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HomeMy WebLinkAboutAUGUST 26, 2003 AGENDA i ii CITY OF VIRGINIA BEACH "COMMUNITY FOR A LIFETIME" CITY COUNCIL MAYOR ME}ERA E OBERNDOIU~, At-Large VICE MAYOR LOUIS R JONES, Baystde -Dtstrtct 4 HARRY E DIEZ. EL, Kempsvdle -Dtstrtct 2 MARGARET L EURE Centervdle - Dtstr~ct 1 REBA S McCLANAN, Rose Hall - Dzstrtct 3 RICHARD A MADDOX Beach -Dtstrtct 6 JIM REEVE Princess Anne -Dtstnct 7 PETER W SCHMIDT At-Large RON A VILLANUEVA, At-Large ROSEMARY WILSON At-Large JAMES L WOOD Lynnhaven -Dtstrxct 5 JAMES K SPORE, Ctty Manager LESLIE L LILLEE City Attorne3 RUTH HODGES SMITH, MMC, Ctty Clerk CITY COUNCIL AGENDA 26 August 2003 CITY HALL BUILDING I 2401 COURTHOUSE DRIVE VIRGINIA BEACH, VIRGINIA 23456-8005 PHONE (757) 427-4303 FAX (757) 426-5669 E MAIL Ctycncl~vbgov corn I. CITY COUNCIL PRESENTATION - Conference Room- 1:00 PM A JAMESTOWN / VIRGINIA BEACH 1607-2007 ANNIVERSARY Mac Rawls, Steenng Committee Chair Wilham Cone, Director of Jamestown 2007 II. CITY MANAGER'S BRIEFINGS A LYNNHAVEN RIVER ENVIRONMENTAL RESTORATION H. Clayton Bemick, Environmental Management Programs Adm]mstrator Department of Planmng Bo THOROGHGOOD HOUSE CONVEYANCE Lynn Clements, Director, Department of Museums and Cultural Arts III. REVIEW OF AGENDA ITEMS IV. CITY COUNCIL COMMENTS V, INFORMAL SESSION - Conference Room- 3:30 PM A. CALL TO ORDER- Mayor Meyera E Obemdorf B. ROLL CALL OF CITY COUNCIL C. RECESS TO CLOSED SESSION VI. FORMAL SESSION A CALL TO ORDER - Mayor Meyera E. Obemdorf B. INVOCATION: Dr. Dwight Christenbury First Presbyterian Church C. PLEDGE OF ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA D. ELECTRONIC ROLL CALL OF CITY COUNCIL E. CERTIFICATION OF CLOSED SESSION F MINUTES 1. INFORMAL AND FORMAL SESSIONS August 12, 2003 G. MAYOR'S PRESENTATION KING NEPTUNE 2003 and HIS COURT Nancy A. Creech, President, Neptune Festival H. AGENDA FOR FORMAL SESSION I PUBLIC COMMENT 1. TAX EXEMPTION FOR REDEVELOPMENT II Jo PUBLIC HEARINGS 1. FY 2004 CAPITAL PROJECT AMENDMENTS: a. VDOT Roadways $35,485,142 b. Convention Center Replacement $ 9,071,000 K. CONSENT AGENDA L O RD IN AN CES/RESO L UTI O N o Ordinance to AUTHORIZE temporary encroachments into a portion of the City's right-of- way at 2082 and 2080 Tazewell Road (with adjacent property owner), to make up a Condominium Association and jointly bmld a pier in Crab Creek with separate applications to construct and maintain boat lifts: (DISTRICT 4- BAYSIDE) a. Lynnhaven Promenade: b. Crab Creek: ROBERT B. THOMA PHILLIP O. GEIB ° Ordinance to APPROPRIATE $ 9,071,000 to the Convention Center Capital Improvement Project (CIP) replacement and provide additional features and amenities for the new Convention Center. ° Ordinance to TRANSFER $800,000 from the General Fund Reserve to reserve a contingency for the JOHN MOHAMMAD TRIAL. . Resolution re ISSUANCE of $165,000,000 Virginia Beach Development Authority's Revenue Bonds, Series 2003A and AUTHORIZING the executton and delivery of appropriate documents. m. PLANNING Ordinance to AMEND the City Zoning Ordinance (CZO) re height regulations affecting mr navigation Recommendation: APPROVAL . Ordinance to AMEND §§ 111. 225.1,601,901 and 1521 of the C~ty Zoning Ordinance (CZO) to allow Bed and Breakfast Inns as a Conditional Use in certain Apartment, Bus~ness and Resort Tourist Districts, and, FURTHER AMEND the specffic conditions for Bed and Breakfast Inns. Deferred: Recommendation: August 12, 2003 APPROVAL i · . ! Apphcation of GREGORY NELSON for a CondtttonaI Use Permtt re a Bed and Breakfast Inn at 2420 Arctm Avenue. (DISTRICT 6 - BEACH) Deferred. Recommendation: August 12, 2003 APPROVAL . Application of STEVEN WRAY O'NEAL for the expansion of a Nonconformine Use to -- construct a detached garage at 420 Davis Street. (DISTRICT 4- BAYSIDE) Recommendation: DENIAL Apphcation of PATIO ENCLOSURES, INC. for the expansion of a Nonconforming Use to construct a sum-oom at 204 B 75th Street. (DISTRICT 5- LYNNHAVEN) Reconunendat~on: DENIAL o Apphcation of ST. NICHOLAS CATHOLIC CHURCH for a MODIFICATION of Conditions on a Use Permit re a columbarium (approved by City Council on April 8, 2003) at 712 L~ttle Neck Road. (DISTRICT 5 - LYNNHAVEN) Recommendation: APPROVAL ° Apphcation of NICHOLSON, INC. for a MODIFICATION of the Indian Lakes PD-H1 Land Use Plan to allow a mira storage at Ferrell Parkway, west of Indian Lakes Boulevard (DISTRICT I - CENTERVILLE) Recommendation: APPROVAL ° Apphcation of SAIR ENTERPRISES, INC. for a MODIFICATION of a Con&ttonal Use Permit re an automobde service station (approved February 13,2001) to remove a requirement for the canopy, remove the automobde storage use, expand approved automottve repatr and add a car wash at 3096 South Lynnhaven Road (DISTRICT 3 - ROSE HALL) Deferred: Recommendation: August 12, 2003 APPROVAL . Apphcations of D. W. GATLING, INC on the west side of Oceana Boulevard, south of Beacons Reach Drive: (DISTRICT 6- BEACH) a. bo Change of Zoning D~stnct Classification from R-5D Restdentzal Duplex Dzstrzct to B-2 Commumty Buszness District Conditional Use Permit for a mini-warehouse and self storage Recommendation: APPROVAL i ii ii i i I0 Apphcat~on of EXXON MOBIL CORPORATION for a Conditional Use Permit re an automobile service station and car wash at the southeast comer of Nlmmo Parkway and Upton Drive (DISTRICT 7- PRINCESS ANNE) Recommendation: APPROVAL 11. Application of ALLTEL COMMUNICATIONS, INC for a Conditional Use Permit re a communications monopole tower to support three (3) hcensed carriers at 812 Sandbridge Road. (DISTRICT 7- PRINCESS ANNE) Recommendation. Refer back to the Planmng Commission for further conslderat;on 12. Application of SALT MEADOW BAY, L.L.C. for the &sconttnuance, closure and abandonment of'Street G on the northeast side of South Oriole Drive, northwest of Barberton Drive. (DISTRICT 6- BEACH) Recommendation: APPROVAL APPOINTMENTS MINORITY BUSINESS COUNCIL PARKS and RECREATION COMMISSION TIDEWATER REGIONAL GROUP HOME COMMISSION UNFINISHED BUSINESS P NEW BUSINESS Q ADJOURNMENT hgenda 08/21/03/sb ~w vbgov com If you are physically disabled or visually impaired and need assxstance at ttus meeting, please call the CITY CLERK'S OFFICE at 427-4303 Hearing impaired, call TDD only 4274305 (TDD - Telephomc Dewce for the Deaf) 1. CITY COUNCIL PRESENTATION - Conference Room- 1:00 PM A. JAMESTOWN / VIRGINIA BEACH 1607-2007 ANNIVERS~Y Mac Rawls, Steenng Committee Chair William Cone, Director of Jamestown 2007 2. CITY MANAGER'S BRIEFINGS m. LYNNHAVEN RIVER ENVIRONMENTAL RESTORATION H. Clayton Bemmk, Environmental Management Programs Administrator Department of Planning Bo THOROGHGOOD HOUSE CONVEYANCE Lynn Clements, Director, Department of Museums and Cultural Arts III. REVIEW OF AGENDA ITEMS IV. CITY COUNCIL COMMENTS V. INFORMAL SESSION - Conference Room- 3:30 PM A. CALL TO ORDER- Mayor Meyera E. Obemdorf B ROLL CALL OF CITY COUNCIL C. RECESS TO CLOSED SESSION VI. FORMAL SESSION A. CALL TO ORDER - Mayor Meyera E. Obemdorf B. INVOCATION: Dr. Dwight Clmstenbm~ First Presbytenan Church C. PLEDGE OF ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA D ELECTRONIC ROLL CALL OF CITY COUNCIL E. CERTIFICATION OF CLOSED SESSION F. MINUTES 1. INFORMAL AND FORMAL SESSIONS August 12, 2003 CERTIFICATION OF CLOSED SESSION VIRGINIA BEACH CITY COUNCIL WHEREAS: The Virginia Beach City Council convened into CLOSED SESSION, pursuant to the affirmative vote recorded here and in accordance w~th the provisions of The Virginia Freedom of Information Act; and, WHEREAS: Section 2 2-3712 of the Code of Virginia requires a certification by the governing body that such Closed Session was conducted ~n conformity with Virginia Law. NOW, THEREFORE, BE IT RESOLVED: That the V~rglma Beach City Council hereby certifies that, to the best of each member's knowledge, (a) only public business matters lawfully exempted from Open Meeting requirements by Virginia Law were discussed in Closed Session to which this certification resolution applies; and, (b) only such public business matters as were identified in the motion convening this Closed Session were heard, discussed or considered by Virginia Beach City Council. i iii i i i i i i Go MAYOR'S PRESENTATION o KING NEPTUNE 2003 and HIS COURT Nancy A. Creech, President, Neptune Festival i i ii ii I H. AGENDA FOR FORMAL SESSION I. PUBLIC COMMENT 1. TAX EXEMPTION FOR REDEVELOPMENT J. PUBLIC HEARINGS 1. FY 2004 CAPITAL PROJECT AMENDMENTS' a. VDOT Roadways $35,485,142 b. Convention Center Replacement $ 9,071,000 K. CONSENT AGENDA I I THEBEA'')~ ~,_~, ' ~" 'L'-,' , ."7 266'3 NOTICE OF PUBLIC HEARING Amendment of FY 2004 Capital Budget Appropriation Ordinance: Appropriation of $35,485,142 in Additional State Revenue for Five Roadway Projects On August 26, 2003, the Councd of the C~ty of V~rgm~a Beach, V~rgmla w~ll hold a pubhc heanng to consider an amendment to the FY 2004 Capital Budget The C~ty be taking over the admm~strabon and management of five projects from the State, and wdl receive $35,485,142 funding to appropnate to the,projects The proposed supplemental appropnabon of the $35,485,142 m State revenue will be appropriated for the following projects Project Name and Number · Elbow Road Extended - Phase II (VDOT) - CIP #2 152 State Fundinq to Appropriate $5,307,085 ° Indian River Rd - Ph VII (VDOT) - CIP #2 256 9,349,000 Princess Anne Rd/Kempswlle Rd I ntersecbon Improvements (VDOT) - CIP #2 048 19,648,000 · Wltchduck Road - Phase I (VDOT) (Partial) - CIP #2 931 467,057 · W~tchduck Road - Phase II (VDOT) (Part~al) - CIP #2 025 Total 714,000 $35,485,142 The pubhc heanng will be conducted at'6 00 p m in Council Chamber on the second floor of the C~ty Hall Building, Municipal Center, Virginia Beach, Virginia A copy of the proposed amendment shall be available ~n the C~ty Clerk's off~ce for review Interested persons may appear at such t~me and place and present their wews Individuals desiring to provide oral or written comments may do so by contacting the C~ty Clerk's Off~ce at 427- 4303 If you are physically d~sabled or heanng or wsually ~mpalred and need assistance at th~s meeting, please call 427-4305 Vo:ce/TDD Ru'l- Hodges Smith, MMC THE BEACON SUNDAY AUGUST 17 NOTICE OF PUBLIC HEARING Amendment of FY 2004 Capital Budget Appropriation Ordinance: Appropriations of $9,071,000 for the ' Convention Center Replacement Project On August 26, 2003, the Councd of the C~ty of V~rgm~a Beach, V~rgm~a wdl hold a pubhc heanng on an amendment to the FY 2004 Capital Budget The proposed supplemental appropnabon of $9,071,000 for the Convenbon Center Replacement Project (CIP #9-018) ~s for additional design features, which will enhance the amemt~es offered by the facd~ty The add~honal costs will be funded through the major projects revenue streams The public hearing wdl be conducted at 6 00 p m m Council Chamber on the second floor of the C~ty Hall Budding, Municipal Center, V~rgm~a Beach, V~rg~n~a A copy of the proposed amendment shall be available ~n the C~ty Clerk's off~ce for rewew Interested persons may appear at such hme and place and 3resent their v~ews Ind~wduals desiring to prowde oral or written comments may do so by contacting the C~ty Clerk's Off~ce at 427-4303 If you are physically d~sabled or heanng or wsually ~mpa~red and need assistance at th~s meeting, please call 427- 4305 Vo~ceFFDD · Ruth Hodges Smith, MMC i i i L. ORDINANCES/RESOLUTION o Ordinance to AUTHORIZE temporary encroachments into a portion of the City's right- of-way at 2082 and 2080 Tazewell Road (with adjacent property owner), to make up a Condomlmum Association and jointly build a pier in Crab Creek with separate applications to construct and mmntaln boat lifts: (DISTRICT 4- BAYSIDE) a Lynnhaven Promenade: Crab Creek: ROBERT B. THOMA PHILLIP O. GEIB . Ordinance to APPROPRIATE $ 9,071,000 to the Convention Center Capital Improvement Project (CIP) replacement and provide additional features and amenities for the new Convention Center. o Ordinance to TRANSFER $800,000 from the General Fund Reserve to reserve a contingency for the JOHN MOHAMMAD TRIAL . Resolution re ISSUANCE of $165,000,000 Virginia Beach Development Authority's Revenue Bonds, Series 2003A and AUTHORIZING the execution and delivery of appropriate documents. I I I CITY OF VIRGINIA BEACH AGENDA ITEM ITEM: Encroachment Request to construct and maintain a pier and boat lift for Robert B Thoma MEETING DATE: August 26, 2003 Background: Mr Robert Thoma desires to construct and maintain a p~er and boat lift in Crab Creek which is adjacent to the eastern portion of his property The adjacent property owner to the south will jointly build the pier with Mr. Thoma but has made a separate application to construct and maintain his own boat lift. Mr. Thoma and Mr. Gelb (adjacent properbj owner) located at 2082 and 2080 Tazewell Road make up what is recognized as a condominium association. Considerations: City Staff has reviewed the requested encroachments and has recommended approval of same, subjected to certain conditions outlined in the agreement. There are encroachments of the same nature along Crab Creek where Mr Thoma desires to construct and maintain his proposed encroachment. Council approved an encroachment of the same nature on April 22, 2003 ~n Crab Creek. Public Information: Advertisement of City Council Agenda Alternatives: Approve the encroachment as presented, deny the encroachment, conditions as desired by Council. or add Recommendations: Approve the request subject to the terms and conditions of the agreement Attachments: Ordinance, Location Map, Agreement, Plat, and Pictures. Recommended Action: Approval of the ordinance Submitting Department/Agency: Public Works I Real Estate~c~ ~ ~-~3 City Manager~ l~ ~~~ 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Requested by Department of Public Works Ai~ORDINANCE TO AUTHORIZE TEMPORARY ENCROACHMENT INTO A PORTION OF RIGHT-OF-WAY IN THE LYNNHAVEN PROMENADE BY ROBERT B. THOMA, ASSIGNS AND SUCCESSORS IN TITLE WHEREAS, Robert B. Thoma, desires to construct and maintain a pier and boat lift at the rear of 2082 Tazewell Road Virginia Beach, Virginia, upon the City's right-of-way known as Lynnhaven Promenade. WHEREAS, City Council is authorized pursuant to §§ 15.2- 2009 and 15.2-2107, Code of Virginia, 1950, as amended, to authorize temporary encroachments upon the City's right-of-way, subject to such terms and conditions as Council may prescribe. NOW, THEREFORE BE IT ORDAINED BY THE COUNCIL OF THE CITY OF VIRGINIA BEACH, VIRGINIA: That pursuant to the authority and to the extent thereof contained in ~§ 15.2-2009 and 15.2-2107, Code of Virginia, 1950, as amended, Robert B. Thoma, assigns and successors in title are authorized to construct and maintain a temporary encroachment for a pier and boat lift in a portion of the City's right-of-way known as Lynnhaven Promenade as shown on the map entitled: "REAL ESTATE ENCROACHMENT REQUEST PROPOSED PIER AND BOAT LIFT FOR ROBERT B. THOMA 2080 AND 2082 TAZEWELL ROAD, A CONDOMINIUM LYNNHAVEN DISTRICT 25 26 27 28 29 3O 31 32 33 34 35 36 37 38 39 VIRGINIA BEACH, VA (M.B. 215 PG. 69) DATE: AUGUST 29, 2002", a copy of whzch zs on fzle zn the Department of Public Works and to whzch reference ms made for a more partmcular descrmptmon; and BE IT FURTHER ORDAINED, that the temporary encroachments are expressly subject to those terms, conditzons and crzterza contazned zn the Agreement between the Czty of Vzrgznza Beach and Robert B. Thoma, (the "Agreement") which ms attached hereto and incorporated by reference; and BE IT FURTHER ORDAINED that the Czty Manager or his authorized deszgnee is hereby authormzed to execute the Agreement. BE IT FURTHER ORDAINED, that thzs Ordinance shall not be zn effect untzl such tzme as Robert B. Thoma and the Czty Manager or hzs authorized deszgnee execute the Agreement. Adopted by the Counczl of the Czty of V~zgmnza Beach, Virgmnla, on the day of , 2003. 40 41 42 43 44 45 46 47 48 49 5O CA-# g s a lmons / r thoma / ord. R-1 PREPARED: 06.10.03 ~ AS TO CONTENTS DE PARTMENT APPROVED ASz. T~.~LE GAL C I TT~ATTORNE I~ SHORE DR. PIEDMONT £ LOCATION MAP SHOWING ['%,... AT 2082 TAZEWELL RD. [ TAZEWELL. DGN M.J.S. PREPARED BY PAN ENG. DRAFT. JULY 22, 2003 ENCROACHMENT REQUESTED BY ROBERT THOMA INTO CITY RIGHT-OF-WAY KNOWN AS LYNN HAVEN PROMENADE PKEPARED BY VIRGINIA BEACH CITY ATTORNEY'S OFFICE EXEMPTED FROM RECORDATION TAXES UNDER SECTIONS 58 1-81 l(a)(3) AND 58.1-811 (c)(4) REIIV[BURSEMENT AUTHORIZED UNDER. SECTION 25-249 THIS AGREEMENT, made this o~4~ay of (J-tx ,,~ ~- ,2003, by and between the CITY OF VIRGINIA BEACH, VIRGINIA, a municipal corporation, Grantor, "City", and ROBERT B. THOMA, PHILIP O. _GEIB, and 2080 & 2082 TAZEWELL ROAD CONDOMINIUM ASSOCIATION, ASSIGNS AND SUCCESSORS IN TITLE, "Grantee", even though more than one. WITNESSETH: That, WHEREAS, the Grantee, Robert B. Thoma is the owner of that certain lot, tract, or parcel of land designated and described as "3 STORY DUPLEX UNIT B", as shown on "CONDOMINIUM PLAT 2080 & 2082 TAZEWELL ROAD A CONDOMINIUM BEING LOT 3, BLOCK 4, SECT. A PLAT OF OCEAN PARK M.B. 5 P. 69,70 BAYSIDE BOROUGH VA. BEACH, VIRGINIA SCALE: 1"= 10' SEPTEMBER 19, 1991", as recorded in M.B. 215, at page 69 in the Clerks Office ofthe Circuit Court ofthe City of Virginia Beach, Virginia and being further designated and described as 2082 Tazewell Road, Virginia Beach, Virginia 23455; WHEREAS, it is proposed by the Grantee, Robert B. Thoma to construct and maintain a pier and boat lift, "Temporary Encroachment", in the City of Virginia Beach; WHEREAS, in constructing and maintaining the Temporary Encroachmem, it is necessary that the Grantee, Robert B. Thoma encroach into a portion of existing City right of way GPIN: 1489-58-6380-2082 known as Lynnhaven Promenade at the rear of 2082 Tazewell Road "The Encroachmem Area"; and WHEREAS, the Grantee has requested that the City permit a Temporary Encroachmem within The Encroachment Area. NOW, THEREFORE, for and in consideration of the premises and of the benefits accruing or to accrue to the Grantee and for the further consideration of One Dollar ($1.00), in hand paid to the City, receipt of which is hereby acknowledged, the City doth grant to the Grantee, Robert B. Thoma permission to use The Encroachmem Area for the purpose of constructing and maintaining the Temporary Encroachmem. It is expressly understood and agreed that the Temporary Encroachmem will be constructed and maintained in accordance with the laws of the Commonwealth of Virginia and the City of Virginia Beach, and in accordance with the City's specifications and approval and is more particularly described as follows, to wit: A Temporary Encroachment into The Encroachment Area as shown on that certain plat emitled: "REAL ESTATE ENCROACHMENT REQUEST PROPOSED PIER AND BOAT LIFT FOR ROBERT B. THOMA 2080 AND 2082 TAZEWELL ROAD, A CONDOMINIUM LYNNHAVEN DISTRICT VIRGINIA BEACH, VA DATE: AUGUST 29, 2002", a copy of which is attached hereto as Exhibit "A" and to which reference is made for a more particular description. It is further expressly understood and agreed that the Temporary Encroachment herein authorized terminates upon notice by the City to the Grantee, and that within thirty (30) days after the notice is given, the Temporary Encroachrnem must be removed from The Encroachment Area by the Grantee; and that the Grantee will bear all costs and expenses of such removal. It is further expressly understood and agreed that the Grantee, Robert B. Thoma shal31 indemnify and hold harmless the City, its agents and employees, from and against all claims, damages, losses and expenses including reasonable attorney's fees in case it shall be necessary to file or defend an action arising out of the location or existence of the Temporary Encroachment. It is further expressly understood and agreed that nothing herein contained shall be construed to enlarge the permission and authority to permit the maintenance or construction of any encroachment other than that specified herein and to the limited extent specified herein, nor to permit the maintenance and construction of any encroachment by anyone other than the Grantee. It is further expressly understood and agreed that the Grantee agrees to maintain the Temporary Encroachment so as not to become unsightly or a hazard. It is further expressly understood and agreed that the Grantee, Robert B. Thoma must obtain a permit from the Office of Development Services Center/Planning Department prior to commencing any construction within The Encroachment Area. It is further expressly understood and agreed that prior to issuance of a permit, the Grantee, Robert B. Thoma must post sureties, in accordance with their engineer's cost estimate, to the Office of Development Services Center/Planning Department. It is further expressly understood and agreed that the Grantee, Robert B. Thoma must obtain and keep in force all-risk property insurance and general liability or such insurance as is deemed necessary by the City, and all insurance policies must name the City as additional named insured or loss payee, as applicable. The Grantee, Robert B. Thoma also agrees to carry comprehensive general liability insurance in an mount not less than $500,000.00, combined single limits of such insurance policy or policies. The Grantee, Robert B. Thoma will provide endorsements pro~Sding at least thirty (30) days written notice to the City prior to the cancellation or termination of, or material change to, any of the insurance policies. The Grantee, Robert B. Thoma assumes ail responsibilities and liabilities, vested or contingent, with relation to the Temporary Encroachment. It is further expressly understood and agreed that the City, upon revocation of such authority and permission so granted, may remove the Temporary Encroachment and charge the cost thereof to the Grantee, and collect the cost in any manner provided by law for the collection of local or state taxes; may require the Grantee to remove the Temporary Encroachment; and pending such removal, the City may charge the Grantee for the use of The Encroachment Area, the equivalent of what would be the real property tax upon the land so occupied if it were owned by the Grantee; and if such removal shall not be made within the time ordered hereinabove by this Agreement, the City may impose a penalty in the sum of One Hundred Dollars ($100.00) per day for each and every day that the Temporary Encroachment is allowed to continue thereafter, and may collect such compensation and penalties in any manner provided by law for the collection of local or state taxes. IN WITNESS WHEREOF, Robert B. Thoma, Philip O. Geib, and Phih'p O. Geib, President on behalf of 2080 & 2082 Tazewell Road Condominium Association, the said Grantee has caused this Agreement to be executed by their signatures. Further, that the City of Virginia Beach has caused this Agreement to be executed in its name and on its behalf by its City Manager and its seal be hereunto affixed and attested by its City Clerk. CITY OF VIRGINIA BEACH By City Manager/Authorized Designee of the City Manager (SEAL) ATTEST: City Clerk Robert B. Thoma Philip O' (3eib 2080 & 2082 TAZEWELL ROAD CONDOMINIUM ASSOCIATION Philip 0.' Geib, Presidem STATE OF VIRGINIA CITY OF VIRGINIA BEACH, to-wit: The foregoing instrument was acknowledged before me this day of ,2003, by , CITY MANAGER/AUTHORIZED DESIGNEE OF THE CITY MANAGER. My Commission Expires: Notary Public STATE OF VIRGINIA CITY OF VIRGINIA BEACH, to-wit: The foregoing instrumem was acknowledged before me this day of ,2003, by RUTH HODGES SMITH, MMC, City Clerk for the CITY OF VIRGINIA BEACH. Notary Public My Commission Expires: /__ STATE OF CITY/COUNTY~F ~1 [ (,'/Itl ~ ti, , to- 't: I ' -1~'~ I~ - The forego~g ~t~ent was ac~owled~ed ~fore me t~s ~~ ~ ,2003, by Robe~ B. Tho~. I ' ~'~" t~TAPY PUBLIC CC~gC, N'~¥D, UH OF VlRGi~A ~ _~'~,~ ;.,.~ VALENTtNA S F MASTERS } CRW OF VIR~iN!A BEACH ~ .......... My Corniness on Exp,res ~ February 29 20~4 f.,,,~",/'/,' ~' , Notary Public WACHOVIA BAN~ N.A. SHORE DRIVE - 2993 S HOR,'-_ DRIVE VIRGINIA BEACH, VA day of STATE OF ~t,X~it:D CITY/COUNTY OF VetYgll./hl~~2lrx to-wit: O The foregoing instmmem was acknowledged before me this , 2003, by Philip O. Geib. ,~~ day of My Commission Expires: Notary. Public STATE OF V&I lr~ . CITY/COUNTY 013 _kfL~Allr~[tt_~k~--~ to-wit: The foregoing instrument was acknowledged before me this day of .. ,2003, by Philip O. Geib, President on behalf of 2080 & 2082 Tazewell Road Condominium Association. My Commission Expires: Notary Public ~'l~ APPROVED AS TO LEGAL SUFFICIENCY CITY ATT~~ ~ APPROVED AS TO CONTENT q~ITY I~AL E~TATE AGENT ---' CRABC EDGE OF CHANNEL PER CITY DREDGE--~WEST 1____~ .... -----~'"' ; ~._ ~ DEUVER AND INSTALL ~ ~, .. _~~.._ PROPOSED ~' PROP. PIER ALL MATERIALS VIA BARGE. _L FNNHA~ PIER AND UFTS : -OF DUNHA~ UMEN~ ~.- ', ........ (R/W o~,,'"~ul:. ..... -,,~--:-=~ ,~.-, ,,---~,-.-r.'-~.~ :~:~'>~A~ pRop. P~ER ~N~ ,_, ,. i Il/ - . x,~._.~~ ~ .... ~,,,,,.-- ~ -.~., ~ ~ --.~-- F/R/ 0 ,, ~ I'-- ~ ', I.- '~,.,o.o- ~ ,,.o..~ . REMOVE EX.-~. I 2,. I ~ I -- PIER (HATCHED) I ~ ~ I I ~? ,.'3 STORY ..I >~ I~ -DUPLEX N/F PHIUP GEIB14.89_58_6324 ,~.-r ] ~/~,~] i.~r : UNiT B UNIT A ' ~'~' ~'~ ' #2o7~ I #2o7~ , I '"" ~'~-i ,'~ ~' ~--',,,~.~.,.' : L'~ I ,.,~---~ · -. o~l ' ^-_.s,,.'n /~ ----.-',, RO~ (~0' T~ CR^e C.EEK N/F MICHAEL T. DUNHAM SITE DATA: 1489-58-6234---7270 2080 AND 2082 TAZEWELL ROAD, A CONDOMINIUM MB. 215 PG. 69 (;;PINS: 14-89-58-6380-2080 UNIT A PLAN VIEW Exhibit "A SCAt_[" 1"= 30' II ! I WATERFRONT REAL ESTATE ENCROACHMENT REQUEST ~..,...-,,.._,,,~mnNc::llITINm, INC PROPOSED PIER AND BOAT LIFT FOR 1112 dENSEN DRIVE, STE. 206 ROBERT B. THOMA VIRGINIA BEACH, VA 23451 2080 end 2082 TAZEWELL ROAD, A CONDOMINIUM PHONE: (757) 4.25-8244 LYNNHAVEN DISTRCT VIRGINIA BEACH, VA FAX: (757) 425-8244 (M.B. 215 PG. 69) DATE:AUGUST 29, 2002 I I 2082 TAZEWELL ROAD Existing pier will be removed and replaced with a pier and boat lift. Existing pier will be removed to make way for new pier and boat lift on the north side. CITY OF VIRGINIA BEACH AGENDA ITEM ! ITEM: Encroachment Request to construct and maintain a p~er and boat lift for Philip O. Geib MEETING DATE: August 26, 2003 Background: Mr. Philip Geib desires to construct and maintain a pier and boat lift ~n Crab Creek which is adjacent to the eastern portion of his property. The adjacent property owner to the north will jointly build the p~er with Mr. Geib but has made a separate application to construct and maintain his own boat hft. Mr. Geib and Mr Thoma (adjacent property owner) located at 2080 and 2082 Tazewell Road make up what is recognized as a condomimum association Considerations: City Staff has reviewed the requested encroachments and has recommended approval of same, subjected to certain conditions outlined in the agreement There are encroachments of the same nature along Crab Creek where Mr. Geib desires to construct and maintain his proposed encroachment. Council approved an encroachment of the same nature on April 22, 2003 in Crab Creek Public Information: Advertisement of City Council Agenda. Alternatives: Approve the encroachment as presented, deny the encroachment, conditions as desired by Council or add Recommendations: Approve the request subject to the terms and condibons of the agreement. Attachments: Ordinance, Location Map, Agreement, Plat, and Pictures Recommended Action: Approval of the ordinance Submitting Department/Agency: Public Works I Real Estate 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Requested by Department of Public Works AN ORDINANCE TO AUTHORIZE TEMPORARY ENCROACHMENT INTO A PORTION OF RIGHT-OF-WAY IN THE LYNNHAVEN PROMENADE BY PHILIP O. GEIB, ASSIGNS AND SUCCESSORS IN TITLE WHEREAS, Philip O. Geib, desires to construct and maintain a pier and boat lift at the rear of 2080 Tazewell Road in Virginia Beach, Virginia, upon the City's right-of-way known as Lynnhaven Promenade. WHEREAS, City Council is authorized pursuant to §§ 15.2- 2009 and 15.2-2107, Code of Virginia, 1950, as amended, to authorize temporary encroachments upon the City's right-of-way, subject to such terms and conditions as Council may prescribe. NOW, THEREFORE BE IT ORDAINED BY THE COUNCIL OF THE CITY OF VIRGINIA BEACH, VIRGINIA: That pursuant to the authority and to the extent thereof contained in §§ 15.2-2009 and 15.2-2107, Code of Virginia, 1950, as amended, Philip O. Geib, assigns and successors in title are authorized to construct and maintain a temporary encroachment for a pier and boat lift in a portion of the City's right-of-way known as Lynnhaven Promenade as shown on the map entitled: "REAL ESTATE ENCROACHMENT REQUEST PROPOSED PIER AND BOAT LIFT FOR PHILIP O. GEIB 2080 AND 2082 TAZEWELL ROAD, A CONDOMINIUM LYNNHAVEN DISTRICT 25 26 27 28 29 3O 31 32 33 34 35 36 37 38 39 VIRGINIA BEACH, VA (M.B. 215 PG. 69) DATE: AUGUST 29, 2002", a copy of whmch ms on fzle mn the Department of Publmc Works and to whzch reference ms made for a more particular descrzptmon; and BE IT FURTHER ORDAINED, that the temporary encroachments are expressly subject to those terms, conditmons and criteria contazned in the Agreement between the Cmty of Vzrgznla Beach and Phmlip O. Geib, (the "Agreement") whmch ms attached hereto and zncorporated by reference; and BE IT FURTHER ORDAINED that the Czty Manager or hms authormzed desmgnee is hereby authozzzed to execute the Agreement. BE IT FURTHER ORDAINED, that thms Ordmnance shall not be in effect untzl such tzme as Phmllp O. Gemb and the Cmty Manager or his authorized desmgnee execute the Agreement. Adopted by the Councml of the Czty of Virgznza Beach, Virgznia, on the day of , 2003. 40 41 42 43 44 45 46 47 48 49 5O CA-# gsalmons/pgezb/ord. R-1 PREPARED: 06.10.03 ~OVED AS TO CONTENTS DEPARTMENT APPROVED AS TO~L~GAL cITT~TTOR~-~¥~ PIEDMONT SHORE DR. £ INTO KNOWN AS 2080 TAZEWELL. DGN MJ.S. LOCATION MAP .- · SHOWING ~, ENCROACHMENT REQUESTED BY PHILIP O. GEIB CITY RIGHT-OF-WAY LYNNHAVEN PROMENADE, AT TAZEWELL RD. SCALE: 1" -- 100' I I I PREPARED BY P/W ENG. DRAFT. JULY 22, 2003 PREPARED BY VIRGINIA BEACH CITY ATTORNEY'S OFFICE EXEMPTED FROM RECORDATION TAXES UNDER SECTIONS 58.1-Sl l(a)(3) AND 58.1-811 (c)(4) REIMBURSEMENT AUTHORIZED UNDER SECTION 25=249 THIS AGREEMENT, made this ,2003, by and between the CITY OF VIRGINIA BEACH, VIRGINIA, a municipal corporation, Grantor, "City", and PHILIP O. G.EIB, ROBERT B. THOMA, and 2080 & 2082 TAZEWELL ROAD CONDOMINIUM ASSOCIATION, ASSIGNS AND SUCCESSORS IN TITLE, "Grantee", even though more than one. WI TNE S S E T H: That, WHEREAS, the Grantee, Philip O. Geib is the owner of that certain lot, tract, or parcel of land designated and described as "3 STORY DUPLEX UNIT A", as shown on "CONDOMINIUM PLAT 2080 & 2082 TAZEWELL ROAD A CONDOMINIUM BEING LOT 3, BLOCK 4, SECT. A PLAT OF OCEAN PARK M.B. 5 P. 69,70 BAYSIDE BOROUGH VA. BEACH, VIRGINIA SCALE: 1" = 10' SEPTEMBER 19, 1991", as recorded in M.B. 215, at page 69 in the Clerks Office ofthe Circuit Court of the City of Virginia Beach, Virginia and being further designated and described as 2080 Tazewell Road, Virginia Beach, Virginia 23455; WHEREAS, it is proposed by the Grantee, Phih'p O. Geib to construct and maintain a pier and boat lift, "Temporary Encroachment", in the City of Virginia Beach; WHEREAS, in constructing and maintaining the Temporary Encroachmem, it is necessary that the Grantee, Philip O. Geib encroach into a portion of existing City right of way GPIN: 1489-58-6380-2080 known as Lynnhaven Promenade at the rear of 2080 Tazewell Road "The Encroachmem Area"; and WHEREAS, the Grantee has requested that the City permit a Temporary Encroachmem within The Encroachmem Area. NOW, THEREFORE, for and in consideration of the premises and of the benefits accruing orto accrue to the Grantee and for the further consideration of One Dollar ($1.00), in hand paid to the City, receipt of which is hereby acknowledged, the City doth grant to the Grantee, Philip O. Geib permission to use The Encroachmem Area for the purpose of constructing and maintaining the Temporary Encroachmem. It is expressly understood and agreed that the Temporary Encroachmem will be constructed and maintained in accordance with the laws of the Commonwealth of Virginia and the City of Virginia Beach, and in accordance with the City's specifications and approval and is more particularly described as follows, to wit: A Temporary Encroachmem into The Encroachmem Area as shown on that certain plat entitled: "REAL ESTATE ENCROACHMENT REQUEST PROPOSED PIER AND BOAT LIFT FOR PHILIP O. GEIB 2080 AND 2082 TAZEWELL ROAD, A CONDOMINIUM LYNNHAVEN DISTRICT VIRGINIA BEACH, VA DATE: AUGUST 29, 2002", a copy of which is attached hereto as Exhibit "A" and to which reference is made for a more particular description. It is further expressly understood and agreed that the Temporary Encroachmem herein authorized terminates upon notice by the City to the Grantee, and that within thirty (30) days after the notice is given, the Temporary Encroachmem must be removed fxom The Encroachmem Area by the Grantee; and that the Grantee will bear all costs and expenses of such removal. It is further expressly understood and agreed that the Grantee, Philip O. Geib shall indemnify and hold harmless the City, its agents and employees, from and against all claims, damages, losses and expenses including reasonable attorney's fees in case it shall be necessary to file or defend an action arising out of the location or existence of the Temporary Encroachment. It is further expressly understood and agreed that nothing herein contained shall be construed to enlarge the permission and authority to permit the maintenance or construction of any encroachment other than that specified herein and to the limited extent specified herein, nor to permit the maintenance and construction of any encroachment by anyone other than the Grantee. It is further expressly understood and agreed that the Grantee agrees to maintain the Temporary Encroachment so as not to become unsightly or a hazard. It is further expressly understood and agreed that the Grantee, Philip O. Geib must obtain a permit from the Office of Development Services Center/Planning Department prior to commencing any construction within The Encroachment Area. It is further expressly understood and agreed that prior to issuance of a permit, the Grantee, Philip O. Geib must post sureties, in accordance with their engineer's cost estimate, to the Office of Development Services Center/Planning Department. It is further expressly understood and agreed that the Grantee, Philip O. Geib must obtain and keep in force all-risk property insurance and general liability or such insurance as is deemed necessary by the City, and all insurance policies must name the City as additional named insured or loss payee, as applicable. The Grantee, Philip O. Geib also agrees to carry comprehensive general liability insurance in an mount not less than $500,000.00, combined single limits of such insurance policy or policies. The Grantee, Philip O. Geib will provide endorsements providing at least thirty (30) days written notice to the City prior to the cancellation or termination of, or material change to, any ofthe insurance policies. The Grantee, Phih'p O. Geib assumes all responsibilities and liabilities, vested or contingent, with relation to the Temporary Encroachment. It is further expressly understood and agreed that the City, upon revocation of such authority and permission so granted, may remove the Temporary Encroachment and charge the cost thereofto the Grantee, and collect the cost in any manner provided by law for the collection of local or state taxes; may require the Grantee to remove the Temporary Encroachment; and pending such removal, the City may charge the Grantee for the use of The Encroachment Area, the equivalent of what would be the real property tax upon the land so occupied if it were owned by the Grantee; and if such removal shall not be made within the time ordered hereinabove by this Agreement, the City may impose a penalty in the sum of One Hundred Dollars ($100.00) per day for each and every day that the Temporary Encroachment is allowed to continue thereafter, and may collect such compensation and penalties in any manner provided by law for the collection of local or state taxes. IN WITNESS WHEREOF, Philip O. Geib, Robert B. Thoma and Philip O. Geib, President on behalf of 2080 & 2082 Tazewell Road Condominium Association, the said Grantee has caused this Agreement to be executed by their signature. Further, that the City of Virginia Beach has caused this Agreement to be executed in its name and on its behalf by its City Manager and its seal be hereunto affixed and attested by its City Clerk. (SEAL) ATTEST: City Clerk CITY OF VIRGINIA BEACH By Cky Manager/Authorized Designee of the City Manager Philip O. Geib R~)bert b. Thoma 2080 & 2082 TAZEWELL CONDOMINIUM ASSOCIATION Philip O. Geib, Presidem ROAD STATE OF VIRGINIA CITY OF VIRGINIA BEACH, to-wit: The foregoing instrumem was acknowledged before me this day of ,2003, by , CITY MANAGER/AUTHORIZED DESIGNEE OF THE CITY MANAGER. My Commission Expires: Notary Public STATE OF VIRGINIA CITY OF VIRGINIA BEACH, to-wit: The foregoing instrument was acknowledged before me this day of , 2003, by RUTH HODGES SMITH, MMC, City Clerk for the CITY OF VIRGINIA BEACH. My Commission Expires: Notary Public STATE OF CITY/COUNTY 6F The foregoing instrument was acknowledged before me this '~~ ,2003, by Philip O. Geib. day of My Commission Expires: q' ~ O' 0 a~ Notary Public Rev O? lo i STATE OF ~/l~f~~' . CITY/~Y O~)~-[(HJ~Ij~ &~t/4, to-wit: ~ "~/~ ~ ~ ld ' The Ioregomg ~tment was ac ow e gea ~fore me t~s ~]~ ,2003, by Robe~ B. Tho~. ~ VqLEN?blA S F MASTERS t CiTY OF V:RGIN[A BEAvH ~ '~ My Comm;ss~on ~p~res } Not~ Pubic Februaw 20, 2004 ~ ~yWo~s~o~x~sT'-'~- day of STATE OF ¢~.g~ C T¥/COUNTY n azl to-wit: The foregoing instrumem was acknowledged before me this day of ,2003, by Philip O. Geib, Presidem on behalf of 2080 & 2082 Tazewell Road Condominium Association. My Commission Expires: q- 30'/)~ Notary Public APPROVED AS TO LEGAL SUFFICI NCY CITY ATTORNEY APPROVED AS TO CONTENT 1 24 02 L ~ PROPOSED ~ rV N H A ~~ UFTS w 2s ~DE ~HW c ~o' C.A.~ ---f--- CRAB CREEK ~. '"'-FLOOD~EBB --'" / ~ST EDGE OF CHANNEL PER Cl~ DREDGE --L ................... ~ L~ N--S--B ¥--: --W~ ~ R~ A--Y--S U--R~ ST To/~ s/oo ~ DEUVER AND INSTALL ' PROP. PIER ALL MATERIALS VIA BARGE. OF DUNHAM PROP. PIER OF FISHER ,.*- ..J. ~ -*. ~. ..a. MHW 1.9'..~....................~ PROP. PIER OF GEIB ~" BULKHEAD UNE ~ IPF (TYP) REAR PI..: -- A=586.36', L=25.12' REMOVE EX. PIER (HATCHED) LOT 2 N/F PHIUP (;EIB 14.89-58-6324 I 3 STORY DUPLEX UNIT B UNIT A ~ (F~ · r.kZCan.L ROAO (4o' SITE DATA: 2080 AND 2082 TAZEWELL ROAD, A CONDOMINIUM MB. 215 PG. 69 (;PINS: 1489-58-6,380-2080 UNIT A 1489-58-6380-2082 UNIT B #2078 ~2076 A=54.77' CRAB CREEK CONDOMINIUM N/F MICHAEL T DUNHAM 1489- 58-62.34- 7270 Exhibit "A" IPF PLAN VIEW SCALE 1" = ,30' WATERFRONT CONSULTING;, INC 1112 JENSEN DRIVE, STE. 206 VIRGINIA BEACH, VA 233451 PHONE: {757) 425-8244 FAX: (757) 425-8244 REAL ESTATE ENCROACHMENT REQUEST PROPOSED PIER AND BOAT LIFT FOR PHILIP O. GLIB 2080 ond 2082 TAZEWELL ROAD, A CONDOMINIUM LYNNHAVEN DISTRCT VIRGINIA BEACH, VA (M.B. 215 PG. 69) DATE:AUGUST 29, 2002 I 2080 TAZEWEI,L ROAD Existing pier will be removed and replaced with a pier and boat lift. Existing pier will be removed to make way for new pier and boat lift on the south side. CITY OF VIRGINIA BEACH AGENDA ITEM IITEM: Additional Appropnatlons for the Convention Center Replacement, CIP 9-018 MEETING DATE: August 26, 2003 I I l l Background: Dunng their meeting on August 12, 2003, City Council received a project status update for the new convention center. A s~gmficant part of that presentation was a d~scuss~on on the project budget and the current estimates for the Guaranteed Maximum Price (GMP). Of the $193 5 million for the convention center, $143 million is dedicated to the actual cost of construction represented by the GMP. The GMP proposal submitted by Turner Construction on July 25, 2003 was ~n the amount of $147.6 m~lhon. Several options for resolving the deficit were presented for Council's consxderatlon. Additionally, a prior list of alternative features that were beyond the budget (presented to Council on April 15, 2003) totaling $8.2 million were reviewed dunng the August 12, 2003 presentation. Considerations: The Council members were polled to determine their preferences for which features should be added back to the project with a commensurate level of additional funding. Those features that received at least six endorsements from the Council members have been included on the attached list. That hst totals $9,071,000. Since this amount exceeds 1% of total CIP appropriations for FY 2003/2004, a public heanng will also be scheduled for August 26, 2003. The cost of the additional features will be paid through the revenue streams generated from the Major ProJects Specml Revenue Fund as a result of anticipated interest cost savings from a favorable bond market. Public Information: A public notice appeared ~n the Beacon on August 17, 2003 advertising the public heanng. Alternatives: There are two alternatives: 1. Approve the Appropriation Ordinance in the amount of $9,071,000 to add those additional features to the Convention Center project endorsed by Council at the August 12, 2003 meeting. 2 Do not approve the ordinance and proceed w~th the design and construction of the convention center w~thout those additional features I Recommendations: Approve the attached Appropriation ordinance. l Attachments: 1 Convention Center Additional Items dated August 12, 2003 2 Appropriation Ordinance Recommended Action: Approval Submitting Department/Agency: Public Works City Manager:~[/-- '~t~' AN ORDINANCE TO APPROPRIATE $9,071,000 TO CAPITAL PROJECT #9- 018, CONVENTION CENTER REPLACEMENT, TO PROVIDE ADDITIONAL FEATURES AND AMENITIES AT THE NEW CONVENTION CENTER WHEREAS, it is the desire of Council to appropriate 9 $9,071,000 of additional funds to capital project %9-018, 10 Convention Center Replacement, to provide additional features and 11 amenities at the new Convention Center; and 12 WHEREAS, these additional expenditures will be financed 13 by public facility revenue bonds issued by the Development 14 Authority. 15 NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY 16 OF VIRGINIA BEACH, VIRGINIA: 17 1. That an additional $9,071,000 is hereby appropriated 18 to capital project #9-018, Convention Center Replacement, to fund 19 additional features and amenities at the new Convention Center. 20 2. That the financing source for this additional 21 appropriation will be public facility revenue bonds issued by the 22 Development Authority, with the City providing debt service 23 payments from revenue accumulated in the Major Projects Special 24 Revenue Fund. 25 26 Adopted by the Council of the City of Virginia Beach, Vzrginia 27 on the day of 2003. CA-8988 Ordin/Noncode/CoventionCtrord.wpd R-5 - August 19, 2003 APPROVED AS TO CONTENT: Management ~ APPROVED AS TO LEGAL SUFFICIENCY: City A~t~to~ney' s-~)ffice Convention Center Additional Items 12-Aug-03 Item 1 Meeting Room Partitions and F~mshes 2 Skyhghts at the Exhibit Hall Entrances 3 V~deo Wall 4 Ballroom Amemt~es (Wood Panels, L~ght show) 5 CVB Other Items 6 Irngahon around budding 7 Additional Landscaping - North s~de of building 8 Additional 300 parking spaces 9 Additional Landscaping - Parking Lot 10 Irngahon of areas south of 19th Street 11 19th Street stamped asphalt 12 Expanded Exhibit Hall to 150,000 s.f Total Add to CIP 9-018 Amount $111,000 $107,000 $900,000 $1,066,000 $900,000 $230,000 $250,000 $750,000 $500,000 $252,000 $375,000 $3,630,000 $9,071,000 I CITY OF VIRGINIA BEACH AGENDA ITEM ! ITEM: Ordinance Transferring $800,000 From the General Fund Reserve for Contingencies-Regular to a Reserve for Contingency for the John Muhammad Thai MEETING DATE: August 26, 2003 Background: Only July 16,2003, a Prince William County judge approved a change in venue for the John Muhammad trial from Prince William to Virginia Beach. The trial will beg~n on October 16 and is expected to last at least six weeks. Staff have been diligently planning to accommodate this trial and ensure that the normal business of the government will continue with the least amount of ~nconvenience. It has become clear, however, that the City will need to undertake actions associated with ensuring public safety, providing work space for trial coverage and participants, providing adequate parking for employees and the media, and limiting traffic problems. Considerations: It is also clear that the time frame within which these activities must occur is quite compressed, and the normal policies in place to accommodate transfers of appropriations and purchase of necessary equipment and space may not be suited to meet the demands for this unusual event. Therefore, staff recommend that $800,000 be transferred from the General Fund Reserve for Contingencies-Regular to a Reserve for Contingencies for the John Muhammad Trial from which all necessary transfers can be made to complete activities for the trial. The City Manager will report all expenditures for the trial activibes. Funds not expended will be returned to the General Fund Reserve for Contingencies account. Every effort is being made to obtain funding assistance from the Commonwealth to cover some of these costs. Public Information: Pre-trial media coverage has been extensive. All other public information will be handled through the normal Council agenda process. Alternatives: Without approval of this special, limited authority, it is questionable whether all the necessary actMties associated with safety and parking can be complete before the trial. Further, because it may be difficult to anticipate all needs, staff would have to bring forth various ordinances to Council at various meetings in an a la carte fashion. Recommendations: Approval of ordinance transferring $800,000 from General Fund Reserve for Contingencies to a Reserve for the John Muhammad Trial. · Attachments: Ordinance Recommended Action: Approval Submitting Department/Agency: Muhammad Trial Task Force City Manag~~t~ ~-~. F ~Data~ATY~OrdmX2qONCODE~muhammadarf wpd AN ORDINANCE TO TRANSFER $800,000 FROM THE GENERAL FUND RESERVE FOR CONTINGENCIES-REGULAR TO A RESERVE FOR CONTINGENCY FOR THE JOHN MUHAMMAD TRIAL 5 WHEREAS, on July 16, 2003, a Prince William County judge 6 approved a change in venue for the John Muhammad trmal from 7 Prince William to Virginia Beach; $ WHEREAS, staff have been diligently planning to 9 accommodate this trial and to ensure the normal business of 10 the government is conducted and to ensure the provision of 11 public safety and adequate parking; and 12 WHEREAS, the time frame within which these actmvities 13 must occur is compressed, and the City Manager's current 14 authority to transfer and expend funds may not be suited to 15 accommodate all the necessary activities. 16 NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY 17 OF VIRGINIA BEACH, VIRGINIA: 18 1. That $800,000 from the General Fund Reserve for 19 Contingencies-Regular is hereby transferred to a Reserve for 20 Contingency for the John Muhammad Trial to ensure that all 21 necessary actions are undertaken to support the trial. 22 2. That once these actions are completed, the City 23 Manager is further directed to report all expenditures to the 24 City Council. 25 Adopted by the Council of the City of Virginia Beach, 26 Virginia, on the 26th of August, 2003. CA-8972 ORDIN \NONCODE \Muhammadord. wpd R6 August 20, 2003 APPROVED AS TO CONTENT: Management Services APPROVED AS TO LEGAL SUFFICIENCY' ~ity Attorney-/ CITY OF VIRGINIA BEACH AGENDA ITEM ITEM: $165,000,000 City of V~rg~n~a Beach Development Authority Pubhc Facihty Revenue Bonds, Series 2003A MEETING DATE: August 26, 2003 · Background: C~ty Councd through the Capital Improvement Program and Tax Increment F~nanc~ng Program has authorized the financing of various pubhc facd~bes (see project descr~pbon) w~th the ubhzat~on of pubhc fac~kbes revenue bonds (lease purchase financing) through the Va Beach Development Authority At ~ts meebng of August 19th, the VBDA approved a Plan of F~nanc~ng and authorized the ~ssuance of $165,000,000 C~ty of Va Beach Development Authority Pubhc Facd~ty Revenue Bonds, Ser~es 2003A · Considerations: The financing program totals approximately $327 mdhon Th~s ~ssuance, represenbng approximately one-half of the anbc~pated total ~ssuance of debt for the program, will be the first ~n a series of bonds to be approved by the Authority The bonds wdl be ~ssued under a Master Agreement of Trust w~th Supplemental Agreements for each ser~es Hunton & Wdkams, the C~ty's bond counsel, has prepared a Resolubon for City Council to approve the C~ty's Plan of F~nanc~ng w~th the ~ssuance of $165,000,000 Public Facdlty Revenue Bonds, Series 2003A by VBDA Pursuant to a Support Agreement between the City & VBDA, the C~ty wdl make annual payments to VBDA in amounts sufficient to pay the debt service on the bonds The bonds wdl be sold, electromcally, by compet~bve b~d on September 9, 2003, and on such terms as shall be satisfactory to the C~ty Manager, prowded that the bonds shall have a true ~nterest cost not to exceed 7%. Th~s program has been d~scussed on several occasions w~th the rabng agencies and a rating from each agency has been requested Standard & Poor's rated the ~ssue "AA" based on the Support Agreement from the C~ty and the annual appropriation pledge We are pleased w~th th~s rating since th~s is only one "notch" below our General Obhgabon Bond rating of AA+ After today's Council action no further vote of the City Council will be necessary The final terms of the bond sale will be provided to Council. · Public Information: Pubkc Informabon wdl be handled through the normal Councd agenda process The bond author~zabon was part of the pubhc ~nformabon process of the CIP In add~bon, the Resolubon authorizes the d~str~but,on of the Prekm~nary Official Statement for markebng purposes · Alternatives: There are no alternabve funding sources at th~s bme Th~s request follows previously approved ClPs. · Recommendations: The enclosed Resolubon approwng a Plan of F~nanc~ng w~th VBDA and authorizing the execution of various financing documents associated w~th the Plan ~s recommended for approval by C~ty Council · Attachments: Project Descr~phon Resoluhon Draft of Agreement of Trust Draft of F~rst Supplemental Agreement Draft of Support Agreement Draft of Prehm~nary Official Statement Recommended Action: Submitting Department/Agency: City Manager:~ ~_~ ~ ~ RESOLUTION APPROVING A PLAN OF FINANCING WITH THE CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY, APPROVING CERTAIN DOCUMENTS PREPARED IN CONNECTION WITH SUCH FINANCING AND AUTHORIZING THE EXECUTION AND DELIVERY OF THE SAME WHEREAS, the C~ty of V~rgnnia Beach, V~rginia (the "C~ty"), desires to undertake, ~n 10 connection with the C~ty of Virginia Beach Development Authority (the "Authority"), the 11 financing of various pubhc facilities from time to time, ~ncludlng, initially, the replacement of 12 the Pavilion Theater and the Convention Center, the construction of a parking facility for the 13 Virguma Marine Science Museum, Open Space Site acqmslt~on, construction of an Emergency 14 Communications Operations Center, the construction of the Thirty-First Street Parking garage, 15 the construction of the Town Center Block 10 and 12 garages, acquisition of an Electronic Ballot 16 System, a Revenue Assessment and Collection System and a City/School Human Resource 17 Payroll System and the replacement of certain Commumcations Infrastructure and F~re 18 Apparatus Equipment (collectively, the "2003A Project"); and 19 WHEREAS, the Authority, pursuant to Chapter 643 of the Virg~ma Acts of Assembly of 20 1964, as amended (the "Act"), under which it is created, is authorized to acquire, improve, 21 maintain, equip, own, lease and dispose of"Authority facilities," as defined in the Act, to finance 22 or refinance such facihties, to issue its revenue bonds, notes and other obligations from t~me to 23 time for such purposes and to pledge all or any part of ~ts assets, whether then owned or 24 thereafter acquired, as security for the payment of the principal of and interest on any such 25 obligations; and 26 WHEREAS, in furtherance of the purposes of the Act, the City has requested the 27 Authority to undertake the 2003A Project, and the Authority has detenmned to issue ~ts public 28 facility revenue bonds and to use the proceeds thereof to finance costs incurred ~n connection 29 with the 2003A ProJect for the benefit of the City; and 30 WHEREAS, the Authority proposes to xssue its Pubhc Facility Revenue Bonds, Series 31 2003A (the "Bonds"), ~n the maximum aggregate principal amount not to exceed $165,000,000 32 to finance the 2003A Project and to pay the costs of issuing the Bonds; and 33 WHEREAS, there have been presented to this meeting drafts of the following documents 34 (the "Documents"), proposed in connectxon w~th the undertaking of the 2003A ProJect and the 35 issuance and sale of the Bonds: 36 (a) Agreement of Trust draft dated August 14, 2003, as supplemented by a F~rst 37 Supplemental Agreement of Trust draft dated August 14, 2003, including the 38 form the Bonds (collectively, the "Trust Agreement"), each between the Authority 39 and a trustee to be named (the "Trustee"), pursuant to which the Bonds are to be 40 ~ssued and which is to be acknowledged and consented to by the City; 41 (b) Support Agreement draft dated August 14, 2003, between the Authority and the 42 City pursuant to which the City will make annual payments to the Authority in 43 amounts sufficient to pay the princxpal of and interest on the Bonds; 44 (c) 45 Prehminary Official Statement draft dated August 14, 2003, of the Authority relating to the public offenng of the Bonds (the "Preliminary Official 46 Statement"); and 47 (d) Contanuing Disclosure Agreement draft August 14, 2003, pursuant to which the 48 Caty agrees to undertake certain continuing disclosure obligations with respect to 49 the Bonds; 50 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY 51 OF VIRGINIA BEACH, VIRGINIA: 52 1. The following plan for finanmng the 2003A Project is hereby approved. The 53 Authority w~ll issue the Bonds in a maximum aggregate pnncapal amount not to exceed 54 $165,000,000. The Authonty wall use the proceeds of the Bonds to finance the costs of the 55 2003A Project and the costs of issuing the Bonds. Pursuant to the Support Agreement, the City 56 wall make Annual Payments and Additional Payments (as each is defined in the Support 57 Agreement) to the Authority ~n amounts sufficient to amortize the Bonds and to pay the fees or 58 expenses of the Authority and the Trustee. The obhgation of the Authority to pay princapal of 59 and premium, if any, and interest on the Bonds will be limited to annual payments and additional 60 payments received from the C~ty. The Bonds wall be secured by an assignment of the Annual 61 Payments and certain Additional Payments due under the Support Agreement, all for the benefit 62 of the holders of the Bonds. The obligation of the City to make Annual Payments and Additional 63 Payments will be subject to the City Council makang annual appropriations in sufficient amounts 64 for such purposes. The plan of financing for the 2003A Project shall contain such additional 65 requirements and provisions as may be approved by the City. 66 2. The City Council, whale recognizing that ~t ~s not empowered to make any banding 67 commatment to make appropnations beyond the current fiscal year, hereby states its intent to 68 make annual appropriataons in future fiscal years ~n amounts sufficient to make all payments due 69 under the Support Agreement and hereby recommends that future City Councils do likewise 70 dunng the term of the Support Agreement. 71 3. The City Manager is hereby authorized and d~rected to execute the Documents, 72 which shall be in substantially the forms submitted to th~s meeting, which are hereby approved, 73 with such completions, omissions, insertions and changes not inconsistent with this Resolution as 74 may be approved by the C~ty Manager, h~s execution to constitute conclusive evidence of his 75 approval of any such completions, omissions, insertions and changes. 76 4. (a) In making completions to the Support Agreement, the City Manager, in 77 collaboration with Government Finance Associates, Inc. and Government Finance Group, the 78 City's financial advisors (the "Financial Advisors"), shall provide for Annual Payments in 79 amounts equivalent to the payments on the Bonds, which shall be sold to the purchaser thereof 80 on terms as shall be satisfactory to the City Manager; prowded that the Annual Payments shall be 81 equivalent to the Bonds maturing in ~nstallments ending not later than in 2025; having a tree or 82 "Canadian" interest cost not exceeding 7.00% (taking into account any origanal ~ssue discount); 83 and being sold to the purchaser thereof at a price not less than 99% of the aggregate principal 84 amount thereof (without talong into account any origunal ~ssue discount or premium). 85 (b) The Bonds shall be sold by competitive bid in the pnncipal amount 86 87 88 89 90 determined by the City Manager, in collaboration with the F~nanclal Advisors, and the City Manager shall receive bids for the Bonds and award the Bonds to the bidder providing the lowest "tree" or "Canadian" interest cost, subject to the limitations set forth in the paragraph above. Following the sale of the Bonds, the C~ty Manager shall file a certificate with the City Clerk setting forth the final terms of the Bonds. The actions of the City Manager in approving the 91 terms of the Bonds shall be conclusive, and no further action shall be necessary on the part of the 92 C~ty Council. 93 5. The Preliminary Official Statement in the form presented to this meeting ~s 94 approved w~th respect to the information contained therein pertaimng to the City. The purchaser 95 of the Bonds ~s authorized to distribute to prospective purchasers of the Bonds the Preliminary 96 Official Statement in form deemed to be "near final," within the meaning of Rule 15c2-12 of the 97 Securities and Exchange Commission (the "Rule"), with such completions, omissions, lnsert~ons 98 and changes not inconsistent wah this Resolution as may be approved by the City Manager. 99 Such distribution shall constitute conclusive evidence that the City has deemed the Preliminary 100 Official Statement to be final as of its date w~thin the meaning of the Rule, with respect to the 101 ~nformation therein pertaining to the C~ty. The City Manager ~s authorized and directed to 102 approve such completions, omissions, insertions and other changes to the Preliminary Official 103 Statement that are necessary to reflect the terms of the sale of the Bonds, detenmned as set forth 104 in paragraph 4, and the details thereof and that are appropriate to complete it as an official 105 statement in final form (the "Official Statement") and distribution thereof by the purchaser of the 106 Bonds shall constitute conclusive evidence that the City has deemed the Official Statement final 107 as of its date within the meaning of the Rule. 108 6. The City covenants that it shall not take or omit to take any action the taking or 109 omission of which shall cause the Bonds to be "arbitrage bonds" w~thin the meaning of Section 110 148 of the Internal Revenue Code of 1986, as amended (the "Code"), and regulations thereunder, 111 or otherwise cause interest on the Bonds to be ~ncludable in the gross income for Federal income 112 tax purposes of the registered owners thereof under existing law. Without hmiting the generahty 113 of the foregoing, the C~ty shall comply with any provision of law that may require the City at any 114 time to rebate to the United States of America any part of the earnings derived from the 115 ~nvestment of the gross proceeds of the Bonds. The C~ty shall pay from its legally available 116 general funds any amount required to be rebated to the United States of America pursuant to the 117 Code. 118 7. Any authorization herein to execute a document shall include authonzat~on to 119 deliver it to the other parties thereto and to record such document where appropriate. 120 8. All other acts of the City Manager, the Director of Finance and other officers of 121 the City that are in conformity with the purposes and intent of this Resolution and in furtherance 122 of the issuance and sale of the Bonds and the undertaking of the 2003A Project are hereby 123 approved and ratffied. 124 9. This Resolution shall take effect ~mmediately. 125 Adopted by the Council of the City of V~rgnnia Beach, Virginia on the. day of 126 2003. 127 128 129 130 131 132 133 134 135 136 137 138 139 CA8990 Ordm/noncode/DA Document Approval 2003A Project R-2 August 18, 2003 APPROVED AS TO CONTENT: Finance APPROVED AS TO LEGAL SUFFICIENCY: City Attom~yy's ~ffice EXCERPT FROM THE PRELIMINARY OFFICIAL STATEMENT THE PROJECTS Generally. The ProJects to be financed ~n whole or ~n part w~th the proceeds of the Series 2003A Bonds have been authorized by C~ty Council either through the C~ty's six-year Capital Improvement Program ("ClP") or through tax-increment financing programs The CIP is rewsed annually and approved by City Council ~n conjuncbon with ~ts adopbon of the C~ty's annual operating budget For a more detailed d~scuss~on of the CIP, see the subsection "Capital Improvement Program" ~n Appendix A The ProJects approved ~n the CIP include the Convention Center Replacement, the V~rg~n~a Manne Science Museum parking project, the Pawhon Theater Replacement Project, the Open Space S~te Acquisition program and the Thirty-First Street Parking Garage The ProJects authorized under tax-~ncrement financing programs are the Town Center Garage Block 10 and the Town Center Garage Block 12 At the times these proJects were ~ncluded ~n either the CIP or in a tax-increment financing program, City Council also addressed the need to ensure that adequate revenues would be available to the C~ty to undertake these s~gn~flcant proJects With respect to the Convention Center Replacement, the V~rgm~a Marine Science Museum parking proJect, the Pawl~on Theater Replacement Project and the Open Space S~te Acqu~s~bon program that were in~t~ally approved in the F~scal Year 2001-02 CIP, C~ty Council ~ncreased certain taxes that are projected to be sufficient to pay for such projects The tax ~ncreases of 2 5% on the hotel tax (total tax of 8%, effective November 1, 2001), 1% on the restaurant tax (total tax of 5 5%, effective July 1, 2001), and 5 cents on a pack of cigarettes (effective July 1,2001) As of June 30, 2003, these increased taxes have generated an aggregate of $19,951,033 ~n add~bonal revenue to support the costs of these projects W~th respect to the two Town Center Parking Garage projects and the other public ~nfrastructure fac~l~bes to be undertaken by the Authority and the C~ty ~n the Town Center of Virglma Beach, the C~ty created the Central Bus~ness D~stnct - South tax ~ncrement financing d~str~ct. The tax ~ncrement revenues and other available revenues derived from th~s TIF d~stnct are anticipated to be sufficient to pay the costs of the pubhc parking garages and the other pubhc ~nfrastructure fac~ht~es w~thout resorting to a special service district tax that also could be lewed m a Town Center special service dlstr~ct As of June 30, 2003, $1,764,284 ~n tax ~ncrement revenues have been generated s~nce th~s TIF d~str~ct was created W~th respect to the Th~rty-F~rst Street Parking Garage proJect located at the oceanfront ~n the C~ty's resort area, the C~ty will charge for parking ~n the garage Based on the projected use of the facility, ~t ~s anbc~pated that the parking revenues and other fiscal ~mpacts w~ll be sufficient to pay for the operations of the garage including debt service over t~me The rema~mng projects (Emergency Commumcabons Operabon Center, Revenue Assessment and Collecbon System, Electronic Ballot System, C~ty/School Human Resource Payroll System, Commun~cabons Infrastructure Replacement and F~re Apparatus Equipment), representing less than ten percent of the currently proJected total pubhc facility revenue bond program fundings, will receive General Fund support from ex~st~ng revenue sources Description of the Projects. The aggregate cost of the Projects currently ~s estimated to be approximately $410,550,000. The C~ty currently plans to finance approximately $327 m~ll~on of these costs through the Authonty's ~ssuance of ~ts pubhc fac~hty revenue bonds The Series 2003A Bonds are the first ser~es to be ~ssued under th~s plan The remaining costs of ProJects (approximately $83.55 mllhon) w~ll come from other funding sources, ~nclud~ng state and federal funding, sale of property, general obhgabon bonds, General Fund appropnabons and various fund balances, pay-as-you-go funding and private contributions Prospecbve purchasers of the Series Page 1 of 3 2003A Bonds should note that the CIP ~s a s~x-year program and the funding sources and amounts are subject to modification over t~me at the d~scretlon of City Council The following sets forth brief descnpbons of the Projects to be financed ~n whole or ~n part with the proceeds of the Series 2003A Bonds Convention Center Replacement - Th~s project prowdes for the replacement and relocabon of the ex~sbng pawhon convenbon center on the same s~te It wdl prowde for approximately 150,000 square feet of exhibit hall, 25,000 square feet of meebng rooms and 32,000 square feet of ballroom space Total estimated cost of th~s project ~s $197,025,000 (an additional $9,000,000 is being added to the project) Thlrty-F~rst Street Parking Garage - Th~s project is for the construction of an approximate 1,000 space parking garage, 26,000 square feet of retad space and a pedestrian bridge from the garage to a proposed hotel to be developed on the oceanfront Total estimated cost of th~s project ~s $23,811,800 Town Center Garage Block 10 - This project ~s for the construction of an approximate 840 space parking garage located ~n the Town Center d~stnct of the C~ty Total estimated cost of th~s project is $13,500,000 For a further discussion of the Town Center Project, see "Tax Increment Financing" and "Other Long-Term Obligations" ~n the secbon "City Indebtedness and Capital Plan" in Appendix A Town Center Garage Block 12 - Th~s project is for the construction of an approximate 305 space parking garage located ~n the Town Center d~stnct of the C~ty Total esbmated cost of th~s project ~s $8,300,000 For a further d~scuss~on of the Town Center Project, see "Tax Increment Financing" and "Other Long-Term Obligations" ~n the secbon "City Indebtedness and Capital Plan" in Appendix A Open Space S~te Acqu/srbon - This project provides for the acqulslbon of land for preservation and/or recreabonal purposes. Total esbmated cost of th~s project ~s $54,090,000 V/rglnia Manne Science Museum Parking - Th~s project will prowde a 500 space parking lot across the road from the museum and will address the safe crossing of pedestrians from the parking area to the museum Total esbmated cost of th~s project ~s $3,000,000 Emergency Communications Operabon Center- This project is for the design and construcbon of the new Emergency Commumcabons Center and Emergency Operation Center, to be located ~n the Municipal Center, on the north s~de of the ~ntersecbon of Pnncess Anne Road and James Madison Boulevard, across the street from the Public Safety Building Total estimated cost of th~s project ~s $10,456,000 Revenue Assessment and Collect/on System - Th~s project provides for a comprehensive, fully integrated tax system to replace the computer systems currently used to support tax revenue assessment and collection Th~s is a iomt project of the Commissioner of Revenue, C~ty Treasurer and Real Estate Assessor Total esbmated cost of th~s project ~s $5,402,O00 Electronic Ballot System - Th~s project ~s for the purchase of 800 new voter machines to prowde an electronic ballot stabon Total esbmated cost of th~s project ~s $3,766,565 Pawbon Theater Replacement- Th~s project replaces the current 1,000 seat Pawhon Theater with a new theater at the Town Center and ~ncludes parking Total esbmated cost of th~s project ~s $50,000,000 Page 2 of 3 Crty/School Human Resource Payroll System - Th~s project replaces the C~ty's ten year old payroll system with a new information system utd~zmg current network infrastructure Total estimated cost of th~s project ~s $3,800,000 Commumcattons Infrastructure Replacement- Th~s project wdl replace various components of the pubhc safety commumcat~ons ~nfrastructure related to eqmpment associated w~th rece~wng, d~spatch~ng, transpondmg and answenng pubhc safety calls Total estimated cost of th~s project ~s $22,225,000 Ftre Apparatus Equtpment- Th~s project funds replacement of heavy eqmpment fire apparatus that costs over $50,000 and have a useful hfe of over ten years Total estimated cost of th~s project ~s $15,175,000 Page 3 of 3 AGREEMENT OF TRUST between CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY and WACHOVIA BANK, NATIONAL ASSOCIATION, as Trustee Dated as of [September 1,] 2003 Relating to City of Virginia Beach Development Authority Public Facility Revenue Bonds H&W LLP draft of 8/14/03 TABLE OF CONTENTS Parties ............................................................................................................................................ 1 Recitals .......................................................................................................................................... 1 Granting Clause ............................................................................................................................ 1 ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION Section 101. Definitions ......................................................................................................... 2 Section 102. Rules of Construction ............................................................................................. 5 ARTICLE II EXECUTION, AUTHENTICATION, REGISTRATION AND FORM OF BONDS Section 201. Section 202. Section 203. Section 204. Section 205. Section 206. Section 207. Section 208. Section 209. Form and Details of Bonds ................................................................................... 6 Execution of Bonds ............................................................................................ 6 Authentication of Bonds ...................................................................................... 6 Registration and Transfer of Bonds; Persons Treated as Owners ........................ 7 Exchange of Bonds; Charges for Exchange of Bonds ........................................... 7 Temporary Bonds .................................................................................................. 8 Mutilated, Lost or Destroyed Bonds ....................................................................... 8 Cancellation and Disposition of Bonds ................................................................... 8 Non-Presentment of Bonds ................................................................................... 8 ARTICLE III ISSUANCE OF BONDS Section 301. Section 302. Section 303. Purposes of Bonds ................................................................................................... 9 Panty of Bonds ....................................................................................................... 9 Conditions for Issuing Bonds .................................................................................. 9 ARTICLE IV REDEMPTION OF BONDS Section 401. Section 402. Section 403. Redemption Provisions to be Fixed by Supplemental Agreements of Trust ....... 12 Notice of Redemption ......................................................................................... 12 Bonds Payable on Redemption Date; Interest Ceases to Accrue ........................ 13 Section 501. Section 502 Section 503. Section 504. Section 601. Section 602. Section 603 Section 604. Section 605. Section 701. Section 702. Section 703 Section 704. Section 705. Section 706 Section 707. Section 801. Section 802. Section 803. Section 804. Section 805. Section 806. ARTICLE V PROJECT FUND Creation of Project Fund; Deposit of Bond Proceeds ........................................... 13 Cost of a Project ................................................................................................... 14 Payments from Project Fund ................................................................................ 14 Disposition of Balance in Project Fund ............................................................... 14 ARTICLE VI FUNDS AND ACCOUNTS Creation of Funds and Accounts ........................................................................... 15 Bond Fund ............................................................................................................. 15 Other Funds and Accounts ................................................................................... 16 Pledge of Certain Funds and Accounts ................................................................. 16 Disposition of Balances in Funds after Payment of Bonds .................................. 17 ARTICLE VII SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS Security for Deposits ............................................................................................ 17 Investment of Moneys ........................................................................................... 17 Investment of Surplus Moneys ............................................................................. 18 Valuation of Investments ...................................................................................... 18 Investments Through Tmstee's Bond Department ............................................... 18 Investments by Trustee ......................................................................................... 18 Investments in Bonds by Trustee .......................................................................... 18 ARTICLE VIII PARTICULAR COVENANTS Payment of Bonds; Limited Obligations .............................................................. 19 Authority Covenants, Representations and Warranties ........................................ 19 Notice of Non-Payment; Reserve Deficit; Non-Appropriation ............................ 21 No Obligation to Bondholders for Annual Payment ............................................ 22 Trustee Covenants ................................................................................................. 22 Further Assurances ................................................................................................ 22 ARTICLE IX DEFAULTS AND REMEDIES Section Section Section Section Section Section Section Section Section 901. 902. 903. 904 905. 906. 907. 908. 909. Events of Default ............................................................................................... 22 Remedies; Rights of Bondholders ...................................................................... 23 Right of Bondholders to Direct Proceedings ........................................................ 23 Apphcation of Moneys ....................................................................................... 23 Remedies Vested in Trustee ................................................................................. 24 Limitation on Stats ............................................................................................... 25 Termination of Proceedings ................................................................................. 25 Wmvers of Events of Default ................................................................................ 25 Unconditional Pdght to Receive Pnnc~pal, Premium and Interest ...................... 26 ARTICLE X SUPPLEMENTAL AGREEMENTS OF TRUST; AMENDMENTS TO SUPPORT AGREEMENT Section 1001. Section 1002. Section 1003. Section 1004. Section 1005. Section 1006. Section 1007. Section 1008. Supplemental Agreements Not Reqmring Consent of Bondholders ................... 26 Supplemental Agreements Requinng Consent of Bondholders ...........................27 Amendments to Support Agreement Not Requiring Consent of Bondholders ........................................................................................................ 28 Amendments to Support Agreement Requmng Consent of Bondholders ............ 28 Limitation on Amendments .............................................................................. 29 Amendment by Unammous Consent ................................................................... 29 Op~mon of Counsel Required ............................................................................... 29 Consent of the C~ty ............................................................................................... 29 ARTICLE XI THE TRUSTEE Section 1101. Section 1102. Section 1103. Section 1104. Section 1105. Section 1106. Section 1107. Section 1108. Section 1109. Section 1110. Acceptance of Trusts and Obligations .................................................................. 30 Fees, Charges and Expenses of Trustee ................................................................ 32 Intervention by Trustee ........................................................................................ 32 Merger or Consolidation of Trustee ...................................................................... 32 Resignation by Trustee ......................................................................................... 33 Removal of Trustee .............................................................................................. 33 Appointment of Successor Trustee by Bondholders; Temporary Trustee ............ 33 Concerning any Successor Trustee ....................................................................... 34 Trustee Protected in Relying on Agreements, Etc ............................................... 34 Successor Trustee as Paying Agent, Registrar and Custodian of Funds ...............34 111 ARTICLE XlI DISCHARGE OF AGREEMENT Sectmn 1201. Discharge of Liens and Pledges; Bonds No Longer Deemed to Be Outstanding Hereunder ......................................................................................... 34 ARTICLE XIII MISCELLANEOUS Section 1301. Consents, etc., of Bondholders ............................................................................ 36 Section 1302. Limitation of Rights ............................................................................................. 36 Section 1303. Limitation of Liability of Authority, Etc ............................................................. 36 Section 1304. Severability .......................................................................................................... 36 Section 1305. Notices ............................................................................................................... 37 Section 1306. Successors and Assigns ......................................................................................... 37 Section 1307. Applicable Law ..................................................................................................... 37 Section 1308. Counterparts .......................................................................................................... 37 Signatures .................................................................................................................................... 45 iv THIS AGREEMENT OF TRUST dated as of the [first] day of [September], 2003, by and between the CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY, a politmal subdivision of the Commonwealth of Virg~ma (the "Authority"), and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking assoclat~on, having a corporate trust office m Pdchmond, V~rg~nia, as trustee 0n such capacity, together with any successor in such capacity, here~n called the "Trustee"), prowdes' WHEREAS, the Authonty ~s a political subdlwsion of the Commonwealth of Virginia duly created by Chapter 643 of the V~rginia Acts of Assembly of 1964, as amended (the "Act"); and WHEREAS, the Act authorizes the Authority to acquire, improve, mmntain, equip, own, lease and dispose of"Authority facilities," as defined in the Act, to finance or refinance and lease facilities for use by, among others, a city, to ~ssue its revenue bonds, notes and other obhgations from time to time for such purposes and to pledge all or any part of its assets, whether then owned or thereafter acquired, as security for the payment of the pnnmpal of and interest on any such obligations; and WHEREAS, the City of Virginia Beach, Virgtma (the "City"), desires to undertake a program of financing the acquisition, construction and eqmpping of various pubhc facihties that the City determines to undertake from time to time; and WHEREAS, ~n furtherance of the purposes of the Act, the City has requested the Authority to undertake from time to t~me one or more Projects (as hereinafter defined), and the Authority has determined to issue from time to t~me, its public facility revenue bonds and to use the proceeds thereof to finance costs incurred in connection with the Projects and costs of issuing such bonds; and WHEREAS, simultaneously with entenng into this Agreement, the Authority and the City will enter into a Support Agreement dated as of the date hereof (the "Support Agreement") pursuant to which the Authority has agreed to issue such bonds, and the City has agreed to make annual payments, subject to the annual appropriation by the City Council, of sufficient moneys to pay pnncipal of and premium, if any, and interest on such bonds; and WHEREAS, the parties are entering into this Agreement to set forth (a) the condlt~ons for the issuance of such bonds, Co) the rights of the holders of such bonds and (c) the appointment of a trustee for such holders; and WHEREAS, all acts, conditions and things required by law to happen, exist and be performed precedent to and in connection with the execution of and entenng into this Agreement have happened, exist and have been performed in regular and due t~me and in form and manner as required by law, and the parties hereto are now duly empowered to execute and enter into this Agreement; NOW, THEREFORE, THIS AGREEMENT FURTHER WITNESSETH: That, as security for payment of the principal of and premium, if any, and interest on the Bonds (as hereinafter defined) and for the moneys that may be advanced by the Trustee pursuant hereto, the Authority does hereby pledge and assign to the Trustee without recourse and grant a security interest to the Trustee in, the following described property: A. All right, title and ~nterest of the Authority in and to the Support Agreement (except for the right of the Authority to receive notices under the Support Agreement and the payment of fees and expenses pursuant to Sectmn 4.1(c) thereof), and the Annual Payments (as hereinafter defined) made by the C~ty pursuant thereto, and all other revenues and receipts derived by the Authority from any of the foregoing and the security therefor. B. The funds, including moneys and investments therein, held by the Trustee pursuant to the terms of this Agreement. C. All other property of any kind mortgaged, pledged or hypothecated at any time as and for additional security hereunder by the Authority or by anyone on its behalf or with its written consent in favor of the Trustee, which ~s hereby authorized to receive all such property at any t~me and to hold and apply it subject to the terms hereof. TO HAVE AND TO HOLD all the same with all privileges and appurtenances hereby conveyed and assigned, or agreed or ~ntended to be, to the Trustee and its assigns forever. IN TRUST, however, for the equal and proportionate benefit and security of the holders from time to t~me of the Bonds issued under and secured by th~s Agreement, w~thout privilege, priority or distinction as to the lien or otherwise of any of the Bonds over any of the others except as on the terms and conditions hereinafter stated, except that any Series of Bonds may have other security pledged only to the payment of such Series of Bonds as set forth ~n the Supplemental Agreement of Trust (as hereinafter defined) related to such Series of Bonds. The Authority hereby covenants and agrees with the Trustee and with the respective holders, from time to time, of the Bonds as follows: ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION Section 101. Definitions. The following words as used in this Agreement, the Support Agreement, and the First Supplemental Agreement of Trust shall have the following meanings unless a d~fferent meaning clearly appears from the context: "Act" shall mean Chapter 643 of the V~rginia Acts of Assembly of 1964, as amended. "Account" shall mean any of the various Accounts created w~thin a Fund under this Agreement. "Additional Payments" shall mean such payments made by the C~ty pursuant to Sections 4.1(b) and (c) and 9.4 of the Support Agreement. "Agreement" shall mean tins Agreement of Trust, as supplemented, amended or modified by one or more Supplemental Agreements of Trust. "Annual Payments" shall have the meamng given such term in the Support Agreement, wtuch payment shall be made by the City pursuant to Section 4.1(a) of the Support Agreement. "Authorized Authority Representative" shall mean any officer of the Authority. "Authorized City Representative" shall mean such person or persons as may be designated to act on behalf of the City by a certificate executed by the City Manager and on file with the Trustee. "Bond" or "Bonds" shall mean any bonds, notes or other obligations, including any notes or other obligations issued in anticipation of bonds, notes, or other obligations as the same shall be issued fi.om time to time pursuant to Article III. "Bond Counsel" shall mean an attorney or finn of attorneys nationally recognized on the subject of municipal bonds and reasonably acceptable by the Trustee. "Bond Fund" shall mean the Bond Fund established in Section 601. "Bond Payment Date" shall mean the date on which any payment of principal of (whether at maturity or mandatory sinking fund redemption) or interest on the Bonds is scheduled to become due and payable. "Bondholder" or "holder" shall mean the registered owner of any Bonds. "Business Day" shall mean a day on which banking business is transacted, but not including a Saturday, Sunday or legal holiday, or any day on which banking institutions are authorized by law to close in the city in the Commonwealth of Virginia in which the Trustee has its pnncipal corporate trust office. "City Council" shall mean the Council of the City of Virginia Beach, Virginia, as the governing body of the City. "Code" shall mean the Internal Revenue Code of 1986, as amended, including applicable regulations, rulings and revenue procedures promulgated or applicable thereunder. "Commonwealth" shall mean the Commonwealth of Virginia. "Cost" or "Cost of a Project" shall mean the Cost of a Project as set forth in Section 502. "City" shall mean the City of Virgima Beach, a political subdivision of the Commonwealth of Virginia. "Event of Default" shall mean any of the events enumerated in Section 901. "Fiscal Year" shall mean the twelve-month period beginning on July 1 of one year and ending on June 30 of the following year, or such other fiscal year of twelve months as may be selected by the City. "Fitch" shall mean Fitch Ratings, New York, New York, or its successors. "Fund" shall mean the Bond Fund, Project Fund or any other fund established under this Agreement. "Government Certificates" shall mean certificates representing proportionate ownership of Government Obligations, winch Government Obligations are held by a bank or trust company organized under the laws of the United States of America or any of its states in the capacity of custodian of such certificates. "Government Obligations" shall mean (a) bonds, notes and other direct obligations of the United States of America, (b) securities unconditionally guaranteed as to the timely payment of pnnclpal, if applicable, and interest by the United States of America or (c) bonds, notes and other obligations issued or guaranteed as to the timely payment of principal and interest by the Rural Utilities Service (certificates of beneficial ownership), Federal Housing Administration (debentures), General Services Administration (participation certificates), U.S. Maritime Administration (guaranteed Title XI financing), U.S. Department of Housing and Urban Development (proJect notes and local authority bonds), provided such obligations are backed by the full faith and credit of the United States of America. Stripped securities are permitted only if stripped by the agency itself. Government Obligations may be held directly by the Trustee or in the form of securities of any open-end or closed-end management type investment company or investment trust registered under the Investment Company Act of 1940, provided that the portfolio of such investment company or investment trust is limited to Government Obligations. "Interest Account" shall mean the Interest Account in the Bond Fund established in Section 601. "Moody's" shall mean Moody's Investors Service, New York, New York, or its successors. "Opinion of Counsel" shall mean an opinion of any attorney or firm of attorneys reasonably acceptable to the Trustee, who may be counsel for the Authority, the City or the Trustee but who shall not be a full time employee of the Authority, the City or the Trustee. "Outstanding" shall mean, when used as descriptive of Bonds, that such Bonds have been authorized, issued, authenticated and delivered under this Agreement and have not been canceled or surrendered to the Trustee for cancellation, deemed to have been paid as provided in Article XII, have had other Bonds issued in exchange therefor or had their principal become due and moneys sufficient for their payment deposited with the Trustee as provided in Section 209. In determining whether holders of a requisite aggregate principal amount of the Outstanding Bonds have concurred in any request, demand, authorization, direction, notice, consent or waiver under this Agreement, words refemng to or connoting "pnncipal of" or "principal amount of' Outstanding Bonds shall be deemed also to be references to, to connote and to include the accreted value of Bonds of any Series as of the immediately preceding interest compounding date for such Bonds. Bonds that are owned by the City shall be disregarded and deemed not to be Outstanding for the purpose of any such detenmnatlon. "Principal Account" shall mean the Principal Account in the Bond Fund established in Section 601. "Project" shall mean the Project as that term is defined in the Support Agreement. "Project Fund" shall mean the Project Fund established in Section 501. "Rating Agency" or "Rating Agencies" shall mean Fitch, Moody's or Standard & Poor's, or any of them, and their successors. The Authority may appoint any nationally recognized securities rating organization in addition to or as a replacement for Fitch, Moody's or Standard & Poor's. "Series" or "Series of Bonds" shall mean a separate series of Bonds issued under this Agreement and a Supplemental Agreement of Trust. "Standard & Poor's" shall mean Standard & Poor's Rating Services, a Division of McGraw-Hill Companies, Inc., New York, New York, or its successors. "Supplemental Agreement of Trust" shall mean any Supplemental Agreement of Trust supplementing, amending or modifying the provisions of this Agreement entered into by the Authority and the Trustee pursuant to Article X. "Supplemental Support Agreement" shall mean any Supplemental Support Agreement supplementing, amending or modifying the provisions of the Support Agreement entered into by the Authority and the City pursuant to Article X. "Support Agreement" shall mean the Support Agreement dated as of June 1, 2002, between the Authority and the City, as such Agreement may be supplemented, amended or modified by one or more Supplemental Support Agreements. "Term Bonds" shall mean any Bonds stated to mature on a specified date and required to be redeemed in part prior to maturity according to a sinking fund schedule. "Trustee" shall mean Wachovia Bank, National Association, or its successors serving as such hereunder. "Virginia Code" shall mean the Code of Vlrgtnia of 1950, as amended. Section 102. Rules of Construction. Unless the context clearly ~nd~cates to the contrary, the following rules shall apply to the construction of this Agreement: (a) versa. Words importing the singular number shall ~nclude the plural number and vice (b) Words importing the redemption or calhng for redemption of Bonds shall not be deemed to refer to or connote the payment of Bonds at their stated maturity. (c) Unless otherwise indicated, all references herein to particular Amcles or Sections are references to Articles or Sections of th;s Agreement (d) The headings herein and Table of Contents to this Agreement are solely for convenience of reference and shall not constitute a part of this Agreement nor shall they affect its meaning, construction or effect. (e) All references herein to the payment of Bonds are references to payment of principal of and premium, if any, and interest on Bonds. ARTICLE II EXECUTION, AUTHENTICATION, REGISTRATION AND FORM OF BONDS Section 201. Form and Details of Bonds. Unless otherwise provided in the applicable Supplemental Agreement of Trust, the Bonds shall be designated "Public Facility Revenue Bonds," shall bear an appropriate series designation, shall be issuable only as registered Bonds w~thout coupons, in denominations of $5,000 and multiples thereof, and shall be appropriately numbered. The form, details and terms of each Series of Bonds and such other matters as the Authority may deem appropriate shall be set forth in the applicable Supplemental Agreement of Trust for such Series of Bonds. Pnnc~pal, premium, ~f any, and interest shall be payable in lawful money of the United States of America. Section 202. Execution of Bonds. Unless otherwise provided in the applicable Supplemental Agreement of Trust, the Bonds shall be signed by the manual or facsimile signature of the Chmrman or Vice-Chairman of the Authority and its seal shall be affixed thereto or a facsimile thereof pnnted thereon and attested by the manual or facsimile signature of its Secretary or Assistant Secretary. In case any officer whose signature or a facsimile of whose signature shall appear on any Bond shall cease to be such officer before the dehvery of such Bond, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes the same as ~f he had remmned in office tmtfl such delivery. Any Bond may bear the facsimile signature of or may be signed by such persons as at the actual time of the execution thereof shall be the proper officers to sign such Bond although at the date of such Bond such persons may not have been such officers. Section 203. Authentication of Bonds. Unless otherwise provided in the applicable Supplemental Agreement of Trust, the Bonds shall bear a certificate of authentication and shall not be valid until the Trustee shall have executed the certificate of authentmat~on and inserted the date of authentmat~on thereon. The Trustee shall authenticate each Bond with the signature of an authorized officer or employee, but it shall not be necessary for the same person to authenticate all of the Bonds or all of the Bonds of any Series. Only such authenticated Bonds shall be entitled to any right or benefit under tbas Agreement, and such certificate on any Bond issued hereunder shall be conclusive evidence that the Bond has been duly issued and ~s secured by the provisions hereof. Section 204. Registration and Transfer of Bonds; Persons Treated as Owners. (a) All Bonds issued under tbas Agreement shall be negotiable, subject to the provisions for registration and registration of transfer thereof contained herein or in the Bonds. (b) The Trustee shall maintain registration books w~th respect to each Series of Bonds at the offices of the Trustee and shall provide for the registration and registration of transfer of any Bond of such Series under such reasonable regulations as the Trustee may prescribe. The Trustee shall mmntain books for purposes of exchanging and registering Bonds in accordance with the provisions hereof. (c) Each Bond of a Series shall be registered or registered for transfer only upon the registration books maintained by the Trustee, by the Bondholder thereof in person or by bas attorney or legal representative duly authorized in writing, upon presentation and surrender thereof together with a written ~nstmment of transfer satisfactory to the Trustee duly executed by the registered Bondholder or his duly authonzed attorney or legal representative. Upon surrender for registration of transfer of any such Bond, the Authority shall cause to be executed and the Trustee shall authenticate and deliver, ~n the name of the transferee, one or more new Bonds of the same Series, ~nterest rate, maturity, principal amount and date as the surrendered Bond, as fully registered Bonds only. (d) Unless otherwise provided m the applicable Supplemental Agreement of Trust, the Trustee shall treat the regustered holder as the person exclusively entitled to payment of principal, prem~mn, if any, and ~nterest and the exercise of all other rights and powers of the holder on the registration books, except that interest payments shall be made to the person shown as holder on the registration books on the fifteenth day of the month preceding each ~nterest payment date. Section 205. Exchange of Bonds; Charges for Exchange of Bonds. Bonds, upon presentation and surrender thereof to the Trustee together with written instructions satisfactory to the Trustee, duly executed by the registered Bondholder or his attorney or legal representative duly authorized ~n writing, may be exchanged for an equal aggregate principal amount of fully registered Bonds of the same Series and tenor. Any exchange of Bonds shall be at the expense of the Authority, except that the Trustee may charge the person requesting such exchange the amount of any tax or other governmental charge required to be paid with respect thereto. Section 206. Temporary Bonds. Prior to the preparation of Bonds in definitive form, the Authority may issue temporary Bonds in such denominations as the Authority may determine, but otherwise m substantially the same form set forth in the applicable Supplemental Agreement of Trust, with appropriate variations, omissions and insertions. The Authority shall promptly prepare, execute and dehver to the Trustee before the first interest payment date Bonds in definitive form and thereupon, upon surrender of Bonds in temporary form, the Trustee shall authenticate and deliver in exchange therefor Bonds in definitive form of the same maturity and having an equal aggregate pnnclpal amount. Until exchanged for Bonds ~n definitive form, Bonds in temporary form shall be entitled to the lien and benefit of this Agreement. Section 207. Mutilated, Lost or Destroyed Bonds. If any Bond has been mutilated, lost or destroyed, the Authority shall cause to be executed, and the Trustee shall authenticate and deliver, a new Bond of like date, number and tenor in exchange and substitution for, and upon the cancellation of, such mutilated Bond or in lieu of and xn substitution for such lost or destroyed Bond; provided, however, that the Authority and the Trustee shall so execute, authenticate and deliver only if the holder has prod the reasonable expenses and charges of the Authority and the Trustee in connection therewith and, in the case of a lost or destroyed Bond, (a) has filed with the Authority and the Trustee evidence satisfactory to them that such Bond was lost or destroyed and of bas ownership thereof and (b) has furnished to the Authority and the Trustee indemnity satisfactory to them. If any such Bond has matured, instead of issuing a new Bond the Trustee may pay the same without surrender thereof. Section 208. Cancellation and Disposition of Bonds. All Bonds that have been surrendered for transfer or exchange pursuant to Sections 204 and 205, paid (whether at maturity, by s~nk~ng fund redemption, call for redemption or otherwise), purchased pursuant to Section 602, or delivered by the Authority to the Trustee for cancellation shall not be reissued, and the Trustee shall, unless otherwise directed by the Authority, cremate, shred or otherwise dispose of such Bonds. The Trustee shall deliver to the Authority, upon request, a certificate of any such cremation, shredding or other disposition. Section 209. Non-Presentment of Bonds. (a) If any Bond is not presented for payment when the principal thereof becomes due (whether at maturity, by sinking fund redemption, call for redemption or otherwise), all liability of the Authority to the holder thereof for the payment of such Bond shall be completely discharged if moneys sufficient to pay such Bond and the interest due thereon shall be held by the Trustee for the benefit of such holder, and thereupon it shall be the duty of the Trustee to hold such moneys, subject to subsection (b) below, without hability for interest thereon, for the benefit of such holder, who shall thereafter be restricted exclusively to such moneys for any claim of whatever nature on his part under this Agreement or on, or with respect to, such Bond. (b) Notwithstanding anytbang in this Agreement to the contrary, any cash, Government Obligations or, if permitted by the laws of the Commonwealth, Government Certificates deposited with the Trustee for the payment of the principal of and premium, if any, and ~nterest on any Series of Bonds remmmng unclmmed for more than one year after the pnncipal of all such Series of Bonds has become due and payable shall be paid to the Authority and shall be held by the Authority in a separate account for four years and thereafter ~n the general fund of the Authority. After such moneys have been prod to the Authority, the holders of such Bonds shall be entitled to look only to the Authority, and all liability of the Trustee with respect to such amounts shall cease. ARTICLE III ISSUANCE OF BONDS Section 301. Purposes of Bonds. Bonds may be issued (a) to finance or refinance the Cost of a Project, (b) to refund any Bonds or (c) for a combination of such purposes. Section 302. Parity of Bonds. Each Series of Bonds shall be issued pursuant to a Supplemental Agreement of Trust and shall be equally and ratably secured under this Agreement, without preference, prionty or d~stinction; provided, however, that (i) any Series of Bonds may have other security pledged to its payment, (ii) moneys in any account or subaccount of the Bond Fund relating to a particular Series of Bonds shall secure only such Bonds, and (iii) moneys in any account or subaccount of the Project Fund relating to a particular Series of Bonds shall secure only such Bonds. In connection with the issuance of each Series of Bonds, the Trustee may create additional accounts and subaccounts within any Fund or Account established by this Agreement. Nothing herein shall be construed, however, as (a) requiring that any Bonds bear interest at the same rate or in the same manner as any other Bonds, have the same, or an earher or later, maturity, or be subject to mandatory, optional or extraordinary redemption prior to maturity on the same basis as any other Bonds, (b) prohibiting the Authority from entering ~nto financial arrangements designed to assure that moneys will be available for the payment of certain Bonds at their maturity or (c) prohibiting the Authority from pledging moneys or assets of the Authority other than those pledged herein for the benefit of certain Bonds. Section 303. Conditions for Issuing Bonds. Before the issuance and authentication of any Series of Bonds by the Trustee, there shall be filed with the Trustee the following: (a) In the case of the imtial Series of Bonds ~ssued under this Agreement only: (1) An onginal executed counterpart of this Agreement; (2) A certified copy of a resolution of the Authority's Commissioners authorizing the execution and delivery of th~s Agreement and authorizing the issuance, sale and dehvery of the Bonds; (3) An Opinion or Opinions of Counsel to the Authority, subject to customary exceptions and qualifications, substantially to the effect that this Agreement has been duly authorized, executed and delivered to the Trustee and is binding on the Authonty; and (4) A certified copy of a resolution of the City Council acknowledging and consenting to the execution and delivery of this Agreement. (b) An original executed counterpart of a Supplemental Agreement of Trust whmh (1) shall include: (A) provisions authorizing the ~ssuance, fixing the principal mount and setting forth the details of such Bonds, including their date, the interest rate or rates and the manner in which the Bonds are to bear and pay interest, the principal and interest payment dates of the Bonds, the purposes for wluch such Bonds are being issued, the manner of numbering such Bonds, the Series designation, the denominations, the maturity dates and principal maturities, the principal amounts reqmred to be redeemed pursuant to any mandatory redemption prov~smns or the manner for determining such pnncipal amounts, any provisions for optional or extraordinary redemption before maturity, and whether the interest on such Bonds shall be excluded from gross income for Federal income tax purposes or subject to Federal income taxation; and (B) provisions for the apphcatmn of the proceeds of such Bonds; and (2) may include: (A) provismns for credit facilities and for other funds and accounts to be estabhshed with respect to such Bonds; (B) provisions necessary or expedient for the issuance of Bonds bearing interest at a variable rate or other manner of bearing ~nterest, including remarketing provisions, liquidity facdity provisions and provisions for establishing the variable rate and converting to a fixed rate; (C) provisions for entenng into ~nterest rate swaps, guarantees or other arrangements to limit ~nterest rate risks; and (D) such other provisions as the Authority may deem appropriate. (c) A certified copy of a resolution or resolutions of the Authority's Commissioners authonzing the execution and delivery of a Supplemental Agreement of Trust and the Support Agreement or, in the case of a Series of Bonds other than the initial Series, an amendment to the Support Agreement, the issuance, sale, award, execution and delivery of such Bonds and, in the case of a Series of Bonds issued to refund any Bonds, calling for redemption or payment of the Bonds to be refunded, fixing any redemption date and authorizing any required notice of redemption in accordance with the provisions of this Agreement. (d) A certificate signed by the Chairman or Vice Chairman of the Authority and dated the date of such issuance, to the effect that: (1) Either (A) upon and immediately following such issuance, no Event of Default has occurred which has not been cured or waived, and no event or condition exists which, wxth the giwng of notice or lapse of time or both, would become an Event of Default or (B) if any such event or condxtion is happemng or existing, specifying such event or condition, stating that the Authority will act with due diligence to correct such event or condition after the issuance of such Bonds, and describing in reasonable detail the actions to be taken by the Authority toward such correction; and (2) All required approvals, limitations, conditions and provisions precedent to the issuance of such Series of Bonds have been obtained, observed, met and satisfied. 10 (e) An Opinion or Opinions of Counsel, subject to customary exceptions and qualifications, substantially to the effect that the Supplemental Agreement of Trust for such Series of Bonds and the Support Agreement or, in the case of a Series of Bonds other than the ~nitial Series, an amendment to the Support Agreement, have been duly authorized, executed and dehvered, are binding on the Authority and comply ~n all respects with the reqmrements of this Agreement and the Support Agreement, as applicable (f) An opinion of Bond Counsel, subject to customary exceptions and qualifications, substantially to the effect that the ~ssuance of such Bonds has been duly authorized, that such Bonds are valid and binding hm~ted obligations of the Authority, and that the interest on such Bonds is excludable from gross ~ncome for purposes of Federal income taxation or, if such ~nterest is not excludable, that the issuance and the ~ntended use of the proceeds of such Bonds will have no adverse effect on the tax-exempt status of the interest on any other Bonds then Outstanding the ~nterest on which was excludable from gross income when issued (g) If any Bonds are ~ssued to refund any other Bonds, the following: (1) Irrevocable instructions from the Authority, at the d~rection of the C~ty, to redeem or pay at maturity all Bonds to be refunded; and (2) A written determination by an independent certified public accountant or a consultant engaged in providing financial verification services or other evidence satisfactory to the Trustee that the proceeds (excluding accrued interest) of such refunding Bonds, together with any other moneys deposited with the Trustee for such purpose and the investment income to be earned on moneys held for the payment or redemption of the Bonds to be refunded, will be sufficient (without reinvestment) to pay either (A) the principal of and the premium, if any, on the Bonds to be refunded and the interest which will accrue on such Bonds to the respective redemption or maturity dates or 03) the principal and ~nterest on the refunding Bonds to a date certain, at which time such proceeds, moneys and earnings will be sufficient to pay the pnncipal of and the premium, if any, on the Bonds to be refunded and the interest which will accrue on such Bonds to the respective redemption or maturity dates. (h) A request and authorization signed by the Chairman or V~ce Chmrman of the Authority to the Trustee to authenticate and deliver such Bonds to the purchaser upon payment to the Trustee for the account of the Authority of a specffied sum plus accrued ~nterest to the date of dehvery. (i) (1) In the case of the imtial Series of Bonds, an original executed counterpart of the Support Agreement, assigned by the Authority to the Trustee, or (2) in the case of a Senes of Bonds other than the initial Senes, an onginal executed counterpart of a Supplemental Support Agreement that shall (A) make such necessary modffications to Exhibit A to the Support Agreement to provide for Annual Payments in amounts sufficient to pay pnncipal of and interest on all Bonds then Outstanding plus such additional Series of Bonds, 03) describe the Project being financed by such additional Series of Bonds and (C) make such other modffications as shall be necessary and convenient for the issuance of such additional Series of Bonds. 11 (j) A certified copy of a resolution of the City Council acknowledging and consenting to the execution and delivery of any Supplemental Agreement of Trust entered into in connection with the issuance of any Series of Bonds and authorizing the execution and delivery of the Support Agreement or, in the case of a Series of Bonds other than the ~nltial Senes, a Supplemental Support Agreement, ~n connection with the ~ssuance of such Series of Bonds. (k) An Opinion or Opinions of Counsel, subject to customary exceptions and qualifications, substantially to the effect that the Support Agreement or, in the case of a Series of Bonds other than the initial Series, a Supplemental Support Agreement, has been duly executed and ~s b~nd~ng on the City. Except for the requirements of subsection (d) of th~s Section (which may be waived ~n whole or ~n part by the purchasers of such Bonds by an instrument or concurrent ~nsmmaents ~n writing signed by such purchasers), none of the requirements in this Section may be waived without the consent of the holders of not less than a majority in aggregate principal amount of the Outstanding Bonds. ARTICLE IV REDEMPTION OF BONDS Section 401. Redemption Provisions to be Fixed by Supplemental Agreements of Trust. The Bonds of any Series shall be subject to mandatory, extraordinary or optional redemption prior to maturity on such dates and under such conditions as may be provided in the Supplemental Agreement of Trust authorizing the ~ssuance of such Series of Bonds The Bonds of any Series to be called for redemption shall be selected as provided in the applicable Supplemental Agreement of Trust. The Trustee shall treat each Bond of a denomination greater than the minimum denomination authorized in the applicable Supplemental Agreement of Trust as representing the number of separate Bonds of such minimum denomination as can be obtained by dividing the Bond's actual pnncipal amount by such mimmum denomination. Section 402. Notice of Redemption. Unless otherwise provided ~n the applicable Supplemental Agreement of Trust, the Trustee, upon being satisfied as to the payment of its expenses and upon receiving the not,ce of redemption from the Authority not less than 45 days prior to the redemption date, 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, (a) by facsimile, registered or certified mail or overnight express delivery, to the holder of each Bond to be redeemed at his address as ~t appears on the registration books kept by the Trustee, Co) by facsimile, registered or certified mail or overnight express delivery, to all organizations registered with the Securities and Exchange Commission as securities depositories and (c) to each nationally recognized municipal securities information repository designated as such by the Securities and Exchange Commission. In prepanng and dehvering such notice, the Trustee shall take into account, to the extent apphcable, the prevailing tax-exempt securities industry standards and any regulatory 12 statement of any federal or state administrative body having jurisdiction over the Authority or the tax-exempt secuntaes industry, including Release No. 34-23856 of the Securitaes and Exchange Commassion or any subsequent amending or superseding release. Fmlure to give any notice specified in (a) above, or any defect therein, shall not affect the vahdaty of any proceedangs for the redemption of any Bond with respect to whach no such failure or defect has occurred. Failure to g~ve any notice specified an (b) or (c) above, or any defect therein, shall not affect the vahdity of any proceedings for the redemption of any Bonds with respect to which the notice specified in (a) above is correctly given. Any notice mailed or provaded herean shall conclusively be presumed to have been gaven whether or not actually received by any Bondholder. In the case of an optional redemption under any Supplemental Agreement of Trust, the notace may state that (1) it is conditioned upon the deposit of moneys, in an amount equal to the amount necessary to effect the redemption, with the Trustee no later than the redemption date or (2) the Authority, as directed by the City, retmns the right to rescind such notice on or prior to the scheduled redemption date (in eather case, a "Con&tional Redemptaon"), and such notice and optional redemptaon shall be of no effect af such moneys are not so deposated or af the notice is rescinded as described herein. Any Conditaonal Redemption in (2) above may be rescinded at any tame prior to the redemption date if the Authority dehvers a written direction to the Trustee directing the Trustee to rescind the redemption notace and any funds deposited with the Trustee in connection wath such rescinded redemption shall be returned to the City. The Trustee shall give prompt notace of such rescassion to the affected Bondholders. Any Bonds subject to Conditional Redemption where redemption has been rescinded shall remain Outstanding, and the rescission shall not constatute an Event of Default. Further, an the case of a Conditional Redemptaon, the failure of the Authority to make funds available on or before the redemptaon date shall not constatute an Event of Default, and the Trustee shall give immediate notice to all organizations registered with the Securities and Exchange Commission as securitaes depositories or the affected Bondholders that the redemption did not occur and that the Bonds called for redemption and not so prod remain outstanding. Section 403. Bonds Payable on Redemption Date; Interest Ceases to Accrue. On or before the date fixed for redemption, moneys shall be deposited with the Trustee to pay the principal of and premium, if any, and interest accrued to the redemption date on the Bonds called for redemption. Upon the happening of the conditions of this Section, the Bonds or portaons thereof thus called for redemption shall cease to bear interest from and after the redemption date, shall no longer be entitled to the benefits provaded by this Agreement and shall not be deemed to be Outstanding under the provisions of this Agreement. ARTICLE V PROJECT FUND Section 501. Creation of Project Fund; Deposit of Bond Proceeds. There is hereby established with the City, on behalf of the Authority, the Public Facility Revenue Bond Project Fund. Proceeds of each Series of Bonds shall be deposited an the Project Fund as provided in the Supplemental Agreement of Trust under which each such Series of 13 Bonds is issued. If so directed in a Supplemental Agreement of Trust, there shall be maintmned within the Project Fund special accounts as may be provided in such Supplemental Agreement of Trust. Deposits shall be made to the credit of the ProJect Fund and any special accounts as provided m such Supplemental Agreement of Trust. All earnings on moneys in each Account and subaccount shall be credited to such Account and subaccount. The City shall hold the moneys ~n the Project Fund in trust to be used only to pay the Cost of a Project and as provided ~n Section 504. Section 502. Cost of a Project. The Cost of a ProJect shall include the cost of construction, the cost of acquisition of all lands, structures, rights-of-way, franchises, easements and other property fights and ~nterests, the cost of demolishing, removing or relocating any buildings or structures on lands acquired, including the cost of acqulnng any lands to which such buildings or structures may be moved or relocated, the cost of all labor, materials, machinery and equipment, financing charges and interest on any Series of Bonds prior to and during construction and for up to one year after completion of construction, cost of engineenng, financial and legal services, plans, specifications, studies, surveys, estimates of cost and of revenues, and other expenses necessary or incident to determimng the feas~b~hty or practmabihty of constructing a Project, administrative expenses, promsions for working capital, reserves for interest and for extensions, additions and improvements, such other expenses as may be necessary or incidental to the construction of a Project, the financing of such construction, and the placing of a Project in operation, and all other costs as are penmtted by the Act. Any obligation or expense incurred by the City for studies, surveys, borings, preparation of plans and specifications or other work or materials in connection w~th the construction of a ProJect may be regarded as a part of such Cost and reimbursed to the City out of the proceeds of the Bonds issued to finance a Project. Section 503. Payments from Project Fund. The C~ty shall use moneys in the Project Fund to pay the Cost of a Project. Before any payment shall be made from the Project Fund, the City shall file with the Director of Finance a requisition stating (1) the name of the person, finn or corporation to whom such payment ~s to be made, (2) the amount to be paid, (3) the purpose in reasonable detail for which such payment is to be made and (4) if apphcable, from which Account such payment is to be made. A requisition may represent reimbursement of the Authority or the C~ty for the Cost of a Project initially paid by the Authority or the C~ty or may represent payment to the Authority or the C~ty of moneys to be paid in mm by the Authority or the City to third parties for the Cost of a Project. Section 504. Disposition of Balance in Project Fund. When the Director of Finance shall have received a certificate, signed by an Authorized City Representative, stating either that all ~tems of the Cost of a Project have been paid or what items of the Cost of a Project have not been paid and for the payment of which moneys should be reserved in the Project Fund, the balance of any moneys remaining ~n the Project Fund in excess of the amount to be reserved for payment of unpmd items of the Cost of a Project shall be used to pay (a) principal of and interest on the Series of Bonds that provided such proceeds or to 14 purchase Bonds on the open market to the extent approved by Bond Counsel or (b) all or any portion of the Cost of any other Project designated by the C~ty and approved by Bond Counsel. ARTICLE VI FUNDS AND ACCOUNTS Section 601. Creation of Funds and Accounts. There is hereby estabhshed with the Trustee a Bond Fund, in wbach there are established an Interest Account and a Principal Account, and a separate subaccount ~n each such Account with respect to each Series of Bonds issued hereunder. Section 602. Bond Fund. Installments of all Annual Payments received by the Trustee from the City, together with any other amounts transferred from the Project Fund pursuant to the provisions of the Support Agreement or ti'ns Agreement, shall be deposited in the Bond Fund. The Trustee shall deposit each ~nstallment (a) to the subaccount established for each Series of Bonds in the Interest Account an amount equal to the interest due and payable on the next Bond Payment Date for such Bonds, and (b) to the subaccount established for each Series of Bonds in the Principal Account an amount equal to the principal due and payable on the next Bond Payment Date for such Bonds, whether at maturity or mandatory sinking fund redemption. Unless directed by the terms of a Supplemental Agreement of Trust to do otherwise, the Trustee shall depomt ~n the subaccount established for each Series of Bonds in the Pnnc~pal Account any moneys received by the Trustee from the C~ty to pay any premium due in connection with redeeming such Bonds pursuant to any optional or extraordinary redemption exercised by the Authority, at the direction of the City. The Trustee shall use such moneys to pay the applicable premium due on such Bonds in accordance with the redemption provisions for such Bonds. Notwithstanding anything in this Agreement to the contrary, at any time the Trustee is reqmred to make transfers pursuant to subsections (a) and (b) in the preceding paragraph, and there are insufficient moneys to make all required transfers pursuant to such subsections, the Trustee shall make the transfers ratably from the moneys available. The Trustee shall withdraw from the respective subaccounts within the Interest Account and the Pnnc~pal Account, on each Bond Payment Date, amounts equal to the amounts of interest and principal, if any, due with respect to the Bonds on such Bond Payment Date, and shall cause the same to be applied to the payment of interest and principal, respectively, if any, due on such Bond Payment Date. In the event there are insufficient moneys in the Interest Account or the Principal Account on any Bond Payment Date to pay interest and principal, ~f any, due on such Bond Payment Date, the Trustee shall transfer any excess amounts on deposit in the Interest Account or the Principal Account, as apphcable, to the other Account in which there are ~nsuffic~ent moneys. Any moneys in the Bond Fund transferred from the Project Fund pursuant to Section 504 of tlus Agreement shall be credited against the next Annual Payment reqmred to be paid by the 15 C~ty and shall be used, together w~th other available amounts, to pay ~nterest and principal, ~f any, due on the next Bond Payment Date or Dates. The Trustee shall provide for redemption of any Term Bonds from amounts upon deposit in the Bond Fund in accordance w~th the schedules set forth in the Supplemental Agreement of Trust for such Bonds; provided, however, that on or before the 70th day next preceding any such sinking fund payment date, the Authority may: (x) deliver to the Trustee for cancellation Term Bonds required to be redeemed on such s~nking fund payment date ~n any aggregate principal amount desired; or (y) instruct the Trustee to apply a credit agmnst the Authority's next sinking fund redemption obligation for any such Term Bonds that previously have been redeemed (other than through the operation of the sinkdng fund) and canceled but not theretofore applied as a credit against any sinking fund redemption obligation. Upon the occurrence of any of the events descnbed in subsections (x) or (y) of this Section, the Trustee shall credit agmnst the Authority's sinking fund redemption obligation on the next s~nk~ng fund payment date the amount of such Term Bonds so delivered or previously redeemed. Any pnncipal amount of such Term Bonds in excess of the principal amount required to be redeemed on such sinking fund payment date shall be similarly credited ~n such order as may be determined by the Authority against future payments to the Pnncipal Account and shall s~milarly reduce the principal amount of the Term Bonds of the applicable Series to be redeemed on the next sinking fund payment date. In the event the amount on deposit m the Interest Account on any Bond Payment Date shall exceed the amount required to pay interest on the Bonds on such Bond Payment Date, the Trustee shall retain such excess in the Interest Account or transfer such excess to the Principal Account to be credited against subsequent required deposits thereto. In the event the amount on deposit in the Pnncipal Account on any Bond Payment Date shall exceed the amount reqmred on such date to pay Bonds at maturity or to redeem Term Bonds pursuant to mandatory sinking fund reqmrements, the Trustee shall retain such excess in the Principal Account or transfer such excess to the Interest Account to be credited against subsequent required deposits thereto. Section 603. Other Funds and Accounts. The Authority may establish in each Supplemental Agreement of Trust such other Funds and Accounts within Funds as the Authority may determine to be desirable. Section 604. Pledge of Certain Funds and Accounts. Moneys in the Bond Fund and the Project Fund shall be trust funds and are hereby pledged (except as provided in the next sentence hereof) equally and ratably to the payment of the principal of and interest on all Bonds, subject only to the right of the Authority to make apphcation thereof, or to direct the Trustee to make apphcation thereof, to other purposes as provided herein. The lien and trust hereby created are for the benefit of the Bondholders and for 16 their additional security until all the Bonds have been paid; provided, however, moneys ~n any account or subaccount of the Bond Fund relating to a particular Series of Bonds shall secure only such Bonds; and moneys in any account or subaccount of the ProJect Fund relating to a particular Series of Bonds shall secure only such Bonds. Section 605. Disposition of Balances in Funds after Payment of Bonds. After the pnncipal of and premium, if any, and ~nterest on all of the Bonds, any amounts required to be prod pursuant to the terms of th~s Agreement, any Supplemental Agreement of Trust or the Support Agreement, and all expenses and charges herein required have been prod or provision therefor has been made, the Trustee shall pay to the C~ty any balance remaining ~n any Fund then held by ARTICLE VII SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS Section 701. Security for Deposits. All moneys held in the Funds and Accounts created by this Agreement that are on deposit w~th any bank shall be continuously secured ~n the manner required by the V~rginia Security for Public Deposits Act (Chapter 23, Title 2.1 of the Virgnnia Code) or any successor provision of law. Section 702. Investment of Moneys. Any moneys held ~n the Funds and Accounts shall be invested and reinvested by the Trustee (or the City in the case of the Project Fund), as directed ~n writing by an Authorized City Representative, in Investment Obligations, subject to the limitations stated herein. The term "Investment Obligations" shall mean any of the obhgat~ons or securities that are at the t~me legal investments for public funds under the Investment of Public Funds Act (Chapter 18, Title 2.1 of the Virgima Code) or any successor provisions of law applicable to such investments. Moneys held in the following Funds and Accounts shall be invested in obligations described in this Section of the following maturities: (1) Project Fund - not later than the dates on which such moneys w~ll be needed to pay Costs of a Project as projected in writing by an Authorized C~ty Representative; and (2) Bond Fund - not later than the dates on which such moneys will be needed to pay principal of or interest on the applicable Series of Bonds. For purposes of this Section, ~nvestments shall be considered as maturing on the date on which they are redeemable without penalty at the option of the holder or the date on which the City or the Trustee may require their repurchase pursuant to a repurchase agreement. 17 Whenever a payment or transfer of moneys between Funds or Accounts is permitted or required, such payment or transfer may be made in whole or in part by transfer of one or more ~nvestment obligations at a value determined in accordance with Section 704, provided that the Investment Obligations transferred are permitted investments for the Fund or Account receiving such Investment Obligations. Unless otherwise prowded ~n this Agreement, earnings on Investment Obligations shall accrue to the Fund or Account in wluch such Investment Obligations are on deposit, or, at the written direction of an Authorized City Representative, shall be transferred to and deposited in the ProJect Fund. Section 703. Investment of Surplus Moneys. The C~ty and the Trustee shall provide for the investment of all moneys ~n any Fund or Account held by it not immediately necessary for the purposes of such Fund or Account so that all idle moneys may be invested for the benefit of the Bondholders. Section 704. Valuation of Investments. In computing the amount in any Fund or Account created by this Agreement, obhgations purchased as an investment of moneys therein shall be valued at cost or fmr market value thereof, wluchever is lower, plus accrued interest. Such valuations for each such Fund or Account shall be made by the party holding each such Fund or Account at least annually not later than the end of each Fiscal Year and at such other times as an Authorized City Representative may direct. Section 705. Investments Through Trustee's Bond Department. The Trustee may make investments permitted by Section 702 through its own bond department or the bond department of any affihate. Section 706. Investments by Trustee. The Trustee shall not be liable for any losses, fees, taxes or other charges resulting from investments, reinvestments or liqmdation of ~nvestments made by it pursuant to the provisions of Section 702. Section 707. Investments in Bonds by Trustee. The bank or trust company acting as Trustee and its directors, officers, employees or agents may in good faith buy, sell, own, hold and deal in the Bonds and may jmn in any action which any Bondholder may be entitled to take with like effect as if such bank or trust company were not the Trustee. To the extent permitted by law, such bank or trust company may also receive tenders and purchase ~n good faith Bonds from itself, including any department, affiliate or subsidiary, w~th like effect as if it were not the Trustee. 18 ARTICLE VIII PARTICULAR COVENANTS Section 801. Payment of Bonds; Limited Obligations. The Authority shall promptly pay or cause to be prod when due the principal of (whether at maturity, call for redemption or otherwise) and premium, if any, and interest on the Bonds at the places, on the dates and ~n the manner provided herein and in the Bonds according to the true intent and meaning thereof; provided, however, that such obligations are not general obligations of the Authority but are hmited obligations payable solely from the revenues and receipts derived from the City under the Support Agreement, except to the extent payable from the proceeds of Bonds, the ~ncome, if any, derived from the investment thereof, certain reserves and income from investments pursuant to tins Agreement, revenues and receipts and other amounts derived from any other security pledged pursuant to a Supplemental Agreement of Trust, which revenues and other moneys are hereby specifically pledged to such purposes in the manner and to the extent provided herein. The Bonds, the premium, ff any, and the interest thereon shall not be deemed to create or constitute an indebtedness or a pledge of the froth and credit of the Commonwealth or of any c~ty, town or other pohtical subd~vislon thereof, including the Authority and the City. Section 802. Authority Covenants, Representations and Warranties. (a) The Authority represents and warrants to the Trustee that each representation made by the Authority in Section 2.1 of the Support Agreement is tree and correct as of the date of dehvery of this Agreement. Each such representation and warranty is incorporated herein by reference as if fully set forth herein and shall inure to and be for the benefit of the Trustee. (b) The Authority covenants to faithfully observe and perform all of ~ts covenants, conditions and agreements contained in this Agreement and to promptly pay the principal of and premium, if any, and interest on the Bonds at the places, on the dates, and in the manner specified in this Agreement and the Bonds; provided, however, that such obligations are limited obligations of the Authority, payable solely from the revenues and receipts derived from the City under the Support Agreement, except to the extent payable from the proceeds of Bonds, the income, if any, derived from the investment thereof, certain reserves and ~ncome from investments pursuant to this Agreement, revenues and receipts and other amounts derived from any other security pledged pursuant to a Supplemental Agreement of Trust, which revenues and other moneys are hereby specifically pledged to such purposes in the manner and to the extent provided herein. The Bonds, the premium, if any, and the ~nterest thereon shall not be deemed to constitute a debt or pledge of the full faith and credit of the Commonwealth of Virginia or any political subdivmion thereof, including the Authority and the City. Neither the Commonwealth of Virgima nor any political subdivision, thereof, including the Authority and the City, shall be obligated to pay the principal of or premium, if any, or ~nterest on the Bonds or other costs incident thereto except from the revenues and receipts pledged and assigned therefor, and neither the faith and credit nor the taxing power of the Commonwealth of Virginia or any political subdivision thereof, including the Authority and the C~ty, is pledged to the payment of the pnncipal of or premium, if any, or interest on the Bonds or other costs incident thereto. The Authority has no taxing power. 19 (c) The Authority agrees that all payments under the Support Agreement shall ~nure to the benefit of the Bondholders. The Authority further covenants that it shall not make or consent to any change or modification of the Support Agreement that would reduce the Annual Payments, fees or charges of the C~ty thereunder, extend the time for payment of Annual Payments provided therein, nor permit any change that would reduce the required payments under the Support Agreement to the Authority available for payment of the Bonds, except as herein and ~n the Support Agreement provided. (d) The Authority covenants that it shall not suffer, permit or take any action or fail to take any action that may result ~n the termination or cancellation of the Support Agreement by the City. The Authority also covenants that it shall fulfill its obhgations and shall use ~ts best efforts to assure that the City performs ~ts duties and obhgations under the Support Agreement, and that it shall not agree to any abatement, reduction, abrogation, waiver, diminution or other modification of the obligation of the City to make any Annual Payments and to meet any of its obligations under the Support Agreement, except as prowded in ttus Agreement. The Authority further covenants that ~t shall promptly notify the Trustee of any actual or alleged event of default under the Support Agreement of wluch ~t has not~ce and shall notify the Trustee upon or before the proposed effective date of any proposed termination or cancellation of the Support Agreement. (e) The Authority covenants that the Trustee, subject to the provisions of the Support Agreement and this Agreement reserving certmn rights to the Authority and respecting actions by the Trustee in its name or in the name of the Authority, may enforce for and on behalf of the Bondholders all rights of the Authority and all obligations of the City under and pursuant to the Support Agreement providing for the delivery and receipt of Annual Payments whether or not the Authority ~s in default under tlus Agreement. (f) The Authority covenants to execute, acknowledge and deliver any ~ndentures supplemental hereto and other acts, xnstmments and transfers as the Trustee may reasonably require for the better assuring, transferring, conveying, pledging and assigning to the Trustee of all the rights and funds assigned by th~s Agreement to secure the payment of the principal of and premium, ~f any, and interest on the Bonds. The Authority covenants to fully cooperate with the Trustee and the Bondholders in protecting the rights and security of the Bondholders. (g) The Authority shall not (a) take any action or use the proceeds of any Bonds (including failure to spend the same with due diligence) or take any other action, which would cause any Bonds (the interest on which was excludable from gross income for Federal income tax purposes at the time of their issuance) to be "arbitrage bonds" within the meaning of Section 148 of the Code, or (b) barring unforeseen circumstances, approve the use of the proceeds from the sale of any Bonds (the interest on which was excludable from gross income for Federal income tax purposes at the time of their issuance) otherwise than in accordance w~th the Authority's "non-arbitrage" certificate given immediately prior to the issuance of such Bonds. (h) The Authority covenants not to permit the proceeds of any Bonds (the interest on which was excludable from gross ~ncome for Federal ~ncome tax purposes at the t~me of their issuance) to be used ~n any manner that would result in (a) 10% or more of such proceeds or the facilities financed with such proceeds being used in a trade or business carried on by any person 20 other than a governmental umt, as provided in Section 141(b) of the Code, provided that no more than 5% of such proceeds may be used ~n a trade or bus~ness unrelated or d~sproportionate to the Authonty's use of the Project financed by such Bonds, (b) 5% or more of such proceeds being used w~th respect to any "output facility" (other than a facihty for the fumislung of water), w~th~n the meamng of Section 141 Co)(4) of the Code, 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 umt, as provided in Section 141 (c) of the Code; provided, however, that if the Authority receives an op~mon of Bond Counsel that any such covenants need not be complied with to prevent the ~nterest on such Bonds from being ~ncludable ~n the gross income for Federal ~ncome tax purposes under existing law, the Authority need not comply with such covenants. (i) The Authority shall not use any Project, or any portion thereof, for any use that would adversely affect the exclusion of ~nterest from gross income for Federal ~ncome tax purposes on any Bonds the interest on which was excludable from gross income at the time of their issuance. W~thout hm~ting the generality of the foregoing, the Authority covenants to e~ther (i) take actions to prevent any such use that would cause such Bonds to be "private activity bonds," (ii) redeem any Bond whose tax status would be adversely affected by such use pnor to commencement of the proposed use or (rio take remedial action under the Code which would allow such use to be undertaken without an adverse effect on the tax status of Bonds the ~nterest on which was excludable from gross ~ncome at the time of their issuance. (j) The Authority shall maintain, preserve and keep all ProJects, or cause the ProJects to be maintmned, preserved and kept, in good condition. The Authority shall not abandon any ProJect, shall pay all of the expenses of maintenance of all Projects and any and all taxes, assessments and utility charges payable with respect to any ProJects. (k) As long as any Bonds are Outstanding, the Authority shall continuously mmntain at its sole cost and expense insurance on all Projects covenng pubhc liability, fire and lightning, with broad form extended coverage insurance covering damage by windstorm, explosion, aircraft, smoke, sprinkler leakage, vandalism, malimous mischief and such other risks as are customarily insured against by reasonable and prudent government bodies of like size for such facilities as may be required from t~me to time, in such amounts at a minimum equal to the outstanding amount of Bonds then Outstanding w~th customary deductibles and shall name the Trustee as an additional loss payee on such insurance, as its respective interests appear. Notwithstanding the preceding provisions of this paragraph, the Authority may selfqnsure as to any or all of such coverage and such self-insurance will satisfy the requirements of this paragraph. If the Authority self-insures, the Authority shall cause to be filed annually w~th the Trustee a certificate of its risk manager or insurance consultant as to the adequacy of reserves for such self-insurance. Section 803. Notice of Non-Payment; Reserve Deficit; Non-Appropriation. In the event of (a) a delinquency in the payment of any Annual Payment when due pursuant to the Support Agreement or (b) the receipt of a notme of non-appropnat~on from the City by the date established in the Support Agreement for receipt of such notice, the Trustee shall, within 10 days following the date upon which such delinquent Annual Payment was due, such deficit was determined, or such notice was received, as applicable, immediately g~ve notice 21 thereof to the City. The fadure to gnve such not, ce shall not affect the obligation of the City to pay any such Annual Payment. Section 804. No Obligation to Bondholders for Annual Payment. The Authority shall have no obligation or liabihty to the Trustee or the Bondholders w~th respect to the payment of the Annual Payment by the City when due or with respect to the performance by the C~ty of any other covenant made by it in the Support Agreement. Section 805. Trustee Covenants. The Trustee covenants to deposit, ~nvest and apply mounts received under this Agreement, ~ncludmg the Annual Payment, ~n accordance w~th the provisions hereof. Section 806. Further Assurances. The parties hereto shall make, execute and deliver any and all such further documents, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of ttus Agreement and for the better assuring and confirming unto the Trustee and the Bondholders of their rights and benefits provided in th~s Agreement and the Support Agreement. ARTICLE IX DEFAULTS AND REMEDIES Section 901. Events of Default. Each of the following events shall be an Event of Default: (a) Default in the due and punctual payment of the principal of or premium, if any, on any Bond (whether at maturity, call for redemption or otherwise); Co) Default in the due and punctual payment of the interest on any Bond; (c) An "Event of Default" under the Support Agreement; and (d) Failure of the Authonty to observe and perform any of its other covenants, conditions or agreements under this Agreement or in the Bonds for a period of 30 days after written notice either from the Trustee or holders of not less than 25% in aggregate principal amount of Bonds then Outstanding (unless, if such notme is received from the Trustee, the Trustee should agree in writing to an extension of such time prior to its expiration), specifying such failure and requesting that it be remedied, or in the case of any such default that cannot with due dd~gence be cured within such 30-day period, fmlure of the Authority to proceed promptly to cure the same and thereafter prosecute the curing of such default with due dihgence. 