HomeMy WebLinkAboutFEBRUARY 11, 1992 MINUTES
C:)f iL@i"
"WORLD'S LARGEST RESORT CITY"
ciTy COLJNCIL
,@y.@ M@YE- @ O.EM@-,
jo@N
J"ES @ B@l@R, JR,
@OB@ll w @1.1-
.1 IITI H.,L UIL@l";
.UNI@IP" C@N.R
]-E, CITY COUNCIL AGENDA VI@l;l ... .....
FEBRUARY 11, 1992
ITEM 1. FORMAL SESSION - Council Chamber - 2:00 PM
A. CALL TO ORDER - Mayor Meyera E. Oberndorf
B. INVOCATION: Rabbi Israel Zoberman
Congregation Beth Chaverim
C PLEDGE OF ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA
D. ELECTRONIC ROLL CALL OF CITY COUNCIL
E. CERTIFICATION OF EXECUTIVE SESSION
F. MINUTES
1. INFORMAL & FORMAL SESSION - February 4, 1992
G. CONSENT AGENDA
All matters I i sted under the Consent Agenda are cons i dered in the
ordi nary course of bus iness by Ci ty Councii an d wi II be enacted by
one motion in the form listed. if an item is removed trom the Consent
Agenda, it will be discussed and voted upon separately.
1. Resolution directing the Planning Commission recommend to City
Council a proposed Amendment to the Site Plan Ordinance ADDING
Section 5.2 re on-site pavement requirements for apartments and
condominiums.
2. Ordinance declaring a .19 acre parcel, situated on Kellam Road, as
EXCESS property; and, authorizing the City Manager to convey same
to the Lewis Family Partnership.
3. Ordinance authorizing tax refunds in the amount of $2,318.38.
H. RESOLUTIONS/ORDINANCES
1. Water and Sewer Master Revenue Bond Resolution authorizing the
issuance ot Water and Sewer System Revenue Bonds from time to time.
2. a. FIRST SUPPLEMENT to the Water and Sewer Master Revenue Bond
Resolution providing for the ISSUANCE and SALE of $19,975,000
Water and Sewer System Revenue Bonds, Series of 1992, of the
City of Virginia Beach, Virginia, providing for the form,
details and payment thereof, financing the cost of improvements
to the City's water and sanitary sewer facilities.
b. Resolution awarding the SALE of $19,975,000 Water and Sewer
System Revenue Bonds, Series of 1992, of the City ot Virginia
Beach, Virginia, heretofore authorized; and, directing the City
Manager to execute the Bond Purchase Agreement and the
Preliminary Official Statement.
3. a. Ordinance establishing an interim program for the conservation
of the public water supply re Lake Gaston Pipeline Project.
b. Ordinance to TRANSFER $100,000 from the Water and Sewer Reserve
to Public Utilities Operating Budget re water conservation.
1. PUBLIC HEARING
1. PLANNING BY CONSENT
a. Application of NEW HOPE CHURCH tor a Conditional Use Permit for
a church on the South side of Moores Pond Road, 650 feet East
of Baker Road (5641 Moores Pond Road), containing 3.314 acres
(BAYSIDE BOROUGH).
Recommendation: WITHDRAWAL
b. Application of BETTY D. LONG for a Variance to Section 4.4(b)
of the Subdivision Ordinance which requires all lots created by
subdivision meet all requirements of the City Zoning Ordinance,
at 1476 Shoveller Lane (LYNNHAVEN BOROUGH).
Recommendation: APPROVAL
c. Application of PROVIDENCE DEVELOPMENT CORPORATION for a
Variance to Section 4.4(d) ot the Subdivision Ordinance which
requires all lots created by subdivision have direct access to
a public street, Parcel G-l-B (4.980 acres) and Parcel G-1-C
(0.795 acres), East ot Newtown Road and South of Baker Road
(BAYSIDE BOROUGH).
Recommendation: APPROVAL
2. PLANNING
a. Petition of SOL W. COHEN for the discontinuance. closure and
abandonment of a portion of CroE, an R,,d at @he Northeast
intersection ot Croatan Road and General Booth Boulevard,
containing 17,824 square feet (LYNNHAVEN BOROUGH).
Recommendation: APPROVAL
b. Application of INDIAN RIVER GOLFORAMA, INC. for a Conditional
Use Permit for a recreational facility of an outdoor nature
(golf drivina ranq( vidence oa
480 feet more or less East of South Military Highway,
containing 18.5 acres (KEMPSVILLE BOROUGH).
Recommendation: APPROVAL
c. Application ot JUDEO-CHRISTIAN OUTREACH SHELTER, INC. for a
Conditional Use Permit for a home on the South side of
Virginia Beach oulevard, East of Birdneck Road (1049 and
1053 Virginia Beach Boulevard), containing 41,382 square feet
(LYNNHAVEN BOROUGH).
Recommendation: APPROVAL
J. UNFINISHED BUSINESS
1. LOW BID:
CONTRACTORS PAVING Flanagan's Lane $946,274.05
(CIP 2-134)
Deferred: February 4, 1992
K. NEW BUSINESS
1. COUNCIL-SPONSORED ITEMS:
a. Resolution approving the continuation of a free standing mobile
home in the Agricultural District at 944 Princess Anne Road
(PUNGO BOROUGH).
(Sponsored by Councilman Paul J. Lanteigne)
b. Ordinance to AMEND and REORDAIN Section 2-90 of the Code of the
City of Virginia Beach re restrictions on certain political
activities by Clty employees.
(Sponsored by Councilman Paul J. Lanteigne)
L. ADJOURNMENT
SCHEDQLE
FY 1992-1993 OPERATING BUDGET
City Council Chamber
TUESDAY, MARCH 3i, 1992 2:00 PM
**SPECIAL FORMAL SESSION**
PRESENTATION
TUESDAY, APRIL 7, 1992 10:00 AM
WORKSHOP
TUESDAY, APRIL 14, 1992 10:00 AM
WORKSHOP
THURSDAY, APRIL 16, 1992 7:00 PM
**SPECIAL FORMAL SESSION**
PUBLIC HEARING
Green Run High School Auditorium
TUESDAY, APRIL 28, 1992 (Time to be determined)
WORKSHOP
THURSDAY, APRIL 30, 1992 7:00 PM
**SPECIAL FORMAL SESSION**
PUBLIC HEARING
Princess Anne High School Auditorium
THURSDAY, MAY 7, 1992 10:00 AM
RECONCILIATION WORKSHOP
TUESDAY, MAY 12, 1992 2:00 PM
APPROPRIATION ORDINANCES
COUNCIL SESSIONS CANCELLED
MAY 5, 1992
CITY COUNCIL ELECTION DAY
2/6/92 lbs
M I N U T E S
VIRGINIA BEACH CITY COUNCIL
Virginia Beacti, Vlrginla
February 11, 1992
Mayor Meyera E. Oberndorf called to order the FORMAL SESSION of the VIRGINIA
BEACH CITY COUNCIL in the Council Chambers, City Hall Building, on Tuesday,
February 11, 1992, at 2:00 P.M.
Council Members Present:
John A. Baum, James W. Brazier, Jr., Robert W.
Clyburn, Vice Mayor Robert E. Fentress, Harold
Heischober, Louis R. Jones, Paul J. Lanteigne, Reba S.
McClanan, Mayor Meyera E. Oberndorf, Nancy K. Parker
and William D. Sessoms, Jr.
Council Members Absent:
None
INVOCATION: Rabbi Israel Zoberman
Congregation Beth Chaverim
PLEDGE OF ALL
- 2 -
Item I-E.l.
CERTIFICATION OF
EXECUTIVE SESSION ITEM # 35327
Certification was not necessary as no EXECUTIVE SESSION was held.
3
Item I-F. 1.
MINU,fEs ITEM 35328
Upon motion by Vice Mayor Fentress, seconded by Councilman Sessoms, City
Council APPROVED the Minutes of the INFORMAL & F'ORMAL SESSIONS of February 4,
1992.
Voting: 10-0
Council Members Voting Aye:
James W. Brazier, Jr., Robert W. Clyburn, Vice Mayor
Robert E. Fentress, Harold Heischober, Louis R. Jones,
Paul J. Lanteigne, Reba S. McClanan, Mayor Meyera E.
Oberndorf, Nancy K. Parker and William D. Sessoms, Jr.
Council Members Voting Nay:
None
Council Members Abstaining:
John A. Baum
Council Members Absent:
None
Councilman Baum ABSTAINED as he was not in attendance during the City Council
Session of February 4, 1992.
4
Item I-G.l.
CONSENT AGENDA ITEM 35329
Upon motion by Councilman Heischober, seconded by Councilman Clyburn, City
Council APPROVED in ONE MOTION Items 1, 2 and 3 of the CONSENT AGENDA.
Voting: 11-0
Council Members Voting Aye:
John A. Baum, James W. Brazier, Jr., Robert W.
Clyburn, Vice Mayor Robert E. Fentress, Harold
Heischober, Louis R. Jones, Paul J. Lanteigne, Reba S.
McClanan, Mayor Meyera E. Oberndorf, Nancy K. Parker
and William D. Sessoms, Jr.
Council Members Voting Nay:
None
Council Members Absent:
None
5
Item I-G.l.
CONSENT AGENDA ITEM 35330
Upon motion by Councilman Heischober, seconded by Councilman Clyburn, City
Council ADOPTED:
Resolution directing the Planning Commission
recommend to City Council a proposed Amendment to
the Site Plan Ordinance ADDING Section 5.2 re on-
site pavement requirements for apartments and
condominiums-
Voting: 11-0
Council Members Voting Aye:
John A. Baum, James W. Brazier, Jr., Robert W.
Clyburn, Vice Mayor Robert E. Fentress, Harold
Heischober, Louis R. Jones, Paul J. Lanteigne, Reba S.
McCianan, Mayor Meyera E. Oberndorf, Nancy K. Parker
and William D. Sessoms, Jr.
Council Members Voting Nay:
None
Council Members Absent:
None
A RESOLUTION DIRECTING THE PLANNING
COMMISSION TO CONSIDER AND MAKE ITS
RECOMMENDATION TO THE CITY COUNCIL
CONCERNING PROPOSED AMENDMENT TO
THE CITY SITE PLAN ORDINANCE
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
VIRGINIA BEACH, VIRGINIA:
That the proposed amendment to Section 5.2 of the City
Site Plan Ordinance pertaining to on-site pavement for apartments
and condominiums, a copy of which amendment is attached hereto, is
hereby referred to the Planning Commission, which is requested to
make its recommendation to City Council within _ days of the
date of this Resolution.
ADOPTED BY THE CITY COUNCIL OF THE CITY OF VIRGINIA
BEACH, VIRGINIA, on the 11 day of February 1992.
APPROVED AS TO CONTENTS
SIGNAnM
DEPARTMFNT
1 AN ORDINANCE TO AMEND AND REORDAIN
2 THE SITE PLAN ORDINANCE BY ADDING
3 THERETO SECTION 5.2 PERTAINING TO ON
4 SITE PAVEMENT REQUIREMENTS FOR
5 APARTMENTS AND CONDOMINIUMS
6 BE IT ORDAINED BY THE COUNCIL OF THE CITY OF VIRGINIA
7 BEACH, VIRGINIA that the Site Plan Ordinance is hereby amended and
8 reordained by adding Section 5.2 as follows:
9 5.2 In addition to 5.1 above, condominium and apartment
10 developments shall have on-site pavement design and improvements
11 based upon soil boring information and design methods commonly
12 acceipted by the CitV Engineer. Also, the developer and/or
13 landowner shall Provide to the City Engineer a certification from
14 a professional engineer duly licensed by the Commonwealth of
15 V-irginia to practice as such, that on-site tylpical pavement
16 sections are consistent with the approved site Plan design
17 specifications and that standard pavement construction Practices
18 were followed.
19 ADOPTED BY THE COUNCIL OF THE CITY OF VIRGINIA BEACH,
20 VIRGINIA on the day of 1992
APPROVF-:D@A@ q
LEOAL
6
Item I-G.2.
CONSENT AGENDA ITEM 35331
Upon motion by Councilman Heischober, seconded by Councilman Clyburn, City
Council ADOPTED:
Ordinance declaring a .19 acre parcel, situated on
Keliam Road, as EXCESS property; and, authorizing
the City Manager to convey same to the Lewis Family
Partnership.
Voting: 11-0
Council Members Voting Aye:
John A. Baum, James W. Brazier, Jr., Robert W.
Clyburn, Vice Mayor Robert E. Fentress, Harold
Heischober, Louis R. Jones, Paul J. Lanteigne, Reba S.
McClanan, Mayor Meyera E. Oberndorf, Nancy K. Parker
and William D. Sessoms, Jr.
Council Members Voting Nay:
None
Council Members Absent:
None
1 AN ORDINANCE DECLARING CERTAIN
2 PROPERTY EXCESS AND AUTHORIZING THE
3 CITY MANAGER TO DISPOSE OF SAME
4 WHEREAS, the City of Virginia Beach acquired ownership of
5 the following described property by recordation of a plat in Map
6 Book 48, at page 7, and
7 WHEREAS, that the City of Virginia Beach, after proper
8 notice applied to the City council of the CitY of Virginia Beach,
9 Virginia, to have the following described property closed, vacated
10 and discontinued as a public road of the CitY of Virginia Beach,
11 and
12 WHEREAS, the City Council closed, vacated and
13 discontinued as a public road of the City of virginia Beach by
14 ordinance duly enacted on March 20, 1978 the following described
15 property, and
16 WHEREAS, the City Council is of the opinion that the
17 following described property is in excess of the needs of the City
18 of virginia Beach;
19 NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY
20 OF VIRGINIA BEACH, VIRGINIA:
21 1. That the following described property is hereby
22 declared to be in excess of the needs of the City of Virginia Beach
23 and that the City Manager is authorized to convey said property in
24 the manner he deems in the best interests of the City of Virginia
25 Beach reserving therein any and all easements pertaining thereto.
26 All that certain portion of Kellam Road
27 containing 0.19 acres, as is shown and
28 designated by the shaded area on the certain
29 plat entitled, "Plat Showing Street Closure
30 For A Portion of Kellam Road, Kempsville
31 Borough, Virginia Beach, Virginia, Scale lip =
32 501, November 3, 1977, Department of Public
33 Works, Engineering Division, City of Virginia
34 Beach, Virginia," which plat is on file in the
35 Department of Public works, Real Estate
36 Division, of the City of Virginia Beach.
3 7 2 . Lewis Family Partnership shall re-subdivide and
38 incorporate the subject property into the adjacent lands owned by
39 the Partnership. The LeWis Family Partnership shall bear all costs
40 associated with the replatting of the Property.
41 3. This ordinance shall be effective from the date of
42 its adoption.
43 A three-quarters Council vote is required for adoption of
44 this ordinance.
45 Adopted by the Council of the City of Virginia Beach,
46 virginia, on the 11 day of February 1992.
47 CA4564-ORD
48 R-2
&FPROVED AS Tg CONTEt4TS
DE ARTM
APPROVED AS TO LEGAL
SUFFICIENCY AND FORM
I
TY A@ORNEY
7
I tem I -G. 3.
CONSENT AGENDA ITEM 35332
Upon motion by Counci Iman Heischober, seconded by Counci Iman Clyburn, City
Council ADOPTED:
Ordinance authorizing Tax Refunds in the amount of
$2,318.38 upon appl ication of certain persons and
upon certification of the City Treasurer for
payment.
Voting: 11-0
Council Members Voting Aye:
John A. Baum, James W. Brazier, Jr., Robert W.
Clyburn, Vice Mayor Robert E. Fentress, Harold
Heischober, Louis R. Jones, Paul J. Lanteigne, Reba S.
McClanan, Mayor Meyera E. Oberndorf, Nancy K. Parker
and William D. Sessoms, Jr.
Council Members Voting Nay:
None
Council Members Absent:
None
FORM NO. C.A. 7 1 /31 /92 EMC
AN ORDINANCE AUTHORIZING TAX REFUNDS
UPON APPLICATION OF CERTAIN PERSONS
AND UPON CERTIFICATION OF THE TREASURER
FOR PAYMENT
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF VIRGINIA BEACH, VIRGINIA:
That the following applications for tax refunds upon certification of the Treasurer are hereby approved:
NAME Tax Type Ticket Exonera- D a!e Penalty lnt. Total
Year of Tax Number tion No. p aid
Life Savings Bank 92 RE(1/2) 61890-4 12/5/91 137.19
Life Savings Bank 92 RE(1/2) 70874-5 12/5/91 49.05
Mary & James Brockenbrough 92 RE(1/2) 13397-3 12/5/91 104.23
Gerald P & Maropia Domme 92 RE(]/2) 30597-5 12/2/91 12.18
Anson R & Anna Hyde 92 RE(1/2) 55323-3 12/5/91 52.85
Melvin L Horne 92 RE(1/2) 53500-3 11/22/91 26.16
Va Marine Science Museum 90 RE(1/2) 117481-1 11/14/89 87.93
Va Marine Science Musuem 90 RE(2/2) 117481-1 5/15/90 87.93
Va Marine Science Museum 90 RE(1/2) 116157-6 11/14/89 170.98
Va Marine Science Musuem 90 RE(2/2) 116157-6 5/15/90 170.98
Va Marine Science Museum 89 RE(]/2) 114120-8 12/5/88 155.55
Va Marine Science Museum 89 RE(2/2) 114120-8 5/16/89 155.55
Va Marine Science Musueln 89 RE(1/2) 115354-2 11/15/88 82.35
Va Marine Science Museum 89 RE(2/2) 115354-2 5/16/89 82.35
Va Marine Science Museum 91 RE(]/2) 118796-8 11/19/90 92.88
Va Marine Science Museum 91 RE(2/2) 118796-8 5/20/91 92.88
Va Marine Science Museum 91 RE(1/2) 117437-5 11/19/90 196.08
Va Marine Science Museum 91 RE(2/2) 117437-5 5/20/91 196.08
Sovran Mortgage Co 91 RE(1/2) 72482-6 11/27/90 5.16
Sovran Mortgage Co 91 RE(2/2) 72482-6 6/5/91 5.16
Sovran Mortgage Co 90 RE(1/2) 71281-2 12/5/89 9.77
Sovran Mortgage Co 90 RE(2/2) 71281-2 6/5/90 9.77
Sovran Mortgage Co 89 RE(1/2) 70107-9 11/29/88 9.15
Sovran Mortgage Co 89 RE(2/2) 70107-9 5/24/89 9.15
Sovran Mortgage Co 90 RE(1/2) 119292-6 12/5/89 68.48
Sovran Mortgage Co 90 RE(2/2) 119292-6 6/5/90 68.48
Sam B Archbell 89 RE(1/2) 3191-7 12/2/88 41.18
Sam B Archbell 89 RE(2/2) 3191-7 6/5/89 41.18
Sam B Archbell 90 RE(1/2) 3119-3 12/5/89 48.85
Sam B. Archbell 90 RE(2/2) 3119-3 6/5/90 48.85
Total 2,318.38
This ordinance shall be effective from date of adoption.
The ap@,vll atement(s) totaling C(
v 38 were approved by
the Council of the City of Virginia
Beach on the 1 1 day of uar . 1992 i-o asurer -
Approved as to form:
Ruth Hodges Smith
City Clerk -
@e.i
8
Item I-H. 1.
RESOLTJTIONS/ORDINANCES ITEM 35333
J. Chester Johnson, President - Government Finance Associates, Inc. , advised
his opinion of the effect of the proposed interim program recommendations,
made by the Department of Public Utilities and derived from the Water Supply
System Status Report, on the marketability of the initial issue of the City's
new water and sewer revenue bond program. Mr. Johnson's letter of February 7,
1992, was distributed to City Council and is hereby made a part of the record.
Mayor Oberndorf referenced the Opinion from Standard & Poor's: "Virginia Beach,
Virginia's rating reflects the diverse stability of the service area economy
and the strong projected coverage of future revenue bond debt service. However,
the rating is precluded from the 'AA' category due to uncertainty concerning
the adequacy of future water supplies."
Upon motion by Vice Mayor Fentress, seconded by Councilman Sessoms, City
Council ADOPTED:
Water and Sewer Master Revenue Bond Resolution
authorizing the issuance of Water and Sewer System
Revenue Bonds from time to time.
Voting: 11-0
Council Members Voting Aye:
John A. Baum, James W. Brazier, Jr., Robert W.
Clyburn, Vice Mayor Robert E. Fentress, Harold
Heischober, Louis R. Jones, Paul J. Lanteigne, Reba S.
McClanan, Mayor Meyera E. Oberndorf, Nancy K. Parker
and William D. Sessoms, Jr.
Council Members Voting Nay:
None
Council Members Absent:
None
*Councilman Sessoms DISCLOSED pursuant to Section 2.1-639.14(C) of the Code of
Virginia, he was currently an officer of Central Fidelity Bank earning a salary
in excess of $10,000 annually. After the City Council Session of February 11,
1992, Councilman Sessoms was advised by the City Attorney that Central Fidelity
Bank was selected as fiscal agent by a committee of staff personnel utilizing
competitive procedures. Within the body of bond documents which were approved,
and in particular the Master Water and Sewer Revenue Bond Resolution and the
First Supplement to that resolution, there were two obscure references to
Central Fidelty Bank and language which indicated Council's approval of the
prior selection of Central Fidelity Bank as the "fiscal agent" for the sale of
water and sewer revenue bonds. Councilman Sessoms had no knowledge this
reference was in these documents which were quite voluminous. Councilman
Sessoms' vote on the two referenced bond resolutions remains in the
affirmative; however, he requested his abstention to the aspects of those two
resolutions which refer to Central Fidelity Bank or the approval of CFB as
fiscal agent. Councilman Sessoms' letter of February 20, 1992, is hereby made a
part of the record.
Cit@@f -Vii-g4iraiEt
WILLIAM D. SESSOMS, JR, 809 (3REENTREE ARCH
COUNCILMAN-AT-LARGE VIRGINIA BEACH, VIRGINIA 23@51
455 5732
February 20, 1992
Mrs. Ruth Hodges Smith, CMC/AAE
City Clerk
Municipal Center
Virginia Beach, VA 23456
Re: Disclosure Pursuant to SS 2.1-639.14(C), Code of Virginia
Dear Mrs. Smith:
The City Attorney has brought to my attention this afternoon that within the body
of bond documents which were approved at Council's regularly scheduled meeting of
February 11, 1992, and in particular the Master Water and Sewer Revenue Bond Resolution
and the First Supplement to that resolution, there were two obscure references to Central
Fidelity Bank ("CFB") and language which indicated Council's approval of the prior selection
of CFB as the "fiscal agent" for the sale of water and sewer revenue bonds. I had no
knowledge that this reference was in these documents which were quite volumidous.
I am further advised by the City Attorney that CFB was selected as fiscal agent by
a committee of staff personnel utilizing competitive bidding procedures. I did not participate
in that transaction in any manner and as aforementioned was completely unaware that there
was reference to CFB in the Master Water and Sewer Bond Resolution and the First
Supplement Resolution. In that regard and as you are aware from previous disclosures
which I have filed with your office, I have a "personal interest" in Central Fidelity Bank by
virtue of my position as an officer of CFB earning a salary in excess of $10,000 annually.
I am informed by the City Attorney that due to this position, I also have for the purposes
of the Conflict of Interests Act a personal interest in the contract with CFB as that term is
defined in the Conflict of Interests Act.
Due to my personal interest in the contract, the City Attorney has advised me that
I am required to disqualify myself from participation in Council's approval of Central Fidelity
Mrs. Ruth Hodges Smith, CMC/AAE -2- February 20, 1992
Bank as fiscal agent and to disclose the existence of my personal interest in the transaction.
Unfortunately, because the selection of Central Fidelity Bank was not the subject of the
transaction pending before the Council, I was unaware until today that approval of the
resolutions also referenced approval by the Council of the prior selection of CFB as the
fiscal agent for the bonds.
The purpose of this letter is to formally disclose my personal interest in Central
Fidelity Bank, request that this letter be placed with the February 11, 1992 minutes of
Council, and that my vote on the two referenced bond resolutions remain in the affirmative;
however, I request that you note my abstention to the aspects of those two resolutions which
refer to Central Fidelity Bank or the approval of CFB as fiscal agent. Those references
were incidental to the main purpose of the transaction and I am advised by the City
Attorney and Commonwealth's Attorney that in light of this inadvertent oversight, this action
is the appropriate means to assert my compliance with the law.
Thank you for your assistance and cooperation in this matter.
Very truly yours,
s, Jr.
Councilmember
WDSjr/a,Aj
Advised by:
I-esli-e L Lilley
City Attorney
Seen and Concurred:
Robert A. Hunip]
Commonwealth's
CITY OF VIRGINIA BEACH, VIRGINIA
MASTER WATER AND SEWER REVENUE BOND RESOLUTION
PROVIDING FOR THE ISSUANCE FROM TIME TO TIME OF
ONE OR MORE SERIES OF WATER AND SEWER SYSTEM
REVENUE BONDS OF THE CITY OF VIRGINIA BEACH
ADOPTED ON FEBRUARY 11, 1992
TABLE OF CONTENTS
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 101. Definitions . . . . . . . . . . . . . . . . 1
Section 102. Rules of Construction . . . . . . . . . . . 12
Section 103. Resolution To Constitute contract . . . . . 12
ARTICLE II
EXECUTION, AUTHENTICATIO14, REGISTRATION AND FORM OF BONDS
Section 201. Form and Details of Bonds . . . . . . . . . 13
Section 202. Execution of Bonds . . . . . . . . . . . . . 13
Section 203. Authentication of Bonds . . . . . . . . . . 13
Section 204. Registration and Exchange of Bonds; Persons
Treated as owners . . . . . . . . . . . . . 13
Section 205. Charges for Exchange of Bonds . . . . . . . 14
Section 206. Temporary Bonds . . . . . . . . . . . . . . 14
Section 207. Mutilated, Lost or Destroyed Bonds . . . . . 14
Section 208. Cancellation and Disposition of Bonds . . . 15
Section 209. Non-Presentment of Bonds . . . . . . . . . . 15
ARTICLE III
ISSUANCE OF BONDS
Section 301. Purposes of Bonds . . . . . . . . . . . . . 16
Section 302. Parity of Bonds . . . . . . . . . . . . . . 16
Section 303. Subordinate Debt . . . . . . . . . . . . . . 16
Section 304. Conditions of Issuing Bonds . . . . . . . . 16
Section 305. Use of Proceeds of Bonds for Project . . . . 20
Section 306. Use of Proceeds of Bonds for Refunding . . . 21
ARTICLE IV
REDEMPTION OF BONDS
Section 401. Redemption Provisions To Be Fixed by
Supplemental Resolution . . . . . . . . . . 22
Section 402. Notice of Redemption . . . . . . . . . . . . 22
ARTICLE V
CUSTODY AND APPLICATION OF BOND PROCEEDS
Section 501. Construction Fund . . . . . . . . . . . . . 23
Section 502. Cost of Project . . . . . . . . . . . . . . 2 3
Section 503. Payments from Construction Fund . . . . . . 24
Section 504. Disposition of Balance in Construction Fund 24
ARTICLE VI
REVENUES AND FUNDS
Section 601. Revenue Covenant . . . . . . . . . . . . . . 25
Section 602. Annual Operating Budget . . . . . . . . . . 25
Section 603. Funds and Accounts . . . . . . . . . . . . . 26
Section 604. Revenue Fund . . . . . . . . . . . . . . . . 27
Section 605. Revenue Bond Fund . . . . . . . . . . . . . 29
Section 606. Parity Double Barrel Bond Fund . . . . . . . 31
Section 607. Parity Debt Service component Fund . . . . . 31
Section 608. Debt Service Reserve Fund . . . . . . . . . 31
Section 609. Subordinate Debt Fund . . . . . . . . . . . 32
Section 610. Renewal and Replacement Account . . . . . . 32
Section 611. Capital Improvement Account . . . . . . . . 33
Section 612. Residual Account . . . . . . . . . . . . . . 33
Section 613. Payments in Aid of Construction . . . . . . 34
Section 614. other Funds and Accounts . . . . . . . . . . 34
Section 615. Pledge of Revenues and Certain Funds and
Accounts . . . . . . . . . . . . . . . . . . 34
ARTICLE VII
SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS
Section 701. Security for Deposits . . . . . . . . . . . 35
Section 702. Investment of Moneys . . . . . . . . . . . . 35
Section 703. Investment of Surplus Moneys . . . . . . . . 38
Section 704. Valuation of Investments . . . . . . . . . . 38
Section 705. Investments Through Fiscal Agent's Bond
Department . . . . . . . . . . . . . . . . . 38
Section 706. Investments by Fiscal Agent . . . . . . . . 39
Section 707. Investments in Bonds by Fiscal Agent . . . . 39
ARTICLE VIII
PARTICULAR COVENANTS
Section 801. Payment of Bonds; Limited Obligations . . . 39
Section 802. Limitations on Indebtedness . . . . . . . . 39
Section 803. Covenants and Representations of City . . . 39
Section 804. Covenants with Credit Banks, Insurers, etc. 40
Section 805. operation and Maintenance . . . . . . . . . 40
Section 806. Free Service, Competing service, Billing
and Enforcement of Charges . . . . . . . . . 40
Section 807. Sale or Encumbrance of System . . . . . . . 41
Section 808. Insurance . . . . . . . . . . . . . . . . . 41
Section 809. Damage, Destruction, Condemnation and Loss
of Title . . . . . . . . . . . . . . . . . . 42
Section 810. Records and Accounts; Inspections and
Reports . . . . . . . . . . . . . . . . . . 42
Section 811. Service Agreements . . . . . . . . . . . . . 43
(ii)
ARTICLE IX
DEFAULTS AND REMEDIES
Section 901. Events of Default . . . . . . . . . . . . . 43
Section 902. Notice to Bondholders of Certain Default. 45
Section 903. Appointment of Trustee . . . . . . . . . . . 45
Section 904. Acceleration . . . . . . . . . . . . . . . . 46
Section 905. Receiver . : . . . . . . . 4"
Section 906. Other Remedie;;*R:ig*ht; of*Bon'dholders . . . 46
Section 907. Unconditional Right To Receive Principal,
Premium and Interest . . . . . . . . . . . . 47
ARTICLE X
DEFEASANCE OF BONDS
Section 1001. Defeasance of Bonds . . . . . . . . . . . . 47
ARTICLE XI
SUPPLEMENTAL RESOLUTIONS
Section 1101. Supplemental Resolutions Not Requiring
Consent of Bondholders . . . . . . . . . . . 48
Section 1102. Supplemental Resolutions Requiring Consent
of Bondholders . . . . . . . . . . . . . . . 49
ARTICLE XII
MISCELLANEOUS
Section 1201. Provisions Relating to Fiscal Agent . . . . 51
Section 1202. Consents, etc., of Bondholders . . . . . . . 51
Section 1203. Limitation of Rights . . . . . . . . . . . . 52
Section 1204. Limitation of Liability of Council, etc . . . 52
Section 1205. Severability . . . . . . . . . . . . . . . . 52
Section 1206. Effective Date . . . . . . . . . . . . . . . 52
MASTER WATER AND SEWER REVENUE BOND RESOLUTION
AUTHORIZING THE ISSUANCE E'ROM TIME TO TIME OF ONE
OR MORE SERIES OF WATER AND SEWER SYSTEM REVENUE
BONDS OF THE CITY OF VIRGINIA BEACH
WHEREAS, pursuant to the powers granted by its Charter
(Chapter 147, Acts of Assembly of 1962, as amended) the City of
virginia Beach, Virginia, owns and operates water and sanitary
sewer facilities; and
WHEREAS, pursuant to the Code of Virginia of 1950, as
amended, the Council of the City is authorized to contract debts
on behalf of the City and to issue, as evidence thereof, bonds,
notes or other obligations payable solely from the revenues of
its water and sanitary sewer system; and
WHEREAS, the City has determined to establish a program for
financing improvements and extensions to its water and sanitary
sewer system by the issuance of bonds payable solely from
revenues of such system;
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF VIRGINIA BEACH,
VIRGINIA:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 101. Definitions. The following words as used in
this Resolution shall have the following meanings unless a
different meaning clearly appears from the context:
"Account" shall mean any of the various Accounts created
within a Fund under this Resolution.
"Annual Operating Budget" shall mean the budget by that name
referred to in Section 602.
"Authorized Representative of the City" shall mean such
person or persons as may be designated to act on behalf of the
City by certificate executed by the City Manager or the Director
of Finance and on file with the Clerk and the Fiscal Agent.
"Authorized Representative of Public Utilities" shall mean
such person or persons as may be designated to act on behalf of
the Department of Public Utilities of the City by certificate
executed by the Director of such Department and on file with the
Clerk and the Fiscal Agent.
"Bond Anticipation Notes" shall mean any notes issued in
anticipation of the issuance of Bonds.
"Bond Counsel" shall mean an attorney or firm of attorneys
nationally recognized on the subject of municipal bonds.
"Bondholders" or "holders" of Bonds shall mean the
registered owners of Bonds.
"Bonds" shall mean any bonds issued from time to time
pursuant to Article III but shall not include Prior Parity Bonds,
Parity Double Barrel Bonds, Prior Subordinate Bonds, Subordinate
Double Barrel Bonds or Subordinate Debt.
"Capital Improvement Account" shall mean the Capital
Improvernent Account within the Revenue Fund established in
Section 603.
"City" shall mean the City of Virginia Beach, a municipal
corporation duly created by the General Assembly of Virginia.
"Codell shall mean the Internal Revenue Code of 1986, as
amended, including applicable regulations, rulings and revenue
procedures promulgated thereunder or under the Internal Revenue
Code of 1954, as amended.
"Commonwealth" shall mean the Commonwealth of Virginia.
"Connection Fees" shall mean all nonrecurring fees that the
City collects from developers, builders and others to connect
their facilities to the System, which facilities are related to
any installation of and expansion to the System.
"Construction Fund" shall mean the Construction Fund
established in Section 501.
"Consulting Engineer" shall mean (a) an Independent
Consulting Engineer or (b) the Utilities Engineering Manager or
the bureau chief of utilities engineering of the Department of
Public Utilities of the City, or the corresponding officer of any
successor department, who is (1) an engineer experienced in the
field of water or sanitary sewer engineering (as appropriate) and
(2) licensed and registered as a professional engineer in the
Commonwealth.
"Contracted Services" shall mean (a) services rendered or
facilities provided to the City in respect to the System or
(b) the performance of functions for or on behalf of the City
that are similar to those performed by the System, from a
specific project or system, pursuant to a contract, lease,
service agreement or another similar arrangement.
"Cost" or "Cost of a Project" shall mean the Cost of any
Project as set forth in Section 502.
-2-
"Cost of Contracted Services" shall mean the payments to be
made by the City for Contracted Services under service agreements
as set forth in section 811 which shall consist of three
components: (a) a "Debt Service Component" which is that part of
the payment for Contracted Services for which the City is
obligated to pay in order to receive such Contracted Services,
the purpose of which is to pay a fixed charge or to pay the
principal of and/or interest on the obligations, directly or
indirectly associated with rendering the Contracted Services, to
the entity providing the Contracted Services, (b) the "Operating
Component" which is that part of the payment for the Contracted
Services that meets the definition of Operating Expenses under
this Resolution, and (c) the "Remaining Component" which is the
remaining part of the payment for Contracted Services which is
not included in the definition of Debt Service Component or
Operating Component.
"Council" shall mean the City Council as the governing body
of the City.
"Debt Service Component" shall have the meaning set forth in
the definition of "Cost of Contracted Services."
"Debt Service Reserve Fund" shall mean the Debt Service
Reserve Fund established in Section 603.
"Defeased obligations" shall mean obligations of any state
or territory of the United States or any political subdivision
thereof which obligations are rated in the highest rating
category by the Rating Agencies and which meet the following
requirements: (a) the obligations are not subject to redemption
or the fiduciary holding such obligations has been given
irrevocable instructions to call such obligations for redemption
and the issuer has covenanted not to redeem such obligations
other than as set forth in such instructions, (b) the obligations
are secured by cash or Government Obligations, Government
Certificates or other Defeased Obligations (which are not subject
to redemption other than at the option of the holder thereof)
that may be applied only to principal, premium and interest
payments of such obligations, (c) the principal of and interest
on the Government Obligations, Government Certificates or other
Defeased Obligations (plus any cash held in escrow) are
sufficient to meet the liabilities of the obligations, (d) the
Government Obligations, Government Certificates or other Defeased
Obligations serving as security for such obligations are held by
a bank or trust company acting as escrow agent, and (e) the
Government Obligations, Government Certificates or Defeased
obligations are not available to satisfy any other claims,
including those against the bank or trust company acting as
escrow agent.
"Event of Default" shall mean any of the events enumerated
in Section 901.
