19, 2004 Fairfalr County, Virginia Public Improvement

19, 2004
MEMORANDUM
OF
LEGAL
PAPERS
$311,810,000
Fairfalr County, Virginia
Public Improvement and Refunding Bonds, Series 2004 B
The Series 2004 B Bonds are being issued for the purpose of providing fUnds for school
improvements ($116,280,000), parks and park facilities ($13,920,000), public safety facilities
($50,700,000) and commercial and redevelopment area improvements ($4,500,000) and funds,
with other available funds, to refUnd certain maturities, or portions thereof, of the County's
outstanding callable Public Improvement Bonds, Series 1997 B, Public Improvement Bonds,
Series 1998 A, and Public Improvement Bonds, Series 1999 B.
Ten complete transcripts are to be prepared, one for each of the following:
Board of Supervisors
Department of Management and
Budget
Department of Finance
County Attorney
Purchaser of the Bonds
Financial Advisor
County School Board
Counsel to County School Board
Bond Counsel (2)
Each certified copy of a resolution should be accompanied 6y a certiJied copy of the
covering minutes of the meeting, in each instance showing the time and date of the meeting, the
location of the meeting, the character of the meeting, whether regular, adjourned or special the
names of those present and absent, and the introduction andpassage of the resolzrrion, indicating
the yea and nay vote. Ifa meeting is an adjourned meeting, there should befurnished a certified
extract of the minutes of the preceding regular meeting, which shows its time, date, location,
character, the names of those present and absent and the proceedings in connection with the
adjournment. If a meeting is a special meeting, the extract should show that proper notice was
given and received by all members.
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Certified copy of the proceedings of the County School Board of September 9, 2004
showingthe adoption of the resolutionrequestingthe Board of Supervisorsto authorize
the issuance and sale of bonds for school improvements, plus a certificate of the Clerk of
the Circuit Court reciting the filing ofa certified copy of this resolution with the Court.
2.
Certified copy of the proceedingsof the Board of Supervisorsof September 13, 2004
showing the adoption of the resolution (the "Bond Resolution") authorizing the issuance
of the Series 2004 B Bonds, providing for the sale of the Series 2004 B Bonds and
providing for the delegationof authority to award the Series 2004 B Bonds and make
certain other determinations in the absence of a quorum, plus a certificate of the Clerk of
the Circuit Court reciting the filing ofa certified copy of the resolution with the Court.
3.
(a)
Affidavitofpublication, with a copy of the newspaperclippingattached,showing
the date of publication of the Summary Notice of Sale in 172eBond Buyer.
(b)
Copy of the official Notice of Sale.
4.
Print outs of bids submitted pursuant to the Notice of Sale.
5.
Copy of the Preliminary OMicial Statement.
6.
Reserved
7.
Certificate of the Chief Financial Officer awarding the Series 2004 B Bonds and making
certain determinationspursuant to the delegation of authority contained in the Bond
Resolution.
8.
Continuing Disclosure Agreement.
9.
Letters/Releases from Rating Agencies.
10.
Signed copy of the Official Statement with a certificate of the Clerk of the Board of
Supervisorsthat it is substantiallyin the form approvedby the Board of Supervisors.
11.
Certificate of the Chairman of the Board of Supervisors and the County Executive as to
the accuracy and completeness of the Official Statement.
12.
(a)
Executedcounterpartof the EscrowDepositAgreementbetweenthe Countyand
Wachovia Bank, National Association, as Escrow Agent, including as an
Appendixthe VerificationReport ofMcGladrey & Pullen,LLP.
(b)
Affidavitof the mailingof the 1997B, 1998A and 1999B RefundedBonds
Notices ofDefeasance
and Establishment of Escrow Fund [post-closingl.
13.
Evidence of the authority of Wachovia Bank, National Association to serve as Escrow
Agent under the Escrow Deposit Agreement.
14.
Receipt for escrow funds.
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Officers and seal certificate for the County School Board.
16.
Officers and seal certificate for the Board of Supervisors.
17.
Signature and no-litigation certificate.
18.
County Attorney's no-litigation opinion.
19.
(a) Certificate ofauthentication.
(b) Specimen Series 2004 B Bond.
20.
Certificate of delivery and payment.
21.
Tax Certificate, including issue price certification of winning bidder, certificate of the
County School Board and certificate of the Financial Advisor.
22.
Completed Form 8038-G.
23.
Approving opinion of Bond Counsel.
24.
Opinion of Bond Counsel as to original issue discount.
25.
Blanket Letter of Representations to The Depository Trust Company.
26.
Receipt from The Depository Trust Company for the Series 2004 B Bonds.
27.
Certificate
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5594603v1
of successfUl
bidder.
SCHOOL BOARD REQUESTING RESOLUTION CERTIFICATE
I, Pamela Goddard,Clerk of the Fairfax CountySchool Board (the "County School
Board"),
DOHEREBY
CERTTFY
thritatt~ched
heretoas ExhibitA is a true,correctand
completecopy of a resolutionof the CountySchoolBoard entitled:"A RESOLUTION
REQUESTINGTHE BOARD OF SUPERVISORSOF FAIRFAX COUNTY,VIRGINIA,
TO ISSUE
AND SELL
SCHOOL
BONDS OF FAIRFAX
COUNTY,
VIRGINIA,
TOTALING $125,590,000AND APPROVINGTHE FORM OF A TAX CERTIFICATE
AND AUTHORIZING
THE EXECUTION THEREOF.",
as adopted by the County School
Boardon September
9, 2004(the"Resolution")
andthattheResolution
hasnotbeenamendedor
repealedsincethedateof its adoptionandis in fullforceandeffectas of the datehereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of October, 2004.
Pamela
Goddard
Clerk, Fairfax County School Board
Fairfax, Virginia
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5594603vl
A
i
RESOLUTION
REQUESTI[NG THE BOARD OF SUPERVISORS
OF FALRFAX COUNTY, VIRGINIA, TO ISSUE AND SELL SCHOOL BONDS OF
FATRFAX COUNTY, VIRGINIA
TOTALING $125,590,000 AND APPROVING
THE FORM
OF
A TAX
CERTIFICATE
AND
AUTHORIZING
THE
EXECUTION
THEREOF
WHEREAS, at an election duly called and held on November 6, 2001, a majority of the
qualified voters of Fairfax County, Virginia, voting on the question ("referendum"), approved
contracting a debt, borrowing money and issuing school bonds of Fairfax County, Virginia, in
the aggregate principal amount of $377,955,000; and
WHEREAS, the Circuit Court of Fairfax County, Virginia, has duly entered its Final
Order authorizing the Board of Supervisors of Fairfax County, Virginia, to carry out the wishes
of the voters of the County as expressed at said election, and to contract a debt, borrow money,
and issue school bonds of Fairfax Cbunty, Virginia, in the aggregate principal amount of
$377,955,000;
and
WHEREAS, the stated purpose of the school bonds authorized in the referendum was for
school improvements, including acquiring, renovating, and/or building additional property,
including acquiring and completing improvements to sites, constructing new buildings or
additions to buildings, renovating or otherwise improving existing buildings, and furnishing and
equipping buildings or additions to buildings; and
WHEREAS, the Board of Supervisors has heretofore issued $116,420,000 of the bonds
authorized by the November 6, 2001 referendum, leaving a balance of $261,535,000 authorized
but unissued bonds; and
WHEREAS, the School Board of Fairfax County, Virginia deems it advisable for the
Board of Supervisors to issue school bonds authorized by the November 6, 2001 referendum
from which the proceeds from the sale of such school bonds will equal $125,590,000, and to sell
such school bonds at this time; and
WHEREAS, the School Board recognizes that it will be necessary for it to make certain
certifications regarding the use of the proceeds of the school bonds for federal income tax
purposes;
NOW, THEREFORE,
Virginia:
BE IT RESOLVED
by the School Board of Fairfax County,
Section 1.
For the purpose of providing fUnds for the cost of school improvements,
including acquiring, renovating, and/or building additional property, including acquiring and
completing improvements to sites, constructing new buildings or additions to buildings,
renovating or otherwise improving existing buildings, and furnishing and equipping buildings or
additions to buildings, the Board of Supervisors of Fairfax County, Virginia, is hereby requested
to issue school bonds of Fairfax County, Virginia, authorized by the November 6, 2001
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5584295v2
from which the proceeds from the sale of such school bonds will equal $125,590,000
and provide for the sale of such bonds at this time.
Section 2.
The form of a certificate attached to this resolution as Appendix A (the
"School Board Tax Certificate") to be executed by the School Board in connection with the
issuance of the County's Public Improvement [and RefUndingl Bonds, Series 2004 B is approved
in all respects and the Chairman, Vice Chairman or any other member or officer of the School
Board designated in writing by the Chairman of the School Board is hereby authorized and
directed to approve, by execution and delivery, the School Board Tax Certificate in substantially
the form presented to this meeting together with such changes, modifications, insertions and
deletions as the Chairman, Vice Chairman or such designated member or officer, with the advice
of counsel, may deem necessary and appropriate; such execution and delivery shall be conclusive
evidence of the approval and authorization thereof by the School Board.
Section 3.
The Clerk of the School Board is hereby authorized and directed to file
two certified copies of this resolution with the Board of Supervisors ofFairfax County, Virginia.
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5584295v2
A
CERTIFICATE
OF THE
SCHOOL
BOARD
This certificate is provided to the County of Fairfax, Virginia (the "County") by the School
Board of the County ofFairfax, Virginia (the "School Board") in connection with the issuance by
the County of its $
,000 Public Improvement and [RefUndingl Bonds, Series 2004 B (the
"Bonds"), the proceeds of which will be used to finance and refinance the cost of constructing,
furnishing, acquiring and equipping school improvements (the "School Projects"),
The School Board recognizes that some of the representations made by the County in its Tax
Certificate dated
, 2004 and executed in connection with the issuance of the Bonds (the
"Tax Certificate") must be based on the representations and certifications of the School Board and
that the exclusion from gross income of the interest on the Bonds for federal income tax purposes
depends on the use of proceeds of the Bonds.
Accordingly, the School Board certifies that it has reviewed the representations set forth in
Section 1 of Part B of the Tax Certificate to which this certificate is attached regarding the use of
proceeds of the Bonds and the Projects and that such representations, to the extent they relate to the
School Projects, are true and correct, except as follows: (i)with respect to paragraph(d)
("Definition of Private Use"), in the second paragraph, fourth line, after ("General Public Use"),
there shall be deemed to be inserted "or other than as is excepted as private use by U.S. Treasury
Regulations," and (ii)with respect to paragraph(e) ("Management and Service Contracts"), the
references to Revenue Procedure 97-13 shall be deemed to include "or other applicable law."
Furthermore, such representations are hereby incorporated by reference in this certificate and shall
be treated as representations made by the School Board with respect to the School Projects as if set
forth herein.
The School Board
representations.
The School
Board
fUrther
shall not take any action that is inconsistent
covenants
with such
that:
(a) it shall not sell or otherwise dispose of the School Projects prior to the final maturity
date of the Bonds of [June i, 20
i except as shall be permitted in the opinion of an attorney or firm
of attorneys, acceptable to the County, nationally recognized as experienced with respect to matters
pertaining to the exclusion of interest on obligations of States and political subdivisions from gross
income for'federal income tax purposes; and
(b) it shall not knowingly take any action which will, or fail to take any action which failure
will, cause the interest on the Bonds to become includable in the gross income of the owners of the
Bonds for federal income tax purposes pursuant to the provisions of the Internal Revenue Code of
1986, as amended (the "Code"), and the regulations promulgated thereunder in effect on the date of
A-i
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5584295v2
issuance of the Bonds and for purposes of assuring compliance with Section 141 of the
Code.
School Board of the County ofr;airfax, Virginia
Name:
Title:
Date:
,2004
A-2
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5584295v2
Fairfax
Luther
County
Jackson
School·Board
Middle
School
Regular Meeting No. 3
September 9, 2004
EXCERPTED
1.
MEETING
TAPE
1.01
FROM PAGES 1, 12, 19
OPENING
REFERENCE:
1.-0026
Call to OrderlPledge
of AllegiancelMoment
of SilencelNational
Anthem
Chairman Smith convened the meeting at 8:00 p.m. with the following Board
members
present:
Catherine A. Belter(Springfield)
Brad Center (Lee)
Stuart D. Gibson (HunterMill)
Phillip A. Niedzielski-Eichner
Janet S. Oleszek (AtLarge)
Kathy L. Smith (sully)
(Providence)
Stephen M. Hunt(At Large)
Daniel G. Storck(Mt. vernon)
Kaye Kory(lvlason;dep. 11:25)
Jane K. Strauss
Ilryong Moon (AtLarge)
Tessie Wilson (Braddock)
(oranesville)
Also present were student representative to the Board lan Hurdle; Division
Superintendent Jack D. Dale, Chief Academic Officer Brad Draeger; Chief
Operating Officer Thomas Brady; Executive Assistant and Clerk of the Board
Pamela
Goddard;
members
of staff.
Deputy
Mrs. Smith thanked
Clerk of the Board
the members
Linda Sabo;
and certain
of the Chantilly High School
other
Touch of Class
Show Choir students for their performance of the National Anthem.
4.
OTHER
TAPE
4.02
ACTION
REFERENCE:
ITEMS
1-1681
Sale of School Bonds - Approve and adopt the resolution, in the form attached,
requesting the Board of Supervisors to issue and sell $125.59 million in school
bonds approved by the voters in the November 6, 2001, School Bond
Referendum,
and authorize the Chairman or Vice Chairman to execute, on
behalf of the School Board, a Tax Certificate substantially in the form provided
and as approved by the School Board attorney, in connection with the issuance
by the County of Series 20048 public improvement bonds (FS; Exhibit I )
Mrs. Strauss moved, and Mr. Storck seconded, that the School Board approve
and adopt the resolution, in the form attached, requesting the Board of
COUNTY SCHOOL BOARD
Regular
Meeting
No.3
2
September
9,2004
Supervisors
to issue and sell $125.59millionin schoolbondsapprovedbythe
voters in the Novem be r 6 2001 1 Sch 00I Bond Referendum 1 and authonze the
Chairman or Vice-Chairman to execute on behalf of the School Board a tax
certiiicate
substantialh
intheform
prouided.
andas~p~roved
bytheSchool
Boardattorney,in connection
withthe issuancebythe Countyof SeriesZ004tr
Public lmbrovement Bonds. The motion
10.
ADJOURNM~
TAPE REFERENCE:
ssed unanimous
3-0730
10.01 The meeting was adjourned at 11:50 p.m.
I, Pamela Goddard,ExecutiveAssistantof the SchoolBoardof Fairfax
County,Virginia,
herebycertifythatthe foregoing
annexedextractsfromthe
Minutes of the meeting of the School Board of said County, held on
September9, 2004,are a true,complete,andcorrectcopythereofofthe
wholeof said originalMinutesso far as the same relate to the subjectmatter
referred
Pamela
to in said
Goddar~fxecutive
extracts.
Assistant
County School Board of Fairfax County, Virginia
~.
/P aaay
Date
Nancy Vehrs, hereby certify that on September 29, 2004, I delivered a certified
copy of the following resolutions to the Clerk of the Circuit Court of Fairfax County,
Virginia:
·
A Resolution Authorizing the Issuance of Public Improvement and
Refunding Bonds, Series 2004 B, of Fairfax County, Virginia,
Providing for the Competitive Sale of Such Bonds and Delegating
to the County Executive or the Chief Financial Officer Authority to
Determine
Certain Details of Such Bonds, Determine
the Refunded
Bonds and Accept the Lowest Responsive Bid for SuchBonds.
·
A Resolution Requesting the Board of Supervisors of Fairfax
County, Virginia, to Issue and Sell School Bonds of Fairfax
County, Virginia, Totaling $125,590,000 and Approving the Form
of a Tax Certificate and Authorizing the Execution Thereon
Nancy VehfS
(SEAL)
Clerk to th~ Board of Supervisors
Fairfax County, Virginia
This is to certify that these Resolutions were received in the Clerk's Office of the
Circuit Court of Fairfax County, Virginia, on the 29th day of September, 2004.
hn T. Frey ~
Clerk
of the Circuit
~
(SEAL)
Court
Fairfax County, Virginia
BOND
RESOLUTION
CERTIFICATE
I, Nancy Vehrs, Clerk to the Board of Supervisors of the County of Fairfax, Virginia (the
"County"), DO HEREBY CERTIFY that attached hereto as Exhibit A is a true, correct and
complete copy of a resolution of the Board of Supervisors of the County entitled: "A
RESOLUTION
REFUNDING
PROVIDING
TO
THE
AUTHORIZING
BONDS,
THE
SERIES
2004
FOR THE COMPETITIVE
COUNTY
EXECUTIVE
ISSUANCE
B,
OF
OF PUBLIC
FAIRFAX
IMPROVEMENT
COUNTY,
AND
VIRGINIA,
SALE OF SUCH BONDS AND DELEGATING
OR
THE
CHIEF
FINANCIAL
OFFICER
AUTHORITY
TO DETERMINE
CERTAIN DETAILS OF SUCH BONDS, DETERMINE
THE REFUNDED
BONDS AND ACCEPT
THE LOWEST
RESPONSIVE
BID FOR
SUCH BONDS.", as adopted by the Board of Supervisors on September 13, 2004 (the "Bond
Resolution") and that the Bond Resolution has not been amended or repealed since the date of its
adoption and is in full force and effect as of the date hereof.
IN WITNESS WHEREOF,
I have hereunto set my hand this 19th day of October, 2004.
?S~n
Nancy V
Clerk to the Board of Supervisors
County of Fairfax, Virginia
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5594603v1
A
a regular meeting of the Board of Supervisors of Fairfax County, Virginia, held in the Board
auditorium in the Government Center at 12000 Government Center Parkway, Fairfax, Virginia
on September 13, 2004, at which meeting a quorum was present and voting, the following
resolution was adopted:
A
RESOLUTION
PUBLIC
SERIES
AUTHORIZING
PROVIDING
BONDS
FOR
THE
AND
OR
AUTHORITY
TO
AND
SUCH
BONDS,
ACCEPT
COMPETITIVE
THE
CHIEF
DETERMINE
DETERMINE
THE
LOWEST
ISSUANCE
OF
REFUNDING
BONDS,
COUNTY,
VIRGINIA,
DELEGATING
EXECUTIVE
SUCH
THE
IMPROVEMENT
AND
2004 B, OF FAIRFAX
SALE
TO
THE
CERTAIN
OFFICER
DETAILS
REFUNDED
RESPONSIVE
SUCH
COUNTY
FINANCIAL
THE
OF
OF
BONDS
BID
FOR
BONDS.
BE IT RESOLVED
by the Board of Supervisors
of Fairfax County, Virginia:
Sectionl(a).
Public Improvement
Bonds.
The Board of Supervisors of Fairfax
County, Virginia (the "Board of Supervisors"), has found and determined and does hereby
declare
that:
(i) School improvements
- $125,590,000.
At an election duly called and held on
November 6, 2001, a majority of the qualified voters of Fairfax County, Virginia, voting on the
question, approved contracting a debt, borrowing money and issuing school bonds of Fairfax
County, Virginia, in the aggregate principal amount of $377,955,000.
The purpose of the school bonds stated in the election was for school improvements,
including acquiring, renovating, and/or building additional property, including acquiring and
completing improvements to sites, constructing new buildings or additions to buildings,
renovating or otherwise improving existing buildings, and furnishing and equipping buildings or
additions to buildings.
The Circuit Court of Fairfax County, Virginia, has duly entered its Final Order
authorizing the Board of Supervisors of Fairfax County, Virginia, to carry out the wishes of the
voters of the County as expressed at such election, and to contract a debt, borrow money, and
issue school bonds of Fairfax County, Virginia, in the aggregate principal amount of
$377,955,000.
The Board of Supervisors at the request of the School Board of Fairfax County, Virginia
has heretofore authorized the issuance of and has issued $116,420,000 of the school bonds fkom
the November
6, 2001 election.
There has been filed with the Board of Supervisors of Fairfax County, Virginia,
certified copies of a resolution of the County School Board entitled:
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5584300v3
two
RESOLUTION
SUPERVISORS
OF
ISSUE
AND
COUNTY,
APPROVING
AUTHORIZING
REQUESTING
THE
BOARD
FAIRFAX
COUNTY,
VIRGINIA,
SELL
SCHOOL
VIRGINIA,
THE
TOTALING
FORM
THE
BONDS
OF
EXECUTION
OF
FAIRFAX
$125,590,000
A TAX
OF
TO
CERTIFICATE
AND
AND
THEREOF.
The Board of Supervisors deems it advisable to authorize the issuance of additional
school bonds authorized at the November 6, 2001 election from which the proceeds from the sale
of such school bonds will equal $125,590,000 and to sell the bonds at this time.
(ii)
Parks and park facilities - $13,920,000. At an election duly called and held on
November 3, 1998, a majority of the qualified voters of Fairfax County, Virginia, voting on the
question approved contracting a debt, borrowing money and issuing bonds of Fairfax County,
Virginia, in the aggregate principal amount of $87,000,000 for the purpose of providing funds,
with any other available funds, to finance the cost of providing additional parks and park
facilities, of which amount said County may not pay in excess of $75,000,000 for the acquisition,
construction, development and equipment of additional parks and park facilities and the
development and improvement of existing parks and park facilities by the Fairfax County Park
Authority, and of which amount the County may not pay in excess of $ 12,000,000 as the share of
Fairfax County for the cost of parks and park facilities to be acquired, constructed, developed
and equipped by the Northern Virginia Regional Park Authority.
The Circuit Court of Fairfax County, Virginia has duly entered~ its Final Order
authorizing the Board of Supervisors of Fairfax County, Virginia, to proceed to carry out the
wishes of the voters of the County as expressed at such election and to contract a debt, borrow
money and issue bonds of Fairfax County, Virginia, in the aggregate principal amount of
$87,000,000 for such purpose.
The Board of Supervisors has heretofore authorized the issuance of and has issued (i)
$64,930,000 of the bonds for the Fairfax County Park Authority and (ii) $12,000,000 of the
bonds for the Northern Virginia Regional Park Authority, or a total of $76,930,000
of the
$87,000,000 of bonds authorized for additional parks and park facilities at the election duly
called and held on November
3, 1998.
At an election duly called and held on November 5, 2002, a majority of the qualified
voters of Fairfax County, Virginia,
voting on the question
approved
contracting
a debt,
borrowing money and issuing bonds of Fairfax County, Virginia, in the aggregate principal
amount of $20,000,000 for the purpose of providing funds, with any other available funds, to
finance, including reimbursement to the County for temporary financing for, the cost of
providing additional parks and park facilities by the Fairfax County Park Authority.
The Circuit Court of Fairfax County, Virginia has duly entered its Final Order
authorizing the Board of Supervisors of Fairfax County, Virginia, to proceed to carry out the
wishes of the voters of the County as expressed at such election and to contract a debt, borrow
NYI
5584300v3
and issue bonds of Fairfax County, Virginia, in the aggregate principal amount of
$20,000,000 for such purpose.
The Board of Supervisors of Fairfax County, Virginia has heretofore authorized the
issuance of and has issued $16,150,000
of the bonds authorized at the November
5, 2002
election.
The Board of Supervisors deems it advisable to authorize the issuance of the $10,070,000
balance of the bonds for the Fairfax County Park Authority authorized at the November 3, 1998
election
and to sell the bonds
at this time.
The Board of Supervisors
also deems it advisable to authorize the issuance of the
$3,850,000 balance of the parks and park facilities bonds authorized at the November 5, 2002
election
and to sell the bonds
at this time.
(iii)
Public safety facilities - $54,750,000. At an election duly called and held on
November 3, 1998, a majority of the qualified voters of Fairfax County, Virginia, voting on the
question approved contracting a debt, borrowing money and issuing bonds of Fairfax County,
Virginia, in the aggregate principal amount of $99,920,000 for the purpose of providing funds,
with any other available funds, to finance the cost of the construction, reconstruction,
enlargement and equipment of police, fire and rescue stations, including fire and rescue stations
owned by volunteer organizations, enlargement of County Courthouse facilities, and the
acquisition of necessary land.
The Circuit Court of Fairfax County, Virginia has duly entered its Final Order
authorizing the Board of Supervisors of Fairfax County, Virginia, to proceed to carry out the
wishes of the voters of the County as expressed at such election and to contract a debt, borrow
money and issue bonds of Fairfax County, Virginia, in the aggregate principal amount of
$99,920,000 for such purpose.
The Board of Supervisors
has heretofore
authorized the issuance of and has issued
$59,470,000 of such bonds authorized for public safety facilities at the election duly called and
held on November
3, 1998.
At an election duly called and held on November 5, 2002, a majority of the qualified
voters of Fairfax County, Virginia, voting on the question approved contracting a debt,
borrowing money and issuing bonds of Fairfax County, Virginia, in the aggregate principal
amount of $60,000,000, for the purpose of providing funds, with any other available funds, to
finance the cost of providing additional public safety facilities, including the construction of a
public safety communications center and an emergency operations center, renovation of court
facilities and construction, reconstruction, enlargement and equipment of fire and rescue stations,
including fire and rescue stations owned by volunteer organizations.
The Circuit Court of Fairfax County, Virginia has duly entered its Final Order
authorizingthe Board of Supervisors of Fairfax County, Virginia, to proceed to carry out the
wishes of the voters of the County as expressed at such election and to contract a debt, borrow
money and issue bonds of Fairfax County, Virginia, in the aggregate principal amount of
$60,000,000 for such purpose.
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5584300v3
Board of Supervisors of Fairfax County, Virginia has not issued any of the
$60,000,000 public safety facilities bonds authorized at the November 5, 2002 election.
The Board of Supervisors deems it advisable to authorize the issuance the $40,450,000
balance
of the bonds authorized
at the November
3, 1998 election
and to sell the bonds at this
time.
The Board of Supervisors also deems it advisable to authorize the issuance of public
safety facilities bonds authorized at the November 5, 2002 election fi·om which the proceeds
from the sale of such public facilities bonds will equal $·14,300,000, and to sell the bonds at this
time.
(iv)
Commercial and Redevelopment Area Improvements
- $4,500,000. At an
election duly called and held on November 8, 1988, a majority of the qualified voters of Fairfax
County, Virginia, voting on the question approved contracting a debt, borrowing money and
issuing bonds of Fairfax County, Virginia, in the aggregate principal amount of $32,000,000 for
the purpose of providing funds, with any other available funds, to finance the cost of a project to
provide public improvements in commercial and redevelopment areas of the County, including
the construction and reconstruction of utilities, roadways and sidewalks, including necessary
curbs,'gutters, culverts, drains, street lights, signage and landscaping, and the acquisition of
necessary land, of which the County may pay not to exceed $9,700,000 for the construction and
reconstruction of utilities, roadways and sidewalks, including necessary curbs, gutters, culverts,
drains, street lights, signage and landscaping, by the Fairfax County Redevelopment and
Housing Authority.
The Circuit Court of Fairfax County, Virginia has duly entered its Final Order
authorizing the Board of Supervisors of Fairfax County, Virginia, to proceed to carry out the
wishes of the voters of said County as expressedat said election and to contract a debt, borrow
money and issue bonds of Fairfax County, Virginia, in the aggregate principal amount of
$32,000,000 for such purpose.
The Board of Supervisors has heretofore authorized the issuance of and has issued
$18,870,000 of such bonds for public improvements in commercial and redevelopment areas
authorized
at the November
8, 1988 election.
The Board of Supervisors deems it advisable, pursuant to the provisions of Section 15.22663, Code of Virginia, 1950, as amended, to elect to issue the following amount of such bonds
under the provisions of Chapter 5, Title 15.1, Code of Virginia, 1950, as amended, as the same
existed on June 30, 1991.
The Board of Supervisors deems it advisable to authorize the issuance of an additional
$4,500,000 of such bonds authorized at the November 8, 1988 election and to sell the bonds at
this
time.
Section l(b). Prior bond issues.
The Board of Supervisors has been advised that
certain bonds of certain series of its outstanding public improvement bonds, in certain favorable
market conditions, may be refunded to achieve substantial present value debt service savings.
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5584300v3
Board of Supervisors deems it advisable
improvement refunding bonds to achieve such savings.
to authorize
the issuance of public
The Board of Supervisors has further found and determined and does hereby declare that:
(i) Series 1997 B Bonds. For the purpose of providing funds for school improvements,
the Board of Supervisors duly issued bonds of Fairfax County, Virginia (the "County"), in the
aggregate principal amount of $60,000,000, designated "Public Zmprovement Bonds, Series 1997
B (the "Series 1997 B Bonds"), dated as of December i, 1997 and, in the case of the outstanding
callable Series 1997 B Bonds, maturing on December 1 in the years and amounts and bearing
interest
as follows:
Year of
Maturity
Principal
Amount
Znterest
Rate
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
$3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
4.50%
4.50
5.00
5.00
5.00
· 5.00
5.00
5.00
5.00
5.00
5.00
5.00
such interest being payable semiannually on the Ist days of June and December in each year.
The Series 1997 B Bonds which mature on or before December i, 2005 are not subject to
redemption before maturity. Series 1997 B Bonds which mature after December 1, 2005 may be
redeemed, at the option of the County, before their respective maturities, on not more than 60 nor
less than 30 days' notice mailed to the registered owners, on any date not earlier than December
i, 2005, in whole or in part tin integral multiples of $5,000), upon payment of the following
redemption prices (expressed as a percentage of the principal amount of bonds to be redeemed)
plus accrued interest to the redemption date:
Redemption
Period Iboth dates inclusive)
Redemption
December i, 2005 through November 30, 2006
December i, 2006 through November 30, 2007
102%
101
December
100
1, 2007 and thereafter
(ii) Series 1998 A Bonds.
Price
For the purpose of providing funds, with other available
funds, for school improvements, transportation improvements, transit facilities, parks and park
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5584300v3
public safety facilities, neighborhood improvements, human services facilities, adult
detention facilities, public library facilities, juvenile detention facilities and commercial and
redevelopment area improvements, the Board of Supervisors duly issued bonds of Fairfax
County, Virginia, in the aggregate principal amount of $76,000,000 designated "Public
Improvement Bonds, Series 1998 A" (the "Series 1998 A Bonds"), dated as of May 15, 1998
and, in the case of the outstanding callable 1998 A Bonds, maturing on June 1 in the years and
amounts and bearing interest as follows:
Year of
Maturity
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Principal
Amount
3,800,000
3,800,000
3,800,000
3,800,000
3,800,000
3,800,000
3,800,000
3,800,000
3,800,000
3,800,000
3,800,000
3,800,000
Interest
Rate
4.75
5.00
5.00
5.00
5.00
5.00
5.00
5.00
5.00
5.00
5.00
. 5.00
The Bonds which mature on or before June 1, 2006 are not subject to redemption before
maturity. Bonds which mature after June i, 2006 may be redeemed, at the option of the County,
before their respective maturities, on any date not earlier than June 1, 2006, in whole or in part
tin integral multiple's of $5,000), upon payment of the following redemption prices (expressed as
a percentage of the principal amount of Bonds to be redeemed) plus accrued interest-to
redemption date:
Redemption
Period (both dates inclusive)
June 1, 2006 throughMay`31,2007
Redemption
the
Price
102%
June i, 2007 through May 31, 2008
101
June i, 2008 and thereafter
100
(iii) Series 1999 B Bonds. For the purpose of providing funds, with other available
funds, for school improvements, parks and park facilities and neighborhood improvements, the
Board of Supervisors duly issued bonds of Fairfax County, Virginia (the "County"), in the
aggregate principal amount of $83,600,000, designated "Public Improvement Bonds, Series 1999
B (the "Series 1999 B Bonds"), dated as of December 1, 1999 and, in the case of the outstanding
callable Series 1999 B Bonds, maturing on December 1 in the years and amounts and bearing
interest
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as follows:
5584300v3
of
Maturity
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Principal
Amount
$4,180,000
4,180,000
4,180,000
4,180,000
4,180,000
4,180,000
4,180,000
4,180,000
4,180,000
4,180,000
4,180,000
4,180,000
Interest
Rate
5.00%
5.00
5.30
5.40
5.50
5.50
5.50
5.50
5.50
5.50
5.50
5.50
such interest being payable semiannually on the Ist days of June and December in each year.
The Series 1999 B Bonds which mature on or before December 1, 2007 are not subject to
redemption before maturity. Series 1999 B Bonds which mature after December 1, 2007 may be
redeemed, at the option of the County, before their respective maturities, on not more than 60 nor
less than 30 days' notice mailed to the registered owners, on any date not earlier than December
1, 2007, in whole or in part tin integral multiples of $5,000), upon payment of the following
redemption prices (expressed as a percentage of the principal amount of bonds to be redeemed)
plus accrued interest to the redemption date:
Redemption
Period ~both dates inclusive)
December i, 2007 through November 30, 2008
December 1, 2008 through November 30, 2009
December
1, 2009 and thereafter
Redemption
Price
102%
~ 101
100
(iv) Series 2000 A Bonds. For the purpose of providing funds, with other available
funds, school improvements, parks and park facilities, transportation improvements and
facilities, public library facilities, adult detention facilities, public safety facilities, neighborhood
improvements, commercial and redevelopment area improvements, and human services
facilities, the Board of Supervisors duly issued bonds of Fairfax County, Virginia (the
"County"), in the aggregate principal amount of $88,000,000, designated "Public Improvement
Bonds, Series 2000 A (the "Series 2000 A Bonds"), dated as of April 1, 2000 and, in the case of
the outstanding callable Series 2000 A Bonds, maturing on June 1 in the years and amounts and
bearing interest as follows:
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5584300v3
of
Maturity
Principal
Amount
Interest
Rate
2009
2010
2011
2012
4,400,000
4,400,000
4,400,000
4,400,000
5.00
5.00
5.00
5.00
2013
2014
2015
4,400,000
4,400,000
4,400,000
5.00
5.125
5.20
2016
2017
4,400,000
4,400,000
5.25
5.25
2018
2019
2020
4,400,000
4,400,000
4,400,000
5.25
5.25
5.25
The Series 2000 A Bonds which mature on or before June 1, 2008 are not subject to
redemption before maturity. Series 2000 A Bonds which mature after June 1, 2008 may be
redeemed, at the option of the County, before their respective maturities, on not more than 60 nor
less than 30 days' notice mailed to the registered ownersj on any date not earlier than December
i, 2007, in whole or in part tin integral multiples of $5,000), upon payment of the following
redemptionprices (expressedas a percentage of the principal amount of bonds to be redeemed)
plus accrued interest to the redemption date:
Redemption Period (both dates inclusive)
Redemption Price
June 1, 2008 through May 31, 2009
June i, 2009 through May 31, 2010
102%
101
June 1, 2010 and thereafter
100
(v)
The Board of Supervisorshas determinedto provide for the issuance of refunding
bonds of Fairfax County, Virginia, for the purpose of providing funds, with other available
funds, to refund all or a portion of all or any of the following outstanding bonds of Fairfax
County,Virginia(collectively,the "RefundingCandidates"),all as hereinafterprovided:
$36,000,000 Series 1997 B Bonds maturing December 1 in the·years 2006 to 2017,
inclusive,which are first subjectto, and shall be called for, redemptionon December i, 2005,
$45,600,000Series 1998 A Bonds maturing June 1 in the years 2007 to 2018, inclusive,
which are first subject to, and shall be called for, redemption on June 1, 2006,
$50,160,000 Series 1999 B Bonds maturing December 1 in the years 2008 to 2019,
inclusive, which are first subject to, and shall be called for, redemption on December 1, 2007,
and
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5584300v3
Series 2000 A Bonds maturing June 1 in the years 2009 to 2020, inclusive,
which are first subject to, and shall be called for, redemption on June 1, 2008.
Section 2. Authorization of bonds. The Board of Supervisors has determined that it is
in the best interests of Fairfax County to consolidate for the purposes of the sale the bond
authorizations mentioned above into a single issue of public improvement and refunding bonds
ofr;airfax County, Virginia. The bonds shall be designated "Public Improvement and Refunding
Bonds, Series 2004 B", shall be dated, shall be stated to mature, subject to the right of prior
redemption, all as hereinafter provided.
The Board of Supervisors deems it advisable to sell the bonds at this time.
The bonds issued for the purpose of providing fUnds school improvements, parks and
park facilities, public safety facilitiesand commercialand redevelopmentarea improvementsin
the respective amounts referred to above shall mature on December 1 in the following years and
in the following amounts, subject to adjustment as hereinafter provided:
Year of
Maturity
Principal
Amount
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
$ 9,935,000
9,935,000
9,935,000
9,935,000
9,935,000
9,935,000
9,935,000
9,935,000
9,935,000
9,935,000
Year of
Maturity
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Principal
Amount
·
$ 9,935,000
9,935,000
9,935,000
9,935,000
9,935,000
9,935,000
9,935,000
9,935,000
9,935,000
9,995,000
and shall bear interest until their payment at a rate or rates as shall hereafter be determined by the
Board of Supervisors by resolution or pursuant to the delegation of authority to the County
Executive
or Chief
Financial
Officer
contained
in this resolution.
The bonds issued for the purpose of providing funds, with other available funds,
to refund all or a portion of all or any of the Refunding Candidates(the RefundingCandidatesso
refunded, the "Refunded Bonds") shall mature on December 1 in such principal amounts and
shall bear interest until their payment at a rate or rates as shall hereafter be.determined by the
Board of Supervisors by resolution or pursuant to the delegation of authority to the County
Executive or Chief Financial Officer contained in this resolution, to produce debt service savings
in each of the fiscal y~ars that the Refunded Bonds were scheduled to mature, beginning no later
than the fiscal year ending June 30, 2007.
Such interest to the respective maturities of the bonds shall be payable on the Ist days of
June and December in each year, the first interest payment date being June 1, 2005, if not
otherwise determined pursuant to the delegation of authority contained in this resolution. If none
of the proceeds of the bonds as authorized should be used for refunding any of the RefUnding
Candidates, then the bonds shall be designated "Public Improvement Bonds, Series 2004 B".
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5584300v3
bonds shall be issuable in fully registered form in the denomination
multiple thereof and shall be appropriately numbered.
of $5,000 or any
Each bond shall bear interest ~om the interest payment date next preceding the date on
which it is authenticated unless it is (a) authenticated upon an interest payment date in which
case it shall bear interest from such interest payment date or (b) authenticated prior to the first
interest payment date in which case it shall bear interest from its date; provided, however, that if
at the time of authentication interest on any bond is in default, such bond shall bear interest fi·om
the date to which interest has been paid.
The principal of and the interest and any redemption premium on the bonds shall be
payable in any coin or currency of the United States of America which is legal tender for the
payment of public and private debts on the respective dates of payment thereof. The principal of
and any redemption premium on each bond shall be payable to the registered owner thereof or
his registered assigns or legal representative at the office of the Bond Registrar mentioned
hereinafter upon the presentation and surrender thereof as the same shall become due and
payable. Payment of the interest on each bond shall be made by the Bond Registrar on each
interest payment date to the person appearing thereafter provided) on the registration books of
the County as the registered owner of such bond (or the previous bond or bonds evidencing the
same debt as that evidenced by such bond) at the close of business on the record date for such
interest, which, unless otherwise determined pursuant to the delegation of authority contained in
this resolution, shall be the 15th day (whether or not a business day) of the calendar month next
preceding such interest payment date, by check mailed or by wire transfer to such person at his
address as it appears on such registration books.
The bonds initially issued will be in fully registered form and registered in the name of
Cede & Co., a nominee of The Depositary Trust Company,New York, New York ("DTC"), and
immobilized in the custody of DTC. One fully registered bond for the original principal amount
of each maturity will be registered to Cede & Co. Beneficial owners will not receive physical
deliveryof bonds. Individualpurchasesof bonds may be made in book-entryform only in
original principal amounts of $5,000 and integral multiples of $5,000. Payments of the principal
of and premium, if any, and interest on the bonds will be made to DTC or its nominee as
registered owner of the bonds on the applicable payment date.
So long as Cede & Co., or its successor, as nominee of DTC, is the registered owner of
the bonds, references
mean
the beneficial
in this resolution
owners
to the holders
of the bonds mean Cede & Co. and do not
of the bonds.
Replacement bonds (the "Replacement Bonds") will be issued directly to beneficial
owners of bonds rather than to DTC, or its nominee, but only in the event that:
(1)
DTC determines not to continue to act as securities depository for the
bonds;
(2)
The County has advised DTC of its determination that DTC is incapable
of discharging its duties; or
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584300v3
The County has determined that it is in the best interests of the beneficial
owners of the bonds not to continue the book-entry system of transfer.
Upon occurrence of the events described in clause (1) or (2), the County will attempt to
locate another qualified securities depository. If DTC makes the determination described in
clause (1) and the County fails to select another qualified securities depository to replace DTC,
the County will execute and the Bond Registrar will authenticate and deliver to the participants
in DTC ("Participants") the Replacement Bonds to which the Participants are entitled. In the
event the County makes the determination described in clause (2) or (3) (the County undertakes
no obligation to make any investigation to determine the occurrence of any events that would
permit the County to make any such determination) and, in the case of the determination under
clause (2), the County has failed to designate another qualified securities depository and has
made provisions to notify the beneficial owners of the bonds by mailing an appropriate notice to
DTC, the County will execute and the Bond Registrar will authenticate and deliver to the
Participants the appropriate Replacement Bonds to which the Participants are entitled. The Bond
Registrar is entitled to rely on the records provided by DTC as to the Participants entitled to
receive Replacement Bonds.
Section 3.
Notice of Sale; Bids.
The Clerk of the Board of Supervisors is hereby
authorized and directed to cause a notice calling for bids for the purchase of the bonds, to be
published once in The Bond Buyer, a financial journal published in New York, New York, and
devoted primarily to municipal bonds, such publication to be at least five days prior to the date
fixed for the receipt of bids. Such notice shall be substantially in the form of the Notice of Sale
annexed to this resolution. Alternatively, the Clerk may cause to be published a summary of the
principal terms of the notice. Bids shall be received electronically via the PARITY Competitive
Bidding System.
Section 4.
OfficialStatement.
The draft of the Preliminary Official Statement of the
County relating to the bonds and presented at the meeting at which this resolution is adopted, and
the circulation thereof, the completion thereof with the results of the sale and the printing and
delivery to the winning bidder of a reasonable number of copies thereof as so completed (the
"final Official Statement")
are hereby approved and authorized,
and the Chairman or Vice
Chairman of the Board of Supervisors is hereby authorized and directed to deem final the
Preliminary Official Statement for purposes of Rule 15c2-12 adopted by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended, and to execute
and deliver the final Official Statement, both the Preliminary Official Statement and the final
Official Statement to be in substantially the form of the draft Preliminary Official Statement
presented at this meeting with the changes contemplated hereby and such other changes as the
Chairman or Vice Chairman may approve, her or his signature on the final Official Statement to
be conclusive evidence of the signer's approval thereof. The Preliminary Official Statement and
the final Official Statement may be disseminated or otherwise made available through electronic
means.
Section 5.
Delegation and Standard. The Board of Supervisors of Fairfax County,
Virginia, has determined that there may be unplanned occasions when it is not possible for some
of the members of the Board of Supervisors to attend a special meeting for the purpose of
receiving bids for the purchase of bonds of Fairfax County offered for sale at competitive
NYI
5584300v3
and that the accepted practice of the bond markets dictates that the lowest bid be
speedily determined and the bonds be promptly awarded or that all bids be rejected.
The Board delegates to the County Executive or the Chief Financial Officer, the authority
to accept the lowest bid (determined in accordance with the Notice of Sale) for the bonds, being
offered for sale by the Board at competitive bidding on a date not later than October 31, 2004,
subject to the following conditions: (i) the person to whom the authority to accept the lowest bid
has been delegated shall have determined that the bid conforms in all material respects to the
requirements of the Notice of Sale, (ii) such person shall have determined that the bid to be
accepted is the lowest bid conforming to the terms'of the Notice of Sale, (iii) the Financial
Advisor to Fairfax County shall have recommended that the lowest conforming bid be accepted,
(iv) the True or Canadian interest cost of such bid shall not exceed 6.00% and (v) the Board of
Supervisors shall not then be in special session called for the purpose of accepting bids (the
Board not to be deemed in special session if less than a quorum is present and voting).
The Board of Supervisors hereby further delegates to the County Executive or the Chief
Financial Officer, subject to the limitations contained herein, powers and duties to determine the
following, such delegation to be effective only if the Board of Supervisors shall not then be in
session (the Board not to be deemed in session if less than a quorum is present and voting):
(1)
The aggregate principal amount and the principal amount of each- maturity or
maturities of the Refunded Bonds; provided, however, that the present value of the debt service
savings to be obtained from the refUnding of the Refunded Bonds is not less than 4% of the
principal amount of the Refunded Bonds or at least $1,000,000;
(2)
The aggregate principal amount (the "Principal Amount") of the bonds, such
amount not to exceed the sum of the newly authorized and issued bonds, plus the amount
required to fund a sufficient escrow to defease and redeem the Refunded Bonds plus all or any
portion of costs of issuance;
(3)
The respective annual maturity dates and any mandatory redemption dates of the
bonds, ~ind the respective principal amounts of the bonds to mature or be redeemed on such
dates, provided that the first maturity date shall occur no later than December 1,~2005, and the
final maturity date shall not be later than December i, 2024;
(4)
The dated date of the bonds provided, however, the bonds shall be dated their date
of issue or as of a customary date preceding their date of issue;
(5)
The semi-annual interest payment dates for the bonds and the record date for the
bonds; and
(6)
The verification agent, Escrow Agent and the particular Escrow Securities las
referred to in the Escrow Deposit Agreement hereinafter mentioned) and the form thereof and the
terms of any related agreement, (including a forward purchase agreement for the delivery of
open-market Escrow Securities), with respect thereto that in his judgment, upon the
recommendation of the County's Financial Advisor, will improve the efficiency of the Escrow
Securities in defeasing the Refunded Bonds.
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5584300v3
Board further delegates to the County Executive or the Chief Financial Officer, the
authority to accept the lowest bid (determined in accordance with the Notice of Sale) for the
bonds, being offered for sale by the Board at competitive bidding on a date not later than
October 31, 2004, subject to the following conditions: (i) the person to whom the authority to
accept the lowest bid has been delegated shall have determined that the bid conforms in all
material respects to the requirements of the Notice of Sale, (ii) such person shall have determined
that the bid to be accepted is the lowest bid conforming to the terms of the Notice of Sale, (iii)
the Financial Advisor to Fairfax County shall have recommended that the lowest conforming bid
be accepted, (iv) the True or Canadian interest cost of such bid shall not exceed 6.00% and (v)
the Board of Supervisorsshall not then be in special session called for the purpose of accepting
bids (the Board not to be deemedin specialsessionif less than a quorumis present and voting).
The Board of Supervisors hereby further delegates to the County Executive or the Chief
Financial Officer authority to allocate to the bonds referred to in Section la(i) school bonds and
Section la (iii) public facilities bonds, on the one hand, and to the bonds described in Section
l(b) refundingbonds, on the other hand, the premiumreceivedupon the sale of the bonds, taking
into account, among other things, the reoffering prices for thevarious maturities of the bonds,
and reduce the principal amount of the bonds described in Section l(a)(i) and Section l(a)(iii)
proportionately so as to produce proceeds approximately equal to the respective amounts
authorized to be issued for such purposes by Section l(a)(i) and Section l(a)(iii).] ·
Section 6. Form of bonds. The bonds shall bear the facsimile signah~es of the
Chairman and the Clerk of the Board of Supervisors and a facsimile of the official seal of the
Board shall be imprinted on the bonds. The certificate of authentication of the Bond Registrar to
be endorsed on all bonds shall be executed as provided hereinafter.
In case any officer of Fairfax County whose facsimile signature shall appear on any
bonds shall cease to be such officer before the delivery of such bonds, such facsimile signature
shall nevertheless be valid and sufficient for all purposes the same as if she or he had remained in
office until such delivery, and any bond may bear the facsimile signatures of such persons at the
actual time of the execution of such bond shall be the proper officers to sign such bond although
at the date of such bond such persons may not have been such officers.
No bond shall be valid or become obligatory for any purpose or be entitled to any benefit
or security under this resolution until it shall have been authenticated by the execution by the
Bond Registrar of the certificate of authentication endorsed thereon.
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5584300v3
bonds and the endorsement thereon shall be substantially in the following form:
CDepository Legend]
(Face ofBond)
No.
$
United
States
ofAmerica
Commonwealth ofVirginia
FAIRFAX
Public Improvement
Maturity
Date
[December i, 20
and Iliefundine
Interest Rate
i
COUNTY
Bondl, Series 2004 B
Dated Date
%
CUSIP
,2004
Fairfax County, Virginia, is justly indebted and for value received hereby promises to
pay to
or registered assigns or legal representative on the date specified above (or earlier as hereinafter
referred to), upon the presentation and surrender hereof, at the office of the Director of the
Department of Finance of Fairfax County, Virginia (the "Bond Registrar"), in Fairfax County,
Virginia, the principal sum of
DOLLARS
and to pay interest on such principal sum fi·om the date hereof or fi·om the [June 1 or
December 1] next preceding the date of authentication to which interest shall have been paid,
unless such date of authentication is a [June 1 or a December 1] to which interest shall have been
paid, in which case from such date, such interest to the maturity hereof being payable
semiannually on the Ist days of June and December in each year, the first interest payment date
being June i, 2005, at the rate per annum specified above, until payment of such principal sum.
The interest so payable on any such interest payment date will be paid to the person in whose
name this bond (or the previous bond or bonds evidencing the same debt as that evidenced by
this bond) is registered at the close of business on the record date for such interest, which shall
be the 15th day (whether or not a business day) of the calendar month next preceding such
interest payment date, by wire transfer, at the discretion of the County, or check mailed to such
person at his address as it appears on the bond registration books of the County. Both the
principal of and the interest on this bond shall be payable in any coin or currency of the United
States of America which is legal tender for the payment of public and private debts on the
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5584300v3
dates of payment thereof. For the prompt payment hereof, both principal and interest
as the same shall become due, the full faith and credit of the County are hereby irrevocably
pledged.
This bond and the bonds of the series of which it is one are issued under and pursuant to a
resolution duly adopted by the Board of Supervisors of Fairfax County, Virginia on September
13, 2004 (the "Resolution"), for the purpose of providing funds, with other available funds, for
school improvements, parks and park facilities, public safety facilities and commercial and
redevelopment area improvements [and (ii) refUnding portions of [four] outstanding series of
bonds of Fairfax County, Virginia designated [Public Improvement Bonds, Series 1997B3,
[Public Improvement Bonds, Series 1998A3, [Public Improvement Bonds, Series 1999B3, and
[Public Improvement Bonds, Series 2000A]1.
The bonds of this series which mature on or before [December 1, 2014] are not subject to
redemption before maturity. Bonds which mature after CDecember 1, 2014] may be redeemed, at
the option of the County, before their respective maturities on any date not earlierthan
[December 1, 2014], in whole or in part tin integral multiples of $5,000), upon payment of the
redemption price of par plus accrued interest to the redemption date.
[~n addition, the term bonds of this series stated to mature on December i, 20_
shall be
called for mandatory redemption in the amounts of the amortization requirements established
pursuant to the delegation of authority contained in the Resolution on December i, 20
and on
each December 1 thereafter at a redemption price equal to the principal amount thereof plus
accrued interest to the date of redemption and without premium.
Term bonds of this series purchased or redeemed pursuant to a partial optional
rede~ption by the County may be credited against the amortization requirements therefor as the
County in its sole discretion may determine.]
If less than all of the bonds of any one maturity shall be called for redemption, the
particular bonds or portions of bonds of such maturity to be redeemed shall be selected by lot by
the County in such manner as the County in its discretion may determine; provided, however,
that the portion of any bond to be redeemed shall be in the principal amount of $5,000 or some
multiple thereof and that, in selecting bonds for redemption, the County shall treat each bond as
representing that number of bonds which is obtained by dividing the principal amount of such
bond by $5,000.
Not more than sixty (60) nor less than thirty (30) days before the redemption date of any
bonds to be redeemed, whether such redemption be in whole or in part, the County shall cause a
notice of such redemption to be filed with the Bond Registrar and to be mailed, postage prepaid,
to the registered owner of each bond to be redeemed in whole or in part at his address appearing
upon the registration books of the County, but failure to mail such notice or any defect therein
shall not affect the validity of the redemption. If a portion of this bond shall be called for
redemption, a new bond or bonds in principal amount equal to the unredeemed portion hereof
will be issued to the registered owner hereof or his legal representative upon the surrender
hereof.
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5584300v3
notice of optional redemption of the Bonds may state that it is conditioned upon
there being available an amount of money sufficient to pay the redemption price plus interest
accrued and unpaid to the redemption date, and any conditional notice so given may be rescinded
at any time before the payment of the redemption price of any such condition so specified is not
satisfied. If a redemption does not occur after a conditional notice is given due to an insufficient
amount of funds on deposit by the County, the corresponding notice of redemption shall be
deemed
to be revoked.
If the County gives an unconditional notice of redemption, then on the redemption date
the Bonds called for redemption will become due and payable. If the County gives a conditional
notice of redemption, and the amount of money to pay the redemption price of the affected
Bonds shall have been set aside with the Trustee or a depositary (either, a "depositary") for the
purpose of paying such Bonds, then on the redemption date the Bonds will become due and
payable. In either case, if on the redemption date the County holds money to pay the Bonds
called for redemption,thereafterno interestwill accrue on those Bonds, and a bondholder's only
right will be to receive payment of the redemption price upon surrender of those Bonds.
The County shall give notice as contemplated by Securities Exchange Act of 1934
Release No. 34-23856,dated December 3, 1986, including the requirementthat notice be given
to all organizations registered with the Securities Exchange Commission as securities
depositories, and to one or more information services of national recognition which disseminate
redemption information with respect to tax-exempt securities.
The bonds are issuable in fully registered form in the denomination of $5,000 or any
multiple thereof. At the office of the Bond Registrar, in the manner and subject to the conditions
provided in the Resolution, bonds may be exchanged for an equal aggregate principal amount of
bonds of the same series and maturity, of authorized denominationsand bearing interest at the
same
rate.
The Bond Registrar shall keep at its office the books of the County for the registration of
transfer of bonds. The transfer of this bond may be registered only upon such books and as
otherwiseprovided in the Resolution upon the surrenderhereof to the Bond Registrar together
with an assignment duly executed by the registered owner hereof or his attorney or legal
representative in such form as shall be satisfactory to the Bond Registrar. Upon any such
registration of transfer, the Bond Registrar shall deliver in exchange for this bond a new bond or
bonds, registered in the name of the transferee, of authorized denominations,in an aggregate
principal amount equal to the unredeemed principal amount of this bond, of the same series and
maturity and bearing interest at the same rate.
The Bond Registrar shall not be requiredto exchangeor register the transfer of any bond
during a period beginning at the opening of business fifteen (15) days before the day of mailing
of a notice of redemption of any bonds and ending at the close of business on the day of such
mailingor of any bond called for redemptionin whole or in part pursuantto the Resolution.
This bond is one of a series issued under the authorityof and in full compliancewith the
Constitutionand laws of Virginia,particularlythe Public Finance Act of 1991, Chapter26, Title
15.2, Code of Virginia, 1950, as amended, and pursuant to votes of a majority of the qualified
NYI
5584300v3
of Fairfax County, Virginia, voting at elections duly called and held under the provisions
of the Code of Virginia, 1950, as amended, and under orders of the Circuit Court of Fairfax
County, Virginia, authorizing the Board of Supervisors of the County to proceed to carry out the
wishes of the voters as expressed at such elections, and pursuant to resolutions duly adopted by
the Board of Supervisors and the County School Board of the County.
It is hereby certified and recited that all acts, conditions and things required by the
Constitution and laws of Virginia to happen, exist and be performed precedent to and in the
issuance of this- bond have happened, exist and have been performed in due time, form and
manner as so required, that the total indebtedness of Fairfax County, Virginia, including this
bond, does not exceed any constitutional or statutory limitation thereon, and that provision has
been made for the levy and collection of an annual ad valorem tax upon all taxable property in
the County subject to local taxation sufficient in amount to provide for the payment of the
principal of and the interest on this bond as the same shall become due which tax shall be
without
limitation
as to rate or amount
and shall be in addition
to all other
taxes
authorized
to be
levied in the County to the extent other funds of the County are not lawfully available and
appropriated for such purpose.
This bond shall not be valid or become obligatory for any purpose or be entitled to any
benefit or security under the resolution mentioned hereinafter until this bond shall have been
authenticated by the execution by the Bond Registrar of the certificate of authentication endorsed
hereon.
NYI
5584300v3
WITNESS WHEREOF, the Board of Supervisors of Fairfax County, Virginia, has
caused this bond to be issued in the name of Fairfax County, Virginia, and the Board has caused
this bond to bear the facsimile signatures of its Chairman and Clerk and a facsimile of the
official seal of the Board to be imprinted hereon, all as of the
day of
,2004.
(Facsimile signature)
(Facsimile signature)
Clerk, Board of Supervisors
of Fairfax County, Virginia
Chairman, Board of Supervisors
of Fairfax County, Virginia
(Facsimile seal)
CERTIFICATE
OF
AUTHENTICATION
This bond is one of the bonds of the series designated herein and described in the within
mentioned
Resolution.
Director of the Department of Finance of
Fairfax County, Virginia as Bond Registrar
By
Authorized Signature
Date of authentication:
,2004
(Form of Assignment)
ASSIGNMENT
FOR VALUE RECEIVED,
the undersigned registered owner hereby sells, assigns and transfers
unto
Please insert social security or
other identifvinrz number of assinnee
(Please Print or Typewrite Name and Address of Transferee)
NYI
5584300v3
within bond, and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to register the transfer of the within bond on the
books kept for registration thereof, with full power of substitution in the premises.
Dated:
NOTICE: The signature to this assignment must correspond with the name as it appears upon
the face of the within bond in every particular, without alteration or enlargement or any change
whatever.
Signature Guaranteed" by:
"Signature(s) must be guaranteed by an "eligible guarantor institution" meeting the requirements
of the Trustee which requirements will include membership or participation in STAMP or such
other "signature guarantee program" as may be determined by the Trustee in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.
Section 7(a). Optional redemption.
(1) Unless otherwise determined pursuant to the
delegation of authority contained in paragraph (2) of this Section 7(a), the bonds will have the
following optional redemption provisions. The bonds of this series which mature on or before
December 1, 2014 are not subject to redemption before maturity. Bonds which mature after
December i, 2014 may be redeemed, at the option of Fairfax County, Virginia, before their
respective maturities on any date not earlier than December i, 2014, in whole or in part tin
integral multiples of $5,000), upon payment of the redemption price of par plus accrued interest
to the redemption date.
(2)
The Board of Supervisors hereby delegates to the County Executive or the Chief
Financial Officer, subject to the limitations contained herein, the authority to alter any of the
optional redemption provisions for the bonds fkom those set forth in paragraph (1) above of this
Section 7(a). The first optional call date for the bonds must be no later than 10 and one-half
years after the date of issue of the bonds. The maximum redemption price for the bonds may not
exceed 103% of the principal amount of the bonds to be redeemed. Such delegation shall be
effective only if the Board of Supervisors shall not then be in session (the Board not to be
deemed in session if less than a quorum is present and voting).
Section 7(b). Mandatory re'demption. The term bonds of this series, if any, shall be
called for redemption, in part, in the principal amounts equal to the respective amortization
requirements for the term bonds of this series (less the principal amount of any term bond of this
series retired by purchase or optional redemption) at a price of par plus accrued interest thereon
to the date fixed for redemption on each December 1S',or other date specified pursuant to the
delegation of authority contained in this resolution, preceding their maturity for which there is an
amortization requirement.
In the event of a partial optional redemption or purchase of any such term bonds, the
County will credit the principal amount of such term bonds so purchased or redeemed against the
NYI
5584300v3
requirements for the remaining term bonds outstanding in such amount and in such
years as it in its sole discretion shall determine.
Section 7(c). Redemption provisions in general. If less than all of the bonds of any
one maturity shall be called for redemption, the particular bonds or portions of bonds of such
maturity to be redeemed shall be selected by lot by the County in such manner as the County in
its discretion may determine; provided, however, that the portion of any bond to be redeemed
shall be in the principal amount of $5,000 or some multiple thereof and that, in selecting bonds
for redemption, the County shall treat each bond as representing that number of bonds which is
obtained by dividing the principal amount of such bond by $5,000.
Not more than sixty (60) nor less than thirty (30) days before the redemption date of any
bonds to be redeemed, whether such redemption be in whole or in part, the County shall cause a
notice of such redemption to be filed with the Bond Registrar and to be mailed, postage prepaid,
to the registered owner of each bond to be redeemed in whole or in part at his address appearing
upon the registration books of the County, but failure to mail such notice or any defect therein
shall not affect the vali~ity of the redemption.
Each such notice shall set forth the date
designated for redemption, the redemption price to be paid, the maturities of the bonds to be
redeemed and, if less than all of the bonds of any one maturity then outstanding shall be called
for redemption, the distinctive numbers and letters, if any, of such bonds to be redeemed and, in
the case of any bond to be redeemed in part only, the portion of the principal amount thereof to
be redeemed. If any bond is to be redeemed in part only, the notice of redemption shall state also
that on or after the redemption date, upon surrender of such bond, a new bond or bonds in
principal amount equal to the unredeemed portion of such bond will be issued.
Any notice of optional redemption of the Bonds may state that it is conditioned upon
there being available an amount of money sufficient to pay the redemption price plus interest
accrued and unpaid to the redemption date, and any conditional notice so given may be rescinded
at any time before the payment of the redemption price of any such condition so specified is not
satisfied. If a redemption does not occur after a conditional notice is given due to an insufficient
amount of funds on deposit by the County, the corresponding
deemed
notice of redemption
shall be
to be revoked.
If the County gives an unconditional notice of redemption, then on the redemption date
the Bonds called for redemption will become due ·and payable. If the County gives a conditional
notice of redemption, and the amount of money to pay the redemption price of the affected
Bonds shall have been set aside with the Trustee or a depositary (either, a "depositary") for the
purpose of paying such Bonds, then on the redemption date the Bonds will become due and
payable. In either case, if on the redemption date the County holds money to pay the Bonds
called for redemption, thereafter no interest will accrue on those Bonds, and a bondholder's only
right will be to receive payment of the redemption price upon surrender of those Bonds.
The County shall give notice as contemplated
by Securities Exchange Act of 1934
Release No. 34-23856, dated December 3, 1986, including the requirement that notice be given
to all organizations registered with the Securities Exchange Commission as securities
depositories, and to one or more information services of national recognition which disseminate
redemption information with respect to tax-exempt securities.
20
NYI
S84300v3
or before the date fixed for redemption, moneys shall be deposited with the Bond
Registrar to pay the principal of and the redemption premium, if any, on the bonds or portions
thereof called for redemption as well as the interest accruing thereon to the redemption date
thereof.
If a portion of a bond shall be called for redemption, the registered owner thereof or his
attorney or legal representativeshall present and surrendersuch bond to the Bond Registrar for
payment of the principal amount thereof so called for redemption and the ·redemption premium,
if any, on such principal amount, and the Bond Registrar shall authenticate and deliver to or upon
the order of such registered owner or his legal representative, without charge therefor, for the
unredeemed portion of the principal amount of the bond so surrendered, a bond or bonds of the
same series and maturity, of any denomination or denominations authorized by this resolution
and bearing interest at the same rate.
Section 8. Exchange; registration
of transfer; Bond Registrar.
Bonds, upon
surrender thereof at the office of the Bond Registrar together with an assignment duly executed
by the registered owner or his attorney or legal representative in such form as shall be
satisfactory to the Bond Registrar, may, at the option of the registered owner thereof, be
exchanged for an equal aggregate principal amount of bonds of the same series and maturity, of
any denomination or denominations authorized by this resolution and bearing interest at the same
rate.
The transfer of any bond may be registered only upon the registration books of the
County upon the surrender thereof to the Bond Registrar together with an assignment duly
executed by the registered owner or his attorney or legal representative in such form as shall be
satisfactory to the Bond Registrar. Upon any such registration of transfer, the Bond Registrar
shall authenticate and deliver in exchange for such bond a new bond or bonds, registered in the
name of the transferee, of any denomination or denominations authorized by this resolution, in
an aggregate principal amount equal to the unredeemed principal amount of such bond so
surrendered, of the same series and maturity and bearing interest at the same rate.
In all cases in which bonds shall be exchanged or the transfer of bonds shall be registered
hereunder, the Bond Registrar shall authenticate and deliver at the earliest practicable time bonds
in accordance with the provisions of this resolution. All bonds surrendered in any such exchange
or registration of transfer shall forthwith be cancelled by the Bond Registrar. The County or the
Bond Registrar may make a charge for shipping and out-of-pocket costs for every such exchange
or registration of transfer of bonds sufficient to reimburse it for any tax or other governmental
charge required to be paid with respect to such exchange or registration of transfer, but no other
charge shall be made for exchanging or registering the transfer of bonds under this resolution.
The Bond Registrar shall not be required to exchange or register the transfer of any bpnd during
a period beginning at the opening of business fifteen (15) days before the day of the mailing of a
notice of redemption of any bonds and ending at the close of business on the day of such mailing
or of any bond called for redemption in whole or in part pursuant to Section 7 of this resolution.
As to any bond, the person in whose name the same shall be registered shall be deemed
and regarded as the absolute owner thereof for all purposes, and payment of or on account of the
principal or redemption price of any such bond and the interest on any such bond shall be made
NYI
5584300v3
to or upon the order of the registered owner thereof or his legal representative. All such
payments shall be valid and effectual to satisfy and discharge the liability upon such bond,
including the redemption premium, if any, and the interest thereon, to the extent of the sum or
sums so paid.
The County shall appoint such registrars, transfer agents, depositaries or other agents as
may be necessary for the registration, registration of transfer and exchange of bonds within a
reasonable time according to then current commercial standards and for the timely payment of
principal, interest and any redemption premium with respect to the bonds. The Direct~r of the
Department of Finance of Fairfax County, Virginia, is hereby appointed the registrar, transfer
agent and paying agent for the bonds (collectively the "Bond~Registrar"), subject to the right of
the Board of Supervisors of the County to appoint another Bond Registrar, and as such shall keep
at his office the books of the County for the registration, registration of transfer, exchange and
payment of the bonds as provided in this resolution.
Section 9. Full faith and credit pledged. For the prompt payment of the principal of
and the interest on the. bonds authorized by this resolution as the same shall become due; the full
faith and credit of Fairfax County, Virginia, are hereby irrevocably pledged, and each year while
any of the bonds shall be outstanding, to the extent other funds of the County are not lawfully
available and appropriated for such purpose, there shall be levied and collected in accordance
with law an annual ad valorem tax upon all taxable property in the County subject to local
taxation sufficient in amount to provide for the payment of the principal of and the interest on the
bonds as such principal and interest shall become due, which tax shall be without limitation and
in addition to all other taxes authorized to be levied in the County.
Section 10. Election of Transition Provision. Pursuant to the provisions of Section
15.2-2663, Code of Virginia, 1950, as amended, the Board hereby elects to issue the $4,500,000
commercial and redevelopment area improvement bonds under the provisions of Chapter 5, Title
15.1, Code ofVirginia, 1950, as amended, as the same existed on June 30, 1991.
Section 11. Continuing Disclosure Agreement. The Chairman or Vice Chairman of the
Board of Supervisors, the County Executive or the Chief Financial Officer, or such officer or
officers of the County as may be designated, is hereby authorized and directed to execute a
Continuing Disclosure Agreement, in the form contained in the draft Preliminary Official
Statement presented at this meeting, setting forth the reports and notices to be filed by the
County and containing such covenants as may be necessary in order to show compliance with the
provisions of Rule 15c2-12 adopted by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended.
