City Managers
Communications Office
1 RESOLUTION OF THE CITY OF VIRGINIA BEACH, VIRGINIA, TO
2 PROVIDE FOR THE ISSUANCE AND SALE OF STORM WATER
3 UTILITY REVENUE BONDS, SERIES 2019, IN A MAXIMUM
4 AGGREGATE PRINCIPAL AMOUNT OF $35,000,000, PROVIDING FOR
5 THE FORM, DETAILS AND PAYMENT THEREOF TO FINANCE THE
6 COST OF IMPROVEMENTS TO THE CITY'S STORM WATER UTILITY
7 SYSTEM AND AUTHORIZING THE EXECUTION AND DELIVERY OF
8 CERTAIN DOCUMENTS RELATED TO SUCH FINANCING
9
10 WHEREAS, the Council (the "Council") of the City of Virginia Beach, Virginia (the
11 "City"), desires to issue its storm water utility revenue bonds to finance the costs of
12 improvements and extensions to its storm water utility system (the "System");
13
14 WHEREAS, the Council has previously adopted ordinances authorizing the City's
15 issuance of storm water utility revenue bonds in principal amounts sufficient to permit
16 the issuance of $35,000,000 in principal amount of such bonds;
17
18 WHEREAS, the Council has determined that it is desirable and in the best
19 interests of the City to undertake in 2019 the issuance of $35,000,000 in maximum
20 aggregate principal amount of its storm water utility revenue bonds; and
21
22 WHEREAS, there have been presented to this meeting or otherwise made
23 available the following documents and draft documents in connection with the
24 undertaking of the above-described financing and refinancing and the issuance and sale
25 of such bonds:
26
27 (a) Agreement of Trust dated as of February 1, 2000, between the City
28 and U.S. Bank National Association (as successor to First Union
29 National Bank), as trustee (the "Trustee"), as previously amended
30 and supplemented (the "Master Agreement of Trust");
31
32 (b) Draft of Fourth Supplemental Agreement of Trust dated as of
33 February 1, 2019, between the City and the Trustee (the "Fourth
34 Supplemental Agreement" and, together with the Master
35 Agreement of Trust, the "Agreement of Trust"), pursuant to which
36 such bonds will be issued, and including the forms of such bonds
37 as an exhibit thereto;
38
39 (c) Draft of Notice of Sale to be dated on or about February 6, 2019, to
40 advertise such storm water utility revenue bonds for sale (the
41 "Notice of Sale");
42
43 (d) Draft of Preliminary Official Statement to be dated on or about
44 February 6, 2019 (the "Preliminary Official Statement"), relating to
45 the public offering of such bonds; and
46
1
47 (e) Draft of Continuing Disclosure Agreement dated as of February 1 ,
48 2019 (the "Continuing Disclosure Agreement"), pursuant to which
49 the City will agree to undertake continuing disclosure obligations
50 pursuant to Rule 15c2-12 promulgated by the Securities and
51 Exchange Commission, as amended (the "Rule"), for the benefit of
52 the holders of such bonds.
53
54 NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF
55 VIRGINIA BEACH, VIRGINIA:
56
57 1 . Authorization of Bonds and Use of Proceeds. The City hereby authorizes
58 the issuance and sale of its storm water utility revenue bonds in an aggregate principal
59 amount not to exceed $35,000,000 (the "Bonds"), in one or more series, pursuant to the
60 Constitution and statutes of the Commonwealth of Virginia, including the City Charter
61 and the Public Finance Act of 1991 , to finance the costs of improvements and
62 extensions to the System.
63
64 2. Fourth Supplemental Agreement. The City Manager is hereby authorized
65 and directed to execute and deliver the Fourth Supplemental Agreement, which shall be
66 in substantially the form presented to this meeting, which is hereby approved, with such
67 completions, omissions, insertions and changes not inconsistent with this Resolution as
68 the City Manager may approve. The springing amendment to the Agreement of Trust
69 set forth in Section 4.103 of the Fourth Supplemental Agreement is hereby approved.
70 The execution of the Fourth Supplemental Agreement by the City Manager shall
71 constitute conclusive evidence of his approval of any such completions, omissions,
72 insertions and changes.
73
74 3. Bond Details. The Bonds shall be designated "Storm Water Utility
75 Revenue Bonds, Series 2019," or such other designation as may be approved by the
76 City Manager, shall be dated the date determined by the City Manager, shall be in
77 registered form, in denominations of $5,000 and multiples thereof, and shall be
78 numbered R(2019)-1 upward. Each Bond shall bear interest at such rate as shall be
79 determined at the time of sale, payable semiannually on dates determined by the City
80 Manager, calculated on the basis of a 360-day year of twelve 30-day months.
81
82 The Council authorizes the issuance and sale of the Bonds in such principal
83 amounts and upon such terms as shall be determined by the City Manager provided
84 that the Bonds shall (a) have a true interest cost not exceeding 4.75% per year (taking
85 into account any original issue discount or premium), (b) have a final maturity no later
86 than the year 2044, (c) be sold at a price not less than 100% of the aggregate principal
87 amount thereof, and (d) be in an aggregate principal amount not exceeding
88 $35,000,000.
89
90 4. Preparation and Delivery of the Bonds. The Mayor is hereby authorized
91 and directed to execute the Bonds by manual or facsimile signature, the City Clerk is
92 hereby authorized and directed to countersign the Bonds and affix the seal of the City
2
93 thereto or cause a facsimile thereof to be printed thereon, and the officers of the City
94 are hereby authorized and directed to deliver the Bonds to the Registrar (as defined in
95 the Agreement of Trust) for authentication and delivery to the purchaser.
96
97 5. Pledge of Security. The Bonds shall be limited obligations of the City,
98 payable solely from Pledged Revenues (as defined in the Agreement of Trust) and the
99 funds created by the Agreement of Trust and pledged to the payment of the Bonds, and
100 nothing in the Bonds or the Agreement of Trust shall be deemed to create or constitute
101 an indebtedness or pledge of the full faith and credit of the Commonwealth of Virginia or
102 any political subdivision thereof, including the City.
103
104 6. Sale of Bonds. The Bonds shall be sold through a competitive sale. The
105 City Manager is authorized and directed to take all proper steps to finalize and
106 distribute, in accordance with standard practices of municipal securities, the Notice of
107 Sale, which shall be in substantially the form presented to the City Council prior to this
108 meeting, which is hereby approved, with such completions, omissions, insertions and
109 changes as the City Manager may approve to the reflect the terms of the Bonds
110 determined in accordance with this Resolution. The City Manager is authorized to
111 receive bids for the Bonds and to award the Bonds to the bidder providing the lowest
112 true interest cost, subject to the limitations set forth in Section 3 of this Resolution. The
113 actions of the City Manager in selling the Bonds by competitive sale shall be conclusive,
114 and no further action with respect to the sale and issuance of the Bonds shall be
115 necessary on the part of the Council.
