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Home My WebLink About1-6-2026 FORMAL SESSION AGENDA .��G11`1iA•BE,gc� City of Virginia Beach "'COMMUNITY FOR A LIFETIME OF BUR NAT��N City Council Members Mayor Robert M. `Bobby" Dyer bdver@VBgov.com 1 757-385-4581 Vice Mayor Rosemary Wilson, District 5 Cal "Cash"Jackson-Green, District 7 rcwilson@VBgov.com 1 757-422-0733 CJacksonGreen@VBgov.com 1 757-629-8792 Michael F. Berlucchi, District 3 Robert W. "Worth" Remick, District 6 mberlucc@VBgov.com 1 757-407-5105 wremick@VBgov.com 1 757-840-5855 Stacy Cummings, District 8 Dr. Amelia N. Ross-Hammond, District 4 StCummings@VBgov.com 1 757-629-8691 arosshammond@VBgov.com 1 757-840-0735 Barbara M. Henley, District 2 Jennifer Rouse, District 10 bhenley@VBgov.com 1 757-426-7501 ivrouse@VBgov.com 1 757-840-1821 David Hutcheson, District 1 Joashua F. "Joash" Schulman, District 9 dhutcheson@VBgov.com 1 757-651-7641 ischulman@VBgov.com 1 757-840-1291 Email all City Council members at CityCouncil@VBgov.com. City Council Appointees Patrick A. Duhaney City Hall, Building 1 City Manager 2401 Courthouse Drive Mark D. Stiles Virginia Beach, VA 23456 City Attorney Phone: 757-385-4303 Lyndon S. Remias City Auditor Fax: 757-385-5669 Amanda Barnes City Clerk Sue Cunningham City Real Estate Assessor City Council Agenda January 6, 2026 Mayor Robert M. "Bobby" Dyer Presiding I. CITY COUNCIL'S BRIEFING -CITY COUNCIL CONFERENCE ROOM- A. ATLANTIC AVENUE TASK FORCE REPORT 2:30 P.M. Julie Brenman, Chief Operating Officer— Fountainworks Michael Mauch, Co-Chair—Atlantic Avenue Task Force Bill Gambrell, Co-Chair—Atlantic Avenue Task Force II. CITY MANAGER'S BRIEFING A. PENDING PLANNING ITEMS 3:30 P.M. Kaitlen Alcock, Planning Administrator III. CITY COUNCIL LIAISON REPORTS 3:45 P.M. IV. CITY COUNCIL DISCUSSION/INITIATIVES/COMMENTS 4:00 P.M. V. CITY COUNCIL AGENDA REVIEW 4:15 P.M. VI. INFORMAL SESSION -CITY COUNCIL CONFERENCE ROOM- A. CALL TO ORDER 4:30 P.M. B. CITY COUNCIL ROLL CALL C. RECESS TO CLOSED SESSION VII. FORMAL SESSION -CITY COUNCIL CHAMBER- A. CALL TO ORDER -Mayor Robert M. "Bobby" Dyer 6:00 P.M. B. INVOCATION C. MOMENT OF SILENCE D. PLEDGE OF ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA E. ROLL CALL OF CITY COUNCIL F. CERTIFICATION OF CLOSED SESSION G. MINUTES 1. INFORMAL and FORMAL SESSIONS — December 2, 2025 2. INFORMAL and FORMAL SESSIONS— December 9, 2025 H. PUBLIC HEARING 1. CHANGE THE POLLING LOCATIONS FOR PRECINCT 0002 & PRECINCT 0108; CHANGE THE CENTRAL ABSENTEE PRECINCT & RELOCATE THE OFFICE OF THE THE VOTER REGISTRAR Virginia Museum of Contemporary Art ("MOCA") to Virginia Beach Middle School The Gala 417 to All Saints' Episcopal Church Virginia Beach Municipal Center at 2449 Princess Anne Road, Building 14 to 500 Studio Drive (Requested by the Virginia Beach Electoral Board) I. FORMAL SESSION AGENDA 1. CONSENT AGENDA J. ORDINANCES/RESOLUTION 1. Ordinance to AMEND City Code Section 2-85 re leave carryover 2. Ordinance to AMEND City Code Section 2-105 re re-employment 3. Ordinance to AUTHORIZE extension of the employment contract for the City Manager (Requested by the City Council) 4. Resolution to PROVIDE for the issuance and sale of General Obligation Public Improvement Bonds, in the maximum amount of$163-Million and PROVIDE for the form, details and payment thereof re authorized public improvements 5. Ordinance to AUTHORIZE one (1) full-time pharmacist position within the FY 2025-26 Department of Emergency Medical Services (EMS) Operating Budget 6. Ordinance to APPROPRIATE an additional $496,432 from the fund balance of the Chesopeian Colony Dredging Special Service District Special Revenue Fund to the FY 2025-26 Capital Improvement Program ("CIP") for Capital Project#100277, "Chesopeian Colony Neighborhood Dredging II" redesign costs 7. Ordinance to ACCEPT and APPROPRIATE $25,283 from the Virginia Department of Behavioral Health and Developmental Services (DBHDS) to the FY 2025-26 Human Services Operating Budget re Forensic Discharge Planning programs 8. Ordinance to ACCEPT and APPROPRIATE $10,203 from the Virginia Beach Police Foundation to the FY 2025-26 Police Department Operating Budget re K-9 facility improvements 9. Ordinance to TRANSFER $375,921 within the Department of Public Utilities from the Water and Sewer Enterprise Fund Reserve for Contingencies to the Water and Sewer Enterprise Fund Operating Budget re arbitrage rebate payment to the Internal Revenue Service for 2020 revenue bonds K. APPOINTMENTS • ARTS AND HUMANITIES COMMISSION • AUDIT COMMITTEE • BAYFRONT ADVISORY COMMISSION • BEACHES AND WATERWAYS ADVISORY COMMISSION • CLEAN COMMUNITY COMMISSION • COMMUNITY POLICY AND MANAGEMENT TEAM • COMMUNITY SERVICES BOARD • DEFERRED COMPENSATION BOARD • EASTERN VIRGINIA REGIONAL INDUSTRIAL FACILITY AUTHORITY • HEALTH SERVICES ADVISORY BOARD • HISTORIC PRESERVATION COMMISSION • OPEN SPACE ADVISORY COMMITTEE • PARKS AND RECREATION COMMISSION • PUBLIC LIBRARY BOARD • RESORT ADVISORY COMMISSION • VIRGINIA BEACH CANNABIS ADVISORY TASK FORCE • VIRGINIA BEACH COMMUNITY DEVELOPMENT CORPORATION • WETLANDS BOARD L. UNFINISHED BUSINESS M. NEW BUSINESS N. ADJOURNMENT OPEN DIALOGUE For non-agenda items, each speaker will be allowed three minutes. If you are physically disabled or visually impaired and need assistance at this meeting, please call the City Clerk's Office at 757-385-4303. The full Agenda with all backup documents can be viewed in the eDocs Document Archive under: Current Session. If you would like to receive an email with a list of the agenda items for future City Council meetings, please submit your request to TChelius@vbgov.com or call 757-385-4303. AGENDA ITEMS Citizens who wish to speak can sign up either in-person or virtually via WebEx. Anyone wishing to participate virtually, must follow the two-step process provided below: 1. Register for the WebEx Meeting. 2. Register with the City Clerk's Office by calling 757-385-4303 prior to 5:00 p.m. on January 6, 2026. I. CITY COUNCILS BRIEFING -CITY COUNCIL CONFERENCE ROOM- A. ATLANTIC AVENUE TASK FORCE REPORT 2:30 P.M. Julie Brenman, Chief Operating Officer— Fountainworks Michael Mauch, Co-Chair—Atlantic Avenue Task Force Bill Gambrell, Co-Chair—Atlantic Avenue Task Force II. CITY MANAGER'S BRIEFING A. PENDING PLANNING ITEMS 3:30 P.M. Kaitlen Alcock, Planning Administrator III. CITY COUNCIL LIAISON REPORTS 3:45 P.M. IV. CITY COUNCIL DISCUSSION/INITIATIVES/COMMENTS 4:00 P.M. V. CITY COUNCIL AGENDA REVIEW 4:15 P.M. VI. INFORMAL SESSION -CITY COUNCIL CONFERENCE ROOM- A. CALL TO ORDER 4:30 P.M. B. CITY COUNCIL ROLL CALL C. RECESS TO CLOSED SESSION VII. FORMAL SESSION -CITY COUNCIL CHAMBER- A. CALL TO ORDER -Mayor Robert M. "Bobby" Dyer 6:00 P.M. B. INVOCATION C. MOMENT OF SILENCE D. PLEDGE OF ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA E. ROLL CALL OF CITY COUNCIL F. CERTIFICATION OF CLOSED SESSION G. MINUTES 1. INFORMAL and FORMAL SESSIONS— December 2, 2025 2. INFORMAL and FORMAL SESSIONS— December 9, 2025 H. PUBLIC HEARING 1. CHANGE THE POLLING LOCATIONS FOR PRECINCT 0002 & PRECINCT 0108; CHANGE THE CENTRAL ABSENTEE PRECINCT & RELOCATE THE OFFICE OF THE THE VOTER REGISTRAR Virginia Museum of Contemporary Art ("MOCA") to Virginia Beach Middle School The Gala 417 to All Saints' Episcopal Church Virginia Beach Municipal Center at 2449 Princess Anne Road, Building 14 to 500 Studio Drive (Requested by the Virginia Beach Electoral Board) PUBLIC HEARING PROPOSED ORDINANCE TO CHANGE THE POLLING LOCATIONS FOR PRECINCTS 0002 AND 0108, TO CHANGE THE CENTRAL ABSENTEE PRECINCT,AND TO RELOCATE THE OFFICE OF THE VOTER REGISTRAR The City Council of Virginia Beach,Virginia, at its 6pm formal session on January 6, 2026,will conduct a public hearing upon an ordinance to change the polling locations for precincts 0002 and 0108,to change the central absentee precinct,and to relocate the Office of the Voter Registrar. If adopted,the ordinance will change the polling location for Precinct 0002 from the Museum of Contemporary Art to Virginia Beach Middle School and the polling location for Precinct 0108 from The Gala 417 to All Saints' Episcopal Church. The ordinance also moves the location of the Office of the Voter Registrar from the Municipal Center to its new location on 500 Studio Drive. The move will also require relocating the central absentee precinct. A copy of the aforesaid ordinance may be inspected in the Voter Registrar's Office, which is located at 2449 Princess Anne Road, Municipal Center, Building 14, Virginia Beach,Virginia,23456. If you are physically disabled or visually impaired and need assistance at this meeting, please call the CITY CLERK'S OFFICE at 385-4303;Hearing impaired,call: TOO only 711(TDD-Telephonic Device for the Deaf). If you wish to make comments virtually during the public hearing,please follow the two-step process provided below: 1. Register with the City Clerk's Office by calling 757-385-4303 prior to 5:00 p.m.on January 6,2026. 2. Download WebEx and view the meeting at: htti)s://vbvov.webex.com/weblink/r e9ister/r7078ee 14b6a36f260f3f44 e3ef32baca All interested parties are invited to participate. Amanda Barnes,MMC City Clerk Pilot-December 28,2025 and January 4, 2026 4'U CITY OF V``IIRGINIA BEACH AGENDA ITEM ITEM: An Ordinance to Amend the City Code to Change the Polling Locations for Precincts 0002 and 0108, to Change the Central Absentee Precinct, and to Relocate the Office of the Voter Registrar PUBLIC HEARING DATE: January 6, 2026 MEETING DATE: January 20, 2026 ■ Background: On December 10, 2025, the Electoral Board voted to relocate the polling locations for precincts 0002 and 0108, as well as the Office of the Voter Registrar. Precinct 0002 is currently located at the Virginia Museum of Contemporary Art (MOCA). Because MOCA is scheduled to relocate next year and the future use of the building is uncertain, precinct 0002 will be moved to Virginia Beach Middle School, located at 600 25th Street, Virginia Beach, VA 23451. Precinct 0108 is currently located at The Gala 417, which is no longer able to host elections. The precinct will be relocated to All Saints' Episcopal Church, located at 1969 Woodside Lane, Virginia Beach, VA 23454. This facility already serves precinct 0010; therefore, a separate entrance and voting area will be provided for precinct 0108. The Electoral Board also voted to relocate the Office of the Voter Registrar from the Municipal Center (Building 14, 2449 Princess Anne Road) to 500 Studio Drive. The actual move will be after substantial completion of the new building, and this action is needed to initiate a preclearance request to the Office of the Attorney General. The move of the Office will also necessitate the relocation of the central absentee precinct, which is the location of the tabulation of absentee ballots on election day. ■ Considerations: The polling locations requested meet the requirements of the Americans with Disabilities Act. The ordinance directs the Director of Elections to seek a certificate of no objection from the Office of the Attorney General for the change in polling locations. Provided such certificate is obtained, the polling location changes will be administered starting with the June primary election, if such primary election is required. ■ Public Information: As required by Section 24.2-306 of the Code of Virginia, notice of this proposed change will be published in the newspaper once a week for two consecutive weeks. An advertisement will be placed in the newspaper prior to any elections this year. ■ Recommendations: Adopt the proposed change. ■ Attachments: Ordinance; Maps (2) Requested by the Virginia Beach Electoral Board 1 AN ORDINANCE TO AMEND THE CITY CODE TO 2 CHANGE THE POLLING LOCATIONS FOR PRECINCTS 3 0002 AND 0108, TO CHANGE THE CENTRAL ABSENTEE 4 PRECINCT, AND TO RELOCATE THE OFFICE OF THE 5 VOTER REGISTRAR 6 7 SECTIONS AMENDED: § 10-1 and § 10-1.2 8 9 BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF VIRGINIA BEACH, 10 VIRGINIA: 11 12 Sections 10-1 and 10-1.2 of the City Code are hereby amended and reordained to 13 read as follows: 14 15 Sec. 10-1. Establishment of precincts and polling places. 16 17 There are hereby established in the city the following precincts and their respective 18 polling places, as set forth below: 19 20 Precinct Polling Place 21 0001 Galilee Episcopal Church 22 3928 Pacific Avenue 23451 23 0002 M Gee M of I GRtempeFaF l fir} 24 2200 Park AveRue 23454 25 Virginia Beach Middle School 26 600 25th Street 23451 27 0003 Ocean Lakes Elementary 28 1616 Upton Drive 23454 29 0004 Virginia Beach Community Chapel 30 1261 Laskin Road 23451 31 0005 Mount Olive Baptist Church 32 310 N. Bird neck Road 23451 33 0006 Alanton Elementary School 34 1441 Stephens Road 23454 35 0007 King's Grant Presbyterian Church 36 745 Little Neck Road 23452 37 0008 London Bridge Baptist Church 38 2460 Potters Road 23454 39 0009 Trantwood Elementary School 40 2344 Inlynnview Road 23454 41 0010 All Saints' Episcopal Church 42 1969 Woodside Lane 23454 43 0011 Edgar Cayce's Association for Research 44 and Enlightenment 45 215 67th Street 23451 46 0012 Lynnhaven Elementary School 47 210 Dillon Drive 23452 48 0013 Windsor Woods Elementary School 49 233 Presidential Boulevard 23452 50 0014 Malibu Elementary School 51 3632 Edinburgh Drive 23452 52 0015 Calvary Baptist Church 53 4832 Haygood Road 23455 54 0016 Old Donation School 55 4633 Honeygrove Road 56 0017 The Louis R. Jones Bayside Recreation Center 57 4500 First Court Road 23455 58 0018 Independence Middle School 59 1370 Dunstan Lane 23455 60 0019 Bayside Church of Christ 61 5025 Shell Road 23455 62 0020 Bayside Elementary School 63 5649 Bayside Road 23455 64 0021 Bettie F. Williams Elementary School 65 892 Newtown Road 23462 66 0022 Point O' View Elementary School 67 5400 Parliament Drive 23462 68 0023 Arrowhead Elementary School 69 5549 Susquehanna Drive 23462 70 0024 St. Andrews United Methodist Church 71 717 Tucson Road 23462 72 0025 Fairfield Elementary School 73 5428 Providence Rd. 23464 74 0026 Kempsville Presbyterian Church 75 805 Kempsville Road 23464 76 0027 Kempsville Middle School 77 860 Churchill Drive 23464 78 0028 Thalia Elementary School 79 421 Thalia Road 23452 80 0029 Holland Elementary School 81 3340 Holland Road 23452 82 0030 Seatack Elementary School 83 912 S. Birdneck Road 23451 84 0031 Red Mill Elementary School 85 1860 Sandbridge Road 23456 86 0032 Oak Grove Baptist Church 87 691 Princess Anne Road 23457 88 0033 Back Bay Christian Assembly 89 1212 Princess Anne Road 23457 90 0034 Blackwater Fire Station 91 6009 Blackwater Road 23457 92 0035 Kellam High School 93 2665 West Neck Road 23456 94 0036 Red Church Steeple 95 245 S. Rosemont Rd 23452 96 0037 Bayside Baptist Church 97 1920 Pleasure House Road 23455 98 0038 Bayside Presbyterian Church 99 1400 Ewell Road 23455 100 0039 Pembroke Elementary School 101 4622 Jericho Road 23462 102 0040 Union Baptist Church 103 4608 South Boulevard 23452 104 0041 College Park Elementary School 105 1110 Bennington Road 23464 106 0042 Brandon Middle School 107 1700 Pope Street 23464 108 0043 Salem Middle School 109 2380 Lynnhaven Parkway 23464 110 0044 Centerville Elementary School 111 2201 Centerville Turnpike 23464 112 0045 White Oaks Elementary School 113 960 Windsor Oaks Boulevard 23462 114 0046 Green Run Elementary School 115 1200 Green Garden Circle 23453 116 0047 King's Grant Elementary School 117 612 N Lynnhaven Road 23452 118 0048 WAVE Church 119 1000 N. Great Neck Road 23454 120 0049 John B. Dey Elementary School 121 1900 N. Great Neck Rd. 23454 122 0050 The Gathering at Scott Memorial 123 United Methodist Church 124 409 First Colonial Road 23454 125 0051 Kempsville Area Library 126 832 Kempsville Road 23464 127 0052 Providence Presbyterian Church 128 5497 Providence Road 23464 129 0053 Kempsville Elementary School 130 570 Kempsville Road 23464 131 0054 Landstown High School 132 2001 Concert Drive 23456 133 0055 Virginia Beach Moose Family Center 134 3133 Shipps Corner Road 23453 135 0056 St. Aidan's Episcopal Church 136 3201 Edinburgh Drive 23452 137 0057 St. Matthew Catholic Church 138 3314 Sandra Lane 23464 139 0058 Glenwood Elementary School 140 2213 Round Hill Drive 23464 141 0059 Shelton Park Elementary School 142 1700 Shelton Road 23455 143 0060 WAVE Church 144 2655 Seaboard Road 23456 145 0061 Ebenezer Baptist Church 146 965 Baker Road 23455 147 0062 Restoration Church at Landstown 148 3220 Monet Drive 23453 149 0063 Ocean Lakes High School 150 885 Schumann Drive 23454 151 0064 Rosemont Forest Elementary School 152 1716 Grey Friars Chase 23456 153 0065 Colonial Baptist Church 154 2221 Centerville Turnpike 23464 155 0066 Princess Anne Recreation Center 156 1400 Nimmo Parkway 23456 157 0067 Eastern Shore Chapel 158 2020 Laskin Road 23454 159 0068 Providence Elementary School 160 4968 Providence Road 23464 161 0069 Unity Church of Tidewater 162 5580 Shell Road 23455 163 0070 Corporate Landing Middle School 164 1597 Corporate Landing Parkway 23454 165 0071 Salem High School 166 1993 Sun Devil Drive 23464 167 0072 W. T. Cooke Elementary School 168 1501 Mediterranean Avenue 23451 169 0073 Green Run High School 170 1700 Dahlia Drive 23453 171 0074 Rosemont Elementary School 172 1257 Rosemont Rd. 23453 173 0075 Lynnhaven Colony Congregational Church 174 2217 W. Great Neck Road 23451 175 0076 Thalia Lynn Baptist Church 176 4392 Virginia Beach Boulevard 23462 177 0077 Plaza Annex 178 641 Carriage Hill Rd 23452 179 0078 Indian Lakes Elementary School 180 1240 Homestead Drive 23464 181 0079 Emmanuel Episcopal Church 182 5181 Singleton Way 23462 183 0080 Kingdom Cathedral 184 3820 Stoneshore Road 23452 185 0081 Salem Elementary School 186 3961 Salem Lakes Boulevard 23456 187 0082 Christopher Farms Elementary School 188 2828 Pleasant Acres Drive 23453 189 0083 Strawbridge Elementary School 190 2553 Strawbridge Road 23456 191 0084 Tallwood Elementary School 192 2025 Kempsville Road 23464 193 0085 Three Oaks Elementary School 194 2201 Elson Green Avenue 23456 195 0086 Haygood United Methodist Church 196 4713 Haygood Road 23455 197 0087 New Castle Elementary School 198 4136 Dam Neck Road 23456 199 0088 Hope Haven 200 3000 North Landing Road 23456 201 0089 New Covenant Presbyterian Church 202 1552 Kempsville Road 23464 203 0090 Morning Star Baptist Church 204 4780 First Court Road 23455 205 0091 Larkspur Middle School 206 4696 Princess Anne Road 23462 207 0092 Lynnhaven United Methodist Church 208 1033 Little Neck Road 23452 209 0093 Good Samaritan Episcopal Church 210 848 Baker Road 211 0094 Plaza Middle School 212 3080 S. Lynnhaven Road 23452 213 0095 Corporate Landing Elementary School 214 1590 Corporate Landing Parkway 23454 215 0096 Freedom Fellowship 216 836 Regency Drive 23454 217 0097 San Lorenzo Spiritual Center 218 4556 Indian River Rd. 23456 219 0098 Windsor Oaks Elementary School 220 3800 Van Buren Drive 23452 221 0099 Parkway Elementary School 222 4180 O'Hare Drive 23456 223 0100 Tabernacle United Methodist Church 224 1265 Sandbridge Rd. 23456 225 0101 Luxford Elementary School 226 4808 Haygood Road 23455 227 0102 Diamond Springs Elementary School 228 5225 Learning Circle 23462 229 0103 Kempsville Meadows Elementary School 230 736 Edwin Drive 23462 231 0104 Woodstock Elementary School 232 6016 Providence Road 23464 233 0105 Pembroke Meadows Elementary School 234 820 Cathedral Drive 23455 235 0106 Thalia United Methodist Church 236 4321 Virginia Beach Boulevard 23452 237 0107 Linkhorn Park Elementary School 238 977 First Colonial Road 23454 239 0108 The Gala it 17 240 2105 W. Great Monk Road 2345 241 All Saints' Episcopal Church 242 1969 Woodside Lane 23454 243 Central Absentee Voter AgFffiG UIture/Veter Registrar B iildip 244 Precinct 500 Studio Drive 245 246 In the event of a name change to any of the above polling locations, the street 247 address shall be sufficient identification of such facility until such time as there is need to 248 amend this section to effect a geographical change to one of the polling locations. 249 250 251 252 Sec. 10-1.2. — Office of the Voter Registrar. 253 254 The Office of the Voter Registrar shall be the 500 Studio Drive. AgriGultuFelvete 255 , the Vete 256 RegistFaF may GendUGt mailiRg of ballets, FeGeipt of mailed ballets, and other 257 258 ; 259 260 te pFeeyide se Wires tG yeterc• and nandidate- 261 262 2. The Director of Elections (Voter Registrar) is hereby directed to seek a certification 263 of no objection from the Office of the Attorney General using the preclearance 264 procedure provided by Virginia Code § 24.2-129(D) for the precinct change 265 authorized herein. The precinct change shall not be administered unless and until 266 the Attorney General has provided such certification or if 60 days lapses without 267 the Attorney General interposing an objection. Adopted by the City Council of the City of Virginia Beach, Virginia, on this day of 2026. APPROVED AS TO CONTENT: APPROVED AS TO LEGAL SUFFICIENCY: 3Voteristrar Cits r`At orney's Uffice CA17078 R-1 December 22, 2025 Harris eeteer g 27 Atl> IY' O 27 Atlas fry 58 Luxury C 4a Pacific&26th a+• C) Bitdneck Village ,�� Pacific 8 25T Apartments ` St o. x 24th St Virginia Beach �� 7q�h�1 `r:C'1ClV ,$atcriront Dr .13112 Sti �t $, 8ca�Pd t YaO`�a Pants&21 ytr2�$ttS to edtnt . iewed C 9 Virginia Beach Q Parks&19th Convention Center Virginia B ach McDonald's Ocean`front Treat yourself Virginia Beach [Lt7 for S2 j,)th St &Cypress Virginia Beach Virginia Beach y &Jefferson &Cypress - i Virginia s St Y Beach&Parks ti,in v Virginia Beach r. Virginia Beach 6 (Circle D Food Mart) &Colony t,cti 1 . Within precinct boundaries Bus Stop .3 miles G��pt P BrxeT1 Ad kl 1919 e�dgaV rice 3 For Your Pet's Sake 0 oad8` Long Bay Pointe', ice►Diminish g �JJ INI.iii es W Fpprais Boating Resort 0�w Myers Crab � Ber, Pats&Supplies 0 V,rg,naae U p S In z Bid N y s° Adam Keeling R or d EntlRd4, . P& `tv0 `I Saints Episcopal pA Z_ C arch Virginia Beach thomas Bishop I n 8n06s Y The wall 0 0 ?� O Virginia Beach Tennis as r� &Country ClubAt, a T3, L �r L yf� t , � ohn B Dey 0 14, o Elementary School a y a VAN#� C g =n '^ The Cove , Wimbledon On The Bay 0 0 Z .93 Miles from Precinct Boundary Bus Stop .3 miles I. FORMAL SESSION AGENDA 1. CONSENT AGENDA J. ORDINANCES/RESOLUTION 1. Ordinance to AMEND City Code Section 2-85 re leave carryover 2. Ordinance to AMEND City Code Section 2-105 re re-employment 3. Ordinance to AUTHORIZE extension of the employment contract for the City Manager (Requested by the City Council) 4. Resolution to PROVIDE for the issuance and sale of General Obligation Public Improvement Bonds, in the maximum amount of$163-Million and PROVIDE for the form, details and payment thereof re authorized public improvements 5. Ordinance to AUTHORIZE one (1) full-time pharmacist position within the FY 2025-26 Department of Emergency Medical Services (EMS) Operating Budget 6. Ordinance to APPROPRIATE an additional $496,432 from the fund balance of the Chesopeian Colony Dredging Special Service District Special Revenue Fund to the FY 2025-26 Capital Improvement Program ("CIP") for Capital Project#100277, "Chesopeian Colony Neighborhood Dredging II" redesign costs 7. Ordinance to ACCEPT and APPROPRIATE $25,283 from the Virginia Department of Behavioral Health and Developmental Services (DBHDS) to the FY 2025-26 Human Services Operating Budget re Forensic Discharge Planning programs 8. Ordinance to ACCEPT and APPROPRIATE $10,203 from the Virginia Beach Police Foundation to the FY 2025-26 Police Department Operating Budget re K-9 facility improvements 9. Ordinance to TRANSFER $375,921 within the Department of Public Utilities from the Water and Sewer Enterprise Fund Reserve for Contingencies to the FY 2025-26 Water and Sewer Enterprise Fund Operating Budget re arbitrage rebate payment to the Internal Revenue Service for 2020 revenue bonds �3 .1A B CITY OF VIRGI-NIA BEACH AGENDA ITEM ITEM: An Ordinance to Amend Section 2-85 of the City Code Pertaining to Leave Carryover MEETING DATE: January 6, 2026 ■ Background: Virginia Beach City Code Section 2-85 addresses the amount of annual leave employees may carry over each calendar year. It also prohibits payment for unused annual leave except upon termination of employment. This code section also applied to paid time off ("PTO"). PTO was created by the City of Virginia Beach when Virginia Code Section 51.1-169 adopted a hybrid retirement program which applied to employees hired after January 1, 2014 in a covered position. PTO was intended to bridge the gap until hybrid employees were eligible for short term disability coverage which is available only for hybrid employees. Hybrid employees currently accrue PTO and non-hybrid employees accrue annual and sick leave. Effective January 1, 2026, all City employees will accrue annual and sick leave and PTO will no longer be provided. ■ Considerations: The ordinance makes a technical correction in the section title to delete the reference to "PTO" which is no longer a leave type. ■ Recommendation: Approval of ordinance. ■ Attachments: Ordinance Recommended Action: Approval of ordinance. Submitting Department/Agency: Human Resources City Manager: Ov 1 AN ORDINANCE TO AMEND SECTION 2-85 2 OF THE CITY CODE PERTAINING TO LEAVE 3 CARRYOVER 4 5 SECTION AMENDED: § 2-85 6 7 BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF VIRGINIA BEACH, 8 VIRGINIA: 9 10 That Section 2-85 of the Code of the City of Virginia Beach, Virginia, is hereby 11 amended and reordained to read as follows: 12 13 Sec. 2-85. Leave and PTO carryover. 14 (a) No employee shall be paid for unused annual leave except upon termination of 15 employment. Upon termination, employees shall be paid straight time for accrued annual 16 leave, and payment shall be processed as expeditiously as possible. No employee shall 17 be allowed to carry more than four hundred (400) hours of accumulated annual leave 18 from one calendar year to the next if the employee is scheduled to work forty (40) hours 19 or more per consecutive workweek, or eighty (80) hours or more per consecutive pay 20 period if exempt under or excluded from the Fair Labor Standards Act of 1938, or is a 21 sworn law enforcement officer assigned to a fourteen-day work period, excluding 22 firefighters assigned to a twenty-one-day work period. No firefighter assigned to a twenty- 23 one-day work period shall be allowed to carry more than five hundred sixty (560) hours 24 of accumulated annual leave from one calendar year to the next, nor shall any employee 25 who terminates employment with the city receive pay for more than four hundred (400) 26 hours of accumulated annual leave if the employee is scheduled to work forty (40) hours 27 or more per consecutive workweek, or eighty (80) hours or more per consecutive pay 28 period if exempt under or excluded from the Fair Labor Standards Act of 1938, or is a 29 sworn law enforcement officer assigned to a fourteen-day work period; or five hundred 30 sixty (560) hours of accumulated annual leave if the employee is a firefighter assigned to 31 a twenty-one-day work period. 32 (b) Part-time employees hired on or after July 1, 1996, shall not be allowed to carry 33 more than one hundred twelve (112) hours of accumulated personal leave from one 34 calendar year to the next. Upon termination, employees shall be paid straight time for 35 personal leave, and payment shall be processed as expeditiously as possible. 36 Adopted by the City Council of the City of Virginia Beach, Virginia, on this 37 day of 2025. APPROVED AS TO CONTENT: APPROVED AS TO LEGAL SUFFICIENCY: L"�' A 9'L-- H an Resources City orney's Office CA17000 R-1 October 17, 2025 t CITY OF VIRGINIA BEACH AGENDA ITEM ITEM: An Ordinance to Revise Section 2-105 of the City Code Pertaining to Re- employment MEETING DATE: January 6, 2026 ■ Background: Re-employment is currently delineated from a reinstatement based on the gap between an individual's former service to the City and date of rehire. Reemployments are defined as gaps of 12 months or more and the second round of employment with the City is treated the same as a new hire in terms of seniority, leave accruals, probation period, etc. Reinstatements retain their service time to count toward seniority, leave accruals, and other longevity-based rewards. Reinstatements also have any sick leave balances restored and are not required to serve another probation period. The ordinance revision will provide re-employments with credit for their previous service with the City but will not restore former sick leave balances or negate the probationary period for the second period of employment. ■ Considerations: The current definition of re-employment does not incentivize former employees to return to City employment. The job market is tight for many occupations, and the City seeks cost effective policies to incentivize former employees who were in good standing to return to the City. This ordinance revision redefines re-employment to allow previous employment time to count toward the amount of annual leave accrual, longevity compensation awards and service awards. ■ Public Information: Normal Council Agenda process. ■ Recommendation: Adopt the attached ordinance. ■ Attachments: Ordinance Recommended Action: Approval of ordinance. i Submitting Department/Agency: Human Resources City Manager: \'` " 1 AN ORDINANCE TO AMEND SECTION 2-105 2 OF THE CITY CODE PERTAINING TO RE- 3 EMPLOYMENT 4 5 SECTION AMENDED: 2-105 6 7 BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF VIRGINIA BEACH, 8 VIRGINIA: 9 10 That Section 2-105 of the Code of the City of Virginia Beach, Virginia, is hereby 11 amended and reordained to read as follows: 12 13 Sec. 2-105. Re-employment. 14 (a) Re-employment shall be defined as the employment of a former full-time city 15 employee following a separation from city employment of more than twelve (12) 16 consecutive months, or the employment of a former part-time city employee, hired on or 17 after July 1, 1996, following a separation from city employment of any length of time. All 18 other conditions of section 2-104 shall apply. 19 (b) All time served in previous employment with the city shall Abe counted towards 20 the probation peFied, annual leave, service awards, and er—other longevity-based 21 employment conditions or benefits with the-e�G8PtffiGOf.—(!) he Virginia Re-fiTemepA 22 System benefit that i determin 23 ' 24 . 25 (c) Any time served in previous employment with the city shall not be counted towards 26 the probation period. 27 Adopted by the City Council of the City of Virginia Beach, Virginia, on this 28 day of , 2026. APPROVED AS TO CONTENT: APPROVED AS TO LEGAL SUFFICIENCY: Human Resources City A orney's Office CA17065 R-4 December 10, 2025 ffi . �s3 �t CITY OF VIRGINIA BEACH AGENDA ITEM ITEM: An Ordinance to Authorize Extension of the Employment Contract for the City Manager MEETING DATE: January 6, 2026 ■ Background: The City Council appointed Patrick Duhaney as City Manager in June 2020 and approved his employment contract for the term of July 20, 2020 to July 19, 2022. In 2021, the City Council extended his contract to July 19, 2025, and in 2023, the City Council extended his contract to July 19, 2027. The City Council and the City Manager desire to extend his contract by an additional three years. ■ Considerations: This ordinance authorizes the Mayor to execute the attached contract extension on behalf of the City. ■ Public Information: Public information will be provided through the normal Council agenda process. ■ Attachments: Ordinance, Third Amendment to Employment Agreement, and Employment Agreement with First and Second Amendments Requested by the City Council 1 AN ORDINANCE TO AUTHORIZE EXTENSION OF THE 2 EMPLOYMENT CONTRACT FOR THE CITY MANAGER 3 4 WHEREAS, the City Council appointed Patrick Duhaney as City Manager in June 5 2020 and approved his employment contract for the term of July 20, 2020, to July 19, 6 2022; 7 8 WHEREAS, in 2021, the City Council extended his contract to July 19, 2025, and 9 in 2023, the City Council extended his contract to July 19, 2027; and 10 11 WHEREAS, the City Council desires to extend his contract by an additional three 12 years. 13 14 NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF 15 VIRGINIA BEACH, VIRGINIA, THAT: 16 17 The Mayor is hereby authorized to execute the attached contract extension on 18 behalf of the City. Adopted by the Council of the City of Virginia Beach, Virginia, on the day of 2026. APPROVED AS TO LEGAL SUFFICIENCY: City Attorney's Office CA17071 R-1 December 22, 2025 THIRD AMENDMENT TO THE AGREEMENT BETWEEN THE CITY OF VIRGINIA BEACH,VIRGINIA AND PATRICK DUHANEY This Amendment, dated this _ day of January, 2026, is by and between the City of Virginia Beach, a body politic and corporate and political subdivision of the Commonwealth of Virginia ("City"), and Patrick Duhaney ("Employee") (collectively referred to herein as the "parties"), and amends the Employment Agreement entered into by the parties on June 23, 2020 ("Employment Agreement"), which was previously amended by an amendment dated June 24, 2021, and an amendment dated June 28, 2023. Whereas,the term of the Employment Agreement,as previously amended,is July 20,2020,to July 19, 2027, unless extended by mutual agreement of the City and the Employee, and whereas, the City and the Employee desire to extend the term of the Employment Agreement for three additional years. WITNESSETH: THAT FOR AND IN CONSIDERATION of the promises and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Employment Agreement is hereby modified as follows: 1. TERM: The City and the Employee agree to the extension of the Employment Agreement for the period of July 20, 2027,to July 19, 2030. 2. All the other terms, conditions, requirements, and provisions of the Employment Agreement shall remain in force and effect. WITNESS the following signatures: CITY OF VIRGINIA BEACH EMPLOYEE Mayor City Manager Patrick Duhaney EMPLOYMENT AGREEMENT This Agreement is entered into this-wr7 day of U Yj(ate_ 2020 by and between the CITY OF VIRGINIA BEACH, VIRGINIA, a municipal corporation, hereinafter referred to as"City"and Patrick Duhancy,hereinafter referred to as"Employee." WITNESSETH WHEREAS,the City wishes to hire Employee as its City Manager, WHEREAS,Employee agrees to accept such employment; and WHEREAS,the parties hereto desire to set forth herein the terms and conditions of such continued employment. NOW,THEREFORE,for and in consideration of the mutual covenants and obligations set forth herein and other good and valuable consideration, the parties hereto agree as follows: Article I—Duties (a) Employee shall perform the functions and duties of the position of City Manager in accordance with the provisions of the Charter of the City of Virginia Beach and all other applicable statutes and ordinances. (b) Employee shall perform such functions and duties in accordance with the policy and direction of the City Council. (c) Employee shall also perform any other legally permissible duties or functions as the City Council may deem appropriate to assign him at any time during the term hereof. I Article II—Term of Agreement (a) Except as otherwise provided herein,this Agreement shall commence July 20,2020 and end July 19, 2022, unless extended by mutual agreement of the City and Employee. (b) Except as provided by Article III; below, during the term hereof, Employee agrees to remain in the exclusive employ of the City. (c) Nothing herein shall be deemed to limit in any way the authority of City Council to terminate Employee at any time; provided, however that such termination shall be in accordance with the provisions of Article III,below. (d) Nothing herein shall be deemed to limit the right of Employee to voluntarily resign; provided, however, that such resignation shall be in accordance with Article III,below. Article III —Termination and Resignation: Severance Pay (a) In the event Employee is terminated by the City before the expiration of the term of this Agreement,he shall receive as severance pay an amount equal to twelve(12) months of his annual gross salary. In addition. City shall pay the total cost of COBRA continuation coverage for a period not to exceed nine months or until such time as Employee secures alternative employment providing employer-provided health benefits,whichever is earlier. Employee shall also be entitled to payment of all leave accrued as of the date termination in accordance with existing City policy. Except as provided in this paragraph, all other benefits shall cease as of the date of termination. However, if Employee is terminated for misfeasance, malfeasance. or nonfeasance in office, all compensation by the City shall end as of the date of terrnunation 2 (b) If Employee voluntarily resigns, then all compensation and benefits shall cease as of the effective date of such resignation. Employee shall give the City ninety (90) days written notice of any such resignation; provided, however, it is expressly understood that City Council may, in its sole discretion waive any or all of this ninety(90)day notice requirement. (c) In the event the City,at any time during the employment of Employee,reduces the salary or other fringe benefits of Employee by a percentage greater than the percentage of any across-the-board reduction for all City employees,or refuses to comply with any other provisions of the Agreement benefiting Employee,or in the event Employee resigns following the request of a majority of the members of City Council that he resign; then Employee may, at his option, be deemed to have been "terminated", and shall receive severance pay and benefits in accordance with Article III(a)of this Agreement. Article IV—Compensation This Agreement contemplates that the salary and benefits set forth herein may be adjusted by City Council annually,by ordinance. City Council agrees to pay Employee for services rendered pursuant hereto an annual gross salary of two hundred and seventy thousand dollars($270,000),payable in installments at the same time and in the same manner as other City employees are paid. Such annual gross salary will be increased annually by ordinance in an amount no less than the average increase for all other City employees for the corresponding fiscal year unless Employee has received an unsatisfactory performance evaluation. In addition to the annual gross salary described above, the City agrees to contribute an amount equal to 6 percent of Employee's salary, not to exceed the maximum permissible annual 3 contribution for which Employee is eligible, as announced by the Internal Revenue Services for each calendar year,distributed equally over the annual biweekly payroll cycle per year as deferred compensation, for the benefit of Employee, to the International City Management Retirement Corporation. This amount may be adjusted by City Council annually,by ordinance. Article V—Automobile Allowance In lieu of supplying a City-owned vehicle for use by Employee in conducting City business, City agrees to pay Employee a car allowance as additional salary in the sum of seven hundred and fifty Dollars($750)per month and in addition,Employee shall be reimbursed for business mileage at the same rate at which other City employees are reimbursed. Said sum for car allowance may be increased from time to time by action of the City Council. In consideration thereof,Employee shall provide his own vehicle and shall be solely responsible for all fuel, maintenance, insurance, and other expenses related thereto. This allowance amount may be adjusted by City Council annually, by ordinance. Article VI—Temporan* Housing and Moving Expenses Employee shall be required to establish residency within the City of Virginia Beach. City will reimburse the actual cost of temporary housing in an amount of up to $12,000 to Employee until permanent housing can be secured. In addition, the City will pay for usual and customary moving expenses for Employee to relocate to Virginia Beach. Employee will adhere to City guidelines for payment of moving expenses. 4 Article VII—Fringe Benefits (a) In addition to the Compensation set forth in Article IV and the Automobile Allowance set forth in Article V, the City agrees to provide the same hospitalization and medical insurance, including dental and vision coverage, available to all City employees in accordance with existing City policies and ordinances to the same extent as other City employees. Employee shall pay any premium or other cost associated with participation in these benefit programs on the same terms as all other City employees. Nothing herein shall be construed to prevent changes in the nature of such benefits to Employee should such benefits be subsequently altered for all other City employees. (b) Except as set forth in this Article VII,Employee shall receive fringe benefits such as paid time off ("PTO"), life insurance, hospitalization and medical insurance, Virginia Retirement System benefits, etc. in accordance with existing City policies and ordinances as applicable to all other City employees. Nothing herein shall be constructed to prevent changes in the nature of such benefits to Employee should such benefits be subsequently altered for all other City employees.Employee shall be credited with 15 days PTO on the first day of employment and then accrue PTO at the maximum rate allowed City employees under the City Code. Employee shall also receive 40 hours of executive leave annually. Article VIII—Hours of Emnlovment It is recognized that the nature of Employee's position requires flexible hours. Therefore, Employee in consideration of his compensation shall work whatever hours are necessary to satisfactorily perform the functions and duties of City Manager. 5 Article IX—Dues and Subscriptions City agrees to pay professional dues and subscriptions of Employee necessary for its membership and participation in national,regional,state,and local associations and organizations of a job-related nature(including the International City and County Management Association)and for travel and associated expenses of Employer to secure his attendance at professional meetings and conferences,as budgeted and approved by the City Council, Article X—General Business-Related Expenses Except as specifically provided in Articles V and VIII, the City agrees to reimburse Employee for job-related expenditures in accordance with existing City policy. Article X1—Other Terms and Conditions of Employment (a) The City agrees to evaluate the performance of Employee after six months of employment and thereafter at least once each year. All aspects of such evaluation shall be treated confidentially by the City and Employee subject to the provisions of the Freedom of Information Act. (b) The City Council may at any time prescribe any other terms and conditions of employment related to Employee's performance as City Manager as it may deem necessary, provided such terms and conditions are not inconsistent with the specific provisions of this Agreement. 6 (c) City agrees to provide self-insurance coverage and legal counsel for Employee in matters relating to his official duties within the scope of his employment,as is provided to all other City employees. (d) All provisions of state or city law or policy relating to terms and conditions of municipal employment generally as they now exist or may hereafter be amended shall apply to Employee; provided however, that should any such law or policy be so changed as to be inconsistent with the terms hereof,this Agreement shall be deemed amended so as to comply with such law or policy. (e) The text herein shall constitute the entire Agreement between the parties and shall only be amended by a writing executed by both parties. (f) If any provision hereof shall be deemed unlawful, invalid, ultra vires, or otherwise unenforceable, the remainder of the Agreement shall be deemed severable and shall remain in full force and effect. (g) This Agreement supersedes any other agreement between the parties. IN WITNESS WHEREOF, the City of Virginia Beach has caused this Agreement to be executed on its behalf by its mayor in accordance with an ordinance of the City Council authorizing such execution, and Employee, Patrick Duhaney, has executed this Agreement, both the day and year first above written. CITY OF YJFGINIA BEACH BY 'Mayor BY Q V 0—�- �P Patrick Duhaney 7 AMENDMENT TO THE AGREEMENT BETWEEN THE CITY OF VIRGINIA BEACH,VIRGINIA AND PATRICK DUHANEY This Amendment,dated this eday of June,2021, is by and between the City of Virginia Beach, a body politic and corporate and political subdivision of the Commonwealth of Virginia ("City"),and Patrick Duhaney("Employee")(collectively referred to herein as the"parties"), and amends the Employment Agreement entered into by the parties on June 23, 2020 ("Employment Agreement"). Whereas, the term of the Employment Agreement is July 20, 2020 to July 19, 2022, unless extended by mutual agreement of the City and the Employee, and whereas, the City and the Employee desire to extend the tern of the Employment Agreement for three additional years. WITNESSETH: THAT FOR AND IN CONSIDERATION of the promises and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Employment Agreement is hereby modified as follows: 1. TERM: The City and the Employee agree to the extension of the Employment Agreement for the period of July 20, 2022 through July 19, 2025. 2. All the other terms, conditions, requirements, and provisions of the Employment Agreement shall remain in force and effect. WITNESS the following signatures: CITY OF VIRGINIA BEACH EMPLOYEE Vyor City Manager Patrick Duhaney SECOND AMENDMENT TO THE AGREEMENT BETWEEN THE CITY OF VIRGINIA BEACH, VIRGINIA AND PATRICK DUHANEY This Amendment, dated this 0 day of June,2023,is by and between the City of Virginia Beach, a body politic and corporate and political subdivision of the Commonwealth of Virginia ("City"),and Patrick Duhaney(`Employee")(collectively referred to herein as the"parties"), and amends the Employment Agreement entered into by the parties on June 23, 2020 ("Employment Agreement"), which was previously amended by an amendment dated June 24, 2021. Whereas,the term of the Employment Agreement, as previously amended,is July 20,2020,to July 19, 2025, unless extended by mutual agreement of the City and the Employee, and whereas, the City and the Employee desire to extend the term of the Employment Agreement for two additional years. WITNESSETH: THAT FOR AND IN CONSIDERATION of the promises and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,the Employment Agreement is hereby modified as follows: 1. TERM: The City and the Employee agree to the extension of the Employment Agreement for the period of July 20, 2025, to July 19, 2027. 2. All the other terms, conditions, requirements, and provisions of the Employment Agreement shall remain in force and effect. WITNESS the following signatures: CITY OF VIRGINIA BEACH EMPLOYEE ayor City Manager Patrick Dulaney \NU BFgC CITY OF VIRGINIA BEACH AGENDA ITEM ITEM: Resolution of the City of Virginia Beach, Virginia, Providing for the Issuance and Sale of General Obligation Public Improvement Bonds in the Maximum Amount of $163,000,000 to Fund Heretofore Authorized Public Improvements, and General Obligation Public Improvement Refunding Bonds and Providing for the Form, Details and Payment Thereof MEETING DATE: January 6, 2026 ■Background: Based on a review of capital project expenditures, the Department of Finance has begun preparations for a General Obligation "new money" bond issue in the maximum principal amount of $163,000,000. The "new money" issue is composed of the remaining balance of the 2020, 2021 and 2021, 2022 and a portion of the 2023 Charter Bond Authorizations previously approved by City Council on May 12, 2020, May 11, 2021, May 10, 2022, and May 9, 2023, respectively. The bond proceeds from the proposed issue would reimburse prior expenditures for City and School capital projects. A preliminary project list is attached and is subject to change. Based on current market conditions, the City's financial advisor is planning the bond sale for February 12, 2026. In addition to the "new money" issue, the Department of Finance and the City's financial advisor recommend that the City include a "current refunding" series to refund bonds of up to $83.7 million to reduce future debt service costs. The current favorable market supports the refinancing of portions of the outstanding 2013A, 2015A, 2015B, 2016A and 2016B General Obligation bonds. The refunding bonds would only be issued if the minimum net present value debt service savings of 3.0% threshold was met. Per the industry's best practice, the final maturity date of the refunded bonds would not be extended. The exact amount and structure of the refunding issue is subject to change, up to the sale date. ■Considerations: The "new money" sale represents the City's historic practice of issuing general obligation bonds on a regular basis to reimburse capital expenditures. The City's bond counsel, Kutak Rock LLP, has prepared the enclosed resolution authorizing the issuance and sale of both the "new money" and refunding bonds. Both series of bonds will be sold electronically by competitive bid, with the actions of the City Manager being conclusive; provided, the 2026 Series A and B Bonds shall have a true interest cost not to exceed 5.0%. The sale results of the bond issue will be reported to City Council shortly after pricing. ■ Public Information: Public information will be handled through the normal Council agenda process. The original Charter Bond Authorizations were part of the public information process of the City's Resource Management Plan (Budget/CIP). The resolution authorizes the distribution of the Preliminary Official Statement (POS) for marketing purposes. Also, a Notice of Sale will be posted on the Municipal Securities Rulemaking Board's (MSRB) Electronic Municipal Market Access (EMMA) site. ■ Attachments: Resolution; Preliminary Project List Recommended Action: Approval Submitting Department/Agency: Finance Department City Manager: O� RESOLUTION OF THE CITY OF VIRGINIA BEACH, VIRGINIA, PROVIDING FOR THE ISSUANCE AND SALE OF GENERAL OBLIGATION PUBLIC IMPROVEMENT BONDS IN THE MAXIMUM AMOUNT OF $163,000,000 TO FUND HERETOFORE AUTHORIZED PUBLIC IMPROVEMENTS AND GENERAL OBLIGATION PUBLIC IMPROVEMENT REFUNDING BONDS IN THE PRINCIPAL AMOUNT NECESSARY TO REFUND FOR SAVINGS PREVIOUSLY AUTHORIZED AND ISSUED BONDS, AND PROVIDING FOR THE FORM, DETAILS AND PAYMENT THEREOF The issuance of $69,741,841 of bonds of the City was authorized by an ordinance adopted by the City Council on May 12, 2020, without being submitted to the qualified voters of the City, to finance various public improvements, including schools, roadways, coastal projects, economic and tourism projects, building and parks and recreation projects, $46,797,751 of which have been issued and sold, leaving an unsold balance of$22,944,090. The issuance of $68,652,307 of bonds of the City was authorized by an ordinance adopted by the City Council on May 11, 2021 and administratively reduced to $61,678,775, without being submitted to the qualified voters of the City, to finance various public improvements, including schools, roadways, coastal projects, economic and tourism projects, building and parks and recreation projects,none of which have been issued and sold. The issuance of $567,500,000 of bonds of the City was authorized by an ordinance adopted by the City Council on November 16, 2021 (the "2021 Referendum Authorization") , after having been submitted to and approved by the qualified voters of the City, to finance twenty-one projects for a comprehensive flood mitigation program, $118,000,000 of which have been issued and sold, leaving an unsold balance of $449,500,000 of the 2021 Referendum Authorization, such bond authorization having been extended for a ten year duration by Order of the Circuit Court of the City of Virginia Beach dated December 21, 2021. The issuance of $69,107,404 of bonds of the City was authorized by an ordinance adopted by the City Council on May 10, 2022, without being submitted to the qualified voters of the City, to finance various public improvements, including schools, roadways, coastal projects, economic and tourism projects, building and parks and recreation projects, none of which have been issued and sold. The issuance of $62,460,057 of bonds of the City was authorized by an ordinance adopted by the City Council on May 9, 2023, without being submitted to the qualified voters of the City, to finance various public improvements, including schools, roadways, coastal projects, economic and tourism projects, building and parks and recreation projects, none of which have been issued and sold. The issuance of $71,116,108 of bonds of the City was authorized by an ordinance adopted by the City Council on May 14, 2024, without being submitted to the qualified voters of the City, to finance various public improvements, including schools, roadways, coastal projects, economic and tourism projects, building and parks and recreation projects, none of which have been issued and sold. The issuance of $72,827,365 of bonds of the City was authorized by an ordinance adopted by the City Council on May 13, 2025, without being submitted to the qualified voters of the City, to finance various public improvements, including schools, roadways, coastal projects, economic and tourism projects, building and parks and recreation projects, none of which have been issued and sold. The issuance of $11,800,000 of bonds of the City was authorized by an ordinance adopted by the City Council on May 13, 2025, without being submitted to the qualified voters of the City, to finance various public improvements and undertakings related to flood protection, none of which have been issued and sold. It has been recommended to the City Council by representatives of Davenport & Company LLC (the "Municipal Advisor") that the City issue and sell a series of general obligation public improvement bonds in the maximum principal amount of $163,000,000. The City Council has determined it is in the City's best interest to issue and sell up to $22,944,090 of the bonds authorized on May 12, 2020; up to $61,678,775 of the bonds authorized on May 11, 2021; up to $69,107,404 of the bonds authorized on May 10, 2022; and up to $9,269,731 of the bonds authorized on May 9, 2023. The City has previously issued several series of General Obligation Public Improvement Bonds and General Obligation Public Improvement Refunding Bonds portions of which remain outstanding (the "Prior Bonds"). It has been recommended to the City Council by the Municipal Advisor that the City may achieve debt service savings by refunding all or portions of certain of the Prior Bonds through the issuance of general obligation public improvement refunding bonds, subject to certain parameters set forth herein. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VIRGINIA BEACH,VIRGINIA: 1. Issuance of Bonds. There shall be issued, pursuant to the Constitution and statutes of the Commonwealth of Virginia, including the City Charter (Chapter 147 of the Acts of the General Assembly of 1962, as amended) and the Public Finance Act of 1991 (Chapter 26, Title 15.2, Code of Virginia of 1950, as amended), general obligation public improvement bonds of the City in the maximum principal amount of $163,000,000 (the "Public Improvement Bonds") and general obligation public improvement refunding bonds of the City in the maximum principal amount necessary to pay the principal of, premium if any, and interest on any Prior Bonds to be refunded plus related issuance costs and expenses of issuing bonds for such refunding (the "Refunding Bonds," and collectively with the Public Improvement Bonds, the `Bonds"). The proceeds of the Public Improvement Bonds will be used to provide funds to finance, in part, the costs of various public, school, road and highway, coastal, economic and tourism, buildings and parks and recreation, as more fully described in the ordinances authorizing the Public Improvement Bonds adopted on May 12, 2020, May 11, 2021, May 10, 2022 and May 9, 2023. The proceeds of the Refunding Bonds will be used to refund a portion of 2 the Prior Bonds or selected maturities or portions of maturities thereof for debt service savings as herein authorized. Proceeds of the Public Improvement Bonds and Refunding Bonds may also be applied to the costs incurred in connection with issuing such obligations. 2. Bond Details. The Bonds may be issued in one or more series, including issuance as a combined series, and shall be designated "General Obligation Public Improvement Bonds;"provided any Bonds issued in whole or in part as Refunding Bonds shall also contain the word "Refunding" in such designation. The Bonds shall contain the series designation 2026 or such other designation as may be determined by the City Manager, shall be in registered form, shall be dated such date as may be determined by the City Manager, shall be in denominations of $5,000 and integral multiples thereof and shall be numbered R 1 or RF-1 upward as appropriate. The Bonds if issued as separate series may be sold at the same time or at different times as determined by the City Manager in consultation with the Municipal Advisor, and the principal amount of each series of Bonds shall be determined by the City Manager in his discretion in consultation with the Municipal Advisor. The Bonds may be sold as taxable or tax-exempt obligations as the City Manager may determine in consultation with the Municipal Advisor and the City's Bond Counsel. Subject to Section 9, the issuance and sale of the Bonds are authorized on terms as shall be satisfactory to the City Manager; provided, the Bonds (a) shall have a "true" or "Canadian" interest cost not to exceed (i) 5.00% with respect to the Public Improvement Bonds and (ii) 5.00% with respect to the Refunding Bonds (in each case taking into account any original issue premium or discount), (b) shall be sold to the purchaser or purchasers thereof at a price not less than 99% of the principal amount thereof, (c) shall be subject to optional redemption beginning no later than and continuing after August 1, 2037, at an optional redemption price of no more than 102% of the principal amount to be redeemed plus accrued interest to the optional redemption date, and (d) shall mature annually in installments through serial maturities or mandatory sinking fund payments beginning no later than August 1, 2027, and ending no later than August 1, 2047 provided, however, the maturity of any Refunding Bonds shall not be later than the end of the fiscal year in which the related series of Prior Bonds to be refunded matures. Principal of the Bonds shall be payable annually on dates determined by the City Manager, which principal payment dates need not be the same for each series. Each Bond shall bear interest at such rate as shall be determined at the time of sale, calculated on the basis of a 360-day year of twelve 30-day months, and payable semiannually on dates determined by the City Manager. Principal shall be payable to the registered owners upon surrender of Bonds as they become due at the office of the Registrar (as hereinafter defined). Interest 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 Registrar on a date prior to each interest payment date that shall be determined by the City Manager (the "Record Date"). Principal, premium, if any, and interest shall be payable in lawful money of the United States of America. Initially, one Bond certificate for each maturity of the Bonds shall be issued to and registered in the name of The Depository Trust Company,New York,New York ("DTC"), or its nominee. The City has heretofore entered into a Blanket Issuer Letter of Representations relating to a book-entry system to be maintained by DTC with respect to the Bonds. "Securities Depository" shall mean DTC or any other securities depository for the Bonds appointed pursuant to this Section 2. 