22 Section 902. Remedies; Rights of Bondholders. Upon the occurrence and continuation of an Event of Default, the Trustee may (and if requested by the holders of not less than 25% in aggregate principal amount of Bonds then Outstanding and if indemmfied to its satisfaction in accordance with prevailing industry standards shall) proceed to protect and enforce the Bondholders' rights by mandamus or other suit, action or proceeding at law or in equity, including an action for specffic performance of any covenant or agreement herein contmned; provided, however, that the Trustee shall have no right or authority to declare the entire unpmd principal of Bonds then due and payable. No remedy conferred by this Agreement upon or reserved to the Trustee or Bondholders is intended to be exclusive of any other remedy, but each such remedy shall be cumulative and shall be in addition to any other remedy given to the Trustee or Bondholders hereunder or now or hereafter existing at law, in equity or by statute. No delay or omission to exercise any right or power accruing upon any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or Event of Default or acquiescence therein, and every such right and power may be exercised from time to time and as often as may be deemed expedient. No waiver of any default or Event of Default hereunder by the Trustee or Bondholders shall extend to or shall affect any subsequent default or Event of Default or shall impair any rights or remedies consequent thereon. Section 903. Right of Bondholders to Direct Proceedings. Anything in this Agreement to the contrary notwithstanding, the holders of a majority in aggregate principal amount of Bonds then Outstanding shall have the right, at any time, by an ~nstmment or instruments in writing executed and delivered to the Trustee, to direct the method and place of conducting all proceedings to be taken in connection with the enforcement of the terms and conditions of this Agreement or any other proceedings hereunder; provided, however, that such direction shall not be otherwise than in accordance with the provisions of law and of this Agreement. Section 904. Application of Moneys. All moneys received by the Trustee pursuant to any right given or action taken under the provisions of this Article shall, after payment of the cost and expenses of the proceedings resulting in the collection of such moneys, the expenses, liabilities and advances incurred or made by the Trustee and its fees and the expenses of the Authority in carrying out this Agreement, be deposited in the Bond Fund and applied as follows and for no other purpose' (a) applied: Unless the prinmpal of all the Bonds shall have become due, all moneys shall be First - To the payment to the persons entitled thereto of all installments of interest then due on the Bonds, in the order of the maturity of the installments of such interest and, ~f the amount available shall not be sufficient to pay in full any particular installment, then 23 to the payment ratably, according to the amounts due on such installment, to the persons entitled thereto, without any discrimination or preference except as to any difference in the respective rates of interest specified ~n the Bonds; and Second - To the payment to the persons entitled thereto of the unpaid principal of and premium, if any, on any of the Bonds which shall have become due (other than Bonds called for redemption for the payment of which moneys are held pursuant to the prowsions of thts Agreement), ~n the order of their due dates, with interest on such Bonds at the respective rates specified therein fi.om the respective dates upon which they become due and, if the amount available shall not be sufficient to pay in full Bonds due on any particular date, together with such interest, then first to the payment of such ~nterest, ratably, according to the amount of such interest due on such date, and then to the payment of such principal and premium, if any, ratably, according to the amount of such principal due on such date, to the persons entitled thereto, w~thout any discrimination or preference except as to any difference ~n the respective rates of ~nterest specffied in the Bonds. (b) If the principal of all the Bonds shall have become due, all such moneys shall be applied to the payment of the pnncipal and ~nterest then due and unpaid on the Bonds, ~ncluding, to the extent permitted by law, interest on overdue installments of ~nterest, without preference or priority of pnncipal over interest or of ~nterest over principal, or of any installment of ~nterest over any other installment of interest, or of any bond over any other bond, ratably, according to the mounts due respectively for principal and interest, to the persons entitled thereto, w~thout any discrimination or preference except as to any difference in the respective rates of ~nterest specified in the Bonds. Whenever moneys are to be apphed pursuant to the provisions of this Section, such moneys shall be apphed at such ttmes and from time to t~me as the Trustee shall determine, having due regard to the amount of such moneys avmlable for application and the likehhood of additional moneys becoming avmlable for such apphcation in the future. Whenever the Trustee shall apply such moneys, it shall fix the date (whmh shall be a Bond Payment Date unless it shall deem another date more statable) on which such application is to be made and on such date interest on the amounts of pnncipal to be paid on such dates shall cease to accrue. The Trustee shall give such notice as ~t may deem appropriate of the deposit w~th it of any such moneys and of the fixing of any such date. Whenever the principal of and premium, if any, and interest on all Bonds have been prod under the prowsions of th~s Section, all payments required by the terms of any Supplemental Agreement of Trust have been paid and all expenses and charges of the Trustee have been paid, any balance remaining in the several Funds created by this Agreement shall be prod to the City as provided in Section 605. Section 905. Remedies Vested in Trustee. All rights of action (including the right to file proof of claims) under this Agreement or under any of the Bonds may be enforced by the Trustee without the possession of any of the Bonds or the production thereof in any trial or other proceeding relating thereto and any such suit 24 or proceeding instituted by the Trustee may be brought in its name as Trustee without the necessity of jo~nmg as plmntiffs or defendants any Bondholder, and any recovery of judgrnent shall be for the equal benefit of the holders of all Bonds then Outstanding. Section 906. Limitation on Suits. Except to enforce the nghts given under Section 902, no Bondholder shall have any nght to institute any action, suit or proceeding at law or in equity for the enforcement of ttus Agreement or for the execution of any trust thereof or any other remedy hereunder, unless (a) a default has occurred and is continuing of which the Trustee has been notffied as provided in Section 1101(h), or of which by such Section it is deemed to have notice, (b) such default has become an Event of Default and the holders of 25% in aggregate principal amount of Bonds then Outstanding have made written request to the Trustee and offered it reasonable opportunity either to proceed to exermse the powers hereinbefore granted or to institute such action, suit or proceeding ~n its own name, (c) such requesting Bondholders have offered to the Trustee indemmty as provided in Section 1101(k), (d) the Trustee has thereafter failed or refused to exercise the powers hereinbefore granted, or to ~nst~tute such action, suit or proceeding in its, his or their own name or names, (e) no direction inconsistent with such written request has been given to the Trustee by the holders of a majority in aggregate pnncipal amount of Bonds then Outstanding and (f) notice of such action, stat or proceeding is given to the Trustee; it being understood and ~ntended that no one or more holders of the Bonds shall have any right ~n any manner whatsoever to affect, disturb or prejudice th~s Agreement by its or their action or to enforce any rights hereunder except in the manner here~n provided, and that all proceedings at law or in eqmty shall be instituted and maintmned in the manner herein prowded and for the equal benefit of the holders of all Bonds then Outstanding. The notfficat~on, request and offer of ~ndemmty set forth above, at the option of the Trustee, shall be conditions precedent to the execution of the powers and trusts of this Agreement and to any action or cause of action for the enforcement of this Agreement or for any other remedy hereunder. Section 907. Termination of Proceedings. In case the Trustee shall have proceeded to enforce any right under ttus Agreement and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee, then and ~n every such case the Authority, the City and the Trustee shall be restored to their former positions and rights hereunder, and all rights, remedies and powers of the Trustee shall continue as if no such proceedings had been taken. Section 908. Waivers of Events of Default. The Trustee may in its discretion waive any Event of Default hereunder or any action taken pursuant to any Event of Default, and shall do so on the request of the holders of (a) a majority in aggregate principal amount of Bonds then Outstanding ~n respect of which default ~n the payment of principal and/or premium, ~f any, and/or interest exists or (b) a majority in aggregate principal amount of Bonds then Outstan&ng in the case of any other default; provided, however, that there shall not be waived w~thout the consent of the holders of all Bonds then Outstanding (A) any Event of Default ~n the payment of the pnncipal of any Outstanding Bonds 25 (whether at maturity or by sinking fund redemption) or (B) any default ~n the payment when due of the interest on any such Bonds unless, prior to such waiver or rescission, (1) there shall have been paid or provided for all arrears of interest with interest, to the extent permitted by law, at the rate borne by the Bonds on overdue installments of interest, all arrears of pnncipal and premium, if any, and all expenses of the Trustee in connectmn w~th such default and (2) ~n case of any such waiver or rescission or in the case of any discontinuance, abandonment or adverse determination of any proceeding taken by the Trustee on account of any such default, the City, the Trustee and the Bondholders shall be restored to their former positions and rights hereunder respectively; and No such waiver or rescission shall extend to any subsequent or other default or impmr any right consequent thereon. r Section 909. Unconditional Right to Receive Principal, Premium and Interest. Nothing in this Agreement shall, however, affect or impair the right of the Trustee or any Bondholder to enforce, by action at law, payment of the principal of or premium, if any, or ~nterest on any Bond at and after the maturity thereof, or on the date fixed for redemption, or the obhgation of the Authority to pay the principal of and premium, if any, and interest on each of the Bonds issued hereunder to the respective holders thereof at the time and place, from the source and in the manner here~n and in the Bonds expressed. ARTICLE X SUPPLEMENTAL AGREEMENTS OF TRUST; AMENDMENTS TO SUPPORT AGREEMENT Section 1001. Supplemental Agreements Not Requiring Consent of Bondholders. The Authority and the Trustee may, without the consent of, or notme to, any of the Bondholders, enter into Supplemental Agreements of Trust as shall not be inconsistent w~th the ~ntent of the terms and provisions hereof for any one or more of the following purposes: (a) To cure any ambigmty, formal defect or omission in this Agreement or a Supplemental Agreement of Trust; (b) To grant to or confer upon the Bondholders any additional rights, remedies, powers or authority that may lawfully be granted to or conferred on the Bondholders; (c) To modify, amend or supplement this Agreement in such manner as required to permit the qualification hereof and thereof under the Trust Indenture Act of 1939, as amended, or any similar Federal statute hereafter in effect or any state securities (Blue Sky) law, and, if they so determine, to add to this Agreement such other terms, conditions and provisions as may be required by smd Trust Indenture Act of 1939, as amended, or s~milar Federal statute or state securities law; 26 (d) To add to the covenants and agreements of the Authority in this Agreement other covenants and agreements to be observed by the Authonty; (e) To modify, amend or supplement this Agreement ~n such manner as required to permit the Authority to comply with the provisions of the Code relating to the rebate to the Umted States of Amenca of earnings derived from the investment of the proceeds of Bonds, provided that such modfficatlon, amendment or supplement does not materially adversely affect the holders of all Bonds then Outstanding; (f) To modify, amend or supplement this Agreement in such manner as may be required by a Rating Agency to mmntain ~ts rating on the Bonds, provided that such modification, amendment or supplement does not matenally adversely affect the holders of all Bonds then Outstanding; (g) To authonze the issuance of and to secure one or more Series of Bonds pursuant to Article III; and (h) To modify, amend or supplement this Agreement in any manner that the Trustee concludes is not materially adverse to the holders of all Bonds then Outstanding. Section 1002. Supplemental Agreements Requiring Consent of Bondholders. Exclusive of Supplemental Agreements of Trust authorized by Section 1001 and subject to the terms and provisions contmned in tlus Section, the holders of not less than a majority in aggregate principal amount of Bonds then Outstanding shall have the right from time to time, notwithstanding anytlung ~n th~s Agreement to the contrary, to consent to the execution by the Authority and the Trustee of such other agreements or agreements supplemental hereto as shall be deemed necessary or desirable by the Authority for the purpose of modifying, altering, amending, adding to or rescinding, ~n any particular, any of the terms or provisions contained in th~s Agreement and any Supplemental Agreements of Trust; provided, however, that if, m the opimon of the Trustee, any agreement supplemental hereto, modifying, altenng, amending, adding to or rescinding any of the terms or prowsions shall affect only one Series of Bonds, then only the consent and approval of a majority in aggregate principal amount of Bonds then outstanding of such particular series shall be required for such supplemental agreement, provided, further, that nothing in th~s Agreement shall permit, or be construed as permitting, (a) an extension of the maturity of the principal of or the ~nterest on any Bond, (b) a privilege or priority of any Bond or Bonds over any other Bond or Bonds, (c) a reduction in the aggregate pnncipal amount of Bonds required for consent to such Supplemental Agreements of Trust, (d) a reduction ~n the principal amount of or premium, ~f any, on any Bond or the rate of ~nterest thereon or (e) an extension of time or a reduction in amount of any payment required by any sinking fund that may be applicable to any Bond, without the consent of the holders of all Bonds then Outstanding. If at any time the Authority shall request the Trustee to enter into any such Supplemental Agreement of Trust, the Trustee shall cause notice of the proposed execution of such Supplemental Agreement of Trust to be sent by regnstered or certified mail to the registered holder of each Bond at his address as it appears on the registration books. Such notme shall be 27 prepared by the Authority and shall briefly set forth the nature of the proposed Supplemental Agreement of Trust and shall state that a copy thereof is on file at the designated corporate trust office of the Trustee for inspection by all Bondholders. If, within 90 days or such longer period as shall be prescribed by the Authority following the g~v~ng of such notice, the holders of not less than a majority in aggregate pnnmpal mount of all Bonds then Outstanding, or ~n the case of (a) through (e) above, the holders of all Bonds then Outstanding, shall have consented to and approved the execution thereof as herein provided, no holder of any Bond shall have any right to object to any of the terms and provisions contained therein, or the operation hereof, or ~n any manner to question the propriety thereof, or to enjoin or restrmn the Trustee or the Authority from executing such Supplemental Agreement of Trust or from taking any action pursuant to the provisions thereof. Upon the execution of any such Supplemental Agreement of Trust as ~n th~s Section permitted and provided, this Agreement shall be and be deemed to be modified and amended in accordance therewith. Section 1003. Amendments to Support Agreement Not Requiring Consent of Bondholders. The Authonty and the Trustee shall, without the consent of or not, ce to the Bondholders, consent to any amendment, change or modffication of the Support Agreement as may be required: (a) By the prowsions of the Support Agreement or this Agreement; (b) For the purpose of curing any ambigmty or formal defect or omission therein; (c) To subject to tlus Agreement additional revenues, properties or collateral; (d) In connection w~th the issuance of one or more Series of Bonds pursuant to Article III other than the ~nitial Series an original executed counterpart of a Supplemental Support Agreement that shall (1) make such necessary modifications to Exhibit A to the Support Agreement to provide for Annual Payments ~n amounts sufficient to pay pnncipal of and ~nterest on all Bonds then Outstanding plus such additional Series of Bonds, (2) describe the Project being financed by such additional Series of Bonds and (3) make such other modifications as shall be necessary and convement for the issuance of such additional Series of Bonds; and (e) In connection with any other amendment, change or modification that the Trustee concludes is not materially adverse to the holders of all Bonds then Outstanding, the Authonty and the Trustee shall, without the consent of or notme to the Bondholders, consent to any such amendment, change or modification made in connectmn with any modificatton or amendment of, or supplement to, tlus Agreement pursuant to Section 1001 (c). Section 1004. Amendments to Support Agreement Requiring Consent of Bondholders. Except for amendments, changes or modfficat~ons as provided ~n Section 1003, neither the Authority nor the Trustee shall consent to any amendment, change or modification of the Support Agreement without the written approval or consent of the holders of a majority in aggregate prinmpal amount of Bonds then Outstanding given and procured as prowded ~n 28 Section 1002. If at any t~me the Authority and the City shall request the consent of the Trustee to any such proposed amendment, change or modification, the Trustee shall, upon being satisfactorily indemnified w~th respect to expenses, cause notice of such proposed amendment, change or modification to be given ~n the same manner as provided by Section 1002 with respect to Supplemental Agreements of Trust. Such notice shall be prepared by the Authority or the City and shall briefly set forth the nature of such proposed amendment, change or modification and shall state that a copy of the instnnuent embodying the same is on file at the designated corporate trust office of the Trustee for ~nspection by all Bondholders. Section 1005. Limitation on Amendments. No amendment, change or modification may decrease the obhgation of the City under the Support Agreement to pay amounts sufficient to pay pnnclpal of and premium, if any, and interest on the Bonds as the same become due. Section 1006. Amendment by Unanimous Consent. Notwithstanding any other provision of this Agreement, the Authority and the Trustee may enter into any Supplemental Agreement of Trust and may consent to a Supplemental Support Agreement upon receipt of the consent of the holders of all Bonds then Outstanding. Section 1007. Opinion of Counsel Required. The Trustee shall not enter ~nto a Supplemental Agreement of Trust or consent to a Supplemental Support Agreement unless there shall have been filed with the Trustee and the Authority an Opinion of Counsel that such Supplemental Agreement of Trust or such Supplemental Support Agreement is authorized or permitted by this Agreement and complies with its terms and that on execution ~t will be valid and binding on the party or parties executing it in accordance with its terms, which Opinion of Counsel, to the extent appropriate, may rely on the Trustee's determination that such amendment, change or modification ~s described in Section 1001(h) or 1003(e), as if applicable, and an opinion of Bond Counsel stating that such Supplemental Agreement of Trust or Supplemental Support Agreement will not have an adverse affect on the exemption of ~nterest from gross income for Federal income tax purposes on the Bonds, the interest on which was exempt from gross income on the date of their issuance. Section 1008. Consent of the City. Notwithstanding any other provision of this Agreement of Trust, a Supplemental Agreement of Trust or a Supplemental Support Agreement that affects any rights of, or imposes any costs on, the City shall not become effective until the City shall have consented to the execution and delivery of such Supplemental Agreement of Trust or such Supplemental Support Agreement. 29 ARTICLE XI THE TRUSTEE Section 1101. Acceptance of Trusts and Obligations. The Trustee hereby accepts the trusts and obligations imposed upon it by tins Agreement and agrees to perform such trusts and obligations, but only upon and subject to the following express terms and conditions and no implied covenants or obligations shall be read into this Agreement against the Trustee: (a) The Trustee, prior to the occurrence of an Event of Default and after the cunng of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Agreement and as a corporate trustee ordinarily would perform such duties under a corporate indenture. Upon the occurrence and continuation of an Event of Default (which has not been cured or waived), the Trustee shall exercise such of the rights and powers vested in it by this Agreement and use the same degree of care and skill in their exercise as a prudent man ordinarily would exercise and use under the circumstances in the conduct of his own affairs. (b) The Trustee may execute any of the trusts or powers hereof and perform any of its duties by or through attorneys, agents, receivers or employees but shall be answerable for the conduct of the same in accordance with the standard specified above, and shall be entitled to act upon the opinion or advice of its counsel concerning all matters of trust hereof and the duties hereunder, and may in all cases pay reasonable compensation to all such attorneys, agents, receivers and employees as may reasonably be employed in connection with the trust hereof. The Trustee may act on an Opinion of Counsel and shall not be responsible for any loss or damage resulting from any action or nonaction by it taken or omitted to be taken in good faith and in reliance on such Opinion of Counsel. (c) The Trustee shall not be responsible for any recital herein or in the Bonds (except in respect to the certificate of the Trustee endorsed on the Bonds) or for the recording, re- recording, filing or re-filing of any financing or continuation statement or any other document or instnament, or for the vahdity of the execution by the Authority of this Agreement or for any supplements thereto or instruments of further assurance, or for the sufficiency of the security for the Bonds issued hereunder or intended to be secured hereby, and the Trustee shall not be bound to ascertain or inquire as to the observance or performance of any covenants, conditions or agreements on the part of the Authority or the City under the Support Agreement except as hereinafter set forth. The Trustee shall not be responsible or hable for any loss, fee, tax or other charge suffered or ~ncurred in connection with any investment of moneys made by it in accordance with Section 702. (d) The Trustee shall not be accountable for the use of any Bonds authenticated or delivered hereunder. The bank or trust company acting as Trustee and its directors, officers, employees or agents may in good faith buy, sell, own, hold and deal in the Bonds and may join in any action which any bondholder may be entitled to take with hke effect as if such bank or trust company were not the Trustee. To the extent permitted by law, such bank or trust company 30 may also receive tenders and purchase in good froth Bonds from ~tself, including any department, affiliate or subsidiary, with hke effect as if it were not the Trustee. (e) The Trustee shall be protected in acting on any not~ce, request, consent, certfficate, order, affidavit, letter, telegram or other paper or document reasonably believed by it to be genuine and correct and to have been s~gned or sent by the proper person or persons. Any action taken by the Trustee pursuant to this Agreement on the request or authority or consent of any person who at the time of making such request or giving such authority or consent is the holders of any Bond shall be conclusive and b~nding upon all future holders of the same Bond and upon Bonds issued in exchange therefor or ~n place thereof. (f) As to the existence or non-existence of any fact or as to the sufficiency or validity of any instrument, paper or proceeding, the Trustee shall be entitled to rely on a certificate signed (1) on behalf of the Authority by its Chmrman or Vice-Chairman and attested by its Secretary under its seal, or such other person or persons as may be designated for such purposes by resolution of the Authority, or (2) on behalf of the City, by its City Manager or by such person or persons as may be designated for such purposes by the City Manager or the C~ty Council, as sufficient evidence of the facts therein contmned, and pnor to the occurrence of a default of which the Trustee has been notified as provided ~n subsection (h) of this Section, or of which by smd subsection ~t is deemed to have notice, may also accept a s~milar certfficate to the effect that any particular deahng, transaction or action is necessary or expedient, but may at its d~scretlon secure such further evidence deemed necessary or advisable, but shall in no case be bound to secure the same The Trustee may accept a certificate of the City Clerk or of the Secretary of the Authority under ~ts seal to the effect that a resolution in the form there~n set forth has been adopted by the City Council or the Authority, as the case may be, as conclusive evidence that such resolution has been duly adopted and is ~n full force and effect. (g) The penmssive right of the Trustee to do things enumerated in this Agreement shall not be construed as a duty, and the Trustee shall not be answerable for other than its neghgence or willful default. (h) The Trustee shall not be required to take notice or be deemed to have notice of any default hereunder or under the Support Agreement, except failure by the Authority or the City to cause to be made any of the payments to the Trustee required to be made by Article VI or failure by the City to cause any payments to be made to the Trustee or failure by the Authority or the City to file w~th the Trustee any document required by this Agreement to be so filed, unless the Trustee shall be notified of such default by the Authority or the City or by the holders of not less than 25% in aggregate pnnclpal amount of Bonds then Outstanding. (i) The Trustee shall not be required to give any bond or surety w~th respect to the execution of its rights and obligations hereunder. (j) Notwithstanding any other provision of this Agreement, the Trustee shall have the right, but shall not be required, to demand, as a condition of any action by the Trustee in respect of the authentication of any Bonds, the w~thdrawal of any cash, the release of any property, or any action whatsoever within the purview of this Agreement, any showings, certificates, 31 opinions, appraisals or other ~nfonnation, or corporate action or evidence thereofi in addition to that required by the terms hereof. (k) Before taking any action under tins Agreement the Trustee may reqmre that indemmty satisfactory to it be furmshed to it for the reimbursement of all expenses to which ~t may be put and to protect ~t against all liabihty by reason of any action so taken, except liabihty winch ~s adjudicated to have resulted from its neghgence or willful default. (1) All moneys received by the Trustee shall, untd used or applied or invested as hereto provided, be held in trust ~n the manner and for the purposes for which they were received but need not be segregated from other moneys except to the extent reqmred by this Agreement or law. The Trustee shall not be under any liability for ~nterest on any moneys received hereunder except such as may be agreed upon. Section 1102. Fees, Charges and Expenses of Trustee. Absent a specific agreement as to the payment of the Trustee's fees, charges and expenses, the Trustee shall be entitled to payment of and rexmbursement by the City, as prowded in the Support Agreement for reasonable fees for its servmes and all expenses reasonably incurred by it hereunder, including the reasonable fees and disbursements of its counsel; provided that the trust estate shall not be hable for costs or expenses of the Trustee other than reasonable costs and expenses and shall not be liable for "overhead expenses" except as such expenses may be included as a component of the Trustee's stated annual fees. Upon an Event of Default, but only upon an Event of Default, the Bond Trustee shall have a first hen with right of payment pnor to payment on account of principal of, or premium, if any, and interest on any Bond upon the trust estate created by this Agreement for the foregoing fees, charges and expenses incurred by the Trustee. Section 1103. Intervention by Trustee. In any judicial proceeding to which the C~ty is a party and winch ~n the opinion of the Trustee has a substantial beanng on the interests of the Bondholders, the Trustee may intervene on behalf of Bondholders and, subject to Section 1101(k), shall do so if requested by the holders of not less than 25% ~n aggregate pnncipal amount of Bonds then Outstanding. Section 1104. Merger or Consolidation of Trustee. Any corporataon or association into which the Trustee may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer its corporate trust business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to winch it ~s a party shall be and become successor Trustee hereunder and vested with all the trusts, powers, discretion, immumtles, privileges and all other matters as was its predecessor, w~thout the execution or filing of any instrument or any further act, deed or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding. 32 Section 1105. Resignation by Trustee. The Trustee may at any time resign from the trusts hereby created by giving not less than 30 days' notme to the Authority, the City, and each holder of Bonds then Outstanding. Such resignation shall take effect upon the appointment of a successor or temporary Trustee by the Bondholders, the City or a court of competent jurisdiction Section 1106. Removal of Trustee. The Trustee may be removed at any time (a) by an insmmaent or concurrent ~nstmments in writing delivered to the Trustee and the Authority and s~gned by the holders of a majority in aggregate pnncipal amount of Bonds then Outstanding or (b) by the City by notice in writing given by an Authorized City Representative to the Trustee not less than 60 days before the removal date; provided, however, that the City shall have no right to remove the Trustee during any time when an Event of Default has occurred or is cont~nmng or when an event has occurred and is continmng or condition exists that with the giving of notice or the passage of time, or both, would be an Event of Default. The removed Trustee shall return to the City the amount of the Trustee's annual fee allocable to the portion of the current year remaining after the removal date. Notwithstanding the foregoing, nothing contained in this Agreement shall relieve the Authority of its obligation to pay the Trustee's fees and expenses incurred to the date of such removal. Such removal shall take effect upon the appointment of a successor Trustee or the earlier appointment of a temporary Trustee by the Bondholders, the City or a court of competent jurisdiction. Section ll07. Appointment of Successor Trustee by Bondholders; Temporary Trustee. In case the Trustee hereunder shall resign, be removed, be dissolved, be in course of dissolution or liquidation or otherwise become incapable of acting hereunder, or in case it shall be taken under the control of any public officer or officers or of a receiver appointed by a court, a successor may be appointed by the holders of a majority in aggregate principal amount of Bonds then Outstanding, by an instrument or concurrent instruments in writing signed by such holders; provided, however, that in case of such vacancy the City, by an instrument signed by an Authorized City Representative, may appoint a temporary Trustee to fill such vacancy until a successor Trustee shall be appointed by the Bondholders ~n the manner prowded above; and any such temporary Trustee so appointed by the C~ty shall ~mmediately and without further act be superseded by the Trustee so appoxnted by such Bondholders. Every such Trustee appointed pursuant to this section shall be, if there be such an institution willing, qualified and able to accept the trust upon reasonable or customary terms, (a) a bank or trust company within or without the Commonwealth of Virginia, ~n good standing and having a combined capital, surplus and undivaded profits of not less than $50,000,000 or (b) a subsidiary trust company under the Trust Subsidiary Act, Article 3.1, Chapter 2, Title 6.1, of the Virginia Code, or any successor provision of law, whose parent Virgima bank or bank holding company has undertaken to be responsible for the acts of such subsidiary trust company pursuant to the provisions of Sectmn 6 1-32.7(a) of the Trust Subsidiary Act, or any successor provision of law, and whose combined capital, surplus and undivided profits, together with that of Its parent Virginia bank or bank holding company, as the case may be, is not less than $50,000,000. 33 Section 1108. Concerning any Successor Trustee. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to its predecessor and also to the Authonty an instnmaent in writing accepting such appointment hereunder, and thereupon such successor, without any further act, deed of conveyance, shall become fully vested with all the properties, rights, powers, trusts, duties and obhgations of its predecessor, but such predecessor shall, nevertheless, on the request of the Authority and upon payment of amounts due it hereunder, execute and deliver an instrument transferring to such successor Trustee all the properties, rights, powers and trusts of such predecessor hereunder; and every predecessor Trustee shall deliver all securities and moneys held by it as Trustee hereunder to ~ts successor. Should any instrument ~n writing from the Authority be reqmred by any successor Trustee for more fully and certainly vesting ~n such successor the properties, rights, powers and duties hereby vested or intended to be vested in the predecessor, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the Authority. Section 1109. Trustee Protected in Relying on Agreements, Etc. The resolutions, opinions, certificates and other instruments provided for ~n this Agreement may be accepted by the Trustee as conclusive evidence of the facts and conclusions stated therein and shall be full warrant, protection and authority to the Trustee for the release of property and the withdrawal of cash hereunder or the taking of any other action by the Trustee as provided hereunder. Section 1110. Successor Trustee as Paying Agent, Registrar and Custodian of Funds. In the event of a change in the office of Trustee, the predecessor Trustee which has resigned or been removed shall cease to be paying agent and registrar for the Bonds and custodian of the funds created hereunder, and the successor Trustee shall become such paying agent and custodian ARTICLE XII DISCHARGE OF AGREEMENT Section 1201. Discharge of Liens and Pledges; Bonds No Longer Deemed to Be Outstanding Hereunder. The obhgations of the Authority under this Agreement and the liens, pledges, charges, trusts, covenants and agreements of the Authority here~n made or provided for, shall be fully d~scharged and satisfied as to any Bond and such Bond shall no longer be deemed to be Outstanding hereunder: (a) when such Bond shall have been cancelled, or shall have been surrendered for cancellation and is subject to cancellation; or shall have been purchased by the Authority from moneys in the Bond Fund; 34 (b) as to any Bond not cancelled or so purchased or so surrendered for cancellation and subject to cancellation, when (1) payment of the pnncipal and the apphcable premium of such Bond, plus ~nterest on such principal to the due date thereof (whether such due date be by reason of maturity or upon redemption or prepayment or otherwise) shall have been made or caused to be made in accordance with the terms thereof, or (2) payment of the principal and the applicable premium of such Bond, plus interest on such principal to the due date thereof (whether such due date be by reason of maturity or upon redemption or prepayment or otherwise) shall have been provided by irrevocably depositing w~th the Trustee, in trust, and irrevocably appropriating and setting aside exclusively for such payment 0) moneys sufficient to make such payment or (ii) noncallable Government Obligations maturing as to principal and interest in such amount and at such times as will ~nsure the availabd~ty of sufficient moneys to make such payment, or (iii) a combination of both such moneys and noncallable Government Obligations, and 0v) payment of all necessary and proper fees, costs, and expenses of the Trustee satisfactory to the Trustee shall have been made in connection with the Bonds and the administration of this Agreement. For purposes of this Section, Govemrnent Obligations shall not include securities of any open-end or closed-end management type investment company or investment trust registered under the Investment Company Act of 1940. (c) Notwithstanding the foregoing, in the case of a Bond which by its terms may be redeemed or otherwise prepaid prior to the stated maturity thereof, and which the Authority elects to redeem or prepay, no deposit under clause (2) of subparagraph Co) above shall constitute such payment, d~scharge and satisfaction as aforesmd until such Bond shall have been ~rrevocably called or designated for redemption or prepayment and proper notice of such redemption or prepayment shall have been prewously mailed m accordance with Section 402 of th~s Agreement, or ~rrevocable provision shall have been made for the giving of such notice; provided that nothing in this Artmle shall reqmre or be deemed to require the Authonty to elect to redeem or prepay any such Bond. (d) In the event the Authority elects to redeem or prepay any such Bond, nothing in this Artmle shall require or be deemed to require the redemption or prepayment as of any particular date or dates. (e) Notwithstanding any provision of any other Article of this Agreement which may be contrary to the prowsions of this Article, all moneys or Government Obhgations set aside and held in trust pursuant to the provisions of this Article for the payment of Bonds (including interest and premmm, if any, thereof) shall be applied to and used solely for the payment of the particular Bonds (including ~nterest and premium thereof) with respect to whmh such moneys and Government Obligations have been so set aside m trust. (f) In the event that all of the Bonds secured by this Agreement are paid or deemed paid in accordance with the terms of this Agreement, then the right and interest of the Trustee in and to the trust estate and all covenants, agreements and other obligations of the Authority or the City to the registered holders of the Bonds will cease and be discharged and satisfied. In the event the Bonds of any maturity are paid or deemed to be paid in accordance with the terms of this Agreement, then such Bonds will cease to be entitled to any lien, benefit or security under this Agreement (other than the right to receive payment) and all covenants, agreements and other 35 obhgations of the Authority or the City to the registered holders of such Bonds will cease and be d~scharged and satisfied. ARTICLE XIII MISCELLANEOUS Section 1301. Consents, etc., of Bondholders. Any consent, request, direction, approval, objection or other instnmaent (collectively, a "Consent") required by tins Agreement to be executed by the Bondholders may be in any ntunber of concurrent writings of similar tenor and may be executed by such Bondholders in person or by agent appointed ~n wnting. Proof of the execution of a Consent or of the writing appointing any such agent shall be sufficient for any of the purposes of this Agreement and shall be conclusive in favor of the Authority w~th regard to any action taken under the Consent if the fact and date of the execution by any person of any such writing is proved by a certificate of any officer in any jurisdiction who by law has power to take acknowledgments witinn such junsdmtion that the person s~gning such writing acknowledged before him the execution thereof, or by affidavit of any witness to such execution. Section 1302. Limitation of Rights. With the exception of nghts heretn expressly conferred, nothing expressed or mentioned in or to be implied fi.om tins Agreement or the Bonds is intended or shall be construed to gtve to any person other than the part~es hereto and the holders of the Bonds any legal or eqmtable right, remedy or claim under or in respect to this Agreement or any covenants, conditions and agreements herein contained since tins Agreement and all of the covenants, conditions and agreements hereof are intended to be and is for the sole and exclusive benefit of the parties hereto and the holders of the Bonds as here~n provided. Section 1303. Limitation of Liability of Authority, Etc. No covenant, agreement or obligation contmned herein shall be deemed to be a covenant, agreement or obligation of any present or future member of the Authority or officer, commissioner, employee or agent of the Authonty in has individual capacity, and neither the members of the Authority nor any officer or commissioner of the Authority executing the Bonds shall be liable personally on the Bonds or be subject to any personal habihty or accountability by reason of the issuance thereof. No member of the Authority or officer, commissioner, employee, agent or advisor of the Authority shall ~ncur any personal hability with respect to any other action taken by him pursuant to thas Agreement or the Act, provided such commissioner, officer, employee, agent or advisor acts in good faith. The Authority shall not be liable under any circumstances for the actions or omissions of the City under the Support Agreement Section 1304. Severability. If any provision of this Agreement shall be held invalid by any court of competent jurisdiction, such holding shall not invalidate any other provision hereof and this Agreement shall be construed and enforced as if such illegal provision had not been contained herein. 36 Section 1305. Notices. Unless otherwise provided herein, all demands, notices, approvals, consents, requests, op~mons and other commtm~cations hereunder shall be ~n writing and shall be deemed to have been gtven when dehvered in person or mmled by first class regtstered or certffied mail, postage prepmd, addressed (a) ~f to the Authority, at One Columbus Center, Suite 300, V~rginia Beach, V~rgima 23462 (Attention: Chairman), (b) if to the City, at Municipal Center, Virginia Beach, V~rg~ma 23456 (Attention: C~ty Manager), or (c) if to the Trustee, at , , ., ~ (Attention: Corporate Trust Department). The Authority, the City and the Trustee may, by notice given hereunder, designate any further or different addresses to which subsequent demands, notmes, approvals, consents, requests, opinions or other commumcat~ons shall be sent or persons to whose attention the same shall be directed. Section 1306. Successors and Assigns. This Agreement shall be b~nding upon, ~nure to the benefit of and be enforceable by the parties and their respective successors and assigns. Section 1307. Applicable Law. This Agreement shall be governed by the apphcable laws of the Commonwealth of V~rginia. Section 1308. Counterparts. This Agreement may be executed in several counterparts, each of which shall be an ongnnal and all of which together shall constitute but one and the same instrument. 37 IN WITNESS WHEREOF, the Authonty and the Trustee have caused this Agreement to be executed in their respective corporate names as of the date first above written. CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY By Chairman WACHOVIA BANK, NATIONAL ASSOCIATION, as Trustee By. Its Acknowledged and Consented To: CITY OF VIRGINIA BEACH, VIRGINIA By: Its: 38 FIRST SUPPLEMENTAL AGREEMENT OF TRUST between CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY and WACHOVIA BANK, NATIONAL ASSOCIATION, as Trustee Dated as of [September 1,] 2003 H&W LLP draft of 8/14/03 ARTICLE VI SECURITY FOR SERIES 2003A BONDS Section 1.601. Security for Series 2003A Bonds .......................................................................... 6 ARTICLE VII MISCELLANEOUS Section 1.701. Limitations on Use of Proceeds ............................................................................... 7 Sectmn 1.702. Limitation of Raghts ............................................................................................. 7 Section 1.703. Severability ........................................................................................................... 7 Sectmn 1.704. Successors and Assigns ........................................................................................... 7 Sectmn 1.705. Applicable Law ....................................................................................................... 7 Section 1.706. Counterparts ........................................................................................................ 7 Signatures 11 Exhibit A - Form of Series 2003 Bond ...................................................................................... A- 1 (iO THIS FIRST SUPPLEMENTAL AGREEMENT OF TRUST dated as of the [first] day of [September 1,] 2003, by and between the CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY, a political subdivision of the Commonwealth of Vlrg~ma (the "Authority"), and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banlang association, having a corporate trust office in Richmond, V~rginia, as trustee (in such capacity, together with any successor in such capacity, herein called the "Trustee"), provides: WHEREAS, the Authority is a political subdivision of the Commonwealth of Vlrglma duly created by Chapter 643 of the Virgima Acts of Assembly of 1964, as amended (the "Act"); and WHEREAS, the Authority and the Trustee have entered into an Agreement of Trust dated as of [September 1,] 2003 (the "Master Agreement of Trust"), pursuant to which the Authority has agreed to issue from time to time public facility revenue bonds or notes and use the proceeds thereof to finance costs incurred in connection with certain Projects (as hereinafter defined) for the benefit of the City of Virginia Beach, Vlrg~ma (the "City"); and WHEREAS, within the limitations of and in compliance with the Master Agreement of Trust, the City has requested the Authority to issue a senes of public facility revenue bonds to finance the costs of the Series 2003A Projects (as hereinafter defined); and WHEREAS, the Authority has agreed to issue the Series 2003A Bonds (as hereinafter defined) in the aggregate principal amount of $ , secured by a pledge of the revenues and receipts derived from a Support Agreement dated as of [September 1,] 2003 (the "Support Agreement"), between the Authority and the City, and the City has agreed, subject to the annual appropriation by the Council of the City, to make annual payments that will be sufficient to pay the pnncipal of and premium, if any, and interest on such public facility revenue bonds as the same shall become due; and WHEREAS, the Authority has taken all necessary action to make the Series 2003A Bonds, when authenticated by the Trustee and issued by the Authority, valid and binding limited obligations of the Authority and to constitute this First Supplemental Agreement a valid and binding agreement authorizing and providing for the details of the Series 2003A Bonds; NOW THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter contained, the parties hereto agree as follows: ARTICLE I FIRST SUPPLEMENTAL AGREEMENT Section 1.101. Authorization of First Supplemental Agreement. This First Supplemental Agreement is authorized and executed by the Authority and delivered to the Trustee pursuant to and ~n accordance with Articles III and X of the Master Agreement of Trust. All terms, covenants, conditions and agreements of the Master Agreement of Trust shall apply with full force and effect to the Series 2003A Bonds and to the holders thereof, except as otherwise provided in this First Supplemental Agreement. Section 1.102. Definitions. Except as otherwise defined ~n this First Supplemental Agreement, words defined in the Master Agreement of Trust are used ~n this F~rst Supplemental Agreement with the meanings assigned to them ~n the Master Agreement of Trust. In addition, the following words shall have the following meanings unless a different meaning clearly appears from the context: "First Supplemental Agreement" shall mean flus First Supplemental Agreement of Trust between the Authority and the Trustee, which supplements and amends the Master Agreement of Trust. "Letter of Representations" shall mean the Blanket Letter of Representations dated July 11, 1997, from the Authonty to the Secunties Depository and any amendments thereto or successor agreements between the Authonty and any successor Securities Depository with respect to the Series 2003A Bonds Notwithstanding any provision of the Master Agreement of Trust, including Article X regarding amendments, the Trustee may enter ~nto any such amendment or successor agreement without the consent of Bondholders. "Project" or "Projects" shall have the meaning set forth in the Support Agreement. "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 2003A Bonds appointed pursuant to Sectmn 1.204, and their successors. "Series 2003A Bonds" shall mean the Authonty's $ Public Facility Revenue Bonds, Series 2003A, authorized to be issued pursuant to this First Supplemental Agreement. "Series 2003A Projects" shall mean have the meaning set forth in the Support Agreement. "Series 2003A Project Account" shall mean the Series 2003A Project Account established ~n Section 1.501 of this First Supplemental Agreement. Section 1.103. Rules of Construction. The following rules shall apply to the construction of this First Supplemental Agreement unless the context otherwise reqmres: (a) versa. Words importing the singular number shall include the plural number and vice (b) Words importing the redemption or calling for redemption of Series 2003A Bonds shall not be deemed to refer to or connote the payment of Series 2003A Bonds at their stated maturity. (c) Unless otherwise indicated, all references here~n to particular Articles or Sections are references to Articles or Sections of this First Supplemental Agreement. (d) The headings herein and Table of Contents to th~s First Supplemental Agreement hereto are solely for convenience of reference and shall not constitute a part of this First Supplemental Agreement nor shall they affect ~ts meaning, construction or effect. (e) All references herein to payment of Series 2003A Bonds are references to payment of principal of and premium, if any, and interest on the Series 2003A Bonds. ARTICLE II AUTHORIZATION, DETAILS AND FORM OF SERIES 2003A BONDS Section 1.201. Authorization of Series 2003A Bonds and Series 2003A Projects. There are hereby authorized to be issued the Series 2003A Bonds in an aggregate principal amount of $ to (a) finance the Cost of the Series 2003A ProJects and (b) finance costs incident to issuing the Series 2003A Bonds, ~n accordance with Article IV hereof. Section 1.202. Details of Series 2003A Bonds. (a) The Senes 2003A Bonds shall be designated "Pubhc Facihty Revenue Bonds, Series 2003A," shall be dated [September 1,] 2003, shall be issuable only as fully registered bonds in denominations of $5,000 and integral multiples thereof, shall be numbered R-1 upward. The Series 2003A Bonds shall bear interest at rates, payable semaannually on each June 1 and December 1, beginning June 1, 2004, and shall mature in installments on December 1 in years and amounts, as follows: Year Amount Rate Year Amount Rate (b) Each Series 2003A Bond shall bear interest (a) from its date, ~f such Series 2003A Bond ~s 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 2003A Bond is authenticated; prowded, however, that if at the time of authentication of any Series 2003A Bond payment of interest is in default, such Series 2003A Bond shall bear ~nterest from the date to which interest has been prod. Interest shall be calculated on the basis of a 360-day year of twelve 30-day months. (c) Principal of the Series 2003A Bonds shall be payable to the registered holder(s) upon the surrender of Series 2003A Bonds at the corporate trust office of the Trustee in Richmond, Virginia. Interest on the Series 2003A Bonds shall be payable by check or draft mailed to the registered owners at their addresses as they appear on the regnstrat~on books kept by the Trustee on the [15th] day of the month preceding each interest payment date; provided, however, if the Series 2003A Bonds are registered in the name of a Securities Depository or its nominee as registered holder or at the option of a registered holder(s) of at least $1,000,000 of Series 2003A Bonds, payment shall be made by wire transfer pursuant to the wire instructions received by the Trustee from such regastered holder(s). If the nominal date for making any payment on the Series 2003A Bonds is not a Business Day, the payment may be made on the next Business Day with the same effect as if made on the nominal date, and no additional interest shall accrue between the nominal date and the actual payment date. Principal and ~nterest shall be payable in lawful money of the United States of America. Section 1.203. Form of Series 2003A Bonds. The Senes 2003A Bonds shall be in substantially the form set forth in Exhibit A, with such appropriate variations, omissions and insertions as are permitted or required by the Master Agreement of Trust and this First Supplemental Agreement. Section 1.204. Securities Depository Provisions. Initially, one certfficate for each maturity of the Series 2003A Bonds will be ~ssued and registered to the Securities Depository, or its nominee. The Authority shall enter into a Letter of Representations relating to a book-entry system to be maintained by the Securities Depository with respect to the Series 2003A Bonds. In the event that (a) the Securities Depository determines not to continue to act as a securities depository for the Series 2003A Bonds by giving notice to the Trustee and the Authority d~scharging ~ts responsibilities hereunder or (b) the Authority, at the direction of the City, determines (1) that beneficial owners of Series 2003A Bonds shall be able to obtmn certificated Series 2003A Bonds or (2) to select a new Securities Depository, then the Trustee shall, at the direction of the Authority, attempt to locate another qualified securities depository to serve as Securities Depository or authenticate and deliver certificated Series 2003A Bonds to the beneficial owners or to the Securities Depository participants on behalf of beneficial owners substantially in the form provided for in Exhibit A; provided, however, that such form shall prowde for ~nterest on the Series 2003A Bonds to be payable (i) from [September 1,] 2003, if it is authenticated prior to June 1, 2004, or (i0 otherwise from the June 1 or December 1 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 2003A Bonds shall be payable from the date to which ~nterest has been prod). In delivering certificated Series 2003A Bonds, the Trustee 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 2003A Bonds will be reg~strable, transferable and exchangeable as set forth m Sections 204 and 205 of the Master Agreement of Trust. So long as there is a Securities Depository for the Series 2003A Bonds (A) it or its nominee shall be the registered holder(s) of the Series 2003A Bonds, 03) notwithstanding anyttung to the contrary in this First Supplemental Agreement, determinations of persons entitled to payment of pnncipal 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 Authority and the Trustee shall not be responsible or liable for maintaimng, supervising or reviewing the records mmntained by the Securities Depository, ~ts participants or persons acting through such participants, (D) references ~n tins F~rst Supplemental Agreement to registered holder(s) of the Series 2003A Bonds shall mean such Securities Depository or ~ts nominee and shall not mean the beneficial owners of the Series 2003A Bonds and (E) ~n the event of any ~ncons~stency between the promsions of this F~rst Supplemental Agreement, other than those set forth in tins paragraph and the preceding paragraph, and the provisions of the Letter of Representations such provisions of the Letter of Representations shall control. Section 1.205. Delivery of Series 2003A Bonds. The Trustee shall authenticate and deliver the Series 2003A Bonds when there have been filed with or delivered to it all items required by Section 303 of the Master Agreement of Trust. ARTICLE III REDEMPTION OF SERIES 2003A BONDS Section 1.301. Redemption Date and Price. The Series 2003A Bonds may not be called for redemption by the Authority except as follows: (a) The Series 2003A Bonds maturing on or after December 1, 2014, may be redeemed by the Authority, at the direction of the City, on or after December 1, 2013, in whole or in part at any time (in increments of $5,000), at a redemption price of 100% of the pnncipal mount, or portion thereof, of Series 2003A Bonds to be redeemed plus interest accrued to the redemption date. Section 1.302. Selection of Series 2003A Bonds for Redemption. If less than all of the Series 2003A Bonds are called for redemption, the Series 2003A Bonds to be redeemed shall be selected by the Securities Depository or any successor securities depository pursuant to its rules and procedures or, if the book-entry system is d~scontinued, shall be selected by the Trustee by lot in such manner as the Trustee ~n its discretion may determine. The portion of any Series 2003A Bond to be redeemed shall be m the principal amount of $5,000 or some multiple thereof. In selecting Series 2003A Bonds for redemption, each Series 2003A Bond shall be considered as representing that number of Series 2003A Bonds which is obtmned by dividing the principal amount of such Series 2003A Bond by $5,000. If a portion of a Series 2003A Bond shall be called for redemption, a new Series 2003A Bond in pnncipal amount equal to the unredeemed port~on thereof shall be issued to the registered owner upon the surrender thereof. Section 1.303. Notice of Redemption. Notice of redemption of Senes 2003A Bonds shall be given in the manner set forth ~n Section 402 of the Master Agreement of Trust. ARTICLE IV APPLICATION OF PROCEEDS OF SERIES 2003A BONDS Section 1.401. Application of Proceeds of Series 2003A Bonds. The proceeds of the Series 2003A Bonds shall be prod to the Trustee and apphed as follows' (a) $ ., representing accrued interest on the Series 2003A Bonds, shall be deposited in the Interest Account ~n the Bond Fund; and (b) $ shall be transferred to the City for deposit in the Series 2003A Project Account ~n the Project Fund. ARTICLE V ESTABLISHMENT OF ACCOUNT Section 1.501. Series 2003A Project Account. There shall be established within the ProJect Fund a special account entitled "Series 2003A Project Account." The portion of the proceeds of the Series 2003A Bonds spemfied ~n Section 1.401Co) shall be deposited by the City in the Senes 2003A Project Account. Money ~n the Series 2003A ProJect Account shall be used ~n accordance with the provisions of Section 503 of the Master Agreement of Trust. ARTICLE VI SECURITY FOR SERIES 2003A BONDS Section 1.601. Security for Series 2003A Bonds. The Series 2003A Bonds shall be equally and ratably secured under the Master Agreement of Trust with any other series issued pursuant to Article III of the Master Agreement of Trust, without preference, priority or distinction of any Bonds over any other Bonds, except as provided in the Master Agreement of Trust. ARTICLE VII MISCELLANEOUS Section 1.701. Limitations on Use of Proceeds. The Authority intends that interest on the Series 2003A Bonds shall be excluded from gross ~ncome for Federal ~ncome tax purposes. The Authority covenants w~th the holders of the Series 2003A Bonds not to take any action that would adversely affect, and to take all action w~th~n its power necessary to maintmn, the exclusion of interest on all Series 2003A Bonds from gross ~ncome for Federal income taxation purposes. Section 1.702. Limitation of Rights. With the exception of nghts herein expressly conferred, nothing expressed or mentioned in or to be implied from this F~rst Supplemental Agreement or the Series 2003A Bonds ~s intended or shall be construed to give to any person other than the parties hereto and the holders of Series 2003A Bonds any legal or equitable right, remedy or clmm under or in respect to tlus First Supplemental Agreement or any covenants, conditions and agreements herein contained s~nce this First Supplemental Agreement and all of the covenants, conditions and agreements hereof are ~ntended to be and are for the sole and exclusive benefit of the parties hereto and the holders of Bonds as here~n provided. Section 1.703. Severability. If any provision of this F~rst Supplemental Agreement shall be held invalid by any court of competent jurisdiction, such holding shall not ~nvahdate any other provision hereof and this F~rst Supplemental Agreement shall be construed and enforced as if such illegal provision had not been contained herein. Section 1.704. Successors and Assigns. Tlus F~rst Supplemental Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. Section 1.705. Applicable Law. This First Supplemental Agreement shall be governed by the apphcable laws of the Commonwealth of Virginia. Section 1.706. Counterparts. This First Supplemental Agreement may be executed ~n several counterparts, each of which shall be an origunal and all of which together shall constitute but one and the same instrument. IN WITNESS WHE~OF, the Authority and the Trustee have caused ttus First Supplemental Agreement to be executed ~n their respective corporate names as of the date first above written. CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY By: Chairman WACHOVIA BANK, NATIONAL ASSOCIATION, as Trustee By Title Acknowledged and Consented To: CITY OF VIRGINIA BEACH, VIRGINIA, By: T~tle: 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-1 $ UNITED STATES OF AMERICA COMMONWEALTH OF VIRGINIA CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY Public Facility Revenue Bond, Series 2003A INTEREST RATE MATURITY DATE DATED DATE CUSIP December 1,_ [September 1,] 2003 REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: DOLLARS The City of Virginia Beach Development Authority, a political subdivision of the Commonwealth of Virginia (the "Authority"), for value received, hereby promises to pay upon surrender hereof at the principal corporate trust office of Wachov~a Bank, National Association, Richmond, Virgima as trustee, or ~ts successor ~n trust (the "Trustee"), under the Agreement of Trust (as hereinafter defined) solely from the source and as hereinafter provided, to the registered owner hereof, or registered assigns or legal representative, the pnnc~pal 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 on each June 1 and December 1, beginning June 1, 2004, at the annual rate stated above, calculated on the bas~s of a 360-day year of twelve 30-day months. Interest is payable (a) from [September 1,], 2003, if this bond is authenticated prior to June 1, 2004, or (b) otherwise from the June 1 or December 1 that ~s, or ~mmediately precedes, the date on which this bond is authenticated (unless payment of interest hereon ss in default, ~n which case this bond shall bear interest from the date to which ~nterest has been pa~d). Interest is payable by check or draft mailed to the registered owner hereof at ~ts address as it appears on the 15th day of the month preceding each interest payment date on registration books kept by the Trustee; provided, however, that at the option of a registered owner of at least $1,000,000 of Bonds (as here~nat~er defined), payment w~ll be made by wire transfer pursuant to the most A-1 recent wire instructions received by the Trustee from such registered owner. If the nominal date for making any payment on tlus bond a Bus~ness Day (as hereinafter defined), the payment may be made on the next Business Day w~th the same effect as if made on the nominal date, and no additional ~nterest shall accrue between the nominal date and the actual payment date. Principal and ~nterest are payable ~n lawful money of the United States of America. "Business Day" shall mean a day on which banking bus~ness is transacted, but not including a Saturday, Sunday or legal hohday, or any day on which banking ~nstitutions are authorized by law to close in the city ~n the Commonwealth of Virginia in which the Trustee has ~ts principal corporate trust office. Notwithstanding any other provision hereof, th~s bond ~s subject to book-entry form mmntained by The Depository Trust Company ("DTC"), and the payment of principal and interest, the providing of notices and other matters shall be made as described ~n the Authority's Letter of Representations to DTC. This bond is one of an issue of $ Public Facility Revenue Bonds, Series 2003A (the "Bonds"), authorized and issued pursuant to Chapter 643 of the V~rgtnia Acts of Assembly of 1964, as amended. The Bonds are ~ssued under and secured by an Agreement of Trust dated as of [September 1,] 2003, between the Authority and the Trustee, as supplemented by a First Supplemental Agreement of Trust dated as of [September 1,] 2003 (collectively, the "Agreement of Trust"). The Agreement of Trust assigns to the Trustee, as security for the Bonds, (a) the revenues and receipts derived from a Support Agreement dated as of [September 1,] 2003 (the "Support Agreement"), between the Authonty and the City of Virginia Beach, V~rgima (the "City"), and (b) the Authority's rights under the Support Agreement (except for the Authority's rights under the Support Agreement to the payment of certain fees and expenses and the rights to notices). Reference ~s hereby made to the Agreement of Trust for a description of the provisions, among others, w~th respect to the nature and extent of the security, the rights, duties and obligations of the Authonty 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 revenues and receipts derived from the C~ty under the Support Agreement on a panty with the Bonds may be issued under the terms and conditions set forth in the Agreement of Trust. Terms not otherwise defined herein shall have the meaning assigned such terms in the Agreement of Trust. The Bonds are issued to finance the acquisition, construction and equipping of various capital improvements for the City and costs incurred in ~ssuing the Bonds (the "Series 2003A ProJects"). Under the Support Agreement, the City has agreed to make payments that will be sufficient to pay the principal of and interest on the Bonds as the same shall become due in accordance with their terms and the provisions and the terms of the Agreement of Trust The obligation of the City to make payments under the Support Agreement constitutes a current expense of the City, subject to annual appropriation by the Council of the City. The obhgation of the City to make payments under the Support Agreement does not constitute a debt of the City w~ttun the meaning of any constitutional or statutory limitation nor ahability of or a lien or charge upon funds or property of the City beyond any fiscal year for which the City has appropriated moneys to make such payments. A-2 THE BONDS AND THE INTEREST THEREON ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM REVENUES AND RECEIPTS DERIVED FROM THE CITY RECEIVED BY THE AUTHORITY UNDER THE SUPPORT AGREEMENT, AND FROM CERTAIN FUNDS, AND THE INVESTMENT INCOME THEREON, HELD UNDER THE AGREEMENT OF TRUST, WHICH REVENUES, RECEIPTS AND FUNDS HAVE BEEN PLEDGED AND ASSIGNED TO SECURE PAYMENT THEREOF. THE BONDS AND INTEREST THEREON SHALL NOT BE DEEMED TO CONSTITUTE A GENERAL OBLIGATION DEBT OR A PLEDGE OF THE FAITH AND CREDIT OF THE COMMONWEALTH OF VIRGINIA OR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE AUTHORITY AND THE CITY. NEITHER THE COMMONWEALTH OF VIRGINIA NOR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE AUTHORITY AND THE CITY, SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF OR INTEREST ON THE BONDS OR OTHER COSTS INCIDENT THERETO EXCEPT FROM THE REVENUES AND RECEIPTS PLEDGED AND ASSIGNED THEREFOR, AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE COMMONWEALTH OF VIRGINIA, OR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE AUTHORITY AND THE CITY, IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON THE BONDS OR OTHER COSTS INCIDENT THERETO. THE AUTHORITY HAS NO TAXING POWER. No covenant, condition or agreement contained here~n shall be deemed to be a covenant, agreement or obligation of any present or future director, officer, employee or agent of the Authority in his ~nd~v~dual capacity, and neither the Chmrman of the Authority nor any officer thereof executxng tins Bond shall be hable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. The Bonds may not be called for redemption by the Authority except as provided herein and ~n the Agreement of Trust. Optional Redemption. The Bonds matunng on or before December 1, 2014, will not be subject to optional redemption before their respective mattmty dates. The Bonds maturing on or after December 1, 2014, may be redeemed prior to their respective maturities on or after December 1, 2013, at the option of the Authority, at the d~rection of the City, in whole or in part at any time at a redemption price of 100% of the principal mount, or portion thereof, of Bonds to be redeemed plus interest accrued to the redemption date. If less than all the Bonds are called for redemption, they shall be redeemed from maturities in such order as determined by the Authority. 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 ~ts rules and procedures or, if the book-entry system ~s d~scontinued, shall be selected by the Trustee by lot ~n such manner as the Trustee in its discretion may determine. The portion of any Bond to be redeemed shall be in the principal amount of $5,000 or some ~ntegral multiple thereof. In selecting Bonds for redemption, each Bond shall be considered as representing that number of Bonds winch is obtained by d~v~ding the pnncipal amount of such Bond by $5,000. A-3 If any of the Bonds or portions thereof are called for redemption, the Trustee shall send notice of the call for redemption, ~dentifying the Bonds or portions thereof to be redeemed, not less than 30 nor more than 60 days prior to the redemption date, by facsimile, regustered or certified mail or overmght express dehvery, to the registered owner of the Bonds. Such notice may state that (1) it is conditioned upon the deposit of moneys, in an amount equal to the amount necessary to effect the redemption, with the Trustee no later that the redemption date or (2) the Authority retains the right to rescind such notice on or prior to the scheduled redemption date, and such notice and optional redemption shall be of no effect if such moneys are not so deposited or if the notme is rescinded. 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 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 stat or other proceedings with respect thereto, except as provided ~n the Agreement of Trust. Modifications or alterations of the Agreement of Trust or the Support Agreement, 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 lssuable as registered bonds in the denomination of $5,000 and integral multiples thereof. Upon surrender for transfer or exchange of this Bond at the corporate trust office of the Trustee in Richmond, Virginia, 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 Trustee, the Authority shall execute, and the Trustee 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 Authority, except that the Trustee may charge the person requesting such exchange the amount of any tax or other governmental charge required to be prod with respect thereto. The Trustee shall treat the registered owner as the person exclusively entitled to payment of principal and interest and the exercise of all other fights and powers of the owner, except that interest payments shall be made to the person shown as holder on the [fifteenth] day of the month 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. A-4 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 Trustee shall have executed the Certificate of Authentication appeanng hereon and inserted the date of authentication hereon. IN WITNESS WHEREOF, the City of Virginia Beach Development Authority has caused this Bond to be s~gned by ~ts Chairman, ~ts seal to be impnnted hereon and attested by 1ts Secretary, and this Bond to be dated ., 2003 CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY (SEAL) By. Attest: Chairman Secretary A-5 CERTIFICATE OF AUTHENTICATION Date Authenticated: This Bond is one of the Series 2003A Bonds described in the witban mentioned Agreement of Trust. WACHOVIA BANK, NATIONAL ASSOCIATION, as Tmstee By Authorized Officer A-6 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, w~th full power of substitution ~n the premises. Dated: Signature Guaranteed NOTICE: Signature(s) must be guaranteed by an Eligible Guarantor Institution such as a Commercial Bank, Trust Company, Securities Broker/Dealer, Credit Umon, or Savings Association who is a member of a medallion program approved by The Securities Transfer Assomation, Inc. (Signature of 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 alteration or enlargement or any change whatsoever. A-7 SUPPORT AGREEMENT between CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY and CITY OF VIRGINIA BEACH, VIRGINIA Dated as of [September 1 ], 2003 NOTE: THIS SUPPORT AGREEMENT HAS BEEN ASSIGNED TO, AND IS SUBJECT TO A SECURITY INTEREST IN FAVOR OF, WACHOVIA BANK, NATIONAL ASSOCIATION, AS TRUSTEE UNDER AN AGREEMENT OF TRUST DATED AS OF SEPTEMBER 1, 2003, WITH THE CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY, AS AMENDED OR SUPPLEMENTED FROM TIME TO TIME. INFORMATION CONCERNING SUCH SECURITY INTEREST MAY BE OBTAINED FROM THE TRUSTEE AT WACHOVIA BANK, RICHMOND, VIRGINIA. H&W LLP draft of 8/14/03 TABLE OF CONTENTS Page Part~es .............................................................................................................................................. 1 Recitals ............................................................................................................................................ 1 Grantang Clauses .............................................................................................................................. 1 ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION Section 1.1. Definitions ................................................................................................................ 2 Sectmn 1.2. Rules of Construction .............................................................................................. 3 ARTICLE II REPRESENTATIONS Section 2.1. Representations by Authority .................................................................................. 3 Section 2.2. Representations by City ........................................................................................... 4 ARTICLE III AGREEMENT TO ISSUE BONDS Section 3.1. Section 3.2. Section 3.3. Section 3.4. Agreement to Issue Bonds ....................................................................................... 5 Agreement to Issue Bonds to Finance Additional Projects ..................................... 5 Limitation of Authority's Liability .......................................................................... 5 Comphance with Agreement of Trust ...................................................................... 6 ARTICLE IV PAYMENT OBLIGATIONS Section 4.1. Section 4.2. Section 4.3. Section 4.4. Amounts Payable ..................................................................................................... 6 Payments Assigned ................................................................................................. 6 Obligation Unconditional ........................................................................................ 7 Appropriations of Annual Payments and Additional Payments .............................. 7 ARTICLE V PREPAYMENT AND REDEMPTION Section 5.1. Prepayment and Redemption ................................................................................... 8 -i- Section 6.1. Section 6.2. Section 6.3. Section 6.4. Section 6.5. Sectxon 7.1. Section 7.2. Section 7.3. Section 7.4. Section 7.5. Section 7.6. Section 8.1. Section 8.2. Section 8.3. Section 9.1. Section 9.2. Section 9.3. Section 9.4. Section 9.5. Section 10.1. Section 10.2. Section 10.3. Section 10.4. Section 10.5. ARTICLE VI PARTICULAR COVENANTS Limitation of Liability of Members, Commissioners, etc. of Authority and C~ty...8 Use of Proceeds ....................................................................................................... 8 Private Activity Covenants ...................................................................................... 9 Preservation of Tax-Exempt Status of Interest ........................................................ 9 Maintenance of Existence of Authority .................................................................. 9 ARTICLE VII EVENTS OF DEFAULT AND REMEDIES Events of Default ................................................................................................... 10 Remedies ............................................................................................................... 11 Reinstatement after Event of Default .................................................................... 11 No Remedy Exclusive ............................................................................................ 11 No Additional Wmver Implied by One Wmver ................................................... 12 Attorneys' Fees and Other Expenses ..................................................................... 12 ARTICLE VIII AGREEMENT OF TRUST; AMENDMENTS; ASSIGNMENT Agreement of Trust; Covenants ............................................................................. 12 Amendments .......................................................................................................... 13 Assignment .......................................................................................................... 13 ARTICLE IX ARBITRAGE REBATE FUND Arbitrage Rebate Fund ........................................................................................... 13 Rebate Requirement ............................................................................................... 13 Payment of Rebate Amount ................................................................................... 14 Reports by Trustee ................................................................................................. 14 Disposition of Balance in Senes 2002A Arbitrage Rebate Fund .......................... 15 ARTICLE X MISCELLANEOUS Notices ................................................................................................................... 15 Severabflity ............................................................................................................ 15 Amounts Remaining Under Agreement of Trust .................................................. 15 Limited Liability of City ........................................................................................ 15 Successors and Assigns .......................................................................................... 16 -ii- Section 10.6. Section 10.7. Section 10.8. Counterparts .......................................................................................................... 16 Entire Agreement .................................................................................................. 16 Governing Law .................................................................................................... 16 Stgnatures ..................................................................................................................................... 17 Receipt .......................................................................................................................................... 18 Exlubit A- Schedule of Payments ............................................................................................. A-1 THIS SUPPORT AGREEMENT dated as of the [first] day of [September], 2003, by and between the CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY, a political subdxv~sion of the Commonwealth of Virginia (the "Authority"), and the CITY OF VIRGINIA BEACH, VIRGINIA, a politmal subdivision of the Commonwealth of Virginia (the "City"), prowdes: WITNESSETH: WHEREAS, the Authority is a political subdivls~on of the Commonwealth of V~rglma duly created by Chapter 643 of the V~rgnma Acts of Assembly of 1964, as amended (the "Act"); and WHEREAS, the Act authorizes the Authority to acquire, ~mprove, maintmn, equip, own, lease and dispose of"Authority famhties," as defined ~n the Act, to finance or refinance and lease fatalities for use by, among others, a c~ty, to issue its revenue bonds, notes and other obligations from time to time for such purposes and to pledge all or any part of its assets, whether then owned or thereafter acquired, as security for the payment of the principal of and interest on any such obligations; and WHEREAS, the City desires to undertake a program involving the development of infrastructure and the construction of pubhc facilities and other mtmlc~pal improvements in the City, which will promote commerce and the prosperity of the c~tizens of V~rgmia Beach; and WHEREAS, ~n furtherance of the purposes of the Act, the C~ty has requested the Authority to undertake from time to t~me one or more Projects (as hereinafter defined), and the Authority has determined to issue from t~me to time pursuant to the terms of an Agreement of Trust dated as of [September 1,] 2003 (the "Master Agreement of Trust"), between the Authority and Wachovia Bank, National Association, as trustee (the "Trustee"), as supplemented by a F~rst Supplemental Agreement of Trust dated as of [September 1,] 2003, between the Authority and the Trustee (the "First Supplemental Agreement of Trust," and together with the Master Agreement of Trust, the "Agreement of Trust"), ~ts pubhc facd~ty revenue bonds and to use the proceeds thereof to finance costs ~ncurred ~n connection with the Projects for the benefit of the City; and WHEREAS, such public faclhty revenue bonds will be secured by a pledge of the revenues and receipts received by the Authority from payments made by the City pursuant to this Support Agreement; and WHEREAS, all acts, conditions and things required by law to happen, exist and be performed precedent to and in connection with the execution of and entering into this Support Agreement have happened, exist and have been performed ~n regular and due t~me and in form and manner as reqmred by law, and the parties hereto are now duly empowered to execute and enter into this Support Agreement; NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter contained and other valuable consideration, the parties hereto covenant and agree as follows: ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION Section 1.1. Definitions. Unless otherwise defined in this Support Agreement, all words used herein shall have the meanings assigned to such terms m the Master Agreement of Trust. The following words as used in this Support Agreement shall have the following meanings unless a different meaning clearly appears from the context: "Act" shall mean Chapter 643 of the Virginia Acts of Assembly of 1964, as amended. "Additional Payment(s)" shall mean such payment or payments made by the City pursuant to Section 4.1Co) and (c) and Section 9.3. "Agreement of Trust" shall mean the Master Agreement of Trust and the First Supplemental Agreement of Trust. "Annual Budget" shall mean the budget by that name referred to in Section 4.4. "Annual Payment(s)" shall mean the payments made by the City under this Support Agreement in accordance with the schedule attached as Exhibit A hereto, which such payments correspond in amount to the payments of principal and interest due on all Outstanding Bonds, and which payments include payments pursuant to agreements with providers of credit enhancement or liquidity support with respect to such Bonds, to reimburse such providers for debt service payments made, and to pay credit enhancement or liquidity support fees with respect to such Bonds, scheduled to come due within a specified Fiscal Year. "Basic Agreements" shall mean the Agreement of Trust and this Support Agreement. "Event of Default" shall mean the events enumerated in Section 7.1. "First Supplemental Agreement of Trust" shall mean the F~rst Supplemental Agreement of Trust dated as of [September 1,] 2003, between the Authority and the Trustee supplementing the Master Agreement of Trust. "Fiscal Year" shall mean the twelve-month period begnnning July 1 of one year and ending on June 30 of the following year, or such other fiscal year of twelve months as may be selected by the City. "Master Agreement of Trust" shall mean the Agreement of Trust dated as of [September 1,] 2003, between the Authority and the Trustee. "Project" or "Projects" shall mean, individually or collectively, the Series 2003A Projects and any other project undertaken by the Authority, with the City's consent, from time to time and identified in a Supplemental Support Agreement, including without limitation, the financing or refinancing of the acquisition, construction, improvement or equipping of ~nfrastmcture, public facilities and other improvements and facihties permitted to be undertaken pursuant to the provisions of the Act, including any extensions, additions, replacements, equipment and appurtenances to or for the benefit of such public facilities. "Series 2003A Projects" shall mean the acquisition, construction and equipping of all or a portion of the projects set forth in Exhibit B hereto. "Series 2003A Arbitrage Rebate Fund" shall mean the fund established ~n Section 9.1. "Supplemental Support Agreement" shall mean any Supplemental Support Agreement supplementing, amending or modifying the prov~slons of this Support Agreement entered into by the Authority and the City pursuant to Article X of the Master Agreement of Trust. "Support Agreement" shall mean this Support Agreement, as such Support Agreement may be supplemented, amended or modified by one or more Supplemental Support Agreements. "Series 2003A Bonds" shall mean the Authonty's $ Public Facihty Revenue Bonds, Series 2003A, authorized to be issued pursuant to the First Supplemental Agreement of Trust. Section 1.2. Rules of Construction. The following rules shall apply to the construction of this Support Agreement unless the context otherwise requires: (a) versa. Words importing the singular number shall include the plural number and vice (b) Words importing the redemption or calhng for redemption of Bonds shall not be deemed to refer to or connote the payment of Bonds at their stated maturity. (c) Unless otherwise ~ndicated, all references herein to particular Articles or Sections are references to Articles or Sections of this Support Agreement. (d) The headings herein and Table of Contents to this Support Agreement herein are solely for convenience of reference and shall not constitute a part of this Support Agreement nor shall they affect its meaning, construction or effect. (e) All references here~n to payment of Bonds are references to payment of pnncipal of and premium, if any, and ~nterest on the Bonds. ARTICLE II REPRESENTATIONS Section 2.1. Representations by Authority. The Authority makes the following representations: (a) The Authority ~s a pohtical subdivision of the Commonwealth of Virginia duly created under the Act; Co) Pursuant to the Act, the Authority has full power and authority to enter ~nto the Basic Agreements and to perform the transactions contemplated thereby and to carry out its obligations thereunder and by proper action has duly authorized, executed and delivered such Basic Agreements; (c) The execution, delivery and compliance by the Authority with the terms and conditions of the Basic Agreements will not conflict with or constitute or result ~n a default under or violation of, (1) any existing law, rule or regulation applicable to the Authority, or (2) any trust agreement, mortgage, deed of trust, lien, lease, contract, note, order, judgment, decree or other agreement, instrument or other restriction of any k~nd to which the Authority or any of its assets is subject; (d) No further approval, consent or withholding of object~on on the part of any regulatory body or any official, Federal, state or local, is required in connection w~th the execution or delivery of or compliance by the Authority with the terms and conditions of the Basic Agreements, except that no representation is made as to the applicability of any Federal or state securities laws; and (e) There is no litigation at law or in equity or any proceeding before any governmental agency ~nvolving the Authority pending or, to the knowledge of the Authority, threatened with respect to (1) the creation and existence of the Authority, (2) its authority to execute and deliver the Basic Agreements, (3) the validity or enforceability of the Basic Agreements or the Authority's performance of its obligations thereunder, (4) the title of any officer of the Authority executing the Basic Agreements, or (5) the ability of the Authority to issue and sell its bonds. Section 2.2. Representations by City. The City makes the following representations: (a) The City is a pohtical subdivision of the Commonwealth of Virginia; Co) The C~ty has full power and authority to enter into the Basic Agreements to which it is a party and to perform the transactions contemplated thereby and to carry out its obhgat~ons thereunder and by proper action has duly authonzed, executed and dehvered such Basic Agreements; (c) The City ~s not in default in the payment of the principal of or interest on any of its indebtedness for borrowed money and is not in default under any instrument under or subject to which any indebtedness for borrowed money has been incurred, and no event has occurred and is continmng that with the lapse of time or the giving of notice, or both, would constitute or result in an event of default thereunder; (d) The City is not in default under or ~n violation of, and the execution, dehvery and comphance by the City with the terms and conditions of the Basic Agreements to which ~t is a party will not conflict with or constitute or result in a default under or violation of, (1) any existing law, rule or regulation applicable to the City or (2) any trust agreement, mortgage, deed of trust, lien, lease, contract, note, order, judgment, decree or other agreement, instrument or restnction of any kind to which the City or any of its assets is subject, and no event has occurred and is continuing that with the lapse of time or the giving of notice, or both, would constitute or result in such a default or violation; (e) No further approval, consent or withholding of objection on the part of any regulatory body or any official, Federal, state or local, is required in connection with the execution or delivery of or compliance by the City with the terms and conditions of the Basic Agreements to winch it is a party; and (f) There is no litigation at law or in equity or any proceeding before any governmental agency involving the City pending or, to the knowledge of the City, threatened with respect to (1) the authority of the City to execute and deliver the Basic Agreements to which it is a party, (2) the validity or enforceability of such Basic Agreements or the City's performance of its obligations thereunder, (3) the title of any officer of the City executing such Basic Agreements, or (4) the ability of the City to undertake the Series 2003A ProJects. ARTICLE III AGREEMENT TO ISSUE BONDS Section 3.1. Agreement to Issue Bonds. The Authority hereby agrees, simultaneously with the execution and delivery hereof, to proceed with the issuance and sale of the Series 2003A Bonds, bearing interest, matunng and having the other terms and provisions set forth in the First Supplemental Agreement of Trust. The proceeds of the Series 2003A Bonds will be used to finance the costs of the Series 2003A Projects. Subject to the limitation of Section 4.4, the City agrees to make all Annual Payments and Additional Payments when and as the same shall become due and payable in amounts sufficient to pay the principal of and premium, if any, and interest on the Series 2003A Bonds. Section 3.2. Agreement to Issue Bonds to Finance Additional Projects. In order to finance the Costs of Projects for the City in addition to the Series 2003A Projects, the Authority agrees that it shall, from time to time, issue additional Series of Bonds for such purposes. Such additional Series of Bonds shall be issued, from time to time under the terms of the Agreement of Trust, solely to finance Projects approved by the City. The obligation of the Authority to issue additional Series of Bonds shall be conditioned upon compliance with the provisions of Section 303 of the Master Agreement of Trust. Section 3.3. Limitation of Authority's Liability. Anything contained in tins Support Agreement to the contrary notwithstanding, any obligation the Authority may incur in connection with the issuance of a Series of Bonds, including the Series 2003A Bonds, for the payment of money shall not be deemed to constitute a debt or general obligation of the Authority within any constitutional or statutory limitations, but shall be payable solely from the revenues and receipts derived by ~t pursuant to this Support Agreement and from other moneys and secunty specifically pledged pursuant to the terms of the Agreement of Trust. Section 3.4. Compliance with Agreement of Trust. If the City is not in default under this Support Agreement, the Authonty, at the request of the City, shall take (a), if the Bonds are then redeemable under the Agreement of Trust, all steps that may be necessary to effect redemption thereunder and (b) any other action reqmred by the Agreement of Trust. By its executmn of this Support Agreement, the City acknowledges its approval of all the terms and conditions set forth xn the Agreement of Trust. ARTICLE IV PAYMENT OBLIGATIONS Section 4.1. Amounts Payable. (a) Subject to the limitation of Section 4.4, the City shall pay to the Authonty or its assignee the Annual Payments specified in Exhibit A, as such Exhibit A may be amended from time to time to reflect the issuance of additional Bonds under the Agreement of Trust, on or before the due dates set forth in Exhibit A. The Annual Payments shall be payable without notice or demand at the principal corporate trust office of the Trustee in Richmond, V~rginia. The City shall receive a credit agmnst its obligation to make the next succeeding Annual Payment due under this Support Agreement m an amount equal to any amounts on deposit in the Bond Fund and any interest income derived from the investment thereof held by the Trustee in the Bond Fund, provided that such amounts have not been applied previously as a credit w~th respect to any Annual Payment and will be available to make the corresponding payments on the Bonds then Outstanding. (b) Subject to the limitation of Section 4.4 and subject to the terms of a more specffic agreement as to compensation entered into by the City and the Trustee, the City agrees to make Additional Payments to pay to the Trustee until payment in full of all Bonds then Outstanding its reasonable fees for services rendered and for expenses reasonably incurred by the Trustee under the Agreement of Trust, and for any cost or expense necessary to cancel and discharge the Agreement of Trust upon payment of all Bonds then Outstanding. (c) Subject to the limitation of Section 4.4, the City agrees to make Additional Payments to pay (1) the Authority's annual administrative fee payable on August 1 of each year ~n the amount equal to the lesser of (i) 1/20 of 1% of the principal amount of all Bonds then Outstanding or (ii) $35,000, (2) any expenses incurred by the Authority in connecnon w~th its obligations under this Support Agreement and (3) all other amounts whmh the C~ty agrees to pay under the terms of this Support Agreement, but not including Annual Payments. Section 4.2. Payments Assigned. The Authority and the City acknowledge and agree that all Annual Payments and Additional Payments (except the right of the Authority to the payment of fees, costs and expenses and the right to receive notices as provided in tins Support Agreement and ~n the Agreement of Trust) are assigned by the Agreement of Trust to the Trustee. The City consents to such assignment and agrees to pay to the Trustee all mounts payable by the City that are so assigned. Section 4.3. Obligation Unconditional. Except as otherwise provided in this Support Agreement, including the hmitat~on in Section 4.4, the obligations of the C~ty to make all Annual Payments and to observe all other covenants, conditions and agreements under the Basic Agreements shall be absolute and unconditional, irrespective of any right of setoff, recoupment or counterclaim the C~ty may otherwise have against the Authority, and the C~ty shall not suspend or d~scontinue any such Annual Payment or fail to observe and perform any of ~ts covenants, conditions and agreements under the Basic Agreements. Section 4.4. Appropriations of Annual Payments and Additional Payments. While recognizing that ~t is not empowered to make any binding commitment to make Annual Payments and Additional Payments beyond the current Fiscal Year, the City Councd m authorizing the execution of this Support Agreement has stated its intent to make annual appropriations sufficient to make the Annual Payments and Additional Payments. Notwithstanding anytinng in this Support Agreement to the contrary, the C~ty's obligations to pay the cost of performing ~ts obligations under tins Support Agreement and the Agreement of Trust, ~ncluding its obhgat~ons to pay all Annual Payments and Additional Payments, shall be subject to and dependent upon appropriations being made from time to time by the City Council for such purpose; provided, however, that the C~ty Manager or other officer charged with the responsibihty for prepanng the C~ty's Annual Budget shall include in the budget for each Fiscal Year as a s~ngle appropriation the amount of all Annual Payments and estimated Additional Payments coming due during such Fiscal Year. Throughout the term of this Support Agreement, the C~ty Manager or other officer charged with the responsibihty for preparing the City's Annual Budget shall deliver to the Trustee and the Authority within 10 days after the adoption of the Annual Budget for each Fiscal Year, but not later than 10 days after the beginmng of each Fiscal Year, a certificate stating whether an amount equal to the Annual Payments and estimated Additional Payments which will come due during such Fiscal Year has been appropriated by the City Council in such budget. If any adopted Annual Budget does not include an appropriation of funds sufficient to pay both Annual Payments and estimated Additional Payments coming due for the relevant Fiscal Year, the City Council shall take a roll call vote immediately after adoption of such Annual Budget acknowledging the impact of its failure to appropriate such funds. If, by 15 days after the beginning of the Fiscal Year, the City Cotmc~l has not appropriated funds for the payment of both Annual Payments and estimated Additional Payments coming due for the then current Fiscal Year, the City Manager or other officer charged with the responsibihty for preparing the City's Annual Budget shall give written notme to the C~ty Council of the consequences of such fmlure to appropriate and request the City Councd to consider a supplemental appropnation for such purposes. ARTICLE V PREPAYMENT AND REDEMPTION Section 5.1. Prepayment and Redemption. The City shall have the option to prepay any Annual Payments at the times and xn the mounts as necessary to enable the Authority to exercise its option to cause the related Series of Bonds to be redeemed as set forth in such Bonds. Such prepayments of Annual Payments shall be made at the times and in the amounts as necessary to accomplish the optional redemption of the related Series of Bonds as set forth in such Bonds. Upon the exermse of such option, the City shall also pay as Additional Payments, the amounts necessary to pay the premium, if any, due on such Bonds on the date or dates of their redemption. The City shall direct the Authority to send to the Trustee notice of any redemption of such Series at least 15 days prior to the latest date that notice of redemption may be gtven pursuant to Section 402 of the Master Agreement of Trust, such notice to the Trustee to specify the redemption date, the pnnclpal amount of such Series to be redeemed, the premium, if any, and the section of the Agreement of Trust pursuant to which such redemption is to be made. ARTICLE VI PARTICULAR COVENANTS Section 6.1. Limitation of Liability of Members, Commissioners, etc. of Authority and City. No covenant, agreement or obligation contmned in this Support Agreement shall be deemed to be a covenant, agreement or obhgatlon of any present or future member, officer, conumssioner, employee or agent of the Authority in his individual capacity, and neither the members of the Authonty nor any officer thereof executing any Series of Bonds shall be liable personally on such Bonds or be subject to any personal hability or accountability by reason of the issuance thereofi No member, commissioner, officer, employee or agent of the Authority shall incur any personal liability with respect to any other action taken by him pursuant to tins Support Agreement or the Act or any of the transactions contemplated thereby provided that he acts in good faith. No covenant, agreement or obligation contmned herein shall be deemed to be a covenant, agreement or obligation of any present or future council member, officer, employee or agent of the City in his individual capacity, and no council member, officer, employee or agent of the City shall ~ncur any personal hability with respect to any Series of Bonds or action taken by him pursuant to this Support Agreement, provided that such council member, officer, employee or agent acts in good faith. Section 6.2. Use of Proceeds. The City shall not (a) take any action or use the proceeds of any Bonds (including failure to spend the same with due diligence) or take any other action, which would cause any Bonds (the ~nterest on which was excludable from gross income for Federal income tax purposes at the t~me of their ~ssuance) to be "arbitrage bonds" within the meamng of Section 148 of the Code, or (b) barring unforeseen circumstances, approve the use of the proceeds from the sale of any Bonds (the ~nterest on which was excludable from gross income for Federal income tax purposes at the time of their issuance) otherwise than in accordance with the Authority's "non-arbitrage" certificate gtven immediately prior to the ~ssuance of such Bonds. Section 6.3. Private Activity Covenants. The City covenants not to permit the proceeds of any Bonds (the interest on which was excludable from gross ~ncome for Federal income tax purposes at the time of their issuance) to be used ~n any manner that would result in (a) 10% or more of such proceeds or the facilities financed with such proceeds being used in a trade or business carded on by any person other than a governmental unit, as prowded in Section 141 Co) of the Code, provided that no more than 5% of such proceeds may be used in a trade or business urn'elated or dispropomonate to the City's use of the ProJect financed by such Bonds, (b) 5% or more of such proceeds being used with respect to any "output facility" (other than a facility for the furnishing of water), witlun the meaning of Section 141(b)(4) of the Code, or (c) 5% or more of such proceeds being used d~rectly or indirectly to make or finance loans to any persons other than a governmental umt, as provided m Section 141(c) of the Code; provided, however, that if the City receives an opimon of Bond Counsel that any such covenants need not be comphed with to prevent the interest on such Bonds from being ~ncludable ~n the gross income for Federal income tax purposes under existing law, the C~ty need not comply with such covenants. Section 6.4. Preservation of Tax-Exempt Status of Interest. The City shall not use any ProJect, or any port~on thereof, for any use that would adversely affect the exclusion of interest from gross income for Federal income tax purposes on any Bonds the interest on which was excludable from gross income at the time of their issuance. Without limiting the generality of the foregmng, the City covenants to either (i) take actions to prevent any such use that would cause such Bonds to be "private activity bonds," (ii) redeem any Bond whose tax status would be adversely affected by such use prior to commencement of the proposed use or (iii) take remedial action under the Code which would allow such use to be undertaken without an adverse effect on the tax status of Bonds the interest on which was excludable from gross ~ncome at the time of their issuance. Section 6.5. Maintenance of Existence of Authority. Except for the assignment of its rights under th~s Support Agreement to the Trustee pursuant to the Agreement of Trust, the Authority agrees that ~t will not assign, transfer or convey its ~nterest in tlus Support Agreement or any of the revenues to be derived therefrom. The Authonty further agrees that, until the Bonds have been paid in full, the Authority will not (a) d~ssolve or otherwise dispose of all or substantially all of its assets, (b) consolidate w~th or merge into any authority, corporation, association or other body, (c) permit any other authority, corporation, association or other body to consohdate with or merge into it, (d) act jointly w~th any other authority, corporation, association or other body (other than the C~ty and the Trustee) with respect to the transactions contemplated by this Support Agreement and the Agreement of Trust, or (e) take any action or refrain from taking any action which would (i) permit any of the foregoing to be required by operation of law or (n) which would permit ~t, or reqmre ~t by operation of law, to avoid its obligations under this Support Agreement or the Agreement of Trust or any other agreement contemplated hereby; provaded, however, that nothing contmned in this Secnon shall prevent the consolidation of the Authority with, or the merger of the Authority into, or the transfer of the xnterest of the Authority in this Support Agreement as an entirety to, any pubhc corporation whose property and income are not subject to taxation and which has the corporate authority to carry out the transactions contemplated by th~s Support Agreement and the Agreement of Trust, but only on the condition that (A) reasonable prior notme of such consolidation, merger or transfer is g~ven to the C~ty and the Trustee, and (B) upon any such consolidation, merger or transfer, the obhgation of the Authority to make due and punctual payment of the principal of and redemption premium, if any, and interest on the Bonds according to their tenor and to perform and observe all of the agreements and conditions of this Support Agreement and the Agreement of Trust shall be expressly assumed in writing by the corporation resulting from such consohdation or survaving such merger or to which the interest of the Authority in this Support Agreement shall be transferred as an entirety. ARTICLE VII EVENTS OF DEFAULT AND REMEDIES Section 7.1. Events of Default. (a) Each of the following events shall be an Event of Default: (1) Default in the due and punctual payment of an Annual Payment when the same becomes due and payable and continuation of such failure for a period of five days; or (2) Failure of the City to pay when due any other payment due under this Support Agreement, other than payments (except any payment of any redemption premium due on Bonds) under Sections 4.1Co) and (c), or to observe and perform any covenant, condition or agreement on its part to be observed or performed, winch failure shall continue for a period of 30 days after notme is given, or in the case of any such default that cannot w~th due dihgence be cured within such 30 day period but can be cured w~th~n the succeeding 60 days, failure of the City to proceed promptly to cure the same and thereafter prosecute the curing of such default with due diligence. (b) The provisions of the foregoing subparagraph (a)(2) are subject to the limitation that if by reason of force majeure the City is unable ~n whole or in part to perform any of its covenants, conditions or agreements hereunder, the C~ty shall not be deemed in default dunng the continuance of such inability. The term "force majeure" as used herein shall include w~thout limitation acts of God; strikes, lockouts or other industrial dmmrbances; acts of public enemies; orders of any kind of the government of the United States of America or the Commonwealth of Virginia or any political subdiwsion thereof or any of their departments, agenmes or officials, or any civil or military authority; Insurrections; nots; epidemics; landslides; earthquakes; fires; hurricanes; tornadoes; storms; floods; washouts; droughts; restraint of government and people; or civil disturbances. The City shall remedy with all reasonable dispatch the cause or causes 10 preventing the City from carrying out its covenants, conditions and agreements, provided that the settlement of strikes, lockouts and other industrial disturbances shall be entirely within the d~scretion of the City, and the City shall not be required to make settlement of strikes, lockouts and other industrial &smrbances by acceding to the demands of any opposing party when such course is in the judgment of the City not ~n ~ts best interests. (c) Notwithstanding anything contmned ~n th~s Section to the contrary, (1) failure by the Caty to pay when due any payment required to be made under thas Support Agreement or (2) failure by the City to observe and perform any covenant, condition or agreement on ~ts part to be observed or performed under this Support Agreement, e~ther of which results from failure of the City to appropriate moneys for such purposes, as described in Section 4.4, shall not constitute an Event of Default. Section 7.2. Remedies. Whenever any Event of Default shall have happened and is continuing, the Authority may take whatever action at law or in equity, other than to declare the entire unpaid pnncipal balance of Annual Payments to be ~mmed~ately due and payable, may appear necessary or desirable to collect the Annual Payments and Additional Payments then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of the City under th~s Support Agreement. Any amounts received by the Authority pursuant to the foregoing provisions shall be applied first to costs, then to any unpmd interest and then to repayment of pnncipal, and upon payment in full of all amounts due such excess shall be deposited in the Bond Fund and credated to the next Annual Payment to the extent such Payments have not been prod in full. This provision shall survive termination of this Support Agreement. Section 7.3. Reinstatement after Event of Default. Notwithstanding the exercise by the Authority of any remedy granted by Section 7.2, if all overdue Annual Payments, together with any interest thereon, and all Additional Payments shall have been made, then the City's default under this Support Agreement shall be waived without further action by the Authority. Upon such payment and waiver, this Support Agreement shall be fully reinstated and all Annual Payments will be due and payable in accordance with the previously determined schedule. Section 7.4. No Remedy Exclusive. No remedy conferred by this Support Agreement upon or reserved to the Authority is intended to be exclusive of any other available remedy or remedies, but every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accrmng upon any default shall impair any such right or power or shall be construed to be a wmver thereof or acqmescence therein, but any such right and power may be exercised from time to t~me and as often as may be deemed expedient. 11 Section 7.5. No Additional Waiver Implied by One Waiver. Failure by the Authority at any time to reqmre performance by the City of any promslon hereof shall in no way affect the Authority's right hereunder to enforce the same, nor shall any waiver by the Authority of any breach of any provision hereof be held to be a waiver of any succeeding breach of any such prowsion, or as a wmver of the prowsion ~tself. Section 7.6. Attorneys' Fees and Other Expenses. SubJect to the limitation in Section 4.4, the C~ty shall on demand pay to the Authority and the Trustee the reasonable fees and expenses of attomeys and other reasonable expenses ~ncurred by e~ther of them in the collection of appropriated, but unpaid, Annual Payments or Additional Payments, or the enforcement of any other obligation of the City, or its agents, upon an Event of Default. ARTICLE VIII AGREEMENT OF TRUST; AMENDMENTS; ASSIGNMENT Section 8.1. Agreement of Trust; Covenants. (a) Contemporaneously with the execution of this Support Agreement, the Authority has entered into the Agreement of Trust with the Trustee. The City shall not be obligated to take any notice of any sale, assignment, reassignment, pledge, mortgage, transfer or other disposition of any ~nterest ~n this Support Agreement by the Authority, unless such sale, assignment, reassignment, pledge, mortgage, transfer or other d~spos~t~on is undertaken in accordance with the Agreement of Trust, and the City shall have received a duplicate original counterpart of the document by which the assignment, reassigmnent, pledge, mortgage, transfer or other disposition is made, d~sclosing the name and address of the person or entity receiving such ~nterest; provided, however, that if such assignment, reassignment, pledge, mortgage, transfer or other disposition ~s made to a bank or trust company as trustee or paying agent or escrow agent for the Authority's bonds, ~t shall thereafter be sufficient that a copy of the trust instrument or agency agreement shall have been deposited with the City until the City shall have been advised that such trust ~nsmuuent or agency agreement is no longer ~n effect. (b) Subject to Section 4.4, the City covenants to take whatever action may be necessary for the Authority to comply with the Authonty's covenants under the Agreement of Trust including, without limitation, to supply all ~nformation required to be stated on Internal Revenue Service Forms 8038-G and 8038-T, or any successors to such forms. (c) The City agrees, for the benefit of the holders of the Bonds, to do and perform all acts and things contemplated in the Agreement of Trust to be done or performed by ~t. The Authority agrees that it shall not execute or permit any amendment or supplement to the Agreement of Trust which affects any right, power or authority of the C~ty under this Support Agreement or requires a revision of this Support Agreement w~thout the prior written consent of the C~ty 12 Section 8.2. Amendments. Th~s Support Agreement shall not be supplemented, amended or modified prior to the payment of all Outstanding Bonds, without the consent of the Trustee, given ~n accordance with Amcle X of the Master Agreement of Trust. Section 8.3. Assignment. S~multaneously w~th the execution of this Support Agreement, the Authority has entered ~nto the Master Agreement of Trust by which the Authority has assigned all of ~ts nghts in and to this Support Agreement (except its rights to receive payment of its fees and expenses, to receive notices and to gnve consents) to the Trustee for the benefit of the holders of the Bonds. The City (a) consents to such assignment, (b) agrees to execute and deliver such further acknowledgments, agreements and other instruments as may be reasonably requested by the Authority or the Trustee to effect such assignment, (c) agrees to make all payments due to the Authority under this Support Agreement directly to the Trustee (except the Authonty's rights to receive payment of ~ts fees and expenses, to receive notices and to give consents), subject to Section 4.4, and (d) agrees to comply fully with the terms of such assignment so long as such assignment is not inconsistent with the provisions hereof. All references in this Support Agreement to the Authonty shall include the Trustee for the benefit of the Bondholders and their successors and assigns, whether or not spemfic reference is otherwise made to the Trustee, unless the context requires otherwise. ARTICLE IX ARBITRAGE REBATE FUND Section 9.1. Arbitrage Rebate Fund. There is hereby established the City of Virgima Beach Development Authority Series 2003A Pubhc Facility Revenue Bond Arbitrage Rebate Fund to be held by the C~ty. Subject to the limitation in Section 4.4, the City shall deposit moneys in the Series 2003A Arbitrage Rebate Fund from time to t~me for payment of the rebate obligations due under the Code w~th respect to the Series 2003A Bonds (the "Rebate Amount"). The City may establish separate accounts in the Series 2003A Arbitrage Rebate Fund for such payments Section 9.2. Rebate Requirement. The City covenants that (i) all actions with respect to the Series 2003A Bonds reqmred by Section 148(t) of the Code shall be taken, (ii) it shall at ~ts sole expense make the rebate determinations required under the Code w~th respect to the Series 2003A Bonds and promptly not~fy the Trustee and the Authority of the same, together with supporting calculations, and deposit in the Series 2003A Arbitrage Rebate Fund such amounts as are shown to be due by such calculations, and (iii) it shall within forty-five (45) days after the final payment, whether upon redemption in whole or at maturity, of the Series 2003A Bonds, file with the Trustee, and, at the request of the Authority, with the Authority, a statement s~gned by the City to the effect that the City ~s then in comphance with its covenants contained in clauses 0) and (ii) of this section, together w~th supporting calculations, provided, however, that if the City shall furnish an opinion 13 of Bond Counsel to the Trustee to the effect that no further action by the City is required for such comphance with respect to the Series 2003A Bonds, the City shall not thereafter be required to deliver any such statements or calculations. Notwithstanding the foregoing, the City shall take such steps and provide such information to the Authority as may be required by the Authority for it to meet any requirements (relating to rebate or otherwise) required by the Code, the Internal Revenue Service, or any other Federal or state government agency. Section 9.3. Payment of Rebate Amount. (a) Not later than 30 days after each fifth anniversary of the date of issuance of the Series 2003A Bonds, the City shall deliver to the Trustee and, at the request of the Authority, to the Authority, a certificate (a "Rebate Amount Certificate") prepared or approved at the expense of the City by independent certified public accountants of recognized standing, setting forth the "Rebate Amount" determined to be due to the United States of America as of such fifth anniversary date under the Treasury Regulations with respect to the Series 2003A Bonds and the computation thereof, and the City shall pay to the United States of America on behalf of the Authority an amount equal to not less than 90% of the Rebate Amount set forth in such Rebate Amount Certificate. (b) Not later than 45 days after payment of the Series 2003A Bonds, the City shall deliver to the Trustee, and, at the request of the Authority, to the Authority, a Rebate Amount Certificate setting forth the Rebate Amount due to the Umted States of America upon payment of the Series 2003A Bonds, and the City shall pay to the Umted States of America on behalf of the Authority the amount, if any, by which 100% of the Rebate Amount set forth ~n such Rebate Amount Certificate exceeds the aggregate of all payments theretofore made pursuant to subsectmn (a). (c) The Authority covenants that, ~f so requested by the City, it shall execute any form required to be signed by an issuer of tax-exempt bonds in connection with the payment of any Rebate Amount (including Internal Revenue Service Form 8038-T) based on ~nformation supplied to the Authority by the City. The City shall supply all information required to be stated on such form and shall prepare such form. Except for the execution and delivery of such form upon timely presentation by the C~ty, the Authority shall have no responsibihty for such form or the reformation stated thereon. (d) The Trustee and the Authority shall be fully protected in acting on any Rebate Amount determination made by the City at any time pursuant to this Section or contmned in any Rebate Amount Certificate and shall not be hable or responsible in any manner to any person for so acting, notwithstanding any error in any such determination. Section 9.4. Reports by Trustee. The Trustee shall provide the City within 10 days after each December 1 and w~th~n 10 days alter the final payment of the Series 2003A Bonds w~th account transaction statements showing ~nformation with respect to earnings of amounts held under the First Supplemental Agreement of Trust as may be requested by the City in order to comply w~th the provisions of this Amcle. 14 Section 10.5. Successors and Assigns. This Support Agreement shall be binding upon, ~nure to the benefit of and be enforceable by the parties and their respective successors and assigns. Section 10.6. Counterparts. This Support Agreement may be executed in any number of counterparts, each of which shall be an original, all of which together shall constitute but one and the same ~nstrument. Section 10.7. Entire Agreement. The Basic Agreements express the entire understanding and all agreements between the parties and may not be modified except in writing signed by the parties. Section 10.8. Governing Law. This Support Agreement shall be governed by and construed in accordance w~th the laws of the Commonwealth of Virginia. 16 IN WITNESS WHEREOF, the parties have caused this Support Agreement to be duly executed and effective as of the first day of September, 2003, by their duly authorized representatives. CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY By: Chairman CITY OF VIRGINIA BEACH, VIRGINIA By: Title: Seen and agreed to: WACHOVIA BANK, NATIONAL ASSOCIATION, as Trustee By: Title: 17 RECEIPT Receipt of the foregoing original counterpart of the Support Agreement dated as of September 1, 2003, between the City of Virgima Beach Development Authority and the C~ty of Virginia Beach, V~rgnma, is hereby acknowledged WACHOVIA BANK, NATIONAL ASSOCIATION, as Trustee By: T~tle: 18 Due Date SCHEDULE OF PAYMENTS Principa. l Interest EXHIBIT A Total Payment A-1 EXHIBIT B DESCRIPTION OF SERIES 2003A PROJECTS The following sets forth bnef descriptions of the Projects to be financed in whole or ~n part w~th the proceeds of the Series 2003A Bonds: Conventton Center Replacement - This project provides for the replacement and relocation of the existing pavilion convention center on the same site. It will provide for approximately 150,000 square feet of exhibit hall, 25,000 square feet of meeting rooms and 32,000 square feet of ballroom space. Thtrty-First Street Parlang Garage - This project ~s for the construction of a 1,000 space parkang garage, 26,000 square feet of retml space and a pedestrian bridge from the garage to a proposed hotel to be developed on the oceanfront. Town Center Garage Block 10 - This project ~s for the construction of an approximate 840 space parking garage located m the Town Center district of the City. Town Center Garage Block 12 - This project is for the construction of an approximate 305 space parkang garage located in the Town Center d~stnct of the City. Open Space &te Acqutsttton- This project provides for the acquisition of land for preservation and/or recreational purposes. Vtrgtma Martne Sctence Museum Parlang - Tins project will provide a 500 space parking lot across the road from the museum. Emergency Commumcattons Operation Center - This project is for the design and construction of the new Emergency Communications Center and Emergency Operation Center, to be located in the Municipal Center, on the north side of the intersection of Princess Anne Road and James Madison Boulevard, across the street from the Public Safety Building. Revenue Assessment and Collectzon System - This project provides for a comprehensive, fully integrated tax system to replace the computer systems currently used to support tax revenue assessment and collecUon. Electromc Ballot System - Tins project is for the purchase of 800 new voter machines to provide an electronic ballot station. Pawlion Theater Replacement - This project replaces the current 1,000 seat Pavilion Theater with a new theater at the Town Center and includes parking. Ctty/School Human Resource Payroll System - This project replaces the City's ten year old payroll system with a new information system utilizing current network infrastructure. A-1 Communtcations Infrastructure Replacement- Tlus project will replace various components of the pubhc safety commtmicat~ons ~nfrastmcmre related to equipment associated with receiving, dispatching, transponding and answenng public safety calls Ftre Apparatus Equipment - Th~s project funds replacement of heavy equipment fire apparatus that costs over $50,000 and have a useful life of over ten years. A-2 22764 000254 RICHMOND 1035085v3 PRELIMINARY OFFICIAL STATEMENT DATED , 2003 New Issue Ratings: Fitch: .... __ Book-Entry Only Moody's .....__ S&P: "AA" (See "RATINGS herein") Th~s Official Statement has been prepared by the C~ty of VIrgInia Beach, V~rg~ma (the "C~ty"), on behalf of the C~y of Virglma Beach Development Author~j (the "Authority") to prowde mformabon on the Series 2003A Bonds, the secur~j therefor, the C~ty, the projects being financed w~th the proceeds of the Series 2003A Bonds and other relevant mformabon Selected ~nformabon ~s presented on th~s cover page for the convemence of the user To make an ~nformed decision regarding the Series 2003A Bonds, a prospective investor should read th~s Official Statement m ~s enbrety CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY $165,000,000' PUBLIC FACILITY REVENUE BONDS, SERIES 2003A Dated Date' September 1, 2003 Due. December 1, as shown on the inside cover Interest Rates/Yields See inside cover Security THE SERIES 2003A BONDS WILL BE LIMITED OBLIGATIONS OF THE AUTHORITY, PAYABLE SOLELY FROM CERTAIN PAYMENTS TO BE MADE BY THE CITY, PURSUANT TO A SUPPORT AGREEMENT DATED AS OF SEPTEMBER 1, 2003 (THE "SUPPORT AGREEMENT"), BETWEEN THE CITY AND THE AUTHORITY, FROM CERTAIN FUNDS AND THE INVESTMENT INCOME THEREFROM HELD UNDER THE AGREEMENT OF TRUST, AS DESCRIBED BELOW THE OBLIGATION OF THE CITY TO MAKE PAYMENTS UNDER THE SUPPORT AGREEMENT WILL BE SUBJECT TO ANNUAL APPROPRIATIONS BY THE CITY THE SUPPORT AGREEMENT, THE SERIES 2003A BONDS AND THE PREMIUM, IF ANY, AND INTEREST THEREON SHALL NOT BE DEEMED TO CONSTITUTE A GENERAL OBLIGATION DEBT OR A PLEDGE OF THE FAITH AND CREDIT OF THE COMMONWEALTH OF VIRGINIA OR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE AUTHORITY AND THE CITY NEITHER THE COMMONWEALTH OF VIRGINIA NOR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE AUTHORITY AND THE CITY, SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF OR PREMIUM, IF ANY, OR INTEREST ON THE SERIES 2003A BONDS OR OTHER COSTS INCIDENT THERETO EXCEPT FROM THE REVENUES AND RECEIPTS PLEDGED AND ASSIGNED THEREFOR, AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE COMMONWEALTH OF VIRGINIA, OR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE AUTHORITY AND THE CITY, IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR PREMIUM, IF ANY, OR INTEREST ON THE SERIES 2003A BONDS OR OTHER COSTS INCIDENT THERETO THE AUTHORITY HAS NO TAXING POWER. See "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2003A BONDS" Tax Exemption Interest on the Series 2003A Bonds (1) w~ll not be ~ncluded m gross ~ncome for federal ~ncome tax purposes, (2) wdl not be an ~tem of tax preference for purposes of the federal altemabve m~mmum tax imposed on ~nd~wduals and corporabons and (3) w~ll be exempt from ,ncome taxabon by the Commonwealth of V~rgm~a Such interest on the Series 2003A Bonds may be ~ncluded m the calculabon of a corporation's alternative mlmmum income tax, and a holder may be subject to other federal ~ncome tax consequences See "TAX EXEMPTION" and Appendix C Issued Pursuant To Trustee The Series 2003A Bonds wdl be ~ssued pursuant to an Agreement of Trust dated as of September 1, 2003, as supplemented by a First Supplemental Agreement of Trust dated as of September 1, 2003, between the Authority and , as Trustee Purpose Interest Payment Dates The proceeds of the Series 2003A Bonds wdl be used to finance various capital improvements ~n the C~ty of V~rglma Beach, V~rgm~a See "THE PROJECTS." June I and December 1, commencing June 1, 2004 Redemption The Series 2003A Bonds are subject to redempbon pnor to maturity See "DESCRIPTION OF SERIES 2003A BONDS - Redemption." Denominations Regular Record Date Closing/Dehvery Date Registration Bond Counsel Cond,flons Affecting Issuance $5,000 and ~ntegral multiples thereof May 15 and November 15 On or about ,2003 Full book-entry only, The Depository Trust Company, New York, New York See Appendix E Hunton & Wdhams LLP, R~chmond, V~rg~ma The Series 2003A Bonds are offered when, as and ~f issued, subject to, among other condrbons, the legal op~mon of Hunton & Wilhams LLP Dated ,2003 Prehm,nary, subject to change H&W LLP draft of 8/14/03 City of Virginia Beach Development Authority $165,000,000' Public Facility Revenue Bonds, Series 2003A Dated: September 1, 2003 Due: December 1, as shown below Plus accrued interest from September 1, 2003 MATURITIES, AMOUNTS, INTEREST RATES, YIELDS (OR PRICES) AND CUSIP NUMBERS Maturity' Principal Amount* Interest Rate Price or Yield CUSIP Number 2004 $3,865,000 2005 4,595,000 2006 5,945,000 2007 6,255,000 2008 6,570,000 2009 6,225,000 2010 6,540,000 2011 6,880,000 2012 7,235,000 2013 7,600,000 2014 8,010,000 2015 8,470,000 2016 8,950,000 2017 9,450,000 2018 9,965,000 2019 10,505,000 2020 11,080,000 2021 11,665,000 2022 12,285,000 2023 12,910,000 ' Prehm~nary, subject to change THE SERIES 2003A BONDS ARE EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SERIES 2003A BONDS ARE ALSO EXEMPT FROM REGISTRATION UNDER THE SECURITIES LAWS OF THE COMMONWEALTH OF VIRGINIA NO DEALER, BROKER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION, OTHER THAN THOSE CONTAINED IN THIS OFFICIAL STATEMENT, AND IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE AUTHORITY OR THE CITY THIS OFFICIAL STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF THE SERIES 2003A BONDS BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH OFFER, SOLICITATION OR SALE. THIS OFFICIAL STATEMENT IS NOT TO BE CONSTRUED AS A CONTRACT OR AGREEMENT BETWEEN THE CITY, THE AUTHORITY OR THE PURCHASERS OR HOLDERS OF ANY OF THE SERIES 2003A BONDS THE INFORMATION HEREIN IS SUBJECT TO CHANGE WITHOUT NOTICE AND NEITHER THE DELIVERY OF THIS OFFICIAL STATEMENT NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CITY OR THE AUTHORITY SINCE THE DATE HEREOF. TABLE OF CONTENTS Pa~e INTRODUCTION ................................... 1 DESCRIPTION OF SERIES 2003A BONDS ......................... 1 SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2003A BONDS ....... 2 THE FINANCING DOCUMENTS ...................................................... 4 THE AUTHORITY ............................... 10 THE CITY .............................................................. 10 THE PROJECTS .................................................. 10 ESTIMATED SOURCES AND USES OF FUNDS .................. 12 INVESTMENT CONSIDERATIONS .................... 12 LITIGATION .......................................... 14 APPROVAL OF LEGAL MATTERS ............................. 14 TAX EXEMPTION ...................................... 14 FINANCIAL ADVISORS ............................................ 16 INDEPENDENT AUDITORS ...................................... 16 RATINGS ................................................. 16 SALE AT COMPETITIVE BIDDING .................................. 16 LEGALITY OF THE SERIES 2003A BONDS FOR INVESTMENT ................. 17 CONTINUING DISCLOSURE ........................................... 17 MISCELLANEOUS .......................................... 18 APPENDIX A APPENDIX B APPENDIX C APPENDIX D APPENDIX E APPENDIX F The City of Virginia Beach, V~rg~ma Audited F~nanclal Statements of the C~ty for F~scal Year ended June 30, 2002 Proposed Form of Bond Counsel Op~mon Form of Continuing Disclosure Agreement Informabon Regarding The Depository Trust Company and its Book-Entry System Official Notice of Sale and B~d Form CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY Robert G Jones, Chair Donald V Jelhg, V~ce-Chalr Max C. Bartholomew, Jr Teresa H Carnngton Douglas D Elhs Robert E Fentress Robert F Hagans, Jr Page G Lea S Paul M~chaels Jerry M~ller Ehzabeth Twohy CITY OF VIRGINIA BEACH THE CITY COUNCIL Meyera E Oberndorf, Mayor Lou~s R Jones, V/ce Mayor Harry W. D~ezel Margaret L. Eure R~chard Maddox Reba S. McClanan J~m Reeve Peter W Schm~dt Ronald John "Ron" A V~llanueva Rosemary W~lson James L Wood CERTAIN CITY OFFICIALS James K Spore, City Manager Leshe L. Lilley, C~ty Attorney Ruth Hodges Smith, City Clerk Steven T Thompson, ChlefF~nanc~al Officer Patnc~a A Philhps, D/rector of Flnance John T Atkmson, C~ty Treasurer BOND COUNSEL Hunton & Wllhams LLP R~verfront Plaza, East Tower 951 East Byrd Street R~chmond, Virginia 23219 FINANCIAL ADVISORS Govemment F~nance Associates, Inc. 590 Madison Avenue, 21st Floor New York, New York 10022 ARD Government Finance Group 1601 N Kent Street, Suite 800 Arhngton, V~rg~nla 22209 OFFICIAL STATEMENT CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY $165,000,000' PUBLIC FACILITY REVENUE BONDS, SERIES 2003A INTRODUCTION The purpose of th~s Official Statement, ~nclud~ng the cover pages and appendices, ~s to set forth certain reformation in connection w~th the issuance and sale by the C~ty of Virg~n~a Beach Development Authority (the "Authority") of ~ts $165,000,000 Public Fac~hty Revenue Bonds, Ser~es 2003A (the "Ser~es 2003A Bonds") The Senes 2003A Bonds w~ll be offered for sale through electronic b~ddlng on September 9, 2003 An Official Nobce of Sale and B~d Form dated ,2003, relating to the Series 2003A Bonds and describing the electronic b~dd~ng process, ~s ~ncluded herein as Appendix F The Series 2003A Bonds w~ll be ~ssued pursuant to Chapter 643 of the Acts of Assembly of 1964, as amended (the "Act") and an Agreement of Trust dated as of September 1, 2003 (the "Master Agreement of Trust"), as supplemented by a First Supplemental Agreement of Trust dated as of September 1, 2003 (the "F~rst Supplemental Agreement of Trust" and, together with the Master Agreement of Trust, the "Agreement of Trust"), between the Authority and Wachowa Bank, Richmond, V~rg~n~a, as trustee (the "Trustee") Pursuant to the terms of the Agreement of Trust, the Authority has determined to ~ssue from bme to bme public facility revenue bonds or notes and use the proceeds thereof to finance certain "authority fac~hbes" (as defined in the Act), as requested by the C~ty of V~rglnla Beach, Virginia (the "C~ty"). The Authority and the City have entered into a Support Agreement dated as of September 1, 2003 (the "Support Agreement"), pursuant to which the C~ty has requested the Authority to undertake the acqu~s~bon and development of the Projects, as described below, and to finance the Projects w~th the proceeds of the Series 2003A Bonds, and the City has agreed to support such requests by paying to or on behalf of the Authority, subject to annual appropriation by the C~ty Council of the City (the "City Council"), certain amounts sufficient to pay the principal of and premium, if any, and interest due on the Series 2003A Bonds. The proceeds of the Series 2003A Bonds w~ll be used to finance the acqu~sibon and construction of various capital improvements in the City of Virginia Beach, Virginia (collectively, the "Projects"), and to pay certain costs of ~ssuance of the Series 2003A Bonds See the secbon "THE PROJECTS." Cap~tahzed terms not otherwise defined will have the meanings assigned such terms ~n the secbon here~n "THE FINANCING DOCUMENTS -- Definitions." DESCRIPTION OF SERIES 2003A BONDS General The Series 2003A Bonds are dated September 1, 2003, and will mature on December 1 m the years and ~n the amounts set forth on the ~nslde cover Interest on the Series 2003A Bonds will be payable on each June I and December 1, commencing June 1, 2004, until the earher of maturity or redempbon, at the rates per year set forth on the ~ns~de cover Interest will be calculated on the basis of a 360-day year of twelve 30-day months and will be payable by check or draft ma~led to the registered holders as of the fifteenth day of the month preceding each ~nterest payment date, provided that as long as the Ser~es 2003A Bonds are ~n book-entry only form payments of pnnc~pal of and premium, ~f any, and ' PrelEmlnary, subject to change. ~nterest on the Series 2003A Bonds w~ll be made by w~re transfer to The Depository Trust Company, New York, New York ("DTC"), or such other secunbes depository as may be appointed The Series 2003A Bonds w~ll be issued ~n book-entry form only, registered in the name of Cede & Co, as nominee for DTC. Ind~wdual purchases of beneficial ownership ~n each series of the Series 2003A Bonds will be made in principal amounts of $5,000 and integral multiples thereof. Individual purchasers of beneficial ownership m the Series 2003A Bonds ("Beneficial Owners") w~ll not receive physical dehvery of certificates representing their interest ~n the Series 2003A Bonds Transfer of the Series 2003A Bonds and payment of pnnc~pal of and premium, ~f any, and ~nterest on the Series 2003A Bonds will be effected as described ~n Appendix E. If the book-entry system ~s d~sconbnued, replacement bond or note certificates w~ll be delivered as described ~n the Agreement of Trust, and the Beneficial Owners w~ll become the registered holders of the Series 2003A Bonds. Redemption Optional Redemption. The Series 2003A Bonds that mature on or before December 1, 2013, are not subject to optional redempbon prior to matunty. The Series 2003A Bonds that mature on or after December 1, 2014, may be redeemed by the Authority, at the d~rect~on of the City, prior to their stated dates of maturity, at any time on or after December 1, 2013, in whole or ~n part in ~ntegral mulbples of $5,000, at the redempbon price of 100% of the pnnclpal amount of the Series 2003A Bonds to be redeemed plus ~nterest accrued to the redemption date Effect of Redemption After the date on which any Series 2003A Bonds have been called for redempbon, and sufficient funds for the payment of the pnnclpal of and premium, ~f any, and unpaid interest accrued on such Senes 2003A Bonds to the date fixed for redempbon have been prowded, ~nterest on such Series 2003A Bonds will cease to accrue, and their registered holder will be enbtled to receive payment only of the pnnc~pal of and premium, if any, and unpaid ~nterest accrued to the redempbon date on such Series 2003A Bonds Notice of Redemption Nobce of redempbon w~ll be g~ven by the Trustee by facsimile, registered or certified ma~l or overnight express dehvery not less than 30 and not more than 60 days before the redemption date to DTC, or, ~f DTC is no longer serving as secunbes depository for the Series 2003A Bonds, to the substitute secunbes depository, or, ~f no securities depository then exists, to the respecbve registered holders of the Series 2003A Bonds to be redeemed at their addresses as shown on the registration books maintained by the Trustee Such nobce may reference certain cond~bons to the redempbon So long as DTC or ~ts nominee is registered owner of the Series 2003A Bonds, the Trustee w~ll not be responsible for maihng notices of redempbon to the Beneficial Owners See Appendix E. Selection of Series 2003A Bonds for Redemption. If less than all of the Series 2003A Bonds are called for opbonal redempbon, the series and matunbes of the Series 2003A Bonds to be redeemed shall be selected by the Authority, upon the d~recbon of the C~ty. If less than all of the Series 2003A Bonds of a parbcular maturity are to be redeemed, the Series 2003A Bonds to be redeemed shall be selected by DTC or any successor secunbes depository pursuant to ~ts rules and procedures or, ~f the book-entry system ~s d~sconbnued, shall be selected by the Trustee ~n such manner as the Trustee ~n ~ts d~scret~on may determine. SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2003A BONDS Security for the Series 2003A Bonds The Series 2003A Bonds are hm~ted obhgabons of the Authority and are payable solely from and secured by a pledge of the revenues and receipts derived from the Support Agreement, certain funds estabhshed under the Agreement of Trust and the ~nvestment income therefrom The obligations of the City to make payments under the Support Agreement are subject to annual appropriation by the City Council. The City Council has no legal obligation to make any such appropriations. Except for funds established under the Agreement of Trust, neither the Projects nor any other asset is being leased, mortgaged or pledged as security for payments due under the Support Agreement or the principal of and premium, if any, and interest on the Series 2003A Bonds. See the section "INVESTMENT CONSIDERATIONS." THE SERIES 2003A BONDS AND THE PREMIUM, IF ANY, AND INTEREST THEREON SHALL NOT BE DEEMED TO CONSTITUTE A GENERAL OBLIGATION DEBT OR A PLEDGE OF THE FAITH AND CREDIT OF THE COMMONWEALTH OF VIRGINIA OR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE AUTHORITY AND THE CITY NEITHER THE COMMONWEALTH OF VIRGINIA NOR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE AUTHORITY AND THE CITY, SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF OR PREMIUM, IF ANY, OR INTEREST ON THE SERIES 2003A BONDS OR OTHER COSTS INCIDENT THERETO EXCEPT FROM THE REVENUES AND RECEIPTS PLEDGED AND ASSIGNED THEREFOR, AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE COMMONWEALTH OF VIRGINIA, OR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE AUTHORITY AND THE CITY, IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR PREMIUM, IF ANY, OR INTEREST ON THE SERIES 2003A BONDS OR OTHER COSTS INCIDENT THERETO THE AUTHORITY HAS NO TAXING POWER The Support Agreement The Authority ~s ~ssulng the Series 2003A Bonds for the purpose of providing funds to finance the costs of the Projects and the costs of ~ssuance of the Senes 2003A Bonds The Support Agreement prowdes for the C~ty to make payments on behalf of the Authonty that will be sufficient to pay the pnnc~pal of and premium, ~ any, and interest on the Senes 2003A Bonds as the same shall become due ~n accordance w~th their terms and prows~ons and the terms of the Agreement of Trust. The obligation of the City to make payments under the Support Agreement constitutes a current expense of the City, subject to annual appropriation by the City Council. The City will not be liable for any such payments under the Support Agreement unless and until funds have been appropriated by the City Council for payment and then only to the extent of such appropriation. The Support Agreement requires the C~ty to pay to the Trustee, as assignee of the Authority, Annual Payments (as defined herein under "THE FINANCING DOCUMENTS -- Definitions") in amounts and on or before dates calculated to be sufficient to pay pnnc~pal of and interest when due on the Senes 2003A Bonds and any additional bonds and notes ~ssued under the Agreement of Trust. The Support Agreement also requires the City to pay certain Add~honal Payments (as defined here~n under "THE FINANCING DOCUMENTS -- Definitions") Other prowslons of the Support Agreement are summanzed ~n the section herein "THE FINANCING DOCUMENTS -- The Support Agreement." Bond Fund; Project Fund Under the Agreement of Trust, the Authonty pledges to the Trustee all right, btle and ~nterest to the Support Agreement, including the Annual Payments made by the City, but excluding certain rights to receive payment of the Authonty's fees and expenses and to receive nobces thereunder Such payments under the Support Agreement, along w~th the money in the Senes 2003A Project Account and the Bond Fund, are pledged to the payment of pnnc~pal of and premium, ~f any, and interest on the Senes 2003A Bonds. The Agreement of Trust prowdes that the Trustee will deposit in the Bond Fund all Annual Payments received by the Trustee from the C~ty under the Support Agreement together with any amounts transferred from the Series 2003A Project Account From the Annual Payments, the Trustee will deposit ~n the subaccount ~n the Interest Account an amount equal to the ~nterest due and payable on the next interest payment date for the Senes 2003A Bonds and w~ll deposit ~n the subaccount established for the Series 2003A Bonds in the Principal Account an amount equal to the pnnc~pal due and payable on the next principal payment date for the Series 2003A Bonds The Agreement of Trust prowdes that the Trustee w~ll deposit ~n the Series 2003A Project Account the proceeds of the Ser~es 2003A Bonds, except pre-~ssuance accrued interest The Trustee w~ll use money ~n the Senes 2003A Project Account solely to pay the costs of the Projects and to pay certain costs of ~ssu~ng the Senes 2003A Bonds. The Trustee w~ll make payments from the Ser~es 2003A Project Account upon receipt of requ~s~bons s~gned on behalf of the C~ty providing required ~nformabon w~th respect to the use of the amounts being requ~s~boned It ~s expected that all amounts in the Ser~es 2003A Project Account w~ll be expended on costs of the Projects and the costs of issu~ng the Ser~es 2003A Bonds by September 30, 2006 Additional Bonds Additional bonds or notes secured on an equal and ratable basis w~th the Ser~es 2003A Bonds may be ~ssued by the Authority from bme to bme under a Supplemental Agreement of Trust and an amendment to the Support Agreement provid~ng for mod~ficabon of the Annual Payments to provide for Annual Payments sufficient to pay principal of and ~nterest on all obhgat~ons outstanding under the Agreement of Trust THE FINANCING DOCUMENTS The following ~s a summary of certain prows~ons of the Agreement of Trust and the Support Agreement Th~s summary does not purport to be comprehensive or definitive and is qualified by references to such documents ~n their enbrety, cop~es of which may be obtained at the office of the City Manager. All cap~tahzed terms have the meamngs set forth ~n the Agreement of Trust or the Support Agreement In addition to defined terms appearing elsewhere in this Official Statement, the definitions of certain key terms used ~n the Agreement of Trust and the Support Agreement are also set forth below. Definitions "Add~bonal Payments" means payments made by the City pursuant to the Support Agreement other than Annual Payments "Annual Payments" means the payments made by the C~ty under the Support Agreement which payments are calculated to correspond ~n amount to the payments of pnnc~pal and interest due on the Bonds and any additional obligations outstanding "Bond" or "Bonds" means any bonds, notes or other obhgabons, ~nclud~ng any notes or other obhgabons ~ssued ~n anbcipabon of bonds, notes, or other obhgat~ons as the same shall be issued from t~me to bme pursuant to Article III of the Master Agreement of Trust, including the Series 2003A Bonds. "Bond Counsel" means an attorney or a firm of attorneys nationally recognized on the subject of mumcipal bonds and reasonably acceptable to the Trustee "Bond Fund" means the Bond Fund estabhshed ~n the Master Agreement of Trust "Bond Payment Date" means the date on wh,ch any payment of pnnc~pal of (whether at maturity or pursuant to mandatory s~nk~ng fund redempbon) or interest on any Bonds ~s due "Bus~ness Day" means a day on which banking business ~s transacted, but not ~nclud~ng Saturday, Sunday or legal hohday, or any day which banking ~nstltutlons are authorized by law to close in the city in which the Trustee has its pnnc~pal corporate trust office "City Councd" means the Council of the C~ty of Vlrglma Beach, V~rg~nla, as the govermng body of the City "Code" means the Internal Revenue Code of 1986, as amended, ~ncludlng apphcable regulations, rulings and revenue procedures promulgated or apphcable thereunder "F~scal Year" means the twelve-month period beg~nmng July 1 of one year end and ending on June 30 of the following year, or such other F~scal Year of twelve months as may be selected by the City "F~tch" means F~tch Ratings or its successors "Government Certificates" means certificates representing proportionate ownership of Government Obhgat~ons, which Government Obligations are held by a bank or trust company orgamzed under the laws of the Umted States of America or any of ~ts states in the capacity of custodian of such certificates "Government Obhgatlons" means (a) bonds, notes and other direct obligations of the United States of America, (b) securities unconditionally guaranteed as to the hmely payment of principal, ff applicable, and interest by the Umted States of America or (c) bonds, notes and other obhgatlons ~ssued or guaranteed as to the t~mely payment of pnnc~pal and ~nterest by the Rural Ubhtles Service (certificates of beneficial ownership), Federal Housing Adm~mstratlon (debentures), General Services Adm~mstrat~on (participation certificates), U.S. Manbme Adm~mstrat~on (guaranteed Title XI financing), U.S Department of Housing and Urban Development (project notes and local authority bonds), provided such obhgat~ons are backed by the full faith and credit of the Umted States of America. Stripped secuntles are permitted only ~f stripped by the agency itself Government Obhgahons may be held d~rectly by the Trustee or ~n the form of securities of any open-end or closed-end management type investment company or ~nvestment trust registered under the Investment Company Act of 1940, prowded that the portfolio of such investment company or ~nvestment trust is hmlted to Government Obhgabons "Moody's" means Moody's Investors Service or ~ts successors. "Project Fund" means the Project Fund estabhshed ~n the Master Agreement of Trust "Series" or "Series of Bonds" means a separate series of Bonds issued under the Master Agreement of Trust and a Supplemental Agreement of Trust The Series 2003A Bonds will constitute a Series of Bonds. "Senes 2003A Bonds" means the Authonty's $165,000,000' Pubhc Fac~hty Revenue Bonds, Series 2003A, authorized to be ~ssued pursuant to the First Supplemental Agreement of Trust "Series 2003A Project Account" means the Series 2003A Project Account established ~n the F~rst Supplemental Agreement of Trust and maintained within the Project Fund "S&P" means Standard & Poor's Ratings Services, a diwslon of The McGraw-Hall Compames, Inc, or ,ts successors "Supplemental Agreement of Trust" means any Supplemental Agreement of Trust supplementing, amending or modifying the prows~ons of the Master Agreement of Trust entered into by the Authority and the Trustee pursuant to Article X of the Master Agreement of Trust Prehm~nary, subject to change "Supplemental Support Agreement" means any Supplemental Support Agreement supplementing, amending or moddy~ng the provisions of the Support Agreement entered into by the Authority and the C~ty pursuant to the Master Agreement of Trust The Agreement of Trust Establishment of Funds and Accounts. The following funds and accounts are established and ut~hzed under the Agreement of Trust (1) Project Fund, ~n which there ~s estabhshed w~th the C~ty the Series 2003A Project Account, and (2) Bond Fund, ~n wh,ch there are estabhshed w~th the Trustee a separate Interest Account and Pnnc~pal Account The Agreement of Trust provides that separate subaccounts wdl be estabhshed for each ser~es of Bonds issued under the Agreement of Trust. Pledge of Payments and Funds All payments received by the Trustee under the Agreement of Trust (except certain payments to the Trustee for its fees and expenses) and all money in the Project Fund and the Bond Fund are pledged to the payment of the pnnc~pal of and ~nterest on the Bonds, subject only to the right of the Authority to apply them to other purposes as provided in the Agreement of Trust. The hen and trust created by the Agreement of Trust ~s for the equal and ratable benefit of the holders of the Series 2003A Bonds and any add~honal Bonds that may be issued under the Agreement of Trust, provided that moneys ~n any account or subaccount of the Bond Fund relabng to a particular Senes of Bonds shall secure only such Bonds, and that moneys ~n any account or subaccount of the Project Fund relating to a particular Series of Bonds shall secure only such Bonds. Bond Fund The Trustee w~ll deposit ~n the Bond Fund ~nstallments of all Annual Payments received by the Trustee from the C~ty, together w~th other amounts transferred from accounts ~n the Project Fund pursuant to the Support Agreement or the Agreement of Trust The Trustee w~ll deposit each installment and amount (a) to the apphcable subaccount established in the Interest Account an amount equal to the interest due and payable on the next Bond Payment Date for the applicable Series of Bonds, and (b) to the applicable subaccount established in the Principal Account an amount equal to the pnnc~pal due and payable on the next Bond Payment Date for the apphcable Series of Bonds, whether at maturity or pursuant to redempbon. The Trustee w~ll withdraw from the respecbve subaccounts w~thm the Interest Account on each Bond Payment Date, amounts equal to the amounts of ~nterest due with respect to the Bonds on such Bond Payment Date, and wdl cause the same to be applied to the payment of interest due on such Bond Payment Date The Trustee will w~thdraw from the respective subaccounts w~th~n the Pnnc~pal Account on each Bond Payment Date, amounts equal to the amounts of pnnc~pal due w~th respect to the Bonds on such Bond Payment Date, and will cause the same to be apphed to the payment of pnnc~pal due on such Bond Payment Date. In the event there are insuffic~ent moneys ~n the Interest Account or the Pnnc~pal Account on any Bond Payment Date to pay ~nterest and pnnc~pal due on such Bond Payment Date, the Trustee wdl transfer any excess amounts on deposit ~n the Interest Account or the Pnnc~pal Account, as apphcable, to the other Account ~n which there are ~nsuffic~ent moneys, being m~ndful of the provisos ~n the secbon "Parity of Bonds" below The Trustee will pay from the Bond Fund when due the pnnc~pal of and ~nterest on the Bonds then outstanding and wdl redeem or purchase Bonds ~n accordance w~th the redempbon provisions of the Bonds and the Agreement of Trust. Series 2003A Project Account The C~ty w~ll use money in the Series 2003A Project Account solely to pay all or a portion of the cost of the Projects The City will make payments from the Series 2003A Project Account after fihng among ~ts records requisitions providing required mformabon with respect to the use of the amounts being requls,t~oned Any balance remaining in the Series 2003A Project Account after payment of the cost of the Projects w~ll be used to pay pnnc~pal of the Series 2003A Bonds, to purchase Series 2003A Bonds ~n the open market or to pay all or any port,on of the cost of any other project designated by the City and approved by Bond Counsel Parity of Bonds. Each Series of Bonds w~ll be issued pursuant to a Supplemental Agreement of Trust and will be equally and ratably secured under the Agreement of Trust, without preference, pnonty or d~sbnctlon, prowded, that the moneys ~n an account of the Bond Fund or the Project Fund wdl secure only the applicable Series of Bonds to which such account relates, and prowded further, that any Series of Bonds may have other security pledged to its payment In connection w~th the ~ssuance of each Series of Bonds, the Trustee may create additional accounts and subaccounts w~th~n any fund or account estabhshed by the Master Agreement of Trust Investments. Any money held under the Agreement of Trust may be ~nvested ~n obllgabons or securities that are permitted for the investment of public funds under the Investment of Pubhc Funds Act (Chapter 18, Title 2 1 of the Virginia Code), or any successor provision of law applicable to such investments. Any investments wdl be held by or under the control of the Trustee or the C~ty and whde so held wdl be deemed a part of the fund in which such money was ong~nally held. The earmngs accruing on such investments, including any profit realized, wdl be credited to such funds, except as otherwise prowded in the Agreement of Trust, and any loss resulting from such investments will be charged to such funds The Trustee w~ll sell and reduce to cash a sufficient amount of such ~nvestments whenever the cash balance in any fund is ~nsufficlent for its purposes Events of Default and Remedies Each of the follow~ng is an Event of Default under the Agreement of Trust' (1) default in the payment of interest on any Bond when due, (2) default in the payment of pnnc~pal or premium, if any, of any Bond when due, (3) default in the observance or performance of any other covenant, condlbon or agreement on the part of the Authonty under the Agreement of Trust or the Bonds, subject to certain rights of the Authonty to nobce and an opportumty to cure, and (4) any event of default under the Support Agreement Remedies; Rights of Bondholders Upon the occurrence and conbnuat~on of an Event of Default, the Trustee may (and ~f requested by the holders of not less than 25% ~n aggregate pnnclpal amount of Bonds outstanding and if mdemmfied in accordance with prevailing industry standards will) proceed to protect and enforce the rights of the holders of the Bonds by suit, action or proceeding at law or ~n equity, ~ncludmg an action for specific performance of any covenant or agreement contained in the Agreement of Trust, prowded, that the Trustee wdl have no right or authority to declare the entire unpaid principal of and interest on the Bonds due and payable All remedies under the Agreement of Trust are cumulabve. Other than the remedies described above, no holder of any Bond wdl have any right to ~nsbtute any action, su~t or proceeding at law or m equity for the enforcement of the Agreement of Trust, the execution of any of its trusts or any other remedy under it, unless (1) an Event of Default (as defined in the Agreement of Trust) has occurred and ~s continuing and the Trustee has notice of it; (2) the holders of 25% ~n aggregate pnnc~pal amount of Bonds then outstanding have made written request to the Trustee, and offered it reasonable opportunity either to proceed to exercise the powers granted by the Agreement of Trust, to institute such acbon, suit or proceeding in ~ts own name, (3) the Trustee has been indemnified as provided by the Agreement of Trust, (4) the Trustee has failed or refused w~th~n a reasonable t~me to comply with such request, (5) no dlrecbon inconsistent with such request has been given to the Trustee by the holders of a majority ~n principal amount of outstanding Bonds; and (6) notice of such acbon, su~t or proceeding ~s g~ven to the Trustee Notwithstanding any other provision to the contrary, the holders of a majority m aggregate principal amount of Bonds outstanding, upon compliance w~th the Agreement of Trust's requirements as to indemmficat~on of the Trustee, wdl have the nght to direct all proceedings to be taken by the Trustee Subject to I~m~tatlons set forth ~n the Agreement of Trust, the Trustee may in its d~screbon, waive any Event of Default under the Agreement of Trust or any action taken pursuant to such Event of Default and w~ll do so on the request of the holders of a majority ~n aggregate pnnc~pal amount of Bonds then outstanding However, no waiver wdl extend to any subsequent or other default or ~mpalr any right resulbng from it Discharge of Agreement of Trust. A Bond w~ll be deemed no longer outstanding when any such Bond has been cancelled or surrendered for cancellabon or purchased by the Authority from moneys ~n the Bond Fund or as to any Bond not so cancelled or purchased when 0) payment of the pnnclpal and the applicable premium, plus ~nterest to the due date thereof shall have been made or caused to be made ~n accordance w~th the terms thereof, or (u) payment of the pnnc~pal and applicable premium, plus interest on such Bond to the due date thereof shall have been provided by ~rrevocably depositing with the Trustee (A) moneys sufficient to make such payment, (B) noncallable Government Obligations maturing as to pnnc~pal and interest ~n such amount and at such bmes as w~ll ensure the availability of sufficient moneys to make such payment, or (C) a combination of both such moneys and noncallable Government OblLclabons and (D) payment of all necessary and proper fees, costs and expenses of the Trustee shall have been made Notwithstanding the foregoing, the Bonds which are to be redeemed before their matunty will be deemed paid and no longer outstanding only if such Bonds have been irrevocably called or designated for redemption Supplemental Agreements of Trust Any provision of the Agreement of Trust may be modified or altered by the Authority and the Trustee, by a Supplemental Agreement of Trust, upon consent of the holders of a maJority in aggregate pnnc~pal amount of Bonds outstanding; provided, that certain amendments relabng to the payment of the Bonds may be made only w~th the consent of all holders of the apphcable Bonds. In add~bon, the Authority and the Trustee may enter ~nto supplemental agreements of trust w~thout the consent of holders of the Bonds, (1) to cure any ambiguity, formal defect or omission ~n the Agreement of Trust; (2) to grant to or confer upon the Bondholders any add~bonal rights, remedies, powers or authority that may lawfully be granted to or conferred on the Bondholders, (3) to modify, amend or supplement the Agreement of Trust ~n such manner as required to permit ~ts quahficatlon under the Trust Indenture Act of 1939, as amended, or any s~m~lar federal statute hereafter ~n effect or any state securities (Blue Sky) law, (4) to add to the covenants and agreements of the Authority in the Agreement of Trust other covenants and agreements to be observed by the Authority; (5) to modify the Agreement of Trust as required to permit the Authority to comply w~th the prowslons of the Code relabng to the rebate requirement w~th respect to investment of proceeds of the Bonds, provided that such modification does not materially adversely affect the holders of all Bonds then outstanding; (6) to modify the Agreement of Trust in such manner as may be required to maintain any rating on any Bonds, provided that such amendment does not, in the opinion of the Trustee, materially adversely affect the holders of all Bonds then outstanding; (7) to authorize the issuance of and secure one or more Series of Bonds; and (8) to modify the Agreement of Trust ~n any manner that the Trustee concludes is not materially adverse to holders of all Bonds then outstanding. The Authority and the Trustee may enter ~nto certain other supplemental agreements of trust upon recelwng the consent of certain percentages of holders of the Bonds. If such a supplemental agreement of trust w~ll affect only one Series of Bonds, ~t may be necessary to seek only the consent of the holders of a majority ~n aggregate pnnc~pal amount of that Series of Bonds Certain Covenants Regarding the Projects. In the Agreement of Trust, the Authority has agreed to maintain, preserve and keep the Projects, or cause the ProJects to be maintained, preserved and kept, ~n good cond;bon Further, the Authonty has agreed to ma;nta~n ;nsurance on the Projects covenng such risks as are customarily ~nsured against by reasonable and prudent governmental bodies of like s~ze for fac;hbes of hke k~nd. The Authority may self-~nsure as to any or all of such coverage The Support Agreement Agreement to Provide Funds to Finance the Projects In the Support Agreement, the Authority agrees to the City's request to acquire and develop all or a portion of the Projects from the proceeds of the Series 2003A Bonds, and the C~ty agrees to support such request by supplying the moneys necessary to pay pnnc~pal of and premium, ~f any, and interest on the Series 2003A Bonds, upon the terms and condlbons set forth in the Support Agreement The C~ty agrees to make all Annual Payments and Addlbonal Payments when and as the same shall become due and payable, subject to appropriation by the C~ty Council Bonds. In order to prowde funds for all or a port~on of the Projects, the Authority w~ll agree to issue the Ser~es 2003A Bonds beanng interest, matunng and having the other terms and prows~ons set forth ~n the F~rst Supplemental Agreement of Trust Payments Under Support Agreement Under the Support Agreement the City agrees to pay to the Authority, or ~ts assignee, the Annual Payments set forth in the Support Agreement The Annual Payments are m such amounts and are payable at such bmes as are calculated to be sufficient to pay principal of and interest on the Bonds, including the Series 2003A Bonds. The City w~ll receive a credit against its obllgabon to make Annual Payments to the extent there are amounts on deposit ~n the Bond Fund, provided that such amounts have not been apphed prewously as a credit w~th respect to any Annual Payment The C~ty also agrees to make Add~bonal Payments, ~ncludlng the reasonable fees and expenses of the Trustee and the expenses of the Authority Payments of Annual Payments and Additional Payments by the City are subject to appropriations being made from time to time by the City Council for such purposes. In the Support Agreement, the City Council has directed the City Manager or other officer charged with the responsibility for preparing the City's annual budget to include in the budget for each Fiscal Year as a single appropriation the amount of all Annual Payments and estimated Additional Payments during such Fiscal Year. The C,ty Manager or other officer charged w~th the responsibility for prepanng the C~ty's annual budget ~s required to dehver to the Trustee and the Authority w~thm ten days after the adopbon of the annual budget for each F~scal Year, but not later than ten days after the beginning of each F~scal Year, a certificate stating whether an amount equal to the Annual Payments and esbmated Add~bonal Payments which w~ll be due dunng such F~scal Year has been appropriated by the C~ty Council If any adopted annual budget does not include an appropr~ahon of such funds, the C~ty Council ~s required to take a roll call vote ~mmed~ately after adoption of such annual budget acknowledging the ~mpact of ~ts failure to appropriate such funds If, by fifteen days after the beg~nmng of the F~scal Year, the C~ty Council has not appropriated funds for the payment of both Annual Payments and estimated Additional Payments for the then current F~scal Year, the C~ty Manager or other officer charged w~th the responsibility for prepanng the annual budget w~ll g~ve written nobce to the C,ty Council of the consequences of such failure to appropriate, and request the C~ty Council to consider a supplemental approprlabon for such purposes. The City has the opbon to prepay Annual Payments at the bmes and amounts as necessary to exercise ~ts option to cause the Bonds to be redeemed before maturity Agreement to Issue Additional Bonds to Finance Additional Projects. In order to finance the costs of add~bonal projects and, if requested by the C~ty, to complete the Projects, the Authority agrees that ~t w~ll, from bme to t~me, ~ssue addlbonal obhgabons under the Agreement of Trust. The obligation of the Authority to finance the costs of add~bonal proJects or to complete the Projects and to ~ssue addlbonal Series of Bonds w~ll be condlboned upon compliance w~th the provisions of the Master Agreement of Trust Events of Default Events of Default under the Support Agreement include (1) default ~n the due and punctual payment of an Annual Payment when the same becomes due and payable and conbnuabon of such failure for a period of five days, or (2) failure of the City to pay when due any other payment due under the Support Agreement, or to observe and perform any covenant, cond~bon or agreement, which failure shall conbnue for a per~od of 30 days after not~ce ~s given, w~th certain r~ghts to cure as described in the Support Agreement Notwithstanding the foregoing, failure to make any payment due or to perform any covenant under the Support Agreement which results from a failure of the City Council to appropriate moneys for such purposes will not constitute an Event of Default. Remedies If an Event of Default occurs, remedies available to the Authority are to take whatever acbon at law or ~n equity, other than to declare the enbre unpaid principal balance of Annual Payments to be ~mmed~ately due and payable, as may appear necessary or desirable to collect Annual Payments and Addlbonal Payments then due or to become due, or to enforce performance and observance of any obhgatlon, agreement or covenant of the C~ty An event of non-appropnabon ~s not an Event of Default See the section "INVESTMENT CONSIDERATIONS -- Non-Appropriation and Limited Remedies." The Support Agreement will be reinstated and any default waived upon certain cond~bons, ~nclud~ng the payment of all arrears w~th respect to the Bonds Amendments. The Support Agreement may be supplemented, amended or modified prior to the payment of all outstanding Bonds, only w~th the consent of the Trustee, given m accordance w~th the Master Agreement of Trust THE AUTHORITY The Authority was created pursuant to the Act for the specific purposes of, among others, attracbng new ~ndustnes, expanding exlsbng industries and prowd~ng fac~hbes for use by governmental organizat~ons The Authority ~s a pohbcal subdivision of the Commonwealth of V~rgmla governed by a seven-member Board of Commissioners appointed for four-year terms by the C~ty Council The Authority ~s empowered, among other things, to acquire, construct, maintain, equip, own, lease and dispose of various types of faclhbes, ~nclud~ng fac~hbes for use by a city and by other governmental organ~zabons or commercial enterprises, and to finance the same by ~ssuance of ~ts revenue bonds The Authority has no taxing power THE CITY The present C~ty of V~rg~nla Beach was formed on January 1, 1963, by the merger of Pnncess Anne County and the former smaller City of Virginia Beach. Th~s merger created one of the largest clbes in the Commonwealth of V~rg~n~a with an area of 310 square miles and 38 m~les of shoreline on the Atlantic Ocean and the Chesapeake Bay The C~ty covers the enbre eastern border of V~rg~n~a south of the Delmarva Peninsula and ~ncludes all of the area from the Chesapeake Bay to the North Carohna border The City has the largest population of any city in the Commonwealth of Virginia Appendix A contains add~bonal financial and demographic ~nformatlon concerning the City The C~ty's audited financial statements for the F~scal Year ended June 30, 2002, are contained ~n Appendix B THE PROJECTS Generally. The Projects to be financed ~n whole or ~n part with the proceeds of the Series 2003A Bonds have been authorized by City Council either through the C~ty's s~x-year Capital Improvement Program ("ClP") or through tax-~ncrement financing programs The ClP is revised annually and approved by City Council ~n conjuncbon w~th ~ts adopbon of the C~ty's annual operabng budget For a more detailed discussion of the ClP, see the subsection "Capital Improvement Program" in Appendix A The Projects approved in the CIP include the Convention Center Replacement, the V~rglnla Marine Science Museum parking project, the Pawhon Theater Replacement Project, the Open Space Site Acqu~s~bon program and the Thlrty-F~rst Street Parking Garage. The Projects authorized under tax-increment financing programs are the Town Center Garage Block 10 and the Town Center Garage Block 12. At the bmes these projects were ~ncluded ~n e~ther the CIP or in a tax-increment financing program, C~ty Council also addressed the need to ensure that adequate revenues would be available to the City to undertake these s~gmficant projects. W~th respect to the Convention Center Replacement, the V~rg~n~a Manne Science Museum parking project, the Pav~hon Theater Replacement Project and the Open Space S~te Acqu~slhon program that were initially approved in the F~scal Year 2001-02 CIP, City Council ~ncreased certain taxes that are projected to be sufficient to pay for such projects. The tax ~ncreases of 2.5% on the hotel tax (total tax of 8%, effective November 1, 2001), 1% on the restaurant tax (total tax of 5.5%, effective July 1, 2001), and 5 cents on a pack of c~garettes (effective July 1, 2001) As of June 30, 2003, these increased taxes have generated an aggregate of $19,951,033 ~n additional revenue to support the costs of these projects. 