116 7. Official Statement. The City Manager is hereby authorized and directed to
117 approve the distribution of the Preliminary Official Statement to potential purchasers of
118 the Bonds with such completions, omissions, insertions and other changes not
119 inconsistent with this Resolution as the City Manager, in collaboration with Butler Snow
120 LLP, as bond counsel for the Bonds ("Bond Counsel"), may consider appropriate to
121 complete it as an official statement in final form. The City Manager is authorized, on
122 behalf of the City, to deem the Preliminary Official Statement and the final Official
123 Statement to be "final" as of their dates within the meaning of the Rule, except for the
124 omission from the Preliminary Official Statement of certain pricing and other information
125 permitted to be omitted pursuant to the Rule. The City Manager is further authorized,
126 on behalf of the City, to execute the final Official Statement. The distribution of the
127 Preliminary Official Statement and the execution of the final Official Statement by the
128 City Manager shall be conclusive evidence that each has been approved and deemed
129 final.
130
131 8. Continuing Disclosure. The City Manager is hereby authorized and
132 directed to execute and deliver the Continuing Disclosure Agreement, which shall be in
133 substantially the form presented to the City Council prior to this meeting, which is
134 hereby approved, with such completions, omissions, insertions and changes not
135 inconsistent with this Resolution as the City Manager may approve. The execution of
136 the Continuing Disclosure Agreement by the City Manager shall constitute conclusive
137 evidence of his approval of any such completions, omissions, insertions and changes.
138
3
139 9. Non-Arbitrage Certificate and Elections. Such officers of the City as may
140 be requested by Bond Counsel are authorized and directed to (a) execute appropriate
141 certificates setting forth the expected use and investment of the proceeds of the Bonds
142 to show that such expected use and investment will not violate the provisions of Section
143 148 of the Code, and the regulations thereunder, applicable to "arbitrage bonds," (b)
144 make any elections that such officers deem desirable, in consultation with Bond
145 Counsel, regarding any provision requiring rebate to the United States of "arbitrage
146 profits" earned on investment of proceeds of the Bonds, and (c) file Internal Revenue
147 Service Form 8038-G. The foregoing shall be subject to the advice, approval and
148 direction of Bond Counsel.
149
150 10. Further Actions. All other actions of officers of the City that are in
151 conformity with the purposes and intent of this Resolution and in furtherance of the
152 issuance and sale of the Bonds, and the plan of financing and refinancing related
153 thereto, are hereby approved and ratified. The officers of the City are authorized and
154 directed to execute and deliver such further certificates and instruments and to take all
155 such further actions as may be considered necessary or desirable in connection with
156 the issuance, sale and delivery of the Bonds.
157
158 11. Effective Date. This Resolution shall take effect immediately.
159
160
161 Requires an affirmative vote by a majority of all of the members of City Council.
Adopted by the City Council of the City of Virginia Beach, Virginia, this
day of , 2019.
APPROVED AS TO CONTENT: APPROVED AS TO LEGAL
IENCY•
Finance Department City •ttorney's Office
CA14584
R-1
January 22, 2019
4
CERTIFICATE
The undersigned Clerk of the City Council (the "Council") of the City of Virginia
Beach, Virginia (the "City"), hereby certifies that:
1. A special meeting of the Council was duly called and held on February 11,
2019 (the "Meeting").
2 Attached hereto is a true, correct and complete copy of a resolution (the
"Resolution") of the Council entitled "Resolution of the Council of the City of Virginia
Beach, Virginia, to Provide for the Issuance and Sale of Storm Water Utility Revenue
Bonds, Series 2019, in a Maximum Aggregate Principal Amount of $35,000,000,
Providing for the Form, Details and Payment Thereof, to Finance the Cost of
Improvements to the City's Storm Water Utility System and Authorizing the Execution
and Delivery of Certain Documents Related Thereto," as recorded in full in the minutes
of the Meeting and duly adopted by a majority of all members of the Council.
3. A summary of the members of the Council present or absent at the
Meeting, and the recorded vote with respect to the Resolution, is set forth below:
Voting
Member Name Present Absent Yes No Abstaining
Robert M. Dyer, Mayor
James L. Wood, Vice Mayor
Jessica P. Abbott
Barbara M. Henley
Louis R. Jones
Shannon DS Kane
John D. Moss
David Nygaard
Aaron Roosevelt Rouse
Rosemary Wilson
Sabrina D. Wooten
4. The Resolution has not been repealed, revoked, rescinded or amended,
and is in full force and effect on the date hereof.
WITNESS MY HAND and the seal of the City of Virginia Beach, Virginia, this
11th day of February, 2019.
Clerk, Council of the
City of Virginia Beach, Virginia
(SEAL)
5
FOURTH SUPPLEMENTAL AGREEMENT OF TRUST
between
CITY OF VIRGINIA BEACH, VIRGINIA
and
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
Dated as of February 1, 2019
TABLE OF CONTENTS
ARTICLE I 2
FOURTH SUPPLEMENTAL AGREEMENT 2
Section 4.101. Authorization of Fourth Supplemental Agreement 2
Section 4.102. Definitions 2
Section 4.103. Springing Amendment to Agreement of Trust 3
Section 4.104. Reference to Articles and Sections 3
ARTICLE II 4
AUTHORIZATION, DETAILS AND FORM OF SERIES 2019 BONDS 4
Section 4.201. Authorization of Series 2019 Bonds 4
Section 4.202. Details of Series 2019 Bonds 4
Section 4.203. Form of Series 2019 Bonds 5
Section 4.204. Securities Depository Provisions 5
Section 4.205. Registrar 6
Section 4.206. Delivery of Series 2019 Bonds 6
ARTICLE III 6
REDEMPTION OF SERIES 2019 BONDS 6
Section 4.301. Redemption Dates and Prices 6
Section 4.302. Selection of Series 2019 Bonds for Redemption 7
Section 4.303. Notice of Redemption 7
ARTICLE IV 7
APPLICATION OF PROCEEDS OF SERIES 2019 BONDS 7
Section 4.401. Application of Proceeds of Series 2019 Bonds and Related Amounts 7
ARTICLE V 7
PROJECT ACCOUNT 7
Section 4.501. 2019 Project Account 7
ARTICLE VI 8
SECURITY FOR SERIES 2019 BONDS 8
Section 4.601. Security for Series 2019 Bonds 8
ARTICLE VII 8
ARBITRAGE REBATE FUND 8
Section 4.701. Rebate Requirement 8
Section 4.702. Calculation and Payment of Series 2019 Rebate Obligation 8
i
Section 4.703. Reports by Trustee 9
ARTICLE VIII 9
MISCELLANEOUS 9
Section 4.801. Limitations on Use of Proceeds 9
Section 4.802. Limitation of Rights 10
Section 4.803. Severability 11
Section 4.804. Successors and Assigns 11
Section 4.805. Applicable Law 11
Section 4.806. Counterparts 11
Section 4.807. Patriot Act Disclosure 11
Exhibit A-1 Form of Series 2019 Bond
ii
THIS FOURTH SUPPLEMENTAL AGREEMENT OF TRUST dated as of the 1st day
of February, 2019 (the "Fourth Supplemental Agreement"), by and between the City of Virginia
Beach, Virginia, a political subdivision of the Commonwealth of Virginia (the "City"), and U.S.
