08-17-2021 Finance Committee Agenda Packet
CALL TO ORDER
ROLL CALL
AGENDA ITEMS TO BE ADDED
APPROVAL OF AGENDA
NEW BUSINESS
a. 2021 County Budget Amendments (Staff Contact: Kimberly G. Van Der Hyde)
b. 2022 Budget Amendments/Public Hearing (Staff Contact: Kimberly G. Van Der
Hyde)
c. Solid Waste Financing-VRA Resolution (Staff Contact: Kimberly G. Van Der Hyde)
d. ARPA Funding Discussion (Staff Contact: Kimberly G. Van Der Hyde)
e. Resolution # 2021-08-05 (Authorization of Submission of Economic Development
Administration Grant Application for Critical Improvements for Public Water and
Sewer Infrastructure Project) Adoption (Staff Contact: Chris Adcock)
f. Wage and Compensation Discussion (Staff Contract: Kimberly G. Van Der Hyde)
MATTERS FROM COMMITTEE MEMBERS
ADJOURNMENT
FINANCE COMMITTEE
MEETING
Tuesday, August 17, 2021 – 3:30 PM
Elections and Training Center
18 Depot Street,
Chatham, Virginia 24531
AGENDA
1.
2.
3.
4.
5.
6.
7.
Finance Committee
EXECUTIVE SUMMARY
ACTION ITEM
Agenda Title: 2021 County Budget Amendments (Staff Contact: Kimberly G. Van Der
Hyde)
Staff Contact(s): Kimberly G. Van Der Hyde
Agenda Date: August 17, 2021 Item Number: 5.a
Attachment(s): 2021 BUDGET YEAREND BUDGET ADJUSTMENTS
Reviewed By:
SUMMARY:
Each year, Departmental/Fund Budgets are reviewed to determine if sufficient Budget amounts
exist to cover expenses until year-end. Most of these items are bookkeeping entries required by
the County’s Auditors. The attached list shows the amount needed/requested and the reason for
the need/request. Said list also contains suggested appropriations for year-end, as well as the
categorical changes requested by the School Board. This list has been circulated to all Board
members via the Friday Update.
FINANCIAL IMPACT AND FUNDING SOURCE:
See attached list.
RECOMMENDATION:
County Staff recommends the Committee recommend approval to the full Board of the attached
FY 2021 County Budget Amendments as attached and presented. This item is on the Board’s
August Business Meeting’s Consent Agenda. The transfers have no monetary effect on the
County Budget since monies are simply being moved from one (1) line item to the next to cover
shortages. The Budget Appropriations included are utilizing 2021 actual revenues that have not
been previously budgeted. These appropriations will cover the various line items listed in detail
on the attached list.
MOTION:
“I make a Motion to recommend approval to the full the attached FY 2021 County Budget
Amendments as attached and presented.”
5.a
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Department
Line Items Providing
Funds Line Item Description
Amount of
Transfer/Appropriation
Reason for
Transfer/Appropriation 2021 Expense Line Item
Amount of
Transfer/Appropriation
YEAR-END TRANSFERS:
General Fund:TRANSFER
Year-End Bookkeeping
Budgetary Adjustments
Non-Departmental 100-4-091200-8109 Grants Local Match/Contingency (197,836.15) 100-4-012100-8105 (Fleet-Cap Outlay-Veh)18,891.41
100-4-012210-3150 (County Atty-Legal)5,868.21
100-4-012320-various (Reassessment)68,402.39
100-4-032200-various (Public Safety-Salary)35,119.00
100-4-035500-583999 (Vaccine Clinic)-Will be
reimbursed by FEMA 44,555.14
100-4-091200-5698 (Summer Intern Program)25,000.00
DSS:
DSS Administration 201-4-053100-1050 DSS-Clerical Pass-thru (33,158.03)201-4-053200-5706 33,158.03
Solid Waste Fund:
Solid Waste-Collections 520-4-042300-various Collections-Operational Budget (104,095.79)520-4-042400-various 104,095.79
TRANSFER
Schools 205 School Transfers -
Year-End Categorical Changes-
See Attached Spreadsheet from
the School Board 205-4-061000-1120 (Instruction)(2,580,750.00)
205-4-062000-1800 (General Support)(248,255.96)
205-4-063000-3400 (Pupil Transport)(706,311.06)
205-4-064000-3300 (Maintenance)4,518,325.48
205-4-065000-3179 (Non-Instructional)1,111,377.06
205-4-067000-5700 (Technology)192,996.00
205-4-070000-8109 (Contingency Reserves)(2,287,381.52)
Pittsylvania County
FY 2021 Year-End Budget Adjustments
5.a.a
Packet Pg. 3 Attachment: 2021 BUDGET YEAREND BUDGET ADJUSTMENTS (2696 : 2021 County Budget
Department
Line Items Providing
Funds Line Item Description
Amount of
Transfer/Appropriation
Reason for
Transfer/Appropriation 2021 Expense Line Item
Amount of
Transfer/Appropriation
Pittsylvania County
FY 2021 Year-End Budget Adjustments
YEAR-END APPROPRIATIONS:
APPROPRIATION
Fire & Rescue 100-3-000000-130311 EMS Rescue Billing Fees/Services 322,915.69
Pittsylvania County hired EMTs
to provide additional support to
volunteer rescue agencies. The
County started billing for these
services on July 2020 100-4-032200-various 322,812.37
100-4-032214-6008 103.32
APPROPRIATION
Sale of Surplus Property 100-3-000000-150215 Sale of Surplus Property 29,503.40
Pittsylvania County sold surplus
property and used the proceeds
to purchase vehicles for County
Administration/Sheriff's Office 100-4-012100-8105 28,253.40
100-4-031200-8105 1,250.00
APPROPRIATION
Donations-Project
Lifesaver 100-3-000000-189903 Project Lifesaver-Donations 500.00
We receive donations for the
Project Lifesaver Program at the
Sheriff's office. We received
monies during the year that
need to be appropriated back to
the Project Lifesaver Expenditure
line item 100-4-031200-5882 500.00
APPROPRIATION
Donations-Halloween 100-3-000000-189913 Halloween-Contributions 250.00
We receive donations for the
Trunk or Treat event that is
sponsored by the Sheriff's office.
We received monies during the
year that need to be
appropriated back to the
Halloween Expenditure line item.100-4-031200-5878 250.00
5.a.a
Packet Pg. 4 Attachment: 2021 BUDGET YEAREND BUDGET ADJUSTMENTS (2696 : 2021 County Budget
Department
Line Items Providing
Funds Line Item Description
Amount of
Transfer/Appropriation
Reason for
Transfer/Appropriation 2021 Expense Line Item
Amount of
Transfer/Appropriation
Pittsylvania County
FY 2021 Year-End Budget Adjustments
APPROPRIATION
Donations-DARE 100-3-000000-189914 DARE-Contributions 4,000.00
We receive donations to support
the DARE program supported in
the schools by the Sheriff's
Office. We need to appropriate
these funds to be used for DARE
program expenses.100-4-031200-6002 4,000.00
APPROPRIATION
Soil & Water
Conservation 100-3-000000-240415 Soil & Water Conservation 31,425.40
SWCD pays 100% of their payroll
with Pittsylvania County. An
estimate was used to determine
the budget for the year and
SWCD was short of budget
dollars by this amount.100-4-082400-various 31,425.40
APPROPRIATION
Grants 250-3-000000-094262 DRF-Leadership Training Grant 24,666.00
Danville Regional Foundation
approved this grant to increase
leadership and management
capacity development skills 250-4-094262-5540 24,666.00
APPROPRIATION
WIA Grants 251-3-000000-410502 Unobligated Admin Fees 3,273.82
Amounts received by the WIB to
administer the Harvest
Foundation and TANF Grants 251-4-353665-6014 3,273.82
APPROPRIATION
Capital Improvements
Fund 310-3-000000-180301 Building & Grounds Improvements 73,796.93
Reimbursement amount
received for the renovation of
the Hancock Building and a
VACORP Insurance Claim 310-4-094130-8158 73,796.93
APPROPRIATION
Courthouse Maintenance
Fund 312-3-000000-410501 Courthouse Maintenance 1,879.11
Use of Courthouse Maintenance
funds to renovate different areas
of the courthouse 312-4-043200-3310 1,879.11
5.a.a
Packet Pg. 5 Attachment: 2021 BUDGET YEAREND BUDGET ADJUSTMENTS (2696 : 2021 County Budget
Department
Line Items Providing
Funds Line Item Description
Amount of
Transfer/Appropriation
Reason for
Transfer/Appropriation 2021 Expense Line Item
Amount of
Transfer/Appropriation
Pittsylvania County
FY 2021 Year-End Budget Adjustments
APPROPRIATION
Social Services IDA Bond
Fund 420-3-000000-410501 IDA Bond Proceeds 6,232.05
Remaining bond proceeds for
the Human Services Building
used to repair HVAC controls 325-4-081500-82322 6,232.05
APPROPRIATION
Water & Sewer 501-3-000000-180301 Water & Sewer-Expenditure Refunds 1,950.00
Reimbursement by the City of
Danville for DEQ permits for
Construction of sewer line at at
Berry Hill Megasite 501-4-043221-3163 1,950.00
APPROPRIATION
Solid Waste-Sale of
Surplus Property 520-3-000000-150215 Solid Waste-Sale of Surplus Property 35,817.01
Several pieces of landfill
equipment were sold and the
proceeds are being used to cover
the cost of new landfill
equipment 520-4-094110-8125 35,817.01
APPROPRIATION
Solid Waste-Bond
Proceeds 520-3-000000-410401 Solid Waste-Bond Proceeds 829,183.44
Solid Waste VRA loan proceeds
to cover equipment purchases
and engineering costs associated
with landfill/convenience center
construction 520-4-094110-8125 579,183.44
520-4-094120-8146 250,000.00
TOTAL APPROPRIATION 1,365,392.85 1,365,392.85
5.a.a
Packet Pg. 6 Attachment: 2021 BUDGET YEAREND BUDGET ADJUSTMENTS (2696 : 2021 County Budget
5.a.a
Packet Pg. 7 Attachment: 2021 BUDGET YEAREND BUDGET ADJUSTMENTS (2696 : 2021 County Budget Amendments (Staff Contact: Kimberly G. Van Der
5.a.aPacket Pg. 8Attachment: 2021 BUDGET YEAREND BUDGET ADJUSTMENTS (2696 : 2021 County Budget Amendments
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Packet Pg. 9 Attachment: 2021 BUDGET YEAREND BUDGET ADJUSTMENTS (2696 : 2021 County Budget Amendments (Staff Contact: Kimberly G. Van Der
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Packet Pg. 10 Attachment: 2021 BUDGET YEAREND BUDGET ADJUSTMENTS (2696 : 2021 County Budget Amendments (Staff Contact: Kimberly G. Van Der
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Packet Pg. 11 Attachment: 2021 BUDGET YEAREND BUDGET ADJUSTMENTS (2696 : 2021 County Budget Amendments (Staff Contact: Kimberly G. Van Der
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Packet Pg. 12 Attachment: 2021 BUDGET YEAREND BUDGET ADJUSTMENTS (2696 : 2021 County Budget Amendments (Staff Contact: Kimberly G. Van Der
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Packet Pg. 13 Attachment: 2021 BUDGET YEAREND BUDGET ADJUSTMENTS (2696 : 2021 County Budget Amendments (Staff Contact: Kimberly G. Van Der
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Packet Pg. 14 Attachment: 2021 BUDGET YEAREND BUDGET ADJUSTMENTS (2696 : 2021 County Budget Amendments (Staff Contact: Kimberly G. Van Der
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Packet Pg. 15 Attachment: 2021 BUDGET YEAREND BUDGET ADJUSTMENTS (2696 : 2021 County Budget Amendments (Staff Contact: Kimberly G. Van Der
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Packet Pg. 16 Attachment: 2021 BUDGET YEAREND BUDGET ADJUSTMENTS (2696 : 2021 County Budget Amendments (Staff Contact: Kimberly G. Van Der
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Packet Pg. 17 Attachment: 2021 BUDGET YEAREND BUDGET ADJUSTMENTS (2696 : 2021 County Budget Amendments (Staff Contact: Kimberly G. Van Der
Finance Committee
EXECUTIVE SUMMARY
ACTION ITEM
Agenda Title: 2022 Budget Amendments/Public Hearing (Staff Contact: Kimberly G.
Van Der Hyde)
Staff Contact(s): Kimberly G. Van Der Hyde
Agenda Date: August 17, 2021 Item Number: 5.b
Attachment(s): 2022 BUDGET AMENDMENT DOCS
Reviewed By:
SUMMARY:
Virginia Code § 15.2-2507 states that “Any locality may amend its budget to adjust the aggregate
amount to be appropriated during the current fiscal year as shown in the currently adopted
budget as prescribed by section 15.2-2504. However, any such amendment which exceeds one
percent of the total expenditures shown in the currently adopted budget must be accomplished by
publishing a notice of a meeting and a public hearing once in a newspaper having general
circulation in that locality at least seven days prior to the meeting date.” An advertisement of the
Budget Amendments, attached, appeared in the Chatham Star Tribune on August 4, 2021, which
satisfies the seven (7)-day legal notice requirement.
FINANCIAL IMPACT AND FUNDING SOURCE:
The County needs to make several Budget Amendments to the FY2022 County Budget. A
Budget Synopsis is attached showing both revenues and expenditures for the $27,175,739.41,
along with a detailed spreadsheet outlining the specific uses of these funds. These items will be
discussed at the Finance Committee Meeting. This item will be an action item under the “Other
Public Hearings” section of the Board’s August Business Meeting.
RECOMMENDATION:
County Staff recommends the Committee recommend the full Board approve an appropriation of
$27, 175,730.41, following conducting the legally required Public Hearing at the Board’s August
Business Meeting.
MOTION:
“I make a Motion recommending the full Board approve an appropriation of $27, 175,730.41,
following conducting the legally required Public Hearing at the Board’s August Business
Meeting.”
5.b
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5.b.a
Packet Pg. 19 Attachment: 2022 BUDGET AMENDMENT DOCS (2695 : 2022 Budget Amendments/Public Hearing (Staff Contact: Kimberly G. Van Der Hyde))
5.b.aPacket Pg. 20Attachment: 2022 BUDGET AMENDMENT DOCS (2695 : 2022 Budget Amendments/Public Hearing (Staff
5.b.aPacket Pg. 21Attachment: 2022 BUDGET AMENDMENT DOCS (2695 : 2022 Budget Amendments/Public Hearing (Staff
5.b.aPacket Pg. 22Attachment: 2022 BUDGET AMENDMENT DOCS (2695 : 2022 Budget Amendments/Public Hearing (Staff
5.b.aPacket Pg. 23Attachment: 2022 BUDGET AMENDMENT DOCS (2695 : 2022 Budget Amendments/Public Hearing (Staff
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Packet Pg. 24 Attachment: 2022 BUDGET AMENDMENT DOCS (2695 : 2022 Budget Amendments/Public Hearing (Staff Contact: Kimberly G. Van Der Hyde))
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Packet Pg. 25 Attachment: 2022 BUDGET AMENDMENT DOCS (2695 : 2022 Budget Amendments/Public Hearing (Staff Contact: Kimberly G. Van Der Hyde))
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Packet Pg. 26 Attachment: 2022 BUDGET AMENDMENT DOCS (2695 : 2022 Budget Amendments/Public Hearing (Staff Contact: Kimberly G. Van Der Hyde))
5.b.aPacket Pg. 27Attachment: 2022 BUDGET AMENDMENT DOCS (2695 : 2022 Budget Amendments/Public Hearing (Staff
5.b.aPacket Pg. 28Attachment: 2022 BUDGET AMENDMENT DOCS (2695 : 2022 Budget Amendments/Public Hearing (Staff
5.b.aPacket Pg. 29Attachment: 2022 BUDGET AMENDMENT DOCS (2695 : 2022 Budget Amendments/Public Hearing (Staff
5.b.aPacket Pg. 30Attachment: 2022 BUDGET AMENDMENT DOCS (2695 : 2022 Budget Amendments/Public Hearing (Staff
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Packet Pg. 31 Attachment: 2022 BUDGET AMENDMENT DOCS (2695 : 2022 Budget Amendments/Public Hearing (Staff Contact: Kimberly G. Van Der Hyde))
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Packet Pg. 32 Attachment: 2022 BUDGET AMENDMENT DOCS (2695 : 2022 Budget Amendments/Public Hearing (Staff Contact: Kimberly G. Van Der Hyde))
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Packet Pg. 33 Attachment: 2022 BUDGET AMENDMENT DOCS (2695 : 2022 Budget Amendments/Public Hearing (Staff Contact: Kimberly G. Van Der Hyde))
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Packet Pg. 34 Attachment: 2022 BUDGET AMENDMENT DOCS (2695 : 2022 Budget Amendments/Public Hearing (Staff Contact: Kimberly G. Van Der Hyde))
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Packet Pg. 35 Attachment: 2022 BUDGET AMENDMENT DOCS (2695 : 2022 Budget Amendments/Public Hearing (Staff Contact: Kimberly G. Van Der Hyde))
5.b.aPacket Pg. 36Attachment: 2022 BUDGET AMENDMENT DOCS (2695 : 2022 Budget Amendments/Public Hearing (Staff
5.b.aPacket Pg. 37Attachment: 2022 BUDGET AMENDMENT DOCS (2695 : 2022 Budget Amendments/Public Hearing (Staff
5.b.a
Packet Pg. 38 Attachment: 2022 BUDGET AMENDMENT DOCS (2695 : 2022 Budget Amendments/Public Hearing (Staff Contact: Kimberly G. Van Der Hyde))
5.b.a
Packet Pg. 39 Attachment: 2022 BUDGET AMENDMENT DOCS (2695 : 2022 Budget Amendments/Public Hearing (Staff Contact: Kimberly G. Van Der Hyde))
Finance Committee
EXECUTIVE SUMMARY
ACTION ITEM
Agenda Title: Solid Waste Financing-VRA Resolution (Staff Contact: Kimberly G. Van
Der Hyde)
Staff Contact(s): Kimbelry G. Van Der Hyde
Agenda Date: August 17, 2021 Item Number: 5.c
Attachment(s):
PUBLIC HEARING NOTICE -Pittsylvania - 2021 VRA Solid Waste
2021-08-04 VRA Revenue Bonds
Active_148657619_1_Pittsylvania 2021C - Financing Agreement (Solid
Waste Revenue) (taxable)
Active_148552393_1_Pittsylvania 2021C - Financing Agreement (Solid
Waste Revenue)
Reviewed By:
SUMMARY:
The County is planning capital expenditures for the County’s Solid Waste System. These capital
improvements include constructing and equipping three (3) new Convenience Centers,
constructing a new cell in the County’s Landfill, and acquiring equipment for use at the Landfill
(“Projects”). The Board has applied with the Virginia Resources Authority to secure financing,
not to exceed $9,000,000, to cover the Projects, as well as refinancing the Landfill portion of the
2018A Bonds issued for Landfill equipment.
As such, a Public Hearing is legally required for citizen input of on this potential
financing/refinancing. As evinced by the attached, notice of said Public Hearing was published
in The Chatham Star Tribune on August 4, 2021, and August 11, 2021. The Board is required to
adopt a Resolution authorizing and providing for the issuance, sale, and award of two (2) series
of Solid Waste System Revenue and Refunding Bonds. For the Board’s review and
consideration, Resolution # 2021-08-04, evincing the same, is attached.
FINANCIAL IMPACT AND FUNDING SOURCE:
Specific financial impacts were discussed at length at the Board’s August Finance Committee
Meeting.
RECOMMENDATION:
County Staff recommends the Committee recommend the full Board adopt Resolution # 2021-
08-04, authorizing and providing for the issuance, sale, and award of two (2) series of Solid
Waste System Revenue and Refunding Bonds, following conducting the legally required Public
Hearing at the Board’s August Business Meeting.
5.c
Packet Pg. 40
MOTION:
“I make a Motion recommending the full Board adopt Resolution # 2021-08-04, authorizing and
providing for the issuance, sale, and award of two (2) series of Solid Waste System Revenue and
Refunding Bonds, following conducting the legally required Public Hearing at the Board’s
August Business Meeting.”
5.c
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Given under my hand this 17th day of August 2021
________________________________________
Ronald Scearce, Chairman
Pittsylvania County Board of Supervisors
________________________________________
David M. Smitherman, Clerk
Pittsylvania County Board of Supervisors
5.c
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NOTICE OF PUBLIC HEARING
On Tuesday, August 17, 2021, the Pittsylvania County Board of Supervisors will hold a
Public Hearing on the proposed issuance of Revenue Bonds in the estimated maximum principal
amount of $10,000,000 (“Bonds”). The purpose of the Bonds is to: (a) finance capital projects
related to the County’s solid waste system (“System”), including, without limitation, opening a
new cell in the County’s Landfill, acquiring equipment for use at the Landfill, constructing and
equipping three (3) new Convenience Centers, and improving an existing Convenience Center;
and (b) refund certain outstanding indebtedness previously incurred to finance Capital Projects
related to the System. The Bonds will be secured by a pledge of revenues of the System.
The Public Hearing, which may be continued or adjourned, will be held during the Board
of Supervisors meeting scheduled to start at 7:00 P.M., local time (or as soon thereafter as the
matter may be heard), in the Board Meeting Room, 39 Bank Street, SE, Chatham, Virginia 24531.
All interested persons may appear at such time and place to present their views. Anyone needing
assistance or accommodation under the Americans with Disabilities Act, should call the County
Administrator at (434) 432-7710. A complete Public Hearing file may be inspected, Monday –
Friday, 8:00 AM – 5:00 PM, at the County Administration Building, 1 Center Street, Chatham,
Virginia 24531.
036841.0000015 EMF_US 86054298v1
5.c.a
Packet Pg. 43 Attachment: PUBLIC HEARING NOTICE -Pittsylvania - 2021 VRA Solid Waste (2697 : Solid Waste Financing-VRA Resolution; (Staff Contact:
RESOLUTION #2021-08-04
RESOLUTION AUTHORIZING AND PROVIDING FOR THE
ISSUANCE, SALE AND AWARD OF TWO SERIES OF SOLID
WASTE SYSTEM REVENUE AND REFUNDING BONDS OF
PITTSYLVANIA COUNTY, VIRGINIA, IN AN AGGREGATE
PRINCIPAL AMOUNT NOT TO EXCEED $9,000,000, AND
PROVIDING FOR THE FORM, DETAILS AND PAYMENT
THEREOF
WHEREAS, the Industrial Development Authority of Pittsylvania County, Virginia (the
“Authority”), previously issued its $1,803,802 Lease Revenue Bond (County Projects), Series
2018A (Federally Tax-Exempt) (the “2018A Bond”), and loaned the proceeds thereof to
Pittsylvania County, Virginia (the “County”), pursuant to a Lease Agreement dated as of April 1,
2006, as amended by the First Amendment to Lease Agreement dated as of January 1, 2018, each
between the Authority and the County, to finance (a) solid waste system improvements, including
(i) the acquisition of a bulldozer and pan scraper for the County landfill (the “2018 Landfill
Project”), and (ii) the acquisition of a grappler truck and three roll off trucks for the County’s
compactor sites (the “2018 Compactor Site Project” and, together with the 2018 Landfill Project,
the “2018 Projects”), (b) the acquisition and installation of a centrifugal water-cooled chiller for
the courthouse building and (c) the acquisition, renovation and equipping of an existing building
to convert it for public library purposes;
WHEREAS, the Board of Supervisors of the County (the “Board”) desires to refund the
portion of the outstanding 2018A Bond allocable to the 2018 Landfill Project (such refunded
portion, the “Refunded 2018A Landfill Installments”) to (a) change the security for such financing
from a pledge of subject-to-appropriation lease payments to a pledge of revenues of the County’s
solid waste system (the “System”) and (b) afford the County greater flexibility with respect to the
operation, management and use of the System;
WHEREAS, the Board desires to refund the portion of the outstanding 2018A Bond
allocable to the 2018 Compactor Project (such refunded portion, the “Refunded 2018A Compactor
Installments” and, together with the Refunded 2018A Landfill Installments, the “Refunded 2018A
Installments”) to change the security for such financing from a pledge of subject-to-appropriation
lease payments to a pledge of revenues of the System on the condition that the refunding of the
Refunded 2018A Compactor Installments achieve an aggregate net present value debt service
savings of not less than 3.00% of the refunded par amount of the Refunded 2018A Compactor
Installments (the “Targeted Savings”);
WHEREAS, the Board also desires to finance various capital projects related to the
County’s solid waste system (the “System”), including (without limitation) (a) opening a new cell
in the County’s landfill and acquiring equipment for use at the landfill (the “2021 Landfill Project”)
and (b) constructing and equipping three new convenience centers and improving an existing
convenience center (collectively, the “2021 Convenience Center Project” and, together with the
2021 Landfill Project, the “2021 Projects”);
5.c.b
Packet Pg. 44 Attachment: 2021-08-04 VRA Revenue Bonds (2697 : Solid Waste Financing-VRA Resolution; (Staff Contact: Kimberly G. Va)
2
WHEREAS, the Board has determined to issue two solid waste system revenue and
refunding bonds (the “Bonds” as further described in Section 3 herein) to (a) refinance the 2018
Landfill Project on a federally taxable basis, (b) refinance the 2018 Compactor Site Project on a
federally tax-exempt basis, (c) finance the 2021 Landfill Project on a federally taxable basis and
(d) finance the 2021 Convenience Center Project on a federally tax-exempt basis;
WHEREAS, the Board has determined to provide additional security for the Bonds by
entering into a non-binding undertaking to consider annual appropriations in amounts sufficient to
pay debt service on the Bonds to the extent revenues of the System are insufficient therefor;
WHEREAS, the County has applied to the Virginia Resources Authority (“VRA”) for the
purchase of the Bonds, and VRA has indicated its willingness to purchase the Bonds from the
proceeds of one or more series of its Infrastructure and State Moral Obligation Revenue Bonds
(Virginia Pooled Financing Program) (collectively, the “VRA Bonds”) in accordance with the
terms of two Local Bond Sale and Financing Agreements to be dated as of a date specified by
VRA (each a “Financing Agreement” and, collectively, the “Financing Agreements”), between
VRA and the County, forms of which have been made available prior to this meeting;
WHEREAS, the Financing Agreements shall indicate that the aggregate amount of VRA
Bond proceeds requested will equal the sum of (a) $7,186,230 to finance the 2021 Projects plus
(b) an amount sufficient to refund the Refunded 2018A Installments and pay the related costs of
issuance and refunding, which amount may be revised at the written request of the County prior to
VRA’s bond pricing if approved by VRA (such final amount, the “Proceeds Requested”);
WHEREAS, VRA has advised the County that VRA’s objective is to pay the County a
purchase price for the Bonds (the “Purchase Price Objective”) that, in VRA’s judgment, reflects
its market value taking into consideration the Proceeds Requested, the Targeted Savings and such
other factors as the purchase price received by VRA for the VRA Bonds, the issuance costs of the
VRA Bonds (consisting of the underwriters’ discount and other costs incurred by VRA and
collectively referred to herein as the “VRA Costs”) and other market conditions relating to the sale
of the VRA Bonds;
WHEREAS, such factors are expected to result in the County’s receiving a purchase price
other than the par amount of the Bonds, and, consequently, (a) the aggregate principal amount of
the Bonds may be greater than or less than the Proceeds Requested in order to receive an amount
of proceeds that is substantially equal to the Proceeds Requested, or (b) if the maximum authorized
principal amount of the Bonds set forth in Section 3 of this Resolution does not exceed the
Proceeds Requested by at least the amount of the VRA Costs and any original issue discount, the
amount to be paid to the County, given the Purchase Price Objective and market conditions, will
be less than the Proceeds Requested; and
WHEREAS, the Financing Agreements will provide that the terms of the Bonds may not
exceed the parameters set forth below in Section 3;
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF SUPERVISORS OF
PITTSYLVANIA COUNTY, VIRGINIA:
5.c.b
Packet Pg. 45 Attachment: 2021-08-04 VRA Revenue Bonds (2697 : Solid Waste Financing-VRA Resolution; (Staff Contact: Kimberly G. Va)
3
1. Issuance of Bonds. Pursuant to the Constitution and statutes of the Commonwealth
of Virginia, including the Public Finance Act of 1991, the Board hereby authorizes and provides
for the issuance and sale of (a) a solid waste system revenue and refunding bond (the “2021A
Bond”) to provide funds to (i) refinance the 2018 Landfill Project by refunding the Refunded
2018A Landfill Installments, (ii) finance the 2021 Landfill Project and (iii) pay the related costs
of issuance and refunding and (b) a solid waste system revenue and refunding bond (the “2021B
Bond”) to provide funds to (i) refinance the 2018 Compactor Site Project by refunding the
Refunded 2018A Compactor Installments, (ii) finance the 2021 Convenience Center Project and
(iii) pay the related costs of issuance and refunding.
2. Authorization of Financing Agreements. The forms of the Financing
Agreements made available prior to this meeting are hereby approved. The Chairman and Vice
Chairman of the Board and the County Administrator, any of whom may act, are authorized to
execute and deliver the Financing Agreements in substantially such forms, with such completions,
omissions, insertions and changes not inconsistent with this Resolution as may be approved by the
Chairman or Vice Chairman or the County Administrator, whose approval shall be evidenced
conclusively by the execution and delivery thereof. The issuance and sale of the Bonds to VRA
shall be upon the terms and conditions set forth in the Financing Agreements. The proceeds of the
Bonds shall be applied in the manner set forth in the Financing Agreements. All capitalized terms
used but not defined herein shall have the same meanings as set forth in the Financing Agreements.
3. Bond Details. (a) The 2021A Bond shall be issued as a single, registered bond,
shall be designated “Taxable Solid Waste System Revenue and Refunding Bond, Series 2021A
(Landfill Projects),” shall be numbered RA-1, shall be dated the date that is 30 days prior to the
closing date of the VRA Bonds and shall be purchased with proceeds of or allocated to federally
taxable VRA Bonds. The Board authorizes the issuance and sale of the 2021A Bond on such terms
as shall be determined by VRA subject to VRA’s Purchase Price Objective and the market
conditions described in the Recitals hereof; provided, however, that the 2021A Bond (i) shall be
issued in a principal amount not to exceed $4,000,000, (ii) shall have a “true” interest cost not to
exceed 3.00% (exclusive of “Supplemental Interest” as provided in the Financing Agreement), and
(iii) shall be payable in principal installments ending not later than December 31, 2028.
(b) The 2021B Bond shall be issued as a single, registered bond, shall be designated
“Taxable Solid Waste System Revenue and Refunding Bond, Series 2021B (Convenience Center
Project),” shall be numbered RB-1, shall be dated the date that is 30 days prior to the closing date
of the VRA Bonds and shall be purchased with proceeds of or allocated to federally tax-exempt
VRA Bonds (“Tax-Exempt VRA Bonds”). The Board authorizes the issuance and sale of the
2021B Bond on such terms as shall be determined by VRA subject to VRA’s Purchase Price
Objective and the market conditions described in the Recitals hereof; provided, however, that (i)
the 2021B Bond (A) shall be issued in a principal amount not to exceed $5,000,000, (B) shall have
a “true” interest cost not to exceed 3.00% (exclusive of “Supplemental Interest” as provided in the
Financing Agreement), and (C) shall be payable in principal installments ending not later than
December 31, 2036, and (ii) the refunding of the Refunded 2018A Compactor Installments shall
achieve at least the Targeted Savings. If the Targeted Savings cannot be realized, the County
Administrator is authorized to proceed with the financing of the 2021 Convenience Center Project
upon the terms and within the parameters authorized above.
5.c.b
Packet Pg. 46 Attachment: 2021-08-04 VRA Revenue Bonds (2697 : Solid Waste Financing-VRA Resolution; (Staff Contact: Kimberly G. Va)
4
(c) Subject to the preceding terms, the Board further authorizes the County
Administrator to accept the final terms presented by VRA, including (i) the final principal amounts
of the Bonds, (ii) the amortization schedules (including the principal installment dates and
amounts) for the Bonds and (iii) the optional and extraordinary redemption provisions, if any, of
the Bonds, all in such manner as the County Administrator shall determine to be in the best interests
of the County.
(d) As set forth in the Financing Agreements, the County agrees to pay such
“Supplemental Interest” and other charges as provided therein, including such amounts as may be
necessary to maintain or replenish the VRA Reserve. The principal of and premium, if any, and
interest on the Bonds shall be payable in lawful money of the United States of America.