3 In the event that (a)the Securities Depository determines not to continue to act as the securities depository for the Bonds by giving notice to the Registrar, and the City discharges its responsibilities hereunder, or (b)the City, in its sole discretion, determines (i)that beneficial owners of Bonds shall be able to obtain certificated Bonds or (ii)to select a new Securities Depository, then the City's Director of Finance shall, at the direction of the City Manager, attempt to locate another qualified securities depository to serve as Securities Depository and authenticate and deliver certificated Bonds to the new Securities Depository or its nominee, or authenticate and deliver certificated Bonds to the beneficial owners or to the Securities Depository participants on behalf of beneficial owners substantially in the form provided for in Section 6; provided, that such form shall provide for interest on the Bonds to be payable (A) from the date of the Bonds if they are authenticated prior to the first interest payment date, or (B) from the interest payment date that is or immediately precedes the date on which the Bonds are authenticated (unless payment of interest thereon is in default, in which case interest on such Bonds shall be payable from the date to which interest has been paid). In delivering certificated Bonds, the City's Director of Finance shall be entitled to rely 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 Bonds will then be registrable, transferable and exchangeable as set forth in Section 8. So long as there is a Securities Depository for the Bonds, (1) it or its nominee shall be the registered owner of the Bonds, (2)notwithstanding anything to the contrary in this Resolution, determinations of persons entitled to payment of principal, premium, if any, and interest, transfers of ownership and exchanges, and receipt of notices shall be the responsibility of the Securities Depository and shall be effected pursuant to rules and procedures established by such Securities Depository, (3)the Registrar and the City shall not be responsible or liable for maintaining, supervising or reviewing the records maintained by the Securities Depository, its participants or persons acting through such participants, (4)references in this Resolution to registered owners of the Bonds shall mean such Securities Depository or its nominee and shall not mean the beneficial owners of the Bonds, and (5) in the event of any inconsistency between the provisions of this Resolution and the provisions of the above-referenced Blanket Issuer Letter of Representations, such provisions of the Blanket Issuer Letter of Representations, except to the extent set forth in this paragraph and the next preceding paragraph, shall control. 3. Refunding Provisions The City Manager is authorized and directed to select the principal maturities of the Prior Bonds or portions of such maturities to be refunded and to cause to be called for optional redemption any such maturity or portion thereof to be redeemed prior to its stated maturity in accordance with the provisions of such bonds; provided such maturities or portions thereof selected are expected in the aggregate to provide a minimum savings of 3.00% on a net present value basis as determined by the Municipal Advisor. In connection with the refunding herein authorized, the City Manager, if determined necessary or appropriate in consultation with the Municipal Advisor, is authorized to retain the services of independent consultants to provide verification reports (the "Verification Agent") on aspects of the refunding and is further authorized to retain the services of one or more escrow agents (the "Escrow Agent") and to enter into escrow agreements with them to the extent needed to hold and provide for investment of all or portions of the proceeds of the Refunding Bonds in qualifying escrow securities and 4 investments as needed pending their application to refund the Prior Bonds or portions thereof selected to be refunded. 4. Redemntion Provisions. (a) Optional Redemption. The Bonds shall be subject to redemption prior to maturity at the option of the City Manager, in whole or in part, at any time on and after dates, if any, determined by the City Manager, with the first such optional redemption date beginning no later than August 1, 2037 as set forth in Section 2 at a redemption price equal to the principal amount to be redeemed, together with any interest accrued to the date fixed for redemption, plus a redemption premium, if any, not to exceed 2% of the principal amount to be redeemed, such redemption premium to be determined by the City Manager in consultation with the Municipal Advisor. (b) Mandatory Sinking Fund Redemption. Any term bonds may be subject to mandatory sinking fund redemption upon terms determined by the City Manager. If so determined by the City Manager, the Bonds may provide that the City may take a credit against the mandatory sinking fund redemption obligation of any maturity of term Bonds in the amount of Bonds of the same maturity that have been optionally redeemed or surrendered for cancellation and have not been applied previously as such a credit. If the City wishes to take such a credit, on or before the 70th day next preceding any such mandatory sinking fund redemption date, the City's Director of Finance may instruct the Registrar to apply a credit against the City's mandatory sinking fund redemption obligation for any Bonds of the applicable maturity that have been optionally redeemed or surrendered for cancellation by the City and have not been previously applied as a credit against any mandatory sinking fund redemption obligation for that maturity of the Bonds. Each Bond so previously optionally redeemed or surrendered shall be credited at 100% of the principal amount thereof against the principal amount of such maturity of the Bonds required to be redeemed on such mandatory sinking fund redemption date or dates for such maturity as may be selected by the Director of Finance. (c) Selection of Bonds for Redemption. If less than all of the Bonds are called for optional redemption, the maturities of the Bonds to be redeemed shall be selected by the City's Director of Finance in such manner as may be determined to be in the best interest of the City. If less than all of a particular maturity of the Bonds are called for redemption, the Bonds within such maturity to be redeemed shall be selected by the Securities Depository pursuant to its rules and procedures or, if the book-entry system is discontinued, shall be selected by the Registrar by lot in such manner as the Registrar in its discretion may determine. In either case, (a)the portion of any Bond to be redeemed shall be in the principal amount of$5,000 or some integral multiple thereof and (b) in selecting Bonds for redemption, each Bond shall be considered as representing that number of Bonds that is obtained by dividing the principal amount of such Bond by $5,000. (d) Redemption Notices. The City shall cause notice of the call for redemption identifying the Bonds or portions thereof to be redeemed to be sent by electronic transmission, facsimile transmission, registered or certified mail or overnight express delivery, not less than 30 nor more than 60 days prior to the redemption date, to the registered owner of the Bonds. The City shall not be responsible for providing notice of redemption to anyone other than DTC or 5 another qualified Securities Depository or its nominee unless no qualified Securities Depository is the registered owner of the Bonds. If no qualified Securities Depository is the registered owner of the Bonds, notice of redemption shall be provided to the registered owners of the Bonds. If a portion of a Bond is called for redemption, a new Bond in principal amount equal to the unredeemed portion thereof will be issued to the registered owner upon the surrender thereof. 5. Execution and Authentication. The Bonds shall be signed by the manual or facsimile signature of the Mayor or Vice-Mayor, shall be countersigned by the manual or facsimile signature of the City Clerk or Deputy Clerk, and the City's seal shall be affixed thereto or a facsimile thereof printed thereon;provided, that if both of such signatures are facsimiles, no Bond shall be valid until it has been authenticated by the manual signature of the City Treasurer, as Registrar, or an authorized officer or employee of any bank or trust company serving as successor Registrar and the date of authentication noted thereon. 6. Bond Form. The Bonds shall be in substantially the form attached to this Resolution as Exhibit A, with such completions, omissions, insertions and changes not inconsistent with this Resolution as may be approved by the officers signing the Bonds, whose approval shall be evidenced conclusively by the execution and delivery of the Bonds. 7. Pledge of Full Faith and Credit. The full faith and credit of the City are irrevocably pledged for the payment of the principal of, premium, if any, and interest on the Bonds. Unless other funds are lawfully available and appropriated for timely payment of the Bonds,the City Council shall levy and collect an annual ad valorem tax, over and above all other taxes authorized or limited by law and without limitation as to rate or amount, on all locally taxable property in the City sufficient to pay when due the principal of, premium, if any, and interest on the Bonds. 8. Registration, Transfer and Owners of Bonds. The City Treasurer is appointed paying agent and registrar for the Bonds(the"Registrar"). The City may appoint a qualified bank or trust company as successor paying agent and registrar of the Bonds. The Registrar shall maintain registration books for the registration and registration of transfers of the Bonds. Upon presentation and surrender of any Bonds at the office of the Registrar, or at its designated corporate trust office if the Registrar is a bank or trust company, together with an assignment duly executed by the registered owner or his duly authorized attorney or legal representative in such form as shall be satisfactory to the Registrar, the City shall execute, and the Registrar shall authenticate, if required by Section 5, and shall deliver in exchange, a new Bond or Bonds having an equal aggregate principal amount, in authorized denominations, of the same form and maturity, bearing interest at the same rate and registered in the name as requested by the then registered owner thereof or its duly authorized attorney or legal representative. Any such transfer or exchange shall be at the expense of the City, except that the Registrar may charge the person requesting such transfer or exchange the amount of any tax or other governmental charge required to be paid with respect thereto. The Registrar shall treat the registered owner as the person or entity exclusively entitled to payment of principal, premium, if any, and interest and the exercise of all other rights and powers of the owner, except that interest payments shall be made to the person or entity shown as owner on the registration books as of the Record Date. 6 9. Sale of Bonds. The City Council approves the following terms of the sale of the Bonds. The Bonds shall be sold by competitive bid in a principal amount to be determined by the City Manager, in collaboration with the Municipal Advisor, and subject to the limitations set forth in Sections 1 through 4, and the City Manager shall receive bids for the Bonds and award the Bonds to the bidder providing the lowest "true" or "Canadian" interest cost, subject to the sale provisions and limitations set forth in Section 2. Following the sale of the Bonds, the City Manager shall file a certificate with the City Clerk setting forth the final terms of the Bonds. The actions of the City Manager in selling the Bonds shall be conclusive, and no further action with respect to the sale and issuance of the Bonds shall be necessary on the part of the City Council. 10. Notice of Sale. The City Manager, in collaboration with the Municipal Advisor, is authorized and directed to take all proper steps to advertise the Bonds for sale substantially in accordance with the form of the Notice of Sale, which form is attached as an Appendix to the draft of the Preliminary Official Statement described in Section 11 below, and which form is approved; provided, that the City Manager, in collaboration with the Municipal Advisor, may make such changes in the Notice of Sale not inconsistent with this Resolution as he may consider to be in the best interest of the City. 11. Official Statement. A draft of a Preliminary Official Statement relating to the Bonds, a copy of which has been provided or made available to each member of the City Council, is approved as the form of the Preliminary Official Statement by which the Bonds will be offered for sale, with such completions, omissions, insertions and changes not inconsistent with this Resolution as the City Manager, in collaboration with the Municipal Advisor, may consider appropriate. After the Bonds have been sold, the City Manager, in collaboration with the Municipal Advisor, shall make such completions, omissions, insertions and changes in the Preliminary Official Statement not inconsistent with this Resolution as are necessary or desirable to complete it as a final Official Statement for the Bonds, execution thereof by the City Manager to constitute conclusive evidence of his approval of any such completions, omissions, insertions and changes. The City shall arrange for the delivery to the purchaser of the Bonds of a reasonable number of copies of the final Official Statement by the earlier of seven business days after the Bonds have been sold or the date of issuance thereof, for delivery to each potential investor requesting a copy of the Official Statement and for delivery to each person to whom such purchaser initially sells Bonds. 12. Official Statement Deemed Final. The City Manager is authorized, on behalf of the City, to deem the Preliminary Official Statement and the Official Statement in final form for the Bonds, each to be final as of its date within the meaning of Rule 15c2-12 ("Rule 15c2-12") of the Securities and Exchange Commission (the "SEC"), except for the omission in the Preliminary Official Statement of certain pricing and other information permitted to be omitted pursuant to Rule 15c2-12. The distribution of the Preliminary Official Statement and the Official Statement in final form shall be conclusive evidence that each has been deemed final as of its date by the City, except for the omission in the Preliminary Official Statement of such pricing and other information permitted to be omitted pursuant to Rule 15c2-12. 13. Preparation and Delivery of Bonds. After bids have been received and the Bonds have been awarded to the winning bidder, the officers of the City are authorized and 7 directed to take all proper steps to have the Bonds prepared and executed in accordance with their terms and to deliver the Bonds to the purchaser thereof upon payment therefor. 14. Arbitrage Covenants. The City covenants that it shall not take or omit to take any action the taking or omission of which will cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, and regulations issued pursuant thereto (the"Code"), or otherwise cause interest on the Bonds to be includable in the gross income of the registered owners thereof under existing laws. Without limiting the generality of the foregoing, the City shall comply with any provision of law that may require the City at any time to rebate to the United States any part of the earnings derived from the investment of the gross proceeds of the Bonds, unless the City receives an opinion of nationally recognized bond counsel that such compliance is not required to prevent interest on the Bonds from being includable in the gross income of the registered owners thereof under existing law. The City shall pay any such required rebate from its legally available funds. 15. Non-Arbitrage Certificate and Elections. Such officers of the City as may be requested are authorized and directed to execute an appropriate certificate setting forth the reasonably expected use and investment of the proceeds of the Bonds in order to show that such reasonably expected use and investment will not violate the provisions of Section 148 of the Code, and any elections such officers deem desirable regarding rebate of earnings to the United States, for purposes of complying with Section 148 of the Code. Such certificate and elections shall be in such form as may be requested by bond counsel for the City. 16. Limitation on Private Use. The City covenants that it shall not permit the proceeds of the Bonds or the facilities financed with the proceeds of the Bonds to be used in any manner that would result in (a) 5% or more of such proceeds or of the facilities financed with such proceeds being used in a trade or business carried on by any person other than a governmental unit, as provided in Section 141(b) of the Code, (b) 5% or more of such proceeds or the facilities being financed with such proceeds being used with respect to any output facility (other than a facility for the furnishing of water), within the meaning of Section 141(b)(4) of the Code, or (c) 5% or more of such proceeds being used directly or indirectly to make or finance loans to any person other than a governmental unit, as provided in Section 141(c) of the Code; provided, that if the City receives an opinion of nationally recognized bond counsel that any such covenants need not be complied with to prevent the interest on the Bonds from being includable in the gross income for federal income tax purposes of the registered owners thereof under existing law,the City need not comply with such covenants. 17. _Post-Issuance Compliance. The Post Issuance Compliance Procedures established as directed by resolution of the City Council adopted on March 13, 2012 and as amended from time to time will apply to the Bonds to ensure that the proceeds of the Bonds and the projects financed with such proceeds are used in compliance with the provisions of federal tax law applicable to tax-exempt governmental obligations. 18. Continuing Disclosure Agreement. The Mayor, the City Manager and such officer or officers of the City as either may designate are hereby authorized and directed to execute and deliver a continuing disclosure agreement setting forth the reports and notices to be filed by the City and containing such covenants as may be necessary to assist the purchaser of 8 the Bonds in complying with the provisions of Rule 15c2-12. Such continuing disclosure agreement shall be substantially in the form attached as an Appendix to the draft of the Preliminary Official Statement described in Section 11 above, which form is approved with such completions, omissions, insertions and changes that are not inconsistent with this Resolution. The Mayor, the City Manager and such other officers of the City as either may designate are further authorized to the extent necessary or appropriate to develop, implement or enhance procedures to ensure compliance with the City's undertakings related to Rule 15c2-12 for all obligations issued and to be issued by the City to which such Rule applies. 19. Other Actions. All other actions of officers of the City and of the City Council in conformity with the purposes and intent of this Resolution and in furtherance of the issuance and sale of the Bonds are hereby ratified, approved and confirmed. The City Manager or his designee is authorized to transfer funds to the City of Virginia Beach Public Schools for projects to be reimbursed from proceeds of the Bonds, and any funds previously transferred for such purpose is hereby ratified, confirmed and shall be reimbursed from proceeds of the Bonds. The officers of the City are authorized and directed to execute and deliver all certificates and instruments and to take all such further action as may be considered necessary or desirable in connection with the issuance, sale and delivery of the Bonds. 20. Investment Authorization. The City Council hereby authorizes the Director of Finance to direct the City Treasurer to utilize the State Non-Arbitrage Program of the Commonwealth of Virginia ("SNAP") in connection with the investment of certain of the proceeds of the Bonds, if the City Manager and the Director of Finance determine that the utilization of SNAP is in the best interest of the City. The City Council acknowledges that the Treasury Board of the Commonwealth of Virginia is not, and shall not be, in any way liable to the City in connection with SNAP, except as otherwise provided in the SNAP Contract. In the event SNAP does not provide for the investment of funds in government or other permissible securities in which the City Manager and Director of Finance desire to invest all or a portion of such funds, such officers may also select a qualified public depository to hold and invest such funds in permissible investments pending application for authorized public improvements. 21. Repeal of Conflicting Resolutions. All resolutions or parts of resolutions in conflict herewith are repealed. 22. Effective Date. This Resolution shall take effect immediately. Exhibit A—Form of Bond 9 Exhibit A—Form of Bond 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 this 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 No. UNITED STATES OF AMERICA COMMONWEALTH OF VIRGINIA CITY OF VIRGINIA BEACH General Obligation Public Improvement [and Refunding] Bond Series 2026A INTEREST RATE MATURITY DATE DATED DATE CUSIP % ,2026 REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: DOLLARS The City of Virginia Beach, Virginia (the "City"), for value received, promises to pay, upon surrender hereof to the registered owner hereof, or registered assigns or legal representative, the Principal Amount stated above on the Maturity Date stated above, subject to prior redemption as hereinafter provided, and promises to pay interest hereon from the Dated Date stated above on each and ,beginning , 20_, at the annual Interest Rate stated above, calculated on the basis of a 360-day year of twelve 30-day months. Principal, premium, if any, and interest are payable in lawful money of the United States of America by the City Treasurer, who has been appointed Registrar (the "Registrar"). The City may appoint a qualified bank as successor paying agent and registrar for the bonds. Notwithstanding any other provision hereof, this bond is subject to a book-entry system maintained by The Depository Trust Company ("DTC"), and the payment of principal,premium, if any, and interest, the providing of notices and other matters shall be made as described in the City's Blanket Issuer Letter of Representations to DTC. This bond is one of an issue of $ General Obligation Public Improvement [and Refunding] Bonds, Series 2026A(the"Bonds"), of like date and tenor, except as to number, denomination, rate of interest, privilege of redemption and maturity, and is issued pursuant to the Constitution and statutes of the Commonwealth of Virginia, including the City Charter and the Public Finance Act of 1991. The Bonds have been authorized by ordinances adopted by the City Council of the City of Virginia Beach (the "City Council") on May 12, 2020, May 11, 2021, May 10, 2022 and May 9, 2023, and are being issued pursuant to a resolution adopted by the City Council on [January 6, 2026] (the "Bond Resolution"), to finance various public, school, road and highway, coastal, economic and tourism, building and parks and recreation and to pay costs of issuance of the Bonds. The Bonds maturing on or before , 20_, are not subject to optional redemption prior to maturity. The Bonds maturing on or after , 20 are subject to redemption prior to maturity at the option of the City on or after , 20 in whole or in part at any time (in any multiple of$5,000), upon payment of the following redemption prices (expressed as a percentage of principal amount of the Bonds to be redeemed) plus interest accrued and unpaid to the date fixed for redemption: Period During Which Redeemed Both Dates Inclusive) Redemption Price [The Bonds maturing on , 20_, are required to be redeemed in part before maturity by the City on 20_,in the years and amounts set forth below, at a redemption price equal to 100% of the principal amount of the Bonds to be redeemed, plus interest accrued and unpaid to the date fixed for redemption: Year Amount Year Amount The Bond Resolution provides for a credit against the mandatory sinking fund redemption of the Bonds maturing on , 20_ in the amount of Bonds of the same maturity that have been optionally redeemed or surrendered for cancellation and have not been applied previously as such a credit.] If less than all of the Bonds are called for optional redemption, the maturities of the Bonds to be redeemed shall be selected by the City's Director of Finance in such manner as may be determined to be in the best interest of the City. If less than all the Bonds of a particular maturity are called for redemption, the Bonds within such maturity to be redeemed shall be selected by DTC or any successor securities depository pursuant to its rules and procedures or, if the book entry system is discontinued, shall be selected by the Registrar by lot in such manner as the Registrar in its discretion may determine. In either case, (a)the portion of any Bond to be redeemed shall be in the principal amount of$5,000 or some integral multiple thereof and (b) in selecting Bonds for redemption, each Bond shall be considered as representing that number of Bonds that is obtained by dividing the principal amount of such Bond by $5,000. A-2 The City shall cause notice of the call for redemption identifying the Bonds or portions thereof to be redeemed to be sent by electronic transmission, facsimile transmission, registered or certified mail or overnight express delivery, not less than 30 nor more than 60 days prior to the redemption date, to DTC or its nominee as the registered owner hereof. If a portion of this bond is called for redemption, a new Bond in the principal amount of the unredeemed portion hereof will be issued to the registered owner upon surrender hereof. The full faith and credit of the City are irrevocably pledged for the payment of principal of, premium, if any, and interest on this bond. Unless other funds are lawfully available and appropriated for timely payment of this bond, the City Council shall levy and collect an annual ad valorem tax, over and above all other taxes authorized or limited by law and without limitation as to rate or amount, on all taxable property within the City sufficient to pay when due the principal of,premium, if any, and interest on this bond. The Registrar shall treat the registered owner of this bond as the person or entity exclusively entitled to payment of principal of and interest on this bond and the exercise of all other rights and powers of the owner, except that interest payments shall be made to the person or entity shown as the owner on the registration books on the 15th day of the month preceding each interest payment date. In the event a date for the payment of principal, redemption price, or interest on this bond is not a business day, then payment of principal, redemption price, and interest on, this bond shall be made on the next succeeding day which is a business day, and if made on such next succeeding business day, no additional interest shall accrue for the period after such payment or redemption date. All acts, conditions and things required by the Constitution and statutes of the Commonwealth of Virginia to happen, exist or be performed precedent to and in the issuance of this bond have happened, exist and have been performed, and the issue of Bonds of which this bond is one, together with all other indebtedness of the City, is within every debt and other limit prescribed by the Constitution and statutes of the Commonwealth of Virginia. IN WITNESS WHEREOF, the City of Virginia Beach, Virginia, has caused this bond to be signed by its Mayor, to be countersigned by its Clerk, its seal to be affixed hereto, and this bond to be dated the Dated Date stated above. COUNTERSIGNED: (SEAL) Clerk, City of Virginia Beach, Virginia Mayor, City of Virginia Beach,Virginia A-3 ASSIGNMENT FOR VALUE RECEIVED the undersigned sell(s), assign(s) and transfer(s)unto: (Please print or type name and address, including postal zip code, of Transferee) PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF TRANSFEREE: the within bond and all rights thereunder, hereby irrevocably constituting and appointing , Attorney, to transfer said bond on the books kept for the registration thereof, with full power of substitution in the premises. Dated: Signature Guaranteed: NOTICE: Signature(s) must be (Signature of Registered Owner) guaranteed by an Eligible Guarantor NOTICE: The signature above must Institution such as a Commercial Bank, Trust correspond with the name of the registered Company, Securities Broker/Dealer, Credit owner as it appears on the front of this bond in Union or Savings Association who is a every particular, without alteration or member of a medallion program approved by enlargement or any change whatsoever. The Securities Transfer Association, Inc. A-4 Requires an affirmative vote by a majority of the members of the City Council. Adopted by the City Council of the City of Virginia Beach, Virginia, this th day of January, 2026. APPROVED AS TO CONTENT: APPROVED AS TO LEGAL SUFFICIENCY: Finance DepaKment Zorney'sOffice CA17052 R-1 December 16, 2025 4884-0668-5617.1 City of Virginia Beach,Virginia 2026A General Obligation Bond Sale Preliminary Project List' Reimbursement of City and School Capital Expenditures Project Number&Name Reimbursement Amount Buildings&Assets 100175 FIRE APPARATUS-PHASE IV $ 6,110,143 100181 FIRE-RESCUE STATION BURTON STATION 602,786 100233 LANDFILL#2-PHASE I CAPPING 1,913,744 100503 JUDICIAL CENTER ESCALATOR REPLACEMENT 6,258,049 100670 VOTER REGISTAR FACILITY 11,984,158 100676 MOSQUITO CONTROL REPLACEMENT 99,737 100677 WASTE MANAGEMENT FACILITY REPLACEMENT 110,824 TOTAL BUILDINGS&ASSETS 27,079,441 Coastal 100334 RUDEE INLET DREDGE REPLACEMENT 7,350,176 TOTAL COASTAL 7,350,176 Economic&Tourism Development 100459 VIBE DISTRICT STREET INF-PHASE 1 2,978,604 100489 WINSTON-SALEM AVENUE IMPROVEMENTS 215,920 100575 31ST STREET STAGE CANOPY 2,928,582 100576 VA BEACH INNOVATION PARK INFRASTRUCTURE II 15,567,865 100635 CORPORATE LANDING BUSINESS PARK INFRASTRUCTURE 6,419,681 TOTAL ECONOMIC&TOURISM DEVELOPMENT 28,110,652 Parks&Recreation 100190 FOXFIRE TRAIL PEDESTRIAN BRIDGE 1,611,722 TOTAL PARKS&RECREATION 1,611,722 Roadways 100048 BURTON STATION ROAD IMPROVEMNTS-PHASE III 241,145 100183 FIRST COLONIAL RD-VB BLVD INTERSECTION 3,561,584 100192 GENERAL BOOTH-CAMP PENDLETON INTERS IMPR 3,466,515 100199 GREENWICH RD-CLEVELAND ST CROSSOVER 1,299,787 100240 LASKIN ROAD BRIDGE REPLACEMENT 8,843,226 100242 LASKIN ROAD-PHASE I-A(VDOT) 12,049,051 100268 MAJOR BRIDGE REHABILITATION-PHASE II 2,783,573 100347 RURAL ROAD IMPROVEMENTS-PHASE 11 313,847 100355 SANDBRIDGE ROAD BRIDGE REPLACMENT 174,006 100401 STREET RECONSTRUCTION-PHASE II 7,239,422 100423 TRAFFIC SAFETY IMPROVEMENTS-PHASE IV 6,646,844 100425 TRAFFIC SIGNAL REHAB-PHASE II 2,160,920 100483 WEST NECK ROAD-PHASE IV 2,024,428 100524 PLEASURE HOUSE ROAD STREET IMROVEMENTS-PHASE 1 117,322 TOTAL ROADWAYS 50,921,670 TOTAL GENERAL GOVERNMENT 115,073,661 Schools 601017 RENOV&REPLACE-GROUND PH 111 3,520,025 601018 RENOV&REPLACE-HVAC PH III 23,415,895 601019 RENOV&REPLACE-REROOFING PH III 11,758,461 601020 RENOV&REPLACE-VARIOUS PH III 5,925,842 601022 ELEMENTARY PLAYGROUND EQUIPMENT REP 1,176,389 601027 RENOVATIONS AND REPLACEMENT-SAFE SCHOOLS IMPROVEMENTS 447,526 601032 PHONE SYSTEM REPLACEMENT 1,015,684 TOTAL SCHOOLS 47,259,822 TOTAL PROJECT FUNDS 162,333,483 1 Preliminary and subject to change. Source:City of Virginia Beach,Department of Finance PRELIMINARY OFFICIAL STATEMENT DATED [FEBRUARY 5,1 2026 G� NEW ISSUE Fitch Ratings: o BOOK-ENTRY ONLY Moody's Investors Service: Standard& Poor's: (See"Ratings"in Section Two) s e In the opinion of Kutak Rock LLP,Bond Counsel,under current law and subject to the conditions described herein in R E,a the section"TAX EXEMPTION,"interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax for individuals.Interest on the Bonds may affect ia the federal alternative minimum tax imposed on certain corporations.It is also the opinion of Bond Counsel that,under existing olaw of the Commonwealth of Virginia,interest on the Bonds is exempt from income taxation by the Commonwealth of Virginia. q Bond Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of,or the accrual or receipt of interest on,the Bonds. See"Tax Exemption'in Section Two for a more complete description of the opinion of Bond o Counsel and additional federal tax law consequences. U U N CITY OF VIRGINIA BEACH, VIRGINIA � T $ $ ° GENERAL OBLIGATION PUBLIC GENERAL OBLIGATION PUBLIC ° IMPROVEMENT BONDS, IMPROVEMENT REFUNDING BONDS, ° SERIES 2026A SERIES 2026B] c� N F ° O � Dated: Date of Issuance Due: As shown on the inside cover .2 ;, This Official Statement has been prepared by the City of Virginia Beach.Virginia(the"City")to provide information on 0 o its$ `General Obligation Public Improvement Bonds,Series 2026A(the"Series 2026A Bonds")and$ *General Obligation Public Improvement Refunding Bonds,Series 2026B(the"Series 2026B Bonds"and together with the Series 2026A o c Bonds the"Bonds"),the security therefor,the City,the use of the proceeds of the Bonds and other relevant information. Selected .o information is presented on this cover page for the convenience of the reader. To make an informed decision regarding the Bonds, .w a prospective investor should read this Official Statement in its entirety. y Security The Bonds will be general obligations of the City for the payment of which its full faith and credit ° c y will be irrevocably pledged. The City Council is authorized and required by Virginia law,unless other funds are lawfully available and appropriated for timely payment of the Bonds,to levy and c c collect on all locally able property in the City an annual ad valorem tax over and above all taxes n authorized or lin w and without limitation as to rate or amount sufficient to pay when due o q the principal of;premium,if any,and interest on the Bonds as the same respectively become due and " payable. o. Redemption The Bonds are subject to optional redemption as summarized on the inside cover and in n o "Redemption-in Section Two. cc v Purpose The proceeds of the Bonds will be used to provide funding for various City and school public ° 2 r wrovements and to refund certain previously issued bonds,as described herein. Proceeds may also A. be used to pay a portion of the issuance costs of the Bonds. U" �E Interest Rates/Yields See inside cover. d U gq O Interest Payment Dates February'1 and August 1,commencing August 1,2026. r e o Denominations $5,000 or integral multiples thereof. c= Closing/Delivery Date On or about March 5,2026. c9 cs o Registration Full book-entry only;The Depository Trust Company,New York,New York. o_ Bond Counsel Kutak Rock LLP,Richmond,Virginia. � ya C V Financial Advisor Davenport&Company LLC,Richmond Virginia cl Official Statement Dated 2026 b ° v U� V C o E 3 `o V � � O� C"V Preliminary,subject to adjustment;see"Sale at Competitive Bidding"herein. E.S .. a ;, o CITY OF VIRGINIA BEACH,VIRGINIA GENERAL OBLIGATION PUBLIC IMPROVEMENT BONDS SERIES 2026A Serial Bonds August 1 Principal Interest CUSIP Maturity Amount' Rate Yield Number— e lU Preliminary,subject to change. "A registered trademark of the American Bankers Association("ABA"),used by Standard&Poor's in its operation of the CUSIP Service Bureau for the ABA. The above CUSIP (Committee on Uniform Securities Identification Procedures)numbers have been assigned by an organization not affiliated with the City,and the City is not responsible for the selection or use of the CUSIP numbers. The CUSIP numbers are included solely for the convenience of bondholders and no representation is made as to the correctness of such CUSIP numbers. CUSIP numbers assigned to securities may be changed during the term of such securities based on a number of factors including,but not limited to,the refunding or defeasance of such securities or the use of secondary market financial products. The City has not agreed to,and there is no duty or obligation to,update this Official Statement to reflect any change or correction in the CUSIP numbers set forth above. i Is CITY OF VIRGINIA BEACH,VIRGINIA GENERAL OBLIGATION PUBLIC IMPROVEMENT REFUNDING BONDS SERIES 2026B] Serial Bonds August 1 Principal Interest CUSIP Maturity Amount* Rate Yield Number CITY OF VIRGINIA BEACH THE CITY COUNCIL Robert M. Dyer,Ma Rosemary Wilson, ViC4 ayor Michael F. Berlucchi . Stacy Cummings Barbara M. Henley David Hutcheson Cal Jackson Green Robert W. Remick Dr. Amelia Ro Hammond Jennifer Rouse Joashua F. hulman CERTA' N CITY OFFICIALS Patrick A.Duhaney, City Manager Mark D. Stiles,City Attorney Amanda Barnes, City Clerk Sue C.Cunningham, City Real Estate Assessor Wendy Hu,Interim Director of Finance V. Leigh Henderson,City Treasurer BOND COUNSEL Kutak Rock LLP 1021 East Cary Street, Suite 810 Richmond,Virginia 23219 ii FINANCIAL ADVISOR Davenport&Company LLC One James Center 901 East Cary Street, Suite 1100 Richmond,Virginia 23219 iii The Bonds will be exempt from registration under the Securities Act of 1933, as amended. As obligations of a political subdivision of the Commonwealth of Virginia,the Bonds will also be exempt from registration under the securities laws of Virginia. No dealer, broker, salesman, or other person has been authorized by the City to give any information to or make any representations with respect to the City,or the Bonds issued thereby,other than those contained in this Official Statement, and if given or made, such other information or representation must not be relied upon as having been authorized by the City. This Official Statement does not constitute an offer to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. All quotations from and summaries and explanations of provisions of law and documents herein do not purport to be complete, and reference is made to such laws and documents for full and complete statements of their provisions. Any statements made in this Official Statement involving estimates or matters of opinion, whether or not expressly so stated, are intended merely as estimates or matters of opinion, and not as representations of fact. The information and expression of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implications that there-has been no change in the affairs of the City since the respective dates as of which information is given,herem. TABLE OF CONTENTS SECTION ONE: INTRODUCTION.................................... .................................................................1 TheCity............................................... ......... ......... ..... ...........................................................l TheBonds....................................................... .......... ....... .........................................................I Securityfor the Bonds......................... ......... ......... .. ..............................................................2 Useof Proceeds ............ ......... ......... ......... .............................................................................2 Redemption................... ......... ........ ........: .............................................................................2 TaxExemption.............. .............................................................................2 BondCounsel................ ....... ......... ........................................................................................2 FinancialAdvisor—....... ........ ..:.................................................................................................2 Auditors............................ ..........................................................................................3 Ratings ........................................ . ......... ......... ......... ....................................................................................................3 Investment Policies and Practices...................................................................................................3 OfficialStatement............................................................................................................................3 ContinuingDisclosure. ...............................................................................................................3 Post-Issuance Compliance..............................................................................................................4 Verification of Mathematical Computations...................................................................................4 AdditionalInformation...................................................................................................................4 SECTIONTWO: THE BONDS..............................................................................................................5 GeneralDescription of the Bonds...................................................................................................5 Redemption.....................................................................................................................................5 Book-Entry System.........................................................................................................................6 Authorization and Purpose of the Bonds........................................................................................6 Security for and Sources of Payment for the Bonds.......................................................................7 Estimated Sources and Uses of Funds............................................................................................8 Litigation.........................................................................................................................................9 LegalMatters..................................................................................................................................9 TaxExemption................................................................................................................................9 Ratings .........................................................................................................................................12 i Sale at Competitive Bidding.........................................................................................................12 Certificates of City Officials.........................................................................................................12 Legality of the Bonds for Investment...........................................................................................13 ContinuingDisclosure..................................................................................................................13 Post-Issuance Compliance............................................................................................................14 SECTION THREE: CERTAIN INFORMATION CONCERNING THE CITY OF VIRGINIA BEACH,VIRGINIA............................................................................................................15 Introduction...................................................................................................................................15 Formof Government.....................................................................................................................16 SchoolBoard.................................................................................................................................16 Elected Officials—Governing Body.............................................................................................16 Certain City Council Appointees and Administrative Staff Members..........................................20 Governmental Services and Facilities...........................................................................................22 General Overview of Governmental Organization and Selected Functions.................................24 Functional Departments................................................................................................................25 Population.....................................................................................................................................34 Income .........................................................................................................................................36 Housingand Construction................................................. ...........................................................38 Employment................................................................... ..............................................................40 Businessand Industry...................................................................................................................41 Tax Increment Financing and Development Districts..................................................................46 RetailSales...................................................................................................................................49 Tourism.........................................................................................................................................49 Military................................................................................. .......................................................51 Environmental Resiliency-Flood Protection...............................................................................53 MedicalFacilities.......................... ...............................................................................................58 Agribusiness..................................................................................................................................58 Education......................................................................................................................................59 HigherEducation..........................................................................................................................61 SECTION FOUR: CITY INDEBTEDNESS AND CAPITAL PLAN.................................................64 Limitations on Incurrence of Debt................................................................................................64 DebtManagement Policies...........................................................................................................64 OutstandingDebt..........................................................................................................................67 Authorized but Unissued Bonds...................................................................................................70 Waterand Sewer System Debt.....................................................................................................71 Storm Water Utility System Debt.................................................................................................71 Virginia Beach Development Authority Appropriation Based Debt............................................71 Agricultural Reserve Program......................................................................................................73 OverlappingDebt..........................................................................................................................73 Short-term Borrowing...................................................................................................................73 PaymentRecord............................................................................................................................73 Impact of Future Economic Development on City Debt..............................................................73 ComprehensivePlan.....................................................................................................................74 SECTION FIVE: FINANCIAL INFORMATION..............................................................................78 City of Virginia Beach Development Authority...........................................................................78 Hampton Roads Transportation District Commission..................................................................78 CityFinancial Statements.............................................................................................................78 Investment Policies and Practices.................................................................................................80 Certificate of Achievement...........................................................................................................80 ii BudgetaryProcess.........................................................................................................................81 Audited Financial Results for Fiscal Year 2025...........................................................................81 FY 2025 General Government Revenues.....................................................................................82 FY2025 Operating Data...............................................................................................................82 GeneralFund.................................................................................................................................87 GeneralFund Operations..............................................................................................................88 Interim Financial Statements as of December 31,2025(Unaudited)...........................................91 Highlights of the Adopted Operating Budget for Fiscal Year 2026.............................................91 FY2025 Expenditures..................................................................................................................94 CapitalImprovement Program......................................................................................................94 Highlights of the Adopted Capital Improvement Program for Fiscal Years 2026—2031............94 Meansof Financing the CIP.........................................................................................................95 Highlights of the Proposed Operating Budget for Fiscal Year 2026 and CIP for Fiscal Years 2026/2031..............................................................Error! Bookmark not defined. Insurance................................................................................. .. 96 Commitments and Contingencies Retirement and Pension Plans.......................................................................................................97 OtherPostemployment Benefits...................................................................................................98 Employee Relations and Collective Bargaining...........................................................................99 Regional Transportation Funding Legislation..............................................................................99 SECTION SIX: MISCELLANEOUS..................................................................................................101 Delivery......................................................................................................................................101 OfficialStatement.......................................................................................................................101 Appendix A—Audited Financial Statements for the Fiscal Year Ended June 30,2025 Appendix B—Form of Bond Counsel Opinion Appendix C—Form of Continuing Disclosure Agree nt Appendix D—Information Regarding The Depository'' rust Company and its Book-Entry System [Appendix E—Summary of Refunded Bonds] Appendix F—Notice of Sale iii CITY OF VIRGINIA BEACH, VIRGINIA $ $ GENERAL OBLIGATION PUBLIC GENERAL OBLIGATION PUBLIC IMPROVEMENT BONDS, IMPROVEMENT REFUNDING BONDS, SERIES 2026A SERIES 2026B SECTION ONE: INTRODUCTION The purpose of this Official Statement, including the cover page and Appendices, is to furnish information in connection with the sale by the City of Virginia Beach, Virginia(the "City" or "Virginia Beach")of its$ General Obligation Public Improvement Bonds,Series 2026A(the"Series 2026A Bonds") and[$ ' General Obligation Public Improvement Ref nding Bonds, Series 2026B (the "Series 2026B Bonds," and together with the Series 2026A Bonds, the� Bonds"), dated the date of their delivery. Issuance of the Bonds has been authorized by the City Council of the City of Virginia Beach(the "City Council")as described herein. This information speaks as'of its date and is not intended to indicate future or continuing trends in the financial or economic po ' n of the City. The following material is qualified in its entirety by the detailed information andkwhI atements appearing elsewhere in this Official Statement,reference to which is hereby made f S. The City The issuer of the Bonds is the City of Vi nia is located in the southeastern portion of the Commonwealth of Virginia(the"Commonwealth"). Virginia Beach is the most populous city in the Commonwealth,with a population of 452,965 according to the July 1,2024 estimate of the Weldon Cooper Center for Public Service. Additional information concerning the City can be found in Sections Two,Three, Four and Five. The audited financial statements for the City for the Fiscal Year ended June 30, 2025, are set forth in Appendix A hereto. The Bonds The Bonds are dated the date of their delivery. The Bonds mature annually on February 1 on the years and in the amounts shown on the inside cover of this Official Statement. The Bonds will be held by The Depository Trust Company("DTC"),or its nominee,as securities depository with respect to the Bonds. Interest on the Bonds will be payable on each February 1 and August 1, commencing, August 1, 2026, until their respective maturities or prior redemption. As long as the Bonds are held by DTC or its nominee, interest will be paid to Cede & Co., as nominee of DTC, in same day funds on each interest payment date. The Bonds are subject to optional redemption prior to maturity at the option of the City upon the terms provided in the Resolution and described herein. For further information regarding the Bonds,the book-entry system for the registration and transfer of the Bonds,the optional redemption provisions of the Bonds and tax status of the Bonds,see Section Two. 'Preliminary,subject to adjustment;see"Sale at Competitive Bidding"herein. 