Bank National Association, Richmond, Virginia, a national banking association organized under
the laws of the United States of America, with a corporate trust office in Richmond, Virginia, as
successor trustee to First Union National Bank (in such capacity, together with any successor in
such capacity,herein called the"Trustee"),provides:
WHEREAS, the City and First Union National Bank entered into an Agreement of Trust
dated as of January 1, 2000 (the "Agreement of Trust"), to provide for financing improvements
and extensions to the System (as defined in the Agreement of Trust) by the issuance of bonds
payable solely from Pledged Revenues (as defined in the Agreement of Trust);
WHEREAS, within the limitations of and in compliance with the Agreement of Trust,
pursuant to a First Supplemental Agreement of Trust dated as of January 1, 2000, the City issued
an initial series of Bonds under the Agreement of Trust in the original aggregate principal
amount of $10,000,000 (the "Series 2000 Bonds") to finance the costs of expansion and
improvements to the System;
WHEREAS, within the limitations of and in compliance with the Agreement of Trust,
pursuant to a Second Supplemental Agreement of Trust dated as of November 1, 2010, the City
issued additional Bonds under the Agreement of Trust in the original aggregate principal amount
of $27,380,000, including the City's $2,705,000 Storm Water Utility Revenue Bonds, Series
2010A-1 (Tax-Exempt) (the "Series 2010A-1 Bonds"), its $17,295,000 Storm Water Utility
Revenue Bonds, Series 2010A-2 (Taxable-Build America Bonds) (the "Series 2010A-2 Bonds"
and, together with the Series 2010A-1 Bonds, the "Series 2010A Bonds"), and its $7,380,000
Storm Water Utility Refunding Revenue Bonds, Series 2010B (Tax-Exempt) (the"Series 2010B
Bonds") (collectively, the "Series 2010 Bonds"), to finance and refinance the costs of
improvements and expansions to the System, including the redemption of the Series 2000 Bonds,
and to pay costs associated with issuing the Series 2010 Bonds;
WHEREAS, within the limitations of and in compliance with the Agreement of Trust,
pursuant to a Third Supplemental Agreement of Trust dated as of January 1, 2015, the City
issued additional Bonds under the Agreement of Trust in the original aggregate principal amount
of$23,500,000 (the "Series 2015 Bonds") to finance costs of improvements and expansions to
the System and to pay costs associated with issuing the Series 2015 Bonds;
WHEREAS, within the limitations of and in compliance with the Agreement of Trust,
pursuant to this Fourth Supplemental Agreement the City will issue additional Bonds under the
Agreement of Trust in the aggregate principal amount of$ , namely the City's
$ Storm Water Utility Revenue Bonds, Series 2019 (the "Series 2019 Bonds"),
to finance costs of improvements and expansions to the System and to pay costs associated with
issuing the Series 2019 Bonds;
WHEREAS, as evidenced by that certain Official Statement of the City dated February
13, 2019, the purchasers of the Series 2019 Bonds are deemed to have consented to the springing
1
amendment to the Agreement of Trust set forth in Section 4.103 of this Fourth Supplemental
Agreement; and
WHEREAS, the City has taken all necessary action to make the Series 2019 Bonds, when
authenticated by the Trustee and issued by the City, valid and binding limited obligations of the
City and to constitute this Fourth Supplemental Agreement a valid and binding agreement
authorizing and providing for the details of the Series 2019 Bonds;
NOW THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter contained, the parties hereto agree, as follows:
ARTICLE I
FOURTH SUPPLEMENTAL AGREEMENT
Section 4.101. Authorization of Fourth Supplemental Agreement.
This Fourth Supplemental Agreement is authorized and executed by the City and
delivered to the Trustee pursuant to and in accordance with Articles III and XII of the Agreement
of Trust. All terms, covenants, conditions and agreements of the Agreement of Trust shall apply
with full force and effect to the Series 2019 Bonds and to the holders thereof, except as otherwise
provided in this Fourth Supplemental Agreement.
Section 4.102. Definitions.
Except as otherwise amended or defined in this Fourth Supplemental Agreement, terms
defined in the Agreement of Trust are used in this Fourth Supplemental Agreement with the
meanings assigned to them in the Agreement of Trust. In addition, the following words as used
in this Fourth Supplemental Agreement shall have the following meanings unless a different
meaning clearly appears from the context:
"2019 Project" shall mean improvements to and expansions of the System
financed with the proceeds of the Series 2019 Bonds.
"Fourth Supplemental Agreement" shall mean this Fourth Supplemental
Agreement of Trust between the City and the Trustee, which further supplements and amends the
Agreement of Trust, as amended.
"Letter of Representations" shall mean the Blanket Letter of Representations
dated June 17, 1996, from the City to the Securities Depository and any amendments thereto or
successor agreements between the City and any successor Securities Depository, relating to a
book-entry system to be maintained by the Securities Depository with respect to the Bonds.
Notwithstanding any provision of the Agreement of Trust, including Article XII regarding
amendments, the Trustee may enter into any such amendment or successor agreement without
the consent of Bondholders.
"Rebate Amount Certificate" shall have the meaning set forth in Section 4.702.
2
"Registrar" shall mean U.S. Bank National Association, or any successors serving
as such hereunder.
"Securities Depository" shall mean The Depository Trust Company, a corporation
organized and existing under the laws of the State of New York, and any other securities
depository for the Series 2019 Bonds appointed pursuant to Section 4.204, and their successors.
"Series 2010 Bonds" shall mean, collectively, the City's currently outstanding (i)
Storm Water Utility Revenue Bonds, Series 2010A-1 (Tax-Exempt), (ii) Storm Water Utility
Revenue Bonds, Series 2010A-2 (Taxable-Build America Bonds), and (iii) Storm Water Utility
Refunding Revenue Bonds, Series 2010B (Tax-Exempt).
"Series 2015 Bonds" shall mean the City's currently outstanding Storm Water
Utility Revenue Bonds, Series 2015.
"Series 2019 Bonds" shall mean the City's $ Storm Water Utility
Revenue Bonds, Series 2019 authorized to be issued pursuant to this Fourth Supplemental
Agreement.
Section 4.103. Springing Amendment to Agreement of Trust. The terms of the
Agreement of Trust shall be amended as follows:
(a) Upon Effective Date (as defined below), the following paragraph shall be
added immediately following Section 702(i) of the Agreement of Trust:
"Notwithstanding anything to the contrary in the foregoing, moneys held
in the Funds and Accounts may be invested in any obligations or securities that
are at the time legal investments for public funds under the Investment of Public
Funds Act (Section 2.2-4500 et seq. of Virginia Code) or the Government Non-
Arbitrage Investment Act (Section 2.2-4700 et seq. of Virginia Code) or any other
successor provisions of law applicable to such investments."