-3-
"Fiscal Agent" shall mean Central Fidelity Bank, Richmond,
Virginia, a Virginia banking corporation having a corporate trust
office in the Commonwealth, or its successors or assigns under
this Resolution.
"Fiscal Year" shall mean the twelve-month period beginning
on July I of one year and ending on June 30 of the following
year, or such other fiscal year of twelve months as may be
selected by the City.
"Fund" shall mean the Revenue Fund, Revenue Bond Fund,
Parity Double Barrel Bond Fund, Parity Debt Service Component
Fund, Debt Service Reserve Fund, Subordinate Debt Fund or any
other fund created under this Resolution.
"Government Certificates" shall mean certificates
representing proportionate ownership of Government obligations,
which Government Obligations are held by a bank or trust company
organized under the laws of the United States of America or any
of its states in the capacity of custodian of such certificates.
"Government obligations" shall mean (a) bonds, notes and
other direct obligations of the United States of America, (b)
securities unconditionally guaranteed as to the timely payment of
principal and interest by the United States of America, or (c)
bonds, notes and other obligations of any agency of the United
States of America unconditionally guaranteed as to the timely
payment of principal and interest by the United States of
America. Government Obligations may be held directly by the
Fiscal Agent or a bank or trust company organized and existing
under the laws of the United States of America or any of its
states in the capacity of custodian, or in the form of securities
of any open-end or closed-end management type investment company
or investment trust registered under the Investment Company Act
of 1940, provided that the portfolio of such investment company
or investment trust is limited to Government obligations.
"Independent Consulting Engineer" shall mean an independent
engineer experienced in the field of water or sanitary sewer
engineering (as appropriate) and licensed and registered as a
professional engineer in the Commonwealth.
"Interest Account" shall mean the Interest Account within
the Revenue Bond Fund established in Section 603.
"Maximum Annual Additional Parity Debt Service" shall mean
the maximum amount required to be deposited in the Parity Double
Barrel Bond Fund and the Parity Debt Service Component Fund,
respectively, on account of principal of (whether at maturity or
by mandatory sinking fund redemption) and interest on Parity
Double Barrel Bonds and Parity Debt Service Components in the
then current or any future Fiscal Year. For purposes of
calculating Maximum Annual Additional Parity Debt Service, the
-4-
assumptions set forth in sections (a) through (e) of the
definition of Maximum Annual Debt Service are to be used to
calculate the principal and interest coming due in any Fiscal
Year.
"Maximum Annual Debt Service" shall mean the maximum amount
payable on account of principal of (whether at maturity or by
mandatory sinking fund redemption) and interest on the Bonds in
the then current or any future Fiscal Year. For purposes of
calculating Maximum Annual Debt Service, the following
assumptions are to be used to calculate the principal and
interest coming due in any Fiscal Year:
(a) in determining the principal amount due in each Fiscal
Year, payment shall be assumed to be made in accordance with any
amortization schedule established for such debt (unless a
different subsection of this definition applies for purposes of
determining principal maturities or amortization), including any
scheduled redemption of Bonds on the basis of accreted value and,
for such purpose, the redemption payment shall be deemed a
principal payment and, further, payment shall be assumed to be
made at the time deposits are required to be made to the Revenue
Bond Fund;
(b) if any outstanding Bonds or any Bonds proposed to be
issued would constitute Tender Indebtedness, then Maximum Annual
Debt Service on the options or obligations of the holders of such
Bonds to tender the same for purchase or payment prior to their
stated maturity or maturities shall be treated as a principal
maturity occurring on the first date on which owners of such
Bonds may or are required to tender such Bonds, except that any
such option or obligation to tender Bonds shall be ignored and
not treated as a principal maturity if (1) such Bonds are rated
in one of the two highest long-term rating categories (without
regard to any rating refinement or gradation by numerical
modifier or otherwise) by a Rating Agency or such Bonds are rated
in the highest short-term, note or commercial paper rating
categories by a Rating Agency, and (2) any obligation the City
may have, other than its obligation on such Bonds, to reimburse
any extender of a credit or liquidity facility or a bond
insurance policy, or similar arrangement, shall either be
subordinated to the obligation of the City on the Bonds or shall
have been incurred under and shall have met the tests and
conditions for the issuance of Bonds set forth in this
Resolution;
(c) if any outstanding Bonds constitute Variable Rate
Indebtedness, the interest rate on such Bonds shall be assumed to
be 110% of the greater of (1) the daily average interest rate on
such Bonds during the 12 months ending with the month preceding
the date of calculation, or such shorter period that such Bonds
shall have been Outstanding, or (2) the rate of interest on such
Bonds on the date of calculation;
-5-
(d) if any Bonds proposed to be issued would constitute
Variable Rate Indebtedness, then such Bonds shall be assumed to
bear interest at the rate quoted in The Bond BuVer 25 Revenue
Bond Index as published in The Bond Buyer, for the last week of
the month preceding the date of sale of such Bonds, or if that
index is no lonqer published, a similar index selected by the
City that is generally accepted in the municipal bond industry,
or if the City fails to select a replacement index, an interest
rate equal to 80% of the yield for outstanding United States
Treasury Bonds having an equivalent maturity as the Bonds
proposed to be issued, or if there are no such Treasury Bonds
having equivalent maturities, 80% of the lowest prevailing prime
rate of any of the five largest commercial banks in the United
States of America ranked by assets; and
(e) if moneys, Government Obligations or Government
Certificates have been irrevocably deposited with a bank or trust
company acting as escrow agent to be used to pay principal and/or
interest on specified Bonds, then the principal and/or interest
to be paid from such moneys or obligations or from the earnings
thereon shall be disregarded and not included in the calculation
of Maximum Annual Debt Service.
Notwithstanding anything in this Resolution to the contrary,
for purposes of the definition of Maximum Annual Debt Service,
Bonds shall not include Bond Anticipation Notes or notes issued
in anticipation of revenues of the System.
"Maximum Annual Prior Parity Bond Debt Service" shall mean
the maximum amount required to be deposited in the Prior Parity
Bond Account in the Revenue Bond Fund on account of principal of
(whether at maturity or by mandatory sinking fund redemption) and
interest on Prior Parity Bonds in the then current or any future
Fiscal Year. For purposes of calculating Maximum Annual Prior
Parity Bond Debt Service, the assumptions set forth in sections
(a) through (e) of the definition of Maximum Annual Debt Service
are to be used to calculate the principal and interest coming due
in any Fiscal Year.
"Moody's" shall mean Moody's Investors Service, Inc., New
York, New York, or its successors.
"Net Proceeds" shall mean the gross proceeds from any
insurance recovery or recovery in any condemnation proceeding
remaining after payment of attorneys' fees, fees and expenses of
the Registrar and all other expenses incurred in collection of
such gross proceeds.
"Operating component" shall have the meaning set forth in
the definition of "Cost of Contracted Services."
"Operating Expenses" shall mean all current expenses
directly or indirectly attributable to the ownership or operation
-6-
of the System, including, without intending to limit or restrict
any proper definition of such expenses under any applicable laws
or generally accepted accounting principles, reasonable and
necessary usual expenses of administration, operation,
maintenance and repair, costs for billing and collecting the
rates, fees and other charges for the use of or the services
furnished by the System, insurance and surety bond premiums,
legal, engineering, auditing and financial advisory expenses,
expenses and compensation of the Registrar and the Fiscal Agent,
Operating Components of Cost of Contracted services, and deposits
into a self insurance program as described in Section 808.
Operating Expenses shall not include any allowance for
depreciation, Debt Service Components or Remaining Components of
Cost of Contracted Services, deposits or transfers to the Revenue
Bond Fund, the Parity Double Barrel Bond Fund, the Parity Debt
Service Component Fund, the Debt Service Reserve Fund, the
Subordinate Debt Fund, the Renewal and Replacement Account, or
the Capital Improvement Account, or expenditures for capital
improvements to and extensions of the System.
"Opinion of counsel" shall mean an opinion of any attorney
or firm of attorneys acceptable to the Fiscal Agent, who may be
counsel for the City but shall not be a full time employee of
either the City or the Fiscal Agent.
"Outstanding" or "Outstanding Bonds" shall mean, at any
date, the aggregate of all Bonds authorized, issued,
authenticated and delivered under this Resolution, except:
(a) Bonds canceled or surrendered to the Registrar for
cancellation;
(b) Bonds deemed to have been paid as provided in
Section 1001;
(c) Bonds in lieu of or in substitution for which other
Bonds shall have been authenticated and delivered pursuant to
this Resolution unless proof satisfactory to the Registrar is
presented that any such Bond is held by a bona fide holder; and
(d) Bonds, the principal of which have become due, and
funds sufficient for their payment have been deposited with the
Fiscal Agent as provided in Section 209.
In determining whether holders of a requisite aggregate
principal amount of the Outstanding Bonds have concurred in any
request, demand, authorization, direction, notice, consent or
waiver under this Resolution, words referring to or connoting
"Principal of" or "principal amount of" Outstanding Bonds shall
be deemed also to be references to, to connote and to include the
accreted value of Bonds of any Series as of the immediately
preceding interest compounding date for such Bonds. Bonds that
-7-
are owned by the City shall be disregarded and deemed not to be
Outstanding for the purpose of any such determination.
In addition, solely for the purpose of Section 304, no Bonds
shall be deemed Outstanding for any time for which a bank or
trust company holds in escrow for the benefit of Bondholders
(1) cash, (2) noncallable Government Obligations, the principal
of and interest on which will be sufficient to pay when due the
installments of principal of and premium, if any, and the
interest on such Bonds, (3) to the extent permitted by the laws
of the Commonwealth, Government Certificates and/or Defeased
Obligations meeting the requirements set forth in (2), or (4) any
combination of (1) through (3).
"Parity Debt Service Component" shall mean the Debt Service
Components of the Cost of Contracted services under service
agreements that the Director of Finance shall certify at the time
the City commits to receive such Contracted Services that the
City shall have elected to treat such Debt Service Components as
payable on a parity with the Bonds.
"Parity Debt Service Component Fund" shall mean the Parity
Debt Service Component Fund established in Section 603.
"Parity Double Barrel Bond Fund" shall mean the Parity
Double Barrel Bond Fund established pursuant to Section 603.
"Parity Double Barrel Bonds" shall mean any bonds, notes or
other obligations issued by the City after the date of adoption
of this Resolution which have pledged to their payment
(a) Revenues on a parity with the outstanding Bonds and (b) the
full faith, credit and taxing power of the City.
"Parity Double Barrel Term Bonds" shall mean any Parity
Double Barrel Bonds required to be redeemed in part prior to
maturity according to a sinking fund schedule.
"Parity obligations" shall mean Prior Parity Bonds, Bonds,
Parity Double Barrel Bonds and Parity Debt Service components.
"Principal Account" shall mean the Principal Account within
the Revenue Bond Fund established in Section 603.
"Prior Parity Bond Account" shall mean the Prior Parity Bond
Account within the Revenue Bond Fund established in Section 603.
"Prior Parity Bonds" shall mean the City's (a) $3,000,000
Revenue Bonds, 1977 (P.A. Corp.), (b) $5,100,000 Water and Sewer
Revenue Notes, 1977 (P.A. Corp.), (c) $2,000,000 Drought Relief
Revenue Bond, 1978, (d) $2,200,000 Water and Sewer Revenue Notes,
1982 (County Utilities), (e) $1,800,000 Water and Sewer Revenue
Notes, 1982 (Kempsville Utilities), and (f) $13,000,000 Water and
Sewer Revenue Bond, Series of 1989.
-8-
"Prior Subordinate Bonds" shall mean the City's (a)
$20,000,000 General Obligation Water and Sewer Bonds, Series of
1977A; (b) $19,900,000 General Obligation Water and Sewer Bonds,
Series of 1977B; (c) $16,000,000 General Obligation Water and
Sewer Bonds, Series of 1981; (d) $7,500,000 General Obligation
Water and Sewer Bonds, Series of 1982; (e) $10,180,000 General
Obligation Water and Sewer Bonds, Series of 1984; (f) $6,240,000
General obligation Water and Sewer Bonds, Series of 1985; (g)
$6,080,000 General Obligation Water and Sewer Bonds, Series of
1986; and (h) $8,235,000 General Obligation Water and Sewer
Refunding Bonds, Series of 1986.
"Project" shall mean (a) water or sanitary sewer facilities
which are to become part of the System or (b) any water or sewage
treatment capacity or service (which service is required to be
capitalized or which the City properly elects to capitalize)
which is to be acquired by the City and which capacity or service
is to become part of the System.
"Public Finance Act" shall mean the Public Finance Act of
1991, Sections 15.1-227.1 et sea. of the Virginia Code.
"Qualified Independent Consultant" shall mean an independent
professional consultant having the skill and experience necessary
to provide the particular certificate, report or approval
required by the provision of this Resolution or any Supplemental
Resolution in which such requirement appears, including without
limitation an Independent Consulting Engineer and an independent
certified public accountant.
"Rating Agency" or "Rating Agencies" shall mean Moody's or
Standard & Poor's, or both of them, and their successors and
assigns. The City may appoint any nationally recognized
securities rating agency in addition to or as a replacement for
Moody's or Standard & Poor's.
"Registrar" shall mean the paying agent and bond registrar
for any series of Bonds as provided in any Supplemental
Resolution.
"Remaining Component" shall have the meaning set forth in
the definition of "Cost of Contracted Services."
"Renewal and Replacement Account" shall mean the Renewal and
Replacement Account within the Revenue Fund established in
Section 603.
"Residual Account" shall mean the Residual Account within
the Revenue Fund established in Section 603.
"Resolution" shall nean this Master Water and Sewer Revenue
Bond Resolution as supplemented or amended by Supplemental
Resolutions.
-9-
"Revenue Account" shall mean the Revenue Account within the
Revenue Fund established in Section 603.
"Revenue Bond Fund" shall mean the Revenue Bond Fund
established in Section 603.
"Revenue Fund" shall mean the Revenue Fund established in
Section 603.
"Revenues" shall mean all moneys received as rates, fees and
other charges for the use of and for the services furnished by
the System, including Connection Fees, water resource recovery
fees and investment earnings that are required to be deposited in
the Revenue Fund. Revenues shall not include customer deposits.
"Series" or "Series of Bonds" shall mean a separate series
of Bonds issued under this Resolution pursuant to a Supplemental
Resolution.
"Series Debt Service Reserve Requirement" for any Series of
Bonds shall have the meaning set forth in the Supplemental
Resolution authorizing such Series of Bonds.
In lieu of all or any portion of the required amounts to be
on deposit in any Series Debt service Reserve Account for any
Series of Bonds, the City may cause to be deposited to the credit
of such Series Debt Service Reserve Account a surety bond or an
insurance policy payable to the City for the benefit of the
holders of the applicable Series of Bonds or a letter of credit
entitling the City on any interest payment date to draw on it in
an amount equal to all or any portion of the difference between
the applicable Series Debt Service Reserve Requirement and the
sum then to the credit of the applicable Series Debt Service
Reserve Account. The City may, from time to time, substitute
cash, surety bonds, insurance policies or letters of credit for
any of such forms of security so long as such substituted
security complies with the requirements of this definition and
the terms and conditions set forth in the Supplemental Resolution
for the applicable Series of Bonds.
In the final maturity year for any Series of Bonds, the
moneys in the series Debt Service Reserve Account attributable to
such Series of Bonds shall be credited against the debt service
payments attributable to such Series of Bonds due that year. On
the scheduled date of final payment of a Series of Bonds, the
City may cause to be transferred to the Revenue Bond Fund the
moneys in such Series Debt Service Reserve Account. In lieu of
the portion of the debt service payments attributable to such
Series of Bonds, such transferred moneys may be used to pay the
principal and interest due on such Series of Bonds on their final
payment date.
-10-
"Standard and Poor's" shall mean Standard & Poor's
Corporation, New York, New York, or its successors.
"Subordinate Debt" shall mean any bonds, notes or other
obligations of the City that have pledged to their payment
Revenues as a junior lien pledge after the pledge of Revenues to
Parity Obligations. Subordinate Debt may also include, at the
option of the City, Subordinate Debt Service Components,
Subordinate Double Barrel Bonds, Remaining components of Cost of
Contracted Services and debt service reserve funds, if any,
securing such obligations.
"Subordinate Debt Service Component" shall mean the Debt
Service Components of the Cost of Contracted Services under
service agreements in which the Director of Finance shall not
have certified at the time the City commits to receive such
contracted services that the City shall have elected to treat
such Debt Service Components as payable on a parity basis to the
payment of Bonds.
"Subordinate Double Barrel Bonds" shall mean any bonds,
notes or other obligations issued by the City which have pledged
to their payment (a) Revenues as a junior lien pledge after the
pledge of such Revenues to the Prior Parity Bonds and the Bonds
and (b) the full faith, credit and taxing power of the City
including Prior Subordinate Bonds.
"Supplemental Resolution" shall mean any Supplemental
Resolution adopted pursuant to Section 1101 or 1102.
"System" shall mean all plants, systems, facilities,
equipment or property owned, in whole or in part, acquired,
operated or maintained by or on behalf of the City from time to
time, together with all future extensions, improvements,
enlargements and additions thereto, and all replacements thereof,
used in connection with the collection, treatment or disposal of
sanitary sewage and the supply, treatment, storage or
distribution of water.
"Tender Indebtedness" shall mean any indebtedness a feature
of which is an option or obligation on the part of the holders of
such indebtedness to tender all or a portion of such indebtedness
to a fiduciary for mandatory purchase or redemption prior to the
stated maturity date of such indebtedness, which may include
Variable Rate Indebtedness with such a feature.
"Term Bonds" shall mean any Bonds stated to mature on a
specified date and required to be redeemed in part prior to
maturity according to a sinking fund schedule.
"Trusteell shall mean a bank or corporate trust company
appointed by the Council pursuant to a Supplemental Resolution
-11-
adopted in accordance with Section 1101 or by Bondholders
pursuant to Section 902.
"Utility Transfers" shall mean annual transfers from the
Residual Account to the City's general fund, as may be approved
by the City council, in an amount not to exceed 2% of the
increase of retained earnings of the System for the immediately
preceding Fiscal Year over the next previous Fiscal Year, as
shown on the City's audited financial statements. Utility
Transfers are to compensate the City's general fund for loss of
revenues because the System is owned by the City and is not a
private entity.
"Variable Rate Indebtedness" shall mean any indebtedness the
interest rate on which is not established at the time of
incurrence at a fixed or constant rate.
"virginia code,, means the Code of Virginia of 1950, as
amended.
Section 102. Rules of Construction. Unless the context
clearly indicates to the contrary, the following rules shall
apply to the construction of this Resolution:
(a) Words importing the singular number shall include the
plural number and vice versa.
(b) Words importing the redemption or calling for
redemption of Bonds shall not be deemed to refer to or connote
the payment of Bonds at their stated maturity.
(c) Unless otherwise indicated, all references herein to
particular Articles or Sections are references to Articles or
Sections of this Resolution.
(d) The headings herein and Table of Contents to the
Resolution are solely for convenience of reference and shall not
constitute a part of this Resolution nor shall they affect its
meaning, construction or effect.
(e) All references herein to the payment of Bonds are
references to payment of principal of and premium, if any, and
interest on Bonds.
(f) All references herein to the Mayor, the City Manager,
the Clerk, the Treasurer, the Director of Finance and any other
officers are references to officers of the City.
Section 103. Resolution To Constitute Contract. In
consideration of the acceptance of the Bonds by those who shall
hold the same from time to time, this Resolution shall be deemed
to be and shall constitute a contract between the City and the
Bondholders, and the covenants and agreements herein set forth to
-12-
be performed by the city shall be for the equal benefit,
protection and security of the Bondholders, except as expressly
provided therein and herein.
ARTICLE II
EXECUTION, AUTH LND FORK F BONDS
Section 201. Form and Details of Bonds. The form, details
and terms of each Series of Bonds and such other matters as the
Council may deem appropriate shall be set forth in the
Supplemental Resolution authorizing such Series of Bonds. The
principal of and premium, if any, and interest on each Series of
Bonds shall be payable at such place or places and in such manner
as set forth in the Supplemental Resolution authorizing such
Series of Bonds. The principal of and premium, if any, and
interest on the Bonds shall be payable in lawful money of the
United States of America.
Section 202. Execution of Bonds. Unless otherwise provided
in the applicable Supplemental Resolution, the Bonds shall be
signed by the manual or facsimile signature of the Mayor, shall
be countersigned by the manual or facsimile signature of the City
Clerk, and the City's seal shall be affixed thereto or a
facsimile thereof printed thereon. In case any officer whose
signature or a facsimile of whose signature shall appear on any
Bond shall cease to be such officer before the delivery of such
Bond, such signature or such facsimile shall nevertheless be
valid and sufficient for all purposes the same as if he had
remained in office until such delivery. Any Bond may bear the
facsimile signature of or may be signed by such persons as at the
actual time of the execution thereof shall be the proper officers
to sign such Bond although at the date of such Bond such persons
may not have been such officers.
Section 203. Authentication of Bonds. Unless otherwise
provided in the applicable Supplemental Resolution, the Bonds
shall bear a certificate of authentication and shall not be valid
until the Registrar shall have executed the certificate of
authentication and inserted the date of authentication thereon.
The Registrar shall authenticate each Bond with the signature of
an authorized officer or employee, but it shall not be necessary
for the same person to authenticate all of the Bonds or all of
the Bonds of any Series. Only such authenticated Bonds shall be
entitled to any right or benefit under this Resolution, and such
certificate on any Bond issued hereunder shall be conclusive
evidence that the Bond has been duly issued and is secured by the
provisions hereof.
Section 204. Registration and Exchange of Bonds; Persons
Treated as owners. The Registrar shall maintain registration
books for the registration and exchange of Bonds. Upon surrender
-13-
of any Bonds at the corporate trust office of the Registrar,
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, such Bond may be
exchanged for an equal aggregate principal amount of Bonds, in
authorized denominations, of the same Series, form and maturity,
bearing interest at the same rate as the Bond surrendered, and
registered in the name or names as requested by the then
registered owner thereof or his duly authorized attorney or legal
representative. The City shall execute and the Registrar shall
authenticate any Bonds necessary to provide for exchange of Bonds
pursuant to this Section.
The Registrar shall treat the registered owner as the person
exclusively entitled to payment of principal, premium, if any,
and interest and the exercise of all other rights and powers of
the owner, except that, unless otherwise provided in the
applicable Supplemental Resolution, interest payments shall be
made to the person shown as owner on the 15th day of the month
preceding each interest payment date.
Section 205. Charges for Exchange of Bonds. Any exchange
of Bonds shall be at the expense of the City, except that the
Registrar may charge the person requesting such exchange the
amount of any tax or other governmental charge required to be
paid with respect thereto.
Section 206. Temporary Bonds. Prior to the preparation of
Bonds in definitive form the City may issue temporary Bonds in
such denominations as the City may determine, but otherwise in
substantially the form set forth in the applicable Supplemental
Resolution, with appropriate variations, omissions and
insertions. The City shall promptly prepare, execute and deliver
to the Registrar before the first interest payment date Bonds in
definitive form and thereupon, upon surrender of Bonds in
temporary form, the Registrar shall authenticate and deliver in
exchange therefor Bonds in definitive form of the same maturity
having an equal aggregate principal amount. Until exchanged for
Bonds in definitive form, Bonds in temporary form shall be
entitled to the lien and benefit of this Resolution.
Section 207. Mutilated, Lost or Destroyed Bonds. If any
Bond has been mutilated, lost or destroyed, the City shall cause
to be executed, and the Registrar shall authenticate and deliver,
a new Bond of like date, number and tenor in exchange and
substitution for and upon the cancellation of such mutilated Bond
or in lieu of and in substitution for such lost or destroyed
Bond; provided, however, that the City and the Registrar shall so
execute and deliver only if the holder has paid the reasonable
expenses and charges of the City and the Registrar in connection
therewith and, in the case of a lost or destroyed Bond, (a) has
filed with the Treasurer and the Registrar evidence satisfactory
to them that such Bond was lost or destroyed and of his ownership
-14-
thereof, and (b) has furnished indemnity satisfactory to them.
if any such Bond has matured, instead of issuing a new Bond the
Registrar may pay the same without surrender thereof.
Section 208. Cancellation and Disposition of Bonds. All
Bonds that have been surrendered for transfer or exchange
pursuant to Section 204, paid (whether at maturity, by sinking
fund redemption, acceleration, call for redemption or otherwise),
purchased pursuant to Section 605, or delivered by the City to
the Registrar for cancellation shall not be reissued, and the
Registrar shall, unless otherwise directed by the City, cremate,
shred or otherwise dispose of such Bonds. The Registrar shall
deliver to the City a certificate of any such cremation,
shredding or other disposition conforming to the requirements of
Virginia Code Section 15.1-227.24 or any successor provision of
law.
Section 209. Non-Presentment of Bonds. (a) If any Bond is
not presented for payment when the principal thereof becomes due
(whether at maturity, by sinking fund redemption, upon
acceleration or call for redemption or otherwise), all liability
of the City to the holder thereof for the payment of such Bond
shall be completely discharged if funds sufficient to pay such
Bond and the interest due thereon shall be held by the Fiscal
Agent for the benefit of such holder, and thereupon it shall be
the duty of the Fiscal Agent to hold such funds subject to
Subsection (b) below, without liability for interest thereon, for
the benefit of such holder, who shall thereafter be restricted
exclusively to such funds for any claim of whatever nature on his
part under this Resolution or on, or with respect to, such Bond.
(b) Notwithstanding anything in this Resolution to the
contrary, any cash, Government Obligations or, if permitted by
the laws of the Commonwealth, Government Certificates or Defeased
obligations deposited with a bank or trust company acting as
escrow agent for the payment of the principal of, premium, if
any, and interest on any Series of Bonds remaining unclaimed for
more than one year after the principal of all such Series of
Bonds has become due and payable shall be paid to the city and
shall be held by the City in a separate account for four years
and thereafter in the general fund of the City. The City shall
hold such funds in accordance with the requirements of Section
15.1-227.6 of the virginia Code, or any successor provision of
law. After such funds have been paid to the City, the holders of
such Bonds shall be entitled to look only to the City, and all
liability of the Fiscal Agent with respect to such amounts shall
cease.
-15-
ARTICLE III
ISSUANCE OF BONDS
SeCtion 301. Purposes of Bonds. Bonds may be issued (a) to
pay the Cost of a Project, (b) to pay the costs of planning or
investigating the feasibility of a Project, (c) to refund any
bonds (which for purposes of Section 304(i) and 306 shall include
notes or other obligations) secured by or payable from Revenues,
including any Bonds, or (d) for a combination of such purposes.
Section 302. Parity of Bonds. Subject to the right of the
City to apply Revenues to payment of operating Expenses, this
Resolution constitutes a continuing, irrevocable pledge of
Revenues to secure payment of the principal of and premium, if
any, and interest on all Bonds that may from time to time be
issued and outstanding hereunder. All Parity obligations shall
in all respects be equally and ratably secured hereunder without
preference, priority or distinction on account of the actual time
or times of the issuance or maturity thereof, so that all
outstanding Bonds and all Parity Obligations at any time
outstanding hereunder shall have the same right, lien and
preference under and by virtue of this Resolution with like
effect as if they had all been issued simultaneously, all to the
extent and in the manner provided in this Resolution; provided,
however, that the moneys in each Series Debt Service Reserve
Account shall only secure the applicable Series of Bonds.
Nothing herein shall be construed, however, as (a) requiring that
any Bonds bear interest at the same rate or in the same manner as
any other Bonds, have the same, or an earlier or later, maturity,
or be subject to mandatory, optional or extraordinary redemption
prior to maturity on the same basis as any other Bonds, (b)
prohibiting the City from entering into financial arrangements
designed to assure that moneys will be available for the payment
of certain Bonds at their maturity, or (c) prohibiting the City
from pledging moneys or assets of the City other than those
pledged herein for the benefit of certain Bonds.
section 303. Subordinate Debt. Notwithstanding anything in
this Resolution to the contrary, the City may at any time issue
Subordinate Debt and pledge Revenues thereto so long as rates,
fees and charges are in effect or scheduled to go into effect to
meet the requirements set forth in Section 601(b) immediately
after the issuance of such Subordinate Debt.
Section 304. Conditions of Issuing Bonds. Before the
issuance and authentication of any Series of Bonds by the
Registrar, the City shall file with the Clerk the following:
(a) In the case of the initial Series of Bonds issued under
this Resolution, an opinion or opinions of Counsel, subject to
customary exceptions and qualifications, substantially to the
-16-
effect that this Resolution has been duly adopted and is binding
on the City.
(b) A certified copy of a Supplemental Resolution which
(1) shall include: (A) authorizing the issuance, fixing the
principal amount and setting forth the details of such Bonds,
including the interest rate or rates and the manner in which the
Bonds are to bear and pay interest, the principal and interest
payment dates of the Bonds, the purposes for which such Bonds are
being issued, the date and the manner of numbering such Bonds,
the Series designation, the denominations, the maturity dates and
principal maturities, the principal amounts required to be
redeemed pursuant to any mandatory redemption provisions or the
manner for determining such principal amounts, any provisions for
optional or extraordinary redemption before maturity and any
provisions regarding the Series Debt Service Reserve Account; and
(B) provisions for the application of the proceeds of such Bonds;
and (2) may include: (A) provisions for credit facilities and
for other funds and accounts to be established with respect to
such Bonds; (B) provisions necessary or expedient for the
issuance of Bonds bearing interest at a variable rate or other
manner of bearing interest, including without limitation
remarketing provisions, liquidity facility provisions and
provisions for establishing the variable rate and converting to a
fixed rate; (C) provisions for entering into interest rate swaps,
guarantees or other arrangements to limit interest rate risks;
and (D) such other provisions as the City may deem appropriate.
(c) A certified copy of a resolution or resolutions of the
City awarding such Bonds and, in the case of a Series of Bonds
issued to refund Bonds, calling for redemption or payment of the
Bonds to be refunded, fixing any redemption date and authorizing
any required notice of redemption in accordance with the
provisions of this Resolution.
(d) A certificate signed by the City Manager or the
Director of Finance and dated the date of such issuance, to the
effect that:
(1) Either (A) upon and immediately following such
issuance, no Event of Default has occurred which has not
been cured or waived, and no event or condition exists
which, with the giving of notice or lapse of time or both,
would become an Event of Default, or (B) if any such event
or condition is happening or existing, specifying such event
or condition, stating that the City will act with due
diligence to correct such event or condition after the
issuance of such Bonds, and describing in reasonable detail
the actions to be taken by the City toward such correction;
and
-17-
(2) All required approvals, limitations, conditions
and provisions precedent to the issuance of such Series of
Bonds have been obtained, observed, met and satisfied.
(e) All policies of insurance (and any amendments to such
policies) or evidence of appropriate substitute arrangements
required by this Resolution in connection with the issuance of
such Bonds and a certificate of a Qualified Independent
Consultant in the field of insurance that all policies (and
amendments) or appropriate substitute arrangements required to be
in effect at that time are in full force and effect and are in
such forms as necessary to comply with and satisfy all
requirements of this Resolution.
(f) An Opinion or Opinions of Counsel, subject to customary
exceptions and qualifications, substantially to the effect that
the Supplemental Resolution for such Series of Bonds has been
duly adopted, is binding on the City and complies in all respects
with the requirements of this Resolution.
(g) An opinion of Bond Counsel, subject to customary
exceptions and qualifications, substantially to the effect that
the issuance of such Bonds has been duly authorized, that such
Bonds are valid and binding limited obligations of the City, and
that the interest on such Bonds is excludable from gross income
for purposes of Federal income taxation or, if such interest is
not excludable, that the issuance and the intended use of the
proceeds of such Bonds will have no adverse effect on the tax-
exempt status of the interest on any other Bonds the interest on
which was excludable from gross income when issued.
(h) If such Bonds are issued to pay the Cost of a Project,
except in the case of the initial Series of Bonds issued under
this Resolution, the following:
(1) A written statement of the Consulting Engineer,
which if the original principal amount of any Series of
Bonds exceeds $10,000,000 has been reviewed @nd approved by
an Independent Consulting Engineer, setting forth the
Consulting Engineer's (A) estimate of the Cost of such
Project (including all financing and related costs) and the
date on which such Project will be completed, and (B)
opinion that the proceeds of such Bonds, together with any
other moneys available for such purpose, will be sufficient
to pay the Cost of such Project;
(2) Evidence that upon issuance of such Bonds each
Series Debt Service Reserve Account within the Debt Service
Reserve Fund will contain the applicable Series Debt Service
Reserve Requirement; and
(3) A certificate of a Qualified Independent
Consultant stating that based on the City's financial
records for the last 24 months (the "Test Period") prior to
the issuance of such Bonds the City is able to meet the
following two independent requirements for a consecutive 12-
month period during such Test Period:
(A) Revenues were sufficient to equal the sum of
(i) operating Expenses for such 12-month period, (ii)
115% of the sum of Maximum Annual Debt service and
Maximum Annual Prior Parity Bond Debt Service, and
(iii) 100% of Maximum Annual Additional Parity Debt
Service immediately after the issuance of such Bonds;
provided, however:
(i) if the City has increased its rates,
fees and other charges and such rates, fees and
other charges went into effect after the beginning
of the Test Period or are scheduled to go into
effect within two years after the issuance of such
Bonds, the Qualified Independent Consultant may
assume that such rates, fees and other charges
were in effect for the Test Period;
(ii) the Qualified Independent Consultant
may assume that the customer base at the end of
the Test Period was the customer base for the
entire Test Period; and
(iii) the Operating Expenses resulting from
and Revenues to be collected from any acquisition
of facilities that have become or will become a
part of the System shall be taken into account.
(B) Revenues were sufficient to meet the
requirement in Section 601(b) for such 12-month period.
(i) If such Bonds are issued to refund any bonds, as
authorized by Section 301(c), the following:
(1) Evidence that the City has made provision as
required by this Resolution for the payment or redemption of
all bonds to be refunded;
(2) A written determination by the bank or trust
company acting as escrow agent for the bonds to be refunded,
which may be given in reliance on a certificate of an
independent verification agent or an independent public
accountant, that the proceeds (excluding accrued interest)
of such Bonds, together with any other moneys deposited with
a bank or trust company acting as escrow agent for such
purpose and the investment income to be earned on moneys
held for the payment or redemption of the bonds to be
refunded, will be sufficient to pay either (A) the principal
of and the premium, if any, on the bonds to be refunded and
-19-
the interest which will accrue on such bonds to the
respective redemption or maturity dates, or (B) the
principal and interest on the refunding Bonds to a date
certain, at which time such proceeds, moneys and earnings
will be sufficient to pay the principal of and the premium,
if any, on the bonds to be refunded and the interest which
will accrue on such bonds to the respective redemption or
maturity dates; and
(3) Either (A) a written determination by the bank or
trust company acting as escrow agent or a Qualified
Independent Consultant that after the issuance of such Bonds
and the provision for payment or redemption of all bonds to
be refunded, the annual debt service requirements for each
Fiscal Year in which there will be outstanding Bonds of any
Series not to be refunded will be not more than what the
annual debt service requirements for such Fiscal Year would
have been on all Bonds Outstanding immediately prior to the
issuance of such Bonds, including the bonds to be refunded,
and that the final maturity of any Series of Bonds being
refunded has not been extended, or (B) a certificate as
described in Section 304(h)(3).
Except for the requirements of Subsections (d)(1) and (d)(2)
of this Section (which may be waived by the purchasers of such
Bonds by an instrument or concurrent instruments in writing
signed by such purchasers), none of the requirements in this
Section may be waived without the consent of the holders of not
less than a majority in aggregate principal amount of the
Outstanding Bonds.
Section 305. Use of Proceeds of Bonds for Project. The
proceeds of Bonds issued for the purpose of paying the Cost of a
Project shall be deposited by the City simultaneously with the
delivery of such Bonds as follows:
(a) If so provided by the applicable Supplemental
Resolution, in the Interest Account in the Revenue Bond Fund an
amount to be used to pay the interest on such Bonds (1) which has
accrued from their dated date to the date of delivery, (2) which
will accrue from their date of delivery to any date on or before
the estimated date of completion of the construction of a
Project, and (3) for a period not exceeding one year after the
date of completion of such construction, as such date is
estimated by the Consulting Engineer, pursuant to Section
304(h)(1);
(b) In the Series Debt Service Reserve Account for such
Series of Bonds an amount which will equal the Series Debt
Service Reserve Requirement; and
(c) In the General Account in the Construction Fund the
balance of such proceeds for the purpose of paying the Cost of
-20-
such Project, including without limitation issuance expenses for
such series of Bonds.