10 W~th respect to the two Town Center Parking Garage projects and the other public infrastructure fac~ht~es to be undertaken by the Authority and the C~ty ~n the Town Center of V~rg~n~a Beach, the City created the Central Bus~ness D~str~ct - South tax ~ncrement financing district The tax increment revenues and other available revenues derived from th~s TIF d~stnct are anbc~pated to be sufficient to pay the costs of the pubhc parking garages and the other pubhc ~nfrastructure fac~hbes w~thout resorting to a special service d~str~ct tax that also could be lewed in a Town Center special service d~strict As of June 30, 2003, $1,764,284 in tax ~ncrement revenues have been generated since th~s TIF d~stnct was created With respect to the Thirty-First Street Parking Garage project located at the oceanfront ~n the C~ty's resort area, the C~ty will charge for parking ~n the garage Based on the projected use of the fac~hty, it is anticipated that the parking revenues w~ll be sufficient to pay for the operations of the garage ~nclud~ng debt service The remaining projects (Emergency Communications Operation Center, Revenue Assessment and Collection System, Electronic Ballot System, City/School Human Resource Payroll System, Communications Infrastructure Replacement and F~re Apparatus Equipment), representing less than ten percent of the currently projected total pubhc fac~hty revenue bond program fundings, w~ll receive General Fund support from ex,sting revenue sources Description of the Projects. The aggregate cost of the Projects currently ~s estimated to be approximately $410,550,000. The City currently plans to finance approximately $327 million of these costs through the Authonty's issuance of its public facility revenue bonds The Series 2003A Bonds are the first ser~es to be ~ssued under this plan. The remaining costs of Projects (approximately $83 55 m~lhon) w~ll come from other funding sources, including state and federal funding, sale of property, general obhgabon bonds, General Fund appropriations and various fund balances, pay-as-you-go funding and private contributions Prospective purchasers of the Series 2003A Bonds should note that the CIP ~s a s~x-year program and the funding sources and amounts are subject to mod~ficabon over brae at the discretion of C~ty Council The following sets forth brief descriptions of the Projects to be financed ~n whole or in part with the proceeds of the Series 2003A Bonds. Convenbon Center Replacement - This project provides for the replacement and relocation of the ex~sbng pav~hon convention center on the same s~te It w~ll provide for approximately 150,000 square feet of exhibit hall, 25,000 square feet of meeting rooms and 32,000 square feet of ballroom space. Total esbmated cost of th~s project ~s $197,025,000 Thirty-F~rst Street Parking Garage - This project ~s for the construction of a 1,000 space parking garage, 26,000 square feet of retail space and a pedestrian bridge from the garage to a proposed hotel to be developed on the oceanfront Total estimated cost of this project ~s $23,811,800 Town Center Garage Block 10 - Th~s project ~s for the construction of an approximate 840 space parking garage located ~n the Town Center d~stnct of the C~ty Total estimated cost of th~s project ~s $13,500,000. For a further d~scuss~on of the Town Center Project, see "Tax Increment Financing" and "Other Long-Term Obligations" ~n the section "City Indebtedness and Capital Plan" ~n Appendix A. Town Center Garage Block 12 - Th~s project is for the construcbon of an approximate 305 space parking garage located in the Town Center d~str~ct of the C~ty Total esbmated cost of this project is $8,300,000 For a further d~scuss~on of the Town Center Project, see "Tax Increment Financing" and "Other Long-Term Obligations" ~n the section "City Indebtedness and Capital Plan" in Appendix A Open Space S~te Acquisibon - This project prowdes for the acquisition of land for preservation and/or recreational purposes. Total estimated cost of th~s project ~s $54,090,000 11 Virginia Marine Science Museum Parking - This project w~ll prowde a 500 space parking lot across the road from the museum and wdl address the safe crossing of pedestrians from the parking area to the museum Total estimated cost of th~s project ~s $3,000,000 Emergency Communications Operation Center- Th~s project ~s for the design and construcbon of the new Emergency Commumcat~ons Center and Emergency Operabon Center, to be located ~n the Mumc~pal Center, on the north s~de of the ~ntersecbon of Pnncess Anne Road and James Madison Boulevard, across the street from the Pubhc Safety Building Total estimated cost of th~s project ~s $10,456,000 Revenue Assessment and Collection System - Th~s project prowdes for a comprehensive, fully ~ntegrated tax system to replace the computer systems currently used to support tax revenue assessment and collecbon This ~s a joint project of the Commissioner of Revenue, C~ty Treasurer and Real Estate Assessor Total esbmated cost of th~s project ~s $5,402,000 Electronic Ballot System - Th~s project ~s for the purchase of 800 new voter machines to prowde an electromc ballot station Total estimated cost of this project ~s $3,766,565 Pawhon Theater Replacement - Th~s project replaces the current 1,000 seat Pavd~on Theater w~th a new theater at the Town Center and ~ncludes parking Total esbmated cost of th~s project ~s $50,OOO,O00 City/School Human Resource Payroll System - Th~s project replaces the C~ty's ten year old payroll system w~th a new ~nformat~on system ubhzmg current network infrastructure Total estimated cost of th~s project is $3,800,000. Communications Infrastructure Replacement - Th~s project wdl replace various components of the pubhc safety communications ~nfrastructure related to equipment associated w~th receiving, d~spatch~ng, transpond~ng and answenng pubhc safety calls Total esbmated cost of th~s project ~s $22,225,000 Fire Apparatus Equipment - Th~s project funds replacement of heavy equipment fire apparatus that costs over $50,000 and have a useful hfe of over ten years Total estimated cost of th~s project ~s $15,175,O0O ESTIMATED SOURCES AND USES OF FUNDS The proceeds received from the sale of the Series 2003A Bonds, exclusive of accrued ~nterest, are expected to be apphed as follows Sources of Funds Par Amount of the Series 2003A Bonds Net Original Issue Premium Total $ Uses of Funds Deposit to Project Fund Costs of Issuance 0ncluding Underwnter's compensation) Total $ INVESTMENT CONSIDERATIONS 12 The following is a hst of factors that should be considered in connection w~th the purchase of the Series 2003A Bonds. Source of Payments The Series 2003A Bonds are not general obhgabons of the Authority or the C~ty but are payable only from revenues received by the Authority under the Support Agreement and other moneys held by the Trustee and pledged to the payment of the Series 2003A Bonds The ab~hty of the Authority to make t~mely payments of pnnclpal and interest on the Series 2003A Bonds depends solely on the ab~hty of the C~ty to make t~mely payments under the Support Agreement The obhgabon of the City to make payments under the Support Agreement ~s subject to and dependent upon amounts being lawfully appropriated from bme to t~me by the City Council The obhgabon of the City to make payments under the Support Agreement ~s not a debt of the C~ty w~th~n the meamng of any const~tubonal or statutory hm~tabon or a pledge of the faith and credit or the taxing power of the C~ty The City Council is not legally obligated to appropriate the funds necessary to meet the City's financial obligation under the Support Agreement. Non-appropriation and Limited Remedies Pursuant to the Support Agreement, ~n the event that funds appropriated and budgeted by the C~ty for the payment of its obhgabons under the Support Agreement are insufficient to make the reqmred payments thereunder, the C~ty Manager w~ll submit a request, w~th~n 15 days after the beginning of the F~scal Year, for a supplemental appropnabon to cover the deficit Any payment of pnnc~pal of and premium, if any, and interest on the Series 2003A Bonds are subject to appropriation by the C~ty Council In the event of non-appropriation of funds by the City Council, neither the City nor the Authority may be held liable for the principal of and premium, if any, and interest payments on the Series 2003A Bonds following the last Fiscal Year in which funds to make payment under the Support Agreement were appropriated by the City Council. Upon an Event of Default under the Agreement of Trust, the Trustee has no right to accelerate the payment of the Series 2003A Bonds by declaring the entire pnnc~pal of and interest on the Series 2003A Bonds to be due and payable Similarly, upon an Event of Default under the Support Agreement, the Authority has no right to accelerate the payment of Annual Payments by declanng the Annual Payments to be due and payable. Political Risk The current City Council has evidenced ~n its resolubon adopted ~n connecbon w~th the Series 2003A Bonds a present intent to make future appropriations of such funds as may be necessary to make payments due under the Support Agreement as and when such payments become due There can be no guarantee, however, that the C~ty Council will retain its current constituency in the future, and there can be no guarantee that a future C~ty Council w~ll retain the current City Council's pohcy w~th respect to the Series 2003A Bonds No Assets Pledged as Security Outside of Funds and Accounts Except for revenues and receipts under the Agreement of Trust, neither the Projects nor any other asset ~s being leased, mortgaged or pledged as security for payments due under the Support Agreement or the pnnc~pal of and premium, ~f any, and ~nterest on the Series 2003A Bonds Any Event of Default or non-appropnabon of amounts due under the Support Agreement w~ll not give the holders of the Series 2003A Bonds, either d~rectly or Ind~rectly, any right to have the Projects or any other asset of the Authority or the City ubhzed to produce funds to be apphed toward payment of the Series 2003A Bonds, except for funds established under the Agreement of Trust Limitations on Enforceability of Remedies 13 The realization of any rights upon a default under the Agreement of Trust or the Support Agreement wdl depend upon the exercise of various remedies specified thereto Any attempt by the Trustee or others to enforce such remedies may require judicial action, which is often subject to d~screbon and delay Under ex~sbng law, certain of the legal and equitable remedies specified m the Agreement of Trust or the Support Agreement may not be readdy available LITIGATION The City In the op~mon of C~ty management, no hbgat~on ~s pending against the City which would (1) matenally adversely affect the C~ty's financial pos~bon, (2) restrain or enjoin the issuance, sale or dehvery of the Series 2003A Bonds, or the apphcabon of proceeds of the Series 2003A Bonds as prowded ~n the Agreement of Trust or the collechon of revenues pledged under the Agreement of Trust, (3) ~n any way contest or affect any authority for the ~ssuance or vahd~ty of the Series 2003A Bonds or the vahd~ty of the Agreement of Trust or the Support Agreement, or (4) in any way contest the creabon, existence, powers or authority of the City The Authority No hbgat~on is pending against the Authority or, to the best of the knowledge of the Authority, threatened against the Authority (1) to restrain or enjoin the ~ssuance, sale or dehvery of the Series 2003A Bonds or the application of proceeds of the Series 2003A Bonds as prowded in the Agreement of Trust or the collecbon of revenues pledged under the Agreement of Trust, (2) ~n any way contesbng or affecbng any authority for the ~ssuance or vahd~ty of the Series 2003A Bonds or the vahd~ty of the Agreement of Trust or the Support Agreement, (3) m any way contesbng the creation, existence, powers or authority of the Authority, or (4) contesbng the vahd~ty of the Act or any prows~on thereof. APPROVAL OF LEGAL MATTERS Certain legal matters relabng to the authonzahon and vahd~ty of the Series 2003A Bonds will be subject to the approwng op~mon of Hunton & Wdhams LLP, R~chmond, Vlrg~ma, Bond Counsel, which wdl be furmshed at the expense of the C~ty upon dehvery of the Senes 2003A Bonds, ~n substanbally the form set forth ~n Appendix C (the "Bond Op~mon") The Bond Open,on wdl be hm~ted to matters relabng to authonzabon and vahd~ty of the Senes 2003A Bonds and to the tax-exempt status of ~nterest thereon as descnbed ~n the secbon "TAX EXEMPTION." Bond Counsel has not been engaged to ~nvesbgate the financial resources of the Authority and the C~ty or their abd~ty to prowde for payment of the Series 2003A Bonds, and the Bond Op~mon w~ll make no statement as to such matters or as to the accuracy or completeness of th~s Official Statement or any other mformabon that may have been rehed on by anyone ~n making the decision to purchase Series 2003A Bonds Certain legal matters w~ll be passed on for the C~ty and the Authority by the office of the C~ty Attorney. TAX EXEMPTION Opinion of Bond Counsel In the opinion of Bond Counsel, under current law, ~nterest, including accrued original ~ssue discount ("OLD"), on the Series 2003A Bonds (1) will not be included in gross income for federal income tax purposes, (2) will not be an item of tax preference for purposes of the Federal alternative m~nlmum income tax imposed on individuals and corporations, however, w~th respect to corporabons (as defined for Federal ~ncome tax purposes) subject to the Federal altemabve mm~mum tax, such ~nterest ~s taken 14 account in determining adjusted current earnings for purposes of computing such tax and (3) will be exempt from income taxabon by the Commonwealth of V~rgln~a Except as discussed below regarding OlD, no other op~n~on ~s expressed by Bond Counsel regarding the tax consequences of the ownership of or the receipt or accrual of interest on the Series 2003A Bonds Further, no opinion w~ll be expressed by Bond Counsel as to the treatment for Federal ~ncome tax purposes of any ~nterest pa~d on the Ser~es 2003A Bonds in the event of non-approprlabon or default by the C~ty Bond Counsel's oplmon w~ll be given in rehance upon certifications of representahves of the Authority and the City as to facts relevant to both the open,on and the requirements of the Code and ~s subject to the condition that there is compliance subsequent to the issuance of the Series 2003A Bonds w~th all requirements of the Code that must be satisfied ~n order for ~nterest thereon to remain excludable from gross income for Federal income tax purposes The Authority and the C~ty have covenanted to comply with the current prows~ons of the Code regarding, among other matters, the use, expenditure and ~nvestment of the proceeds of the Series 2003A Bonds and the t~mely payment to the Umted States of any arbitrage rebate amounts with respect to the Series 2003A Bonds Failure by the Authority and the City to comply with such covenants, among other things, could cause interest, including accrued OlD, on the Ser~es 2003A Bonds to be included ~n gross income for Federal income tax purposes retroactively to their date of ~ssue Original Issue Discount The ~nltlal public offering prices of Series 2003A Bonds maturing in the years ~ through __ (the "OlD Bonds") w~ll be less than their stated principal amount In the op~n~on of Bond Counsel, under current law, the d~fference between the stated principal amount and the ~n~t~al offenng price of the OlD Bonds to the pubhc (excluding bond houses and brokers) at which a substanbal amount of such Series 2003A Bonds ~s sold w~ll constitute OlD The offering prices set forth on the ms,de cover of th~s Official Statement for the OlD Bonds are expected to be the ~n~bal offenng prices to the public at which a substantial amount of such Ser~es 2003A Bonds are sold Under the Code, for purposes of determ~mng a Series 2003A Bondholder's adjusted bas~s ~n an OlD Bond, OlD treated as hawng accrued wh~le the Series 2003A Bondholder holds the Series 2003A Bond will be added to the Series 2003A Bondholder's bas~s OlD will accrue on a constant y~eld-to- maturity method. The adjusted bas~s will be used to determine taxable gain or loss upon the sale or other d~spos~bon (~nclud~ng redemption or payment at maturity) of an OlD Bond Prospecbve purchasers of OlD Bonds should consult their own tax advisors as to the calculabon of accrued OlD and the state and local tax consequences of owmng or d~spos~ng of OlD Bonds Premium Series 2Q03A Bonds purchased, whether upon ~ssuance or otherwise, for an amount (excluding any amount attributable to accrued interest) ~n excess of their principal amount w~ll be treated for federal ~ncome tax purposes as hawng amortizable bond premium A holder's bas~s ~n such a Series 2003A Bond must be reduced by the amount of premium which accrues wh~le such Series 2003A Bond ~s held by the holder. No deduction for such amount w~ll be allowed, but ~t generally w~ll offset ~nterest on the Series 2003A Bonds wh~le so held Purchasers of such Series 2003A Bonds should consult their own tax adwsors as to the calculabon, accrual and treatment of amorbzable bond premium and the state and local tax consequences of holding such Series 2003A Bonds Other Tax Matters In addition to the matters addressed above, prospective purchasers of the Series 2003A Bonds should be aware that the ownership of tax-exempt obhgabons may result in collateral Federal income tax consequences to certain taxpayers, including without limitation financial institutions, property and casualty ~nsurance companies, S corporabons, foreign corporabons subject to the branch profits tax, recipients of 15 Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred or conbnued ~ndebtedness to purchase or carry tax-exempt obhgabons. Prospective purchasers of the Series 2003A Bonds should consult their tax adwsors as to the apphcabd~ty and ~mpact of such consequences Prospective purchasers of the Senes 2003A Bonds should consult their own tax adwsors w~th respect to the status of interest on the Senes 2003A Bonds under the tax laws of any state other than V~rglnla FINANCIAL ADVISORS Government F~nance Associates, Inc and ARD Government F~nance Group serve as financial advisors to the City in connection w~th the issuance of the Senes 2003A Bonds The financial advisors' fees for services rendered w~th respect to the sale of the Series 2003A Bonds ~s not conbngent upon the ~ssuance and dehvery of the Ser~es 2003A Bonds INDEPENDENT AUDITORS The C~ty's financial statements for the fiscal year ended June 30, 2002, have been audited by the independent pubhc accounbng firm of KPMG L L.P The C~ty's general purpose financial statements and the independent auditors' report thereon are presented here~n as Appendix B These general purpose financial statements, along with the related Notes to F~nanc~al Statements, are ~ntended to provide a broad overview of the financial pos~bon and operabng results of the City's vanous funds and account groups KPMG L L P w~ll not be rewew~ng any matters m connecbon with the issuance of the Series 2003A Bonds The C~ty has engaged the ~ndependent public accounting firm of Cherry, Bekaert and Holland L L P. to prepare the C~ty's financ,al statement for the fiscal year ended June 30, 2003. RATINGS Fitch Rabngs has assigned a rabng of" "to the Series 2003A Bonds Moody's Investors Service has assigned a rabng of .... to the Series 2003A Bonds Standard & Poor's Ratings Serwces, a d~ws~on of The McGraw-Hill Companies, Inc, has assigned a rating of "AA" to the Series 2003A Bonds Each rating reflects only the view of such orgamzahon and any desired explanation of the s~gmflcance of any ratings should be obtained from Fitch at One State Street Plaza, New York, New York 10004, from Moody's at 99 Church Street, New York, New York 10007 and from S&P at 55 Water Street, New York, New York 10041 Generally, a rating agency bases its rating on the ~nformabon and materials furmshed to ~t and on ~nvest~gabons, studies and assumpbons of ~ts own The rabng Is not a recommendabon to buy, sell or hold the Series 2003A Bonds and should be evaluated ~ndependently There is no assurance such rating w~ll continue for any g~ven period of bme or that such rabng w~ll not be revised downward or w~thdrawn entirely by the rating agency, if ~n the judgment of such rating agency, circumstances so warrant Any such downward revision or w~thdrawal of such rating may have an adverse effect on the market price of the Series 2003A Bonds SALE AT COMPETITIVE BIDDING The Senes 2003A Bonds will be offered for sale at compebbve b~dd~ng on September 9, 2003 After the Series 2003A Bonds have been awarded, the C~ty wdl ~ssue an Official Statement ,n final form to be dated September 9, 2003 The C~ty w~ll deem the Official Statement final as of ~ts date, and the Official Statement ~n final form w~ll be a "F~nal Official Statement" w~thln the meaning of the Rule (as hereinafter defined). The Official Statement ~n final form wdl include, among other matters, the ldenbty of the w~nnmg b~dder, the expected selhng compensation to such w~nmng bidder and other mformat~on on 16 the interest rates and offenng prices or y~elds of the Series 2003A Bonds, all as supplied by the w~nnlng b~dder LEGALITY OF THE SERIES 2003A BONDS FOR INVESTMENT The Act provides that bonds ~ssued by the Authority under the Act are legal and authorized ~nvestments for banks, sawngs banks, budding and loan associations, ~nsurance compames, fiduciaries, trustees and guardians and for all pubhc funds of the Commonwealth of Virginia or other poht~cal corporations or subd~ws~ons of the Commonwealth of V~rg~ma The Act also provides that bonds ~ssued pursuant thereto may properly and legally be deposited with and received by any Commonwealth of V~rg~ma or municipal officer or any agency or political subd~ws~on of the Commonwealth of V~rg~n~a for any purpose for which the deposit of bonds or obligations of the Commonwealth of V~rglma is now or may hereafter be authorized by law CONTINUING DISCLOSURE Th~s offenng is subject to the conbnulng disclosure requirements of Rule 15c2-12 (the "Rule") promulgated by the Securities and Exchange Commission (the "SEC"). For purposes of the Rule, the City ~s an obligated person with respect to the Series 2003A Bonds The C~ty has agreed to execute a Conbnu~ng D~sclosure Agreement at closing to assist the purchasers of the Series 2003A Bonds ~n complying with the provisions of Rule by providing annual financial information and material event nobces required by the Rule. The form of the Conbnu~ng D~sclosure Agreement is attached hereto as Appendix D As described ~n Appendix D, such undertaking requires the City to provide only hmlted information at specified times and does not require the City to d~sclose all informabon that may affect the value of the Series 2003A Bonds The City may choose to make additional reformation available from time to t~me, but has no obhgabon to do so. The C~ty has never faded to comply ~n all material respects w~th any previous undertakings w~th regard to the Rule to provide certain annual financial mformat~on and material event nobces. As described more fully ~n Appendix D, any Bondholder may take steps to enforce the obhgabon of the C~ty to provide conbnumg disclosure, but any fadure by the City under ~ts obhgatlon will not result ~n an event of default under the Agreement of Trust or the Series 2003A Bonds. The C~ty ~s required to file ~ts annual continuing disclosure ~nformatlon with each nationally recognized mumc~pal secunbes ~nformat~on repository ("NRMSIRs") and w~th any state ~nformabon depository ("SID") created in V~rgmla No SID has been created for Virgm~a. The C~ty is required to file any material event notice w~th (1) each NRMSIR or the Municipal Secunbes Rulemaklng Board and (2) any V~rg~ma SID. As of the date of th~s Official Statement, the SEC has recogmzed the following ent~t~es as NRMSIRs. Bloomberg Municipal Repository 100 Park Drive Skdlman, New Jersey 08558 Telephone. (609) 279-3225 Facs~mde. (609) 279-5962 E-Ma~I Mums@Bloomberg com DPC Data Inc. One Executive Drive Fort Lee, New Jersey 07024 Telephone (201) 346-0701 Facs~mde. (201) 947-0107 E-Ma~I nrms~r@dpcdata com FT Interactive Data Attn NRMSIR 100 Wdham Street New York, New York 10038 Telephone (212) 771-6899 Facs~mde (212) 771-7390 (Secondary Market Information) (212) 771-7391 (Primary Market Information) E-Ma~I: NRMSIR@FTID corn Standard & Poor's J.J. Kenny Repository 55 Water Street, 45th Floor New York, New York 10041 Telephone' (212) 438-4595 Facsimile (212) 438-3975 E-Ma~I. nrms~r_repos~tory@sandp.com 17 If a SID ~s hereafter created for the Commonwealth of V]rg~ma, the C~ty ~s obhgated to make flhngs and prowde nobces to the SlD as required by the Rule. Investors and other interested part~es may contact any NRMSIR for add~bonal ~nformabon concerning ~ts services The C~ty makes no representabon as to the scope of the services prowded to the secondary market by any NRMSIR or as to the costs for the prows~on of such services by any NRMSIR MISCELLANEOUS The references here~n to the Act and the financing documents are merely brief summaries of certain prows~ons thereof Such summaries do not purport to be complete, and reference ~s hereby made to all such documents for the complete terms thereof Cop~es of the Support Agreement and the Agreement of Trust are on file w~th the City Th~s Official Statement has been approved and authorized by the Authority and the C~ty for use ~n connecbon w~th the sale of the Series 2003A Bonds Its purpose ~s to supply ~nformat~on to prospecbve buyers of the Series 2003A Bonds F~nanc~al and other informabon contained ~n th~s Official Statement have been prepared by the C~ty from ~ts records, except where other sources are noted The ~nformat~on speaks as of ~ts date and ~s not ~ntended to ~nd~cate future or continuing trends m the financial or economic pos~t~on of the C~ty Neither th~s Official Statement nor any statement which may have been made verbally or in writing ~s to be construed as a contract w~th the holders of the Series 2003A Bonds W~th respect to any statements made ~n th~s Official Statement ~nvolwng matters of op~mon or of esbmates, whether or not expressly stated, they are set forth as such and not as representations of fact, and no representation ~s made that any of the esbmates wdl be reahzed Any quesbons concermng the contents of this Official Statement should be d~rected to the following Department of F~nance, Municipal Center, Virgm~a Beach, V~rgm~a 23456 (757) 427-4681, or the C~ty's financial advisors, Government Finance Associates, Inc (212) 836-4819; or ARD Government Finance Group (703) 807-5700 The Authority makes no representabon as to the accuracy or completeness of any ~nformabon ~n th~s Official Statement and takes no responslbd~ty for ~ts contents, other than the ~nformabon relating to the Authority ~n the sections "THE AUTHORITY" and "LITIGATION -- The Authority." The Authority and the C~ty have each duly authorized the d~stnbutJon of this Prehmlnary Official Statement The C~ty has deemed this Prehm~nary Official Statement final as of ~ts date w~th~n the meaning of the Rule, except for the omission of certain pnc~ng and other information permitted to be omitted pursuant to the Rule CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY By Chairman CITY OF VIRGINIA BEACH, VIRGINIA By C~ty Manager 18 APPENDIX A THE CITY OF VIRGINIA BEACH, VIRGINIA TABLE OF CONTENTS FOR APPENDIX A NOTE: Once Appendix A is finalized, an "A" will be added at the beginning of each page number in this TOC. Pa_cie CERTAIN INFORMATION CONCERNING THE CITY ............ 3 Introducbon ......................... 3 Certain Elected Officials ................. 3 School Board ................ 4 Elected Officials ................................. 4 Certain C~ty Councd Appointees and Adm~mstrabve Staff Members .................. 5 Governmental Services and Facd~bes ............. 6 OVERVIEW OF GOVERNMENTAL ORGANIZATION AND SELECTED FUNCTIONS ..... 6 General ................................. 6 Funcbonal Departments ............................................................ 7 ECONOMIC AND DEMOGRAPHIC FACTORS ...... Populabon .............. Income ......... Housing and Construct,on ........ Employment ........... Business and Industry ...... Retad Sales ......... Tourism and Convent,ohs. M~l~tary ............. Medical Fac~hbes ........... Agribusiness ..................... Educabon ................... CITY INDEBTEDNESS AND CAPITAL PLAN ..... L~m~tabons on Incurrence of Debt ..... Debt Management Pohc~es ......... Outstanding Debt and Lease Obhgat~ons .. Authorized but Umssued Bonds ...... Water and Sewer System Debt ............. Storm Water Ut~hty System Debt ............ Agrmultural Reserve Program .......... Tax Increment F~nanc~ng .............. Assets Acquired and F~nanced Under Capital Leases .... Other Long-Term Obhgabons ............ Overlapping Debt ................. Short-Term Borrowing ....... Debt H~story .................... Payment Record ............................. Comprehensive Plan .................. CAPITAL IMPROVEMENT PROGRAM ................. Prior Year CIPs - Actual Capital Project Expend,tures .... FINANCIAL INFORMATION ................... Bas~s of Accounting and Accounting Structure ......... C~ty of V~rg~n~a Beach Development Authority ............. Hampton Roads Transportation D~stnct Comm~ss,on ..... GASB Statement 34 ......... Investment Pohc~es and Pracbces .. Certificate of Achievement ...... Budgetary Process ........ F~scal Year 2003 Operating Budget Performance F~scal Year 2004 Operabng Budget ...... F~scal Year 2004 Budget v F~scal Year 2003 Budget .. ........... 11 ............ 11 ........... 11 ........ 13 ................. 18 ................ 18 .............. 19 ............... 20 ............. 20 ............... 21 ............... 23 ........... 23 ............ 23 .............. 25 ........... 26 ........... 29 ................. 29 ............. 30 ............. 30 ................ 31 ................... 31 .................... 32 ................ 32 ....................... 32 ................... 32 ......................... 32 ............................ 33 ............. 36 ........... 36 ............. 36 .................................. 36 ............... 37 ........ 37 ........ 38 ............ 39 .......... 39 .. .40 ............ 40 ........... 42 A-1 General Government Revenues ............... General Fund .......................................................... Operating Data ........................ General Fund Operations ............... THE WATER AND SEWER SYSTEM ........... Typical Water and Sewer B~lls .......... Operating Results-Water and Sewer System ................ Water Sales and Services Contracts ................. Water and Sewer Capital Improvement Program.. The Lake Gaston Project ....................... INSURANCE ................................... COMMITMENTS AND CONTINGENCIES ............ RETIREMENT AND PENSION PLANS ......... EMPLOYEE RELATIONS AND COLLECTIVE BARGAINING ....... ..... 43 .................. 43 .. 43 ... 47 ......... 50 52 ...... 52 ...... 54 .. 55 .... 56 ......... 56 56 .. 57 ..... 57 o. .o A-2 THE CITY OF VIRGINIA BEACH, VIRGINIA CERTAIN INFORMATION CONCERNING THE CITY Introduction The present C~ty of V~rg~n~a Beach was formed on January 1, 1963, by the merger of Princess Anne County and the former smaller C~ty of V~rg~n~a Beach Th~s merger created one of the largest c~bes ~n the Commonwealth of VJrg~ma w~th an area of 310 square m~les and 38 m~les of shore-hne on the Atlanhc Ocean and the Chesapeake Bay The C~ty covers the enbre eastern border of V~rgm~a south of the Delmarva Peninsula and ~ncludes all of the area from the Chesapeake Bay to the North Carohna border. The C~ty has the largest population of any c~ty ~n V~rg~n~a w~th a population of 425,257 according to the 2000 U S. Census As a c~ty on the eastern seaboard, V~rg~n~a Beach has always been known as a resort community However, the strength of the C~ty's economy hes ~n ~ts d~vers~flcabon Construction/real estate, hght ~ndustry, "h~gh-tech" services, wholesale and retail sales, agriculture, four major m~htary bases, and resort and convention trade are the major aspects of the economy The C~ty encourages and supports th~s d~vers~flcabon V~rgln~a Beach ~s an ~ndependent, full-service c~ty w~th sole local governmental taxing power w~thm ~ts boundaries It derives ~ts governing authority from a charter granted by the General Assembly of the Commonwealth of V~rgJn~a. The governing body of the C~ty ~s the C~ty Council, which formulates pohcles for the adm~mstrabon of the C~ty The current charter provides for a Council-Manager form of government There ~s no overlapping debt or taxing powers w~th other pohbcal subdlws~ons The water and sewage systems are operated on a self-supporting basis The Execubve Offices are located at the Mumc~pal Center, V~rg~n~a Beach, V~rg~n~a 23456 (757) 427- 4242 The telephone number for the F~nance Department ~s (757) 427-4681 Certain Elected Officials The C~ty operates under the Council-Manager form of government as estabhshed by ~ts Charter There is an 11-member C~ty Council vested w~th local legislative powers Each member of the C~ty Council ~s elected on an "at large" bas~s; however, seven seats must be filled by ~nd~wduals who reside ~n the seven residence d~str~cts of the C~ty The City's Charter was amended ~n 1995 to prowde that the C~ty's seven boroughs would be replaced by these approximately equally populated residence d~str~cts There ~s no d~stnct residency requirement for the remaining four seats The Mayor ~s elected by the voters and occupies one of these four seats The C~ty Council elects a V~ce-Mayor from among ~ts members. All members of the C~ty Council are elected for four-year terms The C~ty Manager is the adm~n~strabve head of the municipal government and carries out the policies of the C~ty Council. The C~ty Manager ~s appointed by the C~ty Council and serves at the pleasure of the City Council The City Council also appoints members to certain boards, commissions, and authorities as ~t deems necessary to the operation of the C~ty A-3 School Board The School Board ~s made up of 11 members Seven seats must be filled on the School Board by individuals who reside in the seven respecbve residence d~stncts of the C~ty but each of the eleven elected School Board members are elected by the voters of the C~ty at large The School Board members serve four-year terms. The School Board exercises all of the powers conferred and performs all of the duties ~mposed upon them by general law Elected Officials Meyera E. Oberndorf, Mayor Civic leader, former school teacher and radio broadcaster Elected to C~ty Council ~n 1976 Re- elected m 1980 and 1984. F~rst elected Mayor on July 1, 1988, re-elected ~n 1992, 1996 and 2000 Bachelor of Science degree in Elementary Education from Old Dom~mon University. Louis R. Jones, Vice Mayor Owner and operator of Hollomon-Brown Funeral Homes, Inc. Elected to C~ty Council ~n 1982 and served as Mayor from 1982 to 1984. Re-elected to City Council ~n 1990, 1994, 1998 and 2002 Bachelor of Science degree in Business Administration from The College of W~lham and Mary, Norfolk D~vls~on (now Old Domlmon University). Harry W. Diezel, Councilman Former fire chief of V~rg~ma Beach, rebnng ~n 1997 after 23 years of service. Appointed to C~ty Councd December 17, 2002. Attended Randolph-Macon College and American University Associate of Arts and Sciences degree from Tidewater Community College Margaret L. Eure, Councilwoman Co-founder of Eure Rentals, Incorporated and Eure Distnbut~ng, Incorporated. Council in 1998 for a two-year term due to redistricting Won re-elecbon ~n 2000 Business College and the American Insbtute of Banking Elected to City Attended Kees Richard A. Maddox, Councilman Owner and operator of four Dairy Queen stores located ~n V~rg~n~a Beach Elected to C~ty Council ~n 2002. Attended The College of Wilham and Mary and Virginia Wesleyan College Reba S. McClanan, Councilwoman Civic leader and former school teacher Employed ~n the V~rg~n~a Beach Pubhc School System from 1964 to 1968 Elected to City Council ~n 1980 and re-elected ~n 1984 and 1988. Served as V~ce Mayor from 1984 to 1986. Won election to City Council ~n 1996 and 1998, each for a two-year term due to redistricting Won re-election ~n 2000. Bachelor of Science degree from Berea College and Master of Science degree from Virglma Polytechmc Institute and State Umvers~ty J. M. Reeve, Councilman Owner and president of Eco-Systems, Inc, an environmental restoration company Elected to City Council ~n 2002. Bachelor of Science degree in Industrial Engineering from Virginia Polytechnic Insbtute and State Umverslty and a Masters in Business Administration from The College of W~lham and Mary A-4 Peter W. Schmidt, Councilman President of Southern Aggregates, LLC, a d~stnbutor of hghtwe~ght aggregate to the construcbon ~ndustry Elected to C~ty Council ~n 2002 Bachelor of Arts degree ~n Foreign Language and a Masters degree ~n Bus~ness Adm~n~strabon from the Umvers~ty of V~rg~ma Ronald John "Ron" A. Villanueva, Councilman Execubve V~ce President and partner of Venture Dynamics Corporation, a d~vers~fled manne ~ndustnal firm Elected to City Council in 2002 Bachelor of Arts degree ~n Pohbcal Science from Old Dom~mon Umvers~ty Rosemary Wilson, Councilwoman Realtor and former V~rg~ma Beach school teacher and school board member Elected to C~ty Council ~n 2000 Bachelor of Science degree m Educabon from Old Dom~mon Umvers~ty James L. Wood, Councilman Vice President of J D & W, Inc, a commercial general contracting firm Elected to City Council in 2002 Bachelor of Science degree from Washington and Lee Umvers~ty. Certain City Council Appointees and Administrative Staff Members The C~ty Manager ~s responsible for planmng, orgamz~ng, d~recbng, and coord~nabng all achwbes of the C~ty. The C~ty Manager ~s also responsible for appolnbng and d~scharg~ng all City employees and officers, though responslblhbes may be delegated to subordinates A major respons~b~hty of the City Manager ~s the preparahon of the annual C~ty Operahng Budget and Capital Improvement Program The C~ty Attorney has management, charge, and control of all legal bus~ness of the City. The C~ty Attorney ~s chief legal adwsor to the C~ty Council, the C~ty Manager, and all C~ty departments and agencies It ~s the duty of the C~ty Attorney to advise the C~ty Councd concermng the legahty of acbons by the C~ty and to represent the City ~n all matters affecbng ~ts ~nterest. It is the responsibility of the Real Estate Assessor's Office to annually appraise all real property ~n the City In addition, this office administers the Land Use Assessment Program for qualifying farm and forest lands and processes the Tax Exemption Program for quahfylng semor c~bzens and d~sabled persons The C~ty Clerk's Office ~s responsible for recording and ma~nta~mng all leg~slabve documents and achons of the C~ty Council. Appointed Officials James K. Spore, City Manager since November 25, 1991 Prewously served as C~ty Manager of Garland, Texas (1985 to 1991), and Burnswlle, M~nnesota (1981 to 1985) Also served as the D~rector of Commumty Development for the C~ty of Lakewood, Colorado (1976 to 1981), and the C~ty of Elgin, Ilhno~s (1970 to 1976) Master of Pubhc Admimstrabon degree, University of Colorado, Boulder, Master of Urban Planning degree, Umvers~ty of Ilhno~s, Urbana A-5 Leslie L. Lilley, City Attorney since October 31, 1989 Previously Assistant City Attorney for the City from 1987 to 1989. Employed as associate with the law firm of Taylor, Walker & Adams, P C, from 1983 to 1987 Served as Assistant Commonwealth's Attorney for the C~ty from 1979 to 1983 Served as Assistant to the C~ty Manager for Intergovernmental Relabons from 1974 to 1976 Served as Budget Officer for the C~ty from 1972 to 1974 Bachelor of Science degree ~n Bus~ness Administration from Umvers~ty of Richmond, V~rglnla (1971), Master of Bus~ness Adm~mstrabon degree from College of William & Mary (1972), and Juns Doctor degree from T. C Williams School of Law, Umvers~ty of Richmond, Virglma (1978) Ruth Hodges Smith, City Clerk since January 1, 1979 Certified Mumclpal Clerk, Bachelor of Arts degree ~n Admln~strabon from Potomac State College of West V~rgm~a University. Steven To Thompson, Chief Financial Officer since July 1, 2000 Previously served as C~ty Manager for the C~ty of Greenville, South Carolina, from 1998 to January 2000 C~ty Manager from 1991 to 1998 and Assistant C~ty Manager from 1983 to 1991 for A~ken, South Carohna Recently a management consultant spec~ahzmg ~n ~nnovabons and ~mprovements in local government. Bachelor of Arts degree ~n Pohbcal Science from the College of Charleston, South Carolina (1977), and a Masters of Pubhc Adm~mstrabon degree from the Umverslty of South Carohna (1980) Patricia A. Phillips, Director of Finance since April 16, 1992 Previously served as D~rector of the Office of Research and Strategic Analys~s from 1975 to 1992 Also served as a pubhc accountant for Coopers and Lybrand from 1970 through 1975 Bachelor of Science degree ~n Bus~ness Adm~mstrabon, Magna Cum Laude, Old Dom~mon Umvers~ty Master ~n Bus~ness Adm~mstratlon degree, Old Dom~mon Umvers~ty Certified Pubhc Accountant s~nce 1972 Governmental Services and Facilities The C~ty provides general governmental services for its c~bzens includ~ng pohce and fire protection, emergency medical services, collection and d~sposal of refuse, water and sewer services, parks and recreation, libraries/culture, and maintenance of streets and h~ghways. Other services prowded by the City, which receive part~al funding from the Commonwealth of V~rg~nla, ~nclude public educabon ~n grades k~ndergarten through twelfth, and certain techmcal and special education, mental health assistance, health and social services, agricultural services, and judicial activities The City's ma~n municipal complex includes eight general administrative buildings, a school administration building, a public safety building, a city jail and a judicial complex In close proximity are a City garage complex, a h~ghway maintenance facility, a pubhc utilities operabonal maintenance facility, a waste management facility and a farmer's produce market There are four pohce precincts, 20 fire stabons, one fire training center, one central library along w~th six area hbranes, 204 developed c~ty parks, and 87 elementary and secondary schools located throughout the City. Some of the other major fac~hbes provided by the City include a convenbon center, the V~rg~ma Manne Science Museum, s~x recreational centers, a tenms complex and four mumc~pal golf courses Recently, the C~ty opened a 6,000 seat mulbpurpose sports stadium and an amphitheater, which books approximately 40 entertainment events a year The City of V~rg~ma Beach prowdes a comprehensive range of pubhc services charactensbc of ~ts pos~bon as the most populous c~ty ~n the Commonwealth of V~rg~n~a A-6 OVERVIEW OF GOVERNMENTAL ORGANIZATION AND SELECTED FUNCTIONS General S~nce 1990, the C~ty's government orgamzabonal structure has changed ~n response to the challenges of ~ncreased demand for quahty service, ~nfrastructure needs, potential reducbons ~n state and federal funding and a slowdown ~n populabon and revenue growth From 1991 to 1995, the C~ty government administration was organized into management teams to assist the City Manager m the operations of the City and the dehvery of services to citizens A Management Leadership Team ("MLT") also was estabhshed ~n 1991 to asstst the C~ty Manager w~th orgamzatlonal ~ssue ~denbficabon and resolubon S~nce 1991, the MLT has evolved and ~s now the executive body of government, ~nclud~ng the C~ty Manager, the Chief Operabng Officer, the Chief of Staff, the Chief Informabon Officer and the Chief F~nanc~al Officer, which ~ntegrates and aligns the orgamzat~on to address C~ty Councd's Dest~nabon Points and the major components of the V~rg~n~a Beach Quahty Serwce System (Bus~ness Strategy, Common Management, System Processes, Organizabonal Learning and Development, C~bzen Commumcabon and Interrelationships, Member Commumcabon and Interrelabonsh~ps and Indicator System) In 1995, the City expanded th~s team management approach. The V~rg~nla Beach Quality Service System ('~/BQSS") was developed as a way to organize the planning structure of the government and expand the team management approach The purposes of VBQSS is to create and ~mplement strategies to enable the C~ty to reach toward the vis,on created by C~ty Councd. It is an evolwng system that conbnues to adapt and change based on the needs of the City's customers It does not replace the existing departments and vertical hierarchy, but supplements ~t with a cross-funcbonal process. In 1995, staff work on C~ty Council's Desbnabon Points ~n~tlat~ve resulted in the creation of s~x businesses and five commons areas These s~x bus~ness areas were adopted by City Councd to reflect the manner ~n which the C~ty does "bus~ness" The s~x businesses of the C~ty are' Economic V~tahty, Safe Commumty, Quahty Physical Enwronment, Quahty Education and L~felong Learmng, Cultural and Recreational Opportumbes, and Family and Youth Opportumbes The ownership of these s~x businesses of the C~ty were assigned to Strategic Issue Teams In August 2002, a seventh bus~ness, Quality Organization, was estabhshed by C~ty Council to emphasize the Wrgm~a Beach mumc~pal orgamzabon as a quahty driven service prowder dehvenng cost effecbve services The focus of th~s business over the next three years ~ncludes Government Efficiencies and Effecbveness, Informabon Technology Plan, Member Investment, Morale and Retenbon, Orgamzabonal Learmng and Development, and C~t~zen Commumcabon and Involvement Commons Pohcy Teams also were established to lead and manage the C~ty's resources common to all departments. Commons Pohcy Teams address the following resources. Budget and Financ~al Resources, Facdlbes and Land, Human Resources, Informabon Technology and Pubhc Relations and Marketing Commons Policy Teams identify ~ssues and long term needs of the organlzabon, pnoribze such needs and make final recommendabons to the C~ty Manager and the MLT In January 2001 the Common Policy Teams were reahgned to form a Common Management Group to better manage the City's common resources for the benefit of the whole orgamzabon In August 1998, a "Strategy to Achieve C~ty Councd's V~slon for the Future" was pubhshed and d~stnbuted throughout the orgamzabon. There are two ma~n focuses of the Strategy' the community and the Government Organ~zabon. Th~s document further defines the work of the VBQSS and the v~s~on for the commumty. In October 2002, C~ty Staff developed a "3-Year Plan" enbtled "From V/sion to Reality." In concert with ongoing dehvery of programs and serwces, th~s plan focuses the City's collective efforts on City Council's pnontles and other strategic ~ssues. This plan w~ll guide the community ~n making its wslon a reality. A-6 In May 1996, the City received the Nabonal Innovabon Award, presented by the Los Angeles Chapter of the American Society of Pubhc Adm~n~strabon at the Transforming Local Government Conference ~n Long Beach, Cahforma The C~ty was one of s~x c~t~es nabonw~de selected to present a case study at the conference. Th~s nabonal award recognizes V~rgln~a Beach's excellence and ~nnovatlon ~n organ~zabonal development, strategic planning, quahty ~n~babves and process management In April 1999, the City was recognized for ~ts efforts to ~mplement the VBQSS by rece~wng the Medalhon Award from the 1998 U S Senate Producbv~ty and Quahty Award ~n the pubhc sector category for the Commonwealth of Virginia Functional Departments The Department of Agriculture prowdes educabonal and regulatory services ~n agriculture, home economics, 4-H, and community resource development. The department has three major d~ws~ons V~rg~n~a Tech extension servmes offers educabonal programs and technical mformabon on agriculture and horbculture. The D~v~s~on of Enwronmental Services prowdes expert ~nformabon on so~l and vegetabon The Farmer's Market provides a place for the sale of goods and products of local farmers and craftsmen and for the prows~on of farm-related community act~wbes. The function of the Department of Commumcations and Information Technology ~s the processing and electronic storage of ~nformahon used ~n the da~ly bus~ness of the C~ty The department collects, organizes and d~ssem~nates ~nformabon to all C~ty departments, C~ty agencies, and the pubhc school system It also prowdes consulbng services ~n related areas to mumc~pal users to assist them ~n formulabng goals, objecbves and long-range plans The department also manages school and C~ty v~deo production services and fac~hhes and provides reformation to the community on municipal government and the pubhc school system through da~ly cablecasbng of programs on the C~ty's Mumc~pal Cable Access Telews~on Stabon, Channels 47 and 48 The Convention and Visitor Development Department coordinates the adverbs~ng and promobon of tourist actlwtles and is responsible for bringing meetings, conferences, and conventions of large groups to V~rgm~a Beach The department operates a V~s~tor Information Center and the large convention center known as the Pawhon. Approximately 3 m~lhon tourists and convent~oneers ws~ted V~rg~n~a Beach ~n calendar year 2001, spending an estimated $647 9 m~lhon and generating over $53.3 mllhon in tax revenues The Economic Development Department promotes and encourages the economic growth and d~vers~ty of the C~ty The department works w~th the C~ty of V~rg~n~a Beach Development Authority to attract business and industry to the C~ty and to develop s~tes for new or expanding businesses ~n the C~ty's Business/Industrial Parks The department has won over a dozen awards ~n the last five years that recognize the C~ty as an outstanding bus~ness opportunity The Department of Emergency Medical Services coordinates the pre-hospital emergency care provided by the 10 volunteer Rescue Squads and 3 substations In Fiscal Year 2002, ~t answered over 32,000 calls for medical assistance Th~s care ~ncludes rap~d, safe response to the scene, proper treatment of the wcbm and prompt transfer to a hospital The department also provides all rescue squad training and coordinates the use of spec~ahzed resources ~nclud~ng EMS Special Operabons, pohce, fire, hospital personnel, d~spatchers and the N~ghhngale A~r Ambulance to deal with medical emergencies ~n the City Approximately 750 volunteers were active w~th the rescue squads ~n 2002 The Department of F~nance oversees the financial affairs of the C~ty and ensures the financial ~ntegr~ty of C~ty operabons. Departmental services ~nclude payment of all C~ty b~lls; maintenance of accounting records; payment of all C~ty employees and admm~strabon of employee benefits, prows~on of insurance and self-insurance, maintenance of the City's fixed assets inventory; procurement of all equipment, materials and services for all c~ty agencies, and coord~nabon and adm~n~strabon of the C~ty's long-term debt program A-7 The City's Fire Department, which is responsible for both fire prevention and fire suppression, handled over 23,000 fire and rescue inc~dents tn F~scal Year 2002. The City's firef~ghters perform the actual emergency responses to fires from the C~ty's 20 fire stations. In addition, 55 available volunteer f~refighters w~th proper training from the C~ty's f~re training center prowde a s~gn~ficant manpower contribution to the firef~ght~ng force The Emergency Services Office, whose normal da~ly operations are overseen by the F~re Department, ~s responsible for protecting the hves and property of V~rgin~a Beach c~t~zens during a major emergency d~saster The Office of the General Registrar ~s responsible for prowd~ng an accessible and fair means by which C~ty residents can register and vote. Maintaining 319,000 records, th~s office makes appropriate changes and/or deletions as required by law The number of registered voters was approximately 245,000 as of March 1, 2003 The Department of General Services provides support functions for C~ty departments. General Services consists of three major units' Building Maintenance, Landscape Services and Internal Service Support for,Automotive Services, Records Management and Ma~l D~str~but~on The Department of Housing and Neighborhood Preservahon designs programs involving capital ~mprovements, new construction, and rehab~htatlon to rewtahze areas. The department administers the State program, which subsidizes rent up to 70 percent for quahfied tenants and the Urban Preservation and Inf~ll Program, which provides permanent mortgage financing to quahfied persons ~n specified areas In addition, the Zoning Enforcement Unit ~nterprets and ensures comphance w~th the City zoning ordinance and other sections of the C~ty Code related to land use The Department of Human Resources ~s responsible for developing and managing the C~ty's personnel management programs to ensure an effective dehvery of services by the workforce The department prowdes services ~n apphcant counsehng, recruitment, tesbng, volunteer referrals, pohcy ~nterpretat~ons, fnnge benefits, grievance procedures, d~sc~phnary action, career counsehng, professional development, compensabon, employee safety, and occupational health services The Juvenile Probation Off/ce provides support services to the Juvenile and Domestic Relations D~stnct Court The office provides probation supervision, ~ntake services, and parole services for juveniles It prov~des court support by processing petitions and prepanng social background Investigations. The Department of Management Services develops and oversees the C~ty Operating Budget and Capital Improvement Program The department provides assistance and d~recbon to City departments for any amendments to the above programs. The department rewews and recommends alternative budget formats, prowdes multi-year forecasting of revenues and expenditures, evaluates City programs and services and assists departments ~n management ~ssues. The Department of Mental Health/Mental Retardation/Substance Abuse Services carries out ~ts mission of strengthening the health and prosperity of the community by planning, developing, ~mplement~ng, managing and evaluabng a system of mental health, mental retardation and substance abuse programs, services and faclht~es w~th~n the pohc~es of the V~rg~n~a Beach Community Serwces Board The Department and the Board work to develop a system of preventative, developmental, therapeutic, and training services to meet the mental health needs of V~rg~nla Beach c~t~zens. Th~s ~s accomphshed through program coordination w~th the Eastern State Hospital, Southeastern V~rgln~a Training Center for the Mentally Retarded, the private sector, and general community The Department of Museums and Cultura/Arts operates the V~rgln~a Manne Science Museum, the Franc~s Land House and the Adam Thoroughgood House The department coordinates projects and ~n~t~atlves for the preservation of the C~ty's historic resources, administers the V~rg~n~a Beach H~storlcal Register and provides support services to the V~rg~n~a Beach Arts and Humamt~es Commission The V~rg~n~a Marine Science Museum first opened ~n 1986 and was expanded to three t~mes ~ts original s~ze ~n 1996 Th~s newly renovated 120,000 square foot faclhty has doubled ~ts annual attendance to A-8 approximately 600,000 wsltors and takes v~sitors on a journey of water through V~rg~n~a's manne enwronment by way of exhibits that ~nclude a 300,000 gallon shark aquarium, hve otters, seals and many hands-on exhibits. It also ~ncludes a 3-D IMAX® Theater. The purpose of the Franc~s Land House ~s to collect, preserve and present h~stoncally accurate material reflecbng hfe ~n e~ghteenth century Pnncess Anne County. The house is also used for official C~ty receptions Approximately 20,000 ws~tors tour the house each year. The Adam Thoroughgood House provides tours and programs related to the ~nitlal Enghsh settlement area and 19th century hfe Approximately 10,000 ws~tors attend the tours and programs each year. The department also oversees three other properties, the DeW~tt Cottage (Atlantm W~ldfowl Heritage Museum), the Old Coast Guard Stabon and the Contemporary Art Center of V~rgm~a, which are owned by the C~ty and operated by private, non-profit orgamzat~ons. The Virginia Beach Arts and Humanities Commission serves ~n an adwsory capacity to City Councd on matters relating to cultural acbv~bes The Commission adm~msters pubhc funds to arts organizabons and monitors grants to assure fiscal respons~bd~ty The Department of Parks and Recreation provides a w~de range of h~gh quahty, year-round leisure programs that are responsive to the physical, mental, recreabonal and cultural needs of the c~bzens of V~rg~ma Beach. In F~scal Year 2002, the Parks and Recreation D~ws~on Special Revenue Fund, which ~ncludes the Parks D~ws~on and Recreabon D~ws~on, generated over $8 8 m~lhon in fees and charges The Golf Course Enterpnse Fund generated approximately $2 4 mdhon ~n revenue ~n F~scal Year 2002 The Parks Diws~on, in conjuncbon with the Department's Design and Development Diwsion, plans, acquires, constructs and maintains parks, playgrounds, pubhc beaches, golf courses and open spaces There are 202 developed C~ty parks, 187 of these are classified as neighborhood parks, 9 are classified as d~stnct parks and 6 are classified as community parks The Recreation D~v~s~on has respons~bd~bes ~n the following areas providing recreation and leisure services to adults, semor c~bzens and youths, organizing well-rounded athletic programs for persons from ten years of age and older, prowd~ng all d~sabled c~bzens the opportumty to receive the benefits of recreation and leisure ~n the least restncbve enwronment, operabng s~x recreabon centers located throughout the C~ty, operabng Before School and After School programs, and prowd~ng classes ~n the Performing Arts W~th the acqu~s~bon of Stumpy Lake natural area from the C~ty of Norfolk, the Golf Course D~v~slon manages four golf courses The Department of Planmng and Communrty Development prowdes policy and operational planning support ~n the areas of transportabon, land use, zomng, and environmental protecbon and management The department ~s responsible for mamtalmng a long-range Comprehensive Plan which prowdes guidance for the physical development of the C~ty The department rewews subdivision plans, site plans, and land management plans and prepares the monthly Planning Commission Agenda Its d~ws~on of Development Services provides customer-oriented management of plan rewew, utlhty, right-of- way, mowng and hauhng permit ~ssuance and surety adm~mstrabon The d~ws~on of Environmental Management coordinates many of the C~ty's enwronmental programs and serves as a point of contact for ~nformabon and ha~son w~th the community on environmental ~ssues. The department through ~ts Permits and Inspecbons D~v~s~on ensures comphance w~th C~ty and/or state building code standards w~th the ~nspecbon of all construction ~n the C~ty. The Pobce Department ~s composed of four major umts Adm~mstrabon, Support, Operabons and Invesbgabve D~v~s~ons The department operates through four precincts located throughout the C~ty. V~rg~n~a Beach's crime rate for 2002 was 37 5 crimes per 1,000 populabon, the lowest crime rate ~n more that 20 years Furthermore, ~n 2001, according to a Federal Bureau of Invesbgabon report, V~rg~n~a Beach's violent crime rate was 1.9 crimes per 1,000 populabon Th~s wolent crime rate, shared w~th one other c~ty half our s~ze, was the lowest for c~bes w~th populations of 200,000 or more. V~rgima Beach conbnues to be rated as one of the safest commumbes of its s~ze ~n the country A-9 The Department of Pubflc Health ~s responsible for promoting the best possible state of health for all Wrglma Beach c~t~zens. The department assumes primary respons~bd~t~es for providing protectwe, curative, and environmental health services when not otherwise provided by the private sector The Pubhc Health Department offers servmes and chmcs ~n the areas of pediatrics, dentistry, famdy planmng, immumzat~ons, home nursing, matermty, chest x-rays, venereal d~sease, health educabon, and enwronmental health. The Department of Pubflc Libraries manages s~x area hbranes along w~th a 95,000 square foot Central L~brary. The departments outreach services ~nclude a bookmobile, and special servmes for homebound and disabled c~t~zens ~ncludlng a subregional hbrary for the bhnd and hand~capped The department's other support services ~nclude a mumc~pal reference hbrary and a law hbrary. Dunng October 2000, the C~ty completed the expansion of the Pungo/Blackwater L~brary In 2001, the new South Rosemont Youth L~brary was completed, and ~n May 2003, the expansion of the Great Neck L~brary will be complete for a total hbrary system of 172,700 square feet The Department of Pubflc Ut~flt/es prowdes water and samtary sewer service to C~ty residents Its respons~bd~t~es ~nclude the ~nstallatlon and maintenance of more than 2,914 miles of water and samtary sewer hnes and the operabon and maintenance of 386 samtary sewer pumping stations, ten water pumping stations 0nclud~ng Lake Gaston), 13 water storage fac~htles with 30.25 m~lhon gallons of water capacity and 7,441 fire hydrants The department coordinates the eng~neenng and adm~mstrat~on for development of raw water supphes for the City and oversees the C~ty's water conservabon programs The Department of Public Works oversees the design and construction of new C~ty structures and transportabon systems, maintains a large port~on of the C~ty's ~nfrastructure (e g., roadways, bridges, storm water systems, beaches and traffic control devices), and provides for collecbon, recychng and d~sposal of sohd waste The adm~mstrat~on of the storm water management ut~hty ~s also ~ncluded as a respons~bd~ty of the department The Department of Social Serwces provides opportumt~es for c~t~zens ~n need to achieve self- support and self-suffic~ency. The department provides programs for children in child protection and prevenbon services, a~d to dependent chddren and foster care To assist adults, the department has programs in employment services, care for the elderly and emergency needs services In addition, ~t operates the Pendleton Child Service Center, a commumty treatment agency serving children of V~rg~ma Beach and Chesapeake, ages 12 and under, who are exhibiting serious antisocial and maladaptwe behaviors ~n the home, school and/or community The Volunteer Council coordinates the use of over 15,000 volunteers throughout C~ty departments. A-10 ECONOMIC AND DEMOGRAPHIC FACTORS Population Based on the Apnl 2000 census conducted by the U S Census Bureau, the populabon of the City of V~rg~n~a Beach was 425,257 Th~s census confirmed V~rg~n~a Beach as the most populous city ~n the Commonwealth of V~rg~n~a and the 34th largest c~ty ~n the Un~ted States The following table presents populabon figures for selected years POPULATION AND RATE OF CHANGE VIRGINIA BEACH AND THE UNITED STATES SELECTED YEARS Year Virginia Beach Rate of Change United States Rate of Chan,qe 1950 1960 197O 1980 1990 1995 2000 2001 2002 47~667 85.200 172.106 262 199 393 069 421 517 425 257 426 800 428 400 N/A 150,697 78 71% 178,464 102 00 203,211 52 35 227,225 49 92 249,398 7 23 262,765 0 89 281,421 0.36 285,317. 0 37 288,368 361 N/A 236 18.43% 926 13 87 000 11.82 000 9 76 000 5 36 906 7.10 559 1.38 698 1.07 Sources C~ty Department of Planmng Weldon Cooper Center for Pubhc ServIce, Umverslty of V~rg~n~a, U S Census Bureau and U S Department of Commerce, Bureau of Economic Analys~s FIVE MOST POPULOUS CITIES IN VIRGINIA City 1990 Population 2000 Population V~rg~n~a Beach 393,069 425,257 Norfolk 261,229 234,403 R~chmond 203,056 199,184 Newport News 170,045 197,790 Chesapeake 151,976 180,150 Source U S Census Bureau Income Presented below are tables on per capita ~ncome, total personal ~ncome and median household effecbve buying ~ncome Per capita ~ncome ~s total personal ~ncome d~wded by the area's res~denbal populahon Total personal ~ncome ~s a measurement of the area's total ~ncome from all sources Effecbve buying ~ncome ~s a measurement of d~sposable income or after-tax ~ncome PER CAPITA INCOME 1980 1990 1997 1998 1999 2000 2001 V~rg~n~a Beach $10,397 $20,896 $26,515 $28,144 $29,322 $30,834 $32,076 Norfolk 8,820 15,048 20,353 21,313 21,848 22,693 23,271 Chesapeake 9,016 17,464 23,088 23,923 24,849 26,389 27,807 Portsmouth 8,619 15,269 19,252 19,939 20,270 21,202 22,173 Commonwealth ~ Vl~n~a 9,922 20,527 26,385 27,968 29,246 31,120 32,338 Un~ted States 10,030 19,572 25,412 26,893 27,880 29,760 30,413 Source U S Department of Commerce, Bureau of Economic Analys~s Most recent ~nformat~on available A-11 TOTAL PERSONAL INCOME (in ~ Millions) 19,,80 1990 1997 1998 1999 2000 2001 V~rg~n~a Beach $2,882 $ 8,265 $11,188 $11,830 $12,385 $13,156 $13,768 Commonwealth of V~rg~n~a 54,267 127,614 180,190 193,007 204,728 221,078 233,730 V~rg~n~a Beach as a percent of state 5 3% 6 5% 6.2% 6 1% 6 1% 5 9% 5 9% Source U S Department of Commerce, Bureau of Economic Analys~s Most recent mformat~on available The following table shows median household effective buying ~ncome for the C~ty, the Hampton Roads MSA, the Commonwealth of V~rg~n~a and the Un~ted States for the last ten calendar years, followed by comparabve tables showing V~rg~n~a Beach as a percentage of the various regions MEDIAN HOUSEHOLD EFFECTIVE BUYING INCOME Hampton December 31 Virginia Beach Roads MSA Commonwealth of Virginia United States 1993 $40,838 $35 1994 42,944 36 1995 36,982 30 1996 38,453 31 1997 39,654 32 1998 40,509 33 1999 41,994 34 2000 43,911 36 2001 43,311 36 2002 unavailable 125 $37. 836 39. 966 34. 953 35. 194 36. 509 37. 942 39, 248 41 207 41 838 $35,O58 463 37,070 136 32,238 405 33,482 802 34,618 740 35,377 709 37,233 810 39,129 095 38,365 December 31 Virginia Beach Hampton Roads Commonwealth of Virginia As a Percent of U.S. As a Percent of U.S. As a Percent of U.S. 1993 116 49% 100 20% 107 94% 1994 115 85 99 37 106 46 1995 114.72 96.05 105 89 1996 114 85 95 43 105 74 1997 114 55 95 08 106 31 1998 114 51 94 72 106 68 1999 112 79 93 85 106 65 2000 112 22 92.64 106 85 2001 112 89 94 38 107 12 2002 unavailable A-12 December 31 Virginia Beach as a Percent of MSA Virginia Beach as a Percent of State 1993 116.26% 107 93% 1994 116 58 108 82 1995 119.43 108 34 1996 120.34 108 61 1997 120.48 107 75 1998 120.89 107.34 1999 120.18 105 75 2000 121.14 105 03 2001 119.62 105 39 2002 unavadable Source Sales & Marketing Management/2002 Housing and Construction The data ~n the following tables are presented to ~llustrate various housing charactensbcs for the C~ty. As of January 1, 2002, the total estimated number of dwelling umts ~n the C~ty was 164,002, excluding md~tary housing S~ngle-famdy umts represented 59 percent of th~s total The d~stribut~on of all dwelling units is as follows DWELLING UNITS BY TYPE (Estimated as of January 1, 2002) Units Percent S~ngle Famdy 96,269 59% Duplex 4,538 3 Town house 20,185 12 Mulb-Family 43,010 ..26 Total 164,002 100% Note Does not ~nclude Mdltary Combined Umts Source CIty Department of Planmng A-13 In calendar year 2002, the C~ty issued 43,900 permits valued at $774 m~lhon For January through June of 2003, the C~ty ~ssued 21,863 permits valued at $574 m~lhon The following table presents a further breakdown on certain building permits by type. NUMBER OF CERTAIN BUILDING PERMITS ISSUED AND VALUE(i) Calendar Year Residential12) Commercial Industrial Other Total Value 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 (through June) I 722 1 379 I 515 1 4O9 I 276 1 553 1 305 I 753 2,218 2,522 975 826 4 74O 9 813 21 1,011 25 1,050 33 1,111 32 1,100 32 1,024 23 1,096 7 982 2 463 2 16.605 16.257 16499 18.750 18.701 19.597 16.737 14 934 14 858 16.277 8,472 $282,255,459 279,298,570 336,173,287 342,592,049 367,585,973 466,077,774 455,353,722 530,576,046 667,406,046 699,990,772 368,885,784 (4) Represents building and mechamcal permits only Does not ~nclude electncal, (2) One residential building permIt does not necessanly equal one res~denbal resIdential umts plumbing, gas and other types of permits umt, m many ~nstances one permit ~s for multiple Source C~ty Department of Permits and Inspections The following table presents annual construcbon ~nformabon for the C~ty, ~nclud~ng the number and assessed value of residential and commercial un~ts Res~denbal and commercial construcbon dunng F~scal Year 2002 totaled 2,523 res~denbal building un~ts and 2,027 commercial construcbon permits for a total value of $380,064,317 NEW CONSTRUCTION: NUMBER OF UNITS AND ESTIMATED VALUE Residential Construction Commercial Construction Fiscal Number of Estimated Number of Estimated Total Estimated Year Units V, alue Permits Value Value 1993 1,791 $171,130,203 1,696 $84,052,676 $255,182,879 1994 2,016 202,992,500 1,814 58,936,004 261,928,504 1995 1,508 162,487,690 1,765 35,976,836 198,464,526 1996 2,330 216,411,267 1,936 108,931,649 325,342,916 1997 1,562 182,876,814 1,902 64,239,160 247,115,974 1998 1,783 253,002,425 2,020 120,357,805 373,360,230 1999 2,531 281,054,751 2,082 86,933,610 367,988,361 2000 1,829 246,813,748 2,077 170,897,797 417,711,545 2001 2,138 219,533,642 2,189 168,831,092 388,364,734 2002 2,523 253,494,922 2,027 126,569,395 380,064,317 Source C~ty Department of Permits and Inspecbons A-14 Employment Employers in the City, excluding md~tary, prowded jobs for 169,329 persons through the fourth quarter of calendar year 2002 The following table presents the number of estabhshments, employment, and quarterly gross wages for the fourth quarter of calendar year 2002 CITY OF VIRGINIA BEACH NUMBER OF ESTABLISHMENTS, EMPLOYMENT AND QUARTERLY GROSS WAGES QUARTER ENDED DECEMBER 31, 2002 Average Number of Average Emp Quarterly Weekly Wages Industry Group Estabhshments For quarter Gross Wages Per Employee Pnvate Agnculture, Forestry, F~sh;ng and M~mng 19 88 $ 404,011 $ 353 Construc'oon 1361 11,797 107,103,201 698 Manufactur, ng 224 5,597 46,770,968 670 Transportat;on, Commumcabons and 201 2,349 17,437,764 571 Utd~bes Wholesale and Retad Trade 1,970 31,069 185,358,575 459 Financial, Insurance and Real Estate 1,150 11,801 122,101,003 796 Information 155 4,423 41,552,189 723 Se rvEces 4,918 75,566 507,202,907 513 Total Pnvate(~) 9,998 142,690 $1,027,930,618 $ 554 Pubhc State Government 29 1,761 $12,370,323 $ 540 Local Government 51 19,455 156,653,492 619 Federal Government 2,5 5,423 52,406,361 743 Total Pubhc 10,5 26,639 $ 221,430,176 $ 639 TOTAL 10.10__3 169.___32__~9 ~ $ 568 ¢)lmmatenal amounts have been suppressed ~n certain ,ndustry sub-categories, which are ~ncluded ~n the total amounts Source V~rg~n~a Employment Commission, Economic Information Services D~ws~on, based upon most current and available ~nforrnabon The following table ~s a breakdown of employment by sector in the C~ty EMPLOYMENT BY SECTOR AS A PERCENTAGE OF TOTAL QUARTER ENDED DECEMBER 31, 2002 Services Trade Government F~nanc~al, Insurance and Real Estate Construcbon Transportabon, Communication and Ubht~es Information Manufactunng Agriculture Total 44 6% 183 157 7O 70 14 26 33 01 100 0% Note Not seasonally adjusted Source V~rg~ma Employment Commission, Economic Informabon A-15 As ~llustrated in the table below, the unemployment rate for the C~ty has, for the most part, been consistently lower than the rates for the Metropohtan Stat~sbcal Area (MSA), the Commonwealth of Wrgm~a and the Umted States ANNUAL AVERAGE UNEMPLOYMENT RATE 1997 to 2003 19~7 1998 1999 2000 2001 2002 2003(2) VlrgJma Beach 4.0% 2.8% 2 7% 2 2% 3 0% 3 5% 4 0% MSA(~) 4 8 3 4 3 4 2.6 3 5 4.2 4 8 Commonwealth of V~rg~n~a 4 0 2 9 2 8 2 2 3 0 4 1 4 2 Un~ted States 4 9 4 5 4 2 4 0 4 8 5 8 6 4 (~) MSA ~ncludes the C~bes of Chesapeake, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, V~rg~ma Beach and W~ll,amsburg and the Counties of Gloucester, Isle of W~ght, James C~ty, Mathews and York Also ~ncludes Cumtuck County, North Carohna (2) Unemployment rates are as of December 2002 Source U S Department of Labor, Bureau of Labor Statistics, and V~rg~ma Employment Commission Business and Industry The C~ty has five major concentrabons of office, ~ndustr~al and commercial property - A~rport Industrial Park, Greenw~chNV~tchduck Corridor, Central Business D~stnctJPembroke area, Oceana West Corporate Park/Lynnhaven Corridor, and Corporate Landing Bus~ness Park A~rport Industrial Park industrial and office space operahons are located here The park encompasses 250 acres w~th 4 m~lhon square feet of hght Nabonal and ~nternabonal manufactunng, warehousing and d~str~bubon Greenw~ch/W~tchduck Corridor The Greenw~ch/Witchduck corridor currently contains 1.3 m~lhon square feet of Iow and m~d-r~se suburban office space ~n bus~ness parks ~nclud~ng Interstate Corporate Center, Corporate Woods and Commerce Park that house corporate headquarters and business operabons of many types The Corridor currently contains 1 8 m~lhon square feet of hght ~ndustnal space and fac~hhes housing regional warehousing and d~str~bubon operations. Central Bus~ness D~stnct/Pembroke Area The CBD encompasses 500 acres and I 9 m~lhon square feet of Iow and h~gh-r~se office space ~n bus~ness parks ~nclud~ng Town Center, Pembroke Office Park, Corporate Center and Convergence Center The Town Center of Vlrg~ma Beach ~s a new urban "Ma~n Street" style development located w~th~n the core of the C~ty's Central Bus~ness District Phase I of the project ~s complete and ~ncludes a 14-story office tower on top of a 9-story, 469,000 square foot parking garage and surrounded by retail and add~bonal office space Phase IA ~s scheduled to open ~n late 2003 or early 2004 and includes a 176- room H~lton Garden Hotel and a regional bank Phase II, which ~ncludes add~bonal retail and entertainment space, broke ground in spnng 2003 The project will eventually span 25 acres and 850,000 square feet of Class A office space, 750,000 square feet of upscale retail, fine dining, a luxury hotel and apartments and free structured parking The corporate c~t~zens ~n the area ~nclude numerous financial, ~nformabon processing, law and professional service firms Oceana West Corporate Park/Lynnhaven Corridor The park encompasses 1,100 acres and currently contains 1.5 m~lhon square feet of Iow and m~d-nse suburban office space and 4 1 m~lhon square feet of hght ~ndustnal space 195 acres are presently available for development Corporate c~bzens ~n Oceana West and adjacent bus~ness parks ~nclud~ng Refiechons, Sabre, Lynnhaven Industrial Area, A-16 Oceana East and Taylor Farms Industrial Park, comprise a w~de variety of domesbc and foreign firms, ~nclud~ng corporate headquarters and manufactunng, warehousing and d~stnbut~on operabons Corporate Landing Bus~ness Park The park encompasses over 325 acres and ~s owned and operated by the C~ty of V~rgm~a Beach Development Authority 125 acres are presently avadable for headquarters, professional services, research and development, office buddings, retad and two conference centers Corporate c~bzens ~nclude world headquarters, regional offices, and h~gh-tech manufactunng Th~s master-planned, mulb-faceted park contains 38 acres of lakes, jogging trads, green space and recreabonal opportumbes Throughout V~rg~n~a Beach there are many add~bonal smaller nodes of office and commercial act~wty ~ncludmg L~ttle Neck, Oceanfront, B~rdneck/Laskm Road, F~rst Colomal and Kempswlle CITY OF VIRGINIA BEACH MAJOR PRIVATE EMPLOYERS Number of Firm Type of Business Employees Lynnhaven Mall LiIhan Vernon Corp Pembroke Mall Sentara V~rg~ma Beach General Hospital GEICO Sbhl, Incorporated Cox Commun~cabons Av~s Cendant The V~rg~man-Pdot AMERIGROUP Corp Chnsban Broadcasting Network Sentara Health Management Household Recovery Services U S Postal Service Abacus Commumcabons, LP Umted Parcel Service Sentara Hospital Bays~de M&G Electromcs Corporabon Navy Exchange Service Command (NEXCOM) Verlzon AmSec LLC Southland Technologies AIItel Commumcabons Nabonal Leisure Group/The Vacabon Store Retad Trade 3,500 Catalog D~stnbubon Center 1,700 Retail Trade 1,700 Medical Services 1,515 Insurance Manufacturer of Portable Outdoor Power Equipment Cable Telews~on and Commumcat~ons Cendant Processing Center Print Med~a HMO Prowder of Medicaid M~mstry Educabon & Commumcabons Medical Services Financial Recovery Services Postal Dehvery Telecommun~cabons Sales and Installabon Small Parcel Sh~pper Medical Services Manufacturer of W~nng Harness Sets Corporate Headquarters for Navy Exchange System Telecommumcat~ons Eng~neenng and Computer Services Gaskets for Auto Industry Commun~cabons Travel Services 1,500 1,300 1,200 933 977 9O0 850 600 575 550 540 540 5O6 5O0 500 5O0 50O 490 480 45O Source Department of Economic Development, April 2003 A-17 Retail Sales The table presented below ~s a summary of the C~ty's taxable retail sales; ~t does not ~nclude sales which are exempt from tax Specifically exempt from the sales tax under Secbons 58-441 6 of the Wrg~n~a Retad Sales and Use Tax Act are sales of alcohohc beverages ~n government stores, sales of certain motor vehicles, traders and sem~traders, mobile homes, and travel traders, and sales of certain motor vehicle fuels Also, the figures do not ~nclude non-taxable sales on mlhtary bases in the C~ty eshmated to be ~n excess of $125,000,000 annually REGISTERED RETAIL/WHOLESALE ESTABLISHMENTS AND TAXABLE SALES Taxable Retail Calendar Year Sales 1993 $2,657,453,188 1994 2,810,901,704 1995 2,948,967,853 1996 3,021,817,302 1997 3,172,382,057 1998 3,343,759,258 1999 3,446,988,609 2000 3,655,862,619 2001 3,683,752,990 2002 3,903,205,018 Source V~rg~n~a Department of Taxabon Tourism and Conventions In calendar year 2002, more than 3 mdhon out-of-town ws~tors arrived ~n the City. These ws~tors spent approximately $698 1 m~lhon, an increase of 7 7 percent over 2001, dunng their stay for accommodations, meals, entertainment and other services and d~rectly created about 11,000 jobs ~n the C~ty and an additional 5,400 jobs ~n the Hampton Roads region V~sltor expenditures generated $61.8 mdhon ~n direct C~ty revenue, a 15 5 percent increase over 2001 Hotel occupancy rose to 62 4 percent for 2002, an increase of nearly 5 percent over 2001 Estimates for 2002 shows 201,549 convention and trade show delegates attended 515 meebngs ~n the Convention Center and at the C~ty's more than two dozen convenhon hotels, producing $66 9 mdhon ~n estimated gross revenue Of this amount, an estimated $4 7 mdhon went directly to the City as tax revenue. The C~ty's efforts to attract participatory sporting events has made a meaningful ~mpact For 2002, approximately 55,000 athletes competed ~n 22 events resulting ~n 72,800 room mghts and approximately $20 m~lhon ~n d~rect spending The C~ty Councd has approved funding for a new convention center The $197 25 mdhon 505,000 square foot facd~ty w~ll ~nclude the following 142,000 square foot Exhibition Hall, 31,000 square foot ballroom, 29,000 square feet of meeting space and 2,100 parking spaces. Th~s ~s three hines the s~ze of the current convention center. The new convention center fac~hty w~ll be located on the same s~te as the C~ty's ex~sbng facd~ty The construchon wdl be phased ~n to enable the ex~st~ng convention center to remain open at all hmes It ~s estimated that the first phase of the facihty could open ~n 2005 and wdl ~nclude the ballroom, one-third of the Exhibition Hall, two-th~rds of the meeting space and half of the facility's parking The second phase ~ncludes the rema~mng port~on of the Exhibition Hall and meehng space. The second phase ~s eshmated to open in early 2007 after the opemng of the m~t~al phase A-18 The C~ty and the City of Virginia Beach Development Authority have entered into a pubhc/pnvate ~nvestment partnership for a H~lton Resort Hotel and Conference Center and a pubhc parking complex at 31st Street on the oceanfront The hotel w~ll be a 22-story luxury hotel w~th 300 rooms An adjacent pubhc parking garage is expected to contain approximately 1,000 spaces, and ~t ~s anbclpated that the parking fac~hty w~ll be financed w~th lease revenue bonds Tourism and convenbon acbwty generate tax revenue for the C~ty, particularly ~n the form of a hotel room and meal tax and a restaurant tax, as ~llustrated ~n the table below HOTEL ROOM AND MEAL TAX AND RESTAU RANT TAX RECEIPTS FISCAL YEARS 1993 THROUGH 2003 Fiscal Year Total Tax Receipts 1993 $23,205,359 1994 25,594,361 1995 26,484,147 1996 28,595,940 1997 30,512,485 1998 32,475,690 1999 33,740,422 2000 35,712,011 2001 37,114,658 2002 45,631,284(1) 2003 52,062,671(unaudited) (4) The meal tax was ~ncreased from four and one-half to five and one-half percent, effecbve July 1, 2001, and the hotel room tax was ~ncreased from five and one-half percent to e~ght percent, effecbve November 1,2001 Source C~ty D~rector of F~nance Military Four m~htary bases ~n Virginia Beach have an approximate combined payroll of $1.1 b~lhon for 35,000 armed services and c~whan workers Due to Operabon Iraq~ Freedom, local troop deployments are approximately double the typical levels, however, as of th~s wnbng, m~htary operabons have been qu~te successful, which may md~cate that no additional deployments w~ll be necessary and some of the deployed troops have returned Wh~le the first Gulf War d~d negabvely ~mpact the local economy, the war ~mpact ~n 2003 will be less because the economy is relahvely more healthy (more jobs), the m~htary represents a smaller part of the economy and because the current level of deployment ~s approximately 11,000 below the level experienced dunng the first Gulf War Further, prospects remain bright over a shghtly longer t~me horizon M~htary personnel are scheduled to receive a healthy pay ~ncrease for th~s year Defense spending is also projected to ~ncrease over the next several years. F~nally, the region has already been ~denbfled as a s~te for centrahzed command and training for m~htary forces based ~n the United States, which means local m~htary downsizing ~s unhkely Oceana Naval Air Station Oceana Naval A~r Stabon ~s the Umted States Navy's largest Master Jet Base, home to most F/A 18 Hornet Squadrons on the east cost and the only a~r station ~n the Umted States with the F-14 Tomcat A total of 20 strike/fighter squadrons with 310 aircraft are assigned with over 13,000 active duty personnel and over 2,100 c~whan employees The largest employer ~n V~rg~n~a Beach, the a~r stabon's annual payroll ~s over $600 milhon A-19 L~tle Creek The Naval Amphibious Base, L~ttle Creek, the largest base of ~ts kind ~n the world, is the major operabng base for the amphibious forces of the Un~ted States Atlanbc Fleet L~ttle Creek has an annual payroll of $232 m~lhon for approximately 7,700 m~htary personnel and 5,200 c~whan employees. Fort Story Fort Story is an Army base estabhshed as a coast artillery post in 1917 Fort Story ~s the Army's Log~sbcs-Over-The-Shore (LOTS) and ~s the Army's only salt water pur~flcabon tra~mng s~te. Fort Story ~s also ubhzed by Navy and Marine tenants and as a penod~c training s~te for acbve and reserve Army, Navy, Marine, and A~r Force un~ts and ROTC detachments Fort Story has an annual payroll of approximately $70 2 m~lhon for 1,500 m~htary and c~whan employees Dam Neck Fleet Combat Training Center, Atlanbc, Dam Neck's primary m~ss~on ~s to prowde training ~n the operation and employment of combat d~recbon and control systems The average base populabon ~s 5,000 persons and the total mlhtary and civilian payroll ~s approximately $224 m~lhon Source Pubhc Affa,rs Officers at each Mlhtary Base Medical Facilities In 2002, there are two major hospitals ~n the C~ty w~th a combined total of 432 beds In add~bon, there were 19 emergency centers for medical assistance Approximately 1,043 doctors ubhze these hospitals and 314 denbsts practice ~n the C~ty Agribusiness In 2002, the economic ~mpact of the agricultural community was $51 8 m~lhon, based on products valued at $16.2 m~lhon. There are 147 farms ~n the C~ty w~th approximately 32,980 acres of land under culbvabon Agricultural ~ncome ~n V~rg~n~a Beach was down during 2002 because of adverse weather cond~bons and Iow crop prices V~rglnla Beach has a horse populabon of approximately 2,300 animals valued at $23 7 m~lhon, ranking V~rg~n~a Beach 10th ~n the state for total value of horses A-20 Education Available w~thln the C~ty ~s a w~de variety of educabonal fac~hbes and programs, ~nclud~ng pubhc elementary, junior and sen~or h~gh schools, private and parochial schools, and e~ght h~gher educabonal fac~hbes In terms of pubhc enrollment, the C~ty's pubhc school system ~s the largest c~ty school system ~n the Commonwealth of Virginia PUBLIC EDUCATION FACILITIES/PROGRAMS June 30, 2002 (1) Located in Pnncess Anne High School (2) Located ~n Ocean Lakes High School 54 Elementary Schools 13 M~ddle Schools 11 Semor H~gh Schools 1 Technical and Career Educabon Center 1 Center for Effecbve Learning 1 V~rg~n~a Beach Central Academy 1 Center for the G~fted and Talented 1 Adult Learning Center 1 Open Campus H~gh School 1 Kemps Landing Magnet School 1 Internabonal Baccalaureate Magnet Center(1) 1 Ocean Lakes H~gh School Math/Science Center(2) Source Bus~ness Services Office, V~rg~n~a Beach Pubhc Schools Public Schools. The C~ty's pubhc school March 31 average da~ly membership totaled 75,436 for the 2002-2003 school year, a shght decrease of 0 11 percent over the prewous year Summarized below are the March 31 average da~ly membership and annual percentage change for the school year 1993- 1994 to school year 2002-2003 PUBLIC SCHOOLS STUDENT POPULATION SCHOOL YEARS 1993-1994 TO 2002-2003 School Year Number of Students Percent Change 1993-94 74 1994-95 75 1995-96 75 1996-97 76 1997-98 76 1998-99 76 1999-00 76 2000-01 76 2001-02 75 2002-03 75 .251 1.25% .264 1 36 898 .84 265 .48 8O5 .71 949 19 773 (.23) 065 (92) 518 (72) 436 (.11) Source Bus~ness Serwces Office, V~rg~n~a Beach Pubhc Schools Private and Parochial Schools. There are 14 pnvate and parochial schools ~n the C~ty Approximately 5,800 students are enrolled ~n these schools A-21 Higher Education. V~rg~ma Beach's h~gher educabonal resources include the V~rg~n~a Beach H~gher Educabon Center (a partnership of Old Dominion and Norfolk State Umvers~tles), V~rg~n~a Wesleyan College, Tidewater Community College, and Regent University Virginia Beach is home to branch campuses of George Washington Umvers~ty, the University of V~rg~ma, V~rg~ma Polytechmc Institute and State Umvers~ty and St Leo's College. T~dewater Community College, w~th total enrollment of more than 20,000, ~s a d~ws~on of the V~rg~n~a Commumty College System The V~rgmla Beach campus has an enrollment of approximately 10,000 Th~s two-year college offers general, occupational-technical, and university parallel-college transfer educabon, represenbng the largest post-secondary ~nsbtubon ~n the region T~dewater Commumty College ~s a resource for bus~ness and ~ndustry to gain techmcal employees, as well as expertise for tra~mng and retra~mng programs for current employees V~rg~ma Wesleyan College ~s a four-year hberal arts private college located on the V~rgln~a Beach/Norfolk boundary hne It has an enrollment of approximately 1,400 students Regent Umvers~ty has an enrollment of approximately 2,500 with graduate schools of Bus~ness Adm~mstratlon, Education, Law, Public Policy, D~wmty, Psychology and Counseling, the College of Commumcabons and The Center for Leadership Studies The V~rglnla Beach H~gher Education Center is a joint venture between the City, Old Domlmon Umvers~ty and Norfolk State Umvers~ty. The C~ty donated 36 acres of land for an 84,000 square foot undergraduate center The facilities opened ~n the fall of 1999 and has an enrollment of approximately 2,400 students w~th a capacity of 5,000. Debubng ~n the fall of 2002, the Advanced Technology Center ~s a joint venture between Tidewater Community College, the Virginia Beach Public Schools and the City to provide techmcal tra~mng for h~gh school and college students pursuing pos~bons m fields such as telecommumcabons, cop~er technology and computer programming and repair In add~bon, the Center provides space for existing and new businesses to enhance the sk~lls of their employees The Center has a state-of-the-art theater for conferences, meebngs and training sessions The $23 mdhon center ~s the first of ~ts kind ~n the Commonwealth and received state funding of $10 mdhon w~th the C~ty providing the remaining funds A-22 CITY INDEBTEDNESS AND CAPITAL PLAN Limitations on Incurrence of Debt Pursuant to the Constitution of Virginia (the "Constitution") and the Public F~nance Act of 1991, Chapter 26, T~tle 15 2, Code of V~rg~ma of 1950, as amended, a c~ty ~n V~rg~ma ~s authorized to ~ssue bonds and notes secured by a pledge of its full faith and credit and unlimited taxing power The Consbtubon and the Public F~nance .Act of 1991 also hm~t the ~ndebtedness which may be incurred by c~bes to 10 percent of the assessed valuabon of real estate subject to local taxation There ~s no requirement ~n the Consbtubon or the Code of V~rg~ma that the ~ssuance of general obhgabon bonds of the City be subject to approval of the qualified voters of the City at referendum As of June 30, 2003, the total assessed value of real property ~n the C~ty was $26,843,207,573 which translates into a debt hm~t of $2,684,320,757 The City's net obhgabons subject to debt hm~tat~ons as of June 30, 2003, totaled $584,630,485 and represented 21 8 percent of th~s hm~t The C~ty Charter further hm~ts the C~ty's power to create debt It prowdes that no bonds or notes (other than refunding bonds, revenue anbc~pabon notes, revenue bonds, and other obligations excluded from the C~ty's debt hm~t under Section lO(a) of Article VII of the Consbtubon) shall be ~ssued until their ~ssuance has been authorized by a majority of the qualified voters of the C~ty vobng ~n an elechon on the quesbon. The C~ty Charter further provides, however, that the C~ty Councd may authorize bonds or notes w~thout an elecbon in any calendar year in such amounts as shall not ~ncrease the total indebtedness of the City, as determined ~n the manner set forth ~n Secbon lO(a) of Article VII of the Consbtubon, by more than $10,000,000 above the amount of such indebtedness at the beginning of such calendar year For purposes of compubng the annual hm~tabon on the amount of bonds or other obhgabons that may be ~ssued w~thout an elechon, authorized and umssued bonds or other obhgabons which could have been issued w~thout an elecbon on December 31 in the year they were authorized may be ~ssued ~n a subsequent year w~thout affecting the annual hm~tabon for such subsequent year In add~bon, refunding bonds will not be ~ncluded for purposes of determ~mng the amount of bonds or other obhgabons that may be ~ssued w~thout an elecbon ~n any calendar year Contractual obhgabons of the C~ty other than bonds and notes are not ~ncluded w~th the annual hm~tabons described here~n Debt Management Policies The C~ty has developed a series of Debt Management Pohc~es to prowde a funcbonal tool for debt management and capital planmng The pohc~es reiterate the C~ty's commitment to pnnclples such as rap~d pnnclpal rebrement, maintaining sufficient working capital to avoid the use of short-term borrowing for operabng purposes, and the use of self-support~ng or revenue-supported debt where appropriate The pohc~es also estabhsh the following "target" levels for these key debt rabos: Ratio Of Overall Net Debt To Estimated Full Market Value. Th~s rabo ~nd~cates the relahonsh~p between the C~ty's debt and the taxable value of property ~n the City. It ~s an ~mportant ~ndlcator of the C~ty's abd~ty to repay ~ts tax-supported debt, since property taxes are a major revenue source A small rabo ~nd~cates that the C~ty wdl be better able to w~thstand economic downturns It ~s the C~ty's pohcy goal that the computed value of th~s rabo should not exceed 3 5 percent of esbmated full market value Overall Net Debt Per Capita. Th~s rabo ~nd~cates the per capita debt burden and is a general ~nd~cabon of the C~ty's debt burden A smaller rabo ~nd~cates a hghter burden. It ~s the C~ty's pohcy goal that the computed value of this rabo should not exceed $1,500 per capita In the approved F~scal Year 2002-2007 Capital Improvement Program ("CIP"), C~ty Councd has authorized additional debt for four new projects that wdl ~mpact the current net debt per capita ratio whereby ~t wdl exceed the $1,500 m future years However, all other key debt rabos wdl remain below their threshold level. A-23 The four projects are a new convenbon center, a new theater, add~bonal parking at the V~rg~ma Marine Science Museum, and an open space ~n~t~abve These add~bonal projects wdl negabvely ~mpact, ~n the short-term, the net debt per capita rabo Based on the present schedule of actlwbes, the City wdl exceed the net debt per capita rabo of $1,500 beg~nmng ~n F~scal Year 2004 At ~ts peak ~n F~scal Year 2007, the debt per capita rabo ~s esbmated to approach $2,100 net debt per capita due to the inclusion of the above projects In the long-term, beyond the current ClP, the net debt per capita rabo ~s projected to track downward and to return to a level w~th~n the current pohcy hm~t City Council has prowded the resources needed to support these projects through ~ncreased taxes. Whde much wdl h~nge on the success of the convenbon center and ~ts abd~ty to generate add~bonal revenue, ~t ~s felt that the add~bonal level of debt can be adequately supported despite the C~ty exceeding ~ts net debt per capita rabo Ratio Of Debt Per Capita To Per Capita Personal Income. Th~s ratio ~s a measure of the capacity of citizens to finance tax-supported debt A Iow rabo means that taxes required to repay debt represent a smaller porhon of the average c~bzen's ~ncome It ~s the C~ty's pohcy goal that debt per capita should not exceed 6 5 percent of per capita ~ncome. Ratio Of Annual Debt Service To General Government Expenditures. Th~s ratio measures the City's ab~hty to repay debt w~thout hampenng other C~ty services. A small rabo indicates a lesser burden on the C~ty's operabng budget Th~s computahon as a pohcy goal should not exceed 12 5 percent KEY DEBT RATIOS Fiscal Year Ended June 30 June 30 .1999 2000 200'1 2002 2003 2003(6) Overall Net Debt and Lease Obhgat~onsm $524,144,978 $558,142,477 $559,258,300 $609,472,861 $607,274,940 $772,274,940 Overall Net Debt Per Capita(2) $1,242 $1,312 $1,307 $1,411 $1,392 $1,770 Rabo to Esbmated-Full Value(3) 2 6% 2 6% 2 5% 2.5% 2 5% 3 1% Ratio of Per Capita Debt to Per Capita Income(~) 4 30% 4 30% 4 07% N/A N/A N/A Rabo of Annual Debt Service to General Government Expenditures 8 7% 7 9% 7 9% 7 7% 7 7%¢) 7 7($) (~) Includes bonded debt and other long term obhgabons charged to the General Fund and Virg~ma Manne Science Museum Enterpnse Fund Does not include debt charged to the Water and Sewer or Storm Water Enterpnse Funds (2) Populabon esbmates as of each January 1st by C,ty Planmng Department, except for 2000, wh,ch ~s by the U S Department of the Census, and FY 2001, 2002 and 2003, which are esbmated (3) Real property is assessed at 100 percent of fair market value (4) Per capita mcorne figures from U S Department of Commerce/Bureau of Economic Analys~s for years subsequent to 2000 are not avadable ($) Esbmated, based on FY 2003 Budget (6) Includes the Senes 2003A Bonds Source C~ty F~nanc~al Statements A-24 Outstanding Debt and Lease Obligations Informabon on the City's ~ndebtedness is presented ~n the following tables Included ~s ~nformabon on net and overlapping tax-supported debt, rapidity of pnnclpal rebrement, selected debt service schedules, and ~nformabon on capital lease obhgabons OVERALL NET DEBT AND OTHER LONG TERM OBLIGATIONS As of June 30, 2003 General Obhgat~on Bonds(i) Water and Sewer Revenue Bonds(2) Storm Water Revenue Bonds(3) Capital Leases/COPs(4) Agriculture Reserve Program Installment Purchase Agreements(s) V~rg~ma Beach Development Authority Long-Term Obhgabons(6) $564,167,398 115,173,408 9,475,000 21,054,177 20,463,087 31,935,000 $762,268,070 Plus 2003A Pubhc Faclhty Revenue Bonds Less Water and Sewer Revenue Bonds(2) General Obhgat~on Bonds for Water and Sewer Purposes(7) General Obhgabon Bonds for Storm Water Purposes(8) Storm Water Revenue Bonds(3) Agnculture Reserve Program Installment Purchase Agreements(s) $115,173,408 4,945,000 4,936,635 9,475,000 20,463,087 165,000,000 154,993,130 Overall Net Debt and Long Term Obhgabons $772~274.940 (1) Includes $4,945,000 general obhgabon debt for water and sewer purposes and $4,936,635 general obhgat~on debt for storm water purposes (2) Water and sewer revenue bonds are not secured by a pledge of the C~ty's full faith and credit and unhm~ted taxing power These bonds are secured solely by the net revenues of the water and sewer system (3) Storm water revenue bonds are not secured by a pledge of the City's full faith and credit and unlimited taxing power These bonds are secured solely by the net revenues of the storm water ubhty system (4) A full descnpbon of the Capital Leases and Ce~ficates of Participation can be found ,n the subsecbon "Assets Acquired and FInanced Under CapItal Leases" herein Payments on Cerbficates of Pa~c~patJon are subject to annual appropnabon by City Councd Th,s amount also includes the one remaining year of debt service on an unsecured 25"~ Street propen'y loan A descnpt~on of th~s loan ~s included under the "Other Long-Term Obhgabons' secbon here,n (s) Represents ~nstallment purchase agreements which are general obhgat~ons of the C~ty Interest and pnnc~pal payments are pa~d from a dedicated porbon of real estate taxes Pnnclpal payments wdl be made from matunng zero coupon Treasury secunbes purchased from the ded,cated porbon of real estate taxes These obhgat~ons are descnbed In the secbon "Agncultural Program" hereto (s) Represents other long term obhgat~ons of the C~ty which do not meet the bonded debt or capital lease cntena The C~ty's payment obhgat~ons are subject to annual appropnat~on and support revenue bonds ~ssued by the C~ty of VIrg~n~a Beach Development Authonty for the benefit of the C~ty These obhgabons are descnbed ~n the secbon "Other Long-Term Obhgat~ons" here~n ('/) General obllgabon bonds issued for water and sewer purposes, debt service on these bonds ~s pa,d from revenues of the water and sewer system even though such bonds are secured solely by the full faith and credit of the C~ty and subject to the consbtubonal debt limit. (s) General obligation bonds issued for storm water purposes, debt serv, ce on these bonds ~s pa~d from revenues of the storm water system, even though such bonds are secured solely by the full faith and credIt of the City and subject to the constitutional debt limit Source C~ty Department of F~nance A-25 Authorized but Unissued Bonds The C~ty currently has authorized but unissued $141,652,593 general obhgabon bonds and $37,140,641 revenue bonds, as shown below* Authorization Purpose Amount Security Year Manner Pubhc Improvement Publ,c Improvement Pubhc Improvement Pubhc Improvement Pubhc Improvement Water and Sewer Water and Sewer Water and Sewer Water and Sewer Storm Water Ubhty Storm Water Ubhty Storm Water Ubhty Storm Water Ubhty Storm Water Ubhty $ 7,052,593 General Obhgat~on 1999 Councd 15,803,830 General Obhgabon 2000 Councd 19,596,170 General Obhgabon 2001 Councd 37,300,000 General Obhgabon 2002 Councd 61,900,000 General Obhgabon 2003 Councd 3,696,002 Revenues 1999 Councd 4,703,619 Revenues 2000 Councd 8,524,487 Revenues 2001 Councd 5,208,093 Revenues 2002 Councd 5,028,440 Revenues 1998 Councd 5,300,000 Revenues 1999 Councd 3,900,000 Revenues 2000 Councd 200,000 Revenues 2001 Councd 580,000 Revenues 2003 Councd *Does not include the bonds approved at referendum for the Lake Gaston Project Source City Department of F~nance A-26 0 0 0 0 0 0 0 ~ ~ ~ .~- ~ ~-- ,~- ~ ,r- ~-- 0.4 (",1 ~,1 t~l 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 ~. o ~o z Om RAPIDITY OF PRINCIPAL RETIREMENT ALL GENERAL OBLIGATION BONDS(~) June 30, 2003 RAPIDITY OF PRINCIPAL RETIREMENT OVERALL NET DEBT AND OTHER LONG-TERM OBLIGATIONS(=) June 30, 2003 Percentage of Maturing Amount Maturing Amount Total Debt Within Maturing Within Maturing Outstanding 5 years $ 241,249,256 42 76% 5 years $ 274,852,935 35 59% 10 years 418,840,078 74 24% 10 years 498,574,637 64 56% 15 years 522,282,398 92 58% 15 years 653,869,940 84 67% 20 years 564,167,398 1 O0 00% 20 years 760,394,940 98 46% (1) Includes general obhgabon bonds additionally secured by water and sewer and storm water ubhty revenues and general obl~gabon bonds not secured by water and sewer revenues but which are serviced annually from those revenues Does not include capital leases, Cerbficates of Parbc~pat, on or other non-general obhgatlon ~ndebtedness (2) As descnbed on page A-26 ~nclud~ng Senes 2003A Bonds Water and Sewer System Debt The C~ty currently has outstanding two types of secunbes to finance capital ~mprovements to ~ts water and sewer system: (1) Prior to 1977 and ~n 1982, the C~ty ~ssued general obhgabon pubhc ,mprovement bonds that were not secured by a pledge of the net revenues of the water and sewer system As of June 30, 2003, $4,945,000 of these bonds were outstanding (2) Pursuant to Article VII, Sec 10(a)(3) of the Consbtuhon of V~rg~ma, the C~ty has ~ssued water and sewer revenue bonds which are secured solely by the net revenues of the water and sewer system As of June 30, 2003, $115,173,408 of these bonds were outstanding Storm Water Utility System Debt The C~ty has ~ssued two types of securities to finance capital ~mprovements to ~ts storm water utd~ty system (1) Prior to 1995, the C~ty ~ssued general obhgahon pubhc ~mprovement bonds that were not secured by a pledge of the net revenues of the storm water ubhty system As of June 30, 2003, $4,936,635 of these bonds were outstanding. (2) Pursuant to Article VII, Sec 10(a)(3) of the Consbtuhon of V~rg~ma, the C~ty has ~ssued storm water ubhty revenue bonds which are secured solely by the net revenues of the storm water ubhty system As of June 30, 2003, $9,475,000 of these bonds were outstanding It ~s the C~ty's pohcy to service all debt ~ssued for storm water purposes by revenues from the storm water utd~ty system A-29 Agricultural Reserve Program On May 9, 1995, City Council adopted an ordinance estabhsh~ng the Agricultural Reserve Program ("ARP") The primary purpose of the ordinance ~s to promote and encourage the preservat;on of farmland in the rural southern portion of the City Through ARP, the City acquires development rights in des;gnated areas within the southern porbon of the C;ty through the purchase of agricultural land preservation easements Landowners who meet certain ehglbll~ty criteria may sell an easement to the C~ty wh~le holding fee s~mple btle to the land and conbnu~ng to farm The C~ty acquires these development nghts by executing ~nstallment purchase agreements w~th the landowners These agreements prowde for the payment of the pnnc~pal balance of the agreement ~n a s~ngle installment due approximately twenty-five years after execution of the agreement Interest on the unpaid pnnc~pal balance ~s payable sem~-annually C~ty Council has dedicated a 1~ cent ~ncrease ~n the real estate tax (approved May 9, 1995) to finance the program These obl~gabons constitute ~ndebtedness w~thln the meaning of Arbcle VII, Secbon 10 of the V~rg~ma Constitution and w~ll be general obhgabons of the City, pledging the full faith and credit and unhm~ted taxing power of the C~ty By policy, ~nterest and principal payments w~ll be pa~d from a dedicated porbon of real estate taxes Principal payments w~ll be made from matunng zero coupon Treasury secunbes purchased from the dedicated portion of real estate taxes As of June 30, 2003, 50 ~nstallment purchase agreements totahng 6,453 acres at a total purchase pnce of $20,463,087 have been executed City Council has approved 4 additional apphcat~ons totahng approximately 219 acres w~th a total approved purchase price of $1,497,732 These are expected to close ~n the next few months An add~bonal 9 apphcabons totahng 469 acres are being processed by the C~ty, valued at approximately $2,753,081 Tax Increment Financing The C~ty is one of the first ~n the Commonwealth of V~rg~n~a to use Tax Increment F~nanc~ng ('q'lF") as a means of financing certain capital projects, usually ~nvolwng one or more private or public partners. Tax Increment F~nanclng is authorized under Section 58.1-3245 through 58 1-3245 5 of the Code of V~rg~ma, originally enacted ~n 1988. The C~ty has established TIF d~stncts to fund ~ts share of three ~nvestment partnerships the Lynnhaven Mall Expansion, the Sandbndge Beach Restoration Program and the Town Center of V~rg~ma Beach. Lynnhaven Mall Expansion. The area of the C~ty around Lynnhaven Mall was estabhshed as a TIF d~stnct by ordinance approved by C~ty Council on June 9, 1998. The expansion of the third largest shopping mall ~n Wrg~ma w~ll accommodate several upscale stores, a new entertainment complex and a themed restaurant The C~ty ~s committing $11 5 million ~n future real estate taxes for a parking fac~hty and related improvements to leverage a $100 m~lhon investment from the New York State Teachers' Retirement System. The expansion w~ll ~ncrease the mall by 300,000 square feet, which ~s equivalent to one-third ~ts original s~ze. The C~ty w~ll benefit from ~ncreased retail, restaurant, ubl~ty and bus~ness I~censes taxes As of June 30, 2003, $3,782,992 ~n TIF revenues have been collected in the Lynnhaven Mall TIF Revenue Fund Under the agreement w~th the developer, the C~ty w~ll prowde certain TIF revenues to the developer, ~f available, but ~s not responsible for the ~ssuance of any debt. Sandbndqe Beach Restorabon Proqram: The Sandbndge area of the C~ty was estabhshed as a TIF district by ordinance approved by City Council on December 1, 1998. An ~mportant real estate and aesthebc asset to the C~ty, th~s area has long battled sand erosion The C~ty conhnues to pursue a mulb- front strategy of funding sand replenishment, including seeking federal funds, using local funds, and estabhsh~ng a Special Service District The use of TIF ~s another method to ensure stab~hty to this area and to ensure that the primary beneficiaries of the program fund the bulk of the ~mprovements. As of June 30, 2003, $4,450,284 ~n TIF revenues has been collected m the Sandbndge Restorabon Program A-30 The Town Center of V~r.q~ma Beach The southern part of the Pembroke area of the C~ty was estabhshed as a TIF d~stnct by ordinance approved by City Council on November 23, 1999. The d~stnct ~s called Central Business D~stnct-South When fully developed, ~t ~s projected that the d~stnct w~ll span 25 acres w~th 850,000 square feet of "Class-A" off~ce space, 750,000 square feet of upscale retad space and luxury apartments The Town Center wdl be supported by free pubhc parking for over 4,000 vehicles ~n enclosed parking garages set w~th~n the center The CIty anticipates commItting $13 9 mdhon to prowde the pubhc ~nfrastructure and $42.2 mdhon of TIF revenues to pay for the parking garages, for a total C~ty ~nvestment of $56 1 m~lhon, after reimbursement for certain land purchases necessary for the Town Center's development The pubhc parking garages wdl be financed using revenue bonds ~ssued by the V~rg~ma Beach Development Authority, secured by a support agreement from the C~ty The source of the C~ty payments wdl be TIF revenues, although such TIF revenues wdl not be pledged as security The first series of bonds for the pubhc garage ~n Phase I of the development were ~ssued on June 14, 2002 (see a description ~n "Other Long-Term Obhgat~ons" below) The C~ty's ~nvestment w~ll leverage approximately $155 to $165 m~lhon of private sector ~nvestment The C~ty wdl benefit from ~ncreased personal property, retad, hotel, admissions, restaurant, utd~ty and bus~ness hcenses taxes As of June 30, 2003, $1,764,284 ~n TIF revenues has been collected ~n the Central Business D~stnct-South Revenue Fund Assets Acquired and Financed Under Capital Leases Non-water and sewer capital assets consisting of commumcat~ons equipment and systems, computer equipment and systems, prepaid support and maintenance, an HVAC system, and other capital assets acquired under capital leases on which the C~ty, as of June 30, 2003, had pnnc~pal outstanding of $2,119,177 In addlhon, as of June 30, 2003, the City had outstanding $18,760,000 Refunding Certificates of Part~c~pabon, Series of 1993 Proceeds of the 1993 Refunding Certificates were used to refund the Series 1990 Certificates of Part~c~pabon and the Series 1987 Certificates of Part~c~pabon, which were ~ssued to finance the acquisition of real property to expand the C~ty's Mumc~pal Center Complex and to construct a Judicial Center Complex, respectively These leases contain non- appropriation clauses and therefore are not considered debt for purposes of calculating obhgat~ons subject to the consbtut~onal debt hm~t The estimated scheduled capital lease payments on non-water and sewer lease obhgabons for the fiscal years ending June 30 are as follows Capital Certificates of Leases Participation Total 2004 $1,131,822 $ 2,906,587 $ 4,038,409 2005 823,183 2,898,435 3,721,61 8 2006 280,308 2,893,027 3,173,335 2007 4,802 2,890,765 2,895,567 2008 and later - 11,491,855 11,491,855 In add~hon, the C~ty has entered ~nto an unsecured borrowing of $1,375,000 from Bank of America, N A, the repayment of which ~s a General Fund obhgat~on of the C~ty, subject to annual appropnat~on Annual pnnc~pal payments are due through 2004 and ~nterest rates wdl vary over the term of the borrowing. Pnnc~pal outstanding on th~s loan as of June 30, 2003, ~s $175,000 Interest ~s currently fixed at 0.41% untd April 1, 2004, which is the maturity date of the loan The proceeds of this borrowing were used to reimburse the C~ty for the cost of acqu~nng a parking lot located at 25th Street and Pacific Avenue ~n the C~ty's resort area Other Long-Term Obligations On February 24, 1998, the C~ty of V~rg~ma Beach Development Authority ~ssued $9,800,000 Lease Revenue Bonds payable solely from certain rental payments made by the C~ty under an operabng lease The obhgat~on of the C~ty to make rental payments ~s subject to annual General Fund appropriations by the C~ty Councd. The maximum annual rent payment under the lease ~s $862,212 The A-31 Lease Revenue Bonds financed the costs of acqu~nng and construcbng a Social Services Budding to be used by the C~ty to house its Social Services Department. Pnnc~pal outstanding on this agreement as of June 30, 2003, ~s $8,080,000 On June 14, 2002, the C~ty of V~rg~n~a Beach Development Authority ~ssued ~ts $20,815,000 Pubhc Facd~ty Revenue Bonds, Series 2002A, and its $3,040,000 Taxable Pubhc Facd~ty Revenue Bonds, Series 2002B, to finance the acquisition of a pubhc parking facd~ty and land for a public plaza m the Town Center development. These bonds are hm~ted obhgat~ons of the Authority, payable solely from certain payments made by the C~ty pursuant to a Support Agreement between the Authority and the C~ty The obhgabon of the C~ty to make such payments ~s subject to appropnahon by the C~ty Councd of funds sufficient for such purpose Pnnc~pal outstanding on these bonds as of June 30, 2003, is $23,855,000 Th~s ~ssuance of $165,000,000 Pubhc Facd~ty Revenue Bonds Series 2003A, and any other debt ~ssued by the V~rg~n~a Beach Development Authority under the Master Agreement of Trust dated September 1, 2003, wdl be ~ncluded as other long term obhgabons Overlapping Debt The C~ty ~s autonomous from any county, town, or other pohbcal subd~wslon There are no overlapping junsd~cbons w~th debt outstanding for which C~ty residents are hable Short-Term Borrowing The C~ty does not borrow on a shod-term bas~s for working capital purposes The City's pohcy ~s to maintain the General Fund balance at a level that provides sufficient cash flow for working capital purposes Debt History The C~ty has never defaulted on ~ts general obhgabon bonds, water and sewer system bonds, storm water ubhty bonds or capital lease obhgabons. Payment Record The C~ty has never defaulted ~n the payment of e~ther pnnclpal of or interest on any indebtedness. Comprehensive Plan The City's most recent Comprehensive Plan was adopted on November 4, 1997. Among some of the key planning pohc~es embodied ~n th~s Plan are urban and rural growth management strategies, ~nclud~ng the Green L~ne concept, economic development opportumbes, transportabon and other pubhc fac~hty ~mprovements, care of the enwronment, housing, h~stonc resource management, neighborhood preservabon and commumty aesthehcs By adopbng these key provisions of the Comprehensive Plan, the C~ty has committed ~tself to advancing sound planmng pohc~es that ensure a fair and workable balance between the supply of pubhc service dehvery systems and the demand placed on those systems by ex~sbng and future land uses The comprehensive planning pohc~es of the City are designed to achieve enhanced and manageable land development and redevelopment w~th~n a defined urban service area (noAh of the Green L~ne) and Trans~bon Area The development of urban ~nfrastructure ~s focused on serving future growth creabng h~gher quahty land uses, thereby expanding the C~ty's taxable revenue base w~thout compromising the level of service provided by the pubhc infrastructure Another complementary strategy provided by the Green Line and other related comprehensive planning pohc~es ~s to check sprawhng development By prevenbng future sprawl through the des~gnabon of areas for appropriate urban development, the C~ty avoids net negabve fiscal ~mpacts for related capital and operabng expenses that are too often hnked to such development patterns The land use planning guidance prowded by the Comprehensive Plan along w~th the strong pubhc demand to live and work ~n V~rg~n~a Beach can continue A-32 the value of growth in Vlrglma Beach ~nto the foreseeable future In addition to adequate capacity for growth ~n the northern section of the City, the City's land use pohc~es prowde reasonable levels of rurally compatible growth ~n the southern part of the C~ty The Rural Preservabon element of the Comprehenswe Plan and the Agricultural Reserve Program, adopted by City Council in 1995, are major tools to promote the preservabon of farmland and the rural way of hfe In accordance w~th V~rg~ma state law that requires local governments to reassess their Comprehensive Plans at least once every five years, the C~ty is ~n the process of reviewing this document and anbc~pates complebon of ~ts update ~n late fall 2003 The focus of th~s update reaffirms the importance of the Green L~ne, the protection of our rural areas and open spaces and the need to provide for well-managed growth ~n designated areas located north of the Green Line The Comprehensive Plan ~s a dynam~c instrument and C~ty Council periodically reviews, enhances and amends the Plan when appropriate Since 1997 there have been four specific area planmng documents that have been adopted by C~ty Council and added to the Comprehensive Plan by reference These are the Shore Drive Corridor, the Laskm Road Corridor, the Pnncess Anne Corridor and a refinement of the planning policies affecting the Trans~bon Area. In add~bon, C~ty Councd has amended the Comprehensive Plan on three occasions to enhance and clarify the plan These amendments ~nvolved shoreline erosion pohcles for shoreline management, design standards for parking garages and pohcles relabng to groundwater resource protecbon. In March 2001, the Chesapeake Bay Preservabon Area Board found the V~rg~ma Beach Comprehensive Plan to be m compliance with the V~rg~ma regulabons relahng to protecbon of the Chesapeake Bay S~nce 1971, the C~ty Councd has periodically revised and adopted the C~ty's Master Transportabon Plan, as needed, to meet the need for an efficient and cost-effective roadway system Th~s policy document, which ~s a component of the Comprehensive Plan, describes the characteristics and estabhshes transportabon planmng pohc~es for V~rg~ma Beach The Plan also prowdes planmng guidance for b~keways, scemc easements, and other s~mdar features related to the C~ty's major roadway system Decisions affecting the ~mplementabon of land use and transportation policies are based, ~n large measure, upon the guidance prowded ~n the C~ty's Comprehensive Plan and Master Transportation Plan Capital Improvement Program The C~ty's s~x-year Capital Improvement Program ("CIP") prowdes for ~mprovements to the C~ty's pubhc fac~hbes, along w~th the means of financing these ~mprovements The first year of the program consbtutes the capital budget for the current fiscal year, the rema~mng years serve as a planmng guide The ClP t~me table coincides w~th that of the Operating Budget, and both are presented to C~ty Council ~n early Spnng The approved ClP ~s the result of a process that balances the need for pubhc facd~tles against the fiscal capabd~ty for the C~ty to provide for these needs It ~s the City's pohcy to fund ~nd~wdual capital projects of less than $250,000 through General Fund appropriations (pay-as-you-go financing). F~scal Years 2004-2009 CIP On May 13, 2003, the C~ty Council approved the F~scal Year 2004-2009 CIP When compared to F~scal Years 2003-2008 ClP, the program reflects a 5.5% increase ~n total costs The total s~x-year program aggregates $1 841 bdhon, a $95.2 mdhon ~ncrease from the F~scal Years 2003-2008 ClP The ClP further includes a $255.5 mdhon utihtles program, a $1.159 billion for General Government and a $426 7 mdhon school ~mprovements program The cost of C~ty general ~mprovements ~s increasing by approximately 6% and the Ubllbes program is increasing by approximately 3%. The approved ClP assumes use of $703.4 mdhon of bonded debt and $304 9 m~lhon of lease-purchases The CIP ~ncludes a d~scuss~on of the development plan for the Trans~bon Area, ~ e the land area d~rectly below the Green L~ne, which ~s a buffer between the urban and rural services areas of the City. With~n th~s area, limited and cond~bonal growth opportumbes are recommended consistent w~th the adopted Comprehensive Plan and C~ty Councd's economic wtal~ty pohc~es The Trans~bon Area Report A-33 ~denbfies the ~nfrastructure needs of the area w~th a proposed hm~t of 3,000 addlhonal res~denbal umts and the revenues generated to support the needed CIP projects Ten roadway projects have been ~denbfled for the Trans~bon Area at a proposed cost of approximately $60 mdhon Storm water projects wdl be constructed as development occurs and these projects wdl be funded through the storm water fees charged to residents Private developers will construct and pay the cost to extend public water and samtary sewer services to development ~n the Trans~bon Area Trans~bon Area projects are not funded In the ClP but will be funded as development creates the need. The Transition Area financing plan ~nd~cates that revenues generated from the development of the area wdl be sufficient to fund the necessary ~nfrastructure For F~scal Year 2004, C~ty Councd approved ~ncreases in sewer and storm water rates to prowde funding for ~nfrastructure maintenance projects in these areas The samtary sewer ~ncrease of $1 07 per month bnngs that charge to $14 34 per month The storm water rates were ~ncreased by approximately $3 65 per year to a total of $55 12 per year The F~scal Year 2004 Capital Budget represents $181 6 mdhon of the $1 841 b~lhon s~x-year ClP It anticipates $15.6 million for utihbes and $166.0 mdhon for public ~mprovements, including $39 9 mllhon for schools and $85 3 million for roadways and buildings. Funding for the Capital Budget is planned to be prowded from the following sources' $52 4 mdhon from general obllgabon bonds; $ 6 mdhon from storm water ubhty revenue bonds, $21 1 mdhon from General Fund appropriations and Fund Balances, and $107 5 mdhon from other sources The following table compares total appropriation authority for the s~x-year F~scal Years 2004-2009 CIP to the prewous s~x-year F~scal Years 2003-2008 CIP. The amounts shown represent the total amount of appropnabons required (appropnahons to date plus appropnabons made by the Fiscal Year 2004 Capital Budget plus appropnahons not yet made but planned for F~scal Years 2005-2009) to fund the ClP projects They represent total estimated project costs (although future years' estimates are necessarily very prehm~nary), but do not equal the amount of debt financing to be used (since a variety of funding sources wdl be used) Future years' CIP amounts are subject to City Councd approval and may be revised FY 2004-2009 ClP VS. FY 2003-2008 ClP Total Program ClP % of ClP % of Cateoorv (FYs 2004-2009) Total (FYs 2003-2008) Total Change in $ Change in % Schools $426,659.340 23% $404,403.642 23% $22,255.698 5 5% Roadways 306.089.868 17 275.009.087 16 31,080,781 11 3 Economm &Tounsm Development 352,908.440 19 325,136,706 19 27,771,734 8 5 Buddings 303,654.004 16 305.739.644 18 (2,085,640) (0 7) Coastal 78.969.424 4 74.785.126 4 4,184,298 5 6 Parks & Recreabon 117,186,150 6 113,300,857 6 3,885,293 3 4 Subtotal - Pubhc Improvement 1,585,467,226 86 1,498,375,062 86 87,092,164 5 8 Storm Water 81,864,560 4 76,683,760 4 5,180,800 6 8 Water & Sewer 173,656,389 9 170,765,756 10 2,890,633 1 7 Subtotal - Ubhbes 255,520,949 1.~4 247,449,516 1.~4 8,071,433 3 3 Total $1,840,988,175 100% $1,745,824,578 100% $95,163,597 5 5% As shown above, the total amount of capital projects ~ncluded ~n the current s~x-year CIP has increased by $95 2 million versus the previous six-year ClP S~nce th~s table compares "rolling" s~x-year periods, percentage changes in ~nd~vldual categories of projects can vary markedly The F~scal Years 2004-2009 CIP rehes upon charter bond authority for general obhgabon bonds assumed ~n the ClP The uses by project categories and major funding sources for the total program as noted m the CIP are shown on the following page A-34 CAPITAL IMPROVEMENT PROGRAM USES AND SOURCES OF FUNDS SUMMARY FISCAL YEARS 2004 THROUGH 2009 USES Pubhc Improvements School ProJects Roadways Buildings¢) Parks & Recreation Projects(2) Coastal Economic & Tounsm Development(3) Subtotal - Pubhc Improvements Ubht~es Water Ubhty Sewer Uhhty Storm Water Subtotal- Utd~t~es TOTAL USES Authorized 2003-04 Unappropriated Estimated in Previous Capital Subsequent Total Costs Fiscal Years Budqet Five Years $ 426,659,340 $186,881,094 $ 39,927,161 $199,851,085 306,089,868 149,316,436 23,589,140 133,184,292 303,654,004 173,050,158 61,741,974 68,861,872 117,186,150 84,707,380 11,567,515 20,911,255 78,969,424 49,943,573 5,315,000 23,710,851 352,908,440 296,682,222 23,9.03,603 32,322,615 $1,585,467,226 $940,580,863 $166,044,393 $478,841,970 $ 51,958,164 $ 25,465,164 $ 2,430,000 $ 24,063,000 121,698,225 71,870,454 6,218,771 43,609,000 81,864,560 42,822,148 6,9.18,144 32,124,268 255,520,949 140,157,766 15,566,915 99,796,268 $1.840.988.17~5 ~..,JZEO+Z~3.~..~ $181.611.30~8 ~ SOURCES C~ty Bond Issues General Obhgabon Bonds(4) Water & Sewer Revenue Bonds Storm Water Revenue Bonds Subtotal - C~ty Bond Issues General Fund Appropnat~ons and Fund Balances(5) Other F~nanc~ng Sources Storm Water Ubhty Fund Appropnat~ons Water & Sewer Fund Appropnat~ons(6) Information Technology Appropriations Parks & Recreation Fund Appropnabons Community Development F~re Programs Fund Golf Course Fund Appropnabons Tounsm Growth Investment Fund C~garette Tax VDOT Maintenance Reimbursement Law Enforcement(7) Sale of Property(s) Revenue from Parking Federal, State, & Pnvate Contnbut~ons(9) Lease Purchases(l°) Sandbndge Special Service D~stnct Fund Other Locaht~es Subtotal - Other Sources of F~nanc~ng TOTAL SOURCES $ 582,276,803 $270,976,803 $52,400,000 $258,900,000 98,919,864 49,997,864 0 48,922,000 22,250,529 16,480,529 580,000 5,190,000 $703,447,196 $337,455,196 $52,980,000 $313,012,000 288,537,068 191,665,857 21,132,747 75,738,464 53,148,565 21,376,153 6,338,144 25,434,268 67,834,086 41,135,315 7,948,771 18.750,000 1,083,874 911,000 172,874 0 25,049,641 12,536,935 1,912,472 10,600,234 75,000 75,000 0 0 2,113,424 2,113,424 0 0 2,287,664 1,767,664 60,000 460,000 6,444,936 6,~.~.~,936 0 0 39,014,898 17,394,960 3,603,323 18,016,615 68,075,048 30,937,618 5,895,460 31,241,970 48,217,080 26,105,782 5,638,000 16,473,298 18,769,239 10,450,492 8,318,747 0 5,000 5,000 0 0 174,808,074 94,433,018 33,918,405 46,456,651 304,882,365 258,500,000 32,992,365 13,390,000 9,894,431 829,693 0 9,064,738 27,300,586 26,600,586 700,000 0 849,003,911 551,617,576 107,498,561 189,887,774 $1.840.988.17~5 $.~J~.D.~.3.E~,.~ $181.611.30__8 ~ NOTE A As set forth ~n the secbon "The Projects" ~n the Official Statement, the Projects financed w~th the proceeds of the Senes 2003A Bonds are part of a larger group of projects to be financed with several senes of pubhc fac, hty revenue bonds ,ncluded ~n the ClP The uses/sources of such projects are d~stnbuted as follows (1) Of the $304 m~lhon total Building costs, $110,824,565 represents such project costs (2) Of the $117 mdhon total Parks & Recreabon costs, $54,090.000 represents such project costs (3) Of the $353 mdhon total Economic & Tounsm Development costs, $223,836,800 represents such project costs (4) Of the $582 mdl,on total General Obhgabon Bonds, $7,990,000 is expected to be apphed to fund such projects (s) Of the $289 m~lhon total General Fund Appropnabons and Fund Balances, $22,542,000 ~s expected to be apphed to fund such projects (6) Of the $68 mdhon total Water & Sewer Fund Appropnabons, $3,080,000 ~s expected to be apphed to fund such projects r~) Of the $48 mdhon total Law Enforcement funding, $15,732,000 ~s expected to be apphed to fund such projects. (8) Of the $19 mdhon total Sale of Property funding, $3.525,000 ~s expected to be applied to fund such projects (9) Of the $175 million total Federal, State, &Pnvate Contributions, $31,000,000 Is expected to be apphed to fund such projects (10) The enbre Lease Purchase funding, $304, 882,365 ~s expected to be apphed to fund such projects NOTE B The ClP prowdes $388,751,365 of the total program of $410,551,365 The rema~mng $21,800,000 ~s funded through the tax increment financing program for the Town Center and represents the approximate costs of the two Town Center garages A-35 Prior Year CIPs - Actual Capital Project Expenditures The following table presents a summary of actual capital project expenditures by category for Fiscal Years 2000 through 2002 The expenditures for each year represent numerous funding sources (bonds, general appropnahons, fund balances, retained earnings, state and federal sources, etc ) and unspent funds from various pnor year capital budgets ACTUAL CAPITAL PROJECT EXPENDITURES Category FY 1999-00 FY 2000-01 FY 2001-02 General Governmental Schools Public Ut~hbes Storm Water Ut~hbes TOTAL $ 54,634,208 $66,041,482 $82,591,447 54,031,989 63,710,797 49,961,283 14,817,111 15,599,616 13,270,406 2,055,303 3,137,559 5,496,857 $125..538..611 $14_____~8.489.45~4 $151 ..319..993 FINANCIAL INFORMATION Basis of Accounting and Accounting Structure All of the C~ty's and School Board Component Umt Governmental Funds, Expendable Trust Funds, and Agency Funds (assets and hablht~es) are reported under the modified accrual basis of accounting. Revenues are recognized in the accounting period ~n which they become suscepbble to accrual (ge., measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collect~ble w~th~n the current period or soon enough thereafter to be used to pay hab~ht~es of the current period. The C~ty considers property taxes as available ~f they are collected within 45 days after year end Expenditures are recogmzed ~n the accounbng period ~n which the corresponding hablhtles are incurred, if measurable (except for unmatured interest on general long- term debt which is recognized when due and pa~d) The following ~s a hst of the major revenue sources which meet the "suscepbble to accrual" criteria General Property Taxes Interest on Deposits and Investments General Sales Tax Revenue from Commonwealth Ut~hty Taxes Revenue from Federal Government Hotel Taxes Amusement Taxes Restaurant Taxes All C~ty and School Board Component Umt Proprietary Funds are reported under the accrual bas~s of accounting Revenues are recognized when earned and expenses are recogmzed when ~ncurred Unbllled Water and Sewer Enterprise Fund accounts receivable for ubhty services prowded through June 30 are included in the financial statements The C~ty operates on a July I through June 30 fiscal year City of Virginia Beach Development Authority The V~rg~n~a Beach Development Authority was estabhshed for the specific purposes of attracbng new ~ndustnes and the expansion of ex~sbng industries The Authority ~s authorized to issue industrial development bonds after approval by the C~ty Council and to purchase land to ~mprove and sell for development. These bonds do not constitute indebtedness of the C~ty but are secured solely by revenues A-36 from the orgamzahon on whose behalf the bonds were ~ssued The Authonty's Commissioners are appointed by C~ty Councd The C~ty does not have legal htle to any of the Authonty's assets, nor does ~t have a right to the Authonty's surpluses However, in accordance with Governmental Accounting Standards Board Statement 14, the Authonty has been d~scretely presented ~n Appendix B. Among the many projects ~t has helped finance, and ~n addition to the projects the Authority has undertaken for the C~ty, including the Town Center and the Projects ~t ~s currently undertaking, the Authority has developed the Corporate Landing Off~ce Park which has experienced temporary cash flow d~fflcult~es In 1993, the C~ty, using funds from ~ts undesignated General Fund balance, loaned $6,000,000 to the Authority to assist the Authority ~n making payments on the original bank financing prowded by Bank of America for th~s project As property at Corporate Landing has been sold, the Authority has made payments on the Bank of America loan The Authority has made payment ~nstallments on its loan from the City ~n May 1993, September 1993, and February 1994 which total over $1 m~lhon These payments were made from 95% of net proceeds from the sale of property ~n the Oceana West Corporate Park In February 2003, C~ty Council approved a change to the loan amount and terms governing the C~ty's loan to the Authority Under th~s restructunng, the C~ty extinguished the Authonty's obhgahon to pay the ex~stmg accrued interest on this loan The remaining pnnc~pal, $6.2 milhon as of February 2003, was restructured ~nto two non-~nterest beanng notes Note one ~n the amount of $4 8 mdhon wdl be secured by the 31st Street Property and w~ll be payable from the net proceeds of a sale or ground lease of 31st Street Property Note two ~n the amount of $1 4 mdhon wdl be secured by rema~mng parcels at Corporate Land~ng and Oceana West, payable from 20% of net proceeds from land sales Remaining proceeds wdl be used to fund infrastructure and strategic land acquisitions Hampton Roads Transportation District Commission The C~ty's financial statements ~nclude ~ts share of the operating cost of the regional mass transit operahons of the Hampton Roads Transportation D~stnct Commission For F~scal Year 2002, the C~ty's share of aforementioned operating cost was $1,825,560 GASB Statement 34 In June 1999, the Governmental Accounting Standards Board ("GASB") ~ssued Statement No 34, "Basic F~nanclal Statements and Management's D~scuss~on and Analys~s for State and Local Governments." Th~s statement, known as the Reporhng Model, provides for the most s~gmflcant change ~n financial reporting for state and local governments for over twenty years This statement affects the manner ~n which the City records transacbons and presents financial ~nformat~on State and local governments have traditionally used a financial reporting model substantially different from the one used to prepare private sector financial reports The C~ty adopted th~s statement as of July 1, 2001 The basic financial statements ~nclude both government-w~de (based upon the C~ty as a whole) and fund financial statements. Whde the previous model emphasized fund types (the total of all funds of a particular type), ~n the new reporting model the focus ~s on e~ther the C~ty as a whole or major md~wdual funds (w~th~n the fund financial statements) Both the government-w~de and fund financial statements (w~thm the basic financial statements), categorize primary actlwbes as e~ther governmental or business- type. In the govemment-wlde Statement of Net Assets, both the governmental and bus~ness-type act~wtles columns are presented on a consohdated bas~s by column and are reflected on a full accrual, and economic resources bas~s, which incorporates long-term assets and receivables as well as long-term debt and obhgatlons. The C~ty generally first uses restricted assets for expenses recurred for which both restricted and unrestricted assets are available The C~ty may defer the use of restricted assets based on a review of the specific transaction The statement of actlvlbes demonstrates the degree to which the d~rect expenses of a g~ven funcbon or segment are offset by program revenues. D~rect expenses are those that are clearly ~denhfiable w~th a specific funcbon or segment The program revenues must be d~rectly associated with the funcbon (pubhc safety, pubhc works, etc ) or a bus~ness-type achwty Program revenues include (1) A-37 charges to customers or apphcants who purchase, use or d~rectly benefit from goods, services, or pnvdeges provided by a given function or segment and (2) grants and contnbubons that are restricted to meebng the operabonal or capital requirements of a particular funcbon or segment Taxes and other ~tems not properly ~ncluded among program revenues are reported as general revenues The C~ty does not allocate ~nd~rect expenses The operating grants ~nclude operabng-spec~fic and d~screbonal (e~ther operating or capital) grants whde the capital grants column reflects capital-specific grants Fund financial statements are provided for governmental funds, proprietary funds, and fiduciary funds By defln~bon, the assets of the fiduciary funds are being held for the benefit of a third party and cannot be used to address acbv~bes or obhgatlons of the government, therefore, these funds are excluded from the government-w~de statements. Major ~nd~v~dual governmental funds and major enterpnse fund are reported as separate columns ~n the fund financial statements. The C~ty reports the following major governmental funds The General Fund ~s the C~ty's primary operabng fund It accounts for all financial resources of the City, except those required to be accounted for ~n another fund. Revenues are derived primarily from property and other local taxes, state and federal distributions, licenses, permits, charges for service, and interest ~ncome A s~gmficant part of the General Fund's revenues ~s used pnnc~pally to finance the operations of the C~ty of V~rg~ma Beach School Board The Capital Projects Fund ~s used to account for the financial resources for the acqu~s~bon or construcbon of major capital facihbes w~th~n the C~ty. The C~ty reports the following major proprietary funds The Water and Sewer Fund provides water service and samtary sewer waste collecbon and transmission services to V~rg~ma Beach c~bzens and accounts for operahons that are financed ~n a manner s~mdar to private business enterprises The Storm Water Fund accounts for the acbvlbes of the Storm Water Utdlty which charges a fee for operational and capital needs for Storm Water management m the C~ty Additionally, the C~ty reports the following fund types. Special Revenue Funds accounts for revenue derived from specific sources that are restricted by legal and regulatory provisions to finance specific acbv~bes Internal Service Funds accounts for the flnanctng of goods and serwces provided to other departments and agencies of the C~ty or to other governmental units on a cost reimbursement bas~s The C~ty utilizes Internal Service Funds for ~ts C~ty Garage, Fuels, R~sk Management, Print Shop, School Site Landscaping, and Informabon Technology operations Fiduciary Funds are used to account for assets held by the c~ty ~n a trustee capacity or as an agent for ~ndlwduals, private organizabons and other governmental un~ts The F~duc~ary Funds are City Fnnge Benefits, Payroll Deducbons, Special Welfare, Escheat Property Agency Funds and the Pension Trust Fund The Agency Funds are custodial tn nature (assets equal habd~bes) and do not ~nvolve measurement of results of operabons The Pension Trust Fund accounts for the assets of the Sheriff's Retirement Plan which ~s a defined contnbubon pension plan. Investment Policies and Practices The C;ty of V~rg;ma Beach, as a pohbcal subd;vls;on of the Commonwealth of V;rg~ma, ;s hm;ted to ~nvestments permitted by the Code of V;rgima of 1950, as amended In add;t;on, various bond resolutions and a City Councd adopted ;nvestment policy further restrict the types of allowable ~nvestment acbwbes A-38 The C~ty's investment practices are generally described ~n footnote 7 of the C~ty's financial statements, included in Appendix B hereto The C~ty Treasurer is responsible for the ~nvestment of City funds The City Treasurer invests the C~ty's funds using ~nternal active management, w~th external trustees and trust funds taking possession of applicable ~nvestments W,th~n the state permitted gu~dehnes and the adopted ~nvestment pohcy, the C~ty Treasurer hm~ts the C~ty's ~nvestments to the State Treasurer's Local Government Investment Pool, collaterahzed cerbficates of deposit, repurchase agreements, pnme quahty commercial paper, and pnme quality "fed eligible" bankers' acceptances. The C~ty does not invest in "derivative" securities, utilize reverse repurchase agreements, nor otherwise leverage its ~nvestment portfoho The City matches the maturity of ~ts ~nvestments to cash flow needs to assure cash ava~labd~ty as necessary Certificate of Achievement The Government F~nance Officers Association of the Umted States and Canada ("GFOA") awarded a Cerbflcate of Achievement for Excellence in F~nanclal Reporting to the C~ty for ~ts Comprehensive Annual F~nanclal Report ("CAFR") for Fiscal Year 2001 In order to be awarded a Cerbflcate of Achievement, a governmental umt must pubhsh an easily readable and efficiently orgamzed Comprehensive Annual Financ~al Report that substanbally conforms to the h~gh standards for financial reporting as promulgated by the GFOA A Certificate of Achievement ~s valid for one year only The C~ty has been awarded a Cerbficate of Achievement (called a Certificate of Conformance pnor to 1985) for ~ts Comprehensive Annual F~nanc~al Report for 22 of the past 23 years The C~ty was also awarded the Certificate of Achievement for D~sbngu~shed Budget Presentabon from the GFOA for its Fiscal Year 2003 budget The C~ty also received this award for 16 of the last 18 years Budgetary Process The C~ty Charter requires the C~ty Manager to submit a balanced, proposed operating budget to the City Councd at least 90 days before the beginning of each fiscal year which begins July I Each department of the City prepares ~ts own budget request for rewew by the City Manager. The School budget is prepared by the School Board, transmitted to the C~ty Manager for rewew, and then submitted to the C~ty Councd for cons~derabon as part of the C~ty's general operabng budget The City Councd ~s required to hold a pubhc hearing on the budget at which time all interested persons have the opportumty to comment. If the proposed operabng budget ~s not legally adopted by the C~ty Councd by June 1, the operabng budget submitted by the City Manager will have full force and effect as if ~t had been adopted by the City Council The C~ty Manager ~s authorized to transfer appropnabons up to a maximum of $100,000 Transfers ~n excess of $100,000 require C~ty Council approval Transfers between $25,000 to $100,000 are reported to C~ty Councd on a monthly bas~s Add~bonal appropnabons must be offset by add~bonal estimated revenues and/or a transfer from the proper undesignated fund balance and require a pubhc heanng ~f the amount of the add~bonal appropriation exceeds one percent of the total revenue ~n the approved budget Unexpended appropriations (except for the Capital Projects, Grant, and Grants Consohdated Funds) lapse and are closed to the proper fund balance at the end of each fiscal year The appropriation for the subsequent fiscal year is ~ncreased by the amount necessary to satisfy the outstanding encumbrances at June 30 of each fiscal year The operabng budget includes a porhon of the funding for the Capital Improvement Program ("ClP"). General appropnabons used to finance capital projects are shown both in the operating budget and in the ClP The Department of Management Services annually prepares a six-year ClP. Because acbvibes of capital projects often go beyond a fiscal year period, the accounting, encumbenng, and A-39 controlling of the funds are based upon the length of project acbwbes. S~mdarly, Federal and State grants ~n the Grants and Grants Consohdated Funds are budgeted separately from the operating budget because these revenues do not necessardy coincide w~th the C~ty's fiscal year Each capital lease obhgabon has a non-appropnabon clause which generally states that each fiscal year's lease payments are subject to C~ty Councd approval These capital lease appropnabons are offset by an equal amount of esbmated revenue (other financing sources), and are funcbonally budgeted ~n the General Debt Service Fund Fiscal Year 2003 Operating Budget Performance The closing process for F~scal Year 2003, ending June 30, 2003, was concluded on August 14, 2003 The results of the closing process show revenues .......... (insert financial results) It ~s ~mportant to note that these results are unaudited and unadjusted and are being presented before the final audit ~s complete The F~nanc~al Statements for the C~ty for the fiscal year ended June 30, 2003, wdl be avadable w~th the presentabon of the C~ty's Comprehensive Annual F~nanc~al Report ("CAFR") near year end Fiscal Year 2004 Operating Budget On May 13, 2003, the C~ty Councd approved the F~scal Year 2004 Operabng Budget and Capital Improvement Program (known as the Resource Management Plan) The operabng budget of $1,311,825,979 represents a 6 33% ~ncrease over the F~scal Year 2003 adjusted budget H~ghhghts of the budget are listed below No ~ncrease ~n the rates of real estate property taxes or personal property taxes. Increase of 82.3 FTE pos~bons over the adjusted prior year's budget. Th~s ~s a net result of 52 9 decrease ~n School pos~bons, and an ~ncrease of 135 2 ~n C~ty pos~bons The add~bonal C~ty pos~bons are needed to meet commitments related to the opening of the Juvende Detention Facd~ty and Princess Anne L~brary as well as add~bonal pos~bons funded by the ~ncrease ~n the cigarette tax. An ~ncrease ~n the c~garette tax from 32 cents to 50 cents per pack approved by City Councd on January 7, 2003, allows funding of safety-related positions, including 10 add~bonal firefighters and 16 add~bonal pohce officers, a regulabon and enforcement poslbon for compliance with emergency medical services regulabons, support of an ~nternat~onal markebng ~n~babve, and ~nfrastructure for pubhc/pnvate partnerships and economic development ~n~babves Tax and fee ~ncreases for the following' E-911 tax ~ncrease of 65 cents per month over three years from $1 95 per month ~ncreas~ng to a total of $2.60 per month 0n F~scal Year 2006) to fund staffing for the Emergency Commun~cahons Center and funding infrastructure; fire lane violation fee ~ncrease from $15 to $50; amendments to ~ncrease various planmng fees related to development, yard debris program fee of $25 per use, Law Enforcement Tra~mng Academy Fee, $1 per d~em costs of ~nmates The last part of a three part ~ncrease ~n ubhty rates The samtary sewer rate ~ncreased from $13.27 to $14 34 per month, and the storm water fee ~ncreased from $51 47 to $55 12 per year Four add~bonal pos~t~ons ~n the Department of Pubhc Utd~bes to strengthen the cross connection and backflow prevention program and to protect the integrity of the pubhc water supply, and to ~ncrease maintenance capabd~bes 3 65% pay raise for certain ehglble employees and a I 5% pay plan structural adjustment based on ma~nta~mng the C~ty's pos~bon ~n the regional labor market A-40 The state revenue reductions continue to ~mpact the local budget Several agencies have been ~mpacted, especially the Department of Mental Health, Mental Retardation and Substance Abuse and each of the Constitutional Officers Compared to the prewous year, the C~ty projects a reduction of $5 2 mllhon of state a~d for all funds for F~scal Year 2004 In addition the F~scal Year 2004 Operating Budget reflects a reduction of 4 9 FTEs ~n the Commissioner of Revenue's off~ce and 3 6 FTEs ~n the C~ty Treasurer's office due to state budget cuts w~th some of the reductions related to reducing state ~ncome tax assistance at the local level A-41 Fiscal Year 2004 Budget v. Fiscal Year 2003 Budget REVENUES General Property Taxes Revenue from the Commonwealth Other Local Taxes Charges for Services Revenue from the Federal Gov't Use of Money & Property M~scellaneous Revenue Specific Fund Reserves Capital Project Reserve Permits, Fees, & L~censes F~nes & Forfeitures Non-Revenue Receipts Total Revenues FY 2003 FY 2004 Adjusted Adopted FY 2004 Budaet Budqet % of Total $411,449,876 366,207,3O3 194,267,600 128,896,526 85,527,400 13,859,380 8,153,660 6,842,494 5,383,813 4,339,238 4,487,890 4,264,428 $1 ~233~679~608 $448,215,571 34 17% 374,343,894 28 54% 209,570,462 15 98% 129,859,292 9 90% 97,754,414 7 45% 10,868,542 0 83% 11,540,902 0 88% 8,389,938 0 64% 6,469,741 0 49% 4,934,487 0 38% 5,267,793 0 40% 4,610,943 0 35% ffd2,.1_l+SZS-aT~ 100.00% APPROPRIATIONS Education General Government Debt Service Pubhc Works Pohce Pubhc Utd~t~es F~re Social Services Capital Projects Mental Health Parks and Recreation Reserve for Contingencies L~branes Total Appropnabons $583,913,186 190,256,864 104,524,7O6 67,959,951 64,153,925 59,450,686 3O,205,773 31,673,724 35,972,846 30,126,928 22,355,029 0 13,085,990 $1.233.679.60~8 % Change FY 2003 Adjusted to FY 2004 8 94% 2 22% 7 88% 0 75% 14 30% -21 58% 41 54% 22 62% 20 17% 13 72% 17 38% 8 13% 6 33% $619,757,614 47 24% 6 14% 195,183,797 14 88% 2 59% 105,224,669 8 02% 0 67% 66,947,874 5 10% -1 49% 69,351,375 5 29% 8 10% 62,220,453 4 74% 4 66% 32,050,780 2 44% 6 11% 33,973,866 2 59% 7 26% 42,568,404 3 24% 18 33% 31,229,684 2 38% 3 66% 24,380,355 I 86% 9 06% 14,403,159 1 10% 0 00% 14,533,949. 