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<br />ORDINANCE NO.6 0,9 ~~;;.1,~'.P <br /> <br />AN ORDINANCE OF THE COUNCIL OF THE CITY OF PORTSMOUTH, VIRGINIA <br />(THE "CITY") AUTHORIZING THE GENERAL OBLIGATION GUARANTY BY THE <br />CITY OF THE TIMELY PAYMENT OF A PORTION OF PRINCIPAL OF AND <br />INTEREST ON CERTAIN GUARANTEED SUBORDINATED REVENUE BONDS TO <br />BE ISSUED BY THE SOUTHEASTERN PUBLIC SERVICE AUTHORITY OF <br />VIRGINIA ("SPSA") FOR THE PURPOSE OF REFUNDING AND RESTRUCTURING <br />CERTAIN OUTSTANDING BONDS OF SPSA. <br /> <br />WHEREAS, SPSA was created pursuant to the Virginia Water and Sewer Authorities <br />Act by its member jurisdictions (the "Owner Communities"), which are the Cities of Virginia <br />Beach, Norfolk, Chesapeake, Suffolk, Portsmouth, and Franklin, and the Counties of <br />Southampton and Isle of Wight; <br /> <br />WHEREAS, SPSA is currently indebted to the Virginia Resources Authority ("VRA") in <br />the amount of approximately $129,000,000 on bonds issued for various capital expenditures; <br /> <br />WHEREAS, the Chief Administrative Officers of the Owner Communities drafted a <br />proposal dated March 16, 2009, and entitled "Financial Assistance Plan for the Southeastern <br />Public Service Authority (SPSA)" (the "CAO Proposal"), which has previously been presented to <br />the City Council of the City (the "Council") and which advances a number of measures intended <br />to address SPSA's short- and long-term financial distress, including, among other things, the <br />issuance by SPSA of its guaranteed subordinated revenue bonds (the "Guaranteed Bonds") and <br />the purchase by VRA of the Guaranteed Bonds for the purpose of restructuring certain <br />outstanding bonds of SPSA; <br /> <br />WHEREAS, pursuant to the CAO Proposal, timely payment of principal of and interest <br />on the Guaranteed Bonds will be severally guaranteed by a general obligation pledge of the City, <br />the County of Isle of Wight and the Cities of Franklin and Suffolk, and a moral obligation pledge <br />of the County of Southampton (together, the "Guaranteeing Communities"); <br /> <br />WHEREAS, the terms of such guarantees are set forth in a Guaranty Agreement between the <br />Guaranteeing Communities, U.S. Bank National Association and SPSA (the "Guaranty <br />Agreement"), the form of which has been presented to this meeting; <br />WHEREAS, the Council has determined that it is advisable to pledge the full faith and <br />credit of the City to severally guaranty the timely payment of a portion of the principal of and <br />interest on the Guaranteed Bonds pursuant to the Guaranty Agreement; and <br /> <br />NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF <br />PORTSMOUTH, THAT: <br /> <br />1. Authorization of Guaranty. The Council hereby determines that it is <br />advisable and in the best interest of the City to severally guaranty the timely payment of a <br />portion of the principal of and interest on the Guaranteed Bonds in the maximum amount of <br />