Section 306. Use of Proceeds of Bonds for Refunding. (a)
The proceeds of Bonds issued for the purpose of refunding any
bonds secured by or payable from Revenues, including any Bonds,
shall be deposited by the City simultaneously with the delivery
of such Bonds as follows:
(1) In a special account an amount specified in a
certificate of the City, signed by the City Manager or the
Director of Finance, to be used for the payment of expenses
incident to such refunding;
(2) In the Interest Account in the Revenue Bond Fund
an amount equal to the accrued interest, if any, received as
part of the proceeds of such Bonds; and
(3) In an escrow account held by a bank or trust
company acting as escrow agent either (A) an amount which,
together with any other moneys in such escrow account and
the investment income to be earned on moneys therein, will
be sufficient to pay when due the principal of and premium,
if any, and interest on bonds to be refunded, to be used for
the sole purpose of paying such principal, premium and
interest, or (B) an amount which, together with any other
moneys in such escrow account and the investment income to
be earned thereon, will be sufficient to pay when due the
installments of principal of and interest on such bonds for
a period of time set forth in the Supplemental Resolution
authorizing the refunding Bonds.
(b) Moneys held by an escrow agent as set forth in
Subsection (a)(3) of this Section shall be, as nearly as may be
practicable, invested and reinvested by the escrow agent in
investments authorized under Section 702(a) and, if permitted by
the laws of the Commonwealth, Sections 702(b) and (c) which shall
mature or be subject to redemption at the option of the holder
thereof not later than the respective dates on which such moneys
will be required for the payment or redemption of such Bonds.
Any balance in the accounts set forth in Subsections (a)(1) and
(a)(3) of this Section remaining after the payment of expenses
and the payment or refunding of Bonds shall be deposited in the
Interest Account in the Revenue Bond Fund.
(c) If Bonds are issued to refund any bonds and such bonds
are not retired immediately upon such issuance, the city shall
determine, immediately upon the delivery of such Bonds, whether
the amount on deposit in the applicable Series Debt Service
Reserve Account (including any amounts to be deposited on account
of the issuance of such Bonds) exceeds the applicable Series Debt
Service Reserve Requirement (calculated without regard to debt
service on any Bonds deemed not outstanding). The City may
-21-
direct the Fiscal Agent to remove such excess amount from the
Series Debt Service Reserve Account and use such excess on a pro
rata basis to remedy any deficiencies in any other Series Debt
Service Reserve Accounts; provided, however, that if no such
deficiencies exist, the City may direct the Fiscal Agent to
remove such excess from the Debt Service Reserve Fund and pay it
to the City and it may then be used by the City for any lawful
purpose related to the System.
ARTICLE IV
REDEMPTION OF BONDS
Section 401. Redemption Provisions To Be Fixed by
Supplemental Resolution. The Bonds of any Series will be subject
to mandatory, extraordinary or optional redemption prior to
maturity on such dates and under such conditions as may be
provided in the Supplemental Resolution authorizing the issuance
of such Series of Bonds. The Bonds of any Series to be called
for redemption shall be selected as provided in the applicable
Supplemental Resolution. The Registrar shall treat each Bond of
a denomination greater than the minimum denomination authorized
in the applicable Supplemental Resolution as representing the
number of separate Bonds of such minimum denomination as can be
obtained by dividing the Bond's actual principal amount by such
minimum denomination.
Section 402. Notice of Redemption. Unless otherwise
provided in the applicable Supplemental Resolution, the
Registrar, upon being satisfied as to the payment of its
expenses, shall send notice of the call for redemption,
identifying the Bonds or portions thereof to be redeemed, not
less than 30 nor more than 60 days prior to the redemption date,
(a) by registered or certified mail, to the holder of each Bond
to be redeemed at his address as it appears on the registration
books kept by the Registrar, (b) by registered or certified mail,
to all organizations registered with the Securities and Exchange
commission as securities depositories, and (c) to at least one
information service of national recognition which disseminates
redemption information with respect to tax-exempt securities. In
preparing and delivering such notice, the Registrar shall take
into account, to the extent applicable, the prevailing tax-exempt
securities industry standards and any regulatory statement of any
federal or state administrative body having jurisdiction over the
City or the tax-exempt securities industry, including without
limitation Release No. 34-23856 of the Securities and Exchange
Commission or any subsequent amending or superseding release.
Failure to give any notice specified in (a) above, or any defect
therein, shall not affect the validity of any proceedings for the
redemption of any Bond with respect to which no such failure or
defect has occurred. Failure to give any notice specified in (b)
or (c) above, or any defect therein, shall not affect the
-22-
validity of any proceedings for the redemption of any Bonds with
respect to which the notice specified in (a) above is correctly
given.
on or before the date fixed for redemption, moneys shall be
deposited with the Registrar to pay the principal of and premium,
if any, and interest accrued to the redemption date on the Bonds
called for redemption. Upon the happening of the conditions of
this Section, the Bonds or portions thereof thus called for
redemption shall cease to bear interest from and after the
redemption date, shall no longer be entitled to the benefits
provided by this Resolution and shall not be deemed to be
outstanding under the provisions of this Resolution.
ARTICLE V
CUSTODY AND APPLICATIOIN OF BOND PROCEEDS
Section 501. Construction Fund. There is hereby
established the City of virginia Beach Water and Sewer System
Construction Fund in which there is established a General Account
and an Equity Account. Bond proceeds shall be deposited in the
General Account, and all moneys derived from any other source for
improvements to the System, including without limitation capital
contributions by the City, shall be deposited in the Equity
Account. If so directed in a Supplemental Resolution, there
shall be maintained within the Construction Fund special accounts
as may be provided in such Supplemental Resolution. Deposits
shall be made to the credit of the Construction Fund and any
special accounts as provided in such Supplemental Resolution.
All earnings on moneys in each Account and subaccount shall be
credited to such Account and subaccount.
The City shall hold moneys in the Construction Fund in trust
to be used only to pay the Cost of a Project. Notwithstanding
anything in this Resolution to the contrary, the Equity Account
is not pledged to the payment of Bonds.
Section 502. Cost of Project. The Cost of a Project shall
include the cost of improvements, the cost of construction or
reconstruction, the cost of all labor, materials, machinery and
equipment, the cost of all lands, property, rights, easements,
franchises and permits acquired, financing charges, interest
prior to and during construction and for up to one year after
completion of construction, start-up costs and operating capital,
the cost of plans, specifications, surveys, estimates of costs
and of revenues, the cost of engineering, legal and other
professional services, including financial advisory services,
expenses necessary or incident to determining the feasibility or
practicability of any such acquisition, construction or
reconstruction, payments by the City of its share of the cost of
any multi-jurisdictional project, administrative expenses, any
-23-
amounts to be deposited in the Debt Service Reserve Fund and such
other expenses as may be necessary or incidental to the financing
of such Project. Any obligation or expense incurred by the City
in connection with any of the foregoing items of Cost may be
regarded as a part of such Cost and reimbursed to the City out of
the proceeds of the Bonds issued to finance such Project.
Section 503. Payments from Construction Fund. The City
shall use moneys in the Construction Fund solely to pay the Cost
of a Project. Before any payment shall be made from the
Construction Fund, there shall be filed with the Director of
Finance a requisition signed by an Authorized Representative of
Public Utilities stating (a) to whom such payment is to be made,
(2) the purpose in reasonable detail for which such payment is to
be made, (3) that such purpose is an authorized Cost of a
Project, (4) that such amount has not been the basis for a prior
requisition that has been paid from the Construction Fund, and
(5) from which Account such payment is to be made. A requisition
may represent reimbursement to the City for Cost of a Project
initially paid by the City, or may represent payment to the City
of moneys to be paid in turn by the City to third parties for the
Cost of a Project.
Section 504. Disposition of Balance in Construction Fund.
When the Director of Finance shall have received a certificate,
signed by a Consulting Engineer, stating what items of the Cost
of all Projects have not been paid and for the payment of which
moneys should be reserved in the Construction Fund, the Director
of Finance shall instruct the Treasurer that the balance of any
moneys remaining in the Construction Fund in excess of the amount
to be reserved for payment of unpaid items of the Cost of all
such Projects shall be (a) transferred from the General Account
(1) to the Debt Service Reserve Fund for deposit in any Series
Debt Service Reserve Account in which the amount on deposit
therein is less than the Series Debt Service Reserve Requirement,
(2) then to the Interest Account in the Revenue Bond Fund if the
amount on deposit therein is less than the amount required to
comply with Section 604(a)(1), (3) then to the Principal Account
in the Revenue Bond Fund if the amount on deposit therein is less
than the amount required to comply with Section 604(a)(2), (4)
then to the Renewal and Replacement Account, if the amount on
deposit therein is less than the amount required to comply with
Section 604(g), and (5) otherwise to the Capital Improvement
Account, and (b) transferred from the Equity Account (1) to the
Renewal and Replacement Account if such funds were originally on
deposit therein, (2) to the Capital Improvement Account if such
funds were originally on deposit therein, and (3) otherwise to
any other fund or funds of the City not pledged to the payment of
Bonds and not expected to be used to pay Bonds, as directed by
the City Manager or the Director of Finance. Any such
reservation of moneys for payment of unpaid items of the Cost of
Projects shall be made first from amounts on deposit in the
General Account and then from amounts on deposit in the Equity
-24-
Account. The Director of Finance shall deliver a copy of any
such certificate to the Fiscal Agent within 15 days of receipt
thereof.
ARTICLE VI
REVENUES AND FUliDS
Section 601. Revenue covenant. The city shall fix, charge
and collect such rates, fees and other charges for the use of and
for the services furnished by the System, and shall, from time to
time and as often as shall appear necessary, revise such rates,
fees and other charges so as to meet the following two
independent requirements:
(a) Revenues shall be sufficient in each Fiscal Year to
equal the sum of (1) the operating Expenses shown in the Annual
operating Budget for such Fiscal Year, and (2) (A) 115% of the
sum of Maximum Annual Debt Service and Maximum Annual Prior
Parity Bond Debt Service, and (B) 100% of Maximum Annual
Additional Parity Debt Service.
(b) Revenues shall be sufficient in each Fiscal Year to
equal the sum of (1) the Operating Expenses shown in the Annual
operating Budget for such Fiscal Year, (2) the amount required to
be paid into the Renewal and Replacement Account in such Fiscal
Year, (3) the amount required to be paid into the Revenue Bond
Fund in such Fiscal Year, (4) the amount required to be paid into
the Parity Double Barrel Bond Fund in such Fiscal Year, (5) the
amount required to be paid into the Parity Debt Service Component
Fund in such Fiscal Year, (6) the ainount required to be paid into
the Subordinate Debt Fund in such Fiscal Year, (7) the amount of
any other indebtedness of the City attributable to the System
that is required to be paid in such Fiscal Year, (8) the amount
transferred to the Capital Improvement Account for the
immediately preceding Fiscal Year or such other amount as may be
determined by the Director of Public Utilities to be appropriate
for the System, and (9) any amount necessary to be paid into any
Series Debt Service Reserve Account to restore the amount on
deposit therein to the amount of the Series Debt Service Reserve
Requirement.
Section 602. Annual Operating Budget. (a) The City shall
adopt a budget for the operation of the System for each Fiscal
Year, which shall be called the Annual operating Budget, which
shall also include the required transfer to the Renewal and
Replacement Account. The Annual Operating Budget shall be part
of the City's operating budget and shall be adopted pursuant to
the requirements and the time periods imposed by the City Charter
or as otherwise required by the Virginia Code. The City shall
also adopt on an annual basis a budget of capital expenditures
-25-
for the System, including amounts to be transferred to the
Capital Improvement Account.
(b) The Annual Operating Budget shall be prepared in such
manner as to show in reasonable detail (1) all Revenues, (2) all
operating Expenses, (3) the amount required to be paid into the
Renewal and Replacement Account, (4) the amount of principal of
and premium, if any, and interest on the Prior Parity Bonds and
the Bonds that will become due during such Fiscal Year, (5) the
amount of principal of and premium, if any, and interest on the
Parity Double Barrel Bonds that will become due during such
Fiscal Year, (6) the amount of principal of and premium, if any,
and interest on the Subordinate Debt that will become due during
such Fiscal Year, (7) any amount necessary to be paid into the
Debt Service Reserve Fund to restore the amount on deposit in
each Account therein to the amount of the applicable Series Debt
Service Reserve Requirement, and (8) the amount of any other
indebtedness attributable to the System that is required to be
paid in such Fiscal Year. The Annual operating Budget shall be
prepared in sufficient detail to show the amounts to be deposited
in the various Funds, Accounts and subaccounts created by or
under this Resolution.
(c) The City may amend the Annual Operating Budget at any
time during the Fiscal Year. The City shall follow the same
procedure regarding any such amendment as provided in this
Section for the adoption of the Annual operating Budget.
Section 603. Funds and Accounts. There are hereby
established the following Funds and Accounts:
(a) City of virginia Beach Water and Sewer System Revenue
Fund, in which there are established a Revenue Account, a Renewal
and Replacement Account, a Capital Improvement Account and a
Residual Account, to be held by the City;
(b) City of Virginia Beach Water and Sewer System Revenue
Bond Fund, in which there are established a Prior Parity Bond
Account, an Interest Account and a Principal Account, to be held
by the Fiscal Agent;
(c) City of Virginia Beach Water and Sewer System Parity
Double Barrel Bond Fund, in which there are established an
Interest Account and a Principal Account, to be held by the
Fiscal Agent;
(d) City of Virginia Beach Water and Sewer System Parity
Debt Service Component Fund, to be held by the Fiscal Agent;
(e) City of Virginia Beach Water and Sewer System Debt
Service Reserve Fund, in which there shall be established Series
Debt Service Reserve Accounts for each Series of Bonds which has
-26-
a Series Debt Service Reserve Requirement, to be held by the
Fiscal Agent; and
(f) City of Virginia Beach Water and Sewer System
Subordinate Debt Fund, to be held by the City.
section 604. Revenue Fund. The city shall collect and
deposit in the Revenue Account in the Revenue Fund at least
weekly all rates, fees and other charges derived from the use of
and for the services furnished by the System. Moneys in the
Revenue Fund shall be used only in the manner and priority set
forth below. The City shall pay when due operating Expenses from
the Revenue Account in accordance with the Annual Operating
Budget. After retaining in the Revenue Account an amount equal
to the estimated amount of Operating Expenses for the next
succeeding two months as provided in the Annual Operating Budget,
the City shall transfer from the Revenue Fund, not later than the
twenty-fifth day of each month, moneys in the following order of
priority:
(a) to the Fiscal Agent for deposit in the Revenue Bond
Fund, an amount sufficient to make the following deposits:
(1) first, to the Prior Parity Bond Account in the
Revenue Bond Fund, such amount, if any, as may be required
to make the total amount on deposit therein equal (A) to
one-sixth of the amount of interest which will become due on
each series of Prior Parity Bonds within the next succeeding
six months multiplied by the sum of one plus the number of
complete months since the last interest payment date for
each series of Prior Parity Bonds, and (B) one-twelfth of
the amount of principal of each series of Prior Parity Bonds
maturing or required to be redeemed pursuant to any
mandatory sinking fund requirement within the next
succeeding 12 months multiplied by the sum of one plus the
number of complete months since the last principal payment
date of each series of Prior Parity Bonds;
(2) then, to the Interest Account in the Revenue Bond
Fund, such amount, if any, as may be required to make the
total amount on deposit therein equal to one-sixth of the
amount of interest which will become due on each Series of
Bonds within the next succeeding six months multiplied by
the sum of one plus the number of complete months since the
last interest payment date for each Series of Bonds; and
(3) then, to the Principal Account in the Revenue Bond
Fund, such amount, if any, as may be required to make the
total amount on deposit therein equal to one-twelfth of the
amount of principal of each Series of Bonds maturing or Term
Bonds required to be redeemed pursuant to any sinking fund
requirement within the next succeeding 12 months multiplied
-27-
by the sum of one plus the number of complete months since
the last principal payment date for each Series of Bonds;
provided, however, that for any series of BondS, if the period
between the dated date and the first interest payment date is
other than six months or the period between the dated date and
the first principal payment date is less than 12 months,
respectively, then such monthly transfers to the Interest Account
or the Principal Account, as appropriate, shall be increased or
decreased so as to provide the required amount when due.
(b) to the Fiscal Agent for deposit in the Parity Double
Barrel Bond Fund, an amount not less than is necessary to make
the following deposits:
(1) first, to the Interest Account in the Parity
Double Barrel Bond Fund, such amount, if any, as may be
required to make the total amount on deposit therein equal
to one-sixth of the amount of interest which will become due
on each issue of Parity Double Barrel Bonds within the next
succeeding six months multiplied by the sum of one plus the
number of complete months since the last interest payment
date for each issue of Parity Double Barrel Bonds;
(2) then, to the Principal Account in the Parity
Double Barrel Bond Fund, such amount, if any, as may be
required to make the total amount on deposit therein equal
to one-twelfth of the amount of principal of each issue of
Parity Double Barrel Bonds maturing or Parity Double Barrel
Term Bonds required to be redeemed pursuant to any sinking
fund requirement within the next succeeding 12 months
multiplied by the sum of one plus the number of complete
months since the last principal payment date for each issue
of Parity Double Barrel Bonds;
provided, however, that for any issue of Parity Double Barrel
Bonds, if the period between the dated date and the first
interest payment date is other than six months or the period
between the dated date and the first principal payment date is
less than 12 months, then such monthly transfers to the Interest
Account or Principal Account, as appropriate, shall be increased
or decreased so as to provide the required amount when due.
(c) to the Fiscal Agent for deposit in the Parity Debt
Service Component Fund, the amount of Parity Debt Service
Component coming due in the next succeeding month; provided,
however, that if any Parity Debt Service Component is payable
other than on a monthly basis, the City may provide for monthly
deposits to the Parity Debt Service Component Fund to amortize
such amounts.
(d) to the Fiscal Agent for deposit in the Debt Service
Reserve Fund, such amount, if any, necessary to increase the
-28-
amount on deposit in each Series Debt Service Reserve Account to
the amount of the applicable Debt Service Reserve Requirement.
(e) to the Subordinate Debt Fund such amount, if any, of
principal of and interest on Subordinate Debt coming due in the
next succeeding month; provided, however, that if any Subordinate
Debt is payable other than on a monthly basis, the City may
provide for monthly deposits to the Subordinate Debt Fund to
amortize such amounts;
(f) to the Renewal and Replacement Account one-twelfth of
$2,000,000 or such larger amount as may be recommended by the
Consulting Engineer and approved by the Council;
(g) on the twenty-fifth day of the first full month after
the approval by the Council of the City's capital improvement
program for each Fiscal Year, the annual amount budgeted for
deposit into the Capital Improvement Account (or such lesser
amount if the entire amount is not available in the Revenue
Account, in which event the balance shall be transferred from the
Residual Account); and
(h) on or after the twenty-fifth day of the last month of
the Fiscal Year, but in any event prior to the end of the Fiscal
Year, to the Residual Account any amount remaining in the Revenue
Account.
If the City fails to transfer to the Fiscal Agent the
amounts required by Subsections (a), (b), (c) and (d) above, the
Fiscal Agent shall give notice of such failure to the City
Manager and the Director of the Department of Public Utilities
within 10 days of such failure.
Notwithstanding anything in this Resolution to the contrary,
at any time the City is required to make transfers pursuant to
Subsections (a), (b) and (c) above, and there are insufficient
moneys in the Revenue Account to niake all required transfers
pursuant to such Sections, the City shall make the transfers
ratably from moneys available in the Revenue Fund.
Section 605. Revenue Bond Fund. The Fiscal Agent shall pay
when due to such person designated for such purpose by an
Authorized Representative of the City the principal of and
interest on the Prior Parity Bonds. The Fiscal Agent shall pay
when due the principal of and interest on the Bonds from the
Principal Account and the Interest Account, respectively.
The Fiscal Agent shall provide for redemption of any Term
Bonds in accordance with the schedules set forth in the
Supplemental Resolution for such Bonds; provided, however, that
on or before the 70th day next preceding any such sinking fund
payment date, the City may:
-29-
(a) deliver to the Fiscal Agent for cancellation Term Bonds
required to be redeemed on such sinking fund payment date in any
aggregate principal amount desired; or
(b) instruct the Fiscal Agent to apply a credit against the
City's next sinking fund redemption obligation for any such Term
Bonds that previously have been redeemed (other than through the
operation of the sinking fund) and canceled but not theretofore
applied as a credit against any sinking fund redemption
obligation.
Upon the occurrence of any of the events described in Subsection
(a) or (b) above, the Fiscal Agent shall credit against the
City's sinking fund redemption obligation on the next sinking
fund payment date the amount of such Term Bonds so delivered or
previously redeemed. Any principal amount of such Term Bonds in
excess of the principal amount required to be redeemed on such
sinking fund payment date shall be similarly credited in such
order as may be determined by the City Manager or Director of
Finance against future payments from the Revenue Fund to the
Principal Account within the Revenue Bond Fund and shall
similarly reduce the principal amount of the Term Bonds of the
applicable Series to be redeemed on the next sinking fund payment
date. Within seven days of receipt of such Term Bonds or
instructions to apply as a credit, any amounts remaining in the
Principal Account within the Revenue Bond Fund in excess of the
amount required to fulfill the remaining required sinking fund
redemption obligation on the next sinking fund payment date shall
either (1) be used to redeem Bonds or (2) be transferred to the
City for deposit to the Revenue Fund.
In the event the balance in the Principal Account or the
Interest Account within the Revenue Bond Fund is insufficient for
the purposes thereof, the City shall transfer to the Fiscal Agent
for deposit in such Accounts such amounts as may be necessary
therefor from available moneys in the Revenue Account pursuant to
Section 604, and then from the Residual Account pursuant to
Section 612, and then from the Renewal and Replacement Account
pursuant to Section 610. In the event the balance in any such
Account is still insufficient for the purposes thereof, the
Fiscal Agent shall transfer such amount as may be necessary
therefor from the applicable Series Debt Service Reserve Account
pursuant to Section 608.
In the event the amount on deposit in the Interest Account
within the Revenue Bond Fund on any interest payment date shall
exceed the amount required to pay interest on the Bonds on the
next interest payment date, the city shall (A) prior to delivery
of the certificate provided for in Section 504, instruct the
Fiscal Agent to transfer such excess to the General Account in
the Construction Fund, and (B) thereafter, if the amount on
deposit in any Series Debt Service Reserve Account is less than
the applicable Series Debt Service Reserve Requirement, instruct
-30-
the Fiscal Agent to transfer such excess to the Series Debt
Service Reserve Account, and otherwise retain any remaining
excess in the Interest Account or instruct the Fiscal Agent to
transfer any remaining excess to the Principal Account to be
credited against subsequent required deposits thereto, as
directed by the City Manager or the Director of Finance.
In the event the amount on deposit in the Principal Account
within the Revenue Bond Fund on any principal payment date shall
exceed the amount required on such date to pay Bonds at maturity
or to redeem Term Bonds pursuant to mandatory sinking fund
requirements, the City shall, if the amount on deposit in any
Series Debt Service Reserve Account is less than the applicable
Series Debt Service Reserve Requirement, instruct the Fiscal
Agent to transfer such excess to the Series Debt Service Reserve
Account to the extent of such deficiency, and otherwise retain
such excess in the Principal Account or instruct the Fiscal Agent
to transfer such excess to the Interest Account to be credited
against subsequent required deposits thereto, as directed by the
City Manager or the Director of Finance.
Section 606. Parity Double Barrel Bond Fund. The Fiscal
Agent shall pay when due to such person designated for such
purpose by an Authorized Representative of the City the principal
of and interest on Parity Double Barrel Bonds from the Principal
Account and the Interest Account, respectively, within the Parity
Double Barrel Bond Fund. Notwithstanding anything in this
Resolution to the contrary, the Parity Double Barrel Bond Fund is
not pledged to the payment of Bonds.
Section 607. Parity Debt Service Component Fund. The
Fiscal Agent shall pay when due to such person designated for
such purpose by an Authorized Representative of the City, any
Parity Debt Service Component from the Parity Debt Service
Component Fund. Notwithstanding anything in this Resolution to
the contrary, the Parity Debt Service Component Fund is not
pledged to the payment of Bonds.
Section 608. Debt Service Reserve Fund. The Fiscal Agent
shall use moneys in the Series Debt Service Reserve Accounts
within the Debt Service Reserve Fund to make transfers to the
Revenue Bond Fund to the extent necessary to pay when due the
principal of (whether at maturity or by mandatory sinking fund
redemption) and interest on the applicable Series of Bonds if the
amounts on deposit therein are insufficient therefor. Moneys in
each Series Debt Service Reserve Account shall only be pledged to
the Series of Bonds for which it was established and shall not be
used for any other Parity Obligations.
In the event the amount on deposit in a Series Debt Service
Reserve Account is less than the applicable Series Debt Service
Reserve Requirement, the Fiscal Agent shall transfer funds to
such Series Debt Service Reserve Account to restore such series
-31-
Debt Service Reserve Requirement from available moneys in the
Revenue Bond Fund pursuant to Section 605. In the event the
amount on deposit in a Series Debt Service Reserve Account is
less than the Series Debt Service Reserve Requirement after such
transfer from the Revenue Bond Fund, the City shall transfer to
the Fiscal Agent from available moneys in the Revenue Account
pursuant to Section 604, then from the Residual Account pursuant
to Section 612 and then from the Renewal and Replacement Account
pursuant to Section 610 such amount as may be necessary to
restore the Series Debt Service Reserve Account to the amount of
such Series Debt Service Reserve Requirement, or such lesser
amount as may be available. The City shall make up any
deficiency in any Series Debt Service Reserve Account resulting
from a transfer of funds to the Revenue Bond Fund by transferring
to the Fiscal Agent for deposit in such Account on the 25th day
of the month following such transfer and each month thereafter an
amount not less than one-sixth of such amount until such Account
is restored to its Series Debt Service Reserve Requirement.
In the event the amount on deposit in a Series Debt Service
Reserve Account exceeds the applicable Series Debt Service
Reserve Requirement, the Fiscal Agent shall (a) prior to delivery
of the certificate provided for in Section 504, transfer such
excess to the City for deposit in the General Account in the
Construction Fund, and (b) thereafter transfer such excess to the
Revenue Bond Fund to be deposited, as directed by an Authorized
Representative of the City, in the Interest Account or the
Principal Account to the extent amounts in such accounts are less
than the amounts required to be paid on the next interest payment
date and principal payment date, respectively, and otherwise
transfer any remaining excess to the Revenue Fund.
Section 609. Subordinate Debt Fund. The City shall pay
when due any obligations related to Subordinate Debt from the
Subordinate Debt Fund. The City may pay Remaining components
from the Subordinate Debt Fund. Notwithstanding anything in this
Resolution to the contrary, the Subordinate Debt Fund is not
pledged to the payment of the Bonds.
Section 610. Renewal and Replacement Account. The City
shall use moneys in the Renewal and Replacement Account as needed
in the following priority:
(a) To pay Operating Expenses for which the balance in the
Revenue Account, as certified by an Authorized Representative of
Public Utilities, may be insufficient;
(b) To make transfers to the Fiscal Agent for deposit in
the Revenue Bond Fund to the extent and in the manner provided in
Section 605(b); and
(c) To make transfers to the Fiscal Agent for deposit in
the Series Debt Service Reserve Account within the Debt Service
-32-
Reserve Fund to make up a deficiency in any Series Debt Service
Reserve Requirement to the extent and in the manner provided in
Sections 604(d) and 608.
(d) To pay the Cost of completing any Project;
(e) To pay the cost of replacements of major components of
the System and the cost of acquisition or construction of
improvements, extensions, additions or replacements required to
be charged to capital account by generally accepted accounting
principles and which constitute or will constitute a part of the
System.
so long as amounts in the Renewal and Replacement Account
are not needed for the uses described above, and to the extent
moneys in such Fund exceed the amount required to be on deposit
pursuant to Section 604, the City may use such excess amounts in
such Account, as directed by the City Manager or the Director of
Finance, for the following purposes:
(a) To purchase, for cancellation, Bonds at or below their
redemption price on the next date at which Bonds may be redeemed;
and
(b) To redeem Bonds at the earliest practicable date.
When the balances in the Revenue Bond Fund, the Debt Service
Reserve Fund and the Renewal and Replacement Account are
sufficient to redeem all Bonds then outstanding, the balances in
the Revenue Bond Fund and the Debt Service Reserve Fund may be
retained in such Funds and held for redemption of all Bonds then
outstanding at the earliest practicable date and for no other
purpose.
Notwithstanding anything in this Resolution to the contrary,
the Renewal and Replacement Account is not pledged to the payment
of Bonds.
Section 611. Capital Improvement Account. The City may use
moneys in the Capital Improvement Account for any lawful purpose
of the System, including without limitation transfers to the
Revenue Bond Fund to pay principal of and premium, if any, and
interest on Bonds. Notwithstanding anything in this Resolution
to the contrary, the Capital Improvement Account is not pledged
to the payment of Bonds.
Section 612. Residual Account. The City shall use moneys
in the Residual Account as needed in the following priority:
(a) To pay Operating Expenses for which the balance in the
Revenue Account (together with available amounts from the Renewal
and Replacement Account), as certified by an Authorized
Representative of Public Utilities, may be insufficient;
-33-
(b) To make transfers to the Fiscal Agent for deposit to
the Revenue Bond Fund to the extent and in the manner provided in
Section 605(b);
(c) To make transfers to the Fiscal Agent for deposit in
the Series Debt Service Reserve Accounts within the Debt Service
Reserve Fund to make up a deficiency in any Series Debt Service
Reserve Requirement to the extent and in the manner provided in
Sections 604(d) and 608;
(d) To make transfers to the Capital Improvement Account as
provided in Section 604(g);
(e) To pay Utility Transfers as approved by the Council;
and
(f) For any lawful purpose of the System.
Notwithstanding anything in this Resolution to the contrary,
the Residual Account is not pledged to the payment of Bonds.
Section 613. Payments in Aid of Construction. The City
shall deposit in a separate account in the Construction Fund any
payments made to the City by any persons as payment for
constructing water or sanitary sewer facilities at the request of
such persons, whether such payments are made prior to or after
such construction. Prior to the completion of construction of
such facilities, the City shall use moneys in such account only
to pay the cost of such construction. After completion of such
construction, the City may use any funds remaining in such
account for any lawful purpose of the System. Notwithstanding
anything in this Resolution to the contrary, such account is not
pledged to the payment of Bonds.
Section 614. other Funds and Accounts. The City may
establish in each Supplemental Resolution such other Funds and
Accounts within Funds as the City may determine to be desirable.
Section 615. Pledge of Revenues and Certain Funds and
Accounts. Revenues and moneys in the Revenue Account are hereby
pledged equally and ratably to the payment of principal of and
interest on all Parity Obligations, subject only to the right of
the City to make application thereof to purposes as provided
herein. moneys in the General Account within the Construction
Fund, the Revenue Bond Fund (except for the Prior Parity Bond
Account) and the Debt Service Reserve Fund shall be trust funds
and are hereby pledged equally and ratably to the payment of the
principal of and interest on all Bonds, subject only to the right
of the City to make application thereof, or to direct the Fiscal
Agent to make application thereof, to other purposes as provided
herein. The lien and trust hereby created are for the benefit of
the Bondholders and for their additional security until all the
Bonds have been paid; provided, however, that the moneys in each
-34-
Series Debt Service Reserve Account shall only secure the
applicable Series of Bonds.
ARTICLE VII
SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS
Section 701. security for Deposits. All moneys held in the
Funds and Accounts created by this Resolution which are on
deposit with any bank shall be continuously secured in the manner
required by the Virginia security for Public Deposits Act or any
successor provision of law.
Section 702. Investment of Moneys. Any moneys held in the
Funds and Accounts shall be separately invested and reinvested by
or at the written direction of the City Treasurer, after
consultation with the Director of Finance, in Investment
obligations, subject to the limitations stated herein.
Investment Obligations shall mean the following, so long as they
are authorized for investment of public funds by Section 2.1-328
et sea. of the Virginia Code or other provisions of law
applicable to such investments:
(a) Government Obligations;
(b) Government Certificates;
(c) Defeased obligations;
(d) bonds, notes and other evidences of indebtedness of the
Commonwealth and securities unconditionally guaranteed as to the
timely payment of principal and interest by the Commonwealth, so
long as such obligations are rated by one or more of the Rating
Agencies with ratings equal to or higher than the ratings on the
Bonds;
(e) commercial paper with a maturity of 270 days or less,
which complies with the requirements of Section 2.1-328.1 of the
Virginia Code, so long as such commercial paper is rated by the
Rating Agencies with ratings equal to or higher than the ratings
on the Bonds;
(f) bankers acceptances which comply with the requirements
of Section 2.1-328.3 of the Virginia Code;
(g) savings accounts, time deposits, certificates of
deposit and other interest bearing accounts of any (1) national
bank located within the Commonwealth or (2) state-chartered bank,
provided that such funds are secured in the manner required by
the Virginia Security for Public Deposits Act or any successor
provision of law and that no deposits made under this Subsection
shall be made for a period in excess of five years; and
-35-
(h) savings accounts and certificates of deposit of (1)
savings institutions which are under supervision of the
Commonwealth and (2) Federal institutions located within the
Commonwealth organized under the laws of the United States of
America and under Federal supervision, but only to the extent
that such accounts and certificates are fully insured by the
Federal Deposit Insurance Corporation or any other Federal
insurance agency, unless such deposits in excess of the amount
insured shall be fully collateralized (A) by eligible collateral
as defined in Section 2.1-360(e) of the virginia Code, (B) by
Government National Mortgage Association Pass-through
Certificates, (C) by Federal National Mortgage Association
Guaranteed Pass-through Certificates, (D) by Federal Home Loan
Mortgage Corporation Participation certificates, or (E) as
provided by the Virginia Security for Public Deposits Act or any
successor provision of law, provided that no deposits made under
this Subsection shall be made for a period in excess of five
years.
(i) units representing beneficial interests in investment
pools created pursuant to the Government Non-Arbitrage Investment
Act.
Any moneys held in the Revenue Bond Fund and the Debt
Service Reserve Fund shall be separately invested and reinvested
by the Fiscal Agent at the direction of the City Treasurer in
investments described in Subsections (a), (b), (d), (g) and (h)
of this Section, so long as they are authorized for investment of
public sinking funds by Section 2.1-327 of the Virginia Code or
other provisions of law applicable to such investments.
Any investments described in Subsections (a) and (b) of this
Section may be purchased pursuant to an overnight, term or open
repurchase agreement with any (1) bank or trust company,
including an affiliate of the Fiscal Agent, within or without the
Commonwealth having a combined capital, surplus and undivided
profits of not less than $50,000,000, (2) qovernment bond dealer
reporting to, trading with and recognized as a primary dealer by
the Federal Reserve Bank of New York and which is a member of the
Security Investors Protection Corporation or with a dealer or
parent holding company that is rated in one of the top three
rating categories by one or more of the Rating Agencies, provided
that the obligation of any bank or government bond dealer to
repurchase shall not exceed the lesser of five years or the time
limitations for investments set forth below. Such repurchase
agreement shall be considered a purchase of such securities even
if title to and/or possession of such securities is not
transferred to the City, Fiscal Agent, bank or government dealer,
as applicable, so long as (A) the repurchase obligation is
collateralized by the securities themselves, (B) such securities
have on each day the repurchase agreement is in effect a fair
market value equal to at least 102% of the amount of the
repurchase obligation, including principal and interest, (C) such
-36-
securities are held by a third party as agent for the benefit of
the City, Fiscal Agent, bank or government dealer, as applicable,
as fiduciary for the holders of the Bonds and are segregated from
securities owned generally by such third party, and (D) a
perfected first security interest in such securities is created
for the benefit of the holders of the Bonds under the Uniform
Commercial Code of Virginia or book entry procedures prescribed
at 31 C.F.R. 306.1 et seq. or 31 C.F.R. 350.0 et seq. In the
event the fair market value of such securities falls below the
level required by (B) above and is not replenished within 48
hours, the City shall sell and reduce such investments to cash.
Investments in a money market or other fund, investments of
which fund are exclusively in obligations or securities described
in Subsections (a), (b) and (d) of this Section, shall be
considered investments in obligations described in Subsections
(a), (b) and (d) of this Section.
Moneys held in the following Funds and Accounts shall be
invested in obligations described in this Section of the
following maturities:
(1) Construction Fund - not later than the dates on
which such moneys will be needed to pay Costs of a Project;
(2) Revenue Account within the Revenue Fund - not
later than the last dates on which such moneys will be
needed to be transferred to any other Fund or Account (or if
investment obligations are transferred, not later than
maturities for investment obligations for the applicable
Fund or Account);
(3) Revenue Bond Fund, Parity Double Barrel Bond Fund
and Subordinate Debt Fund - not later than the dates on
which such moneys will be needed to pay principal of or
interest on Prior Parity Bonds, Bonds, Parity Double Barrel
Bonds and Subordinate Debt, respectively;
(4) Parity Debt Service Component Fund - not later
than the dates on which such moneys will be needed to pay
Parity Debt Service Components;
(5) Series Debt Service Reserve Accounts within the
Debt Service Reserve Fund - not later than the earlier of
five years from the date of acquisition of the investment or
the final maturity of the applicable Series of Bonds;
(6) Renewal and Replacement Account and Capital
Improvement Account within the Revenue Fund - not later than
the dates needed to pay costs from such Accounts; and
(7) Residual Account within the Revenue Fund - not
later than the earlier of five years from the date of
-37-
I
acquisition of the investment or the final maturity of the
Bonds.
