RESOLUTION

A RESOLUTION APPROVING A PLAN OF LEASE FINANCING WITH THE VIRGINIA RESOURCES AUTHORITY FOR THE CONSTRUCTION OF A PUBLIC SAFETY RADIO COMMUNICATIONS SYSTEM, APPROVING THE FORM OF CERTAIN DOCUMENTS PREPARED IN CONNECTION THEREWITH AND AUTHORIZING THE DISTRIBUTION, EXECUTION AND DELIVERY OF THE SAME

WHEREAS, the Board of Supervisors (the “Board”) of Fauquier County, Virginia (the “County”), has determined to acquire, construct and equip improvements to its public safety radio communications system (the “Project”);

WHEREAS, there has been presented to the Board a plan for lease financing the Project through the Virginia Resources Authority (“VRA”), which would not create a debt of the County for purposes of the Virginia Constitution;

WHEREAS, there have been presented to this meeting drafts of the following documents, which the Board proposes to execute or approve to carry out the purposes of the Project:

(a)        the most recent draft of a Lease between the Board, on behalf of the County, and VRA (the “Lease”), conveying to VRA a leasehold interest in the Project;

(b)        the most recent draft of a Financing Lease between VRA and the Board, on behalf of the County (the “Financing Lease”), conveying to the County a leasehold interest in the Project;

(c)        the most recent draft of a Local Lease Acquisition Agreement between VRA and the County (the “Local Lease Acquisition Agreement”), setting forth the terms and conditions upon which VRA and the County will enter into the Financing Lease; and

(d)        the most recent draft of a Nonarbitrage Certificate and Tax Compliance Agreement between VRA and the County (the “Tax Compliance Agreement”);  now, therefore, be it

RESOLVED, by the Fauquier County Board of Supervisors this 15th day of April, 2002, That:

1.         Essentiality of Project.  The Board determines that the Project is essential to the efficient operation of the County, and the County anticipates that the Project will continue to be essential to the operations of the County during the term of the Financing Lease.

2.         Authorization of Lease and Financing Lease.  The forms of the Lease and the Financing Lease submitted to this meeting are approved.  The Chairman and Vice-Chairman of the Board and the County Administrator, any of whom may act, are authorized to execute the Lease and the Financing Lease 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 of the Board or the County Administrator, whose approval shall be evidenced conclusively by the execution and delivery thereof.  All capitalized terms used but not otherwise defined herein shall have the same meaning as set forth in the Financing Lease.

3.         Terms of Financing Lease.  The following plan for financing the Project is approved.  VRA will loan a portion of the proceeds of its VRA’s Infrastructure Revenue Bonds (Pooled Loan Bond Program), Series 2002A (the “VRA Bonds”), to the County to construct the Project.  The County will lease the Project to VRA pursuant to the terms of the Lease.  VRA will be requested to lease the Project back to the County pursuant to the terms of the Financing Lease under which the County will make Rental Payments to VRA in amounts sufficient to pay principal and interest on the portion of the VRA Bonds attributable to the Project.  The final pricing terms of the Financing Lease shall be satisfactory to the County Administrator; provided, however, that (a) the aggregate total of principal components of Rental Payments shall not exceed $7,400,000, (b) the term of the Financing Lease shall expire no later than December 31, 2017, (c) the interest component of Rental Payments shall have a “true” interest cost not to exceed 7.00% per year (exclusive of “supplemental interest” as provided in the Financing Lease), (d) the total amount of proceeds made available to the County under the Financing Lease for the Project shall not be less than $6,900,000, and (e) the principal components of Rental Payments shall be subject to prepayment as set forth in the Financing Lease.  Subject to the preceding terms, the Board further authorizes the County Administrator to (a) determine the aggregate total of principal components of Rental Payments and (b) establish the Schedule of Rental Payments including the dates and amounts in such manner as the County Administrator shall determine to be in the best interest of the County.

Following the pricing of the corresponding VRA Bonds, the County Administrator shall evidence his approval of the final pricing terms of the Financing Lease by executing and delivering to VRA the Local Lease Acquisition Agreement, which shall be in substantially the form presented to this meeting, with such completions, omissions, insertions and changes not inconsistent with this Resolution as may be approved by the County Administrator.  The actions of the County Administrator in determining the final pricing terms of the Financing Lease shall be conclusive, and no further action shall be necessary on the part of the Board.

