2017-08-07 18 00-Russell BOS-Regular Meeting-Packet

2017-08-07 18 00-Russell BOS-Regular Meeting-Packet

Document Date: August 7, 2017 Document: 2017-08-07_18_00-Russell_BOS-Regular_Meeting-Packet.pdf

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Agenda Board of Supervisors August 7, 2017

Russell County Page 1

RUSSELL COUNTY

BOARD OF SUPERVISOR’S MEETING

AGENDA – AUGUST 7, 2017

BOS Board Room Regular Meeting 6:00 PM

Russell County Governmental Center Lebanon, Virginia 24266

CALL TO ORDER – Clerk of the Board

ROLL CALL – Clerk of the Board

APPROVAL OF AGENDA

INVOCATION – Pastor Brad Cook – Rowe Pentecostal Church

PLEDGE OF ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA

PUBLIC HEARING

Courthouse Construction and Maintenance Fees Ordinance

PRESENTATIONS (Limited to 5 minutes)……………………………………………………A-1

Senator Ben Chafin, Delegate Todd Pillion, & Matt Ogburn – Pumped Hydroelectric Storage Power
Shonda Mitchell – Oaks Subdivision Roads
Reggie Childers – Blueways & County Expenses
Kim Short – Clinch River Scenic River Designation Extension Resolution

BOARD APPOINTMENTS……………………………………………………….B-1

Agenda Board of Supervisors August 7, 2017

RUSSELL COUNTY BOARD OF SUPERVISOR’S MEETING AGENDA - AUGUST 7, 2017

BOS Board Room Regular Meeting 6:00 PM

Russell County Governmental Center Lebanon, Virginia 24266

CALL TO ORDER - Clerk of the Board ROLL CALL - Clerk of the Board APPROVAL OF AGENDA INVOCATION — Pastor Brad Cook — Rowe Pentecostal Church PLEDGE OF ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA PUBLIC HEARING

Courthouse Construction and Maintenance Fees Ordinance

PRESENTATIONS (Limited to 5 minutes). A-1

Senator Ben Chafin, Delegate Todd Pillion, & Matt Ogburn — Pumped Hydroelectric Storage Power
Shonda Mitchell — Oaks Subdivision Roads
Reggie Childers — Blueways & County Expenses
Kim Short - Clinch River Scenic River Designation Extension Resolution

BOARD APPOINTMENTS…

Russell County Page 1

Agenda Board of Supervisors August 7, 2017

Russell County Page 2

SPEARHEAD TRAILS Shy Kennedy 3 Year-Term

COMMUNITY POLICY MANAGEMENT TEAM Patrick Brunty 3 Year-Term Jodi Lester 3 Year-Term

CUMBERLAND PLATEAU ECONOMIC DEVELOPMENT COMMISSION
Frank Horton 1 Year-Term Ben Price 1 Year-Term Ron Blankenship 1 Year-Term James Eaton 1 Year-Term

SVCC ADVISORY BOARD Lynn Keene 4 Year-Term

NEW BUSINESS

Approval of Minutes. Consider approval of the minutes of the
following meeting of the Russell County Board of Supervisors………………C-1

a. Unapproved minutes of July 10, 2017 b. Unapproved minutes of July 26, 2017 at 10 a.m. c. Unapproved minutes of July 26, 2017 at 6 p.m.

Approval of Expenditures. Consider approval of expenditures presented

for payment………………………………………………………………………………C-2

CITIZEN’S COMMENT PERIOD (Limited to 3 minutes)

CONSTITUTIONAL OFFICER REPORTS AND REQUESTS

COUNTY ATTORNEY REPORTS AND REQUESTS

Resolution to the Issuance of Water Revenue Bonds by RC PSA and
Authorizing the Execution of Financing Agreements and Support
Agreements providing for RC Moral Obligation to make certain
appropriations with Respect to the Bonds…………………………………….……D-1
Authorization of Courthouse Construction & Maintenance Fee Ordinance….D-2

COUNTY ADMINISTRATOR REPORTS AND REQUESTS

REPORTS

RC Faith-Based Forum on Community Development & Support….……………E-1

Agenda Board of Supervisors August 7, 2017

SPEARHEAD TRAILS

Shy Kennedy 3 Year-Term COMMUNITY POLICY MANAGEMENT TEAM Patrick Brunty 3 Year-Term Jodi Lester 3 Year-Term

CUMBERLAND PLATEAU ECONOMIC DEVELOPMENT COMMISSION

Frank Horton 4 Year-Term Ben Price 4 Year-Term Ron Blankenship 4 Year-Term James Eaton 1 Year-Term SVCC ADVISORY BOARD

Lynn Keene 4 Year-Term

NEW BUSINESS

Approval of Minutes. Consider approval of the minutes of the following meeting of the Russell County Board of Supervisors…

a, Unapproved minutes of July 10, 2017 b. Unapproved minutes of July 26, 2017 at 10 a.m. c. Unapproved minutes of July 26, 2017 at 6 p.m.

Approval of Expenditures. Consider approval of expenditures presented for payment…

CITIZEN’S COMMENT PERIOD (Limited to 3 minutes) CONSTITUTIONAL OFFICER REPORTS AND REQUESTS COUNTY ATTORNEY REPORTS AND REQUESTS

Resolution to the Issuance of Water Revenue Bonds by RC PSA and Authorizing the Execution of Financing Agreements and Support

Agreements providing for RC Moral Obligation to make certain appropriations with Respect to the Bonds.

Authorization of Courthouse Construction & Maintenance Fee Ordinance…D-2 COUNTY ADMINISTRATOR REPORTS AND REQUESTS REPORTS
RC Faith-Based Forum on Community Development & Support.

Russell County Page 2

Agenda Board of Supervisors August 7, 2017

Russell County Page 3

Dante Sewer Treatment Plant………………………………………………………….E-2
RC Website and Mobile App……………………………………………………………E-3

REQUESTS

Authorization of Lebanon High School Roof Replacement Contract……………E-4
Authorization of Prepayment of September 2017 County Expenditures.………E-5
Authorization to Proceed with VDOT Commercial Entrance Permit for the

New Lebanon Solid Waste Site at Glade Hollow Park………………………………E-6

Authorization to Accept Deed from RC School Board concerning Parcel
of Land in Town of Lebanon……………………………………………………………E-7
Authorization of the Spearhead Trails Operation Contribution…………………E-8
Authorization of Lease Renewal Agreement with The Nature Conservancy
for the Artrip and Old Castlewood Sites…………………………………………….E-9
Authorization of the DCJS Victim Witness Grant………………………………….E-10
Authorization of Travel Request………………………………………………………E-11

MATTERS PRESENTED BY THE BOARD

ADJOURNMENT

COUNTY AGENCY / BOARD REPORTS:

 Treasurer’s Report ………………………………………………………………………G

 RC IDA …………………………………………………………………………………….H

 RC PSA …………………………………………………………………………………… I

 Castlewood W&S …………………………………………………………………………J

 RC Tourism……………………………………………………………………………….K

 RC Planning Commission ………………………………………………………………L

 Conference Center………………………………………………………………………M

 RC Fitness Center……………………………………………………………………….N

 RC Transportation & Safety……………………………………………………………O

 RC Cannery Reports……………………………………………………………………P

 RC Building Inspector Reports……………………………………………………….Q

 RC Animal Shelter Reports……………………………………………………………R

Agenda Board of Supervisors August 7, 2017

Dante Sewer Treatment Plant… E-2
RC Website and Mobile Ap;

REQUESTS

Authorization of Lebanon High School Roof Replacement Contract…
Authorization of Prepayment of September 2017 County Expenditures.
Authorization to Proceed with VDOT Commercial Entrance Permit for the New Lebanon Solid Waste Site at Glade Hollow Park…
Authorization to Accept Deed from RC School Board concerning Parcel of Land in Town of Lebanon.
Authorization of the Spearhead Trails Operation Contribution…
Authorization of Lease Renewal Agreement with The Nature Conservancy for the Artrip and Old Castlewood Sites…
Authorization of the DCJS Victim Witness Grant…
Authorization of Travel Request. MATTERS PRESENTED BY THE BOARD ADJOURNMENT COUNTY AGENCY / BOARD REPORTS:

Treasurer’s Report. RC IDA. RC PSA Castlewood W&S RC Tourism… RC Planning Commission . Conference Center. RC Fitness Cente! RC Transportation & Safety. RC Cannery Reports… RC Building Inspector Reports RC Animal Shelter Reports.

Russell County Page 3

Russell County Government Center

137 Highland Drive · Lebanon, Virginia 24266 · (276) 889-8000 · Fax (276) 889-8011 www.russellcountyva.us

Board of Supervisors
137 Highland Drive Presenters - Chairman Lebanon, VA 24266

Meeting: 8/7/17 6:00 PM

Public Hearing

Courthouse Construction and Maintenance Fees Ordinance

Staff Recommendation:

Board Discretion.

Suggested Motion:

Motion Required.

ATTACHMENTS:

 Courthouse Construction and Maintenance Fees Ordinance Guidelines

Board of Supervisors

137 Highland Drive Presenters - Chairman Lebanon, VA 24266

Meeting: 8/7/17_6:00 PM

Public Hearing

Courthouse Construction and Maintenance Fees Ordinance Staff Recommendation:

Board Discretion.

Suggested Motion:

Motion Required.

ATTACHMENTS:

Courthouse Construction and Maintenance Fees Ordinance Guidelines

Russell County Government Center 137 Highland Drive - Lebanon, Virginia 24266 - (276) 889-8000 - Fax (276) 889-8011 www.russellcountyva.us

VIRGINIA COURTHOUSE FACILITY GUIDELINES

The 2015 edition was made possible with the support of Grant No. SJI-13-T-204 from the State Justice Institute (SJI).

Prepared by: Don Hardenbergh Court works

Williamsburg, Virginia

For Office of the Executive Secretary Supreme Court of Virginia

Richmond, Virginia

VIRGINIA COURTHOUSE FACILITY GUIDELINES

The 2015 edition was made possible with the support of Grant No. SJI-13-T-204 from the State Justice Institute (SJI).

Prepared by: Don Hardenbergh For Office of the Executive Secretary Court works Supreme Court of Virginia Williamsburg, Virginia Richmond, Virginia

VIRGINIA COURTHOUSE FACILITY GUIDELINES
RESPONSIBILITY FOR PROVIDING FACILITIES AND PAGE 3-1 FINANCING COURTHOUSE CAPITAL PROJECTS

Office of the Executive Secretary Prepared by: Don Hardenberg, Court works Supreme Court of Virginia Rev: 2/15

CHAPTER 3 - RESPONSIBILITY FOR PROVIDING FACILITIES AND FINANCING COURTHOUSE CAPITAL PROJECTS

I. LOCAL GOVERNMENT RESPONSIBLE FOR PROVIDING COURTHOUSE

Localities in Virginia are required by Va. Code § 15.2-1638 to provide courthouses and suitable facilities for the judges and staff of district and circuit courts, including Circuit Court Clerks, and upon request space for the Commonwealth Attorney. The costs of doing so are to be paid by the locality and facilities are to be provided in government owned property and not leased. This has traditionally been a responsibility of local government in Virginia.

If the court facilities are deemed to be insufficient or inadequate, the Code of Virginia sets out a process that can be used to compel improvements to a court facility by local Circuit Courts (§ 15.2-1643). Dating at least to the early 1900s, this process has been used by Circuit Court judges to force jurisdictions to update and upgrade their court facilities. Over the past 15 years this process has been used in a number of communities, including Williamsburg/James City County, Rockbridge County, Dickenson County, and the City of Portsmouth.

If a county plans to construct a courthouse at a new location which is not adjacent to the existing courthouse, Va. Code §§ 15.2-1644 and 15.2-1646 requires citizen approval through a referendum.

II. FINANCING CAPITAL IMPROVEMENTS

There are two court fees that may be collected for the purpose of funding courthouse maintenance and construction. Under a statute first adopted in 1990, Va. Code§ 17.1-281, localities may assess up to a $2 fee on all civil, criminal, traffic and local ordinance cases for the purposes of construction, renovation, or maintenance of the courthouse or jail and court-related facilities and to defray increases in the cost of heating, cooling, electricity, and ordinary maintenance. The money raised by this fee, however, is generally insufficient to fund most courthouse construction projects and according to JLARC the money has generally been placed in the locality’s general fund to offset facility building maintenance (JLARC, Operational and Capital Funding for District and Circuit Courts, 2009).

Since 2009, localities may assess an additional $3 fee per case, specifically for courthouse construction as long as the Department of General Services (DGS) certifies the courthouse as noncompliant with the Virginia Courthouse Facility Guidelines. The circuit court clerk is responsible for collecting courthouse fees and transferring them to the local treasurer. This money is “solely for the construction, reconstruction, renovation of, or adaptive re-use of a structure for a courthouse.” Va. Code § 17.1-281 (D).

According to DGS, during the first five years of the act 29 jurisdictions requested such certification by DGS.

http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+15.2-1638 http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+15.2-1643 http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+15.2-1644 http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+15.2-1646 http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+17.1-281 http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+17.1-281 Tim Lovelace Highlight

Tim Lovelace Highlight

VIRGINIA COURTHOUSE FACILITY GUIDELINES RESPONSIBILITY FOR PROVIDING FACILITIES AND PAGE 3-1 FINANCING COURTHOUSE CAPITAL PROJECTS.

CHAPTER 3 - RESPONSIBILITY FOR PROVIDING FACILITIES AND FINANCIN COURTHOUSE CAPITAL PROJECTS

I. LOCAL GOVERNMENT RESPONSIBLE FOR PROVIDING COURTHOUSE

Localities in Virginia are required by Va, Code § 15.2-1638 to provide courthouses and suitable facilities for the judges and staff of district and circuit courts, including Cireuit Court Clerks, and upon request space for the Commonwealth Attorney. The costs of doing so are to be paid by the locality and facilities are to be provided in government owned property and not leased. This has traditionally been a responsibility of local government in Virginia.

Ifa county plans to construct a courthouse at a new location which is not adjacent to the

existing courthouse, Va. Code §§ 15.2-1644 and 15.2-1646 requires citizen approval through a referendum,

Il. FINANCING CAPITAL IMPROVEMENTS

There are two court fees that may be collected for the purpose of funding courthouse maintenance and construction. Under a statute first adopted in 1990, Va, Code§ 17.1-281, localities may assess up to a $2 fee on all civil, criminal, traffic and local ordinance cases for the purposes of construction, renovation, or maintenance of the courthouse or jail and court-related facilities and to defray increases in the cost of heating, cooling, electricity, and ordinary maintenance. The money raised by this fee, however, is generally insufficient to fund most courthouse construction projects and according to JLAR(

building maintenance (LARC, Operational and Capital Funding for District and Circuit Courts, 2009).

of, or adaptive re-use

ofa structure for a courthouse.” Va. Code § 17.1-281 (D).

According to DGS, during the first five years of the act 29 jurisdictions requested such certification by DGS.

Office of the Executive Secretary Prepared by: Don Hardenberg, Court works Supreme Court of Virginia Rev: 215

VIRGINIA COURTHOUSE FACILITY GUIDELINES
RESPONSIBILITY FOR PROVIDING FACILITIES AND PAGE 3-2 FINANCING COURTHOUSE CAPITAL PROJECTS

Office of the Executive Secretary Prepared by: Don Hardenberg, Court works Supreme Court of Virginia Rev: 2/15

Localities wishing to impose this $3 filing fee must submit a self-evaluation of their court facility to DGS, indicating how their facility is non-compliant with the Virginia Courthouse Facility Guidelines. A DGS building inspector then conducts an on-site inspection of the facility to confirm that it is out of compliance. DGS reviews the case and issues a certification of noncompliance, which then authorizes the locality to adopt an ordinance imposing the fee. The locality must reimburse DGS for the site visit and other related costs, which according to DGS have generally been in the range of $1,100 to $1,400 in localities that have been certified.

The most common financing arrangement is the general obligation bond. There are basically three options when it comes to financing a capital project such as a courthouse: 1) financing without debt, 2) financing with short-term debt, and 3) financing with long-term debt.

It is usually not possible to finance a capital improvement project out of operating funds. In Virginia, as noted earlier, local governments may charge a filing fee to cover improvements to the courthouse. The amount of funds that can be generated through this method however are generally not enough to fund anything but small renovation or improvement projects.
When the indebtedness is not large and the time needed to retire the debt is short, the use of short-term debt, such as grant anticipation notes, tax anticipation notes, and lines of credits, or bonds that can be retired in less than five years may be possible. Such funding mechanisms however may best be reserved for initiating a project when there is a need to get a project started quickly or for minor renovations. As noted earlier most courthouse projects are financed with long-term debt, such as general obligation bonds. There are however some alternatives that may be used. Long term financing can be broken down into public financing options and private financing options.

A. Public Financing

Early in the planning process it will usually be necessary to provide some funding for expenses and to hire an architect or courts planner to conduct a review of the current facilities and a needs assessment. This may be funded out of general revenues, as is usually the master plan if one is to be done. Once a decision has been made to go forward with the project it is necessary to secure more substantial funding to cover not only the design architect fees but the site acquisition and construction costs. With very few exceptions this will require some form of loan. Two of the most prevalent public funding options are general obligation bonds and revenue bonds. The choice of which method to use may depend on the length of the project, the political viability of public funding that normally requires a referendum, and the expected life of the building.

General Obligation Bonds (GOB)

General obligation bonds are the most commonly used means of financing long- term large public capital improvement projects. They are relatively inexpensive

Tim Lovelace Highlight

VIRGINIA COURTHOUSE FACILITY GUIDELINES RESPONSIBILITY FOR PROVIDING FACILITIES AND PAGE 3-2 FINANCING COURTHOUSE CAPITAL PROJECTS.

Itis usually not possible to finance a capital improvement project out of operating funds. In Virginia, as noted earlier, local governments may charge a filing fee to cover improvements to the courthouse, The amount of funds that can be generated through this method however are generally not enough to fund anything but small renovation or improvement projects. When the indebtedness is not large and the time needed to retire the debt is short, the use of short-term debt, such as grant anticipation notes, tax anticipation notes, and lines of credits, or bonds that can be retired in less than five years may be possible. Such funding mechanisms however may best be reserved for initiating a project when there is a need to get a project started quickly or for minor renovations.

As noted earlier most courthouse projects are financed with long-term debt, such as general obligation bonds. There are however some alternatives that may be used. Long term financing can be broken down into public financing options and private financing options.

A. Public Financing.

General Obligation Bonds (GOB)

General obligation bonds are the most commonly used means of financing long- term large public capital improvement projects. They are relatively inexpensive

Office of the Executive Secretary Prepared by: Don Hardenberg, Court works Supreme Court of Virginia Rev: 215

VIRGINIA COURTHOUSE FACILITY GUIDELINES
RESPONSIBILITY FOR PROVIDING FACILITIES AND PAGE 3-3 FINANCING COURTHOUSE CAPITAL PROJECTS

Office of the Executive Secretary Prepared by: Don Hardenberg, Court works Supreme Court of Virginia Rev: 2/15

and easy to sell, assuming a good bond rating. The use of GOBs, however, requires voter approval, which is sometimes difficult to receive. The public’s appetite for expensive public works projects is limited and courts have to compete with other needs such as schools and roads. If obtained, however, voter approval can insulate public officials from later criticisms. Besides anticipated voter rejection, other disadvantages include 1) tax and debt limitations; 2) need to proceed quickly 3) poor bond ratings, and 4) the desire to avoid restrictive laws in the construction of public buildings.

Revenue Bonds

Revenue bonds financing is available through a variety of public agencies such as a local industrial development authority. The advantage of revenue bonds is that they circumvent the lengthy and unpredictable political process required with GOBs and there may be some latitude in applying laws governing the construction of public buildings.

B. Private Financing

Private financing is becoming more popular as communities seek ways to leverage their tax revenues to greater advantage to finance long needed capital improvements. In general private financing works much like a home mortgage. A private entity provides the funds to construct the facility and the local government body then buys back the facility through a lease purchase agreement that may last 30 years. The loans are paid back through possible revenue that may be generated by the property or through general tax revenue.

Certificates of Participation (COPS)

One private financing method is the use of certificates of participation (COPs) which can be used as an alternative to GOBs. The COP is based on sale of interests in lease revenue from a capital project; for instance, the revenue from a parking garage that is constructed as part of the project or a bridge for which tolls are levied.

Private Educational Facilities Infrastructure Act

In Virginia, as well as a number of other states, the use of lease/purchase arrangements through a private builder/developer is becoming a more common method of financing public facilities.

In Virginia, the Public-Private Education and Infrastructure Act of 2002 (PPEA) was intended to bring private sector expertise to bear on public capital improvement projects, thus saving time and money. It allows private entities, to “acquire, design, construct, improve, renovate, expand, equip, maintain or operate

Tim Lovelace Highlight

VIRGINIA COURTHOUSE FACILITY GUIDELINES RESPONSIBILITY FOR PROVIDING FACILITIES AND PAGE 3-3 FINANCING COURTHOUSE CAPITAL PROJECTS.

and easy to sell, assuming a good bond rating. The use of GOBs, however, requires voter approval, which is sometimes difficult to receive. The public’s appetite for expensive public works projects is limited and courts have to compete with other needs such as schools and roads. If obtained, however, voter approval can insulate public officials from later criticisms, Besides anticipated voter rejection, other disadvantages include 1) tax and debt limitations; 2) need to proceed quickly 3) poor bond ratings, and 4) the desire to avoid restrictive laws in the construction of public buildings.

Revenue Bonds

Revenue bonds financing is available through a variety of public agencies such as. a local industrial development authority. The advantage of revenue bonds is that they circumvent the lengthy and unpredictable political process required with GOBs and there may be some latitude in applying laws governing the construction of public buildings.

B. Private Financing

Certificates of Participation (COPS)

Private Educational Facilities Infrastructure Act

In Virginia, as well as a number of other states, the use of lease/purchase arrangements through a private builder/developer is becoming a more common method of financing public facilities.

Office of the Executive Secretary Prepared by: Don Hardenberg, Court works Supreme Court of Virginia Rev: 215

VIRGINIA COURTHOUSE FACILITY GUIDELINES
RESPONSIBILITY FOR PROVIDING FACILITIES AND PAGE 3-4 FINANCING COURTHOUSE CAPITAL PROJECTS

Office of the Executive Secretary Prepared by: Don Hardenberg, Court works Supreme Court of Virginia Rev: 2/15

qualifying projects.” Its purpose is to encourage innovative approaches to financing construction and renovation of public facilities. Qualifying facilities must be devoted primarily to public use, typically involving public health, safety, and welfare. The Act grants responsible public entities the authority to create public-private partnerships if it is determined that private involvement may be able to deliver the project in a more timely or cost-effective fashion or lead to improvements in the public entities’ processes or delivery of services.

The private partner provides cost or completion guarantees for which it is given an equity investment in the project. The project requires a dedicated revenue stream with which to pay back the investors. Financing options might include the use of special purpose entities, sale and lease-back transactions, enhanced use leasing, property exchanges, development agreements, conduit financing and other methods allowed by law. Inherent in this type of financing arrangement is the need for the local governing body to identify the source of revenue that will support the lease payments for the term of the agreement.

This method eases many of the front-end political problems of GOBs and other methods requiring public approval. The retirement of the debt shows up in the operating budget in the form of rental or lease costs. It provides good cost controls because there is a single entity which is accountable and there is less likelihood of cost-related changes in the project, the project can be completed faster and there is less likelihood of delays, and it defers the need for public funds because the builder picks up a lot of the early costs. Other benefits include:

‒ A private enterprise can bring expertise and efficiencies to the project that

would not otherwise be available to a public construction project;
‒ The private enterprise, not the government entity, incurs the long term

debt. Therefore, voter approval is not required and the governmental entity’s debt load is not affected;

‒ The cost of the project can be distributed to the government over a longer period of time;

‒ The overall cost of the project may be less, based on the assumption that the project will be completed in a shorter time frame and construction costs are expected to increase over time;

‒ The loan does not affect the debt load of the governmental entity;
‒ The private enterprise carries the risks associated with the project,

including cost overruns and delays; and
‒ Ongoing maintenance of the facility can be a component of the agreement

with performance.

Some of the drawbacks of this method are that the project scope and cost may not be defined until late in the process giving the local governing body and court less control over design issues, the learning curve for public officials and the public

VIRGINIA COURTHOUSE FACILITY GUIDELINES RESPONSIBILITY FOR PROVIDING FACILITIES AND PAGE 3-4 FINANCING COURTHOUSE CAPITAL PROJECTS.

qualifying projects.” Its purpose is to encourage innovative approaches to financing construction and renovation of public facilities.

Qualifying facilities must be devoted primarily to public use, typically involving public health, safety, and welfare. The Act grants responsible public entities the authority to create public-private partnerships if it is determined that private involvement may be able to deliver the project in a more timely or cost-effective fashion or lead to improvements in the public entities’ processes or delivery of services.

— A private enterprise can bring expertise and efficiencies to the project that would not otherwise be available to a public construction project;

— The private enterprise, not the government entity, incurs the long term debt. Therefore, voter approval is not required and the governmental entity’s debt load is not affected;

— The cost of the project can be distributed to the government over a longer period of time;

— The overall cost of the project may be less, based on the assumption that the project will be completed in a shorter time frame and construction costs are expected to increase over time;

— The loan does not affect the debt load of the governmental entity;

— The private enterprise carries the risks associated with the project, including cost overruns and delays; and

— Ongoing maintenance of the facility can be a component of the agreement with performance.

Office of the Executive Secretary Prepared by: Don Hardenberg, Court works Supreme Court of Virginia Rev: 215

VIRGINIA COURTHOUSE FACILITY GUIDELINES
RESPONSIBILITY FOR PROVIDING FACILITIES AND PAGE 3-5 FINANCING COURTHOUSE CAPITAL PROJECTS

Office of the Executive Secretary Prepared by: Don Hardenberg, Court works Supreme Court of Virginia Rev: 2/15

means they may be apprehensive of the process, questions of whether the best possible price was obtained, and the lengthy and complicated negotiations. Also, the public entity may lose some control over the design process because cost control becomes a critical factor in order to maintain the viability of the project. Other disadvantages are:

‒ A P3 project bypasses public approval and subjects the project, the

funding body, and the governing entity to resistance from the voters/general public.

‒ Experience to date with P3 projects demonstrates that these projects receive a limited number of bidders; typically one to three entities submit bids. This reduced competition could be detrimental; in contrast, competition among a larger number of bidders generally reduces the overall cost and increases the quality of a project.

‒ The overall payment for the P3 financing may be higher than a traditional financing method, given that a private entity pays higher interest rates than government entities to borrow money. A P3 project also includes a profit margin for the private entity.

‒ The financing for a P3 project typically extends out over a longer period of time than in a traditional building model, with the court leasing the facility over a period of up to thirty years.

To date, PPEA has been adopted in Virginia and several other states including Florida, Texas, Utah, Maryland, Arizona, California, and Michigan.

VIRGINIA COURTHOUSE FACILITY GUIDELINES RESPONSIBILITY FOR PROVIDING FACILITIES AND PAGE 3-5 FINANCING COURTHOUSE CAPITAL PROJECTS.

— A P3 project bypasses public approval and subjects the project, the funding body, and the governing entity to resistance from the voters/general public.

— Experience to date with P3 projects demonstrates that these projects receive a limited number of bidders; typically one to three entities submit bids. This reduced competition could be detrimental; in contrast, competition among a larger number of bidders generally reduces the overall cost and increases the quality of a project.

— The overall payment for the P3 financing may be higher than a traditional financing method, given that a private entity pays higher interest rates than government entities to borrow money. A P3 project also includes a profit margin for the private entity.

— The financing for a P3 project typically extends out over a longer period of time than in a traditional building model, with the court leasing the facility over a period of up to thirty years.

To date, PPEA has been adopted in Virginia and several other states including Florida, Texas, Utah, Maryland, Arizona, California, and Michigan.

Office of the Executive Secretary Prepared by: Don Hardenberg, Court works Supreme Court of Virginia Rev: 215

Russell County Government Center

137 Highland Drive · Lebanon, Virginia 24266 · (276) 889-8000 · Fax (276) 889-8011 www.russellcountyva.us

Board of Supervisors Information Item: A-1

137 Highland Drive Presenters - Various Lebanon, VA 24266

Meeting: 8/7/17 6:00 PM

Presentations

Senator Ben Chafin, Delegate Todd Pillion, & Matt Ogburn – Pumped

Hydroelectric Storage Power

Shonda Mitchell – Oaks Subdivision Roads
Reggie Childers – Blueways & County Expenses
Kim Short – Clinch River Scenic River Designation Extension Resolution

Staff Recommendation:

Presentation – Informational Only.

Suggested Motion:

No Motion Required.

ATTACHMENTS:

 Presentations

Board of Supervisors Information Item: A-1 137 Highland Drive Presenters - Various Lebanon, VA 24266

8/7/17__ 6:00 PM

Meet

Presentations

Senator Ben Chafin, Delegate Todd Pillion, & Matt Ogburn — Pumped Hydroelectric Storage Power
Shonda Mitchell - Oaks Subdivision Roads
Reggie Childers — Blueways & County Expenses
Kim Short - Clinch River Scenic River Designation Extension Resolution

Staff Recommendation: Presentation — Informational Only.

Suggested Motion:

No Motion Required

ATTACHMENTS:

Presentations

Russell County Government Center 137 Highland Drive - Lebanon, Virginia 24266 - (276) 889-8000 - Fax (276) 889-8011 www.russellcountyva.us

Pumped Hydroelectric Storage Power in Southwest Virginia Fact Sheet

Purpose During the 2017 session, the Virginia General Assembly recognized the value of pumped hydroelectric storage projects by passing Senate Bill 1418, sponsored by Sen. Ben Chafin, R-Lebanon, and House Bill 1760, sponsored by Del. Terry Kilgore, R-Gate City, and Del. Todd Pillion, R-Abingdon. The bills authorize electric utilities to apply to the Virginia State Corporation Commission for permission to construct pumped hydroelectric storage facilities in Virginia’s coalfield region. At least part of the energy stored in such facilities must be generated by renewable resources. The legislation was approved by Gov. Terry McAuliffe and became law on July 1, 2017.

The coalfield region is made up of the counties of Russell, Tazewell, Dickenson, Buchanan, Lee, Wise, and Scott, as well as the City of Norton.

Next Steps After conducting a preliminary review of potential sites for a pumped hydroelectric storage facility in the coalfield region, Dominion Energy Virginia has narrowed down the site candidates. Dominion Energy Virginia is currently preparing Preliminary Permit Applications (PPAs) for the remaining sites, and intends to file the PPAs with the Federal Energy Regulatory Commission (FERC) in the next few months. At that point, Dominion Energy Virginia will begin pre-feasibility work to further reduce the numbers of potential sites. Once the pre-feasibility work is complete, and if it is determined that construction of a facility is practical, then a pre-application will be filed with FERC to further review the site. The pre-application does not commit Dominion Energy Virginia to constructing a pumped hydroelectric storage facility in the region.

How Does It Work? Pumped hydroelectric storage facilities act as large batteries that store energy. When excess energy is available, power is used to pump water from a lower elevation reservoir up to a higher elevation reservoir providing grid stability. The water is stored in the upper reservoir until a later period when energy is in demand. At that point the water is allowed to flow downhill to a power generation facility where it spins turbines. The turbines turn generators that produce electric power that is then delivered to the electric grid. Pumped hydroelectric storage is the only form of very large-scale energy storage commercially available at present.

Pumped Hydroelectric Storage Facility

Pump/ Generator

Upper Reservoir

Lower Reservoir

Pumped Hydroelectric Storage Power

in Southwest Virginia

Fact Sheet

Purpose

During the 2017 session, the Virginia General Assembly recognized the value of pumped hydroelectric storage projects by passing

Senate Bill 1418, sponsored by Sen. Ben Chafin, R-Lebanon, and House Bill 1760, sponsored by Del. Terry Kilgore, R-Gate City, and Del. Todd Pillion, R-Abingdon. The bills authorize electric utilities to apply to the Virginia State Corporation Commission for permission to construct pumped hydroelectric storage facilities in Virginia’s coalfield region. At least part of the energy stored in such facilities must be generated by renewable resources. The legislation was approved by Gov. Terry McAuliffe and became law on July 1, 2017.

The coalfield region is made up of the counties of Russell, Tazewell, Dickenson, Buchanan, Lee, Wise, and Scott, as well as the City of Norton.

How Does It Work?

Pumped hydroelectric storage facilities act as large batteries that store energy. When excess energy is. available, power is used to pump water from a lower elevation reservoir up to a higher elevation reservoir providing grid stability. The water is stored in the upper reservoir until a later period when energy is in demand. At that point the water is allowed to flow downhill to a power generation facility where it spins turbines. The turbines turn generators that produce electric power that is then delivered to the electric grid. Pumped hydroelectric storage is the only form of very large-scale energy storage commercially available at present.

Pumped Hydroelectric Storage Facility

Reservoir

Pump)

Next Steps

After conducting a preliminary review of potential sites for a pumped hydroelectric storage facility in the coalfield region, Dominion Energy Virginia has narrowed down the site candidates. Dominion Energy Virginia is currently preparing Preliminary Permit Applications (PAs) for the remaining sites, and intends to file the PPAs with the Federal Energy Regulatory Commission (FERC) in the next few months. At that point, Dominion Energy Virginia will begin pre-feasibility work to further reduce the numbers of potential sites. Once the pre-feasibility worl complete, and if it is determined that construction of a facility is practical, then a pre-application will be filed with FERC to further review the site. The pre-application does not commit Dominion Energy Virginia to constructing a

pumped hydroelectric storage facility in the region.