For purposes of this Section, investments shall be
considered as maturing on the date on which they are redeemable
without penalty at the option of the holder or the date on which
the City may require their repurchase pursuant to a repurchase
agreement.
Whenever a payment or transfer of moneys between Funds or
Accounts is permitted or required, such payment or transfer may
be made in whole or in part by transfer of one or more investment
obligations at a value determined in accordance with Section 704,
provided that the Investment Obligations transferred are
permitted investments for the Fund or Account receiving such
Investment Obligations.
Unless otherwise provided in this Resolution, earnings on
Investment Obligations shall accrue to the Fund or Account in
which such Investment Obligations are on deposit, or, at the
written direction of the Treasurer, shall be transferred to and
deposited in the Revenue Fund.
Section 703. Investment of Surplus Moneys. The City and
the Fiscal Agent shall provide for the investment of all moneys
in any Fund or Account held by it not immediately necessary for
the purposes of such Fund or Account so that all idle moneys may
be invested for the benefit of the Bondholders.
Section 704. valuation of Investments. In computing the
amount in any Fund or Account created by this Resolution, except
for the Debt Service Reserve Fund, obligations purchased as an
investment of moneys therein maturing or subject to redemption at
the option of the holder thereof having an average aggregate
weighted term to maturity of (a) greater than five years shall be
valued at the amortized cost or the market value thereof,
whichever is lower, and (b) of five years or less shall be valued
at the amortized cost thereof. Investments in the Debt Service
Reserve Fund shall be valued at cost. All such valuations
pursuant to this Section shall be made exclusive of accrued
interest other than accrued interest paid upon the purchase
thereof but not yet received. Such valuations shall be made by
the party holding each such Fund or Account at least annually not
later than the end of each Fiscal Year and at such other times as
the City may deem appropriate.
Section 705. Investments Through Fiscal Agent's Bond
Department. The Fiscal Agent may make investments permitted by
Section 702 through its own bond department or the bond
department of any affiliate.
-38-
Section 706. investments by Fiscal Agent. The Fiscal Agent
shall not be liable for any losses resulting from investments
made by it pursuant to the provisions of Section 702.
Section 707. investments in Bonds by riscal Agent. The
bank or trust company acting as Fiscal Agent and its directors,
officers, employees or agents may in good faith buy, sell, own,
hold and deal in the Bonds and may join in any action which any
Bondholder may be entitled to take with like effect as if such
bank or trust company were not the Fiscal Agent. To the extent
permitted by law, such bank or trust company may also receive
tenders and purchase in good faith Bonds from itself, including
any department, affiliate or subsidiary, with like effect as if
it were not the Fiscal Agent.
ARTICLE VIII
PARTICULAR COVENANTS
Section 801. Payment of Bonds; Limited Obligations. The
City shall promptly pay or cause to be paid when due the
principal of (whether at maturity, by acceleration, call for
redemption or otherwise) and premium, if any, and interest on the
Bonds at the places, on the dates and in the manner provided
herein and in the Bonds according to the true intent and meaning
thereof; provided, however, that such obligations are not general
obligations of the City but are limited obligations payable
solely from Revenues, except to the extent payable from the
proceeds of Bonds, the income, if any, derived from the
investment thereof, certain reserves, income from investments
pursuant to this Resolution or proceeds of insurance, which
Revenues and other moneys are hereby specifically pledged to such
purposes in the manner and to the extent provided herein. The
Bonds, the premium, if any, and the interest thereon shall not be
deemed to create or constitute an indebtedness or a pledge of the
faith and credit of the Commonwealth or of any county, city, town
or other political subdivision thereof, including the city.
Section 802. Limitations on Indebtedness. (a) The City
shall not issue any bonds, notes or other obligations that shall
be secured by a pledge of Revenues (1) senior to the pledge of
Revenues securing the Bonds or (2) on parity with the pledge of
Revenues securing the Bonds other than Parity Obligations.
(b) The City shall not issue Parity Double Barrel Bonds or
incur Parity Debt Service Component indebtedness unless the City
satisfies the test set forth in Section 304(h)(3).
Section 803. Covenants and Representations of City. The
City shall faithfully observe and perform all covenants,
conditions and agreements on its part contained in this
Resolution, in every Bond issued hereunder and in all proceedings
-39-
of the City pertaining thereto. The City represents that it is
duly authorized under the Constitution and the laws of the
Commonwealth, including without limitation the City's Charter and
the Public Finance Act, to issue the Bonds, to adopt this
Resolution, and to pledge Revenues in the manner and to the
extent herein set forth. The City covenants that it will take
all action necessary for issuance of the Bonds and the adoption
of this Resolution; and that upon issuance the Bonds will be
valid and enforceable obligations of the City according to the
import thereof.
Section 804. Covenants with Credit Banks, Insurers, etc.
The City may make such covenants and agreements in a Supplemental
Resolution as it may determine to be appropriate with any
insurer, credit bank or other financial institution that shall
agree to insure or to provide credit or liquidity support to
enhance the security or the value of any Bonds. Such covenants
and agreements may be set forth in the applicable Supplemental
Resolution and shall be binding on the City and all the
Bondholders the same as if such covenants were set forth in full
in this Resolution.
Section 805. Operation and Maintenance. The City shall
establish and enforce reasonable rules and regulations governing
the use of and the services furnished by the System, shall
maintain and operate the System in an efficient and economical
manner, shall maintain the same in good repair and sound
operating condition, and shall make all necessary repairs,
replacements and renewals. All compensation, salaries, fees and
wages paid by the City in connection with the operation and
maintenance of the System shall be reasonable. The City shall
observe and perform all of the terms and conditions contained in
the Public Finance Act and comply with all valid acts, rules,
regulations, orders and directions of any legislative, executive,
administrative or judicial body applicable to the System or the
City.
Section 806. Free Service, Competing Service, Billing
and Enforcement of Charges. (a) The City shall not permit
connections to or use of the System or provide any services of
the System without making a charge therefor in accordance with
the City's schedule of rates, fees and charges for the System
other than those connections, use or services already in
existence; provided, however, the City may accept proffers and
other forms of payment in lieu of cash payments that the City
deems are in its best interest to accept.
(b) The City shall not provide, grant any franchise to
provide or give consent for anyone else to provide any services
which would compete with the System unless the City determines
that such franchise or provision of services would provide
services that the City has determined are not in its best
interest to provide.
-40-
(c) The City shall bill customers for the services of the
System no less frequently than quarterly.
(d) If any rates, fees or other charges for the use of or
for the services furnished by the System shall not be paid within
90 days after the same shall become due and payable, or within
such shorter time as may be determined by the City, the City
shall at the expiration of such period, to the extent permitted
by applicable laws and regulations, disconnect the premises from
the System or otherwise suspend service to such premises until
such delinquent rates, fees or other charges and any interest,
penalties or charges for reconnection of service to such
delinquent customer shall have been paid in full.
(e) The City shall take all such action as may be necessary
to perfect liens upon real estate for the amount of any unpaid
rates, fees or other charges described in Subsection (d) of this
Section or any unpaid connection charges or other charges so that
such liens will be binding upon subsequent bona fide purchasers
for valuable consideration without actual notice thereof.
Section 807. Sale or Encumbrance of System. Neither the
System nor any integral part thereof shall be leased, sold or
otherwise disposed of without an Independent Consulting Engineer
certification that such disposition will not have a negative
impact on the overall viability of the System unless the proceeds
of such disposition, together with any other available funds, are
sufficient to pay the principal of and premium, if any, and
interest on all Bonds then outstanding and the proceeds are used
for such purpose. The City shall not create or suffer to be
created any lien or charge upon the System or any part thereof or
any lien or charge upon Revenues and other funds pledged herein
ranking equally with or prior to the lien and charge of the
Bonds, except as provided herein. Notwithstanding anything in
this Resolution to the contrary, the City may acquire items of
personal property constituting part of the System under lease
purchase agreements or similar financing arrangements entered
into in the ordinary course of business which may be subject to
purchase money security interests or other liens in an aggregate
amount not to exceed $1,000,000.
Section 808. Insurance. The City shall continuously
maintain insurance with recognized responsible commercial
insurance companies against such risks and in such amounts as are
customary for public bodies owning and operating similar systems,
including without limitation (a) fire insurance and extended
coverage against loss or damage to the System, (b) public
liability insurance against liability for bodily injury,
including death resulting therefrom, and for damage to property,
including loss of use thereof, arising out of the ownership or
operation of the System, and (c) workers' compensation insurance
with respect to the System.
-41-
In lieu of insurance written by commercial'insurance
companies, the City may maintain a program of self insurance or
participate in group risk financing programs, including without
limitation sponsored insurance programs, risk pools, risk
retention groups, purchasing groups and captive insurance
companies, and in state or Federal insurance programs; provided,
however, that the City shall obtain and maintain on file a
favorable written opinion of a Qualified Independent Consultant
that such alternative is reasonably acceptable under all the
circumstances.
Section 809. Damage, Destruction, Condemnation and Loss
of Title. If all or any part of the System is destroyed or
damaged by fire or other casualty, condemned or lost by failure
of title, the City shall restore promptly the property damaged or
destroyed to substantially the same condition as before such
damage, destruction, condemnation or loss of title with such
alterations and additions as the City may determine and which
will not impair the capacity or character of the System for the
purpose for which it is then being used or is intended to be
used; provided, however, that the city may prepay in whole all
Bonds then outstanding with the Net Proceeds and any other funds
that may be available for such purpose and provided, further,
that such prepayment is in accordance with the terms of this
Resolution and pursuant to the appropriate optional redemption
provisions for each Series of Bonds then Outstanding. The City
shall apply so much as may be necessary of the Net Proceeds
received on account of any such damage, destruction, condemnation
or loss of title to payment of the cost of such restoration,
either on completion or as the work progresses. If such Net
Proceeds are not sufficient to pay in full the cost of such
restoration, the City shall pay so much of the cost as may be in
excess of such Net Proceeds from any legally available funds.
Any balance of such Net Proceeds remaining after payment of the
cost of such restoration shall be deposited in the Revenue Fund.
Section 810. Records and Accounts; Inspections and Reports.
(a) The City shall keep proper books of records and accounts,
separate from any of its other records and accounts, showing
complete and correct entries of all transactions relating to the
System, and any Bondholder shall have the right at all reasonable
times to inspect the System and all records, accounts and data
relating thereto. The City shall also cause a certified audit of
its records and accounts to be made in accordance with generally
accepted accounting principles by an independent certified public
accountant or the Auditor of Public Accounts of the Commonwealth
at the end of each Fiscal Year which shall reflect in reasonable
detail the financial condition and record of operation of the
System.
(b) The City shall cause an Independent Consulting Engineer
at least once every five years to inspect the System and make a
written report thereof which shall include such Independent
-42-
Consulting Engineer's findings and recommendations as to the
maintenance of the System and the construction of additions,
extensions and improvements to the System and capital
replacements thereof. Such report shall be completed in
sufficient time so that the City may take into account any
recommendations thereof in preparing its next Annual Operating
Budget.
Section 811. service Agreements. (a) The City may enter
into service agreements for the benefit of the System, provided
that such agreements shall specify the items payable as the Debt
Service Component of the Cost of Contracted Services and
provided, further, that the City shall not enter into any service
agreements that would create Parity Debt Service Components
unless the City satisfies the test set forth in Section
304(h)(3).
(b) The City shall faithfully fulfill all lawful
requirements of all service agreements and shall require all
other parties thereto to fulfill their lawful obligations
thereunder.
(c) The Director of Finance shall determine in writing on
or before the effective date of any service agreement the amounts
and due dates of any Debt Service Component of the Cost of
Contracted Services and any Parity Debt Service Component payable
by the City under such service agreement and the interest and
principal portions of such components.
ARTICLE IX
DEFAULTS AND REMEDIES
Section 901. Events of Default. Each of the following
events shall be an Event of Default:
(a) Default in the due and punctual payment of the
principal of or premium, if any, on any Bond (whether at
maturity, by acceleration, call for redemption or otherwise);
(b) Default in the due and punctual payment of the interest
on any Bond;
(c) Failure of the City to observe and perform any of its
other covenants, conditions or agreements under this Resolution
or in the Bonds for a period of 60 days after written notice from
the Fiscal Agent or holders of not less than 25% in aggregate
principal amount of Bonds then outstanding, specifying such
failure and requesting that it be remedied, or in the case of any
such default that cannot with due diligence be cured within such
60 day period, failure of the City to proceed promptly to cure
-43-
the same and thereafter prosecute the curing of such default with
due diligence;
(d) Destruction or damage to any substantial part of the
System to the extent of impairing its efficient operation or
adversely affecting Revenues to a substantial degree and failure
for any reason promptly to repair, replace or reconstruct the
same (whether such failure promptly to repair, replace or
reconstruct the same be due to the impracticability of such
repair, replacement or reconstruction, the lack of moneys
therefor or for any other reason);
(e) (1) commencement by the City of a voluntary case under
the Federal bankruptcy laws, as now or hereafter constituted, or
any other applicable Federal or state bankruptcy, insolvency or
similar law, (2) consent by the City to the appointment of a
receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar official for the City, the System or any
substantial part of the City's property, or to the taking
possession by any such official of the System or any substantial
part of the City's property, (3) making by the City of any
assignment for the benefit of creditors, or (4) taking of
corporate action by the City in furtherance of any of the
foregoing;
(f) The entry of any (1) decree or order for relief by a
court having jurisdiction over the City or its property in an
involuntary case under the Federal bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal or state
bankruptcy, insolvency or other law, (2) appointment of a
,receiver, liquidator, assignee, trustee, custodian, sequestrator
or similar official for the City, the System or any substantial
part of the City's property, or (3) order for the termination or
liquidation of the City or its affairs; or
(g) Failure of the City within 60 days after the
commencement of any proceedings against it under the Federal
bankruptcy laws or any other applicable Federal or state
bankruptcy, insolvency or similar law, to have such proceedings
dismissed or stayed.
The provisions of Subsections (c) and (d) of this Section
are subject to the limitation that if by reason of force majeure
the City is unable in whole or in part to observe and perform any
of its covenants, conditions or agreements hereunder, other than
its obligations contained in Sections 601, 801, 806(b), 807, 808
and 907, the City shall not be deemed in default during the
continuance of such disability. The term "force majeurell as used
herein shall include without limitation acts of God; strikes,
lockouts or other industrial disturbances; acts of public
enemies; orders of any kind of the government of the United
States of America or of the Commonwealth or any of their
departments, agencies, political subdivisions or officials, or
-44-
any civil or military authority; insurrections; riots; epidemics;
landslides; lightning; earthquakes; fires; hurricanes; storms;
floods; washouts; droughts; arrests; restraint of government and
people; civil disturbances; explosions; breakage or accident to
machinery, transmission pipes or canals; partial or entire
failure of utilities; or any other cause or event not reasonably
within the control of the City. The City shall, however, remedy
with all reasonable dispatch the cause or causes preventing it
from carrying out its agreements, provided that the settlement of
strikes, lockouts and other industrial disturbances shall be
entirely within the discretion of the City, and the City shall
not be required to make settlement of strikes, lockouts and other
industrial disturbances by acceding to the demands of the
opposing party or parties when such course is in the judgment of
the City unfavorable to it.
Section 902. Notice to Bondholders of Certain Default. If
the Fiscal Agent is required to draw moneys from the Debt Service
Reserve Fund to pay principal or interest on the Bonds and the
City fails to begin replenishing the Debt Service Reserve Fund
within 60 days in accordance with the replenishment requirements
of Section 608 or fails to make any subsequent deposit required
by Section 608, then the Fiscal Agent shall send a notice to the
Bondholders notifying them (a) of such draw and (b) of their
right to appoint a Trustee if and when an Event of Default occurs
as described in Section 903.
Section 903. Appointment of Trustee. Upon the occurrence
and continuation of an Event of Default, the Holders of not less
than 25% in aggregate principal amount of outstanding Bonds may
call a meeting of the Bondholders for the purpose of appointing a
Trustee (if a Trustee has not been appointed previously for all
holders of outstanding Bonds pursuant to a Supplemental
Resolution adopted by the Council in accordance with the
provisions of Section 1101). At such meeting the holders of not
less than a majority in aggregate principal amount of Outstanding
Bonds must be present in person or by proxy in order to
constitute a quorum for the transaction of business, less than a
quorum, however, having power to adjourn from time to time
without any other notice than the announcement thereof at the
meeting. A quorum being present at such meeting, the Bondholders
present in person or by proxy may, by a majority of the votes
cast, appoint a bank or trust company having an office in the
Commonwealth as Trustee for the Bondholders. Upon such
appointment, the Trustee shall be the trustee for the holders of
all Outstanding Bonds and shall be empowered to exercise in the
name of the Bondholders all the rights and powers conferred in
the Resolution on Bondholders; provided, however, that whenever
any provision hereof requires the consent, approval or
concurrence of the Holders of a specified percentage in principal
amount of outstanding Bonds in order to exercise the right or
power conferred in this Resolution on the Bondholders to which
such percentage obtains, the Trustee shall thereby represent the
-45-
holders of such specified percentage in principal amount of the
Bonds. A certificate as to the appointment of the Trustee shall
be filed with the Clerk.
Section 904. Acceleration. Upon the occurrence and
continuation of an Event of Default, the Trustee may (and if
requested by the holders of not less than 25% in aggregate
principal amount of outstanding Bonds shall) or if there is no
Trustee, the holders of not less than 25% in aggregate principal
amount of Outstanding Bonds may, by written notice to the City,
declare the entire unpaid principal of the Bonds due and payable
and, thereupon, the entire unpaid principal of the Bonds shall
forthwith become due and payable. Upon any such declaration the
city shall forthwith pay to the Bondholders the entire unpaid
principal of and premium, if any, and accrued interest on the
Bonds, but only from Revenues and other moneys herein
specifically pledged for payments of Bonds. If at any time after
such a declaration and before the entry of a final judgment or
decree in any suit, action or proceeding instituted on account of
such default or before the completion of the enforcement of any
other remedy under this Resolution, the principal of all Bonds
that have matured or been called for redemption pursuant to any
sinking fund provision and all arrears of interest have been paid
and any other Events of Default which may have occurred have been
remedied, then the Trustee or, if there is none, the holders of
not less than 25% in aggregate principal amount of Outstanding
Bonds may, by written notice to the City, rescind or annul such
declaration and its consequences. No such rescission or
annulment shall extend to or affect any subsequent default or
impair any right consequent thereon.
Section 905. Receiver. Upon the occurrence and
continuation of an Event of Default for a period of 60 days and,
if there is no Trustee, the holders of not less than 25% in
aggregate principal amount of Outstanding Bonds shall be entitled
to the appointment of a receiver upon application to the Circuit
Court of the City of Virginia Beach or to any other court of
competent jurisdiction in the Commonwealth. Any receiver so
appointed may enter and take possession of the System, operate,
maintain and repair the same, to the extent permitted by law
impose and prescribe rates, fees and other charges, and receive
and apply all Revenues in the same manner as the City itself
might do. No bond shall be required of such receiver.
Section 906. Other Remedies; Rights of Bondholders. Upon
the occurrence and continuation of an Event of Default, the
Trustee may (and if requested by the holders of not less than 25%
in aggregate principal amount of outstanding Bonds and if
indemnified in accordance with prevailing industry standards
shall) or if there is no Trustee, the Bondholders may proceed to
protect and enforce their rights by mandamus or other suit,
action or proceeding at law or in equity, including an action for
-46-
specific performance of any covenant or agreement herein
contained.
No remedy conferred by this Resolution upon or reserved to
the Trustee or Bondholders is intended to be exclusive of any
other remedy, but each such remedy shall be cumulative and shall
be in addition to any other remedy given to the Trustee or
Bondholders hereunder or now or hereafter existing at law, in
equity or by statute.
No delay or omission to exercise any right or power accruing
upon any default or Event of Default shall impair any such right
or power or shall be construed to be a waiver of any such default
or Event of Default or acquiescence therein, and every such right
and power may be exercised from time to time and as often as may
be deemed expedient.
No waiver of any default or Event of Default hereunder by
the Trustee or Bondholders shall extend to or shall affect any
subsequent default or Event of Default or shall impair any rights
or remedies consequent thereon.
Section 907. Unconditional Right To Receive Principal,
Premium and Interest. Nothing in this Resolution shall, however,
affect or impair the right of the Trustee or any Bondholder to
enforce, by action at law, payment of the principal of or
premium, if any, or interest on any Bond at and after the
maturity thereof, or on the date fixed for redemption or upon the
same being declared due prior to maturity as herein provided, or
the obligation of the City to pay the principal of and premium,
if any, and interest on each of the Bonds issued hereunder to the
respective holders thereof at the time and place, from the source
and in the manner herein and in the Bonds expressed.
ARTICLE X
DEFEASANCE OF BONDS
Section 1001. Defeasance of Bonds. If (a) all Bonds shall
have become due and payable in accordance with their terms or
otherwise as provided in this Resolution or have been duly called
for redemption or irrevocable instructions to call the Bonds or
to pay them at maturity have been given by the City to the
Registrar and (b) a bank or trust company acting as escrow agent
holds cash, noncallable Government Obligations or, if permitted
by the laws of the Commonwealth, noncallable Government
Certificates or noncallable Defeased Obligations, the principal
of and the interest on which at maturity will be sufficient (1)
to redeem in accordance with the relevant Sections hereof and in
any applicable Supplemental Resolution all Bonds that have been
called for redemption, or for which irrevocable instructions for
call for redemption have been given, on the date set for such
-47-
redemption, (2) to pay at maturity all Bonds not irrevocably
called for redemption, (3) to pay interest accruing on all Bonds
prior to their redemption or payment at maturity, (4) to make all
required arbitrage rebate payments to the United States of
America, and (5) to pay to the escrow agent its reasonable fees
and expenses and any other fees and expenses for which the City
is responsible under this Resolution, then the covenants, liens
and pledges and entered into, created or imposed pursuant hereto
shall be fully discharged.
Bonds for the payment or redemption of which cash,
noncallable Government Obligations or, if permitted by the laws
of the Commonwealth, noncallable Government Certificates or
noncallable Defeased obligations, the principal of and premium,
if any, and interest on which will be sufficient therefor shall
have been deposited with the escrow agent (whether upon or prior
to the date of their maturity or their redemption date) shall be
deemed to be paid, shall no longer be entitled to the benefits
provided by this Resolution and shall be deemed to be no longer
Outstanding; provided, however, that if such Bonds are to be
redeemed prior to the maturity thereof, irrevocable notice of
such redemption shall have been duly given or irrevocable
arrangements satisfactory to the Registrar shall have been made
for the giving thereof.
ARTICLE XI
SUPPLEMENTAL RESOLUTIONS
Section 1101. Supplemental Resolutions Not Requiring Consent
of Bondholders. The City may, without the consent of, or notice
to, any of the Bondholders, adopt Supplemental Resolutions as
shall not be inconsistent with the intent of the terms and
provisions hereof for any one or more of the following purposes:
(a) To cure any ambiguity, formal defect or omission in
this Resolution;
(b) To grant to or confer upon the Bondholders any
additional rights, remedies, powers or authority that may
lawfully be granted to or conferred on the Bondholders;
(c) To add to the covenants and agreements of the City in
this Resolution other covenants and agreements to be observed by
the City;
(d) To modify, amend or supplement this Resolution in such
manner as required to permit the City to comply with the
provisions of the Code relating to the rebate to the United
States of America of earnings derived from the investment of the
proceeds of Bonds, provided that such modification, amendment or
-48-
supplement does not materially adversely affect the holders of
all Outstanding Bonds;
(e) To modify, amend or supplement this Resolution in such
manner as may be required by a Rating Agency to maintain its
rating on the Bonds, provided that such modification, amendment
or supplement does not materially adversely affect the holders of
all Outstanding Bonds;
(f) To modify, amend or supplement this Resolution to
implement any covenants or agreements contemplated by Section
804;
(g) To authorize the issuance of and to secure one or more
Series of Bonds pursuant to Article III; and
(h) To provide for a bank or trust company having an office
in the Commonwealth to act as trustee for all the outstanding
Bonds, including without limitation provisions for (1)
qualifications, (2) duties, (3) resignation, and (4)
replacements.
Section 1102. Supplemental Resolutions Requiring Consent
of Bondholders. Exclusive of Supplemental Resolutions authorized
by Section 1101 and subject to the terms and provisions contained
in this Section, the holders of not less than a majority in
aggregate principal amount of Outstanding Bonds shall have the
right from time to time, notwithstanding anything in this
Resolution to the contrary, to consent to the adoption by the
City of such other resolution or resolutions supplemental hereto
as shall be deemed necessary or desirable by the City for the
purpose of modifying, altering, amending, adding to or
rescinding, in any particular, any of the terms or provisions
contained in this Resolution and any Supplemental Resolution;
provided, however, that nothing in this Resolution shall permit,
or be construed as permitting, (a) an extension of the maturity
of the principal of or the interest on any Bond, (b) a privilege
or priority of any Bond or Bonds over any other Bond or Bonds,
(c) a reduction in the aggregate principal amount of Bonds
required for consent to such Supplemental Resolution, (d) a
reduction in the principal amount of or premium, if any, on any
Bond or the rate of interest thereon, or (e) an extension of time
or a reduction in amount of any payment required by any sinking
fund that may be applicable to any Bond, without the consent of
the holders of all of the outstanding Bonds.
If at any time the City desires to enter into any such
Supplemental Resolution, the City shall cause notice of the
proposed adoption of such Supplemental Resolution to be sent by
registered or certified mail to the registered owner of each Bond
at his address as it appears on the registration books. Such
notice shall briefly set forth the nature of the proposed
Supplemental Resolution and shall state that a copy thereof is on
-49-
file with the Clerk for inspection by all Bondholders. if,
within 90 days or such longer period as shall be prescribed by
the City following the giving of such notice, the holders of not
less than a majority in aggregate principal amount of Outstanding
Bonds, or in the case of (a) through (e) above, the holders of
all Outstanding Bonds, shall have consented to and approved the
adoption thereof as herein provided, no holder of any Bond shall
have any right to object to any of the terms and provisions
contained therein, or the operation hereof, or in any manner to
question the propriety thereof, or to enjoin or restrain the City
from adopting such Supplemental Resolution or from taking any
action pursuant to the provisions thereof. Upon the adoption of
any such Supplemental Resolution as in this section permitted and
provided, this Resolution shall be and be deemed to be modified
and amended in accordance therewith.
Bonds owned or held by or for the account of the City shall
not be deemed Outstanding for the purpose of consent or any
calculation of outstanding Bonds provided for in this Resolution.
At the time of any such calculation, the City shall furnish the
Registrar a certificate of the Director of Finance, upon which
the Registrar may rely, describing all Bonds so to be excluded.
Notwithstanding anything in this Resolution to the contrary,
the City may adopt any Supplemental Resolution upon receipt of
the consent of the holders of all outstanding Bonds.
ARTICLE XII
MISCELLANEOUS
Section 1201. Provisions Relating to Fiscal Agent. The
following provisions shall apply to the Fiscal Agent:
(a) The Fiscal Agent shall not be accountable for the use
of any Bonds authenticated or delivered under this Resolution.
(b) The Fiscal Agent shall be protected in acting on any
notice, request, consent, certificate, order, affidavit, letter,
telegram or other paper or document reasonably believed by it to
be genuine and correct and to have been signed or sent by the
proper person or persons. Any action taken by the Fiscal Agent
pursuant to this Resolution on the request or authority or
consent of any person who at the time of making such request or
giving such authority or consent is the Holder of any Bond shall
be conclusive and binding upon all future Holders of the same
Bond and upon Bonds issued in exchange therefor or in place
thereof.
(c) The Fiscal Agent shall not be required to take notice
or be deemed to have notice of any default under this Resolution,
except failure by the City to make any of the payments to the
Fiscal Agent or failure by the City to file with the Fiscal Agent
-50-
any document required by this Resolution to be s, filed, or any
event or occurrence to which the Fiscal Agent has actual notice,
unless the Fiscal Agent shall be notified of such default by the
City or by the Holders of not less than 25% in aggregate
principal amount of outstanding Bonds.
(d) Before taking action under this Resolution, the Fiscal
Agent may require any certifications and documentation from the
city as it may deem reasonably necessary in order to carry out
its duties under this Resolution.
Section 1202. Consents, etc., of Bondholders. Any consent,
request, direction, approval, objection or other instrument
(collectively, a "Consent") required by this Resolution to be
executed by the Bondholders may be in any number of concurrent
writings of similar tenor and may be executed by such Bondholders
in person or by agent appointed in writing. Proof of the
execution Of a Consent or of the writing appointing any such
agent shall be sufficient for any of the purposes of this
Resolution and shall be conclusive in favor of the City with
regard to any action taken under the Consent if the fact and date
of the execution by any person of any such writing is proved by a
certificate of any officer in any jurisdiction who by law has
power to take acknowledgements within such jurisdiction that the
person signing such writing acknowledged before him the execution
thereof, or by affidavit of any witness to such execution.
Section 1203. Limitation of Rights. With the exception of
rights herein expressly conferred, nothing expressed or mentioned
in or to be implied from this Resolution or the Bonds is intended
or shall be construed to give to any person other than the
parties hereto and the holders of the Bonds any legal or
equitable right, remedy or claim under or in respect to this
Resolution or any covenants, conditions and agreements herein
contained since this Resolution and all of the covenants,
conditions and agreements hereof are intended to be and is for
the sole and exclusive benefit of the parties hereto and the
holders of the Bonds as herein provided.
Section 1204. Limitation of Liability of Council, etc. No
covenant, agreement or obligation contained herein shall be
deemed to be a covenant, agreement or obligation of any present
or future member of the Council or officer, employee or agent of
the city in his individual capacity, and neither the members of
the Council nor any officer of the City executing the Bonds shall
be liable personally on the Bonds or be subject to any personal
liability or accountability by reason of the issuance thereof.
No member of the Council or officer, employee, agent or advisor
of the City shall incur any personal liability with respect to
any other action taken by him pursuant to this Resolution, the
City Charter or the Public Finance Act, provided such member,
officer, employee, agent or advisor acts in good faith.
-51-
BeCtion 1205. Severability. If any provision of this
Resolution shall be held invalid by any court of competent
jurisdiction, such holding shall not invalidate any other
provision hereof and this Resolution shall be construed and
enforced as if such illegal provision had not been contained
herein.
Section 1206. Effective Date. This Resolution shall take
effect immediately.
ADOPTED: February 11, 1992
-52-
9
Item I-H.2.a/b-
RESOLUTIONS/ORDINANCES ITEM # 35334
Robert A. Kinney, Vice President - Paine and Webber, Inc., 1285 Avenue of the
Americas, New York, New York 10019, Phone: (212) 713-3434. Mr. Kinney
referenced the booklet distributed entitled "Final Pricing Information".
Upon motion by Councilman Sessoms, seconded by Vice Mayor Fentress, City
Council ADOPTED:
FIRST SUPPLEMENT to the Water and Sewer Master
Revenue Bond Resolution providing for the ISSUANCE
and SALE of $19,975,000 Water and Sewer System
Revenue Bonds, Series of 1992, of the City of
Virginia Beach, Virginia, providing for the form,
details and payment thereof, financing the cost of
improvements to the City's water and sanitary sewer
facilities.
A N D,
Resolution awarding the SALE of $19,975,000 Water
and Sewer System Revenue Bonds, Series of 1992, of
the City of Virginia Beach, Virginia, heretofore
authorized; and, directing the City Manager to
execute the Bond Purchase Agreement and the
Preliminary Official Statement.
Voting: 11-0
Council Members Voting Aye:
John A. Baum, James W. Brazier, Jr., Robert W.
Clyburn, Vice Mayor Robert E. Fentress, Harold
Heischober, Louis R. Jones, Paul J. Lanteigne, Reba S.
McClanan, Mayor Meyera E. Oberndorf, Nancy K. Parker
and William D. Sessoms, Jr.
Council Members Voting Nay:
None
Council Members Absent:
None
*Councilman Sessoms DISCLOSED pursuant to Section 2.1-639.14(C) of the Code of
Virginia, he was currently an officer of Central Fidelity Bank earning a salary
in excess of $10,000 annually. After the City Council Session of Feburary 11,
1992, Councilman Sessoms was advised by the City Attorney that Central Fidelity
Bank was selected as fiscal agent by a committee of staff personnel utilizing
competitive procedures. Within the body of bond documents which were approved,
and in particular the Master Water and Sewer Revenue Bond Resolution and the
First Supplement to that resolution, there were two obscure references to
Central Fidelty Bank and language which indicated Council's approval of the
prior selection of Central Fidelity Bank as the "fiscal agent" for the sale of
water and sewer revenue bonds. Councilman Sessoms had no knowledge this
reference was in these documents which were quite voluminous. Councilman
Sessoms' vote on the two referenced bond resolutions remains in the
affirmative; however, he requested his abstention to the aspects of those two
resolutions which refer to Central Fidelity Bank or the approval of CFB as
fiscal agent. Councilman Sessoms' letter of February 20, 1992, is hereby made a
part of the record.
CITY OF VIRGINIA BEACH, VIRGINIA
FIRST SUPPLEMENTALRESOLUTION SUPPLEMENT:ENG RESOLUTION ADOPTED
FEBRUARY 11, 1992, ENTITLED 'IMASTER WATER AND SEWER REVENUE
BOND RESOLUTION PROVIDING FOR THE ISSUANCE FROM TIME TO TIME
OF ONE OR MORE SERIES OF WATER AND SEWER SYSTEM REVEI;UE BONDS
OF THE CITY OF VIRGINIA BEACH,ll TO PROVIDE FOR THE ISSUANCE
AND SALE OF $19,975,000 WATER AND SEWER SYSTEM REVENUE BONDS,
SERIES OF 3.992, AND PROVIDING FOR THE FORM, DETAILS AND
PAYMENT THEREOF AND PROVIDING FOR THE FINANCING OF THE COST OF
impROVEMENTS TO THE CITY - S WATER AND SAN3:TARY SEWER FACILITIES
ADOPTED ON FEBRUARY 11, 1992
TABLE OF COIITENTS
Page
Recitals . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE I
FIRST sUppLrMENTAL RESOLUTIO"
Section 1.101. First Supplemental Resolution . . . . . . 1
Section 1.102. Meaning of Terms; Definitions . . . . . . 1
Section 1.103. Reference to Articles and Sections . . . . 2
ARTICLE II
PROJECT
section 1.201. Authorization of Project . . . . . . . . . 2
ARTICLE III
:s-
section 1.301. Issuance and Sale of Series of 1992 Bonds 2
Section 1.302. Details of Series of 1992 Bonds . . . . . 3
Section 1.303. Book Entry System . . . . . . . . . . . . 3
Section 1.304. Registrar . . . . . . . . . . . . . . . . 4
Section 1.305. Series Debt Service Reserve Requirement 5
Section 1.306. Form of Bonds . . . . . . . . . . . . . . 5
Section 1.307. Security for Series of 1992 Bonds . . . . 5
section 1.308. Application of Proceeds . . . . . . . . . 5
ARTICLE IV
REDEMPTION OF Series of 1992 BONDS
Section 1.401. Redemption Dates and Prices . . . . . . . 5
Section 1.402. Manner of Redemption . . . . . . . . . . . 6
ARTICLE V
FEDERAL TAX PROVISIONS
Section 1.501. Limitations on Use of Proceeds . . . . . . 7
Section 1.502. Rebate Requirement . . . . . . . . . . . . 8
Section 1.503. Calculation and Payment of Rebate Amount . 8
ARTICLE VI
MISCELLANEOUS
Section 1.601. Limitation of RightS . . . . . . . . . . . 9
9
Section 1.603. severability . . . . . . . . . . . * * 9
Section 1.604. Effective Date . . . . . . . . . . . . . .
