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Home My WebLink AboutCouncil Actions 10-01-01The Roanoke City Council Planning Retreat information packet is in the October 18, 2001 Council file. HARRIS 35591-100101 ROANOKE CITY CO UNCIL REGULAR SESSION OCTOBER 1, 2001 12:lS P. M. CITY COUNCIL CHAMBER ,4 GEND,4 FOR THE COUNCIL Call to Order--Roll Call. (Council Member Harris was absent when the vote was recorded on the three Closed Sessions.) A report of the City Attorney requesting that Council convene in Closed Session to consult with legal counsel on a matter of probable litigation, pursuant to Section 2.2-3711.A.7, Code of Virginia (1950), as amended. (Approved 6-0) File//83-132 THE MEETING WAS DECLARED IN RECESS FOLLOWING THE CITY ATTORNEY'S CLOSED SESSION TO BE IMMEDIATELY RECONVENED AT 12:35 P.M. IN THE EMERGENCY OPERATIONS CENTER CONFERENCE ROOM, ROOM 159, FOR TWO BRIEFINGS BY THE CITY MANAGER. A communication from Council Member C. Nelson Harris, Chair, City Council's Personnel Committee, requesting that Council meet in Closed Session to discuss appointment of a new Municipal Auditor, pursuant to Section 2.2-3711 .A. 1, Code of Virginia (1950), as amended. (Approved 6-0) File #132-280 A communication from Mayor Ralph K. Smith requesting that Council meet in Closed Session to discuss a special award, i.e.: 2001 Citizen of the Year, pursuant to Section 2.2-3711.A. 10, Code of Virginia (1950), as amended. (Approved 6-0) File #110-132 800 Mhz Trunking 20 minutes. Received and filed. File #5-262-301-472 System Intergovernmental Agreement Briefing. Housing Update Briefing. Received and filed. File #178 10 minutes. THE MEETING WAS DECLARED IN RECESS AT 1:55 P.M. TO BE RECONVENED AT 2:00 P.M., IN THE CITY COUNCIL CHAMBER. 2 ROANOKE CITY CO UNCIL REGULAR SESSION OCTOBER 1, 2001 2:00 P.M. CITY COUNCIL CHAMBER AGENDA FOR THE COUNCIL Call to Order--Roll Call. (~,u present) The Invocation was delivered by The Reverend James P. Beatty, Pastor, Bethel AME Church, Cave Spring. The Pledge of Allegiance to the Flag of the United States of America was led by Mayor Ralph K. Smith. Welcome. Mayor Smith. NOTICE: Meetings of Roanoke City Council are televised live on RVTV Channel 3. Today's meeting will be replayed on Channel 3 on Thursday, October 4, 2001, at 7:00 p.m., and Saturday, October 6, 2001, at 4:00 p.m. Council meetings are now being offered with closed captioning for the hearing impaired. 3 ANNOUNCEMENTS: THE PUBLIC IS ADVISED THAT MEMBERS OF COUNCIL RECEIVE THE CITY COUNCIL AGENDA AND RELATED COMMUNICATIONS, REPORTS, ORDINANCES AND RESOLUTIONS, ETC., ON THE THURSDAY PRIOR TO THE COUNCIL MEETING TO PROVIDE SUFFICIENT TIME FOR REVIEW OF INFORMATION. CITIZENS WHO ARE INTERESTED IN OBTAINING A COPY OF ANY ITEM LISTED ON THE AGENDA MAY CONTACT THE CITY CLERK'S OFFICE, ROOM 456, NOEL C. TAYLOR MUNICIPAL BUILDING, 215 CHURCH AVENUE, S. W., OR CALL 853-2541. THE CITY CLERK'S OFFICE NOW PROVIDES THE CITY COUNCIL AGENDA PACKAGE ON THE INTERNET FOR VIEWING AND RESEARCH PURPOSES. TO ACCESS THE AGENDA MATERIAL, GO TO THE CITY'S HOMEPAGE AT www.roanokegov.com, CLICK ON THE ROANOKE CITY COUNCIL ICON, CLICK ON MEETINGS AND AGENDAS, AND DOWNLOAD THE ADOBE ACROBAT SOFTWARE TO ACCESS THE AGENDA. ALL PERSONS WISHING TO ADDRESS COUNCIL ARE REQUESTED TO REGISTER WITH THE STAFF ASSISTANT WHO IS LOCATED AT THE ENTRANCE TO THE COUNCIL CHAMBER. ON THE SAME AGENDA ITEM, ONE TO FOUR SPEAKERS WILL BE ALLOTTED FIVE MINUTES EACH, HOWEVER, IF THERE ARE MORE THAN FOUR SPEAKERS, EACH SPEAKER WILL BE ALLOTTED THREE MINUTES. ANY PERSON WHO IS INTERESTED IN SERVING ON A CITY COUNCIL APPOINTED AUTHORITY, BOARD, COMMISSION OR COMMITTEE IS REQUESTED TO CONTACT THE CITY CLERK'S OFFICE AT 853-2541 TO OBTAIN AN APPLICATION. 4 PRESENTATIONS: Proclamation declaring September 30 - October 6, 2001, as Mental Illness Awareness Week. File #3-314 Proclamation declaring the month of October, 2001, as United Against Hate Month. File #3 Proclamation declaring October 7 - 13,2001, as Fire Prevention Week. File #3-70 Proclamation declaring October 11,2001, as Lights on Afierschool! Day. File #3-467 e CONSENT AGENDA (APPROVED 7-0) ALL MATTERS LISTED UNDER THE CONSENT AGENDA ARE CONSIDERED TO BE ROUTINE BY THE MEMBERS OF CITY COUNCIL AND WILL BE ENACTED BY ONE MOTION. THERE WILL BE NO SEPARATE DISCUSSION OF THE ITEMS. IF DISCUSSION IS DESIRED, THE ITEM WILL BE REMOVED FROM THE CONSENT AGENDA AND CONSIDERED SEPARATELY. C-1 A communication from Mayor Ralph K. Smith requesting that Council convene in Closed Session to discuss personnel matters, specifically interviews for appointments to the Architectural Review Board and the Industrial Development Authority, pursuant to Section 2.2.-3711 .A. 1, Code of Virginia (1950), as amended. RECOMMENDED ACTION: Concur in request. File #110-132 5 C-2 A communication from the City Manager requesting that Council schedule a public hearing for Thursday, October 18, 2001, at 7:00 p.m., or as soon thereafter as the matter may be heard with regard to abandonment of a permanent utility easement - Times World Corporation. RECOMMENDED ACTION: Concur in request. File #28-227 C-3 A communication from Council Member C. Nelson Harris transmitting a proposal for Council's consideration with regard to recognizing the location of past historic buildings in the central downtown Roanoke area. RECOMMENDED ACTION: File #32-132-216-277 Concur in request to forward $25,000.00 to 2002-03 budget study. C-4 Qualification of Troy Andrew Harmon as Acting Municipal Auditor, effective at 12:01 a.m., on September 28, 2001. RECOMMENDED ACTION: Receive and file. File #280 REGULAR AGENDA 3. HEARING OF CITIZENS UPON PUBLIC MATTERS: ao Request to address Council with regard to renaming Elmwood Park in honor of the late Dr. Martin Luther King, Jr. E. Duane Howard, Spokesperson. Received and filed. File #67-80 bo Request to address Council with regard to fire stations. Evelyn D. Bethel, Spokesperson. Received and filed. File #70 4. PETITIONS AND COMMUNICATIONS: ao A communication from George J. A. Clemo, Attorney, transmitting measures for VPSA Interest Rate Subsidy Bond Financing for Fairview Elementary School and Fishburn Park Elementary School. Adopted Resolution 35592-100101. (7-0) File #53-467 No. 35591-100101 and Resolution No. 5. REPORTS OF OFFICERS: a. CITY MANAGER: BRIEFINGS' 1. Fair Housing Board Update. 10 minutes. Received and filed. File #110-178 ITEMS RECOMMENDED FOR ACTION: ge A communication with regard to amendment to the Regional 800 Mhz Trunking System Intergovernmental Agreement. Adopted Ordinance No. 35593-100101. (7-0) File #5-262-301-472 A communication with regard to the Sister Cities Sculpture Project. Adopted Ordinance No. 35594-100101. (7-0) File #110-249-311-327 A communication with regard to contract awards for the Crystal Spring Water Treatment Filtration Plant. Adopted Ordinance No. 35595-100101, Resolution No. 35596-100101, Budget Ordinance No. 35597-100101, and Resolution No. 35598-100101. (7-0) File #27-468 o A communication recommending that the City Manager be authorized to enter into a contract with U. S. Cellular for continued use of Stop Abuse From Existing (SAFE) Program cell phones and service for a period of one year. Adopted Resolution No. 35599-100101. (7-0) File #291-383 o A communication recommending that the City Manager be authorized to enter into a contract with the Roanoke Foundation for Downtown, Inc., to allow for construction of a utility building at the Roanoke Centre for Industry and Technology in furtherance of the Police Mounted Patrol Unit; and acceptance of the building by the City upon completion. Adopted Ordinance No. 35600-100101. (7-0) File #5-277 o A communication recommending adoption of a resolution in support of the Master Plan of the cultural institutions of the Roanoke Valley. Adopted Resolution No. 35601-100101. (7-0) File #230 b. DIRECTOR OF FINANCE: Financial report for the month of August, 2001. Received and filed. File #1-10 6. REPORTS OF COMMITTEES: NONE. 7. UNFINISHED BUSINESS: NONE. INTRODUCTION AND CONSIDERATION OF ORDINANCES AND RESOLUTIONS: NONE. 9. MOTIONS AND MISCELLANEOUS BUSINESS: ae Inquiries and/or comments by the Mayor, Vice-Mayor and Members of City Council. Council Member Wyatt inquired about the status of the City's annual Affirmative Action report. File #411 Council Member White requested information with regard to the City's record of purchasing goods and services under $15,000.00 from small/minority businesses. File #360-411-497 The Mayor inquired if an audit of the records and affairs of the Roanoke City School Board has been performed pursuant to action taken by Council on Monday, September 17, 2001; whereupon, the Acting Municipal Auditor advised that a meeting has been scheduled for some time within the next two weeks. File #10-280-467 bo Vacancies on various authorities, boards, commissions and committees appointed by Council. 9 10. OTHER HEARING OF CITIZENS UPON PUBLIC MATTERS: CITY COUNCIL SETS THIS TIME AS A PRIORITY FOR CITIZENS TO BE HEARD. IT IS A TIME FOR CITIZENS TO SPEAK AND A TIME FOR COUNCIL TO LISTEN. MATTERS REQUIRING REFERRAL TO THE CITY MANAGER WILL BE REFERRED IMMEDIATELY FOR ANY NECESSARY AND APPROPRIATE RESPONSE, RECOMMENDATION OR REPORT TO COUNCIL. Mr. Bob Caudle, 4231 Belford Street, S. W., read a prepared statement in opposition to renaming Elmwood Park in honor of the late Dr. Martin Luther King, Jr. File #67-80 Ms. Helen E. Davis, 35 Patton Avenue, N. E., raised questions and expressed concerns with regard to the City's procedure for solid waste collection. File #66-144 Ms. Evelyn D. Bethel, 35 Patton Avenue, N. E., addressed Council with regard to communications with citizens and issues of accountability. File #66-132 The Council meeting was declared in recess for three closed sessions. Council Member White left the meeting. CERTIFICATION OF CLOSED SESSION. (6-0) S. Deborah Olyer and William L. Bova were reappointed as members of the Industrial Development Authority for terms ending October 20, 2005. File #15-207 THE MEETING WAS DECLARED IN RECESS UNTIL WEDNESDAY, OCTOBER 3, 2001, AT 9:00 A.M., AT APPLE RIDGE FARM, 9230 PINE FOREST ROAD, N. E., COPPER HILL, VIRGINIA, AT WHICH TIME COUNCIL WILL HOLD A PLANNING RETREAT. l0 WILLIAM M. HACKWORTH CITY ATTOI~N-Ey CITY OF ROANOKE OFFICE'OF CITY A__2~ ~ ~ ROANOKE, VIRGINIA 24011-1595 '0! FAX: 540-853-1221 E-MAIL: cityatty~ci.roanoke.va.us ELIZABETH IC DILLON STEVEN J. TALEVI GARY E. TEGENKAMP DAVID L. COLLINS CAROLYN H. FURROW ASSISTANT CITY ATTORNEYS October 1,2001 The Honorable Mayor and Members of City Council Roanoke, Virginia Re: Request for closed meeting Dear Mayor Smith and Council Members: This is to request that City Council convene a closed meeting to consult with legal counsel on a matter of probable litigation, pursuant to §2.2-3711.A.7, Code of Virginia (1950), as amended. With kindest personal regards, I am Sincerely yours, WMH:f cc: Darlene L. Burcham, City Manager Mary F. Parker, City Clerk William M. Hackworth City Attorney CITY OF ROANOKE ) CITY COUNCIL 215 Church Avenue, S.W., Room 456 ~, ~.~:~~ Roanoke, Virginia 24011-1536 _. Telephone: (540) 853-2541 Fax: (540) 853-1145 RALPH K. SMITH Mayor October 1,2001 Council Members: William D. Bestpitch William H. Carder C. Nelson Harris W. Alvin Hudson, Jr. William White, Sr. Linda F. Wyatt The Honorable Mayor and Members of Roanoke City Council Roanoke, Virginia Dear Mayor Smith and Members of Council: I would like to request that Council convene in Closed Session on Monday, October 1,2001, to discuss appointment of a new Municipal Auditor, pursuant to Section 2.2-3711 .A.1, Code of Virginia (1950), as amended. With kindest regards, I am Sincerely, C. Nelson Harris, Chair City Council's Personnel Committee CNH:MFP:mh RALPH K. SMITH Mayor CITY OF ROANOKE CITY COUNCIL 215 Church Avenue, S.W., Room 456 Roanoke, Virginia 24011-1536 Telephone: (540) 853-254] Fax: (540) 853-1145 October 1,2001 Council Members: William D. Bestpitch William H. Carder C. Nelson Harris W. Alvin Hudson, Jr. William White, Sr. Linda F. Wyatt The Honorable Vice-Mayor and Members of Roanoke City Council Roanoke, Virginia Dear Vice-Mayor Carder and Members of Council: I would like to request that Council convene in Closed Session on Monday, October 1, 2001, to discuss a special award, i.e.: 2001 Citizen of the Year, pursuant to Section 2.2.-3711.A.10, Code of Virginia (1950), as amended. With kindest regards, I am Sincerely, Mayor RKS:MFP:mh Office of the City Manager October 1, 2001 Honorable Ralph K. Smith, Mayor, and Members of City Council Roanoke, Virginia Dear Mayor Smith and Members of Council: Subject: Amendment to Regional 800 Mhz Trunking System Intergovernmental Agreement This is to request space on Council's agenda for a briefing during the 12:15 session on the above referenced subject. Respectfully submitted, City Manager DLB:sm c: City Attorney Director of Finance City Clerk Room 3(54 Municipal South 215 Church Avenue, S.W. Roanoke, Virginia 24011-1591 (540) 853-2333 FAX (540) 853-1138 CityWeb:www. ci,roanoke.va,us Office of the City Manager October 1, 2001 Honorable Ralph K. Smith, Mayor, and Members of City Council Roanoke, Virginia Dear Mayor Smith and Members of Council: Subject: Housing Update This is to request space on Council's agenda for a briefing during the 12:15 session on the above referenced subject. Respectfully submitted, Dade~ City Manager DLB:sm C: City Attorney Director of Finance City Clerk Room 364 Municipal South 215 Church Avenue, S.W. Roanoke, Virginia 24011-1591 (540) 853-2333 FAX (540) 853-1138 CityWeb:www. ci.raanoke.va.us WHEREAS, during the past decade, a wide array of effective new medications for severe mental illness have been developed, and genetic discoveries and progressive brain research continue to move us closer to sound medical answers for living with, and perhaps one day curing or preventing, severe mental illnesses; and WHEREAS, no area of health care is changing more than mental health; and advances are prompted by better science and more research, the information revolution, the important role consumers play in advocating for themselves, and family members who speak out for their loved ones; and WHEREAS, science has greatly expanded our understanding and treatment of severe mental illnesses; and once forgotten in back wards of mental institutions, individuals with these disorders have a real chance at reclaiming full and productive lives, but only if they have access to treatments, services and programs that are vital to recovery; and WHEREAS, depression, bipolar disorder, schizophrenia, and obsessive- compulsive disorder account for an estimated twenty percent of the world's total disability resulting from all diseases and injuries; and for every U. S. taxpayer dollar spent on medical research, less than one cent is allocated to schizophrenia, one of the most disabling mental illnesses; and WHEREAS, as underscored by U. S. Surgeon General David Satcher in his 1999 landmark report on mental health, stigma toward mental illness remains a pervasive and potentially lethal barrier to mental illness recovery. NOW, THEREFORE, I, Ralph IC Smith, Mayor of the City of Roanoke, Virginia, in order to increase public awareness of severe mental illness and to promote greater understanding for those who suffer from the potentially disabling symptoms of these disorders, do hereby proclaim September 30- October 6, 2001, throughout this great All-America City, as MENTAL ILLNESS AWARENESS WEEK. Given under our hands and the Seal of the City of Roanoke this thirtieth day of September in the year two thousand and one. ArrE/ Mary F. Parker City Clerk Ralph K. Smith Mayor WHEREA~ various community organizations, civic groups, religious organizations and governmental bodies concerned with the growing incidences of hate in our country and community were organized in !999 for the purpose of gaining a broader understanding of hate within the Roanoke Valley; and WHEREAS, WHEREAS, WHEREAS, the purpose of this working group is to bring together diverse community representation to lend appropriate perspectives to hate and to develop initiatives to eradicate hate from our community; and this working group began a major community initiative to promote education regarding hate incidents, the devastation of hate on victims and in the community and to build a better, more tolerant community composed of individuals and organizations working together; and this country has become the victim of hate within recent weeks.and all communities must join hands to confront issues regarding hate. NOW, THEREFORE, I, Ralph iK Smith, Mayor of the City of Roanoke, Virginia, encourage social and community tolerance and do hereby proclaim the month of October, 2001, throughout this great All-America City, as "UNITED AGAINST HA TE MONTH: Given under our hands and the Seal of the City of Roanoke this first day of October in the year two thousand and one. A I~EST: Mary F Parker City Clerk Ralph E. Smith Mayor WHEREAS, WHEREAS, WHEREAS, WHEREAS, cooking, heating and electrical fires represent three of the nation's leading causes of home fires, and are collectively responsible for nearly, one half of all home fires and almost one-third of associated fire deaths and the vast majority of these types of fires can be prevented by taking simple safety precautions, and developing and regularly practicing a thorough home fire escape plan is critical to escaping a fire safely; and proper installation, testing and maintenance of smoke alarms are part of a thorough home fire escape plan; and the Fire Prevention Week 2001 theme, "Cover Your Bases & Strike Out Fire," teaches the public how to prevent cooking, heating and electrical fires, and encourages citizens to develop a home fire escape plan that includes working smoke alarms; and Roanoke Fire-EMS is dedicated to the safety of life andpropertyfrom the devastating effects of fire and is joined by other concerned citizens, emergency service providers, safety advocates, businesses, schools, service clubs and organizations in fire safety efforts; and WHEREAS, the week of October 7 - 13, 2001, has been designated to commemorate the Great Chicago Fire o fi 871 which killed more than 250persons, left 100, O00 persons homeless and destroyed more than 17, 400 structures. NOW, THEREFORE, L Ralph lC Smith, Mayor of the City of Roanoke, Virginia, encourage all citizens to take the necessary steps to make their homes and families safe from the leading causes of home fires; and to commemorate the Great Chicago Fire of 187I, do hereby proclaim the week of October 7 - 13, 2001, throughout this great All-America City, as FIRE PREVENTION WEEK. Given under our hands and the Seal of the City of Roanoke this first day of October in the year two thousand and one. ATTEST: Mary F. Parker City Clerk Ralph lc Smith Mayor CITY OF ROANOKE citizens of the City of Roanoke stand firmly committed to quality afterschool programs designed to stimulate the imagination of children and to enrich the lives of students; to provide a safe, friendly learning environment for children that will boost their academic achievement; to support working families by ensuring that their children are safe and productive after the regular school day ends; to encourage families to become more effective partners in the education of their children; and to build stronger communities by involving students, parents, business leaders and adult volunteers in the lives of our young people; and the City of Roanoke has provided significant leadership by promoting community involvement in the education and well-being o four yo, uth, grounded on the principle that quality afterschool programs are a critical link to helping children become successful adults; and WI-IE~, Lights on Aflerschooll, a national celebration of afterschool programs on October I I, promotes the critical importance of quality afierschool programs in the lives of children, their families and their communities. NOW, THEREFORE, I, Ralph K. Smith, Mayor of the City of Roanoke, Virginia, call upon all citizens to assure that every child has access to a safe, friendly place where lights are on afierschool on the day of October I 1, 2001, and enthusiastically endorse Lights on Aferschooi! and encourage our community to engage in innovative afierschool programs and activities which ensure that children are safe and productive when the school day ends; and do hereby proclaim Thursday, October 11, 2001, throughout this great All-Ame~ica City, as LIGHTS ON AFTERSCHOOL! DA Y. Given under our hands and the Seal of the City of Roanoke this first day of October in the year two thousand and one. ATTEST: Mary F. Parker City Clerk RALPH K. SMITH Mayor CITY OF ROANOKE CITY COUNCIL 215 Church Avenue, S.W., Room 456 Roanoke, Virginia 24011-1536 Telephone: (540) 853-2541 Fax: (540) 853-1145 October 1,2001 Council Members: William D. Bestpitch William H. Carder C. Nelson Harris W. Alvin Hudson, Jr. William White, Sr. Linda F. Wyatt The Honorable Vice-Mayor and Members of Roanoke City Council Roanoke, Virginia Dear Vice-Mayor Carder and Members of Council: I would like to request that Council convene in Closed Session on Monday, October 1,2001, to discuss personnel matters, specifically interviews for appointments to the Architectural Review Board and the Industrial Development Authority, pursuant to Section 2.2-3711 .A.1, Code of Virginia (1950), as amended. With kindest regards, I am Sincerely, Mayor RKS:MFP:mh RECEIVED CLLrRK~)~t~fbrhee,,,-.- .._ City Manager October 1, 2001 Honorable Ralph K. Smith, Mayor Honorable William H. Carder, Vice Mayor Honorable William D. Bestpitch, Council Member Honorable C. Nelson Harris, Council Member Honorable W. Alvin Hudson, Jr., Council Member Honorable William White, Sr., Council Member Honorable Linda F. Wyatt, Council Member Dear Mayor Smith and Members of City Council: Subject: Abandonment of Permanent Utility Easement - Request of Times-World Corporation Pursuant to the requirements of the Virginia Code, the City of Roanoke is required to hold a public hearing on the proposed conveyance or vacation of property rights. This is to request that a public hearing be advertised on the above matter for Council's regular meeting to be held on Thursday, October 18, 2001. ^ full report will be included in the October 18, 2001, agenda material for your consideration. DLB/SEF Respectfully submitted, Darlen~ City Manager C: Mary F. Parker, City Clerk William M. Hackworth, City Attorney James D. Grisso, Director of Finance Sarah E. Fitton, Engineering Coordinator Room 364 Municipal South 215 Church Avenue, S.W. Roanoke, Virginia 24011-1591 (540) 853-2333 FAX (540) 853-1138 CityWeb:www. ci.roanoke.va.us CITY OF ROANOKE Office of the City Clerk Mary F. Parker, CMC City Clerk Stephanie M. Moon Deputy City Clerk October 3, 2001 ~'File #32-132-216-277 Darlene L. Burcham City Manager Roanoke, Virginia Dear Ms. Burcham: I am attaching copy of a communication from Council Member C. Nelson Harris with regard to recognizing the location of past historic buildings in the central downtown Roanoke area, which communication was before the Council of the City of Roanoke at a regular meeting on Monday, October 1, 2001. On motion, duly seconded and unanimously adopted, Council concurred in the request to forward $25,000.00 to 2002-03 budget study. Sincerely, Mary F. Parker, CMC City Clerk MFP:mh pc: The Honorable C. Nelson Harris James D. Grisso, Director of Finance D. Kent Chrisman, Chair, City Planning Commission, 2319 Avenham Avenue, S. W. Roanoke, Virginia 24014 R. Matthew Kennell, Executive Director, Downtown Roanoke, Inc., 310 First Street, S. W., Roanoke, Virginia 24011 Barry L. Key, Director, Office of Management and Budget H:XAgenda.01\October 1, 2001 correspondancc.wpd RALPH K. SMITH Mayor CITY OF ROANOKE CITY COUNCIL 215 Church Avenue, S.W., Room 456 Roanoke, Virginia 24011-1536 Telephone: (540) 853-2541 Fax: (540) 853-1145 October 1, 2001 Council Members: William D. Bestpitch William H. Carder C. Nelson Harris W. Alvin Hudson, Jr. William White, Sr. Linda F. Wyatt The Honorable Mayor and Members of Roanoke City Council Roanoke, Virginia Dear Mayor Smith and Members of Council: I wish to advise you of an initiative I am taking in an effort to acknowledge and highlight the history of downtown Roanoke. As you know, over the course of many years, significant historic buildings have been lost in the central downtown area. This would include the Roanoke High School, Academy of Music, movie theaters, Terry Building, and some hotels to name a few. I would like to propose that we place in the sidewalks at the "addresses" of these former buildings a plaque recognizing where they once stood. The plaques would be simple, dL~rable markers that could make a "historic trail" through our downtown and complement the other his.toric and cultural amenities of this regk~n of our City. In order to move forward on this project - as yet untitled - I have spoken with our City Manager and have met with Kent Chrisman of the Historical Society and Matt Kennell of DRI, Inc., and both have enthusiastically agreed to assis, t me in forming a working group to solidify the concept for presentation and hopefully adoption 'by the Council. Please know that this working group will be small in number and we aim to complete our work in a brief but intensive manner. Once we have identified the buildings to be marked and the type of plaques to be installed, I will make a more complete presentation to Council for your consideration and approval. Having done some initial pricing of markers, etc., I would like at this time to ask that $25,000.00 be forwarded to the 2002-03 budget study for this proposed project. Should Council choose to support this initiative in the near future, the financial support necessarywould have been appropriately handled as a part of the budget process. The Honorable Mayor and Members of Roanoke City Council October 1,2001 Page 2 It is not my intention to speak at any length on this at our next Council meeting, so I would respectfully request that if you have any questions, please contact me in advance of our meeting on October 1st. As always, I am grateful for your consideration of my request. Again, I am not asking at this time for your approval of the project. I am only requesting that the matter be forwarded to budget study for potential approval by the Council, upon formal presentation by myself and the working group. Respectfully submitted, C. Nelson Harris Council Member CNH:mh Oath or Affirmation of Office Commonwealth of Virginia, City of Roanoke, to-wit: I, Troy Andrew Harmon, do solemnly swear (or affirm) that I will support the Constitution of the United States of America and the Constitution of the Commonwealth of Virginia, and that I will faithfully and impartially discharge and perform all the duties incumbent upon me as Acting Municipal Auditor effective at 12:01 a.m., on September 28, 2001, according to the best of my ability. I swear or affirm. Subscribed and sworn to before me this~/,~r~ day of ~~ 2001. A~UR B. CRUSH, III, CLERK , DEPUTY CLERK N:\CKMH 1 ~Agenda,01 \Sept. 17.01 .corresp (Part II).wpd Septbmber 25, 2001 The Honorable Mayor and Members Roanoke City Council Roanoke, Virginia Dear Mayor Smith and Members of Council: I would like to address City Council on the Subject of Renaming Elmwood Park for Dr. Martin Luther King, Jr. The fact I'm making this request and will prepare a 5 minute statement, I have no way of know how many more at the last minute might decide they want to speak, so I'm requesting a full five minutes! Sincerely, E. Duane Howard 508-B Walnut Avenue, S. W. Roanoke, Virginia 24016 (540) 982-1085 35 Patton Ave., NE Historic Gainsboro Roanoke, VA 24016 September 24, 2001 Mary Parker, City Clerk Roanoke City 215 Church Avenue, S. W. Roanoke, Virginia 24011 Dear Ms. Parker: It is requested that we be placed on City Council's agenda for a fifteen minute presemation on Monday, October 1, 2001 at the 2:00pm meeting. The topic to be discussed is "fire stations". Thank you very much. Sincerely yours, CITY OF ROANOKE Office of the City Clerk Mary F. Parker, CMC City Clerk Stephanie M. Moon Deputy City Clerk October 3, 2001 File #53-467 George J. A. Clemo, Bond Counsel Woods, Rogers and Hazlegrove, PLC P. O. Box 14125 Roanoke, Virginia 24038-4125 Dear Mr. Clemo: I am enclosing copy of Resolution No. 35592-100101 authorizing issuance of'bond financing, in an amount not to exceed $2,500,000.00, to finance certain capital improvements in connection with Fishburn Park Elementary School, pursuant to an application filed with the Virginia Public School Authority by the City Manager. The abovereferenced measure was adopted by the Council of the City of Roanoke at a regular meeting which was held on Monday, October 1,2001. Sincerely, Mary F. Parker, CMC City Clerk MFP:mh Enclosure pc: Darlene L. Burcham, City Manager James D. Grisso, Director of Finance Sherman Lea, Chair, Roanoke City School Board, 1638 Lonna Drive, N. W., Roanoke, Virginia 24019 Dr. E. Wayne Harris, Superintendent, Roanoke City Public Schools Cindy H. Lee, Clerk, Roanoke City School Board H:kAgenda.01\October 1, 2001 correspondance.wpd IN THE COUNCIL OF THE CITY OF ROANOKE, VIRGINIA The 1st day of October, 2001. [FISHBURN PARK] Resolution No. 35592-100101. RESOLUTION AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $2,500,000 GENERAL OBLIGATION SCHOOL BONDS OF THE CITY OF ROANOKE, VIRGINIA, SERIES 2001-B, TO BE SOLD TO THE VIRGINIA PUBLIC SCHOOL AUTHORITY AND PROVIDING FOR THE FORM AND DETAILS THEREOF. WHEREAS, in September, 2000, the Commonwealth of Virginia Board of Education (the "Board of Education") placed the application (the "Application") of the School Board of the City of Roanoke, Virginia (the "School Board"), for a loan of $3,000~000 (the "Literary Fund Loan") from the Literary Fund, a permanent trust fund established by the Constitution of Virginia (the "Literary Fund"), for the construction, renovation and expansion of school buildings (the "Project") in the City of Roanoke, Virginia (the "City"), on the First Priority Waiting List; WHEREAS, the Board of Education was to have approved the release of Literary Fund moneys to the School Board and make a commitment to loan such moneys to the School Board (the "Commitment") within one (1) year of placement of the Application on the First Priority Waiting List upon receipt of the Literary Fund of an unencumbered sum available at least equal to the amount of the Application and the approval, by the Board of Education, of the Application as having met all conditions for a loan from the Literary Fund; WHEREAS, the Board of Education was thereafter to have given advances on the amount of the Commitment for the Literary Fund Loan to the School Board, as construction or renovation of the Project progressed, in exchange for temporary notes from the School Board to the Literary Fund (the "Temporary Notes") for the amounts so advanced; WHEREAS, after the completion of the Project and the advance of the total amount of the Commitment, the Temporary Notes were to have been consolidated into a permanent loan note of the School Board to the Literary Fund (the "Literary Fund Obligation") which was to evidence the obligation of the School Board to repay the Literary Fund Loan; WHEREAS, the Literary Fund Obligation was to have borne interest at four percent (4%) per annum and mature in annual installments for a period of twenty (20) years; WHEREAS, in connection with the 2001 Interest Rate Subsidy Program (the "Program"), the Virginia Public School Authority (the "VPSA") has offered to purchase general obligation school bonds of the City, and the Board of Education has offered to pay, to the City, a lump sum cash payment (the "Lump Sum Cash Payment") equal to the sum of (i) net present value difference, determined on the date on which the VPSA sells its bonds, between the weighted average interest rate that the general obligation school bonds of the City will bear upon sale to the VPSA and the interest rate that the Literary Fund Obligation would have borne plus (ii) an allowance for the costs of issuing such bonds of the City (the "Issuance Expense Allowance"); WHEREAS, the City Council (the "Council") of the City has determined that it is necessary and expedient to borrow not to exceed $2,500,000 and to issue its general obligation school bonds for the purpose of financing certain capital projects for school purposes; and {RKE#0718027.DOC-1} WHEREAS, the City held a public hearing, duly noticed, on September 17, 2001, on the issuance of the Bonds (as defined below) in accordance with the requirements of Section 15.2-2606, Code of Virginia 1950, as amended (the "Virginia Code"); and WHEREAS, the School Board of the City has, by resolution, requested the Board to authorize the issuance of the Bonds (as hereinafter defined); NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF SUPERVISORS OF THE CITY OF ROANOKE, VIRGINIA: 1..AuthoriTarian of Ronda and lla~ af Praeeeda, The Council hereby determines that it is advisable to contract a debt and issue and sell its general obligation school bonds in an aggregate principal amount not to exceed $2,500,000 (the "Bonds") for the purpose of financing certain capital projects for school purposes. The Council hereby authorizes the issuance and sale of the Bonds in the form and upon the terms established pursuant to this Resolution. 2. ~ala of tho Ronda. It is determined to be in the best interest of the City to accept the offer of the Virginia Public School Authority (the "VPSA") to purchase from the City, and to sell to the VPSA, the Bonds at a price, determined by the VPSA to be. fair and accepted by the Mayor and the City, that is not less than 98% of par and not more than 103% of par upon the terms established pursuant to 'this Resolution except that in the event the purchase price determined by the VPSA exceeds the upper limit of 103%, the City, at the request of the VPSA, will lower the amount of the local school bonds to be issued to provide a purchase price for such bonds and a proceeds amount that is within 103% of the amount requested pursuant to the City's application submitted to the VPSA. The Mayor, the City Manager, and such officer or officers of the City as either may designate are hereby authorized and directed to enter into a Bond Sale Agreement dated as of October 9, 2001, with the VPSA providing for the sale of the Bonds to the VPSA in substantially the form submitted to the Council at this meeting, which form is hereby approved (the "Bond Sale Agreement"). 3. l}etail.a of tho Pmnda. The Bonds shall be issuable in fully registered form; shall be dated the date of issuance and delivery of the Bonds; shall be designated "General Obligation School Bonds, Series 2001-B"; shall bear interest from the date of delivery thereof payable semi-annually on each January 15 and July 15 beginning July 15, 2002 (each an "Interest Payment Date"), at the rates established in accordance with Section 4 of this Resolution; and shall mature on July 15 in the years (each a "Principal Payment Date") and in the amounts set forth on Schedule I of Exhibit A attached hereto (the "Principal Installments"), subject to the provisions of Section 4 of this Resolution. · 4. lntar~t Rata and Prlncinal ln.~tallmant,~_ The City Manager is hereby authorized and directed to accept the interest rates on the Bonds established by the VPSA, provided that each interest rate shall be ten one-hundredths of one percent (0.10%) over the interest rate to be paid by the VPSA for the corresponding principal payment date of the bonds to be issued by the VPSA (the "VPSA Bonds"), a portion of the proceeds of which will be used to purchase the Bonds, and provided further, that the true interest cost of the Bonds does not exceed five and eighty five one-hundredths percent (5.85 %) per annum. The Interest Payment Dates and the Principal Installments are subject to change at the request of the VPSA. The City Manager is hereby authorized and directed to accept changes in the Interest Payment Dates (P~V.#07~s027. Doc-~ 2 and the Principal Installments at the request of the VPSA, provided that the aggregate principal amount of the Bonds shall not exceed the amount authorized by this Resolution. The execution and delivery of the Bonds as described in Section 8 hereof shall conclusively evidence such interest rates established by the VPSA and Interest Payment Dates and the Principal Installments requested by the VPSA as having been so accepted as authorized by this Resolution. 5. Form of the Ronda. The Bonds shall be initially in the form of a single, temporary typewritten bond substantially in the form attached hereto as Exhibit A. 6. Payment~ PavinE AEent and Rond Rm~istrar. The following provisions shall apply to the Bonds: (a) For as long as the VPSA is the registered owner of the Bonds, all payments of principal, premium, if any, and interest on the Bonds shall be made in immediately available funds to the VPSA at, or before 11:00 a.m. on the applicable Interest Payment Date or Principal Payment Date, or if such date is not a business day for Virginia banks or for the Commonwealth of Virginia, then at or before 11:00 a.m. on the business day next preceding such Interest Payment Date or Principal Payment Date. (b) All overdue payments of principal and, to the extent permitted by law, interest shall bear interest at the applicable interest rate or rates on the Bonds. (c) SunTrust Bank, Richmond, Virginia, is designated as Bond Registrar and Paying Agent for the Bonds. 7. No Rmlemntlnn or Pr~.nayment. The Principal Installments of thc Bonds shall not be subject to redemption or prepayment. Furthermore, the Council covenants, on behalf of the City, not to refund or ref'mance the Bonds without first obtaining the written consent of the VPSA or the registered owner of the Bonds. 8. Execution of the Pmnda. The Mayor or Vice Mayor and the City Clerk or any Deputy City Clerk are authorized and directed to execute and deliver the Bonds and to affix the seal of the City thereto. 9. PlmiEe of Full l~aith and C, redlt. For the prompt payment of the principal of and premium, if any, and the interest on the Bonds as the same shall become due, the full faith and credit of the City are hereby irrevocably pledged, and in each year while any of the Bonds shall be outstanding there shall be levied and collected in accordance with law an annual ad valorem tax upon all taxable property in the City subject to local taxation sufficient in amount to provide for the payment, of the principal of and premium, if any, and the interest on the Bonds as such principal, premium, if any, and interest shall become due, which tax shall be without limitation as to rate or amount and in addition to all other taxes authorized to be levied in the City to the extent other funds of the City are not lawfully available and appropriated for such purpose. 10. lht~ tar Prncm~l.a Certificate and Certificate aa to ArhitraEe. The Mayor, the City Manager and such officer or officers of the City as either may designate are hereby authorized and directed to execute a Certificate as to Arbitrage and a Use of Proceeds Certificate each setting forth the expected use and investment of the proceeds of the Bonds and containing such covenants as may be necessary in order to show compliance with the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and { RKE#0718027. DOC-1 } 3 applicable regulations relating to the exclusion from gross income of interest on the Bonds and on the VPSA Bonds except as provided below. The Council covenants on behalf of the City that (i) the proceeds from the issuance and sale of the Bonds will be invested and expended as set forth in such Certificate as to Arbitrage and such Use of Proceeds Certificate and that the City shall comply with the other covenants and representations contained therein and (ii) the City shall comply with the provisions of the Code so that interest on the Bonds and on the VPSA Bonds will remain excludable from gross income for Federal income tax purposes. 11. State Nnn-ArhitraEe Prn_~ram.. Proeeed.~ Aureement. The Council hereby determines that it is in the best interests of the City to authorize an'~l dire~t the City Treasurer to participate in the State Non-Arbitrage Program in connection with the Bonds. The Mayor, the City Manager and such officer or officers of the City as either may designate are hereby authorized and directed to execute and deliver a Proceeds Agreement with respect to the deposit and investment of proceeds of the Bonds by and among the City, the other participants in the sale of the VPSA Bonds, the VPSA, the investment manager and the depository, substantially in the form submitted to the Council at this meeting, which form is hereby approved. 12. ConfinninE l~i.aelflaur~ AErc~ment. The Mayor, the City Manager and such officer or officers of the City as either may designate are hereby authorized and directed to execute a Continuing Disclosure Agreement, as set forth in Appendix F to thc Bond Sale Agreement, setting forth thc reports and notices to be filed by thc City and containing such covenants as may be necessary in order to show compliance with the provisions of the Securities and Exchange Commission Rule 15c2-12 and directed to make all filings required by Section 3 of the Bond Sale Agreement should thc City be determined by the VPSA to be a MOP (as defined in the Continuing Disclosure Agreement). 13. Filin_o of R~lufinn. The appropriate officers or agents of the City are hereby authorized and directed to cause a certified copy of this Resolution to be filed with the Circuit Court of the City. 14. F. lllghgg. Aglifl~. The members of the Council and all officers, employees and agents of the City are hereby authorized to take such action as they or any one of them may consider necessary or desirable in connection with the issuance and sale of the Bonds and any such action previously taken is hereby ratified and conf'mned. 15. g.~a~a~l}~. This Resolution shall take effect immediately. {RKE#0718027.DOC-1} The undersigned Clerk of the City of Roanoke, Virginia, hereby certifies that the foregoing constitutes a true and correct extract from the minutes of a meeting of the City Council held on October 1, 2001, and of the whole thereof so far as applicable to the matters referred to in such extract. I hereby further certify (a) that such meeting was a regularly scheduled meeting and that, during the consideration of the foregoing resolution, a quorum was present, and (b) that the attendance of the members and voting on the foregoing resolution was as follows: Ralph K. Smith, Mayor William H. Carder, Vice Mayor William D. Bestpitch C. Nelson Harris W. Alvin Hudson, Jr. William White, Sr. Lynda F. Wyatt Prenent Ahnent Aye ]~ Ahntain WITNESS MY HAND and the seal of the City of Roanoke, Virginia, this 2001. day of October, Clerk, City of Roanoke, Virginia [SEAL] {RKE%0718027.DOC-1} 5 CITY OF ROANOKE Office of the City Clerk Mary F. Parker, CMC City Clerk Stephanie M. Moon Deputy City Clerk October 3, 2001 File #53-467 George J. A. Clemo, Bond Counsel Woods, Rogers and Hazlegrove, PLC P. O. Box 14125 Roanoke, Virginia 24038-4125 Dear Mr. Clemo: I am enclosing copy of Resolution No. 35591-100101 authorizing issuance of bond financing, in an amount not to exceed $2,750,000.00, to finance certain capital improvements in connection with Fairview Elementary School, pursuant to an application filed with the Virginia Public School Authority by the City Manager. The abovereferenced measure was adopted by the Council of the City of Roanoke at a regular meeting which was held on Monday, October 1,2001. Mary F. Parker, CMC City Clerk ; MFP:mh Enclosure pc: Darlene L. Burcham, City Manager James D. Grisso, Director of Finance Sherman Lea, Chair, Roanoke City School Board, 1638 Lonna Drive, N. W., Roanoke, Virginia 24019 Dr. E. Wayne Harris, Superintendent, Roanoke City Public Schools Cindy H. Lee, Clerk, Roanoke City School Board H:kAgenda.01\October 1, 2001 correspondance.wpd IN THE COUNCIL OF THE CITY OF ROANOKE, VIRGINIA The 1st day of October, 2001. [FAIRVIEWl Resol~ionNo. 35591-100101. RESOLUTION AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $2,750,000 GENERAL OBLIGATION SCHOOL BONDS OF THE CITY OF ROANOKE, VIRGINIA, SERIES 2001-A, TO BE SOLD TO THE VIRGINIA PUBLIC SCHOOL AUTHORITY AND PROVIDING FOR THE FORM AND DETAH~S THEREOF. WHEREAS, in September, 2000, the Commonwealth of Virginia Board of Education (the "Board of Education") placed the application (the "Application") of the School Board of the City of Roanoke, Virginia (the "School Board"), for a loan of $Z/200,000 (subsequently amended to $2,750,000) (the "Literary Fund Loan") from the Literary Fund, a permanent trust fund established by the Constitution of Virginia (the "Literary Fund"), for the construction, renovation and expansion of school buildings (the "Project") in the City of Roanoke, Virginia (the "City"), on the First Priority Waiting List; WHEREAS, the Board of Education was to have approved the release of Literary Fund moneys to the School Board and make a commitment to loan such moneys to the School Board (the "Commitment") within one (1) year of placement of the Application on the First Priority Waiting List upon receipt of the Literary Fund of an unencumbered sum available at least equal to the amount of the Application and the approval, by the Board of Education, of the Application as having met all conditions for a loan from the Literary Fund; WHEREAS, the Board of Education was thereafter to have given advances on the amount df the Commitment for the Literary Fund Loan to the School Board, as construction or renovation of the Project progressed, in exchange for temporary notes from the School Board to the Literary Fund (the "Temporary Notes") for the amounts so advanced; WHEREAS, after the completion of the Project and the advance of the total amount of the Commitment, the Temporary Notes were to have been consolidated into a permanent loan note of the School Board to the Literary Fund (the "Literary Fund Obligation") which was to evidence the obligation of the School Board to repay the Literary Fund Loan; WHEREAS, the Literary Fund Obligation was to have borne interest at four percent (4%) per annum and mature in annual installments for a period of twenty (20) years; WHEREAS, in connection with the 2001 Interest Rate Subsidy Program (the "Program"), the Virginia Public School Authority (the "VPSA") has offered to purchase general obligation school bonds of the City, and the Board of Education has offered to pay, to the City, a lump sum cash payment (the "Lump Sum Cash Payment") equal to the sum of (i) net present value difference, determined on the date on which the VPSA sells its bonds, between the weighted average interest rate that the general obligation school bonds of the City will bear upon sale to the VPSA and the interest rate that the Literary Fund Obligation would have berne plus (ii) an allowance for the costs of issuing such bonds of the City (the "Issuance Expense Allowance"); WHEREAS, the City Council (the "Council") of the City has determined that it is necessary and expedient to borrow not to exceed $2,750,000 and to issue its general obligation school bonds for the purpose of financing certain capital projects for school purposes; and {RKE#071809_ 8. DOC- 1} WHEREAS, the City held a public hearing, duly noticed, on September 17, 2001, on the issuance of the Bonds (as defined below) in accordance with the requirements of Section 15.2-2606, Code of Virginia 1950, as amended (the "Virginia Code"); and WHEREAS, the School Board of the City has, by resolution, requested the Board to authorize the issuance of the Bonds (as bereinaf~er defined); NOW~ THEREFORE~ BE IT RESOLVF.,D-BY THE BOARD OF SUPERVISORS OF THE CITY OF ROANOKE, VIRGINIA: 1. 'Authnrla,atlnn of Ronda and IT.~e of Prnec~4_q. The Council hereby determines that it is advisable to contract a debt and issue and sell its general obligation school bonds in an aggregate principal amount not to exceed $2,750,000 (the "Bonds") for the purpose of financing certain capital projects for school purposes. The Council hereby authorizes the issuance and sale of the Bonds in the form and upon the terms established pursuant to this Resolution. 2. Sale of the Honda. It is determined to be in the best interest of the City to accept the offer of the Virginia Public School Authority (the "VPSA") to purchase from the City, and to sell to the VPSA, the Bonds at a price, determined by the VPSA to be. fair and accepted by the Mayor and the City, that is not less than 98% of par and not more than 103% of par upon the terms established pursuant to 'this Resolution except that in the event the purchase price determined by the VPSA exceeds the upper limit of 103%, the City, at the request of the VPSA, will lower the amount of the local school bonds to be issued to provide a purchase price for such bonds and a proceeds amount that is within 103% of the amount requested pursuant to the City's application submitted to the VPSA. The Mayor, the City Manager, and such officer or officers of the City as either may designate are hereby authorized and directed to emer into a Bond Sale Agreement dated as of October 9, 2001, with the VPSA providing for the sale of the Bonds to the VPSA in substantially the form submitted to the Council at this meeting, which form is hereby approved (the "Bond Sale Agreement"). 3. I}etaii.a nf the Panda, The Bonds shall be issuable in fully registered form; shall be dated the date of issuance and delivery of the Bonds; shall be designated "General Obligation School Bonds, Series 2001-A"; shall bear interest from the date of delivery thereof payable semi-annually on each January 15 and July 15 beginning July 15, 2002 (each an "Interest Payment Date"), at the rates established in accordance with Section 4 of this Resolution; and shall mature on July 15 in the years (each a "Principal Payment Date") and in the amounts set forth on Schedule I of Exhibit A attached hereto (the "Principal Installments"), subject to the provisions of Section 4 of this Resolution. * 4. Infarct Rat~ and Prinei.m~l ln.atallmentq. The City Manager is hereby authorized and directed to accept the interest rates on the Bonds established by the VPSA, provided that each interest rate shall be ten one-hundredths of one percent (0.10%) over the interest rate to be paid by the VPSA for the corresponding principal payment date of the bonds to be issued by the VPSA (the "VPSA Bonds"), a potion of the proceeds of which will be used to purchase the Bonds, and provided further, that the true interest cost of the Bonds does not exceed five and eighty five one-hundredths percent (5.85 %) per annum. The Interest Payment Dates and the Principal Installments are subject to change at the request of the VPSA. The City Manager is hereby authorized and directed to accept changes in the Interest Payment Dates {RKE#0718028. DOC-l} 2 and the Principal Installments at the request of the VPSA, provided that the aggregate principal amount of the Bonds shall not exceed the amount authorized by this Resolution. The execution and delivery of the Bonds as described in Section 8 hereof shall conclusively evidence such interest rates established by the VPSA and Interest Payment Dates and the Principal Installments requested by the VPSA as having been so accepted as authorized by this Resolution. 5. Farm of the Ronda. The Bonds shall be initially in the form of a single, temporary typewritten bond substantially in the form attached hereto as Exhibit A. Bonds: 6. Payment.' Pavino_ A_oent and Rnnd Re~i_'ntrar. The following provisions shall apply to the (a) For as long as the VPSA is the registered owner of the Bonds, all payments of principal, premium, if any, and interest on the Bonds shall be made in immediately available funds to the VPSA at, or before 11:00 a.m. on the applicable Interest Payment Date or Principal Payment Date, or if such date is not a business day for Virginia banks or for the Commonwealth of Virginia, then at or before 11:00 a.m. on the business day next preceding such Interest Payment Date or Principal Payment Date. (b) All overdue payments of principal and, to the extent permitted by law, interest shall bear interest at the applicable interest rate or rates on the Bonds. (c) SunTrust Bank, Richmond, Virginia, is designated as Bond Registrar and Paying Agent for the Bonds. 7. No Rc~lemntlnn or Pr~_na.vment. The Principal Installments of the Bonds shall not be subject to redemption or prepayment. Furthermore, the Council covenants, on behalf of the City, not to refund or refinance the Bonds without fast obtaining the written consent of the VPSA or the registered owner of the Bonds. 8. l~.x~eutlnn of the Ronda. The Mayor or Vice Mayor and the City Clerk or any Deputy City Clerk are authorized and directed to execute and deliver the Bonds and to affix the seal of the City thereto. 9. Plcnlge of Fall Faith and Crtwlit For the prompt payment of the principal of and premium, if any, and the interest on the Bonds as the same shall become due, the full faith and credit of the City are hereby irrevocably pledged, and in each year while any of the Bonds shall be outstanding there shall be levied and collected in accordance with law an annual ad valorem tax upon all taxable property in the City subject to local taxation sufficient in amount to provide for the payment, of the principal of and premium, if any, and the interest on the Bonds as such principal, premium, if any, and interest shall become due, which tax shall be without limitation as to rate or amount and in addition to all other taxes authorized to be levied in the City to the extent other funds of the City are not lawfully available and appropriated for such purpose. 10. line of Pr~eeeda Certificate and ~ertifieat~ a~a to ArhitraEe. The Mayor, the City Manager and such officer or officers of the City as either may designate are hereby authorized and directed to execute a Certificate as to Arbitrage and a Use of Proceeds Certificate each setting forth the expected use and investment of the proceeds of the Bonds and containing such covenants as may be necessary in order to show compliance with the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and {RKE#0718028. DOC-1 } 3 applicable regulations relating to the exclusion from gross income of interest on the Bonds and on the VPSA Bonds except as provided below. The Council covenants on behalf of the City that (i) the proceeds from the issuance and sale of the Bonds will be invested and expended as set forth in such Certificate as to Arbitrage and such Use of Proceeds Certificate and that the City shall comply with the other covenants and representations contained therein'and (ii) the City shall comply with the provisions of the Code so that interest on the Bonds and on the VPSA Bonds will remain excludable from gross income for Federal income tax purposes. 11. ,qtat~ Nnn-ArhitraE~ ProEram_.. Proeoadn AEr~em~nt. The Council hereby determines that it is in the best interests of thc City to authorize and direct the City Treasurer to participate in the State Non-Arbitrage Program in connection with the Bonds. The Mayor, the City Manager and such officer or officers of the City as either may designate are hereby authorized and directed to execute and deliver a Proceeds Agreement with respect to the deposit and investment of proceeds of the Bonds by and among the City, the other participants in the sale of the VPSA Bonds, the VPSA, the investment manager and the depository, substantially in the form submitted to the Council at this meeting, which form is hereby approved. 12. Contlnuin_~ lliaelflanr~ AEro. merit, The Mayor, the City Manager and such officer or officers of the City as either may designate are hereby authorized and directed to execute a Continuing Disclosure Agreement, as set forth in Appendix F to the Bond Sale Agreement, setting forth the reports and notices to be filed by the City and containing such covenants as may be necessary in order to show compliance ~,vith the provisions of the Securities and Exchange Commission Rule 15c2-12 and directed to make all filings required by Section 3 of the Bond Sale Agreement should the City be determined by the VPSA to be a MOP (as defined in the Continuing Disclosure Agreement). 13. gilinE of Romdntion The appropriate officers or agents of the City are hereby authorized and directed to cause a certified copy of this Resolution to be filed with the Circuit Court of the City. 14. ~. The members of the Council and all officers, employees and agents of the City are hereby authorized to take such action as they or any one of them may consider necessary or desirable in connection with the issuance and sale of the Bonds and any such action previously taken is hereby ratified and confirmed. 15. F.~fae, lixa~. This Resolution shall take effect immediately. {RKE#0718028.DGC-1} The undersigned Clerk of the City of Roanoke, Virginia, hereby certifies that the foregoing constitutes a true and correct extract from the minutes of a meeting of the City Council held on October 1, 2001, and of the whole thereof so far as applicable to the matters referred to in such extract. I hereby further certify (a) that such meeting was a regularly scheduled meeting and that, during the consideration of the foregoing resolution, a quorum was present, and (b) that the attendance of the members and voting on the foregoing resolution was as follows: Prenent Ahnent Aye Nay Ahntain Ralph K. Smith, Mayor William H. Carder, Vice Mayor William D. Bestpitch C. Nelson Harris W. Alvin Hudson, Jr. William White, Sr. Lynda F. Wyatt WITNESS MY HAND and the seal of the City of Roanoke, Virginia, this __ 2001. day of October, Clerk, City of Roanoke, Virginia [SEAt.] {RKE#0718028.DOC-1} WILLIAM M. HACKWORTH CITY ATTORNEY CITY OF ROANOKE OFFICE OF CITY ATTORNEY 464 MUNICIPAL BUILDING 215 CHURCH AVENUE, SW ROANOKE, VIRGINIA 24011-1595 TELEPHONE: 540-853-2431 FAX: 540-853-1221 E-MAIL: cityatty@ci.roanoke.va.us September 27, 2001 RECEIVED GARY E. TEGENKAMP ASSISTANT CITY ATTORNEYS Mary F. Parker, City Clerk City of Roanoke, Virginia Re~ General Obligations Bonds Issuance for Fairview Elementary and Fishbum Elementary Dear Mary: Attached please find a letter/report of George Clemo, Bond Counsel, with resolutions and draft agreements, to be included with the agenda items for the October 1, 2001, Council Meeting. Sincerely yours, / Eliz~l~eth K. Dillon Assistant City Attomey EKD/lsc GEORGEJ. A. CLEMO 540 983-7728 INTERNET:clemo~woodsroge~.com WOODS, ROGERS & HAzI ,EGROVE Attorneys at Law September 26, 2000 VIA HAND DELIVERY Elizabeth K. Dillon Assistant City Attomey 464 Municipal Building 215 Church Avenue, SW Roanoke, VA 24011-1595 In Re: VPSA Interest Rate Subsidy Bond Financings for: Fairview Elementary School Fishburn Park Elementary School Dear Elizabeth: I attach two redweld shucks containing the relevant documentation for each of the two financings mentioned above in connection with the adoption by City Council at its October 1 meeting of final bond resolutions approving each of the two bond issuances. These bond financings for Fairview Elementary School and Fishbum Park Elementary School have been previously approved by Council. The Bond Resolutions provide for final approval by Council of the Bonds and related documents. A public hearing on the bond issuances was held before Council on September 17. Each shuck contains two folders. The first folder contains all of the documentation necessary for the Council meeting, and includes: The Bond Resolution. The Bond Sale Agreement and Appendices. Draft Proceeds Agreement. As you know, the Bond Sale Agreement and Appendices constitute the agreement by the Virginia Public School Authority to purchase the City's local bond and includes the various terms, conditions and requirements applicable to VPSA's obligation to purchase the bonds. The Proceeds Agreement is also required by VPSA and provides for the proceeds of the bonds to be held in an account under the State Non-Arbitrage Program (SNAP) until needed to pay costs of the project. This is to insure that the proceeds of the bonds are properly invested in compliance with applicable state law RKE# 0718003.WPD C/M: 077826-00038-01 lv. O. Box 14125 / Roanoke, Virginia 24038-4125 10 South Jefferson Street, Suite 1400 / Roanoke, Virginia 24011 540 983-7600 / Fax 540 983-7711 Internet -- mail~woodsrogers.corn Offices also in Charlottesville, Danville and Rich~nond, VirRinia September 26, 2001 Page 2 on permissible investments and with applicable federal tax law restrictions on earning arbitrage. Avoiding any violation of the federal restrictions on arbitrage is critical to maintaining the tax exemption of the bonds. In the second folder in each shuck, you will find four execution copies of the Bond Sale Agreement. Following adoption of the Bond Resolutions on Monday, each of these must be signed by the City Manager and returned to me no later than October 5, so that I may deliver them to VPSA by its deadline of October 9. Once the resolutions are adopted by Council, please send me a certified copy of each resolution showing the attendance and voting information. I will take care of filing certified copies of the resolutions with the Clerk of the Circuit Court. As always, I appreciate very much all of your assistance. Please do not hesitate to call if there are any questions. Best regards. Encl. CC.' Mark Vacha (via telefax; w/o encl.) Richard Kelley (via telefax; w/o encl.) RKE# 0718003.WPD C/M: 077826-00038-01 EXHIBIT A (FORM OF TEMPORARY BOND) NO. TS-1 UNITED STATES OF AMERICA COMMONWEALTH OF VIRGINIA CITY OF ROANOKE General Obligation School Bond Series 2001-B The CITY OF ROANOKE, VIRGINIA (the "City"), for value received, hereby acknowledges itself indebted and promises to pay to the VIRGINIA PUBLIC SCHOOL AUTHORITY the principal amount of DOLLARS ($ ), in annual installments in the amounts set forth on Schedule I attached hereto payable on July 15, 2002 and annually on July 15 thereafter to and including July 15, 2021 (each a "Principal Payment Date"), together with interest from the date of this Bond on the unpaid installments, payable semi-annually on January 15 and July 15 of each year, commencing on July 15, 2002 (each an "Interest Payment Date"; together with any Principal Payment Date, a "Payment Date"), at the rates per annum set forth on Schedule I attached hereto. Both principal of and interest on this Bond are payable in lawful money of the United States of America. For as long as the Virginia Public School Authority is the registered owner of this Bond, SunTrust Bank, Richmond, Virginia, as bond registrar (the "Bond Registrar"), shall make all payments of principal, premium, if any, and interest on this Bond, without the presentation or surrender hereof, to the Virginia Public School Authority, in immediately available funds at or before 11:00 a.m. on the applicable Payment Date or date fixed for prepayment or redemption. If a Payment Date or date fixed for prepayment or {RKE#0718027. DOC-1 } A-1 redemption is not a business day for banks in the Commonwealth of Virginia or for the Commonwealth of Virginia, then the payment of principal, premium, if any, or interest on this Bond shall be made in immediately available funds at or before 11:00 a.m. on the business day next preceding the scheduled Payment Date or date fixed for prepayment or redemption. Upon receipt by the registered owner of this Bond of said payments of principal, premium, if any, and interest, written acknowledgment of the receipt thereof shall be given promptly to the Bond Registrar, and the City shall be fully discharged of its obligation on this Bond to the extent of the payment so made. Upon final payment, this Bond shall be surrendered to the Bond Registrar for cancellation. The full faith and credit of the City are irrevocably pledged for the payment of the principal of and the premium, if any, and interest on this Bond. The resolution adopted by the City Council authorizing the issuance of the Bonds provides, and Section 15.2-2624, Code of Virginia 1950, as amended, requires, that there shall be levied and collected an annual tax upon all taxable property in the City subject to local taxation sufficient to provide for the payment of the principal, premium, if any, and interest on this Bond as the same shall become due which tax shall be without limitation as to rate or amount and shall be in addition to all other taxes authorized to be levied in the City to the extent other funds of the City are not lawfully available and appropriated for such purpose. This Bond is duly authorized and issued in compliance with and pursuant to the Constitution and laws of the Commonwealth of Virginia, including the Public Finance Act of 1991, Chapter 26, Title 15.2, Code of Virginia 1950, as amended, and resolutions duly adopted by the City Council and the School Board of the City to provide funds for capital projects for school purposes. This Bond may be exchanged without cost, on twenty (20) days written notice from the Virginia Public School Authority, at the office of the Bond Registrar on one or more occasions for two or more temporary bonds or definitive bonds in fully registered form in denominations of $5,000 and whole {RKE#0718027. DOC-1 } A-2 multiples thereof, and; in any case, having an equal aggregate principal amount having maturities and bearing interest at rates corresponding to the maturities of and the interest rates on the installments of principal of this Bond then unpaid. This Bond is registered in the name of the Virginia Public School Authority on the books of the City kept by the Bond Registrar, and the transfer of this Bond may be effected by the registered owner of this Bond only upon due execution of an assignment by such registered owner. Upon receipt of such assignment and the surrender of this Bond, the Bond Registrar shall exchange this Bond for definitive Bonds as hereinabove provided, such definitive Bonds to be registered on such registration books in the name of the assignee or assignees named in such assignment. The principal installments of this Bond are not subject to redemption or prepayment. All acts, conditions and things required by the Constitution and laws of the Commonwealth of Virginia to happen, exist or be performed precedent to and in the issuance of this Bond have happened, exist and have been performed in due time, form and manner as so required, and this Bond, together with all other indebtedness of the City, is within every debt and other limit prescribed by the Constitution and laws of the Commonwealth of Virginia. {RKE#0718027.DOC-1} A-3 IN WITNESS WHEREOF, the City Council of the City of Roanoke, Virginia has caused this Bond to be issued in the name of the City of Roanoke, Virginia, to be signed by its Mayor or Vice-Mayor, its seal to be affixed hereto and attested by the signature of its Clerk or any of its Deputy Clerks, and this Bond to be dated November ~ 2001. CITY OF ROANOKE, VIRGINIA (SEAL) Mayor, City of Roanoke, Virginia ATTEST: Clerk, City of Roanoke, Virginia {RKE%0718027.DOC-1} A-4 ASSIGNMENT FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE) PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE: the within Bond and irrevocably constitutes and appoints attorney to exchange said Bond for definitive bonds in lieu of which this Bond is issued and to register the transfer of such definitive bonds on the books kept for registration thereof, with full power of substitution in the premises. Date: Registered Owner Signature Guaranteed: (NOTICE: Signature(s) must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Bond Registrar which requirements will include Membership or participation in STAMP or such other "signature guarantee program" as may be determined by the Bond Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. (NOTICE: The signature above must correspond with the name of the Registered Owner as it appears on the front of this Bond in every particular, without alteration or change.) {RKE#0718027.DOC-1} A-5 7/1 5/02 1/15103 7115/03 1/15/04 7/1 5/04 1115/O5 7/15/05 1115/06 7/15/06 1/15/07 7115/07 1115/08 7/15108 1/15/09 7115/09 1115/10 7/15/10 111 5/11 7/1 5/11 1115/12 7115112 1/15/13 7/15/13 1/15114 7/15/14 1/15115 7/15t15 1/15116 7115/16 1/15/17 7/15/17 1115/18 7115/18 1/15/19 7/15/19 1/15/20 7115120 1115/21 7/1 5/21 1115122 7115/22 Totals $ VPSA Loan , Principal 118,212.00 118,322.00 118,170.00 118,012.00 117,847.00 117,675.00 117,496.00 117,309.00 117,175.00 117,154.00 117,283.00 117,567.00 117,985.00 118,543.00 119,251.00 120,084.00 121,022.00 122,069.00 123,200.00 124,390.O0 2,378,766.00 SCHEDULE I (FISHBURN PARK) Rate 4.100% 0.000% 4.100% 0.000% 4.100% 0.000% 4.100% 0.000% 4.100% 0.000% 4.100% 0.000% 4.100% 0.000% 4.100% 0.000% 4.200% 0.000% 4.300% 0.000% 4.450% 0.000% 4.550% 0.000% 4.650% 0.000% 4.750% 0.000% 4.850% 0.000% 4.900% 0.O00% 4.950% 0.000% 5.000% 0.000% 5.000% 0.000% 5.000% 0.000% Interest Total Fiscal To~al 73 036.91 5O 801,93 50 801.93 48 376.33 48 376.33 45 953.85 45 953.85 43 534.60 43 534.60 41 118.74 41 118.74 38 706.40 38 706.40 36 297.73 36 297.73 33 892.89 33 892.89 31 432.22 31 432.22 28 913.41 28 913.41 26 303.86 26 303.86 23~29.21 23,629.21 20,886.06 2O,886.06 18,070.67 18,070.67 15,178.83 15,178.83 12,236.77 12,236.77 9,241.48 9,241.48 6,189.75 6,189.75 3,109.75 3,109.75 0.00 $191.248.91 50 801.93 169 123.93 48 376.33 166 546.33 45 953.85 163 965.85 43 534.60 161 381.60 41 118.74 158 793.74 38 706.40 156 202.40 36 297.73 153 606.73 33 892.89 151 067.89 31 432.22 148 586.22 28 913.41 146,196.41 26,303.86 143,870.86 23,629.2.1 141 614.21 20 886.06 139 429.06 18 070.67 137 321.67 15 178.83 135 262.83 12,236.77 133,258.77 9,241.48 131,310.48 6,189.75 129,389.75 3,109.75 127,499.75 0.00 1,140,785.79 $3,519,55,.1.79 0.00 242,050.84 0.00 217,500.26 0.00 212,500.18 0.00 207,500.45 0.00 202,500.34 0.00 197,500.13 0.00 192,500.12 0.00 187,499.62 0.00 182,500.11 0.00 177,499.62 0.00 172,500.27 0.00 167,500.07 0.00 162,500.27 0.00 157,499.73 152,500.501::":::'::::: 0.00!. : · 147,499.60 0.00 142,500.25 0.00 137,50O.23 0.00 132,499.50 0.00 127,499.75 0.00 [FISHBURN PARK] VIRGINIA PUBLIC SCHOOL AUTHORITY BOND SALE AGREEMENT dated as of October 9, 2001 Name of Jurisdiction (the "Local Unit"): City ofRoanoke, Virginia Sale Date: Not earlier than October 15, 2001, nor later than October 31,2001 Closing Date: On or about November 15, 2001 Principal Amount (Requested): $2,500,000 Amortization Period: Up to Twenty (20) Years ********************************************************************************* 1. The Virginia Public School Authority ("VPSA") hereby offers to purchase your general obligation school bonds at a price, determined by the VPSA to be fair and accepted by you, that is not less than 98% of par and not more than 103% of par (105% ifa 10-year amortization is involved) in the Principal Amount set forth above (as authorized by your bond resolution) from the proceeds of the VPSA's bonds, the sale of which is scheduled to take place on the Sale Date. In the event that the purchase price determined by VPSA would exceed the upper limit of 103% or 105% you, at the request of VPSA;will lower the amount of the local school bonds to be issued to provide a purchase