(b) As used above, "Effective Date" means the earlier of the date on which (a)
the Series 2010 Bonds and the Series 2015 Bonds are no longer outstanding, or (b) the holders of
a majority in outstanding principal amount of all Bonds secured by the Agreement of Trust have
consented to the amendment set forth in this Section 4.103.
Section 4.104. Reference to Articles and Sections.
Unless otherwise indicated, all references herein to particular articles or sections are
references to articles or sections of this Fourth Supplemental Agreement.
3
ARTICLE II
AUTHORIZATION, DETAILS AND FORM OF SERIES 2019 BONDS
Section 4.201. Authorization of Series 2019 Bonds.
There are hereby authorized to be issued the Series 2019 Bonds in the aggregate principal
amount of$ to finance the Cost of the 2019 Project, which is hereby authorized.
The Series 2019 Bonds shall be issued pursuant to the Agreement of Trust and this Fourth
Supplemental Agreement.
Section 4.202. Details of Series 2019 Bonds.
The Series 2019 Bonds shall be designated "Storm Water Utility Revenue Bonds, Series
2019" shall be dated the date of their issuance and delivery, shall be issuable only as fully
registered bonds in denominations of$5,000 and multiples thereof, shall be numbered R(2019)-1
upward and shall bear interest at the rates, payable semiannually on May 15 and November 15,
beginning May 15, 2019, until their final payment or maturity, and shall mature on November 15
in the years and the amounts, set forth as follows:
Maturity Principal Interest Maturity Principal Interest
(Nov. 15) Amount Rate (Nov. 15) Amount Rate
2019 2032
2020 2033
2021 2034
2022 2035
2023 2036
2024 2037
2025 2038
2026 2039
2027 2040
2028 2041
2029 2042
2030 2043
2031
Each Series 2019 Bond shall bear interest (a) from its date, if such Series 2019 Bond is
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 such Series 2019 Bond is authenticated;
provided, however, that if at the time of authentication of any Series 2019 Bond payment of
interest is in default, such Series 2019 Bond shall bear interest from the date to which interest has
been paid.
Principal of and premium, if any, on the Series 2019 Bonds shall be payable to the
registered owners upon the surrender of Series 2019 Bonds at the office of the Registrar. Interest
on the Series 2019 Bonds shall be payable by check or draft mailed to the registered owners at
their addresses as they appear on the fifteenth day preceding the interest payment date on the
4
registration books kept by the Registrar; provided, however, if the Series 2019 Bonds are
registered in the name of a Securities Depository or its nominee as registered owner or at the
option of a registered owner of at least $1,000,000 of Series 2019 Bonds, payment shall be made
by wire transfer pursuant to the wire instructions received by the Registrar from such registered
owner. Principal, premium, if any, and interest shall be payable in lawful money of the United
States of America.
Section 4.203. Form of Series 2019 Bonds.
The Series 2019 Bonds shall be in substantially the forms set forth in Exhibit A, with
such appropriate variations, omissions and insertions as are permitted or required by the
Agreement of Trust and this Fourth Supplemental Agreement.
Section 4.204. Securities Depository Provisions.
Initially, one Series 2019 Bond certificate for each maturity of the Series 2019 Bonds will
be issued and registered to the Securities Depository, or its nominee. The City has entered into a
Letter of Representations relating to a book-entry system to be maintained by the Securities
Depository with respect to the Series 2019 Bonds.
In the event that (a) the Securities Depository determines not to continue to act as a
securities depository for the Series 2019 Bonds by giving notice to the Registrar and the City
discharging its responsibilities hereunder or (b) the City in its sole discretion determines (1) that
beneficial owners of Series 2019 Bonds shall be able to obtain certificated Series 2019 Bonds or
(2) to select a new Securities Depository, then the City shall attempt to locate another qualified
securities depository to serve as Securities Depository or authenticate and deliver certificated
Series 2019 Bonds to the beneficial owners or to the Securities Depository participants on behalf
of beneficial owners substantially in the forms provided for in Exhibit A;provided, however,that
such form shall provide for interest on the Series 2019 Bonds to be payable (i) from its date, if it
is authenticated prior to May 15, 2019, or(ii) otherwise from the May 15 or November 15 that is,
or immediately precedes, the date on which it is authenticated (unless payment of interest
thereon is in default, in which case interest on such Series 2019 Bonds shall be payable from the
date to which interest has been paid). In delivering certificated Series 2019 Bonds, the Registrar
shall be entitled to rely conclusively 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 Series 2019 Bonds will be registrable, transferable and
exchangeable as set forth in Section 204 of the Agreement of Trust.
So long as there is a Securities Depository for the Series 2019 Bonds (A) it or its nominee
shall be the registered owner of the Series 2019 Bonds, (B) notwithstanding anything to the
contrary in this Fourth Supplemental Agreement, 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 Securities Depository and shall be effected pursuant to
rules and procedures established by such Securities Depository, (C) the City and the Registrar
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
5
participants, (D) references in this Fourth Supplemental Agreement to registered owners of the
Series 2019 Bonds shall mean such Securities Depository or its nominee and shall not mean the
beneficial owners of the Series 2019 Bonds and (E) in the event of any inconsistency between
the provisions of this Fourth Supplemental Agreement, other than those set forth in this
paragraph and the preceding paragraph, and the provisions of the Letter of Representations, such
provisions of the Letter of Representations shall control.
Section 4.205. Registrar.
The selection of U.S. Bank National Association as Registrar is approved.
Section 4.206. Delivery of Series 2019 Bonds.
The Registrar shall authenticate and deliver the Series 2019 Bonds when there shall have
been delivered to the Registrar a Request for Authentication stating that there have been filed
with or delivered to the City Clerk all items required by Section 304 of the Agreement of Trust.
ARTICLE III
REDEMPTION OF SERIES 2019 BONDS
Section 4.301. Redemption Dates and Prices.
The Series 2019 Bonds may not be called for redemption by the City except as provided
below:
(a) Optional Redemption. Series 2019 Bonds maturing on or before
November 15, 2028, are not subject to optional redemption prior to their stated maturities. Series
2019 Bonds that mature on or after November 15, 2029, will be subject to redemption at the
option of the City on or after November 15, 2028, in whole or in part at any time (in any multiple
of$5,000), without premium, upon payment of the principal amount of the Series 2019 Bonds so
redeemed plus interest accrued to the redemption date.
(b) [Mandatory Redemption. The Series 2019 Bonds maturing on November
15, 20 , are subject to mandatory sinking fund redemption prior to maturity in the years and
amounts set forth below upon payment of 100% of the principal amount to be redeemed plus
interest accrued to the redemption date:
Year Amount
*
*final maturity
The amount of Series 2019 Bonds to be redeemed pursuant to this subsection may
be reduced in accordance with the provisions of Section 605 of the Agreement of Trust.]
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Section 4.302. Selection of Series 2019 Bonds for Redemption.
If less than all of the Series 2019 Bonds are called for redemption, the Series 2019 Bonds
to be redeemed shall be selected by the City's Director of Finance in such a manner as he or she
may determine to be in the best interest of the City.
