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R-09-19 RESOLUTION APPROVING THE RESTRUCTURING OF CERTAIN OUTSTANDING BONDS OF THE SOUTHEASTERN PUBLIC SERVICE AUTHORITY OF VIRGINIA AS RECOMMENDED BY THE PORTFOLIO RISK MANAGEMENT COMMITTEE OF THE VIRGINIA RESOURCES AUTHORITY, INCLUDING A GENERAL OBLIGA TION PLEDGE OF THE CITY OF PORTSMOUTH, VIRGINIA, UPON CERTAIN CONDITIONS, IN SUPPORT OF SUCH RESTRUCTURING. WHEREAS, The Southeastern Public Service Authority of Virginia ("SPSA") was created pursuant to the Virginia Water and Sewer Authorities Act by its member jurisdictions, which are the Cities of Virginia Beach, Norfolk, Chesapeake, Suffolk, Portsmouth, and Franklin, and the Counties of Southampton andlsle of Wight (the "Owner Communities"); and WHEREAS, SPSA is currently indebted to the Virginia Resources Authority ("VRA") in the amount of approximately $129,000,000 on bonds issued for various capital expenditures (the "SPSA Local Bonds"); and WHEREAS, the Chief Administrative Officers of the Owner Communities (the "CAOs") have presented to VRA's Executive Director and the Portfolio Risk Management Committee of the VRA Board (the "VRA Portfolio Risk Management Committee") a proposal dated March 16, 2009, and entitled "Financial Assistance Plan for the Southeastern Public Service Authority (SPSA)" (the "CAO Proposal"), which proposal entails substantial and legally binding financial commitments by each of SPSA's Owner Communities to facilitate the desired assistance from VRA; and WHEREAS, on March 27, 2009, the VRA Portfolio Risk Management Committee adopted a resolution (the "VRA PRMC Resolution") (incorporated herein as Attachment A), which resolution has been presented to this meeting, recommending to the full VRA Board of Directors that it approve the VRA Restructuring in accordance with the CAO Proposal, subject to certain additional understandings as set forth in the VRA PRMC Resolution (the "Additional VRA Understandings"); and WHEREAS, the VRA PRMC Resolution advances a number of measures intended to address SPSA's short- and long-term financial distress, including, among other things, (i) a proposal for VRA to restructure certain outstanding SPSA debt (the "VRA Restructuring"), (ii) the imposition of increased municipal tipping fees to be paid by certain of the Owner Communities, (iii) general obligation pledges by the Cities of Franklin, Portsmouth and Suffolk and the County of Isle of Wight, and a moral obligation pledge of the County of Southampton in support of the VRA Restructuring; and (iv) general obligation backing by the Cities of Norfolk and Chesapeake for an outstanding line of credit owed by SPSA to Wachovia Bank; and WHEREAS, by its April 7, 1983 Use and Support Agreement with SPSA, Portsmouth became legally obligated to pay such tipping fees as may be imposed from time to time by SPSA, and SPSA is legally obligated to impose such tipping fees on its members, consistent with its agreements with each member, sufficient to pay debt service on all debt owed by SPSA,