Appendix A - De@scription of the Project
Appendix B - Form Of the Series of 1992 Bonds
FIRST SUPPLEMENTAL RESOLUTION SUPPLEMENTING RESOLUTION ADOPTED
FEBRUARY 11, 1992, ENTITLED "HASTER WATER AND SEVER REVENUE
BOND RESOLUTION PROVIDING FOR THE ISSUANCE FROM TIME TO TIME
OF ONE OR MORE SERIES OF WATER AND SEWER SYSTEM REVENUE BONDS
OF THE CITY OF VIRGINIA BEACHrlt PROVIDING FOR THE ISSUANCE AND
SALE OF $19,975,000 WATER AND SEWER SYSTEM REVENUE BONDS,
SERIES OF 1992, FOR THE FORM, DETAILS AND PAYMENT THEREOF AND
PROVIDXNG FOR THE FIIQANCING OF THE COST OF IMPROVEMENTS TO THE
CITY'S WATER AND SANITARY SEWER FACILITIES
9. Virginia,
WHEREAS, the Council of the City of vir inia Beach,
adopted a resolution on Fpbruary 11, 1992., providing for the
issuance from time to time of water and sewer revenue bonds to
finance the cost of improvements and extensions to its water and
sanitary sewer system; and
WHEREAS, the council desires that $8,695iOOO of the
$17,8oo,ooo water and sewer system revenue bonds authorized by an
ordinance adopted on December 19, 1988, all of the $735,000 water
and sewer system revenue bonds authorized by an ordinance adopted
27, 1989, $6,415,000 of the $8,940,000 water and s-er
on March n December
system revenue bonds authorized by an ordinance adopted o
4, 1989, and $4,130,000 of the $14,560,000 water and sewer system
revenue bonds authorized by an ordinance adopted on December 6,
199o, none of such bonds having been issued and sold, be issued
pursuant to the foregoing resolution;
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF VIRGXI;XA BEACH,
VIRGINIA:
ARTICLE I
FIRST SUPPLEMENTAL RESOL TlOlq
Section 1.101. First Supplemental Resolution. This First
Supplemental Resolution is adopted pursuant to and in accordance
with Section 1101(g) of the Master Resolution. All covenants,
conditions and agreements of the Master Resolution shall apply with
equal force and effect to the Series of 1992 Bonds and to the
holders thereof, except as otherwise provided herein.
Section 1.102. Meaning of Terms; Definitions. Except as
otherwise defined herein, terms defined in the Master Resolution
are used in this First Supplemental Resolution with the meanings
assigned to them in the master Resolution. In addition, the
following terms shall have the following meanings in this First
Supplemental Resolution.
'IDTCII shall mean The Depository Trust Company, New York, New
York, a securities depository, as holder of the Series of 1992
Bonds, or its successors or assigns in such capacity.
"Haster Resolution" shall mean the resolution adopted by the
Council on February 11, 1992, establishing a program for financing
improvements and extensions to the System.
"Project" shall mean the acquisitions, improveinents, exten-
sions, additions and replacements to the System as described in
Article II.
"Rebate Amount" shall mean the excess of (a) the future value
of all nonpurpose receipts with respect to the Series of 1992 Bonds
over (b) the future value of all nonpurpose payments with respect
to tbe Series of 1992 Bonds, in each case calculated under Section
1.502 pursuant to the requirements of Section 148 of the Code, or
such other amount of arbitrage required to be rebated to the United
States of America under Section 148 of the Code.
"Rebate Amount Certificate" shall have the meaning set forth
in Section 1.502.
"Registrar" shall mean Central Fidelity Bank, Richmond,
Virginia, paying agent and bond registrar for the Series of 1992
Bonds.
"First Supplemental Resolution" shall mean this First
Supplemental Resolution which supplements the Master Resolution.
"Series of 1992 Bonds" shall mean the $19,975,000 Water and
Sewer System Revenue Bonds, Series of 1992, authorized to be issued
by Article III.
Section 1.103. Reference to Articles and Sections. Unless
otherwise indicated, all references herein to particular articles
or sections are references to articles or sections of this First
Supplemental Resolution.
ARTICLE 11
PROJECT
Section 1.201. Authorization of Project. The Council has
authorized the acguigitions, improvements, extensions, additions
and replacements to the System described on Appendix A which are
part of the approved capital improvement program of the City.
ARTICLE III
ISSUANCE AND SALE OF SERIES OF 1992 BONDS
Section 1.301. Issuance and Sale of Series of 1992 Bonds.
Water and sewer system revenue bonds in the amount of $19,975,000,
consisting of $8,695,000 of the $17,800,000 water and sewer system
revenue bonds authorized by an ordinance adopted on December 19,
1988, all of the $735,000 water and sewer system revenue bonds
authorized by an ordinance adopted on March 27, 1989, $6,415,000 of
the $8,940,000 water and sewer system revenue bonds authorized by
2
an ordinance adopted on December 4, 1989 and $4,130,000 of the
$14,560,000 water and sewer system revenuz bonds authorized by an
ordinance adopted on December 6, 1990, shall be issued and sold.
The proceeds thereof shall be used to pay the Cost of the Project.
Such bonds shall constitute Bonds, as defined in the Master Resolu-
tion.
section 1.302. Details of Series of 1992 Bonds. (a) The
Series of 1992 Bonds shall be designated "Water and Sewer System
Revenue Bonds,- Series of 1992,11 shall be dated February 1, 1992,
shall be numbered R-1 upward, and shall bear interest at rates,
payable semiannually on each February 1 and August 1, beginning
August 1, 1992, and shall mature in installments on February 1 in
years and amounts, as follows:
Year Anount Rate Year ount Rate
1993 $ 380,000 3.50 2000 $ 530,000 5.80
1994 395,000 4.30 2001 565,000 6.00
1995 410,000 4.75 2002 595,000 6.00
1996 430,000 5.00 2003 630,000 6.125
1997 455,000 5.25 2004 670,000 6.25
1998 475,000 5.50 2010 5,035,000 6.50
1999 505,000 5.60 2017 8,900,000 6.625
Each Series of 1992 Bond shall bear interest (a) from its date if
such Series of 1992 Bond is authenticated prior to August 1, 1992,
or (b) otherwise from the February 1 or August I that is, or
immediately precedes, the date on which such Series of 1992 Bond is
authenticated; provided, however, that if at the time of authenti-
cation of any Series of 1992 Bond payment of interest is in
default, guch Series of 1992 Bond shall bear interest from the date
to which interest has been paid. Interest on the Series of 1992
Bonds shall be calculated on the basis of a year of 360 days and
twelve 30-day months.
(b) Principal of the Series of 1992 Bonds and the preinium, if
any, thereon shall be payable to the holders upon the surrender of
such Bonds at the principal corporate trust office of the Regis-
trar. Interest on the Series of 1992 Bonds shall be payable by
check or draft mailed to the holders as of the 15th day of the
month prior to each interest payment date, at their addresses as
they appear on the registration books kept by the Registrar.
(c) Except as otherwise provided herein, the Series of 1992
Bonds shall be payable, executed, authenticated, registrable,
exchangeable and secured, all as set forth in the Master Resolu-
tion.
Section 1.303. Book Entry System. Initially, one bond
certificate for each maturity will be issued to DTC, which is
designated as the securities depository for the Series of 1992
3
8onds, or its nominee, and immobilized in its custody. Beneficial
owners of the Series of 1992 Bonds will not receive physical
delivery of the Series of 1992 Bonds. So long as DTC is acting as
securities depository for the Series of 1992 Bonds, a book entry
system shall be employed, evidencing ownership of the Series of
1992 Bonds in principal amounts of $5,000 or multiples thereof,
with transfers of beneficial ownership effected on the records of
DTC and its participants pursuant to rules and procedures estab-
lished by DTc and its participants. Interest on the Spries of .1992
Bonds shall bd payable in clearinghouse funds to DTC or its nominee
as registered owner of the Series of ].992 Bonds. Principal,
premium, if any, and interest shall be payable in lawful money of
the United states of America by the Registrar.
Transfer of principal and interest payments to participants of
DTC shall be the responsibility of DTC; transfer of principal and
interest payments to beneficial owners by participants of DTC will
be the responsibility of such participants and other nominees of
benef icial owners. The City and the Registrar shall not be
responsible or liable for maintaining, supervising or reviewing the
records maintained by DTC, its participants or persons acting
through such participants.
In the event that (a) DTC determines not to continue to act as
securities depository for the Series of 1992 Bonds by giving notice
to the City and the Registrar discharging its responsibilities
hereunder, (b) the Registrar or the City determines that DTC is
incapable of discharging its duties or that continuation with DTC
as securities depository is not in the best interest of the City,
or (c) the Registrar or the City determines that continuation of
the book entry system of evidencing ownership and transfer of
ownership o'f the Series of 1992 Bonds is not in the best interest
of the City or the beneficial owners of the Series of 1992 Bonds,
the Registrar and the City shall discontinue the book entry system
with DTC. If the Registrar or the City fails to identify another
qualified securities depository to replace DTC, the Registrar shall
authenticate and deliver replacement bonds in the form of fully
registered certificates to the beneficial owners or to the DTC
participants on behalf of beneficial owners, substantially in the
form as set forth in Appendix B with such variations, omissions or
insertions as are necessary or desirable in the delivery of
replacement certificates in printed form. The Series of 1992 Bonds
would then be registrable and exchangeable as set forth in Section
204 of the Master Resolution.
So long as DTC is the securities depository for the Series of
1992 Bonds (a) it shall be the registered owner of the Series of
1992 Bonds, (b) transfers of ownership and exchanges shall be
effected on the records of DTC and its participants pursuant to
rules and procedures established by DTC and its participants, and
(c) references in this First Supplemental Resolution to holders of
the Series of 1992 Bonds shall mean DTC or its nominee and shall
not mean the beneficial owners of the Series of 1992 Bonds.
4
Section 1.304. Registrar. The sele,tion of Central Fidelity
Bank, Richmond, Virginia, as paying agent and bond registrar for
the Series of 1992 Bonds'is approved.
Section 1.305. Series Debt Service Reserve Requirement. The
Series Debt Service Reserve Requirement for the Series Of 1992
Bonds is $1,631,962.50.
Section 1.306. Form of Bonds. The Series of 1992 Bonds shall
be in substantially the form set forth in Appendix B with such
variations, omissions and insertions as May be necessary to set
forth the details thereof pursuant to Article II of the Master
Resolution and Article III hereof.
Section 1.307. SL-curity for series of 1992 Bonds. The Series
of 1992 Bonds shall be issued pursuant to the master Resolution and
this First Supplemental Resolution and shall be equally and ratably
secured under and to the extent provided in the Master Resolution
with the Prior Parity Bonds, any Bonds that may be issued under the
Master Resolution any Parity Double Barrel Bonds that may be
issued and any Par!
ity Debt Service Coinponents that may be incurred,
without preference, priority or distinction of any obligations over
any other obligations except that the Debt Service Reserve Account
for the Series of 1992 Bonds shall secure only the Series of 1992
Bonds.
section 1.308. Application of Proceeds. The proceeds of the
Series of 1992 Bonds shall be applied by the Treasurer as follows:
(a) The amount received as accrued interest on the Series of
1992 Bonds from their date to the date of their delivery shall be
deposited in the Interest Account in the Revenue Bond Fund.
(b) An amount equal to the Series Debt Service Reserve
Requirement with respect to the Series of 1992 Bonds shall be
deposited in the Series Debt Service Reserve Account for the Series
of 1992 Bonds.
(c) The balance of the proceeds shall be deposited in the
General Account in the Construction Fund and used to pay the Cost
of the Project.
ARTICLE IV
REDEMPTION OF S-ril- Of 1992 BONDS
section 1.401. Redemption Dates and Prices. The Series of
1992 Bonds may not be called for redemption by the City except as
provided below:
(a) The Series of 1992 Bonds maturing on or before February
1, 2002, are not subject to redemption prior to maturity. The
5
Series of 1992 Bonds Maturing on or after February 1 2003, ,e
subject to redemption prior to maturity at the option @f the City
on or after February 1, 2002, in whole or in part at any t3.me, upon
payment of the following redemption prices (expressed as a per-
centage of principal ainount of the Serie, of 1992 Bonds to be
redeemed) plus accrued interest to the redemption date:
102% if redeemed February 1, 2002, through January 31, 2003, inclusive;
101 if redeemed February 1, 2003, through January 31, 2004, inclusive; and
100 if redeemed.February 1, 2004, or thereafter.
(b) series of 1992 Bonds maturing on Februa.ry 1, 2010, are
subject to mandatory sinking fund redemption prior to maturity on
February 1 in years and amounts', upon payment of 100% of the
principal amount thereof to be re eemed plus interest accrued to
the redemption date, as follows:
Year MO U-n t Year ARount
2005 $ 715,000 2008 $ 860,000
2006 760,000 2009 915,000
2007 810,000 2010 975,000
The amount of Series of 1992 Bonds required to be redeemed
pursuant to this Subsection may be reduced in accordance with the
provisions of Section 605 of the Master Resolution.
(c) Series of 1992 Bonds maturing on Februar-v 1 2017, are
subject to mandatory sinking fund redemption prior to 'maturity on
February I in years and amounts, upon payment of 100% of the
principal amount thereof to be redeemed plus interest accrued to
the redemption date, as follows:
xear ount Xear ount
2011 $1,040,000 2015 $ 1,345,ooo
2012 1,110,000 2016 1,435,000
2013 1,180,000 2017 1,530,000
2014 1,260,000
The amount of series of 1992 Bonds required to be redeemed
pursuant to this Subsection may be reduced in accordance with the
provisions of Section 605 of the Master Resolution.
Section 1.402. Manner of Redemption. If less than all the
Series of 1992 Bonds are called for redemption, the maturities of
the Series of 1992 Bonds to be redeemed shall be selected in such
manner as the City Manager or the Director of Finance may determine
to be in the best interest of the Citv. -Tf less than all of the
Series of 1992 Bonds of any maturity are called for redemption, the
Series of 1992 Bonds to be redeemed shall be selected by DTC or any
successor securities depository pursuant to its rules and proce-
dures or, if the book entry system is discontinued, shall be
selected by the Registrar by lot in such manner as the Registrar at
6 -
its discretion may determine. In either case, (a) the portion of
any Series of 1992 Bond to be redeemed shall be in the principal
amount of $5,000 or some integral multiple thereof and (b) in
selecting series of 1992 Bonds for redemption, each portion of
$5,000 principal amount shall be counted as one bond for this
purpose.
ARTICLE V
FEDERAL TAX PROVISIONS
section i.sol. Limitations on Use of Proceeds. The City
covenants with the holders of the Series of 1992 Bonds as follows:
(a) The City shall not take or omit to take any action
or make any investment or use of the proceeds of any series of 1992
Bonds (including failure to spend the same with due diligence) the
taking or omission of which would cause the Series of 1992 Bonds to
be "arbitrage bonds" within the meaning of Section 148 of the Code,
including without limitation participating in any issue of
obligations that would cause the Series of 1992 Bonds to be part of
an "issuell of obligations that are arbitrage bonds, within the
meaning of Treasury Regulations Section 1. 103-13 (b) (10) or succes-
sor regulation, or otherwise cause interest on the Series of 1992
Bonds to be includable in the gross income of the registered owners
under existing law. Without limiting the generality of the
foregoing, the City shall comply with any provision of law that may
require the City at any time to rebate to the United States f
America any part of the earnings derived from the investment of
gross proceeds of the Series of 1992 Bonds.
(b) Barring unforeseen circumstances, the City shall not
approve the use of the proceeds from the sale of any Series of 1992
Bonds otherwise than in accordance with the City's "non-arbitrage"
certificate delivered immediately prior to the issuance of such
Bonds.
(c) The City shall not permit the proceeds of the Series
of 1992 Bonds to be used in any manner that would result in qither
(1) 5% or more of such proceeds being considered as having been
used in any trade or business carried on by any person other than
a governmental unit as provided in Section 141(b) of the Code, (2)
5% or more of such proceeds being used with respect to any "output
facilityll (other than a facility for the furnishing of water)
within the meaning of Section 141(b)(4) of the code, or (3) 5% or
more of such proceeds being considered as having been used directly
or indirectly to make or finance loans to any person other than a
governmental unit, as provided in Section 141(c) of the Code;
provided, however, that if the City receives an opinion of Bond
Counsel that compliance with any such covenant is not required to
prevent the interest on the Series of 1992 Bonds from being
7
includable in the gross income of the registered owners thereof
under existing law, the City need not comply with such restriction.
(d) The City shall not take any other action that would
adversely affect, and shall take all action within its power
necessary to maintain, the exclusion of interest on all Series of
1992 Bonds from gross income for federal income taxation purposes.
section 1.502. Rebate Requirement. The City shall determine
and pay, from any legally available source, the Rebate Amount, if
any, to the United States of America, as and when due, in accor-
dance with the "rebate requirement" described in Section 148(f) of
the Code and retain records of all such determinations until six
years after payment of the Series of 1992 Bonds.
Section 1.503. Calculation and Payment of Rebate Amount.
(a) The City selects June 30 as the end of the bond year with
respect to the Series of 1992 Bonds pursuant to Temporary Treasury
Regulation Section 1.148-8T.
(b) Within 30 days after the initial installment
computation date, the last day of the fifth bond year (June 30,
1996), unless such date is changed by the City prior to the date
that any amount with respect to the Series of 1992 Bonds is paid or
required to be paid to the United States of America as required by
Section 148 of the Code, and at least once every five years
thereafter, the City shall cause the Rebate Amount to be computed.
Prior to any payment of the Rebate Amount to the United States of
America as required by Section 148 of the Code, such computatioh
(the "Rebate Amount Certificate") setting forth such Rebate Amount
shall be prepared or approved by (1) a person with experience in
matters of governmental accounting for Federal income tax purposes,
(2) a bona fide arbitrage rebate calculation reporting service, or
(3) Bond Counsel.
(c) Not later than 60 days after the initial installment
computation date, the City shall pay to the United States of
America at least 90% of the Rebate Amount as set forth in the
Rebate Amount Certificate prepared with respect to such installment
computation date. At least once on or before 60 days after the
installment computation date that is the fifth anniversary of the
initial installment computation date and on or before 60 days every
fifth anniversary date thereafter until final payment of the Series
of 1992 Bonds, the City shall pay to the United States of America
not less than the amount, if any, by which 90% of the Rebate Amount
set forth in the most recent Rebate Amount Certificate exceeds the
aggregate of all such payments theretofore made to the United
States of America pursuant to this section. on or before 60 days
after final payment of the Series of 1992 Bonds, the City shall pay
to the United States of America the amount, if any, by which 100%
of the Rebate Amount set forth in the Rebate Amount Certificate
with respect to the date of final payment of the Series of 1992
Bonds exceeds the aggregate of all payments theretofore made
8
pursuant to this Section. All such payments shall be made by the
City from any legally available source.
(d) Notwithstanding any provision of this Article to the
contrary, no such calculation or payment shall be made if the City
receives an opinion of Bond Counsel to the ef fect that (1) such
payment is not required under the Code in order to prevent the
Series of 1992 Bonds from becoming "arbitrage bonds" within the
meaning of Section 148 of the Code or (2) such payment should be
calculated artd paid on some alternative basis under the Code, and
the city complies with such alternative basis.
ARTICLE VI
MXSCELLANEOUA
Section 1.601. Limitation of Rights. with the exception of
the rights herein expressly conferred, nothing expressed or
mentioned in or to be implied from this First Supplemental
Resolution is intended or shall be construed to give any person
other than the parties hereto and the holders of the Series of 1992
Bonds any legal or equitable right, remedy or claim under or in
respect to this First Supplemental Resolution or any covenant,
condition or agreement herein contained, this First Supplemental
Resolution and all of the covenants, conditions and agreements
hereof being intended to be and being for the sole and exclusive
benefit of the holders of the Series of 1992 Bonds as herein
provided.
Section 1.602. SNAP Xnvestment. The council has received and
reviewed the Information State7nent dated May 1, 1990 (the "Informa-
tion Statement") , describing the state Non-Arbitrage Program of the
Commonwealth of virginia ("SNAP") and the Contract Creating the
State Non-Arbitrage Program Pool I dated January 16, 1989 (the
"Contract"). The Council acknowledges that the Treasury Board of
the Comroonwealth 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 Contract.
Section 1.603. Severability. If any provision of this First
Supplemental Resolution shall be held invalid by any court of
coinpetent jurisdiction, such holding shall not invalidate any other
provision hereof.
Section 1.604. Ef f ective Date. This First Supplemental
Resolution shall take effect immediately.
ADOPTED: February 11, 1992
9
APPENDIX A
Description of the Project
City Of Virginia Beach, virginia
$19,975,000 Water and sewer SysteM ReVenUe Bonds
SerieS Of 1992
Water System Projects
1. Replacement of existing water mains and new water main
construction.
2. Construction of new elevated tank.
3. Modifications of existing pumping stations and construction of
new pumping stations.
4. Replacement of the utility control center computers.
Sanitary S roiects
1. Construction of new gravity sanitary sewers.
2. Construction of new force raains.
3. Modifications of existing purnping stations and construction of
new pumping stations.
APPENDIX B
FORM OF SERIES OF 1992 BOND
REGISTERED REGISTERED
R--
UNITED STATES OF AMERICA
COMMONWEALTH OF VIRGINIA
CITY OF VIRGINIA BEACH
Water and Sewer System Revenue Bond, Series of 1992
INTEREST RATE MATURITY DATE DATED DATE CUSIP
February 1, February 1, 1992
REGISTERED OWNER: Cede & Co.
PRINCIPAL AMOUNT:
The City of Virginia Beach, Virginia (the "City"), for value
received, hereby promises to pay upon surrender hereof at the
principal corporate trust office of Central Fidelity Bank,
Richmond, Virginia (the "Registrar"), solely from the source and As
hereinafter provided, to the registered owner hereof, or registered
assigns or legal representative, the principal sum stated above on
the maturity date stated above, subject to prior redemption as
hereinafter provided, and to pay, solely from such source, interest
hereon semiannually on each February I and August 1, beginning
August 1, 1992, at the annual rate stated above. Interest is
payable (a) from February 1, 1992, if this Bond is authenticated
prior to August 1, 1992, or (b) otherwise from the February I or
August 1 that is, or immediately precedes, the date on which this
Bond is authenticated (unless payment of interest hereon is in
default, in which case this Bond shall bear interest from the date
to which interest has been paid) . Interest is payable by check or
draft mailed to the registered owner hereof at his address as it
appears on the 15th day of the month preceding each interest
payment date on registration books kept by the Registrar.
Principal, premium, if any, and interest are payable in lawful
money of the United States of America.
Notwithstanding any other provision hereof, this Bond is
subject to a book entry systein maintained by The Depository Trust
Company (IIDTCII) and the payment of principal and interest, the
providing of notices and other matters will be made as described in
the City's Letter of Representations to DTC.
B
This Bond is one of an issue Of $19,975,000 Water and Sewer
System Revenue Bonds, Series of 1992 (the "Bonds"), of like 'date
and tenor, except as to number, denomination, rate of interest,
privilege of redemption and maturity, authorized and issued
pursuant to ordinances adopted by City Council on December 19,
1988, March 27, 1989, December 4, 1989, and December 6, 1990, and
a resolution adopted by the City Council on February 11, 1992, as
supplemented by a resolution adopted by the City Council on
February 11, 1992 (collectively, the "Resolution"), the Constitu-
tion and statutes of the Commonwealth of Virginia, including the
City Charter and the Public Finance Act of 1991, to provide funds,
together with other available funds, to pay the cost of the
acquisition and construction of improvements and extensions to the
City's water and sanitary sewer system (the "System"), as more
fully described in the Resolution.
The Bonds and the premium, if any, and the interest thereon
are limited obligations of the City and are payable solely from the
revenues to be derived from the ownership or operation of the
System, as the same may from time to time exist, except to the
extent payable from the proceeds of the Bonds, the income, if any,
derived from the investment thereof, certain reserves, income from
investments pursuant to the. Resolution or proceeds of - insurance,
which revenues and other moneys have been pledged as described in
the Resolution to secure payment thereof. The Bonds, the premium,
if any, and the interest thereon are payable solely from the
revenues pledged thereto in the Resolution, and nothing herein or
in the Resolution shall be deemed to create or constitute an
indebtedness of or a pledge of the faith and credit of the
Commonwealth of Virginia or of any county, city, town or other
political subdivision of the Commonwealth, including the City.
The Bonds are issued under and are equally and ratably secured
on a parity with the unpaid balance of the City's $3,000,000
Revenue Bonds, 1977 (P.A. Corp.), $5,100,000 Water and Sewer
Revenue Notes, 1977 (P.A. Corp.), $2, 000, 000 Drought Relief Revenue
Bond, 1978, $2,200,000 Water and Sewer Revenue Notes, 1982 (County
Utilities), $1,800,000 Water and Sewer Revenue Notes, 1982
(Kempsville Utilities), and $13,000,000 Water and Sewer Revenue
Bond, Series of 1989, to the extent set forth in the Resolution.
Reference is hereby made to the Resolution and all ain'endments and
supplements thereto for a description of the provisions, among
others, with respect to the nature and extent of the security, the
rights, duties and obligations of the City, the rights of the
holders of the Bonds and the terms upon which the Bonds are issued
and secured. Additional bonds ranking equally with the Bonds inay
be issued on the terms provided in the Resolution.
Bonds matur"g on or before February 1, 2002, are not subject
to redemption prior to maturity. Bonds maturing on or after
February 1, 2003, are subject to redemption prior to maturity at
the option of the City on or after February 1, 2002, in whole or in
part at any time, upon payment of the following redemption prices
B 2
(expressed as a percentage of principal amount of Bonds to be
redeemed) plus interest accrued to the redemption date:
Redemption Period Price
February 1, 2002, through January 31, 2003, inclusive 102%
February 1, 2003, through January 31, 2004, inclusive 101
February 1, 2004, or thereafter 100
Bonds maturing on February 1, 2010, are required to be
redeemed prio@ to maturity, in part, in accordance with the sinking
fund r@irements of Section 401(b) of the resolution adopted on
February 11, 1992, on February 1, in years and amounts upon payment
of 100% of the principal amount thereof plus interest accrued to
the redemption date, as follows:
Year Amount Year Amount
2005 $ 715,000 2008 $ 860,000
2006 760,000 2009 915,000
2007 810,000 2010 975,000
Bonds maturing on February 1, 2017, are required to be
redeemed prior to maturity, in part, in accordance with the sinking
fund requirements of Section 401(c) of the resolution adopted on
February 11, 1992, on February 1, in years and amounts upon payment
of 100% of the principal amount thereof plus interest accrued to
the redemption date, as follows:
Year Amount Year Amount
2011 $:L,040,000 2015 $ 1,345,000
2012 1,110,000 2016 1,435,000
2013 1,180,000 2017 1,530,000
2014 1,260,000
The amount of the Bonds recfuired to be redeemed pursuant to
the preceding two paragraphs may be reduced in accordance with
provisions of the Resolution.
If less than all the Bonds are called for redemption, the
maturities of the Bonds to be redeemed shall be selected in such
manner as the City Manager or the Director of Finance may determine
to be in the best interest of the City. If less than all of the
Bonds of any maturity are called for redemption, the Bonds to be
redeemed shall be selected by DTC or any successor securities
depository pursuant to its rules and procedures or, if the book
entry system is discontinued, shall be selected by the Registrar by
lot in such manner as the Registrar in its discretion may deter-
mine. 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
portion of $5,000 principal amount shall be counted as one bond for
this purpose. If a portion of a Bond is called foi redemption, a
B - 3
new Bond in principal amount equal to the unredeemed portion
thereof will be issued to the registered owner upon the surrender
hereof.
The Registrar will cause notice of the call for redemption
identifying the Bonds or portions thereof to be redeemed to be sent
by registered or certified mail, not less than 30 nor more than 60
days prior to the redemption date, to DTC or its nominee as the
registered owner thereof. The City will not be responsible for
mailing 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 the registered owner of the
Bonds, notice of redemption will be mailed to the registered owners
of the Bonds.
Provided funds for their redemption are on deposit at the
place of payment on the redemption date, all Bonds or portions
thereof so called for redemption shall cease to bear interest on
such date, shall no longer be secured as set forth in the Resolu-
tion and shall not be deemed to be outstandifig under the provisions
of the Resolution.
The registered owner of this Bond shall have no right to
enforce the provisions of the Resolution or to institute action to
enforce the covenants therein or to take any action with respect to
any Event of Default under the Resolution or to institutei appear
in or defend any suit or other proceedings with respect thereto,
except as provided in the Resolution. Modifications or alterations
of the Resolution, or of any supplement thereto, may be made only
to the extent and in the circumstances permitted by the Resolution.
The Registrar shall treat the registered owner as the person
exclusively entitled to payment of principal, premium, if any, and
interest and the exercise of all other rights and powers of the
owner, except that interest payments shall be made to the person
shown as owner on the 15th day of the month preceding each interest
payment date.
All acts, conditions and things required to happen, exist or
be performed precedent to and in the issuance of this Bond have
happened, exist and have been performed.
This Bond shall not be valid or be entitled to any security or
benefit under the Resolution until the Registrar shall have
executed the Certificate of Authentication appearing hereon and
inserted the date of authentication hereon.
B - 4
IN WITNESS WHEREOF, the City of Virginia Beach, Virginia, has
caused this Bond to be signed by the facsimile signature of its
Mayor, to be countersigned by the facsimile signature of its Clerk,
a facsimile of its seal to be printed hereon, and this Bond to be
dated February 1, 1992.
COUNTERSIGNED:
(SEAL)
tlerk, City of virginia Beach, Mayor, City of Virginia Beach,
virginia Virginia
Date Authenticated:
CERTIFICATE OF AUTHENTICATION
ThiS Bond is one of the Bonds described in the within-
mentioned Resolution.
Registrar
By
Authorized Signatur6
B 5
ASSIGNNENT
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s)
and transfer(s) unto
(please print or typewrite name and address
including zip code of Transferee)
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF TRANSFEREE
the within-mentioned 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) rftusu- (Signature of Registered owner)
be guaranteed by a member
firm of the New York Stock NOTICE: The signature above
Exchange or a commercial bank must correspond with the name
or trust company of the Registered Owner -as it
appears on th(i f ront of this
Bond in every particular, with-
out alteration or enlargement
or any change whatsoever.
B 6
RESOLUTION AWARDING THE SALE OF $19,975,000 WATER AND
SEWER SYSTEM REVENUE BONDS, SERIES OF 1992, OF THE CITY
OF VIRGINIA BEACH HERETOFORE AUTHORIZED
WHEREAS, the City of Virginia Beach, Virginia (the "City"),
authorized the issuance of water and sewer system revenue bonds in
the amounts of $17,800,000, $735,000, $8,940,000 and $14,560,ooo by
ordinances adopted by the City Council on December 19, 1988, March
27, 1989, December 4, 1989, and December 6, 1990, respectively; and
WHEREAS, the City has adopted on the date hereof a Master
Water and Sewer Revenue Bond Resolution (the "Master Resolution")
providing for the issuance from time to tim4 of water and sewer
system revenue bonds; and
WHEREAS, the City has adopted on the date hereof a First
Supplemental Resolution, suppleinenting the Master Resolution
(collectively with the Master Resolution, the "Resolution") and
providing for the issuance and sale of $19,975,000 Water and Sewer
System Revenue Bonds, Series of 1992 (the "Bonds"); and
WHEREAS, there have been presented to this meeting forms of
the following documents proposed in connection with the issuance
and sale of the Bonds:
(a) A Bond Purchase Agreement dated February 11, 1992 (the
"Bond Purchase Agreement"), between the City and PaineWebber
Incorporated, Craigie Incorporated, Scott & Stringfellow Investment
Corp. and Wheat, First Securities, Inc. (the "Underwriters"),
setting forth the terms of the Bonds, the purchase price of the
Bonds and the conditions pursuant to which they will be sold to the
Underwriters; and
(b) A Preliminary official Statement of the City dated
.February 3, 1992 (the "Preliminary Official Statement"), with
respect to the offering of the Bonds, which has been marked to
reflect the terms of the Bonds and other changes appropriate to
complete the Preliminary Official Statement as an official
statement in final form (the "Official Statement);
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF VIRGXNIA
BEACH, VIRGINIA:
1. The City authorizes the sale of the Bonds to the Under-
writers pursuant to the Bond Purchase Agreement. The City Manager
is authorized and directed to execute the Bond Purchase Agreement
in the form presented to this meeting and to deliver it to
PaineWebber Incorporated, on behalf of the Underwriters.
2. The Mayor and the Clerk are authorized and directed to
have the Bonds prepared and executed pursuant to the Resolution, to
deliver them to Central Fidelity Bank, Richmond, Virginia, as
paying agent and bond registrar, to be authenticated by it, and to
cause the Bonds so executed and authenticated to be delivered to or
for the account of the Underwriters upon payment of the price
sPecified in the Bond Purchase Agreement.
3. The city manager is authorized and directed to execute
the Official Statement and to deliver it to the Underwriters. The
Official Statement shall be in substantially the form subnlitted to
this meeting, with such completions, omissions, insertions and
other changes as may be approved by the City Manager, in collabora-
tion with the city's financial advisor and the underwriters, the
execution thereof by the City Manager to constitute conclusive
evidence of their approval of any such completions, omissions,
insertions and changes.
4. The Underwriter is authorized to distribute the Official
Statement to prospective purchasers of the Bonds, such distribution
being conclusive evidence that it has been deemed final by the City
as of its date within the meaning of Rule l5c2-12 of the Securities
and Exchange Commission.
5. 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 and desir-
able in connection with the issuance and sale of the Bonds.
6. All other actions of the officers of the City in con-
formity with the purposes and intent of this resolution and the
Master Resolution and in furtherance of the issuance and sale of
the Bonds are ratified and approved.
7. All resolutions or parts of resolutions in conflict
herewith are repealed.
8. This resolution shall take effect immediately.
ADOPTED: February 11, 1992
2
$19,975,000
CITY OF VIRGINIA BEACH, VIRGINIA
WATER AND SEWER SYSTEM REVENUE BONDS
SERIES OF 1992
BOND @URCHASE AGREEMENT
February 11, 1992
City of Virginia Beach
Municipal Center
Virginia Beach, Virginia 23456
Attention: City Manager
Ladies and Gentlemen:
The undersigned (the "Representativell) , acting on behalf of
itself and the other Underwriters set forth on the final page
hereof (the "Underwriters"), offers to enter into the following
agreement with you (the "Issuer") for the sale by you and the
purchase by the Underwriters of the City of Virginia Beach,
Virginia Water and Sewer System Revenue Bonds, Series of 1992
described below (the "Bonds"). Upon your acceptance of this offer
and your execution and delivery of this Agreement, this Agreement
will be binding upon you and the Underwriters. This offer is made
subject to your acceptance, evidenced by your execution and
delivery of this Agreement to the Underwriters at or before 8:00
p.m., Virginia Beach, Virginia time, on this date, and, if not so
accepted, will be subject to withdrawal by the Underwriters upon
written notice delivered to you at any time thereafter before
acceptance by you. Unless otherwise indicated, the capitalized
terms used in this Agreement have the meanings assigned to them in
the Preliminary official Statement dated February 3, 1992 (the
"Preliminary official Statement") relating to the issuance of the
Bonds.
1. Purchase and Sale.
1.1 Subject to the terms and conditions and in reliance
upon the representations, warranties and agreements set forth in
this Agreement, the Underwriters jointly and severally agree to
purchase from you for reoffering to the public, and you agree to
sell to the Underwriters for such purpose when, as and if issued,
all, but not less than all, of the Bonds in the aggregate principal
aTnount and at the aggregate purchase price of $19,171,668.80, plus
accrued interest of $90,079.53 from February 1, 1992 to the date of
Closing. Such aggregate purchase price equals the $19,975,000 par
amount of the Bonds less $399,500.00 (which reflects delivery of
the good faith deposit described below), less original issue
discount of $167,526.95 and less the Underwriters, discount of
$236,304.25. The Bonds will mature on the dates and in the amounts
and bear interest at the rates set forth in Exhibit A.
2. Good Faith Deposit.
The Representative has delivered to the Issuer, and the Issuer
ackn6wledges receipt of, a cashier's check in the amount of
$399,500.00 (which the Issuer may cash and invest).
(a) At the Closing, the good faith deposit (with no
credit for interest thereon) will be deducted from the amount
payable by the Underwriters with respect to the purchase price of
the Bonds;
(b) If the Issuer fails to deliver the Bonds at the
Closing, or if the Issuer is unable on or before the Closing to
satisfy the conditions to the obligations of the Representative
contained in this Agreement, or if the obligations of the
Underwriters are terminated for any reason permitted by this
Agreement, the good faith deposit (with no credit for interest
thereon) will be delivered to the Representative; or
(c) If the Underwriters fail (other than for a reason
permitted in this Agreement) to accept and pay for the Bonds at
closing upon their tender by the Issuer as provided in this
Agreement, the check will be retained and cashed by the Issuer as
and for full liquidated damages for the failure and for any and all
defaults on the part of the Underwriters, and the delivery of the
check will constitute satisfaction, and will result in full release
and discharge, of all claims and damages of the Issuer against the
Underwriters arising from such failure and for any and all
defaults.