4. Payment and Redemption Provisions. The principal of and premium, if any, and
interest on each Bond shall be payable as set forth in such Bond and the applicable Financing
Agreement. The County may, at its option, redeem, prepay or refund each Bond upon the terms
established by VRA in the applicable Financing Agreement.
5. Execution and Form of Bonds. The Bonds shall be signed by the Chairman or
Vice Chairman of the Board, and the County’s seal shall be affixed thereon and attested by the
Clerk of Board. The Bonds shall be issued initially as typewritten bonds in substantially the form
of Exhibit A attached hereto, with such completions, omissions, insertions and changes not
inconsistent with this Resolution as may be approved by such officers, whose approval shall be
evidenced conclusively by the execution and delivery of the Bonds.
6. Pledge of Revenues. (a) Subject to the right of the County to apply Revenues of
the System to the payment of Operation and Maintenance Expenses, the County irrevocably
pledges the Revenues for the payment of principal of and premium, if any, and interest on the
Bonds.
(b) The County is required to fix and collect rates, fees and other charges for the use of
and for services furnished or to be furnished by the System and will from time to time revise such
rates, fees and other charges, or provide other legally available funds, so that in each Fiscal Year
the Net Revenues Available for Debt Service, and any such other funds provided by the County,
will equal at least 100% of the amount required during the Fiscal Year to pay principal of and
premium, if any, and interest on the Bonds and all other indebtedness of the County payable from
Revenues, including, without limitation, indebtedness under leases which are treated as capital
leases under generally accepted accounting principles.
(c) Nothing in the Bonds, the Financing Agreements or this Resolution shall be deemed
to constitute a pledge of the faith and credit of the Commonwealth of Virginia or any of its political
subdivisions, including the County. The issuance of the Bonds shall not directly, indirectly or
contingently obligate the Commonwealth of Virginia or any of its political subdivisions, including
the County, to pledge its faith and credit or levy any taxes for the payment of the principal of or
premium, if any, or interest on the Bonds or other costs incident thereto or make any appropriation
for its payment except from the revenues and other funds pledged for such purpose. Additional
bonds secured on a parity as to the pledge of the Revenues with the Bonds may be issued on terms
provided in the Financing Agreements.
5.c.b
Packet Pg. 47 Attachment: 2021-08-04 VRA Revenue Bonds (2697 : Solid Waste Financing-VRA Resolution; (Staff Contact: Kimberly G. Va)
5
7. Support Agreement. The Board acknowledges that, in the event the Revenues
pledged under the Financing Agreements are not sufficient to (a) satisfy the rate covenant set forth
in the Financing Agreements and (b) pay any amounts due under the Financing Agreements, the
Board agrees to a non-binding undertaking to consider annual appropriations in amounts sufficient
to satisfy such deficiencies, all as set forth in the Financing Agreements.
8. Preparation of Printed Bonds. The County shall initially issue the Bonds in
typewritten form. Upon request of the registered owner and upon presentation of a Bond at the
office of the Registrar (as hereinafter defined), the County shall arrange to have prepared, executed
and delivered in exchange as soon as practicable the applicable Bond in printed form in a principal
amount equal to the unpaid principal of such Bond in typewritten form and of the same form and
maturity and registered in such names as requested by the registered owner or its duly authorized
attorney or legal representative. The printed Bond may be executed by manual or facsimile
signature of the Chairman or Vice Chairman of the Board and the County’s seal affixed thereto
and attested by manual or facsimile signature of the Clerk of the Board; provided, however, that if
both such signatures are facsimiles, no Bond shall be valid until it has been authenticated by the
manual signature of the Registrar and the date of authentication noted thereon. The typewritten
Bond surrendered in any such exchange shall be canceled.
9. Registration and Transfer of the Bonds. The County appoints the County
Treasurer as paying agent and registrar (the “Registrar”) for the Bonds. If deemed to be in the best
interests of the County, the County Administrator may at any time appoint a qualified bank or trust
company as successor Registrar. Upon surrender of a Bond at the office of the Registrar, together
with an assignment duly executed by the registered owner or its duly authorized attorney or legal
representative in such form as shall be satisfactory to the Registrar, the County shall execute, and
the Registrar shall authenticate and deliver in exchange, a new Bond or Bonds having an equal
aggregate principal amount, of the same form and maturity, bearing interest at the same rates and
registered in such name as requested by the then registered owner or its duly authorized attorney
or legal representative. Any such exchange shall be at the expense of the County, 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.
The Registrar shall treat the registered owner of the Bonds as the person or entity
exclusively entitled to payment of principal thereof and premium, if any, and interest thereon, and
the exercise of all other rights and powers of the owner of the Bonds, except that regular
installments of principal and interest shall be paid to the person or entity shown as owner on the
registration books on the 15th day of the month preceding each payment date.
10. Mutilated, Lost or Destroyed Bonds. If a Bond has been mutilated, lost or
destroyed, the County shall execute and deliver a new Bond of like date and tenor in exchange and
substitution for, and upon cancellation of, such mutilated Bond or in lieu of and in substitution for
such lost or destroyed Bond; provided, however, that the County shall so execute and deliver only
if the registered owner has paid the reasonable expenses and charges of the County in connection
therewith and, in the case of a lost or destroyed Bond, (a) has filed with the County evidence
satisfactory to the County that such Bond was lost or destroyed and (b) has furnished to the County
satisfactory indemnity.
5.c.b
Packet Pg. 48 Attachment: 2021-08-04 VRA Revenue Bonds (2697 : Solid Waste Financing-VRA Resolution; (Staff Contact: Kimberly G. Va)
6
11. Preparation and Delivery of Bonds. The officers of the County are authorized
and directed to take all proper steps to have the Bonds prepared and executed in accordance with
their terms and to deliver them to VRA as the purchaser thereof upon receipt of the purchase prices
from VRA as set forth in the Financing Agreements.
12. Tax Compliance Agreement. Such officers of the County as may be requested
are authorized and directed to execute and deliver a nonarbitrage certificate and tax compliance
agreement (the “Tax Compliance Agreement”) in a form not inconsistent with this Resolution as
may be approved by the officers of the County executing such document, whose approval shall be
evidenced conclusively by the execution and delivery thereof.
13. Arbitrage Covenants. The County covenants that it shall not take or omit to take
any action the taking or omission of which will cause the Tax-Exempt VRA Bonds to be “arbitrage
bonds” within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, and
regulations issued pursuant thereto (the “Code”), or otherwise cause interest on the Tax-Exempt
VRA Bonds to be includable in the gross income of the registered owner thereof under existing
law. Without limiting the generality of the foregoing, the County shall comply with any provision
of the Tax Compliance Agreement 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 gross proceeds of the 2021B
Bond, unless the County receives an opinion of nationally recognized bond counsel that
compliance with any such covenant is not required to prevent interest on the Tax-Exempt VRA
Bonds from being included in the gross income for federal income tax purposes of the registered
owners thereof under existing law. The County shall pay any such required rebate from legally
available funds.
14. Private Activity Bond Covenant. The County covenants that it shall not permit
the proceeds of the 2021B Bond or the facilities financed therewith to be used in any manner that
would result in (a) 5% or more of such proceeds or such facilities being used in a trade or business
carried on by any person other than a governmental unit, as provided in Section 141(b) of the Code,
(b) 5% or more of such proceeds or such facilities 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 compliance with any such covenant is not required to prevent the interest on the Tax-Exempt
VRA Bonds from being includable in the gross income for federal income tax purposes of the
registered owners thereof under existing law, the County need not comply with such covenant to
the extent provided in such opinion.
15. Official Statement. The County authorizes and consents to the inclusion of
information with respect to the County contained in VRA’s Preliminary Official Statement and
VRA’s Official Statement in final form, both prepared in connection with the sale of the VRA
Bonds. If appropriate, such disclosure documents shall be distributed in such manner and at such
times as VRA shall determine. The County Administrator is authorized and directed to take such
actions as may be necessary or appropriate to aid VRA in ensuring compliance with Securities and
Exchange Commission Rule 15c2-12.
5.c.b
Packet Pg. 49 Attachment: 2021-08-04 VRA Revenue Bonds (2697 : Solid Waste Financing-VRA Resolution; (Staff Contact: Kimberly G. Va)
7
16. Prepayment of the Refunded 2018A Installments. The County Administrator is
authorized and directed to take or direct the Authority to take all proper steps to prepay the
Refunded 2018A Installments and to prepare and deliver any such notices and correspondence
necessary therefor. The Chairman and Vice Chairman of the Board and the County Administrator,
any of whom may act, are authorized to approve changes to the 2018A Bond and related financing
documents, including the execution and delivery of an allonge to the 2018A Bond and any
amendments to the related financing documents, as may be necessary to provide for the unrefunded
portion of the 2018A Bond. The Clerk of the Board is authorized to affix the County’s seal on any
such documents and attest the same.
17. SNAP Investment Authorization. The County has heretofore received and
reviewed the Information Statement describing the State Non-Arbitrage Program of the
Commonwealth of Virginia (“SNAP”) and the Contract Creating the State Non-Arbitrage Program
Pool (the “Contract”), and the Board hereby determines to authorize the County Treasurer to use
SNAP in connection with the investment of the proceeds of the 2021B Bond. The Board
acknowledges the Treasury Board of the Commonwealth of Virginia is not, and shall not be, in
any way liable to the County in connection with SNAP, except as otherwise provided in the
Contract.
18. Other Actions. All other actions of officers of the County in conformity with the
purposes and intent of this Resolution and in furtherance of the issuance and sale of the Bonds, the
financing of the 2021 Projects and the refinancing of the 2018 Projects are ratified, approved and
confirmed. The officers of the County are authorized and directed to execute and deliver all
certificates and other instruments and to take all such further action as may be considered necessary
or desirable in connection with the issuance, sale and delivery of the Bonds, the financing of the
2021 Projects and the refinancing of the 2018 Projects.
19. Repeal of Conflicting Resolutions. All resolutions or parts of resolutions in
conflict herewith are repealed.
20. Effective Date. This Resolution shall take effect immediately.
5.c.b
Packet Pg. 50 Attachment: 2021-08-04 VRA Revenue Bonds (2697 : Solid Waste Financing-VRA Resolution; (Staff Contact: Kimberly G. Va)
A-1
Exhibit A - Form of Bond
Interest on this bond is intended by the issuer thereof to be included in gross income
for federal income tax purposes.
REGISTERED REGISTERED
R[A/B]-1 ______________, 2021
UNITED STATES OF AMERICA
COMMONWEALTH OF VIRGINIA
PITTSYLVANIA COUNTY
Taxable Solid Waste System Revenue and Refunding Bond
Series 2021[A/B] ([Landfill Projects/Convenience Center Project])
Pittsylvania County, Virginia (the “County”), a political subdivision of the Commonwealth
of Virginia, for value received, acknowledges itself in debt and promises to pay to the Virginia
Resources Authority, or its registered assigns or legal representative (“VRA”), solely from the
sources hereinafter described and pledged to the payment of this bond the principal sum of
_________________________ DOLLARS ($_________). Principal of this bond shall be payable
in annual installments in the amounts and on the dates set forth in Schedule I attached hereto.
Interest on this bond shall be payable on each April 1 and October 1, commencing ______ ___,
20__, computed on the basis of a 360-day year of twelve 30-day months at the rates set forth in
Schedule I.
If any installment of principal of or interest on this bond is not paid to the registered owner
of this bond within five days after its due date, the County shall pay to VRA a late payment charge
in an amount equal to five percent (5.0%) of the overdue installment.
Subject to the provisions of the Local Bond Sale and Financing Agreement dated as of
September 17, 2021 (the “Financing Agreement”), between VRA and the County, so long as this
bond is held by or for the account of VRA or its registered assigns or legal representative, interest
is payable by (i) check or draft mailed to the registered owner of this bond at the address that
appears on the 15th day of the month preceding each interest payment date on the registration
books kept by the County Treasurer, who has been appointed registrar and paying agent, or any
successor bank or trust company (the “Registrar”) or (ii) wire transfer pursuant to the most recent
wire instructions received by the Registrar from such registered owner. Principal of and premium,
if any, and interest on this bond shall be payable in lawful money of the United States of America.
In case any payment date on this bond shall not be a Business Day (as defined below), then
payment of principal, premium, if any, and interest need not be made on such date, but may be
made on the next succeeding Business Day, and, if made on such next succeeding Business Day,
no additional interest shall accrue for the period after such payment date. “Business Day” means
any Monday, Tuesday, Wednesday, Thursday or Friday on which commercial banking institutions
generally are open for business in New York and Virginia.
5.c.b
Packet Pg. 51 Attachment: 2021-08-04 VRA Revenue Bonds (2697 : Solid Waste Financing-VRA Resolution; (Staff Contact: Kimberly G. Va)
A-2
This bond has been authorized by a resolution adopted by the Board of Supervisors of the
County (the “Board”) on August 17, 2021 (the “Resolution”), and is issued pursuant to the
Constitution and statutes of the Commonwealth of Virginia, including the Public Finance Act of
1991, and the Financing Agreement. Proceeds of this bond will be used to provide funds to (a)
finance various capital projects related to the County’s solid waste system (the “System”),
including (without limitation) [opening a new cell in the County’s landfill and acquiring equipment
for use at the landfill] [constructing and equipping three new convenience centers and improving
an existing convenience center], (b) refund a portion of the outstanding principal installments of
the $1,803,802 Lease Revenue Bond (County Projects), Series 2018A (Federally Tax-Exempt),
issued by the Industrial Development Authority of Pittsylvania County, Virginia, for the benefit
of the County, and (c) pay the related costs of issuance and refunding.
Subject to the County’s right to apply Revenues (as defined in the Financing Agreement)
to the payment of Operation and Maintenance Expenses (as defined in the Financing Agreement),
Revenues are irrevocably pledged for the payment of principal of and premium, if any, and interest
on this bond and the payment and performance of the County’s obligations under the Financing
Agreement. The pledge of Revenues securing this bond is on a parity with the pledge of Revenues
securing the County $[_____] Taxable Solid Waste System Revenue and Refunding Bond, Series
2021[A/B] ([Landfill Projects/Convenience Center Project]) (the “Parity Bond”). Additional
bonds secured on a parity as to the pledge of the Revenues with this bond and the Parity Bond may
be issued on terms provided in the Financing Agreement and the financing agreement relating to
the Parity Bond.
The Financing Agreement also contains a non-binding undertaking of the Board to consider
annual appropriations in amounts sufficient to pay amounts due under this bond or the Financing
Agreement to the extent Revenues are insufficient therefor.
If any failure of the County to pay all or any portion of any required payment of the
principal of or premium, if any, or interest on this bond results in a withdrawal from or drawing
on any VRA Reserve (as defined in the Financing Agreement), the interest rates applicable to this
bond shall be increased to interest rates sufficient to reimburse the VRA Reserve for any foregone
investment earnings on the funds withdrawn therefrom and pay any interest, fees or penalties
assessed as a result of the withdrawal from or the drawing on the VRA Reserve. The increment
of interest payable pursuant to the increase in rates shall be referred to as “Supplemental Interest.”
The term “interest” as used in this bond shall include Supplemental Interest, when and if payable.
The County’s obligation to pay Supplemental Interest shall commence on the date of the
withdrawal or drawing of funds from the VRA Reserve occasioned by the County’s failure to pay
a required payment or portion thereof as described above (the “Supplemental Interest
Commencement Date”). The County’s obligation to pay Supplemental Interest shall terminate on
the date on which the County makes all payments required but outstanding since the date of the
initial failure to pay (the “Supplemental Interest Termination Date”). From the Supplemental
Interest Commencement Date to the Supplemental Interest Termination Date, Supplemental
Interest shall be due and payable on the regularly scheduled interest payment dates provided for in
this bond. As soon as reasonably possible after the Supplemental Interest Commencement Date
and before the next regularly scheduled interest payment date provided for in this bond, VRA shall
deliver to the County a certificate as to the increase in interest rates and the amount of
5.c.b
Packet Pg. 52 Attachment: 2021-08-04 VRA Revenue Bonds (2697 : Solid Waste Financing-VRA Resolution; (Staff Contact: Kimberly G. Va)
A-3
Supplemental Interest. The certificate shall set forth in reasonable detail the basis for the increase
in interest rates and the manner of calculation of the increase and the amount of Supplemental
Interest. Such certificate shall be conclusive (absent manifest error) as to the interest rate increase
and amount of Supplemental Interest set forth therein. In determining the interest rate increase
and the amount of Supplemental Interest, VRA may use any reasonable averaging and attribution
methods.
This bond may be redeemed, prepaid or refunded at the option of the County upon the
terms set forth in the Financing Agreement and the Resolution.
This bond is issuable as a fully registered bond. Upon surrender of this bond at the
Registrar’s office, together with an assignment duly executed by the registered owner or such
owner’s duly authorized attorney or legal representative in such form as shall be satisfactory to the
Registrar, the County shall execute, and the Registrar shall authenticate and deliver in exchange,
a new bond or bonds in the manner and subject to the limitations and conditions provided in the
Resolution, having an equal aggregate principal amount, in authorized denominations, of the same
series, form and maturity, bearing interest at the same rates and in the same manner, and registered
in such names as requested by the then registered owner of this bond or such owner’s duly
authorized attorney or legal representative. Any such exchange shall be at the County’s expense,
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 to it.
The Registrar shall treat the registered owner of this bond as the person exclusively entitled
to payment of principal hereof and premium, if any, and interest hereon and the exercise of all
other rights and powers of the owner hereof, except that regular installment payments of principal
and interest shall be made to the person shown as the owner on the registration books as of the
15th day of the month preceding each payment date.
All acts, conditions and things required by the Constitution and statutes of the
Commonwealth of Virginia to happen, exist or be performed precedent to and in connection with
the issuance of this bond have happened, exist and have been performed.
5.c.b
Packet Pg. 53 Attachment: 2021-08-04 VRA Revenue Bonds (2697 : Solid Waste Financing-VRA Resolution; (Staff Contact: Kimberly G. Va)
A-4
IN WITNESS WHEREOF, the Board of Supervisors of Pittsylvania County, Virginia, has
caused this bond to be signed by its [Vice] Chairman and the County’s seal to be affixed hereto
and attested by the Clerk of the Board of Supervisors, and this bond to be dated the date first above
written.
(SEAL)
_______________________________________
[Vice] Chairman, Board of Supervisors of
Pittsylvania County, Virginia
ATTEST:
__________________________
Clerk, Board of Supervisors of
Pittsylvania County, Virginia
5.c.b
Packet Pg. 54 Attachment: 2021-08-04 VRA Revenue Bonds (2697 : Solid Waste Financing-VRA Resolution; (Staff Contact: Kimberly G. Va)
A-5
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and transfer(s) unto
______________________________________________________________________________
(please print or typewrite name and address including postal zip code of Transferee)
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF TRANSFEREE
___________________________________
: :
: :
: :
the within bond and all rights thereunder, hereby irrevocably constituting and appointing
_____________________________________________________________________________,
Attorney, to transfer said bond on the books kept for the registration thereof, with full power of
substitution in the premises.
Dated: _________________
Signature Guaranteed
NOTICE: Signature(s) must be guaranteed (Signature of Registered Owner)
by an Eligible Guarantor Institution such as a
Commercial Bank, Trust Company, NOTICE: The signature above must
Securities Broker/Dealer, Credit Union or correspond with the name of the
Savings Association who is a member of a registered owner as it appears on the
medallion program approved by The Securities front of this bond in every particular,
Transfer Association, Inc. without alteration or enlargement or
any change whatsoever.
5.c.b
Packet Pg. 55 Attachment: 2021-08-04 VRA Revenue Bonds (2697 : Solid Waste Financing-VRA Resolution; (Staff Contact: Kimberly G. Va)
A-6
SCHEDULE I TO
PITTSYLVANIA COUNTY, VIRGINIA
TAXABLE SOLID WASTE SYSTEM REVENUE AND REFUNDING BOND
SERIES 2021[A/B] ([LANDFILL PROJECTS/CONVENIENCE CENTER PROJECT])
Principal Principal Principal
Installment Installment Installment Interest
Number Amount Due Date Rate
[to be completed after pricing of VRA Bonds]
036841.0000016 EMF_US 86054097v5
5.c.b
Packet Pg. 56 Attachment: 2021-08-04 VRA Revenue Bonds (2697 : Solid Waste Financing-VRA Resolution; (Staff Contact: Kimberly G. Va)
Revenue
New Money and Refunding
148657619_1 McGuireWoods LLP Draft of 8/11/2021
LOCAL BOND SALE AND FINANCING AGREEMENT
between
VIRGINIA RESOURCES AUTHORITY
and
COUNTY OF PITTSYLVANIA, VIRGINIA
Dated as of September 17, 2021
Virginia Resources Authority
Infrastructure and State Moral Obligation Revenue Bonds
(Virginia Pooled Financing Program)
Series 2021C
5.c.c
Packet Pg. 57 Attachment: Active_148657619_1_Pittsylvania 2021C - Financing Agreement (Solid Waste Revenue) (taxable) (2697 : Solid Waste Financing-
TABLE OF CONTENTS
Page
-i-
ARTICLE I
DEFINITIONS
Section 1.1 Definitions........................................................................................................ 1
Section 1.2 Rules of Construction ...................................................................................... 5
ARTICLE II
REPRESENTATIONS
Section 2.1 Representations by VRA.................................................................................. 5
Section 2.2 Representations by Local Government ............................................................ 6
Section 2.3 Representations Remade as of the Sale Date ................................................... 8
ARTICLE III
PURCHASE OF THE LOCAL BOND
Section 3.1 Purchase of the Local Bond ............................................................................. 8
Section 3.2 Issuance Expenses ............................................................................................ 9
Section 3.3 Schedule 1.1 ..................................................................................................... 9
Section 3.4 Conditions Precedent to Purchase of the Local Bond .................................... 10
ARTICLE IV
USE OF PURCHASE PRICE
Section 4.1 Deposit of Purchase Price; Investment of Amounts in Local Account ......... 11
Section 4.2 Agreement to Accomplish Project ................................................................. 11
Section 4.3 Disbursement of Purchase Price and Earnings .............................................. 12
Section 4.4 No Sufficiency Warranty by VRA; Local Government Required to
Complete Project ............................................................................................ 13
ARTICLE V
PLEDGE AND SECURITY
Section 5.1 Pledge ............................................................................................................. 13
Section 5.2 Rate Covenant ................................................................................................ 14
Section 5.3 Annual Budget of the System ........................................................................ 14
Section 5.4 Qualified Independent Consultant's Report ................................................... 14
Section 5.5 Support Agreement ........................................................................................ 15
ARTICLE VI
PAYMENT AND REDEMPTION OF LOCAL BOND
Section 6.1 Payment of Local Bond and Related Amounts .............................................. 16
Section 6.2 Defeasance and Redemption of Local Bond .................................................. 17
Section 6.3 Payments and Rights Assigned ...................................................................... 18
Section 6.4 Obligations Absolute and Unconditional ....................................................... 18
5.c.c
Packet Pg. 58 Attachment: Active_148657619_1_Pittsylvania 2021C - Financing Agreement (Solid Waste Revenue) (taxable) (2697 : Solid Waste Financing-
TABLE OF CONTENTS (cont.)
Page
-ii-
ARTICLE VII
OPERATION AND USE COVENANTS
Section 7.1 Maintenance ................................................................................................... 19
Section 7.2 Additions and Modifications.......................................................................... 19
Section 7.3 Permits ........................................................................................................... 19
Section 7.4 Use ................................................................................................................. 19
Section 7.5 Inspection and Local Government's Books and Records ............................... 19
Section 7.6 Ownership ...................................................................................................... 19
Section 7.7 Sale or Encumbrance ..................................................................................... 20
Section 7.8 Collection of Revenues .................................................................................. 20
Section 7.9 No Free Service.............................................................................................. 20
Section 7.10 No Competing Service ................................................................................... 20
Section 7.11 Intentionally Omitted ..................................................................................... 21
Section 7.12 Lawful Charges .............................................................................................. 21
Section 7.13 Construction Contractors ............................................................................... 21
Section 7.14 Engineering Services ..................................................................................... 21
ARTICLE VIII
INSURANCE, DAMAGE AND DESTRUCTION
Section 8.1 Insurance ........................................................................................................ 21
Section 8.2 Requirements of Policies ............................................................................... 22
Section 8.3 Notice of Damage, Destruction or Condemnation ......................................... 22
Section 8.4 Damage and Destruction ................................................................................ 22
Section 8.5 Condemnation and Loss of Title .................................................................... 23
ARTICLE IX
SPECIAL COVENANTS
Section 9.1 Intentionally Omitted ..................................................................................... 23
Section 9.2 Maintenance of Existence .............................................................................. 23
Section 9.3 Financial Records and Statements ................................................................. 23
Section 9.4 Certification as to No Default ........................................................................ 24
Section 9.5 Further Assurances......................................................................................... 24
Section 9.6 Assignment by Local Government ................................................................ 24
Section 9.7 Continuing Disclosure ................................................................................... 24
Section 9.8 Other Indebtedness......................................................................................... 27
Section 9.9 Additional Indebtedness................................................................................. 27
Section 9.10 Litigation; Material Change ........................................................................... 29
ARTICLE X
DEFAULTS AND REMEDIES
Section 10.1 Events of Default ........................................................................................... 29
Section 10.2 Acceleration ................................................................................................... 30
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Section 10.3 Other Remedies .............................................................................................. 30
Section 10.4 Delay and Waiver .......................................................................................... 30
ARTICLE XI
MISCELLANEOUS
Section 11.1 State Aid Intercept ......................................................................................... 31
Section 11.2 Successors and Assigns.................................................................................. 31
Section 11.3 Amendments .................................................................................................. 31
Section 11.4 Limitation of Local Government's Liability .................................................. 31
Section 11.5 Applicable Law .............................................................................................. 31
Section 11.6 Severability .................................................................................................... 31
Section 11.7 Notices ........................................................................................................... 32
Section 11.8 Right to Cure Default ..................................................................................... 32
Section 11.9 Term of Agreement ........................................................................................ 32
Section 11.10 Counterparts ................................................................................................... 32
Exhibit A Form of Local Bond
Exhibit B Description of the Project
Exhibit C Pending or Threatened Actions, Suits, Proceedings, or Investigations
Exhibit D Form of Requisition
Exhibit E Operating Data
Exhibit F Form of Opinion of Counsel to the Local Government
Exhibit G Form of Certification as to No Default
Exhibit H Description of Special Use Arrangements
Exhibit I Form of Annual Budget
Exhibit J Existing Parity Bonds
Schedule 1.1 Final Terms
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LOCAL BOND SALE AND FINANCING AGREEMENT
This LOCAL BOND SALE AND FINANCING AGREEMENT is dated as of
September 17, 2021, and is between the VIRGINIA RESOURCES AUTHORITY, a public body
corporate and a political subdivision of the Commonwealth of Virginia ("VRA"), and the
COUNTY OF PITTSYLVANIA, VIRGINIA, a political subdivision of the Commonwealth of
Virginia (the "Local Government").
A. VRA intends to issue its Related Series of VRA Bonds, as hereinafter defined, and
to use a portion of the proceeds thereof to acquire from the Local Government the Local Bond, as
hereinafter defined.
B. VRA and the Local Government wish to set forth herein certain terms, conditions
and provisions related to the purchase of the Local Bond, the application of the proceeds thereof,
the payment of the debt service thereon and the security therefor, and the use and maintenance of
the Related Financed Property, as hereinafter defined.
NOW, THEREFORE, VRA and the Local Government agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Each capitalized term contained in this Agreement has the
meaning set forth below:
"2018 Local Bond" means the IDA's $1,803,802 Lease Revenue Bond (County Projects),
Series 2018A dated [________], 2018.
"2021C Acquisition Fund" has the meaning set forth in the Related Supplemental Series
Indenture.
"Act" means the Virginia Resources Authority Act, Chapter 21, Title 62.1 of the Code of
Virginia of 1950, as amended.
"Agreement" means this Local Bond Sale and Financing Agreement dated the date first
written above, between VRA and the Local Government, as modified, altered, amended or
supplemented in accordance with the terms hereof.
"Annual Budget" means the budget of the System for each Fiscal Year.
"Business Day" means any day on which commercial banking institutions are generally
open for business in New York, New York and Richmond, Virginia.
"Closing Date" means November 17, 2021 or such other date as may be determined by
VRA.
"Consulting Engineer" means the Local Engineer or the Outside Engineer.
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"Effective Date" means September 17, 2021, which is the deadline for the Local
Government to provide an executed copy of this Agreement to VRA.
"Event of Default" has the meaning set forth in Section 10.1.
"Existing Parity Bonds" has the meaning set forth in Section 2.2(n).
"Financing Parameters" means the parameters established by the governing body of the
Local Government regarding the terms and conditions of the Local Bond, which may include a
maximum par amount, maximum "true" interest cost or targeted savings.
"Fiscal Year" means the 12-month period beginning July 1 of one year and ending on
June 30 of the following year, or if the Local Government has established another 12-month period
as its annual accounting period such other 12-month period.
"Government Obligations" means direct obligations of, or obligations the payment of
the principal of and interest on which is unconditionally guaranteed by, the United States of
America.
"IDA" means the Industrial Development Authority of Pittsylvania County, Virginia.
"Local Account" means the local account established for the Local Bond within the
2021C Acquisition Fund.
"Local Authorization" means the bond resolution adopted on August 17, 2021 by a
majority of the members of the governing body of the Local Government approving (i) the
transactions contemplated by and authorizing the execution and delivery of this Agreement and
(ii) the execution, issuance and sale of the Local Bond subject to the Financing Parameters.
"Local Bond" means the Local Government's Taxable Solid Waste System Revenue and
Refunding Bond, Series 2021A (Landfill Projects), issued in the original principal amount set forth
in Schedule 1.1, as such bond may be amended or modified.
"Local Engineer" means an officer or employee of the Local Government so designated
in writing by a Local Representative, which officer or employee (i) is licensed as a professional
engineer in Virginia, (ii) has recognized standing and experience in the design and construction of
facilities similar to the Project and (iii) is subject to VRA's reasonable approval.
"Local Government" means the County of Pittsylvania, Virginia.
"Local Representative" means (i) the Chairman or Vice Chairman of the Local
Government, (ii) the Administrator of the Local Government and (iii) any other official or
employee of the Local Government authorized by resolution of the governing body of the Local
Government to perform the act or sign the document in question.
"Master Indenture" means the Master Indenture of Trust dated as of December 1, 2003,
between VRA and the Trustee, as modified, altered, amended and supplemented in accordance
with its terms.
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"Net Revenues Available for Debt Service" means the Revenues less amounts necessary
to pay Operation and Maintenance Expenses.
"Operation and Maintenance Expenses" means the costs of operating and maintaining
the System determined under generally accepted accounting principles, exclusive of (i) interest on
any debt payable from Revenues, (ii) depreciation and other items not requiring the expenditure
of cash, (iii) any amounts expended for capital replacements, repairs and maintenance not
recurring either annually or biannually, depending on the customary practice of performing
operation and maintenance, or reserves therefor, and (iv) reserves for administration, operation
and maintenance occurring in the normal course of business.
"Outside Engineer" means a firm of independent consulting engineers with recognized
standing in the field of water and sewer engineering and licensed as professional engineers in
Virginia that the Local Government designates in writing, subject to VRA's reasonable approval.
"Parity Bonds" means the bonds and other obligations of the Local Government secured
by a pledge of Revenues on a parity with the lien of the pledge of Revenues that secures the Local
Bond.
"Proceeds Requested" means $[________] plus an amount necessary to provide for the
escrow or pay off related to the Refunded Bond, subject to the Financing Parameters, together with
an amount to pay related costs of issuance or such other amount requested in writing by the Local
Government and approved by VRA prior to the Sale Date.
"Project" means the project described in Exhibit B.
"Project Budget" means the budget for the Project set forth in Schedule 1.1.
"Project Costs" means the costs of the Project to the extent such costs are included in the
definition of "cost" set forth in Section 62.1-199 of the Act, and includes the refunding of
obligations of VRA or the Local Government issued to finance or refinance "costs" set forth in
Section 62.1-199 of the Act.
