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HomeMy WebLinkAboutAUGUST 26, 2003 MINUTESCITY COUNCIL MAYOR MEYEIL4 E OBERNDORF, At-Large VICE MAYOR LOUIS R JONES, Baystde -Dtstrtct 4 HARRY E DIEZ, EL, Kempsvtlle -Dtstrtct 2 MARGARET L EURE, Centervtlle -Dtstrtct 1 REBA S McCLANAN, Rose Hall -Dtstrtct 3 RICHARD A MADDOX,, Beach -Dtstrtct 6 JIM REEVE, Prtncess Anne -Dtstrtct 7 PETER W SCHMIDT, At-Large RON A VILLANUEVA, At-Large ROSEMARY WILSON, At-Large JAMES L WOOD, Lynnhaven -Dlstrtct 5 JAMES K SPORE, Cay Manager LESLIE L LILLEE Ct~y Attorney RUTH HODGES SMITH, MMC, Ctty Clerk CITY OF VIRGINIA BEACH "COMMUNITY FOR A LIFETIME" CITY COUNCIL AGENDA 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 26 August 2003 I. CITY COUNCIL PRESENTATION - Conference Room- 1:00 PM Ao JAMESTOWN / VIRGINIA BEACH 1607-2007 ANNIVERSARY Mac Rawls, Steenng Committee Chmr Wflham Cone, Director of Jamestown 2007 II. CITY MANAGER'S BRIEFINGS A LYNNHAVEN RIVER ENVIRONMENTAL RESTORATION H. Clayton Bemmk, Enwronmental Management Programs Adm~mstrator Department of Planmng B° THOROGHGOOD HOUSE CONVEYANCE Lynn Clements, D~rector, Department of Museums and Cultural Arts III. REVIEW OF AGENDA ITEMS IV. CITY COUNCIL COMMENTS 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 FORMAL SESSION A. CALL TO ORDER - Mayor Meyera E. Obemdorf B. INVOCATION: Dr. Dwight Clmstenbury 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 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 Lo ORDINANCES/RESOLUTION , 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 build a pier in Crab Creek with separate apphcatlons 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 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. m. PLANNING Ordinance to AMEND the City Zoning Ordinance (CZO) re height regulations affecting air navigation. Recommendation. APPROVAL , Ordinance to AMEND §§ 111. 225.1,601,901 and 1521 of the City Zomng Ordinance (CZO) to allow Bed and Breakfast Inns as a Conditional Use ~n certain Apartment, Business and Resort Tourist Districts; and, FURTHER AMEND the specific conditions for Bed and Breakfast Inns. Deferred: Recommendation: August 12, 2003 APPROVAL . Application of GREGORY NELSON for a Condtttonal Use Permtt re a Bed and Breakfast Inn at 2420 Arctic Avenue. (DISTRICT 6- BEACH) Deferred: Recommendation: August 12, 2003 APPROVAL Apphcation of STEVEN WRAY O'NEAL for the expansion of a Nonconforming Use to construct a detached garage at 420 Davis Street. (DISTRICT 4- BAYSIDE) Recommendation: DENIAL o Application of PATIO ENCLOSURES, INC. for the expansion of a Nonconforming Use to construct a sunroom at 204 B 75th Street. (DISTRICT 5- LYNNHAVEN) Recommendation: DENIAL o Application of ST. NICHOLAS CATHOLIC CHURCH for a MODIFICATION of Conditions on a Use Permit re a columbarium (approved by C~ty Council on April 8, 2003) at 712 Little Neck Road. (DISTRICT 5 - LYNNHAVEN) Recommendation. APPROVAL . Application of NICHOLSON, INC. for a MODIFICATION of the Indian Lakes PD-H1 Land Use Plan to allow a mm~ storage at Ferrell Parkway, west of Indian Lakes Boulevard (DISTRICT 1 - CENTERVILLE) Recommendation: APPROVAL , Application of SAIR ENTERPRISES, INC. for a MODIFICATION of a Con&ttonal Use Permit 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) Deferred: Recommendation: August 12, 2003 APPROVAL . Applications of D. W. GATLING, INC. on the west s~de of Oceana Boulevard, south of Beacons Reach Drive: (DISTRICT 6 - BEACH) a. bo Change of Zomng District Classification from R-5D Restdenttal Duplex Dtstrtct to B-2 Communtty Bustness Dtstrtct Conditional Use Permit for a mini-warehouse and self storage Recommendation' APPROVAL o~ OUR MINUTES VIRGINIA BEACH CITY COUNCIL Virginia Beach, Virginia 26 August 2003 Mayor Meyera E Oberndorf called to order the Ctty Manager's Brtefing re JAMESTOWN/I/IRGINIA BEACH1607-2OO7ANNIVERSARY, tn the Ctty Council Conference Room, City Hall, on Tuesday, August 26, 2003, at 1 O0 P M Counctl Members Present Harry E Dtezel, Margaret L Eure, Vtce Mayor Louts R Jones, Reba S McClanan, Rtchard A Maddox, Mayor Meyera E Oberndorf, Jtm Reeve, Peter g/Schmtdt, Rosemary Wtlson and James L Wood Council Members Absent Ron A Vtllanueva [Entered 4 O0 P M - Doctor's appotntment] -2- MAYOR'S COMMENTS ITEM # 51559 Mayor Oberndorf advtsed the US Conference of Mayors wtll lead a delegatton of rune (9) mayors on a Mission to Africa 2003 Thts tnternattonal mtsston, led by Conference Prestdent, Mayor dames A Garner, Hempstead, New York, ts the largest mtsston undertaken tn the 71-year htstory of the organtzatton It ts the second mtsston to Afrtca for the U S Conference of Mayors and ts to be the the begmmng of a sustaznable presence andpartnershtp wtth U S Mayors and Afrtcan Mayors Addtttonally, Conference Prestdent Mayor James A Garner was appotnted by Prestdent George W Bush to be an offictal delegate to the Sustatnable Development Summit tn Johannesburg, South Afrtca last Fall The delegatton wtll travel to four (4) Afrtcan natrons South Afrtca, Namtbta, Swaztland and Uganda The Mtsston to Afrtca wtll focus on the tssue of HIV/AIDS tn Afrtca and tts tmpact on economtc development and youth development tn Afrtcan ctttes and natrons Thts mtsston wtll allow US Mayors to share thetr expertences wtth Afrtcan Mayors and butld collaborattvepartnershtps between U S Ctttes and Afrtcan ctttes tn response to the devastatmg tmpact of the AIDS eptdemtc tn Afrtca Mayor Oberndorf was honored to be chosen as a Member of thts Delegatton Mayor Oberndorf wtll be leadtng a delegation into Manztnt, Swaztland She wtll be departtng late Sunday afternoon, August 31st and returmng September 9, 2003 This trtp wtll tnvolve no cost to the City of Vtrgtma Beach The Mission to Africa 2003 ts a collaborattve effort between The U S Conference of Mayors, the Alliance of Mayors and Municipal Leaders on HIV/AIDS in Africa and ts funded parttally through the following bustness partners The Coca-Cola Company, Motorola, Altrta and lrtdtum The Centers for Dtsease Control also asststed wtth thts tntttattve August 26, 2003 -3- CITY MANA GER'S BRIEFING JAMES TO WNfKIR GINIA B EA CH 160 7- 2 O0 7 ANNIVERSARY 1:00 P.M. ITEM # 51560 Mac Raw ls, Steering Commtttee Chatr - JAMESTOWN/VIRGINIA BEACH 1607-2007ANNIVERSAR Y, advised the Princess Anne Courthouse move tn the early 1820's was hotly debated and so contested they finally resolved the tssue tn Court The Judge appointed an Arbttratton Commtsston from the Ctty of Norfolk, who made the final dectston to move the Courthouse to tts present locatton Mr Rawls tntroduced Wdham "Wtlly" Cone, Dtrector of Jamestown 2007 Mr Cone has 30 years expertence tn event planntng One of hts most notable accomphshments was the Constttutton Btcentenntal He worked wtth Chtef dusttce Berger tn promottng thts event Mr Cone advtsed betng appomted January 2003 as Dtrector of Jamestown 2007. Jamestown 2007 ts a tremendous opportunttyfor the Commonwealth of Vtrgtnta Jamestown 2007's mtsston ts to create a state wtde momentum, whtch wtll lead to a program wtth nattonal tmpact Through a sertes of thtrteen (13) major nattonal events and programs, many of whtch will be televised, the story of "Why the legacies of Jamestown are just as important today as 400years ago" Jamestown 2007 ts the "first "400tn anntversary tn Amertca Bustness tn America commenced tn Jamestown The 'free enterprtse and capttahsm "began tn Jamestown A partnershtp has been formed wtth the Nattonal Assoctatton of Manufacturers, one of the two largest trade organtzattons tn the Natron, who came to us because manufacturtng (glass blowtng tn 1607) dtd commence at Jamestown Starttng tn the Sprtng of 2006, the new Godspeed (whtch wtll be larger), wtll satl for stx (6) months up the East Coast of the Untted States, port tnto Washtngton, Balttmore, Phtladelphta, New York, Providence, Boston and many smaller ports Thts wtll entatl one to two week stays promottng the Commonwealth of Vtrgtnta There wtlI be land and tourtsm exhtbtts, VIP parttes for medta and press and opportuntttes to tell the story of Vtrgtnta When the Godspeed visits New York, they are confident Katie Courtc (Today Show) will televtse from the shtp A vtdeo has just been completed wtth Katte Courtc tnvtttng everybody to come home to Vtrgtnta, our "Natron's Btrth Place" Thts ts a tremendous markettng opportumty for all of Vtrgmta Later tn the Fall, there wtll be a nattonal teach-tn hve broadcast from the Jamestown sttes tnto every classroom tn.4mertca (90, 000 schools/50-MILLIONstudents) Prtor to thts atrtng, there wtll be currtculum matertaIs sent out to every school tn Amertca relattve the legactes of Jamestown The Smtthsontan Instttute has entered tnto apartnershtp wtth Jamestown 2007 Everyyear, tn Washmgton, D C the Smtthsontan Folk Ltfe Festtval ts held on the Nattonal Mall from the end of June unttl the fourth of July wtth a focus on a country and a state In the Summer of 2007, Vtrgmta and England wtll be focused (cultural bustness, art and educatton showcased) Every year approxtmately 1 2-MILLIONvtsttors attend this Festtval To end the year, a World }Fide Forum on Democracy will be conducted at the University of William and Mary. Jamestown 2007 ts worktng closely wtth the Jamestown and Yorktown Foundatton, the Assoctatton for Preservatton of Vtrgtnta Anttqutttes, the Nattonal Park Servtce and the recently appotnted Federal Government Commtsston, as well as state wtde partners The Ctty of Norfolk wtll parttctpate wtth the tall shtps ~ Nattonal Commemorattve Stamp program wtll be launched through the U S Postal Servtce The Ftrst Freedom Organtzatton from Rtchmond, Vtrgtnta, wtll be launchtng a major program around the reltgtous freedoms NA TO ts planntng a conference durtng thts ttme The Untted States Mthtary ts plannmg many events August 26, 2003 -4- CITY MANAGER'S BRIEFING JAMESTOWN/VIRGINIA BEA CH 1607-2007/INNIVERSAR Y ITEM # 51560 (Continued) Mr Rawls referenced the major events on Aprt126, 2007, There wtll be three (3) shtps anchored off Ftrst Landmg State Park On Aprtl 2t~h, the, Lynnhaven Rtver wtll be explored tn the same manner as the first settlers The Commtttee will reconstruct a "shallow ", a long boat, whtch wtll be rowed up the rtver, maktng several stops along the way Several Ctty Counctl Members wtll be tnvtted toparttctpate On Saturday, Aprtl 27~h, a Boardwalk Htstory Festtval wtll be conducted The settlers stayed three ntghts and four days prtor to movtng on Sunday, Aprt128th, a Commemorattve acttvtty wtll be conducted at Fort Story Thts ts not just a celebratton of 1607, but rather the enttre htstory of Vtrgmta Beach and the Commonwealth Relattve the Htstortcal Reach program, organtzattons are encouraged to develop a "format" hsttng the htstortcal begtnntngs and acttvtttes of each of the htstortcal groups Vartous forums and lectures will be conducted The group has now mcreased to stxty-five (65) members who meet every other month, wtth Commtttee chatrs meet between months There were prtmartly three groups tn our City Native Americans, African Americans and the Enghsh Many more groups have come since then The Committee ts interested tn not just concentrating on these three original groups, but the additional ones, as well Cornell Fuller ts working on thts parttcular aspect Reuntons of htstortcal famthes, t e Thoroughgood, Walt, Land, Kellam etc, are contemplated The Commtttee ts attempttng to enttce some of the local Arts and Cultural groups tojotn the Celebratton Mr Fuller advtsed fourteen (14) ethmc or cultural groups have been tdenttfied Representattves from each one of these groups ts betng appotnted Once thts has been accomphshed, each wtll detatl thetr "story" and contrtbuttons to the htstory In the Aprtl, May, dune trine frame tn the year 2007, tt ts hoped one of the meettng rooms tn the new Conventton Center wtll be utthzed for the presentatton If not posstble, these presentattons wtll be conducted tn the Contemporary Arts Center Counctl Lady Eure suggested Regent Untverstty be contacted Thetr Hall of Justtce ts stmtlar to the House of Burgess Regent Untverstty has a magntficent framtng of the Constttutton August 26, 2003 -5- CITY M/INA GER'S BRIEFING L YNNHA VEN RIVER ENVIR ONMENT/IL RES TOR/I TION 1:25 P.M. ITEM # 51561 Mark Johnson, Pubhc Works -Engtneertng, tntroduced Clay Bermck -Envtronmental Management Planmng, and Bill Johnston, Pubhc Works -Engtneertng, to present the status of the Lynnhaven River Restoration Mr Bermck advtsed the Lynnhaven Rtver ts the Czty 's most developed watershed and covers approxtmately stxty-four (64) square mtles or twenty-one (2I%) percent of the Ctty The Lynnhaven ts home to approxtmately 200, O00 persons or forty-seven (47%)percent of the populatton as of the 2000 Census The Lynnhaven has major tnland water recreattonal opportuntttes and was one of the earhest settlements tn the Ctty The Lynnhaven ts world famous for oysters and possesses the htghest value restdenttal real estate tn the Ctty Mr Berntck &splayed a map of the Lynnhaven Watershed boundary hne The Watershed extends from Ttdewater Communtty College, the Green Run area, to the Inlet at Lesner Brtdge and as far west as the Ctty Boundary wtth Norfolk at Newtown Road (to tnclude Ltttle Neck, Great Neck, the North End, Shore Drtve, extenstve amount of Oceana Naval Atr Statton and First Lan&ng State Park) What are the Needs? Restore Oysters As thetr goal, the Lynnhaven Rtver 2007 Organtzatton tdenttfied restortng oysters to part of the Lynnhaven for edtble human consumptton Improved water quahty for recreatton, fishtng and wtldhfe Envtronmental dredgtng Restore sea grasses Protect vtews and natural scenery Provtde good dratnage Matntatn htgh property values Pubhc access Efforts Currently Underway Federal Army Corps of Engineers study and scope underway State Lynnhaven Watershed Study House Joznt Resolution 62 7 Revtsed Chesapeake Bay Preservatton Area regulattons (must be amended January2004) Local CIP #7-153 ttem addresstng tmprovements to the Lynnhaven Oyster Herttage program Improved regulatory efforts Comprehenstve Plan update Other local efforts Grant to commence work re Watershed Management Plan Other Grassroots tntttattves Lynnhaven Rtver 2007 chartered as a non-profit orgamzatton August 12, 2003 -6- CITY MANA GER'S BRIEFING L YNNHA VEN RIVER ENVIRONMENTAL RESTORATION ITEM it 51561 (Continued) Oyster Heritage Program Current Status of Oysters Lynnhaven Rtver ts hsted as tmpatred by the Department of Envtronmental Quahty and State Health Department pertodtcally water quahty conchttons wtll improve to a point that a small area tn Broad Bay oppostte Bay Island can be used for dtrect markettng Once famous oysters now restrtcted from harvesttng Weakened populatton greater suscepttbthty to chsease Ongoing research acttvtttes Vtrgtnta Instttute of Martne Sctence, Untverstty of Maryland and Old Domtnton Untverstty have found some of the most restltent oysters' tn the enttre Chesapeake Bay are tn the Lynnhaven, whtch may prove a key tn terms of the enttre Chesapeake Bay Restoratton effort Two Cents for Oysters tntttattve Current Initiatives Oyster Heritage Trust Fund Funds from donattons and permtt condtttons last year allowed creatton of 8 ~ acres of oyster ground habitat tn the Lynnhaven Stnce that ttme addtttonal donattons have allowed the creatton thts Summer of another acre and ~ of oyster habttat tn Ltnkhorn Bay (no cost to the city) Seed Oyster Intttattve Chesapeake Bay Foundatton and Lynnhaven Rtver 2007 Organtzatton Thts past Sprtng, 50, 000 seed oysters were placed on the reefs created Reef and Shore Plants Vtrgtnta Martne Resources Commtsston Shell Recychng Program In concert wtth the Restaurant Assoctatton, and Pubhc Works Waste Management, a pubhctty campatgn wtll commence re recychng oyster shells collected tn restaurants Stockptle these shells and add to efforts to restore reefs Army Corps of Engtneers Oyster Restoratton Team Potenttal to have $2 5-MILLION targeted for restortng 1 O0 acres of oyster habttat and 500, 000 seed oysters tn the Lynnhaven by Sprtng 2005 (75%federal funds, 25% local (ctty or state) Develop an Oyster Seed Hatchery constructed tn the Lynnhaven area August 26, 2003 -7- CITY M/tNA GER'S BRIEFING L YNNH/I VEN RIVER ENVIRONMENT~IL RESTORATION ITEM # 51561 (Continued) Mr Bermck advised dtfferent streams of the native oysters have been researched from the Eastern Shore, Baystde, Northern Neck, Middle Pemnsula and the Lynnhaven The native populatton of the Lynnhaven oyster has a higher tolerance for resisting the native diseases so they grow and thrive much better Efforts are underway to replicate thts populatlon and place those seed oysters from L ynnhaven in other parts of the Bay These same charactertstlcs of resthency are continuing To have a viable reproduclng populatlon of oysters and asstst with water quality improvements in the Lynnhaven, approximately 100 to 150 acres are needed Mr Johnston reiterated the Goal Restore the Lynnhaven River to a water quality level that will support growth and consumption of oysters Short Term Strategy Target areas with minimal impairment closest to new oyster beds (water quality deptcted on the map) Implement water quality measures tn the Basin (1~3fecal - human, 1/3 fecal- wlldhfe, 1~3fecal, pet waste) Pubic Information Campaign Lynnhaven 2007 Hampton Roads Planning District Commission (HRPDC) conducts the Hampton Roads Storm Water program which provides public information Civic Leagues Community and bustness organtzatlons Involve State agencies Combine with Watershed Plan and work for Oyster Restoration Enhance maintenance efforts Mr Johnston displayed a deplctton of the "Scoop the Poop"/ Save the River" Campaign symbol by the Vlrglnta Beach SPCA, HR Storm, Stormwater Management and Lynnhaven River 2007 The Short Term Strategy maximizes chances for success with e&ble oysters by 2007from some areas The Long Term Strategy will be coordinated with the U S Army Corps of Engineers study and tmplementatton Current Status Status of Watershed Management Plan DRAFT US Army Corps of Englneers Agreement anticipated Fall 2003 August 26, 2003 -8- CITY MANA GER'S BRIEFING L YNNH/I VEN RIVER ENVIR ONMENT/tL RESTORATION ITEM # 51561 (Continued) Tentative Cost and Timetable for Corps Study Extensive Scope $3 5 to $4 5-MILLION 50/50 Spht - Federal/Ctty - Local Partners Study - Fall~Winter 2003 -Fall/Wmter 2008 Implementatton 2008/2009 and Beyond 65/35 Spht August 26, 2003 -9- CITY MANA GER'S BRIEFING THOROUGHGOOD HOUSE CONVEYANCE 2:00 P.M. ITEM # 51562 Lynn Clements, Dtrector- Department of Museums and Cultural Arts, advtse that on Tuesday, August 19, 2003, the Norfolk Ctty Council voted to convey the Adam Thoroughgood House to the Ctty of Vtrgtnta Beach The Thoroughgood House wtll be under the ausptces of the Department of Museums and Cultural Arts Mark Reed, Htstortc Resources Co-ordtnator, wtll manage the operatton, matntenance and upgrades for the Adam Thoroughgood House Ms Clements extended apprectatton to Mayor Meyera Oberndorf and Mayor Paul Fratm - City of Norfolk, Vtce Mayor Louts Jones, James K Spore -Ctty Manager, Vtrgmta Beach, Regina V K Wdhams - City Manager, Norfolk and Asststant City Manager John Ktfer, Harry Lester, Member - Board of Trustees, Vtrgtnta Marine Science Museum Board, Asststant City Attorney Vanessa Valledejuh, and, Steven Thompson - Chief Fmanctal Officer, the Director and Board of the Chrysler Museum, and the Francts Land House Board of Governors, Mac Rawls and Mark Reed On October Ftrst, a celebratton of the acqmsttton wtll be scheduled Pubhc comments on any tssues related to the Thoroughgood House are welcome A "hot topic" sectton ts avatlable on the Webstte for the Ctty www vbgov corn Comments also may be forwarded to Lynn Clements or Mark Reed at the Francts Land House Mr Reed advtsed the Adam Thoroughgood House, a Nattonal Htstortc Landmark, located tn the Baystde area of Vtrgtnta Beach, ss one of the oldest houses tn Vtrgtnta, approxtmately 300 years old The Thoroughgood House was butlt by a descendant of Adam Thoroughgood, constdered our first settler The namtng of Norfolk County and the Lynnhaven Rtver are attrtbuted to Adam Thoroughgood History of Thoroughgood House Museum Restored 1955 - 1957 by Adam Thoroughgood House Foundatton under the leadershtp of Henry Clay Hofhetmer II Furntshed by Hofhetmer and Foundatton Gtven to Ctty of Norfolk 1961 Operated by Chrysler Museum 1961 - 1999 Hours reduced stgntficantly tn 1998 Operated by Vtrgtnta Beach 1999 - present The acqutsttton of the House entatls a three party agreement: Chrysler Museum of Art - approved June 26, 2003 Ctty of Norfolk- approved August 19, 2003 (30 day pertod for Or&nance) City of Virginia Beach -Ordtnance re acquisition scheduled for City Council Session of September 2, 2003 August 26, 2003 -10- CITY MANA GER'S BRIEFING THOROUGHGOOD HOUSE CONVEYANCE ITEM # 51562 (Continued) City of Norfolk to Virginia Beach Spectal Warranty Deed Htstortc Adam Thoroughgood House 4 229 acres of land Non-htstortc bmldmgs and structures Chrysler Museum to Virginia Beach Deed of Gtft Collectton of over 150 anttque furntshtngs and objects Archaeologtcal artt. facts Non-collectton operattonal furntshtngs and equtpment Not-Transferrtng Three (3) Chrysler collection ttems, eight (8) National Trust loan items Virginia Beach to Chrysler Promissory Note Donation of $250,000 Five annual payments of $50, 000 begtnnmg December 2005 Relattve the Promissory Note, Patrtcta Phtlhps -Dtrector of Finance, advtsed when the Ctty stgns a Promtssory Note, debt has been traded In thts parttcular case, tt ts Charter Debt Thoroughgood House Operation FY 2004 Department of Museums and Cultural Arts Operattng Budget $ 88,440 Capttal Improvement Budget $I30,000 Masonry Reporttng Htstortc Structures Report Systems Upgrade destgn and tnstall A detatled study of the htstortc butl&ng, Htstortc Structures Report, ts needed to determtne ortgtnal butlding fabrtc, butldtng configuratton and noteworthy features Relattve Mortar Repotnttng, the Adam Thoroughgood House was vtrtually 100% repotnted tn the early 1990's There are a number of deep pockets that have developed where thts new mortar has fatled Thts ts caustng some motsture tnfiltratton and damage to the tntertor walls and surfaces Thts problem needs to be addressed tmmedtately A mason expertenced tn repotnttng htstortc butldtngs needs to be contracted for the work The electrtc wtrtng tn the Thoroughgood House ts old and could pose stgmficant danger to the htstortc butldlng The prtmary electrtcal box utthzes old-style fuses and does not have ctrcutt breakers In addttton, hghttng ts a problem tn the tntertor spaces An assessment of the butldtng's electrtcal system needs to be done to determtne age, safety, capactty, etc August 26, 2003 -11- CITY MANA GER'S BRIEFING THOROUGHGOOD HOUSE CONVEYANCE ITEM # 51562 (Continued) Mayor Oberndorf suggested formulattng an overall Foundatton Board The members would be advtsed thetr appotntment was not only due to thetr commttment to the Htstortcal Preservatton of Vtrgtma Beach, but they would be responstble to asstst tn ratstngfunds from the prtvate sector One major fund ratser mtght be held per year to asstst wtth expenses of the htstortcal homes (Francts Land, Lynnhaven, Wo~nare Plantation, Adam Thoroughgood and Fatry Plantatton homes) Counctl Members McClanan and Wtlson Ltatsons- Ctttzens Commtttee on Boards and Commtsstons, referenced the recommendatton of expandmg the mtsston of the Historical Review Board. Counctl Lady Wtlson advtsed they would develop a Resolutton BY CONSENSUS, the Or&nance to AUTHORIZE acqutsttton of the Adam Thoroughgood House from the Ctty of Norfolk, ACCEPTANCE of a Spectal Warranty Deed and Deed of Gtft and EXECUTION of an Agreement and Promtssory Note tn the amount of $250, 000, payable tn five (5) annual mstallments, shall be scheduled for the City Councd Session of September 2, 2003 August 26, 2003 - 12- AGENDA RE VIEW SESSION 2:35 P.M. ITEM # 51563 J PUBLIC HEARINGS 1 FY 2004 CAPITAL PROJECT AMENDMENTS a VDOT Roadways $35,485,142 b Conventton Center Replacement $ 9,071,000 Councd Lady McClanan expressed concern relattve a Presentatton concermng VDOTRoadways The Ctty Manager advtsed E Dean Block, Dtrector of Pubhc Works, had presented tnformatton to Ctty Counctl tn the Sprtng Mayor Oberndorf referenced the projects Elbow Road Extended - Phase H (VDOT) - CIP #2.152 $ 5,307,055 Indian River Road - Phase VII (VDOT) - CIP #2.256 Princess Anne Road/Kempsville Road Intersection Improvements (VDOT) - CIP #2.048 $ 9,349,0000 $19,648,000 Witchduck Road - Phase I (VDOT) (Partial) - CIP #2.931 $ 467,057 Witchduck Road - Phase H (VDOT) Partial - CIP #2. 025 $ 714,000 TOTAL $35,485,142 Vtce Mayor Jones advtsed a statement concermng the 2026 Plan of the Hampton Roads Planning District Commission was d~strtbuted A 2026REGIONAL LONGRANGE TRANSPORTA TIONPLANBrtefing by the Hampton Roads Planmng Dtstrtct Commtsston shall be scheduled for the Ctty Counctl Sesston of August 26, 2003 The Executtve Commtttee of the Hampton Roads Planntng Dtstrtct Commtsston (HRPDC) and the Metropohtan Planntng Organtzatton (MPO) have voted upon the 2006Plan, whtch wtll come forward to the enttre Hampton Roads Planntng Dtstrtct Commtsston at the next quarterly meettng Vtce Mayor Jones wtll confer wtth Counctl Lady McClanan relattve the status August 26, 2003 -13- AGENDA RE VIEW SESSION ITEM # 51564 L3 Ordtnance to TRANSFER $800,000 from the General Fund Reserve to reserve a conttngencyfor the JOHN MUHAMMAD TRIAL Counctlman Wood expressed concern and recommended conferrtng wtth Prtnce Wtlham County relattve expenses betng retmbursed The Governor and General Assembly should be contacted concermng these expendttures by the Ctty's ctttzens Mayor Oberndorf advtsed Councd Members Vdlanueva and Wilson are the liaisons to the General Assembly Counctl Lady Wtlson beheved the Federal Government should also be contacted The Ctty Manager advtsed Robert Matthtas, Asststant to the Cay Manager, ts conferrtng wtth the General Assembly representattves today Shertff Paul Lantetgne advtsed Prince William County has received $200,000. Shertff Lantetgne has spoken wtth Congressman Shrock and a part of the problem ts the Federal Government ts wtthtn thetr mtd-budget year The majortty of the Bureau of dusttce funds have been allocated Shertff Lantetgne advtsed grant and Homeland Securtty funds are betng revtewed However, he beheves any funds allocated by the Federal Government wtll not be allocated unttl the next October Ftscal Year Congressman Wol./e's Commtttee controls much of the Homeland Security funds Congressman Shrock has been commumcattng wtth him Correspondence has been wrttten to Frank Drew, Chatrman of the Compensatton Board, and Senator Stolle, Chatrman of the Crtme Commtsston, who have assured some fundtng Shertff Lantetgne advtsed very few crtmtnal cases change venue Vtrgtnta Beach wtll only have the "trtal"phase The sentenctng and appeals wtll be moved back to Prtnce Wtlham County Counctl Members Maddox and Reeve suggested parktng or other fees be tntttated Ctty employees and ctttzens are betng chsplaced Davtd Sullivan, Chtef lnformatton Officer, advtsed fees spectfic to the me&a are betng revtewed The enttre parktng complex ts 'free" and there has never been a charge for parktng tn the Mumctpal complex Chargtng the me&a for parktng, when the rest of the populous ts provtded 'free of charge" would be difficult A fee structure will be tmttated for services as connecttvtty, electrtctty, work space re the me&a Mr Sulhvan has been tn contact with the City of Chesapeake relative their trail and fees tnstttuted Relattve equttable retmbursement, Mayor Oberndorf advtsed the State ts plactng thetr prtsoners tn local jarls, as the State only pays the local jarls $8 O0 a day However prtsoners are taken from out of State to fill thetr prtsons and are betng retmbursed approxtmately $75 O0 a day The Ctty Attorney shall DRAFT a Resolutton requesttng retmbursement from Prince William County, the State and Federal Government, whtch shall be scheduled for a Ctty Counctl Sesston August 26, 2003 - 14- AGENDA RE VIE W SESSION ITEM # 51565 BY CONSENSUS, the followtng shall compose the CONSENT AGENDA: L1 Ordtnance to AUTHORIZE temporary encroachments tnto aportton of the Ctty's rtght-of-way at 2082 and 2080 Tazewell Road (wtth adjacentproperty owner), to make up a Condomtntum Assoctatton and jomtly bmld a pter tn Crab Creek with separate apphcattons to construct and matntatn boat hfts (DISTRICT 4- BA YSIDE) a Lynnhaven Promenade b Crab Creek ROBERT B. THOMA PHILLIP O. GEIB L2 Or&nance to APPROPRIATE $ 9,071,000 to the Convention Center Capital Improvement Project (CIP) replacement and provtde additional features and amenities for the new Convention Center L3 Ordinance to TRANSFER $800,000 from the General Fund Reserve to reserve a contingency for the JOHN MUHAMMAD TRIAL L4 Resolutton re ISSUANCE of $165, 000, 000 Vtrgtnta Beach Development Authority's Revenue Bonds, Sertes 2003,4 and AUTHORIZING the executton and dehvery of approprtate documents August 26, 2003 - 15- AGENDA RE VIE W SESSION ITEM # 51566 M 1 Ordtnance to AMEND the Ctty Zontng Ordtnance (CZO) re height regulations affecttng att navtgatton The Ctty Manager advtsed thts Ordtnance wtll brmg the Ctty Zontng Ordtnance tnto complete comphance wtth the Vtrgtnta Department of Avtatton regulattons Counctl Lady McClanan wtll vote NAY on thts item M2 ITEM # 51567 Ordtnance toAMEND 3~ 111 225 1, 601, 901 and 1521 of the Ctty Zonmg Or&nance (CZO) to allow Bed and Breakfast Inns as a Conditional Use tn certatn Apartment, Bustness and Resort Tourtst Dtstrtcts, and, FURTHER AMEND the specific conditions for Bed and Breakfast Inns M 3 Apphcatton of GREGORY NELSON for a Con&ttonal Use Permit re a Bed and Breakfast Inn at 2420 Arctic Avenue (DISTRICT 6- BEA CH) Counctlman Maddox advtsed these ttems would be dtscussed durtng Formal Sesston Counctl Lady Eure expressed concern relattve the total floor space (20%)for sales Stephen Whtte, Planntng, advtsed thts provtston, relattve sales, ts tn the extsttng zontng ordtnance for Bed and Breakfast Inns Thts language ts a "holdover" from when ortgtnally adopted ITEM # 51568 M4 Apphcatton of STEVEN WRAY O'NEAL for the expanston of a Nonconforming Use to construct a detached garage at 420 Davts Street (DIST.'CT 4 - BA YSIDE) (DISTRICT 2 - KEMPSVILLE) Vtce Mayor Jones advtsed thts was not tn the Baystde Dtstrtct, but Kempsvtlle Thts ttem was recommended for DENIAL and shall be &scussed durtng the Formal Sesston August 26, 2003 16- AGENDA RE VIE W SESSION ITEM # 51569 M 7 Apphcatton of NICHOLSON, INC. .[or a MODIFICATION of the Inchan Lakes PD-H1 Land Use Plan to allow a mtnt storage at Ferrell Parkway, west of In&an Lakes Boulevard (DISTRICT I -CENTER VILLE) Councd Lady Eure referenced the deptctton of the butldtngs dehvered by Attorney Edward Bourdon Counctl Lady Eure had been concerned relattve the "blue stripe" around the butldtng The developer advised thetr other mtnt storage factltttes have thts sttpe Counctl Lady Eure dtd wtsh thts to be a metalhc blue ITEM #51570 M 8 Apphcatton of SAIR ENTERPRISES, INC for a MODIFICATION of a Conchttonal Use Permtt re an automobtle servtce statton (approved February 13, 2001) to remove a requtrement for the canopy, remove the automobtle storage use, expand approved automotive repair and add a car was. h at 3096 South Lynnhaven Road (DISTRICT 3 - ROSE HALL) Counctl Lady McClanan advtsed Asststant Ctty Attorney Kay Wtlson dtstrtbuted the latest amend~nents to the Con&ttons of Sair Enterprises, Inc Attorney John Rtchardson ts tn agreement wtth the amended condtttons ITEM #515 71 B Y CONSENSUS, thefollowtng shall compose the CONSENT AGENDA: M 1 Ordtnance to AMEND the Ctty Zomng Ordtnance (CZO) re height regulations affecttng atr navtgatton M 6 Apphcatton of ST. NICHOLAS CATHOLIC CHURCH for a MODIFICATION of Condtttons on a Use Permtt re a columbarium (approved by City Counctl on Aprtl 8, 2003) at 712 Ltttle Neck Road (DISTRICT 5 - L YNNHA VEN) M7 Apphcatton of NICHOLSON, INC. for a MODIFICATION of the In&an Lakes PD-H1 Land Use Plan to allow a mtnt storage at Ferrell Parkway, west of In&an Lakes Boulevard (DISTRICT 1 - CENTERVILLE) August 26, 2003 -17- AGENDA RE VIEW SESSION ITEM # 515 71 (Continued) M8 Apphcatton of SAIR ENTERPRISES, INC for a MODIFICATION of a Concltttonal Use Permtt re an automobtle servtce statton (approved February 13, 2001) to remove a requtrement for a canopy, remove the automobtle storage use, expand approved automottve repatr and add a car wash at 3096 South Lynnhaven Road (DISTRICT 3 - ROSE HALL) M9 Apphcattons ofD. W. GA TLING, INC on the west side of Oceana Boulevard, south of Beacons Reach Drtve (DISTRICT 6- BEA CH) Change of Zomng Dtstrtct Classtficatton from R-5D Residential Duplex District to B-2 Community Business Dtstrtct b Conchttonal Use Permttfor a mini-warehouse and self storage Mll Apphcatton of ALL TEL COMMUNICATIONS, INC for a Conchttonal Use Permtt re a communications monopole tower to support three (3) hcensed carrters at 812 Sandbrtdge Road (DISTRICT 7- PRINCESS ANNE) M12 Apphcatton of SALT MEADOW BAY, L.L.C. for the dtsconttnuance, closure and abandonment of Street G on the northeast stde of South Ortole Drtve, northwest of Barberton Drtve (DISTRICT 6- BEA CH) Counctl Lady McClanan will vote NAY on Item M 1 Item M 8 (SAIR ENTERPRISES, INC ) wtll be APPROVED, wtth AMENDED CONDITIONS, B Y CONSENT Item M 11 (ALLTEL) shall be REFERRED BACK TO THE PLANNING COMMISSION, BY CONSENT August 26, 2003 - 18- CITY COUNCIL COMMENTS 3:37P. M. ITEM # 51572 Mayor Oberndorf asked the City Counctl to request the Planmng Commtsston constder scheduhng addtttonal Pubhc Heartngs relattve the Comprehensive Plan to be held durtng the month of September Ctttzens tend to focus more tn September School ts back tn sesston and the restdents are also back from vacatton Counctl Lady McClanan advtsed she attended the Pubhc Heartng re the Comprehensive Plan at Provtdence Elementary School whtch was very poorly attended There are very tmportant tssues tn thts Dtstrtct ITEM # 515 73 Counctl Lady Eure requested a tour of the City View Mountain be tentattvely scheduled at 2 O0 P M, October 21, 2003, prtor to Ctty Counctl's Work Sesston at 4 O0 P M (tf tt ts a clear day) Councd Lady Eure has conferred wtth ctty staff Transportation wtll be provtded Thts tour wtll provtde a greater apprectatton for the future of the property The Mayor and Members of Ctty Counctl wtll check thetr schedules and advtse ITEM # 51574 Council Members Wdson and Vtllanueva met last Wednesday, August 13, 2003, re the Commumty Legtslattve Package Al Wallace, Prestdent- Council of Ctvtc Organtzattons, wtshed an ttem be added re e-streaming the meetings of the Hampton Roads Planning District Commission (HRPDC) Thts ts far reachtng, however, Counctl Lady Wtlson suggested the Counctl Ltatsons provtde a monthly report re the acttvtttes of the Hampton Roads Planning District Commission. Council Lady Eure suggested an agenda be forwarded by the Hampton Roads Planning District Commission to the Counctl of Ctvtc Organtzattons Vtce Mayor Jones advtsed these Meettngs are not vtdeo taped Vtce Mayor Jones stated there ts suffictent room for the pubhc to (and some do) attend these meetings ITEM # 515 75 Counctlman Reeve referenced the e-mad concerns relattve the newest Fire Stations: Sandbridge, Nimmo and Princess Anne Fire Department These concerns related to atr quahty (mold growth tn the new constructton) The Sandbrtdge Statton was ortgtnally to open tn July The Ctty Manager advtsed Chtef Cade chstrtbuted a memorandum relattve these concerns The Ftre Department ts co-ordtnattng wtth the Department of Pubhc Works to allevtate these condtttons Relattve the Sandbrtdge Fire Department, the issue of the "leaktng" roof has been solved and will have the final tnspectton tn a few days August 26, 2003 - 19- CITY COUNCIL COMMENTS ITEM # 515 76 Mayor Oberndorf referenced Application of FORT WORTH DEVELOPMENT, INC. for a Condtttonal Use Permtt re multt-famdy Condomtmum tn the B-4 Shore Drtve Corrtdor Overlay Dtstrtct at Dtnwtddte Road and DuPont Ctrcle (DISTRICT 4- BA YSIDE) (ADOPTED August 12, 2003) Mayor Oberndorf had received numerous e-mails concerning this application and tnqulred whether thts apphcatton was gotng to be sponsored for RECONSIDERATION The Members of Ctty Councd who had voted in the affirmattve advtsed they were not brtngmg thts ttem forward for RECONSIDERATION ITEM # 51577 Mayor Oberndorf requested Counctl Members Schmldt and Wood serve as the Liaisons on the Virginia Marine Science Museum Foundation. August 26, 2003 - 20 - ITEM # 51578 Mayor Meyera E Oberndorf called to order the INFORMAL SESSION of the VIRGINIA BEACH CITY COUNCIL tn the Ctty Counctl Conference Room, Ctty Hall Butldmg, on Tuesday, August 26, 2003, at 3 35 PM Counctl Members Present Harry E Dtezel, Margaret L Eure, Vtce Mayor Louts R Jones, Reba S McClanan, Rtchard A Maddox, Mayor Meyera E Oberndorf, Jtm Reeve, Rosemary Wtlson, Peter W Schmtdt and James L Wood Counctl Members Absent Ron A Vtllanueva [Entered 4 O0 P M - Doctor's appotntment] August 26, 2003 -21 - ITEM # 515 79 Mayor Meyera E Oberndorf entertatned a motton to permtt Ctty Counctl to conduct tts CLOSED SESSION, pursuant to Sectton 2 1-344(A), Code of Vtrgmta, as amended, for the followtng purpose PERSONNEL MA TTERS Dtscusston, constderatton or tntervtews of prospecttve candtdates for employment, asstgnment, appotntment, promotton, performance, demotton, salartes, dtsctphntng, or restgnatton of spectficpubhc officers, appotntees, or employees pursuant to Sectton 2 2-3711 (A) (I) To Wit Appotntments Boards and Commtsstons Adam Thoroughgood Foundatton or Board Hampton Roads Economtc Development Alhance Mmortty Busmess Counctl Parks and Recreatton Commtsston Performtng Arts Theatre Advtsory Commtttee Ttdewater Regional Group Home Commission Towtng Advtsory Board PUBLICL Y-HELD PROPERTY Dtscusston or constderatton of the acqmsttton of real propertyfor a pubhc purpose, or of the dtsposttton ofpubhcly-held real property, where dtscusston tn an open meettng would adversely affect the bargatntng posttton or negottattng strategy of the pubhc body pursuant to Section 2 2-371I(A)(3) Acqmsttton/Dtsposttton of Property - Baystde Dtstrtct - Lynnhaven Dtstrtct - Two (2) Southeastern Parkway and Greenbelt parcels - Prtncess Anne Dtstrtct - Beach Dtstrtct - Centervtlle Dtstrtct LEGAL MATTERS Consultatton wtth legal counsel or brtefings by staff members, consultants, or attorneys pertatntng to actual or probable httgatton, or other spectfic legal matters requesttng the provtston of legal advtce by counsel pursuant to Sectton 2 1-344(A)(7) Contractual Matters - Lynnhaven 2007 Contract PPEA Proposal Upon motion by Counctlman Wood, seconded by Counctlman Dtezel, Ctty Counctl voted to proceed tnto CLOSED SESSION. I/'ottng 10-0 Counctl Members l/'ottng Aye Harry E Dtezel, Margaret L Eure, Vtce Mayor Louts R Jones, Reba S McClanan, Rtchard A Maddox, Mayor Meyera E Oberndorf, Jtm Reeve, Rosemary Wtlson, Peter W Schmtdt and James L Wood Counctl Members Vottng Nay None Counctl Members Absent Ron A Vtllanueva (3:35 P.M. - 5:30 P.M. ) (Dinner: 5:30 - 6:00 P.M.) Counctlman l/'tllanueva arrived at 4 O0 P M after hfs doctor's appotntmenO August 26, 2003 - 22 - FORMAL SESSION VIRGINIA BEACH CITY COUNCIL August 26, 2003 6:00 P.M. Mayor Meyera E Oberndorf called to order the FORMAL SESSION of the VIRGINIA BEACH CITY COUNCIL tn the Counctl Chamber, Ctty Hall Butldtng, on Tuesday, August 26, 2003, at 6 O0 P M Counctl Members Present Harry E Dtezel, Margaret L Eure, Vtce Mayor Louts R Jones, Reba S McClanan, Rtchard A Maddox, Mayor Meyera E Oberndorf, Jtm Reeve, Peter W Schmtdt, Ron A Vtllanueva, Rosemary Wilson and James L Wood Council Members Absent None INVOCATION Vtce Mayor Louts R Jones PLEDGE OF ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA August 26, 2003 Item V-E. - 23 - CER TIFICA TION OF CLOSED SESSION ITEM # 51580 Upon motton by Counctlman Schmtdt, seconded by Counctlman Reeve, City Counctl CERTIFIED THE CLOSED SESSION TO BE IN ACCORDANCE WITH THE MOTION TO RECESS. Only pubhc busmess matters lawfully exempt from Open Meetmg reqmrements by Vtrgtma law were &scussed tn Closed Sesston to whtch thts certification resolution apphes, AND, Only such pubhc bustness matters as were tdenttfied tn the motion convenmg the Closed Sesston were heard, dtscussed or constdered by Vtrgtnta Beach Ctty Counctl Vottng I 1-0 Counctl Members Votmg Aye Harry E Dtezel, Margaret L Eure, Vtce Mayor Louts R Jones, Reba S McClanan, Rtchard A Maddox, Mayor Meyera E Oberndorf, Jtm Reeve, Peter W Schmtdt, Ron A Vtllanueva, Rosemary Wtlson and James L Wood Counctl Members Vottng Nay None Council Members Absent None August 26, 2003 ?~" OUR #~~°I RESOLUTION CERTIFICATION OF CLOSED SESSION VIRGINIA BEACH CITY COUNCIL WHEREAS: The Virginia Beach City Council convened into CLOSED SESSION, pursuant to the affirmative vote recorded in ITEM # 51579, page 21, and in accordance w~th the provlsmns of The Virginia Freedom of Information Act; and, WHEREAS. Section 2 2-3 711 (A) of the Code of Vlrg~ma requires a certification by the governing body that such Closed Session was conducted ~n conformity w~th V~rglnla law NOW, THEREFORE, BE IT RESOLVED That the V~rglnla Beach City Council hereby certffies that, to the best of each member's knowledge, (a) only public bus~ness matters lawfully exempted from Open Meeting requirements by V~rg~ma law were d~scussed in Closed Session to which this certfficatlon resolution apphes, and, (b) only such public bus~ness matters as were ~dentffied ~n the motion convemng this Closed Session were heard, d~scussed or considered by V~rg~ma Beach C~ty Counml -'l(uth Hodges S'm~th, MMC City Clerk August 26, 2003 Item V-F. 1. - 24 - MINUTES ITEM # 51581 Upon motton by Vtce Mayor Jones, seconded by Counctlman Schmtdt, Ctty Counctl APPROVED the Mtnutes of the INFORMAL and FORMAL SESSIONS of August 12, 2003. Vottng 11-0 Counctl Members Vottng Aye Harry E Dtezel, Margaret L Eure, Vtce Mayor Louts R Jones, Reba S McClanan, Rtchard A Maddox, Mayor Meyera E Oberndorf, Jtm Reeve, Peter W Schmtdt, Ron A Vtllanueva, Rosemary Wtlson and James L Wood Council Members Voting Nay None Counctl Members Absent None August 26, 2003 - 25 - Item V-G. ADOPT AGENDA FOR FORMAL SESSION ITEM # 51582 BY CONSENSUS, Ctty Counctl ADOPTED: AGENDA FOR THE FORMAL SESSION August 26, 2003 Item V-G. 1. - 26- MA YOR 'S PRESENTATION ITEM # 51583 Mayor Oberndorf tntroduced Nancy Creech, President of the Virginia Beach Neptune Festival This ts the 30tn year of the Festival The most important component are the Volunteers "Oceans of Magic" ts the theme of thts year's Neptune Festtval Mrs Creech tntroduced the Chatrman of the Board, John Malbon, who presented 2003 ROYAL COURT KING NEPTUNE XXX Dan Ryan TRITONS Doug Ellis Beau Killen Tim Miller Thad Nowak Brad Waitzer PRINCESSES Courtney Bennis Lindsay Breitenberg Kerri-Jean Carter Callie Cole Peyton Daniels Jennifer Davis Lauren Fain Lindsey Frantz Ruth Jones Devin Miller Lauren Napolitano Tracee $okolik Ktng Neptune's wtfe, Nancy, accompamed htm Mayor Oberndorf PRESENTED a Resolution in Recognition to King Neptune. Over the last thtrty years, the Neptune Festival has grown tn regional as well as national recogmtton resulttng tn a growth tn attendance form 30,000 to 50,000 tn 1974 to more than One Mdhon today Mayor Oberndorf advtsed Princess Ruth Jones, an extraordtnary example of today's youth, accompamed the Mayor's delegatton to our &stet Ctty of Mtyazakt, Japan, tn October 2002 August 26, 2003 WHEREAS, The Neptune Festtval ts celebrating tts Thtrtteth Anntversary tn 2003, '. WHEREAS, The Neptune Festrval ts the htghhght of the Fall season tn Vtrgtma Beach and always offers something for everyone -from a Surfing Classtc to a Volleyball Tournament to the always popular Sand Sculpting Champtonshtp, WHEREAS, For thtrty years, the Neptune Festtval has made stgmficant contrtbuttons to the quahty of hfe m Vtrgmta Beach, and WHEREAS, over the last thirty years, the Neptune Festtval has grown tn regtonal as well as nattonal recognttton resulttng tn a growth tn attendance from 30,000 to 50,000 tn 1974 to more than One Mllhon today, WHEREAS, The Neptune Festtval contrtbutes to the quahty of hfe tn Hampton Roads throughout the year by supportmg many different events and organtzattons The Neptune Festtval also provtdes a venue whereby many charitable organtzattons have the opportumty to ratse funds, WHEREAS, Our citizens have proven over and over agatn thetr destre to support our communtty through thetr volunteer effort and the Festrval ts a wonderful example of many hundreds of volunteers coming together as a successful "Community for a Ltfettme", and, WHEREAS, The Ctty ~ Vtrgtnla Beach wtshes to give spectal recognttton to former Councd Member, Nancy A Creech, whose untiring efforts and tenactty have made thts posstble, and to the Neptune Festtval Board of Dtrectors who have worked dtltgently over the last thtrty years to make the Neptune Festtval the great success tt ts today NOW, THEREFORE, BE IT RESOLVED the Ctty Councd of the Ctty of Vtrglnla Beach, Vtrgmta, hereby recognizes DAN R YAN, KING NEPTUNE XXX and declares the month of SEPTEMBER as NEPTUNE FESTIVAL MONTH AND, FUTHER, BE IT RESOLVED: that the City Counctl calls upon the ctttzens to enjoy thts family celebratton and recogntze thts very tmportant Festtval with the tmpact tt has on our Ctty and the regton of Harry E D~ez~Counct~e~ Rbba S McClana~ Councd Member ~~fY~~'~ ~4Canceer R~lMember ~ Counctl Member Jam~L ~'ood,,[CounctlMember R~char~ A Maddox, Councd Member SchmMt, Lot[ts R Jones, Vtce O[Iayor '~eydra E~gbe'rndorf May~'~ ~ -27- Item V-G.2. MA YOR 'S PRESENTATION ITEM # 51584 Mayor Oberndorf RECOGNIZED the following Boy Scout tn attendance to earn hts mertt badge Collin Petty SCOUT TROOP # 481 Sponsored by Kings Grant Baptist Church August 26, 2003 - 28 - Item V-L1. PUBLIC COMMENT ITEM # 51585 Mayor Oberndorf DECLARED A PUBLIC COMMENT: TAX EXEMPTION FOR REDEVELOPMENT There bemg no speakers, Mayor Oberndorf CLOSED THE PUBLIC COMMENT. August 26, 2003 - 29- Item V-d.l.a. PUBLIC HEARING ITEM # 51586 Mayor Oberndorf DECLARED A PUBLIC HEARING: FY 2004 CAPITAL PROJECT AMENDMENTS VDO T Roadways $35,485,142 There betng no speakers, Mayor Oberndorf CLOSED THE PUBLIC HEARING August 26, 2003 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 City of V~rg~n~a Beach, V~rgm~a w~ll hold a public hearing to consider an amendment to the FY 2004 Capital Budget The City will be taking over the adm~mstrat~on and management of five projects from the State, and w~ll receive $35,485,142 in funding to appropnate to the,projects The proposed supplemental appropriation of the $35,485,142 ~n State revenue will be appropnated for the following projects Project Name and Number · Elbow Road Extended - Phase II (VDOT) - CIP #2 152 State Funding to Appropriate $5,307,085 · Indian R~ver Rd - Ph VII (VDOT) - CIP #2.256 9,349,000 Pnncess Anne Rd/Kempsvdle Rd Intersecbon Improvements (VDOT) - CIP #2 048 19,648,000 · Wltchduck Road - Phase I (VDOT) (Parbal) - CIP #2 931 467,057 · W~tchduck Road - Phase II (VDOT) (Part~al) - CIP #2 025 Total 714,000 $35,485,142 The pubhc hearing will be conducted at'6 00 p m in Councd Chamber on the second floor of the C~ty Hall Budding, Mumc~pal Center, Virginia Beach, Virg~n~a A copy of the proposed amendment shall be available ~n the C~ty Clerk s office for rewew Interested persons may appear at such hme and place and present their v~ews Individuals desu mg to prowde oral or written comments may do so by contacting the City Clerk's Off~ce at 427- ,1303 If you are physmally d~sabled or heanng or visually ~mpa~red and need assistance at this meeting, please call ,127-4305 Vo~ce/TDD Fluth Hodges Smith, MMC - 30- Item V-J.l.b. PUBLIC HEARING ITEM # 5158 7 Mayor Oberndorf DECL.4RED .4 PUBLIC HE.4RING: FY 2004 CAPITAL PROJECT AMENDMENTS Convention Center Replacement $ 9,071,000 The following regtstered to speak tn SUPPORT Thomas R Frantz, President - Ytrgtnta Beach Vtston, Inc , presented the positron paper, which ts hereby made a part of the record Robert Goodman, spoke on behalf of James Rtcketts, Dtrector- Conventton Vtsttors Bureau, and advtsed the Convention Center Steertng Committee supports the Conventton Center unantmously with the exceptton of one abstentton Ned Wtlhams, Past Chatr, Chamber of Commerce, Past Chatr of the Ftnance Commtttee, serves on the Executtve Steertng Commtttee Kevtn Cosgrove, Attorney, Member of the Pavthon Task Force, wtll represent the Commtttee at the General Assembly re fundtng Cornell Fuller, serves as Co-Chatr of the Pubhc Awareness Sub Commtttee, Conventton Steermg Commtttee Stxty-e~ght (68) community organizations have been briefed Jtmmy Capps, Resort Hotel owner, Co-Chart of the Pubhc Awareness Sub Commtttee- Conventton Center Steertng Commtttee The followtng regtstered tn OPPOSITION Brtan Kerwtn, 304 Crtpple Creek Curt, Phone 463-0399 Barbara Messner, Post Office Box 514, Phone 422-1902 There betng no further speakers, Mayor Oberndorf CLOSED THE PUBLIC HE.4RING August 26, 2003 THE BEACON SUNDA~¥. 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 Council of the C~ty of Virginia Beach, : Virgm~a wdl hold a public hearing on an amendment to the FY 2004 Capital Budget The proposed supplemental appropnahon of $9,071,000 for the Convenbon Center Replacement Project (CIP #9-018) is for additional design features, which will enhance the amemtles offered by the facility The additional costs wdl be funded through the major projects revenue streams The public heanng w~ll be conducted at 6 00 p m in Councd Chamber on the second floor of the City Hall Budding, Municipal Center, V~rgm~a Beach, Virginia A copy of the proposed amendment shall be available in the City Clerk's off~ce for rewew Interested persons may appear at such bme and place and present their v~ews Ind~wduals des~nng to prowde oral or wntten comments may do so by contachng the C~ty Clerk's Office 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~ce/'TDD Ruth Hodges Smith, MMC -31 - Item K. ORDINANCES~RES OL U TION ITEM # 51588 Upon motton by Vtce Mayor Jones, seconded by Counctl Lady Wtlson, Ctty Counctl APPROVED IN ONE MOTION Ordtnances/Resolutton l a/b and 2 of the CONSENT AGENDA. Vottng 11-0 (By ConsenO Council Members Vottng Aye Harry E Dtezel, Margaret L Eure, Vtce Mayor Louts R Jones, Reba S McClanan, RtchardA Maddox, Mayor Meyera E Oberndorf, Jtm Reeve, Peter W Schmtdt, Ron A Vtllanueva, Rosemary Wtlson and James L Wood Counctl Members Vottng Nay None Counctl Members Absent None August 26, 2003 Item V-L. la/b. - 32 - ORDINANCES/RESOL UTION ITEM # 51589 Upon motton by Vtce Mayor Jones, seconded by Council Lady Wilson, City CounctI ADOPTED: Ordtnance to AUTHORIZE temporary encroachments tnto a portton of the Ctty's rtght-of-way at 2082 and 2080 Tazewell Road (wtth adjacent property owner), to make up a Condommtum Assoctatton andjomtly butld apter tn Crab Creek wtth separate apphcattons to construct and matntatn boat hfis (DISTRICT 4 - BA YSIDE) a Lynnhaven Promenade b Crab Creek ROBERT B. THOMA PHILLIP O. GEIB Vottng 11-0 (By Consent) Counctl Members Vottng Aye Harry E Dtezel, Margaret L Eure, Vtce Mayor Louts R Jones, Reba S McClanan, Rtchard A Maddox, Mayor Meyera E Oberndorf, Jtm Reeve, Peter W Schmtdt, Ron A Vtllanueva, Rosemary Wtlson and James L Wood Counctl Members Vottng Nay None Counctl Members Absent None August 26, 2003 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 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 is on file zn the Department of Publmc Works and to whmch reference ms made for a more partmcular description; and BE IT FURTHER ORDAINED, that the temporary encroachments are expressly subject to those terms, condmtmons and criteria contazned mn the Agreement between the Cmty of Virgznia Beach and Robert B. Thoma, (the "Agreement") which ms attached hereto and incorporated by reference; and BE IT FURTHER ORDAINED that the City Manager or his authormzed desmgnee ms hereby authorized to execute the Agreement. BE IT FURTHER ORDAINED, that thms Ordinance shall not be mn effect untzl such time as Robert B. Thoma and the Czty Manager or his authorized designee execute the Agreement. Adopted by the Council of the Cmty of Virgmnia Beach, Vmrglnia, on the 26th day of August , 2003. 