Section 12. Escrow Deposit Agreement.
The form of the Escrow Deposit Agreement,
providing for the purchase and custody of the Escrow Securities las defined therein) and the
application of the proceeds thereof to the redemption on their respective redemption dates of the
Refunded Bonds, is hereby approved, in the form presented at the meeting at which this
resolution is adopted, and the execution and delivery of the Escrow Deposit Agreement,
substantially in the form presented at the meeting at which this resolution is adopted, by and on
behalf of the County by the Chairman or Vice Chairman of the Board of Supervisors, the County
Executive or the Chief Financial Officer of the County is hereby authorized.
NYI
5584300v3
13. Tax covenant. The County covenants to take all action, and to refrain from
taking any action, necessary under the Internal Revenue Code of 1986, as amended, to ensure
that interest on the bonds will remain not includable in gross income for Federal income tax
purposes to the same extent as it is not includable on the date of closing on the bonds.
Section 14. Certificate concerning delegation.
The County Executive or the Chief
Financial Officer shall execute a Certificate or Certificates evidencing determinations or other
actions taken pursuant to the authority granted in this resolution, and any such Certificate shall
be conclusive evidence of the action or determination of such County Executive or Chief
Financial
Officer
as stated
therein.
Section 15. Authority of officers. The officers and agents of Fairfax County are hereby
authorized and directed to do all the acts and things required of them by the bonds and by this
resolution for the full, punctual and complete performance of all of the terms, covenants,
provisions and agreements contained in the bonds and in this resolution.
Section 16. Certification and filing. The Clerk of the Board of Supervisors is hereby
authorized and directed to file a certified copy of this resolution and a certified copy of the
resolution of the County School Board with the Circuit Court ofr;airfax County, Virginia.
A Copy - Tests:
rn
~elYtts,
Nancy V
Clerk to the Board of Supervisors
NYI
5584300v3
BOARD
OP
SUPERVISORS
FAIRFAX COUNTY, VIRGINIA
September
13, 2004
At a regular meeting of the Board of Supervisors of Fairfax County, Virginia, held in the
Board Auditorium of the Government Center at Fairfax, Virginia, on Monday, September 13,
2004, at 9:46 a.m., there were present:
·
Chairman Gerald E. Connolly, presiding
·
Supervisor Sharon Bulova, Braddock District
·
Supervisor Joan M. DuBois, Dranesville District
·
Supervisor Michael Frey, Sully District
·
Supervisor Penelope A. Gross, Mason District
·
Supervisor Catherine M. Hudgins, Hunter Mill District
·
Supervisor Gerald W. Hyland, Mount Vernon District
·
Supervisor Dana Kauffman, Lee District
·
Supervisor Elaine McConnell, Springfield District
·
Supervisor Linda Q. Smyth, Providence District
Others present during the meeting were Anthony H. Griffin, County Executive; David P.
Bobzien, County Attorney; Catherine A. Chianese, Assistant to the County Executive;
Regina Them Corbett, Assistant to the County Executive; Nancy Vehrs, Clerk to the Board
of Supervisors; and Patti M. Hicks, Deputy Clerk to the Board of Supervisors.
from the Minutes of a regular meeting of the Board of Supervisors
of Fairfax
County, Virginia, held in the Board Auditorium of the Government Center, Fairfax,
Virginia, on Monday, September
24.
13, 2004:
A-5 - SALE OF GENERAL OBLIGATION BONDS AND REFUNDING BONDS,
SERIES 2004B (1:44 p.m.)
Supervisor Hyland moved that the Board concur in the recommendation of staff and:
·
Approve the sale of General Obligation Bonds in the amount of
$198.76 million.
·
Approve the sale of General Obligation RefUnding Bonds up to
$214.96 million which includes bond Series 1997A, 1998A, 1999B,
and 2000A. This could provide for a total issue amount up to
approximately $413.72 million.
·
Adopt the Resolution authorizing the issuance of General Obligation
Bonds, which also authorizes the execution and delivery of a
Continuing Disclosure Agreement. This resolution:
·
Delegates to the County Executive or the Chief
Financial Officer authority to award the bonds to the
best
·
bidder.
Approves the form of the notices of sales and the
Official
·
Authorizes the Chairman of the Board to sign the
Official
·
Statement.
Statement.
Approve the form of the Escrow Agreement for the General
Obligation Refunding Bonds.
Supervisor Bulova seconded the motion.
A brief discussion ensued regarding the savings the County had generated because of
its AAA bond rating.
(NOTE: Later in the meeting, action was taken on this item. See Clerk's Summary
Item CL#26.)
from the Minutes of a regular meeting of the Board of Supervisors of Fairfax
County, Virginia, held in the Board Auditorium of the Government Center, Fairfax,
Virginia, on Monday, September 13, 2004:
26.
A-5
-
SALE
OF
GENERAL
OBLIGATION
BONDS
AND
REFUNDING
BONDS, SERIES 2004B (1:47 p.m.)
(BONDS)
(R)
(NOTE: Earlier in the meeting, a motion was made to approve this item. See Clerk's
Summary Item CL#24.)
The question was called on the motion and it carried by unanimous vote, Supervisor
Bulova, Supervisor DuBois, Supervisor Frey, Supervisor Gross, Supervisor Hudgins,
Supervisor Hyland, Supervisor Kauf~nan, Supervisor McConnell, Supervisor Smyth,
and Chairman Connolly voting "AYE."
from the Minutes of a regular meeting of the Board of Supervisors
of Fairfax
County, Virginia, held in the Board Auditorium of the Government Center, Fairfax,
Virginia, on Monday, September
13, 2004:
"I, Nancy Vehrs, Clerk to the Board of Supervisors, Fairfax County, Virginia, hereby
certify that the foregoing annexed extracts from the minutes of the meeting of the Board of
Supervisors of said County, held on September 13, 2004, have been compared by me with
original minutes as officially recorded in my office of the said Board and is a true, complete, and
correct copy thereof of the whole of said original minutes as far as the same relate to the subject
matter
referred
to in said
extracts.
IN WITNESS WHEREOF,
I have hereunto set my hand and affixed the corporate seal
of saidCounty,this 12'"dayof October,2004.
Nancy Ve~
Clerk to the Board of Supervisors
Fairfax County, Virginia
(SEAZ~
Nancy Vehrs, hereby certify that on September 29, 2004, I delivered a certified
copy of the following resolutions to the Clerk of the Circuit Court of Fairfax County,
Virginia:
·
A Resolution Authorizing the Issuance of Public Improvement and
Refunding Bonds, Series 2004 B, of Fairfax County, Virginia,
Providing for the Competitive Sale of·Such Bonds and Delegating
to the County Executive or the Chief Financial Officer Authority to
Determine
Certain Details of Such Bonds, Determine
the Refunded
Bonds and Accept the Lowest Responsive Bid for Such Bonds.
·
A Resolution Requesting the Board of Supervisors of Fairfax
County, Virginia, to Issue and Sell School Bonds of Fairfax
County, Virginia, Totaling $125,590,000 and Approving the Form
of a Tax Certificate and Authorizing the Execution Thereon
lel~
Nancy VehJS
(SEAL)
Clerk to thC!Board of Supervisors
Fairfax County, Virginia
This is to certify that these Resolutions were received in the Clerk's Office of the
Circuit Court of Fairfax County, Virginia, on the 29th day of September, 2004.
hnT. Frey ~~
Clerk
ofthe
Circuit
(SEAL)
Court
Fairfax County, Virginia
City and County of New York, ss.:of
Advertisement
Barbara Conti, being duly sworn, says that she is the Billing
coordinator of the BOND BUYER, a daily newspaper printed and
publishedat One State Street Plaza, in the City of New York, Countyof
New York, State of New York; and the notice, of which the annexed is a
printed copy, was regularly published in said BOND BUYER on
September 17, 2004
n
Billing Coordinator
Subscribed and sworn to before me this
17" day of Se~temberZOOI
~Glurr/j~
Dawn
Brown
Notary Public, State of New York
No.
01BR5021063
Qualified in Kings County
Commission Expires December 6, 2005
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OF
SALE
$326,335,000
FAIRFAX
Public Improvement
COUNTY,
VIRGINLtl
and Refunding
Bonds, Series 2004 B
Electronic Bids, BiDCOMP/Parity Competitive Bidding System ("BiDCOMP/Parity")
only, will be received by the Board of Supervisors of Fairfax County, Virginia, until 11 o'clock
a.m., Fairfax, Virginia Time, on
SepteI~i~ber 23, 2004"
for the purchaseof $326,335,000*
PublicImprovementandRefUnding
Bonds,Series2004B, of
Fairfax County, Virginia, (the "Bonds") dated the date of their delivery and maturing, subject to
the right of prior redemption as hereinafter set forth, on the Ist day of October in the following
years and in the following amounts, respectively:
Initial Maturity
Year of
Maturity
Principal
Amount
Schedule
Year of
Maturity
Principal
Amount
2005
$10,365,000
2015
$20,585,000
2006
17,220,000
2016
20,425,000
2007
17,130,000
2017
20,270,000
2008
21,155,000
2018
13,250,000
2009
20,950,000
2019
13,165,000
2010
20,785,000
2020
9,650,000
2011
20,720,000
2021
9,650,000
2012
20,705,000
2022
9,650,000
2013
20,690,000
2023
9,650,000
2014
20,670,000
2024
9,650,000
The County reserves the right to change the date for receipt of bids (the "Scheduled Bid
Date") in accordance with the section of this Notice of Sale entitled "Change of Bid Date and
Closing Date; Other Changes to Notice of Sale."
Changes to Initial Maturity
Schedule
The Initial Maturity Schedule set forth above represents an estimate of the principal
amount of bonds to be sold. The County hereby reserves the right to change the Initial Maturity
Preliminary, subject to change.
based on market conditions immediately prior to the sale, by announcing any such
change not later than 10:00 a.m., Fairfax, Virginia Time, on the date for receipt of bids via TM3
(www.tm3.com). The resulting schedule of maturities will become the "Bid Maturity Schedule".
If no such change is announced, the Initial Maturity Schedule will become the Bid Maturity
Schedule. Prospective bidders may request notification by facsimile transmission of any such
changes in the Initial Maturity Schedule by so advising, and fUrnishing their telecopier numbers
to, Public Financial Management, Inc., at 703-741-0175 on the day prior to the Scheduled Bid
Date.
Changes
to Bid Maturity
Schedule
The County hereby further reserves the right to change the Bid Maturity Schedule after
the determination of the winning bidder, by increasing or decreasing the aggregate principal
amount of the bonds, subject to the limitation of no more than a 15% increase or decrease in the
aggregate principal amount of the bonds.
THE
SUCCESSFUL
BIDDER
MAY
NOT
WITHDRAW
ITS
BLD
OR
CHANGE
THE
INTEREST RATES BID OR THE INITIAL REOFFERING TERMS (AS HEREAFTER
DEFINED) AS A RESULT OF ANY CHANGES MADE TO THE PRINCIPAL AMOUNTS
WITHIN THESE LIMITS. The dollar amount bid by the successfUl bidder will be adjusted to
reflect any adjustments in the final aggregate principal amount of the bonds. Such adjusted bid
price will reflect changes in the dollar amount of the undenvriters' discount and original issue
discount/premium, if any, but will not change the selling compensation per $1,000 of par amount
of bonds from the selling compensation that would have been received based on the purchase
price in the winning bid and the Initial Reoffering Terms. The interest rates specified by the
successful bidder for the various maturities at the Initial Reoffering Terms will not change. The
County anticipates that the final annual principal amounts and the final aggregate principal
amount of the bonds will be communicated to the successfUl bidder within twenty-four hours of
the County's receipt of the initial public offering prices and yields of the bonds (the "Initial
Reoffering Terms").
Book-Entry
System
The Bonds will be issued by means of a book-entry system with no physical distribution
of bond certificates made to the public. One bond certificate for each maturity will be issued to
The Depository Trust Company, New York, New York ("DTC"), and immobilized in its
custody. The book-entry system will evidence beneficial ownership interests of the bonds in the
principal amount of $5,000 and any multiple thereof, with transfers of beneficial ownership
interests effected on the records of DTC participants and, if necessary, in turn by DTC pursuant
to rules and procedures established by DTC and its participants. The successfUl bidder, as a
condition to delivery of the bonds, shall be required to deposit the bond certificates with DTC,
registered in the name of Cede & Co., nominee of DTC. Interest on the bonds will be payable
semiannually on April 1 and October 1, the first interest payment date being April 1, 2005, and
principal of and any redemption premium on the bonds will be payable at maturity or upon prior
redemption, to DTC or its nominee as registered owner of the bonds. Transfer of principal,
interest and any redemption premium payments to participants ofDTC will be the responsibility
of DTC, and transfer of principal, interest and any redemption premium payments to beneficial
of the bonds by participants of DTC will be the responsibility of such participants and
other nominees of beneficial owners. The County will not be responsible or liable for such
transfers of payments or for maintaining, supervising or reviewing the records maintained by
DTC, its participants or persons acting through such participants.
In the event that (a) DTC determines not to continue to act as securities depository for the
bonds or (b) the County determines that continuation of the book-entry system of evidence and
transfer of ownership of the bonds would adversely affect the interests of the beneficial owners
of the bonds, the County will discontinue the book-entry system with DTC. If the County fails
to select another qualified securities depository to replace DTC, the County will deliver
replacement bonds in the form of fUlly registered certificates.
The
Bonds
The Bonds will be general obligations
of Fairfax County, Virginia, and all taxable
property therein will be subject to the levy of an annual ad valoremtax sufficient in amount to
provide for the payment of the principal of and the interest on the bonds as the same become due,
which
tax will be without
limitation
as to rate or amount
and will be in addition
to all other taxes
authorized to be levied in the County to the extent other fUnds of the County are not lawfUlly
available and appropriated for such purposes.
The Bonds are being issued as a consolidated issue of bonds authorized for the purpose of
providing funds, with other available funds, (i) for School Improvements ($125,590,000), Parks
and Park Facilities ($13,920,000), Public Safety Facilities ($54,750,000) and Commercial and
Redevelopment Area Improvements ($4,500,000), and (ii) refUnding all or a portion of certain of
the County's outstanding, callable Public Improvement Bonds, Series 1997 B, Public
Improvement Bonds, Series 1998 A, Public Improvement Bonds, Series 1999 B and Public
Improvement Bonds, Series 2000 A (collectively, the "Refunding Candidates".)
The County intends to refUnd the RefUnding Candidates in order to achieve present value
debt service savings. Depending upon market conditions on the date of sale, the County may
decide to refUnd none of the RefUnding Candidates, or only certain Refunding Candidates if
refUnding such RefUnding Candidates enables the County to achieve, in its judgment, appropriate
levels of present value debt service savings.
Term
Bonds
and Mandatory
Redemption
The successfUl bidder may designate two or more of the consecutive serial maturities as
one or two (but not more than two) term bond maturities equal in aggregate principal amount,
and with mandatory amortization requirements corresponding, to such designated serial
maturities.
If less than all of the bonds of any one maturity shall be called for redemption, the
particular bonds to be redeemed shall be selected by DTC and its participants by lot so long as a
book-entry system with DTC is continued. Notice of redemption shall be given by certified or
registered mail to DTC or its nominee as the registered owner of the bonds. Such notice shall be
mailed not more than 60 nor less than 30 days prior to the date fixed for redemption. The
will not be responsible for mailing notices of redemption to anyone other than DTC or its
i
nominee.
Optional Redemption
The bonds which mature on or before October 1, 2014 are not subject to redemption
before maturity. Bonds which mature after October 1, 2014 may be redeemed, at the option of
the County, before their respective maturities on any date not earlier than October 1, 2014, in
whole or in part tin integral multiples of $5,000), upon payment of the redemption price of par
plus accrued interest to the redemption date.
Electronic Bidding and Bidding Procedures
Registration
to Bid
All prospective bidders must be contracted customers of i-Deal LLC's BiDCOMP/Parity
Competitive Bidding System. If you do not have a contract with BiDCOMP/Parity, call (212)
404-8102 to become a customer. By submitting a bid for the bonds, a prospective bidder
represents and warrants to the County that such bidder's bid for the purchase of the bonds (if a
bid is submitted in connection with the sale) is submitted for and on behalf of such prospective
bidder by an officer or agent who is duly authorized to bind the prospective bidder to a legal,
valid and enforceable contract for the purchase of the bonds.
By contracting with
BiDCOMP/Parity a prospective bidder is not obligated to submit a bid in connection with the
sale.
IF
ANY
PROVISIONS
OF
THIS
NOTICE
OF
SALE
SHALL
CONFLICT
WITH
INFORMATION PROVID~D BY BiDCOMP/Parity AS APPROVED PROVIDER OF
ELECTRONIC
BIDDING
SERVICES,
THIS NOTICE
OF SALE, AS IT MAY BE
AMENDED
BY THE COUNTY AS DESCRIBED
WITHIN,
SHALL CONTROL.
Further
information about BiDCOMP/Parity,
BiDCOMP/Parity at (212) 404-8102.
including
any fee charged,
may be obtained
from
Disclaimer
Each prospective bidder shall be solely responsible to register to bid via
BiDCOMP/Parity as described in the attached instructions. Each qualified prospective bidder
shall be solely responsible to make necessary arrangements to access BiDCOMP/Parity for
purposes of submitting its bid in a timely manner and in compliance with the requirements of the
Notice of Sale. Neither the County nor BiDCOMP/Parity shall have any duty or obligation to
undertake such registration to bid for any prospective bidder or to provide or assure such access
to any qualified prospective bidder, and neither the County nor BiDCOMP/Parity shall be
responsible for a bidder's failure to register to bid or for proper operation of, or have any liability
for any delays or interruptions of, or any damages caused by, BiDCOMP/Parity. The County is
using BiDCOMP/Parity as a communication mechanism, and not as the County's agent, to
conduct the electronic bidding for the bonds. The County is not bound by any advice and
determination of BiDCOMP/Parity to the effect that any particular bid complies with the terms
of this Notice of Sale and in particular the "Bid Specifrcations" hereinafter set forth. All costs
and expenses incurred by prospective bidders in connection with their registration and
of bids via BiDCOMP/Parity are the sole responsibility of the bidders; and the
County is not responsible, directly or indirectly, for any of such costs or expenses.
If a
prospective bidder encounters any difficulty in registering to bid or submitting, modif)ing or
withdrawing a bid for the bonds, it should telephone BiDCOMP/Parity and notify Public
Financial Management, Inc., the County's financial advisor, by telephone at (703) 741-0175.
After receipt of bids is closed, the County through BiDCOMP/Parity will indicate the apparent
successfUl bidder. Such message is a courtesy only for viewers, and does not constitute the
award of the bonds. Each bid will remain subject to review by the County to determine its true
interest cost rate and compliance with the terms of this Notice of Sale.
Bidding
Procedures
Bids must be submitted electronically for the purchase of the bonds tall or none) by
means of the Fairfax County, Virginia AON Bid Form (the "Bid Form") via Parity. Bids must
be communicated electronically to Parity by 11:00 a.m., Fairfax, Virginia Time on the Scheduled
Bid Date unless postponed as described herein (see "Change of Bid Date and Closing Date").
Prior to that time, a prospective bidder may input and save the proposed terms of its bid in
BIDCOMP. Once the final bid has been saved in BIDCOMP, the bidder may select the final bid
button in BiDCOMP to submit the bid to Parity. Once the bids are released electronically via
Parity to the County, each bid will constitute an irrevocable offer to purchase the bonds on the
terms therein provided. For purposes of the electronic bidding process, the time as maintained
on BiDCOMP shall constitute the official Fairfax, Virginia Time. For information purposes
only, bidders are requested to state in their bids the true interest cost to the County, as described
under "Award of the Bonds" below, represented by the rate or rates of interest and the bid price
specified in their respective bids.
No bids will be accepted in written form, by facsimile transmission or in any other
medium or on any system other than by means of the Bid Form via Parity. No bid will be
received after the time for receiving such bids specified above.
Bid Spei~ifications
Bidders are requested to name the interest rate or rates in multiples of 1/8 or 1/20 of 1%.
Each bidder must specify in its bid a rate for each maturity of bonds. The bonds maturing on the
same
date must bear interest
at the same rate.
Any number of interest rates may be named, provided that (a) for all bonds, the highest
interest rate for any maturity may not exceed 6.00%, and (b) the price bid for the bonds may not
be less than par, nor more than 110% of the principal amount thereof. No bid for less than all of
the bonds offered or for less than par will be entertained.
A Good Faith Deposit (Deposit) in the form of a Financial Surety Bond payable to the
order of the Director of the Department of Finance of Fairfax County, Virginia, for an amount
equal to $3,263,350 is required for a bid to be considered for the bonds. The Financial Surety
Bond must be from an insurance company acceptable to the County and licensed to issue such a
bond in the Commonwealth of Virginia, and such Financial Surety Bond must be submitted to
the County prior to 5 p.m. Fairfax, Virginia Time on the day prior to the date for receipt of bids
must be in form and substance acceptable to the County.
The Financial Surety Bond must
identifl each bidder whose Deposit is guaranteed by such Financial Surety Bond. The successfUl
bidder is required to submit its Deposit to the County in the form of a wire transfer not later than
12 o'clock Noon, Fairfax, Virginia Time on the next business day following the award. If such
Deposit is not received by that time, the Financial Surety Bond may be drawn by the County to
satisfy the Deposit requirement. Award or rejection of bids will be made by or on behalf of the
Board of Supen~isorsof Fairfax County, Virginia, on the date above stated for the receipt of bids.
The proceeds of the Deposit will be held as security for the performance of its bid and applied to
the purchase price of said bonds, but, in the event the successfUl bidder shall fail to comply with
the terms of its bid, the proceeds will be retained as and for full liquidated damages. No interest
will
be allowed
Award
thereon.
of Bonds
Award or rejection of bids will be made by the County prior to 3:00 p.m., Fairfax,
Virginia Time on the date of receipt ofbids. ALL BIDS SHALL REMAIN FIRM UNTIL 3:00
P.M., FAIRFAX, VIRGINIA TIME, ON THE DATE OF RECEIPT OF BIDS. An award of the
bonds, if made, will be made by the County within such four-hour period of time (11:00 a.m. 3:00 p.m.).
The bonds will be awarded to the bidder offering to purchase the bonds at the lowest
"True or Canadian" interest cost, such cost to be determined by doubling the semiannual interest
rate (compounded semiannually) necessary to discount to the price bid the payments of the
principal of and the interest on the bonds from their payment dates to the dated date of the bonds.
Change of Bid Date and Closing Date; Other Changes to Notice of Sale
The County reserves the right to postpone, from time to time, the date and time
established for the receipt of bids and will undertake to announce any such change via TM3
(www.tm3.com). Prospective bidders may request notification by facsimile transmission of such
changes in the date or time for the receipt of bids by so advising, and fUrnishing their telecopier
numbers to Public Financial Management, Inc. at (703) 741-0175 by 2 p.m., Fairfax, Virginia
Time, on the business day prior to the date established for the receipt ofbids.
Any postponement of the bid date will be announced via TM3 not later than 10:00 a.m.,
Fairfax, Virginia Time on the announced date for receipt of the bids. An alternative bid date and
time will be announced via TM3 by Noon, Fairfax, Virginia Time, 18 hours prior to such
alternative
bid date.
On such alternative bid date and time, the County will accept bids for the purchase of the
bonds, such bids to conform in all respects to the provisions of this Notice of Sale, except for the
changes in the date and time for bidding and any other changes announced via TM3 at the time
the bid
date
and
time
are announced.
The County may change the scheduled delivery date for the bonds by notice given in the
same manner as set forth for a change in the date for the receipt ofbids.
County reserves the right to otherwise change this Notice of Sale.
The County
anticipates that it would communicate any such changes via TM3 by 4:00 p.m., Fairfax, Virginia
Time on the date prior to the scheduled date for receipt of bids but no later than 10:00 a.m. on the
scheduled date for receipt of bids.
Undertakings
of the Successful Bidder
The successful bidder shall make a bona fide public offering of all of the bonds to the
general public (excluding bond houses, brokers, or similar persons acting in the capacity of
underwriters or wholesalers who are not purchasing for their own account as ultimate purchasers
without a view to resell) and will, within 30 minutes after being notified of the award of the
bonds, advise Fairfax County in writing (via facsimile transmission) of the Initial Reoffering
Terms. Prior to the delivery of the bonds, the successfUl bidder will fUrnish a certificate
acceptable to Bond Counsel as to the "issue price" of the bonds within the meaning of Section
1273 of the Internal Revenue Code of 1986, as amended. It will be the responsibility of the
successfUl bidder to institute such syndicate reporting requirements, to make such investigation,
or otherwise to ascertain the facts necessary to enable it to make such certification with
reasonable certainty.
Delivery
The bonds will be delivered
on-or about October
19, 2004 in New York, New York, at
DTC against payment of the purchase price therefor (less the amount of the Deposit) in Federal
Reserve
funds.
The approving
substantially the form
cost to the successful
certifications as to the
CUSIP
opinion of Sidley Austin Brown & Wood LLP, New York, New York, in
appearing in the Preliminary Official Statement, will be furnished without
bidder. There will also be fUrnished the usual closing papers, including
Official Statement and no-litigation.
Numbers
CUSIP numbers are to be applied for by the successfUl bidder with respect to the bonds.
The County will assume no obligation for the assignment of such numbers or for the correctness
of such numbers, and no error with respect thereto shall constitute cause for failure or refUsal by
the successfUl bidder to accept delivery or make payment for the bonds.
Official
Statements
Copies of the Preliminary Official Statement may be obtained without cost via the
Internet at www. i-dealprospectus. com or from Public Financial Management, Inc., 4601 North
Fairfax Drive, Suite 1130, Arlington, Virginia 22203-1547, telephone (703) 741-0175, from the
undersigned. The Preliminary Official Statement at its date is "deemed final" by the County for
purposes of SEC Rule 15c2-12 but is subject to revision, amendment and completion.
After the award of the bonds, the County will prepare copies of the Official Statement (no
more than 300) and will include therein such additional information concerning the reoffering of
the bonds as the successfUl bidder may reasonably request; provided, however, that the County
not include in the Official Statement a "NRO" ("not reoffered") designation with respect to
any maturity of the bonds. The successful bidder will be responsible to the County in all respects
for the accuracy and completeness of information provided by such successfUl bidder with
respect to such reoffering. The County expects the successfUl bidder to deliver copies of such
Official Statement to persons to whom such bidder initially sells the bonds, the Municipal
Securities Rulemaking Board ("MSRB") and to each nationally recognized municipal securities
information repository (a "NRMSTR"). The successful bidder will be required to acknowledge
receipt of such Official Statement, to certify that it has made delivery of the Official Statement to
such repositories and to acknowledge that the County expects the successful bidder to deliver
copies of such Official Statement to persons to whom such bidder initially sells the bonds and to
certify that the bonds will only be offered pursuant to such Official Statement and only in states
where the offer is legal. The successfUl bidder will be responsible to the County in all respects
for the accuracy and completeness of information provided by such successful bidder with
respect to such reoffering.
On November 10, 1994, the Securities and Exchange Commission adopted in final form
certain amendments to Rule 15c2-12 under the Securities Exchange Act of 1934, as amended
(the "Amendments"). In general, the Amendments prohibit an underwriter from purchasing or
selling municipal securities, such as the bonds, unless it has determined that the issuer of such
securities has committed to provide annually certain information, including audited financial
information, and notice of various events described in the Amendments, if material. The County
will provide to each NRMSIR and to any Virginia information depository, annual information
respecting the County, including audited financial statements. In addition, the County will
provide to each such NRMSIR or the MSRB and to any Virginia information depository so
formed, notice of the occurrence of any events described in the Amendments if material. The
County has not failed to comply as to its general obligation bonds with previous undertakings
with regard to the Amendments.
The County's filing of its annual report and financial
statements for its Integrated Sewer System's Enterprise Fund for the fiscal year ended June 30,
1999, pursuant to an undertaking made in connection with its Sewer Revenue Bonds, Series
1996, was made approximately 30 days late, and timely notice of such late filing was given to
each of the NRMSIRs. The County's sewer filings for fiscal years 2000, 2001, 2002 and 2003
were timely made with each of the NRMSIRs.
Official Statements will be provided within seven (7) business days after the date of the
award of the bonds in such quantities as may be necessary for the successfUl bidder's regulatory
compliance.
Further information will be fUrnished upon application to Len Wales, County Debt
Manager at (703) 324-2391.
Reservation
of Rights
The right to reject any or all bids and to waive any irregularity or informality in any bid is
reserved.
BOARD
OF SUPERVISORS
OF FAIRFAX
By: Nancy Vehrs,
Clerk
COUNTY,
VIRGINLtl
Result Screen
Page 1 of 1
Compare
·11:b0:22
a.m.E6STL Upcoming
Calendar]I Overview
iOverview
Summary
Bid Results
Fai~ax County
$326,335,000 Public Improvement and
Refunding Bonds, Series 2004B
Thefollowing
bidsweresubmittedusingPARIT~ and displayedrankedby lowestTIG.
Click on the name of each bidder to see the respective
Bid Award'
Bidder
Name
I~e~n~rothers
lMorgan Stanlev
bids.
TIC
3.563115
13.573902
IJ.P. Morgan Securities, Inc. 13.574182
Il\nerrill Lynch 4 Co.
ICitinroup Global Markets
13.581213
lnc.13.587023
IUBS Financial Services Inc. 13.589810
*Awarding the Bonds to a specific bidder will provide you with the Reoffering
01981-2002
i-Deal LLC, All rights reserved,
Prices and Yields.
Trademarks
https ://www.newissuehome.i-deal .com/Parity/asp/main.asp?frame=content&page=parityR. .. 9/23/2004
Reoffering
~age I o~ I
Result
I Result
i
Lehman Brothers's ReofferingScale
Fairfax County
$326,335,000 Public Improvement and
Refunding Bonds, Series 2004B
Maturity Date
nt
%
%IDollar Pri
Call Date
10/01/2005
10,3651\11
6.0000
1.5600
104.169
10/01/2006
17,220M
4.0000
1.6400
104.510
10/01/2007
17,130M
5.0000
1.9500
108.701
10/01/2008
21,155M
5.0000
2.2300
110.416
10/01/2009
20,950M
5.0000
2.4800
111.669
10/01/2010
20,785M
5.0000
2.7100
112.504
10/01/2011
20,720M
5.0000
2.9000
113.130
10/01/2012
20,705M
5.0000
3.0600
113.596
10/01/2013
20,690M
5.0000
3.2000
113.910
10/01/2014
20,670M
5.0000
3.3100
114.225
10/01/2015
20,585M
5.0000
3.4200
113.228
10/01/2014
10/01/2016
20,4251\11
5.0000
3.5200
112.331
10/01/2014
10/01/2017
20,270M
5.0000
3.6200
111.442
10/01/2014
10/01/2018
13,2501\11
4.5000
3.8200
105.583
10/01/2014
10/01/2019
13,165M
4.5000
3.91 00
104.822
10/01/2014
10/01/2020
9,650M
4.5000
4.0000
104.069
10/01/2014
10/01/2021
9,650M
4.0000
4.1300
98.424
10/01/2022
9,650M
4.1250
4.2200
98.810
10/01/2023
9,650M
4.2500
4.3100
99.226
10/01/2024
9,650M
4.2500
4.3900
98.149
Accrued
Gross
Production:
O 1981-2002
https://www.newissuehome.i-deal
Interest:
$0.00
$356,443,085.90
i-Deal LLC, All rights reserved,
Trademarks
.com/Parity/asp/main.asp?frame=content&page=paritlR.
..
9/23/2004
Bid Form
Upcoming
Page 1 of2
Calendar
Overview
I Overview
iI Result
Resun
I Excel
Excell
Lehman Brothers - NewYork,NY'sBid
Fairfax
County
$326,335,000 Public Improvement and
Refunding Bonds, Series 2004B
For the aggregate principal amount of $326,335,000.00,
we will pay you $355,509,767.80,
from the date of issue to the date of delivery. The Bonds are to bear interest
rity DatelAmount
10/01/2005
10,3651\11
6.0000
10/01/2006
17,2201\11
4.0000
10/01/2007
17,130M
5.0000
10/01/2008
21,155M
5.0000
10/01/2009
20,950M
5.0000
10/01/2010
20,785M
5.0000
10101/2011
20,720M
5.0000
10/01/2012
20,7051\11
5.0000
10/01/2013
20,6901\11
5.0000
10/01/2014
20,670M
5.0000
10/01/2015
20,5851\11
5.0000
10/01/2016
20,4251\11
5.0000
10/01/2017
20,2701\11
5.0000
10/01/2018
13,250M
4.5000
10/01/2019
13,165M
4.5000
10/01/2020
9,650M
4.5000
10/01/2021
9,650M
4.0000
10/01/2022
9,650M
4.1250
10/01/2023
9,650M
4.2500
10/01/2024
9,650M
4.2500
Total Interest
Premium:
Net Interest
$ICoupon
Cost:
%
$145,321,515.62
$29,174,767.80
Cost:
$116,146,747.82
TIG:
Time
plus accrued interest
at the following rate(s):
3.563115
Last
Bid
Received
On:09/23/2004
10:59:31
EDST
This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of
Sale, and the Preliminary Official Statement, all of which are made a part hereof.
Bidder:
Lehman
Contact:
Frank
Vitiello
Brothers,
Title:
Senior
V.P.
New York, NY
Telephone:212-528-1061
Fax:
646-758-2068
https://www.newissuehome.i-deal.com/Parity/asp/main.asp?frame=content&page=parityBi ... 9/23/2004
Bid Form
Issuerr\lame:
Page 2 of 2
FairfaxCounty
Company
Name:
AcceptedBy:
Accepted By:
Date:
Date:
01981-2002
i-Deal
LLC, All rights
reserved,
Trademarks
https .//www.newi ssuehome.i-deal.com/Parity/asp/main .asp?frame=content&page=parityBi ... 9/23/2004
Bid Form
Upcoming
Calendar
Page 1 of2
i Overview
Overview
iI Result
Result1 Excel
Excel
j
MorganStanley - NewYork,NY'sBid
~SrBk~W~P~-~'
Fairfax County
$326,335,000 Public Improvement and
Refunding Bonds, Series 2004B
For the aggregate principal amount of $326,335,000.00,
we will pay you $358,843,673.58,
from the date of issue to the date of delivery. The Bonds are to bear interest
rity DatelAmount
$ICoupon
10/01/2005
10,3651\11
3.0000
10/01/2006
17,2201\/1
3.0000
10/01/2007
17,130M
5.0000
10/01/2008
21,155M
5.0000
10/01/2009
20,9501\/1
5.0000
10/01/2010
20,7851\11
5.0000
10/01/2011
20,7201\11
5.0000
10/01/2012
20,705M
5.0000
10/01/2013
20,690M
5.0000
10/01/2014
20,670M
5.0000
10/01/2015
20,585M
5.0000
10/01/2016
20,425M
5.0000
10/01/2017
20,270M
5.0000
10/01/2018
13,2501\11
5.0000
10/01/2019
13,165M
5.0000
10/01/2020
9,6501\11
5.0000
10/01/2021
9,6501\11
5.0000
10/01/2022
9,650M
5.0000
10/01/2023
9,650M
4.1250
10/01/2024
9,650M
4.2500
Total Interest Cost:
Premium:
Net Interest Cost:
%
$150,290,925.62
$32,508,673.58
$117,782,252.04
TIG:
Time
plus accrued interest
at the following rate(s):
3.573902
Last
Bid
Received
On:09/23/2004
10:59:38
EDST
This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of
Sale, and the Preliminary Official Statement, all of which are made a part hereof.
Bidder:
Morgan Stanley,
Contact:
Glen
New York, NY
Balanoff
Title:
Telephone:21
Fax:
2-762-81 83
212-762-8226
https.//www.newi ssuehome.i -deal. com/Parity/asp/main. asp?frame=content&page=parityBi
... 9/23/2004
Bid Form
IssuerName:
rage
FairfaxCounty
Company
Name:
Accepted By:
Accepted By:
Date:
Date:
01981-2002
z o~ z
i-Deal LLC, All rights reserved,
Trademarks
https:~www.newi ssuehome.i-deal.com/Parity/asp/main .asp?frame=content&page=parityBi ... 9/23/2004
~ld ~`orm
Upcoming
~age
1 of 2
Excel
I Overview
Overview
jI Result
Result
p Excell
Calendar
J.P. MorganSecurities, Inc. - NewYork,NY'sBid
Fairfax County
$326,335,000 Public Improvement and
Refunding Bonds, Series 2004B
For the aggregate principal amount of $326,335,000.00,
we will pay you $358,254,483.95,
plus accrued
from the date of issue to the date of delivery. The Bonds are to bear interest at the following rate(s):
Maturity
upon %
10/01/2005
10,365M
5.5000
10/01/2006
17,220M
4.0000
10/01/2007
17,130M
5.0000
10/01/2008
21,1551\11
5.0000
10/01/2009
20,950M
5.0000
10/01/2010
20,7851\11
5.0000
10/01/2011
20,720M
5.0000
10/01/2012
20,705M
5.0000
10/01/2013
20,6901\11
5.0000
10/01/2014
20,670M
5.0000
10/01/2015
20,5851\11
5.0000
10/01/2016
20,425M
5.0000
10/01/2017
20,270M
5.0000
10/01/2018
13,250M
5.0000
10/01/2019
13,165M
5.0000
10/01/2020
9,650M
5.0000
10/01/2021
9,6501\11
5.0000
10/01/2022
9,6501\11
4.1000
10/01/2023
9,6501\11
4.1250
10/01/2024
9,650M
4.2500
Total Interest
Premium:
Net Interest
nt
Cost:
$149,313,926.87
$31,919,483.95
Cost:
$117,394,442.92
TIG:
Time
interest
3.574182
Last
Bid
Received
On:09/23/2004
10:59:53
EDST
This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of
Sale, and the Preliminary Official Statement, all of which are made a part hereof.
Bidder:
J.P. Morgan Securities,
Contact:
Peter
Title:
MANAGING
Inc., New York, NY
Clarke
DIR
Telephone:212-834-7154
Fax:
212-834-6743
https://www.newissuehome.i-deal.com/Parity/asp/main.asp?frame=content&page=parityBi.
.. 9/23/2004
Bid Form
Issuerl\lame:
~age
FairfaxCounty
Company
Name:
AcceptedBy:
Accepted By:
Date:
Date:
01981-2002
2 of 2
i-Deal LLC, All rights reserved,
Trademarks
https://www.newissuehome.i-deal.com/Parity/asp/main.asp?frame=content&page=parityBi ... 9/23/2004
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Upcoming
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rage
1 ol·~2
Overview
Excel
i Overvian,
iI Result
ResunIIExcel
I
MerrillLyncha Co. - NewYork,NY'sBid
Fairfax County
$326,335,000 Public Improvement and
Refunding Bonds, Series 2004B
For the aggregate principal amount of $326,335,000.00, we will pay you $352,463,010.62, plus accrued interest
from the date of issue to the date of delivery. The Bonds are to bear interest at the following rate(s):
aturity DatelAmount
$ICoupon
10/01/2005
10,365M
5.0000
10/01/2006
17,220M
5.0000
10/01/2007
17,130M
5.0000
10/01/2008
21,155M
5.0000
10/01/2009
20,950M
5.0000
10/01/2010
20,785M
5.0000
10/01/2011
20,7201\/1
5.0000
10/01/2012
20,705M
5.0000
10/01/2013
20,6901\11
5.0000
10/01/2014
20,670M
5.0000
10/01/2015
20,585M
4.0000
10/01/2016
20,425M
4.5000
10/01/2017
20,2701\11
4.5000
10/01/2018
13,250M
4.5000
10/01/2019
13,165M
4.5000
10/01/2020
9,650M
4.5000
10/01/2021
9,650M
4.5000
10/01/2022
9,650M
4.5000
10/01/2023
9,650M
4.2500
10/01/2024
9,650M
4.2500
Total Interest Cost:
Premium:
Net Interest Cost:
%
$142,239,307.50
$26,128,010.62
$116,111,296.88
TIG:
Time
This proposal
3.581213
Last
Bid
Received
is made subject to all of the terms
On:09/23/2004
and conditions
10:59:36
EDST
of the Official Bid Form, the Official Notice of
Sale, and the Preliminary Official Statement, all of which are made a part hereof.
Bidder:
Merrill Lynch & Co., New York, NY
Contact:
David
Andersen
Title:
Managing Director
Telephone:212-449-5081
Fax:
212-449-3733
https://www.newissuehome.i-deal.com/Parity/asp/main.asp?frame=content&page=parityBi ... 9/23/2004
~ld ~`orm
Issuerl\lame:
Accepted
~t~age 2 ot 2
FairfaxCounty
Company Name:
By:
Accepted
Date:
By:
Date:
01981-2002
i-Deal LLC, All rights reserved,
Trademarks
https://www.newissuehome.i-deal.com/Parity/asp/main.asp?frame=content&page=parityBi
... 9/23/2004
Bid Form
Upcoming
Calendar
Page 1 of2
Excel
i Overview
Overview
iI Result
ResunIIExcel
I
UBSFinancialServices Inc.- NewYork,NY'sBid
Fairfax County
$326,335,000 Public Improvement and
Refunding Bonds, Series 2004B
For the aggregate principal amount of $326,335,000.00,
we will pay you $356,926,078.50,
plus accrued
from the date of issue to the date of delivery. The Bonds are to bear interest at the following rate(s):
rity Date
nt
pon %
10/01/2005
10,3651\/1
6.0000
10/01/2006
17,220M
5.2500
10/01/2007
17,130M
5.0000
10/01/2008
21,155M
5.0000
10/01/2009
20,950M
5.0000
10/01/2010
20,785M
5.0000
10/01/2011
20,7201\11
5.0000
10/01/2012
20,705M
5.0000
10/01/2013
20,6901\11
5.2500
10/01/2014
20,670M
5.2500
10/01/2015
20,585M
5.0000
10/01/2016
20,425M
5.0000
10/01/2017
20,270M
5.0000
10/01/2018
13,250M
5.0000
10/01/2019
13,165M
5.0000
10/01/2020
9,650M
4.0000
10/01/2021
9,650M
4.0000
10/01/2022
9,650M
4.1250
10/01/2023
9,650M
4.2500
10/01/2024
9,650M
4.2500
Total Interest Cost:
Premium:
Net Interest Cost:
$147,857,041.87
$30,591,078.50
$117,265,963.37
TIG:
Time
interest
3.589810
Last
Bid
Received
On:09/23/2004
10:58:50
EDST
This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of
Sale, and the Preliminary Official Statement, all of which are made a part hereof.
Bidder:
UBS Financial
Contact:
Michael
Title:
VP
Telephone:21
Fax:
Services
Inc., New York, NY
Azzinaro
2-71 3-2880
212-262-0684
https://www.newissuehome.i-deal.com/Parity/asp/main.asp?frame=content&page=parityBi..
. 9/23/2004
Bid Form
IssuerName:
Accepted
rage
FairfaxCounty
By:
Date:
Company
Name:
Accepted
By:
z ot z
Date:
01981-2002
i-Deal LLC, All rights reserved,
Trademarks
https://www.newissuehome.i-deal.com/Parity/asp/main.asp?frame=content&page=parityBi
... 9/23/2004
i
OFFICIALSTATEMENTDATEDSEPTEMBER16,2004
s ~H
In the opinionof Bond Counsel,under existinglaw and assumingcontinuingcompliancewith the
provisions of the Internal Revenue Code of 1986, as amended as described herein, interest on the Bonds will not be
includable
inthegrossincome
oftheowners
thereof
forFeci~ral
income
tarpurposes.
See"TAX
MA7TERS"
herein
forcertnin
provisions
oftheCode
thatmay
affect
thetaxtreatment
ofinterest
ontheBonds
forcertain
bondholders.
NEWISSUE
RATINGS:
Full Book-Entry
P~~
Fitch...........................................
Moody's.....................................
Standard & Poor's.,.......,..,..
$326~35,000*
Fairfax County, Virginia
Public Improvement and Refunding Bonds, Series 2004 BDated: Date of Delivery
0-
F9:C%
Intereston theBondswillbepayable
semi-annually
oneachApril1 andOctoberI, commencing
Aprili,
2005.
B1
ii:"
$
3
Due: October 1, as shown below
The Bonds are subject to redemption prior to maturity in whole or in part at any time on or after October i,
2014 at a redemptionprice of par plus accruedinterest.
The Bonds are being issued for the purpose of financing various public improvementsand, subject to
favorable
market
conditions,
torefund
certain
outstanding
bonds.
a
E
s~:3
8?P
The Bonds will be general obligations of Fairfax County, Virginia, for the payment of which the Board of
Supervisors
of the Countyis unconditionally
obligatedto levyandcollectan annualad valoremtax,unlimitedas to
rate or amount, upon all property in the County subject to local taxation.
MATURITY
DATES,
PRINCIPAL
AMOUNTS,
INTEREST
RATES
AND
PRICESNIELDS
Maturity
~2
i~~
~ '"%
~S.Ei
sja
p
~~.·
o ·-
Date
2005
2006
2007
Principal
Interest
Amount*
Rate
Priceor
Yield
$10,365,000%
17,220,000
17,130,000
Maturity
Date
2015
2016
2017
Principal
Interest
Amount*
$20,585,000
%
21,155,000
2018
13,250,000
2009
20,950,000
2019
13,165,000
2010
20,785,000
2020
2011
20,720,000
2021
9,650,000
9,650,000
2012
20.705,000
2022
9,650,000
2014
20,670,000
2024
9,650,000
20,690,000
2023
Yield
%
20,425,000
20,270,000
2008
2013
Priceor
Rate
L
9,650,000
s~m
c~,01
TheBonds
areofferedfor
delivery
when,
asandifissued,
subject
totheapproving
opinion
ofgidley
Austin
Brown & Wood LLP, New York, New York, Bond Counsel. The Bonds will be available for delivery in New York,
New York, through thefacilities ofDTC on or about October 19, 2004.
~f~~n~'
O .~ "
This and the inside cover page contain certain information
for quick reference
only. They are not a
summary
ofthisissue.Investors
mustreadtheentireOfficial
Statement
toobtain
information
essential
to
·~~~~ themaking
ofaninformed
investment
decision.
September_,2004
~ $ S *Preliminary,
subjecttochange
I
County, Virginia
BOARD
OF SUPERVISORS
Gerald E. Connolly, Chairman
Sharon Bulova,
Joan
Vice Chairman
M. DuBois
Michael R. Frey
Penelope A. Gross
Catherine M. Hudgins
Gerald W. Hyland
T. Dana
Kauffman
Elaine
McConnell
Linda Q. Smyth
COUNTY
OFFICIALS
Anthony H. Griffin, County Executive
Verdia L. Haywood, Deputy County Executive
Robert A. Stalzer, Deputy County Executive
David P. Bobzien, County Attorney
Edward L. Long, Jr., Chief Financial OfJicer
David J. Molchany, Chieflnformation O~f~icer
Robert L. Mears, Director, Department of Finance
SusanW. Datta,Director,Departmentof Managementand Budget
Leonard P. Wales, County Debt Manager
FINANCIAL
ADVISOR
Public Financial Management, Inc.
4601 North Fairfax
Suite
Drive
1130
Arlington, Virginia 22203-1547
(703)741-0175
BOND
COUNSEL
Sidley Austin Brown & Wood LLP
787
Seventh
Avenue
New York, New York 10019
(212)839-5323
For information relating to this Official Statement please contact:
Edward L. Long, Jr., Chief Financial Officer
Fairfax County, Virginia
12000 Government Center Parkway, Suite 552
Fairfax, Virginia 22035-0074
"
(703)324-2531
I·:jl
person has been authorized by Fairfax County to give any information or to make any representations
with respect to the County or the Bonds other than those contained in this Official Statement, and, if given or
made, such other information or representations
may not be relied upon as having been authorized by the
County. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor
shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person
to make such offer, solicitation
or sale.
The information
herein is subject
to change without notice, and
neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances,
create any implication that there has been no change in the affairs of the County since the date hereof. This
Official Statement is not to be construed as a contract or agreement between the County and the purchasers
or owners of any of the Bonds. Any electronic reproduction of this Official Statement may contain computer
generated errors or other deviations from the printed Official Statement.
version
In any such case, the printed
controls.
TABLE
OF
CONTENTS
Pane
~NTRODUCT~O~
···i····························--···.··i·····.···~·······.···ii···i·······.··i.······1····i··i··1·i······i···············.···(··.·.·.·.···ii.,i·i;jr..;
TI~E BONDS ""'·r''~"::.·":·"l"''~"tr.·..····I··"'·""'r····'·r'·"":·L''"""',''··''r"""'r·"'·'":""'~'t··l·'"""""""t'.""':'·'
:...-1 Authorization And Purposes; Refunding Plan ................;..................................:...................;....;...:......................1
Iies~on
·;.,;i··;:;i·;;ri···.·;··;I;;;::;.;··;.·.1···;2;;..;.,......;;;;;I..i;.;;i;.;.:.i;i..i;....;·.....;.....lil....:...;;.:..;.;.;l.;;......l;..i.·:;...;i::..;;i:i
2
Z
OptionalRedemrifiba.
,'.,1~;.;,..r·I;
I:
security..............:......;.........................................;......................................................;.....................·..-·.·-··-·····-·.···
2
StateAi~c~
InterceDt,.................................,................;;.....i··r···············.·····i··..·····;;·.~···.~·····i···························.········i
~~~
r~t~ales
:..: ·::
NojiitigationReespecting
TheBonds.,.l:..:.................................;..........................................;....·-··.···..··..·····.·.·1··.·-3
·~~~lfNTY'~i·:.i.;_:-...;;.;....;;,;......:..;..;...1.....;..;;.;j.......t.;.;;..;...;:i.;..;;;...;.;:..;:.,;;.I....,;:.:..:.;..,.:..1.;....;-;'.~i;..i,..l,l;4
GENERAL~ DESCRIPTION...................................................................................................................................·.··.Overview .................................................................................................................·.··············-·····························
4
4
Certain County Administrative and Financial Staff Members...............................................................................4
County Employees.............................................................................................................................··..··.············-6
GOVERNMENT
SERVICES..........................................................................................·.............................................
General Government Administration.....................................................................................................................
Public Works ...............................................................................................................................................··-·····-·
Public Schools ...............................................................................................................................................··-··--·
6
6
7
8
Transportation.........................g~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Il
Parks, Recreation and Libraries .............L........................................................................................................... 17
Community Development......................................................................................................................··.·.·.······-Is
Health and Welfare............l......................................................;.......................................................·.-.···············
Judicial Administration.....................................................................................................................·--.··-·······-····
19
20
Public Safety.......................................................................................................................................·.·····-·······-·20
Water Supply Service ............................................................;..............................................................-..·.···.·-····22
ECONOIL~C
FACTORS
...................................................................................................................................·.··.·-··
22
Economic Development ...............................................................................................................................·.·-··-22
Employment ..............................................................................................................................·.························23
Population..................................................................................................................................····-···············-·····26
Construction
Activity
...............................................................................................................·.··-········-·-··-······-·
29
Housing....................................................................................;..........................................····-······················-·····
30
Colleges and Universities ..........................................................................................................·.···-················-···30
CulturalAmenities............................................-·······..·..·····.··.·..................................·.········································
30
DEBT ADMINISTRATION
..............................................................................................................·.·.········-·····-··--·
31
of Bonded
Authorized
Limits
Indebtedness......................................................................................................................
but Unissued
on Indebtedness
Bonds
31
.................................;........................................................................................
31
........................;..........................................................................;.....1..............................
31
Other Tax Supported Debt Obligations ........................................................;....1.................................................
Lease Commitments and Contractual Obligations .......................................,......................................................
31
32
DebtServiceon Tax SupportedDebtObligatio$s........................................................1...........;..........................
33
Sewer
Debt
Revenue
Ratios
Bonds
...........................................................................;.............................................................
35
..........................................................................................................................................................
36
Underlying Bonded Indebtedness........................................................................................................................
TAX
BASE
38
DATA..................................................................,..................................................................................
39
INFORMATION.....................................................................................;............................................
42
FINANCIAL
Five-Year Summary of Revenues, Expenditures and Fund Balances for General, Special Revenue and
Debt
Service
Financial
Certain
Funds
42
Policies.................................................................................................................................................
Financial
Procedures
44
.......................................................r.......................................................................
44
Investment Management Policy ......................................................i...................................................................
General Fund Revenues, Expenditures, Transfers and Beginning Fund Balance................................................
General Fund Summary.......................................................................................................................................
45
46
46
Revenues..............................................................................................................................................................
47
Expenditures and Transfers .................................................................................................................................
EY 2005 Budget .......................................,..........................................................................................................
49
49
CAP~AL
IMPRO~EMENT
.RET~RE~
PROGRAM....;...................................................................................................;........
SYSTEMS
50
.;...,...-;;;,;1-..';..;...;ii;.;..;;...;....,.,.;.........;....;.;:..i....l.;;.....:...;...i.;·.;i.;.;:;;;.....;.....;;I;.;...;.;...;;..
CONTINGENT
LIAB~
~
~LAIMS
...;1.,..;.....;...;.......i.,.;.;.........i..;...i.....:......l..i.;..;............;.....................
51
APPROVP;L OF ~I~,i?dAi;PRi~~CEEi~)~NGS
..1.:......:.:....;1;.:;........;..............I.......;..............:........................................
TAX MAT~
~~o~~
Couns~el
I-·
'''`:··:"':~'i··
:
51
51
;...;.....;..;,....; 51
··;··~·~:;:····: ·.·~1:..··I·i-..-;. :;.;
51
""""""""""""""""""""""i"'i"""""'""""""'i""""'i"";"""""'";"""""""';'""""""
OriginBiIssue'Dis~unt .;:...:.:..:.......;..........;;...:......................1....;......:.....;;..;.....;.....'.............:..:............;.............
52
Issue
Original
::::
Premium
.....;..................,...............................;...............1....;...............;..
:Call~~~~ax~~nces
FINANCIAL
ADVISOR
-:--·: ::':
i':
···'r·1·-"""""·-·····-·············-··-·····-········-.·r·····.·····---·-.····-·····-······-·-······-····
.........;.............................
::: :::;_::-
............................................................................................................................................
RATINGS
...............................................i......i........................................i........................................
52
52
53
53
SALEAT~~;~;~;~;~;~;~;~~;~;~'BIDDING......:............................................:...................................................................
53
CERTIFICATE
CONCERNING
MISCELLANEOUS
FUTURE
FINANCIAL
PRELIMINARY
OFFICIAL
STATEMENT
....................................................................................
...................................................................................................................................................
INFORMATION..................................................................................;...............................
OFFICIAL
STATEMENT
DEEMED
FINAL
...............................................................................
53
54
54
54
APPENDICES
Organization of Fairfax County Government ................................................................................................Appendix
I
Locations of Political Jurisdictions ..............................................................................................................
Appendix II
Map of Fairfax County ...............................................................................................................................
Appendix In:
Combined Financial Statements ......................................................................................i..........................Appendix
IV
Book-Entry Only System .....................,...................................;..................................................................
Appendix V
Proposed Form of Legal Opinion ...........................................................................................................1...Appendix
VI
Continuing Disclosure Agreement............................................................................................................
Appendix VII
C):l
STATEMENT
FAIRFAX COUNTY, VIRGINIA
Regarding
$326,335,000'
Public Improvement and Refunding Bonds, Series 2004 B
INTRODUCTION
Thepurpose
ofthisOfficial
Statement,
whichincludes
thecoverandinsidecoverpagesandtheappendices
hereto, is to furnish information in connection with the sale by Fairfax County, Virginia (the "County"), of its
$326,335,000"
Public
Improvement
andRefunding
Bonds,
Series
2004B(the"Bonds"
orthe"2004
BBonds").
THE
BONDS
AuthorizationAnd Purposes; RefundingPlan
;` ' :
."~~~~2~"pad.~ theBoard
qf~up~
i6' A;ticle
F~irfax~Zl~i;ui~itii(tl~"Board~d~f~;dn2';~2~d4~w:pusuant
VII,the
i-:,
--;
:Const~tiiiion
~f ii~~i~i~;~'th~PubiicFiil~iric~·A~t
-dff991,c~iifrir~"2~:i;~tie
15.2,Codedf Vi;giI~ia;.''f9;~i~6~::~
:::-' :amended (the "Act").
purposes:
kp~n;of 'the
: Bonds-will
be issii~i~;to-~ro;Gi~i~i~Le
~fui~ds
·intiik following
amounts"
for the foll;o~·i~i~
SchoolImprqve~mentst.....·t···-···················-·····i·················.....................
$125,590,000
'P;arks
aiidEzark
FaciiitieS:.,I...,...i.;~.;;i...
13,92d,Oii0
PublicSafetyFacilities..................:...............~~~~~~~~~~~.~..'~~~.lr....:......:.......
54,750,000
Commercialand RedevelopmentAreaImprovements..................~~
~~~~~~
Total
4.500,000
$
198.760.000
A portion of the Bonds are authorized to be issued to provide funds, with other available funds, to refund
andtoredeem
priortotheirrespective
maturities
thefollowing
outstanding
bondsoftheCounty
referred
tohereafter
asthe"1997B Refunding
Candidates",
the"1998A Refunding
Candidates",
the"1999B Refunding
Candidates"
andthe"2000A Refunding
Candidates",
andcollectively
as the"Refunding
Candidates"*:
Series
of
CUSIP
Nos.
Re~u~d~iB~d~ Principal
Amount* Maturities" Redemption
Date Redem~tion
Price 303820
2006-2017 December1,2005
102%
1998A
1997B
$36,000,000
45,600,000
2007-2018
102
TF1-TS3
1999B
50,160,000
2008-2019 Decemberi, 2007
102
WW0-XH2
2000A
52,800,000
2009-2020
102
XS8-YDO
*Preliminary,
subjectto change
Junei, 2006
June1,2008
SKI-SWS
1
The County'sdecision
The purposeof the refundingis to achievepresentvaluedebt servicesavings.
conditions at the time of the sale
to refund any given Refunding Candidates is subject to prevailing market
Candidates
if refundingsuchCandidates
permitsthe
of the Bonds. The County may refund only ceaainRefunding
County
to
·j
meetcertain
savings
targets.TheRefunding
Candidates,
ifany,thatarerefunded
withproceeds
ofthe
Bonds are referred to as the "Refunded Bonds".
Upon
delivery
andissuance
oftheBonds
bytheCounty,
proceeds
thereof
willbeused
toprovide
forthe
of the RefundedBondsby depositingwith WachoviaBank,N.A.,as escrowagent,
cashandnon-callable,
directobligations
of the UnitedStatesof America
pursuantto an escrowdepositagreement,
payment and redemption
the maturing principal of and interest on
which,togetherwithsuchcash,willbe sufficient
to payall principal,
applicableredemptionpremiums,and intereston the RefundedBonds to their respectiveredemptiondates. The
redemption
sufficiencyof the cash and securitiesdepositedwiththeescrowagentto paythisprincipalof,applicable
premiums,and intereston the RefundedBondswill be verifiedby McGladrey& PullenLLP, Minneapolis,
Minnesota.
Thesources
andusesoftheproceeds
oftheBonds
andother
available
funds
aresummarized
assetforth
below.
Sources
Par amountof the Bonds.................·········-·····-·····
$
NetofferiIlg premium.,....l.....l...··.···1..:.".....:r....".
County contribution...li;;·;-;·;l···..·-·;···i;·;;············;·
Total Sources;,.....,...;;...:.;.·······;··.··i··t..:....;..;..., ~
Uses
PublicImprovemenfs,i:;,:,,-:-.;;:-·:··.·.···.·::··:·····:·····
$
DepositwAh Escrow Agent .................··········-·····
Underwriters' d~count.....r:.,,
Other issdance
:,-::::
expenses.,..l.i.;......i·······i····-······-···
Total Uses ................········································
$
Description
The Bonds will be dated the date of their delivery, will bear interest from their date, payable semi-annually
AprilI, 2005,atrates,andwillmature,
inamounts
onOctober
I in
on each April 1 and October i, commencing
2024,
inclusive,
as
set
forth
on
the
cover
page
of
this
Official
Statement.
The
Bonds
each of the years 2005 through
of $5,000andintegralmultiples
thereofunderthe book-entry
systemof the
and
principal
and
interest
on
the
bonds
will
be
payable
in
the manner
DepositoryTrust Company("DTC"),
will be issued
in denominations
described
in Appendix
V, "BOOK-ENTRY
ONLYSYSTEM".
Optional Redemption
i, 2014,are not subjectto optionalredemption
beforetheir
are
subject
to
redemption
prior
to
maturity,
at
the
option
of the
maturity.TheBondsmaturingafterOctober1,2014,
County,from any moneysavailablefor such purposeon anydatenot earlierthanOctober1, 2014,in wholeor in
priceequalto theprincipal
amountthereof,
part tin integralmultiplesof $5,000)at any time,at a redemption
The Bonds maturing on or before October
together
withtheinterest
accrued
totheredemption
dateontheprincipal
amount
toberedeemed.
Security
The Bondsare generalobligationsof the Countyfor which its full faith and credit are irrevocably pledged.
ofSupervisors
shall,ineachyearwhileanyoftheBonds
shallbeoutstanding,
levy
The Act requires thattheBoard
subject
to localtaxation
sufficient
topaytheprincipal
and collect an ad valorem tax upon all property intheCounty
i ::::i
and the interest onthe Bonds as the same shall become due, which tax shall be in addition to all other taxes
authorized to be levied in the County.
State Aid Intercept
The provisions of Section 15.2-2659 of the Act, in substance, direct the Governor of Virginia, upon
satisfactory proof of default by the County in the payment of principal of or interest on the Bonds, immediately to
order the Comptroller of Virginia to withhold all further payment to the County of all funds, or any part thereof,
appropriated and payable by the Commonwealth to the County for any and all purposes until such default is
remedied. For as long as the default continues, the law directs the Governor to require the Comptroller to pay to the
holders of such Bonds or the paying agent therefor ail of the withheld funds or as much as are necessary to cure, or
to cure insofar as possible, the default on such Bonds. The Governor shall, as soon as practicable, give notice of
such default and of the availability of funds with the paying agent or with the Comptroller by publication one time in
a daily newspaper of general circulation in the City of Richmond and by mail to the registered owners of such
Bonds. Although the provisions of Section 15.2-2659 have never been tested in a Virginia court, the Attorney
General of Virginia has opined that appropriated funds can be withheld pursuant to its provisions.
Remedies
The Bonds do not specifically provide any remedies that would be available to a bondholder if the County
defaults in the paymentof principal of or interest on the Bonds, nor do they contain a provision for~the appointment
of a trustee to protect and enforce the
inter;es~tsof the bondhdlders:upon . the
occurrence of such default. If a
: '
· .· .
bondholder does not recei\ie payment ~f prlncipil orint~rest
when due, the hdlder;colild se~k to obtaiii a writ of
rnandamusfrom a court:'~o~or~,et~t~~iltjlirisdictiqn
requiring'tht Board of Su~firjso~ 50 l~landcdllect
~ii~ad
valoremtax,unlimit~ed
as to rateor amount,uponall propertyin~;~eCountysubjecto: localtajtatiq~sufficientto
paythepriricipal
ofand;4he
i~ter~s~~~ Bondsas'the`sa~n~
~~allbedoni~l~e.
~h~~~~~~~,:
~4ui~veI;
maybe'ir~iiraC~tic~a~bl·e
~riU:'cii~f~cult.to
e~ljr~e.:.The
enforce~g-bilitjl~f
rights
~l~~i~e~r~~th
re~p'ectltdthe
B~olids
(butnot the validityo~theBond~may;
be iimit~'by':bar;icruIjtcy,
insolvenclt
or other`tateor ~Federai;laws;
.
~t"f"~ "'h"~~ ~~,~cf
equitab~~pfih~~~
~F~g ~t~jenforcem·i~t
~f~~~y;~.
:::_1
:-- 1·.
The County has never defaulted in the payment of either principal or interest on anyindebtedness.
No Litigation Respecting The Bonds
No litigation is pending or, to the best of the County's knowledge, threatened (a) to restrain or enjoin the
issuance, sale or delivery of any of the Bonds, the application of the proceeds thereof or the pledge of tax revenues
for payment of the Bonds, (b) in any way contesting or affecting any authority for the issuance or validity of the
Bonds, (c)·in any way contesting the existence or powers of the County or (d) that, if determined adversely against
the County, would have a material adverse effect on the County.
See "FAIRFAX COUNTY -- CONTINGENT
LIABILITIES AND CLAIMS" for a description of litigation affecting the County.
COUNTY
GENERAL
C9·
DESCRZPTION
Overview
TheCountyis locatedin thenortheastern
cornerof Virginiaandencompasses
an areaof 407squaremiles.
Its current estimatedpopulationis approximatelyone million. The County is part of the Washington,D.C.
metropolitan
area,whichincludes
jurisdictions
inMaryland,
theDistrictof Columbia,
andNorthernVirginia.
The FairfaxCountygovernmentis organizedunder the Urban CountyExecutiveform of governmentlas
definedunderVirginialaw). Thegoverning
bodyof theCountyis theBoardof Supervisors
whichmakespolicies
for the administrationof the County. The Boardof Supervisorsis comprisedof ten members:the Chairman,elected
at largefor a four-yearterm,andonememberfromeachof ninedistricts,electedfor a four-yeartermby thevoters
of the district in which the member resides. The Board of Supervisors appoints a County Executive to act as the
administrative
headof theCounty.TheCountyExecutiveservesat thepleasureof theBoardof Supervisors,
carries
out the policiesestablishedby the Boardof Supervisors,
directsbusinessand administrative
procedures,and
recommendsofficersand personnelto be appointedby the Boardof Supervisors.(See AppendixL)
In Virginia,citiesand countiesare discreteunitsof governmentand do not overlap. FairfaxCounty
completely
surroundsthe Cityof Fairfaxand is adjacentto the Cityof FallsChurchandthe Cityof Alexandria.
(See AppendixII.) Propertywidninthesecitiesis not subjectto taxationby FairfaxCounty,and the County
generallyis notrequiredto providegov~mm~ntal
servicesto theirresidents:TheCountydoes,however;piovide
certain services to the residents of certain 6f thi~se c:ities pursuant to agreements with such cities;
In FairfaxCopntythere'~ loc~tedthreeincorporated
towns,Clifton,Herndonadd'Vienna;iyhicl?are
underlyingunitsof governnient:~thin
tlie County,and the ordinancesand regulationsof the Countyare, with
:
I:i
certainlimitationsprescribedby Statelaw, generallyeffectivein them. (See AppendixITI.) Propertyin thesetowns
certainservices
is subject to Cq~intytaxatioh arid the Csu~ty:provides
to their residents.
Thesetownsmay
incW
genkr~i~
obligati~d~n
~on~~a;ind~b~dneSS
t~it~bufthe prior approvalof t~ County(more'~ullydisduss~did
"FAIRFAX
COUNTY--DEBT
ADMINISTRATION').
Certain County Administrative and Financial Staff Members
AnthonyH. Griffin,CountyExecutive,
joinedFairfaxCountyGovernment
in 1989afterservingas Falls
Church,VirginiaCity Managerfor six years. He was appointedCountyExecutiveeffectiveJanuary17, 2000. He
previously
servedas DeputyCountyExecutive
fortheCounty.Hehadpreviously
servedas actingCountyManager
andDeputyCountyManagerof ArlingtonCounty,Virginia.He is a graduateof HobartCollegein Geneva,New
York, and holds Master's Degreesin Urban and RegionalPlanningand in Urban Affairs,with a concentrationin
UrbanManagement,fromVirginiaPolytechnicInstituteand StateUniversity.