"Purchase Price" has the meaning set forth in Schedule 1.1 and represents the amount
received by the Local Government from the sale of the Local Bond to VRA. The Purchase Price
of the Local Bond will be determined by adding to or subtracting from the par amount of the Local
Bond the Local Government's share of the net original issue premium or discount on the Related
Series of VRA Bonds and by subtracting from the par amount of the Local Bond the Local
Government's share of VRA's expenses as set forth in Section 3.2 and the Local Government's
share of the deposit on the Closing Date to any applicable VRA Reserve. It is acknowledged that
the Purchase Price does not include any accrued interest on the Local Bond from its dated date to
the Closing Date.
"Qualified Independent Consultant" means an independent professional consultant
having the skill and experience necessary to provide the particular certificate, report or approval
required by the provision of this Agreement in which such requirement appears, including without
limitation an Outside Engineer and an independent certified public accountant or firm of
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independent certified public accountants; provided, however, all Qualified Independent
Consultants are subject to the reasonable approval of VRA.
"Refunded Bond" means the outstanding amount of the 2018 Local Bond ot be refunded
as agreed in writing by the Local Government and VRA prior to the Sale Date.
"Registrar" means the officer or employee of the Local Government designated under the
Local Authorization to maintain the registration books for the Local Bond.
"Related Financed Property" means the land, building, equipment and other property,
the acquisition, construction, renovation, or equipping of which was financed by the Local Bond
as part of the Project.
"Related Portion of VRA Bonds" means the portion of the Related Series of VRA Bonds
allocable to the Local Bond (as determined by VRA), including any bonds issued by VRA to
refund such Related Series of VRA Bonds in whole or in part.
"Related Series of VRA Bonds" means the Virginia Resources Authority Infrastructure
and State Moral Obligation Revenue Bonds (Virginia Pooled Financing Program), Series 2021C
(Taxable) (or such other series of Infrastructure and State Moral Obligation Revenue Bonds
(Virginia Pooled Financing Program) that is specified in Schedule 1.1), in the original aggregate
principal amount set forth in Schedule 1.1, and, unless the Local Government receives notice to
the contrary from VRA, any bonds issued by VRA to refund the Related Series of VRA Bonds in
whole or in part.
"Related Supplemental Series Indenture" means the Fifty-Second Supplemental Series
Indenture of Trust dated as of November 1, 2021, between VRA and the Trustee, as modified,
altered, amended and supplemented in accordance with its terms and those of the Master Indenture.
"Revenue Fund" has the meaning set forth in the Master Indenture.
"Revenues" means (i) all rates, fees, rentals, charges and other income properly allocable
to the System under generally accepted accounting principles or resulting from the Local
Government's ownership or operation of the System and all rights to receive the same, whether
now existing or hereafter coming into existence, exclusive of user and other deposits subject to
refund until such deposits have become the Local Government's property, (ii) the proceeds of any
insurance covering business interruption loss relating to the System, (iii) interest on any money or
securities related to the System held by or on behalf of the Local Government, and (iv) any other
income from other sources now or hereafter pledged or specifically made available by or on behalf
of the Local Government to or for the payment of Operation and Maintenance Expenses or debt
service on Parity Bonds.
"Sale Date" means October 27, 2021, or such other date specified in Schedule 1.1.
"Subordinate Debt" means obligations of the Local Government secured by a pledge of
Revenues expressly made subordinate to the pledge securing the Local Bond and any other Parity
Bonds, and any obligations to make deposits related to reserve funds, rebate funds and similar
funds or accounts established for the benefit of the Local Bond or any other Parity Bonds.
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"Supplemental Interest" has the meaning set forth in Section 6.1.
"System" means all plants, systems, facilities, equipment or property owned operated or
maintained by the Local Government and used as the Pittsylvania County Landfill in connection
with the collection, management, disposal, incineration, storage, recycling or conversion into
energy of solid waste as the same may exist from time to time, and includes the Related Financed
Property.
"Trustee" means U.S. Bank National Association, Richmond, Virginia, as trustee under
the Master Indenture and the Related Supplemental Series Indenture, or its successors serving in
such capacity.
"Virginia SNAP" means the Commonwealth of Virginia State Non-Arbitrage Program.
"VRA" means the Virginia Resources Authority, a public body corporate and a political
subdivision of the Commonwealth of Virginia.
"VRA Bonds" means the Related Series of VRA Bonds and any additional bonds issued
under the Master Indenture.
"VRA Reserve" means any one or more of the Capital Reserve Fund, the Infrastructure
Debt Service Reserve Fund, the Operating Reserve Fund, a CRF Credit Facility or an Infrastructure
Revenue DSRF Facility, each as defined in the Master Indenture.
Section 1.2 Rules of Construction. The following rules apply to the construction of
this Agreement unless the context requires otherwise:
(a) Singular words connote the plural number as well as the singular and vice
versa.
(b) Words importing the redemption or calling for redemption of the Local
Bond do not refer to or connote the payment of the Local Bond at its stated maturity.
(c) All references in this Agreement to particular Articles, Sections or Exhibits
are references to Articles, Sections or Exhibits of this Agreement unless otherwise indicated.
(d) The headings and table of contents as used in this Agreement are solely for
convenience of reference and do not constitute a part of this Agreement and do not affect its
meaning, construction or effect.
ARTICLE II
REPRESENTATIONS
Section 2.1 Representations by VRA. VRA represents to the Local Government as
follows:
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(a) VRA is a duly created and validly existing public body corporate and
political subdivision of the Commonwealth of Virginia vested with the rights and powers conferred
upon it under the Act.
(b) VRA has full right, power and authority to (i) issue, sell and deliver the
Related Series of VRA Bonds, (ii) direct the Trustee to use a portion of the proceeds of the Related
Series of VRA Bonds to purchase the Local Bond from the Local Government as contemplated
under the Related Supplemental Series Indenture and this Agreement and (iii) carry out and
consummate all other transactions contemplated by this Agreement.
(c) VRA has duly authorized, executed and delivered this Agreement, and this
Agreement constitutes a legal, valid and binding obligation of VRA enforceable against VRA in
accordance with its terms.
Section 2.2 Representations by Local Government. The Local Government
represents to VRA as follows:
(a) The Local Government is a duly created and validly existing Virginia "local
government" (as defined in Section 62.1-199 of the Act) and is vested with the rights and powers
conferred upon it by Virginia law.
(b) The Local Government has full right, power and authority to (i) adopt the
Local Authorization and execute and deliver this Agreement and all related documents, (ii) issue
and sell the Local Bond to VRA and deliver the Local Bond to the Trustee, (iii) own and operate
the System, (iv) undertake the Project and (v) carry out and consummate all of the transactions
contemplated by the Local Authorization, the Local Bond and this Agreement.
(c) The Local Authorization authorized the execution and delivery of this
Agreement, and this Agreement is in substantially the same form as presented to the Local
Government's governing body at its meeting at which the Local Authorization was adopted. The
Local Authorization was filed in the Circuit Court of the County of Pittsylvania, Virginia, on
August [__], 2021.
(d) The Local Government has obtained all governmental permits, licenses,
registrations, certificates, authorizations and approvals required to have been obtained as of the
Effective Date for the Local Government's (i) adoption of the Local Authorization, (ii) execution
and delivery of this Agreement and the Local Bond, (iii) performance of its obligations under this
Agreement and the Local Bond, (iv) the undertaking of the Project and (v) the operation and use
of the System. The Local Government knows of no reason why any such required governmental
permits, licenses, registrations, certificates, authorizations or approvals not required to be obtained
by the Effective Date cannot be obtained as required in the future.
(e) The Local Government has executed and delivered this Agreement, and this
Agreement constitutes a legal, valid and binding obligation of the Local Government enforceable
against the Local Government in accordance with its terms.
(f) When executed and delivered in accordance with the Local Authorization
and this Agreement, the Local Bond will have been executed and delivered by duly authorized
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officials of the Local Government and will constitute a legal, valid and binding limited obligation
of the Local Government enforceable against the Local Government in accordance with its terms.
(g) The issuance of the Local Bond and the execution and delivery of this
Agreement and the performance by the Local Government of its obligations thereunder are within
the powers of the Local Government and will not conflict with, or constitute a breach or result in
a violation of, (i) to the best of the Local Government's knowledge, any federal or Virginia
constitutional or statutory provision, including the Local Government's charter or articles of
incorporation, if any, (ii) any agreement or other instrument to which the Local Government is a
party or by which it is bound or (iii) any order, rule, regulation, decree or ordinance of any court,
government or governmental authority having jurisdiction over the Local Government or its
property.
(h) The Local Government is not in default in the payment of the principal of
or interest on any of its indebtedness for borrowed money and is not in default under any
instrument under and subject to which any indebtedness for borrowed money has been incurred.
No event or condition has happened or existed, or is happening or existing, under the provisions
of any such instrument, including but not limited to this Agreement, which constitutes, or which,
with notice or lapse of time, or both, would constitute an event of default thereunder.
(i) The Local Government (i) to the best of the Local Government's
knowledge, is not in violation of any existing law, rule or regulation applicable to it in any way
that would have a material adverse effect on its financial condition or its ability to perform its
obligations under the Local Bond or this Agreement and (ii) is not in default under any indenture,
mortgage, deed of trust, lien, lease, contract, note, order, judgment, decree or other agreement,
instrument or restriction of any kind to which the Local Government is a party or by which it is
bound or to which any of its assets is subject that would have a material adverse effect on its
financial condition or its ability to perform its obligations under the Local Bond and this
Agreement. The Local Government's execution and delivery of the Local Bond and this
Agreement and its compliance with the terms and conditions thereof will not conflict with or result
in a breach of or constitute a default under any of the foregoing.
(j) The Local Government reasonably expects that, unless otherwise permitted
by the terms of this Agreement or approved by VRA, the Local Government will own, operate and
control the System at all times during the term of the Local Bond.
(k) Except as set forth in Exhibit C, there has not been served upon nor, to the
best of the Local Government's knowledge, threatened against the Local Government, any actions,
suits, proceedings or investigations of a legal, equitable, regulatory, administrative or legislative
nature (i) affecting the creation, organization or existence of the Local Government or the title of
its officers to their respective offices, (ii) seeking to prohibit, restrain or enjoin the approval,
execution, delivery or performance of the Local Authorization or this Agreement or the issuance
or delivery of the Local Bond, (iii) in any way contesting or affecting the validity or enforceability
of the Local Bond, the Local Authorization, this Agreement or any agreement or instrument
relating to any of the foregoing, (iv) in which a judgment, order or resolution may have a material
adverse effect on the Local Government or its business, assets, condition (financial or otherwise),
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operations or prospects or on its ability to perform its obligations under the Local Authorization,
this Agreement or the Local Bond or (v) affecting the Project.
(l) The financial statements, applications and other information that the Local
Government furnished to VRA in connection with this Agreement fairly and accurately portray
the Local Government's financial condition, as of their dates, and there has been no material
adverse change in the financial condition of the Local Government since the date of the financial
statements provided to VRA in connection with this Agreement.
(m) Nothing that would constitute an Event of Default hereunder has occurred
and is continuing, and no event or condition exists that with the passage of time or the giving of
notice, or both, would constitute an Event of Default hereunder.
(n) A list of all Parity Bonds that are outstanding on the date of this Agreement
is attached as Exhibit J (the "Existing Parity Bonds").
(o) Except for the Existing Parity Bonds, there is no indebtedness of the Local
Government secured by a pledge of Revenues prior to or on a parity with the lien of the pledge of
Revenues that secures the Local Bond.
Section 2.3 Representations Remade as of the Sale Date. (a) It shall be a condition
precedent of VRA's obligation to sell the Related Series of VRA Bonds that the Local
Government's representations and warranties set forth in Section 2.2 be true and accurate in all
respects on the Sale Date.
(b) If prior to the Sale Date, any representation or warranty set forth in Section
2.2 becomes untrue or inaccurate, then the Local Government shall notify VRA within one
Business Day of becoming aware of such facts, and VRA, in its sole and absolute discretion, shall
determine whether to sell VRA Bonds on behalf of the Local Government, which series of VRA
Bonds (if any) to sell on behalf of the Local Government and any additional conditions precedent
to the sale of such VRA Bonds or the purchase of the Local Bond.
ARTICLE III
PURCHASE OF THE LOCAL BOND
Section 3.1 Purchase of the Local Bond. (a) Subject to the terms and conditions and
in reliance upon the representations, warranties and agreements set forth or incorporated herein,
VRA shall purchase, solely from the proceeds of the Related Series of VRA Bonds, all, but not
less than all, of the Local Bond from the Local Government, and the Local Government shall,
subject to the Financing Parameters, sell and deliver to VRA the Local Bond for the Purchase
Price. The Local Government acknowledges that the Purchase Price is determined by VRA, is
subject to VRA's Purchase Price Objective (as defined below) and market conditions as described
below, and is expected to be substantially equal to the Proceeds Requested. The Local Government
shall issue the Local Bond pursuant to the Local Authorization and in substantially the form of
Exhibit A to this Agreement. As a condition of VRA entering into this Agreement, the Local
Government shall deliver to VRA a copy of the Local Authorization as adopted prior to the date
hereof.
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(b) The Local Government acknowledges that VRA has advised the Local
Government that its objective is to pay the Local Government the Purchase Price for its Local
Bond which in VRA's judgment reflects the market value of the Local Bond ("Purchase Price
Objective"), taking into consideration the Financing Parameters, the purchase price received by
VRA for the Related Series of VRA Bonds, the underwriters' discount and other issuance costs of
the Related Series of VRA Bonds and other market conditions relating to the sale of the Related
Series of VRA Bonds. The Local Government further acknowledges that VRA has advised it that
such factors may result in the Local Bond having a value other than par and that in order to receive
an amount of proceeds that is substantially equal to the Proceeds Requested, the Local Government
may need to issue the Local Bond with a par amount that is greater or less than the Proceeds
Requested. The Local Government shall not issue the Local Bond if doing so would violate any
Financing Parameter. The Local Government shall issue the Local Bond at a par amount that
provides, to the fullest extent practicable given VRA's Purchase Price Objective, a Purchase Price
at least equal to the Proceeds Requested, all in accordance with the Local Authorization. The Local
Government acknowledges that the Purchase Price will be less than the Proceeds Requested if any
Financing Parameter prevents VRA from generating a Purchase Price substantially equal to the
Proceeds Requested, based upon VRA's Purchase Price Objective.
Section 3.2 Issuance Expenses. VRA shall pay, or cause to be paid, from the proceeds
of the Related Series of VRA Bonds all expenses incident to the performance of VRA's obligations
under and the fulfillment of the conditions imposed by this Agreement in connection with the
issuance, sale and delivery of the Related Series of VRA Bonds and the purchase of the Local
Bond on the Closing Date, including, but not limited to: (i) the cost, if any, of preparing and
delivering the Related Series of VRA Bonds; (ii) the cost of preparing, printing and delivering the
Preliminary Official Statement and the Official Statement for the Related Series of VRA Bonds
and any amendment or supplement thereto; (iii) the fees and expenses of the financial advisor(s)
and bond counsel to VRA; and (iv) all other costs and expenses incurred by VRA. The Local
Government shall pay all expenses of the Local Government incident to the issuance, sale and
delivery of the Local Bond, including, but not limited to the fees and disbursements of the financial
advisor, counsel and bond counsel to the Local Government from the Purchase Price or other funds
of the Local Government.
Section 3.3 Schedule 1.1. VRA shall complete Schedule 1.1, which shall set forth,
among other things, the principal amount, interest rates, payment schedule and Purchase Price with
respect to the Local Bond and the principal amount of the Related Series of VRA Bonds on or after
the Sale Date. VRA shall deliver the completed Schedule 1.1 to the Local Government and shall
attach Schedule 1.1 to this Agreement. Upon delivery to the Local Government, the completed
Schedule 1.1 shall become a part of this Agreement the same as if it were a part hereof on the
Effective Date.
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Section 3.4 Conditions Precedent to Purchase of the Local Bond. VRA shall not be
required to cause the Trustee to purchase the Local Bond unless:
(a) VRA has received the following, all in form and substance satisfactory to
VRA:
(1) Certified copies of the Local Authorization and all other ordinances
and resolutions of the Local Government relating to this Agreement and the Local Bond,
if any.
(2) A certificate of the appropriate officials of the Local Government
dated the Closing Date as to the matters set forth in Section 2.2 and Section 2.3 (to the
extent applicable), including appropriate certifications regarding this Agreement, and such
other matters as VRA may reasonably require.
(3) Evidence that the Local Government has performed and satisfied all
of the terms and conditions contained in this Agreement to be performed and satisfied by
it as of such date.
(4) An opinion of counsel to the Local Government in substantially the
form attached as Exhibit F.
(5) An opinion of bond counsel to the Local Government in form and
substance reasonably satisfactory to VRA.
(6) Evidence that the Local Government has complied with the
insurance provisions set forth in Section 8.1 and Section 8.2.
(7) The executed Local Bond.
(8) A certificate of the Consulting Engineer giving the Consulting
Engineer's estimate of the construction portion of the total Project Costs to be financed
with the proceeds of the Local Bond, which estimate must be in an amount and otherwise
compatible with the financing plan described in the Project Budget.
(9) A certificate of the Consulting Engineer (i) to the effect that the
Purchase Price and funds available from the other sources specified in the Project Budget
will be sufficient to pay the construction portion of the estimated Project Costs and (ii)
specifying the date the Local Government is expected to complete the Project.
(10) A certificate of a Local Engineer or a Qualified Independent
Consultant, including supporting documentation, to the effect that during the first two
complete Fiscal Years following the estimated completion date of the Project, the projected
Net Revenues Available for Debt Service will satisfy the Local Government's rate covenant
under Section 5.2(a). In providing this certificate, the Outside Engineer or Qualified
Independent Consultant may take into consideration future System rate increases, provided
that such rate increases have been duly approved by the Local Government's governing
body and any other person or entity required to give approval for the rate increase to
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become effective. In addition, the Outside Engineer or Qualified Independent Consultant
may take into consideration (i) additional future revenues to be derived under existing
contractual arrangements entered into by the Local Government and from reasonable
estimates of growth in the Local Government's consumer base and (ii) transfers in from the
Local Government's general fund as permitted under Section 5.5.
(11) A certificate of the Consulting Engineer to the effect that (i) all
governmental permits, licenses, registrations, certificates, authorizations and approvals for
the undertaking of the Project, as enumerated in the certificate, and the operation and use
of the System required to have been obtained as of the Closing Date have been obtained
and (ii) the Consulting Engineer knows of no reason why any such required governmental
permits, licenses, registrations, certificates, authorizations and approvals for the
undertaking of the Project, as enumerated in the certificate, and the operation and use of
the System cannot be obtained as required in the future.
(12) Evidence that the Local Government is in compliance with the
construction contract provisions set forth in Section 7.13 with respect to any existing
contracts as of the Closing Date.
(13) Evidence that the Local Government has satisfied all conditions
precedent to the issuance of the Local Bond as a "Parity Bond" under the financing
documents for the Existing Parity Bonds.
(14) Such other documentation, certificates and opinions as VRA may
reasonably require as set forth in Schedule 1.1.
(b) The initial purchasers of the Related Series of VRA Bonds have paid in full
and VRA has accepted the purchase price for the Related Series of VRA Bonds on the Closing
Date. It is understood that the sole source of funds to pay the Purchase Price is a portion of the
proceeds of the Related Series of VRA Bonds.
ARTICLE IV
USE OF PURCHASE PRICE
Section 4.1 Deposit of Purchase Price; Investment of Amounts in Local Account.
(a) On the Closing Date, VRA shall cause the Trustee to deposit the Purchase Price into the Local
Account and to apply the Purchase Price and the earnings thereon as set forth in the Related
Supplemental Series Indenture, and this Agreement.
(b) The Local Government acknowledges and consents to the investment of the
Purchase Price and the earnings thereon in Virginia SNAP.
Section 4.2 Agreement to Accomplish Project. (a) The Local Government shall cause
the Project to be acquired, constructed, expanded, renovated, equipped or financed as described in
Exhibit B and in accordance with the Project Budget, and this Agreement, and the plans,
specifications and designs prepared by the Consulting Engineer and approved by the Local
Government. The Local Government shall use its best efforts to complete, or cause to be
completed, the Project by the date set forth in the certificate delivered under Section 3.4(a)(9). The
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Local Government shall obtain the approval of all applicable regulatory agencies of all plans,
specifications and designs for the Project. The Local Government shall maintain complete and
accurate books and records of the Project Costs and permit VRA or the Trustee through their
representatives to inspect such books and records at any reasonable time.
(b) Upon completion of the Project, the Local Government shall promptly
deliver to VRA and the Trustee a certificate signed by a Local Representative and by the
Consulting Engineer stating (i) that the Project has been completed substantially in accordance
with this Article and in substantial compliance with all material applicable laws, ordinances, rules
and regulations, (ii) the date of such completion and (iii) that all certificates of occupancy or other
material permits then necessary for the use, occupancy and operation of the Related Financed
Property have been issued or obtained. Such certificate shall be accompanied by a copy of the
final requisition submitted to the Trustee pursuant to Section 4.3, including Schedule 1 thereto.
(c) The Local Government shall cause the deposit of a portion of the proceeds
of the Local Bond, together with other available funds of the Local Government (if any), to be
transferred to the holder of the Refunded Bond in an amount sufficient to pay the outstanding
principal of and premium, if any, and interest on the Refunded Bond.
(d) If upon completion of the Project and payment of all related costs of
issuance, there is a balance remaining in the Local Account, the Trustee, at the written direction
of the Local Government, shall apply any remaining balance to pay, or reimburse the Local
Government for previously-paid, interest on the Local Bond or in such other manner that is
permitted under the Act and will not, in the opinion of a nationally-recognized bond counsel
delivered to VRA and the Trustee, have an adverse effect on the tax status of the Related Series of
VRA Bonds.
Section 4.3 Disbursement of Purchase Price and Earnings. Except as provided in
Section 4.2(c), the Local Government shall apply the amounts in the Local Account solely and
exclusively to the payment or reimbursement of the Local Government for the Project Costs. Not
more frequently than once per calendar month, the Trustee shall disburse amounts from the Local
Account to the Local Government or as directed by the Local Government upon the Trustee's
receipt of the following:
(a) A requisition (upon which the Trustee and VRA shall be entitled to rely)
signed by a Local Representative and containing all information called for by, and otherwise being
in the form of, Exhibit D (including the Schedules thereto).
(b) Receipts, vouchers, statements, bills of sale or other evidence of payment
of the related Project Costs.
(c) If any requisition includes an item for payment for labor or to contractors,
builders or materialmen:
(1) a certificate, signed by a Consulting Engineer, stating that such work
was actually performed or such materials, supplies or equipment were actually furnished
or installed in or about the construction of the Project; and
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(2) a certificate, signed by a Local Representative (that may rely on
representations of counsel or a title insurance agency reasonably acceptable to VRA),
stating that no notice of any lien, right to lien or attachment upon, or claim affecting the
right to receive payment of, any of the money payable under the requisition to any of the
persons, firms or corporations named in it has been received, or if any notice of any such
lien, attachment or claim has been received, such lien, attachment or claim has been
released or discharged or will be released or discharged upon payment of the requisition.
(d) If any requisition includes an item for payment of the cost of acquisition of
any lands or easements, or any rights or interests in or relating to lands, there shall also be attached
to such requisition:
(1) a certificate, signed by a Consulting Engineer, stating that such
lands, easements, rights or interests are being acquired and are necessary or convenient for
the construction of the Project; and
(2) a certificate, signed by a Consulting Engineer (that may rely on
representations of counsel or a title insurance agency reasonably acceptable to VRA),
stating that upon payment therefor the Local Government will have title in fee simple to,
or easements, rights or interests sufficient for the purposes of, the Project over and through
the subject lands.
Following VRA's approval of each such requisition and accompanying invoice(s) and
certificate(s), which approval will not unreasonably be withheld, the Trustee shall pay the
requisition from the Local Account in accordance with the instructions in such requisition.
The Local Government agrees that any amounts disbursed to it or for its account
from the Local Account pursuant to this Section 4.3 will be (i) immediately applied to
reimburse the Local Government for Project Costs it has already paid or (ii) actually spent
to pay Project Costs not later than five banking days after receipt.
Section 4.4 No Sufficiency Warranty by VRA; Local Government Required to
Complete Project. VRA makes no warranty, either express or implied, that the Purchase Price
will be sufficient to pay all or any particular portion of the Project Costs. If the Purchase Price is
not sufficient to pay in full the cost of the Project, the Local Government shall complete the Project
at its own expense and shall not be entitled to any reimbursement therefor from VRA or any
abatement, diminution or postponement of its payments under the Local Bond or this Agreement.
ARTICLE V
PLEDGE AND SECURITY
Section 5.1 Pledge. Subject to the Local Government's right to apply Revenues to the
payment of Operation and Maintenance Expenses, the Revenues are hereby pledged to secure the
payment of the principal of and premium, if any, and interest on the Local Bond and the payment
and performance of the Local Government's obligations under this Agreement on a parity with any
Parity Bonds. This pledge shall be valid and binding from and after the Closing Date. The
Revenues, as received by the Local Government, shall immediately be subject to the lien of this
pledge without any physical delivery of them or further act. Except as stated above, the lien of
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this pledge shall have priority over all other obligations and liabilities of the Local Government
payable from Revenues, and the lien of this pledge shall be valid and binding against all parties
having claims of any kind against the Local Government regardless of whether such parties have
notice of this pledge. Until the occurrence and continuation of an Event of Default, the Local
Government may, after the application each month of Revenues to the payment of the Operation
and Maintenance Expenses and debt service on the Local Bond and any other Parity Bonds, use
the Revenues for any lawful purpose.
Section 5.2 Rate Covenant. (a) The Local Government shall fix and collect rates, fees
and other charges for the use of and for services furnished or to be furnished by its System, and
will from time to time revise such rates, fees and other charges, or provide other funds, so that in
each Fiscal Year the Net Revenues Available for Debt Service, and such other funds that are
provided by the Local Government, will equal at least 100% of the amount required during the
Fiscal Year to pay the principal of and interest on the Local Bond and all other Parity Bonds.
(b) If, for any reason, the Net Revenues Available for Debt Service, and such
other funds provided by the Local Government, are insufficient to satisfy the covenant set forth in
subsection (a), the Local Government shall (i) on its demand, pay to VRA a rate maintenance
penalty fee in an amount of $5,000, and (ii) within 90 days adjust and increase its rates, fees and
other charges or reduce its Operation and Maintenance Expenses so as to provide sufficient Net
Revenues Available for Debt Service to satisfy such requirement.
(c) On or before the last day of each Fiscal Year, the Local Government shall
review the adequacy of its rates, fees and other charges for the next Fiscal Year, other fund sources
that would be allocated to support the System, and, if such review indicates the Local
Government's rates, fees, other charges and other fund sources will be allocated to support the
system will be insufficient to satisfy the rate covenant in subsection (a), the Local Government
shall promptly increase its rates, fees and other charges or reduce its Operation and Maintenance
Expenses to cure any deficiency.
Section 5.3 Annual Budget of the System. Not less than 15 days before the first day
of each Fiscal Year, the Local Government shall submit to its governing body and to VRA a copy
of a preliminary annual budget, containing all information called for by, and otherwise being in
the form of, Exhibit I to this Agreement, for such Fiscal Year setting forth a schedule of the rates,
fees and other charges to be imposed by the Local Government, the Revenues estimated to be
generated thereby and the expenditures anticipated by the Local Government for operations,
maintenance, repairs, replacements, improvements, debt service and other purposes. The Local
Government shall adopt, prior to the first day of each Fiscal Year, a budget for such Fiscal Year.
The Local Government shall ensure that the adopted budget contains the information required to
be included in the preliminary budget. Such budget as approved by the Local Government's
governing body is referred to in this Agreement as the Annual Budget. The Local Government
may at any time during any Fiscal Year amend the Annual Budget for such Fiscal Year so long as
such amendment does not result in an Event of Default. The Local Government shall promptly
submit to VRA, in an electronic format, a copy of the Annual Budget and any amendments thereto.
Section 5.4 Qualified Independent Consultant's Report. (a) If at the end of any
Fiscal Year, the Local Government is not in compliance with the rate covenant made by the Local
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Government in Section 5.2(a), within 210 days after the end of such Fiscal Year, the Local
Government shall obtain a report from the Qualified Independent Consultant. The Local
Government shall ensure that the report gives advice and makes recommendations as to the proper
maintenance, repair, replacement and operation of the System for the next ensuing Fiscal Year and
estimating the costs thereof as to the rates, fees, and other charges which should be established by
the Local Government to satisfy the rate covenant in Section 5.2(a). The Local Government shall
promptly furnish a copy of such report to VRA and, subject to Section 5.4(b), take measures to
implement the recommendations of the Qualified Independent Consultant within 90 days of
obtaining such report.
(b) If the Local Government determines that the Qualified Independent
Consultant's recommendations are impractical or inappropriate, the Local Government may in lieu
thereof adopt other procedures which the Local Government believes will bring it into compliance
with the rate covenant made by the Local Government in Section 5.2(a) when such measures have
been implemented and become fully effective. Such alternative plan shall be filed with VRA not
later than 30 days after receipt of the Qualified Independent Consultant's report along with a
detailed explanation of the Local Government's reason for rejecting the Qualified Independent
Consultant's recommendations. Notwithstanding anything herein to the contrary, VRA reserves
the right, in its sole discretion, to reject such alternate procedures and, to the extent permitted by
law, require the Local Government to comply with the Qualified Independent Consultant's
recommendations.
Section 5.5 Support Agreement. (a) No later than March 15 of each year beginning
March 15, 2022, the County Administrator of the Local Government (the "County Administrator")
shall notify VRA in writing of the amount by which Net Revenues Available for Debt Service and
other funds available to pay debt service is expected in the next ensuing Fiscal Year to be
insufficient to (i) satisfy the Rate Covenant and (ii) pay any amounts due under this Agreement
(collectively, the "Annual Deficiency Amount").
(b) The Local Government hereby directs the County Administrator to include
the Annual Deficiency Amount in the budget submitted to the governing body of the Local
Government (the "Board") for the next ensuing Fiscal Year. The County Administrator shall
deliver to VRA within ten days after the adoption of the Local Government's budget for each Fiscal
Year, but not later than July 15 of each year, a certificate stating whether the Board has approved
and included an amount equal to the Annual Deficiency Amount for transfer to the System in the
adopted Local Government budget for such Fiscal Year.
(c) If at any time there is a failure of the Local Government to make a payment
of principal of or interest on the Local Bond to pay any amounts due under this Agreement, the
County Administrator shall request an appropriation from the Board in an amount sufficient to
cover the payment default.
(d) The Local Government agrees that the Board will consider each request for
appropriation made pursuant to subsection (c) above at its next regularly scheduled meeting at
which it is possible to satisfy any applicable notification requirement. The Local Government
shall notify VRA promptly after such meeting as to whether the amount so required was
appropriated. If the Board shall fail to make such appropriation, the County Administrator shall
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add the amount of such requested appropriation to the Annual Deficiency Amount reported to the
Board for the next Fiscal Year.
(e) The Local Government shall pay to the Trustee the amount of any
appropriation made pursuant to subsection (c) of this Section. The Local Government and VRA
acknowledge that any amounts appropriated pursuant to this Section are pledged to secure the
payment of principal of and premium, if any, and interest on the Local Bond and amounts due
under this Agreement, as the case may be.
(f) The Board hereby undertakes a non-binding obligation to appropriate such
amounts as may be requested from time to time pursuant to subsections (b) and (c) above, to the
fullest degree and in such manner as is consistent with the Constitution and laws of the
Commonwealth of Virginia. The Board, while recognizing that it is not empowered to make any
binding commitment to make such appropriations in future Fiscal Years, hereby states its intent to
make such appropriations in future Fiscal Years, and hereby recommends that future Boards do
likewise.