3. Concurrent Matters.
3.1 Upon your acceptance, execution and delivery of this
Agreement, you will deliver to the Underwriters two copies of the
Preliminary Official Statement marked as a final Official
Statement, dated February 11, 1992 (the "Official Statement") , duly
2
executed by your City Manager (and, unless we waive manual
execution based upon evidence satisfactory to us, by Alvord,
Burdick & Howson as to Appendix D), which official Statement will
be substantially in the form of the Preliminary Official Statement,
with only such amendments as are necessary to complete it as a
final official Statement or as have been approved by the
Representative, which approval will be conclusively evidenced by
its execution and delivery of this Agreement.
3.2 Your acceptance, execution and delivery of this
Agreement will constitute your acknowledcjment that the Underwriters
(1) propose to make a bona fide public off ering of the Bonds at the
initial public offering prices or yields set forth in the official
Statement, (2) may effect transactions that stabilize or maintain
the market price of the Bonds at a level above that which,might
otherwise prevail in the open market and may discontinue the
stabilization, if commenced, at any time, and (3) may change the
offering prices of the Bonds from time to time, and may offer the
Bonds to certain dealers at prices lower than the public offering
prices shown on the front of the Official Statement.
3.3 Your acceptance, execution and delivery of this
Agreement will constitute (1) your consent and authorization to the
use by the Underwriters, in connection with the public offering and
sale of the Bonds, of copies of the Official Statement, including
any supplements or amendments to it, and (2) your ratification of
the use by the Underwriters in connection with the offering of the
Bonds of the Preliminary official Statement and the information
contained in it.
3.4 Upon your acceptance of this Agreement, you will
deliver or cause to be delivered to the Underwriters a copy of the
Master Water and Sewer Bond Resolution adopted by the City Council
of the City of Virginia Beach, virginia (the "Council") on February
11, 1992 (the "Master Resolution") as supplemented by a series
resolution adopted by the Council on February 11, 1992 (the "Series
Resolution" and, together with the Master Resolution, the
"Resolution") , authorizing the issuance and sale of the Bonds, and
a resolution adopted by the Council on February 11, 1992 awarding
the sale of the Bonds to the Underwriters and authorizing documents
related thereto including the execution and delivery of this
Agreement (the "Authorizing Resolution") in each case, in the form
duly adopted by the Council.
3
4. Closing; Delivery of Bonds.
At 10:00 a.m., Virginia Beach, virginia time, on February 27,
1992, or such other time and date as the Issuer and the
RepresentatiVe may agree in writing (the "Closing" or "Closing
Date"), the Issuer will cause the Bonds to be delivered to the
Underwriters at the offices of The Depository Trust Company, New
york, New York (IIDTC"). The Bonds will be in typewritten form,
with one bond per each maturity period. The other documents
mentioned in this Agreement will be delivered on the Closing Date
at the offices of Hunton & Williams in Norfolk, Virginia, or such
other place as the Representative and the Issuer may mutually
agree. on the Closing Date, the Underwriters will pay the purchase
price of the Bonds by wire transfer of federal funds payable to the
order or account of the Issuer at the office of Central Fidelity
Bank, Richmond, Virginia. Notwithstanding the foregoing, if the
Issuer prepares an amendment or supplement to the official
Statement pursuant to paragraph (h) of Section 6, the Closing may
be postponed by the Underwriters to the tenth business day after
the preparation of the amendment or such other time as the
Representative and the Issuer determine. The Bonds will be
delivered to DTC registered in the name of Cede & Co. or such other
name as DTC may request at least two business days before the
Closing. It is anticipated that CUSIP identification numbers will
be printed on the Bonds, but neither the failure to print the
numbers on any Bond nor any error in the numbers or the printing
will constitute cause for a failure or refusal by the Underwriters
to accept delivery and pay the purchase price of the Bonds.
5. Representations and Warranties.
5.1 The Issuer makes the following representations and
warranties to the Underwriters on this date and as of the Closing
Date:
(a) The Issuer is duly organized pursuant to its
Charter and is a validly existing political subdivision of the
Commonwealth of Virginia and has all power and authority granted to
cities under the Constitution and laws of virginia, including, in
particular, the Public Finance Act of 1991, Chapter 5.1, Title 15.1
of the Code of Virginia of 1950, as amended (the "Act").
(b) The Issuer has full power and authority to (1)
execute and deliver this Agreement and the Official Statement, (2)
adopt the Resolution and the Authorizing Resolution and approve and
authorize the distribution of the Preliminary official Statement
and the Official Statement, (3) issue the Bonds in the manner
contemplated by the Resolution, the Authorizing Resolution and the
Official Statement, (4) own and operate its Water and Sewer System
and (5) otherwise consummate all of the actions contemplated by the
4
Resolution, the Authorizing Resolution, this Agreement and the
official Statement to be consummated by the Issuer. The Issuer has
taken or will take all action required by the Act and other
applicable laws in connection with the foregoing.
(c) The Issuer has duly adopted the Resolution and
the Authorizing Resolution.
(d) The Issuer has duly authorized the (1)
execution and delivery of this Agreement and the Official
Statement, (2) distribution of the Preliminary Official Statement
and the official Statement, and (3) consummation of all of the
transactions contemplated under the Resolution, the Authorizing
Resolution, this Agreement and the official Statement to be
consummated by the Issuer.
(e) The execution and delivery of, and the
performance of the obligations of the Issuer under, the Resolution,
the Authorizing Resolution, this Agreement and the Official
Statement, and the issuance and sale of the Bonds and the
compliance with the terms thereof, under the circumstances
contemplated hereby and thereby, are within the corporate powers of
the Issuer and will not conflict with, or constitute a breach, or
result in a violation of or default under (1) the Act or any
ordinance of the Issuer or the Issuer's Charter, (2) any federal or
virginia constitutional or statutory provision, (3) in any material
respect, any agreement or other instrument to which the Issuer is
a party or by which it is bound, or (4) in any material respect,
any order, rule, regulation, decree or ordinance of any court,
government or governmental authority having jurisdiction over the
Issuer or its property or to which the Issuer or its property is
subject.
(f) No consent, approval, authorization, order of
or filing or registration with any governmental or regulatory
authority ("Consent") is required to be obtained by the Issuer as
a condition precedent to the issuance and delivery of the Bonds or
the execution and delivery by the Issuer of this Agreement or the
official Statement or the distribution of the Preliminary Official
Statement (provided no representation or warranty is expressed as
to any action required under federal or state securities or Blue
Sky laws in connection with the purchase or distribution of the
Bonds by the Underwriters) or to the performance of the Issuer's
obligations thereunder.
(g) Except as described in the Official Statement,
there is no litigation at law or in equity or any investigation or
proceeding before any governmental agency pending or, to the best
knowledge of the Issuer, threatened with respect to (1) the
existence of the Issuer, (2) its authority under the Act or
5
otherwise to execute and deliver this Agreement, the official
Statement or the Bonds, (3) the validity or enforceability of any
such instruments or any material provision thereof, including the
Resolution and the Authorizing Resolution or the transactions
contemplated by them or which seek to restrain or enjoin the
issuance or delivery of any of the Bonds, (4) the title of the
officers who executed or will execute such instruments, (5) any
authority or proceedings relating to the execution and delivery of
any such instruments by the Issuer, (6) the ability of the Issuer
to pledge the Revenues of the Water and Sewer System as described
in the official Statement to provide for payment of principal of or
inte@est on the Bonds, (7) the completeness or accuracy of the
official Statement, (8) the exclusion of interest on the Bonds from
Virginia or federal income taxation, or (9) proceedings in which a
final adverse decision would in any manner adversely affect
provisions for or materially adversely affect the sources for
payment of the Bonds.
(h) This Agreement (1) has been duly authorized,
executed and delivered and (2) constitutes a legal, valid and
binding obligation of the Issuer enforceable in accordance with its
terms, except as limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws and usual equity principles.
(i) The Bonds will conform in all material respects
to the descriptions thereof contained in the Official Statement?
and when authenticated by the Fiscal Agent and delivered to and
paid for by the Underwriters in accordance with the terms of this
Agreement, the Bonds (1) will have been duly authorized, executed
and issued, (2) will constitute leqal, valid and binding limited
obligations of the Issuer enforceable in accordance with their
terms, except as limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws and usual equity principles, and (3)
will be secured by the Revenues of the Water and Sewer System as
more particularly described in the Official Statement.
(j) The Issuer is not in default in the payment of
the principal of or interest on any of its indebtedness for
borrowed money. The Issuer is not in default in any material
respect under any document or instrument which default would affect
materially and adversely the transactions contemplated by this
Agreement or the financial condition of the System. No event has
occurred or is continuing under the provisions of any such document
or instrument that, with the lapse of time or the giving of notice,
or both, would constitute an event of default thereunder which
event of default would affect materially and adversely the
transactions contemplated by this Agreement or the financial
condition of the System.
6
(k) The Issuer is not in violation of the Act or,
in any material respect, any existing law, rule or regulation
applicable to it, which violation would affect materially and
adversely the execution and delivery by the Issuer of this
Agreement or the transactions contemplated by this Agreement or the
financial condition of the System. The Issuer is not in default
under any indenture, mortgage, deed of trust, lien, lease,
contract, note, order, judcjment, decree or other agreement,
instrument or restriction of any kind to which the Issuer is a
party or by which it is bound or to which any of its assets are
subject, which default would affect materially and adversely the
execution and delivery by the Issuer of this Agreement, the
transactions contemplated by this Agreement or the financial
condition of the System.
(1) The information, including all appendices and
attachments in the official Statement (except for information
relating to "Yields" or "Prices" of the Bonds and contained under
the section headings "Book-Entry-Only System" and "Tax Exemption"
in Section One and except for stabilization language on the inside
front cover thereof and the opinion in Appendix B) is as of its
date and will be as of the date of Closing true and correct and
does not and will not contain any untrue statement of a material
fact or omit to state a material fact that is necessary to make the
statements made, in light of the circumstances under which they
were made, not misleading.
(m) The Preliminary Official Statement heretofore
delivered to the Underwriters was deemed final by the Issuer as of
its date, except for the omission of such information permitted by
Rule 15c2-12 under the Securities and Exchange Act of 1934.
5.2 The Underwriters represent and warrant that they
will make a bona fide public offering of the Bonds, that the Bonds
will only be offered pursuant to the official Statement and only in
states where the offer is legal and that a copy of the official
Statement will be delivered to each purchaser of the Bonds. The
Underwriters further represent and warrant that they will file a
copy of the final official Statement with a nationally recognized
securities information repository registered with the Securities
and Exchange Commission upon receipt thereof to shorten the length
of the underwriting period as provided in Rule 15c2-12.
5. 3 Each of the representations and warranties set forth
in this Section will survive the Closing.
5.4 Any certificate signed by any of the Issuer's
officials and delivered to the Underwriters in connection with the
delivery of the Bonds will be deemed to be a representation and
warranty by the Issuer to the Underwriters as to the statements
7
made in this Agreement, and any certif icate signed by the
Underwriters and delivered to the Issuer in connection with the
delivery of the Bonds will be deemed to be a representation and
warranty by the Underwriters to the Issuer as to the statements
made in this Agreement.
6. Covenants.
I
The Issuer covenants with the Underwriters that:
(a) The Issuer will cause to be made available to the
Underwriters such reasonable quantities (not to exceed 25) of the
Resolution and the Authorizing Resolution as the Underwriters may
request for use in connection with the offering and sale of the
Bonds and will cooperate with the Underwriters to make reasonable
quantities of the final Official Statement available to the
Underwriters within 7 business days of this date and in time to
accompany any confirmation that requests payment from any customer
of the Underwriters, and in sufficient quantities as the
Underwriters may request to enable them to comply with Rule 15c2-12
and the Rules of the municipal securities Rulemaking Board (the
'IMSRB").
(b) The Issuer will apply the proceeds from the sale of
the Bonds as provided in and subject to all of the terms and
provisions of the Resolution, the Authorizing Resolution and the
official Statement and will not take or omit to take any action
which action or omission will adversely affect the exclusion from
gross income for federal or virginia income tax purposes of the
interest on the Bonds.
(c) The Issuer will furnish such information and execute
such instruments and take such action in cooperation with the
Underwriters as the Underwriters may reasonably request (1) to (A)
qualify the Bonds for offer and sale under the Blue Sky or other
securities laws and regulations of such states and other
jurisdictions in the United States as the Underwriters may
designate and (B) determine the eligibility of the Bonds for
investment under the laws of such states and other jurisdictions
and (2) to continue such qualifications in effect so long as
required for the distribution of the Bonds; provided, however, that
the Issuer will not be required to qualify as a "foreign
corporation" or to file any general consents to service of process
under the laws of any state or to comply with any other
requirements deemed by the Issuer to be unduly burdensome. The
Issuer consents to the use of the Preliminary official Statement
and official Statement in connection with the foregoing.
(d) The Issuer will advise the Underwriters immediately
of receipt by the Issuer of any notification with respect to the
8
suspension of the qualification Of the Bonds for sale in any
jurisdiction or the initiation or threat of any proceeding for that
purpose.
(e) From the closing Date until twenty-five days after
the end of the underwriting period (as defined below), the Issuer
agrees to notify the Underwriters of any material event of which it
has actual knowledge which affects the Issuer and which, in the
judgment of the Issuer after reasonable inquiry, might affect the
correctness or completeness of any statement of a material fact
contained in the Official Statement as it relates to the Issuer.
If, as a result of such event or any other event, it is necessary,
in the reasonable opinion of the Underwriters, to amend or
supplement the Official Statement to make the statements in it, in
the light of the circumstances under which they were made, not
misleading and the Underwriters have so advised the Issuer, the
Issuer agrees that it will promptly prepare and furnish to the
Underwriters (at the expense of the Issuer) a reasonable number of
copies of an amendment of or a supplement to the Official Statement
that will amend or supplement the Official Statement in a form and
manner as is reasonably acceptable to the Underwriters. For
purposes of this Agreement, the term 'lend of the underwriting
period" means the later of the Closing or when the Underwriters no
longer retain an unsold balance of the Bonds for sale to the
public. The Underwriters agree that the underwriting period will
be deemed to end on the date of Closing, unless the Underwriters
otherwise notify the Issuer in writing, before such date of the
approximate unsold balance of the Bonds, in which case the
underwriting period will be extended for the lesser of thirty days
or the first date on which the Underwriters no longer have an
unsold balance of the Bonds (with the Underwriters to give notice
to the Issuer of such date if less than thirty (30) days after
Closing) . The Underwriters will use their best ef forts to end the
underwriting period by Closing.
(f) If between this date and the date of the Closing any
event occurs which would cause the official Statement, as then
supplemented or amended, to contain any untrue statement of a
material fact or to omit to state a material fact required to be
stated, in the light of the circumstances under which it was made,
not misleading, the Issuer will notify the Underwriters of this
event and if in the opinion of the Issuer or the reasonable opinion
of the Underwriters this event requires the preparation and
publication of a supplement or amendment to the Official Statement,
the Issuer will furnish such information as may be necessary to
correct this misstatement or omission and will cooperate to cause
the official Statement to be amended or supplemented in a form
reasonably satisfactory to the Underwriters and approved by the
Issuer. All costs associated with any such supplements or
amendments will be paid by the Issuer.
9
(g) The issuer will (1) take all action necessary
including execution of a letter of representations to DTC to
qualify the Bonds for book-entry registration and delivery through
DTC, and (2) deliver authenticated Bonds to DTC at the time and
place provided in Section 4 of this Agreement.
(h) The Issuer will not take or omit to take any action
which, under existing law, adversely affects the exemption from
federal or Commonwealth of Virginia income taxation of the interest
on the Bonds.
7. Conditions o sin
7.1 The Underwriters have entered into this Agreement in
reliance upon the representations, warranties, covenants and
agreements of the Issuer contained in it, and in reliance on the
documents and instruments to be delivered at the Closing and on the
performance by the Tssuer of its obligations under this Agreement,
both as of this date and as of the date of the Closing.
Accordingly, the obligation of the Underwriters to consummate the
transactions contemplated in this Agreement at the Closing are
conditioned upon the performance by the Issuer of its obligations
to be performed under this Agreement and under such documents and
instruments at or before Closing, and is subject to the
satisfaction (unless waived in writing) of the following
conditions:
(a) There shall be no material error, misstatement
or omission in the representations and warranties made by the
Issuer in this Agreement, which representations and warranties will
be deemed to have been made again at and as of the time of the
Closing and will then be true in all material respects and the
statements made in all certificates and other documents delivered
to the Underwriters at the Closing pursuant hereto shall not be
materially inaccurate at Closing; and the Issuer shall be in
compliance with each of the agreements made by it in this
Agreement.
(b) The Resolution, the Authorizing Resolution, the
Act and this Agreement will be in full force and effect and will
not have been amended, modified or supplemented, and the official
Statement will not have been supplemented or amended, except as may
have been agreed or consented to by the Underwriters.
(c) At the time of the Closing, all official action
of the Issuer relating to this Agreement, the Bonds, the Resolution
and the Authorizing Resolution will be in full force and effect and
will not have been amended, modified or supplemented except as
otherwise agreed to by the Underwriters.
10
(d) At the time of the closing, there will have
been no material adverse change or any material development
involving a prospective change, in the condition, financial or
otherwise, of the Issuer from that set forth in the official
Statement that in the reasonable judgment of the Underwriters makes
it impracticable to market the Bonds on the terms and in the manner
contemplated in the official Statement.
(e) The underwriters will have received the
official Statement, and each supplement or amendment, if any, to
it, executed on behalf of the issuer by the City Manager of the
Issuer.
(f) The Underwriters will have received from Hunton
& Williams, Bond Counsel, an approving opinion, dated the Closing
Date, in substantially the form set forth in Exhibit B to the
official Statement.
(g) The Underwriters will have received from Bond
Counsel a supplemental opinion or opinions, dated the Closing Date,
in substantially the form of Exhibit B.
(h) The Underwriters will have received from the
City Attorney, as counsel to the Issuer, an opinion dated the
closing Date in substantially the form of Exhibit C.
(i) The Underwriters will have received from Brown
& Wood, counsel to the Underwriters, an opinion, dated the closing
Date, in substantially the form of Exhibit D.
(i) The Underwriters will have received a
certificate regarding the Issuer's representations and warranties
dated the Closing Date, signed by the City Manager of the Issuer
and the Comptroller and Interim Director of Finance of the Issuer,
in substantially the form of Exhibit E.
(k) The Underwriters will have received a
certificate of the City Manager of the Issuer and the Director of
Finance, setting forth facts, estimates and circumstances
(including covenants of the Issuer) in existence on the Closing
Date sufficient to support the conclusion that it is not expected
that the proceeds of the Bonds will be used in a manner that would
cause the Bonds to be "arbitrage bonds" within the meaning of
Section 148 of the Internal Revenue Code of 1986, as amended and
applicable rules and regulations.
(1) The Underwriters will have received a
certificate of the Issuer and the Fiscal Agent as to the receipt of
payment for the Bonds.
11
The Underwriters will have received
confirmations of ratings from Moody's Investors service, Inc. and
Standard & Poor's Corporation indicating the Bonds have been rated
"All' and IIA+ll, respectively, which ratings will remain in effect on
the closing Date.
(n) The underwriters will have received certified
copies of thb Resolution and the Authorizing Resolution.
(o) The underwriters will have received a
certificate of the Department of Public Utilities of the Issuer,
substantially in the form attached hereto as Exhibit F.
(p) The Underwriters will have received a
certificate of Alvord, Burdick & Howson, substantially in the form
attached hereto as Exhibit G.
(q) The Underwriters will have received a letter
from KPMG Peat Marwick, in form and substance satisfactory to the
Representative, to the effect that they are independent certified
public accountants with respect to the Issuer. KPMG Peat Marwick
shall also deliver to the Representative a letter, in form and
substance satisfactory to the Representative, dated the date of the
official Statement, to the effect that they consent to the
inclusion of their audit report, dated November 8, 1991, in the
Preliminary Official Statement and the Official Statement.
(r) The Underwriters will have received such
additional legal opinions, certificates and other evidence as the
Underwriters or bond counsel reasonably may deem necessary to
evidence the truth and accuracy as of the Closing Date of the
Issuer's representations and warranties contained in this Agreement
and the Official Statement and the due performance and satisfaction
by the Issuer at or before the time of any agreements then to be
performed and all conditions then to be satisfied by the Issuer.
7.2 If any of the conditions set forth in Section 7.1
have not been met on the Closing Date, the Underwriters may, at
their sole option, terminate this Agreement. If this Agreement is
terminated pursuant to this Section, neither party will have any
rights or obligations to the other, except as provided in Section
10.
S. Actions and Events at th sin
At the Closing, (1) the Issuer: (A) will deliver the Bonds to
DTC duly executed by the Issuer in accordance with Section 4; and
(B) will deliver to the underwriters at the place of Closing
identified in Section 4, or at such other place or places as the
Issuer and the Underwriters mutually agree, the items described in
12
Section 7.1 and (2) the Underwriters will deliver to the Issuer
payment for the Bonds as provided in Section 4.
9. Termination of Agreement.
The Underwriters have the right to terminate the Underwriters,
obligations under this Agreement, without liability by notifying
the Issuer at any time after the date of this Agreement and before
Closing if:
(a) (1) Legislation (including any amendment) has been
introduced in or adopted by either House of the Congress of the
United States or favorably reported for passage to either House of
the Congress by any Committee of such House or recommended to the
Congress for passage by the President of the United states, or (2)
a decision has been rendered by a court of the United States or by
the United States Tax Court, or (3) an order, official statement,
ruling or regulation (final, temporary or proposed) has been made
by or on behalf of the Treasury Department of the United States or
the Internal Revenue service or any other agency of the United
States, or (4) a release or official statement has been issued by
the President of the United States or by the Treasury Department of
the United States or by the Internal Revenue Service, the effect of
which, in any such case described in clause (1), (2), (3), or (4),
would be to impose, directly or indirectly, federal income taxation
upon interest received on obligations of the general character o.f
the Bonds or upon income of the general character to be derived by
the Issuer, other than as imposed on the Bonds and income from them
under the federal tax laws in effect on this date, in such a manner
as in the reasonable judgment of the Underwriters would materially
and adversely affect the marketability or the market price of
obligations of the general character of the Bonds or their ability
to enforce contracts for the sale of the Bonds;
(b) (1) The Constitution of the Commonwealth of Virginia
is amended or an amendment is proposed, or (2) legislation is
enacted, or (3) a judicial decision has been rendered as to matters
of virginia law, or (4) any order, ruling or regulation has been
issued or proposed by or on behalf of the Commonwealth of Virginia
by any of its officials, agencies or departments, affecting the tax
status of the Issuer, its property or income, its notes or bonds
(including the Bonds), or the interest on them, which in the
reasonable judgment of the Underwriters would materially and
adversely affect the marketability or the market price of the
Bonds;
(c) Any fact or event exists or has existed that, in the
Underwriters' reasonable judgment, requires or has required an
amendment of or supplement to the Official Statement under the
13
terms of this Agreement which has not been completed to the
Underwriters' reasonable satisfaction;
(d) There has occurred any outbreak or escalation of
hostilities or any change in financial markets or any local,
national or international calamity or crisis, the effect of which,
in the Underwriters' reasonable judgment, would materially and
adversely affect the marketability or the market price of the
Bonds;
(e) (1) A general suspension of trading on the New York
Stock Exchange has occurred and is in force or minimum or maximum
prices for trading have been fixed and are in force or maximum
ranges for prices for securities have been required and are in
force on the New York Exchange, whether by virtue of a
determination by such Exchange or by order of the Securities and
Exchange Commission or any other governmental authority, (2) a
suspension of trading has occurred and is in force by order of the
Securities and Exchange Commission, which in the reasonable
judgment of the Underwriters would materially and adversely affect
the marketability or market price of the Bonds;
(f) A general banking moratorium has been declared by
either federal, State of New York or Commonwealth of Virginia
authorities and is in force;
(g) Legislation has been enacted by the federal
government or the Commonwealth of Virginia, a decision of any
federal or commonwealth of Virginia court has been made, or a
ruling or regulation (proposed, temporary or final) of the
Securities and Exchange Commission or other governmental agency has
been made or issued that, in the reasonable opinion of counsel for
the Underwriters, (1) has the effect of requiring the contemplated
distribution of the Bonds or any agreement offered in connection
with them to be registered under the Securities Act of 1933, as
amended, or (2) that the issuance and sale of the Bonds will result
in a violation of such provisions;
(h) The purchase of and payment for the Bonds by the
Underwriters, or the sale of the Bonds to the Underwriters or their
resale or reoffering by the Underwriters, on the terms and
conditions provided in this Agreement is prohibited by any
applicable law, governmental authority, board, agency or
commission;
(i) The "blue sky" or securities commission of any state
in the United States has withheld registration, exemption, or
clearance of the offering of the Bonds because of a change in or
interpretation of law after the date of this Agreement, and, in the
reasonable judgment of the Underwriters, the effect of the
14
withholding will materially and adversely affect the market price
or marketability of the Bonds, or the ability of the Underwriters
to enforce contracts for the sale;
(j) Additional material restrictions not in force on the
date of this Agreement have been imposed on trading in securities
generally or by a governmental authority or the national
association of securities dealers; or
(k) Any amendment of or supplement to the Official
Statement is distributed as to actions or events not contemplated
by the Preliminary official Statement (whether or not such
amendment or supplement was approved by the Underwriters prior to
its distribution) that, in the reasonable opinion of the
Underwriters, has a material and adverse effect upon the ability of
the Underwriters to sell the Bonds at the contemplated offering
prices.
10. nses.
The Underwriters are under no obligation to pay, and the
Issuer will cause to be paid all expenses incident to the
performance of its obligations under this Agreement, including, but
not limited to, (1) the cost of the printing or other reproduction
(for distribution before, on, or after the date of acceptance of
this Agreement) of the Preliminary Official Statement and the
Official Statement, in sufficient quantities for distribution to
potential purchasers (in the case of the Preliminary Official
Statement) and to purchasers (in the case of the Official
Statements and as required by Rule 15c2-12, (2) charges made by
rating agencies for the rating of the Bonds, (3) the cost of
preparing the definitive Bonds, (4) the fees and disbursements of
bond counsel, the Issuer's Financial Advisor, Alvord, Burdick &
Howson, KPMG Peat Marwick, the Fiscal Agent and any other experts,
advisors or consultants retained by the Issuer, (5) the costs of
paying all agents, transfer agents and bond registrars, (6) the
Representative's costs of funds incurred for the amount of the good
faith check delivered in accordance with section 2 of this
Agreement, and fees and expenses of any wire transfers made
pursuant to Section 4 of this Agreement, (7) the costs of
qualifying the Bonds for sale in various states chosen by the
Underwriters, and (8) the fees and expenses, including travel
expenses, incurred by the Issuer in connection with the issuance,
sale and delivery of the Bonds. The foregoing notwithstanding the
Underwriters shall be responsible for the fees and expenses of
their counsel and the Underwriters, travel, telephone, advertising
and similar incidental expenses.
15
11. Indemn ers.
(a) The Underwriters will indemnify and hold harmless
the Issuer against any losses, claims, damages or liabilities to
which the Issuer may become subject under federal laws or
regulations or otherwise, to the extent and only to the extent that
any such losses, claims, damages or liabilities result because (a)
a copy of the official Statement was not sent or given to the
person (so asserting such losses, claims, damages or liabilities)
who purchased Bonds from the Underwriters in connection with the
initial distribution by the Underwriters or (b) the Underwriters
made a public of f ering of the Bonds in a state where such of f er was
not legal. The Underwriters will reimburse the Issuer for any
legal or other expenses reasonably incurred in connection with
investigating or defending any such loss, claim, damage, liability
or action. The Underwriters shall not be responsible to the Issuer
nor indemnify the Issuer for failure of any selling group members
or selling concern. This indemnity agreement will be in addition
to any liability which the Underwriters otherwise may have.
(b) If any litigation is commenced or threatened against
the Issuer under subsection (a) hereof, the Issuer shall promptly
notify the Underwriters in writing, but failure to notify the
Underwriters thereof shall not relieve them from any liability that
it may have whether on account of this indemnity or otherwise. The
Underwriters shall promptly assume the investigation, preparation
and defense of all such litigation or action, including the
employment of counsel acceptable to the indemnified party, the
payment of fees and expenses and the right to negotiate and consent
to settlement. The Issuer shall have the right to make its own
investigation or employ separate counsel, but the fees and expenses
of such investigation of counsel shall be at the expense of the
Issuer unless such investigation or the employment of such counsel
has been specifically authorized by the Underwriters.
12. Miscellaneous.
(a) All notices, demands and formal actions under this
Agreement will be in writing and mailed, telecopied or delivered to
the following address or such other address as either of the
parties shall specify:
(i) If to the Underwriters:
Painewebber Incorporated
1285 Avenue of the Americas
10th Floor
New York, New York 10019
Attention: Robert A. Kinney
16
If to the Issuer:
CitY of Virginia Beach
Municipal Center
Virginia Beach, Virginia 23456
Attention: City Manage,
(b) This Agreement will inure to the benefit of and be
binding upon its parties and their successors and assigns and does
not confer any rights upon any other person. The terms I'successorol
and "assigns" do not include any purchaser of any of the Bonds from
the Underwriters merely because of such purchase.
(c) This Agreement may not be assigned by the Issuer or
the Underwriters.
(d) If any provision of this Agreement is held or deemed
to be or is, in fact, inoperative, invalid or unenforceable as
applied on any particular case in any jurisdiction or
jurisdictions, this will not have the effect of rendering the
provision in question inoperable or unenforceable in any other case
or circumstances or of rendering any other provision of this
Agreement valid, inoperative or unenforceable to any extent
whatsoever.
(e) This Agreement will be governed by and construed in'
accordance with the laws of virginia.
(f) This Agreement may be executed in several
counterparts, each of which will be regarded as an original and all
of which will constitute one and the same document.
Very truly yours,
PAINEWEBBER INCORPORATED, on behalf of
itself and the below-listed Underwriters
By:
Its:
17
By our acceptance of this Agreement,
given this date, we agree to be
bound by the provisions of thi,
Agreement that relate to us
CITY OF VIRQINIA BEACH, VIRGINIA
By:
Its: City Manager
UNDERWRITERS:
PAINEWEBBER INCORPORATED
CRAIGIE INCORPORATED
SCOTT & STRINGFELLOW INVESTMENT
CORPORATION
WHEAT, FIRST SECURITIES, INC.
18
Exhibit A
PRICES OF THE BONDS
original
Maturity Principal Interest Issue
February 1, Amount Rate Discount
1993 $ 380,000.00 3.500% 0.00
1994 395,000.00 4.300 0.00
1995 410,000.00 4.750 0.00
1996 430,000.00 5.000 0.00
1997 455,000.00 5.250 0.00
1998 475,000.00 5.500 0.00
1999 505,000.00 5.600 1,459.45
2000 530,000.00 5.800 1,690.70
2001 565,000.00 6.000 1,960.55
2002 595,000.00 6.000 6,592.60
2003 630,000.00 6.125 6,205.50
2004 670,000.00 6.250 2,820.70
2010 5,035,000.00 6.500 65,807.45
2017 8,900,000.00 6.625 80,990.00
Exhibit B
(Supplemental opinion of Bond Counsel]
February 27, 1992
PaineWebber Incorporated
Craigie Incorporated
Scott & Stringfellow Investment Corp.
Inc.
Wheat, First'securities,
c/o PaineWebber Incorporated
1285 Avenue of the Americas, 10th Floor
New York, New York 10019
city of virginia Beach, virginia
$19,975,000 Water and Sewer System Revenue Bonds, Series of 1992
Ladies and Gentlemen:
Reference is made to our opinion delivered today as Bond
counsel in connection with issuance by the City of Virginia Beach,
Virginia (the "City"), of its $19,975,000 Water and Sewer System
Revenue Bonds, Series of 1992 (the "Bonds") . We hereby advise you
that we now deliver such opinion for your benefit, as well as for
the benefit of the City and you are entitled to rely upon such
opinion as if it were addressed to you.
At your request, we have reviewed a Bond Purchase Agreement
dated February 11, 1992 (the "Bond Purchase Agreement"), between
you and the City, certified copies of proceedings of the City with
respect to the Bond Purchase Agreement and certain sections
described below of the official Statement of the City dated
February 11, 1992, relating to the Bonds (the "Official
Statement"), as well as such agreements, instruments, opinions,
certificates and other documents as we have deemed necessary for
purposes of the advice contained in this letter. We have not
verified and are not passing upon, we do not assume any
responsibility for, and we have made no independent investigation
regarding the accuracy or completeness of, the statements contained
in the official Statement, except to the extent indicated in
paragraph 3.
On the basis of the foregoing, we advise you as follows:
1. In our opinion, the Bonds are exempt from the
registration requirements of the Securities Act of 1933, as
amended, pursuant to Section 3(a)(2) thereof, and the Resolution
(as such term is defined in the Bond Purchase Agreement) is not
required to be qualified as an indenture under the Trust Indenture
Act of 1939, as amended.
PaineWebber Incorporated
Craigie Incorporated
scott & Stringfellow Investment Corp.
Wheat, First Securities, Inc.
c/o PaineWebber Incorporated
Feb. 27, 1992
Page 2
2. In our opinion, the Bond Purchase Agreement has been duly
authorized, executed and delivered by the City, and, assuming the
due authorization, execution and delivery thereof by you,
constitutes a valid and binding obligation of the City enforceable
against the City in accordance with its terms, except as
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the rights of
creditors generally and by principles of equity, whether considered
at law or in equity.
3. The statements relating to the Bonds and the summaries of
documents, statutes and opinions contained under the captions
"Section One: Introduction - The Series 1992 Bonds" (only as to
matters contained under the subcaptions "Security for the 1992
Bonds", "Optional Redemption", "Mandatory Redemption" and "Tax
Exemption") , "Section Two: The Series 1992 Bonds" (except for the
subcaptions "Book-Entry-only System" and "Litigation" as to which
no opinion is expressed) and "Section Three: Summary of the
Resolution" of the official Statement, fairly and accurately
summarize the material provisions of the Bonds, the Resolution and
the documents, statutes and opinions referred to therein.
Furthermore, we wish to advise you that in the course of such
review, nothing has come to our attention that would lead us to
believe that such statements contain any untrue statement of a
material fact or omit to state any material fact necessary to make
such statements, in light of the circumstances under which they
were made, not misleading.
Very truly yours,
Exhibit C
(opinion of Underwriters' counsel]
February 27, 1992
PaineWebber Incorporated
Craigie Incorporated
Scott & Stringfellow Investment Corp.
Wheat, First Securities, Inc.
c/o PaineWebber Incorporated
1285 Avenue of the Americas, 10th Floor
New York, New York 10019
Ladies and Gentlemen:
We have acted as counsel for the Underwriters named in the
Bond Purchase Agreement dated February 11, 1992 (the "Contract of
Purchase") , between such Underwriters and the City of Virginia
Beach, virginia (the "City") , in connection with the issue and sale
by the City to you of the City's $19,975,000 Water and Sewer System
Revenue Bonds, Series of 1992 (the "Bonds").
We have examined among other documents, copies of the Contract
of Purchase, the Resolution identified therein and the Official
Statement, dated February 11, 1992 (the "Official Statement"),
submitted to you by the City, relating to the offering and sale of
the Bonds.
Based upon the foregoing, we are of the opinion that the Bonds
are exempt from registration under the Securities Act of 1933, as
amended, and are municipal securities under the Securities Exchange
Act of 1934, as amended, and no indenture need be qualified with
respect thereto under the Trust Indenture Act of 1939, as amended.
In addition to rendering such opinion, and in accordance with
our understanding with you, we have participated with you in the
review of the official Statement, in the course of which review, as
legal counsel for the Underwriters, we joined you in conferences
with representatives of the City, Bond Counsel, Consulting Engineer
and Financial Advisor and representatives of the City Attorney's
office and the City's Department of Public Utilities, at which
PaineWebber Incorporated
Craigie Incorporated
scott & Stringfellow Investment Corp.
Wheat, First Securities, Inc.
c/o PaineWebber Incorporated
Feb. 27, 1992
Page 2
conferences the contents of the official Statement and related
matters were discussed.
our review was not intended to enable us to pass upon, and we
are not passing upon, the accuracy 'completeness or fairness of all
of the statements contained in the official Statement,
particularly, but not limited to, the financial statements and the
engineering, financial and statistical data and forecasts in
Appendices A, C and D and elsewhere in the official Statement.
While our participation in such conferences and review would
not necessarily reveal matters of materiality or significance with
respect to statements in or omissions from the official Statement,
based on such participation and review, as of the date hereof we
have not become aware of any untrue statement of a material fact in
the official Statement or the omission to state a material fact
necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not
misleading except that we express no view with respect to the
financial statements and the engineering, financial and statistical
data and forecasts in Appendices A, C and D and elsewhere in the
official Statement.