1 11% 11 06% ~$~3~LJ~...5~ 100.00% 6 33% A-42 General Government Revenues In F~scal Year 2002, tax revenues accounted for 54 percent of general governmental revenue, State assistance 32 7 percent, federal sources 7 8 percent, and other sources 5.5 percent The following table shows the C~ty's F~scal Year 2001-2002 actual revenues by source General Governmental Revenues Fiscal Year 2001-2002 Revenues by Source(~) FY 2002 FY 2001 Increase (Decrease) from 2001 Source Amount Percent Amount Percent Amount Percent (millions) of Total (millions) of Total (millions) Chancle Local Sources General Property Tax $390 5 36 4% $367 3 36 0% $23 2 45 9% Other Local Taxes 188 2 17 6 173 5 17 0 14 7 29 0 Permits, Pnwlege Fees, and Regulatory Lmenses 4 1 0 4 3 8 0 4 0 3 0 5 F~nes and Forfeitures 4 5 0 4 4 3 0 4 0 2 0 5 From Use of Money and Property 7 7 0 7 13 3 I 3 (5 6) (11 2) Charges for Services 36 7 3 4 34 7 3 4 2 0 3 9 M~scellaneous 6 0 0 6 7 9 0 8 (1 9) (3 7) From Other Local Governments 0 4 0 0 0 2 0 0 0 2 0 5 Total Local 638 I 59 5% $605 0 59 3% $33 I 65 4% From Commonwealth 350 0 32 7 347 5 34 0 2 5 5 0 From Federal Government 83 7 7 8 68 8 6 7 14 9 29 6 Total Revenues $1;071.8 100.0% $1~021.3 100.0% $50.5 100.0% (~) Includes General, Spec;al Revenues and Debt Service Funds Source C~ty Department of F~nance General Fund In accordance w~th the general pracbce of governmental umts, the C~ty records ~ts transacbons under vanous funds. The largest, the General Fund, ~s that from which all general costs of C~ty government are pa~d and to which taxes and other revenues, not specifically d~rected by law or adm~n~strabve acbon to be deposited ~n special revenue funds, are recorded Examples of special revenue funds are the School Operabng Fund, the School Grants Fund, and the Grants Consohdated Fund. The General Fund ~s comprised of revenue denved from ad valorem taxes, other local taxes, hcenses, fees, permits, certain revenue from the Federal and State governments, ~nterest earned on ~nvested cash balances, and other revenues. General Fund d~sbursements ~nclude the costs of general C~ty government, transfers to the School Operahng Fund for local share of school costs, and transfers to the Debt Service Funds to pay pnnc~pal and ~nterest on the C~ty's general obhgahon bonds for other than water and sewer purposes Operating Data Ad valorem property taxes contributed 58 percent of the C~ty's General Fund revenues ~n F~scal Year 2002 The C~ty levies an ad valorem tax on the assessed value of real and personal property located w~th~n the C~ty Other local taxes contributed 27 percent of the C~ty's General Fund revenues ~n F~scal Year 2002 These ~nclude (1) a one percent local sales tax (collected by the state and remitted to the C~ty), (2) a tax on consumer ubhty bills of 20 percent each for gas, electric, water, and telephone on b~lls up to $15 per month for resldenbal classes and 15 percent on the first $625 per month and 5 percent on the amount between $625 and $2,000 for ~ndustnal and commercial classes; (3) a c~garette tax of 50 cents per pack, (4) property transfer recordabon taxes, (5) an automobile hcense fee, (6) various bus~ness, professional, and occupabonal taxes, (7) a e~ght percent hotel room tax, (8) a restaurant meal tax of five and one-half percent, (9) an amusement tax of 10 percent on gross admissions for certain A-43 events; and (10) a fiat rate of $1.00 added to hotel room charges to fund the Tourism Advertising Program or ~mprovements at Sandbndge The following table shows the C~ty's pnnc~pal tax revenues by source for each of the last ten fiscal years. Growth ~n real property taxes and total tax revenues have averaged 5 2% and 5 9%, respectwely, annually over the past ten years PRINCIPAL TAX REVENUES BY SOURCE FISCAL YEARS 1993 THROUGH 2002 Real Personal Fiscal Property Property General Utility Restaurant Other Yea___._[r Taxes Taxes Sales Tax Tax Meal Tax Taxes To,tal. 1993 $185,426,065 $49,646,483 $26,215,861 $23,492,966 $17,154,580 $43,647,278 $345,583,233 1994 197,691,702 53,383,954 29,203,190 27,015,112 18,408,710 49,006,994 374,709,662 1995 201,152,215 58,564,315 30,907,341 28,452,809 19,080,012 51,263,287 389,419,979 1996 215,783,669 66,775,292 32,808,424 30,410,466 19,835,362 53,613,813 419,227,026 1997 229,160,745 67,612,923 33,916,147 31,246,546 20,682,238 57,888,826 440,507,425 1998 238,395,536 75,041,794 35,049,804 34,415,834 22,046,548 60,320,561 465,270,077 1999 249,191,314 75,593,009 37,004,115 35,886,337 23,157,204 63,351,753 484,183,732 2000 263,220,074 89,984,300 38,212,293 37,643,752 24,436,808 65,846,499 519,343,726 2001 275,963,122 90,362,321 39,712,323 39,746,094 25,320,531 69,697,006 540,801,397 2002 292,842,234 96,742,456 40,619,190 40,548,770 31,887,442 75,975,419 578,615,511 Source: C~ty Department of F~nance An annual ad valorem tax ~s lewed by the C~ty on the assessed value of real property subject to taxation w~thln the City as of July 1 The C~ty assesses real property at 100 percent of its fair market value (w~th the excepbon of pubhc service properties which are assessed by the State Corporabon Commission) Real property taxes are due on December 5 and June 5 of the fiscal year in which they are levied. A penalty of ten percent of the tax owed or $10, whichever ~s greater, along with ~nterest of 9.6 percent for the first year, ~s assessed on delinquent taxes Subsequent year's ~nterest penalty rates are set by the C~ty Councd and are currently 8 4 percent A port~on of tangible personal property located w~thln the C~ty ~s also assessed an annual ad valorem tax. The assessed value of personal property is 100 percent of appraised value Personal property taxes are due June 5, and dehnquent payments are subject to the same penalbes as descnbed above for real property The following table sets forth the assessed value of all taxable property ~n the C~ty for the last ten fiscal years Tax-exempt properbes owned by federal and state governments, churches, and schools, among others, aggregabng approximately $3,910,564,507 for F~scal Year 2002, are not ~ncluded in the table. The assessed value of real property in the C~ty at June 30, 2002, was $23,365,285,989 (includes pubhc service real property) A-44 F~scal Year 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 HISTORICAL ASSESS ED VALUE FISCAL YEARS 1993 THROUGH 2002 Real Percentage Personal Percentage Public Service Percentage Property Change Property Change Property Change Total Assessed From Assessed From Assessed From Assessed Valuem Prior Year Value Prior Year Value(2) Prior Year Value Percentage Change From Prior Year $16,521,164,334 0 69% $1,283,381,883 4 65% $540,396,443 6 77% $18,344.942,660 16,690,934,453 1 03 1,416,512,442 10 37 570,358,251 5 54 18,677,805,146 17,189,272,558 2 99 1,590,254,927 12 27 598,450,332 4 93 19,377,977,817 17.569,373,603 2 21 1,773,955,263 11.55 631,854,212 5 58 19,975,183,078 18,231,483,508 3 77 1,848,939,232 4 23 623,804,522 -1 27 20,704,227,262 19,068,899,073 4 59 1,975,719,516 6 86 630,802,210 1 12 21,675,420,799 19,880,386,330 4 26 2,162,086,075 9 43 656,859,261 4 13 22,699,331,666 20,997,405,999 5 62 2,723,557,700 25 97 677,545,782 3 10 24,398,509,481 22,085,451,417 5 18 2,847,992,931 4 57 705,956,994 4 19 25,639,401,342 23,365,285,988 5 79 3,049,294,683 7 07 731,786,118 3 66 27,146,366,789 I 13% I 81 3 75 3 O8 3 65 4 69 4 72 7 49 5 O9 5 88 ¢) Real property ~s assessed at 100 percent of fair market value (2) Includes both real estate and personal property assessments All pubhc service property ~s taxed at the real estate tax rate except for vehicles Source' City Department of Finance The C~ty ~s required to levy taxes on the assessed value of real and personal property w~thout hm~t as to the rate or amount to the extent necessary to pay pnnc~pal of and interest on ~ts general obhgabon bonds The following table sets forth the C~ty's tax rates and tax lewes on real property for F~scal Years 1993 through 2002 Th~s tax rate remains at $1 220 ~n the F~scal Year 2002 Operabng Budget PROPERTY TAX RATES AND CHANGE IN TAX LEVY FISCAL YEARS 1993 THROUGH 2002 Current Percentage Tax Rate Real Annual Fiscal on Real Property Change in Year Property(i) Tax Levy Tax Levy 1993 $1.090 $183,716,884 0 88% 1994 1 140 194,109,397 5 66 1995 1 140 197,712,631 1 86 1996 1.188 213,069,095 7 77 1997 1 220 226,859,499 6 47 1998 1 220 236,751,484 4 36 1999 1 220 246,389,536 4 07 2000 1 220 264,436,560 7 32 2001 1.220 280,963,485 6.25 2002 1 220 305,058,532 8 58 ¢)Tax rate per $100 of assessed value Source City Department of Finance A-45 The following table sets forth ~nformabon concerning the C~ty's real property tax collecbon rate for each of ~ts ten most recent fiscal years. REAL PROPERTY TAX COLLECTION RATE FISCAL YEARS 1993 THROUGH 2002 Current Total Total (Net) Taxes Percentage Delinquent Total Collections F,scal Taxes Receivable of Levy Tax Tax As Percent of Year Receivable Collected Collected Collections Collections (1) Current Levy 1993 $183,716,884 $178,476,385 97 1% $6,326,014 $184,802,399 100 6% 1994 194,109,397 189,674,033 97 7 6,685,033 196,359,066 101 2 1995 197,712,631 194,287,108 98 3 6,142,169 200,429,277 101 4 1996 213,069,095 209,169,309 98 2 4,875,589 214,044,898 100 5 1997 226,859,499 223,265,716 98 4 5,102,726 228,368,442 100 7 1998 236,751,484 232,875,842 98 4 4,245,849 237,121,691 100.2 1999 246,389,536 241,376,374 98 0 2,174,533 243,550,907 98 8 2000 264,436,560 259,883 741 98 3 6,516,069 266,399,810 100 7 2001 280,963,485 275,592,151 98 1 4,857,709 280,449,860 98 8 2002 305,058,532 299,331,985 98 I 6,806,446 306,138,431 100 4 (~) Includes a 10% penalty ($10 m~mmum) on delinquent collections Source C~ty Department of F~nance CITY OF VIRGINIA BEACH, VIRGINIA TWENTY-FIVE PRINCIPAL TAXPAYERS FISCAL YEAR 2001-2002 Real Property Taxpayer,Business Assessed Value VIrgInIa Electnc& Power Company Kmckerbocker Properties Inc III Venzon VIrginia Inc Pembroke Square Associates Ramon W Breeden, Jr T~dewater Oxford Ltd Partnership Thomas J Lyons, Jr Westminster-Canterbury of Hampton Roads AtlantIc Shores Cooperabve Etc Watergate Treehouse Associates LP F. Wayne McLeskey, Jr V~rg~n~a Natural Gas, Inc(~) Edmund C Ruffin & Bruce L Thompson Gordon Potter, D. Potter and J. Potter Chnsban Broadcasting Network, Inc WIndsor Lake Apartments LLC Pnncess Anne Properbes Inc Manna Shores Associates One Ltd., Prnrshp. NHP Pembroke Courts LP Lake Gem LLC Wal Mart Real Estate Bus~ness Trust ABC M~n~ Warehouse Company Lucy F Reason LIberty Property L~m~ted Partnership Cox V~rg~ma Telecom Inc Ut~hty $321,783,670 Shopp,ng Mall 213,876,670 Ut~hty 188,568,191 Shopping Mall 114,995,270 Real Estate 109,668,085 Real Estate 87,357,189 Hotels 77,691,674 Real Estate 76,509,100 Real Estate 75,544,154 Real Estate 71,564,704 Real Estate 65,713,749 Ut~ hty 65,162,458 Real Estate 62,803,181 Shopping Center 58,701,315 Broadcasbng 55,121,148 Apartments/Shopp Ctr 41,750,186 Real Estate 39,742,342 Real Estate 39,390,471 Apartments 38,141,150 Real Estate 36,403,073 Retail 36,266,936 M~m Storage 34,977,844 ShoppIng Center 34,682,712 Office/Warehouse 31,551,400 Ubhty 31,052,660 Total $2.009.019.332 Note Includes certain personal property taxed at real property rates as prowded ~n Secbon 58 512 1 of the Code of V~rg~ma, as amended Source CIty Assessor A-46 General Fund Operations The following table compares C~ty General Fund revenues, expenditures, and changes ~n Fund Balance for F~scal Years 1998 through 2002 GENERAL FUND COMPARATIVE STATEMENT OF REVENUES AND EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE FISCAL YEAR ENDING JUNE 30 REVENUES General Property Taxes Other Local Taxes Permits, Pnwlege Fees and Regulatory Lmenses F,nes and Forfeitures From Use of Money and Property Charges for Services M,scellaneous From Other Local Governments From Commonwealth From Federal Government Total Revenues EXPENDITURES Operating LegJslabve Executive Law F~nance Human Resources Judicial Health Social Services Pohce Pubhc Works L~brary Plann,ng Agnculture Economic Development Convention and V~s~tor Development General Services Boards and Commissions F~re Museums Management Services Commun~cabons and Informabon Technology Emergency Medical Serwces Housing and Neighborhood Preservabon Total Operating Cap,tal Outlay") Total Expenditures 1998 1999 2000 200'1 $314,471.559 $325,630,740 $353,168,284 $365,223,427 145,110,879 152,684,053 158,918,533 167,302,110 3,663.320 3,678,921 4,118,927 3,833,565 4,031,418 3,914,453 4,121,479 4,312,322 8,178,730 5,387,210 6,001,337 6,437,075 7,694.406 6,628,018 6,398,520 6,992,492 4,884,901 4,662,531 4,704,183 5,281,354 . . 38,987,772 41,755,550 52,642,002 52,052,773 10,901,537 13,826,358 14.962,983 16,041,194 $537,924,522 $558,167,834 $605,036,248 $627,476,312 $ 751,051 $ 795,918 $ 880,419 $ 915,390 1,519,739 1,678,433 1,646,154 1,930,717 2,053,552 2,082,650 2,417,906 2,691,856 13,046,569 13,911,155 13,845,726 14,415,974 4,536,302 4,987,044 5,082,506 5,537,693 7,307,996 8,844,304 9,656,079 9,785,177 2,127,958 2,181,174 2,244,487 2,575,292 18,373,237 22,771,046 24,643,795 26,563,709 45,305,119 50,075,963 53,114,613 57,971,869 45,980,329 50,284,775 50,691,295 56,608,946 7,582,394 9,463,418 9,919,289 10,536,853 6,442,601 6,784,499 7,679,563 7,987,408 645,506 659,614 706,889 841,996 1,369,288 1,375,260 1,350,198 1,413,500 4,244,932 4,487,927 4,523,674 4,852,130 20,710,853 22,002,451 23,101,851 25,133,156 7,303,119 9,005,577 6,598,224 7,682,762 22,853,552 24,458,1 34 25,649,889 26.878,842 391,680 422,434 519,078 514,486 1,782,146 1,769,960 1.238,865 1,296,046 - - 1,640,318 1,693.256 1,944,579 2,227,688 2,425,178 2,695,813 1,853,296 2.022.490 1,461,103 1,515,462 $218,125,798 $242,291,914 $251,037,099 $272,038,335 6,989,219 - - - $225,115,017 $242,291,91.4. $251,037,099 $272,038,335 2002 $387,422,231 181,899,276 4,074,179 4,544,400 4,246,424 5,744,900 4,090,171 183,347 55,253,869 17,1951254 $664,654,051 $ 988,674 2,041,220 2,872,720 14,863,706 5,033,197 11,597,370 2,569,211 28,496,226 60,242,707 55,339,922 11,663,356 8,234,063 833,156 1,658,092 5,085,381 24,644,344 7,934,495 30,417,433 505,882 1,282,788 2,117,381 2,679,836 1,568,878 $282,670,038 $282,670,038 EXCESS OF REVENUES OVER (UNDER)EXPENDITURES $312;809;505 ~ $353.999.14~9 $355.437.97~7 $381.984.01~3 ¢) Starbng In FY 99, Capital Outlay reported In each department Source C~ty Department of F~nance A-47 GENERAL FUND COMPARATIVE STATEMENT OF REVENUES AND EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE FISCAL YEAR ENDING JUNE 30 OTHER FINANCING SOURCES (USES) Proceeds From Capttal Leases Operabng Transfers m Operating Transfers out Total Other Financing Sources (Uses) EXCESS OF REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING FUND BALANCE---JULY 1 Restdual Equity Transfers ADJUSTED FUND BALANCE-- JULY 1 FUND BALANCE--JUNE 30 1998 1999 2000 2001 2002 $ - $- $ - $ - $ 411,626 2,027,353 3,483,798 325,842 377,030 1,728 {324,639,583) (322,683,643) {353,576,086) {356,733,330) $(373,712,966) $(322,612,2.30) $(319,199,845) $(353,250,244) $356,356,300) $(373,299,612) $(9,802,725) $(3,323,925) $748,905 $(8!5,323) $8,684.401 $107,502,880 $97,700,155 $94,376,230 $96,067,969 $95,445,728 - - 296,082 - . 449,765 $107,502,880 $97,700,155 $94,376,230 $96,364,051 $ 95,895,493 S97~700~155 ~ ~ ~ $104.579.8~ Note to the Table The entire General Fund balance ~s not avadable for appropnabon because of outstanding ~nterfund and ~nteragency loans, prepaid items, encumbrances, and designations for school capital projects An analys~s of the General Fund balance is as follows Fund Balance --June 30, 2002 Less Reserved Amounts: Encumbrances Advances to Other Funds Loans Federal Arbitrage Less Unreserved Amounts Designated for School Capital Projects - Textbooks and Other Designated for Future Programs Designated for CapItal Projects Net Balance Available for Appropnabon - July 1, 2002 $2,823,698 290,000 8,425,417 245,502 21,149,154 9,002,297 3,184,578 $1 O4,579,894 45,120,646 Source C~ty Department of F~nance A-48 At the end of F~scal Year 2002, the General Fund Balance was $104,579,894 Th~s balance represents an ~ncrease of $8,684,401 from the prewous year The table on the following page presents a comparison of the C~ty's General Fund balance for F~scal Years 1998 through 2002 GENERAL FUND BALANCE FISCAL YEARS 1998 THROUGH 2002 General Fund Balance Reserved for: Encumbrances Advance to Other Funds Loans Prepaid Items Federal Arbitrage Rebate Liability Unreserved- Designated for School Capital Projects-Textbooks and other Designated for Capital ProJects Designated for Year 2000 Designated for Future Programs Undesignated Totals 1998 1999 2000 2001 2002 $ 2,213,220 $ 3,279,234 $ 4,384,360 $5,301,884 $2,823,698 327,450 327,450 327,450 290,000 290,000 7,668,237 7,878,387 7,852,137 8,367,027 8,425,417 5,655 14,090 5,655 .... 377,129 377,129 521,301 826,318 245,502 16,203,785 12,931,815 13,614,392 10,926,451 21,149,154 6,304,645 12,318,388 3,966,824 1,200,000 3,184,578 1,400,000 ........ 1,144,019 1,065,438 9,649,096 6,207,137 9,002,297 62,056,015 56,184,299 54,803,920 62,326,911 59,459,248 $97~700~155 ~9._4+3_7_6~,3~ $~5..,.J2,5.+J3~ ~ $104~579~894 The C~ty has maintained a s~zable General Fund balance in each of the past ten fiscal years as summarized ~n the table below GENERAL FUND BALANCE AS PERCENT OF GENERAL FUND REVENUES FISCAL YEARS 1993 THROUGH 2002 Fiscal Fund Balance Year June 30 General Fund Balance As Percent of General Fund Revenues 1993 $ 75,971,170 1994 83,041,391 1995 96,517,865 1996 99,640,666 1997 107,502,880 1998 97,700,155 1999 94,376,230 2000 95,125,135 2001 95,445,728 2002 104,579,894 1681% 17 82 21 36 20 56 21 11 18 62 16 91 15 72 1521 15 73 A-49 The Water and Sewer System The Department of Pubhc Ut~hbes operates the C~ty owned Water Ubhty and the Samtary Sewer Ut~hty The m~sslon of the Department ~s "to prowde pubhc water, ~nclud~ng water for fire protection, and pubhc samtary sewer service to the urban areas of V~rg~ma Beach." The goals are "to prowde quahty pubhc serwce at reasonable costs and to plan, build, operate and maintain ~ts fac~hhes to meet commumty needs, environmental respons~b~ht~es and regulatory requirements" The physical property of the C~ty water system as of June 30, 2002, ,ncluded approximately 1,409 m~les of transmission and distnbuhon mains, 7,441 fire hydrants, 13 water storage fac~hhes, and ten pumping stahons 0nclud~ng Lake Gaston) The City water system ~s fully metered, with tap sizes ranging from %-~nch to 12 ~nches. As of June 30, 2002, the water system had approximately 126,093 connections, representing a I 2% increase over the number reported in 2001, and a customer base of approximately 416,000 people. The C~ty Sanitary Sewer System includes collector hnes, force mains and pump stations, which are used to collect and transport wastewater to the treatment fac~ht~es operated by the Hampton Roads Samtahon D~stnct ("HRSD"), the regional treatment agency. V~rg~ma Beach c~t~zens receiving samtary sewer pay the C~ty a fee for collection and transport of wastewater and HRSD a fee for treatment of the wastewater The C~ty's Samtary Sewer System consists of 386 sewer pump stations and over 1,505 m~les of p~pehne ranging ~n s~ze from 4 roches to 36 ~nches m d~ameter As of June 30, 2002, the number of C,ty sewer connechons was 124,172, representing a 1 1% increase over the number reported ~n 2001 The HRSD, estabhshed m 1940, provides wastewater treatment services for 17 c~t~es and counhes in southeastern Wrg~ma. The HRSD operates rune major treatment fac~htles ~n Hampton Roads and two smaller treatment faclht~es on the M~ddle Peninsula, w~th a total treatment capacity of 230 5 million gallons per day ("MGD"). Two HRSD plants are located in the City. The Chesapeake-Ehzabeth Plant, ~n operation s~nce 1968, has an operating capacity of 24 MGD, with average annual flow estimated at 18 MGD The Atlantic Plant has an operahng capacity of 36 MGD and average annual flow estimated at 28 MGD The HRSD has a service populahon of 1.5 m~lhon. HRSD reports that ~t is meeting all ~ts d~scharge permit requirements established by the U S Environmental Protechon Agency and the Wrg~ma Department of Enwronmental Quahty The Water Ut~hty and Sanitary Sewer System are operated and maintained ~n good working order including repa~nng, rebuilding, or replacing of equipment and structures when required In add~hon, the C~ty has developed an ongoing tra~mng program to develop a staff of personnel in sufficient numbers to promote safe and technically competent operabon of the water and sewer ut~hty In May 2000, the C~ty acquired the last privately-owned water ubhty ~n V~rg~ma Beach Th~s pnvately-owned ut~hty served approximately 150 customers S~nce 1977, the C~ty has acquired four other private water utlhbes with an estimated 2,000 customers and s~x samtary sewer ubht~es w~th an eshmated 20,000 customers. The estimated depreciated value of the water and sewage property, plant and equipment was $490,337,429 as of June 30, 2002, ~ncludlng land and air nghts. A-50 WATER AND SEWER SYSTEM ASSET EVALUATION FOR FISCAL YEARS ENDING JUNE 30 1998 MiIhons of Gallons of Water Storage 30.25 M~les of Water Lines 1,343 M~les of Sewer Lines 1,410 Number of Water Pump Stabons(~) 10 Number of Sewer Pump Stabons 372 Number of Water Connecbons 119,414 Number of Sewer Connections 117,749 Total Value of Utility Plant in Service(2) ~ (4) Includes Lake Gaston (2) Excludes deprec, at~on ~999 2000 2001 2002 30.25 30.25 30 25 30 25 1,371 1,388 1,398 1,409 1,451 1,466 1,486 1,505 10 10 10 10 380 385 386 386 121,534 123,026 124,630 126,093 119,540 121,397 122,779 124,172 Source C~ty Department of Pubhc Ut~ht, es The City's water and sewer system ~s operated on a self-susta~mng basis, w~th rates and charges adjusted when necessary to assure a stream of revenues adequate to cover the costs of operations and maintenance of the system and debt service on all water and sewer system bonds. Revenues from water and sewer charges are reserved solely for the payment of water and sewer fund obhgabons and have not been used for any non-water or non-sewer related purpose Water and sewer charges are maintained at a level sufficient to pay all water and sewer operabng expenses and debt service S~nce 1986, the consulbng eng~neenng firm of Alvord, Burdock & Howson, L L C. ("AB&H") has been used as the C~ty's water and sewer rate consultant to perform various studies and analyses for the water and samtary sewer system AB&H regularly examines the books and records of the Department of Pubhc Ubht~es and conducts a physical ~nspecbon of the operabng fac~hbes ~n order to develop recommendabons for adequate water and sewer rates. The terms of the contracts have called for AB&H to conduct a cost of service study and to develop recommended rates which would be adequate for the succeeding five fiscal years The analyses have ~ncluded a projechon of revenues and expenditures for a period of five fiscal years from a test year In the aggregate, the studies have resulted ~n a program of regular rate adjustments over the past fifteen years. Periodic water and samtary sewer rate increases have been approved by C~ty Council to meet anbc~pated ~ncreases ~n future revenue requirements, ~nclud~ng. · Funding requirements of the water and sanitary sewer capital ~mprovement program · Add~bon of Lake Gaston Project to the C~ty water supply system · Provisions for funding to address aging ~nfrastructure in the sanitary sewer system Increase ~n the sanitary sewer charges, as adopted by C~ty Council, took affect on July 1, 2001, and July 1, 2002, w~th an addlbonal ~ncrease to take effect on July 1, 2003 These increases were supported by the 2001 Cost of Service Study prepared by AB&H, the C~ty's ubhty rate consultants A-51 H~stoncal water commodity rates and sanitary sewer charges for a s~ngle family residence and their effecbve date are outhned below, Effective Date Water Commodity Rate ('per 1,000 qallons) Sanitary Sewer Service Charge Single Family Residence (per month) July 1, 1983 August 1, 1987 October 1, 1987 July 1, 1988 July 1, 1989 July 1, 1990 October 1, 1990 July 1 1991 July July July July July July July 1 1992 I 1993 1 1994 1 1999 1 2001 1 2002 I 20O3 $1 62 $ 9 46 1 81 946 I 99 9 46 2 18 946 2.51 9 46 2 69 9 46 2 77 9 65 2 96 10 58 3.11 11 38 3 38 11 38 3 65 11 38 3.55 11 38 3 55 12.29 3 55 13 27 3 55 14 34 The C~ty's water and sewer actlwtles are operated on an enterpnse fund accounting basis Fiscal Year 2002 operabng revenues were $72,705,220 This represents a 4.2% ~ncrease over F~scal Year 2001 The Water and Sewer Enterprise Fund had poslbve Net Assets of $523,232,032 at the end of F~scal Year 2002. Typical Water and Sewer Bills Under the C~ty's current rate structure, a s~ngle family residence consuming 6,000 gallons for 30 days would receive a b~ll as follows: [does th~s need to change'~] Current Projected Rates 7-1-2003 Water Usage; 6 x $3 55 per 1,000 gallons Minimum Service Availability Charge Sanitary Sewer Service Total Water and Sanitary Sewer Monthly Billing $21 30 $21 30 3 40 3 40 $24.70 $24 70 13 27 14 34 $37 97 $39 O4 In add~bon, the HRSD would charge the same residence $10 91 for wastewater treatment of 6,000 gallons dunng the same brae per~od. The last HRSD rate increase was ~n F~scal Year 2002 Operating Results-Water and Sewer System The City Council fixes water and sanitary sewer rates and charges such that esbmated ~ncome generated by such rates and charges will cover operating expenses and debt service relabng to the water and sewer system. Funds and accounts relating to the Department of Pubhc Ubht~es are kept separate from other funds and accounts of the C~ty A-52 The Department of Public Ubht~es has financed the construction and acqu~slbon of water and sewer fac~hbes through Federal and State grant proceeds, pay-as-you-go funding and the ~ssuance of City general obhgabon water and sewer bonds, double barrel water and sewer bonds (secured both by water and sewer revenues and the C~ty's general obhgabon pledge) and water and sewer revenue bonds The Department ~s required by the C~ty's bond resolubons, among other prows~ons, to establish rates sufficient to cover operabons and maintenance and debt service on the general obhgat~on water and sewer bonds and the water and sewer revenue bonds Certain general obhgahon bonds ~ssued prior to 1977 for water and sewer purposes are not subject to such covenant However, ~t ~s C~ty Council pohcy to pay debt service on those general obhgabon bonds ~ssued for the water and sewer purposes from revenues of the Water and Sewer Enterprise Fund, and to set water and sewer rates accordingly The table on the following page presents the operabng results of the Water and Sewer Enterprise Fund, exclusive of deprec~abon, as used ~n compubng coverage of debt service, for F~scal Year 1998 through F~scal Year 2002 Coverage of debt serwce on the water and sewer revenue bonds and the general obhgabon bonds ~ssued for water and sewer purposes ~s shown separately from the coverage of debt service on all bonds ~ssued for water and sewer purposes A-53 SYSTEM OPERATING REVENUES, EXPENSES AND COVERAGE (in thousands of dollars) Operating Revenues Service Charges Water Usage M~scellaneous Total Operabng Revenues 1998 1999 2000 2001 2002 $28,822 $28,237 $28,062 $28,530 $30,725 39,983 41,307 40,535 40,432 41,213 339 1,483 894 .788. 767 $68,144 $71,027 $69,491 $69,750 $72,705 Operating Expenses Water Treatment (Serwces) Water Distnbubon Sewer Collecbon Adm~mstrabon and Engineering Customer Serwces Total Operating Expenses Net Operabng Income $28,875 $32,325 $24,641 $24,991 $25,542 4,775 5,857 6,119 6,598 6,638 6,539 7,398 7,445 7,779 8,848 11,034 10,660 10,929 10,446 10,549 4,927 5,264 5,461 7,326 7,211 $56,150 $61,504 $54,595 $57,140 $58,788 $11,994 $ 9,523 $14,896 $12,610 $13,917 Non-Operating Income Interest Water Resource Recovery Fee Sewer Connecbon Fees Sale of Salvage* Norfolk Water True-Up Total Non-Operating Income $ 3,969 $ 3,359 $ 3,603 $ 5,378 $ 2,924 3,835 4,579 4,017 4,122 4,699 1,645 2,411 2,073 2,091 1,965 - - - 46 44 4,466 - 5,448 694 2,609 $13,915 $10,349 $15,141 $12,331 $12,241 Income Available For Debt Service _~ ~ $30..037 ,~,_.4+9_4_1. Annual Debt Service Water and Sewer Revenue Bonds Total Water and Sewer Debt Serwce Coverage of Debt Service on Water and Sewer Revenue Bonds Coverage of Debt Serwce on All Debt Supported by Water and Sewer Revenues * Includes sale of salvage starbng in 2001 $ 5,689 $ 6,000 $ 6,408 $ 7,581 $ 9,281 11,658 11,930 12,383 11,569 13,261 4 55x 3 31x 4 69x 3 29x 2 82x 2.22x 1 67x 2 43x 2 16x 1 97x Source Department of F~nance and Department of Pubhc Ubhbes Water Sales and Services Contracts Unbl the Lake Gaston P~pehne Project was completed ~n late 1997, the C~ty had no ~ndependent water supply and obtained water from the City of Norfolk under a Water Sales Contract and a Water Serwces Contract. The Lake Gaston P~pehne Project was put ~nto service on January 1, 1998 On that date, the C~ty terminated the Water Sales Contract w~th Norfolk except for certain prows~ons which survived untd June 30, 1999 The Water Services Contract, which obhgates Norfolk to receive, treat, and dehver Lake Gaston water to the C~ty, runs through the year 2030 In essence, the City has contracted for water system fac~hbes and serwces related to the storage, transmission and treatment of Lake Gaston water The facdlfles are owned by Norfolk, but dedicated to serving the C~ty through the life of the Water Services Contract Those faclhbes ~nclude' A-54 . 2 3 4 Raw water storage (lakes), Raw water pumping stabons and transmission hnes, Water treatment plant capacity, and Treated water storage, pumping and transmission On a b~ennlal bas,s, Norfolk develops projected rates apphcable to the C~ty for treated water These projected rates are based upon the ubhty bas~s "Cost of Service" methodology, which follows tradlbonal ubhty ratemaklng standards Under the pnnc~ples of the ubhty bas~s cost of service allocations, the City pays for its allocable share of operations and maintenance expense, cost of the fac~hbes dedicated to service the C~ty and services prowded by Norfolk, ~nclud~ng a reasonable rate of return on fac~hbes dedicated to serving the C~ty For F~scal Year 2002, the average effecbve projected rate to the City for delivery of bulk treated water was $1 97 per 1,000 gallons On July 1, 2002, that effective rate ~ncreased to $2 00 per 1,000 gallons. At the end of the second fiscal year ~n each b~enn~al period, Norfolk's ~ndependent consultant completes and submits to the C~ty a true-up schedule of rates and annual b~lhngs apphcable to the prewous two fiscal years reflecbng an allocation of cost of service based on actual costs ~ncurred by Norfolk Th~s "true-up" prows~on w~ll result ~n a rebate from Norfolk to the C~ty ~n Fiscal Year 2003 of approximately $2.6 mllhon to be credited during the twelve month period of F~scal Year 2003 Th~s amount represents actual payments ~n excess of costs ~ncurred dunng F~scal Years 2000 and 2001 The $2 6 m~lhon w~ll be used to fund water projects ~dent~fied ~n the Capital Improvement Program for F~scal Years 2003-2008 Water and Sewer Capital Improvement Program The Department of Pubhc Ubht~es annually prepares the port~on of the C~ty's Capital Improvement Plan concerning the ~mprovement and extension of the Water and Sewer System. According to the C~ty's F~scal Year 2004-2009 CIP, water and sewer ut~hty projects ~n the amount of $173,656,389 account for 9 4 percent of overall C~ty capital spending anticipated during the period of Fiscal Years 2004 to 2009. Future funding for the water and sewer program totals $76 3 m~lhon, of which $48 9 m~lhon ~s to be financed w~th water and sewer revenue bonds The following table presents the financing sources expected to meet the s~x-year capital ~mprovement plan for the water and sewer ubhty projects Utility Total Estimated Costs WATER AND SEWER SYSTEM CAPITAL IMPROVEMENT PROGRAM Fiscal Year 2004 To Fiscal Year 2009 Financing Plan Sources of Balance To Be Funded Water and Balance Sewer Previously To Be Revenue Water and Authorized Funded Bonds Sewer Fund HRSD Water $ 51,958,164 Sewer 121,698,225 Total $173.656.389 -- $25,465,164 $26,493,000 $14,688,000 $111,805,000 $ - 71,870,454 49,827,771 34,234,000 14,893,771 700,000 $97.335.61~8 ~ ~u~,92.,2.,J~ ,~..6 + ~9.{~_7.J $700~000 Source Capital Improvement Program for F~scal Years 2004-2009 A-55 The Lake Gaston Project A port~on of the C~ty's Lake Gaston Water Supply Project ~s located within the Gaston/Roanoke Rapids Hydroelectric Project, which ~s operated by Dom~mon Power and hcensed by the Federal Energy Regulatory Commission ("FERC") The Gaston/Roanoke Rapids Hydroelectric Project hcense expired ~n January 2001, s~nce then, however, Dom~n,on has conbnued to legally operate ~t by reason of the fact that FERC ~s required by law to ~ssue one-year extensions of a hydropower hcense when the rehcens~ng process extends beyond the exp~rabon date of the original hcense In contrast to the adversarial proceedings that characterized the perm~tbng of the City's Lake Gaston Project, the rehcenslng process has been a far more cooperative process among the various stakeholders, ~ncludmg North Carohna and V~rg~n~a Beach The stakeholders have negohated a mulb- party settlement agreement that includes terms and cond~bons of a new hcense for the operation of Gaston and Roanoke Rapids Reservoirs If FERC determines that the terms and cond~bons ~n the settlement agreement comply w~th the requirements of law and are ~n the overall pubhc ~nterest, it w~ll ~ssue a new hcense w~th a term of thirty or forty years, thereby resolwng the remaining regulatory ~ssues and uncerta~nbes ~nvolv~ng the Lake Gaston Project Insurance The C~ty utihzes a comb~nabon of commercial ~nsurance and self-~nsurance to protect ~ts assets, ~nclud~ng employees, money and secunbes and buildings and equipment C~ty buildings and their contents are covered by an all risk property ~nsurance program which ~s written w~th a $100,000 per occurrence deducbble Other types of property ~nsurance are written w~th deducbbles ranging from $5,000 to $50,000 and ~nclude coverage for such ~tems as computer equipment, heavy contractor's type equipment, fine arts and valuable papers All C~ty employees are bonded for $1,000,000 The C~ty is pnmanly self-~nsured for the first $2,000,000 of any automobile habll~ty, commercial general hab~hty, public officials' hablhty and police professional hab~hty claims. The City has $10,000,000 of commercial insurance coverage above th~s self-~nsured retention on these hnes of risks. The City ~s also pnmanly self-insured for workers' compensabon and cames commercial insurance ~n excess of any claims totahng $500,000 ~n any s~ngle occurrence. The C~ty's Risk Management Fund had a cash balance of $9,456,107 as of July 1, 2003 An actuanal study conducted by the firm of AON Worldwide Actuanal Soluhons determined that the appropriate s~ze of th~s fund as of July 1, 2003, was $12,024,440, which represented the d~scounted liability of the City. Commitments and Contingencies The C~ty participates ~n a number of federal and state grants, entitlements, and shared revenues programs These programs are subject to program comphance audits by the apphcable federal or state agency or their representatives. Furthermore, the U.S Congress passed leg~slabon called the "Single Audit Act Amendment of 1996" which required most governmental recipients of federal assistance to have an annual ~ndependent organ~zabon-w~de financial and compliance audit. The results thereof are ~ncorporated ~n the audited financial statements for the City for the fiscal year ended June 30, 2002 The amounts, if any, of expenditures which may be d~sallowed by these audits cannot be determined at th~s t~me although the C~ty expects such amounts, ~f any, to be ~mmatenal A-56 Retirement and Pension Plans The C~ty has elected to participate ~n the V~rg~ma Retirement System ('~/RS"), and substanbally all of the full-time salaried general government and school employees are covered by a retirement plan, group term hfe ~nsurance, and d~sabd~ty and death benefits Prior to January 1, 1978, employees contributed five percent of their annual salary. There ~s presently no employee contnbubon, the C~ty pays the enbre cost If there are ~nsuffic~ent funds to meet the vested benefits of the employees, the C~ty ~s hable The VRS maintains separate accounts for each part~c~pabng Iocahty based on contnbubons made by the Iocahty and the benefits pa~d to former employees The C~ty's contnbuhons are actuanally determined by the VRS every two years at rates that prowde for both normal and accrued funding habd~ty. The VRS bas~s calculabon method ~s an entry age normal cost calculabon w~th 30 year amorbzat~on of the unfunded accrued habd~ty The entry age normal cost method ts designed to produce normal costs over the working hfet~me of the part~c~pabng employees and to permit the amorbzabon of any unfunded habd~ty over a period of years The unfunded habd~ty anses because normal costs based on the current benefit formula have not been pa~d throughout the working hfebme of current employees The value of the unpaid normal costs, adJusted for actuanal gains and losses, consbtutes the unfunded habd~ty The last actuanally computed liabd~ty was determined as of June 30, 2000, and ~ncluded amounts for general government and school nonprofessional employees Total habd~ty as of June 30, 2002, both funded and unfunded, follows Actuarial Value Unfunded Actuarial Actuarial of Assets Accrued Accrued General Government Employees School Nonprofessional Employees Total $699,534,703 $(13,781,862) $685,752,841 103,193,396 (14,188,979) 89,004,417 The overfunded habihty of $27,970,841 ~s being amortized over 30 years according to a schedule prescribed by the VRS Employee Relations and Collective Bargaining There were 6,603 C~ty employees 0ncludlng part-time and seasonal employees) as of June 30, 2003, and approximately 10,500 School Board employees for the School Year 2002/2003 Some employees are members of unions or trade or professional assoc~abons However, the C~ty does not, and cannot under Virginia law, bargain collectively with any of its employees The Virglma General Assembly has rejected several recent leg~slabve proposals to authorize pubhc employees to engage ~n collecbve barga~mng Pubhc employees of V~rg~n~a or of any county, c~ty, or town ~n V~rg~n~a do not have a legal right to strike Any such employee who engages ~n any orgamzed strike or wdlfully refuses to perform h~s/her dubes shall, according to V~rg~ma law, be deemed to have terminated h~s/her employment Re- employment of any such employee requires court approval A-57 APPENDIX B AUDITED FINANCIAL STATEMENTS OF THE CITY OF VIRGINIA BEACH, VIRGINIA FOR THE FISCAL YEAR ENDED JUNE 30, 2002 APPENDIX C PROPOSED FORM OF BOND COUNSEL OPINION PROPOSED FORM OF BOND COUNSEL OPINION Set forth below ~s the proposed form of opimon of Bond Counsel. It ~s preliminary and subject to change prior to dehvery of the Series 2003A Bonds City of Vlrglma Beach Development Authority V~rg~n~a Beach, Virg~ma City of Virginia Beach Development Authority Public Facility Revenue Bonds~ Series 2003A Lad~es and Gentlemen' We have examined the apphcable law, includ~ng Chapter 643 of the V~rg~nla Acts of Assembly of 1964, as amended (the "Act"), and certified copies of proceedings and documents relabng to the organization of the City of Virginia Beach Development Authority (the "Authority"), and the issuance and sale by the Authority of ~ts $ Public Facihty Revenue Bonds, Series 2003A (the "Bonds") Reference is made to the form of the Bonds for ~nformabon concermng their details, ~nclud~ng payment and redempbon prowslons, their purposes and the proceedings pursuant to which they are ~ssued Terms used but not defined here~n are defined ~n the Trust Agreement (as hereinafter defined) The Bonds are being issued pursuant to an Agreement of Trust dated as of ,2003 (the "Master Trust Agreement"), between the Authority and ., as Trustee (the "Trustee"), as supplemented by a F~rst Supplemental Agreement of Trust dated as of , 2003 (the "First Supplemental Agreement" and, together with the Master Trust Agreement, th~ "Trust Agreement"), in order to provide funds to undertake the Series 2003A Project at the request of the C~ty of Virg~ma Beach, Virg~ma (the "City") Pursuant to the terms of a Support Agreement dated as of ,2003 (the "Support Agreement"), between the Authonty and the C~ty, the Authority has agreed, subject to appropnabon as described below, to ~ssue the Bonds to finance the Series 2003A Project, and the City has agreed to make Annual Payments under the Support Agreement to the Authonty, which are expected to be sufficient to pay the pnnc~pal of and ~nterest on the Bonds Without undertaking to verify the same by ~ndependent investigation, we have rehed on cert~ficabons by representabves of the Authonty and the C~ty as to certain facts relevant to both our op~mon and requirements of the Internal Revenue Code of 1986, as amended (the "Code") The Authority and the C~ty have covenanted to comply with the current prows~ons of the Code regarding, among other matters, the use, expenditure and investment of proceeds of the Bonds and the bmely payment to the Umted States of any arbitrage rebate amounts w~th respect to the Bonds, all as set forth in the proceedings and documents relabng to the issuance of the Bonds (the "Covenants") Based on the foregoing, and assuming due authonzabon, execution and dehvery of the Documents (as hereinafter defined) by the Trustee, we are of the opinion that' 1. The Authority is a poht~cal subdivision of the Commonwealth of V~rg~ma duly created under the Act and ~s vested w~th all rights and powers conferred by the Act 2 The Bonds have been duly authorized and ~ssued ~n accordance w~th the Act and constitute vahd and binding hm~ted obhgabons of the Authonty payable as to both pnnc~pal and interest solely from Annual Payments, certain Add~bonal Payments and other funds pledged under the Trust Agreement The Bonds do not create or consbtute a debt or pledge of the faith and credit of the Commonwealth of V~rglma or any pohbcal subd~ws~on thereof, ~nclud~ng the Authority and the C~ty. C-! 3 The Trust Agreement, the Rrst Supplemental Agreement and the Support Agreement (the "Documents") have been duly authorized, executed and dehvered by, and constitute vahd and b~nd~ng obhgabons of, the Authority and the C~ty, as apphcable, and are enforceable against the Authority and the C~ty ~n accordance w~th their terms The C~ty's obhgabon to make Annual Payments and Add~bonal Payments under the Support Agreement ~s subject to and dependent upon the C~ty Councd of the C~ty making annual appropnabons for such purpose Such obhgabon does not consbtute a debt of the C~ty w~th~n the meaning of any consbtubonal or statutory hm~tat~on nor a habd~ty of or a I~en or charge upon funds or property of the C~ty beyond any fiscal year for which the C~ty Council has appropriated moneys for such purpose 4 The rights of holders of the Bonds and the enforceabd~ty of such rights, ~nclud~ng the enforcement by the Trustee of the obhgabons of the Authority and the City under the Documents, as applicable, may be limited or otherwise affected by (a) bankruptcy, ~nsolvency, reorgamzabon, moratorium, fraudulent conveyance and other laws affecting the rights of creditors generally and (b) pnnc~ples of equity, whether considered at law or ~n equity. 5 Under current law, ~nterest, ~ncludmg accrued original ~ssue d~scount ("OLD"), on the Bonds (a) is not ~ncluded ~n gross ~ncome for Federal ~ncome tax purposes and (b) ~s not an ~tem of tax preference for purposes of the Federal alternabve m~n~mum ~ncome tax ~mposed on ~nd~wduals and corporabons, however, w~th respect to corporabons (as defined for federal income tax purposes) subject to the alternabve mlmmum ~ncome tax, such ~nterest, ~ncludmg accrued OlD, ~s taken ~nto account ~n determining adjusted current earnings for purposes of compubng such tax The opinion set forth ~n the preceding sentence ~s subject to the cond~bon that there ~s compliance subsequent to the ~ssuance of the Bonds w~th all requirements of the Code that must be Sabsfied ~n order that interest on the Bonds not be ~ncluded ~n gross ~ncome for Federal ~ncome tax purposes Fadure by the Authority and the C~ty to comply w~th the Covenants, among other th~ngs, could cause ~nterest, ~nclud~ng accrued OlD, on the Bonds to be ~ncluded ~n gross ~ncome for Federal ~ncome tax purposes retroacbvely to their date of ~ssue In the case of the Bonds matunng ~n the years ~ through (the "OLD Bonds"), the deference between 0) the stated principal amount of each maturity of the OlD Bonds and (~) the imbal offering price to the pubhc (excluding bond houses and brokers) at which a substanbal amount of such matunbes of OlD Bonds ~s sold wdl consbtute OlD, OlD wdl accrued for Federal ~ncome tax purposes on a constant y~eld-to-matunty method, and a holder's bas~s ~n such a Bond wdl be ~ncreased by the amount of OlD treated for Federal ~ncome tax purposes as hawng accrued on such Bond whde the holder holds the Bond. We express no opinion regarding other Federal tax consequences of the ownership of or receipt or accrual of ~nterest on the Bonds Further, we express no op~mon as to the treatment for Federal income tax purposes of any ~nterest pa~d on the Bonds ~n the event of nonappropnabon by the C~ty. 6 Under current law, ~nterest, ~nclud~ng accrued OlD, on the Bonds ~s exempt from ~ncome taxation by the Commonwealth of V~rglma and any political subdlwslon thereof Our services as bond counsel to the Authority have been hmlted to rendering the foregoing op~mon based on our review of such proceedings and documents as we deem necessary to approve the vahd~ty of the Bonds and the tax-exempt status of ~nterest thereon. We express no op~mon here~n as to the financial resources of the C~ty, the abd~ty or wdhngness of the C~ty to make Annual Payments or the accuracy or completeness of any ~nformat~on, ~ncluding the Authonty's Preliminary Official Statement dated , 2003, and ~ts Official Statement dated ,2003, that may have been relied upon by anyone ~n making the decision to purchase Bonds. Very truly yours, C-2 APPENDIX D FORM OF CONTINUING DISCLOSURE AGREEMENT CONTINUING DISCLOSURE AGREEMENT This CONTINUING DISCLOSURE AGREEMENT dated ,2003 (the "Disclosure Agreement"), is executed and dehvered by the C~ty of V~rglma Beach, Virginia (the "C~ty"), in connecbon with the issuance by the C~ty of Virginia Beach Development Authority (the "Authority") of its $ Pubhc Facility Revenue Bonds, Series 2003A (the "Series 2003A Bonds"). The C~ty hereby covenants and agrees as follows' Section 1. Purpose. This D~sclosure Agreement ~s being executed and dehvered by the C~ty for the benefit of the holders of the Series 2003A Bonds and ~n order to assist the purchasers of the Series 2003A Bonds in complying w~th the provisions of Secbon (b)(5)0) of Rule 15c2-12 (the "Rule") promulgated by the Secunbes and Exchange Commission (the "SEC") by prowd~ng certain annual financial ~nformabon and material event notices required by the Rule (collectively, "Conbnu~ng Disclosure") Section 2. Annual Disclosure. (a) The City shall provide annually certain financial ~nformatlon and operating data in accordance with the provis~ons of Section (b)(5)0) of the Rule as follows (0 audited financial statements of the City, prepared in accordance with generally accepted accounting principles; and (u) the operabng data w,th respect to the C~ty of the type described in the secbon of Appendix A of the Authonty's Official Statement dated ,2003, enbtled "FINANCIAL INFORMATION -- Operabng Data" If the financial statements filed pursuant to Secbon 2(a)0) are not audited, the City shall file such statements as audited when available (b) The C~ty shall prowde annually the financial informat~on and operabng data described ~n subsecbon (a) above (collectively, the "Annual D~sclosure") w~th~n 180 days after the end of the C~ty's fiscal year, commencing w~th the C~ty's fiscal year ending June 30, 2004, to each nabonally recognized municipal secunbes ~nformabon repository ("NRMSIR") and to the appropriate state ~nformabon depository ~f any then exists ("SID') (c) Any Annual Disclosure may be included by specific reference to other documents prewously prowded to each NRMSIR and to the SID or filed w~th the SEC, prowded, however, that any final official statement ~ncorporated by reference must be available from the Municipal Securities Rulemak~ng Board (the "MSRB") (d) The C~ty shall prowde ~n a bmely manner to each NRMSIR or the MSRB and to the SID nobce specifying any failure of the C~ty to provide the Annual D~sclosure by the date specified Section 3. Event Disclosure. The C~ty shall prowde ~n a bmely manner to each NRMSIR or the MSRB and to the SlD not~ce of the occurrence of any of the following events w~th respect to the Series 2003A Bonds, ~f matenah (a) pnnc~pal and ~nterest payment dehnquenc~es; (b) non-payment related defaults, (c) unscheduled draws on debt service reserves reflecbng financial d~fficult~es, (d) unscheduled draws on any credit enhancement reflecbng financial d~fficulbes, (e) substitution of credit or hqu,dlty providers, or their failure to perform, D-1 (f) adverse tax oplmons or events affecting the tax-exempt status of the Senes 2003A Bonds, (g) mod~flcabons to rights of Bondholders, (h) bond calls, (m) defeasance of all or any portion of the Series 2003A Bonds, 0) release, substltubon, or sale of property securing repayment of the Series 2003A Bonds; and (k) rabng changes Section 4. Termination. The obhgabons of the C~ty will terminate upon the redempbon, defeasance (w~th~n the meaning of the Rule) or payment ~n full of all the Series 2003A Bonds Section 5. Amendment. The City may modify its obllgabons hereunder w~thout the consent of Bondholders, provided that this D~sclosure Agreement as so modified comphes with the Rule as ~t exists at the time of modlficabon The City shall within a reasonable time thereafter send to each NRMSIR and the SID a description of such modification(s) Section 6. Defaults. (a) If the C~ty fails to comply w~th any covenant or obhgabon regarding Continuing D~sclosure specified in this Disclosure Agreement, any holder (w~thln the meaning of the Rule) of Series 2003A Bonds then outstanding may, by nobce to the C~ty, proceed to protect and enforce ~ts rights and the rights of the holders by an acbon for specific perforTnance of the C~ty's covenant to provide the Continuing D~sclosure (b) Notwithstanding anything herein to the contrary, any failure of the City to comply with any obligation regarding Continuing Disclosure specified in th~s Disclosure Agreement (i) shall not be deemed to consbtute an event of default under the Series 2003A Bonds or the Agreement of Trust, as defined ~n the Series 2003A Bonds, providing for the issuance of the Series 2003A Bonds and (.) shall not give rise to any right or remedy other than that described mn Secbon 6(a) above Section 7. Additional Disclosure. The City may from time to bme disclose certain information and data in addlbon to the Continuing D~sclosure Notwithstanding anything here~n to the contrary, the C~ty shall not incur any obhgabon to conbnue to provide, or to update, such additional informabon or data Section 8. Counterparts. This Disclosure Agreement may be executed ~n several counterparts each of which shall be an original and all of which shall consbtute but one and the same instrument Section 9. Governing Law. This Disclosure Agreement shall be construed and enforced in accordance with the laws of the Commonwealth of Vlrg~ma CITY OF VIRGINIA BEACH, VIRGINIA By,, Mayor, City of Vmrg~ma Beach, Virginia By C~ty Manager, City of Virginia Beach, V~rg~n~a D-2 APPENDIX E INFORMATION REGARDING THE DEPOSITORY TRUST COMPANY AND ITS BOOK-ENTRY SYSTEM INFORMATION REGARDING THE DEPOSITORY TRUST COMPANY AND ITS BOOK-ENTRY SYSTEM The description which follows of the procedures and recordkeeping with respect to beneficial ownership interests in the Series 2003A Bonds, payments of principal of and premium, if any, and interest on the Series 2003A Bonds to The Depository Trust Company, New York, New York ("DTC"), its nominee, Participants or Beneficial Owners (each as hereinafter defined), confirmation and transfer of beneficial ownership interests in the Series 2003A Bonds and other bond-related transactions by and between DTC, Participants and Beneficial Owners is based solely on information furnished by DTC. DTC w~ll act as secur~bes depository for the Bonds. The Bonds will be issued as fully-registered securibes registered in the name of Cede & Co, DTC's partnership nominee, or such other name as may be requested by an authorized representative of DTC One fully-registered Bond cerbflcate w~ll be ~ssued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited w~th DTC DTC, the world's largest depository, ~s a limited-purpose trust company organized under the New York Banking Law, a "banking organization" w~th~n the meaning of New York Banking Law, member of the Federal Reserve System, a "cleanng corporation" w~th~n the meamng of the New York Un~form Commercial Code, and a "cleanng agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934 DTC holds and prowdes asset serwcmg for over 2 mllhon issues of U.S and non-U S equity ~ssues, corporate and mumc~pal debt issues, and money market ~nstruments from over 85 counbes that DTC's participants (the "D~rect Participants") deposit w~th DTC. DTC also fac~htates the post-trade settlement among D~rect Parhc~pants of sales and other secuntles transactions ~n deposited secunbes, through electronic computenzed book-entry transfers and pledges between D~rect Parhc~pants' accounts Th~s ehm~nates the need for physical movement of secunbes certificates. D~rect Parhcipants ~nclude both U S and non-U S securities brokers and dealers, banks, trust companies, clearing corporations, and certain other orgamzabons DTC ~s a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC") DTCC, ~n turn, ~s owned by a number of Direct Participants of DTC and Members of the Nabonal Secur~bes Clearing Corporabon, Government Securities Cleanng Corporation, MBS Cleanng Corporabon, and Emerging Markets Clearing Corporabon ("NSCC," "GSCC,", "MBSCC" and "EMCC", also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc, the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc Access to the DTC system is also available to others such as both U S. and non-U S secur~hes brokers and dealers, banks, trust compames, and cleanng corporabons that clear through or maintain a custodial relabonsh~p with a D~rect Participant, either d~rectly or Ind~rectly (the "Indirect Participants") DTC has Standard & Poor's highest rating' AAA. The DTC Rules applicable to ~ts Participants are on file w~th the Secunbes and Exchange Commission More ~nformabon about DTC can be found at www.dtcc.com Purchases of the Bonds under the DTC system must be made by or through D~rect Participants, which will receive a credit for the Bonds on DTC's records The ownership interest of each actual purchaser of each Bond (the UBeneflclal Owner") ~s ~n turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners w~ll not receive written confirmation from DTC of their purchase Beneficial Owners are, however, expected to receive written confirmabons prowd~ng details of the transacbon, as well as periodic statements of their holdings, from the D~rect or Indirect Participant through which the Beneficial Owner entered ~nto the transacbon Transfers of ownership interests m the Bonds are to be accomplished by entr~es made on the books of D~rect or Indirect Parbc~pants acting on behalf of Beneficial Owners Beneficial Owners w~ll not receive certificates representing their ownership ~nterests ~n the Bonds, except ~n the event that use of the book-entry system for the Bonds ~s d~sconbnued. To faclhtate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co, or such other name as may be requested by an authorized representabve of DTC. The deposit of the Bonds w~th DTC and their F.-! reglstrabon in the name of Cede & Co or such other DTC nominee do not effect any change ~n beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds, DTC's records reflect only the ~denbty of the D~rect Parbc~pants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners The D~rect and Indirect Participants w~ll remain responsible for keeping account of their holdings on behalf of their customers Conveyance of nobces and other commumcabons by DTC to D~rect Parbc~pants, by Direct Parbc~pants to Indirect Participants, and by D~rect Participants and Indirect Participants to Beneficial Owners w~ll be governed by arrangements among them, subject to any statutory or regulatory requirements as may be ~n effect from bme to bme Redemption nobces shall be sent to DTC If less than all of the Bonds are being redeemed, DTC's practice ~s to determine by lot the amount of the interest of each Direct Parhc~pant in such ~ssue to be redeemed. Neither DTC nor Cede & Co (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a D~rect Participant in accordance w~th DTC's Procedures Under its usual procedures, DTC ma~ls an Ommbus Proxy to the Authority or the Trustee as soon as possible after the record date. The Ommbus Proxy assigns Cede & Co's consenbng or voting rights to those D~rect Participants to whose accounts the Bonds are credited on the record date (idenbfled ~n a listing attached to the Ommbus Proxy). Principal of and, premium, ~f any, and ~nterest payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representabve of DTC. DTC's pracbce is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail ~nformabon from the Trustee on payable date ~n accordance with their respective holdings shown on DTC's records Payments by Participants to Beneficial Owners w~ll be governed by standing ,nstrucbons and customary pracbces, as ~s the case w~th secunbes held for the accounts of customers m bearer form or registered ~n "street name," and w~ll be the respons~b~hty of such D~rect or Indirect Participant and not of DTC (nor ~ts nominee), the Trustee, or the Authority, subject to any statutory or regulatory requirements as may be in effect from brae to time. Payment of pnnclpal, premium, if any, and interest to Cede & Co. (or such other nominee as may be requested by an authorized representabve of DTC) is the responsibility of the Authority or the Trustee, d~sbursement of such payments to D~rect Participants shall be the respons~b~hty of DTC, and d~sbursement of such payments to the Beneficial Owners shall be the responsibility of D~rect and Indirect Participants. DTC may dlsconbnue prowd~ng ~ts services as secunbes depository w~th respect to the Bonds at any bme by g~wng reasonable notice to the Authonty or the Trustee Under such circumstances, in the event that a successor securibes depository is not obtained, Bond certificates w~ll be pnnted and delivered The Authority, at the d~recbon of the C~ty, may dec~de to d~sconbnue use of the system of book- entry transfers through DTC (or a successor secunbes depository) In that event, Bond certificates will be printed and dehvered. The ~nformabon in this secbon concermng DTC and DTC's book-entry system has been obtained from sources that the Authority and the City believe to be reliable, but the Authority and the City take no responsibility for the accuracy thereof NEITHER THE AUTHORITY, THE CITY NOR THE TRUSTEE HAS ANY RESPONSIBILITY OR OBLIGATION TO THE DIRECT OR INDIRECT PARTICIPANTS OR THE BENEFICIAL OWNERS WITH RESPECT TO (A)THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DIRECT OR INDIRECT PARTICIPANT, (B) THE PAYMENT BY ANY DIRECT OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL OF AND PREMIUM, IF ANY, AND INTEREST ON THE BONDS, (C) THE DELIVERY OR TIMELINESS OF DELIVERY BY ANY DIRECT OR INDIRECT PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER THAT IS £-2 REQUIRED OR PERMITTED UNDER THE TERMS OF THE TRUST AGREEMENT TO BE GIVEN TO BONDHOLDERS; OR (D) ANY OTHER ACTION TAKEN BY DTC, OR ITS NOMINEE, CEDE & CO , AS BONDHOLDER, INCLUDING THE EFFECTIVENESS OF ANY ACTION TAKEN PURSUANT TO AN OMNIBUS PROXY. So long as Cede & Co ~s the registered owner of the Bonds, as nominee of DTC, references ~n th~s Official Statement to the Owners of the Bonds shall mean Cede & Co and shall not mean the Beneficial Owners, and Cede & Co will be treated as the only holder of Bonds for all purposes under the Trust Agreement The Authority may enter ~nto amendments to the agreement w~th DTC or successor agreements w~th a successor securities depository, relabng to the book-entry system to be maintained w~th respect to the Bonds w~thout the consent of Beneficial Owners or Bondholders. 22764 000254 RICHMOND 1031095v7 E-3 PRELIMINARY OFFICIAL STATEMENT DATED _, 2003 New Issue Rat, ngs: F,tch: .... q Book-Entry Only Moody's: .... __ S&P: "AA" (See "RATINGS herein") Th~s Ofhc~al Statement has been prepared by the C~ty of V~rgm~a Beach, V~rgm~a (the "C~ty"), on behalf of the C~ty of V~rg~n~a Beach Development Authonty (the "Authority") to provide mformat~on on the Series 2003A Bonds, the secunty therefor, the C~ty, the projects being financed w~th the proceeds of the Series 2003A Bonds and other relevant ~nformat~on Selected reformat,on ~s presented on th~s cover page for the convemence of the user To make an reformed decision regarding the Senes 2003A Bonds, a prospective investor should read th~s Official Statement m ~ts enbrety CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY $165,000,000' PUBLIC FACILITY REVENUE BONDS, SERIES 2003A Dated Date. September 1, 2003 Due: December 1, as shown on the ins,de cover Interest Rates/Yields See ~ns~de cover Security THE SERIES 2003A BONDS WILL BE LIMITED OBLIGATIONS OF THE AUTHORITY, PAYABLE SOLELY FROM CERTAIN PAYMENTS TO BE MADE BY THE CITY, PURSUANT TO A SUPPORT AGREEMENT DATED AS OF SEPTEMBER 1, 2003 (THE "SUPPORT AGREEMENT"), BETWEEN THE CITY AND THE AUTHORITY, FROM CERTAIN FUNDS AND THE INVESTMENT INCOME THEREFROM HELD UNDER THE AGREEMENT OF TRUST, AS DESCRIBED BELOW THE OBLIGATION OF THE CITY TO MAKE PAYMENTS UNDER THE SUPPORT AGREEMENT WILL BE SUBJECT TO ANNUAL APPROPRIATIONS BY THE CITY THE SUPPORT AGREEMENT, THE SERIES 2003A BONDS AND THE PREMIUM, IF ANY, AND INTEREST THEREON SHALL NOT BE DEEMED TO CONSTITUTE A GENERAL OBLIGATION DEBT OR A PLEDGE OF THE FAITH AND CREDIT OF THE COMMONWEALTH OF VIRGINIA OR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE AUTHORITY AND THE CITY NEITHER THE COMMONWEALTH OF VIRGINIA NOR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE AUTHORITY AND THE CITY, SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF OR PREMIUM, IF ANY, OR INTEREST ON THE SERIES 2003A BONDS OR OTHER COSTS INCIDENT THERETO EXCEPT FROM THE REVENUES AND RECEIPTS PLEDGED AND ASSIGNED THEREFOR, AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE COMMONWEALTH OF VIRGINIA, OR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE AUTHORITY AND THE CITY, IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR PREMIUM, IF ANY, OR INTEREST ON THE SERIES 2003A BONDS OR OTHER COSTS INCIDENT THERETO THE AUTHORITY HAS NO TAXING POWER. See "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2003A BONDS." Tax Exemption Interest on the Senes 2003A Bonds (1) wIll not be included m gross income for federal income tax purposes, (2) w~ll not be an ~tem of tax preference for purposes of the federal alternative m~n~mum tax ~mposed on ~ndw~duals and corporabons and (3) wdl be exempt from ~ncome taxabon by the Commonwealth of V~rgm~a Such interest on the Senes 2003A Bonds may be included m the calculation of a corporabon's alternabve minimum ~ncome tax, and a holder may be subject to other federal ~ncome tax consequences See "TAX EXEMPTION" and Appendix C Issued Pursuant To Trustee The Senes 2003A Bonds wdl be ~ssued pursuant to an Agreement of Trust dated as of September 1, 2003, as supplemented by a Rrst Supplemental Agreement of Trust dated as of September 1, 2003, between the Authonty and Wachowa Bank, National Assoc~abon, as Trustee Wachowa Bank, Nabonal Assoc~abon, R~chmond, V~rg~n~a Purpose Interest Payment Dates The proceeds of the Senes 2003A Bonds wdl be used to finance vanous capital ~mprovements m the C~ty of V~rg~ma Beach, V~rg~n,a See "THE PROJECTS." June I and December 1, commencing June 1,2004 Redemption The Senes 2003A Bonds are subject to redempbon pnor to matunty See "DESCRIPTION OF SERIES 2003A BONDS -- Redemption" Denom~nabons Regular Record Date Closing/Del,very Date Reg,strabon Bond Counsel Cond~bons Affechng Issuance $5,000 and integral mulbples thereof May 15 and November 15 On or about September 24, 2003 Full book-entry only, The Depository Trust Company, New York, New York See Append,x E Hunton & Wdhams LLP, R~chmond, V~rgm~a The Senes 2003A Bonds are offered when, as and ~f ~ssued, subject to, among other conditions, the legal op~mon of Hunton & Wdhams LLP Dated 2003 * Prehm~nary, subject to change H&W LLP draft of 8/1 4/03 City of Virginia Beach Development Authority $165,000,000' Public Facility Revenue Bonds, Series 2003A Dated: September 1, 2003 Due: December 1, as shown below Plus accrued interest from September 1, 2003 MATURITIES, AMOUNTS, INTEREST RATES, YIELDS (OR PRICES) AND CUSIP NUMBERS Maturity* Principal Amount* Interest Rate 20O4 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 $ 3,865,000 4,595,OOO 5,945,OOO 6,255,000 6,570,000 6,225,000 6,540,000 6,880,000 7,235,000 7,600,000 8,010,000 8,470,000 8,950,000 9,450,000 9,965,000 10 ~505,000 11,080,000 11,665,000 12,285,000 12,910,000 Price or Yield CUSIP Number * Prehmmary, subject to change THE SERIES 2003A BONDS ARE EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SERIES 2003A BONDS ARE ALSO EXEMPT FROM REGISTRATION UNDER THE SECURITIES LAWS OF THE COMMONWEALTH OF VIRGINIA. NO DEALER, BROKER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION, OTHER THAN THOSE CONTAINED IN THIS OFFICIAL STATEMENT, AND IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE AUTHORITY OR THE CITY. THIS OFFICIAL STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF THE SERIES 2003A BONDS BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH OFFER, SOLICITATION OR SALE THIS OFFICIAL STATEMENT IS NOT TO BE CONSTRUED AS A CONTRACT OR AGREEMENT BETWEEN THE CITY, THE AUTHORITY OR THE PURCHASERS OR HOLDERS OF ANY OF THE SERIES 2003A BONDS. THE INFORMATION HEREIN IS SUBJECT TO CHANGE WITHOUT NOTICE AND NEITHER THE DELIVERY OF THIS OFFICIAL STATEMENT NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CITY OR THE AUTHORITY SINCE THE DATE HEREOF. TABLE OF CONTENTS Paqe INTRODUCTION ................................................................... 1 DESCRIPTION OF SERIES 2003A BONDS ............................................... 1 SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2003A BONDS ................... 2 THE FINANCING DOCUMENTS .......................................... 4 THE AUTHORITY ............................................................. THE CITY .................................................. THE PROJECTS ................................................................. ESTIMATED SOURCES AND USES OF FUNDS ................................. INVESTMENT CONSIDERATIONS ..................................... LITIGATION ................................................... APPROVAL OF LEGAL MATTERS ..................................... TAX EXEMPTION ........................... FINANCIAL ADVISORS ....................................... INDEPENDENT AUDITORS ....................................... RATINGS ................................. SALE AT COMPETITIVE BIDDING ......................... LEGALITY OF THE SERIES 2003A BONDS FOR INVESTMENT .......... CONTINUING DISCLOSURE .................... MISCELLANEOUS .............................................................................. ......... 10 ........ 10 .... 10 ...... 12 ........ 12 ...... 14 ........ 14 ..... 14 ........ 16 ......... 16 ....... 16 .... 16 ....... 17 .......... 17 .. 18 APPENDIX A APPENDIX B APPENDIX C APPENDIX D APPENDIX E APPENDIX F The C~ty of V~rgm~a Beach, V~rg~n~a Audited Financial Statements of the C~ty for F~scal Year ended June 30, 2002 Proposed Form of Bond Counsel Opinion Form of Continuing D~sclosure Agreement Information Regarding The Depository Trust Company and ~ts Book-Entry System Ofhc~al Not~ce of Sale and B~d Form CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY Robert G Jones, Chair Donald V Jelhg, V~ce-Cha~r Teresa H Carnngton Douglas D Elhs Robert E Fentress Robert F Hagans, Jr Page G Lea CITY OF VIRGINIA BEACH THE CITY COUNCIL Meyera E Oberndorf, Mayor Lou~s R Jones, V/ce Mayor Harry W Dlezel Margaret L Eure Rmhard Maddox Reba S McClanan J~m Reeve Peter W Schm~dt Ronald John "Ron" A V~llanueva Rosemary Wdson James L Wood CERTAIN CITY OFFICIALS James K Spore, City Manager Leshe L Ldley, CltyAttorney Ruth Hodges Smith, City Clerk Steven T Thompson, Chlef F~nanc~al Officer Patnc~a A Phdhps, D/rector of F/nance John T Atk~nson, City Treasurer BOND COUNSEL Hunton & W~lhams LLP R~verfront Plaza, East Tower 951 East Byrd Street R~chmond, V~rg~n~a 23219 FINANCIAL ADVISORS Government Finance Associates, Inc 590 Madison Avenue, 21st Floor New York, New York 10022 ARD Government F~nance Group 1601 N Kent Street, Suite 800 Arhngton, V~rgm~a 22209 OFFICIAL STATEMENT CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY $165,000,000' PUBLIC FACILITY REVENUE BONDS, SERIES 2003A INTRODUCTION The purpose of th~s Official Statement, ~nclud~ng the cover pages and appendices, ~s to set forth certain ~nformabon in connecbon w~th the ~ssuance and sale by the C~ty of V~rgm~a Beach Development Authonty (the "Authority") of ~ts $165,000,000' Public Facd~ty Revenue Bonds, Series 2003A (the "Series 2003A Bonds") The Ser~es 2003A Bonds wdl be offered for sale through electron,c b~dd,ng on September 9, 2003. An Official Not~ce of Sale and B~d Form dated ,2003, relabng to the Senes 2003A Bonds and descnbmg the electronic b~ddmg process, ~s ~ncluded here~n as Appendix F. The Ser~es 2003A Bonds wdl be issued pursuant to Chapter 643 of the Acts of Assembly of 1964, as amended (the "Act") and an Agreement of Trust dated as of September 1, 2003 (the "Master Agreement of Trust"), as supplemented by a F~rst Supplemental Agreement of Trust dated as of September 1, 2003 (the "F~rst Supplemental Agreement of Trust" and, together w~th the Master Agreement of Trust, the "Agreement of Trust"), between the Authority and Wachowa Bank, Nahonal Association, R~chmond, V~rg~n~a, as trustee (the "Trustee"). Pursuant to the terms of the Agreement of Trust, the Authority has determined to ~ssue from t~me to hme pubhc facd~ty revenue bonds or notes and use the proceeds thereof to finance certain "authority facd~t~es" (as dehned ~n the Act), as requested by the C~ty of V~rg~n~a Beach, V~rg~n~a (the "C~ty"). The Authority and the C~ty have entered ~nto a Support Agreement dated as of September 1, 2003 (the "Support Agreement"), pursuant to which the C~ty has requested the Authority to undertake the acqu~s~bon and development of the Projects, as described below, and to finance the Projects w~th the proceeds of the Senes 2003A Bonds, and the C~ty has agreed to support such requests by pay, ng to or on behalf of the Authority, subject to annual appropnat,on by the C~ty Council of the C~ty (the "C~ty Council"), certain amounts sufhc~ent to pay the pnnc~pal of and premium, ~f any, and ~nterest due on the Series 2003A Bonds The proceeds of the Senes 2003A Bonds w~ll be used to finance the acquisition and construchon of various cap,tal ~mprovements ~n the C~ty of V~rg~n~a Beach, V~rg~n~a (collectively, the "Projects"), and to pay certain costs of ~ssuance of the Series 2003A Bonds See the section "THE PROJECTS," Cap~tahzed terms not otherwise dehned w~ll have the meanings assigned such terms m the section hereto "THE FINANCING DOCUMENTS -- Definitions." DESCRIPTION OF SERIES 2003A BONDS General The Senes 2003A Bonds are dated September 1, 2003, and wdl mature on December 1 ~n the years and ~n the amounts set forth on the ~ns~de cover Interest on the Senes 2003A Bonds w~ll be payable on each June 1 and December 1, commencing June 1, 2004, untd the earher of matunty or redempbon, at the rates per year set forth on the ~ns~de cover Interest w,II be calculated on the bas~s of a 360-day year of twelve 30-day months and wdl be payable by check or draft maded to the registered holders as of the fifteenth day of the month preceding each ~nterest payment date, prowded that as long as the Senes 2003A Bonds are ~n book-entry only form payments of pnnc~pal of and premium, ~f any, and ~nterest on the Series 2003A Bonds wdl be made by w~re transfer to The Depository Trust Company, New York, New York ("DTC"), or such other secunhes depository as may be appointed * Prehmmary. subject to change The Series 2003A Bonds w~ll be ~ssued ~n book-entry form only, registered ~n the name of Cede & Co, as nominee for DTC Ind~wdual purchases of benehc~al ownership ~n each series of the Series 2003A Bonds wdl be made ~n pnnc~pal amounts of $5,000 and integral multiples thereof. Ind~wdual purchasers of benehc~al ownership ~n the Series 2003A Bonds ("Beneficial Owners") wdl not receive physical delivery of cerbflcates represenhng their ~nterest ~n the Series 2003A Bonds. Transfer of the Senes 2003A Bonds and payment of pnnc~pal of and premium, ~f any, and ~nterest on the Senes 2003A Bonds w~ll be effected as described ~n Appendix E If the book-entry system ~s d~scontmued, replacement bond or note cert~hcates wdl be dehvered as descnbed ~n the Agreement of Trust, and the Beneficial Owners wdl become the registered holders of the Series 2003A Bonds. Redemption Optional Redemption. The Senes 2003A Bonds that mature on or before December 1, 2013, are not subject to opbonal redempbon pnor to maturity. The Senes 2003A Bonds that mature on or after December 1, 2014, may be redeemed by the Authonty, at the d~recbon of the C~ty, pnor to their stated dates of matunty, at any hme on or after December 1, 2013, ~n whole or ~n part m integral mulbples of $5,000, at the redempbon price of 100% of the pnnc~pal amount of the Senes 2003A Bonds to be redeemed plus interest accrued to the redempbon date. Effect of Redemption After the date on which any Senes 2003A Bonds have been called for redempbon, and sufficient funds for the payment of the pnnc~pal of and premium, ~f any, and unpaid ~nterest accrued on such Senes 2003A Bonds to the date fixed for redemption have been provided, interest on such Senes 2003A Bonds wdl cease to accrue, and their registered holder wdl be enhtled to receive payment only of the pnnc~pal of and premium, ~f any, and unpaid ~nterest accrued to the redempbon date on such Series 2003A Bonds Notice of Redemption Not,ce of redempbon wdl be given by the Trustee by facs~m,le, registered or cerhfled mad or overnight express dehvery not less than 30 and not more than 60 days before the redemphon date to DTC, or, ~f DTC ~s no longer serving as secunbes depository for the Senes 2003A Bonds, to the substitute secunbes depository, or, ~f no securities depository then exists, to the respecbve registered holders of the Senes 2003A Bonds to be redeemed at their addresses as shown on the reg~strahon books maintained by the Trustee Such nohce may reference certain cond~bons to the redempbon. So long as DTC or ~ts nominee ~s registered owner of the Senes 2003A Bonds, the Trustee wdl not be responsible for reading nohces of redemption to the Benehc~al Owners. See Appendix E. Selection of Series 2003A Bonds for Redemption. If less than all of the Senes 2003A Bonds are called for opbonal redemphon, the senes and matunhes of the Senes 2003A Bonds to be redeemed shall be selected by the Authonty, upon the d~recbon of the C~ty If less than all of the Senes 2003A Bonds of a particular matunty are to be redeemed, the Senes 2003A Bonds to be redeemed shall be selected by DTC or any successor secunt~es depository pursuant to ~ts rules and procedures or, ~f the book-entry system ~s d~scontmued, shall be selected by the Trustee ~n such manner as the Trustee ~n ~ts d~screbon may determine SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2003A BONDS Security for the Series 2003A Bonds The Series 2003A Bonds are hm~ted obhgat~ons of the Authority and are payable solely from and secured by a pledge of the revenues and receipts derived from the Support Agreement, certain funds estabhshed under the Agreement of Trust and the ~nvestment income therefrom The obligations of the City to make payments under the Support Agreement are subject to annual appropriation by the City Council. The City Council has no legal obligation to make any such appropriations. Except for funds established under the Agreement of Trust, neither the Projects nor any other asset is being leased, mortgaged or pledged as security for payments due under the Support Agreement or the principal of and premium, if any, and interest on the Series 2003A Bonds. See the section "INVESTMENT CONSIDERATIONS." THE SERIES 2003A BONDS AND THE PREMIUM, IF ANY, AND INTEREST THEREON SHALL NOT BE DEEMED TO CONSTITUTE A GENERAL OBLIGATION DEBT OR A PLEDGE OF THE FAITH AND CREDIT OF THE COMMONWEALTH OF VIRGINIA OR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE AUTHORITY AND THE CITY. NEITHER THE COMMONWEALTH OF VIRGINIA NOR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE AUTHORITY AND THE CITY, SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF OR PREMIUM, IF ANY, OR INTEREST ON THE SERIES 2003A BONDS OR OTHER COSTS INCIDENT THERETO EXCEPT FROM THE REVENUES AND RECEIPTS PLEDGED AND ASSIGNED THEREFOR, AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE COMMONWEALTH OF VIRGINIA, OR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE AUTHORITY AND THE CITY, IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR PREMIUM, IF ANY, OR INTEREST ON THE SERIES 2003A BONDS OR OTHER COSTS INCIDENT THERETO THE AUTHORITY HAS NO TAXING POWER The Support Agreement The Authority ~s ~ssu~ng the Series 2003A Bonds for the purpose of providing funds to finance the costs of the Projects and the costs of ~ssuance of the Series 2003A Bonds The Support Agreement provides for the C~ty to make payments on behalf of the Authority that wdl be sufficient to pay the pnnc~pal of and premium, ~f any, and ~nterest on the Senes 2003A Bonds as the same shall become due m accordance w~th their terms and prows~ons and the terms of the Agreement of Trust. The obligation of the City to make payments under the Support Agreement constitutes a current expense of the City, subject to annual appropriation by the City Council. The City will not be liable for any such payments under the Support Agreement unless and until funds have been appropriated by the City Council for payment and then only to the extent of such appropriation. The Support Agreement requires the C~ty to pay to the Trustee, as assignee of the Authonty, Annual Payments (as defined here~n under "THE FINANCING DOCUMENTS -- Definitions") ~n amounts and on or before dates calculated to be sufhc~ent to pay pnnc~pal of and ~nterest when due on the Senes 2003A Bonds and any additional bonds and notes ~ssued under the Agreement of Trust. The Support Agreement also requires the C~ty to pay certain Additional Payments (as dehned here~n under "THE FINANCING DOCUMENTS -- Definitions") Other prows~ons of the Support Agreement are summanzed ~n the section here~n "THE FINANCING DOCUMENTS -- The Support Agreement." Bond Fund; Project Fund Under the Agreement of Trust, the Authority pledges to the Trustee all nght, htle and interest to the Support Agreement, including the Annual Payments made by the C~ty, but excluding certain nghts to receive payment of the Authonty's fees and expenses and to receive notices thereunder. Such payments under the Support Agreement, along w~th the money ~n the Senes 2003A Project Account and the Bond Fund, are pledged to the payment of pnnc~pal of and premium, ~f any, and interest on the Ser~es 2003A Bonds The Agreement of Trust prowdes that the Trustee w~ll deposit ~n the Bond Fund all Annual Payments received by the Trustee from the C~ty under the Support Agreement together w~th any amounts transferred from the Senes 2003A Project Account. From the Annual Payments, the Trustee w~ll deposit ~n the subaccount ~n the Interest Account an amount equal to the ~nterest due and payable on the next ~nterest payment date for the Senes 2003A Bonds and wdl deposit ~n the subaccount estabhshed for the Senes 2003A Bonds ~n the Principal Account an amount equal to the pnnc~pal due and payable on the next pnnc~pal payment date for the Senes 2003A Bonds. The Agreement of Trust prowdes that the Trustee wdl deposit ~n the Senes 2003A Project Account the proceeds of the Series 2003A Bonds, except pre-~ssuance accrued ~nterest. The Trustee use money ~n the Ser~es 2003A Project Account solely to pay the costs of the Projects and to pay certain costs of ~ssu~ng the Senes 2003A Bonds The Trustee w~ll make payments from the Senes 2003A Project Account upon receipt of requ~s~bons s~gned on behalf of the C~ty prowd~ng required ~nformabon w~th respect to the use of the amounts being requ~s~boned It ~s expected that all amounts ~n the Senes 2003A Project Account w~ll be expended on costs of the Projects and the costs of ~ssu~ng the Ser~es 2003A Bonds by September 30, 2006 Additional Bonds Add~bonal bonds or notes secured on an equal and ratable bas~s w~th the Senes 2003A Bonds may be ~ssued by the Authonty from bme to hme under a Supplemental Agreement of Trust and an amendment to the Support Agreement prowdmg for mod~flcabon of the Annual Payments to prowde for Annual Payments sufficient to pay pnnc~pal of and ~nterest on all obhgabons outstanding under the Agreement of Trust THE FINANCING DOCUMENTS The following ~s a summary of certain prows~ons of the Agreement of Trust and the Support Agreement. Th~s summary does not purport to be comprehensive or defln~bve and ~s quahfled by references to such documents ~n their enbrety, cop~es of which may be obtained at the office of the C~ty Manager. All cap~tahzed terms have the meanings set forth ~n the Agreement of Trust or the Support Agreement In add~bon to defined terms appeanng elsewhere in th~s Ofhc~al Statement, the defin~bons of certain key terms used ~n the Agreement of Trust and the Support Agreement are also set forth below. Definitions "Add~bonal Payments" means payments made by the C~ty pursuant to the Support Agreement other than Annual Payments. "Annual Payments" means the payments made by the C~ty under the Support Agreement which payments are calculated to correspond ~n amount to the payments of pnnc~pal and ~nterest due on the Bonds and any additional obhgabons outstanding "Bond" or "Bonds" means any bonds, notes or other obhgabons, including any notes or other obhgabons ~ssued ~n anbc~pabon of bonds, notes, or other obhgabons as the same shall be ~ssued from bme to bme pursuant to Arbcle III of the Master Agreement of Trust, ~ncludmg the Senes 2003A Bonds "Bond Counsel" means an attorney or a firm of attorneys nabonally recogmzed on the subject of municipal bonds and reasonably acceptable to the Trustee "Bond Fund" means the Bond Fund estabhshed ~n the Master Agreement of Trust. "Bond Payment Date" means the date on which any payment of pnnc~pal of (whether at matunty or pursuant to mandatory s~nkmg fund redempbon) or ~nterest on any Bonds ~s due "Bus~ness Day" means a day on which banking bus~ness ~s transacted, but not ~ncludmg Saturday, Sunday or legal hohday, or any day which banking ~nsbtubons are authonzed by law to close ~n the c~ty ~n which the Trustee has ~ts principal corporate trust office "C~ty Councd" means the Council of the C~ty of V~rg~ma Beach, V~rg~ma, as the governing body of the C~ty. "Code" means the Internal Revenue Code of 1986, as amended, ~ncludmg apphcable regulabons, ruhngs and revenue procedures promulgated or apphcable thereunder "F~scal Year" means the twelve-month per~od beginning July 1 of one year end and ending on June 30 of the following year, or such other F~scal Year of twelve months as may be selected by the C~ty. "F~tch" means F~tch Rabngs or ~ts successors. "Government Cert~hcates" means cert~hcates represenhng proporbonate ownership of Government Obhgat~ons, wh,ch Government Obhgat~ons are held by a bank or trust company organized under the laws of the Un,ted States of Amenca or any of ~ts states ~n the capacity of custodian of such cerbflcates. "Government Obligations" means (a) bonds, notes and other d~rect obl~gabons of the Umted States of America, (b) secunt~es uncond~bonally guaranteed as to the bmely payment of pnnc~pal, ~f applicable, and ~nterest by the Un~ted States of Amenca or (c) bonds, notes and other obhgabons ~ssued or guaranteed as to the bmely payment of pnnc~pal and ~nterest by the Rural Ubht~es Serwce (cerbhcates of benehc~al ownership), Federal Housing Adm~n~strahon (debentures), General Services Administration (participation certificates), U.S Manhme Adm~n~strabon (guaranteed T~tle Xl financing), U S Department of Housing and Urban Development (project notes and local authonty bonds), prowded such obhgabons are backed by the full faith and credit of the Un,ted States of America. Stnpped secunbes are permitted only ~f str~pped by the agency ~tself. Government Obligations may be held d~rectly by the Trustee or m the form of securities of any open-end or closed-end management type ~nvestment company or ~nvestment trust registered under the Investment Company Act of 1940, prowded that the portfoho of such ~nvestment company or ~nvestment trust ~s hm~ted to Government Obl~gahons "Moody's" means Moody's Investors Service or ~ts successors. "Project Fund" means the Project Fund estabhshed ~n the Master Agreement of Trust. "Series" or "Ser~es of Bonds" means a separate ser~es of Bonds ~ssued under the Master Agreement of Trust and a Supplemental Agreement of Trust. The Senes 2003A Bonds wdl conshtute a Senes of Bonds. "Senes 2003A Bonds" means the Authonty's $165,000,000' Public Facility Revenue Bonds, Senes 2003A, authonzed to be ~ssued pursuant to the F~rst Supplemental Agreement of Trust "Senes 2003A Project Account" means the Ser~es 2003A Project Account estabhshed ~n the F~rst Supplemental Agreement of Trust and maintained w~thm the Project Fund "S&P" means Standard & Poor's Rabngs Services, a d~ws~on of The McGraw-Hill Companies, Inc, or ~ts successors "Supplemental Agreement of Trust" means any Supplemental Agreement of Trust supplementing, amending or modifying the prows~ons of the Master Agreement of Trust entered ~nto by the Authonty and the Trustee pursuant to Article X of the Master Agreement of Trust. "Supplemental Support Agreement" means any Supplemental Support Agreement supplemenbng, amending or modifying the prows~ons of the Support Agreement entered into by the Authonty and the C~ty pursuant to the Master Agreement of Trust The Agreement of Trust Establishment of Funds and Accounts The following funds and accounts are established and ubhzed under the Agreement of Trust * Preliminary, subject to change (1) Project Fund, ~n which there ~s established w~th the C,ty the Series 2003A Project Account, and (2) Bond Fund, ~n which there are estabhshed w~th the Trustee a separate Interest Account and Pnnc~pal Account The Agreement of Trust prowdes that separate subaccounts wdl be estabhshed for each series of Bonds ~ssued under the Agreement of Trust Pledge of Payments and Funds All payments received by the Trustee under the Agreement of Trust (except certain payments to the Trustee for ~ts fees and expenses) and all money ~n the Project Fund and the Bond Fund are pledged to the payment of the pnnc~pal of and ~nterest on the Bonds, subject only to the right of the Authority to apply them to other purposes as prowded ~n the Agreement of Trust. The hen and trust created by the Agreement of Trust ~s for the equal and ratable benefit of the holders of the Series 2003A Bonds and any add~bonal Bonds that may be ~ssued under the Agreement of Trust, prov/dedthat moneys ~n any account or subaccount of the Bond Fund relabng to a parbcular Series of Bonds shall secure only such Bonds, and that moneys ~n any account or subaccount of the Project Fund relating to a parbcular Series of Bonds shall secure only such Bonds Bond Fund The Trustee wdl deposit ~n the Bond Fund ~nstallments of all Annual Payments received by the Trustee from the C~ty, together w~th other amounts transferred from accounts ~n the ProJect Fund pursuant to the Support Agreement or the Agreement of Trust The Trustee wdl deposit each ~nstallment and amount (a) to the apphcable subaccount estabhshed ~n the Interest Account an amount equal to the ~nterest due and payable on the next Bond Payment Date for the apphcable Series of Bonds, and (b) to the apphcable subaccount estabhshed ~n the Principal Account an amount equal to the pnnc~pal due and payable on the next Bond Payment Date for the apphcable Series of Bonds, whether at maturity or pursuant to redempbon The Trustee wdl w~thdraw from the respecbve subaccounts w~thm the Interest Account on each Bond Payment Date, amounts equal to the amounts of ~nterest due w~th respect to the Bonds on such Bond Payment Date, and w~ll cause the same to be applied to the payment of interest due on such Bond Payment Date. The Trustee wdl w~thdraw from the respecbve subaccounts w~th~n the Pnnc~pal Account on each Bond Payment Date, amounts equal to the amounts of pnnc~pal due w~th respect to the Bonds on such Bond Payment Date, and w~ll cause the same to be applied to the payment of pnnc~pal due on such Bond Payment Date In the event there are ~nsufflc~ent moneys m the Interest Account or the Pnnc~pal Account on any Bond Payment Date to pay ~nterest and pnnc~pal due on such Bond Payment Date, the Trustee wdl transfer any excess amounts on deposit ~n the Interest Account or the Pnnc~pal Account, as apphcable, to the other Account m which there are ~nsufflc~ent moneys, being m~ndful of the prowsos ~n the secbon "Parity of Bonds" below The Trustee wdl pay from the Bond Fund when due the pnnc~pal of and ~nterest on the Bonds then outstanding and wdl redeem or purchase Bonds m accordance w~th the redempbon prows~ons of the Bonds and the Agreement of Trust. Series 2003A Project AccounL The C~ty wdl use money ~n the Series 2003A Project Account solely to pay all or a porbon of the cost of the Projects The C~ty w~ll make payments from the Senes 2003A ProJect Account after filing among ~ts records requ~s~bons providing required mformabon w~th respect to the use of the amounts being requ~s~boned Any balance remaining m the Senes 2003A Project Account after payment of the cost of the Projects wdl be used to pay pnnc~pal of the Senes 2003A Bonds, to purchase Senes 2003A Bonds m the open market or to pay all or any porbon of the cost of any other project designated by the C~ty and approved by Bond Counsel. Parity of Bonds Each Senes of Bonds w~ll be ~ssued pursuant to a Supplemental Agreement of Trust and wdl be equally and ratably secured under the Agreement of Trust, w~thout preference, pnonty or d~sbncbon, prowded, that the moneys m an account of the Bond Fund or the Project Fund wdl secure only the apphcable Senes of Bonds to which such account relates, and prowded further, that any Series of Bonds may have other secunty pledged to ~ts payment In connecbon w~th the ~ssuance of each Senes of Bonds, the Trustee may create add~bonal accounts and subaccounts w~thm any fund or account estabhshed by the Master Agreement of Trust Investments Any money held under the Agreement of Trust may be ~nvested ~n obhgabons or securities that are permitted for the ~nvestment of pubhc funds under the Investment of Pubhc Funds Act (Chapter 18, T~tle 2 1 of the V~rg~ma Code), or any successor provision of law apphcable to such ~nvestments Any ~nvestments will be held by or under the control of the Trustee or the City and whde so held will be deemed a part of the fund in which such money was originally held The earnings accruing on such ~nvestments, ~nclud~ng any profit reahzed, wdl be credited to such funds, except as otherwise prowded ~n the Agreement of Trust, and any loss resulting from such investments wdl be charged to such funds The Trustee wdl sell and reduce to cash a sufficient amount of such ~nvestments whenever the cash balance ~n any fund is insufficient for ~ts purposes. Events of Default and Remedies Each of the following ~s an Event of Default under the Agreement of Trust: (1) default in the payment of interest on any Bond when due, (2) default ~n the payment of pnnc~pal or premium, ~f any, of any Bond when due, (3) default in the observance or performance of any other covenant, condlbon or agreement on the part of the Authonty under the Agreement of Trust or the Bonds, subject to certain rights of the Authonty to nobce and an opportunity to cure, and (4) any event of default under the Support Agreement. Remedies; Rights of Bondholders. Upon the occurrence and continuation of an Event of Default, the Trustee may (and ~f requested by the holders of not less than 25% in aggregate pnnc~pal amount of Bonds outstanding and if indemnified in accordance w~th prevailing industry standards w~ll) proceed to protect and enforce the nghts of the holders of the Bonds by su~t, acbon or proceeding at law or ~n equity, including an acbon for specific performance of any covenant or agreement contained ~n the Agreement of Trust; prowded, that the Trustee wdl have no nght or authority to declare the entire unpaid pnnc~pal of and interest on the Bonds due and payable. All remedies under the Agreement of Trust are cumulatwe. Other than the remedies described above, no holder of any Bond wdl have any nght to ,nsbtute any acbon, su~t or proceeding at law or ~n equity for the enforcement of the Agreement of Trust, the execubon of any of ~ts trusts or any other remedy under ~t, unless (1) an Event of Default (as defined ~n the Agreement of Trust) has occurred and ~s conbnumg and the Trustee has nobce of ~t; (2) the holders of 25% ~n aggregate pnnc~pal amount of Bonds then outstanding have made written request to the Trustee, and offered ~t reasonable opportumty e~ther to proceed to exercise the powers granted by the Agreement of Trust, to msbtute such acbon, su~t or proceeding m ~ts own name; (3) the Trustee has been mdemmfled as prowded by the Agreement of Trust, (4) the Trustee has fa~led or refused w~thm a reasonable t~me to comply w~th such request, (5) no d~rect~on inconsistent w~th such request has been g~ven to the Trustee by the holders of a majority m principal amount of outstanding Bonds; and (6) nobce of such action, su~t or proceeding ~s g~ven to the Trustee. Notwithstanding any other prows~on to the contrary, the holders of a majority m aggregate principal amount of Bonds outstanding, upon comphance w~th the Agreement of Trust's requirements as to mdemn~flcabon of the Trustee, w~ll have the right to d~rect all proceedings to be taken by the Trustee Subject to hm~tabons set forth ~n the Agreement of Trust, the Trustee may ~n ~ts d~scret~on, waive any Event of Default under the Agreement of Trust or any acbon taken pursuant to such Event of Default and will do so on the request of the holders of a majority ~n aggregate pnnc~pal amount of Bonds then outstanding. However, no waiver wdl extend to any subsequent or other default or ~mpa~r any right resulbng from ~t Discharge of Agreement of Trust A Bond w~ll be deemed no longer outstanding when any such Bond has been cancelled or surrendered for cancellabon or purchased by the Authonty from moneys ~n the Bond Fund or as to any Bond not so cancelled or purchased when (0 payment of the pnnc~pal and the apphcable premium, plus interest to the due date thereof shall have been made or caused to be made ~n accordance w~th the terms thereof, or (~) payment of the pnnc~pal and apphcable premium, plus ~nterest on such Bond to the due date thereof shall have been prowded by irrevocably deposlhng with the Trustee (A) moneys sufficient to make such payment, (B) noncallable Government Obhgabons matunng as to principal and ~nterest ~n such amount and at such t~mes as w~ll ensure the ava~labd~ty of sufficient moneys to make such payment, or (C) a combmabon of both such moneys and noncallable Government Obhgat~ons and (D) payment of all necessary and proper fees, costs and expenses of the Trustee shall have been made Notwithstanding the foregoing, the Bonds which are to be redeemed before their matunty wdl be deemed pa~d and no longer outstanding only ~f such Bonds have been ~rrevocably called or designated for redempbon Supplemental Agreements of Trust Any provision of the Agreement of Trust may be modified or altered by the Authority and the Trustee, by a Supplemental Agreement of Trust, upon consent of the holders of a majonty ~n aggregate principal amount of Bonds outstanding; provided, that certain amendments relating to the payment of the Bonds may be made only w~th the consent of all holders of the apphcable Bonds In addition, the Authority and the Trustee may enter ~nto supplemental agreements of trust w~thout the consent of holders of the Bonds, (1) to cure any ambiguity, formal defect or omission ~n the Agreement of Trust; (2) to grant to or confer upon the Bondholders any additional rights, remedies, powers or authonty that may lawfully be granted to or conferred on the Bondholders, (3) to modify, amend or supplement the Agreement of Trust ~n such manner as required to permit ~ts quahflcat~on under the Trust Indenture Act of 1939, as amended, or any s~mdar federal statute hereafter ~n effect or any state secur~bes (Blue Sky) law; (4) to add to the covenants and agreements of the Authority ~n the Agreement of Trust other covenants and agreements to be observed by the Authonty; (5) to modify the Agreement of Trust as required to permit the Authority to comply w~th the prows~ons of the Code relating to the rebate requirement w~th respect to investment of proceeds of the Bonds, prowded that such mod~hcat~on does not matenally adversely affect the holders of all Bonds then outstanding, (6) to modify the Agreement of Trust ~n such manner as may be required to maintain any rahng on any Bonds, provided that such amendment does not, ~n the op~n~on of the Trustee, mater~ally adversely affect the holders of all Bonds then outstanding; (7) to authorize the ~ssuance of and secure one or more Ser~es of Bonds, and (8) to modify the Agreement of Trust ~n any manner that the Trustee concludes ~s not mater~ally adverse to holders of all Bonds then outstanding The Authority and the Trustee may enter into certain other supplemental agreements of trust upon rece~wng the consent of certain percentages of holders of the Bonds If such a supplemental agreement of trust w~ll affect only one Senes of Bonds, ~t may be necessary to seek only the consent of the holders of a majonty ~n aggregate pnnc~pal amount of that Senes of Bonds. Certain Covenants Regarding the Projects. In the Agreement of Trust, the Authonty has agreed to maintain, preserve and keep the Projects, or cause the Projects to be maintained, preserved and kept, ~n good cond~hon Further, the Authonty has agreed to maintain ~nsurance on the Projects covering such nsks as are customanly insured against by reasonable and prudent governmental bodies of hke s~ze for facilities of hke k~nd The Authonty may self-~nsure as to any or all of such coverage The Support Agreement Agreement to Provide Funds to Finance the Projects In the Support Agreement, the Authonty agrees to the C~ty's request to acquire and develop all or a port,on of the Projects from the proceeds of the Senes 2003A Bonds, and the C~ty agrees to support such request by supplying the moneys necessary to pay principal of and premium, ~f any, and ~nterest on the Sones 2003A Bonds, upon the terms and cond~bons set forth m the Support Agreement The C~ty agrees to make all Annual Payments and Add~bonal Payments when and as the same shall become due and payable, subject to appropnabon by the C~ty Councd Bonds In order to provide funds for all or a port~on of the Projects, the Authonty wdl ,agree to ~ssue the Series 2003A Bonds beanng ~nterest, matunng and having the other terms and provisions set forth ~n the F~rst Supplemental Agreement of Trust Payments Under Support Agreement. Under the Support Agreement the C~ty agrees to pay to the Authonty, or ~ts assignee, the Annual Payments set forth ~n the Support Agreement The Annual Payments are ~n such amounts and are payable at such t~mes as are calculated to be sufficient to pay pnnc~pal of and ~nterest on the Bonds, ~nclud~ng the Senes 2003A Bonds. The C~ty w~ll receive a credit against ~ts obhgat~on to make Annual Payments to the extent there are amounts on deposit ~n the Bond Fund; provided that such amounts have not been apphed prewously as a credit w~th respect to any Annual Payment The C~ty also agrees to make Additional Payments, including the reasonable fees and expenses of the Trustee and the expenses of the Authority Payments of Annual Payments and Additional Payments by the City are subject to appropriations being made from time to time by the City Council for such purposes. In the Support Agreement, the City Council has directed the City Manager or other officer charged with the responsibility for preparing the City's annual budget to include in the budget for each Fiscal Year as a single appropriation the amount of all Annual Payments and estimated Additional Payments during such Fiscal Year. The C~ty Manager or other ofhcer charged w~th the respons~bd~ty for prepanng the C~ty's annual budget ~s required to dehver to the Trustee and the Authonty w~th~n ten days after the adopbon of the annual budget for each F~scal Year, but not later than ten days after the beginning of each F~scal Year, a cerbfmate stating whether an amount equal to the Annual Payments and esbmated Add~bonal Payments which wdl be due during such F~scal Year has been appropriated by the C~ty Council If any adopted annual budget does not ~nclude an appropriation of such funds, the C~ty Councd ~s required to take a roll call vote ~mmed~ately after adopbon of such annual budget acknowledging the ~mpact of ~ts fadure to appropriate such funds. If, by hfteen days after the beginning of the F~scal Year, the C~ty Councd has not appropriated funds for the payment of both Annual Payments and esbmated Additional Payments for the then current F~scal Year, the C~ty Manager or other officer charged w~th the respons,b~hty for prepanng the annual budget wdl g~ve written not~ce to the C~ty Council of the consequences of such fadure to appropriate, and request the C~ty Council to consider a supplemental appropriation for such purposes. The C~ty has the option to prepay Annual Payments at the t,mes and amounts as necessary to exercise ~ts option to cause the Bonds to be redeemed before maturity. Agreement to Issue Additional Bonds to Finance Additional Projects. In order to finance the costs of additional projects and, ~f requested by the C~ty, to complete the Projects, the Authonty agrees that ~t wdl, from hme to hme, ~ssue add~honal obhgabons under the Agreement of Trust. The obhgat~on of the Authonty to hnance the costs of additional projects or to complete the Projects and to ~ssue add~bonal Senes of Bonds wdl be conditioned upon comphance w~th the prows~ons of the Master Agreement of Trust. Events of Default Events of Default under the Support Agreement ~nclude (1) default ~n the due and punctual payment of an Annual Payment when the same becomes due and payable and contmuahon of such fadure for a penod of five days, or (2) fadure of the C~ty to pay when due any other payment due under the Support Agreement, or to observe and perform any covenant, cond~hon or agreement, which fadure shall continue for a penod of 30 days after nohce ~s g~ven, w~th certain nghts to cure as described ~n the Support Agreement. Notwithstanding the foregoing, failure to make any payment due or to perform any covenant under the Support Agreement which results from a failure of the City Council to appropriate moneys for such purposes will not constitute an Event of Default. Remedies If an Event of Default occurs, remedies available to the Authonty are to take whatever achon at law or ~n equity, other than to declare the enbre unpaid pnnc~pal balance of Annual Payments to be ~mmed~ately due and payable, as may appear necessary or desirable to collect Annual Payments and Additional Payments then due or to become due, or to enforce performance and observance of any obhgabon, agreement or covenant of the C~ty. An event of non-appropnabon ~s not an Event of Default See the section "INVESTMENT CONSIDERATIONS -- Non-Appropriation and Limited Remedies." The Support Agreement wdl be reinstated and any default waived upon certain cond~t,ons, ~nclud~ng the payment of all arrears w~th respect to the Bonds Amendments The Support Agreement may be supplemented, amended or modified prior to the payment of all outstanding Bonds, only w~th the consent of the Trustee, g~ven m accordance w~th the Master Agreement of Trust THE AUTHORITY The Authority was created pursuant to the Act for the specific purposes of, among others, attracting new ~ndustnes, expanding ex~shng ~ndustnes and prowdmg facd~hes for use by governmental organ~zabons The Authority ~s a pohhcal subd~ws~on of the Commonwealth of V~rg~n~a governed by a seven-member Board of Commissioners appointed for four-year terms by the C~ty Council The Authority ~s empowered, among other things, to acquire, construct, maintain, equip, own, lease and d~spose of various types of facd~bes, ~nclud~ng facd~hes for use by a c~ty and by other governmental organ~zabons or commercial enterprises, and to finance the same by ~ssuance of ~ts revenue bonds The Authority has no taxing power THE CITY The present C~ty of V~rg~n~a Beach was formed on January 1, 1963, by the merger of Pnncess Anne County and the former smaller C~ty of V~rg~n~a Beach. Th~s merger created one of the largest c~bes ~n the Commonwealth of V~rg~n~a w~th an area of 310 square mdes and 38 m~les of shorehne on the Atlanhc Ocean and the Chesapeake Bay. The C~ty covers the enhre eastern border of V~rg~n~a south of the Delmarva Peninsula and ~ncludes all of the area from the Chesapeake Bay to the North Carohna border The C~ty has the largest populahon of any c~ty m the Commonwealth of V~rg~nia Appendix A contains add~honal hnanc~al and demographic mformahon concerning the C~ty The C~ty's audited financial statements for the F~scal Year ended June 30, 2002, are contained ~n Appendix B THE PROJECTS Generally. The ProJects to be financed m whole or ~n part w~th the proceeds of the Senes 2003A Bonds have been authonzed by C~ty Councd e~ther through the C~ty's s~x-year Capital Improvement Program ("CIP") or through tax-~ncrement financing programs. The CIP ~s revised annually and approved by C~ty Councd ~n conjunction w~th ~ts adophon of the C,ty's annual operating budget For a more detaded d~scuss~on of the CIP, see the subsechon "Capital Improvement Program" ~n Appendix A The ProJects approved ~n the CIP include the Convenhon Center Replacement, the V~rgm~a Manne Science Museum parking project, the Pavd~on Theater Replacement ProJect, the Open Space S~te Acqu~s~hon program and the Th~rty-F~rst Street Parking Garage The ProJects authonzed under tax-~ncrement financing programs are the Town Center Garage Block 10 and the Town Center Garage Block 12 At the bmes these projects were ~ncluded ~n e~ther the CIP or ~n a tax-~ncrement financing program, C~ty Council also addressed the need to ensure that adequate revenues would be available to the C~ty to undertake these s~gn~hcant projects W~th respect to the Convenhon Center Replacement, the V~rg~n~a Manne Science Museum parking project, the Pawhon Theater Replacement Project and the Open Space S~te Acqu~s~hon program that were ~n~hally approved ~n the F~scal Year 2001-02 CIP, C~ty Councd increased certain taxes that are projected to be sufficient to pay for such proJects The tax ~ncreases of 2 5% on the hotel tax (total tax of 8%, effecbve November 1,2001); 1% on the restaurant tax (total tax of 5 5%, effechve July 1, 2001), and 5 cents on a pack of c~garettes (effectwe July 1,2001) As of June 30, 2003, these ~ncreased taxes have generated an aggregate of $19,951,033 ~n add~bonal revenue to support the costs of these projects W~th respect to the two Town Center Parking Garage projects and the other pubhc ~nfrastructure facd~hes to be undertaken by the Authority and the C~ty ~n the Town Center of V~rg~n~a Beach, the C~ty created the Central Bus~ness D~stnct - South tax increment financing d~stnct The tax ~ncrement revenues and other available revenues denved from th~s TIF d~stnct are anhc~pated to be sufhc~ent to pay the costs of the pubhc parking garages and the other pubhc ~nfrastructure facd~hes w~thout resorting to a special service d~stnct tax that also could be lewed ~n a Town Center special service d~stnct As of June 30, 2003, $1,764,284 ~n tax ~ncrement revenues have been generated s~nce th~s TIF d~stnct was created 10 W~th respect to the Th~rty-F~rst Street Parking Garage project located at the oceanfront ~n the C~ty's resort area, the C~ty w~ll charge for parking m the garage. Based on the projected use of the fac~hty, ~t ~s antm~pated that the parking revenues and other fiscal ~mpacts wdl be sufficient to pay for the operabons of the garage including debt service over brae. The remaining projects (Emergency Communications Operabon Center, Revenue Assessment and Collecbon System, Electronic Ballot System, C~ty/School Human Resource Payroll System, Communications Infrastructure Replacement and Fire Apparatus Equipment), representing less than ten percent of the currently projected total public facility revenue bond program fundings, will receive General Fund support from ex~sbng revenue sources. Description of the Projects. The aggregate cost of the Projects currently ~s esbmated to be approximately $410,550,000. The C,ty currently plans to finance approximately $327 m~lhon of these costs through the Authonty's ~ssuance of ~ts pubhc facd~ty revenue bonds. The Ser~es 2003A Bonds are the first ser~es to be ~ssued under th~s plan The remaining costs of Projects (approximately $83 55 m~ll~on) wdl come from other funding sources, including state and federal funding, sale of property, general obl~gabon bonds, General Fund appropnabons and various fund balances, pay-as-you-go funding and private contnbubons. Prospecbve purchasers of the Senes 2003A Bonds should note that the CIP ~s a s~x-year program and the funding sources and amounts are subject to mod~flcabon over bme at the d~screbon of C~ty Councd. The following sets forth brief descnpbons of the Projects to be financed ~n whole or ~n part w~th the proceeds of the Senes 2003A Bonds Convention Center Replacement- Th~s project provides for the replacement and relocabon of the ex~st~ng pawhon convention center on the same s~te. It w~ll prowde for approximately 150,000 square feet of exhibit hall, 25,000 square feet of meeting rooms and 32,000 square feet of ballroom space Total esbmated cost of th~s project ~s $197,025,000 (an add~honal $9,071,000 ~s being added to th~s project). Thlrty-F~rst Street Parklng Garage - Th~s project ~s for the construcbon of an approximate 1,000 space parking garage, 26,000 square feet of retad space and a pedestnan bndge from the garage to a proposed hotel to be developed on the oceanfront Total esbmated cost of th~s project ~s $23,811,800 Town Center Garage Block 10 - Th~s project ~s for the construction of an approximate 840 space parking garage located ~n the Town Center d~stnct of the C~ty Total esbmated cost of th~s project ~s $13,500,000 For a further d~scuss~on of the Town Center Project, see "Tax Increment Financing" and "Other Long-Term Obligations" ~n the section "City Indebtedness and Capital Plan" ~n Appendix A Town Center Garage Block 12 - Th~s project ~s for the construcbon of an approximate 305 space parking garage located m the Town Center d~stnct of the C~ty Total esbmated cost of th~s project ~s $8,300,000 For a further d~scuss~on of the Town Center Project, see "Tax Increment Financing" and "Other Long-Term Obligations" ~n the secbon "City Indebtedness and Capital Plan" m Appendix A Open Space S¢te Acqms~bon - Th~s project prowdes for the acqu~s~bon of land for preservabon and/or recreabonal purposes. Total esbmated cost of th~s project ~s $54,090,000 Virglma Marine Science Museum Parking- Th~s project wdl provide a 500 space parking lot across the road from the museum and w~ll address the safe crossing of pedestnans from the parking area to the museum Total esbmated cost of th~s project ~s $3,000,000 Emergency Communications Operation Center- Th~s project ~s for the design and construcbon of the new Emergency Commun~cabons Center and Emergency Operation Center, to be located ~n the Municipal Center, on the north s~de of the mtersecbon of Pnncess Anne Road and James Madison Boulevard, across the street from the Pubhc Safety Building Total eshmated cost of th~s project ~s $10,456,000 11 Revenue Assessment and Collect/on System - Th~s project provides for a comprehensive, fully integrated tax system to replace the computer systems currently used to support tax revenue assessment and collecbon Th~s ~s a joint project of the Commissioner of Revenue, C~ty Treasurer and Real Estate Assessor Total eshmated cost of th~s project ~s $5,402,000 Electromc Ballot System - Th~s project ~s for the purchase of 800 new voter machines to provide an electronic ballot station. Total estimated cost of th~s project ~s $3,766,565 Pawhon Theater Replacement- Th~s project replaces the current 1,000 seat Pavd~on Theater w~th a new theater at the Town Center and ~ncludes parking Total esbmated cost of th~s project ~s $50,000,000 C~ty/School Human Resource Payroll System - Th~s project replaces the C~ty's ten year old payroll system w~th a new ~nformabon system utilizing current network ~nfrastructure Total estimated cost of th~s project ~s $3,800,000 Commumcat~ons Infrastructure Replacement- Th~s project wdl replace various components of the pubhc safety communications ~nfrastructure related to equipment associated w~th rece~wng, d~spatchmg, transpondmg and answenng pubhc safety calls Total estimated cost of th~s project ~s $22,225,000 F~re Apparatus Equipment - Th~s project funds replacement of heavy equipment fire apparatus that costs over $50,000 and have a useful hfe of over ten years Total esbmated cost of th~s project ~s $15,175,000 ESTIMATED SOURCES AND USES OF FUNDS The proceeds received from the sale of the Ser~es 2003A Bonds, exclusive of accrued ~nterest, are expected to be apphed as follows Sources of Funds Par Amount of the Senes 2003A Bonds Net Original Issue Premium Total Uses of Funds Deposit to Project Fund Costs of Issuance 0nclud~ng Underwnter's compensation) Total $ INVESTMENT CONSIDERATIONS The following ~s a I~st of factors that should be considered ~n connecbon w~th the purchase of the Ser~es 2003A Bonds Source of Payments The Senes 2003A Bonds are not general obhgat~ons of the Authority or the C~ty but are payable only from revenues received by the Authority under the Support Agreement and other moneys held by the Trustee and pledged to the payment of the Ser~es 2003A Bonds The abd~ty of the Authority to make t~mely payments of pnnc~pal and ~nterest on the Ser~es 2003A Bonds depends solely on the ab~hty of the 12 C~ty to make bmely payments under the Support Agreement The obhgabon of the C~ty to make payments under the Support Agreement ~s subject to and dependent upon amounts being lawfully appropnated from bme to bme by the C~ty Counc,I The obl~gabon of the C~ty to make payments under the Support Agreement ~s not a debt of the C~ty w~th~n the meamng of any consbtubonal or statutory hm~tabon or a pledge of the faith and credit or the taxing power of the C~ty The City Council is not legally obligated to appropriate the funds necessary to meet the City's financial obligation under the Support Agreement. Non-appropriation and Limited Remedies Pursuant to the Support Agreement, m the event that funds appropnated and budgeted by the C~ty for the payment of ~ts obhgabons under the Support Agreement are insufficient to make the required payments thereunder, the C~ty Manager w~ll submit a request, w~thm 15 days after the beg~nmng of the F~scal Year, for a supplemental appropnabon to cover the deficit. Any payment of pnnc~pal of and premium, ~f any, and ~nterest on the Senes 2003A Bonds are subject to appropnat~on by the C~ty Council. In the event of non-appropriation of funds by the City Council, neither the City nor the Authority may be held liable for the principal of and premium, if any, and interest payments on the Series 2003A Bonds following the last Fiscal Year in which funds to make payment under the Support Agreement were appropriated by the City Council. Upon an Event of Default under the Agreement of Trust, the Trustee has no nght to accelerate the payment of the Series 2003A Bonds by declanng the enbre pnnc~pal of and ~nterest on the Senes 2003A Bonds to be due and payable. S~m~larly, upon an Event of Default under the Support Agreement, the Authonty has no nght to accelerate the payment of Annual Payments by declanng the Annual Payments to be due and payable Political Risk The current C~ty Council has evidenced ~n ~ts resolubon adopted m connecbon w~th the Series 2003A Bonds a present intent to make future appropriations of such funds as may be necessary to make payments due under the Support Agreement as and when such payments become due. There can be no guarantee, however, that the C~ty Council w~ll retain ~ts current consbtuency m the future¢ and there can be no guarantee that a future C~ty Councd w~ll retain the current C~ty Council's pohcy w~th respect to the Senes 2003A Bonds No Assets Pledged as Security Outside of Funds and Accounts Except for revenues and receipts under the Agreement of Trust, neither the Projects nor any other asset ,s being leased, mortgaged or pledged as secunty for payments due under the Support Agreement or the pnnc~pal of and premium, ~f any, and ~nterest on the Senes 2003A Bonds Any Event of Default or non-appropnabon of amounts due under the Support Agreement wdl not g~ve the holders of the Senes 2003A Bonds, e~ther d~rectly or ~nd~rectly, any nght to have the Projects or any other asset of the Authority or the C~ty uhhzed to produce funds to be apphed toward payment of the Senes 2003A Bonds, except for funds established under the Agreement of Trust Limitations on Enforceability of Remedies The reahzabon of any rights upon a default under the Agreement of Trust or the Support Agreement w~ll depend upon the exercise of various remedies specified thereto Any attempt by the Trustee or others to enforce such remedies may require judicial action, which ~s often subject to d~screhon and delay Under ex~stmg law, certain of the legal and equitable remedies specified ~n the Agreement of Trust or the Support Agreement may not be readily available 13 LITIGATION The City In the op~n~on of C~ty management, no ht~gat~on ~s pending against the C~ty which would (1) matenally adversely affect the C~ty's financial pos~bon, (2) restrain or enjoin the ~ssuance, sale or dehvery of the Senes 2003A Bonds, or the apphcabon of proceeds of the Series 2003A Bonds as provided ~n the Agreement of Trust or the collection of revenues pledged under the Agreement of Trust, (3) ~n any way contest or affect any authority for the ~ssuance or vahd~ty of the Ser~es 2003A Bonds or the vahd~ty of the Agreement of Trust or the Support Agreement, or (4) ~n any way contest the creabon, existence, powers or authority of the C~ty The Authority No ht~gabon ~s pending against the Authority or, to the best of the knowledge of the Authority, threatened against the Authority (1) to restrain or enjoin the ~ssuance, sale or dehvery of the Senes 2003A Bonds or the apphcahon of proceeds of the Senes 2003A Bonds as prowded ~n the Agreement of Trust or the collecbon of revenues pledged under the Agreement of Trust, (2) ~n any way contesbng or affecting any authority for the ~ssuance or vahd~ty of the Senes 2003A Bonds or the vahd~ty of the Agreement of Trust or the Support Agreement, (3) ~n any way contesting the creation, existence, powers or authonty of the Authority, or (4) conteshng the validity of the Act or any prows~on thereof. APPROVAL OF LEGAL MATTERS Certain legal matters relahng to the author~zabon and vahd~ty of the Senes 2003A Bonds wdl be subject to the approwng op~n~on of Hunton & Wdhams LLP, R~chmond, V~rg~n~a, Bond Counsel, which be furnished at the expense of the C~ty upon delivery of the Ser~es 2003A Bonds, ~n substanhally the form set forth ~n Appendix C (the "Bond Op~n~on"). The Bond Op~n~on wdl be hm~ted to matters relating to authonzahon and vahd~ty of the Series 2003A Bonds and to the tax-exempt status of interest thereon as described ~n the section "TAX EXEMPTION." Bond Counsel has not been engaged to ~nvest~gate the financial resources of the Authority and the C~ty or their abd~ty to prowde for payment of the Series 2003A Bonds, and the Bond Opinion wdl make no statement as to such matters or as to the accuracy or completeness of th~s Ofhc~al Statement or any other ~nformabon that may have been rehed on by anyone ~n making the decision to purchase Senes 2003A Bonds Certain legal matters wdl be passed on for the C~ty and the Authority by the office of the C~ty Attorney TAX EXEMPTION Opinion of Bond Counsel In the op~n~on of Bond Counsel, under current law, ~nterest, ~nclud~ng accrued ong~nal ~ssue d~scount ("OLD"), on the Senes 2003A Bonds (1) wdl not be ~ncluded ~n gross ~ncome for federal income tax purposes, (2) w~ll not be an ~tem of tax preference for purposes of the Federal alternahve m~n~mum ~ncome tax ~mposed on md~wduals and corporations, however, w~th respect to corporations (as defined for Federal income tax purposes) subject to the Federal alternabve minimum tax, such ~nterest ~s taken ~nto account ~n determining adjusted current earnings for purposes of compubng such tax and (3) wdl be exempt from ~ncome taxation by the Commonwealth of V~rg~n~a Except as d~scussed below regarding OlD, no other op~n~on ~s expressed by Bond Counsel regarding the tax consequences of the ownership of or the receipt or accrual of ~nterest on the Senes 2003A Bonds Further, no opinion wdl be expressed by Bond Counsel as to the treatment for Federal ~ncome tax purposes of any interest pa~d on the Senes 2003A Bonds ~n the event of non-appropnat~on or default by the C~ty 14 Bond Counsel's op~mon wdl be g,ven ~n rehance upon cerbflcat~ons of representahves of the Authonty and the C~ty as to facts relevant to both the op~mon and the requirements of the Code and ~s subject to the cond~bon that there ~s comphance subsequent to the ~ssuance of the Senes 2003A Bonds w~th all requirements of the Code that must be satisfied m order for ~nterest thereon to remain excludable from gross ~ncome for Federal ~ncome tax purposes The Authonty and the C~ty have covenanted to comply w~th the current prows~ons of the Code regarding, among other matters, the use, expenditure and ~nvestment of the proceeds of the Senes 2003A Bonds and the t~mely payment to the Umted States of any arbitrage rebate amounts w~th respect to the Senes 2003A Bonds. Fadure by the Authonty and the C~ty to comply w~th such covenants, among other things, could cause ~nterest, including accrued OlD, on the Senes 2003A Bonds to be included m gross income for Federal income tax purposes retroacbvely to their date of ~ssue Original Issue Discount The ~n~t~al pubhc offenng pnces of Senes 2003A Bonds matunng ~n the years __ through __ (the "OLD Bonds") wdl be less than their stated pnnc~pal amount In the opinion of Bond Counsel, under current law, the d~fference between the stated pnnc~pal amount and the m,t~al offenng pnce of the OlD Bonds to the pubhc (excluding bond houses and brokers) at which a substanbal amount of such Senes 2003A Bonds ~s sold w~ll consbtute OlD The offenng pnces set forth on the ~ns~de cover of th~s Official Statement for the OlD Bonds are expected to be the ~mbal offenng pnces to the pubhc at which a substanbal amount of such Senes 2003A Bonds are sold Under the Code, for purposes of determ~mng a Senes 2003A Bondholder's adjusted bas~s ~n an OlD Bond, OlD treated as hawng accrued whde the Senes 2003A Bondholder holds the Senes 2003A Bond w~ll be added to the Series 2003A Bondholder's bas~s OlD wdl accrue on a constant y~eld-to- matunty method The adjusted bas~s w~ll be used to determine taxable gain or loss upon the sale or other d~spos~bon (including redempbon or payment at matunty) of an OlD Bond. Prospecbve purchasers of OlD Bonds should consult their own tax adwsors as to the calculation of accrued OlD and the state and local tax consequences of owning or d~sposmg of OlD Bonds Premium Senes 2003A Bonds purchased, whether upon ~ssuance or otherwise, for an amount (excluding any amount attnbutable to accrued ~nterest) m excess of their pnnc~pal amount wtll be treated for federal income tax purposes as having amortizable bond premium. A holder's basis ~n such a Senes 2003A Bond must be reduced by the amount of premium which accrues whde such Series 2003A Bond ~s held by the holder No deduction for such amount w~ll be allowed, but ~t generally wdl offset interest on the Senes 2003A Bonds whde so held. Purchasers of such Senes 2003A Bonds should consult their own tax adwsors as to the calculabon, accrual and treatment of amortizable bond premium and the state and local tax consequences of holding such Senes 2003A Bonds Other Tax Matters In add~bon to the matters addressed above, prospecbve purchasers of the Senes 2003A Bonds should be aware that the ownership of tax-exempt obhgabons may result ~n collateral Federal ~ncome tax consequences to certain taxpayers, including w~thout hm~tabon financial msbtuhons, property and casualty insurance compames, S corporabons, foreign corporabons subject to the branch profits tax, recipients of Social Security or Radroad Rebrement benefits and taxpayers who may be deemed to have recurred or continued ~ndebtedness to purchase or carry tax-exempt obhgabons Prospective purchasers of the Senes 2003A Bonds should consult their tax adwsors as to the apphcabd~ty and ~mpact of such consequences. 15 Prospecbve purchasers of the Senes 2003A Bonds should consult their own tax adwsors w~th respect to the status of ~nterest on the Senes 2003A Bonds under the tax laws of any state other than V~rg~n~a FINANCIAL ADVISORS Government F~nance Associates, Inc. and ARD Government F~nance Group serve as financial adwsors to the C~ty m connecbon w~th the ~ssuance of the Senes 2003A Bonds. The financial advisors' fees for services rendered w~th respect to the sale of the Senes 2003A Bonds ~s not contingent upon the ~ssuance and dehvery of the Series 2003A Bonds INDEPENDENT AUDITORS The C~ty's financial statements for the fiscal year ended June 30, 2002, have been audited by the ~ndependent pubhc accounbng firm of KPMG L L P The C~ty's general purpose financial statements and the ~ndependent auditors' report thereon are presented hereto as Appendix B These general purpose financial statements, along w,th the related Notes to Financial Statements, are ~ntended to prowde a broad overview of the financial pos~hon and operating results of the C~ty's vanous funds and account groups KPMG L L P w~ll not be rewew~ng any matters ~n connecbon w~th the ~ssuance of the Series 2003A Bonds The C~ty has engaged the ~ndependent pubhc accounting firm of Cherry, Bekaert and Holland L L P to prepare the C~ty's financial statement for the fiscal year ended June 30, 2003. RATINGS F~tch Rabngs has assigned a rahng of .... to the Series 2003A Bonds Moody's Investors Service has assigned a rating of .... to the Senes 2003A Bonds. Standard & Poor's Ratings Services, a d~v~s~on of The McGraw-Hill Compames, Inc, has assigned a rating of "AA" to the Senes 2003A Bonds Each rabng reflects only the wew of such orgamzabon and any desired explanabon of the s~gmflcance of any rabngs should be obtained from F~tch at One State Street Plaza, New York, New York 10004, from Moody's at 99 Church Street, New York, New York 10007 and from S&P at 55 Water Street, New York, New York 10041. Generally, a rabng agency bases ~ts rabng on the ~nformabon and materials furmshed to ~t and on ~nvesbgabons, studies and assumpbons of ~ts own The rating ~s not a recommendabon to buy, sell or hold the Senes 2003A Bonds and should be evaluated ~ndependently. There ~s no assurance such rating w~ll conbnue for any g~ven penod of t~me or that such rabng w~ll not be revised downward or w~thdrawn enbrely by the rabng agency, ff ~n the judgment of such rahng agency, c~rcumstances so warrant Any such downward rews~on or w~thdrawal of such rabng may have an adverse effect on the market pnce of the Senes 2003A Bonds SALE AT COMPETITIVE BIDDING The Senes 2003A Bonds wdl be offered for sale at compet,bve b~dd~ng on September 9, 2003 After the Ser~es 2003A Bonds have been awarded, the C~ty wdl ~ssue an Official Statement m final form to be dated September 9, 2003 The C~ty w~ll deem the Official Statement final as of ~ts date, and the Official Statement ~n final form w~ll be a "F~nal Official Statement" w~th~n the meaning of the Rule (as hereinafter defined) The Official Statement ~n final form w~ll ~nclude, among other matters, the ~denbty of the wmmng b~dder, the expected selhng compensation to such winning b~dder and other mformabon on the interest rates and offenng prices or y~elds of the Senes 2003A Bonds, all as supphed by the wmmng b~dder 16 LEGALITY OF THE SERIES 2003A BONDS FOR INVESTMENT The Act provides that bonds ~ssued by the Authonty under the Act are legal and authonzed ~nvestments for banks, sawngs banks, building and loan assoc~abons, ~nsurance companies, flduc~anes, trustees and guardians and for all pubhc funds of the Commonwealth of V~rg~n~a or other pohbcal corporabons or subd~ws~ons of the Commonwealth of Wrg~n~a. The Act also prowdes that bonds ~ssued pursuant thereto may properly and legally be deposited w~th and received by any Commonwealth of V~rg~n~a or municipal officer or any agency or pol~bcal subd~ws~on of the Commonwealth of V~rgm~a for any purpose for which the deposit of bonds or obl~gabons of the Commonwealth of Wrg~n~a ~s now or may hereafter be authonzed by law CONTINUING DISCLOSURE Th~s offenng ~s subject to the conbnu~ng disclosure requirements of Rule 15c2-12 (the "Rule") promulgated by the Securities and Exchange Commission (the "SEC") For purposes of the Rule, the C~ty ~s an obhgated person w~th respect to the Series 2003A Bonds. The C~ty has agreed to execute a Continuing D~sclosure Agreement at closing to assist the purchasers of the Senes 2003A Bonds ~n complying w~th the prows~ons of Rule by prowd~ng annual financial ~nformabon and material event nobces required by the Rule The form of the Conbnu~ng D~sclosure Agreement ~s attached hereto as Appendix D. As descnbed ~n Appendix D, such undertaking requires the C~ty to provide only hm~ted ~nformabon at specified bmes and does not require the C~ty to d~sclose all ~nformahon that may affect the value of the Series 2003A Bonds. The C~ty may choose to make add~bonal ~nformat~on available from bme to bme, but has no obhgabon to do so The C~ty has never fa~led to comply m all matenal respects w~th any prewous undertakings w~th regard to the Rule to prowde certain annual financial ~nformat~on and material event nobces As descnbed more fully ~n Appendix D, any Bondholder may take steps to enforce the obl~gabon of the C~ty to provide conbnu~ng d~sclosure, but any failure by the C~ty under ~ts obl~gabon w~ll not result ~n an event of default under the Agreement of Trust or the Series 2003A Bonds The C~ty ~s required to file ~ts annual continuing d~sclosure ~nformabon w~th each nat,onally recognized municipal secunhes mformat~on repository ("NRMSIRs") and w~th any state mformabon depository ("SlD") created ~n Wrgmla. No SID has been created for Wrgm~a The C~ty ~s required to file any matenal event nobce w~th (1) each NRMSlR or the Mumc~pal Secunt~es Rulemak~ng Board and (2) any Wrg~n~a SlD As of the date of th~s Official Statement, the SEC has recognized the following enbbes as NRMSIRs. Bloomberg Municipal Repository 100 Park Dnve Sk~llman, New Jersey 08558 Telephone. (609) 279-3225 Facsimile (609) 279-5962 E-Ma~I Mun~s@Bloomberg com DPC Data Inc. One Execubve Drive Fort Lee, New Jersey 07024 Telephone (201) 346-0701 Facsimile (201) 947-0107 E-Mad' nrms~r@dpcdata com FT Interactive Data Attn. NRMSIR 100 W~ll~am Street New York, New York 10038 Telephone (212) 771-6899 Facsimile: (212) 771-7390 (Secondary Market Informabon) (212) 771-7391 (Pnmary Market Information) E-Ma~I NRMSlR@FTID com Standard & Poor's J.J. Kenny Repository 55 Water Street, 45th Floor New York, New York 10041 Telephone (212) 438-4595 Facsimile (212) 438-3975 E-Mad' nrms~r_repos~tory@sandp corn If a SID ~s hereafter created for the Commonwealth of V~rg~n~a, the C~ty ~s obligated to make flhngs and prowde nobces to the SID as required by the Rule 17 Investors and other interested parbes may contact any NRMSIR for add~bonal ~nformabon concerning ~ts services The C~ty makes no representabon as to the scope of the serwces provided to the secondary market by any NRMSIR or as to the costs for the prows~on of such services by any NRMSlR MISCELLANEOUS The references here~n to the Act and the financing documents are merely bnef summanes of certain prows~ons thereof Such summanes do not purport to be complete, and reference ~s hereby made to all such documents for the complete terms thereof Cop~es of the Support Agreement and the Agreement of Trust are on file w~th the C~ty Th~s Official Statement has been approved and authonzed by the Authonty and the C~ty for use m connecbon w~th the sale of the Senes 2003A Bonds Its purpose ~s to supply mformabon to prospecbve buyers of the Senes 2003A Bonds. F~nanc~al and other mformabon contained ~n th~s Official Statement have been prepared by the C~ty from ~ts records, except where other sources are noted. The ~nformat~on speaks as of ~ts date and ~s not ~ntended to ~nd~cate future or conbnumg trends m the financial or economic pos~bon of the C~ty Neither th~s Official Statement nor any statement which may have been made verbally or ~n wnbng ~s to be construed as a contract w~th the holders of the Senes 2003A Bonds W~th respect to any statements made ~n th~s Official Statement ~nvolv~ng matters of opinion or of esbmates, whether or not expressly stated, they are set forth as such and not as representabons of fact, and no representabon ~s made that any of the esbmates w~ll be reahzed Any quesbons concerning the contents of th~s Official Statement should be d~rected to the following' Department of F~nance, Municipal Center, Wrgm~a Beach, V~rgm~a 23456 (757) 427-4681, or the C~ty's financial adwsors, Government F~nance Associates, Inc (212) 836-4819, or ARD Government F~nance Group (703) 807-5700 The Authonty makes no representabon as to the accuracy or completeness of any mformahon ~n th~s Official Statement and takes no respons~b~hty for ~ts contents, other than the ~nformabon relabng to the Authonty ~n the secbons "THE AUTHORITY" and "LITIGATION -- The Authority." The Authonty and the C~ty have each duly authonzed the d~str~bubon of th~s Prehm~nary Official Statement The C~ty has deemed th~s Prehmmary Official Statement final as of ~ts date w~th~n the meaning of the Rule, except for the omission of certain pnc~ng and other mformabon permitted to be omitted pursuant to the Rule CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY By Chairman CITY OF VIRGINIA BEACH, VIRGINIA By. C~ty Manager 18 APPENDIX A THE CITY OF VIRGINIA BEACH, VIRGINIA TABLE OF CONTENTS FOR APPENDIX A CERTAIN INFORMATION CONCERNING THE CITY ............ Introduchon ................. Certain Elected Officials ............. School Board ........................ Elected Officials ................. Certain C~ty Councd Appointees and Adm~n~strabve Staff Members Governmental Services and Facd~t~es ....... Paqe .......... A-3 ......... A-3 ......... A-3 ........ A-4 ......... A-4 ...... A-5 ......... A-6 OVERVIEW OF GOVERNMENTAL ORGANIZATION AND SELECTED FUNCTIONS ... General ............... Functional Departments ................... ECONOMIC AND DEMOGRAPHIC FACTORS Populahon ................ Income ......... Housing and Construcbon .. Employment ......... Bus,ness and Industry ..... Retad Sales ...... Tourism and Conventions .. M~htary .. Medical Facd~t~es ..... Agribusiness. Education ............. CITY INDEBTEDNESS AND CAPITAL PLAN L~m~tat~ons on Incurrence of Debt .. Debt Management Pohc~es. Outstanding Debt and Lease Obhgat~ons .... Authorized but Unissued Bonds Water and Sewer System Debt Storm Water Utility System Debt . . Agricultural Reserve Program. .. Tax Increment F~nancmg . Assets Acquired and Financed Under Capital Leases Other Long-Term Obhgabons Overlapping Debt Short-Term Borrowing Debt H~story Payment Record Comprehensive Plan CAPITAL IMPROVEMENT PROGRAM Prior Year CIPs - Actual Capital Project Expenditures FINANCIAL INFORMATION Bas~s of Accounting and Accounting Structure C~ty of V~rg~n~a Beach Development Authority Hampton Roads Transportation D~stnct Commission GASB Statement 34 .. Investment Pohc~es and Prachces Certificate of Achievement Budgetary Process F~scal Year 2003 Financial Results F~scal Year 2004 Operating Budget F~scal Year 2004 Budget v F~scal Year 2003 Budget General Government Revenues General Fund ....... A-6 ·..A-6 ............ A-7 .......... A-11 ......... A-11 ...... A-11 .............. A-13 ..... A-15 ............ A-16 .... A-18 .............. A-18 ........ A-19 ........... A-20 ........ A-20 ........... A-21 .......... A-23 ........... A-23 .. A-23 .... A-25 ·. A-26 · . A-29 .... A-29 ·. . A-29 ............ A-30 ..... A-31 ......... A-31 ......... A-32 ..... A-32 ...... A-32 A-32 A-32 A-33 A-36 .. A-36 .. A-36 A-36 A-37 A-37 A-38 A-39 ............. A-39 A-40 A-40 .. A-42 A-43 ·. A-43 A-1 Operating Data ............................................. A-43 General Fund Operations ........................................ A~47 THE WATER AND SEWER SYSTEM .......................................... A~50 Typical Water and Sewer B~lls ............................................ A-52 Operating Results-Water and Sewer System ................................... A-52 Water Sales and Serwces Contracts ............................. A-54 Water and Sewer Capital Improvement Program ..................................... A~55 The Lake Gaston Project .................................... A-56 INSURANCE ...................... A-56 COMMITMENTS ~E~"C~ITING'E~I~i~',~ 'i'..ii "ii" . ............................ A-56 RETIREMENT AND PENSION PLANS ......................... A~57 EMPLOYEE RELATIONS AND COLLECTIVE BARGAINING ....... A~57 A-2 THE CITY OF VIRGINIA BEACH, VIRGINIA CERTAIN INFORMATION CONCERNING THE CITY Introduction The present C~ty of V~rgm~a Beach was formed on January 1, 1963, by the merger of Princess Anne County and the former smaller C~ty of V~rg~n~a Beach Th~s merger created one of the largest c~t~es ~n the Commonwealth of V~rg~n~a w~th an area of 310 square m~les and 38 redes of shore-I~ne on the Atlantic Ocean and the Chesapeake Bay The C~ty covers the enbre eastern border of V~rgm~a south of the Delmarva Peninsula and ~ncludes all of the area from the Chesapeake Bay to the North Carolina border The C~ty has the largest population of any c~ty ~n V~rg~n~a w~th a populabon of 425,257 according to the 2000 U S Census As a c~ty on the eastern seaboard, V~rg~n~a Beach has always been known as a resort community However, the strength of the C~ty's economy hes m ~ts d~vers~hcabon. Construcbon/real estate, hght industry, "h~gh-tech" services, wholesale and retad sales, agnculture, four major md~tary bases, and resort and convenbon trade are the major aspects of the economy The C~ty encourages and supports th~s d~vers~hcat~on. V~rgm~a Beach ~s an independent, full-serwce c~ty w~th sole local governmental taxing power w~th~n ~ts boundaries It derwes ~ts governing authority from a charter granted by the General Assembly of the Commonwealth of V~rg~n~a The governing body of the C~ty ~s the C~ty Councd, which formulates pohc~es for the administration of the C~ty The current charter prowdes for a Council-Manager form of government There ~s no overlapping debt or taxing powers w~th other pohbcal subdivisions The water and sewage systems are operated on a self-supporting bas~s The Execubve Offices are located at the Municipal Center, V~rg~n~a Beach, V~rg~n~a 23456 (757) 427- 4242 The telephone number for the F~nance Department ~s (757) 427-4681 Certain Elected Officials The C~ty operates under the Councd-Manager form of government as established by ~ts Charter There ~s an 11-member C~ty Councd vested w~th local leg~slatwe powers Each member of the C~ty Council ~s elected on an "at large" bas~s, however, seven seats must be filled by ~nd~wduals who reside ~n the seven residence d~stncts of the C~ty The C~ty's Charter was amended ~n 1995 to provide that the C~ty's seven boroughs would be replaced by these approximately equally populated residence d~stncts There ~s no d~str~ct residency requirement for the remaining four seats The Mayor ~s elected by the voters and occupies one of these four seats The C~ty Council elects a V~ce-Mayor from among ~ts members All members of the C~ty Councd are elected for four-year terms The C~ty Manager ~s the adm~n~strabve head of the municipal government and carries out the pohc~es of the C~ty Councd The C~ty Manager ~s appointed by the C~ty Councd and serves at the pleasure of the C~ty Councd The C~ty Councd also appoints members to certain boards, commissions, and authorities as ~t deems necessary to the operation of the C~ty A-3 School Board The School Board ~s made up of 11 members. Seven seats must be filled on the School Board by ~nd~wduals who reside ~n the seven respecbve residence d~stncts of the C~ty but each of the eleven elected School Board members are elected by the voters of the C~ty at large The School Board members serve four-year terms The School Board exercises all of the powers conferred and performs all of the dubes ~mposed upon them by general law Elected Officials Meyera E. Oberndorf, Mayor C~wc leader, former school teacher and radio broadcaster Elected to C~ty Council m 1976. Re- elected ~n 1980 and 1984. F~rst elected Mayor on July 1, 1988, re-elected m 1992, 1996 and 2000. Bachelor of Science degree ~n Elementary Educabon from Old Dominion University. Louis R. Jones, Vice Mayor Owner and operator of Hollomon-Brown Funeral Homes, Inc Elected to C~ty Council ~n 1982 and served as Mayor from 1982 to 1984. Re-elected to C~ty Council ~n 1990, 1994, 1998 and 2002 Bachelor of Science degree m Bus~ness Adm~n~strabon from The College of W~lham and Mary, Norfolk D~ws~on (now Old Dominion Umvers~ty) Harry W. Diezel, Councilman Former fire chief of V~rg~n~a Beach, rebnng ~n 1997 after 23 years of service. Appointed to C~ty Council December 17, 2002 Attended Randolph-Macon College and Amencan Umvers~ty. Associate of Arts and Sc,ences degree from T~dewater Community College Margaret L. Eure, Councilwoman Co-founder of Eure Rentals, Incorporated and Eure D~stnbutmg, Incorporated Council ~n 1998 for a two-year term due to red~stncbng. Won re-elecbon ~n 2000. Bus~ness College and the Amencan Insbtute of Banking Elected to C~ty Attended Kees Richard A. Maddox, Councilman Owner and operator of four Dairy Queen stores located ~n V~rg~n~a Beach. Elected to C~ty Council ~n 2002 Attended The College of W~lham and Mary and Wrg~ma Wesleyan College. Reba S. McClanan, Councilwoman C~v~c leader and former school teacher. Employed ~n the V~rgm~a Beach Pubhc School System from 1964 to 1968. Elected to C~ty Council ~n 1980 and re-elected ~n 1984 and 1988 Served as Wce Mayor from 1984 to 1986 Won elecbon to C~ty Council ~n 1996 and 1998, each for a two-year term due to red~stncbng Won re-elecbon ~n 2000 Bachelor of Science degree from Berea College and Master of Science degree from Wrg~n~a Polytechnic Insbtute and State University J. M. Reeve, Councilman Owner and president of Eco-Systems, Inc, an enwronmental restorahon company Elected to C~ty Council ~n 2002 Bachelor of Science degree m Industrial Engmeenng from V~rgm~a Polytechnic Insbtute and State Umvers~ty and a Masters ~n Bus~ness Admm~strahon from The College of W~lham and Mary A-4 Peter W. Schmidt, Councilman President of Southern Aggregates, LLC, a d~stnbutor of hghtwe~ght aggregate to the construcbon ~ndustry. Elected to C~ty Councd ~n 2002. Bachelor of Arts degree ~n Foreign Language and a Masters degree ~n Bus,ness Adm~n~strabon from the Umvers~ty of Wrgm~a Ronald John 'Won" A. Villanueva, Councilman Execubve V~ce President and partner of Venture Dynamics Corporahon, a d~vers~fled manne mdustnal firm Elected to C~ty Councd ~n 2002. Bachelor of Arts degree ~n Pohhcal Science from Old Dom~mon Unwers~ty Rosemary Wilson, Councilwoman Realtor and former V~rg~n~a Beach school teacher and school board member. Elected to C~ty Councd ~n 2000 Bachelor of Science degree m Educabon from Old Dominion Umvers~ty James L. Wood, Councilman V~ce President of J D & W, Inc, a commercial general contracbng firm. Elected to C~ty Councd ~n 2002. Bachelor of Science degree from Washington and Lee Umvers~ty. Certain City Council Appointees and Administrative Staff Members The C~ty Manager ~s responsible for planmng, organizing, d~recbng, and coord~nabng all acbwbes of the C~ty The C~ty Manager ~s also responsible for appo~nbng and d~scharg~ng all C~ty employees and officers, though respons~bd~bes may be delegated to subordinates. A major respons~bd~ty of the C~ty Manager ~s the preparabon of the annual C~ty Operating Budget and Capital Improvement Program The C~ty Attorney has management, charge, and control of all legal bus~ness of the C~ty The C~ty Attorney ~s chief legal adwsor to the C~ty Councd, the C~ty Manager, and all C~ty departments and agencies It ~s the duty of the C~ty Attorney to adwse the C~ty Councd concerning the legahty of acbons by the C~ty and to represent the C~ty ~n all matters affecbng ~ts interest It ~s the respons~bd~ty of the Real Estate Assessor's Office to annually appraise all real property ~n the C~ty In add~hon, th~s office administers the Land Use Assessment Program for quahfy~ng farm and forest lands and processes the Tax Exempbon Program for quahfy~ng sen~or c~bzens and d~sabled persons The C~ty Clerk's Office ~s responsible for recording and maintaining all leg~slabve documents and acbons of the C~ty Councd Appointed Officials James K. Spore, City Manager since November 25, 1991 Prewously served as C~ty Manager of Garland, Texas (1985 to 1991), and Burnswlle, Minnesota (1981 to 1985) Also served as the D~rector of Community Development for the C~ty of Lakewood, Colorado (1976 to 1981), and the C~ty of Elgin, Ilhno~s (1970 to 1976) Master of Pubhc Admm~strahon degree, University of Colorado, Boulder, Master of Urban Planning degree, Umvers~ty of Ilhno~s, Urbana A-5 Leslie L. Lilley, City Attorney since October 31, 1989 Prewously Assistant C~ty Attorney for the C~ty from 1987 to 1989. Employed as associate w~th the law firm of Taylor, Walker & Adams, P C, from 1983 to 1987. Served as Assistant Commonwealth's Attorney for the C~ty from 1979 to 1983. Served as Assistant to the C~ty Manager for Intergovernmental Relabons from 1974 to 1976. Served as Budget Officer for the C~ty from 1972 to 1974 Bachelor of Science degree ~n Bus~ness Adm~n~strabon from University of R~chmond, V~rg~n~a (1971), Master of Bus,ness Admm~strabon degree from College of Wdham & Mary (1972), and Juns Doctor degree from T. C Wdl~ams School of Law, Unwers~ty of R~chmond, V~rgm~a (1978). Ruth Hodges Smith, City Clerk since January 1, 1979 Cerbfled Municipal Clerk, Bachelor of Arts degree ~n Adm~mstrabon from Potomac State College of West Wrg~n~a Umvers~ty. Steven T. Thompson, Chief Financial Officer since July 1, 2000 Prewously served as C~ty Manager for the C~ty of Greenville, South Carohna, from 1998 to January 2000 C~ty Manager from 1991 to 1998 and Assistant C~ty Manager from 1983 to 1991 for A~ken, South Carolina Recently a management consultant specializing ~n ~nnovabons and ~mprovements ~n local government Bachelor of Arts degree ~n Pohbcal Science from the College of Charleston, South Carohna (1977), and a Masters of Public Adm~n~strabon degree from the University of South Carolina (1980) Patricia A. Phillips, Director of Finance since April 16, 1992 Prewously served as D~rector of the Office of Research and Strategic Analys~s from 1975 to 1992. Also served as a pubhc accountant for Coopers and Lybrand from 1970 through 1975 Bachelor of Science degree m Business Adm~n~strabon, Magna Cum Laude, Old Dominion University. Master ~n Bus,ness Admm~strabon degree, Old Dom~mon Unwers~ty. Certified Pubhc Accountant since 1972 Governmental Services and Facilities The C~ty provides general governmental services for ~ts c~bzens ~nclud~ng pohce and fire protecbon, emergency medical services, collecbon and d~sposal of refuse, water and sewer services, parks and recreabon, hbranes/culture, and maintenance of streets and h~ghways. Other services prowded by the C~ty, whmh receive part~al funding from the Commonwealth of V~rgm~a, include public educabon ~n grades k~ndergarten through twelfth, and certain techmcal and special educabon, mental health assistance, health and social services, agncultural services, and judicial acbv~bes. The C~ty's ma~n municipal complex includes e~ght general administrative buddings, a school adm~n,strabon budding, a pubhc safety budding, a c~ty jad and a judicial complex In close proximity are a C~ty garage complex, a h~ghway maintenance facd~ty, a pubhc ubht~es operabonal maintenance facd~ty, a waste management fac~hty and a farmer's produce market There are four police precincts, 20 fire stabons, one fire tra~mng center, one central hbrary along w~th s~x area hbranes, 204 developed c~ty parks, and 87 elementary and secondary schools located throughout the C~ty Some of the other major fac~l~bes provided by the C~ty ~nclude a convenbon center, the V~rgm~a Manne Science Museum, s~x recreabonal centers, a tennis complex and four municipal golf courses Recently, the C~ty opened a 6,000 seat mulbpurpose sports stadium and an amphitheater, which books approximately 40 entertainment events a year The C~ty of V~rg~n~a Beach prowdes a comprehensive range of pubhc services charactensbc of ~ts pos~t~on as the most populous c~ty ~n the Commonwealth of V~rg,n~a A-6 0 0 o OVERVIEW OF GOVERNMENTAL ORGANIZATION AND SELECTED FUNCTIONS General S~nce 1990, the C~ty's government organizational structure has changed ~n response to the challenges of increased demand for quality service, infrastructure needs, potential reduchons ~n state and federal funding and a slowdown m populabon and revenue growth. From 1991 to 1995, the C~ty government administration was organized ~nto management teams to assist the C~ty Manager m the operabons of the C~ty and the dehvery of services to c~bzens A Management Leadershfp Team ("MLT") also was estabhshed ~n 1991 to assist the C~ty Manager w~th orgamzabonal ~ssue ~dent~f,cat~on and resolution S~nce 1991, the MLT has evolved and ~s now the execubve body of government, including the C~ty Manager, the Chief Operating Officer, the Chief of Staff, the Chief Information Officer and the Chief Financial Ofhcer, which ~ntegrates and ahgns the organization to address C~ty Council's Destination Points and the major components of the V~rg,n~a Beach Quahty Service System (Bus~ness Strategy, Common Management, System Processes, Organizational Learning and Development, C~bzen Communication and Interrelationships, Member Communication and Interrelatfonsh~ps and Indicator System). In 1995, the C~ty expanded th~s team management approach. The V~rgm~a Beach Quahty Service System ("VBQSS") was developed as a way to organize the planning structure of the government and expand the team management approach. The purposes of VBQSS ~s to create and ~mplement strategies to enable the C~ty to reach toward the ws~on created by C~ty Councd It ~s an evolving system that continues to adapt and change based on the needs of the C~ty's customers It does not replace the ex~sbng departments and vertical h~erarchy, but supplements ~t w~th a cross-funcbonal process. In 1995, staff work on C,ty Councd's Desbnabon Points ~n~t~abve resulted ~n the creabon of s~x businesses and five commons areas. These s~x bus~ness areas were adopted by C~ty Councd to reflect the manner ~n which the C~ty does "bus~ness" The s~x businesses of the C~ty are: Economic V~tahty, Safe Community, Quality Physical Enwronment, Quahty Educahon and L~felong Learning, Cultural and Recreahonal Opportun~bes, and Fam,ly and Youth Opportun~bes The ownership of these s~x businesses of the C~ty were assigned to Strategic Issue Teams. In August 2002, a seventh bus~ness, Quahty Orgamzat¢on, was established by C~ty Councd to emphasize the V~rg~n~a Beach municipal organ~zahon as a quahty driven service prowder dehvenng cost effective services. The focus of th~s business over the next three years ~ncludes. Government Efficiencies and Effecbveness, Information Technology Plan, Member Investment, Morale and Retention, Organizational Learning and Development, and C~bzen Communication and Involvement Commons Pohcy Teams also were estabhshed to lead and manage the C~ty's resources common to all departments Commons Pohcy Teams address the following resources Budget and Financial Resources, Facd~bes and Land, Human Resources, Informabon Technology and Pubhc Relations and Markehng Commons Pohcy Teams ~dent~fy ~ssues and long term needs of the organ~zahon, prioritize such needs and make final recommendabons to the C~ty Manager and the MLT. In January 2001 the Common Pohcy Teams were reahgned to form a Common Management Group to better manage the C~ty's common resources for the benefit of the whole organization In August 1998, a "Strategy to Achieve C~ty Councd's V~s,on for the Future" was pubhshed and d~str~buted throughout the organization There are two mare focuses of the Strategy the community and the Government Organization Th~s document further dehnes the work of the VBQSS and the ws~on for the community. In October 2002, C~ty Staff developed a "3-Year Plan" entitled "From Ws¢on to Reahty" In concert w~th ongoing dehvery of programs and services, th~s plan focuses the C~ty's collective efforts on C~ty Councd's pnor~bes and other strategic ~ssues Th~s plan wdl guide the community ~n making ~ts ws~on a reahty A-6 In May 1996, the C~ty received the Nabonal Innovabon Award, presented by the Los Angeles Chapter of the Amencan Society of Pubhc Admm~strabon at the Transforming Local Government Conference ~n Long Beach, Cahforn~a The C~ty was one of s~x c~bes nabonw~de selected to present a case study at the conference Th~s nabonal award recognizes V~rgm~a Beach's excellence and mnovabon ~n organ~zabonal development, strategic planning, quahty m~t~abves and process management. In Apnl 1999, the C~ty was recogmzed for ~ts efforts to ~mplement the VBQSS by receiving the Medalhon Award from the 1998 U.S Senate Producbwty and Quahty Award ~n the pubhc sector category for the Commonwealth of Wrg~n~a. Functional Departments The Department of Agriculture provides educabonal and regulatory services ~n agriculture, home economics, 4-H, and community resource development The department has three major d~ws~ons. V~rg~ma Tech extension services offers educabonal programs and techmcal mformabon on agriculture and horticulture The D~ws~on of Enwronmental Serwces provides expert mformabon on sod and vegetabon. The Farmer's Market prowdes a place for the sale of goods and products of local farmers and craftsmen and for the provision of farm-related community acbv~t~es The funcbon of the Department of Communications and Informabon Technology ~s the processing and electronic storage of ~nformabon used ~n the dady bus~ness of the C~ty The department collects, orgamzes and d~ssemmates ~nformabon to all C~ty departments, C~ty agencies, and the pubhc school system It also prowdes consulbng services ~n related areas to municipal users to assist them ~n formulating goals, objecbves and long-range plans The department also manages school and C~ty v~deo producbon serwces and facd~bes and provides ~nformabon to the community on municipal government and the pubhc school system through dady cablecasbng of programs on the C~ty's Municipal Cable Access Telews~on Stabon, Channels 47 and 48 The Convention and V~sJtor Development Department coordinates the adverbs~ng and promobon of tourist acbv~bes and ~s responsible for bnngmg meetings, conferences, and convenbons of large groups to Wrg~ma Beach The department operates a Ws~tor Informabon Center and the large convenbon center known as the Pawhon Approximately 3 m~lhon tourists and convenboneers v~s~ted Wrg~n~a Beach ~n calendar year 2001, spending an esbmated $647 9 mdhon and generabng over $53 3 mdhon ~n tax revenues The EconomJc Development Department promotes and encourages the economic growth and d~vers~ty of the C~ty The department works w~th the C~ty of V~rg~n~a Beach Development Authority to attract business and industry to the C~ty and to develop s~tes for new or expanding businesses ~n the C~ty's Busmess/Industnal Parks The department has won over a dozen awards ~n the last five years that recognize the C~ty as an outstanding business opportunity The Department of Emergency Medical Services coordinates the pre-hospital emergency care provided by the 10 volunteer Rescue Squads and 3 substabons In F~scal Year 2002, ~t answered over 32,000 calls for medical assistance Th~s care ~ncludes rap~d, safe response to the scene, proper treatment of the wcbm and prompt transfer to a hospital The department also prowdes all rescue squad training and coordinates the use of spec~ahzed resources including EMS Special Operabons, pohce, fire, hospital personnel, d~spatchers and the N~ghbngale A~r Ambulance to deal w~th medical emergencies m the C~ty Approximately 750 volunteers were acbve w~th the rescue squads ~n 2002 The Department of Finance oversees the financial affairs of the C~ty and ensures the financial ~ntegnty of C~ty operabons Departmental services include payment of all C~ty b~lls, maintenance of accounting records, payment of all C~ty employees and adm~n~strabon of employee benefits, prows~on of ~nsurance and self-~nsurance, maintenance of the C~ty's fixed assets ~nventory, procurement of all equipment, matenals and serwces for all c~ty agencies, and coordmabon and adm~n~strabon of the C~ty's long-term debt program A-7 The C~ty's F/re Department, whIch ~s responsible for both fire prevenbon and fire suppression, handled over 23,000 fire and rescue ~nc~dents ~n F~scal Year 2002. The C~ty's flreflghters perform the actual emergency responses to fires from the C~ty's 20 fire stabons. In add~bon, 55 avadable volunteer flreflghters w~th proper training from the C~ty's fire training center provide a s~gn~flcant manpower contribution to the flreflght~ng force. The Emergency Services Office, whose normal da~ly operations are overseen by the F~re Department, ~s responsible for protecbng the I~ves and property of V~rg~n~a Beach c~bzens dunng a major emergency d~saster The Off~ce of the General Registrar ~s responsible for providing an accessible and fair means by which C~ty residents can register and vote. Ma~nta~mng 319,000 records, th~s office makes appropnate changes and/or delebons as required by law The number of registered voters was approximately 245,000 as of March 1,2003. The Department of General Services prowdes support funcbons for C~ty departments General Serwces consists of three major un~ts Budding Maintenance, Landscape Services and Internal Service Support for Automobve Serwces, Records Management and Mad D~stnbut~on. The Department of Housing and Neighborhood Preservation designs programs ~nvolwng capital ~mprovements, new construction, and rehabd~tabon to rewtahze areas The department administers the State program, which subsidizes rent up to 70 percent for quahfled tenants and the Urban Preservation and Inflll Program, which prowdes permanent mortgage financing to qualified persons ~n specified areas. In addition, the Zoning Enforcement Unit interprets and ensures compliance w~th the C~ty zomng ordinance and other sections of the C~ty Code related to land use The Department of Human Resources ~s responsible for developing and managing the C~ty's personnel management programs to ensure an effecbve delivery of services by the workforce The department prowdes services ~n apphcant counsehng, recruitment, tesbng, volunteer referrals, pohcy ~nterpretabons, fnnge benefits, gnevance procedures, d~sc~phnary acbon, career counseling, professional development, compensabon, employee safety, and occupabonal health services The Juvenile Probation Office provides support services to the Juvende and Domesbc Relations D~stnct Court The office prowdes probabon superws~on, ~ntake services, and parole services for juveniles It prowdes court support by processing pebt~ons and prepanng social background ~nvest~gat~ons The Department of Management Serwces develops and oversees the C~ty Operabng Budget and Capital Improvement Program. The department prowdes assistance and d~recbon to C~ty departments for any amendments to the above programs. The department rewews and recommends alternabve budget formats, prowdes mulb-year forecasbng of revenues and expenditures, evaluates C~ty programs and services and assists departments ~n management ~ssues. The Department of Mental Health/Mental Retardation~Substance Abuse Services carnes out ~ts m~ss~on of strengthening the health and prospenty of the commumty by planmng, developing, ~mplemenbng, managing and evaluating a system of mental health, mental retardabon and substance abuse programs, services and facd~bes w~th~n the pohc~es of the V~rg~n~a Beach Community Services Board The Department and the Board work to develop a system of preventabve, developmental, therapeutic, and training services to meet the mental health needs of Wrg~n~a Beach c~bzens Th~s ~s accomphshed through program coord~nabon w~th the Eastern State Hospital, Southeastern V~rg~n~a Training Center for the Mentally Retarded, the pnvate sector, and general community. The Department of Museums and Cultural Arts operates the V~rg~n~a Manne Science Museum, the Franc~s Land House and the Adam Thoroughgood House The department coordinates projects and ~n~bat~ves for the preservabon of the C~ty's h~stonc resources, administers the V~rg~n~a Beach H~stoncal Register and prowdes support services to the V~rg~n~a Beach Arts and Human~bes Commission The V~rg~ma Manne Science Museum first opened ~n 1986 and was expanded to three t~mes ~ts original s~ze ~n 1996 Th~s newly renovated 120,000 square foot facd~ty has doubled ~ts annual attendance to A-8 approximately 600,000 v~s~tors and takes v~s~tors on a journey of water through V~rg~ma's manne enwronment by way of exhtb~ts that ~nclude a 300,000 gallon shark aquanum, hve otters, seals and many hands-on exhibits It also ~ncludes a 3-D IMAX® Theater The purpose of the Franc~s Land House ~s to collect, preserve and present h~stoncally accurate mater~al reflecting hfe m e~ghteenth century Pnncess Anne County The house ~s also used for official C~ty recepbons Approximately 20,000 v~s~tors tour the house each year The Adam Thoroughgood House prowdes tours and programs related to the m~bal EnCsh settlement area and 19th century hfe. Approximately 10,000 ws~tors attend the tours and programs each year. The department also oversees three other properties, the DeW~tt Cottage (Atlanbc W~ldfowl Hentage Museum), the Old Coast Guard Stabon and the Contemporary Art Center of V~rg~ma, which are owned by the C~ty and operated by pnvate, non-profit orgamzabons The Virginia Beach Arts and Humanities Commission serves in an advisory capacity to C~ty Council on matters relating to cultural acbwbes The Commission administers public funds to arts orgamzabons and monitors grants to assure fiscal respons~b~hty The Department of Parks and Recreation prowdes a w~de range of h~gh quahty, year-round leisure programs that are responsive to the physical, mental, recreational and cultural needs of the clbzens of Wrgmla Beach In F~scal Year 2002, the Parks and Recreabon D~ws~on Special Revenue Fund, which includes the Parks D~wslon and Recreabon Division, generated over $8 8 mllhon ~n fees and charges. The Golf Course Enterpnse Fund generated approximately $2 4 m~lhon ~n revenue m F~scal Year 2002 The Parks D~ws~on, m conjuncbon w~th the Department's Design and Development D~ws~on, plans, acquires, constructs and maintains parks, playgrounds, pubhc beaches, golf courses and open spaces There are 202 developed C~ty parks, 187 of these are classified as neighborhood parks, 9 are classified as d~stnct parks and 6 are classified as commumty parks The Recreat,on D~ws~on has respons~bd~bes ~n the following areas: providing recreabon and leisure services to adults, semor c~t~zens and youths, orgamz~ng well-rounded athlebc programs for persons from ten years of age and older; prowd~ng all d~sabled c~bzens the opportumty to receive the benefits of recreabon and leisure ~n the least restncbve environment, operating s~x recreabon centers located throughout the C~ty, operating Before School and After School programs, and prowdmg classes m the Performing Arts Wtth the acquisition of Stumpy Lake natural area from the C~ty of Norfolk, the Golf Course D~ws~on manages four golf courses The Department of Planmng and Community Development provides policy and operabonal planning support ~n the areas of transportabon, land use, zoning, and environmental protection and management The department ~s responsible for mamta~mng a long-range Comprehensive Plan which provides guidance for the physical development of the C~ty The department rewews subd~ws~on plans, s~te plans, and land management plans and prepares the monthly Planmng Commission Agenda Its d~v~s~on of Development Services prowdes customer-onented management of plan rewew, ubhty, nght-of- way, mowng and hauhng permit ~ssuance and surety adm~mstrabon The d~v~s~on of Enwronmental Management coordinates many of the C~ty's enwronmental programs and serves as a point of contact for ~nformat~on and ha~son w~th the commumty on enwronmental ~ssues The department through ~ts Permits and Inspecbons D~v~s~on ensures comphance w~th C~ty and/or state building code standards w~th the ~nspecbon of all construcbon ~n the C~ty The Police Department ~s composed of four major un~ts: Admm~strabon, Support, Operabons and Invesbgat~ve D~ws~ons The department operates through four precincts located throughout the C~ty V~rgm~a Beach's cnme rate for 2002 was 37 5 chines per 1,000 populabon, the lowest cnme rate m more that 20 years Furthermore, m 2001, according to a Federal Bureau of Invesbgabon report, Wrg~n~a Beach's wolent cnme rate was 1 9 crimes per 1,000 population. Th~s v~olent cnme rate, shared w~th one other c~ty half our s~ze, was the lowest for c~bes w~th populabons of 200,000 or more. Wrgm~a Beach conbnues to be rated as one of the safest commumbes of ~ts s~ze ~n the country A-9 The Department of Pub#c Health ~s responsible for promoting the best possible state of health for all Wrg~n~a Beach cmzens. The department assumes primary respons~bd~t~es for providing protective, curative, and environmental health services when not otherwise provided by the private sector. The Public Health Department offers serwces and chmcs ~n the areas of pediatrics, dentistry, famdy planning, ~mmumzat~ons, home nursing, matermty, chest x-rays, venereal d~sease, health education, and environmental health The Department of Pubhc L~branes manages s~x area I~branes along w~th a 95,000 square foot Central L~brary The departments outreach services ~nclude a bookmobile, and special services for homebound and d~sabled cmzens ~nclud~ng a subregional I~brary for the bl~nd and hand~capped. The department's other support serwces ~nclude a municipal reference hbrary and a law hbrary Dunng October 2000, the C~ty completed the expansion of the Pungo/Blackwater L~brary In 2001, the new South Rosemont Youth L~brary was completed, and ~n May 2003, the expansion of the Great Neck L~brary w~ll be complete for a total hbrary system of 172,700 square feet The Department of Pubbc Ut~bt~es prowdes water and samtary sewer service to C~ty residents. Its respons~bd~t~es ~nclude the ~nstallat~on and maintenance of more than 2,914 mdes of water and samtary sewer hnes and the operation and maintenance of 386 samtary sewer pumping stations, ten water pumping stations 0nclud~ng Lake Gaston), 13 water storage facdmes w~th 30 25 mdhon gallons of water capacity and 7,441 fire hydrants. The department coordinates the eng~neenng and administration for development of raw water supphes for the C~ty and oversees the C~ty's water conservation programs. The Department of Pubhc Works oversees the design and construction of new C~ty structures and transportation systems, maintains a large port,on of the C~ty's infrastructure (e g, roadways, bridges, storm water systems, beaches and traffic control dewces), and provides for collection, recychng and d~sposal of sol~d waste The adm~mstrat~on of the storm water management utility ~s also ~ncluded as a respons~bd~ty of the department The Department of Social Serwces provides opportumt~es for c~tizens ~n need to achieve self- support and self-sufflc~ency. The department provides programs for chddren ~n chdd protection and prevention services, a~d to dependent chddren and foster care To assist adults, the department has programs ~n employment services, care for the elderly and emergency needs services In addition, ~t operates the Pendleton Chdd Serwce Center, a community treatment agency serving chddren of V~rg~n~a Beach and Chesapeake, ages 12 and under, who are exhibiting serious antisocial and maladaptwe behawors ~n the home, school and/or community The Volunteer Counc# coordinates the use of over 15,000 volunteers throughout C~ty departments A-lO ECONOMIC AND DEMOGRAPHIC FACTORS Population Based on the April 2000 census conducted by the U S Census Bureau, the populabon of the C~ty of V~rgm~a Beach was 425,257 Th~s census confirmed V~rgm~a Beach as the most populous c~ty ~n the Commonwealth of V~rg~n~a and the 34th largest c~ty ~n the Umted States The following table presents population figures for selected years POPULATION AND RATE OF CHANGE VIRGINIA BEACH AND THE UNITED STATES SELECTED YEARS Year Virginia Beach Rate of Change United States Rate of Chan.cle 1950 47,667 N/A 150,697,361 N/A 1960 85,200 78 71% 178,464,236 18 43% 1970 172,106 102 00 203,211,926 13 87 1980 262,199 52 35 227,225,000 11 82 1990 393,069 49 92 249,398,000 9 76 1995 421,51 7 7 23 262,765,000 5 36 2000 425,257 0 89 281,421,906 7 10 2001 426,800 0 36 285,317,559 1 38 2002 428,400 0.37 288,368,698 1 07 Sources C~ty Department of Planning Weldon Cooper Center for Pubhc Service, University of V~rg~n~a, U S Census Bureau and U S Department of Commerce, Bureau of Economic Analys~s FIVE MOST POPULOUS CITIES IN VIRGINIA Citv 1990 Population 2000 Population V~rgm~a Beach 393,069 425,257 Norfolk 261,229 234,403 R~chmond 203,056 199,184 Newport News 170,045 197,790 Chesapeake 151,976 180,150 Source U S Census Bureau Income Presented below are tables on per capita ~ncome, total personal ~ncome and median household effecbve buying income Per capita ~ncome ~s total personal ~ncome d~v~ded by the area's res~denbal populabon Total personal income ~s a measurement of the area's total income from all sources Effecbve buying income ~s a measurement of d~sposable income or after-tax ~ncome. PER CAPITA INCOME 1980 1990 1997 1998 1999 2000 2001 ,, V~rg~n~a Beach $10,397 $20,896 $26,515 $28,144 $29,322 $30,834 $32,076 Norfolk 8,820 15,048 20,353 21,313 21,848 22,693 23,271 Chesapeake 9,016 17,464 23,088 23,923 24,849 26,389 27,807 Portsmouth 8,619 15,269 19,252 19,939 20,270 21,202 22,173 Commonwealth of V~rg~ma 9,922 20,527 26,385 27,968 29,246 31,1 20 32,338 Un,ted States 10,030 19,572 25,412 26,893 27,880 29,760 30,413 Source U S Department of Commerce, Bureau of Economic Analys~s Most recent mformabon avadable A-11 TOTAL PERSONAL INCOME (in $ Millions) 1980, 1990 1997 1998. 1999 2000 .2001 V~rg~n~a Beach $2,882 $ 8,265 $11,188 $11,830 $12,385 $13,156 $13,768 Commonwealth of V~rgm~a 54,267 127,614 180,190 193,007 204,728 221,078 233,730 V~rg~ma Beach as a percent of state 5.3% 6 5% 6.2% 6.1% 6 1% 5 9% 5 9% Source U S Department of Commerce, Bureau of Economic Analys~s Most recent ~nformabon avadable The following table shows median household effecbve buying ~ncome for the C~ty, the Hampton Roads MSA, the Commonwealth of V~rg~n~a and the Un~ted States for the last ten calendar years, followed by comparative tables showing V~rg~n~a Beach as a percentage of the various regions MEDIAN HOUSEHOLD EFFECTIVE BUYING INCOME Hampton December 31 Virginia Beach Roads MSA Commonwealth of Vir_qinia United States 1993 $40,838 $35 1994 42,944 36 1995 36,982 30 1996 38,453 31 1997 39,654 32 1998 40,509 33. 1999 41,994 34. 2000 43,911 36. 2001 43,311 36 2002 unavadable 125 836 966 953 194 509 942 248 2O7 $37,838 39,463 34,136 35 405 36 802 37 740 39 709 41 810 41 095 $35 058 37 070 32,238 33,482 34 618 35,377 37,233 39129 38 365 December 31 Virginia Beach Hampton Roads Commonwealth of Virginia As a Percent of U.S. As a Percent of U.S. As a Percent of U.S. 1993 116 49% 100.20% 107 94% 1994 115 85 99.37 106 46 1995 114.72 96.05 105 89 1996 114 85 95.43 105 74 1997 114.55 95.08 106 31 1998 114 51 94 72 106 68 1999 112 79 93.85 106 65 2000 112 22 92 64 106 85 2001 112 89 94.38 107 12 2002 unavailable A-12 December 31 Virginia Beach as a Percent of MSA Virginia Beach as a Percent of State 1993 116 26% 107 93% 1994 116 58 108.82 1995 119 43 108 34 1996 120 34 108 61 1997 120.48 107 75 1998 120 89 107 34 1999 120.18 105 75 2000 121 14 105 03 2001 119 62 105 39 2002 unavadable Source Sales & Markebng Management/2002 Housing and Construction The data ~n the following tables are presented to dlustrate vanous housing charactenst~cs for the C~ty. As of January 1, 2002, the total estimated number of dwelhng un,ts ~n the C~ty was 164,002, excluding m~htary housing Smgle-famdy umts represented 59 percent of th~s total The d~stnbuhon of all dwelhng un~ts ~s as follows DWELLING UNITS BY TYPE (Estimated as of January 1, 2002) Units Percent Single Famdy 96,269 59% Duplex 4,538 3 Townhouse 20,185 12 Mulb-Famdy 43,010 26 Total 164,002 100% Note Does not include MJhtary Combined Un~ts Source C~ty Department of Planning A-13 In calendar year 2002, the C~ty ~ssued 43,900 permits valued at $774 mdhon For January through June of 2003, the C~ty ~ssued 21,863 permits valued at $574 mdhon The follow~ng table presents a further breakdown on certain budding permits by type NUMBER OF CERTAIN BUILDING PERMITS ISSUED AND VALUE(1) Calendar Year Residential(2) Commercial Industrial Other Total Value 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 (through June) 1 722 1 379 1 515 1 409 1 276 1 553 1 305 I 753 2218 2 522 975 826 4 16,605 740 9 16,257 813 21 16,499 1,011 25 18,750 1,050 33 18,701 1,111 32 19,597 1,100 32 16,737 1,024 23 14,934 1,096 7 14,858 982 2 16,277 463 2 8,472 $282,255 459 279,298 570 336,173 287 342,592,049 367,585 973 466,077 774 455,353 722 530,576,046 667,406,046 699,99O,772 368,885,784 Represents building and mechanical permits only Does not include electrical, One res~denbal building permit does not necessanly equal one res~denbal residential un,ts plumbing, gas and other types of permits umt, in many ~nstances one permit ~s for mulbple Source Qty Department of Permits and Inspecbons The following table presents annual construct,on ~nformabon for the C~ty, ~nclud~ng the number and assessed value of res~denbal and commercial umts. Res~denbal and commercial construcbon dunng F~scal Year 2003 totaled 2,046, res~denbal budding umts and 2,199 commercial construcbon permits for a total value of $378,751,849 NEW CONSTRUCTION: NUMBER OF UNITS AND ESTIMATED VALUE Residential Construction Commercial Construction Fiscal Number of Estimated Number of Eshmated Total Estimated Year Units Value Permits Value Value 1994 2,016 $202,992,500 1,814 $58,936,004 $261,928,504 1995 1,508 162,487,690 1,765 35,976,836 198,464,526 1996 2,330 216,411,267 1,936 108,931,649 325,342,916 1997 1,562 182,876,814 1,902 64,239,160 247,115,974 1998 1,783 253,002,425 2,020 120,357,805 373,360,230 1999 2,531 281,054,751 2,082 86,933,610 367,988,361 2000 1,829 246,813,748 2,077 170,897,797 417,711,545 2001 2,138 219,533,642 2,189 168,831,092 388,364,734 2002 2,523 253,494,922 2,027 126,569,395 380,064,317 2003 2,046 257,619,009 2,199 121,132,840 378,751,849 Source City Department of Permits and Inspecbons A-14 Employment Employers ~n the C~ty, excluding m~htary, provided jobs for 169,329 persons through the fourth quarter of calendar year 2002 The following table presents the number of estabhshments, employment, and quarterly gross wages for the fourth quarter of calendar year 2002. CITY OF VIRGINIA BEACH NUMBER OF ESTABLISHMENTS, EMPLOYMENT AND QUARTERLY GROSS WAGES QUARTER ENDED DECEMBER 31,2002 Number of Average Emp Quarterly Industry Group Establishments For Quarter Gross Wa,qes Prwate Agnculture, Forestry, F~shmg and M~nmg 19 88 $ 404,011 Construcbon 1361 11,797 107,103,201 Manufactunng 224 5,597 46,770,968 Transportabon, Commumcabons and 201 2,349 17,437,764 Ut~hbes Wholesale and Retail Trade 1,970 31,069 185,358,575 Financial, Insurance and Real Estate 1,150 11,801 122,101,003 Information 155 4,423 41,552,189 Services 4.,918 75,566 507,202,907 Total Pnvate¢) 9,998 142,690 $1,027,930,618 Public State Government 29 1,761 $12,370,323 Local Government 51 19,455 156,653,492 Federal Government 2_~5 5,423 52,.406,361 Total Pubhc 105 26,639 $ 221,430,176 TOTAL 10,103 169~329 $1 ~249,360,794 ¢)lmmatenal amounts have been suppressed m certain ~ndustry sub-categories, whmh are included m the Average Weekly Wages Per Employee total amounts Source $ 353 698 67O 571 459 796 723 513 $ 554 $ 540 619 743 $ 639 $ 568 V~rg~n~a Employment Commission, Economic Informabon Services D~v~s~on, based upon most current and available mformat~on The following table ~s a breakdown of employment by sector m the C~ty EMPLOYMENT BY SECTOR AS A PERCENTAGE OF TOTAL QUARTER ENDED DECEMBER 31,2002 Services Trade Government F~nanc~al, Insurance and Real Estate Construcbon Manufactunng Informabon Transportabon, Commun~cabon and Ubl~bes Agnculture Total 44 6% 183 157 7O 7O 33 26 14 01 100 0% Note Not seasonally adjusted Source V~rg~n~a Employment Commission, Economic Informabon A-15 As dlustrated ~n the table below, the unemployment rate for the C~ty has, for the most part, been consistently lower than the rates for the Metropolitan Stabst~cal Area (MSA), the Commonwealth of V~rg~ma and the Umted States ANNUAL AVERAGE UNEMPLOYMENT RATE 1997 to 2003 1997 1998 1999 2000 2001 2002 2003(2) V~rg~n~a Beach 4 0% 2 8% 2 7% 2 2% 3 0% 3 5% 4 0% MSA(1) 4 8 3 4 3 4 2 6 3 5 4 2 4 8 Commonwealth of V~rgm~a 4 0 2 9 2 8 2 2 3.0 4 1 4 2 Umted States 4 9 4 5 4 2 4 0 4 8 5 8 6 4 ¢) MSA ~ncludes the C~bes of Chesapeake, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, V~rgm~a Beach and W~lhamsburg and the Counties of Gloucester, Isle of W~ght, James C~ty, Mathews and York Also includes Curntuck County, North Carohna (2) Unemployment rates are as of December 2002 Source U S Department of Labor, Bureau of Labor Stabsbcs, and V~rgm~a Employment Commission Business and Industry The C~ty has five major concentrations of ofhce, mdustnal and commercial property - A~rport Industrial Park, Greenw~ch/W~tchduck Corridor, Central Business D~strmt/Pembroke area, Oceana West Corporate Park/Lynnhaven Corridor, and Corporate Landing Bus~ness Park. A,rport Industrial Park ~ndustnal and ofhce space operabons are located here The park encompasses 250 acres w~th 4 mdhon square feet of hght Nabonal and ,nternat~onal manufactunng, warehousing and d,stnbubon Greenw~chAN~tchduck Corridor The Greenw~chAN~tchduck corridor currently contains 1 3 m~lhon square feet of Iow and m~d-nse suburban ofhce space ~n business parks ~nclud~ng Interstate Corporate Center, Corporate Woods and Commerce Park that house corporate headquarters and business operabons of many types. The Corndor currently contains 1 8 mdhon square feet of hght ~ndustnal space and facd~bes housing regional warehousing and d~stnbubon operabons Central Bus~ness D~str~ct/Pembroke Area. The CBD encompasses 500 acres and 1 9 m~lhon square feet of Iow and h~gh-nse office space ~n business parks including Town Center, Pembroke Office Park, Corporate Center and Convergence Center The Town Center of V~rgm~a Beach ~s a new urban "Ma~n Street" style development located w,th~n the core of the C~ty's Central Bus~ness D~stnct Phase I of the project ~s complete and ~ncludes a 14-story office tower on top of a 9-story, 469,000 square foot parking garage and surrounded by retail and additional office space Phase IA ~s scheduled to open ~n late 2003 or early 2004 and includes a 176- room Hdton Garden Hotel and a regional bank Phase II, which includes add~bonal retail and entertainment space, broke ground ~n spnng 2003 The project wdl eventually span 25 acres and 850,000 square feet of Class A office space, 750,000 square feet of upscale retad, hne d~n~ng, a luxury hotel and apartments and free structured park,ng The corporate c~bzens ~n the area ~nclude numerous hnanc~al, ~nformat~on processing, law and professional serwce firms Oceana West Corporate Park/Lynnhaven Corridor The park encompasses 1,100 acres and currently contains I 5 mdhon square feet of Iow and m~d-nse suburban ofhce space and 4 1 mdhon square feet of hght ~ndustnal space 195 acres are presently avadable for development Corporate c~t~zens ~n Oceana West and adjacent bus~ness parks ~ncludmg Reflecbons, Sabre, Lynnhaven Industnal Area, A-16 Oceana East and Taylor Farms Industrial Park, comprise a w~de variety of domestic and foreign firms, including corporate headquarters and manufactunng, warehousing and d~stnbubon operations Corporate Landing Business Park The park encompasses over 325 acres and is owned and operated by the C~ty of V~rg~n~a Beach Development Authonty 125 acres are presently available for headquarters, professional services, research and development, office buddings, retad and two conference centers Corporate c~bzens include world headquarters, regional offices, and h~gh-tech manufactunng Th~s master-planned, mulb-faceted park contains 38 acres of lakes, jogging trads, green space and recreabonal opportun~bes Throughout V~rg~n~a Beach there are many add~bonal smaller nodes of office and commercial achwty ~nclud~ng L~ttle Neck, Oceanfront, B~rdneck/Lask~n Road, F~rst Colomal and Kempswlle CITY OF VIRGINIA BEACH MAJOR PRIVATE EMPLOYERS Number of Firm Type of Business Employees Lynnhaven Mall Ldhan Vernon Corp Pembroke Mall Sentara Virginia Beach General Hospital GEICO Sbhl, Incorporated Cox Commun~cabons Av~s Cendant The V~rgm~an-Pdot AMERIGROUP Corp Chnst~an Broadcasting Network Sentara Health Management Household Recovery Services U S. Postal Service Abacus Commumcabons, LP Umted Parcel Serwce Sentara Hospital Bayslde M&G Electronics Corporation Navy Exchange Service Command (NEXCOM) Venzon AmSec LLC Southland Technologies AIItel Commun~cabons National Leisure Group/The Vacabon Store Retad Trade 3,500 Catalog D~stnbuhon Center 1,700 Retad Trade 1,700 Medical Services 1,515 I nsu rance Manufacturer of Portable Outdoor Power Equipment Cable Telews~on and Communlcabons Cendant Processing Center Pnnt Med~a HMO Prowder of Medicaid Ministry Educabon & Communications Medical Serwces Financial Recovery Serwces Postal Dehvery Telecommun~cabons Sales and Installabon Small Parcel Sh~pper Medical Serwces Manufacturer of W~nng Harness Sets Corporate Headquarters for Navy Exchange System Telecommun~cabons Eng~neenng and Computer Services Gaskets for Auto Industry Commun~cabons Travel Services 1,500 1,300 1,200 933 977 9OO 85O 6OO 575 55O 540 54O 5O6 50O 5O0 5OO 5OO 49O 48O 45O Source Department of Economic Development, Aprd 2003 A-17 Retail Sales The table presented below ~s a summary of the C~ty's taxable retad sales; ~t does not ~nclude sales which are exempt from tax. Specifically exempt from the sales tax under Secbons 58-441.6 of the Wrg~ma Retad Sales and Use Tax Act are sales of alcohohc beverages ~n government stores, sales of certain motor vehicles, tra~lers and sem~traders, mobde homes, and travel traders; and sales of certain motor vehicle fuels. Also, the figures do not ~nclude non-taxable sales on m~l~tary bases ~n the C~ty esbmated to be ~n excess of $125,000,000 annually. REGISTERED RETAIL/WHOLESALE ESTABLISHMENTS AND TAXABLE SALES Taxable Retail Calendar Year Sales 1993 $2,657,453,188 1994 2,810,901,704 1995 2,948,967,853 1996 3,021,817,302 1997 3,172,382,057 1998 3,343,759,258 1999 3,446,988,609 2000 3,655,862,619 2001 3,683,752,990 2002 3,903,205,018 Source V~rg~ma Department of Taxabon Tourism and Conventions In calendar year 2002, more than 3 m~lhon out-of-town v~s~tors arrwed ~n the C~ty. These v~s~tors spent approximately $698 1 mdhon, an ~ncrease of 7 7 percent over 2001, dunng their stay for accommodabons, meals, entertainment and other serwces and d~rectly created about 11,000 jobs in the C~ty and an additional 5,400 jobs ~n the Hampton Roads region V~s~tor expenditures generated $61 8 mdhon ~n d~rect C~ty revenue, a 15 5 percent increase over 2001 Hotel occupancy rose to 62.4 percent for 2002, an increase of nearly 5 percent over 2001 Esbmates for 2002 shows 201,549 convenbon and trade show delegates attended 515 meetings ~n the Convenbon Center and at the C~ty's more than two dozen convenbon hotels, producing $66 9 mdhon ~n esbmated gross revenue Of th~s amount, an esbmated $4.7 mflhon went d~rectly to the C~ty as tax revenue The C~ty's efforts to attract parbc~patory sporhng events has made a meaningful ~mpact For 2002, approximately 55,000 athletes competed ~n 22 events resulbng ~n 72,800 room mghts and approximately $20 m~lhon ~n d~rect spending The C~ty Council has approved funding for a new convenbon center The $197 25 mdhon 505,000 square foot facd~ty wdl ~nclude the following 142,000 square foot Exhibition Hall, 31,000 square foot ballroom, 29,000 square feet of meebng space and 2,100 parking spaces Th~s ~s three bmes the s~ze of the current convenhon center The new convention center facd~ty w~ll be located on the same s~te as the C~ty's ex~sbng facd~ty The construcbon wdl be phased ~n to enable the ex~sbng convenbon center to remain open at all bmes It ~s esbmated that the first phase of the facility could open ~n 2005 and wdl ~nclude the ballroom, one-third of the Exh~b~bon Hall, two-th~rds of the meebng space and half of the fac~hty's parking The second phase ~ncludes the remaining port~on of the Exh~b~bon Hall and meebng space The second phase ~s estimated to open ~n early 2007 after the opening of the ~n~t~al phase A-18 The C~ty and the C~ty of V~rgm~a Beach Development Authority have entered into a pubhc/pnvate investment partnership for a Hdton Resort Hotel and Conference Center and a pubhc parking complex at 31st Street on the oceanfront The hotel wdl be a 22-story luxury hotel w~th 300 rooms An adjacent pubhc parking garage ~s expected to contain approximately 1,000 spaces, and ~t ~s anbc~pated that the parking facd~ty wdl be financed w~th pubhc fac~hty revenue bonds ~ssued by the C~ty of V~rg~n~a Beach Development Authority Tounsm and convention achv~ty generate tax revenue for the C~ty, parbcularly ~n the form of a hotel room and meal tax and a restaurant tax, as dlustrated ~n the table below' HOTEL ROOM AND MEAL TAX AND RESTAURANT TAX RECEIPTS FISCAL YEARS 1993 THROUGH 2003 Fiscal Year Total Tax Receipts 1993 $23,205,359 1994 25,594,361 1995 26,484,147 1996 28,595,940 1997 30,512,485 1998 32,475,690 1999 33,740,422 2000 35,712,011 2001 37,114,658 2002 45,631,284(1) 2003 52,062,671 (unaudited) The meal tax was increased from four and one-half to five and one-half percent, effecbve July 1, 2001, and the hotel room tax was increased from five and one-half percent to e~ght percent, effectwe November 1, 2001 Source C~ty D~rector of F~nance Military Four m~htary bases ~n V~rg~n~a Beach have an approximate combined payroll of $1 I bdhon for 35,000 armed services and c~vd~an workers Due to Operabon Iraq~ Freedom, local troop deployments are approximately double the typical levels, however, as of th~s writing, md~tary operabons have been qu~te successful, which may md~cate that no add~bonal deployments wdl be necessary and some of the deployed troops have returned Whde the first Gulf War d~d negatively ~mpact the local economy, the war ~mpact ~n 2003 wdl be less because the economy ~s relabvely more healthy (more jobs), the m~htary represents a smaller part of the economy and because the current level of deployment ~s approximately 11,000 below the level experienced dunng the first Gulf War Further, prospects remain bnght over a shghtly longer bme horizon Md~tary personnel are scheduled to receive a healthy pay ~ncrease for th~s year Defense spending ~s also projected to ~ncrease over the next several years Finally, the region has already been ~dent~fled as a s~te for centrahzed command and training for m~htary forces based ~n the Un~ted States, which means local md~tary downs~z~ng ~s unhkely Oceana Naval Air Stat/on Oceana Naval A~r Stabon ~s the Un~ted States Navy's largest Master Jet Base, home to most F/A 18 Hornet Squadrons on the east cost and the only a~r stabon ~n the Un~ted States w~th the F-14 Tomcat A total of 20 stnke/flghter squadrons w~th 310 a~rcraft are assigned w~th over 13,000 acbve duty personnel and over 2,100 c~whan employees The largest employer in Virgm~a Beach, the a~r stabon's annual payroll ~s over $600 mdhon A-19 Little Creek The Naval Amphibious Base, L~ttle Creek, the largest base of ~ts k~nd ~n the world, ~s the major operabng base for the amphibious forces of the Un~ted States Atlanbc Fleet L~ttle Creek has an annual payroll of $232 m~ll~on for approximately 7,700 m~htary personnel and 5,200 c~whan employees. Fort Story Fort Stow ~s an Army base estabhshed as a coast arbllery post ~n 1917 Fort Stow ~s the Army's Loglsbcs-Over-The-Shore (LOTS) and ~s the Army's only salt water punflcat~on training site. Fort Story ~s also ubhzed by Navy and Manne tenants and as a penod~c training s~te for acbve and reserve Army, Navy, Manne, and A~r Force un~ts and ROTC detachments. Fort Story has an annual payroll of approximately $70 2 m~lhon for 1,500 m~htary and c~whan employees. Dam Neck Fleet Combat Tra~mng Center, Atlanbc, Dam Neck's primary m~ss~on ~s to prowde training ~n the operation and employment of combat d~recbon and control systems. The average base populabon ~s 5,000 persons and the total m~htary and c~whan payroll ~s approximately $224 m~lhon Source Public Affairs Officers at each M~l~tary Base Medical Facilities In 2002, there are two major hospitals m the C~ty w~th a combined total of 432 beds. In add~bon, there were 19 emergency centers for medical assistance. Approximately 1,043 doctors utilize these hospitals and 314 dentists practice ~n the C~ty. Agribusiness In 2002, the economic ~mpact of the agncultural community was $51 8 m~lhon, based on products valued at $16 2 m~ll~on. There are 147 farms ~n the C~ty w~th approximately 32,980 acres of land under culbvabon Agncultural ~ncome ~n Wrgm~a Beach was down dunng 2002 because of adverse weather cond~bons and Iow crop pnces Wrg~n~a Beach has a horse populabon of approximately 2,300 ammals valued at $23 7 m~lhon, ranking V~rg~n~a Beach 10th ~n the state for total value of horses. A-20 Education Avadable w~th~n the C~ty ~s a w~de vanety of educabonal fac~hbes and programs, ~nclud~ng pubhc elementary, jumor and semor h~gh schools, prwate and parochial schools, and e~ght h~gher educabonal facd~bes In terms of public enrollment, the C~ty's pubhc school system ~s the largest c~ty school system the Commonwealth of V~rgm~a PUBLIC EDUCATION FACILITIES/PROGRAMS June 30, 2002 54 Elementary Schools 13 M~ddle Schools 11 Semor H~gh Schools 1 Techmcal and Career Educabon Center 1 Center for Effecbve Learning I V~rg~n~a Beach Central Academy 1 Center for the G~fted and Talented I Adult Learmng Center 1 Open Campus H~gh School 1 Kemps Landing Magnet School I Internabonal Baccalaureate Magnet Center(1) I Ocean Lakes H~gh School Math/Science Center(2) ¢) Located ~n Princess Anne H~gh School (2) Located ~n Ocean Lakes H~gh School Source Bus~ness Services Off~ce, V~rg~nla Beach Public Schools Public Schools. The C~ty's pubhc school March 31 average dady membership totaled 75,436 for the 2002-2003 school year, a shght decrease of 0 11 percent over the previous year Summanzed below are the March 31 average dady membership and annual percentage change for the school year 1993- 1994 to school year 2002-2003 PUBLIC SCHOOLS STUDENT POPULATION SCHOOL YEARS 1993-1994 TO 2002-2003 School Year Number of Students Percent Chanqe 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 74,251 75,264 75,898 76,265 76 805 76 949 76 773 76 O65 75,518 75,436 1.25% 1.36 84 48 .71 .19 (23) (92) (72) (11) Source Bus~ness Serwces Office, V~rg~ma Beach Pubhc Schools Private and Parochial Schools. There are 14 pnvate and parochial schools ~n the C~ty Approximately 5,800 students are enrolled ~n these schools A-21 Higher Education. V~rg~n~a Beach's h~gher educabonal resources ~nclude the V~rg,ma Beach H~gher Educabon Center (a partnership of Old Dominion and Norfolk State Un,vers~bes), V~rg~n~a Wesleyan College, T~dewater Community College, and Regent University V~rg~n~a Beach ~s home to branch campuses of George Washington Unwers~ty, the University of V~rg~n~a, V~rg~n~a Polytechnic Institute and State University and St. Leo's College T~dewater Community College, w~th total enrollment of more than 20,000, ~s a d~ws~on of the V~rg~n~a Community College System The V~rg~n~a Beach campus has an enrollment of approximately 10,000 Th~s two-year college offers general, occupational-technical, and unwers~ty parallel-college transfer education, representing the largest post-secondary mst~tut~on m the region. T~dewater Community College ~s a resource for business and industry to gain technical employees, as well as expertise for training and retraining programs for current employees. V~rgm~a Wesleyan College ~s a four-year hberal arts private college located on the V~rgmJa Beach/Norfolk boundary hne. It has an enrollment of approximately 1,400 students. Regent Umvers~ty has an enrollment of approximately 2,500 w~th graduate schools of Bus~ness Administration, Educahon, Law, Pubhc Pohcy, D~wn~ty, Psychology and Counseling, the College of Commun~cahons and The Center for Leadership Studies The V~rg~n~a Beach H~gher Education Center ~s a joint venture between the C~ty, Old Dominion University and Norfolk State University The C~ty donated 36 acres of land for an 84,000 square foot undergraduate center The facd~bes opened ~n the fall of 1999 and has an enrollment of approximately 2,400 students w~th a capacity of 5,000 Debuting ~n the fall of 2002, the Advanced Technology Center ~s a joint venture between T~dewater Community College, the V~rg~n~a Beach Pubhc Schools and the C~ty to provide technical training for h~gh school and college students pursuing pos~bons ~n fields such as telecommun~cabons, cop~er technology and computer programming and repair. In addition, the Center prowdes space for ex~stmg and new businesses to enhance the sk~lls of their employees The Center has a state-of-the-art theater for conferences, meetings and training sessions. The $23 m~ll~on center ~s the hrst of ~ts kind ~n the Commonwealth and received state funding of $10 mdhon w~th the C~ty providing the remaining funds. A-22 CITY INDEBTEDNESS AND CAPITAL PLAN Limitations on Incurrence of Debt Pursuant to the Consbtubon of V~rg~n~a (the "Const~tuhon") and the Pubhc F~nance Act of 1991, Chapter 26, T~tle 15 2, Code of V~rg~n~a of 1950, as amended, a c~ty ~n Wrg~n~a ~s authonzed to ~ssue bonds and notes secured by a pledge of ~ts full faith and credit and unlimited taxing power. The Consbtubon and the Pubhc Finance Act of 1991 also I~m~t the ~ndebtedness which may be ~ncurred by c~bes to 10 percent of the assessed valuation of real estate subject to local taxabon There ~s no requirement ~n the Conshtuhon or the Code of V~rg~n~a that the ~ssuance of general obhgat~on bonds of the C~ty be subject to approval of the quahfled voters of the C~ty at referendum As of June 30, 2003, the total assessed value of real property ~n the C~ty was $26,843,207,573 which translates ~nto a debt hm~t of $2,684,320,757 The C~ty's net obhgabons subject to debt hm~tabons as of June 30, 2003, totaled $584,630,485 and represented 21 8 percent of th~s hm~t The C~ty Charter further hm~ts the C~ty's power to create debt It provides that no bonds or notes (other than refunding bonds, revenue anhc~pabon notes, revenue bonds, and other obhgabons excluded from the C~ty's debt hm~t under Secbon 10(a) of Arbcle VII of the Consbtubon) shall be ~ssued unbl their ~ssuance has been authonzed by a majonty of the quahfled voters of the C~ty vobng ~n an elecbon on the quesbon. The C~ty Charter further prowdes, however, that the C~ty Council may authorize bonds or notes w~thout an elecbon ~n any calendar year ~n such amounts as shall not increase the total ~ndebtedness of the C~ty, as determined m the manner set forth ~n Secbon 10(a) of Arbcle VII of the Consbtubon, by more than $10,000,000 above the amount of such ~ndebtedness at the beginning of such calendar year For purposes of compubng the annual hm~tabon on the amount of bonds or other obhgabons that may be ~ssued w~thout an elecbon, authonzed and unissued bonds or other obhgabons which could have been ~ssued w~thout an elecbon on December 31 ~n the year they were authonzed may be ~ssued ~n a subsequent year w~thout affecbng the annual hm~tabon for such subsequent year In add~bon, refunding bonds wdl not be ~ncluded for purposes of determ~mng the amount of bonds or other obl~gabons that may be ~ssued w~thout an elecbon ~n any calendar year Contractual obhgabons of the C~ty other than bonds and notes are not ~ncluded w~th the annual hm~tabons descnbed hereto Debt Management Policies The C~ty has developed a senes of Debt Management Pohc~es to prowde a funcbonal tool for debt management and capital planning The pohc~es reiterate the C~ty's commitment to pnnc~ples such as rap~d pnnc~pal rebrement, maintaining sufficient working capital to avoid the use of short-term borrowing for operabng purposes, and the use of self-supporting or revenue-supported debt where appropnate. The pohc~es also estabhsh the following "target" levels for these key debt rabos Ratio Of Overall Net Debt To Estimated Full Market Value. Th~s raho indicates the relabonsh~p between the C~ty's debt and the taxable value of property ~n the C~ty. It ~s an ~mportant indicator of the C~t¥'s ab~hty to repay ~ts tax-supported debt, s~nce property taxes are a major revenue source. A small rabo indicates that the C~ty wdl be better able to w~thstand economic downturns It ~s the C~ty's policy goal that the computed value of this rabo should not exceed 3 5 percent of estimated full market value Overall Net Debt Per Capita. This ratio indicates the per capita debt burden and is a general md~cabon of the C~ty's debt burden A smaller rabo indicates a hghter burden It ~s the C~ty's pohcy goal that the computed value of th~s rabo should not exceed $1,500 per capita In the approved F~scal Year 2002-2007 Capital Improvement Program ("CIP"), City Council has authonzed additional debt for four new projects that w~ll ~mpact the current net debt per capita ratio whereby ~t w~ll exceed the $1,500 m future years However, all other key debt rabos w~ll remain below their threshold level A-23 The four projects are a new convenbon center, a new theater, add~bonal parking at the V~rg~n~a Manne Science Museum, and an open space ~n~bat~ve. These add~bonal projects wdl negat,vely ~mpact, ~n the short-term, the net debt per capita rabo Based on the present schedule of acbwbes, the C~ty exceed the net debt per capita raho of $1,500 beginning ~n F~scal Year 2004. At ~ts peak ~n F~scal Year 2007, the debt per capita rat,o ~s esbmated to approach $2,100 net debt per capita due to the ~nclus~on of the above projects. In the long-term, beyond the current CIP, the net debt per capita rabo ~s projected to track downward and to return to a level w~thm the current pohcy I~m~t. C~ty Councd has provided the resources needed to support these projects through ~ncreased taxes Whde much wdl hinge on the success of the convenbon center and ~ts abd~ty to generate add~bonal revenue, ~t ~s felt that the add~bonal level of debt can be adequately supported despite the C~ty exceeding ~ts net debt per capita rabo. Ratio Of Debt Per Capita To Per Capita Personal Income. Th~s ratio ~s a measure of the capacity of c~bzens to finance tax-supported debt. A Iow rabo means that taxes required to repay debt represent a smaller porhon of the average c~bzen's ~ncome. It ~s the C~ty's pohcy goal that debt per capita should not exceed 6 5 percent of per capita ~ncome Ratio Of Annual Debt Service To General Government Expenditures. Th~s rabo measures the C~ty's ab~hty to repay debt w~thout hampenng other C~ty services. A small rabo ~nd~cates a lesser burden on the C~ty's operating budget Th~s computabon as a pohcy goal should not exceed 12 5 percent KEY DEBT RATIOS Fiscal Year Ended June 30 June 30 1999 2000 2001 2002 2003 2003(6} Overall Net Debt and Lease Obhgat~ons¢) $524,144,978 $558,142,477 $559,258,300 $609,472,861 $607,274,940 $772,274,940 Overall Net Debt Per Capita(2) $1,242 $1,312 $1,307 $1,411 $1,392 $1,770 Rabo to Estimated-Full Value(3) 2 6% 2 6% 2 5% 2 5% 2 5% 3 1% Rabo of Per Capita Debt to Per Capita Income(a) 4 30% 4 30% 4 07% N/A N/A N/A Rabo of Annual Debt Service to General Government Expenditures 8 7% 7 9% 7 9% 7 7% 7 7%(s) 7 7 (4) Includes bonded debt and other long term obhgat~ons charged to the General Fund and V~rg~n~a Manne Science Museum Enterpnse Fund Does not ~nclude debt charged to the Water and Sewer or Storm Water Enterpnse Funds (2) Populabon esbmates as of each January 1st by Qty Planning Department, except for 2000, which ~s by the U S Department of the Census, and FY 2001, 2002 and 2003, which are esbmated (31 Real property ~s assessed at 100 percent of fair market value (4) Per capita ~ncome figures from U S Department of Commerce/Bureau of Economic Analys~s for years subsequent to 2000 are not available (si Estimated, based on FY 2003 Budget (61 Includes the Senes 2003A Bonds Source C~ty F~nanc~al Statements A-24 Outstanding Debt and Lease Obligations Informabon on the C~ty's ~ndebtedness ~s presented ~n the following tables Included ~s mformabon on net and overlapping tax-supported debt, rapidity of pnnc~pal rebrement, selected debt service schedules, and mformabon on capital lease obhgabons OVERALL NET DEBT AND OTHER LONG TERM OBLIGATIONS As of June 30, 2003 General Obhgabon Bonds(j) Water and Sewer Revenue Bonds(2) Storm Water Revenue Bonds(3) Capital Leases/COPs(4) Agnculture Reserve Program Installment Purchase Agreements(5) Wrgm~a Beach Development Authonty Long-Term Obhgat~ons(6) $564,167,398 115,173,408 9,475,OOO 21,054,177 20,463,087 31,935,000 $762,268,07O Plus. 2003A Pubhc Facd~ty Revenue Bonds Less Water and Sewer Revenue Bonds(2) General Obhgahon Bonds for Water and Sewer Purposes(?) General Obhgabon Bonds for Storm Water Purposes¢) Storm Water Revenue Bonds(3) Agriculture Reserve Program Installment Purchase Agreements(5) $115,173,408 4,945,000 4,936,635 9,475,OOO 20,463,087 165,000,000 154,993,130 Overall Net Debt and Long Term Obhgabons $772,274,94O Includes $4,945,000 general obl~gabon debt for water and sewer purposes and $4,936,635 general obhgabon debt for storm water purposes Water and sewer revenue bonds are not secured by a pledge of the C~ty's full faith and credit and unlimited taxing power These bonds are secured solely by the net revenues of the water and sewer system Storm water revenue bonds are not secured by a pledge of the Qty's full faith and credit and unlimited taxing power These bonds are secured solely by the net revenues of the storm water ubl~ty system A full descnpbon of the Capital Leases and Certificates of Parbc~pabon can be found ~n the subsecbon "Assets Acquired and F~nanced Under Capital Leases" here~n Payments on Certificates of Parbc~pabon are subject to annual appropnahon by Cfty Councd Th~s amount also ~ncludes the one remaining year of debt service on an unsecured 25th Street property loan A description of this loan is included under the "Other Long-Term Obhgabons" secbon hereto Represents ~nstallment purchase agreements which are general obhgabons of the Qty Interest and principal payments are pa~d from a dedicated porbon of real estate taxes Pnnc~pal payments wdl be made from matunng zero coupon Treasury secunbes purchased from the dedicated porbon of real estate taxes These obhgabons are descnbed ~n the secbon "Agncultural Program" hereto Represents other long term obl~gabons of the C~ty which do not meet the bonded debt or capital lease cntena The C~ty's payment obllgabons are subject to annual appropnabon and support revenue bonds ~ssued by the C~ty of V~rg~n~a Beach Development Authonty for the benefit of the C~ty These obl~gabons are descnbed ~n the secbon "Other Long-Term Obl~gabons" here~n General obhgabon bonds ~ssued for water and sewer purposes, debt service on these bonds ~s pa~d from revenues of the water and sewer system even though such bonds are secured solely by the full faith and credit of the C~ty and subject to the consbtubonal debt hm~t General obhgat~on bonds ~ssued for storm water purposes, debt service on these bonds ~s pa~d from revenues of the storm water system, even though such bonds are secured solely by the full faith and credit of the C~ty and subject to the conshtutlonal debt I~m~t Source C~ty Department of F~nance A-25 Authorized but Unissued Bonds The C~ty currently has authonzed but $37,140,641 revenue bonds, as shown below*: unissued $141,652,593 *Does Purpose. Amount Security Pubhc Improvement $ 7,052,593 General Obhgabon Public Improvement 15,803,830 General Obhgat~on Public Improvement 19,596,170 General Obligation Public Improvement 37,300,000 General Obl~gabon Pubhc Improvement 61,900,000 General Obhgabon Water and Sewer 3,696,002 Revenues Water and Sewer 4,703,619 Revenues Water and Sewer 8,524,487 Revenues Water and Sewer 5,208,093 Revenues Storm Water Utd~ty 5,028,440 Revenues Storm Water Utd~ty 5,300,000 Revenues Storm Water Utd~ty 3,900,000 Revenues Storm Water Ubhty 200,000 Revenues Storm Water Utd~ty 580,000 Revenues not include the bonds approved at referendum for the Lake Gaston Project Source CIty Department of Finance general obl~gabon bonds and Authorization Year Manner 1999 Councd 2000 Councd 2001 Councd 2002 Councd 2003 Councd 1999 Councd 2000 Councd 2001 Council 2002 Council 1998 Councd 1999 Councd 2000 Councd 2001 Councd 2003 Council A-26 m>. n- Z LI. z ~J30 0'3~ 03 03 v--L~ CO 0 (,0~ 03 I.~0 0 0 0 0 0 03 CO I'-.. 03 0 O0 0 CO L~ 03 I.~~P '~-- 0'~0 0 0 C:)0 0 ' O0 ~D ~0 ~0 0 ~W 0 0 I~ ~:~0 C~I tO I~ 0 0 0 ~0 ~ 0 ED ~0 ~0 ~D ~ LO O~ ~0 i~ 0 ~ 0 O~ ~0 0 I~ 0 ~I ~1 LO o 0 0 0 0 0 0 o 0 0 0 0 0 03 ¢0 0 o~ o o o o o o ,7, ~ '7 -- 0 0 0 0 0 CD 0 0 0 0 0ED 0 0 0 0 0 0 ED 0 0 I-- 0 v- §o oO ~z n-o z~> I- ;I ;I ~ ~ ~ 0 0 ~ ~ ~ 0 ~ co~oo ~ ~ ~ 0 0 ~~ooo~3~o8o8ooooo8 0 0 0 0 0 ~~~~~~o8o8ooo~ 80800 0 o i , , i , i , i , i ! ! i ! , i i i , § § °°°§§§°8°8°i o oo8§ §888 8o8o88 ,8 880 ..... 8888888§oooo§o8ooooo, ooooooo 8888 8d88888 ~ ~ ~ ~ ° 8 ° °o o o ~g~~~ ............. ~ ~ ~ 0 0 0 0 0 ' '' ' ' ' ' ' ' ' ' ' ' ~~88°8 ~ 0 ~°~~o~~°~~8°808°~ ~ 0 ~~ ~ ~ ~ ~ ~ o 0 o ~~o~o~~ ~ ~ 8~ ~ o ~ o ~ ~ 8 o~ ~ ~ o ,~ 0 0 0 0 0 0 ~ ~ ~ ~ ~ ~ ~ ~ o o o o ~ o o? o o ~ o ~ RAPIDITY OF PRINCIPAL RETIREMENT ALL GENERAL OBLIGATION BONDS(i) June 30, 2003 RAPIDITY OF PRINCIPAL RETIREMENT OVERALL NET DEBT AND OTHER LONG-TERM OBLIGATIONS(2) June 30, 2003 Percentage of Maturing Amount Maturing Amount Total Debt Within Maturing Percentage Within Maturing Outstanding 5 years $241,249,256 42.76% 5 years $274,852,935 35 59% 10 years 418,840,078 74 24% 10 years 498,574,637 64 56% 15 years 522,282,398 92 58% 15 years 653,869,940 84.67% 20 years 564,167,398 100 00% 20 years 760,394,940 98 46% (1) Includes general obligation bonds additionally secured by water and sewer and storm water ubl~ty revenues and general obl~gabon bonds not secured by water and sewer revenues but which are serviced annually from those revenues Does not ~nclude capital leases, Cerbflcates of Partlc~pabon or other non-general obhgat~on indebtedness (2) As descnbed on page A-25 including Senes 2003A Bonds Water and Sewer System Debt The C~ty currently has outstanding two types of secunbes to finance capital ~mprovements to ~ts water and sewer system (1) Prior to 1977 and ~n 1982, the C~ty ~ssued general obhgabon pubhc ~mprovement bonds that were not secured by a pledge of the net revenues of the water and sewer system As of June 30, 2003, $4,945,000 of these bonds were outstanding (2) Pursuant to Arbcle VII, Sec. 10(a)(3) of the Consbtubon of V~rg~ma, the C~ty has ~ssued water and sewer revenue bonds which are secured solely by the net revenues of the water and sewer system. As of June 30, 2003, $115,173,408 of these bonds were outstanding Storm Water Utility System Debt The C~ty has ~ssued two types of secunbes to finance capital ~mprovements to ~ts storm water ubhty system (1) Pnor to 1995, the C~ty ~ssued general obhgabon pubhc ~mprovement bonds that were not secured by a pledge of the net revenues of the storm water ubhty system As of June 30, 2003, $4,936,635 of these bonds were outstanding (2) Pursuant to Arbcle VII, Sec. 10(a)(3) of the Consbtubon of V~rg~ma, the C~ty has ~ssued storm water ubhty revenue bonds which are secured solely by the net revenues of the storm water ubhty system As of June 30, 2003, $9,475,000 of these bonds were outstanding It ~s the C~ty's pohcy to serwce all debt ~ssued for storm water purposes by revenues from the storm water uhhty system Agricultural Reserve Program On May 9, 1995, C~ty Council adopted an ordinance estabhsh~ng the Agncultural Reserve Program ("ARP") The primary purpose of the ordinance ~s to promote and encourage the preservabon of farmland ~n the rural southern port,on of the C~ty Through ARP, the C~ty acquires development r~ghts ~n designated areas w~th~n the southern porbon of the C~ty through the purchase of agncultural land preservabon easements Landowners who meet certain el~g~b~hty cntena may sell an easement to the C~ty A-29 wh~le holding fee s~mple btle to the land and continuing to farm The C~ty acquires these development nghts by executing installment purchase agreements w~th the landowners These agreements provide for the payment of the pnnc~pal balance of the agreement ~n a s~ngle installment due approximately twenty-five years after execution of the agreement. Interest on the unpaid pnnc~pal balance ~s payable sem~-annually. C~ty Councd has dedicated a 1Y2 cent ~ncrease ~n the real estate tax (approved May 9, 1995) to finance the program These obl~gabons consbtute ~ndebtedness w~th~n the meaning of Art,cie VII, Sechon 10 of the Wrgm~a Consbtuhon and w~ll be general obhgabons of the C~ty, pledging the full faith and credit and unhm~ted taxing power of the C~ty. By policy, ~nterest and pnnc~pal payments wdl be pa~d from a dedicated porhon of real estate taxes. Pnnc~pal payments wdl be made from matunng zero coupon Treasury secunbes purchased from the dedicated porbon of real estate taxes As of June 30, 2003, 50 installment purchase agreements totahng 6,453 acres at a total purchase pnce of $20,463,087 have been executed. C~ty Councd has approved 4 add~bonal apphcabons totahng approximately 219 acres w~th a total approved purchase price of $1,497,732. These are expected to close ,n the next few months. An add~bonal 9 apphcabons totahng 469 acres are being processed by the C~ty, valued at approximately $2,753,081. Tax Increment Financing The C~ty ~s one of the first m the Commonwealth of V~rgm~a to use Tax Increment F~nanc~ng ("TIF") as a means of financing certain capital projects, usually mvolwng one or more pnvate or public partners Tax Increment Financing ~s authonzed under Secbon 58.1-3245 through 58 1-3245.5 of the Code of V~rgin~a, ongmally enacted ~n 1988. The C~ty has established TIF d~stncts to fund ~ts share of three ~nvestment partnerships, the Lynnhaven Mall Expansion, the Sandbndge Beach Restorabon Program and the Town Center of V~rg~ma Beach. Lynnhaven Mall Expansion The area of the C~ty around Lynnhaven Mall was estabhshed as a TIF d~stnct by ordinance approved by C~ty Council on June 9, 1998. The expansion of the third largest shopping mall m V~rgm~a wdl accommodate several upscale stores, a new entertainment complex and a themed restaurant. The C~ty ~s comm~tbng $11.5 mdl~on m future real estate taxes for a parking facility and related ~mprovements to leverage a $100 mdhon ~nvestment from the New York State Teachers' Retirement System The expansion wdl increase the mall by 300,000 square feet, which ~s equ,valent to one-third ~ts original s~ze The C~ty w~ll benefit from ~ncreased retad, restaurant, ubhty and business I~censes taxes As of June 30, 2003, $3,782,992 ~n TIF revenues have been collected ~n the Lynnhaven Mall TIF Revenue Fund Under the agreement w~th the developer, the C~ty wdl provide certain TIF revenues to the developer, ~f avadable, but ~s not responsible for the ~ssuance of any debt Sandbr~d.qe Beach Restorabon Proqram' The Sandbndge area of the C~ty was estabhshed as a TIF d~stnct by ordinance approved by C~ty Councd on December 1, 1998 An ~mportant real estate and aesthebc asset to the C~ty, th~s area has long battled sand erosion The C~ty conbnues to pursue a mulh- front strategy of funding sand replenishment, ,nclud~ng seeking federal funds, using local funds, and estabhsh~ng a Special Servme D~stnct The use of TIF ~s another method to ensure stab~hty to th~s area and to ensure that the primary beneflc~anes of the program fund the bulk of the ~mprovements As of June 30, 2003, $4,450,284 ~n TIF revenues has been collected ~n the Sandbndge Restorabon Program The Town Center of V~rqm~a Beach' The southern part of the Pembroke area of the C~ty was estabhshed as a TIF d~stnct by ordinance approved by C~ty Council on November 23, 1999 The d~str~ct ~s called Central Business D~stnct-South When fully developed, ~t ~s projected that the d~stnct wdl span 25 acres w~th 850,000 square feet of "Class-A" office space, 750,000 square feet of upscale retad space and luxury apartments The Town Center w~ll be supported by free pubhc parking for over 4,000 vehicles m enclosed parking garages set w~th~n the center The C~ty anbc~pates comm~tbng $13 9 mdhon to prowde the pubhc infrastructure and $42.2 mdhon of TIF revenues to pay for the parking garages, for a total C~ty ~nvestment of $56 1 mdl~on, after reimbursement for certain land purchases necessary for the Town Center's development The pubhc parking garages will be financed using revenue bonds ~ssued by the A-30 V~rg~ma Beach Development Authority, secured by a support agreement from the C~ty The source of the C~ty payments w~ll be TIF revenues, although such TIF revenues w~ll not be pledged as secunty The first senes of bonds for the pubhc garage m Phase I of the development were ~ssued on June 14, 2002 (see a descnpbon ~n "Other Long-Term Obhgat~ons" below). The C~ty's ~nvestment w~ll leverage approximately $155 to $165 mdhon of pnvate sector investment. The C~ty w~ll benefit from increased personal property, retail, hotel, admissions, restaurant, uhhty and bus~ness hcenses taxes As of June 30, 2003, $1,764,284 m TIF revenues have been collected ~n the Central Bus~ness D~stnct-South Revenue Fund. Assets Acquired and Financed Under Capital Leases Non-water and sewer capital assets consisting of commumcabons equipment and systems, computer equipment and systems, prepaid support and maintenance, an HVAC system, and other capital assets acquired under capital leases on which the C~ty, as of June 30, 2003, had principal outstanding of $2,119,177 In add~bon, as of June 30, 2003, the C~ty had outstanding $18,760,000 Refunding Cerbflcates of Parhc~pabon, Senes of 1993 Proceeds of the 1993 Refunding Certificates were used to refund the Senes 1990 Cerbflcates of Parbc~pabon and the Ser~es 1987 Cerbflcates of Part~c~pabon, which were ~ssued to finance the acqu~s~hon of real property to expand the C~ty's Mumc~pal Center Complex and to construct a Jud,c~al Center Complex, respecbvely These leases contain non- appropnabon clauses and therefore are not considered debt for purposes of calculabng obhgat~ons subject to the consbtuhonal debt hm~t. The esbmated scheduled capital lease payments on non-water and sewer lease obhgabons for the fiscal years ending June 30 are as follows Capital Certificates of Leases Participation Total 2004 $1,1 31,822 $ 2,906,587 $ 4,038,409 2005 823,183 2,898,435 3,721,61 8 2006 280,308 2,893,027 3,173,335 2007 4,802 2,890,765 2,895,567 2008 and later 11,491,855 11,491,855 In add~bon, the C~ty has entered ~nto an unsecured borrowing of $1,375,000 from Bank of America, N A., the repayment of which ~s a General Fund obhgabon of the C~ty, subject to annual appropriation. Annual principal payments are due through 2004 and interest rates w~ll vary over the term of the borrowing Pnnc~pal outstanding on th~s loan as of June 30, 2003, ~s $175,000 Interest ~s currently fixed at 0 41% unbl April 1, 2004, which ~s the maturity date of the loan The proceeds of th~s borrowing were used to reimburse the C~ty for the cost of acqu~nng a parbng lot located at 25th Street and Pacific Avenue ~n the C~ty's resort area Other Long-Term Obligations On February 24, 1998, the C~ty of V~rg~ma Beach Development Authority ~ssued $9,800,000 Lease Revenue Bonds payable solely from certain rental payments made by the C~ty under an operabng lease The obhgabon of the C~ty to make rental payments is subject to annual General Fund appropnahons by the C~ty Council The maximum annual rent payment under the lease ~s $862,212 The Lease Revenue Bonds financed the costs of acqu~nng and construcbng a Social Services Building to be used by the C~ty to house ~ts Social Services Department Pnnc~pal outstanding on th~s agreement as of June 30, 2003, ~s $8,080,000 On June 14, 2002, the C~ty of V~rg~ma Beach Development Authonty ~ssued ~ts $20,815,000 Pubhc Facility Revenue Bonds, Senes 2002A, and ~ts $3,040,000 Taxable Pubhc Facility Revenue Bonds, Ser~es 2002B, to finance the acqu~s~bon of a pubhc parking fac~hty and land for a pubhc plaza ~n the Town Center development These bonds are I~m~ted obhgat~ons of the Authonty, payable solely from certain payments made by the City pursuant to a Support Agreement between the Authority and the C~ty The A-31 obhgabon of the C~ty to make such payments ~s subject to appropnabon by the C~ty Councd of funds sufficient for such purpose Pnnc~pal outstanding on these bonds as of June 30, 2003, ~s $23,855,000 Th~s ~ssuance of $165,000,000 Pubhc Facd~ty Revenue Bonds Senes 2003A, and any other debt ~ssued by the C~ty of V~rg~n~a Beach Development Authonty under the Master Agreement of Trust dated September 1,2003, wdl be ~ncluded as other long term obhgabons Overlapping Debt The C~ty ~s autonomous from any county, town, or other pohbcal subd~ws~on There are no overlapping junsd~cbons w~th debt outstanding for which C~ty residents are hable. Short-Term Borrowing The C~ty does not borrow on a short-term bas~s for working capital purposes. The C~ty's pohcy ~s to maintain the General Fund balance at a level that provides sufficient cash flow for working capital purposes Debt History The C~ty has never defaulted on ~ts general obhgat~on bonds, water and sewer system bonds, storm water utihty bonds or capital lease obhgabons Payment Record The City has never defaulted ~n the payment of e~ther pnnc~pal of or ~nterest on any ~ndebtedness. Comprehensive Plan The C~ty's most recent Comprehensive Plan was adopted on November 4, 1997. Among some of the key planmng polm~es embodied m th~s Plan are urban and rural growth management strategies, including the Green L~ne concept, economic development opportumt~es, transportation and other pubhc facility ~mprovements, care of the enwronment, housing, h~stonc resource management, neighborhood preservabon and community aesthebcs By adopbng these key prows~ons of the Comprehensive Plan, the C~ty has committed ~tself to advancing sound planning pohc~es that ensure a fair and workable balance between the supply of pubhc service dehvery systems and the demand placed on those systems by ex~sbng and future land uses The comprehensive planning policies of the C~ty are designed to achieve enhanced and manageable land development and redevelopment w~th~n a defined urban service area (north of the Green L~ne) and Transit,on Area The development of urban ~nfrastructure ~s focused on serving future growth creabng h~gher quahty land uses, thereby expanding the C~ty's taxable revenue base w~thout compromising the level of service prowded by the pubhc ~nfrastructure Another complementary strategy prowded by the Green L~ne and other related comprehensive planning pohc~es ~s to check sprawhng development By preventing future sprawl through the designation of areas for appropriate urban development, the C~ty avoids net negabve fiscal ~mpacts for related capital and operahng expenses that are too often hnked to such development patterns The land use planning guidance prowded by the Comprehensive Plan along w~th the strong pubhc demand to I~ve and work ~n V~rgm~a Beach can continue the value of growth ~n V~rg~n~a Beach ~nto the foreseeable future In add~bon to adequate capacity for growth ~n the northern secbon of the C~ty, the C~ty's land use pohc~es prowde reasonable levels of rurally compabble growth ~n the southern part of the C~ty The Rural Preservabon element of the Comprehensive Plan and the Agricultural Reserve Program, adopted by C~ty Council m 1995, are major tools to promote the preservabon of farmland and the rural way of hfe In accordance w,th V~rg~ma state law that requires local governments to reassess their Comprehensive Plans at least once every five years, the C~ty ~s ~n the process of rewew~ng th~s document and anhc~pates complebon of ~ts update ~n late fall 2003 The focus of th~s update reaffirms the A-32 ~mportance of the Green L~ne, the protecbon of our rural areas and open spaces and the need to provide for well-managed growth m designated areas located north of the Green L~ne The Comprehensive Plan ~s a dynam~c ~nstrument and C~ty Councd periodically rewews, enhances and amends the Plan when appropriate S~nce 1997 there have been four specific area planning documents that have been adopted by C~ty Councd and added to the Comprehensive Plan by reference These are the Shore Dnve Corridor, the Lask~n Road Corridor, the Pnncess Anne Corridor and a refinement of the planning pohc~es affecting the Transition Area In add~bon, C~ty Councd has amended the Comprehensive Plan on three occasions to enhance and clarify the plan These amendments ~nvolved shorehne erosion pohc~es for shoreline management, design standards for parking garages and pohc~es relabng to groundwater resource protecbon In March 2001, the Chesapeake Bay Preservahon Area Board found the V~rg~n~a Beach Comprehensive Plan to be ~n comphance w~th the V~rg~n~a regulabons relating to protection of the Chesapeake Bay S~nce 1971, the C~ty Councd has penod~cally rewsed and adopted the C~ty's Master Transportabon Plan, as needed, to meet the need for an efficient and cost-effecbve roadway system Th~s pohcy document, which ~s a component of the Comprehensive Plan, descnbes the charactensbcs and establishes transportation planning pohc~es for V~rg~n~a Beach The Plan also prowdes planning guidance for b~keways, scenic easements, and other s~mdar features related to the C~ty's major roadway system Decisions affecbng the ~mplementabon of land use and transportabon pohc~es are based, ~n large measure, upon the guidance provided ~n the C~ty's Comprehensive Plan and Master Transportabon Plan. Capital Improvement Program The C~ty's s~x-year Capital Improvement Program ("CIP") provides for ~mprovements to the C~ty's pubhc facd~bes, along w~th the means of financing these ~mprovements The first year of the program consbtutes the capital budget for the current fiscal year, the rema~mng years serve as a planning guide The CIP brae table coincides w~th that of the Operating Budget, and both are presented to C~ty Council m early Spnng The approved ClP ~s the result of a process that balances the need for pubhc facd~bes against the fiscal capabd~ty for the C~ty to prowde for these needs It ~s the C~ty's pohcy to fund ~nd~wdual capital projects of less than $250,000 through General Fund appropnat~ons (pay-as-you-go financing) F~scal Years 2004-2009 CIP On May 13, 2003, the C~ty Councd approved the F~scal Year 2004-2009 CIP. When compared to F~scal Years 2003-2008 CIP, the program reflects a 5 5% ~ncrease ~n total costs. The total s~x-year program aggregates $1 841 bdhon, a $95 2 mdhon ~ncrease from the Rscal Years 2003-2008 CIP The CIP further ~ncludes a $255 5 mdhon ubht~es program, a $1 159 bdhon for General Government and a $426 7 mdhon school ~mprovements program The cost of C~ty general ~mprovements ~s ~ncreas~ng by approximately 6% and the Ubht~es program ~s ~ncreas~ng by approximately 3% The approved CIP assumes use of $703 4 mdhon of bonded debt and $304 9 mdhon of lease-purchases The CIP ~ncludes a d~scuss~on of the development plan for the Trans~bon Area, ~ e the land area d~rectly below the Green L~ne, which ~s a buffer between the urban and rural serwces areas of the C~ty W~th~n th~s area, I~m~ted and cond~bonal growth opportun~bes are recommended consistent w~th the adopted Comprehensive Plan and C~ty Council's economic wtahty policies The Trans~bon Area Report ~denbfles the ~nfrastructure needs of the area w~th a proposed I~m~t of 3,000 add~bonal res~denbal un~ts and the revenues generated to support the needed ClP projects Ten roadway projects have been ~denbfled for the Trans~bon Area at a proposed cost of approximately $60 mdhon. Storm water projects w~ll be constructed as development occurs and these projects wdl be funded through the storm water fees charged to residents Pnvate developers wdl construct and pay the cost to extend pubhc water and sanitary sewer services to development ~n the Transition Area Trans~hon Area projects are not funded m the CIP but wdl be funded as development creates the need The Trans~bon Area financing plan ~nd~cates that revenues generated from the development of the area w~ll be sufficient to fund the necessary ~nfrastructure A-33 For F~scal Year 2004, C~ty Councd approved ~ncreases ~n sewer and storm water rates to prowde funding for ~nfrastructure maintenance projects ~n these areas. The sanitary sewer ~ncrease of $1.07 per month bnngs that charge to $14 34 per month. The storm water rates were ~ncreased by approximately $3.65 per year to a total of $55.12 per year The F~scal Year 2004 Capital Budget represents $181 6 mdhon of the $1.841 bdl~on s~x-year CIP It anticipates $15.6 mdl~on for ubht~es and $166.0 mdhon for pubhc ~mprovements, ~nclud,ng $39 9 mdl~on for schools and $85 3 mdhon for roadways and buddings. Funding for the Capital Budget ~s planned to be prowded from the following sources $52 4 m~lhon from general obhgat~on bonds; $.6 mdhon from storm water utd~ty revenue bonds, $21.1 mdl~on from General Fund appropnat~ons and Fund Balances; and $107.5 mdl~on from other sources The following table compares total appropnabon authonty for the s~x-year F~scal Years 2004-2009 CIP to the prewous s~x-year F~scal Years 2003-2008 CIP The amounts shown represent the total amount of appropnabons required (appropriations to date plus appropnahons made by the F~scal Year 2004 Capital Budget plus appropnabons not yet made but planned for Fiscal Years 2005-2009) to fund the CIP projects They represent total esbmated project costs (although future years' estimates are necessardy very prehm,nary), but do not equal the amount of debt financing to be used (since a variety of funding sources wdl be used) Future years' CIP amounts are subject to C~ty Councd approval and may be rewsed FY 2004-2009 CIP VS. FY 2003-2008 CIP Total Program ClP % of ClP % of Cateqory (FYs 2004-2009) Total (FYs 2003-2008) Total Chan.qe in $ Chan.cle in % Schools $426,659,340 23% $404,403,642 23% $22,255,698 5 5% Roadways 306,089,868 17 275,009,087 16 31,080,781 11 3 Economic & Tounsm Development 352,908,440 19 325,136,706 19 27,771,734 8 5 Buddings 303,654,004 16 305,739,644 18 (2,085,640) (0 7) Coastal 78,969,424 4 74,785,126 4 4,184,298 5 6 Parks & Recreabon 1,17,186,150 6 113,300,857 6 3,885,293 3 4 Subtotal - Public Improvement 1,585,467,226 86 1,498,375,062 86 87,092,164 5 8 Storm Water 81,864,560 4 76,683,760 4 5,180,800 6 8 Water & Sewer 1.73,656,389 9 170,765,756 10 2,890,633 I 7 Subtotal - Utd~tles 255,520,949 1._~4 247,449,516 14 8,071,433 3 3 Total $1,840,988,175 100% $1,745,824,578 100% $95,163,597 5 5% As shown above, the total amount of capital projects ~ncluded ~n the current s~x-year CIP has ~ncreased by $95 2 m~lhon versus the prewous s~x-year CIP Since th~s table compares "rolling" s~x-year per~ods, percentage changes ~n ~nd~wdual categories of projects can vary markedly. The F~scal Years 2004-2009 CIP rehes upon charter bond authonty for general obhgat~on bonds assumed ~n the CIP The uses by project categones and major funding sources for the total program as noted ~n the CIP are shown on the following page A-34 CAPITAL IMPROVEMENT PROGRAM USES AND SOURCES OF FUNDS SUMMARY FISCAL YEARS 2004 THROUGH 2009 USES Public Improvements School Projects Roadways Buddings(1) Parks & Recreabon Projects(2) Coastal Economic & Tourism Development(3) Subtotal- Pubhc Improvements Ubht~es Water Ubhty Sewer Utlhty Storm Water Subtotal- Ubht~es TOTAL USES Authorized 2003-04 Unappropriated Esbmated in Prewous Capital Subsequent Total Costs Fiscal Years Budget Five Years $ 426,659,340 $186,881,094 $ 39,927,161 $199,851,085 306,089,868 149,316,436 23,589,140 133,184,292 303,654,004 173,050,158 61,741,974 68,861,872 117,186,150 84,707,380 11,567,515 20,911,255 78,969,424 49,943,573 5,315,000 23,710,851 352,908,440 296,682,222 23,903,603 32,322,615 $1,585,467,226 $940,580,863 $166,044,393 $478,841,970 $ 51,958,164 $ 25,465,164 $ 2,430,000 $ 24,063,000 121,698,225 71,870,454 6,218,771 43,609,000 81,864,560 42,822,148 6,918,144 32,124,268 255,520,949 140,157,766 1.5,566,915 99,796,268 $1,840,988,175 $~LDJ~;}~9~,9 $181,611,308 $578,638,238 SOURCES City Bond Issues General Obhgabon Bonds(4) Water & Sewer Revenue Bonds Storm Water Revenue Bonds Subtotal - C~ty Bond Issues General Fund Appropnabons and Fund Balances(5) Other F~nancmg Sources Storm Water Ubhty Fund Appropnabons Water & Sewer Fund Appropnabons(6) Informabon Technology Appropnabons Parks & Recreation Fund Appropnabons Community Development Rre Programs Fund Golf Course Fund Appropnabons Tounsm Growth Investment Fund C~garette Tax VDOT Maintenance Reimbursement Law Enforcement(7) Sale of Property(s) Revenue from Parking Federal, State, &Pnvate Contnbubons(9) Lease Purchases¢°) Sandbndge Special Service D~stnct Fund Other Locahbes Subtotal - Other Sources of F~nancmg TOTAL SOURCES $ 582,276,803 $270,976,803 $52,400,000 $258,900,000 98,919,864 49,997,864 0 48,922,000 22,250,529 16,480,529 580,000 5,190,000 $703,447,196 $337,455,196 $52,980,000 $313,012,000 288,537,068 191 , 665,857 21,132,747 75,738,464 53,148,565 21,376,153 6,338,144 25,434,268 67,834,086 41,135,315 7,948,771 18,750,000 1,083,874 911,000 172,874 0 25,049,641 12,536,935 1,912,472 10,600,234 75,000 75,000 0 0 2,113,424 2,113,424 0 0 2,287,664 1,767,664 60,000 460,000 6,444,936 6,444,936 0 0 39,014,898 17,394,960 3,603,323 18, 016,615 68,075,048 30,937,618 5,895,460 31,241,970 48,217,080 26,105,782 5,638,000 16,473,298 18,769,239 10,450,492 8,318,747 0 5,000 5,000 0 0 174,808,074 94,433,018 33,918,405 46,456,651 304,882,365 258,500,000 32,992,365 13,390,000 9,894, 431 829,693 0 9,064,738 27,300,586 26,600,586 700,000 0 849,003,911 551,617,576 107,498,561 189,887,774 $1.840,988.175 $1,080,738,629 $181.611,308 $578.638,238 NOTE A As set forth m the secbon "The Projects" ~n the Official Statement, the Projects financed with the proceeds of the Senes 2003A Bonds are part of a larger group of projects to be financed w~th several senes of pubhc facd~ty revenue bonds included ~n the CIP The uses/sources of such projects are d~stnbuted as follows (1) Of the $304 mdhon total Budding costs, $110,824,565 represents such project costs (2) Of the $117 mdhon total Parks & Recreabon costs, $54,090,000 represents such project costs (3) Of the $353 mdhon total Economic &Tounsm Development costs, $223,836,800 represents such project costs (4) Of the $582 m~ll~on total General Obhgabon Bonds, $7,990,000 ~s expected to be apphed to fund such projects (5) Of the $289 mdhon total General Fund Appropnat~ons and Fund Balances, $22,542,000 is expected to be apphed to fund such projects (6) Of the $68 mdhon total Water & Sewer Fund Appropnat~ons, $3,080,000 ~s expected to be apphed to fund such projects (7) Of the $48 mdhon total Law Enforcement funding, $15,732,000 ~s expected to be apphed to fund such projects (8) Of the $19 mdhon total Sale of Property funding, $3,525,000 ~s expected to be apphed to fund such projects (9) Of the $175 mdl~on total Federal, State, &Pnvate Contnbubons, $31,000,000 ~s expected to be apphed to fund such prolects (lO) The enbre Lease Purchase funding, $304, 882,365 is expected to be apphed to fund such projects NOTE B The CIP provides $388,751,365 of the total program of $410,551,365 The rema~mng $21,800,000 is funded through the tax increment financing program for the Town Center and represents the approximate costs of the two Town Center garages A-35 Prior Year CIPs - Actual Capital Project Expenditures The following table presents a summary of actual capital project expenditures by category for F~scal Years 2000 through 2003 The expenditures for each year represent numerous funding sources (bonds, general appropriations, fund balances, retained earmngs, state and federal sources, etc ) and unspent funds from various prior year capital budgets ACTUAL CAPITAL PROJECT EXPENDITURES Cate_qor¥ FY 1999-00 FY 2000-01 FY 2001-02 FY 2002-03 General Governmental Schools Pubhc Ut~hbes Storm Water Ubht~es $ 54,634,208 $ 66,041,482 $ 82,591,447 $ 94,411,730 54,031,989 63,710,797 49,961,283 46,444,870 14,817,111 15,599,616 13,270,406 21,328,547 2,055,303 3,137,559 5,496,857. 4,665,092 TOTAL $125,538,611 $148,489,454 $151.31 9.99~3 $166,850.239 FINANCIAL INFORMATION Basis of Accounting and Accounting Structure All of the C~ty's and School Board Component Umt Governmental Funds, Expendable Trust Funds, and Agency Funds (assets and habd~bes) are reported under the mod~hed accrual bas~s of accounbng Revenues are recogmzed ~n the accounting per~od ~n which they become suscepbble to accrual 0.e, measurable and avadable) "Measurable" means the amount of the transacbon can be determined and "avadable" means collecbble w~th~n the current penod or soon enough thereafter to be used to pay habfi~bes of the current period. The C~ty considers property taxes as avadable ~f they are collected w~th~n 45 days after year end Expenditures are recognized m the accounting period ~n which the corresponding habd~bes are recurred, ~f measurable (except for unmatured ~nterest on general long- term debt which ~s recogmzed when due and pa~d). The following ~s a hst of the major revenue sources which meet the "suscepbble to accrual" criteria General Property Taxes Interest on Deposits and Investments General Sales Tax Revenue from Commonwealth Utd~ty Taxes Revenue from Federal Government Hotel Taxes Amusement Taxes Restaurant Taxes All C~ty and School Board Component Umt Proprietary Funds are reported under the accrual bas~s of accounting Revenues are recognized when earned and expenses are recogmzed when recurred Unbdled Water and Sewer Enterprise Fund accounts receivable for utd~ty services prowded through June 30 are ~ncluded m the financial statements The C~ty operates on a July 1 through June 30 fiscal year City of Virginia Beach Development Authority The V~rg~ma Beach Development Authonty was estabhshed for the specific purposes of attracbng new ~ndustnes and the expansion of ex~sbng ~ndustnes The Authonty ~s authonzed to ~ssue ~ndustnal development bonds after approval by the C~ty Councd and to purchase land to ~mprove and sell for A-36 development. These bonds do not constitute ~ndebtedness of the C~ty but are secured solely by revenues from the organ~zahon on whose behalf the bonds were ~ssued The Authonty's Commissioners are appointed by C~ty Council The C~ty does not have legal btle to any of the Authonty's assets, nor does ~t have a nght to the Authonty's surpluses However, ~n accordance w~th Governmental Accounting Standards Board Statement 14, the Authonty has been d~scretely presented ~n Appendix B Among the many projects ~t has helped finance, and ~n add~bon to the projects the Authority has undertaken for the C~ty, including the Town Center and the Projects ~t ~s currently undertaking, the Authority has developed the Corporate Landing Office Park which has experienced temporary cash flow d~fflcult~es. In 1993, the C~ty, using funds from ~ts undesignated General Fund balance, loaned $6,000,000 to the Authonty to assist the Authonty ~n making payments on the original bank financing prowded by Bank of America for th~s project As property at Corporate Landing has been sold, the Authority has made payments on the Bank of America loan The Authority has made payment ~nstallments on ~ts loan from the C~ty ~n May 1993, September 1993, and February 1994 which total over $1 mdhon These payments were made from 95% of net proceeds from the sale of property ~n the Oceana West Corporate Park In February 2003, C~ty Councd approved a change to the loan amount and terms governing the C~ty's loan to the Authority Under th~s restructunng, the C~ty extinguished the Authonty's obhgabon to pay the ex~stmg accrued ~nterest on th~s loan The remaining pnnc~pal, $6 2 mdhon as of February 2003, was restructured ~nto two non-interest bearing notes Note one ~n the amount of $4 8 m~lhon w~ll be secured by the 31st Street Property and w~ll be payable from the net proceeds of a sale or ground lease of 31st Street Property. Note two ~n the amount of $1 4 m~lhon w~ll be secured by remaining parcels at Corporate Landing and Oceana West, payable from 20% of net proceeds from land sales Remaining proceeds w~ll be used to fund infrastructure and strategic land acqu~s~bons Hampton Roads Transportation District Commission The C~ty's financial statements include ~ts share of the operabng cost of the regional mass transit operabons of the Hampton Roads Transportabon D~stnct Commission For F~scal Year 2002, the C~ty's share of aforemenboned operabng cost was $1,825,560 GASB Statement 34 In June 1999, the Governmental Accounbng Standards Board ("GASB") ~ssued Statement No 34, "Basic F~nanc~al Statements and Management's D~scuss~on and Analys~s for State and Local Governments" Th~s statement, known as the Reporting Model, provides for the most s~gn~flcant change ~n financial reporbng for state and local governments for over twenty years Th~s statement affects the manner ~n which the C~ty records transachons and presents financial mformabon State and local governments have traditionally used a financial reporting model substanbally d~fferent from the one used to prepare private sector financial reports The C~ty adopted th~s statement as of July 1,2001 The basic financial statements include both government-w~de (based upon the C~ty as a whole) and fund financial statements. Wh~le the previous model emphasized fund types (the total of all funds of a parhcular type), ~n the new reporting model the focus ~s on e~ther the C~ty as a whole or major ~nd~wdual funds (w~th~n the fund financial statements) Both the government-w~de and fund financial statements (w~th~n the basic financial statements), categonze primary acbwbes as e~ther governmental or business- type In the government-w~de Statement of Net Assets, both the governmental and bus~ness-type acbv~bes columns are presented on a consohdated bas~s by column and are reflected on a full accrual, and economic resources bas~s, which incorporates long-term assets and receivables as well as long-term debt and obl~gabons The C~ty generally first uses restricted assets for expenses ~ncurred for which both restricted and unrestricted assets are available The C~ty may defer the use of restncted assets based on a rewew of the specific transaction The statement of acbv~bes demonstrates the degree to which the d~rect expenses of a g~ven funcbon or segment are offset by program revenues D~rect expenses are those that are clearly ~dent#~able w~th a specific function or segment The program revenues must be d~rectly associated w~th A-37 the funcbon (public safety, public works, etc.) or a bus~ness-type acbwty Program revenues ~nclude (1) charges to customers or apphcants who purchase, use or d~rectly benefit from goods, services, or pnwleges prowded by a g~ven funcbon or segment and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other ~tems not properly included among program revenues are reported as general revenues The C~ty does not allocate md~rect expenses. The operating grants ~nclude operating-specific and d~screbonal (e~ther operating or capital) grants whde the capital grants column reflects capital-specific grants. Fund financial statements are provided for governmental funds, proprietary funds, and fiduciary funds By definition, the assets of the fiduciary funds are being held for the beneht of a third party and cannot be used to address act~wt~es or obhgabons of the government, therefore, these funds are excluded from the government-w~de statements Major ~nd~wdual governmental funds and major enterprise fund are reported as separate columns ~n the fund financial statements. The C~ty reports the following major governmental funds' The General Fund ~s the C~ty's primary operating fund. It accounts for all financial resources of the C~ty, except those required to be accounted for m another fund. Revenues are derived primarily from property and other local taxes, state and federal d~stnbubons, I~censes, permits, charges for service, and interest ~ncome. A s~gn~hcant part of the General Fund's revenues ~s used principally to finance the operahons of the C~ty of V~rg~n~a Beach School Board The Capital Projects Fund ~s used to account for the flnanc,al resources for the acquisition or construcbon of major capital facilities w~th~n the C~ty The C~ty reports the following major propnetary funds' The Water and Sewer Fund provides water service and sanitary sewer waste collection and transmission serwces to V~rgm~a Beach c~t~zens and accounts for operabons that are financed m a manner s~mdar to pnvate bus~ness enterpnses The Storm Water Fund accounts for the acbv~bes of the Storm Water Utd~ty which charges a fee for operabonal and capital needs for Storm Water management ~n the C~ty. Additionally, the C~ty reports the following fund types Special Revenue Funds accounts for revenue denved from specific sources that are restncted by legal and regulatory prows~ons to finance specific achwt~es Internal Service Funds accounts for the financing of goods and services prowded to other departments and agencies of the C~ty or to other governmental un,ts on a cost reimbursement bas~s The C~ty ut~hzes Internal Service Funds for ~ts C~ty Garage, Fuels, R~sk Management, Print Shop, School S~te Landscaping, and Information Technology operahons. Fiduciary Funds are used to account for assets held by the c~ty ~n a trustee capacity or as an agent for ~ndw~duals, prwate organizations and other governmental un~ts. The F~duc~ary Funds are C~ty Fnnge Benefits, Payroll Deduchons, Special Welfare, Escheat Property Agency Funds and the Pension Trust Fund The Agency Funds are custodial ~n nature (assets equal hab~ht~es) and do not ~nvolve measurement of results of operabons. The Pension Trust Fund accounts for the assets of the Shenff's Rebrement Plan which ~s a defined contnbubon pension plan Investment Policies and Practices The C~ty of V~rgm~a Beach, as a pohhcal subd~ws~on of the Commonwealth of V~rg~n~a, ~s hm~ted to ~nvestments permitted by the Code of V~rg~n~a of 1950, as amended. In add~bon, various bond resolutions A-38 and a C~ty Council adopted investment policy further restnct the types of allowable ~nvestment acbv~t~es The C~ty's investment pracbces are generally described ~n footnote 7 of the C~ty's financial statements, ~ncluded ~n Appendix B hereto The C~ty Treasurer ~s responsible for the investment of C~ty funds. The C~ty Treasurer invests the C~ty's funds using ~nternal achve management, w~th external trustees and trust funds taking possession of apphcable investments W~thm the state permitted gu~dehnes and the adopted ~nvestment pohcy, the C~ty Treasurer hm~ts the C~ty's ~nvestments to the State Treasurer's Local Government Investment Pool, collaterahzed cerbflcates of deposit, repurchase agreements, pnme quahty commercial paper, and pnme quahty "fed ehg~ble" bankers' acceptances. The C~ty does not revest ~n "denvat~ve" secunbes, ubhze reverse repurchase agreements, nor otherwise leverage ~ts ~nvestment portfolio The C~ty matches the maturity of ~ts investments to cash flow needs to assure cash availability as necessary Certificate of Achievement The Government F~nance Officers Assoc~abon of the Umted States and Canada ("GFOA") awarded a Cerbflcate of Achievement for Excellence ~n F~nanc~al Reporbng to the C,ty for ~ts Comprehensive Annual Financial Report ("CAFR") for F~scal Year 2001 In order to be awarded a Cerbflcate of Achievement, a governmental unit must pubhsh an easily readable and efficiently organized Comprehensive Annual F~nanc~al Report that substanhally conforms to the h~gh standards for financial reporting as promulgated by the GFOA. A Certificate of Achievement ~s vahd for one year only The C~ty has been awarded a Cerhflcate of Achievement (called a Cerbflcate of Conformance prior to 1985) for ~ts Comprehensive Annual Financial Report for 22 of the past 23 years. The C~ty was also awarded the Cerbflcate of Achievement for D~sbngu~shed Budget Presentabon from the GFOA for ~ts F~scal Year 2003 budget. The C~ty also received th~s award for 16 of the last 18 years. Budgetary Process The C~ty Charter requires the C~ty Manager to submit a balanced, proposed operabng budget to the C~ty Council at least 90 days before the beginning of each fiscal year which begins July 1 Each department of the C~ty prepares ~ts own budget request for rewew by the C~ty Manager The School budget ~s prepared by the School Board, transmitted to the C~ty Manager for rewew, and then submitted to the C~ty Councd for consideration as part of the C~ty's general operabng budget The C~ty Council ~s required to hold a pubhc hearing on the budget at which brae all ~nterested persons have the opportunity to comment. If the proposed operabng budget ~s not legally adopted by the C~ty Council by June 1, the operahng budget submitted by the C~ty Manager w~ll have full force and effect as ~f ~t had been adopted by the C~ty Council The C~ty Manager ~s authorized to transfer appropnabons up to a maximum of $100,000 Transfers ~n excess of $100,000 require C~ty Council approval Transfers between $25,000 to $100,000 are reported to C~ty Council on a monthly bas~s Additional appropr~abons must be offset by additional esbmated revenues and/or a transfer from the proper undesignated fund balance and require a pubhc heanng ~f the amount of the add,bonal appropnabon exceeds one percent of the total revenue ~n the approved budget Unexpended appropnabons (except for the Capital Projects, Grant, and Grants Consohdated Funds) lapse and are closed to the proper fund balance at the end of each fiscal year The appropnabon for the subsequent fiscal year ~s ~ncreased by the amount necessary to sabsfy the outstanding encumbrances at June 30 of each fiscal year The operabng budget ~ncludes a porbon of the funding for the Capital Improvement Program ("ClP") General appropnabons used to finance capital projects are shown both ~n the operabng budget and ~n the CIP The Department of Management Services annually prepares a s~x-year CIP Because A-39 acbv~t~es of capital projects often go beyond a fiscal year period, the accounbng, encumbenng, and controlhng of the funds are based upon the length of project acbwbes. S~mdarly, Federal and State grants ~n the Grants and Grants Consolidated Funds are budgeted separately from the operating budget because these revenues do not necessarily coincide w~th the C~ty's fiscal year Each capital lease obhgat~on has a non-appropnabon clause which generally states that each fiscal year's lease payments are subject to C~ty Councd approval These capital lease appropnat~ons are offset by an equal amount of esbmated revenue (other financing sources), and are functionally budgeted ~n the General Debt Serwce Fund Fiscal Year 2003 Financial Results The closing process for F~scal Year 2003, ending June 30, 2003, was concluded on August 14, 2003 The results of the closing process show General Fund revenues exceed budgeted esbmates by approximately $3 3 mdhon and represent an ~ncrease of approximately $32 mflhon or 5% over the prewous year General Fund expenditures at year end were approximately $25 1 m~lhon less than budgeted esbmates At th~s t,me the undesignated fund balance for the General Fund ~s approximately $60 mdhon or 8.8% of the fiscal year 2003 General Fund revenues Other C~ty funds completed the year w~th~n budgeted esbmates There are no matenal adverse trends at th~s brae. It ~s ~mportant to note that these results are unaudited and unadjusted and are being presented before the final audit ~s complete The financial statements for the C~ty for the fiscal year ended June 30, 2003. wdl be avadable w~th the presentabon of the C~ty's Comprehensive Annual F~nanc~al Report near the end of th~s calendar year Fiscal Year 2004 Operating Budget On May 13, 2003, the C~ty Council approved the F~scal Year 2004 Operabng Budget and Capital Improvement Program (known as the Resource Management Plan). The operabng budget of $1,311,825,979 represents a 6 33% ~ncrease over the F~scal Year 2003 adjusted budget H~ghhghts of the budget are hsted below' No ~ncrease ~n the rates of real estate property taxes or personal property taxes Increase of 82 3 FTE pos~bons over the adjusted prior year's budget Th~s ~s a net result of 52 9 decrease ~n School pos~t~ons, and an increase of 135 2 ~n C~ty pos~bons The add~bonal C~ty pos~bons are needed to meet commitments related to the opemng of the Juvende Detenbon Facd~ty and Pnncess Anne L~brary as well as add~bonal pos~bons funded by the ~ncrease ~n the c~garette tax An ~ncrease ~n the c~garette tax from 32 cents to 50 cents per pack approved by C~ty Councd on January 7, 2003, allows funding of safety-related pos~bons, ~ncludmg 10 add~bonal flreflghters and 16 add~bonal pohce officers, a regulabon and enforcement pos~hon for comphance w~th emergency medical services regulabons, support of an ~nternabonal markebng m~t~ahve, and ~nfrastructure for pubhc/pnvate partnerships and economic development ~n~babves. Tax and fee increases for the following. E-911 tax increase of 65 cents per month over three years from $1 95 per month ~ncreas~ng to a total of $2 60 per month 0n F~scal Year 2006) to fund staffing for the Emergency Commun~cabons Center and funding ~nfrastructure, fire lane wolabon fee ~ncrease from $15 to $50, amendments to ~ncrease various planning fees related to development, yard debns program fee of $25 per use, Law Enforcement Training Academy Fee, $1 per d~em costs of ~nmates The last part of a three part increase ~n ut~hty rates. The samtary sewer rate ~ncreased from $13 27 to $14 34 per month, and the storm water fee ~ncreased from $51 47 to $55 12 per year A-40 Four additional pos~bons ~n the Department of Pubhc Utd~bes to strengthen the cross connecbon and backflow prevention program and to protect the ~ntegnty of the public water supply, and to ~ncrease maintenance capabd~t~es 3 65% pay raise for certain eligible employees and a 1 5% pay plan structural adjustment based on ma~nta~mng the Qty's pos~t~on ~n the regional labor market The state revenue reducbons conbnue to ~mpact the local budget. Several agencies have been ~mpacted, especially the Department of Mental Health, Mental Retardabon and Substance Abuse and each of the Consbtubonal Officers Compared to the previous year, the C~ty projects a reducbon of $5.2 mdhon of state a~d for all funds for F~scal Year 2004. In add~bon the F~scal Year 2004 Operabng Budget reflects a reducbon of 4 9 FTEs ~n the Commissioner of Revenue's office and 3 6 FTEs ~n the C~ty Treasurer's office due to state budget cuts w~th some of the reducbons related to reducing state ~ncome tax assistance at the local level A-41 Fiscal Year 2004 Budget v. Fiscal Year 2003 Budget REVENUES General Property Taxes Revenue from the Commonwealth Other Local Taxes Charges for Services Revenue from the Federal Gov't Use of Money & Property M~scellaneous Revenue Specific Fund Reserves Capital Project Reserve Permits, Fees, & L~censes Rnes & Forfeitures Non-Revenue Receipts Total Revenues FY 2O03 FY 2OO4 Adjusted Adopted Bud.qet Bud.qet $411,449,876 $448,215,571 366,207,303 374,343,894 194,267,600 209,570,462 128,896,526 129,859,292 85,527,400 97,754,414 13,859,380 10,868,542 8,153,660 11,540,902 6,842,494 8,389,938 5,383,813 6,469,741 4,339,238 4,934,487 4,487,890 5,267,793 4. 264,428 4,61 O, 943 $1,233,679,608 $1.311.825.979 APPROPRIATIONS Education General Government Debt Service Pubhc Works Police Pubhc Utd~t~es F~re Social Services Capital Projects Mental Health Parks and Recreation Reserve for Contingencies L~branes Total Appropnabons $583,913,186 $619,757,614 190,256,864 195,183,797 104,524,706 105,224,669 67,959,951 66,947,874 64,153,925 69,351,375 59,450,686 62,220,453 30,205,773 32,050,780 31,673,724 33,973,866 35,972,846 42,568,404 30,126,928 31,229,684 22,355,029 24,380,355 0 14,403,159 13,085,990 14,533,949 $1,233,679,608 $1,311,825,979 FY 2004 % of Total 3417% 2854% 1598% 990% 745% 083% 088% 064% 049% 038% 040% 035% 100.00% 4724% 1488% 802% 510% 529% 474% 244% 259% 324% 238% 186% 110% 111% 100.00% % Change FY 2003 Adjusted to FY 2004 8 94% 2 22% 7 88% 0 75% 14 3O% -21 58% 41 54% 22 62% 20 17% 13 72% 17 38% 8..13% 6 33% 6.14% 2 59% 0 67% -1 49% 8 10% 4 66% 611% 7 26% 18 33% 3 66% 9 06% 0 00% 1106% 633% A-42 General Government Revenues In F~scal Year 2002, tax revenues accounted for 54 percent of general governmental revenue, State assistance 32 7 percent, federal sources 7 8 percent, and other sources 5 5 percent The following table shows the C~ty's F~scal Year 2001-2002 actual revenues by source. General Governmental Revenues Fiscal Year 2001-2002 Revenues by Source¢) FY 2002 FY 2001 Increase (Decrease) from 2001 Source Amount Percent Amount Percent Amount Percent (m~llions) of Total (millions) of Total (m~llions) Chancre Local Sources General Property Tax $390 5 36 4% $367 3 36 0% $23 2 45 9% Other Local Taxes 188 2 17 6 173 5 17 0 14 7 29 0 Permits, Pnwlege Fees, and Regulatory Lmenses 4 1 0 4 3 8 0 4 0 3 0 5 F~nes and Forfeitures 4 5 0 4 4 3 0 4 0 2 0 5 From Use of Money and Property 7 7 0 7 13 3 I 3 (5 6) (11 2) Charges for Servmes 36 7 3 4 34 7 3 4 2 0 3 9 M~scellaneous 6 0 0 6 7 9 0 8 (1 9) (3 7) From Other Local Governments 0 4 0 0 0 2 0 q 0 2 0 5 Total Local 638 1 59 5% $605 0 59 3% $33 1 65 4% From Commonwealth 350 0 32 7 347 5 34 0 2 5 5 0 From Federal Government 83 7 7 8 68 8 6 7 14 9 29 6 Total Revenues $1 ;071.8 100.0% $1,021.3 100.0% $50.5 100.0% Includes General, Special Revenues and Debt Service Funds Source C~ty Department of F~nance General Fund In accordance w~th the general pracbce of governmental un~ts, the C~ty records ~ts transacbons under vanous funds The largest, the General Fund, ~s that from which all general costs of C~ty government are pa~d and to which taxes and other revenues, not specifically d~rected by law or adm~n~strabve acbon to be deposited ~n special revenue funds, are recorded Examples of special revenue funds are the School Operating Fund, the School Grants Fund, and the Grants Consohdated Fund The General Fund ~s comprised of revenue derived from ad valorem taxes, other local taxes, hcenses, fees, permits, certain revenue from the Federal and State governments, ~nterest earned on ~nvested cash balances, and other revenues General Fund d~sbursements ~nclude the costs of general C~ty government, transfers to the School Operabng Fund for local share of school costs, and transfers to the Debt Service Funds to pay pnnc~pal and ~nterest on the C~ty's general obhgat~on bonds for other than water and sewer purposes Operating Data Ad valorem property taxes contnbuted 58 percent of the C~ty's General Fund revenues ~n F~scal Year 2002 The C~ty lewes an ad valorem tax on the assessed value of real and personal property located w~th~n the C~ty Other local taxes contributed 27 percent of the C~ty's General Fund revenues ~n F~scal Year 2002 These ~nclude (1) a one percent local sales tax (collected by the state and remitted to the C~ty), (2) a tax on consumer utd~ty bdls of 20 percent each for gas, electric, water, and telephone on bdls up to $15 per month for res~denbal classes and 15 percent on the first $625 per month and 5 percent on the amount between $625 and $2,000 for ~ndustnal and commercial classes, (3) a c~garette tax of 50 cents per pack, (4) property transfer recordabon taxes, (5) an automobde hcense fee, (6) various bus~ness, professional, and occupabonal taxes, (7) a e~ght percent hotel room tax, (8) a restaurant meal tax of five and one-half percent, (9) an amusement tax of 10 percent on gross admissions for certain A-43 events; and (10) a flat rate of $1 00 added to hotel room charges to fund the Tourism Adverhs~ng Program or ~mprovements at Sandbndge The follow, ng table shows the C~ty's pnnc~pal tax revenues by source for each of the last ten fiscal years Growth m real property taxes and total tax revenues have averaged 5.2% and 5 9%, respecbvely, annually over the past ten years PRINCIPAL TAX REVENUES BY SOURCE FISCAL YEARS 1993 THROUGH 2002 Real Personal Fiscal Property Property General Utility Restaurant Other Year Taxes Taxes Sales Tax Tax Meal Tax Taxes Total 1993 $185,426,065 $49,646,483 $26,215,861 $23,492,966 $17,154,580 $43,647,278 $345,583,233 1994 197,691,702 53,383,954 29,203,190 27,015,112 18,408,710 49,006,994 374,709,662 1995 201,152,215 58,564,315 30,907,341 28,452,809 19,080,012 51,263,287 389,419,979 1996 215,783,669 66,775,292 32,808,424 30,410,466 19,835,362 53,613,813 419,227,026 1997 229,160,745 67,612,923 33,916,147 31,246,546 20,682,238 57,888,826 440,507,425 1998 238,395,536 75,041,794 35,049,804 34,415,834 22,046,548 60,320,561 465,270,077 1999 249,191,314 75,593,009 37,004,115 35,886,337 23,157,204 63,351,753 484,183,732 2000 263,220,074 89,984,300 38,212,293 37,643,752 24,436,808 65,846,499 519,343,726 2001 275,963,122 90,362,321 39,712,323 39,746,094 25,320,531 69,697,006 540,801,397 2002 292,842,234 96,742,456 40,619,190 40,548,770 31,887,442 75,975,419 578,615,511 Source C~ty Department of F~nance An annual ad valorem tax ~s lev~ed by the C~ty on the assessed value of real property subject to taxabon w~th~n the C~ty as of July I The C~ty assesses real property at 100 percent of ~ts fair market value (w~th the exception of pubhc service properties which are assessed by the State Corporation Commission). Real property taxes are due on December 5 and June 5 of the hscal year ~n which they are lewed A penalty of ten percent of the tax owed or $10, whichever ~s greater, along w~th ~nterest of 9.6 percent for the hrst year, ~s assessed on dehnquent taxes Subsequent year's ~nterest penalty rates are set by the C~ty Council and are currently 8.4 percent. A port~on of tangible personal property located w~th~n the C~ty ~s also assessed an annual ad valorem tax. The assessed value of personal property ~s 100 percent of appraised value. Personal property taxes are due June 5, and dehnquent payments are subject to the same penalbes as described above for real property The following table sets forth the assessed value of all taxable property ~n the C~ty for the last ten fiscal years Tax-exempt properties owned by federal and state governments, churches, and schools, among others, aggregabng approximately $3,910,564,507 for F~scal Year 2002, are not ~ncluded ~n the table The assessed value of real property ~n the C~ty at June 30, 2002, was $23,365,285,989 (includes pubhc service real property) A-44 F,scal Year 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 HISTORICAL ASSESSED VALUE FISCALYEARS1993THROUGH 2002 Real Percentage Personal Percentage Public Service Percentage Property Change Property Change Property Change Total Assessed From Assessed From Assessed From Assessed Value(1) Prior Year Value Prior Year Value(2) Prior Year Value $16,521,164,334 0 69% $1,283,381,883 4 65% $540,396,443 6 77% $18,344,942,660 16,690,934,453 1 03 1,416,512,442 10 37 570,358,251 5 54 18,677,805,146 17,189,272,558 2 99 1,590,254,927 12 27 598,450,332 4 93 19,377,977,817 17,569,373,603 2 21 1,773,955,263 11 55 631,854,212 5 58 19,975,183,078 18,231,483,508 3 77 1,848,939,232 4 23 623,804,522 -127 20,704,227,262 19,068,899,073 4 59 1,975,719,516 6 86 630,802,210 1 12 21,675,420,799 19,880,386,330 4 26 2,162,086,075 9 43 656,859,261 4 13 22,699,331,666 20,997,405,999 5 62 2,723,557,700 25 97 677,545,782 3 10 24,398,509,481 22,085,451,417 5 18 2,847,992,931 4 57 705,956,994 4 19 25,639,401,342 23,365,285,988 5 79 3,049,294,683 7 07 731,786,118 3 66 27,146,366,789 (1) Real property ~s assessed at 100 percent of fair market value (2) Includes both real estate and personal property assessments All pubhc servme property ~s taxed at the real estate tax rate except for vehicles Percentage Change From Prior Year I 13% 1 81 3 75 3 O8 3 65 4 69 4 72 7 49 5 09 5 88 Source C~ty Department of F~nance The C~ty ~s required to levy taxes on the assessed value of real and personal property w~thout hm~t as to the rate or amount to the extent necessary to pay principal of and interest on ~ts general obl~gabon bonds The following table sets forth the C~ty's tax rates and tax lewes on real property for F~scal Years 1993 through 2002 Th~s tax rate remains at $1 220 ~n the Rscal Year 2002 Operabng Budget PROPERTY TAX RATES AND CHANGE IN TAX LEVY FISCAL YEARS 1993 THROUGH 2002 Current Percentage Tax Rate Real Annual Fiscal on Real Property Change in Year Property¢) Tax Levy Tax Levy 1993 $1.090 $183,716,884 0 88% 1994 I 140 194,109,397 5 66 1995 1 140 197,712,631 1 86 1996 I 188 213,069,095 7 77 1997 1.220 226,859,499 6 47 1998 I 220 236,751,484 4 36 1999 1 220 246,389,536 4 07 2000 I 220 264,436,560 7 32 2001 1 220 280,963,485 6 25 2002 1 220 305,058,532 8 58 (4) Tax rate per $100 of assessed value Source C~ty Department of Finance A-45 The following table sets forth ~nformabon concerning the C~ty's real property tax collecbon rate for each of tts ten most recent hscal years. REAL PROPERTY TAX COLLECTION RATE FISCAL YEARS 1993 THROUGH 2002 Current Total Total (Net) Taxes Percentage Delinquent Total Collections Fiscal Taxes Receivable of Levy Tax Tax As Percent of Year ReceIvable Collected Collected Collections Collections (1) Current Levy 1993 $183,716,884 $178,476,385 97 1% $6,326,014 $184,802,399 100 6% 1994 194,109,397 189,674,033 97 7 6,685,033 196,359,066 101 2 1995 197,712,631 194,287,108 98 3 6,142,169 200,429,277 101 4 1996 213,069,095 209,169,309 98 2 4,875,589 214,044,898 100 5 1997 226,859,499 223,265,716 98 4 5,102,726 228,368,442 100 7 1998 236,751,484 232,875,842 98 4 4,245,849 237,121,691 100 2 1999 246,389,536 241,376,374 98 0 2,174,533 243,550,907 98 8 2000 264,436,560 259,883 741 98 3 6,516,069 266,399,810 100 7 2001 280,963,485 275,592,151 98 1 4,857,709 280,449,860 98 8 2002 305,058,532 299,331,985 98 1 6,806,446 306,138,431 100 4 (~) Includes a 10% penalty ($10 m~nlmum) on dehnquent collecbons Source CIty Department of F~nance CITY OF VIRGINIA BEACH, VIRGINIA TWENTY-FIVE PRINCIPAL TAXPAYERS FISCAL YEAR 2001-2002 Real Property TaxpayerBusiness Assessed Value V~rg~n~a Electnc& Power Company Kmckerbocker Properbes Inc III Venzon V~rg~ma Inc Pembroke Square Associates Ramon W Breeden, Jr T~dewater Oxford Ltd Partnership Thomas J Lyons, Jr Westminster-Canterbury of Hampton Roads ^tlanbc Shores Cooperabve Etc Watergate Treehouse Associates LP F Wayne McLeskey, Jr V~rg~n~a Natural Gas, Inc(1) Edmund C Ruffln & Bruce L Thompson Gordon Potter, D Potter and J Potter Chnsban Broadcasting Network, Inc W~ndsor Lake Apartments LLC Princess Anne Properbes Inc Manna Shores Associates One Ltd, Prnrshp NHP Pembroke Courts LP Lake Gem LLC Wal Mart Real Estate Business Trust ABC M~n~ Warehouse Company Lucy F Reason L~berty Property L~m~ted Partnership Cox V~rg~ma Telecom Inc Ubhty Shopping Mall Ubhty Shopping Mall Real Estate Real Estate Hotels Real Estate Real Estate Real Estate Real Estate Ut~hty Real Estate Shopping Center Broadcasbng Apartments/Shopp Ctr Real Estate Real Estate Apartments Real Estate Retad M~n~ Storage Shopping Center Office/Warehouse Ubhty $321,783 67O 213,876 67O 188,568 191 114,995 270 109,668 085 87,357 189 77,691 674 76,509 100 75,544 154 71,564 704 65,713 749 65,162 458 62,803 181 58,701 315 55,121 148 41,750 186 39,742,342 39,390 471 38,141, 50 36,403,073 36,266,936 34,977,844 34,682,712 31,551,400 31,052,660 Note Total $2.009,019,332 Includes certain personal property taxed at real property rates as prowded ~n Section 58 512 1 of the Code of V~rg~n~a, as amended Source C~ty Assessor A-46 General Fund Operations The following table compares C~ty General Fund revenues, expenditures, and changes ~n Fund Balance for F~scal Years 1998 through 2002 GENERAL FUND COMPARATIVE STATEMENT OF REVENUES AND EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE FISCAL YEAR ENDING JUNE 30 REVENUES General Property Taxes Other Local Taxes Permits, Pnwlege Fees and Regulatory L~censes Frees and Forfeitures From Use of Money and Property Charges for Serwces M~scellaneous From Other Local Governments From Commonwealth From Federal Government Total Revenues 1998 199~ 200q 2001 2002 $314,471,559 $325,630,740 $353,168,284 $365,223,427 $387,422,231 145,110,879 152,684,053 158,918,533 167,302,110 181,899,276 3,663,320 3,678,921 4,118,927 3,833,565 4,074,179 4,031,418 3,914,453 4,121,479 4,312,322 4,544,400 8,178,730 5,387,210 6,001,337 6,437,075 4,246,424 7,694,406 6,628,018 6,398,520 6,992,492 5,744,900 4,884,901 4,662,531 4,704,183 5,281,354 4,090,171 - 183,347 38,987,772 41,755,550 52,642,002 52,052,773 55,253,869 10,901,537 13,826,358 14,962,983 16,041,194 17,195,254 $537,924,522 $558,167,834 $605,036,248 $627,476,312 $664,654,051 EXPENDITURES Operabng Legislative Execubve Law Finance Human Resouroes Judicial Health Social Services Pohce Pubhc Works L~brary Planning Agnculture Economic Development Convenbon and V~s~tor Development General Services Boards and Commissions F~re Museums Management Services Commumcabons and Informabon Technology Emergency Medical Serwces Housing and Neighborhood Preservabon Total Operating Capital Outlay(~) Total Expenditures $ 751,051 $ 795,918 $ 880,419 $ 915,390 $ 988,674 1,519,739 1,678,433 1,646,154 1,930,717 2,041,220 2,053,552 2,082,650 2,417,906 2,691,856 2,872,720 13,046,569 13,911,155 13,845,726 14,415,974 14,863,706 4,536,302 4,987,044 5,082,506 5,537,693 5,033,197 7,307,996 8,844,304 9,656,079 9,785,177 11,597,370 2,127,958 2,181,174 2,244,487 2,575,292 2,569,211 18,373,237 22,771,046 24,643,795 26,563,709 28,496,226 45,305,119 50,075,963 53,114,613 57,971,869 60,242,707 45,980,329 50,284,775 50,691,295 56,608,946 55,339,922 7,582,394 9,463,418 9,919,289 10,536,853 11,663,356 6,442,601 6,784,499 7,679,563 7,987,408 8,234,063 645,506 659,614 706,889 841,996 833,156 1,369,288 1,375,260 1,350,198 1,413,500 1,658,092 4,244,932 4,487,927 4,523,674 4,852,130 5,085,381 20,710,853 22,002,451 23,101,851 25,133,156 24,644,344 7,303,119 9,005,577 6,598,224 7,682,762 7,934,495 22,853,552 24,458,134 25,649,889 26,878,842 30,417,433 391,680 422,434 519,078 514,486 505,882 1,782,146 1,769,960 1,238,865 1,296,046 1,282,788 .... 1,640,318 1,693,256 2,117,381 1,944,579 2,227,688 2,425,178 2,695,813 2,679,836 1,853,296 2,022,490 1,461,103 1,515,462 1,568,878 $218,125,798 $242,291,914 $251,037,099 $272,038,335 $282,670,038 6,989,219 ........ $225,1151017 $242,2911914 $2511037,099. $272,038,335 $282,670,038 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES $312,809,505 $315,875,920 $353.999.14. 9 $355,437,977 $381,984,013 (4) Starting In FY 99, Capital Outlay reported In each department Source C~ty Department of Rnance A-47 GENERAL FUND COMPARATIVE STATEMENT OF REVENUES AND EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE FISCAL YEAR ENDING JUNE 30 OTHER FINANCING SOURCES (USES) Proceeds From Capital Leases Operating Transfers ~n Operabng Transfers out Total Other Financing Sources (Uses) EXCESS OF REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING FUND BALANCE--JULY 1 Residual Equity Transfers ADJUSTED FUND BALANCE-- JULY 1 FUND BALANCE--JUNE 30 1998 1999 2000 2001 2002 $ - $ - $ - $ - $ 411,626 2,027,353 3,483,798 325,842 377,030 1,728 (324,639,583) (322,683,643) (353,576,086) (356,733,330) $(373,712,966) $(322,612,230) $(319,199,845) $(353,250,244) $356,356,300_) $(373,299,612) $(9,802,725) $(3,323,925) $748,905 $(815,323) $8,684,401 $107,502,880 $97,700,155 $94,376,230 $96,067,969 $95,445,728 - 296,O82 449,765 $107,502,880 $97,700,155 $94,376,230 $96,364,051 $ 95,895,493 $97.700.15. 5 $94.376.23__0 $95=125,135 ~ $104=579~894 Note to the Table The entire General Fund balance ~s not avadable for appropnabon because of outstanding Interfund and ~nteragency loans, prepaid ~tems, encumbrances, and designations for school capital projects An analysis of the General Fund balance ~s as follows Fund Balance --June 30, 2002 Less Reserved Amounts' Encumbrances Advances to Other Funds Loans Federal Arbitrage Less Unreserved Amounts. Designated for School Capital Projects - Textbooks and Other Designated for Future Programs Designated for Capital Projects Net Balance Avadable for Appropnabon - July 1, 2002 $2,823,698 290,000 8,425,417 245,502 21,149,154 9,002,297 3,184,578 $1 O4,579,894 45,120,646 $59,459,248 Source C~ty Department of Finance A-48 At the end of F~scal Year 2002, the General Fund Balance was $104,579,894 Th~s balance represents an ~ncrease of $8,684,401 from the prewous year. The table on the following page presents a companson of the C~ty's General Fund balance for Rscal Years 1998 through 2002 GENERAL FUND BALANCE FISCAL YEARS 1998 THROUGH 2002 General Fund Balance Reserved for Encumbrances Advance to Other Funds Loans Prepaid Items Federal Arbitrage Rebate L~abd~ty Unreserved Designated for School Capital Projects-Textbooks and other Designated for Capital Projects Designated for Year 2000 Designated for Future Programs Undesignated Totals 1998 1999 2000 2001 200~2 $ 2,213,220 $ 3,279,234 $ 4,384,360 $5,301,884 $2,823,698 327,450 327,450 327,450 290,000 290,000 7,668,237 7,878,387 7,852,137 8,367,027 8,425,417 5,655 14,090 5,655 .... 377,129 377,129 521,301 826,318 245,502 16,203,785 12,931,815 13,614,392 10,926,451 21,149,154 6,304,645 12,318,388 3,966,824 1,200,000 3,184,578 1,400,000 ........ 1,144,019 1,065,438 9,649,096 6,207,137 9,002,297 62,056,015 56,184,299 54,803,920 62,326,911 59,459,248 $97.700.15. 5 $~ZC;L23D ~ ~ $104,579,894 The C~ty has maintained a s~zable General Fund balance ~n each of the past ten fiscal years as summarized ~n the table below GENERAL FUND BALANCE AS PERCENT OF GENERAL FUND REVENUES FISCAL YEARS 1993 THROUGH 2002 Fiscal Fund Balance Year June 30 General Fund Balance As Percent of General Fund Revenues 1993 $ 75,971,1 70 1994 83,041,391 1995 96,517,865 1996 99,640,666 1997 107,502,880 1998 97,700,155 1999 94,376,230 2000 95,125,135 2001 95,445,728 2002 104,579,894 16 81% 17.82 21 36 20 56 21 11 18 62 16 91 15 72 1521 15 73 A-49 The Water and Sewer System The Department of Pubhc Ut~hbes operates the C~ty owned Water Ubhty and the Samtary Sewer Ut,hty The m~ss~on of the Department ~s "to prowde pubhc water, ~nclud~ng water for fire protechon, and public samtary sewer service to the urban areas of Wrg~ma Beach" The goals are "to prowde quality public serwce at reasonable costs and to plan, budd, operate and maintain ~ts fac~hbes to meet commumty needs, enwronmental respons~b~hbes and regulatory requirements." The physical property of the C~ty water system as of June 30, 2002, ~ncluded approximately 1,409 m~les of transmission and d~stnbubon mains, 7,441 fire hydrants, 13 water storage fac~hbes, and ten pumping stabons 0nclud~ng Lake Gaston) The C~ty water system ~s fully metered, w~th tap s~zes ranging from 3,4-~nch to 12 roches. As of June 30, 2002, the water system had approximately 126,093 connecbons, represenbng a 1 2% ~ncrease over the number reported m 2001, and a customer base of approximately 416,000 people The C~ty Samtary Sewer System ~ncludes collector hnes, force mains and pump stabons, which are used to collect and transport wastewater to the treatment fac~hbes operated by the Hampton Roads Samtabon D~stnct ("HRSD"), the regional treatment agency. V~rg~ma Beach c~bzens receiving samtary sewer pay the Ctty a fee for collecbon and transport of wastewater and HRSD a fee for treatment of the wastewater The C~ty's Samtary Sewer System consists of 386 sewer pump stations and over 1,505 m~les of p~pel~ne ranging ~n s~ze from 4 roches to 36 ~nches ~n d~ameter. As of June 30, 2002, the number of Ctty sewer connecbons was 124,172, represenbng a 1 1% increase over the number reported m 2001. The HRSD, estabhshed m 1940, prowdes wastewater treatment services for 17 c~bes and counbes m southeastern V~rgm~a The HRSD operates nme major treatment fac~l~bes m Hampton Roads and two smaller treatment fac~ht~es on the M~ddle Peninsula, w~th a total treatment capacity of 230.5 m~lhon gallons per day ("MGD") Two HRSD plants are located m the C~ty. The Chesapeake-Ehzabeth Plant, m operabon since 1968, has an operating capacity of 24 MGD, w~th average annual flow esbmated at 18 MGD. The Atlantic Plant has an operating capacity of 36 MGD and average annual flow esbmated at 28 MGD The HRSD has a service populahon of I 5 m~lhon HRSD reports that ~t ~s meebng all ~ts d~scharge permit requirements estabhshed by the U S Environmental Protecbon Agency and the V~rg~ma Department of Enwronmental Quahty The Water Ubhty and Samtary Sewer System are operated and maintained m good working order ~nclud~ng repa~nng, rebuilding, or replacing of equipment and structures when required In add~bon, the C~ty has developed an ongoing training program to develop a staff of personnel ~n sufficient numbers to promote safe and techmcally competent operabon of the water and sewer ubhty In May 2000, the C~ty acquired the last privately-owned water ubhty ~n V~rg~ma Beach Th~s privately-owned ubhty served approximately 150 customers S~nce 1977, the C~ty has acquired four other pnvate water ut~hbes w~th an esbmated 2,000 customers and s~x samtary sewer uhl,bes w~th an esbmated 20,000 customers The est,mated depreciated value of the water and sewage property, plant and equipment was $490,337,429 as of June 30, 2002, including land and a~r nghts A-50 WATER AND SEWER SYSTEM ASSET EVALUATION FOR FISCAL YEARS ENDING JUNE 30 1998 1999 2000 2001 .2002 M~lhons of Gallons of Water Storage 30 25 Mdes of Water Lines 1,343 Mdes of Sewer L~nes 1,410 Number of Water Pump Stabons(1) 10 Number of Sewer Pump Stabons 372 Number of Water Connecbons 119,414 Number of Sewer Connections 117,749 Total Value of Ubhty Plant ~n Service(2) ~ (~) Includes Lake Gaston (2) Excludes depreclabon Source City Department of Public Ut[lltles 30 25 30 25 30 25 30 25 1,371 1,388 1,398 1,409 1,451 1,466 1,486 1,505 10 10 10 10 380 385 386 386 121,534 123,026 124,630 126,093 119,540 121,397 122,779 124,172 ~ $577.369.44. 3 ~ ~ The C~ty's water and sewer system ~s operated on a self-susta~nmg bas~s, w~th rates and charges adjusted when necessary to assure a stream of revenues adequate to cover the costs of operations and maintenance of the system and, debt service on all water and sewer system bonds Revenues from water and sewer charges are reserved solely for the payment of water and sewer fund obhgabons and have not been used for any non-water or non-sewer related purpose Water and sewer charges are maintained at a level sufhc~ent to pay all water and sewer operating expenses and debt serwce. Since 1986, the consulbng eng~neenng hrm of Alvord, Burdock & Howson, L.L C. ("AB&H") has been used as the C~ty's water and sewer rate consultant to perform various studies and analyses for the water and sanitary sewer system AB&H regularly examines the books and records of the Department of Pubhc Utd~bes and conducts a physical ~nspecbon of the operating facd~bes ~n order to develop recommendations for adequate water and sewer rates The terms of the contracts have called for AB&H to conduct a cost of service study and to develop recommended rates which would be adequate for the succeeding hve hscal years The analyses have ~ncluded a projecbon of revenues and expenditures for a per~od of five fiscal years from a test year. In the aggregate, the studies have resulted m a program of regular rate adjustments over the past fifteen years. Periodic water and sanitary sewer rate ~ncreases have been approved by C~ty Council to meet anticipated ~ncreases ~n future revenue requirements, ~nclud~ng · Funding requirements of the water and sanitary sewer capital ~mprovement program · Addition of Lake Gaston Project to the C~ty water supply system · Provisions for funding to address aging ~nfrastructure ~n the samtary sewer system Increase ~n the sanitary sewer charges, as adopted by C~ty Councd, took affect on July 1, 2001, and July 1, 2002, w~th an additional ~ncrease to take effect on July 1, 2003 These ~ncreases were supported by the 2001 Cost of Service Study prepared by AB&H, the C~ty's ubhty rate consultants A-51 H~stoncal water commodity rates and sanitary sewer charges for a s~ngle famdy residence and their effecbve date are outhned below Effective Date Water Commodity Rate (per 1,000 gallons) Sanitary Sewer Service Charge Single Family Residence (per month) July 1, 1983 August 1, 1987 October 1, 1987 July 1, 1988 July 1, 1989 July 1, 1990 October 1, 1990 July I 1991 July July July July July July July 1 1992 1 1993 I 1994 1 1999 1 2001 I 2002 1 2003 $1 62 $ 9 46 1 81 946 1 99 9 46 2 18 946 2 51 9 46 2.69 9 46 2 77 9.65 2 96 10 58 3.11 11 38 3.38 11 38 3.65 11 38 3 55 11 38 3 55 12.29 3 55 13 27 3.55 14 34 The C~ty's water and sewer achwbes are operated on an enterpnse fund accounting bas~s. F~scal Year 2002 operating revenues were $72,705,220. Th~s represents a 4 2% ~ncrease over F~scal Year 2001 The Water and Sewer Enterprise Fund had pos~hve Net Assets of $523,232,032 at the end of Rscal Year 2002 Typical Water and Sewer Bills Under the C~ty's current rate structure, a s~ngle famdy residence consuming 6,000 gallons for 30 days would receive a bdl as follows Current Rates Water Usage, 6 x $3 55 per 1,000 gallons M~n~mum Service Avadabd~ty Charge Sanitary Sewer Service Total Water and Samtary Sewer Monthly B~llmg $21 30 3 4O $24 70 14 34 $39 04 In add~bon, the HRSD would charge the same residence $10 91 for wastewater treatment of 6,000 gallons during the same bme penod. The last HRSD rate ~ncrease was ~n F~scal Year 2002 Operating Results-Water and Sewer System The C~ty Councd fixes water and sanitary sewer rates and charges such that eshmated ~ncome generated by such rates and charges wdl cover operabng expenses and debt service relating to the water and sewer system Funds and accounts relabng to the Department of Pubhc Ubhtles are kept separate from other funds and accounts of the C~ty The Department of Pubhc Ubht~es has financed the construcbon and acquisition of water and sewer facd~bes through Federal and State grant proceeds, pay-as-you-go funding and the ~ssuance of A-52 C~ty general obligation water and sewer bonds, double barrel water and sewer bonds (secured both by water and sewer revenues and the C~ty's general obhgabon pledge) and water and sewer revenue bonds. The Department ~s required by the C~ty's bond resolubons, among other prows~ons, to establish rates sufficient to cover operabons and maintenance and debt service on the general obhgabon water and sewer bonds and the water and sewer revenue bonds Certain general obl~gabon bonds ~ssued prior to 1977 for water and sewer purposes are not subject to such covenant. However, ~t ~s C~ty Council pohcy to pay debt service on those general obhgat~on bonds ~ssued for the water and sewer purposes from revenues of the Water and Sewer Enterpnse Fund, and to set water and sewer rates accordingly The table on the following page presents the operating results of the Water and Sewer Enterprise Fund, exclusive of deprec~abon, as used ~n compubng coverage of debt serwce, for F~scal Year 1998 through F~scal Year 2002. Coverage of debt service on the water and sewer revenue bonds and the general obhgabon bonds ~ssued for water and sewer purposes ~s shown separately from the coverage of debt serwce on all bonds ~ssued for water and sewer purposes A-53 SYSTEM OPERATING REVENUES, EXPENSES AND COVERAGE (in thousands of dollars) Operating Revenues Service Charges Water Usage M~scellaneous Total Operating Revenues 1998 1999 2000 2001 2002 $28,822 $28,237 $28,062 $28,530 $30,725 39,983 41,307 40,535 40,432 41,213 339 1,483 894 788 767 $68,144 $71,027 $69,491 $69,750 $72,705 Operating Expenses Water Treatment (Services) Water D~stnbubon Sewer Collecbon Adm~mstrabon and Engmeenng Customer Services Total Operating Expenses Net Operabng Income $28,875 $32,325 $24,641 $24,991 $25,542 4,775 5,857 6,119 6,598 6,638 6,539 7,398 7,445 7,779 8,848 11,034 10,660 10,929 10,446 10,549 4,927 5,264 5,461 7,326 7,211 $56,150 $61,504 $54,595 $57,140 $58,788 $11,994 $ 9,523 $14,896 $12,610 $13,917 Non-Operating Income Interest Water Resource Recovery Fee Sewer Connecbon Fees Sale of Salvage* Norfolk Water True-Up Total Non-Operating Income Income Avadable For Debt Service $ 3,969 $ 3,359 $ 3,603 $ 5,378 $ 2,924 3,835 4,579 4,017 4,122 4,699 1,645 2,411 2,073 2,091 1,965 - - - 46 44 4,466 : 5,448 694 2,609 $13,915 $10,349 $15,141 $12,331 $12,241 $25~909 $19,872 $30,037 $24,941 $26,158 Annual Debt Service Water and Sewer Revenue Bonds Total Water and Sewer Debt Service Coverage of Debt Service on Water and Sewer Revenue Bonds Coverage of Debt Serwce on All Debt Supported by Water and Sewer Revenues * Includes sale of salvage starting ~n 2001 $ 5,689 $ 6,000 $ 6,408 $ 7,581 $ 9,281 11,658 11,930 12,383 11,569 13,261 4 55x 3 31x 4 69x 3 29x 2 82x 2 22x 1 67x 2 43x 2 16x 1.97x Source Department of F~nance and Department of Pubhc Uhht~es Water Sales and Services Contracts Unbl the Lake Gaston P~pehne Project was completed ~n late 1997, the C~ty had no ~ndependent water supply and obtained water from the C~ty of Norfolk under a Water Sales Contract and a Water Services Contract The Lake Gaston P~pehne Project was put ~nto service on January 1, 1998. On that date, the C~ty terminated the Water Sales Contract w~th Norfolk except for certain prows~ons which survived unbl June 30, 1999 The Water Services Contract, which obligates Norfolk to receive, treat, and dehver Lake Gaston water to the C~ty, runs through the year 2030 In essence, the C~ty has contracted for water system facd~bes and services related to the storage, transmission and treatment of Lake Gaston water The facd~bes are owned by Norfolk, but dedicated to serving the C~ty through the I~fe of the Water Services Contract Those facd~bes ~nclude A-54 Raw water storage (lakes), Raw water pumping stabons and transmission hnes; Water treatment plant capacity; and Treated water storage, pumping and transmission On a b~enmal bas~s, Norfolk develops projected rates applicable to the C~ty for treated water These projected rates are based upon the uhl~ty bas~s "Cost of Serwce" methodology, which follows traditional ubhty ratemak~ng standards. Under the pnnc~ples of the utd~ty bas~s cost of service allocabons, the C~ty pays for ~ts allocable share of operahons and maintenance expense, cost of the facd~tJes dedicated to serwce the C~ty and serwces prowded by Norfolk, ~nclud~ng a reasonable rate of return on facd~bes dedicated to serving the C~ty. For F~scal Year 2002, the average effecbve projected rate to the C~ty for delivery of bulk treated water was $1 97 per 1,000 gallons On July 1, 2002, that effecbve rate ~ncreased to $2 O0 per 1,000 gallons At the end of the second fiscal year ~n each b~enmal penod, Norfolk's ~ndependent consultant completes and submits to the C~ty a true-up schedule of rates and annual b~ll~ngs apphcable to the prewous two fiscal years reflecbng an allocabon of cost of serwce based on actual costs ~ncurred by Norfolk. Th~s "true-up" prows~on w~ll result ~n a rebate from Norfolk to the C~ty ~n F~scal Year 2003 of approximately $2 6 m~lhon to be credited during the twelve month period of F~scal Year 2003 Th~s amount represents actual payments ~n excess of costs ~ncurred dunng F~scal Years 2000 and 2001 The $2 6 mdhon wdl be used to fund water projects ~denbfled ~n the Capital Improvement Program for F~scal Years 2003-2008 Water and Sewer Capital Improvement Program The Department of Pubhc Ubht~es annually prepares the porbon of the C~ty's Capital Improvement Plan concerning the ~mprovement and extension of the Water and Sewer System According to the C~ty's F~scal Year 2004-2009 CIP, water and sewer ubhty projects ~n the amount of $173,656,389 account for 9 4 percent of overall C~ty capital spending anbc~pated dunng the penod of F~scal Years 2004 to 2009 Future funding for the water and sewer program totals $76 3 m~lhon, of which $48 9 mdhon ~s to be financed w~th water and sewer revenue bonds The following table presents the financing sources expected to meet the s~x-year capital ~mprovement plan for the water and sewer ubhty projects Uhhty Total Esbmated Costs WATER AND SEWER SYSTEM CAPITAL IMPROVEMENT PROGRAM F~scal Year 2004 To Fiscal Year 2009 Financing Plan Sources of Balance To Be Funded Water and Balance Sewer Prewously To Be Revenue Water and Authorized Funded Bonds Sewer Fund HRSD Water $ 51,958,164 Sewer 121,698,225 Total $173,656,389 $25,465,164 $26,493,000 $14,688,000 $111,805,000 $ - 71,870,454 49,827,771 34,23,4,000 14,893,771 700 0,_~_~00 $97,335:618 $76,320,771 $48.922.00. . 