price for such bonds and a proceeds amount that is within 103% or 105% of the amount requested pursuant to your application submitted to VPSA. You represent that on or before October 9, 2001, your local governing body will have duly authorized the issuance of your bonds by adopting a resolution in the form attached hereto as Appendix B (the "local resolution") and that your bonds will be in the form set forth in the local resolution. Any changes that you or your counsel wish to make to the form of the local resolution and/or your bonds must be approved by the VPSA prior to adoption of the local resolution by your local governing body. 3. You hereby covenant that you will comply with and carry out all of the provisions of the Continuing Disclosure Agreement in the form attached hereto as Appendix E, which agreement is hereby incorporated by reference herein and expressly made a part hereof for all purposes. The VPSA has defined a Material Obligated Person ("MOP") for purposes of the Continuing Disclosure Agreement as any Local Issuer the principal amount of whose local school bonds pledged under VPSA's 1997 Resolution compromise more than 10% of the total principal amount of all outstanding 1997 Resolution bonds. MOP status will be determined by adding the principal amount of your local school bonds to be sold to the VPSA and the principal amount of your local bonds previously sold to the VPSA and currently pledged under VPSA's 1997 Resolution and measuring the total against 10% of the face value of all {RKE#0717764.DOC-! } outstanding bonds under VPSA's 1997 Resolution. If you are or may be a MOP, the VPSA may require that you file all the information described in the following paragraph prior to VPSA's mailing its Preliminary Official Statement, currently scheduled for October 12, 2001. You acknowledge that if you are, or in the sole judgment of VPSA may be, a MOP following the issuance of your local school bonds that are the subject of this Bond Sale Agreement, the VPSA will include by specific reference in its Preliminary Official Statements and final Official Statements (for this sale and, if you remain a MOP or become a MOP again after ceasing to be a MOP, for applicable future sales) the information respecting you ("Your Information") that is on file with the Nationally Recognized Municipal Securities Information Repositories or their respective successors ("NRMSIRs") and the Municipal Securities Rulemaking Board or its successors ("MSRB"). Accordingly, if it appears that you will be a MOP (i) following the delivery of your local school bonds to the VPSA in connection with this sale, or (ii) during the course of any future sale, whether or not you are a participant in such sale, you hereby represent and covenant to the VPSA that you will file such additional information, if any, as is required so that Your Information, as of each of (i) the date of the VPSA's applicable Preliminary Official Statement (in the case of this sale, expected to be October 12, 2001), (ii) the date of the VPSA's applicable final Official Statement (in the case of this sale, expected to be October 24, 2001) and (iii) the date of delivery of the applicable VPSA bonds (in the case of this sale, expected to be November 15, 2001), will be true and correct and will not contain any untrue statement of a material fact or omit to state a material fact which should be included in Your Information for the purpose for which it has been filed or which is necessary to make the statements contained in such information, in light of the circumstances under which they were made, not misleading. You further agree to furnish to the VPSA a copy of all filings you make with NRMSIRs and the MSRB subsequent to the date of this Agreement. Such copy will be famished to the VPSA on the same day that any such filing is made. The VPSA will advise you within 60 days of the end of each fiscal year if you were a MOP as of the end of such fiscal year. Upon written request, the VPSA will also advise you of your status as a MOP as of any other date. You hereby covenant that you will provide the certificate described in clause (e) of Section 4 below if VPSA includes Your Information by specific reference in its disclosure documents in connection with any future sale, whether or not you are a participant in such sale. VPSA's commitment to purchase your bonds is contingent upon (i) VPSA's receipt on the Closing Date of (a) your bonds which shall include and otherwise meet the Standard Terms and Conditions contained in Appendix A hereto, (b) certified copies of the local resolution (see Appendix B attached hereto), (c) an executed agreement, among VPSA, you and the other local units simultaneously selling their bonds to VPSA, the depository and the investment manager for the State Non-Arbitrage Program ("SNAP"), providing for the custody, investment and disbursement of the proceeds of your bonds and the other general obligation school bonds, and the payment by you and the other local units of the allocable, associated costs of compliance with the Internal Revenue Code of 1986, as amended, and any costs incurred in connection with your participation in SNAP (the "Proceeds Agreement"), (d) an executed copy of the Use of Proceeds Certificate in the form attached hereto as Appendix C, (e) if the VPSA has included by specific reference Your Information into the VPSA Preliminary and final {RKE#0717764.DOC-1} Official Statement, your certificate dated the date of the delivery of the VPSA's bonds to the effect that (i) Your Information was as of the date of the VPSA's Preliminary and final Official Statements, and is as of the date of the certificate, tree and correct and did not and does not contain an untrue statement of a material fact or omit to state a material fact which should be included in Your Information for the purpose for which it has been filed or which is necessary to make the statements contained in such information, in light of the circumstances under which they were made, not misleading, and (ii) you have complied with your undertakings regarding the amendments adopted on November 10, 1994 to Rule 15c2-12 under the Securities Exchange Act of 1934, as amended, (f) an approving legal opinion from your bond counsel in form satisfactory to VPSA as to the validity of the bonds and the exclusion from gross income for federal and Virginia income tax purposes of the interest on your bonds, the conformity of the terms and provisions of your bonds to the requirements of this Bond Sale Agreement including the appendices attached hereto, and the due authorization, execution and delivery of this Bond Sale Agreement, Continuing Disclosure Agreement and the Proceeds Agreement, and the validity of the Continuing Disclosure Agreement and the Proceeds Agreement, (g) a transcript of the other customary closing documents not listed above, (h) the proceeds of VPSA's bonds, (ii) if you will be using the proceeds of your bonds to retire a bond anticipation note, certificate of participation or other form of interim financing (the "Interim Security"), receipt by VPSA of (A) an opinion of your bond counsel that, as of the Closing Date, the Interim Security will be defeased according to the provisions of the instrument authorizing the Interim Security or it will no longer be outstanding (in rendering such opinion bond counsel may rely on a letter or certificate of an accounting or financial professional as to any mathematical computations necessary for the basis for such opinion) and (B) an executed copy of the escrow deposit agreement/letter of instruction providing for the retirement of the Interim Security and (iii) your compliance with the terms of this agreement. Two complete transcripts (one original) of the documents listed above shall be provided by your counsel to the VPSA on the Closing Date or, with VPSA's permission, as soon as practicable thereafter but in no event more than thirty (30) business days after the Closing Date. This Bond Sale Agreement shall take effect on October 9, 2001. Virginia Public School Authority By:. Authorized VPSA Representative City of Roanoke, Virginia By: Name: Darlene L. Burcham Title: City Manager { RKE#0717764.DOC- 1 } (For information only; not part of the Bond Sale Agreement.) Please have the presiding officer, or other specifically designated agent, of your goveming body execute 2 (two) copies of this Bond Sale Agreement and return them, along with the tax questionnaire attached hereto as Appendix D, no later than close of business on October 9, 2001; Richard A. Davis, Public Finance Manager, Virginia Public School Authority, P. O. Box 1879, Richmond, Virginia 23218-1879 or by hand or courier service, James Monroe Building- 3rd Floor, 101 N. 14th Street, Richmond, Virginia 23219. If your governing body or bond counsel requires more than one originally signed Bond Sale Agreement, please send the appropriate number; all but one will be returned at closing. {RKE#0717764.DOC-1 } APPENDIX A to the Bond Sale Agreement STANDARD TERMS AND CONDITIONS Described below are terms of the local school bonds which must be embodied in your bond resolution and bond form and other conditions which must be met in order for VPSA to purchase your local school bonds on the Closing Date. VPSA will not purchase local school bonds unless and until such terms are present in the related bond resolution and bond form adopted by your governing body and such conditions are met. Interest :and Princinal Payments Your bonds will bear interest fxom the Closing DateI set forth in the Bond Sale Agreement and will mature on July 15 of the years and in the amounts as established by VPSA. Your bonds will bear interest payable in installments due semiannually on January 15 and July 15. The first interest installment will be payable on July 15, 2002 and the first principal installment will be payable on July 15, 2002. Your bonds will bear interest at rates 10 basis points (0.10%) above the actual rates on VPSA's bonds with corresponding principal payment dates. For so long as the VPSA is the registered owner of your bonds, (i) the paying agent and bond registrar therefor shall be a bank or trust company qualified to serve as such, and If VPSA does not purchase your local school bonds on the Closing Date due to your fault, VPSA will invest, in demand or overnight investments, the amount of its bond proceeds to be used to purchase your local school bonds. If you cure your failure to deliver your local school bonds within the sixty (60) day period following the Closing Date, the VPSA will purchase your local school bonds and your bonds will bear interest from the date of delivery and payment or other date satisfactory to the VPSA. You will, however, be required to pay to VPSA at your actual closing an amount equal to the positive difference, if any, between the amount of interest that wouM have accrued on your local school bonds from the Closing Date to your actual closing date and the amount of interest income VPSA was able to earn, during such period, from the investment of its bond proceeds pending the& use to purchase your bonds. {RKE#0716210.DOC-1 } G:\SHARED~DEBTXVPSA~ISSUE~2001 b~APXA2001 b September 26, 2001 (ii) all payments of principal, premium, if any, and interest shall be made in funds that shall be immediately available to the VPSA on or before 11:00 A.M. on the applicable interest or principal payment date, or date fixed for prepayment or redemption, or if such date is not a business day for banks in Virginia or for the Commonwealth, then on or before 11:00 A.M. on the business day preceding such scheduled due date. Overdue payments of principal and, to the extent permitted by law, interest shall bear interest at the applicable interest rates on your bonds. Prenavment or Redemntion [Note: Local School Bonds purchased by VPSA as part of the 2001 Interest Rate Subsidy Program are not subject to redemption or prepayment. The following section applies to non-subsidized applicants only.] Bonds will be subject to redemption at the option of your governing body, subject to the consent of the VPSA or other registered owner. Your bond resolution shall provide for prepayment or redemption as follows: The bonds maturing after July 15, 2011 are subject to optional prepayment or redemption prior to maturity by [the issuer], from any available moneys, in whole or in part, on any date on or after July 15, 2011, at the following prepayment or redemption prices on the following prepayment or redemption dates, plus accrued interest to the date fixed for prepayment or redemption: Dalas Price July 15,2011 through July 14, 2012 July 15, 2012 through July 14, 2013 July 15, 2013 and thereat'~er 102% 101 100 Provided, however, that the bonds shall not be subject to prepayment or redemption prior to their respective maturities except with the prior written consent of the registered owner. Notice of any such prepayment or redemption shall be given to the registered owner by registered mail at least 60, but not more than 90, days prior to the date fixed for prepayment or redemption. {RKE#0716210.DOC-1 } G:\SHAREDXDEBT~VPSA~ISSUE~2001 b~APXA2001 b September 26, 2001 2 Your bonds must constitute valid and binding general obligations for the payment of which the full faith and credit of the local unit are irrevocably pledged, and all taxable property within the boundaries of the local unit must be subject to the levy of an ad valorem tax, over and above all other taxes and without limitation as to rate or amount, for the payment of the principal of, and premium, if any, and interest on the bonds to the extent other funds of the local unit are not lawfully available and appropriated for such purpose. Tax Matters You shall complete the Questionnaire attached hereto as Appendix D to the Bond Sale Agreement and send along with the Bond Sale Agreement no later than the close of business on October 9, 2001 to Richard A. Davis, Public Finance Manager, Virginia Public School Authority, P.O. Box 1879, Richmond, Virginia 23218-1879. If delivered by hand to, Richard A. Davis, Public Finance Manager, Virginia Public School Authority, James Monroe Building- 3rd Floor, 101 N. 14th Street, Richmond, Virginia 23219. You shall execute the Use of Proceeds Certificate in the form provided in Appendix C attached to the Bond Sale Agreement for receipt by the VPSA at least three business days prior to the Closing Date.2 No Comnosite l.qsne You will covenant not to sell or deliver, without VPSA's consent, any general obligation bonds which are part of the same common plan of financing (and payable from the same source of funds) as your local school bonds, beginning, in the case of a sale, 15 days in advance of and ending 15 days after the Sale Date. Request and Consent of Cmmtv School Floard3 Before the governing body of a County adopts the bond resolution, the County School Board must first request, by resolution, the governing body to take such action. The County School VPSA requires that the Use of Proceeds Certificate be executed separately from the tax certificates prepared by your bond counsel. Your bond counsel may also prepare one or more tax certificates that contain some information found in the Use of Proceeds Certificate in addition to information such as your reasonable expectations as to meeting the requirements to any of the rebate exceptions. 3 Not applicable to cities and towns. {RKE#0716210.DOC-1 } G:\SHARED~DEBTWPSAXISSUE~2001 b~APXA2001 b (Section 15. 2-2640, Code of Virginia) September 26, 2001 Board must also consent to the issuance of bonds by the County. (See form of resolution in Appendix E attached hereto.) Public Hearint~ and Notice Before the final authorization of your issuance of the bonds by the goveming body, the goveming body must hold a public hearing on the proposed issue unless the issuance of such bonds has been approved at referendum. The notice of the heating, meeting the requirements of Section 15.2-2606, Code of Virginia 1950, as amended, must be published once a week for 2 successive weeks (notices at least 7 days apart) in a newspaper published or having general circulation in your locality. The public hearing may not be held less than 6 nor more than 21 days after the date the second notice appears in the newspaper. Delivery VPSA will accept delivery of your bonds only in the form of a single, typewritten, temporary bond, in registered form, payable to VPSA. The form of the bond is included as Exhibit A to the resolution in Appendix B to the Bond Sale Agreement. On 20 days written notice from VPSA, you agree to deliver, at your expense, in exchange for the typewritten bond, on one or more occasions, one or more temporary bonds or definitive bonds in marketable form and, in any case, in fully registered form in denominations of $5,000 and whole multiples thereof, and having an equal aggregate principal amount, as requested by VPSA. Comprehen.qive Annual Financial Report Annually for the life of your bonds, you will be required to submit a copy of your locality's Comprehensive Annual Financial Report ("CAFR") or annual audited financial statements to the rating agencies referenced below: Moody's Investors Service, Inc. Public Finance Department Attention: Kathleen Holt 99 Church Street New York, New York 10007 Fitch, Inc. Governmental Finance Attention: Claire G. Cohen One State Street Plaza New York, New York 10004 {RKE#0716210.DOC-1 } G:\S HARED~DEBT~VPSA~ISSUE~2001 b~a. PXA2001 b September 26, 2001 4 APPENDIX B to the Bond Sale Agreement [FISHBURN PARK] Resolution No. RESOLUTION AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $2,500,000 GENERAL OBLIGATION SCHOOL BONDS OF THE CITY OF ROANOKE, VIRGINIA, SERIES 2001-B, TO BE SOLD TO THE VIRGINIA PUBLIC SCHOOL AUTHORITY AND PROVIDING FOR THE FORM AND DETAH.S THEREOF. WHEREAS, in September, 2000, the Commonwealth of Virginia Board of Education (the "Board of Education") placed the application (the "Application") of the School Board of the City of Roanoke, Virginia (the "School Board"), for a loan of $3,000,000 (the "Literary Fund Loan") from the Literary Fund, a permanent trust fund established by the Constitution of Virginia (the "Literary Fund"), for the construction, renovation and expansion of school buildings (the "Project") in the City of Roanoke, Virginia (the "City"), on the First Priority Waiting List; WHEREAS, the Board of Education was to have approved the release of Literary Fund moneys to the School Board and make a commitment to loan such moneys to the School Board (the "Commitment") within one (1) year of placement of the Application on the First Priority Waiting List upon receipt of the Literary Fund of an unencumbered sum available at least equal to the amount of the Application and the approval, by the Board of Education, of the Application as having met all conditions for a loan from the Literary Fund; WHEREAS, the Board of Education was thereafter to have given advances on the amount of the Commitment for the Literary Fund Loan to the School Board, as construction or renovation of the Project progressed, in exchange for temporary notes from the School Board to the Literary Fund (the "Temporary Notes") for the amounts so advanced; WHEREAS, after the completion of the Project and the advance of the total amount of the Commitment, the Temporary Notes were to have been consolidated into a permanent loan note of the School Board to the Literary Fund (the "Literary Fund Obligation") which was to evidence the obligation of the School Board to repay the Literary Fund Loan; WHEREAS, the Literary Fund Obligation was to have borne interest at four percent (4%) per annum and mature in annual installments for a period of twenty (20) years; WHEREAS, in connection with the 2001 Interest Rate Subsidy iProgram (the "Program"), the Virginia Public School Authority (the "VPSA") has offered to purchase general obligation school bonds of the City, and the Board of Education has offered to pay, to the City, a lump sum cash payment (the "Lump Sum Cash Payment") equal to the sum of (i) net present value difference, determined on the date on which the VPSA sells its bonds, between the weighted average interest rate that the general obligation school bonds of the City will bear upon sale to the VPSA and the interest rate that the Literary Fund Obligation would have borne plus (ii) an allowance for the costs of issuing such bonds of the City (the "Issuance Expense Allowance"); {RKE#0717759.DOC-1} B-1 WHEREAS, the City Council (the "Council") of the City has determined that it is necessary and expedient to borrow not to exceed $2,500,000 and to issue its general obligation school bonds for the purpose of financing certain capital projects for school purposes; and WHEREAS, the City held a public hearing, duly noticed, on September 17, 2001, on the issuance of the Bonds (as defined below) in accordance with the requirements of Section 15.2-2606, Code of Virginia 1950, as amended (the "Virginia Code"); and WHEREAS, the School Board of the City has, by resolution, requested the Board to authorize the issuance of the Bonds (as hereinafter defined); NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF SUPERVISORS OF THE CITY OF ROANOKE, VIRGINIA: 1. AuthoriTarian of Ronda and Ilae of Proeeoda. The Council hereby determines that it is advisable to contract a debt and issue and sell its general obligation school bonds in an aggregate principal amount not to exceed $2,500,000 (the "Bonds") for the purpose of financing certain capital projects for school purposes. The Council hereby authorizes the issuance and sale of the Bonds in the form and upon the terms established pursuant to this Resolution. 2. Sale of the Ronda. It is determined to be in the best interest of the City to accept the offer of the Virginia Public School Authority (the "VPSA") to purchase from the City, and to sell to the VPSA, the Bonds at a price, determined by the VPSA to be fair and accepted by the Mayor and the City, that is not less than 98% of par and not more than 103% of par upon the terms established pursuant to this Resolution except that in the event the purchase price determined by the VPSA exceeds the upper limit of 103%, the City, at the request of the VPSA, will lower the amount of the local school bonds to be issued to provide a purchase price for such bonds and a proceeds amount that is within 103% of the amount requested pursuant to the City's application submitted to the VPSA. The Mayor, the City Manager, and such officer or officers of the City as either may designate are hereby authorized and directed to enter into a Bond Sale Agreement dated as of October 9, 2001, with the VPSA providing for the sale of the Bonds to the VPSA in substantially the form submitted to the Council at this meeting, which form is hereby approved (the "Bond Sale Agreement"). 3. Detalia of the Ronda, The Bonds shall be issuable in fully registered form; shall be dated the date of issuance and delivery of the Bonds; shall be designated "General Obligation School Bonds, Series 200 l-B"; shall bear interest from the date of delivery thereof payable semi-annually on each January 15 and July 15 beginning July 15, 2002 (each an "Interest Payment Date"), at the rates established in accordance with Section 4 of this Resolution; and shall mature on July 15 in the years (each a "Principal Payment Date") and in the amounts set forth on Schedule I of Exhibit A attached hereto (the "Principal Installments"), subject to the provisions of Section 4 of this Resolution. 4. lnteeeat Rato~a and Prinei.nal lnatallmen£q. The City Manager is hereby authorized and directed to accept the interest rates on the Bonds established by the VPSA, provided that each interest rate shall be ten one-hundredths of one percent (0.10%) over the interest rate to be paid by the VPSA for the corresponding principal payment date of the bonds to be issued by the VPSA (the "VPSA Bonds"), a portion of the proceeds of which will be used to purchase the Bonds, and provided further, that the true {RKE%0717759. DOC-1 } B-2 interest cost of the Bonds does not exceed five and eighty five one-hundredths percent (5.85 %) per annum. The Interest Payment Dates and the Principal Installments are subject to change at the request of the VPSA. The City Manager is hereby authorized and directed to accept changes in the Interest Payment Dates and the Principal Installments at the request of the VPSA, provided that the aggregate principal amount of the Bonds shall not exceed the amount authorized by this Resolution. The execution and delivery of the Bonds as described in Section 8 hereof shall conclusively evidence such interest rates established by the VPSA and Interest Payment Dates and the Principal Installments requested by the VPSA as having been so accepted as authorized by this Resolution. 5. Form of the Ronda. The Bonds shall be initially in the form of a single, temporary typewritten bond substantially in the form attached hereto as Exhibit A. 6. Payment..' Paving Agent and Rand Regintrar~ The following provisions shall apply to the Bonds: (a) For as long as the VPSA is the registered owner of the Bonds, all payments of principal, premium, if any, and interest on the Bonds shall be made in immediately available funds to the VPSA at, or before 11:00 a.m. on the applicable Interest Payment Date or Principal Payment Date, or if such date is not a business day for Virginia banks or for the Commonwealth of Virginia, then at or before 11:00 a.m. on the business day next preceding such Interest Payment Date or Principal Payment Date. (b) All overdue payments of principal and, to the extent permitted by law, interest shall bear interest at the applicable interest rate or rates on the Bonds. (c) SunTrust Bank, Richmond, Virginia, is designated as Bond Registrar and Paying Agent for the Bonds. 7. No Redemntion or Prepayment. The Principal Installments of the Bonds shall not be subject to redemption or prepayment. Furthermore, the Council covenants, on behalf of the City, not to refund or refinance the Bonds without first obtaining the written consent of the VPSA or the registered owner of the Bonds. 8. Execution of the liondn. The Mayor or Vice Mayor and the City Clerk or any Deputy City Clerk are authorized and directed to execute and deliver the Bonds and to affix the seal of the City thereto. 9. Pledge of Full Faith and Credit For the prompt payment of the principal of and premium, if any, and the interest on the Bonds as the same shall become due, the full faith and credit of the City are hereby irrevocably pledged, and in each year while any of the Bonds shall be outstanding there shall be levied and collected in accordance with law an annual ad valc~rerll tax upon all taxable property in the City subject to local taxation sufficient in amount to provide for the payment of the principal of and premium, if any, and the interest on the Bonds as such principal, premium, if any, and interest shall become due, which tax shall be without limitation as to rate or amount and in addition to all other taxes authorized to be levied in the City to the extent other funds of the City are not lawfully available and appropriated for such purpose. 10. Ilne of Proeeedn Certificate and Certificate as to Arbitrage. The Mayor, the City Manager and such officer or officers of the City as either may designate are hereby authorized and directed to execute B-3 a Certificate as to Arbitrage and a Use of Proceeds Certificate each setting forth the expected use and investment of the proceeds of the Bonds and containing such covenants as may be necessary in order to show compliance with the provisions of the Intemal Revenue Code of 1986, as amended (the "Code"), and applicable regulations relating to the exclusion from gross income of interest on the Bonds and on the VPSA Bonds except as provided below. The Council covenants on behalf of the City that (i) the proceeds from the issuance and sale of the Bonds will be invested and expended as set forth in such Certificate as to Arbitrage and such Use of Proceeds Certificate and that the City shall comply with the other covenants and representations contained therein and (ii) the City shall comply with the provisions of the Code so that interest on the Bonds and on the VPSA Bonds will remain excludable from gross income for Federal income tax purposes. 11. State Non-Arhitr~ge Program..- Proceeds Agreement The Council hereby determines that it is in the best interests of the City to authorize and direct the City Treasurer to participate in the State Non-Arbitrage Program in connection with the Bonds. The Mayor, the City Manager and such officer or officers of the City as either may designate are hereby authorized and directed to execute and deliver a Proceeds Agreement with respect to the deposit and investment of proceeds of the Bonds by and among the City, the other participants in the sale of the VPSA Bonds, the VPSA, the investment manager and the depository, substantially in the form submitted to the Council at this meeting, which form is hereby approved. 12. Continuing rti.qelo.qure Agreemollt. The Mayor, the City Manager and such officer or officers of the City as either may designate are hereby authorized and directed to execute a Continuing Disclosure Agreement, as set forth in Appendix F to the Bond Sale Agreement, setting forth the reports and notices to be filed by the City and containing such covenants as may be necessary in order to show compliance with the provisions of the Securities and Exchange Commission Rule 15c2-12 and directed to make all filings required by Section 3 of the Bond Sale Agreement should the City be determined by the VPSA to be a MOP (as defined in the Continuing Disclosure Agreement). 13. Filing of Resolution. The appropriate officers or agents of the City are hereby authorized and directed to cause a certified copy of this Resolution to be filed with the Circuit Court of the City. 14. F..al:lhgg_Aglia~. The members of the Council and all officers, employees and agents of the City are hereby authorized to take such action as they or any one of them may consider necessary or desirable in connection with the issuance and sale of the Bonds and any such action previously taken is hereby ratified and confirmed. 15. F.~f~llh~Ila~. This Resolution shall take effect immediately. {RKE#0717759.DOC-1} B4 The undersigned Clerk of the City of Roanoke, Virginia, hereby certifies that the foregoing constitutes a true and correct extract from the minutes of a meeting of the City Council held on October 1, 2001, and of the whole thereof so far as applicable to the matters referred to in such extract. I hereby further certify (a) that such meeting was a regularly scheduled meeting and that, during the consideration of the foregoing resolution, a quorum was present, and (b) that the attendance of the members and voting on the foregoing resolution was as follows: Pre.~ent Ah.~ent Aye Nay Ab.~min Ralph K. Smith, Mayor William H. Carder, Vice Mayor William D. Bestpitch C. Nelson Harris W. Alvin Hudson, Jr. William White, Sr. Lynda F. Wyatt WITNESS MY HAND and the seal of the City of Roanoke, Virginia, this __ 2001. day of October, Clerk, City of Roanoke, Virginia [SEAL] {RKE%0717759.DOC-1} B-5 EXHIBIT A (FORM OF TEMPORARY BOND) NO. TS-1 UNITED STATES OF AMERICA COMMONWEALTH OF VIRGINIA CITY OF ROANOKE General Obligation School Bond Series 2001-B The CITY OF ROANOKE, VIRGINIA (the "City"), for value received, hereby acknowledges itself indebted and promises to pay to the VIRGINIA PUBLIC SCHOOL AUTHORITY the principal amount of DOLLARS ($ ), in annual installments in the amounts set forth on Schedule I attached hereto payable on July 15, 2002 and annually on July 15 thereafter to and including July 15, 2021 (each a "Principal Payment Date"), together with interest from the date of this Bond on the unpaid installments, payable semi-annually on January 15 and July 15 of each year, commencing on July 15, 2002 (each an "Interest Payment Date"; together with any Principal Payment Date, a "Payment Date"), at the rates per annum set forth on Schedule I attached hereto. Both principal of and interest on this Bond are payable in lawful money of the United States of America. For as long as the Virginia Public School Authority is the registered owner of this Bond, SunTrust Bank, Richmond, Virginia, as bond registrar (the "Bond Registrar"), shall make all payments of principal, premium, if any, and interest on this Bond, without the presentation or surrender hereof, to the Virginia Public School Authority, in immediately available funds at or before 11:00 a.m. on the applicable Payment Date or date fixed for prepayment or redemption. If a Payment Date or date fixed for prepayment or {RKE#0717759. DOC-1 } A-1 redemption is not a business day for banks in the Commonwealth of Virginia or for the Commonwealth of Virginia, then the payment of principal, premium, if any, or interest on this Bond shall be made in immediately available funds at or before 11:00 a.m. on the business day next preceding the scheduled Payment Date or date fixed for prepayment or redemption. Upon receipt by the registered owner of this Bond of said payments of principal, premium, if any, and interest, written acknowledgment of the receipt thereof shall be given promptly to the Bond Registrar, and the City shall be fully discharged of its obligation on this Bond to the extent of the payment so made. Upon final payment, this Bond shall be surrendered to the Bond Registrar for cancellation. The full faith and credit of the City are irrevocably pledged for the payment of the principal of and the premium, if any, and interest on this Bond. The resolution adopted by the City Council authorizing the issuance of the Bonds provides, and Section 15.2-2624, Code of Virginia 1950, as amended, requires, that there shall be levied and collected an annual tax upon all taxable property in the City subject to local taxation sufficient to provide for the payment of the principal, premium, if any, and interest on this Bond as the same shall become due which tax shall be without limitation as to rate or amount and shall be in addition to all other taxes authorized to be levied in the City to the extent other funds of the City are not lawfully available and appropriated for such purpose. This Bond is duly authorized and issued in compliance with and pursuant to the Constitution and laws of the Commonwealth of Virginia, including the Public Finance Act of 1991, Chapter 26, Title 15.2, Code of Virginia 1950, as amended, and resolutions duly adopted by the City Council and the School Board of the City to provide funds for capital projects for school purposes. This Bond may be exchanged without cost, on twenty (20) days written notice from the Virginia Public School Authority, at the office of the Bond Registrar on one or more occasions for two or more temporary bonds or definitive bonds in fully registered form in denominations of $5,000 and whole {RKE#0717759. DOC-1 } A-2 multiples thereof, and; in any case, having an equal aggregate principal amount having maturities and bearing interest at rates corresponding to the maturities of and the interest rates on the installments of principal of this Bond then unpaid. This Bond is registered in the name of the Virginia Public School Authority on the books of the City kept by the Bond Registrar, and the transfer of this Bond may be effected by the registered owner of this Bond only upon due execution of an assignment by such registered owner. Upon receipt of such assignment and the surrender of this Bond, the Bond Registrar shall exchange this Bond for definitive Bonds as hereinabove provided, such definitive Bonds to be registered on such registration books in the name of the assignee or assignees named in such assignment. The principal installments of this Bond are not subject to redemption or prepayment. All acts, conditions and things required by the Constitution and laws of the Commonwealth of Virginia to happen, exist or be performed precedent to and in the issuance of this Bond have happened, exist and have been performed in due time, form and manner as so required, and this Bond, together with all other indebtedness of the City, is within every debt and other limit prescribed by the Constitution and laws of the Commonwealth of Virginia. {RKE%0717759.DOC-1} A-3 IN WITNESS WHEREOF, the City Council of the City of Roanoke, Virginia has caused this Bond to be issued in the name of the City of Roanoke, Virginia, to be signed by its Mayor or Vice-Mayor, its seal to be affixed hereto and attested by the signature of its Clerk or any of its Deputy Clerks, and this Bond to be dated November _._, 2001. CITY OF ROANOKE, VIRGINIA (SEAL) Mayor, City of Roanoke, Virginia ATTEST: Clerk, City of Roanoke, Virginia {RKE#0717759.DOC-1} A-4 ASSIGNMENT FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE) PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE: the within Bond and irrevocably constitutes and appoints attorney to exchange said Bond for definitive bonds in lieu of which this Bond is issued and to register the transfer of such definitive bonds on the books kept for registration thereof, with full power of substitution in the premises. Date: Registered Owner Signature Guaranteed: (NOTICE: Signature(s) must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Bond Registrar which requirements will include Membership or participation in STAMP or such other "signature guarantee program" as may be determined by the Bond Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. (NOTICE: The signature above must correspond with the name of the Registered Owner as it appears on the front of this Bond in every particular, without alteration or change.) {RKE#0717759.DOC-1} A-5 APPENDIX C to the Bond Sale Agreement [FISHBURN PARK] USE OF PROCEEDS CERTIFICATE The $ General Obligation School Bonds, Series 2001-B (the "Bonds"), issued by the City of Roanoke, Virginia (the "Issuer") will be purchased by the Virginia Public School Authority ("VPSA") from the proceeds of the VPSA's $ School Financing Bonds (1997 Resolution), Series 2001 B (the "VPSA's Bonds"), pursuant to a Bond Sale Agreement dated as of October 9, 2001. The proceeds of the Bonds will be used to acquire, construct and equip public school facilities owned and/or operated by the school board for the Issuer (the "School Board"). The Issuer and the School Board each recognize that certain facts, estimates and representations set forth in the Certificate as to Arbitrage executed by VPSA in connection with the issuance of the VPSA's Bonds must be based on the representations and certifications of the Issuer and the School Board and that the exclusion from gross income for federal income tax purposes of the interest on the VPSA's Bonds depends on the use of proceeds of the VPSA's and the Issuer's Bonds. Accordingly, the Issuer and the School Board hereby covenant that: Section 1. De.qcription of Project. The proceeds of the Bonds, including investment income thereon ("proceeds"), will be used to finance the acquisition, construction, and equipping of public school facilities of the Issuer (the "Project"). Section 2. Governmental l [qe of Proeeed.q. The Issuer and the School Board covenant the following with respect to the use of proceeds of the Bonds and the facilities financed or refinanced therewith: (a) ~. (i) private [In.qine.q.q llse. No more than ten percent (10%) of the proceeds of the Bonds or the Project (based on the greatest off (A) the cost allocated on the basis of space occupied, (B) the fair market value, or (C) the actual cost of construction) has been or, so long as the Bonds are outstanding, will be, used in the aggregate for any activities that constitute a "Private Use" (as such term is defined below in subsection (d) of this Section 2). (ii) Private Secnri~ or Payment. No more than ten percent (10%) of the principal of or interest on the Bonds, under the terms thereof or any underlying arrangement, has been, or, so long as the Bonds are outstanding, will be, directly or indirectly, (A) secured by any interest in (I) property used for a Private Use or (II) payments in respect of such property or (B) derived from payments in respect of property used or to be used for a Private Use, whether or not such property is a part of the Project. {RKE#0718022.DOC-I} C-1 (b) No Di?roportionate or 1 lnrelated 1 l.qe. With respect to private business use disproportionate to or not related to governmental use financed or refinanced with the proceeds of the Bonds, no more than five percent (5%) of the principal of or interest on such Bonds, under the terms thereof or any underlying arrangement, has been, or, so long as the Bonds are outstanding, will be, directly or indirectly, (x) secured by any interest in (I) property used for a Private Use or (II) payments in respect of such property or (y) derived from payments in respect of property used or to be used for a Private Use, whether or not such property is a part of the Project. (c) No Private I,oan Financing, No proceeds of the Bonds will be used to make or finance loans to any person other than to a state or local governmental unit. (d) Definition of Private l lse. For purposes of this Certificate, the term "Private Use" means any activity that constitutes a trade or business that is carded on by persons or entities other than state or local governmental entities. Any activity carded on by a person other than a natural person is treated as a trade or business. The leasing of property financed or refinanced with the proceeds of the Bonds or the access of a person other than a state or local governmental unit to property or services on a basis other than as a member of the general public shall constitute Private Use unless the Issuer obtains an opinion of Bond Counsel to the contrary. Use of property financed or refinanced with proceeds of the Bonds by any person, other than a state or local governmental unit, in its trade or business constitutes general public use only if the property is intended to be available and is in fact reasonably available for use on the same basis by natural persons not engaged in a trade or business ("General Public Use"). In most cases Private Use will occur only if a nongovernmental person has a special legal entitlement to use the financed or refinanced property under an arrangement with the Issuer. Such a special legal entitlement would include ownership or actual or beneficial use of the Project pursuant to a lease, management or incentive payment contract, output contract, research agreement or similar arrangement. In the case of property that is not available for General Public Use, Private Use may be established solely on the basis of a special economic benefit to one or more nongovernmental persons. In determining whether special economic benefit gives rise to Private Use, it is necessary to consider all of the facts and circumstances, including one or more of the following factors: (i) whether the financed or refinanced property is functionally related or physically proximate to property used in the trade or business of a nongovernmental person; (ii) whether only a small number of nongovernmental persons receive the economic benefit; and (iii) whether the cost of the financed or refinanced property is treated as depreciable by the nongovemmental person. As of the date hereof, no portion of the Project is leased (or will be so leased) by the Issuer or the School Board (or a related party or agent) to a person or entity other than a state or local {RKE#0718022.DOC- 1 } C-2 governmental unit or to members of the general public for General Public Use. (e) Management and Service Contract.q. With respect to management and service contracts, the determination of whether a particular use constitutes Private Use under this Certificate shall be determined on the basis of applying Revenue Procedure 97-13, 1997-5 I.R.B. 18 ("Revenue Procedure 97-13"). As of the date hereof, no portion of the proceeds derived from the sale of the Bonds is being used to finance or refinance property subject to contracts or other arrangements with persons or entities engaged in a trade or business (other than governmental units) that involve the management of property or the provision of services with respect to property financed or refinanced with proceeds of the Bonds that do not comply with the standards of Revenue Procedure 97-13. For purposes of determining the nature of a Private Use, any arrangement that is properly characterized as a lease for federal income tax purposes is treated as a lease. Consequently, an arrangement that is referred to as a management or service contract may nevertheless be treated as a lease. In determining whether a management contract is properly characterized as a lease, it is necessary to consider all of the facts and circumstances, including the following factors: (i) the degree of control over the property that is exercised by a nongovernmental person; and (ii) whether a nongovernmental person bears risk of loss of the financed or refinanced property. Section 3. Time Teat and Due Diligence Teat. The Issuer and the School Board have incurred or will incur within 6 months of the date hereof substantial binding obligations, which are not subject to contingencies within the control of the Issuer or the School Board or a related party thereto, to third parties to expend at least 5% of the net sale proceeds of the Bonds on the Project. The Issuer and the School Board will proceed with due diligence to spend all of the proceeds of the Bonds within three years of the date hereof. Section 4. Di.qnn~qiticmq and Change in I (a) No Sale ar Di?o.qitinn. The Issuer and the School Board expect to own and operate and do not expect to sell or otherwise dispose of the Project, or any component thereof, prior to the final maturity date of the VPSA's Bonds (August 1, 2021). Co) Change in l l~e. The Issuer and the School Board represent, warrant and covenant that the facilities financed or refinanced with proceeds of the Bonds will be used for the governmental purpose of the Issuer and the School Board during the period of time the Bonds are outstanding, unless an opinion of Bond Counsel is received with respect to any proposed change in use of the Project. (c) /ax~Ym~mat. Each of the Issuer and the School Board represents, warrants and covenants that it will take no action that would cause either the Bonds or the VPSA's {RKE#0718022.DOC-1 } C-3 Bonds to be private activity bonds within the meaning of Section 141(a) of the Code and that it will not fail to take any action that would prevent the VPSA's Bonds and the Bonds from being private activity bonds, within the meaning of Section 141 (a) of the Code. Furthermore, the Issuer and the School Board have established reasonable procedures to ensure compliance with this covenant. Section 5. No Sinking nr Pledge Fund.q. Neither the Issuer nor the School Board has established and will not establish any funds or accounts that are reasonably expected to be used to pay debt service on the Bonds or that are pledged (including negative pledges) as collateral for the Bonds for which there is a reasonable assurance that amounts on deposit therein will be available to pay debt service on the Bonds if the Issuer or the School Board encounters financial difficulty. Section 6. No Replacement Proceed.q. (a) In General. No portion of the proceeds of the Bonds will be used as a substitute for other funds that prior to the Issuer's resolving to proceed with the issuance of the Bonds were used or are to be used to pay any cost of the Project. (b) Safe.,~laxlmr. In accordance with Section 1.148-1(c) of the Treasury Regulations regarding the safe harbor against the creation of "replacement proceeds", as of the date hereof, the weighted average maturity of the Bonds does not exceed 120% of the reasonably expected economic life of the Project financed thereby. Section 7. Nn Refimding. The proceeds of the Bonds will not be used to provide for the payment of any principal of or interest on any obligations of the Issuer, other than the Bonds, incurred in the exercise of its borrowing power, except for any temporary fmancing as described herein. Section 8. Cnmpo.qite Issue. There are no other obligations of the Issuer that have been, or will be (a) sold within 15 days of the Bonds, (b) sold pursuant to the same plan of financing together with the Bonds, and (c) paid out of substantially the same source of funds as the Bonds. Section 9. No Federal Guaranme. The Issuer and the School Board shall not take or permit any action that would cause (a) the payment of principal of or interest on the Bonds to be guaranteed, directly or indirectly, in whole or in part by the United States or any agency or instrumentality thereof or (b) 5 percent or more of the proceeds of the Bonds to be (i) used in making loans the payment of principal or interest on which are guaranteed in whole or in part by the United States or any agency or instrumentality thereof or (ii) invested directly or indirectly in federally insured deposits or accounts (except as permitted under Section 149(b) of the Intemal Revenue Code of 1986, as amended (the "Code"), or the regulations promulgated thereunder). The Issuer and the School Board have not, and will not enter into, any (i) long-term service contract with any federal governmental agency, (ii) service contract with any federal governmental agency under terms that are materially different from the terms of any contracts with any persons other than federal government agencies, and (iii) lease of property to any federal government agency, that would cause the Bonds to be considered "federally guaranteed" within the meaning of Section 149(b) of the Code. {RKE#0718022.IX)C- 1 } C-4 Section 10. No Hedge Bonds, The Issuer and the School Board reasonably expect that ail of the net sale proceeds of the Bonds will be used to pay the cost of the Project within three years of the date hereof. Furthermore, not more than 50 percent of the proceeds of the Bonds will be invested in Nonpurpose Investments (as such term is defined in Section 148(f)(6)(A) of the Code) having a substantiaily guaranteed yield for four years or more. Section 11. No Overis.quance. The total proceeds derived by the Issuer from the saie of the Bonds and anticipated investment earnings thereon do not exceed the total of the amounts necessary for the Project. Section 12. Reimbursable Expenses. A portion of the proceeds of the Bonds to be applied to the cost of the Project will be used to reimburse the Issuer for expenditures incurred thereby with respect to the Project in anticipation of the issuance of the Bonds. The Issuer represents the following with respect to the costs of the Project to be reimbursed from the proceeds of the Bonds. (a) DzffieiaLInle~ The total amount of reimbursed costs incurred by the Issuer with respect to the Project is not expected to exceed 2,500,000. Such expenditures were paid prior to the date hereof but no earlier than sixty (60) days prior to May 15, 2000, (month/day/year) which is the date the Issuer adopted its "officiai intent" declaration (the "Official Intent Declaration") in accordance with Section 1.150-2 of the Treasury Regulations. The Official Intent Declaration: (i) was, on the date of its adoption, intended to constitute a written documentation on behaif of the Issuer that states that the Issuer reasonably expected to reimburse itself for such expenditures with the proceeds of a taxable or tax-exempt borrowing, (ii) set forth a generai description of the Project, and (iii) stated the maximum principai amount of debt expected to be issued for the Project. The Issuer has taken no action subsequent to the expression of such intent that would contradict or otherwise be inconsistent with such intent. (b) Rea~qonable Official Intent_ As of the date of the Officiai Intent Declaration, the Issuer reasonably expected to reimburse such expenditures with the proceeds of a borrowing. The Issuer does not have a pattern of failing to reimburse expenditures for which an intention to reimburse such expenditures was declared and which were actually paid by the Issuer other than in circumstances that were unexpected and beyond the control of the Issuer. (c) Reimbursement Period Rennirement The proceeds derived from the saie of the Bonds to be applied to reimburse the above-described expenditures will be so applied no later than the { RKE#0718022.DOC- 1 } C-5 later of the date that is (i) eighteen (18) months after the date on which the expenditure being reimbursed was paid, and (ii) eighteen (18) months after the date on which the portion of the Project to which such expenditure relates was placed in service within the meaning of Section 1.150-2 of the Treasury Regulations or abandoned. The Issuer shall not, however, use Bond proceeds to reimburse the above-described expenditures later than three (3) years atter the date the original expenditure was paid. (d) Reimhnrsable F. xpendimre.q_ The expenditures to be reimbursed are either (i) capital expenditures (within the meaning of Section 1.150-1 (b) of the Treasury Regulations), (ii) costs of issuance, (iii) certain working capital expenditures for extraordinary, nonrecurring items that are not customarily payable from current revenues (within the meaning of Section 1.148-6 (d) (3) (ii) (B) of the Treasury Regulations), (iv) grants (within the meaning of Section 1.148-6 (d) (4) of the Treasury Regulations), or (v) qualified student loans, qualified mortgage loans or qualified veterans' mortgage loans (within the meaning of Section 1.150-1(b) of the Treasury Regulations). None of the expenditures to be reimbursed were incurred for day-to- day operating costs or similar working capital items. None of the proceeds of the Bonds being used to reimburse the Issuer for prior expenditures will be used, directly or indirectly, within one year of the date of a reimbursement allocation, in a manner that results in the creation of replacement proceeds (within the meaning of Section 1.148-1 of the Treasury Regulations), other than amounts deposited in a bona fide debt service fund. (e) Anti-Ahn.qe rule.q_ None of the proceeds of the Bonds are being used in a manner that employs an abusive arbitrage device under Section 1.148-10 of the Treasury Regulations to avoid the arbitrage restrictions or to avoid the restrictions under Sections 142 through 147 of the Code. Section 13. Covenant a.q to Arbitrage. The Issuer and the School Board hereby covenant that whether or not any of the Bonds remain outstanding, the money on deposit in any fund or account maintained in connection with the Bonds, whether or not such money was derived from the proceeds of the sale of the Bonds or from any other sources, will not be used in a manner that would cause the Bonds or the VPSA's Bonds to be arbitrage bonds within the meaning of Section 148 of the Code and the applicable regulations thereunder. Date: November__, 2001 CITY OF ROANOKE, VIRGINIA By: Darlene Burcham City Manager { RKE#0718022.DOC- 1 } C-6 School Board of the City of Roanoke, Virginia Sherman P. Lea Chairman { RKE#0718022.DOC- 1 } C-7 APPENDIX D to the Bond Sale Agreement CONSTRUCTION EXCEPTION AND EIGHTEEN MONTH EXCEPTION TO THE REBATE REQUIREMENT QUESTIONNAIRE The purpose of this questionnaire is to elicit facts concerning the expenditure of the proceeds of the City of Roanoke, Virginia (the "Issuer") general obligation school bonds (the "Bonds") in order to make an initial determination that the construction exception from the rebate requirement provided by Section 148(f)(4)(C) of the Internal Revenue Code of 1986, as amended, or the eighteen month exception from the rebate requirement provided by Section 1.148-7(d) of the Treasury Regulations is available. Please supply the information requested below and send this questionnaire to Richard A. Davis, Public Finance Manager, Virginia Public School Authority, P. O. Box 1879, Richmond, Virginia 23218-1879, for receipt no later October 9, 2001, with a copy to your bond counsel. Briefly describe the project (the "Project") to be financed with the proceeds of the Bonds including the useful life of the project(s) being financed. 2. (a) Indicate the total amount of proceeds to be derived from the sale of the Bonds. (b) Indicate the amount that you reasonably expect to receive from the investment of the Bond proceeds prior to spending all of the Bond proceeds set forth above in Question 2 (a). (c) Indicate the amount of proceeds derived from the sale .of the Bonds that you expect to use to finance the issuance costs of the Bonds. (e.g. your legal fees) (d) The amount set forth in Questions 2(a) plus the amount set forth in Question 2(b) {RKE#0716216.DOC-1} o reduced by the amount set forth in Question 2(c) equals $ This amount is hereinafter referred to as "Available Construction Proceeds". Any bond premium derived from sale of the bonds and any investment earnings thereon will be treated as Available Construction Proceeds. Indicate the amount of money, other than the Available Construction Proceeds of the Bonds, that will be applied toward the cost of the Project and the expected source of such money. Indicate what such money will be used for. Indicate, by principal components, your current estimates of the cost for the acquisition and construction of the Project that will be financed with the Available Construction Proceeds of the Bonds, including: (a) Acquisition of Interest in Land (b) Acquisition of Interest in Real Propertf (c) Acquisition and/or Installation of Tangible Personal Property2 (d) Site Preparation (e) Construction of Real pr°Pertyj (f) Reconstruction of Real Property_4 (g) Rehabilitation of Real Property (h) Construction of Tangible Personal Property6 (i) Specially devTeloped computer software (j) Interest on the Bonds during Construction (k) Other (please specify) (1) Total $ (Note: The sum of the amounts described in (a) through (k) must equal the amount of Available Construction Proceeds of the Bonds set forth in Question 2(d).) 1-7 See the Endnotes on pages D-7 and D-8. { RKIg#0716216. DOC-1 } D-2 (a) (b) (c) (a) (e) 6. (a) Have you borrowed, directly or indirectly, (such as through an industrial deVelopment authority) any money, either through a tax-exempt bank loan, a bond anticipation note, any tax-exempt or taxable obligation or otherwise (a "loan"), to pay for the Project costs? Yes No Do you intend to use the proceeds of the Bonds to refinance or repay any loan used to finance the Project costs? Yes No If the answer to Question 5(b) is "Yes", please attach a copy of the BAN, COP, or other evidence of the loan and any tax certificate executed with such loan and indicate the following: (i) Amount of loan: (ii) Date of loan: (iii) Maturity date of loan: (iv) Interest rate of loan: (v) Name of lender: If the answer to question 5(a) or (b) is "Yes", did you use the proceeds of the loan to reimburse yourself for expenses paid with respect to the Project before the loan was obtained? Yes No If the answer to question 5(b) is "Yes", do you expect to qualify for the small issuer exception for the loan. Do you intend to reimburse yourself from the proceeds of the Bonds for Project costs advanced from your General Fund or other available sources? Yes No {RKE#0716216.DOC-1} D-3 o (b) If the answer to Question 5(d) or Question 6 (a) is "Yes", with respect to all such expenditures, please indicate the amount of such expenditure, when such expenditure was paid and the purpose of the expenditure (i.e., architectural fees, engineering fees, other construction costs): (i) Amount expended $ (ii) Date of expenditure: (iii) Purpose of expenditure: (Note: if you intend to reimburse yourself for more than one expenditure, please attach a rider setting forth: (i) amount expended, (ii) date of expenditure, and (iii) purpose of expenditure) If the answer to Question 5(d) or 6(a) is "Yes" please attach a copy of any other evidence of your intention to reimburse yourself with the proceeds of a borrowing such as the earliest possible resolution, declaration or minutes of a meeting. Include the date such resolution was adopted, meeting was held or declaration made. [The purpose of questions 8, 9 and 10 is to determine if the Bonds may qualify for the Construction Exception from the Rebate Requirement.] Indicate whether the total of the amounts shown in 4(d) through (i) on page D-2 is at least 75% of the amount of Available Construction Proceeds (i.e., 75% of the amount in 4(i). Yes No If the answer to Question 8 is "Yes", answer Question 9 and skip Question 10. If the answer to Question 8 is "No", skip Question 9 and answer Question 10. (a) Assuming the Bonds are delivered on November 15, 2001 and funds are made available to you on that date, please complete the following schedule indicating the amount of Available Construction Proceeds that the Issuer expects to expend and disburse during the following time periods: From November 15, 2001 to May 15, 2002 $ 8 From May !6, 2002 to November 15, 2002 From November 16, 2002 to May 15, 2003 From May 16, 2003 to November 15, 2003 Total9 $ 8 and 9 See the Endnotes on page D-8. {RKE#0716216.DOC-1} D-4 10. (b) If you do not expect to spend 100% of Available Construction Proceeds by November 15, 2003, do you expect to spend 100% of Available Construction Proceeds by November 15, 2004? Yes No For purposes of this Question 10, assume that the Bonds are delivered on November 15, 2001 and funds are made available to you on that date. (a) Does the Issuer expect to expend and disburse the amount shown in Question 4(a) for the acquisition of land by May 15, 2002? Yes No (b) Does the Issuer expect to expend and disburse the amount shown in Question 4(b) for the acquisition of interests in real property by May 15, 2002? Yes No (c) Does the Issuer expect to expend and disburse the amo'unt shown in Question 4(c) for the acquisition and/or installation of tangible personal Property by May 15, 2002? (d) Yes No (i) Does the Issuer expect to expend and disburse the amount shown in question 4(1) by November 15, 2004? Yes No (ii) Assuming that the Bonds are delivered on November 15, 2001, and funds are made available to you on that date, please complete the following schedule indicating the amount of Available Construction Proceeds that the Issuer expects to expend and disburse during the following time periods: From November 15, 2001 to May 15, 2002 From May 16, 2002 to November 15, 2002 From November 16, 2002 to May 15, 2003 From May 16, 2003 to November 15, 2003 10 Total $ 10 See the Endnotes on page D-8. {RKE#0716216.DOC-1} D-5 [The purpose of question 11 is to determine if the Bonds may qualify for the Eighteen Month Exception from the Rebate Requirement.] 11. The sum of the amounts set forth in Questions 2(a) and 2(b) equals $ (the "gross proceeds"). Assuming that the Bonds are delivered on November 15,2001 and funds are made available to you on that date, please complete the following schedule indicating the amount of gross proceeds that the Issuer expects to expend and disburse during the following time periods: From November 15, 2001 to May 15, 2002 From May 16, 2002 to November 15, 2002 From November 16, 2002 to May 15, 2003 Total $ 12. (a) Will this issue qualify for the Small Issuer Exception? Yes No (b) List any general obligation bond financings the Issuer has undertaken or is planning to undertake in the calendar year 2001. I understand that the foregoing information will be relied upon by the Virginia Public School Authority (the "Authority") in determining the applicability of the construction exception to the Authority's School Financing Bonds (1997 Resolution), Series 2001 B. I hereby certify that I am familiar with the Project or have made due inquiry in order to complete this Questionnaire with respect to the Project and am authorized by the Issuer to provide the foregoing information with respect to it, which information is tree, correct, and complete, to the best of my knowledge. ~ Include amounts expended prior to November 15, 2001 and approved by your bond counsel for reimbursement from your bond proceeds. This does not include any amount used to refinance or repay any loan. {RKE~0716216.DOC-1 } D-6 Name of Person Completing Questionnaire Title Signature Date {RKE#0716216.DOC-1} D-7 ENDNOTES For purposes of this questionnaire, "real property" means improvements to land, such as buildings or other inherently permanent structures, including items that are structural components of such buildings or structures. For example, real property includes wiring in a building, plumbing systems, central heating or central air conditioning systems, pipes or ducts, elevators or escalators installed in a building, paved parking areas, road, wharves and docks, bridges and sewage lines. For purposes of this questionnaire, tangible personal property means any tangible property except real property. For example, tangible personal property includes machinery that is not a structural component of a building, fire tracks, automobiles, office equipment, testing equipment and furnishings. See description of real property in endnote 1. This includes all capital expenditures that are properly chargeable to or may be capitalized as part of the basis of the real property prior to the date the property is placed in service. For purposes of this questionnaire, expenditures are considered paid in connection with the construction, reconstruction or rehabilitation of real property if the contract between the Issuer and the seller requires the seller to build or install the property (such as under a "turnkey contract") but only to the extent the property has not been built or installed at the time the parties enter into the contract. If the property has been partially built or installed at the time the parties enter into the contract, the expenditures that are allocable to the portion of the property built or installed before that time are expenditures for the acquisition of real property. See endnote 3. See endnote 3. For purposes of this questionnaire, expenditures are in connection with the construction of tangible personal property, as defined in endnote 2, iff (a) A substantial portion of the property or properties is completed more than 6 months after the earlier of the date construction or rehabilitation commenced and the date the Issuer entered into an acquisition contract; (b) Based on the reasonable expectations of the Issuer, if any, or representations of the person constructing the property, with the exercise of due diligence, completion of construction or rehabilitation (and delivery to the Issuer) could not have occurred within that 6-month period; and (c) If the Issuer itself builds or rehabilitates the property, not more than 75% of the capitalizable cost is attributable to property acquired by the Issuer (e.g., components, raw materials and other supplies). {RKE~0716216.DOC-1} Specially developed computer software means any programs or routines used to cause a computer to perform a desired task or set of tasks, and the documentation required to describe and maintain those programs, provided that the software is specially developed and is functionally related and subordinate to real property or other constructed personal property. Include amounts expended prior to November 15, 2001 and approved by your bond counsel for reimbursement from your bond proceeds. This does not include any amount used to refinance or repay any loan. Total should equal the amount in 4(1). Include amounts expended prior to November 15, 2001 and approved by your bond counsel for reimbursement from your bond proceeds. This does not include any amount used to refinance or repay any loan. { RKE%0716216. DOC-l} D-9 APPENDIX E to the Bond Sale Agreement CONTINUING DISCLOSURE AGREEMENT [This Continuing Disclosure Agreement will impose obligations on the Local Issuer if and only if the Local Issuer is or has become and remains a "Material Obligated Person", as defined below] This Continuing Disclosure Agreement (the "Disclosure Agreement") is executed and delivered by the undersigned local issuer (the "Local Issuer") in connection with the issuance by the Virginia Public School Authority (the "Authority") of $ aggregate principal amount of its School Financing Bonds (1997 Resolution) Series 2001 B (the "Series 2001 B Bonds") pursuant to the provisions of a bond resolution (the "1997 Resolution") adopted on October 23, 1997, as amended and restated. The Series 2001 B Bonds and all other parity bonds heretofore and hereafter issued under the 1997 Resolution are collectively called the "Bonds". A portion of the proceeds of the 2001 Series B Bonds are being used by the Authority to purchase certain general obligation school bonds ("Local School Bonds") of the Local Issuer pursuant to a bond sale agreement between the Authority and the Local Issuer (the "Bond Sale Agreement"). Pursuant to paragraph 3 of the Bond Sale Agreement, the Local Issuer hereby covenants and. agrees as follows: SECTION 1. Purpn.qe nf the Di.qeln.qnre Agreement. This Disclosure Agreement is being executed and delivered by the Local Issuer for the benefit of the holders of the Series 2001 B Bonds and in order to assist the Participating Underwriters (defined below) in complying with the Rule (defined below). The Local Issuer acknowledges that it is undertaking primary responsibility for any reports, notices or disclosures that may be required under this Agreement. SECTION 2. Definitions_ In addition to the defmitions set forth in the 1997 Resolution, which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Report provided by the Local Issuer pursuant to,. and as described in, Sections 3 and 4 of this Disclosure Agreement. "bond sale agreement" shall mean the Bond Sale Agreement and any other comparable written commitment of the Local Issuer to sell local school bonds to the Authority. "Dissemination Agent" shall mean the Local Issuer, acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing by such Local Issuer and which has filed with such Local Issuer a written acceptance of such designation. "Filing Date" shall have the meaning given to such term in Section 3(a) hereof. "Fiscal Year" shall mean the twelve-month period at the end of which financial position {RKE#0717575.DOC-1 } E-1 and results of operations are determined. Currently, the Local Issuer's Fiscal Year begins July 1 and continues through June 30 of the next calendar year. "holder', shall mean, for purposes of this Disclosure Agreement, any person who is a record owner or beneficial owner of a Series 2001 B Bond. "Listed Events" shall mean any of the events listed in subsection 5(b)(5)(i)(C) of the Rule. "local school bonds" shall mean any of the Local School Bonds and any other bonds of the Local Issuer pledged as security for Bonds issued under the Authority' s 1997 Resolution. "Material Obligated Person" (or "MOP") shall mean the Local Issuer if it has local school bonds outstanding in an aggregate principal amount that exceeds 10% of the aggregate principal amount of all outstanding Bonds of the Authority. "National Repository" shall mean any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule. "Participating Underwriter" shall mean any of the original underwriters of the Authority's Series 2001 B Bonds required to comply with the Rule in connection with the offering of such Bonds. "Repository" shall mean each National Repository and each State Repository. "Rule" shall mean Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time, "State Repository" shall mean any public or private depository or entity designated by the State as a state depository for the purpose of the Rule. As of the date of this Agreement, there is no State Repository. SECTION 3. Provi.qion of Annual Report~. (a) The Local Issuer shall, or shall cause the Dissemination Agent to, provide to each Repository an Annual Report which is consistent with the requirements of Section 4 of' this Disclosure Agreement. Such Annual Report shall be filed on a date (the "Filing Date") that is not later than 12 months after the end of any Fiscal Year (commencing with its Fiscal Year ended June 30, 2001) as of the end of which such Local Issuer was a MOP, unless as of the Filing Date the Local Issuer is no longer a MOP.