1 Security for the Bonds The Bonds will be general obligations of the City to which the full faith and credit of the City will be pledged for payment. For further information regarding the security for the Bonds, see "Security for and Sources of Payment for the Bonds"in Section Two. Use of Proceeds Proceeds of the Series 2026A Bonds will be used to fund capital projects for governmental use of the City or the City's public school system and reimburse expenditures previously made for such purposes as generally described herein. Proceeds of the Series 2026B Bonds will be used to refund for debt service savings certain previously issued bonds as more particularly described on Appendix E. Proceeds of the Bonds may also be used to pay a portion of the costs of issuance of the respective series of Bonds. See "Authorization and Purpose of the Bonds" in Section Two for a more complete description of the authorization and purpose of the Bonds. Redemption The Bonds maturing on and after August 1, 203 are subject to redemption at the option of the City,in whole or in part,on any date on and after August 1103 at the redemption price of 100%of the principal amount of the Bonds to be redeemed,plus interest accrued to the redemption date. See "Redemption" in Section Two for a more complete description of the redemption provisions of the Bonds. Tax Exemption Under current law,interest on the Bonds will be exempt or excludable from income taxation by the Commonwealth of Virginia and the United States of America. See"Tax Exemption" in Section Two for a more complete description of the significant elements of the federal and state income tax status of interest on the Bonds. Bond Counsel Kutak Rock LLP, Richmond, Virginia,serves as Bond Counsel to the City in connection with the issuance of the Bonds. The opinion of Bond Counsel will be dated and given on,and will speak only as of, the date of issuance and delivery,if the Bonds. The proposed form of Bond Counsel's opinion is attached as Appendix B. The scope of engagement of Bond Counsel does not extend to passing upon or assuming responsibility for the accuracy or adequacy of any statements made in this Official Statement other than matters expressly set forth in the opinion of Bond Counsel. Bond Counsel makes no representation that it has independently verified the same. Financial Advisor Davenport & Company LLC ("Davenport") is employed as a financial advisor to the City in connection with the issuance of the Bonds. The financial advisor's fee for services rendered with respect to the sale of the Bonds is contingent upon the issuance and delivery of the Bonds. Davenport, in its capacity as financial advisor, does not assume any responsibility for the information, covenants and representations contained in any of the legal documents provided,agreed to or made by others with respect 2 to the federal income tax status of the Bonds,or the possible impact of any present,pending or future actions taken by any legislative or judicial bodies. Davenport, as the financial advisor to the City, has provided the following sentence for inclusion in this Official Statement. Although Davenport has assisted in the preparation of this Official Statement, Davenport is not obligated to undertake,and has not undertaken to make,an independent verification or to assume responsibility for the accuracy,completeness or fairness of the information contained in this Official Statement. Auditors The City's financial statements for the Fiscal Year ended June 30, 2025 are attached as Appendix A to this Official Statement and have been audited by the independent public accounting firm of Cherry Bekaert LLP. These financial statements,together with the related Notes to Financial Statements, are intended to provide a broad overview of the financial position an operating results of the City's governmental activities, business-type activities and major funds. Su financial statements have been included in reliance upon the report of Cherry Bekaert LLP,who will not be reviewing any matters in this Official Statement or otherwise in connection with the issuance of the Bonds. Ratings The City has applied and received ratings from Fitch Ratings, 300 West 57th Street,New York, New York 10019, Moody's Investors Service, 7 World Trade Center, 250 Greenwich Street, New York, New York 10007, and S&P Global Ratings, a division of McGraw-Hill Financial, Inc., 55 Water Street, New York, New York 10041, as shown on the front cover. See "Ratings" in Section Two for a more complete description of the ratings. Investment Policies and Practices The City, as a political subdivision of the Commonwealth, is limited to investments permitted by Section 2.2-4500 et seq.of the Code of Virginia of 1950,as amended. In addition,various bond resolutions further restrict the types of allowable investments. The City's investment practices are generally described in footnote 9 of the City's financial statements, attached as Appendix A. More detail on the City's investment practices is provided in Section Five. Official Statement This Official Statement has been approved and authorized by the City for use in connection with the sale of the Bonds. Its purpose is to supply information to prospective buyers of the Bonds. Financial and other information contained in this Official Statement has been prepared by the City from its records, except where other sources are noted. The information is not intended to indicate future or continuing trends in the financial or economic position of the City. Continuing Disclosure The City has agreed to execute a Continuing Disclosure Agreement at closing to assist the successful bidder in complying with the provisions of Rule 15c2-12(the"Rule 15c2-12"),promulgated by the Securities and Exchange Commission (the "SEC") and as in effect on the date hereof, by providing annual financial information and event notices required by Rule 15c2-12. The City has established procedures to monitor compliance with its continuing disclosure undertaking. See "Continuing 3 Disclosure" in Section Two and see the proposed form of the Continuing Disclosure Agreement attached as Appendix C. Post-Issuance Compliance In compliance with Internal Revenue Service recommended practices, the City has established procedures to monitor compliance after the issuance of the Bonds and other tax-advantaged obligations with Federal tax law requirements related to the qualified use of bond proceeds and property financed with such proceeds and requirements related to arbitrage yield restriction and rebate. See `Post-Issuance Compliance"in Section Two. Verification of Mathematical Computations The arithmetical accuracy of certain computations made in connection with the general obligation bonds to be refunded shown on Appendix E(the"Refunded Bonds")and included in supporting schedules will be verified by (the "Verification Agent") relating to (i)computations of forecasted receipts of principal and interest on the investments in the Government Obligations(herein defined)and/or cash deposited in the escrow fund established for the Refunded Bonds and the scheduled payments of principal, interest and premium required to redeem the Refunded Bonds, and (ii)computation of the yield on the Bonds and the related Government Obligations. Such computations will be based solely on assumptions and information supplied by the City's financial advisor, Davenport & Company LLC. The Verification Agent will restrict its procedures to verifying the arithmetical accuracy of certain computations and will not make any study or evaluation of the assumptions and information on which the computations are based and, accordingly, will not express an opinion on the data used, the reasonableness of the assumptions or the achievability of the forecasted outcome. Additional Information Any questions concerning the contents of this Official Statement should be directed to the following: Department of Finance,Municipal Center, Virginia Beach,Virginia,23456(757)385-4681;or the City's financial advisor,Davenport&Company LLC(804)780-2000. [Remainder ofpage intentionally left blankl 4 SECTION TWO: THE BONDS General Description of the Bonds The Bonds will be dated the date of their issuance and delivery. The Bonds will mature on February 1 in the years and in the amounts shown on the inside cover of this Official Statement. Interest on the Bonds will be payable on each August 1 and February 1, commencing August 1,2026,until the earlier of maturity or redemption(for Bonds subject to redemption),at the rates per year set forth on the inside cover. The Bonds will be registered as to principal and interest in the name of Cede & Co., as nominee for DTC, or otherwise as hereinafter described. Beneficial ownership interests in the Bonds will be available only in book-entry form. Beneficial Owners (as hereinafter defined) will not receive physical bond certificates representing their interests in the Bonds purchased. So long as DTC or its nominee is the registered owner of the Bonds,references in this Official Statement to the owners of the Bonds shall mean DTC or its nominee and shall not mean the Beneficial Owners. The Resolution contains provisions applicable to periods when DTC or its nominee is not the registered owner. As long as the Bonds are held by DTC or its nominee; interest will be paid to Cede & Co., as nominee of DTC, in same day funds on each interest payment date. Interest on the Bonds will be payable by check or draft mailed to the registered owners at their addresses as they appear on the registration books on the January 15 and July 15 immediately preceding each interest payment date. If any such interest payment date is not a business day, such payment will be made on the next succeeding business day with the same effect as if made on the interest payment date, and no additional interest will accrue. The registration books are kept by the City Treasurer, who has been appointed paying agent and registrar(the "Registrar"). Interest will be computed on the basis of a 360-clay year of twelve 30-day months. Redemption Optional Redemption. The mE turing on or before August 1,203_are not subject to redemption prior to maturity. The Bonds maturing on or after August 1, 203_are subject to redemption beginning August 1,203_,in whole or in part(in any multiple of$5,000)at any time,at the option of the City,upon payment of 100%of the principal amount of the Bonds to be redeemed plus interest accrued and unpaid to the date fixed for redemption. Selection of Bonds for Redemption. If less than all of the Bonds are called for optional redemption,the maturities of the Bonds to be redeemed shall be selected by the City's Director of Finance in such manner as maybe determined to be in the best interest of the City. If less than all of the Bonds of a particular maturity are called for redemption,DTC or any successor securities depository will select the Bonds to be redeemed pursuant to its rules and procedures or,if the book-entry system is discontinued,the Bonds to be redeemed will be selected by the Registrar by lot in such manner as the Registrar in its discretion may determine. In either case, each portion of the $5,000 principal amount is counted as one Bond for such purpose. If a portion of a Bond is called for redemption, a new Bond in principal amount equal to the unredeemed portion shall be issued to the registered owner upon the surrender thereof. Notice of Redemption. The City will cause notice of the call for redemption identifying the Bonds or portions thereof to be redeemed to be sent by electronic transmission, facsimile transmission,registered or certified mail or overnight express delivery, not less than 30 nor more than 60 days prior to the redemption date,to the registered owner thereof. The City shall not be responsible for providing notice of redemption to anyone other than DTC or another qualified securities depository or its nominee unless no qualified securities depository is the registered owner of the Bonds. If no qualified securities depository is 5 the registered owner of the Bonds, notice of redemption shall be mailed to the registered owners of the Bonds. The City will also cause notice of redemption to be posted on EMMA(as hereinafter defined). Book-Entry System A description of DTC, of procedures and record keeping on beneficial ownership interests in the Bonds, payment of interest and other payments on the Bonds to DTC Participants(as hereinafter defined) or to Beneficial Owners,confirmation and transfer of beneficial ownership interests in the Bonds and other transactions by and between DTC,DTC Participants and Beneficial Owners is attached as Appendix D and is based on information furnished by DTC. Authorization and Purpose of the Bonds The Series 2026A Bonds were authorized by ordinances adopted by the City Council on May 12, 2020, May 11, 2021,November 16, 2021,May 10, 2022, May 9, 2023, May 14,2024 and May 13, 2025, and are being issued pursuant to a resolution adopted by the City Council on [January 6, 2026] (the "Resolution"). The Bonds will be issued pursuant to the applicable ordinances, the Resolution and the Constitution and statutes of the Commonwealth, including the Charter of the City of Virginia Beach (Chapter 147, Acts of Assembly of 1962, as amended) and the Public Finance Act of 1991 (Chapter 26, Title 15.2, Code of Virginia of 1950, as amended) (the "Act"). Proceeds of the Series 2026A Bonds will be used for the purpose of providing funds for various City and school public improvements and may also be used to pay a portion of the costs of issuance related to the Series 2026A Bonds. Proceeds of the Series 2026B Bonds will refund certain previously issued bonds as summarized on Appendix E and may be used to pay cost of issuance of the Series 2026B Bonds. Of the aggregate principal amount of the 2026A Bonds, $22,944,090' represents a portion of $69,741,841 of bonds that were authorized by an ordinance adopted by the City Council on May 12,2020, without being submitted to the qualified voters of the City(the "2020 Charter Bonds"),to provide funds, together with other funds that may be available; for the various public improvements, including schools, roadways, coastal, economic and tourism and building projects. After this sale, the City will have an authorized but unissued balance of$0* remaining from the 2020 Charter Bonds,having previously issued $46,797,751 under such authorization. Of the aggregate principal amount of the 2026A Bonds, $61,678,775` represents a portion of $68,652,307 of bonds that were authorized by an ordinance adopted by the City Council on May 11,2021 and administratively reduced to $61,678,775, without being submitted to the qualified voters of the City (the "2021A Charter Bonds"), to provide funds, together with other funds that may be available, for the various public improvements, including schools, roadways, coastal, economic and tourism and building projects. After this sale,the City will have an authorized but unissued balance of$0`remaining from the 2021A Charter Bonds,having previously issued no bonds under such authorization. Of the aggregate principal amount of the 2026A Bonds,$0 represents a portion of$567,500,000 of bonds that were authorized by an ordinance adopted by the City Council on November 16, 2021, after having been submitted to and approved by the qualified voters of the City,to finance twenty-one projects for a comprehensive flood mitigation program,(the"2021B Charter Bonds"). After this sale,the City will have an authorized but unissued balance of$449,500,000 remaining from the 2021 B Charter Bonds,having previously issued$118,000,000 under such authorization. Of the aggregate principal amount of the 2026A Bonds, $69,107,404' represents a portion of $69,107,404 of bonds that were authorized by an ordinance adopted by the City Council on May 10,2022, without being submitted to the qualified voters of the City (the "2022 Charter Bonds"),to provide funds, 6 together with other funds that may be available, for the various public improvements, including schools, roadways, coastal, economic and tourism and building projects. After this sale, the City will have an authorized but unissued balance of$0*remaining from the 2022 Charter Bonds, having previously issued no bonds under such authorization. Of the aggregate principal amount of the 2026A Bonds, $9,269,731* represents a portion of $62,460,057 of bonds that were authorized by an ordinance adopted by the City Council on May 9, 2023, without being submitted to the qualified voters of the City(the "2023 Charter Bonds"), to provide funds, together with other funds that may be available, for the various public improvements, including schools, roadways, coastal, economic and tourism and building projects. After this sale, the City will have an authorized but unissued balance of$53,190,326*remaining from the 2023 Charter Bonds,having previously issued no bonds under such authorization. Of the aggregate principal amount of the 2026A Bonds,$0*represents a portion of$71,116,108 of bonds that were authorized by an ordinance adopted by the City Counci on May 14, 2024, without being submitted to the qualified voters of the City (the "2024 Charter Bon , to provide funds, together with other funds that may be available, for the various public impro nts, including schools, roadways, coastal, economic and tourism and building projects. After this e, e City will have an authorized but unissued balance of$71,116,108 * remaining from the 2024 Charter Bonds, having previously issued no bonds under such authorization. Of the aggregate principal amount of the 2026A Bonds,$0* represents a portion of$72,827,365 of bonds that were authorized by an ordinance adopted by the City Council on May 13, 2025, without being submitted to the qualified voters of the City (the "2025 Charter Bonds"), to provide funds, together with other funds that may be available, for the various public improvements, including schools, roadways, coastal, economic and tourism and buildin&projects. After this sale,the City will have an authorized but unissued balance of$72,827,365* re om the 2025A Charter Bonds, having previously issued no bonds under such authorization ,,. Of the aggregate principal amount of the 2026A Bonds,$0* represents a portion of$11,800,000 of bonds that were authorized by an ordinance adopted by the City Council on May 13, 2025, without being submitted to the qualified voters of the City(the"2025B Charter Bonds"),to provide funds,together with other funds that may be available, for .`lood mitigation projects. After this sale, the City will have an authorized but unissued balance of $11,800,000* remaining from the 2025B Charter Bonds, having previously issued no bonds under such authorization. Security for and Sources of Payment for the Bonds Pledee of Full Faith and Credit. The Bonds will be general obligations of the City to which the full faith and credit of the City are irrevocably pledged for the payment of principal of and interest on the Bonds. Section 15.2-2624 of the Virginia Code requires,and the Resolution provides,that the City Council will, in each year while any of the Bonds are outstanding, levy and collect an ad valorem tax, over and above all other taxes authorized or limited by law and without limitation as to the rate or amount,upon all property in the City subject to local taxation, sufficient to pay the principal of and interest on the Bonds as the same shall come due,unless other funds are lawfully available and appropriated for timely payment of the Bonds. Bondholders' Remedies in the Event of Default. Section 15.2-2659 of the Virginia Code provides that upon affidavit filed with the Governor of Virginia by or on behalf of any owner of a general obligation bond, or by any paying agent therefor, in default as to payment of principal or interest, the Governor shall immediately conduct a summary investigation. If it is established to the Governor's 7 satisfaction that payment of the bond or interest thereon is in default, the Governor shall order the State Comptroller to withhold all funds appropriated and payable by the Commonwealth to the political subdivision so in default and apply the amount so withheld to payment of the defaulted principal and interest. Section 15.2-2659 also provides for notice to the registered owners of such bonds of the default and the availability of withheld funds. The State Comptroller advises that to date no order to withhold funds pursuant to Section 15.1-227.61 or Section 15.1-225, the predecessor provisions of 15.2-2659, has ever been issued. Although Section 15.2-2659 has not been approved by a Virginia Court, the Attorney General of Virginia has ruled that appropriated funds may be withheld by the Commonwealth pursuant to its predecessor section. In the Fiscal Year ending June 30, 2025, the Commonwealth provided $239,804,348 to the City, not including its discretely presented component units, of which $199,286,951 was deposited in the City's General Fund. Neither the Bonds nor the proceedings with respect thereto specifically provide any remedies to Bondholders if the City defaults in the payment of principal of or interest thereon,nor do they contain any provision for the appointment of a trustee to enforce the interest of the Bondholders upon the occurrence of such a default. Upon any default in the payment of principal or interest,a Bondholder could,among other things,seek to obtain from an appropriate court a writ of mandamus requiring the City Council to levy and collect taxes as described above. The mandamus remedy, however, may be impracticable and difficult to enforce. Furthermore,the right to enforce payment of the Bonds may be limited by bankruptcy,insolvency, reorganization, moratorium, and similar laws and equitable principles, which may limit the specific enforcement of certain remedies. Chapter 9 of the United States Bankruptcy Code (the "Bankruptcy Code") permits a municipality such as the City, if insolvent or otherwise unable to pay its debts as they become due, to file a voluntary petition for the adjustment of debts provided that such municipality is "specifically authorized, in its capacity as a municipality or by name, to be'a debtor..." Bankruptcy Code, Section 109(c)(2). Current Virginia statutes do not expressly authorize the City or municipalities generally to file for bankruptcy under Chapter 9. Chapter 9 does not authorize the filing of involuntary petitions against municipalities such as the City. Bankruptcy proceedings by the City could have adverse effects on Bondholders including(a)delay in the enforcement of their remedies, (t)subordination of their claims to claims of those supplying goods and services to the City after the initiation of bankruptcy proceedings and to the administrative expenses of bankruptcy proceedings, and (c) imposition without their consent of a reorganization plan reducing or delaying payment of the Bonds. the Bankruptcy Code contains provisions intended to ensure that, in any reorganization plan not accepted by at least a majority of a class of creditors such as the holders of general obligation bonds,such creditors will have the benefit of their original claims or the"indubitable equivalent." The effect of these and other provisions of the Bankruptcy Code cannot be predicted and may be significantly affected by judicial interpretations. Estimated Sources and Uses of Funds The proceeds of the Bonds,exclusive of other available funds of the City,are to be used as follows: Sources of Funds: Par Amount of Series 2026A Bonds [Par Amount of Series 2026B Bonds] [Net] Original Issue Premium Series 2026A Bonds 8 [Net] Original Issue Premium Series 2026B Bonds Total Sources of Funds Use of Funds: Project Costs [Escrow Fund] Underwriter's Compensation Series 2026A Bonds Underwriter's Compensation Series 2026B Bonds Total Uses of Funds Litigation Concernin¢ the Bonds. According to the City Attorney, there is no litigation of any kind now pending or,to the best of his information, knowledge and belief, threatened against the City to restrain or enjoin the issuance or delivery of the Bonds or in any manner questioning the proceedings and authority under which the Bonds are issued or affecting the ability of the City to levy or collect ad valorem taxes without limitation as to rate or amount for the payment of the principal of or interest on the Bonds. General. The City is a named defendant in various litigation matters filed by parties concerning alleged personal injuries,property damage and other causes of action which are being vigorously defended by the City. In the opinion of the City Attorney, none of the pen ' g litigation,if decided adversely to the City,would materially affect the City's financial position,, Legal Matters Certain legal matters relating to theIa thoriz n and validity of the Bonds will be subject to the approving opinion of Kutak Rock LLP, Richmond, Virginia,as Bond Counsel, which will be furnished at the expense of the City upon delivery of the Bonds,in substantially the form set forth as Appendix B. Bond Counsel's opinion will be limited to mailers relating to authorization and validity of the Bonds and to the tax-exempt status of interest thereon as des6Abed below in the section"Tax Exemption." Bond Counsel has not been engaged to investigate the financial resources of the City or its ability to provide for payment of the Bonds. Bond Counsel's opinion will make no statement as to such matters or as to the accuracy or completeness of this Official Statement or any other information that may have been relied on by anyone in making the decision to purchase Bonds. Tax Exemption Opinion of Bond Counsel. The scope of engagement of Bond Counsel does not extend to passing upon or assuming responsibility for the accuracy or adequacy of any statements made in this Official Statement other than matters expressly set forth in Bond Counsel's opinion, and Bond Counsel makes no representation that it has independently verified the same. The opinion of Bond Counsel will be dated and given on, and will speak only as of,the date of issuance and delivery of the Bonds. General Matters. In the opinion of Kutak Rock LLP, Bond Counsel, under existing laws, regulations,rulings and judicial decisions,interest on the Bonds is excludable from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax for individuals. Interest on the Bonds may affect the federal alternative minimum tax imposed on certain corporations. The opinion described above assumes the accuracy of certain representations and compliance 9 by the City with covenants designed to satisfy the requirements of the Internal Revenue Code of 1986, as amended(the "Code"),that must be met subsequent to the issuance of the Bonds. Failure to comply with such requirements could cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to their date of issuance. The City will covenant to comply with such requirements. Bond Counsel has expressed no opinion regarding other federal tax consequences arising with respect to the Bonds. Bond Counsel is also of the opinion that, under existing statutes of the Commonwealth, interest income on the Bonds is exempt from taxation by the Commonwealth and its political subdivisions. Original Issue Discount. The Bonds that have an original yield above their respective interest rates,as shown on the inside cover of this Official Statement(collectively,the"Discount Bonds"),are being sold at an original issue discount. The difference between the initial public offering prices of such Discount Bonds and their stated amounts to be paid at maturity constitutes original issue discount treated in the same manner for federal income tax purposes as interest,as described above. The amount of original issue discount that is treated as having accrued with respect to a Discount Bond or is otherwise required to be recognized in gross income is added to the cost basis of the owner of the bond in determining, for federal income tax purposes, gain or loss upon disposition of such Discount Bond (including its sale, redemption or payment at maturity). Amounts received on disposition of such Discount Bond that are attributable to accrued or otherwise recognized original issue discount will be treated as tax-exempt interest,rather than as taxable gain, for fedeal income tax purposes. Original issue discount is treated as compounding semiannually,at a rate determined by reference to the yield to maturity of each individual Discount Bond, on days that are determined by reference to the maturity date of such Discount Bond. The amount treated as original issue discount on such Discount Bond for a particular semiannual accrual period is equal to (a) the product of(i) the yield to maturity for such Discount Bond(determined by compounding at the close of each accrual period)and(ii)the amount that would have been the tax basis of such Discount Bond at the beginning of the particular accrual period if held by the original purchaser, (b) less the amount of any interest payable for such Discount Bond during the accrual period. The tax basis for purposes of the preceding sentence is determined by adding to the initial public offering price on such Discount Bond the sum of the amounts that have been treated as original issue discount for such purposes during all prior periods. If such Discount Bond is sold between semiannual compounding dates,original issue discount that would have been accrued for that semiannual compounding period for federal income tax purposes is to be apportioned in equal amounts among the days in such compounding period. Owners of Discount Bonds should consult their tax advisors with respect to the determination and treatment of original issue discount accrued as of any date with respect to when such original issue discount must be recognized as an item of gross income and with respect to the state and local tax consequences of owning a Discount Bond. Subsequent purchasers of Discount Bonds that purchase such bonds for a price that is higher or lower than the "adjusted issue price"of the bonds at the time of purchase should consult their tax advisors as to the effect on the accrual of original issue discount. Recosnition of Income Generally. Section 451 of the Code was amended by Pub.L.No. 115-97, enacted December 22,2017(sometimes referred to as the Tax Cuts and Jobs Act),to provide that taxpayers using an accrual method of accounting for federal income tax purposes generally will be required to include certain amounts in income, including original issue discount and market discount, no later than the time such amounts are reflected on certain financial statements of such taxpayer. The application of this rule may require the accrual of income earlier than would have been the case prior to the amendment of Section 451 of the Code. The rule generally applies to taxable years after 2017,except that in the case of 10 income from a debt instrument having original issue discount, the rule does not apply until taxable years after 2018. Investors should consult their own tax advisors regarding the application of this rule and its impact on the timing of the recognition of income related to the Bonds under the Code. Original Issue Premium. The Bonds that have an original yield below their respective interest rates,as shown on the inside cover of this Official Statement(collectively,the"Premium Bonds"),are being sold at a premium. An amount equal to the excess of the issue price of a Premium Bond over its stated redemption price at maturity constitutes premium on such Premium Bond. A purchaser of a Premium Bond must amortize any premium over such Premium Bond's term using constant yield principles,based on the purchaser's yield to maturity(or, in the case of Premium Bonds callable prior to their maturity, generally by amortizing the premium to the call date,based on the purchaser's yield to the call date and giving effect to any call premium). As premium is amortized, the amount of the amortization offsets a corresponding amount of interest for the period, and the purchaser's basis in such Premium Bond is reduced by a corresponding amount resulting in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes upon a sale or disposition of such Premi and prior to its maturity. Even though the purchaser's basis may be reduced, no federal income tax ction is allowed. Purchasers of the Premium Bonds should consult their tax advisors with respect t the determination and treatment of premium for federal income tax purposes and with respect to the state and local tax consequences of owning a Premium Bond. Backup Withholding. As a result of the enactment of the Tax Increase Prevention and Reconciliation Act of 2005, interest on tax-exempt obligations such as the Bonds is subject to information reporting in a manner similar to interest paid on taxable obligations. Backup withholding maybe imposed on payments to any owner of the Bonds that fails to provide certain required information including an accurate taxpayer identification number to any person required to collect such information pursuant to Section 6049 of the Code. The reporting requirement does not in and of itself affect or alter the excludability of interest on the Bonds from gross income for federal income tax purposes or any other federal tax consequence of purchasing, holding or selling tax-exempt obligations. Internal Revenue Service Audits. The Internal Revenue Service has an ongoing program of auditing tax-exempt obligations such as the Bonds to determine whether,in the view of the Internal Revenue Service, interest on such tax-exempt obligations is included in the gross income for federal income tax purposes. It cannot be predicted whether or not the Internal Revenue Service will commence an audit of any of the Bonds. If an audit is commenced, under current procedures the Internal Revenue Service may treat the City as the issuer of the Bonds as a taxpayer,and the registered owners of the Bonds may have no right to participate in such procedure. The commencement of an audit could adversely affect the market value and liquidity of the related Bonds until the audit is concluded,regardless of the ultimate outcome. Changes in Federal and State Tax Law. From time to time,there are legislative proposals in the Congress and in the states that,if enacted,could alter or amend the federal and state tax matters referred to herein or adversely affect the market value of the Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether if enacted it would apply to bonds issued prior to enactment. In addition,regulatory actions are from time to time announced or proposed and litigation is threatened or commenced which, if implemented or concluded in a particular manner,could adversely affect the market value of the Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular litigation or judicial action will be resolved,or whether the Bonds or the market value thereof would be impacted thereby. Purchasers of the Bonds should consult their tax advisors regarding any pending or proposed legislation, regulatory initiatives or litigation. The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of issuance and delivery of the Bonds,and Bond Counsel has expressed 11 no opinion as of any date subsequent thereto or with respect to any pending legislation,regulatory initiatives or litigation. PROSPECTIVE PURCHASERS OF THE BONDS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS PRIOR TO ANY PURCHASE OF THE BONDS AS TO THE IMPACT OF THE CODE AND APPLICABLE LAWS OF OTHER STATES UPON THEIR ACQUISITION, HOLDING OR DISPOSITION OF THE BONDS. Ratings Fitch Ratings, 300 West 57th Street, New York, New York 10019, Moody's Investors Service, 7 World Trade Center, 250 Greenwich Street, New York, New York 10007, and S&P Global Ratings, a division of McGraw-Hill Financial, Inc., 55 Water Street, New York, New York 10041, have given the Bonds the ratings of" " ( outlook), " " ( outlook) and " " ( outlook), respectively. The City requested that the Bonds be rated and furnished certain information to Fitch, Moody's and Standard & Poor's, including ceritin information that may not be included in this Official Statement. Each rating reflects only the view of such organization and desired explanation of the significance of any ratings should be obtained from the respective rating age Generally,a rating agency bases its rating on the information and materials furnished to it and on nvestigations, studies and assumptions of its own. The rating is not a recommendation to buy, sell or hold the Bonds and should be evaluated independently. There is no assurance such rating will continue for any given period of time or that such rating will not be revised downward or withdrawn entirely by the rating agency,if in the judgment of such rating agency,circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Bonds. Sale at Competitive Bidding The Bonds will be offered for sale at competitive bidding on February 12,2026 until(i) a.m. Eastern Time A copy of the Notice of Sale for the Bonds is attached to this Preliminary Official Statement as Appendix F. As set forth in the Notice of Sake,the preliminary aggregate principal amount of the Bonds and the preliminary annual principal amounts of the Bonds may be revised by the City before the receipt of bids. Additionally,after the Bonds have been awarded to the winning bidder,the principal amount of the Bonds may be increased or decreased at the City's election by an amount not to exceed 15% of the aggregate principal amount of the Bonds. Any increase or decrease in the principal amount of particular maturities of the Bonds will be communicated to the winning bidder following the award,but not later than 5:00 p.m. on the date of award. After the Bonds have been awarded to the winning bidder,the City will issue an Official Statement in final form to be dated as of the award date. The City will deem the Official Statement final as of its date, and the Official Statement in final form will include,among other things,the identity of the winning bidder, the final principal amount as adjusted,the expected selling compensation to the winning bidder and other information on the interest rates and offering prices or yields,all as provided by the winning bidder. Certificates of City Officials Concurrently with the delivery of the Bonds, the City will furnish to the successful bidder (a)a certificate dated the date of delivery of the Bonds, signed by the appropriate City officials and stating that 12 no litigation of any kind is then pending or,to the best of their information,knowledge and belief,threatened against the City to restrain or enjoin the issuance or delivery of the Bonds or the levy or collection of ad valorem taxes, over and above all other taxes authorized or limited by law and without limitation as to rate or amount on all locally taxable property within the City sufficient to pay when due the principal of or interest on the Bonds,or in any manner questioning the proceedings and authority under which the Bonds are issued, and (b)a certificate dated the date of delivery of the Bonds, stating that the descriptions and statements in this Official Statement (except in Appendix D, in the section above entitled "Tax Exemption," in the section above entitled "Litigation," and in the information as to prices/yields and CUSIP numbers on the inside cover page),on the date of this Official Statement and on the date of delivery of the Bonds, were and are true and correct in all material respects, did not and do not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make such descriptions and statements,in light of the circumstances under which they were made,not misleading, and that no material adverse change has occurred in the financial condition of the City between the date of this Official Statement and the date of delivery of the Bonds other than as contemplated in this Official Statement. Such certificate will also state, however,that such City officals did not independently verify the information indicated in this Official Statement as having been obtaied or derived from sources other than the City and its officers,but that they have no reason to believe that such information is not accurate. The City Attorney also will furnish to the successful bidder concurrently with the delivery of the Bonds a certificate dated the date of delivery of the Bonds,stating that the statements in the section above entitled "Litigation' on the date of this Official Statement and on the date of delivery of the Bonds were and are true and correct in all material respects and did not and do not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make such statements,in light of the circumstances under which they were made,not misleading. Legality of the Bonds for Investment The Act provides that bonds issued by the City under the Act are obligations in which public officers and bodies of the Commonwealth, counties,,cities and towns and municipal subdivisions of the Commonwealth, insurance companies and associations, savings banks, savings institutions, savings and loan associations, trust companies, beneficial and benevolent associations, administrators, guardians, executors,trustees and other fiduciaries in the Commonwealth may properly and legally invest funds under their control. Continuing Disclosure To assist the winning Vider in complying with the provisions of Rule 15c2-12,the City has agreed to execute a continuing disclosure agreement to provide certain annual financial information and event notices required by Rule 15c2-12 (collectively, "Continuing Disclosure") and has established written procedures described below under "Post-Issuance Compliance" to ensure compliance. A form of that agreement is attached as Appendix C. As set forth in Appendix C, such undertaking requires the City to provide only limited information at specified times and does not require it to disclose all information that may affect the value of the Bonds. The City may choose to make additional information available from time to time but has no obligation to do so. The City is required to file its annual Continuing Disclosure and any event notice with the Municipal Securities Rulemaking Board ("MSRB"). The MSRB designated its Electronic Municipal Market Access("EMMA")system as the repository for Continuing Disclosures filings. Bondholders will be able to access Continuing Disclosure filings with the MSRB at www.emma.msrb.org. 13 As described more fully in Appendix C, any Bondholder may take steps to enforce the obligation of the City to provide Continuing Disclosure,but any failure by the City under its obligation will not result in an event of default under the Bonds. Investors and other interested parties may contact the MSRB for additional information concerning its services. The City makes no representation as to the scope of the services provided to the secondary market by the MSRB or as to the costs for the provision of such services by the MSRB. Post-Issuance Compliance In voluntary compliance with the Internal Revenue Service ("IRS") pronouncements recommending and encouraging municipal issuers of tax-exempt and other tax-advantaged obligations to adopt written procedures to monitor compliance with federal tax law requirements post issuance to ensure that such obligations maintain their favorable tax status for as long as they remain outstanding, the City Council adopted a resolution on March 13, 2012 directing the City Ma pager and Director of Finance to establish written procedures to fulfill the post-issuance compliance prtices recommended by the IRS which also included direction to establish procedures for compliance with the City's Continuing Disclosure undertakings. Such federal tax law procedures have been establ ished an4re designed to ensure that bond proceeds are used for qualified purposes, property financed with such proceeds will be used initially and will continue to be used for qualified purposes, and to ensure compliance with arbitrage yield restriction and rebate requirements. The tax compliance procedures also establish remedial actions to be taken upon the discovery of a non-qualifying use of bond proceeds or bond-financed property or noncompliance with requirements related to arbitrage yield restriction and rebate. With respect to Continuing Disclosure compliance, procedures have been established which provide a monitoring process to ensure timely and complete filing of the information required under all of the City's Continuing Disclosure undertakings. [Remainder of page intentionally left blank] 14 SECTION THREE: CERTAIN INFORMATION CONCERNING THE CITY OF VIRGINIA BEACH,VIRGINIA Introduction The City of Virginia Beach, Virginia was m established on January 1, 1963, by the merger of Princess Anne County and the former, smaller City of Virginia Beach. This merger created one of the largest A aA cities in the Commonwealth of Virginia (the "Commonwealth") that covers 310 square miles and 38 miles of shoreline on the Atlantic Ocean and the Chesapeake Bay. The City encompasses the entire fi eastern border of Virginia south of the Delmarva NOR,FFo r C Peninsula and includes all of the area from the SA PE Chesapeake Bay to the North Carolina border. Virginia Beach has the largest population of {tt 'T Tt OCEAN any city in the Commonwealth, with a population of irk°I Virginia 452,965 according to the July 1, 2024 estimate of the Bach University of Virginia, Weldon Cooper Center for Public Service.As such,the City is the most populated city in the region and Virginia, and third most populated locality behind Fairfax County and Prince aACK William County in Virginia. The City is part of a LA Y Metropolitan Statistical Area(MSA) comprised of 16 ' localities, classified by the U.S. Census Bureau as Virginia Beach-Norfolk-Newport News. VA-NC Metro Area, and commonly referred to as Tidewater, N61RTH CAROL(NA Hampton Roads, Coastal Virginia, or by the region's area code"757."According to the latest data from the -; ~� :•— •- U.S. Census Bureau, it had a population in 2024 of 1,796,689, making it the 38' most populous MSA nationwide (Source: Census Bureau, American Community Survey 2024). The Virginia Beach-Norfolk-Newport News, VA-NC Metro Area is centrally located on the Eastern Seaboard,providing businesses access to more than half of the total U.S.population within a 750-mile (1,200 km) radius. As a city on the eastern seaboard, Virginia Beach has always been known as a resort community. The strength of the city's economy, however, lies in its diversification. Construction/real estate, light industry, technology services, wholesale and retail sales, agriculture, advanced manufacturing, healthcare, four major military bases, and resort and convention trade are the major aspects of the economy. The City encourages and supports this diversification. Virginia Beach is an independent, full-service city with sole local governmental taxing power within its boundaries. It derives its governing authority from its City Charter granted by the General Assembly of the Commonwealth. The governing body of the City is the City Council, which formulates policies for the administration of the City. The current City Charter provides for a Council-Manager form of government. There is no overlapping debt or taxing powers with other political subdivisions. The water and sewer and stormwater systems are operated on a self-supporting basis. 15 The Executive Offices are located at the Municipal Center, Virginia Beach, Virginia 23456, telephone number(757)385-4242. The telephone number for the Finance Department is(757)385-4681. Form of Government The City operates under the Council-Manager form of government as established by its City Charter. The governing body of the City is the City Council, which,vested with local legislative powers, formulates policies for the administration of the City. The City Council has eleven members, who serve for four-year terms. On August 15, 2023, the City Council formally adopted its decennial redistricting ordinance and included a 10-1 voting system. This system divides the City into ten districts of approximately equal voting-age population.Under this system,each voter can vote for only the Mayor and the representative for their ward district.The decennial redistricting ordinance was challenged in state court as violative of the City Charter. The state court found the redistricting ordinance exceeded the City's authority,but the court stayed further action until after a November referendum election. This referendum election asked whether the electorate desires the City Charter be amended to reflect the 10-1 voting system that was used in the 2022 and 2024 elections. The results of the 2025 referendum have been certified with 53% in favor of the amended City Charter. This proposed amendment has been sent to the General Assembly for action at its 2026 Session. The City Council elects a Vice-Mayor from among its members for a two-year term at the biennial organizational meeting. The City Manager is the administrative head of the municipal government and carries out the policies of the City Council. The City Manager is appointed by the City Council and serves at the pleasure of the City Council. The City Council also appoints members to certain boards,commissions,and authorities as it deems necessary to the operation of the City. School Board The School Board is comprised of eleven members,who serve four-year terms. The Virginia Beach City Charter requires the election of the School Board to be in the same manner and according to the same schedule as elections of the City Council. Accordingly,the 10-1 election ward district system used to elect the City Council is used to elect School Board members. The School Board exercises all of the powers conferred and performs all of the duties imposed upon them by general law. It does not have taxing authority. Elected Officials—Governing Body Additional details about City Councilmembers, including their liaison assignments, can be found on the City's website. Robert M. "Bobby"Dyer,Mayor Mayor Dyer is a retired home care physical therapist and has also worked as a health care executive and a business consultant in the health care field.He is currently a practitioner in residence in the school of government at Regent University. Mayor Dyer served his country in the U.S. Marine Corps from 1968 to 1972. He was elected to City Council in 2004, and re-elected in 2008, 2012, and 2016 as the Centerville District representative totaling 14 years. He was sworn in as Mayor on November 20, 2018 to fill an unexpired term and re-elected as Mayor in 2020 and 2024. He holds a Bachelor of Science degree in Physical Therapy from Saint Louis University, Master of Public Administration degree from Fairleigh Dickinson University,and a Ph.D. in organizational leadership from Regent University. 16 Rosemary Wilson, Vice Mayor-District 5 Vice Mayor Wilson is a realtor with Howard Hanna Real Estate and a former Virginia Beach schoolteacher, as well as a School Board member from 1996 to 2000 including serving as vice chairman. She was elected to City Council in 2000;and re-elected in 2004,2008,2012,2016.2020 and in 2024. She holds a Bachelor of Science in Education from Old Dominion University. She was recognized in 2012 by "Lawyer's Weekly",as one of the Most Influential Woman in Virginia,and was also appointed by Governor McDonnell to the Fair Housing Board and the Local Government Advisory Board to the Chesapeake Bay. She was honored by "Inside Business" in 2007 with the Women in Business Achievement Award and by the Virginia Beach Education Association in 1999 with the Friend of Education Award. She is a fellow of the Sorensen Institute for Political Leadership at the University of Virginia and the Civic Leadership Institute at Old Dominion University.Ms.Wilson has served as President of the Virginia Municipal League. In 2016, she was named Volunteer of the Year from the Virginia Recreation and Park Society and is currently the Co-Chair of Cycle for Survival,a non-profit that raises money for rare cancer research. Michael F. Berlucchi, Council Member—District 3 Council Member Berlucchi is the CEO of Arts Alliance,an organization that has provided over$25 million in support to more than 65 arts and cultural organizations across South Hampton Roads since 1987. Under his leadership, Arts Alliance continues to serve as a unifying force for the region's arts sector by providing strategic guidance, organizing collaborative initiatives, and advocating for policies that sustain and expand cultural opportunities. The Virginia Beach City Council selected Michael Berlucchi to fill the vacant Rose Hall District seat in May 2019,and then in the November 2019 Special Election he was elected by the voters to continue serving the Rose Hall District. He was re-elected in November 2020 and 2024 to serve as the Rose Hall District and then District 3 representative. He is a member of the inaugural Virginia cohort of The Hunt Institute State Policy Fellows.. a bipartisan program that brings together local leaders— from mayors and council members to sc of board chairs—who are committed to strengthening education policy across the Commonwealth. Mr. Berlucchi has been recognized as one of Inside Business' Top Forty Under 40 and as an OUTstanding Virgi Tian by Equality Virginia and as an Adult Move Maker by Teens With a Purpose for his dedication to yo ith empowerment. He has also been honored by UNCF Virginia for his work supporting minority students and Historically Black Colleges and Universities(HBCUs),and by the Council of United Filipino Organ zations of Tidewater for his commitment to the Filipino American community and the Philippine Cultural Center of Virginia. He has also authored articles and given presentations on a range of topics relate) to his work experience and community/civic engagement. He is an active community volunteer and supports numerous community and non-profit organizations,including Teens with a Purpose,CIVIC Leadership Institute,Green Run Collegiate Foundation,Connected Business Networking, United Negro College Fund, Virginia Beach for Fairness, Hampton Roads LGBT Public Safety Consortium,Virginia African American Cultural Center,Hope House Foundation,and the Virginia LGBTQ+Advisory Board, among many others. He has also served as a member of the Virginia Beach Human Rights Commission, Virginia Beach Community Development Corporation and held consecutive terms as president of Hampton Roads Pride. He was born and raised in Virginia Beach and is a graduate of First Colonial High School,George Mason University,the Sorensen Institute for Political Leadership at the University of Virginia,and the CIVIC Leadership Institute at Old Dominion University. Stacy Cummings, Council Member—District 8 Council Member Cummings was a partner and vice president/chief financial officer of Priority Auto Group,which he helped found in 1998,which started with two automobile dealerships in Chesapeake and grew to 19 dealerships located throughout Virginia becoming one of the 30 largest privately owned automobile dealership groups in the country with over 2,300 employees and the largest in Virginia before being sold in June 2023 to Lithia,the largest automobile retailer in the world.He was elected on November 17 5, 2024,to serve as the District 8 representative. He has served on several local boards including the Old Dominion Athletic Foundation,Judeo-Christian Outreach Center,Towne Bank and Virginia Beach Events Unlimited. He is a past president and chairman of the Hampton Roads Automobile Association. As president and a director of the Priority Automotive Charities, he has helped raise over$6 million to help support children's charities in Hampton Roads.He has been a resident of Virginia Beach for more than 20 years and served as the 44th King Neptune of the annual Virginia Beach Neptune Festival in 2017. Mr. Cummings received his Bachelor of Arts degree from the University of Maryland and is a retired member of the American Institute of Certified Public Accountants.He has completed all required course work for a Master's degree from American University. Barbara M. Henley, Council Member—District 2 Council Member Henley is a partner in Henley Farms,LP and has taught in the City's public school system. She was elected to the City Council 1978-1990 representing the Pungo Borough, during which time she served as Vice Mayor from 1982 to 1984. She was re-elected t serve on the City Council 1994, 2002,2006,2014, 2018 and 2022 to represent the Princess Anne Distric. She is serving her 106 term on the City Council,now representing District 2.She is President of the Princess Anne County/Virginia Beach Historical Society and the author of Glimpses of Down-County Hislory: Southern Princess Anne County. She holds a Bachelor of Science degree in Elementary Education from Old Dominion University and a Master's degree in Urban Studies from Old Dominion University. David "Hutch"Hutcheson, Council Member-District I Council Member Hutcheson is retired after 35-years of dedicated public service to the City of Virginia Beach Fire Department (VBFD). He started as a volunteer with the Kempsville Fire Station #9 before joining VBFD in August 1988. Progressing through the ranks, his positions include 17 years in various fire station assignments,Captain of Fire Administration,Chief Public Information Officer,District Chief of the North Division and Deputy Chief of Operations. Following the promotion of then Fire Chief Steven Cover to Deputy City Manager, Mr. Hutcheson was appointed Interim Fire Chief on November 7, 2016,and later appointed the fifth Fire Chief for the City of Virginia Beach on June 8,2017.Mr.Hutcheson is an original member of the Virginia"Task Force 2 Urban Search&Rescue Team(VA-TF2)and previously served as the sponsor agency chief for the team. As a member of VA-TF2, he was deployed to many complex disaster situations, including the Oklahoma City bombing,numerous hurricane deployments,and the Haiti earthquake. He is a member of multiple professional organizations, including the Virginia Fire Chiefs Association, where he previously served on the executive board as the president. He co-chairs the Virginia Fire Rescue Conference and has been a long-term volunteer for the Norfolk Emergency Shelter Team (NEST). His family started Greenbrier Florist in 1977. He was elected to the City Council in November 2023 and re-elected in 2024 to represent District 1. Cal "Cash"Jackson-Green—District 7 Council Member Jackson-Green has over 20 years of professional and community leadership with extensive experience in operations management and is a proven problem-solver skilled in financial planning and resource allocation.He was elected on November 5,2024,to serve as the District 7 representative.He holds a Certificate in Theology and advanced certifications in FEMA Command and Active Shooter Preparedness. He also has completed advanced coursework in negotiation strategies. A lifelong advocate for his community, Mr. Jackson-Green has served in leadership roles with the Virginia Beach Library Board,the 200 Plus Men organization,and the Process Improvement Steering Committee.His commitment to public service extends to the Virginia Beach Rotary Club,VFW Auxiliary and Citizens Police Academy. He and his wife volunteer with numerous organizations,reinforcing their shared commitment to community services and development. Guided by the philosophy"People over Politics,"Cash is focused on advancing 18 key priorities for District 7, including public safety, mental health services, infrastructure improvements, and economic development. He works collaboratively with residents, business leaders, and civic organizations to create sustainable solutions that enhance quality of life. Robert W. "Worth"Remick. Council Member—District 6 Council Member Remick moved to Virginia Beach in 1985 when he began his commercial real estate career. He is in his 40th year as a commercial real estate advisor at Colliers International where he advises businesses and owners on their industrial real estate needs. He was elected to the City Council on November 8, 2022,to represent District 6. Mr. Remick graduated from Hampden-Sydney College with a degree in Humanities. As a four-year tennis athlete,he was All-ODAC for three years and attained national rankings for Division III tennis. He served as a legislative aide in the Virginia State Senate in the 1984 Virginia General Assembly and was a fellow at the Sorensen Institute for Political Leadership at UVA. He has volunteered for several community organizations and boards throughout his career, including South Hampton Roads Habitat for Humanity, Green Run Collegiate Foundatio ,the Virginia Beach Forum and various leadership roles at his