A RESOLUTION APPROVING A PLAN OF LEASE FINANCING WITH THE ECONOMIC DEVELOPMENT AUTHORITY OF ALBEMARLE COUNTY, VIRGINIA, FOR THE ACQUISITION, CONSTRUCTION AND EQUIPPING OF A FIRE STATION AND THE REPLACEMENT OF FIRE AND EMS APPARATUS

WHEREAS, the Board of Supervisors (the “Board”) of Albemarle County, Virginia (the “County”), desires to finance and refinance the costs of (a) acquiring, constructing and equipping a fire station to be known as the Hollymead Fire Station and (b) replacing certain fire and EMS apparatus (collectively, the “Project”);

WHEREAS, the Economic Development Authority of Albemarle County (the “Authority”) is authorized under the Industrial Development and Revenue Bond Act (the “Act”) to exercise all the powers set forth in the Act, which include, among other things, the power (i) to make loans to, among others, a county in furtherance of the Act, (ii) to finance or refinance and lease facilities for use by, among others, a county, (iii) to issue its revenue bonds, notes and other obligations from time to time for such purposes and (iv) to pledge all or any part of its revenues and receipts derived from payments received by the Authority in connection with its loans or from the leasing by the Authority of such facilities or from any source, as security for the payment of principal of and interest on any such obligations;

WHEREAS, the Board desires to undertake the financing and refinancing of the Project through a lease structure with the Authority, pursuant to which the County would lease certain property to the Authority pursuant to the terms of a Ground Lease (as hereinafter defined) and the Authority would lease such property back to the County pursuant to the terms of a Lease Agreement (as hereinafter defined);

WHEREAS, until the County acquires fee simple title to the Hollymead Fire Station and can substitute such property as leased collateral, the Board desires to secure the financing through a lease of its Monticello Fire Station located on land in the County (with such land, together with all improvements now or hereafter located thereon being, collectively, the “Property”);

WHEREAS, the Board desires that the Authority (a) issue a tax-exempt bank qualified revenue note in an aggregate principal amount not to exceed $7,000,000 (the “Note”) pursuant to the terms of the Lease Agreement between the Authority, the County and the Noteholder (as hereinafter defined) and (b) lease the Property to the County at a rent sufficient to pay when due the principal of and interest on the Note;

WHEREAS, the County Executive has requested Davenport & Company LLC, as the County’s financial advisor (the “Financial Advisor”), to solicit bids from banking institutions for the purchase of the Note;

WHEREAS, there have been presented to this meeting drafts of the following documents (collectively, the “Documents”) that the County proposes to execute to carry out the transactions described above, copies of which shall be filed with the records of the County:

(a)        Ground Lease to be dated the date of its delivery (the “Ground Lease”), between the Authority and the County pursuant to which the County will lease the Property to the Authority;

(b)        Note Purchase Agreement and Lease Agreement to be dated the date of its delivery (the “Lease Agreement”), between the Authority, the County and the banking institution selected by the Authority and the County (the “Noteholder”) pursuant to which the Authority will (1) issue and sell the Note, (2) use the proceeds of the Note to finance the Project, and (3) lease the Property to the County.

BE IT RESOLVED BY THE BOARD OF SUPERVISORS OF ALBEMARLE COUNTY, VIRGINIA:

1.                  The following plan for financing the Project is approved.  The Authority is hereby requested to issue the Note in a maximum principal amount not to exceed $7,000,000 and use the proceeds to finance the Project.  The County will lease the Property to the Authority pursuant to the terms of the Ground Lease.  Thereafter, the Authority will lease the Property to the County pursuant to the terms of the Lease Agreement.  The County will undertake to make payments to the Authority of basic rent (“Basic Rent”) and additional rent (“Additional Rent”) under the terms of the Lease Agreement in amounts sufficient to amortize the Note and to pay the fees and expenses of the Authority.  The obligation of the Authority to pay principal of and premium, if any, and interest on the Note will be limited to payments of Basic Rent and Additional Rent received from the County.  The undertaking by the County to make payments of Basic Rent and Additional Rent will be subject to appropriations from time to time by the Board of sufficient amounts for such purposes.  If the County exercises its right not to appropriate money for such payments, the Authority shall have the right to exercise any remedies provided in the Lease Agreement upon an event of non-appropriation, including the right to terminate the Lease Agreement and exclude the County from possession of the Property.  The Note will be secured by an assignment to the Noteholder of the Authority’s rights to receive payments of Basic Rent.  The plan of financing for the Project shall contain such additional requirements and provisions as the County Executive may approve and determine to be in the best interest of the County.

2.                  Subject to the pricing parameters of the Note described below, the Board hereby authorizes the County Executive, in consultation with the Financial Advisor and the Authority, to review the bids from the banking institutions and to select the bid that the County Executive determines to be in the best interests of the County.  The banking institution submitting such winning bid shall be selected as the Noteholder.

3.                  The County Executive is authorized and directed to execute the Documents, which shall be in substantially the forms submitted to this meeting, which are hereby approved, with such completions, omissions, insertions and changes not inconsistent with this Resolution as may be approved by the County Executive, his execution to constitute conclusive evidence of his approval of any such completions, omissions, insertions and changes.  In making completions to the Lease Agreement, the County Executive shall provide for payments of Basic Rent on terms equivalent to a Note that (a) matures in installments ending no later than December 31, 2029; (b) has an aggregate principal amount not exceeding $7,000,000; (c) has a “true” or “Canadian” interest cost not exceeding 5.0% per year; (d) is subject to optional redemption, if at all, at a premium not exceeding 1.0% of the principal amount thereof; and (e) is sold to the Noteholder at a price not less than 99.0% of the aggregate principal amount thereof.  Following the sale of the Note, the County Executive shall file a certificate with the records of the Board of Supervisors setting forth the final terms of the Note and the Lease Agreement.  The actions of the County Executive in approving the terms of the Note and the Lease Agreement shall be conclusive, and no further action shall be necessary on the part of the County.  As set forth in the Lease Agreement, the County undertakes to pay from legally available funds such “late charges” and other charges as described therein.