If less than all of the Series 2019 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 procedures or, if the book-entry system is discontinued, by
the Registrar by lot in such manner as the Registrar in its discretion may determine.
The portion of any Series 2019 Bond to be redeemed shall be in a minimum principal
amount of$5,000 or some multiple thereof. In selecting Series 2019 Bonds for redemption, each
Series 2019 Bond shall be considered as representing that number of Series 2019 Bonds which is
obtained by dividing the principal amount of such Series 2019 Bond by $5,000. If a portion of a
Series 2019 Bond shall be called for redemption, a new Series 2019 Bond in principal amount
equal to the unredeemed portion thereof shall be issued to the registered owner upon the
surrender thereof.
Section 4.303. Notice of Redemption.
Notice of redemption of Series 2019 Bonds shall be given in the manner set forth in
Section 402 of the Agreement of Trust.
ARTICLE IV
APPLICATION OF PROCEEDS OF SERIES 2019 BONDS
Section 4.401. Application of Proceeds of Series 2019 Bonds and Related Amounts.
Proceeds of the Series 2019 Bonds in the amount of $ (consisting of the
principal amount of $ , [plus] [net] original issue [premium] of $
minus an underwriting discount of$ ), including the $ good faith deposit
received by the City on February 13, 2019 and the $ in proceeds received by the
City on February [27], 2019, shall be deposited in the Series 2019 Project Account in the
Construction Fund to be used to pay the Cost of the Project.
The City shall deposit its own cash (not proceeds of the Series 2019 Bonds) in the
amount of$ into the Debt Service Reserve Fund.
ARTICLE V
PROJECT ACCOUNT
Section 4.501. 2019 Project Account.
There shall be established within the Construction Fund a special account entitled "2019
Project Account." Portions of the proceeds of the Series 2019 Bonds specified in Section 4.401
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above shall be deposited in the 2019 Project Account. Money in the 2019 Project Account shall
be used to pay Costs of the 2019 Project and costs of issuance of the Series 2019 Bonds, as
evidenced by the requisitions provided in accordance with the provisions of the Agreement of
Trust. Any balance remaining in the 2019 Project Account upon completion of the 2019 Project
shall be disposed of in accordance with the provisions of Section 504 of the Agreement of Trust.
ARTICLE VI
SECURITY FOR SERIES 2019 BONDS
Section 4.601. Security for Series 2019 Bonds.
The Series 2019 Bonds shall be equally and ratably secured under the Agreement of Trust
with the Outstanding Bonds of any other series issued pursuant to Article III of the Agreement of
Trust, without preference, priority or distinction of any Bonds over any other Bonds, as provided
in the Agreement of Trust, other than any Subordinate Debt.
ARTICLE VII
ARBITRAGE REBATE FUND
Section 4.701. Rebate Requirement.
Except with respect to earnings on funds and accounts qualifying for exceptions to the
rebate requirement of Section 148 of the Code, the City shall pay the rebate obligations under the
Code (the "Rebate Amount") to the United States of America, as and when due, in accordance
with Section 148(f) of the Code, as provided in this Article, and shall retain records of all such
determinations until six years after final payment of the Series 2019 Bonds.
Section 4.702. Calculation and Payment of Series 2019 Rebate Obligation.
(a) The City selects November 15 as the end of the bond year with respect to
the Series 2019 Bonds pursuant to Treasury Regulations Section 1.148-1.
(b) Within 30 days after the initial installment computation date, which is the
last day of the fifth bond year (November 15, 2024), unless such date is changed by the City
prior to the date that any amount with respect to the Series 2019 Bonds is paid or required to be
paid to the United States of America as required by Section 148 of the Code, and at least once
every five years thereafter, the City shall cause the Rebate Amount to be computed. Prior to any
payment of the Rebate Amount to the United States of America as required by Section 148 of the
Code, such computation (the "Rebate Amount Certificate") setting forth the Rebate Amount
shall be prepared or approved by (1) a person with experience in matters of governmental
accounting for Federal income tax purposes, (2) a bona fide arbitrage rebate calculation reporting
service or (3) Bond Counsel. A copy of each such Rebate Amount Certificate shall be filed in
the records of the City and with the Trustee.
(c) No later than 60 days after the initial installment computation date, the
City shall pay to the United States of America at least 90% of the Rebate Amount as set forth in
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the Rebate Amount Certificate prepared with respect to such installment computation date. At
least once on or before 60 days after the installment computation date that is the fifth anniversary
of the initial installment computation date and on or before 60 days every fifth anniversary date
thereafter until final payment of the Series 2019 Bonds, the City shall pay to the United States of
America not less than the amount, if any, by which 90% of the Rebate Amount set forth in the
most recent Rebate Amount Certificate exceeds the aggregate of all such payments theretofore
made to the United States of America pursuant to this Section. On or before 60 days after final
payment of the Series 2019 Bonds, the City shall pay to the United States of America the
amount, if any, by which 100% of the Rebate Amount set forth in the Rebate Amount Certificate
with respect to the date of final payment of the Series 2019 Bonds exceeds the aggregate of all
payments theretofore made pursuant to this Section. All such payments shall be made from any
legally available moneys of the City.
(d) Notwithstanding any provision of this Article to the contrary, no such
calculation or payment shall be made if the City receives and delivers to the Trustee an opinion
of Bond Counsel to the effect that (1) such payment is not required under the Code in order to
prevent the Series 2019 Bonds from becoming "arbitrage bonds" within the meaning of Section
148 of the Code or (2) such payment should be calculated and paid on some alternative basis
under the Code, and the City complies with such alternative basis.
Section 4.703. Reports by Trustee.
The Trustee shall provide the City within 10 days after each November 15 and within 10
days after the final payment of the Series 2019 Bonds with such reports and information with
respect to earnings of amounts held by it under the Agreement of Trust and this Fourth
Supplemental Agreement as may be requested by the City in order to comply with the provisions
of this Article.
ARTICLE VIII
MISCELLANEOUS
Section 4.801. Limitations on Use of Proceeds.
The City covenants with the holders of the Series 2019 Bonds as follows:
(a) The Series 2019 Bonds, together with the Series 2015 Bonds and the
Series 2010 Bonds, are the only Bonds that will be outstanding immediately following the
issuance of the Series 2019 Bonds. There are no Parity Double Barrel Bonds, Prior Bonds,
Subordinate Double Barrel Bonds or Subordinated Debt outstanding.
(b) The City shall not take or omit to take any action or approve the Trustee's
taking any action or making any investment or use of the proceeds of any Series 2019 Bonds
(including failure to spend the same with due diligence) the taking or omission of which would
cause the Series 2019 Bonds, the Series 2015 Bonds or the Series 2010 Bonds to be "arbitrage
bonds" within the meaning of Section 148 of the Code, including participating in any issue of
obligations that would cause the Series 2019 Bonds, the Series 2015 Bonds or the Series 2010
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Bonds to be part of an "issue" of obligations that are arbitrage bonds, within the meaning of
Treasury Regulations Section 1.148-10 or successor regulation, or otherwise cause interest on the
Series 2019 Bonds or the Series 2010 Bonds to be includable in the gross income of the
registered owners under existing law. Without limiting the generality 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 of America any part of the earnings derived from the investment of gross proceeds
of the Series 2019 Bonds.