~ Not later than ten (10) days prior to the Filing Date, the Local Issuer shall provide the Annual Report to the Dissemination Agent (if applicable) and shall provide copies to the Authority. In each case, the Annual Report (i) may be submitted ~ The Authority will covenant in the Bond Sale Agreement to advise the Local Issuer within 60 days of the end of each Fiscal Year if such Local Issuer was a Material Obligated Person as of the end of such Fiscal Year. Upon written request, the Authority will also advise the Local Issuer as to its status as a MOP as of any other date. {RKE#0717575.DOC-1 } E-2 as a single document or as separate documents comprising a package, (ii) may cross-reference other information as provided in Section 4 of this Disclosure Agreement and (iii) shall include the Local Issuer's audited financial statements prepared in accordance with applicable State law or, if audited financial statements are not available, such unaudited financial statements as may be required by the Rule. In any event, audited financial statements of such Local Issuer must be submitted, if and when available, together with or separately from the Annual Report. (b) If the Local Issuer is unable to provide an Annual Report to the Repositories by the date required in subsection (a), the Local Issuer shall send a notice to the Municipal Securities Rulemaking Board and any State Repository in substantially the form attached hereto as Exhibit A. SECTION 4. Content of Annual Reports. Except as otherwise agreed, any Annual Report required to be filed hereunder shall contain or incorporate by reference, at a minimum, annual financial information relating to the Local Issuer, including operating data, (i) updating such information relating to the Local Issuer as shall have been included or cross-referenced in the final Official Statement of the Authority describing the Authority' s Series 2001 B Bonds or (ii) if there is no such information described in clause (i), updating such information relating to the Local Issuer as shall have been included or cross-referenced in any comparable disclosure document of the Local Issuer relating to its tax-supported obligations or (iii) if there is no such information described in clause (i) or (ii) above, initially setting forth and then updating the information referred to in Exhibit B as it relates to the Local Issuer, all with a view toward-assisting Participating Underwriters in complying with the Rule. Any or all of such information may be incorporated by reference from other documents, including official statements of securities issues with respect to which the Local Issuer is an "obligated person" (within the meaning of the Rule), which have been filed with each of the Repositories or the Securities and Exchange Commission. If the document incorporated by reference is a f'mal official statement, it must be available from the Municipal Securities Rulemaking Board. The Local Issuer shall clearly identify each such other document so incorporated by reference. SECTION 5. Reporting of lJ.qted Events. Whenever the Local Issuer is a Material Obligated Person required to file Annual Reports pursuant to Section 3(a) hereof and obtains knowledge of the occurrence of a Listed Event, and if such Local Issuer has determined that knowledge of the occurrence of a Listed Event with respect to its local school bonds would be material, such Local Issuer shall promptly file a notice of such occurrence with each National Repository or the Municipal Securities Rulemaking Board and each State Repository, if any, with a copy to the Authority. {RKE#0717575.DOC-1 } E-3 SECTION 6. Termination of Reporting Ohligation. The Local Issuer's obligations under this Disclosure Agreement shall terminate upon the earlier to occur of the legal defeasance or final retirement of all the Local School Bonds. SECTION 7. Dissemination Agent. The Local Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement and may discharge any such Agent, with or without appointing a successor Dissemination Agent. The Local Issuer shall advise the Authority of any such appointment or discharge. If at any time there is not any other designated Dissemination Agent, the Local Issuer shall be the Dissemination Agent. SECTION 8. Amendment. Notwithstanding any other provision of this Disclosure Agreement, the Local Issuer may amend this Disclosure Agreement, if such amendment has been approved in writing by the Authority and is supported by an opinion of independent counsel, acceptable to the Authority, with expertise in federal securities laws, to the effect that such amendment is permitted or required by the Rule. SECTION 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Local Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the Local Issuer chooses to include any information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is specifically required by this Disclosure Agreement, such Local Issuer shall have no obligation under this Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. SECTION 10. Default. Any person referred to in Section 11 (other than the Local Issuer) may take such action as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Local Issuer to file its Annual Report or to give notice of a Listed Event. The Authority may, and the holders of not less than a majority in aggregate principal amount of Bonds outstanding may, take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to challenge the adequacy of any information provided pursuant to this Disclosure Agreement, or to enforce any other obligation of the Local Issuer hereunder. A default under this Disclosure Agreement shall not be deemed an event of default under the applicable resolution or bonds of the Local Issuer, and the sole remedy under this Disclosure Agreement in the event of any failure of the Local Issuer to comply herewith shall be an action to compel performance. Nothing in this provision shall be deemed to restrict the rights or remedies of any holder pursuant to the SeCurities Exchange Act of 1934, the rules and regulations promulgated thereunder, or other applicable laws. SECTION 11. lqeneficiarien. This Disclosure Agreement shall inure solely to the benefit of the Authority, the Local Issuer, the Participating Underwriters, and holders from time to time of the Authority' s Bonds, and shall create no rights in any other person or entity. {RKE#0717575.DOC-1} E-4 SECTION 12. Cnnnterpartq, This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Date: November __, 2001 CITY OF ROANOKE, VIRGINIA By. Darlene Burcham, City Manager {RKE#0717575.DOC- 1 } E-5 NOTICE OF FAILURE TO FILE ANNUAL REPORT [AUDITED FINANCIAL STATEMENTS] EXHIBIT A Re: VIRGINIA PUBLIC SCHOOL AUTHORITY SCHOOL FINANCING BONDS (1997 Resolution) SERIES 2001 B CUSIP Numbers. Dated: November 1, 2001 Name of Local Issuer: City of Roanoke, Virginia NOTICE IS HEREBY GIVEN that the [Local Issuer] has not provided an Annual Report as required by Section 3(a) of the Continuing Disclosure Agreement, which was entered into in connection with the above-named bonds issued pursuant to that certain Series Resolution adopted on September 28, 2001 by the Board of Commissioners of the Virginia Public School Authority, the proceeds of which were used to purchase $ [School Bonds] of the [Local Issuer]. [The Local Issuer anticipates that the Annual Report will be filed by .] The Local Issuer is a material "obligated person" within the meaning of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended, with respect to the above-named bonds of the Authority. Dated: CITY OF ROANOKE, VIRGINIA By {RKE#0717575.DOC-1} E-6 EXHIBIT B CONTENT OF ANNUAL REPORT Description of the Local Issuer. A description of the Local Issuer including a summary of its form of government, budgetary processes and its management and officers. Debt. A description of the terms of the Local Issuer's outstanding tax-supported and other debt including a historical summary of outstanding tax-supported debt; a summary of authorized but unissued tax-supported debt; a summary of legal debt margin; a summary of overlapping debt; and a summary of annual debt service on outstanding tax-supported debt as of the end of the preceding fiscal year. The Annual Report 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 Issuer and any unfunded pension liabilities. Financial Data. Financial information respecting the Local Issuer including a description of revenues and expenditures for its major funds and a summary of its tax policy, structure and collections as of the end of the preceding fiscal year. Capital Improvement Plan. A summary of the Local Issuer' s capital improvement plan. Demographic, Economic and Supplemental Information. A summary of the Local Issuer's demographic and economic characteristics such as population, income, employment, and public school enrollment and infrastructure data as of the end of the preceding fiscal year. The Annual Report should also inclUde a description of material litigation pending against the Local Issuer. {RKE#0717575.DOC-1 } E-7 [FORM] PROCEEDS AGREEMENT Respecting the Custody, Investment, and Disbursement of Proceeds of Local School Bonds Purchased by the Virginia Public School Authority with the Proceeds of Its $[ ] School Financing Bonds (1997 Resolution) Series 2001 B Dated November 8, 2001 Among Virginia Public School Authority Wachovia Bank, N.A. Evergreen Investment Management Company LLC and Albemarle County Amherst County Appomattox County City of Chesapeake Culpeper County City of Danville Essex County Fauquier County Frederick County City of Harrisonburg City of Hopewell Matthews County Montgomery County City of Portsmouth City of Roanoke Roanoke County Spotsylvania County Stafford County Washington County City of Waynesboro NYLIB1/857121/1 Table of Contents Pa~e Section 1. Recitals .......................................................................................................................... 1 Section 2. Definitions ..................................................................................................................... 3 Section 3. Disposition of VPSA Bond Proceeds ........................................................................... 9 Section 4. Establishment of Accounts ......................................................................................... 10 Section 5. Disposition of Local School Bond Proceeds .............................................................. 11 Section 6. Investment of Principal Subaccount ........................................................................... 14 Section 7. Disbursements from Principal Subaccount ................................................................. 14 Section 8. Investment of Income Subaccount .............................................................................. 15 Section 9. Income Subaccount ..................................................................................................... 15 Section 10.Investment Losses ....................................................................................................... 17 Section 11.Rebate Computations .................................................................................................. 18 Section 12.Transfers to Income Subaccount ................................................................................. 19 Section 13.Disposition of Excess Proceeds .................................................................................. 20 Section 14.Rebate Payments and Penalty Payments ..................................................................... 21 Section 15.Duties of VPSA ........................................................................................................... 22 Section 16.Duties of the Depository ............................................................................................. 23 Section 17.Duties of Local Units .................................................................................................. 23 Section 18.Responsibilities of the Investment Manager ............................................................... 24 Section 19.Costs ............................................................................................................................ 25 Section 20.Opinions of Counsel ........................... : ....................................................................... 25 Section 21 .Amendment ................................................................................................................. 25 Section 22.Notices ........................................................................................................................ 26 Section 23.No Third Party Beneficiaries ...................................................................................... 27 NYLIB 1/857121/1 i Section 24.Severability ................................................................................................................. 27 Section 25.No Personal Liability .................................................................................................. 28 Section 26.Applicable Law ........................................................................................................... 28 Section 27.Counterparts ................................................................................................................ 28 Section 28.Effective Date; Term ................................................................................................... 29 Section 1. Recitals .......................................................................................................................... 1 A. On or before October 2, 2001, VPSA and each of the Local Units entered into a Bond Sale Agreement, pursuant to which VPSA agreed to purchase, and the Local Unit agreed to sell its Local School Bonds ............................................................................................. 1 B. On October 17, 2001, VPSA's Bonds were awarded at competitive bidding to the Purchaser. The Purchaser is obligated by the terms of its bid to pay the purchase price for VPSA's Bonds on the Closing Date. VPSA will apply certain of the proceeds of the sale of VPSA's Bonds, together with other available money, to the purchase of the Local School Bonds on November 8, 2001, the Local School Bonds Closing Date. VPSA will also apply certain of the proceeds of the sale of VPSA's Bonds, together with other available funds, to pay accrued interest and costs of issuance of the VPSA Bonds ....................... 1 C. The Code imposes requirements on VPSA and the Local Units selling their Local School Bonds to VPSA that must be met if interest on VPSA's Bonds and interest on the Local School Bonds are to be excludable fi-om gross income for federal income tax purposes, including a requirement that in certain circumstances, certain investment income with respect to the Local School Bonds, which income is deemed for federal income tax purposes to be investment income of VPSA's Bonds, be subject to payment, or in lieu thereof certain payments be made, to the United States Treasury .................................. 2 D. VPSA has determined that in order to fulfill its representations respecting the maintenance of the exclusion of the interest on VPSA's Bonds fi-om gross income for federal income tax purposes, VPSA must establish a mechanism to provide accountability for the custody, investment and disbursement of the proceeds of VPSA's Bonds and the proceeds of the Local School Bonds ............................................................................................... 2 E. It is the purpose of this Agreement to enable VPSA (i) to fulfill the representations mentioned in the preceding subsection; (ii) subject to the constraints of the Code affecting the investment of the proceeds of tax-exempt obligations, to achieve the optimum, practicable income by the professional management of the investment and reinvestment of the proceeds of the Local School Bonds; (iii) to provide for the custody, investment and disbursement of the proceeds of the Loca! School Bonds, and for the maintenance of appropriate records thereof; (iv) to meet the rebate requirement imposed by Section 148(f) of the Code, in part through the payment of either the Local Unit Rebate Requirement by each of the Local Units or the Penalty if the Penalty Election has been made on behalf of a Local Unit; and (v) to provide for the allocation and payment of the costs associated with the establishment and maintenance of this Agreement .......................... 2 NYLIBI/S57121/1 ii F. The purposes set forth in the preceding subsection E shall be accomplished through SNAP. The proceeds of the Local School Bonds shall be invested in accordance with the Information Statement ...................................................................................................... 3 Section 2. Definitions ..................................................................................................................... 3 Section 3. Disposition of VPSA Bond Proceeds ........................................................................... 9 A. Prior to the Closing Date, each Local Unit will complete and submit, to the Investment Manager, the program registration form and the SNAP account registration form annexed to the Information Statement ................................................................................... 9 B. On the Closing Date, VPSA will transfer to the Depository for deposit in SNAP, in immediately available funds, an amount equal to the aggregate purchase price of all of the Local School Bonds ($[ ]) ............................................................................ 9 C. Each Local Unit hereby agrees to adhere strictly to the prescribed and recommended procedures described in the Information Statement. Each Local Unit hereby further agrees that it will not deviate from or request an exception to such procedures without first obtaining the prior written approval of VPSA. In the event of a conflict between the provisions of this Agreement and the Information Statement, the provisions of this Agreement shall control ..................................................................................... 9 Section 4. Establishment of Accounts ......................................................................................... 10 Section 5. Disposition of Local School Bond Proceeds .............................................................. 10 A. The Investment Manager shall allocate the proceeds of the Local School Bonds on the Local School Bonds Closing Date(s) to the Local Unit(s), dollar for dollar, in accordance with the respective purchase prices of their Local School Bonds set forth in Exhibit A to this Agreement. There is no accrued interest on the Local School Bonds. Except as provided in Section 5(B) - ([ ]) below, the proceeds of VPSA's Bonds allocated to each Local Unit shall be credited to the Principal Subaccount of the Local Unit in the amounts set forth in Exhibit A with respect to the Subsidy Local School Bonds and/or the Non-Subsidy Local School Bonds, as the case may be .................................... 10 B. [ ] .................................................................................... 11 Section 6. Investment of Principal Subaccount ........................................................................... 11 Section 7. Disbursements from Principal Subaccount ................................................................. 11 Section 8. Investment of Income Subaccount .............................................................................. 12 Section 9. Income Subaccount ..................................................................................................... 12 A. The Investment Manager will notify a Local Unit and VPSA when the balance to the credit of the Principal Subaccount of such Local Unit shall have been reduced to zero ($0). Such Local Unit may then withdraw from its Income Subaccount an amount not in excess of the amount then to the credit of its Income Subaccount if the Local Unit NYLIB1/857121/I 111 qualifies for any one of the Rebate Exceptions or if such withdrawal is necessary to qualify for one of the Spending Exceptions .................................................................................. 12 1. In order to qualify for the Small-Issuer Exception, the Local Unit must deliver to VPSA and the Investment Manager no later than the end of calendar year 2001 (a) a letter from, or opinion of, nationally recognized bond counsel that the Local School Bonds of such Local Unit purchased by VPSA with the proceeds of the VPSA's Bonds will be treated as meeting the requirements of Code Sections 148(0(2) and (3), pursuant to Code Section 148(f)(4)(D); and (b) the Local Unit's covenant that it shall provide for the payment or reimburse VPSA for its payment of the Local Unit's Rebate Requirement in the event that the Local School Bonds of such Local Unit fail to meet all of the requirements of the Small Issuer Exception ................................................................................................................ 12 2. In order to determine if a Local Unit qualifies for either the Six-Month Exception or the Eighteen-Month Exception, the Investment Manager shall advise each Local Unit and VPSA of the amount that has been disbursed from the Principal Subaccount and the Income Subaccount of such Local Unit (a) six (6) months from the Local School Bonds Closing Date, (b) twelve (12) months from the Local School Bonds Closing Date, and (c) eighteen (18) months from the Local School Bonds Closing Date. To facilitate such determination, each Local Unit shall set forth on the signature page for such Local Unit the amount of investment proceeds that such Local Unit reasonably expects as of the Local School Bonds Closing Date to earn .................................................................................. 13 3. In order to determine if a Local Unit qualifies for the Two-Year Exception, the Investment Manager shall advise each Local Unit and VPSA, of the amount of Available Construction Proceeds that has been disbursed from the Principal Subaccount and the Income Subaccount of such Local Unit (a) six (6) months from the Local School Bonds Closing Date, (b) twelve (12) months from the Local School Bonds Closing Date, (c) eighteen (18) months from the Local School Bonds Closing Date, and (d) twenty-four (24) months from the Local School Bonds Closing Date. To facilitate such determination, each Local Unit shall set forth on the signature page for such Local Unit the amount of investment proceeds that such Local Unit reasonably expects as of the Local School Bonds Closing Date to earn and the elections that it requests VPSA to make on its behalf. Furthermore, such Local Unit shall set forth in a certificate delivered to VPSA on the Local School Bonds Closing Date such facts and circumstances as necessary to show that it reasonably expects to qualify for the Two-Year Exception ...................... 13 4. The portion of the proceeds of the VPSA Bonds applied to purchase the [ ] Bonds do not qualify for the Eighteen-Month Exception or Two-Year Exception ......................................................................................................... 14 B. Except to the extent that a Penalty Election has been made on behalf of a Local Unit, if the Local Unit fails to qualify for one of the Spending Exceptions, or is otherwise subject to the Rebate Requirement, then prior to a withdrawal from its Income Subaccount and upon receipt of such notification, the Local Unit shall promptly request, pursuant to the terms of the Information Statement, an interim Rebate Computation with NYLIB1/857121/1 iv respect to such Local Unit or an estimate of such Local Unit's Rebate Requirement for purposes of determining what amount, if any, to the credit of the Income Subaccount may be subject to rebate. Any estimate of the Local Unit's Rebate Requirement made by the Investment Manager shall also be provided to VPSA in writing. Notwithstanding anything to the contrary in the Information Statement, no disbursement will be made from the Income Subaccount until the aforementioned calculation shall have been made. The amount to the credit of the Income Subaccount that may be subject to rebate is the Income Subaccount Set Aside. On the Withdrawal Date, the Investment Manager shall (i) reserve, in the Income Subaccount, the amount of the "Income Subaccount Set Aside" until the next Rebate Computation required by Section 11 shall have been made and (ii) credit the remaining balance to the credit of the Income Subaccount to the credit of the Local Unit's Principal Subaccount ............................................................................................... 14 Section 10.Investment Losses ....................................................................................................... 15 1. losses on moneys to the credit of the Principal Subaccount shall be charged thereto; and .......................................................................................................... 15 2. losses on moneys to the credit of the Income Subaccount shall be charged first to the Principal Subaccount and then to the Income Subaccount .............................. 15 Section 11.Rebate Computations .................................................................................................. 15 Section 12.Transfers to Income Subaccount ................................................................................. 16 Section 13.Disposition of Excess Proceeds .................................................................................. 17 A. When a Local Unit shall certify to VPSA and the Investment Manager that there are balances to the credit of the Local Unit's Principal Subaccount or Income Subaccount that will not be used for Capital Projects prior to November 8, 2004, such amount shall be retained in the Proceeds Account and, to the extent such amount is not required to be deposited to the Income Subaccount pursuant to Section 12, VPSA will, except as provided in the last sentence of this Section 13A, direct the Depository to apply such amount to redeem such Local Unit's Local School Bonds on the earliest possible date that such Bonds may be called without a penalty or premium. Notwithstanding the foregoing, when a Local Unit shall certify to VPSA and the Investment Manager that it has made an election under Section 148(f)(4)(C)(viii) or (ix) of the Code to terminate the Penalty Election, and that, pursuant to Code Section 148(f)(4)(C)(viii)(III) of such termination election, such Local Unit indicates the amount of Available Construction Proceeds to be applied to the redemption of its Local School Bonds and the date of such redemption, VPSA will direct the Investment Manager and the Depository to apply such amount toward the redemption of such Local Unit's Local School Bonds on the date indicated. 17 B. In the event that there are any balances remaining on deposit in either the Principal Subaccount or Income Subaccount of any Local Unit on November 8, 2004, such amounts will be invested by the Investment Manager in an Individual Portfolio at a Yield not in excess of the VPSA's Bond Yield or in tax-exempt obligations. [With NYLIBI/857121/1 V respect to the [ ] Transferred Proceeds Account, in the event that there are any balances remaining on deposit in such account on [ ], such amounts will be invested by the Investment Manager in an Individual Portfolio at a Yield not in excess of the VPSA's Bond Yield or in tax exempt investments.] ............................................................... 17 Section 14.Rebate Payments and Penalty Payments ..................................................................... 18 A. The Local Unit Rebate Requirement of each Local Unit shall be paid to the United States Treasury at the direction of VPSA on behalf of and for the accounts of the Local Unit and VPSA in accordance with the Letter Agreement ................................................. 18 B. The payment of the Local Unit Rebate Requirement of each Local Unit shall be in partial satisfaction with respect to the VPSA's Bonds, and total satisfaction with respect to the proceeds of the Local School Bonds on deposit in the Proceeds Account, of the requirements of Section 148(f) of the Code except to the extent that such issue of Local School Bonds may be treated as a composite issue under Treasury Regulation § 1.150-1 (c) with another issue of obligations ............................................................................... 18 C. Notwithstanding anything to the contrary herein, if VPSA has made the Penalty Election on behalf of a Local Unit and if such Local Unit fails to qualify for one of the Spending Exceptions, then, prior to any further disbursements from the Principal Subaccount or Income Subaccount, the Local Unit shall promptly request, pursuant to the terms of the Information Statement, a computation of the amount of the Penalty that must be paid to the United States Treasury pursuant to the Penalty Election ....................................... 18 Section 15.Duties of VPSA ........................................................................................................... 19 Section 16.Duties of the Depository ............................................................................................. 20 Section 17.Duties of Local Units .................................................................................................. 20 A. The Local Units will cooperate with VPSA, the Investment Manager and the Depository in order to ensure that the purposes of this Agreement are fulfilled. To that end, each Local Unit covenants and agrees that it will take any and all action and refrain from taking any and all action, as recommended by its bond counsel, to maintain the exclusion from gross income for federal income tax purposes of interest on its Local School Bonds to the same extent such interest was so excludable on the Closing Date .............. 20 B'. If a Local Unit is required to restrict the Yield on its investments, in order to comply with such covenant or to maintain the exclusion from gross income for federal income tax purposes of the interest on VPSA's Bonds, it shall timely notify the Investment Manager to restrict such Yield to the VPSA's Bond Yield. Each Local Unit agrees not to charge its general fund or otherwise set aside or earmark funds with which to pay debt service on its Local School Bonds (other than as a budget item) prior to the date of payment thereof to VPSA ................................................................................................. 20 C. Each Local Unit agrees to provide for the payment of its Local Unit Rebate Requirement and/or Penalty and acknowledges that the payment of its Local Unit Rebate Requirement and/or Penalty is necessary to maintain the exclusion from gross income for federal income tax purposes of interest on its Local School Bonds as well as the VPSA's NYL1B1/857121/1 Bonds. Each Local Unit agrees to complete and to provide to VPSA such forms as VPSA may request for filing in connection with the payment of the Local Unit Rebate Requirement and/or Penalty .......................................................................................................... 20 D. Each Local Unit hereby covenants and represents that neither the Local Unit nor any related party, as defined in Section 1.150-1(b) of the Treasury Regulations, to such Local Unit, pursuant to any arrangement, formal or informal, will purchase the VPSA's Bonds in an amount related to the amount of Local School Bonds to be acquired from such Local Unit by VPSA .................................................................................................... 21 Section 18.Responsibilities of the Investment Manager ............................................................... 21 Section 19.Costs ............................................................................................................................ 21 Section 20.Opinions of Counsel ................................................................................................... 22 Section 21 .Amendment ................................................................................................................. 22 Section 22.Notices ........................................................................................................................ 22 Section 23.No Third Party Beneficiaries ...................................................................................... 24 Section 24.Severability ................................................................................................................. 24 Section 25.No Personal Liability .................................................................................................. 24 Section 26.Applicable Law ........................................................................................................... 25 Section 27.Counterparts ................................................................................................................ 25 Section 28.Effective Date; Term ................................................................................................... 26 NYLIB 1/857121/1 vii PROCEEDS AGREEMENT Respecting the Custody, Investment, and Disbursement of Proceeds of Local School Bonds Purchased by the Virginia Public School Authority with the Proceeds of Its $[ ] School Financing Bonds (1997 Resolution) Series 2001 B This PROCEEDS AGREEMENT, dated November 8, 2001 (this "Agreement"), is among the Virginia Public School Authority, a public body corporate and instrumentality of the Commonwealth of Virginia ("VPSA"), the [ ] counties and | ! cities that are signatories to this Agreement (collectively, thc "Local Units", and each a "Local Unit"), Wachovia Bank, N.A., a banking institution organized under the laws of the United States and having its principal office in Winston-Salem, North Carolina, and having an office in Richmond, Virginia, and Evergreen Investment Management Company LLC, a corporation organized under the laws of Delaware and having an office in Richmond, Virginia. All capitalized terms used herein shall have the meaning given to them in Section 2 hereof. The parties hereto agree and covenant as follows: Section 1. Recitals. A. On or before October 2, 2001, VPSA and each of the Local Units entered into a Bond Sale Agreement, pursuant to which VPSA agreed to purchase, and the Local Unit agreed to sell its Local School Bonds. B. On October 17, 2001, VPSA's Bonds were awarded at competitive bidding to the Purchaser. The Purchaser is obligated by the terms of its bid to pay the purchase price for VPSA's Bonds on the Closing Date. VPSA will apply certain of the proceeds of the sale of VPSA's Bonds, together with other available money, to the purchase of the Local School Bonds on November 8, 2001, the Local School Bonds Closing Date. VPSA will also apply certain of NYLIB1/857121/1 the proceeds of the sale of VPSA's Bonds, together with other available funds, to pay accrued interest and costs of issuance of the VPSA Bonds. C. The Code imposes requirements on VPSA and the Local Units selling their Local School Bonds to VPSA that must be met if interest on VPSA's Bonds and interest on the Local School Bonds are to be excludable from gross income for federal income tax purposes, including a requirement that in certain circumstances, certain investment income with respect to the Local School Bonds, which income is deemed for federal income tax purposes to be investment income of VPSA's Bonds, be subject to payment, or in lieu thereof certain payments be made, to the United States Treasury. D. VPSA has determined that in order to fulfill its representations respecting the maintenance of the exclusion of the interest on VPSA's Bonds from gross income for federal income tax purposes, VPSA must establish a mechanism to provide accountability for the custody, investment and disbursement of the proceeds of VPSA's Bonds and the proceeds of the Local School Bonds. E. It is the purpose of this Agreement to enable VPSA (i) to fulfill the representations mentioned in the preceding subsection; (ii) subject to the constraints of the Code affecting the investment of the proceeds of tax-exempt obligations, to achieve the optimum, practicable income by the professional management of the investment and reinvestment of the proceeds of the Local School Bonds; (iii) to provide for the custody, investment and disbursement of the proceeds of the Local School Bonds, and for the maintenance of appropriate records thereof; (iv) to meet the rebate requirement imposed by Section 148(0 of the Code, in part through the payment of either the Local Unit Rebate Requirement by each of the Local Units or the Penalty if the Penalty Election has been made on behalf of a Local Unit; and (v) to provide NYLIB1/857121/I 2 for the allocation and payment of the costs associated with the establishment and maintenance of this Agreement. F. The purposes set forth in the preceding subsection E shall be accomplished through SNAP. The proceeds of the Local School Bonds shall be invested in accordance with the Information Statement. Any statements of facts contained in these recitals pertaining to the sale of the VPSA's Bonds and the application of such proceeds, other than the purchase of the Local School Bonds, will not be deemed to be made by the Local Units except to the extent they have knowledge of such facts. Section 2. Del'tuitions. In addition to the words and terms elsewhere defined in this Proceeds Agreement including the Exhibits attached hereto, the following words and terms shall have the following meanings: "Aggregate Local Units Rebate Requirement" shall be the amount calculated pursuant to the Letter Agreement. "Agreement" or "Proceeds Agreement" shall mean the Proceeds Agreement, dated November 8, 2001, among the Authority, the Local Units, the Depository and the Investment Manager. "Authorized Representative" shall mean, as applied to VPSA, the Depository, the Investment Manager and the Local Units, the person or each of the persons thereby designated, from time to time, in accordance with and as listed on the page of this Agreement executed by such party. NYLIB1/857121/1 3 "Available Construction Proceeds" shall mean, as applied to each Local Unit, the sum of (i) the amount initially deposited to the Principal Account of such Local Unit pursuant to Section 5 hereof, and (ii) the investment earnings thereon, reduced by the amount of issuance costs financed by such Local Unit's Local School Bonds. In the event that the Local Unit has made the Bifurcation Election on its signature page, "Available Construction Proceeds" shall mean the sum of the amount set forth on the signature page as the portion of the issue used for construction and the investment eamings thereon, reduced by the amount set forth on the signature page as allocable to issuance expenses. "Bifurcation Election", with respect to each issue of Local School Bonds, shall mean the election made by the Local Unit to treat a portion of its Local School Bonds used for construction as a separate issue pursuant to Section 148(f)(4)(C)(v) of the Code. "Bond Sale Agreements" shall refer to the respective Bond Sale Agreements, dated as of October 2, 2001, between VPSA and each Local Issuer. "Capital Expenditure" shall mean any cost of a type that is properly chargeable to a capital account (or would be so chargeable with a proper election) under general federal income tax principles as determined at the time the expenditure is paid with respect to the property. "Capital Project" shall mean all Capital Expenditures, plus related working capital expenditures to which the de minimis exception provided by Section 1.148-6(d)(3)(ii)(A) of the Treasury Regulations to the proceeds-spent-last rule applies, that carry out the governmental purpose of the Local School Bond issue. "Closing Date" shall mean the date of delivery by the VPSA of the VPSA Bonds to the Purchaser. The Closing Date is scheduled to be November 8, 2001. NYLIB1/857121/1 4 "Code" shall mean the Internal Revenue Code of 1986, as amended. "Computation Date" shall mean each of the Installment Computation Dates and the Final Computation Date. "Contract" shall mean the Contract respecting the Virginia State Non-Arbitrage Program, between the Treasury Board of the Commonwealth of Virginia and the Investment Manager, including the Depository Agreement appearing as Appendix A thereto. "Depository" shall mean Wachovia Bank, N.A., a banking institution organized under the laws of the United States of America and having its principal office in Winston-Salem, North Carolina and an office in Richmond, Virginia and its future successors and assigns under the Depository Agreement. "Eighteen-Month Exception" shall mean the exception to the Rebate Requirement provided by Treasury Regulation Section 1.148-7(d). "Final Computation Date" shall mean the date the last bond that is part of the issue of VPSA's Bonds is discharged. "Gross Proceeds" shall have the meaning given to such term in the Letter Agreement. "Income Subaccount" shall mean the Income Subaccount established pursuant to Section 4 of this Proceeds Agreement for each Local Unit and (ii) both Income Subaccounts established pursuant to Section 4(b) of this Proceeds Agreement for the __ Local Units described therein. "Income Subaccount Set Aside" shall have the meaning given to such term by Section 9(b) of this Agreement. NYLIB1/857121/1 5 "Individual Portfolio" shall have the meaning given to such tem~ in the Information Statement. "Information Statement" shall mean the current Information Statement describing SNAP, as the same may be supplemented and amended. "Installment Computation Dates" shall mean November 8, 2006, and each fifth (Sth) anniversary date thereafter. "Investment Manager" shall mean the investment manager of SNAP and its successors and assigns, on the Closing Date being Evergreen Investment Management Company LLC, a corporation organized under the laws of Delaware and having an office in Richmond, Virginia. "Investment Report" shall have the meaning given to such term in Part A of the Letter Agreement. "Letter Agreement" shall mean the Letter Agreement, dated the date hereof, attached to this Agreement as Exhibit C. "Local School Bonds" shall mean general obligation school bonds of a Local Unit having the terms and provisions required by the Bond Sale Agreement. "Local School Bonds Closing Date" shall mean the Closing Date, except as othenvise provided on the page of this Agreement executed by a Local Unit; provided, however, the Local School Bonds Closing Date with respect to an issue of Local School Bonds shall not be deemed to have occurred until the related Local Unit shall have delivered the Local School Bonds to VPSA and otherwise complied with the terms of its Bond Sale Agreement. "Local Unit" or "Local Units" shall have the meaning accorded to such term by the first paragraph of this Agreement. NYLIB1/857121/1 6 "Local Unit Rebate Computation", with respect to each issue of Local School Bonds, shall mean a Rebate Computation for each Local Unit made on each Computation Date pursuant to Section 11 of this Proceeds Agreement. "Local Unit's Rebate Requirement", with respect to each issue of Local School Bonds, shall mean the amount payable to the United States Treasury calculated pursuant to the Letter Agreement. "Penalty" shall mean the amount that must be paid to the United States Treasury pursuant to the Penalty Election. "Penalty Election", with respect to each issue of Local School Bonds, shall mean the election made by the Local Unit to pay a penalty in lieu of rebate pursuant to Section 148(f)(4)(C)(vii) of the Code. "Principal Subaccount" shall mean the Principal Subaccount established pursuant to Section 4(a) of this Proceeds Agreement for each Local Unit and (ii) both Principal Subaccounts established pursuant to Section 4(b) of this Proceeds Agreement for the Local Units described therein. "Proceeds Account" shall mean, with respect to each Local Unit, its account established under Section 4 of this Proceeds Agreement. "Purchaser" shall mean [ ], the bidder offering to pay the lowest true interest cost of VPSA's Bonds and to which VPSA awarded VPSA's Bonds at a competitive sale. "Rebate Calculation Agent" shall have the meaning given to such term in the Letter Agreement. NYLIBI/857121/1 7 "Rebate Computation" shall mean the computation, as of a Computation Date, of the Local Unit Rebate Requirement to such Computation Date. The amount so computed may be a positive or a negative number. "Rebate Exceptions" shall mean the Spending Exceptions and the Small-Issuer Exception, collectively. "Rebate Report" shall mean the Local Unit Rebate Computations. "Rebate Requirement" shall mean the rebate requirement imposed by Sections 148(f)(2) and (3) of the Code. "Six-Month Exception" shall mean the exception to the Rebate Requirement provided by Section 148(f)(4)(B) of the Code. "SmalMssuer Exception" shall mean the exception to the Rebate Requirement provided by Section 148(f)(4)(D) of the Code. "SNAP" shall mean the State Non-Arbitrage Program established pursuant to Article 7.1, Chapter 14, Title 2.1, Code of Virginia, as amended. "SNAP Documents" shall mean the Information Statement and the Contract. "Spending Exceptions" shall mean the Six-Month Exception, the Eighteen-Month Exception and the Two-Year Exception, collectively. "Two-Year Exception" shall mean the exception to the Rebate Requirement provided by Section 148(f)(4)(C) of the Code. "VPSA" shall mean the Virginia Public School Authority, a public body corporate and instrumentality of the Commonwealth of Virginia. "VPSA's Bond Yield" shall mean the Yield on VPSA's Bonds as set forth in the Letter Agreement. As provided in Treasury Regulation Section 1.148-4(a), the yield on each NYLIB1/857121/1 8 issue of Local School Bonds of a Local Unit the interest on which is excluded from gross income shall equal the VPSA's Bond Yield. "VPSA's Bonds" shall mean the $[ VPSA's School Financing Bonds (1997 Resolution) Series 2001 B. "Withdrawal Date" shall mean the date as of which an interim Rebate Calculation is made pursuant to Section 9 of this Proceeds Agreement. "Yield" shall have the meaning accorded to such term by the Letter Agreement. Section 3. Disposition of VPSA Bond Proceeds. A. Prior to the Closing Date, each Local Unit will complete and submit, to the Investment Manager, the program registration form and the SNAP account registration form annexed to the Information Statement. B. On the Closing Date, VPSA will transfer to the Depository for deposit in SNAP, in immediately available funds, an amount equal to the aggregate purchase price of all of the Local School Bonds ($[ ]). C. Each Local Unit hereby agrees to adhere strictly to the prescribed and recommended procedures described in the Information Statement. Each Local Unit hereby further agrees that it will not deviate from or request an exception to such procedures without first obtaining the prior written approval of VPSA. In the event of a conflict between the provisions of this Agreement and the Information Statement, the provisions of this Agreement shall control. ] aggregate principal amount of NYLIB1/857121/1 9 Section 4. Establishment of Accounts. (a) Except as provided in Section 4(b) below, the Investment Manager will establish on its books for each Local Unit one (1) account and two (2) subaccounts therein as follows: VPSA-(Name of Local Unit) Proceeds Account - Series 2001 B Issue Principal Subaccount Income Subaccount (b) The Investment Manager shall establish on its books for [ ], within the one (1) Proceeds Account for each such Local Unit, two (2) subaccounts therein, and two subaccounts within each such subaccount, as follows: VPSA- (Name of Local Unit) Proceeds Account -Series 2001 B Issue Non Subsidy Subaccount Principal Subaccount Income Subaccount Subsidy Subaccount Principal Subaccount Income Subaccount The amounts in the Principal Subaccounts and Income Subaccounts of each of these Local Units shall be combined for purposes of this Agreement. Requisitions from [ ] shall specify the Subaccount from which moneys are being requisitioned. If a Local Unit has elected to treat a portion of its Local School Bonds issue used for construction as a separate issue as set forth on its signature page, the Investment Manager shall maintain such records as necessary to determine the portion of the Principal Subaccount and Income Subaccount of such Local Unit allocable to the construction issue and the non- construction issue. Section 5. Disposition of Local School Bond Proceeds. A. The Investment Manager shall allocate the proceeds of the Local School Bonds on the Local School Bonds Closing Date(s) to the Local Unit(s), dollar for dollar, in NYLIB1/857121/1 10 accordance with the respective purchase prices of their Local School Bonds set forth in Exhibit A to this Agreement. There is no accrued interest on the Local School Bonds. Except as provided in Section 5(B) - ([ ]) below, the proceeds of VPSA's Bonds allocated to each Local Unit shall be credited to the Principal Subaccount of the Local Unit in the amounts set forth in Exhibit A with respect to the Subsidy Local School Bonds and/or the Non-Subsidy Local School Bonds, as the case may be. B.[ 1. Section 6. Investment of Principal Subaeeount. The Investment Manager shall invest and reinvest moneys to the credit of the Principal Subaccount of each Local Unit for the benefit of such Local Unit in accordance with the provisions of the Information Statement and Section 18 of this Agreement. The Investment Manager shall credit to the Local Unit's Income Subaccount all income and profits from the investment and reinvestment of moneys to the credit of its respective Principal Subaccount. Section 7. Disbursements from Principal Subaeeount. Beginning on its Local School Bonds Closing Date, each Local Unit may at any time withdraw all or any portion of the proceeds of its Local School Bonds credited to its Principal Subaccount (including amounts transferred to the credit of the Principal Subaccount from the Income Subaccount pursuant to Section 9), in accordance with the Information Statement and, in the case of a.reimbursement to the Local Unit, by filing with the Investment Manager a requisition or requisitions therefor in the form of Exhibit B to this Agreement signed by an Authorized Representative of the Local Unit. Notwithstanding anything to the contrary in the Information Statement, the Investment Manager agrees that, in the case of a reimbursement NYLIB1/857121/1 11 to the Local Unit, it shall not disburse any money from the Principal Subaccount unless and until it has received such requisition from the Local Unit. Section 8. Investment of Income Snbacconnt. The Investment Manager shall invest and reinvest moneys to the credit of the Income Subaccount of each Local Unit for the benefit of such Local Unit in accordance with the provisions of the Information Statement and Section 18 of this Agreement. The Investment Manager shall credit to the Local Unit's Income Subaccount all income and profits from the investment and reinvestment of moneys to the credit thereof. Section 9. Income Stlbacconnt. A. The Investment Manager will notify a Local Unit and VPSA when the balance to the credit of the Principal Subaccount of such Local Unit shall have been reduced to zero ($0). Such Local Unit may then withdraw from its Income Subaccount an amount not in excess of the amount then to the credit of its Income Subaccount if the Local Unit qualifies for any one of the Rebate Exceptions or if such withdrawal is necessary to qualify for one of the Spending Exceptions. 1. In order to qualify for the Small-Issuer Exception, the Local Unit must deliver to VPSA and the Investment Manager no later than the end of calendar year 2001 (a) a letter from, or opinion of, nationally recognized bond counsel that the Local School Bonds of such Local Unit purchased by VPSA with the proceeds of the VPSA's Bonds will be treated as meeting the requirements of Code Sections 148(0(2) and (3), pursuant to Code Section 148(f)(4)(D); and (b) the Local Unit's covenant that it shall provide for the payment or reimburse VPSA for its payment of the Local Unit's Rebate Requirement NYLIB1/857121/I 12 in the event that the Local School Bonds of such Local Unit fail to meet all of the requirements of the Small Issuer Exception. 2. In order to determine if a Local Unit qualifies for either the Six-Month Exception or the Eighteen-Month Exception, the Investment Manager shall advise each Local Unit and VPSA of the amount that has been disbursed from the Principal Subaccount and the Income Subaccount of such Local Unit (a) six (6) months from the Local School Bonds Closing Date, (b) twelve (12) months from the Local School Bonds Closing Date, and (c) eighteen (18) months from the Local School Bonds Closing Date. To facilitate such determination, each Local Unit shall set forth on the signature page for such Local Unit the amount of investment proceeds that such Local Unit reasonably expects as of the Local School Bonds Closing Date to earn. 3. In order to determine if a Local Unit qualifies for the Two-Year Exception, the Investment Manager shall advise each Local Unit and VPSA, of the amount of Available Construction Proceeds that has been disbursed from the Principal Subaccount and the Income Subaccount of such Local Unit (a) six (6) months from the Local School Bonds Closing Date, (b) twelve (12) months from the Local School Bonds Closing Date, (c) eighteen (18) months from the Local School Bonds Closing Date, and (d) twenty-four (24) months from the Local School Bonds Closing Date. To facilitate such determination, each Local Unit shall set forth on the signature page for such Local Unit the amount of investment proceeds that such Local Unit reasonably expects as of the Local School Bonds Closing Date to earn and the elections that it requests VPSA to make on its behalf. Furthermore, such Local Unit shall set forth in a certificate delivered to NYLIB1/857121/1 13 VPSA on the Local School Bonds Closing Date such facts and circumstances as necessary to show that it reasonably expects to qualify for the Two-Year Exception. 4. The portion of the proceeds of the VPSA Bonds applied to purchase the [ ] Bonds do not qualify for the Eighteen-Month Exception or TwO-year Exception. B. Except to the extent that a Penalty Election has been made on behalf of a Local Unit, if the Local Unit fails to qualify for one of the Spending Exceptions, or is otherwise subject to the Rebate Requirement, then prior to a withdrawal from its Income Subaccount and upon receipt of such notification, the Local Unit shall promptly request, pursuant to the terms of the Information Statement, an interim Rebate Computation with respect to such Local Unit or an estimate of such Local Unit's Rebate Requirement for purposes of determining what amount, if any, to the credit of the Income Subaccount may be subject to rebate. Any estimate of the Local Unit's Rebate Requirement made by the Investment Manager shall also be provided to VPSA in writing. Notwithstanding anything to the contrary in the Information Statement, no disbursement will be made from the Income Subaccount until the aforementioned calculation shall have been made. The amount to the credit of the Income Subaccount that may be subject to rebate is the Income Subaccount Set Aside. On the Withdrawal Date, the Investment Manager shall (i) reserve, in the Income Subaccount, the amount of the "Income SubaccoUnt Set Aside" until the next Rebate Computation required by Section 11 shall have been made and (ii) credit the remaining balance to the credit of the Income Subaccount to the credit of the Local Unit's Principal Subaccount. NYLIB1/857121/1 14 Section 10. Investment Losses. The Investment Manager shall charge any loss realized from the investment or reinvestment of moneys to the credit of the Income Subaccount and the Principal Subaccount of a Local Unit as follows: 1. losses on moneys to the credit of the Principal Subaccount shall be charged thereto; and 2. losses on moneys to the credit of the Income Subaccount shall be charged first to the Principal Subaccount and then to the Income Subaccount. Section 11. Rebate Computations. On or before each Computation Date, VPSA will prepare, or cause to be prepared, in accordance with the provisions of the Letter Agreement the Local Unit Rebate Computations. The Local Unit Rebate Computation for each Local Unit shall be made on the basis of the Investment Reports maintained by the Investment Manager for each Proceeds Account. [With respect to the amounts on deposit in the [ , and ] Transferred Proceeds Account[s], such amounts will be taken into account for purposes of the Local Unit Rebate Computation for County, respectively as applicable, only if the County, County and Note, Note and Note, respectively as applicable, do not qualify for one of the Spending Exceptions or if the Note, Note and Note, respectively as applicable, fail to meet all of the requirements of the Small Issuer Exception.] As set forth in the Letter Agreement, the Local Unit Rebate Requirement shall be calculated separately for each Local Unit. If it is determined, however, that the Local Unit Rebate Requirement is required to be calculated in the aggregate, the Local Unit Rebate NYLIB1/857121/I 1 5 Requirement for each Local Unit shall be equal to a percentage of the Aggregate Local Units Rebate Requirement determined by multiplying the Aggregate Local Units Rebate Requirement by a fraction, the numerator of which is the positive Local Unit Rebate Requirement calculated separately and the denominator of which is the sum of all of the positive Local Unit Rebate Requirements calculated separately. If any provision of this Agreement shall become inconsistent with any regulation or regulations promulgated under Section 148(f') of the Code subsequent to the date hereof, VPSA hereby agrees and covenants to prepare, or cause to be prepared, as soon as practicable, a Local Unit Rebate Computation for each Local Unit, in compliance with such regulation or regulations, and VPSA, the Investment Manager and each of the Local Units hereby further agree and covenant immediately to make any and all transfers and payments required by Sections 12 and 14 of this Agreement from any moneys on deposit in the Income Subaccount and any other moneys of the Local Unit legally available for such purpose. Section 12. Transfers to Income Subaecount. Upon receipt by a Local Unit of the Rebate Report from VPSA, if the amount on deposit in the Local Unit's Income Subaccount (including the Income Subaccount Set Aside) is less than the Local Unit Rebate Requirement of such Local Unit, the Investment Manager shall promptly charge the Principal Subaccount of such Local Unit an amount equal to the deficiency and credit its Income Subaccount such amount. To the extent that the amount on deposit in the Principal Subaccount is insufficient to remedy the deficiency, the Investment Manager shall advise VPSA and such Local Unit of the amount of the remaining deficiency, and, to the extent permitted by law, the Local NYLIBI/8$7121/1 16 Unit agrees to transfer promptly to the Depository, from any funds that are or may be made legally available for such purpose, the amount equal the remaining deficiency. To the extent that the amount on deposit in the Income Subaccount exceeds the Local Unit Rebate Requirement for the Local Unit, such excess shall be transferred to the Principal Subaccount of the Local Unit. Section 13. Disposition of Excess Proceeds. A. When a Local Unit shall certify to VPSA and the Investment Manager that there are balances to the credit of the Local Unit's Principal Subaccount or Income Subaccount that will not be used for Capital Projects prior to November 8, 2004, such amount shall be retained in the Proceeds Account and, to the extent such amount is not required to be deposited to the Income Subaccount pursuant to Section 12, VI)SA will, except as provided in the last sentence of this Section 13A, direct the Depository to apply such amount to redeem such Local Unit's Local School Bonds on the earliest possible date that such Bonds may be called without a penalty or premium. Notwithstanding the foregoing, when a Local Unit shall certify to VPSA and the Investment Manager that it has made an election under Section 148(f)(4)(C)(viii) or (ix) of the Code to terminate the Penalty Election, and that, pursuant to Code Section 148(f)(4)(C)(viii)(III) of such termination election, such Local Unit indicates the amount of Available Construction Proceeds to be applied to the redemption of its Local School Bonds and the date of such redemption, VPSA will direct the Investment Manager and the Depository to apply such amount toward the redemption of such Local Unit's Local School Bonds on the date indicated. B. In the event that there are any balances remaining on deposit in either the Principal Subaccount or Income Subaccount of any Local Unit on November 8, 2004, such NYLIB 1/857121/1 1 7 amounts will be invested by the Investment Manager in an Individual Portfolio at a Yield not in excess of the VPSA's Bond Yield or in tax-exempt obligations. [With respect to the [ ] Transferred Proceeds Account, in the event that there are any balances remaining on deposit in such account on [ ], such amounts will be invested by the Investment Manager in an Individual Portfolio at a Yield not in excess of the VPSA's Bond Yield or in tax exempt investments.] Section 14. Rebate Payments and Penalty Payments. A. The Local Unit Rebate Requirement of each Local Unit shall be paid to the United States Treasury at the direction of VPSA on behalf of and for the accounts of the Local Unit and VPSA in accordance with the Letter Agreement. B. The payment of the Local Unit Rebate Requirement of each Local Unit shall be in partial satisfaction with respect to the VPSA's Bonds, and total satisfaction with respect to the proceeds of the Local School Bonds on deposit in the Proceeds Account, of the requirements of Section 148(f) of the Code except to the extent that such issue of Local School Bonds may be treated as a composite issue under Treasury Regulation §1.150-1(c) with another issue of obligations. C. Notwithstanding anything to the contrary herein, if VPSA has made the Penalty Election on behalf of a Local Unit and if such Local Unit fails to qualify for one of the Spending Exceptions, then, prior to any further disbursements fi:om the Principal Subaccount or Income Subaccount, the Local Unit shall promptly request, pursuant to the terms of the Information Statement, a computation of the amount of the Penalty that must be paid to the United States Treasury pursuant to the Penalty Election. NYLIB1/SS7121/1 18 If the amount on deposit in the Local Unit's Income Subaccount and Principal Subaccount is less than the amount of the Penalty due by such Local Unit, the Investment Manager shall advise VPSA and such Local Unit of the amount of the deficiency, and to the extent permitted by law, the Local Unit agrees to transfer promptly to the Depository, fi.om any funds that are or may be made legally available for such purpose, the amount of the deficiency. The Penalty of each Local Unit shall be paid to the United States Treasury at the direction of VPSA on behalf of and for the accounts of the Local Units no later than ninety (90) days after the end of the spending period to which the Penalty relates. Section 15. Duties of VPSA. VPSA shall carry out its duties and responsibilities under this Agreement and may retain agents, independent contractors and others that it deems qualified to carry out any or all of such duties and responsibilities. VPSA shall carry out, or cause to bc carried out, all of its responsibilities under thc Letter Agreement. VPSA shall retain a copy of all Rebate Computations for at least six (6) years after thc retirement of thc last of VPSA's Bonds. VPSA agrees that, except as provided in this Agreement, any rebate liability that VPSA may have on account of the investment and reinvestment of thc Gross Proceeds of VPSA's bonds, including, by way of example and not of limitation, any rebate liability as a result of thc investment of money credited to funds and accounts created under its bond resolutions or as a result of the advance refunding of its bonds, shall be the sole responsibility of VPSA and not any Local Unit. NYLIB1/857121/I 19 Section 16. The Depository shall Documents and this Agreement. Section 17. Duties of Local Units. Duties of the Depository. carry out its duties and responsibilities under the SNAP A. The Local Units will cooperate with VPSA, the Investment Manager and the Depository in order to ensure that the purposes of this Agreement are fulfilled. To that end, each Local Unit covenants and agrees that it will take any and all action and refrain from taking any and all action, as recommended by its bond counsel, to maintain the exclusion from gross income for federal income tax purposes of interest on its Local School Bonds to the same extent such interest was so excludable on the Closing Date. B. If a Local Unit is required to restrict the Yield on its investments, in order to comply with such covenant or to maintain the exclusion from gross income for federal income tax purposes of the interest on VPSA's Bonds, it shall timely notify the Investment Manager to restrict such Yield to the VPSA's Bond Yield. Each Local Unit agrees not to charge its general fund or otherwise set aside or earmark funds with which to pay debt service on its Local School Bonds (other than as a budget item) prior to the date of payment thereof to VPSA. C. Each Local Unit agrees to provide for the payment of its Local Unit Rebate Requirement and/or Penalty and acknowledges that the payment of its Local Unit Rebate Requirement and/or Penalty is necessary to maintain the exclusion from gross income for federal income tax purposes of interest on its Local School Bonds as well as the VPSA's Bonds. Each Local Unit agrees to complete and to provide to VPSA such forms as VPSA may request for filing in connection with the payment of the Local Unit Rebate Requirement and/or Penalty. NYLIB1/857121/1 20 D. Each Local Unit hereby covenants and represents that neither the Local Unit nor any related party, as defined in Section 1.150-1 (b) of the Treasury Regulations, to such Local Unit, pursuant to any arrangement, formal or informal, will purchase the VPSA's Bonds in an amount related to the amount of Local School Bonds to be acquired from such Local Unit by VPSA. Section 18. Responsibilities of the Investment Manager. The Investment Manager shall be the agent of, and serve at the expense of, the Local Units, to manage and direct the temporary investment and reinvestment of all moneys to the credit of the Proceeds Accounts pending their disbursement to the Local Units and to make such computations as required by this Agreement. In general, the duties of the Investment Manager shall include those described in the SNAP Documents. In particular, the Investment Manager will direct the investment and reinvestment of moneys to the credit of the Subaccounts of each Local Unit in accordance with the Information Statement, the Contract and this Agreement. Section 19. Costs. Costs of SNAP are payable as provided in the Information Statement. The difference in the interest rates between VPSA's Bonds and the Local School Bonds shall be collected and retained by VPSA as partial payment of the administrative costs incurred by VPSA in connection with issuing, carrying, and repaying VPSA's Bonds, and the underwriting discount, if any, and the cost of purchasing, carrying, and selling or redeeming the Local School Bonds. VPSA will not charge any other fee to the Local Units for its services or seek NYLIB1/857121/1 21 reimbursement for its fees and expenses, including counsel fees, incurred in connection with the discharge of its duties and responsibilities under this Agreement. Section 20. Opinions of Counsel. On the Closing Date, VPSA and each Local Unit shall furnish an opinion of counsel addressed, in the case of counsel to VPSA, to all the Local Units, and in the case of counsel to the Local Units, to VPSA, to the effect that the obligations of its client under this Agreement are valid, binding and enforceable against such client in accordance with its terms. Section 21. Amendment. This Agreement may be amended only with the consent of all the affected parties; provided, however, that this Agreement shall be amended whenever, in the judgment of VPSA, based on an opinion of its counsel, such amendment is required in order to insure that interest on VPSA's Bonds shall remain excludable fi.om gross income for federal income tax purposes to the same extent it was, in the opinion of such counsel, so excludable on the Closing Date. VPSA shall offer to amend this Agreement whenever it shall in good faith determine, based on an opinion of its counsel, that any one or more of the restrictions or requirements imposed by this Agreement upon the Local Units, or any of them, may be removed or modified without adversely affecting the exclusion of interest on VPSA's Bonds fi.om gross income for federal income tax purposes. Section 22. Notices. Whenever notice is to be given pursuant to the provisions of this Agreement, such notice shall be deemed to have been satisfactorily given on the same day if hand delivered or telecopied during regular business hours or three (3) days after the date of postmark if mailed, first class mail, postage prepaid, as follows: NYLIB1/857121/I 22 If to VPSA, to byhand by mail by telecopier in any case Virginia Public School Authority c/o State Treasurer 3rd Floor, James Monroe Building 101 North 14th Street Richmond, Virginia 23219 Post Office Box 1879 Richmond, Virginia 23218-1879 (804) 225-3187 Attention: Public Finance Manager If to the Depository, to By hand By mail By telecopier In any case Wachovia Bank, N.A. 1021 East Cary Street Richmond, Virginia 23219 Post Office Box 27602 Richmond, Virginia 23261 (804) 697-7370 Attention: Anthony J. Conte Senior Vice President If to the Investment Manager, to Byhand By mail By telecopier In any case Evergreen Investment Management Company LLC 951 East Byrd Street Riverfront Plaza, 6th Floor Richmond, Virginia 23219 951 East Byrd Street Riverfront Plaza, 6th Floor Richmond, Virginia 23219 (804) 344-6520 Attention: A1 Samper Senior Vice President NYLIB1/857121/1 23 If to a Local Unit, to the address or telecopier number indicated on the page of this Agreement executed by such Local Unit. Any such address or number may be changed by written notice given to all the other parties to this Agreement and the Investment Manager, except that a Local Unit need give such notice only to VPSA, the Depository and the Investment Manager. Section 23. No Third Party Beneficiaries. Except as herein otherwise expressly provided, nothing in this Agreement expressed or implied is intended or shall be construed to confer upon any person, firm or corporation other than the parties hereto any right, remedy or claim, legal or equitable, under or by reason of this Agreement or any provision hereof, this Agreement and all its provisions being intended to be and being for the sole and exclusive benefit of the parties hereto. Section 24. Severability. In case any one or more of the provisions of this Agreement shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Agreement and this Agreement shall be construed and enforced as if such illegal or invalid provision had not been contained herein. In case any covenant, stipulation, obligation or agreement contained in this Agreement shall for any reason be held to be in violation of law, then such covenant, stipulation, obligation or agreement shall be deemed to be the covenant, stipulation, obligation or agreement of the affected party to the full 'extent permitted by law. Section 25. No Personal Liability. All covenants, stipulations, obligations and agreements of VPSA contained in this Agreement shall be deemed to be covenants, stipulations, obligations and agreements of VPSA to the full extent authorized by the laws and permitted by the Constitution of Virginia. No ~qwmms7~2~/~ 24 covenant, stipulation, obligation or agreement contained herein shall be deemed to be a covenant, stipulation, obligation or agreement of any present or future member, employee or agent of VPSA or any Local Unit in his individual capacity. No member, officer, employee or agent of VPSA or any Local Unit shall incur any personal liability in acting or proceeding or in not acting or not proceeding, in good faith, reasonably and in accordance with the terms of this Agreement and the applicable laws of the Commonwealth of Virginia. Section 26. Applicable Law. This Agreement is executed with the intent that the laws of the Commonwealth of Virginia shall govern its construction. Section 27. Counterparts. This Agreement may be executed in one or more counterparts. NYLIB1/857121/1 25 Section 28. Effective Date; Term. This Agreement shall take effect on the Closing Date and shall expire on the date on which VPSA shall make the final rebate payment required by Part D of the Letter Agreement. Virginia Public School Authority By: Name: Title: Richard A. Davis Assistant Secretary and Assistant Treasurer Wachovia Bank, N.A. By: Nanle: Title: Anthony J. Conte Senior Vice President Evergreen Investment Management Company LLC By: Name: A1 Samper Title: Senior Vice President NYLIB1/857121/1 26 NAME OF ISSUER: Page 1 of 2 A. Address for notices, by hand, by mail and by teleeopier, ff any, as referred to in Section 22 above: B. Authorized Representative(s): Name Title Specimen Signature C. Local School Bonds Closing Date (if not November 8, 2001, enter Date of Issue of Local School Bonds): D. Is the Small Issuer Exception applicable to this Issuer? (If yes, an opinion of Bond Counsel and Issuer's covenant is required as per Section 9 herein). Yes No E. Eighteen Month Exception Estimated Investment Earnings for purposes of the Eighteen-Month Exception: $ If any proceeds are used to refund prior debt, please indicate: (a) proceeds used to refund prior debt: $ (b) issuance expense allocable to the refunding portion of the issue: $ NYLIB1/857121/1 27 NAME OF ISSUER: Page 2 of 2 F. Elections with respect to Two-Year Exception: 1. Election to use actual facts in lieu of reasonable expectations for purposes of the Two-Year Exception: Yes No 2. Estimated Investment Earnings: $ 3. If any proceeds are used to refund prior debt, please indicate: (a) proceeds used to refund prior debt: $ (b) issuance expenses allocable to the refunding portion of the issue: $ 4. Bifurcation Election to treat the portion of the issue used for construction as a separate issue: Yes No If yes, state the portion of the issue used for construction and non-construction, respectively; (the sum of the following amounts must equal the issue price of $ reduced by any portion used for refunding purposes): (a) portion of the issue used for construction: $ (b) issuance expenses allocable to the construction portion of the issue: $ (c) portion of the issue used for non-construction: $ (d) issuance expenses allocable to the non-construction portion of the issue: $ 5. Penalty Election to pay One and One-Half Percent Penalty in lieu of rebate: Yes No City/County By: Name: Title: NYLIB1/857121/I 28 Exhibit A Page 1 of 2 LOCAL SCHOOL BONDS- NON-SUBSIDY Local Unit Albemarle County Amherst County Appomattox County City of Danville Fauquier County Frederick County City of Harrisonburg Mattlews County Spotsylvania County Stafford County Principal Amount of Bonds Purchase Price TOTAL: NYLIB1/857121/1 A-1 Exhibit A Page 2 of 2 LOCAL SCHOOL BONDS- SUBSIDY Local Unit Appomattox County City of Chesapeake Culpeper County City of Danville Essex County City of Hopewell Montgomery County City of Portsmouth City of Roanoke Roanoke County Stafford County Washington County City of Waynesboro Principal Amount of Bonds Purchase Price Total: NYLIB1/857121/1 A-2 Exhibit B [No requisition is required in conjunction with a check payable to a vendor in respect of an invoice due and payable.] FORM OF REQUISITION FOR REIMBURSEMENT BY PRE-AUTHORIZED WIRE [To be used for REIMBURSEMENT to a Local Unit from Local School Bond proceeds for an invoice or obligation that has been paid and is eligible for payment from Local School Bond proceeds.] Evergreen Investment Management Company LLC 901 East Byrd Street Riverfront Plaza, 6th Floor Richmond, Virginia 23219 VIRGINIA PUBLIC SCHOOL AUTHORITY [Name of Local Unit] BOND PROCEEDS ACCOUNT - SERIES 2001 B ISSUE Requisition from the Principal Subaccount Requisition No. __ ("item number") This requisition for payment from the Principal Subaccount of the Proceeds Account is submitted in accordance with the provisions of the Proceeds Agreement dated November 8, 2001, among the Virginia Public School Authority ("VPSA"), the undersigned (the "Local Unit") and the other units of local government signatory thereto, Evergreen Investment Management Company LLC, as Investment Manager and Wachovia Bank, N.A., as Depository. You are hereby notified that you are authorized and directed by the Local Unit to pay the following obligation from the Principal Subaccount: NYLIB1/857121/1 B-1 1. The item number of such payment: __ 2. The amount[s] to be paid: $ 3. Purpose by general classification for incurred: which such obligation was 4. The date(s) the expenditure(s) was/were made: To reimburse the Local Unit for costs of the Local Unit through ,20_ as follows: __ School paid by the Dated 5. A copy of each supporting [invoice, work order, statement] for which reimbursement is to be made is attached hereto. 