As set forth in the Financing Lease, 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 Capital Reserve Fund.  Rental Payments due under the Financing Lease shall be payable in lawful money of the United States of America.

4.         Payment and Prepayment Provisions.  Rental Payments due under the Financing Lease shall be made as set forth in the Financing Lease.  The County may, at its option, prepay the principal components of Rental Payments upon the terms set forth in the Financing Lease.

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

6.         Annual Budget.  The Board believes that funds sufficient to make payment of all amounts payable under the Financing Lease can be obtained.  While recognizing that it is not empowered to make any binding commitment to make such payments beyond the current fiscal year, the Board hereby states its intent to make annual appropriations for future fiscal years in amounts sufficient to make all such payments and hereby recommends that future Boards do likewise during the term of the Financing Lease.  The Board directs the County’s Director of Finance, or such other officer who may be charged with the responsibility for preparing the County’s annual budget, to include in the budget request for each fiscal year during the term of the Financing Lease an amount sufficient to pay all amounts coming due under the Financing Lease during such fiscal year.  As soon as practicable after the submission of the County’s annual budget to the Board, the County Administrator is authorized and directed to deliver to VRA evidence that a request for an amount sufficient to make the payment of all amounts payable under the Financing Lease has been made.  Throughout the term of the Financing Lease, the County Administrator shall deliver to VRA within 30 days after the adoption of the budget for each fiscal year, but not later than July 1, a certificate stating whether an amount equal to the Rental Payments and any other amounts due under the Financing Lease which will be due during the next fiscal year has been appropriated by the Board in such budget.  If at any time during any fiscal year of the County, through the fiscal year ending June 30, 2018, the amount appropriated in the County’s annual budget in any such fiscal year is insufficient to pay when due the amounts payable under the Financing Lease, the Board directs the Director of Finance, or such other officer who may be charged with the responsibility for preparing the County’s annual budget, to submit to the Board at the next scheduled meeting, or as promptly as practicable but in any event within 45 days, a request for a supplemental appropriation sufficient to cover the deficit.

7.         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 interest attributable to the Rental Payments under the Financing Lease to be “arbitrage bonds,” within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, including regulations applicable to the Bond (the “Code”), or otherwise cause the interest components of the Rental Payments due under the Financing Lease to be includable in the gross income for federal income tax purposes of the registered owners thereof under existing law.  Without limiting the generality of the foregoing, the County shall comply with any provision of law that may require the County at any time to rebate to the United States any part of the earnings derived from the investment of the gross proceeds of the funds received under the Financing Lease, unless the County receives an opinion of nationally recognized bond counsel that such compliance is not required to prevent the interest components of Rental Payments due under the Financing Lease 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.

8.         Tax Compliance Agreement.  Such officers of the County as may be requested are authorized and directed to execute the Tax Compliance Agreement, which is hereby approved, with such completions, omissions, inserts and changes not inconsistent with this Resolution as may be approved by the officers of the County executing such document, whose approval shall be evidenced by the execution and delivery thereof.

9.         Private Activity Covenants.  The County covenants that it shall not permit the proceeds derived from the Financing Lease to be used in any manner that would result in (a) 5% or more of such proceeds or facilities being financed with such proceeds being used in any trade or business carried on by any person other than a governmental unit, as provided in Section 141(b) of the Code, (b) 5% or more of such proceeds or facilities being financed 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 or facilities being financed with such proceeds being used directly or indirectly to make or finance loans to any person other than a governmental unit, as provided in Section 141(c) of the Code; provided, 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 components of Rental Payments 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.

10.       Official Statement.  The Board 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.

11.       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 undertaking of the Project 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 actions considered necessary or desirable in connection with the execution and delivery of the Lease and the Financing Lease and the undertaking of the Project.  Any authorization herein to execute a documents shall include authorization to deliver it to the other parties thereto and to record such document where appropriate.

12.       Effective Date.  This Resolution shall become effective immediately.  The County Attorney is hereby authorized and directed to file a certified copy of this Resolution with the Clerk of the Circuit Court of Fauquier County, Virginia.

Text Box: RICHMOND 819257v2