VerdiaL. Haywood,DeputyCountyExecutive,
joinedFairfaxCountyGovernment
in 1978as Executive
Assistantto the CountyExecutive.Prior to joiningFairfaxCounty,Mr. Haywoodservedas SeniorBudgetAnalyst
for the City of Richmond,Virginia.Mr. Haywoodholdsa Bachelor'sDegreewith HonorsfromAlcornState
University,with a concentrationin PoliticalScienceand Economics,and a Master's Degreein Public
Administrationfrom the Universityof Illinois. He also was the recipientof a Ford FoundationGrant and Illinois
State Urban Fellowship.
Robert A. Stalzer, Deputy County Executive,joined Fairfax County Governmenton June 5, 2000.
Mr.Stalzerpreviously
servedas TownManagerfor theTownof Herndon,VAfrom1988untilJune2000. Hewas
Directorof Planningand Zoningfor RoanokeCounty,Virginiafrom 1983until 1988. Mr. Stalzerholdsa Bachelor
of Arts degreefromClarkUniversity,a Masterof Regionaland City Planningdegreefromthe Universityof
Oklahoma and a Master of Business Administrationdegree from Syracuse University. Mr. Stalzer is President-elect
of the Virginia Local Government Management Association.
B
P. Bobzien was appointed County Attorney by the Boardof Supervisors effective January 1993,
afterservingas a memberof the FairfaxCountyPlanningCommission
andas Chairman
of theFairfaxCountyGoals
Advisory
Commission.
Heis thepastChairoftheLocalGovernment
LawSection
oftheVirginia
StateBar,the
pastPresident
oftheLocalGovernment
Attorneys
ofVirginia,
andinJune2004became
the66"president
ofthe
VirginiaStateBar. Priorto assuming
his presentpositionhe servedas Assistant
Counselin the Officeof
Professional
Responsibility
of theUnitedStatesDepartment
of Justice.From1975to 1979Mr.Bobzien
wasan
associate
in
theFairfax
lawfirmofFitzgerald
andSmith.Healsoserved
asa Captain
intheJudgeAdvocate
General'sCorpsin the UnitedStatesArmyfrom 1971to 1975. Mr.Bobzienis a graduateof HolyCrossCollege
and holdsa J.D. from the Universityof Virginiaand an L.L.M.in TaxationfromGeorgeWashingtonUniversity.
Edward
L.Long,Jr.,ChiefFinancial
Officer,
joinedtheCounty
in 1977asa Budget
Analyst.
Heservedas
a Senior
Budget
Analyst
from1980to1983andasAssistant
Director
from1983to1989.
Hewasappointed
Budget
Director in October 1989 and Chief Financial Officer in 1997. Mr. Long has a Bachelor's Degree in Political
Science
fromEmery
grItemyCollege
anda Master's
Degree
inUrban
Studies
fromtheUniversity
ofMillyland
at
CollegePark. He has servedonthe Fairfax-Falls
ChurchCommunity
ServicesBoardand is activeand has held
offices in numerousprofessionalorganizationsin the NorthernVirginiaregion. Mr. Longservesas an adjunct
professor
at GeorgeMasonUniversity
andon the Government
FinanceOfficers
Association
(GFOA)
Standards
Committee
onGovernmental
Budgeting
andManagement.
In 1993Mr.Longwasrecognized
bytheWashington
Metropolitan
GFOAwiththeAnnaLeeBerman
AwardforOutstanding
Leadership
inGovernmental
Finance.
DavidJ. Molchany,
ChiefInformation
Officer,joinedthe Countyin 1995.As ChiefInformation
Officer
(CIO) for the Fairfax County Government, Mr. Molchanyis responsiblefor the managementof all aspects of
information
an~ technology
neededto supportthe County Govlernm~nt ~mdits constituents; His'a~rireaof
responsibility
theDepartment
of Information
~hnology,theFairfax
County
PublicLibrary
andthe
Departr~ent
ofincludes
CableCommunications
and ConsumerProtection.He is also responsiblefor The HealthInsurance
-:pssta~ility
~:~~~bil~ty Act(HIPAA!
comolignc~
~nty~vide.
Heandhisdep~ntshave
been~::
by
numerous
organiiations'~oi
inriovative
use
o~
tec~logy.:
In2~102
the
Bertek~n
Fo;i~~gt~;n
ofGe~nis~
recognized
theCounty's
E-Government
program
asonedI-;he
fourtoppaceSetters
inthewoild.In2003Mr.
Mqlchany
wasrecognized
byGov~ingMagazine
asoneofthe,toptenPublic
Officials
oftheYear.Heis also
active
inr;lan~i·::pi;o~siona!
organiiatib~
and~has'b~-:
~bintkdbytheGove~;afV~ia;a~ :~~tf~':.
Assembly
toserve
onstatewide
councils
andcommissionson
technology.
Previous
employers
have
included
Sallie
Mae, American'Managemedt Systems and Electronic Data Systems;Mr. Molchanyis'a 1983graduateof;Tuniata
Collegeand holdsaBachelor
ofScience
degree
inMarketin~
andComputer
Science.
RobertL. Mearswasappointed
as FairfaxCountyDirectorof the Department
of Financeeffective
September
7,1999.From1989untilthen,heserved
asFinance
Director
oftheFairfax
County
Public
Schools.
He
joined the Schools staff in 1986 as a coordinator of the
logisticsbudgetafter servicewith the Countygovenunent
since19,81as a Management
Analyst. Duringhis time withthe Countygovernment,
he servedon the
interdepartmental
project
teamresponsible
forimplementation
ofthegovernment's
newautomated
financial
system.
Mr.Mearsreceived
hisBachelor's
Degree
m Sociology
fromtheCollege
ofWilliam
&MaryandhisMaster's
Degreein PublicAdministration
from the Universityof NorthernColorado. He is Treasurerof the Boardof
Trusteesof theFairfaxCountyEmployees'
Retirement
System(FCERS),
Chairman
of theInvestment
Committee
of
FCERS,
Treasurer
oftheBoardofTrustees
ofthePoliceOfficers
Retirement
System,
andTreasurer
oftheBoardof
Trusteesof the UniformedRetirementSystem.
Susan
W.Dattawasappointed
asFairfax
County
Director
oftheDepartment
ofManagement
andBudget
effective August 11, 2001. She had served as the assistant
directorof the Departmentof Managementand Budget
since1993.Ms.Dattareceived
herBachelor's
Degree
inAmerican
Government
fromtheUniversity
ofVirginia
anda Masters
ofPublicAdministration
fromtheUniversity
ofNorthCarolina
at ChapelHill.Ms.Dattaworked
as
Assistant
to theCountyManager
in Catawba
County,
NorthCarolina,
from1984to 1987.ShejoinedtheFairfax
CountyDepartment
ofManagement
andBudgetinMay1987as a budgetanalyst.
Leonard
P. Wales,CountyDebtManager,
joinedtheCountyas a BudgetAnalyst
in 1981andservedas
Assistant Budget Directorfrom 1989 to 2003. He was appointedto the newly created positionof County Debt
Manager in December 2003. Mr.Waleshas beenresponsible
for coordinating
thedebtmanagement
programand
capitalconstruction
financingfor the Countyand affiliatedsubdivisions
since 1986. He has beenactivein the
and has served in various volunteer positions including Chairman of the Supervisory Committee for the
Fairfax County Employees Credit Union. Mr. Wales holds a commission as a Captain in the United States Naval
Reserve, maintaining continuous active and inactive service since 1976. Mr. Wales is a graduate of the University
of Virginia and holds a Master of Urban Affairs degree from the Virginia Polytechnic and State University.
e(l)
County Employees
As of December 2003, there were 32,865 full and part time positions authorized for the County. Of this
total, 21,422 were authorized by the County SchoolBoard; 10,603 were authorized in other activities funded directly
or supported by the General Fund of the County; and 840 were authorized in activities not supported by the General
Fund, principally the Integrated Sewer System Fairfax County employees are not represented by unions. Fairfax
County public school employees have, however, organized the Fairfax Education Association and the Fairfax
County Federation of Teachers to represent the inteiests of its members at public hearings and meetings before the
County School Board and the Board of Supervisors. General County employees' interests are represented at these
types of meetings by the Employees Advisory Council and other groups such as Police, Fire and Sheriff employee
organizations. None of these organizations is empowered to serve as negotiating agent for its members for
collective bargaining purposes. Collective bargaining by public employees in Virginia is prohibited by law, and
such restriction has been upheld by the Supreme Court of Virginia.
GOVERNMENT
SERVICES
Reflectirrg't~ ~an :'d~iara~c~:~ey,~F~ax
Co~i~nty
prori~e~a Cd;nipre~i~sii·e
i~ingeof.pubIic s~~s
characteristic -of its form of government under Virginia law and itl; integral position within theWashington
metropolitan
area. The~following
subsections
describei~incipal
governmental
servicesandservicesperformedin
c9njuirirtionw~ other:goir~m~I~italentities.
General
Government
Administration
'I;heCpurii~::gi~iveinment
ctnt~r6omp;le~
i's·;:l~~lilitheIlairfax-C;e~te~
ar~i:ahcl
is.accessible
by.U.S.
B~)
Routes50 and29,nearInterstate
Highway
66. The674,9~jsquarefootgovernmentcenter
housescoreCounty
services and ageridit~s.Two adjacentCounty office buildingsproiride an additi~nal 486,129:squi~s:feetof spac~ and
house primarily human services and community development agencies and departments of the County. Six remote
governmental centers, in addition to the central government center complex, have been established. The centers
provide office space for members of the Board of Supervisors, personnel, police, and building inspectors, and
provide meeting rooms for community activities. In addition, during EY 2002, the County completed and occupied
a new 135,000 square foot governmental center for delivery of County services in the southeast part of the County.
Fairfax County has received national recognition for many administrative and managerial innovations
whichhavebeen implementedin orderto increasethe efficiencyof Countyservicesand reducecosts. For example,
decentralization in the administration of County programs has been emphasized in order to augment the efficient
delivery of County services. In early 2002, Governing Magazine released the results of a comprehensive evaluation
of management practices of 40 counties across the United States. This survey was conducted by the Government
Performance Project and the Maxwell School of Public Affairs and Citizenship at Syracuse University. A total of
five management categories were evaluated, including Financial Management, Managing for Results, Information
Technology, Human'Resource Management and Capital Management. Fairfax County was one of only two counties
to earn the highest overall rating of A- and Fairfax County was the only county to receive no grade less than A- in
any of the five management categories.
To support recent realignment of County functions, significant investments are being made in the County's
information technology capabilities. In addition to the investments related to the projects outlined above, the
County is also replacing and upgrading its Public Safety communications network; integrating existing databases
into a single Corporate Land Development System; digitizing the integrated mapping system; implementing
electronic imaging for the Circuit Court land records; and utilizing ongoing upgrades to provide online public access
to the County's library collections.
~1
In the area of revenue collection and financial management, the County has instituted many computerassisted programs in order to increase County revenues and monitor costs. For its approximately 331,000 taxable
land parcels, the County conducts annual assessments using computer-assisted appraisal programs similar to those
used throughout the Commonwealth. In addition, theDepartment of Finance maintains a cash management program
which generates long range cash flow projections for the County, permitting the efficient investment of funds. An
internal audit staff monitors County activities and performs both financial and management audits.
Public
Works:
Essential management, professional engineering, design, and construction services in support of the
construction of roads, sidewalks, trails, storm drainage, street lights, bus shelters, public facilities (except schools,
housing and parks)and sewers are provided through the Department of Public Works and Environmental Services.
The Department is also responsible for the acquisition of land for, and timely construction of, public facilities
projects contained in bond referenda questions approved by the voters of Fairfax County. Referenda questions
approved by County voters have included $492.57 million (excluding roads and transportation improvements) since
April 1988 for major public facilities, including libraries, the County courthouse, police stations, fire stations,
juvenile and adult detention facilities, mental health facilities, commercial revitalization projects, public safety,
neighborhood improvement projects and storm drainage projects. In addition, the Department is responsible for the
operation and maintenance of sanitary sewer and storm drainage systems, refuse collection and disposal, and
wastewater
treatment.
Wastewafe' ~g~enera~ed:~~in
the;~County is treated at one County-owned treatment facility, four
interjurisdictional treatment ~adili~t arid Q" private freat~ilentfai;il~ty. The County-owned treatment f~icilitjl,isthe
NomanM. Cole,Jr.,PollutionContcol
Plant~d~nieilytheLowerPatormad:Pollution
ControlPlant). The fdur
interjurisdictional
treatment
facii~ties'
aretheDistrictofColimbia
iNaterand~
SewerAuthority's
BluePlainsFacility,
and;plants
o~o~p~er~ed:[b;y
the~
~i~:ogui~r:~~;·a;ge:~!~~ty
("·UOSA"~
Ariingtbn
C]d~~it~
~;lth~~e~~1~:_:_~_
Sani~ta~A~~ ((~S~AS~)::
Theenvaite~
tre~~m~i~t~.~iciii~ty
is theHarborView
t~jasteui~i~er
~reatmi~n~
County's treatnieht capacitl in~thes~x;facilitieS148
:i
~Fi~ieDepart~ikrit
madai~i~S;a~op~'the
:
_.
mii~iongallonsper day ("mgd").
::
-1·
I-95 Sanita`r~Laridfill located on approximately 500 acres'~irithe
southern
portionoftheCounty.Thisfacilityis operated
ona "special
fund"basis,whichutilizestipping
feestopr~'
f~r the'op~iation:
and;c·apital'kjtIienaituresof~the lai~dfil.ISir;ceDecember31, 1995,the landfillhas be~a~cledic~it~
to the disposalof ash whichis generatedby the incineration'
of municipalsolidwasteat the ArlingtonRAlexandria
Energy/Resource Recovery Facility and the Fairfax County Energy/Resource Recovery Facility ("E/RRF*'). The
County has initiated closure activities which involve placing a synthetic cap over the closed section of the landfill
along with landfill gas extraction wells and leachate collection systems. Capping activity has been completed on
approximately 150 acres of the site. The closure project is a multi-phase construction project which will be ongoing..throughout the remaining life of the facility. Dedicated reserves are established for this purpose, and the
County has met the financial assurance requirements set forth by the Virginia Department of Environmental Quality
regarding closure and post-closure care. Additional landfill requirements, either debris or sanitary waste, are met
through separate contracts.
The E/RRF burns solid waste delivered to the facility from the County, the District of Columbia, Prince
William County, and portions of Loudoun County and has a dependable capacity rating of 63 megawatts ("MW")
for sale to DominionVirginiaPower. FairfaxCountyand the FairfaxCountySolid Waste Authority,which was
created by the County, entered into a service contract (the "Covanta Contract") in August 1987 with Ogden Martin
Systems of Fairfax (now, Covanta Fairfax, Inc.), under which Covanta Fairfax, Inc. was obligated to design,
construct, operate and maintain a 3,000 ton per day resource recovery facility at the I-95 Landfill Site. Covanta
Energy Corporation, of which Covanta Fairfax, Inc. is an indirectly wholly-owned subsidiary, has guaranteed the
obligations of Covanta Fairfax, Inc. under the Covanta Contract.
Fairfax County is obligated under the Covanta Contract to deliver certain minimum annual tonnages of
solid waste to the ERRRF and to pay Covanta Fairfax, Inc. tipping fees for the disposal of such waste to provide
funds sufficient to pay the operating costs of the E/RRF and debt service on the bonds. The County's commitment
to deliver minimum quantities of solid waste to the E/RRF was based on "flow control" powers granted to the
County by the General Assembly of Virginia to direct private haulers of solid waste to the ERRRF. An adverse 1994
by the SupremeCourtof the UnitedStateshas createduncertainty with regard to thepower of local
Thesupplyof municipal solid waste to the E/RRF may be subject
to thecompetitivepricing
of alternative
disposalsites,
pressures,andin orderto maintain
its wastestreamto the E/RRF,in Augustof 1998theCountybeganto enterintocontracts
withwastehaulers,
providingthema discounton wastedisposalfees if fheycommit
to
keep
their
waste
within
theCounty.On
September14,1998,theCountyBoardofSupervisors
passed
a
resolution
clarifying
its
intent
to
enforce
onlyintrastateflowcontrol,whichis notimpactedby the 1994Supreme
Courtdecision.OnN~vember
23,1998,theBoard
governments to enforce flow control ordinances.
of Supervisors
)))I
approved
changes
totheCounty
Code,
atapublic
hearing,
which
provide
forintra-state
flowcon~ol;
OnApril1, 2002,CovantaEnergy
Corporation
andCovanta
Fairfax,
Inc.(collectively,
"Covanta·3,
along
with a number of their affiliates,filed voluntary
bankruptcypetitionspursuant·toChapter11 of Title 11 of the
UnitedStatesCode(the"Banlauptcy
Code")in theUnitedStatesBankruptcyCourtfor the SouthernDistrictof New
York(the "BanlauptcyCourt"). Thecases
wereassigned
docket
numbers
02-40826
through
02-40949
On March 5, 2004, the
Ba~cruptcy
Courtentered
anorderconfirming
TheDebtors'
Second
JointPlanof
ReorganizationUnder Chapter11oftheBankruptcy
Code(the'aeorganization
Plan").TheReorganization
Plan
provides,amongother things,that Covantawouldassume
theCovantaContracton theEffectiveDatelasdefinedin
theReorganization
Plan). On March11,2004,Covanta
fileda noticewiththeBanlauptcy
Courtstatingthatthe
EffectiveDate of the ReorganizationPlan occurredon
March10,2004.Pursuant
tothetermsoftheReorganization
Planandtheorderof theBanlauptcy
Courtconfirming
it,Covanta
isdeemed
tohaveassumed
theCovanta
Contract
and is legally obligated to continue to Operatethe E/RRFin accordancewiththe CovantaContract.
DuringjFY
20~2,the
~pio~s~:n~r!y
1,028,000
tdnsofmateriril,
~ inFjl2~I~~::l;g941000
to"",exceeding
theguaran~ii
re~ulrements
by97,2~tonsana~
161,250
tons,relpectively.:Based
onthesuccess
of
:
the contractwasteprdgram,tileCountyiS continuingto ~ffe;a discduntrate to haulersfor contractualwaste
f~t~ during
EY2004
andFY2005.
Cby~~
F~x, Inc.is':e~ected
toexceetl
1million
tons~cessedfor
Tocomply with local directives, the ~U"tY hhasinitiated
a comprehensive
wast~ reduction
a"drecyc!ing
piogram.-Recycingis niiimialti;ryiior
all ~~derils~ bus;inesses.;
~r;e~
goalof:ti~e
recydlihg
progr~ain
io~i~~ce:
thi:
municipalsolid wastestreamby 25 percent,wasachieved
bythecloseof EY1992,3 yearsahead
ofSgte
~~iire~e6ts.Incalendar
par 2003the~u~~leb
~~oli~te!y
year 2004 the Countyestimatesthat the a;nount
32 percento~thevaste stream.~n calendar
recycledwillagainbe at least32percentof thewastestreamwhen
all data are compiled. The County'swastereduction/recycling
effortsinclude:
recycling
of glass,aluminum,
newspaper, office paper, ferrous
metals,
corrugated
cardboard,
usedmotoroil,automobile
batteries,
grass,leaves
andbrush
(withthedistribution
ofground
wood
mulch
toCounty
citizens).
Public
Schools
The Fairfax County Public Schools
Virginiaand is the twelfthlargestschool
(FCPS)is the largesteducational
systemin theCommonwealth
of
system
nationwide
whenranked
byenrollment.
Thesystem
isdirected
by
a twelve-person
SchoolBoardelectedby
the citizens
of FairfaxCountyto servefour-yearterms. A student
representative
witha one-yeartermparticipates
in thediscussions
butdoesnotvote. BecausetheSchoolBoardis
not empoweredto levy taxesor to incur indebtedness,theoperating
costsofFCPSareprovided
bytheFederal
and
Stategovernmentsand by transfersfrom the GeneralFundof theCountyto theSchoolBoard.(Seethesubsection
herein entitled "Expendituresand Transfers"in the
sectionentitled"FLNANCIAL
INFORMATION.")
Capital
~uo~snq~ction
funding
forpublic
school
facilities
isprovided
primarily
bythesale
ofgeneral
obligation
bonds
ofthe
FCPS is a high
quality
system
offering
a variety of programs.
There is a strong academicprogramfor
college-bound
students.Approximately
90%ofFCPSgraduates
enroll
in
post-secondary
educational
programs.
In
additionto the traditionalacademiccurriculum,
the
Thomas
Jefferson
High
School
for
Science
and
Technology
providesa four-yearcollegepreparatoryprogram
for studentswhohavea stronginterestandhighaptitudein
mathematics,science,computer
as one of the Governor's
science,
engineering,
orrelated
professional
fields.Theschool
hasbeendesignated
schools for science and
magnet
technology, and students from other Northern Virginia
countiesareadmittedona tuitionpayingbasis.
8
j
i
extensiveprogramfor studentspursuingopportunities
in technicalcareershas also been developed.
Various courses are offered in business, healthoccupations,
industrialtechnology,
marketing,
tradeandindustrial,
and work and family studies program areas. In addition,thereare specialprograms
offeredfor giftedchildrenand
for handicappedchildrenages 2 through21. A comprehensive
summerschoolprogramfor studentsin thegeneral
academic
program
as wellas forspecial
education
students
is offered.FCPSalsoprovides
anextensive
adult
educationprogramofferingbasic educationcoursesand generaleducation,vocationaland enrichment
programs.
Over80,000personshaveenrolledin theadulteducation
program
In FY 2004,
the School
Board
operates20 specialeducationcentersand 185 schoolsincluding136
elementary, 22 middle, 21 high and 3 secondary
schools
(grades7-12)and3 alternative
highschools.Amongthe
205schools
andcentersoperated
by FCPSarea varietyof specialprograms
designed
to enhance
student
achievement. These include two elementarymagnetschools with County-wideenrollment,eight elementaryor
middle focus schools with specific
partial-immersion
schools, and 11
curricular
approaches,
ten modified
calendarschools,26 foreignlanguage
International
Baccalaureate
programsat the middleand high schoollevel.
Approximately
19,143
employees
areassigned
to workinschools
and1,641positions
arenon-school
based.These
positions provide support in areas suchas personnel,
payroll,
and
maintenance
of
facilities.
There
are
513grant
funded positions.
In FY 2004, the averageelementaryclass size was estimatedto be 21.1 students per teacher. Kindergarten
classes
arestaffed
witha teacher
andaninstructional
assistant
atamaximum
classsizeof28students.
Elementary
schools are staffed with pupil-teacher ratios of 25.0 to 1 in grades 1 through3, with grade one classescappedat 25
students~maximum.
Grades4 thro~:d~arestaffedat a,;.pupi!-t~~F~ratio'of
27.0to 1. At;themiddleschool1~~,
thea~
r~~berofs~~n~sperdias~dm'tea~~r
is-~4.2
s~~isl ~it~g6:':-:
a~rage :of.24.5'$~t~~
at·thehighschoollevel.
Certainschi~0lb
~re identif;edas havingStude4fsl
~~
per li~i~e~:
sp~idial
needs:
:tliese·schools
havea:high
~il~·~.
plnce
minorityenrollment.SupplemetttajSt-~afi~ngisallattkdto
thesesc~i~ols.
lun~n
ellgrble
Studi,a
-
tiig:h~:
:
::
Thirty-two
elemen~schoo!s~
are~sign8~as~~al:rie~eds;
Clfthis~;::2i ~ b~sign~~ ~~1
schools.Theremaining13schoolshavea reduce~l.pupjl-teacher
ratioofZi.Oto i ingrades1 through
5 and:23.0
to
Ihave
i"grades
4through
6;maixi~ kinde~ga;te~n
tlass6iie.iisetat24students.
-IInadditionl;Z~
ele~~ s~p6ls: I
a 15.5 to 1 pupil-teacher ratio and 24 have a 15 to
1 ratioin the firstgradeto provideadditionai
supportto
students
withspecial
needs.Theseschools
wereselected
basedontheirstatusasspecial
needsschools,
Title1
schools,
orschools
witha highpercentage
offreeandreduced
priceluncheligible
enrollment.
Ninemiddleschools
and eight high schools are classifiedas special needs schools. Theseschoolshave additionalstaff,including
teachers, assigned to them.
In addition,ProjectExcelprovidesstudentsin 22 elementaryschoolswithfurther
reduced
pupil-teacher
ratios,fulldaykindergarten
andadditional
stafftimeforlearning
andenhanced
academic
programs.
FCPS provides a number of student intervention programs for the increasing population of non-traditional
learners. These alternativehigh schoolsandprogramsandfourEnglishfor Speakersof OtherLanguages
transition
centers
areoperated
throughout
theCounty.TheSummit
Program
is designed
to helpchronically
disruptive
students change their behaviors
andattitudes.
Theseprograms
areoperated
at 12sitesthroughout
theCounty.
shownbelow,the numberof students
and 2003.
attendingFairfaxCountyPublicSchoolsincreasedbetween1994
Enrollment for EY 2003 was 163,386, an
increase of 25,891 studentsover the FY 1994enrollment.It is
projected
thatenrollment
willincrease
through
2009.
Number of Public
Fiscal Year
School Students
1994
137,495
140,097
143,040
145,805
148,036
1995
1996
1997
1998
1999
151,418
154,523
158,331
161,385
163,386
2000
2001
2002
2003
~
Enrollment
Proieetions
2004
2005
t.-··-·.·;···;····-.1.;,.:;;...::..·....
.
,2006
2007
2008
164,667
166,780
: -168,459
:171,126
173,207
~i:3
Source: FairfaxdountyPublicSchools
Fairtax
County
hasachieved
is status
asa superior
quality
educational
school
system
whilemaintainirig.
oneofthelowerper-pupil
costsintheWashington
metropolitan
area.Theaverage
per-pupil
expenditures
basedon
FY2004approved
budgetoperating
costsforseveral
Washington
metropolitan
areajurisdictions
areasfollows:
Per-PppilExoenditur~s
ArlingtonCounty...............~~~~~~~~~~~~~~~~~~~~~~~~~~~
$13,950
City of Falls Church
CityofAlexandria
Montgomery
County
(Md.)
Fairfax
County..
13,377
12,198
10,644
10,113
d
z
Loudoun
Coun~y.............~~~~~~~~~~~~~~~~
9,604
City ofManassas
9,038
PrinceWilliam
County.........~~~~~~~~~~~~~~~....III~
8,205
PrinceGeorge's
County
(Md.)............~~~~~~~~~
8,014
Soi~rce~
FY2004
Metmpolitan
Area
Boards
ofEducarhn
Guide.
December
2003.
to
~Zi~i;
a
compares favorablywith other area school systems. In the 2004 National Merit Scholarship
program,210 FCPS studentswere namedsemifinalistsand FCPS studentsaccountedfor 52 percentof Virginia's
National Merit Scholarship semifinalists.
In addition,FCPS students'SAT scorescomparefavorablywith state and nationalaverageson Scholastic
Aptitude Tests administered by the College Board.
2003 Average Scholastic Aptitude Test Scores
United States
Virginia
Fairfax County
Verbal
Math
Total
507
514
546
519
510
564
1026
1024
1110
Source: Educational Testing Service
FCPS wasrated as a Gold Medal schooldistrict,the highestrating possible,by ExpansionManagement
magazinein its 2002 rankings. In its twelfthannualsurvey,the magazine'sEducationalQuotient("EQ") ranked
over 1,500schooldistricts. Accordingto the magazine,the EQ assists in determiningwhich school systemsare
like!yto producequalityworkersfor today'scomplexglobalmarkets. The magazineemphasizesthat schooldistrict
~desira~il~y~
is a majorfactor:fQr:gus~s~es
in~e~ei~ti~;~l:~ght
~b~i~t~~;~~aiis~a~s-I-'~i~l~~i~.rci~t~~i~,~·~:
·f~i~~
scored97 points_outofa possibleqs points,receivingthe-highest
~atingin the me~po!i~ ~~
2002,FCPSwasrankedin the top iO districtsnafidnally.
Inthelast~ yearsmbre.~gan
~1.5~illiori;~
8~~1 obligation
t;ond~
have
votersfor schoolconstrudtiori
prd~~d~:''InNoveh'iber
20~, Fiiiifax.Coi~i~fjr
vot~s'aut~t~e:
area. In
.~o~~SI
~iida~I~d;:~T
Sueervis~
toissuebonds
intheaggregafe
~untqf~90,~ mill~~r~~n~ngandcges~~ion~new,schools,
COUNTY - CAPITAL IMPPOVEMENT' PRO~~c~''.)
Transportation
General
FairfaxCountyis served by varioushighway,rail and air transportationfacilities. The CapitalBeltway
(Interstate,Highway
495), InterstateHighways95, 395, and 66 and the DullesToll Roadprovideaccessto all parts
of the Washingtonmetropolitanarea and major surfacetransportationcorridorsalong the eastern seaboard. The
Washington Metropolitan Area Transit Authority ("WMATA") rail system provides area residents with one of the
largest and most modern regional transit systems in the world.
Two major airports serve the County with daily nationaland internationalservice. WashingtonDulles
InternationalAirport,locatedalong the County's westernboundary,is also the site of a designatedForeignTrade
Zone. Ronald Reagan WashingtonNationalAirport, located a few miles east of the County, is accessibleby
InterstateHighways66 and 395. In 1987 controlof these facilitieswas transferredby a 50-yearlease from the
FederalGovernmentto the MetropolitanWashingtonAirportsAuthority("MWAA"),a publicauthoritycreatedby
interjurisdictional compact between the Commonwealth and the District of Columbia. In June 2003, the lease was
extended
to 2067.
Groundtransportationhas receivedsignificantattentionfrom the Countyin the past few years,primarilyin
an effort to relievetrafficcongestionalong the major arterialsleadingto Washington,D.C. and also to facilitate
cross-Countymovement,connectingestablishedand newly developingcentersof commerceand industry. Efforts
have includedincreasedlocal funding for highwayimprovements,establishmentof transportationimprovement
districts,creationof County transit systems,continuedparticipationin WMATA,and other improvementswhich
increaseduseof Metrorail,bus services
a"dcarpooling.
Th~County
alsoparticipates
in a regional
commuter
railsystemto expandthefamilyof transportation
servicesavailableto Countyresidents.
Since 1993, the VirginiaGeneral Assembly has authorized
a series
of
transportation bond authorization
bills
for
projects
in
Noahem
Virginia.
The
legislation
has
authorized
over
$540
million
inbonds
that
would
be
serviced
individually
froma varietyof sources
including
Z
recordation
tax revenuesthatare collectedby the
Commonwealth
onproperty
~ansactions,
tollroadrevenues,
and
right
of
wayfees. Projectssupported
by these
bonds
haveincluded
verysignificant
projects
benefiting
Fairfax
County
including
the
Fairfax
County
Parkway,
the
County's
share
ofcapital
costs
fortheWashington
Metropolitan
AreaTransitAuthority
Metrorail
system,
theDulles
toll.roadandothersmaller
projects
inaddition
tosignificant
projects
in neighboring
Arlington,
PrinceWilliam
and
Loudoun
Counties
thatsupport
theregional
transportation
network.
6
T
During its 2000 session, the General
Assembly
approved
theVirginia
Transportation
Actof2000.TheAct
provides funding for $2.64 billion in
~ansportation
projects
statewide
over
a
six-year
period.
Theseprojects
areto
be funded through a variety of sources, including Federal
Highway Reimbursement
Anticipation Notes,
Commonwealthgeneral funds, re-estimates
withrevenues
intheTransportation
Trust
FundandtheHighway
MaintenanceOperatingFund,additional
revenue
fromchanges
in fueltaxcollection
andseveralothersources.The
legislation
contained
numerous
projects
in
Fairfax
County,
including
improvements
to
U.S.Routei, U.S.Route
29,
1-66,I-95,I-495,theFairfax
County
Parkway,
andState
Routes
7 and123.TheActalsoprovides
funding
fora
g
numberof regionalprojectsincludingthe extensionof railin theDullesCorridor,
thereplacement
of theWilson
Bridge,Metrorailparkingexpansion,
Me~orail
replacement
andcommuter
railservice.
Inaddition,
the
legislation
included
provisions
forpayment
ofrolling
the stock
debtservice'for
theadditional
bonds
authorized
during
Ithe1999
ses~sion
~b;f'the
t;k~ qssenibiy.
Th~Boardof Supervisors
has
authb;ized
anadditional
$165million
ingene~zii.
obligation
bonds
for
·_i~a~si~~~n.i~uti~S8es,~sl
.s~ecfcv~'ri'favc;~ab~~ dh~j~v:~~00~;
::I:I :
-
HighwaL
Improvemehts
Stati~te
q~~nbrmally
r~~i6!e
for
._.;.i_:
ii
;;
;?
:jl-
Illlgllway
cqnstruqjon`
gndj~rit~n8irc~,;
iHdt;~ver,
highway
improvement
needsin Fairfax
County
farexc~_the:highway revenuesavailablefrom the State.
,:,--Pip~~~;$3~3 million-in
r~ad:i~rd~l iiuthdriieci
~the ~~ ih:1985:,i~8$
and,1'9~~uiity
'eferenha,
were
identified
ascriticaiCounty
bond
financing
hasenabled:these
Improvements
tobeundertaken
ata
muchearlierpoint as comparedto
Stateimprovement
schedules
which
are
constrained
by
current
State
gasoline
tax
rates and State-wide allocation formulae.
~D~
TheCounty
willhavenoliability
fortheoperating
costsfortheseroadsas
theyare,orwillbecome,
partoftheStateprimary
andsecondary
roadsystems
andwillbemaintained
bytheState.
Transportation ImprovementDistricts
TransportationImprovementDistricts
areanother
financing
alternative
forneeded
highway
improvements.
TheCounty,
in partnership
withLoudoun
County,
a
neighboring
jurisdiction,
formed
the
Route
28 Highway
Transportation
Improvement
District
onDecember
21,1987(the"District").
TheDistrictwasformedtoaccelerate
i
planned
highway
Improvements
proposed
bytheStateto StateRoute28 whichconnects
StateRoute7 in eastern
LoudounCountyto U.S.Route50 andInterstate
parallelto the County's westernborder. These
Highway
66inwestern
Fairfax
County,
running
approximately
initial
improvements
arenowcomplete.
StateRoute
28provides
accessto Washington
DullesInternational
Airport,
alongwiththeDullesAccessRoadandtheDullesTollRoad
which
connect
theCapital
Beltway
toDulles
Ah-port.
The District is administered
The District Commission
byaCommission
appointed
bytheBoards
ofSupervisors
ofthetwocounties.
mayrequest
theowners
of property
withintheDistrict
to a
maximumadditionaltax assessment
ofthe
20counties
cents to subject
transportationimprovementswithin the Dishict.
assessed value. Taxes collected
debt service on the
per $100of assessedvaluein orderto providefundsfor
TheDistrict
currently
imposes
a taxof 20centsper$100of
0"property
within
theDistrict
located
inFairfax
County
arecurrently
applied
to
outstanding
bonds
ofthe
Commonwealth
Transportation
Board
("CTB")
andtheFairfax
County
EconomicDevelopment
Authority
("EDA")
inrespect
oftheRoute
28project.
1
of Fairfax and Loudoun Counties and CTB have entered into an agreement concerning a
plan to finance six urban (grade-separated) interchanges for Route 28. These representatives have agreed to a
financing plan to provide funding for these interchanges through the issuance of bonds by the Fairfax County EDA
in an amount sufficient to provide approximately $90 million and bonds by CTB to produce an additional $36
million towards the cost of these interchanges with debt service on all the bonds to be payable from the tax levied in
the District. As a part of this plan the CTB refunded all of the outstanding bonds it issued in 1992 to permit the
pledge of the tax towards its refunding bonds, its new bonds and the EDA bonds. CTB has also committed an
additional
$67 million of VDOT
allocations
and $14 million
of NVTD
bonds towards
the cost of construction.
It is
anticipated that all six interchanges will be completed by the end of 2006.
The EDA completed the issuance of the frrst series of its bonds in October, 2003, to produce $30 million
toward the cost of the interchanges. In August, 2004, the EDA completed the issuance of the second series of its
bonds the effect of which was an additional $60 million toward the cost of the interchanges. The Counties have
each agreed to restore any amount drawn on the debt service reserve fund for the EDA bonds in the event District
revenues are insufficient to pay annual debt service. The Counties' obligations are subject to appropriation of funds
for the purpose of restoring the debt service reserve fund. Revenues collected in excess of CTB and EDA debt
service requirements will be held in a Revenue Stabilization Fund equal to maximum annual debt service on the
EDA bonds to pay debt service prior to any draw on the debt service reserve fund, in the event annual District
revenues are temporarily insufficient to pay annual debt service. With respect to the outstanding CTB bonds, in the
event District annual revenues are insufficient to pay annual debt service, the difference between the CTB debt
service requirement and the amount of taxes collected is paid for out of the annual allocation of Virginia Department
Of Transportation E?i~
System Highway funds.
::
tinderthetermssf the originalpetition,an additiorial
four,iri~hanges~andwid~ of a ~OEZiOq~
the
highwayfromsix tbeightI~nes.
vi~j~ii~
bepefmittehto be fu~-frbiniiis~t~·ict:~xes
ii s~fficient
fulidsar;ea;vaila6i~
howe~~ ig~iii~~~:~4bligatipnti,fundtheseadditioniil`iit~p~~~~
riSthisti~:- The~gf
D~I:e~p~e~:_:i~:~,-b~maL~o;f-:~,,bba~,~:s, a;~re· are.anyI~s~i~~iga~~~
n
the
so
outstanding.
·AllcurrerifCTB
~:pl8nned EDA'i~bligaliolns
willbe sdheduled
to be retiredbyiC~~.
: :· -Du··sits_~~~s~ the~rgmia~
~P;ssembly
~Ii~~:legisiaii~that"~u;ji~~
~ ::
one or mor~ special transportation taxing districts locat~d betw~en the WestFalls Church Metroi~ai~statibn and the
DupesAi~di~t~
ar~a~d]pi~e:~meinsdSfinancing
ariextensi0n
ofrailservice-iri,~
~Dulles:ddtr'i~dor.
~i~e~s~~~·:
of any such dist;ict is modeleda~terthe existingRoute i8 District. On February23, 2004, pursuantto a petition
submitted by landowners representing approximately 67 percent of the assessed value of commercial and industrial
property in the Tysons Comer and Reston commercial districts, the Board of Supervisors formed the Phase I Dulles
Rail Transportation Improvement District to provide funds to support the County's share of Phase I of a proposed
expansion of the Metrorail system to Dulles Airport and beyond. Phase I will construct approximately 11 miles of
rail line through the County's primary urban center, Tysons Corner, to Reston, and will tie the region's second
largest commercial center to the regional rail system.
TheCounty'ssharefor PhaseI construction
is estimatedto be $366.5million,or 25 percentof a projected
total of $1.5 billion required for the project. The current plan of finance calls for the federal government to provide
up to 50 percent of the funding through federal New Starts legislation. In June 2004, federal transitofficials
approved the start of preliminary engineering on the first phase of expansion from West Falls Church to Reston.
The Virginia Department of Rail and Public Transportation is expected to provide the remaining 25 percent. Funds
for financing the County share are to be provided from a real estate tax levy on all property zoned for commercial
and industrial use in the new district. Phase II of the project which will complete the 23 mile line to Dulles Airport
and beyond into Loudoun County is expected to cost $1.8 billion of which the County's share is expected to be
approximately$172 million,or approximately9 percent. The plan of financewill be similar to that of Phase I;
however, the local 25 percent share will be shared between Fairfax County, Loudoun County and the Washington
Metropolitan Airports Authority. The County expects to receive another petition in the near future from interested
landowners to form another tax district comprising the Reston-Herndon-Dulles commercial districts in order to
provide funds for Phase II financing. A special improvements tax of up to $0.40 per $100 of the assessed fair
market value of any taxable commercial and industrial real estate in the district could be levied. However, under the
terms of the petition the Board may not assess a tax greater than $0.22 per $100 of assessed value prior to the
issuance of any bonds, and may not construct a plan of finance that would require greater than $0.29 per $100
growthin valueof 1.5percentperyearlHowever,
oncedebtisincurred
theBoard
willbebound
onlyby
the statutory limit of $0.40 per
$100.
The local plan of finance anticipates
a tax levy priorto bond issuance so as to
buildadequate
reservesfor debtservicerequirements.
OnJune21,2004theBoard;
of Supervisors
approved
a
Special Improvements
Taxatarateof$0.22
per$100
ofassessed
value,
effective
Julyi, 2004.
CountyTrclplsitSystemr
Inaneffort
toprovide
analternative
toescalating
Metrobuscosts,theFAIRFAX
CONNECTOR
feederbus
serviceto Metrorail
Stations
hasoperated
since1985when
F
10
routes
initially
went
intoservice.
Since
thattime,
andrestructuring
hasoccurred
asdemand
has
increased
and
additional
Me~orail
Stations
have
B
service expansion
been opened. The FAIRFAX CONNECTOR
cunrently operates 55 routes to 9 Metrorail Stations,
including the
:
Pentagon,WestFallsChurch,
VanDorn,Vienna-Fairfax-GMU,
DunnLoring-Merrifield,
FranconiaSpringfield,
PentagonCity,Eisenhower
Avenue
and
King
Seeet
Stations.
Private
contractors
were
hired
tooperate
and maintainthe service,and have the
responsibility
toemploy
andsupervise
alltransit
personnel,
whiletheBoard
Of Supervisorsmaintainscontrol and approves
all policies for bus
service
such
as
routes
and
service
levels, fare
structures, and funding assistance.
TheFAIRFAX
CONNECTOR
Systemis
from the GeneralFund and fare box revenues.
Ridership
hassteadily
increased
sinceinception
inSupported
1985.
The
FATRFAX
CONNECTOR
carried7.6 million
passengersin FY 2003. FAIRFAXCONNECTOR
System
expenditures
totaled
$23,915,922
inFY2003including
~Ee~eg~tlrres.
The
County
runs
two
permanent
maintenance
andgarage
facilities
fortheFAIRFAX
-TheCounty
alsosponsors
FASTRAN,
aparatransit
systemprimatilytranspcirtingclients of four human
service
agencies:
theFairfax-Falls
Church
Community
Services
Board,ther)epartm~nt
of~-dommunityand
R""r~i~f~cin
Ser'~~~ _~~i~;df~ly S~es
mclu~ thdse:with
Id~iv
inco~a;i~i:~~le
with
p~icaian;l-Fdgditive
disabilities
whO
c~ot~~,fmd
a;ide, j
aaand
the~thD~:Th,
ciientsof
these
~ncies,
i:_.-_;
;1:
useh·letro
orCjo;mecldr
buses,draffordtaxifa;;es
2P02:~gding
~or~ap~~
canuse
FASTRAN
torea'ch'essential
programs
andservices.
FY
of~,5~·000 ~;provided~·~imarily~by
the clientfromIm
~pi~ating funds1S·
Iready
Seiiiic~~
thelr:~~~;~ir~g~.
designa~: :81
This
be~aii:$T~1198al
iu8S.~~srgn~
fo
programs
~individua$
administered
by eachagency.
provideadencralizeci,
moreeffectiveservice.iniikuof
j:
Q
iFASTRkN'spriv~i~~
co~~r prbvided
535,685
one_~~ks:in71i002for.~lients
h~ingh~h~ijis
to
e'mployment,
tl;erapy,
senior
centers,
adult
dayhealth
care,
andother
purposes
asdetermined
~'~:~·~:t"~I~:~:~c~'e~e",,
MetroTransitSystem
Since 1970, FairfaxCountyand
othermajorpolitical
subdivisions
in theWashington,
D.C.
metropolitan
areahavecontracted
withthethe
Washington
Metropolitan
Area
Transit
Authority
("WMATA")
to
finance,
construct
andoperate
a 103-mile
subway
andsurface
rail
transit
system
known
as
"Metrorail."
Funding
for
theconstruction
oftheMetrorail
systemhascome
fromdirectCongressional
appropriations
matched
bydirectlocal
contributions.FiveInterimCapitalContributions
Agreements
between
WMATA
and
the
participating
political
jurisdictions
havebeenexecuted
todate.Currently,
theFifthInterim
Capital
Con~ibutions
Agreement
('SCCA-V")
governsthe scheduleand costs for the Federaland
mileAdopted
Regional
System
("ARS").
localsharesof construction
of thefinal13.5milesof the103-
ICCA-V,executedon January29,
1992,
reflected
theFederal
authorization
of$1.3billion
tocomplete
constructionof the ARS by 2001. This accelerated
construction
schedule,
called
the"FastTrack"
program,
required
stableFederalappropriationsof $200million
peryearthrough
FY1998.Fiftymillion
dollars
waspaidinEY1999,
completingall federal·payments.Of
lastsegmentin FairfaxCounty
thefour
Metrorail
segments,
theFranconia-Springfield
segment,
which
isthe
landVirginia),
opened
inJune
1997.
Inaddition
segments
inMontgomery
County
~I~lland
and
theDistrict
of
Columbia
have
been
completed.
Thelastremaining
segment
opened
onJanuary
13,
This
is
In November, 2002,
the first comprehensive,
prioritizedtransit plan
theWMATA
Board
ofDirectors
adopted
a newl0-year
Capital
Improvement
Plan.
to maintain
the integrityof the existingcapital
14developed
~i~iq
androllingstockoftheMetrobus
andMetrorail
systems.Theplanalsoprovides
foradequate
systemaccess
and capacity growth to maintain current transit market share in the future and an appropriate level of system
expansionto reachnewtransitmarkets.Theplanas revisedin January2003established
requirements
for a $1.55
billionInfrastructureRenewalProgram,and $625.1millionfor 120rail cars and $171millionfor 115newbusesand
ancillary facilities and systems for expanded service to meet expanding demand. In conjunction with other partners
in WMATA,
FairfaxCountywillbeconsidering
optionsforfundingits shareof theserequirements.
Fundingsourcesfor FairfaxCounty'sMetrorailconstruction
contributions
are: generalobligationbond
proceeds,
Statebondproceeds
andStateaid. Through
June30,2003Fairfax
County
hadcontributed
approximately
$235.8milliontowardMetrorail
construction,
consisting
of $130millionof Countygeneralobligation
bond
proceeds, $102.7 million of State aid
for transportationand $3.1 million in credits. Fairfax County's obligations
underICCA-Vto providelocal matchingfundscurrentlytotal $113.2million. Since 1993,the Commonwealthhas
authorized
over$93millionof Statetransportation
bondsto be allocated
forusein FairfaxCountyforsupportof
Metrorail
construction,
replacement
of rollingstockand parkingexpansion.ICCA-Vlocalrequirements
are
reallocated every two years to reflect current conditions.
Fundingsourcesfor WMATAoperatingassistanceare:the GeneralFund,gasolinetax receipts,Stateaid
andFederalOperating
Assistance.FairfaxCounty'sshareof thebusandrailoperatingsubsidiesforEY1994-2003,
and the estimatefor EY2004are shownin the followingtable:
Fairfax County WMATA Operating Subsidies
OMil!ionsof Dollars)
Fiscal
Bus
Rail
Year~ ,Ope~t~~5.;(Iperatip~'
Mana~e~''l; Pars;
Less Federal
Less
Less Gas
Rior
.Ope~ating
. State
Tax
Year
transitl Subsidies A~
~··;;i··;;.-
··:-~r.----i--;
·
Net
~en~ra;i ;
Reeeipts3
::Credit . Fyrrd
i9944..,...:., ~33,6016
12~42 .:
:32d
2.325
. 20.164
31589
1995.........
29.921
13.261
.237
.626
2.318
22.204
3.451
.119
i5.956
1996.........
'29.424
13.793
.194
.844
1.509
21.956
2.757
.868
17.166
1998....:....
25,108
1~.714
.i70
;9~6
14.974
.305
1999;........
2000.........
18.197
. ;:14.067;:::!j_ :&Qs : :1.389 :i·:;; .1.122
24.199
i4.541
19.815
20.925
1.125
28.086
4.i23
.399
27;682 . 5.104
1.309
1.512
0.000
27.850
4.108
0.000
8.531
6.838
9.032
2001.........
25.001
17.644
.000
:2;029
0.000
28.654
6:840
1:409
7.492
.000
2.707
0.000
19.898
11.963
.758
12.793
2002.........
2003.........
2004test.)
26.247
25.495
28.011
18.844
20.139
18.588
.000
.000
.000
2.552
3595
4.936
0.000
0.000
0.000
26.720
25.433
23.871
10.240
10.949
10.550
r.100
2.087
5.574
9.583
10.750
11.540
Source:FairfaxCountyDepartment
ofTransportation
andDepartment
ofManagement
andBudget.
1
Theamounts
shown
foroperating
subsidies
forEY1994through
2003represent
actual
disbursements
inthoseyears.Adjustments
basedon
finalWMATA
annual
audited
figures
areincorporated
inthefiscalyearin whichthecreditforanoverpayment
wasapplied
ora debited
amountwaspaidratherthanthe fiscalyear in whichthe creditor debitwasearned,exceptas notedbelow.
2
3
In 1983,theVirginia
General
Assembly
enacted
legislation
permitting
theuseof Stateaidfortransportation
to fundtransitprogram
operating costs in addition to transit program capital costs.
InJanuary
i980,theVirginia
General
Assembly
enacted
legislation
whichestablished
a 2 percent
retailgasoline
tax,tobededicated
to
masstransitcosts,in thoseNorthern
Virginia
jurisdictions
coveredbytheNorthernVirginiaTransportation
Commission
("NVTC").The
receipts
fromthistaxarepaidtoNVTC
whichthenallocates
thesefundsto participating
jurisdictions
forpayment
oftransitoperating,
capital and debt service costs.
4
Rguresdonotincludea prioryearadjustment
(cost)of $219,772
whichwaspaidin EY1994withCountyGeneralFunds.
5
Includes
other service
enhancements.
TheAmericans
withDisabilities
Actrequires
thattransitsystems
provide
paratransit
service
forpassengers
withdisabilities.To complywiththeAct,WMATAbeganoperationof MetroAccess
onJunei, 1994,withlimited
hoursof service.Thehoursof operationwasexpandedin November1995,andfullservicebeganin January1997.
The localjurisdictions,
includingFairfaxCounty,will be responsible
for fundingthe operatingdeficitassociated
with this service. In EY 2003,FairfaxCounty'sshareof the operatingdeficitwas $3.595million.
15
FAIRFAX
j
$li
U)UWUIY
CO~TNTY
.1,
/
raor
"·zu,
~Uk
~DI·
.i'
'WASHINCTON,
ARLI~C~ON
/
FAUS
J
CHURCH
UNKl~lfATION
I:
r~p~urr
arcwroH
P~AZA
PE~LGON
u
~I~L~ISTK
-s~y~c~\·_
D.C.
Hii`non~u
~ec;Ri
r
AI.EXAPIDR!A
i
STREETDORN
·'1
.yCyC·1~PP1~~:~
tioid
P
·I
LUIUSS*S
AIT1WRT
jj
LO~T~N
c/St~L,
i
ccCC·
W0008RIOGE
C!
'i
ro
QCI~TICO
'
i
RROOKE
fREDPUO(SBURC
I1ETRO.·cqld~l~m
adap·d
oaQlng
LL~
Ibrh·NdO~llC·p~l
R·9m. ih· amnoy
~n(marr(h LX
a 1Q1mr ~an~l srsahbOn rmmn
wrr~an
ha VlrOILare U~l·nd ~PII~
9 Clddr
ao.l rmr nOd bI( ~rHo r ha Oraer a~Camsr.
bLO)Cldmd ~LD~~U· kVlhky
tll nvaa k
THEYE~RO- ~UPIOR*ILTRIHS~
SrSTE~ m F~wrJr cww~v S
YIRCINU RAILWArDBRESS
LOO~EO
OPER*TKm
Th IlbOk* RY~ E~p
* a b~PW1IQI
pr~m~ug ~M. b·gmnr~
k ~
(90Z 90racaa kO ~DmrmW~ll~d
hr On 90 rrmaa d Ld·l*p sadr
*OPnnMY
IS rmr d ha hahh op~
h F·Hu Can·y
rrrClg (ka ~ollor
hi
F~d~Oh·0.
Qw ka
V~pln~
~
hlbbvha
bah Inr
nw Umr~.
VLII~ and aw
lirmnuU ·I UrM SL·mn k Ou
(~~..((~,~~I((~~
SlSTSH
tLIWIE~LI#
IW~EOI~STEYIR(OER
CO~~~RUC~K)WOR OWIG(I
YE~RORUL
It*nOWJ
O*oldolb~mb~
YIRWU
RMWII
O ~""
16
EXPREU
Transportation Improvements
In conjunction with direct highway improvements and participation in WMATA Metrobus and Metrorail
operations, the County is examining other alternatives for commuting that will appeal to a wide variety of commuter
tastes, needs and economies. Initiatives which have been, or are now being, implemented include expansion of
parking facilities at Metrorail stations, establishment
of commuter "Park and Ride" lots, implementation
of a
transportation systems management program in the Dulles corridor, and establishment of a regional, publicly
operated commuter rail system.
Commuter
Park-and-Ride
Facilities
Fairfax County completed a comprehensive countywide analysis of its existing park-and-ride facilities and
projected demand for future facilities in February 1988. From this stldy, two significant capital initiatives were
undertaken
and over 7,500 structured and surface parking spaces have been provided at Metrorail stations in the
County. In addition another 1,086 spaces were provided through the County's Suburban Mobility Grant Application
to the Federal Transportation Administration ('%TA") for three park-and-ride facilities.
Dulles Corridor Transportation Systems Management ("TSM") Facilities
In 1989, Fairfax County Department of Transportation completed the Dulles Airport Access Road Corridor
Transit Alternatives Study. The study recommended and the Board of Supervisors endorsed implementation of the
Transportation
System
~ement ('~SM")alternative
in s~ic~:a:way
as to;p~serve,
theoptionoffuturerail
;:::
::::::;:''6;ond
servicein theC~rri;loi;Ori·gdv~k~i~e~
6, I990~,lcounty
vd~rsBIipioveil
$i~6lili~ilio~.of~b~~6i~ga~on
funds for implementation of the Dulles TSM program A grant application ~s:foruiaraed to the FTA ia:Decem~er
1990for $36.0million. E~A has appropriat~d$3;l.i millionof Federaldiscretionaryfunds forthis initi·dti~ve
thus
far.
·
-
-;-
"--
: : : :; .
The project includes two Park and Ride facilities at Reston East and Herndon-Monroe as well as two transit
centers.Thetransitcenterslocatedat:Tysons~s~~icPark
andRestonTownCenterwi)l·servejprimarily
as_p~
:traris;fkrpdints,:as:buses`~.at
th~se'tt8ns~:i~eriters
dn a ~~dri~ed scheduleto Ei~i~'t'~aSeof transf~ betv;e~n~
buses serving various areas of the Dulles Corridoi and Fairfax County. The Ijark-and-ridefacilities include 2,627
parkingspacesin twofacilities;: :
Commuter
Rail
Fairfax County as a member of the Northern Virginia Transportation Commission ("NVTC") and in
cooperation with the Potomac and Rappahanock Transportation Commission ("PRTC") is a participating
jurisdiction in the operation of the Virginia Railway Express ('lrRE") commuter rail service. As of June 30, 2003,
the service consisted of six peak period trips on the CSX Transportation line from Fredericksburg to Union Station
in the District of Columbia and six peak trips on the Norfolk Southern Railway line from Manassas to Union Station
In addition, midday service is provided on both lines. Five Fairfax County stations are currently operating.
The Master Agreement calls for the County to contribute to capital, operating and debt service costs of the '
VRE on a pro rata basis according to its share of ridership and population. Since 1990 NVTC has sold $102.3
million worth of bonds to finance passenger cars, locomotives, yard facilities and stations. Under the terms of the
Master Agreement debt service on these bonds will be funded by State and Federal funds and VRE revenues.
The VRE EY 2003 Budget identified its principal sources of revenue as: state and federal aid (58.3
percent), passenger revenues (26.3 percent), jurisdictional subsidies (10.1 percent) and miscellaneous income (5.3
percent). The County's share of the EY 2003 commuter rail operating and capital budget was $2.61 million.
Parks,
Recreation
and Libraries
Fairfax County provides a variety of recreational, educational, and cultural activities and services to people
who live, work and study in Fairfax County. In fiscal year 2003, the Fairfax County Public Library (the 'Zibrary")
morethan11millionloansandrecorded
morethanfivemillionvisitsto its21branches,
andreported
more
than 2.1 million
user visits to its Web site.
The Library has more than 2.5 million books and other items in its
collection,
andmorethan600,000
registered
cardholders.
LastyeartheLibrary,
which
wasranked
oneofthetop10
library systems in the United States, offered more than 4,000
freeevents and activitiesfor all ages,includingpuppet
showsfortoddlers,
storytimeforschool-aged
children,
bookdiscussion
groupsforteens,liveauthorvisitsforadults
andInternetnavigation
classesfor seniors.TheLibraryalsbmakeslibraryservicesavailable
andaccessible
to
people who have disabilities or are homebound. Thecommunity
showedits high regardand strongsupportfor the
Library by donating more than 162,000volunteer
hoursto thelibrarysystemlastyear. TheBoardof Supervisors
hasauthorized
an additional
$52.5millionin generalobligation
bondsforlibrarypurposes,
subjectto a favorable
referendum on Nov 2, 2004.
In addition,
a varietyofrecreational,
community,
andhumanservices
areprovided
bytheDepartment
of
Community
andRecreationServicesfor Countyresidentsof all agesand incomes.Theseservicesincludesenior
adult programs and centers, therapeutic
recreationservicesfor individualswithdisabilities;a varietyof youth
programs
including
recreational
activities
atyouthcenters;
community-based
recreational
opportunities
structured
to
meet the needsof the communitiesin whichthey are located;supportforFairfaxCounty'svariousvolunteersports
councils
andleagues;
anda variety
ofvolunteer
opportunities
tosupport
activities
inanyoftheseservices.
Fairfax
County
hasalsobeenparticularly
activein developing
andoperating
anextensive
parksystem
which provides a wide variety of recreational activities and facilities.The FairfaxCountyParkAuthority("FCPA"),
whosemembers
areappointed
bytheBoardof Supervisors,
operates
389parksencompassing
22,546acres.Since
Marchi, 2000,theFC~A has acquired!with Cpu?tysupeoirt,
over4,200~~oSlands for~park
purposes.Facilities
Opeiated;by
FCP~PA
indlude
iec~tioi;al
ceht~rs:with~
sw!mrmng
pools,
fitnesi
cen~;s~
~que~i~alllcqui~,
~lf
courses,naturecenters,lakefrontmarinas,miniaturegolf, amusements
suchas trainsand carouseis,tennisand
basketball
couas,~an
icerink,ca~i~iground~'~
gardenplots,e;ctensfr;etraiisl
historil;
properties,
p~nicsheiters,
Play
Ope~n
Is~g~'a~a~ildotherunlQue
ho~~E;oi~~
aii~aliy.
::
:~ollec~vell,
~pa~k systemis d~~y~ 82%ofFd~faje
dounty
The Northern Virginia~~ienal~Ear~e
~~arity ("~FiPAl),~~?~;~epend~t:i~~R
in whichtheCounty
~ajijtic~i~le~;'·~
~i~~;~t~~~;ll·~·9·P~I~~ic'2i~iii~
i~pproiin~i~telj;
:1~0;~:
acres.;hit~·A is c(i;it~i~I~uaualljrih
i~ ~~ceSs;of
completing,
acqliiring,
developing
or expandir;g
i~sregionalparkfacilities.In June2003,theEDAissuedrevenue
~i~Coiintj~,la
p~~dnof ti;e;proclebs,:in
tliea~nouni
of;$15,530;0001
OfiK~iich
were
-sondsbac~i~d
byla ~n;ti~i; ~tli
usedtofinance
a new18-hole
publicgolfcourseinthesouthern
partoftheCounty.
OnNovember
3, 1998,theCountyvotersapproved
bondreferenda
thatincluded
$87million
ofwhich$75
millionis for FCPAprojectsincluding
landacquisition,
renovation
of olderparksandconstruction
of a new
recreation
centerand$12millionis forcapitalcontributions
to theNVRPA.
OnNovember
5, 2002,thevoters
approved
a bond referendum
of $20 million
for parkpurposesincludinglandacquisition
andparkimprovements.
The Board of Supervisors has authorized an additional
$75millionin generalobligationbondsfor parkpurposes
including
landacquisition,
parkimprovements
andcapitalcontributions
to NVPRA,
subjectto a favorable
referendum on Nov 2, 2004.
Community Development
Inorderto enhance
thequality
of lifeandthecommunity
environment,
Fairfax
County
provides
many
direct and indirect services.
TheCounty
addresses
thehousing,
revitalization,
employment
andtransportation
needs
of County
residents,
andstrivesto provideandmaintain
a well-balanced
environment,
by adhering
to a
comprehensive land use plan.
Tomeetlowandmoderate
income
family
housing
needs,
theFairfax
County
Redevelopment
andHousing
Authority
("FCRHA")
wasestablished
in February
1966,havingbeenapproved
by a voterreferendum
in 1965.
Further,the Countyestablished
the Department
of Housingand Community
Development
to serveas the
professional
stafffortheFCRHA
andtocarryouttheCounty's
housing
andcommunity
development
programs.
In
EY1985,theFCRHA
andtheBoardofSupervisors
enteredintoa Memorandum
ofAgreement
whichsetforththe
working relationship between the two entities.
TheMemorandum
of Agreementand resolutionsadoptedby the
FCRHAreaffirmedthe CountyExecutiveas the ExecutiveDirectorof the FCRHA.
cr
FCRHA owns or administers housing developments in Fairfax County with staff and funding provided
from County, Federal, State and private sources. At the beginning of EY 2003 the FCRHA was assisting 6,537
households in Fairfax County through Public Housing; the Fairfax County Rental Program; Section 8 Certificates,
Vouchers and project based programs. The FCRHA has also provided financing for a number of privately owned,
assisted housing developments with a total of 711 assisted units as well as for privately owned developments
without
subsidies
which
reserve
a total of 821 units for lower
income
tenants.
Since EY 1993, a total of 965
Affordable Dwelling Units ("ADUs") have been developed and sold to moderate income homebuyers through the
First-Time Homebuyer's Program, and more than 335 ADUs are in the development pipeline. In addition a total of
738 rental units for low and moderate income households have been developed under the Affordable Dwelling Unit
Rental Program in private rental communities throughout the County, with another 303 rental ADU's in the
development pipeline. Also, in FY 2003, an estimated $26 million in funding was available for the County's
Community Development Program. These funds, derived from a variety of sources, provide a wide spectrum of
activities designed to meet the needs of the County's low and moderate income population. Projects range from
public services and home improvement programs to neighborhood drainage and road improvements.
Other services include efforts to increase local employment opportunities by encouraging and retaining
business and industrial development through the County's Economic Development Authority. The Department of
Transportation continually monitors the County's transportation system to maintain a public transportation network
system that meets the needs of County citizens (more fully discussed in the subsection herein entitled
'Transportation'?.
In additionto the~provisioi~
of direct services,~ C~~ty is responsible~forall comprehensiveland use
~8,
CL~no~ni~:
deve!opmerit,
e~viiiorlmehtal
iinpis~eme~---~~:: ':
conservation,
andti~eprt~se~atldp
of ~storiclandmarks.
TheComrjrehensivean
for~.the
CQunty;prov~for
orderlydevelopment~
ti~oughits policie~s
and re~ommendations
thai`helpto guidedecisions
r~gardfhg
fi~ure
.~op~t
within
the~:-The?~~~~e:-Pian
; ~~to,S~~,i
is ~lp~~~lly
wiih~~~t~.
it:l;t~ect~-C~h^liji~ias~I as~nt b~tioric.aadfu~~
;~t~sil~i
_::
zoningapIilications
prodebs~d
in theCduntyarein ac~arice with'thePlan. TheCountyhasreceived'
~i~ationsl
recog~Fition~for
thedeve!qpment of such:a thor~h
arid co-rdinated planning process.
Integrated
withtheCounty'slanduseplanareprograms
to identify,documerit
andprotectsignific~
histdiic;
rtrelhistoiic:~d
i7ivi!
WarreS~~ces:from
inappropil~~ghbo~i~g
dev'e`lop~rit.'
StaffintheDeIiaili~i~t:
of Planning and Zoning (DPZ) act as a liaison with the Architectural Review Board to monitor development within
the thirteen historic overlay districts which were established and are now recognized through the Commonwealth's
Certified Local Government program. In addition, DPZ maintains the County Inventory of Historic Sites of over
300 sites, buildings and structures established through the Fairfax County History Commission. The Cultural
Resource Protection Section of the FCPA identifies and registers county prehistoric and historical archaeological
sites, currently numbering over 2,500, with the Virginia Department of Historic Resources.
Health
and
Welfare
The County provides an extensive array of services which are designed to protect and promote the health
and welfare of Fairfax County citizensthrough a decentralized human services program. The County operates
human service centers in locations convenient to residents to provide financial, medidal, vocational and social
services. Based on individual needs, the centers attempt to define a comprehensive assistance plan that utilizes the
services provided by all County departments.
The County provides medical, dental, maternal and child health services at three other locations in addition
to the service centers and to the medically indigent at three primary health care centers. Preventive and health
promotion services are provided by the County to school-aged children in all County public schools. Mental health,
mental retardation, alcohol and drug abuse and early intervention services are provided to families and individuals
by the Fairfax-Falls Church Community Services Board ("CSB"). The CSB operates six community mental health
service centers which offer individual, group and community services focused on the mental health needs of the
population, various group homes for consumers, and several specialized treatment facilities. Other programs that
the County provides include subsidized day care programs for senior citizens and children of low-income families,
125 school-age child centers (located in the public schools) that serve more than 8,500 children during the school
andmorethan2,500children
duringthesummer,
twospecialneedscentersthatserveemotionally
disturbed
or
physically challenged children, and group homes for youth with serious emotional disturbance.
Residential
treatment services are also offered in the areas of substanceabuse
as well as substance abuse outpatient and
specialized day treatment programs. In addition, vocational and residential programs are provided for citizens with
mentalretardation.
In November 1988 and in November 1990, voters approved $16.8 million and $9.5 million,
respectively, in general obligation bonds for human services facilities. Facilities built with the proceeds of these
bond referenda include a70-bed
therapeutic residence for substance abusers, a 30-bed substance abuse treatment
facility co-located with a 25-bed detoxification center, a specialized 16-bed treatment facility for clients who are
both mentally ill and substance abusers, and an assisted living facility for 36 adults with mentalillness.
The Board
of Supervisors has authorized an additional $32.5 million in general obligation bonds for human services facilities
purposes, subject to a favorable referendum on Nov 2, 2004.
Financial assistance and social services are available to eligible citizens under programs established by the
State and Federal governments, as well as the County, and will be administered by the Department of Family
Services. The Departmentwill continue to implementwelfare reform program activities while emphasizing
prevention and early intervention initiatives. Programs serving senior citizens within the County are jointly funded
by the Federal Older Americans Act, State, County and public/private funds. In EY 1986, the County began to
provide a comprehensive County transportation service, FASTRAN, for qualified elderly, disabled, and low-income
persons. Transportation is provided by bus, van, or cab on a door-to-door basis to County programs, medical care,
and grocery and other personal shopping destinations (more fully discussed in the subsection herein entitled
'"Transportation").