(b) Barring unforeseen circumstances, the City shall not approve the use of
the proceeds from the sale of any Series 2019 Bonds otherwise than in accordance with the
City's "non-arbitrage" certificate delivered immediately prior to the issuance of the Series 2019
Bonds.
(c) The City shall not permit the proceeds of the Series 2019 Bonds to be used
in any manner that would result in either (1) 5% or more of such proceeds or the facilities being
financed or refinanced with such proceeds being considered as having been used in any trade or
business carried on by any person other than a governmental unit as provided in Section 141(b)
of the Code, (2) 5% or more of such proceeds or the facilities being financed or refinanced with
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 (3) 5% or more of
such proceeds or the facilities being financed or refinanced with such proceeds being considered
as having been used directly or indirectly to make or finance loans to any person other than a
governmental unit, as provided in Section 141(c) of the Code.
(d) The City shall not take any other action that would adversely affect, and
shall take all action within its power necessary to maintain, the exclusion of interest on all Series
2019 Bonds from gross income for Federal income taxation purposes; provided, however, that if
the City receives an opinion of Bond Counsel that compliance with any such covenant is not
required to prevent the interest on the Series 2019 Bonds from being includable in the gross
income of the registered owners thereof under existing law, the City need not comply with such
restriction.
Section 4.802. Limitation of Rights.
With the exception of rights herein expressly conferred, nothing expressed or mentioned
in or to be implied from this Fourth Supplemental Agreement or the Series 2019 Bonds is
intended or shall be construed to give to any person other than the parties hereto and the holders
of Series 2019 Bonds any legal or equitable right, remedy or claim under or in respect to this
Fourth Supplemental Agreement or any covenants, conditions and agreements herein contained
since this Fourth Supplemental Agreement and all of the covenants, conditions and agreements
hereof are intended to be and are for the sole and exclusive benefit of the parties hereto and the
holders of Series 2019 Bonds as herein provided.
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Section 4.803. Severability.
If any provision of this Fourth Supplemental Agreement shall be held invalid by any
court of competent jurisdiction, such holding shall not invalidate any other provision hereof and
this Fourth Supplemental Agreement shall be construed and enforced as if such illegal provision
had not been contained herein.
Section 4.804. Successors and Assigns.
This Fourth Supplemental Agreement shall be binding upon, inure to the benefit of and
be enforceable by the parties and their respective successors and assigns.
Section 4.805. Applicable Law.
This Fourth Supplemental Agreement shall be governed by the applicable laws of the
Commonwealth of Virginia.
Section 4.806. Counterparts.
This Fourth Supplemental Agreement may be executed in several counterparts, each of
which shall be an original and all of which together shall constitute but one and the same
instrument.
Section 4.807. Patriot Act Disclosure.
To help the government fight the funding of terrorism and money laundering activities,
Federal law requires all financial institutions to obtain, verify and record information that
identifies each person who opens an account. For a non-individual person such as a business
entity, a charity, a trust or other legal entity, the Trustee will ask for documentation to verify its
formation and existence as a legal entity. The Trustee may also ask to see financial statements,
licenses, identification, and authorization documents from individuals claiming authority to
represent the entity or other relevant documentation.
[Signature Page Follows]
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IN WITNESS WHEREOF, the City and the Trustee have caused this Fourth
Supplemental Agreement to be executed in their respective corporate names as of the date first
above written.
CITY OF VIRGINIA BEACH, VIRGINIA
By:
City Manager
U.S. BANK NATIONAL ASSOCIATION,
as successor Trustee
By:
Authorized Officer
S-1
EXHIBIT A
Unless this certificate is presented by an authorized representative of The Depository Trust
Company, a New York corporation("DTC"), to the issuer or its agent for registration of transfer,
exchange, or payment, and any certificate is registered in the name of Cede & Co., or in such
other name as is requested by an authorized representative of DTC (and any payment is made to
Cede& Co. or to such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
REGISTERED REGISTERED
R(2019)- $
UNITED STATES OF AMERICA
COMMONWEALTH OF VIRGINIA
CITY OF VIRGINIA BEACH, VIRGINIA
Storm Water Utility Revenue Bond
Series 2019
Interest Rate Maturity Date Dated Date CUSIP
November 15, 20_ February [27], 2019
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT:
The City of Virginia Beach, Virginia(the "City"), for value received, hereby promises to
pay upon surrender hereof solely from the source and as hereinafter provided, to the registered
owner hereof, 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, solely
from such source, interest hereon semiannually on each May 15 and November 15, beginning
May 15,2019, at the annual rate stated above, calculated on the basis of a 360-day year of twelve
30-day months. Interest is payable (a) from the dated date stated above, if this bond is
authenticated prior to May 15, 2019, or (b) otherwise from the May 15 or November 15 that is,
or immediately precedes, the date on which this bond is authenticated (unless payment of interest
hereon is in default, in which case this bond shall bear interest from the date to which interest has
been paid). Interest is payable by check or draft mailed to the registered owner hereof at its
address as it appears on the fifteenth day preceding each interest payment date on registration
books kept by U.S. Bank National Association, which has been appointed paying agent and
registrar (the "Registrar"); provided, however, that if the Bonds, as hereinafter defined, are
registered in the name of a securities depository or its nominee as registered owner or at the
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option of a registered owner of at least $1,000,000 of Bonds, payment will be made by wire
transfer pursuant to the most recent wire instructions received by the Registrar from such
registered owner. Principal, premium, if any, and interest are payable in lawful money of the
United States of America.
Notwithstanding any other provision hereof, this bond is subject to book-entry form
maintained by DTC, and the payment of principal,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 $ Storm Water Utility Revenue Bonds,
Series 2019 (the "Bonds"), of like date and tenor, except as to number, denomination, rate of
interest, privilege of redemption and maturity. The Bonds are issued under an Agreement of
Trust dated as of January 1, 2000, between the City and U.S. Bank National Association, as
successor trustee (the "Trustee"), as supplemented by a First Supplemental Agreement of Trust
dated as of January 1, 2000, as further supplemented by a Second Supplemental Agreement of
Trust dated as of November 1, 2010, as further supplemented by a Third Supplemental
Agreement of Trust dated as of November 1, 2015, and as further supplemented by a Fourth
Supplemental Agreement dated as of February 1, 2019 (collectively, the "Agreement of Trust"),
and are equally and ratably secured on a parity as to the pledge of Pledged Revenues (as defined
in the Agreement of Trust) with the Parity Obligations (as defined in the Agreement of Trust).
Reference is hereby made to the Agreement of Trust for a description of the provisions, among
others, with respect to the nature and extent of the security, the rights, duties and obligations of
the City and the Trustee, the rights of the holders of the Bonds and the terms upon which the
Bonds are issued and secured. Additional bonds secured by a pledge of Pledged Revenues on a
parity with the Bonds and the Parity Bonds may be issued under the terms and conditions set
forth in the Agreement of Trust. Subordinated Debt, as defined in the Agreement of Trust, may
be issued under the terms and conditions set forth in the Agreement of Trust.