6. The obligation[s] in the stated amount[s] have been paid, and each item thereof is a proper charge against the proceeds of the Local Unit's Proceeds Account and has not been the subject of a previous withdrawal fi.om the Proceeds Account. 7. All of which is hereby certified. [Name of Local Unit] By: Authorized Local Unit Representative NYLIBI/857121/1 B-2 Virginia Public School Authority 101 North 14th Street Richmond, Virginia 23219 Exhibit C LETTER AGREEMENT November 8, 2001 Re: Custody, Investment, and Disbursement of Proceeds of Local School Bonds Purchased by the Virginia Public School Authority with the Proceeds of Its $ School Financing Bonds (1997 Resolution) Series 2001 B This LETTER AGREEMENT, dated the date shown above (this "Letter Agreement"), is between the Authority and the Inves~nent Manager. All capitalized terms used herein shall have the meaning given to them in Part E of this Letter Agreement or in Section 2 of the Proceeds Agreement to which this Letter Agreement is attached as Exhibit C. With respect to the VPSA's Bonds, the Code requires that an amount equal to the VPSA's Rebate Requirement be paid to the United States Treasury. With respect to each issue of Local School Bonds, the Code requires that an amount equal to the Local Unit's Rebate Requirement be paid to the United States Treasury. Accordingly, VPSA hereby directs the Investment Manager, as provided below, to assist VPSA and each Local Unit to comply with the VPSA's Rebate Requirement and the respective Local Unit's Rebate Requirement. To enable VPSA and the Local Units to fulfill their respective obligations under the Proceeds Agreement and to make such payments, and to enable the Investment Manager to fulfill its obligations under this Letter Agreement, the Investment Manager will prepare, on or before December 1, 2002 and each December 1 thereafter, the Investment Reports for VPSA as of the preceding November 8 and each Local Unit as of the preceding November 8. On the basis of such Investment Reports, VPSA shall cause the Rebate Calculation Agent to prepare the Local Unit Rebate Computation setting forth the Local Unit Rebate Requirement as of each Computation Date for each Local Unit with respect to its issue of Local School Bonds as described in paragraph 3 of Part B hereto. In addition, the Investment Manager will, based on the Rebate Report, transfer, within thirty (30) days after the Computation Date of each Local Unit, fi.om its Principal Subaccount, if necessary, to its Income Subaccount, the amount required so that the amount to the credit of the Income Subaccount of each Local Unit shall equal its Local Unit Rebate Requirement. A. Investment Report With respect to all Nonpurpose Investments acquired during the term of this Letter Agreement with Gross Proceeds of each issue of Local School Bonds, the Investment Manager shall maintain separate Investment Reports for each issue of Local School Bonds. NYLIB1/857121/1 C-1 The Investment Report for each Local Unit shall reflect the investments made with respect to its Proceeds Account. B. Rebate Computation on Local School Bonds VPSA shall compute each Local Unit's Rebate Requirement with respect to its issue of Local School Bonds in accordance with the procedure described below: 1. As of each Computation Date, VPSA shall cause the Rebate Calculation Agent to determine the Future Value of all nonpurpose payments made with respect to the Nonpurpose Investments purchased with or allocated to the Gross Proceeds of the Local School Bonds, as well as any rebate payments made, to such Computation Date in accordance with the requirements of the Treasury Regulations. Unless VPSA shall otherwise direct, transaction costs incurred in acquiring, carrying, selling or redeeming such obligations, shall be accounted for as provided in the Information Statement. 2. As of each Computation Date, VPSA shall cause the Rebate Calculation Agent to determine the Future Value of all nonpurpose receipts received with respect to the Nonpurpose Investments purchased with or allocated to the Gross Proceeds of the Local School Bonds, as well as any rebate payments recovered, to such Computation Date in accordance with the requirements of the Treasury Regulations. 3. As of each Computation Date, VPSA shall subtract the amount computed pursuant to paragraph 1 from the amount computed pursuant to paragraph 2. Such amount shall be the "Local Unit Rebate Requirement" as of the Computation Date. 4. Each of the Local Units has covenanted in Section 17 of the Proceeds Agreement not to charge its general fund or otherwise set aside or earmark funds with which to pay debt service on its Local School Bonds (other than as a budget item) prior to the date of payment thereof to VPSA. 5. Except as provided in Section 9(A)(4) of the Proceeds Agreement, the Local Unit Rebate Requirement may be treated as being met and no rebate computation shall be required with respect to the proceeds of the VPSA's Bonds applied to purchase such Local Unit's Local School Bonds if the VPSA receives the opinions and covenants or certification described in Section 9A of the Proceeds Agreement that a Local Unit meets the requirements of the (a) Six- Month Exception, (b) Eighteen-Month Exception, (c) Small Issuer Exception, or (d) Two-Year Exception, subject to the provisions described below. (a) Six-Month Exception. Notwithstanding the fact that all of the Gross Proceeds of the Local School Bonds are spent within six (6) months of the date of issue and no other Gross Proceeds of the Local School Bonds are anticipated for the remainder of the term of the issue, if Gross Proceeds of the Local School Bonds become available after the end of the initial six-month period, the Local Unit Rebate Requirement shall be computed with respect to such Gross Proceeds in accordance with the procedure described above. (b) Eighteen-Month Exception. Notwithstanding the fact that all of the Gross Proceeds of the Local School Bonds are spent within eighteen (18) months of the date of issue and no other Gross Proceeds of the Local School Bonds are anticipated for the NYL1B 1/857121/1 C-2 remainder of the term of the issue, if Gross Proceeds of the Local School Bonds become available after the end of the initial eighteen-month period, the Local Unit Rebate Requirement shall be computed with respect to such Gross Proceeds in accordance with the procedure described above. (c) Small Issuer Exception. If a Local Unit delivers to VPSA no later than the end of calendar year 2001 (i) the opinion of nationally recognized bond counsel that the Local School Bonds of such Local Unit purchased by VPSA with the proceeds of the VPSA's Bonds will be treated as meeting the requirements of Code Sections 148 (0(2) and (3) pursuant to Code Section 148 (f)(4)(D) and (ii) the Local Unit's covenant that it shall provide for the payment of or reimburse VPSA for its payment of the Local Unit Rebate Requirement in the event that the Local School Bonds of such Local Unit fail to meet all the requirements of the Small Issuer Exception, then no rebate computation shall be made with respect to the proceeds of VPSA's Bonds applied to purchase such Local School Bonds. Although the Local School Bonds of a Local Unit may qualify for the Small Issuer Exception, custody, investment and disbursement of the proceeds of the VPSA's Bonds applied to the purchase of the Local Unit's Local School Bonds shall continue under the Proceeds Agreement, and the Investment Manager shall continue to provide an Investment Report for such Local Unit. [Notwithstanding the foregoing, the Bonds, Bonds, Bonds and Bonds do not qualify for the Eighteen Month Exception or the Two Year Exception. Furthermore, with respect to the amounts on deposit in the Transferred Proceeds Account, Transferred Proceeds Account and Transferred Proceeds Account, such amounts will be taken into account for purposes of computing the Local Unit Rebate Requirement for County, County and County, respectively as applicable, but only if the Note, Note and Note, respectively as applicable, do not qualify for one of the Spending Exceptions or if the Note, Note and Note, respectively as applicable, fail to meet all of the requirements of the Small Issuer Exception.] 6. In addition to the foregoing, no rebate computation shall be required with respect to the proceeds of the VPSA's Bonds applied to purchase a Local Unit's Local School Bonds if a Penalty Election has been made on behalf of the Local Unit with respect to such Local School Bonds. C. Ae_~egate Rebate Computation on Local School Bonds In the event that the Treasury Regulations require that the Local Units' Rebate Requirements be calculated in the aggregate, VPSA shall compute the Aggregate Local Units' Rebate Requirement in accordance with the procedure set forth below. 1. As of each Computation Date, VPSA shall cause the Rebate Calculation Agent to determine the Future Value of all nonpurpose payments made with respect to the Nonpurpose Investments purchased with or allocated to the Gross Proceeds of all of the Local School Bonds in the aggregate (except those qualifying for one of the Rebate Exceptions or those that have NYLIB1/857121/1 C-3 made the Penalty Election), as well as any rebate payments made, to such Computation Date in accordance with the requirements of the Treasury Regulations. 2. As of each Computation Date, VPSA shall cause the Rebate Calculation Agent to determine the Future Value of all nonpurpose receipts received with respect to the Nonpurpose Investments purchased with or allocated to the Gross Proceeds of all of the Local School Bonds in the aggregate (except those qualifying for one of the Rebate Exceptions or those that have made the Penalty Election), as well as any rebate receipts recovered, to such Computation Date in accordance with the requirements of the Treasury Regulations. 3. As of each Computation Date, VPSA shall subtract the amount computed pursuant to paragraph 1 fi.om the amount computed pursuant to paragraph 2. Such amount shall be the "Aggregate Local Units' Rebate Requirement" as of the Computation Date. D. Rebate Payment 1. Upon the calculation of the Local Unit Rebate Requirement for each Local Unit, VPSA shall notify the Investment Manager thereof. The Investment Manager shall promptly charge the Principal Subaccount of a Local Unit to the extent the amount on deposit to the credit of its Income Subaccount is less than its Local Unit Rebate Requirement and credit its Income Subaccount with an amount such that the balance to the credit of the Income Subaccount is equal to such Local Unit Rebate Requirement (taking into account prior amounts credited to the Income Subaccount including investment income thereon). To the extent that the amount on deposit in the Principal Subaccount is insufficient to provide for a deposit to the Income Subaccount such that the balance in the Income Subaccount is equal to the Local Unit Rebate Requirement for the Local Unit, the Investment Manager shall advise VPSA and such Local Unit of the amount of the deficiency so that the Local Unit may promptly transfer to the Depository the amount required pursuant to Section 12 of the Proceeds Agreement. 2. In addition to the computation of the Local Units' Rebate Requirement, VPSA shall calculate its Rebate Requirement with respect to Nonpurpose Investments that were acquired with the Gross Proceeds of the VPSA's Bonds in accordance with the procedures set forth in the Tax Certificate executed by VPSA in connection with the issuance of the VPSA's Bonds. 3. The Local Unit Rebate Requirement for each Local Unit, if a positive number, shall be paid at the direction of VPSA to the United States in installments. Each payment shall be made not later than sixty (60) days after each Computation Date. Each payment must be in an amount not less than the total of ninety percent (90%) of the Local Unit Rebate Requirement for each Local Unit as of each Installment Computation Date. All of the Local Unit Rebate Requirement must be paid to the United States within sixty (60) days after the Final Computation Date. Payment shall be made to the Internal Revenue Service Center, Ogden, Utah 84201 and be accompanied byForm 8038-T. VPSA shall make such payment as required. Investment Reports and records of the determinations made hereunder shall be retained by the Investment Manager and by VPSA, respectively, until six (6) years after the retirement of the last of VPSA's Bonds. NYLIB1/857121/1 C-4 E. Definitions In addition to the words and terms defined in the Proceeds Agreement to which this Letter Agreement is attached as Exhibit C, the following words and terms shall have the following meanings: "Bond Resolution" shall mean the resolution of the Authority adopted on October 23, 1997, as amended and restated on October 5, 1998, and as supplemented. "Fair Market Price" shall mean the purchase price and disposition price of a Nonpurpose Investment. Any Nonpurpose Investment purchased must be purchased at the Fair Market Price. An investment that is not of a type traded on an established market, within the meaning of Section 1273 of the Code, is rebuttably presumed to be acquired or disposed of at a price that is not equal to its fair market value. Accordingly, a premium may not be paid to adjust the yield on an investment, a lower interest rate than is usually paid may not adjust the yield on an investment and no transaction may result in a smaller profit or larger loss than would have resulted if the transaction had been at arm's-length and had the yield with respect to the Bonds not been relevant to either party. Pursuant to Treasury Regulation Section 1.148-5(d), the following are safe harbors for establishing the Fair Market Price of certificates of deposit and guaranteed investment contracts: (i) Certificate of Deposit. A certificate of deposit with a fixed interest rate, fixed payment schedule and a substantial penalty for early withdrawal will be deemed purchased for fair market value if the yield on the certificate of deposit is not less than (i) the yield on reasonably comparable direct obligations of the United States and (ii) the highest yield published or posted by the provider to be currently available from the provider on reasonably comparable certificates offered to the public. See Section 1.148- 5(d)(6)(ii) of the Treasury Regulations. (ii) Investment Agreement. Investments pursuant to a guaranteed investment contract will be regarded as being made at fair market value if NYLIB1/857121/1 (a) A bona fide solicitation for a guaranteed investment contract is made that satisfies all of the following requirements: (A) the bid specifications are in writing and are timely forwarded to potential providers, (B) the bid specifications include all material terms that may directly or indirectly affect the yield or the cost of the guaranteed investment contract, (C) the bid specifications include a statement notifying potential providers that submission of a bid is a representation that the potential provider did not consult with any other potential provider about its bid, that the bid was determined without regard to any other formal or informal agreement that the potential provider has with the Issuer or any other person (whether or not in connection with the issuance of the Bonds), and that the bid is not being submitted solely as a courtesy to the Issuer or any other person for purposes of satisfying the requirements contained in Section 1.148- 5(d)(6)(iii)(B)(1) or (2) of the Treasury Regulations, (D) the terms of the bid specifications are commercially reasonable in that there is a legitimate business purpose for each term other than to increase the purchase price or reduce the yield of the guaranteed investment contracts, (E) the terms of the solicitation take into C-5 account the reasonably expected deposit and drawdown schedule for the amounts to be invested, (F) all potential providers have an equal opportunity to bid and no potential provider is given the opportunity to review other bids (i.e., a "last look") before providing a bid, (G) in those cases where the Issuer engages a bidding agent to conduct the bidding, such agent did not bid to provide the investment, and (H) at least three reasonably competitive providers are solicited for bids. A "reasonably competitive provider" is a provider that has an established industry reputation as a competitive provider of investments of the same type as such guaranteed investment contract; (b) At least three bona fide bids on the guaranteed investment contract are received from providers that have no material financial interest in the Bonds. The following are deemed to have a material financial interest in the Bonds: (A) the lead purchaser in a negotiated underwriting transaction until 15 days after the issue date of the issue, (B) any entity acting as a financial advisor with respect to the purchase of the guaranteed investment contract at the time the bid specifications are forwarded to potential providers, and (C) a provider that is a related party to a provider that has a material financial interest in the execution and delivery of the Bonds; (c) At least one of the three bids received is from a reasonably competitive provider, as described above; (d) The winning bidder provides a certificate that (A) lists the recipients, amounts and purposes of any brokerage fee, placement fee, commission or administrative costs that it is paying (or expects to pay) to third parties in connection with supplying the guaranteed investment contract, (B) states that the yield on the guaranteed investment contract is not less than the yield available from the provider on reasonably comparable guaranteed investment contracts offered to other persons from sources of funds other than gross proceeds of tax- exempt obligations, and (C) in those agreements wherein the Issuer deposits amounts (other than amounts deposited in debt service funds or reasonably required reserve or replacement funds) states that the Issuer's draw-down schedule was a significant factor in determining the terms of the guaranteed investment contract; (e) The highest yielding guaranteed investment contract for which a bona fide bid was made is purchased (determined net of broker's fees, if any); and (f) The following records are retained with the bond documents until three years after the last outstanding Bond is redeemed: (A) a copy of the guaranteed investment contract, (B) the receipt or other record amount actually paid for the guaranteed investment contract, including a record of any administrative costs paid and the certification under subsection (d) hereof, (C) for each bid that is submitted, the name of the person and entity submitting the bid, the time and date of the bid, and the bid results, and (D) the bid solicitation form and, if the terms of the guaranteed investment contract deviated from the bid solicitation form or a NYLIBI/857121/1 C-6 submitted bid is modified, a brief statement explaining the deviation and stating the purpose for the deviation. "Future Value" of a payment or receipt at the end of any period is determined using the economic accrual method and equals the value of that payment or receipt when it is paid or received (or treated as paid or received), plus interest assumed to be earned and compounded over the period at a rate equal to the Yield on the VPSA's Bonds, using the same compounding interval and financial conventions used to compute that yield. "Gross Proceeds" shall have the meaning ascribed to such term in Section 148 of the Code and shall mean: (a) amounts actually received or constructively received by VPSA from the sale of the VPSA's Bonds and the amounts actually or constructively received by the Local Units from the sale of the Local School Bonds, other than any interest accruing on the VPSA's Bonds from the dated date to the issue date of such bonds; (b) amounts treated as Transferred Proceeds (as defined in Treasury Regulations Section 1.148-9) of the VPSA's Bonds or the Local School Bonds, if any; (c) amounts that are reasonably expected to be or are in fact used to pay debt service on the Bonds including amounts in the sinking fund portion of the 1997 Income Fund under the Bond Resolution and the 1997 Sinking Fund under the Bond Resolution; (d) securities or obligations pledged by the VPSA or Local Unit as security for payment of debt service with respect to the VPSA's Bonds or the Local School Bonds; (e) amounts received with respect to any investments acquired with Gross Proceeds for the purpose of carrying out the governmental purpose for which the VPSA's Bonds or the Local School Bonds were issued, including the Local School Bonds, except that such amounts shall not include amounts, if any, that are properly allocable to qualified administrative costs recoverable under Treasury Regulation Section 1.148-5(e) or to the higher yield permitted under Treasury Regulation Section 1.148-2(d) or Section 143(g) of the Code; (f) amounts treated as "replacement proceeds" of the VPSA's Bonds or the Local School Bonds within the meaning of section 1.148-1(c) of the Treasury Regulations; (g) any funds that are part of a reserve or replacement fund for the VPSA Bonds or Local School Bonds; and (h) amounts received as a result of investing any Gross Proceeds. NYLIB1/857121/I C-7 Gross Proceeds shall include amounts that are on deposit in the Income Subaccount to the extent that such amounts are derived from Gross Proceeds of the VPSA's Bonds or the Local School Bonds. The determination of whether an amount is included within this definition shall be made without regard to whether the amount is credited to any fund or account established under the Bond Resolution, or whether the amount is subject to the pledge of the Bond Resolution. For purposes of subsection (d) above, an amount is pledged to pay principal or interest with respect to VPSA's Bonds or Local School Bonds if there is a reasonable assurance that the amount will be available for such purposes in the event that the VPSA or Local Unit encounters financial difficulties. An amount can be indirectly pledged to pay principal or interest with respect to VPSA's Bonds or Local School Bonds if it is pledged to a guarantor of either or both such bonds. An amount may be "negatively" pledged to pay principal or interest with respect to VPSA's Bonds or Local School Bonds if it is held under an agreement to maintain the amount at a particular level for the direct or indirect benefit of the holders of the bonds or a guarantor of the bonds. An amount is not negatively pledged however if (i) VPSA or the Local Units may grant rights in the amount that are superior to the rights of the holders of the bonds or a guarantor of the bonds, or (ii) the amount does not exceed reasonable needs for which it is maintained, the required level is tested no more frequently than every 6 months, and the amount may be spent without any substantial restriction other than a requirement to replenish the amount by the next testing date. If a decision is made to apply any insurance or condemnation proceeds to the redemption of VPSA's Bonds or Local School Bonds instead of using such proceeds for repair or replacement, any such proceeds become Gross Proceeds on the date of such a decision. The definition of Gross Proceeds has been set out in full for the sake of completeness. With respect to each Local School Bond, all of the Gross Proceeds are on deposit in such Local Unit's Proceeds Account except to the extent that the Local School Bonds may be part of a composite issue under Treasury Regulation §1.150-1(c), or the Local Unit may have retained Transferred Proceeds. With respect to the VPSA's Bonds, all of its Gross Proceeds are the total of the amounts on deposit in the Proceeds Accounts of the Local Units, except as provided above, and the amounts on deposit in the sinking fund portion of its 1997 Income Fund under the Bond Resolution and the 1997 Sinking Fund under the Bond Resolution. "Investment Report" shall mean the record of investment activity maintained by the Investment Manager with respect to the investment property and the Local Units, as described in the Letter of Instructions to the Investment Manager from the Treasury Board of the Commonwealth of Virginia dated [May 1, 2000]. "Local Unit's Rebate Requirement" shall mean the sum of (i) the excess of (A) the aggregate amount earned on all Nonpurpose Investments acquired with the Gross Proceeds of the Local School Bonds over (B) the amount that would have been eamed if the Nonpurpose Investments had a Yield equal to the VPSA's Bond plus (ii) any income attributable to the excess described in clause (i). "Nonpurpose Investments" shall mean any security, obligations, annuity contract or any other investment-type property (as such term is defined in Section 1.148-1(b) of the Treasury NYLIB1/857121/1 C-8 Regulations) that is not acquired to carry out the governmental purpose of the VPSA's Bonds or the Local School Bonds. Nonpurpose Investments shall not include Tax-Exempt Investments. Any Nonpurpose Investments shall be purchased by the Investment Manager only if the purchase price of the Nonpurpose Investment is the Fair Market Price. "Rebate Calculation Agent" shall mean that accounting firm with a favorable national reputation in the field of the calculation of amounts subject to rebate to the United States under Section 148(0 of the Code and the Temporary Regulations that has been appointed under Section 9.2 of the Contract or by VPSA. "Tax-Exempt Investments" shall include: (i) obligations the interest on which is excludable from gross income for federal income tax purposes, and not treated as an item of tax preference under Section 57(a)(5)(C) of the Code, (ii) stock in a regulated investment company to the extent that at least 95% of the income to the holder of the interest is excludable from gross income under Section 103 of the Code, and (iii) certificates of indebtedness issued by the United States Treasury pursuant to Demand Deposit State and Local Government Series program described in 31 CFR part 344 ("SLGs"). "Treasury Regulations" shall mean the Treasury Regulations Sections 1.148-0 through 1.148-11, 1.149(b)-1, 1.149(d)-1, 1.149(e)-1, 1.149(g)-1, Section 1.150-1 and Section 1.150-2, as amended from time to time hereafter, and other regulations promulgated under Section 148 of the Code. "VPSA's Rebate Requirement" shall mean the sum of (i) the excess of (A) the aggregate amount earned on all Nonpurpose Investments acquired with the Gross Proceeds of VPSA's Bonds over (B) the amount that would have been earned if the Nonpurpose Investments had a Yield equal to VPSA's Bond Yield plus (ii) any income attributable to the excess described in clause (i). "Yield", for purposes of this Letter Agreement, shall be calculated pursuant to the Treasury Regulations by means of an actuarial method of yield calculation whereby "yield" means that discount rate which, when used in computing the present value of all the unconditionally payable payments of principal and interest and all the payments for a qualified guarantee paid and to be paid with respect to the bond, produces an amount equal to the issue price of the bond. For purposes of this Letter Agreement, the Yield on VPSA's Bonds is [ ]%. The Yield on investments must be computed by the use of the same frequency interval of compounding interest as is used in computing the Yield on the VPSA's Bonds and the Local School Bonds. NYLIB1/857121/1 C-9 F. Amendments In order to comply with the covenants by VPSA and each of the Local Units regarding compliance with the requirements of the Code and the exclusion fi.om federal income taxation of the interest paid and to be paid on the Local School Bonds and VPSA's Bonds, the procedures described in this Letter Agreement may be modified as necessary, based on the advice of counsel, to comply with rulings, regulations, legislation or judicial decisions as may be applicable to such bonds. Very truly yours, VIRGINIA PUBLIC SCHOOL AUTHORITY By: Salne: Title: Richard A. Davis Assistant Secretary and Assistant Treasurer Accepted: Evergreen Investment Management Company LLC By: Name: A1 Samper Title: Senior Vice President NYLIB1/857121/1 C-10 Exhibit D AUTHORIZED REPRESENTATIVES The following are the Authorized Representatives of Virginia Public School Authority, Wachovia Bank, N.A. and Evergreen Investment Management Company LLC: VIRGINIA PUBLIC SCHOOL AUTHORITY: Name Richard A. Davis Dora D. Fazzini Title Assistant Secretary and Assistant Treasurer Assistant Secretary and Assistant Treasurer Specimen Signature SalTle Anthony J. Conte WACHOVIA BANK, N.A.: Title Senior Vice President Specimen Signature EVERGREEN INVESTMENT MANAGEMENT COMPANY LLC: Name A1 Samper Title Senior Vice President Specimen Signature NYLIB1/857121/1 D-1 EXHIBIT A (FORM OF TEMPORARY BOND) NO. TS-1 UNITED STATES OF AMERICA COMMONWEALTH OF VIRGINIA CITY OF ROANOKE General Obligation School Bond Series 2001-A The CITY OF ROANOKE, VIRGINIA (the "City"), for value received, hereby acknowledges itself indebted and promises to pay to the VIRGINIA PUBLIC SCHOOL AUTHORITY the principal amount of DOLLARS ($ ), in annual installments in the amounts set forth on Schedule I attached hereto payable on July 15, 2002 and annually on July 15 thereafter to and including July 15, 2021 (each a "Principal Payment Date"), together with interest from the date of this Bond on the unpaid installments, payable semi-annually on January 15 and July 15 of each year, commencing on July 15, 2002 (each an "Interest Payment Date"; together with any Principal Payment Date, a "Payment Date"), at the rates per annum set forth on Schedule I attached hereto. Both principal of and interest on this Bond are payable in lawful money of the United States of America. For as long as the Virginia Public School Authority is the registered owner of this Bond, SunTrust Bank, Richmond, Virginia, as bond registrar (the "Bond Registrar"), shall make all payments of principal, premium, if any, and interest on this Bond, without the presentation or surrender hereof, to the Virginia Public School Authority, in immediately available funds at or before 11:00 a.m. on the applicable Payment Date or date fixed for prepayment or redemption. If a Payment Date or date fixed for prepayment or {RKE#0718028.DOC-1} A-! redemption is not a business day for banks in the Commonwealth of Virginia or for the Commonwealth of Virginia, then the payment of principal, premium, if any, or interest on this Bond shall be made in immediately available funds at or before 11:00 a.m. on the business day next preceding the scheduled Payment Date or date fixed for prepayment or redemption. Upon receipt by the registered owner of this Bond of said payments of principal, premium, if any, and interest, written acknowledgment of the receipt thereof shall be given promptly to the Bond Registrar, and the City shall be fully discharged of its obligation on this Bond to the extent of the payment so made. Upon final payment, this Bond shall be surrendered to the Bond Registrar for cancellation. The full faith and credit of the City are irrevocably pledged for the payment of the principal of and the premium, if any, and interest on this Bond. The resolution adopted by the City Council authorizing the issuance of the Bonds provides, and Section 15.2-2624, Code of Virginia 1950, as amended, requires, that there shall be levied and collected an annual tax upon all taxable property in the City subject to local taxation sufficient to provide for the payment of the principal, premium, if any, and interest on this Bond as the same shall become due which tax shall be without limitation as to rate or amount and shall be in addition to all other taxes authorized to be levied in the City to the extent other funds of the City are not lawfully available and appropriated for such purpose. This Bond is duly authorized and issued in compliance with and pursuant to the Constitution and laws of the Commonwealth of Virginia, including the Public Finance Act of 1991, Chapter 26, Title 15.2, Code of Virginia 1950, as amended, and resolutions duly adopted by the City Council and the School Board of the City to provide funds for capital projects for school purposes. This Bond may be exchanged without cost, on twenty (20) days written notice from the Virginia Public School Authority, at the office of the Bond Registrar on one or more occasions for two or more temporary bonds or definitive bonds in fully registered form in denominations of $5,000 and whole {RKE#0718028.DOC-1} A-2 multiples thereof, and; in any case, having an equal aggregate principal amount having maturities and bearing interest at rates corresponding to the maturities of and the interest rates on the installments of principal of this Bond then unpaid. This Bond is registered in the name of the Virginia Public School Authority on the books of the City kept by the Bond Registrar, and the transfer of this Bond may be effected by the registered owner of this Bond only upon due execution of an assignment by such registered owner. Upon receipt of such assignment and the surrender of this Bond, the Bond Registrar shall exchange this Bond for definitive Bonds as hereinabove provided, such definitive Bonds to be registered on such registration books in the name of the assignee or assignees named in such assignment. The principal installments of this Bond are not subject to redemption or prepayment. All acts, conditions and things required by the Constitution and laws of the Commonwealth of Virginia to happen, exist or be performed precedent to and in the issuance of this Bond have happened, exist and have been performed in due time, form and manner as so required, and this Bond, together with all other indebtedness of the City, is within every debt and other limit prescribed by the Constitution and laws of the Commonwealth of Virginia. {RKE#0718028.DOC-1} A-3 IN WITNESS WHEREOF, the City Council of the City of Roanoke, Virginia has caused this Bond to be issued in the name of the City of Roanoke, Virginia, to be signed by its Mayor or Vice-Mayor, its seal to be affixed hereto and attested by the signature of its Clerk or any of its Deputy Clerks, and this Bond to be dated November __, 2001. CITY OF ROANOKE, VIRGINIA (SEAL) Mayor, City of Roanoke, Virginia ATTEST: Clerk, City of Roanoke, Virginia {RKE#0718028.DOC-1} A-4 ASSIGNMENT FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE) PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE: the within Bond and irrevocably constitutes and appoints attorney to exchange said Bond for definitive bonds in lieu of which this Bond is issued and to register the transfer of such definitive bonds on the books kept for registration thereof, with full power of substitution in the premises. Date: Registered Owner Signature Guaranteed: (NOTICE: Signature(s) must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Bond Registrar which requirements will include Membership or participation in STAMP or such other "signature guarantee program" as may be determined by the Bond Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. (NOTICE: The signature above must correspond with the name of the Registered Owner as it appears on the front of this Bond in every particular, without alteration or change.) {RKE#0718028.DOC-1} A-5 VPSA Loan SCHEDULE I (FAIRVIEW) __ Principal Rate Interest Total Fiscal Total 7115/02 1/15/03 7/1 5/O3 1115/04 7/1 5/04 1/15/05 7/1 5/05 1/15/06 7115106 1115/07 7/1 5/07 1/15/08 7/15/08 1/15/09 7115/09 1/15110 7115/10 1t15111 7115/11 1115112 7/15/12 1115tl 3 711 5/13 1/15114 7/15/14 1115115 7115/15 1115/16 7115/16 1115117 7115/17 1/15/18 7115/18 1/15119 7/15119 1/15~2O 7/15/20 1/15/21 7115/21 1115t22 7/15122 130,037.00 130,154.00 129,987.00 129,813.00 129,631.00 129,442.00 129,245.00 129,040.00 128,892.00 128,870.00 129,011.00 129,324.00 .129,783.00 130,398.00 131,175.00 132,093.00 133,124.00 134,276.00 135,521.00 136,829.00 4.100% 0.000% 4.100% 0.000% 4.100% 0.000% 4.100% 0.000% 4.100% 0.O00% 4.100% O.000% 4.100% 0.000% 4.100% 0.000% 4.200% 0.000% 4.300% O.O00% 4.450% 0.000% 4.550% 0.000% 4.650% 0.000% 4.750% 0.000% 4.850% 0.000% 4.900% 0.000% 4.950% 0.000% 5.0o0% 0.000% 5.000% 0.000% 5.0OO% 0.000% 80,340.67 55,882.10 55,882.10 53,213.95 53 213.95 50 549.21 5O 549.21 47 888.05 47 888.05 45 230.61 45 230.81 42 577.05 42577.05 39 927.53 39 927.53 37 282.21 37 282.21 34,575.48 34,575.48 31,804.77 31,804.77 28,934.28 28,934.28 25,992.16 25,992.16 22,974.7O 22,974.70 19,877.75 19,877.75 16,696.75 16,696.75 13,460.47 13,460.47 10,165.65 10,165.65 6,808.75 6,808.75 3,42O.73 3,420.73 0.00 $210,377.67 55,882.10 186,036.10 53,213.95 183,200.95 50,549.21 180,362~21 47,888.05 177 519.05 45 230.61 174 672.61 42 577.05 171 822.05 39 927.53 168 967.53 37 282.21 166,174.21 34,575.48 163,445.48 31,804.77 160,815.77 28,934.28 158,258.28 25,992.16 155,775.16 22,974.70 153,372.70 19,877.75 151,052.75 16,696.75 148,789.75 13,460.47 146,584.47 10,165.65 144,441.65 6,808.75 142,329.75 3,420.73 140,249.73 0.00 0.00 266,259.77 0.00 239,250.05 0.00 233,750.16 0.00 228,250.26 0.00 222,749.66 0.00 217,249.66 0.00 211,749.58 0.00 206,249.73 0.00 200,74g.68 0.00 lg5,250.25 0.00 18g,750.05 0.00 184,250.43 0.00 178,749.86 0.00 173,250.45 0.00 167,749.50 0.00 162,250.22 0.00 156,750.12 0.00 151,250.40 0.00 145,750.48 0.00 140,249.73 0.00 Totals 2,616,645.00 ,$ 1,254,864.98 $3,871,50.9.98 [FAIRVIEW] VIRGINIA PUBLIC SCHOOL AUTHORITY BOND SALE AGREEMENT dated as of October 9, 2001 Name of Jurisdiction (the "Local Unit"): City of Roanoke, Virginia Sale Date: Not earlier than October 15,2001, nor later than October 31,2001 Closing Date: On or about November 15, 2001 Principal Amount (Requested): $2,750,000 Amortization Period: Up to Twenty (20) Years 1. The Virginia Public School Authority ("VPSA") hereby offers to purchase your general obligation school bonds at a price, determined by the VPSA to be fair and accepted by you, that is not less than 98% of par and not more than 103% of par (105% ifa 10-year amortization is involved) in the Principal Amount set forth above (as authorized by your bond resolution) from the proceeds of the VPSA's bonds, the sale of which is scheduled to take place on the Sale Date. In the event that the purchase price determined by VPSA would exceed the upper limit of 103% or 105% you, at the request of VPSA; will lower the amount of the local school bonds to be issued to provide a purchase price for such bonds and a proceeds amount that is within 103% or 105% of the amount requested pursuant to your application submitted to VPSA. You represent that on or before October 9, 2001, your local governing body will have duly authorized the issuance of your bonds by adopting a resolution in the form attached hereto as Appendix B (the "local resolution") and that your bonds will be in the form set forth in the local resolution. Any changes that you or your counsel wish to make to the form of the local resolution and/or your bonds must be approved by the VPSA prior to adoption of the local resolution by your local governing body. You hereby covenant that you will comply with and carry out all of the provisions of the Continuing Disclosure Agreement in the form attached hereto as Appendix E, which agreement is hereby incorporated by reference herein and expressly made a part hereof for all purposes. The VPSA has defined a Material Obligated Person ("MOP") for purposes of the Continuing Disclosure Agreement as any Local Issuer the principal amount of whose local school bonds pledged under VPSA's 1997 Resolution compromise more than 10% of the total principal amount of all outstanding 1997 Resolution bonds. MOP status will be determined by adding the principal amount of your local school bonds to be sold to the VPSA and the principal amount of your local bonds previously sold to the VPSA and currently pledged under VPSA's 1997 Resolution and measuring the total against 10% of the face value of all {RKE#0717548.DOC-1} outstanding bonds under VPSA's 1997 Resolution. If you are or may be a MOP, the VPSA may require that you file all the information described in the following paragraph prior to VPSA's mailing its Preliminary Official Statement, currently scheduled for October 12, 2001. You acknowledge that if you are, or in the sole judgment of VPSA may be, a MOP following the issuance of your local school bonds that are the subject of this Bond Sale Agreement, the VPSA will include by specific reference in its Preliminary Official Statements and final Official Statements (for this sale and, if you remain a MOP or become a MOP again after ceasing to be a MOP, for applicable future sales) the information respecting you ("Your Information") that is on file with the Nationally Recognized Municipal Securities Information Repositories or their respective successors CNRMSIRs") and the Municipal Securities Rulemaking Board or its successors CMSRB"). Accordingly, if it appears that you will be a MOP (i) following the delivery of your local school bonds to the VPSA in connection with this sale, or (ii) during the course of any future sale, whether or not you are a participant in such sale, you hereby represent and covenant to the VPSA that you will file such additional information, if any, as is required so that Your Information, as of each of (i) the date of the VPSA's applicable Preliminary Official Statement (in the case of this sale, expected to be October 12, 2001), (ii) the date of the VPSA's applicable final Official Statement (in the case of this sale, expected to be October 24, 2001) and (iii) the date of delivery of the applicable VPSA bonds (in the case of this sale, expected to be November 15, 2001), will be tree and correct and will not contain any untrue statement of a material fact or omit to state a material fact which should be included in Your Information for the purpose for which it has been filed or which is necessary to make the statements contained in such information, in light of the circumstances under which they were made, not misleading. You further agree to furnish to the VPSA a copy of all filings you make with NRMSIRs and the MSRB subsequent to the date of this Agreement. Such copy will be furnished to the VPSA on the same day that any such filing is made. The VPSA will advise you within 60 days of the end of each fiscal year if you were a MOP as of the end of such fiscal year, Upon written request, the VPSA will also advise you of your status as a MOP as of any other date. You hereby covenant that you will provide the certificate described in clause (e) of Section 4 below if VPSA includes Your Information by specific reference in its disclosure documents in connection with any furore sale, whether or not you are a participant in such sale. VPSA's commitment to purchase your bonds is contingent upon (i) VPSA's receipt on the Closing Date of (a) your bonds which shall include and otherwise meet the Standard Terms and Conditions contained in Appendix A hereto, (b) certified copies of the local resolution (see Appendix B attached hereto), (c) an executed agreement, among VPSA, you and the other local units simultaneously selling their bonds to VPSA, the depository and the investment manager for the State Non-Arbitrage Program ("SNAP"), providing for the custody, investment and disbursement of the proceeds of your bonds and the other general obligation school bonds, and the payment by you and the other local units of the allocable, associated costs of compliance with the Intemal Revenue Code of 1986, as amended, and any costs incurred in connection with your participation in SNAP (the "Proceeds Agreement"), (d) an executed copy of the Use of Proceeds Certificate in the form attached hereto as Appendix C, (e) if the VPSA has included by specific reference Your Information into the VPSA Preliminary and final {RKE#0717548.DOC-1} Official Statement, your certificate dated the date of the delivery of the VPSA's bonds to the effect that (i) Your Information was as of the date of the VPSA's Preliminary and final Official Statements, and is as of the date of the certificate, tree and correct and did not and does not contain an untrue statement of a material fact or omit to state a material fact which should be included in Your Information for the purpose for which it has been filed or which is necessary to make the statements contained in such information, in light of the circumstances under which they were made, not misleading, and (ii) you have complied with your undertakings regarding the amendments adopted on November 10, 1994 to Rule 15c2-12 under the Securities Exchange Act of 1934, as amended, (f) an approving legal opinion fi.om your bond counsel in form satisfactory to VPSA as to the validity of the bonds and the exclusion from gross income for federal and Virginia income tax purposes of the interest on your bonds, the conformity of the terms and provisions of your bonds to the requirements of this Bond Sale Agreement including the appendices attached hereto, and the due authorization, execution and delivery of this Bond Sale Agreement, Continuing Disclosure Agreement and the Proceeds Agreement, and the validity of the Continuing Disclosure Agreement and the Proceeds Agreement, (g) a transcript of the other customary closing documents not listed above, (h) the proceeds of VPSA's bonds, (ii) if you will be using the proceeds of your bonds to retire a bond anticipation note, certificate of participation or other form of interim financing (the "Interim Security"), receipt by VPSA of (A) an opinion of your bond counsel that, as of the Closing Date, the Interim Security will be defeased according to the provisions of the instrument authorizing the Interim Security or it will no longer be outstanding (in rendering such opinion bond counsel may rely on a letter or certificate of an accounting or financial professional as to any mathematical computations necessary for the basis for such opinion) and (B) an executed copy of the escrow deposit agreement/letter of instruction providing for the retirement of the Interim Security and (iii) your compliance with the terms of this agreement. Two complete transcripts (one original) of the documents listed above shall be provided by your counsel to the VPSA on the Closing Date or, with VPSA's permission, as soon as practicable thereafter but in no event more than thirty (30) business days after the Closing Date. This Bond Sale Agreement shall take effect on October 9, 2001. Virginia Public School Authority By:. Authorized VPSA Representative City of Roanoke, Virginia By: Name: Darlene L. Burcham Title: City Manager {RKE#0717548.DOC-l} (For information only; not part of the Bond Sale Agreement.) Please have the presiding officer, or other specifically designated agent, of your governing body execute 2 (two) copies of this Bond Sale Agreement and return them, along with the tax questionnaire attached hereto as Appendix D, no later than close of business on October 9, 2001, Richard A. Davis, Public Finance Manager, Virginia Public School Authority, P. O. Box 1879, Richmond, Virginia 23218-1879 or by hand or courier service, James Monroe Building- 3rd Floor, 101 iN. 14th Street, Richmond, Virginia 23219. If your governing body or bond counsel requires more than one originally signed Bond Sale Agreement, please send the appropriate number; all but one will be remmed at closing. {RKE#0717548.DOC-1 } APPENDIX A to the Bond Sale Agreement STANDARD TERMS AND CONDITIONS Described below are terms of the local school bonds which must be embodied in your bond resolution and bond form and other conditions which must be met in order for VPSA to purchase your local school bonds on the Closing Date. VPSA will not purchase local school bonds unless and until such terms are present in the related bond resolution and bond form adopted by your governing body and such conditions are met. Interest and Princinal Pavmentq Your bonds will bear interest from the Closing Date~ set forth in the Bond Sale Agreement and will mature on July 15 of the years and in the amounts as established by VPSA. Your bonds will bear interest payable in installments due semiannually on January 15 and July 15. The first interest installment will be payable on July 15, 2002 and the first principal installment will be payable on July 15, 2002. Your bonds will bear interest at rates 10 basis points (0.10%) above the actual rates on VPSA's bonds with corresponding principal payment dates. Payment For so long as the VPSA is the registered owner of your bonds, (i) the paying agent and bond registrar therefor shall be a bank or mast company qualified to serve as such, and If VPSA does not purchase your local school bonds on the Closing Date due to your fault, VPSA will invest, in demand or overnight investments, the amount of its bond proceeds to be used to purchase your local school bonds. If you cure your failure to deliver your local school bonds within the sixty (60) day period following the Closing Date, the VPSA will purchase your local school bonds and your bonds will bear interest from the date of delivery and payment or other date satisfactory to the VPSA. You will, however, be required to pay to VPSA at your actual closing an amount equal to the positive difference, if any, between the amount of interest that would have accrued on your local school bonds from the Closing Date to your actual closing date and the amount of interest income VPSA was able to earn, during such period, from the investment of its bond proceeds pending their use to purchase your bonds. {RKE#0716210.DOC-1 } G:\SHARED~DEBT~VPSAXlSSUEX2001 bXAPXA2001 b September 26, 2001 (ii) all payments of principal, premium, if any, and interest shall be made in funds that shall be immediately available to the VPSA on or before 11:00 A.M. on the applicable interest or principal payment date, or date fixed for prepayment or redemption, or if such date is not a business day for banks in Virginia or for the Commonwealth, then on or before 11:00 A.M. on the business day preceding such scheduled due date. Overdue payments of principal and, to the extent permitted by law, interest shall bear interest at the applicable interest rates on your bonds. Prenavment or RedemntJnn [Note: Local School Bonds purchased by VPSA as part of the 2001 Interest Rate Subsidy Program are not subject to redemption or prepayment. The following section applies to non-subsidized applicants only.] Bonds will be subject to redemption at the option of your governing body, subject to the consent of the VPSA or other registered owner. Your bond resolution shall provide for prepayment or redemption as follows: The bonds maturing after July 15, 2011 are subject to optional prepayment or redemption prior to maturity by [the issuer], from any available moneys, in whole or in part, on any date on or after July 15, 2011, at the following prepayment or redemption prices on the following prepayment or redemption dates, plus accrued interest to the date fixed for prepayment or redemption: July 15,2011 through July 14, 2012 July 15, 2012 through July 14, 2013 July 15, 2013 and thereafter 102% 101 100 Provided, however, that the bonds shall not be subject to prepayment or redemption prior to their respective maturities except with the prior written consent of the registered owner. Notice of any such prepayment or redemption shall be given to the registered owner by registered mail at least 60, but not more than 90, days prior to the date fixed for prepayment or redemption; {RKE#0716210.DOC-I } G:~SHARED~DEBTXVPSA~ISS UE~2001 bLa~PXA2001 b September 26, 2001 ~ecnritv Your bonds must constitute valid and binding general obligations for the payment of which the full faith and credit of the local unit are irrevocably pledged, and all taxable property within the boundaries of the local unit must be subject to the levy of an ~ tax, over and above all other taxes and without limitation as to rate or amount, for the payment of the principal of, and premium, if any, and interest on the bonds to the extent other funds of the local unit are not lawfully available and appropriated for such purpose. Tax Matters You shall complete the Questionnaire attached hereto as Appendix D to the Bond Sale Agreement and send along with the Bond Sale Agreement no later than the close of business on October 9, 2001 to Richard A. Davis, Public Finance Manager, Virginia Public School Authority, P.O. Box 1879, Richmond, Virginia 23218-1879. If delivered by hand to, Richard A. Davis, Public Finance Manager, Virginia Public School Authority, James Monroe Building- 3rd Floor, 101 N. 14th Street, Richmond, Virginia 23219. You shall execute the Use of Proceeds Certificate in the form provided in Appendix C attached to the Bond Sale Agreement for receipt by the VPSA at least three business days prior to the Closing Date.2 No Comnosite |,q.ql]e You will covenant not to sell or deliver, without VPSA's consent, any general obligation bonds which are part of the same common plan of fmancing (and payable from the same source of funds) as your local school bonds, beginning, in the ease of a sale, 15 days in advance of and ending 15 days after the Sale Date. Reaue.qt and Con.qent nfCm]ntv School Rnard3 Before the governing body of a County adopts the bond resolution, the County School Board must first request, by resolution, the governing body to take such action. The County School VPSA requires that the Use of Proceeds Certificate be executed separately from the tax certificates prepared by your bond counsel. Your bond counsel may also prepare one or more tax certificates that contain some information found in the Use of Proceeds Certificate in addition to information such as your reasonable expectations as to meeting the requirements to any of the rebate exceptions. 3 Not applicable to cities and towns. {RKE#0716210.DOC-I} G:~SHARED~DEBTWPSAkISSUEX2001 bkAPXA2001 b (Section 15. 2-2640, Code of Virginia) September 26, 2001 3 Board must also consent to the issuance of bonds by the County. (See form of resolution in Appendix E attached hereto.) Public l-leaHn~ and Notice Before the final authorization of your issuance of the bonds by the goveming body, the goveming body must hold a public heating on the proposed issue unless the issuance of such bonds has been approved at referendum. The notice of the hearing, meeting the requirements of Section 15.2-2606, Code of Virginia 1950, as amended, must be published once a week for 2 successive weeks (notices at least 7 days apart) in a newspaper published or having general circulation in your locality. The public hearing may not be held less than 6 nor more than 21 days after the date the second notice appears in the newspaper. VPSA will accept delivery of your bonds only in the form of a single, typewritten, temporary bond, in registered form, payable to VPSA. The form of the bond is included as Exhibit A to the resolution in Appendix B to the Bond Sale Agreement. On 20 days written notice from VPSA, you agree to deliver, at your expense, in exchange for the typewritten bond, on one or more occasions, one or more temporary bonds or def'mitive bonds in marketable form and, in any case, in fully registered form in denominations of $5,000 and whole multiples thereof, and having an equal aggregate principal amount, as requested by VPSA. Comprehensive Annual Financial Report Annually for the life of your bonds, you will be required to submit a copy of your locality's Comprehensive Annual Financial Report ("CAFR") or annual audited financial statements to the rating agencies referenced below:. Moody's Investors Service, Inc. Public Finance Department Attention: Kathleen Holt 99 Church Street New York, New York 10007 Fitch, Inc. Governmental Finance Attention: Claire G. Cohen One State Street Plaza New York, New York 10004 {RKE#0716210.DOC-I } G 5SHARED~)EBTWPSA~IS SUEX2001 bLatPXA2001 b September 26, 2001 APPENDIX B to the Bond Sale Agreement [F VmWl Resolution No. RESOLUTION AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $2,750,000 GENERAL OBLIGATION SCHOOL BONDS OF THE CITY OF ROANOKE, VIRGINIA, SERIES 2001-A, TO BE SOLD TO THE VIRGINIA PUBLIC SCHOOL AUTHORITY AND PROVIDING FOR THE FORM AND DETAHJS THEREOF. WHEREAS, in September, 2000, the Commonwealth of Virginia Board of Education (the "Board of Education") placed the application (the "Application") of the School Board of the City of Roanoke, Virginia (the "School Board"), for a loan of $2,200,000 (subsequently amended to $2,750,000) (the "Literary Fund Loan") from the Literary Fund, a permanent trust fund established by the Constitution of Virginia (the "Literary Fund"), for the construction, renovation and expansion of school buildings (the "Project") in the City of Roanoke, Virginia (the "City"), on the First Priority Waiting List; WHEREAS, the Board of Education was to have approved the release of Literary Fund moneys to the School Board and make a commitment to loan such moneys to the School Board (the "Commitment") within one (1) year of placement of the Application on the First Priority Waiting List upon receipt of the Literary Fund of an unencumbered sum available at least equal to the amount of the Application and the approval, by the Board of Education, of the Application as having met all conditions for a loan from the Literary Fund; W~IEREAS, the Board of Education was thereafter to have given advances on the amount of the Commitment for the Literary Fund Loan to the School Board, as construction or renovation of the Project progressed, in exchange for temporary notes from the School Board to the Literary Fund (the "Temporary Notes") for the amounts so advanced; WHEREAS, aiter the completion of the Project and the advance of the total amount of the Commitment, the Temporary Notes were to have been consolidated into a permanent loan note of the School Board to the Literary Fund (the "Literary Fund Obligation") which was to evidence the obligation of the School Board to repay the Literary Fund Loan; WHEREAS, the Literary Fund Obligation was to have borne interest at four percent (4%) per annum and mature in annual installments for a period of twenty (20) years; WHEREAS, in connection with the 2001 Interest Rate Subsidy Program (the "Program"), the Virginia Public School Authority (the "VPSA") has offered to purchase general obligation school bonds of the City, and the Board of Education has offered to pay, to the City, a lump sum cash payment (the "Lump Sum Cash Payment") equal to the sum of (i) net present value difference, determined on the date on which the VPSA sells its bonds, between the weighted average interest rate that the general obligation school bonds of the City will bear upon sale to the VPSA and the interest rate that the Literary Fund Obligation would have borne plus (ii) an allowance for the costs of issuing such bonds of the City (the "Issuance Expense Allowance"); {RKE#0717563.DOC-1} B-1 WHEREAS, the City Council (the "Council") of the City has determined that it is necessary and expedient to borrow not to exceed $2,750,000 and to issue its general obligation school bonds for the purpose of financing certain capital projects for school purposes; and WHEREAS, the City held a public hearing, duly noticed, on September 17, 2001, on the issuance of the Bonds (as defined below) in accordance with the requirements of Section 15.2-2606, Code of Virginia 1950, as amended (the "Virginia Code"); and WHEREAS, the School Board of the City has, by resolution, requested the Board to authorize the issuance of the Bonds (as hereinafter defined); NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF SUPERVISORS OF THE CITY OF ROANOKE, VIRGINIA: 1. AnthariTatlon of Ronda and Use of Proe~ds. The Council hereby determines that it is advisable to contract a debt and issue and sell its general obligation school bonds in an aggregate principal amount not to exceed $2,750,000 (the "Bonds") for the purpose of financing certain capital projects for school purposes. The Council hereby authorizes the issuance and sale of the Bonds in the form and upon the terms established pursuant to this Resolution. 2. i~alg.~LthP,_Bflada. It is determined to be in the best interest of the City to accept the offer of the Virginia Public School Authority (the "VPSA") to purchase from the City, and to sell to the VPSA, the Bonds at a price, determined by the VPSA to be fair and accepted by the Mayor and the City, that is not less than 98% of par and not more than 103% of par upon the terms established pursuant to this Resolution except that in the event the purchase price determined by the VPSA exceeds the upper limit of 103%, the City, at the request of the VPSA, will lower the amount of the local school bonds to be issued to provide a purchase price for such bonds and a proceeds amount that is within 103% of the amount requested pursuant to the City's application submitted to the VPSA. The Mayor, the City Manager, and such officer or officers of the City as either may designate are hereby authorized and directed to enter into a Bond Sale Agreement dated as of October 9, 2001, with the VPSA providing for the sale of the Bonds to the VPSA in substantially the form submitted to the Council at this meeting, which form is hereby approved (the "Bond Sale Agreement"). 3. Details of the Rol~ds~ The Bonds shall be issuable in fully registered form; shall be dated the date of issuance and delivery of the Bonds; shall be designated "General Obligation School Bonds, Series 200 l-A"; shall bear interest from the date of delivery thereof payable semi-annually on each January 15 and July 15 beginning July 15, 2002 (each an "Interest Payment Date"), at the rates established in accordance with Section 4 of this Resolution; and shall mature on July 15 in the years (each a "Principal Payment Date") and in the amounts set forth on Schedule I of Exhibit A attached hereto (the "Principal Installments"), subject to the provisions of Section 4 of this Resolution. 4. lnteres~ Rates and Principal lnstallmentn_ The City Manager is hereby authorized and directed to accept the interest rates on the Bonds established by the VPSA, provided that each interest rate shall be ten one-hundredths of one percent (0.10%) over the interest rate to be paid by the VPSA for the corresponding principal payment date of the bonds to be issued by the VPSA (the "VPSA Bonds"), a portion of the proceeds of which will be used to purchase the Bonds, and provided further, that the true {RKE%0717563.DOC-1} B-2 interest cost of the Bonds does not exceed five and eighty five one-hundredths percent (5.85 %) per annum. The Interest Payment Dates and the Principal Installments are subject to change at the request of the VPSA. The City Manager is hereby authorized and directed to accept changes in the Interest Payment Dates and the Principal Installments at the request of the VPSA, provided that the aggregate principal amount of the Bonds shall not exceed the amount authorized by this Resolution. The execution and delivery of the Bonds as described in Section 8 hereof shall conclusively evidence such interest rates established by the VPSA and Interest Payment Dates and the Principal Installments requested by the VPSA as having been so accepted as authorized by this Resolution. 