Contact Information = Dominion Email: [email protected] 7 Energy Phone: Donnie Ratliff - 276-393-4944 + Jason De La Cruz - 571-344-3952

Russell County Virginia “The Heart of Southwest Virginia”

Tim Lovelace Rebecca Dye District 1 District 6

Lou Ann Wallace Steve Breeding, Chairman Mark Mitchell District 2 District 5 At-Large

Carl Rhea David Eaton, Vice-Chairman Lonzo Lester District 3 District 4 County Administrator

Russell County Government Center 137 Highland Drive · Lebanon, Virginia 24266 · (276) 889-8000 · Fax (276) 889-8011

www.russellcountyva.us

Resolution for the Extension of the Clinch River

Scenic River Designation in Russell County

Virginia

Whereas, Currently, three Clinch River segments in Russell County are designated

as Virginia Scenic Rivers. Specifically –

In 1992, the Clinch River in Russell County from Hubbard Hole to the

Route 645 bridge at Nash Ford, a distance of approximately 13.2 miles. [§

10.1-410.2]

In 1994, the Clinch River designation was extended by 6.4 miles from the

confluence with the Little River to Nash Ford for a total of 20 miles. [§

10.1-410.2]

In 2002, the Clinch River was added to the Guest River with 9.2 miles of

Clinch River designation. [§ 10.1-411.1]

Whereas, At the request of Russell County Board of Supervisors, the Department of

Conservation and Recreation (DCR) staff conducted a study of two specific Clinch

River segments within county boundaries;

Whereas, Field evaluations was performed on April 11, 12, and 13, 2017. DCR staff,

along with support from local tourism representatives, Virginia State Parks staff, a

potential outfitter, and interested citizens paddled the study corridors;

Whereas, Based on the evaluations, it was determined that the new Clinch River extension

from the downstream end of the designated section at Nash Ford to the Saint Paul

designated section, a distance of approximately 24.5 miles, qualifies for Virginia Scenic

River designation;

Whereas, The section from Nash Ford to St. Paul flows through rural and forested

landscapes and small towns. It runs through forested and open private lands and past a

few industrial sites. The tightly twisting and turning channel provides access to very long

mountain views that appear around nearly every bend;

Whereas, If added to the currently designated Russell County sections of 29 .2 miles, the

total designated length of the Clinch Scenic River in Russell County will be approximately

53.7 miles, and;

Russell County Virginia “The Heart of Southwest Virginia”

Tim Lovelace Rebecca Dye District 1 District 6

Lou Ann Wallace Steve Breeding, Chairman Mark Mitchell

District 2 District 5 AvLarge

Cari Rhea David Eaton, Vice-Chairman Lonzo Lester

District 3 District 4 County Administrator

Resolution for the Extension of the Clinch River Scenic River Design: in Russell County Virginia

Whereas, Currently, three Clinch River segments in Russell County are designated as Virginia Scenic Rivers. Specifically —

In 1992, the Clinch River in Russell County from Hubbard Hole to the Route 645 bridge at Nash Ford, a distance of approximately 13.2 miles. [§ 10.1-410.2]

In 1994, the Clinch River designation was extended by 6.4 miles from the confluence with the Little River to Nash Ford for a total of 20 miles. [§ 10.1-410.2]

In 2002, the Clinch River was added to the Guest River with 9.2 miles of Clinch River designation. [§ 10.1-411.1]

Whereas, At the request of Russell County Board of Supervisors, the Department of Conservation and Recreation (DCR) staff conducted a study of two specific Clinch River segments within county boundaries;

Whereas, Field evaluations was performed on April 11, 12,and 13,2017. DCR staff, along with support from local tourism representatives, Virginia State Parks staff, a potential outfitter, and interested citizens paddled the study corridors;

Whereas, Based on the evaluations, it was determined that the new Clinch River extension from the downstream end of the designated section at Nash Ford to the Saint Paul designated section, a distance of approximately 24.5 miles, qualifies for Scenic River designation;

Whereas, The section from Nash Ford to St. Paul flows through rural and forested landscapes and small towns. It runs through forested and open private lands and past a few industrial sites. The tightly twisting and turning channel provides access to very long mountain views that appear around nearly every bend;

Whereas, f added to the currently designated Russell County sections of 29 .2 miles, the total designated length of the Clinch Scenic River in Russell County will be approximately 53.7 miles, and;

Russell County Government Center 137 Highland Drive - Lebanon, Virginia 24266 - (276) 889-8000 - Fax (276) 889-8011 www.russellcountyva.us

Russell County Government Center 137 Highland Drive · Lebanon, Virginia 24266 · (276) 889-8000 · Fax (276) 889-8011

www.russellcountyva.us

Now, Therefore Be It Resolved, that the Russell County Board of Supervisors unanimously

request that Virginia Senator Ben Chafin, Virginia Delegate Terry Kilgore, Virginia

Delegate Todd Pillion, and Virginia Delegate Will Morefield make every effort to seek a

proposed change to the Code of Virginia §10.1-410.2 Clinch State Scenic River to “The

Clinch River in Russell County from its confluence with the Little River to the Route 58

bridge, a distance of approximately 53.7 miles, is hereby designated a component of the

Virginia Scenic Rivers System.”

RESOLVED this 7th day of August, 2017, by the following vote:

Recorded Vote: A COPY TEST:

Moved by: ______________ ___

Seconded by: __________________

Yeas: ________
________________________________ Nays: ________ Lonzo Lester, County Administrator

Now, Therefore Be It Resolved, that the Russell County Board of Supervisors unanimously request that Virginia Senator Ben Chafin, Virginia Delegate Terry Kilgore, Virginia Delegate Todd Pillion, and Virginia Delegate Will Morefield make every effort to seek a proposed change to the Code of Virginia §10.1-410.2 Clinch State Scenic River to “The

ch River in Russell County from its confluence with the Little River to the Route 58 bridge, a distance of approximately 53.7 miles, is hereby designated a component of the Virginia Scenic Rivers System.”

RESOLVED this 7 day of August, 2017, by the following vote: Recorded Vote: A COPY TEST: Moved by:

Seconded by:

Yeas:

Nays: Tonzo Lester, County Admi

Russell County Government Center 137 Highland Drive - Lebanon, Virginia 24266 - (276) 889-8000 : Fax (276) 889-8011 www.russellcountyva.us

Board of Supervisors Action Item B-1

137 Highland Drive Presenter: Chairman Lebanon, VA 24266

Meeting: 7/10/17 3:00 PM

Russell County Government Center

137 Highland Drive · Lebanon, Virginia 24266 · (276) 889-8000 · Fax (276) 889-8011 www.russellcountyva.us

Board Appointments

Appointments of the RC Board Appointments:

SPEARHEAD TRAILS Shy Kennedy 3 Year-Term

COMMUNITY POLICY MANAGEMENT TEAM

Patrick Brunty 3 Year-Term

Jodi Lester 3 Year-Term

CUMBERLAND PLATEAU ECONOMIC DEVELOPMENT COMMISSION

Frank Horton 1 Year-Term

Ben Price 1 Year-Term

Ron Blankenship 1 Year-Term

James Eaton 1 Year-Term

SVCC ADVISORY BOARD

Lynn Keene 4 Year-Term

STAFF RECOMMENDATION(s):

Board Discretion.

SUGGESTED MOTION(s):

Motion to appoint Board Members.

ATTACHMENTS:

 Applications

Board of Supervisors Action Item B-1 187 Highland Drive Presenter: Chairman Lebanon, VA 24266

Meeting: 7/10/17 3:00 PM

Board Appointments

Appointments of the RC Board Appointments:

SPEARHEAD TRAILS

Shy Kennedy 3 Year-Term COMMUNITY POLICY MANAGEMENT TEAM Patrick Brunty 3 Year-Term Jodi Lester 3 Year-Term

CUMBERLAND PLATEAU ECONOMIC DEVELOPMENT COMMISSION

Frank Horton 1 Year-Term Ben Price 1 Year-Term Ron Blankenship 1 Year-Term James Eaton 1 Year-Term

SVCC ADVISORY BOARD Lynn Keene 4Year-Term

STAFF RECOMMENDATION(S): Board Discretion.

SUGGESTED MOTION(s): Motion to appoint Board Members.

ATTACHMENTS:

Applications

Russell County Government Center 137 Highland Drive - Lebanon, Virginia 24266 - (276) 889-8000 - Fax (276) 889-8011 www.russellcountyva.us

Russell County Community Policy & Management Team P.O. Box 1207 Lebanon, VA 24266

July 19, 2017

Russell County Board of Supervisors Attention: Lonzo Lester, County Administrator P.O. Box 1208

Lebanon, VA 24266

RE: CPMT Appointment Dear Lonzo: The Russell County Community Policy & Management Team would like to recommend Joni Lester as a Private Provider representative to serve on CPMT. This recommendation was voted on and approved

unanimously during the July 18 CPMT Meeting. Ms. Lester is the Regional Coordinator M.Ed, Resident in Counseling for Family Preservation Services. She can be contacted at the FPS Cedar Bluff Office, 220

Clay Drive, Pounding Mill, VA 24637, 276-963-3606, [email protected].

‘Thank you for your consideration of this matter and | look forward to hearing from you.

‘With Warmest Regards,

Lanny Large, Chairperson Russell County CPMT

“Implementing the Children’s Services Act of Virginio”

Southwest Virginia Community College

Office of the President

P. O. Box SVCC •Richlands•Virginia 24641-1101

Telephone: 276.964.7388•Fax: 276.964.7615•V/TDD: 276.964.7235

www.sw.edu

Mr. Lonzo Lester County Administrator, Russell County POB 1208 Lebanon VA 24266

Dear Mr. Lester:

This letter is to notify you that the SWCC Local College Advisory Board terms of Lynn Keene and Rita Jo Banner expired on June 30, 2017.

Mrs. Banner has served two terms and will not be eligible for reappointment for a third

term at this time. However, she can be reappointed in the future should the Russell County Board of Supervisors wish to do so.

As for Mr. Keene, he is completing his first term on the SWCC Local College Advisory

Board and is eligible for one more term if the Board of Supervisors wishes to reappoint him.

The Board of Supervisors has always appointed individuals who are interested in the

college and the community, and both Mr. Keene and Mrs. Banner have been supportive Board members. While the appointment decision rests solely with the Board of Supervisors, please remember that the SWCC Local College Advisory Board members receive no compensation for their service, and a sincere desire to serve is important in the selection process.

Thank you for your consideration.

 Sincerely, 



 Dr. J. Mark Estepp 
 President

rlmv

aul SWC

Southwest Virginia Community College Office of the President

Mr. Lonzo Lester

County Administrator, Russell County POB 1208

Lebanon VA 24266

Dear Mr. Lester:

This letter is to notify you that the SWC Local College Advisory Board terms of Lynn Keene and Rita Jo Banner expired on June 30, 2017.

Mrs. Banner has served two terms and will not be eligible for reappointment for a third term at this time. However, she can be reappointed in the future should the Russell County Board of Supervisors wish to do so.

As for Mr. Keene, he is completing his first term on the SWCC Local College Advisory Board and is eligible for one more term if the Board of Supervisors wishes to reappoint him.

The Board of Supervisors has always appointed individuals who are interested in the college and the community, and both Mr. Keene and Mrs. Banner have been supportive Board members. While the appointment decision rests solely with the Board of Supervisors, please remember that the SWCC Local College Advisory Board members receive no compensation for their service, and a sincere desire to serve is important in the selection process.

Thank you for your consideration

Sincerely,

Dr. J. Mark Estepp President

rimy

P.O. Box Telephone: 276.964.7:

+Richland: Fax: 276,964.71 www.sw.edu

inginia 24641-1101

Board of Supervisors Action Item C-1

137 Highland Drive Presenter: Chairman Lebanon, VA 24266

Meeting: 8/7/17 6:00 PM

Russell County Government Center

137 Highland Drive · Lebanon, Virginia 24266 · (276) 889-8000 · Fax (276) 889-8011 www.russellcountyva.us

Authorization of Minutes

Request approval of the minutes from the following meeting:

 Unapproved minutes of July 10, 2017

 Unapproved minutes of July 26, 2017 at 10 a.m.

 Unapproved minutes of July 26, 2017 at 6 p.m.

STAFF RECOMMENDATION(s):

Board discretion

SUGGESTED MOTION(s):

Motion to approve Board Minutes.

ATTACHMENTS:

 Board Minutes

Board of Supervisors ‘Action Item C-1 137 Highland Drive Presenter: Chairman Lebanon, VA 24266

Meeting: 8/7/17 6:00 PM

Authorization of Minutes

Request approval of the minutes from the following meeting:

Unapproved minutes of July 10, 2017
Unapproved minutes of July 26, 2017 at 10 a.m.
Unapproved minutes of July 26, 2017 at 6 p.m.

STAFF RECOMMENDATION(s):

Board discretion

SUGGESTED MOTION(: Motion to approve Board Minutes.

ATTACHMENTS:

Board Minutes

Russell County Government Center 137 Highland Drive - Lebanon, Virginia 24266 - (276) 889-8000 - Fax (276) 889-8011 www.russellcountyva.us

July 10, 2017

A regular monthly meeting of the Russell County Board of Supervisors was held on Monday, July 10,

2017 at 3:00 pm at the Russell County Government Center in Lebanon, Virginia.

The Clerk called the meeting to order.

Roll Call by the Clerk:

Present:

Tim Lovelace Lou Wallace Carl Rhea David Eaton Steve Breeding Rebecca Dye

Lonzo Lester

Absent: Mark Mitchell

Invocation by Timothy Hankins, Pastor, Lebanon Memorial United Methodist Church followed by the Pledge of Allegiance to the Flag.

APPROVAL OF THE AGENDA

Motion made by Tim Lovelace, second Lou Wallace and duly approved by the Board of Supervisors to approve the agenda as amended.

The vote was: Aye: Tim Lovelace, Lou Wallace, Carl Rhea, David Eaton, Steve Breeding and Rebecca Dye Nay: None

Presentations

Brian Becker, Center for Natural Capital explained the “wood energy” concept and encouraged the use of wood fuels by the County.

Angela Carpenter, Director of the Russell County Chamber of Commerce updated the Board on future events and upgrades in software for the Chamber.

Board Appointments

Spearhead Trails

Lou Wallace nominated Teddy Clevinger David Eaton nominated Kim Short

July 10, 2017

Arregular monthly meeting of the Russell County Board of Supervisors was held on Monday, July 10, 2017 at 3:00 pm at the Russell County Government Center in Lebanon, Virginia.

The Clerk called the meeting to order. Roll Call by the Clerk: Present:

Tim Lovelace Lou Wallace Carl Rhea David Eaton Steve Breeding Rebecca Dye

Lonzo Lester

Absent: Mark Mitchell

Invocation by Timothy Hankins, Pastor, Lebanon Memorial United Methodist Church followed by the Pledge of Allegiance to the Flag.

‘APPROVAL OF THE AGENDA

Motion made by Tim Lovelace, second Lou Wallace and duly approved by the Board of Supervisors to approve the agenda as amended.

The vote was: Aye: Tim Lovelace, Lou Wallace, Carl Rhea, David Eaton, Steve Breeding and Rebecca Dye Nay: None

Presentations

Brian Becker, Center for Natural Capital explained the “wood energy” concept and encouraged the use of wood fuels by the County.

Angela Carpenter, Director of the Russell County Chamber of Commerce updated the Board on future events and upgrades in software for the Chamber.

Board Appointments Spearhead Trails

Lou Wallace nominated Teddy Clevinger David Eaton nominated Kim Short

Kim Short, (3) three votes: David Eaton, Steve Breeding and Carl Rhea Teddy Clevinger (3) three votes: Tim Lovelace, Rebecca Dye and Lou Wallace

Tie vote, Spearhead Trails appointment tabled until August, 2017.

JASON GULLET APPOINTED TO THE DANTE COMMUNITY CENTER BOARD

Motion made by Lou Wallace, second Tim Lovelace and duly approved by the Board of Supervisors to appoint Jason Gullet to the Dante Community Center Board for a (2) two year term, said term ending
June 30, 2019.

The vote was: Aye: Lou Wallace, Tim Lovelace, Steve Breeding, David Eaton, Rebecca Dye and Carl Rhea Nay: None

EARL JENKINS APPOINTED TO THE DANTE COMMUNITY CENTER BOARD

Motion made by Lou Wallace, second Carl Rhea and duly approved by the Board of Supervisors to appoint Earl Jenkins to the Dante Community Center Board for a (2) two year term, said term ending June 19, 2019.

The vote was: Aye: Lou Wallace, Carl Rhea, David Eaton, Steve Breeding, Tim Lovelace and Rebecca Dye Nay: None

DARRELL JOHNSON APPOINTED TO THE CASTLEWOOD WATER AND SEWAGE AUTHORITY

Lou Wallace nominated Darrell Johnson Tim Lovelace moved that nominations cease and Darrell Johnson be appointed to the Castlewood Water and Sewage Authority for a (3) three year term, said term ending July 10, 2020.

The vote was: Aye: Lou Wallace, Tim Lovelace, Carl Rhea and Rebecca Dye Nay: Steve Breeding and David Eaton

JUDY ASHBROOK APPOINTED TO THE LIBRARY BOARD

Carl Rhea nominated Judy Ashbrook Hearing no other nominations Judy Ashbrook was appointed by acclamation to the Library Board for a (4) four year term, said term ending July 10, 2021.

LINDA TILLER APPOINTED TO THE LIBRARY BOARD

David Eaton nominated Linda Tiller Hearing no other nominations, Linda Tiller was appointed by acclamation to the Library Board for a (4) four year term, said term ending July 10, 2021.

kim Short, (3) three votes: David Eaton, Steve Breeding and Carl Rhea Teddy Clevinger (3) three votes: Tim Lovelace, Rebecca Dye and Lou Wallace

Tie vote, Spearhead Trails appointment tabled until August, 2017.

JASON GULLET APPOINTED TO THE DANTE COMMUNITY CENTER BOARD Motion made by Lou Wallace, second Tim Lovelace and duly approved by the Board of Supervisors to appoint Jason Gullet to the Dante Community Center Board for a (2) two year term, said term ending June 30, 2019. The vote was: Aye: Lou Wallace, Tim Lovelace, Steve Breeding, David Eaton, Rebecca Dye and Carl Rhea

Nay: None

EARL JENKINS APPOINTED TO THE DANTE COMMUNITY CENTER BOARD

The vote was: Aye: Lou Wallace, Carl Rhea, David Eaton, Steve Breeding, Tim Lovelace and Rebecca Dye Nay: None

DARRELL JOHNSON APPOINTED TO THE CASTLEWOOD WATER AND SEWAGE AUTHORITY

Lou Wallace nominated Darrell Johnson

Tim Lovelace moved that nominations cease and Darrell Johnson be appointed to the Castlewood Water and Sewage Authority for a (3) three year term, said term ending July 10, 2020.

The vote was:

‘Aye: Lou Wallace, Tim Lovelace, Carl Rhea and Rebecca Dye

Nay: Steve Breeding and David Eaton,

JUDY ASHBROOK APPOINTED TO THE LIBRARY BOARD

Carl Rhea nominated Judy Ashbrook Hearing no other nominations Judy Ashbrook was appointed by acclamation to the Library Board for a (4) four year term, said term ending July 10, 2021.

LINDA TILLER APPOINTED TO THE LIBRARY BOARD

David Eaton nominated Linda Tiller Hearing no other nominations, Linda Tiller was appointed by acclamation to the Library Board for a (4) four year term, said term ending July 10, 2021.

GARY DOTSON, JOHNNY JESSEE, STEVE DYE, EUGENE FERGUSON, TONY MAXFIELD, BARBARA COX, MIKE O’QUINN, HENRY STINSON, JR., MARK MITCHELL AND EMORY ALTIZER APPOINTED TO THE

HIGHWAY AND SAFETY COMMITTEE

Motion made by David Eaton, second Tim Lovelace and duly approved by the Board of Supervisors to re- appoint (10) ten members to the Russell County Highway and Safety Committee for (2) two year terms, said terms ending July 10, 2019. Those reappointed were: Gary Dotson, Johnny Jessee, Steve Dye, Eugene Ferguson, Tony Maxfield, Barbara Cox, Mike O’Quinn, Henry Stinson, Jr., Mark Mitchell and Emory Altizer.

The vote was: Aye: David Eaton, Tim Lovelace, Carl Rhea, Steve Breeding, Lou Wallace and Rebecca Dye Nay: None

DARRELL PUCKETT AND CHRIS DYE APPOINTED TO THE RUSSELL COUNTY PSA

David Eaton nominated Carter McGlothlin and Steve Newberry Lou Wallace nominated Darrell Puckett Rebecca Dye nominated Chris Dye

Darrell Puckett - (3) three votes: Tim Lovelace, Rebecca Dye and Lou Wallace Chris Dye – (3) three votes: Tim Lovelace, Rebecca Dye and Lou Wallace Steve Newberry – (2) two votes: David Eaton and Steve Breeding Carter McGlothlin – (2) two votes: Steve Breeding and David Eaton

Carl Rhea abstained from each vote.

Chris Dye and Darrell Puckett were appointed to the Russell County PSA for (3) three year terms, said terms ending July 10, 2020.

The Chairman tabled the SVCC Advisory Board appointment.

New Business

APPROVAL OF THE JUNE 05, 2017 MINUTES

Motion made by Tim Lovelace, second Lou Wallace and duly approved by the Board of Supervisors to

approve the June 05, 2017 minutes and dispense with the reading thereof.

The vote was: Aye: Tim Lovelace, Lou Wallace, Carl Rhea, Steve Breeding, David Eaton and Rebecca Dye Nay: None

APPROVAL OF THE JUNE 19, 2017 MINUTES

Motion made by Tim Lovelace, second Lou Wallace and duly approved by the Board of Supervisors to

approve the June 19, 2017 minutes and dispense with the reading thereof.

The vote was:

GARY DOTSON, JOHNNY JESSEE, STEVE DYE, EUGENE FERGUSON, TONY MAXFIELD, BARBARA COX, MIKE O’QUINN, HENRY STINSON, JR., MARK MITCHELL AND EMORY ALTIZER APPOINTED TO THE HIGHWAY AND SAFETY COMMITTEE

The vote was: Aye: David Eaton, Tim Lovelace, Carl Rhea, Steve Breeding, Lou Wallace and Rebecca Dye Nay: None

DARRELL PUCKETT AND CHRIS DYE APPOINTED TO THE RUSSELL COUNTY PSA

David Eaton nominated Carter McGlothlin and Steve Newberry Lou Wallace nominated Darrell Puckett Rebecca Dye nominated Chris Dye

Darrell Puckett - (3) three votes: Tim Lovelace, Rebecca Dye and Lou Wallace Chris Dye ~ (3) three votes: Tim Lovelace, Rebecca Dye and Lou Wallace Steve Newberry — (2) two votes: David Eaton and Steve Breeding

Carter McGlothlin (2) two votes: Steve Breeding and David Eaton

Carl Rhea abstained from each vote.

Chris Dye and Darrell Puckett were appointed to the Russell County PSA for (3) three year terms, said terms ending July 10, 2020.

The Chairman tabled the SVCC Advisory Board appointment. New Business

APPROVAL OF THE JUNE 05, 2017 MINUTES

Motion made by Tim Lovelace, second Lou Wallace and duly approved by the Board of Supervisors to approve the June 05, 2017 minutes and dispense with the reading thereof.

The vote was: ‘Aye: Tim Lovelace, Lou Wallace, Carl Rhea, Steve Breeding, David Eaton and Rebecca Dye Nay: None

APPROVAL OF THE JUNE 19, 2017 MINUTES

Motion made by Tim Lovelace, second Lou Wallace and duly approved by the Board of Supervisors to approve the June 19, 2017 minutes and dispense with the reading thereof.

The vote was:

Aye: Tim Lovelace, Lou Wallace, Carl Rhea, Steve Breeding, David Eaton and Rebecca Dye Nay: None

APPROVAL OF GENERAL COUNTY INVOICES

Motion made by David Eaton, second Carl Rhea and duly approved by the Board of Supervisors to approve general county invoices in the amount of $1,655,087.42 including reoccurring and withholdings.

The vote was: Aye: David Eaton, Carl Rhea, Tim Lovelace, Rebecca Dye, Steve Breeding and Lou Wallace Nay: None

Citizens Comment

Geneva Yates, Yates Circle Estates commented that she is very concerned about the exit road of the estates. She asked the Board for any assistance in this matter.

Reggie Childers, Lebanon reminded the Board that four towns had already designated blue ways, would like the Board to consider doing the same. He also commented that eliminating the Supervisor at Large seat would save approximately $14,000.

Dustin Keith, Elk Garden invited the Board to attend the Farm to Table event to be held in Lebanon in August. He also thanked them for all their support of the Drug Free Graduation Party that was held in the conference center on graduation night. He added that if any of the Board was interested in attending the Suicide Prevention Conference in Abingdon to please let him know.

The Chairman closed citizens comment period.

County Attorney Reports and Requests

Matt Crum discussed the issuance of water revenue bonds by the Russell County PSA.

MOTION TO APPROVE A RESOLUTION OF SUPPORT FOR THE ISSUANCE OF WATER REVENUE BONDS

Motion made by David Eaton, second Lou Wallace to approve a Resolution of Support for the Issuance of Water Revenue Bonds by the Russell County PSA.

The vote was: Aye: David Eaton, Steve Breeding and Carl Rhea Nay: Rebecca Dye, Tim Lovelace and Lou Wallace

MOTION FAILED.

County Administrator Reports and Requests

APPROVAL OF THE ABSTRACT OF VOTES FROM THE JUNE 13, 2017 PRIMARY

‘Aye: Tim Lovelace, Lou Wallace, Carl Rhea, Steve Breeding, David Eaton and Rebecca Dye Nay: None

APPROVAL OF GENERAL COUNTY INVOICES

Motion made by David Eaton, second Carl Rhea and duly approved by the Board of Supervisors to approve general county invoices in the amount of $1,655,087.42 including reoccurring and withholdings.

The vote was: ‘Aye: David Eaton, Carl Rhea, Tim Lovelace, Rebecca Dye, Steve Breeding and Lou Wallace Nay: None

Citizens Comment

Geneva Yates, Yates Circle Estates commented that she is very concerned about the exit road of the estates. She asked the Board for any assistance in this matter.

Dustin Keith, Elk Garden invited the Board to attend the Farm to Table event to be held in Lebanon in ‘August. He also thanked them for all their support of the Drug Free Graduation Party that was held in the conference center on graduation night. He added that if any of the Board was interested in

attending the Suicide Prevention Conference in Abingdon to please let him know.

The Chairman closed citizens comment period. County Attorney Reports and Requests Matt Crum discussed the issuance of water revenue bonds by the Russell County PSA.

MOTION TO APPROVE A RESOLUTION OF SUPPORT FOR THE ISSUANCE OF WATER REVENUE BONDS

Motion made by David Eaton, second Lou Wallace to approve a Resolution of Support for the Issuance of Water Revenue Bonds by the Russell County PSA.

The vote was: ‘Aye: David Eaton, Steve Breeding and Carl Rhea Nay: Rebecca Dye, Tim Lovelace and Lou Wallace

MOTION FAILED.

County Administrator Reports and Requests

APPROVAL OF THE ABSTRACT OF VOTES FROM THE JUNE 13, 2017 PRIMARY

Motion made by Lou Wallace, second Tim Lovelace and duly approved by the Board of Supervisors to approve the abstract of votes from the June 13, 2017 Democratic/Republican Primary.

The vote was: Aye: Lou Wallace, Tim Lovelace, Carl Rhea, Rebecca Dye, Steve Breeding and David Eaton Nay: None

APPROVAL TO HOLD A PUBLIC HEARING ON THE COURTHOUSE CONSTRUCTION AND MAINTENANCE

FEE

Motion made by David Eaton, second Lou Wallace and duly approved by the Board of Supervisors to approve the authorization of a public hearing for the Courthouse Construction and Maintenance Fee to be held on August 07, 2017.

The vote was: Aye: David Eaton, Lou Wallace, Carl Rhea, Tim Lovelace, Rebecca Dye and Steve Breeding Nay: None

APPROVAL TO INCREASE THE PETTY CASH ACCOUNT FOR THE TREASURER

Motion made by David Eaton, second Lou Wallace and duly approved by the Board of Supervisors to approve an increase in the petty cash fund from $500 to $1000 for the Treasurer’s Office.

The vote was: Aye: David Eaton, Lou Wallace, Carl Rhea, Tim Lovelace, Steve Breeding and Rebecca Dye Nay: None

APPROVAL OF A RESOLUTION FOR CONTINUATION OF FUNDING FOR THE CLINCH RIVER VALLEY INITIATIVE

Motion made by Lou Wallace, second Carl Rhea and duly approved by the Board of Supervisors to authorize a Resolution for the continuance of funding for the Clinch River Valley Initiative.

The vote was: Aye: Lou Wallace, Carl Rhea, Tim Lovelace, Steve Breeding, Rebecca Dye and David Eaton Nay: None

APPROVAL OF A RESOLUTION OF PUBLIC NOTICE OF INTENT TO ABANDON RT. 9766, RT. 9532 AND RT.

9806

Motion made by Lou Wallace, second Tim Lovelace and duly approved by the Board of Supervisors to authorize a Resolution of Public Notice of Russell County Intent to Abandon Route 9766, Route 9532 and Route 9806.

The vote was: Aye: Lou Wallace, Tim Lovelace, Carl Rhea, David Eaton, Steve Breeding and Rebecca Dye Nay: None

Motion made by Lou Wallace, second Tim Lovelace and duly approved by the Board of Supervisors to approve the abstract of votes from the June 13, 2017 Democratic/Republican Primary.

The vote was: ‘Aye: Lou Wallace, Tim Lovelace, Carl Rhea, Rebecca Dye, Steve Breeding and David Eaton Nay: None

APPROVAL TO HOLD A PUBLIC HEARING ON THE COURTHOUSE CONSTRUCTION AND MAINTENANCE FEE

The vote was: ‘Aye: David Eaton, Lou Wallace, Carl Rhea, Tim Lovelace, Rebecca Dye and Steve Breeding

Nay: None

APPROVAL TO INCREASE THE PETTY CASH ACCOUNT FOR THE TREASURER

Motion made by David Eaton, second Lou Wallace and duly approved by the Board of Supervisors to approve an increase in the petty cash fund from $500 to $1000 for the Treasurer’s Office.

The vote was ‘Aye: David Eaton, Lou Wallace, Carl Rhea, Tim Lovelace, Steve Breeding and Rebecca Dye Nay: None

APPROVAL OF A RESOLUTION FOR CONTINUATION OF FUNDING FOR THE CLINCH RIVER VALLEY. INITIATIVE

Motion made by Lou Wallace, second Carl Rhea and duly approved by the Board of Super authorize a Resolution for the continuance of funding for the Clinch River Valley Initiative.

ors to

The vote was: ‘Aye: Lou Wallace, Carl Rhea, Tim Lovelace, Steve Breeding, Rebecca Dye and David Eaton Nay: None

APPROVAL OF A RESOLUTION OF PUBLIC NOTICE OF INTENT TO ABANDON RT. 9766, RT. 9532 AND RT. 9806

The vote was: Aye: Lou Wallace, Tim Lovelace, Carl Rhea, David Eaton, Steve Breeding and Rebecca Dye Nay: None

APPROVAL OF AUTHORIZATION OF A CONTRACT AND APPROPRIATION OF FUNDING WITH THE CENTER FOR NATURAL CAPITAL

Motion made by Lou Wallace, second Carl Rhea and duly approved by the Board of Supervisors to authorize a contract and appropriation of funding with the Center for Natural Capital “Stream Sweepers” to clean up the Clinch River.

The vote was: Aye: Lou Wallace, Carl Rhea, Tim Lovelace, David Eaton, Rebecca Dye and Steve Breeding Nay: None

APPROVAL TO ADVERTISE AND HIRE A HOUSEKEEPING SUPERVISOR

Motion made by David Eaton, second Lou Wallace and duly approved by the Board of Supervisors to advertise and hire a housekeeping supervisor.

The vote was: Aye: David Eaton, Lou Wallace, Carl Rhea, Steve Breeding, Tim Lovelace, and Rebecca Dye. Nay: None

APPROVAL OF A TRAVEL REQUEST FROM THE RUSSELL COUNTY COMMUNITY WORK PROGRAM

Motion made by Rebecca Dye, second Lou Wallace and duly approved by the Board of Supervisors to approve a travel request by the Community Work Program Department.

The vote was: Aye: Rebecca Dye, Lou Wallace, Tim Lovelace, Carl Rhea, David Eaton, and Steve Breeding. Nay: None

APPROVAL OF A TRAVEL REQUEST FROM THE RUSSELL COUNTY ELECTORAL BOARD

Motion made by Rebecca Dye, second Tim Lovelace and duly approved by the Board of Supervisors to approve a travel request from the Electoral Board for training.

The vote was: Aye: Rebecca Dye, Tim Lovelace, Carl Rhea, Lou Wallace, David Eaton, and Steve Breeding. Nay: None

APPROVAL OF A TRAVEL REQUEST FROM THE RUSSELL COUNTY EMERGENCY MANAGEMENT COORDINATOR

Motion made by Rebecca Dye, second Lou Wallace and duly approved by the Board of Supervisors to approve a travel request from Russell County Emergency Management Coordinator to attend FEMA training.

Aye: Rebecca Dye, Lou Wallace, Tim Lovelace, Carl Rhea, David Eaton, and Steve Breeding. Nay: None

APPROVAL OF AUTHORIZATION OF A CONTRACT AND APPROPRIATION OF FUNDING WITH THE CENTER FOR NATURAL CAPITAL

The vote was: ‘Aye: Lou Wallace, Carl Rhea, Tim Lovelace, David Eaton, Rebecca Dye and Steve Breeding Nay: None

APPROVAL TO ADVERTISE AND HIRE A HOUSEKEEPING SUPERVISOR

Motion made by David Eaton, second Lou Wallace and duly approved by the Board of Supervisors to. advertise and hire a housekeeping supervisor.

The vote was: ‘Aye: David Eaton, Lou Wallace, Carl Rhea, Steve Breeding, Tim Lovelace, and Rebecca Dye. Nay: None

APPROVAL OF A TRAVEL REQUEST FROM THE RUSSELL COUNTY COMMUNITY WORK PROGRAM

Motion made by Rebecca Dye, second Lou Wallace and duly approved by the Board of Supervisors to approve a travel request by the Community Work Program Department.

The vote was: ‘Aye: Rebecca Dye, Lou Wallace, Tim Lovelace, Carl Rhea, David Eaton, and Steve Breeding Nay: None

APPROVAL OF A TRAVEL REQUEST FROM THE RUSSELL COUNTY ELECTORAL BOARD

Motion made by Rebecca Dye, second Tim Lovelace and duly approved by the Board of Supervisors to approve a travel request from the Electoral Board for training

The vote was: ‘Aye: Rebecca Dye, Tim Lovelace, Carl Rhea, Lou Wallace, David Eaton, and Steve Breeding. Nay: None

‘APPROVAL OF A TRAVEL REQUEST FROM THE RUSSELL COUNTY EMERGENCY MANAGEMENT COORDINATOR

Motion made by Rebecca Dye, second Lou Wallace and duly approved by the Board of Supervisors to approve a travel request from Russell County Emergency Management Coordinator to attend FEMA training.