This letter is solely for the information of, and assistance
to, the Underwriters and is not to be used, circulated, quoted or
otherwise referred to in connection with the offering of the Bonds,
except that reference to our opinion herein may be made in the
official Statement or any other document and reference to this
letter may be made in any list of closing documents pertaining to
the sale of the Bonds. This letter refers only to the Bonds as
delivered to the Underwriters by the city, and no view is expressed
as to any offering by Underwriters or others of derivative
instruments with investment characteristics not identical to those
of the Bonds.
Respectfully submitted,
EXHIBIT D
February 27, 1992
city of virginia Beach
Municipal Center
virginia Beach, Virginia 23456-9004
PaineWebber Incorporated,
on behalf of a group
of underwriters
1285 Avenue of The Americas
ioth Floor
New York, New York 10019
city of virginia Beach, virginia
$19,975,000 Water and Sewer System Revenue Bonds
series of 1992
Ladies and Gentlemen:
I am the City Attorney of the city of Virginia Beach (the
t'City") in the Commonwealth of Virginia. In connection with the
issuance by the City of the above-referenced bonds (the "Bonds"),
being issued to finance improvements and extensions to the City's
water and sanitary sewer system (the "Project), I have examined
the following:
(i) The Constitution and statutes of the Commonwealth of
Virginia, including the City Charter and the Public Finance Act
of 1991 (the "Act"), and such applicable court decisions as I
have deemed necessary or relevant for the purpose of the opinions
set forth below.
(ii) A certified copy of a resolution duly adopted by the
City Council on February 11, 1992, entitled "Master Water and
Sewer Revenue Bond Resolution Providing for the Issuance from
Time to Time of Water and Sewer System Revenue Bonds of the City
of Virginia Beach" (the "Master Resolution").
(iii) A certified copy of a resolution duly adopted by the
City Council on February 11, 1992, supplementing the Master
Resolution (the "Supplemental Resolution"), and providing for the
issuance and sale of the Bonds to finance costs of the Project.
City of Virginia Beach
PaineWebber Incorporated
February 27, 1992
Page 2
(iv) A certified coPY of a resolution duly adopted by the
city Council on February 11, 1992, entitled "Resolution Awarding
the sale of $19,975,000 Water and Sewer system Revenue Bonds,
Series of 1992, of the City of Virginia Beach, Virginia" (the
"Award Resolution"), authorizing among other things the execution
and delivery of a Bond Purchase Agreement, dated February 11,
1992 (the "Bond Purchase Agreement"), between the City and Paine-
Webber Incorporated, on behalf of a group of underwriters (the
,,underwriters'-).
(v) The Preliminary Official Statement of the city, dated
February 3, 1992, and the official Statement dated
February 11, 1992 (collectively, the "Official Statement"), with
respect to the offering of the Bonds.
(vi) An executed copy of the Bond Purchase Agreement.
Based upon and subject to the foregoing and upon such other
information and documents as I consider necessary for the purpose
of rendering this opinion, I am of the opinion that:
1. The City is a duly organized Virginia municipal corpo-
ration and has all necessary power and authority to (a) construct
the Project and own and operate the System, as defined in the
Master Resolution, (b) authorize and issue the Bonds, and (c) to
enter into and perform its obligations under the Bond Purchase
Agreement.
2. The Master Resolution, the Supplemental Resolution and
the Award Resolution (collectively, the "Resolution") have been
duly adopted by the City Council and are in full force and effect
and constitute valid and binding obligations of the City enforce-
able in accordance with their respective terms, except to the
extent that the enforceability thereof may be limited by bank-
ruptcy, insolvency, reorganization, moratorium and other laws
affecting the rights of creditors generally and principles of
equity, whether considered at law or in equity.
3. The Bond Purchase Agreement has been duly authorized,
executed and delivered by the City and constitutes a valid and
binding agreement of the City enforceable in accordance with its
terms, except to the extent that the enforceability there may be
limited by bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the rights of creditors generally and
principles of equity, whether considered at law or in equity.
city of Virginia Beach
PaineWebber Incorporated
February 27, 1992
Page 3
4. The City has duly performed all obligations to be
performed by it pursuant to the Resolution and the Bond Purchase
Agreement ofi or prior to the date hereof.
5. The authorization, execution and delivery of the Bond
Purchase Agreement and the performance of the City's obligations
thereunder are within the corporate powers of the city and do not
and will not conflict with or constitute a violation of, breach
of, or default under (1) the City Charter, (2) federal or Virgin-
ia constitutional provision or any other provision of Virginia
law, (3) to the best of my knowledge after due investigation, any
agreement or other instrument to which the City is a party or by
which the City is bound, or (4) to the best of my knowledge after
due investigation, any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the City or
any of its properties.
6. Pursuant to the Master Resolution, the City is required
to fix, charge and collect such rates, fees and other charges for
the use of and for the services furnished by the System, so that
such rates, fees, charges and other revenues of the System will
be sufficient in each of the City's fiscal years to pay the cost
of operation and maintenance of the System, the principal of and
premium, if any, and interest on the Bonds and any other debt
attributable to the System, as the same becomes due, and to
provide certain reserves therefor.
7. To the best of my knowledge, after diligent inquiry,
the City, with respect to the System, is not in breach of or
default in any material respect under any applicable constitu-
tional provision, law or administrative regulation of virginia or
the United States or any applicable judgment or decree or any
loan agreement, indenture, bond, note, material resolution,
material agreement or other material instrument to which the City
is a party or to which the City or any of its property or assets
is otherwise subject, and no event has occurred and is continuing
which with the passage of time or the giving of notice, or both,
would constitute a default or event of default under any such
instrument, except in each case as disclosed in the official
Statement.
8. There is no litigation at law or in equity or any
proceeding before any governmental agency pending or, to the best
of my knowledge after due investigation, threatened with respect
to (a) the organization or existence of the City or the title to
the offices of the officers thereof, (b) its authority to execute
and deliver the Bond Pu@chase Agreement, (c) the validity or
City of Virginia Beach
PaineWebber Incorporated
February 27, 1992
Page 4
enforceability of the Bond Purchase Agreement or the transactions
contemplated,thereby, (d) any authority or proceeding relating to
the execution and delivery of the Bond Purchase Agreement by the
city, (e) restraining or enjoining the issuance, sale or delivery
of any of the Bonds, (f) the Project or System, except as dis-
closed in the official Statement.
9. To the best of my knowledge after due investigation,
the City is not a party to any contract or agreement or subject
to any charter or other restriction not disclosed in the Official
Statement'(including the financial statements constituting a part
thereof,) the performance or the breach of which has or may have
a material adverse effect upon the financial condition or opera-
tions of the City.
10. To the best of my knowledge after due investigation,
the information contained in the subsection of the Official
statement entitled "Litigation" in the section entitied "Section
Two: The Bonds" is true and correct and does not contain any
untrue statement of a material fact and does not omit to state
any material fact necessary to make the statements contained
therein, in light of the circumstances under which they were
made, not misleading. To the best of my knowledge the statements
and information contained in the Official Statement relating t6
the City and the System, exclusive of the financial information
contained therein, are true and correct in all material respects
and do not contain any untrue statement of a material fact and do
not omit to state any material fact necessary to make the state-
ments contained therein, in light of the circumstances under
which they were made, not misleading. The information regarding
the Lake Gaston project litigation contained in under captions
"Section Two: The Bonds - Litigation," and "Section Five: Water
and Sewer System Indebtedness and Capital Improvement Plan,"
accurately describes in all material respects the status of such
litigation.
ii. The Official Statement has been duly authorized,
executed and delivered for distribution in connection with the
sale of the Bonds.
Very truly yours,
Leslie L. Lilley
City Attorney
Exhibit E
CERTIFICATE OF THE CITY MANAGER
AND THE INTERIM DIRECTOR OF FINANCE
PURSUANT TO SECTION 7.1(j) OF THE BOND PURCRASE AGREEMENT
We, James K. Spore, City Manager of the City of Virginia
Beach, virginia (the "City") , and Robert M. Hayes, Comptroller and
Interim Director of Finance of the City, DO HEREBY CERTIFY on
behalf of the City as follows:
1. The representations and warranties of the City
contained in the Bond Purchase Agreement dated February 11,
1992 between the City and the Underwriters named therein (the
"Bond Purchase Agreement"), are true and correct on and as of
the date hereof as if made on and as of the date hereof, and
the City has complied with and performed all of its covenants
and agreements in the Bond Purchase Agreement.
2. Each of the conditions in Section 7 of the Bond
Purchase Agreement to be satisfied by the City has been
satisfied by the City on the date hereof.
3. The official statement of the City dated
February 11, 1992 delivered pursuant to the Contract of
Purchase (excluding from such Official Statement the "Yields"
or "Prices" of the Bonds on the cover page, the stabilizations
clause and the information in Appendix B and under the
captions "Section One: Introduction - Tax Exemption" and
"Section Two: The Series 1992 Bonds - Litigation" as to which
no representations or warranties are made), as of the date
hereof does not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to
make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
Furthermore, we wish to advise you that nothing has come to
our attention that would lead us to believe that the
statements contained under the caption "Section Two: The
Series 1992 Bonds - Litigation" contain any untrue statement
of a material fact or omit to state any material fact
necessary to make such statements in light of the
circumstances under which they were ma@e, not misleading.
IN WITNESS WHEREOF, we have set our hands this 27th day of
February, 1992.
CITY OF VIRGINIA BEACH, VIRGIMIA
B-
James K. Spore
City Manager
By
Robert M. Hayes
Comptroller and Interim Director
of Finance
Exhibi-t F
CERTIFICATE OF THE DEPARTMENT OF PUBLIC UTILITIES
OF THE CITY OF VIRGINIA BEACH, VIRGINIA
The city of virginia Beach, Virginia (the "City") proposes to
issue its Water and Sewer System Revenue Bonds, Series of 1992 (the
"Bonds") , to certain underwriters (the "Underwriters") , who have
offered to purchase the Bonds subject to receipt of the following
certificate.
I, Clarence 0. Warnstaff, Director of Public Utilities of the
City, HEREBY CERTIFY to the city and the Underwriters:
1. Responsible and knowledgeable individuals in the
Department of Public Utilities under my supervision have
reviewed the statements and information in the city's official
Statement dated February 11, 1992 (the "Official Statement")
appearing under the captions "Section One: Introduction - The
System," "Section Four: The Water and Sewer System," "Section
Five: Water and Sewer System Indebtedness and Capital
Improvement Plan - Water and Sewer Capital Improvement Plan,"
11- The Lake Gaston Project" and 11- Commitments and
Contingencies," and "Section Six: Financial Information -
Water and Sewer Fund" (other than the captions "-Budgetary
Process" and 11- Approval of Official Statement" thereunder as
to which no view is expressed).
2. The statements and information identified in item I
above do not contain an untrue statement of a material fact or
omit to state a material fact necessary to make such
statements, in the light of the circumstances under which they
were made, not misleading.
IN WITNESS WHEREOF, I have set my hand this 27th day of
February, 1992.
B
Clarence 0. Warnstaff
Director of Public Utilities
City of Virginia Beach, Virginia
Exh ib Lt-G
CERTIFICATE OF ALVORD, BURDICX a HOWSON
Alvord, Burdick & Howson, Engineers, of Chicago, Illinois (the
I'Firm") hereby certifies that:
1. This Certificate is furnished pursuant to the Bond Purchase
Agreement dated February 11, 1992 between the city of Virginia
Beach, Virginia (the "City") and the Underwriters named
therein, relating to the sale by the city of the securities
more fully described in the official Statement of the City
dated February 11, 1992 (the "Official Statement"), and
prepared in connection with the sale of said securities (the
"Bonds").
2. It has been retained by the City to provide consulting
engineering services related to the preparation of a Financial
Feasibility Study (the "Study") to analyze the financial
feasibility of the Water and Sewer Enterprise Fund's
generating sufficient revenues to cover debt service on the
Bonds.
3. It consents to the inclusion of the Study as Appendix D to the
official Statement and to the use of the Firm's name in the
official Statement.
4. The study was prepared by the Firm in accordance with
generally accepted engineering practices.
5. For purposes of this certificate, the Firm has, at the request
of the Underwriters, carried out certain liinited procedures
for the period commencing January 31, 1992 and ending on the
date hereof, consisting solely of the making of inquiries of
the City, the City Manager, the City Attorney, the Department
of Public Utilities, and the Department of Finance, as to
whether there has been any material change in the information
provided by them, and upon which the Firm relied, for purposes
of the Study. These procedures would not be sufficient under
generally accepted engineering practices to enable the Firm to
express an opinion as to the matters covered by the Study and
would not necessarily reveal matters of significance with
respect to the statement in the last sentence of this
paragraph. The Firm, therefore, expresses no opinion as to
the matters covered by the Study as of any date subsequent to
the date of the Study and makes no representation as to the
sufficiency of the foregoing procedures for the Underwriters'
purposes. Nothing has come to the attention of the Firm as a
result of the foregoing procedures, however, that caused it to
believe that, as of the date hereof, the opinions of the Firm
set forth in the study were not correct.
6. It has no reason to believe that the information in the
official statement with respect to the System and the Capital
Improvement Program was inaccurate as of the date of the
official Statement or is inaccurate as of the date hereof.
7. This Certificate is solely for the information of, and
assistance to, the Underwriters in conducting and documenting
their investigation of the matters covered by the Study in
connection with the offering pursuant to the official
Statement of the above-mentioned securities, and is not to be
used, circulated, quoted or otherwise referred to for any
other purposes, including but not limited to the purchase or
sale of securities, nor is it to be referred to in whole or in
part in the official Statement or any other document, except
that reference may be made to it in the above-mentioned Bond
Purchase Agreement or in any list of closing documents
pertaining to such offering.
Dated: February 27, 1992
ALVORD, BURDICK & HOWSON
Bv
- 10 -
Item I-H.3 a.
RESOLUTIONS/ORDINANCES ITEM # 35335
The following registered to speak relative the Ordinance:
Elaine Phelps, 1409 Fairbank Court, Phone: 495-7144, resident of Lake
Christopher
Sheldon Corner, 325 Susan Constant Drive, Phone: 428-1731, President of North
Virginia Beach Civic League
Attorney Les Watson, 1116 Gumston Road, Phone: 428-2233, represented Rowe and
Company, developers of Atlantic Shores.
Don Trueblood, Vice President and Member of the Board of Directors - Horizons
Retirement Community, Inc. owners of the property being developed by Rowe and
Company and sponsors of the project was in attendance, but did not speak.
Eric C. Anderson, 5299 Greenwich Road, Phone: 499-5961, President of Lakeside
Construction, currently developing Redmill Farm Subdivision off General Booth
Boulevard.
Glenn Russell, Chairman, Virginia Beach Governmental Affairs Committee -
Tidewater Association of Realtors, Phone: 340-9700, presented TBA's statement
which is hereby made a part of the record.
C. Grigsby Scifres, Member of the Board of Directors and Chairman of the
Legislative Committee of the Hampton Roads Chamber of Commerce, Suite 9000,
Columbus Center. Statement of Mr. Scifres is hereby made a part of the record.
Lou Pace, 1098 Hunts Neck Court, Phone: 468-0925
Rae LeSesne, 5325 Thornburg Lane, Phone: 497-8008, President of the Citizens
Action Coalition
Tony Sancilio, President of Larasan Realty Corporation, represented Courthouse
Estates
Bill Cashman, represented Langley and McDonald
Attorney Harry Purkey, 303 34th Street, Suite 5, Phone: 428-0443
Upon motion by Councilman Jones, seconded by Councilman Heischober, City
Council ADOPTED, AS REVISED*:
Ordinance establishing an interim program for the
conservation of the public water supply re Lake
Gaston Pipeline Project.
*This Revision would include the change relating to schools under Exemptions
Section (d) and the transition provisions (Section 9). The turn around time on
the appeals process shall be a maximum of two weeks.
Voting: 10-0
Council Members Voting Aye:
John A. Baum, James W. Brazier, Jr., Robert W.
Clyburn, Vice Mayor Robert E. Fentress, Harold
Heischober, Louis R. Jones, Paul J. Lanteigne, Reba S.
McClanan, Mayor Meyera E. Oberndorf and Nancy K.
Parker
Council Members Voting Nay:
None
Council Members Absent:
William D. Sessoms, Jr.
Councilman Sessoms had to leave at 5:09 P.M. as he was Chairing a Meeting for
the March of Dimes. Councilman Sessoms advised he supported the recommendation
of the City Staff.
1 AN ORDINANCE DECLARING A WATER
2 SUPPLY EMERGENCY AND ESTABLISHING AN
3 INTERIM PROGRAM FOR THE CONSERVATION
4 OF THE PUBLIC WATER SUPPLY PENDING
5 COMPLETION OF THE LAKE GASTON
6 PIPELINE PROJECT
7 WHEREAS, the City of Virginia Beach has no permanent
8 water supply of its own, and is totally reliant upon the purchase
9 of surplus water f rom the City of Norf olk in order to meet the
10 water demands of its citizens and businesses and to provide
11 essential services; and
12 WHEREAS, the current average yearly demand upon the
13 Norfolk water system exceeds the available supply of such system,
14 and in drought-related conditions such deficit in the water supply
15 would be exacerbated;
16 WHEREAS, the City of Norfolk has indicated that the City
17 of Virginia Beach must take appropriate steps to restrict the use
18 of Norfolk water to an annual average of thirty million gallons per
19 day, and substantially less than that amount during drought-related
20 conditions; and
21 WHEREAS, the average annual demand of consumers of water
22 from the City's supply is already substantially in excess of thirty
23 million gallons per day, and will grow as new connections to the
24 system are made; and
25 WHEREAS, by reason of delays in the anticipated
26 completion of the Lake Gaston Pipeline Project caused by litigation
27 and the unavailability of sufficient emergency supplies of water
28 for use on a short-term basis, and the unavailability of other
29 sources of a permanent water supply, it is necessary to protect and
30 preserve the public health, safety and welfare through the
31 conservation of the public water supply;
32 NOW, THEREFORE, BE IT ORDAINED BY THE COUMCIL OF THE CITY
33 OF VIRGINIA BEACH, VIRGINIA:
34 Section 1. Declaration of emergency.
35 There is hereby declared to exist within the City of Virginia
36 Beach an emergency arising out of a shortage of public water
37 supplies.
38 SOCtiOU 2. Prohibition of new connections to the public
39 water SUpply system.
40 Except as provided is Section 3 of this ordinance, there shall
41 be no new connections to the City water system until such time as
42 the Lake Gaston Pipeline Project, including its intake and
43 conveyancing facilities and their appurtenances, is substantially
44 complete.
45 Section 3. Exemptions.
46 Notwithstanding the provisions of section 2 of this ordinance,
47 connections to the City water system shall be allowed, but not
48 required, in the following cases if all other requirements of law
49 pertaining to such connections have been met:
50 (a) Existing lots, lawfully created prior to the date of
51 adoption of this ordinance, abutting a City water main, where the
52 owner or his predecessor in title has directly participated in
53 paying the cost of constructing the main;
54 (b) Lots upon which a proposed development is the subject of
55 an approved site development plan or an approved preliminary
56 subdivision plat as of the date of adoption of this ordinance,
57 where construction of the water distribution system serving such
58 development has commenced, or is bonded, in accordance with an
59 approved plan for such construction. Where construction or bonding
60 of a water distribution system serving only a portion of a
61 subdivision has commenced or occurred, this exemption shall apply
62 only to that portion.
2
63 (C) PUblicly-funded residential neighborhood water projects,
64 or combined water and sewer projects, where construction of water
65 distribution systems is complete or has commenced;
66 (d) Public and other schools satisfying the compulsory
67 education requirements of Section 22.1-254 of the Code of Virginia,
68 Public facilities for police, fire protection and emergency medical
69 services, and facilities of public service companies regulated as
70 public utilities under Title 56 of the Code of Virginia, where no
71 alternative supply of water is available;
72 (e) Residential neighborhoods served by privately-owned water
73 systems, where the City Council has determined, by resolution, to
74 acquire such systems; or
75 (f) Undeveloped lots, lawfully created prior to the date of
76 adoption of this ordinance, upon which construction has been
77 authorized pursuant to a valid building permit issued prior to the
78 date of adoption of this ordinance; provided, that this exemption
79 shall apply for only so long as such building permit remains in
80 effect.
81 Section 4. Construction of water distribution systems.
82 Where public water distribution systems or fire hydrants, or
83 both, would be required pursuant to Section 5.8 of the Subdivision
84 ordinance or Section 5 of the Site Plan Ordinance, or any similar
85 successor ordinance or requirement, but for the provisions of this
86 ordinance, such water distribution systems and fire hydrants shall
87 be designed and bonded but not constructed during the period this
88 ordinance remains in effect.
89 Section S. Deferral of neighborhood water projects.
90 (a) Neighborhood water projects funded in the Capital
91 Improvements Program, and any sewer projects scheduled for
92 contemporaneous construction, shall not be constructed during the
93 period in which this ordinance remains in effect; provided,
94 however, that the City Council may authorize the construction of
95 sanitary sewer systems in any neighborhood where a majority of the
3
96 property owners in such neighborhood request, in writing, that such
97 sanitary sewer systems be constructed. The Director of Public
98 Utilities shall solicit comments from such property owners at the
99 earliest practicable time after the adoption of this ordinance.
100 section 6. Prohibition of certain uses of the public
101 water supply
102 In accordance with Section 37-21 of the City Code, the City
103 Manager is hereby authorized and directed to order the prohibition
104 of the following uses of the public water supply:
105 (a) Watering of shrubbery, trees, lawns, grass, plants or
106 other vegetation, except from a watering can or other
107 container not exceeding three (3) gallons in capacity;
108 (b) Washing of automobiles, trucks, trailers or any other
109 type of mobile equipment, except in facilities operating
110 with a water recycling system approved by the City, or
ill except from a bucket or other container not exceeding
112 three (3) gallons in capacity; provided, that any
113 facility operating with an approved water recycling
114 system must prominently display, in public view, a sign
115 stating that such a recycling system is in operation;
116 (c) Washing of sidewalks, streets, driveways, parking areas,
117 service station aprons, exteriors of homes, apartments,
118 commercial or industrial buildings or any other outdoor
119 surface, except from a bucket or other container not
120 exceeding three (3) gallons in capacity;
121 (d) The operation of any ornamental fountain or other
122 structure making a similar use of water;
123 (e) The filling of swimming or wading pools or the refilling
124 of swimming or wading pools which are drained after the
25 effective date of the order;
26 (f) The use of water from fire hydrants for any purpose other
27 than necessary governmental operations; and
28 (g) The serving of drinking water in restaurants, cafeterias
29 or any other establishment, unless requested by the
30 individual being served.
4
131 Section 7. Conflictingo etc. ordinances.
132 (a) The provisions of section 37-5(a) and (b) of the City
133 Code, pertaining to mandatory connections to the public water
134 supply system, are hereby suspended during the period this
135 ordinance remains in effect.
136 (b) In the event any other ordinance, resolution, regulation,
137 policy or standard of the City shall conflict, or be inconsistent,
138 with the provisions of this ordinance, the provisions of this
139 ordinance shall control.
140 SOCtiOn 8. Severability.
141 The provisions of this ordinance shall be deemed to be
142 severable, and in the event one or more such provisions shall be
143 adjudged or declared to be invalid or unenforceable by a court of
144 competent jurisdiction, the remaining provisions shall be
145 unaffected thereby and shall remain in full force and effect.
146 Section 9. Transition provisions.
147 Notwithstanding the provisions of Section 3 (b) , connections to
148 the public water supply system shall be allowed where construction
149 plans f or a water distribution system serving a development have
150 been approved on or before April 30, 1992, and one of the following
151 applies:
152 (a) Such plans are submitted on or before February 28, 1992
153 and pertain to portions of a development which is the subject of an
154 active, approved preliminary subdivision plat and construction of
155 the water distribution system serving such development commences or
156 is bonded by April 30, 1992;
157 (b) Such plans have expired and re-approval has been
158 requested, in writing, on or before February 28, 1992, and
59 construction of the water distribution system serving such
60 development commences or is bonded by April 30, 1992; or
61 (c) Such plans pertain to a development which is the subject
62 of a site plan which has been submitted as of the date of adoption
5
163 of this ordinance, where construction of such system commences or
164 is bonded by April 30, 1992.
165 Adopted by the City Council of the City of Virginia Beach on
166 the 11 day of February 1 1992.
167 CA-4431
168 \ordin\noncode\waterpro.orn
169 R-5
6
INTER-OFFICE CORRESPOOVDENCE
D
TO. James K. Spore
Executive
FROM.- Clarence Warnstaff
Public Utilities
DATE. January 29, 1992
SUBJECT., Water Supply System
On October 22, 1991, a Water Supply System Status Report was provided to the
City Council.
The Report's findings on water supply and demand are summarized below:
1. During a critical drought, the N rfolk water em can provide
approximately 70 million gallons per day (mgd).
2. The five Virginia Beach emergency wells provide approximately 1 1
mgd yield; the emergency wells are a orar -t rm supply
that can only be used in emergency conditions.
3. Virginia Beach has limited and temporary contract rights to the
emergency wells; the wells are owned by the host jurisdictions, and
renewal of contract rights is not automatic or guaranteed.
4. The water demand on the Norfolk system In calendar year 1990 was
86 mgd.
5. Existing water demand exceeds the prudent available supply (during
drought conditions) by 5 mgd.
James K. Spore -2-
January 29, 1992
6. Increases in water demand must be limited until more reliable
additional water supplies are in place.
Additionally, the City of Norfolk has advised Virginia Beach that Virginia Beach
should restrict its use of the Norfolk supply to an annual average of 30 mgd. The
Virginia Beach annual average water demand for fiscal year 91 was 31.8 mgd or
approximately 32 mgd. This is exclusive of any drought-related reductions.
The Report identified three options available to the City regarding water demand
and water supply. The three options were:
1. Implement a moratorium an new connections to the existing water
system, i.e., No New onnections, or
2. Continue to allow connections to the system as the market dictates.
This will require the construction of seawater desalting facilities which
will result in significant water rate increases, or
3. Implement an interim program to:
a. Continue to expedite the Lake Gaston Project.
b. Limit new connections to the water system.
C. Implement a mandatory water use restriction program.
d. Investigate the availability of limited brackish groundwater
desalting as an interim-temporary water supply.
The following recommendations are submitted for your consideration.
RECOMMENDATIONS
1. Implement a program to limit new connections to the water system.
Connections would be allowed only in accordance with the program
outlined on page 3.
2. Suspend enforcement of City Code Section 37-5 Water Mandatory
Connections.
3. Implement City Code Chapter 37-21 (a) Conservation of Water During
Emergencies - mandatory water conservation.
4. Pursue legislation in the General Assembly to allow the City to
implement plumbing code ordinances which are more restrictive than
those contained in the Statewide Uniform Building Code. (This is part
of the City's 1992 legislative package).
James K. Spore -3- January 29, 1992
5. All water CIP projects not already under construction
should be deferred.
6. Do not pursue brackish groundwater desaiting.
7. Since the above recommendations will stimulate groundwater use,
possibly to the detriment of shallow groundwater supplies, pursue
legislation in the General Assembly to allow the City to apply
conservation provisions to groundwater uses. (This is part of the
City's 1992 legislative package.)
8. The City currently has an aggressive program to promote the wise and
prudent use of the public water system; however, it is recommended
that $100,000 be authorized for increased advertising for water
conservation (both mandatory and voluntary conservation).
ISCUSSION
Limitations on Connect ons
Growth in water demand must be limited; therefore, it is recommanded that the
public water system not be extended to serve new properties and restrictions be
implemented to limit connections to the public water system. Connections to the
public water system would only be allowed where sufficient water main capacity
exists and where one of the following criteria are met:
1. Properties abutting water mains that are existing or under
construction or bonded as of the effective date of ordinance adoption
where the owner (or predecessor in title) has participated in the cost
of the construction of the water main, or
2. Existing lots in neighborhoods (51 % neighborhood water projects)
where the City has extended the water main Or where construction of
the water main is in progress.
3. Properties for which a buildin.g permit has already been issued.
The only exception to these restrictions is facilities needed to provide essential
public services related to public health and safety and where no other water supply
alternative is available (see Attachment 1).
New subdivisions would be allowed if approvals for private wells can be obtained
from the State Health Department; additionally new subdivisions would be required
to desicin and bond the extension of the public water system; the construction of
the water mains within these subdivisions would be incumbent upon the developer
after the limitation program is lifted.
I
.1
I I I
I
James K. Spore -4- January 29, 1992
Additionally, we will assist the Planning Department in identifying the relationship
between the City's water supply and each zoiiing decision placed before the
Planning Commission.
Ca[)ital lmr)rove ro ram
It will be necessary to make adjustments to the Water and Sanitary Sewer Capital
Improvement Program; recommended action is delineated below:
1 . All water projects that are being coordinated with the City's highway
program should proceed; this principally involves large diameter
transmission mains that are being constructed along with major
highway projects6
2. All major water system improvements currently included in the CIP,
such as elevated tanks, pumping stations, and major treated water
transmission mains should proceed.
3. Rehabilitation of existing facilities should proceed.
4. All hborhood water projects should be deferred; a listing of
neighborhood projects is shown on Attachment 11.
5. For combined water and sanitary sewer projects, it is the City's
preference to also defer the sanitary sewer portion of the project, but
prior to deferring the sanitary sewer portion, comments from the
neighborhood will be solicited. If the majority of the citizens in a
neighborhood request sanitary sewer only, realizing that additional
disruption would occur later when water becomes available, sanitary
sewer only would be recommended to City Council.
6. Sanitary sewer neighborhood projects where public water service
already exists should proceed in accordance with the CIP schedule.
Brackish Groundwater Desalting
It is recommended that the City not pursue brackish groundwater desaiting.
The Virginia Water Control Board (VWCB) continues to build a strong technical
case against the use of groundwater from the regional aquifer for large scale water
supply purposes. At a January 7, 1992 meeting of the State Water Commission,
the VWCB released the results of its latest computer modeling which indicated that
the existing permitted capacity in the regional aquifer was sufficient to cause wide-
spread damaging drawdowns in all four of the aquifers which Virginia Beach would
need to use for a brackish groundwater supply. Regionally, serious impacts were
predicted in Southampton, Isle of Wight, Suffolk and in northside Hampton Roads.
James K. Spore -5- January 29, 1992
Impacts were also predicted in jurisdictions outside of the Hampton Roads Planning
District. At the same meeting, the Water Commission finalized draft groundwater
legislation aimed at terminating some existing withdrawal rights so that the total
permitted withdrawal capacity of the aquifer could be reduced. By a unanimous
vote, the Commission forwarded the legislation to the General Assembly with a
recommendation that it be adopted.
Although Virginia Beach received a permit to conduct an aquifer test from the
VWCB, serious concern was registered by Portsmouth, Suffolk, Chesapeake, and a
private industrial groundwater user. They were not as much concerned about the
90 day, 1.5 mgd withdrawal for the aquifer test as they were for the impact which
would occur from a year-round withdrawal of 7.5 mgd to produce 5 mgd of water
supply. Their primary concern was the potential impact on existing municipal
supply wells, Chesapeake's ASR proposal, saltwater intrusion, individual private
wells, and industrial wells. Opposition to any full scale production will be
significant, and will probably involve legal challenges to any decision to issue a
permit.
The development of 1 to 5 mgd of water supply from a brackish groundwater
desalting system will be costly. The best estimate at this time is that the program
would cost three to four million dollars per mgd of capacity (i.e., 5 mgd would cost
fifteen to twenty million dollars). The aquifer testing program, by itself, is
estimated to cost $1.5 million. Water would not be available for at least two years
and the legislation pending in the General Assembly could impact the City's ability
to use the system once constructed. If, as we have been lead to believe, the wells
would be permitted as emergency wells, the system could only be operated during
bona-fide drought conditions while water use restrictions (with penalties) were in
place.
Given the high cost of the aquifer testing program, the likelihood of protracted
litigation over the permits, and the fact that the pending legislation might
significantly alter the City's ability to use any groundwater, except under very
limited circumstances, the City should not pursue brackish groundwater desaiting.
In summary, the City should not pursue brackish groundwater desaiting because of
the following:
1 . Strong technical evidence of impacts resulting from the use of water
from regional groundwater supplie;
2. Proposed new state legislation that would further restrict access to
groundwater;
3. Opposition from adjoining communities and probable litigation over the
validity of the permits;
James K. Spore -6- January 29, 1992
4. Extremely high cost for a patchwork short-term solution estimated at
$20 million;
5. A positive decision from the Federal Court of Appeals to allow the
City to initiate limited construction on the Lake Gaston Water Supply
Project;
6. The time for development--if permitted--would take up to two years
for production facilities to be operational, thereby greatly limiting the
use of the short-term emergency supply.
anda or Water Conservation
It is recommended that City Council adopt an ordinance authorizing the City
Manager to implement City Code Section 37-21 -Conservation of Water During
Emergencies." Section 37-21 provides for seven categories of mandatory water
conservation measures. These seven categories are noted in Attachment Ill.
Water Allocatio A eals Board
As stated in Section 37-21 of the City Code, an allocation appeals board consisting
of three representatives (one from the City Manager's Office, one from the Health
Department and one from the Finance Department) may be established by the City
Manager. The appeals board will be empowered to review customer allocations
and exemptions on a case-by-case basis and, if warranted, to make equitable
adjustments to such allocations.
It is recommended that such an appeals board be established at this time with a
representative from each of the departments. We will provide specific
recommendations to you regarding the membership on this committee.
Identified below is the type of information that will be needed when considering
exemptions to the water restrictions.
Criteria for Exemi)tion to Mandatory Water Restrictions
1. Name and nature of business;
2. Purpose for which water is used;
3. Amount of water generally used;
4. What alternative water sources have been sought and are available;
and
5. What health, safety, welfare, and economic impacts will occur if
exemption is not granted.
James K. Spore -7- January 29, 1992
Ground Controls
With the program outlined in this memorandum to limit the use of the public water
system, we anticipate this action will stimulate groundwater development in the
shallow and environmentally fragile Yorktown supply. This supply is the sole
source of drinking water for several thousand residents of Virginia Beach in the
southern part of the City and in certain neighborhoods in the northern part. The
City has documented evidence that the groundwater supply is currently stressed
through overuse and overdevelopment. Currently, neither the City nor the State
Water Control Board has authority to regulate small private wells. The City needs
the ability to restrict unnecessary uses of groundwater from private, domestic
wells the same way it restricts the use of City water during water shortages in
order that it may take steps, when necessary, to preserve dwindling groundwater
supplies to those residents whose only source of water is;private wells.
The City's 1992 legislative proposals include a proposal to request the general
assembly to allow the City to restrict the use of groundwater during water
shortages. This would be legislation that would allow the City, during a declared
water shortage or water emergency, to restrict the use of groundwater in certain
areas of the City for non-mandatory uses.
SUMMARY
The recommendations contained in this memorandum are based on the following
assumptions:
1. A reduction in Virginia Beach's annual average water demand by
approximately 10 percent can be achieved.
2. The number of new connections eligible to connect to the public
water supply system will be approximately 5,000.
3. The Lake Gaston Project will be operational in four years.
4. Norfolk does not lower the 30 mgd (exclusive of drought reductions)
limitation.
A "review and evaluation" process wili be implemented to closely monitor the
success of this recommended program. Quarterly reports will be prepared.
If the assumptions are not fully realized, then the City must consider a more
stringent program to limit connections to the public water system and possibly
initiate a program to ration and allocate the public water system.
James K. Spore -8- January 29, 1992
It must be noted that in drought conditions, the, City of Norfolk cannot supply 30
mgd, and during drought conditions, the use of the public water system will have
to be rationed and allocated resulting in more severe hardship on the residents of
Virginia Beach.
cp
Attachment
PC: Gary L. Jones, P.E., Public Utilities Assistant Director
Thomas M. Leahy ill, P.E., Public Utilities Water Resources Engineer
William M. Macali, City Attorney
C. Oral Lambert Jr., Chief of Staff
Attachment I
Essential Service Facilities
ESSENTIAL SERVICE FACILITIES
RELATED TO PUBLIC HEALTH AND SAFETY
Police
Fire
Emergency Medical Service
Utility Service Facilities required to deliver service to the public
(i.e., electric service, gas, telephone, sanitary sewer, water)
Schools
Notes: Schools are not needed for public health and safety, but the City is
required by law to provide educational instruction to school age children. The city
must also meet other state mandates relating to classroom size and crowding.