ARTICLE VI
PAYMENT AND REDEMPTION OF LOCAL BOND
Section 6.1 Payment of Local Bond and Related Amounts. (a) Until the principal of
and premium, if any, and interest on the Local Bond and all other amounts payable under this
Agreement have been paid in full, the Local Government shall pay from the Revenues to the
Trustee or VRA, as applicable, the following amounts:
(1) to the Trustee, the amounts required by the Local Bond on such dates
and in such manner as provided for in the Local Bond – the term "interest," as used in the
Local Bond and this Agreement, includes Supplemental Interest, when and if payable;
(2) Reserved;
(3) to VRA, on its demand, a late payment penalty in an amount equal
to 5.0% of the payment on the Local Bond not paid within 5 days after its due date;
(4) to the Trustee, the Local Government's share (as determined by
VRA) of the annual fees and expenses of the Trustee, less the Local Government's share
of the net earnings on the Revenue Fund, Infrastructure Revenue Debt Service Fund and
Moral Obligation Debt Service Fund established under the Master Indenture (as determined
by VRA), and the Local Government shall pay such amounts no later than 15 days after
VRA or the Trustee sends to the Local Government a written bill for them; and
(5) to VRA, to the extent permitted by law, the reasonable costs and
expenses, including reasonable attorneys' fees, if any, incurred by VRA in connection with
(i) an Event of Default or default by the Local Government under this Agreement (ii) any
amendment to or discretionary action that VRA undertakes at the request of the Local
Government under this Agreement, any other document related to the Related Series of
VRA Bonds or the Local Bond or (iii) any claim, lawsuit or other challenge to the Local
Bond, the VRA Bonds or this Agreement that arises, at least in part, out of the Local
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Government's authorization of its issuance of the Local Bond, and the Local Government
shall pay such amounts no later than 15 days after VRA or the Trustee sends to the Local
Government a written bill for them.
(b) If any failure of the Local Government to pay all or any portion of any
required payment of the principal of or premium, if any, or interest on the Local Bond results in a
withdrawal from or a drawing on any VRA Reserve, the interest rates applicable to the Local Bond
shall be increased to interest rates sufficient to reimburse the VRA Reserve for any foregone
investment earnings on the funds withdrawn therefrom and pay any interest, fees or penalties
assessed as a result of the withdrawal from or drawing on the VRA Reserve. The increment of
interest payable pursuant to the increase in rates shall be referred to as "Supplemental Interest."
The Local Government's obligation to pay Supplemental Interest shall commence on the date of
the withdrawal or drawing of funds from the VRA Reserve occasioned by the Local Government's
failure to pay a required payment or portion thereof as described above (the "Supplemental Interest
Commencement Date"). The Local Government's obligation to pay Supplemental Interest shall
terminate on the date on which the Local Government makes all payments required but outstanding
since the date of the initial failure to pay (the "Supplemental Interest Termination Date"). From
the Supplemental Interest Commencement Date to the Supplemental Interest Termination Date,
Supplemental Interest shall be due and payable on the regularly scheduled interest payment dates
provided for in the Local Bond. As soon as reasonably possible after the Supplemental Interest
Commencement Date and before the next regularly scheduled interest payment date provided for
in the Local Bond, VRA shall deliver to the Local Government a certificate as to the increase in
interest rates and the amount of Supplemental Interest. The certificate shall set forth in reasonable
detail the basis for the increase in interest rates and the manner of calculation of the increase and
the amount of Supplemental Interest. Such certificate shall be conclusive (absent manifest error)
as to the interest rate increase and amount of Supplemental Interest set forth therein. In
determining the interest rate increase and the amount of Supplemental Interest, VRA may use any
reasonable averaging and attribution methods.
(c) The Local Government shall pay the amounts described above and make
payments as scheduled under the Local Bond despite any amount being withdrawn from or drawn
on a VRA Reserve pursuant to the Master Indenture.
Section 6.2 Defeasance and Redemption of Local Bond. (a) The Local Government
shall not defease or redeem the Local Bond (in whole or in part), except as provided in this Section
6.2.
(b) The Local Government shall satisfy the following conditions prior to the
defeasance and redemption of the Local Bond:
(1) The Local Government shall provide to VRA not less than 60 days'
prior written notice of the deposit of the funds described in (2), (3) and (4) below.
(2) The Local Government shall deposit with the Trustee an amount
sufficient for VRA to establish an escrow of cash and non-callable, non-prepayable
Government Obligations the principal of and interest on which will be sufficient (without
reinvestment) to cause the defeasance under Article XII of the Master Indenture of the
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portion of the Related Portion of VRA Bonds corresponding to the portion of the Local
Bond to be defeased or prepaid (the "Allocated Portion"). The defeasance of the Allocated
Portion may be either to maturity or an earlier redemption date as determined by the Local
Government.
(3) The Local Government shall deposit with VRA cash in an amount
sufficient, as determined by VRA, to pay for a verification report required for the
defeasance of the Allocated Portion under Article XII of the Master Indenture, any costs
incurred by VRA in connection with the redemption, refunding and defeasance of the
Allocated Portion, all amounts overdue or then due on the Local Bond (including, without
limitation, any Supplemental Interest) and all amounts overdue, due or to become due
under Section 6.1(a) of this Agreement.
(4) The Local Government shall deposit with VRA cash in an amount
equal to the present value of interest that would be paid on the principal of the Allocated
Portion at a rate equal to 0.125%, payable semiannually, to the maturity dates of the
Allocated Portion or, if earlier, the redemption date or dates of the Allocated Portion.
Present value shall be determined by using a discount rate equal to the true interest cost of
the Related Portion of VRA Bonds.
(c) VRA will determine which Related Portion of VRA Bonds will be
designated as the Allocated Portion and the amounts to be deposited under subsection (b)(2) and
(3) above using such reasonable allocation and estimation methods as may be selected by VRA,
and VRA's determinations shall be conclusive (absent manifest error).
(d) The Local Government acknowledges that no funds in any VRA Reserve
will be available to the Local Government for the defeasance or redemption of the Local Bond.
Section 6.3 Payments and Rights Assigned. The Local Government hereby consents
to VRA's assignment to the Trustee of VRA's rights under this Agreement and the Local Bond.
The Local Government also hereby acknowledges and consents to the reservation by VRA of the
right and license to enjoy and enforce VRA's rights under the Local Bond and this Agreement so
long as no Event of Default (as defined in the Master Indenture) with respect to the Related Series
of VRA Bonds has occurred and is continuing. Even though VRA will be the registered owner of
the Local Bond, the Local Government shall pay directly to the Trustee all amounts payable by
the Local Government under the Local Bond and this Agreement (except for those amounts
specifically indicated as payable to VRA under Section 6.1 or Section 11.8, which the Local
Government shall pay directly to VRA).
Section 6.4 Obligations Absolute and Unconditional. The obligation of the Local
Government to make the payments required by the Local Bond and this Agreement from the
sources pledged therefor shall be absolute and unconditional. The Local Government shall pay all
such amounts without abatement, diminution or deduction (whether for taxes or otherwise)
regardless of any cause or circumstance whatsoever including, without limitation, any defense,
set-off, recoupment or counterclaim that the Local Government may have or assert against VRA,
the Trustee or any other person.
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ARTICLE VII
OPERATION AND USE COVENANTS
Section 7.1 Maintenance. At its own cost and expense the Local Government shall
operate the System in a proper, sound and economical manner in compliance with all legal
requirements and shall maintain the System in good repair and operating condition and from time
to time shall make all necessary repairs, renewals and replacements.
Section 7.2 Additions and Modifications. At its own expense the Local Government
from time to time may make any renewals, replacements, additions, modifications or
improvements to the System that the Local Government deems desirable, provided that any such
renewal, replacement, addition, modification or improvement does not (i) materially reduce the
value of the System or (ii) negatively affect the structural or operational integrity of any part of
the System. The Local Government shall ensure that all such renewals, replacements, additions,
modifications or improvements comply with all applicable federal, state and local laws, rules,
regulations, orders, permits, authorizations and requirements. All such renewals, replacements,
additions, modifications and improvements shall become part of the System.
Section 7.3 Permits. The Local Government shall, at its sole cost and expense, obtain
all permits, consents and approvals required by local, state or federal laws, ordinances, rules,
regulations or requirements in connection with the acquisition, construction, equipping,
occupation, operation or use of the System. The Local Government shall, upon request, promptly
furnish to VRA and the Trustee copies of all such permits, consents and approvals.
Section 7.4 Use. The Local Government shall comply with all lawful requirements of
any governmental authority regarding the System, whether now existing or subsequently enacted,
whether foreseen or unforeseen or whether involving any change in governmental policy or
requiring structural, operational or other changes to the System, irrespective of the cost of making
the same.
Section 7.5 Inspection and Local Government's Books and Records. The Local
Government shall permit VRA, the Trustee and their duly authorized representatives and agents
such reasonable rights of access to the System as may be necessary to determine whether the Local
Government is in compliance with the requirements of this Agreement, and the Local Government
shall permit such parties, at all reasonable times and upon reasonable prior notice to the Local
Government, to examine and copy the Local Government's books and records that relate to the
System.
Section 7.6 Ownership. The Local Government shall not construct, reconstruct or
install any part of the System on (i) lands other than those which the Local Government owns or
can acquire title to or a perpetual easement over, in either case sufficient for the Local
Government's purposes or (ii) lands in which the Local Government has acquired a right or interest
less than a fee simple or perpetual easement, unless (1) such part of the System is lawfully located
in a public street or highway or (2) the Local Government provides a written opinion of counsel
or a report of a Qualified Independent Consultant, either of which in a form reasonably acceptable
to VRA, that indicates that the lands and the Local Government's right or interest therein is
sufficient for the Local Government's purposes.
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Section 7.7 Sale or Encumbrance. No part of the System shall be sold, exchanged,
leased, mortgaged, encumbered or otherwise disposed of except (i) with the written consent of
VRA or (ii) as provided in any one of the following subsections:
(a) The Local Government may grant easements, licenses or permits across,
over or under parts of the System for streets, roads and utilities as will not adversely affect the use
of the System.
(b) The Local Government may sell or otherwise dispose of property
constituting part of the System if it uses the proceeds of such disposition and any other necessary
funds to replace such property with property serving the same or a similar function.
(c) The Local Government may sell or otherwise dispose of property
constituting part of the System with a "book value" (as determined in accordance with generally
accepted accounting principles) that, when combined with the aggregate "book value" of all of the
other such property sold or otherwise disposed of under this subsection during the Fiscal Year in
question, will not cause the aggregate "book value" of all of such property sold or otherwise
disposed of under this subsection in such Fiscal Year to exceed $125,000. The proceeds to be
received from any such sale or disposition shall be applied first to cure any default that may exist
in the payment of the principal of or interest on the Local Bond.
(d) The Local Government may otherwise sell or dispose of property
constituting part of the System if there is filed with VRA a certificate of the Consulting Engineer
stating that such property is not necessary or useful to the operation of the System. The proceeds
to be received from any such sale or disposition shall be applied first to cure any default that may
exist in the payment of the principal of or interest on the Local Bond.
Section 7.8 Collection of Revenues. The Local Government shall use its best efforts
to collect all rates, fees and other charges due to it, including, without limitation, the perfection of
liens on premises served by the System for the amount of all delinquent rates, fees and other
charges where such action is permitted by law. The Local Government shall, to the full extent
permitted by law, prevent access to the services and facilities of the System to users, of the System
who are delinquent beyond any customary grace periods in the payment of rates, fees and other
charges due to the Local Government.
Section 7.9 No Free Service. Except as otherwise required by law and as described on
Exhibit H, the Local Government shall not permit the use of the System, or furnish any services
afforded by the System, without making a charge therefor based on the Local Government's
uniform schedule of rates, fees and charges.
Section 7.10 No Competing Service. To the extent permitted by law, the Local
Government agrees not to provide, grant any franchise to provide or give consent for anyone else
to provide, any services which would compete with the System.
Section 7.11 Intentionally Omitted.
Section 7.12 Lawful Charges. The Local Government shall pay when due all taxes,
fees, assessments, levies and other governmental charges of any kind whatsoever (collectively, the
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"Governmental Charges") which are (i) assessed, levied or imposed against the System or the
Local Government's interest in it, or (ii) incurred in the operation, maintenance, use and occupancy
of the System. The Local Government shall pay or cause to be discharged, or shall make adequate
provision to pay or discharge, all lawful claims and demands for labor, materials, supplies or other
objects which, if unpaid, might by law become a lien upon all or any part of the System or the
Revenues (collectively, the "Mechanics' Charges"). The Local Government, however, after giving
VRA 10 days' notice of its intention to do so, at its own expense and in its own name, may contest
in good faith any Governmental Charges or Mechanics' Charges. If such a contest occurs, the
Local Government may permit the same to remain unpaid during the period of the contest and any
subsequent appeal unless, in VRA's reasonable opinion, such action may impair the lien on
Revenues granted by this Agreement, in which event, such Governmental Charges or Mechanics'
Charges promptly shall be satisfied or secured by posting with the Trustee or an appropriate court
a bond in form and amount satisfactory to VRA. Upon request, the Local Government shall furnish
to VRA proof of payment of all Governmental Charges and Mechanics' Charges the Local
Government is required to pay under this Agreement.
Section 7.13 Construction Contractors. The Local Government shall cause each
general construction contractor employed in the accomplishment of the Project to furnish a
performance bond and a payment bond each in an amount equal to 100% of the particular contract
price. Such bonds must list the Local Government, VRA and the Trustee as beneficiaries. Neither
VRA nor the Trustee shall make any claims or exercise any rights under such bonds unless and
until an Event of Default occurs. The Local Government shall cause each contractor to maintain
during the construction period covered by the particular construction contract builder's risk
insurance, workmen's compensation insurance, public liability insurance, property damage
insurance and vehicle liability insurance in amounts and on terms satisfactory to the Consulting
Engineer.
Section 7.14 Engineering Services. The Local Government shall retain or employ a
Consulting Engineer to provide engineering services covering the operation of the System.
ARTICLE VIII
INSURANCE, DAMAGE AND DESTRUCTION
Section 8.1 Insurance. The Local Government shall maintain or cause to be
maintained insurance against such risks as are customarily insured against by systems similar in
size and character to the System, including, without limitation:
(a) Insurance in the amount of the full replacement cost of the System's
insurable portions against loss or damage by fire and lightning, with broad form extended coverage
endorsements covering damage by windstorm, explosion, aircraft, smoke, sprinkler leakage,
vandalism, malicious mischief and such other risks as are normally covered by such endorsements
(limited only as may be provided in the standard form of such endorsements at the time in use in
Virginia). The determination of replacement cost shall be made, in conjunction with
representatives of the Local Government, by a recognized appraiser or insurer selected by the
Local Government and reasonably acceptable to VRA.
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(b) Comprehensive general liability insurance with a combined single limit in
an amount sufficient per year (based on recommendations of the Local Government's insurance
carrier) against liability for bodily injury, including death resulting therefrom, and for damage to
property, including loss of its use, arising out of the ownership, maintenance, operation or use of
the System.
(c) Unless the Local Government qualifies as a self-insurer under Virginia law,
worker's compensation insurance.
Neither VRA nor the Trustee shall have any responsibility or obligation with respect to (i)
the procurement or maintenance of insurance or the amounts or the provisions with respect to
policies of insurance or (ii) the application of the proceeds of insurance.
The Local Government shall provide annually to VRA a certificate or certificates of the
respective insurers evidencing the fact that the insurance required by this Section is in force and
effect.
Section 8.2 Requirements of Policies. The Local Government shall maintain all
insurance required by Section 8.1 with generally recognized responsible insurance companies
selected by the Local Government and reasonably acceptable to VRA. Such insurance may be
written with deductible amounts comparable to those on similar policies carried by other utility
systems of like size and character to the System. If the Local Government does not maintain such
insurance with an insurer licensed to do business in Virginia or placed under the requirements of
the Virginia Surplus Lines Insurance Law, Chapter 48, Title 38.2, Code of Virginia of 1950, as
amended, or any successor statute, the Local Government shall provide evidence reasonably
satisfactory to VRA that such insurance is enforceable under Virginia law.
Section 8.3 Notice of Damage, Destruction or Condemnation. In case of (i) any
damage to or destruction of any material part of the System, (ii) a taking of all or any part of the
System or any right in it under the exercise of the power of eminent domain, (iii) any loss of the
System because of failure of title or (iv) the commencement of any proceedings or negotiations
which might result in such a taking or loss, the Local Government shall notify VRA in writing
within ten Business Days of the occurrence describing generally the nature and extent of such
damage, destruction, taking, loss, proceedings or negotiations.
Section 8.4 Damage and Destruction. If all or any part of the System is destroyed or
damaged by fire or other casualty, and the Local Government shall not have exercised its option,
if such option is available, to redeem the outstanding Local Bond pursuant to Section 6.2, the Local
Government shall restore promptly the property damaged or destroyed to substantially the same
condition as before such damage or destruction, with such alterations and additions as the Local
Government may determine and which will not impair the capacity or character of the System for
the purposes for which it then is being used or is intended to be used. The Local Government may
apply so much as may be necessary of the net proceeds of insurance received on account of any
such damage or destruction 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 Local Government shall pay so much of the cost as may be in excess of such net
proceeds.
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Section 8.5 Condemnation and Loss of Title. If title to or the temporary use of all or
any part of the System shall be taken under the exercise of the power of eminent domain or lost
because of failure of title, and the Local Government shall not have exercised its option, if such
option is available, to redeem the outstanding Local Bond pursuant to Section 6.2, the Local
Government shall cause the net proceeds from any such condemnation award or from any title
insurance to be applied to the restoration of the System to substantially its condition before the
exercise of such power of eminent domain or failure of title. If such net proceeds are not sufficient
to pay in full the cost of such restoration, the Local Government shall pay so much of the cost as
may be in excess of such net proceeds.
ARTICLE IX
SPECIAL COVENANTS
Section 9.1 Intentionally Omitted.
Section 9.2 Maintenance of Existence. The Local Government shall maintain its
existence as a political subdivision of the Commonwealth of Virginia under Virginia law, and shall
not dissolve or otherwise dispose of all or substantially all of its assets or consolidate or merge
with or into another entity without VRA's prior written consent, which consent will not be
unreasonably withheld.
Section 9.3 Financial Records and Statements. The Local Government shall maintain
proper books of record and account in which proper entries shall be made in accordance with generally
accepted government accounting standards, consistently applied, of all its business and affairs. The
Local Government shall have an annual audit of the financial condition of the Local Government
made by an independent certified public accountant, within 180 days after the end of each Fiscal Year.
The annual audit shall include a supplemental schedule demonstrating whether the Local Government
satisfied the rate covenant set forth in Section 5.2. The Local Government shall furnish to VRA, in
an electronic format, a copy of such report immediately after it is accepted by the Local Government.
Such report shall include statements in reasonable detail, certified by such accountant, reflecting the
System's financial position as of the end of such Fiscal Year and the results of the System's operations
and changes in the financial position thereof for the Fiscal Year. Notification by the Local
Government to VRA that the report has been published on the Local Government's website shall
satisfy the "furnish" requirement of this section.
Section 9.4 Certification as to No Default. The Local Government shall deliver to
VRA, within 180 days after the close of each Fiscal Year, a certification in substantially the form
attached as Exhibit G and signed by a Local Representative.
Section 9.5 Further Assurances. The Local Government shall to the fullest extent
permitted by law pass, make, do, execute, acknowledge and deliver such further resolutions, acts,
deeds, conveyances, assignments, transfers and assurances as may be necessary or desirable for
the better assuring, conveying, granting, assigning and confirming the rights and collateral, if any,
assigned or pledged by this Agreement, or as may be required to carry out the purposes of this
Agreement. The Local Government shall at all times, to the fullest extent permitted by law, defend,
preserve and protect the pledges made under this Agreement and all rights of VRA under this
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Agreement against all claims and demands of all persons, including without limitation the payment
of certain costs of VRA as described in Section 6.1(a)(5).
Section 9.6 Assignment by Local Government. The Local Government shall not
assign its rights and obligations under the Local Bond or this Agreement, or both, without the prior
written consent of VRA.
Section 9.7 Continuing Disclosure. (a) For purposes of this Section 9.7, the following
terms and phrases have the following meanings:
"Annual Financial Information" with respect to any Fiscal Year for the Local
Government means the following:
(i) the financial statements (consisting of at least a balance sheet
and a statement of revenues and expenses) of the System ,which financial
statements must be (A) prepared annually in accordance with generally accepted
accounting principles in effect from time to time consistently applied (provided that
nothing in this clause (A) will prohibit the Local Government after the date of this
Agreement from changing such other principles so as to comply with generally
accepted accounting principles as then in effect or to comply with a change in
applicable law) and (B) audited by an independent certified public accountant or
firm of such accountants in accordance with generally accepted auditing standards
as in effect from time to time (provided that if audited financial statements are not
available for filing when required by this Section or the Rule (as defined herein),
unaudited financial statements will be filed and audited financial statements will be
filed as soon as possible thereafter); and
(ii) operating data of the type set forth in Exhibit E.
"Dissemination Agent" means any person, reasonably acceptable to VRA, whom the
Local Government contracts in writing to perform its obligations as provided in subsection (i) of
this Section.
"Financial Obligation" means a (i) debt obligation; (ii) derivative instrument entered into
in connection with, or pledged as security or a source of payment for, an existing or planned debt
obligation; or (iii) a guarantee of (i) or (ii). The term Financial Obligation does not include
municipal securities as to which a final official statement has been otherwise provided to the
MSRB under the Rule.
"Make Public" or "Made Public" has the meaning set forth in subsection (c) of this
Section.
"Material Local Government" means the Local Government if the aggregate outstanding
principal amount of the Local Bond and any other of the Local Government's local bonds
purchased with proceeds of the VRA Bonds represent 15% or more of the outstanding aggregate
principal amount of the local bonds purchased with proceeds of the VRA Bonds.
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"Rule" means Rule 15c2-12, as it may be amended from time to time, under the Securities
Exchange Act of 1934 and any similar rules of the SEC relating to disclosure requirements in the
offering and sale of municipal securities, all as in effect from time to time.
"SEC" means the U.S. Securities and Exchange Commission.
(b) The Local Government shall Make Public or cause to be Made Public:
(1) Within seven months after the end of the Local Government's Fiscal
Year (commencing with the Fiscal Year in which the Closing Date occurs), Annual
Financial Information for such Fiscal Year as of the end of which the Local Government
constitutes a Material Local Government. Annual Financial Information may be set forth
in the documents Made Public or may be included in a document Made Public by specific
reference to any document available to the public on the internet website of the Municipal
Securities Rulemaking Board ("MSRB") or filed with the SEC. If the document referred
to is a final official statement, then it must be available from the MSRB.
(2) In a timely manner, notice of any failure by the Local Government
to Make Public or cause to be Made Public Annual Financial Information pursuant to the
terms of part (1) of this subsection.
(c) For purposes of this Section, information and notices shall be deemed to
have been "Made Public" if transmitted to VRA, to the Trustee and to the MSRB in an electronic
format as prescribed by the MSRB.
(d) The Local Government shall also notify VRA of the occurrence of any of
the following events that may from time to time occur with respect to the Local Bond, such notice
to be given in a timely manner not in excess of five Business Days after the occurrence of the
event:
(1) principal and interest payment delinquencies;
(2) non-payment related defaults;
(3) unscheduled draws on debt service reserves reflecting financial
difficulties;
(4) unscheduled draws on any credit enhancement maintained with
respect to the Local Bond reflecting financial difficulties;
(5) substitution of credit or liquidity providers, or their failure to
perform;
(6) adverse tax opinions, the issuance by the Internal Revenue Service
of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form
5701 – TEB) or other notices or determinations with respect to the Local Bond that could
affect the tax status of the Related Series of VRA Bonds, or other events with respect to
the Local Bond that could affect the tax status of the Related Series of VRA Bonds;
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(7) modifications to rights of holders;
(8) bond calls and tender offers;
(9) defeasances;
(10) release, substitution, or sale of property securing repayment of the
Local Bond;
(11) rating changes;
(12) bankruptcy, insolvency, receivership or similar event of the Local
Government;
(13) the consummation of a merger, consolidation, or acquisition
involving the Local Government or the sale of all or substantially all of the assets of the
Local Government, other than in the ordinary course of business, the entry into a definitive
agreement to undertake such an action or the termination of a definitive agreement relating
to any such action, other than pursuant to its terms;
(14) appointment of a successor or additional trustee for the Local Bond,
if any, or the change of name of a trustee;
(15) the failure of the Local Government on or before the date required
by this Agreement to provide Annual Financial Information to the persons and in the
manner required by this Agreement;
(16) incurrence of a Financial Obligation of the Local Government, if
material, or agreement to covenants, events of default, remedies, priority rights, or other
similar terms of a Financial Obligation of the Local Government, any of which affect
security holders, if material; and
(17) default, event of acceleration, termination event, modification of
terms, or other similar events under the terms of a Financial Obligation of the Local
Government, any of which reflect financial difficulties.
(e) Additionally, upon request of VRA, the Local Government shall certify in
writing that it has made all filings and disclosures required under this Section or any similar
undertaking pursuant to the Rule.
(f) Notwithstanding anything in this Agreement to the contrary, the Local
Government need not comply with the provisions of subsections (a) through (c) or provide the
notice described in subsection (d)(16) above during any Fiscal Year unless VRA has notified the
Local Government that it satisfied the objective criteria for a Material Local Government as of the
end of VRA's immediately preceding fiscal year. As of the Closing Date the Local Government's
Fiscal Year and VRA's fiscal year are the same.
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(g) (1) If the Local Government fails to comply with any covenant or
obligation set forth in this Section, any holder (within the meaning of the Rule) of VRA Bonds
then Outstanding may, by notice to the Local Government, proceed to protect and enforce its rights
and the rights of the other holders by an action for specific performance of the Local Government's
covenants or obligations set forth in this Section.
(2) Notwithstanding anything herein to the contrary, any failure of the
Local Government to comply with any disclosure obligation specified in this Agreement
(i) shall not be deemed to constitute an Event of Default under this Agreement and (ii) shall
not give rise to any right or remedy other than that described in part (1) of this subsection.
(h) The Local Government may from time to time disclose certain information
and data in addition to that required under this Section. Notwithstanding anything in this
Agreement to the contrary, the Local Government shall not incur any obligation to continue to
provide, or to update, such additional information or data.
(i) The Local Government may, from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligation to cause to be Made Public the
information described in this Section and may discharge any such Dissemination Agent, with or
without appointing a successor Dissemination Agent. It is not necessary for purposes of this
Article that the Dissemination Agent have any agency relationship with the Local Government for
purposes of state law.
(j) All documents Made Public under this Section shall be accompanied by
identifying information as prescribed by the MSRB.
Section 9.8 Other Indebtedness. The Local Government shall pay when due all
amounts required by any other indebtedness of the Local Government and perform all of its
obligations in connection with all other indebtedness of the Local Government.
Section 9.9 Additional Indebtedness. The Local Government shall not incur any
indebtedness or issue any bonds, notes or other evidences of indebtedness secured by a pledge of
Revenues, except Parity Bonds or Subordinate Debt issued in accordance with the terms and
conditions of this Section 9.9.
(a) The Local Government may issue Parity Bonds to (i) pay the cost of the
acquisition or construction of improvements, extensions, additions or replacements to equipment
or betterments of and any property, rights or easements deemed by the Local Government to be
necessary, useful or convenient for the System or to refund Subordinate Debt, (ii) refund some or
all of the Local Bond (subject to the conditions of Section 6.2) or any other Parity Bond or (iii)
effect some combination of (i) and (ii), provided in each case the following conditions are satisfied.
Before any Parity Bond is issued or delivered, the Local Government shall deliver to VRA the
following in form and substance satisfactory to VRA:
(1) Certified copies of all resolutions and ordinances of the Local
Government authorizing the issuance of the Parity Bond.
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(2) A certificate of a Local Representative setting forth the purposes for
which the Local Government is issuing the Parity Bond and the manner in which the Local
Government will apply the proceeds from the issuance and sale of the Parity Bond.
(3) If the Parity Bond is authorized for any purpose other than the
refunding of the Local Bond or other Parity Bond, a certificate including supporting
documentation of a Qualified Independent Consultant to the effect that (i) the
improvements or property which the proceeds from the issuance of the Parity Bond will
finance or refinance will be a part of, or are necessary, useful or convenient for, the System,
(ii) the funds available to the Local Government from the issuance of the Parity Bond and
other specified sources will be sufficient to pay the estimated cost of such improvements
or property (or refinancing the same), (iii) the period of time which will be required to
complete such improvements or property, and (iv) (A) the failure to make such
improvements or acquire or construct such property will result in an interruption or
reduction, or the continuance of an interruption or reduction, of Revenues, or (B) during
the first two complete Fiscal Years following the completion of the improvements or the
acquisition or construction of the property (or refinancing the same), the projected Net
Revenues Available for Debt Service will satisfy the rate covenant of Section 5.2. In
providing this certificate, the Qualified Independent Consultant may take into
consideration future System rate increases, provided that such rate increases have been
duly approved by the Local Government's governing body and any other person and entity
required to give approval for the rate increase to become effective. In addition, the
Qualified Independent Consultant may take into consideration additional future Revenues
to be derived under then existing contractual agreements entered into by the Local
Government and from reasonable estimates of growth in the Local Government's customer
base. In providing the certification in subsection (iv)(B) above, the Qualified Independent
Consultant shall include supporting documentation.
(4) If the Parity Bond is authorized solely to refund any of the Local
Bond or other Parity Bonds (a "Refunding Parity Bond") a certificate or report of a
Qualified Independent Consultant that the scheduled annual debt service requirements on
the Refunding Parity Bond and the unrefunded portions of the Local Bond and other Parity
Bonds (collectively, the "Post-Refunding Parity Bonds) in each of the Fiscal Years during
which the Post-Refunding Parity Bonds will be outstanding are lower than the scheduled
annual debt service requirements in each such Fiscal Year on the outstanding Local Bond
and other Parity Bonds as they existed immediately before the issuance of the Refunding
Parity Bond.
(5) If requested by VRA, an opinion of a nationally-recognized bond
counsel, subject to customary exceptions and qualifications, approving the form of the
resolution or ordinance authorizing the issuance of the Parity Bond and stating that its terms
and provisions conform with the requirements of this Agreement, that the certificates and
documents delivered to VRA constitute compliance with the provisions of this Section, and
that the issuance of the Parity Bond will have no adverse effect on the exclusion of the
interest on the Related Series of VRA Bonds from gross income for federal income tax
purposes and not cause interest on the Related Series of VRA Bonds to become a specific
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item of tax preference for purposes of the federal alternative minimum tax imposed on
individuals and corporations.
(b) If the Local Government is unable or unwilling to satisfy the conditions set
forth in subsection (b) to the issuance and delivery of any issue of Parity Bonds, VRA may
determine, in its sole discretion, to waive any or all of such conditions.
Section 9.10 Litigation; Material Change. The Local Government shall promptly
notify VRA of (i) the existence and status of any litigation that the County Attorney determines is
not reasonably certain to have a favorable outcome and which individually or in the aggregate
could have a material adverse effect on the financial condition or operations of the System or its
ability to perform its payment and other obligations under this Agreement or the Local Bond or
(ii) any change in any material fact or circumstance represented or warranted in this Agreement.
ARTICLE X
DEFAULTS AND REMEDIES
Section 10.1 Events of Default. Each of the following events is an "Event of Default":
(a) The failure to pay any installment of principal of or premium, if any, on the
Local Bond when due (whether at maturity, by mandatory or optional redemption, by acceleration
or otherwise).
(b) The failure to pay any installment of interest (including Supplemental
Interest) on the Local Bond when due.
(c) The failure to make any other payment or deposit required by this
Agreement within 15 days after its due date.
(d) The Local Government's failure to perform or observe any of the other
covenants, agreements or conditions of the Local Bond or this Agreement and the continuation of
such failure for a period of 60 days after written notice specifying such failure and requesting that
it be cured is given to the Local Government by VRA, or, in the case of any such failure which
cannot with diligence be cured within such 60-day period, the Local Government's failure to
proceed promptly to commence to cure the failure and thereafter to prosecute the curing of the
failure with diligence.
(e) Any warranty, representation or other statement by or on behalf of the Local
Government contained in this Agreement or in any instrument furnished in compliance with or in
reference to this Agreement or in connection with the issuance and sale of the Local Bond is false
and misleading in any material respect.
(f) Any bankruptcy, insolvency or other similar proceeding shall be instituted
by or against the Local Government under any federal or state bankruptcy or insolvency law and,
if instituted against the Local Government, is not dismissed within 60 days after filing.
(g) Any proceeding shall be instituted, with the Local Government's consent or
acquiescence, for the purpose of effecting a composition between the Local Government and its
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creditors or for the purpose of adjusting such creditors' claims under any federal or state statute
now or hereafter enacted, if such claims are under any circumstances payable from the Revenues.
(h) An order or decree shall be entered, with the Local Government's consent
or acquiescence, appointing a receiver or receivers of the System or any part of it or of the
Revenues, or if such order or decree, having been entered without the Local Government's consent
or acquiescence, shall not be vacated or discharged or stayed on appeal within 60 days after its
entry.