The Bonds and the premium, if any, and the interest thereon are limited obligations of the
City payable solely from Pledged Revenues, except to the extent payable from the proceeds of
the Bonds, income from investments, certain reserves and proceeds of insurance, which Pledged
Revenues and other moneys have been pledged as described in the Agreement of Trust to secure
payment thereof. The Bonds and the premium, if any, and the interest thereon shall not be
deemed to constitute a pledge of the faith and credit of the Commonwealth of Virginia or any
political subdivision thereof, including the City. Neither the Commonwealth of Virginia nor any
political subdivision thereof, including the City, shall be obligated to pay the principal of or
premium, if any, or interest on the Bonds or other costs incident thereto except from Pledged
Revenues and other moneys pledged therefor, and neither the faith and credit nor the taxing,
power of the Commonwealth of Virginia or any political subdivision thereof, including the City,
is pledged to the payment of the principal of or premium, if any, or interest on the Bonds or other
costs incident thereto.
The Bonds may not be called for redemption by the City except as provided herein and in
the Agreement of Trust. Bonds maturing on or before November 15, 2028, are not subject to
optional redemption prior to their stated maturities. Bonds that mature on or after November 15,
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2029, will be subject to redemption at the option of the City beginning on November 15, 2028, in
whole or in part at any time (in any multiple of$5,000), without premium, upon payment of the
principal amount of the Bonds so redeemed plus interest accrued to the redemption date.
[The Bonds maturing on November 15, 20 , are subject to mandatory sinking fund
redemption prior to maturity in the years and amounts set forth below upon payment of 100% of
the principal amount to be redeemed plus interest accrued to the redemption date:
Year Amount
*final maturity]
If less than all the Bonds are called for redemption, they shall be redeemed from
maturities in such order as determined by the City. If less than all of 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. The portion of any Bond to be redeemed shall be in the principal
amount of$5,000 or some multiple thereof. In selecting Bonds for redemption, each Bond shall
be considered as representing that number of Bonds which is obtained by dividing the principal
amount of such Bond by $5,000.
If any of the Bonds or portions thereof are called for redemption, the Registrar shall send
notice of the call for redemption, identifying the Bonds or portions thereof to be redeemed, not
less than 30 nor more than 60 days prior to the redemption date, by facsimile, registered or
certified mail or overnight express delivery, to the registered owner of the Bonds. Provided funds
for their redemption are on deposit at the place of payment on the redemption date, all Bonds or
portions thereof so called for redemption shall cease to bear interest on such date, shall no longer
be secured by the Agreement of Trust and shall not be deemed to be Outstanding under the
provisions of the Agreement of Trust. If a portion of this bond shall be called for redemption, a
new Bond in principal amount equal to the unredeemed portion hereof will be issued to DTC or
its nominee upon the surrender hereof, or if the book-entry system is discontinued, to the
registered owners of the Bonds.
The registered owner of this bond shall have no right to enforce the provisions of the
Agreement of Trust or to institute action to enforce the covenants therein or to take any action
with respect to any Event of Default under the Agreement of Trust or to institute, appear in or
defend any suit or other proceedings with respect thereto, except as provided in the Agreement of
Trust. Modifications or alterations of the Agreement of Trust, or of any supplement thereto, may
be made only to the extent and in the circumstances permitted by the Agreement of Trust.
The Bonds are issuable as registered bonds in the denomination of$5,000 and multiples
thereof Upon surrender for transfer or exchange of this bond at the office of the Registrar,
together with an assignment duly executed by the registered owner or its duly authorized
attorney or legal representative in such form as shall be satisfactory to the Registrar, the City
A-3
shall execute, and the Registrar shall authenticate and deliver in exchange, a new Bond or Bonds
in the manner and subject to the limitations and conditions provided in the Agreement of Trust,
having an equal aggregate principal amount, in authorized denominations, of the same series,
form and maturity, bearing interest at the same rate and registered in the name or names as
requested by the then registered owner hereof or its 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 fifteenth day preceding each interest payment date.
All acts, conditions and things required to happen, exist or be performed precedent to and
in the issuance of this bond have happened, exist and have been performed. This bond shall not
become obligatory for any purpose or be entitled to any security or benefit under the Agreement
of Trust or be valid until the Registrar shall have executed the Certificate of Authentication
appearing hereon and inserted the date of authentication hereon.
[Signature Page Follows]
A-4
IN WITNESS WHEREOF, the City of Virginia Beach, Virginia, has caused this bond to
be signed by its Mayor, to be countersigned by its Clerk, its seal to be affixed hereto, and this
bond to be dated the dated date stated above.
COUNTERSIGNED:
(SEAL)
Clerk, City of Virginia Beach, Virginia Mayor, City of Virginia Beach,Virginia
CERTIFICATE OF AUTHENTICATION
Date Authenticated: February[27], 2019
This bond is one of the Bonds described in the within mentioned Agreement of Trust.
U.S. BANK NATIONAL ASSOCIATION,
as Registrar
By:
Authorized Officer
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ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and transfer(s)unto
(please print or typewrite name and address, including 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 (Signature of Registered Owner)
by an Eligible Guarantor Institution such as
a Commercial Bank, Trust Company, NOTICE: The signature above must
Securities Broker/Dealer, Credit Union, or correspond with the name of the registered
Savings Association who is a member of a owner as it appears on the front of this bond
medallion program approved by The in every particular, without alteration or
Securities Transfer Association, Inc. enlargement or any change whatsoever.
45084835.v3 A_6
SUMMARY NOTICE OF SALE
CITY OF VIRGINIA BEACH,VIRGINIA
STORM WATER UTILITY REVENUE BONDS,
SERIES 2019
Electronic bids only via PARITY will be received by the City of Virginia Beach, Virginia(the "City"), in
accordance with the Official Notice of Sale,until 10:30 a.m.,Eastern Time,on
Wednesday,February 13,2019
at the Office of the City Manager, Virginia Beach Municipal Center, City Hall Building, Virginia Beach,
Virginia 23456,for the purchase of all,and not less than all,of$ *aggregate principal amount of
the City of Virginia Beach, Virginia, Storm Water Utility Revenue Bonds, Series 2019(the"Bonds")to be
issued for the benefit of the City of Virginia Beach,Virginia(the"City"). The Bonds will be dated the date
of delivery(anticipated on February 27,2019)and,subject to redemption as described below,will mature on
November 15 in each of the years as described in the Official Notice of Sale,in annual installments.
Term bonds,if any, specified by the successful bidder shall be subject to mandatory sinking fund
redemption at par. Bonds maturing on or before November 15, 2028 will not be subject to optional
redemption prior to maturity. Bonds maturing on and after November 15,2029 will be subject to optional
redemption prior to maturity at the direction of the City on and after November 15,2028. Interest will be
payable semi-annually on each May 15 and November 15, beginning May 15, 2019. The Bonds will be
issued by means of a book-entry system with no distribution of physical bond certificates made to the public.