4O 41 42 43 44 45 46 47 48 49 5O CA-% gsalmons/rthoma/ord. R-1 PREPARED: 06.10.03 _~_~sD AS TO CONTENTS S I. GNATURE DEPARTMENT APPROVED ASz~E GAL C i TI~KTTO~RNE~r-~ SHORE DR. / LOCATION MAP SHOWING ENCROACHMENT REQUESTED BY ROBERT THOMA INTO CITY RIGHT-OF-WAY KNOWN AS LYNNHAVEN PROMENADE TAZEWELL. DGN MJ.S. PREPARED BY PM/ ENG. DRAFT. JULY 22, 2003 J'"X.. AT 2082 TAZEWELL RD. J · SCALE: 1" -- 100' PREPARED BY VIRGINIA BEACH CITY AITORNEY'S OFFICE EXEMPTED FROM RECORDATION TAXES UNDER SECTIONS 58 1-81 l(a)(3) AND 58 1-811(¢)(4) REIMBURSEMENT AUTHORIZED UNDER SECTION 25-249 THIS AGREEMENT, made this a~,3 day of ~,Jt~,~ ~-. ,2003, by and between the CITY OF VIRGINIA BEACH, VIRGINIA, a municipal corporation, Gramor, "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 Encroachment, 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 Encroachment Area"; and WHEREAS, the Grantee has requested that the City permit a Temporary Encroachment 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 Encroachment Area for the purpose of constructing and maintaining the Temporary Encroachment. It is expressly understood and agreed that the Temporary Encroachment 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 entitled: "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 aRer the notice is given, the Temporary Encroachment 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 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, 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 amount not less than $500,000.00, combined single limits of such insurance policy or policies. The Grantee, Robert B. Thoma 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 of the insurance policies. The Grantee, Robert B. Thoma assumes all responsibilities and liabilities, vested or comingent, 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 Encroachmem 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 Agreemem, 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 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 signatures. Further, that the City of Virginia Beach has caused this Agreemem 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 City Manager/Authorized Designee of the City Manager Robert B. Thoma Philip O. tgeib 2080 & 2082 TAZEWELL CONDOMINIUM ASSOCIATION Philip 0.' Geib, President ROAD STATE OF VIRGINIA CITY OF VIRGINIA BEACH, to-wit: The foregoing instrument was acknowledged before me this d~y 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: CITY/COUNTY(~(~F V,~~,lJ.l..~,~.~[,[,.. ,to-wit: The foregoing instrument was acknowledged before me this ~Off~- ,2003, by Robert B. Thoma. Notary Public WACHOVIA BANK, N.A. SHORE DRIVE - VA~'"I 2993 SHORE DRIVE VIRGINIA BEACH, VA day of STATE OF ~~itl~ CITY/COUNTY OF Vb~(lk~'hltl.~i~ to-wit: The foregoing instrument was acknowledged before me this 2~!F~, 2003, by Philip O. Geib. day of My Commission Expires: Notary Public STATE OF V&I lrlltl , CITY/COUNTY 01~ ¢_~&lrlLa_~ to-wit: The foregoing instrument was acknowledged before me this ~4~}~- dayof ,2003, by Phih'p O. Geib, President on behalf of 2080 & 2082 Tazewell Road Condominium Association. My Commission Expires: Notary Public APPROVED AS TO LEGAL SUFFICIENCY CITY ATTO~ APPROVED AS TO CONTENT [ ~ITY REAL ESTXTE AGENT ,., __..-..-- -------C 50' CHANNEL CRAB CREEK '"'-'FLOOD~---~EBB .~. ! WEST EDGE OF CHANNEL PER CITY DREDGE tm ..................... (-" DELIVER AND INSTALL PROPOSED PROP. PIER ALL MATERIALS VIA BARGE, PIER AND UFTS OF DUNHAM MHW .... 1.9'...... _~ PROP. PIER OF GEIB PROP. PIER OF FISHER -*- *, ~ .*- a. .*,. .*_ ~ ..uz_..tu_ .J.~ _u~ ~ ...tu_ BULKHEAD UNE IPF (TYP) REAR PL: A=586.36', L=25.12' REMOVE EX. PIER (HATCHED) I 3 STORY DUPLEX LOT 2 N/F PHILIP GEIB 14.89-58-6324 UNIT B UNIT A #2078 #2076 ~.~ Ro~ (40' SITE DATA: 2080 AND 2082 TAZEWELL ROAD, A CONDOMINIUM MB. 215 PO 69 GPINS: 1489-58-6380-2080 UNIT A 1489-58-6380-2082 UNIT B A--54.77' CRAB CREEK CONDOMINIUM N/FMICHAEL T. DUNHAM 1489-58-6234-7270 Exhibit "A" WATERFRONT CONSULTING, INC 1112 JENSEN DRIVE, STE. 206 VIRGINIA BEACH, VA 23451 PHONE: (757) 425-8244 FAX: (757) 425-824.4 IPF PLAN SCALE 1" VIEW = 30' REAL ESTATE ENCROACHMENT REQUEST PROPOSED PIER AND BOAT LIFT FOR ROBERT B. THOMA 2080 ond 2082 TAZEWELL ROAD, A CONDOMINIUM LYNNHAVEN DISTRCT VIRGINIA BEACH, VA (M.D. 215 PG. 69) DATE:AUGUST 29, 2002 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. 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 whzch ms on file in the Department of Publzc Works and to whzch reference is made for a more particular description; and BE IT FURTHER ORDAINED, that the temporary encroachments are expressly subject to those terms, conditions and criteria contained mn the Agreement between the City of Vmrgznma Beach and Phmlip O. Geib, (the "Agreement") which is attached hereto and zncorporated by reference; and BE IT FURTHER ORDAINED that the City Manager or his authorized designee is hereby authorized to execute the Agreement. BE IT FURTHER ORDAINED, that this Ordmnance shall not be · n effect until such tmme as Phmlip O. Geib and the Cmty Manager or his authorized deszgnee execute the Agreement. Adopted by the Councml of the City of Vlrgmnia Beach, Virginia, on the 26th day of August , 2003. 40 41 42 43 44 45 46 47 48 49 5O CA-# g salmons/pgelb/ord. R-1 PREPARED: 06.10.03 /]~ROVED AS TO CONTENTS DEPARTMENT cITY~kTTO~¥~ PIEDMONT SHORE DR. /- LOCATION MAP : · SHOWING ENCROACHMENT REQUESTED BY PHILIP O. GEIB INTO CiTY RIGHT-OF-WAY KNOWN AS LYNNHAVEN PROMENADE, AT J~... 2080 TAZEWELL RD. I TAZEWELL. DGN MJ.S. PREPARED BY P/W ENG. DRAFT. JULY 22, 2003 PREPARED BY VIRGINIA BEACH CITY ATTORNEY'S OFFICE EXEMPTED FROM RECORDATION TAXES UNDER SECTIONS 58 1-81 l(a)(3) AND 58.1-811 (c)(4) REIMBURSEMENT AUTHORIZED UNDER SECTION 25-249 THIS AGREEMENT, made this ,~ t4 ~day of ~- ~ ~ ~ ., 2003, by and between the CITY OF VIRGINIA BEACH, VIRGINIA, a municipal corporation, Grantor, "City", and PHILIP O. GEIB, ROBERT B. THOMA, and 2080 & 2082 TAZEWELL ROAD CONDOMINIUM ASSOCIATION, ASSIGNS AND SUCCESSORS IN TITLE, "Grantee", even though more than one. WITNESSETH: That, WHEREAS, the Grantee, Phih'p 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, Philip O. Geib to construct and maintain a pier and boat lif[, "Temporary Encroachment", in the City of Virginia Beach; WHEREAS, in constructing and maintaining the Temporary Encroachment, it is necessary that the Gramee, Phih'p 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 Encroachment Area"; and WHEREAS, the Grantee has requested that the City permit a Temporary Encroachment 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, Philip O. Geib permission to use The Encroachment Area for the purpose of constructing and maintaining the Temporary Encroachment. It is expressly understood and agreed that the Temporary Encroachment 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 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 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 Encroachment 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, 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 amount 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, Philip 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 equivalem 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 Encroachmem is allowed to cominue thereat~er, and may collect such compensation and penalties in any manner provided by law for the collection of local or state taxes. IN WITNESS WHEREOF, Phih'p O. Geib, Robert B. Thoma and Philip O. Geib, Presidem on behalf of 2080 & 2082 Tazewell Road Condomim'um Association, the said Grantee has caused this Agreement to be executed by their signature. Further, that the City of Virginia Beach has caused this Agreemem to be executed in its name and on its behalf by its City Manager and its seal be hereumo affixed and attested by its City Clerk. (SEAL) ATTEST: City Clerk CITY OF VIRGINIA BEACH By City Manager/Authorized Designee of the City Manager Phih'p O. Geib R~bert b. Thoma 2080 & 2082 TAZEWELL CONDOMINIUM ASSOCIATION Philip O. Geib, President 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. Notary Public My Commission Expires: 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. Notary Public My Commission Expires: STATE OF Vt/ttll/hio~ CITY/COUNTY 0}F ~/L~ _t!rll ~1-"~2~ t o- wit: The foregoing instrument was acknowledged before me this ~ ., 2003, by Philip O. Geib. day of My Commission Expires: Notary Public Rev C 24 02 STATE OF CITY/~Y .~t ~/:~/J4, to-wit: The foregoing instrumem was acknowledged before me this ('~ ](I~t.~. ,2003, by Robert B. Thoma. x VALENTINA S F MASTERS Gl-fY OF VIRGINIA BEACH My Cornm~ss~on ExpIres ~1 Notaz~ Public February 29, 2004 "tcr:CCo m 'ns ,o'-n"E tr%s'T .... day of STATE OF ¢~ CITY/COUNTY (Jtk [/~/~ ¢L~ I~t. &r~/.~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: Notary Public APPROVED AS TO APPROVED AS TO CONTENT C61'TY REAL ESTATE AGENT .... -C 50' CHANNEL " -'"~" CRAB CREEK L ~ "~"'FLOOD~--~EBB / WEST EDGE OF CHANNEL PER CITY DREDGE t-- ...................... / (" DELIVER AND INSTALL PROPOSED PROP. PIER ALL MATERIALS VIA BARGE, PIER AND UFTS OF DUNHAM W 25' DE MHW 1.9'......~. PROP. PIER OF GElD PROP. PIER OF FISHER ..u~. _~u_ ~ ..uz. ~ BULKHEAD LINE IPF (TYP) REAR PL: -- A=586 36', L=25,12' REMOVE EX. PIER (HATCHED) I 3 STORY DUPLEX LOT 2 N/F PHIUP GEIB 1489-58-6,324 -- UNIT B UNIT A #2078 #2076 topi (19 · r~ RO~ (4o' SITE DATA: 2080 AND 2082 TAZEWELL ROAD, A CONDOMINIUM MB. 215 PG. 69 (:;PINS' 14.89-58-6380-2080 UNIT A 14.89-58-6380-2082 UNIT B A~54.77' WATERFRONT CONSULTING, INC 1112 JENSEN DRIVE, STE. 206 VIRGINIA BEACH, VA 234-51 PHONE: (757) 425-8244 FAX: (757) 4-25-824-4 CRAB CREEK CONDOMINIUM N/F MICHAEL T, DUNHAM 1489- 58- 6234- 7270 IPF Exhibit "A" PLAN VIEW iiiii SCALE l" = 30' REAL ESTATE ENCROACHMENT REQUEST PROPOSED PIER AND BOAT LIFT FOR PHILIP O. GEIB 2080 (:]nd 2082 TAZEWELL ROAD, A CONDOMINIUM LYNNHAVEN DISTRCT VIRGINIA BEACH, VA (M.B. 215 PG. 69) DATE:AUGUST 29, 2002 2080 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 south side. - 33 - Item V-L.Z ORDINANCES/RES OL UTION ITEM # 51590 Upon motton by Vtce Mayor Jones, seconded by Counctl Lady Wdson, Ctty Counctl ADOPTED: Ordtnance to APPROPRIATE $ 9, 071,000 to the Convention Center Capttal Improvement ProJect (CIP) replacement and provtde additional features and amenities for the new Convention Center Vottng 11-0 (By Consent) Councd Members Voting Aye Harry E Dtezel, Margaret L Eure, Vtce Mayor Louts R Jones, Reba S McClanan, RtchardA Maddox, Mayor Meyera E Oberndorf Jtm Reeve, Peter W Schmtdt, Ron A Vtllanueva, Rosemary Wtlson and James L Wood Counctl Members Vottng Nay None Counctl Members Absent None August 26, 2003 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, Virginia 27 on the 26th day of August 2003. CA-8988 Ordin/Noncode/CoventionCtrord.wpd R-5 - August 19, 2003 APPROVED AS TO CONTENT: Management Ser APPROVED AS TO LEGAL SUFFICIENCY: City A~t~o~ney's~ffic& ' Convention Center Additional Items 12-Aug-03 Item 1 Meebng Room Parbbons and F~mshes 2 Skyhghts at the Exhibit Hall Entrances 3 V~deo Wall 4 Ballroom Amembes (Wood Panels, L~ght show) 5 CVB Other Items 6 Irngabon around budding 7 Additional Landscaping - North s~de of budding 8 Additional 300 parking spaces 9 Add~bonal Landscaping - Parking Lot 10 Irngabon 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,ooo $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 - 34- Item V-L. 3. ORDINANCES/RES OL UTION ITEM # 51591 Barbara Messner, Post Office Box 514, Phone 422-1902, spoke tn OPPOSITION Upon motion by Councilman Wood, seconded by Vtce Mayor Jones, City Counctl ADOPTED: Ordtnance to TRANSFER $800, O00 from the General Fund Reserve to reserve a conttngencyfor the JOHN MUHAMMAD TRIAL Vottng 10-0 Counctl Members Vottng Aye Margaret L Eure, Vtce Mayor Louts R Jones, Reba S McClanan, Rtchard A Maddox, Mayor Meyera E Oberndorf, Jtm Reeve, Peter W Schmtdt, Ron A Vtllanueva, Rosemary Wdson and James L Wood Counctl Members Vottng Nay None Counctl Members Absent Harry E Dtezel August 26, 2003 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 Trial 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 begin 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 inconvenience. 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 activities. 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 activities 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~ ~-~. ~~)"~ F kDatakATY~OrdmLNONCODEkmuhammadarf 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 trial from 7 Prince William to Virginia Beach; 8 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 ]1 public safety and adequate parking; and 12 WHEREAS, the time frame within which these activities 13 must occur is compressed, and the City Manager's current 14 authority to transfer and expend funds may not be suited to ]5 accommodate all the necessary activities. 16 NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY 17 OF VIRGINIA BEACH, VIRGINIA: ]8 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' - 35- Item V-L. 4. ORDINANCES/RES OL UTIONS ITEM # 51592 Barbara Messner, Post Office Box 514, Phone 422-1902, spoke tn OPPOSITION Upon motton by Councd Lady Eure, seconded by Councdman Schmtdt, Ctty Councd AUTHORIZED: ISSUANCE of $165,000,000 Vtrgtnta Beach Development Authority's Revenue Bonds, Sertes 2003A and the executton and dehvery of approprtate documents Vottng 11-0 Councd Members Vottng Aye Harry E Dtezel, Margaret L Eure, Vtce Mayor Louts R clones, Reba S McClanan, Rtchard A Maddox, Mayor Meyera E Oberndorf, dtm Reeve, Peter W Schmtdt, Ron A Vdlanueva, Rosemary Wtlson and dames L Wood Councd Members Vottng Nay None Councd Members Absent' None August 26, 2003 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 City of Virginia Beach, Virginia (the "City"), desires to undertake, in 10 connection w~th the City of Virg~ma Beach Development Authority (the "Authority"), the 11 financing of various public facilities from time to time, including, initially, the replacement of 12 the Pavilion Theater and the Convention Center, the construction of a parking facdity for the 13 Virginia Manne Science Museum, Open Space Site acqms~tion, construction of an Emergency 14 Commtmicat~ons 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 certmn Commumcations Infrastructure and Fire 18 Apparatus Equipment (collectively, the "2003A Project"); and 19 WHEREAS, the Authority, pursuant to Chapter 643 of the Virginia Acts of Assembly of 20 1964, as amended (the "Act"), under which ~t ~s created, is authorized to acquire, improve, 21 maintmn, eqmp, own, lease and dispose of"Authority facilities," as defined in the Act, to finance 22 or refinance such facilities, to issue its revenue bonds, notes and other obligations from time to 23 t~me for such purposes and to pledge all or any part of its assets, whether then owned or 24 thereafter acquired, as security for the payment of the principal of and interest on any such 25 obhgations; 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 determined to issue its pubhc 28 facihty revenue bonds and to use the proceeds thereof to finance costs incurred in connection 29 w~th the 2003A Project for the benefit of the City; and 30 WHEREAS, the Authority proposes to issue its Public Facihty Revenue Bonds, Series 31 2003A (the "Bonds"), in 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 th~s meeting drafts of the following documents 34 (the "Documents"), proposed in connection with 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 First 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 principal of and interest on the Bonds; 44 (c) Preliminary Official Statement draft dated August 14, 2003, of the Authority 45 relating to the pubhc offering of the Bonds (the "Preliminary Official 46 Statement"); and 47 (d) Continuing Disclosure Agreement draft August 14, 2003, pursuant to which the 48 City agrees to undertake certain continmng d~sclosure obhgations 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 financing the 2003A Project is hereby approved. The 53 Authority will issue the Bonds in a maximum aggregate principal amount not to exceed 54 $165,000,000. The Authority will 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 will make Annual Payments and Additional Payments (as each is defined in the Support 57 Agreement) to the Authority in amounts sufficient to amortize the Bonds and to pay the fees or 58 expenses of the Authority and the Trustee. The obligation of the Authority to pay prinmpal of 59 and premium, if any, and ~nterest on the Bonds will be limited to annual payments and additional 60 payments received from the City. The Bonds will 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 making annual appropriations ~n 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 Councd, whale recognizing that ~t ~s not empowered to make any b~nding 67 commitment to make appropriations beyond the current fiscal year, hereby states ~ts intent to 68 make annual appropriations ~n future fiscal years in amounts sufficient to make all payments due 69 under the Support Agreement and hereby recommends that future City Councils do hkewise 70 during the term of the Support Agreement. 71 3. The C~ty Manager ~s 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 w~th such completions, omissions, ~nsert~ons and changes not inconsistent with this Resolution as 74 may be approved by the City Manager, his 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 C~ty Manager, in 77 collaboration with Government F~nance Associates, Inc. and Government Finance Group, the 78 City's financial advisors (the "Financial Advisors"), shall provide for Annual Payments ~n 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; provided that the Annual Payments shall be 81 equivalent to the Bonds maturing in installments ending not later than in 2025; having a true or 82 "Canadian" interest cost not exceeding 7.00% (taking into account any original issue discount); 83 and being sold to the purchaser thereof at a price not less than 99% of the aggregate principal 84 amount thereof (without taking into account any original issue d~scount or premium). 85 (b) The Bonds shall be sold by competitive bid in the pnncipal amount 86 determined by the City Manager, in collaboration with the Financial Advisors, and the City 87 Manager shall receive bids for the Bonds and award the Bonds to the bidder providing the lowest 88 "true" or "Canadian" interest cost, subject to the hm~tations set forth in the paragraph above. 89 Following the sale of the Bonds, the City Manager shall file a certificate w~th the City Clerk 90 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 City Council. 93 5. The Preliminary Official Statement in the form presented to this meeting 94 approved with respect to the information contained therein pertaining to the City. The purchaser 95 of the Bonds is 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, insertions 98 and changes not inconsistent with 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 within the meaning of the Rule, with respect to the 101 information therein pertmning to the City. The City Manager is 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, determined 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" within 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 Includable in the gross income for Federal income 112 tax purposes of the registered owners thereof under existing law. Without limiting the generality 113 of the foregoing, the City shall comply with any provision of law that may require the City at any 5 114 time to rebate to the United States of America any part of the earnings derived from the 115 investment of the gross proceeds of the Bonds. The City 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 authorization 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 ratified. 124 9. This Resolution shall take effect immediately. 125 Adopted by the Council of the City of Virginia Beach, Virginia on the 2 6 day of Auqus t 126 2003. 127 128 129 130 131 132 133 134 135 136 137 138 139 CA8990 Or&n/noncode/DA Document Approval 2003A Project R-2 August 18, 2003 APPROVED AS TO CONTENT: Finance APPROVED AS TO LEGAL SUFFICIENCY: City Attorney'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 authonzed by C~ty Council either through the C~ty's s~x-year Capital Improvement Program CClP") or through tax-~ncrement financing programs The ClP is rewsed annually and approved by C~ty Council ~n conjuncbon w~th ~ts adopbon of the City's annual operabng budget For a more detailed d~scuss~on of the CIP, see the subsecbon "Capital Improvement Program" ~n Appendix A The ProJects approved ~n the ClP ~nclude the Convenbon Center Replacement, the Wrg~ma Manne Science Museum parking proJect, the Pawhon Theater Replacement Project, the Open Space S~te Acquisition program and the Th~rty-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 t~mes these projects were ~ncluded ~n e~ther the CIP or ~n a tax-increment 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~gmflcant proJects With respect to the Convention Center Replacement, the Vlrglma Manne Science Museum parking project, the Pawhon Theater Replacement Project and the Open Space S~te Acqu~s~bon program that were ~mt~ally approved ~n the F~scal Year 2001-02 ClP, 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 ctgarettes (effecbve July 1,2001) As of June 30, 2003, these increased taxes have generated an aggregate of $19,951,033 in 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~hbes to be undertaken by the Authority and the C~ty ~n the Town Center of V~rg~ma Beach, the C~ty created the Central Bus~ness D~stnct - South tax ~ncrement financing d~stnct The tax ~ncrement 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 serwce d~stnct tax that also could be lev~ed ~n a Town Center special service district. As of June 30, 2003, $1,764,284 tn tax increment revenues have been generated since this TIF d~stnct was created With 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 in the garage. Based on the projected use of the fac~hty, ~t ~s anbc~pated that the parking revenues and other fiscal ~mpacts w~ll be sufficient to pay for the operabons of the garage ~nclud~ng debt service over brae The remaining proJects (Emergency Commumcabons Operation Center, Revenue Assessment and Collecbon System, Electromc Ballot System, City/School Human Resource Payroll System, Commumcabons Infrastructure Replacement and F~re Apparatus Equipment), representing less than ten percent of the currently projected total pubhc fac~hty revenue bond program fundings, will receive General Fund support from existing revenue sources Description of the Projects. The aggregate cost of the Projects currently is esbmated to be approximately $410,550,000 The City currently plans to finance approximately $327 m~lhon of these costs through the Authonty's ~ssuance of ~ts pubhc fac~hty revenue bonds The Series 2003A Bonds are the first series to be issued under th~s plan The remaining costs of Projects (approximately $83 55 m~lhon) will come from other funding sources, ~nclud~ng state and federal funding, sale of property, general obligation bonds, General Fund appropnabons and various fund balances, pay-as-you-go funding and private contnbubons 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 modff~cabon over bme at the d~scretlon of C~ty Council The following sets forth brief descnpbons of the Projects to be financed ~n whole or in part w~th the proceeds of the Ser~es 2003A Bonds Convenbon Center Replacement - Th~s project prowdes for the replacement and relocabon of the ex~sbng pawhon convenbon center on the same s~te It w~ll provide 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 esbmated cost of th~s project ~s $197,025,000 (an add~bonal $9,000,000 ~s being added to the project) Th~rty-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 retail space and a pedestrian bridge 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 construcbon of an approximate 840 space parking garage located ~n the Town Center d~str~ct 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 secbon "City Indebtedness and Capital Plan" ~n Appendix A Town Center Garage Block 12 - Th~s project ~s 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 is $8,300,000 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" ~n Appendix A Open Space Site Acquisition - Th~s project prowdes for the acqu~s~bon of land for preservabon and/or recreational purposes Total estimated cost of th~s project ~s $54,090,000 Virginia Manne Science Museum Parking - Th~s project will provide a 500 space parking lot across the road from the museum and w~ll 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 Operation Center- Th~s project ~s for the design and construction of the new Emergency Commumcabons Center and Emergency Operabon Center, to be located ~n the Municipal Center, on the north s~de of the ~ntersecbon of Princess Anne Road and James Madison Boulevard, across the street from the Pubhc Safety Building Total esbmated 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 Th~s ~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 electronic ballot station Total esbmated cost of th~s project ~s $3,766,565 Pawl~on Theater Replacement - Th~s project replaces the current 1,000 seat Pavilion Theater with a new theater at the Town Center and includes parking Total estimated cost of th~s project ~s $50,000,000 Page 2 of 3 City/School Human Resource Payroll System - Th~s project replaces the C~ty's ten year old payroll system w~th a new ~nformabon system utlhz~ng current network infrastructure Total estimated cost of th~s project ~s $3,800,000 Communications Infrastructure Replacement - Th~s project w~ll replace various components of the pubhc safety communications ~nfrastructure related to equipment associated w~th rece~wng, d~spatch~ng, transpond~ng and answering pubhc safety calls Total estimated cost of th~s project ~s $22,225,000 Flre Apparatus Equipment - Th~s project funds replacement of heavy equipment f~re 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 drai~ 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 Parity of Bonds ....................................................................................................... 9 Conditions for Issmng 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 Application of Moneys ......................................................................................... 23 Remedies Vested in Trustee .................................................................................. 24 Limitation on Suits ............................................................................................... 25 Termination of Proceedings .................................................................................. 25 Waivers of Events of Default ............................................................................. 25 Unconditional Right to Receive Principal, 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 Requiring Consent of Bondholders .................... 26 Supplemental Agreements Reqmring Consent of Bondholders ........................... 27 Amendments to Support Agreement Not Requiring Consent of Bondholders .......................................................................................................... 28 Amendments to Support Agreement Requiring Consent of Bondholders ............ 28 Limitation on Amendments ................................................................................. 29 Amendment by Unanimous Consent .................................................................... 29 Opinion of Counsel Required .............................................................................. 29 Consent of the City ............................................................................................... 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 iii ARTICLE XII DISCHARGE OF AGREEMENT Section 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. L~m~tat~on 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 S~gnatures ....................................................................................................................................... 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 political subdivision of the Commonwealth of Virginia (the "Authority"), and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, having a corporate trust office in Richmond, Virginia, as trustee 0n such capacity, together with any successor in such capacity, herein called the "Trustee"), provides: WHEREAS, the Authonty is a political subdivision 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, maintain, 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 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 of Virginia Beach, Virginia (the "City"), desires to undertake a program of financing the acquisition, construction and equipping of various public facilities that the City determines to undertake from time to time; and WHEREAS, in furtherance of the purposes of the Act, the C~ty has requested the Authority to undertake from time to time one or more Projects (as hereinafter defined), and the Authority has determined to issue from time to time, 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 principal of and premium, if any, and interest on such bonds; and WHEREAS, the parties are entering into this Agreement to set forth (a) the conditions for the issuance of such bonds, (b) 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 time 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 pnncipal 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 interest 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 Section 4.1(c) thereof), and the Annual Payments (as hereinafter defined) made by the City pursuant thereto, and all other revenues and receipts derived by the Authority from any of the foregoing and the security therefor. B. The funds, ~ncluding moneys and investments therein, held by the Trustee pursuant to the terms of this Agreement. C. All other property of any k~nd 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 is hereby authorized to receive all such property at any time 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 intended to be, to the Trustee and ~ts assigns forever. IN TRUST, however, for the equal and proportionate benefit and security of the holders from time to time of the Bonds ~ssued under and secured by this Agreement, without privilege, priority or distinction as to the hen 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 different meaning clearly appears from the context: "Act" shall mean Chapter 643 of the Virginia Acts of Assembly of 1964, as amended. "Account" shall mean any of the various Accounts created within a Fund under this Agreement. "Additional Payments" shall mean such payments made by the City pursuant to Sections 4.1(b) and (c) and 9.4 of the Support Agreement. "Agreement" shall mean th~s Agreement of Trust, as supplemented, amended or modffied by one or more Supplemental Agreements of Trust. "Annual Payments" shall have the meaning g~ven such term in the Support Agreement, which 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 from t~me to t~me pursuant to Amcle III. "Bond Counsel" shall mean an attorney or firm 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 s~nklng 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 principal 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 apphcable 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 Virginia Beach, a political subdivision of the Commonwealth of Virgima. "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 F~tch Ratings, New York, New York, or its successors. "Fund" shall mean the Bond Fund, Project Fund or any other fund estabhshed under this Agreement. "Government Certificates" shall mean certfficates representing proportionate ownership of Government Obligations, which Government Obhgations 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 certfficates. "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 principal, if applicable, and interest by the United States of America or (c) bonds, notes and other obhgat~ons issued or guaranteed as to the timely payment of principal and interest by the Rural Utiht~es Service (certfficates of beneficial ownership), Federal Housing Administration (debentures), General Services Administration (partm~pation 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 ~nvestment company or investment trust registered under the Investment Company Act of 1940, provided that the portfolio of such investment company or investment trust ~s hm~ted to Government Obhgat~ons. "Interest Account" shall mean the Interest Account ~n the Bond Fund established ~n 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 ~n Section 209. In determining whether holders of a requisite aggregate pnnc~pal amount of the Outstanding Bonds have concurred in any request, demand, authorization, d~rect~on, notme, consent or wmver under this Agreement, words referring to or connoting "principal 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 determination. "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-Hall 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 Virg~ma of 1950, as amended. Section 102. Rules of Construction. Unless the context clearly indicates 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 vtce (b) Words importing the redemption or calling 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 Articles or Sections are references to Articles or Sections of this 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, ~n 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 apphcable Supplemental Agreement of Trust for such Series of Bonds. Pnnclpal, premium, ~f any, and interest shall be payable ~n 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 Chairman or Vice-Chairman of the Authority and its seal shall be affixed thereto or a facsimile thereof printed 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 delivery of such Bond, such signature or such facsimile shall nevertheless be vahd and sufficient for all purposes the same as if he had remained in office until such dehvery. 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 authentication and ~nserted the date of authentication thereon. The Trustee shall authenticate each Bond w~th the s~gnature 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 this Agreement, and such certificate on any Bond ~ssued hereunder shall be conclusive evidence that the Bond has been duly issued and is secured by the prowsions hereof. Section 204. Registration and Transfer of Bonds; Persons Treated as Owners. (a) All Bonds issued under this 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 with 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 maintain 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 his attorney or legal representative duly authorized in writing, upon presentation and surrender thereof together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered Bondholder or his duly authorized 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, in the name of the transferee, one or more new Bonds of the same Series, interest rate, maturity, principal amount and date as the surrendered Bond, as fully registered Bonds only. (d) Unless otherwise provided in the applicable Supplemental Agreement of Trust, the Trustee shall treat the registered holder as the person exclusively entitled to payment of principal, premium, if any, and interest and the exercise of all other rights and powers of the 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 Interest 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 in 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 in substantially the same form set forth in the apphcable Supplemental Agreement of Trust, with appropriate variations, omissions and insertions. The Authority shall promptly prepare, execute and deliver 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 in 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 in 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 paid 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 his 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 sinking 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 liablhty 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 anything 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 interest on any Series of Bonds remaining unclaimed for more than one year at~er the principal 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 in the general fund of the Authority. After such moneys have been paid to the Authority, the holders of such Bonds shall be entitled to look only to the Authority, and all hability 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, priority or distinction; provided, however, that (1) 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 (m) 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 estabhshed by this Agreement. Nothing herein shall be construed, however, as (a) requmng that any Bonds bear interest at the same rate or in the same manner as any other Bonds, have the same, or an earlier or later, maturity, or be subject to mandatory, optional or extraordinary redemption prior to maturity on the same bas~s as any other Bonds, (b) prohibiting the Authority from entenng into financial arrangements designed to assure that moneys will be available for the payment of certmn 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 w~th the Trustee the following: (a) In the case of the initial Series of Bonds issued under this Agreement only: (1) An original executed counterpart of this Agreement; (2) A certffied copy of a resolution of the Authority's Commissioners authorizing the execution and delivery of this Agreement and authorizing the issuance, sale and delivery 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 dehvered to the Trustee and is binding on the Authority; 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 which (1) shall include: (A) provisions authorizing the issuance, fixing the principal amount 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 which 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 required to be redeemed pursuant to any mandatory redemption provisions or the manner for determining such principal 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 application of the proceeds of such Bonds; and (2) may include: (A) provisions for credit facilities and for other funds and accounts to be established 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 interest, including remarketing provisions, liquidity facility provisions and provisions for establishing the variable rate and converting to a fixed rate; (C) provisions for entering into interest rate swaps, guarantees or other arrangements to limit interest 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 authorizing 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, with the giving of notice or lapse of time or both, would become an Event of Default or (B) if any such event or condition is happening 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 initial Series, an amendment to the Support Agreement, have been duly authorized, executed and delivered, are binding on the Authority and comply in all respects with the requirements of this Agreement and the Support Agreement, as apphcable. (f) An opinion of Bond Counsel, subject to customary exceptions and qualifications, substantially to the effect that the issuance of such Bonds has been duly authorized, that such Bonds are valid and binding limited obligations of the Authority, and that the interest on such Bonds is excludable from gross ~ncome for purposes of Federal income taxation or, ~f such ~nterest ~s not excludable, that the issuance and the intended use of the proceeds of such Bonds wall 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 ~nstructions from the Authonty, at the direction of the City, 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 ~nterest) of such refunding Bonds, together w~th any other moneys deposited w~th the Trustee for such purpose and the investment ~ncome to be earned on moneys held for the payment or redemption of the Bonds to be refunded, wall be sufficient (w~thout reinvestment) to pay either (A) the principal of and the premium, if any, on the Bonds to be refunded and the interest which wall accrue on such Bonds to the respective redemption or maturity dates or (B) the principal and interest on the refunding Bonds to a date certain, at which time such proceeds, moneys and eam~ngs will be sufficient to pay the pnncipal of and the premium, if any, on the Bonds to be refunded and the ~nterest which wall accrue on such Bonds to the respective redemption or maturity dates. (h) A request and authorization signed by the Chairman or Vice Chairman 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 specified sum plus accrued interest to the date of delivery. (i) (1) In the case of the initial 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 Series of Bonds other than the imt~al Series, an original executed counterpart of a Supplemental Support Agreement that shall (A) make such necessary modifications to Exhibit A to the Support Agreement to provide for Annual Payments in amounts sufficient to pay principal of and interest on all Bonds then Outstanding plus such additional Series of Bonds, (B) 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 initial Series, a Supplemental Support Agreement, in connection with the issuance 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 is binding on the City. Except for the requirements of subsection (d) of this Section (which may be waived in whole or in part by the purchasers of such Bonds by an instrument or concurrent instruments in writing signed by such purchasers), none of the requirements in this Section may be wmved 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 issuance of such Series of Bonds. The Bonds of any Series to be called for redemption shall be selected as provided in the apphcable 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 principal amount by such minimum denomination. Section 402. Notice of Redemption. Unless otherwise provided in the applicable Supplemental Agreement of Trust, the Trustee, upon being satisfied as to the payment of its expenses and upon receiving the notice 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 marl or overnight express delivery, to the holder of each Bond to be redeemed at his address as it appears on the registration books kept by the Trustee, (b) 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 ~nformatlon repository designated as such by the Securities and Exchange Commission. In preparing and dehvering such notice, the Trustee shall take ~nto account, to the extent applicable, the prevmling 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 securities industry, including Release No. 34-23856 of the Securities and Exchange Commission or any subsequent amending or superseding release. Failure to give any notice specified in (a) above, or any defect therein, shall not affect the validity of any proceedings for the redemption of any Bond with respect to which no such failure or defect has occurred. Failure to give any notice specified in (b) or (c) above, or any defect therein, shall not affect the validity 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 provided herein shall conclusively be presumed to have been given whether or not actually received by any Bondholder. In the case of an optional redemption under any Supplemental Agreement of Trust, the 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 than the redemption date or (2) the Authority, as directed by the City, retains the right to rescind such notice on or prior to the scheduled redemption date (in either case, a "Conditional Redemption"), and such notice and optional redemption shall be of no effect if such moneys are not so deposited or if the notice is rescinded as described herein. Any Conditional Redemption in (2) above may be rescinded at any time prior to the redemption date if the Authority delivers a written direction to the Trustee directing the Trustee to rescind the redemption notice and any funds deposited with the Trustee in connection with such rescinded redemption shall be returned to the City. The Trustee shall give prompt notice of such rescission to the affected Bondholders. Any Bonds subject to Conditional Redemption where redemption has been rescinded shall remain Outstanding, and the rescission shall not constitute an Event of Default. Further, in the case of a Conditional Redemption, the failure of the Authority to make funds available on or before the redemption date shall not constitute an Event of Default, and the Trustee shall give immediate notice to all orgamzations registered with the Securities and Exchange Commission as securities depositories or the affected Bondholders that the redemption did not occur and that the Bonds called for redemption and not so paid 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 pnncipal 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 portions thereof thus called for redemption shall cease to bear interest from and after the redemption date, shall no longer be entitled to the benefits provided 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 in 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 maintained within the Project Fund special accounts as may be provided in such Supplemental Agreement of Trust. Depostts shall be made to the credit of the Project Fund and any special accounts as provided in 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 in the Project Fund in trust to be used only to pay the Cost of a ProJect and as provided in 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 rights and interests, the cost of demolishing, removing or relocating any buildings or structures on lands acquired, including the cost of acquiring any lands to which such buildings or structures may be moved or relocated, the cost of all labor, materials, machinery and equipment, finanmng charges and interest on any Series of Bonds prior to and dunng 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 inmdent to determining the feasibility or practicability of constructing a Project, administrative expenses, provisions 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 permitted by the Act. Any obligation or expense incurred by the City for studies, surveys, borings, preparation of plans and specfficat~ons or other work or matenals in connection with 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 City 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, firm or corporation to whom such payment is 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 applicable, from which Account such payment is to be made. A requisition may represent reimbursement of the Authority or the City for the Cost of a Project initially paid by the Authority or the City or may represent payment to the Authority or the City of moneys to be paid in turn by the Authority or the City to tturd 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 items 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 in the Project Fund ~n excess of the amount to be reserved for payment of unpaid 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 City and approved by Bond Counsel. ARTICLE VI FUNDS AND ACCOUNTS Section 601. Creation of Funds and Accounts. There lS hereby established with the Trustee a Bond Fund, in which there are established an Interest Account and a Principal Account, and a separate subaccount in 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 this Agreement, shall be deposited in the Bond Fund. The Trustee shall deposit each installment (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 estabhshed 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 d~rected by the terms of a Supplemental Agreement of Trust to do otherwise, the Trustee shall deposit in the subaccount established for each Series of Bonds in the Pnncipal Account any moneys received by the Trustee from the City 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 required 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 Principal 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 Pnncipal Account on any Bond Payment Date to pay interest and principal, if 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 applicable, to the other Account in which there are insufficient moneys. Any moneys in the Bond Fund transferred from the Project Fund pursuant to Section 504 of this Agreement shall be credited against the next Annual Payment required to be paid by the 15 City and shall be used, together with other available amounts, to pay interest and principal, if any, due on the next Bond Payment Date or Dates. The Trustee shall prowde for redemption of any Term Bonds from amounts upon deposit ~n the Bond Fund in accordance with 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 sinking fund payment date in any aggregate principal amount desired; or (y) instruct the Trustee to apply a credit against 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 sinking fund) and canceled but not theretofore applied as a credit against any sinking fund redemption obligation. Upon the occurrence of any of the events described in subsections (x) or (y) of this Section, the Trustee shall credit agmnst the Authority's sinking fund redemption obligation on the next sinking fund payment date the amount of such Term Bonds so delivered or previously redeemed. Any principal 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 Principal Account and shall slmdarly reduce the principal amount of the Term Bonds of the applicable Series to be redeemed on the next s~nking fund payment date. In the event the amount on deposit in 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 ~n the Interest Account or transfer such excess to the Principal Account to be credited against subsequent required deposits thereto. In the event the amotmt on deposit in the Principal Account on any Bond Payment Date shall exceed the amount required on such date to pay Bonds at maturity or to redeem Term Bonds pursuant to mandatory sinking fund requirements, the Trustee shall retain such excess ~n the Pnncipal 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 estabhsh 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 pnncipal 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 application thereof, to other purposes as provided herein. The hen 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 partmular 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 paid 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 paid or provision therefor has been made, the Trustee shall pay to the City any balance remaining ~n any Fund then held by it. 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 with any bank shall be continuously secured in the manner required by the Virginia Security for Public Deposits Act (Chapter 23, Title 2.1 of the Virglma Code) or any successor provision of law. Section 702. Investment of Moneys. Any moneys held in the Funds and Accounts shall be invested and reinvested by the Trustee (or the City in the case of the Project Fund), as directed in writing by an Authorized City Representative, in Investment Obligations, subject to the limitations stated herein. The term "Investment Obligations" shall mean any of the obligations or securities that are at the time legal investments for public funds under the Investment of Public Funds Act (Chapter 18, Title 2.1 of the V~rginia Code) or any successor provisions of law applicable to such ~nvestments. 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 will be needed to pay Costs of a Project as projected in writing by an Authorized City 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, investments 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 investment obligations at a value determined in accordance w~th Section 704, provided that the Investment Obligations transferred are permitted Investments for the Fund or Account receiving such Investment Obligations. Unless otherwise provided in this Agreement, earnings on Investment Obligations shall accrue to the Fund or Account in which 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 City and the Trustee shall provide for the investment of all moneys in 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, obligations purchased as an investment of moneys therein shall be valued at cost or fair market value thereof, whichever ~s 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 affiliate. 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 investments 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 join 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 in good faith Bonds from itself, including any department, affiliate or subsidiary, with 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 paid when due the pnncipal 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 in 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 limited obhgations 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 income 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 interest thereon shall not be deemed to create or constitute an indebtedness or a pledge of the faith and credit of the Commonwealth or of any city, town or other political subdivision 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 true and correct as of the date of delivery of this Agreement. Each such representation and warranty ~s ~ncorporated 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 its 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; prowded, however, that such obligations are hm~ted 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 income 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 interest thereon shall not be deemed to constitute a debt or pledge of the full froth and credit of the Commonwealth of V~rginia 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 ~nterest on the Bonds or other costs ~nmdent 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 principal of or premium, if any, or interest on the Bonds or other costs ~ncldent thereto. The Authority has no taxing power. 