church, Eastern Shore Chapel. From 2 to 2006, he was the head tennis coach for both boys' and girls' teams at Frank W.Cox High Schoo previously served on the Virginia Beach Community Development Corporation Board and current ry the African American Cultural Center Board. Dr.Amelia Ross-Hammond Council Member—District 4 ' Council Member Ross-Hammond is a servant leader in the community, who is the founder and Chairman of the Virginia African American Cultural Center, Inc. Also, she is retired from Norfolk State University as distinguished professor emerita and has served as the chair for the Virginia Music Educators Conference Multicultural Awareness Committee. She was elected on November 8, 2022 to represent District 4. She previously served as a member of City Council from 2012 to 2016.Dr.Ross-Hammond is a high-school graduate of Moreton Hall in Shropshire, England, and holds a Bachelor's degree in Music Education from Ithaca College,New York;a Master's degree in Music Education from the College of New Jersey; and a Doctorate in education leadership, curriculum and instructions with a minor in ethnomusicology from the University of Denver. She is a graduate of the Sorensen Institute for Political Leadership program from the University of Virginia. Dr. Ross-Hammond has received numerous awards, including the Meyera E. Oberndorf Human Rights Achievement in Government Award from the Human Rights Commission, the Hampton Roads Planning District Commission Resolution of Recognition from the City of Virginia Beach,the "Impacting Lives Award" from the New Journal and Guide, 2021 Servant Leader and a letter of commendation for her community service, which was read at the U.S. Capitol by Congresswoman Elaine Luria. She is also the first recipient of the Dr.Christine Mann Darden Outstanding Public Employee in Hampton Roads Award,given for the first year in 2023 by the Hampton Roads Chapter of the American Society for Public Administration. Politically, Dr. Ross-Hammond has received several gubernatorial appointments, including the Council on the Status of Women by Governor Kaine, the Community Services State Board by Governor McDonnell and the Hampton Roads Transit Commission (HRT) by Governor McAuliffe. Additionally, Dr. Ross-Hammond was reappointed to HRT by Governor Northam. Jennifer V. Rouse, Council Member—District 10 Council Member Rouse is an assistant professor of Sociology and department chair for Social Sciences and Education at Tidewater Community College. She was elected on November 8, 2022, to represent District 10. She earned a Bachelor's degree in English literature from Virginia Wesleyan University and a Master of Science degree in Sociology from Virginia Commonwealth University(VCU). While at VCU, she was awarded the L. Douglas Wilder Graduate Scholar Fellowship, which provided 19 numerous research opportunities,including the opportunity to research the barriers and supports to serving low-income youth in Richmond. Joashua F. "Joash"Schulman, Council Member—District 9 Council Member Schulman practices as a solo real-estate and business attorney and serves as the managing partner of Town Center Office Suites, an executive office space serving over 160 small businesses in the heart of the Virginia Beach Town Center. He was elected to the City Council on November 8,2022 to represent District 9.He is a 2002 graduate of the James Madison College at Michigan State University,earning his undergraduate degree in International Relations with a concentration in Latin American and Caribbean affairs.He continued his studies at Michigan State University College of Law and earned his degree as a Juris Doctor in 2005. Prior to being elected to serve on City Council, Mr. Schulman served as chair of the Virginia Beach Wetlands Board and vice chair of the Envision Virginia Beach 2040 Vision to Action Community Coalition. He has also served on numerous community boards, including Virginia Beach Vision, the Central Business District Association(CBDA), the Hampton Roads Chamber of Commerce,Lynnhaven River Now and the Neptune Festival Foundation. He was a former president of the CBDX (the 40-and-under young professionals' division of the CBDA), a 2022 graduate of the Civic Leadership Institute and a recipient of the Inside Business Top-40-Under-40 Award in 2015. He is passionate about our local economy and strategic growth initiatives, our public school system,coastal resiliency,and environmental issues. Certain City Council Appointees and Administrative Staff Members The City Manager is responsible for planning,organizing,directing,and coordinating all activities of the City. The City Manager is also responsible for appointing and discharging all City employees and officers, though responsibilities may be delegated to subordinates. A major responsibility of the City Manager is the preparation of the annual City Operating Budget and Capital Improvement Program. The City Attorney has management laarge,and control of all legal business of the City. The City Attorney is chief legal advisor to the City Council,the"City Manager,and all City departments and agencies. It is the duty of the City Attorney to advise the City Council concerning the legality of actions by the City and to represent the City in al l matters affecting its interest. The City Real Estate Assessor is responsible for preparation and certification of the Land Book and appraising all real property in the City on an annual basis. In addition,this office administers the Land Use Assessment Program for qualifying farm and forest lands and processes all transfers and subdivision plats, new construction,and taxpayer appeals. The City Clerk's Office is responsible for recording and maintaining all legislative documents and actions of the City Council; preparing and monitoring the legislative budgets; and compiling annual financial disclosures for City Council and members of City Boards and Commissions. Selected City Council appointees and administrative staff members' biographies are summarized below. Patrick A. Duhaney, City Manager Patrick Duhaney was appointed as City Manager effective July 20, 2020 by City Council. Prior to taking on his new role, Mr. Duhaney served as City Manager of Cincinnati, Ohio, where he had been employed since 2009 in various roles, including Contract Compliance Specialist, Chief Procurement Officer, and Assistant City Manager. Mr. Duhaney served in the U.S. Army on active duty and in reserve 20 capacity from 1999 to 2015 under combat engineer and ordnance commands. He also worked for a community development financial institution in Cincinnati, where he served as a program officer responsible for issuing community development loans, oversaw the Local Initiatives Support Corporation office's loan portfolio, and worked to bring resources to aid in the redevelopment of Cincinnati neighborhoods. Mr. Duhaney has served on numerous boards in Cincinnati pertaining to neighborhood economic development and redevelopment and chaired the City of Cincinnati's Minority/Small/Women Business Enterprise Advisory Board.He holds a Bachelor of Arts in Sociology and Urban Studies from the Cleveland State University and a Master's degree in Community Planning from the University of Cincinnati. He is a graduate of the Urban League's African-American Leadership Development Program. He is also a certified Economic Development Finance Professional and a Certified Public Procurement Buyer issued by the National Institute for Government Procurement(NIGP). Mark-D. Stiles, City Attorney Mark Stiles was appointed as City Attorney effective March 1, 009. Mr. Stiles has served in the City Attorney's Office since 1999 in roles including Deputy City Atto for Litigation, Senior Litigation Attorney and Associate City Attorney. Mr. Stiles was employed , an associate with the law firm of Willcox&Savage,P.C.from 1989 until 1999. He holds a Bacheior'o from West Virginia University (1986)and Juris Doctor from Washington&Lee University 89). Amanda F. Barnes, City Clerk Amanda Barnes has served as City Clerk since January 9,2018. Ms.Barnes is a Master Municipal Clerk and attended Tidewater Community College,the Old Dominion University's Executive Development Center,and Virginia Commonwealth University. She is an active member of the Virginia Municipal Clerks Association. Sue C. Cunningham, City Real Estate Assess _ Sue C. Cunningham was appoirted by the City Council as the City Real Estate Assessor in July 2022 after service in the department beginning in 2005,working through the ranks of Appraisal Supervisor to Assistant Real Estate Assessor in 20 8. She has a Bachelor of Science degree in Animal Husbandry from University of Maryland. Ms. Cunningham holds a Certified Residential Appraisal license issued by the Commonwealth of Virginia, is a long-time member of the International Association of Assessing Officers and is currently serving as First Vice-President for the Virginia Association of Assessing Officers. 21 Wendy Hu, Director of Finance Wendy Hu is a Certified Public Accountant with more than 27 years of extensive experience in public finance,governmental accounting,administration and operations.She was appointed the Director of Finance in December 2025. Wendy joined the City in December 2019 as City Controller. Her prior roles demonstrate a proven track record in municipal finance across Virginia including Acting Chief Financial Officer/Assistant Chief Financial Officer,City of Portsmouth,Virginia from September 2018 to December 2019,Director of Budget and Finance,Isle of Wight County,Virginia from March 2017 to September 2018, Controller, City of Chesapeake, Virginia from September 2013 to February 2017, Accounting Manager, City of Chesapeake, Virginia October 2012 to September 2013. Wendy has a Bachelor of Science degree in Accounting from Old Dominion University, and she holds the Virginia Government Finance Officer Certificate. Governmental Services and Facilities The City provides a comprehensive range of public services for its residents.These services include police,emergency medical response,fire protection,collection and disposal of refuse,water and sewer,and stormwater services, parks and recreation facilities, museums, libraries, and maintenance of streets, highways, parks and public beaches. Other services provided include public education from kindergarten through twelfth grade, public health and social services, certain technical and special education services, mental health assistance, planning and community development services, agricultural services, housing services, and financial support for services and facilities operated by selected agencies of the Commonwealth of Virginia and constitutional offices, such as the correctional center, district and circuit courts,and department of public health. The City's municipal building portfolio is comprised of-approximately 1,300 buildings and physical assets across 670 city-owned properties, with nearly 6,000,000 square-feet of building under roof. These facilities range in size from small neighborhood wastewater pump stations and park restrooms to the 385,000 square-foot Judicial Center building.Virginia Beach's 34-building municipal campus is comprised of the Virginia Beach Public Schools Administration building, Virginia Beach Police Headquarters and First Police Precinct,an Emergency Communications/Emergency Operations building,the Virginia Beach Corrections Center, Virginia Beach Juvenile Detention Center, the Virginia Beach Judicial Center, the Public Works/Facilities Management and Operations compound, the historic Princess Anne County Courthouse, a Central Heat Plant that distributes both hot and chilled water throughout the campus for HVAC, and numerous administrative facilities, including City Hall. In close proximity are Public Works' Fleet Management, Waste Management, Stormwater Management, Mosquito Control, and Highways Management and Operations compounds, Public Utilities/Management and Operations compound, the Police Mounted Patrol stables,and the open-air Virginia Beach Farmer's Market.Further,Virginia Beach's municipal portfolio includes four Police Precincts,a Law Enforcement Training Academy,a Police Vehicle and Operations Training Center, an Animal Rescue and Adoption Facility, 21 Fire Stations (18 of which are shared with Emergency Medical Services/Rescue Squads and one shared station at the north end of Virginia Beach located on Fort Story portion of the U.S. military base, Joint Expeditionary Base Joint Creek-Fort Story), a standalone Emergency Medical Services station, an Emergency Medical Services Administration and Training Center, a Fire Training Center, ten Public Libraries, including a joint-use library with Tidewater Community College and a public law library,numerous Human Services buildings and care facilities, a Housing Resource Center, 293 city parks, 293 segments of facilities (i.e., bikeways and trails maintained by the City)totaling 280 miles and 7 city recreation centers,and 86 public educational facilities located throughout the City. Other facilities owned and operated by the City include the Virginia Beach Convention Center,the Virginia Aquarium&Marine Science Center,Darden Marine Animal Conservation Center,seven Historic 22 Homes and Museum sites,a tennis complex converted to forty-four pickle-ball courts,four municipal golf courses,a 6,000-seat multipurpose sports stadium,a 5,000-capacity sports center, a 1,308-seat performing arts center, a 20,000-seat amphitheater which books approximately 40 entertainment events per year, the Dome indoor-outdoor entertainment and concert venue with 3,500-seats indoor and 1,500 capacity outdoor and two parking garages providing 1,475 spaces that are part of the Atlantic Park mix-used development in the Resort Area,and a Resort Area highlighted by a 2.5 mile concrete Boardwalk and numerous parks and event stages that host outdoor concerts and attractions year-round. [Remainder of page intentionally left blank] 23 City of Virginia Beach —Organizational Chart Virginia Beach Residents Con!aItutionalOfFicers State Agencies City Treasurer Courts Clerk of the Circuit Court Juvenile Probation Commissioner of the Revenue Magistrate Commonwealth's Attorney Voter Registration and Elections Sheriff and Corrections School Board City Council Dr.Donald Robertson Lyndon S.Remias Sue C.Cunningham Mark D.Stiles Amanda F.Barnes Patrick A.Duhaney School Superintendent City Audltor City Assessor City Attorney (Sty Clerk City Manager • Administration, Attendance,&Health Amanda Jarratt • Instruction Kenneth L.Chandler Deputy City Manager Monica D.Croskey • Operations& Deputy C ty Manager Deputy City Manager Maintenance • Pupil Transportation • Technology • Housing& • Agriculture • Communications • Budget& Neighborhood Convention&Visitors • Cultural Affairs Management Services Preservation Bureau • Finance City Manager's Office • Human Services • Economic • Human Resources • Emergency • Libraries Development • Information Communications& • Parks&Recreation • Planning&Community Technology Citizen Services • Public Utilities Development • Office of Performance • Emergency • Virginia Aquarium Management &Accountability Emergency Medical • Public Health Liaison • Virginia Beach Courts Services Liaison • Fire IV • Voter Registration& • Office of Volunteer Elections Liaison Resources • Police • Public Works General Overview of Governmental Organization and Selected Functions The City government structure has evolved to respond to the challenges of increased demand for quality services, infrastructure needs, potential reductions in state and federal funding and a slowdown in population and revenue growth. The City Manager carries out the policy decisions made by City Council, as well as being responsible for overseeing the daily operations of City government. City departments and service units report directly to the City Manager,Deputy City Managers,or Chief of Staff. 24 During its retreat on August 26, 2025, the City Council identified twelve themes and factors for success for the City, and City staff began developing a 24-month focused action plan for implementation. City staff obtained feedback from the public through the 2025 Resident Survey conducted by ETC Institute and a Focused Action Plan Community Survey available on the City's website. The top five themes that respondents noted should receive the most or some focus were: flooding and environment, public safety, affordability of City services/taxes/fees, education,and housing affordability and homelessness.City staff drafted the FY26-27 Focused Action Plan by incorporating the Council's direction, staff input, and feedback from the public, and on October 28, 2025, the City Council received a briefing on the Focused Action Plan and its three overarching key focus areas - People, Places, and Partnerships (shown below). Council approved a resolution adopting the FY 26-27 Focused Action Plan on November 25, 2025. The Focused Action Plan's three overarching key focus areas and underlying initiatives and performance measures allow the City to be transparent about its goals, focused on its efforts, and accountable for the results. • People-People are the foundation of the City's public service. We seek to listen, serve, and support the diverse community that makes Virginia Beach special. Whether it's the residents and visitors we serve or the dedicated public servants who serve them,we value our people. We are interested in hearing from them, addressing their concerns and using their feedback to inform our service delivery. We strive to provide high-quality services in a fiscally responsible manner. Initiatives in this focus area include public safety, resident engagement and service delivery,and taxpayer affordability. • Places- We strive to be a place of choice for families,businesses,and visitors. To achieve this, we recognize that we must offer places that can support a strong economy, housing options that are attainable for various income levels, and a built environment that appropriately accommodates these goals while aligning with community values, neighborhood integrity,and the protection of our natural resources.We will continue to be a place of choice by being strategic and transparent in our land use endeavors. Initiatives in this focus area include economic development,tourism, land use, attainable workforce housing, stormwater and flood protection, environment, and Law Enforcement Training Academy, Interfacility Traffic Area, Virginia Beach Trail, Rudee Park, Museum of Contemporary Arts site, and Central Beach District. • Partnerships - The whole is greater than the sum of its parts. We recognize that partnerships allow us to expand our reach and increase our impact. We seek to serve the community, bolster our economy, and prepare for our future by appropriately leveraging the strengths of other agencies and entities. Initiatives in this focus area include Virginia Beach City Public Schools, public-private-partnerships, homelessness, mental and behavioral health,and arts and culture. The plan will be reviewed annually with the City Council,and City staff will submit semiannual performance reports to the City Council to document the City's progress in implementing the plan. Functional Departments For additional information about the various departments, see the City's website. Operating performance data for the City overall as well as various departments can be found at the City's website on the Virginia Beach Open Data Portal. The Department of Agriculture provides educational and resource services in agriculture (AG), home economics, money management, 4-H, and community resource development. The department has 25 three major divisions. The Virginia Beach Cooperative Extension Office offers educational programs and technical information on agriculture,horticulture,and money management.The Farmer's Market is a strong and viable market that provides a venue for farmers and entrepreneurial AG related businesses. The venue serves the needs of residents and visitors with a variety of shopping experiences. The Farmer's Market promotes rural heritage activities with eight special events a year and AG educational K-5 children's programs and hoedowns.The Agriculture Reserve Program(ARP)is a farmland preservation program that purchases development rights from landowners. This program is designed to maintain agriculture as a viable industry in Virginia Beach by preserving the resource base for farming. The ARP provides the City a tool to preserve the agricultural industry as well as green space, forest/tree canopy environment, and wildlife. In addition,the purchase of development rights along with preservation of farmland/open space helps mitigate flooding and is a tool against sea level rise. As of June 30, 2025 the acreage in the ARP as authorized by City Council including agricultural acreage reserved for future use,is approximately 11,129 (comprised of 10,998 acres approved per Council Ordinance plus 131 acres reserved for future development) acres. The program is recognized at both the state and national level for conserving our natural resources,protecting the rural character and heritage of southern Virginia Beach,and preserving the agriculture land base of the City's third largest industry and the Cr- wealth of Virginia's overall number one private industry. For additional information about the A business and the ARP,see Sections Four and Five of this document. The Department of the Virginia Aquarium operates the Virginia Aquarium& Marine Science Center, which includes three main buildings: the North Building, the South Building, and the Darden Marine Conservation Center.The Virginia Aquarium&111arine Science Center first opened in 1986.Since its opening, it has undergone four expansions, solidifying its status as a premier destination for marine education and conservation, as well as a significant tourism driver for the City of Virginia Beach as the third most visited attraction in the Commonwealth of Virginia. The Virginia Aquarium operates through a unique public/private partnership between the City of Virginia Beach and the Virginia Aquarium & Marine Science Center Foundation, Inc. This partnership ensures the seamless operation of the facility, with the City owning and managing the buildings while the Foundation oversees ownership of the animals,exhibits,educational programs,and conservation initiatives, including the statewide stranding response for marine mammals and sea turtles along Virginia's coastline. With its engaging interactive exhibits and vast aquariums boasting 800,000 gallons of water, the Virginia Aquarium takes visitors on an immersive journey through Virginia's marine environment.Visitors can encounter a diverse array of marine life, including sharks,river otters,harbor seals, Komodo dragons, Tomistoma crocodiles,and sea turtles. A significant milestone in the Aquarium's history is the Economic Impact Study conducted in 2023, shedding light on its substantial contribution to the local economy. According to the Sage Policy Group's report,the Virginia Aquarium supports over 3,300 jobs annually in the surrounding community, fostering nearly$260 million in economic activity for the City of Virginia Beach. This ongoing success underscores the Virginia Aquarium &Marine Science Center's vital role in education,conservation,and economic development within the city,region,and state. The Department of Budget and Management Services develops and oversees the City Operating Budget and Six-Year Capital Improvement Program. The department provides assistance and direction to other City departments for any budget amendments for issues that arise during the year. The department also provides multi-year forecasting of revenues and expenditures, provides fiscal impact analysis, coordinates grant review,monitors performance measurement data,evaluates City programs and services, and assists departments in management issues as assigned. 26 The Office of the City Auditor is an independent appraisal function responsible for financial, attestation engagements and performance audits of City programs, functions and activities. Other responsibilities include oversight and management of the City's external audit contract;coordination of the City's fraud,waste and abuse prevention and reporting program; and technical and advisory services. The City Auditor is appointed by the City Council and reports directly to City Council. The audit services provided by the office enhance efficiency and effectiveness of City operations, ensure compliance with federal, state and local laws and regulations, and assist in maintaining an internal control framework which reduces the risk of loss to the City. The Office of the City Auditor also operates a fraud, waste and abuse hotline and oversees and coordinates investigations of suspected fraudulent activity. A Council-appointed Audit Committee consisting of two non-voting Council members,and three voting citizen members with at least one citizen member being a licensed Certified Public Accountant and the two other residents having a background in finance, accounting, d/or auditing reviews the City Auditor's audit schedule and audit reports. The Communications Office is a full-service a y viding strategic and tactical communication solutions for citywide and department-level initiatives. ong the services provided: promoting community awareness of and engagement in municipal governor organizing special events; producing videos and cablecasting live meetings; maintaining content on th City's website and social media sites; managing media inquiries and responses; speechwriting; writing articles, news releases and reports; and creating presentations. The Convention & Visitors Bureau coordinates the advertising and promotion of tourism and convention activities and is responsible for bringing leisure travelers, meetings and conferences, sports events, group tours and conventions to Virginia Beach. The department operates two year-round Visitor Information Centers and two seasonal kiosks in the resort area, and the award-winning Virginia Beach Convention Center. The department includes the Resort Management Office (RMO), whose mission is to enhance Virginia Beach's Resort Area environment for residents and visitors through coordination of City Code enforcement,entertainment programming, franchise business opportunities,hospitality services,and maintenance. The RMO also serves as the citywide resource for special event and film production permitting,helping to create and capture meaningful experiences. The Cultural Affairs Department was created to reflect the importance of the role of arts and culture in making a well-rounded and vital community for a lifetime. The creation of this department demonstrates the rising significance of our cultural facilities in the City's structure. The role of the Cultural Affairs Department consists of the following: develop the vision and direction for cultural arts in Virginia Beach; direct the Virginia Beach Arts & Humanities Commission; coordinate the City's Public Art Program;assist the Public Art Virginia Beach Foundation and Virginia Beach Historic Houses Foundation 501(c)(3)non-profit organizations;provide contract management for the Sandler Center for the Performing Arts; oversee the City's history museums; and serve as liaison to the ViBe Creative District, Virginia African American Cultural Center,Zeiders American Dream Theater,and Sandler Center Foundation. The Economic Development Department develops, implements, and maintains programs that facilitate the creation of a diversified, continually expanding dynamic economy through the development of, and investment in new,targeted businesses and enhancement of existing businesses. Department staff work with the business community to provide various business development services including site selection, market information, financial guidance, and business assistance, as well as ascertain workforce development needs of the community that the educational community can provide. The department works with the City of Virginia Beach Development Authority(VBDA)to attract business and industry(domestic 27 and international) to the City and to develop sites for new or expanding businesses in the City's Business/Industrial Parks. Through the Economic Development Investment Program (EDIP) that was established in 1994, the VBDA has awarded grants designed to incentivize the creation and retention of jobs and capital investment. Staff will continue to work with the development community to advance the goals for redevelopment within the Strategic Growth Areas (SGAs). Advancing development projects within the Resort Area and the Central Business District in the Pembroke SGA will continue to be a priority. Opportunities to acquire and assemble strategic properties for redevelopment will allow the city to play a more proactive role in developing the urban areas of our City. The Department of Emergency Communications and Citizen Services(ECCS)is comprised of VB911 and VB311, which processes calls for service 24-hours a day, seven-days a week. VB911 (Emergency Communications) is a centralized public-safety answering point (PSAP) for residents and visitors to access public safety services for emergency situations;VB911 receives and processes emergency calls for service and coordinates the response of public safety personnel including Police,Animal Control, Fire and Emergency Medical Services.VB911 also receives and processes non-emergency calls for service for Police, Fire, Emergency Medical Services, Police/Animal Control, and other departments citywide. VB311 (Citizen Services) processes general government information and services requests via multiple communication channels including telephone, online assistance, email, print, radio dispatching and emergency notifications. Also,VB311 assists walk-in Gusto and various city departments such as Real Estate Assessor, Parks and Recreation/Landscape Services;City Treasurer. Planning, Public Utilities and Public Works,with their information/service requests. The Department of Emergency Management (VBEM) maintains a comprehensive emergency and crisis management program to minimize disruptions and City's impacts from human-caused, natural, or technological disasters and potential catastrophic incidents''`by utilizing mitigation, prevention, preparedness, response, and recovery strategies. The City's emergency management system is in compliance with State Code and is outlithin Local Ordinance. VBEM oversees and coordinates all citywide emergency initiatives.Examples of services provided include the City's flood mitigation program for homeowners who face severe flood risk, Virginia Beach Community Emergency Response Team (VBCERT)program, public safety planning for special events, crisis event planning, emergency trainings and exercises involving multiple city departments, risk assessment and mitigation of threats to public facilities,and Citywide emergency response and recovery coordination. The Department of Emergency Medical Services (EMS) oversees the pre-hospital emergency patient care services provided by ten volunteer Rescue Squads augmented by career paramedics,operating out of 21 fire and EMS stations,including 18 city-owned shared Fire/EMS stations and three rescue-squad- owned stations. With more than 500 volunteers and career EMS providers, Virginia Beach EMS remains the largest volunteer-based EMS system in the country. The department provides safe and efficient response to the incident scene,basic and advanced treatment of patients and prompt transport to the hospital. The department provides multiple specialized resources and services including mass-casualty trucks, tactical(SWAT)medics, search and rescue,a marine rescue team,bike team and beach lifeguard services. In addition, the department provides initial and continuing education training for volunteer rescue, career EMS,fire department,police department,and VB911 emergency communications personnel. The Department of Finance oversees the financial affairs of the City and ensures the financial integrity of City operations including compliance with Federal and State laws and City code. The Department is responsible for financial reporting including the preparation of the Annual Comprehensive Financial Report. Departmental services include maintenance of the City's accounting records and financial system,management and administration of the City's debt,accounts payable,accounts receivable, payroll,purchasing including management of the City's minority business procurement programs and risk management. 28 The Fire Department is an all-hazards response agency. It is responsible for fire prevention (enforces statewide Fire Prevention Code), fire investigations, fire suppression, emergency medical, hazardous materials, technical rescue and marine incident response. Also, it provides mutual aid to neighboring localities. In addition, it has four specialized teams serving the region and state: Tidewater Regional Technical Rescue Team, marine firefighting, hazardous materials response, and Metro Medical Response System, and houses the FEMA (Federal Emergency Management Agency) Urban Search and Rescue Task Force,Virginia Task Force Two,which is one of 28 national FEMA Urban Search and Rescue teams. The City's firefighters respond to emergency events from 21 fire and rescue stations including 20 city owned stations and one shared facility at the north end of Virginia Beach located on Fort Story portion of the U.S. military base, Joint Expeditionary Base Little Creek-Fort Story. In addition,the department's Volunteer Support Technician Team,comprised of volunteer personnel with proper training from the City's fire training center,provide manpower contributions to a variety of department customer service areas. The Department of Housing and Neighborhood Preservation connects people to resources to help them obtain, maintain, or sustain housing, and to promote vibrant well-maintained neighborhoods. The department enforces building and property maintenance codes,,provides financial assistance to homeowners for home rehabilitation, and administers federal and state funded rental assistance programs for eligible households. In addition,the department supports for-profit and nonprofit development of new affordable housing in the city and coordinates a community-w system rvices and programs to make homelessness rare,brief and nonrecurring. The department operates the Ho Resource Center, a one- stop shop that provides homelessness prevention assistance, day, ices, she er, and permanent housing for people experiencing or at risk of homelessness. The Department of Human Resources is responsible for developing and managing the City's human resource programs to ensure quality,efficiency and diversity. The department manages recruitment and retention,applicant testing,classification and compensation,occupational health services,professional development, employee communications, occupational safety, policy creation and interpretation, dispute resolution, performance management, workplace investigations, employee recognition, leave programs, workforce planning, official personnel records and oversees several federal laws including Family and Medical Leave Act,Americans with Disability Act, Equal Employment Opportunity,Occupational Safety and Health Administration and Fair Labor, tandards Act. The department assists in member development in the areas of leadership,personal and pro ional growth,organizational awareness,job skills and career counseling and coaching. Staff support is provided to the Human Rights Commission, and the Personnel Board. The Virginia Beach Department of Human Services encompasses four community enriching divisions:behavioral health,community justice, social services and quality assurance. These divisions provide supportive community resources, community protection,preventive services,and HIPPA oversight to Virginia Beach residents. Behavioral Health and Developmental Services (BHDS) Division provides services for children and adults through a variety of programs and in multiple settings,including offices,homes,schools,jails,residential settings, hospitals, etc. Same day access is available at central locations for children and adults with mental health and/or substance use disorders and provides a comprehensive assessment that guides referrals to other behavioral health services such as psychiatric evaluation,medication management,therapy,case management, psychosocial rehabilitation day program, and a variety of substance use disorder treatment programs. For individuals with an intellectual or developmental disability, a myriad of services are offered including a day support program,case management,residential services,employment services,and early intervention services. Through partnerships with the Virginia Beach Police Department and Sheriff's Office,the division provides jail diversion programs aimed at enhancing individual outcomes while promoting safe and stable communities. Emergency Services and mobile crisis management services are available in the community and includes a co- 29 responder team with Virginia Beach Police to provide optimal coordination of response to behavioral health emergencies. The Community Justice Division promotes public safety and individual growth through compassionate, community-based services that support accountability, rehabilitation, and dignity. The division provides fair and professional pretrial, post-conviction, and detention services for adults and youth, ensuring safe custody when necessary and fostering physical, emotional, and social development through evidence-informed programming. Guided by integrity, respect, and teamwork, we are committed to serving our community with honesty,responsibility,and unwavering professionalism. The Division of Social Services provides a range of quality-of-life resources and case management for adults and children. It is composed of five program areas: Adult and Aging services, Benefits Programs, the Children's Services Act,Child Welfare services,and Employment and Integrated services.The Adult and Aging program comprises Adult Protective Services,Investigation,Ongoing Services,Intake Call Center,Guardianship Program,Companion Services,Long Term Services and Support and Adult Foster Care.The Benefits Program includes federal social safety net programs to meet the basic needs of residtc, including Supplemental Nutrition Assistance Programs (SNAP) for food assistance, Medicaid for health needs. Temporary Assistance for Needy Families (TANF), cash assistance for families with dependents energy assistance for the repair, replacement,orpaymentof apowerbill.Child Welfare includes child prve services,foster care,adoptions, kinship services, and Fatherhood programs. The Employment& Integrated Services includes employment and training services for TANF recipients enrolled in the Virginia Initiative for Educationand Work (VIEW) Program,SNAP recipients,the Childcare Subsidy Program.and I ntegrated Services for individuals and families at risk or experiencing homelessness. Their services include applying for benefits, employment services, behavioral health needs,family support and housing needs. The Continuous Quality Improvement (CQI) division ensures that all staff and client privacy, confidentially and Health Insurance Portability, Accountable Act (HIPAA) and Code of Federal Regulation (CFR) 42, Part 2 (substance abuse information protection) regulations are followed and enforced. The CQI division supports all divisions in the department. The Department of Information Technology (IT) designs quality solutions to power City operations,modernize government services and advance City Council goals.The department recommends and deploys innovative technologies which enhance communication between residents and government and empower City employees to serve the public more efficiently.IT has six primary business units:Business Center and Mail Services; Applications Support; Infrastructure and Operations; Data and Information Management; Strategy Architecture and Planning; and Information Security. Additional information regarding information security provided by the department can be found herein under the heading "Cyber Security—Protection of City Information Technology."The IT Department's award-winning products and services continue to drive the City's digital transformation. The Department of Parks and Recreation's mission is to deliver parks,recreation programs and public spaces that reflect the priorities of our community;support tiered levels of service that recognize the diverse needs of the community; and focus on sustainability of core programs, services and facilities through efficient business practices. The department is supported in part by the Parks and Recreation Special Revenue Fund,which collects fees and user charges for recreation center programs. The Business Services Division is responsible for managing the department's financial resources coordinating the development of the operating budget, the department's human resources functions, culture and employee experience,marketing,communication and creative services,and customer service. The Planning,Design and Development Division updates the Virginia Beach Outdoors Plan and Active Transportation Plan; manages the implementation of the plans and the construction and replacement of Parks and Recreation facilities through the department's Capital Improvement Program. The Programming and Operations Division is responsible for the following areas: providing recreation and leisure services to adults, senior residents and youths; providing residents with disabilities the opportunity to receive the benefits of recreation and leisure in the least restrictive environment; operating all parks and park facilities;operating 30 five motorized boat launches;boat slip rentals to store boats at a marina;operating seven recreation centers located throughout the City;and operating Out-of-School Time programs. In addition to maintaining over 293 city parks,managing the 48 open space preservation areas, and providing park operations support and customer service for all City Parks, the Park & Landscape Services Division also provides landscape maintenance services for all public infrastructure, including roadways and public buildings,the Municipal Center, the Oceanfront resort area, Town Center, and school sites. In addition this division operates the athletic facilities and provides youth and adult athletic programming. The Office of Performance and Accountability (OPA) leads the City's comprehensive performance management program. Grounded in national best-practices, this program aims to improve processes, optimize service delivery, increase accountability supported by data, and provide greater transparency about goals and corresponding efforts — a trackable and reportable journey, coordinated across the City's departments. As a trusted resource driving progress and results, OPA helps the City efficiently manage operations, evaluate performance, and identify areas for improvement. OPA also stewards the City's Focused Action Plan translating City Council's vision and goals into an actionable strategy that guides the City's focus,work and resource alignment. The Department of Planning and Community Development provides for safe and orderly development within the City and provides policy support to the City Council regarding transportation,land use planning, zoning, and environmental resource protectio he department consists of five divisions, Director's Office, Planning Administration, Permits and ectio s, Zoning, and Development Services Center. Within the Director's Office is Long-Range Planni ng, ich consists of Comprehensive,Area and Transportation Planning. This division also serves as the City's liaison with Hampton Roads Transit and the Hampton Roads Transportation Planning Organization, provides support to Commissioners and City Council liaisons to the Transportation District Commission of Hampton Roads and participates in long- range strategic planning for regional public transportation. The Planning Administration division provides staff support to the Planning Commission, the City Council on Planning items, Wetlands Board, Chesapeake Bay Preservation Area Boar:l, Historic Preservation Commission and Historical Review Board. The Zoning Administration division ad ninisters the City's Zoning Ordinance by reviewing applications for compliance with the ordinance, provides staff support to the Board of Zoning Appeals, performs field inspections for Zoning Ordinance compliance, and manages the City's Short Term Rental process and enforcement. The Development Services Center reviews subdivision plans,site plans and land management plans to ensure engineering compliance with ordinances, standards, specifications, and City Council requirements as well as state stormwater regulatory compliance.The Development Services Center division also provides surety administration for private development through the City.The Permits and Inspections division administers the Virginia Uniform Statewide Building Code and associated laws and ordinances by issuing permits for, and performing inspections of all building, electrical, mechanical and plumbing construction in the City. This division also administers the Department of Environmental Quality Stormwater and Erosion and Sediment Control regulations as applicable to private development and franchise utilities. The Police Department is composed of four major units:Administration,Support,Operations,and Investigative Divisions. The department operates through four precincts located throughout the City. In addition,the department has a variety of specialty tactical units,including S.W.A.T.,crisis negotiators,K-9 unit,dive team,marine patrol,aviation unit,bomb squad,warrant and fugitive unit,motorcycle unit,traffic safety unit,mounted patrol,and motor carrier safety unit,to support department wide operations. The Department of Public Libraries provides residents of all ages with equitable access to information,resources,technology,and programs to help them achieve personal and professional goals and highest quality of life. Services are provided at ten branches across the city,through dedicated community outreach visits,and online. Locations include a 95,000 square-foot Central Library,a 125,000 square-foot 31 Joint Use Library operated in partnership with Tidewater Community College, seven area libraries and a public law library. The Department of Public Libraries provides residents with access to public meeting spaces; expert research assistance, workforce and small business development; thousands of free educational programs; a diverse, comprehensive collection of print and digital resources and unique items to borrow,like board games, surfboards,robots,telescopes and more;technologies including public WiFi, 3-D printers, computers with printing, faxing, internet, Microsoft Office and other standard applications; and dedicated accessible resources and services for residents with visual,physical,and reading disabilities. Library services are also delivered outside of the branches, with a dedicated staff delivering high-quality programs, materials and experiences to preschools, childcare centers, K-12 schools, senior living centers and other community venues, reaching residents who may otherwise be unable to visit the library. The Department of Public Libraries also houses a records management division that provides state-mandated recordkeeping for all City of Virginia Beach departments,agencies,public schools and the judicial system, ensuring all government documents are properly maintained and protected in compliance with federal,state and local records retention requirements. The Department of Public Utilities provides water and sanitar ewer services to City residents. As of June 2025, the department has installed and continues to maintain more than 3,167 miles of water and sanitary sewer lines as well as operating and maintaining 414 sanitary sewer pumping stations, ten water pumping stations (including Lake Gaston and Stumpy 'ake), eleven water storage facilities with 25 million gallons of water capacity,and 8,817 fire hydrant e department coordinates the engineering and administration of the development of raw water su s for he City and",oversees the City's water conservation programs. The Department of Public Works serves the residents, visitors, and businesses of the City of Virginia Beach by providing total life cycle management of public infrastructure, assets and key essential services.The department is comprised of eight groups,each with a distance scope and area of responsibility: The Public Works Director's Office. and Business Center provide overall direction, strategic planning, and centralized oversight and management including support for administrative, financial budgetary and human resources functions, informatiooechnology services and support, data analysis and metric development, development and maintenance of standards, and maintaining the department's accreditation through the American Public Works Association. The Public Works Engineering,Group provides a variety of services including the planning,design and construction of City infrastructure including beach replenishments, roadways, stormwater infrastructure,sidewalks, streetscapes,and parks/recreation amenities.Additionally,the group administers four of the City's Capital Improvement Programs (CIPs): Coastal, Stormwater Utility, Roadways, and Flood Protection.The Engineering Group is also responsible for maintaining the City's Municipal Separate Storm Sewer System(MS4)Permit. The Public Works Facilities Group is responsible for the life cycle of the City owned facilities including strategic facility master planning, programming, and space management, professional architectural and engineering design and project management services; custodial services, maintenance, repair, and rehabilitation of facility assets by professionals of eight trades; and the monitoring of energy usage, energy efficiency and conservation efforts, and utility billing. They also administer the City's Buildings and Assets CIP. The Public Works Fleet Management Group manages the full life cycle of all City owned or licensed and unlicensed motor vehicles and on/off-road equipment including the white fleet,public safety, heavy/construction, marine, or aviation equipment, and small engines/generator. The vehicle and equipment life cycle includes acquisition, maintenance, repair, replacement, and disposal. Public Works Fleet Management also manages the City's fuel resources, fuel facilities and storage tanks; operate three satellite service locations;provides a 24-hour wrecker/tow service and manages the Motor Pool rental fleet. 32 The Public Works Operations Group is responsible for maintaining the constructed public infrastructure located within the public rights of way. Staff receive,record,investigate,and resolve reports of deficiencies that require maintenance, repair, and restoration. Asset management methods are used to determine necessary maintenance cycles, identify required engineering needs, and develop solutions to support the life cycle of the public infrastructure. They also provide support for numerous special events annually and works closely with Emergency Management, state, and federal agencies during emergency events(response,recovery,and reimbursement). The Public Works Parking Management Group is responsible for the administration, operation, maintenance, and revenue collection for 13,300 on-street metered parking and off-street parking spaces located in municipal parking lots and garages at the Oceanfront, Croatan, Sandbridge, Little Island Park and Town Center as well as the Residential Parking Permit Program at the Oceanfront. They are an Accredited Parking Organization(APO)as awarded by the Internation Parking&Mobility Institute. The Public Works Real Estate Group is responsible for land acquisition for all City agencies (including the City's Base Realignment and Closure (BRAG) program and all City infrastructure improvement projects),handling resident requests for encroachments onto City property and Rights of Way, easements,unauthorized encroachments,and sale of excess City property. The Public Works Waste Management Group provides reliable and environmentally friendly solutions for the management of household waste and recycling for the residents of Virginia Beach which includes weekly residential refuse and yard debris collection, biweekly collection of recyclables on-request collection of household bulky items and yard debris container rentals.They also operate the City's Landfill & Resource Recovery Center and West Neck Recycling Center. A member of Waste Management also services as the Staff Liaison for the VB Clean Community Commission.The Director of Public Works and Waste Management Administrator serve as liaisons with Southeastern Public Service Authority, which is the agency responsible for the regional waste disposal program. The Office of Volunteer Resources seeks to maximize the full potential of the City's volunteers by promoting awareness of opportunities.fostering effective volunteer resource management,documenting the scope and impact of volunteer engagement,and celebrating the contributions and spirit of volunteerism in Virginia Beach. Cyber Security—Protection of Citv Information Technology The use of electronic systems and information technologies are essential to conducting City operations and delivering services.The City strives to use best practices and has developed cyber security policies and procedures and uses various technologies to protect its data and related information technology infrastructure, prevent,respond to,and minimize impacts of cyber-attacks. Those policies and procedures are based on the National Institute of Standards and Technology's Cyber Security Framework 2.0, which conforms to regulatory requirements involving Health Insurance Portability and Accountability,Payment Card Industry Security Standards,Virginia Government Data Collection and Dissemination Practices Act, Virginia HI3 2178 Controls for Electronic Systems, and America's Water Infrastructure Act of 2018. The City continually modernizes its information technology infrastructure and operations. The City has implemented a multi-data center hybrid cloud strategy utilizing software-defined data centers,public cloud platforms and the Software as a Service(SaaS)delivery model to strengthen business resilience. The City's cybersecurity team has migrated from a managed security operations center to an in-house combined network and security operations program.This allows the City to more closely control its response to network and cybersecurity events providing for a faster detection and response time as well as providing proactive monitoring for network and systems issues.The platform being utilized for this program provides a significant leap forward 33 in both technology and efficiency utilizing artificial intelligence to perform threat detection, automated response,threat intelligence automation and correlation along with agentic capabilities. The City's cybersecurity team was recently restructured to allow for a security operations division and a governance,risk and compliance division. This will allow for the expansion of the City's third party risk program as well as increasing the capacity to perform internal IT control and compliance auditing. As part of the governance, risk and compliance activities the City has implemented and is piloting both insider risk and artificial intelligence technical controls to allow for the detection and prevention of improper data usage along with improper data sharing. Annual audits are conducted by the State, City and third parties of various IT systems including financial, bank payment cards, criminal justice records, and health/medical records. Third party testing is performed on various City information technology systems to ensure the security of the City's electronic systems. The city is currently undergoing a full scale cybersecurity test to identify any control, detection and response gaps. Annual Information Technology security awareness training is provided to and required for all City staff members. Along with requiring annual training the City also conducts automated phishing training utilizing artificial intelligence to assess user skill and present increasingly difficult and relevant training emails similar in nature to what threat actors utilize. To ensure that the City's incident response plan is exercised and that incident responders are familiar with response procedures the Cybersecurity Team has partnered with the City's Emergency Management Team to include cybersecurity in their response procedures and exercise activities. The City has also developed an internal tabletop exercise cadence to test both business continuity and cybersecurity. The City has historically maintained reserve funds and a liquidity position that provide the ability to respond to potential attacks. In addition, the City maintains a cyber liability insurance policy. Despite the City's cybersecurity policies and procedures designed to protect its data and information technology infrastructure,no assurance is given that the City's security measures will prevent cyber-attacks, nor can any assurance be given that any cyber-attacks, if successful, will not have a material impact on City operations. Economic and Demographic Factors'' Various time periods may be reflected in this section because of the variability in the timing of publication and availability of data from the various data sources. Population Based on the April 2020 census conducted by the U.S. Census Bureau,the population of the City of Virginia Beach was 459,470. This census confirmed Virginia Beach as the most populous city in the Commonwealth. As of July 1, 2024,the University of Virginia/Weldon Cooper Center for Public Service estimated the City's population at 452,965. The following table presents population figures for selected years. 