Judicial
Administration
Fairfax County's court systemis oneof the
most~histicated
systems
inVirginia
in'ltsusebfadva~d
case~inana~em~rit
:teC~iniq~~
and re~at~ilit~ti~~prpgra~.~~:[~~llriliz8s
alitoinat~d:s~s~;~
~
~ \-:::: -
doc;ke~~al~d
re~i~brd
ie~it~eval,
kiec~~i~:~onlc~;~i~;ig:a;iid
inil?gin~.in_~ti~k
iaiidrec~a;rdlrtion~:p;~,~cksS,
jurors'ele~ci~i~n;
se~v~ce
of noticesandsubpden~s,
andthep;oce~sing
6f cnminaia~l'tra~ffic
warrantsa~diieiinq~ent
t~t~gx're~vai:
TheCo~-~ und~~~LLits~n I~. ~~
·- -
-
:adultsandjuvenile~dersl ~;4dd~fiohdll~,
iesidkrifi~
~L~f
"'
~Juvenile
andDomesU.i(~:la~s-Disnici
-.r-::i·
Court and the Office of the Sheriff. These efforts inciude~work training programs and counseling service for both
skii;ices
aieprovided
foijii\i~iiie
dff~i~e:Yaria;:~
workreleaseprogramis providedforoffenders
coi~inedintl;eCounty'sAdultDetention
Center.
As part of the 1998 Public Safety bond referendum voters approved the Judicial Center Expansion project
at a cost of $92.5 million including $33 million from anticipated State reimbursement associated with the Adult
Detention Center expansion. The project involves the addition of approximately 312,000 square feet to the existing
Jennings Judicial Center and provides parking to accommodate 2,100 vehicles (a net increase of 900 spaces). Staff
is currentlycompletingthe designdevelopmentand constructionplan phasesof the JudicialCenterportionof the
project, with the summer of 2004 projected for the construction contract award. The parking structure was
completed in January 2003. As part of the 2002 Public Safety Bond Referendum, the voters approved $25 million
for the renovation of the older portions of the Judicial Center, originally built in 1981.
Public Safety
The responsibility for public safety in Fairfax County is shared by a number of agencies. The Police
Department, which is responsible for law enforcement, had an authorized strength of 1,369 sworn police officers and
574 civilian personnel as of July i, 2003. The agency is accredited by the Virginia Law Enforcement Professional
Standards Commission ("VLEPSC"). VLEPSC accreditation signifies the department's compliance with certain
standards which are specific to Virginia law enforcement operations and administration. The commanders of the
eight police district stations located throughout the County have considerable latitude to tailor their operations to
providepoliceservicesin waysmostresponsiveto the needsof theirrespectivecommunities,to includecommunity
policing endeavors. The department operates a variety of specialized units, including a helicopter division which
operates two helicopters to provide support to general police operations, traffic monitoring and emergency medical
evacuation and rescue support. For the past 10 years, the County has maintained one of the lowest rates of serious
crimes amongjurisdictionsin the WashingtonMetropolitanarea and among comparablesuburbanjurisdictions
the country. At the same time, the Police Departmenthas continuallyattained a clearancerate for
violent crimes such as murder, rape and robbery far above the national averages for such offenses. Citizen
participationin crime preventionis emphasized,with nearly 700 NeighborhoodWatch groups involving
approximately 20,000 volunteers throughout the County.
DuringFY 2002,the PoliceDepartmentcreateda CriminalIntelligenceUnit to providean effective
responseto organized
criminalactivityincludingterrorist-related,
gangandbiascrimes.TheUnitis responsible
for
data entry,reviewand classification
of information,analysis,link development,
prioritization,
dissemination,
follow-up investigations,interviews, maintaining contacts with outside intelligence groups and conducting
surveillanceoperations. An AuxiliaryPolice Unit, comprisedof up to 100 trained, unpaid citizen volunteers,
supplements
the Polce Department's
paid personnelby performinga varietyof operationaland administrative
functions. The Volunteers in Police Service OIIPS) Program has also been established to provide administrative
augmentation
to the PoliceDepartment
by utilizingthe skillsof non-salaried,
non-uniformed
volunteers.The
department
utilizesmanyapplications
of the latesttechnology
available,includingservingas leadagencyfor the
NorthernVirginiaRegionalIdentificationSystem, a computerizedfingerprintcomparisonsystem which greatly
enhancesand expeditesthe abilitiesof the 10 participatingagenciesto identifylatent fingerprintsrecoveredfrom
crime scenes with those of I~nownoffenders in the database. The County's law enforcement training needs are met
by its ownCriminalJusticeAcademywhichtrainsnewofficersandprovidesin-servicetrainingto membersof the
participating
agencies.Thisfacilityincludesa drivertrainingtrackandfirearmstrainingrange. An eighthpolice
districtstationlocatedin the westernpart of the Countyopenedon May 3, 2003.Newfacilitiesunderdesigninclude
replacement
PublicSafetyCommunications
andEmergency
Operations
Centers,and a forensicsfacility. For the
past ten yearS, Fairfax~Cq~~ has maintained one of thelowest per capita cost for police services of all the local
j;isais~fioiisl~iri
't~k~ashi$~i~ ~d;l~
~9.
Fireandrescue
services
ar~ptovided
byapproximately
1,20~
paidfirkfighters,
100paidcivilian
support
p~r~onirl
aridappro~~ 40Ql~~i~~~ia~j
volli~~s;;~
·~~five fire~B`rci~S~:statidns'
~eifn-~~Xope~i~i~t~c!
i
;f~~-;1~~ iesponsetl;ne`forfire.a`rid
Put~u~~
St~ifion
:lo~3j~i~~i~'have
;beeni`ae~ed tolachieirei~:
basic.hfesuppbrtanda six-minute
respon~sk':time
foradvanced
life supploa.The'depa~nt op;ei~tes
varibus
;spec~ units,i~ud?~p~~~~ne
c~~,;:l hazardous
materials
responseunit,
a technical
rescue
~se m~eis ~c~i-iii~e~in siiriftwater ;i~sc·i~e.
ape~tidns:t~~ahaiS~ii~i~~eun'it~ a uf8ter~e~sciieI·~ain
The departmentalso supportsr'egi4,nal,
nationaland internationalernergencyresponseoperationsthrough
liaintaining-a~ia
r~piia;rfirfg~l~ie
~b~ Sear~h
and:~i~eseue~Teain'
('LUS~R").:
US&ROerareS:
uriderthe:auSpideS
~of
the Department
of HomelandSecurityfor domesticresponsesandis sponsoredby the UniteaStatesAgencyfor
InternationalDevelopment/Office
of Foreign Disaster Assistancefor internationaldeployments. In addition to
emergencyresponse,the departmentprovidesvariousnon-emergencyservices. Fire PreventionDivisionpersonnel
test fire protectionsystemsin publicbuildings,inspectbusinessesfor fire code violationsand determinethe cause
andoriginof all fires,falsealarmsandbombings.Thedepartment
receivesdirecttechnicalsupportin the areasof
logistics,,procurement,
apparatus,telecommunications
and informationtechnologyfrom the SupportServices
Division. The Fiscal ServicesDivisionis responsiblefor managementof the department'sfinancesand budget.
Personnelin the Safetyand PersonnelServicesDivisionprovidehealth and safety servicesto all Countyuniform
publicsafetypersonnel,fire and rescuevolunteersand applicants,in orderto maintaina safeand healthywork
environment. In addition,the Safety and PersonnelServices Divisionis responsiblefor recruitingand testing
firefighterapplicantsand all personneland payrollfunctions. The HazardousMaterialsServicesSection
invi~stigates
hazardousmaterialsreleases,enforceslocalandstatehazardousmaterialslaws,providesoversightfor
iong-termcleanup sites and supportsother County agenciesand committees. The Fire and Rescue Department
providesmorethan300,000hoursoffirefighterandemergency
medicaltrainingto careerandvolunteerfirefighters
throughoutthe year usingindoorand outdoorfacilities. Communityfrre safetyand injurypreventionprogramsare a
majorfocusof thedepartment.Education
programsaredeliveredto audiencesrangingfrompre-school
childrento
senior
adults.
The Countyalso operatesa ComputerAided DispatchSystem,which providesa computerlink between
call takers and dispatcherswithin the County's Public Safety CommunicationsCenter (PSCC). Through an
additionalcomputerlink,information
is transmitted
fromdispatchers
to mobiledataterminalswithintheCounty's
police,fire and ambulancevehicles.The Countyalsoutilizesautomatedsystemsto processcourtorderedchild
supportand restitutionpaymentsand to supportjuvenilecaseprocessinginformation
functions.In addition,the
County also has an automated dog licensing and inoculation monitoring system.
November3, 1998,the Countyvotersapprovedbondreferendafor public safetyprojectsthat included
$7.42millionfor expansionof two existingPoliceStations,reconstructionof a Fire Station,constructionof one new
Police
Station
and one new Fire
Station.
On November5, 2002 the voters authorizedan additional$60 million in general obligationbonds for
PublicSafetypurposes.Thisreferendum
includedapproximately
$29millionfora replacement
PSCC/Emergency
OperationsCenter, $25 million for renovationsto the JenningsJudicial Center and $6 million for priority Fire
Stationrenovationsand improvementsto includeconstructingan appropriatelylocatedhazardousmaterialsresponse
team facility.
Water Supply Service
Water serviceis providedto the residentsof FairfaxCountyeither by FairfaxWater, the City of Fairfax,
the City of Falls Church,the Town of Herndon,the Town of Vienna or individualwells. FairfaxWater, which
operatesthe largestwatersystemin the Commonwealthof Virginia,was establishedby the Boardof Supervisorsin
1957, under the VirginiaWater and Waste AuthoritiesAct (Chapter51, Title 15.2, Code of Virginia, 1950, as
amended),for the purposeof developinga comprehensive,countywidewatersupplysystemthroughthe acquisition
of existingsystemsand the constructionof new facilities. It is an independentbodyadministeredby a ten-member
board appointedby the Fairfax CountyBoard of Supervisors.Fairfax Water finances its capital improvements
throughtheissuanceof revenuebondswhicharenotbackedbythe~
fullfaithandcreditof theCountybutprincipally
byrevenu'es
deriveclfrom
ch~ges;l~services
i~endered.
Fairfax
Water'sbasic
ret~iil
waterchargeis:$1;40per~,~.:;
gallons,
p;ius
a ~~
service
chaige
~$5.56;
~r rhitstsinglefamil;;homes
andtow~~u~es):;
Topay~
f~ Irea~fiii~li~
and pumpmgc~ipacity
whidRis'used~orilyduringperiodspf highderinand,
Fairfa'x~i~rat~
also~levies
a';p~kuse
; c~
ofanadditional
$2.60per1,000gallons
oncustomers
whoexceedtheirwinter
~arteSEoqs~mptiqn~
6,000
Sailo~is
or10;~~; Xlhiciie~:is
~~
dlosinLi
ortra~iS~ing an.$cdi~u~t:
Fairfax
Water
utiliie's
t~O
~~s,
~
~~6-~;i~ee·~;~`or:·ini~i~i
coi;~tibri
~ithe$yst~iriaii~
for~~:
cof ~.sUpplywaterpccoquai~
Rivei
and
Pot6nhac
associ'~t~ea~t'trarismissioi
S~tdiagt~~
~ dlsti~,uti~,n
f~lciiit~es'ani~
cuiri~:r;ily
prdvides
seiYrce
td~id~li~::'
:.
227,000meteredaccounts(representingabout 293,000residential,
~comme~cial,
industrial,municipaland
instihitiodal
uriit~ih Pa~x- %oui~ty
wilh·:~n~
aiier~ige
i~g~ly
consumptioi~'of
abouti5million'Ig~t'or~l'~l~er
.a~
("mgd").In addition,FairfaxWatersuppliesabout50 mgdto othersuppliersfor resaleprincipally
in the Cityof
Alexandria,LoudounCountyandPrinceWilliamCounty. The averagepopulationservedby FairfaxWaterin 2003
is estimatedto have been 1,200,000persons. The combinedmaximumdaily capacityof the supplyand treatment
facilities is 262 mgd, which is sufficient to meet current demand.
Under an agreementwith the Board of Supervisors,Fairfax Water annuallysubmits a ten-yearcapital
improvement
programwhichis reviewedand approvedby the Board as part of the County'stotal capital
improvement
program.FairfaxWater's2004 l0-yearCapitalImprovement
Programincludesprojectstotaling
$552,582,000.
ECONOMIC
FACTORS
Economic Development
Economicdevelopmentactivitiesof the County are carried out through the Fairfax County Economic
DevelopmentAuthority(the "EDA")whosecommissionersare appointedby the Board of Supervisors.The EDA
promotesFairfaxCountyas a premierlocationfor businessstart-up,relocationand expansionand capital
investment. It works with new and existingbusinessesto help identifytheir facilityand site needs and assist in
resolvingCounty-relatedissues. Pursuantto its enablinglegislation;the EDA encouragesinvestmentin the County
with tax-exempt industrial revenue bond financing.
C~erl
total inventory of office space in the County was estimated at 101.5 million square feet at year end
2003. Over 10.5 million square feet of office space was leased in Fairfax County as of year end 2003.
IndustriaVhybrid space in the county was estimated at 36.7 million square feet. The direct vacancy rates for the
office market and industriayhybrid markets were 11.2 percent and 7.9 percent, respectively, as of year end 2003.
Fairfax County is the fifteenth largest office market in the United States, according to Costar Group.
The base of technology-oriented companies, particularly in computer software development, computer
systems integration, telecommunications and Internet-related services, has served as a strong magnet for the
expansion and attraction of business and professional services. Diversified business and financial services, as well
as government contractors, have added to the demand for prime office space in a number of key employment centers
throughout the County. Major corporations such as American Management Systems, BearingPoint, Boot Alien
Hamilton, Capital One, Federal Home Loan Mortgage Corporation (Freddie Mac), Gannett (USA Today), General
Dynamics, Mitre, Mantech International and the SLM Corporation (Sallie Mae) have located their corporate
headquarters in Fairfax County.
As of year end 2003, there were 80 hotels each with 75 or more rooms completed or under construction in
the County, totaling more than 14,640 hotel rooms. Hotel development parallels commercial construction in terms
of diversity of concept and design with a variety of product and service mixes tall-suites, business meeting facilities
and leisure facilities) in the marketplace. National chains such as AmeriSuites, Best Western, Comfort Inn,
Doubletree, Embassy Suites, Hampton Inn, Hilton, Holiday Inn, Hyatt, Manriott, Motel 6, Ritz-Carlton and Sheraton ·
currently offer a wide range of hotel facilities in the County.
: :
:..:.1...:
:
:: '-::
:~ l~i-mile~les
~iI~~li~
~oa~prov~:access
-D.C,
fhrd~ilgh
Tysons
~q~~8:~~f~i-' :I: ..;
Hemdon
(the~tBusiness~ntersinth~County)
toWashin~Ij~u~)International
~C'Dul~~. ~ ~e
County'swe~t~ni
edge. Pursiiantto;legislat'ion
enacteciby:the ~irg~iii~~C~fi~i~at
Assemblyatit8 1995sesifd·n',
the
c~~i~
giiild~4~i.2;million
in
bonds
for.th~
~bri~~i~ibn
b;f
hira;.~d~.tiona!:l~s1Xfor
~:t~otat
o~
eight
li~~
~ :.:;;L
- ·;, ..
:F"-
fortfie:ij~n~
~il~f
~~Esie~
495in~a~a~`iii~.~
Louddun~o;u~t~s~i
t~i~:cibi~~r;~i~iy,'la
:~-~e e~Si~i::.:::'; :i'':·:~:'c
~lly:I~slaa)
in-~.~
Greenway,
c~gt~the
airport
~ ~g,west ofF~ir~:o~~i?
~Loudoun
::: Co~.
:~ '·:' · ·
DullesAi~porthas
experienced
a significant
incle~ein..gervice
levelsariddemandin recentyears,serving
asa catalvst-iio~~~ act-ivitic~
deIjeI~deritdli
imni~.~~~i~
a~·cpss'to.~iir
~ 'Dneofthefii~relt-growjp~j
~~ji~i~t~
of the worlb~d
50largestairports,DuilesAirportserv'es~nea;ly
47,000passengers
dailywithnonstopflightsto 71
U.S. cities and direct service to 37 foreign markets. On the east coast, the airport is the fifth largest international
gateway. More than seventeen million passengers, including more than 4 million international travelers, flew in and
out of Dulles Airport in 2002. A multi-billion dollar construction program began in 2000, which is adding two
parking garages, a fourth runway, a new concourse, pedestrian walkways and an airport train system.
In December 2003, the Smithsonian Institute opened the new National Air and Space Museum (NASM)
Dulles Center for the display and collection of rare and historic aviation and space artifacts. The Steven F. UdvarHazy Center, a 761,000 square foot building located on 177 acres at Dulles Airport, will be home to more than 200
aircraft and 135 spacecraft including the space shuttle Enterprise and the B-29 Superfortress "Enola Gay". The
museum
welcomed
its millionth
visitor
in June
2004.
The Board of Supervisors and the County have supported the revitalization and redevelopment of the
County's more mature business areas.
Residential and commercial enhancements to Annandale, Bailey
Crossroads/Seven Corners, the Lake Anne section of Reston, the Springfield and McLean central business districts,
Merrifield and the Richmond Highway corridor in the southeastern portion of the County are under way, and a
number of capital improvement projects in process or already completed have improved the appearance and quality
of life of these
communities.
Employment
Approximately 29,500 payroll businesses, including corporate and regional headquarters, technology firms,
sales and marketing offices, and business services are located in Fairfax County.
Local businesses create
employment in such diversified areas as computer software development and systems integration, government
contracting,Internet-relatedservices,wholesaleand retailtrade,and financialservices. The followingtablepresents
data on the numberof payrollestablishmentsand employmentby majorindustryclassificationin FairfaxCountyas
of fourth quaaer 2003.
Businesses and Employment
by Industry
Fairfax County, Virginia'
Number
Industrial
Classifica~i~
of
Average
Establishments
Emnlovment
Agriculture
Mining
Manufacturing
Utilities
Payroll
for Ouarter
14
118
2
477
92
11,794
19
1,541
Wholesale Trade
1,518
15,831
Construction
2,495
31,510
Transportation
367
Retail Trade
Services2
:: :
:: : :
~~n;i~'
7,057
2,774
57,200
17,950
281,442
::
: 23,976
1,i42
9~5 ;
~·-I:::.
1
Total
29.536
9,749
34,9~4
.681907
0
544.1ZL
s·u~E.:~irgin~:E~;np!~~~s~,iotl~Cj,~vere~mDlovmP·nt
~ W~g~s
in~i~ia,`airfax
Co~ntv.
~~ qu~
2003.
1
Excludesselfemployed
business owners.
2
TheServicescategoryincludesprofessional
andtechnical
services,healthcare,management
services,accommodation
andfoodservices,
and other activities, as well as membership organizations and trade associations.
24
~I d
following is a list of the 25 largest private, base sector (non-retail) employers in Fairfax County as of
January 1, 2004.
County Employment
Company Name
Inova Health System
Northrop Grumman
Type of Business
Health Services
Professional, Scientific and
Technical
Boot Alien Hamilton, Inc.
Federal Home Loan Mortgage Corporation
(Freddie
6,000-7,000
Services
Professional, Scientific and
Technical
9,000-10,000
6,000-7,000
Services
Professional, Scientific and
Technical
Science Applications International Corp. (SAIC)
Range"
6,000-7,000
Services
Finance and Insurance
3,000-4,000
Professional, Scientific and
3,000-4,000
Mac)
Computer Sciences Corporation (CSC)
Technical
Navy Federal Credit Union
Lockheed Martin Corporation
Finance and Insurance
Professional, Scientific and
Technical
General Dynamics
Services
Services
Professional, Scientific and
Technical
2,000-3,000
Services
Kme~can
Managemei~t
Syste~;Inc,;(AMS) :.Inf6rmatibljSofhvare
R~i~:t;e~-~5~:~nI~.~·ly
·-
3,000-4,000
2,000-3,000
Pr~ssibnai;'scientific
in;d
??ooo-?~
a,ooo-~,~o~ijo;
Fechnic~i: ~cs
~t·ICg~nicationsilnc.
Informationl
:El;x~r~;lbbii~`~o;po~tio'I~~
:
Wholk~~~ik-Tra;(ie~Pe~ei;in
.
2,000-3,~00
i
: - a:"0-3~0000
r
Products)
Professi~al;
Scienti~2e
~
Ve~zon
Techni~l Services~'
Information/
2,000-3.0b0
: ; $-~~;:
2,000-3;000
Telei~ominunications
Mitre Corporation
Professional, Scientific and
Technical
Accenture
Professional, Scientific and
Technical
Electronic Data Systems Corporation (EDS)
Gannett Company
Branch Banking and Trust ~B&T)
Sprint
2,000-3,000
Services
2,000-3,000
Services
Information/
Data Processing
Informationl
Newspaper Publishing
Finance and Insurance
Information/
2,000-3,000
2,000-3,000
1,000-2,000
1,000-2,000
Telecommunications
Titan
Professional, S6ientific and
Technical
ATBiT
1,000-2,000
Services
Information/
1,000-2,000
Telecommunications
BearingPoint
Professional, Scientific and
Technical
ITf Industries
Professional, Scientific and
Technical
1,000-2,000
Services
1,000-2,000
Services
Source: Fairfax County Economic Development Authority and the Virginia Employment Commission.
*Note: Employment estimates for separate facilities of the same firm have been combined. Employment ranges are given to
ensure confidentiality and are based on quarterly employer reports to the Virginia Employment Commission. Type of Business is
based on Zdigit North American Industry Classification System (NAICS) codes.
25
in the Countyhas historicallybeen,and continuesto be, well belownationalaverages.
The
2003average
unemployment
ratewas2.5%intheCounty.Stateandnational
2003unemployment
rateswere4.1%
and 6.0%, respectively. The followingtable shows the averageannual unemploymentrate in FairfaxCountyas
comparedwith the stateand nationalaveragein the past decade:
I-I ~
Average Annual Unemployment Rates
Calendar
Year
Fairfax
County
1994
1995
3.1%
2.8
State of
Virginia
United
States
4.9%
4.5
6.1%
5.6
1996
2.8
4.4
5.4
1997
2.3
4.0
4.9
1998
1.6
4.9
4.5
1999
1.6
2.8
4.2
2000
1.2
2.2
4.0
2001
2002
2.3
3.0
3.5
4.3
4.8
6.2
2003
2.5
4.1
6.0
Soltrce: Virginia Employment Commission.
the:n;mbe~
of
of March
According to'the VirginiaErriplbyr~eritConi~mi~Sion,
jobs in the C~junty'av~ed524~232~as
2003.
of jobs does not;idclude ~klf:-empldy~d
The number
6riionpersons, agricultural empioymen;'
classified/other
employment.
The~llowinE:;i~ble
~Sentstofa!non~igricultural
payrollemployment
inr~cent
years:
Nonagricultural Employment
Nonagricultural
Employmentin
AsofMarch Fairfax
County
%Change
Nonagricultural
Employmentin
AsofMarch FairfaxCounty %Change
1994
1995
392,048
410,146
4.8
4.6
1999
2000
487,113
518,821
4.8
1996
420,929
2.6
2001
541,132
4.5
1997
1998
443,734
464,945
5.4
4.8
2002
2003
524,298
524,232
6.5
(3.1)
0.0
Source: Virginia Employment Commission.
Population
Fairfax County's population in 2004
is approximately
1,027,500.In 1980,FairfaxCountywasthe third
mostpopulous
jurisdiction
in theWashington,
D.C.primary
metropolitan
statistical
area,asdefined
bytheU.S.
Bureau of the Census.
By1990,Fairfax
County,
with818,584
residents,
hadbecome
themostpopulous
jurisdiction
in the Washington, D.C. area, adding an averageof 22,000personsperyearin the 19809.Population
growthduring
the 1990s and to date has slowed
somewhatin FairfaxCounty;on average,about15,000personsper yearwere
added to the population during this period.
26
1-5;-
i 1-
~_1~__~S~L~__________--
Q
County Population
Calendar Year
Population
1940
40,929
1950
98,557
1960
1970
248,897
454,275
1980
596,901
1990
2000
818,584
969,749
2001
984,366
2002
2003
2004
1,004,435
1.012,100
1,027,500
Source:
U.S.Bureau
oftheCensus
(1940-1990,
2000)andtheFairfax
County
Department
ofSystems
Management
forHuman
Services.
The followingtablereflectsthe populationage distributionof Countyresidents.
Household Population Age Distribution, 2002
Fairfax County..
2002
~g~E~
·
hium~er Percent(~oi
Un~er20years..!....,;.;,;..;;..;..,.;..,.i...;.i,.:..;.;......;.;;......;
276,856.
27.9
·35-54
186,769
342,818
18.8
34.6
102,935
81.452
990,830
10.4
20-34
·.··...........t............,.............i.................i...
55-64
65andOver
Total
8.2
100
Source:
U.S.Bureau
oftheCensus,
2002American
Community
Survey.
Household
population
excludes
persons
living
ingroup
quarters facilities such as nursing homes, barracks, dormitories and correctional facilities.
27
on results of the 1990 Census, Fairfax County had the highest annual median household income
($59,284) of all the 3,141 counties in the United States. As of 2000, nearly 16 percent of County households had
annual family incomes of $150,000 or more. In 2002, the Bureau of the Census estimated median household income
in Fairfax County at $85,310. The following table illustrates the 2002 household and family income distribution in
the County.
Annual Household and Family Income Distribution
Fairfax
County,
Income Level
Household
Under $25,000
$25,000-49,999
$50,000-74,999
Family
7.6%
16.2
18.1
5.1%
14.3
16.1
$75,000-99,999
16.6
16.8
$100,000-149,999
$150,000 or more
23.5
18.0
24.9
22.8
$85,310
$95,612
Median
Note:
(by Percentage)
2002
Income
In 2002, the US Bureau of the Census estimated that there were 363,100 households and 258,059 families in Fairfax
County. "Families" aredefined as those households containing two or more perso?s related by blood, marriageor
adoption.
Source: U.S.Bureauoftl;eCensus,2b02
American
Community
Survey.
The followingtable shows that total taxable retail sales,in theounty
reflecting
increased
i~!evels
anatheCount·j's
inc~
rose in the Deriod 1~~4-2003,
i~brtanceas~ ~n~
center.Declining:ta~xa~ie
retailsalesin 2001'and2002refle~c'tkd
the ge~l
coi~;-~:~:
ec~nomicdowntu;n.:
Per dapjta'T~ixsble Sales
Taxable
Sales tin Billions)
Population
1994
1995
1996
1997
1998
7.96
8.31
8.50
9.04
9.65
863,134
879,401
899,650
912,126
931,452
1999
2000
2001
2002
2003
10;62
11.32
11.01
11.13
11.68
946,371
969,749
984,366
1,004,435
1,012,100
Calendar
Sources:
Year
Per Cap;ita
Taliable Sales
$ 9,221
9,453
9,448
9,910
10,357
Virginia Department of Taxation, Taxable Sales Based on Retail Sales Tax Revenues.
Fairfax County Department of Systems Management for Human Senices, and U.S. Bureau of the Census.
28
11,219
11,676
11,185
11,081
11,540
Activity
The following table illustrates trends in residential and commercial constructionactivity in the County:
ConstructionActivityBuildingPermits'
Estimated
Housing
Industrial
ResidentialProperties
Fiscal
and
Estimated
Year
Units
CommercialProperties
Started2
Estimated
Number
Value (000's)
Number
Value (000's)
Number
1994 ..............................
1995 ..............................
1996 ..............................
1997 ..............................
1998 ..............................
23,254
23,577
23,086
21,059
21,700
$781,283
706,680
737,971
676,400
702,179
3,803
4,272
. 3,961
4,091
4,172
$288,274
236,737
230,300
247,646
699,012
6,528
4,482
4,361
3,942
2,263
1999 ..............................
2000 ..............................
2001 ..............................
2002 ..............................
23,446
30,178
23,154
20,863
794,121
995,247
806, 139
771,174
4,345
4,735
4,455
3,624
572,489
719,885
671,805
459,000
4,687
4,067
3,802
3,735
2003 .............t.......:........
19,095
820,046
3,561
306,909:
~2,577
: ·
Sources:' Fairfax,CountyDepartmentof PublicWorksand EnvironmentalServices.
FairfaxCountyr)epart~nent
of SystemsManagementforHuman Services.
The'following
is a shortlistof~gjorneworexpanbedofficeprojectswithint~ie~dounty
in ib03:
New or Expanded
Commercial
Projlects
Projected
Name oPCompany ~
Dynamics Research Corporation
Mitre Corporation
Northrop Grumman
Proxtronics
NatureofQpera~~
Information
Information
Information
Information
Technology
Technology
Technology
Technology
New/Additional
Emp!oynl~~
150
240
348
175
UNISYS ·
Information Technology
350
Veridian
Information Technology
450
Telecommunications
450
Telecommunications
180
Telecommunications
150
AT&T Government
Covad
Communications
Equant
Online
Source:
Resources
Solutions
Intemet
Services
Fairfax County Economic Development Authority.
29
55
Single-family detached h'ousing units (excluding mobile homes) continue to account for a majority of the
housing units within Fairfax County, representing 50.6% of the total in 2000. Townhauses accounted for 24.3%;
garden units, high- and mid-rise units, multiplex units and mobile homes together made up the remaining 25.1%. As
of January 2000, the median market value of all owned housing units, including condominiums, in Fairfax County
was estimated by the Department of Systems Management for Human Services to be $226,825, an increaseof
18.1%
over
1999.
Housing Units by Type of Structure
1980
No.
Single-Family:
1990
%
No.
2000
2002
%
No.
%
No.
%
125,580
59.3
163,029
53.9
181,591
50.6
184,156
49.7
Attached
30,833
14.6
67,306
22.3
87, 171
24.3
90,465
24.4
Multi-Family
55,333
26.1
72,129
23.8
90, 198
25.1
95,930
25.9
211.746
1~O~
302.464
358.960
14~0
370.551
UULQ
Detached
Total
~LQ
Soutceiir.S.
Bur~au.of
the~C191S~S;
IJ.S.Census
ofHousing.
Sir;gle-family
detached
indludes
allsingle-faniily
homes
ahd
mob·ilehom~:s,-'sitlglel~amily
~tli~chea
iddudeg
duIilexeS,_
to~u;ni~du~es;gnd
~u!fip~exlinits.
Multi-~y in~u~b~,:mid-rise
and elevator apartments.
Collegesahd Uni~ersities
r;:Seven
:ins;i~uti-~ns·oi~her
:~ucation
ate~'lo~ inFaii-fax
Cpunty:
Averett
~v~i~y,:Geo~e~l~ason.
University,
theKeller
Graduate
School
ofManagement~~
P;iat~~nal-Louls
University,
Northern
Virginia
Community
11-1!
Unii;ersityghdlt~ie~
~fnni~sity~jf;:~irgir;i8-~helattei
C~o!lege
~NV~CC);
thitVirginia
Pdlyte~emst~tl;t-----------------~-~a~':slate
two located in the Northern Virginia Graduate Center. For 2001-02 Geoage Mason had an enrollment of more than
23,400 students in more than 100 disciplines, including doctoral program. The Northern Virginia Community
College has more than 60,000 students in 30 credit-eauningprograms and 300,000 students in non-credit courses and
public s~___________________________________________________________________________________________________ice
activities in five campuses in Northern Virginia. American University, George Washington
University, Catholic University and Virginia Commonwealth University also operate programs in the County's
secondary schools and on military installations within the County.
Cultural
Amenities
Wolf Trap Farm Park for the Performing Arts, a cultural facility internationally renowned for the number
and quality of its ballet, symphony, concert, and opera offerings, and the only national park for the performing arts
in the U.S., is located in the northern part of Fairfax County. The County also assists in supporting the Fairfax
Sy~hony, an internationally recognized 94-member orchestra that provides a variety of musical programs and
outreach services to County residents. Other well-known attractions in the County include Mount Vernon, the home
of George Washington; Woodlawn Plantation, George Washington's wedding gift to his nephew; and Gunston Hall,
home of George Mason, author of the U.S. Bill of Rights and the first Constitution of Virginia.
30
ADMINISTRATION
Statement
of Bonded
Indebtedness
Pursuantto the Constitutionof Virginiaand the Act, a county in Virginiais authorizedto issue general
obligation
bondssecuredby a pledgeof its fullfaithandcredit.Forthepayment
of suchbonds,theBoardof
Supervisors
of theCountyis required
to levy,if necessary,
anannualadvalorem
taxonallproperty
in theCounty
subject to local taxation.
TheCountyhadoutstanding
thefollowing
amountsof generalobligation
bondsas ofJune30,2004:
Purpose
Total General
Obligation
School ................................................·-···························-·······-····-··-··························
Bonds
$ 994,890,208
GeneralGovernment........................................··········-·······i~~~~~~~~~~~~~~~~~~~....................
623.884.792
TotalGeneralObligation
BondedIndebtedness
.................................................·····
~
The Countydoes not rely uponshort-termborrowingsto fund operatingrequirements.
Authorized
but
Unissued
Bonds
The·follo~ng;
c~gie~tshy purpoSe
Fairfax
County's
gehe~il
obligati~iluthorized
butu~sgued:~~
indebt~dness
a$ ~f Jui~t: 30, 2~X)4:
Amount
school
Impr~veme~iita..
~~~~~~~~~~~~i'i""';'·""""""""'"·""'
Authorizeil.PurDds~.~
::
Authorized
but`Un~8i~;:::~i::
$SM,1~S~ijo~
Transportation
Improvements
andFacilities.......................................·.························· 35,640,000
ParksandPark~d~~,....:.r,~i.l-~-,··:·j·-~;..·.-·r··.···········;············-·························-····
13,920,000
:......;.1.;............;........;.....;...;....··
Col3imer~ial~and
li~dc~Ge~-·lq~iii'eril
P~eaImprovemknts
13,130~00
Human Services Facilities ..........................;..................···························-········-···········
1,185,000
AdultDetentionFajdiilities.-:
5,750,000
........i;··--··.······;;·········-··"'-"""""""""'""""""""""""""""'
PublicSafetyFacilities............................................·····················I································loo.45~00Q
Total Authorized but Unissued Bonds ....................................·-·················-················-
Limits
~2~4~2~
on Indebtedness
-Thereis no legallimiton theamountof generalobligationbondedindebtedness
whichFairfaxCountycan
at anytimeincurorhaveoutstanding.
However,
allsuchindebtedness
mustbeapproved
byvoterreferendum
prior
to issuance.Since1975,the Boardof Supervisors
hasestablished
as a financialguidelinea self-imposed
limiton
theaverageannualamountof bondsales.In April2002,theBoardof Supervisors
increasedthebondsaletargetto
$1.0 billionover a 5-yearperiodor an averageof $200millionannually,with the flexibilityto expandto a
maximumof $225millionbasedon marketconditionsand/orpriorityneedsin any givenyear. The actualamountof
bondsaleswill be determinedby constructionfunding~equirementsand municipalbond marketconditions.
TheBoardof Supervisors
alsohasimposedlimitswhichprovidethatthe County'slongtermdebtshould
not exceed3% of the total marketvalueof taxablereal and personalpropertyin the County. The limitsalso provide
that annual debt service should not exceed 10% of annual General Fund disbursements. These limits may be
changedbytheBoardof Supervisors,
andtheyarenotbindingonfutureBoardsof Supervisors
of theCounty.
Other Tax Supported
Debt Obligations
TheBoardof Supervisors
of the Countydirectlyor indirectlyappointsall or a portionof the governing
bodyof severallegallyindependent
localandregionalauthorities
thatprovideservicesto the Countyand its
constituents. Such authoritiesincludethose that issue revenuebonds that are not general obligationbonds of the
andissuedebtsupported
directlyor contingently
by appropriations
of taxrevenuesby theCounty.Thefull
faith and credit of the County is not pledged to secure such bonds.
In March1994,the FairfaxCountyEconomicDevelopmentAuthority(the "EDA")issued$116,965,000of
lease revenuebondsto financethe acquisitionfor the Countyof two officebuildingsoccupiedby Countyagencies
anddepartments.
TheCountyis absolutely
andunconditionally
obligatedby thetermsof a leaseagreement
withthe
EDAto payamountsequalto debtserviceontheEDA'sbonds.TheCounty'sobligation
to makesuchpaymentsis
subjectto the annualappropriation
by the Boardof Supervisorsof sufficientfundsfor such purpose. The
coincidentaltermsof the bondsand the lease agreementextendto November15, 2018. In October2003,the EDA
issued$85,650,000of lease revenuerefundingbonds,to refund$88,405,000of the 1994leaserevenuebonds. The
County's obligations remain the same for the refunding bonds.
Beginningin 1996,the FairfaxCountyRedevelopment
and HousingAuthority('~RHA") has issued
$26,290,000of leaserevenuebondsin four seriesto financethe construction/renovation
of four communitycenter
buildings,
oneadultdayhealthcarecenterandoneHeadStartfacility.TheCountyis obligated
bythetermsof lease
agreements
withtheFCRHAto payamountsequalto debtserviceon theFCRHA'sbonds.TheCounty'sobligation
to makesuchpayments
is subjectto theannualappropriation
bytheBoardof Supervisors
of fundsforsuchpurpose.
The coincidentalterms of the variousbonds and the lease agreementsextend to May i, 2029. On November18,
2002the Boardof Supervisors
approveda plan of financefor the renovationand expansionof the JamesLee
Community
Center.On August26, 2004FCRHAissued$10,870,000
millionof its leaserevenuebondspayable
froma leaseobligation
withtheCountyundertermssimilarto previously
mentioned
undertakings
forsuchpurpose.
-Injuly20'0P,theFair~gx
doui;ty'Boaril
of Supervisors
eiifer~dinto-~~aSterDevelopment
Agreement
with
a private
detieluy~i
ti,finarice
andconstruct
a 135,000
squarefo~t_go~nie?t
center
inthesoutheastern
region
;of
the ounty.In P;jovember
'L0~00,~$i9,000;000
ofdertificatesof Participation
("Certificates"
or '%OPs")wereissued,
secu~by~~:~pli~
netleaseont~ie:prope~ty
b;etweeh
ti~eCopiitJrand~ ~eyelopef-The Cquntyis sbligat~dpy~
::'i-':';i tile certificates. The_Cou~itj~
a'C~ted
~l~~t.egu81 io:t~t~e
~ei~;
set~~i~_or!
terr~~.df
the leke.;~nt
~ ~P:ay
the governme~t~ce~t~r
as substantiallyc~letein ~ebruaj;200i. 'The;~ountylsobligation to make such I?ayments
is subjecttoannualapprqpriati~PI ~~ Boardof Supervisofs
of fundsfor suchpurpose Thecoincidental
termsof
th~le~aritit~ ~f;catel' ejltknd~ 14Ij~il
2032.
; In j,i~ 2003,:theEDA iSSued$70;830,000:
of revenuebonds iLaurelHill PqblicFacilitiesProjecf);backed
bya contract
withtheCounty.Approximately
$55,300,00dof
thebondsareallocable
to thefinancing
of a new
publichighschoolin thesouthernpartof theCountyand$15,530,000
of thebondsareallocableto thefinancingof
a new 18-holepublicgolfcoursein the southernpart of the County.TheCountyis obligatedby the termsof a
contractwiththeEDAto payamountsequalto debtserviceon theEDA'sbonds.TheCounty'sobligation
to make
suchpaymentsis subjectto the annualappropriation
by the Boardof Supervisors
of sufficientfundsfor such
purpose. The coincidentaltermsof the bondsand the contractextendto June 1, 2033.
On October29, 2003, the EDA issued $33,375,000transportationcontractrevenuebonds to provide$30
millionto the CTB for constructionof additionalinterchangeson Route28 in the Route28 HighwayTransportation
District,whichis partlyin FairfaxCountyandpartlyin LoudounCounty.TheEDAon August26, 2004,issued
$57,410,000
transportation
contractrevenuebondsto providean additional$60 millionfor construction
of the
interchanges.
Al!of theEDAbondswillbe payable,ona paritywithapproximately
$121millionCTBbonds,from
revenuesderivedfrom a surchargeof $0.20/$100assessedfair marketvalue on the generalreal estatepropertytax
leviedon commercialand industrialpropertieswithinthe District. In the eventsuchrevenuesallocatedto the EDA
bondsare notsufficientto paydebtserviceanda fundeddebtservicereserveis exhausted,
eachof FairfaxCounty
and LoudounCountyis, in effect,obligated,subjectto annualappropriationby its boardof supervisors,to makeup
one-halfof any deficienciesin a seconddebt servicereservethat securesthe bonds.
Lease Commitments
and Contractual
Obligations
The County leases certain real estate, equipment and sewer facilities under various long-termlease
agreements.In addition,pursuantto contractswithArlingtonCounty,the AlexandriaSanitationAuthority,the
Districtof Columbiaand the UpperOccoquanSewageAuthority,the Countyis obligatedto sharethe capitalcosts
associated debt service of certain facilities. Further information concerning these obligations is included in
Notes I and J to the Basic Financial Statements shown in Appendix IV.
In February and March 1988, the EDA issued $237,180,000 of Series A revenue bonds and $14,900,000 of
Series B revenue bonds, respectively, to finance, on behalf of the Fairfax County Solid Waste Authority ("SWA"),
the construction of a 3,000 ton per day Energy/Resource Recovery Facility (the "E/RRF") to dispose of solid waste
originating from Fairfax County and the District of Columbia. In March 1995, the County sold an option to
purchase refunding bonds to refund and redeem the Series A bonds. The option was sold to a financial institution
for $10.25 million. On November 4, 1998, the option was exercised and the refunding bonds were delivered to the
institution at certain agreed-upon interest rates. The proceeds of the bonds have been used to refund the Series A
bonds. The refunding bonds are secured solely by the revenues of the E/RRF, and neither the County, the EDA nor
the SWA is obligated to pay principal and interest thereon. Fairfax County is obligated under a service contract to
deliver certain minimum annual tonnages of solid waste to the E/RRF and to pay fees for the disposal of such waste
to provide funds sufficient to pay the E/RRF operation and maintenance costs and debt service on the bonds. The
Series
B bonds
have
been
retired.
See "GOVERNMENT
SERVICES
- Public
Works".
In 1989 and 1990, the EDA issued $26,765,000 of parking revenue bonds to finance construction of
parking structures near the Vienna Metrorail Station and the Huntington Metrorail Station in Fairfax County. The
-EDA refunded $21.46 million of these bonds in March 1998 with the proceeds of $12.93 million parking revenue
refunding bonds and other available funds. The remainder of the bonds issued in 1989 and 1990 have matured. The
EDA issued $25.735 million in bonds on November Iq, 1999 to finance a~secqnd parking structure at the Vienna
MetrorailStation.The parking~revenuebonds are:payable under leases with the WashingtonMetropolitanArea
Transit~uthorill~i~ii5~I~MATA")
fromrevenues;tci;be
d~ri~ by WMA'I~A
from:parking
surcharges-a`t.
~~-~e:
~
other parking facilities in Fairfax County. In~the event such revenues -are~notsufficient to pay debt service on ~
parkingrevenuebondsandundercertainothercon~itions;:the
dour;ty'
is, in effect,obligated,
subj~~tto;ahnu~
appr6pritiqn
byitsBoardofS~lpervisors,:
tq~pay~~~ ~ ~:EiDPt.~fficie~.tS,
paysur;hdebts~
In February 1990, the NorthernVirginiaTrdnsportationCommissionissued $79.4 million of bonds to
finance certain costs.associated with the establishment of commuter tail services (the Virginia ~Rallwa)iE~~s)in.
thk:ri6~t~iern:
ilI·ea
IdfViiglniasuridujndlng
Wgs~hin~o~;.~
D.17,:FairSax~~ourity
i;as.joine~
withdthkr3~l~sa~c~t~o~is_
through a Master Agreement to bearcertain
costs associated:with operating and insuring the rail servi6e aswell as
geivi~ing.thedebt i~sued~
by NVTC. The Master Agreei~ie~if
requires thatthe County's govemmental:office;s
charged
withpreparing
itsannualbudgetinclude
anamount
eqlialto itsshareof thecostsof theVirginia
Railway
Express. Each jurisdiction's share is determined by a formula set out in the Master Agreement. Fairfax County's
share of this cost was $3.0 million in EY 2004. An additional $23 million in NVTC commuter rail revenue bonds
was issued in early 1997 to purchase 13 new bi-level rail coaches. Debt service on these bonds is being funded
predominantly by State and Federal funds and VRE revenues.
In March 2000, the Fairfax County Park Authority issued a Note in the amount of $12,750,000, stated to
mature on July 31, 2001, to raise funds sufficient to purchase approximately 800 acres of open space in the western
region of the County for use as parks or park facilities. The Note, together with a portion of the accrued interest, has
been renewed annually, most recently on July 31, 2004, and is outstanding in the principal amount of $14,938,364
and, subject to four one-year renewals, is due July 31, 2005. The County is obligated by the terms of a payment
agreement with the FCPA to pay the FCPA amounts equal to the debt service on the renewal Note at its maturity.
The County's obligation to make such payments is subject to the appropriation by the Board of Supervisors of funds
for such purpose. The County intends to pay the FCPA from the proceeds of the sale of other parcels of County land
or other
available
funds.
Debt Service on Tax Supported
Debt Obligations
Total principal and interest payments on the County's outstanding tax supported debt obligations including
general obligation bonds, Literary Fund loans and other tax supported debt obligations are presented in the following
table:
Service Schedule - Tax Supported
Debt Obligations
Other
GeneralObligationBonds'
Fiscal
Tax
SuDnortedDebtObligations2
Year
Ending.Tune
30
Principal
Interest
Principal
Interest
TotaP
2005
2006
2007
2008
2009
$137,440,000
132,520,000
132,685,000
127,450,000
122,485,000
$74,592;366
69,643,501
63,909,926
57,460,748
51,482,358
$5,782,822
5,951,064
6,255,695
9,024,170
10,315,068
$9,876,118
9,686,951
9,407,670
9,112,972
8,745,463
$227,691,306
217,801,516
212,258,291
203,047,890
193,027,888
2010
2011
2012
2013
2014
112,470,000
106,600,000
98,695,000
90,895,000
85,485,000
45,634,014
40,157,081
35,071,933
30,444,654
26,097,298
10,643,794
10,977,652
11,346,647
11,725,783
12,120,067
8,330,558
7,881,181
7,413,319
6,890,070
6,310,022
177,078,366
165,615,914
152,526,898
139,955,507
130,012,386
2015
2016
2017
77,540,000
72,580,000
66,770,000
22,063,898
18,389,335
14,812,510
12,554,502
13,009,094
13,488,849
5,693,824
5,055,469
4,393,714
117,852,223
109,033,898
99,465,073
60,660,040
1:1,590,285;
~
13,443,773
. 3,709,130
~4~,188
46,140,000
6,285,855 ~
5,229,151
2,382,770
-2018
;· 23185~~1---':
p~g;i95,535:.14,00;3,872 2;837,256
2020
: : .dzi
;%7,560,000
,I,:~25f~91;q
·;:i1~5,354618; 2,3.
19,771.:.:::~·1-:
1:
~;290,397
~023
18,930,000
~,266,5j~
9,18$,000;:::
2024
-~25-2034 1
Total
'60,037,776
413,32$
·D..
$1,618;175~
o:
$58P,q81,93q
i1$50,261.
,--i~~;5~: iJ:i~
5,626,139
i2,:~Q8,724
~2,4~5
ii(i0.
1,574,372
;
2'7,5~9~j,~i86
; `:
1,289,816L~!8~b!866
$29~;886,762
$120282,215~9~~7
1
1
Does not include estimated debt service onthe 2004 B bonds. Includes bonds that iyill be refunded with the 2004 B Bonds.
2
See '~Other Tax Supported Debt Obligations".
3
Totals may not add due to rounding.
See also the discussion of taxes levied by the Route 28 Highway Transportation Improvement District,
locatedpartly in the County,to pay debt serviceon CTB and EDA bonds under "GOVERNMENTSERVICESTranspoaation - Transportation Improvement Districts".
34
·:I:·:-·
-:
Revenue
Bonds
In 1986, the County issued $75 million of an authorized $179 million sewer revenue bonds pursuant to a
General Bond Resolution adopted by the Board of Supervisors (the "General Bond Resolution"). The proceeds were
expended to finance the expansion of the wastewater treatment facilities at the Noman M. Cole, Jr., Pollution
Control Plant (formerly the Lower Potomac Pollution Control Plant) from 36 million gallons per day ("mgd") to 54
mgd and the County's shareof the cost of expanding facilities at the District of Columbia's Blue Plains Wastewater
Treatment Plant. The treatment capacity of the Blue Plains Plant expanded from 309 mgd to 370 mgd and the
County's share increased from 16.02 mgd to 31.0 mgd. In 1993, the County issued $72.1 million sewer revenue
refunding bonds to advance refund a portion of its outstanding sewer revenue bonds. In July 1996, the County
issued the remaining authorized but unissued $104 million sewer revenue bonds to finance additional expansion and
improvements to its Noman M. Cole, Jr., Pollution Control Plant. The Board of Supervisors authorized, and the
County called for redemption on November 15, 2003, all of the County's $55,330,000 1993 sewer revenue bonds
scheduled to mature on and after November 15, 2004; therefore, no debt remains outstanding for the 1986 or 1993
bonds. The County is currently considering a refunding of the 1996 bonds for debt service savings.
For indebtedness incurred after adoption of the General Bond Resolution, the County has not exercised its
option under the General Bond Resolution to treat such indebtedness as parity indebtedness, payable on par with the
debt service on the County's outstanding Sewer Revenue Bonds, and, therefore, such indebtedness has been
classified under the General Bond Resolution as "subordinate indebtedness".
Debt obligations to the Upper
Occoquan Sewage Authority ("UOSA") and the 2001 and 2002 State Revolving Fund loans through the Virginia
Resources Authority, used to partially finance the plant improvements for the Alexandria Sanitation~Authojty (the
"ASA"),
are tr~ated as Suboidinat~
debt.
Wastewater
iie~~tl da~ity and:servides
~irealsop;r'dirided
t~o~the
Integr~teci
SewerSj·stem~p~isua~t:to
contracts
withArlington
Cou~ty,
theASA,theDistrict
of Columbia
andtheUOSA!vllhereby
th~lC~n3r~
is
obligated
toshare
the:Cg;pi~t~~:~iSt~s~
and~ijil~g~cl
debtservic8
~~c~tainfaci~.l~ti~..
Thle
Count~'sl~ii~ii~'i~ii~:~o
~si;cjh'
dertam
entitiesarepayable
sdlelj~
~binti~erevei~iub
-df~ In~j~i·afe`d
Se~Ner
S)stem:a'riii
ar~.nDIgeileral
o~i~at~ohs`
dfthe
County.
Further information concerning these obligations is included in Notes I and J to the Basic Financial
:s~tatemenfslshowi~~In
·:
The Countyhas enteredinto;aserviceagre~mentwith ASA that obligates~ Countyfor60% of the cost of
capacity
oftheASA~aste·i~gtei
~~~nt~gnt ~n~ j,~t'dSe~~isteni,
indiudifig
debtse~vice
an;ASA'bo~ds
~i~ssuea
for ASA system improvements where the County does not otherwise provide for its share of the capital cost of such
improvements. The most recent estimate of the cost of the improvement project provided by ASA to the County
was approximately $320 million. While applications for state grants have been made, there can be no assurance that
state or federal grants will be received in the future. The County obtained permanent funding in EY 2001 and again
in FY 2002 for a portion of its share of these costs from the proceeds of two loans aggregating $90 million from the
Virginia Water Facilities Revolving Fund. The County issued to the Fund the County's $40 million subordinated
sewer revenue bonds bearing interest at the rate of 4.10% per annum and $50 million subordinated sewer revenue
bonds bearing interest at the rate of 3.75% per annum, in evidence of its obligation to repay the loans. The County
expects to provide the balance of its share of the costs of ASA's improvement project from other borrowings and
available Integrated Sewer System funds.
In January 1996, UOSA issued $330.86 million bonds: $288.60 million bonds to finance the cost of
expanding its advanced wastewater treatment plant from 32 mgd to 54 mgd and $42.26 million to refinance certain
of its outstanding bonds. In January 2004, UOSA refunded a portion of this debt for debt service savings and
accordingly revised the participating member jurisdictions' debt service schedules. Fairfax County is responsible
for approximately 62.8% of the debt service on UOSA's bonds.
The debt service on the County's outstanding sewer revenue bonds and the subordinate obligations payable
for capacity under its contract with UOSA as of June 30, 2004 are reflected in the following table.
Other Sewer Debt Service Oblieations
Revenue Bonds
FiscalYear
Subordinate
Endine
.7une
30
Principal
Interest
SRFNRA
Obligations'
Total
2005
2006
2007
2008
2009
$1,705,000
1,810,000
1,925,000
2,045,000
2,170,000
$5,545,399
5.446,540
5341,493
5,229,837
5.111,290
$6,637,073
6,637,073
6,637,073
6,637,073
6,637,973
$14,997,982
14,995,620
15,465,537
15,465,855
15,466993
$28,885,454
28,889,233
29,369,103
29377;765
29,385,356
2010
2011
2012
2013
2014
zglo,ooo
2,459,999
2,605,000
2;770,000
2,949,009
4,985,290
4,851,415
4309,243
4558,071
4397,478
6,637,073
6,637,073
6,637,073
6,637,073
6,637,073
15,465,429
16,078;716
16,077,878
16,M5,654
16,077,402
29,397;792
30,017,204
30,029,194
30,040198
30,051,953
2015
2016
2017
2018
2019
3,125,000
3,320.000
3,530,000
3;750,000
3,989,999
4,225,728
4,042,045
3,846,820
3,639,340
3,417,945
6,637,073
6,637,073
6,637,073
6,637,073
6,637,073
16,076,296
16,078,506
16,078,818
16,077255
16,076,005
30,064,097
30,077,624
30,092,711
30,103,668
30,110,123
2020
2021
2022
4,230,000
4,495,000
4,775.000
3,178,955
2,925,930
2,657,100
6,637,073
6,637,073
3,637,788
16,077,268
16,076,440
16,313,757
30,123296
30,134,443
27,383,645
2023
5,975,999
:::::-':202~4
Total
2,371,450
$96.87i?;bOp
0
16,311,177
O
~83~~5,156: $116,468,922
97,8751681
23;757,627
4;2.899.369..
;
:···~i~i-:
:
$39~9~~081~9::;$704091,4i~7~
~Bi~j~ed
on:theCounty'sshareof schedulesUOSAdebtservice.
·nebtRatios,
1:-
::
`1I
~:~i~e~s~~:to showtrendsin:the
in~ie~b~t~d~ess
6fthe;d~uni~
asaperc~ntage
of'theest~matehm~kei
Gil~e
6ftaxable
pro;p~it~i
intheCb;iiiit~i
~ina
to
itsestim~l~ulation
~ thetrenaof-general
obligationldebt
service
requi~ asa~ge
ofCQneral
Fuiia~ disbiirseint~ri.
Trend of Net Debt as a Percentage
Estimated
Fiscal Year
Ended.Tune
30
1994
1995
1996.
Market
Value of Taxable
Net Bonded
of
Property
Estimated
Indebtedness'
MarketValuez
$ 1,110,177,500
1,136,368,575
1,167,504,650
$74,395,400,000
75,702,700,000
78,155,100,000
Percentage
1.49%
1.50
1.49
1997
1,219,735,725
80,853,900,000
1.51
1998
1,258,171,800
83,471,400,000
1.51
1999
2000
1,314,377,875
1,380,266,450
87,086,700,000
92,692,600,000
1.51
1.49
2001
1,442,682,525
101,048,500,000
1.43
2002
1,655,613,600
113,801,300,000
1.45
2003
1,779,461,575
128,927,100,000
1.38
Source:FairfaxCountyDepartment
ofTaxAdministration
andDepartment
of Management
andBudget.
1 Beginning
inFY2092,thetotalincludes
outstanding
LeaseRevenue
BondsfortheEDAGovernment
Center
Properties
andoutstanding
Cemficates of Participation for the South County Government Center in addition to General Obligation Bonds, Literary Fund loans and
FCRHA
LeaseRevenue
BondsforCommunity
Centers.Beginning
inEY2003,thetotalalsoincludes
theLaurelHillRevenue
Bonds.
2
Estimated market value is based on recorded values as of January 1 of the prior fiscal year.
36
Per Capita
Debt
Per
Capita
Fiscal Year
Ended
June30
1994
1
Net Bonded
Indebtedness'
$1,110,177,500
Net Bonded
Indebtedness
Estimated
Population"
863,134
Per Capita
$1,286
Fairfax County
Per Capita
Income3
$35,779
as
Percentage of
Per Capita
Income4
3.59%
1995
1996
1,136,368,575
1,167,504,650
879,401
899,650
1,292
1,298
37,201
38,482
3.47
3.37
1997
1998
1,219,735,725
1,258,171,800
912,126
931,452
1,337
1,351
40,330
43,193
3.32
3.13
1999
2000
2001
2002
1,314,377,875
1,380,266,450
1,442,682,525
1,655,613,600
946,371
969,749
984,366
1,004,435
1,389
1,423
1,466
1,648
47,306
50,027
51,463
52, 199
2.94
2.84
2.85
3.16
2003
1,779,461,575
1,012,100
1,758
54,419
3.23
Source: FairfaxCountyDepartmentof ManagementandBudget. Beginningin FY 2002,the total includesGeneralObligationBondsand
othertaxsupported
debtpayable
fromtheGeneralFund
jncludin~:LiteraryFundloansitheo~ts~anding
Revenue
bondsforthe~r?qmic
·"YR~hf[~~Ofif~Y
~ov~mment
~Center
P;ropertles
andllaurel
HillPublic
~ia-ilit~es,
th~-b~istand~ng
~fi~dates
ofP~lftii~pa;~i~;.i~'i~~
tj~el~
soutiiCounty~b~~ki~t ~eate;,~i~d
i;CRtiAle~-~ise
re~enue'i~nh,
'f~,;csmmiinitj;;~:e;It~ji
i
source:i;airfa~~lCou$t~Depa;tment
of~Systems~Managi·,ment
fdr:f~ufna;~:S~·;~ices.
3 .Budgeti~i363.
So-rcei.·.
Bureau
lofI;ic'l~ihes'airfaix'Citj;~iuid
'~onpiniF.gr)alysis,
~$;i~~y'
~artm~?t~
ofC;o~m~~194472002;:~
~C~nty:
~artmenf]
~ Mala~l~~l Pi\
ii:::
~fFall~~uic~h.
' ~; 1.'1
4 The
Bureau
ofEconomic
Analysis
re-benchmarked
data
back
to1994.
Debt
Per~apita
as~
Percentage
ofPercaI~aI~iita
Income
forfisc~
~
1994
~:1:~99 il;~j:6$,3:52,~,j~,
3:35,
3.23an . i6resdectii;ely.
37
Service Requirements: as a
&a~19
Percentage of General Fund Disbursements
Fiscal
Year
Ended
DebtService
GeneralFund
Disbursements
1994
1995
1996
1997
1998
1999
Source:
$ 129,675,197
$1,394,808,186
132,902,278
142,754,018
152,571,474
1,487,080,719
1,602,457,378
1,682,606,121
162,970,744
1,756,990,140
162,622,554
1,849,587,185
2000
2001
2002
176,004,197
183,740,487
190,097,946
1,982,577,128
2,148,334,971
2,292,016,724
2003
212,106,642
2,447,015,916
Fairfax
Percentaee
9.3%
8.9
8.9
9.1
9.3
8.8
8.9
8.6
8.3
8.7
County
Department
ofManagement
andBudget.
Beginning
inFY2003,
thetotalincludes
General
Obligation
Bonds and other tax supporteddebt payablefrom the General
Fundincluding:LiteraryFundloans,theoutstanding
Revenue
bondsfortheEconomic
Development
Authority
Government
Center
Properties
andLaurel
HillPublic
Facilities,
theoutstanding
Ceitificatesof Participatidnfbrthe SouthCount~Government
denter,
andFCRHA
lease
revenue
bonds
forcommi~nity
centers.
.
Underlyii;g Bonded Indebtedness
AsofJune50,2003,.there
wasouts~ing.the
following
underlying
bonded
indebtedness.:of
.towns
or
districtswithintheboundari~s'of
Fairfaxdount~t~
TOw" ofViennil I ::
;S;StoT'mDrain~Impioir~ment/Water
and
Sewer/PublicBuildings
Town
ofHerndon
Recreational
ComplexM7ater
and
Sewermecreational
Facilities
Small District #1 of
Dranesville~t~stnct
at oturanesville
McLean
Community
Center
Total Underlying Indebtedness
~16,523,333
12,514,596
450.000
$29.487.929
These underlying general obligation
bondsareobligations
oftherespective
townordistrict
onlyandare
County
andthefullfaithandcreditoftheCounty
arenotpledged
tothepayment
ofsuch
I~~~lo~an~kns~
OfFairfax
The bonds,notes and other obligations
of theFairfaxCountyWaterAuthority,
theFairfaxCountyPark
Authority,
theFairfaxCounty
Industrial
Development
Authority,
the~FairfaxCountyEconomic
Development
Authority,the FairfaxCountyRedevelopment
and Housing
Authority,
the Route28 Highway
Transportation
Improvement
District,theNorthernVirginiaHealthCenterCommission,
andtheNorthern
Virginia
Transportation
Commission
arenotobligations
of theCounty.
38
~19
BASE DATA
assisted
FairfaxCountyreassessesmorethan 331,000parcelsof real propertyannuallyemployinga computer
massreassessment
program
forbothresidential
andnon-residential
properties.
Theperformance
of the
annual assessment program as measured
Russell Index, is excellent.
byassessment
to saleratiosandcoefficient
of equity,referredto as the
TheRussell
Indexindicates
theamount
ofdeviation
fromthemeanassessed
valueand
providesa measureof uniformityto the assessment
process.TheInternational
Association
of AssessingOfficers
considersan indexof 15.0or less to be good. For the reassessmenteffectiveJanuary i, 2004, the countywide
assessment to sale price ratio was 0.91
andtheRussellIndexwas6.0. See"GOVERNMENT
SERVICES
- General
Goverument Administration" for
an explanation of the Russell Index.
The assessedvalueof the real estatetax base, asreportedfor2004in themaintaxbookforFairfaxCounty,
increased12.04%in valuefromtheprioryear.
The data in the
following
fivetablesarepresented
toillustrate
trends
andcharacteristics
oftheassessed
value of real and personal propertywhichare majorsourcesof County-derived
revenue:
AssessedValueof AllTaxableProperty
(ooo,s)
~is~~
-.
Real
Personal
Pro9~6:' '
1995
1996
1997
1998
$ 66,912,100
68,647,300
70,510,800
72,507,700
1999'
75,500,700
2000
80,225,000
2001
2002
2003
2004
2005
test.)
87,334,092
99,172,800
114,155,500
127,892,600
142,656,080
Source: Actual values are from the Fairfax
:Pro~k~tv;
$ 6,775,400
7,539,300
8,257,400
8,620,700
9,070,800
s,sss,odo
Total
Public Service`
LOrDOTa~n~
$ 2,015,200
1,968,$00
2;085,700
2,343,000
::2,5ij;200
2,582,600
Ass~sseil
~~
::~I:::::.
$ 75,702,700
78,155,100
·80,853,900
83,471,400
87,086,iQO
92,692,600
10,820,524
:2,893,923
101,048g46
11,610,620
11,699,600
3,161,030
113,801,300
128,927,150
3,256,620
142,848,820
11,700,440
3,153,4&0
157,510,000
11,586,200
3,042,300
County
Department
ofTaxAdministration
asreported
intheFY2003CAFRandthe
EY2005AdoptedBudgetPlan. Figuresare
netofexonerated
assessments
andtaxrelieffortheelderly
anddisabled.
1
Pursuant to State statute all Public Senice
Corporation
realproperty
assessments
arerequired
to bemadeat 100%ofestimated
market
valueannuallyby the StateCorporationCommission.
39
Rates per $100 Assessed Value
(Fiscal Year)
1996
1997
1998
999
2000
$1.16
$1.23
$1.23
$1.23
$1.23
PersonalProperty-Regular.......
4.57
4.57
4.57
4.57
4.57
4.57
4.57
4.57
4.57
4.57
Personal Property-Public
Service.....................................
1.16
1.16
1.23
1.23
1.23
1.23
1.23
1.21
1.16
1.13
4.57
4.57
4.57
4.57
4.57
4.57
4.57
4.57
4.57
4.57
and Development.....................
4.57
4.57
4.57
4.57
4.57
4.57
4.57
4.57
4.57
4.57
Personal Property-Mobile
Homes .....................................
1.16
1.23
1.23
1.23
1.23
1.23
1.23
1.21
1.16
1.13
.01
.01
.01
.01
.01
.01
.01
.01
.01
.01
.01 '
.01
.01
.01
;01
.01
.01
.01
.01
RealEstate-Regularand
Public
2001
2002
2003
2004
$1.23 $1.23 $1.21 $1.16
2005
$1.13
Service..........................
Personal Property-Mining
and Manufacturing,
MachineryandTools...............
Personal Property-Research
Personal Property-Antique
Cars ...............................;.........
Person~Properiy-Special'...·...:.. .01
Source: ApprovedFiscalPlans,
1
FY 1~996-2005.
Includesvehiclesspeciallyeq~uipped
for thihahdicapp~d;prii·8telyownedv'ansused for van pools;Lehiclesbelongiiigto volunteer~fireand
rescue squad members;vehiclesowned by auxiliarypolice; certain propertyof homeownersassociations;aircraft to include flight
simulators; and motor v~hicles owne~ by qualified elderly or disabled individuals and, effective inEY 2000, boats.
Commercial-IndustriaI
Percentage
of the
Total Assessed Value of Real Property
Fiscal Year'
Percent"
1995
19.58
1996
19.04
1997
19.56
1998
20.47
1999
21.84
2000
24.32
2001
25.37
2002
24.84
2003
21.97
2004
19.'14
2005
18.20
Source: Fairfax County Department of Tax Administration. Assessed values are reported by State of Virginia Land Use Codes.
Vacant land is defined according to zoning classification.
1
Rscal year property taxes are levied on prior year assessments.
2
Includes
the Towns
of Vienna,
Hemdon
and Clifton.
40
following data shows the assessed valueof real property of the 25 largest holders of real property in
the County las of January 1, 2004).
Rank
Properts
Owner
Pro~erts
T-vne
Total
Assessment
1
2
3
4
5
Lehndorff Tysons Property
West Group Properties LLC
Prentiss Properties
Dominion Virginia Power
Smith Property Holdings
Tysons Corner Regional Shop Center
Various Offices, Retail, Ind. and Land
Office and Land
Public Utility
Various Commercial
6
7
8
9
10
Franconia Two LP
Fairfax Company
Washington Gas Light Co
EOP RestonTown Center
Springfield Campus LLC
Springfield Mall
Fair Oaks Mall
Public Utility
Office, Shop Center and Land
Continuing Care Retirement Community
247,895,865
247,260,135
202,770,217
190,398,370
178,961,575
11
12
Gannett Company Inc.
Mobil Oil Corp.
Office
HQ Office and Various Commercial
171,686,680
169,940,580
13
PS Business
Industrial
162,282,450
14
USRP I LLC
Shopping Centers
160,588,865
15
WestMadAssociates
Officeand:land
158,5294~6~d
16
WII~ LP
Offices,Apartments,Ltd.and Shopping
154,448,360
Parks LP
$ 485,820,295
453,206,520
424,250,515
358,671,418
257,888,285
Park
Centers
17
18
19
-20
SummilP;operti~s
Mitre Corporation
: Capital One Bank
Camp;sP'·i·tpe·ltyd·rp:
·.