19 (c) The Authority agrees that all payments under the Support Agreement shall inure 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 City 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 avmlable for payment of the Bonds, except as here~n and in the Support Agreement prowded. (d) The Authority covenants that ~t shall not suffer, permit or take any action or fad to take any action that may result in the termination or cancellation of the Support Agreement by the City. The Authority also covenants that it shall fulfill its obligations and shall use ~ts best efforts to assure that the City performs its duties and obhgat~ons 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 provided ~n this Agreement. The Authority further covenants that it shall promptly notify the Trustee of any actual or alleged event of default under the Support Agreement of which ~t has notme 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 certain rights to the Authority and respecting actions by the Trustee in its name or ~n the name of the Authority, may enforce for and on behalf of the Bondholders all rights of the Authority and all obligations of the C~ty under and pursuant to the Support Agreement providing for the dehvery and receipt of Annual Payments whether or not the Authority ~s in default under this Agreement (f) The Authority covenants to execute, acknowledge and dehver any indentures supplemental hereto and other acts, ~nstruments and transfers as the Trustee may reasonably reqmre for the better assuring, transfemng, conveying, pledging and ass~gmng to the Trustee of all the rights and funds assigned by this Agreement to secure the payment of the principal of and premium, if any, and interest on the Bonds. The Authority covenants to fully cooperate w~th 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 w~th due diligence) or take any other action, which would cause any Bonds (the interest on which was excludable from gross ~ncome 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) bamng 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 ~ncome tax purposes at the time of their ~ssuance) otherwise than ~n accordance w~th the Authority's "non-arbitrage" certificate given immediately prior to the issuance of such Bonds. (h) The Authonty covenants not to permit the proceeds of any Bonds (the interest on which was excludable from gross income for Federal income tax purposes at the t~me of their issuance) to be used in any manner that would result ~n (a) 10% or more of such proceeds or the facd~ties financed w~th such proceeds being used ~n a trade or bus~ness carded on by any person 20 other than a governmental unit, as provided in Section 141 (b) of the Code, provided that no more than 5% of such proceeds may be used in a trade or business unrelated or disproportionate to the Authority'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 fumishing of water), within the meaning of Section 141(b)(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 unit, as provided in Section 141 (c) of the Code; provided, however, that if the Authority receives an opinion of Bond Counsel that any such covenants need not be complied with to prevent the interest on such Bonds from being includable in the gross income for Federal income tax purposes under existing law, the Authority need not comply w~th such covenants. 0) The Authority shall not use any Project, or any portion thereof, for any use that would adversely affect the exclusion of ~nterest from gross ~ncome for Federal income tax purposes on any Bonds the interest on which was excludable from gross income at the t~me of their issuance. Without limiting the generahty of the foregoing, the Authority covenants to either (i) take actions to prevent any such use that would cause such Bonds to be "private activity bonds," (n) 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 t~me of their ~ssuance. (j) The Authority shall maintain, preserve and keep all Projects, or cause the Projects to be maintained, preserved and kept, in good condition. The Authority shall not abandon any Project, shall pay all of the expenses of mmntenance 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 maintain at its sole cost and expense ~nsurance on all ProJects covenng public liabihty, fire and lightning, with broad form extended coverage insurance covering damage by windstorm, explosion, aircraft, smoke, sprinkler leakage, vandalism, malicious m~sch~ef and such other risks as are customarily ~nsured against by reasonable and prudent government bodies of like size for such facilities as may be required from time to time, in such amounts at a minimum equal to the outstanding amount of Bonds then Outstanding with 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 th~s paragraph, the Authority may self-insure as to any or all of such coverage and such self-insurance will satmfy the requirements of this paragraph. If the Authority selfqnsures, the Authority shall cause to be filed annually with the Trustee a cemficate of ~ts 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 notice of non-appropriation 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 not~ce 21 thereof to the City. The failure to give such notice 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 liability to the Trustee or the Bondholders with respect to the payment of the Annual Payment by the City when due or with respect to the performance by the City of any other covenant made by it in the Support Agreement. Section 805. Trustee Covenants. The Trustee covenants to deposit, invest and apply amounts received under this Agreement, including the Annual Payment, in accordance with 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 this Agreement and for the better assunng and confirming unto the Trustee and the Bondholders of their rights and benefits provided in this 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 ~n the due and punctual payment of the principal of or premium, if any, on any Bond (whether at maturity, call for redemption or otherwise); (b) 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 Authority to observe and perform any of 1ts 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 notice 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 ~n the case of any such default that cannot with due diligence be cured within such 30oday period, failure of the Authority to proceed promptly to cure the same and thereafter prosecute the curing of such default with due diligence. 22 Section 902. 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 prinmpal amount of Bonds then Outstanding and if indemnified 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 specific performance of any covenant or agreement herein contained; provided, however, that the Trustee shall have no right or authority to declare the entire unpaid pnncipal 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 ~mpair any such right or power or shall be construed to be a wmver of any such default or Event of Default or acquiescence therein, and every such fight 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 ~mpmr any fights 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 pnncipal 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 d~rection 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 promsions of th~s Artmle shall, after payment of the cost and expenses of the proceedings resulting ~n the collection of such moneys, the expenses, liabilities and advances ~ncurred or made by the Trustee and ~ts fees and the expenses of the Authority in carrytng out this Agreement, be deposited in the Bond Fund and applied as follows and for no other purpose: (a) applied: Unless the principal 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, if the amount avadable shall not be sufficient to pay m 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 in the Bonds; and Second - To the payment to the persons entitled thereto of the unpmd 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 provisions of this Agreement), in the order of their due dates, with interest on such Bonds at the respective rates specified there~n from the respective dates upon whmh they become due and, if the amount available shall not be sufficient to pay in full Bonds due on any pamcular date, together with such interest, then first to the payment of such interest, 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, without any discrimination or preference except as to any difference in the respective rates of interest specified 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 principal and interest then due and unpmd on the Bonds, including, to the extent permitted by law, interest on overdue installments of interest, without preference or priority of principal over ~nterest or of interest over principal, or of any installment of ~nterest over any other ~nstallment of interest, or of any bond over any other bond, ratably, according to the amounts due respectively for pnncipal and Interest, to the persons entitled thereto, without any discrimination or preference except as to any difference in the respective rates of interest specified in the Bonds. Whenever moneys are to be applied pursuant to the provisions of this Section, such moneys shall be applied at such times and from time to time as the Trustee shall determine, having due regard to the amount of such moneys available for apphcation and the hkelihood of additional moneys becoming available for such application in the future. Whenever the Trustee shall apply such moneys, it shall fix the date (whmh shall be a Bond Payment Date unless ~t shall deem another date more suitable) on which such application is to be made and on such date interest on the amounts of principal to be paid on such dates shall cease to accrue. The Trustee shall give such notice as it may deem appropriate of the deposit with 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 paid under the provisions of this 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 prod, any balance remaining in the several Funds created by this Agreement shall be paid to the C~ty as provided ~n 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 stat 24 or proceeding instituted by the Trustee may be brought in its name as Trustee w~thout the necessity of joining as plaintiffs or defendants any Bondholder, and any recovery of judgment shall be for the equal benefit of the holders of all Bonds then Outstanding. Section 906. Limitation on Suits. Except to enforce the rights given under Section 902, no Bondholder shall have any right to institute any action, suit or proceeding at law or in equity for the enforcement of this Agreement or for the execution of any trust thereof or any other remedy hereunder, unless (a) a default has occurred and is continmng of which the Trustee has been notified as prowded 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 exercise the powers hereinbefore granted or to Institute such action, suit or proceeding in ~ts own name, (c) such requesting Bondholders have offered to the Trustee indemnity as provided in Section 1101(k), (d) the Trustee has thereafter failed or refused to exercise the powers hereinbefore granted, or to institute such action, suit or proceeding in its, his or their own name or names, (e) no d~rection inconsistent with such written request has been given to the Trustee by the holders of a majority in aggregate principal amount of Bonds then Outstanding and (f) notice of such action, suit or proceeding is given to the Trustee; it being understood and intended that no one or more holders of the Bonds shall have any right in any manner whatsoever to affect, disturb or prejudice this Agreement by its or their action or to enforce any rights hereunder except in the manner herein provided, and that all proceedings at law or in equity shall be instituted and maintained in the manner herein provided and for the equal benefit of the holders of all Bonds then Outstanding. The notification, request and offer of indemnity set forth above, at the option of the Trustee, shall be conditions precedent to the execution of the powers and trusts of th~s 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 this Agreement and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee, then and in 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 wmve 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 in respect of which default in the payment of principal and/or premium, if any, and/or interest exists or (b) a majority in aggregate principal amount of Bonds then Outstanding in the case of any other default; provided, however, that there shall not be waived without the consent of the holders of all Bonds then Outstanding (A) any Event of Default in the payment of the principal of any Outstanding Bonds 25 (whether at maturity or by sinking fund redemption) or (B) any default in the payment when due of the interest on any such Bonds unless, prior to such wmver or rescission, (1) there shall have been paid or provided for all arrears of ~nterest with interest, to the extent permitted by law, at the rate borne by the Bonds on overdue installments of interest, all arrears of principal and premium, if any, and all expenses of the Trustee in connection with 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 wmver or rescission shall extend to any subsequent or other default or impair 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 interest 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 herein 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, w~thout the consent of, or notice to, any of the Bondholders, enter into Supplemental Agreements of Trust as shall not be inconsistent with the intent 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 ~n effect or any state securities (Blue Sky) law, and, if they so determine, to add to thru Agreement such other terms, conditions and provisions as may be reqmred by said Trust Indenture Act of 1939, as amended, or similar 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 Authority; (e) To modify, amend or supplement this Agreement in such manner as required to permit the Authority to comply with the provisions of the Code relating to the rebate to the United States of America of earnings derived from the investment of the proceeds of Bonds, provided that such modification, 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 maintain its rating on the Bonds, provided that such modification, amendment or supplement does not materially adversely affect the holders of all Bonds then Outstanding; (g) To authorize 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 contained in th~s 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 anything in this 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, in any particular, any of the terms or prowslons contained in this Agreement and any Supplemental Agreements of Trust; provided, however, that if, in the opinion of the Trustee, any agreement supplemental hereto, modifying, altenng, amending, adding to or rescinding any of the terms or provisions shall affect only one Series of Bonds, then only the consent and approval of a majority ~n aggregate principal amount of Bonds then outstanding of such particular series shall be required for such supplemental agreement, provided, further, that nothing in this Agreement shall permit, or be construed as permitting, (a) an extension of the maturity of the principal of or the interest 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 pnnmpal amount of Bonds required for consent to such Supplemental Agreements of Trust, (d) a reduction in the principal amount of or premium, if any, on any Bond or the rate of Interest 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 Outstandxng. 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 registered or certified mail to the registered holder of each Bond at his address as it appears on the registration books. Such notice 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 ~nspection by all Bondholders. If, within 90 days or such longer period as shall be prescribed by the Authority following the giving of such notice, the holders of not less than a majority in aggregate pnncipal amount 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 fight to object to any of the terms and provisions contained therein, or the operation hereof, or in any manner to question the propriety thereof, or to enjoin or restrain the Trustee or the Authority from executing such Supplemental Agreement of Trust or from taking any action pursuant to the prowslons thereof. Upon the execution of any such Supplemental Agreement of Trust as ~n this 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 Authority and the Trustee shall, without the consent of or not,ce to the Bondholders, consent to any amendment, change or modification of the Support Agreement as may be required: (a) By the provisions of the Support Agreement or this Agreement; (b) For the purpose of curing any ambiguity or formal defect or omission therein; (c) To subject to th~s Agreement additional revenues, properties or collateral; (d) In connection with the issuance of one or more Series of Bonds pursuant to Artmle III other than the initial 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 in amounts sufficient to pay principal 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 convenient 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 Authority and the Trustee shall, without the consent of or notice to the Bondholders, consent to any such amendment, change or modification made in connection w~th any modification or amendment of, or supplement to, this Agreement pursuant to Section 1001 (c). Section 1004. Amendments to Support Agreement Requiring Consent of Bondholders. Except for amendments, changes or modifications 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 ~n aggregate principal amount of Bonds then Outstanding given and procured as provided ~n 28 Section 1002. If at any time the Authority and the City shall request the consent of the Trustee to any such proposed amendment, change or modffication, the Trustee shall, upon being satisfactorily indemnified with respect to expenses, cause notice of such proposed amendment, change or modfficat~on to be given in 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 ~nstrument embodying the same is on file at the designated corporate trust office of the Trustee for inspection by all Bondholders. Section 1005. Limitation on Amendments. No amendment, change or modification may decrease the obligation of the City under the Support Agreement to pay amounts sufficient to pay principal 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 ~nto 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 into 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 comphes w~th ~ts terms and that on execution it will be vahd and b~nding on the party or part~es executing it in accordance with its terms, whmh 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 op~mon of Bond Counsel stating that such Supplemental Agreement of Trust or Supplemental Support Agreement will not have an adverse affect on the exemption of interest from gross income for Federal ~ncome 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 ~mposes any costs on, the C~ty 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 this 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 ~n it by th~s Agreement and use the same degree of care and skill in their exercise as a prudent man ordinarily would exercise and use under the c~rcumstances ~n the conduct of his own affmrs. (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 w~th 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 here~n or in the Bonds (except in respect to the certificate of the Trustee endorsed on the Bonds) or for the recor&ng, re- recording, filing or re-filing of any financing or continuation statement or any other document or instrument, or for the validity 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 ~ntended 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 incurred 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 d~rectors, officers, employees or agents may ~n good faith buy, sell, own, hold and deal in the Bonds and may join ~n 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 30 may also receive tenders and purchase ~n good froth Bonds from itself, 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, certificate, order, affidavit, letter, telegram or other paper or document reasonably believed by ~t to be genmne 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 t~me of making such request or giving such authority or consent is the holders of any Bond shall be conclusive and binding upon all future holders of the same Bond and upon Bonds issued in exchange therefor or in place thereof. (f) As to the existence or non-existence of any fact or as to the sufficiency or vahdity 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 Chairman or Vice-Chairman and attested by its Secretary under ~ts 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 ~ts City Manager or by such person or persons as may be designated for such purposes by the City Manager or the City Council, as sufficient ewdence of the facts therein contained, and prior to the occurrence of a default of which the Trustee has been notified as provided in subsection (h) of this Section, or of which by said subsection it is deemed to have not~ce, may also accept a similar certificate to the effect that any particular dealing, transaction or action is necessary or expedient, but may at its discretion secure such further evidence deemed necessary or advisable, but shall in no case be bound to secure the same. The Trustee may accept a certfficate of the City Clerk or of the Secretary of the Authority under its seal to the effect that a resolution in the form therein 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 in full force and effect. (g) The permissive 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 ~ts negligence 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 reqmred 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 C~ty to file with 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 C~ty or by the holders of not less than 25% ~n aggregate pnnmpal amount of Bonds then Outstanding. 0) The Trustee shall not be required to give any bond or surety with respect to the execution of ~ts rights and obhgations hereunder. 0) 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 ~n respect of the authentmation of any Bonds, the withdrawal of any cash, the release of any property, or any action whatsoever within the purview of this Agreement, any showings, certfficates, 31 opinions, appraisals or other information, or corporate action or evidence thereof, in addition to that required by the terms hereof. (k) Before taking any action under this Agreement the Trustee may require that indemnity satisfactory to it be furnished to it for the reimbursement of all expenses to which it may be put and to protect it against all habllity by reason of any action so taken, except habflity which ~s adjudmated to have resulted from ~ts negligence or willful default. (1) All moneys received by the Trustee shall, until used or applied or invested as herein provided, be held in trust in the manner and for the purposes for which they were received but need not be segregated from other moneys except to the extent required by this Agreement or law. The Trustee shall not be under any liabihty for interest 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 reimbursement by the C~ty, as provided in the Support Agreement for reasonable fees for its services and all expenses reasonably incurred by it hereunder, ~nclud~ng the reasonable fees and disbursements of its counsel; provided that the trust estate shall not be liable 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 lien with right of payment prior to payment on account of pnncipal of, or premium, if any, and Interest on any Bond upon the trust estate created by th~s 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 ~s a party and which in the opinion of the Trustee has a substantial beating 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% in aggregate pnncipal amount of Bonds then Outstanding. Section 1104. Merger or Consolidation of Trustee. Any corporation or association into which the Trustee may be converted or merged, or with which it may be consolidated, or to which ~t 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, consohdation or transfer to whmh it is a party shall be and become successor Trustee hereunder and vested with all the trusts, powers, discretion, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any instrument or any further act, deed or conveyance on the part of any of the parties hereto, anything here~n 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' notice 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 instrument or concurrent instruments in writing delivered to the Trustee and the Authority and sagned by the holders of a majority in aggregate principal 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 contlnmng or when an event has occurred and is continuing or condation exists that with the giving of notice or the passage of tame, 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 aRer the removal date. Notwithstanding the foregoing, nothing contained ~n this Agreement shall relieve the Authority of its obhgation to pay the Trustee's fees and expenses ~ncurred 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 C~ty 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 ~t 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 ~n case of such vacancy the C~ty, by an instrument signed by an Authorized C~ty Representative, may appoint a temporary Trustee to fill such vacancy until a successor Trustee shall be appointed by the Bondholders in the manner provided above; and any such temporary Trustee so appointed by the City shall immediately and without further act be superseded by the Trustee so appointed 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, in good standing and having a combined capital, surplus and undivided 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 V~rglnia Code, or any successor provision of law, whose parent Virginia bank or bank holding company has undertaken to be responsible for the acts of such subsidiary trust company pursuant to the provisions of Section 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 Authority an instrument in writing accepting such appointment hereunder, and thereupon such successor, without any further act, deed of conveyance, shall become fully vested with all the propemes, rights, powers, trusts, duties and obligations 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 its successor. Should any instrument in writing from the Authority be required by any successor Trustee for more fully and certainly vesting in such successor the properties, rights, powers and duties hereby vested or intended to be vested in the predecessor, any and all such ~nstmments 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 in 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 obligations of the Authority under this Agreement and the hens, pledges, charges, trusts, covenants and agreements of the Authority herein made or provided for, shall be fully discharged 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 principal and the apphcable 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 made or caused to be made in accordance with the terms thereof, or (2) payment of the principal 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 provided by irrevocably depositing w~th the Trustee, in trust, and ~rrevocably appropriating and setting aside exclusively for such payment (i) 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 insure the avallabihty of sufficient moneys to make such payment, or (ill) a combination of both such moneys and noncallable Government Obligations, and (iv) 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, Government Obligations shall not ~nclude 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 (b) above shall constitute such payment, discharge and satisfaction as aforesaid until such Bond shall have been irrevocably called or designated for redemption or prepayment and proper notice of such redemption or prepayment shall have been previously mailed in accordance with Section 402 of this Agreement, or irrevocable provision shall have been made for the giving of such notice; provided that nothing in this Article shall require or be deemed to require the Authority 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 Article 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 provisions of this Article, all moneys or Government Obligations set aside and held in trust pursuant to the provisions of this Article for the payment of Bonds (including interest and premium, if any, thereof) shall be apphed to and used solely for the payment of the particular Bonds (including interest and premium thereof) with respect to which such moneys and Government Obligations have been so set aside ~n 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 C~ty 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 obligations of the Authority or the City to the registered holders of such Bonds will cease and be discharged and satisfied. ARTICLE XIII MISCELLANEOUS Section 1301. Consents, etc., of Bondholders. Any consent, request, direction, approval, objection or other instrument (collectively, a "Consent") required by this Agreement to be executed by the Bondholders may be in any number of concurrent writings of similar tenor and may be executed by such Bondholders in person or by agent appointed in writing. 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 with 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 within such jurisdiction that the person signing 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 rights herein expressly conferred, nothing expressed or mentioned in or to be implied from this Agreement or the Bonds is intended or shall be construed to give to any person other than the parties hereto and the holders of the Bonds any legal or equitable right, remedy or claim under or in respect to this Agreement or any covenants, conditions and agreements herein contained since this 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 herein provided. Section 1303. Limitation of Liability of Authority, Etc. No covenant, agreement or obhgation contained 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 Authority in his 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 liability or accountability by reason of the issuance thereof. No member of the Authority or officer, commissioner, employee, agent or advisor of the Authority shall incur any personal liability with respect to any other action taken by him pursuant to this 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 invahdate 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, opinions and other communications hereunder shall be in writing and shall be deemed to have been given when delivered in person or mailed by first class registered or certified mail, postage prepaid, addressed (a) if to the Authority, at One Columbus Center, Suite 300, Virginia Beach, Virginia 23462 (Attention: Chairman), (b) if to the City, at Municipal Center, Virginia Beach, Virginia 23456 (Attention: City 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, notices, approvals, consents, requests, opinions or other communications shall be sent or persons to whose attention the same shall be directed. Section 1306. Successors and Assigns. This Agreement shall be binding upon, inure 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 applicable laws of the Commonwealth of Virginia. Section 1308. Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which together shall constitute but one and the same instrument. 37 IN WITNESS WHEREOF, the Authority 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 TABLE OF CONTENT,S Parties ............................................................................................................................................ 1 Recitals ............................................................................................................................................. 1 Granting Clause ............................................................................................................................... 1 ARTICLE I FIRST SUPPLEMENTAL AGREEMENT Section 1.101. Authorization of First Supplemental Agreement ..................................................... 1 Section 1.102. Definitions ............................................................................................................... 2 Section 1.103. Rules of Construction .............................................................................................. 2 ARTICLE II AUTHORIZATION, DETAILS AND FORM OF SERIES 2003A BONDS Section 1.201. Authorization of Series 2003A Bonds and Series 2003A Projects .......................... 3 Section 1.202. Details of Series 2003A Bonds ................................................................................ 3 Section 1.203. Form of Series 2003A Bonds ................................................................................... 4 Section 1.204. Securities Depository Provisions ............................................................................. 4 Section 1.205. Delivery of Series 2003A Bonds ............................................................................ 5 ARTICLE III REDEMPTION OF SERIES 2003A BONDS Section 1.301. Redemption Date and Price ..................................................................................... 5 Section 1.302. Selection of Series 2003A Bonds for Redemption .................................................. 5 Section 1.303. Notice of Redemption .............................................................................................. 6 ARTICLE IV APPLICATION OF PROCEEDS OF SERIES 2003A BONDS Section 1.401. Application of Proceeds of Series 2003A Bonds ..................................................... 6 ARTICLE V ESTABLISHMENT OF ACCOUNT Section 1.501. Series 2003A Project Account ................................................................................. 6 (1) 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 Section 1.702. Limitation of Rights ................................................................................................. 7 Section 1.703. Severabihty .............................................................................................................. 7 Section 1.704. Successors and Assigns ............................................................................................ 7 Section 1.705. Apphcable Law ........................................................................................................ 7 Section 1.706. Counterparts ............................................................................................................. 7 Signatures 11 Exhibit A - Form of Series 2003 Bond ....................................................................................... A-1 (11) 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 pohtlcal subdivision of the Commonwealth of Virginia (the "Authority"), and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, having a corporate trust office in Richmond, Virginia, 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 Virginia duly created by Chapter 643 of the Virginia 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, Virginia (the "City"); and WHEREAS, within the limitations of and in compliance with the Master Agreement of Trust, the C~ty has requested the Authority to ~ssue a series 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 pnncipal 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, ~f 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 ~ssued by the Authority, valid and binding limited obligations of the Authority and to constitute this First Supplemental Agreement a valid and binding agreement authonmng 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 in 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 in this First Supplemental Agreement, words defined in the Master Agreement of Trust are used in this First Supplemental Agreement with the meanings assigned to them in 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 this 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 Authority to the Securities Depository and any amendments thereto or successor agreements between the Authority 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 into 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 Section 1.204, and their successors. "Series 2003A Bonds" shall mean the Authonty's $ Pubhc 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 in 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 requires: (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 herein to particular Articles or Sections are references to Artmles or Sections of this First Supplemental Agreement. (d) The headings herein and Table of Contents to this First Supplemental Agreement herein are solely for convenience of reference and shall not constitute a part of this First Supplemental Agreement nor shall they affect its 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 ~ssuing the Series 2003A Bonds, in accordance w~th Article IV hereof. Section 1.202. Details of Series 2003A Bonds. (a) The Series 2003A Bonds shall be designated "Public 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 semiannually 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, if such Series 2003A Bond is authenticated prior to the first interest payment date, or (b) otherwise from the interest payment date that is, or immediately precedes, the date on which such Series 2003A Bond is authenticated; provided, 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 interest from the date to which interest has been paid. Interest shall be calculated on the basis of a 360-day year of twelve 30-day months. (c) Pnnc~pal 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 registration 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 registered 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 interest shall be payable in lawful money of the United States of America. Section 1.203. Form of Series 2003A Bonds. The Series 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 certificate for each maturity of the Series 2003A Bonds will be issued and registered to the Securities Depository, or its nominee. The Authority shall enter ~nto 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 discharging its 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 obtain 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 authentmate and deliver certfficated 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 provide for interest on the Series 2003A Bonds to be payable (i) from [September 1,] 2003, if it is authenticated prior to June 1, 2004, or (ii) 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 fi'om the date to which interest has been paid). 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 registrable, transferable and exchangeable as set forth in 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 2003^ Bonds, (B) notwithstanding anything 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 mmntmned by the Securities Depository, its participants or persons acting through such participants, (D) references in this First Supplemental Agreement to registered holder(s) of the Series 2003A Bonds shall mean such Securities Depository or its nominee and shall not mean the beneficial owners of the Series 2003A Bonds and (E) in the event of any inconsistency between the provisions of this First Supplemental Agreement, other than those set forth in this paragraph and the preceding paragraph, and the provisions of the Letter of Representations such provisions of the Letter of Representations shall control. Section 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 0n increments of $5,000), at a redemption price of 100% of the principal amount, 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, ~f the book-entry system ~s d~scont~nued, 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 in 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 obtained by dividing the principal amount of such Series 2003A Bond by $5,000. If a port~on of a Series 2003A Bond shall be called for redemption, a new Series 2003A Bond in prinmpal amount equal to the unredeemed portion thereof shall be ~ssued to the registered owner upon the surrender thereof. Section 1.303. Notice of Redemption. Notice of redemption of Series 2003A Bonds shall be given in the manner set forth in 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 applied as follows: (a) $ ., representing accrued interest on the Series 2003A Bonds, shall be deposited in the Interest Account in the Bond Fund; and (b) $ shall be transferred to the City for deposit in the Series 2003A Project Account in the Project Fund. ARTICLE V ESTABLISHMENT OF ACCOUNT Section 1.501. Series 2003A Project Account. There shall be established within the Project Fund a spemal account entitled "Series 2003A Project Account." The portion of the proceeds of the Series 2003A Bonds specified in Section 1.401(b) shall be deposited by the City in the Series 2003A Project Account. Money in the Series 2003A Project Account shall be used ~n accordance w~th 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 income for Federal income tax purposes. The Authority covenants with the holders of the Series 2003A Bonds not to take any action that would adversely affect, and to take all action within its power necessary to maintain, the exclusion of interest on all Senes 2003A Bonds from gross income for Federal income taxation purposes. Section 1.702. Limitation of Rights. With the exception of fights herein expressly conferred, nothing expressed or mentioned in or to be implied from this First Supplemental Agreement or the Series 2003A Bonds is 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 claim under or in respect to this First Supplemental Agreement or any covenants, conditions and agreements herein contained since this First Supplemental Agreement and all of the covenants, conditions and agreements hereof are intended to be and are for the sole and exclusive benefit of the parties hereto and the holders of Bonds as herein provided. Section 1.703. Severability. If any provision of this First Supplemental Agreement shall be held invalid by any court of competent jurisdiction, such holding shall not invalidate any other provision hereof and this First Supplemental Agreement shall be construed and enforced as if such illegal provision had not been contained herein. Section 1.704. Successors and Assigns. This First 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 applicable laws of the Commonwealth of Virginia. Section 1.706. Counterparts. This First Supplemental Agreement may be executed in several counterparts, each of which shall be an original and all of which together shall constitute but one and the same Instrument. IN WITNESS WHEREOF, the Authority and the Trustee have caused this First Supplemental 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 Title Acknowledged and Consented To: CITY OF VIRGINIA BEACH, VIRGINIA, By: Title: 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 prinmpal corporate trust office of Wachovia Bank, National Association, Richmond, Virgima as trustee, or its successor in trust (the "Trustee"), under the Agreement of Trust (as hereinafter defined) solely from the source and as hereinafter promded, to the registered owner hereof, or registered assigns or legal representative, the prinmpal 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, beginmng Jtme 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, ~f th~s bond is authentmated prior to June 1, 2004, or (b) otherwise from the June 1 or December 1 that is, or ~mmediately precedes, the date on whmh this bond is authentmated (unless payment of ~nterest hereon is ~n default, in which case this bond shall bear interest from the date to which interest has been paid). Interest is payable by check or draft mailed to the registered owner hereof at ~ts address as it appears on the 15th day of the month preceding each interest payment date on registration books kept by the Trustee; prowded, however, that at the option of a registered owner of at least $1,000,000 of Bonds (as hereinafter defined), payment will be made by w~re 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 this bond a Business Day (as hereinafter defined), 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 interest are payable in lawful money of the United States of America. "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. Notwithstanding any other provision hereof, this bond is subject to book-entry form maintained by The Depository Trust Company ("DTC"), and the payment of pnncipal and Interest, the providing of notices and other matters shall be made as described in the Authority's Letter of Representations to DTC. This bond is one of an ~ssue of $ Public Facility Revenue Bonds, Series 2003A (the "Bonds"), authorized and issued pursuant to Chapter 643 of the Virginia Acts of Assembly of 1964, as amended. The Bonds are issued 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 Authority and the City of Virginia Beach, Virginia (the "City"), and (b) the Authonty's rights under the Support Agreement (except for the Authonty's rights under the Support Agreement to the payment of certain fees and expenses and the rights to notices). Reference is hereby made to the Agreement of Trust for a description of the provisions, among others, with respect to the nature and extent of the security, the rights, duties and obligations of the Authority 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 City 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 ~n 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 issuing 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 obhgatlon of the City to make payments under the Support Agreement does not constitute a debt of the City within the meaning of any constitutional or statutory limitation nor a liability 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 SUBDWISION 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 herein 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 individual capacity, and neither the Chairman of the Authority nor any officer thereof executing this Bond shall be liable 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 in 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 maturity dates. The Bonds maturing on or after December l, 2014, may be redeemed prior to their respective maturities on or after December 1, 2013, at the option of the Authority, at the direction of the City, an whole or in part at any time at a redemption price of 100% of the principal amount, 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 Its rules and procedures or, if the book-entry system is discontinued, shall be selected by the Trustee by lot in 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 integral multiple thereof. In selecting Bonds for redemption, each Bond shall be considered as representing that number of Bonds which is obtained by dividing the principal amount of such Bond by $5,000. A-3 If any of the Bonds or portions thereof are called for redemption, the Trustee shall send notice of the call for redemption, identifying the Bonds or portions thereof to be redeemed, not less than 30 nor more than 60 days prior to the redemption date, by facsimile, registered or certified mml or overnight express delivery, 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 notice 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 prowsions 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 suit or other proceedings with respect thereto, except as provided in 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 issuable 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 representattve ~n such form as shall be satisfactory to the Trustee, the Authority shall execute, and the Trustee shall authenticate and dehver ~n exchange, a new Bond or Bonds ~n 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 paid 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 rights 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 ~n 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 Certfficate of Authentication appearing hereon and inserted the date of authentication hereon. IN WITNESS WHEREOF, the City of Virginia Beach Development Authority has caused this Bond to be signed by its Chairman, ~ts seal to be imprinted hereon and attested by ~ts 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 within mentioned Agreement of Trust. WACHOVIA BANK, NATIONAL ASSOCIATION, as Trustee By Authorized Officer A-6 ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and transfer(s) unto (please prim or typewrite name and address, including z~p code, of Transferee) PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF TRANSFEREE the within Bond and all rights thereunder, hereby irrevocably constituting and appmnting , Attorney, to transfer said Bond on the books kept for the registration thereof, with full power of substitution in the premises. Dated: S~gnature Guaranteed NOTICE: Signature(s) must be guaranteed by an Eligible Guarantor Institution such as a Commercial Bank, Trust Company, Securities Broker/Dealer, Credit Union, or Savings Association who is a member of a medallion program approved by The Securities Transfer Association, Inc. (Signature of Registered Owner NOTICE: The s~gnature above must correspond with the name of the registered owner as it appears on the front of th~s bond ~n 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 Parties ............................................................................................................................................... 1 Recitals ............................................................................................................................................. 1 Granting Clauses .............................................................................................................................. 1 ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION Section 1.1. Definitions ................................................................................................................ 2 Section 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 Compliance 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 -1- Section 6.1. Section 6.2. Section 6.3. Section 6.4. Section 6.5. Section 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 City...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 Waiver 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 Series 2002A Arbitrage Rebate Fund .......................... 15 ARTICLE X MISCELLANEOUS Notices ................................................................................................................... 15 Severability ........................................................................................................... 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 Signatures ....................................................................................................................................... 17 Receipt ........................................................................................................................................... 