‘Aye: Rebecca Dye, Lou Wallace, Tim Lovelace, Carl Rhea, David Eaton, and Steve Breeding. Nay: None

APPROVAL OF A TRAVEL REQUEST FROM RUSSELL COUNTY EMERGENCY MANAGEMENT FOR AN

ADJUNCT INSTRUCTOR WORKSHOP

Motion made by Rebecca Dye, second Lou Wallace and duly approved by the Board of Supervisors to approve a travel request from Russell County Emergency Management Coordinator for an Adjunct Instructor Workshop.

Aye: Rebecca Dye, Lou Wallace, Tim Lovelace, Carl Rhea, David Eaton, and Steve Breeding. Nay: None

APPROVAL TO AUTHORIZE A LETTER OF SUPPORT FOR THE CLINCH RIVER ECOLOGICAL CAMPUS

Motion made by Lou Wallace, second David Eaton and duly approved by the Board of Supervisors to authorize a letter of support for the Clinch River Ecological Campus.

The vote was: Aye: Lou Wallace, David Eaton, Carl Rhea, Tim Lovelace, Steve Breeding, and Rebecca Dye. Nay: None

APPROVAL OF ADJOURN

Motion made by David Eaton, second Lou Wallace and duly approved by the Board of Supervisors to adjourn.

The vote was: Aye: David Eaton, Lou Wallace, Carl Rhea, Tim Lovelace, Steve Breeding, and Rebecca Dye. Nay: None

Clerk of the Board Chairman

APPROVAL OF A TRAVEL REQUEST FROM RUSSELL COUNTY EMERGENCY MANAGEMENT FOR AN ‘ADJUNCT INSTRUCTOR WORKSHOP

‘Aye: Rebecca Dye, Lou Wallace, Tim Lovelace, Carl Rhea, David Eaton, and Steve Breeding. Nay: None

APPROVAL TO AUTHORIZE A LETTER OF SUPPORT FOR THE CLINCH RIVER ECOLOGICAL CAMPUS

Motion made by Lou Wallace, second David Eaton and duly approved by the Board of Supervisors to authorize a letter of support for the Clinch River Ecological Campus.

The vote was: ‘Aye: Lou Wallace, David Eaton, Carl Rhea, Tim Lovelace, Steve Breeding, and Rebecca Dye. Nay: None

APPROVAL OF ADJOURN

Motion made by David Eaton, second Lou Wallace and duly approved by the Board of Supervisors to adjourn.

The vote was:

‘Aye: David Eaton, Lou Wallace, Carl Rhea, Tim Lovelace, Steve Breeding, and Rebecca Dye. Nay: None

Clerk of the Board Chairman

July 26, 2017

A special called meeting of the Russell County Board of Supervisors was held on Wednesday, July 26,

2017 at 10:00 am at the Russell County Government Center in Lebanon, Virginia.

The Clerk called the meeting to order.

Roll Call by the Clerk:

Present:

Tim Lovelace Lou Wallace Carl Rhea David Eaton Steve Breeding Rebecca Dye Mark Mitchell

Lonzo Lester

Absent:

None

Invocation by Chairman Steve Breeding followed by the Pledge of Allegiance to the Flag.

APPROVAL OF THE AGENDA

Motion made by Mark Mitchell, second David Eaton and duly approved by the Board of Supervisors to approve the agenda.

The vote was: Aye: Tim Lovelace, Lou Wallace, Carl Rhea, David Eaton, Steve Breeding, Mark Mitchell and Rebecca Dye Nay: None

EXECUTIVE SESSION (CLOSED)

Motion made by Mark Mitchell, second David Eaton and duly approved by the Board of Supervisors to enter to Executive Session (Closed) pursuant to Section 2.2-3711(A) (1) of the Code of Virginia to discuss personnel and to discuss litigation matters pursuant to Section 2.2-3711(A) (7).

The vote was: Aye: Mark Mitchell, David Eaton, Carl Rhea, Tim Lovelace, Rebecca Dye, Steve Breeding and Lou Wallace Nay: None

July 26, 2017

A special called meeting of the Russell County Board of Supervisors was held on Wednesday, July 26, 2017 at 10:00 am at the Russell County Government Center in Lebanon, Virginia.

The Clerk called the meeting to order. Roll Call by the Clerk: Present:

Tim Lovelace Lou Wallace Carl Rhea David Eaton Steve Breeding Rebecca Dye Mark Mitchell

Lonzo Lester

Absent:

None

Invocation by Chairman Steve Breeding followed by the Pledge of Allegiance to the Flag.

APPROVAL OF THE AGENDA

Motion made by Mark Mitchell, second David Eaton and duly approved by the Board of Supervisors to approve the agenda.

The vote was: ‘Aye: Tim Lovelace, Lou Wallace, Carl Rhea, David Eaton, Steve Breeding, Mark Mitchell and Rebecca Dye Nay: None

EXECUTIVE SESSION (CLOSED)

The vote was: ‘Aye: Mark Mitchell, David Eaton, Carl Rhea, Tim Lovelace, Rebecca Dye, Steve Breeding and Lou Wallace Nay: None

APPROVAL TO RETURN TO REGULAR SESSION

Motion made by Tim Lovelace, second Mark Mitchell and duly approved by the Board of Supervisors to return to regular session.

The vote was: Aye: Tim Lovelace, Mark Mitchell, Lou Wallace, David Eaton, Carl Rhea, Rebecca Dye and Steve Breeding Nay: None

CERTIFICATION OF CLOSED SESSION

Pursuant to § 2.2-3712(D) of the Code of Virginia 1950, as amended each member of the Board of Supervisors upon the Roll Call certifies that to the best of their knowledge (i) only public business matters lawfully exempted from the open meeting requirements under the Virginia Freedom of Information Act and (ii) only such public business matters that were identified in the motion(s) by which the closed meeting was convened were heard, discussed or considered in the meeting by the Board of Supervisors.

Any member of the Board of Supervisors who believes that there was a departure from the requirements of clauses (i) and (ii) above shall so state prior to the vote, indicating the substance of the departure that, in his or her judgment, has taken place.

Are there any who believe a departure has taken place? Seeing none, if you agree that the matters heard,

discussed or considered during the closed meeting were pursuant only to the motion(s) by which the

closed meeting was convened, please signify by saying aye or yes.

Tim Lovelace – AYE Lou Wallace – AYE Carl Rhea – AYE David Eaton – AYE Rebecca Dye - AYE Steve Breeding – AYE Mark Mitchell – AYE

APPROVAL TO ADJOURN TO RECONVENE

Motion made by David Eaton, second Mark Mitchell and duly approved by the Board of Supervisors to

adjourn to reconvene on Wednesday, July 26, 2017 at 6:00 pm at the Southwest Center for Education

and Training in Lebanon, Virginia.

The vote was: Aye: David Eaton, Mark Mitchell, Lou Wallace, Tim Lovelace, Carl Rhea, Steve Breeding and Rebecca Dye Nay: None

Clerk of the Board Chairman

APPROVAL TO RETURN TO REGULAR SESSION

Motion made by Tim Lovelace, second Mark Mitchell and duly approved by the Board of Supervisors to return to regular session.

The vote was: ‘Aye: Tim Lovelace, Mark Nay: None

hell, Lou Wallace, David Eaton, Carl Rhea, Rebecca Dye and Steve Breeding

CERTIFICATION OF CLOSED SESSION

‘Any member of the Board of Supervisors who believes that there was a departure from the requirements of clauses (i) and (ii) above shall so state prior to the vote, indicating the substance of the departure that, in his or her judgment, has taken place.

Are there any who believe a departure has taken place? Seeing none, if you agree that the matters heard, discussed or considered during the closed meeting were pursuant only to the motion(s) by which the closed meeting was convened, please signify by saying aye or yes

Tim Lovelace ~ AYE Lou Wallace ~ AYE Carl Rhea AYE David Eaton — AYE Rebecca Dye - AYE Steve Breeding - AYE Mark Mitchell - AYE APPROVAL TO ADJOURN TO RECONVENE

Motion made by David Eaton, second Mark Mitchell and duly approved by the Board of Supervisors to adjourn to reconvene on Wednesday, July 26, 2017 at 6:00 pm at the Southwest Center for Education and Training in Lebanon, Virginia

The vote was: ‘Aye: David Eaton, Mark Mitchell, Lou Wallace, Tim Lovelace, Carl Rhea, Steve Breeding and Rebecca Dye Nay: None

Clerk of the Board Chairman

July 26, 2017 Reconvened Meeting

A reconvened meeting of the Russell County Board of Supervisors was held on Wednesday, July 26, 2017 at 6:00 pm at the Southwest Center for Education and Training in Lebanon, Virginia.

Roll Call by the Clerk:

Present:

Carl Rhea David Eaton Steve Breeding Rebecca Dye

Lonzo Lester

Absent:

Tim Lovelace Lou Wallace

Delegate Will Morefield conducted the meeting. Those present included the Russell County Board of Supervisors, Judges, Law Enforcement, several members of adjourning county Boards of Supervisors as well as other agencies in the region. The purpose of the meeting was to discuss potential solutions to the drug epidemic (especially the opioid crisis) in the far Southwest Virginia Counties. The possibility of locating a long term residential treatment center in Southwest Virginia and possible funding streams were also discussed.

APPROVAL TO ADJOURN

Motion made by Mark Mitchell, second David Eaton and duly approved by the Board of Supervisors to adjourn.

The vote was: Aye: Mark Mitchell, David Eaton, Carl Rhea, Rebecca Dye and Steve Breeding Nay: None

Clerk of the Board Chairman

July 26, 2017 Reconvened Meeting

A reconvened meeting of the Russell County Board of Supervisors was held on Wednesday, July 26, 2017 at 6:00 pm at the Southwest Center for Education and Training in Lebanon, Virgi

Roll Call by the Clerk: Present:

Carl Rhea David Eaton Steve Breeding Rebecca Dye

Lonzo Lester Absent:

Tim Lovelace Lou Wallace

APPROVAL TO ADJOURN

Motion made by Mark Mitchell, second David Eaton and duly approved by the Board of Supervisors to. adjourn.

The vote was: ‘Aye: Mark Mitchell, David Eaton, Carl Rhea, Rebecca Dye and Steve Breeding Nay: None

Clerk of the Board Chairman

Board of Supervisors Action Item C-2

137 Highland Drive Presenter: Chairman Lebanon, VA 24266

Meeting: 8/7/17 6:00 PM

Russell County Government Center

137 Highland Drive · Lebanon, Virginia 24266 · (276) 889-8000 · Fax (276) 889-8011 www.russellcountyva.us

Approval of Expenditures

Request approval of the County’s July 2017 Monthly Expenditures:

STAFF RECOMMENDATION(s):

County’s July 2017 Monthly Expenditures are in compliance with budget and operational services.

SUGGESTED MOTION(s):

Motion to approve County’s July 2017 Monthly Expenditures.

ATTACHMENTS:

 July 2017 Monthly Expenditures

Board of Supervisors Action Item C-2 137 Highland Drive Presenter: Chairman Lebanon, VA 24266

Meeting: 8/7/17 6:00 PM

Approval of Expenditures

Request approval of the County’s July 2017 Monthly Expenditures:

‘STAFF RECOMMENDATION(s): County’s July 2017 Monthly Expenditures are in compliance with budget and operational services.

SUGGESTED MOTION(s): Motion to approve County’s July 2017 Monthly Expenditures.

ATTACHMENTS:

July 2017 Monthly Expenditures

Russell County Government Center 137 Highland Drive - Lebanon, Virginia 24266 - (276) 889-8000 - Fax (276) 889-8011 www.russellcountyva.us

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Board of Supervisors Action Item D-1 & D-2

137 Highland Drive Presenter: Attorney Lebanon, VA 24266

Meeting: 8/7/17 6:00 PM

Attorney Reports & Requests

The County Attorney Reports & Request for August 2017:

REPORTS

Authorization of Resolution to the Issuance of Water Revenue Bonds by RC PSA and Authorizing the Execution of Financing Agreements and
Support Agreements providing for RC Moral Obligation to make certain Appropriations with Respect to the Bonds…………………………………………D-1
Authorization of Courthouse Construction & Maintenance Fee Ordinance….D-2

STAFF RECOMMENDATION(s):

Board Discretion.

SUGGESTED MOTION(s):

Board Discretion.

ATTACHMENTS:

 Various

Board of Supervisors Action Item D-1 & D-2

137 Highland Drive Presenter: Attorney Lebanon, VA 24266

Meeting: 8/7/17 6:00 PM

Attorney Reports & Requests The County Attorney Reports & Request for August 2017: REPORTS

Authorization of Resolution to the Issuance of Water Revenue Bonds by RC PSA and Authorizing the Execution of Financing Agreements and Support Agreements providing for RC Moral Obligation to make certain

Appropriations with Respect to the Bonds. <A

Authorization of Courthouse Construction & Maintenance Fee Ordinance…D-2

STAFF RECOMMENDATION(s): Board Discretion,

SUGGESTED MOTION(s): Board Discretion,

ATTACHMENTS:

Various

Russell County Virginia “The Heart of Southwest Virginia”

Tim Lovelace Rebecca Dye District 1 District 6

Lou Ann Wallace Steve Breeding, Chairman Mark Mitchell District 2 District 5 At-Large

Carl Rhea David Eaton, Vice-Chairman Lonzo Lester District 3 District 4 County Administrator

Russell County Government Center 137 Highland Drive · Lebanon, Virginia 24266 · (276) 889-8000 · Fax (276) 889-8011

www.russellcountyva.us

RESOLUTION OF THE BOARD OF SUPERVISORS OF RUSSELL COUNTY, VIRGINIA

CONSENTING TO THE ISSUANCE OF WATER REVENUE BONDS BY THE RUSSELL COUNTY

PUBLIC SERVICE AUTHORITY AND AUTHORIZING THE EXECUTION OF FINANCING

AGREEMENTS AND SUPPORT AGREEMENTS PROVIDING FOR RUSSELL COUNTY’S

MORAL OBLIGATION TO MAKE CERTAIN APPROPRIATIONS WITH RESPECT TO THE

BONDS

The Russell County Public Service Authority (the “Authority”) proposes to issue its $512,053 Water

Revenue Bond, Series 2017 and $197,027 Water Revenue Bond, Series 2017 (the “Bonds”) to the Virginia

Resource Authority, as Administrator of the Virginia Water Supply Revolving Fund (the “VRA”), to finance

waterline extensions in the Fincastle Estates, Thompson Creek, and Tunnel Road areas in Russell County

(the “Projects”) as improvements to the Authority’s water system (the “System).

The Authority has requested the Board of Supervisors of Russell County, Virginia (the “County”)

to facilitate the issuance and sale of the Bonds by consenting to the issuance of the Bonds and providing

for the County’s pledge of certain water revenues and its moral obligation to make certain appropriations

to the Authority with respect to the Bonds and the System.

As part of its plan for financing the Projects, the Authority proposes to execute the following

documents, drafts of which have been presented to the Board of Supervisors at this meeting:

a. two Financing Agreements (the “Financing Agreements”) between the

Authority and the VRA, and to which the Board of Supervisors of the County

is asked to acknowledge, consent and agree; and

b. two Support Agreements (the “Support Agreements”), between the

Authority, the Board of Supervisors of the County, and the VRA.

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

The Authority’s plan of financing for the Projects, substantially on the terms set forth in

the Financing Agreements and which involves the issuance of the Bonds, is approved, and the Board of

Supervisors finds that the issuance of the Bonds will benefit the inhabitants of Russell County. The Board

of Supervisors consents to the issuance of the Bonds.

The Board of Supervisors agrees, in accordance with the Support Agreement, to pay to

the Authority amounts sufficient to pay the debt service under the Bonds and any other indebtedness

secured by or payable from the revenues of the System, including the Existing Parity Bonds set forth on

Exhibit F to the Financing Agreements, the operation and maintenance expense of the System of which

the Projects are a part, and additional payments for costs and expenses related to any amendment,

Russell County Virginia “The Heart of Southwest Virginia”

Tim Lovelace Rebecca Dye District 1 District 6

Lou Ann Wallace Steve Breeding, Chairman Mark Mitchell

District 2 District 5 AvLarge

Carl Rhea David Eaton, Vice-Chairman Lonzo Lester

District 3 District 4 County Administrator

RESOLUTION OF THE BOARD OF SUPERVISORS OF RUSSELL COUNTY, VIRGINIA CONSENTING TO THE ISSUANCE OF WATER REVENUE BONDS BY THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY AND AUTHORIZING THE EXECUTION OF FINANCING AGREEMENTS AND SUPPORT AGREEMENTS PROVIDING FOR RUSSELL COUNTY’S MORAL OBLIGATION TO MAKE CERTAIN APPROPRIATIONS WITH RESPECT TO THE BONDS

The Russell County Public Service Authority (the “Authority”) proposes to issue its $512,053 Water Revenue Bond, Series 2017 and $197,027 Water Revenue Bond, Series 2017 (the “Bonds” to the Virginia Resource Authority, as Administrator of the Virginia Water Supply Revolving Fund (the “VRA”), to finance waterline extensions in the Fincastle Estates, Thompson Creek, and Tunnel Road areas in Russell County (the “Projects”) as improvements to the Authority’s water system (the “System)…

The Authority has requested the Board of Supervisors of Russell County, Virginia (the “County”) to facilitate the issuance and sale of the Bonds by consenting to the issuance of the Bonds and providing for the County’s pledge of certain water revenues and its moral obligation to make certain appropriations to the Authority with respect to the Bonds and the System

As part of its plan for financing the Projects, the Authority proposes to execute the following documents, drafts of which have been presented to the Board of Supervisors at this meeting:

a, two Financing Agreements (the “Financing Agreements”) between the ‘Authority and the VRA, and to which the Board of Supervisors of the County is asked to acknowledge, consent and agree; and

b. two Support Agreements (the “Support Agreements”), between the Authority, the Board of Supervisors of the County, and the VRA.

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

1, The Authority’s plan of financing for the Projects, substantially on the terms set forth in the Financing Agreements and which involves the issuance of the Bonds, is approved, and the Board of Supervisors finds that the issuance of the Bonds will benefit the inhabitants of Russell County. The Board of Supervisors consents to the issuance of the Bonds.

The Board of Supervisors agrees, in accordance with the Support Agreement, to pay to the Authority amounts sufficient to pay the debt service under the Bonds and any other indebtedness secured by or payable from the revenues of the System, including the Existing Parity Bonds set forth on Exhibit F to the Financing Agreements, the operation and maintenance expense of the System of which the Projects are a part, and additional payments for costs and expenses related to any amendment,

Russell County Government Center 137 Highland Drive - Lebanon, Virginia 24266 - (276) 889-8000 - Fax (276) 889-8011 www.russellcountyva.us

Russell County Government Center 137 Highland Drive · Lebanon, Virginia 24266 · (276) 889-8000 · Fax (276) 889-8011

www.russellcountyva.us

waiver, consent, or collection or enforcement proceedings under either Financing Agreement, subject to

annual appropriation by the Board of Supervisors, all on the terms and conditions to be provided in the

Support Agreements. The County’s obligations to make payments to the Authority pursuant to this

resolution shall be subject to and dependent upon annual appropriations being made from time to time

by the Board of Supervisors for such purpose. Nothing in this resolution, the Bonds or the Support

Agreements shall constitute a debt of the County within the meaning of any constitutional or statutory

limitation or a pledge of the faith or credit or the taxing power of the County.

The Board of Supervisors of the County acknowledges that (i) the obligations of the

Authority to determine, and of the County to pay, the charges for the use of and for services to be

furnished by the System (as defined in the Financing Agreement) are crucial to the security for the Bonds,

(ii) VRA would not purchase the Bonds without the security and credit enhancement provided by the

Support Agreements, (iii) VRA will be a third party beneficiary of the Support Agreement for so long as the

Bonds remain outstanding, and (iv) VRA is treating each Support Agreement as a “local obligation” within

the meaning of Section 62.1-199 of the Code of Virginia of 1950, as amended (the “Virginia Code”), which

in the event of a nonpayment thereunder authorizes VRA or the trustee for VRA’s bonds to file an affidavit

with the Governor that such nonpayment has occurred pursuant to Section 62.1-216.1 of the Virginia

Code. Section 62.1-216.1 of the Virginia Code provides that if the Governor is satisfied that such

nonpayment has occurred, the Governor will immediately make an order directing the Comptroller to

withhold all further payment to the County of all funds, or of any part of them, appropriated and payable

by the Commonwealth of Virginia to the County for any and all purposes, and the Governor will, while the

nonpayment continues, direct in writing the payment of all sums withheld by the Comptroller, or as much

of them as is necessary, to VRA, so as to cure, or cure insofar as possible, such nonpayment.

Any one of the Chairman or Vice-Chairman of the Board of Supervisors or the County

Administrator is authorized and directed to execute and deliver the Financing Agreements and the

Support Agreements. The Financing Agreements and the Support Agreements shall be in substantially

the forms presented at this meeting, which are approved, with such completions, omissions, insertions

and changes as may be approved by the officer executing the agreement, his execution to constitute

conclusive evidence of his approval of any such completions, omissions, insertions or changes. The County

Administrator is authorized and directed to take such actions and give such notices as may be required of

him under the Financing Agreements and the Support Agreements.

This resolution shall take effect immediately upon its adoption.

waiver, consent, or collection or enforcement proceedings under either Financing Agreement, subject to annual appropriation by the Board of Supervisors, all on the terms and conditions to be provided in the Support Agreements. The County’s obligations to make payments to the Authority pursuant to this resolution shall be subject to and dependent upon annual appropriations being made from time to time by the Board of Supervisors for such purpose. Nothing in this resolution, the Bonds or the Support ‘Agreements shall constitute a debt of the County within the meaning of any constitutional or statutory limitation or a pledge of the faith or credit or the taxing power of the County.

The Board of Supervisors of the County acknowledges that (i) the obligations of the Authority to determine, and of the County to pay, the charges for the use of and for services to be furnished by the System (as defined in the Financing Agreement) are crucial to the security for the Bonds, (ii) VRA would not purchase the Bonds without the security and credit enhancement provided by the Support Agreements, (ii) VRA will be a third party beneficiary of the Support Agreement for so long as the Bonds remain outstanding, and (iv) VRA is treating each Support Agreement as a “local obligation” within the meaning of Section 62.1-199 of the Code of Virginia of 1950, as amended (the “Virginia Code”), which in the event of a nonpayment thereunder authorizes VRA or the trustee for VRA’s bonds to file an affidavit with the Governor that such nonpayment has occurred pursuant to Section 62.1-216.1 of the Virginia Code. Section 62.1-216.1 of the Virginia Code provides that if the Governor is satisfied that such nonpayment has occurred, the Governor will immediately make an order directing the Comptroller to withhold all further payment to the County of all funds, or of any part of them, appropriated and payable by the Commonwealth of Virginia to the County for any and all purposes, and the Governor will, while the nonpayment continues, direct in writing the payment of all sums withheld by the Comptroller, or as much of them as is necessary, to VRA, so as to cure, or cure insofar as possible, such nonpayment.
Any one of the Chairman or Vice-Chairman of the Board of Supervisors or the County Administrator is authorized and directed to execute and deliver the Financing Agreements and the Support Agreements. The Financing Agreements and the Support Agreements shall be in substantially the forms presented at this meeting, which are approved, with such completions, omissions, insertions and changes as may be approved by the officer executing the agreement, his execution to constitute conclusive evidence of his approval of any such completions, omissions, insertions or changes. The County Administrator is authorized and directed to take such actions and give such notices as may be required of him under the Financing Agreements and the Support Agreements.
This resolution shall take effect immediately upon its adoption.

Russell County Government Center 137 Highland Drive - Lebanon, Virginia 24266 - (276) 889-8000 : Fax (276) 889-8011 www.russellcountyva.us

Russell County Government Center 137 Highland Drive · Lebanon, Virginia 24266 · (276) 889-8000 · Fax (276) 889-8011

www.russellcountyva.us

The undersigned Clerk of the Board of Supervisors of Russell County, Virginia (the “Board of

Supervisors”), certifies that the foregoing constitutes a true and correct copy of a resolution

duly adopted at a meeting of the Board of Supervisors held on July 10, 2017. I further

certify that such meeting was regularly scheduled meeting and that, during the

consideration of the foregoing resolution, a quorum was present. I further certify that the

minutes of such meeting reflect the attendance of the members and the voting on the

foregoing resolution as follows:

Members Attendance Vote

WITNESS MY HAND and the seal of the Board of Supervisors of Russell County, Virginia, this ___ day

of July, 2017.

(SEAL)

Clerk of the Board of Supervisors

of Russell County, Virginia

The undersigned Clerk of the Board of Supervisors of Russell County, Virginia (the “Board of Supervisors”), certifies that the foregoing constitutes a true and correct copy of a resolution duly adopted at a meeting of the Board of Supervisors held on July 10, 2017. | further certify that such meeting was regularly scheduled meeting and that, during the consideration of the foregoing resolution, a quorum was present. | further certify that the minutes of such meeting reflect the attendance of the members and the voting on the foregoing resolution as follows:

Members ‘Attendance Vote

WITNESS MY HAND and the seal of the Board of Supervisors of Russell County, Virginia, this__ day of July, 2017.

(SEAL)

Clerk of the Board of Supervisors

of Russell County, Virginia

Russell County Government Center 137 Highland Drive « Lebanon, Virginia 24266 - (276) 889-8000 : Fax (276) 889-8011 www.russellcountyva.us

SUPPORT AGREEMENT

THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY

FINCASTLE ESTATES WATERLINE EXTENSION PROJECT

WSL-022-15E

THIS SUPPORT AGREEMENT is made as of the first day of July, 2017, by and

among the BOARD OF SUPERVISORS OF RUSSELL COUNTY, VIRGINIA (the

“Board”), acting as the governing body of the County of Russell, Virginia (the “County”), THE

RUSSELL COUNTY PUBLIC SERVICE AUTHORITY (the “Borrower”), and the

VIRGINIA RESOURCES AUTHORITY (the “Authority”), as Administrator of the

VIRGINIA WATER SUPPLY REVOLVING FUND and as purchaser of the Local Bond, as

hereinafter defined, pursuant to a Financing Agreement dated as of the date hereof (the

“Financing Agreement”), between the Authority and the Borrower, and acknowledged,

consented and agreed to by the County.

RECITALS:

WHEREAS, the Borrower was created by the Board pursuant to the Virginia Water and

Waste Authorities Act (Chapter 51, Title 15.2, Code of Virginia of 1950, as amended) and owns

and/or and operates and leases the System in the County; and

WHEREAS, the Borrower has determined that it is in its best interest to issue and sell a

water system revenue bond in an original aggregate principal amount not to exceed $512,053

(the “Local Bond”) to the Authority pursuant to the terms of the Financing Agreement in order to

finance the Project; and

WHEREAS, the Board adopted on July 10, 2017 a resolution authorizing, among other

things, the execution of an agreement providing for a non-binding obligation of the Board to

consider certain appropriations in support of the Local Bond and the Project.

AGREEMENT

NOW, THEREFORE, for and in consideration of the foregoing and of the mutual

covenants herein set forth, the parties hereto agree as follows:

Unless otherwise defined, each capitalized term used in this Support Agreement

shall have the meaning given it in the Financing Agreement.

The Borrower shall use its best efforts to issue the Local Bond, to use the

proceeds thereof to pay the costs of the Project, and to construct and place the Project in

operation at the earliest practical date.

No later than May 15 of each year, beginning May 15, 2018, the Borrower shall

notify the Board of the amount (the “Annual Deficiency Amount”) by which the Borrower

SUPPORT AGREEMENT THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY FINCASTLE ESTATES WATERLINE EXTENSION PROJECT WSL-022-15E

THIS SUPPORT AGREEMENT is made as of the first day of July, 2017, by and among the BOARD OF SUPERVISORS OF RUSSELL COUNTY, VIRGINIA (the “Board”), acting as the governing body of the County of Russell, Virginia (the “County”), THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY (the “Borrower”), and the VIRGINIA RESOURCES AUTHORITY (the “Authority”), as Administrator of the VIRGINIA WATER SUPPLY REVOLVING FUND and as purchaser of the Local Bond, as hereinafter defined, pursuant to a Financing Agreement dated as of the date hereof (the “Financing Agreement”), between the Authority and the Borrower, and acknowledged, consented and agreed to by the County.

RECITALS:

WHEREAS, the Borrower was created by the Board pursuant to the Virginia Water and Waste Authorities Act (Chapter 51, Title 15.2, Code of Virginia of 1950, as amended) and owns and/or and operates and leases the System in the County; and

WHEREAS, the Borrower has determined that it is in its best interest to issue and sell a water system revenue bond in an original aggregate principal amount not to exceed $512,053 (the “Local Bond”) to the Authority pursuant to the terms of the Financing Agreement in order to finance the Project; and

WHEREAS, the Board adopted on July 10, 2017 a resolution authorizing, among other things, the execution of an agreement providing for a non-binding obligation of the Board to consider certain appropriations in support of the Local Bond and the Project.

AGREEMEN

NOW, THEREFORE, for and in consideration of the foregoing and of the mutual covenants herein set forth, the parties hereto agree as follows:

Unless otherwise defined, each capitalized term used in this Support Agreement shall have the meaning given it in the Financing Agreement.
The Borrower shall use its best efforts to issue the Local Bond, to use the proceeds thereof to pay the costs of the Project, and to construct and place the Project in operation at the earliest practical date.
No later than May 15 of each year, beginning May 15, 2018, the Borrower shall notify the Board of the amount (the “Annual Deficiency Amount”) by which the Borrower

reasonably expects the Revenues to be insufficient to pay (i) the debt service obligations under

the Financing Agreement, the Local Bond and any other indebtedness secured by or payable

from the Revenues, including the Existing Parity Bonds set forth on Exhibit F to the Financing

Agreement, (ii) the Operation and Maintenance Expense, and (iii) the Additional Payments in

full as and when due during the County’s fiscal year beginning the following July 1.

The County Administrator of the County (the “County Administrator”) shall

include the Annual Deficiency Amount in his budget submitted to the Board for the following

fiscal year as an amount to be appropriated to or on behalf of the Borrower. The County

Administrator shall deliver to the Authority within ten days after the adoption of the County’s

budget for each fiscal year, but not later than July 15 of each year, a certificate stating whether

the Board has appropriated to or on behalf of the Borrower an amount equal to the Annual

Deficiency Amount.

If at any time Revenues shall be insufficient to make any of the payments referred

to in paragraph 3 hereof, the Borrower shall notify the County Administrator of the amount of

such insufficiency and the County Administrator shall request a supplemental appropriation from

the Board in the amount necessary to make such payment.

The County Administrator shall present each request for appropriation pursuant to

paragraph 5 above to the Board, and the Board shall consider such request, at the Board’s next

regularly scheduled meeting at which it is possible to satisfy any applicable notification

requirement. Promptly after such meeting, the County Administrator shall notify the Authority

as to whether the amount so requested was appropriated. If the Board shall fail to make any such

appropriation, the County Administrator shall add the amount of such requested appropriation to

the Annual Deficiency Amount reported to the County by the County Administrator for the

County’s next fiscal year.

The Board hereby undertakes a non-binding obligation to appropriate such

amounts as may be requested from time to time pursuant to paragraphs 4 and 5 above, to the

fullest degree and in such manner as is consistent with the Constitution and laws of the

Commonwealth of Virginia. The Board, while recognizing that it is not empowered to make any

binding commitment to make such appropriations in future fiscal years, hereby states its intent to

make such appropriations in future fiscal years, and hereby recommends that future Boards of

Supervisors do likewise.

The Board acknowledges that (i) the Authority would not purchase the Local

Bond without the security and credit enhancement provided by this Agreement, and (ii) the

Authority is treating this Agreement as a “local obligation” within the meaning of Section 62.1-

199 of the Code of Virginia of 1950, as amended (the “Virginia Code”), which in the event of a

nonpayment hereunder authorizes the Authority to file an affidavit with the Governor that such

nonpayment has occurred pursuant to Section 62.1-216.1 of the Virginia Code. In purchasing

the Local Bond, the Authority is further relying on Section 62.1-216.1 of the Virginia Code,

providing that if the Governor is satisfied that the nonpayment has occurred, the Governor will

immediately make an order directing the Comptroller to withhold all further payment to

the County of all funds, or of any part of them, appropriated and payable by the Commonwealth

reasonably expects the Revenues to be insufficient to pay (i) the debt service obligations under the Financing Agreement, the Local Bond and any other indebtedness secured by or payable from the Revenues, including the Existing Parity Bonds set forth on Exhibit F to the Financing Agreement, (ii) the Operation and Maintenance Expense, and (iii) the Additional Payments in full as and when due during the County’s fiscal year beginning the following July 1

4, The County Administrator of the County (the “County Administrator”) shall include the Annual Deficiency Amount in his budget submitted to the Board for the following fiscal year as an amount to be appropriated to or on behalf of the Borrower. The County Administrator shall deliver to the Authority within ten days after the adoption of the County’s budget for each fiscal year, but not later than July 15 of each year, a certificate stating whether the Board has appropriated to or on behalf of the Borrower an amount equal to the Annual Deficiency Amount.