P;paitmentsali~l:Lanh
148?218,63;5
Office
office.. ~ : :,
146,674,540.
141,827,~10
- .-Office
'140,5'27,065
21
Navy Fedeial Credit Union : ~ _ Various Officesand iand·
22
ISTAR NG LP
Office
. -
_
124,650,780
128,769;755
23
24
25
Avalon Properties Inc.
Pulte Home Corp.
Verizon Virginia Inc.
Apartments
Residential and Land
Public Utility
121,524,115
117,850,745
114,891.764
$5~209~35~39
Source: Fairfax County Department of Tax Administration.
Derived from January i, 2004 tax rolls.
As of January 1, 2004 the assessed value of the real property of the 25 largest holders of real property in the
County represented 3.60% of the total assessed value of all real property in Fairfax County, excluding tax exempt
properties. January 1, 2004 assessments generate tax revenue in EY 2005.
41
i:
and Personal Property
Tax
Levies
and
Tax
Qla
Collections
(ooo,s)
% of Current
Total
Fiscal
Total
Year
Current
:Lew'
% of
Collections2
Collection
of
Lew3
Back Taxes
$18,224
13,000
11,490
6,479
1994
1995
1996
1997
$1,025,807
1,058,500
1,103,903
1,203,645
$1,013,350
1,048,276
1,095,762
1,195,312
98.79
99.03
99.26
99.31
1998
1,250,521
1,241,128
99.25
1999
1,308,122
1,299,201
2000
2001
2002
2003
1,394,627
1,524,861
1,705,787
1,860,389
1,385,239
1,512551
1,690,398
1,838,970
Collection
of Current
&
Back Taxes
& Back
Taxes
Collected
$1,031,574
1,061,276
1,107,252
1,201,791
100.56
100.26
100.30
99.85
1,267
1,242,395
99.35
99.32
12,088
1,311,289
100.24
99.33
99.13
99.10
98.80
13,795
10,761
14,269
17,529
1,399,033
1,523,312
1,704,667
1,856,499
100.32
99.90
99.93
99.79
-
to
Tax Levy
Source: Comprehensive Annual Financial Reports for the Fiscal Years ended June 30, 1994-2003.
1
2
The total levyis the levyfor GeneralFundrealand personalpropertytaxesand doesnot includethe propertytax levy for SpecialRevenue
: Funas,
e.g..for
Refiise
Collection
andCommunity
Centers,
Current collections do not include tax collections for the Special Revenue.Funds or payments in lieu of taxes. As a result of revised
accounting
p;b~k~res,thecollection
oiperialtyandinterestpayments
forlatepayments
of currenttaxesis in~ludkd
in the'cdllection
of
current
taxes
rather
than
under
the
collection
of back
taxes.
3 . The:perc~nt~ge
of levy is not jhe collectionrate sincecu~ent collectionsalso includepenaltyand inierestpaytnei~tsforlatepaln~entsof
current
taxes.
~5ectioh' 58.1-39.lb
of the
Code of ~irgini81 aG·jhorizes Fairfax
Section 4-IQ-I
C~u~~,Zp"s4a~tjl~Se~tito
of the
Co~inly
Code,to iinposea pkn~ilty~
of 10%forfailure~'paytaxes;ivhe'n
due,::w~th
int~re~sl.
fo~be
dueohsuchtaxes
a~penal~yfoll~g the~day
suchtaxesaredueat therateof 1Woperannum
thefirst~ andat therate
es~ai~iisi~i;
p~i-Saant;
tciparagraph
~8~1of-t~e'jlntern~i
Reveriue
Codefor the sec~nd:a~i
's'u~seciu~
yea;isdf
delinquency.
FINANCIAL
Five-Year Summary of Revenues, Expenditures
Service
INFORMATION
and Fund Balances for General, Special Revenue and Debt
Funds
The financial data shown in the following table represent a summary for the five fiscal years ended June 30,
2003 of the revenues, expenditures and fund balances accounted for in the primary government's General Fund,
Special Revenue Funds and Debt Service Funds, and, in accordance with Statement No. 14 of the Governmental
Accounting Standards Board, in the comparable, primary government-appropriated
funds of the discretely reported
component units. The summaries for the five fiscal years ended June 30, 2003 have been compiled from the
financial statements of the County for the respective years and should be read in conjunction with the related
financial
statements
and notes
thereto.
91~
42
Years Fnde_dJune 30,
1_999
2000
2001
2002
2003
Revenues:
Taxes'......................................
$1,640,594,459$1,690,371,422$1,785,431,379$1,898,192,584$2,054,784,k94
Permits, privilege fees and
regulatory licenses...................
Fines and forfeitures....................
Revenue from the use of money and
property...................................
Charges for services and recovered
costs ........................................
182,229,862
191,272,823
195,534,961
214,387,258
241,063,748
Intergovernmental .......................
467,462,273
577,583,347
690,134,884
784,912575
779,306,409
Miscellaneous.............................
43,044,787
7,140,533
43,835,560
7,579,871
42,277,578
9,116,533
36,939,184
10,318,703
38,625,237
11,065,873
58,159,188
64502,480
71,658,750
36,704,979
28,011,515
23,696,684
Total revenues ..........................
Expenditures and transfers:
$2,422,327,786
20,701,792
$2~95,847,295
18,690,822
$2,812,844,907
$80,031,244
19,502,814
231,108,675
113,140,139
268,726,844
62,777,866
79,995,482
Education~3
..........i..................;
1,192,010,1031,331,0$2!35?1,446,628,160
, 1,518,075!3511?~O~W~3!8
Nettran~fers:tooth~er;~ndsb
.:.1...
Totale~pe?ditures
I~Ptransfers..
~x~assIde~e~Cieii~
of re~-eriuiS~
oYer~~;~sa~~~
Fundbalance,beginriinl5
ofyea~5
: Adiustm~ni
~ffudd~ancg;
Beginning of j·ear....;..;,;;.,;..;;,. i '
Increase (Decrease) in Fund Balance
Reserv~sg........;..;..·....
Fund~alance,end-of;rear.i;;...;...
$84,251,292
24,162,805
289,032,001
137,550,684
313,287,950
71,666,912
91,444,337
17,601,692
$3,170,459,168
General governmental administration
Judicial administration ................
Public safety................................
Public works................................
Health and welfare ......................
Parks, recreation 8~cultural.........
Community development............
Debtbnrice:...,,,.,:It·-··.,··.·l.·,t
$87,400,231
21,408,526
256,155,919
124,495,828
299,285,489
66,582,759
80,292,124
19,003,244
$3,000,458,527
$101,949,179
30,891,025
379,702,367
142,189,150
365,273,360
87,121,981
91,906,803
$109,811,931
34,094,538
409,258,168
155,020,538
379,242,626
87,313,589
96,435,266
n6~~~j'·.~ ::!84,9~b,8'12193,ifi,a42:
: -i_$07,678,25;1:
:-::,~,~
$6,5bOS51 106,035,082· 120,577,637
0.
:;:
40,17i,21 : ~2,638,8$8
~9sCi,j69
_$2,364~,48.1~. $?,600,31~,041-$2,819,5~,760:$29$0,76~8~9~. $~32~~_1,2~
·.;,
i.
.. ··
· ·r-.
:·--.:·O:62,W~M5
$(4,470;746)$~6.735,859)$49,69d,2889~171
321,8611168 383,115,957
··
0
377,j741iid
(1,333,346ij4
.. .-.4(44,$!4) ~~:,1:-. 62,745 :
o
;·· 390,376.
371,028;?33
1~,9ii,297T
.·(108,0983.,. ; :.,::::;~9$.~2 .
'~ .j83,11,95~ :$~j7~,374;i;10
' $37i,028,j33 $431,~Bj,Z~O. ~ ~~t~qg,i~3:
Source: Comprehensive Annual Financial Reports for the Fiscal Years Ended June 30, 1999-2003.
1
Taxes include real estate, personal property, sales, recordation, business, professional and other licenses and miscellaneous other taxes.
2
Pension contributions to employee retirement funds, which are included in the Education and Nondepartmental expenditures for 1999-2001
and allocated to the appropriate functions for 2002-2003, for each of the five fiscal years ended June 30, 1999 through 2003, were as
follows: 1999, $88,898,079; 2000, $91,228,972; 2001,$95,074,645, 2002, $95389P00, and 2003 $102,141,381.
3
Teachers' salaries accounted for in the School Operating Fund are paid by contract over a twelve-month period ending in August.
Consequently, in order to reflect the total teachers' salaries in the year the services are rendered, an accrual is made at the end of each fiscal
year for the payroll liability arising from those teachers' salaries to be paid in the first two months of the succeeding fiscalyear. In FY 1984
the County began a program to fund this liability to the Fairfax County Public Schools over a l0-year period. In FY 1990, the payment to
offset the unfunded liability was deferred. Beginning in FY 1997 payments were resumed over a ten year period at a rate of $1.62 million
per year. As of lune 30, 2003, the~unfUndedliability was approximately $4.9 million.
4
Beginning with FY 2000, Housing Funds are reported as Enterprise Funds. The beginning fund balance for FY 2000 was restated to reflect
this change.
5
Fund balance includes amounts reserved for inventories of supplies.
6
The interfund transfers among the funds presented have been eliminated.
7
For EY 2002, beginning balance was restated to comply with the provisions of Governmental Accounting Standards Board Interpretation
No. 6, "Recognition and Measurement of Certain Liabilities and Expenditures in Governmental Fund FEnancialStatements". Beginning
fund balance was also adjusted for the Gift Fund which is now included in the General Fund.
8
Effective FY 2002, nondepaamental expenditures are allocated to specific functions.
9
Rscal years 1999-2002 have been restated for comparison purposes to reflect GAAP basis and Budget basis measurement differences now
reported in the functional line items, rather than aggregated and reported in the "Increase @ecrease) in Fund Balance Reserves" line item.
43
Policies
TheBoard
ofSupervisors
hasbeenguided
bylongstanding
financial
policies
andguidelines
intheconduct
of financialmanagement.The governingstatementof financialpolicyis containedwithinthe TenPrinciplesof
SoundFinancialManagement.
Adoptedby the Boardof Supervisors
in 1975and amendedas neededto address
changing
economic
conditions
andmanagement
practices,
theTenPrinci~les
havebeenreaffirmed
andhaveguided
eachsucceeding
Boardof Supervisors
to establishstrongfiscalmanagement
toolsandpractices.TheTenPrinciples
providefor theintegration
of landuseplanning
withcapitalandoperating
budgets;
establish
guidelines
for the
development
ofannualbalanced
budgets;
stresstheimportance
ofmaintaining
positive
cashbalances;
establish
firm
not to exceed limits to debt ratios; provide guidance on cash management,internal controls,and performance
measurement;
provideguidelines
restrictingtheproliferation
of underlying
debtanduseof moralobligations;
and
encouragethe developmentof a diversifiedeconomywithinthe County.
Otherpoliciesandtoolsthathavebeendesignedto enhancetheimpactof theTenPrinciplesincludeannual
adoptionof budgetary
guidelines,
formalestablishment
of variousexpenditure,
revenueand specialpurpose
reserves,capitalimprovement
planningguidelines,
policiesforriskmanagement,
guidelines
foracceptance
of grant
awards,andplanningfor information
technology.Varioustoolsin activeuse by the Countyincludethe annual
budget,the CapitalImprovement
Program,revenueandfinancialforecasts,and management
initiativessuchas a
performance
measurement
program,
a payforperformance
management
system,workforce
planning
andvarious
information technology initiatives.
Certain
Financial
Procedures
Description ofFunds
TheCounty'sannualaua~ted;
financi~a~':
statem~nts:i~lude
the fundsaclminis~ ljy the:,l~p~,i6jE;
supervisors
andthe~SchoolBbard.'
l~eadc'o~i~t;s
~dflthe:-doqnty
~ir~
organized
onthebasisoffu~nas,
e~i~ofwhi~iS
considered to be a separate
accountingentity. The transactions in each fund are accounted for by providing a
separatesetof self-balancingaccounts
which~:l~ris~its assets,liabilities,fund balance,;fevenues;~
expe~iaitures;
Annudl
Financial
Statements
TheCounty'sfinancialstatementshavebeenexaminedand reportedon by independent
certifiedpublic
accountants since FY 1969. The FY 2003 audit was performed by KPMG, LLP, Certified Public Accountants,
Washington,
D.C. For furtherinformation
regardingthe County'sauditsee the Independent
Auditor'sRepoaAppendix TV.
TheCountymaintainsits accounting
systemin accordance
withthespecifications
of theAuditorof Public
Accountsof the Commonweaith
of Virginia.Certainadjustments
havebeenmadeto presentthe accompanying
financialstatementsin accordancewith generallyacceptedaccountingprinciplesapplicableto governmentalunits.
The Countyhas beenawardeda Certificate
of Achievement
for Excellence
in FinancialReporting
by the
GovernmentFinanceOfficersAssociationof the UnitedStatesand Canadafor its annualfinancialstatementseach
year since the fiscal year ended June 30, 1977.
TheCounty'sannualfinancialstatements
are availablefor inspectionat theOfficeof the Directorof the
Department
of Finance,
12000Government
CenterParkway,
Suite214,Fairfax,
Virginia,
22035. See"FUTURE
FINANCIALINFORMATION'and "AppendixW--CONTINUING DISCLOSUREAGREEMENT."
Budgetary Procedure
The Countyhas no legalauthorityto borrowin anticipation
of futureyears' revenues,exceptby the
issuance of bonds or bond anticipation notes.
·Iq
to the beginningof eachf~scalyear,the Boardof Supervisors
adoptsa budgetplanconsistingof
contemplated
expenditures
andestimatedrevenuesforsuchfiscalyear. Onthebasisof theadoptedbudgetplan,the
Boardof Supervisors
appropriates
fundsfor the expenditures,
and establishestax ratessufficientto producethe
revenues, contemplated in the budget plan;
Theannualbudgeting
processfora fiscalyearbeginsin thefirstquarterof thepreviousfiscalyearwiththe
submission
by agencydirectorsof budgetrequeststo the Department
of Management
and Budget. Duringthe
secondquarter,budgetrequestsare reviewedand meetingsbetweenthe CountyExecutive,DeputyCounty
Executives
andagencydirectorsareheldto discussagencyrequests.Uponreceiptof thepreliminary
budgetof the
CountySchoolBoardin the thirdquarter,the CountyExecutivepreparesan initialbudgetfor submissionto the
Board of Supervisorsand proposestax rates sufficientto producerevenuesneededto meet expenditures
contemplated
in the initialbudget.AfterworksessionswiththeBoardof Supervisors
andpublichearingson the
proposedbudget,changesaremadeandthefinalbudgetis adopted.Taxratesareestablished
priorto thebeginning
of the fiscal year for which the budget is prepared.
Duringthe fiscal year,quarterlyreviewsof revenueand expenditures
are undertakenby the County
Departmentof Management
and Budget. On the basis of these reviews,the Board of Supervisorsrevises
appropriations as needed or desired.
On January25, 1982,the Boardof Supervisors
adopteda financialpolicyrequiringmaintenance
of a
"managedreserve"in the GeneralFundbeginningon July 1, 1982at a levelnot lessthantwopercentof General
Fund~~uf~~~-,
T~s reservehas beenincq~~f~ in t~e~~td~e~t
ea~hfiscalyear. Thisreservewas
.:.i
I ~_~t.e~
impi~
~_~~a~:~~:'bf
;mfores~ei~;~~~
Pli ~eiicy 1~~ and.
adjustment
tochanges
~git~g fromtermination
ofrevenue:
soi~i~rces
through
actions
orbthergoirernmental
bodies.
In 19s's,
theBoard
alsoa;idp~':g
policy
onappropriarion~
during
quaiterly
budget
reviews
which
provides
that
.,nartrec~p
~~esi8llotiabeids~foi:t~iih~
~s~~~~~it;i~e~:.~l
Other
~~~
d~hiiesl~~~:: ::
:: i· i
qua~eriy
review~djGstni~i~
arenott6l~~i~~:t~?;;;b~lpei·~erit;'s~
`th~·:~ Fuild~ls~~se~e~en~;
In.:adiciition~'.o;i.
Septe~er13,ISi99,th~::o~
bSSupen;isors
establis~a Revenue:S~ilizati~n
Fund~vith
a goalof~ing
e
Or
t~f~e
iiefce~:;l~l~c~~!
~:]gisbu;se~ts:jj As-d theeriddfFY2~~,itheRevenue'~ii~'~u~.'~
funded61alIevklof ~~xii~iel~ 1.%per'centdfc~i:FUnddisburserfie;lts.
~i~his
reserve
Isaeslgnea
ongoingrequirements
in jreaisof significant
econorriic
downtuni.
TheGovernment
Finance
Officers
Association
oftheUnited
StatesandCanada
C'GFOA")
haspresented
the Awardfor Distinguished
BudgetPresentation
to FairfaxCountyfor its annualbudgetfor eachyearsincethe
fiscalyearbeginning
July1, 1985.In orderto receivethisaward,a governmental
unitmustpublisha budget
documentthatmeetsprogramcriteriaas a policydocument,as an operationsguide,as a financialplan and as a
communications
medium.
Investment Management Policy
The County'sInvestmentand Cash ManagementProgramoperatesunder the directionof the Investment
Committeecomprisedof the ChiefFinancialOfficer,the Directorof the Departmentof Finance,the Directorof the
Department
of Management
and Budget,the Directorof the Department
of Tax Administration
and the Deputy
Directorof theDepartment
of Finance.Guidedby a formalinvestment
policy,theCommittee
continually
reviews
theCounty'sinvestment
policiesandstrategiesbi-weekly,
andmonitorsdailyinvestment
activity.
DuringFY 2003, the County's averageportfoliosize (which includesinvestmentsin the GeneralFund,
SpecialRevenueFunds andEnterprise Funds) was approximately$1.7 billion. The funds are investedin U.S.
Treasuryobligations,obligationsof the Federal Home Loan MortgageCorporation,Federal Home Loan Bank,
FederalFarmCreditBank,andFederalNational
Mortgage
Association,
bankersacceptances,
commercial
paper
(ratedA1/P1or higher),certificates
of deposit,moneymarketmutualfundslimitedto Government
Obligations,
and
repurchase agreements collateralized by U.S. Treasury securities.
The County'sinvestmentpolicieswhichgovernthe pooledcash and generalobligationbondproceeds
portfolioprohibitinvestment
in instruments
generallyreferredto as derivatives,
and the Countydoesnot employ
leverage in its investments.
Fund Revenues, Expenditures,
Transfers and Beginning Fund Balance
The General Fund is maintained by the County to account for revenue derived from County-wide ad
valorem taxes, other local taxes, licenses, fees, permits, charges for services, certain revenue from Federal and State
governments, and interest earned on invested cash balances of the General Fund and Capital Project Funds. General
Fund expenditures and transfers include the costs of general County government, transfers to the School Operating
Fund to pay the local share of operating Fairfax County public schools, and transfers to the Debt Service and Capital
Projects Funds to pay debt service on County general obligation bonds and for certain capitalimprovement projects.
General
Fund
Summary
Shown below are the County's revenues, expenditures, transfers and beginning fund balance of the General
Fund for FY 1999 through FY 2003.
General Fund Revenues, Transfers and Beginning Fund Balance
tin thousands)
Fiscal
1999
$1,311,289
General Property Taxes ..............;..........
Other Local Taxes..................................
Year
2000
$1,336,728
Ended
June
30
2001
$1,403,483
20022
$1,516,094
2003
$1,667,595
317,893
343,197
360,365
360,263
373,594
32,874
33,654
31,908
28,609
`27,781
7,140
7,580
9,117
10,319
11,060
;28j212
21,463
;10,693
45,9211.
Permits~l~vi!egeFees ~Regulatory
Lidens~~~....:....:·;.:..1.....;.......;..i;....;.......
Fines and Forfeitures
·
..........;..................
Revenue~frorh~
thel~se~~on~jl:aiid
Prope;ty
Rec~d~Q~eil
:-C~arges~for:SerGiciis;&
Cbsts
;;;.;.;..
........:;..1;:.....:..;...
.........__ ·
·Intergdvernmeat~:.....i;....i....i...........i....
Miscellaneous
...i......................;.............
45,9j
51,479
35,445
34,293
103,449
186,966
17
':5i,S67
37,783
239,315
--315,653
6,361
403
1,237
94,842
100,796
114,170
110,289
$1,948,919
$2,095,054
$2,253,971
$2,419,415
3i2,110
920
Transfers In and Beginning Fund
Balance ...............................................
130,931
Adjustment to Beginning Fund
Balance ...............................................
Total`.........................................
8,0461
$2,601,375
Source: Comprehensive Annual Financial Reports for EY 1999-EY 2003.
1
2
For FY 2002, beginning balance was restated to comply with the provisions of Governmental Accounting Standards Board Interpretation
No. 6, "Recognition and Measurement of Certain Liabilities and Expenditures in Governmental Fund Hnancial Statements". Beginning
fund balance was also adjusted for the following funds which are now included in the GeneralFund:
Gift Fund, Consolidated Community
Funding PoolFund, and Contributory Fund.
FY 2002 has been restated for comparison purposes to reflect gross activity in the Gift Fund (included in the General Fund effective FY
2002 - see footnote I), rather than net activity.
46
8 1,
Fund
Expenditures
tin thousands)
and Transfers
Fiscal
1999
Transferto SchoolOperatingFund............
2000
Year
Ended
June
2001
30
2002
1
2003
$ 852,128
$ 897,413
$ 988,001
$ 1,079,912
$ 1,168,875
Costs of General County Government.......
746,337
820,403
877,488
945,879
1,008,151
Transfer
177,649
184,072
189,918
203,539
213,694
to Debt Service Funds .................
Transfer to Capital Project Funds .........,...
Transfer
toMetro
Construction
14,607
OperationsFund......................................
Other Transfers
23,360
21,996
7,507
7,006
11,451
12,273
and
......i...................................
Total..............................................;....;.......
11,151
47,715
7,046
50,283
$1,849,587
$1,982,577
12,673
58,259
$2,148,335
44,334
$2,292,622
37,919
$2,447,918
Source: Comprehensive Annual Financial Reports for FY 1999-EY 2003.
1
EY 2002 has been restated for comparison purposes to reflect gross activity in the Gift Fund (included in the General Fund effective EY
2002), rather than net activity.
The ~~~g
;::
is a ~uSsc?~ ~thg~.~_~,I~&~j~~!~d:
~evenpeenuestructure.
:
I:i:
i
: ·:
~
,
G~-iie~i~l
PropertyTc~e$~-:;n ann~i,~d'~oie~: t~ix;
isleli~d ~y the:dountyon theasikSs~va~ut'g`fi~l
and ~b!e
pesrsg~ propertylocatedwithinthe:Cp~u~ty
USOfJ~J~J~J~J~J~J~J~J~J~ary~
1 ~prece~ingthe
fiscal year in whichthe said
t~ Is;:~~:~~ :~~~:prope~~ tax-on~t`di~-:~t~i~i~~
~~ (~F~ju~i~~it~is;l~iii~iin
·the~~li~~j
~~;'1~B~~:~~l-::
value.~!:~pertyisalso
ass68Sed
atlod~of~f~i~.~
~j>~e~i~~
5;'~i~
t~k~isca:f
yearin ~~cfi~~~~v~tl;
value.Realproperty
taxesai~d~j~ 28and
~ pa~~~~~dd~;pe~s~a~i~al
property
taxi~s
is;Oc~dbe~i':~
;~
The peniilty for late Payment is 10% of the amount due, and inter~st on delinquent taxes and penalties accrues at a
rate of 1% per annum for real estate and 5% per annum for personal property. In cases of property on which
delinquent taxes are not paid within three years, the County may sell the property at public auction to pay the
amounts due. There is no legal limit at the present time on the property tax rates which may be established by the
County. Property taxes (including delinquent payments, penalties, and interest) accounted for 67.4% of total
General Fund revenues in EY 2003. However, this percentage does not include the reimbursement from the
Commonwealth of Virginia for a portion of the personal property tax. Including the reimbursement which is
reflected in Intergovernmental revenue, the percentage of revenue from property taxes is 75.3%. A discussion
concerning the Commonwealth's plan to reduce personal property taxes paid by citizens follows.
During its 1998 Special Session, the General Assembly of Virginia enacted legislation that will reduce
personal property taxes applicable to individually owned motor vehicles. The reduction, which will apply to th~ f~st
$20,000 in assessed value, is scheduled to be phased in over a five year period. The legislation states that the
Commonwealth will reimburse local governments for the revenue lost from the reduction in personal property tax
collections. In FY 1999, the first year of implementation, taxpayers were billed for the entire amount of tax levy and
received a refund of 12.5 percent of the tax on the first $20,000 of the value of their personal vehicle from the
Commonwealth of Virginia. Vehicles valued less than $1,000 were refunded 100 percent. In FY 2000, 2001, and
2002 the Commonwealth's plan reduced Personal Property Taxes paid by citizens by 27.5 percent, 47.5 percent,
and 70 percent respectively, with offsetting reimbursements paid to the County by the Commonwealth of Virginia.
In order to balance the State's EY 2003 budget, car tax relief was frozen at 70% of the tax. The original plan was to
increase the reimbursement to 100% in FY 2003. Depending on State revenue growth, the percentage will remain at
70% or increase to 100% as long as funds are appropriated by the GeneralAssembly.
The County's total personal
47
taxcollections
forEY2003were$466.5millioncomprised
of $271.1millionpaidbytaxpayersand$195.4
million reimbursed by the Commonwealth of Virginia.
Other Local Tares -- The County levies various other local taxes, including a 1% local sales tax (collected
by the Stateand remittedto the County),a tax on consumerutilitybills based on consumptionfor gas and electric
services and 22.2% for telephone on bills up to $50 per month for residential classes and 22.2% for bills up to
$1,600per monthfor commercialclasses. Also includedin this categoryis a cigarettetax of 5~ per pack, property
recordation taxes, an automobile license tax, and various business, professional and occupational licenses taxes.
These taxes accounted
for 15.1% of total General Fund revenues
in FY 2003.
Permits, Privilege Fees and RegulatoryLicenses -- The County requires that licenses or permits be
obtainedin orderto performcertainactivitiesin the Countyand that fees be paid for servicesprovidedby certain
Countydepartments.Theserevenuesrepresented1.1%of total GeneralFundrevenuesfor FY 2003.
Fines and Folfeitures-- The sourcesof revenuein this categoryincludecourt fines and penaltiesfromthe
Circuit Court and the General District Court and court fines and costs from the Juvenile and Domestic Relations
District Court. The fines are for traffic violations, misdemeanors and felonies. In addition, the County receives
revenuesfromparkingviolationsas authorizedunderthe CountyCode. Revenuesin this categoryrepresented0.4%
of General Fund revenues
in FY 2003.
Revenuefrom the Use of Moneyand Property-- The principalsourcesof revenuefrom the use of money
andi~~t~t~;~~eneral Fundare·-.Iinterest
~:Gen~ Fundand~api~Project
~~d investments
andminor
~~a~~t~~
~ I~:et-~-~:o~
th~:s~a_l~
aridleaseof~;lll~requfpme?t.l~a~i~l~~.
~'hese
r~;;~il;~~~~t'~;r~e~~
~:~)~o
of :
venues
GeneI'aipurid revepues ihFY 2003.
re~~:t6;~he,G~~
·: .."::::~arg.e~jPor
~erv~ii~es:arid~Recbi;ered
Costs--:~hepjt~Ilcipal;99li~·_cesl~f
Furid,fi;pm
~es: ~r s~ich:~IC~nt) Clerkfeks,schobl:age
childc~ fee~rec~8tibn~,publicati~
s~s ai~rl~
vanous
other
s~ivides
for which
the
County charges a fee. Revenues'in'
this
c~itego'ryrepres;enteg1.9%
of~eneralFund
91~
is~comprisedll~
revenue:~frbm
the~~tecuid
Intergbvemmenial Revenue--- Intergo·venunental revenue:
ie~:frami~ ~d~Falgo;~t:
Rev~ in.~s c~ategory
r~st~~ 13.0~ofG~Fuiid'-~e~ek~g
ii
revenues
m
FY 2003. This percentageincludesthe revenuethat the Countyreceivesfromthe Commonwealthas reimbursement
for the County'spersonalpropertytax. Eachrevenuesourcewithinintergovernnentalrevenueis discussedbelow:
Revenue from the State -- The County is reimbursed by the Commonwealth of Virginia for a
portionof sharedexpensesincludingcertainexpenditures
for socialservices,thesheriffsoffice,courts,theOffice
of the Commonwealth Attorneyand other constitutional offices. Additionally, the County receives a share of the net
profitsfrom the State AlcoholicBeverageControlBoard's liquorsales and Statecontributionsto assist in meeting
law enforcementexpenditures.As mentionedin the sectionconcerningGeneralPropertyTaxes,the Commonwealth
also reimbursesthe Countyfor a portionof its personalpropertytax on vehicles.Includingthereimbursementfor
the County'spersonalpropertytax, revenuesfrom this categoryrepresent11.1%of total GeneralFund revenuesin
the fiscal year ended June 30, 2003. Excludingthis reimbursement,revenuefrom this categoryrepresents3.2% of
General Fund revenue in EY 2003. The County receives a significant'amount of additional State aid in support of
public schooloperations. These revenuesare crediteddirectlyto the SchoolOperatingand SchoolLunchFunds,
however, and are not reflected in the General Fund.
Revenue from the Federal Government -- The principal sources of categorical Federal aid to the
General Fund are Federal grant moneys for air pollution control and Federal Title XX funds primarily used to
purchasefoster care, day care and protectiveservicesfor clients of the Departmentof Family Services. This
revenue category represented 1.9% of General Fund revenues in FY 2003.
Miscellaneous Revenues -- The sources of revenue in this category include the sale of land and buildings,
contract rebates, and other miscellaneous sources. These revenue sources accounted for less than 0.1% of General
FundreveoueioTYZOD~
8~
and Transfers
The following is a discussion of the major classifications of General Fund expenditures and transfers.
Transfer to School Operating Fund - The County transfers monies from the General Fund to the School
Operating Fund to pay the County's share of the costs of operatingpublic schools in Fairfax County. This transfer
represented approximately 47.8% of total disbursements from the General Fund in the fiscal year ended June 30,
2003. The transfer to the School Operating Fund was approximately 75.9% of total receipts of the School Operating
Fund. Other revenues credited directly to the ·School'Operating and School Lunch Funds include revenue from the
Federal Govenunent, the Commonwealth of Virginia, the City of Fairfax (representing tuition of students residing in
the City of Fairfax who attend Fairfax County schools), and other revenue derived locally from sale of textbooks,
school lunches,
etc.
Costs of General County Government -- The County pays from the General Fund the costs of general
County government.
These costs include expenditures for general government administration, judicial
administration, public safety, public works, health and welfare, parks, recreation and cultural, and community
development. This classification was approximately 41.2% of total General Fund disbursements in EY 2003.
Transfer to Debt Service Funds -- The County transfers from the General Fund to the Debt Service Funds
amounts sufficient to pay principal and interest on outstanding County and School debt including general obligation
bonds, South County Government Center Certificates of Participation, EDA and FCRHA lease revenue bonds and
Litera~y
Fundloans.Transfersto theDebtService.Funds
represented
8.7%of totalGeneralFunddiSburS~
EY
in
2003.
Transferto CapitalProject Funds -- The County transfers monies from the General Fund to the Capital
I:~~i;~u
P~thecbst~f.F~n~ifal:~~~.-The
a,?b~':'\;-;:;
·`-;::.
General
Fund
transfer
tothe;C;?i~al
, ;:: :~~::
;FUasce~ fo;fhei~en~ ~nd ~-Fa~fax
~un~'s obllga~~io~~~ion
~e~~~:.-:
befow)reI~sknted0.3%of totalGeneralFunddisb;urs~in~i~ts~ln
Transit
~~~~~ATAjj),~ch
is~iScissed
FY 2003.Otherrevenuesofth~Capi~ ProjectFuiidsconsiSt'
primaiilyof Pondproceeds.
Trartsferto~MetroConstructionand OperationsFund-TThe Countyis amemberjurisdictionof WMATA
a~I~i~d
as 5GC~h
has.a~d to]~ice'ce~ihcapi~gil~l·i~t~ib~itidns
ih:s~p~6·;f,f-the
coi~st~i~Etionj
by'Wlj;j[PI~A.
of;~~i~
transit system to serve the Washington metropolitari area (which includes the County) and to pay a portion of the
deficit incurred by WMATA in the operation of its bus system and rail system. The County generally has used bond
proceeds to fund its capital contributions to WMATA and has transferred monies from the General Fund to pay its
share of the bus and rail operating subsidies. The General Fund transfer to the Metro Construction and Operations
Fund to pay the County's share of the system's operating subsidies represented 0.5% of total General Fund
disbursements in FY 2003. See the subsection herein entitled 'Transportation" for a more complete discussion of
the County's obligations with respect to WMATA.
Transfers to Other Funds -- The County transfers monies from the General Fund to other funds for a
variety of purposes. The General Fund transfer to other funds includes transfers to the County Transit Systems,
Information Technology, Aging Grants and Programs, Community-Based Funding Pool, Housing Programs for the
Elderly, Health Benefits Trust and Equipment Management and Transportation Agency. Transfers to other funds
were
1.5%
of total
General
Fund
disbursements
in FY 2003.
Transfer to Revenue Stabilization Fund - Beginning in FY 2000 the County began transferring monies
from the General Fund to a Revenue Stabilization Fund to address significant revenue reductions during severe,
prolonged economic downturns.
FY 2005 Budget
On April 21, 2003, the Board of Supervisors reaffirmed and approved Budget Guidelines for FY 2005. The
Board directed the County Executive to develop a budget for FY 2005 that limits growth in expenditures and the
School Transfer to projected increases in revenue. In addition the Board directed that all information on the FY
49
revenue and economic outlook should be forwarded to the Board for discussion in Fall 2003 so that guidance
to the CountyExecutiveregardingthe tax rateas wellas the transferto the Schoolscouldbe provided.Balances
identifiedthroughout
thefiscalyear,andnotrequiredto supportexpenditures
of a criticalnature,shouldbe heldin
(16~/~
reserve. In order to eliminate structural imbalances between County resources and requirements, the Board directed
thatbothCountyandSchoolresourcesshouldbeallocatedwithconsideration
forthecontinued
availability
offunds.
All non-recurring
fundsshouldbe directedtowardnon-recurring
usesand recurringresourcesshouldbe targeted
toward recurring expenses.
OnMay24,2004theBoardof Supervisors
adoptedthe realestatetaxrateof $1.13per $100of assessed
value,completing
theadoption
oftheEY2005BudgetPlan.Theadopted
FY2005budgetconforms
to theBoard's
budgetguidelines.Disbursements
fromall activitiestotal$4.65billion,includingGeneralFunddisbursements
of
$2.73billion,a 2.98percentincreaseoverthe FY2004RevisedBudgetPlan. TheEY2005GeneralFundbudget
reflectsrevenuegrowthof $126.1million,or 4.85percent,entirelyfromrisingrealestateassessments.
All other
sourcesof revenueareprojectedat a netdecreaseof $1.1million.SpendingincreasesforCountyserviceshavebeen
held to a modestincreaseof 1.62 percentfor baselinefundingadjustmentsand requirementsassociatedwith new
facilitiesplannedto comeon-linein EY 2005. In accordance
withthe Board'sbudgetguidelinesthe operating
transferincreaseto the FairfaxCountyPublicSchoolsis equalto the projectedrevenuegrowthof 6.57 percent,or an
$81.52millionincreasein the Schooltransfer. The EY 2005 budgetprovidesfor continuingessentialservicesat
currentlevels, includingthe cost of doing business,mandates,contractualobligationsand other existing
commitments,suchas compensationand benefits. In conjunctionwith the adoptionof the EY2005AdoptedBudget
Plan,the Boardof Supervisors
reaffirmedandapprovedBudgetGuidelines
for FY2006. TheBoarddirectedthe
CountyExecutiveto:deve!opa budgetfor EY 2006that limitsgrowthin expenditures
to projectedincreasesin
re~ven~e.
As a resultof actionstakenby the Boardof Superv~sors
on September13, 2004,the FY2005IZ'evised
Budget
Plantotals$5.90billion,including
General
Funddisbursemnt~of
$2.8ibillion.Theincrease
overthe'FY
2005Adopted
B~dget.Plan
·inclLdes'a
nuniberb~`adminisaativa~ustme~
apIjroved
bytheBoarddfSupervisors!
~:
of cerfainitenis i~i~i~ro"d
grantbalances;carryover
in FY 2604 but ndfyet~e~xpended,anti the carryover df unexpended project and
CAPITAL
IMPROVEMENT
PROGRAM
In connectionwith the County's adopted comprehensiveland use plan, the Fairfax County Planning
Commission
annuallypreparesandsubmitsto theBoardof Supervisors,
a capitalimprovement
program(the"CIP")
for theensuingfive-yearperiod.TheCIPis designedto balancethe needforpublicfacilitiesas expressedby the
Countylanduse planwiththe fiscalcapabilityof the County·toprovidefor thoseneeds.
The CIP is an integralelementof the County's budgetingprocess. The five-yeardocumentserves as a
generalplanningguidefortheconstruction
of generalpurpose,schoolandpublicutilityprojectsin theCounty.The
CIPis updatedandapprovedby the Boardof Supervisors
eachyear. Thisannualreviewprocesspromptscareful
attentionto thedevelopment
of reliablecapitalexpenditure
andrevenueestimatesandthetimelyscheduling
of bond
referenda.
In connectionwith the CIP process,the Boardof Supervisorshas adoptedcertainpolicyguidelinesfor the
development
andfinancingof theCIP. Theseguidelines
includeself-imposed
restrictions
ontheissuanceofgeneral
obligationbondsdesignedto keep GeneralFund supporteddebt serviceexpenditures
less than 10%of total
Combined General Fund disbursements, and to maintain the ratio of net bonded indebtedness to the market value of
taxable property in the County at a level less than 3.0%.
The Board of Supervisorscontinuesto review thoroughlythe County's debt programin light of current
fiscal conditionsand capitalneeds. Currently,new bond sales are limitedto an averageof $200 millionper year
with a maximum limit of $225 million in a single year. On November 4, 2003, County voters approved
$290,610,000of additionalbondsto financeschoolfacilities. Referendatotaling$325millionare plannedfor parks,
libraries,transportation,
andhumanservicesin 2004.An additionalreferendum
of approximately
$350millionin
2005 to finance school facilities is anticipated. The CIP for Fiscal Years 2005-2009 (with future Fiscal Years to
2014) was approvedby the Boardof Supervisorson April 26, 2004. The Countyprogramincludesnew
1~
renovation and renewal of school facilities, parks, housing development, revitalization, storm water
management, public safety and courts, libraries, human services, solid waste, sewers and transportation. Significant
capital construction activity totaling $2.18 billion, including regional parks, state and federal transportation projects
and water supply projects, is undertaken within the County of benefit to County residents, but not managed or
funded directly by the County. The total capital construction activity planned within the county totals $4.05 billion
over the next five years.
RETIREMENT
SYSTEMS
The County administers four separate public employee retirement systems that provide pension benefits for
various classes of County employees ~ucational
Employees Supplemental Retirement System, Police Officers
Retirement System, Employees' Retirement System and Uniformed Retirement System). In addition, professional
employees of the Fairfax County School Board participate in a plan sponsored and administered by the Virginia
Retirement System.
The Fairfax County retirement systems investments are managed by independent professional investment
managers. Investments in derivatives are not made for speculative purposes but may be used by investment
managers to gain access to markets, to reduce risk, or to reduce transaction costs. Investment Managers are
prohibited from using leverage and options.
For further information regarding the County's retirement systems, see "Basic Financial Statements -Notes to:Financial Statements - Note.G " in: AppendixTVt
CoNTINi=EiuTL1~Asr~rri~l~S
TheCounty
is:C~~~
~d~~
AND CLAIMS
··
~~!~u~
·
~ otherclaio~thatansemtheordina~v
c~e :
~f it8ope~iatio;ns.
SkeNoteK:intheCount~'s
I-~i~an6i;ai;
S'lat~~i;t~
ki~p~il·~:~v'to
thi~ofi~cial'
~~t~t~i~jfor
details as of the end of fiscal year 2003.
APPROVAL
OF
LEGAL
PROCEEDINGS
Legal matters incident to the authorization and issuance of the Bonds are subject to the approval of Sidley
Austin Brown 8~Wood LLP, New York, New York, Bond Counsel, the proposed form of whose opinion is included
herein as Appendix VI.
TAX
MATTERS
Opinion of Bond Counsel
In the opinion of Bond Counsel, except as provided in the following sentence,interest on the Bonds will
not be includable in the gross income of the owners of the Bonds for purposes of Federal income taxation under
existing law. Interest on the Bonds will be includable in the gross income of the owners thereof retroactive to the
date of issue of the Bonds in the event of a failure by the County or the school board of the County to comply with
applicable requirements of the Internal Revenue Code of 1986, as amended (the "Code"), and their respective
covenants regarding use, expenditure and investment of the proceeds of the Bonds andtimely payment of certain
investment earnings to the United States Treasury; and no opinion is rendered by Bond Counsel as to the exclusion
from gross income of the interest on the Bonds for Federal income tax purposes on or after the date on which any
action affecting such covenants is taken upon the approval of counsel other than such frrm.
In the opinion of Bond Counsel, interest on the Bonds will not be a specific preference item for purposes of
the Federal individual or corporate alternative minimum tax. The Code contains other provisions that could result in
tax consequences, upon which Bond Counsel renders no opinion, as a result of ownership of such Bonds or the
inclusion in certain computations (including, without limitation, those related to the corporate alternative minimum
of interest that is excluded fipm gross income. Interest on the Bonds owned
by a corporation will be included
in thecalculationof the corporation'sFederalalternative
minimum
taxliability.
Original Issue Discount
Theexcess,if any,of the amountpayableat maturity
of anymaturity
of theBondsovertheissueprice
thereof constitutes original issue discount. The
amount
oforiginal
issuediscount
thathasaccrued
andisproperly
allocableto an ownerof any maturityof the Bonds
withoriginalissuediscount(a "DiscountBond")will be
excludedfrom gross income for Federal incometax purposes to the same extent as interest on the Bonds. In
general,
theissue
price
ofamaturity
oftheBonds
isthefirstprice
atwhich
asubstantial
amount
ofBonds
ofthat
maturitywas sold (excludingsalesto bondhouses,
brokers
orsimilar
persons
ororganizations
acting
inthecapacity
of underwriters,
placement
agents,or wholesalers)
andtheamountof originalissuediscountaccruesin accordance
witha constant
yieldmethodbasedonthecompounding
ofinterest. A purchaser's adjustedbasis in a Discount
Bond is to be increased by the amount of such
discount
forpurposes
ofdetermining
taxable
gainorlosson
the sale or other disposition of such Discount accruing
Bonds
forFederal
income
taxpurposes.
Aportion
oftheoriginal
issue
thecorporation's
Federal
alternative
minimum
taxliability.
Inaddition,
original
issuediscount
that
each
discount that accrues
calculation of
accrues
in
ineachyeartoanowner
ofa Discount
Bondwhich
isa corporation
willbeincluded
inthe
yeartoanowner
ofa Discount
Bond
isincluded
inthecalculation
ofthedistribution
requirements
of certainregulatedinvestmentcompanies
andmayresultinsomeofthecollateral
Federal
income
taxconsequences
discussedbelow. Consequently,ownersofanyDiscount
Bond
should
be
aware
that
the
accrual
oforiginal
issue
discountin eachyearmayresultin an alternative
minimum
taxliability,additional
distribution
requirements
or other
collateral
Federal.income
taxconsequencesalthough
theowner
ofsuchDiscount
Bond
hasnotreceived
cash
attriblitable
tolsuc~
ongi~iissueciisdduntin
S~~year;
The accrual of originalissue discountand its effect
on the redemption,
sale or otherdispositionof a
Discbudt
Bond
thatisnoipu~c~ ~:~ iaitiala,~hg~t
the;firstpriceat ~i~hich
a subst~ial amoutitof such
Bondsis
soldiothep~icmaj~:be
detkfhii~cc~i~g
fiirii~i~s
~hat~d~ffer
frd~m
thoSe;iescfit;cxl''g~~.l
iiin~er
of a Discount Bond should consult his #tx aavisors with respect to
thedeterminatibn for'Federal'incor~e ia;e
purpo'sescS~f
the amountof o~ginslissue,alsdoalif~ith 'espectti~such~
Disdqunt~Bond
and withresIieCf;to-St~t~te
nd
Idealtaxconseque~lcies
of owningand dispo~ir;g:b;f:s~h
DiscohnfBdn~ci.
Original Issue remium
The excess, if any, of the tax basis of Bonds to a purchaser(otherthan a purchaserwho holds such Bonds
as inventory,stock in trade or for sale to customersin the
ordinary
courseof business)
overtheamount
payable
at
maturityis "bondpremium."Bondpremiumis amortized
over
the
term
of
such
Bonds
for
Federal
income
tax
purposes (or, in the case of a
bond
withbond
premium
callable
prior
toitsstated
maturity,
theamortization
period
and yieldmay be requiredto be determinedon the basis
of anearliercalldatethatresultsin thelowestyieldonsuch
bond). Ownersof suchBondsare requiredto decreasetheiradjustedbasisin suchBondsby the amountof
amortizable bond premium attributable to
yearsuchBonds
areheld.Theamortizable
bondpremium
on such Bonds attributable to a taxable eachtaxable
year
is
not
deductible
for
Federal
income
tax
purposes;
however,
bond
premium on such Bonds is treated as an
offsettoqualifiedstated
interest
received
onsuchBonds.Owners
of such
Bondsshouldconsulttheirtaxadvisors
withrespectto the determination
for Federalincometaxpurposesof the
treatment of bond premium upon sale or otherdisposition
of suchBondsandwithrespectto the stateandlocaltax
consequencesof owningand disposingof suchBonds.
Collateral Tax Consequences
Ownershipof tax-exemptobligationsmayresultin collateral
tax consequences
to certaintaxpayers,
including, without limitation,
financial
institutions,
property
andcasualty
insurance
companies,
certain
foreign
corporations doing business in
theUnited
States,
certain
S Corporations
withexcesspassive
income,
individual
recipients of Social Security or railroad retirement
taxpayers who may be deemed to have
benefits,taxpayerseligiblefor theearnedincometaxcreditand
incurred
or continued
indebtedness
to purchase
or carrytax-exempt
obligations.Prospectivepurchasers
of
the
Bonds
should
consult
their
tax
advisors
as
to
the
applicability
ofanysuch
collateral consequences.
~ I:if
Legislation
affecting
municipal
securities
is constantly
beingconsidered
by theUnitedStatesCongress.
can be no assurance that legislation enacted after the date of issuance of the Bonds will not have an adverse
effectonthestatusof theBonds.Legislative
or regulatoryactions
andproposalsmayalsoaffecttheeconomicvalue
of the tax exemption or the market price of the Bonds.
FINANCIAL
ADVISOR
TheCountyhasretained
PublicFinancial
Management,
Inc.,Arlington,
Virginia,
asfinancial
advisor(the
"Financial
Advisor")in connection
withtheissuanceof theBonds. AlthoughtheFinancialAdvisorassistedin the
preparation
andreviewof thisOfficialStatement,
the FinancialAdvisoris not obligatedto undertake,
andhasnot
undertaken
to make,an independent
verification
or to assumeresponsibility
for theaccuracy,
completeness,
or
fairness of the information contained in the Official
Statement. The FinancialAdvisor is a financialadvisory,
investment
management
andconsulting
organization
andis notengaged
in thebusiness
of underwriting
municipal
securities.
RATINGS
The Bondshavebeenrated"
" by FitchRatings("Fitch")," " by Moody'sInvestorsService,Inc.
("Moody's")
and" " by Standard
BrPoor'sRatingsServices,
a divisionof TheMcGraw-Hill
Companies,
Inc.
("Standardgr Poor's"). TheCountyrequestedthatthe Bondsbe ratedandfurnishedcertaininformation
to Fitch,
Moody'sand Standard&Poor's, includingcertaininformationthat is not includedin this OfficialStatement.
Theseratingsarenota recommendation
to buy,sellor holdtheBonds.Generally,
ratingagencies
l~ase
theirratings
onsuch~i~ls andinformation,
aswellasinvestigations,
studies
ari~assunipiion$.of
thera~ng
agenciestSuch:
ratingsmay~~e~
ch~gepat~ timeandno assurance
canbe giventh~~
willnotberevised
downwaid
or:vi~itiid~awii'-e~y
:iiyariyoi~;~lof suchratinga~e~cieS,
if,~int~ielj~di~me~nt
of anyo~--~i~,:
circumstances
so·warrant. Suchdirc~imsta~nces
iiiayinclude;withoGtiir~it~iti6ii,'
cfange'ihor una;vaila~jility
of
information
relating
totheCounty.Anysuchdownward
revision
orwithdrawal
ofanyofsuchratingsmayhavean
adverseeffect~;~the~
price:ofthe'Bonds.
SALE: AT COMPETITIVE
BIDDING
TheBondswillbe offeredfor saleat competitive
biddingon datedetermined
pursuantto theprovisions
of
theNoticeof Sale. AftertheBondshavebeenawarded,theCountywillissuean OfficialStatement
in finalformto
be datedthe dateof the award. TheCountywilldeemthe OfficialStatementin finalformas of its date,andthe
OfficialStatementin finalformwillbe a "FinaiOfficialStatement"withinthe meaningof Rule 15c2-12of the
Securities
andExchange
Commission.
TheOfficial
Statement
in finalformwillinclude,
amongothermatters,
the
identityof thewinningbidder(the"Underwriter"),
theexpectedsellingcompensation
to theUnderwriter
andother
information
ontheinterest
ratesandoffering
pricesoryieldsoftheBonds,allassupplied
bytheUnderwriter.
CERTIFICATE
CONCERNING
OFFICIAL
STATEMENT
Concurrently
withthedelivery
of theBonds,theChairman
of theBoardof Supervisors
andtheCounty
Executive
of theCountywillcertifythat,to thebestof theirknowledge,
theOfficialStatement
didnotasof its date,
and does not as of the date of deliveryof the Bonds,containany untruestatementof a materialfact or omitto statea
materialfact whichshouldbe includedthereinfor the purposefor whichthe OfficialStatementis to be used,or
whichis necessaryin orderto makethestatements
containedtherein,in the lightof thecircumstances
underwhich
they were made, not misleading. Such certificatewill also state, however,that the Chairmanof the Board of
Supervisors
andthe CountyExecutiveof theCountydid not independently
verifythe information
indicatedin this
OfficialStatementas havingbeenobtainedor derivedfromsourcesotherthanthe Countyandits officersbutthat
they have no reason to believe that such information is not accurate.
Any statements in this Official Statement involving matters of opinion or estimates, whether or not
expressly so stated, are intended as such and not as representations of fact. No representatign is made that any of the
estimates
will
berealized. ?~E~
S~s~--h
~C\"
FUTURE
FINANCI~
INFORMATION
L~C
-L3 November
f~ ,v.rc`N~On
?LZ Cb'V\L~.crL~
~ -CC-7t-51~1rl3L~L~L~L~L~L~L~L~L~L~L~L
~C41ij
10,
1994,
the
Securities
tl·y. ~IFL
andjExchange
Commissio~adopted
in
~final
form certain
155\··~1
·-~
~amendments(the "Amendments")
to Rule 15c2-12uniierthe SecuritiesExchangeAct of 1934,as amended.In ''gbXs-1-~P
general,the Amendments
prohibitan underwriter~f~~m
purchasingor sellingmunicipalsecuritiessoldon or after 6~-r,bo·~JI!
July 3, 1995,suchas the Bonds,unlessit has determinedthat the issuerof suchsecuritiesand/orotherpersonsJ~y~r\J
/;)C.
deemed to be material "obligated persons" have committed to provide (i) on an annual basis, certain financial c~~sYlv~
informationand operating data ("Annual Reports"), and, if available, audited financial statements, to each ~/P".'~,~
Nationally
Recognized
Municipal-Securities
Information
Repository
(a "NRMSIR")
.*3 Y1~L7
and the relevant
state"r;
information
depository
(ifany)an~(ii)notice
ofvarious
events
described
intheAmendments,
ifmaterial
("Event
r, ~
Notices"),
to eachNRMSIR
or the~qaic~l2al~
S~-ities
Rulemaking
Board("MSRB")
andto anysuchstate8-~n3e )
informationdepository~
i~~LI,
to ~
J~
B.r~·-3
·(tp~;): E,t~~i ~i~-;i
1,5~~
Rr~LI^S.k7~
C~L.S-M
~I~f~
_?All·-·~·-i
'` intheContinuing
TheCounty
willdL
covenant
Disclosure
Agreement
(theformofwiiich
appears
inAppendix
i:
the date of delivery of
vI) to: be~didated
ari~to a"yvi~gi~iadepoSi~
for the
benefit
that has
of the
holders
of.the
provideto
Ihan'nil~h~
Bonds
to
6eed-later
each
310f
eachyearcommencing
Ma~cfi
3i, 2CiOS,
AnnualRepo~swithrespectto itself,a`sis~~ ~Si~ilarly,
theCountywill
Ijrbvide'Event'
Noticeswithespe~t ib the:Bomisto:e8chSuchNRMSIR,the ~ISRBandf~ an'y'iTirgini~i~
iriformatiori
'-c~F~he
County
has:~ f~;to:~~y
theP;~'~n~ilme~;;i`ts.i~t;es
I.
the Bonds
.i-~TRMSIR
filing
astoitsgeneral
obligation
bonds
wi~ ~e~Cl~s~lu~~ngs
with LI
~ii;Fits ~Imuaf
~·~y~
r·aCI:
reI~~I~ahdifin~r;c~~a~f~iiliItsIr;t~i~~rated;'se~ef
:System's
Enterpri;e
Fund
forthefigdal
ye;ir
~Juneapproitimately
j0,i99~
pursuant
to~nanil~~niade
incor~necti~
r~_~
with its SewerRevenueBonds, Series 1996,was:ima~e~~
30 days late, and timelynoticeof such late
.::;to each of the ~j~s:
'~he Counfjr's sewei filingsfi~rfist~a~!
; Ifiiingwas ~g~ven::,
3ea~:~.2001,
wer~~im~ymade:witheach of the ~tEiMSIRs.
~2:4~2043
Alpnril~
PRELIMINARY
OFFICIAL
STATEMENT
DEEMED
FINAL
The distribution
of this Preliminary
Official Statement has been duly authorized
by the Board of,
I.
Supervisors of the County. The County deems this Preliminary Official Statement final as of its date within the;:~!:
meaning of Rule 15c2-12 of the Securities and Exchange Commission except for the omission of certain pricing and ' "'`
other infonnation permitted to be omitted by Rule 15c2-12.
BOARD
OFSUPERVISORS
OF
FAIRFAX
By:
COUNTY,
VIRGINIA
,Chairman
~Z~J~l~a~z
~iC5?
\j,,~7
~3;~ ~LS.Iw
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Records
aerkofmeCirtuitCourt
GeneralDsnrin(oort
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II
MON'KiOMERY COCINTY,
MARYLAND
L~UDOUN
COUN~Y,
VIRGINIA
KDISTRlhuofC~LUMBIA
~IR~,le
PRINCE
~W!L'-I~I
P~ln~;sr~~~
.
VIRGINIA
CHARLES
STAFFORD
cou
COCINTY,
MARYLAND
NTY,
VIRGINIA
LOCATIONS OF POLITICAL JURISDICTIONS
IN THE WASHINGTON METROPOLITAN AREA
II-I
.: I : :· :·
This page intentionally left blank.
:-I:::·
III
;~t·
4`J\
i
o.w.
~
rrwm.
o~pl
'I
Up~.~.
~f
,,~
Y-Ee
T~X
I/
T-i
I·;fe
r·
~i
r·
Colleges
OaorOa
Mason
Vnlv~nHy
Northern Vlrglnla Community Conege
Untversity of Vlrglnls
Nathem Vlrglnla Oreduete Center
Vlrglnle Pdytachnle Institute end SLete Unlvenlty
Northen Vlrglnle Graduate Center
Covernmeotsl
~C. Hespltats
Access (Ambuletory-Emergency)
Fair Oak, Hospital
Felrfax Hospital
Mount Veman Hwpltel
Restan Hospital
Centers
Commercial
Fd~ax CountyOovemmentel
Center
Fnnconle
Gavemmentel
Center
Mason Oovemmentel Center
Mcleen
Govemmencsi
Center
Mount Vemon Oovemmenlsl
Center
NorthCountyGovemmanteiCenter
PuMlcSafetyCenter
West Sprln~neldGovemmenLal
Center
IIT-l
Areas
Annandale
Belle~ Cromroads
Centrevme
Oakton
DuHeslChanUlly
Fal~ax
Center
FortBelvloc
Franconla
Hemdon
McLean
MerrMeld
Reston
RlchmcndHighway
SevenComers
Shlr(eyHigm~ey
SprlngnJd
TysonsComer
Newlngton
AevensworVI
Vlenna
Appendir TV
KPMG
LLP
2001M
Street.
\PJashington,
NW
DC 20036
Independent Auditors) Report
The Board of Supervisors
County of Fairfax, Virginia:
Wehaveaudited
theaccompanying
financial
statements
ofthegovernmental
activities,
thebusiness-type
activities,
the aggregate
discretely
presented
component
units,eachmajorfund,andthe aggregate
remaining
fundinformation
4$theCounty
ofFairfax,
Virginia
(theCounty),
asofandfortheyearended
June 30 2003, which
thes
statementsare
ihe
iespoii~Bilithe
basic
of~iifax's
financ~i~al~Ctements~,jThese bstSic.
man~g~
~Ourlf~
~i~~~:j
1$
Ofthediscretely
pres~ico~~ts:of ~ Fairfax
m
respectively,
6ft~ ass~s~ reiren~i~
ot the~ig~B~egatk
.discretely
~pre~ c~~
linitS.
~Ose
financialstatements
were~
audi~r~ dther;audito~s
'~Se';~~ifhereon havg;~~~i~~
~_;~l~d
·I:--I
:(
as it relatesto theamountsincl·l~ for thediscreteiy
presented
s~lely'ont6e're~brti:oftheQthei~i~~~ors.,·:
component units of FCRHAI isbased
Weconducted
ourauditin accordance
withauditing
standards
generally
accepted
in theUnitedStatesof
America.
Thosestandards
requirethatweplanandperform
theauditto obtainreasonable
assurance
about
whetherthebasicfinancial
statements
arefreeof materialmisstatement,
Allfinancialstatements
of the
discretely
presented
component
unitsoftheFCRHA
wereaudited
inaccordance
withauditing
standards
geneially
accepted
in theUnitedStatesofAmerica.
Anauditincludes
examining,
ona testbasis,evidence
supporting the amounts and disclosures in the basic financial statements. An audit also includes assessing
the accountingprinciplesused and significantestimatesmade by management,as well as evaluatingthe
overall basic financialstatementpresentation,We believe that our audit and the reports of the other
auditorsprovidea reasonablebasisfor our opinion.
In ouropinion,basedonourauditandthereportsofotherauditors,
thebasicfinancial
statements
referred
to abovepresent
fairly,in allmaterial
respects,
therespective
financial
position
of thegovernmental
activities,
thebusiness-type
activities,
theaggregate
discretely
presented
component
units,eachmajor
fund,
andtheaggregate
remaining
fundinformation
oftheCounty
ofFairfax,
Virginia,
asofJune30,2003,
and the respective changes in financial positionandcashflows,whereapplicable,
thereoffor theyearthen
i:
endedin conformity
withaccounting
principlesgenerallyacceptedin theUnitedStatesof America.
~PCI~G U-P
'j
October 31, 2003
1111
·-·······-~~,.
........~.., I·-1
i ~embar(irnlor ~PUGI·llernalanal a gunnscoo(w~:a
:
OFFAIRFAX,
VIRGINIA
Statement
of Net Assets
June 30, 2003
Primary Government
ASSETS
Equity in pooled cash and temporary inves~nents
8
Total
Governmental
Business-Type
Primary
Activities
Activities
Government
693,718,244
Cashin banks
772,971,993
79,253,749
22,998,597
22,998,597
investments
Receivables
(netofallowances):
Accounts
Accrued interest
24,531,053
24,531,053
654,976
property
taxes:
Delinquent
Notyetdue
Businesslicensetaxes - delinquent
Loans
Notes
Other
716,067
61,091
19,492,398
1,704,872,746
g
19,492,398
1,704,872,746
2,151,125
15,530,000
2,151,125
15,530,000
4,960,234
15,152
4,960,234
15,152
Due from intergovernniehtal uhits (n~t dfal)bwances)i
Property
taxrelief:
Delinquent
6,507,178
Not yet. due
40,497,44?
Other
Due from primary government
Due from component
41,871,927
Certificatesof deposit- performancebonds
821,199
76,326,342
Cashwithfiscalagents
Land
Capital
held
3,349,068
327,813
1,581,400
Equity in pooled cash and temporary investments
Investments
(~68.664)
3,021,255
.
176,163,009
59,590,714
1,765,166
1681~ti~l
Inventories
ofsupplies
Restrictedassets:
19,09?,271
1.765,1:·
units
fnterfund
receivables
Otherassets
6,507,178
176,163,000
1,549
140,853,415
1,58?,9~4_9
182,725,342
1,737,032
1,737,032
821,199
24,767,970
101,094,312
for sale
assets:
Non-depreciable:
Land
Construction
in progress
Depreciable:
Equipment
Library
collections
327,546,804
21,741,560
17,511,358
128,723,901
223,426,139
9,951,322
39,451,246
Purchasedcapacity
Buildings
andimprovements
785,439,035
Infrastructure
415,525,167
Accumulated
depreciation
Accumulated
amortization
Deferred bond issuance costs (net of amortization)
Total
assets
568,080,954
749,795,061
4.1
See accompanying notes to the financialstatements.
IV-2
549.464
150,465,461
233,377,461
39,451,246
568,080,954
1,535,234,096
415,525,167
(458,710,126) (316,660,990)
(53,575,391)
1,743,105
345,058,162
1
1,044,849
059.855
(775,371,116)
(53,575,391)
5
2,787,954
319
ii
A
Total
Total
Component
Units
Reclassifications
Reporting
(See Note A-12)
Entity
ASSETS
290,846,269
7,057,118
1,063,818,262
7,057,118
22,998,597
Equity in pooled cash and temporary investments
Cash in banks
Investments
Receivables
12,253,343
-
76,768
36,784,396
792,835
Accrued interest
Property
19,492,398
1,704,872,746
2,151,125
8,295,701
462,918
30,799,528;
(net of allowances):
Accounts
taxes:
Delinquent
Notyetdue
Business license taxes
15,530,000
Loans
13,255,935
478,070
Notes
Other
- delinquent
Duefrd~i·1':i
~rso~einini~tal u~its(rietof alidda~nceS):
Piopeyt~:
ta~:r~~t':
6,507,178
Delinquent
176,163,000
;i: .~Soty~ti-due
$d,39b;14L:ll~
I Id~tti~~
:·1:
8,730153~'
6,730,3;39due from:primarygovernment
1,765,1661Pue fr~,m~dniporient'unii~~
--
4,563,916
7,912,984
- · 2,2011665
-
Interfund
Restricted
15,225,912
10,145,396
-
197,951,254
11,882,428
-
119,109,486
652,676
18,015,174
1,473,875
2,595,172
2,595,172
receivables
Inventoriesof jupplies
OtheiasS@~tj
assets:
Equity in pooled cash and temporary investments
Cash with fiscal agents
Certificates of deposit - performance bonds
Investments
Land held for sale
Capital
assets:
Non-depreciable
331,133,123
309,594,921
676,191,285
460,060,382
:
Land
Construction in progress
Depreciable:
152,484,434
24,385,069
-
385,861,895
63,836,315
Equipment
Library collections
568,080,954
Purchased
1,904,795,887
-
3,440,029,983
415,525,167
(780,680,207)
(1,556,051,323)
(53,575,391)
478,298
2,350,530,471
capacity
Buildings and improvements
Infrastructure
Accumulated depreciation
Accumulated
amortization
3,266,252Deferredbondissuancecosts(netof amortization)
7,915,139,790
Total assets
continued
IV-3
OF FAIRFAX,VIRGINIA
Statement
of Net Assets
June 30, 2003
Primary
Government
Total
Governmental
Business-type
Activities
Activities
Primary
Government
UABIUTIES
Accounts
payable
and
Accrued salaries
accrued
liabilities
g
and benefits
46,758,918
28,142,846
Contractretainages
Accrued interest
payable
Due to primary
53,200,779
659,991
28,802,837
2,610,056
3,737,361
6,347,417
9,545,799
4,462,321
14,008,120
government
Due to component
units
1,866,247
Matured bond principal and interest
Deferred
6,441,861
payable
1,866,247
174,455
174,455
revenue:
Property
taxes
Other
Performance
not yet due
1,905,968,500
1,905,968,500
31,155,471
73,063,597
and other deposits
31,155,471
73,063,597
Long-term
liabilities:
I
Portion due or payable
within one year:
Generalobii~atiqnboiiiispayable, n~t:
Revenue
Notes
136,011,870
bonds payable,net
4,553,476
471010,116;
Landfi:li
clbsu~.and:pd~it~l~~;;c;;~ii4aCioi~
Obligations
2,357,048.
under capital ledSes
due
or payable
after
one
48,159,512
25,357,648
8,234,668
141721,454
2,842,789
-
14,7211454
2,842,789
yeai:
General obligation bondspayable,
net
1,464,7981886;
Revenue bonds ~dyab~le,net: ;
Notes
1,149,396
8,234,068
Insurance and benefit claims payable
Other ;
175,6921445
i
4611633,0~7
1,464,798,886
63~,325,502
payable
Compensated
absences payable
Landfill closure and postclosure obligation
Obligations under capital leases
Insurance and benefit claims payable
28,812,652
37,379,250
37,904,218
13,618,677
Other
Total liabilities
NET
16,331,461
payable
Compensated absences pdyable
Portion
136,011,870
11,777,985
704,468
-
29,517,120
37,379,250
37,904,218
13,618,677
7,841,477
4,102,064,315
490,566,440
7,841,477
4,592,630,755
932,499,218
651,624,011
1,584,123,229
ASSETS
Invested
Restricted
in capital assets,
net of related
debt
for:
Grant programs
Sewer improvements
and nitrification
Repair and replacement
Community
5,976,956
facilities
134,216,343
centers
5,152,731
5,976,956
134,2·16,343
5,152,731
Housing
Capitalprqects
Debt service
18,200,000
10,196,204
Unrestricted (deficit)
(891.343,756)
Total net assets
See
accompanying
$
notes
to the
financial
70,485,149
statements.