5. Form of the linnd.q. The Bonds shall be initially in the form of a single, temporary typewritten bond substantially in the form attached hereto as Exhibit A. 6. Payment; Pa.vinE Agent and Rnnd Regintrar. The following provisions shall apply to the Bonds: (a) For as long as the VPSA is the registered owner of the Bonds, all payments of principal, premium, if any, and interest on the Bonds shall be made in immediately available funds to the VPSA at, or before 11:00 a.m. on the applicable Interest Payment Date or Principal Payment Date, or if such date is not a business day for Virginia banks or for the Commonwealth of Virginia, then at or before 11:00 a.m. on the business day next preceding such Interest Payment Date or Principal Payment Date. (b) All overdue payments of principal and, to the extent permitted by law, interest shall bear interest at the applicable interest rate or rates on the Bonds. (c) SunTrust Bank, Richmond, Virginia, is designated as Bond Registrar and Paying Agent for the Bonds. 7. No Redemntinn or Prepayment. The Principal Installments of the Bonds shall not be subject to redemption or prepayment. Furthermore, the Council covenants, on behalf of the City, not to refund or refinance the Bonds without first obtaining the written consent of the VPSA or the registered owner of the Bonds. 8. Exneufion nf the l:lnnd.q. The Mayor or Vice Mayor and the City Clerk or any Deputy City Clerk are authorized and directed to execute and deliver the Bonds and to affix the seal of the City thereto. 9. Pledge nf Full Faith and Credil For the prompt payment of the principal of and premium, if any, and the interest on the Bonds as the same shall become due, the full faith and credit of the City are hereby irrevocably pledged, and in each year while any of the Bonds shall be outstanding there shall be levied and collected in accordance with law an annual ad valorem tax upon all taxable property in the City subject to local taxation sufficient in amount to provide for the payment of the principal of and premium, if any, and the interest on the Bonds as such principal, premium, if any, and interest shall become due, which tax shall be without limitation as to rate or amount and in addition to all other taxes authorized to be levied in the City to the extent other funds of the City are not lawfully available and appropriated for such purpose. 10. Use of Proceeds Certificate and Certificate ms to Arbitrage. The Mayor, the City Manager and such officer or officers of the City as either may designate are hereby authorized and directed to execute {m<E#07~Ts~3. B-3 a Certificate as to Arbitrage and a Use of Proceeds Certificate each setting forth the expected use and investment of the proceeds of the Bonds and containing such covenants as may be necessary in order to show compliance with the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and applicable regulations relating to the exclusion from gross income of interest on the Bonds and on the VPSA Bonds except as provided below. The Council covenants on behalf of the City that (i) the proceeds from the issuance and sale of the Bonds will be invested and expended as set forth in such Certificate as to Arbitrage and such Use of Proceeds Certificate and that the City shall comply with the other covenants and representations contained therein and (ii) the City shall comply with the provisions of the Code so that interest on the Bonds and on the VPSA Bonds will remain excludable from gross income for Federal income tax purposes. l 1. State Non-Arhitra_oe Pro_oram: Proceeds AEreement The Council hereby determines that it is in the best interests of the City to authorize and direct the City Treasurer to participate in the State Non-Arbitrage Program in connection with the Bonds. The Mayor, the City Manager and such officer or officers of the City as either may designate are hereby authorized and directed to execute and deliver a Proceeds Agreement with respect to the deposit and investment of proceeds of the Bonds by and among the City, the other participants in the sale of the VPSA Bonds, the VPSA, the investment manager and the depository, substantially in the form submitted to the Council at this meeting, which form is hereby approved. 12. Cnntinuin~o Disclosure A~oreement. The Mayor, the City Manager and such officer or officers of the City as either may designate are hereby authorized and directed to execute a Continuing Disclosure Agreement, as set forth in Appendix F to the Bond Sale Agreement, setting forth the reports and notices to be filed by the City and containing such covenants as may be necessary in order to show compliance with thc provisions of the Securities and Exchange Commission Rule 15c2-12 and directed to make all filings required by Section 3 of the Bond Sale Agreement should thc City be determined by the VPSA to be a MOP (as defined in the Continuing Disclosure Agreement). 13. Filin_o of Resulution. The appropriate officers or agents of the City are hereby authorized and directed to cause a certified copy of this Resolution to be filed with the Circuit Court of the City. 14. ~. The members of the Council and all officers, employees and agents of the City are hereby authorized to take such action as they or any one of them may consider necessary or desirable in connection with the issuance and sale of the Bonds and any such action previously taken is hereby ratified and confirmed. 15. Effective Date. This Resolution shall take effect immediately. {RKE#0717563.DOC-1} B-4 The undersigned Clerk of the City of Roanoke, Virginia, hereby certifies that the foregoing constitutes a true and correct extract from the minutes of a meeting of the City Council held on October 1, 2001, and of the whole thereof so far as applicable to the matters referred to in such extract. I hereby further certify (a) that such meeting was a regularly scheduled meeting and that, during the consideration of the foregoing resolution, a quorum was present, and (b) that the attendance of the members and voting on the foregoing resolution was as follows: Pre~ent Ahaent Aye ]2~ Ahatain Ralph K. Smith, Mayor William H. Carder, Vice Mayor William D. Bestpitch C. Nelson Harris W. Alvin Hudson, Jr. William White, Sr. Lynda F. Wyatt WITNESS MY HAND and the seal of the City of Roanoke, Virginia, this __ 2001. day of October, Clerk, City of Roanoke, Virginia [SEAL] {RKE#0717563.DOC-1} B-5 EXHIBIT A (FORM OF TEMPORARY BOND) NO. TS-1 UNITED STATES OF AMERICA COMMONWEALTH OF VIRGINIA CITY OF ROANOKE General Obligation School Bond Series 2001-A The CITY OF ROANOKE, VIRGINIA (the "City"), for value received, hereby acknowledges itself indebted and promises to pay to the VIRGINIA PUBLIC SCHOOL AUTHORITY the principal amount of DOLLARS ($ ), in annual installments in the amounts set forth on Schedule I attached hereto payable on July 15, 2002 and annually on July 15 thereafter to and including July 15, 2021 (each a "Principal Payment Date"), together with interest from the date of this Bond on the unpaid installments, payable semi-annually on January 15 and July 15 of each year, commencing on July 15, 2002 (each an "Interest Payment Date"; together with any Principal Payment Date, a "Payment Date"), at the rates per annum set forth on Schedule I attached hereto. Both principal of and interest on this Bond are payable in lawful money of the United States of America. For as long as the Virginia Public School Authority is the registered owner of this Bond, SunTrust Bank, Richmond, Virginia, as bond registrar (the "Bond Registrar"), shall make all payments of principal, premium, if any, and interest on this Bond, without the presentation or surrender hereof, to the Virginia Public School Authority, in immediately available funds at or before 11:00 a.m. on the applicable Payment Date or date fixed for prepayment or redemption. If a Payment Date or date fixed for prepayment or { RKE#0717563. DOC-l} redemption is not a business day for banks in the Commonwealth of Virginia or for the Commonwealth of Virginia, then the payment of principal, premium, if any, or interest on this Bond shall be made in immediately available funds at or before 11:00 a.m. on the business day next preceding the scheduled Payment Date or date fixed for prepayment or redemption. Upon receipt by the registered owner of this Bond of said payments of principal, premium, if any, and interest, written acknowledgment of the receipt thereof shall be given promptly to the Bond Registrar, and the City shall be fully discharged of its obligation on this Bond to the extent of the payment so made. Upon final payment, this Bond shall be surrendered to the Bond Registrar for cancellation. The full faith and credit of the City are irrevocably pledged for the payment of the principal of and the premium, if any, and interest on this Bond. The resolution adopted by the City Council authorizing the issuance of the Bonds provides, and Section 15.2-2624, Code of Virginia 1950, as amended, requires, that there shall be levied and collected an annual tax upon all taxable property in the City subject to local taxation sufficient to provide for the payment of the principal, premium, if any, and interest on this Bond as the same shall become due which tax shall be without limitation as to rate or amount and shall be in addition to all other taxes authorized to be levied in the City to the extent other funds of the City are not lawfully available and appropriated for such purpose. This Bond is duly authorized and issued in compliance with and pursuant to the Constitution and laws of the Commonwealth of Virginia, including the Public Finance Act of 1991, Chapter 26, Title 15.2, Code of Virginia 1950, as amended, and resolutions duly adopted by the City Council and the School Board of the City to provide funds for capital projects for school purposes. This Bond may be exchanged without cost, on twenty (20) days written notice from the Virginia Public School Authority, at the office of the Bond Registrar on one or more occasions for two or more temporary bonds or definitive bonds in fully registered form in denominations of $5,000 and whole { RKE#0717563. DOC-1 } A-2 multiples thereof, and; in any case, having an equal aggregate principal amount having maturities and bearing interest at rates corresponding to the maturities of and the interest rates on the installments of principal of this Bond then unpaid. This Bond is registered in the name of the Virginia Public School Authority on the books of the City kept by the Bond Registrar, and the transfer of this Bond may be effected by the registered owner of this Bond only upon due execution of an assignment by such registered owner. Upon receipt of such assignment and the surrender of this Bond, the Bond Registrar shall exchange this Bond for definitive Bonds as hereinabove provided, such definitive Bonds to be registered on such registration books in the name of the assignee or assignees named in such assignment. The principal installments of this Bond are not subject to redemption or prepayment. All acts, conditions and things required by the Constitution and laws of the Commonwealth of Virginia to happen, exist or be performed precedent to and in the issuance of this Bond have happened, exist and have been performed in due time, form and manner as so required, and this Bond, together with all other indebtedness of the City, is within every debt and other limit prescribed by the Constitution and laws of the Commonwealth of Virginia. {RKE#0717563.DOC-1} A-3 IN WITNESS WItEREOF, the City Council of the City of Roanoke, Virginia has caused this Bond to be issued in the name of the City of Roanoke, Virginia, to be signed by its Mayor or Vice-Mayor, its seal to be affixed hereto and attested by the signature of its Clerk or any of its Deputy Clerks, and this Bond to be dated November ~ 2001. CITY OF ROANOKE, VIRGINIA (SEAL) Mayor, City of Roanoke, Virginia ATTEST: Clerk, City of Roanoke, Virginia {RKE#0717563.DOC-1} A4 ASSIGNMENT FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE) PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE: the within Bond and irrevocably constitutes and appoints attorney to exchange said Bond for definitive bonds in lieu of which this Bond is issued and to register the transfer of such definitive bonds on the books kept for registration thereof, with full power of substitution in the premises. Date: Registered Owner Signature Guaranteed: (NOTICE: Signature(s) must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Bond Registrar which requirements will include Membership or participation in STAMP or such other "signature guarantee program" as may be determined by the Bond Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. (NOTICE: The signature above must correspond with the name of the Registered Owner as it appears on the front of this Bond in every particular, without alteration or change.) {RKE#0717563.DOC-1} A-5 APPENDIX C to the Bond Sale Agreement [FAIRVIEW] USE OF PROCEEDS CERTIFICATE The $ General Obligation School Bonds, Series 2001-A (the "Bonds"), issued by the City of Roanoke, Virginia (the "Issuer") will be purchased by the Virginia Public School Authority ("VPSA") from the proceeds of the VPSA's $ School Financing Bonds (1997 Resolution), Series 2001 B (the "VPSA's Bonds"), pursuant to a Bond Sale Agreement dated as of October 9, 2001. The proceeds of the Bonds will be used to acquire, construct and equip public school facilities owned and/or operated by the school board for the Issuer (the "School Board"). The Issuer and the School Board each recognize that certain facts, estimates and representations set forth in the Certificate as to Arbitrage executed by VPSA in connection with the issuance of the VPSA's Bonds must be based on the representations and certifications of the Issuer and the School Board and that the exclusion from gross income for federal income tax purposes of the interest on the VPSA's Bonds depends on the use of proceeds of the VPSA's and the Issuer's Bonds. Accordingly, the Issuer and the School Board hereby covenant that: Section 1. Descrin/ion of Project, The proceeds of the Bonds, including investment income thereon ("proceeds"), will be used to finance the acquisition, construction, and equipping of public school facilities of the Issuer (the "Project"). Section 2. Governmental l l.qe of Proceeds, The Issuer and the School Board covenant the following with respect to the use of proceeds of the Bonds and the facilities financed or refinanced therewith: (i) Private [hmine.q~q 1 l~e. No more than ten percent (10%) of the proceeds of the Bonds or the Project (based on the greatest of: (A) the cost allocated on the basis of space occupied, (B) the fair market value, or (C) the actual cost of construction) has been or, so long as the Bonds are outstanding, will be, used in the aggregate for any activities that constitute a "Private Use" (as such term is defined below in subsection (d) of this Section 2). (ii) Private Security or Payment, No more than ten percent (10%) of the principal of or interest on the Bonds, under the terms thereof or any underlying arrangement, has been, or, so long as the Bonds are outstanding, will be, directly or indirectly, (A) secured by any interest in (I) property used for a Private Use or (II) payments in respect of such property or (B) derived from payments in respect of property used or to be used for a Private Use, whether or not such property is a part of the Project. { RKE# 0717582. DOC - 1 } C-1 (b) No Dispropnrtinnate or l lnrelated l l~qe. With respect to private business use disproportionate to or not related to governmental use financed or refinanced with the proceeds of the Bonds, no more than five percent (5%) of the principal of or interest on such Bonds, under the terms thereof or any underlying arrangement, has been, or, so long as the Bonds are outstanding, will be, directly or indirectly, (x) secured by any interest in (I) property used for a Private Use or (II) payments in respect of such property or (y) derived from payments in respect of property used or to be used for a Private Use, whether or not such property is a part of the Project. (c) No Private I,oan Financing. No proceeds of the Bonds will be used to make or finance loans to any person other than to a state or local governmental unit. (d) Definition of Private l/se. For purposes of this Certificate, the term "Private Use" means any activity that constitutes a trade or business that is carried on by persons or entities other than state or local governmental entities. Any activity carried on by a person other than a natural person is treated as a trade or business. The leasing of property financed or refinanced with the proceeds of the Bonds or the access of a person other than a state or local governmental unit to property or services on a basis other than as a member of the general public shall constitute Private Use unless the Issuer obtains an opinion of Bond Counsel to the contrary. Use of property financed or refinanced with proceeds of the Bonds by any person, other than a state or local governmental unit, in its trade or business constitutes general public use only if the property is intended to be available and is in fact reasonably available for use on the same basis by natural persons not engaged in a trade or business ("General Public Use"). In most cases Private Use will occur only if a nongovernmental person has a special legal entitlement to use the financed or refinanced property under an arrangement with the Issuer. Such a special legal entitlement would include ownership or actual or beneficial use of the Project pursuant to a lease, management or incentive payment contract, output contract, research agreement or similar arrangement. In the case of property that is not available for General Public Use, Private Use may be established solely on the basis of a special economic benefit to one or more nongovernmental persons. In determining whether special economic benefit gives rise to Private Use, it is necessary to consider all of the facts and circumstances, including one or more of the following factors: (i) whether the financed or refinanced property is functionally related or physically proximate to property used in the trade or business of a nongovernmental person; (ii) whether only a small number of nongovernmental persons receive the economic benefit; and (iii) whether the cost of the financed or refinanced property is treated as depreciable by the nongovernmental person. As of the date hereof, no portion of the Project is leased (or will be so leased) by the Issuer or the School Board (or a related party or agent) to a person or entity other than a state or local { RKE#0717582.DOC- 1 } C-2 governmental unit or to members of the general public for General Public Use. (e) Management and Rervice Cnntract.q. With respect to management and service contracts, the determination of whether a particular use constitutes Private Use under this Certificate shall be determined on the basis of applying Revenue Procedure 97-13, 1997-5 I.R.B. 18 ("Revenue Procedure 97-13"). As of the date hereof, no portion of the proceeds derived from the sale of the Bonds is being used to finance or refinance property subject to contracts or other arrangements with persons or entities engaged in a trade or business (other than governmental units) that involve the management of property or the provision of services with respect to property financed or refinanced with proceeds of the Bonds that do not comply with the standards of Revenue Procedure 97-13. For purposes of determining the nature of a Private Use, any arrangement that is properly characterized as a lease for federal income tax purposes is treated as a lease. Consequently, an arrangement that is referred to as a management or service contract may nevertheless be treated as a lease. In determining whether a management contract is properly characterized as a lease, it is necessary to consider all of the facts and circumstances, including the following factors: (i) the degree of control over the property that is exercised by a nongovernmental person; and (ii) whether a nongovernmental person bears risk of loss of the financed or refinanced property. Section 3. Time Te.qt and Due Diligence Test. The Issuer and the School Board have incurred or will incur within 6 months of the date hereof substantial binding obligations, which are not subject to contingencies within the control of the Issuer or the School Board or a related party thereto, to third parties to expend at least 5% of the net sale proceeds of the Bonds on the Project. The Issuer and the School Board will proceed with due diligence to spend all of the proceeds of the Bonds within three years of the date hereof. Section 4. Di?o~qiticm.q and Change in 1/se. (a) No Sale or Oi.qno,qltion The Issuer and the School Board expect to own and operate and do not expect to sell or otherwise dispose of the Project, or any component thereof, prior to the final maturity date of the VPSA's Bonds (August 1, 2021). (b) Ehanga..in~2~. The Issuer and the School Board represent, warrant and covenant that the facilities financed or refinanced with proceeds of the Bonds will be used for the governmental purpose of the Issuer and the School Board during the period of time the Bonds are outstanding, unless an opinion of Bond Counsel is received with respect to any proposed change in use of the Project. (c) Tax Covenant. Each of the Issuer and the School Board represents, warrants and covenants that it will take no action that would cause either the Bonds or the VPSA's {RKE#0717582.DOC-1 } C-3 Bonds to be private activity bonds within the meaning of Section 141(a) of the Code and that it will not fail to take any action that would prevent the VPSA's Bonds and the Bonds from being private activity bonds, within the meaning of Section 141(a) of the Code. Furthermore, the Issuer and the School Board have established reasonable procedures to ensure compliance with this covenant. Section 5. No Sinking or Pledge Fund.q. Neither the Issuer nor the School Board has established and will not establish any funds or accounts that are reasonably expected to be used to pay debt service on the Bonds or that are pledged (including negative pledges) as collateral for the Bonds for which there is a reasonable assurance that amounts on deposit therein will be available to pay debt service on the Bonds if the Issuer or the School Board encounters financial difficulty. Section 6. No Replacement Proceeds. (a) In General. No portion of the proceeds of the Bonds will be used as a substitute for other funds that prior to the Issuer's resolving to proceed with the issuance of the Bonds were used or are to be used to pay any cost of the Project. (b) Safe,._Harlxm In accordance with Section 1.148-1(c) of the Treasury Regulations regarding the safe harbor against the creation of "replacement proceeds", as of the date hereof, the weighted average maturity of the Bonds does not exceed 120% of the reasonably expected economic life of the Project financed thereby. Section 7. No Refimding, The proceeds of the Bonds will not be used to provide for the payment of any principal of or interest on any obligations of the Issuer, other than the Bonds, incurred in the exercise of its borrowing power, except for any temporary financing as described herein. Section 8. Composite l~.qne. There are no other obligations of the Issuer that have been, or will be (a) sold within 15 days of the Bonds, (b) sold pursuant to the same plan of financing together with the Bonds, and (c) paid out of substantially the same source of funds as the Bonds. Section 9. No Federal Guarantee. The Issuer and the School Board shall not take or permit any action that would cause (a) the payment of principal of or interest on the Bonds to be guaranteed, directly or indirectly, in whole or in part by the United States or any agency or instrumentality thereof or (b) 5 percent or more of the proceeds of the Bonds to be (i) used in making loans the payment of principal or interest on which are guaranteed in whole or in part by the United States or any agency or instrumentality thereof or (ii) invested directly or indirectly in federally insured deposits or accounts (except as permitted under Section 149(b) of the Internal Revenue Code of 1986, as amended (the "Code"), or the regulations promulgated thereunder). The Issuer and the School Board have not, and will not enter into, any (i) long-term service contract with any federal governmental agency, (ii) service contract with any federal governmental agency under terms that are materially different from the terms of any contracts with any persons other than federal government agencies, and (iii) lease of property to any federal government agency, that would cause the Bonds to be considered "federally guaranteed" within the meaning of Section 149(b) of the Code. {RKE#0717582.DOC-1 } C-4 Section 10. No Hedge l:lond~, The Issuer and the School Board reasonably expect that all of the net sale proceeds of the Bonds will be used to pay the cost of the Project within three years of the date hereof. Furthermore, not more than 50 percent of the proceeds of the Bonds will be invested in Nonpurpose Investments (as such term is defined in Section 148(f)(6)(A) of the Code) having a substantially guaranteed yield for four years or more. Section 11. No Overi.q~quance, The total proceeds derived by the Issuer from the sale of the Bonds and anticipated investment earnings thereon do not exceed the total of the amounts necessary for the Project. Section 12. Reimhnr~qahle Expen~qe.q. A portion of the proceeds of the Bonds to be applied to the cost of the Project will be used to reimburse the Issuer for expenditures incurred thereby with respect to the Project in anticipation of the issuance of the Bonds. The Issuer represents the following with respect to the costs of the Project to be reimbursed from the proceeds of the Bonds. (a) Official Intent_ The total amount of reimbursed costs incurred by the Issuer with respect to the Project is not expected to exceed 2,750,000. Such expenditures were paid prior to the date hereof but no earlier than sixty (60) days prior to May 15, 2000, (month/day/year) which is the date the Issuer adopted its "official intent" declaration (the "Official Intent Declaration") in accordance with Section 1.150-2 of the Treasury Regulations. The Official Intent Declaration: (i) was, on the date of its adoption, intended to constitute a written documentation on behalf of the Issuer that states that the Issuer reasonably expected to reimburse itself for such expenditures with the proceeds of a taxable or tax-exempt borrowing, (ii) set forth a general description of the Project, and (iii) stated the maximum principal amount of debt expected to be issued for the Project. The Issuer has taken no action subsequent to the expression of such intent that would contradict or otherwise be inconsistent with such intent. (b) Rea.qonable Official Intent_ As of the date of the Official Intent Declaration, the Issuer reasonably expected to reimburse such expenditures with the proceeds of a borrowing. The Issuer does not have a pattem of failing to reimburse expenditures for which an intention to reimburse such expenditures was declared and which were actually paid by the Issuer other than in circumstances that were unexpected and beyond the control of the Issuer. (C) Reimhur.qement Period Reanirement_ The proceeds derived from the sale of the Bonds to be applied to reimburse the above-described expenditures will be so applied no later than the { RKE#0717582.DOC- 1 } C-5 later of the date that is (i) eighteen (18) months after the date on which the expenditure being reimbursed was paid, and (ii) eighteen (18) months after the date on which the portion of the Project to which such expenditure relates was placed in service within the meaning of Section 1.150-2 of the Treasury Regulations or abandoned. The Issuer shall not, however, use Bond proceeds to reimburse the above-described expenditures later than three (3) years after the date the original expenditure was paid. (d) Reimbursable F, xnenditure.q_ The expenditures to be reimbursed are either (i) capital expenditures (within the meaning of Section 1.150-1 (b) of the Treasury Regulations), (ii) costs of issuance, (iii) certain working capital expenditures for extraordinary, nonrecurring items that are not customarily payable from current revenues (within the meaning of Section 1.148-6 (d) (3) (ii) (B) of the Treasury Regulations), (iv) grants (within the meaning of Section 1.148-6 (d) (4) of the Treasury Regulations), or (v) qualified student loans, qualified mortgage loans or qualified veterans' mortgage loans (within the meaning of Section 1.150-1(b) of the Treasury Regulations). None of the expenditures to be reimbursed were incurred for day-to- day operating costs or similar working capital items. None of the proceeds of the Bonds being used to reimburse the Issuer for prior expenditures will be used, directly or indirectly, within one year of the date of a reimbursement allocation, in a manner that results in the creation of replacement proceeds (within the meaning of Section 1.148-1 of the Treasury Regulations), other than amounts deposited in a bona fide debt service fund. (e) Anti-Abn.qe Rules. None of the proceeds of the Bonds are being used in a manner that employs an abusive arbitrage device under Section 1.148-10 of the Treasury Regulations to avoid the arbitrage restrictions or to avoid the restrictions under Sections 142 through 147 of the Code. Section 13. Covenant a~q to Arbitrage. The Issuer and the School Board hereby covenant that whether or not any of the Bonds remain outstanding, the money on deposit in any fund or account maintained in connection with the Bonds, whether or not such money was derived from the proceeds of the sale of the Bonds or from any other sources, will not be used in a manner that would cause the Bonds or the VPSA's Bonds to be arbitrage bonds within the meaning of Section 148 of the Code and the applicable regulations thereunder. Date: November __, 2001 CITY OF ROANOKE, VIRGINIA By: Darlene Burcham City Manager {RKE#0717582.DOC-1 } C-6 School Board of the City of Roanoke, Virginia By: Sherman P. Lea Chairman {RKE#0717582.DOC-1 } C-7 APPENDIX D to the Bond Sale Agreement CONSTRUCTION EXCEPTION AND EIGHTEEN MONTH EXCEPTION TO THE REBATE REQUIREMENT QUESTIONNAIRE The purpose of this questionnaire is to elicit facts concerning the expenditure of the proceeds of the City of Roanoke, Virginia (the "Issuer") general obligation school bonds (the "Bonds") in order to make an initial determination that the construction exception from the rebate requiremem provided by Section 148(f)(4)(C) of the Intemal Revenue Code of 1986, as amended, or the eighteen month exception from the rebate requirement provided by Section 1.148-7(d) of the Treasury Regulations is available. Please supply the information requested below and send this questionnaire to Richard A. Davis, Public Finance Manager, Virginia Public School Authority, P. O. Box 1879, Richmond, Virginia 23218-1879, for receipt no later October 9, 2001, with a copy to your bond counsel. Briefly describe the project (the "Project") to be financed with the proceeds of the Bonds including the useful life of the project(s) being financed. 2. (a) Indicate the total amount of proceeds to be derived from the sale of the Bonds. (b) Indicate the amount that you reasonably expect to receive from the investment of the Bond proceeds prior to spending all of the Bond proceeds set forth above in Question 2 (a). (c) Indicate the amount of proceeds derived from the sale of the Bonds that you expect to use to finance the issuance costs of the Bonds. (e.g. your legal fees) (d) The amount set forth in Questions 2(a) plus the amount set forth in Question 2(b) { RKE!g0716216. DOC- 1 } reduced by the amount set forth in Question 2(c) equals $ This amount is hereinafter referred to as "Available Construction Proceeds". Any bond premium derived from sale of the bonds and any investment earnings thereon will be treated as Available Construction Proceeds. Indicate the amount of money, other than the Available Construction Proceeds of the Bonds, that will be applied toward the cost of the Project and the expected source of such money. Indicate what such money will be used for. Indicate, by principal components, your current estimates of the cost for the acquisition and construction of the Project that will be financed with the Available Construction Proceeds of the Bonds, including: (a) Acquisition of Interest in Land (b) Acquisition of Interest in Real Property~ (c) Acquisition and/or Installation of Tangible Personal Property2 (d) Site Preparation (e) Construction of Real Property3 (f) Reconstruction of Real Property_4 (g) Rehabilitation of Real Property (h) Construction of Tangible Personal Property6 (i) Specially devTeloped computer software (j) Interest on the Bonds during Construction (k) Other (please specify) (1) Total $ (Note: The sum of the amounts described in (a) through (k) must equal the amount of Available Construction Proceeds of the Bonds set forth in Question 2(d).) 1-7 See the Endnotes on pages D-7 and D-8. {RKE#0716216.DOC-1} D-2 o (a) Have you borrowed, directly or indirectly, (such as through an industrial development authority) any money, either through a tax-exempt bank loan, a bond anticipation note, any tax-exempt or taxable obligation or otherwise (a "loan"), to pay for the Project costs? Yes No (b) Do you intend to use the proceeds of the Bonds to refinance or repay any loan used to finance the Project costs? Yes No (c) If the answer to Question 5(b) is "Yes", please attach a copy of the BAN, COP, or other evidence of the loan and any tax certificate executed with such loan and indicate the following: (i) Amount of loan: (ii) Date of loan: (iii) Maturity date of loan: (iv) Interest rate of loan: (v) Name of lender: (d) If the answer to question 5(a) or (b) is "Yes", did you use the proceeds of the loan to reimburse yourself for expenses paid with respect to the Project before the loan was obtained? Yes No (e) If the answer to question 5(b) is "Yes", do you expect to qualify for the small issuer exception for the loan. 6. (a) Do you intend to reimburse yourself from the proceeds of the Bonds for Project costs advanced from your General Fund or other available sources? Yes No {RKE%0716216.DOC-1} D-3 (b) If the answer to Question 5(d) or Question 6 (a) is "Yes", with respect to all such expenditures, please indicate the amount of such expenditure, when such expenditure was paid and the purpose of the expenditure (i.e., architectural fees, engineering fees, other construction costs): (i) Amount expended $ (ii) Date of expenditure: (iii) Purpose of expenditure: (Note: if you intend to reimburse yourself for more than one expenditure, please attach a rider setting forth: (i) amount expended, (ii) date of expenditure, and (iii) purpose of expenditure) If the answer to Question 5(d) or 6(a) is "Yes" please attach a copy of any other evidence of your intention to reimburse yourself with the proceeds of a borrowing such as the earliest possible resolution, declaration or minutes of a meeting. Include the date such resolution was adopted, meeting was held or declaration made. [The purpose of questions 8, 9 and 10 is to determine if the Bonds may qualify for the Construction Exception from the Rebate Requirement.] Indicate whether the total of the amounts shown in 4(d) through (i) on page D-2 is at least 75% of the amount of Available Construction Proceeds (i.e., 75% of the amount in 4(i). Yes No If the answer to Question 8 is "Yes", answer Question 9 and skip Question 10. If the answer to Question 8 is "No", skip Question 9 and answer Question 10. (a) Assuming the Bonds are delivered on November 15, 2001 and funds are made available to you on that date, please complete the following schedule indicating the amount of Available Construction Proceeds that the Issuer expects to expend and disburse during the following time periods: From November 15, 2001 to May 15, 2002 From May 16, 2002 to November 15, 2002 From November 16, 2002 to May 15, 2003 From May 16, 2003 to November 15, 2003 Total9 8 and 9 See the Endnotes on page D-8. {RKE#0716216.DOC-1} D-4 10. (b) If you do not expect to spend 100% November 15, 2003, do you expect to Proceeds by November 15, 2004.9 of Available Construction Proceeds by spend 100% of Available Construction Yes No For purposes of this Question 10, assume that the Bonds are delivered on November 15, 2001 and funds are made available to you on that date. (a) Does the Issuer expect to expend and disburse the amount shown in Question 4(a) for the acquisition of land by May 15, 2002? Yes No (b) Does the Issuer expect to expend and disburse the amount shown in Question 4(b) for the acquisition of interests in real property by May 15, 2002? Yes No (c) Does the Issuer expect to expend and disburse the amount shown in Question 4(c) for the acquisition and/or installation of tangible personal Property by May 15, 2002? (d) Yes No (i) Does the Issuer expect to expend and disburse the amount shown in question 4(1) by November 15, 2004? Yes No (ii) Assuming that the Bonds are delivered on November 15, 2001, and funds are made available to you on that date, please complete the following schedule indicating the amount of Available Construction Proceeds that the Issuer expects to expend and disburse during the following time periods: From November 15, 2001 to May 15, 2002 From May 16, 2002 to November 15, 2002 From November 16, 2002 to May 15, 2003 From May 16, 2003 to November 15, 2003 10 Total $ 10 See the Endnotes on page D-8. {RKE#0716216.DOC-1} D-5 [The purpose of question 11 is to determine if the Bonds may qualify for the Eighteen Month Exception from the Rebate Requirement.] 11. The sum of the amounts set forth in Questions 2(a) and 2(b) equals $ (the "gross proceeds"). Assuming that the Bonds are delivered on November 15, 2001 and funds are made available to you on that date, please complete the following schedule indicating the amount of gross proceeds that the Issuer expects to expend and disburse during the following time periods: From November 15, 2001 to May 15, 2002 From May 16, 2002 to November 15, 2002 From November 16, 2002 to May 15, 2003 Total $ 12. (a) Will this issue qualify for the Small Issuer Exception? Yes No (b) List any general obligation bond financings the Issuer has undertaken or is planning to undertake in the calendar year 2001. I understand that the foregoing information will be relied upon by the Virginia Public School Authority (the "Authority") in determining the applicability of the construction exception to the Authority's School Financing Bonds (1997 Resolution), Series 2001 B. I hereby certify that I am familiar with the Project or have made due inquiry in order to complete this Questionnaire with respect to the Project and am authorized by the Issuer to provide the foregoing information with respect to it, which information is true, correct, and complete, to the best of my knowledge. ~ Include amounts expended prior to November 15,2001 and approved by your bond counsel for reimbursement from your bond proceeds. This does not include any amount used to refinance or repay any loan. {RKE#0716216.DOC-1} D-6 Name of Person Completing Questionnaire Title Signature Date {RKE#0716216.DOC-1} D-7 o ENDNOTES For purposes of this questionnaire, "real property" means improvements to land, such as buildings or other inherently permanent structures, including items that are structural components of such buildings or structures. For example, real property includes wiring in a building, plumbing systems, central heating or central air conditioning systems, pipes or ducts, elevators or escalators installed in a building, paved parking areas, road, wharves and docks, bridges and sewage lines. For purposes of this questionnaire, tangible personal property means any tangible property except real property. For example, tangible personal property includes machinery that is not a structural component of a building, fire tracks, automobiles, office equipment, testing equipment and furnishings. See description of real property in endnote 1. This includes all capital expenditures that are properly chargeable to or may be capitalized as part of the basis of the real property prior to the date the property is placed in service. For purposes of this questionnaire, expenditures are considered paid in connection with the construction, reconstruction or rehabilitation of real property if the contract between the Issuer and the seller requires the seller to build or install the property (such as under a "turnkey contract") but only to the extent the property has not been built or installed at the time the parties enter into the contract. If the property has been partially built or installed at the time the parties enter into the contract, the expenditures that are allocable to the portion of the property built or installed before that time are expenditures for the acquisition of real property. See endnote 3. See endnote 3. For purposes of this questionnaire, expenditures are in connection with the construction of tangible personal property, as def'med in endnote 2, if: (a) A substantial portion of the property or properties is completed more than 6 months after the earlier of the date construction or rehabilitation commenced and the date the Issuer entered into an acquisition contract; (b) Based on the reasonable expectations of the Issuer, if any, or representations of the person constructing the property, with the exercise of due diligence, completion of construction or rehabilitation (and delivery to the Issuer) could not have occurred within that 6-month period; and (c) If the Issuer itself builds or rehabilitates the property, not more than 75% of the capitalizable cost is attributable to property acquired by the Issuer (e.g., components, raw materials and other supplies). {RKE#0716216.DOC-1} Specially developed computer software means any programs or routines used to cause a computer to perform a desired task or set of tasks, and the documentation required to describe and maintain those programs, provided that the software is specially developed and is functionally related and subordinate to real property or other constructed personal property. Include amounts expended prior to November 15, 2001 and approved by your bond counsel for reimbursement from your bond proceeds. This does not include any amount used to refinance or repay any loan. Total should equal the amount in 4(1). Include amounts expended prior to November 15,2001 and approved by your bond counsel for reimbursement from your bond proceeds. This does not include any amount used to refinance or repay any loan. {RKE#0716216.DOC-1} D-9 APPENDIX E to the Bond Sale Agreement CONTINUING DISCLOSURE AGREEMENT [This Continuing Disclosure Agreement will impose obligations on the Local Issuer if and only if the Local Issuer is or has become and remains a "Material Obligated Person", as defined below] This Continuing Disclosure Agreement (the "Disclosure Agreement") is executed and delivered by the undersigned local issuer (the "Local Issuer") in connection with the issuance by the Virginia Public School Authority (the "Authority") of $ aggregate principal amount of its School Financing Bonds (1997 Resolution) Series 2001 B (the "Series 2001 B Bonds") pursuant to the provisions of a bond resolution (the "1997 Resolution") adopted on October 23, 1997, as amended and restated. The Series 2001 B Bonds and all other parity bonds heretofore and hereafter issued under the 1997 Resolution are collectively called the "Bonds". A portion of the proceeds of the 2001 Series B Bonds are being used by the Authority to purchase certain general obligation school bonds ("Local School Bonds") of the Local Issuer pursuant to a bond sale agreement between the Authority and the Local Issuer (the "Bond Sale Agreement"). Pursuant to paragraph 3 of the Bond Sale Agreement, the Local Issuer hereby covenants and agrees as follows: SECTION 1. Purpo,qe of the Di.qeln.qure Agreement_ This Disclosure Agreement is being executed and delivered by the Local Issuer for the benefit of the holders of the Series 2001 B Bonds and in order to assist the Participating Underwriters (defined below) in complying with the Rule (defined below). The Local Issuer acknowledges that it is undertaking primary responsibility for any reports, notices or disclosures that may be required under this Agreement. SECTION 2. Definitian~ In addition to the definitions set forth in the 1997 Resolution, which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Report provided by the Local Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. "bond sale agreement" shall mean the Bond Sale Agreement and any other comparable written commitment of the Local Issuer to sell local school bonds to the Authority. "Dissemination Agent" shall mean the Local Issuer, acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing by such Local Issuer and which has filed with such Local Issuer a written acceptance of such designation. "Filing Date" shall have the meaning given to such term in Section 3(a) hereof. "Fiscal Year" shall mean the twelve-month period at the end of which financial position {RKE#0717575.DOC-1 } E-I and results of operations are determined. Currently, the Local Issuer's Fiscal Year begins July 1 and continues through June 30 of the next calendar year. "holder" shall mean, for purposes of this Disclosure Agreement, any person who is a record owner or beneficial owner of a Series 2001 B Bond. "Listed Events" shall mean any of the events listed in subsection 5(b)(5)(i)(C) of the Rule. "local school bonds" shall mean any of the Local School Bonds and any other bonds of the Local Issuer pledged as security for Bonds issued under the Authority' s 1997 Resolution. "Material Obligated Person" (or "MOP") shall mean the Local Issuer if it has local school bonds outstanding in an aggregate principal amount that exceeds 10% of the aggregate principal amount of all outstanding Bonds of the Authority. "National Repository" shall mean any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule. "Participating Underwriter" shall mean any of the original underwriters of the Authority's Series 2001 B Bonds required to comply with the Rule in connection with the offering of such Bonds. "Repository" shall mean each National Repository and each State Repository. "Rule" shall mean Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "State Repository" shall mean any public or private depository or entity designated by the State as a state depository for the purpose of the Rule. As of the date of this Agreement, there is no State Repository. SECTION 3. Provi.qion of Annual Report~, (a) The Local Issuer shall, or shall cause the Dissemination Agent to, provide to each Repository an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. Such Annual Report shall be filed on a date (the "Filing Date") that is not later than 12 months after the end of any Fiscal Year (commencing with its Fiscal Year ended June 30, 2001) as of the end of which such Local Issuer was a MOP, unless as of the Filing Date the Local Issuer is no longer a MOP.l Not later than ten (10) days prior to the Filing Date, the Local Issuer shall provide the Annual Report to the Dissemination Agent (if applicable) and shall provide copies to the Authority. In each case, the Annual Report (i) may be submitted x The Authority will covenant in the Bond Sale Agreement to advise the Local Issuer within 60 days of the end of each Fiscal Year if such Local Issuer was a Material Obligated Person as of the end of such Fiscal Year. Upon written request, the Authority will also advise the Local Issuer as to its status as a MOP as of any other date. {RKE#0717575.DOC-1 } E-2 as a single document or as separate documents comprising a package, (ii) may cross-reference other information as provided in Section 4 of this Disclosure Agreement and (iii) shall include the Local Issuer's audited financial statements prepared in accordance with applicable State law or, if audited financial statements are not available, such unaudited financial statements as may be required by the Rule. In any event, audited financial statements of such Local Issuer must be submitted, if and when available, together with or separately from the Annual Report. (b) If the Local Issuer is unable to provide an Annual Report to the Repositories by the date required in subsection (a), the Local Issuer shall send a notice to the Municipal Securities Rulemaking Board and any State Repository in substantially the form attached hereto as Exhibit A. SECTION 4. Content nf Annual Repnrt.q. Except as otherwise agreed, any Annual Report required to be filed hereunder shall contain or incorporate by reference, at a minimum, annual financial information relating to the Local Issuer, including operating data, (i) updating such information relating to the Local Issuer as shall have been included or cross-referenced in the final Official Statement of the Authority describing the Authority' s Series 2001 B Bonds or (ii) if there is no such information described in clause (i), updating such information relating to the Local Issuer as shall have been included or cross-referenced in any comparable disclosure document of the Local Issuer relating to its tax-supported obligations or (iii) if there is no such information described in clause (i) or (ii) above, initially setting forth and then updating the information referred to in Exhibit B as it relates to the Local Issuer, all with a view toward assisting Participating Underwriters in complying with the Rule. Any or all of such information may be incorporated by reference from other documents, including official statements of securities issues with respect to which the Local Issuer is an "obligated person" (within the meaning of the Rule), which have been filed with each of the Repositories or the Securities and Exchange Commission. If the document incorporated by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. The Local Issuer shall clearly identify each such other document so incorporated by reference. SECTION 5. Reporting of l,i.qted F, ventq. Whenever the Local Issuer is a Material Obligated Person required to file Annual Reports pursuant to Section 3(a) hereof and obtains knowledge of the occurrence of a Listed Event, and if such Local Issuer has determined that knowledge of the occurrence of a Listed Event with respect to its local school bonds would be material, such Local Issuer shall promptly file a notice of such occurrence with each National Repository or the Municipal Securities Rulemaking Board and each State Repository, if any, with a copy to the Authority. {RKE#0717575.DOC-1 } E-3 SECTION 6. Termination nf Reporting Obligation. The Local Issuer's obligations under this Disclosure Agreement shall terminate upon the earlier to occur of the legal defeasance or final retirement of all the Local School Bonds. SECTION 7. Di.q.qeminatinn Agent. The Local Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement and may discharge any such Agent, with or without appointing a successor Dissemination Agent. The Local Issuer shall advise the Authority of any such appointment or discharge. If at any time there is not any other designated Dissemination Agent, the Local Issuer shall be the Dissemination Agent. SECTION 8. ~mendm~. Notwithstanding any other provision of this Disclosure Agreement, the Local Issuer may amend this Disclosure Agreement, if such amendment has been approved in writing by the Authority and is supported by an opinion of independent counsel, acceptable to the Authority, with expertise in federal securities laws, to the effect that such amendment is permitted or required by the Rule. SECTION 9. Additinnal Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Local Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the Local Issuer chooses to include any information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is sp¢ ;ifically required by this Disclosure Agreement, such Local Issuer shall have no obligation under this Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. SECTION 10. Default. Any person referred to in Section 11 (other than the Local Issuer) may take such action as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Local Issuer to file its Annual Report or to give notice of a Listed Event. The Authority may, and the holders of not less than a majority in aggregate principal amount of Bonds outstanding may, take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to challenge the adequacy of any information provided pursuant to this Disclosure Agreement, or to enforce any other obligation of the Local Issuer hereunder. A default under this Disclosure Agreement shall not be deemed an event of default under the applicable resolution or bonds of the Local Issuer, and the sole remedy under this Disclosure Agreement in the event of any failure of the Local Issuer to comply herewith shall be an action to compel performance. Nothing in this provision shall be deemed to restrict the rights or remedies of any holder pursuant to the Securities Exchange Act of 1934, the rules and regulations promulgated thereunder, or other applicable laws. SECTION 11. ~. This Disclosure Agreement shall inure solely to the benefit of the Authority, the Local Issuer, the Participating Underwriters, and holders from time to time of the Authority' s Bonds, and shall create no rights in any other person or entity. {RKE#07 i 7575.DOC- 1 } E-4 SECTION 12. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Date: November __,2001 CITY OF ROANOKE, VIRGINIA By Darlene Burcham, City Manager {RKE#0717575.DOC-1 } E-5 NOTICE OF FAILURE TO FILE ANNUAL REPORT [AUDITED FINANCIAL STATEMENTS] EXHIBIT A Re: VIRGINIA PUBLIC SCHOOL AUTHORITY SCHOOL FINANCING BONDS (1997 Resolution) SERIES 2001 B CUSIP Numbers. Dated: November 1, 2001 Name of Local Issuer: City of Roanoke, Virginia NOTICE IS HEREBY GIVEN that the [Local Issuer] has not provided an Annual Report as required by Section 3(a) of the Continuing Disclosure Agreement, which was entered into in connection with the above-named bonds issued pursuant to that certain Series Resolution adopted on September 28, 2001 by the Board of Commissioners of the Virginia Public School Authority, the proceeds of which were used to purchase $ [School Bonds] of the [Local Issuer]. [The Local Issuer anticipates that the Annual Report will be filed by .] The Local Issuer is a material "obligated person" within the meaning of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended, with respect to the above-named bonds of the Authority. Dated: CITY OF ROANOKE, VIRGINIA By. {RKE#0717575.DOC- 1 } E-6 EXHIBIT B CONTENT OF ANNUAL REPORT Description of the Local Issuer. A description of the Local Issuer including a summary of its form of government, budgetary processes and its management and officers. Debt. A description of the terms of the Local Issuer's outstanding tax-supported and other debt including a historical summary of outstanding tax-supported debt; a summary of authorized but unissued tax-supported debt; a summary of legal debt margin; a summary of overlapping debt; and a summary of annual debt service on outstanding tax-supported debt as of the end of the preceding fiscal year. The Annual Report 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 Issuer and any unfunded pension liabilities. Financial Data. Financial information respecting the Local Issuer including a description of revenues and expenditures for its major funds and a summary of its tax policy, structure and collections as of the end of the preceding fiscal year. Capital Improvement Plan. A summary of the Local Issuer' s capital improvement plan. Demographic, Economic and Supplemental Information. A summary of the Local Issuer's demographic and economic characteristics such as population, income, employment, and public school enrollment and infrastructure data as of the end of the preceding fiscal year. The Annual Report should also include a description of material litigation pending against the Local Issuer. {RKE#0717575.DOC-1} E-7 [FORMI PROCEEDS AGREEMENT Respecting the Custody, Investment, and Disbursement of Proceeds of Local School Bonds Purchased by the Virginia Public School Authority with the Proceeds of Its $[ ] School Financing Bonds (1997 Resolution) Series 2001 B Dated November 8, 2001 Among Virginia Public School Authority Wachovia Bank, N.A. Evergreen Investment Management Company LLC and Albemarle Coun. ty Amherst County Appomattox County City of Chesapeake Culpeper County City of Danville Essex County Fauquier County Frederick County City of Harrisonburg City of HopeweH Matthews County Montgomery County City of Portsmouth City of Roanoke Roanoke County Spotsylvania County Stafford County Washington County City of Waynesboro NYLIB1/857121/1 Table of Contents Page Section 1. R. ecitals .......................................................................................................................... Section 2. Definitions ..................................................................................................................... 3 Section 3. Disposition of VPSA Bond Proceeds ........................................................................... 9 Section 4. Establishment of Accounts ......................................................................................... 10 Section 5. Disposition of Local School Bond Proceeds .............................................................. 11 Section 6. Investment of Principal Subaccount ........................................................................... 14 Section 7. Disbursements f~om Principal Subaccount ................................................................. 14 Section 8. Investment of Income Subaccount .............................................................................. 15 Section 9. Income Subaccount ..................................................................................................... 15 Section 10.Investment Losses ....................................................................................................... 17 Section 11.1~ebate Computations .................................................................................................. 18 Section 12.Transfers to Income Subaccount ................................................................................. 19 Section 13.Disposition of Excess Proceeds ..................... ~. ............................................................ 20 Section 14.Rebate Payments and Penalty Payments ..................................................................... 21 Section 15.Duties of VPSA ........................................................................................................... 22 Section 16.Duties of the Depository ............................................................................................. 23 Section 17.Duties of Local Units .................................................................................................. 23 Section 18.Responsibilities of the Investment Manager ............................................................... 24' Section 19.Costs~ ........................................................................................................................... 25 Section 20.Opinions of Counsel ........................... '. ....................................................................... 25 Section 21 .Amendment ................................................................................................................. 25 Section 22.Notices ........................................................................................................................ 26 Section 23.No Third Party Beneficiaries ...................................................................................... 27 NYLIB1/857121/I i Section 24.Severability ................................................................................................................. 27 Section 25.No Personal Liability .................................................................................................. 28 Section 26.Applicable Law ........................................................................................................... 28 Section 27.Counterparts ................................................................................................................ 28 Section 28.Effective Date; Term ................................................................................................... 29 Section 1. Recitals .......................................................................................................................... 1 A. On or before October 2, 2001, VPSA and each of the Local Units entered into a Bond Sale Agreement, pursuant to which VPSA agreed to purchase, and the Local Unit agreed to sell its Local School Bonds ............................................................................................. 1 B. On October 17, 2001, VPSA's Bonds were awarded at competitive bidding to the Purchaser. The Purchaser is obligated by the terms of its bid to pay the purchase price for VPSA's Bonds on the Closing Date. VPSA will apply certain of the proceeds of the sale of VPSA's Bonds, together with other available money, to the purchase of the Local School Bonds on November 8, 2001, the Local School Bonds Closing Date. VPSA will also apply certain of the proceeds of the sale of VPSA's Bonds, together with other available funds, to pay accrued interest and costs of issuance of the VPSA Bonds ....................... 1 C. The Code imposes requirements on VPSA and the Local Units selling their Local School Bonds to VPSA that must be met if interest on VPSA's Bonds and interest on the Local School Bonds are to be excludable from gross income for federal income tax purposes, including a requirement that in certain circumstances, certain investment income with respect to the Local School Bonds, which income is deemed for federal income tax purposes to be investment income of VPSA's Bonds, be subject to payment, or in lieu thereof certain payments be made, to the United States Treasury .................................. 2 D. VPSA has determined that in order to fulfill its representations respecting the maintenance of the exclusion of the interest on VPSA's Bonds from gross income for federal income tax purposes, VPSA must establish a mechanism to provide accountability for the custody, investment and disbursement of the proceeds of VPSA's Bonds and the proceeds of the Local School Bonds.: ............................................................................................. 2 E. It is the purpose of this Agreement to enable VPSA (i) to fulfill the representations mentioned in the preceding subsection; (ii) subject to the constraints of the Code affecting the investment of the proceeds of tax-exempt obligations, to achieve the optimum, practicable income by the professional management of the investment and reinvestment of the proceeds of the Local School Bonds; (iii) to provide for the custody, investment and disbursement of the proceeds of the Local' School Bonds, and for the maintenance of appropriate records thereof; (iv) to meet the rebate requirement imposed by Section 148(f) of the Code, in part through the payment of either the Local Unit Rebate Requirement by each of the Local Units or the Penalty if the Penalty Election has been made on behalf of a Local Unit; and (v) to provide for the allocation and payment of the costs associated with the establishment and maintenance of this Agreement .......................... 2 NYLIB1/857121/1 ii F. The purposes set forth in the preceding subsection E shall be accomplished through SNAP. The proceeds of the Local School Bonds shall be invested in accordance with the Information Statement ...................................................................................................... 3 Section 2. Definitions ..................................................................................................................... 3 Section 3. Disposition of VPSA Bond Proceeds ........................................................................... 9 A. Prior to the Closing Date, each Local Unit will complete and submit, to the Investment Manager, the program registration form and the SNAP account registration form annexed to the Information Statement ................................................................................... 9 B. On the Closing Date, VPSA will transfer to the Depository for deposit in SNAP, in immediately available funds, an amount equal to the aggregate purchase price of all of the Local School Bonds ($[ ]) ............................................................................ 9 C. Each Local Unit hereby agrees to adhere strictly to the prescribed and recommended procedures described in the Information Statement. Each Local Unit hereby further agrees that it will not deviate from or request an exception to such procedures without first obtaining the prior written approval of VPSA. In the event of a conflict between the provisions of this Agreement and the Information Statement, the provisions of this Agreement shall control ..................................................................................... 9 Section 4. Establishment of Accounts ......................................................................................... 10 Section 5. Disposition of Local School Bond Proceeds .............................................................. 10 A. The Investment Manager shall allocate the proceeds of the Local School Bonds on the Local School Bonds Closing Date(s) to the Local Unit(s), dollar for dollar, in accordance with the respective purchase prices of their Local School Bonds set forth in Exhibit A to this Agreement. There is no accrued interest on the Local School Bonds. Except as provided in Section 5(B) - ([~]) below, the proceeds of VPSA's Bonds allocated to each Local Unit shall be credited to the Principal SubaCcount of the Local Unit in the amounts set forth in Exhibit A with respect to the Subsidy Local School Bonds and/or the Non-Subsidy Local School Bonds, as the case may be .................................... 10 B. [ ] .................................................................................... 11 Section 6. Investment of Principal Subaccount ........................................................................... 11 Section 7. Disbursements from Principal Subaccount ................................................................. 11 Section 8. Investment of Income Subaccount .............................................................................. 12 Section 9. Income Subaccount ..................................................................................................... 12 A. The Investment Manager will notify a Local Unit and VPSA when the balance to the credit of the Principal Subaccount of such Local Unit shall have been reduced to zero ($0). Such Local Unit may then withdraw from its Income Subaccount an amount not in excess of the amount then to the credit of its Income Subaccount if the Local Unit NYLIB1/857121/1 nl qualifies for any one of the Rebate Exceptions or if such withdrawal is necessary to qualify for one of the Spending Exceptions .................................................................................. 12 1. In order to qualify for the Small-Issuer Exception, the Local Unit must deliver to VPSA and the Investment Manager no later than the end of calendar year 2001 (a) a letter from, or opinion of, nationally recognized bond counsel that the Local School Bonds of such Local Unit purchased by VPSA with the proceeds of the VPSA's Bonds will be treated as meeting the requirements of Code Sections 148(0(2) and (3), pursuant to Code Section 148(f)(4)(D); and (b) the Local Unit's covenant that it shall provide for the payment or reimburse VPSA for its payment of the Local Unit's Rebate Requirement in the event that the Local School Bonds of such Local Unit fail to meet all of the requirements of the Small Issuer Exception ................................................................................................................ 12 2. In order to determine if a Local Unit qualifies for either the Six-Month Exception or the Eighteen-Month Exception, the Investment Manager shall advise each Local Unit and VPSA of the amount that has been disbursed from the Principal Subaccount and the Income Subaccount of such Local Unit (a) six (6) months from the Local School Bonds Closing Date, Co) twelve (12) months from the Local School Bonds Closing Date, and (c) eighteen (18) months from the Local School Bonds Closing Date. To facilitate such determination, each Local Unit shall set forth on the signature page for such Local Unit the amount of investment proceeds that such Local Unit reasonably expects as of the Local School Bonds Closing Date to earn .................................................................................. 13 3. In order to determine if a Local Unit qualifies for the Two-Year Exception, the Investment Manager shall advise each Local Unit and VPSA, of the amount of Available Co .nstruction Proceeds that has been disbursed from the Principal Subaccount and the Income Subaccount of such Local Unit (a) six (6) months from the Local School Bonds Closing Date, (b) twelve (12) months from the Local School Bonds Closing Date, (c) eighteen (18) months from the Local School Bonds Closing Date, and (d) twenty-four (24) months from the Local School Bonds Closing Date. To facilitate such determination, each Local Unit shall set forth on the signature page for such Local Unit the amount of investment proceeds that such Local Unit reasonably expects as of the Local School Bonds Closing Date to earn and the elections that it requests VPSA to make on its behalf. Furthermore, such Local Unit shall set forth in a certificate delivered to VPSA on the Local School Bonds Closing Date such facts and circumstances as necessary to show that it reasonably expects to qualify for the Two-Year Exception ...................... 13 4. The portion of the proceeds of the VPSA Bonds applied to purchase the [ ] Bonds do not qualify for the Eighteen-Month Exception or Two-Year Exception ......................................................................................................... 14 B. Except to the extent that a Penalty Election has been made on behalf of a Local Unit, if the Local Unit fails to qualify for one of the Spending Exceptions, or is otherwise subject to the Rebate Requirement, then prior to a withdrawal from its Income Subaccount and upon receipt of such notification, the Local Unit shall promptly request, pursuant to the terms of the Information Statement, an interim Rebate Computation with NYLIB1/857121/1 iv respect to such Local Unit or an estimate of such Local Unit's Rebate Requirement for purposes of determining what amount, if any, to the credit of the Income Subaccount may be subject to rebate. Any estimate of the Local Unit's Rebate Requirement made by the Investment Manager shall also be provided to VPSA in writing. Notwithstanding anything to the contrary in the Information Statement, no disbursement will be made from the Income Subaccount until the aforementioned calculation shall have been made. The amount to the credit of the Income Subaccount that may be subject to rebate is the Income Subaccount Set Aside. On the Withdrawal Date, the Investment Manager shall (i) reserve, in the Income Subaccount, the amount of the "Income Subaccount Set Aside" until the next Rebate Computation required by Section 11 shall have been made and (ii) credit the remaining balance to the credit of the Income Subaccount to the credit of the Local Unit's Principal Subaccount ............................................................................................... 