(i) The occurrence of a default by the Local Government under the terms of
any debt secured by a pledge of Revenues and the failure to cure such default or obtain a waiver
thereof within any period of time permitted thereunder.
Section 10.2 Acceleration. Upon the occurrence and continuation of an Event of
Default, VRA may, by notice in writing delivered to the Local Government, declare the entire
unpaid principal of and interest on the Local Bond due and payable. Upon any such declaration,
the Local Government shall immediately pay to the Trustee the entire unpaid principal of and
accrued interest on the Local Bond, but only from the Revenues and other funds specifically
pledged hereby. VRA may in its discretion waive an Event of Default and its consequences and
rescind any acceleration of maturity of principal of and interest on the Local Bond.
Section 10.3 Other Remedies. Upon the occurrence and continuation of an Event of
Default, VRA may proceed to protect and enforce its rights by mandamus or other action, suit or
proceeding at law or in equity for specific performance of any agreement contained in the Local
Bond or this Agreement. No remedy conferred by this Agreement upon or reserved to the
registered owners of the Local Bond 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 VRA under this
Agreement or now or hereafter existing at law or in equity or by statute.
Section 10.4 Delay and Waiver. 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 in it, 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 under this Agreement shall extend to or shall affect
any subsequent default or Event of Default or shall impair any rights or remedies consequent to it.
ARTICLE XI
MISCELLANEOUS
Section 11.1 State Aid Intercept. The Local Government acknowledges that VRA is
treating the Local Bond as a "local obligation" within the meaning of Section 62.1-199 of the Act,
including amendments thereto taking effect as of July 1, 2011, which in the event of a nonpayment
thereunder authorizes VRA or the Trustee to file an affidavit with the Governor that such
nonpayment has occurred pursuant to Section 62.1-216.1 of the Act. In purchasing the Local
Bond, VRA is further relying on Section 62.1-216.1 of the Act, providing that if the Governor is
satisfied that such nonpayment has occurred, the Governor will immediately make an order
directing the Comptroller to withhold all further payment to the Local Government of all funds, or
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of any part of them, appropriated and payable by the Commonwealth of Virginia to the Local
Government for any and all purposes, and the Governor will, while the nonpayment continues,
direct in writing the payment of all sums withheld by the Comptroller, or as much of them as is
necessary, to VRA, so as to cure, or cure insofar as possible, such nonpayment.
Section 11.2 Successors and Assigns. This Agreement shall be binding upon, inure to
the benefit of and be enforceable by the parties and their respective successors and assigns.
Section 11.3 Amendments. VRA and the Local Government shall have the right to
amend from time to time any of this Agreement's terms and conditions, provided that all
amendments shall be in writing and shall be signed by or on behalf of VRA and the Local
Government.
Section 11.4 Limitation of Local Government's Liability. Notwithstanding anything
in the Local Bond or this Agreement to the contrary, the Local Government's obligations hereunder
and under the Local Bond are not its general obligations, but are limited obligations payable solely
from the Revenues which are specifically pledged for such purpose. Neither the Local Bond nor
this Agreement shall be deemed to create or constitute a debt or a pledge of the faith and credit of
the Local Government and the Local Government shall not be obligated to pay the principal of or
premium, if any, or interest on the Local Bond or other costs incident to them except from the
Revenues and other funds pledged for such purpose. In the absence of fraud or intentional
misconduct, no present or future director, official, officer, employee or agent of the Local
Government shall be liable personally to VRA in respect of this Agreement or the Local Bond or
for any other action taken by such individual pursuant to or in connection with the financing
provided for in this Agreement or the Local Bond.
Section 11.5 Applicable Law. This Agreement shall be governed by Virginia law.
Section 11.6 Severability. If any clause, provision or section of this Agreement shall be
held illegal or invalid by any court, the illegality or invalidity of such clause, provision or section
shall not affect the remainder of this Agreement which shall be construed and enforced as if such
illegal or invalid clause, provision or section had not been contained in this Agreement. If any
agreement or obligation contained in this Agreement is held to be in violation of law, then such
agreement or obligation shall be deemed to be the agreement or obligation of VRA and the Local
Government, as the case may be, only to the extent permitted by law.
Section 11.7 Notices. Unless otherwise provided for herein, all demands, notices,
approvals, consents, requests, opinions and other communications under the Local Bond or this
Agreement shall be in writing and shall be deemed to have been given when delivered in person
or mailed by first class registered or certified mail, postage prepaid, addressed (a) if to the Local
Government, at the address specified for notices on the signature page; (b) if to VRA, at 1111 East
Main Street, Suite 1920, Richmond, Virginia 23219, Attention: Executive Director; or (c) if to the
Trustee, at Two James Center, 1051 E. Cary Street, Suite 600, Richmond, Virginia 23219,
Attention: Corporate Trust Department. A duplicate copy of each demand, notice, approval,
consent, request, opinion or other communication given by any party named in this Section shall
also be given to each of the other parties named. VRA, the Local Government and the Trustee
may designate, by notice given hereunder, any further or different addresses to which subsequent
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demands, notices, approvals, consents, requests, opinions or other communications shall be sent
or persons to whose attention the same shall be directed.
Section 11.8 Right to Cure Default. If the Local Government fails to make any payment
or to perform any act required by it under the Local Bond or this Agreement, VRA or the Trustee,
without prior notice to or demand upon the Local Government and without waiving or releasing
any obligation or default, may (but shall be under no obligation to) make such payment or perform
such act. All amounts so paid by VRA or the Trustee and all costs, fees and expenses so incurred
shall be payable by the Local Government as an additional obligation under this Agreement,
together with interest thereon at the rate of 15% per year until paid. The Local Government's
obligation under this Section shall survive the payment of the Local Bond.
Section 11.9 Term of Agreement. This Agreement is effective as of the Effective Date.
Except as otherwise specified, the Local Government's obligations under the Local Bond and this
Agreement shall expire upon payment in full of the Local Bond and all other amounts payable by
the Local Government under this Agreement.
Section 11.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original and all of which together shall constitute but one
and the same instrument.
[Signature Pages Follow]
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[Signature Page of Local Bond Sale and Financing Agreement – Pittsylvania – VRA]
WITNESS the following signatures, all duly authorized.
VIRGINIA RESOURCES AUTHORITY
By: _______________________________
Stephanie L. Hamlett, Executive Director
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[Signature Page of Local Bond Sale and Financing Agreement – Pittsylvania – County]
COUNTY OF PITTSYLVANIA, VIRGINIA
By: ______________________________________
Robert "Bob" Warren, Chairman
Address for Notices:
1 Center Street
P.O. Box 426
Chatham, Virginia 24531
Attention: County Administrator
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[Signature Page of Local Bond Sale and Financing Agreement – Pittsylvania – Trustee]
The Trustee, by the execution hereof, accepts the duties imposed on it by this Agreement.
U.S. BANK NATIONAL ASSOCIATION, as
Trustee
By: _________________________________
Monique L. Green, Vice President
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A-1
EXHIBIT A
FORM OF LOCAL BOND
[To be provided]
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B-1
EXHIBIT B
DESCRIPTION OF THE PROJECT
The Project consists of (a) financing various capital projects related to the Local
Government's solid waste system, including (without limitation) opening a new cell in the Local
Government's landfill and acquiring equipment for use at the landfill, (b) refunding a portion of
the outstanding principal installments of the $1,803,802 Lease Revenue Bond (County Projects),
Series 2018A (Federally Tax-Exempt), issued by the IDA, for the benefit of the Local Government,
and (c) paying the related costs of issuance and refunding.
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C-1
EXHIBIT C
PENDING OR THREATENED ACTIONS, SUITS, PROCEEDINGS, OR
INVESTIGATIONS
[To be provided]
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D-1
EXHIBIT D
FORM OF REQUISITION
Requisition No.
Date: ___________, 2021
U.S. Bank National Association, as Trustee
Attention: Corporate Trust Department
1021 East Cary Street
18th Floor
Richmond, Virginia 23219
Virginia Resources Authority
1111 East Main Street
Suite 1920
Richmond, Virginia 23219
Attention: Executive Director
This Requisition, including Schedule 1 and Schedule 2 hereto, is submitted in connection
with the Local Bond Sale and Financing Agreement dated as of September 17, 2021 (the
"Financing Agreement"), between the Virginia Resources Authority and the County of
Pittsylvania, Virginia (the "Local Government"). Unless otherwise defined in this Requisition,
each capitalized term used herein has the meaning given it under Article I of the Financing
Agreement. The undersigned Local Representative hereby requests payment of the following
amounts from the Local Account established for the Local Government in the 2021C Acquisition
Fund established under the Fifty-Second Supplemental Series Indenture.
Payee (including wiring instructions if receiving electronic payment):
Address:
Amount to be paid:
Purpose (in reasonable detail) for which obligations(s) to be paid were incurred:
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D-2
Attached on Schedule 2 are the wire instructions for this requisition, and also attached
hereto is an invoice (or invoices) relating to the items for which payment is requested.
The undersigned certifies that (i) the amounts requested by this Requisition will be applied
solely and exclusively to the payment, or the reimbursement of the Local Government for its
payment, of Project Costs of the construction portion of the Project, (ii) no notice of any lien, right
to lien or attachment upon, or claim affecting the right to receive payment of, any of the money
payable under this Requisition to any of the persons, firms or corporations named in it has been
received, or if any notice of any such lien, attachment or claim has been received, such lien,
attachment or claim has been released or discharged or will be released or discharged upon
payment of the Requisition, and (iii) this Requisition contains no items representing payment on
account of any retained percentage entitled to be retained at this date.
If this Requisition includes payments for labor or to contractors, builders or materialmen,
the attached Certificate of Consulting Engineer (Payments for Labor/Contractors) must be
completed. If this Requisition includes payments for any lands or easements, or any rights or
interest in or relating to lands, the attached Certificate of the Consulting Engineer (Land Interests)
must be completed.
The Local Government has agreed in the Financing Agreement that any amounts it
receives pursuant to this Requisition will be (i) immediately applied to reimburse the Local
Government for Project Costs it has already paid or (ii) actually spent to pay Project Costs
not later than five banking days after receipt.
__________________________________________
Local Representative
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D-3
SCHEDULE 1
Form to Accompany Requisition
Requisition # _________________________
Recipient: County of Pittsylvania, Virginia – VRA 2021C
Local Representative: _________________________
Title: _________________________
Date: _________________________
Cost
Category
Total
Project Cost
Previous
Disbursements
Disbursement
This Period
Disbursements
to Date
Remaining
Balance
$ $ $ $ $
TOTALS
$ $ $ $ $
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D-4
SCHEDULE 2
Wire Instructions for Requisition
[To be provided by the Local Government]
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D-5
CERTIFICATE OF CONSULTING ENGINEER (PAYMENTS FOR
LABOR/CONTRACTORS)
The undersigned Consulting Engineer for the Local Government hereby certifies that
insofar as the amounts covered by this Requisition include payments for labor or to contractors,
builders or materialmen, such work was actually performed or such materials, supplies or
equipment were actually furnished or installed in or about the Project.
Date: _________, 20__
________________________________________
Consulting Engineer
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D-6
CERTIFICATE OF CONSULTING ENGINEER (LAND INTERESTS)
The undersigned Consulting Engineer for the Local Government hereby certifies that
insofar as the amounts covered by the Requisition include payments for land or easements, rights
or interests in or relating to lands, (i) such lands, easements, rights or interests are being acquired
and are necessary or convenient for the construction of the Project, and (ii) upon payment therefor
the Local Government will have title in fee simple to, or easements, rights or interests sufficient
for the purposes of, the Project over and through the subject lands.
Date: _________, 20__
________________________________________
Consulting Engineer
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E-1
EXHIBIT E
OPERATING DATA
Description of Local Government. A description of the Local Government including a
summary description of the System.
Debt. A description of the terms of the Local Government's outstanding debt including a
historical summary of outstanding debt and a summary of annual debt service on outstanding debt
as of the end of the preceding fiscal year. The annual disclosure should also include (to the extent
not shown in the latest audited financial statements) a description of contingent obligations as well
as pension plans administered by the Local Government and any unfunded pension liabilities.
Financial Information and Operating Data. Financial information for the System as of the
end of the preceding fiscal year, including a description of revenues and expenditures, largest
users, a summary of rates, fees and other charges of the System, and a historical summary of debt
service coverage.
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F-1
EXHIBIT F
FORM OF OPINION OF COUNSEL TO THE LOCAL GOVERNMENT
Board of Supervisors
County of Pittsylvania, Virginia
Virginia Resources Authority
Richmond, Virginia
$[_______]
County of Pittsylvania, Virginia
Taxable [_______] Revenue Bond, Series 2021
Ladies and Gentlemen:
I have acted as counsel to the County of Pittsylvania, Virginia (the "Local Government"),
in connection with the issuance and sale by the Local Government of its $[______] Taxable
[______] Revenue Bond, Series, 2021 (the "Local Bond"), the net proceeds of which will be
applied to finance the Project (as defined in the hereafter defined Financing Agreement) and in
such capacity, I have examined, among other things, the following documents:
(a) a certified copy of the Local Authorization, authorizing the issuance and sale of the
Local Bond to Virginia Resources Authority ("VRA") to finance the Project; and
(b) a copy of the Local Bond Sale and Financing Agreement (the "Financing
Agreement") dated as of September 17, 2021, and between the Local Government
and VRA.
I have also examined such other records and proceedings of the Local Government and
conducted such investigations as I deemed appropriate and necessary for purposes of this opinion.
Unless otherwise defined, each capitalized term used in this opinion has the same meaning
given to such term in the Financing Agreement.
As to questions of fact material to the opinions and statements set forth herein, I have relied
upon representations of the Local Government set forth in the Financing Agreement and other
certificates and representations by persons including representatives of the Local Government.
Whenever an opinion or statement set forth herein with respect to the existence or absence of facts
is qualified by the phrase "to the best of my knowledge" or a phrase of similar import, it is intended
to indicate that during the course of my representation of the Local Government in connection with
the Financing Agreement no information has come to my attention that should give me current
actual knowledge of the existence or absence of such facts. Except to the extent expressly set forth
herein, I have not undertaken any independent investigation of the existence or absence of such
facts, and no inference as to my knowledge or the existence or absence of such facts should be
drawn from the fact of my representation or any other matter.
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F-2
Based upon such examination and assuming the authorization, execution, delivery and
enforceability of all documents by parties other than the Local Government, I am of the opinion
that:
1. The Local Government is a duly created and validly existing
political subdivision of the Commonwealth and is vested with the rights and powers
conferred upon it by Virginia law.
2. The Local Government has full right, power and authority to
(i) adopt the Local Authorization and execute and deliver the Financing Agreement
and all related documents, (ii) undertake the Project and (iii) carry out and
consummate all of the transactions contemplated by the Local Authorization and
the Financing Agreement, including owning and operating the System.
3. The Financing Agreement was duly authorized by the Local
Authorization and the Financing Agreement is in substantially the same form as
presented to the Governing Body at its meeting at which the Local Authorization
was adopted.
4. All governmental permits, licenses, registrations,
certificates, authorizations and approvals required to have been obtained as of the
date hereof have been obtained for (i) the Local Government's adoption of the Local
Authorization, (ii) the execution and delivery of the Financing Agreement and the
Local Bond, (iii) the Local Government's performance of its obligations under the
Financing Agreement and the Local Bond, and (iv) to the best of my knowledge,
the operation and use of the Related Financed Property and the System. I know of
no reason why any such required governmental permits, licenses, registrations,
certificates, authorizations or approvals cannot be obtained as required in the future.
5. The Financing Agreement has been executed and delivered
by duly authorized officials of the Local Government and constitutes a legal, valid
and binding obligation of the Local Government enforceable against the Local
Government in accordance with its terms. The Local Bond has been executed and
delivered by duly authorized officials of the Local Government and will constitute
a legal, valid and binding limited obligation of the Local Government enforceable
against the Local Government in accordance with its terms.
The obligations of the Local Government under the Financing Agreement and the Local
Bond, and the enforceability of such obligations, may be limited or otherwise affected by (i)
bankruptcy, insolvency, reorganization, moratorium and other laws affecting the rights of creditors
generally, (ii) principles of equity, whether considered at law or in equity, (iii) the exercise of
sovereign police powers of the Commonwealth, and (iv) rules of law which may limit the
enforceability on public policy grounds of any obligations of indemnification undertaken by the
Local Government.
6. The issuance of the Local Bond and the execution and
delivery of the Financing Agreement and the performance by the Local
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F-3
Government of its obligations thereunder are within the powers of the Local
Government and will not conflict with, or constitute a breach or result in a violation
of (i) any federal or Virginia constitutional or statutory provision, (ii) to the best of
my knowledge, any agreement or other instrument to which the Local Government
is a party or by which it is bound or (iii) any order, rule, regulation, decree or
ordinance of any court, government or governmental authority having jurisdiction
over the Local Government or its property.
7. The Local Government, to the best of my knowledge, is not
in default in the payment of the principal of or interest on any of its indebtedness
for borrowed money and is not in default under any instrument under and subject
to which any indebtedness for borrowed money has been incurred. To the best of
my knowledge, no event or condition has happened or existed, or is happening or
existing, under the provisions of any such instrument, including but not limited to
the Financing Agreement, which constitutes, or which, with notice or lapse of time,
or both, would constitute an event of default thereunder.
8. The Local Government (i) to the best of my knowledge, is
not in violation of any existing law, rule or regulation applicable to it in any way
which would have a material adverse effect on its financial condition or its ability
to perform its obligations under the Local Bond or the Financing Agreement and
(ii) is not in default under any indenture, mortgage, deed of trust, lien, lease,
contract, note, order, judgment, decree or other agreement, instrument or restriction
of any kind to which the Local Government is a party or by which it is bound or to
which any of its assets is subject, which would have a material adverse effect on its
financial condition or its ability to perform its obligations under the Local Bond
and the Financing Agreement. The execution and delivery by the Local
Government of the Local Bond and the Financing Agreement and the compliance
with the terms and conditions thereof will not conflict with, result in a breach of or
constitute a default under any of the foregoing.
9. Except as set forth in the Financing Agreement, there has not
been served nor, to the best of my knowledge, threatened against the Local
Government, any actions, suits, proceedings or investigations of a legal, equitable,
regulatory, administrative or legislative nature (i) affecting the creation,
organization or existence of the Local Government or the title of its officers to their
respective offices, (ii) seeking to prohibit, restrain or enjoin the approval, execution,
delivery or performance of the Local Authorization or the Financing Agreement or
the issuance or delivery of the Local Bond, (iii) in any way contesting or affecting
the validity or enforceability of the Local Bond, the Local Authorization, the
Financing Agreement or any agreement or instrument relating to any of the
foregoing, (iv) in which a judgment, order or resolution may have a material
adverse effect on the Local Government or its business, assets, condition (financial
or otherwise), operations or prospects or on its ability to perform its obligations
under the Local Authorization, the Financing Agreement or the Local Bond, or (v)
affecting the undertaking of the Project.
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F-4
Very truly yours,
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G-1
EXHIBIT G
FORM OF CERTIFICATION AS TO NO DEFAULT
[DATE]
[Insert Name]
Compliance & Financial Analyst
Virginia Resources Authority
1111 East Main Street, Suite 1920
Richmond, VA 23219
Dear [Mr./Ms.] ______:
In accordance with Section 9.4 of the Local Bond Sale and Financing Agreement dated as
of September 17, 2021 (the "Financing Agreement") between Virginia Resources Authority and
the County of Pittsylvania, Virginia (the "Local Government"), I hereby certify that, during the
fiscal year that ended June 30, ______, and through the date of this letter:
1. [No event or condition has happened or existed, or is happening or existing, which
constitutes, or which, with notice or lapse of time, or both, would constitute, an Event of
Default as defined in Section 10.1 of the Financing Agreement.] [If an Event of Default
has occurred, please specify the nature and period of such Event of Default and what action
the Local Government has taken, is taking or proposes to take to rectify it].
2. [The ownership and status of all or a portion of the Related Financed Property has not
changed since the Closing Date.] [If untrue, please describe.]
Sincerely,
[Insert Name]
Local Representative
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H-1
EXHIBIT H
DESCRIPTION OF SPECIAL USE ARRANGEMENTS
[To be provided]
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I-1
EXHIBIT I
FORM OF ANNUAL BUDGET
[DATE]
Compliance and Financial Analyst
Virginia Resources Authority
1111 East Main Street, Suite 1920
Richmond, VA 23219
Ladies and Gentlemen:
Pursuant to the Financing Agreement[s] between Virginia Resources Authority and the
County of Pittsylvania, Virginia, dated as of [add dates of all outstanding Financing Agreements],
a copy of the fiscal year [20xx] annual budget is enclosed. Such annual budget provides for the
satisfaction of the rate covenant as demonstrated below.
Revenues
Operation & Maintenance
Expenses
Net Revenues Available
for Debt Service
(Revenues – O&M Expenses)
Debt Service
*Coverage
(Net Revenues Available for
Debt Service/Debt Service)
Unless otherwise defined herein, the capitalized terms used in this Certificate shall have
the meanings set forth in the Financing Agreement[s].
Very truly yours,
By: __________________________
Its: _________________________
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J-1
EXHIBIT J
EXISTING PARITY BONDS
[To be provided]
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1.1-1
SCHEDULE 1.1
[To be provided]
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1.1-2
ADDITIONAL CONDITIONS PRECEDENT TO PURCHASE OF LOCAL BOND:
[To be provided]
ADDITIONAL CONDITIONS PRECEDENT TO FIRST REQUISITION OF PROCEEDS
OF LOCAL BOND:
[To be provided]
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1.1-3
PROJECT BUDGET
[To be provided]
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1.1-4
INTEREST RATES AND PAYMENT SCHEDULE FOR LOCAL BOND
[To be provided]
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Revenue
New Money and Refunding
148552393_1 McGuireWoods LLP Draft of 8/11/2021
LOCAL BOND SALE AND FINANCING AGREEMENT
between
VIRGINIA RESOURCES AUTHORITY
and
COUNTY OF PITTSYLVANIA, VIRGINIA
Dated as of September 17, 2021
Virginia Resources Authority
Infrastructure and State Moral Obligation Revenue Bonds
(Virginia Pooled Financing Program)
Series 2021C
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TABLE OF CONTENTS
Page
-i-
ARTICLE I
DEFINITIONS
Section 1.1 Definitions........................................................................................................ 1
Section 1.2 Rules of Construction ...................................................................................... 5
ARTICLE II
REPRESENTATIONS
Section 2.1 Representations by VRA.................................................................................. 5
Section 2.2 Representations by Local Government ............................................................ 6
Section 2.3 Representations Remade as of the Sale Date ................................................... 8
ARTICLE III
PURCHASE OF THE LOCAL BOND
Section 3.1 Purchase of the Local Bond ............................................................................. 8
Section 3.2 Issuance Expenses ............................................................................................ 9
Section 3.3 Schedule 1.1 ..................................................................................................... 9
Section 3.4 Conditions Precedent to Purchase of the Local Bond .................................... 10
ARTICLE IV
USE OF PURCHASE PRICE
Section 4.1 Deposit of Purchase Price; Investment of Amounts in Local Account ......... 11
Section 4.2 Agreement to Accomplish Project ................................................................. 11
Section 4.3 Disbursement of Purchase Price and Earnings .............................................. 12
Section 4.4 No Sufficiency Warranty by VRA; Local Government Required to
Complete Project ............................................................................................ 13
ARTICLE V
PLEDGE AND SECURITY
Section 5.1 Pledge ............................................................................................................. 13
Section 5.2 Rate Covenant ................................................................................................ 14
Section 5.3 Annual Budget of the System ........................................................................ 14
Section 5.4 Qualified Independent Consultant's Report ................................................... 14
Section 5.5 Support Agreement ........................................................................................ 15
ARTICLE VI
PAYMENT AND REDEMPTION OF LOCAL BOND
Section 6.1 Payment of Local Bond and Related Amounts .............................................. 16
Section 6.2 Defeasance and Redemption of Local Bond .................................................. 17
Section 6.3 Payments and Rights Assigned ...................................................................... 18
Section 6.4 Obligations Absolute and Unconditional ....................................................... 18
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TABLE OF CONTENTS (cont.)
Page
-ii-
ARTICLE VII
OPERATION AND USE COVENANTS
Section 7.1 Maintenance ................................................................................................... 19
Section 7.2 Additions and Modifications.......................................................................... 19
Section 7.3 Permits ........................................................................................................... 19
Section 7.4 Use ................................................................................................................. 19
Section 7.5 Inspection and Local Government's Books and Records ............................... 19
Section 7.6 Ownership ...................................................................................................... 19
Section 7.7 Sale or Encumbrance ..................................................................................... 20
Section 7.8 Collection of Revenues .................................................................................. 20
Section 7.9 No Free Service.............................................................................................. 20
Section 7.10 No Competing Service ................................................................................... 20
Section 7.11 Intentionally Omitted ..................................................................................... 21
Section 7.12 Lawful Charges .............................................................................................. 21
Section 7.13 Construction Contractors ............................................................................... 21
Section 7.14 Engineering Services ..................................................................................... 21
ARTICLE VIII
INSURANCE, DAMAGE AND DESTRUCTION
Section 8.1 Insurance ........................................................................................................ 21
Section 8.2 Requirements of Policies ............................................................................... 22
Section 8.3 Notice of Damage, Destruction or Condemnation ......................................... 22
Section 8.4 Damage and Destruction ................................................................................ 22
Section 8.5 Condemnation and Loss of Title .................................................................... 23
ARTICLE IX
SPECIAL COVENANTS
Section 9.1 Tax Covenants ............................................................................................... 23
Section 9.2 Maintenance of Existence .............................................................................. 23
Section 9.3 Financial Records and Statements ................................................................. 23
Section 9.4 Certification as to No Default and Tax Compliance ...................................... 24
Section 9.5 Further Assurances......................................................................................... 24
Section 9.6 Assignment by Local Government ................................................................ 24
Section 9.7 Continuing Disclosure ................................................................................... 24
Section 9.8 Other Indebtedness......................................................................................... 27
Section 9.9 Additional Indebtedness................................................................................. 27
Section 9.10 Litigation; Material Change ........................................................................... 29
ARTICLE X
DEFAULTS AND REMEDIES
Section 10.1 Events of Default ........................................................................................... 29
Section 10.2 Acceleration ................................................................................................... 30
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TABLE OF CONTENTS (cont.)
Page
-iii-
Section 10.3 Other Remedies .............................................................................................. 30
Section 10.4 Delay and Waiver .......................................................................................... 30
ARTICLE XI
MISCELLANEOUS
Section 11.1 State Aid Intercept ......................................................................................... 31
Section 11.2 Successors and Assigns.................................................................................. 31
Section 11.3 Amendments .................................................................................................. 31
Section 11.4 Limitation of Local Government's Liability .................................................. 31
Section 11.5 Applicable Law .............................................................................................. 31
Section 11.6 Severability .................................................................................................... 31
Section 11.7 Notices ........................................................................................................... 32
Section 11.8 Right to Cure Default ..................................................................................... 32
Section 11.9 Term of Agreement ........................................................................................ 32
Section 11.10 Counterparts ................................................................................................... 32
Exhibit A Form of Local Bond
Exhibit B Description of the Project
Exhibit C Pending or Threatened Actions, Suits, Proceedings, or Investigations
Exhibit D Form of Requisition
Exhibit E Operating Data
Exhibit F Form of Opinion of Counsel to the Local Government
Exhibit G Form of Certification as to No Default and Tax Compliance
Exhibit H Description of Special Use Arrangements
Exhibit I Form of Annual Budget
Exhibit J Existing Parity Bonds
Schedule 1.1 Final Terms
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LOCAL BOND SALE AND FINANCING AGREEMENT
This LOCAL BOND SALE AND FINANCING AGREEMENT is dated as of
September 17, 2021, and is between the VIRGINIA RESOURCES AUTHORITY, a public
body corporate and a political subdivision of the Commonwealth of Virginia ("VRA"), and the
COUNTY OF PITTSYLVANIA, VIRGINIA, a political subdivision of the Commonwealth of
Virginia (the "Local Government").
A. VRA intends to issue its Related Series of VRA Bonds, as hereinafter defined,
and to use a portion of the proceeds thereof to acquire from the Local Government the Local
Bond, as hereinafter defined.
B. VRA and the Local Government wish to set forth herein certain terms, conditions
and provisions related to the purchase of the Local Bond, the application of the proceeds thereof,
the payment of the debt service thereon and the security therefor, and the use and maintenance of
the Related Financed Property, as hereinafter defined.
NOW, THEREFORE, VRA and the Local Government agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Each capitalized term contained in this Agreement has the
meaning set forth below:
"2018 Local Bond" means the IDA's $1,803,802 Lease Revenue Bond (County
Projects), Series 2018A dated [________], 2018.
"2021C Acquisition Fund" has the meaning set forth in the Related Supplemental
Series Indenture.
"Act" means the Virginia Resources Authority Act, Chapter 21, Title 62.1 of the Code of
Virginia of 1950, as amended.
"Agreement" means this Local Bond Sale and Financing Agreement dated the date first
written above, between VRA and the Local Government, as modified, altered, amended or
supplemented in accordance with the terms hereof.
"Annual Budget" means the budget of the System for each Fiscal Year.
"Business Day" means any day on which commercial banking institutions are generally
open for business in New York, New York and Richmond, Virginia.
"Closing Date" means November 17, 2021 or such other date as may be determined by
VRA.
"Consulting Engineer" means the Local Engineer or the Outside Engineer.
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"Effective Date" means September 17, 2021, which is the deadline for the Local
Government to provide an executed copy of this Agreement to VRA.
"Event of Default" has the meaning set forth in Section 10.1.
"Existing Parity Bonds" has the meaning set forth in Section 2.2(n).
"Financing Parameters" means the parameters established by the governing body of
the Local Government regarding the terms and conditions of the Local Bond, which may include
a maximum par amount, maximum "true" interest cost or targeted savings.
"Fiscal Year" means the 12-month period beginning July 1 of one year and ending on
June 30 of the following year, or if the Local Government has established another 12-month
period as its annual accounting period such other 12-month period.
"Government Obligations" means direct obligations of, or obligations the payment of
the principal of and interest on which is unconditionally guaranteed by, the United States of
America.
"IDA" means the Industrial Development Authority of Pittsylvania County, Virginia.
"Local Account" means the local account established for the Local Bond within the
2021C Acquisition Fund.
"Local Authorization" means the bond resolution adopted on August 17, 2021 by a
majority of the members of the governing body of the Local Government approving (i) the
transactions contemplated by and authorizing the execution and delivery of the Local Bond
Documents and (ii) the execution, issuance and sale of the Local Bond subject to the Financing
Parameters.
"Local Bond" means the Local Government's Taxable Solid Waste System Revenue and
Refunding Bond, Series 2021B (Convenience Center Project), issued in the original principal
amount set forth in Schedule 1.1, as such bond may be amended or modified.
"Local Bond Documents" means this Agreement and the Local Tax Document.
"Local Engineer" means an officer or employee of the Local Government so designated
in writing by a Local Representative, which officer or employee (i) is licensed as a professional
engineer in Virginia, (ii) has recognized standing and experience in the design and construction
of facilities similar to the Project and (iii) is subject to VRA's reasonable approval.
"Local Government" means the County of Pittsylvania, Virginia.
"Local Representative" means (i) the Chairman or Vice Chairman of the Local
Government, (ii) the Administrator of the Local Government and (iii) any other official or
employee of the Local Government authorized by resolution of the governing body of the Local
Government to perform the act or sign the document in question.
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"Local Tax Document" means the Nonarbitrage Certificate and Tax Compliance
Agreement dated the Closing Date, between the Local Government and VRA, as modified,
altered, amended and supplemented.
"Master Indenture" means the Master Indenture of Trust dated as of December 1, 2003,
between VRA and the Trustee, as modified, altered, amended and supplemented in accordance
with its terms.
"Net Revenues Available for Debt Service" means the Revenues less amounts
necessary to pay Operation and Maintenance Expenses.
"Operation and Maintenance Expenses" means the costs of operating and maintaining
the System determined under generally accepted accounting principles, exclusive of (i) interest
on any debt payable from Revenues, (ii) depreciation and other items not requiring the
expenditure of cash, (iii) any amounts expended for capital replacements, repairs and
maintenance not recurring either annually or biannually, depending on the customary practice of
performing operation and maintenance, or reserves therefor, and (iv) reserves for administration,
operation and maintenance occurring in the normal course of business.