34 POPULATION AND RATE OF CHANGE VIRGINIA BEACH AND THE UNITED STATES SELECTED YEARS Year Virainia Beach Rate of Change United States Rate of Change 1960 85,200 N/A 179,323,175 N/A 1970 172,106 102.00% 203,302,031 13.37% 1980 262,199 52.35 226,542,199 11.43 1990 393,089 49.92 248,709,873 9.79 2000 425,257 8.18 281,424,602 13.15 2010 437,994 3.00 309,338,421 9.92 2020 459,470 4.90 331,534,662 7.18 2024 452,965 (1.42) 340,110,988 2.59 Source:U.S.Census Bureau(1960-2023,U.S.2024 as of July 1,2024);Univers4ofinia/Weldon Cooper Center for Public Service(Virginia Beach as of July 1,2024). [Remainder ofpa,e intentionally left hlankJ 35 FIVE MOST POPULOUS CITIES IN VIRGINIA Citv 2023 Population 2024 Population Virginia Beach 453,605 452,965 Chesapeake 252,478 253,261 Norfolk 238,112 245,406 Richmond 229,035 233,039 Newport News 182,268 182,621 Source:University of Virginia/Weldon Cooper Center for Public Service,population as of July 1,2023 and July 1,2024. Income Based on the latest available data, presented below are tables on median household income, distribution of household income, per capita income, total personal income and median household disposable income. Median household income is defined as the income of the household in the middle of all household incomes when sorted from lowest to highest. Per capita income is total personal income divided by the area's residential population. Total personal income is a, easurement of the area's total income from all sources. Disposable income is a measurement of after-tax me. MEDIAN HOUSEHOLD INCOME Virginia Commonwealth United Year Beach of Virginia States 2015 $67,281 $66,262 $55,775 2016 71,1 17 68,114 57,617 2017 72,586 71,535 60,336 2018 77.059 72,577 61,937 2019 79.054 76,456 65,712 2020 78,136 76,398 64,994 202 I%L 81,634 80,963 69,717 2022 8 -, 5 85,873 74,755 2023 ,141 89,931 77,719 2024 4,579 92,090 81,604 Source:Census Bureau's 2013-2024 American Community Survey 1-year estimates. DISTRIBUTION OF HOUSEHOLD INCOME 2024 Virginia Beach Virginia United States $100,000+ 47.2% 46.6% 41.2% $75,000-$99,999 13.1 12.4 12.6 $50,000-$74,999 17.4 14.7 15.6 $25,000-$49,999 12.9 14.3 16.2 Under$24,999 9.4 12.1 14.4 Source:Census Bureau's 2024 American Community Survey 1-year. PER CAPITA PERSONAL INCOME 36 1990 2000 2010 2020 2023 Virginia Beach $21,744 $32,358 $44,787 $59,413 $72,091 Chesapeake 19,091 28,320 42,229 53,172 62,736 Norfolk 16,918 25,289 34,346 42,136 51,434 Newport News 17,310 23,447 34,718 43,629 50,764 Commonwealth of Virginia 20,840 32,631 45,443 61,403 73,841 United States 19,619 30,551 40,557 59,123 69,810 Source:U.S.Department of Commerce,Bureau of Economic Analysis. The City's 2023 per capita personal income ranks 19th among 105 Virginia localities for which the Bureau of Economic Analysis computes income. Virginia Beach's 2023 per capita personal income is 103.3%of the United States' per capita personal income. TOTAL PERSONAL INCOME(In Millions) 1990 2000 2 2020 2023 Virginia Beach $8,601 $ 13,814 9,664 $27,311 $32,704 Commonwealth of - Virginia 129,562 231,870 36: 78 530,352 643,579 Virginia Beach as a percent of Commonwealth 6.6% 6.0% 5.4% 5.1% 5.1% Source:U.S.Department of Commerce,Bureau of lconomic Analysis. The following table reflects median household effective buying income for the City, the Virginia Beach Metropolitan Statistical Area (-' ✓JSA"), the Commonwealth and the United States for the last ten calendar years. MEDIAN HOUSEHOLD DISPOSABLE INCOME Virginia Beach Commonwealth Year Virginia Beach MSA of Virginia United States 2015 $50,662 $44,440 $51,301 $43,530 2016 53,007 48,857 52,331 44,652 2017 53,353 49,118 52,759 46,430 2018 54,628 50,527 54,134 48,296 2019 57,800 52,457 56,744 50,311 2020 60,426 52,765 57,487 51,505 2021 N/A N/A N/A N/A 2022 N/A N/A N/A N/A 2023 66,559 59,470 64,007 58,809 2024 67,886 61,639 70,014 63,562 Source:Esri Community Analyst Online/Esri Disposable Income Profile(2015-2020,2023,2024).Historical data for 2021 and 2022 was not available from Esri. 37 Housing and Construction The information in the following tables is presented to illustrate various housing characteristics for the City. Selected data regarding the distribution of all dwelling units is as follows: DWELLING UNITS BY TYPE` %of 2025 2024 Units 2025 Units Units by Tyne Single Family 99,952 99,632 53.2% Multi-family Complex 40,138 41,093 21.9 Townhouse 19,742 19,755 10.6 Low Rise Condominium 22,156 22,266 11.9 Duplex 1,264 1,256 0.7 High Rise Condo/Co-op 3,098 3,098 1.7 Total 127,103 100.0% Source:City Real Estate Assessor,Annual Reports FY 2024-25 and FY 2025-26. *Data is as of January 1 of each year.Does not include Military Combined t4f Building continues but at lower volume and value from 2023 to S4-tThe volume of building activity increased year-to-date January through October 2025 comparedhe same period in 2024; however,the value of building activity declined.The following table presents a further historical breakdown of residential and commercial building permits(including new buildings,additions and alterations). NUMBER OF SELECTED BUILDING PCRMITS ISSUED AND VALUEt'x2> Ot^-er Calendar Building Total Total Estimated Year Residential(',�) Commercial( Permits(3) Number Value(') 2014 3,892 1.268 2,647 7,807 $510,451,038 2015 3,940 1,582 2,829 8,351 493,363,784 2016 4,423 1,282 3,433 9,138 462,894,210 2017 4,229 2.744 3,833 10,806 728,773,482 2018 4,069 1,195 2,850 8,114 588,041,285 2019 4,425 1.1530 401 6,356 430,773,708 2020 5,554 1,121 397 7,072 618,446,315 2021 6,139 1,279 280 7,698 147,164,610 2022 6,090 1,415 214 7,719 207,350,240 2023 4,954 1,227 383 6,564 348,559,805 2024 4,833 1,111 445 6,389 302,216,177 2025 4,176 1,146 298 5,620 153,708,252 through October Source:City Department of Planning and Community Development,Division of Permits and Inspections. Represents building permits only(new buildings, additions and alterations). Does not include demolition permits or trade permits,e.g.,electrical,plumbing,gas,mechanical and other types of permits.Value of the construction is provided by the permit applicant. P) One residential building permit does not necessarily equal one residential unit;in many instances one permit is for multiple residential units. 0) Other permits could include roof,siding or asbestos.Excludes demolition permits. 38 The following table presents annual (January 1 st through December 31 s) new construction including additions and renovations as reported by the City Real Estate Assessor. The total value of new construction in the City for 2024 was $578,323,600, which reflects an increase of$137,854,300 or 31.3% compared with 2023 at $440,469,300. New construction was primarily residential totaling $385,964,200 (66.7%) with $192,359,400 (33.3%) being commercial construction. Of the new residential construction, 955 were multi-family/apartment units totaling$196,304,200. For the third quarter of 2025,the tax base continued to expand with the value of new construction of$87,621,900, which represents an increased growth of 94.8%compared with the third quarter of 2024($44,985,400). New construction was primarily commercial,totaling$33,663,600(38.4%). NEW CONSTRUCTION:NUMBER OF UNITS AND ESTIMATED VALUE(1) Residential Construction(2) Commercial Construction(') Calendar Number of Residential Estimated Number of Estimated Total Estimated Year Units Addition Value Permits Value Value 2014 1,459 1,185 $304,596,500 61 $135,254,600 $439,851,100 2015 1,027 1,118 265,430,800 51 82,816,300 348,247,100 2016 1,651 1,088 405,082,000 71 lipb 131,266,700 536,348,700 2017 1,094 1,303 352,152,600 62 103,946,100 459,098,700 2018 1,443 1,013 380,341,600 107 73,996,600 454,338,200 2019 1,109 1,123 307,907,200 78 163,344,300 471,251,500 2020 1,233 1,047 358,512,500 32 145,234,100 503,746,600 2021 732 1,090 288,691,100 51 84,450,200 373,141,300 2022 431 1,060 218,803,100 23 65,564,000 284,367,100 2023 985 1,080 343,505,600 37 96,963,700 440,469,300 2024 1,221 712 385,964,200 30 192,359,400 578,323,600 2025* 601 N/A 92,954,300 28 99,057,300 192,011,600 Source:Office of Real Estate Assessor—Annual Peport and Quarterly New Construction *Through September 30,2025. N/A—information not available t1> Building/structures only(excludes land). .. (1) Residential includes single family,townhou�.es,duplexes,condominium units,apartment units/multi-family and residential additions. (3) Represents general commercial,hotel.industrial,and office,including additions. [Remainder of page intentionally left blank] 39 Employment Employers in the City, excluding military, provided jobs for 175,164 persons through the first quarter of calendar year 2025 (latest data available). The following table presents the number of establishments,employment,and quarterly gross wages for the first quarter of calendar year 2025. CITY OF VIRGINIA BEACH NUMBER OF ESTABLISHMENTS,EMPLOYMENT AND QUARTERLY GROSS WAGES QUARTER ENDED March 31,2025 (NON-MILITARY) Average Average Weekly Emp. Wages Number of For Quarterly Per Industry Group Establishments Quarter ross Wa es Employee Private Services 8,230 489 296,708,788 $ 1,115 Wholesale and Retail Trade 1,744 , 51 0,679,355 876 Construction 1,215 9,187 1 84,462 1,428 Financial,Insurance and Real Estate 1,555 10, 255,335,044 1,826 Manufacturing 311 5 125,786,833 1,452 Transportation and Warehousing 0 37,715,291 980 Information 2, _ 41,610,697 1,448 Agriculture,Forestry,Fishing and Mining 60 498,656 639 Total Private* 13,51 145,944 $2,208,919,126 $ 1,164 Public State Government 1,547 $19,489,899 $ 969 Local Government 55 20,691 306,763,359 1,140 Federal Government 52 6,982 152,150,290 1.676 Total Public 145 29,220 $ 478,403,548 $ 1,259 TOTAL 175.1. 44 2,687,322,674 1180 Source: Virginia Employment Co n, Economic Information Services Division, Quarterly Census of Employment and Wages Report(QCEW). Base upon most current and available information. Immaterial amounts have been suppressed in certain industry sub-categories,which are included in the total amounts. [Remainder of page intentionally left blank] 40 The following table is a breakdown of employment by sector in the City. EMPLOYMENT BY SECTOR AS A PERCENTAGE OF TOTAL QUARTER ENDED March 31,2025 Services 51.7% Government* 16.68 Wholesale and Retail Trade 14.07 Financial,Insurance and Real Estate Construction 6.14 Construction 5.24 Manufacturing 3.81 Transportation and Warehousing 1.69 Information 1.26 Agriculture,Forestry,Fishing and Mining 0.03 Total 100.0% Source:Virginia Employment Commission,Economic Information Services Division. *Excludes active-duty military personnel stationed at bases located in the City. As illustrated in the table below,the unemployment rate for the City has been lower than the rates for the Virginia Beach MSA,the Commonwealth and the United States. ANNUAL AVERAGE UNEMPLOYMENT RATES 2018 2019 2020 2021 2022 2023 2024 2025(l) Virginia Beach 2.9% 2.7% 6.5% 3.7% 2.7% 2.7% 2.8% 3.3% Virginia Beach 3.3 3.1 7.4 4.4 3.0 2.9 3.1 3.7 MSA(1) Commonwealth 3.0 2.8 6.5 3.8 2.7 2.7 2.9 3.5 United States 3.9 3.7 8.1 5.4 3.7 3.6 4.0 4.3 Source:U.S.Department of Labor.Bureau of Labor Statistics (n MSA includes the Virginia Cities of Chesapeake,Hampton,Newport News,Norfolk,Poquoson,Portsmouth,Suffolk,Virginia Beach and Williamsburg, and the Virginia Counties of Gloucester, Isle of Wight, James City, Mathews and York. Also includes Currituck County,and Gates County,North Carolina. (2) Through September 2025. Business and Industry The business community in Virginia Beach is comprised of a diverse collection of industries, including national and international corporate headquarters, high-powered and technologically advanced manufacturers,billion-dollar defense contractors,and locally owned small businesses.Two hundred foreign companies representing 27 countries operate in Virginia Beach. The City has multiple business districts including Airport Industrial Park, Corporate Landing Business Park, Oceana area business parks, YesOceana, Pembroke/Town Center, Princess Anne Commons/Innovation Park, and eight Opportunity Zones.Industry sectors that are pivotal to the growth of the local economy include advanced manufacturing, life sciences, defense, information technology, cybersecurity, maritime and logistics, renewable energy, office/retail, small business and entrepreneurship. To expand the tax base and address City Council's strategy to grow economic opportunity, the City's Department of Economic Development has prioritized promoting corporate parks, particularly Corporate Landing and Innovation Park. In FY 20245 growth 41 continued in each of the City's adopted target business sectors, including several announcements by innovative new businesses as well as small businesses,an important part of our economy. Virginia Beach Development Authority The City of Virginia Beach Development Authority(VBDA)is a legally separate component unit, of the City of Virginia Beach established by the Virginia General Assembly in 1964,VBDA facilitates the expansion of the tax base by incentivizing through a variety of programs aimed at recruiting, expanding, enhancing existing businesses and facilitating job creation.Eleven commissioners are appointed by the City Council to govern VBDA. The VBDA owns Corporate Landing Business Park, Innovation Park, Social Services facility, Virginia Beach National Golf Course, 9' Street Parking Garage; 31s' Street Parking Garage,Town Center Parking Garage,Virginia Beach Amphitheater and The Dome at Atlantic Park. Development Incentives -Assisting in these business development efforts, the City has various economic development incentives in addition to grants and tax cre 't incentives available from the Commonwealth of Virginia (Commonwealth Opportunity Fund, mia Jobs Investment Program, corporate income tax credits, and tax exemptions for manufacturAR and Port of Virginia (various tax credits and Economic&Infrastructure Development Grant Pro A�Wr-Nk • Economic Development Investment Program (EDIP) provides a locally funded discretionary incentive program that promotes business development and expansion to qualifying companies with their growth needs in Virginia Beach.Since the inception of EDIP in 1994,through October 14, 2025 the City and the VBDA have awarded 345 EDIP grants totaling $73.9 million, which was intended to generate roughly $2.8 billion in private investment and create and retain 46,866 jobs. For FY 2025, a total of$2,084,082 in EDIP grants were approved for six projects,which are intended to leverage more than$83.2 million in private investment(ratio of$39.93 of private investment to$1 of public investment).These included the following: Born Primitive,Atlantic Diving Company, ViDarr,Neptune Shield, the Acoustical Sheetmetal Company,and Armada Hoffler. • Small Business Grant Program provides grants of up to $10,000 each to support and catalyze growth for small-, women-, minority-, veteran-, and disabled veteran-owned businesses in the city. This program began September 2024 and awarded grants totaling $146,520 to 17 local businesses from various districts enabling growth across multiple sectors, including technology, education, physical expansion and marketing. These investments will support the development of new products, services and infrastructure, creating lasting contributions to the local economy. • Business License Incentives available for businesses new to the City that cap the cost of business licenses to$50 annually for the first two years of operation. • The International Incubator offers Class-A office space and a shared conference room for companies establishing a location in the U.S.,with the intent to incentivize and support their presence in the City before establishing their own office or manufacturing facility in the City. This year, five companies located in the International Incubator in Virginia Beach: Nose Corporation of America (Japan); Sirius Analysis (UK), CASC (Northern Ireland), Gibb Groub(UK),and ValTech(UK). • YesOceana Program/APZ-1 (Accident Potential Zone) Incentives, developed to meet requirements of the Base Realignment and Closure Commission to protect and retain the Navy's East Coast master jet base,NAS Oceana,in Virginia Beach.This innovative program 42 consists of zoning ordinances and economic incentives to foster the conversion of nonconforming businesses in the Accident Potential Zone 1 (APZ-1) into conforming ones and relocating ones that cannot be converted to another part of Virginia Beach. Incentives include conditional-use permit waivers, rebates of business license taxes and development fees for compatible business development in the APZ-1 zone around NAS Oceana, and residential property acquisition in APZ-1. • Tax Exempt Industrial Revenue Bonds issued by the Virginia Beach Development Authority for businesses to acquire and construct industrial and commercial facilities. • Fagade Improvement Grant(FIG)program,which is a matching grant program to support small (fewer than 50 employees), locally owned, and operated businesses in the City of Virginia Beach that are current on their City licenses, fees and taxes. The FIG program's matching grant investments are up to$10,000 for exterior building, site, and outdoor dining improvements. Since the program's inception,VBDA has awarded$501,350 in grants to 74 small businesses, who in turn have invested$2.0 million in properties throughout the City. During FY 2025, FIG awarded 20 small businesses a total of$111,127 in grants which is estimated to incentivize$232,659 in private capital investment. Business Support-The HIVE, located in the Ce d Businessxct, provide support to small businesses,entrepreneurs, and innovators as follows. • The HIVE-Virginia Beach Business Resource Center is a pivotal supporter of new businesses, offering an array of resources such as training and mentorship programs in collaboration with various partner agencies. This past year marked a remarkable milestone for the HIVE Resource Center, now boasting over 1,360 clients and more than 100 business resource partners. Throughout the year, the HIVE conducted 296 training sessions and workshops, aiding over 1,043 existing Virginia Beach businesses and startups, and facilitating 150 businesses in securing their State SWaM business certifications. Additionally, 90 individuals successfully completed business plans through accelerator programs. In July 2023, the HIVE introduzed "Thrive at the HIVE," providing a no-cost workspace for two months(two business days a week)to V rgira Beach startups,home-based businesses,and military spouse entrepreneurs,aiming to nurture their growth and success. Over the past three years, Virginia Wesleyan University (VWU) and Virginia Beach Economic Development (VBED) have fored a strong partnership, yielding significant outcomes across diverse domains, particularly in talent development and workforce enhancement. This collaboration leverages resources from various channels, including The HIVE at Town Center, local businesses, and the Virginia Beach Talent Development Center, strategically positioned at VWU. Furthermore, the HIVE has entered into a memorandum of understanding with Maxbyte Technologies to establish a center of excellence (CoE) for Industry X.O (Smart Manufacturing) at the Virginia Beach workforce conference room located at the Advanced Technical and Career Education Center (ATC). This CoE will serve as an interactive platform to showcase smart and sustainable manufacturing use cases utilizing digital,robotics,automation, and immersive technologies. Initiatives to diversify the local economy beyond defense and tourism industries are on-going. Efforts continue to expand the tourism industry, including completion of a portion of the Atlantic Park project and Request for Proposal issued in 2025 for a proposed sports facility and parking on 19th Street near the Virginia Beach Sports Center. 43 Technology and Innovation-Virginia Beach is rapidly emerging as a leader in the cybersecurity, information technology, and advanced digital communications industries. The City is a growing international digital port and global internet hub for high-speed fiber-optic subsea telecommunication cables and associated data centers, which create higher-paid technology jobs as well as attract new businesses requiring high-speed data transmission. Subsea cables serve as the major carriers of the internet and are responsible for most of the world's digital traffic. Corporate Landing Business Park, a 325-acre, light industrial, research and Dominion Energy-certified data center park, is the city's hub for the digital port.Three cables constructed from 2017 to 2020 are in operation(MAREA,BRUSA,and DUNANT),and two additional cable projects (SA-Ex1 South Atlantic Express, and CONFLUENCE-1) have been announced and are in various stages of planning and development. One data center has been constructed (Globalinx)along with a cable landing operated by Telxius. Globalinx Cable Landing Station will expand its station and more than double the subsea cable capacity with the addition of four subsea cables to the three existing cables resulting in the most cables operated by a single company on the East Coast. Project completion is planned for March 31, 2025. Currently, the BRUSA, Dunant, and MAREA cables land at Virginia Beach, with the Confluence-1 cable set to join in 2026. An ex ple of business development in the Cybersecurity and Information Technology sector is Doma T ologies. Doma Technologies is headquartered in Virginia Beach and is a cloud-based documeNexon, software company. Doma moved and expanded their headquarters and in the process oftreated approximately 300 jobs and will invest$1,675,000 in Virginia Beach. For this awarded an EDIP grant of $167,000. Regional High-Speed Broadband - The Hampton Roads Regional Connectivity Ring project is an open-access telecommunications network to connect thregion to the transatlantic subsea fiber optic cables in Virginia Beach. The project is being developed by the Southside Network Authority (SNA) created in November 2018 and comprised of members of the City Councils,Chief Administrative Officers, and Chief Information Officers, who will also manage the usage and the utilization of the fiber ring. As planned, the project will be constructed in four phases and is currently in Phase 1 to construct 119-mile fiber ring to connect the five southside cities (Chesapeake, Norfolk, Portsmouth, Suffolk, and Virginia Beach)to the MAREA cable including the constructio 'of 40+miles of fiber in Virginia Beach.The Ring will connect to high-speed broadband networks through carrier-neutral"hotels"such as Gloabalinx,among others. The estimated cost for Phase 1 is between$23 and$28 million. Virginia Beach funded its share of the cost using $8.3 mil'on in American Rescue Plan Act (ARPA) funds. Groundbreaking for Phase 1 occurred in April 202 nstruction is approximately 80% complete with full completion of the project targeted for March 31,2 26. Future project phases will extend the network further in the Hampton Roads region to provide broadband service to the 17 local jurisdictions and 1.7 million people. This project has multiple benefits to the City and: gion. This fiber ring could potentially serve Internet Service Providers in areas where the providers lack a presence. The City of Virginia Beach's Regional Connectivity Ring (RCR) was awarded the "Community Broadband Project of the Year" in June 2023 by the National Association of Telecommunications Office, recognizing it among innovative projects ingovernment, business and local communities across the nation. Advanced Manufacturing—Given its central location on the East Coast of the United States and its access to an extensive multi-modal transportation network and the Port of Virginia offering fifty-foot channels and advanced port terminals, Virginia Beach offers a logistical advantage to manufacturers looking to transport their goods both domestically and internationally. During FY 2025 Acoustical Sheetmetal Company, announced a $45.8 million investment in a new 250,000-square-foot facility— its third expansion since 2019. This project will bring 350 new jobs to the city and further solidify Virginia Beach as a destination for advanced manufacturing and innovation. Office and Professional Services/Retail — The Virginia Beach area is home to hundreds of corporations and national and international retailers. With Virginia Beach being a thriving hub for 44 businesses, there has been a natural influx in companies providing different professional services across many areas like talent requisition or geotechnical services. The City offers a multitude of shopping experiences with its eleven retail districts. Highlighted amongst these is the ever-expanding Town Center which features nearly one million square feet of mixed-use retail space, mostly occupied by higher-end retailers. Maritime and Logistics—With its close proximity to The Port of Virginia,the deepest harbor on the East Coast,Virginia Beach has naturally gained a heavy concentration of businesses involved in freight transportation arrangement, marine cargo handling, logistics consulting services, port and harbor operations, coastal and deep-sea freight transportation, supply chain management and warehousing and storage. Amazon built two new facilities in Virginia Beach on a combined 237 acres with one building being a multi-story 650,000 square-foot robotics fulfillment center staffed with roughly 700 employees and the other being a"last mile"200,000 square-foot delivery station staffed with 200 employees and contracted with six local delivery companies that employe 400 staff. Operations began in late 2024 for the delivery station and in November 2025 for the fulfillment center. This project i olved private capital investment of more than $383 million. For this project, Council approved $22. lion in Public Facility Revenue Bonds to be issued for construction of a two-lane road, stormwate other infrastructure improvements between Dam Neck Road and London Bridge Boulevard. Renewable Energy - Virginia Beach and Hampton Roads are positioned to become one of the main renewable energy hubs in the nation. The City, alongside State and Regional stakeholders,has been working diligently to help support the growth and development of this new industry by attracting businesses to the local supply chain, working with existing local companies to diversify their offerings and enter the supply chain, and partnering with educational institutions to offe orkforce training. Dominion Energy's Coastal Virginia Offshore Wind (CVOW), consists of 176 turbines constructed 27 miles directly off the City's shores, generating enough clean, renewable energy to power up to 660,000 homes. Project construction began in 2023, was 60% complete by late July 2025 with final completion scheduled for the end of 2026. Once in operation, CVOW could create 1,100 direct and indirect jobs annually in Hampton Roads and generate almost$6 mil4on in revenues for,ldcal governments. At the end of calendar-N, a Dominion Energy subsidiary acquired 40,000-acres of the 120,000- acre Kitty Hawk North Wind offshore w nd lease from Avangrid Renewables LLC, located 36-miles from the shore of Virginia Beach. This acreage was initially included with the Kitty Hawk Wind project with an estimated cost of$8 billion to construct;up to 180 wind turbine generators 27-miles off the cost of Corolla, North Carolina,and 41-miles from Rudee Inlet in Virginia Beach,which at full build-out,had the potential to yield 3.5 GW of electricity to-power over 1 million homes. Under Dominion Energy ownership, this portion of the Kitty Hawk project has been re-branded CVOW-South and if fully constructed, would connect to Dominion Energy's electrical transmission grid and could generate 800 megawatts of electricity serving 200,000 homes and businesses. Avangrid's remaining 80,000-acre wind lease would be rebranded Kitty Hawk South with potential to deliver up to 2.4 gigawatts of power. In August 2024,Dominion Energy acquired a third offshore wind lease of 176,506-acres from the Bureau of Energy Management located about 35 miles off the mouth of the Chesapeake Bay adjacent to its COVW project off the coast of Virginia Beach, which has the potential of generating an additional 4 ggawatts of electricity to power up to 1.4 million homes. Atlantic Park-The VBDA negotiated a development agreement with Venture Realty Group for a $335 million mixed-use,multi-venue year-round entertainment complex on the former Dome site,a 10.35- acre site over three blocks between 18th and 20th Streets at the oceanfront. The development agreement was approved by the VBDA and City Council on November 2019. The complex includes 106,000 square feet of retail and restaurant space, 10,000 square feet of office space,300-units of multi-family housing,an approximately 4.2-acre Wavegarden Surf Park including an approximately 2.68-acre surf lagoon and 20 45 surf bungalow units to be owned by Venture Realty Group. Two parking garages providing 1,475 spaces, a 3,500-seat indoor & 1,500 capacity outdoor entertainment and concert venue, and over a half-mile of rehabilitated public streets,utilities and sidewalks will be owned by the City,.The development is estimated to have a total cost exceeding $350 million. The project involves private financing of$210 million and a City contribution of approximately $154.7 million for site acquisition, parking, offsite infrastructure including undergrounding duct banks, traffic signals, pedestrian crossings, streetscapes, and an entertainment venue, "The Dome", which officially opened on May 4, 2025. The venue also offers over 100,000 sq.ft.of mixed-use retail space,including restaurants,shops,and experiential attractions including the Wave Park which opened in Summer 2025. The City's contribution is funded by the City's Tourism Investment Program Fund. The development agreement includes a performance grant of a maximum of$5 million annually over 20 years from the project-generated tax revenues. See Atlantic Park Community Development Authority below. Tax Increment Financing and Development Districts The City was one of the first localities in the Commonwealth to use Tax Increment Financing ("TIF")districts as a means of supporting capital projects,usually involving one or more private or public partners. Tax Increment Financing is authorized under Sections 58.1 3245 through 58.1 3245.5 of the Code of Virginia, originally enacted in 1988. The City established three TIF districts to fund its share of three investment partnerships: the Lynnhaven Mall Expansion. the Sandbridge Beach Restoration Program and the Town Center of Virginia Beach. The City's funding commitment to each of the projects is paid through incremental tax revenues generated by each project in the related TIF district. In FY 2012,fourteen years after it was created, the Lynnhaven Mall TIF district was dissolved after the City's commitment to the developer was met. In FY 2021 the Sandbridge TIF was dissolved, therefore the City will have one remaining TIF in place located at Town Center. The City of incurred debt for any of the TIF projects onds. ; un through the issuance of Tax Increment Financing B Y 2025,the City continues to collect and apply the incremental revenue of the one remaining TIF District in accordance with the project development agreement. Sandbridge Beach Restoration Program: An important real estate and aesthetic asset to the City, this area has long battled sand erosion. The City has continued to pursue a multi front strategy of funding sand replenishment, including seeking federal funds, using local funds, and establishing a Special Service District(SSD). The Sandbridge SSD was established in November 1994. The SSD involves an additional real estate rate of one-cent per $100 of assessed value and retains $1 per room-night of the total $2 hotel flat tax as well as 6.5% of the total 9.5% hotel tax collected within the district. The SSD supports sand replenishment, beach access improvements, and a dedicated three-person beach maintenance crew. The preliminary FY 2026 assessed value as of January 2025 of the Sandbridge SSD is$2 billion. The Town Center of Virginia Beach: The southern part of the Pembroke area of the City was established as a Tax Increment Financing district by ordinance approved by City Council on November 23, 1999. The district is called Central Business District South.According to the Real Estate Assessor's Annual Report for Fiscal Year 2025/2026,the FY 1998 base year assessment for the Central Business District South TIF was $151.8 million. For FY 2026,the preliminary assessment as of January 2025 is $1.2 billion. The 33-acre core area features "Class A" high rise office space, upscale retail space, hotels, restaurants and upscale residential apartments and condominiums, all within a "village green" park setting. The Town Center is supported by free public parking in several enclosed parking garages set within the center. From the business activity occurring in Town Center,the City benefits from increased taxes including personal property, retail sales, admissions, restaurant, utility, business property, and license totaling over $11.2 million in CY 2024, a 1% decrease over CY 2023 ($11.3 million) based on the latest data available from the Virginia Beach Commissioner of Revenue's Office.As of June 30,2025,$145.3 million in incremental real estate and hotel tax revenues have been collected in the Central Business District South TIF Special 46 Revenue Fund, which includes $8.0 million in hotel taxes, which were generated within the core area of Town Center. Certain public infrastructure for the Town Center project was financed by the City through bonds issued by the Authority.The tax increment revenues and special taxes are not pledged to the payment of the Authority bonds. See the section entitled "Virginia Beach Development Authority Appropriation Based Debt"for further discussion on Authority bonds issued for the benefit of the City. Atlantic Park Community Development Authority: The City Council adopted an ordinance on September 7, 2021,to establish the Atlantic Park Community Development Authority(the"CDA"). The CDA was established pursuant to the Virginia Water and Waste Authorities Act, Chapter 51, Title 15.2, Code of Virginia of 1950. The boundary of the CDA development district is the approximately 13-acre site near the oceanfront between 181 and 201 Streets known historically as the "Dome Site." The eleven members of the CDA Board are the then-current members of the City Council. The purpose of the CDA was to issue bonds for certain public infrastructure(Parking Facilities)wherein such bonds have an annual debt service not-to-exceed$5,000,000 per year. The September 7,2021,ordinance was amended on April 5, 2022, to include additional obligations of the CDA for developmeri or redevelopment of additional offsite public infrastructure improvements. The additional obligations c€l sisted of a note in the amount of $17,700,000 payable to the City of Virginia Beach. The Board of the CDA held its organizational meeting on October 18, 2022. At this meeting, the Board appointed officers, bylaws, authorized the issuance of bonds for the Atlantic Park Project, and authorized the execution of a promissory note. The payment for the bonds and additional obligations of the CDA are the following sources: an additional levy of$0.25 per $100 of assessed value within the CDA district;the assignment of certain sales taxes that were authorized to be returned to the City (2019 Acts of Assembly c. 793); certain meals and admissions taxes generated within the CDA district; and a supplemental admissions fee upon participatory sports within the CDA district. The CDA bonds are further secured by a special assessment upon the property within the CDA district,and in the event the special assessments are determined to be legally unenforceable,the City may further levy supplemental special property tax. The Administrator,MuniCap,performs an annual analysis to determine if a special property tax«i I need to be levied in the upcoming fiscal year to meet annual debt service obligations. Any CDA Obligations or any other financing arrangements entered into by the CDA will be indebtedness of the CDA, will not be a debt or other obligation of the City and will not constitute a pledge of the faith and credit of the City. The CDA issued bonds (Series 2023 Bonds) in the amount of $53,365,000 on March 30, 2023. This amount included interest during the construction period ($7,154,361.09) and a funding of a debt reserve fund($4,749,687.50). Principal payments for the Series 2023 Bonds begin August 1, 2026. The preliminary real estate assessment for the Atlantic Park CDA for FY 2026 as of January 2025 was $45.0 million, which includes the additional $.25 levy. Construction of the Parking Facilities is complete and ownership has transferred to VBDA. [Remaintler of page intentionally left blank] 47 CITY OF VIRGINIA BEACH MAJOR PRIVATE EMPLOYERS AS OF MARCH 31,2025 Employer Industry 1,000 and over employees Sentara Healthcare Hospitals Stihl Machinery Manufacturing Wal-Mart General Merchandise Retailers GEICO,Government Employees Insurance Insurance Carriers and Related Activities Food Lion Food and Beverage Stores 500 to 999 employees Lifenet Ambulatory Health Care Services Harris Teeter Supermarket Food and Beverage Stores Regent University Educational Services Anthem Insurance Carriers and Related Activities United American Security,LLC Administrative and Support Services Hall Automotive LLC Motor Vehicle and Parts Dealer Westminster Canterbury Nursing and Residential Care Facilities Target Corp General Merchandise Retailer Kroger Food and Beverage Stores Professional Hospitality Administrative and Support Services Century Concrete Llc Specialty Trade Contractors Christian Broadcasting Network Broadcasting Content Providers Architectural Graphics Inc. Miscellaneous Manufacturing Acoustical Sheetmetal Co Fabricated Metal Product Manufacturing Checkered Flag Motor Vehicle and Parts Dealers The Home Depot Building Material and Garden Equipment and Supplies Dealers McDonald's Food Services and Drinking Places U.P.S. Couriers and Messengers Catholic Diocese of Richmond Educational Services Integrity Staffing Services Administrative and Support Services 250 to 499 employees WaWa Gasoline Stations and Fuel Dealers Kinetix Staffing and Recruiting Administrative and Support Services Atlantic Dental Care Ambulatory Health Care Services Alion Science&Technology Corp Professional,Scientific,and Technical Services OnPoint Building Services Administrative and Support Services Starbucks Coffee Food Services and Drinking Places Petrochem Recovery Svc Construction of Buildings Wegmans Store#07 Food and Beverage Stores Securities Security Service USA Inc Administrative and Support Services Norfolk Cent YMCA Amusement,Gambling,and Recreation Industries Atlantic Shores Nursing and Residential Care Facilities Atlantic Diving Supply Inc. Merchant Wholesalers,Durable Goods Red Lobster&The Olive Garden Food Services and Drinking Places Administaff Administrative and Support Services Dragados Usa Inc Heavy and Civil Engineering Construction Hnh Virginia Inc. Nursing and Residential Care Facilities Security Forces,Inc. Administrative and Support Services Source:Virginia Employment Commission,Largest Employers for 2025 Ql. 48 Retail Sales The table presented below is a summary of the City's taxable retail sales from point of sales transactions; it does not include sales that are exempt from tax. Specifically exempt from the sales tax under Sections 58.1 602,and 58.1-609.1 through 58.1-609.10 of the Virginia Retail Sales and Use Tax Act are sales of alcoholic beverages in government stores, sales of certain motor vehicles, trailers and semitrailers,mobile homes,and travel trailers,and sales of certain motor vehicle fuels. The figures do not include the significant amount of non-taxable sales on military bases in the City. Since the retail sales data does not include sales transactions subject to the use tax, such as some internet and catalog sales,taxable retail sales attributable to Virginia Beach may be under stated. TAXABLE RETAIL SALES Calendar Year Taxable Retail Sales 2014 $5,15 ",858,692 2015 5,374,616,764 2016 5,530,431,346 2017 5,597,203.814 2018 5,658,176,716 2019 ,763,591,049 2020 5,656,494,141 2021 6,671,233,263 2022 6,971,231,371 2023 ,101,906,110 2024 7,217,627,591 Source: Virginia Department of Taxation A ivers of Vir 'a Weldon Cooper Center for Public Service.Latest available data through 2024. Tourism Tourism is an important industr} in Virginia Beach and a vital component in the City's economy producing revenues from visitor spendin!;that supports the provision of City services and capital projects. Examples of projects include the Virginia Beach Convention Center,Virginia Beach Sports Center,Atlantic Park Entertainment Venue and Parking, 17th Street Regional Stormwater Facility, and Pacific Avenue improvements. According to a study of the economic impact of visitor spending to Virginia Beach conducted in October 2025 for the City by Tourism Economics (an Oxford Economics Company), there were 14.3 million visitors to the City in 2024 compared with 14.1 million in 2023 and 13.6 million in 2022; these included international and domestic day and overnight visitors. Based on its econometrically-based visitor volume model using actual Virginia Beach tourism data,the study estimated direct visitor spending in Virginia Beach totaled$2.6 billion in 2024 compared with$2.5 billion in 2023,and$2.4 billion in 2022. Visitor spending includes spending in these industries: lodging including second home spending (i.e., upkeep costs for seasonal second homes used for recreation),food and beverage,retail,recreation,and local transportation.Furthermore,visitor spending had an estimated total economic impact on Virginia Beach's economy of$3.9 billion in 2024 (comprised of$2.6 billion in direct spending, with food and beverage at $1.1 billion). Visitor spending contributed $340.8 million in state and local tax revenues, effectively reducing the annual tax burden by$1,832 for each household in Virginia Beach. The study indicated that visitor spending directly supported 34,076 total jobs(direct,indirect,and induced). The Tourism industry's performance,as indicated by hotel market data,improved during CY 2025 compared with CY 2024 through October.According to hotel market data from January to October 2025 49 provided to the Virginia Tourism Corporation by Smith Travel Research Inc., a division of CoStar Group Inc. that provides market data on the U.S. hospitality industry, citywide hotel performance has improved with increased occupancy, room revenues, and average daily rates charged to visitors, however, room supply and room demand have decreased. Specifically, this data showed occupancy increased by 0.1% from 63.7%to 63.8%, average daily rate paid per room increased by 2.4% from $167.28 to $171.29 and revenue per available room increased by 2.5%from $106.61 to $109.22. Also, the City gauges the health of its tourism industry by monitoring tourism-related revenues it collects. Based on official city hotel tax receipts, estimated sales revenue for all lodging in the City,which includes hotels,vacation home rentals, other short-term rentals resulting from online rental platforms, and campgrounds, totaled $580.1 million for FY 2025, a 0.3%decrease over FY 2024($581.1 million). The hotel product in the City continues to be refreshed and expanded. According to Smith Travel Research data, as of July 2025 the available hotel room inventory in the City consisted of 11,692 hotel rooms located in 105 properties,reflecting an increase of 58(0.5%)hotel rooms compared with July 2024 (11,634 hotel rooms in 104 properties); this inventory will fluctuate kroughout the year due to hotel renovations, new construction, and seasonal and weather closures. TWe are multiple hotels in various stages of development including Tempo by Hilton($30 million esti d cost, 163-rooms, 176,299 square- feet)planned for Pembroke Square with anticipated opening in 2 Hampton Inn and Suites Town Center on the corner of Columbus Street and Market Street($19 million estimated cost, 12-story, 120-room); and Homewood Suites by Hilton at the Oceanfront(142-rooms with parking garage located between 31st and 33rd Streets on Atlantic Avenue anticipated to open in 2026). Sports Tourism and Special Events —-These events are held throughout the year to promote Virginia Beach as a year-round destination.Over the years sporting events and special events/festivals have energized the tourism industry by attracting visitors to the City. In FY 2025 there were 261 special events held in the City of which 111 were held in the resort area and 150 in other areas of the City. Various sports facilities(city owned and privately owned)that host sporting events(including local,regional and national events) are located in the City including but not limited to Virginia Beach Sports Center, Virginia Beach Convention Center, Hampton Roads Soccer Complex, Virginia Beach oceanfront, Princess Anne Athletic Complex, USA Regional Field Hockey Training Center, Virginia Beach Field House, Virginia Beach Sportsplex,Pickleball Virginia Beach(formerly Owl Creek Tennis Center),Iceland Family Skating Center, Outdoor 50-meter Pool at Princess Anne Family YMCA, and Virginia Beach Tennis and Country Club. Sports tourism generated 141,603 hotel room-nights in FY 2024-25 and the Virginia Beach Sports Center was responsible for 57,906 or 39%. According to the City's Convention and Visitors Bureau, during FY 2025, a total of 155 sporting events (with estimated attendance of 694,582)were held in the City. A few examples of annual and new, sporting and special events held include the Last Night on the Town in Town Center in its I Ith year, East Coast Surfing Championship in its 63rd season, Virginia Beach Neptune Festival in its 51 st season, Yuengling Shamrock Marathon in its 53rd season, ISSA (International Senior Softball Association)Senior Softball in its 18th season,North American Sand Soccer Championships in its 31st season, NCAA (National Collegiate Athletic Association) Division I Indoor Track and Field Championships (three championship events), Bulls & Barrels Beach Rodeo, the National Gymnastics Association National Championships & Educational Summit, the American Pickleball Tour, the A-10 Men's and Women's Indoor Track&Field Championships. Tourism,special and sporting events and convention generate tax revenue for the City,particularly in the form of hotel room and meal taxes, which are impacted by and reliant on tourism. The table below provides a history of total/citywide hotel room and meal tax receipts,which have increased by an average of approximately 5.3%per year since 2016. Total tax receipts FY 2020 decreased by$13.2 million or 12% from FY 2019 due to the impact of the COVID-19 pandemic and related mitigation measures. 50 HOTEL ROOM AND MEAL TAX AND RESTAURANT TAX RECEIPTS FISCAL YEARS 2016 THROUGH 2O24' Fiscal Year Hotel Meal Total Tax Receipts 2016 $30,595,133 $63,437,485 $ 94,032,618 2017 32,805,597 65,207,699 98,013,296 2018 35,493,796 66,264,685 101,758,481 2019 37,127,745 69,278,652 106,406,397 2020 32,682,467 60,561,741 93,244,208 2021 36,821,128 65,572,967 102,394,095 2022 48,186,507 85,941,096 134,127,603 2023 51,768,589 92,035,336 143,803,925 2024 52,060,030 94,093,300 146,153,330 2025 52,166,674 97,418,174 150,032,013 July 2025—October 2025 30,250,566 39,265,671 69,516,237 Source:City Department of Finance. M . 1 Hotel tax is 8%and includes an additional$2 per night flat tax to fund the Tourism Investment and Advertising Programs or improvements at Sandbridge.The hotel lodging tax is applied to all lodging in the City,which includes hotels,vacation home rentals,other short-term rentals resulting from online rental platforms,and campgrounds. Meal tax is 5.5%. Tax receipts also include penalty and interest on delinquent collections. e'¢ Military «� The military has a significant impact on the economy of the City and the region.According to Old Dominion University/Dragas Center for Economic Analysis and Policy/Strome College of Business, 2024 State of the Region Report—Hampton Roads (ODU SOR),direct spending in Hampton Roads in 2023 by the U.S. Department of Defense is projected to exceed $28 billion accounting for almost 40% of overall economic activity and may increase to $29.8 billion by FY2029. In conjunction with defense spending, Department of Defense defense-contract spending has a significant impact on the economy of the Commonwealth, region and City. The City is home to various defense contracting companies including; SAIC,Lockheed Martin Corporation,ADS Tactical Inc.,Q.E.D. Systems,Inc.,Valkyrie Enterprises,LLC,Allied Technology Group Inc.,Global Technical Systems(GTS), and Northrop Grumman. Based on the latest analysis by the U.S. Department of Defense, Office of Local Defense Community Cooperation report"Defense Spending by State Fiscal Year 2024," defense contract spending totaled$53.7 billion in FFY 2024 for Virginia,an increase of 17.3%compared with$45.8 billion in FFY 2023.For FFY 2024,defense contract spending totaled$5.2 billion for Virginia Beach,an increase of 66.9%compared with$3.1 billion in FFY 2023. Military bases located within the City include Naval Station — Oceana and Oceana Naval Air Station Dam Neck Annex (NAS Oceana), Joint Expeditionary Base Little Creek-Fort Story (JEB), and Camp Pendleton/State Military Reservation (SMR). According to the U.S. Department of Defense there were 29,492 Department of Defense personnel working in Virginia Beach including active duty, civilian, National Guard and Reserve with payroll of$2.2 billion compared with 27,685 personnel in FY 2022 with payroll of$1.9 billion. NAS Oceana is the United States Navy's East Coast Master Jet Base located on 5,916 acres with more than seven miles of runway,250 total aircraft and buildings valued at more than$800 million in plant and replacement value. The base supports the flight operation requirements of aircraft assigned to Commander, Strike Fighter Wing Atlantic (CSFWL), Commander, Fleet Logistics Support Wing (CFLSW), Commander, Tactical Support Wing (CTSW), and other joint and interagency aircraft. NAS 51 Oceana is home to 17 aviation squadrons, 16 of which consist of F/A-18 Super Hornets that deploy on aircraft carriers into combat,and one fleet logistics squadron consisting of the C-40A Clipper(737 civilian equivalent)used for Navy Unique Fleet Essential Air-lift missions. The base, including Dam Neck Annex and Naval Auxiliary Landing Field Fentress, has approximately 10,500 active Navy personnel, about 10,000 family members and 4,500 civilian personnel,making NAS Oceana the second largest employer in Virginia Beach,after Joint Expeditionary Base Little Creek-Fort Story. NAS Oceana Dam Neck Annex's primary mission is to provide training in the operation and employment of combat direction and control systems. The base is located on 1,100 acres and includes 3.2 miles of coastline along the Atlantic Ocean. Dam Neck Annex is home to 20 operational, training and support commands, and provides the highest quality, most up-to-date training in intelligence, synthetic warfare, aviation maintenance, administration and management, survival, evasion, resistance and escape training and conventional weapons training. Base personnel train 20,000 students annually in over 210 courses of instruction. JEB Little Creek is the primary East Coast base supporting ove eas contingency operations with more than 14,400 personnel and 130 resident commands,including 3 flag officers. JEB Little Creek is the result of a merger in October 1, 2009 under one command of th0oriner Little Creek Naval Amphibious Base(Department of the Navy)and Fort Story(Department of the Army).This merger was the result of the National Defense Authorization Act for Fiscal Year 2002 that authorized the Department of Defense to pursue one Base Alignment and Closure (BRAG) round in 2005, which included the concept of"joint basing."The former Little Creek Naval Amphibious Base is the Navy's east coast major operating base for the expeditionary forces of the U.S.Atlantic Fleet comprised of 3,947 acres of land including 61 piers and 7.6 miles of beachfront and 126 training sites. JEB Little Creek is transitioning from a traditional U.S. Navy amphibious mission focused facility to more of a special operations training and deployment location for the U.S. Atlantic Fleet. The former Fort Story was established as a coast artillery post in 1916. It is home to the 1 lth Transportation Battalion and provides an advanced joint training venue utilized by Navy, Marine Corps and Army.The joint base was recognized as an irreplaceable"National Joint Training Asset," offering joint logistics over the shore training and a nearly full mission profile for special operations training. - State Military Reservation (SM R) is a Virginia Army National Guard facility located just south of the main resort area of Virginia Beach. The facility was originally laid out on approximately 400 acres in 1911 with construction beginning in 1912.The Camp Pendleton/State Military Reservation Historic District was listed on the Virginia Landmarks Register in June 2004 and on the National Register of Historic Places in September 2005 as the City's first and only,to date,state and national register historic districts. Today, SMR occupies approximately 300 acres with an additional 27 acres leased from the federal government. The Guard currently leases a number of the buildings,particularly the WWII barracks,to various military and civilian agencies.Camp Pendleton serves as a vital training installation for the Virginia National Guard, for personnel from all four branches of the military, both active duty and reserve, local and state first responders (e.g., Virginia Beach Police Department, Virginia Beach Fire Department, Virginia Fire Marshals Academy, and Virginia State Police), and a variety of community organizations. The 203rd REDHORSE Flight unit is a construction and repair unit for the Virginia Air National Guard that is headquartered at SMR.In addition to the 203rd RED HORSE,a number of other units are stationed at SMR and train there regularly,including the 329th Regional Support Group;529th Combat Sustainment Support Battalion;A Troop and C Troop,2nd Battalion, 183rd Cavalry Regiment; I I73rd Transportation Company; D Company (-), 429th Brigade Support Battalion; 576th Engineer Detachment; Recruit Sustainment Program 9; and the Virginia Defense Force. The Virginia Guard Commonwealth ChalleNGe Youth Academy is also located on SMR. 52 The City of Virginia Beach remains committed to the Oceana Land Use and Conformity Program that it developed and implemented in response to the 2005 Base Realignment and Closure round to reduce encroachment surrounding NAS Oceana and reduce or eliminate the land uses deemed incompatible with the mission of NAS Oceana. The program has included a multi-pronged effort including creation of zoning/land-use laws to control development surrounding NAS Oceana; the acquisition of property containing non-conforming land uses from willing sellers within the highest accident potential zones,the acquisition of property within the flight path between NAS Oceana and NALF Fentress; and provision of economic incentives for compatible land-uses,such as relocation assistance and fee and tax rebates. From FY 2007 through FY 2014,the City and the Commonwealth of Virginia contributed a combined total of $15 million per year, split 50/50, to this program through a capital project funded annually in the City's Capital Improvement Program. In FY 2015, the sum was reduced to a combined total of$7.8 million. Thereafter,the state funding ceased,but the City has continued to fund the program,allocating$2.5 million in FY 2016,$1 million each in FY 2017 and FY 2018,$737,602 in FY 2019 and$1 million in FY 2020.In the FY 2026/FY2031 CIP, funding to date totals $8.6 million for the Oceana Land Unse and Conformity Program in capital project 100082 "Oceana & ITA Conformity & Acquisition 11" with funding over the six-year CIP totaling$13.6M. The program has been funded from the sales and leases of acquired parcels, and through a partnership with the Navy for the sale of easements over acquired properties. The resulting program has rolled back encroachment and serves as a model program nationally for any locality grappling with encroachment and uses deemed incompatible with military installations. In total,over$131 million has been spent through FY 2025 to acquire non-conforming homes and businesses from willing sellers. Since inception of the program, nearly 1,800 incompatible uses have been permanently eliminated from the Clear Zones and Accident Potential Zones surrounding NAS Oceana. The City has also acquired substantial acreage in the Interfacility Traffic Area and Rural AICUZ Area.Further, through FY 2025 the Virginia Beach Development Authority has awarded $3.2 million in Economic Development Investment Program (EDIP) grants to 44 businesses for projects under the program, leveraging more than$62.4 million in planned new and retained private investment.In the FY 2026/FY2031 CIP, funding to date totals $1.9 million for the economic incentive program supporting Oceana Land Use and Conformity Program in Capital Program in capital project 100014"APZ-1 Economic Incentives". Environmental Resiliency-Flood Protection Protection against flooding due to more frequent and intense storm events, sea level rise and land subsidence has become a critical issue in the Hampton Roads region and for the City. As a coastal community, the City is proactively assessing its vulnerability and developing strategies. The City is implementing policy and engineering measures to increase its resiliency to reduce the impacts of severe storm events along with tidal and storm surge flooding. The City's approach to resiliency incorporates a Citywide Stormwater Master Plan, the Sea Level Wise Adaptation Strategy Plan, and Water Quality Regulations.These initiatives are collectively referred to the"Flood Protection Program"and are described on the City's website. The Flood Protection Program is a long-term plan to address recurrent flooding in the City through investments in drainage improvements,tide gates,pump stations,and flood barriers. Consistent with the Flood Protection Program, the Citywide Stormwater Master Plan utilizes advanced computer modeling techniques to create detailed models for all 15 drainage basins in the three primary watersheds in the City, namely the Chesapeake Bay,Atlantic Ocean, and Southern Rivers. Apart from assessing the storage volume and conveyance capacity, these models are also used to evaluate the stormwater infrastructure's performance, identify areas prone to flooding, analyze potential flood protection measures, and examine stormwater management facilities. The Citywide Stormwater Master Plan is designed to address rainfall and stormwater drainage issues and works in conjunction with the Sea Level Wise Adaptation Strategy Plan,which focuses on coastal hazards and future conditions. The City's Sea Level Wise Adaptation Strategy outlines a proactive,long-term approach to enable the City to adapt to 53 changing environmental conditions and flood risks. This plan is the culmination of five years of work that included input from technical experts, community participants, and regional partners to gain a full understanding of flood risk and anticipated changes that will occur over time. The plan outlines policy and engineering strategies to reduce short and long-term impacts and creates city-wide and watershed-level action plans to guide strategy implementation. Furthermore, the plan aims to improve Virginia Beach's overall flood resilience by using natural mitigation strategies to lessen the magnitude and extent of flooding events through open space nature-based features in addition to engineered solutions to prevent the passage of floodwater into inhabited areas.On June 16,2020,City Council adopted and incorporated the Sea Level Wise Adaptation Strategy report into the City's Comprehensive Plan. On July 21,2022,the City signed a Federal Cost Share agreement with the US Army Corps of Engineers to complete a Coastal Storm Risk Management Study to investigate the City's risk associated with storm surge flooding, wave runup, and erosion. This Federal study takes information from the City's Sea Level Wise Adaptation Strategy to formulate plans to address the coastal storm risk problems through structural,nonstructural,and natural and nature-based features. The study will consider sea level change and the past, current, and future coastal storm risk management and resilience-planning initiatives and projects implemented by the City of Virginia Beach,USACE,and other federal,state,and local agencies.The study is expected to be completed in 2028. Since 2014, the City has conducted numerous scientific studies to determine the appropriate design standards for future projects. The City's Public Works Design Standards Manual contains more stringent stormwater requirements including Modeling, Increased ign Rainfall Depths, Starting Tailwater elevations, Groundwater Baseflow and Sea Level Rise. ese design standards were adopted by City Council on June 16,2020,and updated in March 2022 f nco ion into the City Code. Revised Funding Strategy s In FY 2020,the City developed a funding strategy using a combination of property tax increases (2.5-cents) and Stormwater Utility Equivalent Residential 'Unit ("Stormwater ERU") based fee rate increases(from 45.8-cents per day to 49.3-cents per day)to fund an aggressive storm water operations and maintenance program and Stormwater CIP. Tax and fee increases were approved by City Council in the Adopted FY 2020 Budget; however, the annual Stormwater ERU rate increases were postponed by City Council action on November 16, 2021 until July 1 2028 as part of commitments made related to passage in November 2021 General Election of the Flood Protection Program Bond Referendum described below. General Obligation Bonds for Flood Protection To build the necessary additional projects identified in the Stormwater CIP at that time,on July 13, 2021, City Council approved the Flood Protection Program Bond Referendum question to be included on the ballot for the November 2, 2021, General Election(the "Bond Referendum"). The Bond Referendum sought to gain voter approval to issue $567.5 million in General Obligation Bonds for the design and construction of twenty-one stormwater flood mitigation project within ten years (shown in the following map). These projects mark the initial phase of the Flood Protection Program. According to the election data results from the Virginia Department of Elections, 72.7%of ballots cast(110,834)voted"yes"while 27.3%(41,669)voted no 54 SOME OF THE PROJECTS DISPLAYED IN THE FOLLOWING MAP THAT PRE-DATE THE FLOOD PROTECTION PROGRAM BOND REFERENDUM ARE BEING CONSTRUCTED WITH PROCEEDS OF THE STORMWATER UTILITY FUND. Flood Protection Program—Phase 1 Bond Referendum Projects and Selected Pre-Bond Referendum Stormwater Utility Flood Control Projects Chubb lake „_,tev �� Pym StationSOcRF+R-^--�' Ytitk CutSr, �..." -��EistemShbr•Oshf P e. PumpSgtwu Pancima P,rmpitatien LAS Plo,"wo ttawe Outfall Phase 1 Projects Lake ln�ad Dredptg � - Fasfem Snare Ohre S#vate Lyrtnha+rm Or 'n" irH/ t ty ASM Ditto Pump Station Chords Po Tboruu 4rit k.. Gste Sm Or w Cap*Nery Conal y /// ftnir}I#ascat trnwwd:atR3 j Sactlonf ifS iL Lrrmv"ceom } 24*Street tulvart (iriabt4�l Tprer Wetland Park Pump Staten t Central Resort 211 Streets BAK hmt b fivodpiaSn Reftm-fon rest colwiol al �`dU1fcV ` -^� Q� /—Cent rat Rtmrt Oistdct ( `t. Pima lord \ --/ Onina;a lmprovamRrCs I.kf aftmtnte w+' F` i that 131 "t.