Ifat any time Revenues shall be insufficient to make any of the payments referred to in paragraph 3 hereof, the Borrower shall notify the County Administrator of the amount of such insufficiency and the County Administrator shall request a supplemental appropriation from the Board in the amount necessary to make such payment.
The County Administrator shall present each request for appropriation pursuant to paragraph 5 above to the Board, and the Board shall consider such request, at the Board’s next regularly scheduled meeting at which it is possible to satisfy any applicable notification requirement. Promptly after such meeting, the County Administrator shall notify the Authority as to whether the amount so requested was appropriated. If the Board shall fail to make any such appropriation, the County Administrator shall add the amount of such requested appropriation to the Annual Deficiency Amount reported to the County by the County Administrator for the County’s next fiscal year.
The Board hereby undertakes a non-binding obligation to appropriate such amounts as may be requested from time to time pursuant to paragraphs 4 and 5 above, to the fullest degree and in such manner as is consistent with the Constitution and laws of the Commonwealth of Virginia. The Board, while recognizing that it is not empowered to make any binding commitment to make such appropriations in future fiscal years, hereby states its intent to make such appropriations in future fiscal years, and hereby recommends that future Boards of Supervisors do likewise.
The Board acknowledges that (i) the Authority would not purchase the Local Bond without the security and credit enhancement provided by this Agreement, and (ii) the Authority is treating this Agreement as a “local obligation” within the meaning of Section 62.1- 199 of the Code of Virginia of 1950, as amended (the “Virginia Code”), which in the event of a nonpayment hereunder authorizes the Authority to file an affidavit with the Governor that such nonpayment has occurred pursuant to Section 62.1-216.1 of the Virginia Code. In purchasing the Local Bond, the Authority is further relying on Section 62.1-216.1 of the Virginia Code, providing that if the Governor is satisfied that the nonpayment has occurred, the Governor will immediately make an order directing the Comptroller to withhold all further payment to

the County of all funds, or of any part of them, appropriated and payable by the Commonwealth

of Virginia to the County for any and all purposes, and the Governor will, while the nonpayment

continues, direct in writing the payment of all sums withheld by the Comptroller, or as much of

them as is necessary, to the Authority, so as to cure, or cure insofar as possible, such

nonpayment.

Nothing herein contained is or shall be deemed to be a lending of the credit of the

County to the Borrower, the Authority or to any holder of the Local Bond or to any other person,

and nothing herein contained is or shall be deemed to be a pledge of the faith and credit or the

taxing power of the County, nor shall anything herein contained legally bind or obligate the

Board to appropriate funds for the purposes described herein.

Any notices or requests required to be given hereunder shall be deemed given if

sent by registered or certified mail, postage prepaid, addressed (i) if to the County, to P.O. Box

1208, Lebanon, VA 24266, Attention: County Administrator, (ii) if to the Borrower, to P. O.

Box 3219, Lebanon, VA 24266, Attention: Operations Manager, and (iii) if to the Authority, to

1111 East Main Street, Suite 1920, Richmond, Virginia, 23219, Attention: Executive Director.

Any party may designate any other address for notices or requests by giving notice.

It is the intent of the parties hereto that this Agreement shall be governed by the

laws of the Commonwealth of Virginia.

This Agreement shall remain in full force and effect until the Local Bond and all

other amounts payable by the Borrower under the Financing Agreement have been paid in full.

This Agreement may be executed in any number of counterparts, each of which

shall be an original and all of which together shall constitute but one and the same instrument.

[Signature Page Follows]

of Virginia to the County for any and all purposes, and the Governor will, while the nonpayment continues, direct in writing the payment of all sums withheld by the Comptroller, or as much of them as is necessary, to the Authority, so as to cure, or cure insofar as possible, such nonpayment.

Nothing herein contained is or shall be deemed to be a lending of the credit of the County to the Borrower, the Authority or to any holder of the Local Bond or to any other person, and nothing herein contained is or shall be deemed to be a pledge of the faith and credit or the taxing power of the County, nor shall anything herein contained legally bind or obligate the Board to appropriate funds for the purposes described herein.
Any notices or requests required to be given hereunder shall be deemed given if sent by registered or certified mail, postage prepaid, addressed (i) if to the County, to P.O. Box 1208, Lebanon, VA 24266, Attention: County Administrator, (ii) if to the Borrower, to P.O. Box 3219, Lebanon, VA 24266, Attention: Operations Manager, and (ii) if to the Authority, to 1111 East Main Street, Suite 1920, Richmond, Virginia, 23219, Attention: Executive Director. Any party may designate any other address for notices or requests by giving notice.

11, Itis the intent of the parties hereto that this Agreement shall be governed by the laws of the Commonwealth of Virginia.

This Agreement shall remain in full force and effect until the Local Bond and all other amounts payable by the Borrower under the Financing Agreement have been paid in full.
This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which together shall constitute but one and the same instrument.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be

executed in their respective names as of the date first above written.

BOARD OF SUPERVISORS OF RUSSELL COUNTY,

VIRGINIA

By: ____________________________________________

Title: ___________________________________________

THE RUSSELL COUNTY PUBLIC SERVICE

AUTHORITY

By: ____________________________________________

Title: ___________________________________________

VIRGINIA RESOURCES AUTHORITY, as

Administrator of the Virginia Water Supply Revolving

Fund

By: ____________________________________________

Title: ___________________________________________

#9709296 016049.0007 (Fincastle)

IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be executed in their respective names as of the date first above written

BOARD OF SUPERVISORS OF RUSSELL COUNTY, VIRGINIA

Title:

THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY

Title:

VIRGINIA RESOURCES AUTHORITY, as Administrator of the Virginia Water Supply Revolving Fund

Title:

49709206 (016049.0007 (Fincastle)

CB Draft: 6/19/17

FINANCING AGREEMENT

dated as of _____ 1, 2017

BETWEEN

VIRGINIA RESOURCES AUTHORITY,

as Administrator of the

Virginia Water Supply Revolving Fund

AND

THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY

Virginia Resources Authority

Virginia Water Supply Revolving Fund

CFDA No. 66.468 – Capitalization Grants for Drinking Water State Revolving Funds

U.S. Environmental Protection Agency

Loan No. WSL-022-15E

Fincastle Estates Waterline Extension Project

CB Draft: 6/19/17

FINANCING AGREEMENT

dated as of ___1, 2017

BETWEEN

VIRGINIA RESOURCES AUTHORITY,

as Administrator of the ginia Water Supply Revolving Fund

AND

THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY

Virginia Resources Authority irginia Water Supply Revolving Fund

CFDA No. 66.468 - Capitalization Grants for Drinking Water State Revolving Funds U.S. Environmental Protection Agency

Loan No. WSL-022-1SE Fincastle Estates Waterline Extension Project

TABLE OF CONTENTS Page

[To Be Updated]

ARTICLE I

DEFINITIONS

Section 1.1. Definitions…1

Section 1.2. Rules of Construction …4

ARTICLE II

REPRESENTATIONS

Section 2.1. Representations by Borrower …5

ARTICLE III

ISSUANCE AND DELIVERY OF THE LOCAL BOND

Section 3.1. Loan to Borrower and Purchase of the Local Bond …7

Section 3.2. Conditions Precedent to Purchase of the Local Bond …7

ARTICLE IV

USE OF LOCAL BOND PROCEEDS AND CONSTRUCTION OF PROJECT

Section 4.1. Application of Proceeds …9

Section 4.2. Agreement to Accomplish Project …10

Section 4.3. Permits …11

Section 4.4. Construction Contractors …11

Section 4.5. Engineering Services …11

Section 4.6. Borrower Required to Complete Project …12

ARTICLE V

PLEDGE, REVENUES AND ANNUAL BUDGET

Section 5.1. Pledge of Revenues …12

Section 5.2. Annual Budget …12

Section 5.3. Qualified Independent Consultant’s Report…13

TABLE OF C

[To Be Updated]

ARTICLE IL DI TIONS Section 1.1. Definitions… Section 1.2. Rules of Constructioi ARTICLE I REPRESENTATIONS Section 2.1. Representations by Borrower.

ARTICLE II ISSUANCE AND DELIVERY OF THE LOCAL BOND

Section 3.1 Loan to Borrower and Purchase of the Local Bond. Section Conditions Precedent to Purchase of the Local Bond…

ARTICLE IV USE OF LOCAL BOND PROCEEDS AND CONSTRUCTION OF PROJECT.

Section 4.1 Application of Proceeds Section 4.2. Agreement to Accomplish Project Section 4.3. Permits…

Section 4.4. Construction Contractors

Section 4.5. Engineering Services… Section 4.6. Borrower Required to Complete Project… 12 ARTICLE V

PLEDGE, REVENUES AND ANNUAL BUDGET

Section 5.1. Pledge of Revenues… Section 5.2. Annual Budget… eenientsnntnitnsenseee sevsensereeeel Section 5.3. Qualified Independent Consultant’s RepOtt…cccnconsnennennnnnanensel3

ii -

Page

ARTICLE VI

PAYMENTS

Section 6.1. Payment of Local Bond …13

Section 6.2. Payment of Additional Payments…14

ARTICLE VII

PREPAYMENTS

Section 7.1. Prepayment of Local Bond …14

ARTICLE VIII

OPERATION AND USE OF SYSTEM

Section 8.1. Ownership and Operation of Project and System …15

Section 8.2. Maintenance …15

Section 8.3. Additions and Modifications…15

Section 8.4. Use of System …15

Section 8.5. Inspection of System and Borrower’s Books and Records …15

Section 8.6. Ownership of Land …15

Section 8.7. Sale or Encumbrance …15

Section 8.8. Collection of Revenues …16

Section 8.9. No Free Service…16

Section 8.10. No Competing Service …16

Section 8.11. Mandatory Connection…16

Section 8.12. Lawful Charges …17

ARTICLE IX

INSURANCE, DAMAGE AND DESTRUCTION

Section 9.1. Insurance …17

Section 9.2. Requirements of Policies …18

Section 9.3. Notice of Damage, Destruction and Condemnation …18

Section 9.4. Damage and Destruction …18

Section 9.5. Condemnation and Loss of Title …19

Section 6.1. Section 6.2.

Section 7.1.

Section 8.1. Section 8.2. Section 8.3. Section 8. Section 8.5. Section 8.6. Section 8.7. Section 8.8. Section 8.9. Section 8.10. Section 8.11. Section 8.12

Section 9.1 Section 9.2. Section 9.3. Section 9.4. Section 9.5.

ARTICLE VI PAYME)

Payment of Local Bond… Payment of Additional Payment:

ARTICLE VII

PREPAYMENTS

Prepayment of Local Bond…

ARTICLE VII OPERATION AND USE OF SYSTEM.

Ownership and Operation of Project and System Maintenance… Additions and Modifications Use of System… Inspection of System and Borrower’s Books and Records. Ownership of Land … Sale or Encumbrance … Collection of Revenues… No Free Service… No Competing Service Mandatory Connection…sesssssesrstenseseenseenseineenteentsrsteneteneeeneeneeee 16 Lawful Charges

ARTICLE IX

INSURANCE, DAMAGE AND DESTRUCTION

Insurance se revssenscanneesses Requirements of Policies…

Notice of Damage, Destruction and Condemnation Damage and Destruction. Condemnation and Loss of Title

18 18 19

iii -

Page

ARTICLE X

SPECIAL COVENANTS

Section 10.1. Maintenance of Existence …19

Section 10.2. Financial Records and Statements …19

Section 10.3. Certificate as to No Default …19

Section 10.4. Additional Indebtedness…20

Section 10.5. Parity Bonds …20

Section 10.6. Further Assurances…21

Section 10.7. Other Indebtedness…21

Section 10.8. Assignment by Borrower …22

Section 10.9. Davis-Bacon Act …22

Section 10.10. Operating Agreement …22

Section 10.11. American Iron and Steel …22

Section 10.12. Recordkeeping and Reporting…22

ARTICLE XI

DEFAULTS AND REMEDIES

Section 11.1. Events of Default …23

Section 11.2. Notice of Default…24

Section 11.3. Remedies on Default …24

Section 11.4. Delay and Waiver …24

Section 11.5. State Aid Intercept …24

ARTICLE XII

MISCELLANEOUS

Section 12.1. Successors and Assigns…25

Section 12.2. Amendments …25

Section 12.3. Limitation of Borrower’s Liability …25

Section 12.4. Applicable Law …25

Section 12.5. Severability …25

Section 12.6. Notices …25

Section 12.7. Right to Cure Default …26

Section 12.8. Headings …26

Section 12.9. Term of Agreement …26

Section 12.10. Commitment Letter …26

Section 12.11. Counterparts …27

Section 10.1 Section 10.2. Section 10.3. Section 10.4. Section 10.5. Section 10.6. Section 10.7. Section 10.8. Section 10.9. Section 10.10. Section 10.11. Section 10.12.

Section 11.1 Section 11.2 Section 11.3. Section 11.4. Section 11.5.

Section 12.1. Section 12.2. Section 12.3. Section 12.4. Section 12.5. Section 12.6. Section 12.7. Section 12.8. Section 12.9. Section 12.10. Section 12.11.

ARTICLE X SPECIAL. ENANTS

Maintenance of Existence… Financial Records and Statements Certificate as to No Default Additional Indebtednes Parity Bonds… Further Assurances Other Indebtedness Assignment by Borrower Davis-Bacon Act Operating Agreemen American Iron and Steel . Recordkeeping and Reporting.

ARTICLE XI DEFAULTS AND RI!

Events of Default Notice of Default. Remedies on Default Delay and Waiver … State Aid Intercept

ARTICLE XII MISCELLANEOUS

Successors and Assigns… Amendments Limitation of Borrower’s Liability Applicable Law Severability Notices … Right to Cure Default… Headings 0… Term of Agreement… Commitment Letter.

Counterparts…

ii -

iv -

EXHIBITS

Exhibit A - Form of Local Bond

Exhibit B - Project Description

Exhibit C - Project Budget

Exhibit D - Opinion of Borrower’s Bond Counsel

Exhibit E - Requisition for Disbursement

Exhibit F - Prior Bonds, Existing Parity Bonds and Springing Parity Bonds

Exhibit G - Support Agreement

Exhibit H - Form of Budget

EXHIBITS

Exhibit A - Form of Local Bond Exhibit B - Project Description

Exhibit C - Project Budget

Exhibit D - Opinion of Borrower’s Bond Counsel

Exhibit E - Requisition for Disbursement

Exhibit F - Prior Bonds, Existing Parity Bonds and Springing Parity Bonds Exhibit G - Support Agreement

Exhibit H - Form of Budget

wiv

FINANCING AGREEMENT

THIS FINANCING AGREEMENT is made as of this first day of _____, 2017,

between the VIRGINIA RESOURCES AUTHORITY, a public body corporate and a political

subdivision of the Commonwealth of Virginia (the “Authority”), as Administrator of the

VIRGINIA WATER SUPPLY REVOLVING FUND, and THE RUSSELL COUNTY

PUBLIC SERVICE AUTHORITY, a public body politic and corporate of the Commonwealth

of Virginia (the “Borrower”), and acknowledged, consented and agreed to by the COUNTY OF

RUSSELL, VIRGINIA, a political subdivision of the Commonwealth of Virginia (the

“County”).

Pursuant to Chapter 23, Title 62.1 of the Code of Virginia (1950), as amended (the

“Act”), the General Assembly created a permanent and perpetual fund known as the “Virginia

Water Supply Revolving Fund” (the “Fund”). In conjunction with the Board of Health, the

Authority administers and manages the Fund. From the Fund, the Authority from time to time

makes loans to and acquires obligations of local governments in Virginia to finance or refinance

the costs of water supply facilities within the meaning of Section 62.1-233 of the Act.

The Borrower has requested a loan from the Fund and will evidence its obligation to

repay such loan by the Local Bond the Borrower will issue and sell to the Authority, as

Administrator of the Fund. The Borrower will use the proceeds of the sale of the Local Bond to

the Authority to finance that portion of the Project Costs not being paid from other sources, all as

further set forth in the Project Budget.

ARTICLE I

DEFINITIONS

Section 1.1. Definitions. The capitalized terms contained in this Agreement and not

defined above shall have the meanings set forth below unless the context requires otherwise and

any capitalized terms not otherwise defined herein shall have the meaning assigned to such terms

in the Act:

“Additional Payments” means the payments required by Section 6.2.

“Agreement” means this Financing Agreement between the Authority and the Borrower,

together with any amendments or supplements hereto.

“Annual Administrative Fee” means the portion of the Cost of Funds specified in

Section 6.1(a)(ii) payable as an annual fee for administrative and management services

attributable to the Local Bond.

“Authorized Representative” means any member, official or employee of the Borrower

authorized by resolution, ordinance or other official act of the governing body of the Borrower to

perform the act or sign the document in question.

“Board” means the Virginia Board of Health.

FINANCING AGREEMENT

THIS FINANCING AGREEMENT is made as of this first day of __, 2017, between the VIRGINIA RESOURCES AUTHORITY, a public body corporate and a political subdivision of the Commonwealth of Virginia (the “Authority”), as Administrator of the VIRGINIA WATER SUPPLY REVOLVING FUND, and THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY, a public body politic and corporate of the Commonwealth of Virginia (the “Borrower"), and acknowledged, consented and agreed to by the COUNTY OF RUSSELL, VIRGINIA, a political subdivision of the Commonwealth of Virginia (the “County”.

Pursuant to Chapter 23, Title 62.1 of the Code of Virginia (1950), as amended (the “Act”), the General Assembly created a permanent and perpetual fund known as the “Virginia Water Supply Revolving Fund” (the “Fund”). In conjunction with the Board of Health, the Authority administers and manages the Fund. From the Fund, the Authority from time to time makes loans to and acquires obligations of local governments in Virginia to finance or refinance the costs of water supply facilities within the meaning of Section 62.1-233 of the Act.

The Borrower has requested a loan from the Fund and will evidence its obligation to repay such loan by the Local Bond the Borrower will issue and sell to the Authority, as Administrator of the Fund. The Borrower will use the proceeds of the sale of the Local Bond to the Authority to finance that portion of the Project Costs not being paid from other sources, all as further set forth in the Project Budget.

ARTICLE I

DEFINITIONS

Section 1.1, Definitions. The capitalized terms contained in this Agreement and not defined above shall have the meanings set forth below unless the context requires otherwise and any capitalized terms not otherwise defined herein shall have the meaning assigned to such terms in the Act:

“Additional Payments” means the payments required by Section 6.2.

“Agreement” means this Financing Agreement between the Authority and the Borrower, together with any amendments or supplements hereto.

“Annual Administrative Fee” means the portion of the Cost of Funds specified in Section 6.1(a)(ii) payable as an annual fee for administrative and management services attributable to the Local Bond.

“Authorized Representative” means any member, official or employee of the Borrower authorized by resolution, ordinance or other official act of the governing body of the Borrower to perform the act or sign the document in question.

“Board” means the Virginia Board of Health.

“Closing Date” means the date of the delivery of the Local Bond to the Authority.

“Commitment Letter” means the commitment letter from the Authority to the

Borrower, dated __________, 2017, and all extensions and amendments thereto.

“Consulting Engineer” means the engineer or the firm of independent consulting engineers

of recognized standing and experienced in the field of water system and sanitary engineering and

registered to do business in Virginia which is designated by the Borrower from time to time as

Borrower’s consulting engineer in accordance with Section 4.5 in a written notice to the Authority.

Such individual or firm shall be subject to the reasonable approval of the Authority. Unless and

until the Authority notifies the Borrower otherwise, any of the Borrower’s employees that are

licensed and registered as professional engineers in the Commonwealth of Virginia may serve as

Consulting Engineer under this Agreement.

“Cost of Funds” means interest, including the part thereof allocable to the Annual

Administrative Fee, payable as set forth in Section 6.1.

“County” means the County of Russell, Virginia.

“Default” means an event or condition the occurrence of which would, with the lapse of

time or the giving of notice or both, become an Event of Default.

“Department” means the Virginia Department of Health.

“Event of Default” shall have the meaning set forth in Section 11.1.

“Existing Parity Bonds” means any of the bonds, notes or other evidences of

indebtedness, as further described on Exhibit F, that on the date of the Local Bond’s issuance and

delivery were secured by or payable from a pledge of Revenues on a parity with the pledge of

Revenues securing the Local Bond.

“Fiscal Year” means the period of twelve months established by the Borrower as its

annual accounting period.

“Funding Agreement” means the Funding Agreement, dated as of the date hereof, between

the Authority and the Borrower, relating to a principal forgiveness loan from the Fund to the

Borrower.

“Local Bond” means the bond in substantially the form attached to this Financing

Agreement as Exhibit A issued by the Borrower to the Authority, as Administrator of the Fund,

pursuant to this Agreement.

“Local Bond Proceeds” means the proceeds of the sale of the Local Bond to the

Authority pursuant to this Agreement.

“Closing Date” means the date of the delivery of the Local Bond to the Authority.

“Commitment Letter” means the commitment letter from the Authority to the Borrower, dated 2017, and all extensions and amendments thereto.

“Consulting Engineer” means the engineer or the firm of independent consulting engineers of recognized standing and experienced in the field of water system and sanitary engineering and registered to do business in Virginia which is designated by the Borrower from time to time as Borrower’s consulting engineer in accordance with Section 4.5 in a written notice to the Authority. Such individual or firm shall be subject to the reasonable approval of the Authority. Unless and until the Authority notifies the Borrower otherwise, any of the Borrower’s employees that are licensed and registered as professional engineers in the Commonwealth of Virginia may serve as, Consulting Engineer under this Agreement.

“Cost of Funds” means interest, including the part thereof allocable to the Annual Administrative Fee, payable as set forth in Section 6.1.

“County” means the County of Russell, Virginia.

“Default” means an event or condition the occurrence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.

“Department” means the Virginia Department of Health. “Event of Default” shall have the meaning set forth in Section 11.1 “Existing Parity Bonds” means any of the bonds, notes or other evidences of indebtedness, as further described on Exhibit F, that on the date of the Local Bond’s issuance and

delivery were secured by or payable from a pledge of Revenues on a parity with the pledge of Revenues securing the Local Bond.

“Fiscal Year” means the period of twelve months established by the Borrower as its annual accounting period.

“Funding Agreement” means the Funding Agreement, dated as of the date here: the Authority and the Borrower, relating to a principal forgiveness loan from the Fund to the Borrower.

“Local Bond” means the bond in substantially the form attached to this Financing Agreement as Exhibit A issued by the Borrower to the Authority, as Administrator of the Fund, pursuant to this Agreement.

“Local Bond Proceeds” means the proceeds of the sale of the Local Bond to the Authority pursuant to this Agreement.

“Local Resolution” means all resolutions or ordinances adopted by the governing body

of the Borrower approving the transactions contemplated by and authorizing the execution and

delivery of this Agreement and the execution, issuance and delivery of the Local Bond.

“Net Proceeds” means the gross proceeds from any insurance recovery or condemnation

award remaining after payment of attorneys’ fees and expenses of the Authority and all other

expenses incurred in the collection of such gross proceeds.

“Net Revenues Available for Debt Service” means the Revenues less amounts necessary

to pay Operation and Maintenance Expense.

“Operating Agreement” means, collectively, any and all lease, operating or similar

agreements by and between the Borrower and the County, as the same may be amended from time

to time with the written consent of the Authority.

“Operation and Maintenance Expense” means the costs of operating and maintaining

the System determined under generally accepted accounting principles, exclusive of (i) interest

on any debt secured by or payable from Revenues, (ii) depreciation and other items not requiring

the expenditure of cash, (iii) any amounts expended for capital replacements, repairs and

maintenance not recurring annually or reserves therefor, and (iv) reserves for administration,

operation and maintenance occurring in the normal course of business.

“Opinion of Counsel” means a written opinion of recognized bond counsel, acceptable

to the Authority.

“Parity Bonds” means bonds, notes or other evidences of indebtedness of the Borrower

issued under Section 10.5.

“Prior Bonds” means any of the bonds, notes or other evidences of indebtedness, as further

described in Exhibit F, that on the date of the Local Bond’s issuance and delivery were secured by

or payable from a pledge of Revenues all or any portion of which was superior to the pledge of

Revenues securing the Local Bond.

“Project” means the particular project described in Exhibit B, the costs of the

construction, acquisition or equipping of which are to be financed or refinanced in whole or in

part with the Local Bond Proceeds.

“Project Budget” means the budget for the financing of the Project, a copy of which is

attached to this Agreement as Exhibit C, with such changes therein as may be approved in

writing by the Authority.

“Project Costs” means the costs of the construction, acquisition or equipping of the

Project, as further described in the Project Budget, and such other costs as may be approved in

writing by the Authority, provided such costs are permitted by the Act.

“Local Resolution” means all resolutions or ordinances adopted by the governing body of the Borrower approving the transactions contemplated by and authorizing the execution and delivery of this Agreement and the execution, issuance and delivery of the Local Bond.

“Net Proceeds” means the gross proceeds from any insurance recovery or condemnation award remaining after payment of attorneys’ fees and expenses of the Authority and all other expenses incurred in the collection of such gross proceeds.

“Net Revenues Available for Debt Service” means the Revenues less amounts necessary to pay Operation and Maintenance Expense.

“Operating Agreement” means, collectively, any and all lease, operating or similar agreements by and between the Borrower and the County, as the same may be amended from time to time with the written consent of the Authority.

“Operation and Maintenance Expense” means the costs of operating and maintaining the System determined under generally accepted accounting principles, exclusive of (i) interest on any debt secured by or payable from Revenues, (ii) depreciation and other items not requiring the expenditure of cash, (iii) any amounts expended for capital replacements, repairs and maintenance not recurring annually or reserves therefor, and (iv) reserves for administration, operation and maintenance occurring in the normal course of business.

“Opinion of Counsel” means a written opinion of recognized bond counsel, acceptable to the Authority.

“Parity Bonds” means bonds, notes or other evidences of indebtedness of the Borrower sued under Section 10.5.

“Prior Bonds” means any of the bonds, notes or other evidences of indebtedness, as further described in Exhibit F, that on the date of the Local Bond’s issuance and delivery were secured by or payable from a pledge of Revenues all or any portion of which was superior to the pledge of Revenues securing the Local Bond.

“Project” means the particular project described in Exhibit B, the costs of the construction, acquisition or equipping of which are to be financed or refinanced in whole or in part with the Local Bond Proceeds.

“Project Budget” means the budget for the financing of the Project, a copy of which is attached to this Agreement as Exhibit C, with such changes therein as may be approved in writing by the Authority.

“Project Costs” means the costs of the construction, acquisition or equipping of the Project, as further described in the Project Budget, and such other costs as may be approved in writing by the Authority, provided such costs are permitted by the Act.

“Qualified Independent Consultant” shall mean an independent professional consultant

having the skill and experience necessary to provide the particular certificate, report or approval

required by the provision of this Agreement in which such requirement appears, including

without limitation a Consulting Engineer, so long as such individual is not an employee of the

Borrower, and an independent certified public accountant or firm of independent certified public

accountants. Such individual or firm shall be subject to the reasonable approval of the Authority.

“Revenues” means (i) all rates, fees, rentals, charges and income properly allocable to

the System in accordance with generally accepted accounting principles or resulting from the

Borrower’s ownership, leasing or operation of the System, including but not limited to any and

all amounts payable to the Borrower pursuant to the terms and conditions of the Operating

Agreement, but excluding customer and other deposits subject to refund until such deposits have

become the Borrower’s property, (ii) the proceeds of any insurance covering business

interruption loss related to the System, (iii) interest on any money or securities relating to the

System held by or on behalf of the Borrower, (iv) amounts that may be appropriated for and paid

to the Borrower by the County under the Support Agreement or otherwise, and (v) any other

income from other sources pledged by or on behalf of the Borrower to the payment of the Local

Bond.

“Springing Parity Bonds” means any of the bonds, notes or other evidences of

indebtedness, as further described on Exhibit F, payable from or secured by a pledge of

Revenues that are deemed Subordinate Bonds as of the date hereof but which, upon satisfaction

of the “Springing Parity Test,” as defined in the respective financing agreement between the

Authority and either the Borrower or the County, pursuant to which such Springing Parity Bond

was issued, shall be deemed an Existing Parity Bond for all purposes hereof.

“Subordinate Bonds” means any of the Borrower’s bonds, notes or other evidences of

indebtedness, including but not limited to such existing bonds, notes or other evidences of

indebtedness described on Exhibit F, secured by or payable from a pledge of Revenues expressly

made subordinate to the pledge of Revenues to secure the payment of the Local Bond.

“Support Agreement” means the Support Agreement, dated the date hereof, among the

Borrower, the Authority and the County, substantially in the form of Exhibit G hereto.

“System” means all plants, systems, facilities, equipment or property, of which the

Project constitutes a part, owned, operated, leased or maintained by the Borrower and used in

connection with the collection, storage, supply, treatment or distribution of water and any other

facilities governed by the terms and conditions of the Operating Agreement.

Section 1.2. Rules of Construction. The following rules shall apply to the

construction of this Agreement unless the context requires otherwise:

(a) Singular words shall connote the plural number as well as the singular and

vice versa.

“Qualified Independent Consultant” shall mean an independent professional consultant having the skill and experience necessary to provide the particular certificate, report or approval required by the provision of this Agreement in which such requirement appears, including without limitation a Consulting Engineer, so long as such individual is not an employee of the Borrower, and an independent certified public accountant or firm of independent certified public accountants. Such individual or firm shall be subject to the reasonable approval of the Authority.

“Revenues” means (i) all rates, fees, rentals, charges and income properly allocable to the System in accordance with generally accepted accounting principles or resulting from the Borrower’s ownership, leasing or operation of the System, including but not limited to any and all amounts payable to the Borrower pursuant to the terms and conditions of the Operating ‘Agreement, but excluding customer and other deposits subject to refund until such deposits have become the Borrower’s property, (ii) the proceeds of any insurance covering business interruption loss related to the System, (iii) interest on any money or securities relating to the System held by or on behalf of the Borrower, (iv) amounts that may be appropriated for and paid to the Borrower by the County under the Support Agreement or otherwise, and (v) any other income from other sources pledged by or on behalf of the Borrower to the payment of the Local Bond.

“Springing Parity Bonds” means any of the bonds, notes or other evidences of indebtedness, as further described on Exhibit F, payable from or secured by a pledge of Revenues that are deemed Subordinate Bonds as of the date hereof but which, upon satisfaction of the “Springing Parity Test,” as defined in the respective financing agreement between the Authority and either the Borrower or the County, pursuant to which such Springing Parity Bond was issued, shall be deemed an Existing Parity Bond for all purposes hereof.

“Subordinate Bonds” means any of the Borrower’s bonds, notes or other evidences of indebtedness, including but not limited to such existing bonds, notes or other evidences of indebtedness described on Exhibit F, secured by or payable from a pledge of Revenues expressly made subordinate to the pledge of Revenues to secure the payment of the Local Bond.

“Support Agreement” means the Support Agreement, dated the date hereof, among the Borrower, the Authority and the County, substantially in the form of Exhibit G hereto.

“System” means all plants, systems, facilities, equipment or property, of which the Project constitutes a part, owned, operated, leased or maintained by the Borrower and used in connection with the collection, storage, supply, treatment or distribution of water and any other facilities governed by the terms and conditions of the Operating Agreement.

Section 1.2. Rules of Construction. The following rules shall apply to the

construction of this Agreement unless the context requires otherwise:

(a) Singular words shall connote the plural number as well as the singular and vice versa.

(b) All references in this Agreement to particular Sections or Exhibits are

references to Sections or Exhibits of this Agreement unless otherwise indicated.

for convenience of reference and shall not constitute a part of this Agreement nor shall they

affect its meaning, construction or effect.

ARTICLE II

REPRESENTATIONS

Section 2.1. Representations by Borrower. The Borrower makes the following

representations as the basis for its undertakings under this Agreement:

(a) The Borrower is a duly created and validly existing “local government”

(as defined in Section 62.1-233 of the Act) of the Commonwealth of Virginia and is vested with

the rights and powers conferred upon it by Virginia law.

(b) The Borrower has full right, power and authority to (i) adopt the Local

Resolution and execute and deliver this Agreement, the Support Agreement and the other

documents related thereto, (ii) issue, sell and deliver the Local Bond to the Authority, as

Administrator of the Fund, (iii) own and operate the System, (iv) fix, charge and collect charges

for the use of and for the services furnished by the System, (v) construct, acquire or equip the

Project (as described in Exhibit B) and finance the Project Costs by borrowing money for such

purpose pursuant to this Agreement and the issuance of the Local Bond, (vi) pledge the

Revenues of the System to the payment of the Local Bond, and (vii) carry out and consummate

all of the transactions contemplated by the Local Resolution, this Agreement, the Support

Agreement and the Local Bond.

authorized by the Local Resolution and are in substantially the same form as presented to the

governing body of the Borrower at its meeting at which the Local Resolution was adopted.

(d) All governmental permits, licenses, registrations, certificates,

authorizations and approvals required to have been obtained as of the date of the delivery of this

Agreement have been obtained for (i) the Borrower’s adoption of the Local Resolution, (ii) the

execution and delivery by the Borrower of this Agreement, the Support Agreement and the Local

Bond, (iii) the performance and enforcement of the obligations of the Borrower thereunder,

(iv) the acquisition, construction, equipping, occupation, operation and use of the Project, and (v)

the operation and use of the System. The Borrower knows of no reason why any such required

governmental permits, licenses, registrations, certificates, authorizations and approvals not

obtained as of the date hereof cannot be obtained as needed.

(e) This Agreement and the Support Agreement have been executed and

delivered by duly authorized officials of the Borrower and constitute a legal, valid and binding

obligations of the Borrower enforceable against the Borrower in accordance with their terms.

(b) All references in this Agreement to particular Sections or Exhibits are references to Sections or Exhibits of this Agreement unless otherwise indicated.

(©) The headings and table of contents as used in this Agreement are solely for convenience of reference and shall not constitute a part of this Agreement nor shalll they affect its meaning, construction or effect.

ARTICLE II REPRESENTATIONS

Section 2.1. Representations by Borrower. The Borrower makes the following representations as the basis for its undertakings under this Agreement:

(a) The Borrower is a duly created and validly existing “local government” (as defined in Section 62.1-233 of the Act) of the Commonwealth of Virginia and is vested with the rights and powers conferred upon it by Virginia law.

(b) The Borrower has full right, power and authority to (i) adopt the Local Resolution and execute and deliver this Agreement, the Support Agreement and the other documents related thereto, (ii) issue, sell and deliver the Local Bond to the Authority, as Administrator of the Fund, (iii) own and operate the System, (iv) fix, charge and collect charges for the use of and for the services furnished by the System, (v) construct, acquire or equip the Project (as described in Exhibit B) and finance the Project Costs by borrowing money for such purpose pursuant to this Agreement and the issuance of the Local Bond, (vi) pledge the Revenues of the System to the payment of the Local Bond, and (vii) carry out and consummate all of the transactions contemplated by the Local Resolution, this Agreement, the Support Agreement and the Local Bond.

(©) This Agreement, the Support Agreement and the Local Bond were duly authorized by the Local Resolution and are in substantially the same form as presented to the governing body of the Borrower at its meeting at which the Local Resolution was adopted.