The approving legal opinion of Butler Snow LLP,a Professional Corporation,Richmond,Virginia,
with respect to the Bonds will be furnished to the successful bidder at the expense of the City. The legal
opinion will state that the Bonds are limited obligations of the City payable from certain revenue,and do not
create or constitute a debt or pledge of the faith and credit of the Commonwealth of Virginia or any political
subdivision thereof,including the City.
The Bonds will be awarded based on the lowest "true" interest cost, as detailed in the Official
Notice of Sale. Bidders may obtain the Preliminary Official Statement electronically at www.munios.com.
Printed information,including the Official Notice of Sale,the Official Bid Form,and the Preliminary Official
Statement,may be obtained upon request from the City's financial advisor,Public Resources Advisory Group
(telephone:212-566-7800).
VIRGINIA BEACH,VIRGINIA
DAVID L. HANSEN
City Manager
* Subject to adjustment in accordance with the Official Notice of Sale.
CONTINUING DISCLOSURE AGREEMENT
This CONTINUING DISCLOSURE AGREEMENT dated as of February 1, 2019 (the
"Disclosure Agreement"), is executed and delivered by the City of Virginia Beach, Virginia (the
"City"), in connection with the issuance by the City of its $ Storm Water. Utility
Revenue Bonds, Series 2019 (the"Bonds"). The City hereby covenants and agrees as follows:
Section 1. Purpose. This Disclosure Agreement is being executed and delivered by the
City for the benefit of the holders of the Bonds and in order to assist the original purchasers of
the Bonds in complying with the provisions of Section (b)(5)(i) of Rule 15c2-12, as amended
(the "Rule"), promulgated by the Securities and Exchange Commission (the "SEC") by
providing certain annual financial information and event notices required by the Rule
(collectively,the "Continuing Disclosure").
Section 2. Annual Disclosure.
(a) The City shall provide annually certain financial information and operating data
in accordance with the provisions of Section(b)(5)(i) of the Rule as follows:
(i) audited financial statements of the City's storm water enterprise fund,
prepared in accordance with generally accepted accounting principles; and
(ii) operating data with respect to the City's storm water disposal system of the
type described in the City's Official Statement dated February 13, 2019, under the
captions "Storm Water Utility Fees"and"Calculation of Revenue Covenant."
If the financial statements filed pursuant to Section 2(a)(i) are not audited, the City shall file such
statements as audited when available.
(b) The City shall file annually with the Municipal Securities Rulemaking Board (the
"MSRB") the financial information and operating data described in subsection (a) above
(collectively, the "Annual Disclosure") within 180 days after the end of the City's fiscal year,
commencing with the City's fiscal year ending June 30, 2019.
(c) Any Annual Disclosure may be included by specific reference to other documents
previously provided to the MSRB or filed with the SEC; provided, however, that any final
official statement incorporated by reference must be available from the MSRB.
(d) The City shall file with the MSRB in a timely manner notice specifying any
failure of the City to provide the Annual Disclosure by the date specified.
Section 3. Event Disclosure. The City shall file with the MSRB in a timely manner not
in excess of ten (10) business days after the occurrence of the event, notice of the occurrence of
any of the following events with respect to the Bonds:
(a) principal and interest payment delinquencies;
(b) non-payment related defaults, if material;
(c) unscheduled draws on debt service reserves reflecting financial difficulties;
(d) unscheduled draws on any credit enhancement reflecting financial difficulties;
(e) substitution of credit or liquidity providers, or their failure to perform;
(f) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or
final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other
material notices or determinations with respect to the tax status of the Bonds, or other material
events affecting the tax status of the Bonds;
(g) modifications to rights of Bondholders, if material;
(h) bond calls, if material, and tender offers;
(i) defeasance of all or any portion of the Bonds;
(j) release, substitution, or sale of property securing repayment of the Bonds, if
material;
(k) rating changes;
(1) bankruptcy, insolvency, receivership or similar event of the City;
(m) the consummation of a merger, consolidation, or acquisition involving the City or
the sale of all or substantially all of the assets of the City, other than in the ordinary course of
business, the entry into a definitive agreement to undertake such an action or the termination of a
definitive agreement relating to any such actions, other than pursuant to its terms, if material;
(n) appointment of a successor or additional trustee or the change of name of a
trustee, if material;
(o) incurrence of a financial obligation of the City, if material, or agreement to
covenants, events of default, remedies, priority rights, or other similar terms of a financial
obligation of the City, any of which affect security holders, if material; and
(p) default, event of acceleration, termination event, modification of terms, or other
similar events under the terms of the financial obligation of the City, any of which reflect
financial difficulties.
The term "financial obligation" means a (i) debt obligation; (ii) derivative instrument
entered into in connection with, or pledged as security or source of payment for, an existing or
planned debt obligation; or (iii) guarantee of(i) or (ii). The term "financial obligation" shall not
include municipal securities as to which a final official statement has been provided to the
MSRB consistent with the Rule.
Section 4. Termination. The obligations of the City hereunder will terminate upon the
redemption, defeasance (within the meaning of the Rule) or payment in full of all the Bonds.
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Section 5. Amendment. The City may modify its obligations hereunder without the
consent of Bondholders, provided that this Disclosure Agreement as so modified complies with
the Rule as it exists at the time of modification. The City shall within a reasonable time
thereafter file with the MSRB a description of such modification(s).
Section 6. Defaults.
(a) If the City fails to comply with any covenant or obligation regarding Continuing
Disclosure specified in this Disclosure Agreement, any holder (within the meaning of the Rule)
or beneficial holder of Bonds then outstanding may, by notice to the City, proceed to protect and
enforce its rights and the rights of the holders by an action for specific performance of the City's
covenant to provide the Continuing Disclosure.
(b) Notwithstanding anything herein to the contrary, any failure of the City to comply
with any obligation regarding Continuing Disclosure specified in this Disclosure Agreement (i)
shall not be deemed to constitute an event of default under the Bonds or the resolution providing
for the issuance of the Bonds and (ii) shall not give rise to any right or remedy other than that
described in Section 6(a) above.
Section 7. Filing Method. Any filing required hereunder shall be made by transmitting
such disclosure, notice or other information in electronic format to the MSRB through the
MSRB's Electronic Municipal Market Access (EMMA) system pursuant to procedures
promulgated by the MSRB.
Section 8. Additional Disclosure. The City may from time to time disclose certain
information and data in addition to the Continuing Disclosure. Notwithstanding anything herein
to the contrary, the City shall not incur any obligation to continue to provide, or to update, such
additional information or data.
Section 9. Counterparts. This Disclosure Agreement may be executed in several
counterparts each of which shall be an original and all of which shall constitute but one and the
same instrument.
Section 10. Governing Law. This Disclosure Agreement shall be construed and
enforced in accordance with the laws of the Commonwealth of Virginia.
CITY OF VIRGINIA BEACH, VIRGINIA
By:
City Manager
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