18 Exhibit A- Schedule of Payments .............................................................................................. A-1 -iii- THIS SUPPORT AGREEMENT dated as of the [first] day of [September], 2003, by and between the CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY, a political subdivision of the Commonwealth of Virginia (the "Authority"), and the CITY OF VIRGINIA BEACH, VIRGINIA, a pohtical subdivision of the Commonwealth of Virginia (the "City"), provides: WITNESSETH: WHEREAS, the Authority is a poht~cal subd~ws~on of the Commonwealth of V~rg~ma duly created by Chapter 643 of the Virginia Acts of Assembly of 1964, as amended (the "Act"); and WHEREAS, the Act authorizes the Authority to acquire, improve, maintain, 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 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 ~nfrastructure and the construction of public facilities and other municipal ~mprovements ~n the City, which will promote commerce and the prosperity of the c~t~zens of V~rglnia Beach; and WHEREAS, in furtherance of the purposes of the Act, the City has requested the Authority to undertake from time to time 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 First 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"), its public facility revenue bonds and to use the proceeds thereof to finance costs ~ncurred ~n connection w~th the Projects for the benefit of the City; and WHEREAS, such public facility revenue bonds w~ll 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 entenng into this Support Agreement have happened, exist and have been performed ~n regular and due time and ~n form and manner as required 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 part~es 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 ~n the Master Agreement of Trust. The following words as used in th~s 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 4.1(b) 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 ~n accordance with the schedule attached as Exhibit A hereto, whmh such payments correspond in amount to the payments of principal and interest due on all Outstanding Bonds, and whmh payments include payments pursuant to agreements with prowders of credit enhancement or hquidity support wah respect to such Bonds, to reimburse such providers for debt servme payments made, and to pay credit enhancement or hquid~ty support fees w~th respect to such Bonds, scheduled to come due within a specified F~scal 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 beginning 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 C~ty. "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 t~me to t~me and identffied in a Supplemental Support Agreement, including without hmitation, the financing or refinancing of the acquisition, construction, ~mprovement or equipping of infrastructure, public facilities and other improvements and facilities 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 in Section 9.1. "Supplemental Support Agreement" shall mean any Supplemental Support Agreement supplementing, amending or modifying the provisions 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 Authority's $ Public Facility 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 calling 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 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 herein to payment of Bonds are references to payment of principal of and premium, if any, and interest on the Bonds. ARTICLE II REPRESENTATIONS Section 2.1. Representations by Authority. The Authority makes the following representations: (a) The Authority is a pohtical subdivision of the Commonwealth of Virginia duly created under the Act; (b) Pursuant to the Act, the Authority has full power and authority to enter into 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 in 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 kind to which the Authority or any of Its assets is subject; (d) 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 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 involving 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 Basle Agreements, (3) the validity or enforceability of the Basle Agreements or the Authonty'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; (b) The City 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 obhgatlons thereunder and by proper action has duly authorized, executed and delivered such Basic Agreements; (c) The City is 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 continuing 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 15 not in default under or in violation of, and the execution, delivery and compliance by the City with the terms and conditions of the Basic Agreements to which it 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 restriction 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 an connection with the execution or delivery of or compliance by the City with the terms and conditions of the Basic Agreements to which 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 Basle 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 this 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 it pursuant to this Support Agreement and from other moneys and security 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 Authority, 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 required by the Agreement of Trust. By its execution of this Support Agreement, the City acknowledges its approval of all the terms and conditions set forth in 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 Authority 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 pnncipal corporate trust office of the Trustee in Richmond, Virginia. The City shall receive a credit against its obligation to make the next succeeding Annual Payment due under this Support Agreement in 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 with 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 specific 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 in 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 connection with its obligations under this Support Agreement and (3) all other amounts which the City 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 this Support Agreement and In 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 amounts payable by the City that are so assigned. Section 4.3. Obligation Unconditional. Except as otherwise provided in this Support Agreement, including the limitation in Section 4.4, the obligations of the City to make all Annual Payments and to observe all other covenants, conditions and agreements under the Basle Agreements shall be absolute and unconditional, irrespective of any right of setoff, recoupment or counterclaim the City may otherwise have against the Authority, and the City shall not suspend or discontinue any such Annual Payment or fall to observe and perform any of its covenants, conditions and agreements under the Basic Agreements. Section 4.4. Appropriations of Annual Payments and Additional Payments. While recognizing that it is not empowered to make any binding commitment to make Annual Payments and Additional Payments beyond the current Fiscal Year, the City Council in 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 anything in this Support Agreement to the contrary, the City's obligations to pay the cost of performing its obligations under this Support Agreement and the Agreement of Trust, including its obligations 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 City Manager or other officer charged with the responsibility for preparing the City's Annual Budget shall include in the budget for each Fiscal Year as a single 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 City Manager or other officer charged with the responsibility for preparing the City's Annual Budget shall dehver to the Trustee and the Authority within l0 days after the adoption of the Annual Budget for each Fiscal Year, but not later than 10 days aRer the beginning 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 Council 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 responsibility for preparing the City's Annual Budget shall give written notice to the City Council of the consequences of such failure to appropriate and request the City Council to consider a supplemental appropriation 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 in the amounts 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 exercise 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 given pursuant to Section 402 of the Master Agreement of Trust, such notice to the Trustee to specify the redemption date, the principal 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 obligation of any present or future member, officer, commissioner, employee or agent of the Authority in his individual capacity, and neither the members of the Authority nor any officer thereof executing any Series of Bonds shall be liable personally on such Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. 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 this Support Agreement or the Act or any of the transactions contemplated thereby provided that he acts in good faith. No covenant, agreement or obligation contained 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 incur any personal liability with respect to any Series of Bonds or action taken by ham 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 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) barfing 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 with the Authority's "non-arbitrage" certificate given immediately prior to the issuance 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 income for Federal income tax purposes at the time of their issuance) to be used in 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 provided in Section 141 (b) of the Code, provided that no more than 5% of such proceeds may be used in a trade or business unrelated or disproportionate 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), within the meaning of Section 141(b)(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 unit, as provided in Section 141 (c) of the Code; provided, however, that if the City receives an opinion of Bond Counsel that any such covenants need not be complied with to prevent the interest on such Bonds from being includable in the gross income for Federal income tax purposes under existing law, the City 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 portion 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 foregoing, the City covenants to either (1) 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 income at the time of their issuance. Section 6.5. Maintenance of Existence of Authority. Except for the assignment of Its rights under this Support Agreement to the Trustee pursuant to the Agreement of Trust, the Authority agrees that it will not assign, transfer or convey its interest in this Support Agreement or any of the revenues to be derived therefrom. The Authority further agrees that, until the Bonds have been paid in full, the Authority will not (a) dissolve or otherwise dispose of all or substantially all of its assets, (b) consolidate with or merge into any authority, corporation, association or other body, (c) permit any other authority, corporation, association or other body to consolidate with or merge into it, (d) act jointly with any other authority, corporation, association or other body (other than the City 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 (ii) which would permit it, or require it by operation of law, to avoid its obligations under this Support Agreement or the Agreement of Trust or any other agreement contemplated hereby; provided, however, that nothing contained in this Section shall prevent the consolidation of the Authority with, or the merger of the Authority into, or the transfer of the interest of the Authority in this Support Agreement as an entirety to, any public corporation whose property and income are not subject to taxation and which has the corporate authority to carry out the transactions contemplated by this Support Agreement and the Agreement of Trust, but only on the condition that (A) reasonable prior notice of such consolidation, merger or transfer is given to the City and the Trustee, and (B) upon any such consolidation, merger or transfer, the obligation 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 consolidation or surviving 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 4.1(b) and (c), or to observe and perform any covenant, condition or agreement on its part to be observed or performed, which failure shall continue for a period of 30 days after notice IS given, or in the case of any such default that cannot with due diligence be cured within such 30 day period but can be cured within 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 in whole or in part to perform any of its covenants, conditions or agreements hereunder, the City shall not be deemed in default dunng the continuance of such inability. The term "force majeure" as used herein shall include without limitation acts of God; strikes, lockouts or other industrial disturbances; acts of public enemies; orders of any kind of the govemment of the United States of America or the Commonwealth of Virginia or any political subdivision thereof or any of their departments, agencies or officials, or any civil or military authority; insurrections; nots; epidemics; landslides; earthquakes; fires; hurricanes; tomadoes; storms; floods; washouts; droughts; restraint of govemment and people; or civil disturbances. The City shall remedy with all reasonable dmpatch 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 discretion of the City, and the City shall not be required to make settlement of strikes, lockouts and other industrial disturbances by acceding to the demands of any opposing party when such course is in the judgment of the City not in its best interests. (c) Notwithstanding anything contained in this Section to the contrary, (1) failure by the City to pay when due any payment required to be made under this Support Agreement or (2) failure by the City to observe and perform any covenant, condition or agreement on its part to be observed or performed under this Support Agreement, either 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 principal balance of Annual Payments to be immediately 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 this Support Agreement. Any amounts received by the Authority pursuant to the foregoing provisions shall be applied first to costs, then to any unpaid interest and then to repayment of principal, and upon payment in full of all amounts due such excess shall be deposited in the Bond Fund and credited to the next Annual Payment to the extent such Payments have not been paid 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 accruing upon any default shall Impair any such right or power or shall be construed to be a waiver thereof or acquiescence therein, but any such right and power may be exercised from time to time 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 require performance by the City of any provision 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 provision, or as a waiver of the provision itself. Section 7.6. Attorneys' Fees and Other Expenses. SubJect to the limitation in Section 4.4, the City shall on demand pay to the Authority and the Trustee the reasonable fees and expenses of attorneys and other reasonable expenses incurred by either 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 interest in this Support Agreement by the Authority, unless such sale, assignment, reassignment, pledge, mortgage, transfer or other disposition 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, reassignment, pledge, mortgage, transfer or other d~sposition is made, disclosing the name and address of the person or entity receiving such interest; provided, however, that if such assignment, reassignment, pledge, mortgage, transfer or other disposition is made to a bank or trust company as trustee or paying agent or escrow agent for the Authority's bonds, it 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 instrument or agency agreement is no longer in effect. (b) Subject to Section 4.4, the City covenants to take whatever action may be necessary for the Authority to comply with the Authority'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 it. 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 without the prior written consent of the C~ty. 12 Section 8.2. Amendments. This Support Agreement shall not be supplemented, amended or modified prior to the payment of all Outstanding Bonds, without the consent of the Trustee, given in accordance with Article X of the Master Agreement of Trust. Section 8.3. Assignment. Simultaneously with the execution of this Support Agreement, the Authority has entered ~nto the Master Agreement of Trust by which the Authority has assigned all of its rights in and to this Support Agreement (except its rights to receive payment of its fees and expenses, to receive notices and to give 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 Authority'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 ~s not inconsistent with the provisions hereof. All references in th~s Support Agreement to the Authority shall include the Trustee for the benefit of the Bondholders and their successors and assigns, whether or not specific 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 V~rg~ma Beach Development Authority Series 2003A Public 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 time for payment of the rebate obligations due under the Code with respect to the Series 2003A Bonds (the "Rebate Amount"). The City may estabhsh 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 required by Section 148(0 of the Code shall be taken, (ii) it shall at its sole expense make the rebate determinations required under the Code w~th respect to the Series 2003A Bonds and promptly notify the Trustee and the Authority of the same, together with supporting calculations, and deposit ~n the Series 2003A Arbitrage Rebate Fund such amounts as are shown to be due by such calculations, and (iii) it shall w~th~n forty-five (45) days after the final payment, whether upon redemption in whole or at maturity, of the Series 2003A Bonds, file w~th the Trustee, and, at the request of the Authority, w~th the Authority, a statement s~gned by the C~ty to the effect that the City is then ~n comphance w~th ~ts covenants contmned ~n clauses (i) and (ii) of this section, together with supporting calculations; provided, however, that if the C~ty 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 compliance 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 lnforrnatlon 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 dehver 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 United States of America upon payment of the Series 2003A Bonds, and the City shall pay to the United States of America on behalf of the Authority the amount, if any, by which 100% of the Rebate Amount set forth in such Rebate Amount Certificate exceeds the aggregate of all payments theretofore made pursuant to subsection (a). (c) The Authority covenants that, if 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 information 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 City, the Authority shall have no responsibility for such form or the Information 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 contained in any Rebate Amount Certificate and shall not be liable 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 within 10 days after the final payment of the Series 2003A Bonds with account transaction statements showing information with respect to eamings of amounts held under the First Supplemental Agreement of Trust as may be requested by the City in order to comply with the provisions of this Article. 14 Section 9.5. Disposition of Balance in Series 2003A Arbitrage Rebate Fund. After each payment required in Section 9.3 is made and any additional amount necessary to pay the full rebate obligation is retained, the remaining amount in the Series 2003A Arbitrage Rebate Fund shall be retained by the City and used for any lawful purpose. ARTICLE X MISCELLANEOUS Section 10.1. Notices. Unless otherwise provided herein, all demands, notices, approvals, consents, requests, opinions and other communications hereunder shall be in writing and shall be deemed to have been given when delivered in person or mailed by first class registered or certified mail, postage prepaid, addressed (a) if to the City, at Municipal Center, Virginia Beach, Virginia 23456 (Attention: City Manager), (b) if to the Authority, at One Columbus Center, Suite 300, Virginia Beach, Virginia 23462 (Attention: Chairman) and (c) if to the Trustee, at CMG/Corporate Trust - Bond Administration (VA-9646), 1021 East Cary Street, Third Floor, Richmond, Virginia 23219 (Attention: Corporate Trust Department). The City, the Authority and the Trustee may, by notice given hereunder, designate any further or different addresses to which subsequent demands, notices, approvals, consents, requests, opinions or other communications shall be sent or persons to whose attention the same shall be directed. Section 10.2. Severability. If any provision of this Support Agreement shall be held invalid by any court of competent jurisdiction, such holding shall not invalidate any other provision hereof. Section 10.3. Amounts Remaining Under Agreement of Trust. Any amount with respect to the Bonds remaining in any fund or account created under the Agreement of Trust shall, after payment of all amounts due from the City pursuant to the Basic Agreements, belong to and be paid to the City. Section 10.4. Limited Liability of City. Notwithstanding any provision of the Basic Agreements to the contrary, the obhgatlons of the City under the Basic Agreements are not general obligations of the City, but are limited obligations payable solely from payments of Annual Payments and Additional Payments. No officer, official, employee or agent of the City shall be personally liable on the City's obligations hereunder. The Authority shall not be liable under any circumstances for the actions of the City, as agent for the Authority, or for any actions of the City under the Basic Agreements. The Authority shall not be liable under any circumstances for the actions of the Trustee under the Basic Agreements. 15 Section 10.5. Successors and Assigns. This Support Agreement shall be binding upon, inure 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 whmh shall bc an original, all of which together shall constitute but one and the same instrument. 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 ~n accordance with the laws of the Commonwealth of V~rginia. 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 Virginia Beach Development Authority and the City of Virg~ma Beach, V~rginia, is hereby acknowledged. WACHOVIA BANK, NATIONAL ASSOCIATION, as Trustee By: Title: 18 SCHEDULE OF PAYMENTS EXHIBIT A Due Date Principal Interest Total Payment A-1 EXHIBIT B DESCRIPTION OF SERIES 2003A PROJECTS The following sets forth brief descnptions of the Projects to be financed in whole or in part with the proceeds of the Series 2003A Bonds: Conventton Center Replacement - This project provides for the replacement and relocation of the existing pavlhon 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-Ftrst Street Parlang Garage - This project is 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. Town Center Garage Block 10 - This project is for the construction of an approximate 840 space parking garage located in the Town Center district of the City. Town Center Garage Block 12 - This project is for the construction of an approximate 305 space parking garage located in the Town Center district of the City. Open Space &te Acqutsttton- This project provides for the acquisition of land for preservation and/or recreational purposes. Vtrgtnta Martne Sctence Museum Parlang - This project will provide a 500 space parking lot across the road from the museum. Emergency Commumcattons Operatton 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 Collection System - This project provides for a comprehensive, fully integrated tax system to replace the computer systems currently used to support tax revenue assessment and collection. Electrontc Ballot System - This project is for the purchase of 800 new voter machines to provide an electronic ballot station. Pavthon 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 Communicattons Infrastructure Replacement - This project will replace various components of the public safety communications infrastructure related to equipment associated with receiving, dispatching, transpondlng and answering public safety calls. Ftre Apparatus Eqmpment - This project funds replacement of heavy equipment fire apparatus that costs over $50,000 and have a useful life of over ten years. 22764 000254 RICHMOND 1035085v3 A-2 Dated ,~003 . 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 * Preliminary, 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 BE'I'WEEN 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 C~ty of V~rg~ma Beach, Vlrg~ma Audited Financial Statements of the City for F~scal Year ended June 30, 2002 Proposed Form of Bond Counsel Op~mon Form of Conbnu~ng Disclosure Agreement Information Regarding The Depository Trust Company and its Book-Entry System Official Nobce of Sale and B~d Form CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY Robert G Jones, Chair Donald V. Jelhg, V~ce-Cha~r 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 Leslie L Lilley, C~ty Attorney Ruth Hodges Smith, C~ty Clerk Steven T Thompson, Chief F~nanc/al Officer Patnc~a A Ph~lhps, D/rector of Finance John T Atk~nson, C~ty Treasurer BOND COUNSEL Hunton & W~lhams LLP R~verfront Plaza, East Tower 951 East Byrd Street R~chmond, V~rg~ma 23219 FINANCIAL ADVISORS Government F~nance Associates, Inc 590 Madison Avenue, 21st Floor New York, New York 10022 ARD Government F~nance Group 1601 N Kent Street, Suite 800 Arlington, V~rg~ma 22209 OFFICIAL STATEMENT CITY OF VIRGINIA BEACH DEVELOPMENT AUTHORITY $165,000,000' PUBLIC FACILITY REVENUE BONDS, SERIES 2003A INTRODUCTION The purpose of this Official Statement, including the cover pages and appendices, ~s to set forth certain ~nformabon ~n connection w~th the ~ssuance and sale by the C~ty of V~rg~n~a Beach Development Authority (the "Authority") of ~ts $165,000,000' Pubhc Facd~ty Revenue Bonds, Series 2003A (the "Series 2003A Bonds") The Series 2003A Bonds wdl be offered for sale through electromc b~dd~ng on September 9, 2003 An Official Nobce of Sale and B~d Form dated ,2003, relating to the Series 2003A Bonds and describing the electromc b~dd~ng process, ~s ~ncluded here~n as Appendix F The Series 2003A Bonds will 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 w~th the Master Agreement of Trust, the "Agreement of Trust"), between the Authority and Wachowa Bank, R~chmond, Virgm~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 facd~ty revenue bonds or notes and use the proceeds thereof to finance certain "authority facd~t~es" (as defined in the Act), as requested by the C~ty of V~rg~ma Beach, Virginia (the "C~ty") The Authority and the C~ty 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 acquls~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 C~ty has agreed to support such requests by paying to or on behalf of the Authority, subject to annual appropriation by the C~ty Councd of the City (the "C~ty Councd"), certain amounts sufficient to pay the pnnc~pal of and premium, ~f any, and ~nterest due on the Series 2003A Bonds The proceeds of the Series 2003A Bonds will be used to finance the acqu~s~bon and construction of various capital ~mprovements ~n the C~ty of Virgima Beach, V~rginia (collecbvely, the "Projects"), and to pay certain costs of issuance 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 Senes 2003A Bonds are dated September 1, 2003, and w~ll mature on December 1 ~n the years and ~n the amounts set forth on the ~nside cover Interest on the Series 2003A Bonds wdl be payable on each June 1 and December 1, commencing June 1, 2004, untd the earher of maturity or redempbon, at the rates per year set forth on the ~ns~de cover Interest will be calculated on the bas~s of a 360-day year of twelve 30-day months and w~ll be payable by check or draft mailed to the registered holders as of the fifteenth day of the month preceding each ~nterest payment date, provided that as long as the Series 2003A Bonds are ~n book-entry only form payments of pnnc~pal of and premium, ~f any, and ' Prehm,nary, subject to change ~nterest on the Series 2003A Bonds wdl be made by wire transfer to The Depository Trust Company, New York, New York ("DTC"), or such other secunbes depository as may be appointed The Series 2003A Bonds wdl be ~ssued ~n book-entry form only, registered ~n the name of Cede & Co, as nominee for DTC Individual purchases of beneficial ownership in each series of the Senes 2003A Bonds wdl be made ~n pnnc~pal amounts of $5,000 and ~ntegral multiples thereof. Individual purchasers of beneficial ownership ~n the Series 2003A Bonds ("Beneficial Owners") w~ll not receive physical dehvery of cerbflcates represenhng their ~nterest in the Series 2003A Bonds Transfer of the Senes 2003A Bonds and payment of pnnc~pal of and premium, ~f any, and ~nterest on the Series 2003A Bonds wdl be effected as described in Appendix E If the book-entry system ~s d~sconbnued, replacement bond or note cerbflcates wdl be dehvered as described ~n the Agreement of Trust, and the Beneficial Owners will 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 opbonal redemption prior to matunty The Senes 2003A Bonds that mature on or after December 1, 2014, may be redeemed by the Authority, at the d~recbon of the City, prior to their stated dates of maturity, at any bme on or after December 1, 2013, ~n whole or ~n part in ~ntegral multiples of $5,000, at the redempbon price of 100% of the pnnc~pal amount of the Series 2003A Bonds to be redeemed plus interest accrued to the redempbon 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 pnnc~pal of and premium, ~f any, and unpaid ~nterest accrued on such Series 2003A Bonds to the date fixed for redempbon have been prowded, ~nterest on such Series 2003A Bonds wdl cease to accrue, and their registered holder wdl be enbtled to receive payment only of the pnnc~pal of and premium, ~f any, and unpaid ~nterest accrued to the redempbon date on such Senes 2003A Bonds Notice of Redemption Nobce of redempbon w~ll be g~ven by the Trustee by facsimile, registered or certified mad or overmght express dehvery not less than 30 and not more than 60 days before the redempbon date to DTC, or, ~f DTC ~s no longer serving as secunbes depository for the Series 2003A Bonds, to the subsbtute secunbes depository, or, ~f no securities depository then exists, to the respechve registered holders of the Series 2003A Bonds to be redeemed at their addresses as shown on the reg~strabon books maintained by the Trustee Such nobce may reference certain cond~bons to the redempbon So long as DTC or ~ts nominee ~s registered owner of the Series 2003A Bonds, the Trustee wdl not be responsible for mad~ng nobces 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 optional redemption, the series and matunbes of the Series 2003A Bonds to be redeemed shall be selected by the Authority, upon the direcbon of the C~ty If less than all of the Series 2003A Bonds of a particular 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 disconbnued, 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 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 ~ncome 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 is ~ssu~ng the Series 2003A Bonds for the purpose of prowding 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 w~ll be sufficient to pay the principal of and premium, if any, and ~nterest on the Ser~es 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 Authonty, Annual Payments (as defined here~n 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 Ser~es 2003A Bonds and any addibonal bonds and notes ~ssued under the Agreement of Trust The Support Agreement also requires the C~ty to pay certain Add~bonal Payments (as defined here~n under "THE FINANCING DOCUMENTS -- Definitions") Other provisions of the Support Agreement are summarized ~n the secbon here~n "THE FINANCING DOCUMENTS -- The Support Agreement." Bond Fund; Project Fund Under the Agreement of Trust, the Authority pledges to the Trustee all r~ght, btle and interest to the Support Agreement, ~nclud~ng the Annual Payments made by the City, but excluding certain r~ghts 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 Series 2003A Project Account and the Bond Fund, are pledged to the payment of pnnc~pal of and premium, ~f any, and ~nterest 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 Ser~es 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 Series 2003A Bonds and w~ll deposit ~n the subaccount estabhshed for the Series 2003A Bonds ~n the Principal Account an amount equal to the principal due and payable on the next pnnc~pal payment date for the Series 2003A Bonds The Agreement of Trust prowdes that the Trustee w~ll deposit in the Series 2003A Project Account the proceeds of the Series 2003A Bonds, except pre-~ssuance accrued ~nterest The Trustee w~ll use money ~n the Series 2003A Project Account solely to pay the costs of the Projects and to pay certain costs of ~ssu~ng the Series 2003A Bonds The Trustee w~ll make payments from the Series 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 Series 2003A Project Account w~ll be expended on costs of the Projects and the costs of ~ssu~ng the Series 2003A Bonds by September 30, 2006 Additional Bonds Addtbonal bonds or notes secured on an equal and ratable bas~s with the Series 2003A Bonds may be ~ssued by the Authority from bme to time under a Supplemental Agreement of Trust and an amendment to the Support Agreement prowd~ng 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 provisions of the Agreement of Trust and the Support Agreement Th~s summary does not purport to be comprehensive or definitive and ~s quahfled by references to such documents in their enbrety, cop~es of which may be obtained at the office of the C,ty Manager All cap~tahzed terms have the meamngs set forth ~n the Agreement of Trust or the Support Agreement In add~bon to defined terms appearing elsewhere ~n th~s Official 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 City under the Support Agreement which payments are calculated to correspond in amount to the payments of principal and ~nterest due on the Bonds and any add~bonal obligations outstanding "Bond" or "Bonds" means any bonds, notes or other obhgations, including any notes or other obhgabons ~ssued in anbclpabon of bonds, notes, or other obhgations as the same shall be issued from bme to bme pursuant to Arbcle 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 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 maturity or pursuant to mandatory sinking fund redempbon) or ~nterest on any Bonds is due "Bus~ness Day" means a day on which banking business is transacted, but not including Saturday, Sunday or legal hohday, or any day which banking ~nsbtutlons are authorized by law to close ~n the c~ty ~n which the Trustee has ~ts principal corporate trust office "C~ty Council" means the Council of the C~ty of V~rgima Beach, V~rg~nia, as the govermng body of the C~ty "Code" means the Internal Revenue Code of 1986, as amended, including applicable regulabons, ruhngs 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 Rabngs or ~ts successors "Government Certificates" means certificates represenbng proportionate ownership of Government Obligations, 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 ~n the capacity of custodian of such certificates "Government Obligations" means (a) bonds, notes and other d~rect obhgabons of the United States of America, (b) securities unconditionally guaranteed as to the bmely payment of principal, ~f apphcable, and ~nterest by the Umted States of America or (c) bonds, notes and other obhgations ~ssued or guaranteed as to the bmely payment of pnnc~pal and ~nterest by the Rural Ubht~es Service (cerbflcates of beneficial ownership), Federal Housing Admlmstratlon (debentures), General Services Administration (part~c~pabon certificates), U S Maritime Adm~mstrabon (guaranteed T~tle XI financing), U S Department of Housing and Urban Development (project notes and local authority bonds), prowded such obhgabons are backed by the full faith and credit of the United States of America Stripped secunbes are permitted only if stripped by the agency ~tself Government Obhgations may be held d~rectly by the Trustee or ~n 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 portfolio of such ~nvestment company or investment trust ~s limited to Government Obligations "Moody's" means Moody's Investors Service or its successors. "Project Fund" means the Project Fund estabhshed in the Master Agreement of Trust "Ser~es" or "Series of Bonds" means a separate series of Bonds issued under the Master Agreement of Trust and a Supplemental Agreement of Trust The Senes 2003A Bonds w~ll consbtute a Ser~es of Bonds "Series 2003A Bonds" means the Authonty's $165,000,000' Public Facdity Revenue Bonds, Senes 2003A, authorized to be ~ssued pursuant to the F~rst Supplemental Agreement of Trust "Senes 2003A Project Account" means the Series 2003A Project Account established ~n the F~rst Supplemental Agreement of Trust and maintained w~th~n the Project Fund "S&P" means Standard & Poor's Rabngs Services, a d~ws~on of The McGraw-Hall Companies, Inc., or its successors "Supplemental Agreement of Trust" means any Supplemental Agreement of Trust supplemenbng, amending or modifying the provisions of the Master Agreement of Trust entered into by the Authority and the Trustee pursuant to Article X of the Master Agreement of Trust . Prehmlnary, subject to change "Supplemental Support Agreement" means any Supplemental Support Agreement supplementing, amending or modifying the prows~ons of the Support Agreement entered ~nto 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 ubhzed under the Agreement of Trust (1) Project Fund, ~n which there ~s estabhshed with 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 Principal Account The Agreement of Trust prowdes that separate subaccounts wdl be estabhshed for each ser~es 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 Authonty to apply them to other purposes as prowded ~n the Agreement of Trust The I~en 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, provided that moneys ~n any account or subaccount of the Bond Fund relating to a particular Series of Bonds shall secure only such Bonds, and that moneys in any account or subaccount of the Project Fund relabng to a parhcular Series of Bonds shall secure only such Bonds Bond Fund The Trustee wdl deposit m 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 installment and amount (a) to the apphcable subaccount estabhshed ~n 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 apphcable subaccount estabhshed ~n the Principal Account an amount equal to the pnnclpal due and payable on the next Bond Payment Date for the applicable Series of Bonds, whether at matunty or pursuant to redempbon The Trustee w~ll withdraw from the respecbve subaccounts w~th~n 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 will cause the same to be apphed to the payment of ~nterest due on such Bond Payment Date The Trustee wdl w~thdraw from the respecbve subaccounts w~th~n the Principal Account on each Bond Payment Date, amounts equal to the amounts of principal due with respect to the Bonds on such Bond Payment Date, and wdl cause the same to be apphed to the payment of pnnc~pal due on such Bond Payment Date In the event there are insufficient moneys ~n the Interest Account or the Pnnc~pal Account on any Bond Payment Date to pay interest and pnnc~pal due on such Bond Payment Date, the Trustee w~ll transfer any excess amounts on deposit in the Interest Account or the Principal Account, as apphcable, to the other Account ~n which there are ~nsuffic~ent moneys, being mindful of the provisos in the section "Parity of Bonds" below. The Trustee will pay from the Bond Fund when due the pnnc~pal of and interest on the Bonds then outstanding and will redeem or purchase Bonds ~n accordance with the redempbon prows~ons of the Bonds and the Agreement of Trust Series 2003A Project Account The C~ty wdl use money ~n the Series 2003A Project Account solely to pay all or a portion of the cost of the Projects The C~ty wdl make payments from the Series 2003A Project Account after flhng among ~ts records requ~s~bons prowding required mformabon w~th respect to the use of the amounts being requ~s~boned Any balance rema~mng ~n the Series 2003A Project Account after payment of the cost of the Projects wdl 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 C~ty and approved by Bond Counsel. Parity of Bonds. Each Ser~es of Bonds w~ll be issued pursuant to a Supplemental Agreement of Trust and w~ll be equally and ratably secured under the Agreement of Trust, w~thout preference, priority or dlstlncbon, provided, that the moneys in an account of the Bond Fund or the Project Fund w~ll secure only the applicable Series of Bonds to which such account relates, and provided further, that any Ser~es of Bonds may have other security pledged to ~ts payment In connecbon w~th the ~ssuance of each Ser~es of Bonds, the Trustee may create add~bonal 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 invested ~n obligations or secunbes that are permitted for the investment of pubhc funds under the Investment of Public Funds Act (Chapter 18, Title 2 1 of the V~rginia Code), or any successor provision of law applicable to such ~nvestments Any ~nvestments w~ll be held by or under the control of the Trustee or the C~ty and while so held will be deemed a part of the fund ~n which such money was originally held The earnings accruing on such ~nvestments, ~nclud~ng any profit reahzed, will be credited to such funds, except as otherwise provided ~n the Agreement of Trust, and any loss resulting from such investments w~ll be charged to such funds The Trustee w~ll sell and reduce to cash a sufficient amount of such ~nvestments whenever the cash balance ~n any fund ~s ~nsuffic~ent for its purposes Events of Default and Remedies Each of the following ~s an Event of Default under the Agreement of Trust (1) default ~n the payment of ~nterest on any Bond when due, (2) default ~n the payment of principal or premium, ~f any, of any Bond when due, (3) default ~n the observance or performance of any other covenant, condition or agreement on the part of the Authonty under the Agreement of Trust or the Bonds, subject to certain rights of the Authority 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 conbnuabon of an Event of Default, the Trustee may (and ~f requested by the holders of not less than 25% ~n aggregate principal amount of Bonds outstanding and ~f ~ndemmfled in accordance w~th preva~hng ~ndustry standards w~ll) proceed to protect and enforce the r~ghts of the holders of the Bonds by su~t, action or proceeding at law or ~n equity, ~ncludlng an acbon for specific performance of any covenant or agreement contained in the Agreement of Trust; provided, that the Trustee w~ll have no r~ght or authority to declare the enbre unpaid pnnc~pal of and ~nterest 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 w~ll have any right 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 conbnu~ng and the Trustee has nobce of it, (2) the holders of 25% in aggregate pnnclpal amount of Bonds then outstanding have made written request to the Trustee, and offered ~t reasonable opportunity e~ther to proceed to exercise the powers granted by the Agreement of Trust, to ~nsbtute such acbon, su~t or proceeding ~n ~ts own name; (3) the Trustee has been indemmfled as prowded by the Agreement of Trust, (4) the Trustee has fa~led or refused within a reasonable bme to comply w~th such request, (5) no d~recbon ~ncons~stent w~th such request has been g~ven to the Trustee by the holders of a majority ~n pnnc~pal amount of outstanding Bonds, and (6) notice of such action, suit or proceeding ~s g~ven to the Trustee Notwithstanding any other prowslon to the contrary, the holders of a majority ~n aggregate principal amount of Bonds outstanding, upon compliance w~th the Agreement of Trust's requirements as to ~ndemn~flcabon of the Trustee, w~ll have the right to d~rect all proceedings to be taken by the Trustee Subject to lim~tabons set forth ~n the Agreement of Trust, the Trustee may ~n its discretion, waive any Event of Default under the Agreement of Trust or any action taken pursuant to such Event of Default and will do so on the request of the holders of a majority ~n aggregate principal amount of Bonds then outstanding However, no waiver w~ll extend to any subsequent or other default or ~mpalr any r~ght resulbng from ~t Discharge of Agreement of Trust A Bond will be deemed no longer outstanding when any such Bond has been cancelled or surrendered for cancellation or purchased by the Authority from moneys ~n the Bond Fund or as to any Bond not so cancelled or purchased when (f) payment of the principal and the apphcable 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 (.) payment of the principal and apphcable premium, plus interest on such Bond to the due date thereof shall have been prowded by ~rrevocably deposlbng w~th the Trustee (A) moneys sufficient to make such payment, (B) noncallable Government Obligabons matunng as to principal and interest ~n such amount and at such bmes as will ensure the ava~lab~hty of sufficient moneys to make such payment, or (C) a comb~nabon of both such moneys and noncallable Government Obligabons 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 maturity w~ll be deemed pa~d and no longer outstanding only ~f such Bonds have been irrevocably called or designated for redemption. Supplemental Agreements of Trust. Any prows~on 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 ~n aggregate principal 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 addlbon, 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 r~ghts, 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 its quahflcat~on under the Trust Indenture Act of 1939, as amended, or any s~milar federal statute hereafter ~n effect or any state secunbes (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 prows~ons of the Code relabng to the rebate requirement with respect to investment of proceeds of the Bonds, provided that such modlflcabon does not mater~ally 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 rating on any Bonds, prowded that such amendment does not, ~n the op~n~on 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 ~s not matenally adverse to holders of all Bonds then outstanding The Authority and the Trustee may enter ~nto certain other supplemental agreements of trust upon receiwng the consent of certain percentages of holders of the Bonds If such a supplemental agreement of trust will affect only one Series of Bonds, ~t may be necessary to seek only the consent of the holders of a majority ~n aggregate principal 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, in good cond~bon Further, the Authority 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 fac~ht~es of hke kind The Authority may self-insure 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 C~ty's request to acquire and develop all or a port~on of the Projects from the proceeds of the Ser~es 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 Ser~es 2003A Bonds, upon the terms and cond~bons set forth ~n 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 appropr~abon by the C~ty Council Bonds In order to provide funds for all or a portion of the Projects, the Authority w~ll agree to ~ssue the Series 2003A Bonds beanng interest, maturing and hawng 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 C~ty agrees to pay to the Authority, or ~ts assignee, the Annual Payments set forth ~n the Support Agreement. The Annual Payments are ~n such amounts and are payable at such braes as are calculated to be sufficient to pay pnnc~pal of and ~nterest on the Bonds, includ~ng the Ser~es 2003A Bonds. The C~ty w~ll receive a credit against ~ts obhgabon to make Annual Payments to the extent there are amounts on deposit ~n the Bond Fund, provided that such amounts have not been applied previously as a credit w~th respect to any Annual Payment The C~ty also agrees to make Additional Payments, ~nclud~ng 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 within ten days after the adopbon of the annual budget for each F~scal Year, but not later than ten days after the beg~nmng of each F~scal Year, a certificate stabng whether an amount equal to the Annual Payments and esbmated Additional Payments which w~ll be due during such F~scal Year has been appropriated by the C~ty Council If any adopted annual budget does not ~nclude an appropr~abon of such funds, the C~ty Council ~s required to take a roll call vote ~mmed~ately after adopbon of such annual budget acknowledging the ~mpact of ~ts failure to appropriate such funds If, by fifteen days after the beginning of the F~scal Year, the City Council has not appropriated funds for the payment of both Annual Payments and esbmated Add~bonal Payments for the then current F~scal Year, the C~ty Manager or other officer charged with the responsibility for preparing the annual budget w~ll g~ve written notice to the C~ty Council of the consequences of such failure to appropriate, and request the C~ty Council to consider a supplemental appropriabon for such purposes The City has the opbon to prepay Annual Payments at the bmes and amounts as necessary to exercise ~ts opbon 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, ~f requested by the C~ty, to complete the Projects, the Authority agrees that it will, from t~me to bme, ~ssue additional obl~gabons under the Agreement of Trust The obligabon of the Authority to finance the costs of add~bonal proJects or to complete the Projects and to issue add~bonal Ser~es of Bonds w~ll be conditioned upon compliance w~th the provisions 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 conbnuat~on of such failure for a per~od of five days, or (2) failure of the C~ty to pay when due any other payment due under the Support Agreement, or to observe and perform any covenant, condition or agreement, which failure shall continue for a per~od of 30 days after nobce ~s g~ven, w~th certain r~ghts 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 Authority are to take whatever acbon at law or ~n equity, other than to declare the entire 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 Add~bonal Payments then due or to become due, or to enforce performance and observance of any obhgation, agreement or covenant of the C~ty An event of non-appropriation is not an Event of Default See the section "INVESTMENT CONSIDERATIONS -- Non-Appropriation and Limited Remedies." The Support Agreement w~ll 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, g~ven ~n 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~sbng ~ndustnes and prowd~ng fac~l~bes for use by governmental orgamzat~ons 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 th~ngs, to acquire, construct, maintain, equip, own, lease and d~spose of various types of fac~hbes, ~nclud~ng fac~hbes for use by a c~ty and by other governmental organ~zabons or commercial enterprises, and to finance the same by ~ssuance of its 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~nla w~th an area of 310 square m~les and 38 m~les of shorehne on the Atlanhc 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 C~ty has the largest populabon of any c~ty ~n the Commonwealth of V~rg~n~a Appendix A contains add~bonal financial and demographic information concerning the C~ty The City's audited financial statements for the Fiscal Year ended June 30, 2002, are contained ~n Appendix B 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 e~ther through the C~ty's s~x-year Capital Improvement Program ("ClP") or through tax-increment financing programs The ClP ~s rewsed annually and approved by C~ty Council ~n conJunction w~th ~ts adophon of the City's annual operabng budget. For a more detailed d~scuss~on of the ClP, see the subsection "Capital Improvement Program" ~n Appendix A The ProJects approved ~n the ClP ~nclude the Convenbon Center Replacement, the Virginia Marine Science Museum parking project, the Pavihon Theater Replacement ProJect, the Open Space S~te Acqu~s~bon program and the Th~rty-First Street Parking Garage The ProJects authonzed under tax-increment financing programs are the Town Center Garage Block 10 and the Town Center Garage Block 12 At the t~mes 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 City to undertake these s~gnlflcant projects W~th respect to the Convention Center Replacement, the V~rg~n~a Marine Science Museum parking project, the Pawhon Theater Replacement Project and the Open Space S~te Acqu~s~bon program that were ~nlbally approved ~n the Fiscal 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%, effecbve 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 (effecbve 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 10 With respect to the two Town Center Parking Garage projects and the other pubhc ~nfrastructure facd~bes to be undertaken by the Authority and the C~ty ~n the Town Center of V~rg~ma Beach, the C~ty created the Central Bus~ness District - South tax increment financing d~stnct The tax ~ncrement revenues and other avadable revenues denved 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 facd~bes w~thout resorting to a special service d~stnct tax that also could be lewed ~n a Town Center special service d~strict As of June 30, 2003, $1,764,284 in tax