14 Section 10.Investment Losses ....................................................................................................... 15 1. losses on moneys to the credit of the Principal Subaccount shall be charged thereto; and .......................................................................................................... 15 2. losses on moneys to the credit of the Income Subaccount shall be charged first to the Principal Subaccount and then to the Income Subaccount .............................. 15 Section 11 .Rebate Computations .................................................................................................. 15 Section 12.Transfers to Income Subaccount ................................................................................. 16 Section 13.Disposition of Excess Proceeds .................................................................................. 17 A. When a Local Unit shall certify to VPSA and the Investment Manager that there are balances to the credit of the Local Unit's Principal Subaccount or Income Subaccount that will not be used for Capital Projects prior to November 8, 2004, such amount shall be retained in the Proceeds Account and, to the extent such amount is not required to be deposited to the Income Subaccount pursuant to Section 12, VPSA will, except as provided in the last sentence of this Section 13A, direct the Depository to apply such amount to redeem such Local Unit's Local School Bonds on the earliest possible date that such Bonds may be called without a penalty or premium. Notwithstanding the foregoing, when a Local Unit shall certify to VPSA and the Investment Manager that it has made an election under Section 148(f)(4)(C)(viii) or (ix) of the Code to terminate the Penalty Election, and that, pursuant to Code Section 148(f)(4)(C)(viii)(III) of such termination election, such Local Unit indicates the amount of Available Construction Proceeds to be applied to the redemption of its Local School Bonds and the date of such redemption, VPSA will direct the Investment Manager and the Depository to apply such amount toward the redemption of such Local Unit's Local School Bonds on the date indicated. 17 B. In the event that there are any balances remaining on deposit in either the Principal Subaccount or Income Subaccount of any Local Unit on November 8, 2004, such amounts will be invested by the Investment Manager in an Individual Portfolio at a Yield not in excess of the VPSA's Bond Yield or in tax-exempt obligations. [With NYLIB1/857121/I V respect to the [ ] Transferred Proceeds Account, in the event that there are any balances remaining on deposit in such account on [ ], such amounts will be invested by the Investment Manager in an Individual Portfolio at a Yield not in excess of the VPSA's Bond Yield or in tax exempt investments.] ............................................................... 17 Section 14.Rebate Payments and Penalty Payments ..................................................................... 18 A. The Local Unit Rebate Requirement of each Local Unit shall be paid to the United States Treasury at the direction of VPSA on behalf of and for the accounts of the Local Unit and VPSA in accordance with the Letter Agreement ................................................. 18 B. The payment of the Local Unit Rebate Requirement of each Local Unit shall be in partial satisfaction with respect to the VPSA's Bonds, and total satisfaction with respect to the proceeds of the Local School Bonds on deposit in the Proceeds Account, of the requirements of Section 148(f) of the Code except to the extent that such issue of Local School Bonds may be treated as a composite issue under Treasury Regulation § 1.150-1 (c) with another issue of obligations ............................................................................... 18 C. Notwithstanding anything to the contrary herein, ifVPSA has made the Penalty Election on behalf of a Local Unit and if such Local Unit fails to qualify for one of the Spending Exceptions, then, prior to any further disbursements from the Principal Subaccount or Income Subaccount, the Local Unit shall promptly request, pursuant to the terms of the Information Statement, a computation of the amount of the Penalty that must be paid to the United States Treasury pursuant to the Penalty Election ....................................... 18 Section 15.Duties of VPSA ........................................................................................................... 19 Section 16.Duties of the Depository ............................................................................................. 20 Section 17.Duties of Local Units ....: ................................ : ............................................................ 20 A. The Local Units will cooperate with VPSA, the Investment Manager and the Depository in order to ensure that the purposes of this Agreement are fulfilled. To that end, each Local Unit covenants and agrees that it will take any and all action and refrain from taking any and all action, as recommended by its bond counsel, to maintain the exclusion from gross income for federal income tax purposes of interest on its Local School Bonds to the same extent such interest was so excludable on the Closing Date .............. 20 B'. If a Local Unit is required to restrict the Yield on its investments, in order to comply with such covenant or to maintain the exclusion from gross income for federal income tax purposes of the interest on VPSA's Bonds, it shall timely notify the Investment Manager to restrict such Yield to the VPSA's Bond Yield. Each Local Unit agrees not to charge its general fund or otherwise set aside or earmark funds with which to pay debt service on its Local School Bonds (other than as a budget item) prior to the date of payment thereof to VPSA ................................................................................................. 20 C. Each Local Unit agrees to provide for the payment of its Local Unit Rebate Requirement and/or Penalty and acknowledges that the payment of its Local Unit Rebate Requirement and/or Penalty is necessary to maintain the exclusion from gross income for federal income tax purposes of interest on its Local School Bonds as well as the VPSA's NYL1B1/857121/1 Bonds. Each Local Unit agrees to complete and to provide to VPSA such forms as VPSA may request for filing in connection with the payment of the Local Unit Rebate Requirement and/or Penalty .......................................................................................................... 20 D. Each Local Unit hereby covenants and represents that neither the Local Unit nor any related party, as defined in Section 1.150-1 (b) of the Treasury Regulations, to such Local Unit, pursuant to any arrangement, formal or informal, will purchase the VPSA's Bonds in an amount related to the amount of Local School Bonds to be acquired from such Local Unit by VPSA .................................................................................................... 21 Section 18.Responsibilities of the Investment Manager ............................................................... 21 Section 19.Costs ............................................................................................................................ 21 Section 20.Opinions of Counsel ................................................................................................... 22 Section 21 .Amendment ................................................................................................................. 22 Section 22.Notices ........................................................................................................................ 22 Section 23.No Third Party Beneficiaries ...................................................................................... 24 Section 24.Severability ................................................................................................................. 24 Section 25.No Personal Liability .................................................................................................. 24 Section 26.Applicable Law ........................................................................................................... 25 Section 27.Counterparts .................. '. ................................ ~ ............................................................ 25 Section 28.Effective Date; Term ................................................................................................... 26 NYLIB1/857121/1 vii PROCEEDS AGREEMENT Respecting the Custody, Investment, and Disbursement of Proceeds of Local School Bonds Purchased by the Virginia Public School Authority with the Proceeds of Its $[ School Financing Bonds (1997 Resolution) Series 2001 B This PROCEEDS AGREEMENT, dated November 8, 2001 (this "Agreement"), is among the Virginia Public School Authority, a public body corporate and instrumentality of the Commonwealth of Virginia ("VPSA"), the [ | signatories to this Agreement (collectively, the "Local counties and [ ] cities that are Units", and each a "Local Unit"), Wachovia Bank, N.A., a banking institution organized under the laws of the United States and having its principal office in Winston-Salem, North Carolina, and having an office in Richmond, Virginia, and Evergreen Investment Management Company LLC, a corporation organized under the laws of Delaware and having an office in Richmond, Virginia. All capitalized terms used herein shall have the meaning given to them in Section 2 hereof. The parties hereto agree and covenant as follows.: Section 1. Recitals. A. On or before October 2, 2001, VPSA and each of the Local Units entered into a Bond Sale Agreement, pursuant to which VPSA agreed to purchase, and the Local Unit agreed to sell its Local School Bonds. B. On October 17, 2001, VPSA's Bonds were awarded at competitive bidding to the Purchaser. The Purchaser is obligated by the terms of its bid to pay the purchase price for VPSA's Bonds on the Closing Date. VPSA will apply certain of the proceeds of the sale of VPSA's Bonds, together with other available money, to the purchase of the Local School Bonds on November 8, 2001, the Local School Bonds Closing Date. VPSA will also apply certain of NYLIBl/857121/1 the proceeds of the sale of VPSA's Bonds, together with other available funds, to pay accrued interest and costs of issuance of the VPSA Bonds. C. The Code imposes requirements on VPSA and the Local Units selling their Local School Bonds to VPSA that must be met if interest on VPSA's Bonds and interest on the Local School Bonds are to be excludable from gross income for federal income tax purposes, including a requirement that in certain circumstances, certain investment income with respect to the Local School Bonds, which income is deemed for federal income tax purposes to be investment income of VPSA's Bonds, be subject to payment, or in lieu thereof certain payments be made, to the United States Treasury. D. VPSA has determined that in order to fulfill its representations respecting the maintenance of the exclusion of the interest on VPSA's BOnds from gross income for federal income tax purposes, VPSA must establish a mechanism to provide accountability for the custody, investment and disbursement of the proceeds of VPSA's Bonds and the proceeds of the Local School Bonds. E. It is the purpose of this Agreement to enable VPSA (i) to fulfill the representations mentioned in the preceding subsection; (ii) subject to the constraints of the Code affecting the investment of the proceeds of tax-exempt obligations, to achieve the optimum, practicable income by the professional management of the investment and reinvestment of the proceeds of the Local School Bonds; (iii) to provide for the custody, investment and disbursement of the proceeds of the Local School Bonds, and for the maintenance of appropriate records thereof; (iv) to meet the rebate requirement imposed by Section 148(f) of the Code, in part through the payment of either the Local Unit Rebate Requirement by each of the Local Units or the Penalty if the Penalty Election has been made on behalfofa Local Unit; and (v) to provide NYLIB1/857121/I 2 for the allocation and payment of the costs associated with the establishment and maintenance of this Agreement. F. The purposes set forth in the preceding subsection E shall be accomplished through SNAP. The proceeds of the Local School Bonds shall be invested in accordance with the Information Statement. Any statements of facts contained in these recitals pertaining to the sale of the VPSA's Bonds and the application of such proceeds, other than the purchase of the Local School Bonds, will not be deemed to be made by the Local Units except to the extent they have knowledge of such facts. Section 2. Def'mitions. In addition to the words and terms elsewhere defined in this Proceeds Agreement including the Exhibits attached hereto, the following words and terms shall have the following meanings: "Aggregate Local Units Rebate Requirement" shall be the amount calculated pursuant to the Letter Agreement. "Agreement" or "Proceeds Agreement" shall mean the Proceeds Agreement, dated November 8, 2001, among the Authority, the Local Units, the Depository and the Investment Manager. "Authorized Representative" shall mean, as apPlied to VPSA, the Depository, the Investment Manager and the Local Units, the person or each of the persons thereby designated, from time to time, in accordance with and as listed on the page of this Agreement executed by such party. NYLIB 1/857121/1 3 "Available Construction Proceeds" shall mean, as applied to each Local Unit, the sum of (i) the amount initially deposited to the Principal Account of such Local Unit pursuant to Section 5 hereof, and (ii) the investment earnings thereon, reduced by the amount of issuance costs financed by such Local Unit's Local School Bonds. In the event that the Local Unit has made the Bifurcation Election on its signature page, "Available Construction Proceeds" shall mean the sum of the amount set forth on the signature page as the portion of the issue used for construction and the investment earnings thereon, reduced by the amount set forth on the signature page as allocable to issuance expenses. "Bifurcation Election", with respect to each issue of Local School Bonds, shall mean the election made by the Local Unit to treat a portion of its Local School Bonds used for construction as a separate issue pursuant to Section 148(f)(4)(C)(v) of the Code. "Bond Sale Agreements" shall refer to the respective Bond Sale Agreements, dated as of October 2, 2001, between VPSA and each Local Issuer. "Capital Expenditure" shall mean any cost of a type that is properly chargeable to a capital account (or would be so chargeable with a proper election) under general federal income tax principles as determined at the time the expenditure is paid with respect to the property. "Capital Project" shall mean all Capital Expenditures, plus related working capital expenditures to which the de minimis exception provided by Section 1.148-6(d)(3)(ii)(A) of the Treasury Regulations to the proceeds-spent-last rule applies, that carry out the governmental purpose of the Local School Bond issue. "Closing Date" shall mean the date of delivery by the VPSA of the VPSA Bonds to the Purchaser. The Closing Date is scheduled to be November 8, 2001. NYLIB1/857121/1 4 "Code" shall mean the Internal Revenue Code of 1986, as amended. "Computation Date" shall mean each of the Installment Computation Dates and the Final Computation Date. "Contract" shall mean the Contract respecting the Virginia State Non-Arbitrage Program, between the Treasury Board of the Commonwealth of Virginia and the Investment Manager, including the Depository Agreement appearing as Appendix A thereto. "Depository" shall mean Wachovia Bank, N.A., a banking institution organized under the laws of the United States of America and having its principal office in Winston-Salem, North Carolina and an office in Richmond, Virginia and its future successors and assigns under the Depository Agreement. "Eighteen-Month Exception" shall mean the exception to the Rebate Requirement provided by Treasury Regulation Section 1.148-7(d). "Final Computation Date" shall mean the date the last bond that is part of the issue of VPSA's Bonds is discharged. "Gross Proceeds" shall have the meaning given to such term in the Letter Agreement. "Income Subaccount" shall mean the Income Subaccount established pursuant to Section 4 of this Proceeds Agreement for each Local Unit and (ii) both Income Subaccounts established pursuant to Section 4(b) of this Proceeds Agreement for the ~ Local Units described therein. "Income Subaccount Set Aside" shall have the meaning given to such'tem~ by Section 9(b) of this Agreement. NYLIB1/857121/1 5 "Individual Portfolio" shall have the meaning given to such term in the Information Statement. "Information Statement" shall mean the current Information Statement describing SNAP, as the same may be supplemented and amended. "Installment Computation Dates" shall mean November 8, 2006, and each fifth (Sth) anniversary date thereafter. "Investment Manager" shall mean the investment manager of SNAP and its successors and assigns, on the Closing Date being Evergreen Investment Management Company LLC, a corporation organized under the laws of Delaware and having an office in Richmond, Virginia. "Investment Report" shall have the meaning given to such term in Part A of the Letter Agreement. "Letter Agreement" shall mean the Letter Agreement, dated the date hereof, attached to this Agreement as Exhibit C. "Local School Bonds" shall mean general obligation school bonds of a Local Unit having the terms and provisions required by the Bond Sale Agreement. "Local School Bonds Closing Date" shall mean the Closing Date, except as otherwise provided on the page of this Agreement executed by a Local Unit; provided, however, the Local School Bonds Closing Date with respect to an issue of Local School Bonds shall not be deemed to have occurred until the related Local Unit shall have delivered the Local School Bonds to VPSA and otherwise complied with the terms of its Bond Sale Agreement. "Local Unit" or "Local Units" shall have the meaning accorded to such term by the first paragraph of this Agreement. NYLIB1/857121/1 6 "Local Unit Rebate Computation", with respect to each issue of Local School Bonds, shall mean a Rebate Computation for each Local Unit made on each Computation Date pursuant to Section 11 of this Proceeds Agreement. "Local Unit's Rebate Requirement", with respect to each issue of Local School Bonds, shall mean the amount payable to the United States Treasury calculated pursuant to the Letter Agreement. "Penalty" shall mean the amount that must be paid to the United States Treasury pursuant to the Penalty Election. "Penalty Election", with respect to each issue of Local School Bonds, shall mean the election made by the Local Unit to pay a penalty in lieu of rebate pursuant to Section 148(f)(4)(C)(vii) of the Code. "Principal Subaccount" shall mean the Principal Subaccount established pursuant to Section 4(a) of this Proceeds Agreement for each Local Unit and (ii) both Principal Subaccounts established pursuant to Section 4(b) of this Proceeds Agreement for the Local Units described therein. "Proceeds Account" shall mean, with respect to each Local Unit, its account established under Section 4 of this Proceeds Agreement. "Purchaser" shall mean [ ], the bidder offering to pay the lowest mae interest cost of VPSA's Bonds and to which VPSA awarded VPSA's Bonds at a competitive sale. "Rebate Calculation Agent" shall have the meaning given to such term in the Letter Agreement. NYLIB1/857121/I~ 7 "Rebate Computation" shall mean the computation, as of a Computation Date, of the Local Unit Rebate Requirement to such Computation Date. The amount so computed may be a positive or a negative number. "Rebate Exceptions" shall mean the Spending Exceptions and the Small-Issuer Exception, collectively. "Rebate Report" shall mean the Local Unit Rebate Computations. "Rebate Requirement" shall mean the rebate requirement imposed by Sections 148(0(2) and (3) of the Code. "Six-Month Exception" shall mean the exception to the Rebate Requirement provided by Section 148(f)(4)(B) of the Code. "Small-Issuer Exception" shall mean the eXception to the Rebate Requirement provided by Section 148(f)(4)(D) of the Code. "SNAP" shall mean the State Non-Arbitrage Program established pursuant to Article 7.1, Chapter 14, Title 2.1, Code of Virginia, as amended. "SNAP Documents" shall mean the Information Statement and the Contract. "Spending Exceptions" shall mean the Six-Month Exception, the Eighteen-Month Exception and the Two-Year Exception, collectively. "Two-Year Exception" shall mean the exception to the Rebate Requirement provided by Section 148(f)(4)(C) of the Code. "VPSA" shall mean the Virginia Public School Authority, a public body corporate and instrumentality of the Commonwealth of Virginia. "VPSA's Bond Yield" shall mean the Yield on VPSA's Bonds as set forth in the Letter Agreement. As provided in Treasury Regulation Section 1.148-4(a), the yield on each NYLIB1/857121/1 8 issue of Local School Bonds of a Local Unit the interest on which is excluded from gross income shall equal the VPSA's Bond Yield. "VPSA's Bonds" shall mean the $[ ] aggregate principal amount of VPSA's School Financing Bonds (1997 Resolution) Series 2001 B. "Withdrawal Date" shall mean the date as of which an interim Rebate Calculation is made pursuant to Section 9 of this Proceeds Agreement. "Yield" shall have the meaning accorded to such term by the Letter Agreement. Section 3. Disposition of VPSA Bond Proceeds. A. Prior to the Closing Date, each Local Unit will complete and submit, to the Investment Manager, the program registration form and the SNAP account registration form annexed to the Information Statement. B. On the Closing Date, VPSA will transfer to the Depository for deposit in SNAP, in immediately available funds, an amount equal to the aggregate purchase price of all of the Local School Bonds ($[ ]). C. Each Local Unit hereby agrees to adhere strictly to the prescribed and recommended procedures described in the Information Statement. Each Local Unit hereby further agrees that it will not deviate from or request an exception to such procedures without first obtaining the prior written approval of VPSA. In the event of a conflict between the provisions of this Agreement and the Information Statement, the provisions of this Agreement shall control. NYLIB1/857121/I 9 Section 4. Establishment of Accounts. (a) Except as provided in Section 4(b) below, the Investment Manager will establish on its books for each Local Unit one (1) account and two (2) subaccounts therein as follows: VPSA-(Name of Local Unit) Proceeds Account - Series 2001 B Issue Principal Subaccount Income Subaccount (b) The Investment Manager shall establish on its books for [ ], within the one (1) Proceeds Account for each such Local Unit, two (2) subaccounts therein, and two subaccounts within each such subaccount, as follows: VPSA- (Name of Local Unit) Proceeds Account -Series 2001 B Issue Non Subsidy Subaccount Principal Subaccount Income Subaccount Subsidy Subaccount Principal Subaccount Income Subaccount The amounts in the Principal Subaccounts and Income Subaccounts of each of these Local Units shall be combined for purposes of this Agreement. Requisitions fi:om [ ] shall specify the Subaccount fi:om which moneys are being requisitioned. If a Local Unit has elected to treat a portion of its Local School Bonds issue used for construction as a separate issue as set forth on its signature page, the Investment Manager shall maintain such records as necessary to determine the portion of the Principal Subaccount and Income Subaccount of such Local Unit allocable to the construction issue and the non- construction issue. Section 5. Disposition of Local School Bond Proceeds. A. The Investment Manager shall allocate the proceeds of the Local School Bonds on the Local School Bonds Closing Date(s) to the Local Unit(s), dollar for dollar, in NYLIB1/SS7121/1 10 accordance with the respective purchase prices of their Local School Bonds set forth in Exhibit A to this Agreement. There is no accrued interest on the Local School Bonds. Except as provided in Section 5(B) - ([ ]) below, the proceeds of VPSA's Bonds allocated to each Local Unit shall be credited to the Principal Subaccount of the Local Unit in the amounts set forth in Exhibit A with respect to the Subsidy Local School Bonds and/or the Non-Subsidy Local School Bonds, as the case may be. B.[ ]. Section 6. Investment of Principal Subaccount. The Investment Manager shall invest and reinvest moneys to the credit of the Principal Subaccount of each Local Unit for the benefit of such Local Unit in accordance with the provisions of the Information Statement and Section 18 of this Agreement. The Investment Manager shall credit to the Local Unit's Income Subaccount all income and profits from the investment and reinvestment of moneys to the credit of its respective Principal Subaccount. Section 7. Disbursements from Principal Subaccount. Beginning on its Local School Bonds Closing Date, each Local Unit may at any time withdraw all or any portion of the proceeds of its Local School Bonds credited to its Principal Subaccount (including amounts transferred to the credit of the Principal Subaccount from the Income Subaccount pursuant to Section 9), in accordance with the Information Statement and, in the case of a.reimbursement to the Local Unit, by filing with the Investment Manager a requisition or requisitions therefor in the form of Exhibit B to this Agreement signed by an Authorized Representative of the Local Unit. Notwithstanding anything to the contrary in the Information Statement, the Investment Manager agrees that, in the case of a reimbursement NYLIB1/857121/1 1 1 to the Local Unit, it shall not disburse any money from the Principal Subaccount unless and until it has received such requisition from the Local Unit. Section 8. Investment of Income Subaccount. The Investment Manager shall invest and reinvest moneys to the credit of the Income Subaccount of each Local Unit for the benefit of such Local Unit in accordance with the provisions of the Information Statement and Section 18 of this Agreement. The Investment Manager shall credit to the Local Unit's Income Subaccount all income and profits from the investment and reinvestment of moneys to the credit thereof. Section 9. Income Subaccount. A. The Investment Manager will notify a Local Unit and VPSA when the balance to the credit of the Principal Subaccount of such Local Unit Shall have been reduced to zero ($0). Such Local Unit may then withdraw from its Income Subaccount an amount not in excess of the amount then to the credit of its Income Subaccount if the Local Unit qualifies for any one of the Rebate Exceptions or if such withdrawal is necessary to qualify for one of the Spending Exceptions. 1. In order to qualify for the Small-Issuer Exception, the Local Unit must deliver to VPSA and the Investment Manager no later than the end of calendar year 2001 (a) a letter from, or opinion of, nationally recognized bond counsel that the Local School Bonds of such Local Unit purchased by VPSA with the proceeds of the VPSA's Bonds will be treated as meeting the requirements of Code Sections 148(0(2) and (3), pursuant to Code Section 148(f)(4)(D); and (b) the Local Unit's covenant that it shall provide for the payment or reimburse VPSA for its payment of the Local Unit's Rebate Requirement NYLIB1/857121/1 12 in the event that the Local School Bonds of such Local Unit fail to meet all of the requirements of the Small Issuer Exception. 2. In order to determine if a Local Unit qualifies for either the Six-Month Exception or the Eighteen-Month Exception, the Investment Manager shall advise each Local Unit and VPSA of the amount that has been disbursed from the Principal Subaccount and the Income Subaccount of such Local Unit (a) six (6) months fi'om the Local School Bonds Closing Date, (b) twelve (12) months from the Local School Bonds Closing Date, and (c) eighteen (18) months from the Local School Bonds Closing Date. To facilitate such determination, each Local Unit shall set forth on the signature page for such Local Unit the amount of investment proceeds that such Local Unit reasonably expects as of the Local School Bonds Closing Date to earn. 3. In order to determine if a Local Unit qualifies for the Two-Year Exception, the Investment Manager shall advise each Local Unit and VPSA, of the amount of Available Construction Proceeds that has been disbursed from the Principal Subaccount and the Income Subaccount of such Local Unit (a) six (6) months from the Local School Bonds Closing Date, (b) twelve (12) months from the Local School Bonds Closing Date, (c) eighteen (18) months from the Local School Bonds Closing Date, and (d) twenty-four (24) months from the Local School Bonds Closing Date. To facilitate such determination, each Local Unit shall set forth on the signature page for such Local Unit the amount of investment proceeds that such Local Unit reasonably expects as of the Local School Bonds Closing Date to earn and the elections that it requests VPSA to make on its behalf. Furthermore, such Local Unit shall set forth in a certificate delivered to NYLIBI/857121/I 13 VPSA on the Local School Bonds Closing Date such facts and circumstances necessary to show that it reasonably expects to qualify for the Two-Year Exception. 4. The Exception. as portion of the proceeds of the VPSA Bonds applied to purchase the ] Bonds do not qualify for the Eighteen-Month Exception or TwO-year B. Except to the extent that a Penalty Election has been made on behalf of a Local Unit, if the Local Unit fails to qualify for one of the Spending Exceptions, or is otherwise subject to the Rebate Requirement, then prior to a withdrawal from its Income Subaccount and upon receipt of such notification, the Local Unit shall promptly request, pursuant to the terms of the Information Statement, an interim Rebate Computation with respect to such Local Unit or an estimate of such Local Unit's Rebate Requirement for purposes of determining what amount, if any, to the credit of the Income Subaccount may be subject to rebate. Any estimate of the Local Unit's Rebate Requirement made by the Investment Manager shall also be provided to VPSA in writing. Notwithstanding anything to the contrary in the Information Statement, no disbursement will be made from the Income Subaccount until the aforementioned calculation shall have been made. The amount to the credit of the Income Subaccount that may be subject to rebate is the Income Subaccount Set Aside. On the Withdrawal Date, the Investment Manager shall (i) reserve, in the Income Subaccount, the amount of the "Income SubaccoUnt Set Aside" until the next Rebate Computation required by Section 11 shall have been made and (ii) credit the remaining balance to the credit of the Income Subaccount to the credit of the Local Unit's Principal Subaccount. NYLIB1/857121/I 14 Section 10. Investment Losses. The Investment Manager shall charge any loss realized from the investment or reinvestmcnt of moneys to the credit of the Income Subaccount and the Principal Subaccount of a Local Unit as follows: 1. losses on moneys to the credit of the Principal Subaccount shall be charged thereto; and 2. losses on moneys to the credit of the Income Subaccount shall be charged first to the Principal Subaccount and then to the Income Subaccount. Section 11. Rebate Computations. On or before each Computation Date, VPSA will prepare, or cause to be prepared, in accordance with the provisions of the Letter Agreement the Local Unit Rebate Computations. The Local Unit Rebate Computation for each Local Unit shall be made on the basis of the Investment Reports maintained by the Investment Manager for each Proceeds Account. [With respect to the amounts on deposit in the [ , and ] Transferred Proceeds Account[s], such amounts will be taken into account for purposes of the Local Unit Rebate Computation for County, respectively as applicable, only if the County, County and Note, Note and Note, respectively as applicable, do not qualify for one of the Spending Exceptions or if the Note, Note and Note, respectively as applicable, fail to meet all of the requirements of the Small Issuer Exception.] As set forth in the Letter Agreement, the Local Unit Rebate Requirement shall be calculated separately for each Local Unit. If it is determined, however, that the Local Unit Rebate Requirement is required to be calculated in the aggregate, the Local Unit Rebate NYLIBI/857121/1 15 Requirement for each Local Unit shall be equal to a percentage of the Aggregate Local Units Rebate Requirement determined by multiplying the Aggregate Local Units Rebate Requirement by a fraction, the numerator of which is the positive Local Unit Rebate Requirement calculated separately and the denominator of which is the sum of all of the positive Local Unit Rebate Requirements calculated separately. If any provision of this Agreement shall become inconsistent with any regulation or regulations promulgated under Section 148(f) of the Code subsequent to the date hereof, VPSA hereby agrees and covenants to prepare, or cause to be prepared, as soon as practicable, a Local Unit Rebate Computation for each Local Unit, in compliance with such regulation or "regulations, and VPSA, the Investment Manager and each of the Local Units hereby further agree and covenant immediately to make any and all transfers and payments required by Sections 12 and 14 of this Agreement from any moneys on deposit in the Income Subaccount and any other moneys of the Local Unit legally available for such purpose. Section 12. Transfers to Income Snbaccount. Upon receipt by a Local Unit of the Rebate Report from VPSA, if the amount on deposit in the Local Unit's Income Subaccount (including the Income Subaccount Set Aside) is less than the Local Unit Rebate Requirement of such Local Unit, the Investment Manager shall promptly charge the Principal Subaccount of such Local Unit an amount equal to the deficiency and credit its Income Subaccount such amount. To the extent that the amount on deposit in the Principal Subaccount is insufficient to remedy the deficiency, the Investment Manager shall advise VPSA and such Local Unit of the amount of the remaining deficiency, and, to the extent permitted by law, the Local NYLIB1/857121/1 16 Unit agrees to transfer promptly to the Depository, from any funds that are or may be made legally available for such purpose, the amount equal the remaining deficiency. To the extent that the amount on deposit in the Income Subaccount exceeds the Local Unit Rebate Requirement for the Local Unit, such excess shall be transferred to the Principal Subaccount of the Local Unit. Section 13. Disposition of Excess Proceeds. A. When a Local Unit shall certify to VPSA and the Investment Manager that there are balances to the credit of the Local Unit's Principal Subaccount or Income Subaccount that will not be used for Capital Projects prior to November 8, 2004, such amount shall be retained in the Proceeds Account and, to the extent such amount is not required to be deposited to the Income Subaccount pursuant to Section 12, VPSA will, except as provided in the last sentence of this Section 13A, direct the Depository to apply such amount to redeem such Local Unit's Local School Bonds on the earliest possible date that such Bonds may be called without a penalty or premium. Notwithstanding the foregoing, when a Local Unit shall certify to VPSA and the Investment Manager that it has made an election under Section 148(f)(4)(C)(viii) or (ix) of the Code to terminate the Penalty Election, and that, pursuant to Code Section 148(f)(4)(C)(viii)(III) of such termination election, such Local Unit indicates the amount of Available Construction Proceeds to be applied to the redemption of its Local School Bonds and the date of such redemption, VPSA will direct the Investment Manager and the Depository to apply such amount toward the redemption of such Local Unit's Local School Bonds on the date indicated. B. In the event that there are any balances remaining on deposit in either the Principal Subaccount or Income Subaccount of any Local Unit on November 8, 2004, such NYLIB1/857121/1 17 amounts will be invested by the Investment Manager in an Individual Portfolio at a Yield not in excess of the VPSA's Bond Yield or in tax-exempt obligations. [With respect to the [ ] Transferred Proceeds Account, in the event that there are any balances remaining on deposit in such account on [ ], such amounts will be invested by the Investment Manager in an Individual Portfolio at a Yield not in excess of the VPSA's Bond Yield or in tax exempt investments.] Section 14. Rebate Payments and Penalty Payments. A. The Local Unit Rebate Requirement of each Local Unit shall be paid to the United States Treasury at the direction of VPSA on behalf of and for the accounts of the Local Unit and VPSA in accordance with the Letter Agreement. B. The payment of the Local Unit Rebate Requirement of each Local Unit shall be in partial satisfaction with respect to the VPSA's Bonds, and total satisfaction with respect to the proceeds of the Local School Bonds on deposit in the Proceeds Account, of the requirements of Section 148(0 of the Code except to the extent that such issue of Local School Bonds may be treated as a composite issue under Treasury Regulation §1.150-1(c) with another issue of obligations. C. Notwithstanding anything to the contrary herein, if VPSA has made the Penalty Election on behalf of a Local Unit and if such Local Unit fails to qualify for one of the Spending Exceptions, then, prior to any further disbursements from the Principal Subaccount or Income Subaccount, the Local Unit shall promptly request, pursuant to the terms of the Information Statement, a computation of the amount of the Penalty that must be paid to the United States Treasury pursuant to the Penalty Election. NYLIBI/857121/1 1 8 If the amount on deposit in the Local Unit's Income Subaccount and Principal Subaccount is less than the amount of the Penalty due by such Local Unit, the Investment Manager shall advise VPSA and such Local Unit of the amount of the deficiency, and to the extent permitted by law, the Local Unit agrees to transfer promptly to the Depository, from any funds that are or may be made legally available for such purpose, the amount of the deficiency. The Penalty of each Local Unit shall be paid to the United States Treasury at the direction of VPSA on behalf of and for the accounts of the Local Units no later than ninety (90) days after the end of the spending period to which the Penalty relates. Section 15. Duties of VPSA. VPSA shall can'y out its duties and responsibilities under this Agreement and may retain agents, independent contractors and others that it deems qualified to carry out any or all of such duties and responsibilities. VPSA shall carry out, or cause to be carried out, all of its responsibilities under the Letter Agreement. VPSA shall retain a copy of all Rebate Computations for at least six (6) years after the retirement of the last of VPSA's Bonds. VPSA agrees that, except as provided in this Agreement, any rebate liability that VPSA may have on account of the investment and reinvestment of the Gross Proceeds of VPSA's bonds, including, by way of example and not of limitation, any rebate liability as a result of the investment of money credited to funds and accounts created under its bond resolutions or as a result of the advance refunding of its bonds, shall be the sole responsibility of VPSA and not any Local Unit. NYLIB 1/857121/1 1 9 Section 16. Duties of the Depository. The Depository shall carry out its duties and responsibilities under the SNAP Documents and this Agreement. Section 17. Duties of Local Units. A. The Local Units will cooperate with VPSA, the Investment Manager and the Depository in order to ensure that the purposes of this Agreement are fulfilled. To that end, each Local Unit covenants and agrees that it will take any and all action and refrain from taking any and all action, as recommended by its bond counsel, to maintain the exclusion from gross income for federal income tax purposes of interest on its Local School Bonds to the same extent such interest was so excludable on the Closing Date. B. If a Local Unit is required to restrict the Yield on its investments, in order to comply with such covenant or to maintain the exclusion from gross income for federal income tax purposes of the interest on VPSA's Bonds, it shall timely notify the Investment Manager to restrict such Yield to the VPSA's Bond Yield. Each Local Unit agrees not to charge its general fund or otherwise set aside or earmark funds with which to pay debt service on its Local School Bonds (other than as a budget item) prior to the date of payment thereof to VPSA. C. Each Local Unit agrees to provide for the payment of its Local Unit Rebate Requirement and/or Penalty and acknowledges that the payment of its Local Unit Rebate Requirement and/or Penalty is necessary to maintain the exclusion from gross income for federal income tax purposes of interest on its Local School Bonds as well as the VPSA's Bonds. Each Local Unit agrees to complete and to provide to VPSA such forms as VPSA may request for filing in connection with the payment of the Local Unit Rebate Requirement and/or Penalty. NYLIB 1/857121/I 20 D. Each Local Unit hereby covenants and represents that neither the Local Unit nor any related party, as defined in Section 1.150-1Co) of the Treasury Regulations, to such Local Unit, pursuant to any arrangement, formal or informal, will purchase the VPSA's Bonds in an mount related to the amount of Local School Bonds to be acquired from such Local Unit by VPSA. Section 18. Responsibilities of the Investment Manager. The Investment Manager shall be the agent of, and serve at the expense of, the Local Units, to manage and direct the temporary investment and reinvestment of all moneys to the credit of the Proceeds Accounts pending their disbursement to the Local Units and to make such computations as required by this Agreement. In general, the duties of the Investment Manager shall include those described in the SNAP Documents. In particular, the Investment Manager will direct the investment and reinvestment of moneys to the credit of the Subaccounts of each Local Unit in accordance with the Information Statement, the Contract and this Agreement. Section 19. Costs. Costs of SNAP are payable as provided in the Information Statement. The difference in the interest rates between VPSA's Bonds and the Local School Bonds shall be collected and retained by VPSA as partial payment of the administrative costs incurred by VPSA in connection with issuing, carrying, and repaying VPSA's Bonds, and the underwriting discount, if any, and the cost of purchasing; carrying, and selling or redeeming the Local School Bonds. VPSA will not charge any other fee to the Local Units for its services or seek NYLIB1/857121/1 21 reimbursement for its fees and expenses, including counsel fees, incurred in connection with the discharge of its duties and responsibilities under this Agreement. Section 20. Opinions of Counsel. On the Closing Date, VPSA and each Local Unit shall furnish an opinion of counsel addressed, in the case of counsel to VPSA, to all the Local Units, and in the case of counsel to the Local Units, to VPSA, to the effect that the obligations of its client under this Agreement are valid, binding and enforceable against such client in accordance with its terms. Section 21. Amendment. This Agreement may be amended only with the consent of all the affected parties; provided, however, that this Agreement shall be amended whenever, in the judgment of VPSA, based on an opinion of its counsel, such amendment is required in order to insure that interest on VPSA's Bonds shall remain excludable from gross income for federal income tax purposes to the same extent it was, in the opinion of such counsel, so excludable on the Closing Date. VPSA shall offer to amend this Agreement whenever it shall in good faith determine, based on an opinion of its counsel, that any one or more of the restrictions or requirements imposed by this Agreement upon the Local Units, or any of them, may be removed or modified without adversely affecting the exclusion of interest on VPSA's Bonds from gross income for federal income tax purposes. Section 22. Notices. Whenever notice is to be given pursuant to the provisions of this Agreement, such notice shall be deemed to have been satisfactorily given on the same day if hand delivered or telecopied during regular business hours or three (3) days after the date of postmark if mailed, first class mail, postage prepaid, as follows: NYLIB1/857121/1 22 If to VPSA, to byhand by mail by telecopier in any case Virginia Public School Authority c/o State Treasurer 3rd Floor, James Monroe Building 101 North 14th Street Richmond, Virginia 23219 Post Office Box 1879 Richmond, Virginia 23218-1879 (804) 225-3187 Attention: Public Finance Manager If to the Depository, to By hand By mail By telecopier In any case Wachovia Bank, N.A. 1021 East Cary Street Richmond, Virginia 23219 Post Office Box 27602 Richmond, Virginia 23261 (804) 697-7370 Attention: Anthony J. Conte Senior Vice President If to the Investment Manager, to By hand By mail By telecopier In any case Everg/:een Investment Management Company LLC 951 East Byrd Street Riverfront Plaza, 6th Floor Richmond, Virginia 23219 951 East Byrd Street Riverfi:ont Plaza, 6th Floor Richmond, Virginia 23219 (804) 344-6520 Attention: A1 Samper Senior Vice President NYLIB1/857121/1 23 If to a Local Unit, to the address or telecopier number indicated on the page of this Agreement executed by such Local Unit. Any such address or number may be changed by written notice given to all the other parties to this Agreement and the Investment Manager, except that a Local Unit need give such notice only to VPSA, the Depository and the Investment Manager. Section 23. No Third Party Beneficiaries. Except as herein otherwise expressly provided, nothing in this Agreement expressed or implied is intended or shall be construed to confer upon any person, firm or corporation other than the parties hereto any right, remedy or claim, legal or equitable, under or by reason of this Agreement or any provision hereof, this Agreement and all its provisions being intended to be and being for the sole and exclusive benefit of the parties hereto. Section 24. Severability. In case any one or more of the provisions of this Agreement shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Agreement and this Agreement shall be construed and enforced as if such illegal or invalid provision had not been contained herein. In case any covenant, stipulation, obligation or agreement contained in this Agreement shall for any reason be held to be in violation of law, then such covenant, stipulation, obligation or agreement shall be deemed to be the covenant, stipulation, obligation or agreement of the affected party to the full 'extent permitted by law. Section 25. No Personal Liability. All covenants, stipulations, obligations and agreements of VPSA contained in this Agreement shall be deemed to be covenants, stipulations, obligations and agreements of VPSA to the full extent authorized by the laws and permitted by the Constitution of Virginia. No NYLIB1/857121/1 24 covenant, stipulation, obligation or agreement contained herein shall be deemed to be a covenant, stipulation, obligation or agreement of any present or future member, employee or agent of VPSA or any Local Unit in his individual capacity. No member, officer, employee or agent of VPSA or any Local Unit shall incur any personal liability in acting or proceeding or in not acting or not proceeding, in good faith, reasonably and in accordance with the terms of this Agreement and the applicable laws of the Commonwealth of Virginia. Section 26. Applicable Law. This Agreement is executed with the intent that the laws of the Commonwealth of Virginia shall govern its construction. Section 27. Counterparts. This Agreement may be executed in one or more counterparts. NYLIB1/857121/I 25 Section 28. Effective Date; Term. This Agreement shall take effect on the Closing Date and shall expire on the date on which VPSA shall make the final rebate payment required by Part D of the Letter Agreement. Virginia Public School Authority By: Name: Title: Richard A. Davis Assistant Secretary and Assistant Treasurer Wachovia Bank, N.A. By: NalTle~ Title: Anthony J. Conte Senior Vice President Evergreen Investment Management Company LLC By: Name: A1 Samper Title: Senior Vice President NYLIB 1/857121/1 26 NAME OF ISSUER: Page 1 of 2 A. Address for notices, by hand, by mail and by telecopier, if any, as referred to in Section 22 above: Authorized Representative(s): Name Title Specimen Signature C. Local School Bonds Closing Date (if not November 8, 2001, enter Date of Issue of Local School Bonds): D. Is the Small Issuer Exception applicable to this Issuer? (If yes, an opinion of Bond Counsel and Issuer's covenant is i'equired as per Section 9 herein). Yes No E. Eighteen Month Exception Estimated Investment Earnings for purposes of the Eighteen-Month Exception: $ If any proceeds are used to refund prior debt, please indicate: (a) proceeds used to refund prior debt: $ (b) issuance expense allocable to the refunding portion of the issue: $ NYLIB I/857121/I 27 NAME OF ISSUER: Page 2 of 2 F. Elections with respect to Two-Year Exception: 1. Election to use actual facts in lieu of reasonable expectations for purposes of the Two-Year Exception: Yes No 2. Estimated Investment Earnings: $ 3. If any proceeds are used to refund prior debt, please indicate: (a) proceeds used to refund prior debt: $ (b) issuance expenses allocable to the refunding portion of the issue: $ 4. Bifurcation Election to treat the portion of the issue used for construction as a separate issue: Yes No If yes, state the portion of the issue used for conStruction and non-construction, respectively; (the sum of the following amounts must equal the issue price of $ reduced by any portion used for refunding purposes): (a) portion of the issue used for construction: $ (b) issuance expenses allocable to the construction portion of the issue: $ (c) portion of the issue used for non-construction: $ (d) issuance expenses allocable to the non-construction portion of the issue: $ 5. Penalty Election to pay One and One-Half Percent Penalty in lieu of rebate: Yes No City/County By: Name: Title: NYLIBI/857121/1 28 Exhibit A Page 1 of 2 LOCAL SCHOOL BONDS- NON-SUBSIDY Local Unit Albemarle County Amherst County Appomattox County City of Danville Fauquier County Frederick County City of Harrisonburg Mattlews County Spotsylvania County Stafford County Principal Amount of Bonds Purchase Price TOTAL: NYLIB1/857121/1 A-1 Exhibit A Page 2 of 2 LOCAL SCHOOL BONDS- SUBSIDY Local Unit Appomattox County City of Chesapeake Culpeper County City of Danville Essex County City of Hopewell Montgomery County City of Portsmouth City of Roanoke Roanoke County Stafford County Washington County City of Waynesboro Principal Amount of Bonds Purchase Price Total: NYLIB1/857121/1 A-2 Exhibit B [No requisition is required in conjunction with a check payable to a vendor in respect of an invoice due and payable.] FORM OF REQUISITION FOR REIMBURSEMENT BY - PRE-AUTHORIZED WIRE [To be used for REIMBURSEMENT to a Local Unit fi-om Local School Bond proceeds for an invoice or obligation that has been paid and is eligible for payment fi-om Local School Bond proceeds.] Evergreen Investment Management Company LLC 901 East Byrd Street Riverfront Plaza, 6th Floor Richmond, Virginia 23219 VIRGINIA PUBLIC SCHOOL AUTHORITY [Name of Local Unit] BOND PROCEEDS ACCOUNT - SERIES 2001 B ISSUE Requisition from the Princilial Subaccount Requisition No. __ ("item number") This requisition for payment fi-om the Principal Subaccount of the Proceeds Account is submitted in accordance with the provisions of the Proceeds Agreement dated November 8, 2001, among the Virginia Public School Authority ("VPSA"), the undersigned (the "Local Unit") and the other units of local government signatory thereto, Evergreen Investment Management Company LLC, as Investment Manager and Wachovia Bank, N.A., as Depository. You are hereby notified that you are authorized and directed by the Local Unit to pay the following obligation fi-om the Principal Subaccount: NYLIB1/857121/1 B-1 2. 3. incun'ed: 4. The item number of such payment: __ The amount[s] to be paid: $ Purpose by general classification for which such obligation was The date(s) the expenditure(s) was/were made: To reimburse the Local Unit for costs of the Local Unit through ,20_ as follows: __ School paid by the Dated 5. A copy of each supporting [invoice, work order, statement] for which reimbursement is to be made is attached hereto. 6. The obligation[s] in the stated amount[s] have been paid, and each item thereof is a proper charge against the proceeds of the Local Unit's Proceeds Account and has not been the subject of a previous withdrawal fi.om the Proceeds Account. 7. All of which is hereby certified. [Name of Local Unit] By: Authorized Local Unit Representative NYLIB1/857121/1 B-2 Virginia Public School Authority 101 North 14th Street Richmond, Virginia 23219 Exhibit C LETTER AGREEMENT November 8, 2001 Re: Custody, Investment, and Disbursement of Proceeds of Local School Bonds Purchased by the Virginia Public School Authority with the Proceeds of Its $ School Financing Bonds (1997 Resolution) Series 2001 B This LETTER AGREEMENT, dated the date shown above (this "Letter Agreement"), is between the Authority and the Investment Manager. All capitalized terms used herein shall have the meaning given to them in Part E of this Letter Agreement or in Section 2 of the Proceeds Agreement to which this Letter Agreement is attached as Exhibit C. With respect to the VPSA's Bonds, the Code requires that an amount equal to the VPSA's Rebate Requirement be paid to the United States Treasury. With respect to each issue of Local School Bonds, the Code requires that an amount equal to the Local Unit's Rebate Requirement be paid to the United States Treasury. Accordingly, VPSA hereby directs the Investment Manager, as provided below, to assist VPSA and each Local Unit to comply with the VPSA's Rebate Requirement and the respective Local Unit's Rebate Requirement. To enable VPSA and the Local Units to fulfill their respective obligations under the Proceeds Agreement and to make such payments, and to enable the Investment Manager to fulfill its obligations under this Letter Agreement, the Investment Manager will prepare, on or before December 1, 2002 and each December 1 thereafter, the Investment Reports for VPSA as of the preceding November 8 and each Local Unit as of the preceding November 8. On the basis of such Investment Reports, VPSA shall cause the Rebate Calculation Agent to prepare the Local Unit Rebate Computation setting forth the Local Unit Rebate Requirement as of each Computation Date for each Local Unit with respect to its issue of Local School Bonds as described in paragraph 3 of Part B hereto. In addition, the Investment Manager will, based on the Rebate Report, transfer, within thirty (30) days after the Computation Date of each Local Unit, fi:om its Principal Subaccount, if necessary, to its Income Subaccount, the amount required so that the amount to the credit of the Income Subaccount of each Local Unit shall equal its Local Unit Rebate Requirement. A. Investment Report With respect to all Nonpurpose Investments acquired during the term of this Letter Agreement with Gross Proceeds of each issue of Local School Bonds, the Investment Manager shall maintain separate Investment Reports for each issue of Local School Bonds. NYLIB1/857121/1 C-1 The Investment Report for each Local Unit shall reflect the investments made with respect to its Proceeds Account. B. Rebate Computation on Local School Bonds VPSA shall compute each Local Unit's Rebate Requirement with respect to its issue of Local School Bonds in accordance with the procedure described below: 1. As of each Computation Date, VPSA shall cause the Rebate Calculation Agent to determine the Future Value of all nonpurpose payments made with respect to the Nonpurpose Investments purchased with or allocated to the Gross Proceeds of the Local School Bonds, as well as any rebate payments made, to such Computation Date in accordance with the requirements of the Treasury Regulations. Unless VPSA shall otherwise direct, transaction costs incurred in acquiring, carrying, selling or redeeming such obligations, shall be accounted for as provided in the Information Statement. 2. As of each Computation Date, VPSA shall cause the Rebate Calculation Agent to determine the Future Value of all nonpurpose receipts received with respect to the Nonpurpose Investments purchased with or allocated to the Gross Proceeds of the Local School Bonds, as well as any rebate payments recovered, to such Computation Date in accordance with the requirements of the Treasury Regulations. 3. As of each Computation Date, VPSA shall subtract the amount computed pursuant to paragraph 1 from the amount computed pursuant to paragraph 2. Such amount shall be the "Local Unit Rebate Requirement" as of the Computation Date. 4. 'Each of the Local Units has covenanted in Section 17 of the Proceeds Agreement not to charge its general fund or otherwise set aside or earmark funds with which to pay debt service on its Local School Bonds (other than as a budget item) prior to the date of payment thereof to VPSA. 5. Except as provided in Section 9(A)(4) of the Proceeds Agreement, the Local Unit Rebate Requirement may be treated as being met and no rebate computation shall be required with respect to the proceeds of the VPSA's Bonds applied to purchase such Local Unit's Local School Bonds if the VPSA receives the opinions and covenants or certification described in Section 9A of the Proceeds Agreement that a Local Unit meets the requirements of the (a) Six- Month Exception, (b) Eighteen-Month Exception, (c) Small Issuer Exception, or (d) Two-Year Exception, subject to the provisions described below. (a) Six-Month Exception. Notwithstanding the fact that all of the Gross Proceeds of the Local School Bonds are spent within six (6) months of the date of issue and no other Gross Proceeds of the Local School Bonds are anticipated for the remainder of the term of the issue, if Gross Proceeds of the Local School Bonds become available after the end of the initial six-month period, the Local Unit Rebate Requirement shall be computed with respect to such Gross Proceeds in accordance with the procedure described above. (b) Eighteen-Month Exception. Notwithstanding the fact that all of the Gross Proceeds of the Local School Bonds are spent within eighteen (18) months of the date of issue and no other Gross Proceeds of the Local School Bonds are anticipated for the NYLIB1/857121/1 C-2 remainder of the term of the issue, if Gross Proceeds of the Local School Bonds become available after the end of the initial eighteen-month period, the Local Unit Rebate Requirement shall be computed with respect to such Gross Proceeds in accordance with the procedure described above. (c) Small Issuer Exception. If a Local Unit delivers to VPSA no later than the end of calendar year 2001 (i) the opinion of nationally recognized bond counsel that the Local School Bonds of such Local Unit purchased by VPSA with the proceeds of the VPSA's Bonds will be treated as meeting the requirements of Code Sections 148 (0(2) and (3) pursuant to Code Section 148 (f)(4)(D) and (ii) the Local Unit's covenant that it shall provide for the payment of or reimburse VPSA for its payment of the Local Unit Rebate Requirement in the event that the Local School Bonds of such Local Unit fall to meet all the requirements of the Small Issuer Exception, then no rebate computation shall be made with respect to the proceeds of VPSA's Bonds applied to purchase such Local School Bonds. Although the Local School Bonds of a Local Unit may qualify for the Small Issuer Exception, custody, investment and disbursement of the proceeds of the VPSA's Bonds applied to the purchase of the Local Unit's Local School Bonds shall continue under the Proceeds Agreement, and the Investment Manager shall continue to provide an Investment Report for such Local Unit. [Notwithstanding the foregoing, the Bonds, Bonds, Bonds and Bonds do not qualify for the Eighteen Month Exception or the Two Year Exception. Furthermore, with respect to the amounts on deposit in the Transferred Proceeds Account, Transferred Proceeds Account and Transferred Proceeds Account, such amounts will be taken into account for purposes of computing the Local Unit Rebate Requirement for County, County and County, respectively as applicable, but only if the Note, Note and Note, respectively as applicable, do not qualify for one of the Spending Exceptions or if the Note, Note and Note, respectively as applicable, fail to meet all of the requirements of the Small Issuer Exception.] 6. In addition to the foregoing, no rebate computation shall be required with respect to the proceeds of the VPSA's Bonds applied to purchase a Local Unit's Local School Bonds if a Penalty Election has been made on behalf of the Local Unit with respect to such Local School Bonds. C. Aggregate Rebate Computation on Local School Bonds In the event that the Treasury Regulations require that the Local Units' Rebate Requirements be calculated in the aggregate, VPSA shall compute the Aggregate Local Units' Rebate Requirement in accordance with the procedure set forth below. 1. As of each Computation Date, VPSA shall cause the Rebate Calculation Agent to determine the Future Value of all nonpurpose payments made with respect to the Nonpurpose Investments purchased with or allocated to the Gross Proceeds of all of the Local School Bonds in the aggregate (except those qualifying for one of the Rebate Exceptions or those that have NYLIB 1/857121/1 C-3 made the Penalty Election), as well as any rebate payments made, to such Computation Date in accordance with the requirements of the Treasury Regulations. 2. As of each Computation Date, VPSA shall cause the Rebate Calculation Agent to determine the Future Value of all nonpurpose receipts received with respect to the Nonpurpose Investments purchased with or allocated to the Gross Proceeds of all of the Local School Bonds in the aggregate (except those qualifying for one of the Rebate Exceptions or those that have made the Penalty Election), as well as any rebate receipts recovered, to such Computation Date in accordance with the requirements of the Treasury Regulations. 3. As of each Computation Date, VPSA shall subtract the amount computed pursuant to paragraph 1 from the amount computed pursuant to paragraph 2. Such amount shall be the "Aggregate Local Units' Rebate Requirement" as of the Computation Date. D. Rebate Payment 1. Upon the calculation of the Local Unit Rebate Requirement for each Local Unit, VPSA shall notify the Investment Manager thereof. The Investment Manager shall promptly charge the Principal Subaccount of a Local Unit to the extent the amount on deposit to the credit of its Income Subaccount is less than its Local Unit Rebate Requirement and credit its Income Subaccount with an amount such that the balance to the credit of the Income Subaccount is equal to such Local Unit Rebate Requirement (taking into account prior amounts credited to the Income Subaccount including investment income thereon). To the extent that the amount on deposit in the Principal Subaccount is insufficient to provide for a deposit to the Income Subaccount such that the balance in the Income Subaccount is equal to the Local Unit Rebate Requirement for the Local Unit, the Investment Manager shall advise VPSA and such Local Unit of the amount of the deficiency so that the Local Unit may promptly transfer to the Depository the amount required pursuant to Section 12 of the Proceeds Agreement. 2. In addition to the computation of the Local Units' Rebate Requirement, VPSA shall calculate its Rebate Requirement with respect to Nonpurpose Investments that were acquired with the Gross Proceeds of the VPSA's Bonds in accordance with the procedures set forth in the Tax Certificate executed by VPSA in connection with the issuance of the VPSA's Bonds. 