• ,( Ci"`"'-`StaishNeilhbarhaod WwmdwrWood}TideGatt.'-- µv: ( anmtnts PurtyrStxii*it6 Flood RHt Berms Prinais Arnie Nis(north London lir4o Wei WimdwWoods Thant Creek) j We Gate,"Station and farriers takeTrashmato,IM;ovemenh X/ i South Nitta TndjPresedential aw Bar Creek Storn!eriter Park Old rogeRotd1Red Don Road " Club tMause Road Ora,iraSelrnprosament} + The takes vir(lin ? _ _.+ar t1a'�md Rd.Grte the tafxs `E 1>,5 SwU Landon lrkt Gsek ` • ,,.' `.rrflwd/mkrs Channels a Gate � SamejNesrOndtt ,�,r��,,r t NReraaftlQltfrnprWenfeMt W est Ned Gtek ltid;e 1. l StomrrmttGram,lnfra;trottun r" lea+- * ti MSash7amcePr�et jd t fs.k�aa N`l htss,rnt 4 ei=f+ 'e //—Pdr.Saftrry Road r . ln•prorerrarh Source: City of Virginia Beach ; l Sete Stormwater Engineering Center rk' Y�"IY3°bm sl g fd$Y7ti�4� I 1W15 1 s 11.141 P4tPa YS�GINtr>: 3 In FY 2023,the stand-alone Flood Protection CIP section was created,and it combined the twenty- one projects from the Bond Referendum into seven master projects to include companion projects that were already underway in the Stormwater CIP. With the establishment of a stand-alone Flood Protection CIP section,the Stormwater Utility Fund and the Stormwater CIP primarily focus on water quality projects as well as maintenance of existing infrastructure. On November 16,2021,following the passage of the Bond Referendum, City Council adopted an ordinance to freeze the Stormwater ERU fee at the current rate of 49.3¢ daily until FY 2029.In support of the Bond Referendum,City Council dedicated 4.1¢ in real estate taxes in the FY 2023 Adopted Budget to the Flood Protection Referendum Fund to pay debt service on the portion of the City's General Obligation 55 Bonds used to fund the Flood Protection CIP. As a result of the Bond Referendum, the $567.5 million general obligation bond authority will need to be issued within ten years. The Stormwater ERU continues to fund water quality,operations and maintenance projects,as well as pre-referendum debt service on flood protection projects funded with Bonds under the Agreement of Trust.In addition,the City's General Fund has another 2.5¢ real estate dedication to support staffing needs for the overall program that includes the Stormwater CIP and Flood Protection CIP together with related operations and maintenance. To augment the local resources provided for the maintenance of the stormwater system,in the fall of 2021,City Council appropriated over$44.9 million from the ARPA two Stormwater CIP projects,Lake Management and Neighborhood Rehabilitation; these funds are required to be spent by 2026 and will advance the efforts of existing city programs on recapturing stormwater capacity in detention ponds and a proactive approach of cleaning, inspecting, repairing, and restoring system capacity of existing neighborhood drainage piping systems. This infusion of funding is nearly two and a half times more than stormwater maintenance projects receive in a typical year and will enhance maintenance for 17 lake dredging projects and approximately 60 miles of pipe cleaning for 21 neighborhoods. Based on a consultant's Stormwater Cost of Service Study conducted in 2024, which was completed and presented to City Council in December 2024,a stormwater ERU rate increase was recommended to adequately address the needs of the fund beyond FY 2025.In the FY 2026 Adopted Budget,City Council approved an increase of 8.9-cents per ERU per day totaling $0.582 cents per day for homeowners effective July 1, 2025. Revenues from this fee are used to support stormwater infrastructure, fund annual operating and capital needs,including the Stormwater Operating Center,and staff positions to support the ongoing maintenance of the Flood Protection Program. In addition, the increase will provide funds for a second closed-circuit television truck for pipe inspection,funds for vehicle replacement,debt service and capital projects. The FY 2026 Flood Protection CIP incrudes J2 active projects and programs with 21 of these projects supported by the Bond Referendurn. The total funding for these projects and programs is $773.7 million over the six-year CIP period, itARN appropriations to date. Due to the limitations of the Bond Referendum,there is only a small amount of additional funding available for the Flood Protection section in the FY 2026 CIP. It is important to note that Flood Protection projects are still affected by inflationary pressures. The City's Public Works Department is actively pursuing state and federal grant opportunities to lessen the financial burden of these projects on local taxpayers.As of the third quarter of 2025,the City has secured more than $63'`million in grant funding from various state and federal grant programs and has applied for an additional $44 million. These grants are vital for the program's success and will be utilized as effectively as possible. The current status of the 21 projects supported by the Bond Referendum in the Flood Protection CIP as of November 20,2025,is summarized below. Number of Activity Projects Design-Build Procurement 0 Preliminary Engineering 4 Under Design 14 Under Construction 3 Total Projects 21 Source: City of Virginia Beach,Departments of Public Works, Storm Water Engineering Center 56 Beach Nourishment Projects for Flood Protection The City has a strong commitment to maintain its beaches to reduce the risk of coastal flooding and resulting storm damage to public and private infrastructure. The City continues to use periodic beach nourishment projects to fortify its public beaches by maintaining their elevation and width. Like the majority of East Coast beaches, Virginia Beach experiences moderate beach erosion resulting from wind and wave action. Cost-effective periodic beach nourishment at Virginia Beach has been demonstrably successful in combating natural erosion and stabilizing the shoreline position. Beach nourishment is acknowledged as an important element in adaptation strategies to combat sea level rise. The City funds its beach nourishment program out of the General Fund and Sandbridge Special Services District Special Revenue Fund along with federal funding cost sharing with the U.S. Army Corps of Engineers, when available. Beaches on Atlantic Ocean • Resort Beach and North End — The latest renourishment occurred between January 2025 and April 2025 with 180,000 cubic yards of sand were added from dredged material from the Virginia Port Authority/USACE Atlantic Ocean Channel deepening project. Given the quality of the sane material not being beach quality, the replenishment was reduced from the originally planned project. That the originally planned beach replenishment was $20.2 million with the City share of $7.1 million and Federal share of$13.1 million. The next replenishment is planned for 2030. • Sandbridge Beach — Sandbridge Beach was last replenished in 2020 using the Sandbridge Tax Increment Financing District and Sandbridge Special Service District Funds. The $20.6 million project prevented more than $140 million in damage. The next renourishment cycle is being planned for late fall 2026 at an estimated cost of$33.8 million with the City share of$11.8 million and anticipated federal contribut'on of$22.2 million. • Croatan Beach - The City completed significant dune restoration work at Croatan Beach in December 2018,which was followed by a 50000-cubic yard beach nourishment that was included in the federal/USACE Rudee Inlet maintenance dredging performed in May 2022. Capital project 100142 Croatan Beach Restoration programs $1.7 million in the FY 2026-FY2031 Capital Improvement Program for future sand placement as needed. A placement of 130,000 cubic yards of sand occurred in November 2025 after the Resort Beach and North End replenishment was completed. Beaches on Chesapeake Bay The Bay beaches adjacent to the Lynnhaven Inlet (Cape Henry and Ocean Park Beaches) have been nourished multiple times using sand from the federal/USACE Lynnhaven Inlet maintenance dredging project.Bay Beaches Restoration provides funding for sand placement along Cape Henry and Ocean Park beaches that occurs from sources other than the Lynnhaven Inlet federal channel dredging project. • Cape Henry Beach - A truck haul placing approximately 70,000 cubic yards of sand from the City's Lynnhaven Dredged Material Management site was completed in July 2023. In the fall of 2024, 204,000 cubic yards of sand were placed on Cape Henry Beach from the Lynnhaven Inlet federal channel dredging project. A follow up truck haul to place 84,000 cubic yards of sand on Cape Henry Beach, east of the old Lynnhaven pier, is planned for December 2025. The truck- hauled sand will come from the Lynnhaven sand stockpile and the Maple Street sand stockpile site. 57 • Ocean Park Beach — This beach was improved to a higher and wider dimension with a major beach and dune restoration project completed July 2022 in partnership with the Virginia Port Authority making use of sand mined from their Norfolk Harbor and Channels Deepening project from the Thimble Shoal Channel. The City's cost for the Ocean Park restoration sand placement was$6.14 million to place 400,000 cubic yards of sand along 6,000 feet of shoreline.This was four times more sand than had ever been placed on Ocean Park Beach.Future renourishment of Ocean Park Beach will occur from dredging of the Lynnhaven Inlet Federal channel with the next replenishment planned for FY 2028. • Chesapeake Beach — This beach is the westernmost Bay beach. Its nourishment project was completed in May 2018 where over 430,000 cubic yards of sand were mined from a nearshore borrow site and placed on the beach.A project to continue maintenance of the restored Chesapeake Beach (project 100064) was fully funded at $8.5 million in the FY 2023 Capital Improvement Program. After the initial 2018 beach restoration, the first renourishment occurred in the fall of 2024,which placed 155,559 cubic yards of sand between Lee Avenue and Joint Expeditionary Base Little Creek at a contract cost of $2.02 million. This ct is scheduled for the second renourishment to start in FY 2027-28. Medical Facilities In the Hampton Roads region,the largest provider, Sentara''Healthcare,operates,seven acute-care hospitals in the region, including one of the best cardiac facilities in the world. Two of these hospitals are located within the City, Sentara Virginia Beach General and Sentara Princess Anne. It also has Sentara Independence, which is an emergency outpatient facility offering advanced imaging, laboratory services, cardiac diagnostic testing, sleep medicine, pulmonary and critical care medicine, and physical therapy. Sentara Virginia Beach General is a 273-bed acute-care facility, which specializes in heart, vascular, neuroscience, neurosurgery, orthopedics and spine care, cancer care, advanced imaging, and behavioral health. It is the region's only Level III Trauma Center; one of the region's accredited stroke centers; and home to the Sentara Heart Center. Sentara Princess Anne Hospital is a 174-bed acute care hospital offering many advanced clinical services. It specializes in orthopedic and spine care, heart, vascular, advanced imaging, gynecological, comprehensive breast care services, and family maternity with a state-of-the-art neonatal intensive care unit. It serves Southern Virginia Beach as well as neighboring Chesapeake and northeastern North Carolina communities. Sentara has partnered with Bon-Secours Virginia to provide a wider network of services to patients at Sentara Princess Anne Hospital. Other healthcare resources in the City include Virginia Beach Psychiatric Center,with 100 licensed beds; Children's Hospital of The Kings Daughters Health and Surgery Center providing various pediatric specialty outpatient services; LifeNet Health, a nonprofit-organ, procurement organization; Urology of Virginia, a Virginia Beach-based comprehensive urology care and treatment center providing general urology, reconstructive urology, women and men's services, urological oncology services, and support services including testing and physical therapy; and Steven A. Cohen Military Family Clinic at The Up Center providing mental health care to serve post 9/11 veterans and military families. The Virginia Department of Veterans Services completed building the Jones Cabacoy Veterans Care Center,a 128-bed 141,000 square-foot facility in the Princess Anne corridor of the City on a 25-acre site donated by the City adjacent to Nimmo Parkway (extended),West Neck, and N. Landing Roads, and opened in November 2023 to provide skilled nursing, Alzheimer's/memory care and short-term rehabilitation services. Agribusiness One-fifth of the City's total acreage is agriculture,forestry,open space,swamps,or marshland and of this total,over half is devoted purely to agricultural activities.Forty-four square miles of the City's 248 square miles of land consist of farmland and forestland. This acreage produces positive value for the City. 58 The Agribusiness sector of Virginia Beach's economy continues to grow and is one of the key industries for the City. In 2024(latest data available)Agriculture comprised 26,419 acres of farmland in production (versus 26,071 in 2023, 25,897 in 2022, and 26,407 in 2021) and over 193 farms and farm-related businesses. Since the inception of the Agricultural Reserve Program (ARP)through June 30, 2025, there were 11,129 acres of agricultural land enrolled in the ARP with total purchase price of$59.98 million thus preserving this land for farmland preservation.Enrolled ARP acreage includes the initial 10,998 acres that were approved by City Council in various ARP Installment Purchase Agreement Ordinances plus additional agricultural acreage reserved for future development as outlined in some ARP Installment Purchase Agreements. The agricultural business sector is diverse including production agriculture/agronomic crops (soybeans,corn, and wheat), fruits and vegetables(over 24 different locally grown products including the area's highly regarded strawberry crop), equine, livestock, and agritourism consisting of on-farm agricultural education and programs, pick your own operations, farm to table events, and special theme event programs. According to the latest available annual analysis by Virginia Cooperative Extension/Virginia Polytechnic Institute and Virginia State University, agriculture generated $178.6 million in economic impact to the City in 2024 compared with$182.5 ry illion in 2023, $190.9 million in 2022, and$170.9 million in 2021. The reduction in the economic impaof agricultural products in 2024 was due primarily to the reduced global market prices($2.6 million reduction)on the top three commodities of corn,wheat and soybeans that comprise over 80%of the acres in production, and reduced yields due to unfavorable weather conditions with sporadic rainfall.The City of Virginia Beach is home to one of the 11 Virginia Tech Agricultural Research and Extension Centers. The Hampton Roads Agricultural Research and Extension Center is located on 70 acres of land in the City conducting research and extension programs that benefit horticulture industry in Virginia.Current research areas include nursery production, landscape maintenance, pest management, small fruit production, and storm water and turf grass management. The natural attraction of the farm operations,green space,and the City's Farmers Market draws tour buses from outside the region, tourist excursions, farm educational tours. and children's agricultural educational program tours. The City has a year-round rmers market that serves the community with local goods and __ products as well as offering community . The Virginia Beach Farmers Market and agritourism had gross income of$15.9 million in 2024, an rease of 5.4% over 2023. Agriculture is expected to be a sustainable long-term viable economic engine for the City of Virginia Beach. Education Available within the City is a wide variety of educational facilities and programs,including 96 City public schools and centers comprised of public elementary(55),middle(13),high schools(11),centers(6), and specialized academies (1-0), private and parochial schools, and higher educational facilities. In terms of public enrollment, the City's public school system is the largest school division in the region, fourth largest city school system in the Commonwealth, 581 largest in the nation,and is one of eight divisions in the Virginia Beach— Chesapeake - Norfolk metropolitan statistical area. Except for two subjects in one school, the City's public school system is fully accredited. Since the 2015-16 school year, the graduation rate has equaled or exceeded the Commonwealth of Virginia rate. 59 PUBLIC EDUCATION FACILITIES/PROGRAMS' June 30,2025 55 Elementary Schools 13 Middle Schools 11 High Schools 1 Technical and Career Education Center 1 Advanced Technology Center 1 Green Run Collegiate which is a Public Charter School 1 Brickell Academy at Old Donation School2 1 Plaza Middle School Middle Years International Baccalaureate Program 1 Princess Anne High School International Baccalaureate Magnet Center 1 Bayside High School Health Sciences Academy 1 First Colonial High School Legal Studies Academy 1 Kempsville High School Entrepreneurship and Business Academy 1 Landstown High School Governor's STEM&Technology Academy 1 Salem High School Visual and Performing Arts Academy 1 Tallwood High School Global Studies and World Languages Academy 1 Ocean Lakes High School Math and Sci _, ce Academy � 1 Lynnhaven Middle School An Achievable Dream Academy 1 Adult Learning Center 1 Juvenile Detention Center 1 Renaissance Academy 1 Note that certain items reflect programs such as the various academies that are located within existing school facilities. 2 Formerly Old Donation Center and Kemps Landing Magnet. - Source:Virginia Beach City Public Sch, 00lsit Ifice of Facilities Services,Demographics&Planning. i..f Public Schools. The City's public schools' March 31 average daily membership(ADM)for 2025- 26 school year totaled 63,590, which was a decrease of 0.8%compared with the same period in 2024-25 (64,127). From school year 2023-24 onward, average daily membership includes K-12 and Early Childhood Special Education, Pre-Kindergarten, and Southeastern Cooperative Education Program students who use public-school facilities.Summarized below are the March 31 ADM and annual percentage change for the school year 2016-2017 to 2025-2026. PUBLIC SCHOOLS STUDENT POPULATION SCHOOL YEARS 2016-2017 TO 2025-2026 School Year Number of Students Percent Change 2016-17 67,152 (1.10) 2017-18 67,091 (0.09) 2018-19 66,593 (0.74) 2019-20 66,816 0.33 2020-21 63,452 (5.03) 2021-22 62,873 (0.91) 2022-23 63,390 0.82 2023-240> 64,460 - 2024-25 64,127 (0.52) 2025-26 63,590 (0.84) 60 Source: Virginia Beach City Public Schools, Office of Facilities Services, Demographics & Planning. (1) Prior to school year 2023-24 the ADM reflected K-12.From school year 2023-24 onward,the K-12 ADM was adjusted to add students enrolled in Early Childhood Special Education, Pre-Kindergarten, and Southeastern Cooperative Education Program students that use the public school facilities. Private and Parochial Schools. According to the Private School Review, an online private school resource, for the 2025-26 school year there are 66 private schools in the City of Virginia Beach. Approximately 8,291 students are enrolled in these schools. Higher Education Virginia Beach has multiple higher education facilities that provide a wide variety of degree and certificate programs to support the area's rapidly expanding private-sector IT core.Also,the area's higher education system and research facilities produce highly qualified candidates with skills specific to the bio and life sciences and maritime sectors. Virginia Beach's higher educational resources include the Old Dominion University/Norfolk State University-Virginia Beach 1ligher Education Center, Virginia Wesleyan University, Tidewater Community College, the Advanced Technology Center, and Regent University. Virginia Beach is also home to branch campuses of Advanced Technology Institute,Bryant& Stratton College,Centura College,ECPI University,South University,Southern Illinois University,Embry- Riddle Aeronautical University: Oceana, Southeastern University at WAVE Leadership College, University of Virginia Hampton Roads Center/School of Continuing and Professional Studies at Tidewater Community College,and Virginia Polytechnic Institute's Agricultural and Extension Center.Town Center area is the location for three additional branch campuses: The Art Institute of Virginia Beach, a branch of the Art Institute of Atlanta, Hampton University's The College of Virginia Beach, Old Dominion University/Institute of Data Science, anc_Strayer University. Tidewater Community College(TCC),is accredited by the Southern Association of Colleges and Schools Commission on Colleges (SA�SCOC) to award the associate degree. Tidewater Community College also may offer credentials such as certificates and diplomas at approved degree levels.TCC had an annual enrollment of 24,579 in School Year 2024-25 students over four main campuses and five regional centers, is a division of the Virginia Community College System ("VCCS") and the second largest full- time equivalent enrollment of the 23 colleges in the VCCS. Its Four campuses offer college-transfer and career and technical programs (AAS; AAA, Certificate (Career Technical)and CSC). The Virginia Beach campus is the College's largest campus on 115 acres with 13 buildings including the Advanced Technology Center, Joint-Use Library, Sciences Building, and the Regional Health Professions Center. The Virginia Beach campus had an enrollment in 2024-25 of approximately 15,516 students. TCC offers the first two years of university parallel instruction and over 50 programs in 9 career pathways.TCC is Hampton Road's largest provider of higher education and workforce development services and a resource for business and industry to gain technical employees, as well as expertise for training and retraining programs for current employees. TCC is a part of the Community College Workforce Cooperative (CCWC), a regional partnership,designed to meet the job training needs of the region's major industries and businesses.TCC's Regional Health Professions Center(RHPC)is located on the Virginia Beach Campus in a 65,000 square- foot,three story facility,which opened in 2011. It provides clinical learning in simulated medical settings including hospital, lab, paramedic and doctor's office environment. The 120,000 square-foot $43 million Joint Use Library,built by TCC and the City of Virginia Beach,opened in August 2013.The 89,000 square- foot Student Center opened in January 2014. It includes a Welcome & Information Center, Barnes and Noble bookstore, a fitness center, a gym, a study lounge and other services for students, staff and guests. TCC also hosts ODU's Institute for Learning in Retirement(ILR). 61 Virginia Wesleyan University is a four-year liberal arts private college located on 300 acres on the Virginia Beach/Norfolk boundary line. It was chartered in 1961 and founded by the United Methodist Church. Virginia Wesleyan University is accredited by the Southern Association of Colleges and Schools Commission on Colleges(SACSCOC)to award associate,baccalaureate,and masters degrees.It has a total enrollment in fall 2024-25 of approximately 5,750 students(1,670 undergraduates, 156 graduates). There are approximately 43 majors in the undergraduate program including popular majors of Business,Biology, Psychology,Criminal Justice,Communication,Earth&Environmental Science. Eight graduate programs are offered in Business Administration, Education, Arts, and Environmental Studies. Virginia Wesleyan has partnered with ed2go to offer career training programs for in-demand occupations, such as arts & design, business, computer applications, computer science, information technology, health and fitness, hospitality, languages,construction and trades, and more.According to the Virginia Wesleyan University Magazine (special edition winter 2024, Annual Report 2023-24), Virginia Wesleyan University and the Virginia Museum of Contemporary Art(Virginia MOCA)have entered into a historic partnership for the construction of a state-of-the-art facility to be built on the University's Virginia Beach campus that will replace Virginia MOCA's facility near the Virginia Beach oceanfront. ound-breaking occurred August 19,2024,with anticipated construction completion by January 2026 � opening in spring 2026. The new building, at over 30,000 square-feet, will offer larger galleries and serve as a cultural landmark for the region, a vibrant gathering place where people can experience,contemporary art in deeper and more interdisciplinary ways. The central location of the VWU campus makes Virginia MOCA even more accessible,allowing the museum to better connect with the cultural and educational fabric of the Hampton Roads area. Regent University, incorporated as CBN University, ,1977 and holds numerous accreditations from organizations including the Southern Association of Colleges and Schools Commission on Colleges (SACSCOC)and the Council for Higher Education Accreditation(CHEA).Specialty accreditations include American Bar Association (ABA), Council for Accreditation of Counseling and Related Education Programs (CACREP), American Psychological Association (APA), The Commission on Collegiate Nursing Education (CCNE), Computing Accreditation Commission of ABET (Accreditation Board for Engineering and Technology). Commission of the Council for the Accreditation of Educator Preparation (CAEP), Accreditation Council for Business Schools and Programs (ACBSP) and Association of Theological Schools(ATS).The University had its largest on-campus student body and its largest incoming freshman class in the Fall 2025. More than 14,000 students are expected to enroll at Regent throughout the 2025-26 academic year,both on campus and online.Regent offers more than 150 accredited areas of study. It awards bachelor's, master's, and doctoral degrees in ten fields including Arts & Communication, Business & Leadership, Divinity & Theology, Education, General Studies, Government& History, Law, Nursing&Healthcare,Psychology&Counseling,and Science, Technology,Engineering&Math. The Virginia Beach Higher Education Center opened in 1999 through a partnership of the City of Virginia Beach,Old Dominion University(ODU)and Norfolk State University(NSU). This partnership continues today among the City of Virginia Beach, Old Dominion University, Norfolk State University, and Tidewater Community College. The Center also hosts the Virginia Tidewater Consortium for Higher Education. ODU is accredited by the Southern Association of Colleges and Schools Commission on Colleges (SACSCOC) to award baccalaureate, masters, education specialist, and doctoral degrees. It is affiliated with 34 specialized programmatic accreditations, councils, or professional societies, which signifies the quality and rigor of its academic programs. The Higher Education Center serves as the home for Macon and Joan Brock Virginia Health Sciences Ellmer School of Nursing at ODU. The pre-licensure baccalaureate program and the Doctor of Nursing Practice Nurse Anesthesia program are offered on-site. RN-to-BSN,Master's and Doctor of Nursing Practice programs are offered on-site.RN-to-BSN,Master's and Doctor of Nursing Practice programs are offered online, but with some face-to-face training and academic functions offered on-site at scheduled times.NSU is accredited by the Southern Association of Colleges and Schools Commission on Colleges (SACSCOC)to award associate, baccalaureate, master's, 62 and doctorate degrees. The Higher Education Center is the location of the Center for Public Health Initiatives at NSU(CPHI)and the Associate Dean for Community Engagement and Outreach for the Joint School of Public Health at ODU and NSU. The Advanced Technology Center (ATC) is a special Commonwealth of Virginia state/city partnership of Tidewater Community College, Virginia Beach Public Schools, and the City of Virginia Beach that opened in 2002. The state provided$10 million and contributed the land. The City of Virginia Beach provided $12.5 million in funding. The ATC offers three strands of curriculum: Information Technology, and Computer Sciences, Digital Design & Marketing and Architecture, Engineering & Manufacturing. Through its partnership with the Virginia Beach Department of Economic Development, the ATC offers industry certified training for high school, college and continuing education students in areas that include, but are not limited to: training and development, high performance manufacturing, telecommunications, cyber security, web design, network administration and infrastructure, computer hardware and software development, renewable energy technologies, and naval architecture and ocean engineering. On May 19, 2021, the U.S Department of Transportation' Maritime Administration named TCC a Center of Excellence for Domestic Maritime Workforce Training. This training, along with the Virginia Beach Public School's Workforce Readiness Program, ensures that Virginia Beach students have the skills that employers are looking for in today's fast paced and tech savvy marketplace.ATC has a state- of-the-art theater for conferences, teleconferences, satellite adcasts, webcasts, meetings, and training sessions. mklqmlmh- IREMEh- 63 SECTION FOUR: CITY INDEBTEDNESS AND CAPITAL PLAN Limitations on Incurrence of Debt Pursuant to the Constitution of Virginia(the "Constitution") and the Public Finance Act of 1991, Chapter 26,Title 15.2,Code of Virginia of 1950,as amended,a city in Virginia is authorized to issue bonds and notes secured by a pledge of its full faith and credit and unlimited taxing power. The Constitution and the Public Finance Act of 1991 also limit the indebtedness which may be incurred by cities to ten percent of the assessed valuation of real estate subject to local taxation without to approval of the qualified voters of the City at referendum. As of June 30, 2025, the total assessed value of real property for the City was $83,645,270,401, which translates into a general obligation debt limit of$8,364,527,040.The City's governmental obligations subject to debt limitations as of June 30,2025,totaled$743,314,868 and represented 8.9%of this limit. The City Charter further limits the City's power to issue debt provides that no bonds or notes (other than refunding bonds, revenue anticipation notes, revenue b` ss. and other obligations excluded from the City's debt limit under Section 10(a)of Article VII of the Constitution)shall be issued until their issuance has been authorized by a majority of the qualified v, rs of the City voting in an election on the question. The City Charter further provides,however,that the City Council may authorize bonds or notes without an election in any calendar year in such amounts as shall!I a increase the total indebtedness of the City,as determined in the manner set forth in Section 10(a)of A",Wile VII of the Constitution,by more than $10,000,000 above the amount of such indebtedness at the benmg of such calendar year. For purposes of computing the annual limitation on the amount of bonds or other obligations that may be issued without an election, authorized and unissued bonds or other obligations which could have been issued without an election on December 31 in the year they were authorized may be issued in a subsequent year without affecting the annual limitation for such subsequent year. In addition, refunding bonds shall not be included for purposes of determining the amount of bonds or other obligations that may be issued without an election in any calendar year. Contractual obligations of the City other than bonds and notes are not included th_the annu imitations described herein. Debt Management Policies The City has developed a series of Debt Management Policies to provide a functional tool for debt management and capital planning. The policies reiterate the City's commitment to principles such as rapid principal retirement, maintaining sufficient working capital to avoid the use of short-term borrowing for operating purposes, and the use of self-supporting or revenue-supported debt where appropriate. The policies also establish the following not to exceed levels for these key debt ratios: Ratio of General Government Net Debt to Assessed Value of Real Property. This ratio indicates the relationship between the City's tax-supported debt and the assessed value of real property in the City. It is an important indicator of the City's ability to repay its tax-supported debt, since property taxes are a major revenue source. A lower ratio indicates that the City will be better able to withstand economic downturns. Per the City's adopted policy, the General Government should not exceed 3.0 percent of assessed value of real property. Ratio of General Government Debt Service to General Government Expenditures. This indicator measures the percentage of the general operating expenditures, which must be used for debt service (i.e., principal and interest payments on existing debt).Increasing debt service reduces expenditure flexibility by adding to the City's debt-related obligations. This ratio measures the City's ability to repay debt without 64 hampering other City services. A small ratio indicates a lesser burden on the City's operating budget. Per the City Policy,the Ratio of General Government Debt Service to the General Government Expenditures may not exceed 10%. Ratio of Fixed Costs to General Government Expenditures. This indicator measures the percentage of the percentage of fixed costs to General Government expenditures. Fixed costs include tax- supported debt service and General Government leases plus annual pension and OPEB (Other Post- Employment Benefits) costs. Increasing fixed costs reduces expenditure flexibility for other operating needs. This metric was adopted by City Council in February 2023. The Ratio of Fixed Costs to General Government Expenditures may not exceed 20%. Ten-Year Payout Ratio of Tax-Supported Debt. This indicator measures the amount of tax- supported principal repaid over the following ten fiscal years via a ratio that divides the amount of tax- supported principal repaid over the following ten fiscal years by total tax-supported principal outstanding. By using rapid debt retirement,the City is minimizing its borrowing costs interest paid on outstanding debt. This metric was adopted by City Council in February 2023.The Ten- Payout Ratio shall remain above 50%. The City's debt metrics are evaluated periodically and are appropriately adjusted over time,taking into account the City's prospective debt issuances and the expectations and comparative standards of both the nationally recognized rating agencies and the financial community. In FY 2023, the City's Financial Advisor recommended that the City update and enhance its existing debt-related financial policy to bring it in line with current national credit rating practices. On February 7,2023 City Council adopted a resolution to update the debt policies based on the advisor's recommendations. While the City's general obligation debt load may exceed the City's debt load ratios from time to time.the City anticipates that its actual debt load ratios generally will fall within the City's debt load targets over time. lRemainder of'page intentionally left blank] 2021 2022 2023 2024 2025 Overall NetDebt0) 5907.606,804 $902,626,370 $802,638.472 $1,124,859,234 $1,010,791,656 Net Debt Per Capita(2) S 1.975 $1,971 - - - Ratio of General 1.6% 1.6% 1.3% 1.6% 1.2% Government Debt to Assessed Value of Real Property(3) Ratio of Per Capita 3.1% 3.0% % % - Debt to Per Capita IncomeM Ratio of General 7.4% 7.3% 6.8% 5.9% 6.7% Government Debt Service to General Government 15.6% 14.8% 15.7% Expenditures(5) Ratio of Fixed Costs _ to General Government Expenditures(6) 77.1% 68.3% 70.0% 65 Ten-Year Payout Ratio of Tax- Supported Deb& (1) Includes debt as described in the following"Overall Net Debt Table." Does not include debt charged to the Water and Sewer or Storm Water Enterprise Funds,Agriculture Reserve Program.bond premiums. (1) For calculation of Net Debt per Capita,FY 2022 population is based on the estimate for July 1,2021 from Weldon Cooper Center for Public Service.FY 2021 and FY 2020 population estimates are based on the April 1,2020 Decennial Census Count estimate.In addition,Net Debt Per Capita excludes Revenue Bonds,Agriculture Reserve,and premiums. (1) Real property is assessed at 100 percent of fair market value. (4) For calculation of Debt Per Capita to Debt per Capita Personal Income,the per Capita Personal income information is per the U.S.Department of Commerce,Bureau of Economic Analysis including revisions made to older years. 0) Ratios based on gross tax-supported debt services. (6) New debt indicators adopted by City Council February 2023(Ratio of Fixed Costs to General Government Expenditures and Ten-Year Payout Ratio of Tax-Supported Debt)replaced obsolete debt indicators(Net Debt Per Capita and Per Capita Debt to Per Capita Personal Income). Source:City of Virginia Beach,Department of Finance and City Financial Statements. [Remainder of page intentionally left blank] Y aw 66 Outstanding Debt Information on the City's indebtedness is presented in the following tables. Included is information on governmental debt,debt service schedules for General Obligation debt and Governmental Debt,rapidity of principal retirement,and information on other types of debt. GOVERNMENTAL DEBT As of February 12,2026 General Obligation Bonds .................................................................................. $594,595,000 Public Facility Revenue Bonds tl>....................................................................... 355,830,000 Water and Sewer System Revenue Bonds P)......................................... 149,515,000 Storm Water Utility Revenue Bonds 0)............................................................... 192,020,000 ................................... Lease Liabilities.................................................................................................. 44,669,512 Agriculture Reserve Program Installment Purchase Agreements(4).................... 45,447,091 Subscription Liabilities........................................................................................ 16,542,217 Direct Borrowings............................................................................................... 3,454,748 $1,402,073,568 Plus: 2026 General Obligation Bonds expected to be issued March 5,2026.. Less: Water and Sewer System Revenue Bonds t2>......................................... $149,515,000 Storm Water Utility Revenue Bonds t3>................................................. 192,020,000 Public Facility Revenue Bonds—VBDA responsibility........................ 110,975,208 Agriculture Reserve Installment Purchase Agreements "..................... 45,447,091 $497,957,299 Governmental Debt and Long-Term Obligations $904,116,269 0) Includes Public Facility Revenue Bonds,issued through the Virgt is Development Authority as limited obligations of the Authority as described in the section"VBDA Appropriation-Based Debt"herein. (2) Water and sewer system revenue bonds are iot secured by a pledge of the City's full faith and credit and unlimited taxing power. These bonds are secured solely by the net revenues of the water and sewer system. (3) Storm water utility revenue bonds are not secured by a pledge of the City's full faith and credit and unlimited taxing power. These bonds are secured solely by the net re\enues of the storm water utility. 0) Represents installment purchase agreements, which are general obligations of the City.Interest and principal payments are paid from a dedicated portion of real estate taxes. Principal payments will be made from maturing zero coupon Treasury securities purchased from the dedicated portic n of real estate taxes.These obligations are described in the section"Agricultural Reserve Program"herein. Source:City of Virginia Beach,Department of Finance. [Remainder ofpage intentionally left blank] 67 GENERAL OBLIGATION DEBT As of February 12,2026(unaudited) LESS: OUTSTANDING GENERAL OBLIGATION PLUS: REFUNDED DEBT TOTAL OUTSTANDING FISCAL DEBT SERVICED) SERIES 2026 BONDS SERVICE GENERAL OBLIGATION DEBT SERVICE YEAR PRINCIPAL INTEREST TOTAL PRINCIPAL INTEREST PRINCIPAL INTEREST PRINCIPAL INTEREST TOTAL 2026 14,166,734.27 4,072,026.00 18,238,760.27 14,166,734.27 4,072,026.00 18,238,760.27 2027 58,440,665.51 24,807,282.41 83,247,947.92 58,440,665.51 24,807,282.41 83,247,947.92 2028 54,399,718.99 21,834,096.50 76,233,815.49 54,399,718.99 21,834,096.50 76,233,815.49 2029 50,283,814.44 19,341,263.38 69,625,077.82 50,283,814.44 19,341,263.38 69,625,077.82 2030 46,663,814.29 16,968,256.92 63,632,071.11 46,663,814.29 16,968,256.82 63,632,071.11 2031 43,675,900.00 14,800,000.00 58,475,900.00 43,675,000.00 14,800,900.00 58,475,900.00 2032 39,085,000.00 12,945,387.50 52,030,387.50 39,085,000.00 12,945,387.50 52,030,387.50 2033 36,410,000.00 11,265,562.50 47,675,562.50 36,410,000.00 11,265,562.50 47,675,562.50 2034 36,435,000.00 9,743,862.50 46,179,962.50 36,435,000.00 9,743,862.50 46,178,862.50 2035 31,355,000.00 8,284,656.26 39,639,656.26 31,355,000.00 8,284,656.26 39,639,656.26 2036 28,790,000.00 7,089,687.50 35,879,687.50 28,790,000.00 7,089,687.50 35,979,687.50 2037 25,725,000.00 6,000,381.26 31,725,381.26 0 25,725,000.00 6,000,381.26 31,725,381.26 2038 25,725,000.00 5,003,025.00 30,728,025.00 — 25,725,000.00 5,003,025.00 30,728,025.00 2039 25,585,000.00 4,001,750.00 26,586,750.00 22,585,000.00 4,001,750.00 26,586,750.00 2040 22,585,000.00 3,110,450.00 25,695,450.00 22,585,000.00 3,110,450.00 25,695,450.00 2041 17,805,000.00 2,290,850.00 20,095,950.00 17,805,000.00 2,290,850.00 20,095,850.00 2042 17,800,000.00 1,614,600.00 19,414,600.00 17,800,000.00 1,614,600.00 19,414,600.00 2043 13,060,000.00 1,044,800.00 14 104,800.00 13,060,000.00 1,044,800.00 14,104,800.00 2044 13,060,000.00 522,400,00 13,582,400.00 13,060,000.00 522,400.00 13,582,400.00 Totals $598,049,747.50 S174,741,237.63 $772,790,985.13 S $ $ $ $598,049,747.50 $174,741,237.63 $772,790,985.13 Source:City of Virginia Beach,Department of Finance (1) Includes Direct Placement Debt Service.Debt service on Qualified School Construction Bonds issued pursuant to the American Recovery and Reinvestment Act(ARRA)are presented at gross,which does not reflect the federal government interest subsidies. 68 GOVERNMENTAL DEBT As of February 12,2026 OUTSTANDING GENERAL OBLIGATION TOTAL GOVERNMENTAL DEBT SERVICE APPROPRIATION BACKEDt11 DEBT SERVICE FISCAL YEAR PRINCIPAL INTEREST PRINCIPAL INTEREST PRINCIPAL INTEREST TOTAL 2026 14,166,734.27 4,072,026.00 $17,074,971.00 $4,463,588.12 $31,241,705.27 $8,535,614.12 $39,777,319.39 2027 58,440,665.51 24,807,282.41 38,901,320.31 11,708,101.03 97,341,985.82 36,515,383.44 133,857,369.26 2028 54,399,718.99 21,834,096.50 34,854,575.94 10,347,405.53 89,254,294.93 32,181,501.85 121,435,796.78 2029 50,283,814.44 19,341,263.38 25,506,651.00 9,178,782.13 75,790,465.44 28,520,045.51 101,610,510.95 2030 46,663,814.29 16,968,256.82 22,925,223.97 8,261,586.80 69,5898.26 25,229,843.62 94,818,881.88 2031 43,675,000.00 14,800,900.00 20,242,460.36 7,391,544.22 63,917,460.36 22,192,744.22 86,110,204.58 2032 39,085,000.00 12,945,387.50 21,224,833.28 6,616,722.69 60,309,833.28 19,562,110.19 79,871,943.47 2033 36,410,000.00 11,265,562.50 21,694,070.86 5,769,400.81 58,104,070.86 17,034,963.31 75,139,034.17 2034 36,435,000.00 9,743,862.50 21,419,410.75 4,951,610.36 57,854,410.76 14,595,472.86 72,449,883.61 2035 31,355,000.00 8,284,656.26 17,988,807.73 4,055,226.90 49,343,807.73 12,339,883.16 61,683,690.89 2036 28,790,000.00 7,089,687.50 20,841,10639 3,360,845.22 49,631,106.39 10,450,532.72 60,081,639.11 2037 25,725,000.00 6,000,381.26 15,085,233.55 2,721,362.39 40,810,233.55 8,721,743.65 49,531,977.20 2038 25,725,000.00 5,003,025.00 16,204.195,90 2,256,696.06 41,929,195.90 7,259,721.06 49,188,916.96 2039 22,585,000.00 4,001,750.00 12,853,615.26 1,833,762.10 35,438,615.26 5,835,512.10 41,274,127.36 2040 22,585,000.00 3,110,450.00 12,927,804.41 1,503,422.59 35,512,804.41 4,613,872.59 40,126,677.00 2041 17,805,000.00 2,290,850.00 4,550,312.80 1,162,059.50 22,355,312.80 3,452,909.50 25,808,222.30 2042 17,800,000.00 1,614,600.00 7,776,081.61 950,183.04 25,576,081.61 2,564,783.04 17,841,461.38 2043 13,060,000.00 1,044,800.00 2,973,180.75 763,480.63 16,033,180.75 1,808,280.63 17,841,461.38 2044 13,060,000.00 522,400.00 4,202,694.15 611,275.53 17,262,694.15 1,133,675.53 18,396,369.68 Totals $598,049,747.50 $174,741,237.63 $339,246,550.2 $87,807,355.47 $937,296,297.52 $262,548,593.10 $1,199,844,890.62 Source:City of Virginia Beach,Department of Finance Includes Public Facility Revenue Bonds backed by a City appropriation pledge,agricultural reserve program installment purchase agreements,lease and subscription liabilities. 69 Authorized but Unissued Bonds As of February 12,2026,the City has authorized but unissued$821,433,799 of General Obligation Bonds,$245,504,500 of Revenue Bonds,and$604,370,038 in Public Facility Revenue Bonds as shown in the table below. This includes amounts authorized by City Council on May 13, 2025 in the Adopted FY 2026 Capital Improvement Program and additional authorizations adopted by City Council through December 10, 2025 and does not reflect the deduction for the General Obligation Bonds, Series 2026 anticipated to be issued on March 5,2026. Authorization Unissued Purpose Amount Security Year Manner Public Improvement $72,827,365 General Obligation 2025' Council Public Improvement 11,800,000 General Obligation 2025' Council Public Improvement 71,116,108 General Obligation 2024 Council Public Improvement 62,460,057 General Obligation 2023 Council Public Improvement 69,107,404 General Obligation 2022 Council Public Improvement 61,678,775 General Obligation 20212 Council Public Improvement 449,500,000 ral Obligati 20212 Council Public Improvement 22,944,090 General Obligatio 2020 Council Total General Obligation Bonds $821,433,799 Water and Sewer $26,819,000 Revenue 2025 Council Water and Sewer 28,7467000 Revenue 2024 Council Water and Sewer 2,n 30,000 Revenue 2023 Council Water and Sewer 22, 7,430 Revenue 2022 Council Water and Sewer 9,9193,368 Revenue 2021 Council Water and Sewer —1,318,515 Revenue 2020 Council Water and Sewer 373,971 Revenue 2019 Council Water and Sewer 2 666 Revenue 2015 Council Total Water and Sewer System Revenue Bonds 136,960,950 Storm Water Utility $ 53,494,904 Revenue 2025 Council Storm Water Utility 6,982,612 Revenue 2024 Council Storm Water Utility 6,399,140 Revenue 2023 Council Storm Water Utility 2,177,367 Revenue 2022 Council Storm Water Utility 39,489,527 Revenue 2021 Council Total Storm Water Utility Revenue Bonds $108,543,550 Total Revenue Bonds $245,504,500 Appropriation-Supported Debt: Public Facility Revenue Bonds $604,370,038 Appropriation Various Council Total Authorized but Unissued Debt as of February 12, 2026 1,671,308.337 70 The authorized but unissued 2025 Charter Bonds include$72,827,365 for various public improvement projects and$11,800,000 for Flood Protection projects authorized by City Council May 13,2025.Following the passage of the November 2021 Bond Referendum for Flood Protection,City Council established a lockbox to restrict future charter bond capacity from the retirement of Flood Protection Program Referendum Bonds for future flood protection projects. z_ The authorized but unissued 2021 Charter Bonds include $61,678,775 authorized by City Council May 11, 2021, and $567,500,000 authorized by City Council on November 16,2021 for twenty-one flood protection projects in the Flood Protection Program approved in a General Election Referendum by voters,with more than 72%voting in the affirmative on November 2, 2021. Source: City of Virginia Beach,Department of Finance. RAPIDITY OF PRINCIPAL RETIREMENT RAPIDITY OF PRINCIPAL RETIREMENT ALL GENERAL OBLIGATION BONDS("') ALL OVERALL NET DEBT(2) February 12,2026(unaudited) February 12,2026(unaudited) Percentage of Percentage of Maturing Amount Total Debt Maturing Amount Total Debt Within Maturing Outstanding Within Maturing Outstanding 5 years $223,954,748 37.45% 5 years $347,479,748 36.43% 10 years 410,914,748 68.71 10 years 648,369,748 67.97 15 years 536,324,748 89.68 15 years 859,894,748 90.15 20 years 598,049,748 100.00 20 years 953,879,748 100.00 Source: City Department of Finance. (I) Does not include appropriation-based indebtedness. _-- Water and Sewer System Debt Pursuant to Article VII, Sec. 10(a)(3)of the Constitution of Virginia,the City has issued water and sewer revenue bonds which are secured solely by thenet revenues of the water and sewer system. As of February 12,2026,$136,960,950 of these bonds were outstanding. Storm Water Utility Debt Pursuant to Article I I. Sec. 10(a)(3) of the Constitution of Virginia, the City has issued storm water utility revenue bonds which are secured solely by the net revenues of the storm water utility system. As of February 12,2026,$108,543,550 of these bonds were outstanding. It is the City's policy to service all debt issued for storm water purposes by revenues from the storm water utility system. Virginia Beach Development Authority Appropriation Based Debt On several occasions the Virginia Beach City Council has requested that the Authority finance various public facilities in the City pursuant to Chapter 643 of the Virginia Acts of Assembly of 1964. To meet the City's Financing Plans,the Authority has issued several series of bonds and refunding bonds for the City's benefit. The City's obligation to make payments under the Authority bonds is subject to the annual appropriation of funds for such purpose by the City Council and is not general obligation debt of the City. Of the $$355,830,000 in outstanding Public Facility Revenue Bonds as of February 12, 2026, $110,975,208 will be paid from revenues of the Authority and $244,854,792 will be paid from City appropriations. 