4.                  The officers of the County are authorized and directed to execute and deliver all certificates and instruments and to take all actions necessary or desirable in connection with the execution and delivery of the Documents and the completion of the financing.

5.                  The undertaking by the County to pay any amounts under the Lease Agreement shall be limited obligations payable solely from funds to be appropriated by the Board for such purpose and shall not constitute a debt of the County within the meaning of any constitutional or statutory limitation or a pledge of the faith and credit of the County beyond any fiscal year for which the Board has lawfully appropriated from time to time.  Nothing herein or in the Lease Agreement shall constitute a debt of the County within the meaning of any constitutional or statutory limitation or a pledge of the faith and credit or taxing power of the County.

6.                  The Board believes that funds sufficient to make payment of all amounts payable under the Lease Agreement can be obtained.  While recognizing that it is not empowered to make any binding commitment to make such payments beyond the current fiscal year, the Board hereby states its intent to make annual appropriations for future fiscal years in amounts sufficient to make all such payments and hereby recommends that future Boards do likewise during the term of the Lease Agreement.  The Board directs the County Executive or Director of Finance, or such other officer who may be charged with the responsibility for preparing the County’s annual budget, to include in the budget request for each fiscal year during the term of the Lease Agreement an amount sufficient to make the payment of all amounts payable under the Lease Agreement.  Within 10 days after adoption of the County’s annual budget and related appropriation resolution, but not later than 10 days after the beginning of each fiscal year, the County Executive is authorized and directed to deliver to the Authority and the Noteholder a certificate stating whether an amount equal to or credited to the payment of Basic Rent and Additional Rent which will be due during such fiscal year has been budgeted and appropriated by the Board.  So long as the Note is outstanding, if at any time during any fiscal year of the County, the amount appropriated in the County’s annual budget in such fiscal year is insufficient to pay when due the amounts payable under the Lease Agreement, the Board directs the County Executive or Director of Finance, or such other officer who may be charged with the responsibility for preparing the County’s annual budget, to submit to the Board at its next scheduled meeting, or as promptly as practicable (but in any event within 45 days), a request for a supplemental appropriation sufficient to cover the deficit.

7.                   LISTNUM (a)        The County covenants that it will not take or omit to take any action the taking or omission of which will cause the Note to be an “arbitrage bond” within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, and regulations issued pursuant thereto (the “Code”), or otherwise cause the interest due on the Note to be includable in the gross income of the holder thereof under existing statutes.  Without limiting the generality of the foregoing, the County shall comply with any provision of law that may require the County at any time to rebate to the United States any part of the earnings derived from the investment of the funds received under the Lease Agreement, unless the County receives an opinion of nationally recognized bond counsel that such compliance is not required to prevent interest on the Note from being includable in the gross income for federal income tax purposes of the holder thereof under existing law.

(b)               The County covenants that during the term of the Lease Agreement it shall not permit the Project or the proceeds of the Note to be used in any manner that would result in (a) 10% or more of such proceeds or the facilities financed with such proceeds being used in a trade or business carried on by any person other than a governmental unit, as provided in Section 141(b) of the Code, provided that no more than 5% of such proceeds may be used in a trade or business unrelated to the County’s use of the Project, (b) 5% or more of such proceeds being used with respect to any “output facility” (other than a facility for the furnishing of water), within the meaning of Section 141(b)(4) of the Code, or (c) 5% or more of such proceeds being used directly or indirectly to make or finance loans to any persons other than a governmental unit, as provided in Section 141(c) of the Code; provided, however, that if the County receives an opinion of nationally recognized bond counsel that any such covenants need not be complied with to prevent the interest on the Note from being includable in the gross income for Federal income tax purposes of the holder thereof under existing law, the County need not comply with such covenants.

8.                  Such officers of the County as may be requested are authorized and directed to execute an appropriate certificate setting forth the expected use and investment of the proceeds of the Note, and any elections such officers deem desirable regarding rebate of earnings to the United States, for purposes of complying with Section 148 of the Code.  Such certificate and elections shall be in such form as may be requested by bond counsel for the County.

9.                  All costs and expenses in connection with the undertaking of the Project and the issuance of the Note, including the Authority’s fees and expenses and expenses of bond counsel, counsel for the Authority, shall be paid from the proceeds of the Note or other legally available funds of the County.  If for any reason the Note is not issued, it is understood that all such expenses shall be paid by the County from its legally available funds and that the Authority shall have no responsibility therefor.

10.              Any authorization herein to execute a document shall include authorization to deliver it to the other parties thereto and to record such document where appropriate.

11.              All other actions of the officers of the County that are in conformity with the purposes and intent of this Resolution and in furtherance of this financing and the undertaking of the Project are approved and ratified.

12.              The Board requests the Authority to designate the Note as a “qualified tax-exempt obligation” under Section 265(b)(3)(B) of the Code, and, to the extent required by law, concurs with such designation.  The Board acknowledges that, for purposes of such designation, the County will not issue, nor approve the issuance of, any tax-exempt obligations which, taking into account the Note, will result in more than $30,000,000 in tax-exempt obligations being issued in calendar year 2009, unless the County obtains an opinion of bond counsel to the effect that such issuance will not adversely affect the statue of the Note as a “qualified tax-exempt obligation.”

13.              This Resolution shall take effect immediately.

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