3. The Local Unit Rebate Requirement for each Local Unit, if a positive number, shall be paid at the direction of VPSA to the United States in installments. Each payment shall be made not later than sixty (60) days after each Computation Date. Each payment must be in an amount not less than the total of ninety percent (90%) of the Local Unit Rebate Requirement for each Local Unit as of each Installment Computation Date. All of the Local Unit Rebate Requirement must be paid to the United States within sixty (60) days after the Final Computation Date. Payment shall be made to the Internal Revenue Service Center, Ogden, Utah 84201 and be accompanied byForm 8038-T. VPSA shall make such payment as required. Investment Reports and records of the determinations made hereunder shall be retained by the Investment Manager and by VPSA, respectively, until six (6) years after the retirement of the last of VPSA's Bonds. NYLIB1/857121/1 C-4 E. Definitions In addition to the words and terms defined in the Proceeds Agreement to which this Letter Agreement is attached as Exhibit C, the following words and terms shall have the following meanings: "Bond Resolution" shall mean the resolution of the Authority adopted on October 23, 1997, as amended and restated on October 5, 1998, and as supplemented. "Fair Market Price" shall mean the purchase price and disposition price of a Nonpurpose Investment. Any Nonpurpose Investment purchased must be purchased at the Fair Market Price. An investment that is not of a type traded on an established market, within the meaning of Section 1273 of the Code, is rebuttably presumed to be acquired or disposed of at a price that is not equal to its fair market value. Accordingly, a premium may not be paid to adjust the yield on an investment, a lower interest rate than is usually paid may not adjust the yield on an investment and no transaction may result in a smaller profit or larger loss than would have resulted if the transaction had been at ann's-length and had the yield with respect to the Bonds not been relevant to either party. Pursuant to Treasury Regulation Section 1.148-5(d), the following are safe harbors for establishing the Fair Market Price of certificates of deposit and guaranteed investment contracts: (i) Certificate of Deposit. A certificate of deposit with a fixed interest rate, fixed payment schedule and a substantial penalty for early withdrawal will be deemed purchased for fair market value if the yield on the certificate of deposit is not less than (i) the yield on reasonably comparable direct obligations of the United States and (ii) the highest yield published or posted by the provider to be currently available fi.om the provider on reasonably comparable certificates offered to the public. See Section 1.148- 5(d)(6)(ii) of the Treasury Regulations. (ii) Investment Agreement. Investments pursuant to a guaranteed investment contract will be regarded as being made at fair market value if NYLIBI/857121/1 (a) A bona fide solicitation for a guaranteed investment contract is made that satisfies all of the following requirements: (A) the bid specifications are in writing and are timely forwarded to potential providers, (B) the bid specifications include all material terms that may directly or indirectly affect the yield or the cost of the guaranteed investment contract, (C) the bid specifications include a statement notifying potential providers that submission of a bid is a representation that the potential provider did not consult with any other potential provider about its bid, that the bid was determined without regard to any other formal or informal agreement that the potential provider has with the Issuer or any other person (whether or not in connection with the issuance of the Bonds), and that the bid is not being submitted solely as a courtesy to the Issuer or any other person for purposes of satisfying the requirements contained in Section 1.148- 5(d)(6)(iii)(B)(1) or (2) of the Treasury Regulations, (D) the terms of the bid specifications are commercially reasonable in that there is a legitimate business purpose for each term other than to increase the purchase price or reduce the yield of the guaranteed investment contracts, (E) the terms of the solicitation take into C-5 account the reasonably expected deposit and drawdown schedule for the amounts to be invested, (F) all potential providers have an equal opportunity to bid and no potential provider is given the opportunity to review other bids (i.e., a "last look") before providing a bid, (G) in those cases where the Issuer engages a bidding agent to conduct the bidding, such agent did not bid to provide the investment, and (H) at least three reasonably competitive providers are solicited for bids. A "reasonably competitive provider" is a provider that has an established industry reputation as a competitive provider of investments of the same type as such guaranteed investment contract; (b) At least three bona fide bids on the guaranteed investment contract are received from providers that have no material financial interest in the Bonds. The following are deemed to have a material financial interest in the Bonds: (A) the lead purchaser in a negotiated underwriting transaction until 15 days after the issue date of the issue, (B) any entity acting as a financial advisor with respect to the purchase of the guaranteed investment contract at the time the bid specifications are forwarded to potential providers, and (C) a provider that is a related party to a provider that has a material financial interest in the execution and delivery of the Bonds; (c) At least one of the three bids received is from a reasonably competitive provider, as described above; (d) The winning bidder provides a certificate that (A) lists the recipients, amounts and purposes of any brokerage fee, placement fee, commission or administrative costs that it is paying (or expects to pay) to third parties in connection with supplying the guaranteed investment contract, (B) states that the yield on the guaranteed investment contract is not less than the yield available from the provider 6n reasonably coml~arable guaranteed investment contracts offered to other persons from sources of funds other than gross proceeds of tax- exempt obligations, and (C) in those agreements wherein the Issuer deposits amounts (other than amounts deposited in debt service funds or reasonably required reserve or replacement funds) states that the Issuer's draw-down schedule was a significant factor in determining the terms of the guaranteed investment contract; (e) The highest yielding guaranteed investment contract for which a bona fide bid was made is purchased (determined net of broker's fees, if any); and (f) The following records are retained with the bond documents until three years after the last outstanding Bond is redeemed: (A) a copy of the guaranteed investment contract, (B) the receipt or other record amount actually paid for the guaranteed investment contract, including a record of any administrative costs paid and the certification under subsection (d) hereof, (C) for each bid that is submitted, the name of the person and entity submitting the bid, the time and date of the bid, and the bid results, and (D) the bid solicitation form and, if the terms of the guaranteed investment contract deviated from the bid solicitation form or a NYLIB1/857121/1 C-6 submitted bid is modified, a brief statement explaining the deviation and stating the purpose for the deviation. "Future Value" of a payment or receipt at the end of any period is determined using the economic accrual method and equals the value of that payment or receipt when it is paid or received (or treated as paid or received), plus interest assumed to be earned and compounded over the period at a rate equal to the Yield on the VPSA's Bonds, using the same compounding interval and financial conventions used to compute that yield. "Gross Proceeds" shall have the meaning ascribed to such term in Section 148 of the Code and shall mean: (a) amounts actually received or constructively received by VPSA fi:om the sale of the VPSA's Bonds and the amounts actually or constructively received by the Local Units fi:om the sale of the Local School Bonds, other than any interest accruing on the VPSA's Bonds from the dated date to the issue date of such bonds; (b) amounts treated as Transferred Proceeds (as defined in Treasury Regulations Section 1.148-9) of the VPSA's Bonds or the Local School Bonds, if any; (c) amounts that are reasonably expected to be or are in fact used to pay debt service on the Bonds including amounts in the sinking fund portion of the 1997 Income Fund under the Bond Resolution and the 1997 Sinking Fund under the Bond Resolution; (d) securities or obligations pledged by the VPSA or Local Unit as security for payment of debt service with respect to the VPSA's Bonds or the Local School Bonds; (e) amounts received with respect to any investments acquired with Gross Proceeds for the purpose of carrying out the governmental purpose for which the VPSA's Bonds or the Local School Bonds were issued, including the Local School Bonds, except that such amounts shall not include amounts, if any, that are properly allocable to qualified administrative costs recoverable under Treasury Regulation Section 1.148-5(e) or to the higher yield permitted under Treasury Regulation Section 1.148-2(d) or Section 143(g) of the Code; (f) amounts treated as "replacement proceeds" of the VPSA's Bonds or the Local School Bonds within the meaning of section 1.148-1(c) of the Treasury Regulations; (g) any funds that are part of a reserve or replacement fund for-the VPSA Bonds or Local School Bonds; and (h) amounts received as a result of investing any Gross Proceeds. NYLIB1/857121/1 C-7 Gross Proceeds shall include amounts that are on deposit in the Income Subaccount to the extent that such amounts are derived from Gross Proceeds of the VPSA's Bonds or the Local School Bonds. The determination of whether an amount is included within this definition shall be made without regard to whether the amount is credited to any fund or account established under the Bond Resolution, or whether the amount is subject to the pledge of the Bond Resolution. For purposes of subsection (d) above, an amount is pledged to pay principal or interest with respect to VPSA's Bonds or Local School Bonds if there is a reasonable assurance that the amount will be available for such purposes in the event that the VPSA or Local Unit encounters financial difficulties. An amount can be indirectly pledged to pay principal or interest with respect to VPSA's Bonds or Local School Bonds if it is pledged to a guarantor of either or both such bonds. An amount may be "negatively" pledged to pay principal or interest with respect to VPSA's Bonds or Local School Bonds if it is held under an agreement to maintain the amount at a particular level for the direct or indirect benefit of the holders of the bonds or a guarantor of the bonds. An amount is not negatively pledged however if (i) VPSA or the Local Units may grant rights in the amount that are superior to the rights of the holders of the bonds or a guarantor of the bonds, or (ii) the amount does not exceed reasonable needs for which it is maintained, the required level is tested no more frequently than every 6 months, and the amount may be spent without any substantial restriction other than a requirement to replenish the amount by the next testing date. If a decision is made to apply any insurance or condemnation proceeds to the redemption of VPSA's Bonds or Local School Bonds instead of using such proceeds for repair or replacement, any such proceeds become Gross Proceeds on the date of such a decision. The definition of Gross Proceeds has been set out in full for the sake of completeness. With respect to each Local School Bond, all of the Gross Proceeds are on deposit in such Local Unit's Proceeds Account except t6 the extent that th~ Local School Bonds may be part of a composite issue under Treasury Regulation §1.150-1(c), or the Local Unit may have retained Transferred Proceeds. With respect to the VPSA's Bonds, all of its Gross Proceeds are the total of the amounts on deposit in the Proceeds Accounts of the Local Units, except as provided above, and the amounts on deposit in the sinking fund portion of its 1997 Income Fund under the Bond Resolution and the 1997 Sinking Fund under the Bond Resolution. "Investment Report" shall mean the record of investment activity maintained by the Investment Manager with respect to the investment property and the Local Units, as described in the Letter of Instructions to the Investment Manager from the Treasury Board of the Commonwealth of Virginia dated [May 1, 2000]. "Local Unit's Rebate Requirement" shall mean the sum of (i) the excess of (A) the aggregate amount earned on all Nonpurpose Investments acquired with the Gross Proceeds of the Local School Bonds over (B) the amount that would have been earned if the Nonpurpose Investments had a Yield equal to the VPSA's Bond plus (ii) any income attributable to the excess described in clause (i). "Nonpurpose Investments" shall mean any security, obligations, annuity contract or any other investment-type property (as such term is defined in Section 1.148-1(b) of the Treasury NYLIBI/857121/1 C-8 Regulations) that is not acquired to carry out the governmental purpose of the VPSA's Bonds or the Local School Bonds. Nonpurpose Investments shall not include Tax-Exempt Investments. Any Nonpurpose Investments shall be purchased by the Investment Manager only if the purchase price of the Nonpurpose Investment is the Fair Market Price. "Rebate Calculation Agent" shall mean that accounting firm with a favorable national reputation in the field of the calculation of amounts subject to rebate to the United States under Section 148(0 of the Code and the Temporary Regulations that has been appointed under Section 9.2 of the Contract or by VPSA. "Tax-Exempt Investments" shall include: (i) obligations the interest on which is excludable from gross income for federal income tax purposes, and not treated as an item of tax preference under Section 57(a)(5)(C) of the Code, (ii) stock in a regulated investment company to the extent that at least 95% of the income to the holder of the interest is excludable fi:om gross income under Section 103 of the Code, and (iii) certificates of indebtedness issued by the United States Treasury pursuant to Demand Deposit State and Local Government Series program described in 31 CFR part 344 ("SLGs"). "Treasury Regulations" shall mean the Treasury Regulations Sections 1.148-0 through 1.148-11, 1.149(b)-1, 1.149(d)-1, 1.149(e)-1, 1.149(g)-1, Section 1.150-1 and Section 1.150-2, as amended from time to time hereafter, and other regulations promulgated under Section 148 of the Code. "VPSA's Rebate Requirement" shall mean the sum of (i) the excess of (A) the aggregate amount earned on all Nonpurpose' Investments acquired with the Gross Proceeds of VPSA's Bonds over (B) the amount that would have been earned if the Nonpurpose Investments had a Yield equal to VPSA's Bond Yield plus (ii) any income attributable to the excess described in clause (i). "Yield", for purposes of this Letter Agreement, shall be calculated pursuant to the Treasury Regulations by means of an actuarial method of yield calculation whereby "yield" means that discount rate which, when used in computing the present value of all the unconditionally payable payments of principal and interest and all the payments for a qualified guarantee paid and to be paid with respect to the bond, produces an amount equal to the issue price of the bond. For purposes of this Letter Agreement, the Yield on VPSA's Bonds is [ ]%. The Yield on investments must be computed by the use of the same frequency interval of compounding interest as is used in computing the Yield on the VPSA's Bonds and the Local School Bonds. NYLIBI/857121/1 C-9 F. Amendments In order to comply with the covenants by VPSA and each of the Local Units regarding compliance with the requirements of the Code and the exclusion from federal income taxation of the interest paid and to be paid on the Local School Bonds and VPSA's Bonds, the procedures described in this Letter Agreement may be modified as necessary, based on the advice of counsel, to comply with rulings, regulations, legislation or judicial decisions as may be applicable to such bonds. Very truly yours, VIRGINIA PUBLIC SCHOOL AUTHORITY By: NalTle~ Title: Richard A. Davis Assistant Secretary and Assistant Treasurer Accepted: Evergreen Investment Management Company LLC By: Name: A1 Samper Tire: Senior Vice President NYLIB 1/857121/1 C-10 Exhibit D AUTHORIZED REPRESENTATIVES The following are the Author/zed Representatives of Virginia Public School Authority, Wachovia Bank, N.A. and Evergreen Investment Management Company LLC: VIRGINIA PUBLIC SCHOOL AUTHORITY: Name Richard A. Davis Dora D. Fazzini Title Assistant Secretary and Assistant Treasurer Assistant Secretary and Assistant Treasurer Specimen Signature Nalrle Anthony J. Conte WACHOVIA BANK, N.A.: Title Senior Vice President Specimen Signature EVERGREEN INVESTMENT MANAGEMENT COMPANY LLC: Name A1 Samper Title Senior Vice President Specimen Signature NYLIB1/857121/1 D-1 RECEIVED CITY ClFRK~ ~'eF~,F ~-ft'T~:e ~f't'~, 'l'y Manager October 1, 2001 Honorable Ralph K. Smith, Mayor, and Members of City Council Roanoke, Virginia Dear Mayor Smith and Members of Council: Subject: Fair Housing Board Update This is to request 10 minutes on Council's 2:00 p.m. agenda for a report from the Fair Housing Board. Respectfully submitted, City Manager DLB:ca c: City Attorney Director of Finance City Clerk Room 364 Municipal South 215 Church Avenue, S.W. Roanoke, Virginia 24011-1591 (540) 853-2333 FAX (540) 853-1138 CityWeb :www. ci.roanoke.va.us CITY OF ROANOKE Office of the City Clerk Mary F. Parker, CMC City Clerk Stephanie M. Moon Deputy City Clerk October 3, 2001 File #5-262-301-472 Darlene L. Burcham City Manager Roanoke, Virginia Dear Ms. Burcham: I am attaching copy of Ordinance No. 35593-100101 authorizing the City Manager to execute an amendment to an Intergovernmental Agreement, dated December 17, 1997, with Roanoke County to reflect the use and maintenance of Mobile Data Terminals in the Regional 800 MHz Trunking Radio System, upon certain terms and conditions, and dispensing with the second reading of this ordinance by title. The abovereferenced measure was adopted by the Council of the City of Roanoke at a regular meeting which was held on Monday, October 1,2001, and will be in full force and effect ten days following the date of adoption. Sincerely, Mary F ,-.,,k ', 9MC City Clerk MFP:mh Attachment pc: Mary H. Allen, Clerk, Board of Supervisors, Roanoke County, P. O. Box 29800, Roanoke, Virginia 24018-0798 Joseph D. Slone, Director, Department of Technology Barry L. Key, Director, Office of Management and Budget H:~genda.01\October I, 2001 correspondance.wpd IN THE COUNCIL OF THE CITY OF ROANOKE, VIRGINIA The 1st day of October, 2001. No. 35593-100101. AN ORDINANCE authorizing the City Manager to execute an amendment to an Intergovernmental Agreement, dated December 17, 1997, with Roanoke County concerning the Regional 800 MHz Tmnking Radio System, upon certain terms and conditions, and dispensing with the second reading of this ordinance by title. WHEREAS, the City of Roanoke entered into an agreement with Roanoke County on December 17, 1997, for the installation and maintenance of an 800 MHz Regional Tmnking Radio System; and WHEREAS, since the Intergovernmental Agreement was entered into, the City of Roanoke and Roanoke County are now using Mobile Data Terminals in their public safety vehicles that utilize the 800 MHz Regional Tmnking Radio System, and WHEREAS, the Intergovernmental Agreement needs to be amended to include the use and maintenance of the Mobile Data Terminals in the 800 MHz Regional Thinking Radio System. THEREFORE, BE IT ORDA/NED by the Council of the City of Roanoke as follows: 1. The City Manager is hereby authorized to execute an amendment to the existing Intergovernmental Agreement with Roanoke County to reflect the use and maintenance of Mobile Data Terminals in the 800 MHz Regional Trunking Radio System, as more particularly stated in the City Manager's letter to Council dated October 1, 2001, such amendment to be in form as approved by the City AttorneM 2. Pursuant to the provisions of Section 12 of the City Charter, the second reading of this ordinance by title is hereby dispensed with. ATTEST: City Clerk. REI;E!VF.D CITY CLF,RKS 0FFl(~ice of the City Manager 131 ~;~ ?_5 P3:33 October 1, 2~j01 Honorable Ralph K. Smith, Mayor Honorable William H. Carder, Vice Mayor Honorable William D. Bestpitch, Council Member Honorable C. Nelson Harris, Council Member Honorable W. Alvin Hudson, Jr., Council Member Honorable William White, Sr., Council Member Honorable Linda F. Wyatt, Council Member Dear Mayor Smith and Members of Council: Subject: Amendment to Regional 800 Mhz Trunking System Intergovernmental Agreement Background: City Council authorized an 800 MHz Regional Radio system and entered into an Intergovernmental Agreement with Roanoke County in December, 1997 for installation and maintenance of the system. The regional radio system was placed into use in 1999 for Public Safety and is now being used by other departments in the City. The initial agreement focused only on the system and the handheld/mobile units that supported the use of voice transmissions. Considerations: Since the initial agreement was approved in 1997, the City is upgrading its Mobile Data Terminals (MDTs) in its public safety vehicles. Roanoke County is also purchasing MDTs for use in their vehicles. Both localities are now utilizing the 800 Mhz Trunking System, sharing common radio frequencies as approved by the FCC, for transmission of data to these MDTs. The Intergovernmental Agreement needs to be amended to include the use and maintenance of these units in the system. The changes requested to the contract add the following items: Inclusion of the MOSCAD fire alerting equipment used by the City of Roanoke; Expansion of the mobile data equipment for use by both localities; Designation of the County as the contracting agent for maintenance agreements for the equipment and as insurer of the equipment (reimbursed by the City); Change in the designation of the named system manager by the City and the County. Room 364 Municipal South 215 Church Avenue, S.W. Roanoke, Virginia 24011-1591 (540) 853-2333 FAX (540) 853-1138 CityWeb :w~vw. ci. roanoke .va. us Honorable Mayor and Members of Council October 1, 2001 Page 2 A copy of the red-line version of the contract is attached. Funds for equipment and maintenance contracts are already included in the operating budgets of the using departments and no appropriation of monies is required. Recommended Action: Authorize the City Manager to execute an amendment to the existing Intergovernmental Agreement with Roanoke County to reflect the use and maintenance of MDTs in the Regional 800 Mhz Trunking Radio System as approved by the City Attorney. A similar request is being made by the staff of the County of Roanoke. Respectfully submitted, City Manager DLB:JS C; Mary F. Parker, City Clerk William M. Hackworth, City Attorney Joe D. Slone, Director, Department of Technology Barry L. Key, Director, OMB #CM01-00230 DRAFT THIS INTERGOVERNMENTAL AGREEMENT for the establishment of a joint Public Safety Radio System is entered into as of the 17th day of December, 1997, amended on 1 October 2001, by and between the CITY OF ROANOKE (the "City") a municipal corporation of the Commonwealth of Virginia, and the COUNTY OF ROANOKE (the "County"), a political subdivision of the Commonwealth of Virginia; RECITALS WHEREAS, the City and County have the power to establish a system to serve their fire, police, emergency and other radio communications; and WHEREAS, the City and County have determined that it is in their mutual best interest to jointly cause the existing County 800 MHZ tmnked radio communications system to be expanded and equipped to serve the fire, police, emergency and other radio communication needs of both the City and County; and WHEREAS, pursuant to Section 15.2-1300 of the Code of Virginia, 1950, as amended, the City and County have determined to exercise jointly their powers with respect to the System, as provided for in this Agreement; and WHEREAS, the City and County desire to enter into this Agreement for the purpose of providing the details relating to the operation of the System and the relationship among the City and County; WITNESSETH THAT FOR AND IN CONSIDERATION of the mutual covenants and agreements contained herein, the parties hereto, pursuant to the provisions of Section 15.2-1300 of the Code of Virginia (1950), as amended, do covenant and agree to the following: I. DEFINITIONS AND WARRANTIES A. DEFINITIONS "Agreement" shall mean this Intergovernmental Agreement, and any and all amendments hereto. e "Associated System Assets" shall mean System assets and equipment not designated as Fixed Network Equipment that are required for operation of the System, and shall include buildings, dispatch center ¢l¢cti-onic ~3filma~a'~md furniture, fences, generators, grounding systems, HVAC systems, rights of way, roadways, site leases, towers, and uninterruptible power supplies (UPS) and the fire alerting MOSCAD equipment. DRAFT 0 "City" shall mean the City of Roanoke, Virginia, its successors and assigns. e "Contract" shall mean the Communication Systems Agreement dated December 17, 1997, negotiated by the City, County, and Motorola, Inc., for the construction of the System, including all attachments thereto. e "County" shall mean the County of Roanoke, Virginia, its successors and assigns. 0 "Fixed Network Equipment" shall mean the System equipment currently owned and to be purchased by the City and County and located at System sites. This equipment is the infrastructure necessary to facilitate the use of subscriber units on the 800 MHZ tmnked radio System, the Mobile Data Radio System and other Radio Communications systems and shall include all equipment that is common to both City and County such as antenna network equipment, base stations, controllers, fault management network equipment, radio console equipment at all dispatch centers, microwave network equipment, and simulcast network equipment. "Subscriber Equipment: shall mean the mobile and portable radios used by the City and County on the System. Se "System" shall mean the radio communications system to be jointly constructed by the City of Roanoke and County of Roanoke. B. REI~P~, SENTATIVES REPRESENTATIONS AND WARRANTIES Each of the parties hereto makes the following mpeexenta6~,es representations and warranties, all of which shall continue for the duration of this Agreement: It has full power and authority to enter into this Agreement and to consummate and carry out the transactions contemplated by this Agreement. It has taken or will take all action required by this Agreement and other applicable laws in connection therewith. 2. It has duly authorized the execution and delivery of this Agreement. 0 The execution and delivery of this Agreement and the performance of its obligations hereunder are within its corporate powers and will not conflict with, or constitute a breach or result in a violation of (1) any Federal or Virginia Constitutional or statutory provision, (2) in any material respect, any agreement or other instrument to which such party is a party or by which it is bound, or (3) any order, rule, regulation, decree or ordinance of 2 DRAFT any court, govemment or government authority having jurisdiction over it or its property. m There is no litigation at law or in equity or any proceeding before any governmental agency pending or, to its knowledge, threatened with respect to (1) its existence, (2) its authority to execute and deliver this Agreement, (3) the validity or enforce ability of this Agreement or the transactions contemplated hereby, (4) the title of its officers who are executing this Agreement, or (5) any authority of proceedings relating to its execution and delivery of this Agreement. It is a duly organized and validly existing public body politic and corporate. II. DURATION OF AGREEMENT This Agreement shall take effect upon its proper execution pursuant to and by ordinance or resolution of the governing bodies of the parties hereto. The initial term of this Agreement shall be fifteen (15) years following its date of execution, and shall continue in effect beyond the initial term until terminated by the parties as provided in Section X. III. PURPOSE The purpose of this agreement is to provide the terms and conditions of the joint undertaking of the parties hereto with respect to the System as required by Section 15.2- 1300, Code of Virginia (1950), as amended. The joint undertaking will involve shared financing of the construction cost of the System, shared operation and maintenance of the System, and all other things which are necessary or proper to carry out the foregoing purpose. IV. SYSTEM CONSTRUCTION AND FINANCING Ae FIXED NETWORK EQUIPMENT: The System shall be constructed as described in the Contract, with the City and County jointly acquiring such Fixed Network Equipment as necessary to meet their individual and mutual communication goals. The System will utilize one site in the City (Mill Mountain) and three sites in the County (Crowell's Gap, Fort Lewis Mountain, and Poore Mountain) to provide seamless City and County wide coverage for its users. The City will allow placement of County Fixed Network Equipment at its Mill Mountain site, and the County will allow placement of City Fixed Network Equipment at its Crowell's Gap, Fort Lewis Mountain and Poore Mountain sites, in order to achieve the goal DRAFT of seamless coverage. The County's Southview location will serve as the primary equipment site for the System, and the County will enhance its dispatch operation at that location. The City will also upgrade its Emergency Communication Center (ECC), thereby allowing the ECC and Southview to serve as backup dispatch locations to each other in certain emergency situations. There shall be no charge by the City or County to the other party for access to System Fixed Network Equipment at any site for radio communications purposes. FINANCING OF FIXED NETWORK EQUIPMENT: The cost of Fixed Network Equipment necessary per the Contract shall be shared by the City and County as agreed to and represented in Attachment A to this Agreement, entitled "Revised System Equipment and Pricing List." The total cost Fixed Network Equipment for the System is $4,902,918, with the City share being $4,020,969 and the County share being $881,949. Necessary adjustments to the cost of Fixed Network Equipment during System construction will be handled by appropriate change orders agreed to by the City and County Project Managers, and the appropriate governmental administrators or governing bodies as necessary. Such change orders shall serve as the basis for amendments to this section of the Agreement. The City and County hereby agree to fund their respective cost shares of the total cost for Fixed Network Equipment. The City will serve as the primary contractor for procurement purposes. MOBILE DATA EQUIPMENT: The current system owned by the City consists of one data base station at each system site of Poore Mountain and Mill Mountain and one Radio Network Controller (RNC) at the City Municipal building. The new system will utilize the existing equipment as installed and shall have two additional base stations, to be purchased by the County, installed at two of the existing 800 MHz Radio System sites as recommended by Motorola, Inc representatives in order to achieve the goal of seamless coverage. The City's Municipal building location will serve as the primary equipment site for the Mobile Data portion of the system. The City will allow the County to connect the County's Computer Aided Dispatch equipment to the RNC through existing network equipment The City shall be the holder of the Federal Communications Commission radio frequency license for the Mobile Data portion of the system and shall be responsible for keeping the license current. The City will allow the County to Vo DRAFT utilize these frequencies and shall not charge the County for such use. There shall be no charge by the City or County to the other party for access to System Fixed Network Equipment at any site for wireless data communications purposes. 0 SUBSCRIBER EQUIPMENT: The City will also purchase Subscriber Equipment as described in Attachment A to this Agreement, entitled "Revised System Equipment and Pricing List", at a total cost to the City of $1,983,929. ge CLAIMS FOR COSTS OR DAMAGES: In the event that any claim for costs or damages is made against the City, the County or both, arising out of the Contract or as a consequence of the operation of the Agreement, the City and County System Managers shall jointly develop and recommend to their governing bodies a proposal for allocation of such costs or damages and for settlement of any claim. If the System Managers are unable to agree to a recommendation, the claim will then be handled in accordance with the procedure for "Resolution of Disputes" as set forth in Section VII.C. OWNERSHIP OF SYSTEM ASSETS Ae EXISTING SITES AND EQUIPMENT: Ownership of existing sites, including all real and personal property at each site owned by the City or County at the date of this Agreement, shall not change. Each party shall retain ownership of any Associated System Assets, Fixed Network Equipment or Subscriber Equipment currently owned by that party. Bo NEW SYSTEM EQUIPMENT: Ownership of any new Fixed Network Equipment acquired for use in the operation of the System shall remain with the party purchasing such equipment, if purchased solely by that party. If purchased with joint funds of both parties, ownership shall be divided among the purchasing parties in the proportion that each party contributed toward the purchase. The cost sharing percentages for the purchase of System assets are detailed in Attachment A to this Agreement. Ce NEW SUBSCRIBER EQUIPMENT: Ownership of any new Subscriber Equipment acquired for use in the operation of the System shall remain with the party purchasing such equipment. VI. REPLACEMENT OF SYSTEM ASSETS EXISTING ASSOCIATED SYSTEM ASSETS SITES AND EQUIPMENT: Each party to this Agreement shall be solely responsible for thc replacement of all DRAFT VII. equipment owned by that party at the signing of this Agreement, including Associated System Assets and Subscriber Equipment. NEW AND EXISTING FIXED NETWORK EQUIPMENT: The parties to this Agreement shall be jointly responsible for the replacement as necessary of Fixed Network Equipment utilized in the System for the mutual benefit of the City and County. Replacement costs shall be shared equally by both parties. Ownership of replacement equipment shall be equally divided between the City and County. SUBSCRIBER EQUIPMENT: Each party to this Agreement shall be solely responsible for the replacement of all Subscriber Equipment owned by that party. SYSTEM MANAGEMENT AND MAINTENANCE Ao Be Ce CITY AND COUNTY SYSTEM MANAGERS: The ~ City Manager will appoint in writing a member of the City Staff to of ,~,~ll,~,~,.,,~,,~,~ ,~, serve as the City System Manager and the County Administrator will appoint in writing a member of the County Staff to Coiinty's '-" ....... ~' ........ '" .... ' ---"' th C ty Sy M ~,,~,.~,,~ ~,~ ,_,~.,~o~ o~, wc¢~ w~,~ serve as e oun stem anager. SYSTEM iVIANAGER RESPONSIBILITIES: The City and County System Managers will jointly develop and implement policies and procedures necessary for the efficient and effective operation and maintenance of the combined System. In addition, they will oversee maintenance functions of the system and be responsible for administrative functions, including City and County billing for maintenance. Finally, they will develop a record keeping system adequate to facilitate the effective administration of this Agreement, to include accurate listings of System assets owned by both parties to this Agreement. RESOLUTION OF DISPUTES: Any System management issues that cannot be resolved by the City and County System Managers will be referred to the City's Assistant City Manager ~"- .........~ ~--~" - ° - ~-~- C ' ' ~,,~,,L,,~ ,,~ ~ ..~,,,~ o,~L: and the ounty s Assistant County Administrator for review and resolution. Issues that cannot be resolved at this level will be referred to the City Manager and County Administrator. If there is no resolution at this level, the issue will be submitted to arbitration as allowed under Section 15.2-1404, Code of Virginia (1950), as amended. SYSTEM ASSET MAINTENANCE Associated System Assets - Each party to the Agreement shall be primarily responsible for routine maintenance of its own Associated Systems Assets. Each party must maintain its own Associated Systems DRAFT Assets in a manner that will not interfere with the operation of the combined System. Expenses for major repairs, including the overhaul or replacement of major units such as a generator, tower, or UPS, may be cost shared in a manner mutually agreeable to all parties. Fixed Network Equipment - Both parties to this Agreement shall be jointly responsible for the maintenance of Fixed Network Equipment beginning when the City gains beneficial use of the System, as determined by Motorola, Inc. Thereafter maintenance expense shall be shared on a 50/50 basis. The County shah serve as the contracting agent as pertains to this agreement for the establishment of a maintenance contract with Motorola, Inc. The City System Manager shall have a right of approval before the County enters into such a contract and upon any changes to such a contract. The County shall bill the City for the City's portion of the contract, which shah be based on a 50/50 division of the costs for the Fixed Asset maintenance. Any additional costs, such as for maintenance of Associated System Assets such as a Fire Alerting MOSCAD system, shah be passed on to the appropriate agency to be paid in full by that agency. Maintenance costs not covered by such a contract will be paid by the County and then billed to the City for the City's share. AH invoices from either party shah be paid in full by the other party within 30 days of the invoice date. The County will keep detailed records of such maintenance actions for a period not less than 3 years. These records shall be available for review by the City's System Manager upon request. Maintenance expenses may include, but are not limited to, Motorola or other maintenance contracts for repair or replacement of cards, boards, units, replacement parts and preventative maintenance of the Fixed Network Equipment that is utilized in the System for the mutual benefit of the City and County. DRAFT Subscriber Equipment - Each party to the Agreement shall be solely responsible for maintenance of Subscriber Equipment owned by that party. ADDITION OF NEW GOVERNMENTAL USERS: Both the City and County System Managers must agree to the conditions under which additional governmental users that do not have radio unit allocations may be added to the System. VIII. INSURANCE OF EQUIPMENT D CITY EQUIPMENT LOCATED, ,.,l,'-''T A COL?4TY o.°'~""-. ~. ~'-, ,,~- ~ .......... :" III~U pUI~UIIBI pIUpUl t~ ~UIIHII~U~aLIUII~ u~UiplllUlltJ U~IIUU U~ tllU 91L~ tllat 1~ ~U~XL~ ~ ~UXi~ a3 ~UXI~XIIO tii~ ~XL~ ~UX~XIX~IIL ~ia~U UXI Ui~ tU~XL~ ~XL~. i ilU tl~ llla~ U~ Uiii~U U~ ~11~ tU~lt~ IUI LII~ COSt Ulll~i~llLlal Iii iiiS~'~iC~ pl~ilii~il~. The Coun~ shall insure the personal proper~ (F~ed Ne~ork Assets) that compr&es the entre Joint 800 MHz Radio System located at either the Coun~ or Ci~ sites. The Coun~ shall maintain an insurance deductible of not more than $1000 per occurrence, subject to the availabili~ on the commercial market, or othe~he will not hold the Ci~ liable for any amount over 50% of the deductible per occurrence as a result of damage or loss occurring to the equipment that h covered by insurance. The Coun~ may bill the Ci~ for the cost d~ferential in insurance premiu~ resulting from adding Ci~ equipment locations to the Count's current insurance policy. Associated System Assets that are eligible to be insured under the Count's policy may a&o be insured in the same manner with the owning agency being responsible for the additional insurance premium. IX. SYSTEM RADIO CAPACITY RADIO UNIT CAPACITY: Each of the four sites shall include twenty-three (23) channels, with one channel serving as the control channel for the System. At an optimum loading ratio of 100 radio units per channel, the initial radio loading for the System will be 2,300 radio units. 8 DRAFT RADIO UNIT ALLOCATION: One radio unit allocation is considered to be either one mobile radio, one hand-held portable radio, or one control station. The initial unit allocation for the City and County shall be 1,150 units each. The actual number of radio units expected to be utilized by the City and County initially are shown below by type of Subscriber Equipment: Roanoke Ci~ Roanoke County_ Mobile Radios 537 412 Portable Radios 411 572 Control Stations 50 13 TOTAL RADIO UNITS 998 997 Co AVAILABLE ALLOCATED UNITS: Should any party have more unit allocations than is required at that time for their use, any other party may request and receive on loan an amount of units up to the total of all available unit allocations. However, the borrowing party must make the borrowed allocation units available to the lending party upon ninety (90) days notice. De SYSTEM UPGRADE: When the capacity of the system is no longer adequate to meet the aggregate needs of the parties, or as new technologies emerge that will provide an improved radio system, the parties, shall jointly pursue the acquisition of additional frequencies or aiid equipment necessary to utilize such technologies or frequencies. A mutually agreeable cost sharing arrangement shall be negotiated by the parties for the acquisition of necessary equipment, and incorporated as an amendment to this Agreement. X. TERMINATION OF AGREEMENT RIGHT TO WITHDRAW: Any party to this Agreement has the right to withdraw from this Agreement after its initial term. No such termination shall become effective until twelve (12) months after written notice thereof shall have been given to all the other parties thereto. DISPOSITION OF JOINT EQUIPMENT: In the event of termination, equipment purchased with joint funds of the parties shall remain on the site to which assigned, and the terminating party shall be reimbursed for its share of the equipment purchased with joint funds. The reimbursement shall be the original cost less depreciation, as determined by an auditor jointly selected by all parties to the Agreement. Reimbursement shall occur within twelve (12) months of the date of termination. C. DISPOSITION OF SEPARATE EQUIPMENT: The terminating party may DRAFT remove any or all of its own separate equipment, unless the removal of the equipment will render the System inoperable. In such case, the party may not remove the equipment, but shall be reimbursed pursuant to section X.B, above. MISCELLANEOUS A. AMENDMENTS: This Agreement may not be amended, modified, or otherwise altered without the express written consent of all parties hereto. ATTACHMENTS A. REVISED SYSTEM EQUIPMENT AND PRICING LIST WITNESS the following signatures and seals: CITY OF ROANOKE ATTEST: By: By: Title: Title: Date: Date: ATTEST: By: COUNTY OF ROANOKE By: Title: Title: Date: Date: 10 CITY OF ROANOKE Office of the City Clerk Mary F. Parker, CMC City Clerk Stephanie M. Moon Deputy City Clerk October 3, 2001 Fire #110-249-311-327 Darlene L. Burcham City Manager Roanoke, Virginia Dear Ms. Burcham: I am attaching copy of Ordinance No. 35594-100101 authorizing execution of an Agreement among Roanoke Valley Sister Cities, Inc. (RVSC), Donna Essig and Mimi Babe Harris (Artists) and the City of Roanoke relating to construction of a work of art, the Sister Cities Sculpture, to be placed in a public space in Century Square; providing for certain improvements approved by the Architectural Review Board and the Arts Commission to be made by the City to Century Square, accepting donation of the Sister Cities Sculpture; and dispensing with the second reading of 'this ordinance by title. The abovereferenced measure was adopted by the Council of the City of Roanoke at a regular meeting which was held on Monday, October 1,2001, and will be in full force and effect ten days following the date of adoption. Mary F. Parker, CMC City Clerk MFP:mh Attachment pc: Mimi Babe Harris, 2225 Broadway, S. W., Roanoke, Virginia 24014 Donna L. Essig, 8966 Snow Creek Road, Penhook, Virginia 24137 Dr. Robert F. Roth, President, Roanoke Valley Sister Cities Committee, November Lane, Wirtz, VirGinia 24184 100 H:kAgenda.01\October 1, 2001 correspondance.wpd Darlene L. Burcham October 3, 2001 Page 2 pc: David K. Lisk, Executive Director, Roanoke Valley Sister Cities Committee, 909 Carrington Avenue, S. W., Roanoke, Virginia 24015 Richard C. Maxwell, Attorney, Woods, Rogers and Hazlegrove, PLC, P. O. Box 14125, Roanoke, Virginia 24038-4125 James D. Grisso, Director of Finance Rolanda A. Johnson, Assistant City Manager for Community Development George C. Snead, Jr., Assistant City Manager for Operations Wanda B. Reed, Acting Director ol. Parks and Recreation Philip C. Schirmer, City Engineer H:ka. genda. Ol\October 1, 2001 correspondance.wpd IN THE COUNCIL OF THE CITY OF ROANOKE, VIRGINIA, The 1st day of October, 2001. No. 35594-100101. AN ORDINANCE authorizing execution of an Agreement among Roanoke Valley Sisters Cities, Inc. (RVSC), Donna Essig a.n.d Mimi Babe Harris (Artists) and the City of Roanoke relating to the construction of a work of art, the Sister Cities Sculpture, to be placed in a public space in Century Square; providing for certain improvements to be made by the City to Century Square, and accepting the donation of the Sisters Cities Sculpture; and dispensing with the second reading by title of this ordinance. WHEREAS, on January 3, 1997, the RVSC awarded a commission to the Artists to create a significant work of art to be constructed in Century Square; WHEREAS, the Architectural Review Board has approved the appropriateness of the conceptual site plan for the improvements to Century Square and the installation of the sculpture; and WHEREAS, the Arts Commission has approved the project, pursuant §2-266, Code of the City of Roanoke (1979), as amended, thereby enabling the City to accept the donation of the sculpture. THEREFORE, BE IT ORDAINED by the Council of the City of Roanoke as follows: 1. The City Manager is authorized to execute an Agreement among Roanoke H:',lVIEASUKESk~ sist~rcity sc ulptur~. 1 Valley Sister Cities, Inc., Donna Essig and Mimi Babe Harris, the Artists, and the City of Roanoke, providing for the installation of the sculpture in Century Square and the City's acceptance of the same, as more particularly set forth in the City Manager's letter to City Council dated October 1,2001, the form of such Agreement to be substantially the same as Attachment B to the City Manager's letter, and such Agreement shall be approved as form by the City Attorney. ~'~ 2. The Council of the City of Roanoke hereby accepts the donation of the Sister Cities Sculpture referred to in the proposed Agreement, in accordance with §2-266, Code of the City of Roanoke (1979), as amended. 3. Pursuant to § 12 of the City Charter, the second reading of this ordinance by title is hereby dispensed with. ATTEST: City Clerk. H:~IEA SURE S~o-sist~rcitysc ulpture. 1 Office of the City Manager October 1, 2001 Honorable Ralph K. Smith, Mayor Honorable William H. Carder, Vice Mayor Honorable William D. Bestpitch, Council Member Honorable C. Nelson Harris, Council Member Honorable W. Alvin Hudson, Jr., Council Member Honorable William White, Sr., Council Member Honorable Linda F. Wyatt, Council Member Dear Mayor Smith and Members of City Council: Subject: Sister Cities Sculpture Project Background: Roanoke Valley Sister Cities, Inc. (RVSC) and the City have been working on the Sister Cities Sculpture for several years. City Council approved the sculpture project in 1997. This seven piece linear sculpture represents each of the existing Sister Cities. The Artists for this project were chosen out of 28 competing artists in a state-wide competition in 1996. After evaluating numerous sites, Century Square was selected as the most appropriate site for this public artwork. This site is in close proximity to the Sister Cities flag display located at Friendship Fountain. The Architectural Review Board (ARB) must review and approve any alteration, reconstruction, or erection in an H-1 district and issue a Certificate of Appropriateness. Century Square is within such a district. On June 7, the ARB approved the · appropriateness of a conceptual site plan for improvements to Century Square to prepare the park as a site for the Sister Cities Sculpture, and approved the installation of the sculpture. Attachment "A" is the architectural rendering approved by the ARB. In late spring, the Arts Commission also approved the project, since it must do so for the City to accept this gift. On September 4, City Council approved $78,000 in the Capital Maintenance and Equipment Replacement Program to facilitate improvements to Century Square including modification of the trellis, lighting, foundation for the artwork, tables and seating; and, appropriated funding to account 008-530-9779-9003. RVSC will provide payment to the Artists based on a fixed fee schedule for their work in creating this public art and will provide funds to cover the costs of appropriate signage. Room 364 Municipal South 215 Church Avenue, S.W. Roanoke, Virginia 24011-1591 (540) 853-2333 FAX (540) 853-1138 CityWeb:www. ci .roanoke.va .us Honorable Mayor and Members of Council October 1, 2001 Page 2 This fee schedule is set forth in an Agreement among the City, RVSC, and the Artists (Attachment B). Considerations: The Agreement among the City, RVSC and the Artists, Donna Essig and Mimi Babe Harris, for the creation and installation of the artwork has been executed by Roanoke Valley Sister Cities, Inc. and the Artists. Recommended Action: City Council authorize the City Manager to enter into the Agreement, the form of which shall be approved by the City Attorney attached as Attachment B, with Roanoke Valley Sister Cities, Inc. and the Artists for the creation and installation of the Sister Cities sculpture to be installed in Century Square, and that Council agree to accept the gift of the sculpture. City Manager DLB:kj Attachments C: Mary F. Parker, City Clerk William M. Hackworth, City Attorney James D. Grisso, Director of Finance Rolanda A. Johnson, Assistant City Manager for Community Development George C. Snead, Assistant City Manager for Operations Wanda B. Reed, Acting Director of Parks and Recreation Philip C. Schirmer, City Engineer Robert F. Roth, M. D., President, RVSC David K. Lisk, Executive Director, RVSC Richard C. Maxwell, Attorney, RVSC Mimi Babe Harris, Artist Donna Essig, Artist #CM01-00229 Retain existing t rellte section Potential table location Potantial table location Install tabflcatad staet nrc Demoflsh existing steal (=o88 bmr Potential t ioc~tioa Construct new trellis to match opposite tal~icata~ steet arc existing steel cross bar Potential tal~ location Install fabricated sMol arc Demolish existing steel c~)sa bar Potential table -- locaUoa Potential table Iocll]on Retain e0datJng i trellta section --1 Install fabricated steel arc Demolish existing etael c~ot8 bar Sister Cities Scuiptwe Control -- Tranlforr~r Scale: 1"= 20' June 7,2001 Revised Agreement AGREEMENT THIS AGREEMENT, made as of the _day of 5.a.3 _, 200 l, by and among Roanoke Valley Sister Cities, Inc., hereinafter referred to as the"RVSC," the CITY OF ROANOKE, a municipal corporation of the Commonwealth of Virginia, hereinafter referred to as the "City", and Donna Essig and Mimi Babe Harris, hereinafter collectively referred to as the "Artists", WITNESSETH: WHEREAS, the parties have agreed to enter into a contract for the construction of a work of art, hereinafter referred to as the "Work", to be placed in a public space on Century Square in the City of Roanoke, hereinafter referred to as the "site", and WHEREAS the Artists were awarded a commission, January 3, 1997, by the RVSC to create a significant work of art; and WHEREAS, the Artists are the exclusive constructor of the Work for Century Square, in the City of Roanoke; NOW, THEREFORE, in consideration of the mutual promises and undertakings contained herein, the parties agree as follows: Section 1 - _Scope of Services (a) The Artists shall furnish supplies and materials, hereinafter referred to collectively as the "materials", for the construction of the Work. (b) The Artists shall create, construct, fabricate and deliver to the Century Square a work of free standing sculpture, consisting of seven columns each approximately nine feet in height and fourteen inches in diameter in substantial conformity with the "Mill Mountain Sculpture Project Proposal" submitted by the Artists (attached hereto as Attachment 1) which was approved on January 3, 1997 (letter from David Curtis, Chair, Mill Mountain Sculpture Project Committee, attached hereto as Attachment 2). The Work shall be installed on the site in conformance with the layout approved by the City's Architectural Review Board. (Approved plan attached hereto as Attachment 3). An eighth column may be added pursuant to the provisions of Section 9. (c) The Artists shall consider and incorporate as the Artists deem appropriate the comments of RVSC and others as agreed to at the Mill Mountain Sculpture Meeting, January 14, 2000. (Copies of minutes of this meting attached hereto as Attachment 4).The Artists acknowledge RVSC interest in having the Work represent the particular cities. RVSC acknowledges that the Work is a work of art and not a simple depiction of the features of the particular Sister Cities. (d) The City shall provide at its expense electrical lines to the site of the Work for purpose of lighting to enhance the Work, modify the existing trellis to fit the sculpture, construct new sections of trellis, and install the base and support for the sculptures and signage. Section 2 - Procedure (a) The Artists shall determine the artistic expression of the Work following closely the models presented on January 7, 1997. Any major changes in the proposal shall be subject to the approval of the RVSC. 2 (b) It is the intent of the parties that the City, RVSC and the Artists will establish, from the outset of their relationship, a close and cooperative consultation continuing to and beyond the installation of the Work. (c) The City and RVSC reserve the right for their agents or representatives to review the Work while in progress with a two-week prior notification of such review to the Artists and provided that no such review shall be conducted in such a manner which would interrupt the tasks of the Artists. (d) Prior to each payment as detailed in Section 3 of this Agreement, a representative of RVSC will review the Work and approve payment to the Artists for satisfactory performance and progress on the Work. (e) Eight weeks prior to installation of the Work the Artists shall make available to the City and RVSC documentation of the completed Work. Upon this notification, the City shall determine a schedule on installation of the Work. Work shall commence as soon as possible after the signing of this Agreement by all parties, and be completed no later than June 1, 2004. Such schedule may be amended in writing by the Artists, RVSC and the City. The Artists shall not be held liable if, through no fault of the Artists, the completion of the Work is delayed by the late delivery of materials or by any delays caused by subcontractors or any unforeseen physical disabilities on the part of the Artists. (0 During the period of the installation of the Work, the Artists shall act as consultants to the pre-installation project by the City. (g) The Artists shall be available at such time or times as may be agreed to attend any inauguration or presentation ceremonies relating to the transfer of the Work to the City. Section 3 - Fee and payment (a) The RVSC shall pay to the Artists for the Work a fixed fee of $17,000.00 which shall constitute full compensation for all labor, services, materials, shipping and transportation furnished by the Artists under this agreement. RVSC shall cause a private donor to pay the Artists an additional $1000.00 for time spent by Artists considering design suggestions by RVSC. The fee shall be paid in the following installments: (1) $6,666.66 upon execution of this Agreement (2) $5,666.67 when the Work is one-third complete (3) $5,666.67 upon delivery of the Work (b) Any sales, use or excise taxes, customs, duties or similar charges relating to such services and materials shall be paid by the City and RVSC. The costs of special preparation of the site, including artificial lighting, electrical lines for such lighting and the structural attachment of the flame of the base of the Work to the site shall be paid by the City. (c) Prior to and during the period of installation of the Work, the City shall at its risk and expense store the materials necessary for installation of the Work at or in close proximity to the site in a manner agreed to by the Artists to be acceptable. (d) The City shall be responsible for obtaining at its expense permits and the like necessary for the installation of the Work. (f) The costs of transporting the materials to the site, and the costs of all travel by employees or agents of the Artists necessary for the proper performance of the services required under this Agreement, shall be paid by the Artists. Section 4 - Risk of Loss, Indemnification and Insurance (a) Prior to the delivery of the Work and materials to the site and while in transit, the Artists shall bear the risk of loss and indemnify and hold harmless the City and RVSC fi.om any liability, loss, theft, mutilation, vandalism or other damage, including those caused by Acts of God, to the Work. (b) Upon delivery of the Work and materials to the site, the City shall procure and place in effect adequate comprehensive insurance to cover any liability, loss, theft, mutilation, vandalism or other damage, including those caused by Acts of God, that may befall the materials and Work after delivery to the site. (c) Upon passage of the title to the Work to the City in accordance with Section 5 of this Agreement, all risk of loss, theft, mutilation, vandalism or other damage and liability except liability growing out of the structural soundness or collapse of the Work shall be the responsibility of the City. (d) The Artists shall not be required by the City to post any performance bonds or similar undertakings, and any requirements of any other authority for performance bonds or similar undertakings shall be the responsibility of the City. Section 5 - Ownership and Related Rights Title to the Work shall remain with the Artists until delivery and acceptance of the Work, at which time title shall pass directly to the City. (a) The City shall have complete authority to reproduce the Work in books, art magazines, exhibition catalogs, postcards or posters or other commemorative items providing that any such reproduction be accompanied by the Artists' copyright notice and providing that the Work not be changed in anyway in reproduction by the addition of any elements, embellishments or distortion through photography. (b) The Artists shall have and retain full ownership of all preliminary drawings, sketches, models, maquettes and other incidental works created by them or at their direction in the performance of this Agreement. (c) The Artists shall ensure that the Work is one of a kind and shall not make any additional exact duplicate, three-dimensional reproductions of the final work, nor shall the Artists grant permission to others to do so except with the written permission of the City. (d) The Artists shall retain all rights under the Copyright Act of 1976. Section 6 - Surviving Covenants (a) The covenants and obligations set forth in this Section 6 are for the benefit of the Artists and their heirs and shall survive the completion of installation of the Work and shall continue for a period ending on the twentieth anniversary of the surviving Artists' death. (b) Maintenance. The City recognizes that although normal maintenance of the Work will involve simple and relatively inexpensive procedures, such maintenance on a regular basis is essential to the integrity and authenticity of the work. The City shall assure such regular maintenance and shall protect, repair and maintain the Work against damage from all causes and the ravages of time and vandalism and make all significant repairs and restorations of the Work solely in accordance with the express written approval of the Artists. To the extent practicable, the City shall retain the Artists to personally supervise significant repairs and restorations, and the Artists shall be paid a reasonable fee for such services. (c) Notice. The RVSC shall at its expense prepare and install at the site a tasteful public notice including the Artists names and the name of RVSC and shall maintain such notice in good repair against the ravages of time and vandalism. The RVSC shall obtain approval of such notice from the Artists and the City; approval shall not be unreasonably withheld by the Artists and the City. (d) Non-Commercial Use. The City shall not permit the use of reproductions of the Work, for or in connection with the promotion of private, charitable or political business of any nature whatsoever, except as may be agreed by express approval of the Artists. Examples, but without limitation, of uses of the Work expressly prohibited under this section 6(d) are postcards or posters depicting the whole or portions of the Work with humorous captions; any distortion of the Work in printed or photographic form; and the superimposition of images, colors or printed messages on the Work. Nothing contained in this Section 6 (d) shall, however, prohibit the use of reproductions of the Work in tasteful postcards, posters, etc. The City hereby expressly and irrevocably authorizes the Artists and their heirs and legal representatives to bring any suit or other proceeding before any court or other body having jurisdiction thereof for any such preliminary or permanent injunctive or other relief, whether legal or equitable in nature, to accomplish the purposes of this Section 6 (d). Nothing in this Section 6 (d) shall prohibit the City from exercising the authority granted under Section 5 (a) of this Agreement. (e) Alteration of the site or of the Work. The City shall notify the Artists of any alteration of the site or of any areas adjacent thereto that would affect the intended character and appearance of the Work and shall consult the artists in the planning of such alteration. If any such alteration of the site or such areas or of the Work is made without express written approval of the Artists, the City shall, at its expense, remove or obliterate the public notice referred to above, as well as any signature or other emblem identifying the Artists with the Work, and the Artists may take such other action as they may choose in order to disavow the Work. This paragraph shall apply to any alteration of the site, such areas or the Work, which would affect the intended character and appearance of the Work, whether intentional, accidental, within or without the control of the City, or otherwise. (f) Disposition. In the event of any sale, transfer or other disposition of the Work, by the City of Roanoke, or by any subsequent owner, the seller or transferor shall deliver to the Artists or their heirs or legal representatives a binding undertaking to observe all of the provisions of this Section 6 for the benefit of the Artists. Nothing contained in this section, 6 (f) shall create or constitute any lien or other encumbrance of the Artists in or upon the Work or upon any disposition thereof. (g) Insurance. Upon passage of the title to the Work to the City, the City shall procure insurance or self-insure the Work against all risks and perils and liability except liability growing out of the structural soundness or collapse of the Work. (h) Permanent Records. The City of Roanoke shall maintain in the Office of the City Clerk a fully executed original of this Agreement and pertinent information as to the location and the history of the Work. (i) The Artists and their heirs or personal representatives shall notify the City of changes of the address to be used for notices under this Agreement and any failure to do so, if such failure prevents the City from locating the Artists or their heirs or personal representatives, shall be deemed a waiver by the Artists of their rights to enforce the provisions of paragraphs (b), (d) and (e) of this section 6 that require the express approval of the Artists. Section 7 - Authorizations The City hereby represents and warrants to the Artists that all appropriate official action has been duly and validly taken to authorize the City to execute and deliver this Agreement and to perform all of the obligations of the City hereunder and that no authorization, approval, permit, filing or other document or action is required of any governments authority to authorize the performance of this Agreement according to its terms. Section 8 - General (a) Notices. All notices and other communications which are required or permitted under this Agreement shall be in writing and shall be deemed to have given or made when delivered personally or when mailed, postage prepaid, by certified mail, return receipt requested: (1) If to the City, to: City Manager Room 354 215 Church Avenue, SW Roanoke, Virginia 24011 (2) If to the Artists; to: Donna Essig 8966 Snow Creek Road Penhook, VA 24137 and Mimi Babe Harris 2225 Broadway, SW Roanoke, VA 24014 (3) If to RVSC; to: Roanoke Valley Sister Cities, Inc. P.O. Box 136 Roanoke, VA 24002 (b) Independent Contractor. Nothing contained in this Agreement shall be construed to create between the City and the Artists any relationship of principal and agent, joint ventures, co-parmers, employer and employee, master and servant or any similar relationship, the existence of any of which is expressly denied by the parties hereto. Neither party hereto shall be liable to the other or to any third party in any way for any engagement, allegation, 10 representation, contract, transaction or undertaking or for any negligent act or omission to act of the other, except as expressly provided herein. (c) Entire Agreement. This Agreement represents the entire understanding of the parties hereto and expressly supersedes any and all prior agreements and understandings with respect to the subject matter hereof and may be amended only by a writing signed by all of them. (d) No Assignment. No party to this Agreement shall assign its or his rights or obligations hereunder, either in whole or in part, except with the written consent of the other parties. Any purported assignment not in compliance with this Section 9 (d) shall be void. This Agreement shall inure to the benefit of the heirs and legal representatives of the Artists. (e) No Waiver. No waiver by all parties to this Agreement of any breach of any obligation of the other parties shall constitute a waiver of any other prior or subsequent breach of any such obligation. (f) Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia. (g) Headings. The headings or captions in this Agreement are inserted for the convenience of reference only and shall not be a part of or control or affect the meaning of this Agreement. Section 9 - Eighth Column The parties agree that an eighth coluhan may be subsequently added to the Work to depict a new sister city. In the event that RVSC determines to add an eighth column to the Work, 11 RVSC shall contract with the Artists for the construction of the eighth column. Unless the Artists agree in writing, RVSC or the City may not install an eighth column created by any person other than the Artists. The parties further agree that the Work shall not be expanded beyond eight columns. The right to add an eighth column shall expire 30 days after the eighth column agreement is presented to RVSC by the Artists. All terms and conditions of this Agreement shall apply to the eighth column, and its installation in Century Square. IN WITNESS WHEREOF, the Artists have signed this Agreement, an agent of RVSC has signed this Agreement and the City has caused this Agreement to be signed by its City Manager, and its corporate seal to be hereunto affixed and attested by its City Clerk. ATTEST: CITY OF ROANOKE, By City Clerk City Manager M~"]'~ Babe Harris ROANOKE VALLEY SISTER CITIES, INC. (Title) 12 APPROVED AS TO FORM: APPROVED AS TO EXECUTION: City Attorney City Attorney 13 Mill Mountain Sculpture Project Proposal Mimi Babe Harris and Donna Essig Proposal: Seven, nine to nine and one-half foot high, columns will be planted like trees to celebrate the spirit of the bond between Roanoke and the Sister Cities. There is one column for each Sister City: the capital of the column will have faces representing the people, young and old, with an architectural element of each city on the top; the shaft of the column will be carved with the regional flora and fauna; and the base of the column will be the foundation. The emphasis is on the architectural form of the column with the imagery executed in neutral or natural bas relief and glazed ceramic stoneware accents. The essential component of international friendship and world peace is knowledge and understanding of cultural similarities and differences. These columns serve as educational landmarks that invite comparison and contrast between the Sister Cities. The vertical lines and the naturalistic placement of the columns among the trees unifies the site visually. The columns' animal imagery serves as an appropriate introduction along the walkway to Mill Mountain Zoo. Placement: The columns are placed between the main approach road to the mountain and the paved walkway to the zoo on a grassy slope (approximately one- eighth acre). The current graveled area will be broken into pathways and seating arrangements which allow the viewer to move among the trees and columns and to sit and contemplate. Materials: Nine to nine and one-half foot, fourteen inch diameter columns with a carved expanded polystyrene board core; a primus and fiberglass second layer; and a thick top coating of natural colored Dryvit with embedded glazed bas relief stoneware; set on a round concrete base/foundation that is six inches up from the ground and twenty-six inches in diameter. ATTACHMENT 1 January 3, 1997 Mimi Harris and Donna Essig 2225 Broadway Roanoke, Virginia 24014 Dear Mimi and Donna: We are pleased to inform you that your proposal for the Mill Mountain Sculpture Competition has been chosen by the jury as the winning entry. The Mill Mountain Development Committee and the Sister Cities Sculpture Committee has met and approved this selection. Final approval is pending from the Roanoke City Arts Commission, which will meet on January 17, and which, upon approval, will present the proposed sculpture for the action of Roanoke City Council on February 4, 1997. Public fundraising for the project will begin in mid to late February with an unveiling and fundraising event at Center in the Square. Until that time, there will be no publicity provided to the media. You will be kept informed as to the progress of the fundraising campaign. We do not expect you to begin work on the sculpture until we have a significant portion of funds pledged. Please note that the Sister Cities Sculpture Committee suggested that you meet with representatives from each of the sister cities to confirm the appropriateness of the sculpture's symbolism. We also would E_~ke you to meet with several landscape architects to develop overall siting concepts and an estimate of their costs, which can be presented to City Council. Dr. Roth of the Sister Cities organization will arrange these meetings with you and Mark Scala at the Art Museum. Finally, we need a complete budget from you before the Arts Commission takes the project to City Council. Our understanding is that the overall cost for your component of the project will not exceed $17,000.00. We extend our heartfelt congratulations on your selection, and look forward to working closely with you over the coming months on this exciting project. Sincerely yours, David Curtis Chair, Mill Mountain Sculpture Project Committee ATTAChmENT 2 Retain exqsting --1 6, trellis section 74' Potential tal~e location Potential location Install fal~'lcated __ Oernolish existing Iocatiofl Construot nas trail to m~tc~ opposite Inltlll flbtCl~l(I still im Demolish IXJlting still emil tlr Potential table location -- install far. cited ste~ arc -- Demolieti existing stall Potential tll21e -- location Potential location Retain trnl#s s~fion fll~te<l stael am Demolish exilting Stall C~OSS tlr Salter' Citial ~ -- Cofltrol panel Scale: 1"= 20' June 7,2001 Scale: 1" = 20' "--- June 7, 2001 ATTACHMENT 3A *, j Mill Mountain Sculpture Meeting (~ The Arts Council of the Blue Ridge Friday, January 14, 2000 1::30 p.m.-S:10 p.m. Attended by: Donna Essig Mimi Babe Hams Robert Roth David Curtis Richard Maxwell Ann Weinstein David Lisk Discussion: Mimi and Donna brought to this meeting the seven ceramic maquettes of the Mill Mt. Sister City Sculptures and one wax proof of the Roanoke maquette, plus a permaform column for the wax. Two main topics for discussion: 1. Addendum design suggestions 2. Alternative to Dryvit Questions and considerations by country: Wonju, Korea 1. Hangul lettering in addition to the English word: Wonju no problem, arUsts have aareed to this from the first mae#no January 7. 1997 2. The pagoda architectural form squared and not round. [gunded sha~e cema from a Dictum of an ancient naaoda in a library book. Dr. Roth wanted to see the book. but did say that the rounded form fit the rounded column. 3. Question as to typical Korean faces> Dr. Roth ._~__t_~ that after seeina the maauettes that the faces were okay. Kieumu, Kenya 1. Kenyon faces inconsistent with Luo peoples. Pictures provided by Greta Evans. Donna ~eted that she was makino un the faces and had no nroblem usino the oictures from Greta. Pskov, Russia 1. Cyrillic lettering for Pskov in addition to English word. flo problem, arti~s_~ have aareed to this from the first meetifla. 1/7/97. 2. The onion dome color should not be spiral color. The dome itself is a religious symbol. no oroblem, ohotos show blue and oold solid color 3. The dome is a religious symbol and MUST have a cross. A dome without a cross would be a mosque. This does not seem to be the case. Donna brouaht in oictures of a rrlosoue which do not have onion domes. Other suoaestions were made. but Dr. Roth s-".med to resnond in the neaative to altema~fve ideas. It WaS left that he would ao back to the Russian Committee to oresent ATTACf~[ENT 4 Donna and Mimi with several altemative desions. 4. Change rabbit to a snow leopard, the symbol to Pskov. It was oointed out that a snow leonard is already on the sculoture. 5. Change Mongols face and headdress. IVot a oroblem, but no faces have been orovided, only nhotos of ~uildinos. and the cyrillic letterino. Florianopolis, Brazil 1. Column portrays a jungle forest with African animals. No African animals are on maouette. Will nlace water in the backoround t<2 oive a sense of an island with a faint famous bridce in the backoround in the same way the train aooears ion the Roanoke column. 2. Beaches, shells, shrimp, and dolphins. NO oroblem can be fit in. 3. Abundance of orchids. No nroblems can be fit in. 4. Citizens are Germanic and Portuguese. So/ut/on: one Germanic. one Portu(~uese. one Hisoanic Opole, Poland 1. Babushka's are Russian. Books from Krystyna Brozyna. In these books many women are wee#no babushka's. Mimi said the voun(7 man with the head in a scarf came from a war memorial to the bravery of Polish soldiers. Lijiang, China 1. Chinese characters for Ujiang name. No problem, art/s~ have aoreed to this since January 7. 1997. 2. Change in top architecture. Mimi has nictures and alternatives that will fit the column. 