71 The following table summarizes the debt issued by the Authority: Original Issue Outstanding Bond Issue Purpose Amount February 12,2026 2024A Public Facility Revenue Various Capital $33,435,000 $30,090,000 Improvements including Atlantic Park Offsite Infrastructure&Schools Energy Performance Contract 2024B Public Facility Refunding Various Capital 27,225,000 21,260,000 Refunding Revenue Improvements including Town Center Garage- Block 11,Williams Farm Community Recreation Center,and Modernization of Bow Creek Community Recreation Center 2024C Public Facility Revenue Atlantic Park public 128.070,000 115,270,000 (Federally Taxable) projects including Atlantic Park Development Acquisition,Atlantic Park Streetscapes,Atlantic Park Entertainment Venue, Atlantic Park Parking Garages,and Resort Area Site Acquisition 2020A Public Facility Revenue Various Capital 158,960,000 123,390,000 Improvements,Schools, City Hall Building and Virginia Beach Sports Center 2018A Public Facility Revenue Various Capital 33,395,000 16,885,000 Improvements and Town Center Phase VI 2016A Public Facility Revenue Various Capital 21,225,000 10,185,000 Improvements 2016B Public Facility Refunding Refunding Convention 7,880,000 700,000 Revenue Center,Open Space, Garages&Town Center 2015A Public Facility Revenue Various Capital 48,245,000 19,340,000 Improvements 2015B Public Facility Refunding Refunding of Convention 34,885,000 11,190,000 Revenue Center,Sandler Center,etc. 2013A Public Facility Revenue Various Capital 20,960,000 7,520,000 Improvements Total $355,830,000 Source: City of Virginia Beach,Department of Finance,unaudited 72 Agricultural Reserve Program On May 9, 1995,City Council adopted an ordinance establishing the Agricultural Reserve Program ("ARP"). The primary purpose of the ordinance is to promote and encourage the preservation of farmland in the rural southern portion of the City. Through ARP,the City acquires development rights in designated areas within the southern portion of the City through the purchase of agricultural land preservation easements. Landowners who meet certain eligibility criteria may sell an easement to the City while holding fee simple title to the land and continuing to farm. The City acquires these development rights by executing installment purchase agreements with the landowners. These agreements provide for the payment of the principal balance of the agreement in a single installment due approximately twenty-five years after execution of the agreement. Interest on the unpaid principal balance is payable semiannually. On May 9,2017,the City Council dedicated nine tenths of one cent in the real estate tax to preserve property in the Transition Area of the City and other Agricultural Reserve Program costs.On May 15,2018 with the adoption of the FY 20 9 Capital Improvement Program, the City Council expanded the use of excess ARP funds, $990,000 ally, to provide cash funding for storm water capital projects benefiting the southern portion of the ntil FY 2045. These obligations constitute indebtedness within the meaning of Article VII, Section 10 of the Virginia Constitution and will be general obligations of the City, pledging the full faith and credit and unlimited taxing power of the City. By policy,interest and principal;.payments will be paid from a dedicated portion of real estate taxes. Principal payments will be made from maturing zero coupon Treasury securities purchased using funds provided by the dedicated portion of real estate taxes; the term to maturity is 25 years. As of November 2025, 112 installment pu ase agreements totaling approximately 10,998 acres (and approximately 11, 129 acres wit res d for future development) at a total purchase price of$59,977,205 had been executed. f Fe 1 026,principal outstanding for installment purchase agreements was$45,447,091. Overlapping Debt The City is au mous fro y co nty,town,or other political subdivision. Currently,there are no overlapping jurisdicti with deb tstanding for which City residents are liable. Short-term Borrowing The City does not have any outstanding short-term debt. The City's policy is to maintain the General Fund cash balance at a level that provides sufficient cash flow for working capital purposes. Payment Record The City has never defaulted on the payment of either principal of or interest on any indebtedness. Impact of Future Economic Development on City Debt Over a number of years,the City has developed a strategy for the development and redevelopment of certain areas in the City that will be a critical element of the City's future economic vitality. Targeted areas include the further development of the oceanfront to complement the Virginia Beach Convention Center and Virginia Beach Sports Center as well as Corporate Landing Business Park and Virginia Beach Innovation Park. The use of public private partnerships is a critical piece in these potential economic 73 development projects. The public portion of any yet unnamed projects could involve additional debt not yet identified in the City's Capital Improvement Program. Comprehensive Plan The City of Virginia Beach Comprehensive Plan,It's Our Future:A Choice City,was adopted on May 17,2016. It's Our Future: A Choice City(2016)builds on the strength of the previous Comprehensive Plan, It's Our Future (2009), yet updates it to reflect new state planning mandates, changed conditions within our community, and important priority issues that our residents and the Planning Commission wanted to address. Since the merger between Princess Anne County and the City of Virginia Beach in 1963,our City leaders have made strategic choices over the past several decades based on recommendations within the Comprehensive Plan, which have provided infrastructure improvements and new opportunities for residents and visitors and has resulted in the City staking its claim as a "World Class Resort" or a "Choice City." Looking ahead to the Year 2040,the Comprehensive Plan update seeks to guide the City toward becoming a resilient city, with careful attention to planning for itigation and adaption measures ene for sea level rise and recurrent flooding in response to the Virginia Gr Assembly instruction to all local governments in Hampton Roads during the 2015 Session. This Comprehensive Plan identifies planning projections for both the short-term(0-5 years)for municipal planning needs and the long-term(20-25 years) for infrastructure planning and design needs. There are a number of key planning policies embodied in the City's Comprehensive Plan that include urban and rural growth management strategies, such as the Green Line and Strategic Growth Area (SGA) components, economic development opportunities (Strategic Economic Growth Areas (SEGAs), multimodal transportation systems that include transit, public facility improvements, environmental stewardship and resiliency, housing opportunities, neighborhood preservation, historic resource management and community design guidelines. By adopting these provisions of the Comprehensive Plan, the City has committed itself to advancing sound planning policies to achieve continued physical and fiscal viability leading to the Year 2040. This is accomplished, in part, by creating a fair and workable balance between the supply of public service delivery systems and the demand placed on those systems by existing and future land uses,utilizing the primary enabling-tool in Virginia for implementing local comprehensive plans—the Capital Improvement Program(CIP). The comprehensive plannir ;policies of the City were designed to achieve enhanced and manageable land development throughout our urban, suburban and rural areas. There are 8 Strategic Growth Areas(SGA)defined in the 2016 Comprehensive Plan and it is intended that over 50 percent of the City's future growth will be directed within these SGAs. These carefully defined areas were planned to advance the transformation of existing suburban patterns of development into a coherent set of high quality and environmentally sound mixed-use urban centers. In addition, the current Comprehensive Plan recognizes that adequate urban facilities and services need to be focused on serving future growth in these SGA's thereby recommending higher density development, greater intensity of activities, services and entertainment within a walkable distance,increasing multimodal transportation options,and expanding the City's taxable revenue base all while not compromising the reasonable levels of service to be provided in other areas of the City. By preventing future sprawl through the designation of SGAs for appropriate urban development,the City avoids net negative fiscal impacts for related capital and operating expenses that are too often linked to such development patterns. Two SGAs, Burton Station and the Resort Area, were updated in 2018 and 2020, respectively, and adopted by reference into the current Comp Plan. It is important to note that our Comprehensive Plan policies also recognize the need to preserve our stable residential neighborhoods in the Suburban Area from decline and a range of initiatives have been and will be established to further this objective. Having the SGAs also ensures the long-term preservation of the City's Rural Area, which is an economic engine for the City and a way of life for many residents. Preservation of the Rural Area from growth pressures provide benefits to all of our residents as well as 74 visitors, as pick your own and other farm related businesses draw residents and visitors, alike,throughout the growing seasons into the southern part of our city to take advantage of its crop production bounty. The Comprehensive Plan outlines land use and other planning policies for the Princess Anne Commons&Transition Area. These planning areas are located between the more urbanized region of the City to the north of the Green Line and the rural areas to the south. The Interfacility Traffic Area(ITA) is within Princess Anne Commons and was created as a result of the Base Realignment and Closure Process (BRAC)agreement in 2005 as the fly-zone boundary between NAS Oceana in Virginia Beach and NALF Fentress in Chesapeake. The Princess Anne Commons&Transition Area are important components of the City's overall land use planning and economic development strategy. It is not the intent of the Comprehensive Plan for Princess Anne Commons or the Transition Area to become part of the urban area north of the Green Line, nor is it intended that the Transition Area be limited to the very low densities appropriate for rural growth. The policies of the Comprehensive Plan were designed to ensure that this continues to be a well-planned area. In addition to the municipal center and courthouse complex, the Princess Anne Commons planning area comprises an array of uses that define it as a special destination within the Hampton Roads Metropolitan Area. It includes a world class amphitheater, higher education institutions, medical facilities, sports centers and major parklands, among other recreational and open space-related activities. An update to the approved and adopted ITA Vicinity Master Plan was approved by City Council in December 2017. The plan update was timely due to the recent City purchase of thousands of acres in the ITA area. Key components of the plan include the establishment of a BioMedical Research Park, now known as Innovation Park, new land for city department operations use and ample active and passive recreational areas.The Transition Area includes many well-planned neighborhoods with considerable open space and protection of key environmental resources,such as our expansive West Neck Creek Park.The Transition Area Design Guidelines.an adopted by reference document approved in 2015, provide guidelines for designing low density residential areas and complimentary, neighborhood serving non-residential uses that include recommendations on open space requirements,trail and pathway network connection,and architectural design guidance. The southern third of the city is rural and this Comprehensive Plan provides a set of policies to balance agricultural viability and environmental protection with very limited well managed residential and nonresidential growth. For example, the Rural Preservation element of the Comprehensive Plan and the Agricultural Reserve Program,adopted b� City Council in 1995,are major tools to promote the preservation of farmland and the rural way of life. Thc_ southern part of the City also is home to many state and federal lands that are essential to the green infrastructure of the City, such as Back Bay Wildlife Refuge. The Comprehensive Plan intends to maintain the preservation of both agricultural and environmental protected lands for residents,visitors,and wildlife to enjoy for years to come. A series of special Comprehensive Plan amendments, along with many related ordinances and process improvements were established as part of our Oceana Land Use Conformity Program. These actions occurred between 2005 and 2009 and provide complementary land use planning direction between the City and the Navy that promote a balance between the city's responsibility to conduct land use planning decision making with the Navy's responsibility to ensure optimal military readiness, again, in part due to the BRAC agreement in 2005. The overall land use planning guidance cited in the Comprehensive Plan, along with the strong public demand to live and work in Virginia Beach,will ensure continued well-planned growth in Virginia Beach into the foreseeable future. The Virginia Beach Comprehensive Plan is a dynamic instrument and City Council periodically reviews,enhances and amends the Plan when appropriate. Since the adoption of the 2016 Comprehensive Plan,City Council has adopted ten amendments.Major amendments are as follows: • Virginia Beach Outdoors Plan(2016) 75 • Historic Seatack Suburban Focus Area(2016) • Interfacility Traffic Area and Vicinity Master Plan Update(2017) • Oceanfront Plans and Guidelines(2017) • Burton Station Strategic Growth Area Plan Update(2018) • Sea Level Wise(2020) • Resort Area Strategic Action Plan(2020) • Active Transportation Plan(2021) • Resort Area Mobility Plan(2023) • Commercial Area Pattern Book(2023) • Flood Resiliency Toolkit(2023) • Historic Plan Preservation(2023) Since 1971, the City Council periodically revises and updates the City's Master Transportation Plan(MTP),as needed,to address,in a comprehensive fashion,the need or an efficient, cost effective and multimodal transportation system. This policy document, which is mponent of the Comprehensive Plan, establishes transportation planning policies for Virginia Beach, and provides planning guidance for bikeways, scenic easements, and other similar features related to the City's major roadway system. The MTP in the 2009 Comprehensive Plan places greater emphasis on multimodal systems, especially mass transit modes to help provide alternative mobility consistent with the planning gals related to our Strategic Growth Areas. It was amended in 2010 to include the Major Street Network UCtimate Rights of Way and, again,in 2011 to incorporate an update of the City's Bikeways and Trails Master Plan. Decisions affecting the implementation of land use and transportation policies are based, in large measure, upon the guidance provided in the City's Comprehensive Plan and]vlaster Transportation Plan.The MTP is also being updated as a part of the 2040 Comprehensive Plan project,as required by State Code. This multimodal focus was continued with the 2016 Comprehensive Plan update and emerging mobility technologies (e.g., Intelligent Transportation Systems (ITS) and Alternative Transportation Choices such as Uber, Lyft, and Self Dri mg Vehicles) were added to plan to acknowledge the rapidly mobility patterns and lifestyle choices.- roviding multimodal transportation choices to residents and visitors continues to remain a high priority,as well as environmental stewardship,including responsiveness to storm water management. Creating a more connected community through enhancing public transit, building more sidewalks, and buildi _ e}tensive system of multiuse trails for nonvehicular travel and ensuring safe pedestrian connections _ere also identified by the residents as a top priority. The Active Transportation Plan,originally ado in 2011 and updated in 2021, is the blueprint for achieving greater nonmotorized connectivity, along'with the City's new `Complete Streets' Policy and Administrative Directive,adopted in 2014. The 2009 MTP's Primary Roadway Network Plan was also modeled to validate the need for the improvements shown on the plan or make lane call adjustments It's Our Future: A Choice City(2016)also aligns with the City Council endorsed vision document for 2040,Envision Virginia Beach 2040 and A Community Plan for Sustainable Future(2013)—the City's landmark Sustainability Plan. However, the Sustainability Plan is not an adopted document within the Comprehensive Plan. The City Council has continuously demonstrated its commitment to implementation of the Comprehensive Plan via both its Operating and Capital Budgets, and its Capital Improvement Program, focusing on the public initiative recommendations contained in these various plans. Implementation has occurred through preparation of amendments to development ordinances and other necessary steps to realize full implementation of these plans in so far as city government can affect change. It is the City's 76 intention to provide appropriate incentives through adopted policies to encourage the private sector and other community organizations to partner with the City to realize plan goals. The Update of the 2016 Comprehensive Plan began in 2019 with a public survey and development of an existing conditions story map and a second survey in 2022. The revision currently underway will reflect a shared vision for the future and is organized according to "Themes," "Place Types" and "Big Ideas." Themes were born out of discussions with residents about their values and priorities for the community—such as balanced growth and environmental sustainability. Place types are areas of the city categorized by land use and development—such as"Neighborhoods"and"Countryside." "Big Ideas"are a means to implement each of the "Themes" across the City's Various Place Types and emerged from conversations with City residents during focus group sessions. Upon its completion, the Comp Plan will translate the "Themes" and "Big Ideas" into specific strategies and policy recommendations designed to make the plan's vision for the future a reality.The 2040 Comprehensive Plan is expected to be adopted by City Council in 2026 [Remainder of page intentionally left blank4 77 SECTION FIVE: FINANCIAL INFORMATION All of the City's and School Board Component Unit Governmental Funds and Custodial Funds (assets and liabilities) are accounted for using a current financial resources measurement focus and the modified accrual basis of accounting (except for the Custodial Funds which are accounted for using the economic resources measurement focus and the full accrual basis or accounting). Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable"means the amount of the transaction can be determined and "available"means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The term available is limited to collection within forty-five days of the fiscal year end. Levies made prior to the fiscal year-end but, which are not available, are recorded as unearned. Expenditures are recorded when the related fund liability is incurred, if measurable(except for unmatured interest on general long-term debt which is recognized when due and paid). The following is a list of the major revenue sources which meet t "susceptible to accrual"criteria. General Property Taxes Interest on Deposits and'; vestments General Sales Tax Revenue from Commonwealth Utility Taxes Revenue from F ral Government Hotel Taxes Amusement T s Restaurant Taxes .,., . _ All City and School Board Component Unit Proprietary Funds are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when incurred. Unbilled Water and Sewer, Storm Water, and Waste Management Enterprise Funds accounts receivable for utility services provided through June 30 are included in the financial statements. The City operates on a July 1 through June 30 Fiscal Year. City of Virginia Beach Development Authority The Virginia Beach Development Authority initially was established for the purposes of attracting new industries and the expansion of exist' industries. Over time, the Authority's powers have been a expanded and include the power to undertake financings for the City. In addition, the Authority is authorized to issue industrial development bonds after approval by the City Council and to purchase land to improve and sell for development. These bonds do not constitute indebtedness of the City but are secured solely by revenues from the organization on whose behalf the bonds were issued.In addition,the Authority is authorized to purchase land to improve and sell for development. The Authority's Commissioners are appointed by City Council. The City does not have legal title to any of the Authority's assets, nor does it have a right to the Authority's surpluses. However, in accordance with Governmental Accounting Standards Board Statements 14 and 61,the Authority is presented as a blended component unit. Hampton Roads Transportation District Commission The City's financial statements include its share of the operating cost of the regional mass transit operations of the Hampton Roads Transportation District Commission. For FY 2025, the City's share of operating costs was$9,455,243 and has budgeted$8,596,142 in FY 2026. City Financial Statements In the governmentwide Statement of Net Position, both the governmental and business type activities columns are presented on a consolidated basis by column and are reflected on a full accrual, and 78 economic resources basis, which incorporates long-term assets and receivables as well as long-term debt and obligations. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. The program revenues must be directly associated with the function (public safety, public works, etc.) or a business type activity. Program revenues include (1)charges to customers or applicants who purchase,use or directly benefit from goods, services,or privileges provided by a given function or segment; and (2)grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported as general revenues. Fund financial statements are provided for governmental funds, proprietary funds, and fiduciary funds: Major governmental funds are: The General Fund is the City's primary operating fund. It accounts for all financial resources of the City, except those required to be accounted for in another fund. Revenues are derived primarily from property and other local taxes, state a#federal distributions,licenses,permits, charges for service,and interest income. A significant part of the General Fund's revenues is used principally to finance the operations of the City of Virginia Beach School Board. The General Fund also includes the Flood Protection Referendum sub-fund which is used to account for collections and disbursements of the dedicated tax revenues. The Capital Projects Fund is used to account for the financial resources for the acquisition or construction of major capital facilities within the City. Major proprietary funds are: The Water and Sewer Fund provides water service and sanitary sewer waste collection and transmission services to Virginia Beach residents and accounts for operations that are financed in a manner siiuilar.to private business enterprises. The Stor ater Fun accoun s for the activities of the Storm Water Utility which charges a fee for ope ' nal and ital needs for Storm Water management in the City. The Waste Mana t Fund provides services to our residents for collection,management and disposal of soli waste, recyclable materials, and other refuse. In addition, the fund is responsible for the operation of the City's landfill. The Development Authority Fund was established for the purpose of attracting new industries and the expansion of existing industries. These services are financed through fees for Industrial Revenue Bonds and other sources. Additionally,the City reports the following fund types: Special Revenue Funds account for revenue derived from specific sources that are restricted by legal and regulatory provisions to finance specific activities. Internal Service Funds account for the financing of goods and services provided to other departments and agencies of the City or to other governmental units on a cost reimbursement basis. 79 Debt Service Fund accounts for the accumulation of resources,for, and the payment of principal, interest and related costs on general long-term debt for schools and the agricultural preservation program. Parking Enterprise Fund accounts for revenues derived from the operations of the Parking Systems Management Office, which manages the operation of parking lots at numerous locations. The primary revenue streams collected by the Parking Fund are residential parking permit fees,parking ticket fees,and charges for services at the City's garages or parking meters. Fiduciary Funds are used to account for assets held by the City in a trustee capacity or as an agent for individuals,private organizations,and other governmental units. Investment Policies and Practices The City of Virginia Beach, as a political subdivision oft Commonwealth, is limited to investments permitted by the Code of Virginia of 1950,as amended. ddition,various bond resolutions and a City Council-adopted investment policy further restrict the of allowable investment activities. The City's investment practices are generally described in N 9 e City's financial statements, included in Appendix A hereto. The City Treasurer is responsible for the invest t of City funds. The City Treasurer invests the City's funds using internal active management,with exte l trustees and trust funds taking possession of applicable investments. Within the state permitted guidelines and the adopted investment policy,the City Treasurer limits the City's investments to the State Treasurer's Local Government Investment Pool, VACo/VML Virginia Investment Pool,collateralized certificates of deposit,repurchase agreements,prime quality commercial paper, short-term corporate c :ties and prime quality "fed eligible" bankers' acceptances.The City does not invest ative curities,utilize reverse repurchase agreements,nor otherwise leverage its investment p olio. a Cit atches the maturity of its investments to cash flow needs to assure cash availability cess Certificate of Achieveme _ The Government Finance Officers Association of the United States and Canada("GFOA")awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its Annual Comprehensive Financial Report foiscal Year 2024.This reflects the 46th time that the City has achieved this prestigious award over many y ars. To be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized ACFR,providing full disclosure and transparency.This report must satisfy both GAAP and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. The City believes its FY 2025 ACFR continues to meet the Certificate of Achievement Program's requirements and will submit it to the GFOA to determine its eligibility for another certificate. In addition,the City received GFOA's Award for Outstanding Achievement in Popular Annual Financial Reporting(PAFR Award)for its Popular Annual Financial Report for fiscal year ended June 30, 2024 for a 7th consecutive time. Likewise, the City will submit the FY 2025 PAFR to the GFOA for consideration. The City was also awarded the Certificate of Achievement for Distinguished Budget Presentation from the GFOA for its Fiscal Year 2026 budget. This reflects the 39th time the City has achieved this prestigious award over many years. To receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, an operations guide, a financial plan, and a communications device. Budget documents must be rated "proficient" in all four categories, and in the 80 fourteen mandatory criteria within those categories,to receive the award. The award is valid for a period of one year only. Budgetary Process The City Charter requires the City Manager to submit a balanced, Proposed Operating Budget to the City Council at least 90 days before the beginning of each fiscal year, which starts July 1. Each department of the City prepares its own budget request for review by the City Manager. The City Council is required to hold a public hearing on the budget,at which time all interested persons have an opportunity to comment. The budget for Virginia Beach City Public Schools (VBCPS) is approved by the School Board, transmitted to the City Manager for review,and then submitted to the City Council for consideration as part of the City's general Operating Budget. If the School Board determines that additional funding is needed, the School Board Chairman makes a formal written request to the City Co ncil,and the School Board holds a public hearing on the issue. The City Manager is authorized to transfer appropriations up to a maximum of$250,000. Transfers in excess of$250,000 require City Council approval,except during a declared emergency. Transfers from $25,000 to $250,000 are reported to City Council on a monthly basis. Additional appropriations must be offset by additional estimated revenues and/or an appropriation from the proper undesignated fund balance and require a public hearing if the amount of the additional appropriation exceeds one percent of the total revenue in the approved budget. Unexpended appropriations(except for the Capital Projects and Grants Funds)lapse and are closed to the proper fund balance at the end of each fiscal year. The appropriation for the subsequent fiscal year is increased by the amount necessary to satisfy the outstanding encumbrances at June 30 of each fiscal year. The Operating Budget includes a portion of the funding for the Capital Improvement Program (CIP). General appropriations used to ti nance capital projects are shown both in the operating budget and in the CIP.The Department of Budget and Management Services annually prepares a six-year CIP. Because activities of capital projects often go beyond a fiscal year period, the accounting, encumbering, and controlling of the funds are based upon I he length of project activities. Similarly, federal and state grants in the Grants and Grants Consolidated Funds are budgeted separately from the Operating Budget,because these revenues/appropriations do not necessarily align with the City's fiscal year. Each lease obligation has a subject to appropriation clause which generally states that each fiscal year's lease payments are subject to appropriation by City Council. These lease appropriations are offset by an equal amount of revenue(other financing sources). Financial Results for Fiscal Year 2025 The City's governmental funds reported combined ending fund balances of$918.3 million,an 8.4% decrease compared to the prior year's fund balance. Governmental funds show increases in property tax revenues of$45.4 million primarily due to an increase of 7.37%for real estate assessed values. There was an increase of 9.2% in personal property tax collections due to a 2.9%rise in the net tax levy and a higher collection percentage.The real estate tax rate decreased to$0.97 per$100 of assessed valuation for fiscal year 2025 while the personal property tax rate remained at$4.00 per$100 of assessed valuation. 81 General Fund revenues totaled $1,558.7 billion, which is $42.4 million over budget. General property taxes and other local taxes came in over budget by $9.7 million and $6.1 million, respectively. Actual City department expenditures were $110.5 million less than budget. Departments with notable savings include Public Works ($21.1 million), Human Services ($14.5 million), Debt Service ($10.5 million), Parks& Recreation($5.4 million)and Police ($2.7 million). Reservations against fund balance totaling$263.8million were established for non-spendable items ($10.7 million), such as inventories and loans receivable and for restricted,committed or assigned items($253.1 million),such as capital projects, education,grants,and School reversion. The final unassigned General Fund Balance at June 30, 2025, was $178.4 million or 11.5% of subsequent year's revenues, an amount within the range of the City Council policy of 8-to-12%. The tables that follow contain audited results for the Fiscal Year ending June 30,2025. FY 2025 General Government Revenues In Fiscal Year 2025, tax revenues accounted for 70.9 per of general governmental revenue, State assistance 12.7 percent, federal sources 8.3 percent,and other sources 8.1 percent. The following table shows the City's Fiscal Year 2024 and 2025 actual revenues by source. General Governmental Revenues Fiscal Year 2025 and 2024 Revenues by Source Increase(Decrease) FY 2025 FY 2024 from 2024 Source Amount Percent Amount Percent Amount Percent millions '' ofTotal millions of Total millions Change Local Sources: General Property Tax $943.5 49.9% $898.1 49.9% $45.4 5.1% Other Local Taxes 395.9 21.0 381.9 21.2 14.0 3.7 Fines and Forfeitures 1.8 0.1 1.9 0.1 (0.2) (8.4) Permits,Privilege Fees, and 9.8 0.5 10.1 0.6 (0.3) (3.4) Regulatory Licenses iE From Use of Money and 52.4 2.8 35.2 2.0 17.2 48.9 Property 41 Charges for Services 77.8 4.1 80.6 4.5 (2.8) (3.5) Miscellaneous 11.5 0_6 32.2 1_8 2( 0.81 6( 4 Total Local 1,492.7 79.0 1,440.0 80.0 52.7 3.7 From Commonwealth 239.8 12.7 250.0 13.9 (10.2) (4.1) From Federal Government 156.6 8_3 110.0 6_1 46.6 42.4 Total Revenues 100.0% $1 80Q Source:City of Virginia Beach,Department of Finance. FY 2025 Operating Data Ad valorem property taxes and other local taxes contributed 49.9 and 21.0 percent,respectively,of the City's Governmental Funds revenues in Fiscal Year 2025. The City levies an ad valorem tax on the assessed value of real and personal property located within the City. Other local taxes include: (1)a one 82 percent local sales tax(collected by the state and remitted to the City);(2)a tax on consumer utility bills of 20 percent each for gas, electric, water, and telephone on bills up to $15 per month for residential classes and 15 percent on the first $625 per month and 5 percent on the amount between $625 and $2,000 for industrial and commercial classes;(3)a cigarette tax of 75 cents per pack;(4)property transfer recordation taxes;(5)an automobile license fee;(6)various business,professional and occupational taxes;(7)an eight 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 events; and(10)a flat rate of$2.00 added to hotel room charges to fund the Tourism Investment and Advertising Programs to finance projects in the Resort area. The following table shows the City's principal tax revenues by source for each of the last ten fiscal years. Growth in real property taxes and total tax revenues has averaged 4.9%over the past ten years. PRINCIPAL TAX REVENUES BY SOURCE FISCAL YEARS 2016 THROUGH 2O25 Real Personal General Restaurant Total Fiscal Property Property Sales Utility Meal Other Tax Year Taxes Taxes' Tax Tax Tax Taxes Revenuez 2016 $526,451,909 $149,343,550 $61,099,407 $42,658 0 437,485 $122,395,718 $965,386,975 2017 544,302,460 153,488,073 62,614,614 44, 4 1699 125,846,026 996,288,866 2018 567,573,017 161,536,265 63,511,403 4 408 66, 85 126,236,359 1,034,954,137 2019 586,407,784 159,441,951 65,851,817 ,636,48 69,278,652 126,280,403 1,054,897,091 2020 603,119,216 166,140,950 67,855,536 84, 60,561,741 124,110,581 1,067,372,503 2021 631,547,267 176,265,881 78,732,948 8 65,572,967 139,738,177 1,137,393,748 2022 633,156,847 189,957,779 87383,198 45, 8 85,941,096 148,037,567 1,190,184,166 2023 683,138,841 193,664,198 89:501,99 40,543, 92,035,336 151,323,719 1,250,207,416 2024 743,640,555 207,917,410 92,229,96 6,57 94,093,300 152,864,816 1,333,452,622 2025 778,019,980 218,932,959 95,412.08 97,865,339 159,683,484 1,392,847,507 Source:City of Virginia Beach,Department of finance Includes personal property tax revenue reimbursed to the City by the Commonwealth of Virginia under the Personal Property Tax Relief Act(PPTRA)of 1998.This amount has rc maincd constant at$53,412,868 since FY 2012. Includes penalty&interest($10 minimum)on d.-linquentcollections. An annual ad valorem tax is levied by the City on the assessed value of real property subject to taxation within the City as of July 1. The City assesses real property at 100 percent of its fair market value (with the exception of public service properties which are assessed by the State Corporation Commission). Real property taxes are due n December 5 and June 5 of the fiscal year in which they are levied. A penalty of ten percent of the tax owed or$1 a whichever is greater,along with interest.Interest is accrued at 0.80% of the outstanding balance each month for the first 12 months, then at 0.70% each month thereafter, until the bill is paid in full. A portion of tangible personal property located within the City is also assessed an annual ad valorem tax. The assessed value of personal property is 100 percent of appraised value. Personal property taxes are due June 5,and delinquent payments are subject to the same penalties as described above for real property. The following table sets forth the assessed value of all taxable property in the City for the last ten fiscal years. The assessed value of real and personal property in the City at June 30, 2025, was $91,321,761,609 including personal property,and public service real and personal property. 83 HISTORICAL ASSESSED VALUE FISCAL YEARS 2016 THROUGH 2O25 Public Real Percentage Personal Percentage Service Percentage Percentage Property Change Property Change Property Change Total Change Fiscal Assessed from Assessed from Assessed from Assessed from Year Value' Prior Year Value Prior Year Value Prior Year Value Prior Year 2016 52,016,374,504 2.85 4,582,059,618 0.27 895,479,945 2.28 57,493,914,067 2.63 2017 53,840,546,037 3.51 4,692,383,356 2.41 945,094,380 5.54 59,478,023,773 3.45 2018 55,520,701,233 3.12 4,786,765,849 2.01 983,607,868 4.08 61,291,074,950 3.05 2019 57,299,357,619 3.20 5,647,066,916 17.97 1,020,179,772 3.72 63,966,604,307 4.37 2020 59,349,419,535 3.58 5,596,703,821 (0.89) 1,046,921,797 2.62 65,993,045,153 3.17 2021 61,431,537,591 3.51 5,896,556,470 5.36 1,111,754,367 6.19 68,439,848,428 3.71 2022 63,816,499,892 3.88 7,150,279,805 21.26 1,131,096,865 1.74 72,097,876,562 5.34 2023 69,682,097,834 9.19 6,908,616,693 (3.38) 1,193,996,250 5.56 77,784,710,777 7.89 2024 76,467,368,699 9.74 7,778,880,016 12.60 1,091,398,005 (8.59) 85,337,646,720 9.71 2025 82,300,604,596 7.63 7,672,654,362 (1.37) 1,348.502,651 23.56 91,321,761,609 7.01 Source:Commissioner of Revenue,Real Estate Assessor's Office and City of Virginia Beach,Department of Finance. 1 Real property is assessed at 100%of fair market value. 2 Includes both real estate and personal property assessment. All public service property is taxed at the real estate tax rate,except for vehicles. L The City is required to levy taxes on the assessed MAW- f real and personal property without limit as to the rate or amount to the extent necessary to pay principal of and interest on its general obligation bonds. The following table sets forth the City's tax rates and tax levies on real property for Fiscal Years 2016 through 2025. PROPERTY TAX RATES AND CHANGE IN TAX LEVY FISCAL YEARS 2016 THROUGH 2O25 Tax Rate Real Annual Fiscal on Real Property Change in Year Property' Tax Levy Tax Levy 2016 $0.9900 $510,528,757 10.22% 2017 0.9900 528,410,384 3.50 2018 1.0025 551,883,966 4.44 2019 1.0025 570,105,091 3.30 2020 1.0175 596,677,843 4.66 2021 1.0175 616,188,945 3.27 2022 0.9900 621,125,929 0.80 2023 0.9900 673,307,081 8.40 2024 0.9900 728,824,329 8.25 2025 0.9700 764,045,536 4.83 Source:Real Estate Assessor's Office and City of Virginia Beach,Department of Finance. Tax rate per$100 of assessed value. 84 The following table sets forth information concerning the City's property tax collection rate for each of its ten most recent fiscal years. CITY OF VIRGINIA BEACH,VIRGINIA PROPERTY TAX LEVIES AND COLLECTIONS Fiscal Years 2016 through 2025 Collected within the Total Fiscal Year of the Lew Collections Total Collections to Date Fiscal Tax Percentage in Subsequent Percentage Year Levv Amount of Lew Years Amount of Levy 2016 $613,105,892 $589,411,524 96.1 $18,946,272 $608,357,796 99.2% 2017 634,993,466 609,085,906 95.9 21,453,935 630,539,841 99.3 2018 662,272,634 636,789,707 96.2 24,103,980 660,893,687 99.8 2019 688,073,333 638,348,095 92.8 28,217,169 666,565,264 96.9 2020 722,621,429 631,762,062 87.4 74,246,066 706,008,128 97.7 2021 727,662,524 687,116,605 94.4 54,177,469 741,294,074 101.9 2022 742,224,896 707,907,083 95.4 42,931.893 750,838,976 101.2 2023 799,133,262 755,199,729 94.5 43.913,518 799,113,247 100.0 2024 882,727,060 830,786,286 94.1 41451,783 873,238,069 98.9 2025 919,006,227 867,095,870 94.4 - 867,095,870 94.4 Source:City of Virginia Beach,Department of Finance. Note: Collections in subsequent years represent delinquent accounts collected during the fiscal year for all prior fiscal years. [Remainder of pane intentionally left blank] 85 CITY OF VIRGINIA BEACH PRINCIPAL TAXPAYERS FISCAL YEAR ENDING JUNE 30,2025 Real Property Assessed Taxpayer Business Type Value 1 Armada Hoffler Office/Apartments/Hotel/Retail/Restaurant/Bank/Shopping $776,838,800 Centers/University/Parking Garage/Vacant Land/Single Family Residence 2 Ramon W.Breeden,Jr. Apartments/Parking Garage/Shopping Center/Fast-Food/ 772,061,400 Restaurant/Office/Vacant Land/Single Family Residence/ Storage Building 3 Dominion Energy,Inca Utility 580,253,063 4 A.D.&L.E.Fleder&Randy J. Shopping Centers/Retail/Bank/Fast Food/ Apartments/ 572,043,000 Caplan Revocable Trust Condominiums/Vacant Commercial and Residential Land/BMP/ Industrial Commerce Center/Office 5 Thompson,Bruce L.,Edmund Hotels/Apartments/Shopping Center/Retail/Restaurant/Beach 378,311,200 C.Ruffin Revocable Trust, Club/Laundry Plant/Offices/Parking G /Vacant Land Alice F.Ruffin Revocable Commercial Land/Single Family Resid s Trust,&Ruffin Family Investments LLC 6 Amazon.Com Services LLC Amazon Warehouse/Distribution arehous 309,716,200 7 Constitution LLC Apartments/Retail and Office/Offce Condom s/Vacant 277,624,000 Commercial Land 8 Lynnhaven Mall LLC Shopping Mall 275,928,000 9 W.Taylor Franklin Apartments/Single Family Rc s'dence/Vacant Commercial Land 275,872,900 10 Pembroke Square Associates Shopping Mall/Retail/Bankh staurants/Fast Food/Shopping 262,411,500 LLC Centers/Office/Apartments/Condominium/Warehouse/Vacant Residential Land/harking_ 11 Renaissance at Burton LLC Apartments/Office/Indus edical Center&Office/Retail/ 247,971,500 Vacant Commercial Lang 12 Sifen,Michael D. Shopping Centers/Restaurant/Paving/Retail/Parking Garage/ 241,380,700 Hotel/Vacant Commercial&Residential Vacant Land/Industrial OIl ice Warehouse/Single Family Residence/Residential Condominium/Self Storage/Commercial Auto 13 Virginia Natural Gas,Inc' Utility 217,499,965 14 Watergate Treehouse Apartments 197,901,800 Associates LP&Chanticleer Associates LP 15 Shamin Hotels I lotels/Retail/Parking Garages/Outdoor Cafes 179,672,700 16 Cheryl P.McLeskey Slopping Centers/Townhouses/Duplexes/Condominiums/ 179,637,100 Apartments/Marinas/Retail/Fast Food/Car Dealership/Vacant Commercial,Vacant Industrial&Residential Land/Single Family Residences&Lots 17 Spence Properties LC Apartments/Office Park 162,741,100 18 Westminster Canterbury of Etc. Retirement Center/Condominiums/Vacant Commercial Land 156,959,500 with Asphalt Parking Only 19 Windsor Lake Apartments LLC. Apartments/ Shopping Centers/ Restaurant/ Vacant Commercial 153,973,500 Land 20 Diamond Resorts GK Hotel/Condo 152,988,600 Development LLC 21 Christian Broadcasting Broadcasting/Office/Apartments/Commercial Acreage with 146,757,000 Associates,Inc./Network,Inc. Forest Land/Hotel 22 Joan N.Lyons Hotels/Office/Outdoor Cafes/Single Family Residence/ 134,833,100 Apartments/Car Dealership 23 T.J.&A.Stiffler&M.B.& Offices/Storage/Hotels&Paved Parking Lots/Retail/Shopping 131,576,600 M.J.Stone Lewis Center/Single Family Residence 24 Lake Gem Apartments LLC Apartments/Shopping Center/Self Storage 130,162,200 25 VA8 Marina Shores LLC Apartments 123,014.300 Total 7.038.039.728 86 *The top 25 taxpayers represent 8.4%of the total FY 2025 assessed real property value of$83,645,270,401 I For Public Service Corporations,reflects real estate assessments(excludes personal property assessments taxed as real estate). Source:City of Virginia Beach,Office of Real Estate Assessor and Office of the Commissioner of the Revenue. General Fund In accordance with the general practice of governmental units, the City records its transactions under various funds. The largest,the General Fund,is that from which all general costs of City government are paid and to which taxes and other revenues,not specifically directed by law or administrative action to be deposited in special revenue funds,are recorded. Examples of special revenue funds are the Sandbridge Special Service District,Parks and Recreation,and grants funds. The General Fund is comprised of revenue derived from ad valorem taxes, other local taxes, licenses,fees,permits,certain revenue from the federal and state governments,interest earned on invested cash balances, and other revenues. General Fund disbursements ' ude the costs of general City government and transfers to the School Operating Fund for local sh f school costs. /Remainder of page intentionally left blan 87 General Fund Operations GENERAL FUND COMPARATIVE STATEMENT OF REVENUES AND EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE FISCAL YEARS 2021 THROUGH 2O25 2021 2022 2023 2024 2025 REVENUES: General Property Taxes $712,039,907 $730,322,636 $782,738,092 $852,796,518 $895,551,015 Other Local Taxes 266,215,100 289,621,340 289,645,377 296,856,481 310,504,543 Permits,Privilege Fees and Regulatory Licenses 6,748,562 7,940,028 9,190,870 10,011,022 9,622,379 Fines and Forfeitures - - 1,326,584 1,918,689 1,757,797 From Use of Money and Property 4,614,656 6,956,900 21, 482 28,621,823 35,701,881 Charges for Services 50,632,485 54,505,823 62,395 64,734,903 62,666,380 Miscellaneous 7,660,803 9,594,765 151 9,384,588 9,987,692 From Commonwealth 165,668,974 166,286 180,077,7 192,810,338 199,286,951 From Federal Government 23,593,442 27 50 25,974,231 29,421,722 31,042,751 Total Revenues $1.237.173.929 1 292 959 1,371,688.930 L486.556.084 1.556.121.389 EXPENDITURESt� Operating: Legislative $1,148,867 $1,136,896 $1,267,998 1,457,483 $1,572,755 Executive 5,121,254 5,814,781 6,669,070 7,661,418 9,275,984 Law 4,64&025 4,989,558 5,623,140 5,932,831 6,345,988 Finance 20.007,256 21,669,276 23,949,092 23,611,137 27,924,385 Human Resources 4,294,707 5,290,331 6,114,668 7,341,716 9,293,755 Judicial 16,029,171 16,901,046 18,811,256 21,717,049 23,216,452 Health < 3.584,850 3,716,106 3,898,158 4,177,563 4,365,681 Human Services 1 18.939,944 114,223,783 127,902,634 123,374,662 132,475,684 Police 91,283,834 109,068,186 119,029,333 130,448,061 139,099,848 Public Works 77,379,088 81,043,070 88,737,824 97,204,303 100,745,512 Parks and Recreation 14,201,033 14,407,733 15,556,310 35,500,719 38,751,085 Library 17,548,390 17,733,387 19,089,613 20,677,124 22,205,988 Planning 16,845,347 18,115,861 12,257,895 14,001,600 15,820,535 Agriculture 815,896 847,801 907,229 988,094 1,048,016 Economic Development 5,726,907 9,172,817 7,069,218 5,830,817 4,254,376 Convention and Visitor Development 7,781,468 8,391,126 9,497,199 10,461,478 10,880,806 Cultural Affairs 2,810,624 2,801,561 2,957,549 3,228,789 6,120,701 Boards and Commissions - - - Fire 52,625,369 65,593,948 74,752,264 79,822,280 86,364,037 88 2021 2022 2023 2024 2025 Aquariums 10,528,265 11,732,959 13,058,273 14,238,214 15,023,526 General Registrar 2,814,054 2,460,307 3,340,831 4,256,484 4,415,592 General Government 60,406,204 41,942,825 50,871,645 91,581,619 47,252,919 Budget and Management Services 1,176,117 1,149,059 1,229,516 1,270,780 1,638,199 Information Technology 28,133,451 25,828,253 25,013,855 26,872,859 27,540,597 Emergency Communications and Citizen Services 8,887,214 9,606,934 10,601,086 10,730,685 12,298,586 Emergency Medical Services 13,600,548 14,371,504 18,011,224 22,962,268 27,679,841 Housing and Neighborhood Preservation 6,547,267 6,359,423 7,137,522 7,550,407 8,285,126 Lease Payments - - 3,707,313 6,559,503 6,348,514 Subscription Payments - - 3,7 3,519 1,996,116 540,838 Debt Service 51,731,595 53 812 585 51 6 3 48.152,077 64,517,030 Total Expenditures $644.616.745 $829.608.136 $855.302.356 EXCESS OF REVENUES OVER(UNDER) EXPENDITURES 592.557.184624,777,889 $639 243 073 656947.948 $700.813A33 GENERAL FUND = 2021 2022 2023 2024 2025 OTHER FINANCING SOURCES (USES): Revenue/(Payment)Under Sup $(927,264) Agreement $- $- Operating Transfers in 287,483 765,724 727,192 781,910 587,701 Operating Transfers out (5 61,689) (646,168,653) (639,014,800) (668,755,918) (628,325,638) Bond Premiums 29,995 - 715,925 Issuance of Refunded Debt - - - - Leases 334 - 6,123,168 34,537,972 686,277 Subscriptions - 6,096,478 1,803,910 1,338,056 Total Other Financing Sources(Uses)' (548,873,872) (645,372,934) (626,067,962) (630,9169201) (626,640,868) EXCESS OF REVENUES AND OTHER FINANCING SOURCES OVER(UNDER)EXPENDITURES AND OTHER FINANCING 43,683,312 (20,595,045) 13,175,111 26,031,747 74,172,165 FUND BALANCE—JULY 1 305,807,972 349,491,284 328,896,239 342,071,350 368,103,097 FUND BALANCE—JUNE 30 349.491.284 $328,896,239 $342,071,350 $368.103.097 $442.281.262 Source:City of Virginia Beach,Department of Finance. t Includes the transfer for Education/Virginia Beach City Public Schools. 89 The entire General Fund balance is not available for appropriation because of outstanding interfund and interagency loans, prepaid items, encumbrances, and designations for school capital projects. An analysis of the General Fund balance for Fiscal Year 2025 is as follows: Fund Balance-June 30 $442,281,262 Reserved For: Non-spendable Inventories and Loans Receivable $10,747,311 Restricted for Grants 8,721,767 Committed for Education 24,414,171 Assigned amounts for Operations 137,868,910 Assigned amounts for Education 45,559,193 Assigned amounts for Capital Projects 36,528,651 Total Reservations 263,840,003 Unassigned Fund Balance—July 1 178,441.259 Source: City of Virginia Beach,Department of Finance. At the end of Fiscal Year 2025, the fund balance in the, General Fund was $442,281,262. This balance represents an increase of$74,178,165 from the pr us year. The following table presents a comparison of the City's General Fund balance for the Fi ears 2021 through 2025. 2021 2 22 023 2024 2025 General Fund Balance: Non-spendable $10,382,347 $8, 7,296 $9,� ` 0,411 $9,123,751 $10,747,311 Restricted 4,701,470 2,901,470 1,922,110 6,795,589 8,721,767 Committed 16,249.308 15,914,944 15,247,762 14,914,171 24,414,171 Assigned 207,158,449 1�0,959.370 119,364,503 151,052,977 219,956,754 Unassigned 110,999,710 180,383,159 196,086,564 186,216,609 178,441,259 Total General Fund $349,491.284 $342,071,350 368.103.097 $442,281,262 Source: City of Virginia Beach.Department of finance: [Remainder of page intentionally left blank] 90 UNASSIGNED GENERAL FUND BALANCE AS PERCENT OF SUBSEQUENT YEARS BUDGETED REVENUES FISCAL YEARS 2016 THROUGH 2O25 Unassigned General Fund Balance Unassigned General As Percent of Fiscal Fund Balance Subsequent Year's Year June 30 Budgeted Revenues 2016 $107,119,381 10.10% 2017 118,396,300 10.49 2018 114,298,452 9.87 2019 121,304,984 10.18 2020 152,842,932 12.96 2021 110,999,710 9.00 2022 180,383,159 13.50 2023 196,086,564 13.90 2024 186216609 12.65 2025 178:441:25904 11.46 Source: City of Virginia Beach,Department of Finance. 40 Interim Financial Statements as of December 31,2025 (Unaudited) General Fund revenues as of December 31,2025 total $ million and are comparable to the same period in the prior year. Current year revenues-to-date are %of budget,compared to 12.4% of actuals in FY 2025 and 11.5%in FY 2024. General Fund expenditures and transfers total $ _ million, which is % of budget expended or committed as of December 31,2025,compared to %of actuals for FY 2025 and 33.3% for FY 2024. School Operating revenues are tracking satisfactorily compared to the budget,with$336.3 million collected as of December 31, 2025. Current year revenues to date are % of budget and are comparable to the prior two fiscal years(33.8%of actuals in FY 2025 and 33.6%in FY 2024). Expenditures of$ million, or % of budget, are less than the prior two fiscal years (28.6%of actuals in FY 2025 and 29.4%in FY 2024). Highlights of the Adopted Operating Budget for Fiscal Year 2026 The FY 2026 Operating and Capital budgets were adopted on May 13, 2025. The Adopted FY 2026 Operating Budget,which includes the Virginia Beach City Public Schools' Operating Budget, grew by 4.75%when compared to the previous fiscal year's Amended Budget. This increase, while larger than the prior fiscal year,is largely attributable to an increase in user fees to diversify the City's revenue base to ease the reliance on General Fund taxes, while continuing to provide a high level of service. Overall,the FY 2026 Operating Budget meets current demands to the greatest extent possible, while also providing flexibility and a sustainable plan for the future. In January 2025, the City Council held a two-day retreat primarily focused on the City's Capital Improvement Program(CIP). The primary purpose of the Retreat was to provide the City Council with dedicated time to establish priorities and provide guidance to City staff as the FY 2026 CIP was developed. Ultimately,the Council agreed upon several guiding principles and direction for CIP development: fulfill promises while being mindful of current needs; review dedications with healthy balances for possible redirection; consider right sizing project scopes and/or 91 delaying projects by setting realistic expectations;prioritize public safety,transportation,and quality of life by maximizing benefits to residents;being mindful of debt capacity;need for a Law Enforcement Training Academy(LETA);and explore new revenue sources while being mindful of the real estate tax rate. The basis of the Operating Budget and CIP stems from this guidance, along with the direction provided during the FY 2025 Budget Reconciliation to provide the City Council and the public a budget that is sustainable, structurally balanced, and responsive to community needs. Taking City Council direction into consideration, staff took a holistic look at current CIP projects to determine which should be prioritized based on current needs,proximity to construction,funding sources, and funding match requirements. In order to provide sustainable funding for priority capital projects, the Major Projects Fund was re-introduced as part of the FY 2026 budget. Planned projects for the Major Projects Fund include Courthouse Modernization,Indian River Road Safety Improvements,VB Trail Phase I, and the Law Enforcement Training Academy. Future projects to be sVpported by the fund could, with City Council approval,include additional phases of VB Trail,coastal res iency,a 911 Backup Center,and funding for the Aquarium's existing infrastructure rehabilitation. The Major Projects Fund is funded through various new and redirected dedications across multiple revenue streams that when combined generate$21 million in revenue for use as a sustainable bill payer.The revenue is generated by the following funding sources: :a 0.3 cent redirection of the real estate tax from the ARP;a newly established 0.5%meals tax; 0.27% of the current meals tax previously allocated to the Open Space Special Revenue Fund; and a 40%redirection of Town Center Tax Increment Financing(TIF)real estate revenue. The Adopted FY 2026 Net Operating Budget including all funds for both the City and Schools totals $2,785,687,829. The largest portion of resources is dedicated to the City Council priorities of education (44.0%), infrastructure-related departments (13.3%), and public safety (13.5%). The City's Operating Budget of$2.8billion is expresse ' terms of the"net budget." The calculation of the net budget involves eliminating the duplication of funding between interfund transfers and the City's internal service funds. In total,the Adopted Budget adds a net increase of 140.1 positions,44.96 for Virginia Beach City Public Schools, and 95.14 for the City. Of the 95.14 City FTEs, 30.0 positions are firefighter recruits, as directed by the City Council in FY 2024-25. Except for the Fire Department staffing, each position added by the City is offset by either a reduction in staffing from another department,or a dedicated funding source including funding from the Virginia Department of Transportation and Compassionate Billing through Emergency Medical Services. Additional School positions include 15.0 security positions for elementary schools, 19.8 English as a Second Language Teachers, and 12.0 Special Education Assistants, partially offset by the reduction of 32.5 vacant custodial positions. The budget also provides funding to prepare for fuel and energy increases, addresses inflationary pressures on major construction projects, and above all else seeks to maintain services needed and expected by the community. FY 2026 Revenues Total net revenue for the Adopted FY 2026 Budget is $2,785,687,829 a 4.75%increase over the Amended FY 2025 Budget. The table below reflects all major revenue streams included in the Adopted Budget. Though the table lists various taxes as revenue for Virginia Beach City Public Schools(VBCPS), the Schools do not collect tax revenue. These sources are levied and collected by the City of Virginia Beach and remitted via the City and Schools Adopted Revenue Sharing Formula. 92 FY 2026 FY 2025 Total City& Amended FY 2026 FY 2026 Schools % Revenue Category Budget City Budget School Budget Budget Change Real Estate $ 781,096,426 $ 507,191,217 $ 312,035,372 $ 819,226,589 4.88% Personal Property 206,725,457 ; 117,470,051 103,130,983 220,601,034 6.71% General Sales 93,281,986 54,636,686 45,743,367 100,380,053 7.61% Utility Tax 42,327,354 22,955,217 20,153,172 43,108,389 1.85% Automobile License 10,639,555 5,665,563 4,973,992 10,639,555 0.00% Boat License Fee - 2,359,470 - 2,359,470 - I Business License 62,625,915 35,766,164 31,400,341 67,166,505 7.25% Restaurant Tax ( 97,418,174 80,965,233 30,457,610 111,422,843 14.38% Amusement Tax 810671622 9,473,204 - , 9,473,204 17.42% Hotel Room Tax 53,165,843 46,361,023 5,270,971 f 51,631,994 -2.89% Cigarette Tax 7,492,855 4,030,112 ( 2,044,823 61074,935 -18.92% General Fund Balance 3,918,018 2,690,111 - 2,690,111 -31.34% Other Fund Balance 26,740,588 13,189,537 4,355,720 17,545,257 34.39% 1 Utility Fees 188,078,985 205,6117,299 205,647,299 9.34% Other Revenue 162,990,379 161,875,749 35,066,588 196,942,337 20.83% Waste Collection Fee 46,456,207 46,606,207 - 46,606,207 ' 0.32% State Revenue 688,741,353 176,241,588 529,346,068 705,587,656 2.45% Federal Revenue 179,498,217 63,998,416 ! 104,585,975 168,584,391 -6.08% Total Operating Budget $2,659,264,934 $1,557,1 2,847 $ , 28,564,982 $2,785,687,829 4.75% Source:City of Virginia Beach,Department of budget and Management Services [Remainder of page intentionally left blank] 93 FY 2026 Expenditures FY 2025 Total City&Schools FY 2026 Total Amended FY 2026 FY 2026 Schools City&Schools _ Budget City Budget Budget Budget %Change S Change Personnel 1,219,100,619 533,443,869 " 687,621,610 1,221,065,479 0.16% 1,964,860 -------------- ._.____..