Attachment 11
Neighborhood Water Projects
NEIGBEORHOOD WATER PROJECTS DEFERRED
To The "2nd" 5 Years of tlie 10-year CIP
Alfriends Trail* Lynndale Estates*
Avalon Terrace Old Princess Anne Road
Burton Station* Potters Road
Busky Lane/Poyner Lane* Reon Drive*
Calverton Lane Robbins Corner*
Colony Drive* Rickard Road
Eagle Nest Point Salem Road A
Garnet Point Road Sherry Park
Greenhill Farms* South Kentucky Avenue*
Gunn Hall Drive Stumpy Lake'
Holland Road/Courthouse Forest Stumpy Lake Lane
Lago Mar Thoroughgood
Lake Shores Witchduck Point*
Little Haven Witchduck Road*
Little Neck Woodland*
NOTES:
These neighborhood water projects have companion sanitary sewer
neighborhood projects which may also be deferred.
Attachment Ill
Mandatory Conservation Measures
Virginia Beach
city code
Section 37-21
Conservation of water during emergencies.
(a) Should the city council, at any time, declare there to
be an emergency existing in the city arising, either wholly or
substantially, out of a shortage of water supply, the city
manager or the director of public utilities is hereby authorized
to order the restriction or prohibition of any or all of the
following uses of the water supply:
(1) Watering of shrubbery, trees, lawns, grass, plants
or other vegetation, except from a watering can or
other container not exceeding three (3) gallons in
capacity.
(2) Washing of automobiles, trucks, tra'llers or any
other type of mobile equipment, except in
facilities operating with a water recycling system
approved by the city, or except from a bucket or
other container not exceeding three (3) gallons in
capacity; provided, further that any facility
operating with an approved water recycling system
must prominently display, in public view, a sign
stating that such a recycling system is in
operation.
(3) Washing of sidewalks, streets, driveways, parking
areas, service station aprons, exteriors of homes,
apartments, commercial or industrial buildings or
any other outdoor surface, except from a bucket or
other container not exceeding three (3) gallons in
capacity.
(4) The operation of any ornamental fountain or other
structure making a similar use of water.
(5) The filling of swimming or wading pools or the
refilling of swimming or wading pools which were
drained after the effective date of the order.
(6) The use of water from iire hydrants for any
purpose other than necessary governmental
operations.
(7) The serving of drinking water in restaurants,
cafeterias or any other establishment, unless
requested to do so by the individual being served.
The above restrictions, or any of them, shall become effective
upon their being printed in any newspaper of general circulation
in the city, or broadcast upon any radio or television station
serving the city.
Item I-H.3 b.
RESOLUTIONS/ORDINANCES ITEM # 35336
A motion was made by Councilman Jones, seconded by Vice Mayor Fentress, to
ADOPT an Ordinance to TRANSFER $100,000 from the Water and Sewer Reserve to
Public Utilities Operating Budget re water conservation.
Councilman Jones accepted a friendly AMENDMENT to his motion to DEFER until
February 25, 1992, an Ordinance to TRANSFER $100,000 from the Water and Sewer
Reserve to Public Utilities Operating Budget re water conservation. This
DEFERRAL would enable the documentation relative the expenditures of the Water
Conservation Educational Campaign to be provided to City Council.
Councilman Jones WITHDREW this MOTION Amendment.
Upon motion by Councilman Jones, seconded by Vice Mayor Fentress, City Council
ADOPTED:
Ordinance to TRANSFER $100,000 from the Water and
Sewer Reserve to Public Utilities Operating Budget
re water conservation.
The City Manager advised a Briefing relative the proposed Budget and the
details of the Water Conservation Educational Campaign will be SCHEDULED for
the next City Council Session.
Voting: 7-3
Council Members Voting Aye:
John A. Baum, Robert W. Clyburn, Vice Mayor Robert E.
Fentress, Harold Heischober, Louis R. Jones, Mayor
Meyera E. Oberndorf and Nancy K. Parker
Council Members Voting Nay:
James W. Brazier, Jr., Paul J. Lanteigne and Reba S.
McClanan
Council Members Absent:
William D. Sessoms, Jr.
1 AN ORDINANCE TO TRANSFER $100,000 FROM THE
2 WATER AND SEWER FUND RESERVE FOR CONTIRGENCIES TO
3 THE PUBLIC UTILITIES OPERATING BUDGET TO FUND A
4 WATER CONSERVATION EDUCATIONAL CAMPAIGN
5 WHEREAS, the City of Norfolk has requested that daily water consumption
6 in Virginia Beach be restricted to an annual average of 30 million gallons per
7 day;
8 WHEREAS, Virginia Beach's annual average water demand for FY1990-91 was
9 approximately 32 million gallons per day;
10 WHEREAS, in order not to exceed the annual average demand of 30 million
11 gallons per day, it is necessary to promote the wise and prudent use of the
12 public water system by informing the citizens through a water conservation
13 educational campaign;
14 WHEREAS, the cost of this campaign is estimated to be approximately
15 $100,000;
16 WHEREAS, there are sufficient funds available within the Water and Sewer
17 Fund Reserve for Contingencies to address this funding need.
18 NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF VIRGINIA
19 BEACH, VIRGINIA, that funds in the amount of $100,000 be transferred to the
20 FY1991-92 Operating Budget of the Department of Public Utilities for the purpose
21 of funding a water conser-vation educational campaign.
11 February
22 Adopted the _ day of 1992, by the Council of the
23 City of Virginia Beach, Virginia.
24 This ordinance shall be in effect from the date of its adoption.
APPROVED AS TO CONTENT
Walter C. Kraemer, Jr.
Office of Budget and Evaluation
CONSERVE.ORD
- 12 -
Item 1-1.1/2.
PUBLIC HEARING ITEM # 35337
PLANNING
Mayor Meyera E. Oberndorf DECLARED a PUBLIC HEARING on:
PLANNING BY CONSENT
(a) NEW HOPE CHURCH CONDITIONAL USE PERMIT CLOSURE
(b) BETTY D. LONG VARIANCE
(c) PROVIDENCE DEVELOPMENT CORPORATION VARIANCE
PLANNING
(a) SOL W. COHEN STREET CLOSURE
(b) INDIAN RIVER GOLFORMA, INC. CONDITIONAL USE PERMIT
(c) JUDEO-CHRISTIAN OUTREACH SHELTER,INC. CONDITIONAL USE PERMIT
- 13 -
Item 1-1.
PUBLIC HEARING ITEM # 35338
PLANNING BY CONSENT
Upon motion by Vice Mayor Fentress, seconded by Councilman Clyburn, City
Council APPROVED in ONE MOTION Items 1 b and c and ALLOWED WITHDRAWAL of Item
la of the PLANNING BY CONSENT AGENDA.
Voting: 10-0
Council Members Voting Aye:
John A. Baum, James W. Brazier, Jr., Robert W.
Clyburn, Harold Heischober, Vice Mayor Robert E.
Fentress, Louis R. Jones ' Paul J. Lanteigne, Reba S.
McCianan, Mayor Meyera E. Oberndorf and Nancy K.
Parker
Council Members Voting Nay:
None
Council Members Absent:
William D. Sessoms, Jr.
- 14 -
Item I-l.a.
PUBLIC HEARING ITEM # 35339
PLANNING BY CONSENT
Upon motion by Vice Mayor Fentress, seconded by Councilman Clyburn, City
Council ALLOWED WITHDRAWAL of an Ordinance upon application of NEW HOPE CHURCH
for a Conditional Use Permit:
ORDINANCE UPON APPLICATION OF NEW HOPE CHURCH FOR A
CONDITIONAL USE PERMIT FOR A CHURCH
Ordinance upon application of New Hope Church for a
Conditional Use Permit for a church on the south
side of Moores Pond Road, 650 feet east of Baker
Road. Said parcel is located at 4641 Moores Pond
road and contains 3.314 acres. SAYSIDE BOROUGH.
Voting: 10-0
Council Members Voting Aye:
John A. Baum, James W. Brazier, Jr., Robert W.
Clyburn, Vice Mayor Robert E. Fentress, Harold
Heischober, Louis R. Jones, Paul J. Lanteigne, Reba S.
McClanan, Mayor Meyera E. Oberndorf and Nancy K.
Parker
Council Members Voting Nay:
None
Council Members Absent:
William D. Sessoms, Jr.
- 15 -
Item I-I.I.b.
PUBLIC HEARING ITEM # 35340
PLANNING BY CONSENT
Upon motion by Vice Mayor Fentress, seconded by Counci Iman Clyburn, City
Counci I APPROVED a Variance to Section 4.4(b) of the Subdivision Ordinance
wh i ch requ 1 res a I 1lots created by subdivision meet al I requirements of the
City Zoning Ordinance
Application of Betty D. Long for a Variance to
Section 4.4(b) of the Subdivision Ordinance. The
property is located at 1476 Shoveller Lane.
LYNNHAVEN BOROUGH.
Votlng: 10-0
Council Members Voting Aye:
John A. Baum, James W. Brazier, Jr., Robert W.
Clyburn, Vice Mayor Robert E. Fentress, Harold
Heischober, Louis R. Jones, Paul J. Lanteigne, Reba S.
McCianan, Mayor Meyera E. Oberndort and Nancy K.
Parker
Council Members Voting Nay:
None
Council Members Absent:
William D. Sessoms, Jr.
- 16 -
Item I-I.l.c.
PUBLIC HEARING ITEM # 35341
PLANNING BY CONSENT
Upon motion by Vice Mayor Fentress, seconded by Councilman Clyburn, City
Council APPROVED the application of PROVIDENCE DEVELOPMENT CORPORATION for a
Variance to Section 4.4(d) of the Subdivision Ordinance which requires all lots
created by subdivision have direct access to a public street.
Application of Providence Development Corporation
for a Variance to Section 4.4(d) of the Subdivision
Ordinance. The parcel is located east of Newtown
Road and south of Baker Road. BAYSIDE BOROUGH.
The following condition shall be required:
1. Prior to final plat approval, the applicant must
establish permanent ingress/egress and any other
necessary easements to provide for the orderly
development of parcels G-l-B and G-1-C. The
required ingress/egress easements are to be platted
atop the existing road system serving proposed
parcel G-1-A.
The OWNER OR LEGAL REPRESENTATIVE of the Owner, has reviewed the condition for
APPROVAL and has signed a STATEMENT OF CONSENT. Said STATEMENT OF CONSENT is
hereby made a part of the proceedings.
Voting: 10-0
Council Members Voting Aye:
John A. Baum, James W. Brazier, Jr., Robert W.
Clyburn, Vice Mayor Robert E. Fentress, Harold
Heischober, Louis R. Jones, Paul J. Lanteigne, Reba S.
McClanan, Mayor Meyera E. Oberndorf and Nancy K.
Parker
Council Members Voting Nay:
None
Council Members Absent:
William D. Sessoms, Jr.
STATEMENT OF CONSENT
APPLICANT: PROVIDENCE DEVELOPMENT CORPORATION
APPLICATION: Variance -
Newtown Road/Baker Road
(Bayside Borough)
DESCRIPTION: Section 4.4(d)
CITY COUNCIL SESSION: February 11, 1992
THE UNDERSIGNED OWNER OR LEGAL REPRESENTATIVE FOR THE OWNER, (or Agent
for the Owner), HAS REVIEWED THE CONDITIONS FOR APPROVAL (REQUIREMENTS)
RECOMMENDED BY THE VIRGINIA BEACH PLANNING COMMISSION TO THE VIRGINIA BEACH
CITY COUNCIL FOR AFFIRMATIVE ACTION ON THIS DATE AS THEY APPLY TO THE
REFERENCED APPLICATION FOR AMENDMENT TO THE ZONING MAP OF THE CITY OF VIRGINIA
BEACH, VIRGINIA, AND HEREBY ACCEPTS AND AGREES TO:
1. Prior to final plat approval, applicant must establish
permanent ingress/egress and any other necessary easements to
provide for the orderly development of Parcels G-l-B and
G-1-C. The required ingress/egress easements are to be
platted atop the existing road system serving proposed Parcel
G-1-A.
Owner
By:
Date:
- 17 -
Item I-1.2.a.
PUBLIC HEARING ITEM # 35342
PLANNING
Attorney Charles Salle' , 192 Ballard Court, Phone: 490-3000, represented the
applicant. Mr. Salle' advised the access to the property will be from the east
side along Croatan Road.
Upon motion by Councilman Brazier, seconded by Councilman Lanteigne, City
Council APPROVED, subject to compliance of conditions by August 11, 1992, the
petition of SOL W. COHEN for the discontinuance, closure and abandonment of a
portion of Croatan Road.
Petition of Sol W. Cohen for the discontinuance,
closure and abandonment of a portion of Croatan
Road located at the northwest intersection of
Croatan Road and General Booth Boulevard. The
parcel contains 17,824 square feet. LYNNHAVEN
BOROUGH.
The following conditions shall be required:
1. The ultimate disposition of this right-of-way shall
be by direct conveyance. The street closure
resolves a boundary discrepancy between the
applicant and the City and the applicant will not
be required to purchase the right-of-way.
2. A survey must be conducted to determine the
location of the 10 inch waterline, the 16 inch
waterline and the 8 inch sanitary force main.
Responsibility of this survey lies with the
applicant and the survey must be acceptable to
Public Utilities. If the facilities are located
within the area proposed for closure, dedication of
a utility easement as determined by the Department
of Public Utilities is required over the
facilities.
3. A subdivision plat must be recorded creating
proposed Parcel A and ensuring that all lots have
access to a public street.
4. A 50-foot landscape buffer is required along
General Booth Boulevard and a 30-foot landscape
buffer is required along Croatan Road where it
adjoins Parcel A on the South. Existing trees
within the buffer shall be preserved to the
greatest extent feasible. No buildings or other
improvements shall be constructed in the buffer
area.
5. There shall be no ingress or egress to proposed
Parcel A on General Booth Boulevard.
6. There shall be no ingress or egress to proposed
Parcel A along Croatan Road where it abuts the
property to the south. Access shall be from the
frontage on Croatan Road where it adjoins Parcel A
on the east.
- 18 -
Item 1-1.2.a-
PUBLIC HEARING ITEM # 35342 (Continued)
PLANNING
7. The applicant shall record an instrument quit
claiming any interest in Lots 13 and 14 as shown on
the plat of Rudee Heights recorded in the Otfice of
the Clerk of the Circuit Court of the City of
Virginia Beach, Virginia, in Map Book 24 at Page
37.
8. The applicant shall deliver a quit claim deed to
the City conveying the applicant's interest in the
overlap area south of proposed Parcel A to the
City.
9. Cond i ti ons #4 , #5 and #6 sha I I be addressed 1 n a
recordable agreement and submitted to the City
Attorney's Office for review.
10. It a utility easement is required, the street
closure ordinance must be redrafted with a "save
and except" clause for the utility easement and
submitted to the City Attorney's Office.
11. Closure of the right-of-way shall be contingent
upon compliance with the above stated conditions by
August 11, 1992.
Voting: 10-0
Council Members Voting Aye:
John A. Baum, James W. Brazier, Jr., Robert W.
Clyburn, Vice Mayor Robert E. Fentress, Harold
Heischober, Louis R. Jones, Paul J. Lanteigne, Reba S.
McClanan, Mayor Meyera E. Oberndorf and Nancy K.
Parker
Council Members Voting Nay:
None
Council Members Absent:
William D. Sessoms, Jr.
ORDINANCE NO.:
IN THE MATTER OF CLOSING, VACATING, AND DISCONTINUING A
PORTION OF THAT CERTAIN STREET, KNOWN AS CROATAN ROAD
LOCATED IN THE LYNNHAVEN BOROUGH OF THE CITY OF VIRGINIA
BEACH, VIRGINIA, SHOWN AS THE HATCHED AREAS UPON THAT
CERTAIN PLAT ENTITLED, "PLAT SHOWING PORTION OF CROATAN
ROAD VACATED BY THE CITY OF VIRGINIA BEACH AND PORTION OF
PROPERTY OF SOL W. COHEN TO BE DEDICATED TO THE CITY OF
VIRGINIA BEACH".
WHEREAS, it appearing by affidavit that proper notice has been
given by SOL W. COHEN, a Virginia general partnership, that he
would make application to the Council of the City of Virginia
Beach, virginia, on September 21, 1987, to have the portion of the
hereinafter described street, discontinued, closed, and vacated;
and
WHEREAS, it is the judgment of the Council that the portion
of the said street be discontinued, closed, and vacated;
NOW, THEREFORE,
SECTION I
BE IT ORDAINED by the Council of the City of Virginia Beach,
Virginia, that the hereinafter described street be discontinued,
closed, and vacated:
ALL THAT portion of Croatan Road shown as the hatched
area on that certain plat entitled "PLAT SHOWING PORTION
OF CROATAN ROAD VACATED BY THE CITY OF VIRGINIA BEACH AND
PORTION OF PROPERTY OF SOL W. COHEN TO BE DEDICATED TO
THE CITY OF VIRGINIA BEACH." attached hereto and made a
part hereof.
SECTION II
A certified copy of this Ordinance shall be filed in the
Office of the Circuit Court of the City of Virginia Beach, indexed
in the name of the City of Virginia Beach, as grantor.
SECTION III
Adopted by the Council of the City of Virginia Beach, Virginia,
this day of 19-
APPROVED: February 11, 1992, subject to compliance of conditions.
- 19 -
Item 1-1.2.b.
PUBLIC HEARING ITEM # 35343
PLANNING
Attorney Howard Gordon, 1700 Dominion Tower, Phone: 622-3366, represented the
applicant
Upon motion by Councilman Clyburn, seconded by Councilman Jones, City Council
ADOPTED an Ordinance upon application ot INDIAN RIVER GOLFORAMA, INC. for a
Conditional Use Permit:
ORDINANCE UPON APPLICATION OF INDIAN RIVER
GOLFORAMA, INC, FOR A CONDITIONAL USE PERMIT FOR A
RECREATIONAL FACILITY OF AN OUTDOOR NATURE
R02921413
BE IT HEREBY ORDAINED BY THE COUNCIL OF THE CITY OF VIRGINIA BEACH, VIRGINIA
Ordinance upon application of Indian River
Golforama, Inc. for a Conditional Use Permit for a
recreational faci lity of an outdoor nature (golf
driving range) on certain property located on the
north side of Old Providence Road, 480 feet more or
less east of South Mi litary Highway. The parcel
contains 18.5 acres. KEMPSVILLE BOROUGH.
The following conditions shall be required:
1. No land disturbance within the Resource Protection
Area w i I I be a I I owed un I ess approva Iis received
from the Chesapeake Bay Preservation Area Board.
2. The applicant must obtain a variance from the Board
ot Zoning Appeals for the range barrier netting
which exceeds the maximum allowed fence height as
per Section 201(e)(1) ot the City Zoning Ordinance.
3. Existing vegetation along the perimeter of the pond
located in the western portion of the site shall be
retained to the maximum extent practical.
4. All barrier netting will be the invisible type.
This Ordinance shall be effective in accordance with Section 107 (f) of the
Zoning Ordinance.
Adopted by the Council of the City of Virginia Beach, Virginia, on the Eleventh
of February, Nineteen Hundred and Ninety-Two.
- 20 -
Item 1-1.2.b.
PUBLIC HEARING ITEM # 35343 (Continued)
PLANNING
Voting: 10-0
Council Members Voting Aye:
John A. Baum, James W. Brazier, Jr., Robert W.
Clyburn, Vice Mayor Robert E. Fentress, Harold
Heischober, Louis R. Jones, Paul J. Lanteigne, Reba S.
McCianan, Mayor Meyera E. Oberndorf and Nancy K.
Parker
Council Members Voting Nay:
None
Council Members Absent:
William D. Sessoms, Jr.
- 21 -
Item 1-1.2.c.
PUBLIC HEARING ITEM 35344
PLANNING
Richard H. Powell, Executive Director Judeo-Christian Outreach Shelter, Inc.,
1053 Virginia Beach Boulevard, Phone: 491-2846, represented the applicant
Upon motion by Counci lman Brazier, seconded by Vice Mayor Fentress, City
Counci I ADOPTED an Ordinance upon appl ication of JUDEO-CHRISTIAN OUTREACH
SHELTER, INC., for a Conditional Use Permit:
ORDINANCE UPON APPLICATION OF JUDEO-CHRISTIAN
OUTREACH SHELTER, INC., FOR A CONDITIONAL USE
PERMIT FOR A GROUP HOME R02921414
BE IT HEREBY ORDAINED BY THE COUNCIL OF THE CITY OF VIRGINIA BEACH, VIRGLNIA
Ordinance upon application of Judeo-Christian
Outreach Shelter, Inc., for a Conditional Use
Permit for a group home on the south side of
Virginia Beach Boulevard, east of Birdneck Road.
Said parcel is located at 1049 and 1053 Virginia
Beach Boulevard and contains 41,382 square feet.
LYNNHAVEN BOROUGH.
The following conditions shall be required:
1. landscape maintenance schedule must be developed
for the site. Removal of all unnecessary yard
debris is required.
2. Existing trees shall remain along the eastern,
western and southern property lines. Enhanced
landscaping of the site is encouraged.
3. The use permit for a group home shal I be granted
tor a period of three years.
4. The maximum number of persons residing on the
premises wi I I be determined by the Fire Marshal I
and the City Health Department, not to exceed a
total of 50.
This Ordinance shal I be effective in accordance with Section 107 (t) of the
Zoning Ordinance.
Adopted by the Council ot the City of Virginia Beach, Virginia, on the Eleventh
of February, Nineteen Hundred and Ninety-Two.
- 22 -
Item 1-1.2.c.
PUBLIC HEARING ITEM # 35344 (Continued)
PLANNING
Voting: 10-0
Council Members Voting Aye:
John A. Baum, James W. Brazier, Jr., Robert W.
Clyburn, Vice Mayor Robert E. Fentress, Harold
Heischober, Louis R. Jones, Paul J. Lanteigne, Reba S.
McCianan, Mayor Meyera E. Oberndorf and Nancy K.
Parker
Council Members Voting Nay:
None
Council Members Absent:
William D. Sessoms, Jr.
- 23 -
Item 1-3.
APPOINTMENTS
ADD-ON ITEM # 35345
Upon NOMINATION by Vice Mayor Fentress, City Council REAPPOINTED:
THE PLANNING COUNCIL
William D. Sessoms, Jr.
One year term
4/1/92-3/31/93
Voting: 10-0
Council Members Voting Aye:
John A. Baum, James W. Brazier, Jr., Robert W.
Clyburn, Vice Mayor Robert E. Fentress, Harold
Heischober, Louis R. Jones, Paul J. Lanteigne, Reba S.
McCianan, Mayor Meyera E. Oberndorf and Nancy K.
Parker
Council Members Voting Nay:
None
Council Members Absent:
William D. Sessoms, Jr.
- 24 -
Item I-J. 1.
UNFINISHED BUSINESS ITEM # 35346
The following registered in OPPOSITION:
Jeff Utley, 2988 Seaboard Road, Phone: 426-6586, Phone: 426-2374, represented
himself, Robert White and Mary Cooper. Mr. Utley did not believe a fair price
was being offered for the properties.
Allan Brock, 1762 Princess Anne Road, Phone: 426-2589, spoke concerning road
frontage on two parcels of his property
James Lawson, Real Estate, advised property would not be acquired from Mr.
Brock for this project. However, there would be an opportunity for his road
frontage to be restored.
Upon motion by Councilwoman McClanan, seconded by Councilman Baum, City City
Council APPROVED:
LOW BID:
CONTRACTORS PAVING Flanagan's Lane $946,274.05
(CIP 2-134)
Councilwoman McClanan requested the City Staff be directed to communicate with
the affected property owners relative their concerns and provide a statement
concerning the value of their property.
Voting: 10-0
Council Members Voting Aye:
John A. Baum, James W. Brazier, Jr., Robert W.
Clyburn, Vice Mayor Robert E. Fentress, Harold
Heischober, Louis R. Jones, Paul J. Lanteigne, Reba S.
McClanan, Mayor Meyera E. Oberndorf and Nancy K.
Parker
Council Members Voting Nay:
None
Council Members Absent:
William D. Sessoms, Jr.
- 25 -
Item I-J.2.
UNFINISHED BUSINESS ITEM # 35347
ADD-ON
Councilman Baum distributed copies of his letter dated February 11, 1992, to
the City Manager. Councilman Baum requested the City Manager obtain a policy
statement from a State agency regarding its proper role in formulating local
ordinances. The Planning Commission, in their December meeting, deferred the
Southern Watershed Management Ordinance until their February Twelfth meeting.
Five "envirorimental groups" have proposed their own "model" ordinance and are
very critical of the Staff's draft proposal. These groups indicated they
received technical assistance from the Nature Conservancy and have incorporated
the comments submitted by the Division of Natural Heritage of the State
Department of Conservation and Natural Resources. Councilman Baum advised none
of the five groups have any technical experience, of which he is aware. Rare
species located on private property has become a very controversial matter.
Purchases by governmental agencies at fair market value is the Fifth Amendment
method of making these serve a public purpose. The major proposed ordinance
change concerns the definition of "wetlands". These groups reject the Soil
Scientists' definition. In three phases over a two and one-half year period,
the City Council authorized over $40,000 on a matching basis to the Natural
Heritage Program. The third phase transferred $14,640 from the City's
Department of Natural Resources and Rural Services to help fund an agency now
apparently willing to assist political activists. In the Natural Heritage
Program presentation on June 5, 1989, the City Councll was advised in 1988, the
General Assembly formally made the Natural Conservancy a part of the Department
of Conservation and Historic Resources. Councilman Baum requested more comment
on that puzzling statement regarding that non-profit national and international
organization.
Councilman Baum's letter is hereby made a part of the record.
- 26 -
Item I-J.3.
UNFINISHED BUSINESS ITEM # 35348
ADD-ON
Councilman Lanteigne referenced the policies governing the operation of the
Municipal Cable Network (MCN 29) specifically Page 2, Item 6: "During the 60
day period immediately preceding the date of a councilmanic election, members
of City Council who are candidates for office will be allowed to appear on the
station only in connection with their official positions, i.e. formal council
meetings, special council meetings, or any other event or function in which the
member of City Council is required to appear in his or her official capacity.
In that regard, no programming will be developed which would provide an
individual "candidate" a special forum for expressing his or her views on an
issue of public importance with the exception of Council Candidate Forums
authorized hereunder." Councilman Lantegine advised this meets the minimum
requirements of the FCC regulations. Councilman Lanteigne inquired whether it
would be possible to go further than the minimum and amend the policy to read:
"..For a sixty-day time period preceding the councilmanic election or when a
candidate announces. whichever is -reater..". The City would not have the
conflict of providing one candidate a forum that is not provided to another
candidate. All candidates should be provided the same amount of air time.
Mayor Oberndorf advised the two MCN 29 programs she officiates are: "In
Recognition" and "City Dialogue". The "In Recognition" program serves to
present Proclamations, Resolutions and other tokens of respect from the City
Council and the public to individuals who have served on boards and
commissions, who have performed an extraordinary feat (i.e. co-ordinating the
Fiftieth Anniversary of Pearl Harbor), or recognizing an outstanding
achievement. Concerning "City Dialogue", Mayor Oberndorf does not choose the
topic. All sides of the question are represented, i.e. the new City Manager was
introduced on this program and fees for storm water runoff were discussed on
one show. This is a call-in show that allows the citizens to ask questions
concerning the specific item being addressed. Mayor Oberndorf has no intention
of officiating "City Dialogue" once her papers for the election have been
filed.
The City Manager advised his interpretation of the "In Recognition" program is
that it is the official duty of the Mayor and would be permitted under the
policies governing the operation of the Municipal Cable Network (MCN 29).
Vice Mayor Fentress expressed concern relative the expense of the City Council
forums and who bears the cost.
The City Manger advised the facility charges are ongoing items that the City'
covers. MCN 29 shall be reimbursed by the sponsoring organizations for
personnel and tape stock costs incurred in the videotaping of a candidate
forum. These are the bulk of the costs involved.
Councilman Jones requested the City Staff provide a break-down of the cost of
programs for MCN - 29, as well as determining which programs are in the
official capacity of the City vs those that are not.
- 27 -
Item I-J.4.
UNFINISHED BUSINESS ITEM # 35349
ADD-ON
Councilwoman Parker referenced Senate Bill 253 to continue tolls on the
Norfolk-Virginia Beach Expressway.
Lou Pace, 1908 Hunts Neck Court, Phone: 468-0925, registered in OPPOSITION to
this proposed Bill.
The City Clerk had advised Mayor Oberndorf this Bill had been WITHDRAWN. The
City Staff will provide documentation.
ITEM # 35350
Councilwoman Parker referenced House Bill 236 (sponsored by Delegate Lewis
Parker) charging Virginia Beach $160,000 a year for primacy.
The City Attorney advised "primacy" relates to the water program.
The City Staff will advise the status of House Bill 236
- 28 -
Item I-J. 5.
UNFINISHED BUSINESS ITEM # 35351
ADD-ON
On January 28, 1992, Councilwoman McClanan had distributed an article from the
Richmond Times Dispatch concerning the evaluation of the Erosion and
Sedimentation Law of all the localities in the State. The scores on enforcement
range from "O" to "19". Two localities in the State were rated "19": Virginia
Beach and James City County.
Councilwoman McClanan requested a Resolution in Recognition be prepared by the
City Attorney on behalf of the Department responsible for the enforcement of
the Erosion and Sedimentation Ordinance. Councilwoman McClanan requested this
Resolution be scheduled for the City Council Session of February 25, 1992
- 29 -
Item I-J.6.
UNFINISHED BUSINESS ITEM # 35352
ADD-ON
Vice Mayor Fentress commented concerning the method of Public Hearings. Vice
Mayor Fentess referenced the City Manager's letter of February 7, 1992,
relative Flanagans Lane - CIP 2-134. The City Manager advised on January 21,
1992, the city posted a "willingness" to hold a Design Public Hearing.
Individual property owners were notified of the City's intent via letter. No
requests for a hearing were received. At Rudee Inlet, a sign was posted stating
a "willingness" to hold a Public Hearing. Vice Mayor Fentress believed it might
be advisable to reflect a positive/date/time/place for Public Hearings rather
than a "willingness" to hold a Public Hearing.
The City Engineer advised relative the Lake Wesley Channel, the City Staff
first posted a "willingness" to hold a Public Hearing. As a result of letters
forwarded to affected property owners, indications were received from a number
of individuals requesting a Public Hearing; therefore, a Public Hearing was
conducted. Approximatley thirty (30) people attended. In all instances, letters
are forwarded indicating the City's "willingness" to hold a Public Hearing, if
the City Staff believes there is a need for public sentiment on an issue. If
response is received indicating a desire to hold a Public Hearing, same will be
SCHEDULED. Sometimes the feedback from a "willingness" notice can be answered
by a "one-on-one" discussion with a citizen. In which case, a Public Hearing is
not held. This is frequently done for a small CIP project which would only
effect two or three parcels of land.
- 30 -
Item I-J.7.
UNFINISHED BUSINESS ITEM # 35353
ADD-ON
Mayor Oberndorf referenced Delegate Cranwell's Bill relative the cap on the
Cigarette Taxes at 10cts a pack. This would impact the City with a significant
difference in revenues. This tax has historically been reserved for the
discretion of the cities.
Updates will be provided prior to Council Members meeting with the Legislators
on February 13, 1992.
- 31 -
Item I-K-1-
NEW BUSINESS ITEM # 35354
Counci Iman Lanteigne referenced a petition ot February 6, 1992, containing
signatures of residents not in OPPOSITION to the continuation of a free
standing mobile home at 944 Princess Anne Road. Said petition is hereby made a
part of the record.
Upon motion by Councilman Lanteigne, seconded by Councilman Brazier, City
Council ADOPTED:
Resolution approving the continuation of a free
standing mobile home in the Agricultural District
at 944 Princess Anne Road (PUNGO BOROUGH).
Voting: 10-0
Council Members Voting Aye:
John A. Baum, James W. Brazier, Jr., Robert W.
Clyburn, Vice Mayor Robert E. Fentress, Harold
Heischober, Louis R. Jones, Paul J. Lanteigne, Reba S.
McClanan, Mayor Meyera E. Oberndorf and Nancy K.
Parker
Council Members Voting Nay:
None
Council Members Absent:
William D. Sessoms, Jr.
Requested by Councilman Lanteigne
1
2 A RESOLUTION APPROVING THE CONTINUATION OF A
3 FREE STANDING MOBILE HOME AT 944 PRINCESS ANNE
4 ROAD IN THE PUNGO BOROUGH
5
6
7
8 WHEREAS, Mr. and Mrs. Claude S. Morse currently reside in
9 a freestanding mobile home located at 944 Princess Anne Road in the
10 Pungo Borough;
11 WHEREAS, this mobile home is currently subsidiary to the
12 principal residence, a single family dwelling on the same lot;
13 WHEREAS, this mobile home was duly approved under the
14 provisions of Section 19-19 of the City Code on August 9, 1984,
15 based upon a determination that all conditions set out in section
16 19-19 had been met;
17 WHEREAS, the residents of the property in question are
18 contemplating a change in circumstances by which they would not
19 remain in compliance with the conditions set out in Section 19-19;
20 WHEREAS, no change in the physical appearance of the
21 property will result from the contemplated change;
22 WHEREAS, the residents of the property in question have
23 sought and received the concurrence with their contemplated change
24 from all adjoining residents;
25 WHEREAS, Section 19-19 of the City Code, as amended,
26 provides that the Council may, by resolution, allow the
27 continuation of an existing freestanding mobile home if the
28 circumstances under which the original approval took place change;
29 NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF
30 VIRGINIA BEACH, VIRGINIA:
31 That pursuant to Section 19-19(b) of the City Code, as
32 amended, the City Council hereby approves the continuation of this
33 freestanding mobile home at 944 Princess Anne Road under the
3 4 changed circumstances, so long as Mr. or Mrs. Claude S. Morse
35 reside at this location.
36 ADOPTED BY THE COUNCIL OF THE CITY OF VIRGINIA BEACH,
37 VIRGINIA, on the 11 day of February 1992.
38
39
40
41
42
43
44 CA-4573
45 ORDIN\NONCODE\MOORSE.RES
46
47
48
APPROVED AS -10 CONTENTS
APPROVED AS TO LEGAL
,c
2
- 32 -
Item I-K.2.
NEW BUSINESS ITEM # 35355
The following spoke In OPPOSITION:
Rae H. LeSesne, 5325 Thornbury Lane, Phone. 497-8008
Lou Pace, 1908 Hunts Neck Court, Phone: 468-0925
Maurice Jackson, 1125 Ditchley Road, Phone: 428-1470 (Mr. Jackson had to leave;
however, Mr. LeSesne read his statement into the record.)
A motion was made by Councilman Lanteigne, seconded by Councilman Brazier to
ADOPT an Ordinance t.o AMEND and REORDAIN Section 2-90 of the Code of the City
of Virginia Beach re restrictions on certain political activities by City
employees.
A SUBSTITUTE MOTION was made by Councilman Jones to DEFER INDEFINITELY an
Ordinance to AMEND and REORDAIN Section 2-90 of the Code of the City of
Virginia Beach re restrictions on certain political activities by City
employees. The Motion failed for lack of a Second.
A motion was made by Councilman Lanteigne, seconded by Councilman Brazier to
ADOPT:
Ordinance to AMEND and REORDAIN section 2-90 of the
Code of the City ot Virginia Beach re restrictions
on certain polltical activities by City employees.
voting: 4-6 (MOTION LOST TO A NEGATIVE VOTE)
Council Members Voting Aye:
James W. Brazier, Jr.*, Louis R. Jones, Paul J.
Lanteigne** and Reba S. McClanan
Council Members Voting Nay:
John A. Baum, Robert W. Clyburn, Vice Mayor Robert E.
Fentress, Harold Heischober, Mayor Meyera E. Oberndorf
and Nancy K. Parker
Council Members Absent:
William D. Sessoms, Jr.
*Councilman Brazier DISCLOSED pursuant to Section 2.1-639.14(G) of the Code of
Virginia, he was currently employed by the City of Virginia Beach as a police
officer in a position in the Commonwealth Attorney's Office. Councilman Brazier
declared he was able to participate in the transaction fairly, objectively and
in the public interest. Councilman Brazier's letter of February 11, 1992, 15
hereby made a part of the record.
**Councilman Lanteigne DISCLOSED pursuant to Section 2.1-639.14(G) of the Code
of Virginia, he was currently employed by the City of Virginia Beach as a
police officer in a position in the Sheriff's Office. Councilman Lanteigne
declared he was able to participate in the transaction fairly, objectively and
in the public interest. Councilman Lanteigne's letter of February 11, 1992, is
hereby made a part of the record.
- 33 -
Item I-L.I-
ADJOURNMENT ITEM # 35356
Upon motion by Councilman Baum, and BY CONSENSUS, City Council ADJOURNED the
Meeting at 7:45 P.M-
C
B. 'l 0. H
Ch,.t Dputy C"t@ CMI'ek
th Hd @,th, CMC/AAE -Y.".
g.r
t Cl ek Mayor
City of Virginia Beach
Virginia