 | Board of Visitors minutes February 05, 2004 |  |
AUTHORIZATION OF ACQUISITION AND ISSUANCE OF DEBT FINANCING OF THE FONTAINE CLINICS BUILDING
WHEREAS, Chapter 9, Title 23 of the Code of Virginia of 1950, as amended (the "Virginia Code"), establishes a public corporation under the name and style of The Rector and Visitors of the University of Virginia (the "University") which is governed by a Board of Visitors (the "Board"); and
WHEREAS, Chapter 3, Title 23 of the Virginia Code (the "Act") classifies the University as an educational institution, declares it to be a public body and constitutes it a governmental instrumentality for the dissemination of education; and
WHEREAS, the Act empowers the University, with the consent and approval of the General Assembly of the Commonwealth of Virginia (the "Commonwealth") and the Governor of the Commonwealth to acquire, build, construct, reconstruct, erect, extend, better, equip and improve any building, facility, addition, extension or improvement of a capital nature required by or convenient for the purposes of the University and to borrow money and make, issue and sell bonds of the University for any such purposes, including the refinancing of any such facilities; and
WHEREAS, the Act further authorizes the University to pledge to the payment of the principal of and the interest on such bonds any monies available for the use of the University including, but not limited to, and subject to guidelines promulgated by the Secretary of Finance of the Commonwealth (the "Secretary of Finance"), monies appropriated to the University from the general funds of the Commonwealth or from nongeneral funds, without regard to the source of such monies, and which are not required by law or by previous binding contract to be devoted to some other purpose; and
WHEREAS, the University, on behalf of the Medical Center, intends to acquire a building for clinical operations, known as Medical Office Building II ("the Project") at the Fontaine Research Park from the University Foundation; and
WHEREAS, the University intends to fund the acquisition with proceeds from debt issuance; and
WHEREAS, the Commonwealth has authorized the Project and the issuance of bonds for it at an amount not to exceed $17,325,000, exclusive of costs of issuance, capitalized interest, original issue discount and other expenses relating thereto; and
WHEREAS, the Board anticipates that the bonds will be secured by a general revenue pledge of the University and not be in any way a debt of the Commonwealth and shall not create or constitute any indebtedness or obligation of the Commonwealth, either legal, moral or otherwise; and
WHEREAS, pursuant to Board guidelines adopted January 31, 2003, Finance Committee meeting, Item II.C., the University may provide short-term financing via its commercial paper program ("Commercial Paper")for the Project prior to issuing long-term debt; and
WHEREAS, the Medical Center will service any and all debt payments with income from operations;
RESOLVED that the Board of Visitors authorizes the acquisition of the clinics building at the Fontaine Research Park known as Medical Office Building II from the University Foundation at a cost not to exceed the state- authorized amount; and
RESOLVED FURTHER that Board of Visitors authorizes the issuance of Commercial Paper and/or long-term debt (such long-term debt is referred to hereinafter as the "Bonds") for the purpose of financing the Project and providing for the terms thereof, as required by Section 23-19 of the Virginia Code; and
RESOLVED FURTHER that pursuant to the Regulations and prior Board actions, the University of Virginia may utilize its existing authorities and capabilities to provide funding to the Project under the following conditions:
- 1. The Board recognizes that this resolution constitutes "official action" by the Board and evidences the Board's "official intent" to reimburse itself from the proceeds of bonds for any expenditures paid by the University with respect to the Project before the issuance of any such bonds, all within the meaning of Internal Revenue Service regulations issued pursuant to Sections 103 and 141 through 150 and related sections of the Internal Revenue Code;
- 2. The Commonwealth of Virginia has authorized this project in
the following legislation:
Submittal: Legislative Budget Amendment Project Number: 209-16756 Chapter Date: 2002-04 Chapter Number: 899 Item Number: C-53.60 - 3. The Medical Center has submitted a comprehensive and detailed financial plan acceptable to the Executive Vice President and Chief Operating Officer, the Vice President of Finance, and the Vice President of Management and Budget;
- 4. The Medical Center remains responsible for any debt obligation incurred regardless of the status of the capital project;
- 5. Irrespective of the external funding arrangements made by the University on its behalf, the Medical Center agrees to make its obligatory debt service payments through the University's internal funding mechanisms in accordance with debt management policies and practices as outlined by the Vice President for Finance (Report to the Finance Committee, January 31, 2003, Item III.C. Debt Structure and Policy);
RESOLVED FURTHER that the Executive Committee is authorized to approve the final terms of each series of the Bonds, including, without limitation, their original principal amounts, maturity dates and amounts, redemption provisions and prices and interest rates (which may be either fixed or variable), provided that (i) the maximum aggregate principal amount of all of the Bonds funding the Project shall not exceed $17,325,000; (ii) the maximum true interest cost of any series of the Bonds bearing interest at a fixed rate shall not exceed six percent (6%) per annum; (iii) the maximum initial true interest cost of any series of the Bonds bearing interest at a variable rate shall not exceed five percent (5%) per annum; (iv) the final maturity of all of the Bonds shall not extend beyond June 30, 2040; (v) call protection on the Bonds shall not exceed eleven (11) years; and (vi) no optional redemption premium for the Bonds shall exceed two percent; and
RESOLVED FURTHER that the Executive Committee is authorized to approve the discount payable to the underwriters selected by the Executive Committee (the "Underwriters") on account of the sale of the Bonds and to approve the terms of a contract for the sale of the Bonds to the Underwriters, provided that the discount payable to the Underwriters shall not exceed 0.5 percent of the original aggregate principal amount of the Bonds; and
RESOLVED FURTHER that the Executive Committee or all officers of the University are authorized and directed to take all such further actions, including without limitation the designation of Underwriters, paying agents, remarketing agents, trustees and liquidity providers for the Bonds, and to execute all such instruments, agreements, documents and certificates as they shall deem necessary or desirable to carry out the terms of the financing plans presented to this meeting, including without limitation any liquidity facilities, swap or other interest rate management agreements associated with the Bonds; and
RESOLVED FURTHER, pursuant to the Section 147(f) of the Internal Revenue Code of 1986, as amended, and applicable regulations thereunder, the University designates Yoke San Reynolds, Vice President for Finance of the University, as the public hearing officer to hold any public hearings required in order to ensure the tax-exempt status of interest on the bonds; and
RESOLVED FURTHER that all acts of all officers of the University which are in conformity with the purposes and intent of this Resolution and in carrying out the financing plans presented to this meeting are ratified, approved, and affirmed.
| Board of Visitors minutes February 05, 2004 | |