__ , _ Fringe Benefits 442,957,469 195,556,083 273,746,677 469,302,760 1 5.95% 26,345,291 Operating 640,373,950 471,122,132 189,550,106 660,672,238 ; 3.17% 20,298,288 Expenses Capital & 41,000,832 25,719,463 9,709,520 35,428,983 i -13.59% -5,571,849 Leases } Debt Service 201,26O,327 143,678,096 50,071,611 193,749,707 -3.73% -7,510,620 - — Pay-As-You- 76,473,391 114,068,645 41000,000 118,068,645 54.39% 41,595,254 Go _ Reserves 38,098,346 i 73,534,559 i 13,865,458 87,400,017 129.410N �49,301,671 Total $2,659,264,934 $1,557,122,847 $1,228,564,982 $2,785,687,829 4.75% $126,422,895 I Source:City of Virginia Beach,Department of budget and Management Services The table above provides a high-level overview of each Napprotion category for both the City and the Schools.It is important to note,that within the "Personnel"and"Fringe Benefits"categories, Virginia Beach City Public Schools includes their compensation increases,while the City of Virginia Beach includes these amounts in the"Reserve"category to be allocated.among departments after the beginning of the fiscal year. The main growth category in the FY 2026 Adopted Budget is additional pay-as-you-go funding to the CIP from the Operating Budget. This is related to the establishment of the Major Projects Fund and the reduction of budgeted debt service from a delayed bond sale within the General Fund, creating one-time capacity to redirect$8 million from debt service to Pay-As-You-Go funding. Capital Improvement Program'' The Capital Improvement Program (CIP) covers a six-year period, although only the first year of the Capital Budget is appropriated. It identifies the funding needed for construction of City facilities, replacement and modernization of schools,replacement of utility infrastructure,acquisition of major pieces of equipment and computer systems, construction of roadways, infrastructure maintenance,and economic development projects. The CIP is the result of a process that balances the need for public facilities against the fiscal capability for the City to provide for these needs. Highlights of the Adopted Capital Improvement Program for Fiscal Years 2026—2031 The FY 2026 through FY 2030-31 CIP(including appropriations to date)totals over$5.6 billion. The following table displays the total programmed funding for each section of the CIP, including appropriations to date. 94 FY 2026 Capital Remaining Years of Appropriated Program Capital Program Programmed CIP Sections to Date Budget Year 1 Budget Years 2-6 Funding Buildings&Assets 321.123.468 77.342.129 183,002,032 581,467,629 Coastal Projects 134,303,821 12,029,575 325 184,059,687 Economic&Tourism Development 467,955,257 36,941,362 27,589,595 532,486,214 Flood Protection 735,093,864 21,145,123 17,422,000 773,660,987 Information Technology 167,812,066 22,386,696 71,911,035 262,109,797 Parks&Recreation 196,612,569 64,782,870 98,726,333 360,121,772 Roadways 659,873,070 68,075,554 263,812,406 991,761,030 Schools 475,130,016 71,300,000 309,000,000 855,430,016 Sewer Utility 188,080,415 27,285,0 145,033,000 360,398,415 Stormwater 333,528,424 29,1; T001 147,320,005 509,9929430 Water Utility 124,652,426 16,449,000 4,283,000 215,384,426 Total Capital Projects $3,804,165,396 $446,881,310 $1,375,825,697 $5,626,872,403 The Adopted CIP includes major construction and in tructure maintenance projects, as well as other projects to address City Council's priorities of public safety and stormwater management, improve the road network and playgrounds throughout the City, implement new information technology initiatives, modernize schools,and more. The table above illustrates programmed funding for each section of the CIP, including appropriations to date. Means of Financing the CIP d' As the following table illustrates. sources of bonds account for the majority (44.9%) of financing in the six-year capital improvement program. The two main types of bonds that are used in the general government CIP are Charter Bonds, which are general obligation bonds backed by the full faith and credit of the City, and Public Facility Revenue bonds, which are appropriations backed debt. The strategy of financing the CIP has been to use bonds as the final option once all other sources have been exhausted to minimize the impact of debt service costs.However, it is still necessary to use bonds to accomplish major projects,such as the construction of schools,major building projects,and roads.This CIP includes$206.9 million of debt financing budgeted in FY 2026. Pay-As-You-Go financing (pay-go), accounts for 28.4% of the financing for the six-year programmed Capital Budget.Pay-go is cash financing from various funds.Utilizing pay-go ensures the city avoids more costly debt financing. This CIP continues pay-go financing for Council approved real estate dedications for the Outdoor Initiative,Recreation Center maintenance, and Special Service Districts. The FY 2026 CIP is 14.8%supported by fund balance, of which the majority is from the General Fund.This increased availability of fund balance is a direct result of better-than-expected revenue collection during the pandemic and available due to attrition savings. The City's fund balance policy is to maintain a fund balance in the General Fund between 8% and 12% of the following year's estimated revenues. The Adopted Budget estimated the fund balance at the end of FY 2025 would be 9.95%;however,at the end of 95 FY 2025 the City's Unassigned Fund Balance as a percent of the subsequent year's budgeted revenues was 11.5%. CIP Means of Total Programmed Financing Year 1 Years 2-6 Funding Pa -as- ou- o $118,068,645 $399,121,739 $517,190,384 Bonds 206,890,968 611,973,714 818,864,682 Fund Balance 65,543,132 203,820,269 269,363,401 State Contribution 22,382,740 62,893,059 85,275,799 Federal Contribution 12,280,000 72,625,184 84,905,184 Other 21,715,825 25,391,732 47,107,557 Total $446,881,310 $1,375,825,697 $1,822,707,007 Source:City of Virginia Beach,Department of budget and Management Services Insurance The City utilizes a combination of commercial insurance and self- ance to protect its assets, including employees, money, securities, and buildings and equipment. City uildings and their contents are covered by an all-risk property insurance program which is written with a $250,000 per occurrence deductible. Other types of property insurance are written with deductibles ranging from$1,000 to$50,000 and include coverage for items such 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 liability,commercial general liability,public officials'liability and police professional liability claims. The Cityhas$20,000,000 of commercial insurance coverage above this self-insured retention on these lines of risks. The City is also primarily self-insured for workers' compensation claims of any non-presumptive claims totaling $1,500,000 in any single occurrence,and esumptive claims totaling$2,000,000 in any single occurrence. Commercial coverage is purchased for l is 'n excess up to$25,000,000. City's Risk Management Fund had a cash balance of$56,482,049 as of June 30, 20252025. This amount, plus the FY 2026 budgeted departmental contributions, is expected to be sufficient for expected drawdowns during the course of the current fiscal year. The most recent actuarial study conducted by the firm of Pinnacle Actuarial Resources determined that as of June 30, 2025 the undiscounted liability for current claims against the City was$44,174,901. Commitments and Contingencies The City is a named defendant in litigation filed by parties concerning alleged personal injuries, property damage, and other causes of action. The City is vigorously defending all cases and expects no losses will be incurred,which would have a material effect on the City's financial position. The City participates in multiple federal and state grants, entitlements, and shared revenues programs. These programs are subject to program compliance audits by the applicable federal or state agency or its representatives.Furthermore,Federal grant programs in which the City participates have been audited in accordance with the provisions of the Office of Management 2 CFR 200,Uniform Administrative Requirements. The amounts, if any, of expenditures which may be disallowed by these audits cannot be 96 determined at this time although the City expects such amounts,if any,would not have a material adverse effect on the City's financial position. On May 24, 2016, the City entered into a use and support agreement with Southeastern Public Service Authority of Virginia(SPSA). Under this agreement, effective January 1, 2018, which continues until June 2027, the City agreed to use SPSA's solid waste disposal system to dispose of solid waste generated within and collected by the City.For this service,the City agreed to pay tipping fees to SPSA. The total remaining capacity as of January 1,2025,of the permitted cells at the City landfill is 1.55 million tons. Total usage to date has been estimated at 3.9 million tons. Estimated remaining life of the landfill, based on current fill rates is 15 years for the existing developed capacity and 65 years for the permitted capacity. As of January 1, 2025, approximately 71 percent(by tonnage) of the permitted landfill has been used. Based on a May 2025 analysis, the present value of the estimated cost for both closure and post- closure care is $22,106,466, an amount based on landfill capacity usedo date. Until another cell of the landfill is opened, no additional estimated closure and post-closure care costs will be recognized, except for the effects of inflation, changes in landfill conditions, chap "n estimates, changes in technology or changes in laws or regulations.This amount is reflected in th vernment-wide financial statements. The City is required by law to submit a worksheet that demons the ability to fund landfill closure and post- closure care costs. The Environmental Trust Funds were established gh agreements between the City, Suffolk and SPSA which include the Suffolk Environmental Trust F n and the Virginia Beach Environmental Trust Fund.The purpose of these accounts is to provide for all costs relating to legal suits and other similar claim activity relating to environmental ollution that are made against the Regional Landfill and the Virginia Beach Landfill during a thi ear period after cessation of each landfill's operation. The City's proportionate share of the f ,held SPSA,total$355,490 as of June 30,2025. Retirement and Pension Plans Plan Description. The City has ele d to participate in the Virginia Retirement System("VRS"), and substantially all the full-time salaried general government and school employees are covered by a retirement plan,group term life insurance,and disability and death benefits upon employment. The City is a separate cost-sharing pool within VRS and makes contributions based on biennial rates set by VRS' actuarial calculations of the annual required contributions. The VRS Basic Benefit is a lifetime monthly benefit based on a retirement multiplier as a percentage of the member's average final compensation multiplied by the member's total service credit. For members hired before July 1, 2010,the monthly benefit is based on 1.7%(1.85% for hazardous duty employees) of the member's 36 consecutive months of highest compensation. For non-hazardous duty members hired or rehired on or after July 1, 2010 and members who were not vested on January 1, 2013, the monthly benefit is based on 1.65%of the member's 60 consecutive months of highest compensation. Effective January 1, 2014,all new employees without prior VRS service are required to enroll in the VRS Hybrid Plan except for sworn personnel,a combination of defined benefit and defined contribution plans. The Hybrid Plan, introduced to address future affordability, lowered the retirement multiplier and increased the number of months used to calculate the average final compensation. Funding Policy. Plan members are required by Title 51.1 of the Code of Virginia (1950), as amended, to contribute 5.00% of their creditable compensation toward their retirement, which up until 97 July 1, 2012 was paid by the City as permitted by VRS. In another step taken by VRS to ensure future affordability, as of July 1, 2012, new employees were required to pay the 5% member-contribution. In addition, for existing employees, employers were required to begin making the employee pay the 5% member-contribution. This was being phased in over a period of 5 years from FY 2013—FY 2017,and the City provided salary increases equal to the amount of the increase in the employee-paid member- contribution in each of the five years as required by VRS. In addition,the City and School Board are required to contribute the remaining amounts necessary to fund their participation in the VRS using the actuarial basis specified by the Code of Virginia as determined by VRS' actuaries and approved by the VRS Board of Trustees.The City and the School Board have never failed to make the contribution required by VRS.The City's contractually required contribution rate for the year ended June 30,2025 was 18.98%of covered employee compensation. For FY 2025(latest data available), the City's employer contribution was $82.4 million. The contractually required contribution rate for the year ended June 30,2025 for the School Board Professional and Non-Professional categories were 14.21% and 8.28% of annual covered payroll or $72.3 million and $5.2 million, respectively. Net Pension Liability. As of June 30, 2024(latest data available),_the City reported a net pension liability of$437.7 million.As of the same date,the School 130110dreporteMiket pension liability of$462.4 million($447.6 million for Professional plan and$14.8 million for the Non- essional retirement plan). For additional information on the retirement and ension plan please see Note 14 in the City's audited financial statements for the period endin June 30, 025, attached as Appendix A to this Official Statement. vl� Other Postemployment Benefits �,, Plan Description. The City and School Board participate in multiple Other Postemployment Benefit ("OPEB") plans. One is single-employer, defined benefit plan, administered by the City and School Board in accordance with Commonwealth and City statutes.Section 15.2-1500 of the Virginia State Code provides that every locality shall provide for the governmental functions of the locality, including employment of the officers and other employees. In accordance with Article 8, Chapter 15, Subtitled II of Title 15.2 of the Virginia Code,the City and School Board have elected to establish a trust for the purpose of accumulating and investing assets to fund OPEB. The City and School-Board in accordance with this election have joined the Virginia Pooled OPEB Trust Fund which investsunds contributed by each participating employer. It does not administer the retiree health benefits of each participating employer. Deposits to this trust are irrevocable and are held solely for the payment of OPEB benefits for the City and School Board. In addition, the City and School Board participates in multiple OPEB plans each of which are multiple-employer, cost-sharing plans that are administered by VRS in accordance with Commonwealth and City statutes. These plans include;Group Life Insurance program,Line of Duty Act program,Virginia Local Disability program,and the Health Insurance Credit program. Funding Policy. Contribution requirements of the City and School Board and plan members are established and may be amended by the respective legislative bodies. For the period ending June 30, 2025 (latest available data),the City and School Board contributed$12.1 million and$19.4 million,respectively, in aggregate for all the OPEB plans. 98 Net OPEB Liability. As of June 30,2025(latest available data),the City reported a total net OPEB liability of$15.0 million.As of the same date,the School Board reported a total net OPEB liability of$62.8 million. For additional information regarding each individual plan please see Note 15 in the City's audited financial statements for the period ending June 30,2025,attached as Appendix A to this Official Statement. Employee Relations and Collective Bargaining As authorized in the FY 2026 Adopted Budget, there were 7,740.82 full-time equivalent City employees and 10,669.21 School Board employees. Some employees are members of unions or trade or professional associations. The General Assembly has repealed a prohibition on collective bargaining by public employees, and this legislation was signed by the Governor on April 22, 2020. This repeal was effective May 1, 2021. The legislation is permissive and does not require local governments to allow collective bargaining. In addition,the legislation does not set forth the ollective bargaining framework. The governing board of a local government can by resolution or ordinart a allow collective bargaining. If collective bargaining is authorized then a local ordinance is required setting for the rules of collective bargaining including but not limited to number of bargaining units, topics subject to collective bargaining, certification and decertification of exclusive bargaining representatives, and local government rights. An ordinance permitting collective bargaining cannot include provisions that restrict City Council's authority to establish a budget and appropriate funds. Regardlesvof whether the City Council adopts an ordinance or resolution permitting collective bargaining,under Vir 'nia Law,public employees of Virginia or of any county, city, or town in Virginia do not have a legal right to strike. Any such employee who engages in any organized strike or willfully refuses to perform his/her du' s shall, according to Virginia law, be deemed to have terminated his/her employment. Thereafter s employee would be ineligible for employment in any position or capacity during the'next 12 months. The General Assembly took up bills to change the rules for collective bargain 2025 Session,but the former Governor vetoed the bills that passed the House of Delegates and the State Senate. ere is the possibility that Democratic majorities in the House of Delegates and State Senate take up legislation in the upcoming 2026 General Assembly,which have a higher likelihood of success with the change in the Governorship). The ultimate outcome of such legislation is not known at this time. Regional Transportation Funding Legislation House Bill 2313 (2013 Va.Acts Chapter 766)signed into law on April 3,2013,and effective July 1, 2013, remains a cornerstone of Virginia's transportation funding framework. While the legislation increased transportation funding statewide,it also established a dedicated regional funding mechanism for the Hampton Roads Region, including the City of Virginia Beach. Revenues generated through additional sales and motor fuels taxes are deposited into the Hampton Roads Transportation Fund(HRTF)and may only be used for new construction projects on new or existing highways,bridges,and tunnels in the region. In 2014,the Hampton Roads Transportation Accountability Commission(HRTAC)was created to manage and allocate these funds. Since 2015, HRTAC has advanced a multi-billion-dollar program of projects including widening segments of 1-64, expanding the Hampton Roads Bridge Tunnel, and improving regional mobility. These investments have provided sustained economic benefits to the construction industry,and as projects are completed,the enhanced transportation network continues to support tourism and hospitality industries that rely on Virginia Beach's role as one of the East Coast's most popular drivable destinations. As of 2025,the regional transportation taxes established under HB 2313 have generated over $5 billion in dedicated revenue for the Hampton Roads Transportation Fund(HRTF),with the City of Virginia Beach share exceeding$800 million.These revenues continue to finance major highway,bridge,and tunnel 99 projects across the region:widening of I-64 is complete,easing congestion and connecting Newport News, Hampton,and Williamsburg more efficiently;the 1-64/1-264 interchange has been modernized,including a new flyover and expanded Witchduck Road,making daily commutes smoother and safer;the 164 Southside Widening and High Rise Bridge project is nearing completion,delivering a$527 million upgrade that will open new lanes and reduce bottlenecks; the $3.9 + billion Hampton Roads Bridge Tunnel Expansion is underway and will double tunnel capacity and open to traffic in 2027, transforming one of the nation's busiest corridors. Looking ahead,Hampton Roads continues to plan for the next generation of projects:Bowers Hill Interchange advanced design is underway to untangle one of Chesapeake's most congested choke points; remaining quadrants of the 1-64/I-264 interchange will fully resolve congestion hotspots at this critical regional gateway; I-264 Interchange at Independence Boulevard improvements will modernize ramps and expand capacity at one of Virginia Beach's busiest access points,connecting Town Center,neighborhoods, and the resort area. [Remainder of page ihtentio ly left blank 100 SECTION SIX: MISCELLANEOUS Delivery The Bonds are offered for delivery when, as and if issued, subject to the approval of validity by Bond Counsel and to certain other conditions referred to herein. It is expected that the Bonds will be available for delivery at the expense of the City through the facilities of DTC on or about[March 5],2026. Official Statement This Preliminary Official Statement has been approved and authorized by the City for use in connection with the sale of the Bonds. Its purpose is to supply information to prospective buyers of the Bonds. Financial and other information contained in this Preliminary Official Statement has been prepared by the City from its records, except where other sources are noted. The information contained in this Preliminary Official Statement is not intended to indicate future or co tinuing trends in the financial or economic position of the City. Neither this Preliminary Official State nt nor any statement which may have been made verbally or in writing is to be construed as a contr ith the holder of the Bonds. All quotations from and summaries and explanations ws con d in this Preliminary Official Statement do not purport to be complete,and reference is m o said laws 11 and complete statements of their provisions. Any statements in this Preliminary Official Statement`involving matters of opinion or estimates, whether or not expressly so stated,are intended -such and not resentations of fact. No representation is made that any of the estimates will be realized. The attached Appendices are an integral part of this Preliminary Official Statement and must be read together with the balance of thi eliminary Official Statement. vi The delivery of this Prelim Official Statement has been duly authorized by the City Council. The City has deemed this inary Official Statement final as of its date within the meaning of Rule 15c2-12,except for omis of information permitted to be omitted by such rule. CITY OF VIRGINIA BEACH,VIRGINIA By: City Manager 101 APPENDIX A AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30,2025 APPENDIX B FORM OF BOND COUNSEL OPINION Q B-1 APPENDIX C FORM OF CONTINUING DISCLOSURE AGREEMENT N FORM OF CONTINUING DISCLOSURE AGREEMENT This CONTINUING DISCLOSURE AGREEMENT dated as of[March_]2026(the"Disclosure Agreement"),is executed and delivered by the City of Virginia Beach,Virginia(the"City"),in connection with the issuance by the City of its $ General Obligation Public Improvement Bonds, Series 2026A [and its $ General Obligation Public Improvement Refunding Bonds, Series 2026B] (together,the"Bonds"). The City hereby covenants and agrees as follows: Section 1. Purpose. This Disclosure Agreement is being executed and delivered by the City for the benefit of the holders of the Bonds and in order to assist the purchasers of the Bonds in complying with the provisions of Section(b)(5)(i) of Rule 15c2-12 (the "Rule") promulgated by the Securities and Exchange Commission(the "SEC") by providing certain annual financial information and event notices required by the Rule(collectively,"Continuing Disclosure"). Section 2. Annual Disclosure. (a) The City shall provide annually certain c ' formation and operating data in accordance with the provisions of Section(b)(5)(i)of the Rul follow . (i) audited financial statements o City epared in ccordance with generally accepted accounting principles;and (ii) the operating data with respect to the Ci of the type described in the subsection of Section Five of the City's Official Statement dated ,2026,entitled"Operating Data." If the financial statements filed pursuant to Section 2(a)(i)are not audited,the City shall file such statements as audited when available. (b) The City shall provide annually the financial information and operating data described in subsection(a) above(collectively,the"Annual Disclosure")within 180 days after the end of the City's fiscal year, commencing N ith the City's fiscal year ending June 30, 2026, to the Municipal Securities Rulemaking Board(the"MSRB") utilizing its Electronic Municipal Market Access("EMMA") System or such other system designated by the MSRB. (c) Any Annual Disclosure may be included by specific reference to other documents previously provided to the MSRB or filed with the SEC; provided, that any final official statement incorporated by reference must be available from the MSRB. (d) The City shall provide in a timely manner to the MSRB notice specifying any failure of the City to provide the Annual Disclosure by the date specified. Section 3. Event Disclosure. The City shall provide in a timely manner not in excess of ten(10) business days after the occurrence of the event to the MSRB through the EMMA system notice of the occurrence of any of the following events with respect to the Bonds: (a) principal and interest payment delinquencies; (b) non-payment related defaults,if material; (c) unscheduled draws on debt service reserves reflecting financial difficulties; C-1 (d) unscheduled draws on credit enhancement reflecting financial difficulties; (e) substitution of credit or liquidity providers,or their failure to perform; (f) adverse tax opinions,the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; (g) modifications to rights of Bond holders, if material; (h) bond calls,if material,and tender offers; (i) defeasances; (j) release, substitution, or sale of property se Ag repayment of the Bonds, if material; (k) rating changes; (1) bankruptcy,insolvency,receiv<<igated ' ilar event the City; Note to paragraph(1): For the purposes of the ev paragraph(1),the event is considered to occur when any of the following occur: The appointment of a receiver,fiscar officer for an obligated person in proceeding under the U.S.Bankruptcy Code or in any other proceeding unde a or aw in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or bus "� 9bf person,or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority,or the entry er confirming a plan of reorganization,arrangement or liquidation by a court or governmental authority having supe n o sdiction over substantially all of the assets or business of the obligated person. (m) the consummatio of a merger,consolidation or acquisition involving the City or sale of all or substantially all-of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material;and (n) appo t of a successor or additional trustee or the change of name of a trustee, if material. (o) incurrence of a financial obligation of the City, if material, or agreement to covenants,events of default,remedies,priority rights,or other similar terms of a financial obligation of the City,any of which affect security holders, if material;and (p) default, event of acceleration, termination event, modification of terms, or other similar events under the terms of the financial obligation of the City, any of which reflect financial difficulties. The term"financial obligation"means a(i)debt obligation; (ii)derivative instrument entered into in connection with,or pledged as security or source of payment for,an existing or planned debt obligation; or(iii)guarantee of(i) or(ii). The term"financial obligation' shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. C-2 Section 4. Termination. The obligations of the City will terminate upon the redemption, defeasance(within the meaning of the Rule)or payment in full of all the Bonds. Section 5. Amendment. The City may modify its obligations hereunder without the consent of Bondholders, provided that this Disclosure Agreement as so modified is supported by an opinion of independent counsel with expertise in federal securities laws to the effect that such amendment complies with or does not violate the Rule as it exists at the time of modification.The City shall within a reasonable time thereafter send to the MSRB a description of such modification(s). Section 6. Defaults. (a) If the City falls to comply with any covenant or obligation regarding Continuing Disclosure specified in this Disclosure Agreement, any holder(within the meaning of the Rule)of Bonds then outstanding may,by notice to the City, proceed to protect and enforce its rights and the rights of the holders by an action for specific performance of the City's covenant to p ovide the Continuing Disclosure. (b) Notwithstanding anything herein to the contrary,any failure of the City to comply with any obligation regarding Continuing Disclosure specified in this Disclosure Agreement (i)shall not be deemed to constitute an event of default under the Bonds a resolution providing for the issuance of the Bonds and(ii)shall not give rise to any right or remedy er than that described in Section 6(a)above. Section 7. Additional Disclosure. The City in o me to time disclose certain information and data in addition to the Continuing Disclosure.Notwithst ng anything herein to the contrary,the City shall not incur any obligation to continue to pro to up uch additional information or data. Section 8. Counterparts. This Disclos a may be executed in several counterparts each of which shall be an original and ch constitute but one and the same instrument. Section 9. Governing . os Agreement shall be construed and enforced in accordance with the laws of the Co a rginia. Y OF VIRGINIA BEACH,VIRGINIA By City Manager, City of Virginia Beach,Virginia C-3 APPENDIX D INFORMATION REGARDING THE DEPOSITORY TRUST COMPANY AND ITS BOOK-ENTRY SYSTEM r 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 Bonds,payments of principal of, premium, if any, and interest on the 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 Bonds and other bond-related transactions by and between DTC, Participants and Beneficial Owners is based solely on information furnished by DTC. The Depository Trust Company("DTC"),New York,New York,will act as securities depository for the Bonds. The Bonds will be issued as fully-registered bonds and notes 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 certificate for the Bonds will be issued fo each maturity as set forth on the cover page of this Official Statement,each in the aggregate principal unt of such maturity, and will be deposited with DTC. DTC, the world's largest depository, is a limited-purpose trust company organized under the New York Banking Law, a"banking organization"within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a"clearing agency"registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade-settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S.and non-U.S.securities brokers and dealers,banks,trust companies,clearing corporations,and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation("DTCC"). DTCC is the holding company for DTC National Securities Clearing Corporation and Fixed Income Clearing Corporation,all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant,either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond(`Beneficial Owner")is in turn to be recorded on the Direct and Indirect Participants'records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings,from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. D-1 To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee,Cede&Co.,or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede&Co.or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them,subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC i ) wi nsent or vote with respect to the Bonds unless authorized by a Direct Participant in acco ce with DT s MI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to is of ' ations such as the Bonds as soon as possible after the record date. The Omnibus Proxy assi & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are cr d on the record date(identified in a listing attached to the Omnibus Proxy). �J Principal and interest payments on the Bo �bde to Cede& Co., or such other nominee as may be requested by an authorized r entative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the City,on payable date in accordance with their respectiv `holdings shown on DTC's records. Payments by Direct and Indirect Participants to Beneficial Owners will be governed'by standing instructions and customary practices, as is the case with securities held;for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Direct or Indirect Participant and not of DTC or the City,subject to any statutory or regula ry requirements as dray be in effect from time to time. Payment of principal and interest to Cede&Co.(or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indir ct Participants. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the City. Under such circumstances, in the event that a successor securities depository is not obtained,Bond certificates are required to be printed and delivered. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. The City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, either a successor securities depository will be selected by the City or Bond certificates will be prepared,executed and delivered as set forth in the Indenture of Trust. D-2 In the event of insolvency of DTC, if DTC has insufficient securities in its custody (e.g., due to theft or loss)to satisfy the claims of its Direct Participants with respect to deposited securities and is unable by application of (i)cash deposits and securities pledged to DTC to protect DTC against losses and liabilities, (ii)the proceeds of insurance maintained by DTC and/or its Direct Participants or Indirect Participants, or (iii)other resources, to obtain securities necessary to eliminate the insufficiency, no assurances can be given that Direct Participants will be able to obtain all of their deposited securities. THE CITY HAS NO 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,PREMIUM,IF ANY,AND INTEREST ON THE BONDS; (C)THE DELIVERY OR TIMELINESS OF DELIVERY BY ANY DIRECT OR INDIRECT PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER THAT IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE RESOLUTION TO B GIVEN TO BONDHOLDERS; OR (D)ANY OTHER ACTION TAKEN BY DTC, OR ITS MINEE, CEDE & CO., AS BONDHOLDER, INCLUDING THE EFFECTIVENESS OF A TION TAKEN PURSUANT TO AN OMNIBUS PROXY. So long as Cede&Co.is the registered owner of the' onds,as nom of DTC,references in this Official Statement to the Owners of the Bonds shall m Cede o. and sh 11 not mean the Beneficial Owners,and Cede&Co.will be treated as the only holder of Bo ds for all purposes under the Resolution. The City may enter into amendments to the agreement DTC or successor agreements with a successor securities depository relating to the book-entry system t e maintained with respect to the bonds without the consent of Beneficial Owners or Bondholders. Air D-3 APPENDIX E [SUMMARY OF REFUNDED BONDS] u�• (L+,Sti� s Ji ` J `�VVrv� CITY OF VIRGINIA BEACH AGENDA ITEM ITEM: An Ordinance to Authorize One Full-Time Position within the FY 2025-26 Operating Budget of the Department of Emergency Medical Services MEETING DATE: January 6, 2026 ■ Background: The Department of EMS Pharmacy Program manages the acquisition, storage, distribution, and accountability of hundreds of medications used in prehospital emergency care for all Emergency Medical Services affiliated response units. In addition to the Department, these units include the volunteer rescue squads and the Fire Department. Over the past several years, increased regulatory complexity, frequent national drug shortages, and expanding clinical protocols have significantly increased program demands. A full-time EMS pharmacist will be responsible for regulatory compliance, medication procurement, inventory control, pharmacological protocols, quality assurance and provider education. This position will directly support the Medical Director and Emergency Medical Services Chief in ensuring safe, cost-effective, and compliant medication management. Additionally, the pharmacist will work with affiliated response units to reduce risk of medication errors and ensure clinical accuracy in all pharmacology protocols. The Council authorized funding for the pharmacy program in FY 2024. Since that time, pharmacy management functions have been supported by EMS chief officers, paramedics, and administrative personnel. ■ Considerations: The Department of EMS anticipates the total compensation to be approximately $200,000 for the pharmacist. The Department will cover this expense in the current fiscal year and beyond through EMS cost recovery. ■ Public Information: Normal Council Agenda process. ■ Attachments: Ordinance Recommended Action: Approval Submitting Department/Agency: Emergency Medical Services City Manager: Mv 1 AN ORDINANCE TO AUTHORIZE ONE FULL-TIME 2 POSITION WITHIN THE FY 2025-26 OPERATING BUDGET 3 OF THE DEPARTMENT OF EMERGENCY MEDICAL 4 SERVICES 5 6 BE IT ORDAINED BY THE COUNCIL OF THE CITY OF VIRGINIA BEACH, 7 VIRGINIA, THAT: 8 9 One full-time position, a pharmacist, is hereby authorized within the FY 2025-26 10 Operating Budget of the Department of Emergency Medical Services. This position is to 11 be supported by EMS cost recovery. Adopted by the Council of the City of Virginia Beach, Virginia on the day of , 2026. APPROVED AS TO CONTENT: APPROVED AS TO LEGAL SUFFICIENCY: Budget and Management Services Cit or ey's Office CA17074 R-1 December 16, 2025 CITY OF VIRGINIA BEACH AGENDA ITEM ITEM: An Ordinance to Appropriate Fund Balance from the Chesopeian Colony Dredging Special Service District Special Revenue Fund to Capital Project #100277 "Chesopeian Colony Neighborhood Dredging II" for Design Costs MEETING DATE: January 6, 2026 ■ Background: The Chesopeian Colony area contains a neighborhood navigation channel funded through the Chesopeian Colony Neighborhood Dredging Special Service District (NDSSD). Residents of this NDSSD pay an extra 29.13 cents per $100 of assessed value of real estate tax to fund dredging activities. The Chesopeian Colony NDSSD's expenditures are captured in Capital Project #100277 "Chesopeian Colony Neighborhood Dredging II." Real estate revenue related to the tax surcharge is retained by the SSD fund until needed within the capital project. When needed, the funds are transferred as pay-go funding. In the Adopted Capital Improvement Plan, the cost of design services for the project was estimated to be $227,000. However, the actual design costs have totaled $723,432. The cost of design was first budgeted when the project was adopted in FY 2020-21, and engineering services have seen significant inflation since originally estimated. To fund design services, the Department of Public Works requests that the additional cost, $496,432, be appropriated from the fund balance of the Chesopeian Colony NDSSD Special Revenue Fund. Separately, Public Works staff has initiated a petition process to add thirteen properties to this NDSSD. Once the petitions have been received, the City Council will receive an update by CCSR followed by required public hearing and vote to change the boundary. ■ Considerations: The Chesopeian Colony NDSSD Special Revenue Fund currently has an unappropriated cash balance of $769,840.44. Because the NDSSD is fully funded by dedications within the district, the added cost of design will not impact any other capital projects. ■ Public Information: Normal Council agenda process. ■ Recommendations: Adopt the attached ordinance. ■ Attachments: Ordinance, Project Detail Sheet Recommended Action: Approval Submitting Department/Agency: Department of Public Works City Manager: 1 AN ORDINANCE TO APPROPRIATE FUND BALANCE 2 FROM THE CHESOPEIAN COLONY DREDGING 3 SPECIAL SERVICE DISTRICT SPECIAL REVENUE 4 FUND TO CAPITAL PROJECT #100277 "CHESOPEIAN 5 COLONY NEIGHBORHOOD DREDGING II" FOR 6 DESIGN COSTS 7 8 BE IT ORDAINED BY THE COUNCIL OF THE CITY OF VIRGINIA BEACH, 9 VIRGINIA, THAT: 10 11 $496,432 is hereby appropriated, with revenues increased accordingly, from the 12 fund balance of the Chesopeian Colony Dredging Special Service District Special 13 Revenue Fund to the FY 2025-26 Capital Improvement Program for Capital Project 14 #100277 "Chesopeian Colony Neighborhood Dredging II" for design costs. Adopted by the Council of the City of Virginia Beach, Virginia on the day of 12026. Requires an affirmative vote by a majority of all members of the City Council. APPROVED AS TO CONTENT: APPROVED AS TO LEGAL SUFFICIENCY- Budget and Management Services ney's Office CA17076 R-1 December 16, 2025 City of Virginia Beach FY 2026 thru FY 2031 Capital Improvement Program Project: 100277 Title:Chesopeian Colony Neighborhood Dredging II Status:Approved Category:Coastal Department:PUBLIC WORKS Ranking:0 Project Type Project Location Project Type:Rehabilitation/Replacement District:8 Programmed Funding Programmed Appropriated Budgeted Non-Appropriated Programmed CIP Funding Future Funding To Date FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 Funding 1,744,796 0 227'000 1,517,796 0 0 0 0 0 Description and ..- 'his project is for the construction of a neighborhood navigation channel system in the Chesopeian Colony area.The system will include:a City-funded spur :hannel(funded by CIP 100274 Neighborhood Dredging Spur Channels)leading from the Eastern Branch Lynnhaven River channel;a Neighborhood Dredging ipecial Service District(NDSSD)that will fund a neighborhood channel to provide access for all NDSSD participants;and elective,individual access basins for each )articipant.The estimated cost of the initial construction of the individual access basins(to be paid by participants prior to construction)has been included in :he project cost.Work includes design,permitting,property acquisition(if necessary),dredging,navigation aids,and monitoring. Purpose =or we over a eca e,t e i icu ties of removing accumulated sediment have negatively impacted trie City s wate ront omeowner s a i ity to optimize t e ise of their property and to reclaim necessary navigation channels within the Lynnhaven River.Water quality and habitat have also been severely impacted due :o the siltation of the bottomland of the City's water resources.Removal of these shoaling sediments(sands,silts,clays,and organic)has a positive,multi- )eneficial effect.This project was established after 80%of the affected residents agreed to pay an increased real estate tax rate to address the affected channels is part of the Chesopeian Colony NDSSD. History and Current Status Fhis was a new project in the FY 2020-21 CIP and is a continuation of CIP 8-503 Chesopeian Colony Neighborhood Dredging.The NDSSD and the original CIP )roject were established by City Council ordinance on August 13,2013.The NDSSD will run for twenty years,during which three cycles of dredging are anticipated.The SSD rate will be re-evaluated following the completion of each dredging cycle to ensure all the neighborhood dredging costs are paid by the end )f the 20-year period.The current rate in this SSD is 29.13 cents per$100 of valuation.In September of 2024,the City commenced an evaluation of adding 8 new )roperties to join the SSD. Operating Project Map Schedule of Activities Project Activities From-To Amount Design 07/25-06/27 227,000 Construction 07/26-06/27 1,517,796 s �'aaa Total Budgetary Cost Estimate: 1,744,796 Means of Financing �t°L Funding Subclass Amount 'S PAYGO-Chesopeian Colony 1,358,000 Private Contribution 386,796 t Local Funding 0 • 1U0277 Total Funding: 1,744,796 u S u HARDY VALL[Y RD FY 2025-26 TO FY 2030-31 318 CAPITAL IMPROVEMENT PROGRAM CITY OF VIRGINIA BEACH AGENDA ITEM ITEM: An Ordinance to Accept and Appropriate Funds for the Forensic Discharge Planning Program in the Department of Human Services MEETING DATE: January 6, 2026 ■ Background: The Virginia Department of Behavioral Health and Developmental Services (DBHDS) supports a variety of Forensic Discharge Planning initiatives that are managed by the Office of Forensic Services. The goal of these initiatives is to identify individuals diagnosed with serious mental illnesses and co-occurring disorders who are incarcerated and to provide discharge planning with the goal of preventing recidivism by connecting individuals to meaningful services and treatment. Forensic Discharge Planning includes an assessment of psychiatric, medical, social services, employment and residential needs, as well as risk factors. Services include development of an individualized plan, care coordination, and linkage to services upon release. Discharge planning begins as soon as possible upon entry into the jail and is done collaboratively with jail staff in preparation for release. ■ Considerations: DBHDS will provide Department of Human Services with $25,283 in one-time funding for FY2026. The funds are intended to be used for client assistance services that will support successful re-entry into the community. The funds will be disbursed in equal payments throughout the fiscal year following approval. ■ Public Information: Normal Council Agenda Process. ■ Attachments: Ordinance Recommended Action: Approval Submitting Department/Agency: Department of Human Services City Manager: 1 AN ORDINANCE TO ACCEPT AND APPROPRIATE FUNDS 2 FOR THE FORENSIC DISCHARGE PLANNING PROGRAM 3 IN THE DEPARTMENT OF HUMAN SERVICES 4 5 BE IT ORDAINED BY THE COUNCIL OF THE CITY OF VIRGINIA BEACH, 6 VIRGINIA, THAT: 7 8 $25,283 is hereby accepted from the Virginia Department of Behavioral Health and 9 Developmental Services and appropriated, with revenue from the Commonwealth 10 increased accordingly, to the FY 2025-26 Operating Budget of the Department of Human 11 Services for Forensic Discharge Planning programs. Adopted by the Council of the City of Virginia Beach, Virginia on the day of 12026. Requires an affirmative vote by a majority of all members of the City Council. APPROVED AS TO CONTENT: APPROVED AS TO LEGAL SUFFICIENCY: 1 Budget and Management Services orney's Office CA17073 R-1 December 16, 2025 FFo4 ,r., l� 2> CITY OF VIRGINIA BEACH AGENDA ITEM ITEM: An Ordinance to Accept and Appropriate a Donation of $10,203 from the Virginia Beach Police Foundation to the Police Department K-9 Unit MEETING DATE: January 6, 2026 ■ Background: The Virginia Beach Police Department (VBPD) K-9 Unit has received a donation of $10,203 from the Police Foundation. The Police Foundation is donating this money with the intent that it will be used to modify the Police Department's K-9 facility. Laura Coltin, a Virginia Beach resident, is responsible for $10,000 of the donation. Earlier this year her son, a K-9 Officer in another locality, passed away from cancer. Mrs. Colton's wish is to donate these funds to help pay for the modification of the VBPD K-9 range in her son's honor. The remaining funds are donated by the Virginia Beach Police Foundation directly. The Virginia Beach Police Foundation understands that the K-9 range modification involves relocating two fence lines within the K-9 training area and constructing a 24'x41' metal carport-like structure. This structure will shield the K-9's from direct sunlight and heat during the summer. This modification proposal was reviewed and approved by Public Works/Facilities Management. ■ Considerations: This donation of $10,203 serves as the necessary funds for the VBPD K-9 Unit to relocate two fence lines and to build carport-like structure that would serve as sheltered staging or temporary resting spots for dogs and handlers during K-9 specific training or large-scale operations. ■ Public Information: Normal Council Agenda process. ■ Attachments: Ordinance Recommended Action: Approval Submitting Department/Agency: Police Department City Manager: n 1 AN ORDINANCE TO ACCEPT AND APPROPRIATE A 2 DONATION OF $10,203 FROM THE VIRGINIA BEACH 3 POLICE FOUNDATION TO THE POLICE DEPARTMENT K- 4 9 UNIT 5 6 BE IT ORDAINED BY THE COUNCIL OF THE CITY OF VIRGINIA BEACH, 7 VIRGINIA: 8 9 A donation of $10,203 is hereby accepted and appropriated, with revenue 10 increased accordingly, from the Virginia Beach Police Foundation to the Virginia Beach 11 Police Department's FY2025-26 Operating Budget for improvements to the K-9 facility. Adopted by the Council of the City of Virginia Beach, Virginia on the day of , 2026. Requires an affirmative vote by a majority of all of the members of the City Council. APPROVED AS TO CONTENT: APPROVED AS TO LEGAL SUFFICIENCY: Budget and Management Services ey's Office CA17072 R-1 December 16, 2025 NH�t CITY OF VIRGINIA BEACH AGENDA ITEM ITEM: An Ordinance to Transfer Funds within the Water and Sewer Enterprise Fund to Provide a Federal Arbitrage Rebate Payment MEETING DATE: January 6, 2026 ■ Background: For capital improvement projects which cannot be funded by current revenues, the City may opt to issue bonds. In 2020, the City issued $96.7 million in Water and Sewer Revenue Bonds to reimburse prior expenditures, to fund future utility projects, and to take advantage of favorable market conditions. This issuance also refunded bonds from 2010. When issuing tax-exempt bonds, one consideration is the restriction on arbitrage. In general terms, one invests bond proceeds in the interim period prior to spending the funds. However, the bonds are not permitted to accrue interest on proceeds above the bond yield. In the case of the 2020 Water and Sewer Issuance, the bond yield was 1.5061588%. These historically low rates are generally beneficial to the City in executing its Capital Improvement Program, but the dramatic shifts in interest rate environment to combat inflation resulted in the City being required to provide an arbitrage rebate payment. The Finance Department works with a contractor, Bingham Arbitrage Rate Services to track the yield of City bonds and determine what is owed to the IRS as an arbitrage rebate. In its October 2025 Arbitrage Rate Compliance Report, Bingham determined that the City must provide the IRS an arbitrage rebate of $375,921 for the 2020 Water and Sewer Revenue Bonds for the first installment period ending October 22, 2025. In order to pay the arbitrage rebate, the Department of Public Utilities requests a transfer of $375,921 from the budgeted Reserve for Contingencies of the Water and Sewer Enterprise Fund to the fund's debt service accounts. ■ Considerations: These bonds will continue to require arbitrage rate calculation every five years. The next installment period will end no later than October 22, 2030. Depending on future interest rate environments, it may be necessary to make another arbitrage rebate payment. ■ Public Information: Normal Council agenda process. ■ Recommendations: Adopt the attached ordinance. ■ Attachments: Ordinance Recommended Action: Approval Submitting Department/Agency: Department of Public Utilities City Manager: MQ 1 AN ORDINANCE TO TRANSFER FUNDS WITHIN THE 2 WATER AND SEWER ENTERPRISE FUND TO PROVIDE 3 A FEDERAL ARBITRAGE REBATE PAYMENT 4 5 WHEREAS, the City issued Water and Sewer System Revenue Bonds in 6 November 2020; and 7 8 WHEREAS, due to shifting interest rate environments after issuance, the City's 9 yield in holding bond proceeds exceeded allowable arbitrage restrictions for tax exempt 10 debt, and therefore, the City is required to provide an arbitrage rebate payment to the 11 Internal Revenue Service; 12 13 NOW BE IT ORDAINED BY THE COUNCIL OF THE CITY OF VIRGINIA BEACH, 14 VIRGINIA, THAT: 15 16 $375,921 is hereby transferred from the Reserve for Contingencies within the 17 Water and Sewer Enterprise Fund to the Operating Budget of the Water and Sewer 18 Enterprise Fund to provide an arbitrage rebate payment to the Internal Revenue Service. Adopted by the Council of the City of Virginia Beach, Virginia on the day of 12026. APPROVED AS TO CONTENT: APPROVED AS TO LEGAL SUFFICIENCY: ��, "n� 4 B dget and Wanagement Services torney s Office CA17075 R-1 December 16, 2025 K. APPOINTMENTS • ARTS AND HUMANITIES COMMISSION • AUDIT COMMITTEE • BAYFRONT ADVISORY COMMISSION • BEACHES AND WATERWAYS ADVISORY COMMISSION • CLEAN COMMUNITY COMMISSION • COMMUNITY POLICY AND MANAGEMENT TEAM • COMMUNITY SERVICES BOARD • DEFERRED COMPENSATION BOARD • EASTERN VIRGINIA REGIONAL INDUSTRIAL FACILITY AUTHORITY • HEALTH SERVICES ADVISORY BOARD • HISTORIC PRESERVATION COMMISSION • OPEN SPACE ADVISORY COMMITTEE • PARKS AND RECREATION COMMISSION • PUBLIC LIBRARY BOARD • RESORT ADVISORY COMMISSION • VIRGINIA BEACH CANNABIS ADVISORY TASK FORCE • VIRGINIA BEACH COMMUNITY DEVELOPMENT CORPORATION • WETLANDS BOARD L. UNFINISHED BUSINESS M. NEW BUSINESS N. ADJOURNMENT OPEN DIALOGUE For non-agenda items, each speaker will be allowed three minutes. If you are physically disabled or visually impaired and need assistance at this meeting, please call the City Clerk's Office at 757-385-4303. The full Agenda with all backup documents can be viewed in the eDocs Document Archive under: Current Session. If you would like to receive an email with a list of the agenda items for future City Council meetings, please submit your request to TChelius@vbgov.com or call 757-385-4303. AGENDA ITEMS Citizens who wish to speak can sign up either in-person or virtually via WebEx. Anyone wishing to participate virtually, must follow the two-step process provided below: 1. Register for the WebEx Meeting. 2. Register with the City Clerk's Office by calling 757-385-4303 prior to 5:00 p.m. on January 6, 2026. J CITY OF VIRGINIA BEACH A R SUMMARY OF COUNCIL ACTIONS C O K S B H S S E C U O S DATE: 12/09/2025 PAGE: 1 R U T N H C L M H C R A H W U M E H G E M R U I C I D N E R M M O L L C N Y L S E 1 O U M S AGENDA H G E E O E C N S A O ITEM# SUBJECT MOTION VOTE I S R Y N N K D E N N 1. CITY COUNCIL'S BRIEFING A. AUDITED FINANCIAL RESULTS FOR THE Wendy Hu,Interim FISCAL YEAR ENDED JUNE 30,2025 Director—Finance Shelby Brown,Audit Manager—Cherry Bekaert Advisory,LLC Kevin Kielbasa, Controller—Finance II.-V. CERTIFICATION OF CLOSED SESSION CERTIFIED 10-0 Y A Y Y Y Y Y Y Y Y Y A-F G. MINUTES APPROVED 9-0 A A Y Y Y Y Y Y Y Y Y B s 1. INFORMAL AND FORMAL SESSIONS- T November 25,2025 A I N E D U. Ordinance to DESIGNATE as EXEMPT from ADOPTED,BY 10-0 Y A Y Y Y Y Y Y Y Y Y Local Property Taxation re Echoes of Healing CONSENT 1.2. Ordinance to DESIGNATE as EXEMPT from ADOPTED,BY 10-0 Y A Y Y Y Y Y Y Y Y Y Local Property Taxation re Foodbank of CONSENT Southeastern Virginia 1.3 Ordinance to DESIGNATE as EXEMPT from ADOPTED,BY 10-0 Y A Y Y Y Y Y Y Y Y Y Local Property Taxation re Maverick Learning CONSENT Center 1.4. Ordinance to DESIGNATE as EXEMPT from ADOPTED,BY 10-0 Y A Y Y Y Y Y Y Y Y Y Local Property Taxation re Philippine Nurses CONSENT Association of Virginia 1.5. Ordinance to DESIGNATE as EXEMPT from ADOPTED,BY 10-0 Y A Y Y Y Y Y Y Y Y Y Local Property Taxation re Protecting Paws in CONSENT Peril I.6. Ordinance to DESIGNATE as EXEMPT from ADOPTED,BY 10-0 Y A Y Y Y Y Y Y Y Y Y Local Property Taxation re Quality of Life,Inc. CONSENT 1.7. Ordinance to DESIGNATE as EXEMPT from ADOPTED,BY 10-0 Y A Y Y Y Y Y Y Y Y Y Local Property Taxation re the Micro-Nonprofit CONSENT Network,Inc. I.8. Ordinance to AMEND the FY 2025-26 Capital ADOPTED,BY 10-0 Y A Y Y Y Y Y Y Y Y Y Improvement Program(CIP)for Flood Protection CONSENT 1.9. Ordinance to AUTHORIZE the City Manager to ADOPTED,BY 10-0 Y A Y Y Y Y Y Y Y Y Y EXECUTE a lease of City-Owned property for up CONSENT to five(5)years with Back Bay Wildfowl Guild, Inc. at 1113 Atlantic Avenue re the deWitt Cottage 1.10. Ordinance to DIRECT the City Manager to ADOPTED,BY 10-0 Y A Y Y Y Y Y Y Y Y Y implement changes to Oceanfront parking and to CONSENT AUTHORIZE within the Department of Public Works FY 2025-26 Parking Enterprise Fund Operating Budget one(1)full-time position 1.11. Ordinance to AMEND Section 21-322 and ADOPTED,BY 10-0 Y A Y Y Y Y Y Y Y Y Y REPEAL Section 21-323 of the City Code re CONSENT metered parking 1.12. Ordinance to AMEND City Code Section 21-230 ADOPTED,BY 10-0 Y A Y Y Y Y Y Y Y Y Y re traffic calming at Timberlake Drive CONSENT J CITY OF VIRGINIA BEACH A R SUMMARY OF COUNCIL ACTIONS C O K S B H S S E C U O S DATE: 12/09/2025 PAGE: 2 R U T N H C L M H C R A H W U M E H G E M R U I C I D N E R M M O L L C N Y L S E I O U M S AGENDA H G E E O E C N S A O ITEM# SUBJECT MOTION VOTE I S R Y N N K D E N N I.13. Ordinance to ELIMINATE the loan repayment ADOPTED,BY 10-0 Y A Y Y Y Y Y Y Y Y Y obligation from various volunteer rescue squads CONSENT for loans provided prior to November 2024 1.14. Resolution to ADOPT the 2025 Disaster Recovery ADOPTED,BY 10-0 Y A Y Y Y Y Y Y Y Y Y Plan CONSENT 1.15. Ashdon Builders 1,LLC for an APPEAL to the WITHDRAWN,BY 10-0 Y A Y Y Y Y Y Y Y Y Y Historical Review Board decision to deny CONSENT application Certificate of Appropriateness re #25-12 to install white vinyl fencing in the North Landing Estates development for the properties at 2508-2524 Peaceful Lane DISTRICT 2—(deferred from September 16,2025) APPLICANT REQUESTS WITHDRAWAL J.1. PROSPER HOMES&INVESTMENTS,LLC APPROVED/ 10-0 Y A Y Y Y Y Y Y Y Y Y for a Variance to Section 4.4(b) of Subdivision CONDITIONED,BY Regulations re lot width and street line frontage CONSENT at 2453 Beaufort Avenue DISTRICT 9 J.2. BRIAN PATRICK MOONEY&AMBER APPROVED/ 10-0 Y A Y Y Y Y Y Y Y Y Y MARIE MOONEY for a Change in CONDITIONED,BY Nonconformity re modify front elevation CONSENT and roof, add a raised pool deck and retaining walls, and relocate mechanical equipment at 2618 West Chubb Lake Avenue DISTRICT 9 J.3. CESJB II,LLC for a Modification of Conditions APPROVED/AS 10-0 Y A Y Y Y Y Y Y Y Y Y to a Conditional Use Permit re short term rental MODIFIED/ at 409 2411 V:Street DISTRICT 6 CONDITIONED,BY CONSENT JA STEPHEN ALEXANDER HOMES, LLC / APPROVED/AS 10-0 Y A Y Y Y Y Y Y Y Y Y PRINCESSBORO DEVELOPMENT PROFFERED,BY COMPANY,INC.for a Conditional Change of CONSENT Zoning from AG-1 &AG-2 Agriculture District to Conditional R-10 Residential District re develop fourteen(14)single-family residential lots on the parcel south of 1925 Fisher Arch DISTRICT 2 J.5. LYNNHAVEN STATION CONDOMINIUM APPROVED/AS 10-0 Y A Y Y Y Y Y Y Y Y Y ASSOCIATION BY GLOBAL CINEMATIC PROFFERED,BY SOCIETY, LLC & HARBOUR CONSENT INVESTMENTS, LLC / GLOBAL CINEMATIC SOCIETY,LLC,&HARBOUR INVESTMENTS,LLC for a Conditional Change of Zoning 0-2 Office District to Conditional B-2 Community Business District at 101&105 North Lynnhaven Road,Unit 105 DISTRICT 3 JA BRIANNA QURESHI—STUDIO CITRINE, APPROVED/ 10-0 Y A Y Y Y Y Y Y Y Y Y LLC/HOLLAND OFFICE PARK,LLC for a CONDITIONED,BY Conditional Use Permit re beauty salon at 4510 CONSENT Holland Office Park,Suite 507 DISTRICT 3 J CITY OF VIRGINIA BEACH A R SUMMARY OF COUNCIL ACTIONS C O K S B H S S E C U O S DATE: 12/09/2025 PAGE: 3 R U T N H C L M H C R A H W U M E H G E M R U I C I D N E R M M O L L C N Y L S E I O U M S AGENDA H G E E O E C N S A O ITEM# SUBJECT MOTION VOTE 1 S R Y N N K D E N N J.7. STEPHEN BRUCE/REGENT UNIVERSITY APPROVED/ 9-0 Y A A Y Y Y Y Y Y Y Y for Conditional Use Permits re indoor/outdoor CONDITIONED,BY s s recreational facilities to develop athletic and CONSENT T fitness complex at 1328, 1352, 1354, 1424,and A 1446 Regent University Drive DISTRICT 7 I N E D J.8. ROBERT MILLS / ONE PERFECT DAY, APPROVED/ 10-0 Y A Y Y Y Y Y Y Y Y Y LLC for a Conditional Use Permit re short term CONDITIONED,BY rental at 303 Atlantic Avenue, Unit 1503 CONSENT DISTRICT 5 J.9. Ordinance to AMEND Section 105 of the City APPROVED.BY 10-0 Y A Y Y Y Y Y Y Y Y Y Zoning Ordinance (CZO) pertaining to CONSENT Nonconformities K. APPOINTMENTS RESCHEDULED B Y C O N S E N S U S AUDIT COMMITTEE BAYFRONT ADVISORY COMMISSION CLEAN COMMUNITY COMMISSION COMMUNITY SERVICES BOARD DEFERRED COMPENSATION BOARD EASTERN VIRGINIA REGIONAL INDUSTRIAL FACILITY AUTHORITY HEALTH SERVICES ADVISORY BOARD HISTORIC PRESERVATION COMMISSION OPEN SPACE ADVISORY COMMITTEE PUBLIC LIBRARY BOARD RESORT ADVISORY COMMISSION VIRGINIA BEACH CANNABIS ADVISORY TASK FORCE WETLANDS BOARD MILITARY ECONOMIC DEVELOPMENT Appointed: 10-0 Y A Y Y Y Y Y Y Y Y Y ADVISORY COMMITTEE Vanessa L.Christie Unexpired term thru 2/29/2028 L. UNFINISHED BUSINESS M. NEW BUSINESS N. ADJOURNMENT 6:19 PM