0 $26,698,771 $700.00~0 Source Capital Improvement Program for F~scal Years 2004-2009 A-55 The Lake Gaston Project A porbon of the C~ty's Lake Gaston Water Supply Project ~s located w~th~n the Gaston/Roanoke Rapids Hydroelectric Project, which ~s operated by Dominion Power and hcensed by the Federal Energy Regulatory Commission ("FERC") The Gaston/Roanoke Rapids Hydroelectnc Project I~cense expired ~n January 2001, s~nce then, however, Dominion has conbnued to legally operate ~t by reason of the fact that FERC ~s required by law to ~ssue one-year extensions of a hydropower hcense when the rehcens~ng process extends beyond the exp~rabon date of the original I~cense In contrast to the adversanal proceedings that charactenzed the perm~tbng of the C~ty's Lake Gaston Project, the rel~cens~ng process has been a far more cooperabve process among the vanous stakeholders, including North Carohna and V~rgm~a Beach. The stakeholders have negohated a mulb- party settlement agreement that includes terms and cond~bons of a new I~cense for the operabon of Gaston and Roanoke Rapids Reservoirs If FERC determines that the terms and cond~bons m the settlement agreement comply w~th the requirements of law and are ~n the overall pubhc ~nterest, ~t wdl ~ssue a new hcense w~th a term of thirty or forty years, thereby resolving the remaining regulatory ~ssues and uncerta~nbes ~nvolwng the Lake Gaston Project Insurance The C~ty utd~zes a comb~nabon of commercial ~nsurance and self-~nsurance to protect ~ts assets, including employees, money and secunbes and buddings and equipment. C~ty buddings and their contents are covered by an all nsk property insurance program which ~s written w~th a $100,000 per occurrence deducbble. Other types of property ~nsurance are written w~th deducbbles ranging from $5,000 to $50,000 and ~nclude coverage for such ~tems as computer equipment, heavy contractor's type equipment, fine arts and valuable papers All C~ty employees are bonded for $1,000,000 The C~ty ~s pnmanly self-~nsured for the first $2,000,000 of any automobde habd~ty, commercial general habd~ty, pubhc officials' habd~ty and police professional habd~ty claims The C~ty has $10,000,000 of commercial ~nsurance coverage above th~s self-~nsured retenbon on these hnes of risks. The C~ty ~s also pnmanly self-~nsured for workers' compensabon and cames commercial insurance ~n excess of any claims totahng $500,000 ~n any s~ngle occurrence The C~ty's R~sk Management Fund had a cash balance of $9,456,107 as of July 1, 2003. An actuarial study conducted by the firm of AON Worldwide Actuarial Solubons determined that the appropriate s~ze of th~s fund as of July 1, 2003, was $12,024,440, which represented the d~scounted hab~l~ty of the C~ty Commitments and Contingencies The C~ty parbc~pates m a number of federal and state grants, enbtlements, and shared revenues programs. These programs are subject to program comphance audits by the apphcable federal or state agency or their representabves Furthermore, the U S Congress passed leg~slabon called the "S~ngle Audit Act Amendment of 1996" which required most governmental recipients of federal assistance to have an annual ~ndependent organ~zat~on-w~de financial and comphance audit The results thereof are ~ncorporated ~n the audited financial statements for the C~ty for the fiscal year ended June 30, 2002 The amounts, ~f any, of expenditures which may be d~sallowed by these audits cannot be determined at th~s bme although the C~ty expects such amounts, ~f any, to be ~mmatenal A-56 Retirement and Pension Plans The C~ty has elected to parbc~pate ~n the V~rg~n~a Rebrement System ("VRS"), and substanbally all of the full-hme salaried general government and school employees are covered by a rebrement plan, group term hfe insurance, and d~sabd~ty and death benefits Pnor to January 1, 1978, employees contnbuted five percent of their annual salary There ~s presently no employee contnbubon; the C~ty pays the enbre cost If there are ~nsufflc~ent funds to meet the vested benefits of the employees, the C~ty ~s hable The VRS maintains separate accounts for each parbc~pabng Iocahty based on contnbubons made by the Iocahty and the benefits pa~d to former employees The C~ty's contnbubons are actuanally determined by the VRS every two years at rates that prowde for both normal and accrued funding I~abd~ty The VRS bas,s calculation method ~s an entry age normal cost calculation w~th 30 year amorbzabon of the unfunded accrued habd~ty The entry age normal cost method ~s designed to produce normal costs over the working I~febme of the parbc~pabng employees and to permit the amorhzabon of any unfunded I~abd,ty over a period of years The unfunded habd~ty anses because normal costs based on the current benefit formula have not been pa~d throughout the working I~febme of current employees The value of the unpaid normal costs, adjusted for actuarial gains and losses, consbtutes the unfunded habd~ty The last actuanally computed habd~ty was determined as of June 30, 2000, and included amounts for general government and school nonprofessional employees Total habd~ty as of June 30, 2002, both funded and unfunded, follows Actuarial Value Unfunded Actuarial Actuarial of Assets Accrued Accrued General Government Employees School Nonprofessional Employees Total $699,534,703 $(13,781,862) $685,752,841 103,193,396 (,14,188,979) 89,004,417 The overfunded habd~ty of $27,970,841 ~s being amorbzed over 30 years according to a schedule prescnbed by the VRS Employee Relations and Collective Bargaining There were 6,603 C~ty employees 0nclud~ng part-bme and seasonal employees) as of June 30, 2003, and approximately 10,500 School Board employees for the School Year 2002/2003 Some employees are members of umons or trade or professional assoc~abons However, the C~ty does not, and cannot under Wrg~ma law, bargain collecbvely w~th any of ~ts employees The V~rg~n~a General Assembly has rejected several recent leg~slabve proposals to authorize pubhc employees to engage ~n collecbve bargaining Pubhc employees of V~rgm~a or of any county, c~ty, or town in V~rgm~a do not have a lega~ nght to stnke Any such employee who engages ~n any organized stnke or wdlfully refuses to perform h~s/her dubes shall, according to V~rg~n~a law, be deemed to have terminated h~s/her employment Re- employment of any such employee requires court approval A-57 APPENDIX B AUDITED FINANCIAL STATEMENTS OF THE CITY OF VIRGINIA BEACH, VIRGINIA FOR THE FISCAL YEAR ENDED JUNE 30, 2002 APPENDIX C PROPOSED FORM OF BOND COUNSEL OPINION PROPOSED FORM OF BOND COUNSEL OPINION Set forth below ~s the proposed form of op~mon of Bond Counsel It ~s preliminary and subject to change prior to dehvery of the Series 2003A Bonds C~ty of V~rg~n~a Beach Development Authority V~rg~ma Beach, V~rg~n~a City of Virginia Beach Development Authority Public Facility Revenue Bonds~ Series 2003A Lad~es and Gentlemen We have examined the apphcable law, ~nclud~ng Chapter 643 of the V~rg~ma Acts of Assembly of 1964, as amended (the "Act"), and certified cop~es of proceedings and documents relabng to the orgamzabon of the C~ty of V~rgm~a Beach Development Authority (the "Authority"), and the ~ssuance and sale by the Authority of ~ts $ Pubhc Facd~ty Revenue Bonds, Series 2003A (the "Bonds"). Reference ~s made to the form of the Bonds for mformabon concermng their detads, ~nclud~ng payment and redempbon prows~ons, their purposes and the proceedings pursuant to which they are ~ssued Terms used but not defined here~n are defined ~n the Trust Agreement (as hereinafter defined) The Bonds are being ~ssued pursuant to an Agreement of Trust dated as of ,2003 (the "Master Trust Agreement"), between the Authonty and Wachowa Bank, Nabonal Assoc~abon, as Trustee (the "Trustee"), as supplemented by a F~rst Supplemental Agreement of Trust dated as of ., 2003 (the "F~rst Supplemental Agreement" and, together w~th the Master Trust Agreement, the "Trust Agreement"), ~n order to prowde funds to undertake the Senes 2003A Project at the request of the C~ty of V~rg~ma Beach, Virg~ma (the "C~ty") Pursuant to the terms of a Support Agreement dated as of ,2003 (the "Support Agreement"), between the Authority and the C~ty, the Authonty has agreed, subject to appropnahon as descnbed below, to ~ssue the Bonds to finance the Series 2003A Project, and the C~ty has agreed to make Annual Payments under the Support Agreement to the Authority, which are expected to be sufficient to pay the pnnc~pal of and ~nterest on the Bonds. W~thout undertaking to venfy the same by ~ndependent ~nvesbgabon, we have rehed on cert~flcabons by representabves of the Authority and the C~ty as to certain facts relevant to both our op~n~on and requirements of the Internal Revenue Code of 1986, as amended (the "Code"). The Authonty and the C~ty have covenanted to comply w~th the current prows~ons of the Code regarding, among other matters, the use, expenditure and ~nvestment of proceeds of the Bonds and the bmely payment to the Umted States of any arbitrage rebate amounts w~th respect to the Bonds, all as set forth m the proceedings and documents relabng to the ~ssuance of the Bonds (the "Covenants"). Based on the foregoing, and assuming due authonzabon, execubon and dehvery of the Documents (as hereinafter defined) by the Trustee, we are of the op~n~on that: I The Authonty ~s a pohbcal subdivision of the Commonwealth of V~rg~ma duly created under the Act and ~s vested w~th all rights and powers conferred by the Act 2 The Bonds have been duly authonzed and ~ssued ~n accordance w~th the Act and conshtute vahd and b~nd~ng hm~ted obhgahons of the Authonty payable as to both pnnc~pal and interest solely from Annual Payments, certain Add~bonal Payments and other funds pledged under the Trust Agreement The Bonds do not create or conshtute a debt or pledge of the faith and credit of the Commonwealth of V~rg~n~a or any pohbcal subd~ws~on thereof, ~nclud~ng the Authonty and the C~ty. C-] 3 The Trust Agreement, the F~rst Supplemental Agreement and the Support Agreement (the "Documents") have been duly authorized, executed and delivered by, and consbtute vahd and b~nd~ng obl~gabons of, the Authority and the C~ty, as apphcable, and are enforceable against the Authority and the C~ty ~n accordance w~th their terms. The C~ty's obhgabon to make Annual Payments and Add~bonal Payments under the Support Agreement ~s subject to and dependent upon the C~ty Councd of the C~ty making annual appropr~abons for such purpose Such obl~gabon does not consbtute a debt of the C~ty w~th~n the meaning of any consbtubonal or statutory hm~tabon nor a hab~hty of or a I~en or charge upon funds or property of the C~ty beyond any fiscal year for which the C~ty Council has appropriated moneys for such purpose 4 The rights of holders of the Bonds and the enforceabd~ty of such nghts, ~nclud~ng the enforcement by the Trustee of the obl~gabons of the Authority and the C~ty under the Documents, as apphcable, may be hm~ted or otherwise affected by (a) bankruptcy, ~nsolvency, reorgamzabon, moratonum, fraudulent conveyance and other laws affecbng the nghts of creditors generally and (b) pnnc~ples of equity, whether considered at law or ~n equity 5 Under current law, ~nterest, ~nclud~ng accrued ong~nal ~ssue d~scount ("OLD"), on the Bonds (a) ~s not ~ncluded ~n gross ~ncome for Federal ~ncome tax purposes and (b) ~s not an ~tem of tax preference for purposes of the Federal alternative m~n~mum ~ncome tax ~mposed on ~nd~wduals and corporabons, however, w~th respect to corporabons (as defined for federal ~ncome tax purposes) subject to the alternabve m~mmum ~ncome tax, such ~nterest, ~nclud~ng accrued OlD, ~s taken ~nto account ~n determ~mng adjusted current earnings for purposes of comput,ng such tax The op~mon set forth ~n the preceding sentence ~s subject to the condition that there ~s compliance subsequent to the ~ssuance of the Bonds w~th all requirements of the Code that must be satisfied ~n order that ~nterest on the Bonds not be ~ncluded ~n gross ~ncome for Federal ~ncome tax purposes Fadure by the Authority and the C~ty to comply w~th the Covenants, among other th~ngs, could cause ~nterest, ~nclud~ng accrued OlD, on the Bonds to be ~ncluded ~n gross ~ncome for Federal ~ncome tax purposes retroacbvely to their date of ~ssue In the case of the Bonds matunng ,n the years through __ (the "OLD Bonds"), the d~fference between (0 the stated pnnc~pal amount of each maturity of the OlD Bonds and (~) the ~n~t~al offenng price to the pubhc (excluding bond houses and brokers) at which a substanbal amount of such maturities of OlD Bonds ~s sold wdl consbtute OlD, OlD w~ll accrued for Federal ~ncome tax purposes on a constant y~eld-to-matunty method, and a holder's bas~s ~n such a Bond wdl be ~ncreased by the amount of OlD treated for Federal ~ncome tax purposes as hawng accrued on such Bond wh,le the holder holds the Bond We express no op~n~on regarding other Federal tax consequences of the ownership of or receipt or accrual of ~nterest on the Bonds Further, we express no op~mon as to the treatment for Federal ~ncome tax purposes of any ~nterest pa~d on the Bonds ~n the event of nonappropnat~on by the C~ty. 6 Under current law, ~nterest, ~nclud~ng accrued OlD, on the Bonds ~s exempt from ~ncome taxabon by the Commonwealth of Wrg~n~a and any pohbcal subdivision thereof Our services as bond counsel to the Authority have been hm~ted to rendenng the foregoing op~n~on based on our rewew of such proceedings and documents as we deem necessary to approve the vahd~ty of the Bonds and the tax-exempt status of ~nterest thereon We express no open,on here~n as to the financial resources of the C~ty, the ab~hty or w~lhngness of the C~ty to make Annual Payments or the accuracy or completeness of any ~nformabon, ~nclud~ng the Authonty's Prehm~nary Official Statement dated , 2003, and ~ts Official Statement dated , 2003, that may have been rehed upon by anyone ~n making the decision to purchase Bonds Very truly yours, APPENDIX D FORM OF CONTINUING DISCLOSURE AGREEMENT CONTINUING DISCLOSURE AGREEMENT Th~s CONTINUING DISCLOSURE AGREEMENT dated ,2003 (the "D~sclosure Agreement"), ~s executed and dehvered by the C~ty of V~rgm~a Beach, V~rg~n~a (the "C~ty"), ~n connection w~th the ~ssuance by the C~ty of V~rg~n~a Beach Development Authority (the "Authonty") of ~ts $ Pubhc Facility Revenue Bonds, Senes 2003A (the "Series 2003A Bonds"). The C~ty hereby covenants and agrees as follows Section 1. Purpose. Th~s D~sclosure Agreement ~s being executed and dehvered by the C~ty for the benefit of the holders of the Senes 2003A Bonds and ~n order to assist the purchasers of the Series 2003A Bonds ~n complying w~th the provisions of Secbon (b)(5)(0 of Rule 15c2-12 (the "Rule") promulgated by the Secunt~es and Exchange Commission (the "SEC") by prowd~ng certain annual hnanc~al ~nformabon and mater~al event nobces required by the Rule (collectively, "Conbnu~ng D~sclosure"). Section 2. Annual Disclosure. (a) The C~ty shall provide annually certain financial mformahon and operabng data ~n accordance w~th the prows~ons of Sechon (b)(5)(0 of the Rule as follows (0 audited hnanc~al statements of the C~ty, prepared ~n accordance w~th generally accepted accounting principles, and (~) the operating data w~th respect to the C~ty of the type descnbed m the secbon of Appendix A of the Author~ty's Ofhc~al Statement dated ,2003, entitled "FINANCIAL INFORMATION -- Operating Data" If the financial statements filed pursuant to Secbon 2(a)(0 are not audited, the C~ty shall file such statements as audited when avadable. (b) The C~ty shall provide annually the hnanc~al ~nformahon and operating data described ~n subsechon (a) above (collecbvely, the "Annual D~sclosure") w~th~n 180 days after the end of the C~ty's fiscal year, commencing w~th the C~ty's fiscal year ending June 30, 2004, to each nationally recognized municipal secunhes ~nformabon repository ("NRMSIR") and to the appropnate state ~nformabon depository ~f any then exists ("SID") (c) Any Annual D~sclosure may be ~ncluded by specific reference to other documents prewously prowded to each NRMSIR and to the SID or filed w~th the SEC, prowded, however, that any hnal ofhc~al statement ~ncorporated by reference must be avadable from the Municipal Secunt~es Rulemak~ng Board (the "MSRB") (d) The C~ty shall prowde ~n a t~mely manner to each NRMSIR or the MSRB and to the SID not~ce specifying any fa,lure of the C~ty to prowde the Annual D~sclosure by the date specified Section 3. Event Disclosure. The C~ty shall provide ~n a bmely manner to each NRMSIR or the MSRB and to the SID nohce of the occurrence of any of the following events w~th respect to the Ser~es 2003A Bonds, ~f matenal (a) pnnc~pal and ~nterest payment dehnquenc~es; (b) non-payment related defaults, (c) unscheduled draws on debt service reserves reflecting hnanc~al d~fflcult~es, (d) unscheduled draws on any credit enhancement reflecting hnanc~al d#flcult~es, (e) substitution of credit or hqu~d~ty providers, or their failure to perform, D-1 (f) adverse tax op~mons or events affecbng the tax-exempt status of the Ser~es 2003A Bonds, (g) mod~flcabons to r~ghts of Bondholders, (h) bond calls; defeasance of all or any port~on of the Senes 2003A Bonds, 0) release, subsbtuhon, or sale of property secunng repayment of the Senes 2003A Bonds, and (k) rabng changes. Section 4. Termination. The obhgabons of the C~ty w~ll terminate upon the redempbon, defeasance (within the meaning of the Rule) or payment in full of all the Ser~es 2003A Bonds Section 5. Amendment. The C~ty may modify ~ts obhgabons hereunder w~thout the consent of Bondholders, provided that this Disclosure Agreement as so modified complies w~th the Rule as it exists at the hme of mod~flcahon The C~ty shall w~th~n a reasonable bme thereafter send to each NRMSIR and the SID a descnphon of such modification(s). Section 6. Defaults. (a) If the C~ty fads to comply w~th any covenant or obhgabon regarding Conhnu~ng D~sclosure spec~hed m th~s D~sclosure Agreement, any holder (w~th~n the meamng of the Rule) of Senes 2003A Bonds then outstanding may, by nobce to the C~ty, proceed to protect and enforce ~ts nghts and the r,ghts of the holders by an achon for specific performance of the C~ty's covenant to prowde the Conbnumg D~sclosure (b) Notwithstanding anything here~n to the contrary, any fadure of the C~ty to comply w~th any obhgatlon regarding Continuing D~sclosure specified In th~s Disclosure Agreement (0 shall not be deemed to conshtute an event of default under the Senes 2003A Bonds or the Agreement of Trust, as defined ~n the Senes 2003A Bonds, prowd~ng for the ~ssuance of the Ser~es 2003A Bonds and (.) shall not g~ve rise to any nght or remedy other than that descnbed ~n Secbon 6(a) above Section 7. Additional Disclosure. The C~ty may from hme to t~me d~sclose certain ~nformabon and data ~n add~bon to the Conbnumg D~sclosure Notwithstanding anything hereto to the contrary, the C~ty shall not ~ncur any obhgabon to continue to prowde, or to update, such additional ~nformabon or data. Section 8. Counterparts. Th~s D~sclosure Agreement may be executed ~n several counterparts each of wh,ch shall be an ongmal and all of which shall conshtute but one and the same instrument Section 9. Governing Law. Th,s D~sclosure Agreement shall be construed and enforced ~n accordance w~th the laws of the Commonwealth of V~rg~ma CITY OF VIRGINIA BEACH, VIRGINIA By Mayor, C~ty of V~rg~ma Beach, V~rg~ma By. C~ty Manager, C~ty of V~rg~n~a Beach, V~rg~n~a D-2 APPENDIX E INFORMATION REGARDING THE DEPOSITORY TRUST COMPANY AND ITS BOOK-ENTRY SYSTEM INFORMATION REGARDING THE DEPOSITORY TRUST COMPANY AND ITS BOOK-ENTRY SYSTEM The description which follows of the procedures and recordkeeping with respect to beneficial ownership interests in the Series 2003A Bonds, payments of principal of and premium, if any, and interest on the Series 2003A Bonds to The Depository Trust Company, New York, New York ("DTC"), its nominee, Participants or Beneficial Owners (each as hereinafter defined), confirmation and transfer of beneficial ownership interests in the Series 2003A Bonds and other bond-related transactions by and between DTC, Participants and Beneficial Owners is based solely on information furnished by DTC. DTC wdl act as secunbes depository for the Bonds. The Bonds wdl be ~ssued as fully-registered secunbes registered ~n the name of Cede & Co, DTC's partnership nominee, or such other name as may be requested by an authonzed representabve of DTC One fully-registered Bond cerbflcate wdl be ~ssued for each matunty of the Bonds, each ~n the aggregate pnnc~pal amount of such matunty, and w~ll be deposited w~th DTC DTC, the world's largest depository, ~s a hm~ted-purpose trust company organized under the New York Banking Law, a "banking organ~zabon" w~th~n the meaning of New York Banking Law, member of the Federal Reserve System, a "cleanng corporabon" w~th~n the meaning of the New York Un~form Commercial Code, and a "cleanng agency" registered pursuant to the prows~ons of Sechon 17A of the Secunbes Exchange Act of 1934 DTC holds and prowdes asset servicing for over 2 m,ll~on ~ssues of U S and non-U S equity ~ssues, corporate and mumc~pal debt ~ssues, and money market ~nstruments from over 85 counbes that DTC's parbc~pants (the "D~rect Parbc~pants") deposit w~th DTC DTC also facd~tates the post-trade settlement among D~rect Partm~pants of sales and other secunbes transacbons ~n deposited secunbes, through electromc computenzed book-entry transfers and pledges between D~rect Parbc~pants' accounts Th~s ehm~nates the need for physical movement of secunbes cerbflcates. D~rect Participants include both U.S and non-U S secunbes brokers and dealers, banks, trust companies, cleanng corporabons, and certain other organ~zabons. DTC ~s a wholly-owned subsidiary of The Depository Trust & Cleanng Corporabon ("DTCC") DTCC, ~n turn, ~s owned by a number of D~rect Parbc~pants of DTC and Members of the Nabonal Secunbes Cleanng Corporabon, Government Secunbes Cleanng Corporabon, MBS Cleanng Corporabon, and Emerging Markets Cleanng Corporabon ("NSCC," "GSCC,", "MBSCC" and "EMCC", also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc, the Amencan Stock Exchange LLC, and the National Assoc~abon of Secunbes Dealers, Inc Access to the DTC system ~s also available to others such as both U S. and non-U S secunbes brokers and dealers, banks, trust companies, and clearing corporabons that clear through or maintain a custodial relabonsh~p w~th a D~rect Parhc~pant, e~ther d~rectly or ~nd~rectly (the "Indirect Parbc~pants") DTC has Standard & Poor's h~ghest rabng: AAA The DTC Rules applicable to ~ts Parhc~pants are on file w~th the Secunbes and Exchange Commission More ~nformabon about DTC can be found at www dtcc com Purchases of the Bonds under the DTC system must be made by or through D~rect Parbc~pants, which wdl receive a credit for the Bonds on DTC's records The ownership ~nterest of each actual purchaser of each Bond (the "Beneficial Owner") ~s ~n turn to be recorded on the D~rect and Indirect Parbc~pants' records Beneficial Owners w~ll not receive wntten conflrmahon from DTC of their purchase Beneficial Owners are, however, expected to receive wntten conflrmabons providing detads of the transacbon, as well as penod~c statements of their holdings, from the D~rect or Indirect Parbc~pant through which the Beneficial Owner entered ~nto the transacbon. Transfers of ownership ~nterests m the Bonds are to be accomphshed by entries made on the books of D~rect or Indirect Parbc~pants acbng on behalf of Beneficial Owners Beneficial Owners wdl not receive cerbflcates represenbng their ownership ~nterests ~n the Bonds, except m the event that use of the book-entry system for the Bonds ~s d~sconbnued To facd~tate subsequent transfers, all Bonds deposited by D~rect Parbc~pants w~th DTC are registered ~n the name of DTC's partnership nominee, Cede & Co, or such other name as may be requested by an authonzed representative of DTC The deposit of the Bonds w~th DTC and their reg~strabon ~n the name of Cede & Co or such other DTC nominee do not effect any change ~n beneficial ownership DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the ~dent,ty of the D~rect Parbc~pants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The D~rect and Indirect Parbc~pants w~ll remain responsible for keeping account of their holdings on behalf of their customers Conveyance of nobces and other communications by DTC to D~rect Part,c~pants, by D~rect Parbc~pants to Indirect Participants, and by D~rect Parbc~pants and Indirect Parbc~pants to Beneficial Owners w~ll be governed by arrangements among them, subject to any statutory or regulatory requirements as may be ~n effect from bme to bme Redempbon notices shall be sent to DTC. If less than all of the Bonds are being redeemed, DTC's practice ~s to determine by lot the amount of the ~nterest of each D~rect Parbc~pant ~n such ~ssue to be redeemed Neither DTC nor Cede & Co. (nor any other DTC nominee) w~ll consent or vote w~th respect to the Bonds unless authonzed by a D~rect Parbc~pant ~n accordance w~th DTC's Procedures Under ~ts usual procedures, DTC ma~ls an Omnibus Proxy to the Authonty or the Trustee as soon as possible after the record date. The Ommbus Proxy assigns Cede & Co's consenbng or vobng rights to those D~rect Parbc~pants to whose accounts the Bonds are cred,ted on the record date (~denbfled ~n a I~sbng attached to the Omnibus Proxy) Pnnc~pal of and, premium, ~f any, and ~nterest payments on the Bonds w~ll be made to Cede & Co, or such other nominee as may be requested by an authorized representabve of DTC DTC's practice ~s to credit D~rect Parbc~pants' accounts upon DTC's receipt of funds and corresponding detail ~nformabon from the Trustee on payable date ~n accordance w~th their respecbve holdings shown on DTC's records Payments by Parbc~pants to Beneficial Owners w~ll be governed by stand~ng ~nstrucbons and customary pracbces, as ~s the case w~th securities held for the accounts of customers ~n bearer form or registered ~n "street name," and w~ll be the respons~b~hty of such D~rect or Indirect Parbc~pant and not of DTC (nor ~ts nominee), the Trustee, or the Authority, subject to any statutory or regulatory requirements as may be ~n effect from bme to t~me. Payment of pnnc~pal, premium, ~f any, and ~nterest to Cede & Co. (or such other nominee as may be requested by an authorized representabve of DTC) ~s the respons~b~hty of the Authority or the Trustee, d~sbursement of such payments to D~rect Parbc~pants shall be the responsibility of DTC, and d~sbursement of such payments to the Beneficial Owners shall be the respons~b~hty of D~rect and Indirect Parbc~pants DTC may d~sconbnue prowd~ng ~ts services as secunbes depository w~th respect to the Bonds at any t~me by g~wng reasonable nobce to the Authority or the Trustee Under such c~rcumstances, ~n the event that a successor secunbes depository ~s not obtained, Bond cerbflcates wdl be pnnted and dehvered The Authority, at the d~recbon of the C~ty, may dec~de to d~sconbnue use of the system of book- entry transfers through DTC (or a successor secunbes depository). In that event, Bond cerbflcates w~ll be pnnted and delivered The ~nformabon ~n th~s secbon concerning DTC and DTC's book-entry system has been obtained from sources that the Authority and the C~ty believe to be reliable, but the Authority and the C~ty take no responsibility for the accuracy thereof NEITHER THE AUTHORITY, THE CITY NOR THE TRUSTEE HAS ANY RESPONSIBILITY OR OBLIGATION TO THE DIRECT OR INDIRECT PARTICIPANTS OR THE BENEFICIAL OWNERS WITH RESPECT TO (A) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DIRECT OR INDIRECT PARTICIPANT, (B) THE PAYMENT BY ANY DIRECT OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL OF AND PREMIUM, IF ANY, AND INTEREST ON THE BONDS, (C) THE DELIVERY OR TIMELINESS OF DELIVERY BY ANY DIRECT OR INDIRECT PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER THAT IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE TRUST AGREEMENT TO BE GIVEN TO BONDHOLDERS; OR (D) ANY OTHER ACTION TAKEN BY DTC, OR ITS NOMINEE, CEDE & CO , AS BONDHOLDER, INCLUDING THE EFFECTIVENESS OF ANY ACTION TAKEN PURSUANT TO AN OMNIBUS PROXY So long as Cede & Co ~s the registered owner of the Bonds, as nominee of DTC, references ~n th~s Official Statement to the Owners of the Bonds shall mean Cede & Co and shall not mean the Beneficial Owners, and Cede & Co w~ll be treated as the only holder of Bonds for all purposes under the Trust Agreement. The Authority may enter ~nto amendments to the agreement w~th DTC or successor agreements w~th a successor secunt~es depository, relating to the book-entry system to be maintained w~th respect to the Bonds w~thout the consent of Beneficial Owners or Bondholders APPENDIX F OFFICIAL NOTICE OF SALE AND BID FORM OFFICIAL NOTICE OF SALE CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY (VIRGINIA) $165,000,000 PUBLIC FACILITY REVENUE BONDS, SERIES OF 2003A Electromc bids only will be received by the Clty of VtrgmIa Beach Development Authority (Vlrgima) (the "Authority"), m accordance with flus Official Notice of Sale until 11 '00 a.m., Local Time, on Tuesday, September 9, 2003 (the "Date of Sale"). In the case of a malfunction in submitting an electromc bid, facsimile bids will be allowed, as more fully described below. Immediately thereafter, the bids will be publicly announced, and the Clty Manager of the City of Vn'glma Beach, Virginia (the "City"), on behalf of the Authority, will act upon the bids by 2 00 p.m, Local Time. Bid Submission Solely as an accommodation to bidders, electromc bids via BIDCOMP/PARITY (the "Electromc Bidding System") will be accepted m accordance with tbas Official Notice of Sale The Authority is using BIDCOMP/PARITY as a communication mechanism to conduct the electromc bidding for the sale of $165,000,000 Public Facility Revenue Bonds, Series of 2003A (the "Bonds"), as described herein To the extent any instructions or dtrectlons set forth m BIDCOMP/PARITY conflict with th~s Official NoUce of Sale, the terms of flus Official Notice of Sale shall control. Each bidder subrmtting an electronic bad agrees (a) that it IS solely responsible for all arrangements with BIDCOMP/PARITY, (ii) that BIDCOMP/PARITY is not acting as the agent of the Authority, and (all) that the Authority is not responsible for ensunng or verifying bidder comphance with any of the procedures of BIDCOMP/PARITY. The Authority assumes no responsibility for, and each bidder expressly assumes the risks of and responsibility for, any Incomplete, inaccurate or untimely bad submitted by such bidder through BIDCOMP/PARITY Each bidder shall be solely responsible for making necessary arrangements to access the Electromc Bidding System for purposes of subrmtting its bid in a timely manner and m comphance with the requirements of this Official Notice of Sale Neither the Authority nor the Electronic Bidding System shall have any duty or obligation to provide or assure such access to any bidder, and neither the Authority nor BIDCOMP/PARITY shall be responsible for proper operation of, or have any liability for, any delays or interruptions of, or any damages caused by, BIDCOMP/PARITY For further information about BIDCOMP/PARITY, potential bidders may contact Dalcomp at 40 West 23rd Street, New York, New York 10010, telephone (212) 404-8102 In the event of a malfunction of the Electromc Bidding System, facslrmle transrmssion bids will be accepted up to 11.00 a.m., Local Tune, on the Date of Sale. Bidders choosing to subrmt bids in the case of a malfunction by facsIrmle transmission shall use the following telecopier numbers for such transrmsslon. (757) 427- 4302 or (757) 563-1918 (Attention. Patncia A Phillips) Transmissions received after the deadline shall be rejected It is the responslbihty of the bidder to ensure that the bid is legible, that the bid is received not later than 11:00 a m, Local Time, and that the bid is sent to one of the telecopier numbers set forth above. Illegible transrmssions shall be rejected. The City's financial advisors (Government Finance Associates, Inc. and ARD Government Finance Group, collecttvely the "Financial Advisors") will, on behalf of the Authority, verify recelpt of each bid subnutted through facsimile transmission by contacting each bidder by telephone once the bid has been received The City's Financial Advisors will m no Instance correct, alter or in any way change b~ds submitted through facsimile transmission. The Authority, the City and the City's Financial Advisors will not be responsible for bids subrmtted by facsimile transmission not received in accordance with the provisions of this Official Notice of Sale. Bidders electing to submit bids via facsirmle transnussion will bear full and complete responslbihty for the transmission of such bid Each bid must be unconditional. Principal Redemption The Bonds will be pubhc faclhty revenue bonds of the Authority, dated September 1, 2003 (the "Dated Date"), and will mature serially or be subject to mandatory sinking fund redemptions on December 1 m the years and amounts shown below. Due December 1 Amount Due December 1 Amount 2004 $ 3,865,000 2014 $ 8,010,000 2005 4,595,000 2015 8,470,000 2006 5,945,000 2016 8,950,000 2007 6,255,000 2017 9,450,000 2008 6,570,000 2018 9,965,000 2009 6,225,000 2019 10,505,000 2010 6,540,000 2020 11,080,000 2011 6,880,000 2021 11,665,000 2012 7,235,000 2022 12,285,000 2013 7,600,000 2023 12,910,000 Serial Bonds, Term Bonds and Mandatory Sinking Fund Redemptions Bidders may provide in the bid form for all of the Bonds to be issued as serial Bonds or may designate consecutive annual principal amounts of the Bonds to be combined Into not more than two Term Bonds In the event that a bidder chooses to specify a Term Bond, each such Term Bond shall be subject to mandatory sinking fund redemption commencing on December 1 of the first year which has been combined to form such Term Bond and continuing on December 1 in each year thereafter until the stated maturity of such Term Bond The amount redeemed in any year shall be equal to the pnncIpal amount for such year set forth an the amortization schedule above. Bonds to be redeemed m any year by mandatory smkmg fund redemption shall be redeemed at par and shall be selected by lot from among the Bonds of the maturity being redeemed. Description of the Bonds; Book-Entry Only System The Bonds will be issued by means of a book-entry system with no distribution of physical Bond certificates made to the pubhc One Bond certificate for each maturity will be issued to The Depository Trust Company, New York, New York ("DTC"), or its nonunee, and ammoblhzed in its custody The book-entry system wall evidence beneficial ownership of the Bonds in principal amounts of $5,000 or multiples thereof, with transfers of beneficial ownership effected on the records of DTC and its participants pursuant to rules and procedures established by DTC and its participants Bond certificates registered In the name of Cede & Co will be deposited with DTC Interest on the Bonds will be paid semiannually on June 1 and December l, beginmng June l, 2004, and principal on the Bonds will be paid annually on December l, beginning December l, 2004, to DTC or ~ts normnee as registered owner of the Bonds. Transfer of pnnclpal and interest payments to beneficial owners by pamclpants of DTC will be the responsIblhty of such participants and other nominees of beneficml owners. The Authority will not be responsible or liable for maintaining, supervising or reviewing the records maintained by DTC, its participants or persons acting through such participants DTC may discontinue providing ItS serwces as securities depository with respect to the Bonds at any time by g~wng reasonable notice to the Authority. Under such c~rcumstances, an the event that a successor secuntaes deposatory as not obtained, Bond certificates are reqmred to be prepared, executed and delivered. The Authority may decade to dascontmue use of the system of book-entry transfers through DTC (or a successor securities deposatory). In that case, either a successor depository will be selected by the Authority or Bond certfficates will be prepared, executed and dehvered. Optional Redemption The Bonds that mature or are subject to mandatory smkang fund redemption on or before December 1, 2013, are not subject to optional redemptaon praor to thetr stated maturities The Bonds that mature on and after December 1, 2014, will be subject to redemptaon beginning December 1, 2013, m whole or an part at any time, at the option of the Authority and at the dlrectaon of the Caty, upon payment of the par amount of pnncapal so redeemed plus anterest accrued and unpmd to the redemptaon date. If less than all of the Bonds are called for redemptaon, the Bonds to be redeemed shall be selected by the Authority at the darectaon of the City. If less than all of the Bonds of a pamcular maturity are called for redemptaon, DTC or any successor secunttes deposatory will select the Bonds to be redeemed pursuant to ats rules and procedures or, af the book-entry system as dascontmued, the Bonds to be redeemed will be selected by the Trustee. In eather case, each portaon of the $5,000 prmcapal amount is counted as one Bond for such purpose. The Authority, at the direction of the Caty, will cause notice of the call for redemptaon adentlfylng the Bonds or pomons thereof to be redeemed to be sent by facslmale transnusslon, registered or certffied mad or overnight express dehvery, not less than 30 nor more than 60 days prior to the redemption date, to the regastered owner thereof The Authority shall not be responsable for maal~ng notme of redemptaon to anyone other than DTC or another quahfied secuntaes deposatory or ~ts nominee unless no quahfied securltaes deposatory as the regastered owner of the Bonds If no quahfied sectmt~es deposatory as the regastered owner of the Bonds, notme of redemptaon shall be maaled to the regastered owners of the Bonds by the Trustee (as hereanafter defined). If a portaon of a Bond as called for redemption, a new Bond m pnnc~pal amount equal to the unredeemed pomon shall be ~ssued to the registered owner upon the surrender thereof. Security The Bonds are secured by a support agreement (the "Support Agreement") between the Authority and the Caty, whmh as obhgated under such agreement to make payments to the Authority that will be sufficient to pay the principal of and anterest on the Bonds as the same shall become due an accordance with thear terms and provasaons and the terms of the Agreement of Trust dated as of ,2003 (the "Agreement of Trust"), between the Authority and , as trustee (the "Trustee"). The obhgataon of the Caty to make payments under the Support Agreement constttutes a current expense of the Caty, subject to annual approprlataon by the City Council. The Caty wall not be liable for any such payments under the Support Agreement unless and until fimds have been appropriated by the Caty Council for payment and then only to the extent of such approprlataon The Support Agreement requires the City to pay to the Trustee, as assagnee of the Authority, annual payments in amounts and on or before dates calculated to be sufficient to pay principal of and ~nterest when due on the Bonds Use of Bond Proceeds As described m more detail m the Authonty's Prehmmary Official Statement dated 2003, thc Bonds are being issued for the purpose of provadang funds for various pubhc amprovements and to pay the costs of issuance related to the Bonds. Bidding Rules; Award of Bonds Badders may only bid to purchase all of the Bonds. Badders are lnvated to name the rate or rates of interest per annum whach the Bonds are to bear m multiples of one-twentaeth (1/20th) or one-eaghth (1/8th) of one percent All Bonds maturing on the same date must bear interest at the same rate. Any number of rates may be named provided that (a) the highest rate of mterest may not exceed the lowest rate of ~nterest by more than 3 percentage points, and (b) the highest rate of interest stated for any maturity may not exceed 7% per annum No bid for less than par plus accrued interest (computed on the basis of a 360-day year and twelve 30-day months) from the Dated Date to the delivery of the Bonds shall be considered The Authority reserves the right to reject any or all bids (regardless of the interest rate bid), to reject any bld not complying with this Official Notice of Sale and, so far as permitted by law, to waive any irregularity or informality with respect to any bid or the bidding process As promptly as reasonably possible after the bids are received, the Authority will notify the bidder to whom the Bonds will be awarded, If and when such award is made Such bidder, upon such notice, shall advise the Authority of the initial reoffering prices or yields to the public of each maturity of the Bonds (the "Imtial Reoffenng Prices or Yields") and details regarding the anticipated use of a mumcIpal bond Insurance policy, If any, in connection with the Bonds The successful bidder must sell to the public 10% or more in par amount of the Bonds from each maturity at the Initial Reoffermg Prices or Yields The wanmng bid will remmn firm for a period of no less than five hours after the time specified for the opening of bids An award of the Bonds, if made, will be made by the City Manager, on behalf of the Authority, within such five hour period or, with the express consent of the winmng bidder, such longer time period as deemed necessary Unless all bids are rejected, the Bonds will be awarded to the bidder complying with the terms of tins Official Not,ce of Sale and submitting a bid which provides the lowest "tree" interest cost to the Authority True interest cost shall be determined for each bid by doubhng the sermannual Interest rate, compounded sermannually, necessary to discount the debt service payments from the payment dates to the Dated Date and to the bid price, such bid price excluding interest accrued to the date of settlement If more than one bid offers the same lowest tree ~nterest cost, the successful bid will be selected by the City Manager, on behalf of the Authority, by lot The Authority reserves the right, after the award of the Bonds to the successful bidder, to increase or decrease by up to ten percent (10%) the pnncipal amount of the Bonds being offered hereby The Authority may choose not to exercise such right to Increase or decrease the principal amount of the Bonds being offered. Should the Authority decide to exercise this right, any such increase or decrease In the principal amount of particular maturities of the Bonds will be commumcated to the successful bidder by 5.00 p m, Local Time, on the date of sale. The dollar amount bid for the principal of the Bonds by the successful bidder will be adjusted as necessary to reflect any increase or decrease m the principal amount of the applicable maturities of the Bonds so adjusted, but the interest rates specified by the successful bidder for each maturity will not be altered Such adjusted dollar amount bid will not change the successful bidder's compensation per $1,000 of par amount of the Bonds from that which would have resulted from the bid submitted. The successful bidder may not withdraw its bid as a result of any change made wittun the foregoing llrmts Bids for the Bonds shall not be conditioned upon obtaining Insurance or any other credit enhancement. If a bidder proposes to obtain a policy of mumclpal bond insurance or any other credit enhancement, any such purchase of insurance or commitment therefor shall be at the sole option and expense of the bidder, and the bidder must pay any increased costs of Issuance of the Bonds as a result of such insurance or comnutment Any failure by the bidder to obtain such a policy of insurance shall not in any way relieve such b~dder of its contractual obligations arising from the acceptance of ItS bid for the purchase of the Bonds. Good Faith Deposit Each bid must be accompamed by a certified or casiner's check for $1,650,000 drawn upon an Incorporated bank or trust company authorized to transact business in the Commonwealth of Virginia or m the City of New York and payable unconditionally to the order of the City of Vlrglma Beach Development Authority to secure the Authority against any loss resulting from the failure of the successful bidder to comply with the terms of its bid. The check of the successful bidder will be deposited and credited toward the purchase price, and no interest will be allowed thereon to accrue to the benefit of the successful bidder The proceeds of the check will be retained by the Authority as hquidated damages in case the successful bidder fails to accept dehvery of and pay for the Bonds. Checks of unsuccessful bidders will be returned promptly upon award of the Bonds Bidders must also clearly indicate to whom the check should be returned in the event of an unsuccessful bid In lieu of the check described above, the deposit may be m the form of a Financial Surety Bond In the amount of $1,650,000 payable to the Authority. The Financial Surety Bond must be from an insurance company acceptable to the Authority and licensed to issue such a bond m the Commonwealth of Vlrglma, and such Financial Surety Bond must be submitted to the Authority prior to the opening of the bids and must be an a form acceptable to the Authority The Financial Surety Bond must identify each bidder whose deposit is guaranteed by such Financial Surety Bond. If the Bonds are awarded to a bidder utilizing a Financial Surety Bond, then such successful bidder IS required to subrmt ars deposit to the Authority in the form of a cashier's or certified check or wtre transfer not later than 11:00 a.m, Local Time, on the next business day following the award. If such deposit is not received by such time, the Financial Surety Bond may be drawn by the Authority to satisfy the deposit requirement Bidders subnutang an electromc or facsirmle bid must deliver the good faith check (or, m lieu thereof, a Financial Surety Bond) by 10.00 a.m., Local Time, on September 9, 2003, to, on behalf of the Authority, Patncia A. Pbalhps, Dtrector of Finance, Vtrglma Beach Mumclpal Center, City Hall Building, Room 202, Virginia Beach, Vxrglma 23456 Delivery of the Bonds The Bonds will be delivered at the expense of the City in New York, New York, through the facilities of DTC on or about September 24, 2003 Concurrently with the dehvery of the Bonds, the Authority will furnish to the successful bidder without cost (a) certificates dated the date of delivery of the Bonds, signed by the appropriate Authority and City officials and stating that no litigation of any kind IS then pending or, to the best of their information, knowledge and belief, threatened against the Authority or the City to restrain or enjoin the issuance or delivery of the Bonds and (b) certificates dated the date of delivery of the Bonds, stating that the descriptions and statements in the Official Statement (except in the sections entitled "Book-Entry System" and "Tax Exemption" and in the columns "Price/ Yield" and "CUSIP No." on the Inside cover), on the date of the Official Statement and on the date of delivery of the Bonds, were and are tree and correct m all material respects, did not and do not contam an untrue statement of a material fact or ormt to state a material fact required to be stated therein or necessary to make such descriptions and statements, in light of the circumstances under which they were made, not nusleadlng. Such certificates will also state, however, that such Authority and City officials did not independently verify the Information indicated in the Official Statement as having been obtained or derived from sources other than the Authority or City and ItS officers but they have no reason to believe that such information is not accurate. Certificate of Winning Bidder The successful bidder must, by facsimile transmission or overmght delivery received by the C~ty, on behalf of the Authority, within 24 hours after receipt of the bids for the Bonds, furmsh the following ~nformat~on to the Authority to complete the Official Statement in final form, as described below Ao The offenng prices for the Bonds (expressed as the price or yield per maturity, exclusive of any accrued Interest). Selling compensation (aggregate total anticipated compensation to the underwriters expressed in dollars, based on the expectation that all Bonds are sold at the prices or yields described m Subpart A above) C The ~dentlty of the underwriters if the successful bidder IS a part of a group or syndicate. Any other material information necessary to complete the Official Statement in final form but not known to the Authority Prior to the delivery of the Bonds, the successful bidder shall furnish to the Authority a certificate in form acceptable to bond counsel, to the effect that the successful bidder has made a bona fide public offering of the Bonds at the initial pubhc offering prices set forth m such certificate, that the successful bidder has complied with Rule G- 37 of the Municipal Securities Rulemaking Board (the "MSRB") with respect to the Authority and the City and that a substantial amount of the Bonds of each maturity were sold to the pubhc (excluding bond houses, brokers and other intermediaries) at such initial public offering prices Such certificate shall state that (1) it is made on the best knowledge, information and belief of the successful bidder and (2) 10% or more m par amount of the Bonds of each maturity was sold to the public at the initial public offering price (such amount being sufficient to establish the sale of a substantial amount of the Bonds) CUSIP Numbers It is antmipated that CUSIP Identification numbers will be printed on the Bonds, but neither the failure to pnnt such numbers on any Bond nor any error with respect thereto shall constitute cause for failure or refusal by the successful bidder thereof to accept delivery of and pay for the Bonds in accordance with the terms of its bid. The Authority wall assume responslbIhty for the expense of the initial printing of CUSIP numbers, provided, however, that the Authority assumes no responsibility for any CUSIP Service Bureau or other charges that may be imposed for the assignment of such numbers All expenses in connection with the assignment of CUSIP numbers shall be paid by the successful bidder It shall be the obligation of the successful bidder to furnish to DTC an underwriter questionnaire and to the Authority the CUSIP numbers for the Bonds wittun two business days following the date of award Official Statement The Authority will furnish the successful bidder, at the expense of the Authority, up to 1,000 copies of the final Official Statement within seven business days from the date of the award of the Bonds, as specified in Rule 15c2-12 (the "Rule") of the Securities and Exchange Commission (the "SEC") and the rules of the MSRB provided that manor delays m furmslung such final Official Statement will not be a basis for failure to pay for and accept delivery of the Bonds. Additional copies will be made available at the successful bidder's request and expense. The Authority assumes no responsibility or obligation for the distribution or delivery of the Official Statement to anyone other than the successful bidder. The successful bidder, by executing the Official Bid Form, agrees to provide one copy of the Official Statement to at least one Nationally Recognized Municipal Securities Information Repository ("NRMSIR") wathIn the meaning of the Rule upon receipt of the Official Statement from the Authority and two copies of the Officaal Statement (with any required forms) to the MSRB or Its designee no later than ten business days following the Date of Sale The successful bidder shall notify the Authority as soon as practicable of (1) the date which is the end of the underwriting period (such "underwriting period" is described in the Rule), and (2) the date of fihng the Official Statement with a NRMSIR and MSRB or ItS designee. If the Bonds are awarded to a syndicate, the Authority will designate the senior managing underwriter of the syndicate as its agent for purposes of dlstributtng copies of the Official Statement to each participating underwriter Any underwriter executing and delivering a bid form with respect to the Bonds agrees thereby that if its bid is accepted it shall accept such designation and shall enter into a contractual relatlonshtp with all participating underwriters for the purposes of assuring the receipt and distribution by each such participating underwriter of the Official Statement, unless another firm is so designated by the syndicate in writing and approved by the Authority Legal Opinion The approvmg opinion of Hunton & Williams LLP, Richmond, Virginia, with respect to the Bonds will be furnished to the successful bidder at the expense of the Authority and will state that the Bonds constitute valid and legally binding obhgations of the Authority and that the Agreement of Trust and the Support Agreement have been duly authorized, executed and delivered by, and constitute valid and binding obllgat~ons of, the Authority and the City, as applicable, and are enforceable against the Authority and the City in accordance with their terms. The optmon will also state that the City's obhgatlon to make payments under the Support Agreement is subject to and dependent upon the City Council of the City making annual appropriations for such purpose Federal and State Securities Laws No action has been taken to qualify the Bonds under the federal secuntles laws Tax Exemption The Official Statement relating to the Bonds contains a &scussaon of the effect of the Internal Revenue Code of 1986, as amended, on the exclusion from gross income of Interest on the Bonds and a discussion of the optmon of Hunton & Wllhams LLP insofar as at concerns such exclusion Continuing Disclosure For purposes of the Rule, the City ~s an obhgated person w~th respect to the Bonds The C~ty will agree, pursuant to the Continuing Disclosure Agreement, to provide certain annual financial reformation and operating data and notices of the occurrence of certain events, if material. A description of these undertakings ~s set forth an the Prelmunary Official Statement for the Bonds and will also be set forth an the final Official Statement for the Bonds (See Appen&x D of the Prehnnnary Official Statement dated 2003). Change of Date and Time for Receipt of Bids The Authority expects to take b~ds on the Bonds on September 9, 2003 However, the Authority reserves the right to postpone the date and time estabhshed for the receipt of bads Any such postponement will be announced by the TM3 newsware, or any other such service. If the receipt of bads as postponed, any alternative date for receipt of bids wall be announced via the TM3 newswlre, or any other such service. Any bidder must subrmt a bid for the purchase of the Bonds on such alternative sale date m confornuty with the provisions of th~s Official Not,ce of Sale, except for any changes announced via the TM3 newswtre, or any other such servtce, as described theretn. Additional Information For further ~nformatlon relating to the Bonds, the Authority and the Clty, reference is made to the Authorlty's Prehmlnary Official Statement. The Authority has deemed the Prehmanary Official Statement to be final as of ~ts date within the meamng of the Rule, except for the omission of certain pricing and other ~nformat~on permitted to be ormtted pursuant to the Rule. The Official Bad Form and the Prehmlnary Official Statement may be obtained from 1-Deal at ~ts websate' www l-dealprospectus com or from the City's F~nanclal Advisors, Government Finance Associates, Inc., (telephone 212-836-4819) and ARD Government Finance Group, (telephone 703-807- 5700). CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY By Robert G. Jones Chmrman DaSd' 2O03 CITY OF VIRGINIA BEACH, VIRGINIA By' James K. Spore C~ty Manager OFFICIAL BID FORM Electronic bids (or facsimile bids as provided in the Official Notice of Sale) must be submitted by 1 I:00 am, Local Time. To C~ty of Vlrg~ma Beach Development Authority September 9, 2003 c/o City Manager Office of thc City Manager Virginia Beach, Virginia 23456 On behalf of the firm(s) hsted below and pursuant to the terms and conditions hsted in the Authonty's Official Notice of Sale, we offer to purchase the $165,000,000 Pubhc Facility Revenue Bonds, Series of 2003A (the "Bonds"), of the City of Virglma Beach Development Authority (the "Authority"), dated September l, 2003 This offer ~s made for ali of the Bonds and for not less than all, maturing on December 1 In the years shown below The schedule of maturities and ~nterest rates upon which th~s bid ~s based are as follows Maturity Amount Rate Matun _ty Amount Rate 2004 $3,865,000 2014 $8,010,000 2005 4,595,000 2015 8,470,000 2006 5,945,000 2016 8,950,000 2007 6,255,000 2017 9,450,000 2008 6,570,000 2018 9,965,000 2009 6,225,000 2019 10,505,000 2010 6,540,000 2020 11,080,000 2011 6,880,000 2021 11,665,000 2012 7,235,000 2022 12,285,000 2013 7,600,000 2023 12,910,000 (CROSS OUT THE SERIAL BOND MATURITIES BEING BID AS TERM BONDS.) Term Bonds (Optional - No More Than Two Term Bonds) First Year of Mandatory_ Redemption Year of Maturity Total Pnnclpal Amounts Rate We will pay $ premium of $ % % (LEAVE BLANK IF NO TERM BONDS ARE SPECIFIED) , which is not less than $165,000,000 or not less than 100% of par (representing a ), plus accrued interest from the date of the Bonds to the date of delivery and will accept dehvery of the Bonds by means of a book-entry system at The Depository Trust Company, New York, NY Please indicate the appropriate choice: We have posted a surety bond in the amount of $1,650,000 If awarded the b~d, we will dehver to the Authority $1,650,000 in good faith money by 11 00 a m, Local Time, on the next business day Immediately following the date of award, or the Authority will draw upon the surety bond and apply ~t m accordance w~th the Offimal Notice of Sale agmnst any loss resulting from the successful b~dder falling to comply with the terms of this We enclose (or previously delivered) a certffied or cashier's check for $1,650,000 drawn upon an incorporated bank or trust company as detailed in the Official Notice of Sale and payable unconditionally to the order of the City of Vlrglma Beach Development Authority, which is to be apphed ~n accordance with the Official Notme of Sale against any loss resulting from the successful bidder failing to comply w~th the terms of this The good faith money will be deposited and credited on the purchase price, and no interest will be credited thereon to the successful bidder The proceeds of the check will be retained by the Authority as hqmdated damages in case the successful bidder fails to accept dehvery of and pay for the Bonds Checks of unsuccessful b~dders will be returned promptly upon award of the Bonds The undersigned hereby acknowledges receipt and review of the Prehrmnary Official Statement referred to in the Official Notice of Sale Respectfully submitted, (Name of B~dd~ng Firm) (Authorized Signature) (Name & Phone Number of Contact Person) The good faith check has been returned and receipt thereof is duly acknowledged NO ADDITION OR ALTERATION, EXCEPT AS PROVIDED ABOVE, SHOULD BE MADE TO THIS BID (NOTE - The following Is stated for information only and is not part of th~s bid The true interest cost of this bid, calculated m accordance with the Official Notice of Sale, ~s % (to s~x decimal places) (A hst of the members of our syndicate ~s attached ) i Mo PLANNING o Ordinance to AMEND the City Zoning Ordinance (CZO) re height regulations affecting air navigation. . Ordinance to AMEND §§ 111. 225.1,601,901 and 1521 of the City Zoning Ordinance (CZO) to allow Bed and Breakfast Inns as a Conditional Use in certain Apartment, Business and Resort Tourist Dmtncts; and, FURTHER AMEND the specific conditions for Bed and Breakfast Inns. Application of GREGORY NELSON for a Con&ttonal Use Permzt re a Bed and Breakfast Inn at 2420 Arctic Avenue. (DISTRICT 6 - BEACH) . Application of STEVEN WRAY O'NEAL for the expansion of a Nonconforming Use to construct a detached garage at 420 Davis Street. (DISTRICT 4- BAYSIDE) . Application of PATIO ENCLOSURES, INC. for the expansion of a Nonconforming Use to construct a sunroom at 204 B 75th Street (DISTRICT 5- LYNNHAVEN) . Application of' ST. NICHOLAS CATHOLIC CHURCH for a MODIFICATION of Conditions on a Use Permit re a columbarium (approved by City Council on April 8, 2003) at 712 Little Neck Road. (DISTRICT 5 - LYNNHAVE~ Application of NICHOLSON, INC. for a MODIFICATION of the Indian Lakes PD-H1 Land Use Plan to allow a mini storage at Ferrell Parkway, west of Indian Lakes Boulevard. (DISTRICT 1 - CENTERVILLE) o Application of SAIR ENTERPRISES, INC. for a MODIFICATION of a Con&ttonal Use Permtt re an automobile service station (approved February 13,2001) to remove a requirement for the canopy, remove the automobtle storage use, expand approved automottve repatr and add a car wash at 3096 South Lynnhaven Road (DISTRICT 3 - ROSE HALL) . Applications of D. W. GATLING, INC. on the west side of Oceana Boulevard, south of Beacons Reach Drive: (DISTRICT 6 - BEACH) ao b. Change of Zoning District Classification from R-5D Restdenttal Duplex Dtstrtct to B-2 Communtty Bustness Dtstrtct Conditional Use Permit for a mini-warehouse and self storage facility 10. Application of EXXON MOBIL CORPORATION for a Conditional Use Permit re an automobile service station and car wash at the southeast comer of Nlmmo Parkway and Upton Drive. (DISTRICT 7- PRINCESS ANNE) 11. Application of ALLTEL COMMUNICATIONS, INC. for a Conditional Use Permit re a communications monopole tower to support three (3) licensed careers at 812 Sandbndge Road. (DISTRICT 7 - PRINCESS ANNE) 12. Application of SALT MEADOW BAY, L.L.C. for the dtsconttnuance, closure and abandonment of Street G on the northeast side of South Oriole Drive, northwest of Barberton Drive. (DISTRICT 6 - BEACH) ii NOTICE OF PUBLIC HEARING Vlrgm~a Beach C~ty Councd wdl meet m the Chamber at C,ty Hall. Mumc~pal Center, 2401 Courthouse Dnve Tuesday. August 26 2003 at 6 O0 p m The following applications w,ll be heara DISTRICT 1 - CENTERVILLE 1 N~cholson, Inc Apphcat~on Modification of the Indian Lakes PD HL Land Use Plan on the south s~de of Ferrell Park~ay DISTRICT 4 - BAYSlDE 2 Steven Wray O'Neal Apphcat~on Expansion of a Nonconforming Use at 420 Daws Street D~STRICT 5 - LYNNHAVEN 3 St Nicholas Catholic Church Apphcat~on Mod~f,cat~on of Conditions to a Conditional Use Permtt for a columbanum at 712 L~ttle Neck Road approved by City Councd on April 8, 2003 4 Patio Enclosures. Inc Apphcat~on Expansion of a Nonconforming, Use at 204 B 75th Street DISTRICT 6- BEACH 5 D W Gathng. Inc Application Change of Zon,ng Dis[nct Classification from R 5D Residential Duplex to B 2 Commumty Business on the west s~de of Oceana Boulevard. The Comprehensive Plan recommends use of th~s property for residential uses above 3 5 dwell,rig un,ts per acre 6 D W Gathng Inc Apphcat~on Conditional Use Perm t fora self stor- age facility on the west s~de of Oceana Boulevard 7 Salt Meadow Bay, L L C Apphcat~on D~scont~r~uance closure and abandonment of Street G on tm~ northeast s~de of South Onoie Dnve DISTRICT 7 PRINCESS 4NNE 8 Exxon Mobd Corporation Apphcat~on Conditional Use Permit fo, an automobde service station and car '¢,ash on the southeast corner of N~mmo Parkway and Upton Dnve 9 AIItel Commumcat~ons. Inc Apphcat~on Conditional Use Permit for a commumcat~ons tower at 8!2 Sandbndge Road 10 AMENDMENT Ordinance to amend the C~ty Zo-,mg Oral,haste pe,*a,mng to he,ght regulations affecting 8~r na~gst,on Interested c~t~zens are rev,ted to attend Ruth Hc(:ges S~n,th MMC C't) BEACON AUGUST 10 ~",d ~,dG'jST ~7 2'~'~.~ '_'~ 518"~8.2 BF_ACON SUNDAY, AUGUST 17,200- NOTICE OF PUBLIC HEARING Vlrg~ma Beach C~ty Councd wdl meet ~n the Chamber at C~ty Hall, Mumctpal Center, 2401 Courthouse Drive. Tuesday, August 26, 2003, at 6 O0 p m The following applications will be heard DISTRICT 1 - CENTERVlLLE 1. N~cholson, Inc Apphcatlon Modification of the Indian Lakes PD-H1 Land Use Plan on the south s~de of Ferretl Parkway DISTRICT 4 - BAYSlDE 2 Steven Wray O'Neal Application Expansion of a Nonconform~nA Use at 420 Daws Street DISTRICT 5- LYNNHAVEN 3 St N~cholas Cathohc Church Apphcat~on Modification of Conditions to a Conditional Use Permit for a columbanum at 712 L~ttle Neck Road approved by C~ty Councd orrApnl 8, 2003 4 Patio Enclosures, Inc Apphcat~on Expansion of a Nonconforming Use at 204 B 75th Street DISTRICT 6 - BEACH 5 D W Gathng, Inc Apphcat~on ChanAe of Zomng D~stnct Classification from R-5D Residential Duplex to B-2 Commumty Bus~ness on the west s~de of Oceana Boulevard, The Comprehenswe Plan recommends use of th~s property for res~denttal uses above 3 5 dwelhng umts per acre 6 D W Gathng, Inc Apphcat~on Conditional Use Permit for a self stor- age facd~ty on the west s~de of Oceana Boulevard 7 Salt Meadow Bay, L L C Application D~scontmuance, closure and abandonment of Street G on the northeast s~de of South Oriole Drive DISTRICT 7 - PRINCESS ANNE 8 Exxon Mobd Corporation Apphcat~on Conditional Use Permit for an automobile service station and car wash on the southeast corner of N~mmo Parkway and Upton Drive 9 AIItel Commumcat~ons, Inc Apphcat~on Conditional Use Permit for a commumcat~ons tower at 812 Sandbndge Road 10 AMENDMENT Ordinance to amend the C~ty Zomng Ordinance pertaining to height regulations affecting a~r nawgat~on Interested c~t~zens are mwted to attend Ruth Hodges Smith, IVlMC City Cle.k BEACON AUGUST 10 and AUGUST 17. 2003 10518182 CITY OF VIRGINIA BEACH AGENDA ITEM I I II I II I II I I ITEM: City of Virginia Beach, Amendment to the City Zoning Ordinance MEETING DATE: August 26, 2003 Background: An Ordinance to amend the C~ty Zoning Ordinance pertaining to height regulations affecting a~r nawgabon. Considerations: Secbon 202 of the C~ty Zoning Ordinance provides regulabons regarding the height of structures ~n the various zoning d~str~cts. Subsecbon (b) requires that no structure be so h~gh as to "consbtute an obstruction to a~r nawgabon pursuant to Part 77 of the Federal Av~abon Administration Regulabons." However, the language in th~s subsection ~s not clear regarding the growth of natural vegetation as an 'obstrucbon.' The regulations of the Virginia Department of Aviation note that natural vegetabon ~s considered an obstrucbon. The proposed amendment adds natural growth as a type of potenbal obstruction to a~r nawgabon. The amendment w~ll bring the C~ty Zoning Ordinance ~nto complete comphance w~th V~rg~n~a Department of Awation regulabons Staff recommended approval There was no opposition to the request. Recommendations: The Planning Commission passed a mobon by a recorded vote of 10-0 to approve the proposed amendment. Attachments: Ordinance Staff Review Planning Commission Minutes Recommended Action: Staff recommends approval. Planning Commission recommends approval City Manage~~..~~Submitting Department/Agency: Planning Department AN ORDINANCE TO AMEND THE CITY ZONING ORDINANCE PERTAINING TO HEIGHT REGULATIONS AFFECTING AIR NAVIGATION SECTION AMENDED' ~ 202 OF THE CZO 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 WHEREAS, the public necessity, convenience, general welfare and good zoning practice so require; BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF VIRGINIA BEACH, VIRGINIA- That Section 202 of the City Zoning Ordinance is hereby amended and reordained to read as follows- Sec. 202. Height regulations. (b) No artzf~czal structure or tree or other natural growth which on the basis of its height would constitute an obstruct'o~ to air navzgation pursuant to Part 77 of the Federal Ay!atto~ Administration Regulations, 14 C.F.R. ~ 77.21 et seq. shall be allowed in any district. The director of the department of planning shall prepare a map delineating geometric specifications and height limitations for protecting navigable airspace in compliance with Part 77 of the Federal Aviation Administratzon Regulations, 14 C.F.R. ~ 77.21 et. seq. COMMENT The amendment adds natural growth as a type of potential obstruction to air navigation. The amendment will bring the City's ordinance into complete compliance with V~rginia Department o! Aviation regulations. 26 27 28 29 30 31 32 Adopted by the City Council of the Czty of Vlrgln:a Bea-h, Virginia, on this day of , 2003. CA-8899 Ordln / Proposed/czo0202ord. wpd R2 June 10, 2003 APPROVED AS TO CONTENT: Pl~nh~ng ~X APPROVED AS TO LEGAL SUFFICIENCY: City-Attorney's O~'ffce CITY OF VIRGINIA BEACH / # 21 July 9, 2003 Background: Secbon 202 of the C~ty Zoning Ordinance provides regulabons regarding the height of structures ~n the vanous zoning d~stncts. Subsecbon (b) requires that no structure be so h~gh as to "consbtute an obstrucbon to a~r navigation pursuant to Part 77 of the Federal Aviation Administration Regulabons." However, the language ~n th~s subsecbon is not clear regarding the growth of natural vegetation as an 'obstruction 'The regulabons of the V~rg~n~a Department of Aviabon note that natural vegetabon is considered an obstrucbon. Proposed Amendments: An Ordinance to amend the City Zoning Ordinance pertaining to height regulabons affecbng a~r nawgabon. The proposed amendment adds natural growth as a type of potential obstrucbon to a~r navigation. The amendment w~ll bnng the C~ty Zoning Ordinance into complete comphance with Wrgmia Department of Awation regulations. Evaluation: Staff recommends approval of the proposed amendment. Planning Commission Agenda July 9, 2003 CITY OF VIRGINIA BEACH / Cf 21 Page 1 Item #21 Ctty of Vtrg~ma Beach An Ordinance to amend the City Zoning Ordinance pertalmng to height regulations affecting mr nawgat~on. July 9, 203 CONSENT Charhe Salle': The next ts Item #21, which is the Ctty of V~rg~ma Beach, an amendment to the Zoning Ordinance ~n the change in hmght regulations. Do we have a spokesperson for this9 Stephen White: Mr. Chmrman and members of the Commission. Th~s ordinance amendment has been brought to you ~n response to an ~ssue where our local regulations are not conststent with the State regulations tn regard to hexght close to mr bases. Currently structures close to atr bases are regulated on hetghts, low so they are not an ~mpedlment to mr traffic. This amendment adds vegetation to that as well, so trees and other types of vegetation would not become an impediment to air traffic. Charhe Salle': Is there any opposlnon to thts ~tem? I would move that we approve the consent agenda Item #21. Ronald Rapley: So we have a motion to approve the consent agenda as read by Charhe Salle' Do I have a second9 I have a second by Gene Crabtree Thank you Stephen And, you've already commented, I beheve adequately on Item #21. I hope the pubhc has a better understanding as to why we we're recommendtng th~s consent ~tem and that's the purpose of thts d~scuss~on. We do have a motion on the floor and I beheve we have a second. I would hke to call for the vote. So all ~n favor of the motion raise your hand. Opposed9 AYE 9 NAY 0 ABS 0 ABSENT 2 ANDERSON AYE CRABTREE AYE DIN AYE HORSLEY KATSIAS AYE KNIGHT AYE MILLER AYE RIPLEY AYE SALLE' AYE STRANGE AYE WOOD ABSENT ABSENT Ronald Rlpley: The motion carries. August 12, 2003 mntrlcacies of what mt's going to do to the neighborhood and what not, but some of those have been brought up and we need a lmttle bmr more tmme and I belmeve Councmlman Maddox has discussed a two-week deferral and I'm mn agreement wmth that so we can move on. Thank you. MAYOR OBERNDORF' Thank you. Mr. Maddox. COUNCIIR4AN MADDOX · I would like to make a mormon that we -- can we do both at the same time? I would like to make a motmon that we defer Plannmng Item Number 1 and Number 2 for two weeks. COUNCILMAN REEVE' Second. MAYOR 0BERNDORF' Are we ready for the questzon? CITY CLERK: Wmth Mr. Dmezel out, the vote zs 11 to 0 -- 10 to 0 to approve the deferral untml August the 26th for the Items concerning the amendment of the Cmty Code and the Condztmonal Use for Gregory Nelson. MAYOR OBERlqDORF- CITY CLERK' MAYOR OBERlqDORF- Madam Clerk, I pushed the yes butSon, but I looked up there and mt wasn't on the board. isn't showmng up there, but we have Thank you. CITY CLERK- That's why I samd 11 to 0. June 3, 2003 following condmtmonal use. COUNCILMAN MADDOX ' They are both related. CITY CLERK- Rmght. COUNCILMAN MADDOX - If he wants to come speak now. CITY CLERK- Anthony -- and I can't read your name. Anthony. ANTHONY OFFREDI: Yes. CITY CLERK- I can't read your last name. ANTHONY OFFREDI' Anthony 0ffredm. CITY CLERK- Offredl. O-f-f-r-e-d-l? ANTHONY OFFREDI' O-f-f-r-e-d-~. That's correct. CITY CLERK' Thank you. MAYOR OBERNDORF - Good evenmng. ANTHONY OFFREDI: Good evenmng. How ms everyone today? I understand mt ~s gomng to be deferred, but there are a couple of thmngs that I for one smttmng here knows that thms ms going to open up a fairly large can of worms and we want to make sure we get it started on Yhe rmght foot. I've been slttmng down wroth my Councmlman and dmscussmng the June 3, 2003 FORMA~L SESSION VICE MAYOR JONES: Under Plannzng Item M5 for a deferral of two weeks, the Applzcatlon of a Sa~r Enterprises, Incorporated for a mod~fzcat~on of a Conditional Use Permzt concernzng automobile storage and automobile repair. That's in the Rose Hall D~str~ct. Is there a second'? COUNCI~MD2DDOX: Second. MAYOR OBERNDORF: Okay. Are we ready for the Consent Agenda? CITY CLERK: By a vote of 11 to 0 you have adopted the Consent Agenda w~th Mr. Jones abstamning on the Planning Item for Number 7 and Mrs. Wzlson discloszng on Number 3 for Ocean Beach Club. CITY CLERK: Your Honor, the next Item ~s the Plannzng Item to amend the CZO for the Bed and Breakfast Inn with a condztzonal use zn certamn dlstrzcts and to further ameno the speczfzc condztlons for Bed and Breakfast Inns. MAYOR OBERAIDORF: Mr. Maddox. Do you have any speakers? COUNCII24AN MADDOX: Well, there's a gentleman here that I believe opposes it if he's stzll here, but we've talked to the Applmcant. The Applicant is not here. We have agreed to defer zt for two weeks. CITY CLERK: I do have one on the next Item, which ~s the August 12, 2003 rentzng rooms, yes, there are taxes collected. MAYOR OBERNDORF' Okay. Good. COUNCIL LADY WILSON' August 12, 2003 Steven, do you know the answer to that? STEVEN THOMPSON' Yes, they do. MAYOR OBERNDORF- Yep, okay. Ail right. CITY MANAGER' Charging for the rooms they have to pay the tax. COUNCIL LADY WILSON- I ]ust wanted to make sure. MAYOR OBERNDORF' COUNCIL LADY WILSON- Even the -- I forgot what they are called. Hostels? MAYOR OBERNDORF' taxes on the room? No. No. No. Tlmeshare. If they are renting out rooms for the nzght, do they pay COUNCILMAN MADDOX - MAYOR OBERNDORF- When they are treatmng it as a hotel room, I'm pretty sure they stmll collect that. Okay. Because a lot of people are sayzng they don't and I didn't think that was true. COUNCILMAN MADDOX - I don't know for a fact, but you would think that would be the case. b~AYOR OBERNDORF ' We w~ll f~nd out. CITY ATTO_R_NEY' When they turn zt znto a hotel and are actually taking reservations and August 12, 2003 Mrs. Wz!son. COUNCIL LADY WILSON' Bed and Breakfast's can be a really nice lodging experience and we would like for people who come here to have that quality experzence. COUNCILMAN MADDOX- I feel lzke we are m~ss~ng that now. COUNCIL LADY WILSON- We are and i don't thznk mt should lust be at the Oceanfront. There me some other places that we could look ~nto. MAYOR OBERNDORF- Isn't the Vmctorzan Inn that's down on Paclfmc -- COUNCILMAN MADDOX' There's one at 16th -- MAYOR OBERNDORF' It's very well cared for. They call mt the Vmctorzan Inn. COUNCIL LADY WILSON' I lust have a quzck questzon. Do they pay room tax on these? MAYOR OBERNDORF ' I don't know. COUNCILMAN MADDOX' I suspect they would. MAYOR OBERNDORF' Would a bed and breakfast pay a room tax l~ke a hotel? Does anyone know? CITY MANAGER', As far as I know they do, yes. ~L~YOR OBER/~DORF: August 12, 2003 Okay. Mr. Reeve and Mrs. Wilson. COUNCI~ REEVE: I can support the deferral to get better language, but isn't one of the key thing between a hostel and a bed and breakfast is w~th the hostel you rent bed and with a bed and breakfast you would rent a room, which obvlously you have a different price-point scenario. VICE ~L~YOR JONES: Have you talked to the owner about a deferral? COUNCI~ MADDOX: He called me on the phone before all of the -- well not all, but before the people that were opposed to it called me and then he called me a couple weeks ago and I sazd, well, frankly, I haven't heard anything about lt. Subsequent to his conversation, several other people have called me and I have trzed to do a l!ttle blt more research here. VICE MAYOR JONES: So, there will be speakers here? COLINCI~ MADDOX: There wzll be speakers. I would lmke %o try to get to them before and see ~f we can defer it so we don't have a lengthy d~alogue tonight anc brlng it back in a couple weeks. MAYOR OBERNDORF: Okay. COD-NCI~ ~L~DDOX: ~AYOR OBERNDORF: Does that sound good? Yeah, mf than works out. F~ne. August 12, 2003 that we can craft that language. I'm very supportzve of the ~dea of a bed and breakfast ~n the Old Beach Area. There are some really quamnt houses that I think could be utmlmzed for thzs reason, but this is sort of a watershed issue. Thms is the fmrst t~me we've done this mn that area and I want to make sure we really have thought it out rmght and have some controls in there. And, I would !mke to talk to you and get your perspective as well. COUNCIL LADY McCLANA/~: Yeah, I'm perfectly wmllmng to go along you know -- COUNCILMAN MADDOX: Uh-huh. COUNCIL LADY McCLAI~AN: -- with your proposal. And, I'm for Bed and Breakfast Inns down there. It's lust that I thmnk the way thms Ks drafted ~n here could be a problem. COUNCII~V/AN MADDOX: Well, I don't want a dormitory either. COUNCIL LADY McCLAN~: No, I agree wzth you. COUNCIL LADY EURE: Well, there's too many, I haven't made up my mmnd yet. Well, I don't know. Well, it mmght be this. It mmght be that. COUNCII24AN 5h~DDOX: Rmght. COUNCIL LADY EI/R]~: Fmrst of all, we have to get mt rzght. COUNCILMAN MADDOX: I agree. August 12, 2003 COUNCILMAN MADDOX' Maybe you and I could talk. I've met wzth the nezghbor of the Applicants here. I've met wznh hzm. I've looked at the property. I've talked to Barbara Yates three or four times yesterday. Now, Barbara does have two dmfferent sort of operatzons. She does have the youth hostel where you go mn there wzth lmke bunk beds and all that. COUNCIL LADY McCLANAN' Yeah. COUNCILMAN MADDOX: And she has an actual bed and breakfast component of it too. And, when you read thms, I mean, they are not allowed to stay more than 14 consecutive days. Breakfast w~ll be a requmrement. They have adequate parking. You know it seems to be the consensus of the people I've talked to -- and I have tr~ed to do a lot of research on this -- is that the bed and breakfast concept zs something that is well-recleved in that neighborhood. That mt's actually an mnvestment mn the nemghborhood and what I'm strugglmng with is craftmng language here mn the Condmtmonal Use Permmt that will ensure that you have that type of facllmty and that it ms operated properly. Barbara, for example, ms an owner-operator. I mean, she's physically on the site all the time. In thzs partmcuiar case, mt's not going to be owner-operated and mf you get a bad operator in there at mmpacts the entire nemghborhood. So, I've been working with Plannmng to try and craft some language to ensure that if mt's not operated properly that we have resources to deal wmth mt. Now, what I would imke to do ms see thms deferred for two weeks so June 3, 2003 years we've had I can recall two other instances when we've discussed these one tzme zn another part of the City and one time -- well, I guess two tmmes. MAYOR OBERNDORF: One was zn Church Poznt. COUNCIL LADY McCLANAN: MAYOR OBERNDORF: And one was out on London Brmdge Road. That's right. COUNCIL LADY McCLANAN: And, th~s zs what my kzds do when they travel and where they stay where you have a lot of people zn a fac~lmty where zt's not qumte as spacmous and the rooms are a lmttle dmfferent -- COUNCILMAN MADDOX: More l~ke a hostel? COUNCIL LADY McCLANAN: Yes. And, there zs nothmng wrong with youth hostzles. I thmnk they're great and around the country there are some wonderful ones zn different cztles. But zs this really -- I thmnk Rmchard ms more tune to th~s than I am because the Barbara's place down there -- certamnly mt's great. We need that kmnd of thmng aE the Oceanfront, but I think that ~f we're gomng to allow a faczlmty that's truly a youth hostel and call them bed and breakfast mnns, people are going to be mzslead who come here to stay. People who stay mn bed and breakfast, they are of all qualities and all kmnds. If you come here expectmng to stay mn a bed and breakfast and you end up zn a youth hostel, I thznk you're going to have a very dzfferent attmtude. I don't know what ms behznd all th~s. June 3, 2003 AGENDA REVIEW MAYOR OBERNDORF: Ail rmght. Now, for the Plannmng Items. The fmrs5 one is to amend Sectmon 111.225 and all about bed and breakfast znns as a Condmtmona! Use mn certamn Apartment, Business and Resort Tourmst Dmstricts and further amend the specifmc conditions for bed and breakfast znns. Mr. Maddox, don't you have someone who ms -- COUNCILMAN MADDOX: Rmght. We're going to need to hear about the fmrst and the second one here. MAYOR OBERNDORF: CITY CLERK: COUNCILMAN MADDOX: COUNCIL LADY McCLANAN: Ail rmght. Also, on this one you need to add a sixth condition and Stephen White has a copy. Th~s is a work mn progress, so I don't want to hand this out lust yet. Yeah, but there's somethmng that needs to be said about this. COUNCII24AN MADDOX: Sure. COUNCIL LADY McCLANAN: Thms ms not a bed and breakfast inn that ms proposed, thms Number 2, the Appllcatmon mtself. In all of my traveling and I belong to the -- whatever zt ms. The Amermcan Youth Hostel Assoclatmon. What this proposal zs is not a true bed and breakfast. If we really want to encourage thms type of facility at the Oceanfront, that's one thmng. But, we really need to look at what zs a bed and breakfast and what -- over the Virginia Beach City Council August 12, 2003 6:00 p.m. CITY COUNCIL: Meyera E. Oberndorf, Mayor Vice Mayor Louzs R. Jones Harry E. Diezel Margaret L. Eure Reba S. McClanan Rmchard A. Maddox Jim Reeve Peter W. Schmzdt Ron V~llanueva Rosemary Wilson James L. Wood At-Large Bayslde - Distrzct 4 Kempsville - Distrzct 6 Centerville - Dmstrmct 2 Rose Hall - Distr~ct 3 Beach - Distrmct 6 Princess Anne - Distrmct 7 At - Large At - Large At - Large Lynnhaven - District 5 CITY MANAGER: CITY ATTORNEY: CITY CLERK: STENOGRAPHIC REPORTER: James K. Spore Leslie L. Lmlley Ruth Hodges Smith, MMC Dawne Franklin Meads VERBATIM Ordinance to Amend Sectzons 111.225.1,601,901 and 1521 Bed and Breakfast Inns CITY OF VIRGINIA BEACH AGENDA ITEM ITEM: City of Virginia Beach, Amendment to the City Zoning Ordinance (Bed and Breakfast Inns) MEETING DATE: August 26, 2003 Background: An Ordinance to amend the City Zoning Ordinance allowing bed and breakfast ~nns as a cond~bonal use ~n certain Apartment, Bus~ness, and Resort Tourist Districts and to further amend the specific cond~bons for bed and breakfast ~nns. Th~s request was deferred by the City Council on August 12 Bed and Breakfast Inns are currently only allowed ~n H~stoncal and Cultural D~stncts. Th~s amendment w~ll ~ncrease the zoning d~stncts where they are allowed and also ~ncrease the requirements that w~ll be applicable to them. Considerations: One of the means of preserving and enhancing the character of neighborhoods, particularly older neighborhoods, the Oceanfront Resort Area, the Shore Drive Corridor, and older commun~bes ~n the c~ty ~s by promoting adapbve reuse of the older homes and buildings where existing uses contained in the buildings may not be able to maintain them. One potenbal adapbve reuse of such buddings, where appropriate and where the market and amenities ex~st to support ~t, ~s as a bed and breakfast ~nn. Bed and breakfast inns (B&Bs) offer adapbve reuse of older residential homes ~n neighborhoods that are ~n trans~bon from res~denbal to other types of uses w~thout destroying the res~denbal character or allowing a prol~ferabon of strictly commercial uses. These ~nns are, more often than not, relatively small ~n s~ze. They typically have from 6 to usually no more than 15 guest rooms and are unlikely to have on-site restaurants and bar operabons. In add~bon, B&Bs usually cater to the h~gher end of the traveling market The greater majority of B&Bs fall ~nto an "upscale" lodging category, usually matching the higher rates of the most expensive lodging ~n the area. They are not a cheaper alternabve and must offer a h~gher standard of personalized semce, facilities, and amenlbes to jusbfy their higher rates (nabonal study by Yowno-Young, 1990). Another charactensbc ~s the architectural d~sbncbon and h~storical context of some B&Bs The most common B&B ~s a converted residence of the Victorian era (1850-1900), s~nce such Amendment to the C~ty Zomng Ordinance Page 2 of 2 homes are large, though homes from the Colonial era and the early-20th Century are also good candidates Staff recommended approval There was oppos~bon to the request as presented to the Planning Commission. The Planning Commission revised the amendment in response to the concerns presented at the heanng Recommendations: The Planning Commission passed a mobon by a recorded vote of 9-0 to approve th~s amendment Attachments: Staff Review Ordinance Planning Commission Minutes Recommended Action: Staff recommends approval Planning Commission recommends approval Submitting Department/Agency: Planning Department (-y~~ City Manager~'/~:~-~ ~~~ CITY OF VIRGINIA BEACH / # 18 July 9, 2003 Background: One of the means of preserving and enhancing the character of neighborhoods, particularly older neighborhoods, the Oceanfront Resort Area, the Shore Drive Corridor, and older communibes m the city ~s by promobng adaptive reuse of the older homes and buildings where ex~sbng uses contained in the buildings may not be able to maintain them. One potential adaptive reuse of such buddings, where appropriate and where the market and amen~bes ex~st to support it, is as a bed and breakfast inn. Bed and breakfast inns (B&Bs) offer adapbve reuse of older residential homes in neighborhoods that are ~n transition from res~denbal to other types of uses w~thout destroying the residential character or allowing a proliferation of strictly commercial uses. These inns are, more often than not, relatively small ~n size. They typically have from 6 to usually no more than 15 guest rooms and are unlikely to have on-s~te restaurants and bar operabons In addition, B&Bs usually cater to the higher end of the traveling market. The greater majority of B&Bs fall into an "upscale" lodging category, usually matching the higher rates of the most expensive lodging ~n the area They are not a cheaper alternabve and must offer a h~gher standard of personalized service, facilities, and amen~bes to justify their higher rates (nabonal study by Yowno-Young, 1990). Another characteristic is the architectural d~sbncbon and h~stoncal context of some B&Bs. The most common B&B is a converted residence of the V~ctonan era (1850-1900), since such homes are large, though homes from the Colonial era and the early-20th Century are also good candidates. Proposed Amendments: An Ordinance to amend the City Zoning Ordinance allowing bed and breakfast inns as a cond~bonal use ~n certain Apartment, Business, and Resort Tourist D~stncts and to further amend the specific conditions for bed and breakfast ~nns Bed and Breakfast Inns are currently only allowed ~n Historical and Cultural D~stncts. This amendment w~ll ~ncrease the zoning d~str~cts where they are allowed and also ~ncrease the requirements that will be applicable to them. Planning Commission Agenda July 9, 2003 CITY OF VIRGINIA BEACH / # 18 Page I Bed and Breakfast Inns will be allowed as conditional uses ~n the RT-3, B-4, A-12, A-18, A-24 and A-36 Zoning Districts, with the following additional requirements: I A pnmary res~denbal structure, not an accessory structure, shall be used; 2. The home must be 50 years old or of h~stoncal s~gn~flcance; 3. The maximum length of stay ~s 14 consecubve days within a 30 day period; 4. There can be no recepbons or s~mllar funcbons for compensabon; and 5. There must be a m~nimum of one bathroom per floor. Agricultural D~stricts currently have a similar use, categorized as Country Inns, already allowed w~th a Conditional Use Permit; thus, the Agricultural Districts were not included as part of this amendment. Evaluation: Staff recommends approval of the amendment. The amendment provides for adaptive reuse opportunities for certain res~denbal structures in such a way as to contribute to the conbnued stability and growth of overall neighborhood character The amendment also allows for an alternative type of lodging that w~ll help to increase the overall base of attractions that the C~ty of V~rg~n~a Beach can offer v~sitors. Planning Commission Agenda July 9, 2003 CITY OF VIRGINIA BEACH I # 18 Page 2 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 AN ORDINANCE TO AMEND AND REORDAIN THE CITY ZONING ORDINANCE TO ALLOW BED AND BREAKFAST INNS AS CONDITIONAL USES IN CERTAIN APARTMENT, BUSINESS AND RESORT TOURIST DISTRICTS AND SPECIFIC CONDITIONS FOR BED AND BREAKFAST INNS SECTIONS AMENDED' CZO ~ 111, 225.1, 601, 901 AND 1521 WHEREAS, the public necessity, convenience, general welfare and good zoning practzce so require; BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF VIRGINIA BEACH, VIRGINIA' That Sections 111, 225.1, 601, 901 and 1521 of the City Zoning Ordinance are hereby amended and reordained, to read as follows- Sec. 111. Definitions. For the purpose of this ordinance, words used in the present tense shall include the future; words used in the singular number include the plural and the plural the singular; the use of any gender shall be applicable to all genders; the word "shall" is mandatory; the word "may" is permissive; the word "land" includes only the area described as being above mean sea level; and the word "person" includes an individual, a partnership, association, or corporation. In addition, the following terms shall be defined as herein indicated' Bed and breakfast Inn A buzldzng wzthzn an Cultural District A primary residential structure of historical 29 3O 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 49 5O 51 52 siqnificance in which not more than ten (10) rooms are provided for lodging transients, for compensation, on daily or weekly terms, with or wmthout '-oa~u breakfast Sec. 225.1. Bed and breakfast inns. In addition to general requirements, bed and breakfast inns shall be subject to the following requirements, which shall be deemed to be conditions of the conditional use permit: (1) No more than ten (10) lodging units may be provided, and no such units shall have direct ingress or egress to the outside of the building. Living quarters for the owner or manager of the inn ma7 shall be provided in addition to lodging units. The operator, or his desiqnated representative who is responsible for the premises, shall be available on the premises while it is open for use. Such owner or manaqer shall be on site and available on a 24-hour basis. (2) Antiques may be sold at retail as an accessory use if expressly permitted by the conditional use permit, provided, that such sales are conducted from within the same building in which the lodging units are located and that no more than twenty (20) per cent of the total floor area of the building shall be used in the conduct of such sales. 53 54 55 56 57 58 59 6O 61 62 63 64 65 66 67 68 69 7O 71 72 73 74 75 76 (3) Food and beverages ma7 will be served ~ if expressly permitted by the conditional use permit, and in no event shall seating capacity exceed twenty-five (25) persons, including lodging guests. Breakfast will be served to guests. (4) Notwithstanding any contrary provision of this ordinance, signage shall be limited to one identification sign not exceeding nine (9) square feet per face~, and may be displayed only upon a finding by the historic and -- ' ~2 ...... ' cultural =ev~ew board that the proposed o~~= zs appropzzate ~ the cha ..... er nd ~ ~ appearance district. (5) At least one (1) vehicular parking space per lodging unit shall be provided on the site. Additional parking capacity may be required by the city councml if food service serving capacity exceeds the number of lodging units. Parkinq shall not be allowed in the front of the primary residential structure. (6) The following plans shall be submitted with the application for conditional use permit- a. A floor plan delineating, at a minimum, the total floor area of the building, the number and dimensions of lodging units, the location and dimensions of areas to be used for food service and 77 78 79 80 81 82 83 84 85 86 antique sales, if applicable, and the location of all entrances and exits; and b. A plan delineating the location, dimensions, colors, materials and illumination of proposed signage. (7) The bed and breakfast inn shall be operated in a primary residential structure and not in any accessory structure. The structure to be used shall be historically, architecturally or culturally significant because (1) it is associated with events that have made a contribution 87 88 89 90 91 92 93 94 95 96 97 98 99 100 to the broad patterns of our history or (2) is associated with the lives of persons or groups important to our past, or (3) embodies the distinctive characteristics of a type, period, desiqn or method of construction, represents the work of a recoqnized master, or possess hiqh artistic values. (8) Maximum lenqth of stay for a transient payinq quest shall be fourteen (14) consecutive days in any thirty (30) day period of time. (9) Receptions and other such functions, for compensation, shall not be permitted. (10) A minimum of one (1) bathroom, to include a bathtub or shower, shall be provided on each floor of the structure to be occupied by guests; however, city council may 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 require additional bathrooms as a condition of approval of the use permit. Sec. 601. Use regulations. [Apartment Districts] (a) Principal and conditional uses. The following chart lists those uses permitted within the A-12 through A-36 Apartment Districts. Those uses and structures in the respective apartment districts shall be permitted as either principal uses indicated by a "P" or as conditional uses indicated by a "C." Uses and structures indicated by an "X" shall be prohibited in the respective districts. No uses or structures other than as specified shall be permitted. Use A-12 A-18 A-24 A-36 Bed and breakfast inns ~ ~ ~ ~ Sec. 901. Use regulations. [Business Districts] (a) Principal and conditional uses. The following chart lists those uses permitted within the B-1 through B-4 Business Districts. Those uses and structures in the respective business districts shall be permitted as either principal uses indicated by a "P" or as conditional uses indicated by a "C." Uses and structures indicated by an "X" shall be prohibited in the respective districts. No uses or structures other than as specified shall be permitted. 125 Use B-1 B-IA B-2 B-3 B-3A B-4 126 127 128 129 Bed and breakfast inns X X X X X C 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 Sec. 1521. Use regulations. [RT-3 Resort Tourist District] (c) Conditional uses and structures: Uses and structures hereinafter specified, subject to compliance with the provisions of part C of article 2 hereof; and provided, that except as set forth in subdivision (5.5), drive-through facilities shall not be permitted as a conditional or accessory use in any portion of the district east of Arctic Avenue, south of Winston-Salem Avenue and 4th Street, or north of 35th Street' (2.5) Bed and breakfast inns COMMENT Bed and Breakfast Inns are currently only allowed in Historical and Cultural Districts. This amendment will increase the zoning districts where they are allowed and also increase the conditions that will be applicable to them. Bed and Breakfast Inns will be allowed as conditional uses in the RT-3, B-4, A-12, A-18, A-24 and A-36 Zoning Districts, with the following additional requirements: le 2. 3. 4. 5. Primary residential structure, not accessary structure, shah be used; Of historical significance; Maximum length of stay is 14 days in 30 days; No receptions or similar functions for compensation; and Minimum of one bathroom per floor. 153 154 Adopted by the City Council of the City of Virginia Beach, Virginia, on this day of , 2003. CA-8907 DATA/ORDIN/PROPOSED/czo0225.1 (B&B) ord. wpd R6 - July 29, 2003 APPROVED AS TO CONTENTS: P l~nn~ng~partment APPROVED AS TO LEGAL SUEFI~IENCY:A~j~/~,~ ~. _ Dopartment of Law Item # 18 City of Virginia Beach/Ordinance Amendment An Ordinance to amend the City Zoning Ordinance allowing bed and breakfast inns as a Conditional Use in certain Apartment, Business, and Resort Tourist Districts and to further amend the specific conditions for bed and breakfast inns July 9, 2003 REGULAR Robert Miller: The next item is Item # 18, The City of Virgima Beach Ordinance Amendment. We only have one speaker in opposition? Ronald Ripley: On the amendment? Stephen, do you all want to present the amendment? Stephen White: Yes sir, I'll be glad too. This amendment that we're bringing to you today is in response to individuals who have come to us with proposals for bed and breakfast inns, particularly in the Oceanfront area and some of our older homes. There are two other things at work here. As our neighborhoods decline we're looking for opportumties for adaptive reuse of some of these homes, some of these buildings and also for our visitors to the City we're looking for an alternative means of stay beyond a hotel room. Say something a little more upscale but cozier, and bed & breakfast inns fit that mode. So what we got for you today is an amendment that would allow bed and breakfast inns as a Conditional Use Permit in certain Apartment, Business and Resort Tourist Districts. Currently bed and breakfast inns are allowed as Conditional Uses in historic and cultural districts, and this would expand the scope of those somewhat. There is a s~milar type of use allowed in Agricultural Districts. They're called Country Inns. So, that's why the Agricultural Districts are not included in th~s amendment. The amendment, as I noted would make this a Conditional Use Permit, and it has certain criteria under the Conditional Permit Use section that we're proposing to you. And, among those we had in them is that it would have to be a primary residential structure. The age of the structure would have to be 50 years old or be of h~storical significance. But, I think after our d~scusslon this morning there was an agreement that we would strike the part dealing with 50 years old and just keep historical significance. The maximum length of stay in any of those rooms would be 14 consecutive days in a 30-day period. There would be no reception or similar functions for which the owner was compensated. And there must be a minimum of one bathroom per floor. Those are some of the major criteria that we would use in evaluation of a proposal for a bed and breakfast. As I noted this morning we talked about stnkxng the part dealing with 5 0 years of age and if it's you're pleasure to do that on Line 79-80, when you make the motion you need to strike the part that says starting on Line 79, "at least 50 years old or is", so then it would read as "structure to be used shall be historically, architecturally, or culturally significant, etc, etc." And, with that if you have any questions, we'll be glad to answer them but we're recommending approval of this amendment. Item # 18 City of Virginia Beach/Ordinance Amendment Page 2 Kay Wilson: You also need to strike lines 28 & 29, ~n the defimtlon of bed and breakfast ~nn at least 50 years old on hne 28 & 29 Stephen White: Thank you. Ronald Ripley Okay Is there any d~scuss~on by the Commission9 Robert Miller: We have a speaker. Ronald R~pley: I'm sorry We do have a speaker that wishes to address us Robert Miller: We have a speaker in opposition. Stephen LaFond. Stephen LaFond: Good afternoon Mr. Chmrman. Commission members I'm Stephen LaFond. I'm at 400 16th Street. I'm a proud owner of the Barkley Cottage I purchased ~t from Peter Captmnese on May 15th. I was a b~t surprised to see the change ~n the zoning regulation. After rea&ng it I supported almost 100 percent, but I'm before you today not because I oppose having more bed and breakfast, which would be maybe a natural thing to protect my business interest, but I think there's plenty of business in Virginia Beach for multiple bed and breakfast What I'm concerned with those ~s the way the ordinance is drafted. In a bed and breakfast as I understand it and the research that I d~d before we purchased the Barkley Cottage, a bed and breakfast ~s a place where you get a bed and a breakfast. One of the th~ngs that I find m~ss~ng from your ordinance ~s the requirement that will provide breakfast to the people that are staying there. Not only that, but I think you should also make sure that either the owner or the manager must hve on the premises or have someone there 24 hours because that's the nature of a bed and breakfast You're on duty 24-7 You must be there when the toilets back up. You must be there when somebody needs to find out what ~s open at two o'clock ~n the morning so they can go get a snack or a drink or whatever I think you must require them to serve a breakfast for the people who are staying there With respect to any additional d~ning facilities whether it's lunch or brunch, or whatever, that it'll be open to the outside and non-residents or non- renters of the rooms. I don't think that fits ~nto a bed and breakfast. I think you need a separate classification that you might call an ~nn much hke a Hohday Inn perhaps or a Fairfield Inn, or whatever, and that is when you can allow meals around the clock. Bed and breakfast is just what ~t says, bed and breakfast The h~storic sigmficance and I'm glad to hear that you taken out that 50-year number I thought that was a little strange because 50 years from now we'll be hawng bed and breakfast ~n homes that were built today, and that doesn't make too much sense to me. I think ~f you had put in a year like 1920, prior to 1930 or something like that, and then made ~t for h~storic architectural or cultural sigmficance, then I th~nk you got yourself a pretty decent product Also, I'm concern that right now your definition in lines 28, 29 & 30 as pmnted out by Counsel, does not coincide w~th all the ~nformation ~n Subsection 7 of Secnon 225.1. I think you should in your definition put something to the fact that ~t's architecturally, culturally, and historically s~gnificant Those were my objections, but otherwise ~t's a good deal. Ronald Rapley: Thank you Are there any questions? We have somebody that is raising his hand. Item # 18 City of Virginia Beach/Ordinance Amendment Page 3 Robert Miller: Nobody else signed up. Ronald Ripley: You're not signed up but come up. Anthony Offredl: I'm sorry. I'm Anthony Offredi. I signed up for Item #19 but I understand Item # 18 affects me. Ronald Ripley State your name. Anthony Offredi: Anthony Offredl. 2416 Artlc Avenue I just have a couple of questions on the variance change. On number 18, who dictates what is culturally, architecturally and historically significant? Ronald Ripley: The answer to that would be recommended by staff, and then the Planning Commission will consider it, and the Council will consider it Anthony Offredi: So it will be a house by house. Ronald Ripley Yes. Anthony Offredl: It will be house by house So, lfI build a house that is architecturally significant, if I require an architect that something fabulous, and I make a bed and breakfast out of it, and I get it approved, therefore I can have a bed and breakfast that is architecturally significant to the area? Ronald Ripley: I think it's going to be other tests in there that you're going to need to meet. Anthony Offredi: I understand that. I'm just trying to, and since I've moved down to the area, I'm one of the very few owners that have a single home on a plot of land that's eighth well, and the population density has actually increased since I've been down there I don't have a problem with because most of them are very nice town homes that have gone up in the area. The only thing that I do have an issue with is the density. It's increasingly getting crowded down there for single homeowners like myself. And, that's why I'm trying to figure out if we're going to have a rash of these culturally significant clones come up, I'm going to have to be here all the time. This doesn't include just the beach borough area. Old Beach and the north end are going to have a rash of these come up, and the density is going to increase tremendously Ronald Rlpley' That may occur but so far it hasn't. Staff, have you been deluged with a lot of bed and breakfast requests? Stephen White: No sir. Ronald Ripley: This is sort of one of the first ones Item # 18 City of Virginia Beach/Ordinance Amendment Page 4 Anthony Offredl: Yeah. I can understand that because it's just starting to come up, but my main concern is the re-trafficking of the cul-de-sacs. If we start ~ncludlng the 400 block, 500 block, 600 block of the Old Beach area then we're going to run into a density issue as well as a traffic issue. That's my viewpoint on this. Ronald Ripley Good point. Anthony Offredl: Thank you Ronald Ripley: Okay. Are there any questions° Thank you. Okay Is there anybody else Mr. Miller? Robert Miller: Mr White needs to answers the statements with regards to breakfast and the 24-7, I think view points that were made Stephen White' In regard to breakfast, of course the idea of the bed and breakfast is to have breakfast served. We' re not going to require the apphcant to serve breakfast, but I know that the applicant that you have on Item # 19 will be doing that The main thing and the comment that I heard regard to food being served or there be a restaurant kind of environment to people who are not guests at the inn. Under Section 225 1 as proposed to specifically notes that something like that cannot occur. Food and beverages may be served only as expressly permitted by the Conditional Use Permit. That is something that you're going to cover in your Conditional Use Permit. So, you can deal with that at that point, if you think it's appropriate Historically, architecturally, culturally significant, once again in Section 225.7, if someone built a house that replicated a Victorian home, I don't know if staff will tell you that's architecturally significant. To us, that's a clone of something that was architecturally significant And, under number seven, I think we have the ability to tell you that with what's listed there If there ~s anything I missed. William Din: Twenty-four hour management. Eugene Crabtree: Living on site. Stephen White: I think that's something that's going to be covered by 24-7 manager on site. Faith Christie: We don't plan on having a manager on site. Stephen White: Is that something that we need to add as conditions? Is that something that is covered under other codes? Faith Christie: I don't know. The bed and breakfast that I have been to in Charleston and Key West, their managers were not on site 24-7 Ronald Ripley: Some do, some don't. Item # 18 City of Virginia Beach/Ordinance Amendment Page 5 Faith Christie: Yeah. Stephen White: If you feel strongly about it, it's a Conditional Use Permit, you can have that as a condition. Ronald Ripley' Professional management is not adequate either, I don't think because that can be deemed off site all the time too Any ideas? You got to realize that this is a new ordinance, and we've discussed a lot of things this morning. We don't pretend to have the answers We're just creating this new thing William Din' I think one of the charms of having a bed and breakfast or a cottage or a use like this is having I guess an owner who feels strongly about the residence provides some cultural relationship. I think that adds a lot of charm to a bed and breakfast. I would encourage the owner to be a primary resident in that home also. To me, if he didn't live there maybe did have a manager there 24 hours a day would be a good idea. But to me, when you stay in a bed and breakfast, I think the charm of having something like is to have some relationship. Some kind of ownership that supplies that to the area, which 24-hour manager or typically the owner would provide. Ronald Pdpley' Or live in management that lives on site? William Din: Correct Ronald Ripley: I think that's about the best you can do because I've stayed in bed and breakfasts where the manager was not the owner but has been there for 20 years The owner lived in another state. But you still had that same feeling because you had the same type over there but they did But to try to put this type of a requirement onto a owner requiring him to have someone there and to pay him 24 hours a day that is something you have to think out in a business plan because you can sink the whole business plan that you have set up but, anyway Mr Miller. Robert Miller: What I think I said this morning is I would like to make sure that this ordinance is asking for what we want and not trying to stop something that we don't want. I do like the idea of having a professional or someone, if it's the owner that's fine, that's there 24-7. I think that makes for the right thing that we would like to have. And, I think the phrasing on page 2, line 49 if it said food and beverages will be served if expressly permitted. I think the intent there was to make sure that it was set up in a way that the Health Department would approve ~t and so forth, so I think if you say it will be served but it has to be expressly permitted by us, that gets us into the category, I felt like I'd like to be instead of saying may be served as only expressly submitted. I think we're trying to get and the encouragement would be to have it served but if somebody was not able to for whatever reasons be able to meet the Health Department standards or other standards that may come into effect that would be something that may not be able to do because the size of these will potentially vary from three rooms to 10 rooms or something different. So, I think I would favor both of those changes. One is that we have a Item # 18 City of Virginia Beach/Ordinance Amendment Page 6 profesmonal person on staff or a manager, again whatever the right definition is or the owner 24-7, and that food and beverages will be served if expressly permitted. Ronald Ripley' Well, that's in the ordinance Robert Miller: Something with the phrasing I'm just trying to go the other end of the phrasing and say positive that we would have that there. That ~s what we would like to encourage. Ronald Pdpley We're not getting ahead of ourselves but the application that we're going to hear after this does state specifically the type of food they will serve and that's what you' re trying to do Robert Miller' That is what I want to have in here is that we want to encourage people and I think the point was made very well by Mr LaFond that I would think that a bed and breakfast, and I never thought any differently, that it would have breakfast It didn't even cross my mind I think it's a very good point, and I think it's one that we can just encourage. There may be some that for whatever reasons would not have that, and I think I do understand that there will certainly be situations that might not present themselves. And, that is something that we have to decide on a proJect-by-project basis. Ronald Ripley' Mr LaFond, did you have a comment if it's new and short Stephen LaFond: If you don't have breakfast and all you're doing is renting rooms then what you've got is a rooming house. If you don't have an owner that is present on the premises or a manager that is present there 24-7, you don't have basically a residence for a resident of Virginia Beach. You have an absentee owner who is running a rooming house. And, then it's a whole different type of clientele then your background information which was researched quite well I might add. A lot of the same information is contained in the Professional Association of Innkeepers International Bi-Annual Report that are put together showing the demographic of the types of people that use bed and breakfast and what typmally bed and breakfast have. Again, I really think it's important that you have breakfast Not just that you're going to serve meals because that kind of opens up lunch and dinner and now you got a little different situation. You got yourself a restaurant and it's only a hop, skip and jump from three meals a day to opening it up to folks that are coming in from the outside. Because all of them want to eat at this really great little bed and breakfast but it's not a bed and breakfast, it's an inn. It is now serving three meals a day Ronald Ripley: Thank you for your input Stephen LaFond: If there are any other questions, I'll be happy to answer them. I've done an awful lot of research on this before I bought th~s place. One of the things of course was exciting was that fact that we were the only one in Virginia Beach. The Victorian Inn does not have breakfast. Angie's give you a chip. It's a youth hostile Item # 18 City of Virginia Beach/Ordinance Amendment Page 7 You can stay there for $17 00 a night. There are other places like Gallagher's is right around the comer from us. They don't have bed and breakfast. Robert Miller' Isn't there a song similar called "Nothing Succeeds hke Success". Congratulations. Stephen LaFond: Thanks. I welcome more of them. We could refer a whole bunch of people. Ronald Ripley: Thank you very much Alright, Will Din. William Din One other comment on the ordinance, what kind of set backs are placed on these bed and breakfasts? I notice that applications are going to have a lot of renovations to it and a lot of addition to it When you have a residence in this area on a lot what set back requirements are going to be followed? Stephen White. Whatever ~s applicable to the district within that structure is located. That's the setbacks they will have to meet. Janice Anderson: The underlying zoning or whatever. Stephen White: Right. Ronald Ripley: Okay. Joseph Strange: I have a question. Ronald Ripley: Joe Strange Joseph Strange: I have a question for the opposition here. When you were researching this and doing your research, how many of the ordinances require that they serve breakfast? Stephen LaFond: To tell you the troth Mr. Strange, many different Cltles don't even have any ordinances that deal with this I was involved, I'm an attorney, and I was involved in putting together a bed and breakfast in the City of Tomlin, Connecticut That goes way back to revolutionary times much as many those around here do. And, Tomlin didn't have any ordinances whatsoever. I represented a young couple that turned a beautiful old home into a fantastic bed and breakfast and it's been going ever since But we had to create the ordinance for the town and we had to create all of the information that they needed to do and so on, and they're weren't sure what the Health Department regulations even applied at all. We felt that they should because it was to their benefit to the owners. But anyway, it is uncharted ground Each city does things differently I have not checked with Norfolk. I know there is a new, basically two new inns that were set up there, the Page House and the Freemason Inn Bob Epstein is doing that and apparently both of them are doing quite well We refer a lot of people over there I'd love to refer Item # 18 City of Virginia Beach/Ordinance Amendment Page 8 people and keep the money here in Virginia Beach but there really aren't places to do that. Ronald Rapley: Are there any other questions or comments9 Jan, did you have a comment9 Janlce Anderson: Yeah. I have to be in agreement. I think if you're going to call it a bed and breakfast then you're going to put it in your zoning, I would put it in the definition is "residence that serves breakfast" and leave it at that I would put that in your definition. It's a primary residential structure and historical significance that provides lodging and breakfast. Just leave it in your definition, then the other part dealing with the onslte manager, I think everyone is in agreement with that. That needs to be there. I think that prevents any problems you have A lot of these are going to be ~n residential neighborhoods. You want on site managers just in case things come up. We don't want it to be a mini hotel. The food and beverage, I can understand why in number 3 under 225.1. I think that was beyond breakfast. Food and beverage may be served only expressly permitted. I can understand the reasoning in putting that language there is a more restrictive because you don't want it turning into a restaurant So, I know you wanted to change it. Robert Miller: When you change to breakfast, you fixed it Janlce Anderson: Okay. Well, I think in three it says, "beyond breakfast" If you're going to serve food and beverages that would be expressly permit then you can limit to whether it is going to change but I think with those changes Ronald Ripley: I think we said something like onslte owner or manager will be required to live on site to manage. Charlie Salle': I'm thinking its Section 1, line 40 probably should say that it provides hving quarters for the owner or manager of the inn may be provided probably should be provided. Then put in a manager or owner shall be presented on the premises 24 hours a day Ronald Ripley: That would work. Charlie Salle': Kay, did you get the other party Stephen LaFond: My wife and I do go out shopping once in a while Kay Wilson: Stephen and I have been rewording. For the defimtion it will say, "a primary residential structure of historical significance in which not more than ten rooms provided for lodging transient for compensation on a dally or weekly terms with breakfast beang served." That's your definition Ronald Ripley. Did you cover the management? Okay Item # 18 City of Virginia Beach/Ordinance Amendment Page 9 Kay Wilson: Under number one under Section 225.1, I have to use my glasses differently. If you go down to the second sentence, "living quarters for the owner or manage of the inn shall be provided in addition to lodging units Such owner or manager shall be on site and available on a 24 hour basis. Ronald Ripley: Does that work? Charlie Salle'. Manager or owner9 Kay Wilson: Or owner. Charlie Salle': Okay. Kay Wilson: Shall be on site and avmlable on a 24 hour basis. So you can go to the movies but take your cell phone. Ronald Ripley Okay. Charlie Salle'. You want ~t on number 3 on line 49, you want to put food and beverage? Kay Wilson: That's where we're going "Food and beverage will be served if expressly permitted by the Conditional Use Permit, that way were getting into the Health Department, and no event will the seating capacity exceed 25 persons including lodging guests. Breakfast will be served to guests." Janice Anderson Why are you changing "will". Why don't you just leave it Kay Wilson: Because we have already said that breakfast will be served. Janice Anderson: Okay. Kay Wilson: Because we said breakfast will be served and those are the two things that we said that we had to serve breakfast and you have to have an onsite manager. Those were the changes that will accomplish that. Ronald Ripley: Unless it's something new? Stephen LaFond' Is for something that Counsel just mentioned. Ronald Ripley. Come back up. Stephen LaFond I'm sorry. On number 3 when we said that food and beverages would be served only if expressly permitted by the Conditional Use Permit and no event will seating capacity exceed 25 persons including lodging guests That implies in the ordinance that you're open for people other than lodging guests And, I think you need to address that. Item # 18 City of Virginia Beach/Ordinance Amendment Page 10 Kay Wilson: I think you could in your Conditional Use Permit, Council can say you could have a little dining room that would be of 25-50 people. You have to have breakfast. Ronald Rlpley. Okay Jan did you want to make a motion on this9 Jamce Anderson: Yes. I'll make a motion to approve Item #18 which is the addition of the ordinance regarding bed and breakfast be a Conditional Use Permit in the following zones, RT-3, B-4, A-12, A-18, A-24 and A-36 Zoning Districts as we have amended with the definition being changed to bed and breakfast to include breakfast being served with the change under 225 1, Section 1, manager/owner shall be on site available 24 hours. And, food and beverages will be served as expressly permitted besides the breakfast, which shall be served. Eugene Crabtree. Jan? Excuse me We should also include that we have struck the requirement of 50 years of age on line 28 & 29 and on lines 79 & 80. Jamce Anderson: Thank you. Ronald Ripley' So we have a motion made and the second agreed to that and discussion from Mr. Crabtree. Anybody else have anything else to say? Watching legislation and sausages is not pretty is what you say. But this is a new one We're ready to vote. Ed Weeden. Ms. Anderson9 Janice Anderson Yes Ed Weeden' Mr. Crabtree? Eugene Crabtree: Yes. Ed Weeden Mr. Din? William Din: Yes. Ed Weeden: Ms. Katsias? Kathy Katsias: Yes. Ed Weeden: Mr. Knight? Barry Knight: Yes. Ed Weeden: Mr. Miller? Robert Miller. Yes. Item # 18 City of Virginia Beach/Ordinance Amendment Page 11 Ed Weeden: Mr. Pdpley9 Ronald Ripley: Yes. Ed Weeden: Mr Salle'? Charlie Salle: Yes. Ed Weeden: Mr. Strange? Joseph Strange' Yes AYE 9 NAY 0 ABS 0 ABSENT 2 ANDERSON AYE CRABTREE AYE DIN AYE HORSLEY KATSIAS AYE KNIGHT AYE MILLER AYE RIPLEY AYE SALLE' AYE STRANGE AYE WOOD ABSENT ABSENT Ed Weeden: By a vote of 9-0, the motion passes. Ronald Ripley: Kay, when you get that worked through with all the wording, can you send that back around to the Commission so we can see it9 Kay Wilson: Sure Ronald Ripley: So, we can see the way it worked out. August 12, 2003 zntricacies of what it's gomng to do to the nelghborhood and what not, but some of those have been brought up and we need a little bzt more tmme and I believe Counczlman Maddox has discussed a two-week deferral and I'm mn agreement w~th that so we can move on. Thank you. MAYOR OBERNDORF: Thank you. Mr. Maddox. COUNCIIAqANMADDOX: I would like to make a mormon that we -- can we do both at the same tzme? I would lmke to make a motmon that we defer Planning Item Number 1 and Number 2 for two weeks. COUNCILMAN REEVE: Second. MAYOR OBERNDORF: Are we ready for the question? CITY CLERK: With Mr. D~ezel out, the vote ms 11 to 0 -- 10 to 0 to approve the deferral until August the 26th for the Items concernmng the amendment of the Cmty Code and the Conditmonal Use for Gregory Nelson. MAYOR OBERNDORF: Madam Clerk, I pushed the yes button, but I looked up there and zt wasn't on the board. CITY CLERK: MAYOR OBERNDORF: It msn't showzng up there, but we have mt. Thank you. CITY CLERK: That's why I sazd 11 to 0. June 3, 2003 followzng condmtlonal use. COUNCILMAN MADDOX' They are both related. CITY CLERK' Right. COUNCILMAN MADDOX ' If he wants to come speak now. CITY CLERK' Anthony -- and ! can't read your name. Anthony. ANTHONY OFFREDI' Yes. CITY CLERK- I can't read your last name. ANTHONY OFFREDI- Anthony Offredz. CITY CLERK' 0ffredz. 0-f-f-r-e-d-i? ANTHONY OFFREDI- O-f-f-r-e-d-i. That's correct. CITY CLERK' Thank you. MAYOR OBERNDORF' Good evenzng. ANTHONY OFFREDI: Good evening. How is everyone today? I understand zt is going to be deferred, but there are a couple of things that I for one sztt~ng here knows that this is going to open up a fairly large can of worms and we want to make sure we get mt started on the r~ght foot. I've been smttmng down wzth my Counczlman and discusszng the June 3, 2003 FORMAL SESSION VICE MAYOR JONES: Under Plannmng Item M5 for a deferral of two weeks, the Applmcatlon of a Samr Enterprmses, Incorporated for a modmfmcat~on of a Conditional Use Permit concerning automobile storage and automobmle repamr. That's in the Rose Hall Dmstrmct. Is there a second? COUNCILMAN MADDOX · Second. MAYOR OBERNDORF' Okay. Are we ready for the Consent Agenda? CITY CLERK- By a vote of 11 to 0 you have adopted the Consent Agenda wmth Mr. Jones abstamnmng on the Planning Item for Number 7 and Mrs. Wilson dmsclosing on Number 3 for Ocean Beach Club. CITY CLERK- Your Honor, the next Item is the Plannmng Item to amend the CZO for the Bed and Breakfast Inn wmth a condmtmonal use mn certain distrmcts and to further amend the specifmc conditmons for Bed and Breakfast Inns. MAYOR OBERNDORF- Mr. Maddox. Do you have any speakers? COUNCIIR4AN MADDOX: Well, there's a gentleman here that I believe opposes mt if he's stmll here, but we've talked to the Applmcant. The Applmcant ms not here. We have agreed to defer it for two weeks. CITY CLERK- I do have one on the next Item, whmch ms the August 12, 2003 renting rooms, yes, there are taxes collected. MAYOR OBERNDORF' Okay. Good. COUNCIL LADY WILSON' August 12, 2003 Steven, do you know the answer to that? STEVEN THOMPSON- MAYOR OBERNDORF- Yes, they do. Yep, okay. Ail right. CITY MANAGER- Charging for the rooms they have to pay the tax. COUNCIL LADY WILSON' I lust wanted to make sure. MAYOR OBERNDORF' COUNCIL LADY WILSON- Even the -- I forgot what they are called. Hostels? MAYOR OBERNDORF' taxes on the room? No. No. No. Tzmeshare. If they are renting out rooms for the nmght, do they pay COUNC II/qAN MADDOX ' MAYOR OBERNDORF' When they are treatzng it as a hotel room, I'm pretty sure they still collect that. Okay. Because a lot of people are saymng they don't and I didn't thznk that was true. COUNCILMAN MADDOX · I don't know for a fact, but you would th~nk that would be the case. MAYOR OBERNDORF - We will fznd out. CITY ATTORNEY' When they turn it into a hotel and are actually taking reservations and August 12, 2003 Mrs. Wzlson. COUNCIL LADY WILSON- Bed and Breakfast's can be a really nice lodging experience and we would lmke for people who come here to have that quality expermence. COUNCILMAN MADDOX' I feel lmke we are mmssing that now. COUNCIL LADY WILSON- We are and I don't thmnk mt should lust be at the Oceanfront. There me some other places that we could look mnto. MAYOR OBERNDORF- Isn't the Vmctorman Inn that's down on Paczfmc -- COUNCILMAN MADDOX- There's one at 16th -- MAYOR OBERNDORF' It's very well cared for. They call ~t the Vmctor~an Inn. COUNCIL LADY WILSON' I lust have a quick questmon. Do they pay room tax on these? MAYOR OBERNDORF' I don't know. COUNCIIAqANMADDOX' I suspect they would. MAYOR OBERNDORF- Would a bed and breakfast pay a room tax like a hotel? Does anyone know? CITY MANAGER- As far as I know they do, yes. MAYOR OBERNDORF ' August 12, 2003 Okay. Mr. Reeve and Mrs. Wilson. COUlgCI~ REEVE- I can support the deferral to get better language, but isn't one of the key thing between a hostel and a bed and breakfast zs with the hostel you rent bed and wzth a bed and breakfast you would rent a room, which obviously you have a different przce-pomnt scenario. VICE MAYOR JONES- Have you talked to the owner about a deferral? COUNCI~ MADDOX: He called me on the phone before all of the -- well not all, but before the people that were opposed to it called me and then he called me a couple weeks ago and I samd, well, frankly, I haven't heard anythmng about it. Subsequent to hzs conversation, several other people have called me and I have tried to do a little bmt more research here. VICE MAYOR JONES- So, there wmll be speakers here? COUNCILM~/g MADDOX: There wmll be speakers. I would like to try to get to them before and see if we can defer zt so we don't have a lengthy dialogue tonight and bring mt back mn a couple weeks. MAYOR OBERNDORF - Okay. COU-NCI~ MADDOX- MAYOR OBERNDORF · Does that sound good? Yeah, zf that works out. Fine. August 12, 2003 that we can craft that language. I'm very supportzve of the zdea of a bed and breakfast in the Old Beach Area. There are some really quaint houses that I thznk could be utllmzed for thms reason, but thms ms sort of a watershed issue. Thzs is the fmrst tzme we've done thms in that area and I want to make sure we really have thought it out right and have some controls zn there. And, I would like to talk to you and get your perspective as well. COUNCIL LADY McCLANAN: Yeah, I'm perfectly wmlling to go along you know -- COUNCII24AN~DOX: Uh-huh. COUNCIL LADY McCLA/~: -- wzth your proposal. And, I'm for Bed and Breakfast Inns down there. It's just that I thmnk the way this zs drafted in here could be a problem. COUNCII/~ANMADDOX: Well, I don't want a dormztory either. COUNCIL LADY McCLANAN: No, I agree w~th you. COUNCIL LADY EURE: Well, there's too many, I haven't made up my mznd yet. Well, I don't know. Well, ~t mzght be this. It mzght be that. COUNCIIAqANMADDOX: Right. COUNCIL LADY EURE: Fzrst of all, we have to get it right. COUNCILMAN MADDOX: I agree. August 12, 2003 COUNCILMAN MADDOX: Maybe you and I could talk. I've met wmth the neighbor of the Applmcants here. I've met wmth hmm. I've looked at the property. I've talked to Barbara Yates three or four times yesterday. Now, Barbara does have two different sort of operatIons. She does have the youth hostel where you go in there wmth like bunk beds and all that. COUNCIL LADY McCLANAN: Yeah. COUNCILMAN MADDOX: And she has an actual bed and breakfast component of it too. And, when you read this, I mean, they are not allowed to stay more than 14 consecutmve days. Breakfast will be a requirement. They have adequate parkmng. You know mt seems to be the consensus of the people I've talked to -- and I have trmed to do a lot of research on thms -- ms that the bed and breakfast concept ms something that is well-recmeved mn that neighborhood. That mt's actually an investment mn the neighborhood and what I'm strugglmng with ms crafting language here mn the Condmtzonal Use Permmt that wmll ensure that you have that type of facmlity and that mt ms operated properly. Barbara, for example, ms an owner-operator. I mean, she's physmcally on the smte all the time. In thzs particular case, it's not gomng to be owner-operated and if you get a bad operator in there mt mmpacts the entire neighborhood. So, I've been workzng wmth Plannmng to try and craft some language to ensure that if it's not operated properly that we have resources to deal wmth it. Now, what I would lmke to do is see this deferred for two weeks so June 3, 2003 years we've had I can recall two other instances when we've dmscussed these one time in another part of the Cmty and one time -- well, I guess two times. MAYOR OBERNDORF: One was in Church Pomnt. COUNCIL LADY McCLANAN: MAYOR OBERNDORF: And one was out on London Brmdge Road. That's rmght. COUNCIL LADY McCLANAN: And, thms Ks what my kmds do when they travel and where they stay where you have a lot of people mn a facility where it's not qumte as spacmous and the rooms are a little different -- COUNCILMAN MADDOX: More lmke a hostel? COUNCIL LADY McCLANAN: Yes. And, there Ks nothing wrong wmth youth hostmles. I think they're great and around the country there are some wonderful ones mn dmfferent cities. But Ks this really -- I thmnk Richard Ks more tune to this than I am because the Barbara's place down there -- certaznly mt's great. We need that kmnd of thing at the Oceanfront, but I thmnk that mf we're going to allow a facilmty that's truly a youth hostel and call them bed and breakfast mnns, people are going to be mmslead who come here to stay. People who stay in bed and breakfast, they are of all qualmtmes and all kinds. If you come here expecting to stay in a bed and breakfast and you end up mn a youth hostel, I think you're going to have a very dmfferent attmtude. I don't know what Ks behmnd all thms. June 3, 2003 AGENDA REVIEW MAYOR OBERNDORF: All rmght. Now, for the Plannmng Items. The first one ms to amend Section 111.225 and all about bed and breakfast inns as a Conditional Use mn certamn Apartment, Busmness and Resort Tourmst Districts and further amend the specifmc condmtions for bed and breakfast inns. Mr. Maddox, don't you have someone who ms -- COUNCILMAN MADDOX: Rmght. We're going to need to hear about the fzrst and the second one here. MAYOR OBERNDORF: CITY CLERK: COUNCILMAN MADDOX: Ail rmght. Also, on this one you need to add a smxth condition and Stephen White has a copy. Thms ms a work in progress, so I don't want to hand this out lust yet. COUNCIL LADY McCLANAN: Yeah, but there's somethmng that needs to be samd about this. COUNCILMAN MADDOX: Sure. COUNCIL LADY McCLANAN: This ms not a bed and breakfast mnn that ms proposed, thms Number 2, the Applmcatmon mtself. In all of my traveling and I belong to the -- whatever it is. The American Youth Hostel Assocmation. What thms proposal is ms not a true bed and breakfast. If we really want to encourage this type of facility at the Oceanfront, that's one thmng. But, we really need to look at what ms a bed and breakfast and what -- over the Virginia Beach C~ty Council August 12, 2003 6:00 p.m. CITY COUNCIL: Meyera E. Oberndorf, Mayor Vice Mayor Louis R. Jones Harry E. Diezel Margaret L. Eure Reba S. McClanan Richard A. Maddox J~m Reeve Peter W. Schmidt Ron Villanueva Rosemary Wilson James L. Wood At-Large Bays~de - D~strict 4 Kempsv!lle - Dlstrlct 6 Centerv~lle - Dlstr~ct 2 Rose Hall - D~strict 3 Beach - District 6 Princess Anne - D~str~ct 7 At - Large At - Large At - Large Lynnhaven - D~strict 5 CITY MANAGER: CITY ATTORNEY: CITY CLERK: STENOGRAPHIC REPORTER: James K. Spore Leslie L. Lilley Ruth Hodges Smith, MMC Dawne Franklin Meads VERBATIM Planning Application of Gregory Nelson Nelson Gpin 2427-05-2744 ZONING HISTORY 1. Modification to a Nonconforming Use- Approved 12-10-02 CITY OF VIRGINIA BEACH AGENDA ITEM ITEM: Gregory Nelson - Conditional Use Permit (Bed and Breakfast Inn) MEETING DATE: August 26, 2003 · Background: An Ordinance upon Apphcabon of Gregory Nelson for a Cond~bonal Use Permit for a bed and breakfast on property located at 2420 Arcbc Avenue (GPIN 2427052744) DISTRICT 6- BEACH The purpose of th~s request ~s to convert the ex~sbng s~ngle-fam~ly dwelling ~nto a bed and breakfast. Th¢s request was deferred by the C~ty Council on August 12 to provide the opportunity for the applicant to meet with concerned residents ¢n the area surrounding the subject szte. Three add~bonal conditions for th~s use permit designed to address concerns expressed on August 12 are proposed (6, 7, and 8). The applicant is aware of and agreeable to the cond~bons. Considerations: The immediate area has remained fairly stable with a m~xture of single-famdy dwellings, duplexes, multiple-family dwellings, and a religious center. The site was zoned R-3 Mulbple-Fam~ly Residence D~stnct unbl November 1973. With the adopbon of the Comprehensive Zoning Ordinance ~n 1973, the site was zoned A- l Apartment d~stnct In 1988, the site was zoned A-12 Apartment d~stnct The exlsbng dwelling was constructed ~n 1938. It ~s an excellent example of development in the early years of the resort area. A large second floor porch is the ma~n focal point of the front of the house An "A" frame roof supported by box columns covers the porch. The exterior ~s clapboard s~d~ng on the first floor and cedar shakes on the second floor. The applicant plans to maintain the existing structure so that ~t has n~ne rooms available for compensabon and one room for the on-site manager. The proposed add~bon w~ll closely match the ex~sbng structure ~n both design and building materials The applicant also plans extensive landscaping in the yard areas The request ~s consistent w~th the recommendabons of the Comprehensive Plan and w~th the specific requirements specified for bed and breakfast ~nns w~th~n the C~ty Zoning Ordinance The character of the neighborhood should not be adversely affected by the operabon of a bed and breakfast ~nn at th~s Iocabon Gregory Nelson Page 2 of 3 D~rectly across the street exists the C~ty of V~rg~n~a Beach 25th Street Parbng lot, and a religious center exists several lots west of the s~te. Staff recommended approval. There was oppos~bon to the request · Recommendations: Th~s Cond~bonal Use Permit request can be acted on by the C~ty Council only ~f the C~ty Council has approved the amendment to the C~ty Zoning Ordinance allowing bed and breakfast ~nns ~n the A-12 Apartment D~stnct w~th a use permit. Otherwise, th~s request ~s null and cannot be acted on. The Planning Commission passed a mobon by a recorded vote of 9-0 to approve th~s request w~th the follow~ng cond~bons. S~te and building improvements shall be substanbally as submitted Modiflcabons may, however, be made to the plans ~f necessary due to action of the Board of Zoning Appeals related to variance requests. Any such changes shall be submitted to the Director of Planning for approval 2. There shall be no more than n~ne (9) rooms available for compensabon One add~bonal room may be prowded for an on-s~te manager o Food service shall be I~m~ted to breakfast and a menu of sandwiches, salads, soups, fruit and cheese plates, and snacks prowded for the guests of the ~nn Promobonal specials, such as oyster roast, crab picking or w~ne tasbng, are permitted prowded the special ~s only available to the patrons of the ~nn . S~gnage shall be I~m~ted to one (1) ~dent~ficabon sign no more than n~ne (9) square feet ~n area There shall be no other s~gnage ~n or on the windows, doors or exterior of the building other than emergency or d~recbonal s~gns that may be required by the Building Code Official. 5. Occupancy shall be I~m~ted to twenty-five (25)~nclud~ng the on-s,te manager CONDITIONS ADDED SINCE AUGUST 12 6 Rentals shall be provided on a 'per-room' basis and not on a 'per-bed' bas~s The ~nn shall not, ~n the op~n~on of the Zoning Administrator, emit smoke, dust, odor, fumes, glare, no~ses, wbrabon, or any other d~sturbances detectable at the lot I~ne that would exceed that normally produced by a s~ngle residence Gregory Nelson Page 3 of 3 The applicant shall ~nstall a pnvacy fence along the southern property hne. Installabon of the fence shall be ~n accordance w~th the requirements of the C~ty Zoning Ordinance w~th regard to fence height and matenals In add~bon to th~s fence, the applicant shall work w~th the staff to determine an appropriate vegetabve buffer along the southern property I~ne, subject to the approval of the Planning D~rector. Attachments: Staff Review D~sclosure Statement Planning Commission M~nutes Locabon Map Recommended Action: Staff recommends approval Planning Commission recommends approval. . ! Submitting Department/Agency: Planning Departmen~~l~ GREGORY NELSON/# 19 July 9, 2003 General Information: APPLICATION NUMBER: M06-215-CUP-2003 REQUEST: Conditional Use Permit for a Bed and Breakfast ADDRESS: 2420 Arctic Avenue ~o ~c~e Nelson C. rp~n 2427-05-2744 GPIN: ELECTION DISTRICT: 14878286540000 6 - BEACH Planning Commission Agenda July 9, 2003 GREGORY NELSON/# 19 Page 1 SITE SIZE. 8,400 square feet STAFF PLANNER: PURPOSE: Faith Chnstie To convert the exisbng s~ngle-fam~ly dwelling ~nto a bed and breakfast. Major Issues: · Compabbd~ty w~th the surrounding area · Consistency with the recommendations of the Comprehensive Plan. Land Use, Zoning, and Site Characteristics: Existinq Land Use and Zoning The s~te is occupied by an existing single- famdy dwelling, and is zoned A-12 Apartment D~strict Surroundin~ Land Use and Zoninq North: South: East: West: · 25th Street · Across 25th Street are smgle-famdy dwellings / A- 12 Apartment · S~ngle-famdy dwelling / A-12 Apartment · Arctic Avenue · Across Arcbc Avenue is the C~ty of V~rginia Beach 25th Street Parking lot · An alley · Across the alley ~s a s~ngle-fam~ly dwelling / A-12 Apartment Planning Commission Agenda July 9, 2003 GREGORY NELSON/# 19 Page 2 Zoning History The ~mmediate area has remained fairly stable with a m~xture of smgle-famdy dwellings, duplexes, mulbple-fam~ly dwelhngs, and a rehg~ous center. The s~te was zoned R-3 Mulbple-Famdy Residence Distnct unbl November 1973 W~th the adopbon of the Comprehensive Zoning Ordinance in 1973, the site was zoned A-1 Apartment d~stnct. In 1988, the site was zoned A-12 Apartment d~strict. The ex~sting dwelling was constructed in 1938. It is an example of the early development of th~s area of the Oceanfront Air Installation Compatible Use Zone (AICUZ) The site ~s ~n an AICUZ of 65 to 70dB Ldn surrounding NAS Oceana The United States Navy has reviewed the applicabon and has no comment. Public Facilities and Services Water and Sewer The site has an existing 5/8-inch water meter, which may be upgraded. Sewer and pump station analys~s may be required to ~nsure that the new flows can be accommodated. Transportation Master Transportation Plan (MTP) / Capital Improvement Program (CIP): Arcbc Avenue and 25th Street are considered two-lane local streets There are no plans to upgrade either street at th~s time. Traffic Calculations: Street Name Present Present Generated Traffic Volume Capacity Arcbc Avenue 3,098 ADT ~ Ex~sbng Land Use 2_ 14 6,200 ADT ~ 25th Street 1,410 ADT ~ Proposed Land Use 3_ 62 Average Daily Trips as defined by the ex~sbng apartment zoning as defined by the proposed bed and breakfast Planning Commission Agenda July 9, 2003 GREGORY NELSON/# 19 Page 3 Public Safety Police: Fire and Rescue: The applicant ~s encouraged to contact and work with the Crime Prevention Office within the Police Department for crime prevention techniques and Cr~me Prevention Through Enwronmental Design (CPTED)concepts and strategies as they pertain to th~s s~te. A fire hydrant is required within 400 feet of this use. Private fire hydrants must be maintained annually as identified ~n the N.F.P.A. 25. A Certificate of Occupancy shall be obtained from the Budding Code Official before occupancy of the structure. Comprehensive Plan The Comprehensive Plan Map identifies th~s area as Suburban ResIdential/Medium and High Density. This ~s an area planned for res~denbal density of above 3.5 dwelling units per acre. Summary of Proposal Proposal · The apphcant w~shes to obtain a Conditional Use Permit for a Bed and Breakfast on the site. The applicant proposes to enlarge the exisbng structure so that it has n~ne rooms avadable for compensabon and one room for the on- site manager. The applicant notes that a continental breakfast and a hght menu of sandwiches, salads, soups, fruit and cheese plates, and snacks will be prowded. On Saturday and Sunday, a hot breakfast w~ll be served. The apphcant plans to have beach chairs, b~kes, umbrellas, and coolers avadable for the guests. Wednesday w~ll be special day at the mn when the applicant w~ll showcase certain V~rgin~a trad~bons and ~tems, such as a crab p~ck~ng, an oyster roast, a w~ne tasting or strawberry desserts. The apphcant also plans to provide a spa and massage therapy room as a part of the ~nn's m~ss~on to provide a totally relaxing and peaceful stay. · The ex~sbng structure was built ~n 1938 and is an excellent example of development ~n the early years of the resort area. A large second floor porch Planning Commission Agenda July 9, 2003 GREGORY NELSON/# 19 Page 4 ~s the ma~n focal point of the front of the house. An "A" frame roof supported by box columns covers the porch. The exterior ~s clapboard siding on the first floor and cedar shakes on the second floor. The applicant plans to maintain the ex~sbng structure. The proposed add~bon w~ll closely match the ex~sting structure ~n both design and building materials. The applicant will need to obtain several variances from the Board of Zoning Appeals due to the change of use of the structure. The applicant ~s aware of the required variances. Should the applicant be unsuccessful w~th the Board of Zoning Appeals he will not be able to develop the s~te w~th a bed and breakfast inn. Evaluation of Request The request for a Conditional Use Permit for a bed and breakfast inn is acceptable subject to the condibons hsted below. The request is consistent with the recommendations of the Comprehensive Plan and w~th the specific requirements specified for bed and breakfast inns w~thin the C~ty Zoning Ordinance. The character of the neighborhood should not be adversely affected by the operabon of a bed and breakfast ~nn at this Iocabon. Directly across the street exists the C~ty of V~rgmia Beach 25th Street Parking lot, and a religious center exists several lots west of the s~te. The apphcant proposes to retain the charm of the exisbng "cottage" with a proposed add~bon using the same building materials and design as the ex~sting structure. The apphcant also plans extensive landscaping ~n the yard areas. Staff recommends approval of the request for a Condibonal Use Permit for a bed and breakfast ~nn subject to the conditions I~sted below. Conditions o Site and building improvements shall be substantially as submitted. Modifications may, however, be made to the plans ~f necessary due to action of the Board of Zoning Appeals related to variance requests. Any such changes shall be submitted to the Director of Planning for approval. There shall be no more than n~ne (9) rooms available for compensation. One addibonal room may be prowded for an on-site manager. Planning Commission Agenda July 9, 2003 GREGORY NELSON/# 19 Page 5 . Food service shall be limited to breakfast and a menu of sandwiches, salads, soups, fruit and cheese plates, and snacks provided for the guests of the ~nn. Promotional specials, such as oyster roast, crab p~ck~ng or wine tasbng, are permitted prowded the special ~s only avadable to the patrons of the ~nn Signage shall be hm~ted to one (1)identificabon s~gn no more than nine (9) square feet ~n area. There shall be no other signage ~n or on the windows, doors or exterior of the building other than emergency or directional s~gns that may be required by the Building Code Official. NO TE: Further conditions may be required during the administration of applicable City Ordinances. The site plan submitted with this conditional use permit may require revision during detailed site plan review to meet ali applicable City Codes. Conditional use permits must be activated within 12 months of City Council approval See Section 220(g) of the City Zoning Ordinance for further information. Planning Commission Agenda July 9, 2003 GREGORY NELSON/# 19 Page 6 ARCI~C A.~ I Two PARKING PLACES STmJC~U~E IST R.R Planning Commission Agenda July 9, 2003 GREGORY NELSON/# 19 Page 7 /./",% ,/ Planning Commission Agenda July 9, 2003 GREGORY NELSON/# 19 Page 8 Planning Commission Agenda July 9, 2003 GREGORY NELSON/# 19 Page 9 al J · Planning Commission Agenda July 9, 2003 GREGORY NELSON/# 19 Page 10 Planning Commission Agenda July 9, 2003 GREGORY NELSON/# 19 Page 11 ! Planning Commission Agenda July 9, 2003 GREGORY NELSON/# 19 Page 12 ARCTIC ¥ ALLEY Planning Commission Agenda July 9, 2003 GREGORY NELSON/# 19 Page 13 O Planning Commission Agenda July 9, 2003 GREGORY NELSON/# 19 Page 14 [ [ [ [ n, [ [] ] ]'[ ........ [ APPLICANT DISCLOSURE If the applicant ~s a CORPORATION, list all officers of the Corporation below' (Attach list if necessary) ~ ,/~Z[- If the applicant ~s a PARTNERSHIP, FIRM, or other UNINCORPORATED ORGANIZATION, list all members or partners in the organization below: (Attach l/st if necessary) ~ / ~ [~Check here ~f the applicant ~s NOT a corporation, partnership, firm, or other ~-hincorporated organization. If the applicant is not the current owner of the property, complete the Property Owner Disclosure section below: PROPERTY OWNER DISCLOSURE If the property owner is a CORPORATION, hst ali officers of the Corporation below: (Attach list if necessary) If the property owner is a PARTNERSHIP, FIRM, or other UNINCORPORATED ORGANIZATION, list all members or partners m the organization below: (Attach list if necessary) {~ Check here ~f the property owner ts NOT a corporation, partnership, firm, or other unincorporated organization ~ ]a~/~accurate. ~ .~ CERTIFICATION ! certify that the information contained herein is true Print Name Cond,t~ona! Use Perm!t Apphcatlon Page 8 of 12 Planning Commission Agenda July 9, 2003 GREGORY NELSON/# 19 Page 15 D,SCLOSURE STATEMENT , 11 _ 111111 iiiiiii , i11 Applicant's Name: (/'~E'~:-:-~ List Ali Current Property Owners: APPLICANT DISCLOSURE if the applicant is a CORPORATION, list all officers of the Corporation below: (Attach hst if necessary) ,/~/,¢z~/: ..... If the applicant is a PARTNERSHIP, FIRM, or other UNINCORPORATED ORGANIZATION, hst all members or partners Jn the organization below: (Attach list ,f necessary) /~j / ~ .~inCheck here if the applicant is NOT a corporation, partnership, firm, or other corporated organization. If the applicant is not the current owner of the property, complete the Property Owner Disclosure section below: PROPERTY OWNER DISCLOSURE If the property owner is a CORPORATION, list all officers of the Corporation below: (Attach list if necessary) If the property owner is a PARTNERSHIP, FIRM, or other UNINCORPORATED ORGANIZATION, list all members or partners in the organization below: (Attach I/st /f necessary) I-I Check here if the property owner ~s NOT a corporation, partnership, firm, or other unincorporated organizabon. CERTIFICATION: I certify that the information contained herein is true Laccurate..