IV-4
105,456,857
901,493,415
18,200,000
10,196,204
(785,886,899
971,978,564
~
A
concluded
Total
Total
Component
Units
Reclassifications
Reporting
(See Note A-12)
Entity
UABILITIES
49,554,037
75,249,165
9,973,632
521,250
1,765,166
102,754,816 Accounts payable and accrued liabilities
104,052,002 Accrued salaries and benefits
-
16,321,049
14,529,370
1,765,166
Contract retainages
Accrued interest payable
Due to primary government
1,866,247
174,455
Due to component
Deferred
12,014,572
1,345,858
-
-
units
Matured bond principal and interest payable
1,905,968,500
43,170,043
revenue:
Property taxes not yet due
Other
74,409,455 Performance and other deposits
Long-term liabilities:
Portion due or payable
136,011,870
790,154
within one ye;ar:
General obligation bonds payable, net
17,121,615
Revenue bonds payable, net
24,806,356
24,8061356
Notes payable
17,314,095
65.473,607
Compensated absences payable
17,881,233
Obligations under capital leases
36,121,772
Insurance and benefit claims payable
25,357,048
9,647,165
21,400,318
1331945
Landfill
closure;a:nd
bostci~~i;
~'·~i;i'isabio-~
2,976,734
Other
Portion due or payable
1,464,798,886
·
after one year:
General qbligatiq? bonds payablel:net
24,025,202
659,350,704
56,277,744
56,277,744
Notes payable
40,531,656
Compensated absences payable
37,379,250
Landfill closure and postclosure obligation
11,014,536
-
18,331,888
-
10,741,077
17,074,839
361,980,999
-
Revenue bonds payable, net
56,236,106
Obligations under capital leases
24,359,754
24,916,316
4,954,611,754
. Insuranceand benefitclaimspayable
Other
Totalliabilities
NET
1,840,784,373
(1,044,623,708)
ASSETS
21380,283,894Invested in capitalassets, net of related debt
Restricted
5,976,956
134,216,343 ~
700,000
700,000
5,152,731
10,821,684
14,525,912
1,058,230
(14,525,912)
-
120.659,273
1,059,149,620
1,988,549,472
-
10,821,684
18,200,000
11,254,434
for:
Grantprograms
Sewer improvements and nitrification facilities
Repair and replacement
Community
centers
Housing
Capitalprojects
Debt service
393,921,994 Unrestricted(deficit)
2.960,528,036Totalnet assets
IV-5
OFFAIRFAX,
VIRGINIA
Statement ofActivities
For the fiscalyearendedJune 30,2003
Charges
Functions
for
rams
government:
Primary
Governmental
Ex
Program Revenues
Operating
Capital
Services
Grants
and
Grants
and
ContributionsContributions
activities:
Generalgovernmentadministration
3udicial administration
$ 118,511,161
5,112,194
35,243,062
15,968,676
1,941,377
20,762,866
414.698.92234.072,120
35.205.772
2.540,565
132,457,898
Health and welfare
Communih/
development
Education
- for Public Schools
Interest on long-term debt
Total
governmental
activities
BusinesS-type activities:
PubliC~~ls~
Total:busineSS-typk
activities
Total
nt
Public ~~~do~ls
Redevelopmentand HousingAuthority
66,543,218 9,687,204 14,673,013
383,744,665
43,281,914
129,981,338
118,518,084
6i051,431
1,142,845
134,530,817 29,420,854 5,210,353
Parks,recreation,andcultural
1,308,402,963
12,345,534
3,051,984
81,994,507
2,728,102,079 200
200,450,407 203,931,755 32,611,0~-
126.953,197
_ ~,149,558
126~
2 55
77,510,685
19,058,739
63,365,305
,.fuUlpritv
General
7
308~5~9;965
Zb'3,931~75~1~9~iT~
1,658,519,296
1~792~4~i9~
7,244,52
:1 14958
76
63,500,701
Ecbn6rii.i·iti~!i;~l~p~entnutho;i~v
7~5,177
Total
units
27,165,350
10?,397,834
4,681,750
37,604,475
3,012,835
23,734,774 ' .140;002.309'
~
revenues:
Taxes:
Real property
Personal property
Business
licenses
Local sales
and
use
Consumers utility
Motor vehicle decals
Recordation
Occupancy, tobacco, and other
Grants and contributions not restricted
to specific programs
Revenuefrom the use of moneyand property
Share of Commonwealth'slotteryproceeds
Revenue from primary government
Other
Special item - gain on sale of land
Total general revenues and special item
Change
in net assets
Net assets, 3ulyl, 2002
Net assets, ~une 30, 2003
See accompa
n)~ngnot~i;P~p~=='~'====;
IV-6
j
92,797
7:in3
a
A-i
Net (Expense)
Revenue
and
Changes
in Net Assets
Primary Government
Governmental
Business-Type
Activities
Activities
Total
Total
Primary
Component
Government
Units
Functions/Programs
Primary
government:
Governmental
(111,457,590)
-
1,488,480
(111,457,590)
-
1,488,480
activities:
-
General
government
-
~udicial
administration
(342,880,465)
(342,880,465)
Public
safety
(41,554,463)
(41,554,463)
Public
works
(210,481,413)
(210,481,413)
Health
and
(87,554,076)
(87,554,076)
(111,323,808)
-
(1,305,350,979)
-
Parks,
(1,305,350,979)
-
Education
(81.994.507)
(81.994.507)
(2,291,108,821)
welfare
Community
(111,323,808)
development
recreation,
r
Total governmental
Business-type
(11,558,782)
~11,558,787)
(11,558,787)
cultural
activities
activities:
Public works -Sewer
(11,·~8,~87J~
(2,291,108,821)
and
- for Public Schools
Intereston long-termbebt
(2,291,108,821)
-
administration
Totalbusiness~tl~i~~.acti.vitie~
(2,302;667,608)'
-
Total
primary
government
units:
:Coriiperi~ri~?
"';"
(1,473;929,027)
(3,689,256)
Redevelopment
(36,242,554)
:
Park
i'
and
Authority
Housing
Authority
::
Economic
[jevelop~eht
i:j\uthqrity
-i-.~·;
!-·1(7.b35;ii7)
-
·-
Public Schools
(1,5?0,896,014)
Totalcomponentunits
General
revenues:
Taxes:
1,396,210,347
-
1,396,210,347
-
Real
273,447,219
Personal
property
94,744,725
94,744,725
Business
licenses
143,641,853
-
85,892,727
143,641,853
-
85,892,727
19,052,623
-
27,044,633
-
Local sales
Consumers
19,052,623
-
27,044,633
17,788,607
Motor
197,619,418
21,841,712
4,365,535
17,788,607
197,619,418
26,207,247
-
281,543,994
1,226,913
4,773,038
1,362,783,747
9,666,618
17,560,640
2,294,844,504
3,735,683
4,365,535
(7,193,252)
17,560,640
2,299,210,039
(3,457,569)
and
use
utility
vehicle
decals
Recordation
Occupancy,
Grants
8
property
273,447,219
1,659,994,310
139,098,296
and
tobacco,
contributions
not
other
restricted
to specific programs
Revenue from the use of money and property
Share of Commonwealth's
lottery proceeds
Revenue
from
primary
government
Other
- Special item - gain on sale of land
Total general revenues and special
Change
in net assets
66,749,466
908,686,667
975,436,133
1,849,451,176
Net assets,
70,485,149
901,493,415
971,978,564
1,988,549,472
Net assets, 3une 30, 2003
IV-7
and
~uly i, 2002
item
j
OF]FAIRFAX,
VIRGINIA
Balahce
EXHIBIT A-2
Sheet
Governmental Funds
June 34 2003
Nonmajor
Gal
ASSETS
Equityin pooledcash and temporary investments
9
Receivables (net of allowances):
Fund
Total
Governmental
Governmental
Funds
Funds
254,375,448 358.682,305 613,057.753
Accounts
Accrued
interest
Property
13,296,926
354,009
taxes:Delinquent
Notyetdue
19,492,398
11,095,215
290.306
644,315
2,151,125
Notes
2,151,125
15,530,000
Due from intergovernmental
Propertytax relief:
15,530,000
4,960,234
units (net of allowances):
4,960,234
Delinquent
6,507,178
Duefroincomponent.units
Interfund
receivables
Inventories
ofsupplies
25,561,939
173,463
3,658,653
OtherasSets
· -::·
53,900]:, :
Eqijiti·inpooledc8shandteiri~o~'aiy
in~'~Sm7eni~;
Cash withfiscalagents
14,935,504
1,591,703
40!497,443
1;7651i66
3~58,ij53
1,420,320
47,771
101,671
41,87i,9i7
584,032
:·certificalt;ej of:'depb~
-'jjErfdirmancli1~9
::' :::
Investments
176,163,000
1,420;326
::
B
6,507,178
176,163,000
Other
::
I
I~
Notyetdue
de'stri~t~d~,jet;:
; :;
41,871,927
966,000
1,550,032
~l~iP9:
I
lasseh
UIBIUTIES~D-FV~
8*U\NtE5
2~283.843
Uabilities:
Accounts payable and accrued liabilities
Accrued salaries and benefits
Contract
retainages
$
26,425,211
22,920,261
16,256,815
4,468,058
Accruedinterest payable
2,610,056
Due to component units
1,028,167
Interfundpayables
1,771,310
Property taxes not yet due
Other
2,610,056
1,028,167
94,937
1,905,968,500
Performance
andotherdeposits
36,249,
111
694 30
029,223
liabilities
Fundbalances:
Reserved
42,682,026
27,388,319
1,866,247
3,583,846
174,455
Maturedbond principaland interest payable
Deferred revenue:
Total
33,422,341
3,583,846
174;455
1,905,968,500
69,671,452
10
767
73.063
72,007,442~i2~8~5~
for:
Encumbrances
Inventories
ofsupplies
Long-term
19,032,301
1,420,320
receivables
Certaincapitalprojects
Unreserved, reported in:
General
Special
43,501,693
62,533,994
20,490,234
20,490,234
1,420,320
103,220,585
103,220,585
181,380,468
16,897,074
181,380,468
16,897,074
fund
revenue
133,004,492
funds
Debt service funds
Capital projects funds
133,004,492
Total fund balances
Totalliabilities
andfundbr'
i·
19,492,398
1,704,872,746
1,704,872,746
Businesslicensetaxes - delinquent
Loans
24,392,141
2
See accompanyingnotes to the financialstatements.
457 113
486
454289
297.307
607.746.978
2,735.783.643
continued
IV-8
i;
OE"
FAIRFAX,
VIRGINIA
EXHIBIT
A-2
Reconciliation
of the Balance Sheet to the Statement of Net Assets
Governmental
Funds
concluded
June 34 2003
Fund balances-
Total governmentalfunds
Amounts reported for governmental
$
activities in the statement
607,746,978
of net assets (Exhibit A) are different because:
Capital assets used in governmental fund activities are not financial resources and, therefore, are not reported
in the
funds:
Non-depreciable
assets:
Land
8
325,608,116
Construction in progress
Depreciable
21,741,560
assets:
Equipment
Library collections
Buildings and improvements
161,821,164
39,451,246
769,836,885
Infrastructure
415.525.167
Total capital assets
1,733,984,138
Less accumulated depreciation
(412.297.905)
1,321,686,233
Some of the County's receivables will not be collected soon enough to pay for the current period's expenditures
and, therefore, are reported as deferred revenue in the funds:
Delinquent taxes (net of allowances):
Property
Business
Sales
·
$
24,685,111
license
2,156,644
and use t8xes
11,202,4?3
Other
471.803
Other long-term assets are not available to pay for current period expenditures
;38,515,9Si
and therefore,
are
not reported in the funds.
1,478,4?3
casts inc;rrebfrom ti7e iaaua~ite df Idng-term d8btare recognized as expehiditures in th'e fund Statements,
but are deferred in the government-wide statements.
Internal service funds are used by management
The assets
statement
and liabilities
of
net
of the internal
service
to provide certain gooas and services to governmental
funds
are included
in governmental
activities
1,743,105
funds.
in the
assets.
Assets:
currentassets
g
capitalassets
Less accumulated
Liabilities
82,898,394
79,145,813
(46,412,221)
(36,025.203)
depreciation
79,606,783
Long-term liabilities related to governmental fund activities are not due and payable in the current period
and, therefore,
are not reported in the funds:
General obligation bonds payable, net
Revenue bonds payable, net
Compensated absences payable
Landfill closure and postclosure obliga~on
Obligations under capital leases
8
(1,600,810,756)
(178,245,921)
(73,159,195)
(62,736,298)
(46,138,286)
Other
(10,684,266)
Accrued interest on long-term debt
(8.517.632)
Net assets of governmental activities
(1.980.292.354)
g
IV-9
70,485.149
OFFAIRFAX,
VIRGINIA
Governmental
a
E~ITA-3
Statementof Revenues,Expenditures,
and Changesin FundBalances
BI
Funds
For the f~calyear endedJune 30,2003
Nonmajor
REVENUE~--~--~-
GeneralFund
Total
Governmental
Governmental
Funds
Funds
Taxes
$ 2,041,189,079
Permits,privilegefees, and regulatorylicenses
Intergovernmental
27,781,451
Charges
forservices
322,110,298
Fines
andforfeitures
5,273,489
Gifts, donations, and contributions
157,604,088
6,200
21,462.49;
Localmatching
grants
415,759,761
116,956,434
11,059,673
useofmoney
andprope~y
costs~2~Zlror~~e
Recovered
38,625,237
93,649,463
40,647,654
Developers'contribu~ons
13,595,615 2,054,784,694
10,843,786
11,065,873
5,758,057
5,758,057
25,336,155
3,873,664
7,207,526
fetal revenues
920.120
EXPENDITURES
2.470.444
e
7,597,376
294
259,782,504
1
4
i
r
12,481,015
7,597,376
d
3
2,7301226
Current:
General government administration
3udicial
administration
Publicsafety
Publicworks
94,946,860
32,445,476
374,718,524
HeBlth
andwelf~ie
58,241,853
Community
development
Parks,re~r~ation,
andcultural
237,431,727
49,793,866
Educatidn
_forPublje
Sc~oojs
Capital
dutlay:
13,965,809
1,642,065
30,875,394
108,912,669
34,087,541
405,593,918
98,889,251
1571131,104
143,083,415
72,271,160
380;515,142
122,065,026
i:
72,052,471
37~467,072_ 169,5191543
11168,875,261/ 138,097,076 r,.306,972,343
General government administration
3uaicial
PublicSafet~
Publicworks
Healthandwei~: ~'
Community
development
Parks,recreation,
andcultural
Education
- forPublicSchools
241,482
2,194,716
6,997
41i,944
118.941
20,820,903
3,846,477
1,603,049
9,912,626
4,578,204
23,555,4i0
4,05?,153
1,681;·622
9,934,033
10,731,579
1,873,190
1,873,190
929,360
139,634,724
140,564,084
233
111
81,716.065
802,883,140
2,734,567
206,676
78,573
21,407
6,153,375
Deb~service:
Principal
2,436,198
retirement
Interestandothercharges
Total
Excess(deficiency)
of revenuesover(under)
81 9.450
2,901.995
expenditures
OTHER
FINANCING
SOURCES
(USES)
Transfers
in
Transfersout
3,925,732
General
obligation
bonds
issued
(349,294,037)
Leaserevenuebondsissued
Capital leases
Refunding
bondsissued
487,929
Paymentsto refundedbondescrowagent
Totalother
SPECIALITEM
351,542,120
355,467,852
206,884,788
206,884,788
75,625,920 -
75,625,920
(6,373,815) (355,667,852)
1,077,364
~183,893,333
sources uses
344
6
Proceeds from the sale of land
Net change in fund balances
183.541,600)
629.108,110
18,200,000
Fundbalances,~ulyi, 2002
26,452,013
126,793,442
Increase in reserve for inventoriesof supplies
Fundbalances, ~une 30. 2003
211 58
Seeaccompanying
notestothefinancial
statements.
~
1,565,293
183,893,333
11
284,227~734
18
104,207,474
350,082,391
130,659,487
476,875,833
454,289,865
607.746.978
21
continued
6. i 1
IV-IO
~~;~~I~_-;il~;;·-:-·-
_:.;.__-----
--.-~_.~_..__~_______
OFFAIRFAX,VIRGINIA
EXHIBITA-3
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances
to the Statement
concluded
ofActivities
Governmental
Funds
For the f~cal year ended June 311,2003
Net change in fund balances - Total governmental funds
8
130,659,487
Amounts reported for governmental acb'vities in the statement of activities (Exhibit A-i) are different because:
Governmental funds report: capital outlays as expenditures. However, in the statement of acb'vities, the cost of
capital assets is allocated over their estimated useful lives and reported as depreciation expense.
Capital outlays
8
54,684,186
Less depreciation expense
(54,276.383)
407,803
In the statement of activities, the gain or loss on the disposition of capital assets is reported. However, in the
governmental funds, only the proceeds from sales are reported, which increase fund balance. Thus, the
difference is the depreciated cost of the capital assets disposed.
(6,702,888)
Donations of capital assets increase net assets in the statement of activities, but do not appear in the
governmental funds because they are not financial resources.
17,568,039
Some revenues will not be collected for several months after the fiscal year ends, hence, they are not considered
"available" revenues and are deferred in the governmental funds. Deferred revenues increased (decreased)
by this amount
Delinquent
this year:
taxes:
Property
$
2,062,788
Business license
(262,260)
Sales and use taxes and other taxes
1,237,512
Recovery from contractor
Qther
(2,000,000)
89.798
i
1,127,838
;
1·
-
The issuande of long'term'debtis reported as financing sourcejlin the sovemmental fund; aritl th~s, increcise
fund balance. In the government-wide statements, however, issuing bebt~
inc;eases~ong-tenhiiadiiities
in the statement of net assets and does not affect the statement of activities. The following were: issued:
ser$s zoo3Adef;ndins:aon~d;
B ~ (183;89j,353)
Series 20038 General Obligation Bonds
EDA Lease Reyenue~Bonds
(206,884,788)
- LauielH111 Projects~
(75,625,920)
Principal amounts of new dapit~il leases
11,565,2931
(467,969,334)
The net amount of costs Incurred from the issuance of long-term debt are recognized as expenditures in the
fund statements, but are deferred in the government-wide statements.
913,112
Repayment of the principal amounts of long-term debt is reported as an expenditure or as an other financing use
when debt is refunded in governmental funds and thus, reduces fund balance. However, the principal payments
reduce
the liabilities in the statement
of net assets
and do not result in an expense
Principal repayments
of matured bonds and loans
Payment to escrow agent to refund bonds, less
81,307,225 reported as interest expense
8
on long-term
debt is reported
as an expenditure
of activities.
182,234,375
Principal payments of capital leases
Interest
in the statement
134,179,425
6,384.659
in the governmental
322,798,459
funds when it is due.
In the statement
of
activities, however, interest expense is recognized as the ~interest accrues, regardless of when it is due. This timing
difference
in interest
Accrued
Accrued
reporting
interest
interest
is as follows:
on bonds and loans
on capital leases
8
(166,906)
118,358
Other
307,806
259,258
Under the modified accrual basis of accounting used in the governmental funds, expenditures for the following are not
recognized until they mature.
In the statement of activities,
they accrue. The timing differences are as follows:
however,
Landfill closure and postclosure costs
Compensated
9
absences
tley
are reported
as expenses
and liabilities as
3,033,434
(3,010,289)
Other
(1,700,380)
(1,677,235)
Internal service funds are used by management to provide certain goods and services to governmental funds.
The change in net assets is reported with governmental activib'es.
Changein net assets of governmentalactivities
6,351.144
B
IV-II
3.735,683
OFFAIRFAX,
VIRGINIA
Statement
of Net Assets
Proprietary Funds
June 30, 2003
Business-Type
Activities-
Governmental
Enterprise Fund
Integrated
Activities -
Sewer
Internal
Service
ASSETS
Current
assets:
Equity
inpooled
cashandtemporary
investments
$
Investments
Accounts
Accrued
138,912
receivable
61,091
Duefromintergovernmental
units(netof allowance)
Interfund
Other
299,089
of supplies
assets
Total
Noncurrent
current
assets
assets:
Restricted
10,661
19,093,271
receivables
Inventories
80,660,491
19,298,597
receivable
interest
79,253,749
327,813
1,549
1,600,935
1,306
118,036,070
82,711,394
assets;:
Equiiy
inpoOl~casha ndtempbra;.
inues~ents
Cash with:fiScalagehts
i40.853A15
.
·
i~7looo
Investments
.: ~lrestric~edassets
. i
Cap;ltal adsetj:
Land
--~o'stru~ibn^iri
.~;bgresS
..
PY"r~ed~apaca
Buildings bn'd Im~prb\ieme^~ts
:·
Accumulated
depreciation
Accumulated
noncurrent
net
assets:
Total other noncurrent
·-·
1
;.·
.
:
1
ses.asa.9541,602,.. 150
749;,795,06i
noncurrent
Totalassets
·.
1,044,849
4,744,849
assets
assets
1.274,192,449
..
.---.---
See accompanying notes to the financial statements.
IV-12
I~
(46,412,221)
32,733,592
1
3,700,000
Deferred bond issuance costs (net of amortization)
c
~....':i;,·::
(53,575,391)
1,103,826,215
Investments
Total
"
1,938,688
(316,660,990)
amortization
Total capital assets,
Other
17,511,358
128 7~3,901
-
32,920.592
A-4
Business-Type
Activities-
Enterprise Fund
Integrated
Sewer
Governmental
ActivitiesInternal
Service
UABILITIES
Current
liabilities:
Accounts payable and accrued liabilities
Accrued salaries
8
and benefits
Contract retainages
Interfund payables
Accrued interest payable
Revenue bonds payable, net
4,076,892
659,991
754,527
3,737,361
168,664
4,462,321
11,777,985
Compensated absences payable
1,149,396
Insurance and benefit claims payable
Total current liabilities
Noncurrent
6,441,861
28,397,579
1,651,415
14 721 454
21,394,368
liabilities:
Revenue bonds payable, net
Compensaited absences payable
461,633,057
704,468
Totalnoncurrentliabilities
33
Insura~ca
~hab;eiiefit
tlaims'
~gyii;6ie
:
Invested
190,080
in capita! assets,
-·:
--·
net of related
. ·
651,624,011
debt
1,012,158
14
1
32,733,592
Restricted
-.---.~C::.:·--Bna:ni~~~ion~aci~ities
improv~~ze~\:
: Sewer
Debtservice
134,216,343
:·
10,196,204
unrestrict~ri:!
- ·105,456;857. :; :;;- I:~i~5.873~93~
Totalnet assets
$
IV-13
901,493,415
79;606,783
OF FAIRFAX,VIRGINIA
Statement of Revenues, Expenses, and Changes in Net Assets
EXHIBITA-5
Proprietary Funds
For the fiscal year ended June 30, 2003
Business-Type
Activities-
Governmental
Enterprise
Integrated
Fund
Activities -
Sewer
Internal
System
OPERATING
Service
Funds
REVENUES:
Sales of services
$
81,506,869
Charges for services
140,333,558
Other
Totaloperatingrevenues
OPERATING
81,506,869
172,504
140,506,062
18,666,356
11,649,401
21,123,809
3,029,100
EXPENSES:
Personnelservices
Materialsand supplies
Equipment operation and maintenance
31,622,292
Risk financing and benefit payments
63,467,509
Depreciation and amortization
32,043,471
9,209,347
Professional consultant and contractual services
40,262,876
6,396,452
Other
To~xeeoses
_
Op~~ia'tin~'·inCor~~~
(Iq~s)
· _. .-;.T -.42;696
1_d2,622,164:
: :_:iS4,94i~Z~
;: ~:::::
':.;i~'i:~:l~j23~j
::::
NONOPERATING REVENGES IEXPENSS):
16,642;689
'
481,255
Intergdv~ii~in~R~a~ revenue
Interest
I
revenue
4,319,270
Interestexiiericit·~
;:
AniortitBtion
e~pense fdr bbnbissuaneecosts
·
Gain on dispbsal of capital assets
382,669
~4,251199~)
;;(79;097)
_ _ 46,265
1;;..;
253,618
Totaln_di;ibpratin~:
revenues:iexeensesa : - ·'
Income (loss) before Contribu~Onsand transfen
(13,956,849)
Capital contributions
6,151,144
6,763,597
Transfers in
1,900,000
Transfersout
(1,700,000)
Change in net assets
(7,193,252)
6,351,144
Totalnet assets, ~uly1, 2002
908,686,667
73,255,639
Total
netassets,~une
M,2003
See accompanying notes to the financial statements.
9
IV-14
901.493.415 79.506,783
1
OFFAIRFAX,
VIRGINIA
Statement
EXHIBIT
A-6
of Cash Flows
Proprietary
Funds
For the f~cal year ended June 30, 2003
Business-Type
Activities-
Governmental
Enterprise Fund
Integrated
Activities -
Sewer
Internal
System
CASH
FLOWS
FROM OPERATING
Service
Funds
ACTIVITIES
Receiptsfromcustomersand users
Receiptsfrominterfundservicesprovided
Paymentsto suppliersand contractors
$
81,044,506
140,567,144
(50,555,642)
Payments
to employees
(18,535,324)
Claimsand benefitspaid
-
Payments
forInterfund
servicesused
Netcashprovided
byoperating
activities
11,953.540
(14,244,248)
(21,008,575)
(60,776,340)
(25,349,452)
19,188,529
CASH FLOWS FROM NONCAPTTAL FINANCING ACTIVITIES
Paymentofloanto GeneralFund
(630,809)
Transfers to other funds
Transfers from other funds
(1,700,000)
1,900,000
Netcashused~y nonap~in~i~
Availability
fees received
30
:.[
Ihtersbveinm~eiita~:I
reveii.lie
i~c~ii;eci
Principal
paymentsonsewerrevenuebo~ds
·
Interest paynielit~ on sewer.revenue bdrids
Procee.ds
fidmsaleofcapital
assets
Purchase
of capital assets,
other than purchased
?6164~~8e
481,255
:L10,?49,20flS
1;:
(23;4571465)
49.664
Acquisitioh
qfbardias~~~apac!~:
7~0;541
(9,237,271)
(14,368,789)
capacity
13
~'· Netca;h:
used~ ~~~~18~:~esl
. :; .
:1
CASH
FLOWS
FRiO~
`r~(~li~j~ji~~]i~I~;~~~IS'I
(9541652)
:
of ~e;t~ict;ed
-P:u~hes~sr~::;
in;jktniei~i~s`
Purchases of investments (net)
Interestreceived
(1,069,000)
4,370,577
Netcashprovided
byinvesting
activities
2,346,925
Netincrease(decrease)incash and cash equivalents
Cashand cash equivalents,3uly1, 2002
Cashandcashequivalents,
~une
30.2003
$
387,907
387,907
(36,816,658)
256,923,822
10,688,897
69,971,594
220,107.164
80.660,491
Reconciliation of operating income (loss) to net cash provided by operating activities:
Operating
income(loss)
$
(21,115,235)
5,514,857
Adjustmentsto reconcileoperating income (loss) to net cash provided by operating activities:
Depreciation
and amortization
Change
in assets
32,043,471
Decrease In accounts receivable
172,538
(Increase)in intergovernmental
receivables
(460,815)
(Increase)ininterfund
receivables
Decrease in inventoriesof supplies
(Increase)
in other
175,095
(1,549)
assets
Increasein accountspayableand accruedliabilities
1,223,247
Increase in accrued salaries and benefits
89,326
Increasein interfundpayables
-
Totaladjustments
to operatingincome(loss)
Netcashprovided
byoperating
activities
Noncash investing,
capital, and financing
B
33,068,775
11,953,540
activities:
Capitalcontributions
- sewerlinesand manholes
$
6,763,597
957
-JJ~-~-353
Increase in fair value of investments
See accompanying
9,209,347
and liabilities:
notes to the financial statements.
IV-15
(111,452)
834,302
(1,081)
3,437,121
86,633
46,264
13,673,672
19,188,529
OF FAIRFAX,VIRGINIA
EXHIBITA-7
Statement of Fiduciary Net Assets
June 30, 2003
Pension Trust
Agency
Funds
-Funds
ASSETS
Equity in pooled cash and temporary
investments
Cash collateral for securities lending
Accounts receivable
Accrued interest and dividends receivable
Receivable from sale of pension investments
Investrnents,
at fair value
10,185,689
230,557,553
2,279,307
12,263,652
67,179,361
3,073,812,051
2,528,980
76,225
793
38,225,793
Equipment
2,273,200
Total assets
3,396,277,613
$
43,104,991
UABIUTIES
Accounts payable and accrued liabilities
Accrued salaries and benefits
Payable for purchase of pension investments
Liabilities
for
collateral
received
lending agreements
Liabilities u'nder reimbursement
Interfund payable
.
under
4,630,680
46,730
131,666,204
139,909
securities
230,557,553
agreements
10,800
Obligationsunder ca pitaI leases
1,008,591
366,9~·1,967
N~T
Held·in
tiustfoi.pensiori
benefits
41,952,139
4,352
$
3,029,365,646
See~accbmpany`~n'g:notes to the ~na'ncia! stati~m'ehts,
IV-16
8 ~ ::·-;·43,1~04,991
OFFAIRFAX,
VIRGINIA
Emwrr A-8
Statement of Changes in Plan Net Assets
Pension
aust
Funds
For the fiscal year ended June 30, 2003
Pension
Trust
Funds
ADDITIONS
Contribu~ons:
Employer
$
67,934,751
Plan members
41,887,319
Total contributions
Investment
109,822,070
income:
From
investment
activities:
Net appreciation in fair value of investments
Interest
Dividends
Total income from inves~nent
Less
investment
activities
55,534,960
75,664,963
27,707,560
158 907 483
activities
expenses:
Management fees
11,905,221
Other
1,350,316
Total investment activities expenses
.13,255,537
Netincomefrom.inilejtmentaci~vit/es
From securitie~~!~ing activities:
Securities
lending
1Income
3,028i684
less securities lending exp~nSes:
Boirdwei-re;6;7t~-ej;';::
:
Fianageri7entfees: ~
Total securities lending activities expenses
258.289
..
Netincoml
fibifi:5RcurlS8s
le~ng.a~tie5 - -
::
.
Net:investmentincome'
i
Benefits
Refunds
; ,Totaladditipas.:..;:-_I.
. ..-.: -·;.. ; . _-
·
,,_1~-:·,;·;.:::·
. ~sg;osSCs68
:
129,109,755
4,210,215
of contributions
Administrative expenses
1,279,581
Totaldeductions
134,599,551
Netincrease
121,488,017
Net assets, ~uly i, 2002
2,907,877,629
Netassets,~une30,2003
See accompanying
8
notes to the financial statements.
IV-17
3,029,365,646
OF FAIRFAX,VLRGINIA
Combining Statement of Net Assets
Component Units
June 30, 2003
Redevelopment
Public
and Housing
Park
Schools
Authority
Authority
ASSETS
Equity in pooled cash and temporary
Cash
investments
$
255,490,249
20,147,838
in banks
Receiva
bles
(net
of allowa nces):
Accounts
Accrued interest
252,529
42,131
11,955,680
30,655
Notes
462,918
Due from intergovernmental
units
Due from primary government
Inventories of supplies
30,799,528
5,035,364
4,563,916
1,503,003
assets
Restricted
618,716
assets:
Equity in pooled cash and temporary
CaSh with fiscal agBnts
Certificates of deposit - performance
Investrnents
Land
45,134
3,982
8,295,701
Other
Other
15,208,182
7,057,118
investments
bonds
15,225,912
10,145,396
652,676
:
'
-
held for sale
Capital assets:
Non-deprecia
190,148
17,8251026
2,595,172
ble:
Land
46,818,517
-~onsputioP-incilo~i~ss:
31,963,418
252,351,188
291,484,?23
21674,619: ;1~436~!9:::
137,82~11169
2,689,740
Depreciable:
Equ'p"7e"t~:
Library collections
Buildings and improvements
Accumulated depreciation
Deferred bond issuance costs (net of amortization)
Total assets
See accompanying
24,385,069
1,574,799,966
(611,742,783)
g 1,759,749,878
notes to the financial statements.
IV-18
148,731,021
(67,625,003)
180,585,813
111958,963
181,264,900
(101,305,726)
478,298
409,995,941
A-9
Economic
Development
Authority
Total
Component
Units
ASSETS
290,846,269 Equityin pooled cash and temporary investments
7,057,118
Cash in banks
Receivables
12,253,343
76,768
8,295,701
462,918
191,972
(net of allowances):
Accounts
Accrued interest
Notes
Other
30,799,528 Due from intergovernmental units
6,730,339 Due from primary government
4,563,916
618,716
Inventories of supplies
Other
assets
Restricted
15,225,912
assets:
Equity in pooled cash and temporary investments
10,145,396 Cajhwithfisc~~g~erits
652,676
Certiiica~e~s
of~deposit performancebonds
18,015,174 invej;tml~ents
2,595117;? ~nght~!Cl.fq'·S~le
;=-.Caitalassets:
Non-de;~cia~~
331,13311?3
309,594,921
Land
Conjtri~ction-'in
]pib$6~s_
Oepreciable:
13,56? ~
152,484,34
Equipm~qnt
i413~51dt~~; : -: Libraryc~rlections
1,904,795,887
Buildingsand improvements
(6,695) (780,680,207)
Accumulateddepreciation
478.298 Deferred bond issuance costs (net of amortization)
198,839 2,350,530.471
Totalassets
continued
IV-19
OF FAIRFAX,VIRGINIA
Combining Statement of Net Assets
Component Units
June 30, 2003
Redevelopment
Public
and Housing
Schools
Authority
Park
Authority
LIABILTTIES
Accounts payable and accrued liabilities
Accrued salaries and benefits
8
37,530,983
9,255,392
2,680,691
72,949,174
318,288
1,876,702
Contractretainages
Accrued interest payable
Due to primary government
9,696,960
Deferred revenue
Performance and other deposits
5,155,085
115,290
1,093,747
1,101,004
5,765,740
129,564
14,568,816
315,114
10,363,616
392,233
475,040
14,442,740
2,248,439
Long-term
1,656,679
liabilities:
Portion due or payable
within one year:
Revenue bonds payable, net
Notes payable
Compensated absences payable
Obligations under capital leases
Insurance and benefit claims payable
Other
Portion due or payable after one year:
9,647,165
211400,318
133,945
Revenuebondspayable,net
12,204,566
r(loteS payable
56,277,744
ComPensated absences 'payabie
Obligations undercapital
leases
payable
8,929,274
441,550
ABS~B
Invested in capital assets, net of related debt
Restricted
1,612,023
;
1.544,839
Totalliabilities_
11,820,636
18,331,88810,741r077
Other
_Nti
276,672
521,250
108,487
15,530,000
; 209,066.030_
.5.09_8.717 . 57.487,9~4
1,447,692,187
59,046,522
334,038,797
for:
Repair and replacement
700,000
Housing
10,821,684
Capital projects
14,525,912
Debtservice
1,058,230
Unrestricted (deficit)
Totalnetassets
See accompanying
102,991,661
$ 1,550,683,848
notes to the financial statements.
IV-20
15,618,890
2,185,018
85,487,096 352,507,957
A-9
D
concluded
Economic
Total
Development
Component
Authority
Units
LIABIUTIES
86,971
105,001
49,554,037 Accounts payable and accrued liabilities
75,249,165 Accrued salaries and benefits
9,973,632
521,250
1,765,166
12,014,572
1,345,858
Contract retainages
Accrued interest payable
Due to primary government
Deferredrevenue
Performance and other deposits
Long-term liabilities:
Portion due or payable
104,607
within one year:
790,154
24,806,356
Revenue bonds payable, net
Notes payable
17,314,095
Compensated absences payable
9,647,165
Obligations under capital leases
21,400,318
:
133,945
Insurance and benefitclaims payable
Other
Portioll due or -payable after one year:
24,025,202
Revenue bonds payable, net.
11,014,536
Compeiisated absences payable
56,277,744; . Notesp~Ji~ble.
31,689
18,331,888
Obligations under capital.leases
::
-
,328,268._
17,074,839
·Inslilan~~and bepefit claim'Sp~jlable'
Other
361,9.80,999
-
,,Totalliabilities ,-;__·
NET ASSETS
6,867
1,840,784,373 Invested in capital assets, net of related debt
Restricted
-
(136,296)
700,000
10,821,684
14,525,912
1,058,230
for:
Repair and replacement
Housing
Capitalprojects
Debt service
120,659,273 Unrestricted (deficit)
(129,429) 1,988,549,472Totalnetassets
TV-21
OF FAIRFAX,VIRGINIA
Combining Statement ofActivities
Component Units
For the fiseni year ended June 30, 2003
Program
Charges
for
Functions/Programs
Public
Grants
Expenses
Services
81,658,519,296
77,510,685
Capital
and
Grants
and
Contributions Contributions
Schools:
Education
Redevelopment
102,397,834
4,681,750
and Housing Authority:
Community development
Park
Revenues
Operating
63,365,305
19,058,739
63,500,701
27,600,350
37,604,475
3,012,835
Authority:
Parks, recreation, and cultural
Economic Development
Authority:
Community development
Totalcomponent
units
92,797
7,035,177
81,792,420,479
General
124,169,774 140,002,309
7,787,382
revenues:
Grants
and
Revenue
Share
contributions
from
the
use
not restricted
of money
of Commonwealth's
Revenue
from
primary
and
to specific
programs
properly
lottery proceeds
government
Other
Total general
revenues
ChangeinnetagSets
Net assets, ~uljl i, 2002
Net
----
assetf
3une
30
2003
-
See g~i5v~~j~ji~~iii~
riljt~·~.t9:th~~'fjna:~B'i
st8'tellri~~.
k
IV-22
A-10
Net (Exnense)
Revenue
Redevelopment
and Housing
Public
Schools
Authority
and Changes
Park
Authority
in Net Assets
Economic
Development
Authority
(1,473,929,027)
(3,689,256)
(35,807,554)
-
274,938,165
467,350
4,773,038
1,303,653,903
7,141,029
1,590,973,485
llj;d441~~
1,433,639,390
Units
(1,473,929,027)
(3,689,256)
(1,473,929,027)
Total
Component
(35,807,554)
(7,035,177)
(3,689,256)
(35,807,554)
560,240
6,170,829
199,323
52,096,923
2,525,589
- 3,085,829
(7,035,177)
7,032,921
-·58,467,~25
.7,032,92_1-
329,848,436
(127.173)
(6iiS,4ij)
86.090,523
(2,:256)
(7,035,177)
(1,520,461,014)
281,108,994
1,226,913
4,773,038
1,362,783,747
9,666,618
,·~,659,5ci9,310
1'3~9109i3,2~6'
1,849,451,176
g 1,550,683,848 . 85,487,096. 352~7,957_ -._ ..~29,429~ ..1,988,549,422
IV-23
C:
YSz`
rC'
G)
O
~P
~t~\
r"
·r
r
ra
'3i
Ic
~·a,
OF FAIRFAX,VIRGINIA
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2003
A.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The County of Fairfax, Virginia, (the County) is organized under the Urban County Executive form of
government las defined under Virginia law). The governing body of the County is the Board of Supervisors
(the Board), which makes policies for the administration of the County The Board is comprised of ten
members: the Chairman, elected at large for a four-year term, and one member from each of nine supervisor
districts, elected for a four-year term by the voters of the district in which the member resides. The Board
appoints a County Executive to act as the administrative head of the County. The County Executive serves at
the pleasure of the Board, carries out the policies established by the Board, directs business and
administrative procedures, and recommends officers and personnel to be appointed by the Board.
The financial statements of the County have been prepared in conformity with generally accepted accounting
principles (GAAP) as applied to government units in the United States ofAmerica. The Governmental
Accounting Standards Board (GASB) is the accepted primary standard-Setting body for establishing
governmental accounting and financial reporting principles. The County's significant accounting policies
are described
i.
below.
Reporting Entity
Asrequired
byGAAP,
theaccbmpanymg'.~io~:~ prebei~tihe
finan~i~dataofihe'
uni'ts. The financialdata of thecbmppnent
County(the primarygovernment)
units arein~dedin ~,~·t~i's
asic financialstatemenfsbecauseofthesi~gnifi~~c~of t~ieir :·::-
and'its'component's
operational
or ~na~i~ill
i~i~lafi~~n~hips
with~iti~e
i~~ntyl:~e ~bunt~:~~·its Coii~li~I~ieiit
dhits~:~;::-
together referred tq herein as the reporting entity.
Blended Component Units
Blended component units are entities that are legally separate from the County but that are so closely
related to the County that they are, in essence, extensions of the County. The blended component
units that are reported as part of the primary government are:
Solid Waste Authority
of Fairfax County (SWA) - The SWA is considered
a blended
component unit because the Board of Supervisors comprises the Board of Directors of the
SWA and has the ability to impose its will on the SWA. The SWA is authorized
under the
Virginia Water and Waste Authorities Act and was created by the Board on June 29, 1987.
The SWA has financed the construction of a solid waste to energy facility, which is
contractually owned and operated by a commercial entity in accordance with agreements
between the County, the SWA, and the commercial entity. Certain assets of the commercial
entity are reported by the SWA in an agency fund, the Resource Recovery Fund.
The County has assumed the responsibility for the management oversight of the arrangement
between the SWA and the commercial entity and for providing sufficient solid waste to result
in a financially viable operation; this activity is reported in a special revenue fund of the
County, the Energy Resource Recovery Facility Fund. Separate financial statements are not
prepared for the SWA.
IV-25
District One - The Boardof SupervisorscreatedSmallDistrictOne, whichis located
withinthe DranesvilleMagisterialDistrict,in 1970to providefor the constructionof a
community
centerandtheoperationof its social,cultural,educational,
andrecreational
facilities. This smalldistrictis reportedas a separatespecialrevenuefund of the County,the
McLeanCommunityCenterFund, becauseit is gov~medby the Board,whichhas the ability
to imposeits willonthe smalldistrict.Separatefinancialstatementsarenotpreparedfor
Small
District
One.
SmallDistrictFive - The Boardof SupervisorscreatedSmallDistrictFive, whichis located
within the Dranesville and Hunter Mill Magisterial Districts, in 1975 to provide for the
constructionof a communitycenter and the operationof its social,cultural,educational,and
recreational facilities. This small district is reported as a separate special revenuefund of
theCounty,theRestonCommunity
CenterFund,becauseit is governedby theBoard,which
has the abilityto imposeits will on the smalldistrict. Separatefinancialstatementsare not
prepared for Small District Five.
Discretely Presented Component Units
The columnsfor the componentunits in the financialstatementsincludethe financialdata of the
County'sothercomponent
units.Theyarepresentedin separatecolumnsto emphasizethattheyare
legallyseparatefromtheCounty.Se~parate
financialstafements
of thecomponent
unitscanbe
obtainedby
writingto~the
'Financia~:~Re~pb;r'tirig
Division,
Department
ofFinance,12000Gavernment
Center
Fairfax, 1Virginia22035.
Parkway,Suitei~ite.214,
All of.the
have
cdmporient:lmits
a fiscal
year
endofJune30. Thediscr~tely;prese~
comIj~ntunitsare:
Fairfax~:~
s~
1PuGlic
~riois~ _~~School~ is ~onsi~le for.
- . ·:"?-;1
.';'1".
;"';-~dIica~i~
;yithiniheCoui~ty.
TheSclfiobi
Boardis ele~ted
by
elem~ntary
~ -';i·
secoridaj
Countyvoters.PublicSchoolsis fis~~~ dependenton the County;PublicSchools
:operatroniii~t;i~
~~~d
's
~:~ County sgeneral
1SSUCs
obligation debt for Public Schools' capital projects;
FairfaxCountyRedevelopmentand HousingAuthority(FCRHA)- FCRHAplans,
coordinates,and directsthe low incomehousingprogramswithinthe Countyunderthe
VirginiaHousingAuthorities
Law. FCRHAwasapprovedby a voterreferendum
in
November1965and was activatedby the Boardof Supervisorsin February1966. FCRHAis
a politicalsubdivision
of andreportsto the Commonwealth
of Virginia.TheBoardappoints
FCRHA's Board of Commissioners, and the County provides certain managerial and related
financial
assistance
to FCRHA.
FairfaxCountyParkAuthority(ParkAuthority)- The ParkAuthoritywas createdby the
Boardof Supervisors
of theCountyon December6, 1950,to maintainandoperatethepublic
parksandrecreational
facilitieslocatedin theCounty.TheBoardappointsthePark
Authority'sgoverningboard,and the Countyprovidesfundingfor the ParkAuthority's
GeneralFund and one of its capitalprojectsfunds. A memorandumof understanding
currentlyin effectbetweentheCountyandthe ParkAuthoritydefinestherolesof theCounty
and the Park Authority.
FairfaxCountyEconomicDevelopmentAuthorityIEDA)- The EDAis an independent
authoritylegallyauthorized
by an actof theVirginiaGeneralAssemblyandwasformally
createdby resolutionsof the Boardof Supervisors.The EDA's missionis to attract
businessesto FairfaxCountyand to workwith the existingbusinessesto retainthem as they
expandandcreatenewjobs. TheEDAalsooperatestheFairfaxCountyConvention
and
Visitors Bureau, established to attract business travelers, meetings, and conventions to the
1V-26
gj
The Board appoints the seven members of the EDA's commission which appoints
the EDA's executive director. The Board appropriates funds annually to the EDA for
operating expenditures incurred in carrying out its mission.
Related Organizations
The Board of Supervisors is also responsible for appointing the members of the boards of the Fairfax
County Water Authority (FCWA) and the industrial Development Authority of Fairfax County
~AFC), but the County's accountability does not extend beyond making the appointments. The
IDAFC does not have a significant operational or financial relationship with the County. The FCWA
bills and collects for the sales of sewer services on behalf of the County's sewer system. During
fiscal year 2003, the FCWA collected approximately $63 million on behalf of the County, and as of
June 30, 2003, the County has receivables of approximately $13.4 million due from the FCWA.
Joint
Venture
The County is a participant in the Upper qccoquan Sewage Authority (UOSA). UOSA is a joint
venture created under the provisions of the Virginia Water and Waste Authorities Act to construct,
finance, and operate the regional sewage treatment facility in the upper portion of the Occoquan
Watershed. UOSA was formed on March 3, 1971, by a concurrent resolution of the governing
bodies of Fairfax and Prince William Counties
and the Cities of Manassas
and Manassas
Park.
The
governing
bo(2y
ofUOSAIsaneight-membei
b9~ of directors
consisting
oftiYo-members
from
eachparticipating
jurisdiction
appointed
tofour-ye~
terms.TheUOSA
Board
ofDirectors
adopts
an annualopeiri~n~budgetbasea~snproljeCted
sewage'flows. TheCounty has noe'ji~l~li~tarid
rnea~rableintereSt
in UOSAbutdoes`
h~~~~~g
an~~:Tespo~s~lityroritsshareof . ::
.· donStiii;c~ior;l~~s
·· -.
,'-~oi~plete~Fina~cial
statenients
vOSA'sllsp~t~f~a~`~.~~g
csts,
a~ an~uaIaebt
service
of UOSAc'an
2.
be bbtaine8
i~ioxsis,' cent~~iiik,--i~rginia
i0122:
by writingto'~jdSA,:P~~.
i~asis ~f' Preseil~ation::
%over~im~t-wfde
Stateinents
The statement of net assets and the statement of activities display information about the primary
government(the County)and its componentunits. These statementsincludethe financialactivities
of the overall government, except for fiduciary activities. Eliminations have been made to avoid the
double-counting of interfund activities. These statements distinguish between the governmental and
business-type activities of the County. Governmental activities generally are financed through taxes,
intergovernmentalrevenues,and other non-exchangetransactions.Business-typeactivitiesare
financedprimarilyby fees chargedto externalparties. Likewise,the primarygovernmentis reported
separatelyfrom certainlegallyseparatecomponentunits for whichthe primarygovernmentis
financially accountable.
The statement of activities presents a comparison between direct expenses and prograril revenues for
each activity of the County. Direct expenses are those that are specifically associated with a program
or function and, therefore, are clearly identifiable to a particular activity. Program revenues include
(a) fees, fines, and charges paid by the recipients of goods or services offered by the programs and
(b) grantsand contributionsthat are restrictedto meet the operationsor capitalrequirementsof a
particularprogram. Revenuesthat are not classifiedas programrevenues,includingall taxes, are
presented as general revenues.
1V-27
Financial
Statements
The accounts of the reporting entity are organized on the basis of funds, each of which is considered
to be a separateaccountingentity. The operationsof each fund are accountedfor in a separateset of
self-balancing accounts comprised of assets, liabilities, fund equity, revenues, and expenditures or
expenses,as appropriate.The fund financialstatementsprovideinformatiqnaboutthe County's
funds, including its fiduciary funds and blended component units. Separate statements for each fund
category-governmentaI, proprietary, and fiduciary--are presented. The emphasis of fund financial
statements is on major governmental and enterprise funds, with each displayed in a separate column.
All remaining governmental funds are aggregated and reported as nonmajor funds.
The County reports the following major fund types:
General Fund - The General Fund is the County's primary operating fund, and it is used to
account for all revenue sources and expenditures which are not required to be accounted for
in other
funds.
Entert~riseFund - The FairfaxCountyIntegratedSewerSystem(SewerSystem)is the only
enterprise fund of the County. This fund is used to account forthe financing, construction,
and operations of the countywide sewer system.
TheCouI;tyreportsthe:folld~ing
nonmajor.gbverriiirielital
fun~ltypes:
SpecialI~ievenue.Funds
- ~e specialrevet~uefunils
areusedtoaccountfortheproceedsof
spec~ revenue
sourcesother~~~s_c~~
p~~~s? th~ are~ally res~~~:expenditure~'iblr
si~~d~~i~e;i
p~irpdS~;
Debt Service Funds - The debt service.funds
ate used
to account
for
the
accumulatioil
of
r~s~,~i~~esrf~;;l;
~ ~kp~~;nent
o;f,ti~e
g~;li~~.~jlobligatior;~t
s~:~.ivice:~'t~;e
:~·ountj~
-;~i;i
f~,r
-;
the debt serviceof the lease revenuebondsand specialassessmentdebt. Includedin this
fundtypeisthe School-Debt
SeniiceFundasthe Count)is re~ponsible
forServici~B`thl
generalobligation~ebtit has issuedon behalfof PublicSchools.
Capital Proiects Funds - The capital projects funds are used to account for financial
resources used for all general construction projects other than enterprise fund construction.
The County reports the following additional fund types:
Internal Service Funds - These funds are proprietary funds used to account for the provision
of general liability, malpractice, and workers' compensation insurance, health benefits for
employees and retirees, vehicle services, supplies, document services, and technology
infrastructure support that are provided to County departments on a cost reimbursement
basis.
Pension Trust Funds - These are fiduciary funds used to account for the assets held in trust
by the County for the employees and beneficiaries of its defined benefit pension plans - the
Employees' Retirement System, the Police Officers Retirement System, and the Uniformed
Retirement
System.
Ag·encvFunds - These are fiduciary funds used to account for monies received, held, and
disbursed on behalf of developers, welfare recipients, the Commonwealth of Virginia, the
recipients of certain bond proceeds, and certain other local governments.
IV-28
Measurement
Focus and Basis of Accounting
Government-wide. ProDrietarv.and Fiduciarv Fund Statements
Thegovernment-wide,
proprietary,
andpension
trustfundfinancial
statements
arereported
usingthe
economicresourcesmeasurementfocus and the accrualbasis of accounting.The agencyfundsalso
use the accrualbasis of accountingto recognizeassetsand liabilities. Revenuesare recordedwhen
earned,andexpensesarerecordedat thetimeliabilitiesareincurred,regardlessof whentherelated
cashflowstakeplace.Non-exchange
transactions,
in whichtheCountygives(orreceives)value
withoutdirectlyreceiving(orgiving)equalvaluein exchange,includepropertytaxes,grants,and
entitlements.On an accrualbasis,revenuefrompropertytaxes is recognizedin the fiscal year for
whichthe taxesare levied. Revenuefrom grantsand entitlementsis recognizedin the fiscalyear in
whichall eligibilityrequirements
havebeensatisfied.Forthepensiontrustfunds,bothmemberand
employer
contributions
toeachplanarerecognized
intheperiodinwhichthecontributions
aredue.
Benefitsand refundsare recognizedwhendue and payablein accordancewith the terms of each
plan.
Proprietary
fundsdistinguish
operating
revenues
andexpenses
fromnonoperating
items.Operating
revenuesandexpensesgenerallyresultfromprovidingservicesandproducinganddeliveringgoods
in connectionwith a proprietaryfund's principalongoingoperations. For the SewerSystem,
principaloperatingrevenuesincludesalesto existingcustomers
forcontinuingsewerSi=n;ice.
Operating
expenses
include
thecastofsales:
andseniices,
administrative
expenses;
aaddep~la~ti~
oncilpitalassets.
Allrevenues
andexpenSes.nQtmeeting
thisdefinition
are~orted asnonoperating
Syst~m
recei~les, Lt'of'lin~wance foi~
revenuesand:expenSe·s.
Also,UnbilledSevve;i:
uncollectible accounts, ar~ recdrded at year ~nd td theextent they ca~nbe estimated.
In preparihg
the financialstatementsof the enterp~-iSC
fund;the Countj~has~notelectedto applythe
optionprovidedin Paragraph7 of GASBS~t~~
No.20 titled"Acce~nt`in~
aridFinancial
Reporting
forPropriktaiy
:~dS ~:~~er
Accounting."
Therefore,
thereporting
en~ity
ha~applied
allFinancialAccounting
'Standrirds
Board
(FASB)
statements,and
intetpietati~s
iss`ued
onorbeforeNoveinber'5q,
1989,elidept'for
th~e that
conflict with or contradict
GASB pronouncements.
As a generalrule,theeffectof interfundactivityhasbeeneliminatedfromthe government-wide
financialstatements.Exceptionsto this generalrule are chargesbetweenthe government'sSewer
Systemandvariousotherfunctions
ofthegovernment;
elimination
ofthesechargeswoulddistortthe
directcosts and programrevenuesreportedfor the variousfunctionsconcerned.
Governmental Fund Financial Statements
Governmental
fundsarereportedusingthecurrentfinancialresourcesmeasurement
focusandthe
modifiedaccrualbasis of accounting.Underthis method,revenuesare recognizedwhenmeasurable
and available. ·Revenue from the use of money and property and from intergovernmeetal
reimbursement
grantsis recordedas earned.Otherrevenuesareconsideredavailableto be usedto
payLiabilities
ofthecurrentperiodif theyarecollectible
withinthecurrentperiodorwithin45days
thereafter.Theprimaryrevenuessusceptible
to accrualincludeproperty,businesslicense,andother
local taxesand intergovernmental
revenues. In applyingthe susceptibleto accrualconceptto
intergovernmental
revenues,thelegalandcontractual
requirements
of theindividualprogramsare
usedasguidance.Expenditures
arerecorded
whentherelatedfundliability
is incurred,
exceptthat
principal
andinterestongenerallong-term
debtandcertainothergenerallong-term
obligations,
such
ascompensated
absences
andlandfillclosureandpostclosure
carecosts,arerecognized
onlytothe
extenttheyhavematured.Generalcapitalassetacquisitions
arereportedas capitaloutlaysin
IV-29
funds. The issuance of general long-term debt and acquisitions under capital leases
are reported as other financing sources. The effect of interfund activity has not been eliminated from
the governmental fund financial statements.
4.
Pooled Cash and Temporary
Investments
The County maintains cash and temporary investments for all funds in a single pooled account,
except for certain cash and investments required to be maintained with fiscal agents or in separate
pools or accounts in order to comply with the provisions of bond indentures. The component units
also invest in the pooled cash account. As of June 30, 2003, the pooled cash and temporary
investments have been allocated between the County and the respective component units based upon
their respective ownership percentages. Temporary investments consist of money market
investments that have a remaining maturity at the time of purchase of one year or less and are
reported at amortized cost, which approximates fair value. Interest earned, less an administrative
charge, is allocated generally to the respective funds and component units based on each fund's or
unit's equity in the pooled account. In accordance with the County's legally adopted operating
budget, interest earned by certain funds is assigned directly to the General Fund.
For the year ended June 30, 2003, interest earned by certain funds assigned directly to the County's
General
Fund
is as follows:
P;imari dov~mme~t
Nonmajor Goveiiim'~ntai
Internal ServiCe F~nds
Funds
18
4,300,968
480.764
':.... - - - .-:
: :ir ·::
Co_mDonentOnits
PublicSchdo~is ~ 1 ;:- ; ..: :-:_.
; : - : ;
- -; -
rl
:2,277,4~8
FCRHA
33,441
Park Authority
17.545
Totalcoinponent
u;~its
Total reporting
5,
entity
18
7,110.176
Cash and Cash Equivalents
For purposes of the statements of cash flows, the amounts reported as cash and cash equivalents for
the proprietary fund types represent amounts maintained in the reporting entity's investment pool, as
they are considered to be demand deposits for the purpose of complying with GASB Statement
No. 9, "Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental
Entities that use Proprietary Fund Accounting."
6.
Investments
Money market investments that have a remaining maturity at the time of purchase of one year or less
are reported at amortized cost, which approximates fair value. Other investments are reported at fair
value. Securities traded on a national or international exchange are valued at the last reported sales
price at current exchange rates. Asset-backed securities are valued on the basis of future principal
and interest payments and are discounted at prevailing interest rates for similar investments.
Investment purchases and sales are recorded as of the trade date. These transactions are finalized on
the settlement date, which is usually the trade date, but could be as many as three business days after
the trade date. Cash received as collateral on securities lending transactions and investments made
with such cash are reported as assets and as related liabilities for collateral received.
n~30
Derivatives
TheCountyRetirement
Systems(theSystems),whichincludetheEmployees'(ERS),PoliceOfficers
(PORS);and Uniformed(URS)RetirementSystems,as well as the EducationalRetirementSystem
(ERFC)of thePublicSchoolscomponent
unit,investin derivativesas permittedby the Codeof
Virginiaand in accordancewith policiesset by their respectiveBoardof Trustees. The Systemsmay
invest in various derivative instruments on a limited basis in order to increase potential earnings and
to hedgeagainstpotentiallosses.Duringfiscalyear2003,theSystemsinvestedin thefollowing
derivativeinstrumentsthat were not reportedin the financialstatementsas of June 30, 2003: futures
contracts,interestrate swaps,optionson futuresand swaps,and credit spreadswaps(spreadlocks).
As of June 30, 2003,the PORSdid not have any investmentsin derivativeinstrumentsthat were not
reported in the financial statements.
Anexchange-traded
financialfuturescontractis a legally-binding
agreementto buyor sella
financialinstrumentin a designatedfuturemonthat a price agreedupon by the buyerand seller at
initiationof the contract. Futurescontractsprovidea meansto achieveexposuresto the marketin a
moreefficientway and at lowertransactioncosts. The ERS enteredinto futurescontractsin May
and June 2003 with maturitydates of July and September2003. At June 30, 2003,the ERS had
futures contracts with notional and fair market values in S&P 500 and Russell 2000 of $125.2
million;foreignequityof $28.6million;foreigncurrencyof $26.5million;U. S. Treasuryof
negative$41.3million;andHangSeng'of$1.4million.TheURSenteredintofuturescontractsin
May~na.June
~a3,;vithmaturi~~d~es
ofMai·c~
~I~a
Ju~05.- ~t~~:30, 204~,lthe
~i~iiad i ·;,
~~9n~tsl-~
t~notionalv~e:~ $P6.~:million
~~ fairmark~et
~~
$Il.:million.
.
nieERFC
eri~d intofutiir~s
~~~:~m Ai~s~~~2to~Su~i~:
ida3i~ith
n~aturity;~~:~'
fromSeptemb~r
aO~fo~ri1?005:A~
JuneOiD63,
theERFChad
fut~res
64n~~it~~e
;iB
ri~ii$r~tu·re~:;~ E9.~~17~iimi~ion
nbtioin8iI'~ii;dm
million:
gove~mei~t:s~iap
futureS
of~e~Bflve
$1.6;
~ti~l~d~-~ii
ne~g~iv'e
g1.2mi~ion;
g~:-_
;
futures
of~~iY-el$S·7
million.an~d:negative
$5i2milSon:
~ iint~rest
~~tures;afn~~~
: -: ::l:j:
;5·f·
: :~::
~e~37.5ori,
~c~t
ii~i~iei'r;a~fe.i~~~~~t~il~~~i~
futurescontractbari~efiom:advers~
c~hanges
in marketprices'andinteresfr;ates;
Theserigks~
1equivalentiq
h:dldiflgXi~iiSi~rt3~the~d~~es.:oun~~
c~tsi~iS ~t
Ij,,iisel~~fu~ -
clearinghousebecomesthe counterpartyto all transactions.
Aninterestrateswapis a bindingagreement
betweencounterparties
to exchangeperiodicinterestpaymentson somepredetermined
dollarprincipal,whichis calledthe notionalprincipalamount.
Interestrateswapsareusedas risk-neutral
substitutes
forphysicalsecuritiesor to obtainnonleveragedexposurein marketswherenophysicalsecuritiesare available,suchas an interestrate
index. The effectivedate of the swapsfor the ERS was June 2003,with a maturitydate of June
2004. Paymentsoccurin JulyandOctober2003andJanuaryandApril2004.At June30,2003,the
notionalamountof interestrate swapsfor the ERS totaled$51.5million,and the fair marketvalue
totalednegative$219,274.Theeffectivedatesof the swapsfortheURSrangefromMarchto June
2003,withmaturitydatesfromMarch2005to June2008.At June30,2003,thenotionalamountof
interestrateswapsfortheURStotaled$17.7million,andthefairmarketvaluetotaled$101,537.
Thecounterparty
creditriskis controlledby the System'sinvestmentguidelinesandlimitedby
periodic
resetstomark-to-market.
Themarketriskis equivalent
toholdingtheexposure
tothe
index.
Anoptionis a financial
instrument
that,inexchange
fortheoptionprice,givestheoptionbuyerthe
right,butnottheobligation,
to buy(orsell)a financialassetat theexercisepricefrom(orto) the
optionsellerwithina specified
timeperiodorona specified
date(expiration
date).Optionsareused
to manageinterestrate and volatilityexposureof the portfolio. The URS had optionsthat were
)
writtenbetweenJanuaryandJune2003,bearingmaturitiesfromAugustto December2003. Options
heldin theportfolioat June30,2003,hada notionalvalueof negative$22.7millionanda fair
market
value
ofnegative
$234,926.
TheERFC
hadoptions
thatwerewritten
inJanuary
2002,
rV-31
a maturitydate of April 1, 2005. Optionsheld at June 30, 2003, had a notionalvalue of $3.0
million and a fair market value of $O. Options can cause the effective duration of a portfolio to
changewith movementsin interestrates. To controlinterestrate risk, the durationchangepotential
of options over a wide range of best and worst case interest rate scenarios is monitored.
A creditspreadswap(spreadlock)is a swapused to adjustexposureto specificsectorsand risks in a
portfolio by the most effective means possible. Spread locks are used to reduce risk, enhance
portfolio management flexibility, and gain exposure to the interest rate differential between two
market rates. PIMCO, on behalf of the URS, has entered into agreements to pay fixed amounts
rangingfrom 12.25basis pointsto 13;25basis pointsover the reference20-yearU. S. Treasurybond.
The spreadlocksagreementsexistingat June 30, 2003, were writtenon April 30, 2003,and matured
on August 13,2003. In addition,there was a mutualcollateralagreementwhicheach party could
exercise if the market value of the swap exceeded $250,000. The notional value of the spread locks
on June 30, 2003, was $5.9 million, while the fairmarket value totaled $29,602. Counterparty risk is
limited by restricting eligible counterparties to the highest credit rating organizations in the industry.
Risk is also limited to the exchange of net-interest payments, not the instrument's underlying
notional
8.
value.
Inventories
The purchases method of accounting for inventories is usedin the governmentalfunds. Under this
method;thecostis i~ecorded
as an expenditure
at the timein~dividual
itemsarepurchased.Atyear
end, a portionof the fundbalanceis reservedfor the effdingbalances.This ~eserveis maintained~to
indicatethat a pbrtionof'th~fundbalarice'isnot aCail~blefor futui·eappropriations.Inventoriesare
valued and carried pn an av~age unit cost basis.
'' ';
The consumption method of accounting for inventories is used in the proprietary fund types. Under
this method,inventories are expensed~asthey areconsumed as operating supplies~and spare parts in
th~ peril~,citowiii6htheyapply.- ·
9;
Restricted
Assets'
Restricted assets are liquid assets which have third-party limitations on their use. When both
restricted and unrestricted resources are available for use, it is the government's policy to use
restricted resources first, then unrestricted resources as they are needed.
Unspent amounts from the issuance of general obligation bonds are reported as restricted assets in
the County's capital projects funds. The County also holds certificates of deposit purchased by
developers under the terms of performance agreements. The County may require a developer to
enter into these agreements in order to ensure that certain structures and improvements are
completedaccordingto approvedsite plans. The certificates,issuedby variousfinancialinstitutions,
are released to the developer when the terms of the ggreement have been satisfied. If the terms of the
agreementare not satisfiedithe Countyuses the proceedsfrom the certificatesto corrector complete
the project as necessary. The amount of the certificates held is reported as a restricted asset in the
General
Fund.
In accordance with the provisions of the 1985 General Bond Resolution, certain assets of the Sewer
System are restricted for specific future uses, such as repayment of debt obligations, payments on
constructionprojects,and extensionsand improvements.Additionally,the StateWaterControl
Board (SWCB) regulations require the removal of ammonia-nitrogen from the discharges from the
County's Noman M. Cole, Jr. Pollution Control Plant and the Alexandria and Arlington County
Wastewater
removal
Treatment
Plants.
Certain assets are restricted
facilities.
n~_32
to fund the construction
of nitrogen
I
of June 30, 2003,the SewerSystemhas cash and investmentsthat are restrictedfor the following
.,,,:
Restricted
Assets
of
the
Sewer
stem
Extensions and improvements
Nitrogen removal facilities
$119,216,343
15,000,000
Long-term debt service requirements
21,208,838
Current debt service requirements
Total restricted
10.1
assets
165
04
21.385
In accordancewith requirementsof the U. S. Departmentof Housingand UrbanDevelopmentand
theVirginiaHousingDevelopment
Authority,
theFCRHAis requiredto maintaincertainrestricted
deposits and funded reserves for repairs and replacements.
The ParkAuthorityhas restrictedassetsrepresentingthe amountof the debt servicereserve
requirement
pertainingto its outstanding
revenuebonds,unspentamountsfromgeneralobligation
bondsissuedby the County,and loan amountsreceivedfrom the Countyfor certaincapital
improvements.
~O.
Capital Asse%
Capital~
assets,i~cluding
landi;;b~~~s,improvements,
equipm~,librarycollections,
purchase8.:::~:i
ca~pacitl,
giidinfrastruCtuie,
thatint~i~auaily
Cdst$5,000d;~; withusefui~ves
greaferdianone
·. : I yearare~e'p~~~inthegrd~~e~ ·fundsan~.app~icable
_go~eiriri~t~,or
~s~nesS:~lee
aldhvltled
tol~ns~n
fhe,g~i-iiri~ej~~~g~i~t~iferri~
TheCdunty
~s i~apitalized
~~'
infrastni~tiire
assetu,'~!~;ludi~~blid
was~edispoajlfacilities,
stdnhwatermangementfacilities,
revitalization
I~roir~ir~nts, and
faci~tje~~comri~erdial
:- :. ~ublic:t~iiis
an8vvsi~-~~i~s::th~t
we~~~i~e~i'orsubS~~i~i~ally:~np~
su~s~i~itq July;l,19'80.
public~~~ge
systems,
li~pprt~tipn
~~E"als
TheCounty
doesnotcapitaiizk`roa~s
andbridges
asthesebelong
totheCommonwealth
ofVirginia.
Purchasedcapacityconsistsof paymentsmadeby the SewerSystemunderintermunicipal
agreementswith the Districtof ColumbiamTaterand SewerAuthority(BluePlains),UOSA,
AlexandriaSanitationAuthority(ASA),ArlingtonCounty,and PrinceWilliamCountyService
Authority(PWCSA)for theSewerSystem'sallocatedshareof improvements
to certainspecified
treatment facilities owned and operated by these jurisdictions.
Purchased
capitalassetsarestatedat
historical
cost or estimated
historical
Caoital
Assets
cost.