(4) All governmental permits, licenses, registrations, certificates, authorizations and approvals required to have been obtained as of the date of the delivery of this, Agreement have been obtained for (i) the Borrower’s adoption of the Local Resolution, (ii) the execution and delivery by the Borrower of this Agreement, the Support Agreement and the Local Bond, (iii) the performance and enforcement of the obligations of the Borrower thereunder,

(iv) the acquisition, construction, equipping, occupation, operation and use of the Project, and (v) the operation and use of the System, The Borrower knows of no reason why any such required governmental permits, licenses, registrations, certificates, authorizations and approvals not obtained as of the date hereof cannot be obtained as needed.

© _ This Agreement and the Support Agreement have been executed and delivered by duly authorized officials of the Borrower and constitute a legal, valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their terms.

(f) When executed and delivered in accordance with the Local Resolution and

this Agreement, the Local Bond will have been executed and delivered by duly authorized

officials of the Borrower and will constitute a legal, valid and binding limited obligation of the

Borrower enforceable against the Borrower in accordance with its terms.

(g) The issuance of the Local Bond and the execution and delivery of this

Agreement and the Support Agreement and the performance by the Borrower of its obligations

thereunder are within the powers of the Borrower and will not conflict with, or constitute a

breach or result in a violation of, (i) to the best of the Borrower’s knowledge, any Federal, or

Virginia constitutional or statutory provision, including the Borrower’s charter or articles of

incorporation, if any, (ii) any agreement or other instrument to which the Borrower is a party or

by which it is bound or (iii) any order, rule, regulation, decree or ordinance of any court,

government or governmental authority having jurisdiction over the Borrower or its property.

(h) The Borrower is not in default in the payment of the principal of or

interest on any of its indebtedness for borrowed money and is not in default under any instrument

under and subject to which any indebtedness for borrowed money has been incurred. No event

or condition has happened or existed, or is happening or existing, under the provisions of any

such instrument, including but not limited to this Agreement and the Support Agreement, which

constitutes, or which, with notice or lapse of time, or both, would constitute an event of default

thereunder.

(i) The Borrower (i) to the best of the Borrower’s knowledge, is not in

violation of any existing law, rule or regulation applicable to it in any way which would have a

material adverse effect on its financial condition or its ability to perform its obligations under

this Agreement, the Support Agreement or the Local Bond and (ii) is not in default under any

indenture, mortgage, deed of trust, lien, lease, contract, note, order, judgment, decree or other

agreement, instrument or restriction of any kind to which the Borrower is a party or by which it

is bound or to which any of its assets is subject, which would have a material adverse effect on

its financial condition or its ability to perform its obligations under this Agreement, the Support

Agreement or the Local Bond. The execution and delivery by the Borrower of this Agreement,

the Support Agreement or the Local Bond and the compliance with the terms and conditions

thereof will not conflict with or result in a breach of or constitute a default under any of the

foregoing.

(j) There are not pending nor, to the best of the Borrower’s knowledge,

threatened against the Borrower, any actions, suits, proceedings or investigations of a legal,

equitable, regulatory, administrative or legislative nature, (i) affecting the creation, organization

or existence of the Borrower or the title of its officers to their respective offices, (ii) seeking to

prohibit, restrain or enjoin the approval, execution, delivery or performance of the Local

Resolution, this Agreement, the Support Agreement or the Local Bond or the issuance or

delivery of the Local Bond, (iii) in any way contesting or affecting the validity or enforceability

of the Local Resolution, this Agreement, the Support Agreement, the Local Bond or any

agreement or instrument relating to any of the foregoing, (iv) in which a judgment, order or

resolution may have a material adverse effect on the Borrower or its business, assets, condition

(financial or otherwise), operations or prospects or on its ability to perform its obligations under

the Local Resolution, this Agreement, the Support Agreement or the Local Bond, (v) in any way

(f) When executed and delivered in accordance with the Local Resolution and this Agreement, the Local Bond will have been executed and delivered by duly authorized officials of the Borrower and will constitute a legal, valid and binding limited obligation of the Borrower enforceable against the Borrower in accordance with its terms.

(g) The issuance of the Local Bond and the execution and delivery of this, Agreement and the Support Agreement and the performance by the Borrower of its obligations thereunder are within the powers of the Borrower and will not conflict with, or constitute a breach or result in a violation of, (i) to the best of the Borrower’s knowledge, any Federal, or Virginia constitutional or statutory provision, including the Borrower’s charter or articles of incorporation, if any, (ii) any agreement or other instrument to which the Borrower is a party or by which it is bound or (iii) any order, rule, regulation, decree or ordinance of any court, government or governmental authority having jurisdiction over the Borrower or its property.

(h) _ The Borrower is not in default in the payment of the principal of or interest on any of its indebtedness for borrowed money and is not in default under any instrument under and subject to which any indebtedness for borrowed money has been incurred. No event or condition has happened or existed, or is happening or existing, under the provisions of any such instrument, including but not limited to this Agreement and the Support Agreement, which constitutes, or which, with notice or lapse of time, or both, would constitute an event of default thereunder.

(i) The Borrower (i) to the best of the Borrower’s knowledge, is not in violation of any existing law, rule or regulation applicable to it in any way which would have a material adverse effect on its financial condition or its ability to perform its obligations under this Agreement, the Support Agreement or the Local Bond and (ii) is not in default under any indenture, mortgage, deed of trust, lien, lease, contract, note, order, judgment, decree or other agreement, instrument or restriction of any kind to which the Borrower is a party or by which it is bound or to which any of its assets is subject, which would have a material adverse effect on its financial condition or its ability to perform its obligations under this Agreement, the Support ‘Agreement or the Local Bond. The execution and delivery by the Borrower of this Agreement, the Support Agreement or the Local Bond and the compliance with the terms and conditions thereof will not conflict with or result in a breach of or constitute a default under any of the foregoing.

(j) There are not pending nor, to the best of the Borrower’s knowledge, threatened against the Borrower, any actions, suits, proceedings or investigations of a legal, equitable, regulatory, administrative or legislative nature, (i) affecting the creation, organization or existence of the Borrower or the title of its officers to their respective offices, (ii) seeking to prohibit, restrain or enjoin the approval, execution, delivery or performance of the Local Resolution, this Agreement, the Support Agreement or the Local Bond or the issuance or delivery of the Local Bond, (iii) in any way contesting or affecting the validity or enforceability of the Local Resolution, this Agreement, the Support Agreement, the Local Bond or any agreement or instrument relating to any of the foregoing, (iv) in which a judgment, order or resolution may have a material adverse effect on the Borrower or its business, assets, condition (financial or otherwise), operations or prospects or on its ability to perform its obligations under the Local Resolution, this Agreement, the Support Agreement or the Local Bond, (v) in any way

affecting or contesting the undertaking of the Project, or (vi) contesting or challenging the power

of the Borrower to pledge the Revenues to the payment of the Local Bond.

(k) There have been no defaults by any contractor or subcontractor under any

contract made by the Borrower in connection with the construction or equipping of the Project.

(l) No material adverse change has occurred in the financial condition of the

Borrower as indicated in the financial statements, applications and other information furnished to

the Authority.

(m) Except as may otherwise be approved by the Authority or permitted by the

terms of this Agreement, the System at all times is and will be owned by the Borrower and will

not be operated or controlled by any other entity or person.

(n) There is no indebtedness of the Borrower secured by or payable from a

pledge of Revenues on a parity with or prior to the lien of the pledge of Revenues securing the

Local Bond except any Existing Parity Bonds, Springing Parity Bonds or Prior Bonds set forth

on Exhibit F.

(o) No Event of Default or Default has occurred and is continuing.

(p) The Operating Agreement is in full force and effect; no default or event of

default has occurred and is continuing under the Operating Agreement; and the Borrower is not

currently aware of any fact or circumstance that would have an adverse impact on the

Borrower’s ability to set rates, to receive payments, or to exercise any other rights and remedies

available to the Borrower, under or pursuant to the Operating Agreement.

ARTICLE III

ISSUANCE AND DELIVERY OF THE LOCAL BOND

Section 3.1. Loan to Borrower and Purchase of the Local Bond. The Borrower

agrees to borrow from the Fund and the Authority agrees to lend to the Borrower, from the Fund,

the principal amount equal to the sum of the principal disbursements made pursuant to

Section 4.1, but not to exceed $_____, for the purposes herein set forth, a portion of which may

be made from federal financial assistance. The Borrower’s obligation shall be evidenced by the

Local Bond, which shall be in substantially the form of Exhibit A attached hereto and made a

part hereof and delivered to the Authority, as Administrator of the Fund, on the Closing Date.

The Local Bond shall be in the original principal amount of the loan and shall mature, bear a Cost

of Funds and be payable as hereinafter provided.

Section 3.2. Conditions Precedent to Purchase of the Local Bond. The Authority

shall not be required to make the loan to the Borrower and purchase the Local Bond unless the

Authority shall have received the following, all in form and substance satisfactory to the

Authority:

(a) The Local Bond, the Funding Agreement and the Support Agreement.

affecting or contesting the undertaking of the Project, or (vi) contesting or challenging the power of the Borrower to pledge the Revenues to the payment of the Local Bond.

(k) There have been no defaults by any contractor or subcontractor under any contract made by the Borrower in connection with the construction or equipping of the Project.

(1) No material adverse change has occurred in the financial condition of the Borrower as indicated in the financial statements, applications and other information furnished to the Authority.

(m) Except as may otherwise be approved by the Authority or permitted by the terms of this Agreement, the System at all times is and will be owned by the Borrower and will not be operated or controlled by any other entity or person.

(n) There is no indebtedness of the Borrower secured by or payable from a pledge of Revenues on a parity with or prior to the lien of the pledge of Revenues securing the Local Bond except any Existing Parity Bonds, Springing Parity Bonds or Prior Bonds set forth on Exhibit F.

(0) No Event of Default or Default has occurred and is continuing.

(p) The Operating Agreement is in full force and effect; no default or event of default has occurred and is continuing under the Operating Agreement; and the Borrower is not currently aware of any fact or circumstance that would have an adverse impact on the Borrower’s ability to set rates, to receive payments, or to exercise any other rights and remedies available to the Borrower, under or pursuant to the Operating Agreement.

ARTICLE II ISSUANCE AND DELIVERY OF THE LOCAL BOND

Section 3.1. Loan to Borrower and Purchase of the Local Bond. The Borrower agrees to borrow from the Fund and the Authority agrees to lend to the Borrower, from the Fund, the principal amount equal to the sum of the principal disbursements made pursuant to Section 4.1, but not to exceed $_, for the purposes herein set forth, a portion of which may be made from federal financial assistance. The Borrower’s obligation shall be evidenced by the Local Bond, which shall be in substantially the form of Exhibit A attached hereto and made a part hereof and delivered to the Authority, as Administrator of the Fund, on the Closing Date. The Local Bond shall be in the original principal amount of the loan and shall mature, bear a Cost of Funds and be payable as hereinafter provided.

Section 3.2. Conditions Precedent to Purchase of the Local Bond, The Authority shall not be required to make the loan to the Borrower and purchase the Local Bond unless the Authority shall have received the following, all in form and substance satisfactory to the Authority:

(a) The Local Bond, the Funding Agreement and the Support Agreement.

(b) A certified copy of the Local Resolution.

forth in Section 2.1 and such other matters as the Authority may reasonably require.

(d) A closing certificate from the Department certifying that the Project is in

compliance with all federal and state laws and project requirements applicable to the Fund.

(e) A certificate of the Consulting Engineer estimating the total Project Costs

to be financed with the Local Bond Proceeds, which estimate is in an amount and otherwise

compatible with the financing plan described in the Project Budget.

(f) A certificate of the Consulting Engineer to the effect that in the opinion of

the Consulting Engineer (i) the Project will be a part of the System, and (ii) the Local Bond

Proceeds and funds available from the other sources specified in the Project Budget will be

sufficient to pay the estimated Project Costs.

(g) A certificate, including supporting documentation, of a Qualified

Independent Consultant that in the opinion of the Qualified Independent Consultant during the

first two complete Fiscal Years of the Borrower following completion of the Project, the

projected Net Revenues Available for Debt Service will satisfy the rate covenant made by the

Borrower in Section 5.1(a). In providing this certificate, the Qualified Independent Consultant

may take into consideration future System rate increases, provided that such rate increases have

been duly approved by the governing body of the Borrower and any other person or entity

required to give approval for the rate increase to become effective. In addition, the Qualified

Independent Consultant may take into consideration additional future revenues to be derived

under existing contractual arrangements entered into by the Borrower and from reasonable

estimates of growth in the consumer base of the Borrower.

(h) A certificate of the Consulting Engineer as to the date the Borrower is

expected to complete the acquisition, construction and equipping of the Project.

(i) Evidence satisfactory to the Authority that all governmental permits,

licenses, registrations, certificates, authorizations and approvals for the Project required to have

been obtained as of the date of the delivery of this Agreement have been obtained and a

statement of the Consulting Engineer that he or she knows of no reason why any future required

governmental permits, licenses, registrations, certificates, authorizations and approvals cannot be

obtained as needed.

(j) Evidence satisfactory to the Authority that the Borrower has obtained or

has made arrangements satisfactory to the Authority to obtain any funds or other financing for

the Project as contemplated in the Project Budget.

(k) Evidence satisfactory to the Authority that the Borrower has performed

and satisfied all of the terms and conditions contained in this Agreement to be performed and

satisfied by it as of such date.

(b) A certified copy of the Local Resolution.

(©) A certificate of appropriate officials of the Borrower as to the matters set forth in Section 2.1 and such other matters as the Authority may reasonably require.

(d) A closing certificate from the Department certifying that the Project is in compliance with all federal and state laws and project requirements applicable to the Fund.

(€) _ A certificate of the Consulting Engineer estimating the total Project Costs to be financed with the Local Bond Proceeds, which estimate is in an amount and otherwise compatible with the financing plan described in the Project Budget.

(0) A certificate of the Consulting Engineer to the effect that in the opinion of the Consulting Engineer (i) the Project will be a part of the System, and (ii) the Local Bond Proceeds and funds available from the other sources specified in the Project Budget will be sufficient to pay the estimated Project Costs.

(g) A certificate, including supporting documentation, of a Qualified Independent Consultant that in the opinion of the Qualified Independent Consultant during the first two complete Fiscal Years of the Borrower following completion of the Project, the projected Net Revenues Available for Debt Service will satisfy the rate covenant made by the Borrower in Section 5.1(a). In providing this certificate, the Qualified Independent Consultant may take into consideration future System rate increases, provided that such rate increases have been duly approved by the governing body of the Borrower and any other person or entity required to give approval for the rate increase to become effective. In addition, the Qualified Independent Consultant may take into consideration additional future revenues to be derived under existing contractual arrangements entered into by the Borrower and from reasonable estimates of growth in the consumer base of the Borrower.

(h) A certificate of the Consulting Engineer as to the date the Borrower is, expected to complete the acquisition, construction and equipping of the Project.

(i) Evidence satisfactory to the Authority that all governmental permits, licenses, registrations, certificates, authorizations and approvals for the Project required to have been obtained as of the date of the delivery of this Agreement have been obtained and a statement of the Consulting Engineer that he or she knows of no reason why any future required governmental permits, licenses, registrations, certificates, authorizations and approvals cannot be obtained as needed.

(i) Evidence satisfactory to the Authority that the Borrower has obtained or has made arrangements satisfactory to the Authority to obtain any funds or other financing for the Project as contemplated in the Project Budget.

(k) Evidence satisfactory to the Authority that the Borrower has performed and satisfied all of the terms and conditions contained in this Agreement to be performed and satisfied by it as of such date.

(l) An Opinion of Counsel, substantially in the form of Exhibit D, addressed

to the Authority.

(m) An opinion of counsel to the Borrower in form and substance reasonably

satisfactory to the Authority.

(n) Evidence satisfactory to the Authority that the Borrower has complied

with the insurance provisions set forth in Sections 9.1 and 9.2 hereof.

(o) Evidence that the Borrower has satisfied all conditions precedent to the

issuance of the Local Bond as a “Parity Bond” under the financing agreements for the Existing

Parity Bonds.

(p) A report of the Borrower and the County as to the status of each of the

Springing Parity Bonds meeting the “Springing Parity Test,” as defined in the respective

financing agreement between the Authority and either the Borrower or the County for each of the

Springing Parity Bonds.

(q) Evidence satisfactory to the Authority that the Operating Agreement is in

full force and effect and that it is a binding and enforceable agreement as to each of the Borrower

and the other parties to such agreement.

® Such other documentation, certificates and opinions as the Authority, the

Board or the Department may reasonably require, including an opinion from counsel acceptable

to the Authority that the Support Agreement is valid and enforceable against the County, subject

to usual and customary qualifications.

ARTICLE IV

USE OF LOCAL BOND PROCEEDS AND CONSTRUCTION OF PROJECT

Section 4.1. Application of Proceeds.

(a) The Borrower agrees to apply the Local Bond Proceeds solely and exclusively to

the payment, or the reimbursement of the Borrower for the payment, of Project Costs and further

agrees to exhibit to the Board or the Authority receipts, vouchers, statements, bills of sale or

other evidence of the actual payment of such Project Costs. The Authority shall disburse money

from the Fund to or for the account of the Borrower not more frequently than once each calendar

month (unless otherwise agreed by the Authority and the Borrower) upon receipt by the

Authority (with a copy to be furnished to the Board) of the following:

(1) A requisition (upon which the Authority, the Board and the Department

shall be entitled to rely) signed by an Authorized Representative and containing all information

called for by, and otherwise being in the form of, Exhibit E to this Agreement;

() An Opinion of Counsel, substantially in the form of Exhibit D, addressed to the Authority.

(m) An opinion of counsel to the Borrower in form and substance reasonably satisfactory to the Authority.

(n) Evidence satisfactory to the Authority that the Borrower has complied with the insurance provisions set forth in Sections 9.1 and 9.2 hereof.

(0) Evidence that the Borrower has satisfied all conditions precedent to the issuance of the Local Bond as a “Parity Bond” under the financing agreements for the Existing Parity Bonds.

(p) A report of the Borrower and the County as to the status of each of the Springing Parity Bonds meeting the “Springing Parity Test,” as defined in the respective financing agreement between the Authority and either the Borrower or the County for each of the Springing Parity Bonds,

(q) Evidence satisfactory to the Authority that the Operating Agreement is in full force and effect and that it is a binding and enforceable agreement as to each of the Borrower and the other parties to such agreement.

() Such other documentation, certificates and opinions as the Authority, the Board or the Department may reasonably require, including an opinion from counsel acceptable to the Authority that the Support Agreement is valid and enforceable against the County, subject to usual and customary qualifications.

ARTICLE IV USE OF LOCAL BOND PROCEEDS AND CONSTRUCTION OF PROJECT.

Section 4.1. Application of Proceeds.

(a) The Borrower agrees to apply the Local Bond Proceeds solely and exclusively to the payment, or the reimbursement of the Borrower for the payment, of Project Costs and further agrees to exhibit to the Board or the Authority receipts, vouchers, statements, bills of sale or other evidence of the actual payment of such Project Costs. The Authority shall disburse money from the Fund to or for the account of the Borrower not more frequently than once each calendar month (unless otherwise agreed by the Authority and the Borrower) upon receipt by the Authority (with a copy to be furnished to the Board) of the following:

(1) A requisition (upon which the Authority, the Board and the Department shall be entitled to rely) signed by an Authorized Representative and containing all information called for by, and otherwise being in the form of, Exhibit E to this Agreement;

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(2) If any requisition includes an item for payment for labor or to contractors,

builders or materialmen,

(i) a certificate, signed by the Consulting Engineer, stating that such

work was actually performed or such materials, supplies or equipment

were actually furnished or installed in or about the construction of the

Project; and

(ii) a certificate, signed by an Authorized Representative, stating either

that such materials, supplies or equipment are not subject to any lien or

security interest or that such lien or security interest will be released or

discharged upon payment of the requisition.

Upon receipt of each such requisition and accompanying certificate or certificates and

approval thereof by the Board, the Authority shall disburse Local Bond Proceeds hereunder to or

for the account of the Borrower in accordance with such requisition in an amount and to the

extent approved by the Board and shall note the date and amount of each such disbursement on a

schedule of principal disbursements to be included on the Local Bond. The Authority shall have

no obligation to disburse any such Local Bond Proceeds if the Borrower is in default hereunder

nor shall the Board have any obligation to approve any requisition if the Borrower is not in

compliance with the terms of this Agreement.

(b) The Borrower shall comply with all applicable State laws, including but not

limited to, the Virginia Public Procurement Act, as amended, regarding the awarding and

performance of public construction contracts. Except as may otherwise be approved by the

Board, disbursements shall be held at ninety-five percent (95%) of the maximum authorized

amount of the Local Bond to ensure satisfactory completion of the Project. Upon receipt from

the Borrower of the certificate specified in Section 4.2 and a final requisition detailing all

retainages to which the Borrower is then entitled, the Authority, to the extent approved by the

Board and subject to the provisions of this Section and Section 4.2, will disburse to or for the

account of the Borrower Local Bond Proceeds to the extent of such approval.

The Authority shall have no obligation to disburse Local Bond Proceeds in excess of the

amount necessary to pay for approved Project Costs. If principal disbursements up to the

maximum authorized amount of the Local Bond are not made, principal installments due on the

Local Bond shall be reduced in accordance with Section 6.1.

Section 4.2. Agreement to Accomplish Project. The Borrower agrees to cause the

Project to be acquired, constructed, expanded, renovated or equipped as described in Exhibit B

and in accordance with the Project Budget and the plans, specifications and designs prepared by

the Consulting Engineer and approved by the Board. The Borrower shall use its best efforts to

complete the Project by the date set forth in the certificate provided to the Authority pursuant to

Section 3.2(h). All plans, specifications and designs shall be approved by all applicable

regulatory agencies. The Borrower agrees to maintain complete and accurate books and records

of the Project Costs and permit the Authority and the Board through their duly authorized

representatives to inspect such books and records at any reasonable time. The Borrower and the

(2) Ifany requisition includes an item for payment for labor or to contractors, builders or materialmen,

(i) a certificate, signed by the Consulting Engineer, stating that such work was actually performed or such materials, supplies or equipment were actually furnished or installed in or about the construction of the Project; and

(ii) a certificate, signed by an Authorized Representative, stating either that such materials, supplies or equipment are not subject to any lien or security interest or that such lien or security interest will be released or discharged upon payment of the requisition.

Upon receipt of each such requisition and accompanying certificate or certificates and approval thereof by the Board, the Authority shall disburse Local Bond Proceeds hereunder to or for the account of the Borrower in accordance with such requisition in an amount and to the extent approved by the Board and shall note the date and amount of each such disbursement on a schedule of principal disbursements to be included on the Local Bond. The Authority shall have no obligation to disburse any such Local Bond Proceeds if the Borrower is in default hereunder nor shall the Board have any obligation to approve any requisition if the Borrower is not in compliance with the terms of this Agreement.

(b) The Borrower shall comply with all applicable State laws, including but not limited to, the Virginia Public Procurement Act, as amended, regarding the awarding and performance of public construction contracts. Except as may otherwise be approved by the Board, disbursements shall be held at ninety-five percent (95%) of the maximum authorized amount of the Local Bond to ensure satisfactory completion of the Project. Upon receipt from the Borrower of the certificate specified in Section 4.2 and a final requisition detailing all retainages to which the Borrower is then entitled, the Authority, to the extent approved by the Board and subject to the provisions of this Section and Section 4.2, will disburse to or for the account of the Borrower Local Bond Proceeds to the extent of such approval.

The Authority shall have no obligation to disburse Local Bond Proceeds in excess of the amount necessary to pay for approved Project Costs. If principal disbursements up to the maximum authorized amount of the Local Bond are not made, principal installments due on the Local Bond shall be reduced in accordance with Section 6.1.

Section 4.2. Agreement to Accomplish Project. The Borrower agrees to cause the Project to be acquired, constructed, expanded, renovated or equipped as described in Exhibit B and in accordance with the Project Budget and the plans, specifications and designs prepared by the Consulting Engineer and approved by the Board. The Borrower shall use its best efforts to complete the Project by the date set forth in the certificate provided to the Authority pursuant to Section 3.2(h). All plans, specifications and designs shall be approved by all applicable regulatory agencies. The Borrower agrees to maintain complete and accurate books and records of the Project Costs and permit the Authority and the Board through their duly authorized representatives to inspect such books and records at any reasonable time. ‘The Borrower and the

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Authority, with the consent of the Board, may amend the description of the Project set forth in

Exhibit B.

When the Project has been completed, the Borrower shall promptly deliver to the

Authority and the Board a certificate signed by an Authorized Representative of the Borrower

and by the Consulting Engineer stating (i) that the Project has been completed substantially in

accordance with this Section, the plans and specifications as amended from time to time, as

approved by the Board, and in substantial compliance with all material applicable laws,

ordinances, rules and regulations, (ii) the date of such completion, (iii) that all certificates of

occupancy or other material permits necessary for the Project’s use, occupancy and operation

have been issued or obtained, and (iv) the amount, if any, to be reserved for payment of Project

Costs.

Section 4.3. Permits. The Borrower, at its sole cost and expense, shall comply with,

and shall obtain all permits, consents and approvals required by local, state or federal laws,

ordinances, rules, regulations or requirements in connection with the acquisition, construction,

equipping, occupation, operation or use of the Project. The Borrower shall, upon request,

promptly furnish to the Authority and the Board copies of all such permits, consents and

approvals. The Borrower shall also comply with all lawful program or procedural guidelines or

requirements duly promulgated and amended from time to time by the Board in connection with

the acquisition, construction, equipping, occupation, operation or use of projects financed from

the Fund under the Act. The Borrower shall also comply in all respects with all applicable

federal laws, regulations and other requirements relating to or arising out of or in connection

with the Project and the funding thereof by the Authority, including, but not limited to, the

federal “crosscutting” requirements identified in Schedule A of the Commitment Letter. Where

noncompliance with such requirements is determined by the Authority or the Board, the issue

shall be referred to the proper federal authority or agency for consultation or enforcement action.

Section 4.4. Construction Contractors. Each construction contractor employed in the

accomplishment of the Project shall be required in the construction contract to furnish a

performance bond and a payment bond each in an amount equal to one hundred percent (100%)

of the particular contract price. Such bonds shall list the Borrower, the Fund, the Authority and

the Board as beneficiaries. Each contractor shall be required to maintain during the construction

period covered by the particular construction contract builder’s risk insurance, workers’

compensation insurance, public liability insurance, property damage insurance and vehicle

liability insurance in amounts and on terms satisfactory to the Consulting Engineer. Upon

request of the Authority or the Board, the Borrower shall cause each contractor to furnish

evidence of such bonds and insurance to the Authority and the Board.

Section 4.5. Engineering Services. The Borrower shall retain a Consulting Engineer

to provide engineering services covering the operation of the System and the supervision and

inspection of the construction of the Project. The Consulting Engineer shall certify to the Fund,

the Authority and the Board as to the various stages of the completion of the Project as

disbursements of Local Bond Proceeds are requested and shall upon completion of the Project

provide to the Fund, the Authority and the Board the certificates required by Sections 4.1 and

4.2.

Authority, with the consent of the Board, may amend the description of the Project set forth in Exhibit B.

When the Project has been completed, the Borrower shall promptly deliver to the Authority and the Board a certificate signed by an Authorized Representative of the Borrower and by the Consulting Engineer stating (i) that the Project has been completed substantially in accordance with this Section, the plans and specifications as amended from time to time, as approved by the Board, and in substantial compliance with all material applicable laws, ordinances, rules and regulations, (ii) the date of such completion, (iii) that all certificates of occupancy or other material permits necessary for the Project’s use, occupancy and operation have been issued or obtained, and (iv) the amount, if any, to be reserved for payment of Project Costs.

Section 4.3. Permits. The Borrower, at its sole cost and expense, shall comply with, and shall obtain all permits, consents and approvals required by local, state or federal laws, ordinances, rules, regulations or requirements in connection with the acquisition, construction, equipping, occupation, operation or use of the Project. The Borrower shall, upon request, promptly furnish to the Authority and the Board copies of all such permits, consents and approvals. The Borrower shall also comply with all lawful program or procedural guidelines or requirements duly promulgated and amended from time to time by the Board in connection with the acquisition, construction, equipping, occupation, operation or use of projects financed from the Fund under the Act. The Borrower shall also comply in all respects with all applicable federal laws, regulations and other requirements relating to or arising out of or in connection with the Project and the funding thereof by the Authority, including, but not limited to, the federal “crosscutting” requirements identified in Schedule A of the Commitment Letter. Where noncompliance with such requirements is determined by the Authority or the Board, the issue shall be referred to the proper federal authority or agency for consultation or enforcement action.

Section 4.4. Construction Contractors. Each construction contractor employed in the accomplishment of the Project shall be required in the construction contract to furnish a performance bond and a payment bond each in an amount equal to one hundred percent (100%) of the particular contract price. Such bonds shall list the Borrower, the Fund, the Authority and the Board as beneficiaries. Each contractor shall be required to maintain during the construction period covered by the particular construction contract builder’s risk insurance, workers’ compensation insurance, public liability insurance, property damage insurance and vehicle liability insurance in amounts and on terms satisfactory to the Consulting Engineer. Upon request of the Authority or the Board, the Borrower shall cause each contractor to furnish evidence of such bonds and insurance to the Authority and the Board.

Section 4.5. Engineering Services. The Borrower shall retain a Consulting Engineer to provide engineering services covering the operation of the System and the supervision and inspection of the construction of the Project. The Consulting Engineer shall certify to the Fund, the Authority and the Board as to the various stages of the completion of the Project as disbursements of Local Bond Proceeds are requested and shall upon completion of the Project provide to the Fund, the Authority and the Board the certificates required by Sections 4.1 and 4.2.

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Section 4.6. Borrower Required to Complete Project. If the Local Bond Proceeds

are not sufficient to pay in full the cost of the Project, the Borrower will complete the Project at

its own expense and shall not be entitled to any reimbursement therefor from the Fund, the

Authority or the Board or any abatement, diminution or postponement of the Borrower’s

payments under the Local Bond or this Agreement.

ARTICLE V

PLEDGE, REVENUES AND ANNUAL BUDGET

Section 5.1. Pledge of Revenues. Subject to the Borrower’s right to apply Revenues to

the payment of Operation and Maintenance Expense, the Revenues are hereby pledged to the

Authority, as Administrator of the Fund, to secure the payment of the principal of and the Cost of

Funds on the Local Bond and the payment and performance of the Borrower’s obligations under

this Agreement. This pledge shall be valid and binding from and after the execution and delivery of

this Agreement. The Revenues, as received by the Borrower, shall immediately be subject to the

lien of this pledge without any physical delivery of them or further act. The lien of this pledge of

the Revenues is on a parity with the lien of the pledge securing the Existing Parity Bonds. The lien

of this pledge shall, subject to the right of the Borrower to apply Revenues to the payment of

Operation and Maintenance Expense, have priority over all other obligations and liabilities of the

Borrower, and the lien of this pledge shall be valid and binding against all parties having claims of

any kind against the Borrower regardless of whether such parties have notice of this pledge.

(a) The Borrower covenants and agrees that it will fix and collect rates, fees and

other charges for the use of and for services furnished or to be furnished by the System, and will

from time to time revise such rates, fees and other charges so that in each Fiscal Year the Net

Revenues Available for Debt Service will equal at least 100% of the amount required during the

Fiscal Year to pay the principal of and the Cost of Funds on the Local Bond, the Additional

Payments and all other indebtedness of the Borrower secured by or payable from Revenues,

including without limitation, indebtedness under leases which are treated as capital leases under

generally accepted accounting principles. If, for any reason, the Revenues are insufficient to satisfy

the foregoing covenant, the Borrower shall within ninety (90) days adjust and increase its rates, fees

and other charges or reduce its Operation and Maintenance Expense so as to provide sufficient

Revenues to satisfy such requirement.

(b) On or before the last day of each Fiscal Year, the Borrower shall review the

adequacy of its rates, fees and other charges for the next Fiscal Year, and, if such review indicates

the Borrower’s rates, fees and other charges are insufficient to satisfy the rate covenant in

subsection (a) of this Section, the Borrower shall promptly take appropriate action to increase its

rates, fees and other charges or reduce its Operation and Maintenance Expense to cure any

deficiency.

Section 5.2. Annual Budget. The Borrower agrees before the first day of each Fiscal

Year to adopt a budget for such Fiscal Year containing all information called for by, and otherwise

being in the form of, Exhibit H to this Agreement, for such Fiscal Year setting forth a schedule of

the rates, fees and other charges to be imposed by the Borrower, the Revenues estimated to be

Section 4.6. Borrower Required to Complete Project. If the Local Bond Proceeds are not sufficient to pay in full the cost of the Project, the Borrower will complete the Project at its own expense and shall not be entitled to any reimbursement therefor from the Fund, the Authority or the Board or any abatement, diminution or postponement of the Borrower’s payments under the Local Bond or this Agreement.

ARTICLE V. ES AND ANNUAL BUDGET

PLEDGE, RI

Section 5.1. Pledge of Revenues. Subject to the Borrower’s right to apply Revenues to the payment of Operation and Maintenance Expense, the Revenues are hereby pledged to the Authority, as Administrator of the Fund, to secure the payment of the principal of and the Cost of Funds on the Local Bond and the payment and performance of the Borrower’s obligations under this Agreement. This pledge shall be valid and binding from and after the execution and delivery of this Agreement. The Revenues, as received by the Borrower, shall immediately be subject to the lien of this pledge without any physical delivery of them or further act. The lien of this pledge of the Revenues is on a parity with the lien of the pledge securing the Existing Parity Bonds. The lien of this pledge shall, subject to the right of the Borrower to apply Revenues to the payment of Operation and Maintenance Expense, have priority over all other obligations and liabilities of the Borrower, and the lien of this pledge shall be valid and binding against all parties having claims of any kind against the Borrower regardless of whether such parties have notice of this pledge

(a) ‘The Borrower covenants and agrees that it will fix and collect rates, fees and other charges for the use of and for services furnished or to be furnished by the System, and will from time to time revise such rates, fees and other charges so that in each Fiscal Year the Net Revenues Available for Debt Service will equal at least 100% of the amount required during the Fiscal Year to pay the principal of and the Cost of Funds on the Local Bond, the Additional Payments and all other indebtedness of the Borrower secured by or payable from Revenues, including without limitation, indebtedness under leases which are treated as capital leases under generally accepted accounting principles. If, for any reason, the Revenues are insufficient to satisfy the foregoing covenant, the Borrower shall within ninety (90) days adjust and increase its rates, fees and other charges or reduce its Operation and Maintenance Expense so as to provide sufficient Revenues to satisfy such requirement.

