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<br />December 9,2008
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<br />sweeper, and an addition to the City garage.
<br />
<br />It IS now time to enter into a lease
<br />
<br />purchase agreement, not to exceed $990,000, with Carter Bank & Trust for
<br />financing of such equipment and project with interest rate of 2.8%. Council, by
<br />approving the resolution, will authorize staff to enter in the agreement, with the
<br />selected institution, at the agreed upon interest rate, and terms of such agreement.
<br />Paul Jacobson, city bond counsel, briefed Council on the RFPs received and advised
<br />the loan should close before Christmas.
<br />
<br />On a motion by Gene Teague, seconded by Kimble Reynolds, with the
<br />following 4-1 recorded vote: Mrs. Lawson, aye; Mr. Reynolds, aye; Mr. Stroud, aye;
<br />Mr. Teague, aye; and Mr. Turner, nay. Council adopted the following resolution
<br />approving lease purchase financing:
<br />
<br />RESOLUTION OF TIlE CITY cmlNClL OF THE CITY OF MARTlNSVILLE, VIRGINIA
<br />APPROVING LEASE PURCHASE FINANCING
<br />WHEREAS, the City Council of the City nfMartins\ille, Virginia(the "Couucil") has determined (i) that a need exists fnr certain equipment,
<br />specifIcally a street sweeper and a sludge press (the "Equipmeut") and for the construction, renovatinn and equipping ofan addition to the City's existing
<br />municipal garage building (the "Improvements" and together with thc Equipmcnt, the "Projcct") fe,r use by the City of Martinsville, Virginia (the
<br />"City") as dcscribed in the Lease Agreement (as hereinafter defIned); (ii) that the Project is essential to the gnvernmental functions of the City and (iii)
<br />that it reasonably expects the Project to continue to be essential to the governmental funetinns of the City filr a period nnt less than the tenn of the Lease
<br />Agreement; and
<br />WHEREAS, the Council has taken the necessary steps under the Procurement Act of the Code QfVirginin, 1950, as mnended, to acquire the
<br />Project; and
<br />\VIIEREAS, the Cnuncil propnses tn enter intn a LC,Lse Purchase Agrccment in thc principal amount nfnnl to cxceed $990,000 (the "Lcasc
<br />Agreement") with Carter Bank & Trust (the" Lessor") tn fInance the purchase nf the Project over approximately four years, such Lease Agreement
<br />being substantially in the f{JfIn presented tn the Council at this meeting; mId
<br />WHEREAS, (i) all amounts payable by the City under thc Lease Agrcement (thc "Lease Obligations") arc subject tn appropriation by the
<br />Council; (ii) tlle Cowlcil is under no obligation to make any appropriation with rcspect to tlle Lease Agreement; (iii) the Lease Agreement is not a general
<br />obligalinn nf the City or the Councilor a chargc agaillSt the general credit or taxing power of the City; mId (iv) mnounts payable by the City undcr the
<br />Lcase Agreement do not cnnstitute a debt of the City or the Council within the meaning of ,my constitutional, charter or statutory limitation; and
<br />WHJ<:REAS, the COlmcil reasonably antiCipates that it mId its subordinate entities will not issue tax-exempt obligations in the face amoWlt of
<br />more than $10,000,000 dunng the current calendar year and dcsircs to designatc the Lease Agreement as a "qualifIed tax-exempt obligation" under the
<br />provisions of Section 2/15(b)(3) ofthe Intemal Revenue Code of 198/1, as mnended (the "Code")
<br />NOW, THEREFORE, BE IT RESOLVED, THAT:
<br />I. It is hereby found and determined that the ternlS of the I.ease Agreement in the limll presented to this meeting ,md incorporated in
<br />this resolution are in the best interests of the City li,r the acquisition of the Project. The Lease Agreement shall provide for the portion of rental payments
<br />allocated to intcrest to be at an mlllual interest rate of 2.80% mId a term of approximately four years, as more particularly specilled in the commitment of
<br />the Lessor.
<br />2. The Lease Agreement mId related fm,mcing documents arc hereby approved in substantially the form presented tothis meeting. The
<br />Mayor, Vice-Mayor, City Manager mId any omcn of the City who shall have power generally to execute contracts on behalfofthe City (collectively, the
<br />"City Officers") be, and each of them hereby is, authorized to execute, acknowledge mId deliver the Lease Agreement and related fInancing documents
<br />with mlY clHUlges, insertions and omissions therein as may be approved by the individuals executing thc Lease Agreement mid such documents, such
<br />approval to be cmclusivcly evidenced by the cxecutim and delivery thereof
<br />3. The same City Ot1lcers be, and each of them hereby is, autllOrized and directed to execute mId deliver any mId all other agreements,
<br />tlnancing statements, papers, instruments. opinions, certitlcates, atlldavits mId other documents mId to dn or cause to be done mlY and all other acts and
<br />things necessary or proper for canying out the purposes and intents of this resolution and the Lease Agreement.
<br />4. The Council hereby designates the Lrase Agreement as a "qualilled tax-exempt obligation" within the memling of Section 265(b)(3)
<br />of the Code and rcpresents mId covelHUlts that not more thml $10,000,000 in bonds, notes, leases and other obligations of the City (including subordinate
<br />issuing entities) will be issued in calendar year 2008 and that neither the Council nor the City will designate more than $10.000,000 of "qualified tax-
<br />exempt obligations" purSLHUlt to Section 265(b)(3) of the Code in calend,rr year 2008. The Council covenants that it shall not take or omit to take any
<br />action the taking or omission of which will cause the Lease Obligations to be "arbitrage bnnds" within the meaning of Section 148 of the Code, or
<br />otherwise cause interest on the Lease Obligations derived trom the interest component of rental payments made by the Council under the Lease Agreement
<br />to be ineludable in the gross income lin Federal income t,L, purposes of the registered owners thereof under existing law. Without limiting the generality
<br />of the foregoing, the Council shall complv with .un provision of law that may require it at any time to rebate to the United States any part of the earnings
<br />derived from the investment of the gross proceeds of the Lease Obligations
<br />5 The Council Illrther covenants that it shall nnt permit the proceeds of the Lease Obligations to be used in any manner that would
<br />result in (a) 10% or more of such proceeds being: used in a trade or business carried on by any person other than a govemmental unit, as provided in
<br />Section 141(b) of the Code, proVided that no more thml 5% of such proceeds may be used in a trade or business unrelated to the City's use of the
<br />Equipment, (b) 5% or more of such proceeds belllg used with respect to mlY "output hlcility" (other thml a facility for the fumishing of water), within the
<br />meaning of Section 141 (b )(4) of the Code, or (c) 5% or more of such proceeds being used directly or indirectly to make or finance loans to any persons
<br />other than a governmental unit, as provided in Section 141(c) of the Code; provided, however. that if the Council receives an opinion of nationally
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