Donatedcapitalassetsarerecordedat their
infrastructure
donation.Capitalassetsaredepreciatedl
Buildings
amortized over their estimated useful lives
Pu'chased capacity
estimatedfair marketvalue as of the date of
Useful
Lives
10- 100years
sewerlines
usingthe straight-line
method.Theestimated Imp'ovements
useful lives are shown in the table on the
Equipment
right.
Library
collections
50years
1
30- 50years
30 years
10- 30years
5 - 15 years
5 years
No depreciationis taken in the year of acquisitionfor infrastructureand Librarycollections;
depreciation/amoaization
on othercapitalassetscommences
whenthe assetsarepurchasedor are
substantiallycompleteand readyfor use. For constructedassets,all associatedcosts necessaryto
bringsuchassetsto the conditionandlocationnecessaryfortheirintendeduse,includingintereston
relateddebt with respectto the SewerSystem,are initiallycapitalizedas constructionin progress
and are transferredto buildingsor improvementswhen the assetsare substantiallycompleteand
ready for use.
rV-33
Absences
All reporting entity employees earn annual leave based on a prescribed formula which allows
employees with less than ten years of service to accumulate a maximum of 240 hours and employees
with ten years or more of service to accumulate a maximum of 320 hours of annual leave as of the
end of each year. In addition, employees, except for Public Schools employees, may accrue
compensatory leave for hours worked in excess of their scheduled hours. Compensatory leave in
excess of 240 hours at the end of the calendar year is forfeited.
The current pay rate, including certain additional employer-related fringe benefits, is used to
calculate compensated absences accruals at June 30. The entire liability for compensated absences is
reported in the government-wide and proprietary fund statements, whereas, only the matured portion
resulting from employee resignations and retirements is reported in the governmental fund
statements.
~2.
Net
Assets
Net assets are comprised of three categories: Net assets invested in capital assets, net of related
debt; Restricted net assets; and Unrestricted net assets. The first category reflects the portion of net
assets which is associated with non-liquid, capital assets, less the outstanding debt (net) related to
these capital assets. The related debt (net) is the debt less the outstanding liquid assets and any
associated unamortized costs. Restricted net assets are restricted assets, net of related debt. Met
assets which are neither restrictednoy~relateP to capital assets, are reported as unrestricted-net assets.
The Coulity issues debt tofinance the constructi~n'of school facilities for the Pubhc Schools and
parkfacili~es
fortlieParkAuthority
componen~;un~ts~
because
PublicSchools
does:~ot-;ha~je
borrowing or taxing authority and the Park Authority does not have taxing
authority.The County
reports this debt, whereas the Public Schools and Park Authority report the related _c~apital
assets and
unspeht
bondpr;oce~ds.
'AS.a
r'esui~t~
inthk~~ment:dfket:kssetsCExhi~t
~), theae~t~~:.·:
-;_':
unrestricted
netassetsfortheprimarygovernment,
whilethecapitalassetsarereportedin netassets
invested in ca~italassets, net of r~late~i~
debt and the unspent bond proceeds are reported in re;Ft~~d
net assets for Public Schools and the Park Authority.
Because this debt is related to capital assets and restricted assets of the reporting entity as a whole,
the debt amount of $1,059.1 million is reclassified as shown below to present the total reporting
entity column of Exhibit A:
Reclassification
of Debt
Primary
Net Assets
Invested
summa
in capital
net of related
Resb-icted
Component
Government
Units
$1,584,123,229
1,840,784,373
Issued
for:
Public
Park
Total
Schools
Authority
Reporting
Facilities
Facilities
assets,
debt
(954,217,364)
(90,406,344)
2,380,283,894
for:
Capitalprojects
Other
18,200,000
155,542,234
Unrestricted
785
Total net assets
971
14,525,912
120
78
(14,525,912)
12,579,914
988
954
9.472
IV-34
18,200,000
168,122,148
17
104.93
393.921.994
2.960
036
B
Encumbrances
The County uses encumbrance accounting, under which purchase orders, contracts, and other
commitments for the expenditure of funds are recorded to reserve that portion of the applicable
appropriation. Encumbrances represent the estimated amount of expenditures ultimately to result if
unperformed contracts and open purchase orders are completed. Encumbrances for thecapital
projects funds do not lapse until the completion of the projects and are reportedas reservations of
fund balance at year end. Funding for all other encumbrances lapses at year end and requires
reappropriation by the Board.
14.
Designations of Unreserved Fund Balances
Unreserved fund balances as of June 30, 2003, have the following significant designations:
Amount
Primary
General
Government
Fund
Revenue
stabilization
during
periods
of economic
downturn
18
Emergency needs a
of other governments
Nol7major
Landfill
29,253,999
49,814,959
Governmental
closure
and
postclosure
costs
1
Solid waste disposal
Total primary
government
Component
Unit
- Park
1
~19
62,736,298
12,422
154
!::1
:' :
Authority
·~-~a~n·~
l5.
ReCoveredCost;s
Reimbursements from another government, organization, or private company for utilities, tuition
fees, vehicle insurance, and services rendered or provided to citizens are recorded as recovered costs
in the
16.
fund
financial
statements.
Intermunicipal
Agreements
The Sewer System has entered into several intermunicipal agreements for the purpose of sharing
sewage flow and treatment facility costs (see Note J). The payments made to reimburse operating
costs and debt service requirements are recorded as expenses in the year due. Payments made to
fund the Sewer System's portion of facility expansion and upgrade costs are capitalized as purchased
capacity (see Note Fl. The Sewer System amortizes these costs over the period in which benefits are
expected to be derived, which is generally 30 years.
The City of Fairfax (the City) makes payments to the County for the City's share of certain
governmental services and debt service costs. Payments for governmental services such as court,
jail, custody, health, library, and County agent services are recorded as revenue in the General Fund.
Debt service payments represent the City's share of principal and interest and are recorded as
revenue in the County Debt Service Fund. In addition, the City pays the County a share of the local
portion of all public assistance payments and services including related administrative costs, which
is recorded as revenue in the GeneralFund. The City of Falls Church makes payments to the County
IV-35
the full cost of the local portion of public assistance payments (including allocated administrative
costs) and for the use of special County health facilities by Falls Church residents. These payments
are recorded
as revenue
in the General
Fund.
The Countyand the cities of Fairfaxand Falls Churchcomprisethe Fairfax-FallsChurch
CommunityServicesBoard(CSB),establishedunder Statemandatein 1969,to providemental
health, mental retardation and drug and alcohol abuse treatment services to residents of the three
jurisdictions.The CSB uses the Countyas its fiscal agent. The operationsof the CSB,including
paymentsreceivedfrom thesecitiesfor servicesperformedby the County,are reportedin a special
revenue
fund.
17,
UseofEstimates
The preparationof financialstatementsin conformitywith GAAPrequiresmanagementto make
estimatesand assumptionsthat affectcertainreportedamountsand disclosures.Accordingly,actual
results
B.
could
differ
from
those
estimates.
DEPOSITS AND INVESTMENTS
i.
Deposits
At June 30, 2003,all of the reporting entity's deposits were:cover~edby federal depositoryinsurarice
or collateralizedin accordancewith the VirginiaSecurityfor PublicD~sits ActAct). TheAct
providesforthepoolingof collateralpledgedwiththeTreasurerof Virginiato s~durepublicdeposits
as a dasS. no spe~Cif!c~colllarera~
can ~b~e
identified as securitjr for onepublic depositor, and public
dep~si~s~ p~ited ft~om
holciing
collateral'~n
thir nameassec~itljfor~d~sits;TheState;
Treasury Board is responsiblefor monitoring compliance with the collateralizati~onand reporting
reguirementsl~the Act and fornptifjringlocal governments:ofc~mpliande;bybanksand sayingsand
institutibni~:ona~ial
poolth~ lirovidks
f`di~ii~n~l
~ui~ple~iin~neiai
loanassiociations:-:.P~
assessments is similar to,depository insurance. ~If any memberfinancial institution fails, the entire
collateral
poi becomksa'vai~tbleto
satisfythe'claiinsofgovernmeatai
entities.If theiialueofthe
pool's collateral is inadequate to cover the loss, additional amounts would be assessed on a pro rata
basis to the members of the pool. Therefore, funds deposited in accordance with the requirements of
the Act are considered
to be fully insured.
A summary of the reporting entity's public deposits at June 30, 2003, is as follows:
Carrvino
Primary government
Component units
Total reporting entity
$
1
19
Value
BankBalance
137,107,651
160,992,485
67,783.200
204,890,851
90,317,500
251.309,985
The bank balance includes the pooled cash account which, for reporting purposes, has been allocated
between the primary government and the participating component units. The differences between
carryingvaluesand bank balancesgenerallyresult from checksoutstandingand depositsin transitat
June 30, 2003.
IV-36
a
O
2.
Allowed
Investments
Except for its pension funds, under the Virginia Investment of Public Funds Act, the reporting entity
is authorized to purchase the following investments:
·
Commercial paper
·
Money market funds
·
Bankers acceptances
·
Repurchase agreements
·
Medium term corporate notes
·
Local government investment pool
·
U. S. Treasury and agency securities
·
Obligations of the Asian Development Bank
·
Obligations of the AfricanDevelopment
·
Obligations of the International Bank for Reconstruction and Development
·
Obligations of the Commonwealth of Virginia andts instrumentalities
i
O~ligations
of counties,citles,;towns,
andbther·public
bodieslocatedwithinthe
Bank
Commonwe~ilth'ofir~rginia
ObligationsQfstate~ind!oc~ $ouernmehtunits
locatedwithin other states .
·:·~
: :
SavfngsaccountS
or timedepositsin.anq;baii~di·,savings
anh~loana~sodiition
witi~ntile
Commonwealth that complies with the Act
:: :;
ii:
I:
1
:
inve~tment~uoiicy
;~
Theieijo;fing'~tititl·L_j_
underlyihg
gi~~i~~i~S
musthaveamarketvalueofat lea~t~l~perce~tofthedostoftherepurchase
agre~~~~;'~
secunties
agreements
ismonitored
~ a'aailyb~igidu~:
market v~i~ueof ~hkse~urit-i~es
underlymg re~.~idha~:
the yearby the reporting entity to ensure compliance with the policy.
3.
Pension
Fund
Investments
The authority to establish pension funds is set forth in the Code of Virginia (the Code), which
authorizes the following investments for pension funds:
·
U. S. Treasury and agency securities
·
Obligations of the Commonwealth of Virginia and its instrumentalities
·
Obligations of counties, cities, towns, and other public bodies located within the
Commonwealth
of Virginia
·
Obligations of state and local governmental units located within other states
·
Obligations of the International Bank for Reconstruction and Development
·
Obligations of the Asian Development Bank
·
Obligations of the African Development Bank
In addition, the Code provides that the reporting entity may purchase other investments for pension
funds (including common and preferred stocks and corporate bonds) that meet the standard of
b
judgment and care set forth in the Code.
l3-37
of Trustees' policies permit the pension funds to lend their securities to broker-dealers and
other entities (borrowers) for collateral that will be returned for the same securities in the future.
The pension funds' custodians are the agents in lending the pension funds' domesticand
international securities for collateral of 102 and 105 percent, respectively, of the market value of the
related security. The custodians receive cash, securities and irrevocable bank letters as collateral.
All securities loans can be terminated on demand by either the pension funds or the borrowers. Cash
collateral is invested in the lending agents' collective collateral investment pools. The pension funds
do not have the ability to pledge or sell securities received as collateral in the absence of borrower
default. The relationship between the maturities of the investment pools and the pension funds'
loans is affected by the maturities of securities loans made by other plan entities that invest cash
collateral in the investment pools, which the pension funds cannot determine.
The pension funds did not impose any restrictions during the period on the amounts of loans the
lending agents made on their behalf, and the agents have agreed to indemnify the pension funds by
purchasing replacement securities, or returning the cash collateral thereof, in the event a borrower
fails to return loaned securities or pay distributions thereon. There were no such failures by any
borrower during the fiscal year, nor were there any losses during the period resulting from the
default of a borrower or lending agent. At year end, the pension funds had no credit risk exposure to
borrowers because the amounts the pension funds owed the borrower exceeded the amounts the
borrowers owed the pension funds.
4,
Custodial Credit'Risk
Categories
The reporting entity's investments ai~ecdtegorized to give an indication of the level of custodial
creditriskassumedby the~
entityas of June30]~~, :Cj~~ry I includesinvestments
thatare
insu~dor register~d,
or secu8tiesheldb~~t~~:~·e~~6~rig
c~ntity
oiits a~;en~'in
~therep~ng:~entitj;'s
ilame. Category 2 includes inv~s
fhatare
unitlS~red'6r
unregistered, with securitiesheld by
~ cb""~a~'s ~~"t.~aamelntdragentinthe~~nFr entity'sname.Category
3 includes
Invt~sjmehts
thatareunlns~red
~mid~;i;;i;~~gi~st~e~:wl~~se~.~-i~ies
heldbythecount~rparty,
orbyits
trust department or 2igentbutnot in ~he~i~p~ortirig
entiiy's name. Securities lent for securities and
iirevij~ableett~:Fso'Scre~:dit c~l~
~:.`L~i~as.ifitci~i~ccd~dingto the catego~jr of the cdllateral
received. All of the reporting entity's investments are Category 1 investments, except for mutual
funds, shea-term investment funds, securities lending short-term collateral investment pools, and
investments held under securities loans with cash collateral, which are not categorized because such
investments are not evidenced by specific securities.
5.
Investments
at June 30, 2003
The reporting entity's investments as of June 30, 2003, are summarized below at carrying value:
INVESTMENTSAT~UNE30,2003
Primary
Pooled
Government
Investments:
Bankers acceptances
Commercial paper
U. S. Treasury securities
$
Mutual funds
175,775,264
305,259,412
265,034,271
62,171,541
Repurchase agreements
Total pooled investments
25
833
rV-38
096
584
AT 3UNE 30,
Nonmajor
Governmental
Enterprise
Fund
Mutual funds
2003
(continued)
Fund - Money market funds
- Integrated
Sewer
and short-term
and short-term
Trust
1
1
4,603,884
27,120
38.225,793
investments
6,501,889
Funds:
Uncategorized
Investments:
Mutual funds and short-term
Securities
1
1
7,513,527
16,712,970
22,711,495
47.766,567
828,575
Repurchase agreements
U. S. Treasury securities
Total agency funds
Pension
76
investments
Repurchase agreements
U. S. Treasury securities
Obligations of authorities of the Commonwealth of Virginia
Total enterprise fund - Integrated Sewer System
Agency
Funds:
Mutual funds
18
System:
lending short-term
Investments
investments
collateral investment
held by broker-dealers
Short-term
under
securities
pool
loans
with cash
1
920,246,611
1
230,557,553
collateral:
investments
12,729,740
Common and preferred stock
U. S. Treasury securities
Asset-bBckeci
Other
Category
bonds
48,889,711
93,432,509
securities
1
9,904;512
and' notes
1
42,192,971
1
24,000,000
1 Investments:
Short-te:rm
investments:
Tir~edeposEts
Repurchase
agreements
Asset-backed
secuiities
1
Corporate
26,771,380
Comri~dn and pr~feried
Notonsecuri~esloan
sfoe~:
1
On loan for securities
Not on
On
Asset-backed
for
Total
17,880,460
collateral
8,105,381
securities:
Not on securities
bonds
1,121,343,491
4,963,167
loan
securities
loan
On loan for securities
Other
collateral
securities:
securities
loan
' .iS,3$7,~4i::
bonds
U. S. Treasury
87,325,230
40,484,231
and notes
373,689,760
collateral
- Not on securities
661,185
loan
1
Total pension trust funds
primary government
227.804,070
1 3.304,369,604
I $ 4.300
TV-39
AT 3UNE 30,
Component
Pooled
200S
(continued)
Units
Investments:
Bankers
acceptances
Commercial
U. S. Treasury
Mutual
I $
57,477,690
paper
99,818,400
securities
1
86,664,967
funds
20,329,803
Repurchase
Total
agreements
pooled
investments
FCRHA - Repurchase
Park
Authority
Public
Schools
Uncategorized
agreements
1
8.378
1
272,669.166
1
- Money
market
- Pension
Trust
funds
190.148
1
17.825.026
Fund:
Investments:
Mutual
funds
Money
market
Securities
1
lending
Investments
38,800,659
short-term
collateral
held by broker-dealers
Short-term
investment
under
pool
securities
130,776,104
loans
with cash
collateral:
investments
Common
252,618,665
funds
1
1,113,628
stock
37,529,192
U. S. Treasury
securities
1
50,271,357
ASS"-backedSec4rj"eS :
1
121967,473_
other
1
22,522,904
C0i~nertidl paperj; - ' _: :
1
36.19;9~1394_ - - · :-
Asset-bac~ed
1
Category
borids
and notes
1 InveStmenh:
Short-term
investments:
Corporate
si3cul5tiej
1,026,815
bonds
16,923,585
Common stock~:
Not
on
seturities
On
loan
for
:
59,749i596::
loai~;
securities
collateral
1
1,108.469
Preferredstock
1,322,256
U. S. Treasury
Not on
securities:
securities
loan
On loan for securities
Asset-backed
Other
2,359,176
securities
bonds
and
Total
Total
8,263,351
collateral
Public
component
156,644,450
notes
166
Schools
- Pension
trust
fund
1
units
1.532.456.406
I $ 1,823,140,746
Government
Reconciliation
of the
Governmental
statements
of Net Assets to
Total Deposits and Investments
Equity in pooled cash and temporary
Cash in banks
Cash with fiscal agents
Cash in student activity funds
Cash collateral
for securities
lending
Investments
Resbicted
investments
Business=Type
Activities
Exhibit A
9
772,971,993
Total
Primary
Government
12,714,669
Component
Units
A
785,686,662
230,557,553
3,112,037,844
22,998,597
i
Fiduciary
Funds
290,846,269
7,057,118
290.890
1,607,669
14,626,436
130,776,104
1,401,680,302
230,557,553
3,135,036,441
182,725,342
1.737,032
821,199
bonds
Investments
cash
Fiduciary
Funds
Exhibit A-
Total
Component
Units
291,137,159
7,057,118
1,607,669
14,626,436
130,776,104
1,401,680,302
Assets:
Equity in pooled cash and temporary
Cash with fiscal agents
Certificatesofdeposit
performance
Total
ComponentUnits
and
10
and
investments
Totaldeposits,
including
Total investments
1
performance
Total deposits and investments
182.725,342
1,737,032
821,199
12
475
15,225,912
10,145,396
652,676
101
3
4.437
bonds
18
1
137,107,651
4.300.550,890
B 4.437.658.541
IV-40
341
15,225,912
10.145,396
652,676
174
18
5
401
74
946
67,783,200
1.823.140.746
1.890.923,946
~::~::
C.
PROPERTY TAXES
Real estate is assessed on January 1 each year at the estimated fair market value of all land and
improvements.Real estatetaxes are due in equalinstallments,on July 28 and December5. Unpaidtaxes
automaticallyconstituteliens on real propertywhichmust be satisfiedprior to sale or transfer,and after three
years, foreclosure proceedings can be initiated.
Personalpropertytaxes on vehiclesand businesspropertyare basedon the estimatedfair marketvalue at
January1 each year. The tax on a vehiclemay be proratedfor the lengthof time the vehiclehas situsin the
County.A declarationform is requiredto be filed, and there is a ten percentpenaltyfor late filing. Personal
propertytaxestogetherwith vehicledecalfees are due on October5, with certainexceptions. Delinquency
noticesare sent beforestatutorymeasures,suchas the seizureof propertyand the placingof liens on bank
accounts and/or wages, are initiated.
Real estateand personalpropertytaxesnot paid by the due dates are assesseda ten percentlate payment
penaltyon the tax amount. Furthermore,interestaccruesfrom the first day followingthe due date at an
annualrate of ten percentfor the first year and thereafterat the rate set by the InternalRevenueService. The
net delinquenttaxes receivable,includinginterestand penalties,as of June 30, 2003, after allowancesfor
uncollectible amounts, is $19,492,398, of which $2,540,308 has been included in tax revenue for fiscal year
2003 because it was collected within 45 days after June 30.
As requiredby GAAP, the Countyreportsreal estateand personalpropertytaxes (net of allowances)
assessed forcalendar year 2003 as receivables (net of taxes collected in advance) and deferredrevenue .
becausetheCountyhasan enf~rceable
legalc~umto theseresourcesat June30,2003;however,tliese
resources, which amount td $1,905,968,500, will not he airai~ableto_theCounty until fiscal year 20041
The 1998 Virginia General Assembly enacted the Personal Property Tax Relief Act to provide property tax
relief,scheduledto be phasedin overfive years,on the first $20,000of~val~ of motorvehicleS:not
.usedfor
t~iei;Oa3~rginia ~en~iialAs~k~ly;
i~aS~ip~ia~iiy~i~h
businessputpos~s.Due~ bu;igeticondtrai~its,:
the tax reductionat 70 percent. The scheduledtax reductionsare reflectedin the County'sinvoicesto the
ta~payers. FolloCing receipt by the County of the reducedtax amounts,the Commdnwealthreiniburseshe
Countyfor the tax reductionsplus certainadministrativecosts. For fiscal year 2003,this revenuefrom the
Commonwealth totaled $195,434,234 and is reported as intergovernmental revenue in the General Fund.
IV-41
RECEIVABLES
Receivables and allowances for uncollectible receivables of the primary government at June 30, 2003,
consist of the following:
Nonmajor
General
Fund
Total
Internal
Governmental
Funds
Enterprise
Fund
Service
Funds
Total
Flduciary
Funds
A
Primary
Government
Receivables:
Accounts
Accruedinterest
Property
$
13,296,926
354,009
11,376,996
290,306
61,091
138,912
10,661
24,812,834
716,067
2,355,532
12,264,445
taxes:
45,600,797
45,600,797
Notyetdue
1.711,432,546
1,711,432,546
Receivable
from
sale
6,505,871
1.711,432,546
6,505,871
6,505,871
of pension
67,179,361
invesbnents
Loans
15,530,000
Notes
4,960,234
1
149
4,960,234
4,960,234
Other
Totalreceivables
157
61.091
1
67,179,361
15,530,000
15,530,000
152
Allowances
12,980,512
45,600,797
Delinquent
Businesslicensetaxes - delinquent
27,168.366
*
1
15.152
8
799
for uncollectibles:
Accountsreceivable
Property taxes:
(281,781)
~
Delinlple~t i :
Notyetdu~:
·
Busiriesslicenseaxes d~nquent
(281,781)
(281,781)
(26,108,399)
(26,108,399)
(6,559,800)
(6,559,a0Q)
4 54.746
'i'''"
: ~l~po,,nca~unp~d_llee8bles
::: ii
(26,1d8,399)
(6,559;sdd);
46
746
,.. ~i.is
;,...
i,
.
.775~:~
1
In:;-:::::,':1:::·: j-..·':;*-:::,i
Theotherreceivablesamountrepresentstheamountduefromfiduclaryfundson a governmen~wide
basis.
-.
:
: :
p"peay taxesreceivable
fromtaxpayersin
the
General
Fundas·bf
June30,2003,consistf the
Deli"suenr.;
i
-:
following:
::-I :
Real
Year of Le
2002
2001
2000
Prior years
Total delinquent taxes
Estate
$ 5,332,715
1,278,381
591,352
1 3
9 45.454
Penaltyand interest
Personal
10,577,035
8,918,371
3,448,022
Total
15,909,750
10,196,752
4,039,374
7 74
30 18 12
9 7
39,363,766
6,237,031
Total delinquent taxes, penalty and interest
45,600,797
Allowances for uncollectibles
(26,108.399)
Net delinquent tax receivables
$ 19.492,398
IV-42
Rcceivablrs
ofme
component
onL1,
cacludiy
fidana~iy
iunds,
atlunr
M,1003,
cansla
ofUle
following.
Total
Public
Park
Schools
Component
FCRHA
Units
Receivables:
Accounts
Accrued interest
Notes
$
252,529
42,131
11,955,680
30,655
10,664,045
45,134
3,982
12,253,343
76,768
10,664,045
294,660
23,113,298
49,116
23,457,074
294
20.744.954
49
21
Other
918
Total receivables
Allowances
462.918
for uncollectibles
Total net receivables
16
730
Amountsdueto theprimarygovernment
andcomponent
unitsfromothergovernmental
unitsat June30,
2003, include the following:
Primary
Government
Nonmajor
Component Unit
General GovernmentalE_nterpris
: : Total
FUM
Federal soveinine·i~f- ·
funds
-F`ui~8
ibit A
SCh~
i6i,Bi;S' .~-:- 9iSi6,~7~~ - ' `21~;9;6i ' id,lSi~""'i=~
State government:
Delinquent
Allowance
,227,824
for
uncollectibles
Not yet due
Allowance for
uncb;l!ectibles:;:::-;:1
Other
Localgovernments
Total intergovernmental units
E.
( 172~64~·~
182,bW,400
182,099,400
.(5,9t36,400)
~(5,936 400)
23,672,138
1.622.788
208,232,117
4,967,069
157.956
14,935,504
28,749190;7
110,700
18.763 70
20.544.414
19,093,271
'42,260,892
14,650,902
177.499
30.799
INTERFUNDBALANCESANDTRANSFERS
Payments for fringe benefits are
made through the General Fund
on behalf of all funds of the
County.As a result,interfund
payables
primarily
represent
the
portionoffringebenefits
to be
paid by certain other funds to
the GeneralFund.
Interfund
I
General
Fund
Nonmajor
Governmental
Funds
Fiduciary Funds
overdrawtheir shareof pooled
ComponentUnit
cash. All amounts are expected
Public Schools:
funds
to be paid withinone year. The
GeneralFund
composition of interfund
balances as of June 30, 2003, is
MajorGovernmentalFunds
Internalservice Funds
as shown on the right.
$
Payables
299,089
Is
B
Total component units
r3-43
3,658,653
3,583,846
Enterprise Fund
Internal Service Funds
Totalprimarygovernment
when
Interfund
P'~'~L~'~"~·
receivables
andpayablesare
also recorded
Interfund
Receivables
3.957.742
168,664
190,080
15.152
3.957.742
7,100,000
5,000,000
100
18
7,100,000 1
7,100,000
amounts paid by one entity on behalf of the
and component units represent
go.ernment
to/from primary
other entity. Due to/from
primary
govemment
andcomponent
units
asofJune
30,2003,
areasfollows:
Receivable
Amount
Pa ble
Component
Primary
Units
Government
PublicSchools
Government-wide
long-termobligationl9
GeneralFund
Park Authority
GeneralFund
Public
Schools
ParkAuthority
41864,092
171,272
1,408,066
94,937
·Nonmajor
Governmental
Fund
General
EDA
191.972
Fund
6.730
39
Total
Primary
Component
Government
General
Fund
FCRHA
NonmajorGovernmentalFunds
FCRHA
General
Park
Fund
Unit
64,976
g
1,591,703
108.487
Authority
1.765.166
Total
The prim~y
transfers
pu'po~!dfinterfund
is
to_pyovide
~,,,,i,
and
capital
pFojects-
20()3,ai~ as follows:
Intenfundtransfersfor f~eyear;en~ju~le;3~ij,
-·
:
;:
.
::·
:
:
BTim~r~
`Goir~e~r~~
I`: I ;
d~i'dl;iuX$
Nonmajor Governmental FundS
Infernal Servide
Totalprimarygovernment
Component
Public
·
TTiln.feTSln
TransTe~Out
-··;-
8
3,925,732
351,542,120
1.900.000;
357 7
34'Si,i94163j
6,373,815
357
1.700.000
7
Unit
Schools:
29,153,500
General Fund
Major
Governmental
Funds
Internal
1
Service
28,860,258
293,242
Funds
park Authority:
Major
Governmental
Funds
3.163 7
Totalcomponent
units
32 16.717
163
32
17
16.717
4
IV-44
CAPITAL ASSETS
Capitalassetsactivityfor the primarygovernmentfor the year endedJune 30, 2003,is as follows:
Primary
Government
Governmental
activities:
Capital
assets,
not being depreciated:
Land
Construction
in progress
Total capital assets, not being depreciated
Capital
assets,
being depreciated:
Equipment
Library collections
Buildings
Improvements
Infrastructure
Total capital assets, being depreciated
Less accumulated
depreciation
for:
Equipment
Library collections
Impr~~en't~
Infrastrudur~
Total accumulated depreciation
:~-Totalt~pi~r
;j~s~~l
Gei`nq
eepre~tep,ne~~~
-·~·.:;·
:
iotii! cipfi~al:assets,
net-·c~~gr~i~-t~l
Business-type
I;
activitieS
activitiej:
Capital:
a~~~, ~f beingdep;ec~~l`t~E~~ij8~~ii~~eb:
Land
17,j46,080
Construction
inprogress
165,278
17,511,358
_11~678,608 14,648,472._ (~693,1793
:. ;62_8,723.991;
Totalcaeita!
a~jets,
notbeine
deprecia~d/amoitized
: ·13~2;1;988
:_ :i4.813.750:::i3.k63;179).
~a ~r435;i59
··
Capital assets, bei;;g debreciat'~?b/amortized
:
Equipment
9,353,179
Purchased capacity
Buildings
537,865,741
55,221,333
Improvements
Totalcapital
assets,beingdepreciated/amortized
Less accumulated
depreciation/amortization
for:
(6,571,343)
Purchasedcapacity
Buildings
(39,679,490)
(24,270,328)
Improvements
Totalaccumulated
depreciation/amortization
Totalcapitalassets,beingdepreciated/amortized,
net
Total capital
assets,
net-
Business-type
activities
Totalcapitalassets, net - Primarygovernment
(939,245)
694,573,728
(348.969) 1,327,827.337
345,632
22,907,320
(7,164,956)
(53,575,391)
(25,398,529)
345.632
(3.337)
(3.606,516)
(284,097,505)
(370.236,381)
957,590.956
1.103.826,215
$ 2.428,438.508 99.612,156 (69.804.624)2,458.246.040
IV-45
-:-~-
9,951,322
568,080,954
(13,895,901)
(1,128,201)
(268,017.381) (16,080.124)
(338,5_38,542~ (32.043.471)
949.500.723·
8,093,570
1,084.525.411
(348,969)
55,221,333
685,599.012 8,974,716
1,288,039,265 40,137,041
Equipment
:
947,112
30,215,213
assets activity for the component units for the year ended June 30, 2003, is as follows:
Balances
Balances
3uly i, 2002
Component
Public
Increases
Decreases
~une 30, 2003
Units
Xhools
Capital
assets,
not being depreciated:
Land
$
Construction in progress
Total capital assets. not being depreciated
Capital assets,
Equipment
3,407,980
46,818,517
126.489,907
129.897,887
1135,854.209)
(135,854,209)
291,484.223
338,302,740
129,255,868
12,474,731
(3,909,430)
20,678,288
3,706,781
24,385,069
737,127,063
11,243,491
748,370,554
701.764.145
1.588.825,364
124,665.267
152,090.270
(3.909,430)
826.429.412
1.737.006.204
(67,004,347)
(9,670,036)
(284,196,877)
(195,458.480)
(556,329,740)
1,032.495,624
1,376.754.686
(13,064,797)
(3,615,363)
(14,859,388)
(27.109,399)
(58.648.947)
93,441,323
223.339.210
3,235,904
(76,833,240)
(13,285,399)
(299,056,265)
(222,567.879)
(611,742.783)
1,12~,263,431
1.463.566,161
being depreciated:
Library collections
Buildings
Improvements
Total capital assets. being depreciated
Less
43,410,537
300.848.525
344,259,062
accumulated
depreciation
137,821,169
for:
Equipment
Library collections
Buildings
Improvements
Total accumulated depreciation
Total capital assets, being depreciated,
Total capital assetsl~net - Public ~hools
net
3,235,904
(673,526)
; (136.527.735)
FCRHA
Capital assetj;notbs?in~ depreciat~a:
Land
30,098,466
Const~ud~ jnprdgy8si
Totalcapitalassets. not being;depreciated
10.94221121.i55.325
4i.04b;5~i · ; :3;676~56' :
Capital
assets,
(56,299)
31,963,418
(10.022.832i ]-._2;6j4161~
being depreciated:
Equipment
21351i071
:8uilrlihss~nili~aro\le~ets
:
Equipment
148.806,006
for:
Buildings and Improvements
Total accumulated depreciation
Total capital assets, being depreciated,
Total capital assets, net- FCRHA
338,669
2,6891740
le6,448.93n'-:::.;1.496:593
; :-· - .(214;507~~
::ri_-d~ji.~21:
Totalcapital8ssets, beingdepreciated
Less accumula~ed;depiec!ation
Park
1,921,251
(2,391,115)
net
(60,007.939)
(62.399.054)
86.400,952
127,441.544
' ' 2,835.i62
(214.507)
i93,250)
(5.132,699)
(5.225,949)
(2,390.687)
1.285.889
i51.420.761
(2,484,365)
(214.507)
(10.293.638)
(65.140.638)
(67.625.003)
83.795.758
118.433.795
Authority
Capital
assets,
not being depreciated:
Land
246,872,703
Construction in progress
Total capital assets, not being depreciated
8.305.807
255.178,510
Capital
assets,
being
11,589,747
Buildings and improvements
Total capital assets. being depreciated
accumulated
252,351,188
(4,339,301)
(4,339,301)
15.436,079
267,787.267
depreciated:
Equipment
Less
5,478,485
11.469.573
16.948.058
depreciation
702,781
176,925.599
188.515.346
4,339,301
5.042,082
(8,579,216)
(86.610,065)
(95.189.281)
93,326.065
348,504.575
(1,163,440)
(5.242.530)
(6,405.970)
(1.363.888)
15.584.170
(332,565)
(332.5651
11,959,963
181,264.900
193,224.863
for:
Equipment
Buildings and improvements
Total accumulated depreciation
Total capital assets, being depreciated,
Total capital assets, net - Park Authority
net
289,525
289.525
(43,040)
(4,382,341)
(9,453,131)
(91,852,595)
(101,305,726)
91.919.137
359,706.404
EDA
Capital
assets.
being depreciated
- Equipment
Less accumulated depreciation - Equipment
Total capital assets, net- EDA
Total capital assets, net - Component units
7,002
6,560
(4,2011
2.801
(2,494)
4.066
$ 1,852,703.606
240.213.335
IV-46
13,562
(6.695)
6,867
(151.203,714)
1.941.713,227
and
amortizationexpense
for the year
ended June 30, 2003, charged to the functions of the
primary government and component units is as follows:
Primary
Governmental
Business-type
Component
Activities
Activities
Units
Government
Generalgovernment
administration
~udicial
$ 8,420,610
administration
1,246,143
Publicsafety
Public
works
Health
and
9,220,686
10,558,238
welfare
Community
development
Parks,recreation,andcultural
12,755,839
8,168,040
In addition,depreciationon capitalassets held by the County's
internalservicefundsis chargedto the variousfunctions
based
Comnonent
Public
32,043,471
3,906,827
9,209,347
on their usage of the assets.
Units
Schools
58,648,947
FCRHA
5,225,949
Park Authority
6,405,970
EDA
Totaladpiecia~bon
andanio~tization
expense
63
·- · 730
-
. ..'
4
1.-.:;-
G
ii:
.
: · · :;
: The~ii~g~enti~ ad~nirj~~thef;ilio~ ~r
pensi:h b~ts
f'dr;
e~t~iE~o)~~~f'~'P~b;~·~~
~y~i~C~i~P-i
participate;in a plan sponsored andadministered
bytheVirginia:Retirement
System(VRS).
i.
FairfaxCountyEmployees'RetirementSystem
Plan Description
The Fairfax County Employees' Retirement
System(ERS)is a cost-sharing
multiple-employer
defined benefit pension plan which covers only employeesof the reportingentity. The plan covers
full-timeand certainpart-timeemployeesof the reportingentitywho are not coveredby otherplans
ofthereporting
entityortheVRS.Information
regarding
membership
intheERSis disclosed
in
item 6 of this note.
Benefitprovisions
areestablished
andmaybeamended
byCountyordinances.
Allbenefits
vestat
fiveyearsof creditableservice.Tobe eligiblefornormalretirement,
an individualmustmeetthe
followingcriteria: (a) attain the age of 65 withfiveyearsof creditableservice,or (b)attaintheage
of50withageplusyearsofcreditable
servicebeinggreaterthanorequalto80. Thenormal
retirementbenefitis calculatedusing averagefinalcompensation(i.e., the highest78 consecutive
two week pay periods or the highest 36 consecutive monthlypay periods)and years (or partialyears)
of creditableserviceat dateof termination.In addition,if normalretirementoccursbeforeSocial
Security
benefitsarescheduled
to begin,anadditional
monthly
benefitis paidtoretirees.Annual
cost-of-living adjustments are provided to retireesandbeneficiaries
equalto thelesserof 4.0percent
or the percentage increase in the Consumer Price Index for the Washington Consumer Metropolitan
IV-47
The plan provides that unused sick leave credit may be used in the calculation of
average final compensation by projecting the final salary during the unused sick leave period. The
benefit for early retirement is actuarially reduced and payable at early termination.
The ERS issues a publicly available annual financial report that includes financial statements and
required supplementary information. That report may be obtained by writing to the Employees'
Retirement System, 10680 Main Street, Suite 280, Fairfax, VA 22030, or by calling (703) 279-8200.
Funding· Policy
The contribution requirements of ERS members are established and may be amended byCounty
ordinances. Members may elect to join Plan A or Plan B. Plan A requires member contributions of
4.0 percent of compensation up to the Social Security wage base and 5.33 percent of compensation
in excess of the wage base. Plan B requires member contributions of 5.33 percent of compensation.
The reporting entity contributes at a contractually fixed rate of 6 percent of annual covered payroll.
This rate was established by the Board to cover the actuarially-determined normal cost plus
administrative expenses of the ERS. In the event the ERS's funded ratio (the ratio of the actuarial
value of assets to the actuarial accrued liability) exceeds 120 percent or falls below 90 percent, the
contribution rate will be adjusted to bring the funded ratio back within these parameters.
Annual
Pension
Cost
For the years ended June30, 2003, 2002, and 2001, tl;e Courity's and Public Schools' annual p~ns~ion
costs were equal to their.ant?ual requi~eld contributions ~ARC), as follows:
P;nnurjil:~'n~~:'~~~: fo;;:YeaiS
County
Public
Total
.
Schools
1$26170~1817
: 22,8001675 ~.
9.700.304
8.2s~.130
1$36.408.121
31.083.805
?1,993,157
~
j.967;827
29,960.984
For the year ended June 30, 2003, the actual contributions were $31,983,708 ($23,462,211 by the
County and $8,521,497 by Public Schools). For the years ended June 30, 2002 and 2001, the actual
contributions were equal to the annual pension costs, respectively.
The ARC for fiscal year 2003 were determined as part of the July 1, 2001, actuarial valuation using
the entry age actuarial cost method. Significant actuarial assumptions used in the valuation include:
a.
a rate of return on the investment of present and future assets of 7.5 percent per year
compounded annually, including an inflation component of 4.0 percent;
b.
projected annual salary increases of 4.3 to 5.4 percent, including an inflation component of
4.0 percent; and
c.
post-retirement benefit increases of 3.0 percent compounded annually.
IV-48
O
The actuarial value of ERS's assets was determined using techniques that smooth the effects of
short-term
volatility
inthemarketvalueofinvestments
overa three-year
period.Anyexcessofthese
assetsoveractuarialaccruedliabilityis amortizedas a levelpercentageof projectedpayrollon a
rolling
fifteen-year
weighted-average
basis.Ona weighted-average
basis,theremaining
amortization
period,whichis closedas of July 1,2002,is 15years.
Concentrations
The'ERSdoesnothaveinvestments
(otherthanU.S.Government
andU.S.Government
guaranteed
obligations)in any one organizationthat represent5.0 percentor more of net assetsheld in trust for
pension benefits.
2.
Fairfax County Police Officers Retirement System
Plan Description
TheFairfaxCountyPoliceOfficers
Retirement
System(PORS)
is a legallyseparate
single-employer
definedbenefitpension
planestablished
undertheCodeofVirginia.TheplancoversCountypolice
officerswhoarenotcoveredby otherplansof thereportingentityor theVRSandformerPark
Policeofficerswhoelectedto transferto thePORSfromtheUniformed
RetirementSystemeffective
January22, 1983.Information
regardingmembershirj
in the POR1S
is disclosed·initemg of this
ncite.:'
:
·:
are
Ben~fit~pr~s`j6iis
~::~si~-an~~ bk~ndeaby:~~~ ~inan~. 1Ail
benefits
yestat
:fiveye~~srf
creditable
s~e;j
~~~eZi~le;
~
nqiinal
~~~~an
in~~
muSt
-~lthe
.fo
:i~:::
1 i48;'i
e
)ilb~~~c~i~:
'~~lt~j~dyt~t~-~
befo~
Jui~-~
i~ti'~k:;g~e
~ 55di:~_~~::;:
yearsdf~i~jie ~i:~o;f· I~b):i~~~ cinora~;July I, i98I.i~h~~ ageof55.~~9t;e~:ca~le~e~d.earsThe:r?orr~alretiiementb~n~f
'~i.·~
··st-af-~vin~
~u~~ts
is~l~~
provj~e'F1
torefirees'
~d beneficiaries
qual_
to`thk
le~s~se;;of
4:bpercent
ServiceArea. The:planp~ovidesthat unusedsick~leave credit may be used in the calculationof
averagefinalcompensation
by projectingthefinalsalaryduringtheunusedsickleaveperiod.Tobe
eligibleforearlyretirement,
theemployee
musthave20yearsofcreditable
service(doesnotapplyif
hiredbeforeJulyi, 1981).Thebenefit
forearlyretirement
is actuarially
reducedandpayableat
early termination.
The PORSissuesa publiclyavailableannualfinancialreportthat includesfinancialstatementsand
requiredsupplementary
information.Thatreportmaybe obtainedby writingto thePoliceOfficers
Retirement
System,10680MainStreet,Suite280,Fairfax,VA 22030,or by calling(703)279-8200.
Funding Policy
Thecontribution
requirements
of PORSmembersareestablishedandmaybe amendedby County
ordinances.Membercontributions
arebaseddn 12.0percentof compensation.
The Countycontributesat a fixedrate as determinedby an annualactuarialvaluation,unlessthe
PORS'sfundingratio fallsoutside of a pre-determinedcorridor. Once outsidethe corridor,the rate
is eitherincreasedor decreasedto accelerateor deceleratethe fundinguntiltheratiofallsback
withinthecorridor.Thecorridorfor thePORSis a minimumfundingratioof 90 percentanda
maximumfundingratio of 120percent. The fiscalyear 2003 employercontributionrate is 17.3
percent of annual covered payroll.
n~49
Pension Cost
FortheyearendedJune30,2003;theCounty's
annual
pension
costof$14,918,405
wasequaltoits
annual required contributions (ARC), but more than its actual contributions of $12,923,806, resulting
of$1,994,599
reported
in thestatement
ofnetassets.Foreachof
in a net pension obligation O\JPO)
theyearsendedJune30,2002and2001theCounty's
annual
pension
costof$15,077,920
and
$17,149,427,
respectively,
wasequalto its ARCandactualcontributions.
The ARC for the year ended June 30, 2003, was determinedas part of the July i, 2001, actuarial
valuationusing the entry age actuarialcost method. Significantactuarialassumptionsused in the
valuation
a.
include:
a rate of return on the investmentof presentand future assetsof 7.5 percentper year
compounded
annually,includingan inflationcomponent
of 4.0percent;
b.
projected
annual
salary
increases
of4.5to8.0percent,
including
aninflation
component
of
4.0 percent; and
c.
post-retirement
benefitincreases
of3.0percentcompounded
annually.
Theactuarial
valueofthePORS'sassetswasdetermined
usingtechniques
thatsmooththeeffectsof
short-term
volatilityinthemarket
valueofinvestments
oveia three-year
period.Anyexcess
ofthese
assetsovertheactuarial
accruedliabi~ty-isamortized
asa levelpercentage
ofprojected
payrollona
Bfteen-yearbasis.
Ona wkightecl-a\ierage
basis,
theremaining
amortization
period,
whichis
closed
at July-i, 2002, is 15 years.
Concentrations
The:I~dj~S
c~e~'~~i~~i~~v;~·~~t~st;liei~fs
(otlier;
thanU: S. Government~arid
U. S.;Governinent
a
guaranteed
obiigationsj
inanyoneorganization
thatrepresent
5.0percent
ormoreofnetassets
held
in ttrustfor pt~-iiSi~in~
~b;e~e~:~!ts.:
:
3,
Fairfax County Uniformed Retirement System
Plan Description
TheFairfaxCountyUniformed
Retirement
System(URS)is a single-employer
definedbenefit
employeesincludingnon-clerical
employeesof theFire
pension plan. The plan covers uniformed
and Rescue Department and Officeof Sheriff,Park Police,HelicopterPilots,AnimalWardensand
GaineWardens
whoarenotcovered
byotherplansofthereporting
entityortheVRS.Information
regardingmembership
in theURSis disclosedin item6 of thisnote.
Benefit
provisions
areestablished
andmaybeamended
byCounty
ordinances.
Allbenefits
vestat
an individualmustmeetthe
five years of creditable service. To be eligiblefor normalretirement
followingcriteria:(a) attainthe age of 55 with six years of creditableservice,or (b) complete25
yearsofcreditable
service.Thenormal
retirement
benefit
iscalculated
usingaverage
final
compensationand years (or partialyears)of creditableserviceat dateof termination.Annualcostof-livingadjustmentsare providedto retireesand beneficiaries equal to the lesser of 4.0 percent or
thepercentage
increase
intheConsumer
PriceIndexfortheWashington
Consumer
Metropolitan
Service
Area.Theplanprovides
thatunusedsickleavecreditmaybeusedinthecalculation
of
average
finalcompensation
byprojecting
thefinalsalary
during
theunused
sickleaveperiod.Tobe
eligible for early retirement,
employeesmusthave20 yearsof creditableservice.Thebenefitfor
earlyretirement
is actuarially
reduced
andpayableatearlytermination.
IV-50
Q
The URS issues a publicly available annual financial report that includes financial statements and
required supplementary information. That report may be obtained by writing to the Uniformed
Retirement System, 10680 Main Street, Suite 280, Fairfax, VA 22030, or by calling (703) 279-8200.
Fundinp: Policy
The contribution requirements of URS members are established and may be amended by County
ordinances. Plan A members were given the opportunity toenroll in Plan B as of July i, 1981 and to
enroll in Plan C as of April 1, 1997. From July i, 1981 through March 31, 1997, all new hires were
enrolled in Plan B. Plan B members were given the opportunity to enroll in Plan D as of April i,
1997. From April i, 1997 forward all new hires are enrolled in Plan D. Plan A requires member
contributions of 4.0 percent of compensation up to the Social Security wage base and 5.75 percent of
compensation in excess of the wage base. Plan B requires member contributions of 7.08 percent of
compensation up to the Social Security wage base and 8.83 percent of compensation in excess of the
wage base. Plan C requires member contributions of 4.0 percent of compensation. Plan D requires
contributions of 7.08 percent of compensation.
The County contributes at a fixed rate as determined by an annual actuarial valuation, unless the
URS's funding ratio falls outside of a pre-determined corridor. Once outside the corridor, the rate is
either increased or decreased to accelerate or decelerate the funding until the ratio falls back within
the corridor. The corridor for the URS is a minimum funding ratio of 90 percent and a maximum
.funding·ratio
-~f120percent;Thefiscal.year'2005employer'dontribution
rateis 21.~Sperceatof
annual ~coveredgayFoll.
I . .·-·An~uaf_Pelrsior;_Cos~
h--
For t~heyear ended June 30, 2003, the doiintjr)Sannual pension cos~tof $21,548,814 was equal to
annual requiredcpntributions
(ARC), but less than its ~al~tributionS
itsual
of $23,027,231, resulting
in ai~~:~.penslon ~~g~~onir~~j;j·~f~~~ji~~~L~~:~~t~'aS
an"othef`asset~i
m~
statementof net assets. For each of the years endedJune 30, 2002 and'2001.the County'sannual
.pension:.ddstof
$18,778,668and
$i8,818,3:51.
i~s~ei~tively,wasecjuai
t~jit~s
ARCandla~tu81
contributions.
The ARC for the year ended June 30, 2003, was determined as part of the July 1, 2001, actuarial
valuation using the entry age actuarial cost method. Significant actuarial assumptions used in the
valuation
include:
a.
a rate of return on the investment of present and future assets of 7.5 percent per year
compounded annually, including an inflation component of 4.0 percent;
b.
projected annual salary increases of 4.1 to 6.1 percent, including an inflation component of
4.0 percent; and
c.
post-retirement benefit increases of 3.0 percent compounded annually.
The actuarial value of URS's assets was determined using techniques that smooth the effects of
short-term volatility in the market value of investments over a three-year period. URS's unfunded
actuarial accrued liability is amortized as a level percentage of projected payroll on a rolling fifteenyear basis. The weighted average remaining amortization period, which is closed at July i, 2002, is
15 years.
rV-51
The URS does not have investments (other than U. S. Government and U. S. Government guaranteed
4
obligations)in any one organizationthat represent5.0 percentor moreof net assetsheld in trust for
pension benefits.
4.
Educational Employees' Supplementary Retirement System of Eairfax County
Plan Descriotion
The Educational Employees' Supplementary Retirement System of Fairfax County (ERFC) is a
legallyseparatesingle-employerretirementsystemestablishedunderthe Codeof Virginia.The
ERFC covers all full-time educational and civil service employees who are employed by the Public
Schools and who are not covered by other plans of the reporting entity. The ERFC contains two
plans,ERFCand ERFC2001. ERFCisthe originaldefinedbenefitplan effectiveJuly i, 1973,and
remains in effect. It is, however, closed to new members. Effective July i, 2001, all new-hire fulltime educational and civil service employees are enrolled in the ERFC 2001 plan. This new defined
benefit plan incorporates a streamlined stand-alone retirement benefit and allows vested (after five
years) members to have a one-time irrevocable option of transferring to a new defined contribution
plan. The detailsof the new definedcontributionplan are still beingdevelopedand will be
incorporated into the plan document when finalized.
The ERFC and ERFC 2001 plans provide retirement, disability, and deathbenefits toplan~members
and their beneficiaries.~Annualpost-retirementincr~asesof 3.0 percentare effectiveeddh~arch 31.
Allbenefits
vestafterfiveyearsofcreditable
seruice~.
Benefitprovisions
areestabllSheg
andmaybe~:
amended
bytheFairfaxCountyPublicSchoolBo~ ~heERFC:plan
sCpple'merits
the~l~ni~
Retirement System plan. The benefit structure is designed to provide a level retirement benefit
through a combined ERFCNRS benefit structure. The ERFC 2001 plan has a stand-alone structure.
Membercontr~bcitions
~ol;the'
~R~i;Cand
Ei~i;CiijOl plana:aren;~ide
tl;ioughan air~I~l~i~e~i~!e~~~i;hi;;i~
''
results in a deferral of taxes on the contributions.
found~in
Article
iII of the ERFC
anti ERFC
2001
Further analysis of member contributions may be
Plan Documents.
The ERFC and ERFC 2001 plans provide for 12 categories of benefit payments. Minimum
eligibilityconditionsfor receiptof full benefitsrange frommembersattainingthe age of 55 with 25
years of creditable service to completing five years of creditable service prior to age 65. A
descriptionof each of the 12 types of benefitspaymentsis containedin the actuarialvaluationat
June 30, 2002. Total plan membership for the plans is disclosed in item 6 of this note.
The ERFC issues a publicly available financial report that includes financial statements and required
supplementaryinformation.That reportmaybe obtainedby writingto the EducationalEmployees'
Supplementary Retirement System, 8001 Forbes Place, Springfield, VA 22151.
Furidine: Policy
The contribution requirements for ERFC and ERFC 2001 members are established and may be
amended by the ERFC Board of Trustees. All members are required to contribute 2.0 percent of
their covered salaries. The employer is required to contribute at an actuariallydetennined rate. For
fiscal year 2003, Public Schools is required to contribute 4.0 percent of annual covered payroll for
educational employees and civil service employees.
IV-52
Annual Pension Cost
For each of the yearsendedJune 30, 2003,2002, and 2001,the PublicSchools' annualpensioncost
of $34,506,630, $30,849,067, and $29,145,883, respectively, was equal to its ARC and actual
contributions.
TheARC for the year endedJune 30, 2003, was determinedas part of the June 30, 2001,actuarial
valuationusingthe entryage actuarialcost method. Significantactuarialassumptionsused in the
valuation
a.
include:
a rate of return on the investment of present and future assets of 7.5 percent per year
compounded annually, including an inflation component of4.0 percent;
b.
projectedannualsalaryincreasesof 4.0 to 8.2 percent,includingan inflationcomponentof
4.0 percent; and
c.
post-retirement benefit increases of 3.0 percent compounded annually.
The actuarial value of the ERFC's assets was determined using techniques that smooth the effects of
short-termvolatilityin the marketvalueof investmentsover a five-yearperiod. Any excessof assets
over the actuarial accrued liability is amortized as a level percentage of projected payroll over a
periodoffutureyears,whichhasrieverexceeded
30,years.There~gi~ngari~olriza't~onle~-j~~d,
whichis closedat June 30 i002, was 30 years.
Concentrations
The ERFC plans do not have investmerits (other ~thanU. S. Government and U.S. Governinent
suarante~s~~g~o?s):inanyorieorganization
Ithat~resent5.0percenformoreofnetassets
av~iii~bi~~
fdr:~fit~
5. 1-
~irgiini~ ~tireine~
1::_·:]
Sysf~ni`
Plan Description
Public Schools contributes to the Virginia Retirement System (VRS) on behalf of covered
professionalPublicSchoolsemployees.VRS is a cost-sharingmultiple-employer
publicemployeedefinedbenefitpensionplan administeredby the Commonwealthof Virginiafor its political
subdivisions. All full-time, salaried, permanent employees of participating employers must
participate in the VRS.
In accordancewith the requirementsestablishedby Statestatute,the VRS providesretirementand
disabilitybenefits,annualcost-of-livingadjustments,and death benefitsto plan membersand
beneficiaries. The VRS issues a publicly available annual report that includes financial statements
and requiredsupplementaryinformationfor the VRS. This reportcan be obtainedby writingto the
Virginia Retirement System, PO. Box 2500, Richmond, VA 23218-2500.
IV-53
Policy
Planmembersarerequiredby Statestatuteto contribute5.0percentof theirannualcoveredsalaryto
theVRS.If a planmember
leavescovered
employment,
theaccumulated
contributions
plusinterest
earnedmaybe refunded.In accordance
withStatestatute,PublicSchoolsis requiredto contributeat
an actuarially
determined
rate. Therateforfiscalyear2003was3.77percentof annualcreditable
compensation.
Statestatutemaybeamended
onlybytheCommonwealth
ofVirginia
Legislature.
PublicSchools'contributionsto the VRS for the years endedJune 30,2003, 2002,and 2001,were
$33,837,799,$30,939,858,and $60,201,616,respectively,equalto the requiredand actual
contributions
6.
for each year.
Current Plan Membership
AtJulyi, 2002(June30,2002,forERFC),thedateofthelatestactuarial
valuations,
membership
in
the reporting entity's plans consisted of:
Primary
Component
Unit
Public Schools
Government
URS
Retirees and beneficiariesreceivingbenefits
1
4,164
657
663
:termi?etea
e~oye~j ~i~t~tled
ActiLe
emplo~~e~~
Tota~l
nimberdfplanmembers
l:ii~8
1
24
ir:
ERFC
6,375
1,362
16 74
:-:(-P3 1
5
7.
:
Required Supplementary Information
'-:-· ·
~ens~ frenddat~,.in~lu;lii~ig
~he.
Schedule
offui~ain$
p~s'$ ~alii~;d~~ls~ed~e
~:~1Qyer
contributions,can be foundin the requiredsupplementaryinformationsectionimmediately
followiilg.the;biites to tBe ~n~ancialsf;ite~ments.
IV-54
RISK MANAGEMENT
The reporting entity is exposed to various risks of loss related to torts, theft of, damage to, and destruction of
assets, errors and omissions, injuries to employees, and natural disasters.
The County and Public Schools maintain
self-insurance
internal service funds for workers'
compensation
claims and certain property and casualty risks and for health insurance benefits. The County and Public
Schools believe that it is more cost effective to manage certain risks internally rather than purchase
commercial insurance. The FCRHA, Park Authority, and EDA participate in the County's self-insurance
program. Participating funds and agencies are charged "pr~miums" which are computed based on relevant
data coupled with actual loss experience applied on a retrospective basis.
Liabilities are reported in the self-insurance funds when it is probable that losses have occurred and the
amounts of the losses can be reasonably estimated. Liabilities include an amount for claims that have been
incurred but not reported to date. Because actual claims liabilities depend on such complex factors as
inflation, changes in governinglaws and standards, and court awards, the process used in computing claims
liabilities is reevaluated periodically, to include an annual actuarial study, to take into consideration the
history, frequency and severity of recent claims and other economic and social factors. These liabilities are
computed using a combination of actual claims experience and actuarially determined amounts and include
any specific, incremental claim adjustment expenses and estimated recoveries.
The claims' liabilities.in the Self-irisurande'funds are;~isco~~
at SIS percentat JuneO, 2003 and 2002,·t~t~[
reflectanticipated
investment
inco~e.Changes
inthebalancesofclaimshabihties
duringfi'scallears~3
and 200;2 are~s si~own below.
,i:
Intecnal
Se
-Self-Tnsurance
Liability
balances,
3une.
?O;001
::
Claims and changes
Claims
Liability
balances,
7,391,885
and
changes
Claims
payments
balances,
799
3une
30, 2002
in estimates
~une
30, 2003
MinaO'rienrdoif
-~P~ublic::~dt`:
~, ~:;
-· ; · -
HealthBenefits
··--··
.Insurance.
8 i8,80Lf!558 4,1P2!144
payments
Claims
Liability
in estimates
Fuos
T
18.960;866 10103q1133
:~.,:_i::
42,719,i~9
2,032,032
113,611,060
40
4.991.539
110.564.12
10.994
19,396,847
6,300,269
16,001,359
13,086,066
9,391,325
46,882,944
6,275,435
128,036,793
7
46.087
6.022
125
001
15
858
21
44.546
7.095
28
16
537
In addition to the self-insurance program, commercial property insurance is carried for buildings and
contents plus certain large and costly items, such as fire apparatus and helicopters. Excess liability and
workers' compensation insurance policies are maintained for exposures above a $1,000,000 self-insured
retention. Settled claims have not exceeded any of these commercial coverages in any of the past three fiscal
years.
N-55
I.
LONG-TERM
OBLIGATIONS
The following is a summary of changes in the government-wide long-term obligations of the primary
government and component units for the year ended June 30,-2003 tin thousands):
Balance
Balance
3ulv1,2oo2
Primary
Due
Additions _Reductions 3une30,2003
Within
OneYear
Government
Governmental
General
activities:
obligation
bonds
payable:
Principal amount of bonds payable
Premium on bonds payable
Deferred amount on refundlngs
Revenue
bonds
$1,519.646
5,025
(2.227)
366,334
24.444
(3,279)
(308,824)
(494)
186
1.577,156
28,975
(5,320)
132.620
4,178
(786)
(4.030)
173,450
4.796
75.823
62.736
46.138
28.340
4,240
314
47,010
25,357
8,234
14,721
4,864
1.995
1,621
payable:
Principal amount of bonds payable
Premium on bonds payable
Compensated absences payable
Landfill closure and postclosure obligabion
Obligations under capital leases
Insurance and benefit claims payable
106,650
72.558
65,770
so,ss8
25.697
70,830
4,796
48,251
1.565
56,274
(44.986)
(3.034)
(6,385)
(53.631)
Other:
Obligation to component unit
Net pension obligation
HUD Section
6,485
(1,621)
1,995
108 loan
2.300
Obligations for claims and judgments
Special assessment debt with g0veinmentalcommibnent
zoo
525
960
(115)
2.185
(200)
(75)
960
450
115
960
75
.3fif~~r68:Fui;d loans`
:(423,298)
Total,4~q~!verl?r~:nt~~l
activities
Busine~e'iy~~
activities:
Sewer
revenue
bonds
484.522:
(926)
:
absehcespay~ble
Totalbusiliess-type
acblvitle~
.;~:lo~~
'la~biiitibs
-;~imaly:g~~~i_
com.on~~~;:
.23_8.731
payable:
.Pil;lBp~!~d-6u30t~nd; paiiable
blsc~;i~on:'bond's prjyabie
Compensated
i.Ob2.779
1.673
=
:1.218
I
'
(10.249)
64
(1.037)
i
· 474,273
(862)
1,854
(6;4)
1.149
'
. ~2;336;876.j~~j75.688
11434.520)%478.044:~51.558
-
·
Compensat~d absences payable
Obligations under capital leases
Insuranceand benefit claims payable
Total Public Schools
8
22,496
27.681
29,087
79.264
1.002
9,927
134,312
145,241
11,972
67.697
840
1,803
82,312
859
6.871
376
(9,629)
1131.258)
(140,887)
23,498
27.979
32.141
83,618
14,569
9,647
21,400
45,616
(311)
(7,927)
(382)
(124)
(8.744)
12,520
66,641
834
1.679
81.674
315
10.364
392
134
11.205
(505)
5
·so
(18,289)
13,230
(89)
(845)
14,443
15,530
3,860
46,129
530
(5)
(50)
14,443
FCRHA
Revenue bonds payable
Notes payable
Compensated absences payable
Other - Public housing loans
Total FCRHA
Park
8,106
Authority
Revenue
bonds
payable:
Principal amount of bonds payable
Discount on bonds payable
Deferred amount on refundings
Revenue notes payable
Loans payable
Compensated absences payable
Total Park Authority
13.735
(94)
(895)
16,065
3.673
32.484
16,667
15,530
2.121
34.318
(1.934)
(20.673)
2,248
17.166
EDA
Compensated
absences
payable
Total long-term liabilities - Component units
t
130
102
194.190
187,767
(96)
(170,400)
136
105
211,557
74,092
Compensated absences payable, obligations under capital leases, obligation to component unit, and
obligations for claims and judgments for the primary government are liquidated by the General Fund and
other governmentalfunds. The landfill closure and postclosure obligation will be liquidated by the Energy
Resource Recovery Facility Fund, a special revenue fund.
IV-56
::
'K~ ·
1.
General
Obligation
Bonds
General obligation bonds are issued to provide funding for long-term capital improvements. In
addition, they are issued to refund outstanding general obligation bonds when market conditions
enable the County to achieve significant reductions in its debt service payments. Such bonds are
direct obligations of the County, and the full faith and credit of the County are pledged as security.
The County is required to submit to public referendum for authority to issue general obligation
bonds.
At June 30, 2003, the amount of general obligation bonds authorized and unissuedis summarized as
follows tin thousands):
Bond
Purpose
I
School improvements
Transportation
improvements
Parks and park facilities
Commercial
and
Neighborhood
Human
redevelopment
area
improvements
17,280
improvements
services
Storm drainage
1,820
facilities
1,185
improvements
3,960
: ,.A~tdetenrion~clitie's]
I .
pllblicsafety f~cijities]:
authorized
The Commonwealth of Virginia
inae6tednessthat thenu~
does
1
butunissued
not
61520
loo,4so
~wvenlledeE~nt/on~acilities
Total
Amount
$381,750
56,660
1
44,830
bonds
lg
900
615,355.
impose a legal li~nit;on the amountof general pbhgation
cin Yncuror fi~ave
outstanding.TheBoard of SGperir~~, howeve`r,has
self-imposed bond limits to provide that the County's net debt may not exceed thre~epercent of the
total market value of taxable re~ilanhpeiSonal property in the County. In ac2dition;the:annilal debt
service may not exceed ten percent of the annual General Fund disbursements. As a financial
guideline, the Board of Supervisors also follows a self-imposed limitation in total general obligation
bond sales of $1 billion over a five-year period or an average of $200 million annually, with a
maximum of $225 million in any given year. All self-imposed bond limits have been complied with
at June 30, 2003.
On March 5, 2003, the County issued $171,165,000 of Series 2003A General Obligation Refunding
Bonds dated February 1, 2003, with an average coupon interest rate of 4.59 percent. These bonds
were issued to currently refund $10,300,000 of outstanding Series 1993B Bonds, $132,845,000 of
outstanding Series 1993(1Bonds, $15,810,000 of outstanding Series 1994A Bonds, and $20,000,000
of outstanding Series 1995A Bonds with average coupon interest rates of 5.00, 5.30, 5.26, and 4.99
percent, respectively. Proceeds of $184,160,351, plus the County's $2,900,000 total equity
contribution, were used to purchase U. S. Government securities which were deposited in an
irrevocable escrow fund to provide for the resources to redeem the Series 1993B Bonds on April 10,
2003, the Series 1993(7 Bonds on May i, 2003, and the Series 1994A and 1995A Bonds on June i,
2003. The reacquisition prices exceeded the net carrying amounts of the refunded bonds by
$3,279,375, and this amount is being amortized over the remaining life of the refunded bonds. The
County refunded these bonds to reduce its total debt service payments over the next 9 years by
approximately $13.2 million and to obtain an economic gain (the difference between present values
of the debt service payments on the old and new debt) of approximately $12.8 million.
IV-57
May 2003,the Countyissued$195,170,000of Series2003BGeneralObligationPublic
ImprovementBondsdatedMay 15, 2003to financeprojectsrelatedto schoolsimprovements,parks
and park facilities, public safety facilities, and other purposes.
Detailed information regarding the general obligation bonds outstanding as of June 30, 2003, is
contained
2.
in Section
Revenue
4 of this note.
Bonds
In March 1994, the EDA issued $116,965,000 of lease revenue bonds to finance the County's
acquisition of certain land and office buildings adjacent to its main government center. As the
County is responsible, under the related documents and subject to annual appropriation, to make
paymentsto a trusteesufficientto pay principaland intereston the bonds,the relatedtransactions,
includingthe liabilityfor the bonds,have been recordedin the County'sfinancialstatementsand not
in those
of EDA.
In October 1996, the FCRHA issued $6,390,000 of lease revenue bonds to finance the construction/
renovation of two community center buildings. In December 1998, the FCRHA issued $5,500,000 of
lease revenue bonds to finance the renovation and expansion of a third community center building.
In May 1999, the FCRHA issued $1,000,000 of lease revenue bonds to finance the construction of an
adultday healthcare centerto serveCountyresidents.As the Countyis responsible,underthe
related docurrientsaI~i~d
subject to anii~al zippropriatjon,tomake pay~
to a trustee Suffi~ier;i~~Q
payprincipal
andintereston~es~bonds,therelatedtransactions;
including
theliability
~~$e _ : ~ .
bonds,havebeei~
~;d~n~ t~k~C~ounty's
~f~nanci[al
state~nents
an;d'
nd;tin ~t~oseof
the]F'CjRiS~l
:..:.
;···:
In;tLne-2003
theEDAissued
$iro,sso,oooof
revknite~dnds
tofinande
~ develdiiment
aiid
constructidn.of
a pdbbic
~gt;csch,dl~and
a hub~egdlfcourseandreiatecl`s~t~ruct~Lii·esl
f~ci~it~ks,:
ar;a
enldpmentintheLaurelHillaredof
thesoothempMof
rpecounty.
AsUleCo~ry
is~p~~_
.undeithere~d d;d~~.:an~ ~iecf to:~ni;ala~:p~rdtiii~;
toiiiBke
payme~'~ a~st~
sufficient to pay principal and
intereston-diebonds,tl;erelatedtransactions,
includingtheliability
fort~ebonds, havej'been~cordedin t'heCounty'sfindndialst8terrierits
iid not In thosedf~~.