~ Print Name Cond,honal Use Permit Apphcabon Page 8 of 12 Planning Commission Agenda July 9, 2003 GREGORY NELSON/# 19 Page 16 Item #19 Gregory Nelson Conditional Use Permit 2420 Arctic Avenue D~stnct 6 Beach July 9, 2003 REGULAR Robert M~ller' The next ~tem ~s Item #19, Gregory Nelson. Gregory Nelson: Good aftemoon. Ronald Pdpley: Good afternoon. Gregory Nelson: My proposal ~s a bed and breakfast, and we want to bmld th~s on the comer of 25th and Arctic ~ncorporat~ng the emst~ng structure. Ed Weeden: Could you please ~dentffy yourself. Gregory Nelson: Gregory Nelson. Ed Weeden: Thank you Gregory Nelson. I'm the owner of the property. I've owned ~t s~nce 1989. And, I don't know ~f you're fam~har w~th that neighborhood, ~n 1989 there was a lot going on at that t~me. And, we pretty much tore the whole face of th~s bmld~ng off and restored ~t back to the original condition with cedar shake, clapboard s~d~ng and tried to keep to the same aesthetics that it always had. What we're proposing ~s a bed and breakfast not only ~n the ex~st~ng structure but to add on to make the numbers work really. In order to make a bed and breakfast you have to have so many rooms. The current structure only has enough space for two rooms. And, that wouldn't even allow for space for a manager. So, we have to add on to ~t ~n order to accomplish what were looking for. That addition that we are looking for which ~sn't up there but I th~nk we have slides for lt. The yellow ~s the new addition that would accompany all the new bedrooms. The would allow for guests to have not only separate entrance off the mmn or the ex~st~ng structure but each one w~ll also have their own bathroom, which I th~nk is very ~mportant. I traveled around North Carohna and Vlrg~ma staying at bed and breakfasts, and the only th~ng I d~dn't hke was shanng a bathroom with someone down the hall so that ~s very ~mportant to me, that every guest have their own bathroom W~th that addition, we are going to keep that same look, the cedar shake up top and the clapboard look on the bottom The clapboard on the bottom w~ll be a cement board to not only preserve the look but also preserve the mmntenance ~ssue, which comes with clapboard. Unfortunately, the th~ng w~th existing structures ~s the clapboard. They decay so quickly that ~t ~s a regular maintenance ~ssue. So, we're going to try and bnng ~n a natural look but at the same t~me keep the maintenance down The tower in the m~ddle was really kind of designed for the look of Item #19 Gregory Nelson Page 2 not only to observe the ocean from that level, but also the hfeguard museum, which ~s just down the street So, there was some thought process going into that design to ~ncorporate w~th rest of the surroundings. The ~ntent ~s to fully operate as a bed and breakfast w~th a manager on s~te hwng there on a regular bas~s, but only operate e~ght months out of the year, to be closed for four months out of the year. Until the need arises to possibly continue four months. I don't see January, February, March and April being those types of months that w~ll suffice operations. So, we only structured ~t for e~ght months of operation at th~s txme That could change w~th the demand w~th changes that the C~ty xs doing w~th 31 st Street, w~th the Pavilion and everything else that is xnvolved. But that ~s how we see ~t now. W~th of course 25th Street being one of the only streets that hasn't been blocked off, there ~s a lot of traffic, of course coming down 25th and turning left on Arctic. And w~th the mumc~pal parking lot there ~s a lot of vis~b~hty for th~s s~te. I th~nk the ~ntention ~s, and of course s~nce I've been the owner for a long time I don't plan on bmld~ng th~s and selhng ~t right of way. I'm planmng on keeping ~t for a long, long t~me and ma~ntmnlng ~t as a structure that I'm going to be very proud of and hopefully, the neighbors and everybody else will be proud. My goal ~s to create a relaxed atmosphere. A lot of the plans that you see, I mean ~t's a rough rendenng, unfortunately ~t doesn't show all the plans and all the layout but we plan Enghsh gardens, beautiful w~th little fountmns ~n the front, really dressing up the front so that ~f someone wanted to take stroll through the garden they create that relaxed feel, not the hustle and bustle that may be you can get at the beach front but they can step a httle back and a couple of streets back and go to a bed and breakfast and have relaxatxon and enjoy themselves w~thout a lot of the beach front activity. So, that's really the goal, and that ~s my marketing strategy ~s to make sure that I go after that chentele that's going to s~t back, relax and enjoy, not be loud, not be noisy. That's not my ~ntent at all. So, I th~nk we changed the bedroom. We were looking at trying to squeeze ~n four people per bedroom, and I just don't see how that's going to work. There are going to be two bedrooms that w~ll probably w~ll allow that or two umts that will allow that. The other umts wall only be two people per bedroom. So, I think ~t's a total of about 35 occupants that could actually fit in th~s bed and breakfast at a full capacity level. Ronald Rlpley: Are there any questions? I have a couple of questions. You mentioned the manager on s~te so you're okay w~th that. Gregory Nelson: I planned on hawng someone hwng there on a regular bas~s at all t~mes. Ronald Pdpley: I'm talking about land use but this part of th~s whole 1s the ambiance of the way you described ~t, and I think we really hke what you have to say there Can you enter your property and you go ~nslde, we reahze we're moved a way from land use but what would you see when you walk ~nto your lobby? What would ~t be hke? Are you planmng on doing some special w~th antiques? Gregory Nelson: I don't plan on selhng any antiques. Ronald Rlpley: I don't mean sell them but decor, etc. Item #19 Gregory Nelson Page 3 Gregory Nelson: The dbcor will go with the beach look. I don't plan on bnn~ng a lot of heavy antiques into it I plan on bnnglng on more of the beach feel into lt. I'm not sure what it's going to be and it's not going to be anything of a wicker type, but may be more of the and I can't think of the right word but certain furniture that works with the beach atmosphere. Ronald Pdpley: Okay. Gregory Nelson: But when you walk into tins structure you will have hardwood floors, a fireplace, and I'm not planning on changing too much of the interior. And, you look into a d~mng room, a living room and up to the wing on the left around the right as we look at it, which was an addition to the house that existed in the older house. That's the bedroom. So, I plan on creating a little hallway there to allow access to the one unit, the end umt on the right hand side. Ronald Rapley: How about serving you a breakfast9 How would you do that? Gregory Nelson: That would also be in the service area. Ronald Rapley: Can you point that out I'm not sure where that is. Gregory Nelson: Yeah. Ronald Rlpley: Mr. Gregory? Gregory Nelson: There's a pointer? Ronald Pdpley. Mr. Nelson, Excuse me. Barry Knight: Top left. Ronald lhpley. The black thing to the right of you. Gregory Nelson: Right here? Ronald Ihpley. Yeah. Gregory Nelson. As you walk in there's a wall right there. And, then there's a wall here. And, this is the katchen area. And, when you walk in there's a split here in the wall that splits the dining room but still keeps it open. So, I was planning on putting a hutch back here where the kind of breakfast is served. I'm putting a couple of tables in the dining room, and also I'm having a sit down area up here but it's more with the chairs and the couches and maybe more of the tables that pull out, but I don't plan on making this into a restaurant style serving area. More of a dining table, more of a home style sort of and with the hot breakfast, we would have to do a phase in like maybe two breakfasts where Item #19 Gregory Nelson Page 4 we would go at eight in the morning and one at ten or something of that nature. Because this house just could not facilitate all of this. Ronald Rlpley: Do you have any opportunity outside to do anything hke in the courtyard area? Gregory Nelson: Yeah. I thought about that. I'm not sure my neighbors or myself would like the traffic coming outside. I think it would be wonderful for the guests. I'm not sure that the neighbors or myself would like people roaming around outside on a regular basis every weekend eating outside I think it's a great idea but I don't know how well that would take. Ronald Rlpley: Okay. Gregory Nelson: We may do some trial basis and get a feel for It. One of the things that I really want to work on with this bed and breakfast is the neighbors. I want the neighbors to create a lot of the guest issue, tell their friends. We have a wonderful place to come and stay in Virginia Beach. A lot of the houses in that area are very small. We have 836 across the street that are very small umt and they want to bnng their guests in but they may have to put them down in the resort and here you have an opportunity to bnng someone m the neighborhood and have them stay at a beautiful bed and breakfast. Ronald Rlpley: And your parking? It says concrete slab. Is that going to be just slab or exposed aggregated? Gregory Nelson: Well, I'm thinking more of and because of the drainage issue, I will have to try to do impervious paver of some sort that will allow the draining rather than draining right into the alley or into the street or out through the soil in some fashion because there is a lot of structure there. So, we're going to have to take that into consideration when we put everyttung in. Ronald Rapley: Okay. Are there any other questions? Thank you. Robert Miller: We have Mr. Memtt Miller Memtt Miller: I'm Merntt Miller. I own the property right next door to the property he is talking about making into a bed and breakfast. Most of that area as rented property right now. To afford a bed and breakfast I don't know if I'm really crazy about th~s or not. To me, truthfully they're for the tourists. You have to stop and think of the people who own the property and the people who live here that pay the taxes My taxes went up 28 percent, which is a big jump. They don't raise taxes. They raise the assessment. My assessment went up 28 percent. Ronald R~pley' Hopefully, we all know that. Item #19 Gregory Nelson Page 5 Memtt Miller: I have tried to work with the City as far as getting the alley between his property and mine black topped. No, we can't do lt. That's only a street on paper. They black topped between 24th and 25th up to the center and from Arctic to Baltic all the way across the block. But, the half, where my properties are, they won't black top it. They can't even get the grader out there to grade it. I've hauled crush and mn in myself. I paid to have it done. Every time it rains my house gets flood with water underneath. I need something done there, but back to the subject here on bed and breakfast. I'm not really in favor of it. The way everything is set up. I not~ced back 1988 they changed the zoning on my property. I was never notffied of that. It went to A-12 from A-1. Ronald Rlpley: Are you right next door to the property? Memtt Miller' I'm right next door. Ronald Pdpley: So, your just south? Merntt Miller: Pdght west of his property. I'm on 25th Street. Ronald Pdpley: You're on 25th Street Merritt Miller: Yes. Ronald Pdpley: Okay. Merritt Miller' I've got 408 & 410. Ronald Pdpley: Okay. Memtt Miller' But in 1988, they changed the zoning on that property. I was never notified. Ronald Rlpley: Is that when they changed it to the RT zone? Memtt Miller. That is when they changed it to A-12. Ronald Rtpley: Oh, A- 12 Charhe Salle': A-12 and A-1 are the same thing. Memtt Miller: It 1s? And, my final thing is I'm not in favor of it I think for me to observe some of the thoughts of the people who actually own property around there and how they feel. We're actually the people that are support Vlr=mnla Beach. Ronald R~pley: Mr. Mdler has a question Robert Miller: Question for Mr. Miller Item #19 Gregory Nelson Page 6 Memtt Miller: Yes. Robert Miller. You rent the properties that you have? Memtt Miller: Yes. They are rental properties. Robert Miller: And you said there was flooding in that area. I think this is one of the project areas Stephen is it not, for a calming. And, we're also doing drainage improvements in this area9 Is that correct? Stephen White: That's correct. Robert Miller: So hopefully that will be something, and the City is doing some projects in there. As far as the alley way goes, that should be maintained by Public Works. It is a public right-of-way. Maybe we will just make a note of that and see if we can't notify the appropriate people. Memtt Miller: The trucks and the fire trucks they all could use it. Robert Miller: Fire trucks go through there? Memtt Miller: They can get through there if they have too. I just had three cars towed out of there this past weekend because they parked out in the alley Robert Miller: I tbank the City has a responsibility to make sure that alley way is maintained and that the drainage improves. We'll make sure that the staffnotffies Public Works Department and they will follow up. You feel free to call Planning. They'll help direct you to the people in Public Works to help you with that. Merntt Miller. Okay. Thank you very much. Ronald Pdpley: Kathy Katslas had a question. Kathy Katslas. Excuse me. You said your property were for rent. You rent them both? Merntt Miller. Yes. Kathy Katslas: On a weekly basis? Yearly basis? Memtt Miller: No. Yearly basis. We got family in both places. Kathy Katslas: Thank you Ronald Rlpley: Are there any other questions? Thank you very much William Din: Can you use the pointer and show where you live again9 Item #19 Gregory Nelson Page 7 Stephen LaFond' Next to the left. There you go. Memtt Miller: Raght there That's 408 and 410 is directly behind it. Ronald Ripley' Gene, do you have a question? Eugene Crabtree: Do you physically live in one of those houses? Merritt Miller: No, I don't. Eugene Crabtree: You just rent them. You do not live on that property that you own. Merntt Miller: No, I don't. Ronald Pdpley: Okay. Are there any other questlons9 Thank you for coming down. Robert Miller Mr. LaFond. Stephen LaFond: The original building that's being renovated is a terrific looking building I think. It just looks like it has a beach feel to it, and it probably does have some sort of tustoncal and architectural significance. But that is only about a third of the finished product. And, I don't really thank it would fit in with a bed and breakfast as we got the ordinance drafted. The reason being is that the bed and breakfast has to be in a residential structure. It's presumably an ex~stlng residential structure not something that is being created as a brand new venture That rules out cultural significance, historical slgmficance or something that you originally had drafted that was over 50 years old. It's unfortunate that a lot of buildings don't lend themselves to a bed and breakfast because they are too small, and they are economically not feasible. And, that's what I heard the applicant talking about in this case. If that is the situation then I would suggest that he strongly look some place else or come in before the Board under a different plan because I think the structure or the drawings that he's done on the rendition really look temfic. I mean it looks like it will be a great building. But certainly it would not, I think fall under the bed and breakfast zoning that you just passed, but probably should be something under a motel/hotel or whatever. I'm a little concern looking at the plans. There are bathrooms in each of the rooms that appear on the first floor, and I'm not sure or maybe it's just my ignorance on how the plans are here but it's just open to below if you look at the second floor plan. And, there's only one bathroom upstairs although it looks like five or six rooms and there is no access to that bathroom from the front room for example There is no bathroom in the area that's accessible from most of those rooms unless they're open to the room that's directly beneath that and again, that could be like a two story apartment or townhouse style. Either that or that whole second floor is one unit which would really be substantial because it would be somewhere in the area of 2,000 square feet. Thank you Ronald Rlpley Are there any questions? Thank you Okay. Mr. Nelson, did you wish to come back and rebut? Item # 19 Gregory Nelson Page 8 Anthony Offredl: My card 1S in there Robert Miller: No sir. Ronald Rapley: Please come up Anthony Offredl: Thank you. Ronald Rapley: Sorry. Anthony Offredl: Anthony Offredl, 2416 Arctic Avenue I'm the one that pretty much effected by this whole proposal. I'm unfortunately deeply in opposition to lt. And, once I get through my little spiel here you'll understand why. I'm going to pass through. Ronald Pdpley: Can you point out where your property Anthony Offredl: Oh sure. Not a problem I'm right here. That's me. Ronald Rapley: Okay. Anthony Offredi: I want to pass around some pictures and what not, and I also have a letter from my other neighbor. He couldn't make it because he basically snobers down here. He does rent his house on a weekly basis but he screens all his clients before they are allowed to rent. He lives right here. And, this house right here, his grandfather gave him that is five or six umts. I'm not exactly sure. As you can see it's quite a dense area and if you want to go through with what I have stated here. I'm a current property owner directly adjacent to 2420 Arctic Avenue. I'm deeply effected by this proposed variance change. The proposed bed and breakfast will bnng great hardship on my family as well as the neighborhood based on the following. Number one, parking is at a premium in the area. The cul-de-sac change will now force a change down to Arctic on to 25th Street. People illegally park up and down 25th Street as well as an alleyway Tow tracks are now a constant sight in the area even with off street parking. How is the neighborhood going to deal with visitors parking on the property? I can tell you right now that Memtt and I he spent two hours on Sunday taking care of the problem in the alleyway with the police officers as well as the towing facilities. And, I was blocked in also and I had to wait until the facilities came and this would greatly exacerbate the situation. Second, how's the congestion? Currently all the neighbors just have enough room to feel private yet still in a close net community. Any more population in the area as well as expansion is going to cause uneasiness amongst friendly neighbors. My backyard is my sanctuary from traffic, you know, work and the City. I relax and play with my dog and child without feehng like I'm being watched. I can't say that I have the same feeling if you're going to be living next door to a hotel. I feel like I'm going to be watched 24-7. The City has spent thousands of dollars effectively splitting the residential from the commercial vacation industry, which we greatly appreciate The split physically occurs east of Arctic and the cul-de-sacs Although some unforeseen traffic conditions have occurred it was welcomed by the Old Beach area with open arms This variance will blow the lines that they spent Item # 19 Gregory Nelson Page 9 so much time and money developing. Everyone pretty much knows where the residential area now is and where the commercial area is and that has been fantastic over the last couple of months. We really appreciated that. Property values. I have no doubt in my mind that the surrounding property values will decrease in value. My wife and I spent a great deal of time and money refurbishing a rundown ranch into a beautiful beach house. This proposed action will undue any sweat equity we put in. Lastly, I can't raise a family and retire next to a hotel. If this proposed action was next to your two year old daughter, would you not agree with it? Imagine what the ramifications of visitors staying for a few days and decided to use your private yard next door would be a great place to misbehave. Ronald Rlpley. Mr. Offredi, you k~nd of ran out of time. You kind of need to summarize you can. Anthony Offredl. Really, I thought I had ten minutes. Ronald R_tpley. No. Three minutes. Anthony Offredl. Three minutes. Okay. If you look on page 7 and 17 in there, it basically shows there are two color pictures in there of my backyard and how it would be affected. Basically, this proposal would eliminate any privacy that my family does have as a sanctuary Ronald Pdpley: Do you want these back? Anthony Offredl No. They're for you. You can keep them. They're all on file. I have copies. But as you can see, it would cause great discomfort to me, and my family as well as the neighbors. I feel really hard about coming up here. There have been other proposals by Greg in the past about turning that thing into some beautiful town homes which we came to an agreement back, I tl~nk a couple of years ago. And, I was all for those. I hved in a couple of town homes before I actually moved into the property and if we could go back to that type of atmosphere, I think that would be better for the neighborhood I feel this as well as Horace Hanshaw. He's the second page and he's the other neighbor that wrote a letter and he will down here on the 12th. Ronald Pdpley: Okay. Anthony Offredl So, if you want copies of the letters, I can g~ve you these. Ronald Pdpley. Does anybody on the Commission have any questlons* Mr. Offredl? Thank you very much. Anthony Offredl' Thank you. Gregory Nelson' In reference to Mr. Miller's concern with the alley, I totally understand the fact, that my thinking is to help the alley along by paving that portion that the bed and breakfast joins so that it will help the flow of the water and things of that nature and the Item # 19 Gregory Nelson Page 10 constant mmntenance of that entrance to that alley because the stones are always kinked around. I'm on a regular bas~s d~gg~ng out the s~dewalk because of the lowness of that area creates just a puddhng effect and ~t's always pond~ng w~th dirt and silt and th~ngs of that nature. So, that's obviously a need to ~mprove and I'm w~lhng to do that. In reference to the plans as far as the bathrooms and ttnngs of that nature, they are probably 80 percent complete so you may not see all the fixtures ~n the plans. But, every bedroom or every occupant that would reside ~n th~s would have a bathroom. For instance, the top right there, that's the bedroom. Even though there aren't any fixtures. That's the bathroom, that's a bathroom w~th a s~tt~ng area. So, we d~d that just to ~mprove speed~ness to try and make th~ngs move a httle faster w~thout the plans. And, ~n reference to Mr. Offred~'s comments ~n privacy, I'm obviously very concerned about that ~fwe were to switch the side to south elevatmn, I'm planmng on putting a large, right now there's skyrocketing cypress ~n front of the house. I plan on moving those to the s~de. That's the type of plant that you see there. I'm trying to shield and create that privacy. I'm also planning on putting a fence line around that which exists now. In fact, that fence line would be enhanced w~th a racer fence and also creating privacy and preventing people from casualty walklr, g ~nto the neighbor's yard. That ~s why the whole front yard ~s also proposed to be fenced at a low fence. More of a wrought iron look w~th the planting wbach you can just catch a ghmpse of the arbor ~n the front there. For that same issue ~s to create that perimeter to say, "Gus, stay w~thm the perimeter", that type of situation so we hope to control ~t. And, as far as cars parking ~n the alley that would have to be managed on a regular basis I understand that. There are rune parking spots, which ~s what the total reqmres for rune bedrooms, and I'm making sure of that there w~ll be rune parking spots available on s~te, not off s~te. Ronald Pdpley: Are the planting that you plan there, are those Leyland Cypress? Mr White, do you know? Stephen White. I don't what they are. Do you know what they are Greg? Gregory Nelson: The trees that are ~n front of the house, I believe are skyrocketed Cypress. That is what I call them That ~s what I plan on using ~s the same plant that ~s ~n front of the house ~nclud~ng those to the rear or to the side and creatxng that buffer. Not only front that location but also along 25th Street where the parking ~s. I want to create a buffer there to so when people drive down the road they don't see that string of parked cars. So, I'm trying to blanket ~t and create a little buffer there so ~t is very appeahng. It's very ~mportant to me. Ronald Pdpley: Froth, do you know the species your looking for there? Froth Christie: I don't know what those are. They could be some sort of fir Ronald R~pley: Yeah. They don't look like they are cypress. Faith Christie: They're not cypress. Item #19 Gregory Nelson Page 11 Ronald Rtpley: They're not cypress. Gregory Nelson: They've done very well. They've been there from 10-12 years. Ronald Rlpley: See, that's the point They really don't have much growth to them and they're pretty narrow The Leyland Cypress ~s a normal plant that we use to prowde a buffer. For example, the shopping center that we were looking at earher today ~t had buffered behind the shopping center as a m~m storage, Leyland Cypress were put ~n and you d~dn't know the houses were back there Gregory Nelson: My only concern ~s how w~de they get. I've taken up half way along that s~de because I want to make a race httle garden pathway between the fence hne and the structure and these stay narrow and they slow at growth but some of those are approaching 15 feet ~n height. Ronald Pdpley: I'd hke to see you work that out w~th staff' and come to term w~th a plant that will accommodate your parkang w~th and still get the buffer ff th~s apphcat~on ~s approved. Gregory Nelson: We can be more than wflhng to do that. Ronald Pdpely: Ms. Katsxas has a question. Kathy Kats~as: Mr. Nelson, the ex~st~ng square footage of the house now ~s what? Gregory Nelson: Approxxmately 1,800. Kathy Kats~as: And you're ~ncreas~ng ~t to what9 Gregory Nelson: The new structure, I th~nk is 3,600. Kathy Kats~as: So, ~t will be a total of what? Gregory Nelson: 5,400. Kathy Kats~as: W~th the add~tlon, do you have to go by ADA reqmrements being that your going to be renting the house and hawng people reside there? Gregory Nelson: I'm not sure. I haven't looked that part up. I do have an elevator planned for the tower area to be able to move people up and down the floors. Kathy Kats~as. How w~de are the bathrooms? Gregory Nelson: I planned on going along 36 ~nches and making sure the spaces are appropriate for any type of hand~cap Item # 19 Gregory Nelson Page 12 Kathy Katslas: So, you're doubling the size of the existing square footage that currently is there now. Gregory Nelson: More than doubling. Yes Kathy Katslas. Thank you. Ronald Pdpley: Are there any other questions? Charhe Salle': I have a question. Ronald Pdpley. Mr. Salle' Charhe Salle': Would you be agreeable, if you can do it to a limitation on the number of guests that will be on the premises? Gregory Nelson: Economically, I would have to look at lt. To have a live in manager and to have all the other things and try to bnng this type of structure into an upscale environment and provide the aesthetics and architectural features that I want to do demands a certain number of rooms. And, there's a certain rental factor. Charhe Salle': Have you come up with a number of guests you have to have9 Gregory Nelson: Just rooms. Renting out on a six-month level at about 80 percent occupancy, nine of those rooms being rented out at an average of $100.00 per night. They are going to vary from $95-150 is what my goal is. The larger rooms obviously and the better views will obviously push the higher dollar amount. Charhe Salle': How many people per room9 Gregory Nelson: Two bedrooms or two people in a bedroom in the smaller ones and we have that's up to six. I'm revisiting some of that because I'm not sure if that's the wisest move. I think maybe scaling it down to four may be more appropriate. That's for comfort too. I don't feel comfortable having someone sleep slx in a room, pullouts and tripping over each other. I don't think that's appropriate. Charhe Salle': I have some concerns of that to in terms, I mean you may have the perfect operation but you may not own this property forever and we have four people to a room and we have nine rooms. And, we have that many people staying in that size facility in that location could be a real issue Gregory Nelson: But if we need to put an occupancy level on it, we could address that I guess. Charhe Salle': The building would have code requirements that would do that anyway. Item #19 Gregory Nelson Page 13 Ronald Rlpley: What did you have in mind Charhe? Charhe Salle': I was thlnkang two per room and that would make it 23 guests. Gregory Nelson: Could we have 20 maximum of some sort where we can put three in a room~ I mean by doing two in a room you're minimizing your market. Many people that come in with a child or something to that nature that you're just Palling that whole market setting. I just don't see how that would be feasible. That's why I think at least one of the bedrooms is going to be four per room because some have two children. The average family is 2.2 children in America So, this is an ideal location for a lot of Washington DCers to drive away and get away and I just think its perfect for it. Charhe Salle': Well, I'm not expert in this field and I don't know what the number should be but it just seemed to me that there ought to be some constraints on how the operation should work. Gregory Nelson: I understand. I think four to a room and I might be willing to look at that. I think six is too much. That was my original plan and every time I think about scares me so I think I should scale it back down to four. Charhe Salle" Four to a room would be in access to what I think it should be on this property. Gregory Nelson: Not every room though. That would only be two rooms out of all nine. Robert Miller: You said a minute ago 20. Is that a limit you could live with? Gregory Nelson: Yeah. I think 20 occupants would be probably reasonable. I think 25 is more reasonable. I really do. It's how you can market the rooms. If I'm limited to 20, that means almost two per room. If I have two in each room and there's nine room, that's 18 that only allows me one room to go to four. And, lfI start seeing a number of people wanting three sleeping arrangement, and I have the ability to have at least four rooms that could supply that space of three, I'd just kill the large market segment and therefore it could cause me to suffer as far as a successful bed and breakfast. Charhe Salle': I've never stayed in a bed and breakfast so I'm not an expert in anyway. But it just seems to me that what you're talking about when your catering to a couple of children and so forth that you're getting out of what I consider to be a bed and breakfast operation and more in to what I consider a motel operations. Gregory Nelson: Well, that's a good point. I consider who stays at bed and breakfast and typically it's professionals traveling but we're in a different market then most bed and breakfasts We're at the beach And a large portion of the segment that comes to this area are families and if I'm not mistaken, that is what Virginia Beach is loopang for is a more of a family oriented type of clientele and if we're going to go after that market I would think the bed and breakfast should also have that small opportunity for that I'm Item//19 Gregory Nelson Page 14 not asking for the whole bed and breakfast but maybe we limited six of the rooms for two bedrooms and the remmnmg three rooms to be four to a bedroom. I th~nk that's appropriate. So, that would be actually 30. Is that 24? Eugene Crabtree: Twenty-four people. Ronald Pupley' Okay. Yes, Barry do you have a question° Barry Knight: I noticed in the ordinance under bed and breakfast inns, number three it addresses food and beverages may be served only if expressly permitted by a Conditional Use Permit in no event shall sitting capacity exceed 25 persons. That's the only place where I see a number mentioned in here. And, it kind of seems based on the numbers that I come up with that 25 persons maximum occupancy would certainly be a number that I could live w~th, just to throw that out. But we do have that number under the food service category Ronald Pdpley' Are there any other questions of Mr. Nelson? Thank you very much. Joseph Strange: Am I to assume that you never actually ran a bed and breakfast before? Gregory Nelson: No. I've not run abed and breakfast I've had restaurant experience but not bed and breakfast experience. Ronald Pupley: Thank you very much. Gregory Nelson: Thank you. Ronald Pdpley: Okay. Let's open this up to discussion amongst ourselves here. Does anybody want to lead off?. Kathy Katslas: Well, I think Mr. Nelson was very Arctlculate in describing in the beginning as to what his bed and breakfast would be like. Continuing on, it seems to me he is trying to squeeze in as many people as possible and not have the charm of strolling in the garden. And, just trying to get as many people in the rooms and I think 20 people and four people to a room would be very crowded. And, he's doubling the size of the structure that is currently there. So, I feel like, getting back to the ordinance it doesn't comply what original ordinance we just passed. So, I'm really struggling with approving this application. Ronald Pupley: So, the occupancy is an issue, sounds like to me to be a big concern. Jan, do you have a comment? Jamce Anderson: Yes. I like the application. I think a bed and breakfast down at that part of the resort strip where the residents already have residential housing would be some alternative to those who come w~th big hotels. That area it has a lot of rental if you look at the picture What he is proposing is a great ~mprovement I looked around that Item #19 Gregory Nelson Page 15 section and there are small older houses there and it is mostly residential. So, when you're adding something like this I think it is going to be an asset and not worldly work against him. If you got rental properties all around, you can rent next door to rowdy person and they're going to be there for a year, but if you got a rowdy tenant maybe they will be gone in a week So, I really wouldn't take that bad by having th~s that you're going to have a rowdy person next door So far as whether it complies with the ordinance we just passed, I think the ordinance says it should be a pnmary residential place and he is starting with a primary residential unit. I don't think any bed and breakfast really don't have any kind of improvement in trying to modify an old house to make a bed and breakfast. You're going to have to take some kind of improvement. The overall land coverage of the proposed building, he's actually going less than what ~s zoned under the A-12. So, he meets that requirement. He probably could have more units if he wanted to put condos or have multi family umts there. Actually, four months out of the t~me won't be used so you've got some low time there. If you're going to have a manager on duty 24 hours you're going to have that live in manager to control things if they get out of site. You have someone to call and strmghtened thangs out But, I think that as going to be the whole dafference. And, so far as the kind of chentele that it will bnng, I know the concern with the Oceanfront and the tourists, you'll get younger, I thank this is going to be an older crowd. I guess there are studies on who stays at bed and breakfast but I don't think it's gmng to be as crowded. The chentele that you're asking to come into the neighborhood is not going to be the young 18 year olds who pale eight into a room. I don't have any problem with that. Barry suggested limiting it to 25 percent maximum occupancy. But, I think it's a positive move, on that end I will support Ronald Rapley: Thank you very much. Barry, do you wish to make a comment? Barry Knight: We went by there and looked at the place the other day. It's a central scene that old house and as he expands some of these other rooms, I've been at some bed and breakfasts that are like that also, and I certainly thank and hope that he'll focus as his theme "the old structure" that's there in keeping with the general concept of our ordinance and general theme of a bed and breakfast down there. And, where I came up with the number is, and he says he going to rent nine rooms for compensation. That would g~ve him seven rooms w~th two folks in it, whach is 14, two rooms with four, which gives you 22 and he has this other room for his own personal manager or h~mself and his wife and kid whatever, which gives us a maximum of 25 and that would be consistent with the 25 maximum seating as far as eatang is concerned. And, I would support but I would like to see as a condition put in there of maximum occupancy rate and the number that I throw out right now would be 25 but I would be open on the number. Ronald Rlpley. Does anybody else have any comments? Will Din. William Din: I like the concept of the bed and breakfast. And, I think this application has a lot of merit to it. In looking at what he is trying to do here, I th~nk his intent ~s very good. He's got very nice elevations as we see here I am a little concern with the size of this thing on this piece of property, just as one of our speakers mentioned that its hard to Item # 19 Gregory Nelson Page 16 tell how much of the original house is being retmned here. And like Barry, I th~nk since it is and I've never stayed at a bed and breakfast but I would like to see this original house be the main focal point of how this design comes out. And, I can understand that you have to have some addition to it in order to accommodate the rooms that he is seeking to have in his bed and breakfast. I hke the concept. I know th~s is all new to everybody and not having experience a bed and breakfast myself I think it's a good startxng point for these things. And, I th~nk our ordinance will be refined as we go through this thing and I th~nk the apphcat~ons that we see w~ll probably be refined. I th~nk there is a lot of rental ~n this area. And, th~s sort of fits ~nto that to some degree but it will provide some addxtional adversity of the type of rental property that is available for a place you can stay at the beach. I think bed and breakfasts are needed here and I think I can support this issue. Ronald Pdpley: Thank you Wdl Gene, do you have a comment? Eugene Crabtree: Yes. I agree with what Will said and I agree w~th Barry in the fact that we need to put a limitation on the occupancy of this and it should be hmlted to and I don't know if four people in a bedroom because I agree with some of the comment that a family comes ~n with one child is one th~ng. I know some come in with two I don't know ~f we need more than 25. Since the ordinance says 25, I think 25 would be a feasible figure to say maximum occupancy of the building. And, I do agree that we do need bed and breakfasts ~n this area. Ronald Pupley: Okay. Coming up with the numbers is kind of difficult. I know particularly with bed and breakfasts Typically, I know my children are gone, and if I didn't have a place with a pool I would have been killed. When we showed up we would have to go some place else. So, typically in a bed and breakfast you don't have children or have a lot of children if you do. And, in this case you might have some because we market our city as a family oriented city so definitely will probably have some and that would make a difference. And, if we could go back to the site plan that shows the first floor, the site plan itself?. I found that when I look at it from Arctic, the scale and I think the way the addition ~s being added to the side, ~t doesn't over mass the s~te because the bulk of the improvements are occurnng towards the rear and of course its along the 25th Street s~de and that k~nd of step back to which I th~nk helps. When I look at this I th~nk well It'S not going to be that out of scale, and I believe the concern of the neighbor being next door, and I th~nk if we can address the landscaping ~n site plan rewew, I think that would be critical to having this fit ~n w~th the neighborhood better. I like the application also. I think It does make senses in our commumty, and it particularly makes sense from a Comprehensive Plan point of view, and I'm really afraid that to p~ck a number for this man's occupancy because ~t does dictate what he can and can't do as far as the economic wabihty ofh~s business plan, but on the other hand I think ~f you don't you probably will put too many people in there or you could potentially put to many people and then you've caused a problem w~th the neighbors. So, I think we probably do need to p~ck a number 25 or Charhe was at 20. Th~s is being arbitrary but I th~nk 25 makes sense also. Mr. Mdler* Item # 19 Gregory Nelson Page 17 Robert Miller: I'd like to make a motion. Ronald Pdpley. Go ahead. Robert Miller: That we approve the application and that we limit the occupancy to 25. Ronald Rapley' We got a motion by Mr. Miller. Charhe Salle': I'll second that but I think in Condition 2, we might have to clean up a little bit where it says, "one additional room may be provided to on site manager" I guess we can just take that out. That's required now I guess Robert Miller: We can change it to will be provided. Charhe Salle': It's either shall be can come out or the ordinance requires it. Robert Miller. I agree. Charhe Salle" With the understanding that the 25 occupants will include the manager. Ronald Rapley: Kay, you okay with that? Kay Wilson: So, there will be five conditions. Robert Miller: Five conditions Ronald Pdpley: Okay, we have a motion and a second with the additions that were said. Does anybody else have anything to add? Let's call for the question Ed Weeden: Ms. Anderson? Jamce Anderson: Yes. Ed Weeden: Mr. Crabtree? Eugene Crabtree: Yes. Ed Weeden: Mr. Din9 William Din: Yes. Ed Weeden: Ms. Katslas° Kathy Katslas. Yes. Ed Weeden: Mr. Kmght~ Item #19 Gregory Nelson Page 18 Barry Knight. Yes. Ed Weeden: Mr. Miller? Robert Miller: Yes. Ed Weeden Mr. Pdpley? Ronald Rapley Yes. Ed Weeden: Mr. Salle'? Charhe Salle" Yes. Ed Weeden: Mr. Strange? Joseph Strange. Yes. AYE 9 NAY 0 ABS 0 ABSENT 2 ANDERSON AYE CRABTREE AYE DIN AYE HORSLEY KATSIAS AYE KNIGHT AYE MILLER AYE RIPLEY AYE SALLE' AYE STRANGE AYE WOOD ABSENT ABSENT Ed Weeden: By a vote of 9-0, the motion passes with the five cond~tlons. Ronald Rtpley. Okay. I think that lS all that we have on our agenda today. Stephen, thank you all very much for an excellent agenda and excellent package. Stephen White. Thank you. Ronald Rapley. We're adjourned. STEPHEN WRAY O'NEAL August 26, 2003 General Information: REQUEST: ADDRESS' Change to a Non-Conforming Use The structure ~s a 1-1/2 story dwelling unit located on a parcel zoned B-2 Community Business D~stnct. A detached garage is proposed in the rear of the property. The structure ~s nonconforming because B-2 does not allow s~ngle-famdy dwellings on parcels w~th th~s district. 420 Davis Street Steven IVra~ O'Neal Non-conformtng Use GPIN' ELECTION DISTRICT: SITE SIZE: 14674960320000 2 -- KEMPSVILLE Approximately 3,300 square feet Change to a Non-Conforming Use STEPHEN WRAY O'NEAL Page I CITY OF VIRGINIA BEACH AGENDA ITEM ITEM: Stephen Wray O'Neal, Expansion of a Nonconforming Use- 420 Davis Street MEETING DATE: August 26, 2003 Background: An Ordinance upon Applicabon of Steven Wray O'Neal for the Expansion of a Nonconform~nq Use on property located at 420 Davis Street (GPIN 1467490320). DISTRICT 2 - KEMPSVILLE The structure ~s a 1-1/2 stow dwelling unit located on a parcel zoned B-2 Commumty Business D~stnct. A detached garage ~s proposed ~n the rear of the property. The structure ~s nonconforming because B-2 does not allow smgle- famdy dwellings on parcels with th~s d~stnct Considerations: The applicant is proposing to construct a 30-foot by 40-foot (1,200 square feet) detached garage to store a truck and a boat The submitted drawing depicts a vertical wnyl s~ded structure w~th an asphalt shingle roof. Both a vehicular and a pedestnan entrance ~nto the garage are proposed on the south s~de of the structure. Th~s site ~s currently zoned B-2 Community Bus~ness District and like the ~mmed~ately adjacent parcels, contains a s~ngle-famdy dwelling on it rather than a commercial use Whde from a land use perspecbve, the existence and conbnued existence of the residenbal use ~s acceptable over many of the by-right uses allowed under the B-2 D~stnct, any add~bon or expansion to th~s nonconforming use should at least reflect the regulabons prowded for ~n a Res~denbal zomng d~stnct. Under the Residential D~stnct regulabons, accessory structures such as that proposed are I~m~ted to 500 square feet or 20 percent of the I~v~ng area of the dwelling, which ever ~s greater The large 1,200 square foot proposed garage ~s commercial ~n scope and would be reasonable for commercial use; however, as the ex~sting pnnc~pal use of th~s property is res~denbal, the proposed garage should adhere to the regulabons for accessory structures ~n res~denbal areas If the apphcant w~shes to conbnue to exist as a nonconforming use ~n a res~denbal setting, then any expansions or modifications must be residenbal in character As such, it ~s recommended that the proposed garage be downs~zed s~gn~flcantly to reflect the residenbal nature of th~s part of Daws Street. In addition, there ~s an ex~sbng detached shed/garage behind the ex~sbng dwelling The applicant has ~ndmated that th~s structure will Stephen Wray ONeal Page 2 of 2 be "remodeled" and reduced in size from 680 square feet to 340 square feet. However, ~f the regulations applicable to Residential zoning districts are apphed, the square footage of this structure would also count towards the overall allowed square footage (500 square feet or 20 percent of the I~ving area, whichever ~s greater) It is, therefore, recommended that th~s structure be removed entirely and that it be replaced w~th a reduced version of the proposed garage. Recommendations: Pursuant to Section 105(e) of the City Zoning Ordinance, a nonconforming use may be enlarged only ,f the City Council finds that the proposal, as enlarged, will be "equally appropnate or more appropriate to the d~stnct than is the ex~sting nonconformity." Staff concludes that the proposed enlargement ~s not reasonable, because ~t w~ll have a detrimental impact on the surrounding area, and will not be as appropriate to the d~stnct as the ex~sbng non-conforming use. Approval of the request would create more of non-conformity than currently exists on the s~te Den~al of the request is recommended. If, however, C~ty Council decides to approve th~s request, the following conditions are recommended: 1. The proposed garage shall be limited to a one (1)-stow structure at a height not to exceed the ex~sbng dwelhng on the property. 2. The proposed garage shall be I~m~ted ~n s~ze to 500 square feet or 20 percent of the I~v~ng area of the dwelling unit, whichever ~s greater. . The ex~st~ng accessory structure, consisting of a carport and a one (1) stow frame structure, both depicted on the submitted plan, shall be removed prior to the ~ssuance of a final Occupancy Permit for the new garage 4. The proposed garage shall be no closer than 10 feet from any side property I~ne. Attachments: Staff Rewew D~sclosure Statement Locabon Map Recommended Action: Staff recommends den~al Submitting Department/Agency: Planning Department~4 'L,.~:r~ City Manager~~'~~ l/~.~ ~ ~ 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 A RESOLUTION AUTHORIZING THE EXPANSION OF A NONCONFORMING USE FOR THE ADDITION OF A DETACHED GARAGE ON PROPERTY LOCATED AT 420 DAVIS STREET, IN THE KEMPSVILLE DISTRICT WHEREAS, Steven Wray O'Neal, (hereinafter the "Applicant") has made application to the City Council for authorization to expand a nonconforming use in the addition of a detached garage to a certain lot or parcel of land havmng the address of 420 Davms Street, in the B-2 Community Business District; and WHEREAS, the said use is nonconformmng because there is a residential single-family dwelling in the B-2 Zoning District. The B-2 Zoning District does not allow single-family dwellings. The expansion of thzs use is through the addition of a detached garage for the residential use; and WHEREAS, pursuant to Section 105 of the Czty Zoning Ordinance, the enlargement of a nonconforming use is unlawful in the absence of a resolution of the City Council authorizing such action upon a finding that the proposed use, as expanded, will be equally appropriate or more appropriate to the zoning district than is the existmng use; NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF VIRGINIA BEACH, VIRGINIA: That the City Council hereby finds that the proposed use, as expanded, will be equally appropriate to the district as is the exzsting use. 27 28 29 3O 31 32 33 34 35 36 37 38 39 4O 41 42 43 44 45 the BE IT FURTHER RESOLVED BY THE COUNCIL OF THE CITY OF VIRGINIA BEACH, VIRGINIA: That the proposed addition of the Applicant's detached garage is hereby authorized, upon the following conditions: 1. The proposed garage shall be lzmited to a one (1) story structure at a height not to exceed the existing dwelling on the property. 2. The proposed garage shall be limited in size to 500 square feet or 20 percent of the living area of the dwelling unit, whichever is greater. 3. The existing accessory structure, consisting of a carport and a one (1) story frame structure, both depicted on the submitted plan, shall be removed prior to the issuance of a final Occupancy Permit for the new garage. 4. The proposed garage shall be no closer than 10 feet from any side property line. Adopted by the Council of the City of Virginia Beach on day of , 2003. CA-8985 bkw/work/noncononeal.wpd R-1 - August 14, 2003 APPROVED AS TO CONTENT- P 1 a~hn5 ~g~/~ A P~~Z O~i~~,~ CY' Ci~'y Attorney"s Office STAFF PLANNER: Carolyn A.K. Smith Major Issues: Ensunng that the proposed addition and alteration to the nonconforming structure is no more detnmental to the surrounding neighborhood and ~s as appropriate to the d~stnct as the ex~st~ng structure. Land Use, Zoning, and Site Characteristics: Existing Land Use and Zoning The property has an existing one-and-one-half (1-1/2) story single-famdy dwelling on ~t and a one (1) story detached garage and carport. The applicant ~ndicated that the ex~st~ng detached shed/garag~ wdl be reduced in s~ze from 680 square feet to approximately 340 square feet. In add~bon, the ex~sting carport is also proposed for removal The dwelling unit was budt ~n 1940 An adjacent home to the south, built in 1948, encroaches onto the property There ~s a 1 ½ story frame house on th~s parcel Th~s property ,s also currently zoned B-2 Community Business District Surrounding Land Use and Zoning North: · S~ngle-family dwelling / B-2 Community Bus~ness D~strict Change to a Non-Conforming Use STEPHEN WRAY O'NEAL Page 2 South: East: West: · S~ngle-famdy dwelling / B-2 Community Business D~strict · Davis Street · S~ngle-fam~ly dwelling / B-2 Community Business D,stnct · Apartments ! A-18 Apartment District Zoning and Land Use Statistics Under B-2 Community Bus~ness regulations, th~s property could be developed by right w~th permitted uses ~dent~fled ~n the C~ty Zoning Ordinance for commercial properties such as bakeries, restaurants, household appliance repairs, boat sales, business and vocational schools, offices, child care facilities, dry cleaning agencies, etc. Other uses along th~s street include bulk storage, cleaning serwces, office-warehouse, and auto repair. Zoning History In the shopping center at the corner of Daws Street and V~rginia Beach Boulevard, C~ty Council approved a Conditional Use Permit for a church in 2001. Earlier that year, a bulk storage yard was approved on a parcel just to the south on Daws Street. Other Conditional Use Permits granted along Davis Street ~nclude Auto Sales and Storage, Motor Vehicle Sales, and a Rehabilitabon Center. Air Installation Compatible Use Zone (AICUZ) The s~te ~s ~n an AICUZ area of less than 65dB Ldn surrounding NAS Oceana Natural Resource and Physical Characteristics The s~te is located w~th~n the Chesapeake Bay watershed natural resources on th~s site There are no s~gniflcant Public Facilities and Services Water and Sewer C~ty water and sewer currently serve th~s property Public Safety Police: Adequate - no additional comments Change to a Non-Conforming Use ~[°~~"~ STEPHEN WRAY O'NEAL~-~:~.~~..~-~27'~ :* Page 3 '~ Fire and Rescue: Adequate - no addibonal comments. Comprehensive Plan The Comprehenswe Plan Map designates this area, consistent w~th the ex~sting zoning, as supportive of retail, service, office and other uses compatible w~th~n commercial centers serving surrounding neighborhoods and commun~bes. Ideally, parcels along Davis Street would develop more ~nl~ne w~th office uses rather than some of the more "heavy" uses permitted by nght under B-2 zoning Summary of Proposal · The applicant ~s proposing to construct a 30-foot by 40-foot (1,200 square feet) detached garage to store a truck and a boat. The submitted drawing depicts a vertical v~nyl s~ded structure w~th an asphalt shingle roof. Both a vehicular and a pedestnan entrance into the garage are proposed on the south s~de of the structure. Th~s site is currently zoned B-2 Community Bus~ness District and I~ke the ~mmed~ately adjacent parcels, contains a s~ngle-family dwelling on it rather than a commercial use Wh~le from a land use perspective, the existence and continued existence of the residential use ~s acceptable over many of the by-right uses allowed under the B-2 D~strict, any addition or expansion to th~s nonconforming use should at least reflect the regulabons provided for ~n a Res~denbal zoning d~stnct Under the Residential D~stnct regulabons, accessory structures such as that proposed are hm~ted to 500 square feet or 20 percent of the I~ving area of the dwelhng, which ever ~s greater. The applicant ~s proposing to remove a port~on of an ex~sting detached garage/shed (reducing the s~ze to 340 square feet) and to remove an exisbng carport (approximately 262 square feet) that ~s located d~rectly on the southern property I~ne. No encroachments ~nto setbacks are being requested nor are they needed w~th this proposal. The proposed garage ~s depicted at 10 feet from the northern property hne. The setbacks ~n the B-2 d~stnct are more "generous" than ~n the residenbal and apartment d~stncts The side yard setback ~n the B-2 District ~s zero feet Side yard setbacks for accessory structures over 150 square feet ~n s~ze ~n Residential districts vary ~n distance from 10 to 20 feet. Change to a Non-Conforming Use ~'~,, ~.- ~'~; STEPHEN WRAY O'NEAL ~.~~I.~ Page 4 '~~ Evaluation of Request Staff concludes that the garage as proposed ~s not reasonable and staff cannot support th~s add~bon to a nonconforming use The large 1,200 square foot proposed garage ~s commercial ~n scope and would be reasonable for commercial use; however, as the ex~stmg pnnc~pal use of this property ~s residenbal, the proposed garage should adhere to the regulations for accessory structures in residential areas. If the applicant wishes to conbnue to ex~st as a nonconforming use ~n a res~denbal setting, then any expansions or mod~flcabons must be residenbal in character. As such, it ~s recommended that the proposed garage be downsized significantly to reflect the residential nature of this part of Daws Street. In addition, there ~s an ex~st~ng detached shed/garage behind the ex~sbng dwelhng. The applicant has ~nd~cated that this structure w~ll be "remodeled" and reduced ~n size from 680 square feet to 340 square feet However, if the regulat,ons applicable to Residential zoning districts are applied, the square footage of this structure would also count towards the overall allowed square footage (500 square feet or 20 percent of the liwng area, whichever ~s greater). It ~s, therefore, recommended that this structure be removed entirely and that ~t be replaced with a reduced version of the proposed garage. The request for expansion of a nonconforming use, therefore, is not acceptable as submitted. CONDITIONS If approved, the following cond~bons are recommended. 1. The proposed garage shall be I~m~ted to a one (1)-stow structure at a height not to exceed the exisbng dwelling on the property. 2. The proposed garage shall be limited in s~ze to 500 square feet or 20 percent of the Iwing area of the dwelling un~t, whichever is greater 3. The ex~sbng accessory structure, consisting of a carport and a one (1) stow frame structure, both depicted on the submitted plan, shall be removed prior to the ~ssuance of a final Occupancy Permit for the new garage. 4. The proposed garage shall be no closer than 10 feet from any side property I~ne. Change to a Non-Conforming Use STEPHEN WRAY O'NEAL Page 5 '""'"~ ON LINE Z 79' PiN (F) N/F 195 ASSOCIATES PiN (F) S 29'20'00' W 80 16' '~00 2!1____.__~ ~. SHED ',,-J' I ss ~ STORY l FRAME HOUSE ~ / 33'02'00' [ 100.00' LOT PiN (F) LOT Y CAR PORT LIGHT POLE N 33'02'00' E 80 00' DAVIS STREET 50" PIN (F) 1500 LOT i PIN (F) 935.60' TO VA. BEACH BLVD, Change to a Non-Conforming Use STEPHEN WRAY O'NEAL Page 6 -. t Change to a Non-Conforming Use STEPHEN WRAY O'NEAL Page L~st Ail Current Property Ownersx ~,~,~,~ APPLICANT DISCLOSURE If the applicant ~s a CORPORATION, I~st all officers of the Corporation below (Attach I~st ff necessary) If the applicant ~s a PARTNERSHIP, FIRM, or other UNINCORPORATED ORGANIZATION, list all members or partners m the orgamzat~on below (Attach//st /f necessary) [] Check here ~f the apphcant ~s NOT a corporation, partnership, firm, or other unincorporated organization If the apphcant Js not the current owner of the property, complete the Property Owner Disclosure secbon below' PROPERTY OWNER DISCLOSURE If the property owner ~s a CORPORATION hst all officers of the Corporabon below (Attach//st/f necessary) If the property owner ~s a PARTNERSHIP, FIRM. or other UNINCORPORATED ORGANIZATION, hst all members or partners in the organ~zahon below (Attach fist /f necessary) i-I Check here ~f the property owner ~s NOT a corporation, partnership, firm, or other unincorporated organization CERTIFICATION i certify that the information contained herein is true and accurate. [ S~natu~e Print N~me Z Non-Conforming Use Apphcat~on Page 8 of 10 L, iod~hea ~0 16 20C2 Change to a Non-Conforming Use STEPHEN WRAY O'NEAL Page 8 PATIO ENCLOSURES, INC. August 26, 2003 General Information: REQUEST' ADDRESS: Addibon to a Non-Conforming Use There are two single-family dwellings on this single parcel. The R-5R Distnct permits only one dwelling on each lot. Thus, each of the dwellings on th~s lot ~s nonconforming. An addibon to e~ther dwelling requires the approval of the City Council. 204 B 75th Street ~ ~ Patio Enc, Inc. ~op No~ %0 coca!c Sta~ P-I Non-Conforming Use GPIN' ELECTION DISTRICT' 24270665340000 5 - LYNNHAVEN Change to a Non-Conforming Use PATIO ENCLOSURES, INC. Page I CITY OF VIRGINIA BEACH AGENDA ITEM ITEM: Patio Enclosures, Expansion of a Nonconforming Use - 204 B 75th Street MEETING DATE: August 26, 2003 Background: An Ordinance upon Application of Patio Enclosures, Inc for the Expansion of a Nonconforming Use on property located at 204 B 75th Street (GPIN 24196628250002). DISTRICT 5- LYNNHAVEN There are two single-family dwellings on th~s s~ngle parcel. The R-5R D~stnct permits only one dwelhng on each lot Thus, each of the dwellings on th~s lot is nonconforming The proposed addition of a sunroom to one of the dwellings requires the approval of the C~ty Council Considerations: The applicant proposes a sunroom addition of 10 feet by 21 feet-8 ~nches (10'x21'-8") on the front of the dwelling that ~s located to the rear of the lot (UNIT B). The existing dwelling is nonconforming, constructed in 1945, and was remodeled ~n 2001. The dwelling contains 676 square feet of I~ving area. The dwelhng ~s located six feet from the 15-foot lane to the east, and encroaches one tenth of a foot over the rear property I~ne. The required setbacks for s~ngle-family dwellings in the R-5R Resort Residenbal D~stnct are e~ght foot for the side and 20 feet for the rear yard. Another s~ngle-family dwelling (UNIT A) exists on the front western portion of the s~te The current lot coverage for both structures is 40 percent; w~th the addmon of the sunroom the lot coverage will ~ncrease to 44 percent. The permitted lot coverage in the R-5R Resort Res~denbal D~stnct is 35 percent Recommendations: Pursuant to Secbon 105(e) of the C~ty Zoning Ordinance, a nonconforming structure may be enlarged only if the C~ty Councd finds that the proposed structure, as enlarged, w~ll be "equally appropnate or more appropnate to the distnct than is the emsting nonconformity." Staff concludes that the proposed enlargement ~s not reasonable, because ~t will have a detrimental ~mpact on the surrounding area, and will not be as appropriate to the d~stnct as the emst~ng non-conforming use Approval of the request would create more of non- conformity than currently emsts on the site. Denial of the request ~s recommended If, however, C~ty Council dec~des to approve th~s request, the following condition is recommended: Patio Enclosures Page 2 of 2 The enlargement of Unit B shall be only for a sunroom add~bon of 10 feet by 21 feet-8 inches (10'x21'-8"). No further additions or mod~ficabons shall be made Attachments: Staff Rewew D~sclosure Statement Location Map Recommended Action: Staff recommends den~al. Submitting Department/Agency:Planning Department ,~~ ~,~'X~ City Manager:~ [/-,~7 ~d~t. A RESOLUTION AUTHORIZING THE ENLARGEMENT OF A NONCONFORMING SINGLE-FAMILY DWELLING ON PROPERTY LOCATED AT 204 B 75TM STREET, IN THE LYNNHAVEN DISTRICT 10 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 WHEREAS, Patio Enclosures, Inc. for Phillip M. Decker, (hereinafter the "Applicant") has made application to the City Council for authorization to expand a nonconforming single-family dwelling situated on a certain lot or parcel of land having the address of 204 B 75th Street, in the R-5R Residential District; and WHEREAS, the said szngle-family dwelling is a nonconforming use, in that the dwellzng unit is one of two dwelling units on a single parcel in the R-5R Residential District. Two dwelling units are not allowed on one parcel in the R-5R Zoning Dmstrict; and WHEREAS, pursuant to Sectzon 105 of the City Zoning Ordinance, the enlargement of a nonconforming structure is unlawful in the absence of a resolution of the Cmty Counczl authorzzing such action upon a finding that the proposed structure, as expanded, will be equally appropriate or more appropriate to the zoning district than is the existing structure; NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF VIRGINIA BEACH, VIRGINIA: That the City Council hereby finds that the proposed structure, as expanded, wzll be equally appropriate to the district as is the existing structure. 26 27 28 29 3O 31 32 33 BE IT FURTHER RESOLVED BY THE COUNCIL OF THE CITY OF VIRGINIA BEACH, VIRGINIA: That the proposed enlargement of the Applicant's single- family dwelling is hereby authorized, upon the following condition: 1. The enlargement of Unit B shall only be only for a sunroom addition of 10 feet by 21 feet-8 inches (10'x21'8"). No further additions or modifications shall be made. 34 35 36 the Adopted by the Council of the City of Virginia Beach on day of , 2003. CA-8986 bkw/work/noncondecker.wpd R-1 August 14, 2003 APPROVED AS TO CONTENT' APPROVED AS TO LEGAL SUFFICIENCY'~/~i ~~'~. ~~ City Attorney's Office SITE SIZE: STAFF PLANNER: 2,582 square feet for Unit B (Total lot area ~s 6,375 square feet) Fa,th Chnsbe Major Issues: Insuring that the proposed addibon to the nonconform,ng s~ngle-family dwelling ~s no more detrimental to the surrounding neighborhood, and ~s as appropriate to the d~stnct, as the exisbng structure It is the intent of the C~ty Zoning Ordinance to allow nonconformibes to continue unbl they are removed; however, it ~s not the ~ntent of the ordinance to allow ~ nonconform~bes to be increased ~_ ~n magnitude by enlargement or ~.(F) expansion except by resolubon of the C~ty Councd Land Use, Zoning, and Site C haracte ristics: Existing Land Use and Zoninq Two single-family dwellings occupy the property under a condominium form of ownersh,p The site ~s zoned R-5R Resort Residential. I 10' LANE ~AR*~NT 159 CO,~C PAD 3~2 3,4, FENICE AVE. 75 00 -- 75TH STREET (4-O'R/W) Change to a Non-Conforming Use PATIO ENCLOSURES, INC. Page 2 Surroundinq Land Use and Zoning North: South: East: West: · 75th Street · Across 75th Street are single-family and duplex dwellings / R-5R Resort Residential · S~ngle-family and duplex dwellings / R-5R Resort Residential · S~ngle-fam~ly dwellings / R-5R Resort Residential · S~ngle-fam~ly and duplex dwellings / R-5R Resort Residential Zoning History There is I~ttle zoning act~wty to report w~th~n the immediate area. According to the Real Estate Assessor's office the two dwellings were budt m 1945. · The site was zoned R-D 2 Residence Duplex District until 1973. · From 1973 to 1988, the s~te was zoned R-8 Residential D~strict. · The site has been zoned R5-R Resort Residential s,nce 1988. · Unit A - Variance to the front yard and s~de yard (west s~de) setbacks for a rooftop deck was approved 1-6-98 · Unit A - Variance to the front yard setback for a porch, stoop and steps was approved 4-17-99 · Unit B - Building permit issued 1-11-01 to replace the fiat roof, replace the exterior s~dmg, remove ~ntenor wall fln~shes to upgrade w~nng and replace interior wall finishes w~th sheetrock. Air Installation Compatible Use Zone (AICUZ) The s~te is in an AICUZ area of less than 65dB Ldn surrounding NAS Oceana. Natural Resource and Physical Characteristics The s~te is wooded and heavily landscaped w~th mature shrubs and other vegetation. Public Facilities and Services Water and Sewer City water and c~ty sewer are ava,lable to the s~te. Change to a Non-Conforming Use PATIO ENCLOSURES, INC. Page 3 Transportation 75th Street ~s a local street. Th~s ~s an old established neighborhood w~th no through traffic. Public Safety Police: Fire and Rescue: No comments at this time. No comments at th~s time. Comprehensive Plan The Comprehensive Plan Map designates th~s area as Suburban Residential/Medium and High Density planned for residential uses at or above 3.5 dwelling units per acre Summary of Proposal The applicant proposes a sunroom add~bon of 10 feet by 21 feet-8 ~nches (10'x21 '-8") on the front of the dwelling that ~s located to the rear of the lot (UNIT B). The ex~sting dwelling ~s nonconforming, constructed ~n 1945, and was remodeled ~n 2001. The dwelling contains 676 square feet of living area. The dwelling ~s located s~x feet from the 15-foot lane to the east, and encroaches one tenth of a foot over the rear property line. The required setbacks for single-famdy dwellings in the R-5R Resort Residential Distnct are e~ght foot for the side and 20 feet for the rear yard. Another single-family dwelling (UNIT A) exists on the front western port~on of the site. As noted ~n the Zoning History section of th~s report that dwelling received several variances for additions. The current lot coverage for both structures ~s 40 percent; w~th the addition of the sunroom the lot coverage will ~ncrease to 44 percent The permitted lot coverage ~n the R-5R Resort Residential D~stnct ~s 35 percent. Evaluation of Request The proposed addition of a sunroom is not acceptable. First, the site ~s nonconforming because two s~ngle-family dwellings ex~st on a single lot The R-5R Resort Residential D~strict permits a s~ngle-family or a duplex dwelling on a single lot. Second, the lot does not meet the minimum requirement of 10,000 square feet for two dwelhng units (duplex) on a s~ngle lot. Third, the ex~sting structure does not meet the m~n~mum setbacks for s~ngle-family dwellings in the R-5R Resort Residential D~strict, and ~s encroaching over Change to a Non-Conforming Use PATIO ENCLOSURES, INC. Page the rear property line. Fourth, the ex~stmg structures exceed the permitted lot coverage of 35 percent. It ~s the ~ntent of the C~ty Zoning Ordinance to allow nonconformities to continue untIl they are removed; however, it ~s not the intent of the ordinance to allow nonconform~bes to be increased ~n magnitude by enlargement or expansion except by resolution of the City Councd. The proposed enlargement ~s not equally appropriate or more appropriate to the district than ~s the exisbng nonconformity. Staff does not recommend approval of the request for an addibon to a nonconforming use. NOTE: Further conditions may be required during the administration of applicable City Ordinances. Plans submitted with this application may require revision during detailed site plan review to meet all applicable Cit~ Codes. i Change to a Non-Conforming Use PATIO ENCLOSURES, INC. Page 5 I I '" 10' ALLEY 1 7~ 75,00' IT A R£$tD£NC~ 7~00' ! 75 OB ~95 P 1,007(PLA Change to a Non-Conforming Use :';~,~a..~ ~'~z PATIO ENCLOSURES, INC. ~:~ Page 6 ~~ 4 100' TO ATLANTIC AV-~- PP TYP 78 10' LANE 1STY FR 159' L 15 72' 75 00' Condo Plan showing Ipcation of I I~r. opos~l addilJon 75 o 75 00' I PIN(F) WOOD FENCE 10' BRICK STOOP FENCE --~ES rO O~HEqS 2S17 FR R[SIDENC£ i co. c 36 2' ,34 FENCE 0 PIN(F) 75TH SmElT (40'R/W) (112 1/2 STREET-PLAT) GI~PH[C SCALE ( m ~'~ ) Change to a Non-Conforming Use PATIO ENCLOSURES, INC. Page 7 TH,S 'S TO CERTIFY THAT I ON JULY 26 ., 2001 SURVEYED THE °ROPERTY S~,OW, ON TH:S PLAT THE BUILDINGS STAND STRICTLY WITHIN THE TITLE LINES AND THERE ARE NO ENCROACHMENTS OF OTHER Bu~OWN / 75TH ST 40' $ 77'18'29' W · ~100' TO 15 72 F'"' ATLAN~C AVE GRAVEL - / ~ IPOWER UNIT A =/ ~' N ~7'~ I~, I.,J ALL FENCES · 14 72 I ~ Z .~oH UNIT B Proposed Addition = ,, . . 20 55 · :. . 1 STORY -- J ~ g FR~E -- ~-- I~ 204 8 ~ ~ z ,075' S 7~8'29' w 50 83' ~3 3' 10' LANE Site Plan showing proposed addition NOT=S C~U ND ~'5931 0016 O*~D 12/05/96 9A~ ~L~O [L[V 9 0 PHYSICAL SURLY OF UNIT B, CONDOMINIUM PLAT 204--75TH STREET LOTS 47. 48 & 49, SHORE REALTY VIRGINIA BEACH VlRGINIA la B 258 P 30 PHIUP Id. DECKER DATE [ SCALE I DRA,WN BY I FIELD B00K ...JULY 26, 2001 1' = 20' D G 217 DENNIS J GERWlTZ P C 500 CENTRAL DRIVE, SUITE 11,3 '~R~INIA BEACH VIRGINIA 4c~[ Change to a Non-Conforming Use PATIO ENCLOSURES, INC. Page 8 Change to a Non-Conforming Use PATIO ENCLOSURES, INC. Page 9 DISCLOSURE STATEMEN'i Applicant's Name ~, List All Current Property Owners ! ~... ! APPLICANT DISCLOSURE If the apphcant ~s a CORPORATION. I~st all officers of the Corporabon below {Attach I~st ~f necessary) If the apphcant ~s a PARTNERSHIP, FIRM, or other UNINCORPORATED ORGANIZATION hst all members or partners ~n the organization below (Attach I/st ~f necessary) [~,/Check here ~f the apphcant ~s NOT a corporation, partnership, firm, or other unincorporated organizatIon If the apphcant ls not the current owner of the property, complete the Property Owner D~sclosure section below' PROPERTY OWNER DISCLOSURE If the property owner ~s a CORPORATION, hst all officers of the Corporahon below (Attach hst /f necessary) If the property owner ~s a PARTNERSHIP, FIRM, or other UNINCORPORATED ORGANIZATION hst all members or partners m the organ~zabon below (Attach I/st /f necessary) I~Check here ~f the property owner ~s NOT a corporation, partnership, firm, or other umncorporated orgamzat~on CERTIFICATION i certify that the information contained herein is true and accurate. Signature Print Name Non-Conforming Use Apphcabon Page 8 of 10 ',Icdlhed ~ 0 16 2002 Change to a Non-Conforming Use PATIO ENCLOSURES, INC. Page 10 NORTH VIRGINIA BEACH CIVIC LEAGUE ZONING REVIEW COMMITTEE MEMO Members of City Council Planmng Comnnss~on Planmng Staff C~ty of V~rg~ma Beach Friday, August 08, 2003 Re' Application by Patio Enclosures, Inc. (Philip M. Decker) for an Enlargement of a Non- Conforming structure; proposed addition to attached existing single family dwelling on a condominium lot located at 204 - 75th Street, Beach District, Virginia Beach, Virginia 23451 The North V~rginia Beach C~v~c League's (NVBCL) Zomng Review Committee has met and reviewed the s~te surveys, s~te plans and merits of the referenced case. We as a c~v~c league "Oppose" this request. The NVBCL Zoning Review Committee reviwed the surveys and preliminary plans for this project and have made offer the following comments. o o . o . The NVBCL finds that there ~s no demonstrated hardship w~th this request. The survey provided for Umt B ~s over two years old and should not be accepted as the accurate portrayal of the ex~sting condmons of a s~te ~n August of 2003. The survey provided for the entire sxte comprising Units A & B is even older and should not be accepted as the accurate portrayal of the ex~sting conditions of a s~te in August of 2003. The dimensions for Umt B on the overall survey conflict with the dimensions for Umt B on the July 26, 2001 survey. In April 1999, the BZA granted a variance for Umt A for a porch encroachment on the north (75th street) s~de that is not shown on the survey provided. The lot s~ze for th~s condom~mum of two umts is 6,375 sf barely over the m~nimum reqmmment for a s~ngle-famfly lot ~n R5R zoning. The plan~aed expansion further expands a dwelling on a lot where the aggregate of the dwelhngs exceeds the 35% lot coverage, which ~s a code reqmrement for R5R zomng The planned expansion further expands a dwelhng on a lot where the aggregate of the dwelhngs and their supporting driveways, parking areas, decks etc. exceeds the 60% ~mperv~ous coverage which ~s a code requirement for R5R zoning The NVBCL wants to be clear ~n ~ts decision on th~s particular case as them ~s no clear minimum demonstrated hardship for a request for rehef from the code We are very concerned and are adamantly agmnst addmonal lot coverage and ~mpervmus cover by new construction of any accessory structure, detached or attached, or expansions non - conforming structure in R5R zomng ~n our neighborhood that are not a hardship. Should there be any quesnons please contact me at 431- 1041 Sincerely, W~lliam D. Almond, ASLA Chmr, NVBCL Zomng Review Committee .Map G-6 St. Nicholas Catholic Church I0 ,~ Gpm 1488-80--5079 ZONING HISTORY 4-8-03 --Conditional Use Permit (columbar~um)- Granted 11-28-95 -- Conditional Use Permit (day care for the elderly) - Granted 7-13-87 -- Conditional Use Permit (addibon)- Granted 2-6-84 -- Conditional Use Permit (group home for children) - Granted 6-12-61 -- Conditional Use Permit (church & school) - Granted CITY OF VIRGINIA BEACH AGENDA ITEM III ITEM: St. Nicholas Catholic Church - Modification of Conditional Use Permit MEETING DATE: August 26, 2003 · Background: An Ordinance upon Appl~cabon of St. N~cholas Catholic Church for a Modiflcabon of Cond~bons to a Condibonal Use Permit for a columbarium approved by City Council on April 8, 2003. Property ~s located at 712 L~ttle Neck Road (GPIN 1488805079). DISTRICT 5- LYNNHAVEN The purpose of th~s request ~s to add add~bonal length to a wall mounted columbar~um, ~n~bally approved by C~ty Council on April 8, 2003, for the internment of human crema~ns. Considerations: The original Cond~bonal Use Permit for the columbanum was approved on April 8, 2003. Upon approval of that Use Permit, the applicant sohc~ted the church members regarding the availability of the niches and found that the demand exceeded the available number of n~ches. The applicant, therefore, des,res to add approximately 50 feet of length to the wall-mounted columbanum. The proposed columbanum ~s shown on the northwest corner of the ex~st,ng church budding. The exterior curved wall, the wall facing the parking lot, will be constructed of brick to match that of the existing church. The wall approved by City Council ~n April ~s proposed at s,x (6) feet n~ne (9)~nches high w~th a length of 17 feet. The proposed add~bon w~ll increase the length to approximately 50 feet. The elevabon depicts a white brick or dryv~t cap at the top of the wall The fa(;ade facing the church will have granite face n~ches w~th brick columns spaced ~nterm~ttently. A brick foundabon ~s planned to the water table level. Brick pavers are proposed ~n the small courtyard adjacent to the columbarium. The area proposed for the columbanum ~s currently landscaped, thereby prowd~ng an attractive area for v~s~tors. The Planning Comm~ss,on placed th~s ~tem on the consent agenda because the use ~s not h~ghly visible from the street, staff recommended approval, and there was no oppos~bon to the request. St. N~cholas Catholic Church Page 2 of 2 · Recommendations: The Planning Commission passed a mobon by a recorded vote of 10-0 to approve th~s request w~th the following conditions: The conditions attached to the ong,nal Cond~bonal Use Permit and the four (4) subsequent permits granted by C~ty Council shall remain ~n effect w~th the add~bon of the columbanum to the s~te, excepbng that the length of the wall shall be modified not to exceed 60 feet in length. The columbanum shall be located in the area shown on the submitted s~te plan enbtled "Saint N~cholas Catholic Church Columbarium," prepared by COMPO Construcbon Company, dated January 13,2003. The wall shall be constructed of brick and mortar w~th all n~ches facing the church budding as depicted on the submitted elevation enbtled, "Columbarium for St. N~cholas Catholic Church, V~rginia Beach, V~rgin~a," prepared by Barnes Design Group. Attachments: Staff Review D~sclosure Statement Planning Commission Minutes Locahon Map Recommended Action: Staff recommends approval. Planning Commission recommends approval Submitting Department/Agency: Planmng Department City Manager: ~~ I~- ,~ bY~ ST. NICHOLAS CATHOLIC CHURCH / # 13 July 9, 2003 General Information: APPLICATION NUMBER: G06-210-CU P-2003 REQUEST: Modiflcabon of Condibons to a Condibonal Use Permit for a columbanum approved April 8, 2003 ADDRESS- 712 Little Neck Road 5'Ja~ Map Not to Sc~ c St. Nicholas Catholic Church Crp~n 1488-80-5079 GPIN' 14888050790000 Planning Commission Agenda July 9, 2003 ST. NICHOLAS CATHOLIC CHURCH / # 13 Page 1 ELECTION DISTRICT: SITE SIZE. STAFF PLANNER: PURPOSE: 5 - LYNNHAVEN 11.96 acres Carolyn A.K. Smith To add additional length to a wall mounted columbarium, in,bally approved by C~ty Council on April 8, 2003, for the internment of human crema~ns, associated w~th the ex~sbng church on the property Major Issues: Degree to which the proposal is complementary to the ex~sbng church uses and compatible w~th the surrounding uses Vis~bihty of structure to neighboring properties and from the pubhc street Land Use, Zoning, and Site Characteristics: Existing Land Use and Zoning The almost 12 acre site ~s currently zoned R-10 Res~denbal D~stnct. There ~s an ex~sbng church, asphalt parking lot, and a home for boys. Surroundinq Land Use and Zoning North: South: East: · S~ngle-family dwelhngs / R-10 Residential D~stnct · North Lynnhaven Road, s~ngle-fam~ly dwelhngs / R-10 Residential D~stnct · K~ngs Grant Elementary School and single-famdy dwelhngs / R-10 Res~denbal D~stnct Planning Commission Agenda July 9, 2003 ST. NICHOLAS CATHOLIC CHURCH / # 13 Page 2 West: · L~ttle Neck Road · Duplex residential units / R-5D Resldenbal D~strict Zoning History The original Condibonal Use Permit for the ex~sting church (and also a school) was granted by C~ty Councd on June 12, 1961 Only one condition was attached that required at least one parking space for each four (4) seats ~n the sanctuary. Since that bme, three (3) other Conditional Use Permits were granted on th~s property, a day care for the elderly ~n 1995, an addition to the church in 1987, and a group home for children in 1984. The original Use Permit for the columbanum was recently approved on Apnl 8, 2002 Air Installation Compatible Use Zone (AICUZ) The s~te ~s ~n an AICUZ of less than 65dB Ldn surrounding NAS Oceana Public Facilities and Services Water and Sewer This s~te ~s already connected to City water and sewer Transportation Traffic Calculations: Street Name Present Present Generated Traffic Volume Capacity Ex~stmg Land Use z_ 330 ADT L~ttle Neck Road 16,775 ADT 1 28,200 ADT ~ weekday 1,327 ADT Sunday North Lynnhaven Road 4,350 ADT ~ 6,200 ADT ~ Proposed Land Use 3_ No traffic data exists for columbanum use Average Dady Trips 2 as defined by ex~stmg church 3 The add~bonal traffic ~s not anbc~pated to s~gn~flcantly ~mpact the ex~stmg roadway Public Safety Police: The applicant is encouraged to contact and work with the Planning Commission Agenda July 9, 2003 ST. NICHOLAS CATHOLIC CHURCH / # 13 Page 3 Fire and Rescue: Crime Prevention Office within the Police Department for crime prevenbon techniques and Crime Prevenbon Through Environmental Design (CPTED) concepts and strategies as they pertain to th~s s~te Adequate - no further comments. Comprehensive Plan The Comprehensive Plan Map recommends medium density suburban residential development for th~s s~te Summary of Proposal Proposal · To add length of approximately 50 feet to construct a wall mounted columbanum that w~ll contain n~ches for the internment of human cremains. Site Desiqn The s~te plan depicts the ex~sting church and asphalt parking lot and the home for boys. The proposed columbanum is shown on the northwest corner of the ex~sting church building. The proposed expansion will also be located ~n the same area. Vehicular and Pedestrian Access Pedestrian access w~thin the s~te appears to be adequate. Vehicular traffic currently enters and ex~ts the s~te via L~ttle Neck Road and North Landing Road Access to the columbanum will be v~a these rights-of- way. ! Planning Commission Agenda July 9, 2003 ST. NICHOLAS CATHOLIC CHURCH / # 13 Page 4 Architectural Design The exterior curved wall, the wall facing the parking lot, w~ll be constructed of brick to match that of the ex~sting church The wall approved by C~ty Council ~s proposed at s~x (6) feet n~ne (9)~nches h~gh w~th a length of 17 feet. The proposed add~bon w~ll ~ncrease the length to approximately 50 feet. The elevabon depicts a white brick or EFIS cap at the top of the wall. The faCade facing the church w~ll have a granite face n~ches w~th brick columns spaced ~nterm~ttently. A brick foundabon ~s planned to the water table. · Brick pavers are proposed in the small courtyard adjacent to the columbarium. Landscape and Open Space Design · The area proposed for the columbanum ~s currently landscaped, thereby prowd~ng an attracbve area for ws~tors. No landscaping ~s proposed along the exterior wall; however, it does not appear that plant material ~s necessary to screen the structure as it ~s not unattracbve and will not be h~ghly v~s~ble from e~ther public right-of-way. Evaluation of Request The applicant's request to have expand the original appl~cabon approved by C~ty Council on April 8, 2003 for a columbanum on the subject s~te ~s acceptable. The proposed use wdl generate little acbvity beyond what ~s normally associated w~th a church. The actual structure for the columbanum ~s attracbvely designed and will not be highly v~s~ble from the street. Therefore, this application ~s recommended for approval, subject to the conditions listed below Planning Commission Agenda July 9, 2003 ST. NICHOLAS CATHOLIC CHURCH / # 13 Page 5 Conditions . The cond~bons attached to the original Condibonal Use Permit and the four (4) subsequent permits granted by C~ty Councd shall remain ~n effect w~th the addibon of the columbanum to the s~te, excepbng that the length of the wall shall be modified not to exceed 60 feet ~n length. 2. The columbanum shall be located m the area shown on the submitted s~te plan enbtled "Saint Nicholas Catholic Church Columbarium," prepared by COMP© Construction Company, dated January 13,2003. 3. The wall shall be constructed of brick and mortar w~th all niches facing the church budding as depicted on the submitted elevabon entitled, "Columbanum for St N~cholas Catholic Church, V~rgmia Beach, V~rgin~a," prepared by Barnes Design Group. NOTE: i Further conditions may be required during the administration of applicable City Ordinances. The site plan submitted with this conditional use permit may require rew'sion during detailed site plan review to meet all applicable City Codes. Conditional use permits must be activated within 12 months of City Council approval See Section 220(g) of the City Zoning Ordinance for further information. Planning Commission Agenda July 9, 2003 ST. NICHOLAS CATHOLIC CHURCH / # 13 Page 6 Planning Commission Agenda July 9, 2003 ST. NICHOLAS CATHOLIC CHURCH / # 13 Page 7 Planning Commission Agenda July 9, 2003 ST. NICHOLAS CATHOLIC CHURCH / # 13 Page 8 Planning Commission Agenda July 9, 2003 ST. NICHOLAS CATHOLIC CHURCH / # 13 Page 9 Planning Commission Agenda July 9, 2003 ST. NICHOLAS CATHOLIC CHURCH / # 13 Page 10 DISCLOSURE STATEMEN1 1 Applicant's Name' L'~~~ Z" /Z~/~, ~/~/.? C? List All Current APPLICANT DISCLOSURE If the applicant is a CORPORATION, hst all officers of the Corporation below (Attach hst ~f necessary) If the apphcant is a PARTNERSHIP, FIRM, or other UNINCORPORATED ORGANIZATION, hst all members or partners ~n the orgamzabon below' (Attach l/st /f necessary) i~heck here ~f the applicant is NOT a corporation, partnership, firm, or other un ~ncorporated orgamzat~on If the applicant is not the current owner of the property, complete the Property Owner D~sciosure section below: PROPERTY OWNER DISCLOSURE If the property owner ~s a CORPORATION, list all officers of the Corporation below: (Attach hst ~f necessary) If the property owner is a PARTNERSHIP, FIRM, or other UNINCORPORATED ORGANIZATION, hst all members or partners ~n the orgamzation below (Attach hst /f necessary) ~Check here if the property owner is NOT a corporabon, partnership, firm, or other un incorporated orgamzabon CERTIFICATION ! certify that the information contained herein is true and accurate. I~'~~~'''~-/~''~~ Signature i i i iPrintl, Name ' Conditional Use Permit Appl~cahon Page 8 of 12 Planning Commission Agenda July 9, 2003 ST. NICHOLAS CATHOLIC CHURCH / # 13 Page 11 Item #13 St. Nicholas Catholic Church Modification of Conditions 712 Little Neck Road District 5 Lynnhaven July 9, 2003 CONSENT Charhe Salle': Next item is Item #13, which is St. Nicholas Catholic Church. And, this is a Modification of Conditions to a Conditional Use Permit for a columbanum approved earlier this year on South Little Neck Road. Jerry Rlendeau Mr. Salle'. Mr Chairman I'm Jerry Rlendeau. I'm the Chairman for the columbanum committee at St Nicholas Catholic Church. I've reviewed the conditions, and we're satisfied with them whole-heartedly. Charhe Salle': Is there any opposition to this application? I would move that we approve the consent agenda Item # 13 with three conditions. Ronald Rapley: So we have a motion to approve the consent agenda as read by Charhe Salle'. Do I have a second? I have a second by Gene Crabtree. I've asked Barry Knight to comment on this item. Barry Knight: I have Item #13 for a request by St. Nicholas Catholic Church for a modification to the conditions of the Conditional Use Permit for columbar~um that was approved April 8, 2003. The proposed use will generate little activity beyond what is normally associated with the church. And, the actual structure of the columbanum is attractively designed and will not be highly visible from the street. We're kind of sorry that you had to come back to us today, but we understand that your congregation's response has been overwhelming so you had a need for additional space. And, we also hope that it takes a very, very long time for you all the get the capacity on this columbanum. We view this as an acceptable use of your property. Ronald Pdpley: Barry, thank you very much I hope the public has a better understanding as to why we we're recommending this consent item and that's the purpose of this discussion. We do have a motion on the floor and I believe we have a second. I would like to call for the vote So all in favor of the motion raise your hand. Opposed~ AYE 9 NAY 0 ABS 0 ABSENT 2 ANDERSON AYE CRABTREE AYE DIN AYE HORSLEY KATSIAS AYE KNIGHT AYE MILLER AYE RIPLEY AYE SALLE' AYE STRANGE AYE WOOD ABSENT ABSENT Ronald Rlpley' The motion cames. NICHOLSON, INC. / # 10 July 9, 2003 General Information: APPLICATION D10 - 211 - PDH - 2003 NUMBER: REQUEST: Modiflcabon to the Indian Lakes PD-H1 Land Use Plan to add a m~n~- storage facility. ADDRESS: South Side of Ferrell Parkway, approximately 950 feet west of Indian Lakes Parkway. Map D-lO Nicholson, Inc. POh~ Glnn 1465-67-1057 GPIN: 14656710570000 Planning Commission Agenda NICHOLSON, INC./# 10 Page 1 CITY OF VIRGINIA BEACH AGENDA ITEM ITEM: Nicholson, Inc. - Modification of the Indian Lakes Land Use Plan for mini- warehouses MEETING DATE: August 26, 2003 Background: An Ordinance upon Applicabon of N~cholson, Inc. for a Mod~ficabon of the Indian Lakes PD-H1 Land Use Plan for property located on the south s~de of Ferrell Parkway, approximately 950 feet west of Indian Lakes Boulevard (GPIN 1465671057). DISTRICT 1 - CENTERVILLE Considerations: The applicant desires to modify the land use plan to allow a min~-storage facility on property currently designated for office and retail. The s~te ~s part of a larger 51-acre s~te that ~s designated as office and commercial on the Land Use Plan. The m~n~-storage facility ~s two-story design that has the appearance of an office budding. All storage un~ts are ~nternal and access to the un~ts ~s provided from the front of the building. There is a glassed entryway ~n the middle of the bu~ld~ng w~th automabc doors. Customers enter w~th their storage ~tems through th~s central doorway and can then access the ~nd~vidual storage un,ts. The facdity has a umque design that will blend ~n well w~th the ex~stmg commercial shopping center to the east and any future development ~n the area designated for office and commercial uses to the west. The use will be well-buffered from the adjacent multifam~ly development to the south. Staff recommended approval, subject to the attached condibons. There was no oppos~bon to the request. Recommendations: The Planmng Commission passed a mobon by a recorded vote of 10-0 by consent to approve this request as proffered. Attachments: Staff Review D~sclosure Statement Planning Commission M~nutes Locabon Map N~cholson, Inc Page 2 of 2 Recommended Action: Staff recommends approval Planning Commission recommends approval. Submitting Department/Agency: Planning Department City Manage~ ~, ~b',~7.. ELECTION DISTRICT: SITE SIZE' STAFF PLANNER: PURPOSE: 1 - CENTERVILLE 1.451 acres Barbara Duke To modify the land use plan to allow a m~n~-storage facility on property currently designated for off~ce and retail. Major Issues: · Degree to which the proposal ~s compabble with adjacent ex~sbng and planned uses. Land Use, Zoning, and Site Characteristics: Existinq Land Use and Zoninq The ex~sting s~te ~s vacant and zoned PDH1 Planned Development (Indian Lakes). The s~te ~s part of a larger area designated for office and commercial uses on the Ind,an Lakes Land Use Plan. Surroundinq Land Use and Zoning North' South' East: West: · Pharmacy/PD-H1 Planned Development D~stnct · Multifamily dwelhngs / PD-H1 Planned Development District · Parkway Marketplace shopping center / PD-H1 Planned Development D~strict · Vacant land / PD-H1 Planned Development Planning Commission Agenda NICHOLSON, INC. / # 10 Page 2 District Zoning History The site and surrounding area were rezoned from RS-3 Residential to PUD Planned Development (Indian Lakes) on December 5, 1974. The site is part of a larger 51 acre s~te that ~s designated as office and commercial on the Land Use Plan. Air Installation Compatible Use Zone (AICUZ) The site is in an AICUZ of less than 65dB Ldn surrounding NAS Oceana. Public Facilities and Services Water and Sewer There is an 8 ~nch C~ty water line in H~awatha Drive, and in the easements north and west of the property and there is an 8 ~nch sanitary sewer I~ne in the easements north and east of the property. This site must connect to City water and sewer. Pump station 450 has a capacity problem and addibonal pump station analysis and upgrade may be required during s~te plan rewew. Transportation Master Transportation Plan (MTP) / Capital Improvement Program (CIP): Ferrell Parkway in the v~clnlty of this application is considered a four lane div~ded major suburban arterial It is designated on the Master Transportation Plan (MTP) as a 150 foot wide right-of-way, d~vided w~th a mulb-use trail and access control. There are no projects included in the current Capital Improvement Program to upgrade this roadway. Traffic Calculations: Street Name Present Present Generated Traffic Volume Capacity Existing Land Use z- 2,343 44,000 ~ Ferrell Parkway ADT ~ 32,500 ADT .. Proposed Land Use 3_ 97 Average Daily Trips 2 as defined by PD-H1 commercial zomng 3 as defined by self-storage facd~ty Planning Commission Agenda NICHOLSON, INC./# 10 Page 3 Public Safety Police: Fire and Rescue: The applicant ~s encouraged to contact and work w~th the Crime Prevention Office w~th~n the Police Department for crime prevention techniques and Crime Prevenbon Through Environmental Design (CPTED)concepts and strategies as they pertain to th~s s~te. Storage of hazardous, flammable or combustible materials on- s~te must be w~thm the scope of the V~rg~n~a Statew~de Fire Prevention Code and NFPA Operator must supply on-s~te and hazard m~bgabon k~t for fuel spills. F~re hydrant must be within 400 feet of commercial structure. Comprehensive Plan The Comprehensive Plan Map recognizes this area as a Planned Community, an area planned for a variety of cohesive, ~nterdependent uses ~ncluding a range of res~denbal un~ts, employment, commercial, ~nsbtubonal, cultural, educabonal, open space, and public uses. The plan further states that within those areas of the Kempsv~lle study area yet to be developed, we must establish and adhere to h~gh standards of appearance and funcbon. Summary of Proposal Proposal · The m~n~-storage facility ~s a unique two-stow design that has the appearance of an office building All storage un~ts are ~nternal and access to the un~ts is prowded from the front of the building. There ~s a glassed entryway in the m~ddle of the budding with automabc doors. Customers enter w~th their storage items through this central doorway and can then access the ind~wdual storage un~ts. Site Des~,qn · The s~te plan depicts a 39,186 square foot building footpnnt with parking and loading area on the north s~de. The budding shown meets all of the required setbacks designated ~n the original PD-H1 Land Use Plan for Indian Lakes. Planning Commission Agenda NICHOLSON, INC./# 10 Page 4 Vehicular and Pedestrian Access The s~te w~ll be accessed from Ferrell Parkway through a private common access easement ~ntended to serve the surrounding commercial and off~ce area. Access is also provided from Indian Lakes Boulevard through the Parkway Shopping Center to the east of the s~te. · No pedestrian ~mprovements are proposed s~nce th~s ~s not a pedestrian- oriented use. Architectural Desiqn · The building w~ll be two stones ~n height. The primary build~ng material w~ll be spl~t face block of a light beige color. A w~de blue stripe ~n the m~ddle of the fa(;ade will help to break up the building mass W~ndows will be provided along the front of the building and a glassed central entryway is also shown. The front of the fa(;ade will look hke an office building. The s~des and rear of the building will have no w~ndows. The w~de blue band that will wrap around the sides and rear w~ll help to break up the budding mass. · The hght~ng shown on the budding wdl not be obtrusive to the residents adjacent to the south of the s~te. Landscape and Open Space · A 15 foot wide landscape buffer w~th Category IV landscape plantings ~s provided at the rear of the s~te, adjacent to the southern property hne. Th~s w~ll prowde a good visual separation between this use and the mult~family development to the south. · Landscaping is also shown along the frontage of the building to improve its appearance. Planning Commission Agenda NICHOLSON, INC./# 10 Page 5 Proffers PROFFER # 1 Staff Evaluation: PROFFER# 2 Staff Evaluation: When the property ~s developed, ~n order to achieve a coordinated design and development on the s~te ~n terms of vehicular access, parking, landscaping and building onentabon, the "CONDITIONAL USE PERMIT EXHIBIT OF INDIAN LAKES MINI STORAGE For N~cholson, Inc.", dated 4/30/03, prepared by Kellam-Gerw~tz Engineering, Inc., which has been exhibited to the Virginia Beach C~ty Council and ~s on file w~th the V~rg~n~a Beach Department of Planning ("Concept Plan") shall be substantially adhered to. This proffer is acceptable. The Concept Plan shows the building entrance w/fl be oriented toward the commercial area and that the multifamily development w/fl be buffered from the proposed use. The Plan shows coordinated access w/th the surrounding commercial area and landscaping has been provided along the front parking area. When the property is developed, the architectural design, budding materials and colors of the m~n~-storage budding shown on the Concept Plan w~ll be substantially as depicted on the exhibit enbtled "RENDERING OF MINI WAREHOUSE BUILDING AT PARKWAY MARKETPLACE For Nicholson, Inc.", dated May 20, 2003, which has been exhibited to the V~rg~n~a Beach C~ty Council and ~s on file with the V~rg~nia Beach Department of Planning ("Rendering") This proffer is acceptable. The rendering shows that the proposed building will not be a conventional m/m-storage facility, but w/Il look more like an off/ce building. The color and materials are similar to those used at the Parkway Marketplace shopping center to the east and w/Il complement this center. The off/ce design of this project also establishes a high standard of quality that can be continued when the large vacant parcel to the west/s developed/n the future. Planning Commission Agenda NICHOLSON INC./# 10 Page 6 PROFFER # 3 Staff Evaluation: Further condibons may be required by the grantee dunng detailed S~te Plan review and administration of apphcable C~ty Codes by all cognizant C~ty agencies and departments to meet all applicable C~ty Code requirements. This proffer/s acceptable. City Attorney's Office' The C~ty Attorney's Office has reviewed the proffer agreement dated May 24, 2003, and found ~t to be legally sufficient and ~n acceptable legal form. Evaluation of Request The request for a modification of the land use plan for the Indian Lakes Planned Unit Development to allow a mini-storage fac~hty as proffered is acceptable. The facility has a unique design that w~ll blend ~n well with the ex~st~ng commercial shopping center to the east and any future development ~n the area designated for office and commercial uses to the west. The building has been designed to resemble an office building and the use ~s buffered from the adjacent multifamlly development to the south. The Planning staff recommends approval of the proposed mod~flcabon to the land use plan to allow a mini-storage facility as proffered NOTE: i i Further conditions may be required during the administration of applicable City Ordinances. Plans submitted with this application may require revision during detailed s, ite plan review to meet all applicable Cit~/ Codes. Planning Commission Agenda NICHOLSON, INC./# 10 Page 7 I Planning Commission Agenda NICHOLSON, INC./fi 10 Page 8 Planning Commission Agenda NICHOLSON, INC. / # 10 '~'~~ ~'~ Page 9 Z DISCLOSURE STATEI IENT I! Il Il I I ' '1 I Illlll[ Illlllllll I Applicant's Name: ,'~.cholson, ]]nc. List All Current Property Ownem: Parkuay Parcel, L.L.C. APPLICANT DISCLOSURE If the applicant is a CORPORATION, hst all officers of the Corporation below. (Attach list ~f necessary) Thomas H. ~'~cholson, Jr., President Thomas H. N~cholson, III, Secretar) If the apphcant is a PARTNERSHIP, FIRM, or other UNINCORPORATED ORGANIZATION, hst all members or partners ~n the orgamzabon below: (Attach list ff necessary) I"1 Check here if the applicant is NOT a corporation, partnership, firm, or other umncorporated orgamzation ff the applicant is not the current owner of the property, complete the Property Owner Disclosure section below: PROPERTY OWNER DISCLOSURE If the property owner ~s a CORPORATION, list all officers of the Corporation below: (Attach list if necessary) if the property owner is a PARTNERSHIP, FIRM, or other UNINCORPORATED ORGANIZATION, hst all members or partners in the orgamzation below: (Attach list if necessary) Dan Hoffler: A. Russell K~rk; Anthony P. Nero I-i Check here if the property owner Is NOT a corporation, partnersh;p, firm, or other unincorporated organization. CERTIFICATION ! certify that the information contained herein is true and accurate. Nic h. al son. ~_.' ,/,,'. ~./~, .. By:.' ~ r ~ -' ''- .... Thomas H. h'~cho]sq,n~ Jr.: Signature Pdnt Name President Conditional Use Permit Application Page 8 of 12 Planning Commission Agenda NICHOLSON, INC. / # 10 Page 10 Applir. ant's Name: ~i=~oz=o~; 7=c. Li!rt All Current f Property Owner~: ?a:icva y Parcel, L.L.C. APPLICANT DISCLOSURE If the applicant is a CORPORATION, list all officers of the Corporation below:. (Attach list if ner. e~sary) Thama~ H. }~c~olso~, ~r.,-Presi~n: '~nomas H. Nichalson, III, If the applicant is a PARTNERSHIP, FIRM, or other UNINCORPORATED ORGANIZATION, list all members or partners in the organization below:. (A~tach list if neb'essay) Check here if the applicant is NOT a corperation, partnership, firm, or other unincorporatecl organization. If the property owner is a PARTNERSHIP, FIRM, or other UNINCORPORATED ORGANIZATION, list all members or partners in the organization below: (Atlach fi..~ if necessary) ~an Raffia=; k. Russell Ki~; A~t~on~ P. Nero C] Check here if the property owner is NOT a corporation, partnership, firm, or o~her unincorporated organization. CER*n~;ICATION: I certify that the Informa~fon contained herein is true and a~curate. . ' ' ,,- ' .... ]]- e! -u-~ r. In * u · me_ I I!lll [ ~ J , - -- · i . f II ! ~ -- -- _ ' ~: Conditional Use Perrr~ Application Page 8 of 12 Planning Commission Agenda NICHOLSON, INC. / ~ 10 Page 11 Item # 10 Nlcholson, Inc. Modfficatlon of the Indian Lakes PD-H1 Land Use Plan South s~de of Ferrell Parkway District 1 Centervflle July 9, 2003 CONSENT Charhe Salle': Next item ~s Item #10, N~cholson, Inc. And, that's a Modification to Indian Lakes PD-H 1 Land Use Plan to add a m~m storage facility on the south s~de of Ferrell Parkway. Eddie Bourdon: Thank you Mr. Salle'. Ed&e Bourdon, a Vlrg~ma Beach attorney. And, I represent Nlcholson, Inc And, obwously we appreciate being on the consent agenda as a proffer 1tern. Charhe Salle': Thank you. Eddie Bourdon: Thank you. Charhe Salle': Is there any opposlt~on to th~s apphcatlon9 I would move that we approve the consent agenda Item # 10. Ronald Rtpley So we have a motion to approve the consent agenda as read by Charhe Salle'. Do I have a second? I have a second by Gene Crabtree. Prior to the vote, I'd like for the benefit of the pubhc and the benefit of the readers of this verbatim, I've asked a number of the Commissioners to comment on the pos~t~on of the Commission on this ~tem. And Joe, I think you're going to take th~s one. Joseph Strange: The next item on the consent 1s Item #10. And, this ~s an apphcatlon for a modification of a land use plan. It's the Indian Lakes Land Use Plan. They want to add a mini-storage facility This ~s k~nd of unique. This area had originally been planned for retail space or office space but none of the projects that have come forth seem to work out. And, they want a modification here to put a mira-storage facility. Th~s ~s going to be maybe one of the most umque mira-storage facilities ~n the City. And, it's actually going to be desl~-med to look like an office building, so that if you're looking at ~t from the outside you really not going to be able tell the difference. Tthe people will actually enter through a central area, and go ~n and find the areas they have their storage ~n, so agmn because of the umqueness of th~s p~ece of land there, ~t's a low traffic generator, we thought it was 1deal. There's no oppos~tmn to ~t so we thought ~t would be ideal for consent agenda. Ronald R~pley: Joe, thank you very much. I hope the pubhc has a better understanding as to why we we're recommending th~s consent ~tem and that's the purpose ofth~s Item # 10 Nicholson, Inc. Page 2 discussion We do have a motion on the floor and I beheve we have a second I would like to call for the vote So all ~n favor of the motion raise your hand. Opposed? AYE 9 NAY 0 ABS 0 ABSENT 2 ANDERSON AYE CRABTREE AYE DIN AYE HORSLEY KATSIAS AYE KNIGHT AYE MILLER AYE RIPLEY AYE SALLE' AYE STRANGE AYE WOOD ABSENT ABSENT Ronald Popley: The motion cames. Map D-lO H~ Nc*. "cc- $c~ie Nicholson Inc. N ~ p PD-HI ~ ', POINTE Gptn 1465--67-1057 ZONING HISTORY '1215174-REZONING RS-3 Residential to PUD Planned Development- Granted FORM NO I= S 1 B City of Virginia Reach Z~E~-0FFZC~ CO~ESPO~ENCE In Reply Refer To Our File No. DF-5754 DATE: August 14, 2003 TO: Leslie L. Lilley DEPT: City Attorney ~\~ FROM: B. Kay Wilson~v DEPT: City Attorney Conditional Zoning Application Nicholson, Inc. and Parkway Parcel, L.L.C. The above-referenced conditional zoning application is scheduled to be heard by the City Council on August 26, 2003. I have reviewed the subject proffer agreement, dated May 24, 2003, and have determined it to be legally sufficient and in proper legal form. A copy of the agreement is attached. Please feel free to call me if you have any questions or wish to discuss this matter further. BKW Enclosure PREPARED BY .~111 AtI~N & LEVY NICHOLSON, INC., a Virginia corporation PARKWAY PARCEL, L.L.C., a Virginia limited liability company TO (PROFFERED COVENANTS, RESTRICTIONS AND CONDITIONS) CITY OF VIRGINIA BEACH, a municipal corporation of the Commonwealth Virginia of THIS AGREEMENT, made this 24t~ day of May, 2003, by and between NICHOLSON, INC., a Virginia corporation, Grantor, party of the frrst part; PARKWAY PARCEL, L.L.C., a Virginia limited liability company, party of the second part, Grantor; and THE CITY OF VIRGINIA BEACH, a municipal corporation of the Commonwealth of Virginia, Grantee, party of the third part. WITNESSETH: WHEREAS, the party of the second part is the owner of a parcel of property located in the Centerville District of the City of Virginia Beach, containing approximately 1.451 acres which is more particularly described in Exhibit "A~ attached hereto and incorporated herein by this reference. Said parcel is herein and in Exhibit ~A~ are herein referred to as the "Property'; and WHEREAS, the party of the first part is the contract purchaser of the parcel described m Exhibit "Ap and has initiated a conditional amendment to the Zoning Map of the City of Virginia Beach, Virginia, by petition addressed to the Grantee so as to modify the PD-H1 Land Use Plan with a B-2 Commercial Designation applicable to the Property; and WHEREAS, the Grantee's policy is to provide only for the orderly development of land for various purposes through zoning and other land development legislation; and GPIN: 1465-67-1057 PREPARED BY gYl~t~$, t~OUI~DON. AtlEt~N & LEVY PC WHEREAS, the Grantor acknowledges that the competing and sometimes incompatible uses conflict and that in order to permit differing uses on and in the area of the Property and at the same time to recognize the effects of change, and the need for various types of uses, certain reasonable conditions governing the use of the Property for the protection of the community that are not generally applicable to land similarly zoned are needed to cope with the situation to which the Grantor's rezonmg application gives rise; and WHEREAS, the Grantor has voluntarily proffered, in writing, in advance of and prior to the public hearing before the Grantee, as a part of the proposed modification to the PD-H1 Land Use Plan applicable to the Property, in addition to the regulations provided for the PD-H1 and B-2 Zoning Districts by the existing overall Zoning Ordinance, the following reasonable conditions related to the physical development, operation, and use of the Property to be adopted as a part of smd amendment to the Zoning Map relative and applicable to the Property, which has a reasonable relation to the rezoning and the need for which is generated by the rezoning. NOW, THEREFORE, the Grantor, for itself, its successors, personal representatives, assigns, grantee, and other successors in rifle or interest, voluntarily and without any requirement by or exaction from the Grantee or its governing body and without any element of compulsion or quid pro quo for zoning, rezoning, sxte plan, building permit, or subdivision approval, hereby make the following declaration of conditions and restrictions which shall restrict and govern the physical development, operation, and use of the Property and hereby covenants and agrees that this declaration shall constitute covenants running with the Property, which shall be binding upon the Property and upon all parties and persons claiming under or through the Grantor, its successors, personal representatives, assigns, grantee, and other successors in interest or rifle: 1. When the Property is developed, in order to achieve a coordinated design and development on the site m terms of vehicular access, parking, landscaping and building orientation, the "CONDITIONAL USE PERMIT EXHIBIT OF INDIAN LAKES MINI STORAGE For Nicholson, Inc.", dated 4/30/03, prepared by Kellam-Gerwitz Engineering, Inc., which has been exhibited to the Virginia Beach PREPARED BY SYKES. t~OtltlDON AII~N & LEVY. PC City Council and is on file with the Virginia Beach Department of Planning (~Concept Plan") shall be substantially adhered to. 2. When the Property is developed, the architectural design, building materials and colors of the mini-storage building shown on the Concept Plan will be substantiany as depicted on the exhibit entitled, ~RENDERING OF MINI WAREHOUSE BUILDING AT PARKWAY MARKETPLACE For Nicholson, Inc.", dated May 20, 2003, which has been exhibited to the Virginia Beach City Council and is on fie with the Virginia Beach Department of Planning (~Rendering'). 3. Further conditions may be required by the Grantee during detailed Site Plan review and administration of applicable C~ty Codes by all cognizant City agencies and depart~ments to meet all applicable City Code requirements. The above conditions, having been proffered by the Grantor and allowed and accepted by the Grantee as part of the amendment to the Zoning Ordinance, shall continue in full force and effect until a subsequent amendment changes the zoning of the Property and specifically repeals such conditions. Such conditions shall continue despite a subsequent amendment to the Zoning Ordinance even if the subsequent amendment is part of a comprehenmve implementation of a new or substantially revised Zoning Ordinance until specifically repealed. The conditions, however, may be repealed, amended, or varied by written instrument recorded in the Clerk's Office of the Circuit Court of the City of Virginia Beach, Virginia, and executed by the record owner of the Property at the time of recordation of such instrument, provided that said instrument is consented to by the Grantee in writing as evidenced by a certified copy of an ordinance or a resolution adopted by the governing body of the Grantee, after a public hearing before the Grantee which was advertised pursuant to the provisions of Section 15.2-2204 of the Code of Virginia, 1950, as amended. Said ordinance or resolution shall be recorded along with said instrument as conclusive evidence of such consent, and if not so recorded, said instrument shall be void. The Grantor covenants and agrees that: (1) The Zoning Administrator of the City of Virginia Beach, Virginia, shall be vested vath all necessary authority, on behalf of the governing body of the City of Virginia Beach, Virginia, to administer and enforce the foregoing conditions and PREPARED BY ~] §YKE§ [IOUt~DON. ~AtI~N & LEVY PC restrictions, including the authority (a) to order, in writing, that any noncompliance with such conditions be remedied; and (b) to bring legal action or suit to insure compliance with such conditions, including mandatory or prohibitory injunction, abatement, damages, or other appropriate action, suit, or proceeding; (2) The failure to meet all conditions and restrictions shall constitute cause to deny the issuance of any of the required building or occupancy permits as may be appropriate; (3) If aggrieved by any decision of the Zoning Administrator, made pursuant to these provisions, the Grantor shall petition the governing body for the review thereof prior to instituting proceedings in court; and (4) The Zoning Map may show by an appropriate symbol on the map the existence of conditions attaching to the zoning of the Property, and the ordinances and the conditions may be made readily available and accessible for public inspection in the office of the Zoning Administrator and in the Planning Department, and they shall be recorded in the Clerk's Office of the Circuit Court of the City of Virginia Beach, Virginia, and indexed in the name of the Grantor and the Grantee. PREPARED BY SYI3:$. I~OUtlDON. AIIt~N &IEVY PC WITNESS the following signature and seal: GRANTOR: Nicholson, Inc., a Virginia corporation By: ; ///~~-~"-'-~--- -(SEAL) Thomas H. Nicholson, Jr., President STATE OF VIRCd-NIA CiTY OF , to-wit: The foregoing instrument was acknowledged before me this c2o0r~3o, ra~Yon.Thoma.~~~-s H.~i.i ~n, Notary Publ~e/ M C E y ommission xpires: ~1.[ Inc., day of May, a Virginia PREPARED BY &LDrY PC WITNESS the following signature and seal: GRANTOR: PARKWAY PARCEL, L.L.C., a Vir~m~d ~ty company By: ~ k~] .... A. P. Nero, Member (SEAL) STATE OF VIRGINIA CITY OF (Zi\~ ')~ a.~ ~ ~ , to-wit: The foregoing instrument was acknowledged before me this '.~ ~-~day of May, 2003, by A. P. Nero, Member of Parkway Parcel, L.L.C., a Virginia limited liability company. Notary Public My Commission Expires: PREPARED BY ~$YK~S. DOlrRD()N ~-Jll~$ & LL~W PC F~IBIT ALL THAT certain lot, piece or parcel of land, with the buildings and improvements thereon, situate, lying and being in the City of Virginia Beach, Virginia, and being known, numbered and designated as ''PARCEL D-2" as shown on that certain subdivimon plat entitled, "SUBDIVISION PLAT OF PARCEL D, PART B-1 INDIAN LAKES SHOPPING CENTER (M.B. 280 PGS. 56 & 57) VIRGINIA BEACH, VIRGINIA", dated 11 /01 /01, made by Engineering Services, Inc., which plat is duly recorded in the Clerk's Office of the Circuit Court of the City of Virginia Beach, Virginia, in Map Book 301, at Pages 59 and 60. GPIN: 1465-67-1057 CONDREZONE/NICHOLSON/PARIONAYMAP. KETPiACE/PROFFER August 12, 2003 zntrzcacies of what it's going to do to the nezghborhood and what not, but some of those have been brought up and we need a lzttle bit more tmme and I believe Councilman Maddox has discussed a two-week deferral and I'm mn agreement with that so we can move on. Thank you. MAYOR OBERNDORF: Thank you. Mr. Maddox. COUNCILMAN MADDOX: I would like to make a motion that we -- can we do both at the same time? I would like to make a motion that we defer Plannmng Item Number 1 and Number 2 for two weeks. COUNCILbR%N REEVE: Second. MAYOR 0BERNDORF: Are we ready for the questmon? CITY CLERK: With Mr. Dlezel out, the vote is 11 to 0 -- 10 to 0 to approve the deferral until August the 26th for the Items concerning the amendment of the City Code and the Conditional Use for Gregory Nelson. MAYOR OBERNDORF: CITY CLERK: MAYOR OBERNDORF: CITY CLERK: Madam Clerk, I pushed the yes button, but I looked up there and it wasn't on the board. It isn't showing up there, but we have lt. Thank you. That's why I sazd 11 to 0. June 3, 2003 followzng condztional use. COUNC IIAqAN MADDOX ' They are both related. CITY CLERK- Right. COUNCILMAN MADDOX ' If he wants to come speak now. CITY CLERK' Anthony -- and I can't read your name. Anthony. ANTHONY OFFREDI: Yes. CITY CLERK: I can't read your last name. ANTHONY OFFREDI' Anthony 0ffredi. CITY CLERK: Offredz. O-f-f-r-e-d-m ? ANTHONY OFFREDI' O-f-f-r-e-d-i. That's correct. CITY CLERK- Thank you. MAYOR OBERNDORF' Good evenmng. ANTHONY OFFREDI: Good evenmng. How is everyone today? I understand zt ms gozng to be deferred, but there are a couple of thmngs that I for one sitting here knows that this is going to open up a fairly large can of worms and we want to make sure we get mt started on the right foot. I've been smtting down with my Councilman and dmscussmng the June 3, 2003 FORMAL SESSION VICE MAYOR JONES: Under Plannmng Item M5 for a deferral of two weeks, the Applicatmon of a Samr Enterprises, Incorporated for a modzfication of a Condmtmonal Use Permzt concernzng automobile storage and automobzle repair. That's · n the Rose Hall Distr~ct. Is there a second? COUNCII24AN MADDOX: Second. MAYOR OBERNDORF: Okay. Are we ready for the Consent Agenda? CITY CLERK: By a vote of 11 to 0 you have adopted the Consent Agenda with Mr. Jones abstamnlng on the Plannmng Item for Number 7 and Mrs. Wilson disclosmng on Number 3 for Ocean Beach Club. CITY CLERK: Your Honor, the next Item ms the Plannzng Item to amend the CZO for the Bed and Breakfast Inn with a conditional use in certamn dmstrmcts and to further amend the specmfic conditions for Bed and Breakfast Inns. MAYOR OBERNDORF: Mr. Maddox. Do you have any speakers? COUNCILMAN MADDOX: Well, there's a gentleman here that I belmeve opposes it mf he's stmll here, but we've talked to the Applmcant. The Applicant ms not here. We have agreed to defer mt for two weeks. CITY CLERK: I do have one on the next Item, which ~s the August 12, 2003 AGENDA REVIEW MAYOR OBERNDORF: Ail rmght. Number 5, Applmcation of S-A-I-R Enterprises, Incorporated, for a Modmfmcation of a Conditional Use Permmt re an automobile service station mn the Rose Hall Distrmct. COUNCIL LADY McCLANAN: Madam Mayor, I would like to defer thms for a couple of weeks mf I could. This is at the corner of Smllna and South Lynnhaven. It ad]omns residential property and there are some things about this Appllcatmon that I would -- I have gone from havmng both ends of Smlmna drive what used to be the best-kept and the most attractmve automobile service stations mn the Cmty to -- this Ks surrounded on three smdes by resmdential property and there are some thmngs that I would like to workout with the Applicant mf you-all would be wmllmng to defer it. I think what they want to do ms okay. It's just that some of the conditmons need to be worked on a lmttle bmt. If we could call the Applmcant and see mf mt would be okay to defer mt until the last Meetmng of the month, I would apprecmate it. I'm not real happy wmth mt as it is. But, I think we can get to the point to where it can be done. MAYOR OBERNDORF: Okay. Virginia Beach City Council August 12, 2003 6:00 p.m. CITY COUNCIL: Meyera E. Oberndorf, Mayor Vice Mayor Lou!s R. Jones Harry E. Diezel Margaret L. Eure Reba S. McClanan Richard A. Maddox J~m Reeve Peter W. Schm~dt Ron Villanueva Rosemary Wilson James L. Wood At-Large Baysmde - Dlstr~ct 4 Kempsville - Dlstrzct 6 Centervllle - District 2 Rose Hall - District 3 Beach - Distr~ct 6 Princess Anne - Dmstrict 7 At - Large At - Large At - Large Lynnhaven - District 5 CITY MANAGER: CITY ATTORNEY: CITY CLERK: STENOGRAPHIC REPORTER: James K. Spore Leslie L. Lilley Ruth Hodges Smith, MMC Dawne Franklin Meads VERBATIM Planning Application of Sair Enterprises, Incorporated M~, ~-~ SAIR Eni ' Inc. Not to Modification of Conditions ZONING HISTORY 1. 3-12-62 -- Change of Zoning (Residence Suburban District to CG-2 General Commercial District)- granted 3-7-66 -- Conditional Use Permit (gasoline supply station) - granted 2-13-2001 -- Conditional Use Permit (automobile service stabon with convenience store, automobile storage area, automobile service)- granted 2. 3-23-99 -- Conditional Use Permit (mini-warehouses)- granted CITY OF VIRGINIA BEACH AGENDA ITEM ITEM: Sair Enterprises, Inc.- Modification of a Conditional Use Permit MEETING DATE: August 26, 2003 · Background: An Ordinance upon Applicabon of Salr Enterprises, Inc. for a Modification of a Cond~bonal Use Permit for an automobile service stabon ~n conjuncbon w~th a convenience store and storage yard approved by C~ty Councd on February 13, 2001. Property ~s located at 3096 South Lynnhaven Road (GPIN 1497107039). DISTRICT 3 - ROSE HALL Th~s request was deferred on August 12. Considerations: The s~te was rezoned from RS-4 Residence Suburban D~stnct to CG-2 General Commercial D~stnct on March 12, 1962. A cond~bonal use permit for a gasoline supply station was approved on March 7, 1966 The site has been zoned B-2 Community Bus~ness D~stnct s~nce 1973. In February 2001, Qty Council approved a Cond~bonal Use Permit for automobde service stabon w~th a convenience store, automobve storage, and automobve repair. Cond~bon 2 requires that the building be constructed consistent w~th the elevabon approved with the 2001 Condibonal Use Permit The drawing shows a canopy connecbng the main building with the canopy covenng the gas pump area The apphcant ~s requesbng that th~s canopy be deleted as a requirement. The building as constructed does not have this porbon of the canopy. The applicant also desires to modify the Cond~bonal Use Permit by removing one of the uses prewously allowed (automobile storage), expanding a previously approved use (automotive repair) and adding an additional use (car wash) The existing automobile storage area ~s located behind the building. Th~s area w~ll be eliminated and ~nstead utilized for an access drive to the proposed car wash, trash dumpster and a parking space (designated on the s~te plan for the manager) The exlsbng building has three service bays facing South Lynnhaven Road The applicant proposes an add~bon to the north end of the building prowd~ng two more service bays and a car wash. The design of the addition w~ll match the Salr Enterprises Page 2 of 3 ex~sting building, including a brick exterior and architectural style fiberglass shingles on the roof The Planning Commission placed th~s ~tem on the consent agenda because ~t ~s an ex~st~ng use and has the potenbal for ~mprowng the aesthebcs of the s~te Staff recommended approval There was no opposibon to the request. [] Recommendations: The Planning Commission passed a mobon by a recorded vote of 10-0 to approve th~s request w~th the following cond~bons. The s~te shall substanbally conform to the submitted prehm~nary site plan btled "PLAZA CITGO CARWASH & 2 SERVICE BAYS, 3096 South Lynnhaven Road, Virginia Beach, Va. 23452", dated April 26, 2003, and which ~s on file ~n the City of Virginia Beach Planning Department subject to the following condibons: a In heu of the Iocabon of the trash dumpster as shown on the plan, the apphcant shall cooperate w~th staff dunng s~te plan rewew to determine a new Iocabon. b. Category IV screening shall be ~nstalled along the enbre length of the property hne along Hospital Drive. c. The street frontage screening along South Lynnhaven Road shall exceed the requirements of the S~te Plan Ordinance, Secbon 5A. The plants shall be a m~x of dense evergreen trees, such as Deodar Cedar or Leland Cypress, permitted street trees, and shrubs. d. The two exisbng entrances on South Lynnhaven Road shall be closed and replaced w~th a s~ngle entrance. A right turn lane must be constructed along the full frontage of the s~te on South Lynnhaven Road to S~hna Drive. The right turn lane taper shall be 50 feet, and the corner radius at South Lynnhaven Road and S~hna Drive shall be 35 feet. e. The ex~sting entrances on Silina Drive shall be closed and replaced w~th a s~ngle entrance. It shall be located so there ~s a m~n~mum 50-foot tangent secbon between the end of the corner radius at South Lynnhaven Road and the beginning of the entrance radial return. 2. The proposed building and canopy shall substantially conform to the elevation btled "S. LYNNHAVEN ROAD ELEVATION" on the plan btled "PLAZA CITGO CARWASH & 2 SERVICE BAYS, 3096 South Lynnhaven Road, V~rg~n~a Beach, Va. 23452", dated April 26, 2003, and is on file ~n the C~ty of V~rg~n~a Beach Planning Department The ex~sbng nonconforming freestanding s~gn shall be removed and may be replaced w~th a conforming monument s~gn. The base of the s~gn shall be of the same brick as the proposed build~ng Sa~r Enterprises Page 3 of 3 All llghbng on the s~te shall be consistent w~th those standards recommended by the Illumlnabon Eng~neenng Society of North America (IESNA) A photometric llghbng plan ind~cabng the number and types of llghbng will be submitted as part of the formal s~te plan submission for rewew by the Police Department to determine consistency w~th Crime Prevention Through Enwronmental Design (CPTED) principles and pracbces. L~ghbng shall be installed and operated as shown on the approved plan. Canopy I~ghting shall consist of flush mounted fixtures on the ceiling of the canopy. All hghbng shall be d~rected ~nward and downward w~th~n the s~te so as to eliminate glare onto a adjacent properties and rights-of-ways. Automobve repair shall be only the type as specifically defined ~n the C~ty Zoning Ordinance under Secbon 111 Defln~bons - Automobile repair estabhshment or Automobve Service Estabhshment. 6. No outside storage of vehicles, auto parts or bres will be permitted 7. All service work on vehicles shall be performed ~ns~de the budding 8 No outside speakers will be allowed. 9 Hours of operabon for the car wash shall be 6:00 a.m. to 10'00 p.m. 10 S~gns for the s~te shall be I~m~ted to traffic control signs, the monument s~gn noted above ~n Cond~bon Three, and such other s~gns for the service station building as permitted under Secbon 905 of the C~ty Zoning Ordinance. No s~gns for the convenience store, other than one (1) bus~ness ~dent~flcabon s~gn, shall be ~nstalled. No signs for the car wash, other than one (1) business ~dent~flcabon s~gn, shall be ~nstalled S~gns constructed of exposed neon shall not be installed on the convenience store or car wash, ~nclud~ng on the w~ndows so as to be ws~ble from the public right-of-way Attachments: Staff Rewew D~sclosure Statement Planning Commission M~nutes Locabon Map Recommended Action: Staff recommends approval Planning Commission recommends approval Submitting Department/Agency: Planning Department4-~~l,Vl~Ce-~- SAIR ENTERPRISES, INC./# 14 July 9, 2003 General Information: APPLICATION NUMBER: H07-210-MOD-2003 REQUEST: Mod,flcabon of Conditions placed on a condibonal use permit for an automobde serwce station w~th a convenience store, automotive repair, and automobde storage, approved by City Councd on February 13, 2001. ADDRESS: 3096 South Lynnhaven Road Map H-7 Fl~p Nc*. t.o c~c~ SAIR Inc. Modificanon of Condutons GPIN: 14971070390000 Planning Commission Agenda July 9, 2003 SAIR ENTERPRISES, INC. I # 14 Page 1 ELECTION DISTRICT: SITE SIZE. STAFF PLANNER: PURPOSE: 3- ROSE HALL 0.955 acre Faith Christie and Stephen White Applicant desires to (1) ehm~nate a requirement for the ~nstallabon of a canopy between the gas pump canopy and the ma~n building, (2) eliminate the automobile storage area, and (3) add two service bays and a car wash. Major Issues: Ensunng that the requested modifications to the Conditional Use Permit cond~bons are appropriate and do not negabvely affect the surrounding properbes. Land Use, Zoning, and Site Characteristics: Existinq Land Use and Zoninq An automobde service stabon that recently underwent a substanbal redevelopment effort consistent w~th the 2001 use permit ~s located on the s~te The s~te is zoned B-2 Community Bus~ness Distnct. Surroundinq Land Use and Zoning North: South: East: · A vacant parcel/B-2 Community Business District · Sihna Drive · Across Sdina Drive a Convenience Store w~th Gas Pumps / B-2 Community Bus~ness District · South Lynnhaven Road Planning Commission Agenda July 9, 2003 SAIR ENTERPRISES, INC. / # 14 Page 2 West: · Across South Lynnhaven Road, Mulbple-Family Dwellings / A-18 Apartment District Hospital Drive Across Hospital Drive Single Famdy Dwelhngs / R-7.5 Residential D~strict Zoninq History The site was rezoned from RS-4 Residence Suburban District to CG-2 General Commercial Distnct on March 12, 1962. A conditional use permit for a gasohne supply station was approved on March 7, 1966. The site has been zoned B-2 Community Business District s~nce 1973. In February, 2001, City Council approved a Conditional Use Permit for automobile service station w~th a convemence store, automotive storage, and automobve repair Air Installation Compatible Use Zone (AICUZ) The site ~s in an AICUZ of 70-75dB Ldn surrounding NAS Oceana. Public Facilities and Services Water and Sewer There is an 8 inch water main in Sahna Drive fronting the property and in South Lynnhaven Road. The s~te ~s already connected to City water. There ~s an 8 inch grawty sanitary sewer ma~n in Salina Drive fronting this property. The site is already connected to City sewer. Transportation Traffic Calculations: street Name Present Pre~ent Generated Traffic .... Volume Capacity The add~bon of a car wash and 2 19,130 ~ service bays wdl generate an South Lynnhaven Road ADT ~ 20,000 ADT add~bona1120 to 140 trips per day Average Dady Trips Planning Commission Agenda July 9, 2003 SAIR ENTERPRISES, INC. I # 14 Page 3 Public Safety Police: The applicant ~s encouraged to contact and work w~th the Crime Prevenbon Office w~th~n the Police Department for cr~me prevenbon techniques and Crime Prevention Through Environmental Design (CPTED) concepts and strategies as they pertain to th~s site. Fire and Adequate. Rescue: Comprehensive Plan The Comprehensive Plan recommends th~s area for retail, service, office, and other compatible uses w~th~n commercial centers surrounding neighborhoods and communities Summary of Proposal Proposal The Cond~bonal Use Permit permitting automobile service station with a convenience store, automobve storage, and automobve repair was approved by the C~ty Council on February 13, 2001. The Cond~bonal Use Permit has eight cond~bons: 1. The site shall substantially conform to the submitted preliminary s~te plan btled "PROPOSED CONVENIENCE STORE & GAS PUMPS FOR PLAZA CITGO, 3096 South Lynnhaven Road, V~rg~n~a Beach, Va. 23450, for SAIR ENTERPRISES, INC.", prepared by Ohs Meeklns, AIA, Architect, dated November 14, 2000, and ~s on file in the C~ty of V~rg~n~a Beach Planning Department subject to the following conditions: a. Category IV screening shall be installed along the entire length of the property I~ne along Hospital Drive. b. The street frontage screening along South Lynnhaven Road shall exceed the requirements of the Site Plan Ordinance, Secbon 5A. The plants shall be a m~x of dense evergreen trees, such as Deodar Cedar or Leland Cypress, permitted street trees, and shrubs Planning Commission Agenda July 9, 2003 SAIR ENTERPRISES, INC. / # 14 Page 4 C. The two exisbng entrances on South Lynnhaven Road shall be closed and replaced w~th a single entrance. A right turn lane must be constructed along the full frontage of the s~te on South Lynnhaven Road to Sdina Drive. The right turn lane taper shall be 50 feet, and the corner radius at South Lynnhaven Road and SIl~na Drive shall be 35 feet. d. The exisbng entrances on Sd~na Drive shall be closed and replaced with a single entrance. It shall be located so there is a m~nlmum 50-foot tangent section between the end of the corner radius at South Lynnhaven Road and the beginning of the entrance radial return. . The proposed building and canopy shall substantially conform to the prehminary elevation titled "PROPOSED CONVENIENCE STORE & GAS PUMPS FOR SAIR ENTERPRISES, INC." prepared by Ohs Meekms, AIA, Architect, dated November 14, 2000, and is on file in the C~ty of Virginia Beach Planning Department subject to the following conditions: a. The proposed budding and canopy shall be of a colonial design to match the ex~sting building. The building materials shall be brick to match the existing brick, and the roofing materials shall be fiberglass roof shingles to simulate the slate roof of the existing building. b. The proposed canopy shall have a mansard roof w~th fiberglass roof shingles to simulate the ex~sbng building's slate roof, and shall be supported by brick columns 3. The ex~sbng nonconforming freestanding sign shall be removed and may be replaced w~th a conforming monument s~gn. The base of the sign shall be of the same brick as the proposed building. 4 The site shall employ Iow-level hghting, as required ~n Secbon 224 of the C~ty Zoning Ordinance. o Automotive repair shall be only the type as specifically defined in the City Zoning Ordinance under Secbon 111 Deflnibons - Automobile repair establishment or Automobve Service Estabflshment 6. No outside storage of vehicles, auto parts or bres w~ll be permitted. 7 All service work on vehicles shall be performed inside the building. 8. Signs for the s~te shall be hmited to traffic control signs, the monument s~gn noted Planning Commission Agenda July 9, 2003 SAIR ENTERPRISES, INC. / # 14 Page 5 above in Condibon Three, and such other signs for the service station building as permitted under Secbon 905 of the C~ty Zoning Ordinance. No s~gns for the convenience store, other than one (1) business ~dent~flcabon s~gn, shall be ~nstalled. S~gns constructed of exposed neon shall not be ~nstalled on the convenience store, including on the w~ndows so as to be ws~ble from the pubhc right-of-way. Condibon 2 requires that the building be constructed consistent w~th the elevabon drawing shown below. The drawing shows a canopy connecting the ma~n building w~th the canopy covenng the gas pump area The applicant ~s requesting that this canopy be deleted as a requirement The budding as constructed does not have th~s portion of the canopy (see photo on the next page). CANOPY JOINING GAS PUMP AREA WITH BUILDING (as approved by City Council in 2001) Planning Commission Agenda July 9, 2003 SAIR ENTERPRISES, INC./# 14 Page 6 Missing canopy The applicant also desires to modify the Conditional Use Permit by removing one of the uses prewously allowed (automobde storage), expanding a previously approved use (automotive repair) and adding an add~bonal use (car wash). Automobile Storaqe Area The existing storage area is located behind the building. This area wdl be eliminated and instead utilized for an access drive to the proposed car wash, trash dumpster and a parking space (designated on the site plan for the manager). Automotive Repair Bays The existing building has three service bays facing South Lynnhaven Road. The applicant proposes an addition to the north end of the building providing two more service bays. The design of the add~bon will match the existing building, including a brick exterior and architectural style fiberglass shingles on the roof. Car Wash The add~bon proposed for the north end of the ex~sbng building includes a s~ngle-bay, drive-through car wash. Vehicular access to the car wash is provided via a drive a~sle that runs from the gas pump and convenience store parking area, around the rear of the ex~sting budding, to the car wash entrance (Hospital Drive s~de). Vehicles exit the car Planning Commission Agenda July 9, 2003 SAIR ENTERPRISES, INC. / # 14 Page 7 wash on the s~de facing South Lynnhaven Drive and then empty into the parking area ~n front of the service bays. To accommodate the car wash, the trash dumpster is relocated to the rear of the s~te, accessible wa the drive for the car wash. Staff does not find th~s location to be the best option for the trash dumpster due to ~ts location on the car wash drive and the extent of the reverse movement that would be required of the waste management truck servicing the dumpster. Should th~s Mod~ficabon of Cond~bons be approved, staff will work w~th the applicant dunng site plan rewew to determine an acceptable Iocabon for the trash dumpster. Evaluation of Request The modification to Cond~bon 2 ~s reasonable and is recommended for approval. The modification of the Use Permit to allow for the addition of two automobile repair and service bays and a car wash ~s also recommended for approval. The ehm~nabon of the canopy between the main building and the canopy over the gas pumps ~s reasonable. This canopy area would have served only as a parbal covering of ~ndividuals mowng between the gas pump area and the ma~n budding, s~nce the sides would have remained open to the elements. Its role as protecbon from the elements would have been negligible. Staff also concludes that the overall aesthebc affect of the s~te is better without the connection between the gas pump area canopy and the ma~n building. The lack of the canopy results ~n less mass and thus a more human scale The add~bon of the two service bays and the car wash, and the resulting loss of the automobde storage area, are reasonable and can be accommodated on the s~te. The addition should not result in any add~bonal adverse affect on the surrounding area, and actually should ~mprove the s~tuabon through the loss of the storage area, which can, ~f not properly maintained and monitored, have a significant adverse affect. The design of the additional service bays and the car wash are consistent w~th the ex~sbng building, which fits the surrounding area well due to the res~denbal styling of many elements of the architectural design Staff, therefore, recommends approval as cond~boned below. Conditions 1. The site shall substantially conform to the submitted preliminary s~te plan titled "PLAZA CITGO CARWASH & 2 SERVICE BAYS, 3096 South Lynnhaven Road, Virginia Beach, Va. 23452", dated April 26, 2003, and which ~s on file ~n the City ~.~. · ~, . ~ ~lannlng ~ommlsslon AQenaa July 9, 2003 SAIR ENTERPRISES, INC. / ~ 14 Page 8 of V~rginia Beach Planning Department subject to the following conditions: a. In I~eu of the location of the trash dumpster as shown on the plan, the apphcant shall cooperate w~th staff during s~te plan rewew to determine a new Iocabon. b. Category IV screening shall be ~nstalled along the entire length of the property hne along Hospital Drive. Co The street frontage screening along South Lynnhaven Road shall exceed the requirements of the Site Plan Ordinance, Section 5A. The plants shall be a mix of dense evergreen trees, such as Deodar Cedar or Leland Cypress, permitted street trees, and shrubs. d. The two ex~sting entrances on South Lynnhaven Road shall be closed and replaced with a single entrance. A right turn lane must be constructed along the full frontage of the s~te on South Lynnhaven Road to Sihna Drive. The right turn lane taper shall be 50 feet, and the corner radius at South Lynnhaven Road and Silina Drive shall be 35 feet. eo The ex~stmg entrances on Silina Drive shall be closed and replaced w~th a single entrance. It shall be located so there ~s a minimum 50-foot tangent section between the end of the corner radius at South Lynnhaven Road and the beginning of the entrance radial return . The proposed building and canopy shall substanbally conform to the elevabon btled "S. LYNNHAVEN ROAD ELEVATION" on the plan titled "PLAZA CITGO CARWASH & 2 SERVICE BAYS, 3096 South Lynnhaven Road, Virginia Beach, Va. 23452", dated April 26, 2003, and is on file in the C~ty of Virginia Beach Planning Department. . The exisbng nonconforming freestanding sign shall be removed and may be replaced w~th a conforming monument s~gn The base of the sign shall be of the same brick as the proposed building. All hghting on the s~te shall be consistent w~th those standards recommended by the Illum~nabon Eng~neenng Society of North America (IESNA). A photometric hghting plan ~nd~cabng the number and types of lighbng w~ll be submitted as part of the formal s~te plan submission for rewew by the Police Department to determine consistency with Crime Prevention Through Enwronmental Design (CPTED) principles and practices. Lighting shall be ~nstalled and operated as shown on the approved plan Canopy hghbng shall consist of flush mounted fixtures on the ceding of the canopy All I~ghbng shall be d~rected inward and Planning Commission Agenda July 9, 2003 SAIR ENTERPRISES, INC. / # 14 Page 9 downward w~th~n the s~te so as to eliminate glare onto a adjacent properties and rights-of-ways. o Automotive repair shall be only the type as specifically defined in the City Zoning Ordinance under Sechon 111 Defin~bons - Automobile repair establishment or Automotive Service Establishment. 6. No outside storage of vehicles, auto parts or bres w~ll be permitted. 7. All service work on vehicles shall be performed reside the building. 8. No outside speakers w~ll be allowed. 9. Hours of operation for the car wash shall be 6:00 a.m. to 10:00 p.m. 10 Signs for the site shall be I~mited to traffic control signs, the monument s~gn noted above ~n Condition Three, and such other s~gns for the service stabon building as permitted under Section 905 of the City Zoning Ordinance. No s~gns for the convenience store, other than one (1) bus~ness idenbfication sign, shall be ~nstalled. No signs for the car wash, other than one (1) bus~ness ~dent~flcabon sign, shall be ~nstalled. Signs constructed of exposed neon shall not be installed on the convenience store or car wash, including on the w~ndows so as to be visible from the public right-of-way. NOTE: Further conditions may be required during the administration of applicable City Ordinances. The site plan submitted with this conditional use permit may require revision during detailed site plan review to meet all applicable City Codes. Conditional use permits must be activated within 12 months of City Council approval. See Section 220(g) of the City Zoning Ordinance for further information. Planning Commission Agenda July 9, 2003 SAIR ENTERPRISES, INC. / # 14 Page 10 -- Planning Commission Agenda July 9, 2003 SAIR ENTERPRISES, INC. I # 14 Page 11 Planning Commission Agenda July 9, 2003 SAIR ENTERPRISES, INC./# 14 Page 12 DISCLOSURE STATEMENT ii Applicant's Name: List Ail Current Property Owners:~...-., A ,~/Epl JlP_., ~,~~ ) ~ ~ . PROPERTY OWNER DISCLOSURE If the property owner ts a CORPORATION, list all officers of the Corporation below: (A.ttach hst if n.ecessary) If the property owner is a PARTNERSHIP, FIRM, or other UNINCORPORATED ORGANIZATION, list all members or partners ~n the organization below: (Attach list if necessary) [] Check here if the property owner is NOT a corporation, partnership, firm, or other unincorporated orgamzat~on If the applicant is not the current owner of the property, complete the Applicant D~sclosure section below: APPLICANT DISCLOSURE If the property owner ~s a CORPORATION, hst all officers of the Corporation below. (Attach list if necessary) If the property owner is a PARTNERSHIP, FIRM, or other UNINCORPORATED ORGANIZATION, list all members or partners in the organization below: (Attach list if necessary) r-i Check here if the property owner ~s NOT a corporation, partnership, firm, or other unincorporated organizabon. CERTIFICATION: i certify that the information contained herein is true and accurate. · Signature Print Name Z Modification of Condibons Apphcat~on Page 9 of 13 Planning Commission Agenda July 9, 2003 SAIR ENTERPRISES, INC./# 14 Page 13 Item # 14 Salr Enterprises, Inc. Modification of a Conditional Use Penmt 3096 South Lynnhaven Road District 3 Rose Hall July 9, 2003 CONSENT Next item lS Item #14, Salr Enterprises, Inc. And, that's a Modification of conditions placed on a Conditional Use Permit for an automobile service station with a convenience store, automotive repair and automotive storage at 3096 South Lynnhaven Road. John Richardson: Mr. Salle'. Mr. Pdpley, members of the Commission. My name is John Pdchardson. I'm a local attorney. I represent the applicants in tlus matter. The conditions as revised this morning are acceptable to us. Chaflle Salle': Thank you. John Puchardson: There was a change in condition number nine I beheve. Charlie Salle': There are 10 conditions. John Pdchardson: And the 10 are acceptable. Ronald Pdpley: There was a change in number four John Pdchardson: Was it number four Mr. Pdpley? Ronald Ripley: I think so. Robert Miller: It was number nine. John Rachardson: That's right, it was number nine in the other application. Thank you. Charhe Salle': Is there any opposition to this application? I would move that we approve the consent agenda Item # 14 with ten condmons. Ronald Rlpley: So we have a motion to approve the consent agenda as read by Charlie Salle'. Do I have a second? I have a second by Gene Crabtree. I've asked Barry Knight to comment on the item. Barry Knight: Item #14, Salr Enterprises, Inc., requests a modification of conditions placed on a Conditional Use Permit for an automobile service station with a convenience store, automotive repair and automobile storage. And, this was approved by City Council Item # 14 Star Entepnses, Inc. Page 2 on February 13,2001 We're talking about the ehmlnatlon of the canopy between the main bmld~ng and the canopy over the gas pumps is reasonable. Let me go back. The elimination of the canopy between the main bmld~ng and the canopy over the gas pumps ~s reasonable. This canopy area would have served only as partial covenng of lnd~vlduals moving between the gas pump area and the mmn building, since the s~des will remain open to all the elements. This role of protection from the elements would have been neghglble. Staff also concludes the overall aesthetics of th~s site would be better w~thout a connection between the gas pump area and the main bmldlng. The addition of the two service bays and carwash, and the resulting loss of the automobile storage area are reasonable and can be accommodated on th~s site. The addition should not result ~n any additional adverse effect on the surrounding area, and actually should ~mprove the situation through the loss of the storage area. It is also noted that some of the adjoining neighbors would like for the hghts to be less intrusive and that's been addressed. They also requested adequate buffer zone, and we believe that has been done. We also would hke to commend the owner ofth~s property. It looks hke he's taken this comer that m years pass was not qmte as desirable or acceptable of the use as ~t is today. It is a fine lookang comer and ~t looks race. Therefore, we deemed this an appropriate use of this property. Ronald Rapley: Barry, thank you very much. I hope the pubhc has a better understanding as to why we we're recommending th~s consent ~tem and that's the purpose of this d~scuss~on. We do have a motion on the floor and I beheve we have a second. I would hke to call for the vote. So all ~n favor of the motion raise your hand. Oppose& AYE 9 NAY 0 ABS 0 ABSENT 2 ANDERSON AYE CRABTREE AYE DIN AYE HORLSEY KATSIAS AYE KNIGHT AYE MILLER AYE RIPLEY AYE SALLE' AYE STRANGE AYE WOOD ABSENT ABSENT Ronald Rlpley: The motion cames. Map I_,-9 Not ~o Sc~!e D. ~V. Gatlin ~ // AG-2 Gpzn - See ~lpphcatzon ZONING HISTORY 1. 4-14-92 -- Change of Zoning (B-2 commumty Business D~stnct to R-5D Residential D~stnct) - Granted 4-14-92 -- Subdivision Variance - Granted CITY OF VIRGINIA BEACH AGENDA ITEM ITEM: D.W. Gaffing, Inc. - Change of Zoning District Classification Conditional Use Permit (self-storage mini-warehouses) MEETING DATE: August 26, 2003 · Background: An Ordinance upon Apphcabon of D. W. Gathng, Inc. for a Chan.qe of Zon~n.q D~str~ct Class~flcabon from R-5D Residential Duplex D~str~ct to B-2 Community Bus~ness D~strict on property located on the west s~de of Oceana Boulevard, approximately 819 feet south of Beacons Reach Drive (GPIN 2415488317). The Comprehensive Plan recommends use of this property for res~denbal uses above 3.5 dwelhng units per acre. DISTRICT 6- BEACH An Ordinance upon Appl~cabon of D. W. Gathng, Inc. for a Conditional Use Permit for a self storage facility on property located on the west side of Oceana Boulevard, approximately 819 feet south of Beacons Reach Drive (GPIN 2415485492, 2415486381; 2415488317). DISTRICT 6 - BEACH The purpose of the requests ~s to rezone a 0.36-acre res~denbally zoned parcel to B-2 and to combine ~t w~th adjacent properties already zoned B-2 (4.44 acres) and construct and operate a m~n~-warehouse facility on the total 4.80 acres Considerations: The R-5D zoned portion of the property has a s~ngle-family dwelling on ~t that will be removed. The adjacent B-2 Community Bus~ness D~stnct parcels are vacant. The submitted site plan depicts the construction of five (5) self-storage buildings w~th approximately 114,000 square feet of storage and a 960 square foot office. The required Category VI landscaping is depicted around the perimeter of the property The buffer w~dth ~ncreases from 6 feet to15 feet along the property hnes adjacent to res~denbal zoning, as required by the C~ty Zoning Ordinance The applicant has constructed and ~s operabng several other such storage facd~bes throughout the C~ty and plans to develop th~s s~te using s~milar design elements and building materials. The cond~bons recommended below, ~nclud~ng the submitted photographs of other s~m~lar fac~l~bes developed by the applicant, help to ensure that the final development w~ll be compabble with the surrounding properties as well as with NAS Oceana a~rfleld operabons D.W. Gatl~ng Page 2 of 3 The Planning Commission placed the Change of Zoning and the Cond~bonal Use Permit requests on the consent agenda because the use ~s compatible w~th NAS Oceana, generates a Iow level of traffic, and ~s consistent w~th the recommendations of the Comprehensive Plan for th~s area. Staff recommended approval. There was no oppos~bon to the request. · Recommendations: The Planning Commission passed a mobon by a recorded vote of 10-0 to approve th~s request w~th the following conditions: The parcels shall be developed and landscaped as depicted on the concept plan entitled, "AIIsafe Self Storage, Oceana Boulevard, Prehm~nary Site Plan," prepared by The Spectra Group, dated 4/29/03, and as prowded for in the conditions below. . Streetscape landscaping and foundabon landscaping shall be installed on the site and shall meet the City of Virginia Beach Parbng Lot Foundabon Landscaping Specifications and Standards for street frontage landscaping/foundation screening. . The design and exterior materials of the buildings shall substanbally conform to the submitted photographs entitled, "ALLSAFE SELF STORAGE 1,2, & 3", which have been exhibited to the V~rginia Beach City Council and are on file ~n the Planning Department; however, the port~on of the facades adjacent to Apartment or Res~denbal zoning districts shall consist of spht face block of a neutral, earth tone color rather than the green metal false-door faCade. 4. All roofs facing a pubhc right-of-way shall have architectural grade, green roofing shingles as depicted ~n the photographs referenced above 5. No structures, other than the Office/Residential building, shall be taller than one-stow. 6. Any freestanding sign shall be monument style w~th a brick base and shall be constructed w~th s~milar budding materials and color scheme as the min~-storage buildings 7. No barbed or razor wire shall be installed on the s~te. . If approved by the Board of Zoning Appeals, all fencing visible from the right-of-way shall be black wrought ~ron style as depicted ~n the submitted photographs ~dentifled above. Otherwise, the fence shall comply with Article 3.3 of the City Landscaping Guide D W. Gathng Page 3 of 3 o If approved by the Board of Zoning Appeals, any fencing other than the wrought ~ron style fence shall be as black, vinyl coated chain link. Otherwise, the fence shall comply w~th Arbcle 3 3 of the C~ty Landscaping Guide. 10. All ~ntenor property I~nes shall be vacated prior to the ~ssuance of a building permit 11. No lighbng shall be permitted on exterior walls, adjacent to property zoned Residential or Apartment. A L~ghbng Plan shall be submitted w~th the final s~te plan rewew 12. The un~ts shall not be used for office purposes, band rehearsals, residenbal dwellings, or any other purpose not consistent w~th the storage of goods Attachments: Staff Rewew D~sclosure Statement Planmng Commission M~nutes Locabon Map Recommended Action: Staff recommends approval Planmng Commission recommends approval City Manager: ~ l/~_~~1~i0~submitting Department/Agency: Planmng Department D.W. GATLING, INC. /# 7 & 8 ~ July 9, 2003 General Information: APPLICATION L09-210-REZ-2003 NUMBER: L09-210-CUP-2003 REQUEST: ADDRESS: 7) Change of Zoning District Classification from R-5D Resldenbal District to B-2 Community Bus~ness D~strict. 8) Cond~bonal Use Permit for mini warehouse. Property located on the west s~de of Oceana Boulevard at Allyson Court (private street), north of Prosperity Road, south of Beacons Reach Drive. Map L-9 Not -c .3cole D. H~. Gatlin AG-2 Crpm - See Apphcation Planning Commission Agenda July 9, 2003 D.W. GATLING, INC. / # 7 & 8 Page 1 GPIN: ELECTION DISTRICT: SITE SIZE. STAFF PLANNER: PURPOSE: 24154883170000 24154854920000 24154863810000 6 - BEACH 4 8 acres Carolyn A.K. Smith To rezone a 0.36 acre residentially zoned parcel to B-2 and to combine it with adjacent properties already zoned B-2 (4.44 acres) and construct and operate a m~n~ warehouse facility on the total 4.80 acres. Major Issues: · Degree to which the proposal ~s compabble w~th surrounding res~denbally zoned parcels and th~s AICUZ surrounding NAS Oceana. Land Use, Zoning, and Site Characteristics: Existinq Land Use and Zoning The property currently zoned R-5D Res~denbal D~strict has a s~ngle-fam~ly dwelling on ~t that w~ll be removed. The adjacent B-2 Community Bus~ness District parcels are vacant. Surroundinq Land Use and Zoninq North: South: East: · AG-2 Agricultural District, R-5D Res~denbal D~strict · AG-2 Agricultural District · Oceana Boulevard / B-2 Community Bus~ness Planning Commission Agenda July 9, 2003 D.W. GATLING, INC. / # 7 & 8 Page 2 West: D~stnct · Duplex dwelling units / R-5D Res~denbal D~stnct Zoning and Land Use Statistics With Existing Zoning: On the 0.36 acres of residentially zoned property, dwelhng un~ts could be constructed on the s~te consistent w~th the prows~ons of the Zoning Ordinance, ~nclud~ng a s~ngle-famdy dwelling and perhaps a duplex On the 4.44 acres of B-2 property, uses consistent w~th the Zoning Ordinance could operate by right and Condibonal Use Permits could be pursued, such as this request for a mmv-warehouse, as ~nd~cated within C~ty ordinances. With Proposed Zoning: The enbre 4.8 acres can only be developed w~th m~ni storage facility as specifically stated w~th~n the Conditional Zoning Agreement. Zoninq History The 0 36 acre s~te currently zoned R-5D Res~denbal D~stnct was originally zoned B-2 Community Business District prior 1992. Requests for a subdivision variance (no d~rect access to a pubhc street) and to change the zoning to the current residential d~strict was approved by City Council on April 14, 1992. No other acbvity ~n the vicinity has occurred w~th~n the last decade Air Installation Compatible Use Zone (AICUZ) The s~te ~s in an AICUZ of greater than 75dB Ldn surrounding NAS Oceana. The Navy has reviewed th~s apphcabon and has commented that the use is compabble with a~rfield operabons. Public Facilities and Services Water and Sewer Both City water and sewer are not available to th~s s~te Health Department approval ~s required for the installabon of a private well and for septic systems Private gnnder Planning Commission Agenda J u ly 9, 2003 D.W. GATLING, INC. / # 7 & 8 Page 3 pumps and force mains may be an option for the developer. A more detailed rewew of the proposal will be performed at s~te plan rewew Transportation Master Transportation Plan (MTP) / Capital Improvement Program (CIP): Oceana Boulevard in the v~c~n~ty of this applicabon ~s a four (4) lane arterial roadway. This roadway has recently been upgraded, no add~bonal ~mprovements are proposed within the CIP Traffic Calculations: Street Name Present Present Generated Traffic Volume Capacity Ex~sbng Land Use ~'- 2,640 Oceana Boulevard 25,560 ADT ~ 27,400 ADT ~ Proposed Land Use 3_ 179 Average Dady Trips 2 as defined by ex~st~ng B-2 commercial zoning and res~denbal zoning 3 as defined by proposed m~n~-warehouse operation Public Safety Police: Fire and Rescue: The applicant ~s encouraged to contact and work w~th the Crime Prevenbon Office within the Police Department for crime prevention techniques and Cnme Prevention Through Enwronmental Design (CPTED)concepts and strategies as they pertain to this s~te. Fire hydrant must be w~thm 400 feet of commercial structure. Private fire hydrants must be maintained annually as ~dentified ~n N.F P.A 25. M~n~mum fire lane w~dth must not be less than 18 feet and under some cond~bons, greater w~dth w~ll be required The storage un~ts must be used only for storage of non- hazardous goods. Portable or auxd~ary power supplies wdl not be allowed on site for tenant use. The un,ts must not be used Planning Commission Agenda July 9, 2003 D.W. GATLING, INC. / # 7 & 8 Page 4 for office purposes, band rehearsals, residenbal dwelhngs, or any other purpose not consistent w~th the storage of goods Gates must provide for F~re Department access using the Knox or Supra key system Electrically operated gates must have a fadsafe operabon in the event of a power failure Secunty for ~ngress and egress must be approved by the Rre Marshal so that F~re Department access is not obstructed. Comprehensive Plan This property ~s located ~n an area planned for retail, service, office and other compabble uses within commercIal centers serving surrounding neighborhoods and communibes A small port,on of the site ~s also recommended for Suburban Residential development w~th medium to h~gh dens~bes. Proffers PROFFER # 1 Staff Evaluation: The Property shall be used only as m~n~-warehouses, as that term ~s defined ~n the CZO, together w~th all uses accessory and ~ncidental thereto including, but not limited to, a residence for the property manager. Th/s proffer is acceptable. It limits the uses specihcally to mira-storage. Thls proffer necessitates that/f th~s use were abandoned, any other use that would seek to locate on th~s property would need to gain approval from the C~ty Council for a modification to this proffer agreement. Summary of Proposal Proposal · The applicant ~s proposing to rezone a 0.36 acre s~te from R-5D Residential D~stnct to B-2 Community D~stnct and to combine th~s s~te w~th two adjacent B-2 zoned properties totahng 4.44 acres for development of a m~n~-storage facility. The total Planning Commission Agenda July 9, 2003 D.W. GATLING, INC. / # 7 & 8 Page 5 acreage of the project ~s 4.80 acres A Condibonal Use Permit is required for the m~ni warehouse facility. Site Desiqn · The site plan depicts five (5) self-storage buildings with approximately 114,000 square feet of storage available and a 960 square foot office. · Four (4) parking spaces are proposed for the facd~ty · A stormwater management pond (an extended dry detenbon facility) is shown on the rear of the property that w~ll capture and treat stormwater from this s~te. Vehicular and Pedestrian Access · A s~ngle entrance ~s proposed for ingress/egress to Oceana Boulevard. Architectural Desiqn · The submitted photographs are of an exisbng m~n~-storage facihty owned and operated by the apphcant. The primary exterior budding material of all fa(;ades facing the r~ght-of-way ~s a red brick. The roof material depicted ~s an architectural grade, green roofing shingle. White vinyl ~s used for architectural accents and for trim around the roof. · Wrought iron style fencing ~s depicted where fencing ~s visible from the right-of-way. All other fencing ~s proposed as black, vinyl coated chain link La ndscape and Open Space The required Category VI landscaping is depicted around the per~meter of the property The buffer w~dth ~ncreases from 6 feet to15 feet along the property I~nes adjacent to residential zoning, as required by the C~ty Zoning Ordinance. · An ornamental fence ~s proposed w~th streetscape landscaping along Oceana Boulevard · Foundabon landscaping ~s required along the facades that face Oceana Boulevard. A cond~bon has been recommended to emphasize th~s requirement. Planning Commission Agenda July 9, 2003 D.W. GATLING, INC. / # 7 & 8 Page 6 · A v~nyl coated black chain link fence surrounds the stormwater management facility ~n the rear of the s~te, w,th Leyland cypress trees proposed outside of the fence. Evaluation of Request Th~s request for a Condibonal Rezoning for an 0.36 acre parcel currently zoned R-5D Residential D~strict to Condibonal B-2 Commumty Business District and combine ~t w~th adjacent properties already zoned B-2 (4.44 acres) and the Conditional Use Permit request to construct and operate a mini-warehouse facility on these 4.80 acres ~s recommended for approval subject to the cond~bons hsted below. The applicant has constructed and is operating several other such storage facihbes throughout the City and plans to develop th~s s~te using s~mHar design elements and building materials. The cond~bons recommended below, including the submitted photographs of other similar facH~bes developed by the applicant, help to ensure that the final development wdl be compatible with the surrounding properbes as well as w~th NAS Oceana a~rfleld operabons. Conditions . The parcels shall be developed and landscaped as depicted on the concept plan entitled, "AIIsafe Self Storage, Oceana Boulevard, Preliminary Site Plan," prepared by The Spectra Group, dated 4/29/03, and as prowded for ~n the cond,t,ons below. Streetscape landscaping and foundation landscaping shall be ~nstalled on the s~te and shall meet the C~ty of V~rginia Beach Parking Lot Foundation Landscaping Spec~flcabons and Standards for street frontage landscaping/foundation screening. , The design and exterior materials of the buildings shall substanbally conform to the submttted photographs enbtled, "ALLSAFE SELF STORAGE 1,2, & 3", which have been exhibited to the V~rg~n~a Beach C~ty Council and are on file ~n the Planning Department, however, the port~on of the facades adjacent to Apartment or Residenbal zoning d~stncts shall consist of spht face block of a neutral, earth tone color rather than the green metal false-door fa~:ade. 4. All roofs facing a pubhc right-of-way shall have architectural grade, green roofing shingles as depicted ~n the photographs referenced above. Planning Commission Agenda July 9, 2003 D.W. GATLING, INC. / # 7 & 8 Page 7 5 No structures, other than the Office/Residential building, shall be taller than one- stow. . Any freestanding sign shall be monument style w~th a brick base and shall be constructed with s~milar budding materials and color scheme as the m~n~-storage buddings. 7 No barbed or razor wire shall be installed on the site. , If approved by the Board of Zoning Appeals, all fencing visible from the right-of- way shall be black wrought ~ron style as depicted in the submitted photographs ~denbfied above. Otherwise, the fence shall comply w~th Arbcle 3 3 of the City Landscaping Guide. . If approved by the Board of Zoning Appeals, any fencing other than the wrought ~ron style fence shall be as black, wnyl coated chain hnk. Otherwise, the fence shall comply with Article 3.3 of the City Landscaping Guide. 10.AIl ~ntenor property I~nes shall be vacated prior to the ~ssuance of a building permit. 11. No lighting shall be permitted on exterior walls, adjacent to property zoned Residential or Apartment A Lighbng Plan shall be submitted w~th the final s~te plan review 12.The un~ts shall not be used for office purposes, band rehearsals, res~denbal dwellings, or any other purpose not consistent w~th the storage of goods. NOTE: Further conditions may be required during the administration of applicable City Ordinances. Plans submitted with this rezoning application may require revision during detailed site plan review to meet all applicable City Codes. Planning Commission Agenda July 9, 2003 D.W. GATLING, INC. / # 7 & 8 Page 8 // Planning Commission Agenda July 9, 2003 D.W. GATLING, INC. / # 7 & 8 Page 9 ALLSAFE SELF STORAGE 616 S IvflLITARY I-D,VY VIRGINIA BEACH. VIRGINIA Planning Commission Agenda July 9, 2003 D.W. GATLING, INC. / # 7 & 8 Page 10 Altsafe Self Storage Proposed vi~, of properO, from rear Planning Commission Agenda July 9, 2003 D.W. GATLING, INC. / # 7 & 8 Page 11 Proposed view of property.' Propoa'ed view of property from side yard Planning Commission Agenda July 9, 2003 D.W. GATLING, INC. / # 7 & 8 Page 12 Planning Commission Agenda July 9, 2003 D.W. GATLING, INC. / # 7 & 8 Page 13 Z~ Z Z i i i i iii i i .... ii ii ~1111 ' ii i Applicant's Name ~.w. Gatlznq, Inc. List All Current Property Owners: Alton & .D.Q¥gthy Bulter Bernard wl±llam Hodges,II APPLICANT DISCLOSURE If the apphcant ~s a CORPORATION, list all officers of the Corporation below (Attach l~st if necessary) Davzd W. Gatllnq President Donna M. Gatllng Vice President Secretary If the applicant is a PARTNERSHIP, FIRM, or other UNINCORPORATED ORGANIZATION, list all members or partners ~n the organization below: (Attach i~st ~f necessary) l-1 Check here rf the apphcant is NOT a corporation, partnership, firm, or other . umncorporated orgamzat~on. ff the applicant is not the current owner of the property, complete the Property Owner Disclosure section below: PROPERTY OWNER DISCLOSURE If the property owner ~s a CORPORATION, I;st all officers of the Corporat;on below' (Attach l/st if necessary) If the property owner is a PARTNERSHIP, FIRM, or other UNINCORPORATED ORGANIZATION, list all members or partners in the organlzabon below' (Attach list ~f necessary) E"I Check here if the property owner is NOT a corporation, partnership, firm, or other unincorporated organizabon CERTIFICATION. I certify that the information contained herein is true and accurate. "' ' .Z~)~v/~ ~,.-', C Signature Print Name ii iiii ,i i i iiii _ i ii1! i i · , ii iii i i i1,~, ,, ,,, i~ , Conditional Use Permit Applicabon Planning Commission Agenda July 9, 2003 D.W. GATLING, INC. / # 7 & 8 Page 14 Item #7 & 8 D.W Gathng, Inc. Change of Zoning District Classification Conditional Use Permit West side of Ocean Boulevard District 6 Beach July 9, 2003 CONSENT Charhe Salle': Next items are Items #7 & 8, D.W. Gathng, Inc. And, that's a Change of Zoning from R-D5 Residential to B-2 Community Business District and a Conditional Use Permit for mini warehouses. And the property is located on the west side of Oceana Boulevard and Alison Court. Jeff Maynard: Good afternoon Mr Salle' and members of the Planning Commission. For the record, my name is Jeff Maynard. I'm an attorney also with the law firm of Troutman Saunders. My business address is 222 Central Park Avenue, Suite 2000, Virginia Beach And, I'm here on behalf of D.W. Gathng, Inc. Charhe Salle': And there are 12 conditions associated with the Conditional Use Permit, which has some new language. Have you seen that language? Jeff Maynard: My client and I have both reviewed them, and they are acceptable. Charhe Salle'. Thank you Is there any opposition to this application? Jeff Maynard. Thanks. Charhe Salle'. I would move that we approve the consent agenda Item #7 & 8 with 12 conditions. Ronald Rlpley' So we have a motion to approve the consent agenda as read by Charhe Salle'. Do I have a second? I have a second by Gene Crabtree. Prior to the vote, I'd like for the benefit of the public and the benefit of the readers of this verbatim, I've asked a number of the Commissioners to comment on the position of the Commission on these items And Joe, I think you're going to take these. Joe Strange: The next is Item #7 & 8. This is a proposal to rezone a .36 acre residentially zoned parcel to B-2 and to combine it with adjacent properties already zoned B-2, which is 4.44 acres. The two of them together will represent a 4.88-acre site here. And, what they want to do is to put a mini-warehouse facility here Now the .36 residential home could be put on there, at this point, and the 4 44 acres is already zoned so by right they can actually put the mini storage there Because this is in an AICUZ zone that's greater than 75 decibels, because this is a low traffic generator, the applicant has agreed to 12 Item #7 & 8 D.W. Gathng, Inc Page 2 conditions that will ensure the quality and the compatibility of this project in the area, we recommend that it be a consent item. Ronald Pdpley: Joe, thank you very much. I hope the public has a better understanding as to why we we're recommending these consent items, and that's the purpose of this discussion We do have a motion on the floor, and I believe we have a second. I would hke to call for the vote. So all ~n favor of the motion raise your hand. Opposed? AYE 9 NAY 0 ABS 0 ABSENT 2 ANDERSON AYE CRABTREE AYE DIN AYE HORSLEY KATSIAS AYE KNIGHT AYE MILLER AYE RIPLEY AYE SALLE' AYE STRANGE AYE WOOD ABSENT ABSENT Ronald Rlpley: The motion carries FO~M NO P S lB City of Virginia Beach INTER-OFFICE CORRESPONDENCE In Reply Refer To Our File No. DF-5758 DATE: August 14, 2003 TO: Leslie L. Lilley _ DEPT: City Attorney FROM: B. Kay Wilson~ DEPT: City Attorney Conditional Zoning Application D.W. Gatling, Inc., et als The above-referenced conditional zoning application is scheduled to be heard by the City Council on August 26, 2003. I have reviewed the subject proffer agreement, dated June 9, 2003, and have determined it to be legally sufficient and in proper legal form. A copy of the agreement is attached. Please feel free to call me if you have any questions or wish to discuss this matter further. BKW Enclosure Prepared By/Return To: Troutman Sanders LLP 222 Central Park Avenue, Suite 2000 Virginia Beach, Virginia 23462 AGREEMENT THIS AGREEMENT is made this ~/'k day of June, 2003, by and among Alton M. and Dorothy O. BUTLER ("Butler" to be indexed as a grantor); Bernard William HEDGES, H ("I-Iodges" to be indexed as a grantor); D.W. GATI,ENG, INC., a Virginia corporation ("Gatling' to be indexed as a grantor), and the CITY OF VIRGINIA. BEACH, a municipal corporation of the Commonwealth of Virginia ("Grantee") WITNESSETH: WHEREAS, Butler, Hedges and Gatling ("Grantors") have initiated an amendment to the Zoning Map of the City of Virginia Beach, Virginia, by petition addressed to the Grantee, so as to change the existing zoning classifications from B-2 and R-5D, to B-2 Conditional on certain property which contains approximately 5 168 acres, more or less, located in the Beach District of the City of XC~rginia Beach, Virginia, which property is more particularly described in the attached Exhibit A (hereinafter the "Property"); and WHEREAS, Butler and Hedges are the current owners of the Property, and Gatling is the contract-purchaser of the Property, and WHEREAS, the Grantee's policy is to provide only for the orderly development of land for various purposes, including mixed use purposes, through zoning and other land development legislation, and WHEREAS, the Grantors acknowledge that the competing and sometimes incompatible uses conflict, and that in order to permit differing uses on and in the area of the subject Property and at the same time to recognize the effects of the change and the need for various types of uses, certain reasonable conditions governing the use of the Property for the protection of the GPUNs: 2415-48-8317, 2415-48-5492, 2415-48-6381 community that are not generally applicable to land similarly zoned B-2 needed to cope with the situation to which the Grantors' rezoning application gives rise; and WltEREAS, the Grantors have voluntarily proffered in writing in advance of and prior to the public hearing before the Grantee, as part of the proposed conditional amendment to the Zoning Map, in addition to the regulations provided for in the existing B-2 zoning district by the existing City's Zoning Ordinance ("CZO"), the following reasonable conditions related to the physical developmem, operation and use of the Property to be adopted as a part of said amendment to the new Zoning Map relative to the Property, all of which have a reasonable relation to the rezoning and the need for which is generated by the rezoning; and WltE~AS, said conditions having been proffered by the Grantors and allowed and accepted by the Grantee as part of the amendment to the Zoning Ordinance, such conditions shall continue in full force and effect until a subsequent amendment changes the zoning on the Property covered by such conditions; provided, however, that such conditions shall continue despite a subsequent amendment if the subsequent amendment is part of the comprehensive implementation of a new or substantially revised zoning ordinance, unless, notwithstanding the foregoing, these conditions are amended or varied by written instrument recorded in the Clerk's Office of the Circuit Court of the City of Virginia Beach, Virginia and executed by the record owner of the subject Property at the time of recordation of such instrument, provided, further, that said instrument is consented to by the Grantee in writing as evidenced by a certified copy of ordinance or resolution adopted by the governing body of the Grantee, after a public heating before the Grantee advertised pursuant to the provisions of the Code of Virginia, Section 15.2-2204, which said ordinance or resolution shall be recorded along with said instrument as conclusive evidence of such consent. NOW TItEREFORE, the Grantors, for themselves, their successors, assigns, grantees, and other successors in title or interest, voluntarily and without any requirement by or exaction from the Grantee or its governing body and without any element of compulsion of qtfid Pm quo for zoning, rezoning, site plan, building permit or subdivision approval, hereby make the following declaration of conditions and restrictions which shall restrict and govern the physical development, operation and use of the Property and hereby covenant and agree that these proffers (collectively, the "Proffers") shall constitute covenants running with the said Property, which shall be binding upon the Property and upon all parties and persons claiming under or through the Grantors, their heirs, personal representatives, assigns, grantees and other successors in interest or rifle, namely' 1. The Property shall be used only as mini warehouses, as that term is defined in the CZO, together with all uses accessory and incidental thereto including, but not limited to, a residence for the property manager 2 Further conditions mandated by applicable development ordinances may be required by the Grantee during detailed site plan and/or subdivision review and administration of applicable City Codes by all cognizant City agencies and departments to meet all applicable City Code requirements. All references hereinabove to zoning districts and to regulations applicable thereto, refer to the City Zoning Ordinance of the City of Virginia Beach, Virginia, in force as of the date the conditional zoning amendment is approved by the Grantee. The Grantors covenant and agree that (1) the Zoning Administrator of the City of Virginia Beach, Virginia shall be vested with all necessary authority on behalf of the governing body of the City of Virginia Beach, Virginia to administer and enforce the foregoing conditions, including (i) the ordering in writing of the remedying of any noncompliance with such conditions, and (ii) the bringing of legal action or suit to ensure compliance with such conditions, including mandatory or prohibitory injunction, abatement, damages or other appropriate action, suit or proceedings; (2) the failure to meet all conditions shall constitute cause to deny the issuance of any of the required building or occupancy permits as may be appropriate, (3) if aggrieved by any decision of the Zoning Administrator made pursuant to the provisions of the City Code, the CZO or this Agreement, the Grantors shall petition the governing body for the review thereof prior to instituting proceedings in court, and (4) the zomg Map shall show by an appropriate symbol on the map the existence of conditions attaching to the zoning of the subject Property on the map and that the ordinance and the conditions may be made readily available and accessible for public inspection in the office of the Zoning Administrator and in the Planning Department and that they shall be recorded in the Clerk's Office of the Circuit Court of the City of Virginia Beach, Virginia and indexed in the name of the Grantors and Grantee. Upon acquisition of the Property by Gatling, Gatling shall succeed to all fights and obligations of the "Grantors" under this Agreement, and Butler and Hodges shall have no further rights or obligations of a "Grantor" under this Agreement (but will retain all fights and obligations as the "Grantee") This Agreement may be signed in one or more counterparts which, upon execution by all the parties, shall constitute a single agreement IN WITNESS WHEREOF, the foregoing Agreement is executed by the parties of the date first written above GRANTOR: Alton M. Butler COMMONWEALTH OF VIRGINL~ COUNTY/CITY OF //]'ar~/~ , to-wit. · The foregoing instrument was acknowledged before me this ~} 9~ day of ~~ , 2003, by Alton M Butler and Dorothy O Butler, who are either personally known td/me or produced V~ "l>v'~ers ~Y_ew~e~, as identification Notary Public My Commission Expires 6,-,5 6'O~ GRANTOR: Bernard W~lliam H~dges,-II:t- ~1: / COMMONWEALTH OF VIRGINIA COUNTY/CITY OF ~.