increment revenues have been generated since th~s TIF d~stnct was created W~th respect to the Thirty-First Street Parking Garage project located at the oceanfront ~n the C~ty's resort area, the C~ty wdl charge for parking in the garage Based on the projected use of the facd~ty, ~t ~s anbc~pated that the parking revenues will be sufficient to pay for the operabons 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, Commumcat~ons Infrastructure Replacement and F~re Apparatus Equipment), represenbng less than ten percent of the currently projected total public facihty revenue bond program fundings, wdl receive General Fund support from existing 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 mdhon of these costs through the Authority's ~ssuance of ~ts pubhc facd~ty revenue bonds The Series 2003A Bonds are the first series to be ~ssued under this plan The rema~mng costs of Projects (approximately $83 55 mdhon) wdl come from other funding sources, ~nclud~ng state and federal funding, sale of property, general obhgabon bonds, General Fund appropriabons and various fund balances, pay-as-you-go funding and pnvate contnbubons Prospecbve purchasers of the Series 2003A Bonds should note that the ClP ~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 Council The following sets forth brief descnpt~ons of the Projects to be financed in whole or ~n part with the proceeds of the Series 2003A Bonds Convention Center Replacement - This project prowdes for the replacement and relocation of the ex~sbng pawhon convenbon center on the same site 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 Thirty-First Street Parking Garage - This project is for the construcbon of a 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 esbmated cost of th~s project ~s $23,811,800 Town Center Garage Block 10 - Th~s project ~s for the construcbon of an approximate 840 space parking garage located in the Town Center d~strict 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 construction of an approximate 305 space parking garage located in the Town Center d~stnct of the City Total esbmated cost of th~s 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 secbon "City Indebtedness and Capital Plan" in Appendix A Open Space Site Acquisition - 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 11 V~rginia Marine Science Museum Parking - Th~s project w~ll prowde a 500 space parking lot across the road from the museum and w~ll 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 Operation Center- Th~s project ~s for the design and construction of the new Emergency Commumcabons Center and Emergency Operabon Center, to be located ~n the Municipal Center, on the north s~de of the ~ntersecbon of Princess Anne Road and James Madison Boulevard, across the street from the Public Safety Building Total esbmated cost of th~s project ~s $10,456,000 Revenue Assessment and Collection System - This project provides for a comprehensive, fully ~ntegrated tax system to replace the computer systems currently used to support tax revenue assessment and collection Th~s ~s a joint project of the Commissioner of Revenue, City Treasurer and Real Estate Assessor. Total esbmated cost of this project ~s $5,402,000 Electronic Ballot System - Th~s project is for the purchase of 800 new voter machines to prowde an electromc ballot stabon Total esbmated cost of this project ~s $3,766,565 Pawl/on Theater Replacement - This 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 City/School Human Resource Payroll System - Th~s project replaces the C~ty's ten year old payroll system with a new ~nformabon system utilizing current network infrastructure Total estimated cost of th~s project ~s $3,800,000 Communications Infrastructure Replacement - Th~s project w~ll replace various components of the pubhc safety commumcabons ~nfrastructure related to equipment associated w~th rece~wng, dispatching, transpond~ng and answering pubhc safety calls Total esbmated cost of th~s project ~s $22,225,000. Fire Apparatus Equipment - This 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 this project ~s $15,175,000 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 (~nclud~ng Underwnter's compensation) Total $ INVESTMENT CONSIDERATIONS 12 The following ~s a list of factors that should be considered in connection w~th the purchase of the Ser~es 2003A Bonds Source of Payments The Ser~es 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 principal and ~nterest on the Series 2003A Bonds depends solely on the ab~hty of the 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 appropriated from bme to time by the C~ty Council The obhgabon of the C~ty to make payments under the Support Agreement ~s not a debt of the C~ty w~th~n the meaning 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, ~n the event that funds appropriated and budgeted by the C~ty for the payment of ~ts obhgatlons under the Support Agreement are ~nsufficient to make the required payments thereunder, the C~ty Manager w~ll submit a request, w~th~n 15 days after the beginning of the Fiscal Year, for a supplemental appropnabon to cover the deficit Any payment of principal of and premium, ~f any, and ~nterest on the Ser~es 2003A Bonds are subject to approprlabon 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 r~ght to accelerate the payment of the Series 2003A Bonds by declaring the enbre principal of and ~nterest on the Series 2003A Bonds to be due and payable Similarly, upon an Event of Default under the Support Agreement, the Authority has no r~ght to accelerate the payment of Annual Payments by declaring the Annual Payments to be due and payable Political Risk The current C~ty Council has ewdenced ~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 w~ll retain ~ts current constituency ~n the future, and there can be no guarantee that a future C~ty Council w~ll retain the current C~ty Council's pohcy with respect to the Ser~es 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 is 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 Ser~es 2003A Bonds Any Event of Default or non-appropnabon of amounts due under the Support Agreement w~ll not g~ve the holders of the Ser~es 2003A Bonds, e~ther d~rectly or ~nd~rectly, any r~ght to have the Projects or any other asset of the Authority or the C~ty ubhzed to produce funds to be apphed toward payment of the Series 2003A Bonds, except for funds estabhshed under the Agreement of Trust Limitations on Enforceability of Remedies 13 The realizabon 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 there~n Any attempt by the Trustee or others to enforce such remedies may require judicial acbon, which ~s often subject to d~screbon and delay Under ex~sbng law, certain of the legal and equitable remedies specified ~n the Agreement of Trust or the Support Agreement may not be readily available LITIGATION The City In the op~mon of C~ty management, no libgabon ~s pending against the City which would (1) materially adversely affect the C~ty's financial pos~bon, (2) restrain or enjoin the ~ssuance, sale or dehvery of the Series 2003A Bonds, or the apphcabon of proceeds of the Senes 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 Series 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 City The Authority No htigabon ~s pending against the Authonty or, to the best of the knowledge of the Authority, threatened against the Authonty (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 contesting 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) in any way contesbng the creabon, 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 authonzabon and vahd~ty of the Series 2003A Bonds w~ll be subject to the approwng opimon of Hunton & W~lhams LLP, R~chmond, V~rg~n~a, Bond Counsel, which w~ll be furmshed at the expense of the C~ty upon dehvery of the Series 2003A Bonds, ~n substanbally the form set forth ~n Appendix C (the "Bond Opimon") The Bond Op~n~on w~ll be hm~ted to matters relabng to authonzabon and validity of the Series 2003A Bonds and to the tax-exempt status of ~nterest thereon as described in the secbon "TAX EXEMPTION." Bond Counsel has not been engaged to ~nvesbgate the financial resources of the Authority and the C~ty or their ab~hty to prowde for payment of the Series 2003A Bonds, and the Bond Opimon w~ll make no statement as to such matters or as to the accuracy or completeness of th~s Official Statement or any other ~nformation that may have been rehed on by anyone ~n making the decision to purchase Senes 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, ~nclud~ng accrued original ~ssue d~scount ("OLD"), on the Series 2003A Bonds (1) w~ll not be ~ncluded ~n gross ~ncome for federal ~ncome tax purposes, (2) w~ll not be an ~tem of tax preference for purposes of the Federal alternabve m~n~mum ~ncome tax ~mposed on ~nd~wduals and corporations, however, w~th respect to corporabons (as defined for Federal ~ncome tax purposes) subject to the Federal alternabve m~n~mum tax, such ~nterest ~s taken ~nto 14 account ~n determ~mng adjusted current earmngs for purposes of computing such tax and (3) wdl be exempt from ~ncome taxabon by the Commonwealth of V~rg~n~a Except as d~scussed below regarding OlD, no other op~mon ~s expressed by Bond Counsel regarding the tax consequences of the ownership of or the receipt or accrual of ~nterest on the Series 2003A Bonds Further, no op~mon wdl be expressed by Bond Counsel as to the treatment for Federal income tax purposes of any ~nterest pa~d on the Series 2003A Bonds ~n the event of non-appropnabon or default by the C~ty Bond Counsel's oplmon will be given ~n reliance upon certifications of representabves of the Authority and the C~ty as to facts relevant to both the opinion and the requirements of the Code and ~s subject to the condition that there ~s comphance subsequent to the ~ssuance 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 ~ncome for Federal income tax purposes The Authority 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 Series 2003A Bonds and the bmely payment to the Umted States of any arbitrage rebate amounts w~th respect to the Ser~es 2003A Bonds Fadure by the Authority and the C~ty to comply with such covenants, among other th~ngs, could cause ~nterest, ~nclud~ng accrued OlD, on the Series 2003A Bonds to be ~ncluded ~n gross ~ncome for Federal income tax purposes retroacbvely to their date of ~ssue Original Issue Discount The imbal public offenng prices of Series 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 principal amount and the ~n~bal offering price of the OlD Bonds to the public (excluding bond houses and brokers) at which a substantial amount of such Series 2003A Bonds ~s sold wdl consbtute OlD The offenng prices set forth on the ~ns~de cover of th~s Official Statement for the OlD Bonds are expected to be the ~nibal offenng prices to the pubhc at which a substanbal amount of such Series 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 hav~ng accrued wh~le the Series 2003A Bondholder holds the Series 2003A Bond wdl be added to the Series 2003A Bondholder's basis OlD wdl accrue on a constant y~eld-to- maturity method. The adjusted basis wdl be used to determine taxable gain or loss upon the sale or other d~sposlbon (including redemption or payment at matunty) of an OlD Bond Prospecbve purchasers of OlD Bonds should consult their own tax adwsors as to the calculabon of accrued OlD and the state and local tax consequences of owning or d~sposing of OlD Bonds Premium Series 2003A Bonds purchased, whether upon ~ssuance or otherwise, for an amount (excluding any amount attributable to accrued ~nterest) in excess of their principal amount wdl be treated for federal income tax purposes as having amortizable bond premium A holder's basis in such a Series 2003A Bond must be reduced by the amount of premium which accrues whde such Series 2003A Bond ~s held by the holder No deducbon for such amount wdl be allowed, but ~t generally wdl offset ~nterest on the Series 2003A Bonds whde so held Purchasers of such Senes 2003A Bonds should consult their own tax adwsors as to the calculation, 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 Series 2003A Bonds should be aware that the ownership of tax-exempt obhgabons may result in collateral Federal ~ncome tax consequences to certain taxpayers, ~nclud~ng w~thout hmitation financial ~nsbtubons, property and casualty ~nsurance compames, S corporabons, foreign corporahons 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. Prospecbve purchasers of the Series 2003A Bonds should consult their tax adwsors as to the apphcab~hty and ~mpact of such consequences Prospecbve purchasers of the Series 2003A Bonds should consult their own tax adwsors w~th respect to the status of interest on the Ser~es 2003A Bonds under the tax laws of any state other than Virg~nia FINANCIAL ADVISORS Government Finance Associates, Inc. and ARD Government Finance Group serve as financial adwsors to the C~ty in connection w~th the issuance of the Senes 2003A Bonds The financial adwsors' 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 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 public accounbng firm of KPMG L L.P The City's general purpose financial statements and the ~ndependent auditors' report thereon are presented here~n as Appendix B. These general purpose financial statements, along w~th the related Notes to F~nanc~al Statements, are intended to prowde a broad overview of the financial pos~bon and operabng results of the C~ty's various funds and account groups KPMG L L P w~ll not be rewew~ng any matters ~n connection w~th the ~ssuance of the Series 2003A Bonds The C~ty has engaged the ~ndependent pubhc accounbng firm of Cherry, Bekaert and Holland L L P to prepare the City's financial statement for the fiscal year ended June 30, 2003 RATINGS Fitch Ratings has assigned a rating of .... to the Series 2003A Bonds Moody's Investors Service has assigned a rabng of .... to the Series 2003A Bonds. Standard & Poor's Rabngs Services, a d~vision of The McGraw-Hill Companies, Inc, has assigned a rabng of "AA" to the Series 2003A Bonds Each rabng reflects only the wew of such orgamzabon and any desired explanabon of the s~gnificance of any ratings 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 assumptions of ~ts own The rating ~s not a recommendation to buy, sell or hold the Ser~es 2003A Bonds and should be evaluated ~ndependently There ~s no assurance such rating w~ll conhnue for any g~ven per~od of bme or that such rating w~ll not be rewsed downward or w~thdrawn enbrely by the rabng agency, ~f ~n the judgment of such rabng agency, circumstances so warrant Any such downward revision or w~thdrawal of such rabng may have an adverse effect on the market price of the Series 2003A Bonds SALE AT COMPETITIVE BIDDING The Ser~es 2003A Bonds w~ll be offered for sale at competitive b~dd~ng on September 9, 2003 After the Series 2003A Bonds have been awarded, the C~ty w~ll ~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~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 w~nn~ng bidder, the expected selhng compensabon to such w~nmng b~dder and other ~nformabon on 16 the interest rates and offenng prices or y~elds of the Ser~es 2003A Bonds, all as supplied by the w~nmng b~dder LEGALITY OF THE SERIES 2003A BONDS FOR INVESTMENT The Act prowdes that bonds ~ssued by the Authority under the Act are legal and authorized ~nvestments for banks, sawngs banks, building and loan associabons, ~nsurance compames, fiduciaries, trustees and guardians and for all pubhc funds of the Commonwealth of V~rglnla or other political corporations or subd~wslons of the Commonwealth of V~rgln~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 political subd~ws~on of the Commonwealth of V~rg~n~a for any purpose for which the deposit of bonds or obhgabons of the Commonwealth of Virginia is now or may hereafter be authorized by law CONTINUING DISCLOSU RE Th~s offenng ~s subject to the conbnu~ng d~sclosure requirements of Rule 15c2-12 (the "Rule") promulgated by the Secunties and Exchange Commission (the "SEC") For purposes of the Rule, the C~ty ~s an obhgated person w~th respect to the Ser~es 2003A Bonds The City has agreed to execute a Conbnu~ng D~sclosure Agreement at closing to assist the purchasers of the Series 2003A Bonds ~n complying w~th the prows~ons of Rule by prowding annual financial ~nformation and material event notices required by the Rule The form of the Conbnu~ng D~sclosure Agreement ~s attached hereto as Appendix D As described ~n Appendix D, such undertaking requires the C~ty to prowde only limited ~nformabon at specified bmes and does not require the C~ty to d~sclose all ~nformabon that may affect the value of the Ser~es 2003A Bonds The C~ty may choose to make add~bonal ~nformabon available from bme to bme, but has no obhgation to do so The C~ty has never fa~led to comply ~n all mater~al respects w~th any prewous undertakings w~th regard to the Rule to prowde certain annual financial ~nformabon 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 prowde conbnu~ng d~sclosure, but any failure by the C~ty under ~ts obhgabon w~ll not result ~n an event of default under the Agreement of Trust or the Series 2003A Bonds The City is required to file its annual continuing d~sclosure informabon w~th each nationally recognized municipal securities ~nformation repository ("NRMSIRs") and with any state ~nformabon depository ("SID") created in V~rgln~a No SID has been created for Virginia. The C~ty is required to file any mater~al event not~ce w~th (1) each NRMSIR or the Municipal Secunbes Rulemak~ng Board and (2) any V~rg~n~a SID As of the date of th~s Official Statement, the SEC has recogmzed the following enbbes as NRMSIRs Bloomberg Municipal Repository 100 Park Drive Sk~llman, New Jersey 08558 Telephone (609) 279-3225 Facsimile (609) 279-5962 E-Ma~I Mun~s@Bloomberg corn DPC Data Inc. One Execubve Dr~ve Fort Lee, New Jersey 07024 Telephone (201) 346-0701 Facsimile (201) 947-0107 E-Ma~I nrms~r@dpcdata.com FT Interactive Data Attn NRMSIR 100 Wilham Street New York, New York 10038 Telephone (212) 771-6899 Facsimile (212) 771-7390 (Secondary Market InformatJon) (212) 771-7391 (Pnmary Market Informabon) E-Ma~I' NRMSlR@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~n~a, the C~ty ~s obhgated to make flhngs and prowde nobces to the SID as required by the Rule Investors and other ~nterested parties 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 C~ty Th~s Official Statement has been approved and authorized by the Authority and the C~ty for use ~n connecbon with the sale of the Ser~es 2003A Bonds Its purpose ~s to supply information to prospecbve buyers of the Series 2003A Bonds F~nanc~al and other ~nformabon contained ~n th~s Official Statement have been prepared by the City from ~ts records, except where other sources are noted The informabon speaks as of ~ts date and ~s not ~ntended to indicate future or continuing trends ~n 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 Series 2003A Bonds W~th respect to any statements made ~n th~s Official Statement ~nvolving matters of op~n~on 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 will be realized Any quesbons concerning the contents of th~s Official Statement should be d~rected to the following Department of F~nance, Municipal Center, Virginia Beach, V~rginla 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 Authority makes no representabon as to the accuracy or completeness of any ~nformat~on ~n th~s Official Statement and takes no responsibility for ~ts contents, other than the ~nformabon relating to the Authority in the secbons "THE AUTHORITY" and "LITIGATION -- The Authority." The Authority and the City have each duly authorized the dlstnbubon of this Preliminary Official Statement The City has deemed th~s Prehminary Official Statement final as of ~ts date w~th~n the meamng of the Rule, except for the omission of certain pnc~ng and other ~nformabon 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. Page CERTAIN INFORMATION CONCERNING THE CITY .. 3 Introducbon . . 3 Certa;n Elected Officials ...... 3 School Board ..... 4 Elected Officials ................ 4 Certain C~ty Council Appointees and Adm;n~strative Staff Members . 5 Governmental Services and Fac~l~bes ...... 6 OVERVIEW OF GOVERNMENTAL ORGANIZATION AND SELECTED FUNCTIONS 6 General 6 Funcbonal Departments ... 7 ECONOMIC AND DEMOGRAPHIC FACTORS .............. 11 Populabon ......... 11 Income .......... 11 Housing and Construct;on ....... 13 Employment ............................. 15 Bus~ness and Industry ............... 16 Retail Sales .......... 18 Tourism and Convenbons 18 M~htary .............. 19 Medical Fac~hbes ..... 20 Agr~bus;ness .................. 20 Educabon .. 21 CITY INDEBTEDNESS AND CAPITAL PLAN . .. 23 L;m;tabons on Incurrence of Debt ...... 23 Debt Management Pohc~es 23 Outstanding Debt and Lease Obhgabons 25 Authorized but Umssued Bonds .. 26 Water and Sewer System Debt .... 29 Storm Water Ublity System Debt ........... 29 Agricultural Reserve Program .. 30 Tax Increment F~nanc~ng 30 Assets Acquired and F~nanced Under Capital Leases .31 Other Long-Term Obl~gahons .......... 31 Overlapping Debt . . 32 Short-Term Borrowing .................... 32 Debt History . . 32 Payment Record .......... 32 Comprehensive Plan .... 32 CAPITAL IMPROVEMENT PROGRAM 33 Prior Year CIPs - Actual Capital Project Expenditures 36 FINANCIAL INFORMATION 36 Bas~s of Accounting and Accounbng Structure ..... 36 C~ty of V~rg~n~a Beach Development Authority 36 Hampton Roads Transportabon D~stnct Corniness;on 37 GASB Statement 34 37 Investment Pohc~es and Pract;ces 38 Cert;flcate of Achievement .. 39 Budgetary Process ....... 39 F;scal Year 2003 Operabng Budget Performance 40 F~scal Year 2004 Operabng Budget ...... 40 Fiscal Year 2004 Budget v F~scal Year 2003 Budget ............. 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 A-2 THE CITY OF VIRGINIA BEACH, VIRGINIA CERTAIN INFORMATION CONCERNING THE CITY Introduction The present City of Virgima Beach was formed on January 1, 1963, by the merger of Princess Anne County and the former smaller C~ty of V~rgln~a Beach Th~s merger created one of the largest c~bes ~n the Commonwealth of V~rgima w~th an area of 310 square m~les and 38 m~les of shore-hne on the Atlanbc Ocean and the Chesapeake Bay. The City covers the enbre eastern border of V~rg~nla south of the Delmarva Peninsula and includes 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 city 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~ficatlon 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~rg~n~a Beach ~s an ~ndependent, full-service c~ty with sole local governmental taxing power w~thln ~ts boundaries It derives ~ts govermng authority from a charter granted by the General Assembly of the Commonwealth of Virg~ma The govermng body of the City is the City Council, which formulates pohc~es for the adm~mstrabon 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 poht~cal subdivisions The water and sewage systems are operated on a self-support~ng bas~s The Execubve Offices are located at the Municipal Center, V~rgima Beach, V~rgin~a 23456 (757) 427- 4242 The telephone number for the Finance Department ~s (757) 427-4681 Certain Elected Officials The City operates under the Council-Manager form of government as established by ~ts Charter There ~s an 11-member C~ty Council vested w~th local legislabve powers Each member of the C~ty Council ~s elected on an "at large" bas~s, however, seven seats must be filled by ind~wduals who reside in the seven residence d~stncts of the C~ty The C~ty's Charter was amended ~n 1995 to prowde that the City'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 City Council elects a Vice-Mayor from among ~ts members All members of the City Council are elected for four-year terms The C~ty Manager ~s the adm~n~strabve head of the mumc~pal government and carries out the pohc~es of the C~ty Council The C~ty Manager ~s appointed by the C~ty Council and serves at the pleasure of the C~ty Council The C~ty Council also appoints members to certain boards, commissions, and authorities as ~t deems necessary to the operabon of the City A-3 School Board The School Board ~s made up of 11 members Seven seats must be filled on the School Board by ind~wduals who reside ~n the seven respecbve residence d~stncts of the City 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 ~n 1976 Re- elected ~n 1980 and 1984. F;rst elected Mayor on July 1, 1988, re-elected ~n 1992, 1996 and 2000. Bachelor of Science degree ~n Elementary Educabon from Old Dom;mon University Louis R. Jones, Vice Mayor Owner and operator of Hollomon-Brown Funeral Homes, Inc Elected to City Council in 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 ~n Bus~ness Admin~strabon from The College of W~lham and Mary, Norfolk D~ws~on (now Old Dominion University) 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 American University Associate of Arts and Sciences degree from T~dewater Community College Margaret L. Eure, Councilwoman Co-founder of Eure Rentals, Incorporated and Eure D~stnbubng, Incorporated Council in 1998 for a two-year term due to redistricting Won re-election ~n 2000. Bus~ness College and the American Institute of Banking Elected to C~ty Attended Kees Richard A. Maddox, Councilman Owner and operator of four Dairy Queen stores located ~n V~rglnia Beach Elected to City Council ~n 2002 Attended The College of William and Mary and V~rgin~a Wesleyan College Reba S. McClanan, Councilwoman Civic leader and former school teacher Employed ~n the Virginia Beach Pubhc School System from 1964 to 1968 Elected to C~ty Council ~n 1980 and re-elected ~n 1984 and 1988 Served as Vice 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-election ~n 2000 Bachelor of Science degree from Berea College and Master of Science degree from Virginia Polytechnic Insbtute and State University J. M. Reeve, Councilman Owner and president of Eco-Systems, Inc, an environmental restorabon company Elected to C~ty Council ~n 2002 Bachelor of Science degree ~n Industrial Eng~neenng from V~rg~nia Polytechmc Insbtute and State Umvers~ty and a Masters ~n Bus~ness Adm~nistrabon from The College of W~lliam and Mary A-4 Peter W. Schmidt, Councilman President of Southern Aggregates, LLC, a distributor of lightweight aggregate to the construcbon industry Elected to C~ty Councd in 2002. Bachelor of Arts degree ~n Foreign Language and a Masters degree ~n Bus~ness Adm~nistrabon from the Umvers~ty of V~rgima Ronald John "Ron" A. Villanueva, Councilman Executive V~ce President and partner of Venture Dynamics Corporabon, a d~verslfled manne ~ndustnal firm Elected to C~ty Councd ~n 2002. Bachelor of Arts degree ~n Pohtical 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 Councd ~n 2000 Bachelor of Science degree ~n Education from Old Dominion Umvers~ty. James L. Wood, Councilman Vice President of J D & W, Inc, a commercial general contracting firm Elected to City Councd 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 planning, orgamz~ng, direcbng, and coordinating 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 City Operating 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 City Councd, 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 C~ty in all matters affecbng ~ts ~nterest It ~s the respons~bd~ty 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 quahfy~ng semor c~bzens and d~sabled persons The C~ty Clerk's Office ~s responsible for recording and maintaining all leg~slabve documents and actions 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, 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 City of Elgin, Ilhno;s (1970 to 1976) Master of Pubhc Admlmstrabon degree, Umvers~ty of Colorado, Boulder, Master of Urban Planning degree, Umverslty 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 Business Adm~mstrabon from Umvers~ty of R~chmond, V~rgima (1971), Master of Bus~ness Adm~mstrabon degree from College of Wdliam & Mary (1972), and Juns Doctor degree from T C Wdhams School of Law, Umvers~ty of R~chmond, V~rg~ma (1978) Ruth Hodges Smith, City Clerk since January 1, 1979 Certified Mumclpal Clerk, Bachelor of Arts degree ~n Admimstrabon from Potomac State College of West Virgima University 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 City Manager from 1983 to 1991 for A~ken, South Carohna Recently a management consultant spec~ahz;ng ;n innovabons and improvements in local government Bachelor of Arts degree ~n Pohbcal Sc;ence from the College of Charleston, South Carohna (1977), and a Masters of Public Admlmstrabon degree from the Umvers~ty 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 ~n Business Adm~mstration, Magna Cum Laude, Old Dom~mon Umvers~ty Master ~n Bus~ness Adm~mstrat~on degree, Old Dom~mon University Certified Pubhc Accountant s~nce 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 disposal 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, which receive parbal funding from the Commonwealth of V~rg~ma, ~nclude pubhc education ~n grades k~ndergarten through twelfth, and certain techmcal and special educabon, mental health assistance, health and social services, agricultural services, and judicial acbwbes The C~ty's ma~n mumc~pal complex ~ncludes e~ght general adm~mstrative buddings, a school adm~mstrabon building, a pubhc safety budding, a c~ty jad and a judicial complex In close proximity are a C~ty garage complex, a highway maintenance facd~ty, a public ublibes operabonal maintenance facd~ty, a waste management facd~ty and a farmer's produce market There are four pohce 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 City Some of the other major facd~bes prowded by the City include a convention center, the Virginia 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 approxfmately 40 entertainment events a year The C~ty 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~ma A-6 ill! OVERVIEW OF GOVERNMENTAL ORGANIZATION AND SELECTED FUNCTIONS General S~nce 1990, the C~ty's government orgamzational structure has changed ~n response to the challenges of ~ncreased demand for quahty service, ~nfrastructure needs, potenbal reducbons ~n state and federal funding and a slowdown ~n populabon and revenue growth From 1991 to 1995, the C~ty government adm~mstrabon was orgamzed ~nto management teams to assist the C~ty Manager ~n the operations of the C~ty and the dehvery of services to c~bzens A Management Leadership Team ("MLT") also was estabhshed ~n 1991 to assist the C~ty Manager w~th organ~zabonal ~ssue ~dent~ficabon and resoluhon S~nce 1991, the MLT has evolved and ~s now the execubve 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 ahgns the organ~zabon to address C~ty Council's Deshnabon Points and the major components of the V~rg~n~a Beach Quahty Service System (Bus~ness Strategy, Common Management, System Processes, Organizabonal Learning and Development, C~bzen Commumcabon and Interrelabonsh~ps, Member Commun~cabon and Interrelabonships and Indicator System) In 1995, the C~ty expanded th~s team management approach The Virgima 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 vis~on created by City Council It ~s an evolwng system that conbnues 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 with a cross-funcbonal process In 1995, staff work on C~ty Council's Desbnabon Points ~n~bative resulted ~n the creabon of s~x businesses and five commons areas These s~x business areas were adopted by C~ty Council 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, Quality Educabon and L~felong Learmng, Cultural and Recreabonal Opportunities, and Family and Youth Opportun~bes The ownership of these six 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 V~rgin~a Beach municipal organ~zabon as a quahty driven service provider dehvenng cost effecbve services The focus of th~s bus~ness over the next three years ~ncludes Government Efficiencies and Effectiveness, Information Technology Plan, Member Investment, Morale and Retenbon, Organizational Learning and Development, and C~bzen Commun~cabon 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 F~nanclal Resources, Facilities and Land, Human Resources, Informabon Technology and Public Relabons and Markebng Commons Policy Teams ~denbfy ~ssues and long term needs of the organization, prlonbze such needs and make final recommendations to the C~ty Manager and the MLT In January 2001 the Common Pohcy Teams were realigned to form a Common Management Group to better manage the C~ty's common resources for the benefit of the whole organ~zabon In August 1998, a "Strategy to Achieve City Council's V~s~on for the Future" was published and distributed throughout the orgamzabon There are two ma~n focuses of the Strategy the community and the Government Organ~zabon This document further defines the work of the VBQSS and the ws~on for the community In October 2002, C~ty Staff developed a "3-Year Plan" enbtled "From Vision to Reality." In concert w~th ongoing dehvery of programs and services, th~s plan focuses the C~ty's collecbve efforts on C~ty Council's priorities and other strategic issues Th~s plan will 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 American Society of Pubhc Adm~n~strabon at the Transforming Local Government Conference ~n Long Beach, California The City was one of s~x c~bes nationwide selected to present a case study at the conference Th~s nabonal award recogmzes V~rg~n~a Beach's excellence and ~nnovation ~n orgamzatlonal development, strategic planning, quality ~n~bat~ves and process management In April 1999, the C~ty was recognized for ~ts efforts to ~mplement the VBQSS by rece~wng the Medallion Award from the 1998 U S Senate Producbwty and Quahty Award ~n the pubhc sector category for the Commonwealth of Virginia Functional Departments The Department of Agriculture provides educabonal and regulatory services in agriculture, home economics, 4-H, and community resource development The department has three major diws~ons V~rgln~a Tech extension services offers educabonal programs and technical information on agriculture and horbculture The Diwsion of Environmental Services prowdes expert informabon 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 prowslon of farm-related community acbvities The funcbon of the Department of Communications and Information Technology is the processing and electromc storage of ~nformat~on used ~n the da~ly bus~ness of the C~ty The department collects, organizes and disseminates ~nformabon to all C~ty departments, C~ty agencies, and the pubhc school system It also provides 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 wdeo production services and fac~hbes and prowdes ~nformabon to the community on municipal government and the public school system through da~ly cablecasbng of programs on the City's Municipal Cable Access Telews~on Stabon, Channels 47 and 48 The Convention and Visitor Development Department coordinates the advertising and promobon of tourist acbv~bes and ~s responsible for bringing meebngs, conferences, and conventions of large groups to V~rg~n~a Beach The department operates a V~sitor Informabon Center and the large convention center known as the Pawhon Approximately 3 m~lhon tourists and convenboneers ws~ted V~rgm~a Beach ~n calendar year 2001, spending an estimated $647 9 m~lhon and generabng over $53 3 m~lhon ~n tax revenues The Economic Development Department promotes and encourages the economic growth and diversity of the City The department works with the City of Virginia Beach Development Authority to attract bus~ness and ~ndustry 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 City as an outstanding business opportumty The Department of Emergency Medical Services coordinates the pre-hospital emergency care provided by the 10 volunteer Rescue Squads and 3 substations In F~scal Year 2002, ~t answered over 32,000 calls for medical assistance Th~s care ~ncludes rapid, safe response to the scene, proper treatment of the wcbm and prompt transfer to a hospital The department also provides all rescue squad tra~mng and coordinates the use of specialized resources ~ncluding EMS Special Operations, pohce, fire, hospital personnel, d~spatchers and the Nighbngale A~r Ambulance to deal w~th medical emergencies ~n the City Approximately 750 volunteers were acbve w~th the rescue squads in 2002 The Department of Finance oversees the financial affairs of the C~ty and ensures the financial ~ntegnty of City operations Departmental services ~nclude payment of all C~ty b~lls; maintenance of accounbng records; payment of all City employees and admln~strabon of employee benefits, prows~on of ~nsurance and self-insurance, maintenance of the C~ty's fixed assets inventory, procurement of all equipment, materials and services for all c~ty agencies, and coordlnabon 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 ~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 stations In add~bon, 55 avadable volunteer flreflghters w~th proper training from the C~ty's fire training center provide a sigmflcant manpower contnbubon to the flreflght~ng force The Emergency Services Office, whose normal dady operabons are overseen by the F~re Department, ~s responsible for protecbng the hves and property of V~rgm~a Beach c~bzens dunng a major emergency d~saster The Office of the General Registrar ~s responsible for providing an accessible and fair means by which C~ty residents can register and vote Mainta~mng 319,000 records, th~s office makes appropriate 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 provides support funcbons for C~ty departments General Services consists of three major umts Budding Maintenance, Landscape Services and Internal Service Support for Automobve Services, Records Management and Mad D~stribubon The Department of Housing and Neighborhood Preservation designs programs involving capital ~mprovements, new construction, and rehabd~tabon to rewtahze areas The department adm~msters the State program, which subsidizes rent up to 70 percent for quahfied tenants and the Urban Preservabon and Infill Program, which prowdes permanent mortgage financing to quahfied persons ~n specified areas In add~bon, the Zomng Enforcement Umt ~nterprets and ensures comphance w~th the C~ty zomng ordinance and other secbons of the C~ty Code related to land use The Department of Human Resources is 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 in apphcant counsehng, recruitment, tesbng, volunteer referrals, pohcy ~nterpretabons, fringe benefits, gnevance procedures, disciphnary acbon, career counsehng, professional development, compensation, employee safety, and occupational health services The Juvenile Probation Office prowdes support services to the Juvenile and Domesbc Relabons D~stnct Court The office prowdes probabon supervision, retake services, and parole services for juvemles It prowdes court support by processing pebbons and prepanng social background ~nvesbgabons The Department of Management Services develops and oversees the C~ty Operabng Budget and Capital Improvement Program. The department provides assistance and direction to C~ty departments for any amendments to the above programs The department reviews and recommends alternabve budget formats, prowdes multi-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 carries out its m~ss~on of strengthemng the health and prosperity of the commumty by planmng, developing, ~mplemenbng, managing and evaluating a system of mental health, mental retardabon and substance abuse programs, services and facd~ties w~th~n the pohc~es of the V~rg~ma Beach Community Services Board The Department and the Board work to develop a system of preventabve, developmental, therapeubc, and tra~mng services to meet the mental health needs of V~rg~ma Beach c~bzens Th~s is accomphshed through program coordination w~th the Eastern State Hospital, Southeastern V~rg~n~a Tra~mng Center for the Mentally Retarded, the private sector, and general commumty The Department of Museums and Cultural Arts operates the V~rg~ma Manne Science Museum, the Franc~s Land House and the Adam Thoroughgood House The department coordinates projects and ~nlbabves for the preservabon of the C~ty's historic resources, administers the Virginia Beach H~stoncal Register and prowdes support services to the V~rg~n~a Beach Arts and Humambes Commission The V~rg~ma Manne Science Museum first opened ~n 1986 and was expanded to three braes ~ts original s~ze in 1996 Th~s newly renovated 120,000 square foot facd~ty has doubled ~ts annual attendance to A-8 approximately 600,000 ws~tors and takes wsitors on a journey of water through V~rg~nia's marine 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~stor~cally accurate material reflecting hfe ~n e~ghteenth century Princess Anne County The house ~s also used for official C~ty recepbons Approximately 20,000 ws~tors tour the house each year The Adam Thoroughgood House prowdes tours and programs related to the ~n~bal Enghsh settlement area and 19th century hfe Approximately 10,000 visitors attend the tours and programs each year The department also oversees three other properties, the DeW~tt Cottage (Atlanbc 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 organ~zabons The Virginia Beach Arts and Humanities Commission serves ~n an adwsory capacity to C~ty Council on matters relabng to cultural actiwbes The Commission administers pubhc funds to arts orgamzations and momtors grants to assure fiscal responsibility The Department of Parks and Recreation prowdes a w~de range of h~gh quality, year-round leisure programs that are responsive to the physical, mental, recreational and cultural needs of the c~bzens of V~rg~n~a 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~v~s~on, generated over $8 8 m~lhon ~n fees and charges The Golf Course Enterprise Fund generated approximately $2 4 m~lhon in revenue ~n F~scal Year 2002 The Parks Division, ~n conjunction w~th the Department's Design and Development D~v~sion, 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~strict parks and 6 are classified as community parks The Recreabon D~wslon has respons~b~hbes ~n the following areas prowd~ng recreabon and leisure services to adults, senior c~bzens and youths, organizing well-rounded athlebc programs for persons from ten years of age and older, prowd~ng all disabled c~bzens the opportunity to receive the benefits of recreabon and leisure ~n the least restrlcbve enwronment, operabng s~x recreabon centers located throughout the City, 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 City of Norfolk, the Golf Course D~wslon manages four golf courses The Department of Planning and Community Development prowdes pohcy and operabonal planmng support in the areas of transportabon, land use, zoning, and environmental protecbon and management The department ~s responsible for ma~nta~mng a long-range Comprehensive Plan which prowdes guidance for the physical development of the C~ty The department rewews subdivision plans, s~te plans, and land management plans and prepares the monthly Planning Commission Agenda Its d~vls~on of Development Services prowdes customer-oriented management of plan review, ubhty, right-of- way, moving and hauhng permit ~ssuance and surety admm~strabon The d~ws~on of Enwronmental 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 enwronmental ~ssues The department through ~ts Permits and Inspecbons D~ws~on ensures comphance w~th C~ty and/or state building code standards w~th the ~nspectton of all construction ~n the C~ty The Police Department ~s composed of four major units Adm~mstration, Support, Operabons and Invest~gabve D~ws~ons The department operates through four precincts located throughout the City V~rg~ma Beach's crime rate for 2002 was 37 5 crimes per 1,000 populabon, the lowest crime rate in more that 20 years Furthermore, ~n 2001, according to a Federal Bureau of Invest~gabon report, V~rg~n~a Beach's wolent 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 populabons of 200,000 or more V~rg~n~a Beach conbnues to be rated as one of the safest commun~bes of its s~ze ~n the country A-9 The Department of Public Health ~s responsible for promobng the best possible state of health for all V~rg~n~a Beach c~bzens The department assumes primary responsibihbes for providing protective, curabve, and environmental health services when not otherwise prowded by the private sector The Pubhc Health Department offers services and chmcs ~n the areas of pediatrics, denbstry, family planning, ~mmumzat~ons, home nursing, maternity, chest x-rays, venereal d~sease, health educabon, and environmental health. The Department of Public Libraries manages s~x area hbrar~es 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 c~bzens ~ncluding a subregional hbrary for the bhnd and hand~capped The department's other support services include a municipal reference hbrary and a law hbrary During October 2000, the C~ty completed the expansion of the Pungo/Blackwater Library In 2001, the new South Rosemont Youth Library 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 Public Utilities provides water and samtary sewer service to C~ty residents Its respons~b~hbes ~nclude the ~nstallabon and maintenance of more than 2,914 m~les of water and sanitary sewer hnes and the operabon and maintenance of 386 sanitary sewer pumping stabons, ten water pumping stabons (including Lake Gaston), 13 water storage fac~hbes w~th 30 25 m~lhon gallons of water capacity and 7,441 fire hydrants The department coordinates the engineering and adm~mstrabon for development of raw water supplies for the C~ty and oversees the City's water conservation programs The Department of Public Works oversees the design and construction of new C~ty structures and transportabon systems, maintains a large portion of the C~ty's ~nfrastructure (e g, roadways, bridges, storm water systems, beaches and traffic control dewces), and prowdes for collecbon, recychng and d~sposal of sohd waste. The admm~strabon of the storm water management ubhty ~s also ~ncluded as a respons~b~hty of the department The Department of Social Services prowdes opportun~bes for c~tizens ~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 children and foster care To assist adults, the department has programs ~n employment services, care for the elderly and emergency needs services In add~bon, ~t operates the Pendleton Child Service Center, a commumty treatment agency serving children of V~rgln~a Beach and Chesapeake, ages 12 and under, who are exh~b~bng senous anbsoclal and maladapbve 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 Aprd 2000 census conducted by the U S Census Bureau, the populabon of the C~ty of V~rg~n~a Beach was 425,257 Th~s census confirmed Virg~ma Beach as the most populous c~ty ~n the Commonwealth of V~rg~n~a and the 34th largest c~ty in the Umted 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 Change 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 421,517 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 City Department of Planmng Weldon Cooper Center for Pubhc Service, Umvers~ty of Vlrglma, U S Census Bureau and U S Department of Commerce, Bureau of Economic Analyms FIVE MOST POPULOUS CITIES IN VIRGINIA City 1990 Population 2000 Population Virg~ma Beach 393,069 425,257 Norfolk 261,229 234,403 R~ch mond 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 income ~s total personal income d~vided by the area's res~denbal populabon Total personal ~ncome ~s a measurement of the area's total ~ncome from all sources. Effective 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 of Virg~ma 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 Analysis Most recent information available A-11 TOTAL PERSONAL INCOME (in $ Millions) 1980 1990 1997 1998 1999 2000 2001 V~rgima 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 ~nformat~on available The following table shows median household effecbve buying ~ncome for the City, the Hampton Roads MSA, the Commonwealth of V~rg~n~a and the United States for the last ten calendar years, followed by comparabve tables showing V~rginia 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 1994 1995 1996 1997 1998 1999 2000 2001 2002 $4O 838 42 944 36 982 38 453 39 654 40 509 41 994 43 911 43.311 unavailable $35,125 $37,838 36,836 39,463 30,966 34,136 31,953 35,405 32,194 36,802 33,509 37,740 34,942 39,709 36,248 41,810 36,207 41,095 $35 058 37.070 32 238 33 482 34 618 35.377 37 233 39 129 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 1994 1995 1996 1997 1998 1999 2000 2001 2002 116 49% 100 20% 107 94% 115 85 99 37 106 46 114 72 96 05 105 89 114 85 95 43 105 74 114 55 95 08 106 31 114 51 94 72 106 68 112 79 93 85 106 65 112 22 92 64 106 85 112 89 94 38 107 12 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 unavailable source Sales & Markebng 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 m~htary housing S~ngle-fam~ly un~ts represented 59 percent of this total The d~stnbut~on of all dwelhng un~ts ~s as follows DWELLING UNITS BY TYPE (Estimated as of January 1, 2002) Units Percent Single Family 96,269 59% Duplex 4,538 3 Town house 20,185 12 Multi-Family 4.3,010 26 Total 164,002 100% Note Does not ~nclude M~htary Combined Umts Source C~ty Department of Planmng A-13 In calendar year 2002, the C~ty issued 43,900 permits valued at $774 milhon 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(1) Calendar Year Residential(2) Commercial Industrial Other Total Value 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 (through June) I 722 I 379 I 515 I 409 I 276 I ,553 I ,305 I 753 2 218 2 522 975 826 4 16,605 $282,255,459 740 9 16,257 279,298,570 813 21 16,499 336,173,287 1,011 25 18,750 342,592,049 1,050 33 18,701 367,585,973 1,111 32 19,597 466,077,774 1,100 32 16,737 455,353,722 1,024 23 14,934 530,576,046 1,096 7 14,858 667,406,046 982 2 16,277 699,990,772 463 2 8,472 368,885,784 (~) Represents building and mechamcal permits only Does not ~nclude electncal, plumbing, gas and other types of permits (2) One res~denbal building permit does not necessarily equal one res~denbal umt, ~n many ~nstances one permit ~s for multiple residential umts Source C~ty Department of Permits and Inspections The following table presents annual construction ~nformabon for the City, ~nclud~ng the number and assessed value of res~denbal and commercial umts 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 Value 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 Inspections 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 Average Number of Average Emp. Quarterly Weekly Wages Industry Group Establishments For Cluarter Gross Wages Per Employee Pnvate Agnculture, Forestry, F~sh~ng and M~mng 19 88 $ 404,011 $ 353 Construction 1361 11,797 107,103,201 698 Manufactunng 224 5,597 46,770,968 670 Transportation, Commumcat~ons and 201 2,349 17,437,764 571 Utlhbes Wholesale and Retail Trade 1,970 31,069 185,358,575 459 F~nanc~al, Insurance and Real Estate 1,150 11,801 122,101,003 796 I nformabon 155 4,423 41,552,189 723 Services 4,918 75,566 507,202,907 513 Total Private(~) 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; 103 ~ $1.249.360.79~4 $ 568 (~)lmmatenal amounts have been suppressed ~n certain ~ndustry sub-categories, whmh are ~ncluded ~n the total amounts Source V~rg~ma Employment Commission, Economm Information Services D~ws~on, based upon most current and available ~nformat~on The following table is a breakdown of employment by sector ~n 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 Construction Transportation, Communication and Ubht~es Information Manufacturing 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 Information A-15 As ~llustrated in the table below, the unemployment rate for the City has, for the most part, been consistently lower than the rates for the Metropohtan Stabsbcal 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) Vlrgln,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 VIrginia 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~t~es of Chesapeake, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, V~rglma Beach and W~lhamsburg and the Counbes of Gloucester, Isle of W~ght, James C~ty, Mathews and York Also ~ncludes Cumtuck County, North Carohna 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, ~ndustnal and commercial property - A~rport Industrial Park, Greenw~chAN~tchduck Corridor, Central Business District/Pembroke area, Oceana West Corporate Park/Lynnhaven Corridor, and Corporate Landing Bus~ness Park A~rport Industrial Park Industrial and office space operabons are located here The park encompasses 250 acres w~th 4 milhon square feet of hght National and internabonal manufactunng, warehousing and d~stnbubon Greenw~ch/Witchduck Corridor. The Greenw~ch/W~tchduck corridor currently contains 1 3 mllhon square feet of Iow and m~d-nse suburban office space ~n business parks including Interstate Corporate Center, Corporate Woods and Commerce Park that house corporate headquarters and business operabons of many types The Corridor currently contains 1 8 mllhon square feet of hght ~ndustrial space and fac~hbes housing regional warehousing and d~stnbubon operabons Central Bus~ness D~stnct/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 Vlrgima Beach ~s