"Outside Engineer" means a firm of independent consulting engineers with recognized
standing in the field of water and sewer engineering and licensed as professional engineers in
Virginia that the Local Government designates in writing, subject to VRA's reasonable approval.
"Parity Bonds" means the bonds and other obligations of the Local Government secured
by a pledge of Revenues on a parity with the lien of the pledge of Revenues that secures the
Local Bond.
"Proceeds Requested" means $[________] plus an amount necessary to provide for the
escrow or pay off related to the Refunded Bond, subject to the Financing Parameters, together
with an amount to pay related costs of issuance or such other amount requested in writing by the
Local Government and approved by VRA prior to the Sale Date.
"Project" means the project described in Exhibit B.
"Project Budget" means the budget for the Project set forth in Schedule 1.1.
"Project Costs" means the costs of the Project to the extent such costs are included in
the definition of "cost" set forth in Section 62.1-199 of the Act, and includes the refunding of
obligations of VRA or the Local Government issued to finance or refinance "costs" set forth in
Section 62.1-199 of the Act.
"Purchase Price" has the meaning set forth in Schedule 1.1 and represents the amount
received by the Local Government from the sale of the Local Bond to VRA. The Purchase Price
of the Local Bond will be determined by adding to or subtracting from the par amount of the
Local Bond the Local Government's share of the net original issue premium or discount on the
Related Series of VRA Bonds and by subtracting from the par amount of the Local Bond the
Local Government's share of VRA's expenses as set forth in Section 3.2 and the Local
Government's share of the deposit on the Closing Date to any applicable VRA Reserve. It is
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acknowledged that the Purchase Price does not include any accrued interest on the Local Bond
from its dated date to the Closing Date.
"Qualified Independent Consultant" means an independent professional consultant
having the skill and experience necessary to provide the particular certificate, report or approval
required by the provision of this Agreement in which such requirement appears, including
without limitation an Outside Engineer and an independent certified public accountant or firm of
independent certified public accountants; provided, however, all Qualified Independent
Consultants are subject to the reasonable approval of VRA.
"Refunded Bond" means the outstanding amount of the 2018 Local Bond ot be
refunded as agreed in writing by the Local Government and VRA prior to the Sale Date.
"Registrar" means the officer or employee of the Local Government designated under
the Local Authorization to maintain the registration books for the Local Bond.
"Related Financed Property" means the land, building, equipment and other property,
the acquisition, construction, renovation, or equipping of which was financed by the Local Bond
as part of the Project.
"Related Portion of VRA Bonds" means the portion of the Related Series of VRA
Bonds allocable to the Local Bond (as determined by VRA), including any bonds issued by VRA
to refund such Related Series of VRA Bonds in whole or in part.
"Related Series of VRA Bonds" means the Virginia Resources Authority Infrastructure
and State Moral Obligation Revenue Bonds (Virginia Pooled Financing Program), Series 2021C
(Tax-Exempt) (or such other series of Infrastructure and State Moral Obligation Revenue Bonds
(Virginia Pooled Financing Program) that is specified in Schedule 1.1), in the original aggregate
principal amount set forth in Schedule 1.1, and, unless the Local Government receives notice to
the contrary from VRA, any bonds issued by VRA to refund the Related Series of VRA Bonds in
whole or in part.
"Related Supplemental Series Indenture" means the Fifty-Second Supplemental
Series Indenture of Trust dated as of November 1, 2021, between VRA and the Trustee, as
modified, altered, amended and supplemented in accordance with its terms and those of the
Master Indenture.
"Revenue Fund" has the meaning set forth in the Master Indenture.
"Revenues" means (i) all rates, fees, rentals, charges and other income properly
allocable to the System under generally accepted accounting principles or resulting from the
Local Government's ownership or operation of the System and all rights to receive the same,
whether now existing or hereafter coming into existence, exclusive of user and other deposits
subject to refund until such deposits have become the Local Government's property, (ii) the
proceeds of any insurance covering business interruption loss relating to the System, (iii) interest
on any money or securities related to the System held by or on behalf of the Local Government,
and (iv) any other income from other sources now or hereafter pledged or specifically made
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available by or on behalf of the Local Government to or for the payment of Operation and
Maintenance Expenses or debt service on Parity Bonds.
"Sale Date" means October 27, 2021, or such other date specified in Schedule 1.1.
"Subordinate Debt" means obligations of the Local Government secured by a pledge of
Revenues expressly made subordinate to the pledge securing the Local Bond and any other
Parity Bonds, and any obligations to make deposits related to reserve funds, rebate funds and
similar funds or accounts established for the benefit of the Local Bond or any other Parity Bonds.
"Supplemental Interest" has the meaning set forth in Section 6.1.
"System" means all plants, systems, facilities, equipment or property owned operated or
maintained by the Local Government and used as the Pittsylvania County Landfill in connection
with the collection, management, disposal, incineration, storage, recycling or conversion into
energy of solid waste as the same may exist from time to time, and includes the Related Financed
Property.
"Trustee" means U.S. Bank National Association, Richmond, Virginia, as trustee under
the Master Indenture and the Related Supplemental Series Indenture, or its successors serving in
such capacity.
"Virginia SNAP" means the Commonwealth of Virginia State Non-Arbitrage Program.
"VRA" means the Virginia Resources Authority, a public body corporate and a political
subdivision of the Commonwealth of Virginia.
"VRA Bonds" means the Related Series of VRA Bonds and any additional bonds issued
under the Master Indenture.
"VRA Reserve" means any one or more of the Capital Reserve Fund, the Infrastructure
Debt Service Reserve Fund, the Operating Reserve Fund, a CRF Credit Facility or an
Infrastructure Revenue DSRF Facility, each as defined in the Master Indenture.
Section 1.2 Rules of Construction. The following rules apply to the construction of
this Agreement unless the context requires otherwise:
(a) Singular words connote the plural number as well as the singular and vice
versa.
(b) Words importing the redemption or calling for redemption of the Local
Bond do not refer to or connote the payment of the Local Bond at its stated maturity.
(c) All references in this Agreement to particular Articles, Sections or
Exhibits are references to Articles, Sections or Exhibits of this Agreement unless otherwise
indicated.
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(d) The headings and table of contents as used in this Agreement are solely
for convenience of reference and do not constitute a part of this Agreement and do not affect its
meaning, construction or effect.
ARTICLE II
REPRESENTATIONS
Section 2.1 Representations by VRA. VRA represents to the Local Government as
follows:
(a) VRA is a duly created and validly existing public body corporate and
political subdivision of the Commonwealth of Virginia vested with the rights and powers
conferred upon it under the Act.
(b) VRA has full right, power and authority to (i) issue, sell and deliver the
Related Series of VRA Bonds, (ii) direct the Trustee to use a portion of the proceeds of the
Related Series of VRA Bonds to purchase the Local Bond from the Local Government as
contemplated under the Related Supplemental Series Indenture and this Agreement and
(iii) carry out and consummate all other transactions contemplated by this Agreement.
(c) VRA has duly authorized, executed and delivered this Agreement, and this
Agreement constitutes a legal, valid and binding obligation of VRA enforceable against VRA in
accordance with its terms.
Section 2.2 Representations by Local Government. The Local Government
represents to VRA as follows:
(a) The Local Government is a duly created and validly existing Virginia
"local government" (as defined in Section 62.1-199 of the Act) and is vested with the rights and
powers conferred upon it by Virginia law.
(b) The Local Government has full right, power and authority to (i) adopt the
Local Authorization and execute and deliver the Local Bond Documents and all related
documents, (ii) issue and sell the Local Bond to VRA and deliver the Local Bond to the Trustee,
(iii) own and operate the System, (iv) undertake the Project and (v) carry out and consummate all
of the transactions contemplated by the Local Authorization, the Local Bond and the Local Bond
Documents.
(c) The Local Authorization authorized the execution and delivery of this
Agreement, and this Agreement is in substantially the same form as presented to the Local
Government's governing body at its meeting at which the Local Authorization was adopted. The
Local Authorization was filed in the Circuit Court of the County of Pittsylvania, Virginia, on
August [__], 2021.
(d) The Local Government has obtained all governmental permits, licenses,
registrations, certificates, authorizations and approvals required to have been obtained as of the
Effective Date for the Local Government's (i) adoption of the Local Authorization, (ii) execution
and delivery of the Local Bond Documents and the Local Bond, (iii) performance of its
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obligations under the Local Bond Documents and the Local Bond, (iv) the undertaking of the
Project and (v) the operation and use of the System. The Local Government knows of no reason
why any such required governmental permits, licenses, registrations, certificates, authorizations
or approvals not required to be obtained by the Effective Date cannot be obtained as required in
the future.
(e) The Local Government has executed and delivered this Agreement, and
this Agreement constitutes a legal, valid and binding obligation of the Local Government
enforceable against the Local Government in accordance with its terms.
(f) When executed and delivered in accordance with the Local Authorization
and this Agreement, the Local Bond will have been executed and delivered by duly authorized
officials of the Local Government and will constitute a legal, valid and binding limited
obligation of the Local Government enforceable against the Local Government in accordance
with its terms.
(g) The issuance of the Local Bond and the execution and delivery of the
Local Bond Documents and the performance by the Local Government of its obligations
thereunder are within the powers of the Local Government and will not conflict with, or
constitute a breach or result in a violation of, (i) to the best of the Local Government's
knowledge, any federal or Virginia constitutional or statutory provision, including the Local
Government's charter or articles of incorporation, if any, (ii) any agreement or other instrument
to which the Local Government is a party or by which it is bound or (iii) any order, rule,
regulation, decree or ordinance of any court, government or governmental authority having
jurisdiction over the Local Government or its property.
(h) The Local Government is not in default in the payment of the principal of
or interest on any of its indebtedness for borrowed money and is not in default under any
instrument under and subject to which any indebtedness for borrowed money has been incurred.
No event or condition has happened or existed, or is happening or existing, under the provisions
of any such instrument, including but not limited to this Agreement, which constitutes, or which,
with notice or lapse of time, or both, would constitute an event of default thereunder.
(i) The Local Government (i) to the best of the Local Government's
knowledge, is not in violation of any existing law, rule or regulation applicable to it in any way
that would have a material adverse effect on its financial condition or its ability to perform its
obligations under the Local Bond or the Local Bond Documents and (ii) is not in default under
any indenture, mortgage, deed of trust, lien, lease, contract, note, order, judgment, decree or
other agreement, instrument or restriction of any kind to which the Local Government is a party
or by which it is bound or to which any of its assets is subject that would have a material adverse
effect on its financial condition or its ability to perform its obligations under the Local Bond and
the Local Bond Documents. The Local Government's execution and delivery of the Local Bond
and the Local Bond Documents and its compliance with the terms and conditions thereof will not
conflict with or result in a breach of or constitute a default under any of the foregoing.
(j) The Local Government reasonably expects that, unless otherwise
permitted by the terms of the Local Bond Documents or approved by VRA, the Local
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Government will own, operate and control the System at all times during the term of the Local
Bond.
(k) Except as set forth in Exhibit C, there has not been served upon nor, to the
best of the Local Government's knowledge, threatened against the Local Government, any
actions, suits, proceedings or investigations of a legal, equitable, regulatory, administrative or
legislative nature (i) affecting the creation, organization or existence of the Local Government or
the title of its officers to their respective offices, (ii) seeking to prohibit, restrain or enjoin the
approval, execution, delivery or performance of the Local Authorization or the Local Bond
Documents or the issuance or delivery of the Local Bond, (iii) in any way contesting or affecting
the validity or enforceability of the Local Bond, the Local Authorization, the Local Bond
Documents or any agreement or instrument relating to any of the foregoing, (iv) in which a
judgment, order or resolution may have a material adverse effect on the Local Government or its
business, assets, condition (financial or otherwise), operations or prospects or on its ability to
perform its obligations under the Local Authorization, the Local Bond Documents or the Local
Bond or (v) affecting the Project.
(l) The financial statements, applications and other information that the Local
Government furnished to VRA in connection with this Agreement fairly and accurately portray
the Local Government's financial condition, as of their dates, and there has been no material
adverse change in the financial condition of the Local Government since the date of the financial
statements provided to VRA in connection with this Agreement.
(m) Nothing that would constitute an Event of Default hereunder has occurred
and is continuing, and no event or condition exists that with the passage of time or the giving of
notice, or both, would constitute an Event of Default hereunder.
(n) A list of all Parity Bonds that are outstanding on the date of this
Agreement is attached as Exhibit J (the "Existing Parity Bonds").
(o) Except for the Existing Parity Bonds, there is no indebtedness of the Local
Government secured by a pledge of Revenues prior to or on a parity with the lien of the pledge
of Revenues that secures the Local Bond.
Section 2.3 Representations Remade as of the Sale Date. (a) It shall be a condition
precedent of VRA's obligation to sell the Related Series of VRA Bonds that the Local
Government's representations and warranties set forth in Section 2.2 be true and accurate in all
respects on the Sale Date.
(b) If prior to the Sale Date, any representation or warranty set forth in
Section 2.2 becomes untrue or inaccurate, then the Local Government shall notify VRA within
one Business Day of becoming aware of such facts, and VRA, in its sole and absolute discretion,
shall determine whether to sell VRA Bonds on behalf of the Local Government, which series of
VRA Bonds (if any) to sell on behalf of the Local Government and any additional conditions
precedent to the sale of such VRA Bonds or the purchase of the Local Bond.
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ARTICLE III
PURCHASE OF THE LOCAL BOND
Section 3.1 Purchase of the Local Bond. (a) Subject to the terms and conditions and
in reliance upon the representations, warranties and agreements set forth or incorporated herein,
VRA shall purchase, solely from the proceeds of the Related Series of VRA Bonds, all, but not
less than all, of the Local Bond from the Local Government, and the Local Government shall,
subject to the Financing Parameters, sell and deliver to VRA the Local Bond for the Purchase
Price. The Local Government acknowledges that the Purchase Price is determined by VRA, is
subject to VRA's Purchase Price Objective (as defined below) and market conditions as
described below, and is expected to be substantially equal to the Proceeds Requested. The Local
Government shall issue the Local Bond pursuant to the Local Authorization and in substantially
the form of Exhibit A to this Agreement. As a condition of VRA entering into this Agreement,
the Local Government shall deliver to VRA a copy of the Local Authorization as adopted prior
to the date hereof.
(b) The Local Government acknowledges that VRA has advised the Local
Government that its objective is to pay the Local Government the Purchase Price for its Local
Bond which in VRA's judgment reflects the market value of the Local Bond ("Purchase Price
Objective"), taking into consideration the Financing Parameters, the purchase price received by
VRA for the Related Series of VRA Bonds, the underwriters' discount and other issuance costs
of the Related Series of VRA Bonds and other market conditions relating to the sale of the
Related Series of VRA Bonds. The Local Government further acknowledges that VRA has
advised it that such factors may result in the Local Bond having a value other than par and that in
order to receive an amount of proceeds that is substantially equal to the Proceeds Requested, the
Local Government may need to issue the Local Bond with a par amount that is greater or less
than the Proceeds Requested. The Local Government shall not issue the Local Bond if doing so
would violate any Financing Parameter. The Local Government shall issue the Local Bond at a
par amount that provides, to the fullest extent practicable given VRA's Purchase Price Objective,
a Purchase Price at least equal to the Proceeds Requested, all in accordance with the Local
Authorization. The Local Government acknowledges that the Purchase Price will be less than the
Proceeds Requested if any Financing Parameter prevents VRA from generating a Purchase Price
substantially equal to the Proceeds Requested, based upon VRA's Purchase Price Objective.
Section 3.2 Issuance Expenses. VRA shall pay, or cause to be paid, from the
proceeds of the Related Series of VRA Bonds all expenses incident to the performance of VRA's
obligations under and the fulfillment of the conditions imposed by this Agreement in connection
with the issuance, sale and delivery of the Related Series of VRA Bonds and the purchase of the
Local Bond on the Closing Date, including, but not limited to: (i) the cost, if any, of preparing
and delivering the Related Series of VRA Bonds; (ii) the cost of preparing, printing and
delivering the Preliminary Official Statement and the Official Statement for the Related Series of
VRA Bonds and any amendment or supplement thereto; (iii) the fees and expenses of the
financial advisor(s) and bond counsel to VRA; and (iv) all other costs and expenses incurred by
VRA. The Local Government shall pay all expenses of the Local Government incident to the
issuance, sale and delivery of the Local Bond, including, but not limited to the fees and
disbursements of the financial advisor, counsel and bond counsel to the Local Government from
the Purchase Price or other funds of the Local Government.
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Section 3.3 Schedule 1.1. VRA shall complete Schedule 1.1, which shall set forth,
among other things, the principal amount, interest rates, payment schedule and Purchase Price
with respect to the Local Bond and the principal amount of the Related Series of VRA Bonds on
or after the Sale Date. VRA shall deliver the completed Schedule 1.1 to the Local Government
and shall attach Schedule 1.1 to this Agreement. Upon delivery to the Local Government, the
completed Schedule 1.1 shall become a part of this Agreement the same as if it were a part
hereof on the Effective Date.
Section 3.4 Conditions Precedent to Purchase of the Local Bond. VRA shall not
be required to cause the Trustee to purchase the Local Bond unless:
(a) VRA has received the following, all in form and substance satisfactory to
VRA:
(1) Certified copies of the Local Authorization and all other
ordinances and resolutions of the Local Government relating to the Local Bond
Documents and the Local Bond, if any.
(2) A certificate of the appropriate officials of the Local Government
dated the Closing Date as to the matters set forth in Section 2.2 and Section 2.3 (to the
extent applicable), including appropriate certifications regarding the Local Bond
Documents, and such other matters as VRA may reasonably require.
(3) Evidence that the Local Government has performed and satisfied
all of the terms and conditions contained in this Agreement to be performed and satisfied
by it as of such date.
(4) An opinion of counsel to the Local Government in substantially the
form attached as Exhibit F.
(5) An opinion of bond counsel to the Local Government in form and
substance reasonably satisfactory to VRA.
(6) Evidence that the Local Government has complied with the
insurance provisions set forth in Section 8.1 and Section 8.2.
(7) The executed Local Bond and original executed counterparts of the
Local Tax Document.
(8) A certificate of the Consulting Engineer giving the Consulting
Engineer's estimate of the construction portion of the total Project Costs to be financed
with the proceeds of the Local Bond, which estimate must be in an amount and otherwise
compatible with the financing plan described in the Project Budget.
(9) A certificate of the Consulting Engineer (i) to the effect that the
Purchase Price and funds available from the other sources specified in the Project Budget
will be sufficient to pay the construction portion of the estimated Project Costs and (ii)
specifying the date the Local Government is expected to complete the Project.
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(10) A certificate of a Local Engineer or a Qualified Independent
Consultant, including supporting documentation, to the effect that during the first two
complete Fiscal Years following the estimated completion date of the Project, the
projected Net Revenues Available for Debt Service will satisfy the Local Government's
rate covenant under Section 5.2(a). In providing this certificate, the Outside Engineer or
Qualified Independent Consultant may take into consideration future System rate
increases, provided that such rate increases have been duly approved by the Local
Government's governing body and any other person or entity required to give approval
for the rate increase to become effective. In addition, the Outside Engineer or Qualified
Independent Consultant may take into consideration (i) additional future revenues to be
derived under existing contractual arrangements entered into by the Local Government
and from reasonable estimates of growth in the Local Government's consumer base and
(ii) transfers in from the Local Government's general fund as permitted under Section 5.5.
(11) A certificate of the Consulting Engineer to the effect that (i) all
governmental permits, licenses, registrations, certificates, authorizations and approvals
for the undertaking of the Project, as enumerated in the certificate, and the operation and
use of the System required to have been obtained as of the Closing Date have been
obtained and (ii) the Consulting Engineer knows of no reason why any such required
governmental permits, licenses, registrations, certificates, authorizations and approvals
for the undertaking of the Project, as enumerated in the certificate, and the operation and
use of the System cannot be obtained as required in the future.
(12) Evidence that the Local Government is in compliance with the
construction contract provisions set forth in Section 7.13 with respect to any existing
contracts as of the Closing Date.
(13) Evidence that the Local Government has satisfied all conditions
precedent to the issuance of the Local Bond as a "Parity Bond" under the financing
documents for the Existing Parity Bonds.
(14) Such other documentation, certificates and opinions as VRA may
reasonably require as set forth in Schedule 1.1.
(b) The initial purchasers of the Related Series of VRA Bonds have paid in
full and VRA has accepted the purchase price for the Related Series of VRA Bonds on the
Closing Date. It is understood that the sole source of funds to pay the Purchase Price is a portion
of the proceeds of the Related Series of VRA Bonds.
ARTICLE IV
USE OF PURCHASE PRICE
Section 4.1 Deposit of Purchase Price; Investment of Amounts in Local Account.
(a) On the Closing Date, VRA shall cause the Trustee to deposit the Purchase Price into the
Local Account and to apply the Purchase Price and the earnings thereon as set forth in the
Related Supplemental Series Indenture, this Agreement and the Local Tax Document.
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(b) The Local Government acknowledges and consents to the investment of
the Purchase Price and the earnings thereon in Virginia SNAP.
Section 4.2 Agreement to Accomplish Project. (a) The Local Government shall
cause the Project to be acquired, constructed, expanded, renovated, equipped or financed as
described in Exhibit B and in accordance with the Project Budget, this Agreement, the Local Tax
Document and the plans, specifications and designs prepared by the Consulting Engineer and
approved by the Local Government. The Local Government shall use its best efforts to
complete, or cause to be completed, the Project by the date set forth in the certificate delivered
under Section 3.4(a)(9). The Local Government shall obtain the approval of all applicable
regulatory agencies of all plans, specifications and designs for the Project. The Local
Government shall maintain complete and accurate books and records of the Project Costs and
permit VRA or the Trustee through their representatives to inspect such books and records at any
reasonable time.
(b) Upon completion of the Project, the Local Government shall promptly
deliver to VRA and the Trustee a certificate signed by a Local Representative and by the
Consulting Engineer stating (i) that the Project has been completed substantially in accordance
with this Article and in substantial compliance with all material applicable laws, ordinances,
rules and regulations, (ii) the date of such completion and (iii) that all certificates of occupancy
or other material permits then necessary for the use, occupancy and operation of the Related
Financed Property have been issued or obtained. Such certificate shall be accompanied by a
copy of the final requisition submitted to the Trustee pursuant to Section 4.3, including Schedule
1 thereto.
(c) The Local Government shall cause the deposit of a portion of the proceeds
of the Local Bond, together with other available funds of the Local Government (if any), to be
transferred to the holder of the Refunded Bond in an amount sufficient to pay the outstanding
principal of and premium, if any, and interest on the Refunded Bond.
(d) If upon completion of the Project and payment of all related costs of
issuance, there is a balance remaining in the Local Account, the Trustee, at the written direction
of the Local Government, shall apply any remaining balance to pay, or reimburse the Local
Government for previously-paid, interest on the Local Bond or in such other manner that is
permitted under the Act and will not, in the opinion of a nationally-recognized bond counsel
delivered to VRA and the Trustee, have an adverse effect on the tax status of the Related Series
of VRA Bonds.
Section 4.3 Disbursement of Purchase Price and Earnings. Except as provided in
Section 4.2(c), the Local Government shall apply the amounts in the Local Account solely and
exclusively to the payment or reimbursement of the Local Government for the Project Costs.
Not more frequently than once per calendar month, the Trustee shall disburse amounts from the
Local Account to the Local Government or as directed by the Local Government upon the
Trustee's receipt of the following:
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(a) A requisition (upon which the Trustee and VRA shall be entitled to rely)
signed by a Local Representative and containing all information called for by, and otherwise
being in the form of, Exhibit D (including the Schedules thereto).
(b) Receipts, vouchers, statements, bills of sale or other evidence of payment
of the related Project Costs.
(c) If any requisition includes an item for payment for labor or to contractors,
builders or materialmen:
(1) a certificate, signed by a Consulting Engineer, stating that such
work was actually performed or such materials, supplies or equipment were actually
furnished or installed in or about the construction of the Project; and
(2) a certificate, signed by a Local Representative (that may rely on
representations of counsel or a title insurance agency reasonably acceptable to VRA),
stating that no notice of any lien, right to lien or attachment upon, or claim affecting the
right to receive payment of, any of the money payable under the requisition to any of the
persons, firms or corporations named in it has been received, or if any notice of any such
lien, attachment or claim has been received, such lien, attachment or claim has been
released or discharged or will be released or discharged upon payment of the requisition.
(d) If any requisition includes an item for payment of the cost of acquisition
of any lands or easements, or any rights or interests in or relating to lands, there shall also be
attached to such requisition:
(1) a certificate, signed by a Consulting Engineer, stating that such
lands, easements, rights or interests are being acquired and are necessary or convenient
for the construction of the Project; and
(2) a certificate, signed by a Consulting Engineer (that may rely on
representations of counsel or a title insurance agency reasonably acceptable to VRA),
stating that upon payment therefor the Local Government will have title in fee simple to,
or easements, rights or interests sufficient for the purposes of, the Project over and
through the subject lands.
Following VRA's approval of each such requisition and accompanying invoice(s) and
certificate(s), which approval will not unreasonably be withheld, the Trustee shall pay the
requisition from the Local Account in accordance with the instructions in such requisition.
The Local Government agrees that any amounts disbursed to it or for its account
from the Local Account pursuant to this Section 4.3 will be (i) immediately applied to
reimburse the Local Government for Project Costs it has already paid or (ii) actually spent
to pay Project Costs not later than five banking days after receipt.
Section 4.4 No Sufficiency Warranty by VRA; Local Government Required to
Complete Project. VRA makes no warranty, either express or implied, that the Purchase Price
will be sufficient to pay all or any particular portion of the Project Costs. If the Purchase Price is
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not sufficient to pay in full the cost of the Project, the Local Government shall complete the
Project at its own expense and shall not be entitled to any reimbursement therefor from VRA or
any abatement, diminution or postponement of its payments under the Local Bond or this
Agreement.
ARTICLE V
PLEDGE AND SECURITY
Section 5.1 Pledge. Subject to the Local Government's right to apply Revenues to the
payment of Operation and Maintenance Expenses, the Revenues are hereby pledged to secure the
payment of the principal of and premium, if any, and interest on the Local Bond and the payment
and performance of the Local Government's obligations under this Agreement on a parity with
any Parity Bonds. This pledge shall be valid and binding from and after the Closing Date. The
Revenues, as received by the Local Government, shall immediately be subject to the lien of this
pledge without any physical delivery of them or further act. Except as stated above, the lien of
this pledge shall have priority over all other obligations and liabilities of the Local Government
payable from Revenues, and the lien of this pledge shall be valid and binding against all parties
having claims of any kind against the Local Government regardless of whether such parties have
notice of this pledge. Until the occurrence and continuation of an Event of Default, the Local
Government may, after the application each month of Revenues to the payment of the Operation
and Maintenance Expenses and debt service on the Local Bond and any other Parity Bonds, use
the Revenues for any lawful purpose.
Section 5.2 Rate Covenant. (a) The Local Government shall fix and collect rates,
fees and other charges for the use of and for services furnished or to be furnished by its System,
and will from time to time revise such rates, fees and other charges, or provide other funds, so
that in each Fiscal Year the Net Revenues Available for Debt Service, and such other funds that
are provided by the Local Government, will equal at least 100% of the amount required during
the Fiscal Year to pay the principal of and interest on the Local Bond and all other Parity Bonds.
(b) If, for any reason, the Net Revenues Available for Debt Service, and such
other funds provided by the Local Government, are insufficient to satisfy the covenant set forth
in subsection (a), the Local Government shall (i) on its demand, pay to VRA a rate maintenance
penalty fee in an amount of $5,000, and (ii) within 90 days adjust and increase its rates, fees and
other charges or reduce its Operation and Maintenance Expenses so as to provide sufficient Net
Revenues Available for Debt Service to satisfy such requirement.
(c) On or before the last day of each Fiscal Year, the Local Government shall
review the adequacy of its rates, fees and other charges for the next Fiscal Year, other fund
sources that would be allocated to support the System, and, if such review indicates the Local
Government's rates, fees, other charges and other fund sources will be allocated to support the
system will be insufficient to satisfy the rate covenant in subsection (a), the Local Government
shall promptly increase its rates, fees and other charges or reduce its Operation and Maintenance
Expenses to cure any deficiency.
Section 5.3 Annual Budget of the System. Not less than 15 days before the first day
of each Fiscal Year, the Local Government shall submit to its governing body and to VRA a
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copy of a preliminary annual budget, containing all information called for by, and otherwise
being in the form of, Exhibit I to this Agreement, for such Fiscal Year setting forth a schedule of
the rates, fees and other charges to be imposed by the Local Government, the Revenues
estimated to be generated thereby and the expenditures anticipated by the Local Government for
operations, maintenance, repairs, replacements, improvements, debt service and other purposes.
The Local Government shall adopt, prior to the first day of each Fiscal Year, a budget for such
Fiscal Year. The Local Government shall ensure that the adopted budget contains the
information required to be included in the preliminary budget. Such budget as approved by the
Local Government's governing body is referred to in this Agreement as the Annual Budget. The
Local Government may at any time during any Fiscal Year amend the Annual Budget for such
Fiscal Year so long as such amendment does not result in an Event of Default. The Local
Government shall promptly submit to VRA, in an electronic format, a copy of the Annual
Budget and any amendments thereto.
Section 5.4 Qualified Independent Consultant's Report. (a) If at the end of any
Fiscal Year, the Local Government is not in compliance with the rate covenant made by the
Local Government in Section 5.2(a), within 210 days after the end of such Fiscal Year, the Local
Government shall obtain a report from the Qualified Independent Consultant. The Local
Government shall ensure that the report gives advice and makes recommendations as to the
proper maintenance, repair, replacement and operation of the System for the next ensuing Fiscal
Year and estimating the costs thereof as to the rates, fees, and other charges which should be
established by the Local Government to satisfy the rate covenant in Section 5.2(a). The Local
Government shall promptly furnish a copy of such report to VRA and, subject to Section 5.4(b),
take measures to implement the recommendations of the Qualified Independent Consultant
within 90 days of obtaining such report.
(b) If the Local Government determines that the Qualified Independent
Consultant's recommendations are impractical or inappropriate, the Local Government may in
lieu thereof adopt other procedures which the Local Government believes will bring it into
compliance with the rate covenant made by the Local Government in Section 5.2(a) when such
measures have been implemented and become fully effective. Such alternative plan shall be
filed with VRA not later than 30 days after receipt of the Qualified Independent Consultant's
report along with a detailed explanation of the Local Government's reason for rejecting the
Qualified Independent Consultant's recommendations. Notwithstanding anything herein to the
contrary, VRA reserves the right, in its sole discretion, to reject such alternate procedures and, to
the extent permitted by law, require the Local Government to comply with the Qualified
Independent Consultant's recommendations.
Section 5.5 Support Agreement. (a) No later than March 15 of each year beginning
March 15, 2022, the County Administrator of the Local Government (the "County
Administrator") shall notify VRA in writing of the amount by which Net Revenues Available for
Debt Service and other funds available to pay debt service is expected in the next ensuing Fiscal
Year to be insufficient to (i) satisfy the Rate Covenant and (ii) pay any amounts due under this
Agreement (collectively, the "Annual Deficiency Amount").
(b) The Local Government hereby directs the County Administrator to include
the Annual Deficiency Amount in the budget submitted to the governing body of the Local
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Government (the "Board") for the next ensuing Fiscal Year. The County Administrator shall
deliver to VRA within ten days after the adoption of the Local Government's budget for each
Fiscal Year, but not later than July 15 of each year, a certificate stating whether the Board has
approved and included an amount equal to the Annual Deficiency Amount for transfer to the
System in the adopted Local Government budget for such Fiscal Year.
(c) If at any time there is a failure of the Local Government to make a
payment of principal of or interest on the Local Bond to pay any amounts due under this
Agreement, the County Administrator shall request an appropriation from the Board in an
amount sufficient to cover the payment default.
(d) The Local Government agrees that the Board will consider each request
for appropriation made pursuant to subsection (c) above at its next regularly scheduled meeting
at which it is possible to satisfy any applicable notification requirement. The Local Government
shall notify VRA promptly after such meeting as to whether the amount so required was
appropriated. If the Board shall fail to make such appropriation, the County Administrator shall
add the amount of such requested appropriation to the Annual Deficiency Amount reported to the
Board for the next Fiscal Year.