(b) On or before the last day of each Fiscal Year, the Borrower shall review the adequacy of its rates, fees and other charges for the next Fiscal Year, and, if such review indicates the Borrower’s rates, fees and other charges are insufficient to satisfy the rate covenant in subsection (a) of this Section, the Borrower shall promptly take appropriate action to increase its rates, fees and other charges or reduce its Operation and Maintenance Expense to cure any deficiency.

Section 5.2. Annual Budget. The Borrower agrees before the first day of each Fiscal Year to adopt a budget for such Fiscal Year containing all information called for by, and otherwise being in the form of, Exhibit H to this Agreement, for such Fiscal Year setting forth a schedule of the rates, fees and other charges to be imposed by the Borrower, the Revenues estimated to be

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generated thereby, the expenditures anticipated by the Borrower for operations, maintenance,

repairs, replacements, improvements, debt service and other purposes, and specifically identifying

any amounts made available by the County pursuant to the Support Agreement. Such budget as

approved by the Borrower’s governing body is referred to in this Agreement as the Annual Budget.

The Borrower may at any time during any Fiscal Year amend the Annual Budget for such Fiscal

Year so long as such amendment does not result in a Default. The Borrower shall submit a copy of

the Annual Budget and any amendments thereto to the Authority.

Section 5.3. Qualified Independent Consultant’s Report. (a) If at the end of any

Fiscal Year, the Borrower is not in compliance with the rate covenant made by the Borrower in

Section 5.1(a), within two hundred ten (210) days after the end of such Fiscal Year, the Borrower

shall obtain a report from the Qualified Independent Consultant giving advice and making

recommendations as to the proper maintenance, repair, replacement and operation of the System

for the next ensuing Fiscal Year and estimating the costs thereof as to the rates, fees, and other

charges which should be established by the Borrower to satisfy the rate covenant in Section

5.1(a). The Borrower shall promptly furnish a copy of such report to the Authority and, subject

to Section 5.3(b), take measures to implement the recommendations of the Qualified Independent

Consultant within ninety (90) days of obtaining such report.

(b) If the Borrower determines that the Qualified Independent Consultant’s

recommendations are impractical or inappropriate, the Borrower may in lieu thereof adopt other

procedures which the Borrower believes will bring it into compliance with the rate covenant

made by the Borrower in Section 5.1(a) when such measures have been implemented and

become fully effective. Such alternative plan shall be filed with the Authority not later than

thirty (30) days after receipt of the Qualified Independent Consultant’s report along with a

detailed explanation of the Borrower’s reason for rejecting the Qualified Independent

Consultant’s recommendations. Notwithstanding anything herein to the contrary, the Authority

reserves the right, in its sole discretion, to reject such alternate procedures and require the

Borrower to comply with the Qualified Independent Consultant’s recommendations.

ARTICLE VI

PAYMENTS

Section 6.1. Payment of Local Bond. (a) The Local Bond shall be dated the date of

its delivery to the Authority. The Cost of Funds of the Local Bond shall be computed on

disbursed principal balance thereof from the date of each disbursement at the rate of two and

twenty-five one-hundredths percent (2.25%) per annum, consisting of the following:

(i) interest of seventy-five one-hundredths percent (0.75%) per annum payable for

the benefit of the Fund, and

(ii) one and fifty one-hundredths percent (1.50%) per annum payable as an Annual

Administrative Fee.

generated thereby, the expenditures anticipated by the Borrower for operations, maintenance, repairs, replacements, improvements, debt service and other purposes, and specifically identifying any amounts made available by the County pursuant to the Support Agreement, Such budget as approved by the Borrower’s governing body is referred to in this Agreement as the Annual Budget. ‘The Borrower may at any time during any Fiscal Year amend the Annual Budget for such Fiscal Year so long as such amendment does not result in a Default. The Borrower shall submit a copy of the Annual Budget and any amendments thereto to the Authority.

Section 5.3. Qualified Independent Consultant’s Report, (a) Ifat the end of any Fiscal Year, the Borrower is not in compliance with the rate covenant made by the Borrower in Section 5.1(a), within two hundred ten (210) days after the end of such Fiscal Year, the Borrower shall obtain a report from the Qualified Independent Consultant giving advice and making recommendations as to the proper maintenance, repair, replacement and operation of the System for the next ensuing Fiscal Year and estimating the costs thereof as to the rates, fees, and other charges which should be established by the Borrower to satisfy the rate covenant in Section 5.1(a). The Borrower shall promptly furnish a copy of such report to the Authority and, subject to Section 5.3(b), take measures to implement the recommendations of the Qualified Independent Consultant within ninety (90) days of obtaining such report.

(b) If the Borrower determines that the Qualified Independent Consultant’s recommendations are impractical or inappropriate, the Borrower may in lieu thereof adopt other procedures which the Borrower believes will bring it into compliance with the rate covenant made by the Borrower in Section 5.1(a) when such measures have been implemented and become fully effective. Such alternative plan shall be filed with the Authority not later than thirty (30) days after receipt of the Qualified Independent Consultants report along with a detailed explanation of the Borrower’s reason for rejecting the Qualified Independent Consultant’s recommendations. Notwithstanding anything herein to the contrary, the Authority reserves the right, in its sole discretion, to reject such alternate procedures and require the Borrower to comply with the Qualified Independent Consultant’s recommendations.

ARTICLE VI

Section 6.1. Payment of Local Bond. (a) The Local Bond shall be dated the date of its delivery to the Authority. The Cost of Funds of the Local Bond shall be computed on disbursed principal balance thereof from the date of each disbursement at the rate of two and twenty-five one-hundredths percent (2.25%) per annum, consisting of the following

(i) interest of seventy-five one-hundredths percent (0.75%) per annum payable for the benefit of the Fund, and

(ii) one and fifty one-hundredths percent (1.50%) per annum payable as an Annual Administrative Fee.

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(b) The Cost of Funds only on all amounts disbursed under the Local Bond shall be

due and payable on _____ 1, 20__. Commencing ___1, 20, and continuing semi-annually

thereafter on _____ 1 and _____ 1 in each year, principal and the Cost of Funds due under the

Local Bond shall be payable in equal installments of $, with a final installment of $

due and payable on ___1, 20, when, if not sooner paid, all amounts due hereunder and under

the Local Bond shall be due and payable in full. Each installment shall be applied first to

payment of the Cost of Funds accrued and unpaid to the payment date and then to principal. If

principal disbursements up to the maximum authorized amount of the Local Bond are not made,

the principal amount due on the Local Bond shall not include such undisbursed amount.

However, unless the Borrower and the Authority agree otherwise in writing, until all amounts

due hereunder and under the Local Bond shall have been paid in full, less than full disbursement

of the maximum authorized amount of the Local Bond shall not postpone the due date of any

semi-annual installment due on the Local Bond, or change the amount of such installment. If

any installment of principal of or the Cost of Funds on the Local Bond is not paid within ten (10)

days after its due date, the Borrower agrees to pay to the Authority a late payment charge in an

amount equal to five percent (5.0%) of the overdue installment.

Section 6.2. Payment of Additional Payments. In addition to the payments of

principal of and the Cost of Funds on the Local Bond, the Borrower agrees to pay on demand of

the Authority the following Additional Payments:

(1) The costs of the Fund, the Authority, the Department or the Board

in connection with the enforcement of this Agreement, including the reasonable

fees and expenses of any attorneys used by any of them; and

(2) All expenses, including reasonable attorneys’ fees, relating to any

amendments, waivers, consents or collection or enforcement proceedings pursuant

to the provisions hereof.

The Borrower agrees to pay interest on any Additional Payments enumerated in (1) or (2)

above not received by the Authority within ten (10) days after demand therefor at a rate of five

percent (5.0%) per annum of the overdue installment from its due date until the date it is paid.

ARTICLE VII

PREPAYMENTS

Section 7.1. Prepayment of Local Bond. Upon completion of the Project and after

giving at least ten (10) days’ written notice to the Authority, the Borrower may prepay the Local

Bond at any time, in whole or in part and without penalty. Such written notice shall specify the

date on which the Borrower will make such prepayment and whether the Local Bond will be

prepaid in full or in part, and if in part, the principal amount to be prepaid. Any such partial

prepayment shall be applied against the principal amount outstanding under the Local Bond but

shall not postpone the due date of any subsequent payment on the Local Bond, or change the

amount of such installment, unless the Borrower and the Authority agree otherwise in writing.

(b) The Cost of Funds only on all amounts disbursed under the Local Bond shall be due and payable on 1,20__. Commencing 1, 20__, and continuing semi-annually thereafter on Tand 1 in each year, principal and the Cost of Funds due under the Local Bond shall be payable in equal installments of $__, with a final installment of S.

due and payable on 1, 20__, when, if not sooner paid, all amounts due hereunder and under the Local Bond shall be due and payable in full. Each installment shall be applied first to payment of the Cost of Funds accrued and unpaid to the payment date and then to principal. If principal disbursements up to the maximum authorized amount of the Local Bond are not made, the principal amount due on the Local Bond shall not include such undisbursed amount. However, unless the Borrower and the Authority agree otherwise in writing, until all amounts due hereunder and under the Local Bond shall have been paid in full, less than full disbursement of the maximum authorized amount of the Local Bond shall not postpone the due date of any semi-annual installment due on the Local Bond, or change the amount of such installment. If any installment of principal of or the Cost of Funds on the Local Bond is not paid within ten (10) days after its due date, the Borrower agrees to pay to the Authority a late payment charge in an amount equal to five percent (5.0%) of the overdue installment.

Section 6.2. Payment of Additional Payments. In addition to the payments of principal of and the Cost of Funds on the Local Bond, the Borrower agrees to pay on demand of the Authority the following Additional Payments:

(1) The costs of the Fund, the Authority, the Department or the Board in connection with the enforcement of this Agreement, including the reasonable fees and expenses of any attorneys used by any of them; and

(2) Allexpenses, including reasonable attorneys’ fees, relating to any amendments, waivers, consents or collection or enforcement proceedings pursuant to the provisions hereof.

‘The Borrower agrees to pay interest on any Additional Payments enumerated in (1) or (2) above not received by the Authority within ten (10) days after demand therefor at a rate of five percent (5.0%) per annum of the overdue installment from its due date until the date it is paid.

ARTICLE VIE PREPAYMENTS,

Section 7.1. Prepayment of Local Bond. Upon completion of the Project and after giving at least ten (10) days’ written notice to the Authority, the Borrower may prepay the Local Bond at any time, in whole or in part and without penalty. Such written notice shall specify the date on which the Borrower will make such prepayment and whether the Local Bond will be prepaid in full or in part, and if in part, the principal amount to be prepaid. Any such partial prepayment shall be applied against the principal amount outstanding under the Local Bond but shall not postpone the due date of any subsequent payment on the Local Bond, or change the amount of such installment, unless the Borrower and the Authority agree otherwise in writing.

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ARTICLE VIII

OPERATION AND USE OF SYSTEM

Section 8.1. Ownership and Operation of Project and System. Except as may

otherwise be approved by the Authority or permitted by the terms hereof, the Project and the

System at all times shall be owned by the Borrower or the County and shall not be operated or

controlled by any other entity or person.

Section 8.2. Maintenance. At its own cost and expense, the Borrower shall operate

the System in a proper, sound and economical manner and in compliance with all legal

requirements, shall maintain the System in good repair and operating condition and from time to

time shall make all necessary repairs, renewals and replacements.

Section 8.3. Additions and Modifications. At its own expense, the Borrower from

time to time may make any additions, modifications or improvements to the System which it

deems desirable and which do not materially reduce the value of the System or the structural or

operational integrity of any part of the System, provided that all such additions, modifications or

improvements comply with all applicable federal, state and local laws, rules, regulations, orders,

permits, authorizations and requirements. All such renewals, replacements, additions, modifi-

cations and improvements shall become part of the System.

Section 8.4. Use of System. The Borrower shall comply with all lawful requirements

of any governmental authority regarding the System, whether now existing or subsequently

enacted, whether foreseen or unforeseen or whether involving any change in governmental

policy or requiring structural, operational and other changes to the System, irrespective of the

cost of making the same.

Section 8.5. Inspection of System and Borrower’s Books and Records. The

Authority and the Board and their duly authorized representatives and agents shall have such

reasonable rights of access to the System as may be necessary to determine whether the

Borrower is in compliance with the requirements of this Agreement and shall have the right at all

reasonable times and upon reasonable prior notice to the Borrower to examine and copy the

books and records of the Borrower insofar as such books and records relate to the System.

Section 8.6. Ownership of Land. The Borrower shall not construct, reconstruct or

install any part of the System on lands other than those which the Borrower or the County owns

or can acquire title to or a perpetual easement over, in either case sufficient for the Borrower’s

purposes, unless such part of the System is lawfully located in a public street or highway or is a

main, conduit, pipeline, main connection or facility located on land in which the Borrower has

acquired a right or interest less than a fee simple or perpetual easement and such lesser right or

interest has been approved by written opinion of counsel to the Borrower as sufficient for the

Borrower’s purposes.

Section 8.7. Sale or Encumbrance. No part of the System shall be sold, exchanged,

leased, mortgaged, encumbered or otherwise disposed of except as provided in any one of the

ARTICLE VIII OPERATION AND USE OF SYSTEM.

Section 8.1. Ownership and Operation of Project and System, Except as may otherwise be approved by the Authority or permitted by the terms hereof, the Project and the System at all times shall be owned by the Borrower or the County and shall not be operated or controlled by any other entity or person.

Section 8.2, Maintenance. At its own cost and expense, the Borrower shall operate the System in a proper, sound and economical manner and in compliance with all legal requirements, shall maintain the System in good repair and operating condition and from time to time shall make all necessary repairs, renewals and replacements.

Section 8.3. Additions and Modifications. At its own expense, the Borrower from time to time may make any additions, modifications or improvements to the System which it deems desirable and which do not materially reduce the value of the System or the structural or operational integrity of any part of the System, provided that all such additions, modifications or improvements comply with all applicable federal, state and local laws, rules, regulations, orders, permits, authorizations and requirements. All such renewals, replacements, additions, modifi- cations and improvements shall become part of the System.

Section 8.4, Use of System. The Borrower shall comply with all lawful requirements of any governmental authority regarding the System, whether now existing or subsequently enacted, whether foreseen or unforeseen or whether involving any change in governmental policy or requiring structural, operational and other changes to the System, irrespective of the cost of making the same.

Section 8.5. Inspection of System and Borrower’s Books and Records. The Authority and the Board and their duly authorized representatives and agents shall have such reasonable rights of access to the System as may be necessary to determine whether the Borrower is in compliance with the requirements of this Agreement and shall have the right at all reasonable times and upon reasonable prior notice to the Borrower to examine and copy the books and records of the Borrower insofar as such books and records relate to the System.

Section 8.6. Ownership of Land. The Borrower shall not construct, reconstruct or install any part of the System on lands other than those which the Borrower or the County owns or can acquire title to or a perpetual easement over, in either case sufficient for the Borrower’s purposes, unless such part of the System is lawfully located in a public street or highway or is a main, conduit, pipeline, main connection or facility located on land in which the Borrower has acquired a right or interest less than a fee simple or perpetual easement and such lesser right or interest has been approved by written opinion of counsel to the Borrower as sufficient for the Borrower’s purposes.

Section 8.7. Sale or Encumbrance. No part of the System shall be sold, exchanged, leased, mortgaged, encumbered or otherwise disposed of except as provided in any one of the

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following subsections, or as may be otherwise consented and agreed to by the Authority in

writing:

(a) The Borrower may grant easements, licenses or permits across, over or

under parts of the System for streets, roads and utilities as will not adversely affect the use of the

System;

(b) The Borrower may sell or otherwise dispose of property constituting part

of the System if it uses the proceeds of such disposition and any other necessary funds to replace

such property with property serving the same or a similar function; and

of the System; provided, however, (i) no such property shall be sold or otherwise disposed of

unless there is filed with the Authority a certificate of the Borrower, signed by an Authorized

Representative, stating that such property is no longer needed or useful in the operation of the

System, and, if the proceeds of such sale or disposition, together with the aggregate value of any

other property sold or otherwise disposed of during the Fiscal Year, shall exceed $125,000, there

shall also be filed with the Borrower and the Authority a certificate of the Consulting Engineer

stating that such property is not necessary or useful to the operation of the System, and (ii) the

proceeds to be received from any sale or disposition shall be applied first to cure any default that

may exist in the payment of the principal of and Cost of Funds on the Local Bond , and then, if

such property constitutes part of the Project, to the prepayment of the Local Bond under Article

VII hereof.

Section 8.8. Collection of Revenues. The Borrower shall use its best efforts to collect

all rates, fees and other charges due to it, including, when appropriate, by perfecting liens on

premises served by the System for the amount of all delinquent rates, fees and other charges

where such action is permitted by law. The Borrower shall, to the full extent permitted by law,

discontinue and shut off, or cause to be discontinued and shut off, services and facilities of the

System, and use its best efforts to cause to be shut off water service furnished otherwise than

through the System, to customers of the System who are delinquent beyond any customary grace

periods in the payment of rates, fees and other charges due to the Borrower.

Section 8.9. No Free Service. The Borrower shall not permit connections with or the

use of the System, or furnish any services afforded by the System, without making a charge

therefor based on the Borrower’s uniform schedule of rates, fees and charges.

Section 8.10. No Competing Service. The Borrower shall not provide, grant any

franchise to provide or give consent for anyone else to provide, any services which would

compete with the System.

Section 8.11. Mandatory Connection. The Borrower shall, consistent with applicable

law, require the owner, tenant or occupant of each lot or parcel of land which is served or may

reasonably be served by the System and upon which lot or parcel a building shall have been

constructed for residential, commercial or industrial use, to connect such building to the System;

provided, however, the Borrower may permit the continued use of private systems, meeting the

following subsections, or as may be otherwise consented and agreed to by the Authority in writing:

(a) The Borrower may grant easements, licenses or permits across, over or under parts of the System for streets, roads and utilities as will not adversely affect the use of the System;

(b) The Borrower may sell or otherwise dispose of property constituting part of the System if it uses the proceeds of such disposition and any other necessary funds to replace such property with property serving the same or a similar function; and

(©) The Borrower may sell or otherwise dispose of property constituting part of the System; provided, however, (i) no such property shall be sold or otherwise disposed of unless there is filed with the Authority a certificate of the Borrower, signed by an Authorized Representative, stating that such property is no longer needed or usefiul in the operation of the System, and, if the proceeds of such sale or disposition, together with the aggregate value of any other property sold or otherwise disposed of during the Fiscal Year, shall exceed $125,000, there shall also be filed with the Borrower and the Authority a certificate of the Consulting Engineer stating that such property is not necessary or useful to the operation of the System, and (ii) the proceeds to be received from any sale or disposition shall be applied first to cure any default that may exist in the payment of the principal of and Cost of Funds on the Local Bond , and then, if such property constitutes part of the Project, to the prepayment of the Local Bond under Article VII hereof.

Section 8.8. Collection of Revenues. The Borrower shall use its best efforts to collect all rates, fees and other charges due to it, including, when appropriate, by perfecting liens on premises served by the System for the amount of all delinquent rates, fees and other charges where such action is permitted by law. The Borrower shall, to the full extent permitted by law, discontinue and shut off, or cause to be discontinued and shut off, services and facilities of the System, and use its best efforts to cause to be shut off water service furnished otherwise than through the System, to customers of the System who are delinquent beyond any customary grace periods in the payment of rates, fees and other charges due to the Borrower.

Section 8.9. No Free Service. The Borrower shall not permit connections with or the use of the System, or furnish any services afforded by the System, without making a charge therefor based on the Borrower’s uniform schedule of rates, fees and charges.

Section 8.10. No Competing Service. The Borrower shall not provide, grant any franchise to provide or give consent for anyone else to provide, any services which would compete with the System.

Section 8.11. Mandatory Connection. The Borrower shall, consistent with applicable law, require the owner, tenant or occupant of each lot or parcel of land which is served or may reasonably be served by the System and upon which lot or parcel a building shall have been constructed for residential, commercial or industrial use, to connect such building to the System;

provided, however, the Borrower may permit the continued use of private systems, meeting the

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standards of the Board, by any such building already in existence at the time the services of the

System become available to it upon such conditions as may be specified by the Borrower.

Section 8.12. Lawful Charges. The Borrower shall pay when due all taxes, fees,

assessments, levies and other governmental charges of any kind whatsoever (collectively, the

“Governmental Charges”) which are (i) assessed, levied or imposed against the System or the

Borrower’s interest in it, or (ii) incurred in the operation, maintenance, use and occupancy of the

System. The Borrower shall pay or cause to be discharged, or shall make adequate provision to

pay or discharge, all lawful claims and demands for labor, materials, supplies or other objects

which, if unpaid, might by law become a lien upon all or any part of the System or the Revenues

(collectively, the “Mechanics’ Charges”). The Borrower, however, after giving the Authority ten

(10) days’ notice of its intention to do so, at its own expense and in its own name, may contest in

good faith any Governmental Charges or Mechanics’ Charges. If such a contest occurs, the

Borrower may permit the same to remain unpaid during the period of the contest and any

subsequent appeal unless, in the reasonable opinion of the Authority, such action may impair the

lien on Revenues granted by this Agreement, in which event, such Governmental Charges or

Mechanics’ Charges promptly shall be satisfied or secured by posting with the Authority or an

appropriate court a bond in form and amount reasonably satisfactory to the Authority. Upon

request, the Borrower shall furnish to the Authority proof of payment of all Governmental

Charges and the Mechanics’ Charges required to be paid by the Borrower under this Agreement.

ARTICLE IX

INSURANCE, DAMAGE AND DESTRUCTION

Section 9.1. Insurance. Unless the Authority otherwise agrees in writing, the

Borrower continuously shall maintain or cause to be maintained insurance against such risks as

are customarily insured against by public bodies operating systems similar in size and character

to the System, including, without limitation:

(a) Insurance in the amount of the full replacement cost of the System’s

insurable portions against loss or damage by fire and lightning, with broad form extended

coverage endorsements covering damage by windstorm, explosion, aircraft, smoke, sprinkler

leakage, vandalism, malicious mischief and such other risks as are normally covered by such

endorsements (limited only as may be provided in the standard form of such endorsements at the

time in use in Virginia); provided that during the construction of the Project, the Borrower may

provide or cause to be provided, in lieu of the insurance in the amount of the full replacement

cost of the Project, builders’ risk or similar types of insurance in the amount of the full

replacement cost thereof. The determination of replacement cost shall be made by a recognized

appraiser or insurer selected by the Borrower and reasonably acceptable to the Authority.

(b) Comprehensive general liability insurance with a combined single limit of

$2,000,000 per year against liability for bodily injury, including death resulting therefrom, and

for damage to property, including loss of use thereof, arising out of the ownership, maintenance,

operation, leasing or use of the System.

standards of the Board, by any such building already in existence at the time the services of the System become available to it upon such conditions as may be specified by the Borrower.

Section 8.12. Lawful Charges. The Borrower shall pay when due alll taxes, fees, assessments, levies and other governmental charges of any kind whatsoever (collectively, the “Governmental Charges”) which are (i) assessed, levied or imposed against the System or the Borrower’s interest in it, or (ii) incurred in the operation, maintenance, use and occupancy of the System. The Borrower shall pay or cause to be discharged, or shall make adequate provision to pay or discharge, all lawful claims and demands for labor, materials, supplies or other objects which, if unpaid, might by law become a lien upon all or any part of the System or the Revenues (collectively, the “Mechanics” Charges”). The Borrower, however, after giving the Authority ten (10) days’ notice of its intention to do so, at its own expense and in its own name, may contest in good faith any Governmental Charges or Mechanics’ Charges. If such a contest occurs, the Borrower may permit the same to remain unpaid during the period of the contest and any subsequent appeal unless, in the reasonable opinion of the Authority, such action may impair the lien on Revenues granted by this Agreement, in which event, such Governmental Charges or Mechanics’ Charges promptly shall be satisfied or secured by posting with the Authority or an appropriate court a bond in form and amount reasonably satisfactory to the Authority. Upon request, the Borrower shall furnish to the Authority proof of payment of all Governmental Charges and the Mechanics’ Charges required to be paid by the Borrower under this Agreement.

ARTICLE IX INSURANCE, DAMAGE AND DESTRUCTION

Section 9.1. Insurance. Unless the Authority otherwise agrees in writing, the Borrower continuously shall maintain or cause to be maintained insurance against such risks as are customarily insured against by public bodies operating systems similar in size and character to the System, including, without limitation:

(a) Insurance in the amount of the full replacement cost of the System’s insurable portions against loss or damage by fire and lightning, with broad form extended coverage endorsements covering damage by windstorm, explosion, aircraft, smoke, sprinkler leakage, vandalism, malicious mischief and such other risks as are normallly covered by such endorsements (limited only as may be provided in the standard form of such endorsements at the time in use in Virginia); provided that during the construction of the Project, the Borrower may provide or cause to be provided, in lieu of the insurance in the amount of the full replacement cost of the Project, builders” risk or similar types of insurance in the amount of the full replacement cost thereof, The determination of replacement cost shall be made by a recognized appraiser or insurer selected by the Borrower and reasonably acceptable to the Authority.

(b) Comprehensive general liability insurance with a combined single limit of $2,000,000 per year against liability for bodily injury, including death resulting therefrom, and for damage to property, including loss of use thereof, arising out of the ownership, maintenance, operation, leasing or use of the System,

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workers’ compensation insurance.

The Authority shall not have any responsibility or obligation with respect to (i) the

procurement or maintenance of insurance or the amounts or the provisions with respect to

policies of insurance, or (ii) the application of the proceeds of insurance.

The Borrower shall provide no less often than annually and upon the written request of

the Authority a certificate or certificates of the respective insurers evidencing the fact that the

insurance required by this Section is in full force and effect.

Section 9.2. Requirements of Policies. All insurance required by Section 9.1 shall be

maintained with generally recognized, responsible insurance companies selected by the

Borrower and reasonably acceptable to the Authority. Such insurance may be written with

deductible amounts comparable to those on similar policies carried by other utility systems of

like size and character to the System, and shall contain an undertaking by the insurer that such

policy shall not be modified adversely to the interests of, or canceled without at least thirty (30)

days’ prior notice to, the Authority. If any such insurance is not maintained with an insurer

licensed to do business in Virginia or placed pursuant to the requirements of the Virginia Surplus

Lines Insurance Law (Chapter 48, Title 38.2, Code of Virginia of 1950, as amended) or any

successor provision of law, the Borrower shall provide evidence reasonably satisfactory to the

Authority that such insurance is enforceable under Virginia law.

Section 9.3. Notice of Damage, Destruction and Condemnation. In the case of

(i) any damage to or destruction of any material part of the System, (ii) a taking of all or any part

of the System or any right therein under the exercise of the power of eminent domain, (iii) any

loss of the System because of failure of title, or (iv) the commencement of any proceedings or

negotiations which might result in such a taking or loss, the Borrower shall give prompt notice

thereof to the Authority describing generally the nature and extent of such damage, destruction,

taking, loss, proceedings or negotiations.

Section 9.4. Damage and Destruction. If all or any part of the System is destroyed or

damaged by fire or other casualty, and the Borrower shall not have exercised its option to prepay

in full the Local Bond pursuant to Article VII, the Borrower shall restore promptly the property

damaged or destroyed to substantially the same condition as before such damage or destruction,

with such alterations and additions as the Borrower may determine and which will not impair the

capacity or character of the System for the purpose for which it then is being used or is intended

to be used. The Borrower may apply so much as may be necessary of the Net Proceeds of

insurance received on account of any such damage or destruction to payment of the cost of such

restoration, either on completion or as the work progresses. If such Net Proceeds are not

sufficient to pay in full the cost of such restoration, the Borrower shall pay so much of the cost as

may be in excess of such Net Proceeds. If the Net Proceeds are derived from property

constituting part of the Project, any balance of such Net Proceeds remaining after payment of the

cost of such restoration shall promptly be applied to the prepayment of the Local Bond pursuant

to Article VII.

(©) Unless the Borrower qualifies as a self-insurer under the laws of Virginia, workers” compensation insurance.

The Authority shall not have any responsibility or obligation with respect to (i) the procurement or maintenance of insurance or the amounts or the provisions with respect to policies of insurance, or (ii) the application of the proceeds of insurance.

The Borrower shall provide no less often than annually and upon the written request of the Authority a certificate or certificates of the respective insurers evidencing the fact that the insurance required by this Section is in full force and effect.

Section 9.2. Requirements of Policies. All insurance required by Section 9.1 shall be maintained with generally recognized, responsible insurance companies selected by the Borrower and reasonably acceptable to the Authority. Such insurance may be written with deductible amounts comparable to those on similar policies carried by other utility systems of like size and character to the System, and shall contain an undertaking by the insurer that such policy shall not be modified adversely to the interests of, or canceled without at least thirty (30) days” prior notice to, the Authority. If any such insurance is not maintained with an insurer licensed to do business in Virginia or placed pursuant to the requirements of the Virginia Surplus Lines Insurance Law (Chapter 48, Title 38.2, Code of Virginia of 1950, as amended) or any successor provision of law, the Borrower shall provide evidence reasonably satisfactory to the Authority that such insurance is enforceable under Virginia law.

Section 9.3. Notice of Damage, Destruction and Condemnation. In the case of (i) any damage to or destruction of any material part of the System, (ii) a taking of all or any part

of the System or any right therein under the exercise of the power of eminent domain, (iii) any loss of the System because of failure of title, or (iv) the commencement of any proceedings or negotiations which might result in such a taking or loss, the Borrower shall give prompt notice thereof to the Authority describing generally the nature and extent of such damage, destruction, taking, loss, proceedings or negotiations.

Section 9.4. Damage and Destruction. If all or any part of the System is destroyed or damaged by fire or other casualty, and the Borrower shall not have exercised its option to prepay in full the Local Bond pursuant to Article VII, the Borrower shall restore promptly the property damaged or destroyed to substantially the same condition as before such damage or destruction, with such alterations and additions as the Borrower may determine and which will not impair the capacity or character of the System for the purpose for which it then is being used or is intended to be used, The Borrower may apply so much as may be necessary of the Net Proceeds of insurance received on account of any such damage or destruction to payment of the cost of such restoration, either on completion or as the work progresses. If such Net Proceeds are not sufficient to pay in full the cost of such restoration, the Borrower shall pay so much of the cost as may be in excess of such Net Proceeds. If the Net Proceeds are derived from property constituting part of the Project, any balance of such Net Proceeds remaining after payment of the cost of such restoration shall promptly be applied to the prepayment of the Local Bond pursuant to Article VII.

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Section 9.5. Condemnation and Loss of Title. If title to or the temporary use of all or

any part of the System shall be taken under the exercise of the power of eminent domain or lost

because of failure of title, and the Borrower shall not have exercised its option to prepay in full

the Local Bond pursuant to Article VII, the Borrower shall cause the Net Proceeds from any such

condemnation award or from title insurance to be applied to the restoration of the System to

substantially its condition before the exercise of such power of eminent domain or failure of title.

If such Net Proceeds are not sufficient to pay in full the cost of such restoration, the Borrower

shall pay so much of the cost as may be in excess of such Net Proceeds. If the Net Proceeds are

derived from property constituting part of the Project, any balance of such Net Proceeds

remaining after payment of the cost of such restoration shall promptly be applied to the

prepayment of the Local Bond pursuant to Article VII.

ARTICLE X

SPECIAL COVENANTS

Section 10.1. Maintenance of Existence. The Borrower shall maintain its existence as

a “local government” (as defined in the Act) of the Commonwealth of Virginia and, without

consent of the Authority and the Board, shall not dissolve or otherwise dispose of all or

substantially all of its assets or consolidate or merge with or into another entity. Notwithstanding

the foregoing, the Borrower may consolidate or merge with or into, or sell or otherwise transfer

all or substantially all of its assets to a political subdivision of the Commonwealth of Virginia,

and the Borrower thereafter may dissolve, if the surviving, resulting or transferee political

subdivision, if other than the Borrower, assumes, in written form acceptable to the Authority and

the Board, all of the obligations of the Borrower contained in the Local Bond and this

Agreement, and there is furnished to the Authority and the Board an Opinion of Counsel

acceptable to the Authority and the Board subject to customary exceptions and qualifications, to

the effect that such assumption constitutes the legal, valid and binding obligation of the

surviving, resulting or transferee political subdivision enforceable against it in accordance with

its terms.

Section 10.2. Financial Records and Statements. The Borrower shall maintain proper

books of record and account in which proper entries shall be made in accordance with generally

accepted government accounting standards, consistently applied, of all its business and affairs

related to the System. The Borrower shall have an annual audit of the financial condition of the

Borrower (and at the reasonable request of the Authority, of the System) made by an independent

certified public accountant, within one hundred and eighty (180) days after the end of each Fiscal

Year. The annual audit shall include a supplemental schedule demonstrating whether the

Borrower during such Fiscal Year satisfied the rate covenant made by the Borrower in Section

5.1(a). In accordance with the provisions of the Single Audit Act of 1984, 31 U.S.C. §§ 7501 et

seq., as amended, and the regulations promulgated thereunder, including Uniform Administrative

Requirements, Cost Principles and Audit Requirements for Federal Awards located at Title 2 of the

Code of Federal Regulations Part 200 Subpart F, the Borrower agrees to obtain an annual audit

from an independent auditor if the Borrower expends $750,000 or more in federal funds in any

fiscal year. The Borrower shall furnish to the Authority copies of such report immediately after

it is accepted by the Borrower. Such report shall include statements in reasonable detail,

certified by such accountant, reflecting the Borrower’s financial position as of the end of such

Section 9.5. Condemnation and Loss of Title. If title to or the temporary use of all or any part of the System shall be taken under the exercise of the power of eminent domain or lost because of failure of title, and the Borrower shall not have exercised its option to prepay in full the Local Bond pursuant to Article VII, the Borrower shall cause the Net Proceeds from any such condemnation award or from title insurance to be applied to the restoration of the System to substantially its condition before the exercise of such power of eminent domain or failure of title. If such Net Proceeds are not sufficient to pay in full the cost of such restoration, the Borrower shall pay so much of the cost as may be in excess of such Net Proceeds. If the Net Proceeds are derived from property constituting part of the Project, any balance of such Net Proceeds remaining after payment of the cost of such restoration shall promptly be applied to the prepayment of the Local Bond pursuant to Article VII.