a new urban "Ma~n Street" style development located within 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 ~ncludes a 176- room H~lton Garden Hotel and a regional bank Phase II, which ~ncludes additional retail and entertainment space, broke ground ~n spnng 2003 The project w~ll eventually span 25 acres and 850,000 square feet of Class A office space, 750,000 square feet of upscale retail, fine d~mng, a luxury hotel and apartments and free structured parking The corporate c~bzens ~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 million square feet of hght ~ndustnal space 195 acres are presently available for development Corporate clbzens ~n Oceana West and adjacent bus~ness parks ~nclud~ng Reflecbons, Sabre, Lynnhaven Industrial Area, A-16 Oceana East and Taylor Farms Industrial Park, comprise a wide variety of domestic and foreign firms, including corporate headquarters and manufacturing, warehousing and d~stnbubon operations Corporate Landing Bus~ness Park The park encompasses over 325 acres and is owned and operated by the C~ty of V~rglnia Beach Development Authority 125 acres are presently available for headquarters, professional serwces, 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 opportumt~es Throughout Virginia Beach there are many add~bonal smaller nodes of office and commercial activity ~nclud~ng L~ttle Neck, Oceanfront, B~rdneck/Laskin Road, F~rst Colomal and Kempsvdle. CITY OF VIRGINIA BEACH MAJOR PRIVATE EMPLOYERS Number of Firm Type of Business Employees Lynnhaven Mall Ldhan Vernon Corp Pembroke Mall Sentara V~rg~nia Beach General Hospital GEICO Stihl, Incorporated Cox Commumcabons Aws Cendant The V~rg~man-Pdot AMERIGROUP Corp Chrisban Broadcasbng Network Sentara Health Management Household Recovery Services U S. Postal Service Abacus Communlcabons, LP Umted Parcel Service Sentara Hospital Bays~de M&G Electromcs Corporabon Navy Exchange Service Command (NEXCOM) Ver~zon AmSec LLC Southland Technologies AIItel Commumcations Nabonal Leisure Group/The Vacabon Store Retad Trade 3,500 Catalog D~stnbubon Center 1,700 Retad Trade 1,700 Medical Services 1,51 5 Insurance Manufacturer of Portable Outdoor Power Equipment Cable Television and Commumcabons Cendant Processing Center Pnnt Med~a HMO Prowder of Medicaid M~mstry Educabon & Commumcabons Medical Services F~nanc~al Recovery Services Postal Delivery Telecommumcabons Sales and Installabon Small Parcel Shipper Medical Services Manufacturer of Winng Harness Sets Corporate Headquarters for Navy Exchange System Telecommumcabons Eng~neenng and Computer Services Gaskets for Auto Industry Commumcat~ons Travel Services 1,500 1,30O 1,200 933 977 9OO 85O 6OO 575 55O 540 54O 506 5OO 5OO 5OO 5OO 49O 48O 45O Source Department of Economic Development, Apnl 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 Sections 58-441 6 of the Virginia Retail Sales and Use Tax Act are sales of alcoholic beverages in government stores, sales of certain motor vehicles, tra~lers and semitrailers, mobile homes, and travel tra~lers, and sales of certain motor vehicle fuels. Also, the figures do not ~nclude non-taxable sales on m~htary 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 Taxation Tourism and Conventions In calendar year 2002, more than 3 m~lhon out-of-town ws~tors arrived ~n the C~ty These ws~tors spent approximately $698 1 m~ll~on, an increase of 7 7 percent over 2001, dunng their stay for accommodabons, meals, entertainment and other services and d~rectly created about 11,000 jobs ~n the C~ty and an addibonal 5,400 jobs ~n the Hampton Roads region V~s~tor expenditures generated $61 8 m~lhon ~n d~rect C~ty revenue, a 15 5 percent ~ncrease over 2001 Hotel occupancy rose to 62 4 percent for 2002, an ~ncrease of nearly 5 percent over 2001 Esbmates for 2002 shows 201,549 convenbon and trade show delegates attended 515 meetings ~n the Convention Center and at the C~ty's more than two dozen convenbon hotels, producing $66 9 m~lhon ~n esbmated gross revenue Of th~s amount, an estimated $4 7 m~llion went d~rectly to the C~ty 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 resulbng in 72,800 room n~ghts and approximately $20 mllhon in d~rect spending. The C~ty Council has approved funding for a new convenbon center The $197.25 million 505,000 square foot facihty w~ll include the following 142,000 square foot Exh~b~bon Hall, 31,000 square foot ballroom, 29,000 square feet of meebng space and 2,100 parking spaces. Th~s ~s three t~mes the s~ze of the current convention center The new convenbon center facility w~ll be located on the same site as the C~ty's ex~sbng fac~hty The construcbon will be phased ~n to enable the ex~sbng convenbon center to remain open at all times It ~s esbmated that the first phase of the fac~hty could open m 2005 and w~ll include 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 porhon of the Exhibition Hall and meeting space The second phase ~s esbmated to open ~n early 2007 after the opemng of the ~n~bal phase A-18 The C~ty and the City of V~rg~nla Beach Development Authority have entered ~nto a pubhc/pr~vate investment 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 public parking garage is expected to contain approximately 1,000 spaces, and it is anhc~pated that the parking fac~hty will be financed with lease revenue bonds Tourism and convention actiwty 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(4) 2003 52,062,671(unaudited) The meal tax was ~ncreased from four and one-half to five and one-half percent, effective July 1,2001, and the hotel room tax was ~ncreased from five and one-half percent to e~ght percent, effective November 1,2001 Source C~ty D~rector of F~nance Military Four mJhtary bases ~n V~rg~n~a 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 writing, m~htary operations have been qu~te successful, which may ~nd~cate that no add~bonal 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 in 2003 w~ll 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 is approximately 11,000 below the level experienced during the first Gulf War Further, prospects remain bright over a shghtly longer brae horizon M~htary personnel are scheduled to receive a healthy pay ~ncrease for this year Defense spending ~s also projected to increase 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 Umted States, which means local m~htary downs~z~ng ~s unhkely Oceana Naval Air Stat/on 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 stabon ~n the Un~ted States with the F-14 Tomcat A total of 20 str~ke/flghter squadrons w~th 310 a~rcraft 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 station's annual payroll ~s over $600 m~lhon 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 Umted States Atlanbc Fleet Little Creek has an annual payroll of $232 mdhon for approximately 7,700 md~tary personnel and 5,200 clvdian employees Fort Story Fort Story ~s an Army base established as a coast artdlery post in 1917 Fort Story is the Army's Logistics-Over-The-Shore (LOTS) and ~s the Army's only salt water purification tra~mng s~te Fort Story is also ubhzed by Navy and Marine tenants and as a periodic training s~te for acbve and reserve Army, Navy, Manne, and A~r Force umts and ROTC detachments Fort Story has an annual payroll of approximately $70 2 mllhon for 1,500 m~htary and c~whan employees Dam Neck Fleet Combat Tra~mng Center, Atlantic, Dam Neck's primary m~ss~on ~s to prowde training in the operabon and employment of combat d~recbon and control systems The average base population ~s 5,000 persons and the total mditary and c~whan payroll ~s approximately $224 mdhon Source Pubhc Affairs Officers at each Md~tary Base Medical Facilities In 2002, there are two major hospitals ~n the City with a combined total of 432 beds In addibon, 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 commumty was $51 8 mdhon, based on products valued at $16 2 mdhon There are 147 farms in the C~ty w~th approximately 32,980 acres of land under culbvat~on Agricultural ~ncome ~n V~rg~nia Beach was down dunng 2002 because of adverse weather cond~bons and Iow crop prices. V~rg~n~a Beach has a horse population of approximately 2,300 animals valued at $23 7 milhon, ranking V~rgm~a Beach 10th ~n the state for total value of horses A-20 Education Available within the C~ty is a w~de variety of educational faclhbes and programs, ~nclud~ng public elementary, junior and senior h~gh schools, private and parochial schools, and e~ght h~gher educabonal fac~ht~es In terms of pubhc enrollment, the City's pubhc school system ~s the largest city school system ~n the Commonwealth of Virginia PUBLIC EDUCATION FACILITIES/PROGRAMS June 30, 2002 (4) Located in Pnncess Anne H~gh School (2) Located ~n Ocean Lakes H~gh School 54 Elementary Schools 13 M~ddle Schools 11 Sen~or H~gh Schools 1 Techmcal and Career Education Center 1 Centerfor Effecbve Learning 1 V~rg~n~a Beach Central Academy 1 Center for the Gifted 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(:') Source Bus~ness Services Office, V~rg~ma Beach Pubhc Schools Public Schools. The City's public school March 31 average da~ly membership totaled 75,436 for the 2002-2003 school year, a slight decrease of 0 11 percent over the previous year Summarized below are the March 31 average daily 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 Chancre 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 48 805 71 949 19 773 (23) 065 (92) 518 (72) 436 (11) Source Bus~ness Services Office, V~rg~ma Beach Pubhc Schools Private and Parochial Schools. There are 14 private 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 Virginia Beach H~gher Education Center (a partnership of Old Dominion and Norfolk State Umvers~bes), V~rg~n~a Wesleyan College, T~dewater Community College, and Regent University V~rg~ma Beach ~s home to branch campuses of George Washington Umvers~ty, the Umvers~ty of V~rg~n~a, V~rgmia Polytechnic Insbtute 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~v~slon of the Virginia Community College System The V~rginla Beach campus has an enrollment of approximately 10,000 Th~s two-year college offers general, occupabonal-technical, and university parallel-college transfer education, represenbng the largest post-secondary ~nsbtubon ~n the region T~dewater Community College is a resource for bus~ness and ~ndustry to gain techmcal employees, as well as expertise for tra~mng and retraining programs for current employees V~rg~n~a Wesleyan College ~s a four-year hberal arts private college located on the Virginia Beach/Norfolk boundary hne It has an enrollment of approximately 1,400 students Regent Umverslty has an enrollment of approximately 2,500 w~th graduate schools of Business Administration, Education, Law, Pubhc Pohcy, D~vinlty, Psychology and Counsehng, the College of Commun~cahons and The Center for Leadership Studies The V~rg~n~a Beach H~gher Educabon 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 fac~ht~es opened ~n the fall of 1999 and has an enrollment of approximately 2,400 students w~th a capacity of 5,000 Debubng in the fall of 2002, the Advanced Technology Center ~s a joint venture between Tidewater Commumty College, the Virginia Beach Public Schools and the C~ty to provide technical tra~mng for h~gh school and college students pursuing pos~bons in fields such as telecommun~cabons, copier technology and computer programming and repair In addlbon, the Center provides space for exisbng and new businesses to enhance the sk~lls of their employees The Center has a state-of-the-art theater for conferences, meetings and tralmng sessions The $23 m~lhon center ~s the first of ~ts k~nd ~n the Commonwealth and received state funding of $10 m~lhon with 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~rgin~a (the "Constltubon") and the Pubhc Finance Act of 1991, Chapter 26, T~tle 15 2, Code of V~rg~nla of 1950, as amended, a city ~n V~rg~n~a ~s authorized to issue bonds and notes secured by a pledge of its full faith and credit and unlimited taxing power The Consbtut~on and the Pubhc F~nance Act of 1991 also hm~t the ~ndebtedness which may be ~ncurred by c~bes to 10 percent of the assessed valuabon of real estate subject to local taxabon There ~s no requirement ~n the Consbtubon or the Code of Virginia that the ~ssuance of general obllgabon 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 obhgations subject to debt hmltabons as of June 30, 2003, totaled $584,630,485 and represented 21 8 percent of th~s hm~t The City Charter further hmits the C~ty's power to create debt. It provides that no bonds or notes (other than refunding bonds, revenue anbc~pat~on notes, revenue bonds, and other obligations excluded from the C~ty's debt hm~t under Secbon 10(a) of Article VII of the Constltubon) shall be issued unbl their ~ssuance has been authorized by a majority of the quahfied voters of the City voting ~n an election on the question The C~ty Charter further provides, however, that the City Council may authorize bonds or notes w~thout an elecbon in any calendar year ~n such amounts as shall not increase the total ~ndebtedness of the C~ty, as determined in the manner set forth ~n Sechon 10(a) of Article VII of the Const~tubon, by more than $10,000,000 above the amount of such indebtedness at the beginning of such calendar year For purposes of computing the annual hm~tabon on the amount of bonds or other obligations that may be issued without an elecbon, authorized and unissued bonds or other obhgat~ons which could have been issued w~thout an elecbon on December 31 ~n the year they were authorized may be ~ssued in a subsequent year w~thout affecbng the annual hm~tabon for such subsequent year In add~bon, refunding bonds will not be ~ncluded for purposes of determining the amount of bonds or other obhgabons that may be ~ssued w~thout an elecbon in any calendar year Contractual obhgahons of the City other than bonds and notes are not included w~th the annual hmitabons descnbed 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 planning The pohcies reiterate the C~ty's commitment to pnnc~ples such as rap~d principal 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 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 relabonsh~p between the C~ty's debt and the taxable value of property ~n the C~ty It ~s an ~mportant ~ndicator of the C~ty's ability to repay its tax-supported debt, s~nce property taxes are a major revenue source A small rabo ind~cates that the City will be better able to w~thstand economic downturns It ~s the C~ty's pohcy goal that the computed value of this rabo should not exceed 3 5 percent of esbmated full market value Overall Net Debt Per Capita. This ratio ind~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 lighter burden It ~s the C~ty's pohcy goal that the computed value of this ratio should not exceed $1,500 per capita In the approved Fiscal Year 2002-2007 Capital Improvement Program ("ClP"), C~ty Council has authorized add~bonal debt for four new projects that will ~mpact the current net debt per capita rabo whereby ~t will exceed the $1,500 in future years However, all other key debt rabos will remain below their threshold level A-23 The four projects are a new convenbon center, a new theater, additional parking at the Virginia Manne Science Museum, and an open space ~n~tlat~ve These add~bonal projects w~ll negabvely impact, ~n the short-term, the net debt per capita rabo Based on the present schedule of actiwbes, the C~ty w~ll exceed the net debt per capita ratio of $1,500 beglnmng in F~scal Year 2004 At ~ts peak ~n F~scal Year 2007, the debt per capita ratio is estimated to approach $2,100 net debt per capita due to the inclus~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~th~n the current pohcy hm~t C~ty Council has prowded the resources needed to support these projects through increased taxes Wh~le much w~ll h~nge on the success of the convenbon center and ~ts ab~hty to generate add~bonal revenue, ~t ~s felt that the add~bonal level of debt can be adequately supported despite the City exceeding ~ts net debt per capita rabo Ratio Of Debt Per Capita To Per Capita Personal Income. Th~s rabo ~s a measure of the capacity of c~tizens to finance tax-supported debt. A Iow ratio means that taxes required to repay debt represent a smaller porbon of the average c~bzen's income It ~s the C~ty's policy goal that debt per capita should not exceed 6 5 percent of per capita income Ratio Of Annual Debt Service To General Government Expenditures. Th~s ratio measures the C~ty's ability to repay debt w~thout hampenng other C~ty services A small rabo ~nd~cates a lesser burden on the C~ty's operabng budget Th;s computabon as a policy 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~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 Ratio to Esbmated-Full Value(3) 2 6% 2 6% 2 5% 2 5% 2 5% 3 1% Rabo of Per Capita Debt to Per Capita Income(4) 4 30% 4 30% 4 07% N/A N/A N/A Ratio of Annual Debt Servme to General Government Expenditures 8 7% 7 9% 7 9% 7 7% 7 7%(s) 7 7(s) (1) Includes bonded debt and other long term obhgabons charged to the General Fund and V~rg~n~a Manne Science Museum Enterpnse Fund Does not include debt charged to the Water and Sewer or Storm Water Enterprise Funds (2) Population estimates as of each January 1st by C~ty Planmng Department, except for 2000, which ~s by the U S Department of the Census, and FY 2001, 2002 and 2003, which are estimated (3) 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 (s) 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 Informat;on on the City's ~ndebtedness ;s presented ~n the follow;ng tables Included ~s ~nformabon on net and overlapping tax-supported debt, rapidity of principal retirement, selected debt service schedules, and information on capital lease obligations OVERALL NET DEBT AND OTHER LONG TERM OBLIGATIONS As of June 30, 2003 General Obligabon Bonds(t) Water and Sewer Revenue Bonds(2) Storm Water Revenue Bonds(3) Capital Leases/COPs(4) Agriculture Reserve Program Installment Purchase Agreements(5) V~rg~ma Beach Development Authority Long-Term Obhgabons(6) $564,167,398 115,173,408 9,475,O0O 21,054,177 20,463,087 31,935,000 $762,268,070 Plus Less 2003A Pubhc Facility Revenue Bonds Water and Sewer Revenue Bonds(2) General Obhgabon Bonds for Water and Sewer Purposes(?) General Obhgabon Bonds for Storm Water Purposes(s) 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 (4) Includes $4,945,000 general obligation debt for water and sewer purposes and $4,936,635 general obhgabon 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 C~ty's full faith and credit and unhmlted taxing power These bonds are secured solely by the net revenues of the storm water utd~ty system (4) A full descnpbon of the Capital Leases and Cerbficates of Partm~pat~on can be found in the subsection "Assets Acquired and F~nanced Under Capital Leases" here~n Payments on Cerbficates of Parbclpat~on are subject to annual appropriation by C~ty Councd Th~s amount also ~ncludes the one rema~mng year of debt servme on an unsecured 25"~ Street property loan A descnpt~on of th~s loan ~s ~ncluded under the "Other Long-Term Obhgat~ons" section here~n (5) Represents ~nstallment purchase agreements which are general obhgat~ons of the C~ty Interest and pnnclpal payments are pa~d from a dedicated portion of real estate taxes Pnnclpal payments will be made from matunng zero coupon Treasury secuntles purchased from the dedicated port~on of real estate taxes These obhgabons are descnbed ~n the section "Agncultural Program" herein (6} Represents other long term obhgatlons of the Cmty which do not meet the bonded debt or capital lease criteria The City's payment obhgat~ons are subject to annual appropnat~on and support revenue bonds issued by the C~ty of Wrgmma Beach Development Authority for the benefit of the City These obhgat~ons are described in the sectmon "Other Long-Term Obhgat~ons" here~n (?) General obhgatlon bonds ~ssued for water and sewer purposes, debt servmce on these bonds is paid from revenues of the water and sewer system even though such bonds are secured solely by the full famth and credit of the City and subject to the constitutional debt hmlt (~) General obhgatlon bonds issued for storm water purposes, debt service on these bonds ms 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 constltutmonal debt hmlt Source City Department of Finance A-25 Authorized but Unissued Bonds The C~ty currently has authorized but umssued $141,652,593 general obhgabon bonds and $37,140,641 revenue bonds, as shown below* Authorization Purpose Amount Security Year Manner Pubhc Improvement $ 7,052,593 General Obhgabon 1999 Council Pubhc Improvement 15,803,830 General Obhgabon 2000 Council Pubhc Improvement 19,596,170 General Obhgabon 2001 Council Pubhc Improvement 37,300,000 General Obhgabon 2002 Council Public Improvement 61,900,000 General Obhgabon 2003 Council Water and Sewer 3,696,002 Revenues 1999 CouncIl Water and Sewer 4,703,619 Revenues 2000 Council Water and Sewer 8,524,487 Revenues 2001 Council Water and Sewer 5,208,093 Revenues 2002 Council Storm Water Ubhty 5,028,440 Revenues 1998 Council Storm Water Ubhty 5,300,000 Revenues 1999 Councd Storm Water Ubhty 3,900,000 Revenues 2000 Council Storm Water Ubhty 200,000 Revenues 2001 Council Storm Water Ubhty 580,000 Revenues 2003 Council *Does not include the bonds approved at referendum for the Lake Gaston Project Source C~ty Department of F~nance A-26 GENERAL OBLIGATION DEBT ALLOCATED BY ACTUAL SOURCE OF REPAYMENT As of June 30, 2003 FISCAL OUTSTANDING GENERAL OBLIGATION PAYABLE FROM PAYABLE FROM YEAR DEBT SERVICE (as of 6/30103)(~) W & S REVENUES STORM WATER UTILITY OUTSTANDING TAX SUPPORTED OBLIGATION DEBT SERVICE PRINCIPAL INTEREST TOTAL PRINCIPAL INTEREST PRINCIPAL INTEREST PRINCIPAL INTEREST TOTAL 2003-04 $54,794,722 00 $27,208,141 51 $ 82,002,863 51 $3,535,000 00 $147,672 50 $ 506,099 60 $263,992 45 $ 50,753,622 40 $26,796,476 56 $77,550,098 96 2004-05 51,876,458 00 24,886,234 73 76,762,692 73 935,000 00 47,600 00 506,099 60 235,056 33 50,435,358 40 24,603,578 40 75,038,936 80 2005-06 48,369,509 00 22,665,884 54 71,035,393 54 475,000 00 12,112 50 506,099 60 206,422 71 47,388,409 40 22,447,349 33 69,835,758 73 2006-07 44,032,930 00 20,218,674 04 64,251,604 04 506,099 60 180,735 49 43,526,830 40 20,037,938 55 63,564,768 95 2007-08 42,175,637 00 18,155,114 43 60,330,751 43 506,099 60 155,281 74 41,669,537 40 17,999,832 69 59,669,370 09 2008-09 39,718,108 00 15,864,413 11 55,582,521 11 506,099 60 125,768 63 39,212,008 40 15,738,644 48 54,950,652 88 2009-10 39,476,529 00 13,852,880 33 53,329,409 33 506,099 60 97,519 72 38,970,429 40 13,755,360 61 52,725,790 01 2010-11 35,205,952 00 11,823,637 33 47,029,589 33 431,468 17 63,060 31 34,774,483 83 11,760,577 02 46,535,060 85 2011-12 32,746,826 00 10,069,804 20 42,816,630 20 434,019 91 38,934 71 32,312,806 09 10,030,869 49 42,343,675 58 2012-13 30,443,407 00 8,442,932 52 38,886,339 52 - 306,433 36 18,801 26 30,136,973 64 8,424,131 26 38,561,104 90 2013-14 26,736,086 00 7,028,266 16 33,764,352 16 222,016 46 4,915 14 26,514,069 54 7,023,351 02 33,537,420 56 2014-15 23,118,217 00 5,778,185 64 28,896,402 64 - 23,118,217 00 5,778,185 64 28,896,402 64 2015-16 20,995,727 00 4,539,668 19 25,535,395 19 - - 20,995,727 00 4,539,668 19 25,535,395 19 2016-17 17,837,290 00 3,558,847 95 21,396,137 95 - - 17,837,290 00 3,558,647 95 21,396,137 95 2017-18 14,755,000 00 2,659,700 00 17,414,700 00 - 14,755,000 00 2,659,700 00 17,414,700 00 2018-19 12,355,000 00 1,978,550 00 14,333,550 00 - - 12,355,000 00 1,978,550 00 14,333,550 00 2019-20 12,355,000 00 1,382,400 00 13,737,400 00 - - - 12,355,000 00 1,382,400 00 13,737,400 00 2020-21 8,550,000 00 778,125 00 9,328,125 00 - 8,550,000 00 778,125 00 9,328,125 00 2021-22 6,125,000 00 383,125 00 6,508,125 00 - - 6,125,000 00 383,125 00 6,508,125 00 2022-23 2,500,000 00 106,250 00 2,606,250 00 - - 2,500,000 00 106,250 00 2,606,250 00 2023-24 ...... Totals $564,167,398 00 $201,380,834 68 $765,548,232 68 $4,945,000 00 $207,385 00 $4,936,635 10 $1,390,488 49 $554,285,762 90 $199,782,961 19 $754,068,724 09 Includes $4,945,000 general obhgabon debt fo[ water and sewer purposes, and $4,936,635 10 general obhgatlon debt for storm water ut~hty purposes Does not ,nclude Capital Leases or Certificates of Parbopat~on, or Other Long-Term Obligations A-27 OVERALL NET DEBT AND OTHER LONG-TERM OBLIGATIONS As of June 30, 2003 FISCAL OUTSTANDING TAX SUPPORTED OBLIGATION DEBT SERVICE PLUS: CAPITAL LEASES AND COPS DEBT SERVICE PLUS: DEVELOPMENT AUTHORITY DEBT SERVICE PLUS: NEW ISSUE DEBT SERVICE OVERALL NET DEBT AND OTHER LONG-TERM OBLIGATIONS YEAR PRINCIPAL INTEREST TOTAL PRINCIPAL INTEREST PRINCIPAL INTEREST PRINCIPAL INTEREST 2003-04 $50,753,622 40 $26,796,476 56 $77,550,098 96 $3,181,164 68 $1,038,159 56 $385,000 $1,597,203 26 $ $ 2004-05 50,435,358 40 24,603,578 40 75,038,936 80 2,838,963 61 882,654 60 400,000 1,580,325 76 3,865,000 2005-06 47,388,409 40 22,447,349 33 69,835,758 73 2,429,338 23 743,997 26 420,000 1,562,695 76 4,595,000 2006-07 43,526,830 40 20,037,938 55 63,564,768 95 2,274,710 96 620,855 62 535,000 1,542,028 26 5,945,000 2007-08 41,669,537 40 17,999,832 69 9,669,370 09 2,385,000 O0 496,215 O0 645,000 1,515,858 26 6,255,000 2008-09 39,212,008 40 15,738,644 48 54,950,652 88 2,510,000 O0 364,050 O0 870,000 1,481,255 76 6,570,000 2009-10 38,970,429 40 13,755,360 61 52,725,790 01 2,645,000 O0 224,865 O0 1,005,000 1,436,427 01 6,225,000 2010-11 34,774,483 83 11,760,577 02 46,535,060 85 2,790,000 O0 76,725 O0 1,150,000 1,382,412 01 6,540,000 2011-12 32,312,806 09 10,030,869 49 42,343,675 58 - - 1,305,000 1,320,647 26 6,880,000 2012-13 30,136,973 64 8,424,131 26 38,561,104 90 - - 1,450,000 1,256,951 26 7,235,000 2013-14 26,514,069 54 7,023,351 02 33,537,420 56 - - 1,790,000 1,174,062 51 7,600,000 2014-15 23,118,217 O0 5,778,185 64 28,896,402 64 - - 1,935,000 1,090,683 76 8,010,000 2015-16 20,995,727 O0 4,539,668 19 25,535,395 19 - - 2,120,000 991,287 51 8,470,000 2016-17 17,837,290 O0 3,558,847 95 21,396.137 95 - - 2,355,000 873,600 01 8,950,000 2017-18 14,755,000 O0 2,659,700 O0 17,414,700 O0 - - 2,590,00 743,412 51 9,450,000 2018-19 12,355,000 O0 1,978,550 O0 14,333,550 O0 - - 2,075,000 619,428 13 9,965,000 2019-20 12,355,000 O0 1,382,400 O0 13,737,400 O0 - - 2,325,000 501,178 13 10,505,000 2020-21 8,550,000 O0 778,125 O0 9,328,125 O0 2,585,000 369,221 88 11,080,000 2021-22 6,125,000 O0 383,125 O0 6,508.125 O0 - - 2,855,000 228,375 O0 11,665,000 2022-23 2,500,000 O0 106,250 O0 2,606,250 O0 - 3,140,000 78,500 O0 12,285,000 2023-24 - - 12,910,000 PRINCIPAL INTEREST TOTAL $ 54,319,787 08 $83,751,62646 $138,071,413 54 57,539,322 01 86,620,880 77 142,145,202 78 54,832,747 63 81,361,789 98 134,419,537 61 52,281,541 36 75,127,363 79 126,763,905 15 50,954,537 40 71,456,443 35 121,920,980 75 49,162,008 40 67,115,958 64 115,907,967 04 48,845,429 40 64,582.082 02 113,107,511 42 45,254,483 83 58,719,197 86 103,728,681 69 40,497,806 09 51,999,322 84 92,347,128 93 38,821,973 64 48,552,056 16 87,319,029 80 35.904,069 54 44,081,483 07 80,005.552 61 33,063,217 O0 39,822,086 40 72,995,303 40 31,585,727 O0 36,881,682 70 68,702,409 70 29,142,290 O0 33,214,737 96 62,717,027 96 26,795,000 O0 29,728,112 51 56,993,112 51 24.395,000 O0 26,427,978 13 51,387,978 13 25,185.000 O0 26,398,578 13 52,253,578 13 22,215,000 O0 22,582,346 88 45,577,346 88 20,645,000 O0 20,391,500 O0 41,901,500 O0 17,925,000 O0 17,149,750 O0 36,034,750 O0 12,910,000 O0 11,880,000 O0 25,820,000 O0 Totals $554,285,762 90 $199,782,961 19 $754,068,724 09 $21,054,177 48 $4,447,522 04 $31,935,000 $21,339,554 04 $165,000,000 $ $772,274,940 38 $997,844,977 65 $1,770,119,918 03 A-28 RAPIDITY OF PRINCIPAL RETIREMENT ALL GENERAL OBLIGATION BONDS(s) 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 564,167,398 100 00% 20 years 760,394,940 98 46% (~) Includes general obhgat~on bonds additionally secured by water and sewer and storm water ut~hty revenues and general obhgat~on bonds not secured by water and sewer revenues but whmh are serviced annually from those revenues Does not ~nclude capital leases, Cerbficates of Participation or other non-general obhgat~on ~ndebtedness (2) As described on page A-26 including Series 2003A Bonds Water and Sewer System Debt The C~ty currently has outstanding two types of securities to finance capital ~mprovements to ~ts water and sewer system: (1) Prior to 1977 and ~n 1982, the City ~ssued general obhgat~on public improvement 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 Const~tuhon of Virginia, the City 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 City has ~ssued two types of securities to finance capital ,mprovements to ~ts storm water ut~hty system (1) Prior to 1995, the City ~ssued general obhgahon pubhc improvement bonds that were not secured by a pledge of the net revenues of the storm water uhhty 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 Constituhon of V~rg~n~a, the C~ty has ~ssued storm water ut~hty revenue bonds which are secured solely by the net revenues of the storm water utihty system As of June 30, 2003, $9,475,000 of these bonds were outstanding It is the C~ty's policy to service all debt ~ssued for storm water purposes by revenues from the storm water utihty system A-29 Agricultural Reserve Program On May 9, 1995, C~ty Councd adopted an ordinance estabhshmg the Agricultural 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 port~on of the C~ty through the purchase of agricultural land preservabon easements Landowners who meet certain ehg~bd~ty criteria may sell an easement to the C~ty whde holding fee s~mple htle to the land and continuing to farm The C~ty acquires these development rights by execubng ~nstallment purchase agreements w~th the landowners These agreements prowde for the payment of the principal balance of the agreement in a s~ngle ~nstallment due approximately twenty-five years after execution of the agreement Interest on the unpaid pnncipal balance ~s payable semi-annually C~ty Councd has dedicated a 1~ cent ~ncrease ~n the real estate tax (approved May 9, 1995) to finance the program These obhgabons consbtute indebtedness within the meaning of Article VII, Section 10 of the V~rgima Const~tubon and wdl be general obhgahons of the C~ty, pledging the full faith and credit and unhmlted taxing power of the City By policy, interest and pnnc~pal payments wdl be paid from a dedicated port~on of real estate taxes Pnnc~pal payments wdl be made from maturing zero coupon Treasury secunbes purchased from the dedicated port~on of real estate taxes As of June 30, 2003, 50 ~nstallment purchase agreements totahng 6,453 acres at a total purchase price of $20,463,087 have been executed C~ty Councd has approved 4 additional apphcatlons 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~honal 9 apphcat~ons 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 ~n the Commonwealth of V~rg~nla to use Tax Increment F~nanc~ng ("TIF") as a means of financing certain capital projects, usually ~nvolving one or more private or pubhc partners Tax Increment Financing is authorized under Secbon 58 1-3245 through 58 1-3245 5 of the Code of Virginia, originally enacted in 1988 The City has established TIF districts to fund its shara of three ~nvestment partnerships the Lynnhaven Mall Expansion, the Sandbndge Beach Restorabon Program and the Town Center of V~rg~n~a Beach Lynnhaven Mall Expansion: The area of the C~ty around Lynnhaven Mall was established as a TIF d~stnct by ordinance approved by City Council on June 9, 1998 The expansion of the third largest shopping mall ~n V~rgima wdl accommodate several upscale stores, a new entertainment complex and a themed restaurant The C~ty ~s commitbng $11 5 mdhon in future real estate taxes for a parking facihty and related ~mprovements to leverage a $100 mdhon ~nvestment from the New York State Teachers' Rebrement System The expansion wdl ~ncrease the mall by 300,000 square feet, which ~s equivalent to one-third ~ts original size The City will benefit from increased retail, restaurant, ubhty and bus~ness hcenses taxes As of June 30, 2003, $3,782,992 in TIF revenues have been collected ~n the Lynnhaven Mall TIF Revenue Fund Under the agreement w~th the developer, the City wdl prowde certain TIF revenues to the developer, ~f avadable, but is not responsible for the ~ssuance of any debt Sandbnd.qe Beach Restorabon Pro.qram The Sandbrldge area of the City was estabhshed as a TIF district by ordinance approved by C~ty Councd on December 1, 1998 An important real estate and aesthebc asset to the C~ty, th~s area has long battled sand erosion. The C~ty continues to pursue a multi- front strategy of funding sand replenishment, ~nclud~ng seeking federal funds, using local funds, and estabhshmg a Special Service Distr~ct The use of TIF ~s another method to ensure stabd~ty to th~s 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 in TIF revenues has been collected ~n the Sandbr~dge Restorabon Program A-30 The Town Center of Vlrg~ma Beach. The southern part of the Pembroke area of the City was estabhshed as a TIF district by ordinance approved by C~ty Councd on November 23, 1999. The d~stnct ~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" 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 C~ty anticipates committing $13 9 mdhon to prowde the public infrastructure and $42 2 million of TIF revenues to pay for the parking garages, for a total City ~nvestment of $56 1 mdhon, after reimbursement for certain land purchases necessary for the Town Center's development The public parking garages wdl be financed using revenue bonds issued 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 will not be pledged as security The first series of bonds for the public garage ~n Phase I of the development were issued on June 14, 2002 (see a description ~n "Other Long-Term Obhgat~ons" below) The C~ty's ~nvestment wdl leverage approximately $155 to $165 mdhon of private sector ~nvestment The C~ty w~ll benefit from increased personal property, retad, hotel, admissions, restaurant, utdity and bus~ness hcenses taxes. As of June 30, 2003, $1,764,284 ~n TIF revenues has 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 consisbng 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 pnnc~pal outstanding of $2,119,177 In addition, as of June 30, 2003, the City had outstanding $18,760,000 Refunding Certificates of Participation, Series of 1993 Proceeds of the 1993 Refunding Certificates were used to refund the Series 1990 Certificates of Participation and the Series 1987 Certificates of Part~c~pahon, which were ~ssued to finance the acqu~s~bon of real property to expand the City's Mumc~pal Center Complex and to construct a Judicial Center Complex, respechvely These leases contain non- appropnahon clauses and therefore are not considered debt for purposes of calculabng obhgahons subJect to the conshtubonal 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 3,721,618 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 addition, 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 obligabon of the C~ty, subject to annual appropnabon 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 is currently fixed at 0 41% until April 1, 2004, which is the maturity date of the loan The proceeds of th~s borrowing were used to reimburse the C~ty for the cost of acquiring 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 Virgima 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 obligation of the C~ty to make rental payments is subject to annual General Fund appropriations by the City Councd The maximum annual rent payment under the lease is $862,212 The A-31 Lease Revenue Bonds financed the costs of acqu~nng and construcbng a Social Serwces Building to be used by the City to house its 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~n~a Beach Development Authority ~ssued ~ts $20,815,000 Public Facility Revenue Bonds, Series 2002A, and ~ts $3,040,000 Taxable Pubhc Fac~hty Revenue Bonds, Series 2002B, to finance the acquisition of a pubhc parking facility and land for a pubhc plaza ~n the Town Center development These bonds are hm~ted obhgabons 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 obhgat~on of the C~ty to make such payments ~s subject to appropriation by the C~ty Council of funds sufficient for such purpose Principal outstanding on these bonds as of June 30, 2003, ~s $23,855,000 This ~ssuance of $165,000,000 Pubhc Fac~hty Revenue Bonds Ser~es 2003A, and any other debt issued by the Virginia Beach Development Authority under the Master Agreement of Trust dated September 1, 2003, w~ll be ~ncluded as other long term obligations Overlapping Debt The C~ty ~s autonomous from any county, town, or other pohbcal subdivision There are no overlapping jurisdictions with debt outstanding for which C~ty residents are liable Short-Term Borrowing The C~ty does not borrow on a shod-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 City 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 pnnc~pal of or ~nterest on any indebtedness Comprehensive Plan The C~ty's most recent Comprehensive Plan was adopted on November 4, 1997. Among some of the key planning pohcles embodied in th~s Plan are urban and rural growth management strategies, ~nclud~ng the Green L~ne concept, economic development opportunities, transportabon and other public fac~hty ~mprovements, care of the enwronment, housing, h~stonc resource management, neighborhood preservation 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 delivery systems and the demand placed on those systems by ex~sbng and future land uses The comprehensive planning pohc~es of the C~ty are designed to achieve enhanced and manageable land development and redevelopment within a defined urban service area (north of the Green Line) and Transition Area The development of urban ~nfrastructure is 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 public infrastructure. Another complementary strategy provided by the Green L~ne and other related comprehensive planmng pohc~es ~s to check sprawhng development By preventing future sprawl through the deslgnabon of areas for appropriate urban development, the C~ty avoids net negabve fiscal impacts for related capital and operabng expenses that are too often linked to such development patterns The land use planning guidance provided by the Comprehensive Plan along w~th the strong pubhc demand to hve and work in V~rg~n~a Beach can conbnue A-32 the value of growth ~n V~rg~nia Beach ~nto the foreseeable future In addition to adequate capacity for growth ~n the northern section of the City, the C~ty's land use pohcies prowde reasonable levels of rurally compabble growth in the southern part of the C~ty The Rural Preservation element of the Comprehensive Plan and the Agricultural Reserve Program, adopted by C~ty Council ~n 1995, are major tools to promote the preservation of farmland and the rural way of hfe In accordance w~th V~rg~ma state law that reqmres local governments to reassess their Comprehensive Plans at least once every five years, the C~ty is ~n the process of rewewmg th~s 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 protecbon of our rural areas and open spaces and the need to prowde for well-managed growth ~n designated areas located north of the Green L~ne The Comprehensive Plan ~s a dynam~c instrument and C~ty Council 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 City 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 pohc~es affecbng the Trans~bon Area. In addlbon, City Council 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 pohc~es relating to groundwater resource protecbon In March 2001, the Chesapeake Bay Preservation Area Board found the V~rg~ma Beach Comprehensive Plan to be ~n comphance w~th the V~rg~ma regulabons relabng to protecbon of the Chesapeake Bay S~nce 1971, the C~ty Council has periodically revised and adopted the C~ty's Master Transportation Plan, as needed, to meet the need for an efficient and cost-effective roadway system This pohcy document, which ~s a component of the Comprehensive Plan, describes the charactensbcs and estabhshes transportabon planmng pohcies for V~rg~ma Beach The Plan also prowdes planmng guidance for b~keways, scemc easements, and other s~m~lar features related to the C~ty's major roadway system Decisions affecting the ~mplementabon of land use and transportabon pohcies 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 six-year Capital Improvement Program ("CIP") prowdes for improvements to the City's public 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 CIP bme table coincides w~th that of the Operating Budget, and both are presented to C~ty Council in early Spring The approved CIP ~s the result of a process that balances the need for pubhc fac~hbes against the fiscal capab~hty for the C~ty to provide for these needs. It ~s the C~ty's pohcy to fund ind~wdual capital projects of less than $250,000 through General Fund appropnabons (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 ClP When compared to Fiscal Years 2003-2008 CIP, the program reflects a 5.5% ~ncrease ~n total costs The total six-year program aggregates $1 841 bllhon, a $95 2 million ~ncrease from the Fiscal Years 2003-2008 CIP The CIP further ~ncludes a $255 5 m~lhon utihbes program, a $1 159 bilhon for General Government and a $426 7 mllhon school ~mprovements program. The cost of City general improvements ~s ~ncreas~ng by approximately 6% and the Ut~hbes program is ~ncreas~ng by approximately 3% The approved ClP assumes use of $703 4 million of bonded debt and $304 9 million of lease-purchases The CIP ~ncludes a discussion of the development plan for the Transition Area, I e the land area d~rectly below the Green L~ne, which ~s a buffer between the urban and rural services areas of the C~ty W~thln th~s area, hm~ted and conditional growth opportumbes are recommended consistent w~th the adopted Comprehensive Plan and C~ty Council's economic wtahty pohc~es The Translbon Area Report A-33 ~dentifles the infrastructure needs of the area w~th a proposed limit of 3,000 add~bonal residential units 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 m~lhon Storm water projects w~ll be constructed as development occurs and these projects w~ll 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 serwces to development ~n the Trans~bon Area Trans~bon Area projects are not funded ~n the ClP but w~ll be funded as development creates the need. The Trans~bon Area financing plan ~ndlcates that revenues generated from the development of the area w~ll be sufficient to fund the necessary ~nfrastructure For F~scal Year 2004, City Council approved increases in sewer and storm water rates to provide funding for infrastructure maintenance projects in these areas The samtary sewer increase 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 mllhon of the $1 841 b~llion six-year ClP. It anbc~pates $15.6 m~lhon for ubhties and $166 0 m~lhon for pubhc improvements, ~ncluding $39 9 m~lhon for schools and $85 3 milhon for roadways and buildings Funding for the Capital Budget ~s planned to be prowded from the following sources $52 4 million from general obhgabon bonds, $ 6 m~lhon from storm water ubhty revenue bonds, $21 1 million from General Fund appropnabons and Fund Balances, and $107 5 m~lhon from other sources The following table compares total appropriation authority for the s~x-year F~scal Years 2004-2009 CIP to the previous s~x-year FIscal Years 2003-2008 CIP The amounts shown represent the total amount of appropnabons required (appropnabons to date plus appropnabons made by the F~scal Year 2004 Capital Budget plus appropnabons not yet made but planned for F~scal Years 2005-2009) to fund the CIP projects They represent total esbmated project costs (although future years' esbmates are necessarily very prehm~nary), but do not equal the amount of debt financing to be used (s~nce a variety of funding sources w~ll be used) Future years' CIP amounts are subject to C~ty Council approval and may be rewsed FY 2004-2009 ClP VS. FY 2003-2008 ClP Total Program ClP % of ClP % of Cateuorv (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 Economic &Tounsm Development 352,908,440 19 325,136,706 19 27,771,734 8 5 Buildings 303,654,004 16 305,739,644 18 (2,085,640) (0 7) Coastal 78,969,424 4 74,785,126 4 4,164,298 5 6 Parks & Recreation 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 58 Storm Water 81,864,560 4 76,683,760 4 5,180,800 6 8 Water & Sewer 173,656,389 9 170,765,756 1....~0 2,890,633 1 7 Subtotal - Ubhbes 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~llion versus the prewous s~x-year ClP. S~nce th~s table compares "rolling" s~x-year periods, percentage changes ~n ~ndividual categories of projects can vary markedly The Fiscal Years 2004-2009 CIP rehes upon charter bond authority for general obligabon bonds assumed in the ClP The uses by project categories and major funding sources for the total program as noted ~n the ClP are shown on the follow~ng 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 Ut~hty Sewer Ubhty Storm Water Subtotal- Ubht~es TOTAL USES Authorized 2003-04 Unappropriated Estimated in Previous 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 15,566,915 99,796,268 $1.840.988.17~5 ~z~[[Q+7~3~ $181;611~308 SOURCES C~ty Bond Issues General Obhgabon Bonds(4) Water & Sewer Revenue Bonds Storm Water Revenue Bonds Subtotal - City Bond Issues General Fund Appropnabons and Fund Balances(s) Other F~nanc~ng Sources Storm Water Ubhty Fund Appropnabons Water & Sewer Fund Appropnabons(6) Information Technology Appropnabons Parks & Recreabon Fund Appropnabons Community Development F~re Programs Fund Golf Course Fund Appropnat~ons Tounsm Growth Investment Fund Cigarette 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 Locahbes 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 6,444,936 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 $1.080.738.62~9 $181..611~308 ~5.7_8+C33]~.3~ NOTE A As set forth ~n the sectJon "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 w~th several senes of pubhc fac~hty revenue bonds Included ~n the ClP The uses/sources of such proJects are d~stnbuted as follows (~) Of the $304 mllhon total Building costs, $110,824,565 represents such project costs (2) Of the $117 m~lhon total Parks & Recreation costs, $54,090,000 represents such project costs (3) Of the $353 m~lhon total Economic & Tourism Development costs, $223,836,800 represents such project costs (4) Of the $582 m~ll~on total General ObhgatJon Bonds, $7,990,000 ~s expected to be apphed to fund such projects (5) 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 m~lhon total Water & Sewer Fund Appropnabons, $3,080,000 ~s expected to be apphed to fund such projects (7) Of the $48 m~lhon total Law Enforcement funding, $15,732,000 ~s expected to be apphed to fund such projects (6) Of the $19 m~lhon total Sale of Property funding, $3,525,000 ~s expected to be apphed to fund such proJects (9) Of the $175 million total Federal, State, & Private Contributions, $31,000,000 is expected to be applied to fund such projects (~o) The enbre Lease Purchase funding, $304, 882,365 is 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 remaining $21,800,000 ~s funded through the tax ~ncrement 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 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 prior year capital budgets ACTUAL CAPITAL PROJECT EXPENDITURES Cateaorv FY '1999-00 FY 2000-01 FY 2001-02 General Governmental Schools Pubhc Ublibes Storm Water Ubhties $ 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 TOTAL $125.538.611 $148.489.454 $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 habihties) are reported under the modified accrual bas~s of accounbng Revenues are recogmzed ~n the accounbng period ~n which they become suscepbble to accrual (~ e, measurable and available) "Measurable" means the amount of the transacbon can be determined and "available" means collecbble w~th~n the current period or soon enough thereafter to be used to pay I~ab~hties of the current period The C~ty considers property taxes as available ~f they are collected w~th~n 45 days after year end Expenditures are recogmzed in the accounting period ~n which the corresponding hablhties are ~ncurred, ~f measurable (except for unmatured interest on general long- term debt which ~s recogmzed when due and pa~d) The following ~s a list of the major revenue sources which meet the "susceptible to accrual" criteria General Property Taxes Interest on Deposits and Investments General Sales Tax Revenue from Commonwealth Utihty 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 accounbng Revenues are recogmzed when earned and expenses are recognized when incurred Unb~lled Water and Sewer Enterprise Fund accounts receivable for ublity services provided through June 30 are ~ncluded ~n the financial statements The C~ty operates on a July 1 through June 30 fiscal year City of Virginia Beach Development Authority The Virginia Beach Development Authority was estabhshed for the specific purposes of attracting new ~ndustnes and the expansion of ex,sting industries The Authority is authorized to issue industrial development bonds after approval by the C~ty Council and to purchase land to improve and sell for development. These bonds do not consbtute indebtedness of the C~ty but are secured solely by revenues A-36 from the organizabon on whose behalf the bonds were ~ssued. The Authonty's Commissioners are appointed by City Council The C~ty does not have legal title to any of the Authonty's assets, nor does ~t have a r~ght to the Authority's surpluses. However, ~n accordance with Governmental Accounbng Standards Board Statement 14, the Authority has been discretely 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 City, ~nclud~ng the Town Center and the Projects it ~s currently undertaking, the Authority has developed the Corporate Landing Office Park which has experienced temporary cash flow d~fficulbes In 1993, the City, 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 ~ts loan from the C~ty ~n May 1993, September 1993, and February 1994 which total over $1 m~ll~on These payments were made from 95% of net proceeds from the sale of property in 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 this restructuring, the City exbngu~shed the Authorlty's obhgation to pay the ex~sbng accrued ~nterest on th~s loan The rema~mng principal, $6.2 m~lhon as of February 2003, was restructured ~nto two non-~nterest bearing notes Note one ~n the amount of $4 8 m~llion 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 rema~mng parcels at Corporate Landing and Oceana West, payable from 20% of net proceeds from land sales Rema~mng proceeds w~ll be used to fund ~nfrastructure and strategic land acqu~sibons Hampton Roads Transportation District Commission The C~ty's financial statements include its share of the operabng cost of the regional mass transit operabons of the Hampton Roads Transportation District 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 Accounting Standards Board ("GASB") ~ssued Statement No 34, "Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments" Th~s statement, known as the Reporting Model, provides for the most s~gn~flcant change ~n financial reporting for state and local governments for over twenty years Th~s statement affects the manner ~n which the C~ty records transacbons and presents financial mformabon State and local governments have tradlbonally 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 ~nclude both government-wide (based upon the C~ty as a whole) and fund financial statements Wh~le the prewous model emphasized fund types (the total of all funds of a parbcular type), ~n the new reporting model the focus ~s on e~ther the C~ty as a whole or major ~nd~wdual funds (w~thin the fund financial statements) Both the government-w~de and fund financial statements (w~th~n the basic financial statements), categorize primary acbwbes as e~ther governmental or business- type In the government-wide Statement of Net Assets, both the governmental and bus~ness-type acbvlbes columns are presented on a consolidated 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 obhgabons. 