(e) The Local Government shall pay to the Trustee the amount of any
appropriation made pursuant to subsection (c) of this Section. The Local Government and VRA
acknowledge that any amounts appropriated pursuant to this Section are pledged to secure the
payment of principal of and premium, if any, and interest on the Local Bond and amounts due
under this Agreement, as the case may be.
(f) The Board hereby undertakes a non-binding obligation to appropriate such
amounts as may be requested from time to time pursuant to subsections (b) and (c) above, to the
fullest degree and in such manner as is consistent with the Constitution and laws of the
Commonwealth of Virginia. The Board, while recognizing that it is not empowered to make any
binding commitment to make such appropriations in future Fiscal Years, hereby states its intent
to make such appropriations in future Fiscal Years, and hereby recommends that future Boards
do likewise.
ARTICLE VI
PAYMENT AND REDEMPTION OF LOCAL BOND
Section 6.1 Payment of Local Bond and Related Amounts. (a) Until the principal
of and premium, if any, and interest on the Local Bond and all other amounts payable under this
Agreement have been paid in full, the Local Government shall pay from the Revenues to the
Trustee or VRA, as applicable, the following amounts:
(1) to the Trustee, the amounts required by the Local Bond on such
dates and in such manner as provided for in the Local Bond – the term "interest," as used
in the Local Bond and this Agreement, includes Supplemental Interest, when and if
payable;
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(2) to the Trustee, or to VRA, no later than 15 days after VRA
provides notice to the Local Government, any amounts payable under the Local Tax
Document, including without limitation the costs of any rebate calculation agent;
(3) to VRA, on its demand, a late payment penalty in an amount equal
to 5.0% of the payment on the Local Bond not paid within 5 days after its due date;
(4) to the Trustee, the Local Government's share (as determined by
VRA) of the annual fees and expenses of the Trustee, less the Local Government's share
of the net earnings on the Revenue Fund, Infrastructure Revenue Debt Service Fund and
Moral Obligation Debt Service Fund established under the Master Indenture (as
determined by VRA), and the Local Government shall pay such amounts no later than 15
days after VRA or the Trustee sends to the Local Government a written bill for them; and
(5) to VRA, to the extent permitted by law, the reasonable costs and
expenses, including reasonable attorneys' fees, if any, incurred by VRA in connection
with (i) an Event of Default or default by the Local Government under this Agreement
(ii) any amendment to or discretionary action that VRA undertakes at the request of the
Local Government under this Agreement, any other document related to the Related
Series of VRA Bonds or the Local Bond or (iii) any claim, lawsuit or other challenge to
the Local Bond, the VRA Bonds or this Agreement that arises, at least in part, out of the
Local Government's authorization of its issuance of the Local Bond, and the Local
Government shall pay such amounts no later than 15 days after VRA or the Trustee sends
to the Local Government a written bill for them.
(b) If any failure of the Local Government to pay all or any portion of any
required payment of the principal of or premium, if any, or interest on the Local Bond results in a
withdrawal from or a drawing on any VRA Reserve, the interest rates applicable to the Local
Bond shall be increased to interest rates sufficient to reimburse the VRA Reserve for any
foregone investment earnings on the funds withdrawn therefrom and pay any interest, fees or
penalties assessed as a result of the withdrawal from or drawing on the VRA Reserve. The
increment of interest payable pursuant to the increase in rates shall be referred to as
"Supplemental Interest." The Local Government's obligation to pay Supplemental Interest shall
commence on the date of the withdrawal or drawing of funds from the VRA Reserve occasioned
by the Local Government's failure to pay a required payment or portion thereof as described
above (the "Supplemental Interest Commencement Date"). The Local Government's obligation
to pay Supplemental Interest shall terminate on the date on which the Local Government makes
all payments required but outstanding since the date of the initial failure to pay (the
"Supplemental Interest Termination Date"). From the Supplemental Interest Commencement
Date to the Supplemental Interest Termination Date, Supplemental Interest shall be due and
payable on the regularly scheduled interest payment dates provided for in the Local Bond. As
soon as reasonably possible after the Supplemental Interest Commencement Date and before the
next regularly scheduled interest payment date provided for in the Local Bond, VRA shall
deliver to the Local Government a certificate as to the increase in interest rates and the amount of
Supplemental Interest. The certificate shall set forth in reasonable detail the basis for the
increase in interest rates and the manner of calculation of the increase and the amount of
Supplemental Interest. Such certificate shall be conclusive (absent manifest error) as to the
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interest rate increase and amount of Supplemental Interest set forth therein. In determining the
interest rate increase and the amount of Supplemental Interest, VRA may use any reasonable
averaging and attribution methods.
(c) The Local Government shall pay the amounts described above and make
payments as scheduled under the Local Bond despite any amount being withdrawn from or
drawn on a VRA Reserve pursuant to the Master Indenture.
Section 6.2 Defeasance and Redemption of Local Bond. (a) The Local
Government shall not defease or redeem the Local Bond (in whole or in part), except as provided
in this Section 6.2.
(b) The Local Government shall satisfy the following conditions prior to the
defeasance and redemption of the Local Bond:
(1) The Local Government shall provide to VRA not less than 60 days'
prior written notice of the deposit of the funds described in (2), (3) and (4) below.
(2) The Local Government shall deposit with the Trustee an amount
sufficient for VRA to establish an escrow of cash and non-callable, non-prepayable
Government Obligations the principal of and interest on which will be sufficient (without
reinvestment) to cause the defeasance under Article XII of the Master Indenture of the
portion of the Related Portion of VRA Bonds corresponding to the portion of the Local
Bond to be defeased or prepaid (the "Allocated Portion"). The defeasance of the
Allocated Portion may be either to maturity or an earlier redemption date as determined
by the Local Government.
(3) The Local Government shall deposit with VRA cash in an amount
sufficient, as determined by VRA, to pay for a verification report required for the
defeasance of the Allocated Portion under Article XII of the Master Indenture, any costs
incurred by VRA in connection with the redemption, refunding and defeasance of the
Allocated Portion, all amounts overdue or then due on the Local Bond (including,
without limitation, any Supplemental Interest) and all amounts overdue, due or to become
due under Section 6.1(a) of this Agreement.
(4) The Local Government shall deposit with VRA cash in an amount
equal to the present value of interest that would be paid on the principal of the Allocated
Portion at a rate equal to 0.125%, payable semiannually, to the maturity dates of the
Allocated Portion or, if earlier, the redemption date or dates of the Allocated Portion.
Present value shall be determined by using a discount rate equal to the true interest cost
of the Related Portion of VRA Bonds.
(c) VRA will determine which Related Portion of VRA Bonds will be
designated as the Allocated Portion and the amounts to be deposited under subsection (b)(2) and
(3) above using such reasonable allocation and estimation methods as may be selected by VRA,
and VRA's determinations shall be conclusive (absent manifest error).
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(d) The Local Government acknowledges that no funds in any VRA Reserve
will be available to the Local Government for the defeasance or redemption of the Local Bond.
Section 6.3 Payments and Rights Assigned. The Local Government hereby consents
to VRA's assignment to the Trustee of VRA's rights under this Agreement and the Local Bond.
The Local Government also hereby acknowledges and consents to the reservation by VRA of the
right and license to enjoy and enforce VRA's rights under the Local Bond and this Agreement so
long as no Event of Default (as defined in the Master Indenture) with respect to the Related
Series of VRA Bonds has occurred and is continuing. Even though VRA will be the registered
owner of the Local Bond, the Local Government shall pay directly to the Trustee all amounts
payable by the Local Government under the Local Bond and this Agreement (except for those
amounts specifically indicated as payable to VRA under Section 6.1 or Section 11.8, which the
Local Government shall pay directly to VRA).
Section 6.4 Obligations Absolute and Unconditional. The obligation of the Local
Government to make the payments required by the Local Bond and this Agreement from the
sources pledged therefor shall be absolute and unconditional. The Local Government shall pay
all such amounts without abatement, diminution or deduction (whether for taxes or otherwise)
regardless of any cause or circumstance whatsoever including, without limitation, any defense,
set-off, recoupment or counterclaim that the Local Government may have or assert against VRA,
the Trustee or any other person.
ARTICLE VII
OPERATION AND USE COVENANTS
Section 7.1 Maintenance. At its own cost and expense the Local Government shall
operate the System in a proper, sound and economical manner in compliance with all legal
requirements and shall maintain the System in good repair and operating condition and from time
to time shall make all necessary repairs, renewals and replacements.
Section 7.2 Additions and Modifications. At its own expense the Local Government
from time to time may make any renewals, replacements, additions, modifications or
improvements to the System that the Local Government deems desirable, provided that any such
renewal, replacement, addition, modification or improvement does not (i) materially reduce the
value of the System or (ii) negatively affect the structural or operational integrity of any part of
the System. The Local Government shall ensure that all such renewals, replacements, additions,
modifications or improvements comply with all applicable federal, state and local laws, rules,
regulations, orders, permits, authorizations and requirements. All such renewals, replacements,
additions, modifications and improvements shall become part of the System.
Section 7.3 Permits. The Local Government shall, at its sole cost and expense, obtain
all permits, consents and approvals required by local, state or federal laws, ordinances, rules,
regulations or requirements in connection with the acquisition, construction, equipping,
occupation, operation or use of the System. The Local Government shall, upon request,
promptly furnish to VRA and the Trustee copies of all such permits, consents and approvals.
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Section 7.4 Use. The Local Government shall comply with all lawful requirements of
any governmental authority regarding the System, whether now existing or subsequently
enacted, whether foreseen or unforeseen or whether involving any change in governmental
policy or requiring structural, operational or other changes to the System, irrespective of the cost
of making the same.
Section 7.5 Inspection and Local Government's Books and Records. The Local
Government shall permit VRA, the Trustee and their duly authorized representatives and agents
such reasonable rights of access to the System as may be necessary to determine whether the
Local Government is in compliance with the requirements of this Agreement, and the Local
Government shall permit such parties, at all reasonable times and upon reasonable prior notice to
the Local Government, to examine and copy the Local Government's books and records that
relate to the System.
Section 7.6 Ownership. The Local Government shall not construct, reconstruct or
install any part of the System on (i) lands other than those which the Local Government owns or
can acquire title to or a perpetual easement over, in either case sufficient for the Local
Government's purposes or (ii) lands in which the Local Government has acquired a right or
interest less than a fee simple or perpetual easement, unless (1) such part of the System is
lawfully located in a public street or highway or (2) the Local Government provides a written
opinion of counsel or a report of a Qualified Independent Consultant, either of which in a form
reasonably acceptable to VRA, that indicates that the lands and the Local Government's right or
interest therein is sufficient for the Local Government's purposes.
Section 7.7 Sale or Encumbrance. No part of the System shall be sold, exchanged,
leased, mortgaged, encumbered or otherwise disposed of except (i) with the written consent of
VRA or (ii) as provided in any one of the following subsections:
(a) The Local Government may grant easements, licenses or permits across,
over or under parts of the System for streets, roads and utilities as will not adversely affect the
use of the System.
(b) The Local Government may sell or otherwise dispose of property
constituting part of the System if it uses the proceeds of such disposition and any other necessary
funds to replace such property with property serving the same or a similar function.
(c) The Local Government may sell or otherwise dispose of property
constituting part of the System with a "book value" (as determined in accordance with generally
accepted accounting principles) that, when combined with the aggregate "book value" of all of
the other such property sold or otherwise disposed of under this subsection during the Fiscal
Year in question, will not cause the aggregate "book value" of all of such property sold or
otherwise disposed of under this subsection in such Fiscal Year to exceed $125,000. The
proceeds to be received from any such sale or disposition shall be applied first to cure any
default that may exist in the payment of the principal of or interest on the Local Bond.
(d) The Local Government may otherwise sell or dispose of property
constituting part of the System if there is filed with VRA a certificate of the Consulting Engineer
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stating that such property is not necessary or useful to the operation of the System. The proceeds
to be received from any such sale or disposition shall be applied first to cure any default that may
exist in the payment of the principal of or interest on the Local Bond.
Section 7.8 Collection of Revenues. The Local Government shall use its best efforts
to collect all rates, fees and other charges due to it, including, without limitation, the perfection
of liens on premises served by the System for the amount of all delinquent rates, fees and other
charges where such action is permitted by law. The Local Government shall, to the full extent
permitted by law, prevent access to the services and facilities of the System to users, of the
System who are delinquent beyond any customary grace periods in the payment of rates, fees and
other charges due to the Local Government.
Section 7.9 No Free Service. Except as otherwise required by law and as described
on Exhibit H, the Local Government shall not permit the use of the System, or furnish any
services afforded by the System, without making a charge therefor based on the Local
Government's uniform schedule of rates, fees and charges.
Section 7.10 No Competing Service. To the extent permitted by law, the Local
Government agrees not to provide, grant any franchise to provide or give consent for anyone else
to provide, any services which would compete with the System.
Section 7.11 Intentionally Omitted.
Section 7.12 Lawful Charges. The Local Government shall pay when due all taxes,
fees, assessments, levies and other governmental charges of any kind whatsoever (collectively,
the "Governmental Charges") which are (i) assessed, levied or imposed against the System or the
Local Government's interest in it, or (ii) incurred in the operation, maintenance, use and
occupancy of the System. The Local Government shall pay or cause to be discharged, or shall
make adequate provision to pay or discharge, all lawful claims and demands for labor, materials,
supplies or other objects which, if unpaid, might by law become a lien upon all or any part of the
System or the Revenues (collectively, the "Mechanics' Charges"). The Local Government,
however, after giving VRA 10 days' notice of its intention to do so, at its own expense and in its
own name, may contest in good faith any Governmental Charges or Mechanics' Charges. If such
a contest occurs, the Local Government may permit the same to remain unpaid during the period
of the contest and any subsequent appeal unless, in VRA's reasonable opinion, such action may
impair the lien on Revenues granted by this Agreement, in which event, such Governmental
Charges or Mechanics' Charges promptly shall be satisfied or secured by posting with the
Trustee or an appropriate court a bond in form and amount satisfactory to VRA. Upon request,
the Local Government shall furnish to VRA proof of payment of all Governmental Charges and
Mechanics' Charges the Local Government is required to pay under this Agreement.
Section 7.13 Construction Contractors. The Local Government shall cause each
general construction contractor employed in the accomplishment of the Project to furnish a
performance bond and a payment bond each in an amount equal to 100% of the particular
contract price. Such bonds must list the Local Government, VRA and the Trustee as
beneficiaries. Neither VRA nor the Trustee shall make any claims or exercise any rights under
such bonds unless and until an Event of Default occurs. The Local Government shall cause each
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contractor to maintain during the construction period covered by the particular construction
contract builder's risk insurance, workmen's compensation insurance, public liability insurance,
property damage insurance and vehicle liability insurance in amounts and on terms satisfactory
to the Consulting Engineer.
Section 7.14 Engineering Services. The Local Government shall retain or employ a
Consulting Engineer to provide engineering services covering the operation of the System.
ARTICLE VIII
INSURANCE, DAMAGE AND DESTRUCTION
Section 8.1 Insurance. The Local Government shall maintain or cause to be
maintained insurance against such risks as are customarily insured against by systems similar in
size and character to the System, including, without limitation:
(a) Insurance in the amount of the full replacement cost of the System's
insurable portions against loss or damage by fire and lightning, with broad form extended
coverage endorsements covering damage by windstorm, explosion, aircraft, smoke, sprinkler
leakage, vandalism, malicious mischief and such other risks as are normally covered by such
endorsements (limited only as may be provided in the standard form of such endorsements at the
time in use in Virginia). The determination of replacement cost shall be made, in conjunction
with representatives of the Local Government, by a recognized appraiser or insurer selected by
the Local Government and reasonably acceptable to VRA.
(b) Comprehensive general liability insurance with a combined single limit in
an amount sufficient per year (based on recommendations of the Local Government's insurance
carrier) against liability for bodily injury, including death resulting therefrom, and for damage to
property, including loss of its use, arising out of the ownership, maintenance, operation or use of
the System.
(c) Unless the Local Government qualifies as a self-insurer under Virginia
law, worker's compensation insurance.
Neither VRA nor the Trustee shall have any responsibility or obligation with respect to
(i) the procurement or maintenance of insurance or the amounts or the provisions with respect to
policies of insurance or (ii) the application of the proceeds of insurance.
The Local Government shall provide annually to VRA a certificate or certificates of the
respective insurers evidencing the fact that the insurance required by this Section is in force and
effect.
Section 8.2 Requirements of Policies. The Local Government shall maintain all
insurance required by Section 8.1 with generally recognized responsible insurance companies
selected by the Local Government and reasonably acceptable to VRA. Such insurance may be
written with deductible amounts comparable to those on similar policies carried by other utility
systems of like size and character to the System. If the Local Government does not maintain such
insurance with an insurer licensed to do business in Virginia or placed under the requirements of
the Virginia Surplus Lines Insurance Law, Chapter 48, Title 38.2, Code of Virginia of 1950, as
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amended, or any successor statute, the Local Government shall provide evidence reasonably
satisfactory to VRA that such insurance is enforceable under Virginia law.
Section 8.3 Notice of Damage, Destruction or Condemnation. In case of (i) any
damage to or destruction of any material part of the System, (ii) a taking of all or any part of the
System or any right in it under the exercise of the power of eminent domain, (iii) any loss of the
System because of failure of title or (iv) the commencement of any proceedings or negotiations
which might result in such a taking or loss, the Local Government shall notify VRA in writing
within ten Business Days of the occurrence describing generally the nature and extent of such
damage, destruction, taking, loss, proceedings or negotiations.
Section 8.4 Damage and Destruction. If all or any part of the System is destroyed or
damaged by fire or other casualty, and the Local Government shall not have exercised its option,
if such option is available, to redeem the outstanding Local Bond pursuant to Section 6.2, the
Local Government shall restore promptly the property damaged or destroyed to substantially the
same condition as before such damage or destruction, with such alterations and additions as the
Local Government may determine and which will not impair the capacity or character of the
System for the purposes for which it then is being used or is intended to be used. The Local
Government may apply so much as may be necessary of the net proceeds of insurance received
on account of any such damage or destruction 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 Local Government shall pay so much of the cost as may be in excess
of such net proceeds.
Section 8.5 Condemnation and Loss of Title. If title to or the temporary use of all or
any part of the System shall be taken under the exercise of the power of eminent domain or lost
because of failure of title, and the Local Government shall not have exercised its option, if such
option is available, to redeem the outstanding Local Bond pursuant to Section 6.2, the Local
Government shall cause the net proceeds from any such condemnation award or from any title
insurance to be applied to the restoration of the System to substantially its condition before the
exercise of such power of eminent domain or failure of title. If such net proceeds are not
sufficient to pay in full the cost of such restoration, the Local Government shall pay so much of
the cost as may be in excess of such net proceeds.
ARTICLE IX
SPECIAL COVENANTS
Section 9.1 Tax Covenants. The Local Government shall not directly or indirectly
use or permit the use of any of the proceeds of the Local Bond or any other of its funds, in such
manner as would, or enter into, or allow any other person or entity to enter into, any
arrangement, formal or informal, that would, or take or omit to take any other action that would,
cause interest on any of the Related Series of VRA Bonds to be includable in gross income for
federal income tax purposes or to become a specific item of tax preference for purposes of the
federal alternative minimum tax imposed on individuals and corporations. Insofar as the Local
Tax Document imposes duties and responsibilities on the Local Government, including the
payment of any arbitrage rebate in respect of the Related Series of VRA Bonds, as of the Closing
Date they are specifically incorporated by reference into this Agreement. The Local Government
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also consents to the reasonable calculation of any "rebate amount" to be paid with respect to the
Related Portion of VRA Bonds by a rebate calculation service selected by VRA.
Section 9.2 Maintenance of Existence. The Local Government shall maintain its
existence as a political subdivision of the Commonwealth of Virginia under Virginia law, and
shall not dissolve or otherwise dispose of all or substantially all of its assets or consolidate or
merge with or into another entity without VRA's prior written consent, which consent will not be
unreasonably withheld.
Section 9.3 Financial Records and Statements. The Local Government shall
maintain proper books of record and account in which proper entries shall be made in accordance
with generally accepted government accounting standards, consistently applied, of all its business
and affairs. The Local Government shall have an annual audit of the financial condition of the
Local Government made by an independent certified public accountant, within 180 days after the
end of each Fiscal Year. The annual audit shall include a supplemental schedule demonstrating
whether the Local Government satisfied the rate covenant set forth in Section 5.2. The Local
Government shall furnish to VRA, in an electronic format, a copy of such report immediately after
it is accepted by the Local Government. Such report shall include statements in reasonable detail,
certified by such accountant, reflecting the System's financial position as of the end of such Fiscal
Year and the results of the System's operations and changes in the financial position thereof for the
Fiscal Year. Notification by the Local Government to VRA that the report has been published on
the Local Government's website shall satisfy the "furnish" requirement of this section.
Section 9.4 Certification as to No Default and Tax Compliance. The Local
Government shall deliver to VRA, within 180 days after the close of each Fiscal Year, a
certification in substantially the form attached as Exhibit G and signed by a Local
Representative.
Section 9.5 Further Assurances. The Local Government shall to the fullest extent
permitted by law pass, make, do, execute, acknowledge and deliver such further resolutions, acts,
deeds, conveyances, assignments, transfers and assurances as may be necessary or desirable for
the better assuring, conveying, granting, assigning and confirming the rights and collateral, if
any, assigned or pledged by this Agreement, or as may be required to carry out the purposes of
this Agreement. The Local Government shall at all times, to the fullest extent permitted by law,
defend, preserve and protect the pledges made under this Agreement and all rights of VRA under
this Agreement against all claims and demands of all persons, including without limitation the
payment of certain costs of VRA as described in Section 6.1(a)(5).
Section 9.6 Assignment by Local Government. The Local Government shall not
assign its rights and obligations under the Local Bond or this Agreement, or both, without the
prior written consent of VRA.
Section 9.7 Continuing Disclosure. (a) For purposes of this Section 9.7, the
following terms and phrases have the following meanings:
"Annual Financial Information" with respect to any Fiscal Year for the Local
Government means the following:
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(i) the financial statements (consisting of at least a balance
sheet and a statement of revenues and expenses) of the System ,which financial
statements must be (A) prepared annually in accordance with generally accepted
accounting principles in effect from time to time consistently applied (provided
that nothing in this clause (A) will prohibit the Local Government after the date of
this Agreement from changing such other principles so as to comply with
generally accepted accounting principles as then in effect or to comply with a
change in applicable law) and (B) audited by an independent certified public
accountant or firm of such accountants in accordance with generally accepted
auditing standards as in effect from time to time (provided that if audited financial
statements are not available for filing when required by this Section or the Rule
(as defined herein), unaudited financial statements will be filed and audited
financial statements will be filed as soon as possible thereafter); and
(ii) operating data of the type set forth in Exhibit E.
"Dissemination Agent" means any person, reasonably acceptable to VRA, whom the
Local Government contracts in writing to perform its obligations as provided in subsection (i) of
this Section.
"Financial Obligation" means a (i) debt obligation; (ii) derivative instrument entered
into in connection with, or pledged as security or a source of payment for, an existing or planned
debt obligation; or (iii) a guarantee of (i) or (ii). The term Financial Obligation does not include
municipal securities as to which a final official statement has been otherwise provided to the
MSRB under the Rule.
"Make Public" or "Made Public" has the meaning set forth in subsection (c) of this
Section.
"Material Local Government" means the Local Government if the aggregate
outstanding principal amount of the Local Bond and any other of the Local Government's local
bonds purchased with proceeds of the VRA Bonds represent 15% or more of the outstanding
aggregate principal amount of the local bonds purchased with proceeds of the VRA Bonds.
"Rule" means Rule 15c2-12, as it may be amended from time to time, under the
Securities Exchange Act of 1934 and any similar rules of the SEC relating to disclosure
requirements in the offering and sale of municipal securities, all as in effect from time to time.
"SEC" means the U.S. Securities and Exchange Commission.
(b) The Local Government shall Make Public or cause to be Made Public:
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(1) Within seven months after the end of the Local Government's
Fiscal Year (commencing with the Fiscal Year in which the Closing Date occurs), Annual
Financial Information for such Fiscal Year as of the end of which the Local Government
constitutes a Material Local Government. Annual Financial Information may be set forth
in the documents Made Public or may be included in a document Made Public by specific
reference to any document available to the public on the internet website of the Municipal
Securities Rulemaking Board ("MSRB") or filed with the SEC. If the document referred
to is a final official statement, then it must be available from the MSRB.
(2) In a timely manner, notice of any failure by the Local Government
to Make Public or cause to be Made Public Annual Financial Information pursuant to the
terms of part (1) of this subsection.
(c) For purposes of this Section, information and notices shall be deemed to
have been "Made Public" if transmitted to VRA, to the Trustee and to the MSRB in an electronic
format as prescribed by the MSRB.
(d) The Local Government shall also notify VRA of the occurrence of any of
the following events that may from time to time occur with respect to the Local Bond, such
notice to be given in a timely manner not in excess of five Business Days after the occurrence of
the event:
(1) principal and interest payment delinquencies;
(2) non-payment related defaults;
(3) unscheduled draws on debt service reserves reflecting financial
difficulties;
(4) unscheduled draws on any credit enhancement maintained with
respect to the Local Bond reflecting financial difficulties;
(5) substitution of credit or liquidity providers, or their failure to
perform;
(6) adverse tax opinions, the issuance by the Internal Revenue Service
of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form
5701 – TEB) or other notices or determinations with respect to the Local Bond that could
affect the tax status of the Related Series of VRA Bonds, or other events with respect to
the Local Bond that could affect the tax status of the Related Series of VRA Bonds;
(7) modifications to rights of holders;
(8) bond calls and tender offers;
(9) defeasances;
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(10) release, substitution, or sale of property securing repayment of the
Local Bond;
(11) rating changes;
(12) bankruptcy, insolvency, receivership or similar event of the Local
Government;
(13) the consummation of a merger, consolidation, or acquisition
involving the Local Government or the sale of all or substantially all of the assets of the
Local Government, other than in the ordinary course of business, the entry into a
definitive agreement to undertake such an action or the termination of a definitive
agreement relating to any such action, other than pursuant to its terms;
(14) appointment of a successor or additional trustee for the Local
Bond, if any, or the change of name of a trustee;
(15) the failure of the Local Government on or before the date required
by this Agreement to provide Annual Financial Information to the persons and in the
manner required by this Agreement;
(16) incurrence of a Financial Obligation of the Local Government, if
material, or agreement to covenants, events of default, remedies, priority rights, or other
similar terms of a Financial Obligation of the Local Government, any of which affect
security holders, if material; and
(17) default, event of acceleration, termination event, modification of
terms, or other similar events under the terms of a Financial Obligation of the Local
Government, any of which reflect financial difficulties.
(e) Additionally, upon request of VRA, the Local Government shall certify in
writing that it has made all filings and disclosures required under this Section or any similar
undertaking pursuant to the Rule.
(f) Notwithstanding anything in this Agreement to the contrary, the Local
Government need not comply with the provisions of subsections (a) through (c) or provide the
notice described in subsection (d)(16) above during any Fiscal Year unless VRA has notified the
Local Government that it satisfied the objective criteria for a Material Local Government as of
the end of VRA's immediately preceding fiscal year. As of the Closing Date the Local
Government's Fiscal Year and VRA's fiscal year are the same.
(g) (1) If the Local Government fails to comply with any covenant or
obligation set forth in this Section, any holder (within the meaning of the Rule) of VRA Bonds
then Outstanding may, by notice to the Local Government, proceed to protect and enforce its
rights and the rights of the other holders by an action for specific performance of the Local
Government's covenants or obligations set forth in this Section.
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(2) Notwithstanding anything herein to the contrary, any failure of the
Local Government to comply with any disclosure obligation specified in this Agreement
(i) shall not be deemed to constitute an Event of Default under this Agreement and (ii)
shall not give rise to any right or remedy other than that described in part (1) of this
subsection.
(h) The Local Government may from time to time disclose certain information
and data in addition to that required under this Section. Notwithstanding anything in this
Agreement to the contrary, the Local Government shall not incur any obligation to continue to
provide, or to update, such additional information or data.
(i) The Local Government may, from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligation to cause to be Made Public the
information described in this Section and may discharge any such Dissemination Agent, with or
without appointing a successor Dissemination Agent. It is not necessary for purposes of this
Article that the Dissemination Agent have any agency relationship with the Local Government
for purposes of state law.
(j) All documents Made Public under this Section shall be accompanied by
identifying information as prescribed by the MSRB.
Section 9.8 Other Indebtedness. The Local Government shall pay when due all
amounts required by any other indebtedness of the Local Government and perform all of its
obligations in connection with all other indebtedness of the Local Government.
Section 9.9 Additional Indebtedness. The Local Government shall not incur any
indebtedness or issue any bonds, notes or other evidences of indebtedness secured by a pledge of
Revenues, except Parity Bonds or Subordinate Debt issued in accordance with the terms and
conditions of this Section 9.9.
(a) The Local Government may issue Parity Bonds to (i) pay the cost of the
acquisition or construction of improvements, extensions, additions or replacements to equipment
or betterments of and any property, rights or easements deemed by the Local Government to be
necessary, useful or convenient for the System or to refund Subordinate Debt, (ii) refund some or
all of the Local Bond (subject to the conditions of Section 6.2) or any other Parity Bond or (iii)
effect some combination of (i) and (ii), provided in each case the following conditions are
satisfied. Before any Parity Bond is issued or delivered, the Local Government shall deliver to
VRA the following in form and substance satisfactory to VRA:
(1) Certified copies of all resolutions and ordinances of the Local
Government authorizing the issuance of the Parity Bond.
(2) A certificate of a Local Representative setting forth the purposes
for which the Local Government is issuing the Parity Bond and the manner in which the
Local Government will apply the proceeds from the issuance and sale of the Parity Bond.
(3) If the Parity Bond is authorized for any purpose other than the
refunding of the Local Bond or other Parity Bond, a certificate including supporting
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documentation of a Qualified Independent Consultant to the effect that (i) the
improvements or property which the proceeds from the issuance of the Parity Bond will
finance or refinance will be a part of, or are necessary, useful or convenient for, the
System, (ii) the funds available to the Local Government from the issuance of the Parity
Bond and other specified sources will be sufficient to pay the estimated cost of such
improvements or property (or refinancing the same), (iii) the period of time which will be
required to complete such improvements or property, and (iv) (A) the failure to make
such improvements or acquire or construct such property will result in an interruption or
reduction, or the continuance of an interruption or reduction, of Revenues, or (B) during
the first two complete Fiscal Years following the completion of the improvements or the
acquisition or construction of the property (or refinancing the same), the projected Net
Revenues Available for Debt Service will satisfy the rate covenant of Section 5.2. In
providing this certificate, the Qualified Independent Consultant may take into
consideration future System rate increases, provided that such rate increases have been
duly approved by the Local Government's governing body and any other person and
entity required to give approval for the rate increase to become effective. In addition, the
Qualified Independent Consultant may take into consideration additional future Revenues
to be derived under then existing contractual agreements entered into by the Local
Government and from reasonable estimates of growth in the Local Government's
customer base. In providing the certification in subsection (iv)(B) above, the Qualified
Independent Consultant shall include supporting documentation.
(4) If the Parity Bond is authorized solely to refund any of the Local
Bond or other Parity Bonds (a "Refunding Parity Bond") a certificate or report of a
Qualified Independent Consultant that the scheduled annual debt service requirements on
the Refunding Parity Bond and the unrefunded portions of the Local Bond and other
Parity Bonds (collectively, the "Post-Refunding Parity Bonds) in each of the Fiscal Years
during which the Post-Refunding Parity Bonds will be outstanding are lower than the
scheduled annual debt service requirements in each such Fiscal Year on the outstanding
Local Bond and other Parity Bonds as they existed immediately before the issuance of the
Refunding Parity Bond.
(5) If requested by VRA, an opinion of a nationally-recognized bond
counsel, subject to customary exceptions and qualifications, approving the form of the
resolution or ordinance authorizing the issuance of the Parity Bond and stating that its
terms and provisions conform with the requirements of this Agreement, that the
certificates and documents delivered to VRA constitute compliance with the provisions
of this Section, and that the issuance of the Parity Bond will have no adverse effect on the
exclusion of the interest on the Related Series of VRA Bonds from gross income for
federal income tax purposes and not cause interest on the Related Series of VRA Bonds
to become a specific item of tax preference for purposes of the federal alternative
minimum tax imposed on individuals and corporations.