ARTICLE X SPECIAL COVENANTS

Section 10.1. Maintenance of Existence, The Borrower shall maintain its existence as a “local government” (as defined in the Act) of the Commonwealth of Virginia and, without consent of the Authority and the Board, shall not dissolve or otherwise dispose of all or substantially all of its assets or consolidate or merge with or into another entity. Notwithstanding the foregoing, the Borrower may consolidate or merge with or into, or sell or otherwise transfer all or substantially all of its assets to a political subdivision of the Commonwealth of Virginia, and the Borrower thereafter may dissolve, if the surviving, resulting or transferee political subdivision, if other than the Borrower, assumes, in written form acceptable to the Authority and the Board, all of the obligations of the Borrower contained in the Local Bond and this, Agreement, and there is furnished to the Authority and the Board an Opinion of Counsel acceptable to the Authority and the Board subject to customary exceptions and qualifications, to the effect that such assumption constitutes the legal, valid and binding obligation of the surviving, resulting or transferee political subdivision enforceable against it in accordance with its terms.

Section 10.2. Financial Records and Statements. The Borrower shall maintain proper books of record and account in which proper entries shall be made in accordance with generally accepted government accounting standards, consistently applied, of all its business and affairs related to the System. The Borrower shall have an annual audit of the financial condition of the Borrower (and at the reasonable request of the Authority, of the System) made by an independent certified public accountant, within one hundred and eighty (180) days after the end of each Fiscal Year. The annual audit shall include a supplemental schedule demonstrating whether the Borrower during such Fiscal Year satisfied the rate covenant made by the Borrower in Section 5.1(a). In accordance with the provisions of the Single Audit Act of 1984, 31 U.S.C. §§ 7501 et seq., as amended, and the regulations promulgated thereunder, including Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards located at Title 2 of the Code of Federal Regulations Part 200 Subpart F, the Borrower agrees to obtain an annual audit from an independent auditor if the Borrower expends $750,000 or more in federal funds in any fiscal year. The Borrower shall furnish to the Authority copies of such report immediately after it is accepted by the Borrower. Such report shall include statements in reasonable detail, certified by such accountant, reflecting the Borrower’s financial position as of the end of such

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Fiscal Year and the results of the Borrower’s operations and changes in the financial position of

its funds for the Fiscal Year.

Section 10.3. Certificate as to No Default. The Borrower shall deliver to the

Authority, within one hundred and eighty (180) days after the close of each Fiscal Year, a

certificate signed by an Authorized Representative stating that, during such year and as of the

date of such certificate, no event or condition has happened or existed, or is happening or

existing, which constitutes an Event of Default or a Default, or if such an event or condition has

happened or existed, or is happening or existing, specifying the nature and period of such event

or condition and what action the Borrower has taken, is taking or proposes to take to rectify it.

Section 10.4. Additional Indebtedness. The Borrower shall not incur any indebtedness

or issue any bonds, notes or other evidences of indebtedness secured by or payable from a pledge

of Revenues, except Subordinate Bonds or Parity Bonds.

Section 10.5. Parity Bonds. Provided the Borrower is not in default hereunder, the

Borrower may issue bonds, notes or other evidences of indebtedness (“Parity Bonds”) ranking on

parity with the Local Bond with respect to the pledge of Revenues to (i) pay Project Costs to

complete the Project, (ii) pay the cost of improvements, additions, extensions, replacements,

equipment or betterments and of any property, rights or easements deemed by the Borrower to be

necessary, useful or convenient for the System, (iii) refund some or all of the Local Bond, Parity

Bonds, Existing Parity Bonds or Prior Bonds, or (iv) effect some combination of (i), (ii) and (iii);

provided in each case the following conditions are satisfied. Notwithstanding anything contained

herein to the contrary, the issuance of any such Parity Bonds must not conflict with any of the

terms, conditions or restrictions applicable to the obligations of the County which are payable

from or secured by the Revenues, as set forth in Exhibit F attached hereto. Further, except to the

extent otherwise consented and agreed to by the Authority in writing, before any Parity Bonds are

issued or delivered, the Borrower shall deliver to the Authority the following:

(a) Certified copies of all resolutions and ordinances of the Borrower

authorizing the issuance of the Parity Bonds.

(b) A certificate of an appropriate official of the Borrower setting forth the

purposes for which the Parity Bonds are to be issued and the manner in which the Borrower will

apply the proceeds from the issuance and sale of the Parity Bonds.

of the Local Bond, Parity Bonds, Existing Parity Bonds or Prior Bonds, in form and substance

satisfactory to the Authority, a certificate of the Consulting Engineer, or with respect to subsection

(iv)© below, a certificate, including supporting documentation, of the Qualified Independent

Consultant, to the effect that in the opinion of the Consulting Engineer or Qualified Independent

Consultant, as applicable, (i) the improvements or property to which the proceeds from the

issuance of the Parity Bonds are to be applied will be a part of the System, (ii) the funds

available to the Borrower from the issuance of the Parity Bonds and other specified sources will

be sufficient to pay the estimated cost of such improvements or property, (iii) the period of time

which will be required to complete such improvements or acquire such property, and (iv) (A) the

Parity Bond proceeds are necessary to complete the Project, (B) the failure to make such

Fiscal Year and the results of the Borrower’s operations and changes in the financial position of its funds for the Fiscal Year.

Section 10.3. Certificate as to No Default. The Borrower shall deliver to the Authority, within one hundred and eighty (180) days after the close of each Fiscal Year, a certificate signed by an Authorized Representative stating that, during such year and as of the date of such certificate, no event or condition has happened or existed, or is happening or existing, which constitutes an Event of Default or a Default, or if such an event or condition has happened or existed, or is happening or existing, specifying the nature and period of such event or condition and what action the Borrower has taken, is taking or proposes to take to rectify it.

Section 10.4. Additional Indebtedness. The Borrower shall not incur any indebtedness or issue any bonds, notes or other evidences of indebtedness secured by or payable from a pledge of Revenues, except Subordinate Bonds or Parity Bonds.

Section 10.5. Parity Bonds. Provided the Borrower is not in default hereunder, the Borrower may issue bonds, notes or other evidences of indebtedness (“Parity Bonds”) ranking on parity with the Local Bond with respect to the pledge of Revenues to (i) pay Project Costs to complete the Project, (ii) pay the cost of improvements, additions, extensions, replacements, equipment or betterments and of any property, rights or easements deemed by the Borrower to be necessary, usefull or convenient for the System, (iii) refund some or all of the Local Bond, Parity Bonds, Existing Parity Bonds or Prior Bonds, or (iv) effect some combination of (i), (ii) and (iii); provided in each case the following conditions are satisfied. Notwithstanding anything contained herein to the contrary, the issuance of any such Parity Bonds must not conflict with any of the terms, conditions or restrictions applicable to the obligations of the County which are payable from or secured by the Revenues, as set forth in Exhibit F attached hereto. Further, except to the extent otherwise consented and agreed to by the Authority in writing, before any Parity Bonds are issued or delivered, the Borrower shall deliver to the Authority the following:

(a) Certified copies of all resolutions and ordinances of the Borrower authorizing the issuance of the Parity Bonds.

(b) A certificate of an appropriate official of the Borrower setting forth the purposes for which the Parity Bonds are to be issued and the manner in which the Borrower will apply the proceeds from the issuance and sale of the Parity Bonds.

(©) __ Ifthe Parity Bonds are authorized for any purpose other than the refunding of the Local Bond, Parity Bonds, Existing Parity Bonds or Prior Bonds, in form and substance satisfactory to the Authority, a certificate of the Consulting Engineer, or with respect to subsection (iv) below, a certificate, including supporting documentation, of the Qualified Independent Consultant, to the effect that in the opinion of the Consulting Engineer or Qualified Independent Consultant, as applicable, (i) the improvements or property to which the proceeds from the issuance of the Parity Bonds are to be applied will be a part of the System, (ii) the funds available to the Borrower from the issuance of the Parity Bonds and other specified sources will be sufficient to pay the estimated cost of such improvements or property, (iii) the period of time which will be required to complete such improvements or acquire such property, and (iv) (A) the Parity Bond proceeds are necessary to complete the Project, (B) the failure to make such

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improvements or acquire or construct such property will result in an interruption or reduction of

Revenues, or © during the first two complete Fiscal Years following completion of the

improvements or the acquisition of the property financed with the proceeds of the Parity Bonds,

the projected Net Revenues Available for Debt Service (excluding any amounts made available

by the County pursuant to the Support Agreement) will equal at least 115% of the amount

required during each such Fiscal Year to pay any and all amounts due under the Local Bond, this

Agreement, the Parity Bonds, any Existing Parity Bonds or Prior Bonds, and all other

indebtedness of the Borrower secured by or payable from by Revenues. In providing this

certificate, as applicable, the Qualified Independent Consultant may take into consideration

future System rate increases, provided that such rate increases have been duly approved by the

governing body of the Borrower and any other person and entity required to give approval for the

rate increase to become effective. In addition, the Qualified Independent Consultant may take

into consideration additional future revenues of the System to be derived under then existing

contractual agreements entered into by the Borrower and from reasonable estimates of growth in

the customer base of the Borrower.

(d) If the Parity Bonds are authorized solely to refund the Local Bond (with the

consent of the Authority), Existing Parity Bonds, Parity Bonds or Prior Bonds, either (i) a

certificate, including supporting documentation, of a Qualified Independent Consultant satisfactory

to the Authority that the refunding Parity Bonds will have annual debt service requirements in each

of the years the Local Bond, Existing Parity Bonds, Parity Bonds or Prior Bonds to be refunded

would have been outstanding which are lower than the annual debt service requirements in each

such year on the Local Bond, Existing Parity Bonds, Parity Bonds or the Prior Bonds to be

refunded, or (ii) a certificate, including supporting documentation, of the Qualified Independent

Consultant to the effect that during the first two complete Fiscal Years following the issuance of the

refunding Parity Bonds, the projected Net Revenues Available for Debt Service (excluding any

amounts made available by the County pursuant to the Support Agreement) will equal at least

115% of the amount required during each such Fiscal Year to pay any and all amounts due under

the Local Bond, this Agreement, the Parity Bonds, any Existing Parity Bonds or Prior Bonds,

and all other indebtedness of the Borrower secured by or payable from Revenues. In providing

the certificate described in clause (ii), the Qualified Independent Consultant may take into account

the factors described in the last two sentences of subsection © of this Section.

(e) An Opinion of Counsel satisfactory to the Authority subject to customary

exceptions and qualifications, approving the form of the resolution authorizing the issuance of the

Parity Bonds and stating that its terms and provisions conform with the requirements of this

Agreement and that the certificates and documents delivered to the Authority constitute compliance

with the provisions of this Section.

Section 10.6. Further Assurances. The Borrower shall to the fullest extent permitted

by law pass, make, do, execute, acknowledge and deliver such further resolutions, acts, deeds,

conveyances, assignments, transfers and assurances as may be necessary or desirable for the

better assuring, conveying, granting, assigning and confirming the rights, Revenues and other

funds pledged or assigned by this Agreement, or as may be required to carry out the purposes of

this Agreement. The Borrower shall at all times, to the fullest extent permitted by law, defend,

preserve and protect the pledge of the Revenues and other funds pledged under this Agreement

improvements or acquire or construct such property will result in an interruption or reduction of Revenues, or © during the first two complete Fiscal Years following completion of the improvements or the acquisition of the property financed with the proceeds of the Parity Bonds, the projected Net Revenues Available for Debt Service (excluding any amounts made available by the County pursuant to the Support Agreement) will equal at least 115% of the amount required during each such Fiscal Year to pay any and all amounts due under the Local Bond, this Agreement, the Parity Bonds, any Existing Parity Bonds or Prior Bonds, and all other indebtedness of the Borrower secured by or payable from by Revenues. In providing this certificate, as applicable, the Qualified Independent Consultant may take into consideration future System rate increases, provided that such rate increases have been duly approved by the governing body of the Borrower and any other person and entity required to give approval for the rate increase to become effective. In addition, the Qualified Independent Consultant may take into consideration additional future revenues of the System to be derived under then existing contractual agreements entered into by the Borrower and from reasonable estimates of growth in the customer base of the Borrower.

(d) If the Parity Bonds are authorized solely to refund the Local Bond (with the consent of the Authority), Existing Parity Bonds, Parity Bonds or Prior Bonds, either (i) a certificate, including supporting documentation, of a Qualified Independent Consultant satisfactory to the Authority that the refunding Parity Bonds will have annual debt service requirements in each of the years the Local Bond, Existing Parity Bonds, Parity Bonds or Prior Bonds to be refunded would have been outstanding which are lower than the annual debt service requirements in each such year on the Local Bond, Existing Parity Bonds, Parity Bonds or the Prior Bonds to be refunded, or (ii) a certificate, including supporting documentation, of the Qualified Independent Consultant to the effect that during the first two complete Fiscal Years following the issuance of the refunding Parity Bonds, the projected Net Revenues Available for Debt Service (excluding any amounts made available by the County pursuant to the Support Agreement) will equal at least 115% of the amount required during each such Fiscal Year to pay any and all amounts due under the Local Bond, this Agreement, the Parity Bonds, any Existing Parity Bonds or Prior Bonds, and all other indebtedness of the Borrower secured by or payable from Revenues. In providing the certificate described in clause (ii), the Qualified Independent Consultant may take into account the factors described in the last two sentences of subsection © of this Section.

(€) _ An Opinion of Counsel satisfactory to the Authority subject to customary exceptions and qualifications, approving the form of the resolution authorizing the issuance of the Parity Bonds and stating that its terms and provisions conform with the requirements of this, Agreement and that the certificates and documents delivered to the Authority constitute compliance with the provisions of this Section.

Section 10.6. Further Assurances, The Borrower shall to the fullest extent permitted by law pass, make, do, execute, acknowledge and deliver such further resolutions, acts, deeds, conveyances, assignments, transfers and assurances as may be necessary or desirable for the better assuring, conveying, granting, assigning and confirming the rights, Revenues and other funds pledged or assigned by this Agreement, or as may be required to carry out the purposes of this Agreement. The Borrower shall at all times, to the fullest extent permitted by law, defend, preserve and protect the pledge of the Revenues and other funds pledged under this Agreement

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and all rights of the Authority and the Board under this Agreement against all claims and

demands of all persons.

Section 10.7. Other Indebtedness. The Borrower agrees to pay when due all amounts

required by any other bonded indebtedness and to perform all of its obligations in connection

therewith.

Section 10.8. Assignment by Borrower. The Borrower may not assign its rights under

this Agreement without the prior written consent of the Authority and the Board. If the

Borrower desires to assign its rights under this Agreement to another “local government” (as

defined in the Act), the Borrower shall give notice of such fact to the Authority and the Board. If

the Authority and the Board consent to the proposed assignment, the Borrower may proceed with

the proposed assignment, but such assignment shall not become effective until the Authority and

the Board are furnished (i) an assumption agreement in form and substance satisfactory to the

Authority and the Board by which the assignee agrees to assume all of the Borrower’s

obligations under the Local Bond and this Agreement, and (ii) an Opinion of Counsel to the

assignee, subject to customary exceptions and qualifications, that the assumption agreement, the

Local Bond and this Agreement constitute legal, valid and binding obligations of the assignee

enforceable against the assignee in accordance with their terms and that the assignment and

assumption comply in all respects with the provisions of this Agreement. Notwithstanding the

foregoing, the assignment of the rights of the Borrower under the Local Bond and this

Agreement or the assumption of the obligations thereunder by the assignee shall in no way be

construed as releasing the Borrower’s obligations.

Section 10.9. Davis-Bacon Act. The Borrower agrees to comply with the Davis-Bacon

Act and related acts, as amended, with respect to the Project and require that all laborers and

mechanics employed by contractors and subcontractors for the Project shall be paid wages at

rates not less than those prevailing on projects of a similar character, as determined by the United

States Secretary of Labor in accordance with Section 1450(e) of the Safe Drinking Water Act

and related acts, as amended.

Section 10.10. Operating Agreement. The Borrower shall give prompt notice to the

Authority of any renewal, extension, amendment, default or termination of the Operating

Agreement. The Borrower shall enforce the terms of such agreement and use its best efforts to

ensure that such agreement remains in full force and effect during the term of this Agreement.

Section 10.11. American Iron and Steel. The Borrower agrees to comply with all

federal requirements, including those imposed by the Consolidated Appropriations Act, 2014,

P.L. 113-76, and related Drinking Water State Revolving Fund Policy Guidelines, as amended

and supplemented and in effect from time to time, with respect to the Project. Such requirements

include, among other things, that all iron and steel products used for the Project are to be

produced in the United States. The term “iron and steel products” is defined to mean the

following products made primarily of iron or steel: lined or unlined pipes and fittings, manhole

covers and other municipal castings, hydrants, tanks, flanges, pipe clamps and restraints, valves,

structural steel, reinforced precast concrete and construction materials.

and all rights of the Authority and the Board under this Agreement against all claims and demands of all persons.

Section 10.7. Other Indebtedness. The Borrower agrees to pay when due all amounts required by any other bonded indebtedness and to perform all of its obligations in connection therewith.

Section 10.8. Assignment by Borrower. The Borrower may not assign its rights under this Agreement without the prior written consent of the Authority and the Board. If the Borrower desires to assign its rights under this Agreement to another “local government” (as defined in the Act), the Borrower shall give notice of such fact to the Authority and the Board. If the Authority and the Board consent to the proposed assignment, the Borrower may proceed with the proposed assignment, but such assignment shall not become effective until the Authority and the Board are furnished (i) an assumption agreement in form and substance satisfactory to the Authority and the Board by which the assignee agrees to assume all of the Borrower’s obligations under the Local Bond and this Agreement, and (ii) an Opinion of Counsel to the assignee, subject to customary exceptions and qualifications, that the assumption agreement, the Local Bond and this Agreement constitute legal, valid and binding obligations of the assignee enforceable against the assignee in accordance with their terms and that the assignment and assumption comply in all respects with the provisions of this Agreement. Notwithstanding the foregoing, the assignment of the rights of the Borrower under the Local Bond and this Agreement or the assumption of the obligations thereunder by the assignee shall in no way be construed as releasing the Borrower’s obligations.

Section 10.9. Davis-Bacon Act. The Borrower agrees to comply with the Davis-Bacon Act and related acts, as amended, with respect to the Project and require that all laborers and mechanics employed by contractors and subcontractors for the Project shall be paid wages at rates not less than those prevailing on projects of a similar character, as determined by the United States Secretary of Labor in accordance with Section 1450(e) of the Safe Drinking Water Act and related acts, as amended.

Section 10.10, Operating Agreement, The Borrower shall give prompt notice to the Authority of any renewal, extension, amendment, default or termination of the Operating ‘Agreement. The Borrower shall enforce the terms of such agreement and use its best efforts to ensure that such agreement remains in full force and effect during the term of this Agreement,

Section 10.11. American Iron and Steel. The Borrower agrees to comply with all federal requirements, including those imposed by the Consolidated Appropriations Act, 2014, P.L. 113-76, and related Drinking Water State Revolving Fund Policy Guidelines, as amended and supplemented and in effect from time to time, with respect to the Project. Such requirements include, among other things, that all iron and steel products used for the Project are to be produced in the United States. The term “iron and steel products” is defined to mean the following products made primarily of iron or steel: lined or unlined pipes and fittings, manhole covers and other municipal castings, hydrants, tanks, flanges, pipe clamps and restraints, valves, structural steel, reinforced precast concrete and construction materials,

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Section 10.12. Recordkeeping and Reporting. The Borrower agrees to comply with all

recordkeeping and reporting requirements under the Safe Drinking Water Act and related acts, as

amended, including any reports required by a federal agency or the Authority, such as

performance indicators of program deliverables, information on costs and progress with respect

to the Project. The Borrower acknowledges that each contract and subcontract related to the

Project is subject to audit by appropriate federal and state entities.

ARTICLE XI

DEFAULTS AND REMEDIES

Section 11.1. Events of Default. Each of the following events shall be an “Event of

Default”:

(a) The failure to pay when due any payment of principal or Cost of Funds

due hereunder or to make any other payment required to be made under the Local Bond or this

Agreement;

(b) The Borrower’s failure to perform or observe any of the other covenants,

agreements or conditions of the Local Bond or this Agreement and the continuation of such

failure for a period of thirty (30) days after the Authority gives the Borrower written notice

specifying such failure and requesting that it be cured, unless the Authority shall agree in writing

to an extension of such time prior to its expiration; provided, however, if the failure stated in the

notice is correctable but cannot be corrected within the applicable period, the Authority will not

unreasonably withhold its consent to an extension of such time if corrective action is instituted

by the Borrower within the applicable period and diligently pursued until the Default is

corrected;

Borrower contained in this Agreement or in any instrument furnished in compliance with or in

reference to this Agreement or in connection with the issuance and sale of the Local Bond is

false or misleading in any material respect;

(d) The early termination of the Funding Agreement pursuant to Sections 5.3(b)

and © thereof;

(e) The occurrence of a default by the Borrower under the terms of any

Subordinate Bonds, Parity Bonds, Existing Parity Bonds or Prior Bonds and the failure to cure

such default or obtain a waiver thereof within any period of time permitted thereunder;

(f) An order or decree shall be entered, with the Borrower’s consent or

acquiescence, appointing a receiver or receivers of the System or any part thereof or of the

Revenues thereof, or if such order or decree, having been entered without the Borrower’s consent

or acquiescence, shall not be vacated, discharged or stayed on appeal within sixty (60) days after

the entry thereof;

Section 10.12. Recordkeeping and Reporting. The Borrower agrees to comply with all recordkeeping and reporting requirements under the Safe Drinking Water Act and related acts, as, amended, including any reports required by a federal agency or the Authority, such as performance indicators of program deliverables, information on costs and progress with respect to the Project. The Borrower acknowledges that each contract and subcontract related to the Project is subject to audit by appropriate federal and state entities.

ARTICLE XI DEFAULTS AND REMEDIES

Section 11.1. Events of Default. Each of the following events shall be an “Event of Default”:

(a) The failure to pay when due any payment of principal or Cost of Funds due hereunder or to make any other payment required to be made under the Local Bond or this Agreement;

(b) The Borrower’s failure to perform or observe any of the other covenants, agreements or conditions of the Local Bond or this Agreement and the continuation of such failure for a period of thirty (30) days after the Authority gives the Borrower written notice specifying such failure and requesting that it be cured, unless the Authority shall agree in writing to an extension of such time prior to its expiration; provided, however, if the failure stated in the notice is correctable but cannot be corrected within the applicable period, the Authority will not unreasonably withhold its consent to an extension of such time if corrective action is instituted by the Borrower within the applicable period and diligently pursued until the Default is corrected;

(©) _ Any warranty, representation or other statement by or on behalf of Borrower contained in this Agreement or in any instrument furnished in compliance with or in reference to this Agreement or in connection with the issuance and sale of the Local Bond is false or misleading in any material respect;

(4) The early termination of the Funding Agreement pursuant to Sections 5.3(b) and © thereof;

© The occurrence of a default by the Borrower under the terms of any Subordinate Bonds, Parity Bonds, Existing Parity Bonds or Prior Bonds and the failure to cure such default or obtain a waiver thereof within any period of time permitted thereunder;

(8) Anorder or decree shall be entered, with the Borrower’s consent or acquiescence, appointing a receiver or receivers of the System or any part thereof or of the Revenues thereof, or if such order or decree, having been entered without the Borrower’s consent or acquiescence, shall not be vacated, discharged or stayed on appeal within sixty (60) days after the entry thereof;

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(g) Any proceeding shall be instituted, with the Borrower’s consent or

acquiescence, for the purpose of effecting a composition between the Borrower and its creditors

or for the purpose of adjusting the claims of such creditors, pursuant to any federal or state

statute now or hereafter enacted, if the claims of such creditors are under any circumstances

payable from or secured by Revenues; or

(h) Any bankruptcy, insolvency or other similar proceeding shall be instituted

by or against the Borrower under any federal or state bankruptcy or insolvency law now or

hereinafter in effect and, if instituted against the Borrower, is not dismissed within sixty (60)

days after filing.

Section 11.2. Notice of Default. The Borrower agrees to give the Authority prompt

written notice if any order, decree or proceeding referred to in Section 11.1(f), (g) or (h) is

entered or instituted against the Borrower or of the occurrence of any other event or condition

which constitutes a Default or an Event of Default immediately upon becoming aware of the

existence thereof.

Section 11.3. Remedies on Default. Whenever any Event of Default referred to in

Section 11.1 shall have happened and be continuing, the Authority shall, in addition to any other

remedies provided herein or by law, including rights specified in Section 62.1-237 of the Act,

have the right, at its option without any further demand or notice, to take one or both of the

following remedial steps:

(a) Declare immediately due and payable all payments due or to become due

on the Local Bond and under this Agreement, and upon notice to the Borrower, the same shall

become immediately due and payable by the Borrower without further notice or demand; and

(b) Take whatever other action at law or in equity may appear necessary or

desirable to collect the payments then due and thereafter to become due on the Local Bond and

under this Agreement or to enforce any other of the Fund’s, the Authority’s or the Board’s rights

under this Agreement or to enforce performance by the Borrower of its covenants, agreements or

undertakings contained herein or in the Local Bond.

Section 11.4. Delay and Waiver. No delay or omission to exercise any right or power

accruing upon any Default or Event of Default shall impair any such right or power or shall be

construed to be a waiver of any such Default or Event of Default or acquiescence therein, and

every such right or power may be exercised from time to time and as often as may be deemed

expedient. No waiver of any Default or Event of Default under this Agreement shall extend to or

shall affect any subsequent Default or Event of Default or shall impair any rights or remedies

consequent thereto.

Section 11.5. State Aid Intercept. The Borrower acknowledges that the Authority may

take any and all actions available to it under the laws of the Commonwealth of Virginia,

including Section 62.1-216.1 of the Virginia Code, to secure payment of the principal of and

Cost of Funds on the Local Bond, if payment of such principal or Cost of Funds shall not be paid

when the same shall become due and payable.

(g) Any proceeding shall be instituted, with the Borrower’s consent or acquiescence, for the purpose of effecting a composition between the Borrower and its creditors or for the purpose of adjusting the claims of such creditors, pursuant to any federal or state statute now or hereafter enacted, if the claims of such creditors are under any circumstances payable from or secured by Revenues; or

(h) Any bankruptcy, insolvency or other similar proceeding shall be instituted by or against the Borrower under any federal or state bankruptcy or insolvency law now or hereinafter in effect and, if instituted against the Borrower, is not dismissed within sixty (60) days after filing.

Section 11.2. Notice of Default. The Borrower agrees to give the Authority prompt written notice if any order, decree or proceeding referred to in Section 11.1(£), (g) or (h) is entered or instituted against the Borrower or of the occurrence of any other event or condition which constitutes a Default or an Event of Default immediately upon becoming aware of the existence thereof.

Section 11.3. Remedies on Default. Whenever any Event of Default referred to in Section 11.1 shall have happened and be continuing, the Authority shall, in addition to any other remedies provided herein or by law, including rights specified in Section 62.1-237 of the Act, have the right, at its option without any further demand or notice, to take one or both of the following remedial steps:

(a) Declare immediately due and payable all payments due or to become due on the Local Bond and under this Agreement, and upon notice to the Borrower, the same shall become immediately due and payable by the Borrower without further notice or demand; and

(b) Take whatever other action at law or in equity may appear necessary or desirable to collect the payments then due and thereafter to become due on the Local Bond and under this Agreement or to enforce any other of the Fund’s, the Authority’s or the Board’s rights under this Agreement or to enforce performance by the Borrower of its covenants, agreements or undertakings contained herein or in the Local Bond.

Section 11.4. Delay and Waiver. No delay or omission to exercise any right or power aceruing upon any Default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such Default or Event of Default or acquiescence therein, and every such right or power may be exercised from time to time and as often as may be deemed expedient. No waiver of any Default or Event of Default under this Agreement shall extend to or shall affect any subsequent Default or Event of Default or shall impair any rights or remedies consequent thereto,

Section 11.5. State Aid Intercept. The Borrower acknowledges that the Authority may take any and all actions available to it under the laws of the Commonwealth of Virginia, including Section 62.1-216.1 of the Virginia Code, to secure payment of the principal of and Cost of Funds on the Local Bond, if payment of such principal or Cost of Funds shall not be paid when the same shall become due and payable.

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ARTICLE XII

MISCELLANEOUS

Section 12.1. Successors and Assigns. This Agreement shall be binding upon, inure to

the benefit of and be enforceable by the parties and their respective successors and assigns.

Section 12.2. Amendments. The Authority and the Borrower, with the written consent

of the Department, shall have the right to amend from time to time any of the terms and

conditions of this Agreement, provided that all amendments shall be in writing and shall be

signed by or on behalf of the Authority and the Borrower; provided, however, that the written

consent of the Department shall not be required for the Authority and the Borrower to amend

Articles I, V, IX and XI or Sections 10.4 and 10.5 of this Agreement.

Section 12.3. Limitation of Borrower’s Liability. Notwithstanding anything in the

Local Bond or this Agreement to the contrary, the Borrower’s obligations are not its general

obligations, but are limited obligations payable solely from the Revenues which are specifically

pledged for such purpose. Neither the Local Bond nor this Agreement shall be deemed to create

or constitute a debt or a pledge of the faith and credit of the Borrower and the Borrower shall not

be obligated to pay the principal of or the Cost of Funds on the Local Bond or other costs

incident thereto except from the Revenues and other funds pledged therefor. In the absence of

fraud, no present or future director, official, officer, employee or agent of the Borrower shall be

liable personally in respect of this Agreement or the Local Bond or for any other action taken by

such individual pursuant to or in connection with the financing provided for in this Agreement or

the Local Bond.

Section 12.4. Applicable Law. This Agreement shall be governed by the applicable

laws of Virginia.

Section 12.5. Severability. If any clause, provision or section of this Agreement shall

be held illegal or invalid by any court, the illegality or invalidity of such clause, provision or

Section shall not affect the remainder of this Agreement which shall be construed and enforced

as if such illegal or invalid clause, provision or section had not been contained in this Agreement.

If any agreement or obligation contained in this Agreement is held to be in violation of law, then

such agreement or obligation shall be deemed to be the agreement or obligation of the Authority

and the Borrower, as the case may be, only to the extent permitted by law.

Section 12.6. Notices. Unless otherwise provided for herein, all demands, notices,

approvals, consents, requests, opinions and other communications under the Local Bond or this

Agreement shall be in writing and shall be deemed to have been given when delivered in person

or mailed by first class registered or certified mail, postage prepaid, addressed as follows:

ARTICLE XII MISCELLANEOUS

Section 12.1. Successors and Assigns. This Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns

Section 12.2. Amendments. The Authority and the Borrower, with the written consent of the Department, shall have the right to amend from time to time any of the terms and conditions of this Agreement, provided that all amendments shall be in writing and shall be signed by or on behalf of the Authority and the Borrower; provided, however, that the written consent of the Department shall not be required for the Authority and the Borrower to amend Articles I, V, IX and XI or Sections 10.4 and 10.5 of this Agreement.

Section 12.3. Limitation of Borrower’s Liability. Notwithstanding anything in the Local Bond or this Agreement to the contrary, the Borrower’s obligations are not its general obligations, but are limited obligations payable solely from the Revenues which are specifically pledged for such purpose. Neither the Local Bond nor this Agreement shall be deemed to create or constitute a debt or a pledge of the faith and credit of the Borrower and the Borrower shall not be obligated to pay the principal of or the Cost of Funds on the Local Bond or other costs incident thereto except from the Revenues and other funds pledged therefor. In the absence of fraud, no present or future director, official, officer, employee or agent of the Borrower shall be liable personally in respect of this Agreement or the Local Bond or for any other action taken by such individual pursuant to or in connection with the financing provided for in this Agreement or the Local Bond.

Section 12.4. Applicable Law. This Agreement shall be governed by the applicable laws of Virginia.

Section 12.5. Severability. If any clause, provision or section of this Agreement shall be held illegal or invalid by any court, the illegality or invalidity of such clause, provision or Section shall not affect the remainder of this Agreement which shall be construed and enforced as if such illegal or invalid clause, provision or section had not been contained in this Agreement. If any agreement or obligation contained in this Agreement is held to be in violation of law, then such agreement or obligation shall be deemed to be the agreement or obligation of the Authority and the Borrower, as the case may be, only to the extent permitted by law.

Section 12.6. Notices. Unless otherwise provided for herein, all demands, notices, approvals, consents, requests, opinions and other communications under the Local Bond or this Agreement shall be in writing and shall be deemed to have been given when delivered in person or mailed by first class registered or certified mail, postage prepaid, addressed as follows:

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Fund: Virginia Water Supply Revolving Fund

c/o Virginia Resources Authority

1111 East Main Street, Suite 1920

Richmond, VA 23219

Attention: Executive Director

Authority: Virginia Resources Authority

1111 East Main Street, Suite 1920

Richmond, VA 23219

Attention: Executive Director

Board: Virginia Department of Health

109 Governor Street

Richmond, VA 23219

Attention: State Health Commissioner

Borrower: The Russell County Public Service Authority

P. O. Box 3219 

Lebanon, VA 24266 

Attention:  Executive Director

A duplicate copy of each demand, notice, approval, consent, request, opinion or other

communication given by any party named in this Section shall also be given to each of the other

parties named. The Authority, the Board and the Borrower may designate, by notice given

hereunder, any further or different addresses to which subsequent demands, notices, approvals,

consents, requests, opinions or other communications shall be sent or persons to whose attention

the same shall be directed.

Section 12.7. Right to Cure Default. If the Borrower shall fail to make any payment or

to perform any act required by it under the Local Bond or this Agreement, the Authority without

prior notice to or demand upon the Borrower and without waiving or releasing any obligation or

default, may (but shall be under no obligation to) make such payment or perform such act. All

amounts so paid by the Authority and all costs, fees and expenses so incurred shall be payable by

the Borrower as an additional obligation under this Agreement, together with interest thereon at

the rate of interest of five percent (5.0%) per annum until paid. The Borrower’s obligation under

this Section shall survive the payment of the Local Bond.

Section 12.8. Headings. The headings of the several articles and sections of this

Agreement are inserted for convenience only and do not comprise a part of this Agreement.