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 restricted assets based on a review of the specific transacbon The statement of actiwties 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 idenbflable with a specific funcbon or segment The program revenues must be directly associated with the funcbon (pubhc safety, public works, etc ) or a bus~ness-type acbwty. Program revenues include (1) A-37 charges to customers or applicants who purchase, use or directly benefit from goods, serwces, or pnvdeges provided by a g~ven function or segment and (2) grants and contributions that are restricted to meebng the operabonal or capital requirements of a particular function or segment Taxes and other items not properly ~ncluded among program revenues are reported as general revenues. The City does not allocate ~nd~rect expenses. The operabng grants ~nclude operahng-spec~flc and d~screbonal (e~ther operabng 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 deflmtion, the assets of the fiduciary funds are being held for the benefit of a third party and cannot be used to address actiwbes or obhgabons of the government, therefore, these funds are excluded from the government-w~de statements Major ind~wdual governmental funds and major enterprise fund are reported as separate columns ~n the fund financial statements The City reports the following major governmental funds The General Fund is the C~ty's primary operabng fund It accounts for all financial resources of the C~ty, except those required to be accounted for in another fund Revenues are derived primarily from property and other local taxes, state and federal distnbuhons, licenses, permits, charges for service, and interest income A s~gmflcant part of the General Fund's revenues is used principally to finance the operations of the C~ty of Virgm~a Beach School Board The Capital Projects Fund is used to account for the financial resources for the acqu~s~bon or construcbon of major capital facd~bes w~thln the City The C~ty reports the following major proprietary funds The Water and Sewer Fund prowdes water service and samtary sewer waste collection and transmission services to Virg~ma Beach cibzens and accounts for operabons that are financed ~n a manner s~mdar to private bus~ness enterprises The Storm Water Fund accounts for the acbwbes of the Storm Water Ubhty which charges a fee for operabonal and capital needs for Storm Water management ~n the City Add~bonally, 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 prows~ons to finance specific acbwbes 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 umts on a cost reimbursement bas~s The C~ty ubhzes Internal Service Funds for its C~ty Garage, Fuels, R~sk Management, Print Shop, School $~te Landscaping, and Informabon Technology operahons Fiduciary Funds are used to account for assets held by the c~ty in a trustee capacity or as an agent for individuals, private organizations and other governmental units The Fiduc~ary Funds are City Fringe Benefits, Payroll Deductions, Special Welfare, Escheat Property Agency Funds and the Pension Trust Fund The Agency Funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations The Pension Trust Fund accounts for the assets of the Sheriff's Rebrement Plan which is a defined contnbubon pension plan Investment Policies and Practices The C~ty of Vlrg~ma Beach, as a pohbcal subd~ws~on of the Commonwealth of V~rg~nla, ~s hm~ted to ~nvestments permitted by the Code of Virg~ma of 1950, as amended In add~bon, various bond resolubons and a C~ty Councd adopted investment policy further restrict the types of allowable ~nvestment acbwbes A-38 The C~ty's investment pracbces are generally described ~n footnote 7 of the C~ty's financial statements, included ~n Appendix B hereto. The C~ty Treasurer ~s responsible for the ~nvestment of C~ty funds. The C~ty Treasurer ~nvests the C~ty's funds using ~nternal acbve management, w~th external trustees and trust funds taking possession of apphcable investments W~th~n the state permitted guidelines and the adopted ~nvestment policy, the C~ty Treasurer hm~ts the C~ty's ~nvestments to the State Treasurer's Local Government Investment Pool, collateral~zed certificates of deposit, repurchase agreements, prime quahty commercial paper, and prime quahty "fed ehg~ble" bankers' acceptances The C~ty does not ~nvest ~n "derivative" securities, ubhze reverse repurchase agreements, nor otherwise leverage ~ts ~nvestment portfoho The C~ty matches the maturity of ~ts ~nvestments to cash flow needs to assure cash ava~labd~ty as necessary Certificate of Achievement The Government Finance Officers Association of the United States and Canada ("GFOA") awarded a Cerbflcate of Achievement for Excellence in Financial Reporting to the City for its Comprehensive Annual Financial Report ("CAFR") for Fiscal Year 2001 In order to be awarded a Certificate of Achievement, a governmental unit must pubhsh an easily readable and efficiently orgamzed Comprehensive Annual F~nanc~al Report that substantially conforms to the high standards for financial reporting as promulgated by the GFOA A Cerbflcate of Achievement ~s vahd for one year only The City has been awarded a Cerbflcate of Achievement (called a Cerbflcate of Conformance prior to 1985) for its Comprehensive Annual F~nanc~al 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 Fiscal 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 Councd at least 90 days before the beginmng of each fiscal year which begins July 1 Each department of the C~ty prepares ~ts own budget request for rewew by the City 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 Council for cons~derabon as part of the C~ty's general operabng budget The C~ty Councd is required to hold a pubhc heanng on the budget at which bme all interested persons have the opportunity to comment If the proposed operating budget ~s not legally adopted by the C~ty Councd by June 1, the operabng budget submitted by the C~ty Manager w~ll have full force and effect as ~f ~t had been adopted by the City Council The C~ty Manager is authorized to transfer appropnabons up to a maximum of $100,000 Transfers ~n excess of $100,000 require C~ty Councd approval Transfers between $25,000 to $100,000 are reported to C~ty Councd on a monthly bas~s Add,ttonal appropr,abons must be offset by addtbonal 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 operating budget includes a port~on of the funding for the Capital Improvement Program ("CIP") General appropriabons used to finance capital projects are shown both ~n the operabng budget and ~n the ClP The Department of Management Services annually prepares a s~x-year ClP Because acbv~bes of capital projects often go beyond a fiscal year period, the accounbng, encumbering, and A-39 controlling of the funds are based upon the length of project act~wties S~m~larly, 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 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 appropr~abons are offset by an equal amount of esbmated revenue (other financing sources), and are funcbonally budgeted ~n the General Debt Serwce 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 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 Financial Report ("CAFR") near year end Fiscal Year 2004 Operating Budget On May 13, 2003, the C~ty Council approved the F~scal Year 2004 Operating Budget and Capital Improvement Program (known as the Resource Management Plan) The operating budget of $1,311,825,979 represents a 6 33% increase over the Fiscal Year 2003 adjusted budget Highlights of the budget are hsted below No increase in the rates of real estate property taxes or personal property taxes. Increase of 82 3 FTE positions over the adjusted prior year's budget This is a net result of 52 9 decrease in School positions, and an ~ncrease of 135 2 ~n C~ty positions The add~bonal C~ty positions are needed to meet commitments related to the opening of the Juvende Detention Facility and Pnncess Anne Library as well as additional pos~bons funded by the increase ~n the cigarette tax. An increase in the c~garette tax from 32 cents to 50 cents per pack approved by C~ty Council on January 7, 2003, allows funding of safety-related positions, including 10 addibonal flrefighters and 16 additional police officers, a regulabon and enforcement posibon for compliance w~th emergency medical serwces regulabons, support of an internabonal markebng m~babve, and infrastructure for pubhc/pnvate partnerships and economic development imtlabves Tax and fee ~ncreases for the following E-911 tax ~ncrease of 65 cents per month over three years from $1.95 per month ~ncreaslng to a total of $2.60 per month 0n Fiscal Year 2006) to fund staffing for the Emergency Commumcabons Center and funding ~nfrastructure, fire lane wolabon fee ~ncrease from $15 to $50, amendments to ~ncrease various planning 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 in ubhty rates The sanitary sewer rate increased from $13 27 to $14 34 per month, and the storm water fee ~ncreased from $51 47 to $55 12 per year Four addlbonal pos~bons in the Department of Pubhc Ubllbes to strengthen the cross connection and backflow prevenbon program and to protect the integr~ty of the pubhc water supply, and to ~ncrease maintenance capabdlbes. 3 65% pay raise for certain ehg~ble employees and a 1 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 m~lhon 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 office and 3 6 FTEs ~n the C~ty Treasurer's off~ce 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 Speofic 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 Bud¢;et Bud¢;et % of Total $411,449,876 366,2O7,3O3 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 $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% $1.311.825.979 100.00% APPROPRIATIONS Education General Government Debt Service Pubhc Works Pohce Pubhc Ut~ht~es F~re Social Services Capital ProJects Mental Health Parks and Recreation Reserve for Contingencies L~branes Total Appropriations $583,913,186 190,256,864 104,524,706 67,959,951 64,153,925 59,450,686 30,205,773 31,673,724 35,972,846 30,126,928 22,355,029 0 13,085,990 $619,757,614 47 24% 195,183,797 14 88% 105,224,669 8 02% 66,947,874 5 10% 69,351,375 5 29% 62,220,453 4 74% 32,050,780 2 44% 33,973,866 2 59% 42,568,404 3 24% 31,229,684 2 38% 24,380,355 1 86% 14,403,159 1 10% 14,533,949 1 11% $~+,3~1+825+~ 100.00% % Change FY 2003 Adjusted to FY 2004 8 94% 2 22% 7 88% 0 75% 14 30% -21 58% 41 54% 22 62% 2O 17% 13 72% 17 38% 8 1.3% 6 33% 6 14% 2 59% 0 67% -1 49% 8 10% 4 66% 611% 7 26% 18 33% 3 66% 9 06% 0 O0% 11 O6% 6 33% A-42 General Government Revenues In Fiscal 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) Change 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, Privilege Fees, and Regulatory L~censes 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 1 3 (5 6) (11 2) Charges for Serwces 36 7 3 4 34 7 3 4 2 0 3 9 Miscellaneous 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 1 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, Special Revenues and Debt Service Funds Source C~ty Department of F~nance General Fund In accordance w~th the general practice of governmental un~ts, the C~ty records ~ts transacbons under various 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 administrative action 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 invested 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 Serwce Funds to pay pnnc~pal and interest on the C~ty's general obligabon 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 City lev~es 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 Fiscal Year 2002 These include' (1) a one percent local sales tax (collected by the state and remitted to the C~ty); (2) a tax on consumer utility b~lls of 20 percent each for gas, electric, water, and telephone on b~lls 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 cigarette tax of 50 cents per pack, (4) property transfer recordation taxes; (5) an automobile hcense fee, (6) various business, professional, and occupational 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 Adverhs~ng Program or ~mprovements at Sandbndge The following table shows the C~ty's principal tax revenues by source for each of the last ten fiscal years. Growth in 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 is levied by the C~ty on the assessed value of real property subject to taxabon within the C~ty as of July 1 The C~ty assesses real property at 100 percent of ~ts fair market value (w~th the excepbon of pubhc service properhes which are assessed by the State Corporabon Commission) Real property taxes are due on December 5 and June 5 of the fiscal year ~n which they are levied A penalty of ten percent of the tax owed or $10, whichever ~s greater, along w~th ~nterest of 9 6 percent for the first year, is assessed on dehnquent taxes Subsequent year's interest penalty rates are set by the City 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 m the C~ty for the last ten fiscal years. Tax-exempt properties owned by federal and state governments, churches, and schools, among others, aggregating approximately $3,910,564,507 for Fiscal 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 serwce real property) A-44 F~scal Year 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 HISTORICAL ASSESSED 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¢) 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% 1 81 3 75 3 O8 3 65 4 69 4 72 7 49 5 O9 5 88 (1) 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 vehmles 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 hmit as to the rate or amount to the extent necessary to pay pnnc~pal of and interest on its general obl~gabon bonds. The following table sets forth the City's tax rates and tax levies on real property for F~scal Years 1993 through 2002. This 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 Prooertv¢) 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 mTax rate per $100 of assessed value Source C~ty Department of F~nance A-45 The following table sets forth ~nformabon concermng the C~ty's real property tax collection 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 Fiscal Taxes Receivable of Levy Tax Tax As Percent of Year Receivable Collected Collected Collections Collections (t) 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 I 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 dehnquent collections Source C~ty Department of Finance CITY OF VIRGINIA BEACH, VIRGINIA TWENTY-FIVE PRINCIPAL TAXPAYERS FISCAL YEAR 2001-2002 Real Property TaxpayerBusiness Assessed Value V~rgln~a Electric & Power Company Kmckerbocker Properbes Inc III Venzon Virginia Inc Pembroke Square Associates Ramon W Breeden, Jr Tidewater Oxford Ltd Partnership Thomas J. Lyons, Jr Westminster-Canterbury of Hampton Roads Atlantic Shores Cooperabve Etc Watergate Treehouse Associates LP F Wayne McLeskey, Jr Virg~ma Natural Gas, Inc¢) Edmund C. Ruffin & Bruce L Thompson Gordon Potter, D Potter and J Potter Chnsban Broadcasbng Network, Inc Windsor Lake Apartments LLC Princess Anne Properties Inc Manna Shores Associates One Ltd, Prnrshp NHP Pembroke Courts LP Lake Gem LLC Wal Mart Real Estate Business Trust ABC Mini Warehouse Company Lucy F Reason L~berty Property Lim~ted Partnership Cox Virginia Telecom Inc Ubhty $321,783,670 Shopping Mall 213,876,670 Ubhty 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 Broadcasting 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 Retad 36,266,936 Mm~ Storage 34,977,844 Shopping Center 34,682,712 Office/Warehouse 31,551,400 Ut~hty 31,052,660 Total $2.009.019.332 .... Note Includes certain personal property taxed at real property rates as provided ~n Secbon 58 512 1 of the Code of V~rg~ma, as amended Source C~ty Assessor A-46 General Fund Operations The following table compares City General Fund revenues, expenditures, and changes in Fund Balance for FIscal 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, Pnvdege Fees and Regulatory L~censes 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 Leg~slabve Executive Law Finance Human Resources Judicial Health Social Services Police Pubhc Works L~brary Planmng Agriculture Economic Development Convenbon and V~s~tor Development General Services Boards and Commissions F~re Museums Management Services Commumcabons and Informabon Technology Emergency Medical Services Housing and Neighborhood Preservabon Total Operating Capital Outlay<i) Total Expenditures 1998 1999 2000 2091 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 $ 751,051 $ 795,918 $ 880,419 $ 915,390 $ 988,674 1,519,739 1,678,433 1,646,1 54 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 13,645,726 14,415,974 14,863,706 4,536,302 4,987,044 5,082,506 5,537,693 5,033,197 7,307,996 8,644,304 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 50,264,775 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 .... -- $225,115,017 $242,291,914 $251,037,099 $ .272,038,335 $282,670,038 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES ~ $315.875.92._~0 $353.999.14_~9 $355:437:g77 $381.984.01.~3 (~) Starbng In FY 99, Capital Outlay reported In each department Source City Department of F~nance A-47 GENERAL FUND COMPARATIVE STATEMENT OF REVENUES AND EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE FISCAL YEAR ENDING dUNE 30 OTHER FINANCING SOURCES (USES) Proceeds From Capital Leases Operabng Transfers ~n Operabng Transfers out Total Other F~nanc~ng 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~UNE 30 1998 1999 2000 2001 2Q02 $ - $ - $ - $ - 2,027,353 3,483,798 325,842 377,030 (324,639,583) (322,683,64.3) (353,576,086) (356,733,330) ${322,612,230) ${319,199,845) $(353,250,244) $356,356,300) $(9,802,725) $(3.323.925) $748,905 $(815.323) $107,502,880 $97,700,155 $94,376,230 $96,067,969 - - - 296,082 $107,502,880 $97,700,155 $94,376,230 $96,364,051 $97.700.15~5 $94.376.23~0 $95.125.13~5 ~J.~_4.~,~.TJZ~ 411,626 1,728 ${373,712,96.6) $(373,299,6!2) $8,684,401 $95,445,728 - . 449,765 $ 95,895,493 $104.579.894 Note to the Table The enbre General Fund balance ~s not available for appropnatmon because of outstanding mnterfund and ~nteragency loans, prepmd ~terns, encumbrances, and des~gnabons for school capital projects An analys~s 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 29O,OOO 8,425,417 245,502 21,149,154 9,002,297 3,184,578 $104,579,894 45,120,646 Source City 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 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 L~ablhty Unreserved DesIgnated for School Capital Projects-Textbooks and other Designated for Capital Projects Designated for Year 2000 Designated for Futura 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 $97.700.15_~5 $9~ ~ ~ $104;579=894 The C~ty has maintained a sizable General Fund balance ~n each of the past ten fiscal years as summanzed ~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 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 Utd~ties operates the C~ty owned Water Utd~ty and the Samtary Sewer Ut~hty The mission of the Department is "to prowde public water, ~ncluding water for fire protection, and pubhc samtary sewer semce to the urban areas of V~rg~ma Beach" The goals are "to provide quahty pubhc semce at reasonable costs and to plan, build, operate and maintain ~ts fac~hbes to meet commumty needs, enwronmental responsibilities and regulatory requirements" The physical property of the C~ty water system as of June 30, 2002, included approximately 1,409 m~les of transmm~on and d~stnbubon mains, 7,441 fire hydrants, 13 water storage facd~hes, and ten pumping stations 0nclud~ng Lake Gaston) The C~ty water system ~s fully metered, w~th tap s~zes ranging from %-~nch to 12 ~nches As of June 30, 2002, the water system had approximately 126,093 connections, representing a 1 2% increase over the number reported m 2001, and a customer base of approximately 416,000 people The C~ty Samtary Sewer System includes collector hnes, force mains and pump stabons, which are used to collect and transport wastewater to the treatment facd~bes operated by the Hampton Roads Sanitation D~stnct ("HRSD'), the regional treatment agency. V~rgima Beach c~bzens rece~wng sanitary 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 Sanitary Sewer System consists of 386 sewer pump stabons and over 1,505 mdes of p~peline ranging ~n s~ze from 4 inches to 36 ~nches ~n d~ameter As of June 30, 2002, the number of C~ty sewer connections was 124,172, represenbng a 1 1% ~ncrease over the number reported ~n 2001 The HRSD, estabhshed in 1940, prowdes wastewater treatment semces for 17 c~t~es and counbes ~n southeastern V~rg~nla The HRSD operates nine major treatment fac~hbes ~n Hampton Roads and two smaller treatment facd~ties on the M~ddle Pemnsula, w~th a total treatment capacity of 230 5 mdhon gallons per day ("MGD") Two HRSD plants are located ~n the C~ty The Chesapeake-Ehzabeth Plant, ~n operabon s~nce 1968, has an operabng capacity of 24 MGD, w~th average annual flow esbmated at 18 MGD The Atlanbc Plant has an operabng capacity of 36 MGD and average annual flow esbmated at 28 MGD The HRSD has a service populabon of 1 5 m~lhon HRSD reports that it ~s meebng all ~ts d~scharge permit requirements estabhshed by the U S Environmental Protecbon Agency and the V~rg~n~a Department of Environmental Quahty The Water Utd~ty and Sanitary Sewer System are operated and maintained ~n good working order including repairing, rebuilding, or replacing of equipment and structures when required In addition, the C~ty has developed an ongoing tralmng program to develop a staff of personnel ~n sufficient numbers to promote safe and technically competent operabon of the water and sewer ubhty In May 2000, the C~ty acquired the last privately-owned water utility in V~rg~n~a Beach Th~s privately-owned ubhty served approximately 150 customers S~nce 1977, the C~ty has acquired four other private water ubht~es with an esbmated 2,000 customers and s~x sanitary sewer ubht~es with an esbmated 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, including land and air rights A-50 ! i I l, WATER AND SEWER SYSTEM ASSET EVALUATION FOR FISCAL YEARS ENDING JUNE 30 1998 M~llions of Gallons of Water Storage 30 25 MIles 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 Connections 119,414 Number of Sewer Connecbons Total Value of Ut~hty Plant ~n Service(2) 117,749 1999 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 ~ $577.369.44_~3 ~ ~ (~) Includes Lake Gaston (2) Excludes deprec~abon Source City Department of Pubhc Ubhtles The City's water and sewer system ~s operated on a self-sustaining 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 obligations 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 engineering firm of Alvord, Burdock & Howson, L L C ("AB&H") has been used as the City'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 Ut~hbes and conducts a physical ~nspecbon of the operating faclhties ~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 projecbon 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 ~ncreases have been approved by C~ty Council to meet anhc~pated increases ~n future revenue requirements, ~ncluding · Funding requirements of the water and samtary sewer capital improvement program · Addibon of Lake Gaston Project to the C~ty water supply system · Prows~ons for funding to address aging ~nfrastructure ~n the samtary sewer system Increase in the samtary sewer charges, as adopted by C~ty Council, took affect on July 1, 2001, and July 1, 2002, with an add~bonal ~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 utihty rate consultants A-51 Historical water commodity rates and samtary sewer charges for a s~ngle family residence and their effective date are outhned below' Effective Date Water Commodity Rate (r)er 1,000 ~allons} 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 1 2003 $1.62 $ 9.46 1 81 946 1 99 9 46 2 18 9 46 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 acbv~bes are operated on an enterprise fund accounbng bas~s F~scal 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 positive Net Assets of $523,232,032 at the end of F~scal Year 2002 Typical Water and Sewer Bills Under the City's current rate structure, a s~ngle family residence consuming 6,000 gallons for 30 days would receive a bill as follows [does th~s need to change~] Current Projected Rates 7-1-2003 Water Usage, 6 x $3.55 per 1,000 gallons M~n~mum Service Availabihty Charge Sanitary Sewer Service Total Water and Samtary Sewer Monthly B~lhng $21 30 $21 3O 3 40 3 40 $24 70 $24 70 13 27 14 34 $37 97 $39 04 In addition, the HRSD would charge the same residence $10 91 for wastewater treatment of 6,000 gallons dunng the same t~me period The last HRSD rate increase was tn Fiscal Year 2002 Operating Results-Water and Sewer System The City Council fixes water and sanitary sewer rates and charges such that esbmated income generated by such rates and charges w~ll cover operating expenses and debt service relating to the water and sewer system. Funds and accounts relating to the Department of Pubhc Ut~hbes 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 acquisition of water and sewer fac~hbes through Federal and State grant proceeds, pay-as-you-go funding and the ~ssuance of C~ty 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 obl~gabon pledge) and water and sewer revenue bonds The Department is required by the C~ty's bond resolubons, among other prowslons, to estabhsh 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 obhgation bonds issued prior to 1977 for water and sewer purposes are not subject to such covenant However, ~t is City Council policy to pay debt service on those general obligation bonds issued 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 service on the water and sewer revenue bonds and the general obhgation bonds issued for water and sewer purposes ~s shown separately from the coverage of debt service on all bonds issued 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 (Services) Water Dtstnbut~on Sewer Collecbon Admm~strabon and Engineering Customer Serwces Total Operabng 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-Operabng Income Income Available 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 ~ ~ $30..037 ~._.4+9_4_1. ~ Annual Debt Service Water and Sewer Revenue Bonds Total Water and Sewer Debt Serwce Coverage of Debt Serwce on Water and Sewer Revenue Bonds Coverage of Debt Service 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 Ubht~es Water Sales and Services Contracts Until 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 Pipeline Project was put into 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 obhgates Norfolk to receive, treat, and dehver Lake Gaston water to the City, runs through the year 2030 In essence, the C~ty has contracted for water system facd~ties and services related to the storage, transmission and treatment of Lake Gaston water. The faclhbes are owned by Norfolk, but dedicated to serving the City through the life of the Water Services Contract Those fac~hbes ~nclude A-54 1 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~enmal bas~s, Norfolk develops projected rates apphcable to the City for treated water. These projected rates are based upon the utihty bas~s "Cost of Service" methodology, which follows traditional ubhty ratemaklng standards Under the pnnc~ples of the ubhty bas~s cost of service allocations, the C~ty pays for ~ts allocable share of operabons and maintenance expense, cost of the facd~bes 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 C~ty for dehvery of bulk treated water was $1 97 per 1,000 gallons On July 1, 2002, that effecbve rate ~ncreased to $2 00 per 1,000 gallons. At the end of the second fiscal year in each bienmal period, Norfolk's independent consultant completes and submits to the C~ty a true-up schedule of rates and annual bdlings applicable to the previous two fiscal years reflecbng an allocabon of cost of service based on actual costs recurred by Norfolk. Th~s "true-up" prows~on wdl result ~n a rebate from Norfolk to the C~ty ~n F~scal Year 2003 of approximately $2 6 mdhon 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 Ubhtles annually prepares the portion of the City's Capital Improvement Plan concermng 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 period of Fiscal Years 2004 to 2009 Future funding for the water and sewer program totals $76 3 mdhon, 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 utihty projects Utility Total Estimated Costs Water $ 51,958,164 Sewer 121,698,225 Total $173.656.389 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 $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 $97.335.618 ~.~ ff~92.2,,QOQ ~ $700~000 Source Capital Improvement Program for F~scal Years 2004-2009 A-55 The Lake Gaston Project A portion of the C~ty's Lake Gaston Water Supply Project is located within 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 Hydroelectric Project hcense expired in January 2001, since then, however, Dominion has continued to legally operate it by reason of the fact that FERC ~s required by law to ~ssue one-year extensions of a hydropower hcense when the rel~cens~ng process extends beyond the expiration date of the original hcense In contrast to the adversarial proceedings that characterized the permitting of the City's Lake Gaston Project, the rehcens~ng process has been a far more cooperative process among the various stakeholders, includ~ng North Carolina and Virginia Beach The stakeholders have negotiated a multi- party settlement agreement that ~ncludes terms and conditions of a new license for the operation of Gaston and Roanoke Rapids Reservoirs If FERC determines that the terms and conditions in the settlement agreement comply with the requirements of law and are ~n the overall pubhc interest, ~t wdl ~ssue a new hcense w~th a term of thirty or forty years, thereby resolwng the rema~mng regulatory issues and uncertainties ~nvolving the Lake Gaston Project Insurance The C~ty utdizes a combination of commercial ~nsurance and self-~nsurance to protect ~ts assets, including employees, money and securities and buildings and equipment. City buddings and their contents are covered by an all risk property ~nsurance program which ~s written w~th a $100,000 per occurrence deductible Other types of property ~nsurance are written with deductibles ranging from $5,000 to $50,000 and include coverage for such items as computer equipment, heavy contractor's type equipment, fine arts and valuable papers All City employees are bonded for $1,000,000 The City is primarily self-insured for the first $2,000,000 of any automobile liabihty, commercial general liability, public officials' liability and police professional liability claims The City has $10,000,000 of commercial ~nsurance coverage above th~s self-~nsured retention on these hnes of risks The C~ty ~s also primarily self-~nsured for workers' compensation and carries commercial ~nsurance ~n excess of any claims totaling $500,000 in any single occurrence The City'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 size of this fund as of July 1, 2003, was $12,024,440, which represented the d~scounted hablhty of the City Commitments and Contingencies The City participates in 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 representabves Furthermore, the U S Congress passed legislation called the "Single Audit Act Amendment of 1996" which required most governmental recipients of federal assistance to have an annual ~ndependent orgamzabon-w~de financial and comphance audit The results thereof are ~ncorporated in 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 disallowed 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 parhc~pate ~n the V~rg~n~a Rebrement System ("VRS"), and substanbally all of the full-bme salaried general government and school employees are covered by a rebrement 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 insufficient 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 CIty's contnbubons are actuanally determined by the VRS every two years at rates that provide for both normal and accrued funding habdlty The VRS basis calculation method ~s an entry age normal cost calculabon with 30 year amort~zabon of the unfunded accrued habihty The entry age normal cost method ~s designed to produce normal costs over the working lifetime of the part~c~pabng employees and to permit the amort~zabon of any unfunded liability over a period of years The unfunded liabd~ty arises 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 actuarial gains and losses, consbtutes the unfunded hab~lity The last actuanally computed I~abd~ty was determined as of June 30, 2000, and ~ncluded amounts for general government and school nonprofessional employees Total habil~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 is 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 (including 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 umons or trade or professional assoc~abons. However, the C~ty does not, and cannot under Virglma law, bargain collectively w~th any of its employees The V~rg~nia General Assembly has rejected several recent legislative proposals to authorize public employees to engage ~n collective bargaining Pubhc employees of Virglma or of any county, c~ty, or town in V~rgln~a do not have a legal right to strike Any such employee who engages ~n any orgamzed strike or w~llfully refuses to perform his/her duties shall, according to Virginia law, be deemed to have terminated his/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 opinion of Bond Counsel It is preliminary and subject to change prior to delivery of the Series 2003A Bonds C~ty of V~rgln~a Beach Development Authority V~rg~nla Beach, V~rglnla City of Virginia Beach Development Authority Public Facility Revenue Bonds~ Series 2003A Lad~es and Gentlemen We have examined the apphcable law, ~ncluding Chapter 643 of the V~rginia Acts of Assembly of 1964, as amended (the "Act"), and certified copies of proceedings and documents relating to the organ~zabon of the City of V~rg~nla Beach Development Authority (the "Authority"), and the ~ssuance and sale by the Authority of its $ Public Facihty Revenue Bonds, Ser~es 2003A (the "Bonds") Reference is made to the form of the Bonds for ~nformabon concerning their details, including payment and redempbon prows~ons, their purposes and the proceedings pursuant to which they are ~ssued Terms used but not defined herein 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 Authority and , 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 with the Master Trust Agreement, the "Trust Agreement"), in order to provide funds to undertake the Series 2003A Project at the request of the City of Virg~n~a Beach, Virgin~a (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 Authority has agreed, subject to appropnabon as descnbed below, to ~ssue the Bonds to finance the Ser~es 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 interest on the Bonds Without undertaking to venfy the same by independent ~nvesbgat~on, we have rehed on certlflcabons by representatives of the Authority and the C~ty as to certain facts relevant to both our opinion and requirements of the Internal Revenue Code of 1986, as amended (the "Code") The Authority 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 t~mely payment to the Un~ted States of any arbitrage rebate amounts w~th respect to the Bonds, all as set forth ~n the proceedings and documents relating to the ~ssuance of the Bonds (the "Covenants"). Based on the foregoing, and assuming due author~zabon, execubon and dehvery of the Documents (as hereinafter defined) by the Trustee, we are of the op~n~on that 1 The Authority is a polibcal subdivision of the Commonwealth of V~rgwnwa 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 in accordance with the Act and constitute vahd and binding limited obligations of the Authority payable as to both prmcwpal and interest solely from Annual Payments, certain Addibonal 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 Virginia or any political subd~wslon thereof, Includ~ng the Authority and the City 3 The Trust Agreement, the F~rst Supplemental Agreement and the Support Agreement (the "Documents") have been duly authorized, executed and dehvered by, and constitute vahd and b~nd~ng obhgat~ons of, the Authority and the C~ty, as applicable, 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 City Council of the C~ty making annual appropnabons for such purpose Such obhgabon does not constitute 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 hen 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 r~ghts of holders of the Bonds and the enforceablhty of such rights, ~nclud~ng the enforcement by the Trustee of the obligations of the Authority and the City under the Documents, as applicable, may be hm~ted or otherwise affected by (a) bankruptcy, insolvency, reorgan~zabon, moratorium, fraudulent conveyance and other laws affecbng the r~ghts of creditors generally and (b) pnnc~ples of equity, whether considered at law or ~n equity. 5 Under current law, ~nterest, ~nclud~ng accrued original ~ssue d~scount ("OLD"), on the Bonds (a) is not ~ncluded ~n gross ~ncome for Federal income tax purposes and (b) ~s not an ~tem of tax preference for purposes of the Federal alternabve m~n~mum income tax ~mposed on ~nd~wduals and corporahons, however, w~th respect to corporabons (as defined for federal ~ncome tax purposes) subject to the alternabve minimum Income tax, such interest, including accrued OlD, ~s taken tnto account tn 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 comphance subsequent to the ~ssuance of the Bonds w~th all requirements of the Code that must be sabsfied ~n order that ~nterest on the Bonds not be ~ncluded ~n gross ~ncome for Federal ~ncome tax purposes Failure 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 "OII3 Bonds"), the d~fference between (~) the stated principal amount of each maturity of the OlD Bonds and (.) the ~n~t~al offering price to the pubhc (excluding bond houses and brokers) at which a substanbal amount of such matur~bes of OlD Bonds ~s sold w~ll consbtute OlD, OlD w~ll accrued for Federal income tax purposes on a constant y~eld-to-matunty method, and a holder's bas~s ~n such a Bond w~ll be ~ncreased by the amount of OI13 treated for Federal income 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 interest on the Bonds Further, we express no opinion as to the treatment for Federal ~ncome tax purposes of any interest paid on the Bonds in the event of nonappropnabon by the C~ty 6 Under current law, interest, including accrued OlD, on the Bonds ~s exempt from ~ncome taxation by the Commonwealth of V~rglma and any poht~cal subdivision thereof Our services as bond counsel to the Authority have been limited to rendering the foregoing op~n~on 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 ab~hty or w~lhngness of the City to make Annual Payments or the accuracy or completeness of any ~nformabon, ~nclud~ng the Author~ty's Prehm~nary Official Statement dated ,2003, and ~ts Official Statement dated ,2003, that may have been rehed upon by anyone ~n making the dec~sion to purchase Bonds Very truly yours, APPENDIX D FORM OF CONTINUING DISCLOSURE AGREEMENT CONTINUING DISCLOSURE AGREEMENT Th~s CONTINUING DISCLOSURE AGREEMENT dated ,2003 (the "Disclosure Agreement"), is executed and dehvered by the C~ty of V~rg~ma Beach, V~rglma (the "City"), ~n connecbon w~th 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 City 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 Series 2003A Bonds and ~n order to assist the purchasers of the Series 2003A Bonds ~n complying w~th the prowsions 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 matenal event nobces required by the Rule (collecbvely, "Conbnu~ng D~sclosure") Section 2. Annual Disclosure. (a) The City shall prowde annually certain financial information and operating data in accordance with the prowslons of Section (b)(5)(0 of the Rule as follows' (0 audited financial statements of the C~ty, prepared ~n accordance w~th generally accepted accounting principles, and (,) the operating data with respect to the City of the type described ~n the section 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 C~ty shall file such statements as audited when available (b) The C~ty shall prowde annually the financial ~nformabon and operabng data described ~n subsection (a) above (collectively, the "Annual Disclosure") within 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 information repository ("NRMSIR") and to the appropriate state information depository if any then exists ("SID") (c) Any Annual Disclosure may be ~ncluded by specific reference to other documents previously provided to each NRMSIR and to the SID or filed w~th the SEC, provided, however, that any final official statement incorporated by reference must be available from the Municipal Secunbes Rulemaklng Board (the "MSRB") (d) The C~ty shall prowde in a bmely manner to each NRMSIR or the MSRB and to the SID nobce specifying any failure of the C~ty to prowde the Annual D~sclosure by the date specified Section 3. Event Disclosure. The City shall provide ~n a timely manner to each NRMSIR or the MSRB and to the SID notice of the occurrence of any of the following events with respect to the Series 2003A Bonds, ~f material (a) pnnclpal and ~nterest payment dehnquenc~es, (b) non-payment related defaults; (c) unscheduled draws on debt service reserves reflecbng financial d~fficulties, (d) unscheduled draws on any credit enhancement reflecbng financial d~fficulbes, (e) substitution of credit or liquidity providers, or their failure to perform, D-1 (f) adverse tax opimons or events affecting the tax-exempt status of the Series 2003A Bonds, (g) mod~flcabons to rights of Bondholders, (h) bond calls, defeasance of all or any porbon of the Series 2003A Bonds, release, substitution, or sale of property secunng repayment of the Series 2003A Bonds, and (k) rating changes Section 4. Termination. The obl~gabons of the C~ty w~ll terminate upon the redempbon, defeasance (w~thin the meamng of the Rule) or payment in full of all the Series 2003A Bonds Section 5. Amendment. The C~ty may modify its obhgabons hereunder without the consent of Bondholders, prowded that th~s D~sclosure Agreement as so modified comphes w~th the Rule as ~t exIsts at the bme of mod~flcabon The C~ty shall w~th~n a reasonable time thereafter send to each NRMSIR and the SID a descnpbon of such mod~flcabon(s) Section 6. Defaults. (a) If the C~ty fa~ls to comply w~th any covenant or obligation regarding Continuing Disclosure specified in th~s D~sclosure Agreement, any holder (within the meamng of the Rule) of Series 2003A Bonds then outstanding may, by notice to the City, proceed to protect and enforce its rights and the rights of the holders by an action for specific performance of the C~ty's covenant to prowde the Conbnulng Disclosure, (b) Notwithstanding anything here~n to the contrary, any failure of the C~ty to comply w~th any obhgabon regarding Continuing Disclosure specified ~n this D~sclosure Agreement (0 shall not be deemed to constitute an event of default under the Senes 2003A Bonds or the Agreement of Trust, as defined ~n the Series 2003A Bonds, prowd~ng for the ~ssuance of the Series 2003A Bonds and (.) shall not give rise to any right or remedy other than that described in Section 6(a) above Section 7. Additional Disclosure. The C~ty may from brae to bme d~sclose certain ~nformabon and data ~n add~bon to the Conbnu~ng D~sclosure Notwithstanding anything here~n to the contrary, the C~ty shall not ~ncur any obhgation to conbnue to prowde, or to update, such add~bonal ~nformabon or data Section 8. Counterparts. Th~s D~sclosure 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 ~nstrument Section 9. Governing Law. Th~s D~sclosure Agreement shall be construed and enforced in accordance with the laws of the Commonwealth of V~rg~n~a CITY OF VIRGINIA BEACH, VIRGINIA By Mayor, C~ty of Virginia Beach, Virginia By C~ty Manager, C~ty of Virgima Beach, Virg~ma 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 w~ll be ~ssued as fully-registered secunbes 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 certificate will be ~ssued for each maturity of the Bonds, each ~n the aggregate principal amount of such matunty, and w~ll be deposited w~th DTC DTC, the world's largest depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" w~thln the meaning of New York Banking Law, member of the Federal Reserve System, a "cleanng corporabon" w~thin the meaning of the New York Un~form Commercial Code, and a "cleanng agency" registered pursuant to the prowslons of Section 17A of the Securities Exchange Act of 1934 DTC holds and provides asset servicing for over 2 million ~ssues of U S and non-U S equity issues, corporate and mumc~pal debt ~ssues, and money market ~nstruments from over 85 counties that DTC's parbc~pants (the "D~rect Participants") deposit w~th DTC DTC also facd~tates the post-trade settlement among D~rect Parbc~pants of sales and other secunbes transacbons ~n deposited secunbes, through electronic computerized book-entry transfers and pledges between D~rect Parbc~pants' accounts This ehmmates the need for physical movement of secunbes cerbflcates D~rect Parbc~pants ~nclude both U S and non-U S secunbes brokers and dealers, banks, trust compames, cleanng corporations, and certain other orgamzabons DTC ~s a wholly-owned subsidiary of The Depository Trust & Clearing Corporabon ("DTCC") DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Secunt~es Cleanng Corporabon, Government Secunties Cleanng Corporabon, MBS Clearing 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 Nabonal 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 compames, and clearing corporations that clear through or maintain a custodial relabonship with a D~rect Participant, e~ther d~rectly or ~nd~rectly (the "Indirect Participants") DTC has Standard & Poor's h~ghest rating AAA The DTC Rules apphcable to ~ts Participants are on file w~th the Secunbes and Exchange Commission More ~nformabon about DTC can be found at www dtcc corn Purchases of the Bonds under the DTC system must be made by or through D~rect Participants, 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 in turn to be recorded on the D~rect and Indirect Participants' records Beneficial Owners wdl not receive wntten conflrmabon from DTC of their purchase Beneficial Owners are, however, expected to receive wntten conflrmabons prowd~ng detads of the transacbon, as well as periodic statements of their holdings, from the D~rect or Indirect Parbc~pant through which the Beneficial Owner entered ~nto the transacbon Transfers of ownership interests ~n the Bonds are to be accomplished by entries made on the books of D~rect or Indirect Participants acting on behalf of Beneficial Owners Beneficial Owners wdl not receive cerhflcates represenbng their ownership ~nterests ~n the Bonds, except ~n the event that use of the book-entry system for the Bonds ~s disconbnued To facd~tate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered ~n 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_,-! reg~strabon ~n the name of Cede & Co or such other DTC nominee do not effect any change in 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 Participants 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 Parhcipants, by D~rect Participants to Indirect Participants, and by Direct Parbc~pants and Indirect Parbclpants to Beneficial Owners w~ll be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to bme Redempbon nobces shall be sent to DTC If less than all of the Bonds are being redeemed, DTC's pracbce ~s to determine by lot the amount of the ~nterest of each Direct Parbc~pant ~n such issue 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 authorized by a D~rect Parbc~pant in accordance w~th DTC's Procedures Under ~ts 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 vobng 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) Pnnclpal 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 pracbce ~s to credit Direct Parbcipants' 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 Parhcipants to Beneficial Owners w~ll be governed by standing ~nstrucbons and customary practices, as ~s the case w~th secunbes 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 t~me to time Payment of principal, premium, if any, and ~nterest to Cede & Co. (or such other nominee as may be requested by an authorized representabve of DTC) ~s the respons~bihty of the Authority or the Trustee, d~sbursement of such payments to D~rect Participants shall be the respons~blhty 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~scontinue providing ~ts services as secunbes depository w~th respect to the Bonds at any bme by g~v~ng reasonable notice to the Authonty or the Trustee Under such c~rcumstances, ~n the event that a successor secunbes depository ~s not obtained, Bond cerbflcates w~ll be pnnted and dehvered The Authority, at the d~recbon of the City, may decide to disconbnue use of the system of book- entry transfers through DTC (or a successor secunbes depository) In that event, Bond certificates w~ll be pnnted and dehvered The ~nformabon ~n th~s secbon concermng DTC and DTC's book-entry system has been obtained from sources that the Authority and the C~ty believe to be rehable, but the Authority and the C~ty take no respons~b~hty 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 F-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 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 securities 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 22764 000254 RICHMOND 1031095v7 E-3 - 36- Item V-M. PLANNING ITEM # 51593 1. CITY ZONING ORDINANCE Re height regulations 2. CITY ZONING ORDINANCE AMEND Sections 111,225.1,601,901 and 1521 re Bed and Breakfast Inns as a CUP 3. GREGOR Y NELSON CONDITIONAL USE PERMIT 4.STEVEN WRA Y O'NEAL NONCONFORMING USE 5. PA TIO ENCLOSURES NONCONFORMING USE 6. ST. NICHOLAS CATHOLIC CHURCH MODIFICATION OF CONDITIONS Conditional Use Permit (Adopted: April 8, 2003) 7. NICHOLSON, INC. MODIFICATION of Indian Lakes PD-H1 Land Use Plan 8. SAIR ENTERPRISES, INC. 9. D. W. GA TLING, INC. MODIFICATION OF A CONDITIONAL USE PERMIT (Approved: February 13, 2001) CONDITIONAL CHANGE OF ZONING CONDITIONAL USE PERMIT 10. EXXON MOBIL CORPORA TION CONDITIONAL USE PERMIT 11. ALL TEL COMMUNICATIONS, INC. CONDITIONAL USE PERMIT 12. SALT MEADOW BA Y, L.L.C. STREET CLOSURE August 26, 2003 -37- Item V-M. PLANNING ITEM # 51594 Upon motion by Vtce Mayor Jones, seconded by Counctl Lady Wdson, City Counctl APPROVED IN ONE MOTIONItems 1, 6, 7, 8 (AS REVISED), 9a/b, 11 (REFERRED BACK TO PLANNING COMMISSION), and 12 of the PLANNING B Y CONSENT AGENDA Item M 8 (SAIR) was ADOPTED, WITH REVISED CONDITIONS, B Y CONSENT Item M 11 (ALL TEL) was REFERRED BACK TO THE PLANNING COMMISSION, BY CONSENT Vottng I 1-0 (By ConsenO Counctl Members Vottng Aye Harry E Dtezel, Margaret L Eure, Vtce Mayor Louts R Jones, Reba S McClanan, Rtchard A Maddox, Mayor Meyera E Oberndorf, .Ism Reeve, Peter W Schmtdt, Ron A Vtllanueva, Rosemary Wtlson and James L Wood Counctl Members Vottng Nay None Counctl Members Absent None Council Lady McClanan voted a VERBAL NAY on Item M 1 (CZO re hetght regulattons) August 26, 2003 - 38- Item V-M. 1. PLANNING ITEM # 51595 Upon motton by Vtce Mayor Jones, seconded by Counctl Lady Wtlson, Ctty Counctl ADOPTED: Ordtnance to AMEND the Ctty Zontng Ordtnance (CZO) re height regulations affecting atr navtgatton Vottng 10-1 (By ConsenO Counctl Members Vottng Aye Harry E Dtezel, Margaret L Eure, Vtce Mayor Louts R Jones, Rtchard A Maddox, Mayor Meyera E Oberndorf, Jtm Reeve, Peter W Schmtdt, Ron A Vtllanueva, Rosemary Wtlson and James L Wood Council Members Vottng Nay Reba S McClanan Counctl Members Absent None August 26, 2003 10 11 12 13 14 15 16 17 18 19 20 21 22 23 AN ORDINANCE TO AMEND THE CITY ZONING ORDINANCE PERTAINING TO HEIGHT REGULATIONS AFFECTING AIR NAVIGATION SECTION AMENDED: ~ 202 OF THE CZO 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 artificial structure or tree or other natural growth which on the basis of its height would constitute an obstruction to air navigation pursuant to Part 77 of the Federal Aviation 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 Administration Regulations, 14 C.F.R. ~ 77.21 et. seq. Adopted by the City Council of the City of Virginia Beach, Virginia, on this 26th day of August, 2003. CA-8899 Ordln/Proposed/czo0202ord.wpd R2 - June 10, 2003 Item V-M.2. - 39- PLANNING ITEM # 51596 Anthony Offredt, 2416 Arcttc Avenue, Phone 491-8985, represented self and netghbors and was not tn OPPOSITION to bed and breakfast Inns, but stated commerctal tntruston should be prohtbtted tn stable netghborhoods MaryAnne Ntxon, 607 1~h Street, Prestdent of the Resort Beach Ctvtc League and Coahtton, expressed concern re tmpact upon Pactfic Avenue, and the lake along 1 ~ Street, Norfolk Avenue and where the RT-3 (or apartmenO zonmg currently extsts The rematnder of the netghborhood ts zoned restdenttal Barbara Yates, 318 24tn Street, Phone 428-8052, Vtce President - Resort Beach Civic League, owner of Angte's Bed and Breakfast, regtstered tn OPPOSITION. Barbara Messner, Post Office Box 514, Phone 422-1902, spoke tn OPPOSITION Upon motion by Counctlman Maddox, seconded by Councilman Reeve, Ctty Council ADOPTED Ordtnance to AMEND ~ lll 225 1, 601, 901 and 1521 of the Ctty Zontng Ordmance (CZO) to allow Bed and Breakfast Inns as a Conditional Use tn certatn Apartment, Bustness and Resort Tourtst Dtstrtcts, and, FURTHER AMEND the spectfic condtttons for Bed and Breakfast Inns Vottng 11-0 Counctl Members Vottng Aye Harry E Dtezel, Margaret L Eure, Vtce Mayor Louts R Jones, Reba S McClanan, Rtchard A Maddox, Mayor Meyera E Oberndorf, Jim Reeve, Peter W Schmtdt, Ron A Vtllanueva, Rosemary Wilson and James L Wood Counctl Members Vottng Nay None Counctl Members Absent None August 26, 2003 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 practice 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 building within an Historic and Cultural District A primary residential structure of historical 29 30 31 32 33 34 35 36 37 38 39 4O 41 42 43 44 45 46 47 48 49 50 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 without board 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 mery shall be provided in addition to lodging units. The operator, or his designated representative who is responsible for the premises, shall be available on the premises while it is open for use. Such owner or manager 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 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 (3) Food and beverages nra7 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 cultural review ~oard that =~e=~, F=~Fuo=~ s nage ~o appropriate to the~-~a~=== and appearance ok the 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 council if food service serving capacity exceeds the number of lodging units. Parking 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 9O 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, design or method of construction, represents the work of a recognized master, or possess high artistic values. (8) Maximum length of stay for a transient paying guest 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. 