-k~na~,: ~.c.~, to-wit: The foregoing instrument was acknowledged before me this ~ day of ,:~O__, 2003, by Bernard William Hodges, II, who is either personally known to me ~r Produe(~l as identification Notary Public My Commission Expires GRANTOR: D.W. GATI,ING, INC., a Virginia corporation David W. Cratling President ,/ COMMONWEALTH OF VIRGINIA COUNTY/CITY OFj/f~.~/rJ./~-~~-~, to-wit' The foregoing instrument was acknowledged before me this t day of ,2003, by David W. Cratling, acting in his capacity as President of D W. Gatling, In~c., a Virginia corporation, who is either personally known to me or produced _/~/~ ~./~/! ~f__/c~ as identification. My Commission Ex~ires Exhibit A Description of Property The property subject to this Agreement constitute the three parcels described below: PARCEL ONE: ALL THAT certain piece or parcel of land, situate in the City of Virginia Beach, Virginia, and shown and designated as "B 4.87 Ac." on a plat entitled "Property of Thomas B. Bunting, located near Dam Neck in Princess Anne Co., Va." which plat is duly recorded in the Clerk's Office of the Circuit Court of the City of Virginia Beach, Virginia, in Map Book 52, at page 12. SAVE AND EXCEPT the property conveyed in the following two conveyances: (1) deed from Alton M. Butler, et ux. to Dayton J. Eller, et vir., dated October 25, 1965 and recorded in the Clerk's Office aforesaid in Deed Book 933, page 313; (2) deed from Alton M. Butler, et ux., to Dayton J. Eller, et vir., dated October 25, 1965 and duly recorded in the Clerk's Office aforesaid in Deed Book 933, page 316. LESS AND EXCEPT that portion of property conveyed to the Commonwealth of Virginia from Thomas B. Bunting and Annie L. Bunting by deed dated March 22, 1944 and recorded in Deed Book 223 at page 536 and shown on Map Book 52, at page 12. LESS AND EXCEPT that portion of property conveyed to the City of Virginia Beach from Alton M. Butler and Dorothy O. Butler by deed dated September 18, 1998 and recorded in Deed Book 3971 at page 1984 and shown on Map Book 270, at page 26. PARCEL TWO: ALL THAT certain lot, piece or parcel of land, with the buildings and improvements thereon, numbered 1416 Allyson Court, situate in the City of Virginia Beach, Virginia, and being a part of "B" 4.76 Ac.", as shown on that certain plat entitled "Property of Thomas B. Bunting located near Dam Neck in Princess Anne County, Va. which plat is duly recorded in the Clerk's Office of the Circuit Court of the City of Virginia Beach, Vir~nia, in Map Book 52, at page 12, and being more particularly bounded and described as follows: BEGINNING at a point in the dividing line between tracts A and B, as shown on said plat, distant 425 feet west from the west side of Oceana Boulevard (State Route 615 - formerly Courthouse Road), as shown on said plat; thence along said dividing line S. 72 degrees 15' W. 150 feet to a point; thence N. 17 degrees 25' W. 108 feet to a point; thence N. 72 degrees 35' E. 150 feet to a point; thence S. 17 degrees 25' E. 107.5 feet to the point of beginning. TOGETHER WITH the right of ingress and egress over a strip of land 50 feet in width lying adjacent to the northern line of the above described parcel and extending in an Easterly direction in a straight line to the Western side of Oceana Boulevard (State Rome 615 - formerly Courthouse Road). PARCEL TffREE: ALL THAT certain lot, piece or parcel of land, with the building and improvements thereon, situate, lying and being numbered "Parcel B-I", Subdivision of 1408 Allyson Court (M.B. 223, pg. 40), Princess Anne Borough, Virginia Beach, VA and formerly being a part of"B" 4.6 AC., as shown on that certain plat entitled "Property of Thomas B. Bunting, located near Dam Neck on Princess Anne County, Virginia" which plat is duly recorded in the Clerk's Office of the Circuit Court of the City of Virginia Beach, Virginia in Map Book 52, page 12, and being more particularly bounded and described as follows: Beginning at a point in the dividing line between tracts A and B, shown on said plat, distant 275 feet west fi.om the west side of Oceana Boulevard (State Route 615 - formerly Courthouse Road) as shown on said pat thence along said dividing line S. 72 degrees 15" W. 150 feet to a point; thence N. 17 degrees 25' W. more or less 107.5 feet to a point; thence N. 72 degrees 35' more or less E. 160 feet more or less to the point ofbe~nning. TOGETHER WITH the fight of ingress and egress over a strip of land 50 feet in width lying adjacent to the northern line of the above described parcel and extending in an Easterly direction in a straight line to the Western side of Oceana Boulevard (State Route 615 - formerly Courthouse Road). Map L 11,12 Exxon Mobil CUP - Gas Station ZONING HISTORY 1 03/25/03 - REZONING from B-2 (Community Business) to Conditional A- 18 (Apartment) and B-2 (Community Business) - Granted 2. 12/05/00- CONDITIONAL USE PERMIT (Auto Service Establishment)- Granted 3. 11/07/63 - REZONING from RS (Residential single famdy) to CL (L~mlted Commercial) - Granted 4. 04~08~97 - REZONING from AG-l/2 (Agricultural) to R-10 (Residential) - Granted 5 06~09~80 - REZONING from B-2 (Community Business) to R-6 (Res~denbal) - Granted CITY OF VIRGINIA BEACH AGENDA ITEM I IIII ! ITEM: Exxon Mobil Corporation, Conditional Use Permit (fuel sales with a convenience store) MEETING DATE: August 26, 2003 Background: An Ordinance upon Application of Exxon Mobil Corporation for a Conditional Use Permit for an automobile service station and car wash on property located on the southeast corner of Nimmo Parkway and Upton Dnve (GPIN 2414357392). DISTRICT 7- PRINCESS ANNE Considerations: The subject site, designated as Parcel E6, is part of a larger parcel that was recently rezoned on March 25, 2003 for an apartment community (Parcel E1 ) with two commercial outparcels (Parcels E6 and E7). The proffers recorded as part of that rezon~ng govern the subject s~te. The s~te plan shows a 3,910 square foot convenience store facing Upton Drive. There ~s a canopy w~th e~ght gas pump ~slands in front of the convenience store. A 1,152 square foot automatic car wash budding is located on the south s~de of the convenience store. The proposed site plan and budding elevabons provided by the apphcant meet the ~ntent of the proffer agreement governing the development on the subject s~te. The building materials, color scheme and landscaping plan have been well coordinated with the proposed apartment community to the south as required by the proffers Sufficient buffenng and screening have been prowded for the proposed apartment community. The access shown on the s~te plan for this use is also well coordinated with the surrounding major roadways. The use will complement the ex~sbng commercial uses ~n the regional shopping center located on the west side of Upton Dr~ve. Staff recommended approval, subject to the attached conditions. There was opposibon to the request. Recommendations: The Planning Commission passed a mobon by a recorded vote of 10-0 to approve this request with the following conditions. 1 The s~te shall be developed ~n substanbal accordance w~th the s~te plan entitled "Preliminary Landscape Plan for ExxonMob~l" dated June 24, Exxon Mobd Page 2 of 3 2. 2003 and prepared by Spectra Group. A copy of th~s s~te plan has been exhibited to C~ty Councd and ~s on file ~n the Planning Department The buddings and canopy shall be developed in substantial accordance w~th the architectural elevations entitled "Exterior Elevation (convenience store, car wash, and canopy), On the Run/ExxonMobd, V~rg~n~a Beach, VA" dated April 29, 2003 and prepared by Wd Partners A copy of the elevations has been exhibited to C~ty Council and ~s on file ~n the Planning Department. 3 A b~ke rack shall be prowded on-s~te. . . . . o . No outdoor vending machines, ~ce boxes, or d~splay of merchandise shall be allowed. Windows shall not be t~nted in order to allow for surveillance opportunities both from within and from outside the building. No s~gnage ~n excess of a total of four (4) square feet of the entire glass area of the exterior wall nor any neon s~gns or accents shall be permitted ~n or on the w~ndows and/or doors of the convenience store. S~gnage on the site ~s limited to the building sign, the canopy signage and stripe referenced below, and one free-standing monument style sign w~th a brick base matching the color of the convenience store build~ng No other s~gns shall be ~nstalled on any other wall area of the building or on the roof of the budding, on the canopy, on hghting poles, or any other port~on of the site The only signage for the canopy shall be a stripe and bus~ness logo on the s~de of the canopy facing Upton Dr~ve, there shall be no other s~gnage on the canopy. All rooftop equipment, such as heating, ventilation, and air cond~t~omng un~ts shall be concealed from typical street level wew. All ground level building mechanical equipment shall be screened ~n accordance with Section 245 (e) of the Zoning Ordinance. The trash enclosure shall be screened w~th a sohd wall to match the main building and shall include evergreen shrubs hawng good screening capabilities, no less than three (3) feet in height at the time of planting, spaced ~n accordance w~th the C~ty's Landscaping, Screening and Buffering Specifications and Standards, and maintained at all t~mes ~n good condition at a m~n~mum height not lower than the wall. All hght~ng on the s~te shall be consistent with those standards recommended by the Illumination Engineering Society of North America (IESNA). A photometric I~ght~ng plan ~nd~cat~ng the number and types of hght~ng w~ll be submitted as part of the formal s~te plan submission for review by the Police Department to determine Exxon Mobd Page 3 of 3 consistency w~th Crime Prevenbon Through Environmental Design (CPTED) pnnc~ples and pracbces. L~ghbng shall be ~nstalled and operated as shown on the approved plan Canopy I~ghbng shall consist of flush mounted fixtures on the ceiling of the canopy. All I~ghtmg shall be d~rected ~nward and downward w~th~n the s~te so as to ehm~nate glare onto a adjacent properbes and rights-of-ways 10. Operabng hours for the automabc car wash shall be I~m~ted to 6.00 am to 10:00 pm, seven days a week. · Attachments: Staff Rewew D~sclosure Statement Planning Commission Minutes Locabon Map Recommended Action: Staff recommends approval Planmng Commission recommends approval. Submitting Department/Agency: Planmng Department (~J~..~ City M a n ag er~ [(--- ,'~~(~'//,- EXXON MOBIL CORPORATION /# 16 July 9, 2003 General Information: APPLICATION NUMBER: L11-211 -CUP-2003 REQUEST: Condlbonal Use Permit for an automobile service stabon. ADDRESS: Southeast corner of N~mmo Parkway and Upton Drive ~'"p ~' ",'~ Exxon Mobil CUP - Gas Statton GPIN: ELECTION DISTRICT: 24143573920000 7 - PRINCESS ANNE SITE SIZE 1.46 acres Planning Commission Agenda July 9, 2003 EXXON MOBIL CORPORATION / # 16 Page 1 STAFF PLANNER: Barbara Duke PURPOSE: The applicant desires to construct a convenience store with gas pumps and an automabc car wash on th~s s~te. Major Issues: · Degree to which the proposal ~s ~n substantial conformance with the recorded proffer agreement for th~s site Degree to which the use ~s compabble w~th the surrounding area Land Use, Zoning, and Site Characteristics: Existing Land Use and Zoning The s~te ~s a vacant grassy area and ~s zoned Conditional B-2 Community Bus~ness D~stnct Surroundinq Land Use and Zoninq North: South' East: West: · N~mmo Parkway · Proposed Apartment Community/Condibonal A-18 Apartment District · Proposed Access road for Apartment Community/Cond~bonal A-18 Apartment D~stnct · Upton Drive Zoninq History The following zoning actions have occurred on the subject s~te. Planning Commission Agenda July 9, 2003 EXXON MOBIL CORPORATION / # 16 Page 2 11/07/63 - REZONING from RS (Residential single family) to CL (Limited Commercial) - Granted 03/25/03 - REZONING from B-2 (Community Bus,ness) to Conditional A-18 (Apartment) and B-2 (Community Business)- Granted Air Installation Compatible Use Zone (AICUZ) The site ~s ~n an AICUZ of 65-70 dB Ldn surrounding NAS Oceana. Public Facilities and Services Water and Sewer Th~s development must connect to City water and sewer. There ~s a 12 ~nch water hne ~n N~mmo Parkway and a 10 inch water hne in Upton Drive fronting th~s site. There ~s an 8 inch sanitary sewer line across Upton Drive south of the site. Transportation Upton Drive fronbng the west side of th~s s~te Js a four lane d~v~ded urban arterial, as designated on the Master Transportation Plan (100DBS). The roadway was just recently completed as a four lane d~v~ded urban arterial under a cost parbcipabon agreement w~th adjoining development. Nimmo Parkway fronbng the north side of the site is designated on the Master Transportabon Plan as a 100 foot w~de d~wded roadway with controlled access. The porbon of the road between General Booth Boulevard and Upton Drive was constructed as a four lane d~vided controlled access roadway by the developers of the adjacent Wal- Mart and regional shopping center. The current Capital Improvement Program calls for the conbnuation of th~s roadway as a two lane minor arterial from Upton Drive east to Atwoodtown Road. CIP 2-151 - Sandbndqe Corridor Improvements (Partial) includes funding for the City's share of the two-lane roadway. The CIP states that construcbon of the roadway wdl be pursued wa a cost part~c~pabon agreement. On May 27, 2003 the Master Transportabon Plan was amended to extend N~mmo Parkway east of Atwoodtown Road to Sandbndge Road. Th~s port~on of the roadway ~s designated as a 100 foot wide divided right-of-way w~th controlled access, bikeway and aesthetic overlay. Traffic Calculations: Planning Commission Agenda July 9, 2003 EXXON MOBIL CORPORATION / # 16 Page 3 Street Name Present Present " 'Generated Traffic Volume Capacity Upton Drwe 11,394 ADT 14,300 ADT ~ Ex~stmg Land Use z- 647 ADT N~mmo Parkway 8,803 ADT 17,300 ADT .Pro. posed Land Use 3_ 2,445 ADT Average Dady Trips as defined by Commercial Retail uses as defined by Retad plus gas pumps and car wash Public Safety Police: The apphcant ~s encouraged to contact and work with the Crime Prevenbon Office within the Police Department for crime prevenbon techniques and Crime Prevention Through Enwronmental Design (CPTED) concepts and strategies as they pertain to th~s s~te. Fire and Rescue: F~re code permits will be required at bme of occupancy. F~re hydrant must be w~thm 400 feet of commercial structure. Storage of hazardous, flammable or combustible materials on- s~te must be w~thin the scope of the V~rginia Statew~de F~re Prevenbon Code and NFPA Operator must supply on-s~te and hazard mibgabon kit for fuel spdls. Comprehensive Plan The subject s~te is part of the area designated as "Opportunity S~te #1" w~thm the Courthouse-Sandbr~dge Planning area. Th~s area is recommended for "development as a well planned arrangement and appropriate m~x of res~denbal, commercial, employment, open space and other uses." Summary of Proposal Proposal · The subject site, designated as Parcel E6, is part of a larger parcel that was recently rezoned on March 25, 2003 for an apartment community (Parcel E1 ) with two commercial outparcels (Parcels E6 and E7). The proffer agreement for th~s s~te ~s recorded as Instrument Number 200304080053552 w~th the Planning Commission Agenda July 9, 2003 EXXON MOBIL CORPORATION / # 16 Page 4 Clerk of Court's office. Proffer 7 in the recorded agreement governs the subject site Proffer 7 states: "The architectural design of the commercial buildings constructed within Parcels E6 and E7, when constructed, shall be compatible w~th the design of the buddings constructed, or planned design of buildings that may be constructed pursuant to Secbon 6 above, on Parcel El. The predominant colors may vary but shall be earth tones. Accent colors of ~nd~vidual choice are permitted" The detailed s~te plan for the apartment community ~s currently under review and the apartment buildings are in the final design stages. The site plan and buildings on the subject site have been reviewed by the owner/developer of the apartment community and several details have been coordinated w~th the apartment plans. These details are noted below Site Desiqn The s~te plan shows a 3,910 square foot convenience store facing Upton Drive. There ~s a canopy w~th eight gas pump islands m front of the convenience store. A 1,152 square foot automabc car wash building ~s located on the south s~de of the convenience store All of the structures on the s~te meet the setbacks required by the zoning ordinance for this use. Vehicular and Pedestrian Access The ma~n entrance to the site will be from Upton Drive A dedicated right turn lane wdl be provided for th~s entrance. · The site wdl not have direct access to N~mmo Parkway. There w~ll be access to the s~te via the private entrance road that is planned for the apartment Planning Commission Agenda July 9, 2003 EXXON MOBIL CORPORATION / # 16 Page 5 community. The private entrance road ahgns w~th a planned median break on N~mmo Parkway A five-foot w~de s~dewalk w~th~n the right-of-way ~s proposed for the south s~de of N~mmo Parkway fronting this s~te. There ~s a ten-foot w~de b~ke path w~th~n the right-of-way proposed for the east s~de of Upton Dr~ve fronbng this s~te. The proposed s~te plan shows a pedestrian pathway connecbon from the proposed s~dewalk on Nimmo Parkway to the front of the convenience store. The on-s~te s~dewalk will be delineated across the drive aisle w~th stamped asphalt In front of the store, the s~dewaik w~ll consist of brick pavers or stamped concrete, simdar to the pawng details used ~n the Red M~II Commons shopping center on the west s~de of Upton Drive and the pawng detads proposed for the apartment community. The on-site pathway/sidewalk is shown to be e~ght feet ~n w~dth. Architectural Design · The convenience store, car wash building and canopy supports w~ll all be constructed w~th the same materials. The elevations show that the primary building material ~s brick ~n two color vanabons. The colors are earth tones that wdl complement the colors proposed for the apartment community. The elevabons also show architectural shingle hip roofs on all structures. Oa.~ Exterior Elevation ~ortMobl[ ~rg~ma Beach, V~ Planning Commission Agenda July 9, 2003 EXXON MOBIL CORPORATION / # 16 Page 6 The car wash and convenience store have a wide band of off-wh~te trim under the roofhne and corner detads that add interest to the facades and that w~ll be ~n well with the architectural style proposed for the apartment community and the ex~sbng Red Mill Commons shopping center on the west side of Upton Drive. Landscape and Open Space · The site plan shows a continuous, undulabng berm along the perimeter roadways. Th~s berm is shown within a 15-foot wide on-s~te green space and will vary ~n height between 1 to 4 feet. Trees will be planted on the berm in accordance with the requirements for street front landscaping and ~n accordance w~th the berm planting proposed for the apartment community to the south. The specific tree type will be coordinated dunng detaded s~te plan review The s~te plan shows the required interior parking lot and foundabon landscaping. Add~bonal landscaped area is shown between the convenience store and car wash. Category VI screening ~s required along the southern and eastern property hnes where the s~te ~s adjacent to the A-18 Apartment D~stnct The plantings w~thm these buffer areas vary from the category standards, but have been coordinated w~th the proposed landscaping for the apartment community so that there will be a seamless transibon from one use to the other. No fence is shown along the southern property line as there are garage buildings proposed ~n this area that wdl act to separate and buffer the commercial use from the apartment commumty. Evaluation of Request The request for a convenience store w~th gas pumps and an automatic car wash is acceptable The proposed s~te plan and building elevabons prowded by the applicant meet the ~ntent of the proffer agreement governing the development on the subject site. The building materials, color scheme and landscaping plan have been well coordinated w~th the proposed apartment community to the south as required by the proffers. Sufficient buffenng and screening have been prowded for the proposed apartment community. The access shown on the s~te plan for th~s use is also well coordinated with the surrounding major roadways. The use will complement the existing commercial uses in the regional shopping center located on the west s~de of Upton Drive The Planning staff recommends that the request for a Condibonal Use Permit for a Planning Commission Agenda July 9, 2003 EXXON MOBIL CORPORATION / # 16 Page 7 convenience store w~th gas pumps and an automat,c car wash be approved with the following condibons Conditions I o The site shall be developed in substanbal accordance w~th the s~te plan enbtled "Preliminary Landscape Plan for ExxonMobd" dated June 24, 2003 and prepared by Spectra Group. A copy of th~s site plan has been exhibited to C~ty Council and is on file in the Planning Department . The buildings and canopy shall be developed ~n substanbal accordance with the architectural elevabons entitled "Exterior Elevabon (convenience store, car wash, and canopy), On the Run/ExxonMobil, V~rginia Beach, VA" dated April 29, 2003 and prepared by Wd Partners A copy of the elevabons has been exhibited to C~ty Councd and ~s on file ~n the Planning Department. 3 A bike rack shall be provided on-s~te. 4. No outdoor vending machines, ice boxes, or d~splay of merchandise shall be allowed. Windows shall not be bnted ~n order to allow for survedlance opportunities both from w~thm and from outside the budding. No s~gnage in excess of a total of four (4) square feet of the enbre glass area of the exterior wall nor any neon s~gns or accents shall be permitted ~n or on the w~ndows and/or doors of the convenience store. . S~gnage on the site ~s hm~ted to the building s~gn, the canopy signage and stripe referenced below, and one free-standing monument style s~gn w~th a brick base match,ng the color of the convenience store building. No other s~gns shall be ~nstalled on any other wall area of the building or on the roof of the budding, on the canopy, on hghbng poles, or any other port~on of the site. The only s~gnage for the canopy shall be a stripe and business logo on the side of the canopy facing Upton Drive; there shall be no other signage on the canopy. . All rooftop equipment, such as heahng, ventilation, and air conditioning units shall be concealed from typical street level wew. All ground level building mechanical equipment shall be screened in accordance w~th Secbon 245 (e) of the Zoning Ordinance. Planning Commission Agenda July 9, 2003 EXXON MOBIL CORPORATION / # 16 Page 8 . 10. The trash enclosure shall be screened w~th a sohd wall to match the ma~n building and shall include evergreen shrubs hawng good screening capabdibes, no less than three (3) feet in height at the bme of planbng, spaced in accordance w~th the City's Landscaping, Screening and Buffenng Specifications and Standards, and maintained at all bmes ~n good condibon at a m~n~mum height not lower than the wall All hghting on the s~te shall be consistent with those standards recommended by the Illumination Engineering Society of North America (IESNA). A photometric hghting plan ~nd~catmg the number and types of hghbng w~ll be submitted as part of the formal s~te plan submission for rewew by the Pohce Department to determine consistency with Crime Prevenbon Through Enwronmental Design (CPTED) pnnciples and practices. L~ghbng shall be installed and operated as shown on the approved plan. Canopy hghting shall consist of flush mounted fixtures on the ceding of the canopy. All hghbng shall be d~rected inward and downward w~th~n the site so as to eliminate glare onto a adjacent properbes and rights-of-ways Operating hours for the automabc car wash shall be limited to 6:00 am to 10:00 pm, seven days a week. NOTE: Further conditions may be required during the administration of applicable City Ordinances. The site plan submitted with this conditional use permit may require revision during detailed site plan review to meet all applicable City Codes. Conditional use permits must be activated within 12 months of City Council approval See Section 220(g) of the City Zoning Ordinance for further information. Planning Commission Agenda July 9, 2003 EXXON MOBIL CORPORATION / # 16 Page 9 Planning Commission Agenda July 9, 2003 EXXON MOBIL CORPORATION / # 16 Page 10 Planning Commission Agenda July 9, 2003 EXXON MOBIL CORPORATION / # 16 Page 11 o I Planning Commission Agenda July 9, 2003 EXXON MOBIL CORPORATION / # 16 Page 12 J Planning Commission Agenda July 9, 2003 EXXON MOBIL CORPORATION / # 16 Page 13 Planning Commission Agenda July 9, 2003 EXXON MOBIL CORPORATION / # 16 Page 14 DISCLOSURE STATEME Applicant's Name Exxon Mobil Corporation List All Current Property Owners: .Lakeside/Sw~n..s.o.n Npte, LLC ,. . APPLICANT DISCLOSURE If the apphcant is a CORPORATION, hst all officers of the Corporation below: (Attach hst rf necessary) See Attached L~st If the applicant is a PARTNERSHIP, FIRM, or other UNINCORPORATED ORGANIZATION, hst all members or partners ~n the organ~zabon below: (Attach i/st if necessary) Check here ~f the applicant ~s NOT a corporation, partnership, firm, or other unincorporated organization If the applicant is not the current owner of the property, complete the Property Owner Disclosure section below' PROPERTY OWNER DISCLOSURE If the property owner ~s a CORPORATION, list all officers of the Corporation below: (Attach list if necessary) If the property owner is a PARTNERSHIP, FIRM, or other UNINCORPORATED ORGANIZATION, list all members or partners in the organization below' (Attach list if necessary) See Attached L~st i-! Check here if the property owner ~s NOT a corporation, partnership, firm, or other unincorporated orgamzabon CERTIFICATION: i certify that the information contained herein is true and accurate. Apphcant's S~gnature Exxo~ .Mq~bil ~orporat~on Name. ROBERT G.. CASERTA Title: AGENT AND .ATTORNEY-;[N-FACT Property Owner's S~gnature: Lakes~de/Swlrtsen Nd~ LLC T~tle: ~?~ ~ Conditional Use Permit Application Page 8 of 12 Planning Commission Agenda July 9, 2003 EXXON MOBIL CORPORATION / # 16 Page 15 POWER OF ATTO .RN'EY KNOW ALL MIEN BY Tt~SE PRESENTS: THAT EXXON MOBIL CORPORATION, a New Jersey corporation, having an office in Fairfax, Virginia, - -acting b~y. and-thmugtuH: tC-C.~amer~ as. President ofigxxomMobil FueLs Marketing Company, a division of Ex, on Mobil Corporation (hereinafter called ~Company'9 and as a Vice President of Exxon Mobil Corporation, does hereby nomir~te, constitute, and appoint the following employees of sa~d Company. IK. W. Hilchey, Engineer~2vlaintenance & Repair Manager J. B. Bonnema, Maintenance & l~pair Program lvlanager Robert (3. Casernh Ccrnxtru~on Project Coordinator R. M. Maclmaes, Construction Project Coordinator --.Van ~ Coristructior~Proj~ct Coordinator Mario D. $istos, Conslroction Project Coordinator David N. Oq'oole, Con.struction Project Coordinator Aliyah A. Hardy, Implementation Plarmmg Analyst Gary D. G~son, Maintenance & Repair Field Manager As its tree and lawful Agent and Attorney-in-Fact to execute and deliver for and in the name and on behalf of Exxon Mobil Corl>oralion, and in connexion with thc basiness and ~ of said Company, mmcnts arid_documents of any and every_nature, including, but not by wl3z of limitation, insmunents pledging the credit of Exxon Mobil Corporation, bonds of indemnity, other indemnities, guaranties, affida~ts, permits, -licenses, applicanons for peamaits-andqicense,s, other governmental documents, bids, collective bargmmg --- agreements, other contracts, deeds of conveyance, encumbrances, leases, releases, discharges of mortgages or deeds of trust, assignments, transfers of leasehold estates and/or other interests in real and/or personal property, Certificates of Capital Improvement, and similar instruments or documents, and any other instrument or cloeurnent as may be required or desired in Ibc conduct of the business of said Company, m connection with the acquisition, sale, development, maintenance, repair, and/or construction of retail and service station outlets or additions, modifications or enhancements thereto. Each person in said Company may exercise the power and authority herein granted, delegated and invested, in any particular and appropriate transaction or matter, eilher as an Attorney-in-Fact of Exxon Mobil Corporation or as an official of said Company. Any action taken as authorized trader this Power of Attorney shall be an act ofF. xxon Mobil Corporation and binding upon it. This Incumbent Power of Attorney is effective immediately and shall continue through October 1, 2005. ':--~?~'APPROVED AND EXI~~TttlS~/.~_ dayof October, 2002. ~XXON MOna. com, oa~T~ON ?t~ I-L ~ Cm~- ~ident of E~o~obil Fuels ~kefing Comfy ~ a Vice ~cs~d~t of ~on Mobil Co~m~on Planning Commission Agenda July 9, 2003 EXXON MOBIL CORPORATION / # 16 Page 16 Ex.xo~a Mobil Corporauon Powe. r of Attorney Page Two United States of Amexica Commonwe. alth County of Fairfax This m~umemt was acknowledged before mt on October _~ 2002, by H. IL Cramer, President, ExxonlVIobiI l:u¢Is Mark~-'dn§ Company a~d Vice President of Exxon Mobil Corporation, a New Jersey corporation, on behalf of ~aid corporation. My commission expire~: 4/30/2003 ~otary Seal): Planning Commission Agenda July 9, 2003 EXXON MOBIL CORPORATION / # 16 Page 17 MEMBERS OF LAKES IDE/SWIN SON NOTE. LLC . Lakeside Construction Corporation Eric C Anderson - Premdent Patnc~a M Windsor- Secretary;Treasurer Lucy F. Reasor - Chaim~an of the Board C~thm R Swmson Lucy F Rcasor #6040359 v l Planning Commission Agenda July 9, 2003 EXXON MOBIL CORPORATION / # 16 Page 18 Item # 16 Exxon Mobil Corporation Conditional Use Penmt Southeast comer of N~mmo Parkway and Upton Drive D~stnct 7 Pnncess Anne July 9, 2003 REGULAR Ronald R~pley: Now we'll lead ~nto the remmmng Items on the agenda. We have four ~tems, and Mr. Miller, would you please call the first ~tem. Robert M~ller: The first item ~s Item #16, Exxon Mobd Corporation Paul Gerhardt: Indulge me one second so I can set some materials up. Let's proceed while he's doing that. I'm a httle short on t~me Mr Chmrman, members of the Commission. My name ~s Paul Gerhardt. My residence address is Alexander Place, Wdhamsburg. My is Kaufman & Canoles, 2101 Parks Avenue. I'm appeanng today on behalf of the Use Permit apphcant Exxon Mobile Corporation, the contract purchaser of the property that ~s the subject ofth~s request. I have with me today representatives of the apphcant Mr Greg Ruff and the project engineer Mr. Chris Taylor. Also, I note that the Red M~ll developers representative Eric Anderson is also ~n the audience. The applicant ~s seeking your approval of ~ts request for a Conditional Use Permit to allow for the construction and operation of a carwash and to provide gasohne service. To use a reference as I make my presentation I've gnven each of you a notebook w~th some tabs on some pages Cons~denng th~s request, the first question that may come to m~nd is why ~s this a good project for th~s location9 Although zoned for commercial use for almost 40 years, ~n a span of four years th~s commercial corridor of Red Mill has gone from empty space to one of the most thriving mixed use corridors of the C~ty In your notebook, you w~ll see a copy of the overall Red M~ll Commons Plan for the area north of Elson Green Avenue, the applicant's proposed s~te being ~dentffied as parcel E6 on that plan. This mixed use has been further enhanced bv the removal from the stretch of Upton Drive from Pnncess Anne Road to N~mmo P~rkway of two large commercial tracks on the same s~de of Upton as the site, and the replacement of a range of housing types from apartments, and townhouse condomlmums. These residential uses are blending with some of the most sought after retml merchants ~n the country. As stated in the Planning Staff report, the site was formerly B-2 Unconditional. In fact, this site as I smd before has been B-2 s~nce 1963. In connection w~th the rezomng of the adjacent apartment s~te fi.om B-2 to Residential the s~te became B-2 w~th proffers. These proffers reqmre that whatever commercial project is built on this site be ora design and have landscaping to blend w~th the planned department project. The apphcant has gone well beyond th~s by creating detmled plans consistent w~th designs and features of some of those highly controlled and design conscience commumtles ~n V~rglma. The apphcant has worked very closely on th~s process w~th C~ty Planmng staffand the developer of the adjacent shopping center parcel and apartments to ensure that the proffers are met and create a positive plan for the s~te. Under Tab 3 of the notebooks, you w~ll see a copy of the Item # 16 Exxon Mobil Corporation Page 2 proposed plan, which I have the board up here showing building layout, buffers and landscaped areas. The applicant wanted to be sure that he created a site and buildings that were on scale with the surrounding community and allowed for easy access and exiting so as not to hamper traffic flows. As you can see the entrances right in, right out off of Upton Drive and also right In, right out on Nlmmo Parkway, and they have a shared access with the apartment complex and the parcel below, which IS at this point undeveloped In addition to the existing proffers on this site by using the Use Permit process and with the conditions that it can impose, the City has a unique opportunity to even more tightly control the development of this site to ensure that it fitS with the surrounding community. Many other B-2 commercial uses that would be allowed by right don't provide this level of Involvement. A good example of the positive results of City Involvement is that while working with the Planning Staff, a number of enhancements and alterations were suggested and made to the plans and designs such as working with the apartment developer and the planning appropriate landscaping for the road to the rear of the property. That's the entrance road coming in to serve the apartment projects. They're going to put matching landscaping on the other side of the road. Apparently this is enhanced landscaping. You also see on the site plan and on the staff report that there is substantial landscaping including landscaping berms along Upton and Nimmo to match what would go in for the apartment complex that was previously approved. You should also be able to see on the site plan a 12-foot area on Upton Drive to be dedicated for a multi-use path In addition to a path. There is a turn lane that would be constructed to alleviate any traffic concerns of turning cars. The applicant also wants to encourage foot traffic by adding features like the multi-use path, walkways, bike racks, and stamped concrete walkways. One reason for that is a store like this IS not just a carwash, not just a gas station, It'S really a multiple or variety of businesses, and the product of the design efforts are an all brick building with limited slgnage There's no slgnage on the building other than the front. Matching brick canopy supports, a roof style canopy and sidewalks with pavers. Specially stamped concrete to enhance pedestrian feel. The elevations that you have In your package as well as the site plan are all incorporated in the conditions of this Use Permit and very httle IS left to chance on this development. It's pretty tightly designed. Another question you may have on what the site lighting IS going to be like? Condition number nine, I think you have the conditions outlined in Tab 7 of your books. Condition number nine addresses lighting. The applicant's have agreed to some very carefully controlled lighting standards. For example, the lighting fixtures on the canopies have to be fully recessed. They can't be drop down fixtures that project glare out Into the roadways. Also, through use of state of the art cutoff hghtlng fixtures, the lighting through the site or the yard lighting has to be directed inward and downward and not toward any nelghbonng properties. The hght source will be required to be shielded. By way of example the lighting will be very similar to the new 7-eleven except the side or yard lighting will be even more subdued because we use a cutoff fixtures. And, I don't think 7-eleven uses those. They drop down a bit. Prior to proceeding with development, a lighting plan will be required to be submitted to the City. And, I also understand from the City Planning that the City doesn't have lighting standards at this point so the applicant has worked very closely w~th the City to try to come up w~th those standards in the conditions. In addition to lighting controls, the surrounding neighborhoods will be, in the future, buffered by the Item # 16 Exxon Mobil Corporation Page 3 developer's development of the three-acre parcel H across Nlmmo Parkway. You have some aerials under Tab 1. I think you can get a v~ew of the surrounding neighborhood and also the Parcel "H" Another question may come to mind is what about traffic? The site's current zomng allows a variety of uses without obtalmng Conditional Use Permits. Those general commercial uses could be such thing as fast food, which might be considered traffic generators. Unless a gas retailer can use a fairly aggressive strategy, they are typically what they call a traffic xnterceptor as opposed to a generator. Because of substantial road construction under taken by the project developer, projected traffic volume as shown on the Planning staff report to be well within the present road capacity. In addition, as I stated before, we're going to have a dedication of some roadways and turn lanes Now another question you may have, and this is very important obviously, is how this Use as opposed to some other B-2 use impacts the surrounding community. Gas stations are an ~nteresnng subject of observation of human behavior Often people are generally opposed to new gas stations. They just don't want gas stations. Based on their perceptions gathered from the worst of the lot, which are the ones that have too much light and too many signs, general environmental concerns, traffic concerns among other reasons. Then you look at what people generally like about gas stations They like them well lit, easily ~dentffied by sxgns so you can maneuver ~n traffic. You don't have to search for the entrance. They want them to sell items like fresh foods, gourmet coffee and gas. They also want to be conveniently located in their routine travel corridor or in their immediate community This site is well suited for this. If you just look at the apartment site and consider that you have 227 potential residents that don't even have to go out onto the roadway to enter this site. It certainly will reduce drive time, start and stops and traffic and create a small community commercial use. Unhke a fast food restaurants or other s~ngle type of users the applicant also provides a range of services and products for the surrounding neighborhood. One th~ng Exxon ~s particularly sensitive about is environmental concerns. They have a number of controls in place and redundancies for controlling spdlage and other ~tems, and are very careful about that. Th~s ~s a final note. We have reviewed all of the conditions, and we feel we meet all those conditions and we can proceed on that basis I have one slight exception if you can indulge me one minute. Condition number six requires that the typical Exxon red stripe on canopy be reduced by three quarters on each side of the canopy. It's our understanding that this condition was inserted because there is apparently a movement with the newly approved gas station such as a 7-eleven that they try to cut the size of the stripe. What we would like to do if possible ~s have you consider allowing us to have a stripe only on the business side of project. Only on Upton and ehminate the stripe on the remaining three sides. I put under Tab 8 some proposed language ~f you wanted to look at that. Anyway, I see my time is up and I'll be happy to answer any questions that you may have Ronald Pdpley: Any questions of Mr. Gerhardt? Yes, Wall. William D~n: Can you repeat what you just said about the striping. Paul Gerhardt: Yes sir. I was blinking. This is the canopy that is proposed. What the City's conditions have done on all three sides is this be striped to about here, to reduce it by three quarters on each side. What we like to propose instead is eliminate it from the Item #16 Exxon Mobil Corporation Page 4 Nlmmo Parkway sides so neighbors aren't looking at it there. Eliminating it from the back I don't think anybody sees it there anyway. And, eliminating it from the apartment side, but only have it on the Upton side which faces the commercial and have a full stripe on that side. William Din: Is that a change in one of the conditions here? Paul Gerhardt: Yes sir. That's in Tab 8. I've shown the existing condition that was proposed, and then the second one I've shown what we would like to change it to. Ronald Rlpley: So you're suggesting under this Tab 8 is the way you would like to see it like the way you have it up here? Paul Gerhardt: Just on the business side of Upton. I think they're allowed one more, Exxon logo, but if you went without suggesting the end side, you would only have the logo on one of them and no stripe. The back I don't think has a logo and the other side will not have a logo I think by the conditions anyway, we're only allowed two logos. Ronald Pdpley: So you'll just have a logo on two sides? Paul Gerhardt: Yes. Ronald Pdpley: Partial stripes on the other side. Paul Gerhardt: Yes. That's my understanding. I think Planning can confirm that. Ronald Pdpley: IS that correct? Stephen White. Yes. The idea here is service station Conditional Use Permits that we've been reviewing in the last year, year and a half, the stripes on these canopies we've been cutting them back and limiting them to a portion of the canopy, 25 percent generally of that length of the respective side whether that be all sides or just two of the sides or three of the sides. Ronald Pdpley: Okay. Are there any other questions about the stripe? I have a question. It mentions, and I don't really see it on the site plan, is the pedestrian walkways that you were refernng too? Paul Gerhardt: Yes sir. Ronald Rlpley: Can you show us those please? And some you mentioned would be stamped concrete. Is that what you said? Paul Gerhardt: Yes Stamp concrete and also some pavers I beheve. First you have the multi-use paths, which will extend from the apartment project coming down. That's this 12-foot dedication. You come down I believe they're going to have a sidewalk constructed. I beheve the City is doing that along Nimmo There is a walkway that will Item # 16 Exxon Mobil Corporation Page 5 have pavers. Trying to match what's going on with the shopping center coming across. We've extended that with stamped concrete across the front of the store Ronald Pdpley. Is there a traffic light at that intersection or is there one proposed? Paul Gerhardt. At the intersection for the apartment entrance? Ronald Ripley' No, the intersection of Upton and Nlmmo. Paul Gerhardt: I believe there is a traffic light. Ronald R~pley. I believe that was the topic of our discussion. We discussed this when the apartments came before us We just wanted to make sure there was a safe way for pedestrians to get over to the retail side. The land across the street, the three-acre or so commercial that you indicated would possibly be a buffer in the future, do you have any future plans for that? Your application only deals w~th this. Paul Gerhardt: No. I would have to defer to Mr. Anderson on that question. I know that he tells me that we had initially wanted that slte that's on Mobile, but they were reluctant to deal with us because they wanted it as a buffer type use, less intense use. Ronald Pdpley: Buffer being that the residents around the lake looking across the lake seeing maybe something that is more buffered than a service station. Paul Gerhardt. Yes. They pushed us on the landscaping as well on Nlmmo Parkway to ensure they matched the apartments, and we provide some shielding there as well. Ronald Pdpley: Okay. Does anybody else have any questions of Mr. Gerhardt? We don't have anything for the moment. We do have opposition. Robert Miller: Eric Hemmings Eric Hemmings' Good afternoon, ladies and gentlemen of Planning Council. My name is Eric Hemmings and I am here today on behalf of the South Shore Estate Civic League and I am an officer of that civic league, and I was drafted into coming here and letting you know that we do have an opposition to this project, if you're not familiar with South Shore Estate Civic League On the overhead or if you could look at the aerial, that's actually the neighborhood that's on the lake. Ronald Ripley. There's a pointer right there if you will? Eric Hemmings' Over here~ Ronald Rlpley' See that little black thing. That's a little laser. Just pick it right up if you don't m~nd Push the button Item # 16 Exxon Mobil Corporation Page 6 Eric Hemmings' The lake would be right in here. It doesn't show very well. I think this is the last parcel that you were just discussing right now. Ronald Rlpley: Right. Eric Hemmings: I mean the lake comes right up against lt. And, I beheve that each one of these plats is actually going anto the lake. But in general all along here and over into here is our actual civic league. Ronald Ripley: Thank you. Eric Hemmings. Again, just to reiterate. Any questions? This is us right here. And, as you probably know most of this is developed now and comes down to about here. There are mostly houses in here, and I believe the last house is going in right here as we speak. So again just to reiterate our position on behalf of South Shores Estate Civic League, we our opposed to It. If you'll indulge me I have a few concerns, five to be exact that I would like to go through quickly. Ronald Rlpley: Please do Eric Hemmings: The first concern that we would like to discuss and while we do understand the zoning. We do understand that it is a B-2, and that this project that they are proposing does meet all that. In several meetings that we've had with not only our civic league but as well as Red Mill Commons, which is a local one too, we've been reassured that they are looking for some sort of buffer zone between the residential areas and actually Wal-Mart Shopping Center, Red Mill Commons and so forth. So generally our first concern is that we don't really see this project as kind of fulfilhng that. It's kind of the opposite of what we were looking for. We're looking for something, and I notice that Mr. Anderson has even proposed even a child-care center or something to that extent. We are looking for something a httle less flashy. And for us, I think this is kind of on the opposite end of that spectrum. Our second concern is basically that the sheer number of gas stations and convenience stores that we have within two miles and we actually have SlX gas stations and convenience stores. If you could actually picture this one in the middle and kind of going clockwise there's basically a Citgo at Lagomar and Sandbridge There's the brand new 7-eleven that we spoke about just recently at Upton and Sandbrldge. There's a Shell gas station at Elson Green and Sandbndge. There's a 7- eleven at Sandbndge and Pnncess Anne. An Exxon at General Booth and London Bridge and another Citgo at General Booth and Culver Lane, so within a pretty close radius we have plenty to choose from for gas and car washes. Our third concern is obviously the run off and the contamination being on the lake on a daily basis we have residents that do pull all sort of nifty things out of the lake from old tires to dead fish So we do have a lot of concerns with the run off and the contamination. Ronald Rlpley: Mr. Hemmings, I don't mean to interrupt you but you're running out of nme Item # 16 Exxon Mobil Corporation Page 7 Eric Hemmings: Okay. Ronald Rlpley: Do you need much more time~ Eric Hemmings' No, I'm just about done. Ronald Rlpley: Okay. I want you to get your points out, but I want you to be mindful of the time also. Eric Hemmings: And our fourth concern is generally what I have already spoken about. We really didn't see a 24-hour, 7 day a week type of establishment that's filling a buffer area. The last concern is basically ~s that we are concerned with what precedent this will set for the last plot that we talked about at the end of the lake as well as the remaining plot next door to lt. So basically in concluding, our civic league is opposed to it, and we kind of look at the future of our area as one where our kids and so forth can play in clean water and hopefully have some trees and we really don't want this area to become another Virginia Beach Boulevard If you will. So, I thank you for your time Ronald Pdpley: Are there any questions of Mr Hemming? Did the civic league meet as a body and vote on this9 Eric Hemmings: I do believe and I'm the Vice President of our civic league. Our President, I believe had met with Mr. Anderson recently and I think it was in conjunction with Red Mill, a similar neighborhood. I beheve they are here today as well. But we kind of relayed all our concerns forward Ronald Rlpley: Is there anybody else here that's opposed and maybe you all would like to stand up if you agree. You're welcome to do that. Okay Thank you very much Eric Hemmings. Thank you Ronald Pdpley: Is there any other speakers Mr. Miller? Robert Miller: No sir. Ronald Rlpley. We have no other speakers. So, Mr. Gerhardt, would you like to offer any rebuttal? Paul Gerhardt: Just very quickly. We're very consciences of the neighborhood's concerns. In fact, they are our customers. So, we are listening to what they say. We have met with the Red Mill Civic League and will proceed to try to bmld a good project, if it's approved, they hopefully will be supportive As far as lake contamination, Exxon Mobile of all companies are particularly sensitive about adhenng to all storm water management rule and the handhng of their water products and everything else. I don't th~nk that should be a concern. I think about 1300 acres that dumps into that lake, so you got Wal-mart and you got several gas stations, but we are very mindful of that. We don't Item #16 Exxon Mobil Corporation Page 8 want to be blamed for anything having to do with that lake. Anyway, if you have any questions based upon this presentation, I'll be happy to answer them Ronald Rlpley: Are there any other questions? Barry, do you have a question~ Barry Knight' Yeah. Could you be a little more specific on the runoff situation? What BMPs would be in place for any runoff?. Paul Gerhardt: I think they utilize the canal. I really should refer to my engineer on that if I could get him up here to summarize it. Is it alright if I have him come forward? Ronald Rlpley: By all means. Paul Gerhardt: Okay. Chris Taylor: Chris Taylor with the Spectra Group, 563 Central Drive, Virginia Beach. It ~s my understanding, and we haven't done a whole lot of design work It IS my understanding that this site will drain into a previously established BMP. So, there are no proposed BMP's on site. Ronald Pdpley: Is the lake the BMP? Chris Taylor: I believe it is. Robert Miller. No. Chris Taylor: No, it's not? Ronald Rapley: You have knowledge of it Mr. Miller? Is there some other BMP? Paul Gerhardt: I think Mr. Anderson might be able to address that question. Ronald Rapley: Alnght Mr. Anderson, will you please Eric Anderson: Good afternoon. My name is Eric Anderson I'm President of Lakeside Construction Corporation. We developed all of Red Mill Farm It was 850 acres. The lake which we dug is an area wide BMP. It not only serves Red Mill Farms of 850 acres, but it serves over 1300 acres of the whole surrounding area. This gas station would go into a pipe system. Then it would go ~nto a canal system, it then will empty into the lake Then there ~s a weir at the end of the lake which then goes on from there. Ronald Rlpley: Okay. Eric Anderson. Thank you. Ronald Rlpley' Mr Anderson? Is it Mr. Anderson? Item # 16 Exxon Mobil Corporation Page 9 Eric Anderson: Anderson, yes sir. Ronald Pdpley: Mr. Anderson, in your development, did you construct any of that Nlmmo Parkway~ Eric Anderson: Yes sir. Ronald Pdpley: Can you point out what improvements you put in as far as the roadway that's there right now. Eric Anderson: Well, we took Nlmmo Parkway from General Booth Boulevard, which is off the slide and we built Nlmmo Parkway, all four lanes, from General Booth Boulevard to where you can see it says Nlmmo Parkway with a "P". That's where it comes through right to the end of the road. You can see where the end of the road ends right there. Then we took Upton Drive from the Sandbndge intersection We improved the Sandbridge intersection from a City design, improved that for the City and did all the dedications. And took it from Sandbndge Road up to Culver Lane and completed all of that at a cost of $12.5 million dollars. Dedicated the land and the roads free to the City. Ronald Rapley: Okay The reason why I asked is that I noticed that it was mentioned in the write up, and I wasn't sure exactly to what extent to what you put the development structure on the property. But thank you very much Eric Anderson: Thank you. Ronald Pdpley: Yes, Barry. Barry Knight: Mr Anderson? Eric Anderson: Yes sir. Barry Knight. There are two questions that I heard raised, was about the runoff and the BMPs And on that, are you going to have State Department Environmental Oversight on this? Eric Anderson: Yes sir. All the plans will have to go through all of the review. At this point, what we're looking at a Conditional Use Permit once it is approved we then have to go into design And, we have to look at every aspect of any runoff and that's what the engineers will address at that time Yes sir. Barry Knight: Thank you. And, the other one is there has been some concems about buffers within the neighborhood. And, I see some vacant parcels of property once to the east and one to the north over there. And, if you are privy to the information or maybe you own the property, do you know what you have planned for that, which could be a buffer to th~s site? Item #16 Exxon Mobil Corporation Page 10 Eric Anderson If this being the site right here, we have 3.19 acres in this area here. And, we've been under a lot of pressure to sell that piece, and It lSa beautiful p~ece. We developed all of South Shore. The last house and the last lot is right here from South Shore. This strip of land here is all owned by the City of Virginia Beach. Our property line goes across here, which is the 3.19 acres. Having that piece, it's a beautiful piece. It overlooks the lake, and there are beautiful homes that we developed in the South Shore area When we dug the BMP, which was a borrow p~t at the time, It'S approximately 50 acres, 60 feet deep. We got over two million yards of sand m there that we use for municipal projects and everything else. We then went in and bulkheaded the whole lake and put a mile and half ofbulkheadlng in before anybody built in there so they have fully bulk headed lots We then put a weir on the end so that takes care of the flow situation. We have this piece here, which is the Exxon piece. There's a lane right here that will be constructed. Then there will be another piece right and that is zoned B-2. This is Walgreens right here. We have Outback Steak House. We have Bank of America, Sonics, Chill's and Wendy's. They're all existing with the Bank of America being built right now. We want to use this area here, the 3 19 acres as a buffer. We are very cognizant of the fact that South Shore Estates is in this area. We want to buffer lt. We don't want a very intense use on that three-acres. We want to construct something there that would buffer any site whatsoever from the neighborhood to either the Exxon p~ece adjoining It or the whole shopping center. Because as you can see where there homes are in this area there site line is definitely right straight on across here and that is a very key piece. It is also on Nlmmo Parkway and as we know it's been on the Master Highway Plan now to extend Nlmmo Parkway at least down to Atwoodtown, and I believe it's in the CIP if I'm not mistaken. What happens to it there is up to the political wings, and I couldn't tell you anything more than that but being that it is going to be extended from what I understand there's a lot of pressure for a beautiful piece of land, three-acres on water and zoned B-2. Barry Knight: What about east of the s~te? The parcel just east9 Eric Anderson: East of where9 Barry Knight: Take anght, a little blt to the right. Eric Anderson: Here? Barry Knight: Right there. Eric Anderson: We have one more parcel. There's a B-2 parcel. There's a lane and this is the apartments that have been approved by Planning Commission and Council within the last three or four months. And, we will construct and own this area We're talking about some of the nicest apartment complexes in the C~ty of Virginia Beach. It's a very upscale neighborhood We don't want to put a Use that would hurt our investment. We own the shopping center It's a $60 million shopping center. We have a $25 million apartment complex. We still own another 26 acres south of Elson Green The last thing we want to do is put some piece of junk in there and hurt our own Investment. And, so that's why when Exxon Mobil came to us and they said we love to be here to the drive to Item # 16 Exxon Mobil Corporation Page 11 work. I don't want to speak for Exxon but they all want "lets get into our cars, go there, stop for our coffee, stop for our gas, go to work and that's the go to work side. We said no, we don't want it next to the lake. We don't want to be in that neighborhood and we pushed it down. So, we said this comer would be more appropriate so that the neighborhood wouldn't be affected and once something is constructed on that three-acre piece it would virtually block out any view of any home. Barry Knight. Thank you The point I was trying to get is, and I understand that you developed all that property and those apartments that you have in there, you're right they are beautiful And, the concern of the neighborhood is a buffer zone in there so if in fact, this does pass today and pass City Council, I think you'll be heavily scrutinized on what is on these adjoining two parcels to be very umntrus~ve Uses of B-2. Eric Anderson: That's right And that ~s what we're saving out that three-acres. We know that the three-acres is a buffer area We want good neighbors to the apartments that will enhance our apartments because we have a large amount of money wrapped up in it. And that is a key piece here. You're actually correct. That's the "H" parcel. Barry Knight: Thank you. Eric Anderson: Thank you. Ronald Pdpley: Yes, Joe Strange and then Kathy. Joseph Strange: On the south end of Sandbndge Boulevard. Eric Anderson: Sandbndge? This is Elson Green right here. Joseph Strange: I'm sorry I mlsspoke myself. Eric Anderson: That's alnght. Joseph Strange: Sandoval Boulevard9 Eric Anderson: Sandoval Boulevard right here° Joseph Strange: Yeah right there. Sandoval? Where is the last residential lot on the south end of that? Is that a residential lot there? Eric Anderson: There's one being constructed right here. Joseph Strange: Okay Eric Anderson: Right now Probably the last house, I would say would be near the "S" because the City right-of-way is in there. The City did not own any right-of-way Once we built this road, it ended here and the City did not own any further right-of-way all the Item # 16 Exxon Mobd Corporation Page 12 way down to Lagomar but about a year half ago, we went ahead and deeded all the necessary properties to make Nlmmo parkway possible, and we deeded all the rest of that land to the C~ty of V~rg~ma Beach so that they could bmld Nlmmo Parkway. Joseph Strange: R~ght there where the "P" ~s on the parkway. What ~s that right in back of it? Eric Anderson: Th~s ~s a canal right here Joseph Strange: That's a canal. Eric Anderson: There's a bridge. It's a water and sewer hne and ~t's above grade And, there all on power bends. And, there's a sewer line and a waterhne that feeds down to Sandbndge Joseph Strange. So, that ~s like a dedicated right-of-way? Eric Anderson: That's dedicated to the C~ty. Yes sir Joseph Strange: Okay. Ronald Rlpley: Kathy. Kathy Katslas: Excuse me. The lane between Exxon and the adjacent three-acre parcel right there on Nlmmo Parkway. Eric Anderson: The road or the lane? Kathy Kat~sas: What ~s ~t? A road or a lane? Eric Anderson: N~mmo Parkway is a roadway of four lanes. Kathy Kats~as. No The lane. Eric Anderson: The lane? Kathy Kat~sas: Yes. Eric Anderson: Yes ma'am. It's a lane. It's part of the apartment complex. The apartment complex owns that lane, and we're using that lane for access to the two parcels so that they wall not have d~rect access to N~mmo Parkway. They w~ll have to turn ~nto a lane. Kathy Kats~as: Okay. So, then you're not going to come out on N~mmo Parkway? Eric Anderson. Neither parcel w~ll be allowed out on N~mmo Parkway They have to use the lane. And, that lane ~s bmlt ~n accordance to C~ty design, and ~t will serve the Item #16 Exxon Mobil Corporation Page 13 apartments. What we intend to do and what we're looking at right now is a possibility of putting a gated area at the end of that so only our apartment residents can come In, have the gate come up and they use that and it wouldn't be used a cut through to the Wal-mart lets say but both of these parcels would have to use that same lane. We feel it's good traffic coordination. Kathy KatsIas: Thank you. Ronald Pdpley: Are there any other questions9 Thank you very much Eric Anderson: Thank you. Ronald Ripley: Okay. I think we got all speakers. It's open to the Commission. Yes, Mr. Miller? Robert Miller: Kay, I need to ask you. My firm IS working on the apartments, but we're not working on this project, and I just want clarification. Kay Wilson: You have no interest In this project. Ronald Pdpley: Okay Alnght, it's open for discussion. Does anybody wish to address this application? Gene Crabtree. Eugene Crabtree: I just thought I would say after listening to all the parties, and the opposition as well the builders, I think that all of the basic objecnons on the objection side are being taken care of by the fact that the buffer IS going to be on the north s~de of Nimmo Parkway, and they are going to abide by just about everything that was objectionable to start off with. It appears to me like they have totally covered all of that, so from my stand point of view I'm going to support the application. Ronald Rlpley: Okay. Does anybody else wish to comment'~ Yes, Jan. Janice Anderson: I actually think that Exxon and the development has looked at this parcel and the other parcels around to see, which would be less intrusive They just stated that instead of going by the lake they went across the street and tried not to affect as many neighborhoods and being this close I think It'S a nice facility. They have hmlted the car wash hours so that would have less effect that IS limited But, with the deslg-n for the shrubbery as a buffer around the other projects seem more than adequate to try to protect any sound coming from there. And, I'll be supporting it also Ronald Rlpley: Are there any other comments? Barry. Barry Kmght: Well, I'll just say I intend to agree with Jan and Gene that the objections raised I feel very comfortable about the oversight on the runoff of the site because I know that the City and State are going to have oversight, and when you go through DEQ it's going to very rigorous, and it does look like Mr Anderson's group IS very cog-nlzant Item # 16 Exxon Mobil Corporation Page 14 of the neighborhood. They could have chosen the other side. They d~dn't They appear to want to put a less intrusiveness on both sides of it to buffer the neighborhood. So, I'll be supporting ~t, and I'll make a motion ~fthere ~s no other d~scuss~on to approve ~t and w~th th~s change m con&Uon #6 I talked to Stephen White and with staff. He says that would be acceptable to them so I'll make a motion to approve it w~th the conditions and the change to condition #6 as the apphcant has submitted to us. Ronald R~pley: So, we have a motion to approve with the change as requested by the apphcant to condition #6 That's a motion. Do I have a second~ Jan Anderson has seconded it I want to make a comment to. I do th~nk the staff did a really good job on th~s particular apphcanon as far as and w~th every ~tem ~n here. I was concerned also w~th the neighborhood when I saw the lake ~n relationship to this. I better understand the buffer ~ntent I think that's good. And, I think the applicant, and I was very concerned with the hght~ng, I th~nk the way the hght~ng ~s being handled and directed and the manner ~ts being d~rected I th~nk ~t's very good. I feel it's appropriate for this community that's there, and this will be an ~mportant part of~t, and I think of all the service stations in the C~ty to look as this one will look we would have some very race stations throughout the C~ty. So, I think th~s is going to be probably one of your incest ones, but anyway I do support ~t also. So we have a motion and we do have a second. And, we're ready to vote. Ed Weeden I'll ask each Commissioner indlwdually. Ronald R~pley: Okay. Ed Weeden' Ms. Anderson9 Jamce Anderson: Yes. Ed Weeden: Mr. Crabtree9 Eugene Crabtree: Yes Ed Weeden Mr. D~n? William Din. Yes. Ed Weeden. Ms. Katslas? Kathy Katslas. Yes. Ed Weeden' Mr. Knight~ Barry Knight. Yes. Ed Weeden Mr Miller9 Item # 16 Exxon Mobil Corporation Page 15 Robert Miller Yes Ed Weeden: Mr. Pdpley? Ronald Rlpley: Yes Ed Weeden: Mr Salle'? Charhe Salle': Yes Ed Weeden. Mr. Strange? Joseph Strange: Yes. AYE 9 NAY 0 ANDERSON AYE CRABTREE AYE DIN AYE HORSLEY KATSIAS AYE KNIGHT AYE MILLER AYE RIPLEY AYE SALLE' AYE STRANGE AYE WOOD Ed Weeden: By a vote of 9-0, the motion passes ABS 0 ABSENT 2 ABSENT ABSENT Ronald Rlpley: Thank you very much. Not. CD ,4LLTEL Communications Inc. '~N. ~, A,G~2 AG-2 AG-2 \ ~AG Gpm 2423-39-3051 ZONING HISTORY 1 6~9~98- CONDITIONAL USE PERMIT (communication tower)- Granted 2. 5/19/86- REZONING R-8 Residenbal to PD-H2 (R-5D) Planned Development - Granted 12/17/91 - MODIFICATION TO LAND USE PLAN - Granted 1/24/93 - REZONING PD-H2 Planned Development to P-1 Preservation - Granted 5/10/94 - MODIFICATION TO LAND USE PLAN - Granted 11/28/99 - FLOODPLAIN VARIANCE - Den~ed 1/04/00 - RECONSIDERATION OF FLOODPLAIN VARIANCE - Granted 3. 12117196 - SUBDIVISION VARIANCE - Granted I I II I I I I I I II II I II I CITY OF VIRGINIA BEACH AGENDA ITEM II I I II iii I IIIII ITEM: AIItel, Conditional Use Permit (wireless communication tower) MEETING DATE: August 26, 2003 Background: An Ordinance upon Application of AIItel Communications, Inc. for a Condibonal Use Permit for a communicabons tower on property located at 812 Sandbridge Road (GPIN 2423393051) DISTRICT 7- PRINCESS ANNE Considerations: The apphcant desires to construct a 199 foot tall commun~cabon monopole tower to support three w~reless antennae arrays for I~censed carriers. There ~s an ex~sbng commun~cabon tower on th~s site; however, ~t ~s fully ubhzed, w~th users at 184, 175, 165 and 147 feet. The new tower w~ll provide the 194-foot antenna height necessary to enable AIItel to extend better coverage to the Sandbndge Beach area. The proposed tower w~ll be located ~n an area where it wdl be unobtrusive and w~ll not substanbally detract from aesthebcs or neighborhood character The ex~sbng s~te ~s wooded and several surrounding properbes are also wooded. Several properbes ~n the area are designated conservabon or preservabon areas and there are very few residences that wdl be impacted by this proposal. There ~s one neighboring s~ngle-famdy residence to the north of th~s site. The tower be ws~ble from th~s home; however, the ex~sting wooded vegetabon on the s~te provides a screen. The tower ~s located ~n the southeastern corner of the property and there ~s ~n excess of 500 feet between the tower and this residence. Staff recommended approval, subject to the attached cond~bons. There was opposition to the request. Recommendations: The Planning Commission passed a motion by a recorded vote of 10-0 to approve th~s request with the following conditions. o The project shall be developed as indicated on the submitted s~te plan enbtled "Preliminary S~te Plan, 199' Monopole, AIItell Sandbndge" prepared by K~mley-Horn and Associates, Inc, dated May 2, 2003, and the associated plans and drawings submitted w~th the conditional use permit application These plans have been exhibited to C~ty Councd and are on file ~n the Planning Department AIItel Page 2 of 3 2. The overall height of the proposed towers and antennae shall not exceed 199 feet. 3. All exlsbng trees w~th~n the lease area shall be ~dentifled by type and size on the detailed s~te plan and shall be protected and retained for screening purposes as determined by the Planning Department during detaded plan rewew. The landscaping shown on the landscape plan shall be installed to supplement the natural screening. 4. Land d~sturbance on the s~te shall be hm~ted to the area shown as access and lease area on the site plan . An interference and ~ntermodulation study including proposed channels and the City of Virginia Beach radio channels shall be prowded to the Department of Communlcabons and Informabon Technology (COMIT) for review and approval prior to detaded site plan approval . Unless a waiver ~s obtained from the City of V~rg~nia Beach Department of Communications and Informabon Technology (COMIT), a radio frequency emissions study (RF Study), conducted by a qualified engineer licensed to practice ~n the Commonwealth of Virginia, showing that the ~ntended user(s) w~ll not interfere w~th any City of Virginia Beach emergency commun~cabons fac~hbes, shall be prowded prior to s~te plan approval for all subsequent users o In the event interference w~th any City emergency communlcabons facilities arises from the users of this tower, the user(s) shall take all measures reasonably necessary to correct and ehmmate the interference. If the interference cannot be ehmmated within a reasonable time, the user shall ~mmed~ately cease operabon to the extent necessary to stop the ~nterference. Should the antennae cease to be used for a period of more than one (1) year, the applicant shall remove the antennae and their supporting towers and related equipment ADDED BY PLANNING COMMISSION The tower shall be located approximately 100 feet to the west of the Iocabon shown in the plan referenced ~n Cond~bon 1 ~n a Iocabon to be agreed upon by the applicant and the opposibon. A s~te plan showing the agreed-to Iocabon shall be submitted to the D~rector of Planning prior to the City Council meebng. Condition 9 requires the submission of site plan showing an 'agreed-to location' between the applicant and the adjacent property owner, who opposes this request. Discussions between the applicant and the adjacent property owner have proven fruitless and no site plan has been submitted. Condition 9 has not been satisfied. This application should be referred back to the Planning Commission for further consideration. AIItel Page 3 of 3 Attachments: Letter from Applicant Staff Rewew Disclosure Statement Planning Commission Minutes Locabon Map Recommended Action: Referral to the Planmng Commission for add~bonal cons~derabon Submitting Department/Agency: Planmng Department City Manager: (~~[/-' "%~ Stephen White - planmng 217 wpd Page 1 · John K Taggart, III M E Gibson, Jr Thomas E Albro Patrtc~a D McGraw R Lee Livingston Rachel L Rust LAW OFFICES TREMBLAY & SMITH, LLP P.O. BOX 1585 CHARLOTTESVILLE, VIRGINIA 22902-1585 105-109 E H~gh Street Telephone (434) 977-4455 Facsimile (434) 979-1221 VIA E-MAIL August 7, 2003 Christopher J Rob~nette Peter J Caramams Retired Lloyd T Srn~th, Jr E Gerald Tremblay 1922-2003 Barbara Duke, Planner V~rg~n~a Beach Planning Commission Department of Planning Room 115, Building 2 2405 Courthouse Drive Virginia Beach, VA 23456 RE ALLTEL Communications, Inc Apphcat~on for Conditional Use Permit 199' Collocation Telecommunication Monopole Property of Charles Thomas Cayce GPIN 2423-39-3051 1225 Sandbndge Road ALLTEL's Sandbndge Site Dear Barbara Thank you for meeting with us at Mr Danner's property on August 6, 2003 As you know, the purpose fo the meeting was to find a Iocabon on the Cayce property for the tower acceptable to Mr Danner At the Planning Commission heanng, Mr Danner sa~d he would be satisfied ~f the tower were moved approximately 100' to the west of its proposed location Based on the photo s~mulat~ons I made available to him, mowng the tower 100' would place ~t fairly close to the ex~st~ng Triton tower on the Hells Point Golf Course property m a notch in the trees where ~t would be more v~s~ble than it would ~f we left ~t m the originally proposed location Mr Danner imtlally indicated he wanted to have the tower moved further to the west, and we agreed to do th~s However, at the end of the meeting, Mr Danner told me he would oppose any tower location on the Cayce property Thus, ~t ~s apparent we wdl not be able to secure Mr Danner's agreement to a location for the tower notwithstanding h~s representation made at the Planning Commission heanng Stephen White - planmng 217 wpd Page 2 Due to th~s unexpected turn of events, I must request a deferral of th~s ~tem from the August 26, 2003 C~ty Councd agenda Further, as we d~scussed, s~nce we are not able to sabsfy the Planmng Commission cond~bon relabng to the approval of the location by Mr Danner, ~t wdl be necessary for us to return to the Planning Commission e~ther w~th the originally proposed location or w~th a new location The plan ~s to continue to ~nvesbgate the s~tuat~on to find a location for the tower which has the minimal ~mpact on Mr Danner's wewshed I am wdhng to do th~s even though the ex~st~ng Triton tower ~s already d~rectly ~n Mr Danner's wewshed ~n a good faith effort to present the least possible additional wsual ~ntrus~on I understand you wdl need a revised site plan and any additional supporting documentation 30 days pnor to the date of the Planmng Commission heanng at which we desire to present the apphcahon We will continue to study the s~tuat~on and I w~ll provide you with the necessary mformabon as soon as it is available I understand it wdl not be necessary for me to attend the August 26, 2003 C~ty Councd meeting ~n order to obtain the deferral Please let me know ~f my understanding ~s not correct Thank you for working w~th us and for Staff's continued support of th~s project I am confident we can make ~t work Best personal regards, Very truly yours, M E (D~ck) G~bson, Jr MEG/sp CC Larry B~cklngs Janet Hunter Marry Sdl~aman Alan Gummo Tom Stokes 28\C \MyFdes\DATAV~,lltel\Sandbnclge\plannmg 217 wpd ALLTEL COMMUNICATIONS, INC./# 17 ~ July 9, 2003 General Information: APPLICATION NUMBER: REQUEST: ADDRESS: M13-210-CUP-2003 Cond~bonal Use Permit for commun~cabons tower 812 Sandbndge Road ALLTEL Communications, Inc. / ,/ AG-2 Gpm 2423-39-$051 AG-2 GPIN' ELECTION DISTRICT: 24233930510000 7 - PRINCESS ANNE SITE SIZE 12 7 acres Planning Commission Agenda July 9, 2003 ALLTEL COMMUNICATIONS, INC. / # 17 Page 1 STAFF PLANNER: PURPOSE: Barbara Duke To construct a 199 foot tall communicat,on monopole tower to support three w~reless antennae arrays for hcensed carriers Major Issues: There must be an identified need for service ~n the area and satisfactory evidence that there is a lack of space on suitable ex~st,ng towers, buddings or other structures to locate proposed antenna · The proposed Iocabon of the tower must be unobtrusive and must not substantially detract from aesthebcs or neighborhood character. Land Use, Zoning, and Site C h a racte ri sti cs: Existinq Land Use and Zoning The property is wooded and there are no structures on the property. The zoning on the property ~s AG-I/AG-2 Agricultural District The land elevations on the site are Iow, between 2 and 2.5 feet M.S L, and the entire s~te ~s below the 100-year floodplain elevabon Surroundinq Land Use and Zoninq North: South- East: · S~ngle-famfly home / AG-1 & AG-2 Agricultural D~stnct · Hells Point Golf Course maintenance building and 185 foot tall Communication Tower / AG-1 & AG-2 Agricultural District · Scattered single family homes along Sandbndge Road and several conservation properbes that have been ~ncorporated ~nto the Back Bay National Wildhfe Refuge / AG-1 & AG-2 Planning Commission Agenda July 9, 2003 ALLTEL COMMUNICATIONS, INC./# 17 Page 2 West: · Agricultural D~stnct Ashwlle Bridge Creek borders this property on the western edge and beyond that is Hell's Point Golf Course / PD-H2 (R-5D) Planned Development and P-1 Preservabon D~stnct Zoning History There have been no zomng acbons on the subject s~te. A Cond~bonal Use Permit for a 185 foot commumcation tower was approved on the adjacent s~te to the south ~n 1998. Other zoning acbons ~n the area are noted on the attached zoning history map. Air Installation Compatible Use Zone (AICUZ) The s~te ~s in an AICUZ of less than 65dB Ldn surrounding NAS Oceana. Public Facilities and Services Capital Improvement Proqram Sandbridge Road ~s currently a two lane rural roadway. The Master Transportation Plan was amended by C~ty Council on May 27, 2003 to remove the designabon of 70UBS (70 foot undivided roadway w~th a b~keway and scenic easement) from the port,on of Sandbridge Road east of Atwoodtown Road. Safety ~mprovements to th~s secbon are proposed under the current Capital Improvement Program. Pubhc Works has determined that no additional right-of-way is necessary along the frontage of th~s s~te. Public Safety Police: No comments Fire and Rescue: An all weather road surface must be provided for F~re Department access. Security for ~ngress/egress must be approved by the F~re Marshal so that F~re Department access ~s not obstructed Comprehensive Plan The Comprehensive Plan Map ~denbfles this s~te as a natural resource/conservabon area where land-d~sturbmg acbvibes should be avoided, mibgated, or under certain condibons prohibited. The parcel ~s mostly wooded; therefore, this use would not reduce or negabvely impact producbon agriculture ~n th~s porbon of the c~ty. There is m~n~mal i i Planning Commission Agenda July 9, 2003 ALLTEL COMMUNICATIONS, INC./# 17 Page 3 land disturbance associated with the proposed use. Aesthebcs ~s a consideration ~n locating th~s use. Any tower should not be located toward the front of the property flanking the road, nor should ~t be placed as a focal point on the property An ~deal location for a tower would be in or next to a wooded secbon of property. Site Plan / Conformance with Section 232 The applicant has sufficiently demonstrated the need for the proposed tower and the lack of suitable alternabves The ex~sting commun~cabon tower ~s fully loaded, w~th users at 184, 175, 165 and 147 feet. The new tower w~ll prowde the 194 foot antenna height necessary to enable AIItel to extend better coverage to the Sandbndge Beach area. The proposed tower will be located ~n an area where ~t will be unobtrusive and w~ll not substantially detract from aesthebcs or neighborhood character. The existing s~te ~s wooded and several surrounding properties are also wooded. Several properbes in the area are designated conservation or preservabon areas and there are very few residences that w~ll be ~mpacted by th~s proposal. There ~s one neighboring s~ngle-famdy residence to the north of this site The tower w~ll be ws~ble from th~s home, however, the existing wooded vegetation on the site provides a screen. The tower ~s located ~n the southeastern corner of the property and there ~s ~n excess of 500 feet between the tower and this residence. Elevabons on the subject s~te are between 2 and 2.5 feet M.S.L. The entire s~te ~s below the 100-year flood elevabon. The tower will require a small amount of fill (less than 3,000 square feet). Th~s floodplain d~sturbance ~s considered minimal and can be reviewed administratively under Section 5(B) of the Site Plan Ordinance dunng detailed site plan review The tower w~ll be located close to an ex~sbng tower and will be screened from the roadway by the ex~stmg vegetation. The tower meets all setback requirements ~n the zoning ordinance. · The tower is being constructed to accommodate at least two additional users and the apphcant has provided a letter of interest from Venzon for co-location The applicant has provided the required reports for structural elements and esbmated radiation levels. Both of these reports state that the tower will meet the current federal standards established for commun~cabon towers. Planning Commission Agenda July 9, 2003 ALLTEL COMMUNICATIONS, INC. / # 17 Page 4 Evaluation of Request The request for a 199-foot tall communication tower for w~reless services is acceptable. Th~s proposal meets the Iocabonal criteria prowded ~n Secbon 232 of the C~ty Zoning Ordinance and will be constructed to accommodate mulbple users. The tower w~ll be screened from the roadway and the adjacent properbes and wdl not be highly ws~ble. The subject site is located ~n an area designated as a natural resource/conservabon area and the proposed use w~ll require minimal land disturbance. The commun~cabon tower wdl enable AIItel to substanbally improve cellular phone service to the Sandbndge Beach and Lagomar areas. The Planning staff recommends that th~s request for a 199 foot tall commun~cabon tower be approved w~th the following condibons. Conditions . . . . . The project shall be developed as indicated on the submitted site plan entitled "Preliminary S~te Plan, 199' Monopole, AIItell Sandbridge" prepared by Kimley-Horn and Associates, Inc., dated May 2, 2003, and the associated plans and drawings submitted w~th the conditional use permit appl~cabon. These plans have been exhibited to C~ty Council and are on file ~n the Planning Department. The overall height of the proposed towers and antennae shall not exceed 199 feet. All exIsting trees w~thin the lease area shall be identified by type and s~ze on the detaded s~te plan and shall be protected and retained for screening purposes as determined by the Planmng Department during detailed plan review The landscaping shown on the landscape plan shall be installed to supplement the natural screening. Land disturbance on the s~te shall be limited to the area shown as access and lease area on the site plan. An interference and ~ntermodulabon study including proposed channels and the City of V~rgin~a Beach radio channels shall be prowded to the Department of Communications and Information Technology (COMIT) for review and approval prior to detailed site plan approval. Unless a waiver is obtained from the City of V~rg~nia Beach Department of Commun~cabons and Informabon Technology (COMIT), a radio frequency emissions study (RF Study), conducted by a qualified engineer hcensed to pracbce ~n the Commonwealth of V~rg~n~a, showing that the ~ntended user(s) w~ll not interfere w~th any C~ty of V~rg~n~a Beach emergency communications Planning Commission Agenda July 9, 2003 ALLTEL COMMUNICATIONS, INC. / # 17 Page 5 facilibes, shall be provided prior to s~te plan approval for all subsequent users. . In the event ~nterference w~th any C,ty emergency communications facilibes arises from the users of this tower, the user(s) shall take all measures reasonably necessary to correct and eliminate the ~nterference. If the interference cannot be eliminated w~thin a reasonable bme, the user shall ~mmed~ately cease operation to the extent necessary to stop the interference. Should the antennae cease to be used for a period of more than one (1) year, the apphcant shall remove the antennae and their supporting towers and related equipment ADDED BY' PLANNING COMMISSION The tower shall be located approximately 100 feet to the west of the location shown ~n the plan referenced ~n Condition 1 in a Iocabon to be agreed upon by the applicant and the oppos~bon. A s~te plan show~ng the agreed-to location shall be submitted to the Director of Planning prior to the C~ty Councd meeting NO TE: i i i Further conditions may be required during the administration of applicable City Ordinances. The site plan submitted with this conditional use permit may require revision during detailed site plan review to meet all applicable City Codes. Conditional use permits must be activated within 12 months of City Council approval. See Section 220(g) of the City Zoning Ordinance for further information. i Planning Commission Agenda July 9, 2003 ALLTEL COMMUNICATIONS, INC./# 17 Page 6 , /-.- EXISTING 15,0' ~ M ON OPOLE TOWER EXISTING FENCE 12' × '16' CELLXt( SHELTER 20' SIDE YARD BUILDIN( SETBACK REQUIRED IiiI flt i- tl iit I1//II PROPOSED LEASE LINE OF STONE, 8' HIGH SECURITY FENCE OPAGUE VINYL SLAT...~S ,f ! PROPOSED 199' .E 25' SETBACK TO BASE OF TOWER FROM ANY PROPERTY LINE NOT ADJACENT TO A PUBLIC Rt GH T- ~ EXISTING PROPERTY LINE 15' CROSS- ACCESS EASEMENT '-4 · 12' WIDE GRAVEL ~ ACCESS DRIVE .,.,,....-.-EXISTING RIGHT-OF-WAY LIN.E ./ 50' SETBACK TO BASE OF: TOWER FROM A PUBLIC RIGHT-OF- WAY REQUIRED F CO- Planning Commission Agenda ALLTEL COMMUNICATIONS, INC./# 17 Page 7 -UTUr£ -~O~ATION-~ Z Z Z 5' LIGHTNING ROD PROPOSED ANTENNA CENTERLtNE ELEVATION :J:194' .~ FUTURE CO-LOCATIONS PROPOSED SHELTER TOWER ELEVATION .... NO~ ~mllm ~ .... Planning Commission Agenda July 9, 2003 ALLTEL COMMUNICATIONS, INC. / # 17 Page 8 Planning Commission Agenda July 9, 2003 ALLTEL COMMUNICATIONS, INC./~ 17 Page 9 Planning Commission Agenda July 9, 2003 ALLTEL COMMUNICATIONS, INC./# 17 Page 10 0 Z ; Li.,! l..- ,.,,J Planning Commission Agenda July 9, 2003 ALLTEL COMMUNICATIONS, INC. / # 17 Page 11 Z Z Apphcant's Name: List All Current Property Owners: ALLTEL Communications, Inc. Charles Thomas Cayce & Bernard Walker APPLICANT DISCLOSURE Ifthe applicant,s a CORPORATION, hstaliofficemofthe Corporation below: (AEachhst~fnecessary) Kevin L. Beebe, Group President; Scott T. Ford, President & CEO; Yrancls X. Frantz, Exec. VP & Sec; Scott Settelmyer, ~rea~urer jcffr~=y--R~ Gardner, SVP x_ CFO If the apphcant ~s a PARTNERSHIP, FIRM, or other UNINCORPORATED ORGANIZATION, hst all members or partners in the organ~zabon below (Attach hst /f necessary) [] Check here ~f the apphcant ~s NOT a corporation, partnership, firm, or other unincorporated organization If the applicant is not the current owner of the property, complete the Property Owner Disclosure section below: PROPERTY OWNER DISCLOSURE If the property owner ~s a CORPORATION, i~st all officers of the Corporation below' (Attach list ~f necessary) If the property owner ~s a PARTNERSHIP, FIRM, or other UNINCORPORATED ORGANIZATION, hst all members or partners m the organtzahon below. (Attach hst if necessary) ~ Check here ~f the property owner is NOT a corporation, partnership, firm, or other unincorporated organization. CERTIFICATION I certify that the information contained herein is true arid accurate.., E~ignature \ Print Name Conditional Use Permit Apphcat~on Page 8 of 12 Planning Commission Agenda July 9, 2003 ALLTEL COMMUNICATIONS, INC. / # 17 Page 12 CERTIFICATION OF CHARLES THOMAS CAYCE ! hereby certify that I am the owner of property located in Virginia Beach, Virginia designated on the Vlrg~ma Beach tax records as GPIN 2423-39-3051, and I further certify that ! have granted to ALLTEL Commumcatmns, Inc. d/b/a ALLTEL and its attorney, M E. Gibson, Jr. and the law firm of Tremblay & Smith, LLP, the nght to file and pursue an application for all zoning apphcabons, permits, and other governmental approvals for a telecommunications tower, equipment shelter, access road..a~d relate,~ facilities on my,qroperty, and i do further confirm and authorize all action take,by then'J/in ¢~n ~r~c' t~on with the fil,n~ of the appl,cat,on and the approval process. My Corniness;on Eyc,'cs C~':,~i,-:- 3',' 237: My Comm~smon expires Charles Thomas Cayce Planning Commission Agenda July 9, 2003 ALLTEL COMMUNICATIONS, INC./# 17 Page 13 CERTIFICATION OF BERNARD WALKER I hereby certify that I am the owner of property located in Virg~ma Beach, V~rg~nla designated on the Vlrgmm Beach tax records as GPIN 2423-39-3051, and i further cert&y that ! have granted to ALLTEL Commumcatlons, inc d/bta ALLTEL and ~ts attorney, M E GIbson, Jr and the law firm of Tremblay & Smith, LLP, the right to file and pursue an apphcat~on for all zomng apphcat~ons, pe,Tmts, =rd other ~ovemmcnt~J approvals for a teleccmmumcat~ons tower, cqu~pment shelter, access road, and related famht~es on my property, and 1 do further confirm and authorize all action taken/b,~ them m connection w~th the fihng of the apphcat~on and the approval process ! STATE OF TEXAS CITY OF HOUSTON, to-w~t' Subscr~wom to before me thIs ,~-~ / day of ~~_~2003, by Notary Pubhc My Corem,ss,on exp,res _ /~' Bernard Walker Planning Commission Agenda July 9, 2003 ALLTEL COMMUNICATIONS, INC./# 17 Page 14 Item #17 Alltel Communications, Inc. Conditional Use Permit 812 Sandbndge Road District 7 Pnncess Anne July 9, 2003 REGULAR Ronald Rlpley. Okay, Mr Miller, the next item Robert Miller: The next item is Item # 17, Alltel Communications, Inc. Is Mr. Gibson here? Dick Gibson: Mr Chairman, members of the Planning Commission. My name is Dick Gibson. I'm an attorney from Charlottesville, Vlrgnma, and I represent the applicant Alltel Communications. Alltel is in the process of upgrading service in many of the areas that it serves including Virginia Beach Primarily in order to meet the public demand as you are all probably are aware when wireless telecommunication service was first introduced it was considered by many to be a luxury and not a necessity. As the system have evolved and as more companies have come into the competitive forefront that is all changed now, and there are about 135 million subscribers who we wireless serve nationwide today. It's no longer considered a luxury with the advent of competition, the pricing has been reduced dramatically, and 1ts almost impossible now to find someone who does not have a wireless telephone. So, with that type of demand it puts tremendous pressure on the system, on the original build out and what we find here is a situation where there is a need for coverage in the Sandbndge beach area. The towers that are approximate to that area are insufficient. They are too far away to cover so Alltel has a need to install antennas in an area that will be able to cover that area. The propagation maps that we submitted with the application, show the before and after condition, and they vividly demonstrate that the need does exist. Staff'has reviewed the application and has determined that the need does exist. The need not only exists for Alltel but it also exists for Venzon, one of Alltel's competitors. We contacted other careers to see whether not they had a need for improved coverage in the area and Venzon responded that they do in fact have the need for coverage in the area and are interested in collocating on this faclhty if it's approved. So, you will be serving essentially two other carriers by approving the application for this one site. The site selection process involves finding first another tower that we can locate antennas on so we don't have to build a new structure or finding another bmldlng. We attached antennas to many buildings in this area And, we did find another tower, which is immediately adjacent to the one that we are proposing to locate on And, that tower was already built to capacity Staff has verified that as well. So, it was not an option to collocate on an existing tower, it then be came necessary to build a new structure. And, what we have proposed here is the location of it is very important ~n fitting in with the overall grid of the system, both the physical location and the height in order for the antennas to be able to reach the area we need to serve. The siting criteria on the ordinance does require collocation and if collocation on an emstlng tower is not possible then ~t requires collocation adjacent to an ex,sting fac~hty And, that is exactly what we've done here. We have provided a mirror image w~th the site that is on the Hell's Point Golf Course immediate to the south of the proposed site that we're proposing today. And, the reasomng behind that is fairly clear. If you already have a tower that ~s ~mpact~ng an area it makes more sense to put another tower up next to that than ~t does to go to another area and create an additional impact. So, that is what we have done here. The theory, being that if you see one you see ~t and you get another one up there you see it to. The staff report is favorable and notes that we do meet all criteria and recommends approval. We are aware there ~s opposition, the neighbor to the north Mr. Danner. We have met and spoken with h~m ~n an effort to see if we could come to terms. We have some photographs I think Mr. Danner submitted some photographs of the wew from h~s front yard. And, I have three photographs that essentially show that same wew and I'll just pass those around if I may Mr. Chmrman? Ronald Pupley: Sure, by all means. Dick G~bson: Those photographs demonstrate what the wew is from a portion of Mr. Danner's front steps as n exists today. So, as you see from the photographs as they come around he ~s able to see the tower that currently exists. And, he wall be able to see the new tower as well because the new tower wall be immediately adjacent to the one that currently exists. The ex,sting tower ~s 900 feet from his house The proposed tower will be 800 feet from h~s house. So, the ws~bd~ty will be essentially the same for one as it is for another. I do point out that vlslbdlty ~s not a factor throughout h~s property because there ~s a mature stand of trees between the tower s~te and his house And, you can see that ~n the photograph. There are quite a number of trees there. We did have d~scuss~ons w~th Mr. Danner. He requested that we move the s~te to the west. That would be further back off Sandbndge and the problem there is the more you move it ~nto the s~te the greater the wetland ~mpact ~s and that's another factor to be considered because the further back you move ~t the longer the driveway serving ~t wall be so for that reason, moving it back does not seem to be a v~able option. Furthermore, moving ~t back moves ~t closer to h~s house and I would submit, I guess ~t's h~s house so it's h~s dommn to say one way or the other but ~t would be more ofh~s view shed then ~t would be ~flt were left it ~s today We also have filed for FAA at the location proposed and the study has been at the location proposed. So, if we were to move ~t we would have to start those processes all over agmn. And, FAA ~n particular, ~s about a 90-120 day process and the people that are enj oy~ng the service are anxious to have it improved. Mr. Danner also requested that we look into moving on the Hells Point Golf Course and Alltel did make ~nqmry lnmally of the owners of the golf course to see whether it would be possible to locate adjacent to the existing tower But on the south side of emst~ng tower and at the t~me Alltel approached the representatives they smd they weren't interested ~n any proposal because the golf course was up for sale and they weren't ~nterested in doing anything that m~ght jeopardize the sale I understand that has changed now But, agmn, I would submn that because we proceeded with the apphcat~on on th~s s~te and because everything the approval process has been ~mt~ated that moving it to the other site is not a posslbdlty. Furthermore, the landowner said it would be better to lease before Mr. Case would not be interested ~n hawng us walk away from that lease And, also I would submn to Mr. Danner that it really shouldn't make any d~fference because it's just going to be agmn, adjacent to the same existing tower. It would be maybe 50 feet further away then we proposed but it is still going to be in his view shed. It's still going to have the same impact that he has now. Mr. Danner did request that we pay him a sum of money for a month and he would be placated and we explained to him that was not the sort of thing that we do and that we heavily stand on their own merit and make a proposal accordingly. So, I would submit that relocation is not a viable or a meaningful alternative. It would in fact, be contrary to the ordinance that requires collocation adjacent to existing tower sites. Another thing that Alltel proposed is planting some trees on Mr. Danner's property that would be close to his property that would provide additional screening for both the tower that is there now and the proposed tower and that was something he was not interested in. So, essentially I feel we've done everything we can to try to placate the only opponent that we do have That opponent is already impacted by an existing tower and I would therefore respectfully request your support of this application. I think we clearly demonstrated that the need does exist. We have met all the requirements of the ordinance and staff does support the application. The only opponent as I mention has already been impacted by an existing tower and relocation is not a viable or meaningful option even from Mr. Danner's perspective and many will benefit as a result of this. It's a shame that one person will be able to see it from certain points in his yard but the benefits are good to the public The public will be better served by improved communication whether it be to call a loved one on the way home to find out what you can pick up to bnng home on your way to the new Exxon Mobil service station or ~n case of an emergency to be able to communicate with 9-1-1 It's of a benefit to the public and not just to a few. So, having said that, we respectfully request your support and we'll be glad to answer any questions you may have Ronald Rlpley: Okay. Are there any questions of Mr. Gibson? Yes. Will Din. William Din. The access to your site on this cell tower here, did you explore anything to co-use the other access that's coming off Sandbndge? Dick Gibson. The other access coming off Sandbndge on the north or south? William Din: To the other tower. Dick Gibson: To the other tower? No. We did not. That would be the only point of access for this site. The site now has frontage on Sandbndge Road but the site in question has no access now The access that we would be putting in would be a minimal access. And, once construction is over the site is v~slted two times per month by technicians just to check the equipment so it's a very minimal use situation. William Din: Do you know how far it is from the other access9 Dick Gibson. I don't but I have people here with me who may. Larry do you know? Larry Vlckhngs: It's probably pretty close It's on another piece of property It's not on this property. Dick Gibson: It is That's correct. It's on the golf course property. We would be facing issues there in dealing with another landlord. Ronald Pdpley: Mr Gibson could you tell us who spoke a minute ago for the record. Dick Gibson: Sorry. That was Larry Vlckhngs. Ronald Rlpley' Thank you. Dick Gibson: Thank you Wllham Din: Ashby, there's another map. That one there. Can you show you me where Mr Danner's house exactly is on there using the pointer. Dick Gibson: Right there William Din: And you said, I think I heard you say it's about 800 feet from the view of your tower? Dick Gibson: Yes sir. About 900 feet from the existing and that would be about 800 feet from new one. William Din: Thank you. Dick Gibson: And, that photograph and the aerial, well illustrates the forest between the existing and the proposed site and Mr. Danner's house. Ronald P~pley: The photographs that you passed around, what position were they taken~ Where was the photograph taken looking which way? Larry V~ckhngs: It was taken from the front porch. Dick Gibson: Tom Stokes of Stokes Environmental was taken from Mr Danner's front porch. Ronald Pdpley: From his front porch looking toward the existing toweU Dick Gibson: Yes sir. Ronald Pdpley: Okay Dick Gibson: Yes sir. Joseph Strange: Where's the existing tower right now? Dick Gibson: Right here. If you flip this over then you have the lease area on the south side and the tower would be in the middle of that leased area Dick Gibson: Yes. Kathy Katslas. The reason for not going back to the point was because the golf course was for sale~ Dick Gibson: That's correct Kathy Katslas: And, so it has been sold and closed and so nothing was pursued because you already pursued this? Dick Gibson: That is correct. Kathy Katslas. Would you consider pursuing that site again? Dick Gibson. Well, the problem is that we're so far into the process here and we just were informed and we actually haven't confirmed with the golf course and conversations with Mr. Danner. He said that he had spoke to people at the golf course and they say they would entertain a proposal. But the problem is that we are so far into this process now and it would probably be another six months if we were to start the process again and as a practical reason from and being objective as I can, it's not going to make a difference in his view shed because you still have two towers in his view shed. It would make a difference of maybe 50 feet if we moved ours over to the other site but he's still going to have two towers he's looking at. Kathy Katslas. So, they would be adjacent to one another? Dick Gibson. That's correct. As they will now. Yes sir. Joseph Strange: Can you show where, if it was on the golf course where it would be? Dick Gibson. With the site that's here now is there it would have to either be here or here. Joseph Strange. Oh, okay. Dick Gibson: Because there's a building that's right here. Ronald Rlpley: Mr Gibson, who is on the existing tower right now? Do you know the careers that are on there9 Dick Gibson' I do but not from memory Ronald Rlpley. Okay. Do you have any idea what percentage of the market they serve is in general? Dick Gibson: I have no idea They are all major careers and I mean they are all competitors of each other. I actually don't know that. I'm sure that Spnnt is, Nextel, T- Mobile and there's one more, Suncom, right. I mean they're all major players Ronald Rlpley: Is there anyway that this tower, which we talked about. I'm sorry. We talked about this in the informal about the possibility of making this a stealth tower versus a tower as proposed but staff pointed out that would require you probably having to relocate a second tower some place else Dick Gibson. That's right. By stealth, you mean something that is below the tree line or something. For here, it would be a non-performing site. I mean they wouldn't build it if it were below the tree line Ronald Rlpley: Okay. Are there any other questions? Barry Knight has a question. Barry Knight: Mr. Gibson, on this same piece of property can you envision a location where you could move this antennae that would be less impacted to Mr. Danner that wouldn't impact wetlands9 Dick Gibson: Well, the impossibilities are if you move it here that's adjacent to the driveway. That's closer to his house. He can't move it any closer to the road because of setback requirements. If the further back you move it you're going to have wetlands impact and it's going to be closer to his house. So, I think as far as locating on this parcel here, that's really the ideal spot. It's the further away from his house. It has the least impact on wetlands and it's immediately adjacent to an existing tower, which meets one of the location criteria in the ordinance Ronald Pdpley: Okay. Dick Gibson: Thank you very much. Ronald Rlpley: Okay, thank you. We have opposition? Robert Miller: Steve Danner. Steve Danner' Thank you Mr. Chairman, members. My name is Steve Danner. I live at 804 Sandbndge Road next door to the proposed tower I'm going to very quickly show that they did not meet the fulfillment of 232. Does everyone have the photos that I had brought to staff?. Okay. I had met with Barbara Duke and sat down with her and gone over the location and what they did propose And, she clearly and unfortunately she's not here today but she clearly stated that there were other opportunities on the property or off the property for them to pursue. I have been attempting and I've initiated contact with them and invited people over hnd trying to get them to move it. It is visible from my home. They have not met the requirements and there are other opportunities. I am not trying to oppose a tower that will service a community. I have not problem with that But with a little bit of consideration for my environment we can meet all the fulfillments. If we can look at the first picture there that I have supplied. This is my front porch. When the proposal was approved by staff, they did not know that I have a view of the tower Barbara Duke was unaware of that as with everyone else I presume. I don't think it was done maliciously It just happened that it ended up on this space and that is why I'm here today. On the second page you see the view that I get from my front porch. I know the property well and all the opportunities. If you're looking at the new proposed tower, it would be right about here is my guess and it would be more visible. I do not feel that because there's one tower and you can move to the right and block it by one tree that you have to be cornered in That's what they're proposing to do is corner me in to where I have to move in my yard and be blocked by one tree which will stop it. The next photo is going down to the pond. This is the environment that I would like to keep and they're looking to put a larger tower closer to my property. If they would move it out to the west a little bit or have a discussion about it or going to the wetlands and see if it's a possibility that would be beneficial to me because then I would not see it. Maybe closer to my house but there's more opportunity for coverage to hide it. This is a little bit further down the driveway. If they put it in it would be even larger, even more visible. This is down the driveway This is not from my porch. This is from the yard moving around. But if they move to the right it would not be visible or move to the golf course, which is available and would not be visible. Ronald Rapley: Mr Danner? Steve Danner: Yes sir. Ronald Rapley: You've run out of nme. Steve Danner: Okay. Ronald Rapley: Did you need more time? If you do, I'll give it to you. Steve Danner. I'll get to some very good points. Ronald Rapley: Okay Steve Danner: If your looking at 232 C(4), the location criteria, it would be unobtrusive and substantially detract from the aesthetics neighborhood character. It is very obtrusive and it would substantially detract from the neighborhood character. We have the refuge across the street and the character would substantially detract from my home. Okay If we go to four, the lack of space of existing tower sites to construct a tower for proposed intent is very clearly Hell's Point Golf Course is available They have not met the criteria because it is available. They have not used that space on existing site, if this is an additional property on P-1 as far as 200 feet from existing residential structure. Can we go back to the aerial photo of my property? I have a residential structure right here and I would like to know the distance that ~t would be from here. I feel like it's shorter than 200 feet and I don't know the answer to that. My estimate is that it's closer to that. Ronald Pdpley: IS that a house there? Steve Danner. No. That's like a workshop/storage area that I have But reading it covers residential structure Correct? Ronald Ripley' It's llke a garage What's the technical word? Faith Clmsne. Accessory use Ronald Rapley' Accessory use Steve Danner: While we're here, the only coverage that I have to stop the view is one row of trees here. There's not a lot. And, then one more row of trees right here. One of them has already been struck by lightning. If you moved it out of the way just a little bit I would have several trees that would block it It's just a unique s~tuanon because we have the pond. Ronald Pdpley. So, you're actually in favor of moving it back further? Steve Danner: Yeah. Just a little bit would be out of my sight. I'm not trying to push it on the golf course. This is a good neighbor. I'd like to let him stay with what they have there and not disturb it but if they would work with it a little bit. I just haven't had anybody working with me on it. I'm not trying to destroy anything but if you move it just a little bit then we would have all these trees to block it. The other thing is that it is visible from Sandbndge Road, which does not meet the requirements of being visible from a road and where this proposed spot would be making it more visible. And, the last picture that I had shown on there was the driveway access. I had offered to them to use my driveway for a monetary figure. Give me a price because I don't think it's a good idea to take a 150-feet of trees to cut a slope down for a driveway and that was the subject of money and I was trying to save the idea of trees. We have Ferrell Parkway. We have a road that goes undetermined about Sandbnde Road. It's kind of a hot topic. And, were going to be putting more driveway access in and I don't think it's a good idea Ronald Rlpley: Are there any questions of Mr. Danner9 Mr. Miller has a question. Robert Miller: Mr. Danner, Mr Gibson mentioned in addition to what you said that they had offered to put some trees in that would mitigate the view perhaps. I know that it doesn't happen instantaneously. You're not going to put 60-foot trees ~n but you know that too. Was that something that was discussed? Steve Danner: Yes it was. The only opportunity because of the angle because this is the line of sight, the lake is here You can't plant anything there, the driveway is there and nothing can go there. The only thing that you can do to block the view would be to put right on that first picture hke some Leyland Cypress 20-feet out in front of my house and then I wouldn't have anything Robert Miller: Alnght. Steve Danner: It's not a possibility on here but as far as them even doing their landscaping, I think that when they do it because there is nothing but forest ~n there redundant It's Ronald Rlpley. Mr Salle' has a question Charles Salle': Mr. Danner, how far to the west would you estimate that would have to move the tower to comply? Steve Danner: I think a very short distance. Charles Salle'. Do you have an estimate in feet? Steve Danner A hundred feet. Just looking at the line of sight. The trees and it's just the luck of it. It just ended right in smack and you come out my front door and bam. You couldn't have gotten a more direct spot in front of my house, so a very short move. This is the other tower. So if they put it on this side it's gone. I would see it from my lake but that would be lesser of the evils. I haven't been worked with at all and I've taken a lot of time trying to work with it and I have not one offer come back that says, "we'll do it over here." Ronald Rlpley: Are there any other questions? I do have one and thinking about it. The elevation of the land that your house sits on or in that general area, do you know actually what it is? Steve Danner: I'm at five feet. Ronald Rlpley: About five? Steve Danner: I've walked through the area and I think its all the same. I think we have a view of the wetlands, the elevation. Ronald Rlpley. Yeah Steve Danner: So, I think that whole property is rated the same. And, that area, I think it's all the same firm I don't think it's not like swamp It's been awhile Ronald Rlpley Yeah Okay. Steve Danner: Okay. Ronald Pdpley: Thank you very much. Steve Danner: I think they should at least try wetlands. Ronald Rlpley: Okay Steve Danner. Thank you Ronald Rlpley. Mr. Gibson? Do you care to respond to that? Dick Gibson Yes, I would sir As far as the comments attributed to Barbara Duke, Barbara did speak with me and made me aware that Mr. Danner was in opposition but said that would not change her recommendation. And that stood as a recommendation of approval. So, when the recommendation was made she was aware of the fact that he was in opposition. I guess I come back to the point that the impact exists. I mean his view shed is not going to be altered what we are proposing here. As he sort of seems to have retreated from the Hell's Point proposal but again, I go back to the point that if we put it on the Hell's Point, you're still going to see it. As far as using his driveway, he did mention that but that would mean that the driveway, we would still have to access the tower site and we would then have then cut across Mr. Kay's property in order to get to the tower site and if the property was sold for another use you'll obviously would have to have an independent access coming in to it and this IS about a minimal an access that one could lmagtne. As far as moving it to the west, I mean he's talking about a 100-feet. I don't want to seem unreasonable here. I don't think a 100-feet is going to make any difference to him. It will make a difference to us. I can't tell you that it's going to make an environmental difference to the point where it would render the site unbuIldable but having already filed the FAA, having already the study done, having the site plan prepared at this location. These are things that are well underway and would result in a slgmficant delay in the building of the project to move it a 100-feet when it is still going to be visible from his property, so I don't want you to think that I'm being unreasonable in saying that a 100-feet is a big deal but frankly, under these circumstances it is and correspondingly to Mr. Danner, I don't think it's going to make any difference because there will still points from this property where he'll be able to see both towers. And, I thank you. Ronald Rlpley: Thank you. Dick Gibson: I'll be happy to answer other questions Ronald Ripley: I don't have a question but It sounded like to me from Mr. Danner that moving it may be important to him but we're trying to balance this between the owner and the desires of the applicant. And, I can appreciate and I am just speaking for myself but the Commission may have other opinions but it appears to me that I can appreciate the time and effort that you have in it. I know you got a cost in this and your time, etc. But we do have to look at what Mr Danner says because he is the property owner In that area also and he has concerns. It sounds like and if I heard him correctly, it sounded like if you moved it a little bit to the west it might mitigate to the point where you might say something that you don't have any opposition, perhaps. I don't know exactly what he'll do but anyway but that is just a comment Dick Gibson: Okay. Ronald Ripley: Yes, Mr. Din William Din: Yes, just looking at this view here, I don't know what a lO0-feet would equate to here but if you took a look at this picture here and maybe drew a hne from the view that he currently has back to his house and maybe put the other tower tn the same line of site so that you wouldn't see two towers but maybe one or accommodation of one. I don't know how far that would move it to the west but I'm not saying that's what we're asking them to do. I think if it's within the distance and the approval that you may be seeking and it's within the same site that you might investigate that. I think that would be a recommendation that you could investigate between now and City Council. Dick Gibson: I know actually what your saying. We've looked at that and he has such a long piece of property that there may be a point along his property where they line up nicely but then you go five feet beyond that and they don't so and as far as moving it, if we move it 100 feet we got to resubmit to FAA and we just can't amend what we've already submitted. We have to re-file and we go to the bottom of the heap. William Din: But if its within the same filing, you don't have to and it might be worth checking in to it. Ronald Rlpley: Barry, did you have a comment? Barry Knight. Yes. You have the whole piece of property and you have a site plan for the tower site. And, you submitted that to FAA for approval. Do they give you any latitude if you were to resubmit a site plan and you shifted it 50, 75, 100 feet. I find it hard to beheve w~th FAA that if you were just to move it 50, 60 or 100 feet that you got to go through the entire application process all over agmn. Have you been through this s~tuatlon? Dick Gibson: I've been through it. Yeah. Barry Knight: Okay. Dick Gibson: We went through it in Newport News. We had already gotten FAA approval. I don't want to give you all the details But when we placed a light standard on a ball field and then the Vice Mayor said, "no, he didn't want that, he wanted a free standing tower", in a different part of the school property, we moved it about 120 feet and we had to go back and start all over with the FAA. Barry Knight: How long does it originally take with FAA and how long would it take to get it amended? Is there a difference? Dick Gibson. No You have to start all over. I mean you have to resubmit because you submit not based on your lease area you submit based on your latitude and longitude of the exact center line of the tower. And, so that process takes between 90-100 days once you submit and obviously that was submitted knowing that we have to get a Conditional Use Permit but based on history of dealings we do have some level of confidence that we're going to get the approval so that was submitted when this process was initiated So, we're almost to the end there so if you start it all over it would be conservatively 90 days more from the time we submit the application Barry Knight' I know that you have a lot of experience with these tower site like this and you're famlhar with our process and what we do is make a recommendation to City Council and you only, right now have one family that's opposing you right now If there was any way and because they carry weight without us today, and they will definitely carry weight with City Council and if there was anyway that you could appease the opposition then I don't think you have a problem whatsoever. And, I'm just trying to find some common ground between you and Mr. Danner where it's a win-win for both parties or at least Steve isn't upset as he is now about this. Dick Gibson. I understand. Barry Knight: I would like to offer some sense of direction but I would kind of like for you to take the lead on the sense of direction on what you think you could do to help appease Mr Danner. Dick Gibson: I can sort of tell which way the wind blowing here. And, I mean it's more important to Alltel that we have the site tan that we not have the site. And, obviously a 90-day delay is less significant then a denial. And, Mr. Danner had proposed that we move it 100-feet to the west and I would propose that we move it a 100-feet to the west Ronald Rlpley: Okay Are there any other comments or questlons9 Dick Gibson. SubJect to him withdrawing his opposition. William Din: There is another letter here from the Cannons that oppose this also Barry Knight: And what do the Cannon's say? Are they adjacent property owner? William Din: They're on Sandbndge Road. They wish to move it to the west also I just want to make aware that there was another letter here. Barry Knight. I wasn't aware of that. Sounds hke it would solve the issue. Ronald Rapley: Mr. Gibson, I think we appreciate your consideration of this matter and hopefully this will mitigate the matter so maybe we can get this thing approved for you in the future. Dick Gibson: I just wanted to make clear that we would do that condition on his withdrawing his opposition because it would be any point in doing it if he was still going to be opposed to it Ronald Rlpley: We understand that. And, I see him nodding his head affirmatively. Dick Gibson: Good. Ronald Rlpley: Is that correct Mr. Danner. Okay. Thank you. Dick Gibson: Thank you sir. Ronald Rlpley: Mr. Danner, unless you have new information. Steve Danner. Yes, I do. Ronald Pdpley Okay, Mr. Miller is sponsoring you and if you can keep it brief please. This is running a little long. Steve Danner: As short as possible This study, whether it's at 96 feet or 102, I'd like to at least look and see where it lays out. The driveway, as far as trees coming up my private driveway, it's very clear through there. It's not a bunch of trees to cut down. And, I have a lot of other things to say but you guys understand as far as Cannon's. I've spoke with them and they're letting me inform them what's happening so if we can move it to a better location and not keep going back. Ronald Pdpley: Mr. Danner, in the interest of time when you get with the applicant and if you'll make a decision then you can all come to terms and not a lot of back and forth We'd appreciate it so that the applicant can move ahead too. Steve Danner: That was my intent. Also in one of my notes I did not want to bnng a problem to you today. I wanted to try to relieve and I haven't heard from them in a week. It's been a week and nobody's gotten back to me. Ronald Rlpley: Okay Thank you very much. Steve Danner: Thank you Ronald Rlpley: Is there any further discussion? Robert Miller: Stephen or maybe Kay, we don't have the proper documentation to be able to vote on this today. We have to defer this. Stephen White: Raght Robert Miller: Did Mr Gibson understand that. I didn't think he did Dick Gibson: No, Mr Gibson didn't understand. I was thinking that as long as we were on the same piece of property, which was advertised for that we had the latitude to move it within the confines of the tax amount parcel. Robert Miller: That's what I'm asking the attorney and our Planner Stephen White: The whole property has been advertised. If it's the pleasure of the Planning Commission to approve this with the understanding that they're going to get together between now and Council to relocate. What Ms Attorney9 Kay Wilson: What exactly and I thought we were going to move ~t 1 O0 feet to the west9 Mr Gibson was that your understanding? Dick Gibson. Correct. Kay Wilson I thought we were just going to move it 100 feet to the west. That's what we're doing Then I'm okay with lt. It's going to move 100 feet to the west, that's where ~t's going to be ~n the little spot 100 feet to the west. Ronald Rlpley' I think Mr. Danner said that ~t may not be no more than 100 feet to the west, ff we could say that and they could agree on a acceptable location. Dick Gibson. That's fine. Ronald R~pley Is that alnght? Dick Gibson Yes sir. Ronald Pdpley. Okay. Kay Wilson' If we're going to move It 100 feet to the west, if were not going to move it 100 feet to the west, then we don't have a spot for you all to vote on. Robert Miller. So, approximately 100 feet doesn't work? Kay Wilson No Ronald Rapley Somewhere between the existing location and 100 feet to the west? Kay Wilson: How would you feel voting on that Mr. Rlpley? That's my question for you. Ronald Pdpley Well, the other way is to defer this and I think they want to continue to move forward And, I think if they don't work it out by Council they are not going to get anywhere when they get there. Robert Miller: The point is that what we're agreeing to is with Mr. Danner and Mr. G~bson's agreement is that they would move ~t in such a way as to either push ~t into position that ~t matched the existing pole or that it was better screened by the trees. And, unfortunately 100-feet because everyone is looking at a map that has no scale. We don't know exactly I don't have much problem with that I'm fine with that. And, I beheve the two people are both sincere in what they said and the presentation I'm comfortable with sayang it but I don't think I can say exactly 100 feet and feel hke that is going to really happen It may be a 102 feet It may be a 150 feet. I can't tell from looking at the map. Kay Wilson' And, I'll be honest with you Mr Rlpley and Mr. White, my only quam is that if they can't reach an agreement. Robert M~ller. I understand. Kay Wilson: And you voted on either up or down an agreement that's now useless. Dick Gibson: We're willing to take that risk. Barry Knight: Sir, I didn't hear you Dick Gibson. I said, we're willing to take that risk. Kay Wilson: That's nice Mr Gibson but that leaves this Board having voting on something that doesn't exist. That leaves me in trouble because I let them vote on something that doesn't exist, so legally they voted on an agreement that doesn't exist, an application that doesn't exist. Dick Gibson. But if they're voting to move the tower approximately 100 feet. Robert Miller: How about it not to exceed 200 feet? Joseph Strange: For what I understand there can't be a range? Dick Gibson. We're going to have to have a pinpoint location by the time we get to the City Council or they're not going to consider the application. Kay Wilson: You're going to have a site plan before you get to City Council. Dick Gibson: Right. Kay Wilson: And, it's going to have to be approved by Mr White. Mr. White looked up. Mr. White, we're going to have to have a site plan to you before they reach City Council. Stephen White: Understood. Kay Wilson: Approved by you before it reaches City Council that will have to be in the 100 feet range. Robert Miller: Do I make a motion in this Stephen? Kay Wilson: Make a motion that says Robert Miller' I so move as the fine City Attorney just stated. Ronald Rlpley: And, Mr. Knight seconds lt. Okay. Thank you. Is there any further discussion9 Heanng none, we'll call for the question Kay Wilson: As well as the other eight conditions that are contained herein? Robert Miller: That is correct. Ronald Pdpley: There are eight conditions contained herein. Ed Weeden: So this 1S a motion to approve it within 100 feet? Kay Wilson: This is a motion to approve it w~th the e~ght conditions contained in the Planmng report in a location approximately w~thln a 100 feet and the approval of a site plan before they go to City Council Ronald Pdpley: And, that's a 100 feet west of the proposed site. Okay. Are we clear as mud here? Alnght. Good. We're ready to vote. Ed Weeden: Ms. Anderson? Jamce Anderson: Yes. Ed Weeden: Mr. Crabtree? Eugene Crabtree: Yes. Ed Weeden: Mr. Din? William Din: Yes. Ed Weeden: Ms. Kats~as? Kathy Katslas. Yes. Ed Weeden. Mr. Knight? Barry Knight: Yes. Ed Weeden: Mr. Miller? Robert Miller. Yes. Ed Weeden. Mr. Rapley9 Ronald Ripley: Yes. Ed Weeden' Mr Salle'° Charles Salle" Yes. Ed Weeden. Mr Strangev Joseph Strange. Yes. AYE 9 NAY 0 ANDERSON AYE CRABTREE AYE DIN AYE HORSLEY KATSIAS AYE KNIGHT AYE MILLER AYE RIPLEY AYE SALLE' AYE STRANGE AYE WOOD Ed Weeden: By a vote of 9-0, the motion passes ABS 0 ABSENT 2 ABSENT ABSENT SALTM EADOW BAY, L.L.C. / # 15 July 9, 2003 General Information: APPLICATION NUMBER: L06-214-STC-2003 REQUEST' ADDRESS: Street Closure Port~on of Street G - Plat of Bean Garden Sahmeadow LLC / /z / iiI PD-H (A 12) Street Closure Street G A-56 ELECTION DISTRICT: SITE SIZE: STAFF PLANNER: 6 - BEACH O. 119 acres Carolyn A.K Smith Planning Commission Agenda July 9, 2003 SALTMEADOW BAY, L.L.C. / # 15 Page 1 CITY OF VIRGINIA BEACH AGENDA ITEM ITEM: Salt Meadow Bay, L.L.C.- Street Closure MEETING DATE: August 26, 2003 · Background: Application of Salt Meadow Bay, L.L C for the dJsconhnuance, closure and abandonment of Street G located on the northeast s~de of South Oriole Dnve, approximately 550 feet northwest of Barberton Drive DISTRICT 6 - BEACH The purpose of this request ~s to close a port~on of Street G (a 23.4 foot w~de, unimproved right-of-way) for incorporation into the Salt Meadow Bay Apartment project currently under construcbon Considerations: This street, named Street G, is currently unimproved Surrounding properties along th~s nght-of-way are zoned, R-7 5 Residential D~stnct, A-12 Apartment District, A-24 Apartment D~stnct, PD-H2 w~th an A-12 Apartment District overlay, and Conditional A-36 Apartment Distnct The property to the east ~s part of the Salt Meadow Bay Apartment complex, currently under construction, that was approved for street closures and condibonal rezon~ngs ~n 2001 and 2002 Under the same ownership, a Change of Zoning was also granted, along w~th a street closure, for a parcel across South Oriole Drive for the development of s~ngle-family dwellings ~n a condominium form of ownership ~n March of 2003. The Wewers have determined that closure of th~s street will not be of inconvenience to the pubhc The Planning Commission placed th~s ~tem on the consent agenda because ~t wdl be incorporated into the previously approved Salt Meadow Bay Apartment project. Staff recommended approval There was no opposition to the proposal. Recommendations: The Planning Commission passed a mobon by a recorded vote of 8-0 w~th 1 abstenbon to approve this request w~th the follow~ng conditions. Salt Meadow Bay, L.L.C Page 2 of 2 The City Attorney's Office shall make the final determination regarding ownership of the underlying fee The purchase price to be pa~d to the C~ty shall be determined according to the "Policy Regarding Purchase of C~ty's Interest ~n Streets Pursuant to Street Closures," approved by C~ty Councd. Cop~es of the pohcy are avadable ~n the Planning Department. . The applicant shall resubd~wde the property and vacate ~nternal lot hnes to ~ncorporate the closed area ~nto the adjoining parcels The plat shall be submitted and approved for recordation prior to final street closure approval . The apphcant shall verify that no private utd~t~es ex~st w~th~n the right-of- way proposed for closure Prehminary comments from the ublity companies ~nd~cate that there are no private utilities w~thin the right-of-way proposed for closure. If private utd~t~es do ex~st, easements satisfactory to the utdity company shall be prowded Closure of the rIght-of-way shall be contingent upon compliance w~th the above stated conditions w~th~n 365 days of approval by C~ty Councd. If the conditions noted above are not accomphshed and the final plat ~s not approved w~thin one year of the City Council vote to close the right-of-way th~s approval shall be considered null and void. Attachments: Ordinance Staff Rewew D~sclosure Statement Planning Commission Minutes Location Map Recommended Action: Staff recommends approval Planning Commission recommends approval Submitting Department/Agency: Planning Department~l/l~ ORDINANCE NO. IN THE MATTER OF CLOSING, VACATING AND DISCONTINUING A PORTION OF THAT CERTAIN STREET KNOWN AS "STREET G" AS SHOWN ON THAT CERTAIN PLAT ENTITLED: "EXHIBIT 'A' SHOWING RIGHT-OF-WAY CLOSURE OF STREET "G" "BEAN GARDEN" (MB 16, PG 53) VIRGINIA BEACH, VIRGINIA" WHEREAS, on August 26, 2003, Saltmeadow Bay, L.L.C. applied to the Council of the City of Virginia Beach, Virginia, to have the hereinafter described street discontinued, closed, and vacated; and WHEREAS, ~t ~s the judgment of the Council that said street be discontinued, closed, and vacated, subject to certain conditions hawng been met on or before August 25, 2004; NOW, THEREFORE, SECTION I BE 1T ORDAINED by the Council of the City of Virg~ma Beach, Virginia, that the hereinafter described street be discontinued, closed and vacated, subject to certain conditions being met on or before August 25, 2004: All that certmn piece or parcel of land situate, lying and being in the C~ty of Virginia Beach, Vlrg~ma, designated and described as "RIGHT-OF-WAY OF STREET 'G' HEREBY CLOSED AREA GPIN: 2418-70-6978, 2418-70-3561, SNF 2418-80-0689 = 5,174 SQ FT. OR 0 119 ACRES" shown as the cross-hatched area on that certain plat entitled. "EXHI]3IT 'A' SHOWING RIGHT-OF- WAY CLOSURE OF STREET "G" "BEAN GARDEN" (MB 16, PG 53) VIRGINIA BEACH, VIRGINIA" Scale' 1"= 50', dated 4/30/03, prepared by MSA, P.C, a copy of which is attached hereto as Exhibit A SECTION II The following conditions must be met on or before August 25, 2004 1 The City Attorney's Office will make the final determination regarding ownership of the underlying fee. The purchase price to be paid to the City shall be determined according to the "Policy Regarding Purchase of City's Interest in Streets Pursuant to Street Closures," approved by City Council Copies of said policy are available in the Planning Department 2 The applicant shall resubdlvlde the property and vacate internal lot lines to ~ncorporate the closed area into the adjoining parcels. The resubdlvlslon plat shall be submitted and approved for recordation prior to final street closure approval 3 The applicant shall verify that no private utilities exist within the right-of-way proposed for closure. Preliminary comments from the utility companies indicate that there are no private utilities within the right-of-way proposed for closure. If private utilities do exist, the applicant shall provide easements satisfactory to the utility companies. 4 Closure of the right-of-way shall be contingent upon compliance with the above stated condltmns within 365 days of approval by City Council If all conditions noted above are not accomplished and the final plat is not approved within one year of the City Council vote to close the roadway, this approval will be considered null and void. SECTION III 1 If the preceding conditions are not fulfilled on or before August 25, 2004, this Ordinance will be deemed null and void without further action by the City Council. 2 If all con&nons are met on or before August 25, 2004, the date of final closure is the date the street closure ordinance ~s recorded by the C~ty Attorney SECTION IV 3. A certffied copy of th~s Ordinance shall be filed ~n the Clerk's Office of the Circuit Court of the C~ty of Vlrg~ma Beach, V~rg~ma, and ~ndexed ~n the name of the CITY OF VIRGINIA BEACH as "Grantor." Adopted by the Council of the C~ty of V~rg~ma Beach, V~rg~ma, on th~s ~ ,2003. day of CA-8838 July 14, 2003 F \DataLaJ'Y~oi'm~\Street Closure\WORKING\CA8838 ord2 doc APPROVED AS TO CONTENT Planmng Department APPROVED AS TO LEGAL SUF~Y ~ity Atto 'm~v~~~1~ BIRDNECK VILLAGE APARTMENTS SECTION ONE (MB G~, PC 2G) GPIN 2 4 7 8- ?O- G ~ ?L? LOT 21, BLOCK 7 "BEAN GAt~DEN" (MB 16, PC 53) GPIN 2418- 70- .T172 LOT 1~, BLOCK 7 ''BEAN GARD£N" GP/N 2 4 ~ 8- 70-.~ ~ 72 LOT 17, BLOCK 7 ''BEAN GARDEN" (MB 16, PG 53) GPIN 2418- 70- J172 PA 2~o S~OT(MB'~EAN 17'31'07" 21,11~ 50 GARDEN" BLOCK PC 00' W 55) ~///~///5 ~ 2.18 LOT 2~ BLOCK B '~N G~eD~N" me ~ ~C 55) LOT 1~ BLOCK 8 "BEAN GARDEN" (MB 16, PC 5z) GPIN 2418-70-4405 PARCEL 'A ' "SALT MEADOW BAY" INS T NO 200302270030085 GPIN 2¥18-80-0G89 DENOTES RIGHT-OF-WAY OF STREET "G" HEREBY CLOSED AREA = 5,174 SQ FT OR 0119 ACRES JOB# 05058 ZONED N/A EXHIBIT 'A' SHOWING RIGHT-OF- WA Y CL O..~Ut~E OF S Tt~EE T "G " "BEAN GARDEN" (MB 16, PG 53) VIRGINIA BEACH, VIRGINIA MSA, P.C. Landscape Design · Planning Surveying Engineering. Environmental Sciences $03J ROUSE DRIVE, VIRGINIA BEACH, VA 23462-J708 PHONE (757) 490-9264 FAX (757) 490-0614 DATE 4/30/03 SCALE 1"=50' OWN BY GMZ PLAT RECORDED IN MB 16, PO 53 PURPOSE: To close a portion of Street G (a 23 4 foot wide, unimproved right-of- way) for ~ncorporat~on ~nto the Salt Meadow Bay Apartment project currently under construcbon. Land Use, Zoning, and Site Characteristics: Exisbn,q Land Use and Zonin.a This street, named Street G, ~s currently unimproved. Surrounding properties along th~s right-of-way are zoned, R-7 5 Residential D~stnct, A-12 Apartment Distnct, A-24 Apartment D~str~ct, PD-H2 with an A-12 Apartment D~stnct overlay, and Conditional A-36 Apartment Distnct Surrounding Land Use and Zon~n.q North: South: East: West: · Apartments / A-12 Apartment D~stnct · South Onole Drive, s~ngle-famdy dwellings / PD- H2 w~th an A-12 Apartment D~stnct overlay, A-24 Apartment D~strict · S~ngle-fam~ly dwelhngs, apartments under construction / R-7.5 Residential D~str, ct, Condibonal A-36 Apartment D~stnct · Apartments / A-12 Apartment Distnct Zonin.q H~story The property to the east is part of the Salt Meadow Bay Apartment complex, currently under construcbon, that was approved for street closures and conditional rezon~ngs in 2001 and 2002. Under the same ownership, a Change of Zomng was also granted, along w~th a street closure, for a parcel across South Onole Drive for the development of s~ngle famdy dwellings ~n a condominium form of ownersh,p in March of 2003 Planning Commission Agenda July 9, 2003 SALTMEADOW BAY, L.L.C. I # 15 Page 2 Facilities and Services Water and Sewer There are no C~ty public water or sewer ut~l~bes located w~th~n th~s right-of-way nor are there any concerns related to the Hampton Roads San~tabon D~stnct facdit~es or Virginia Power facilities Public Safety Police: Fire and Rescue: No Comments No Comments Comprehensive Plan The Comprehensive Plan Map designates this area of the city as Suburban Residential and planned for residential uses at or below 3 5 units per acre. This designabon reflects the old zoning pnor to any update to the Plan or modification due to surrounding rezon~ng alterations The combining of this property w~th the adjacent apartment complex currently under construction ~s consistent with C~ty Councd's recent rezon~ng decisions ~n the wc~n~ty of this street Evaluation of Request This request for a Street Closure for Street G ~s recommended for approval subject to the conditions listed below The V~ewers have determined that closure of this street will not be of inconvemence to the pubhc Conditions 1. The C~ty Attorney's Office shall make the final determmabon regarding ownersh,p of the underlying fee The purchase pnce to be pa~d to the C~ty shall be determined according to the "Pohcy Regarding Purchase of City's Interest ~n Planning Commission Agenda July 9, 2003 SALTMEADOW BAY, L.L.C. I # 15 Page 3 Streets Pursuant to Street Closures," approved by City Council Cop~es of the policy are available In the Planning Department The applicant shall resubd~wde the property and vacate internal lot lines to ~ncorporate the closed area ~nto the adjoining parcels The plat shall be submitted and approved for recordahon prior to final street closure approval. The apphcant shall venfy that no private ubht~es ex~st within the right-of-way proposed for closure. Prehm~nary comments from the ubl~ty companies ~nd~cate that there are no private ubhties w~th,n the right-of-way proposed for closure If private utilities do exist, easements satisfactory to the ubhty company, shall be prowded Closure of the right-of-way shall be contingent upon comphance with the above stated conditions w~th~n 365 days of approval by C~ty Council If the cond~hons noted above are not accomphshed and the final plat is not approved w~th~n one year of the City Council vote to close the right-of-way th~s approval shall be considered null and void NOTE: Further conditions may be required during the admin, istration of applicable Cit~ Ordinances. Planning Commission Agenda July 9, 2003 SALTMEADOW BAY, L.L.C. / # 15 Page 4 Planning Commission Agenda July 9, 2003 SALTMEADOW BAY, L.L.C. I # 15 Page 5 Planning Commission Agenda July 9, 2003 SALTMEADOW BAY, L.L.C. I # 15 Page 6 DISCLOSURE STATEMEN~ Applicant's Name: Saltmeadow Bay LLC by M~chaei J Barrett List All Current Property Owners. Andrew S. Fine. Morris H Frae Michael J Barrett APPLICANT DISCLOSURE If the applicant is a CORPORATION, hst all officers of the Corporation below (Attach list if necessary) II I I if the applicant is a PARTNERSHIP, FIRM, or other UNINCORPORATED ORGANIZATION, list all members or partners ~n the organization below (Attach hst /f necessary) Andrew S Frae, Morns H F~ne, M~chael J Barrett ............... 1"1 Check here ~f the apphcant ~s NOT a corporabon, partnership, firm, or other unincorporated organization if the applicant is not the current owner of the property, complete the Property Owner DiscIosure section below: PROPERTY OWNER DISCLOSURE If the property owner is a CORPORATION, list all officers of the Corporation below: (Attach hst if necessary) If the property owner is a PARTNERSHIP, FIRM. or other UNINCORPORATED ORGANIZATION, list all members or partners ~n the organization below. (Attach hst ~f necessary) Andrew S Fine. Morris H Fine, Michael J Barrett r"l Check here if the property owner is NOT a corporation, partnership, firm, or other umncorporated organization CERTIFICATION' ! certify that the information contained herein is true and accurate, t ; /'' J', ,./~,~ M.J. Barrett Signature Print Name ........................................ III I II II Street Closure Apphcat~on Page 8 of 15 mod~hed t0 ~6 2002 ,, Planning Commission Agenda July 9, 2003 SALTMEADOW BAY, L.L.C./# 15 Page 7 Item # 15 Salt Meadow Bay, L L C. Discontinuance, closure and abandonment of Street "G" North side of South Oriole Drive District 6 Beach July 9, 2003 CONSENT Charhe Salle': Is there any opposition to th~s application? Next item is Item #20, C~ty of Virginia Beach. Sorry, number 15, which is Salt Meadow Bay, L L.C And, this is a street closure of a portion of"G" Street. Michael Barrett' My name is Mike Barrett. I represent the apphcant and the conditions are fine w~th us Charlle Salle': And you have four conditions Is there any opposition to this apphcatlon? Thank you. Michael Barrett: Thank you. Charhe Salle': And, I would move that we approve the consent agenda consisting of Item #15 with four conditions. Ronald Pdpley: So we have a motion to approve the consent agenda as read by Charlie Salle' Do I have a second9 I have a second by Gene Crabtree. I've asked Kathy Katslas she would comment on Item/415. Kathy. Kathy Katslas: Item #15, Salt Meadow Bay, L L.C. is a street closure and it's portion of Street "G" and the street is adjacent to a subdivision that we approved recently, Salt Meadow Bay Apartment Complex. And, the reason why they want to close the street ~s to make the internal lot lines to incorporate into the adjoining parcels. Ronald Pdpley: Thank you very much. We do have a motion on the floor and I believe we have a second. Yes Robert Mdler: I need to abstain from Item #15. My firm is working on the project. Ronald Rlpley: Did you get that Ed? I would like to call for the vote. So all in favor of the motion raise your hand. Opposed9 AYE 8 NAY 0 ABS 1 ABSENT 2 ANDERSON AYE CRABTREE AYE Item # 15 Salt Meadow Bay, L.L.C. Page 2 DIN AYE HORSLEY KATSIAS AYE KNIGHT AYE MILLER RIPLEY AYE SALLE' AYE STRANGE AYE WOOD Ronald R~pley: The motion carries ABS ABSENT ABSENT ./ No APPOINTMENTS ii i · i I MINOI:LITY BUSINESS COUNCIL PARKS and RECREATION COMMISSION TDEWATER REGIONAL GROUP HOME COMMISSION 0. UNFINISHED BUSINESS P. NEW BUSINESS Q. ADJOURNMENT CITY OF VIRGINIA BI,ACH SUMMARY OF COUNCIL ACTIONS V 0 M B L C M E S L D^T£ August 12, 2003 D C A R C A W PAGE 1 I J L D N R H N I E E O A D D E M U L W Z U N N O O E I E S O AGENDA E R E A X R V D V O O ITEM # SUBJECT MOTION VOTE L E S N F E T A N D I ~ Il 'i i i II Il I BRIEFINGS A CONVENTION CENTER STATUS Dean Block, D~rector, Dept of Pubhc Works B TAX CREDIT PROGRAM Steven Thompson, Chmf Fmancml Officer C. COMPREHENSIVE PLAN Robert J Scott, Director, Department of Planning I II/II1/ CERTIFICATION OF CLOSED CERTIFIED 11-0 Y Y Y Y Y Y y y y y y IV/V/ SESSION VI-E F MINUTES - August 5, 2003 APPROVED 9-0 Y Y Y Y Y Y Y A Y A Y G/H PRESENTATION: Removed from Agenda by Consensus REVENUE SHARING IN LIEU OF TAXES - Back Bay Wddhfe Refuge/Mackay Island , ,, I MAYOR'S PRESENTATION RESOLUTIONS IN RECOGNITION: 3 AWARDEES 11TM SPEC. PLYMPICS WORLD SUMMER GAMES ACHIEVEMENT FOR EXCELLENCE IN Patnc~a A Phflhps, FINANCIAL REPORTING - GFOA D~rector - Finance J/K-1 PUBLIC HEARING: No Speakers FARMER'S MARKET LEASES a. Bergey's D-,ury Farm, Inc b Chapman's Flowers/Gifts c Country Butcher, lnc d Creekmore's Place e Hare Farms f Holland Produce g Reflecuons of the Heart h Secret Garden ~ V~rgmla Garden CITY OF VIRGINL4 BEACH SUMMARY OF COUNCIL ACTIONS V 0 M B L C M E S L DATE August 12, 2003 D C A R C A W PAGE 2 I J L D N R H N I E E O A D D E M U L W Z U N N O O E I E S O AGENDA E R E A X R V D V O O ITEM # SUBJECT MOTION VOTE L E S N F E T A N D · i i i L-1 Ordinances to AUTHORIZE LEASES at ADOPTED, BY 11-0 Y Y Y Y y y y y y y y Farmer's Market. CONSENT a Leonard Bergey t/a Bergey's Dairy Farm, Inc #14 b Judy Chapman t/a Chapman's Flowers and Gifts f#3/4 c Beverly Hat&son t/a Country Butcher, Inc. #12 d Elsie Creekmore t/a Creekmore's Place #7/8 e DavM Hare t/a Hare Farms f#13 f Mark Holland t/a Holland Produce #5/6 g Laurie Moser t/a Reflections of the Heart # 10 h Laurie Moser t/a Secret Garden # 11 ~ M~chele Shean t/a %rgmla Garden #23/24/27 2 Ordinance to ABOLISH the Youth Services ADOPTED, BY 11-0 Y Y Y Y Y Y y y y y y Coordinating Committee CONSENT 3 Ordinances to AUTHORIZE acqutsttton for r-o- w/easements by a~eement or condemnation a Water/samtary sewer/drainage re repatrs to ADOPTED, BY 11-0 Y Y Y Y Y Y Y Y y y y Stumpy Lake transmission mare CONSENT b New samtary sewer pump ~tat~on stte to replace ADOPTED, BY 11-0 Y Y Y Y Y Y Y Y Y Y y the emst~ng Pembroke Manor South Pump CONSENT Station #354 m Central Bus~ness D~stnct 4 Ordinance to AUTHORIZE acqmsiuon of Block ADOPTED 10-1 Y Y Y N Y Y Y Y Y Y Y 6, TOWN CENTER from GALIOTOS FAMILY/transfer $2,250,000 for ~nfiastmcmre 5 Ordinance to AUTHORIZE Agreement w~th ADOPTED, BY 1 I-0 Y Y Y Y Y Y Y Y Y Y Y SPSA for "White Goods" recycling facility/Lease CONSENT Opuon for a "Yard Waste" facility at Landfill II CITY OF VIRGINIA BEACH SUMMARY OF COUNCIL ACTIONS V 0 M B t. C M E S L DATE August 12, 2003 D C A R C A W PAGE 3 I J L D N R H N I E E O A D D E M U L W Z U N N O O E I E S O AGENDA E R E A X R V D V O O ITEM # SUBJECT MOTION VOTE L E S N F E T A N D 6 Resolution to AUTHORIZE Working ADOPTED, BY 11-0 Y Y Y Y Y Y y y y y y Agreement CRIMES with CONSENT Chesapeake/Hampton/James C~ty County/ Newport News/Norfolk/Poquoson,/Portsmouth/ Smithfield/Suffolk/York County/Wdl,amsburg 7 Ord/nance to AU'II-IORIZE encroachment into ADOPTED, BY 11-0 Y Y Y Y Y y y y y y y pomons Cfly's r-o-w by DAVID H./JEAN H. CONSENT KLEIN for bulkhead/replacement of deteriorated bulkhead with rip-rap and sand tn Kempes Lake at 204 Oakengate Turn (DISTRICT 2 - KEMPSVILLE) 8 Ord/nance to establish CIP re Back Bay ADOPTED 11-0 Y Y Y Y Y y y y y y y Waterway Access/ACCEPT/APPROPRIATE a $150,000 federal grant/AUTHORIZE Cooperative Agreement for an access facility .. 9 Ordinances AUTHORIZING comlgnsat~on ADOPTED 11-0 Y Y Y Y Y Y Y Y Y y y increases for C~ty Manager/City Attomey/C~ty Assessor/City Clerk 10 Ordinance to ACCEPT/APPROPRIATE a ADOPTED, BY 11-0 Y Y Y Y Y Y y y y y y $95,806 Federal grant/S245,342 t~om other sources CONSENT tn Community SemcesMHfMR/SA spectal revenue to fund services to chents 11 Resolution re issuance of Multi-Family Housing ADOPTED, BY 11-0 Y Y Y Y Y Y Y y y y y Bonds not to exceed $5,500,000/Refundmg Bonds CONSENT of $7,500,000 for CP Atlantic, LP. (Atlantis . Apartments Project) 999 Atlanus Drive 12 Resolution ASSIGNING admmls~'anon of FOIA ADOPTED, BY 11-0 Y Y Y Y Y Y Y Y y y y to C~ty Attorney CONSENT , M/1 Ordinance to AMEND Sec DEFERRED TO 11-0 Y Y Y Y Y Y y y y y y 111/225 1/601/901/1521 of CZO to allow Be.__d 8/26/03 and Breakfast Inns as a CUP ~n certain Apartment/Business/Resort Tourist Districts/AMEND conditions for Bed/BreakYast Inns CITY OF VIRGINIA BEACH SUMMARY OF COUNCIL ACTIONS V 0 M B L C M E S L DAT£ August 12, 2003 D C A R C A W PAGE 4 I J L D N R H N I E E O A D D E M U L W Z U N N O O E I E S O AGENDA E R E A X R V D V O O ITEM # SUBJECT MOTION VOTE L E S N F E T A N D 2 GREGORY NELSON CUP re bed/breakfast at DEFERRED TO 1 l-0 Y Y Y Y Y Y Y Y y y y 2420 Arctac Avenue (DISTRICT 6 - BEACH) 8/26/03 3 OCEAN BEACH CLUB, COZ from RT-I to ADOPTED, BY 11-0 Y Y Y Y Y Y Y Y y y y Conditional R-T-2 for multt-use CONSENT retail/convention/meeting facd~t~es at Atlantic Avenue/34u~ Street (DISTR/CT 6 - BEACH) , 4 RIGANTO, L.L.C. CQZ at Sandbndge Road/Pnncess Anne Road APPROVED AS 1 l-0 Y Y Y Y Y Y Y Y y y y PROFFERED Parcel I from AG-I/2 to Conditional R-20 (185 2 ac) Parcel 2 from AG-l/2 to Conditional P-I (90 8 ac) CUP. APPROVED AS 11-0 Y Y Y Y Y Y Y Y Y Y y CONDITIONED (1) Open Space (2) recreational/amusement fatalities of outdoor nature (horse stables/nd~ng rmv) , 5 SAIR ENTERPRISES, INC DEFERRED TO I 1-0 Y Y Y Y Y Y Y Y Y Y y MODIFICATION of a CUP re auto service 8/26/03 station (approved February 13, 2001) to remove a canop~,/ctuto storage use/expand approved auto repal, r/a car wash at 3096 Soulh Lynnhaven Road (DISTRICT 3 - ROSE HALL) 6 FORT WORTH DEVELOPMENT, INC. APPROVED/ 6-5 Y Y N N N N Y Y Y Y N CUP re multi-family Condo m B-4 Shore Drive CONDITIONED/ Comdor Overlay D~stnct at D~nw~dd~e Road AS REVISED and DuPont Circle (DISTRICT 4 - BAYSIDE) CITY OF VIRGINIA BEACH SUMMARY OF COUNCIL ACTIONS V 0 ~ M B L C M E S L DATE August '12, 2003 D C A R C A W PAGF: 5 I J L D N R H N I E E O A D D E M U L W Z U N N O O E I E S O AGENDA E R E A X R V D V O O ITEM # SUBJECT MOTION VOTE L E S N F E T A N D , 7 VICTORY CHAPEL CUP re church at 6644 APPROVED/ 10-0 Y Y A Y Y Y Y Y y y y Indian Raver Road CONDITIONED BY B (DISTRICT 2 - KEMPSVILLE) CONSENT S T A I N E D 8 GATEWAY CHRISTIAN SCHOOL CUP re APPROVED/ 11-0 Y Y Y Y Y Y y y y y y a private school addition at 5473 CONDITIONED, V~rgm~a Beach Boulevard BY CONSENT (DISTRICT 2 - KEMPSVILLE) 9 CUSTOM STONE COMPANY CUP re a bulk APPROVED/ 11-0 Y Y Y Y Y Y y y y y y storage yard at 2621 Quahty Court. CONDITIONED, (DISTRICT 6 - BEACH) BY CONSENT 10 Resolutton to REFER to Planning Commission REFERRED TO 11-0 Y Y Y Y Y Y y y y y y proposed amendments to Sec 111/233 1/1501/ PLANNING 1511/1521 CZO re CUPs forsale of alcohol COMMISSION TO m RT-I/RT-2/RT-3 INCLUDE OTHER ZONING AREAS WITHIN THE CITY, BY CONSENT N APPOINTMENTS 11-0 Y Y Y Y Y y y y y y y BEACHES AND WATERWAYS COMMISSION APPOINTED - 3 Year Term 07/01/03 - 6/30/06 Rodney Voeiker CITY OF VIRGINIA BEACH SUMMARY OF COUNCIL ACTIONS V 0 M B L C M E S L DATE August ~12, 2003 D C A R C A W PAGE 6 I J L D N R H N I E E O A D D E M U L W Z U N N O O E I E S O AGENDA E R E A X R V D V O O ITEM # SUBJECT MOTION VOTE L E S N F E T A N D 1 1-0 Y Y Y Y Y Y y y y y y DEVELOPMENT AUTHORITY REAPPOINTED - 4 Year Term 09/01/03 - 08/31/07 Robert E. Fentress Robert F. Hagans, Jr. APPOINTED - 4 year term 07/01/03 - 6/30/07 Max C. Bartholomew, .Jr. S Paul Michaels Jerry Miller Ehzabeth "Boo" Twohy (Ad&tlonal four to make eleven ,n accordance w~th new State Code effect,ve 7/1/03) FRANCIS LAND HOUSE BOARD OF 11-0 Y Y Y Y Y Y Y y y y y GOVERNORS APPOINTED - 3 year term Unexpired to 12/31/03 Plus 3 years 01/01/04 - 12/31/06 Eugene Lanmng HAMPTON ROADS PLAN~NING 11-0 Y Y Y Y Y Y Y Y y y y DISTRICT COMMISSION (HRPDC) REAPPOINTED - 2 year term 09/01/03 - 06/3-/05 James L. Wood (Changed expiration date to June 30 since all other HRPDC appointments expire ~n June) MINORITY BUSINESS COUNCIL 11-0 Y Y Y Y Y Y Y Y Y Y y APPOINTED - 2 year term 06/01/03 - 05/30/05 Prescott Sherrod Alonzo Brandon PARKS and RECREATION COMMISSIOn RESCHEDULED B Y C O N S E N S U S CITY OF VIRGINIA BEACH SUMMARY OF COUNCIL ACTIONS O ~ C M E S L DAT£ August 12, 2003 D C A R C A W PAGE 7 I J L D N R H N I E E O A D D E M U L W Z U N N O O E I E S O AGENDA E R E A X R V D V O O ITEM # SUBJECT MOTION VOTE L E S N F E T A N D II I PUBLIC LIBRARY BOARD 11-0 Y Y Y Y Y y y y y y y REAPPOINTED - 3 year term 09/01/03 - 08/31/06 Patrick R. Deans Charles E. Flowers Sandra J. Tmnter M~ssy Jackson (Student for ONE YEAR 09/01/03 - 05/31/04) APPOINTED 09/01/03 - 08/31/06 Ernestme M,ddleton M~chaei Cloud Butler REVIEW AND ALLOCATION 11-0 Y Y Y Y Y Y y y y y y COMMITTEE - COG REAPPOINTED - 3 year term 09/01/03 - 8/31/06 Dav,d S Redmond SHORE DRIVE ADVISORY COMMITTEE~ 11-0 Y Y Y Y Y Y y y y y y APPOINTED - 3 year terr~ 07/01/03 - 06/30/06 .lam Arnold . TIDEWATER REGIONAL GROUP HOME RESCHEDULED B Y C O N S E N S U S COMMISSION N/O/P ADJOURNMENT l0 07 PM