Section 12.9. Term of Agreement. This Agreement shall be effective upon its

execution and delivery, provided that the Local Bond previously or simultaneously shall have

been executed and delivered. Except as otherwise specified, the Borrower’s obligations under

the Local Bond and this Agreement shall expire upon payment in full of the Local Bond and all

other amounts payable by the Borrower under this Agreement.

Fund: Virginia Water Supply Revolving Fund c/o Virginia Resources Authority 1111 East Main Street, Suite 1920 Richmond, VA 23219 Attention: Executive Director

Virginia Resources Authority 1111 East Main Street, Suite 1920 Richmond, VA 23219

Attention: Executive Director

Board: Virginia Department of Health 109 Governor Street, Richmond, VA 23219 Attention: State Health Commissioner

Borrower: The Russell County Public Service Authority P.O. Box 3219 Lebanon, VA 24266 Attention: Executive Director

‘A duplicate copy of each demand, notice, approval, consent, request, opinion or other ‘communication given by any party named in this Section shall also be given to each of the other parties named. The Authority, the Board and the Borrower may designate, by notice given hereunder, any further or different addresses to which subsequent demands, notices, approvals, consents, requests, opinions or other communications shalll be sent or persons to whose attention the same shall be directed.

Section 12.7. Right to Cure Default. If the Borrower shall fail to make any payment or to perform any act required by it under the Local Bond or this Agreement, the Authority without prior notice to or demand upon the Borrower and without waiving or releasing any obligation or default, may (but shall be under no obligation to) make such payment or perform such act. All amounts so paid by the Authority and all costs, fees and expenses so incurred shalll be payable by the Borrower as an additional obligation under this Agreement, together with interest thereon at the rate of interest of five percent (5.0%) per annum until paid. The Borrower’s obligation under this Section shall survive the payment of the Local Bond.

Section 12.8. Headings. The headings of the several articles and sections of this Agreement are inserted for convenience only and do not comprise a part of this Agreement.

Section 12.9. Term of Agreement. This Agreement shall be effective upon its execution and delivery, provided that the Local Bond previously or simultaneously shall have been executed and delivered. Except as otherwise specified, the Borrower’s obligations under the Local Bond and this Agreement shall expire upon payment in full of the Local Bond and all other amounts payable by the Borrower under this Agreement.

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Section 12.10. Commitment Letter. The Commitment Letter is an integral part of this

Agreement and shall survive closing hereunder.

Section 12.11. Counterparts. This Agreement may be executed in any number of

counterparts, each of which shall be an original and all of which together shall constitute but one

and the same instrument.

[Signature Page Follows]

Section 12.10. Commitment Letter. The Commitment Letter is an integral part of this Agreement and shall survive closing hereunder.

Section 12.11. Counterparts, This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which together shall constitute but one and the same instrument.

[Signature Page Follows]

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WITNESS the following signatures, all duly authorized.

VIRGINIA RESOURCES AUTHORITY, as

Administrator of the Virginia Water Supply Revolving

Fund

 By: __________________________________________ 



 Its: __________________________________________ 





 THE RUSSELL COUNTY PUBLIC SERVICE 

 AUTHORITY

By: __________________________________________

Its: __________________________________________

ACKNOWLEDGED, CONSENTED AND AGREED TO:

COUNTY OF RUSSELL, VIRGINIA

By: ____________________________________

Its: ____________________________________

WITNESS the following signatures, all duly authorized.

VIRGINIA RESOURCES AUTHORITY, as Administrator of the Virginia Water Supply Revolving Fund

By:

Its:

THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY

Its:

ACKNOWLEDGED, CONSENTED AND AGREED TO: COUNTY OF RUSSELL, VIRGINIA

By:

Its:

-28-

EXHIBIT A

FORM OF LOCAL BOND

THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY

FINCASTLE ESTATES WATERLINE EXTENSION PROJECT

WSL-022-15E

[To Come from Borrower’s Bond Counsel]

EXHIBIT A

FORM OF LOCAL BON! THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY FINCASTLE ESTATES WATERLINE EXTENSION PROJECT WSL-022-15E

[To Come from Borrower’s Bond Counsel]

EXHIBIT B

PROJECT DESCRIPTION

THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY

FINCASTLE ESTATES WATERLINE EXTENSION PROJECT

WSL-022-15E

The Project involves the extension of waterlines and water service to the Fincastle Estates

area, together with related expenses.

EXHIBIT B

PROJECT DESCRIPTIO! THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY FINCASTLE ESTATES WATERLINE EXTENSION PROJECT WSL-022-15E

The Project involves the extension of waterlines and water service to the Fincastle Estates area, together with related expenses.

EXHIBIT C

PROJECT BUDGET

THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY

FINCASTLE ESTATES WATERLINE EXTENSION PROJECT

WSL-022-15E

[To Come]

EXHIBIT C

PROJECT BUDGET THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY FINCASTLE ESTATES WATERLINE EXTENSION PROJECT WSL-022-15E

[To Come]

EXHIBIT D

OPINION OF BORROWER’S BOND COUNSEL

THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY

FINCASTLE ESTATES WATERLINE EXTENSION PROJECT

WSL-022-15E

[To Come from Borrower’s Bond Counsel]

EXHIBIT D

OPINION OF BORROWER’S BOND COUNSEL THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY FINCASTLE ESTATES WATERLINE EXTENSION PROJECT WSL-022-15E

[To Come from Borrower’s Bond Counsel]

EXHIBIT E

REQUISITION FOR DISBURSEMENT

THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY

FINCASTLE ESTATES WATERLINE EXTENSION PROJECT

WSL-022-15E

[LETTERHEAD OF BORROWER]

[Date]

Steven D. Pellei, P.E., Director

Office of Drinking Water, 6th Floor

Virginia Department of Health

109 Governor Street

Richmond, VA 23219

Re: Virginia Water Supply Revolving Fund

The Russell County Public Service Authority

Loan No. WSL-022-15E

Dear Mr. Pellei:

This requisition, Number ___, is submitted in connection with the Financing Agreement and

Funding Agreement, each dated as of ___1, 20 (collectively, the “Agreements”) between the

Virginia Resources Authority, as Administrator of the Virginia Water Supply Revolving Fund (the

“Fund”), and The Russell County Public Service Authority (the “Borrower”). Unless otherwise

defined in this requisition, all capitalized terms used herein shall have the meaning set forth in

Article I of the Agreements. The undersigned Authorized Representative of the Borrower hereby

requests disbursement of loan proceeds under the Agreements in the amount of $_____, for the

purposes of payment of the Project Costs as set forth on Schedule 1 attached hereto.

Attached hereto are invoices relating to the items for which payment is requested.

The undersigned certifies that (a) the amounts requested by this requisition will be applied

solely and exclusively to the payment, or the reimbursement of the Borrower for the payment, of

Project Costs, and (b) any materials, supplies or equipment covered by this requisition are not

subject to any lien or security interest or such lien or security interest will be released upon payment

of the requisition. In addition, the undersigned certifies that the Borrower has conducted adequate

oversight for compliance with the Davis-Bacon Act and related acts through (a) the review of

payrolls and associated certifications, (b) the conducting of employee interviews, and © the posting

of all wage determinations and additional classifications (as appropriate) on the work site, and

through this oversight, the Borrower has determined to the best of its ability that the Project

complies with the requirements of the Davis-Bacon Act and related acts. The Borrower further

EXHIBIT E

REQUISITION FOR DISBURSEMENT THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY FINCASTLE ESTATES WATERLINE EXTENSION PROJECT WSL-022-15E

[LETTERHEAD OF BORROWER] [Date]

Steven D. Pellei, P.E., Director Office of Drinking Water, 6th Floor Virginia Department of Health

109 Governor Street

Richmond, VA 23219

Re: Virginia Water Supply Revolving Fund The Russell County Public Service Authority Loan No. WSL-022-15E

Dear Mr. Pellei

This requisition, Number , is submitted in connection with the Financing Agreement and Funding Agreement, each dated as of 1, 20 (collectively, the “Agreements”) between the Virginia Resources Authority, as Administrator of the Virginia Water Supply Revolving Fund (the “Fund”), and The Russell County Public Service Authority (the “Borrower”). Unless otherwise defined in this requisition, all capitalized terms used herein shall have the meaning set forth in Article I of the Agreements. The undersigned Authorized Representative of the Borrower hereby requests disbursement of loan proceeds under the Agreements in the amount of $, for the purposes of payment of the Project Costs as set forth on Schedule | attached hereto.

Attached hereto are invoices relating to the items for which payment is requested.

‘The undersigned certifies that (a) the amounts requested by this requisition will be applied solely and exclusively to the payment, or the reimbursement of the Borrower for the payment, of Project Costs, and (b) any materials, supplies or equipment covered by this requisition are not subject to any lien or security interest or such lien or security interest will be released upon payment of the requisition. In addition, the undersigned certifies that the Borrower has conducted adequate oversight for compliance with the Davis-Bacon Act and related acts through (a) the review of payrolls and associated certifications, (b) the conducting of employee interviews, and © the posting of all wage determinations and additional classifications (as appropriate) on the work site, and through this oversight, the Borrower has determined to the best of its ability that the Project complies with the requirements of the Davis-Bacon Act and related acts. The Borrower further

certifies that all products included in this request satisfy the appropriate provisions of the American

Iron and Steel requirements included in the Agreements.

The undersigned further certifies that (a) no Event of Default or Default has occurred and is

continuing, and no condition exists which, with the passing of time or with the giving of notice or

both, would constitute an Event of Default hereunder, and (b) the representations and warranties of

the Borrower contained in the Agreements are true, correct and complete and the Borrower has

performed all of its obligations thereunder required to be performed as of the date hereof.

This requisition includes an accompanying Certificate of the Consulting Engineer as to the

performance of the work.

Sincerely,

(Authorized Representative of the Borrower)

Attachments

cc: VDH Project Engineer (with all attachments)

certifies that all products included in this request satisfy the appropriate provisions of the American Iron and Stee! requirements included in the Agreements.

The undersigned further certifies that (a) no Event of Default or Default has occurred and is continuing, and no condition exists which, with the passing of time or with the giving of notice or both, would constitute an Event of Default hereunder, and (b) the representations and warranties of the Borrower contained in the Agreements are true, correct and complete and the Borrower has performed all of its obligations thereunder required to be performed as of the date hereof.

This requisition includes an accompanying Certificate of the Consulting Engineer as to the performance of the work

Sincerely,

(Authorized Representative of the Borrower)

Attachments ce: VDH Project Engineer (with all attachments)

CERTIFICATE OF THE CONSULTING ENGINEER

FORM TO ACCOMPANY REQUEST FOR DISBURSEMENT

Loan No. WSL-022-15E

This Certificate is submitted in connection with Requisition Number ____, dated

_______, 20, submitted by The Russell County Public Service Authority. Capitalization

terms used herein shall have the same meanings set forth in Article I of the Agreements referred

to in the Requisition.

The undersigned Consulting Engineer for the Borrower hereby certifies that insofar as the

amounts covered by this Requisition include payments for labor or to contractors, builders or

materialmen, such work was actually performed or such materials, supplies or equipment were

actually furnished to or installed in the Project.

         SEAL                      









  ______________________________ 

    [Consulting Engineer] 





  Date: ________________________

CERTIFICATE OF THE CONSULTING ENGINEER

FORM TO ACCOMPANY REQUEST FOR DISBURSEMENT

Loan No. WSL-022-15E

This Certificate is submitted in connection with Requisition Number ___, dated

. 20__, submitted by The Russell County Public Service Authority. Capitalization terms used herein shall have the same meanings set forth in Article I of the Agreements referred to in the Requisition.

The undersigned Consulting Engineer for the Borrower hereby certifies that insofar as the amounts covered by this Requisition include payments for labor or to contractors, builders or materialmen, such work was actually performed or such materials, supplies or equipment were actually furnished to or installed in the Project.

SEAL

[Consulting Engineer]

Date:

SCHEDULE 1

VIRGINIA WATER SUPPLY REVOLVING FUND

FORM TO ACCOMPANY REQUEST FOR DISBURSEMENT

REQUISITION # ________

BORROWER: THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY

LOAN NUMBER: WSL-022-15E

CERTIFYING SIGNATURE: ______________________________

TITLE: ______________________________________

Cost Category

Amount

Budgeted

Disbursements

Expenditures

This

Period

Total

Expenditures

to Date

Net Balance

Remaining

TOTALS:

Total Loan Amount $_________________

Previous Disbursements $_________________

This Request $_________________

Loan Proceeds Remaining $________________

SCHEDULE 1 VIRGINIA WATER SUPPLY REVOLVING FUND FORM TO ACCOMPANY REQUEST FOR DISBURSEMENT

REQUISITION # BORROWER: THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY

LOAN NUMBER: WSL-022-15E

CERTIFYING SIGNATURE: TITLE:

TOTALS:

Total Loan Amount Previous Disbursements $ This Request $

Loan Proceeds Remaining §

EXHIBIT F

PRIOR BONDS, EXISTING PARITY BONDS AND SPRINGING PARITY BONDS

THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY

FINCASTLE ESTATES WATERLINE EXTENSION PROJECT

WSL-022-15E

Prior Bonds:

None

Existing Parity Bonds:*

$672,000 Russell County Series 1988 Water Revenue Bond (Sword’s Creek Project)

$900,000 Russell County Sewer Revenue Bond, Series 1996 (Dante Project) (to the extent secured

by water revenues)

$119,530 Russell County, Virginia, Water Revenue Bond, Series 1999 (Lynn Springs Project)

$935,690 Russell County Revenue Bond Series 2001A (Big A Mountain Project)

$344,477 Russell County Revenue Bond, Series 2001C (Pine Creek Project)

$99,775 The Russell County Public Service Authority Water Revenue Bond, Series 2006 (Green

Valley Project)

$325,227 The Russell County Public Service Authority Water Revenue Bond, Series

2010-A (Back Valley – Big A Mountain Interconnection Project)

$1,059,765 The Russell County Public Service Authority Water Revenue Bond,

Series 2011-A (Green Valley West Water Line Extension Project)

$103,783 The Russell County Public Service Authority Water Revenue Bond, Series 2011-B

(Long Branch/Strouth Creek/Fuller Mt. Water Line Extension Project)

$700,843 The Russell County Public Service Authority Water Revenue Bond, Series 2012-A

(New Garden/Finney Water Line Extension Project)

$3,537,000 Water Revenue Refunding Bond, Series 2014

$93,071 The Russell County Public Service Authority Water Revenue Bond, Series 2015

(Mountain Meadows Line Extension)

$294,202 Water Revenue Bond, Series 2016 (iPerl Radio Read Meter Replacement Project

EXHIBIT F

PRIOR BONDS, EXISTING PARITY BONDS AND SPRINGING PARITY BONDS THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY FINCASTLE ESTATES WATERLINE EXTENSION PROJECT WSL-022-15E

Bonds:

‘None

Existing Parity Bon $672,000 Russell County Series 1988 Water Revenue Bond (Sword’s Creek Project)

$900,000 Russell County Sewer Revenue Bond, Series 1996 (Dante Project) (to the extent secured by water revenues)

$119,530 Russell County, Virginia, Water Revenue Bond, Series 1999 (Lynn Springs Project) $935,690 Russell County Revenue Bond Series 2001A (Big A Mountain Project) $344,477 Russell County Revenue Bond, Series 2001C (Pine Creek Project)

$99,775 The Russell County Public Service Authority Water Revenue Bond, Series 2006 (Green Valley Project)

$325,227 The Russell County Public Service Authority Water Revenue Bond, Series 2010-A (Back Valley ~ Big A Mountain Interconnection Project)

$1,059,765 The Russell County Public Service Authority Water Revenue Bond, Series 2011-A (Green Valley West Water Line Extension Project)

$103,783 The Russell County Public Service Authority Water Revenue Bond, Series 2011-B (Long Branch/Strouth Creek/Fuller Mt. Water Line Extension Project)

$700,843 The Russell County Public Service Authority Water Revenue Bond, Series 2012-A (New Garden/Finney Water Line Extension Project)

$3,537,000 Water Revenue Refunding Bond, Series 2014

$93,071 The Russell County Public Service Authority Water Revenue Bond, Series 2015 (Mountain Meadows Line Extension)

$294,202 Water Revenue Bond, Series 2016 (iPerl Radio Read Meter Replacement Project

WSL-021-15)

$445,925 Water Revenue Bond, Series 2016 (Route 656 East Water Line Extension Project

WSL-023-15E)

[$_____ Water Revenue Bond, Series 2017 (Thompson Creek/Tunnel Road Waterline Extension

Project (WSL-022-15E))]

Springing Parity Bonds:*

$1,678,400 Russell County Revenue Bond, Series 2001B (Belfast Project)

$822,366 Russell County Revenue Bond, Series 2002A (Swords Creek Public Service Authority)

(Clark’s Valley Project) Series 2002A

$556,538 Russell County Revenue Bond Series 2005A (Drill Mountain Project)

$91,439 Russell County Revenue Bond Series 2005B (Clark’s Valley – South

Extension Water Project)

$1,906,717 Russell County Revenue Bond Series 2005E (Belfast - Rosedale Project)

$415,518 Russell County Revenue Bond Series 2006A (Miller Creek / Frank’s Hollow /

Honeysuckle Lane Project)

$197,179 Russell County Revenue Bond Series 2007A (Belfast – Highlands and

Yates Project)

$1,534,941 The Russell County Public Service Authority Revenue Bond Series

2008A (Big A Mountain Phase II Project)

The Existing Parity Bonds and Springing Parity Bonds, which have been issued by the County, are

secured, in part, by a pledge of the Revenues received by the Borrower from the System pursuant to the

Operating Agreement.

WSL-021-15)

$445,925 Water Revenue Bond, Series 2016 (Route 656 East Water Line Extension Project WSL-023-15E)

[S____ Water Revenue Bond, Series 2017 (Thompson Creek/Tunnel Road Waterline Extension Project (WSL-022-15E))]

Springing Parity Bonds:* $1,678,400 Russell County Revenue Bond, Series 2001B (Belfast Project)

$822,366 Russell County Revenue Bond, Series 2002A (Swords Creek Public Service Authority) (Clark’s Valley Project) Series 20024.

$556,538 Russell County Revenue Bond Series 2005A (Drill Mountain Project)

$91,439 Russell County Revenue Bond Series 2005B (Clark’s Valley — South Extension Water Project)

$1,906,717 Russell County Revenue Bond Series 2005E (Belfast - Rosedale Project)

$415,518 Russell County Revenue Bond Series 2006A (Miller Creek / Frank’s Hollow / Honeysuckle Lane Project)

$197,179 Russell County Revenue Bond Series 2007A (Belfast — Highlands and ‘Yates Project)

$1,534,941 The Russell County Public Service Authority Revenue Bond Series 2008A (Big A Mountain Phase II Project)

The Existing Parity Bonds and Springing Parity Bonds, which have been issued by the County, are secured, in part, by a pledge of the Revenues received by the Borrower from the System pursuant to the Operating Agreement.

EXHIBIT G

SUPPORT AGREEMENT

THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY

FINCASTLE ESTATES WATERLINE EXTENSION PROJECT

WSL-022-15E

THIS SUPPORT AGREEMENT is made as of the first day of _____, 2017, by and

among the BOARD OF SUPERVISORS OF RUSSELL COUNTY, VIRGINIA (the

“Board”), acting as the governing body of the County of Russell, Virginia (the “County”), THE

RUSSELL COUNTY PUBLIC SERVICE AUTHORITY (the “Borrower”), and the

VIRGINIA RESOURCES AUTHORITY (the “Authority”), as Administrator of the

VIRGINIA WATER SUPPLY REVOLVING FUND and as purchaser of the Local Bond, as

hereinafter defined, pursuant to a Financing Agreement dated as of the date hereof (the

“Financing Agreement”), between the Authority and the Borrower, and acknowledged,

consented and agreed to by the County.

RECITALS:

WHEREAS, the Borrower was created by the Board pursuant to the Virginia Water and

Waste Authorities Act (Chapter 51, Title 15.2, Code of Virginia of 1950, as amended) and owns

and/or and operates and leases the System in the County; and

WHEREAS, the Borrower has determined that it is in its best interest to issue and sell a

water system revenue bond in an original aggregate principal amount not to exceed $_____ (the

“Local Bond”) to the Authority pursuant to the terms of the Financing Agreement in order to

finance the Project; and

WHEREAS, the Board adopted on ________, 20 a resolution authorizing, among

other things, the execution of an agreement providing for a non-binding obligation of the Board

to consider certain appropriations in support of the Local Bond and the Project.

AGREEMENT

NOW, THEREFORE, for and in consideration of the foregoing and of the mutual

covenants herein set forth, the parties hereto agree as follows:

Unless otherwise defined, each capitalized term used in this Support Agreement

shall have the meaning given it in the Financing Agreement.

The Borrower shall use its best efforts to issue the Local Bond, to use the

proceeds thereof to pay the costs of the Project, and to construct and place the Project in

operation at the earliest practical date.

EXHIBIT G

SUPPORT AGREEMENT THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY FINCASTLE ESTATES WATERLINE EXTENSION PROJECT WSL-022-15E

THIS SUPPORT AGREEMENT is made as of the first day of . 2017, by and among the BOARD OF SUPERVISORS OF RUSSELL COUNTY, VIRGINIA (the “Board”, acting as the governing body of the County of Russell, Virginia (the “County”), THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY (the “Borrower”), and the VIRGINIA RESOURCES AUTHORITY (the “Authority”), as Administrator of the VIRGINIA WATER SUPPLY REVOLVING FUND and as purchaser of the Local Bond, as hereinafter defined, pursuant to a Financing Agreement dated as of the date hereof (the “Financing Agreement”), between the Authority and the Borrower, and acknowledged, consented and agreed to by the County.

RECITALS:

WHEREAS, the Borrower has determined that itis in its best interest to issue and sell a water system revenue bond in an original aggregate principal amount not to exceed $ (the “Local Bond”) to the Authority pursuant to the terms of the Financing Agreement in order to finance the Project; and

WHEREAS, the Board adopted on ,20__aresolution authorizing, among other things, the execution of an agreement providing for a non-binding obligation of the Board to consider certain appropriations in support of the Local Bond and the Project.

AGREEMENT

NOW, THEREFORE, for and in consideration of the foregoing and of the mutual covenants herein set forth, the parties hereto agree as follows:

Unless otherwise defined, each capitalized term used in this Support Agreement shall have the meaning given it in the Financing Agreement.
The Borrower shall use its best efforts to issue the Local Bond, to use the proceeds thereof to pay the costs of the Project, and to construct and place the Project in operation at the earliest practical date.
No later than May 15 of each year, beginning May 15, 20__, the Borrower shall

notify the Board of the amount (the “Annual Deficiency Amount”) by which the Borrower

reasonably expects the Revenues to be insufficient to pay (i) the debt service obligations under

the Financing Agreement, the Local Bond and any other indebtedness secured by or payable

from the Revenues, including the Existing Parity Bonds set forth on Exhibit F to the Financing

Agreement, (ii) the Operation and Maintenance Expense, and (iii) the Additional Payments in

full as and when due during the County’s fiscal year beginning the following July 1.

The County Administrator of the County (the “County Administrator”) shall

include the Annual Deficiency Amount in his budget submitted to the Board for the following

fiscal year as an amount to be appropriated to or on behalf of the Borrower. The County

Administrator shall deliver to the Authority within ten days after the adoption of the County’s

budget for each fiscal year, but not later than July 15 of each year, a certificate stating whether

the Board has appropriated to or on behalf of the Borrower an amount equal to the Annual

Deficiency Amount.

If at any time Revenues shall be insufficient to make any of the payments referred

to in paragraph 3 hereof, the Borrower shall notify the County Administrator of the amount of

such insufficiency and the County Administrator shall request a supplemental appropriation from

the Board in the amount necessary to make such payment.

The County Administrator shall present each request for appropriation pursuant to

paragraph 5 above to the Board, and the Board shall consider such request, at the Board’s next

regularly scheduled meeting at which it is possible to satisfy any applicable notification

requirement. Promptly after such meeting, the County Administrator shall notify the Authority

as to whether the amount so requested was appropriated. If the Board shall fail to make any such

appropriation, the County Administrator shall add the amount of such requested appropriation to

the Annual Deficiency Amount reported to the County by the County Administrator for the

County’s next fiscal year.

The Board hereby undertakes a non-binding obligation to appropriate such

amounts as may be requested from time to time pursuant to paragraphs 4 and 5 above, to the

fullest degree and in such manner as is consistent with the Constitution and laws of the

Commonwealth of Virginia. The Board, while recognizing that it is not empowered to make any

binding commitment to make such appropriations in future fiscal years, hereby states its intent to

make such appropriations in future fiscal years, and hereby recommends that future Boards of

Supervisors do likewise.

The Board acknowledges that (i) the Authority would not purchase the Local

Bond without the security and credit enhancement provided by this Agreement, and (ii) the

Authority is treating this Agreement as a “local obligation” within the meaning of Section 62.1-

199 of the Code of Virginia of 1950, as amended (the “Virginia Code”), which in the event of a

nonpayment hereunder authorizes the Authority to file an affidavit with the Governor that such

nonpayment has occurred pursuant to Section 62.1-216.1 of the Virginia Code. In purchasing

the Local Bond, the Authority is further relying on Section 62.1-216.1 of the Virginia Code,

No later than May 15 of each year, beginning May 15, 20__, the Borrower shall notify the Board of the amount (the “Annual Deficiency Amount”) by which the Borrower reasonably expects the Revenues to be insufficient to pay (i) the debt service obligations under the Financing Agreement, the Local Bond and any other indebtedness secured by or payable from the Revenues, including the Existing Parity Bonds set forth on Exhibit F to the Financing Agreement, (ii) the Operation and Maintenance Expense, and (iii) the Additional Payments in full as and when due during the County’s fiscal year beginning the following July 1
The County Administrator of the County (the “County Administrator”) shall include the Annual Deficiency Amount in his budget submitted to the Board for the following fiscal year as an amount to be appropriated to or on behalf of the Borrower. The County Administrator shall deliver to the Authority within ten days after the adoption of the County’s budget for each fiscal year, but not later than July 15 of each year, a certificate stating whether the Board has appropriated to or on behalf of the Borrower an amount equal to the Annual Deficiency Amount.
Ifat any time Revenues shall be insufficient to make any of the payments referred to in paragraph 3 hereof, the Borrower shall notify the County Administrator of the amount of such insufficiency and the County Administrator shall request a supplemental appropriation from the Board in the amount necessary to make such payment.
The County Administrator shall present each request for appropriation pursuant to paragraph 5 above to the Board, and the Board shall consider such request, at the Board’s next regularly scheduled meeting at which it is possible to satisfy any applicable notification requirement. Promptly after such meeting, the County Administrator shall notify the Authority as to whether the amount so requested was appropriated. If the Board shall fail to make any such appropriation, the County Administrator shall add the amount of such requested appropriation to the Annual Deficiency Amount reported to the County by the County Administrator for the County’s next fiscal year.
The Board hereby undertakes a non-binding obligation to appropriate such amounts as may be requested from time to time pursuant to paragraphs 4 and 5 above, to the fullest degree and in such manner as is consistent with the Constitution and laws of the Commonwealth of Virginia. The Board, while recognizing that it is not empowered to make any binding commitment to make such appropriations in future fiscal years, hereby states its intent to make such appropriations in future fiscal years, and hereby recommends that future Boards of Supervisors do likewise.
The Board acknowledges that (i) the Authority would not purchase the Local Bond without the security and credit enhancement provided by this Agreement, and (ii) the Authority is treating this Agreement as a “local obligation” within the meaning of Section 62.1- 199 of the Code of Virginia of 1950, as amended (the “Virginia Code”), which in the event of a nonpayment hereunder authorizes the Authority to file an affidavit with the Governor that such nonpayment has occurred pursuant to Section 62.1-216.1 of the Virginia Code. In purchasing the Local Bond, the Authority is further relying on Section 62.1-216.1 of the Virginia Code,

providing that if the Governor is satisfied that the nonpayment has occurred, the Governor will

immediately make an order directing the Comptroller to withhold all further payment to

the County of all funds, or of any part of them, appropriated and payable by the Commonwealth

of Virginia to the County for any and all purposes, and the Governor will, while the nonpayment

continues, direct in writing the payment of all sums withheld by the Comptroller, or as much of

them as is necessary, to the Authority, so as to cure, or cure insofar as possible, such

nonpayment.

Nothing herein contained is or shall be deemed to be a lending of the credit of the

County to the Borrower, the Authority or to any holder of the Local Bond or to any other person,

and nothing herein contained is or shall be deemed to be a pledge of the faith and credit or the

taxing power of the County, nor shall anything herein contained legally bind or obligate the

Board to appropriate funds for the purposes described herein.

Any notices or requests required to be given hereunder shall be deemed given if

sent by registered or certified mail, postage prepaid, addressed (i) if to the County, to P.O. Box

1208, Lebanon, VA 24266, Attention: County Administrator, (ii) if to the Borrower, to P. O.

Box 3219, Lebanon, VA 24266, Attention: Operations Manager, and (iii) if to the Authority, to

1111 East Main Street, Suite 1920, Richmond, Virginia, 23219, Attention: Executive Director.

Any party may designate any other address for notices or requests by giving notice.

It is the intent of the parties hereto that this Agreement shall be governed by the

laws of the Commonwealth of Virginia.

This Agreement shall remain in full force and effect until the Local Bond and all

other amounts payable by the Borrower under the Financing Agreement have been paid in full.

This Agreement may be executed in any number of counterparts, each of which

shall be an original and all of which together shall constitute but one and the same instrument.

[Signature Page Follows]

providing that if the Governor is satisfied that the nonpayment has occurred, the Governor will immediately make an order directing the Comptroller to withhold all further payment to

the County of all funds, or of any part of them, appropriated and payable by the Commonwealth of Virginia to the County for any and all purposes, and the Governor will, while the nonpayment continues, direct in writing the payment of all sums withheld by the Comptroller, or as much of them as is necessary, to the Authority, so as to cure, or cure insofar as possible, such nonpayment.

Nothing herein contained is or shall be deemed to be a lending of the credit of the County to the Borrower, the Authority or to any holder of the Local Bond or to any other person, and nothing herein contained is or shall be deemed to be a pledge of the faith and credit or the taxing power of the County, nor shall anything herein contained legally bind or obligate the Board to appropriate funds for the purposes described herein.
Any notices or requests required to be given hereunder shall be deemed given if sent by registered or certified mail, postage prepaid, addressed (i) if to the County, to P.O. Box 1208, Lebanon, VA 24266, Attention: County Administrator, (ii) if to the Borrower, to P.O. Box 3219, Lebanon, VA 24266, Attention: Operations Manager, and (ii) if to the Authority, to 1111 East Main Street, Suite 1920, Richmond, Virginia, 23219, Attention: Executive Director. Any party may designate any other address for notices or requests by giving notice.
Itis the intent of the parties hereto that this Agreement shall be governed by the laws of the Commonwealth of Virginia.
This Agreement shall remain in full force and effect until the Local Bond and all other amounts payable by the Borrower under the Financing Agreement have been paid in full.
This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which together shall constitute but one and the same instrument.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be

executed in their respective names as of the date first above written.

BOARD OF SUPERVISORS OF RUSSELL COUNTY,

VIRGINIA

By: ____________________________________________

Title: ___________________________________________

THE RUSSELL COUNTY PUBLIC SERVICE

AUTHORITY

By: ____________________________________________

Title: ___________________________________________

VIRGINIA RESOURCES AUTHORITY, as

Administrator of the Virginia Water Supply Revolving

Fund

By: ____________________________________________

Title: ___________________________________________

IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be executed in their respective names as of the date first above written.

BOARD OF SUPERVISORS OF RUSSELL COUNTY, VIRGINIA

Title:

THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY

By:

Title:

VIRGINIA RESOURCES AUTHORITY, as Administrator of the Virginia Water Supply Revolving Fund

By:

Title:

EXHIBIT H

FORM OF BUDGET

THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY

FINCASTLE ESTATES WATERLINE EXTENSION PROJECT

WSL-022-15E

(To Be on Borrower’s Letterhead)

[Date]

Executive Director

Virginia Resources Authority

1111 East Main Street, Suite 1920

Richmond, VA 23219

Dear Mr./Ms. __________:

Pursuant to the Financing Agreement[s] between Virginia Resources Authority and The

Russell County Public Service Authority, a copy of the fiscal year [20xx] annual budget is

enclosed. Such annual budget provides for the satisfaction of the rate covenant as demonstrated

below.

Revenues1 Operation & Maintenance

Expense

Net Revenues Available

for Debt Service ( Revenues – O&M Expense)

Debt Service Coverage (Net Revenues Available for

Debt Service/Debt Service)

1 Of the amount set forth here as Revenues, $_________ is derived from a transfer from the County of Russell,

Virginia’s general fund pursuant to the Support Agreement.

All capitalized terms used herein shall have the meaning set forth in the Financing

Agreement[s].

Very truly yours,

By: __________________________

Its: _________________________

EXHIBIT H

FORM OF BUDGET THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY FINCASTLE ESTATES WATERLINE EXTENSION PROJECT WSL-022-15E

(To Be on Borrower’s Letterhead)

[Date]

Executive Director Virginia Resources Authority

1111 East Main Street, Suite 1920 Richmond, VA 23219

Dear Mr./Ms.

Pursuant to the Financing Agreement{s] between Virginia Resources Authority and The Russell County Public Service Authority, a copy of the fiscal year [20x] annual budget is enclosed. Such annual budget provides for the satisfaction of the rate covenant as demonstrated below.

Revenues! ‘Operation & Maintenance | Net Revenues Available | Debt Service | Coverage Expense for Debt Service (Net Revenues Available for (Revenues ~ 08M Expense) Deb Service Debt Service)

Of the amount set forth here as Revenues, S is derived from a transfer from the County of Russell,

Virginia’s general fund pursuant to the Support Agreement

All capitalized terms used herein shall have the meaning set forth in the Financing Agreement[s].

Very truly yours,

By:

Its:

SUPPORT AGREEMENT

THE RUSSELL COUNTY PUBLIC SERVICE AUTHORITY

THOMPSON CREEK/TUNNEL ROAD WATERLINE EXTENSION PROJECT

WSL-020-15E