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 Virginia 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 opportunities 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 similar type of use allowed in Agricultural Districts. They're called Country Inns. So, that's why the Agricultural Districts are not included in this 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 there 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 historical significance. But, I think after our discussion 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 thts morning we talked about striking the part dealing with 50 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, in the definition of bed and breakfast inn at least 50 years old on line 28 & 29. Stephen White: Thank you Ronald Ripley: Okay. Is there any discussion by the Commission? Robert Miller: We have a speaker Ronald Ripley: 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 Chairman. Commission members. I'm Stephen LaFond. I'm at 400 16th Street. I'm a proud owner of the Barkley Cottage. I purchased it from Peter Captainese on May 15th I was a bit surprised to see the change in the zoning regulation. After reading it ! 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 is the way the ordinance is drafted. In a bed and breakfast as I understand it and the research that I did before we purchased the Barkley Cottage, a bed and breakfast is a place where you get a bed and a breakfast One of the things that I find missing from your ordinance is 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 live 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 is open at two o'clock in 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 dining 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 into a bed and breakfast. I think you need a separate classification that you might call an inn much like a Holiday 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 it says, bed and breakfast The historic significance 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 having bed and breakfast in homes that were built today, and that doesn't make too much sense to me. I think if you had put in a year like 1920, prior to 1930 or something like that, and then made it for historic architectural or cultural significance, then I think you got yourself a pretty decent product. Also, I'm concern that right now your definition in lines 28, 29 & 30 as pointed out by Counsel, does not coincide with all the information in Subsection 7 of Section 225.1 I think you should in your definition put something to the fact that it's architecturally, culturally, and historically significant. Those were my objections, but otherwise it's a good deal. Ronald Ripley: 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 Offredi: 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 Artic Avenue. I justhave 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 Offredi: It will be house by house. So, if I 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 Ripley: 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 Rlpley: This is sort of one of the first ones Item # 18 City of Virginia Beach/Ordinance Amendment Page 4 Anthony Offredi: 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 including 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 Rlpley: 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 applicant 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 is 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 conditions9 Is that something that is covered under other codes9 Faith Christie: I don't know. The bed and breakfast that ! 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 ideasV 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 m 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 Ripley' 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 it 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 hke 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 professional 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 is what we would like to encourage. Ronald Ripley: 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 Rlpley' 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 typically 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 Rlpley: Thank you for your input Stephen LaFond. If there are any other questions, I'll be happy to answer them. l've done an awful lot of research on this before I bought this 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. Angle'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 mght There are other places like Gallagher's is right around the corner from us. They don't have bed and breakfast. Robert Miller. Isn't there a song similar called "Nothing Succeeds like Success". Congratulations. Stephen LaFond: Thanks. I welcome more of them We could refer a whole bunch of people. Ronald Rlpley Thank you very much. Alnght, 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 lt. When you have a residence in this area on a lot what set back requirements are going to be followed9 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 Rlpley: Okay. Joseph Strange: I have a question. Ronald Rlpley 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 breakfast9 Stephen LaFond: To tell you the truth Mr Strange, many different cities 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 Tomhn, Connecticut. That goes way back to revolutionary times much as many those around here do And, Tomlin d~dn'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 ~s uncharted ground. Each c~ty does things differently. I have not checked with Norfolk I know there ~s a new, basically two new inns that were set up there, the Page House and the Freemason Inn. Bob Epstein ~s doing that and apparently both of them are dmng 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 V~rglnia Beach but there really aren't places to do that. Ronald Ripley: Are there any other questions or comments9 Jan, did you have a comment9 Jamce Anderson: Yeah. I have to be ~n agreement I think if you're going to call it a bed and breakfast then you're going to put "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 prowdes 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 in 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 Robert Miller: When you change to breakfast, you fixed it Jamce Anderson: Okay. Well, I think in three ~t 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 onsite 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 living 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 part? Stephen LaFond: My wife and I do go out shopping once in a while. Kay Wilson: Stephen and I have been rewording. For the definition 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 daily or weekly terms with breakfast being served." That's your definition Ronald Ripley' Did you cover the management9 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, "liwng 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. Charhe Salle': Okay. Kay Wilson: Shall be on site and available 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 ~t 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 smd that we had to serve breakfast and you have to have an ons~te manager Those were the changes that will accomplish that. Ronald Ripley. Unless it's something new9 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 th~nk you need to address that. Item # 18 City of Virg~ma 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 Ripley. Okay. Jan did you want to make a motion on this? Janice 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 ~nclude 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: Jan9 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. Janice 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 Katslas: Yes. Ed Weeden: Mr Knight9 Barry Knight' Yes. Ed Weeden: Mr. Miller? Robert Miller: Yes. Item # 18 City of Virginia Beach/Ordinance Amendment Page 11 Ed Weeden: Mr. Ripley9 Ronald Rlpley' Yes Ed Weeden. Mr. Salle'? Charlie Salle: Yes. Ed Weeden: Mr. Stranger 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 wor&ng, 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 ~t worked out - 40- Item V-M.$. PLANNING ITEM # 5159 7 Gregory Nelson, 5710 Meer Street, Phone 422-0390, represented hts apphcatton, the Bed and Breakfast wtll not be owner-occupted Mr Nelson wtll htre a Manager wtth bed and breakfast expertence who will restde on the premises There wtll be rune (9) rooms avatlable for compensatton wtth one addtttonal for the Manager Each room wtll have a spa treatment Anthony Offre&, 2416 Arcttc Avenue, Phone 491-8985, adjacent restdent, represented selfand netghbors, and adjacent restdent, regtstered tn OPPOSITION Upon motton by Counctlman Maddox, seconded by Councdman Reeve, Ctty Counctl ADOPTED with ADDED CONDITIONS, Ordinance upon apphcatton of GREGORY NELSON for a Condtttonal Use Permtt re a Bed and Breakfast Inn ORDINANCE UPON APPLICATION OF GREGORY NELSON FOR A CONDITIONAL USE PERMIT FOR A BED AND BREAKFAST R080331121 BE IT HEREBY ORDAINED B Y THE COUNCIL OF THE CITY OF VIRGINIA BEACH, VIRGINIA Ordmance upon apphcatton of Gregory Nelson for a Condtttonal Use Permtt for a bed and breakfast on property located at 2420 Arcttc Avenue (GP[N 2427-52744) DISTRICT 6 - BEACH The followtng conchttons shall be requtred &te and buddtng improvements shall be substanttally as submttted Modtficattons may, however, be made to the plans, tf necessary due to actton of the Board of Zomng Appeals related to vartance requests Any such changes shall be submttted to the Director of Plannmg for approval There shall be no more than rune (9) rooms avatlable for compensation One addtttonal room may be provtded for an on- stte manager Food service shall be hmtted to breakfast and a menu of sandwtches, salads, soups, frutt, cheese plates and snacks provtded for the guests of the Inn Promottonal spectals, such as oyster roast, crab ptcktng or wtne tasttng, are permttted, provtded the spectal ts only avatlable to the patrons of the Inn Stgnage shall be hmtted to one (1) tdenttficatton stgn no more than rune (9) square feet tn area There shall be no other stgnage tn or on the wtndows, doors or extertor of the butldtng other than emergency or dtrecttonal stgns that may be requtred by the Butldtng Code Offictal Occupancy shall be hmtted to twenty-five (25) tnclucltng the on- site manager August 26, 2003 - 42 - Item V-M. 4. PLANNING ITEM # 51598 Steven Wray 0 'Neal represented hts apphcatton Upon morton by Counctlman Dtezel, seconded by Counctlman Schmtdt, City Councd DEFERRED INDEFINITELY, Ordmance upon apphcatton of STEVEN WRAY O'NEAL for the expanston of a Nonconforming Use Or&nance upon apphcatton of Steven Wray O'Neal for the Expanston of a Noncon_formtng Use on property located at 420 Davts Street (GPIN 1467490320) DISTRICT 4 - BA YSIDE Vottng 11-0 Counctl Members Vottng Aye Harry E Dtezel, Margaret L Eure, Vtce Mayor Louts R Jones, Reba S McClanan, Rtchard A Maddox, Mayor Meyera E Oberndorf, Jtm Reeve, Peter W Schmtdt, Ron A Vtllanueva, Rosemary Wilson and James L Wood Counctl Members Vottng Nay None Counctl Members Absent None August 26, 2003 - 43 - Item V-M. 5. PL/INNING ITEM # 51599 The followtng spoke tn SUPPORT: Edward L Campbell, 1004 Sorta Ctrcle, Phone 721-2068, represented the apphcant, Phthp M Decker, who ts destrtng to construct a sun room Tom Rtpperger, 116 Harbor Crescent, Phone 898-8494, represented the apphcant The followtng registered tn OPPOSITION: Billy Almond, 209 - 70tn Street, Phone 422-9522, represented the North Vtrgtnta Beach Ctvtc League and advtsed the survey ts anttquated wtth a self imposed hardshtp Upon motton by Counctlman Wood, seconded by Counctlman Dtezel, Ctty Counctl DEFERRED INDEFINITEL Y, Ordmance upon apphcatton of P~ITIO ENCLOSURES, INC for the expansion of a Nonconforming Use: Ordtnance upon Apphcatton of Patto Enclosures, Inc for the Expanston of a Noncon_formtng Use on property located at 204 B 75th Street (GPIN 24196628250002) DISTRICT 5 - LYNNHA VEN Vottng 11-0 Counctl Members Votmg Aye Harry E Dtezel, Margaret L Eure, Vtce Mayor Louts R Jones, Reba S McClanan, RtchardA Maddox, Mayor Meyera E Oberndorf, Jtm Reeve, Peter W Schmtdt, Ron A Vtllanueva, Rosemary Wilson and James L I~ood Counctl Members Vottng Nay None Counctl Members Absent None August 26, 2003 - 44 - Item V-M. 6. PLANNING ITEM # 51600 Upon motton by Vtce Mayor Jones, seconded by Counctl Lady Wtlson, Ctty Counctl MODIFIED Condtttons of the Ordtnance upon apphcatton of ST. NICHOLAS CATHOLIC CHURCH on a Use Permtt re a Columbarium (approved by Ctty Councd on Aprtl 8, 2003) The apphcant wtshes to add addtttonal length to a wall mounted coIumbartum, for the tnternment of human rematns Ordtnance upon Apphcatton of St Ntcholas Cathohc Church for a Modtficatton of Condtttons to a Condtttonal Use Permtt for a columbartum approved by City Counctl on Aprtl 8, 2003 Property ts located at 712 Ltttle Neck Road (GPIN 1488805079) DISTRICT 5 - L YNNHA VEN The following condtttons shall be requtred The condtttons attached to the ortgtnal Condtttonal Use Permtt and the four (4) subsequentpermtts granted by City Counctl shall rematn tn effect wtth the addttton of the Columbartum to the stte, excepttng that the length of the wall shall be modtfied not to exceed stxty (60) feet tn length The Columbartum shall be located tn the area shown on the submttted site plan entttled "Satnt Ntcholas Cathohc Church Columbartum, "prepared by COMPO Constructton Company, dated January 13,2003 The wall shall be constructed of brtck and mortar wtth all ntches factng the church butldtng as deptcted on the submttted elevatton entttled, "Columbartum for St Ntcholas Cathohc Church, Vtrgtma Beach, Vtrgtnta, "prepared by Barnes Destgn Group Thts Or&nance shall be effective tn accordance wtth Sectton 107 (f) of the Zoning Or&nance Adopted by the Council of the City of Vtrgmta Beach, Vtrgtma, on the Twenty-stxth of August, Two Thousand Three Vottng 11-0 (By ConsenO Counctl Members Vottng Aye Harry E Dtezel, Margaret L Eure, Vice Mayor Louts R Jones, Reba S McClanan, RtchardA Maddox, Mayor Meyera E Oberndorf Jtm Reeve, Peter W SchmMt, Ron A Vtllanueva, Rosemary Wtlson and James L Wood Council Members Vottng Nay None Counctl Members Absent None August 26, 2003 - 45 - Item V-M. 7. PLANNING ITEM # 51601 Upon motton by Vtce Mayor Jones, seconded by Councd Lady Wdson, Ctty Counctl ADOPTED an Ordtnance upon apphcatton of NICHOLSON, INC. for a Modification of the Indian Lakes PD-H1 Land Use Plan to allow a mini-storage facilit.: ORDINANCE UPON APPLICATION OF NICHOLSON, INC FOR A MODIFICATION OF THE INDIAN LAKES PD-H1 LAND USE PLAN TO ALL 0 W A MINI-STORA GE FA CILITY Z08032152 BE IT HE. BY ORDAINED B Y THE COUNCIL OF THE CITY OF VIRGINIA BEACH, VIRGINIA Or&nance upon Apphcatton ofNtcholson, Inc for a Modtficatton qf the In&an Lakes PD-H1 Land Use Plan for property located on the south side of Ferrell Parkway, approxtmately 950 feet west of In&an Lakes Boulevard (GPIN 146567105 7) DISTRICT 1 - CENTER VILLE The following con&tton shall be reqmred An Agreement encompasstng proffers shall be recorded wtth the Clerk of Ctrcutt Court Thts Orchnance shall be effecttve tn accordance wtth Section 107 09 of the Zomng Ordtnance Adopted by the Councd of the Ctty of Vtrgtnta Beach, Vtrgtnta, on the Twenty-stxth of August, Two Thousand Three Vottng 11-0 (By ConsenO Counctl Members Vottng Aye Harry E Dtezel, Margaret L Eure, Vice Mayor Louts R Jones, Reba S McClanan, RtchardA Maddox, Mayor Meyera E Oberndorf Jtm Reeve, Peter W Schmtdt, Ron A Vtllanueva, Rosemary Wilson and James L Wood Counctl Members Vottng Nay None Counctl Members Absent None August 26, 2003 FOruM NO P S City of Virginia Beach I NT ER-0 FFI CE C ORR ES PO ND ENCE In Reply Refer To Our File No. DF-5754 DATE: August 14, 2003 TO: Leslie L. Lilley~x__~ DEPT: City Attorney FROM: B. Kay WilsonTM 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 SY[[$, ~OURDON NICHOLSON, INC., a Virgima corporation PARKWAY PARCEL, L.L.C., a Virginia limited liability company TO (PROFFERED COVENANTS, RESTRICTIONS AND CONDITIONS) CITY OF VIRGINIA BEACH, a municipal corporation of the Commonwealth of Virginia THIS AGREEMENT, made this 24th day of May, 2003, by and between NICHOLSON, INC., a Virginia corporation, Grantor, party of the first part; PARKWAY PARCEL, L.L.C., a Virgima limited liability company, party of the second part, Grantor; and THE CITY OF VIRGINIA BEACH, a municipal corporation of the Commonwealth of Virginia, Grantee, party of the third part. WITNESSETH: WHEREAS, the party of the second part is the owner of a parcel of property located in the Centerville District of the City of Virginia Beach, containing approximately 1.451 acres which is more particularly described in Exhibit "A' attached hereto and incorporated herein by this reference. Said parcel is herein and in Exhibit 'A' are herein referred to as the ~Property'; and WHEREAS, the party of the first part ~s the contract purchaser of the parcel described m Exhibit "A' and has imtiated a conditional amendment to the Zoning Map of the City of Virginia Beach, Virginia, by petition addressed to the Grantee so as to modify the PD-H1 Land Use Plan w~th a B-2 Commercial Designation apphcable to the Property; and WHEREAS, the Grantee's policy is to provide only for the orderly development of land for various purposes through zoning and other land development legislation; and GPIN: 1465-67-1057 PREPARED BY ~JYK[$. t~OUt~DON -~'~tERN & 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 said 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 rezonmg. NOW, THEREFORE, the Grantor, for itself, its successors, personal representataves, assigns, grantee, 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 or ,quid pro quo for zoning, rezoning, rote plan, budding permit, or subdivision approval, hereby make the following declaration of conditaons 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, asmgns, 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 in terms of vehicular access, parking, landscaping and budding orientation, the "CONDITIONAL USE PERMIT EXHIBIT OF INDIAN LAKES MINI STORAGE For Nicholson, Inc.", dated 4/30/03, prepared by Kellam-Gerw~tz Engineering, Inc., which has been exhibited to the Vlrgima Beach PREPARED BY 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 substantially 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 Virgirna Beach City Council and is on f'fie with the V~rginia Beach Department of Planning ("RenderingS). 3. Further condlttons may be required by the Grantee during detailed Site Plan review and administratxon of applicable City Codes by all cognizant City agencies and departments 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 comprehensive 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 m 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 adverttsed pursuant to the proxasions of Section 15.2-2204 of the Code of Virginia, 1950, as amended. Smd 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 Admn~strator of the City of V~rginia Beach, Virginia, shall be vested with all necessary authority, on behalf of the governing body of the City of V~rgima Beach, Virginia, to administer and enforce the foregoing conditions and PREPARED BY ~ S'YI(E$ I~OURDON AIIERN & LD, rY, P C restrictsons, including the authority (a) to order, in writing, that any noncompliance w~th such conditions be remedied; and (b) to bring legal action or suit to msure comphance with such conditaons, including mandatory or prohibitory injunction, abatement, damages, or other appropriate actaon, suit, or proceeding; (2) The fa_dure to meet all conditions and restnchons shall constitute cause to deny the issuance of any of the requxred 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 Zonmg 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 Zonmg 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 AtII~N & LB'Y PC WITNESS the following signature and seal: GRANTOR: Nicholson, Inc., a Virginia corporation By: :--~ ~ ~"~-~'~--- ---~ - (SEAL) Thomas H. Nlcholson, Jr., President STATE OF VIR~IA , to-wit: The foregoing instrument was acknowledged before me this 2003, by Thomas ~n, Jr., President of Nicholson, Mc°rp°ratl°n' _~~_J .~__~_ ~ ~ y Commission xplres: Inc., day of May, a Virgima PREPARED BY §YI(lr$. ]~OUt~DON 4tlERN & L~/Y PC WITNESS the following signature and seal: GRANTOR: PARKWAY PARCEL, L.L.C., a Virginia limiJ~d ' ' ' A. P. Nero, Member (SEAL) STATE OF VIRGINIA ~, CITY OF (.~.71~ a:~ a ,~?-~L , 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 VLrginia limited liability company. Notary Public My Commission Expires: Z-Z/--~: L/ PREPARED BY .-'3~J SYKI:S. I~OL~I)ON ~IlF_~N & [~ry PC EXHIBIT ~A' ALL THAT certain lot, p~ece 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 subdivision 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., winch plat is duly recorded in the Clerk's Office of the Circuit Court of the City of Virgirna Beach, Virginia, in Map Book 301, at Pages 59 and 60. GPIN: 1465-67-1057 CONDREZO~/NICHOLSON/PARKWA~CE/PROFFER - 46- Item V-M. 8. PLANNING ITEM # 51602 Upon motton by Vtce Mayor Jones, seconded by Counctl Lady Wtlson, Ctty Counctl ADOPTED, wtth REVISED CONDITIONS, an Ordinance upon apphcatton of SAIR ENTERPRISES, INC for a MODIFICATION of a Con&ttonal Use Permtt re an automobtle servtce statton (approved February 13, 2000 Ordtnance upon apphcatton of SAIR ENTERPRISES, INC for a MODIFICATION of a Conchttonal Use Permtt for an automobtle servtce station tn conjunctton wtth a conventence store and storage yard (approved February 13, 2001) Property ts located at 3096 South Lynnhaven Road (GPIN 1497107039) DISTRICT 3 - ROSE HALL The followtng condtttons shall be requtred 1 The stte shall substantially conform to the submttted prehmtnary stte plan tttled "PLAZA CITGO CARWASH and TWO (2) SERVICE BAYS, at 3096 South Lynnhaven Road, Vtrgtnta Beach, Va 23452 ", dated April 26, 2003, whtch ts on file tn the Ctty of Vtrgmta Beach Planntng Department, subject to the following condtttons In heu of the location of the trash dumpster as shown on the plan, the apphcant shall cooperate wtth staff durtng stte plan review to determtne a new locatton b Category IVscreentng shall be tnstalled along the enttre length of the property hne along Hospttal Drtve The street frontage screentng along South Lynnhaven Road shall exceed the requtrements of the Site Plan Or&nance, Sectton 5A The plants shall be a mtx of dense evergreen trees, such as Deodar Cedar or Leland Cypress, permitted street trees, and shrubs. Visibility for traffic along this high!v traveled roadwaF shall be maintained at all times. The two extsttng entrances on South Lynnhaven Road shall be closed and replaced wtth a stngle entrance Artght turn lane must be constructed along the full frontage of the site on South Lynnhaven Road to &hna Drtve The rtght turn lane taper shall be fifty (50)feet, and the corner radtus at South Lynnhaven Road and Sthna Drtve shall be thtrty-five (35)feet The extsttng entrances on Sthna Drtve shall be closed and replaced wtth a stngle entrance It shall be located so there ts a mtntmum fifty (50) foot tangent sectton between the end of the corner radtus at South Lynnhaven Road and the begtnmng of the entrance radtal return August 26, 2003 Item V-M. 8. -47- PLANNING ITEM # 51602 (Continued) The proposed butl&ng and canopy shall substanttally conform to the elevation tttled "S L YNNHA VEN ROAD ELEVATION" on the plan tttled "PLAZA CITGO CARWASH and TWO (2) SERVICE BAYS, 3096 South Lynnhaven Road, Vtrgmta Beach, Va 23452 ", dated Aprtl 26, 2003, and on file tn the Ctty of Vtrgtnta Beach Planntng Department The extsttng nonconformtng freestandmg stgn shall be removed and may be replaced wtth a conforming monument stgn The base of the sign shall be of the same brtck as the proposed butldtng All hghttng on the stte shall be conststent wtth those standards recommended by the Illumtnatton Engtneertng Soctety of North Amertca (IESNA) A photometrtc hghttng plan tndtcattng the number and types of hghttng wtll be submttted as part of the formal stte plan submtsston for revtew by the Pohce Department to determtne conststency wtth Crtme Preventton Through Envtronmental Destgn (CPTED) prtnctples and practtces Ltghttng shall be tnstalled and operated as shown on the approved plan Canopy hghttng shall constst of flush mounted fixtures on the cethng of the canopy All hghttng shall be dtrected tnward and downward wtthtn the stte so as to ehmtnate glare onto adjacent properttes and rtghts-of-ways Low level lighting in relation to adjacent residential properties on Hospital and South Lvnnhaven is mandato~ Automottve repatr shall be only the type as spectfically defined tn the Ctty Zontng Ordtnance under Sectton 111 Defintttons- Automobtle repatr estabhshment or Automottve Servtce Estabhshment 6 No outstde storage sale or repair of vehicles, auto parts or ttres will be permttted 7 All servtce work on vehicles shall be performed tnstde the butl&ng 8 No outstde speakers wtll be allowed 9 Hours ofoperattonfor the car wash shall be 6 O0 a m to 10 OOp m 10 &gns for the stte shall be hmtted to traffic control stgns, the monument stgn noted above tn Condttton Three, ai~d sucIi o,~,'iei- sigiis for the ~i-diSiaiice No stgns for the conventence store, other than one (1) business tdent~catton stgn, shall be tnstalled No stgns for the car wash and auto repair, other than one (1) business tdent~catton stgn, shall be tnstalled Stgns constructed of exposed neon shall not be mstalled on the conventence store or car wash, tncludtng on the wtndows so as to be vtstble from the pubhc rtght-of-way August 26, 2003 Item V-M. 8. - 48- PLANNING ITEM # 51602 (Continued) 11. No large rental trucks or trailers shall be parked on the lot. 12. Hours for convenience store shall be 24 hours and automotive repair shall be from 8:00 a.m. to 7:00p. m. 13. No outside vending machines ice boxes, merchandise displaFs, product signs are to be placed on the properS_ other than above stated. Proper location and screening for dumpster will be determined bY staff working with the applicant. This determination needs to be done verF careful!F to maintain appearance as well as convenience. Thts Ordtnance shall be effecttve tn accordance with Sectton 107 O0 of the Zontng Ordtnance Adopted by the Counctl of the Ctty of Vtrgtnta Beach, Vtrgmta, on the Twenty-stxth of August, Two Thousand Three Vottng. 11- 0 (By ConsenO Counctl Members Vottng Aye Harry E Dtezel, Margaret L Eure, Vtce Mayor Louts R Jones, Reba S McClanan, Richard A Maddox, Mayor Meyera E Oberndorf, Jtm Reeve, Peter W Schmtdt, Ron A Vtllanueva, Rosemary Wilson and James L Wood Council Members Vottng Nay None Counctl Members Absent None August 26, 2003 - 49 - Item V-M. 9. PLANNING ITEM # 51603 Upon motton by Vtce Mayor Jones, seconded by Councd Lady Wtlson, Ctty Counctl ADOPTED, Or&nantes upon apphcattons of D. W. GA TLING, INC for a Condtttonal Change of Zomng and Condtttonal Use Permtt ORDINANCE UPON APPLICATION OF D W GATLING, INC FOR A CONDITIONAL CHANGE OF ZONING DISTRICT CLASSIFICA TION FR OM R-5D RESIDENTIAL DUPLEX DISTRICT TO B-2 COMMUNITY BUSINESS DISTRICT Z08032153 BE IT HEREBY ORDAINED B Y THE COUNCIL OF THE CITY OF VIRGINIA BEACH, VIRGINIA Ordtnance upon Apphcatton of D W Gathng, Inc for a Change qf Zontng Dtstrtct Classt_ficatton from R-5D Restdenttal Duplex Dtstrtct to B-2 Communtty Bustness Dtstrtct on property located on the west stde of Oceana Boulevard, approxtmately 819 feet south of Beacons Reach Drtve (GPIN 2415488317) The Comprehenstve Plan recommends use of this property.[or restdenttal uses above 3 5 dwelhng untts per acre DISTRICT 6- BEACH The followtng con&tton shall be requtred 1 An Agreement encompasstngproffers shall be recorded wtth the Clerk of Ctrcutt Court AND, ORDINANCE UPON APPLICATION OF D W GA TLING, INC FOR A CONDITIONAL USE PERMIT FOR A SELF STORAGE FACILITY R080331122 BE IT HEREBY ORDAINED B Y THE COUNCIL OF THE CITY OF VIRGINIA BEACH, VIRGINIA Ordtnance upon Apphcatton of D W Gathng, Inc for a Condtttonal Use Permtt for a self storage facdtty on property located on the west stde of Oceana Boulevard, approxtmately 819 feet south of Beacons Reach Drtve (GPIN 2415485492, 2415486381, 2415488317) DISTRICT 6 - BEACH The followtng condtttons shall be requtred The parcels shall be developed and landscaped as deptcted on the concept plan entttled, "Allsafe Self Storage, Oceana Boulevard, Prehmmary Site Plan," prepared by The Spectra Group, dated 4/29/03, and as provtded for tn the conchttons below Streetscape landscaptng and foundatton landscaptng shall be tnstalled on the stte and shall meet the Ctty of Vtrgtnta Beach Parktng Lot Foundatton Landscaptng Spectficattons and Standards for street frontage landscapmg/foundatton screentng August 26, 2003 - 50 - Item V-M. 9. PL~4NNING ITEM # 51603 (Continued) The destgn and exterior materials of the butldtngs shall substanttally conform to the submttted photographs entttled, "ALLSAFE SELF STORAGE 1, 2, & 3 ", whtch have been exhtbtted to the Vtrgtnta Beach Ctty Counctl and are on file tn the Planntng Department, however, the portton of the facades adjacent to Apartment or Restdenttal zonmg chstrtcts shah constst of spht face block of a neutral earth tone color rather than the green metal false-door faqade All roofs factng a pubhc rtght-of-way shall have archttectural grade, green roofing shtngles as deptcted tn the photographs referenced above No structures, other than the Office/Restdenttal butldtng, shall be taller than one-story Anyfreestan&ng stgn shah be monument style wtth a brtck base and shall be constructed wtth stmtlar butldtng matertals and color scheme as the mtnt-storage butlchngs 7 No barbed or razor wire shall be tnstalled on the stte 10 11 12 If approved by the Board of Zontng Appeals, all fenctng vtstble from the rtght-of-way shall be black wrought tron style as deptcted tn the submttted photographs ldenttfied above Otherwtse, the fence shall comply wtth Arttcle 3 3 of the Ctty Landscaping Gutde If approved by the Board of Zontng Appeals, any fencing other than the wrought iron style, shall be black, wnyl coated chatn hnk Otherwtse, the fence shall comply wtth Article 3 3 of the Ctty Landscapmg Gutde All tntertor property hnes shall be vacated prtor to the tssuance of a butldtng permtt No hghttng shall bepermttted on extertor walls, adjacent toproperty zoned Restdenttal or Apartment A Ltghttng Plan shall be submttted with the final stte plan revtew The umts shall not be used for office purposes, band rehearsals, restdenttal dwelhngs or any other purpose not conststent wtth the storage of goods These Ordtnances shah be effective tn accordance with Sectton 107 09 of the Zomng Orchnance Adopted by the Counctl of the City of Vtrgtnta Beach, Vtrgmta, on the Twenty-sixth of August, Two Thousand Three August 26, 2003 - 51 - Item V-M. 9. PLANNING ITEM # 51603 (Continued) Vottng 11-0 (By ConsenO Counctl Members Vottng Aye Harry E Dtezel, Margaret L Eure, Vtce Mayor Louts R Jones, Reba S McClanan, Rtchard A Maddox, Mayor Meyera E Oberndorf, Jtm Reeve, Peter W Schmtdt, Ron A Vtllanueva, Rosemary Wtlson and James L Wood Councd Members Vottng Nay None Counctl Members Absent None August 26, 2003 ~ City of Virginia Beach ~'~~-- ./~) I~ER-OFFICE CORRESPO~ENCE In Reply Refer To Our File No. DF-5758 DATE: August 14, 2003 TO: Leslie L. Lilley -. DEPT: City Attorney FROM: B. Kay Wilsonq~ 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 ~'&' day of June, 2003, by and among Alton M and Dorothy O. BUTLER ("Butler" to be indexed as a grantor); Bernard William HODGES, II ('Hod~es to be indexed as a grantor), D.W. GATIJNG, INC., a Virginia corporation ("Gatling" to be indexed as a grantor), and the CITY OF VIRG1/qIA BEAClt, a municipal corporation of' the Commonwealth of' Virginia ("Grantee") WITNESSETH: WHEREAS, Butler, Hodges 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 fi~om 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 Virginia Beach, Virginia, which property is more particularly described in the attached Exhibit A (hereinafter the "Property"); and WItEREAS, Butler and Hodges 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 GPINs: 241548-8317, 241548-5492, 2415484381 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 WItEREAS, 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 development, 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 WItEREAS, 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 subsequem 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 hearing 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 THEREFORE, 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 ~ts governing body and without any dement of compulsion of _mild pro 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 title, 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 applicabte 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, Vkginia shall be vested with all necessary authority on behalf of the governing body of the City of Virginia Beach, Vkginia 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 Zoning 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, Cratling shall succeed to all rights 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 VIRGINIA COUNTY/CITY OF /ffer~/t~' , to-wit. The foregoing instrument was acknowledged before me this ~} %4 day of (3~-~ , 2003, by Alton M. Buffer and Dorothy O. Butler, who are either personally known rd/me or produced V~ ~/>v-I~ers _~'c~w~e_ as identification Notary Public My Commission Expires' 6, '$ 6' O_% GRANTOR: Bernard William I~dges, ~ ~ / COMMONWEALTH OF VIRGINIA COUNTY/CITY OF ~/_~e~ ~'~a~, to-wit. The foregoing instrument was acknowledged before me this ~ day of ,~f~_, 2003, by Bernard William Hodges, II, who is either personally known to me or produe~ as identification Notary Public My Commission Expires GRANTOR: D.W. GATLING, INC., a Virginia corporation David W Gatling President / COMMONWEALTH OF VIRGINIA COUNTY/CITY OF~,~/r~, ~-~ to-wit' The foregoing instrument was acknowledged before me this day of d~, 2003, by Dawd W Gatling, acting in his capacity as President of D.W. Gatling, In, c., a Virginia corporation, who is either personally known to me or produced [/,~ ~/~//~_.~L~ as identification My Commission Exoires. 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 fi.om 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 VirQnia Beach fi'om 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, Virginia, 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 fi.om 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 ofbegmning. 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 darection in a straight line to the Western side of Oceana Boulevard (State Route 615 - formerly Courthouse Road). PARCEL THR~E: 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 partmularly 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 from 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 of beginning. TOGETHER WITH the nght 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). - 52 - Item V-M. IO. PLANNING ITEM ii 51604 The followtng regtstered tn SUPPORT: Attorney Paul Gerhardt, Kaufman and Canoles, Alexander Place, Wtlhamsburg, Phone 757 259-3860, represented the apphcant Other representattves of the apphcant tn attendance were Gregg Ruff and Chrts Taylor - ProJect Engtneer Mr Gerhardt dtstrtbuted a small note book encompasstng condtttons recommended by the Planmng Commtsston, aertal photographs, the Red Mtll Plan, the proposed &te Plan, butl&ng elevatton, car wash elevatton and canopy elevatton Satd tnformatton ts hereby made a part of the record Eric Anderson, President- Lakeside Construction Corporatton, advised no dechcatton ts reqmred on Ntmmo There wtll be artght turn lane on Upton Drtve to access Ntmmo Parkway The followtng regtstered tn OPPOSITION: John Klemenc, 2112 Flowerdew Court, Phone 42 7-6355, Prestdent- South Shores Estate Ctvtc League mam concerns are the hghtmg and dratnage Upon motton by Councilman Reeve, seconded by Counctl Lady Eure, City Counctl ADOPTED an Ordinance upon apphcatton of EXXON MOBIL CORPORATION for a Condtttonal Use Permtt ORDINANCE UPON APPLICATION OF EXXON MOBIL CORPORA TION FOR A CONDITIONAL USE PERMIT FOR AN AUTOMOBILE SER VICE STATION AND CAR WASH R080331123 BE IT HEREBY ORDAINED BY THE COUNCIL OF THE CITY OF VIRGINIA BEACH, VIRGINIA Ordtnance upon Apphcation of Exxon Mobil Corporatton for a Con&ttonal Use Permttfor an automobtle servtce statton and car wash on property located on the southeast corner of Ntmmo Parkway and Upton Drive (GPIN 2414357392) DISTRICT 7- PRINCESS ANNE The followtng conchttons shall be requtred The stte shall be developed tn substanttal accordance wtth the stte plan entttled "Prehmtnary Landscape Plan for Exxon Mobtl" dated dune 24, 2003 and prepared by Spectra Group A copy of thts stte plan has been exhtbtted to Ctty Councd and ts on file tn the Planning Department The butldtngs and canopy shall be developed tn substanttal accordance wtth the archttectural elevattons entttled "Extertor Elevatton (conventence store, car wash, and canopy), On the Run/Exxon Mobil, Vtrgmta Beach, VA" dated Aprzl 29, 2003 and prepared by Wd Partners A copy of the elevattons has been exhtbited to City Counczl and ts on file tn the Planntng Department 3 A btke rack shall bepromded on-stte Augntst 26, 2003 Item V-M. I O. PLANNING - 53 - ITEM # 51604 (Continued) 10 No outdoor venchng machtnes, tce boxes or &splay of merchan&se shall be allowed Wtndows shall not be tinted tn order to allow for survetllance opportuntttes both from wtthtn and from outstde the butldtng No stgnage tn excess ora total of four (4) square feet of the enttre glass area of the extertor wall nor any neon stgns or accents shall be permttted tn or on the wtndows and/or doors of the convemence store Stgnage on the stte ts hmtted to the butldtng stgn, the canopy stgnage and strtpe referenced below, and one free-standtng monument style stgn wtth a brtck base matchtng the color of the conventence store butldmg No other stgns shall be tnstalled on any other wall area of the bmldtng or on the roof of the bmldtng, on the canopy, on hghttngpoles or any otherportton of the stte The only stgnage for the canopy shall be a strtpe and bustness logo on the stde of the canopyfactng Upton Drtve, there shall be no other stgnage on the canopy All rooftop equtpment, such as heating, venttlatton and air conchttontng units shall be concealed from typical street level vtew All ground level butldtng mechantcal equtpment shall be screened tn accordance wtth Sectton 245 (e) of the Zonmg Ordtnance The trash enclosure shall be screened wtth a sohd wall to match the matn building and shall mclude evergreen shrubs havmg good screenmg capabthttes, no less than three (3)feet tn height at the ttme of plantmg, spaced tn accordance wtth the Ctty's Landscaptng, Screenmg and Buffermg Spectficattons and Standards, and mamtatned at all ttmes tn good condttton at a mtntmum hetght not lower than the wall All hghttng on the site shall be consistent wtth those standards recommended by the Illumtnatton Engtneertng Soctety of North America (IESNA) ,4 photometrtc hghttng plan tndtcatmg the number and types of hghttng wtll be submttted as part of the formal stte plan submtsston for revtew by the Pohce Department to determtne conststency wtth Crtme Prevention Through Environmental Design (CPTED) prtnctples and practtces Ltghttng shall be installed and operated as shown on the approvedplan Canopy hghtmg shall constst offlush mounted fixtures on the cethng of the canopy All hghttng shall be &rected tnward and downward wtthtn the stte so as to ehmtnate glare onto a adjacent properties and rights-of-ways Operattng hours for the automattc car wash shall be hmtted to 6 O0 am to 10 O0 pm, seven days a week August 26, 2003 Item V-M. IO. - 54 - PLANNING ITEM # 51604 (Continued) Thts Ordtnance shall be effecttve tn accordance wtth Sectton 107 09 of the Zomng Ordtnance Adopted by the Councd of the Ctty of Vtrgtnta Beach, Vtrgmta, on the Twenty-stxth of August, Two Thousand Three Vottng 8-2 Councd Members Vottng Aye Harry E Dtezel, Margaret L Eure, Vice Mayor Louts R Jones, Rtchard A Maddox, Jim Reeve, Peter W Schmtdt, Ron A Vdlanueva, and James L Wood Councd Members Voting Nay Reba S McClanan and Mayor Meyera E Oberndorf Councd Members Abstatntng Rosemary Wdson Councd Members Absent None Councd Lady Wdson DISCLOSED and ABSTAINED pursuant to Confltct of Interests Act 3' 2 2-3115 (E) regarding dtscusston of Lakestde/Swmson Note, LLC's apphcatton for a Con&ttonal Use Permtt for an automobde servtce statton and car wash Her husband ts a prtnctpal tn the accounttngfirm of Goodman and Company and earns compensatton whtch exceeds $10,000 O0 annually Goodman and Company provtdes servtces to Lakestde/Swmson Note, LLC Her husband personally provtdes servtces to Lakestde/Swmson Note, L L C Councd Lady Wilson's letter of August 26, 2003, ts hereby made a part of the record August 26, 2003 City of Virginia Beach ROSEMARY WILSON COUNCIL LADY - AT-LARGE PHONE (757) 422-0733 FAX. (757) 426-566~ August 26, 2003 Mrs. Ruth Hodges Smith, MMC City Clerk Mumcipal Center V~rg~nia Beach, V~rginia 23456 Dear Mrs. Smith: Re: Disclosure Pursuant to Code of Virginia § 2.2-3115(E) Pursuant to the State and Local Government Conflmt of Interests Act, I make the following declaration: , I am executing this written disclosure regarding City Council's discussion of Lakeside/Swinson Note, LLC's application for a conditional use permit for an automobile service stat]on and car wash on property located on the southeast comer of Nimmo Parkway and Upton Drive (GPIN 2414357392). . Lakeside/Swinson Note, LLC is a client of the accounting finn, Goodman and Company. My husband is a principal in Goodman and Company. 3. My husband personally provides servmes to Lakeside/Swtnson Note, LLC. , I w~sh to disclose my interest in th~s transaction and abstain from C~ty Council's consideration of the matter. Accordingly, I respectfully request that you record th~s declaration in the official records of City Council. 310 53"~)STREET, VIRGINIA BEACH, VA 23451 Mrs. Ruth Hodges Smith -2- August 26, 2003 Re: Disclosure Pursuant to Conflict of Interests Act § 2.2-3115 (E) Thank you for your assistance and cooperation ~n th~s matter. S~ncerely, Rosemary A. Wdson Counc~lmember RAW/RRI Item V-M. 11. PLANNING - 55 - ITEM # 51605 Upon motton by Vtce Mayor Jones, seconded by Counctl Lady Wdson, Ctty Counctl REFERRED BACK to the PLANNING COMMISSION Ordtnance upon apphcatton of ALL TEL COMMUNICATIONS, INC for a Conditional Use Permtt ORDINANCE UPON APPLICATION OF ALL TEL COMMUNICATIONS, 1NC FOR A CONDITIONAL USE PERMIT FOR A COMMUNICATIONS TO WER Ordtnance upon Apphcatton of Alltel Communtcattons, Inc for a Conchttonal Use Permit for a communications tower on property located at 812 Sandbrtdge Road (GPIN 2423393051) DISTRICT 7- PRINCESS ANNE Vottng 11-0 (By ConsenO Counctl Members Vottng Aye Harry E Dtezel, Margaret L Eure, Vtce Mayor Louts R Jones, Reba S McClanan, Rtchard A Maddox, Mayor Meyera E Oberndorf, Jtm Reeve, Peter W Schmtdt, Ron A Vdlanueva, Rosemary Wtlson and James L Wood Councd Members Vottng Nay None Counctl Members Absent None August 26, 2003 - 56- Item V-M. 12. PLANNING ITEM # 51606 Upon motton by Vtce Mayor Jones, seconded by Counctl Lady Wtlson, Ctty Counctl ADOPTED an Ordtnance upon apphcatton of SALT MEADOW BAY, L.L.C. for the dtscontmuance, closure and abandonment of Street G on the northeast side of South Ortole Drtve, northwest of Barberton Drtve Or&nance upon apphcatton of Salt Meadow Bay, L L C for the &sconttnuance, closure and abandonment of Street G located on the northeast stde of South Ortole Drive, approxtmately 550 feet northwest of Barberton Drive DISTRICT 6 - BEACH The foHowtng condtttons shah be requtred The Ctty Attorney's Office shall make the final determtnatton regar&ng ownershtp of the underlytngfee The purchase prtce to be patd to the Ctty shall be determtned accordtng to the "Pohcy Regardtng Purchase of Ctty 's Interest tn Streets Pursuant to Street Closures, "approved by Ctty Counctl Coptes of the pohcy are avadable tn the Planntng Department The apphcant shall resubdtvtde the property and vacate internal lot hnes to tncorporate the closed area tnto the adjotnmgparcels The plat shall be submitted and approved for recordation prior to final street closure approval The apphcant shall vertfy that no prtvate utthttes extst wtthtn the rtght-of- way proposed for closure Prehmmary comments from the utthty compantes tndtcate that there are no prtvate utthttes wtthtn the rtght-of- way proposed for closure If prtvate utthttes do extst, easements sattsfactory to the utthty company shall be provtded Closure of the rtght-of-way shall be conttngent upon comphance with the above stated condtttons wtthtn 365 days of approval (August 25, 2004) by City Council If the condtttons noted above are not accomphshed and the final plat ts not approved wtthtn one year of the Ctty Counctl vote to close the right-of-way, this approval shall be considered null and void Votmg 11-0 (By ConsenO Counctl Members Vottng Aye Harry E Dtezel, Margaret L Eure, Vtce Mayor Louts R Jones, Reba S McClanan, Richard A Maddox, Mayor Meyera E Oberndorf, Jtm Reeve, Peter W Schmtdt, Ron A Villanueva, Rosemary Wtlson and James L Wood Counctl Members Vottng Nay None Counctl Members Absent None August 26, 2003 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. apphed to the Council of the City of Virginia Beach, Virginia, to have the hereinafter described street discontinued, closed, and vacated; and WHEREAS, it is the judgment of the Council that smd street be discontinued, closed, and vacated, subject to certain conditions having been met on or before August 25, 2004; NOW, THEREFORE, SECTION I BE IT ORDAINED by the Council of the City of Vlrglma 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 certain piece or parcel of land situate, lying and being in the City of Virginia Beach, Virginia, 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. "EXHIBIT '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 C~ty shall be determined according to the "Pohcy Regar&ng Purchase of City's Interest in Streets Pursuant to Street Closures," approved by C~ty Counml. Cop~es of said policy are available In the Planning Department 2 The apphcant shall resubdlvlde the property and vacate internal lot lines to incorporate the closed area into the adjoining parcels The resubdivlsion plat shall be submitted and approved for recordation prior to final street closure approval 3 The applicant shall verify that no private utihtles exist within the right-of-way proposed for closure. Prehminary 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 con&tlons 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, thru 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 City Attorney. SECTION IV 3. A certffied copy of this Ordinance shall be filed in the Clerk's Off]ce of the Clrcmt Court of the City of V~rgmla Beach, Vlrg]ma, and indexed in the name of the CITY OF VIRGINIA BEACH as "Grantor" Adopted by the Council of the C~ty of V~rgima Beach, V]rg]ma, on this 2 6 thday of August ,2003. CA-8838 July 14, 2003 t \DataLATY~Forms\Street Closure\WORKING\CA8838 ord2 doc APPROVED AS TO CONTENT .1.21.oza Planmng Department APPROVED AS TO LEGAL SUF~Y BIt~DNECK VILLA GE A PA t~ TM~-N SEC T/ON ONE (MB 6~, PC GPIN 24/8-70-~7L~ LOT 2/, BLOCK 7 "BEAN CAt,DEN" GPIN 24 / ~- 70- J/72 LOT 1.¢, BLOCK 7 ''BEAN GAHDEN" ~PIN 24/B-70--~Z72 LOT Z~ BLOCK 7 ''BEAN GAt~DEN" (MB 14 P c ~ 3) CPIN 2 41 a- 7o- 3/72 LOT 20, BLOCK "BEAN GAt~DEN" GP/N 241~-2o-~o~ LOT qB, BLOCK ''BEAN GAt~DEN" PAt~CEL 'A ' "SALT MEADOW gA Y" /NS T NO 2003022700~00~5 GPIN DENOTES RIGHT-OF-WAY OF STREET "G" HEREBY CLOSED AREA = 5,174 SQ FT OR 0119 ACRES JOB# 03038 ZONED N/A EXHIBIT 'A' SHOWING tFIGH T-OF- WA Y CL OSUiCE OF ~ Tt~EE T "G " "BEAN GARDEN" (MB 16, PG 5.3) VIRGINIA BEACH, VIRGINIA MSA,. ?.C. Landscape Design · Planning Surveying Engineering. Environmental Sciences 5033 ROUSE DRIV~E, VIIIGINIA BEACH, VA 23462-J708 PHONE (757) 490-9264 FAX (757) 490-06'14 DATE 4/30/05 SCALE 1"=50' OWN BY GMZ PLAT RECORDED IN MB 16, PG 53 -57- Item V-N. 1. APPOINTMENTS ITEM # 51607 BY CONSENSUS, Ctty Councd RESCHEDULED the following APPOINTMENTS: MINORITY BUSINESS CO UNCIL PARKS AND RECREATION COMMISSION TIDEWATER REGIONAL GROUP HOME COMMISSION August 26, 2003 i iI i[[ _ . , 58- ITEM # 51608 Mayor Oberndorf ANNOUNCED the first meeting of the SENTARA TRAUMA CNETER TASK FORCE: August 29, 2003 10:00 A.M. City Council Conference Room Room 234, City Hall Building 1 August 26, 2003 - 59- ITEM # 51609 Mayor Meyera E Oberndorf entertatned a motton to permit Ctty Council to conduct its CLOSED SESSION, pursuant to Section 2 1-344(A), Code of Vtrgtnta, as amended, for the followtng purpose PUBLICLY-HELD PROPERTY Dtscusston or constderatton of the acqutsttton of real property for a pubhc purpose, or of the dtsposttton o)~ pubhcly-held real property, where dtscusston tn an open meettng would adversely affect the bargatntng posttton or negottattng strategy of the pubhc body pursuant to Sectton 2 2-3711(A)(3) Acqmsttton/Dtsposttton of Property - Baystde Dtstrtct - Beach Dtstrtct Upon motton by Vtce Mayor Jones, seconded by Counctl Lady Eure, Ctty Counctl voted to proceed tnto CLOSED SESSION (8:2 7 P.M.). Vottng 11-0 Counctl Members Voting Aye Harry E Dtezel, Margaret L Eure, Vtce Mayor Louts R Jones, Reba S McClanan, RtchardA Maddox, Mayor Meyera E Oberndorf, Jtm Reeve, Peter W Schmtdt, Ron A Vtllanueva, Rosemary Wtlson and James L Wood Counctl Members Vottng Nay None Counctl Members Absent None (8:27P. M. - 9:10 P.M.) August 26, 2003 - 60 - ITEM # 51610 Mayor Meyera E Oberndorf RECONVENED the FORMAL SESSION of the VIRGINIA BEACH CITY COUNCIL tn the City Councd Conference Room, Ctty Hall Buddmg, on Tuesday, August26, 2003, at 9 ]0 PM Councd Members Present Harry E Dtezel, Margaret L Eure, Vtce Mayor Louts R Jones, Reba S McClanan, RtchardA Maddox, MayorMeyera E Oberndorf &m Reeve, Peter W Schmtdt, Ron A Vdlanueva, Rosemary Wdson and James L Wood Councd Members Absent None August 26, 2003 - 61 - CER TIFICA TION OF CLOSED SESSION ITEM # 51611 Upon motton by Counctlman Maddox, seconded by Vtce Mayor Jones, Ctty Counctl CERTIFIED THE CLOSED SESSION TO BE IN ACCORDANCE WITH THE MOTION TO RECESS. Only pubhc bustness matters lawfully exempt from Open Meettng requtrements by Vtrgtnta law were dtscussed tn Closed Sesston to whtch thts certification resolution apphes, AND, Only such pubhc bustness matters as were tdenttfied tn the motton convening the Closed Sesston were heard, discussed or constdered by Vtrgtnta Beach Ctty Counctl Vottng 11-0 Counctl Members Voting Aye Harry E Dtezel, Margaret L Eure, Vtce Mayor Louts R Jones, Reba S McClanan, Rtchard A Maddox, Mayor Meyera E Oberndorf, Jtm Reeve, Peter W Schmtdt, Ron A Vtllanueva, Rosemary Wilson and James L Wood Counctl Members Vottng Nay None Counctl Members Absent None August 26, 2003 RESOLUTION CERTIFICATION OF CLOSED SESSION VIRGINIA BEACH CITY COUNCIL WHEREAS: The Virginia Beach City Council convened into CLOSED SESSION, pursuant to the affirmative vote recorded m ITEM # 51609, page 59, and in accordance with the provisions of The Virginia Freedom of Information Act, and, WHEREAS: Section 2 2-3 711 (A) oft he Code of Vlrglma requires a certification by the governing body that such Closed Session was conducted in conformity with Virginia law NOW, THEREFORE, BE IT RESOLVED: That the Virginia Beach City Council hereby certifies that, to the best of each member's knowledge, (a) only public business matters lawfully exempted from Open Meeting reqmrements 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 t~uth Hodges Smith, MMC City Clerk August 26, 2003 Item VoQ. ADJOURNMENT ITEM # 51612 Mayor Meyera E Oberndorf DECLARED the City Councd Meeting ADJOURNED at 9 12 P M Beverly 0 Hooks, CMC Chtef Deputy Ctty Clerk ~uth H~dges Smith, ~i~l~- City Clerk Meyera E Oberndorf Mayor Ctty of Vtrgmta Beach Vtrgtma August 26, 2003