3. Change portraits to Yunnan minorities: Yi or Naxi ~/o nroblem. Mimi has oictures from her trio to Liiiano. Alternatives to Dryvit: This was discussed as to casting the maquettes in bronze using colored patinas. Mimi presented a proposal with cost factors and a wax model and a permaform column. It was stated that with this change it would become a garden with sculpture rather than a sculpture garden. Ann Weinstein pointed out that if this was adopted it would have to go through all the past committees, including the infamous Mill Mountain Advisory Committee and the City Council as well as the Arts Commission, who did not warm to this ides in their recent discussions. All these committees would need to approve the sculpture. Rich Maxwell expressed that the sense of the column would change so much in this bronze form. Conclusion: Dr. Roth will take this information back to his committees for approval, and Rich Maxwell will continue to work with the City Attorney. The artists will wait and see. Submitted by: Mimi Babe Harris CITY OF ROANOKE Office of the City Clerk Mary F. Parker, CMC City Clerk Stephanie M. Moon Deputy City Clerk October 3, 2001 File #27-468 Darlene L. Burcham City Manager Roanoke, Virginia Dear Ms. Burcham: I am attaching copy of Resolution No. 35598-100101 declaring the City's int6nt to reimburse itself from the proceeds of its general obligation public improvement bonds authorized to be issued pursuant to Resolution No. 35489-080601, adopted August 6, 2001, for the purpose of providing funds to pay the costs of acquisition, construction, reconstruction, improvement, extension, enlargement and equipping of various public improvement projects of and for the City, which includes the building and equipping of the Crystal Spring Water Treatment (Filtration) Plant. The abovereferenced measure was adopted by the Council of the City of Roanoke at a regular meeting which was held on Monday, October 1,2001 Sincerely, Mary F. Parker, CMC City Clerk MFP:mh Attachment pc: James D. Grisso, Director of Finance D. Darwin Roupe, Director, Department of General Services Michael T. McEvoy, Director of Utilities Philip C. Schirmer, City Engineer H:XAgenda.01\October 1, 2001 correspondance.wpd IN THE COUNCIL OF THE CITY OF ROANOKE, VIRGINIA, The 1st day of October, 2001. No. 35598-100101. A RESOLUTION declaring the City's intern to reimburse itself from the proceeds of its general obligation public impwvemem bonds authorized to be issued pursuant to Resolution No. 35489-080601, adopted August 6, 2001, for the purpose of providing funds to pay the costs of the acquisition, construction, reconstruction, improvement, extension, enlargement and equipping of various public improvement projects of and for the City, which includes the building and equipping of the Crystal Spring Water Treatment (Filtration) Plant; and providing for an effective date. BE IT RESOLVED by the Council of the City of Roanoke as follows: 1. In accordance with U. S. Treasury Regulations, Section 1.150-2, the City hereby declares that it reasonably expects and intends to reimburse $5,124,700.00 appropriated by an ordinance simultaneously adopted by the City Council on October 1, 2001, for certain expendi ,t~tres to be made in connection with the construction of a building and the installation of equipment and for construction administration services for the Crystal Spring Water Treatment (Filtration) Plant fxom proceeds of its general obligation public improvement bonds authorized to be issued pursuant to Resolution No. 35489-080601, adopted by the City Council on August 6, 2001, in the principal amount of $31,425,000, with $5,445,000 being allocated for the Crystal Spring Water Treatment (Filtration) Plant Project for the purpose of providing funds to pay the costs of the acquisition, construction, reconstruction, improvement, extension, enlargement and equipping of various public improvement projects of and for the City, which includes the building and equipping of the Crystal Spring Water Treatment (Filtration) Plant. The maximum principal amount of debt expected to be issued for the Crystal Spring Project is $5,445,000, all as is more fully set forth in the City Manager's letter of October l, 2001, to this Council. 2. This is a declaration of official intent adopted pursuant to U. S. Treasury Regulations, Section 1.150-2. This official intent is being declared not later than sixty days after the payment of the expenditures authorized by Paragraph 1 of this Resolution. 3. The City Clerk is directed to file this Resolution among the permanent papers of the City and hold it available for p~blie inspection pursuant to the Virginia Freedom of Information Act, 2.2-3700 et seq., Code of Virginia (1950), as amended. 4. This Resolution shall be effeeti~'°n and after the date of its adoption. ATTEST: City Clerk. CITY OF ROANOKE Office of the City Clerk Mary F. Parker, CMC City Clerk Stephanie M. Moon Deputy City Clerk October 3, 2001 File #27-468 James D. Grisso Director of Finance Roanoke, Virginia Dear Mr. Grisso: I am attaching copy of Ordinance No. 35597-100101 amending and reordaining certain sections of the 2001-2002 Water Fund Appropriations, in connection with certain building construction and equipment installation at the Crystal Spring Water Treatment (Filtration) Plant. The abovereferenced measure was adopted by the Council of the City of Roanoke at a regular meeting which was held on Monday, October 1,2001. Sincerely, Mary F. Parker, CMC City Clerk , MFP:mh Attachment pc: Darlene L. Burcham, City Manager D. Darwin Roupe, Director, Department of General Services Michael T. McEvoy, Director of Utilities Philip C. Schirmer, City Engineer H:XAgenda. Ol\October 1,2001 correspond~nce.wpd IN THE COUNCIL OF THE CITY OF ROANOKE, VIRGINIA The 1st day of October, 2001. No. 35597-100101. AN ORDINANCE tq amend and reordain certain sections of the 2001-2002 Water Fund Appropriations, and providing for an emergency. WHEREAS, for the usual daily ope~r~ation of the Municipal Government of the City of Roanoke, an emergency is declared to exist. THEREFORE, BE IT ORDAINED by the Council of the City of Roanoke that certain sections of the 2001-2002 Water Fund Appropriations, be, and the same are hereby, amended and reordained to read as follows, in part: ApDroDriations Capital Outlay $ 2,271,428 Crystal Springs.Water Filtration Plant Construction (1) ................ 4,924,700 Crystal Springs Water Filtration Plant Construction Administration Services (2) .................· ............................... 200,000 Public Improvement Bonds - Series 2002 (3) ....................... (5,124,700) 1) Appropriated from 2002 Bond Funds 2) ApPropriated from 2002 Bond Funds 3) Crystal Spdngs Water Filtration Plant (002-530-8397-9076) (002-530-8402-9076) (002-530-8400-9199) 4,924,700 200,000 (5,124,700) BE IT FURTHER ORDAINED that, an emergency existing, this Ordinance shall be in effect from its passage. ATTEST: City Clerk. CITY OF ROANOKE Office of the City Clerk Mary F. Parker, CMC City Clerk Stephanie M. Moon Deputy City Clerk October 3, 2001 File #27-468 Darlene L. Burcham City Manager Roanoke, Virginia Dear Ms. Burcham: I am attaching copy of Resolution No. 35596-100101 authorizing a contract with Construction Dynamics Group, Inc., in an amount not to exceed $200,000.00 for construction administration services and related work for the Crystal Springs Water Filtration Plant Project. The abovereferenced measure was adopted by the Council of the City of Roanoke at a regular meeting which was held on Monday, October 1, 2001. MFP:mh Sincerely, Mary F. Parker, CMC City Clerk Attachment pc: Patrick Brady, Professional Engineer, Construction Dynamics Group, Inc., 8001 Franklin Farms Drive, Koger Building, Suite 233, Richmond, Virginia 23229 James D. Grisso, Director of Finance D. Darwin Roupe, Director, Department of General Services Michael T. McEvoy, Director of Utilities Philip C. Schirmer, City Engineer HSAgenda.01\October I, 2001 correspondance.wpd IN THE COUNCIL OF THE CITY OF ROANOKE, VIRGINIA, The 1st day of October, 2001. No. 35596-100101. A RESOLUTION authorizing a contract with Construction Dynamics Group, Inc. for construction administration services and related work for the Crystal Springs Water Filtration Plant Project. BE IT RESOLVED by the Council of the City of Roanoke that: 1. The City Manager and the City Clerk are hereby authorized to execute and attest, respectively, a contract with Construction Dynamics Group, Inc. in an amount not to exceed $200,000 for construction administration services and related work for the Crystal Springs Water Filtration Plant Project, as described in the City Manager's letter to this Council dated October 1, 2001. 2. The form of the contract shall be approved by the City Attorney, all as more particularly set forth in the City Manager's letter to this Council dated October 1, 2001. ATTEST: City Clerk. MARY F. PARKER, CMC City Clerk CITY OF ROANOKE OFFICE OF CITY CLERK 215 Church Avenue. S.W.. Room 456 Roanoke. Virginia 2401 I-1536 telephone: (540) 853-2541 Fax: (540) 853-1145 E-mail: clerkc,~ci.roanoke.va.us October 3, 2001 File #27-468 STEPHANIE M. MOON Deputy City Clerk George B. Clarke, IV, President Mid Eastern Builders, Inc. P. O. Box 6748 Chesapeake, Virginia 23323 Dear Mr. Clarke: I am enclosing copy of Ordinance No. 35595-100101 accepting the bid of Mid Eastern Builders, Inc. for certain building construction and equipment installation at the Crystal Spring Water Treatment (Filtration) Plant, upon certain terms and conditions, at a total cost of $4,477,000.00; and rejecting all other bids made to the City for the work The abovereferenced measure was adopted by the Council of the City of Roanoke at a regular meeting which was held on Monday, October 1,2001. Sincerely, MaryF P~are City Clerk MFP:mh Enclosure pc: Darlene L. Burcham, City Manager James D. Grisso, Director of Finance D. Darwin Roupe, Director, Department of General Services Michael T. McEvoy, Director of Utilities Philip C. Schirmer, City Engineer HSAgenda.0 !'xOctober 1,2001 correspondance.wpd MARY F. PARKER. CMC City. Clerk CITY OF ROANOKE OFFICE OF CITY CLERK 215 Church Avenue. S.W.. Room 456 Roanoke. Virginia 2401 I- 1536 Telephone: (540) 853-2541 Fax: {540}853-1145 E-mail: clerk@ci.roanoke.va.us October 3, 2001 File #27-468 STEPHANIE M. MOON Deputy City Clerk Breakell, Inc. English Construction Company, Inc. Frizzell Construction Company, Inc. Ladies and Gentlemen: I am enclosing copy of Ordinance No. 35595-100101 accepting the bid of Mid Eastern Builders, Inc. for certain building construction and equipment installation at the Crystal Spring Water Treatment (Filtration) Plant, upon certain terms and conditions, at a total cost of $4,477,000.00; and rejecting all other bids made to the City for the work The abovereferenced measure was adopted by the Council of the City of Roanoke at a regular meeting which was held on Monday, October 1, 2001. On behalf of the City of Roanoke, thank you for submitting your bid on the abovedescribed project. ~, a~,.~ ~. ~~,~.Sincerely, Mary F. Parker, CMC City Clerk MFP:mh Enclosure H:XAgenda.0l\October 1, 2001 correspondance.wpd IN THE COUNCIL OF THE CITY OF ROANOKE, VIRGINIA, The lst: day of October, 2001. I~o. 35595-100101. AN ORDINANCE accepting the bid of Mid Eastern Builders, Inc. for the necessary building construction and equipment installation at the Crystal Spring Water Treatment (Filtration) Plant, upon certain terms and conditions and awarding a contract therefor; authorizing the proper City officials to execute the requisite contract for such work-;,'rejecting all other bids made to the City for the work; and providing for an emergency. BE IT ORDAINED by the Council of the City of Roanoke as follows: 1. The bid of Mid Eastern Builders, Inc. in the amount of $4,477,000.00 for the necessary building construction and equipment installation at the Crystal Spring Water Treatment (Filtration) Plant, as is more particularly set forth in th~ City Manager's Letter dated October 1,2001, tO this Council, such bid being in full compliance with the City's plans and specifications made therefor and as provided in the contract documents offered the bidder, which bid is on file in the Purchasing Department, be and is hereby ACCEPTED. 2. The City Manager and the City Clerk are hereby authorized, on behalf of the City, to execute and attest, respectively, the requisite contract with the successful bidder, based on its proposal made therefor and the City's specifications made therefor, the contract to be in such form as is approved by the City Attorney, and the cost of the work to be paid for out of funds heretofore or simultaneously appropriated by Council. 3. Any and all other bids made to the City for the above work are hereby REJECTED, and the City Clerk is directed to notify each such bidder and to express to each the City's appreciation for such bid. 4. In order to provide for the usual daily operation of the municipal government, an emergency is deemed to exist, and this ordinance shall be in full force and effect upon its passage. ATTEST: City Clerk. Office of the City Manager October 1,2001 Honorable Ralph K. Smith, Mayor Honorable William H. Carder, Vice Mayor Honorable William D. Bestpitch, Council Member Honorable C. Nelson Harris, Council Member Honorable W. Alvin Hudson, Jr., Council Member Honorable William White, Sr., Council Member Honorable Linda F. Wyatt, Council Member Dear Mayor Smith and Members of City Council: Subject: Contract Awards Crystal Spring Water Treatment (Filtration) Plant Bid No. 01-08-41 The City of Roanoke was notified by the Commonwealth of Virginia Department of Health on May 2, 2000 that, due to possible surface water influence, Crystal Spring could not be used as a water supply until the water was treated for potential surface contaminants. This has caused a loss of 3 - 4 million gallons of water per day in the potable water supply of the City of Roanoke. A preliminary engineering study determined the most feasible method to treat Crystal Spring water was a membrane filtration system. After proper advertising, four bids were received on Thursday, September 20, 2001 with Mid Eastern Builders, Inc., 4016 Holland Boulevard, Chesapeake, Virginia 23323, submitting the Iow bid in the amount of $4,477,000. The construction time was specified as 365 calendar days for the necessary building construction and equipment installation. The four bids received have been carefully evaluated by our engineering consultant, Wiley & Wilson, Inc. and its subconsultant, HDR Engineering, Inc. The consultants jointly recommend contract award to Mid Eastern Builders, Inc., as set forth above. Additionally, City staff recommends using a construction administration specialty firm to monitor, inspect and administer the construction project. Construction Dynamics Group, Inc. (CDG) was selected to provide these services in accordance with our standard procurement procedures. Funding in the total amount of $5,124,700 is needed for the project. The amount of $200,000 will be allocated for the contract for construction administration services mentioned above. The remaining funding in excess of the contract amounts is needed to support advertising expenses, testing and other unforeseen project expenses. Funding will be made available through the issuance of the Series 2002 General Obligation Public Improvement bond issue. A principal amount of $31,245,000, with $5,445,000 being allocated for this project, was authorized for issuance by City Council at its August 6, 2001 meeting. Room 364 Municipal South 215 Church Avenue, S.W. Roanoke, Virginia 24011-1591 (540) 853-2333 FAX (540) 853-1138 CityWeb :www. cl. roanoke.va .us l-he Honorable Mayor and Members of Council October 1,2001 Page 2 Recommended Actions: Accept the above bid and authorize the City Manager to execute a contract for the above work with Mid Eastern Builders, Inc. in the amount of $4,477,000 with 365 consecutive calendar days of contract time to provide construction of the Crystal Spring Water Treatment (Filtration) Plant. Reject the other bids received. Authorize the City Manager to enter into a contract with Construction Dynamics Group, Inc. in an amount not to exceed $200,000. Appropriate in advance of issuance $5,124,700 from the sale of Series 2002 bonds as follows: $4,924,700 to an account to be established entitled "Crystal Spring Water Treatment (Filtration) Plant Construction"; and $200,000 to an account to be established entitled "Crystal Spring Water Treatment (Filtration) Plant Construction Administration Services". Adopt a resolution declaring the City's intent to reimburse itself $5,124,700 from the proceeds of Series 2002 General Obligation Public Improvement Bonds related to the Crystal Spring Water Treatment (Filtration) Plant construction. Darlene L. Burcham City Manager DLB/PCS/bls Attachment C~ Mary F. Parker, City Clerk William M. Hackworth, City Attorney James D. Grisso, Director of Finance D. Darwin Roupe, Director of General Services Michael T. McEvoy, Director of Utilities Philip C. Schirmer, City Engineer #CM01-00224 TABULATION OF BIDS CRYSTAL SPRING WATER TREATMENT PLANT BID NO. 01-08-41 Bids were opened by Robert L. White, Manager, Purchasing Department, on Thursday, September 20, 2001, at 2:00 p.m. Mid Eastern Builders, Inc. $4,477,000.00 Breakell, Inc. $4,499,000.00 Frizzell Construction Co., Inc. $4,715,000.00 English Construction Company, Inc. $4,775,000.00 Office of the City Engineer Roanoke, Virginia October 1,2001 CITY OF ROANOKE Office of the City Clerk Mary F. Parker, CM C City Clerk Stephanie M. Moon Deputy City Clerk October 3, 2001 File #291-383 Darlene L. Burcham City Manager Roanoke, Virginia Dear Ms. Burcham: I am attaching copy of Resolution No. 35599-100101 authorizing execution 6f an agreement between the City of Roanoke and U. S. Cellular, providing for use of cellular phones for the Stop Abuse From Existing (S.A.F.E.) program. The abovereferenced measure was adopted by the Council of the City of Roanoke at a regular meeting which was held on Monday, October 1,2001. Sincerely, Mary F. Parker, CMC City Clerk MFP:mh Attachment pc: James D. Grisso, Director of Finance Rolanda A. Johnson, Assistant City Manager for Community Development A. L. Gaskins, Chief of Police H:kAgenda.01\October l, 2001 correspondance.wpd IN THE COUNCIL OF THE CITY OF ROANOKE, VIRGINIA, The 1st day of October, 2001. No. 35599-100101. A RESOLUTION authorizing execution of an agreement between the City of Roanoke and U.S. Cellular, providing for use of cellular phones for the Stop Abuse From Existing (S.A.F.E.) program. BE IT RESOLVED by the Council of the City of Roanoke as follows: 1. The City Manager and the City Clerk are hereby authorized, for and on behalf of the City, to execute and attest, respectively, an agreement with U.S. Cellular providing for use of cellular phones for the Stop Abuse From Existing (S.A.F.E.) program. 2. Such agreement, which shall be approved as to form by the City Attorney, shall be in substantially the form set forth in the attachment to the City Manager's letter to this Council dated October 1, 2001, and shall include a provision releasing and holding harmless U.S. Cellular. ATTEST: City Clerk. RE(;EIVED CITY ~Se~,~[~l~ Monoger October 1, 2001 SEP Ag:Ol Honorable Ralph K. Smith, Mayor Honorable William H. Carder, Vice Mayor Honorable William D. Bestpitch, Council Member Honorable C. Nelson Hards, Council Member Honorable W. Alvin Hudson, Jr., Council Member Honorable William White, Sr., Council Member Honorable Linda F. Wyatt, Council Member Dear Mayor Smith and Members of City Council: Subject: Stop Abuse From Existing (SAFE) Program Background: In April 2000, the City Manager and U.S. Cellular entered into a contractual agreement that established a SAFE program in Roanoke. The SAFE program allows the Police Department to distribute activated cell phones to at-risk victims of domestic violence, pending prosecution. The phones allow domestic violence victims to immediately notify police of in-progress offenses and potential threats. U.S. Cellular requires annual renewal of the contract in order for the Police Department to maintain an inventory of twenty phones. U.S. Cellular provides the phones and service at no cost to the City. 'Considerations: Cell phones are distributed to at-risk domestic violence victims that would otherwise lack the ability to immediately alert police. Improved police response times to imminent domestic violence threats is an effective deterrent and provides significant domestic violence victim safeguards - the phones have been described by victims as virtual lifelines. A release and hold harmless provision in the SAFE contract, paragraph 6, requires the City to release and hold harmless U.S. Cellular from any claims arising from the agreement. The proposed SAFE contract is essentially the same as the SAFE contract entered into in April 2000. Room 364 Municipal South 215 Church Avenue, S.W, Roanoke, Virginia 24011-1591 (540) 853-2333 FAX (540) 853-1138 C ityWeb :www. ci, roanoke.va, us Honorable Mayor and Members of City Council October 1,2001 Page 2 Recommended Action: Authorize the City Manager to contract with U.S. Cellular for continued use of SAFE program cell phones and service for a period of oneyear. City Manager C: Mary F. Parker, City Clerk William M. Hackworth, City Attorney James D. Grisso, Director of Finance Rolanda A. Johnson, Assistant City Manager for Community Development A.L. Gaskins, Chief of Police CM01-00222 CITY OF ROANOKE Office of the City Clerk Mary F. Parker, CMC City Clerk Stephanie M. Moon Deputy City Clerk October 3, 2001 File #5-277 Darlene L. Burcham City Manager Roanoke, Virginia Dear Ms. Burcham: I am attaching copy of Ordinance No. 35600-100101 authorizing the City Manager to enter into a contract with the Roanoke Foundation for Downtown, Inc. ("Foundation") for d~sign and construction by the Foundation of a utility building at the Roanoke Centre for Industry and Technology to further operation of the Roanoke City Police Department Mounted Patrol Unit; authorizing the City Manager to accept, on behalf of the City and pursuant to {}2-263 of the Code of the City of Roanoke from the Foundation, the donation of the Facility once it is completed, in accordance with approved plans, upon certain terms and conditions; and dispensing with the second reading of this ordinance by title. The abovereferenced measure was adopted by the Council of the City o[ Roanoke at a regular meeting which was held on Monday, October 1,2001, and will be in full force and effect ten days following the date of adoption. Sincerely, Mary F. Parker, CMC City Clerk MFP:mh Attachment pc: James D. Grisso, Director of Finance Rolanda A. Johnson, Assistant City Manager for Community Development D. Darwin Roupe, Director, Department of General Services A. L. Gaskins, Chief of Police H:~genda.01\October 1,2001 correspondance.wpd 3. Pursuant to the provisions of Section 12 of the City Charter, the second reading of this ordinance by title is hereby dispensed with. ATTEST: City Clerk. H:/MEASURES/o-utilitybldgmountedpatroi. 1 RECEIVED CITY i::L£Rl~~he city Manager October 1,2001 1)1 SE? 25 P3:33 Honorable Ralph K. Smith, Mayor Honorable William H. Carder, Vice Mayor Honorable William D. Bestpitch, Council Member Honorable C. Nelson Harris, Council Member Honorable W. Alvin Hudson, Jr., Council Member Honorable William White, Sr., Council Member Honorable Linda F. Wyatt, Council Member Dear Mayor Smith and Members of City Council: Subject: Utility Building for Mounted Patrol Stable Background: The Roanoke Police Department Mounted Patrol Unit needs a utility building to store sawdust used in stall maintenance, and a mowing tractor that is utilized daily in the operation of the Mounted Patrol Unit. The sawdust is currently transported by tractor- trailer to the stables then dumped onto the ground. The sawdust is covered by a tarp, which allows in moisture causing mold and mildew. The Blue Ridge Masonry Association will be donating the labor and the concrete block in the amount of approximately $6,000 for-the construction of the utility building, and The Roanoke Foundation for Downtown Inc. ("Foundation") has secured donations in excess of $9,000 to complete the building with flooring, roof, and electrical wiring. Considerations: The construction of the utility building will allow the Mounted Patrol Unit to store sawdust, keep the sawdust dry, and free of mold. The mounted patrol tractor is gas operated, and therefore a fire hazard that should be kept in a separate building away from the horses that are housed in the stable. An agreement has been negotiated between the City and Foundation to construct a utility building and grant it to the City for use in connection with the operation of the mounted patrol stable. Recommended Action: Authorize the City Manager to enter into a contract with the Roanoke Foundation for Downtown, Inc. to allow for the construction of a utility building at RCIT in furtherance of Room 364 Municipal South 215 Church Avenue, S.W. Roanoke, Virginia 24011-1591 (540) 853-2333 FAX (540) 853-1138 CityWeb :www. ci. roanoke.va.us Honorable Mayor and Members of Council October 1,2001 Page 2 the operation of the Mounted Patrol Unit and in accordance with the terms of the contract attached to this report and approved by the City Attorney as to form. Upon completion of construction of the utility building, authorize the City Manager to accept on behalf of the City, pursuant to Section 2-263 of the Code of the City of Roanoke (1979) as amended, the donation of the utility building from the Foundation. Respectfully submitted, City Manager DLB:rlh Attachment C; Mary F. Parker, City Clerk William M. Hackworth, City Attorney James D. Grisso, Director of Finance Rolanda A. Johnson, Assistant City Manager for Community Development D. Darwin Roupe, Director of General Services A.L. Gaskins, Chief of Police # CM01-00217 CONTRACT FOR THE CONSTRUCTION AND GRANT OF UTILITY BUILDING FOR THE MOUNTED PATROL STABLE This Contract is dated this __day of September, 2001, by and between the City of Roanoke, Virginia, a municipal corporation ( hereafter "City") organized under the laws of the Commonwealth of Virginia, and the Roanoke Foundation for Downtown Inc.,(hereafter "Foundation") a Virginia corporation. WITNESSETH: WHEREAS, the Foundation is organized as a not-for profit Virginia corporation and is operated in accordance with Intemal Revenue Code {}501(c)(3), and has as one of its purposes "To assist the City of Roanoke to maintain a mounted police force through financial and in-kind support"; and WHEREAS, the Foundation has determined that it will make a grant of a utility building to the City to further the operation and development of the Roanoke City Police Department's Mounted Patrol ("Patrol"); and WHEREAS, the Foundation has obtained certain sums of monies and other commitments for donations of services and other items to be used in designing and constructing a fully functional utility building ("Facility") for the storage of materials used in connection with the operation and maintenance of the mounted patrol stable and to be located on City land at the Roanoke Centre for Industry and Technology ("Center"); and WHEREAS, the Foundation, upon completion of the utility building and acceptance by the City (through the City Manager) will unconditionally donate the entire Facility to the City, and relinquish all rights, title, and interest it has in the Facility to the City; and WHEREAS, the City has determined that it is in the best interests of the City to accept the Foundation's offer to design, construct and donate the Facility; and WHEREAS, in consideration for the design and construction of the Facility, the City will allow the Foundation entry upon the land at the Center to build and construct the Facility. NOW THEREFORE, in consideration of the mutual promises and covenants contained herein, the parties hereto mutually agree as follows: CADocuments and Settings~emealX,Local Settings\Terap\C.Lotus.Note~.DataX~ontract-utilitybuilding(mounted patrol)2.wpd SECTION 1. CONSTRUCTION OF FACILITY mo The Foundation hereby agrees that it will provide and pay for the complete design and construction of the Facility, in accordance with the Design Plan marked as the attached Exhibit A which is hereby incorporated herein, which will consist of one building that is fully functional(complete with electrical outlets) and ready-for-use that will serve as a maintenance and storage center for the Mounted Patrol Stable, and which will include all necessary items, fixtures, and installations necessary to obtain a permanent certificate of occupancy for the Facility. The Foundation warrants and agrees that the design and construction of the Facility will comply with all applicable federal, state and local laws, ordinances and regulations, including but not limited to the Americans With Disabilities Act. The Foundation also acknowledges and agrees that it, its representatives, agents volunteers, contractors, subcontractors, employees and assigns will obtain any and all permits necessary for the design and construction of the Facility. The Foundation acknowledges that it has raised approximately fifteen thousand dollars ($15,000.00) for the design and construction of the Facility and that total funding for the design and construction of the Facility will be from funds or services or donations solely obtained and raised by the Foundation for construction of the Facility. The Foundation further acknowledges and agrees that it is solely responsible for coordinating with any third party entities for the provision of all commitments or donations of services or items for the Facility and which will include, but not be limited to, the following services: grading; electrical services; storm water detention; erosion and sediment control; pad. The Foundation and the City expressly acknowledge and agree that the City is not in any way responsible for the provision of any of these services. SECTION 2. DONATION OF FACILITY The Foundation agrees that upon completion of the construction of the Facility, and upon written acceptance by the City, through the City Manager, and the issuance of the permanent, final certificate of occupancy, it will unconditionally donate the Facility to Roanoke City, pursuant to the Code of the City of Roanoke § 2-263, thereby relinquishing all rights, title and interest the Foundation has, or may have, in the facility to the City. The Foundation warrants that upon its donation of the Facility to the City, there will be no outstanding liens or judgments encumbering the Facility. SECTION 3. CONSIDERATION In consideration of the Foundation providing and paying for the complete design and construction of the Facility, the City hereby agrees to and does grant permission to the Foundation, its representatives, agents, subcontractors, employees and assigns, to enter and build the Facility on the land at the Center. C:~Docuraents and Settinss~cmcal~ocal Settings\Temp\C.Lotua.Notea. Data\contract-utilitybuilding(mounted patrol)2.wpd SECTION 4. COMPLETION DATE The Foundation hereby agrees that it will use reasonable commercial efforts to cause construction of the Facility to be completed and the Facility ready for occupancy on or before , 2001. SECTION 5. CITY MANAGER'S REVIEW The Foundation hereby agrees that during the design and construction of the Facility, it will present all plans for the design or construction to the City Manager (or her designated representative) for her review and approval. The City Manager's approval is an express condition of this Contract that must be obtained before the design is finalized and before any construction of the Facility is started. The City Manager shall have ten days to approve or reject any or all plans presented to her for approval in her sole discretion. The City Manager shall have the right to have the Foundation stop the design process or the construction for good cause or if the construction is not substantially in accordance with the approved plans. The Foundation also agrees that it will notify the City Manager and obtain her written approval before any material changes, if needed, are made to any of the plans, or the construction, throughout all phases of the design and construction of the Facility. If the City Manager does not initially approve the Foundation's plans, the Foundation shall not be required to build the Facility and this Agreement shall be terminated. If the City, after approving the plans, requests changes which increases the cost of construction of the Facility, the City shall be responsible for funding such increases in advance. The City Manager shall have five (5) days after receipt to approve or reject change orders. Failure to approve or reject plans or change orders within the designated time shall be considered approval of such plans or change orders. SECTION 6. CLEANUP The Foundation agrees to leave the real property that is the subject of this Contract, upon completion of the construction of the Facility, in good condition and free of all debris, all to the reasonable satisfaction of the City's representative. Furthermore, the Foundation agrees to dispose properly of all debris and other items resulting from construction of the Facility, all at no cost to the City. SECTION 7. LIMITATION OF LIABILITY The Foundation' s liability for responsibility to the City, the Roanoke City Police Department, their officers, employees, agents or volunteers with respect to liabilities of any nature that might arise against the City, the Roanoke City Police Department, their officers, employees, agents and volunteers with respect to the design and construction of the Facility or otherwise arising with respect to this Contract, shall be limited to the extent the Foundation's insurance coverage is available to satisfy said liability, to the end that the assets of the Foundation shall not be available to satisfy any such liability. C:~ocumants and Settings~crncal~ocal Settings\Temp\CLotus. Notes. Data\contract-utilitybuilding(mounted patrol)2.wpd SECTION 8. ASSIGNMENT OF WARRANTIES The Foundation hereby agrees to assign to the City all transferable warranties, express or implied, given by its contractors and suppliers in connection with this Contract or in any way connected to the design and/or construction of the Facility. SECTION 9. INSURANCE The Foundation hereby agrees that it will provide the following insurance coverages for the life of the Contract and comply with the requirements set forth herein. Commercial General Liability. Commercial General Liability insurance shall insure against all claims, loss, cost, damage, expense or liability form loss of life or damage or injury to persons or property arising out of the Foundation's performance under this Contract. The minimum limits of liability of this coverage shall be $1,000,000 combined single limit for any one occurrence. This insurance requirement may be met by any combination of primary and excess insurance. Automobile Liability. The minimum limit of liability for Automobile Liability Insurance shall be $1,000,000 combined single limit applicable to owned or nonowned vehicles used in the performance of any work under this Contract. Proof of Insurance Coverage. The policies of insurance required by this Contract shall be purchased from a reputable insurer licensed to do business in Virginia and maintained for the life of the Contract by the Foundation. Other insurance requirements include the following: The Foundation shall furnish the City with the required certificates of insurance prior to commencing any work on the land or the Facility, showing the insurer, type of insurance, policy number, policy term, deductible, and the amount insured of property coverages and the limits for liability coverages. The required certificates of insurance shall contain substantially the following statement: "The insurance covered by this certificate shall not be canceled or materially altered except after a thirty day (30) day written notice has been Provided to the Risk Management Officer for the City of Roanoke." o The required certificates of insurance shall name the City of Roanoke, its officers, agents, volunteers, and employees as additional insureds. Co Additional Insureds. The Foundation will require its contractors to carry commercial general liability insurance of at least one million ($1,000,000), and naming the City of Roanoke, its officers, agents, volunteers, and employees as additional insureds, and where applicable, workers' compensation insurance, and to furnish to the City and to the Foundation certificates of insurance evidencing the same prior to commencing any work in the land or C:~ocuments and Settings~cmcal~ocal Settings\Temp\C.Lotus.Notes.Data~contract-utilitybuilding(mounted patrol)2.wpd the Facility. SECTION 10. NONWAIVER The Foundation hereby agrees that the City's waiver or failure to enforce or require performance of any term or condition of this Contract or the City's waiver of any particular breach of this Contract by the Foundation extends to that instance only. Such waiver or failure is not and shall not be a waiver of any of the terms or conditions of this Contract or a waiver of any other breaches of the Contract by the Foundation and does not bar the City from requiring the Foundation to comply with all the terms and conditions of this Contract and does not bar the City from asserting any and all rights and remedies it has or might have against the Foundation under this Contract or by law. SECTION 11. SEVERABILITY If any term of this Contract is found to be void or invalid, such invalidity shall not affect the remaining terms of this Contract, which shall continue in full force and effect. SECTION 12. APPLICABLE LAW By virtue of entering into this Contract, the Foundation agrees to submit itself to a court of competent jurisdiction in the City of Roanoke, Virginia, and further agrees that this Contract is controlled by the laws of the Commonwealth of Virginia and that all claims, disputes, and other matters shall be decided only by such court according to the laws of the Commonwealth of Virginia. SECTION 13. COOPERATION Each party agrees to cooperate with the other in executing any documents or taking appropriate action necessary to carry out the intent and purpose of this Contract. SECTION 14. HEADINGS The Section Captions and Headings in this Contract are for convenience and reference purposes only and shall not affect in any way the meaning and interpretation of this Contract. SECTION 15. REPRESENTATIVES The Foundation hereby designates Joseph B. Wright as the representative of the Foundation who will be in charge of this project for the Foundation. The City designates Sergeant Robert Harman whose address is 348 West Campbell, Roanoke, Virginia 24011, as its representative for this project. Either party may change the designation of representatives upon giving notice to the other party in writing. SECTION 16. ENTIRE CONTRACT C:~ocuments and Settlnss~cmcal~-ocal Settings\Temp\C.Lotus. Notes. Data~contract-utilitybuilding(mounted patrol)2.wpd This Contract constitutes the complete understanding between the City and the Foundation. All the terms and conditions of this Contract shall be binding upon the City and the Foundation, their heirs, successors, or assigns, and cannot be modified by any oral representation or promise of any agent or other written representative of either the City or the Foundation. This Contract may be modified only by written agreement properly executed by the parties. IN WITNESS WHEREOF, the parties have executed this Contract by the following signature of their authorized representatives. ATTEST: CITY OF ROANOKE, VIRGINIA City Clerk City Manager WITNESS: ROANOKE FOUNDATION FOR DOWNTOWN, INC. By. President Approved as to Form: Approved as to Execution: Assistant City Attorney Assistant City Attomey C:~Documents and Settlngs~emcalkLocal Settings\Temp\C,Lotus. Notes.Data~ontract-utilitybuilding(mounted patrol)2.wpd MARY F. PARKER. ChIC City Clerk CITY OF ROANOKE OFFICE OF CITY CLERK 215 Church Avenue. S.W.. Room 456 Roanoke. Virginia 24011-1536 Telephone: (540) 853-2541 Fax: (540) 853-1145 E-mail: clerkc, aci.roanoke.va.us October 5, 2001 File #230 STEPHANIE M. MOON Deputy City Clerk Susan Jennings, Executive Director Board of Directors Arts Council of the Blue Ridge 20 East Church Avenue Roanoke, Virginia 24011 Dear Ms. Jennings: I am enclosing copy of Resolution No. 35601-100101 endorsing the Master Plan for Cultural Institutions of the Roanoke Valley and supporting the efforts of the Arts CQuncil of the Blue Ridge and all participating organizations to implement the Master Plan. The abovereferenced measure was adopted by the Council of the City of Roanoke at a regular meeting which was held on Monday, October 1,2001. Sincerely, Mary F. Parker, CMC City Clerk MFP:mh Enclosure pc: Darlene L. Burcham, City Manager James D. Grisso, Director of Finance Elizabeth A. Neu, Director of Economic Development HSAgenda.01\October 1, 2001 correspondance.wpd IN THE CITY COUNCIL FOR THE CITY OF ROANOKE, VIRGINIA, The 1st day of October, 2001. No. 35601-100101. A RESOLUTION supporting the Master Plan for the Cultural Institutions of the Roanoke Valley. ~-- WHEREAS, a steering committee comprised of representatives of the eighteen major cultural and five major economic development organizations in the Roanoke Valley, representatives of the two valley Civic Centers, and representatives of the governments of the Cities of Roanoke and Salem and the County of Roanoke have worked diligently to develop a Master Plan for our cultural resources; WHEREAS, the cultural assets of the Roanoke Valley are an important economic, educational and quality of life resource; WHEREAS, the Master Plan provides methods to work cooperatively to strengthen and enhance the Roanoke Valley's cultural institutions; WHEREAS, the Vision 2001 Comprehensive Plan for the City of Roanoke recommends support of the region's cultural organizations; and WHEREAS, the preservation of such cultural assets will assist the City and the region in achieving economic growth and educational excellence. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Roanoke that the City of Roanoke has an interest in the preservation and enhancement of the Roanoke Valley's cultural institutions and therefore endorses the Master Plan for the Cultural Institutions of the H:LMEA SURES~r-c ulturalinstitufioms. 1 Roanoke Valley and supports the efforts of The Arts Council of the Blue Ridge and all the participating organizations to implement the Master Plan. ATTEST: City Clerk. H:KMEA SURES'a'.-cultunflinzfitution~. 1 October 1, 2001 RE¢£1V£~... f the CITY CLERKS l~rtc~ City Manager 1)1 P3:33 Honorable Ralph K. Smith, Mayor Honorable William H. Carder, Vice-Mayor Honorable William D. Bestpitch, Council Member Honorable C. Nelson Harris, Council Member Honorable W. Alvin Hudson, Jr., Council Member Honorable William White Sr., Council Member Honorable Linda F. Wyatt, Council Member Subject: Dear Mayor Smith and Members of City Council: A resolution in support of the Master Plan for the Cultural Institutions of the Roanoke Valley. A steering committee comprised of representatives of the major cultural organizations and local governments has been working to develop a Master Plan for the Cultural Institutions ofthe Roanoke Valley. This Master Plan addresses the following five areas: education, funding, legislative, marketing, and transportation and infrastructure. The plan illustrates how to better preserve, develop and improve the .identity of the institutions as well as how to promote transportation connections betv, een these institutions. The Vision 2001 Comprehensive Plan for the City of Roanoke recommends support of the region's cultural institutions and recognizes that the health of these institutions directly affects the City of Roanoke and the Roanoke Valley. By working together through the strategies developed in the Master Plan, these institutions can more effectively fulfill their missions and positively impact the entire Valley. Recommendation: Adopt a resolution in support of the Master Plan of the Cultural Institutions of the Roanoke Valley. ~uf,ene L. ~urcnam City Manager DLB/sem Attachment C: Mary F. Parker, City Clerk William M. Hackworth, City Attorney James D. Grisso, Director of Finance Elizabeth Neu, Director of Economic Development Susan Jennings, Arts Council ~3M01-00216 Room 364 Municipal South 215 Church Avenue, S.W. Roanoke, Virginia 24011-1591 (540) 853-2333 FAX (540) 853-1138 CityWeb:www. ci.roanoke.va.us JAMES D. GRISSO Director of Finance September 24, 2001 CITY OF ROANOKE DEPARTMENT OF FINANCE 215 Church Avenue, S.W., Room 461 R O. Box 1220 Roanoke, Virginia 24006-1220 Telephone: (540) 853-2821 Fax: (540) 853-2940 RECEIVED CITY CLERICS OFFICE · 01 SEP 24 P1:18 JESSE A. HALL Deputy Director TO: FROM: SUBJECT: Mary F. Parker, City Clerk James D. Grisso, Director of Fina Reservation of Space Please reserve space on the October 1, 2001 agenda of City Council for the August monthly financial report. JDG:s JAMES D. GRISSO Director of Finance October 1, 2001 CITY OF ROANOKE DEPARTMENT OF FINANCE 215 Church Avenue, S.W., Room 461 P.O. Box 1220 Roanoke, Virginia 24006-1220 Telephone: (540) 853-2821 Fax: (540) 853-6142 RECEIVED CITY CLERKS OFFICE '01 St'P27 AI0:47 JESSE A. HALL Deputy Director The Honorable Ralph K. Smith, Mayor The Honorable William H. Carder, Vice Mayor The Honorable William O. Bestpitch, Council Member The Honorable C. Nelson Harris, Council Member The Honorable W. Alvin Hudson, Jr., Council Member The Honorable William White, Sr., Council Member The Honorable Linda F. Wyatt, Council Member Dear Mayor Smith and Members of City Council: SUBJECT: August Financial Report This financial report covers the first two months of the 2001-2002 fiscal year. The following narrative discusses revenues and expenditures to date. REVENUE General Fund revenues reflect a decrease of 13.21% or $1,301,000 compared to FY01. Variances in specific categories of revenues are as follows: General Property Taxes declined 40.95% or $800,000. Real estate taxes decreased from the same period in the prior year due to earlier receipt of payments in FY01. Real estate taxes are projected to increase approximately 3% in the current year. Personal property taxes are also down from the prior year, but the majority of these taxes will be received in future months as they become due. Other Local Taxes decreased 21.26% or $1,073,000. Sales tax showed a slight decline from the prior year. Electric and water utility tax decreased due to timing differences. Permits, Fees and Licenses are up $49,000 or 40.56% due to increases in building, electrical and plumbing inspection fees. Fines and Forfeitures are below prior year collections by 7.06% or $11,000. The decline is due to decreased collections of Circuit Court fines and a decline in parking ticket revenues. Grants-in-Aid Commonwealth rose 32.41% or $568,000 due to timing differences in the receipt of rental car tax and an increase in jail block grant revenue. Jail block grant revenues are up due to an increase in the number of state prisoners housed at the City Jail. Comprehensive Services Act revenues also increased due to timing differences. During the prior fiscal year, reimbursement received under the Comprehensive Services Act was delayed pending state approval of the City's utilization management plan. Miscellaneous Revenue decreased $69,000 or 90.48%. An increase in the volume of used vehicles necessitated an earlier surplus sale in FY01. The fall surplus property sale was held in August in the prior year, but is usually conducted later in the fiscal year. H6horable Mayor and Members Roanoke City Council October 1, 2001 Page 2 Internal Services are up $61,000 or 127.63% due to increased building maintenance billings and a timing difference in billings for airport fire safety. EXPENDITURES AND ENCUMBRANCES General fund expenditures and encumbrances have increased 9.19% or $3,343,000 since FY01. Variances in individual expenditure categories are discussed as follows: Judicial Administration expenditures are up $142,000 or 15.90%. Juvenile and Domestic Relations Court Services expenditures increased due to timing differences related to payments for housing children detained by the courts. Personal service expenditures of the Circuit Court have also increased due to additional law clerk positions which were established during September of FY01. Public Safety expenditures increased 10.23% or $806,000. Jail expenditures are up due to timing differences related to payments for health care services. Communications expenditures rose due to payment of the City' s portion of the annual maintenance agreement for the regional radio system. Personal services costs of Fire Operations increased. Public Works expenditures have increased 16.99% or $991,000. Annual street paving costs are up due to more primary roads, which are more expensive to pave, being included in the contract. Parks and Grounds Maintenance expenditures increased due to the purchase of various park. equipment. Facilities Maintenance expenditures increased due to library and courthouse renovation costs and repmrs to two fire stations. Community Development expenditures increased 45.55% or $300,000 due to the establishment of the Neighborhood Partnership department as part of the General Fund. This department was included in the Grant Fund in prior years. Contributions to the Roanoke Valley Convention and Visitors Bureau increased due to timing differences. Nondepartmental expenditures increased 52.44% or $615,000. Transfers to the Capital Projects Fund increased due to transfers of funding for the stadium/amphitheater project, the curb, gutter and sidewalk project, and the Walnut Avenue bridge project. I would be pleased to answer questions which City Council may have regarding the monthly financial statements. JDG/THT Attachments CITY OF ROANOKE, VIRGINIA SUMMARY OF CITY MANAGER TRANSFERS AND AVAILABLE CONTINGENCY AUGUST 31, 2001 Transfer Number General Fund: Date CMT-1863 07/30/01 CMT-532 08/09/01 CMT-533 08/09/01 CMT-1176 08/28/01 CMT-1177 08/31/01 Ex_~lanation From T__~o Donation to Brain Injury Association Tipping Fees Tipping Fees Deficit in State and Local Hospitalization Reimbursements Fees Payable Downtown Roanoke Inc. for Farmer's Market Agreement Available Contina_ ency Balance of Contingency at July 1,2001 *Contingency appropriations from above Contingency appropriations through budget ordinances: BO 35515 08/20/01 Drug Prosecutor Available Contingency at August 31,2001 Jail Solid Waste Management Solid Waste Management Human Services Support Contingency* Contingency Membership and Affiliations Engineering Building Maintenance Hospitalization Program Memberships and Affiliations Total General Fund Transfer to Grant Fund Amount 5,000 568 2,270 995 15,856 24,689 500,000 (15,856) (8,170) 475,974 CITY OF ROANOKE, VIRGINIA GENERAL FUND STATEMENT OF REVENUE Revenue Source General Property Taxes Other Local Taxes Permits, Fees and Licenses Fines and Forfeitures Revenue from Use of Money and Property Grants-in-Aid Commonwealth Grants-in-Aid Federal Government Charges for Services Miscellaneous Revenue Internal Services Total Year to Date for the Period Current Fiscal Year Revised July I - Aug 31 July I - Aug 31 Percentage Revenue 2000-2001 2001-2002 of Change Estimates $1,953,408 $1,153,517 (40.95) % 5,048,900 3,975,749 (21.26) % 120,028 168,713 40.56 % 152,167 141,423 (7.06) % 199,983 197,804 (1.09) % 1,752,179 2,320,029 32.41% % 500,150 476,722 (4.68) % 76,264 7,261 (90.48) % 47,470 108,055 127.63 % $9,850,549 $8,549,273 (13.21) % $77,105,366 58,016,878 957,150 1,014,600 1,118,330 46,332,925 34,300 3,933,997 560,236 2,285,692 $191,359,474 Percent of Revenue Estimate Received 1.50% 6.85% 17.63% 13.94% 17.69% 5.01% 12.12% 1.30% 4.73% 4.47% STATEMENT OF EXPENDITURES AND ENCUMBRANCES Year to Date for the Period Current Fiscal Year July I - Aug 31 July I - Aug 31 Percentage Unencumbered Revised Expenditures 2000-2001 2001-2002 of Change Balance Appropriations General Government $2,167,446 $2,238,347 3.27 % Judicial Administration 891,915 1,033,759 15.90 % Public Safety 7,877,642 8,683,514 10.23 % Public Works 5,833,848 6,825,233 16.99 % Health and Welfare 3,226,665 3,211,542 (0.47) % Parks, Recreation and Cultural 1,054,549 1,051,087 (0.33) % Community Development 657,536 957,061 45.55 % Transfer to Debt Service Fund 6,065,612 6,271,344 3.39 % Transfer to School Fund 7,432,572 7,664,611 3.12 % Nondepartmental 1,171,992 1,786,587 52.44 % Total $36,379,777 $39,723,085 9.19 % $1 O, 444,042 5,310,216 37,926,014 17,524,715 24,166,934 3,647,254 3,877,578 5,995,555 38,323,057 6,873,096 $154,088,461 $12,682,389 6,343,975 46,609,528 24,349,948 27,378,476 4,698,341 4,834,639 12,266,899 45,987,668 8,659,683 $193,811,546 Percent of Budget Obligated 17.65% 16.30% 18.63% 28.03% 11.73% 22.37% 19.80% 51.12% 16.67% 20.63% 20.50% 2 CITY OF ROANOKE, VIRGINIA SCHOOL FUND STATEMENT OF REVENUE Year to Date for the Period Current Fiscal Year Percent of Revised Revenue July I - Aug 31 July 1 - Aug 31 Percentage Revenue Estimate Revenue Source 2000-2001 2001-2002 of Change Estimates Received State Sales Tax $761,570 $751,736 (1.29) % $9,492,986 % Grants-in-Aid Commonwealth 6,003,031 5,525,078 (7.96) % 41,656,787 13.28 % Grants-in-Aid FederalGovernment 6,860 9,236 (34.64) % 115,390 8.00 % Charges for Services 111,148 199,212 79.23 % 1,971,820 10.10 % Transfer from General Fund 7,432,572 7,664,611 3.12 % 45,987,668 16.67 % Special Purpose Grants 1,027,060 2,468,897 140.38 % 1,594,579 NA Total $15,342,241 $16,618,770 8.32 % $100,819,230 16.48 % SCHOOL FUND STATEMENT OF EXPENDITURES AND ENCUMBRANCES ExDenditures Year to Date for the Period Current Fiscal Year Percent of July I -Aug 31 July 1 - Aug 31 Percentage Unencumbered Revised Budget 2000-2001 2001-2002 of Change Balance Appropriations Obligated Instruction General Support Transportation Operation and Maintenance of Plant Facilities Other Uses of Funds Special Purpose Grants $4,571,595 $4,516,754 (1.20) % $70,137,140 $74,653,894 6.05 638,464 631,244 (1.13) % 3,211,470 3,842,714 16.43 167,857 154,338 (8.05) % 3,733,508 3,887,846 3.97 1,690,104 1,190,286 (29.57) % 9,166,179 10,356,465 11.49 320,318 985,779 207.75 % 60,505 1,046,284 94.22 2,596,688 4,751,913 83.00 % 1,855,588 6,607,501 71.92 1,779,913 1,594,579 (10.41) % 1,594,579 NA Total $11,764,939 $13,824,893 17.51% $88,164,390 $101,988,283 13.56 % CITY OF ROANOKE, VIRGINIA SCHOOL FOOD SERVICE FUND STATEMENT OF REVENUE Year to Date for the Period Current Fiscal Year Percent of Revised Revenue July 1 -Aug 31 July 1 -Aug 31 Percentage Revenue Estimate Revenue Source 2000-2001 2001-2002 of Change Estimates Received Grants-in-Aid Commonwealth $ - $ - - % $84,464 ' % Grants-in-Aid Federal Government 31,760 25,728 (18.99) % 2,891,594 0.89 % Charges for Services 11,905 82,670 594.41% 1,545,256 5.35 % Total $43,665 $108,398 148.25 % $4,521,314 2.40 % SCHOOL FOOD SERVICE FUND STATEMENT OF EXPENDITURES AND ENCUMBRANCES Year to Date for the Period Current Fiscal Year Percent of July 1 - Aug 31 July 1 -Aug 31 Percentage Unencumbered Revised Budget ExDenditures 2000-2001 2001-2002 of Change Balance Appropriations Obligated Food Services $278,607 $334,860 20.19 % $4,211,149 $4,546,009 7.37 % Total $278,607 $334,860 20.19 % $4,211,149 $4,546,009 7.37 % CITY OF ROANOKE, VIRGINIA CAPITAL PROJECTS FUND STATEMENT OF EXPENDITURES, ENCUMBRANCES, AND UNENCUMBERED APPROPRIATIONS SUMMARY AS OF AUGUST 31, 2001 General Government Education Flood Reduction Economic Development Community Development Public Safety Recreation Streets and Bridges Sanitation Projects Traffic Engineering Capital Improvement Reserve Total Expenditures Unexpended Outstanding Unobligated Budget To Date Balance Encumbrances Balance $18,843,420 $12,501,505 $6,341,915 $1,869,521 $4,472,394 2,500,000 2,500,000 15,649,118 9,043,242 6,605,876 213,047 6,392,829 27,091,103 15,868,935 11,222,168 1,074,008 1 O, 146,160 5,767,467 2,448,702 3,318,785 626,044 2,692,741 12,490,450 10,732,105 1,668,345 559,247 1,109,098 8,884,537 5,037,070 3,847,457 875,366 2,972,101 27,577,470 23,722,943 3,854,527 1,545,724 2,308,803 2,555,725 1,790,140 765,585 117,077 646,508 4,391,660 3,606,799 784,861 161,106 623,755 (1,087,465) (1,087,465) (1,087,465) $124,573,505 $87,251,441 $37,322,064 $7,041,140 $30,280,924 CITY OF ROANOKE, VIRGINIA SCHOOL CAPITAL PROJECTS FUND STATEMENT OF EXPENDITURES, ENCUMBRANCES, AND UNENCUMBERED APPROPRIATIONS SUMMARY AS OF AUGUST 31, 2001 Elementary Schools Renovation Middle Schools Renovation High Schools Renovation Technology Improvements Interest Expense Capital Improvement Reserve Total Expenditures Unexpended Outstanding Unobligated Budget To Date Balance Encumbrances Balance $14,053,675 $12,400,062 3,920,549 3,882,637 3,500,000 3,209,133 781,786 781,786 262,929 259,160 1,051,271 $1,653,613 $1,641,203 37,912 37,453 290,867 10,715 3,769 1,051,271 $23,570,210 $20,632,778 $3,037,432 $1,699,381 $12,410 449 280,152 3,769 1,051,271 $1,348,051 CITY OF ROANOKE, VIRGINIA CAPITAL PROJECTS FUND COMPARATIVE STATEMENT OF REVENUES FOR THE 2 MONTHS ENDING AUGUST 31, 2001 Interest Revenue: Interest on Bond Proceeds Interest on SunTrust Lease Interest on Idle Working Capital Total Interest Revenue Multi Year Revenues: Intergovernmental Revenue: Federal Government: FEMA - Regional Mitigation Project Commonwealth: Virginia Transportation Museum - ISTEA Total Intergovernmental Revenue Revenue from Third Parties: Verizon - Brambleton Avenue Signals Carillon Health Systems - Land Sale Times-World Corporation - Land Sale Mill Mountain Visitors Center - Private Donations Total Revenue from Third Parties Other Revenue: Transfers from General Fund Total Other Revenue Total FY 2002 $126,512 4,058 128,889 259,459 16,176 16,176 365,000 100 365,100 1,144,900 1,144,900 $1,785,635 FY 2001 $345,236 158,745 503,981 230,692 230,692 36,055 1,260 37,315 462,000 462,000 $1,233,988 CITY OF ROANOKE, VIRGINIA WATER FUND COMPARATIVE INCOME STATEMENT FOR THE 2 MONTHS ENDING AUGUST 31, 2001 Operating Revenues Commercial Sales Domestic Sales Industrial Sales Town of Vinton City of Salem County of Botetourt County of Bedford Customer Services Charges for Services Total Operating Revenues Operating Expenses Personal Services Operating Expenses Depreciation Total Operating Expenses Operating Income Nonoperating Revenues (Expenses) Interest on Investments Rent Miscellaneous Revenue Interest and Fiscal Charges Net Nonoperating Expenses Net Income FY 2002 $742,333 565 811 135 495 1 838 5 724 38 398 3 063 83 001 406 775 1,982,438 761,647 721,746 277,492 1,760,885 221,553 46,443 14,801 33,411 (172,292) (77,637) $143,916 FY 2001 $632 688 595 279 57 050 2 972 5168 38,284 2 564 53,901 403,820 1,791,726 749,461 453,303 285,066 1,487,830 303,896 82,580 11,954 3,778 (187,760) (89,448) $214,448 CITY OF ROANOKE, VIRGINIA SEWAGE TREATMENT FUND COMPARATIVE INCOME STATEMENT FOR THE 2 MONTHS ENDING AUGUST 31, 2001 Operating Revenues Sewage Charges - City Sewage Charges - Roanoke County Sewage Charges - Vinton Sewage Charges - Salem Sewage Charges - Botetourt County Customer Services Interfund Services Total Operating Revenues Operating Expenses Personal Services Operating Expenses Depreciation Total Operating Expenses Operating Income Nonoperating Revenues (Expenses) Interest on Investments Miscellaneous Revenue Net Nonoperating Revenues Net Income FY 2002 $1,273 538 144 822 41 126 154 473 23 515 46 215 16262 1,699,951 405,994 871,251 303,915 1,581,160 118,791 44,576 91 44,667 $163,458 FY 2001 $1,236,190 142,146 36,929 150,593 24,004 86,344 7,055 1,683,261 362,356 783,194 200,144 1,345,694 337,567 69,694 69,694 $407,261 CITY OF ROANOKE, VIRGINIA CIVIC CENTER FUND COMPARATIVE INCOME STATEMENT FOR THE 2 MONTHS ENDING AUGUST 31, 2001 Operating Revenues Rentals Event Expenses Display Advertising Admissions Tax Electrical Fees Novelty Fees Facility Fees Charge Card Fees Commissions Other Total Operating Revenues Operating Expenses Personal Services Operating Expenses Depreciation Total Operating Expenses Operating Loss Nonoperating Revenues Transfer from General Fund Interest on Investments Miscellaneous Total Nonoperating Revenues Net Loss FY 2002 $42,341 17,366 50,200 19,494 4,440 4OO 6,712 17,313 43,279 3,425 204,970 287,968 275,787 81,900 645,655 (440,685) 4,499 153 4,652 ($436,033) FY 2001 $34,161 19,824 10,979 7,030 40,201 7,009 119,204 231,027 202,047 73,334 506,408 (387,204) 7,800 13,322 1,308 22,430 ($364,774) 9 CITY OF ROANOKE, VIRGINIA TRANSPORTATION FUND COMPARATIVE INCOME STATEMENT FOR THE 2 MONTHS ENDING AUGUST 31, 2001 Operating Revenues Century Station Parking Garage Williamson Road Parking Garage Market Square Parking Garage Church Avenue Parking Garage Tower Parking Garage Surface Parking Lots Total Operating Revenues Operating Expenses Operating Expenses Depreciation Total Operating Expenses Operating Income Nonoperating Revenues (Expenses) Transfer From General Fund Interest on Investments Interest and Fiscal Charges Miscellaneous Net Nonoperating Revenue (Expenses) Net Income FY 2002 $64,509 72,736 41,373 77,742 61,257 19,872 337,489 123,797 89,096 212,893 124,596 2,454 (82,854) 268 (80,132) $44,464 FY 2001 $57,255 60,161 36,745 74,591 67,049 12,022 307,823 134,702 91,856 226,558 81,265 130,000 5,643 (86,958) 7,255 55,940 $137,205 10 CITY OF ROANOKE, VIRGINIA HOTEL ROANOKE CONFERENCE CENTER FUND COMPARATIVE INCOME STATEMENT FOR THE 2 MONTHS ENDING AUGUST 31, 2001 FY 2002 COMMISSION (1) CONFERENCE CENTER (2) TOTAL FY 2001 Operating Revenues Conference Center Total Operating Revenues $ $ 465,231 $ 465,231 $ 584,055 465,231 465,231 584,055 Operating Expenses Personal Services Fees for Professional Services Administrative Expenses Conference Center Total Operating Expenses 17,433 - 17,433 14,123 - 14,123 558 558 426,668 426,668 32,114 426,668 458,782 (32,114) 38,563 6,449 16,895 20,245 691 452,242 490,073 93,982 Net Operating Income (Loss) Nonoperating Revenues (Expenses) Contributions from City of Roanoke Contributions from Virginia Tech Interest on Investments Rent, Taxes, Insurance, and Other 43,750 43,750 43,750 43,750 28,564 28,564 (2,794) (2,794) 116,064 (2,794) 113,270 83,950 35,769 119,719 75,765 23,262 99,027 43,750 43,750 8,842 (6,354) Net Nonoperating Revenues (Expenses) 89,988 183,970 108,773 75,197 Net Income Before Depreciation Depreciation Expense/Replacement Reserve Net lncome $ 8,185 $ 12,507 $ 20,692 $ Notes to Financial Statement: (1) The column entitled "Commission" represents Commission activity in the City's financial records. (2) The column entitled "Conference Center" represents actual revenue and expenses of the Conference Center, as provided by Doubletree Management. 11 CITY OF ROANOKE, VIRGINIA INTERNAL SERVICE FUNDS COMPARATIVE INCOME STATEMENT FOR THE 2 MONTHS ENDING AUGUST 31, 2001 Operating Revenues Charges for Services Total Operating Revenues Operating Expenses Personal Services Operating Expenses Depreciation Total Operating Expenses Operating Income (Loss) Nonoperating Revenues Interest Revenue Transfer From Other Funds Other Revenue Net Nonoperating Revenues Net Income (Loss) TOTALS Department of Materials Fleet Risk Technology Control Management Management FY 2002 FY 2001 $696,396 $109,057 $341,380 $1,702,592 $2,849,425 $2,514,635 696,396 109,057 341,380 1,702,592 2,849,425 2,514,635 406,413 12,465 244,408 32,836 696,122 668,419 372,332 69,020 131,332 1,831,599 2,404,283 1,924,891 83,355 784,519 - 867,874 376,418 862,100 81,485 1,160,259 1,864,435 3,968,279 2,969,728 (165,704) 27,572 (818,879) (161,843) (1,118,854) (455,093) 29,977 1,077 6,515 75,836 113,405 80,623 151,820 232,443 10,184 10,184 171,277 120,784 1,077 158,335 75,836 356,032 171,277 ($44,920) $28,649 ($660,544) ($86,007) ($762,822) ($283,816) 12 CITY OF ROANOKE, VIRGINIA CITY TREASURER'S OFFICE GENERAL STATEMENT OF ACCOUNTABILITY FOR THE MONTH ENDED AUGUST 31, 2001 TO THE DIRECTOR OF FINANCE: GENERAL STATEMENT OF ACCOUNTABILITY OF THE CITY TREASURER OF THE CITY OF ROANOKE, VIRGINIA FOR THE FUNDS OF SAID CITY FOR THE MONTH ENDED AUGUST 31, 2001. BALANCE AT' - FUND JUL 31, 2001 RECEIPTS DISBURSEMENTS BALANCE AT AUG 31, 2001 BALANCE AT AUG 31, 2000 GENERAL WATER SEWAGE CiViC CENTER TRANSPORTATION CAPITAL PROJECTS CONFERENCE CENTER RKE VALLEY DETENTION COMM DEBT SERVICE DEPT OF TECHNOLOGY MATERIALS CONTROL MANAGEMENT SERVICES FLEET MANAGEMENT PAYROLL RISK MANAGEMENT PENSION SCHOOL FUND SCHOOL CAPITAL PROJECTS SCHOOL FOOD SERVICE FDETC 'GRANT TOTAL $8,544,757.25 $8,770,384.02 $18,765,552.46 ($1,450,411.19) $7,108,356.28 7,920,201.51 640,658.30 2,533,521.07 6,027,338.74 6,290,587.48 7,527,784.32 1,524,484.52 2,319,102.98 6,733,165.86 6,407,418.09 1,131,245.15 191,416.77 187,879.57 1,134,782.35 1,075,864.33 399,681.01 171,471.40 495,169.30 75,983.11 68,879.45 37,393,765.20 593,041.00 2,851,410.51 35,135,395.69 46,837,419.60 4,401,589.74 56,557.65 38,062.89 4,420,084.50 775,565.95 4,716,195.29 310,410.33 275,504.97 4,751,100.65 4,187,204.54 12,800,781.33 6,643,148.33 6,192,793.70 13,251,135.96 7,326,005.33 4,577,952.71 342,900.40 507,856.91 4,412,996.20 4,278,095.20 175,459.63 101,189.12 98,020.93 178,627.82 53,341.68; 185,135.55 178.43 0.00 185,313.98 254,119.36 I 114,791.79 779.50 172,345.70 (56,774.41) 673,234.201 (5,186,932.34) 6,457,705.97 13,259,226.59 (11,988,452.96) (11,521,897.75) 11,819,111.88 1,054,205.27 934,091.23 11,939,225.92 11,348,887.58 1,080,455.90 2,465,378.46 1,019,796.28 2,526,038.08 1,950,301.83, 5,111,216.99 7,624,538.27 2,991,640.35 9,744,114.91 9,291,071.94 i (412,951.43) 0.00 147,408.82 (560,360.25) (1,422,307.06~ 806,200.85 28,182.00 779,683.74 54,699.11 11,298.22 49,498.61 91,401.55 79,807.66 61,092.50 27,273.14 847,824.81 28~8;60~5.65 356,473.22 781,957.24 774,228.25_i $104,005,765.75 $37 356,636.94 $54,005,348.88 $87,357,053 81 $95 794 947 64! CERTIFICATE I HEREBY CERTIFY THAT THE FOREGOING IS A TRUE STATEMENT OF MY ACCOUNTABILITY TO THE CITY OF ROANOKE, VIRGINIA, FOR THE FUNDS OF THE VARIOUS ACCOUNTS THEREOF FOR THE MONTH ENDED AUGUST 31,2001. THAT SAID FOREGOING: CASH: CASH IN HAND CASH IN BANK INVESTMENTS ACQUIRED FROM COMPETITIVE PROPOSALS: OVERNIGHT INVESTMENT COMMERCIAL HIGH PERFORMANCE MONEY MARKET COMMERCIAL PAPER FEDERAL AGENCY BONDS LOCAL GOVERNMENT INVESTMENT POOL REPURCHASE AGREEMENTS STATE NON-ARBITRAGE PROGRAM (U.S. SECURITIES, COMMERCIAL PAPER) VIRGINIA AIM PROGRAM (U. S. SECURITIES) TOTAL $24,053.25 1,741,691.41 2,568,000.00 5,500,314.06 17,450,414.73 4,998,500.00 25,209,443.31 14,000,000.00 844,172.84 15,020,464.21 $87,357,053.81 DATE: SEPTEMBER 13, 2001 DAVID C. ANDERSON, TREASURER 13 CITY OF ROANOKE PENSION PLAN STATEMENT OF CHANGES IN PLAN NET ASSETS FOR THE 2 MONTHS ENDED AUGUST 31, 2001 Additions: Employer Contributions Investment Income Net Appreciation (Depreciation) in Fair Value of Investments Interest and Dividend Income Total Investment Income (Loss) Less Investment Expense Net Investment Income (Loss) Total Additions (Deductions) FY 2002 $566,723 (11,278,179) 164,227 (11,113,952) (91,963) (11,021,989) (10,455,266) FY 2001 $501,691 11,202,684 329,443 (1) 11,532,127 (17,009) 11,549,136 12,050,827 (2) Deductiol3s Benefits Paid to Participants Administrative Expenses Total Deductions Net Increase (Decrease) Net Assets Held in Trust for Pension Benefits: Fund Balance July 1 Fund balance July 31 $2,421,716 8,232 2,429,948 (12,885,214) 326,337,980 $313,452,766 $2,104,750 13,453 2,118,203 9,932,624 350,929,145 $360,861,769 (1) Reversal of accruals made at June 30, 2001 (2) Reversal of accruals made at June 30, 2000 14 CITY OF ROANOKE PENSION PLAN BALANCE SHEET AUGUST 31, 2001 Assets Cash Investments, at Fair Value Due from Other Funds Other Assets Total Assets FY 2002 $2,474,093 312,181,533 1,749 5,434 $314,662,809 FY 2001 $1,950,302 359,962,802 1,749 5,097 $361,919,950 I. iabilities and Fund Balance Liabilities: Due to Other Funds Accounts Payable Total Liabilities Fund Balance: Fund Balance, July 1 Net Gain (Loss) - Year to Date Total Fund Balance Total Liabilities and Fund Balance $1,209,253 79O 1,210,043 326,337,980 (12,885,214) 313,452,766 $314,662,809 $1,058,112 69 1,058,181 350,929,145 9,932,624 360,861,769 $361,919,950 15 October 1, 2001 Members of City Council, City Manager Darlene Burcham and others. I am unable to stay to the completion of Council Meeting today due to having to be at work wearing a specific uniform clothing but want to speak about the name change of Elmwood Park. I realize there is to be a Public Heating on October 18 however, I will be out of town on that date celebrating my 49th Wedding Anniversary of my marriage to the former Esther Mae Bowman. Incidentally her family dates back to around 1882 as residents of Big Lick and Roanoke. They founded and operated Bowman's Bakery, now closed, they were one of the earlier merchants with an outlet store on the Market. The location of their store is now part of Roanoke Weiner Stand. My wife, my sons and I are opposed to the renaming of Elmwood Park to Martin Luther King, Jr. Park. Dr. King was a great man, his contributions to the American way of life was invaluable. There are numerous memorials named after him already. Yet another park is not going to make his memory shine any brighter. ~hat is not the main reason for my objecting to the renaming. The history of Elmwood and the City of Roanoke should preclude the naming of the park after any individual or changing the name for any reason. The name Elmwood Park has been used in the community for nearly 150 years and even predates the Civil War and preceeds the naming of Roanoke Elmwood Park is probably the most recognizable area in Roanoke. It is in the center of the City. If someone knows an event is to be held in Elmwood Park there is immediate recognition of where the event is to be. Any name change will only confuse people as to where an event may be. In other words, IF IT AIN'T BROKE, DON'T FIX IT. I also feel to rename Elmwood Park in this manner will be very devisive to the community. I personally sent out a request for opinions pro and con on this issue to 104 e-mail addresses. To date I have 51 replies with 48 against renaming, 2 for renaming and 1 that it just doesn't matter. A 49% return, I understand that in a survey such as this, a 10-15% remm is outstanding so a 49% remm is a very strong showing of how people feel. This is a 94% vote against renaming the park. This should show how sensitive this is There is a section of Elmwood Park that has a Memorial to former Mayors, including Walter Wood, Leo Henebry, Richard Edwards, Bill Hunter, Arch Minton, Roy Webber, Bob Woody, Walter Young, Vince Wheeler, Willis Anderson, Murray Stoller, Benton O. Dillard, Noel Taylor, David Bowers, current Mayor Ralph Smith and 17 other citizens of Roanoke. I think it would be inappropriate to overshadow the many accomplishments of these dedicated citizens who gave many years of service and fmancial loss by naming the Park for anyone, much less someone that had no direct contact with our city. The committee that has made the recommendation I feel has been very insensitive to the feelings of the vast majority of the people of Roanoke as witnessed by my above figures. Granted they made their recommendation based on their feelings but I do not think they arrived at the proper way to honor Dr. King. I had the distinct honor of serving on the Memorial for Mayor Taylor. One person recommended to me the possibility of renaming Elm wood Park after him and after I explained how I felt, the individual agreed that it was better to name the Municipal Building for him. The Municipal Building had yet to have a name prior to the results of our committee. There were several notices in the newspaper listing members of our committee so people could give their input. I may have missed it but I never saw a notice that listed the members of the Martin Luther King committee. Thank you for your time. I feel you would be doing a great service to the people of Roanoke if you would cancel the Public Hearing and ask the committee to come up with another recommendation after you let the people of Roanoke know who is on the committee. Thank you for your time and what you do for our City of Roanoke. Bob Caudle 4231 Belford St. SW Roanoke, VA 24018