(b) If the Local Government is unable or unwilling to satisfy the conditions
set forth in subsection (b) to the issuance and delivery of any issue of Parity Bonds, VRA may
determine, in its sole discretion, to waive any or all of such conditions.
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Section 9.10 Litigation; Material Change. The Local Government shall promptly
notify VRA of (i) the existence and status of any litigation that the County Attorney determines
is not reasonably certain to have a favorable outcome and which individually or in the aggregate
could have a material adverse effect on the financial condition or operations of the System or its
ability to perform its payment and other obligations under this Agreement or the Local Bond or
(ii) any change in any material fact or circumstance represented or warranted in this Agreement.
ARTICLE X
DEFAULTS AND REMEDIES
Section 10.1 Events of Default. Each of the following events is an "Event of Default":
(a) The failure to pay any installment of principal of or premium, if any, on
the Local Bond when due (whether at maturity, by mandatory or optional redemption, by
acceleration or otherwise).
(b) The failure to pay any installment of interest (including Supplemental
Interest) on the Local Bond when due.
(c) The failure to make any other payment or deposit required by this
Agreement within 15 days after its due date.
(d) The Local Government's failure to perform or observe any of the other
covenants, agreements or conditions of the Local Bond or this Agreement and the continuation
of such failure for a period of 60 days after written notice specifying such failure and requesting
that it be cured is given to the Local Government by VRA, or, in the case of any such failure
which cannot with diligence be cured within such 60-day period, the Local Government's failure
to proceed promptly to commence to cure the failure and thereafter to prosecute the curing of the
failure with diligence.
(e) Any warranty, representation or other statement by or on behalf of the
Local Government contained in this Agreement or in any instrument furnished in compliance
with or in reference to this Agreement or in connection with the issuance and sale of the Local
Bond is false and misleading in any material respect.
(f) Any bankruptcy, insolvency or other similar proceeding shall be instituted
by or against the Local Government under any federal or state bankruptcy or insolvency law and,
if instituted against the Local Government, is not dismissed within 60 days after filing.
(g) Any proceeding shall be instituted, with the Local Government's consent
or acquiescence, for the purpose of effecting a composition between the Local Government and
its creditors or for the purpose of adjusting such creditors' claims under any federal or state
statute now or hereafter enacted, if such claims are under any circumstances payable from the
Revenues.
(h) An order or decree shall be entered, with the Local Government's consent
or acquiescence, appointing a receiver or receivers of the System or any part of it or of the
Revenues, or if such order or decree, having been entered without the Local Government's
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consent or acquiescence, shall not be vacated or discharged or stayed on appeal within 60 days
after its entry.
(i) The occurrence of a default by the Local Government under the terms of
any debt secured by a pledge of Revenues and the failure to cure such default or obtain a waiver
thereof within any period of time permitted thereunder.
Section 10.2 Acceleration. Upon the occurrence and continuation of an Event of
Default, VRA may, by notice in writing delivered to the Local Government, declare the entire
unpaid principal of and interest on the Local Bond due and payable. Upon any such declaration,
the Local Government shall immediately pay to the Trustee the entire unpaid principal of and
accrued interest on the Local Bond, but only from the Revenues and other funds specifically
pledged hereby. VRA may in its discretion waive an Event of Default and its consequences and
rescind any acceleration of maturity of principal of and interest on the Local Bond.
Section 10.3 Other Remedies. Upon the occurrence and continuation of an Event of
Default, VRA may proceed to protect and enforce its rights by mandamus or other action, suit or
proceeding at law or in equity for specific performance of any agreement contained in the Local
Bond or this Agreement. No remedy conferred by this Agreement upon or reserved to the
registered owners of the Local Bond 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 VRA
under this Agreement or now or hereafter existing at law or in equity or by statute.
Section 10.4 Delay and Waiver. 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 in it, 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 under this Agreement shall extend to or
shall affect any subsequent default or Event of Default or shall impair any rights or remedies
consequent to it.
ARTICLE XI
MISCELLANEOUS
Section 11.1 State Aid Intercept. The Local Government acknowledges that VRA is
treating the Local Bond as a "local obligation" within the meaning of Section 62.1-199 of the
Act, including amendments thereto taking effect as of July 1, 2011, which in the event of a
nonpayment thereunder authorizes VRA or the Trustee to file an affidavit with the Governor that
such nonpayment has occurred pursuant to Section 62.1-216.1 of the Act. In purchasing the
Local Bond, VRA is further relying on Section 62.1-216.1 of the Act, providing that if the
Governor is satisfied that such nonpayment has occurred, the Governor will immediately make
an order directing the Comptroller to withhold all further payment to the Local Government of
all funds, or of any part of them, appropriated and payable by the Commonwealth of Virginia to
the Local Government for any and all purposes, and the Governor will, while the nonpayment
continues, direct in writing the payment of all sums withheld by the Comptroller, or as much of
them as is necessary, to VRA, so as to cure, or cure insofar as possible, such nonpayment.
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Section 11.2 Successors and Assigns. This Agreement shall be binding upon, inure to
the benefit of and be enforceable by the parties and their respective successors and assigns.
Section 11.3 Amendments. VRA and the Local Government shall have the right to
amend from time to time any of this Agreement's terms and conditions, provided that all
amendments shall be in writing and shall be signed by or on behalf of VRA and the Local
Government.
Section 11.4 Limitation of Local Government's Liability. Notwithstanding anything
in the Local Bond or this Agreement to the contrary, the Local Government's obligations
hereunder and under the Local Bond are not its general obligations, but are limited obligations
payable solely from the Revenues which are specifically pledged for such purpose. Neither the
Local Bond nor this Agreement shall be deemed to create or constitute a debt or a pledge of the
faith and credit of the Local Government and the Local Government shall not be obligated to pay
the principal of or premium, if any, or interest on the Local Bond or other costs incident to them
except from the Revenues and other funds pledged for such purpose. In the absence of fraud or
intentional misconduct, no present or future director, official, officer, employee or agent of the
Local Government shall be liable personally to VRA in respect of this Agreement or the Local
Bond or for any other action taken by such individual pursuant to or in connection with the
financing provided for in this Agreement or the Local Bond.
Section 11.5 Applicable Law. This Agreement shall be governed by Virginia law.
Section 11.6 Severability. If any clause, provision or section of this Agreement shall
be held illegal or invalid by any court, the illegality or invalidity of such clause, provision or
section shall not affect the remainder of this Agreement which shall be construed and enforced as
if such illegal or invalid clause, provision or section had not been contained in this Agreement.
If any agreement or obligation contained in this Agreement is held to be in violation of law, then
such agreement or obligation shall be deemed to be the agreement or obligation of VRA and the
Local Government, as the case may be, only to the extent permitted by law.
Section 11.7 Notices. Unless otherwise provided for herein, all demands, notices,
approvals, consents, requests, opinions and other communications under the Local Bond or this
Agreement shall be in writing and shall be deemed to have been given when delivered in person
or mailed by first class registered or certified mail, postage prepaid, addressed (a) if to the Local
Government, at the address specified for notices on the signature page; (b) if to VRA, at 1111
East Main Street, Suite 1920, Richmond, Virginia 23219, Attention: Executive Director; or (c) if
to the Trustee, at Two James Center, 1051 E. Cary Street, Suite 600, Richmond, Virginia 23219,
Attention: Corporate Trust Department. A duplicate copy of each demand, notice, approval,
consent, request, opinion or other communication given by any party named in this Section shall
also be given to each of the other parties named. VRA, the Local Government and the Trustee
may designate, by notice given hereunder, any further or different addresses to which subsequent
demands, notices, approvals, consents, requests, opinions or other communications shall be sent
or persons to whose attention the same shall be directed.
Section 11.8 Right to Cure Default. If the Local Government fails to make any
payment or to perform any act required by it under the Local Bond or this Agreement, VRA or
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the Trustee, without prior notice to or demand upon the Local Government and without waiving
or releasing any obligation or default, may (but shall be under no obligation to) make such
payment or perform such act. All amounts so paid by VRA or the Trustee and all costs, fees and
expenses so incurred shall be payable by the Local Government as an additional obligation under
this Agreement, together with interest thereon at the rate of 15% per year until paid. The Local
Government's obligation under this Section shall survive the payment of the Local Bond.
Section 11.9 Term of Agreement. This Agreement is effective as of the Effective
Date. Except as otherwise specified, the Local Government's obligations under the Local Bond
and this Agreement shall expire upon payment in full of the Local Bond and all other amounts
payable by the Local Government under this Agreement.
Section 11.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original and all of which together shall constitute but one
and the same instrument.
[Signature Pages Follow]
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[Signature Page of Local Bond Sale and Financing Agreement – Pittsylvania – VRA]
WITNESS the following signatures, all duly authorized.
VIRGINIA RESOURCES AUTHORITY
By: _______________________________
Stephanie L. Hamlett, Executive Director
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[Signature Page of Local Bond Sale and Financing Agreement – Pittsylvania – County]
COUNTY OF PITTSYLVANIA, VIRGINIA
By: ______________________________________
Robert "Bob" Warren, Chairman
Address for Notices:
1 Center Street
P.O. Box 426
Chatham, Virginia 24531
Attention: County Administrator
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[Signature Page of Local Bond Sale and Financing Agreement – Pittsylvania – Trustee]
The Trustee, by the execution hereof, accepts the duties imposed on it by this Agreement.
U.S. BANK NATIONAL ASSOCIATION, as
Trustee
By: _________________________________
Monique L. Green, Vice President
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EXHIBIT A
FORM OF LOCAL BOND
[To be provided]
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EXHIBIT B
DESCRIPTION OF THE PROJECT
The Project consists of (a) financing various capital projects related to the Local
Government's solid waste system, including (without limitation) constructing and equipping
three new convenience centers and improving an existing convenience center, (b) refunding a
portion of the outstanding principal installments of the $1,803,802 Lease Revenue Bond (County
Projects), Series 2018A (Federally Tax-Exempt), issued by the IDA, for the benefit of the Local
Government, and (c) paying the related costs of issuance and refunding.
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EXHIBIT C
PENDING OR THREATENED ACTIONS, SUITS, PROCEEDINGS, OR
INVESTIGATIONS
[To be provided]
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EXHIBIT D
FORM OF REQUISITION
Requisition No.
Date: ___________, 2021
U.S. Bank National Association, as Trustee
Attention: Corporate Trust Department
1021 East Cary Street
18th Floor
Richmond, Virginia 23219
Virginia Resources Authority
1111 East Main Street
Suite 1920
Richmond, Virginia 23219
Attention: Executive Director
This Requisition, including Schedule 1 and Schedule 2 hereto, is submitted in connection
with the Local Bond Sale and Financing Agreement dated as of September 17, 2021 (the
"Financing Agreement"), between the Virginia Resources Authority and the County of
Pittsylvania, Virginia (the "Local Government"). Unless otherwise defined in this Requisition,
each capitalized term used herein has the meaning given it under Article I of the Financing
Agreement. The undersigned Local Representative hereby requests payment of the following
amounts from the Local Account established for the Local Government in the 2021C Acquisition
Fund established under the Fifty-Second Supplemental Series Indenture.
Payee (including wiring instructions if receiving electronic payment):
Address:
Amount to be paid:
Purpose (in reasonable detail) for which obligations(s) to be paid were incurred:
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Attached on Schedule 2 are the wire instructions for this requisition, and also attached
hereto is an invoice (or invoices) relating to the items for which payment is requested.
The undersigned certifies that (i) the amounts requested by this Requisition will be
applied in accordance with the Local Tax Document and solely and exclusively to the payment,
or the reimbursement of the Local Government for its payment, of Project Costs of the
construction portion of the Project, (ii) no notice of any lien, right to lien or attachment upon, or
claim affecting the right to receive payment of, any of the money payable under this Requisition
to any of the persons, firms or corporations named in it has been received, or if any notice of any
such lien, attachment or claim has been received, such lien, attachment or claim has been
released or discharged or will be released or discharged upon payment of the Requisition, and
(iii) this Requisition contains no items representing payment on account of any retained
percentage entitled to be retained at this date.
If this Requisition includes payments for labor or to contractors, builders or materialmen,
the attached Certificate of Consulting Engineer (Payments for Labor/Contractors) must be
completed. If this Requisition includes payments for any lands or easements, or any rights or
interest in or relating to lands, the attached Certificate of the Consulting Engineer (Land
Interests) must be completed.
The Local Government has agreed in the Financing Agreement that any amounts it
receives pursuant to this Requisition will be (i) immediately applied to reimburse the Local
Government for Project Costs it has already paid or (ii) actually spent to pay Project Costs
not later than five banking days after receipt.
__________________________________________
Local Representative
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SCHEDULE 1
Form to Accompany Requisition
Requisition # _________________________
Recipient: County of Pittsylvania, Virginia – VRA 2021C
Local Representative: _________________________
Title: _________________________
Date: _________________________
Cost
Category
Total
Project Cost
Previous
Disbursements
Disbursement
This Period
Disbursements
to Date
Remaining
Balance
$ $ $ $ $
TOTALS $ $ $ $ $
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SCHEDULE 2
Wire Instructions for Requisition
[To be provided by the Local Government]
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CERTIFICATE OF CONSULTING ENGINEER (PAYMENTS FOR
LABOR/CONTRACTORS)
The undersigned Consulting Engineer for the Local Government hereby certifies that
insofar as the amounts covered by this Requisition include payments for labor or to contractors,
builders or materialmen, such work was actually performed or such materials, supplies or
equipment were actually furnished or installed in or about the Project.
Date: _________, 20__
________________________________________
Consulting Engineer
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CERTIFICATE OF CONSULTING ENGINEER (LAND INTERESTS)
The undersigned Consulting Engineer for the Local Government hereby certifies that
insofar as the amounts covered by the Requisition include payments for land or easements, rights
or interests in or relating to lands, (i) such lands, easements, rights or interests are being acquired
and are necessary or convenient for the construction of the Project, and (ii) upon payment
therefor the Local Government will have title in fee simple to, or easements, rights or interests
sufficient for the purposes of, the Project over and through the subject lands.
Date: _________, 20__
________________________________________
Consulting Engineer
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EXHIBIT E
OPERATING DATA
Description of Local Government. A description of the Local Government including a
summary description of the System.
Debt. A description of the terms of the Local Government's outstanding debt including a
historical summary of outstanding debt and a summary of annual debt service on outstanding
debt as of the end of the preceding fiscal year. The annual disclosure should also include (to the
extent not shown in the latest audited financial statements) a description of contingent
obligations as well as pension plans administered by the Local Government and any unfunded
pension liabilities.
Financial Information and Operating Data. Financial information for the System as of
the end of the preceding fiscal year, including a description of revenues and expenditures, largest
users, a summary of rates, fees and other charges of the System, and a historical summary of debt
service coverage.
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EXHIBIT F
FORM OF OPINION OF COUNSEL TO THE LOCAL GOVERNMENT
Board of Supervisors
County of Pittsylvania, Virginia
Virginia Resources Authority
Richmond, Virginia
$[_______]
County of Pittsylvania, Virginia
Taxable [_______] Revenue Bond, Series 2021
Ladies and Gentlemen:
I have acted as counsel to the County of Pittsylvania, Virginia (the "Local Government"),
in connection with the issuance and sale by the Local Government of its $[______] Taxable
[______] Revenue Bond, Series, 2021 (the "Local Bond"), the net proceeds of which will be
applied to finance the Project (as defined in the hereafter defined Financing Agreement) and in
such capacity, I have examined, among other things, the following documents:
(a) a certified copy of the Local Authorization, authorizing the issuance and sale of
the Local Bond to Virginia Resources Authority ("VRA") to finance the Project;
(b) a copy of the Local Bond Sale and Financing Agreement (the "Financing
Agreement") dated as of September 17, 2021, and between the Local Government
and VRA; and
(c) a copy of the Local Tax Document.
The documents referred to in clauses (b) and (c) above are referred to collectively as the
"Local Bond Documents."
I have also examined such other records and proceedings of the Local Government and
conducted such investigations as I deemed appropriate and necessary for purposes of this
opinion.
Unless otherwise defined, each capitalized term used in this opinion has the same
meaning given to such term in the Financing Agreement.
As to questions of fact material to the opinions and statements set forth herein, I have
relied upon representations of the Local Government set forth in the Local Bond Documents and
other certificates and representations by persons including representatives of the Local
Government. Whenever an opinion or statement set forth herein with respect to the existence or
absence of facts is qualified by the phrase "to the best of my knowledge" or a phrase of similar
import, it is intended to indicate that during the course of my representation of the Local
Government in connection with the Local Bond Documents no information has come to my
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attention that should give me current actual knowledge of the existence or absence of such facts.
Except to the extent expressly set forth herein, I have not undertaken any independent
investigation of the existence or absence of such facts, and no inference as to my knowledge or
the existence or absence of such facts should be drawn from the fact of my representation or any
other matter.
Based upon such examination and assuming the authorization, execution, delivery and
enforceability of all documents by parties other than the Local Government, I am of the opinion
that:
1. The Local Government is a duly created and validly existing political subdivision
of the Commonwealth and is vested with the rights and powers conferred upon it by Virginia
law.
2. The Local Government has full right, power and authority to (i) adopt the Local
Authorization and execute and deliver the Local Bond Documents and all related documents,
(ii) undertake the Project and (iii) carry out and consummate all of the transactions contemplated
by the Local Authorization and the Local Bond Documents, including owning and operating the
System.
3. The Local Bond Documents were duly authorized by the Local Authorization and
the Financing Agreement is in substantially the same form as presented to the Governing Body at
its meeting at which the Local Authorization was adopted.
4. All governmental permits, licenses, registrations, certificates, authorizations and
approvals required to have been obtained as of the date hereof have been obtained for (i) the
Local Government's adoption of the Local Authorization, (ii) the execution and delivery of the
Local Bond Documents and the Local Bond, (iii) the Local Government's performance of its
obligations under the Local Bond Documents and the Local Bond, and (iv) to the best of my
knowledge, the operation and use of the Related Financed Property and the System. I know of
no reason why any such required governmental permits, licenses, registrations, certificates,
authorizations or approvals cannot be obtained as required in the future.
5. The Financing Agreement has been executed and delivered by duly authorized
officials of the Local Government and constitutes a legal, valid and binding obligation of the
Local Government enforceable against the Local Government in accordance with its terms. The
Local Bond has been executed and delivered by duly authorized officials of the Local
Government and will constitute a legal, valid and binding limited obligation of the Local
Government enforceable against the Local Government in accordance with its terms.
The obligations of the Local Government under the Financing Agreement and the Local
Bond, and the enforceability of such obligations, may be limited or otherwise affected by (i)
bankruptcy, insolvency, reorganization, moratorium and other laws affecting the rights of
creditors generally, (ii) principles of equity, whether considered at law or in equity, (iii) the
exercise of sovereign police powers of the Commonwealth, and (iv) rules of law which may limit
the enforceability on public policy grounds of any obligations of indemnification undertaken by
the Local Government.
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6. The issuance of the Local Bond and the execution and delivery of the Local Bond
Documents and the performance by the Local Government of its obligations thereunder are
within the powers of the Local Government and will not conflict with, or constitute a breach or
result in a violation of (i) any federal or Virginia constitutional or statutory provision, (ii) to the
best of my knowledge, any agreement or other instrument to which the Local Government is a
party or by which it is bound or (iii) any order, rule, regulation, decree or ordinance of any court,
government or governmental authority having jurisdiction over the Local Government or its
property.
7. The Local Government, to the best of my knowledge, is not in default in the
payment of the principal of or interest on any of its indebtedness for borrowed money and is not
in default under any instrument under and subject to which any indebtedness for borrowed
money has been incurred. To the best of my knowledge, no event or condition has happened or
existed, or is happening or existing, under the provisions of any such instrument, including but
not limited to the Financing Agreement, which constitutes, or which, with notice or lapse of
time, or both, would constitute an event of default thereunder.
8. The Local Government (i) to the best of my knowledge, is not in violation of any
existing law, rule or regulation applicable to it in any way which would have a material adverse
effect on its financial condition or its ability to perform its obligations under the Local Bond or
the Local Bond Documents and (ii) is not in default under any indenture, mortgage, deed of trust,
lien, lease, contract, note, order, judgment, decree or other agreement, instrument or restriction of
any kind to which the Local Government is a party or by which it is bound or to which any of its
assets is subject, which would have a material adverse effect on its financial condition or its
ability to perform its obligations under the Local Bond and the Local Bond Documents. The
execution and delivery by the Local Government of the Local Bond and the Local Bond
Documents and the compliance with the terms and conditions thereof will not conflict with,
result in a breach of or constitute a default under any of the foregoing.
9. Except as set forth in the Financing Agreement, there has not been served nor, to
the best of my knowledge, threatened against the Local Government, any actions, suits,
proceedings or investigations of a legal, equitable, regulatory, administrative or legislative nature
(i) affecting the creation, organization or existence of the Local Government or the title of its
officers to their respective offices, (ii) seeking to prohibit, restrain or enjoin the approval,
execution, delivery or performance of the Local Authorization or the Local Bond Documents or
the issuance or delivery of the Local Bond, (iii) in any way contesting or affecting the validity or
enforceability of the Local Bond, the Local Authorization, the Local Bond Documents or any
agreement or instrument relating to any of the foregoing, (iv) in which a judgment, order or
resolution may have a material adverse effect on the Local Government or its business, assets,
condition (financial or otherwise), operations or prospects or on its ability to perform its
obligations under the Local Authorization, the Local Bond Documents or the Local Bond, or (v)
affecting the undertaking of the Project.
Very truly yours,
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EXHIBIT G
FORM OF CERTIFICATION AS TO NO DEFAULT AND TAX COMPLIANCE
[DATE]
[Insert Name]
Compliance & Financial Analyst
Virginia Resources Authority
1111 East Main Street, Suite 1920
Richmond, VA 23219
Dear [Mr./Ms.] ______:
In accordance with Section 9.4 of the Local Bond Sale and Financing Agreement dated as
of September 17, 2021 (the "Financing Agreement") between Virginia Resources Authority and
the County of Pittsylvania, Virginia (the "Local Government"), I hereby certify that, during the
fiscal year that ended June 30, ______, and through the date of this letter:
1. [No event or condition has happened or existed, or is happening or existing, which
constitutes, or which, with notice or lapse of time, or both, would constitute, an Event of
Default as defined in Section 10.1 of the Financing Agreement.] [If an Event of Default
has occurred, please specify the nature and period of such Event of Default and what
action the Local Government has taken, is taking or proposes to take to rectify it].
2. [The ownership and status of all or a portion of the Related Financed Property has not
changed since the Closing Date.] [If untrue, please describe.]
3. [Neither the Related Financed Property nor any portion thereof is being used by a
Nongovernmental Person pursuant to a lease, an incentive payment contract or a take-or-
pay or other output-type contract.] [If untrue, please describe.]
4. [Neither the Related Financed Property nor any portion or function thereof is being used
pursuant to or is otherwise subject to a Service Contract that does not satisfy the
requirements of Revenue Procedure 2017-13.] [If untrue, please describe.]
5. [Other than as may be described in paragraphs 2, 3 and 4 above, neither the Related
Financed Property nor any portion or function thereof nor any portion of the Proceeds is
being used for a Private Business Use.] [If untrue, please describe.]
6. [The Local Government has not used or permitted the use of any Proceeds of the Local
Bond directly or indirectly to make a loan to an ultimate borrower other than itself within
the meaning of Section 4.3 of the Local Tax Document.] [If untrue, please describe.]
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7. [Other than any amounts described in the Local Tax Document (as defined in the
Financing Agreement), between VRA and the Local Government and amounts that may
constitute or be on deposit in a Bona Fide Debt Service Fund, there neither have been nor
are now any monies, securities, obligations, annuity contracts, residential rental property,
AMT Bonds, investment-type property, Sinking Funds, Pledged Funds, or other
Replacement Proceeds accumulated or held or pledged as security by the Local
Government or any other Substantial Beneficiary of the Local Bond as security for or the
direct or indirect source of the payment of the principal of or interest on the Local Bond.]
[If untrue, please describe.]
8. [The Local Government is in compliance with the recordkeeping requirements of Section
4.9 of the Local Tax Document.] [If untrue, please describe.]
9. [Other than as may be described above, the Local Government is not in default of any of
its obligations under the Local Tax Document.] [If untrue, please describe.]
10. Unless otherwise defined herein, each capitalized term used herein has the meaning set
forth in the Local Tax Document.
Sincerely,
[Insert Name]
Local Representative
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EXHIBIT H
DESCRIPTION OF SPECIAL USE ARRANGEMENTS
[To be provided]
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EXHIBIT I
FORM OF ANNUAL BUDGET
[DATE]
Compliance and Financial Analyst
Virginia Resources Authority
1111 East Main Street, Suite 1920
Richmond, VA 23219
Ladies and Gentlemen:
Pursuant to the Financing Agreement[s] between Virginia Resources Authority and the
County of Pittsylvania, Virginia, dated as of [add dates of all outstanding Financing
Agreements], a copy of the fiscal year [20xx] annual budget is enclosed. Such annual budget
provides for the satisfaction of the rate covenant as demonstrated below.
Revenues
Operation & Maintenance
Expenses
Net Revenues Available
for Debt Service
(Revenues – O&M Expenses)
Debt Service
*Coverage
(Net Revenues Available for
Debt Service/Debt Service)
Unless otherwise defined herein, the capitalized terms used in this Certificate shall have
the meanings set forth in the Financing Agreement[s].
Very truly yours,
By: __________________________
Its: _________________________
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EXHIBIT J
EXISTING PARITY BONDS
[To be provided]
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1.1-1
SCHEDULE 1.1
[To be provided]
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1.1-2
ADDITIONAL CONDITIONS PRECEDENT TO PURCHASE OF LOCAL BOND:
[To be provided]
ADDITIONAL CONDITIONS PRECEDENT TO FIRST REQUISITION OF PROCEEDS
OF LOCAL BOND:
[To be provided]
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PROJECT BUDGET
[To be provided]
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INTEREST RATES AND PAYMENT SCHEDULE FOR LOCAL BOND
[To be provided]
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Finance Committee
EXECUTIVE SUMMARY
ACTION ITEM
Agenda Title: ARPA Funding Discussion (Staff Contact: Kimberly G. Van Der Hyde)
Staff Contact(s): Kimberly G. Van Der Hyde
Agenda Date: August 17, 2021 Item Number: 5.d
Attachment(s): Regulations.gov
Reviewed By:
SUMMARY:
The County received an award notice from the Federal government of American Rescue Plan
Act (“ARPA”) funds in the amount of $11,723,057. On June 6, 2021, the County received the
first tranche of these funds. These funds closely resemble the Coronavirus Aid, Relief, and
Economic Security funds that the County received in 2020; however, there is a more narrowly
focused list of areas where these funds can be used. For the Committee’s review, attached is a
copy of the interim final rule that shows the regulations allowed for use of these funds. The
following are the seven (7) major categories of expenses allowable:
1. Public Health - authorizes the use of funds to respond to the public health
emergency with respect to COVID-19.
2. Negative Economic Impact - authorizes the use of funds to respond to the
negative economic impacts of the COVID-19 emergency.
3. Services to Disproportionately Impacted Communities - authorizes the use of
funds for such areas as education assistance, healthy childhood experiences, housing support,
and social detriment of health.
4. Premium Pay – authorizes the use of funds to public and private sector
employees that were on the front line during the COVID-19 emergency.
5. Infrastructure – authorizes the use of funds to aid with water, sewer, and
broadband projects.
6. Revenue Replacement – authorizes the use of funds to offset reductions in net
governmental revenues.
7. Administrative – authorizes the use of funds for administrative expenses,
evaluation and data analysis and transfer to other governmental units including towns.
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FINANCIAL IMPACT AND FUNDING SOURCE:
The Committee needs to evaluate and develop a plan for the best use of these funds to benefit the
County.
RECOMMENDATION:
County Staff submits this issue to the Committee for its consideration.
MOTION:
For the Committee’s consideration.
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Finance Committee
EXECUTIVE SUMMARY
ACTION ITEM
Agenda Title:
Resolution # 2021-08-05 (Authorization of Submission of Economic
Development Administration Grant Application for Critical Improvements
for Public Water and Sewer Infrastructure Project) Adoption (Staff
Contact: Chris Adcock)
Staff Contact(s): Christopher Adcock
Agenda Date: August 17, 2021 Item Number: 5.e
Attachment(s): 2021-08-05 Sewer Upgrades
Reviewed By:
SUMMARY:
In February, the Pittsylvania County Service Authority (“PCSA’) Board passed Resolution #
2021-02-01, supporting submission of an EDA Public Work Funding Application for Sewer
System Improvements. Anticipating PCSA’s dissolution, the West Piedmont Planning District
Commission (“WPPDC”), who is helping with the funding application, recommended waiting
until the dissolution was complete, prior to submitting as the changing ownership of the
County’s water and sewer facilities may cause issue with the application. Since that time, the
EDA has announced a new Grant Program using American Rescue Plan Act (“ARPA”) monies
that now provides eighty percent (80%) funding, with a twenty percent (20%) local match. The
prior Program only offered fifty percent (50%) funding.
Due to the additional funding provided, County Staff recommends expanding the Grant
application to include critical wastewater pump station improvements, in addition to the
Brockway sewer extension and pump replacement project initially identified. The Project’s total
estimated cost is approximately $3,000,000, which would require a County match of $600,000
(twenty percent (20%)). To indicate support of the Project and a commitment to providing the
funding match, the EDA and the WPPDC recommend the County adopt a support Resolution.
For the Board’s review and consideration, Resolution # 2021-08-05, evincing the same, is
attached.
FINANCIAL IMPACT AND FUNDING SOURCE:
County Staff recommends using Water & Sewer Fund Capital Reserves in an amount not to
exceed $600,000 for the Program’s twenty percent (20%) match. If approved by the EDA, the
funding will allow the improvements identified in a 2019 Pump Station Condition Assessment
Report to be completed at a significantly reduced cost.
RECOMMENDATION:
County Staff recommends the Board adopt Resolution # 2021-08-05 as presented.
5.e
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MOTION:
“I make a Motion to adopt Resolution # 2021-08-05 as presented.”
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PITTSYLVANIA COUNTY BOARD OF SUPERVISORS
______________________________________________________________________________
RESOLUTION # 2021-08-05
______________________________________________________________________________
AUTHORIZATION FOR THE SUBMISSION OF AN ECONOMIC DEVELOPMENT
ADMINISTRATION GRANT APPLICATION FOR CRITICAL IMPROVEMENTS TO
THE COUNTY’S PUBLIC WATER AND SEWER INFRASTRUCTURE PROJECT
______________________________________________________________________________
The following Resolution was adopted at the Pittsylvania County Board of Supervisors’
(“Board”) Regular Business Meeting on August 17, 2021:
WHEREAS, the upgrades and improvements to Pittsylvania County, Virginia’s
(“County”), water and wastewater systems are primary components of the County's economic
development goals; and
WHEREAS, the completion of the Critical Improvements for Public Water and Sewer
Infrastructure Project (“Project”) is essential for existing industries operating in and new industries
being recruited to the County; and
WHEREAS, the Project is currently supported by the West Piedmont Regional
Comprehensive Economic Development Strategy.
THEREFORE, BE IT HEREBY RESOLVED, that the Board authorizes the submission
of an application for Grant funding for the Project to the Economic Development Administration
and certifies that David M. Smitherman, County Administrator, will serve as the authorizing agent
and is responsible for the accuracy of the application and for the appropriate use of all funds
granted; and
BE IT FURTHER RESOLVED that the County will match an amount not to exceed
$600,000 as required match for the Economic Development Administration Grant and to ensure
the Project is fully funded.
Given under my hand this 17th day of August, 2021.
___________ ____________
Robert (“Bob”) W. Warren
Chairman, Pittsylvania County Board of Supervisors
Attest:
__________________
David M. Smitherman
Clerk, Pittsylvania County Board of Supervisors
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Finance Committee
EXECUTIVE SUMMARY
ACTION ITEM
Agenda Title: Wage and Compensation Discussion (Staff Contract: Kimberly G. Van
Der Hyde)
Staff Contact(s): Kimberly G. Van Der Hyde
Agenda Date: August 17, 2021 Item Number: 5.f
Attachment(s):
Reviewed By:
SUMMARY:
County Staff will provide the Committee a brief update on recent legislation changes to Virginia
wage and compensation laws and other related topics.
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