None of these revenue bonds nor the related payment responsibilities of the County are general
obligationdebt of the County,and the full faith and creditof the Countyis not pledgedto these
bonds for such payment responsibility. Detailed information regarding the revenue bonds
outstanding as of June 30, 2003, is contained in Section 4 of this note.
3.
Sewer
Revenue
Bonds
In May 1993, the Sewer System issued of $72,100,000 of Series 1993 Sewer Revenue Refunding
Bonds, with an average interest rate of 5.39 percent, to advance refund $64,500,000 of Series 1986
Sewer Revenue Bonds. The Series 1993 Refunding Bonds consist of $41,220,000 of serial bonds
bearingan averageinterestrate of 4.86 percent,$22,395,000of 5.5 percentterm bondsdue
November 15, 2013, and $8,485,000 of 5.65 percent term bonds due November 15, 2015. The term
bondsare subjectto mandatorysinkingfund redemptionin varyingamountsoverfiscalyears2011
through 2016.
In July 1996, the Sewer System issued $104,000,000 of Series 1996 Sewer Revenue Bonds with an
averageinterestrate of 5.8 percentto fund the plant expansionof the wastewatertreatmentfacilities
at the County's Noman M. Cole, Jr. Pollution Control Plant and other system improvements. These
Series 1996 bonds consist of $24,335,000 of serial bonds bearing an interest rate of 5.625 percent,
$17,705,000of 5.7 percenttermbondsdue July 15,2018,$23,970,000of 5.8 percentterm bondsdue
IV-58
I ..
15, 2023, and $32,465,000 of 5.875 percent term bonds due July 15, 2028. The $74,140,000 of
term bonds are subject to mandatory sinking redemption in varying amounts over fiscal years 2015
through 2029.
The aforementioned
sewer
revenue
bonds
were issued
in accordance
with the General
Bond
Resolution adopted by the Board of Supervisors on July 29, 1985, and are payable from and secured
by the net revenue generated through the Sewer System's operations. Accordingly, the Master Bond
Resolution includes a rate covenant under which the Sewer System agreed that it will charge
reasonable rates for the use of and services rendered by the Sewer System. Furthermore, the Sewer
System will adjust the rates from time to time to generate net revenues sufficient to provide an
amount equalto 100 percent of its annual principal and interest requirements and the Sewer System's
annual commitments to fund its proportionate share of other jurisdictions' debt service requirements.
In addition, payment of the principal and interest on all bonds is insured by municipal bond
insurance
policies.
In January 1993, UOSA, a joint venture, issued $63,310,000 of Regional Sewer System Revenue
Refunding Bonds to refund certain outstanding bonds that had been issued to refund earlier bonds.
In January 1996, UOSA issued $288,600,000 of Regional Sewer System Revenue Bonds to finance
the cost of expanding the capacity of its wastewater treatment facilities from 32 MGD to 54 MGD
and $42,260,000 of Regional Sewer System Revenue Refunding Bonds to refund certain outstanding
bonds that had been issued to finance a~priorexpansion. The Sewer ~stem's share of this debt is
ls~!4ij,773,14~,l~;it
i~suibor;din~te
tijthe si~w~t;
ir~veii;ebondsis~ju~bythe~ewerS~yS~~~
::~
In June 2001 and june 200i, the SewerSystemissued20-yearsubordinatedseweireveni~ebo~idsin: '
the amounts of $40,000,000~and $50.000,000, f~specti;vt~iy,
to the ~rginia ~ateF;acilities
Revolvi~~, acting
byandtbrod9h
tiie_WrginiaReSo~e~~~S~e
~~bs~~~n
used to finance a portion of the Sewer S~stem's share of;incurred expansion
anaup~a~de costs of
~heserv~c
es!
~ provideseivice
:cdu~~t4;
i;esi;2t~l;l~s.:
~he~bondsb;eaiin~ieie~$t
~~'e~~i~4,i percen`t~;~r:anriuri~:'an~~
3.75perd~ pe~j"':~
-·
;
;
annum, respectively, and collectively require semi-annual debt: service payments.of $3,318,536. The
bonds are sutjoriSinaiedtb all outstanding:Ijriorb~ad issiies_of·the Sew~r Syst~m and pay~s~`for
operation and maintenance expenses.
Detailed information regarding the sewer revenue bonds outstanding as of June 30, 2003, is
contained
in Section
4 of this
note.
IV-59
County Debt and Related Interest to Maturity
The County's outstanding general obligation bonds, State Literary Fund loans, revenue bonds,
special assessment bonds, HUD Section 108 loans, Sewer System revenue bonds, and the related
interest to maturity as of June 30, 2003, are comprised of the following issues:
Total Principal
outstanding
8
Annual
Interest
Rate
Issue
Final
Maturity
(%)
Date
Date
Series 1996A Public Improvement
Series 1997A Public Improvement
Series 1998A Public Improvement
4.75-5.50
5.00-6.00
4.50-5.00
05-15-96
05-15-97
05-15-98
06-01-16
06-01-17
06-01-18
Series 1999APublicImprovement
4.13-5.00 04-01-99 06-01-19
Series
Series
Series
Series
4.13-5.00
5.00-5.50
5.00-5.50
4.25-5.13
Series
Governmental
General
Principal
Payments
Original
Issue
(988)
Principal
outstanding
(899)
InterestPayable
to Maturity
(996)
InterestPayable
to Maturity
(000)
(000)
acuviues
obligation
General
Bonds:
County:
1999A
19998
2000A
20008
Refunding
Public Improvement
PublicImprovement
Public Improvement
04-01-99
12-01-99
04-01-00
12-01-00
$ 2,511-2,514
3,450
2,435
06-01-19
12-01-19
06-01-20
12-01-20
series 200m Public Improvement
4.25-5.90 06-01-01
Series'ZOOZA
Refunding
3.·o-s,oo; 06-01-02::06-01-15
2,710
50,250
69,000
48,710
32,638
48,300
36,532
12,252
18,741
14,516
44.890
67,041
51,048
54,200
43,360
i7,097
60.457
1,267-8,379
180
1,900
110-115
76,043
3,600
38,000
2,250
68,178
3,860
32,300
2,020
19,886
1,413
15,098
879
88,064
4,473
47,398
2.899
2,120
42,400
38,160
16,894
55,054
06-01-21
Series2001A
Refunding
4.25-5.0006-01-01
06-a1-103,281-17,009
Sk;les:~BiA
Putj!~cir;i~ibv~t;l~ii~
:1:1:
3.50-5~~~
OljlQ1-Oi
.06-61-i2 :: · 3,iOO
.
82,238
81,607
64,~00::
1,680-3,421~.~-;::I~I1PB:: ·
23;517 ;.
11,859
93,457
-.·-.36,206
. :: - 94;806
6,722
.
30,238
Series2003A
~~~jn~ri~:
[email protected]/1-03~5-01-12 3,656;1~;203.: '82,4(17:
82,;QOi
15,556
97,963
series2003sPubeLn7orove.mant
.:~:2i00-5.00
0~-15-9? 06-01-23 3,315-3,330_; ~6,490~.;· ~ .;.-. :56.490.-~ _::.30,560. -; I:·:_-:,9t.050.
Schooi~:
-
Ta~:~e~~b~i~i~
6onds~e~tou~
Seri~s'1996APublicImprovement 4.75-5.5005-15-96 06-01-16 3,144-3,196
.63,900
Serie~:1F)9~7A:
Public~pi~~~ht
:5;750
~J~,OqO:
i : : : :::.--·_iszl~
1,365
21,290
5;00-6.00
~5-~5-97 05-01 17
·-·'· .. ·
41,542
15,594
.0,364
57,136
72,864
";~::-l:':;1X
~~b 12-0197 il-ol-i7::.::::1.'5,oDp.::.'b~l),00b:~:.I::-.;;~vuu
i
C~:e~")98~Public'I~~i
11,59:
·-:m-·P6,688:
1
:61,688
seii';~~94~9A':P;ubiic:~p~\~~~~
4.13-5.01J
04r01-990~-01:19
:5,000
.. 4.ij-S:b0'~4-01-99 06-01-19 ; i10~961
-i11,545
73,158
Series1998APublicImprovement 4;50-5.0905-15-98 06-01-18
Series
Series
Series
Series
Series
Series
Series
Series
Series
19998 Public Improvement
5.00-5.50 12-01-99
2000A Public Improvement
5.00-5.50 04-01-00
20008 Public Improvement
4.25-5.13 12-01-00
2001A Public Improvement
4.25-5.00 16-01-01
2001A Refunding
4.25-5.0006-01-01
ZOO2A Public Improvement
3.50-5.00 06-01-02
2002A Refunding
3.50-5.00 06-01-02
2003A Refunding
2.25-5.0002-01-03
20038 Public Improvement
2.00-5.00 05-15-03
Total general obligation bonds - Schools
Total general obligation bonds
12-01-19
06-01-20
12-01-20
06-01-21
06-01-10
06-01-22
06-01-15
06-01-12
06-01-23
4,000
2,500
2,500
4,000
2,284-11,836
6,500
1,410-4,474
3,935-17,447
6,430-6.435
$
n~-60
20,469
: ~,~id~6pdi.
j~63i
80,000
50,000
50,000
80,000
57,227
130,000
34,786
88,758
128.680
1.088,813
1,798.550
68,000
42,500
45,000
72,000
56,788
123,500
32,613
88,758
128.680
953,987
1,577.156
8,132
..-..-31'545
16,521
31,407
19,868
19,835
31,873
8,246
57,744
10,454
16,757
59,194
364.222
575,892
28,601
99,407
62,368
64,835
103,873
65,034
181,244
43,067
105,515
187,874
1,318.209
2,153.048
Principal
Interest
Rate
Series
(%)
Revenue
Issue
Final
Maturity
Date
Date
Annual
Principal
Payments
Original
Issue
(000)
Principal
Outstanding
(000)
Interest Payable
to Maturity
(000~
Outstanding 8
Interest Payable
to Maturity
(000)
(000~
Bonds:
EDA
Revenue
Bonds:
Series 1994 (Lease Revenue)
5.25-5.50 03-01-94
SeriesZOO3
FCRHA
2.0-5.0
Lease
Revenue
06-01-33
116,965
105-4,240
70,830
Series 1999
Total revenue
HUD Section 108 Loan
5.10-5.55 09-15-96
3.70-4.8512-01-98
06-01-17
06-01-18
4.30-5.38 05-27-99
05-01-29
255-505
220-390
6,390
5,500
20-65
1.000
bonds
4.15-6.67
07-01-01
Bonds - Small District One of the Dranesville
(McLeanCommunity Center)
08-01-21
200.685
2.300
115
3.24 04-01-86
5.00 10-01-87
07-01-09
75
04-01-06
10-01-08
64
8
Total State Literary Fund loans
activities:
Bonds:
Revenue
118,535
5.00_5.6505-15-93
~~15-15,;:3,025_6!505
b~1~9'
·'::'2.
BOnai
Series 1995 Se~rTmprovements
Seriej2001 jubordinated
5.63-5.8802r0l-96
Series,ZPO Suboydi?ated
5,100
4.405
965
173.450
2,185
7,441
6,189
835
1.800
100.913
1.289
274.363
3,474
98
548
1,274
148
192
39
12
7
204
46
,574~
07_15-281.
72!100;_
-240,773
1,~10-7,306
:
104100~0
231
1.753,472
58,660
93,184
37,919
16;~8~
3.75 q9-01-g2 03-01-2
5(1,000 .1.--.... -49,119
TotalCountybond and loan Indebtedness
. :,i-:::;;:;-..:;.1-.:;·I
;:\1.:1-1;;·1:;1
-...::::::._ri::::
:·:..-;,:)·.I·::;::
:_:;:;·~::i~::
;::·:,--*.:--;';·:~.- :·:..-. ' i-:I51 ·i- :·'-
B 2,511,330
250
2,431.683
22,4
98147~
40,000
88173,538 .
19
678,211
81,113
A17,229
230,101)
4.:10d6-01-bi 02~-01-21 i;401-Z19'ld
-Prificiljal
aniliri~.t~;m8~ty
2,341
1,784
450
2.004.457
Series1993Refunding
.Oosn
140,398
47,705
1,500
1.422
Totalgovernmentalactivities
Sewer
48,248
70,830
Dis~ict
6.90-7.40 07-01-88
State Literary Fund Loans - Schools:
Science Lab #1
Science Lab #2
Business-type
92,150
Bonds:
Series 1996
Series 1998
Special Assessment
11-15-18 8 3,745-8,550
06-01-03
2,227~P5
191,659
~3sir
;· ..49,999 ;....:;:.· ..59.118
,1,012,044;. · . 3.244,789
Ir~i-
(inthoIZS~d~fostbeCounty'sgeri~eral
Obligation
bo4~, ~~
bonds, other bonds and loans, and Sewer System revenue bonds outstanding at June 30, 2003, are as
follows:
Governmental
RscalY
General Obligation
Bonds
Interest
2004
9 132,620
2005
128,421
2006
123,930
2007
124,125
2008
118,925
2009-2013
488,815
2014-2018
320,930
2019-2023
139,390
2024-2028
2029-2033
Totals
1
156
73,019
67,386
61,886
56,582
50,553
175,206
75,860
15,400
575
Activib~es
Revenue
Bonds
Interest
4,240
4,450
4,690
5,045
7,815
48,965
58,600
29,315
8,675
8,453
8,216
7,968
7,697
32,569
19,193
5,588
4,735
5 95
173.450
1,826
728
100.913
Business-Type
Other Bonds and
Loans
Interest
262
262
262
198
197
650
575
460
2
IV-61
Activities
Sewer System
Revenue Bonds
I
Interest
Total
Interest
163
151
136
123
111
417
244
61
11,842
12,288
13,055
14,319
15,115
90,405
98,679
97,335
23,632
23,025
22,386
21,701
20,993
92,574
68,273
44,682
148,964
145,421
141,937
143,687
142,052
628,835
478,784
266,500
1.406
98,361
22 4
474
20,613
954
338
103,096
28.469
Z
45
105,489
99,015
92,624
86,374
79,354
300,766
163,570
65,731
22,439
1
1 17
FCRHA Bonds, Notes, and Loans Sayable
InJune1989,theFCRHA
issued$6,120,000
of8.95percentElderlyBonds,Series1989k On
August 29, 1996,
on behalfof the Little RiverGlenproject,the FCRHAissuedFHA insured
principal
amountof$6,340,000
andinterestrateswhich
mortgage revenue bonds with anoriginal
varybetween4.65 and 6.10 percentwith finalpaymentdueSeptemberI, 2026;to redeem,through·
advancerefunding,the ElderlyBondson June 1, 1999.
InNovember
1992,theFCRHA
issued$3,910,000
ofspeciallimitedobligation
bonds,carrying
a
couponinterestrate of 7.5 percent,payablesemi-annuallyand maturingJune 15, 2018. The
proceeds of the bonds wereused to financethe purchaseof the FCRHA'sFenderDrive office
building.
InJune1998,
theFCRHA
issuedSeries1998LeaseRevenue
Bonds
withanoriginal
principal
amount
of$3,630,000
andaninterest
rateof4.71percent
withfinalpayment
dueJune15,
2018,to advance
refundtheoutstanding
speciallimitedobligation
bonds.Thenewbondsare
secured by the FCRHA's interest in payments underthe lease agreementsbetweenFCRHAand the
County,
whereby
theFCRHA
leasesitsFender
Driveoffice
building
totheCounty
witha firstdeed
of truston the officebuilding.Proceedsfromthenewbondsalongwithothercashresources,
escrowaccountsto provideforall
totaling approximately $4,000,000, wereplacedin irrevocable
futuredebtservicepayments
ontheoldbonds,whichwillberedeemed
onJune15,2018.These
bonds are not obligations of the County.
In August 1997,FCRHAissuedtax-exemptrev~nuebondswith a pi-incipalamountt~taling
$2,875,000with an intert~s~Sate
of 6.llpercentand final paymentsd;le fury i, 2027. The land,.
building,
~de~mentof.the
Hemdon
Harbor
House:
L;imited
Partnership
arepledged
assei~u;ity
for the bonds.· Proceeds from the bonds
wereplacedin ~i~evaca6le
escrowaccountsto tnakealoan
fin~ alpo~tion
of'~ecost~
:~imiteclPartnerS~ip.t6
to'the aernaon '~iiu;bo;i;;lI~cJluse
~f ~'rental f~cility.
construction,and~qu;ipp;ing
~hegi~~i~itioi~i,
inlipril199,1;~ i~su~d
tax-~i;t~~n~ ~b~rds
withapriiicipal
a~ount
to~ling
2028. In 2001,a
$1,700,000, an interest rate of 5.25 percent, and final paymentsdueh~larch~l,
priricipalpaymentof
$825,000was~ut;,at whichfiine'the~ ii~t~~st r8tewaS
changed to 6.15 pe~,
The land, building, and equipment of the Ca~teUani;Mea;iowsLimitedPartnership are pledged as
security for the new bonds. Proceeds from the new bonds were placed in irrevocable escrow ac-
countsto makea loantotheCastellani
Meadows
LimitedPartnership
tofinancea portionofthecbst
forthe acquisition,
construction,
andequippingof the rentalfacility.
InMay1999,
theFCRHA
issued
twomultifamily
housing
revenue
bonds
intheprincipal
amounts
of
$225,000 and $1,775,000, bearing interestat the rates of 4.875 percentand 5.5 percent,respectively,
andhaving
finalpayment
datesofMayi, 2009andMayi, 2029,respectively.
Theproceeds
of
these bonds were placed in irrevocable escrow accountsto providea loan to the HerndonHarborII
LimitedPartnership
tofinancea portionofthecostsfortheacquisition,
construction,
andequipping
of theHerndonHarborrentalproperty,whichis pledgedas securityforthebonds.
To permanently
financecertainpublichousingprojects,theFCRHAissuedpublichousingnotesto
the FederalFinancingBank. Thesenotes are payablein annual installments each November i, until
maturity in 2015,with interest at 6.6 percent. Theyaresecuredby theprojects'land,buildings,and
equipment.
Principal
andinterest
ispaidannually
byHUDundertheAnnual
Contributions
Contract.
To permanently financetheRosedalepublichousingproject,theFCRHAissuedpublichousing
bonds in the original principal amountof $1,260,000with interestat 5.0 percentmaturingApril 1,
byHUDundertheAnnualContributions
Contract.
2009. Principal and interest is paidsemi-annually
IV-62
PublicHousingbonds,notes,and loanspayableas of June 30, 2003,excludingits
component
units, are as follows:
Annual
Interest
Series
Housing
SecuredBy
Bonds
Rate (%)
Date
Principal
Original
Principal
Maturity
Payments
Issue
Outstanding
Date
(000)
LittleRiver Glen rental property
FCRHArevenues
Tax-exemptrevenue
Herndon Harbor I - rental property
bonds
08-01-97 07-01-27
5,760
3,010
944
1,961
6.15 04-01-9803-01-28
14-20
1,700
16,545
845
12.520
One University Plaza office building
United Community Ministries
5.75
4.71
11-01-97 01-31-04
08-25-98 04-01-13
13-18
20-35
Creighton
7.10
06-25-99
07-01-12
5.55
10-06-99
04-01-17
8.50
3.00
04-01-95 04-01-05
07-12-98 04-01-10
4.875-5.50 05-01-99 05-01-29
Payable:
United Bank
SunTrust Bank
Leland
Square
Road Group
Home property
Bank of America
Cholster
U.S. Dept of Housing
Springfield Green rental propertle!
Hopkins Glen rental property
and Urban Development
Various FCRHArental properties
6.45-9.15 02-01-92
varies
Various
5.36-7.66
08-01-96
varies
8.00-9.25
02-01-91
varies
FCRHA rental
properties
_1:_ :~1-_ ;i' .-; :: V~""FSRHL
renblblop.~. ;-·:1.73~7.90
~B~
:4.75-7.18
~~Tier
6~;01-9;4 ,'~a'rje-,
various FCHA rental properti~
5.36-7.66
varioulRrii~iP~'re~Cl;~r~pi;tre~
5.36-7.66:-08:0i~~
Cedarp(ge
renta(,pro~e~
Varlbi~s ~%riHAre~i~~ai~rop~ifies _,_
section·i6Bi~teri~nnanclng
Housing
Mlnerva
Development Authority
Fisher-Hall
Group
1.on
-";- 90%of
roperty
8.a7
Patrlcl(
Street.Group
Homeqroqe~:
432
615
530
7-12
35-49
1.072
1,112
796
302
285
5,690
2,555
50
500
150
55-205
1,700
555
05-24195
varies
155 3.100
195-265
~
va~es .
3,775
1.550
I. i,ii5
5
80
45
:25;
500
3i~
;varles
.1;510
Int. only
215
07-01-29 06-01-19
i-16
437 ~
i0.25.~'89-91_8 :1Dlql-i~ .
8.99 69-zi-oboBoi-io
: 16_25
5-29 ~
8.00 os-or-ozos-ol-zz
1.318
I
215
3-22
6~9~
i;i9
239
234
8.00
01-01-92
11-01-02
15-20
842
728
8.00
01-30-95
03-01-05
6-8
453
411
varies
varies
5-6
65
52
varies
varies
Int. only
178
178
10-01-02
12-02-02
10-01-05
10-01-16
Int. only
8
1.263
475
1,263
471
7.05 07-01-95 07-01-35
1.27 07-13-01 07-13-03
77-100
Int only
10,131
700
9,642
700
Unsecured Bond Anticipation Note
Unsecured Bond Anticipation Note
Unsecured Bond Anticipation Note
1.27
1.27
1.27
Int. only
Int. only
Illt. only
1.000
2,400
200
1,000
2.400
200
UnsecuredBondAnticipation
Note
1.27 03-07-0303-07-05
Int. only
400
400
Unsecured Bond Anticipation Note
Unsecured Bond Anticipation Note
Unsecured Bond Anticipation Note
1.27
1.27
1.27
Int. only
Int.only
Int. only
500
500
500
500
500
500
Home property
Home property
915
329
.·770
234
04-01-22
246
zii
Various properties owned by note
holders
9.00-12.50
Sun Trust Bank
Various properties - interim financing
Sun Trust Bank
Various properties - Interim financing 30 day UBOR
83% of
30 day UBOR
Hopklns
Glen rental
plus 0.5%
4.33
property
MidlandLoan Services
Cedar Ridge rental property
Fairfax County Board of Supervisors Unsecured Bond AnticipationNote
Unsecured
Bond Anticipation
Note
Unsecured Bond Anticipation Note
Cedar Ridge rental property
Federal FinancingBank
Property, plant, and equipment
Total mortgage notes payable - FCRHA
Loans
550
21-31
01-01-93
First Stop Group
WMFHuntoon Paige
30-40
8.00
West Ox Group
Loan Program
278
298
Home
;- Mount Vernon Group Hdme pyop'eity
Home Improvement
ij8r01-q6'
30ldayUBOR 08-23-9908-01-17
Penderb~qdk renfal pr6pert~: . ; ;. -- - :
RollingRoad droup iiome~property
Various note holders within the
363
400
Town, McLean Hills and
Stonegate Village rental property
Housing
6.340
3,630
2.000
CastellanlMeadows
6.10
100
125
2,875
Multi-family
revenuebonds
Totalbondspayable- FCRHA
Notes
4.65-6.10 08-29-96 09-01-26 9
4.71 06-15-98 06-15-18
16-30
Herndon Harbor II - rental property
Public
(000)
30-40
Multi-familyrevenuebonds
Virginia
(000)
Payable:
Mortgage revenue bonds
Lease revenue bonds
Mortgage
Issue
Total
Final
10-16-01 10-16-63
02-13-02 02-13-04
11-17-02 11-17-03
05-06-03 05-06-05
02-21-0302-21-05
03-20-03 03-20-05
1.27
05-06-03
1.27
7.05
06-26-03 06-26-05
11-01-70 09-01-10
05-06-05
6.60 07-09-82 11-01-12
Int. only
Int. only
90-100
40-55
800
800
1,000
2.850
1.000
797
1.143
48,508
599
35,337
2,348
1.309
1,260
3,608
370
1,679
Payable:
Public housing notes Federal Financing Bank
The projects' land, buildings, and
equipment
Publichousing bonds
Declaration of Trust
Total public housing loans payable - FCRHA
6.60
02-05-82 11-01-15
5.00 04-01-68 04-01-09
Totalpublichousingbonds,notes,and loanspayable- FCRHA
primarygovernment
IV-63
74-100
50-60
8 68.660
49,536
:
FCRHA'sannualrequiredprincipalpaymentson the bonds,notes,and loanspayable,excluding
its component units, at June 30, 2003, are as follows:
Component Unit- FCRHA(Primarv Government)
Housing Bonds
Mortgage Notes
Public Housing Loans
nscalveal
-p~T~a~L~e~ ~Tii~P~Y~
2004
2005
2006
2007
2008
2009-2013
2014-2018
g
p~e~--
P~n;i~T~Te;e~-
315,114
334,214
358,577
368,213
393,143
2,326,247
3,065,455
710,278
693;620
675,716
656,785
637,236
2,832,662
2.105,327
8,350,683
4,708,519
2,164,409
1,185,647
1,200,854
7,127,672
2,546,961
1,768,777
1,576,022
1,400,478
1,309,279
1,225,940
4,825,212
3,316,798
2019-2023
2,453,781
1,306,191
1,910,625
2,511,602
4,364,406
3,817,793
2024-2028
2029-2033
2,795,378
109,558
1,952,846
2,775,293
1,846,680
1,024,233
4,748,224
2,884,851
2,284.586
1,026,990
437,906
2,757
133,945
143,933
149,695
160,616
166,926
684,597
239,072
105,130
97,392
88,636
79,710
70,149
210,528
29,606
8,799,742
5,186,666
2,672,681
1,714,476
1,760,923
10,138,515
5,851,488
2,584,185
2,367,034
2,164,824
2,045,774
1,933,325
7,868,402
5,451,731
2034-2037
Totals
B 12.519.680
6.
10.058.478
35,337.263
20.911.182
1,678,784
681.145
49.535.727
3
Park Authority Bonds, Loans,~and Notes Payable
In February1995,the ParkAuthorityiss~~$ 23,8j0,000of Park FacilitiesRevenueBondS,Series
1995,to fundt~ieconstruction
of addition~il
golffac`iii~ti't~s
for i~ounqresidentsandpatt·ons.O~n
September_~O,
2C101,
theParkAuthqrityissued$13·015,OPO
of q~tkFacilitiesReven~e:`Refunding
)·utl)';
soI~ias,
SiaieS·iOi)l,
datedSepte~'ISil~l,wiUl~an a?ie~einterestiateof4.36pef.cenf:'tb
$11,6iO,C)00 of'the outstanding
refuna6.62
percentt
advance
Series :14;9;5Bonds with an averag'e interest
r~t~d f
In June 2003, the Park Authority received a $15,530,000 loan from the County to fund the
development8rid~
con~ctidn sf~apublicgolfco~i~is$iantl
rela~t~d:s~ctures,
facilitieo,'ai~d
equiliin~t':
to be located in the Laurel Hill area of the southern part of the County.
The bonds and loan are solely the obligation of the Park Authority and are payable from the Park
Revenue Fund's revenues from operations, earnings on investments, and certain fund balance
reserves. The debt service requirements for the outstanding bonds and the loan payable to the
County are as follows:
Unit-
Fiscal
Year
2004
Revenue Bonds
Interest Rate
4.39 % $
2005
2.95
2006
3.10
2007
3.20
2008
3.40
2009-2013 3.60-4.10
2014-2018 4.20-4.50
2019-2023
4.75
2024-2028
2029-2033
Totals
Interest
530,000
555,000
570,000
585,000
605,000
3,365,000
4,095,000
2,925,000
B 13,230,000
537,446
515,809
498,788
480,592
460,948
1,946,538
1.175,620
212,681
5.828,422
Park
Loan Payable to County
Interest Rate
Interest
%$
687,362
2.00
2.25
2.50-5.00
5.00
5.00
4.25
4.25
75,000
80,000
765,000
1,660,000
2,965,000
4,455,000
5,530.000
8 15,530.000
IV-64
687,362
687,362
687,362
685,863
3,382,863
3,134,563
2,597,063
1,762,050
724.625
15,036,475
Total
Interest
530,000
555,000
570,000
660,000
685,000
4.130,000
5,755,000
5,890,000
4,455.000
5,530,000
28.760,000
1,224,808
1,203,171
1,186,150
1,167,954
1,146.811
5,329,401
4,310,183
2,809,744
1,762,050
724.625
20,864.897
Q
During fiscal year 2000, the Park Authority issued a subordinated park facilities revenue note in the
amountof $12,750,000to financethe acquisitionof certainpropertiesfor use as park land. The note
wasredeemedduringfiscalyear2002viatheissuanceof a newnotein theamountof the maturing
principal
plustheaccruedinterest.Asimilarredemption
andissua~ice
occurred
in July2002.The
Countyhasagreedto providetheParkAuthoritywiththe fundsneededto meettheprincipaland
interestpayment
obligations
ofthisnotefromtheCounty's
GeneralFund.
Relevant
information
pertaining to these notes is as follows:
Issue Dates
MaturityDates
March 30, 2000
7.
~::
Q
Principal
Interest Rate
3uly 31, 2001 $ 12,750,000
6.825 %
~uly 31, 2001
3uly 31, 2002
13,912,667
3.810
3uly 31, 2002
3uly 31, 2003
14,442,740
2.030
Conduit Debt Obligations
TheFCRHA
isempowered
~ the
Commonwealth
ofVir~inia
to~issue~tax-ex~t
bonds
onbehalf
of
o;i.i~~~ta~1~iti~inl~fbe
tb ~~bD
II
interest-on
~i;e~x-ex~~t
~s ~p8ici.e~ti~bytheo~S:o~e e~;u~i~;~i~i~i~
intodi~g;~act~ ~t~j;~p:o~·~habilita~e
the~iibjct~ii~h~es.
~hete~rms
~~f
the,t~x~ii~ii~t'
; bands;stipi~l~e
thatneithet:
theFsRHAnorthe~~ g~~f~e~~ ~,~i~~jr~qj~Driricia~r.~
..; :
~`~::~i~d~`~hoib~r'~:~~l~.c'd~S~
n theeverit
of~~i~f~iii
o~:~~t;
:i~usi~e~s~s~e~~
ow
ahdbe~a~fici~es.t~e~:?borids5
bona~i~st~ ~tothe
repo~ asliabilities
inthe~;~~~i~~~~~:fi~cij':s!
;e
$174nililio;ri
of ~~ f~~o~
are ~~taiiailig.
~6·b~S
~~
to-s~sue
Indust;-ia?
R~t~niie,
B·~s~(j[~ s)
The EDA is e~~ow~r~~ by thCCommonwealth oSW~gjniB
on behalfof businessesrelocatingand/orexp~znding
theiroperationswithinthe County.Principal
andintereston theIRBsarepaidentirelyby thebusinesses.Thetermsof theIRBsstipulatethat
neitherthe EDA nor the Countyguaranteesthe repaymentof principaland interestto the
bondholders.Accordingly,
thesebondsarenotreportedas liabilitiesin theaccompanying
financial
statements.As of June 30, 2003,the principalamountsoutstandingon these IRBstotal
approximately $546.8 million.
8.
Defeasance
of Debt
Duringfiscalyeat2003andinprioryears,theCountyhasdefeased
certainoutstanding
bondsby
placingtheproceeds
ofnewlyissuedbondsin irrevocable
escrowfundstoprovideforallfuturedebt
escrow fund assets and the liabilities for the
servicepaymentson the oldbonds. Accordingly,the
defeasedbonds are not includedin the financialstatements.As of June 30, 2003,the amountof
generalob~gation
bondsfortheCountythatareoutstanding
butconsidered
defeased
is
$178,955,000.
9.
Sanitary Landfill Closure and PostclosureObligation
StateandfederallawsrequiretheCountytoplacea finalcoveron its I-95SanitaryLandfillwhenit
andmonitoring
functionsat the sitefor 30
stops accepting wasteandto performcertainmaintenance
yearsafterclosure.Theexisting
rawwasteunitsarefilledtocapacity;
whereas,
theashdisposal
IV-65
continue to be used. As of June 30, 2003, closure expenditures have been incurred for
approximately 55 percent of the area involved. The County holds permits that allow it to continue
using the landfill until approximately 2020.
The $62.7 million reported as the landfill closure and postclosure obligation at June 30, 2003,
representsthe total estimatedcost remainingto be incurredbasedon landfillcapacityused to date.
The actual cost may vary due to inflation, changes in technology, or changes in regulations. It is
expected that the landfill closure and postclosure care costs will be funded from landfill tipping fees
and existing resources.
10.
Obligations Under Capital Leases
The reporting entity has financed the acquisition of certain capital assets by entering into capital
lease agreements. The balance of capital assets, net, and the minimum obligations under these
capital lease agreements as of June 30, 2003, are as follows:
Primary
Government
Governmental
-
Activities
Component
Public
Balance
Asset
Class
2003
9
Buildings~
::
at 3une
26,gj6;:~~C~i:
32,1321841
Less: AcClim
~(ated~:de
p;rediatlon
26
Totalii
) ·
:::
2,643,193
Equipment
i
2004
30. 2003
3,261,336
Improvements
; : :. ::~:
Balance
at3unel
Land
Unit -
Schools
819
· ::iFis~alY
-··;; --··- \'::
····
· -;. ·:·-:I::--;.::.i. -···:.-···::
21,993,306
-·
~L:
iii'f.Ci~
.;--..·-.ti~
.· :
... ;;1
8
2005
6,697,254
2006
6,69r;194
7,e65,325~
2007
3,790,236
3,805,486
2008
8,427,415
2,903,183
2009-2013
11,827,637
2014-2018
10,692,205
2019-2023
10,692,525
2024-2028
10,422,298
2029-2033
5.443
Total minimum obligations
Less: Portion representing
Present value of minimum
11.
i. -
interest
obligations
80,237,043
34
755
138.288
30,198,497
219.444
27.979
Obligation to Component Unit
The County has a liability of approximately $4.9 million to the Public Schools that originated in
1983 upon the recognition of teachers' compensation in the year services are rendered rather than
over the twelve-month contract period ending in August. The County agreed to fund the original
liability of approximately $46.4 million over a period of years beginning in fiscal year 1984.
Payments to Public Schools were deferred from fiscal years 1990 through 1996. In fiscal year 2003,
the County paid the seventh of ten equal annual installments of $1.62 million from the General Fund
towards the remaining liability. This Ziabilityis included with "other" long-term liabilities in the
statement
of net
assets.
IV-66
LONG-TERM COM~MEN~I~S
i.
Washington Metropolitan
Area Transit Authority
(WMATA)
The County's commitments to WMATAare comprised of agreements to make capital contributions
for construction of the rail transit system, contributions for replacement and improvement of rail and
bus equipment, and payments of operating subsidies and debt service for the rail, bus, and paratransit
systems. The County's commitments in each of these areas are summarized below.
Capital Contributions-
Rail Construction
Since 1970, the County and other localjurisdictions have entered into five Interim Capital
Contribution Agreements (ICCA) with WMATA. These agreements are to provide local funds to
match federal government appropriations to fund the construction of the 103-mile Metrorail Adopted
RegionalSystem. The final 13.5 miles of construction were funded through ICCA-V and Public
Law 101-551. In approving ICCA-V, the jurisdictions agreed to provide local matching
contributions totaling $780 million over the life of the authorization. The agreement requires the
county to provide $113.2 million in matching funds between fiscal years 1993 and 2004. The
County is providing this match through a combination of state aid, state bonds, and locally generated
funds.
~~~~:l~l~f
--c~i~~~~
~P~i~ji~~$1.'31~~8dasfunded
~:~~
i~:%~~tions
todpteof
agpro~atejy
$2j8.5
; i.
--.:
.1.·
,fat~::
:ai~~pi~j;~~i~~s~
ta thel~ai~~ th~;ou~j~i~
ti~e~Jgrt~;eI~I1
: :; :-:::::;::.:
-:i
aiid$5'l':~iisn;~cie~~s
ss
6fJui~,s
1S
~ ~~ditidi~d~ $1.OtoM
i~g;i~t~to :d~iit'i~ri~ibu~ei
:'-r~:~·~~~~'~;~~igat~oh~~;is:I
i·e
fro~Ilpr~viaedi4lt~~~ ~
~---i;i::::-
::r3aD~ta~,:li7~,~_~'t~.~b;u~~;`~i~:~jt~
~~~~~ii:~eol~ic~I~I~tlan·d
~t~e~iitatioi~
Each fiscal year, the County makes contributions for capital purchases for WMATA'sbus system and
to improvethe reliabilityof capitalequipment.The County'sobligationof approximately$8.4
million for fiscal year 2003 was funded with $7.1 million of County general obligation bond
proceeds and $1.3 million of state aid provided through the NVTC. It is anticipated that the
County's obligations for fiscal year 2004 will be funded with state aid and County general obligation
bond
funds.
ODerating· Subsidies and Debt Service
The County and other localjurisdictions continue to contribute toward WMATA'sdeficits resulting
from the operation of the Metrorail, Metrobus, and MetroAccess (paratransit) systems and the'debt
service on federally guaranteed transit revenue bonds issued by WMATA. For fiscal year 2003, the
County's obligation of approximately $52.4 million for operating subsidies and debt service was
funded with $10.7 million from the County's Metro Operations and Construction Fund and $41.7
million from state aid for transportation and regional gasoline tax receipts. It is anticipated that the
County's expenditures forfiscal year 2004 will be approximately $12.3 million.
IV-67
::
Virginia Railway Express (VRE)
The County, as a member of the NVTC andin cooperation with the Potomac and Rappahannock
Transportation Commission (PRTC), is a participating jurisdiction in the operation of the VRE
commuter rail service. The service primarily consists of rush hour trips originating from Manassas,
Virginia and from Fredericksburg, Virginia to Union Station in Washington, DC. There are five
stations in Fairfax County.
In October 1989, the Board of Supervisors of Fairfax County approved the Commuter Rail Master
Agreement and financial plans. The Master Agreement requires the County to contribute to capital,
operating, and debt service costs of the VRE on a pro rata basis according to its share of ridership
and population. In February 1990, NVTC sold $79.4 million in bonds to finance passenger cars,
locomotives, yard facilities, and stations. Approximately $6.0 million of the bond proceeds were
made available to the County to assist with financing its localstations. The County's fiscal year
2003 contribution to VRE's commuter rail operating, capital, and debt service cost was $2.6 million.
Also, the County has been authorized to apply $5.2 million of general obligation bond proceeds
toward the cost of commuter rail facilities within the County. Through June 30, 2003, approximately
$3.9 million of this amount has been expended.
3.
Operating
Lease Commitments
TheCountyandtheEDAleaseIieal~s~under:various;!ong-term~se:~em~ji~nts.
Certainlease-S:
:
containprovisi'ons
w~tl~ch
allowforincreasedrentalSjhaseq`~poII~inc~ses
in reai~estate
taxesandth;~
ConsumerPrickIndex. All leaseobligationsare contingentuponthe Boardof Supervisors
appropriatiing
funds,for~each
fiscalyear'spayments.Forfiscalyear2003~,·t~e
C~n~tyls
andEDA's
totalexper;di~tulies~
:~f~or
theseoperatingleases.wer~
$i 11041~,5i4
and$8~1;5181
re~jpectively.
At
June
30.
2003
the mininium
leases were aS fc;llowS:
long-term
real
e~ le~e~~ntsaccounted
foras9p~ating a
Prima
Fiscal
Year
2004
Governmental
$
Compbnent
Activities
EDA
Unit
9,851,415
787,850
2005
7,953,321
882,058
2006
7,198,739
902,762
2007
5,842,397
929,845
2008
4,499,205
834,528
2009-2013
9,933,804
834,922
2014-2018
3,316,982
2019-2023
564,186
2024-2028
274,853
2029-2032
123.684
Total
4.
~Government
Intermunicipal
49.558
5.171.965
Agreements
City of Alexandria. Vireinia. Sanitation Authority
The Sewer System is obligated under an agreement with the City of Alexandria, Virginia, Sanitation
Authority (ASA) to share the construction and operating costs and debt service requirements for its
sewage treatment facility. Currently, the Sewer System has a capacity entitlement of 32.4 MGD,
which is 60 percent of the facility's total capacity of 54 MGD. The Sewer System is allowed only
IV-68
Q
one non-voting representative at the meetings of the ASA and has no significant influence in the
management of the treatment facility. In addition, the Sewer System has no direct ongoing equity
interest
in the assets
or liabilities
of the ASA.
The ASA facility is currently undergoing major improvements to meet new water quality standards.
The Sewer System paid the ASA $13,238,249 in fiscal year 2003 to fund its share of the construction
costs, and it estimates its share of the remaining construction costs to be $35,350,000, of which
$21,600,000 is expected to be incurred in fiscal year 2004 and the balance over fiscal years 2005 to
2009. In addition, the Sewer System made payments of $10,219,480 to the ASA during fiscal year
2003 for its share of the ASA's operating costs.
District of Columbia Water and Sewer Authority
The Sewer System is obligated under an intermunicipal agreement between the County; the District
of Columbia (District); Montgomery County, Maryland; Prince George's County, Maryland; and the
Washington Suburban Sanitary Commission to share the construction and operating costs of the
District's Blue Plains Wastewater Treatment Plant, whichis operated by the District of Columbia
Water and Sewer Authority (DCWASA). Currently, the Sewer System has a capacity entitlement of
31 MGD, which is approximately 8.4 percent of the Plant's total capacity of 370 MGD. The
DCWASA has a Board of Directors comprised of six members from the District, two each from
Montgomery
andPrinceGeorge'sCounties,andonefromtheCounty.TheCountyhasno_~i~fjc~t::;_
.1: :~orif~dl
Qverplantoperafionsandc·ils~'~ifid~no ow~rshiiii~st~:in ~heas~tS,~ D~~,
--.·ii
:
. -.
:--·-
··-
Anexpansion
of-the~luePlains;Plan~~ror~
Y2~~ldDto:376I~;GD·
wascompleted
ilu~ngi~s~al
year
eoo3,andtheElaritis ~ur~ent~y
~~~~gi~~ li~o~y~i~~~p~~itschemiciil
additiijnsaiid
sl~dge~'
~: :--:1: :
: :the~a~~Sa
$la,102,6ij81~ri~·
fisc~5~.290~3-~
~..::-_:.:
funditsSh`are
oj~
cdnstiuctio:n:6ss:~~;:grid
it~k~ti~rri~le~s
itssha~of~herem~unmg
CoI~sfiuction
c·b~i~.~o.
: :
:be940,000,
' of which
~ji,~~~~Q~istolbe
incurred
in
fiscal
Leair~2004;anii:t~hebalani~e
:I
DC\NASAduring fiscal year 2003 for its share of.the'Plant'spperating costs.
UDDer Occoauan Sewag-eAuthoritv
As described in Note A, the Upper Occoquan Sewage
Authority (UOSA) is ajoint venture created under the
provisionsof the VirginiaWaterand WasteAuthorities
Act to be the single regional entity to construct,
finance,andoperatetheregionalsewagetreatment
facility for the upper portion of the Occoquan
Watershed.Anexpansionof thecapacityof UOSA's
treatmentfacilityfrom 32 MGDto 54 MGDwas
Member
Capacity
MGD
~urisdiction
Fairfax
County
Prince
William
27.5999
15.7971
County
City of Manassas
City of Manassas
Total
7.6893
Park
2.9137
1
54.0000
completed during fiscal year 2003. Each jurisdiction's
allocated share of UOSA's capacity as of June 30,
2003, is as shown on the right.
UOSA's current operating expenses, construction costs, and annual debt service payments are funded
by each of the participating jurisdictions based on their allocated capacity, with certain
modifications. The Sewer System made payments to UOSA in fiscal year 2003 of $7,593,754 to pay
its share of UOSA's operating costs.
IV-69
UOSA financial information as of and for the years ended June 30, 2002 and 2001 (the
most recent audited financial
information
available),
is as shown below.
2002
Total assets
Total
$479,614,218
liabilities
1 (389,882,667)
Total equity
Total
revenue
Total
expenses
Net
1$89,731,551
$50,093,649
1
income
1$
2001
476,454,006
(391/,135,178
79,318
45,276,862
(29,023
21.070,599
18,987
Arlinpton County. Virginia
The Sewer System is obligated under an agreement with Arlington County, Virginia, to share the
construction and operating costs of the sewage treatment facility owned and operated by Arlington
County. Currently, the Sewer System has a capacity entitlement of 3 MGD, whichis 10 percent of
the facility'stotal capacityof 30 MGD. The SewerSystemhas no direct on-goingequityinterestin
thefacility's assets~ilidliabilities;·F~l~rmoi·~,:il~e~ewe~·~~
Sy~t~mhasno signific-t~influence~civ~ithe management of the treatment facility.
TheAf~lingtQnf~ility
is~ntly
u!d~oinga maJor~gr~
t~t~
meet new waterquality~~dl
TheSewer~SyStkm:~d~ni~to;h
Cohrity
$794,39din
fiscalyear:~03tb:~ndits~s~iare
cdf:tlhe
construction costs, and it estimates its share of'the remaining
costs to be $2~,i00,060;
c~nstruction
ofwhich$!,700,0q0:is
expected
tobeincurredin
fiScalyear2004andthebalanceoverfiscalyears
ai)i)~i-'-f~
~9;; :Inadd~tion,
theSewei'Sys~:t~m
m~idk
paymentsof $960,888toArlingtonCQunf~c·I:'
during fiscal year 2003 for its share of Arlington's operating costs.
5.
Fairfax County Solid Waste Authority (SWA) - Resource Recovery
Duringfiscalyear 1999,as a resultof a call option,the EDAissued$195,505,000of 1998SeriesA
Resource Recovery Revenue Refunding Bonds, the proceeds of which, together with certain other
available funds, were used to refund all remaining outstanding 1988 Series Bonds, which were
initially issued to finance the construction of a 3,000 tons-per-day mass burn facility at the County's
landfill site near Interstate 95. The operation of the facility by an independent contractor
commenced in 1990. Solid waste is burned to produce electricity, which is sold to a local utility
company.
The bonds are not an obligation of the County; however, the County is obligated to deliver a
minimum annual tonnage of solid waste to the facility and to pay tipping fees for the disposal of such
waste sufficient to cover the operating costs of the facility and the debt service on the bonds. As of
June 30, 2003, $150,405,000 of the 1998 Series A Refunding Bonds are outstanding. Unspent bond
proceeds in the amount of $31,381,553, which include investment earnings, are reported in the
Resource Recovery Fund, an agency fund; certain unspent proceeds are reserved for debt service and
the remainder is available for solid waste disposal purposes.
6.
Long-term
Contracts
At June 30, 2003, the primary government had contractual commitments of $24,331,476 in the
capital projects funds and $146,351,000 in the Sewer System for construction of vdrious sewer
projects. At June 30, 2003,the componentunits had contractualcommitmentsof $71,960,622and
IV-70
$17,470,630
inthecapital
projects
funds
ofthePublic
Schools
andtheParkAuthority,
respectively,
for construction of various projects.
7.
Other Post-employment
Benefits
to subsidize
thehealthbenefitcoverage
of
The Board of Supervisors has established a program
certain retirees and certain surviving
spouses.
In orderto participate,
retireesmusthavereachedthe
age of 55 or be on disabilityretirementand must have health benefit coverage in a plan provided by
theCounty.
There
isnominimum
number
ofyears
ofservice
required
toparticipate
inthisprogram.
Theprogramallowsfora $100permonthsubsidyper participantand is fundedon a pay-as-you-go
basis.Thereare1,819
participants
currently
eligible
andreceiving
benefits
intheprogram.
For
fiscalyear2003,thecostof thisprogramto theCountywas $2,197,557.
a programto subsidizethecontinuation
of term
In addition, the Board of Supervisors hasestablished
Retireesgenerallypay for fifty percentof
life insurance, at reduced coverage amounts, forretirees.
rates,
with
incurring
thebalance
ofthe
their coverage amounts at age-bandedpremium theCounty
approximately
2,500
participating
retirees,
and
the
costof
cost on a pay-as-you-go basis. Thereare
thisprogram
totheCounty
forfiscal
year2003wasapproximately
$200,000.
K.
CONTINGENT LIABILITIES
:The:~ou~;is
d~geI~tly
li~:~~~~~~
of its ope~ationS.
wshifs
intheogof
·
m`i~tte'rsis not'gres'ently~lejrerrninable.
~4~9Ug~~~thesutcomeofthe~
a mate~i;:~~`~~~t on~i~e-~ou~'
County
manag~t; thereSb~~:~these~~r;s:;~~~rnot~~ave
.l---:..- : ;fioanci~,conditian.
::
principally
TheCounty
receives
grant
funds,
:;:::
:: ··:
~for
constructiqnland
va;ious
bti~e;
g,ernment,
:
from the federal
·
to~~y the~gti~r:and~he~~;t~iis ;2i:
programs.
Certain
Bxp~~~ ofthesg~s are~bject
of·ti;krii~S e
`In
c~dii~t`idge'rittit;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;~i~.;l~.tecelmj~c~ss
a res~t of-expend~tures
disallo~edtiythe
management,
L.
no material
refunds
will
:: .
grap~~.l:
ber·4·ired~
:: ·
SPECIAL ITEM
In June 2003, the County sold 46.8 acresof landlocatedin theLaurelHillareaof thesouthernpartof the
Countyto a privatedeveloperfor developmentas a seniorlivingcampusandgraduatedcarefacility.The
saleproceeds
of$18.2millionwillbeusedtofunda portionof thecostof thepublichighschoolbeing
constructed on adjacent land.
I~
IV-71
ii
~!\
E·,
~
O
~tj
la~
V
BOOK-ENTRY
ONLY SYSTEM
The DepositoryTrust Company("DTC"),New York,NY,willact as securitiesdepository
for theBonds
(the"Bonds").
TheBondswillbeissuedasfuily-registered
securitiesregisteredin the nameof Cede & Co. (DTC's
partnership nominee) or such other name
as
may
be
requested
byanauthorized
representative
of DTC.Onefullyregistered Bond certificate will be issued
foreachmaturityof theBondsandwillbe depositedwithDTC.
DTC is a limited-purpose
companyorganized
underthe NewYorkBankingLaw,a "banking
organization"within the meaningoftrust
the New
YorkBanking
Law,a member
of theFederal
Reserve
System,
a
'%learing corporation" within the
meaning
oftheNewYorkUniform
Commercial
Code,anda "clearing
agency"
registeredpursuantto the provisionsof Section 17A of the SecuritiesExchangeAct of 1934. DTC holds and
provides asset servicing for over 2 million issues
of U.S.andnon-U.S.
equityissues,corporate
andmunicipal
debt
countries
thatDTC'sparticipants
("Direct
Participants")
deposit
issues,and moneymarketinstrumentsfrom over 85
withDTC.
DTC
alsofacilitates
thepost-trade
settlement
among
Direct
Participants
ofsales
andother
securities
transactions in deposited securities,
through
electronic
computerized
book-entry
transfers
andpledges
between
Direct Participants' accounts. Thiseliminates
the needfor physicalmovement
of securities
certificates.
Direct
Participants include both U.S. and non-U.S,
securities
brokersand dealers,banks,trustcompanies,
clearing
corporations,and certain other organizations. DTCis a wholly-owned
subsidiary
of TheDepository
Trust&
C'earln8Corporation
("DTCC").DTCC,in turn,is owned~
by a numberofDirectPartidipahts;ofDTC-andMembers
of the Natio~~~'
:~ecuritie$
'leii~l~irig
:b·~,di~:~:t~;;nl:-`cove;n~iient:
Secinities
Clearii~!g:(Co~IjorB~j~,~,:-~~
~';::;-;-
:: ~~?.~
~i~~~~
4~~a~n
(NS~,
~~CI
~SCC,
andEMCC,:a)So
~sidi~~i; ~
DTCC),
as w~llas~t~y
theP~ew'-i~iC;rk
StockExchange,
Inc;,theA~I~:~car;~'stocicBxchange
:L~C,andtheNalid~i~~i.
As·oc;t~t~~~
df SecuritiesT~~
Irr~.~l:~~.tci.
the~~ISys~:is:
alsoaiai~ieto;~ers su~h
as.bat~~:rriid
non-u.s.
:~t~sa;dk~:~
~i~~-:~t
companies,.Bdd
D~i~:cqrporatlons
~:cl~i~'~"-:1
~.:-.
maintain
a custddizil
;elat~dnshtp
witha D~e~l~F~rt~c~Bn;,;
eitherdirectly
or iridi~ctly
('?ndire~
Partici~i~it~~.l:
DTCh~sS~tandatd'
&Poor's;highest
~: -~.
-;·::*
TheDTC
Rules
ap~icable
toitsParticipanfs
aredn.file
~~~
-:;:~kc~~a~t~~~~ci~i~Co~trirrii~3slidn;i
Mori~~~r~g~n
a6;'ou~t~iDTd
csii
be'found ai ilviiBj'dtce.com.
Purchases of the~BondsI~cl~r:the Td
System:must
berri~de:~by
orthr~h DirectPafticipants,
~NhiCh_~~
receivea credit for the:Bondson DTCls records.
The ownership
interestof each actual purchaserof each Bo;i~'
("BeneficialOwner")is in turn to be recordedon the Directand IndirectParticipants'records. BeneficialOwners
will not receive writtenconfirmationfrom DTC of their
purchase.BeneficialOwnersare,however,expectedto
receive written confirmations
from the Direct or Indirect
Participant
through
whichtheBeneficial
Ownerentered
intothetransaction.
Transfers
of
ownership interests
providing
details
ofthe~ansaction,
aswellasperiodic
statements
oftheirholdings,
in theBondsareto be accomplished
byentriesmadeonthebooksof DirectandIndirect
Participantsacting on behalf of BeneficialOwners.
Beneficial
Ownerswillnotreceivecertificates
representing
d~onq~Nnnuee~s~hiP
interests
intheBonds,
except
intheevent
thatuseofthebook-entry
system
fortheBonds
is
To facilitate subsequent transfers, all Bonds deposited
byDirectParticipants
withDTCareregistered
inthe
name of DTC's partnershipnominee,Cede & Co., or such other name as may be requestedby an authorized
representative of DTC. The deposit of the Bonds with DTC and theirregistrationin the nameof Cede & Co. or such
otherDTCnomineedo not effectany changein beneficialownership.DTChas no knowledgeof the actual
recordsreflectonlytheidentityof theDirectParticipants
to whoseaccounts
Beneficial Owners of the Bonds; DTC's
suchBondsare credited,whichmay ormaynotbetheBeneficial
Owners.TheDirectandIndirect
Participants
will
remainresponsible
forkeepingaccountof theirholdingson behalfof theircustomers.
Conveyance of notices and other communications
by DTCto DirectParticipants,
by DirectParticipants
to
IndirectParticipants,
andby DirectParticipants
andIndirect
Participants
to Beneficial
Owners
willbegoverned
by
arrangements
amongthem,subjecttoanystatutory
orregulatory
requirements
asmaybeineffectfromtimetotime.
Redemption notices
is to determine
shallbesenttoDTC.IflessthanalloftheBonds
arebeingredeemed,
DTC'spractice
bylottheamountof theinterestofeachDirectParticipant
in such
V-l
issue to be redeemed.
DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds
unless authorized by a Direct Participant in accordance with DTC's Procedures. Under its usual procedures, DTC
mails an Omnibus Proxy to the County as soon as possible after the record date. The Omnibus Proxy assigns Cede
& Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the
record date (identified in a listing attached to the Omnibus Proxy).
Q
Principal and interest payments on the Bond will be made to Cede& Co., or such other nominee as may be
requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon
DTC's receipt of funds and corresponding detail information from the County, on the payable date in accordance
with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be
governed by standing instructions and customary practices, as is the case with securities held for theaccounts of
customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of
DTC or the County, subject to any statutory or regulatory requirements as maybe in effect from time to time.
Payment of principal and interest payments to Cede & Co. (or such other nominee as may be requested by an
authorized representative of DTC) is the responsibility of the County, disbursement of such payments to Direct
Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be
the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as depository with respect to the Bonds at.any time by giving
reasonablenotice to the County. Under such circumstances, in the event that a successor depository is not obtained,
Bond certificates are required to be printed and delivered.
decide
~:~c~
Thi: %ountqririaiy
~)~a~:t~::
systein:~-b~entj
tran~ ~:~(~-..
successorsecuiitiesdepository).
Ia:thate~t, Bondceitifi~cate-S;
willbeprintedanddklive~-~dt
~he infonizatibii `in this Section co~clm~tzgDTC ~i~i~~TC's ooqk-entry system has beeiz dh~5~ei~from'
sources
thattheCountrbelieves
to;.
bereliable;lbui-ti~e
~
tizkes
no're~pbnsibil~t~for
t~ieaccui·i~i~
~t~te~~
Q
v-2
VI
jp
SIDZ~EY
AUSTIN BROWN& WOOD LLP
LOS
ANGELES
787 SEVENTH AVENUE
eEryING
NEW YORK, NEW YORK 10019
TELEPHONE212 839 5300
BRUSSELS
CHICAGO
NE~l~i~"
SANFRANCISCO
FACSIMILE 212 839 5599
SHANGHAI
www.Sidley.com
DALLAS
SINGAPORE
FOUNDED
GENEVA
1866
TOKYO
HONGKONG
WASHINGTON,
D.C.
LONDON
2004
Board of Supervisors
of Fairfax County, Virginia
Fairfax, Virginia
Wehave
examined
certified
copies
ofthelegal
proceedings,
including
theelection
proceedings
andother
proofs
submitted,
relative
totheissuance
andsaleof
$326~335,00qT,
;::. 1
Fairfax"eo6jhtjr,
'ji~rgin~
Public~mprdire~ni~
a~d~~i~ig -8orias,Se~e~109;4.B
in annualinStallments
~ October
1.i~~h Ofthe
The bondS.z~edatedthe date of their deli~,:m:mature
ye~, ~:
~pi~ilm~ii~h
'i~i~st~~il4~~~t~Onfhe1
2005 :to~4,-~c~Sive,`~
years;:·upon
~le~bn pilbrtot~eir.reSp;;~~ti~v~.'r;latlirifiks
in:t~ie'insriner
b:.
,~mme,ing
April
i, 2005,
andare~s~dct
theissuance:
Oftheb~s ~~bg theBoard
of
the:re:olutignauthorizing
proofs~show
lawfulaulbority
fortheissuance
and
saleof
andid
We areof theopinionthatsuchproceedings
andthatfl;e~70~:~fs~c~;ins~:iij~~'vaii~
a~ b~;gerierlil
the terms and conditionssetorth in
bii Sepfembei13j~00~4,
bf~8i~fax~i~oLt~t3
. ;. : Sup;krvisdiS
·
:-::I~:
the:bbnds
puisuant~to
thedonsCtution
ai~d
laws
ofpayment
Viiginia,
for
the
ofwhich
thefullfaithandcredit
ofsaidCounty
are
obligations
ofFairfax
County,
Virginia,
subject
to
the
levy
of
an
ad
valorem
tax,
without
limitation
as
to
pledged,
andalltaxable
property
in
the
County
is
the
bonds
and
the
interest
thereon,
which
tax
shall
be
in
addition
to
all
other
taxes
rate or amount, for the payment of
totheextent
otherfundsofsaidCounty
arenotlawfully
available
and
authorized to be levied in said County
appropriatedfor suchpurpose.
Wearefurtheroftheopinionthat,exceptasprovidedin thefollowingsentence,interestonthebondsis not
includable in the gross income of the owners
ofthebondsforpurposes
ofFederal
income
taxation
basedonexisting
incomeof theownersthereofretroactive
to thedateof
law. Intereston the bondswillbe includablein the gross
issue of the bonds
event
ofa failure
bytheCounty
ortheschool
board
oftheCounty
tocomply
with
in the
Revenue
Code
of1986,
asamended
(the"Code"),
andcovenants
regarding
applicable
requirements
of theInternal
and
the
timely
payment
of
certain
investment
earnings
to the
use,expenditure
andinvestment
of bondproceedstotheexclusion
fromgrossincome
ofthe'interest
onthebonds
UnitedStatesTreasury;andwerenderno opinionas
for Federal
income tax purposes
on
orafterthedateonwhich
anyaction
istaken
affecting
suchcovenants
upon
the
Interest
onthebonds
isnota specific
preference
itemforpurposes
ofthe
approval
ofcounsel
otherthanourselves.minimum
taxes.
TheCode
contains
other
provisions
thatcould
result
in
Federal individual or corporatealternative
resultof ownership
of bondsor theinclusion
in certain
taxconsequences,
as to whichwerendernoopinion,
as athecorporate
alternative
minimum
tax)ofinterest
thatis
computations
(including
without
limitation
those
related
to
excluded from gross income.
Respectfullysubmitted,
VI-1
~ar1CritIo~iu~~
e$·rrd
s-y~I:
Appendix VII
CONTINUING
DISCLOSURE
AGREEMENT
This Continuing Disclosure Agreement (the "Disclosure Agreement") is executed and delivered by Fairfax
County, Virginia (the '%ounty") in connection with the issuance by the County of ~
aggregate
principal amount of its Public Improvement and Refunding Bonds, Series 2004 B (the "Bonds" or "2004 B Bonds")
pursuant to the provisions of a resolution (the "Resolution") adopted on September 13, 2004, by the Board of
Supervisors of the County. The proceeds of the 2004 B Bonds are being used by the County to finance various
public improvements in the County. The County hereby covenants and agrees as follows:
SECTION 1.
Purnose of the Disclosure Ameement. This Disclosure Agreement is being executed and
delivered by the County for the benefit of the holders of the 2004 B Bonds and in order to assist the Participating
Underwriters (defined below) in complying with the Rule (defined below). The County acknowledges that it is
undertaking primary responsibility for any reports, notices or disclosures that may be required under this Agreement.
SECTION 2.
Definitions. In addition to the definitions set forth in the Resolution, which apply to any
capitalized term used in this Disclosure Agreement unless otherwise defined in this Section, the following
capitalized terms shall have the following meanings:
"AnnuayI~epOrfl'.,
shall mean any AnnualReportpro~dpy
Sections3 and 4 of ~~i;s;
DisdlosureAgreement.
the Countypursuant;o,and as described:in,
::
--I :i-
"Dissemination Agent" shall mean phe County, acting in its capacity as Dissemination Agent ~iereunder,~or
·ay sll~ai~iss~n
~ent ~j~
writteri~i~·~e~taiics
or~such
d--~r;a~o~i~:
;~\I
.Date"Shall
:
havethe
meanmg
I-''": ';.-: :: ·':-:-
i~~~
~~~:~
Aihich'has:filed:witli-~~:~.l:'_
; i;
g"BE~~(aj
"Fiscal Year'l Shallmean the twelve_monthperiod~atthe end::f`whii~h
financialpositiona~;resul~So~
;i;
c~,peiatiopsa~:e~;ete;~ni~n~~.
~.ei~ir~~~jr,'lhe
Cbui~t~'s.~sca;i
:Ykai·
i;~s ~ulyi lu~:coI;tiiiues
~th~ou~h'2u~:30
~'ti~e~`
next calendar
year.
"Holder" or "holder" shall mean, for purposes of this Disclosure Agreement, any person who is a record
owner
or beneficial
owner
of a 2004
B Bond.
"Listed Events" shall mean any of the events listed in subsection (b)(S)(i)(C) of the Rule, which are as
follows:
principal and interest payment delinquencies
non-payment related defaults
unscheduled draws on debt service reserves reflecting financial difficulties
unscheduled draws on credit enhancements reflecting financial difficulties
substitution of credit or liquidity providers, or their failure to perform
adverse tax opinions or events affecting the tax-exempt status of the 2004 B Bonds
modifications to rights of holders
g
bondcalla
VII-1
release, substitution, or sale of property securing repayment of the 2004 B Bonds
rating changes
"NationalRepository"shall meanany NationallyRecognizedMunicipalSecuritiesInformationRepository
for purposes of the Rule.
"ParticipatingUnderwriter"shall mean any of the original underwritersof the County's 2004 B Bonds
required to comply with the Rule in connection with the offering of such Bonds.
"Repository" shall mean each National Repository and each State Repository.
"Rule" shall mean Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as the same may be amended from time to time.
"State Repository" shall mean any public or private depository or entity designated by the State as a state
depositoryfor the purposeof the Rule. As of the date of this Agreement,there is no StateRepository.
SECTION 3.
:·
Provision of Annual Reports.
i:-l
::
·;-·
:·· ·-I·;;
j· il·::: 1:: :
:·· . ·:·
~A. TheCoui~tl
3hall,or shallc~i~S~~~fhe
:Diss~ri~$~::~e~tp~p~p~ovicle
to:ea~hi~k~
ai~
::,xn~~z!li~i~,e~l~:j~t~-~i~ch~
is:d0I;8lst~i~f
iy~i~
ther~ci~~ ()fSe~tioI~;4.~f
tf~tf~~::~;Sc~b~i;f~.'
q~m~nt: Such~P;r;n~u~l::·:Report
shallbeNedona dateI~~F~ilin~~ja~
thatisnoti;a~thanM~ iji`fter:ti;e~knd
ofanyFiscalYear
the(if:r~
~l~cail~fOvii~ethe~nnQal-i~R~p6rt`~to
s~ ~ca~,~t~ieAn~u~l
ci)maybe~u~;nitted
asa single
document
orasseparate
~Gm~n'ts
~risincr_4eack~p~~,(ii)
maylcross-reference
~~9~n·tth~,ni;,~,~p;id12~.91~$~~
~
~f;;i~~ti~i~n'fs
cir;ifalidited
~in~~i~
statements
arenbta~p~l slich~~if~an·i;il :st~tt:e·~~:Slr;:
may
be;~
get~i~e~Rule.
Inanyevent,audited:iinrincial
S~imelniS
oftl;eCounty
~~tlbesubmit~if andwhen
aii~i~i~.b`ie,
~ij~the~
~yithOrS~ly
fib;n~~t~
~h;i~ ~~
:
;` ·: .
:
B.
The annualfinancialstatementsof the Countyshall be preparedon the basisof generallyaccepted
accountingprinciplesand will be audited. Copiesof the auditedannual financialstatements,whichmay be filed
separatelyfrom the AnnualReport,will be filed with the Repositorieswhentheybecomepubliclyavailable.
C.
If the County fails to provide an Annual Report to the Repositoriesby the date required in
subsection(a) hereto or to file its audited annual financialstatementswith the Repositorieswhen they become
publiclyavailable,the County shall send a notice to the MunicipalSecuritiesRulemakingBoard and any State
Repository in substantially the form attached hereto as Exhibit B.
SECTION4.
Contentof AnnualReports. Exceptas otherwiseagreed,any AnnualReportrequiredto
be filedhereundershall containor incorporateby reference,at a minimum,annualfinancialinformationrelatingto
the County,includingoperatingdata, updatingsuch informationrelatingto the Countyas describedin ExhibitA, all
with a view toward assisting Participating Underwriters in complying with the Rule.
Any or all of such informationmay be incorporatedby referencefrom other documents;includingofficial
statementsof securitiesissueswithrespectto whichthe Countyis an "obligatedperson"(withinthe meaningof the
Rule), which have been filed with each of the Repositoriesor the Securitiesand ExchangeCommission. If the
documentincorporatedby referenceis a fmal officialstatement it must be availablefrom the MunicipalSecurities
RulemakingBoard. The Countyshallclearlyidentifyeach suchotherdocumentso incorporatedby reference.
SECTION 5.
Reporting of Listed Events. The' County will provide in a timely manner to the
Securities Rulemaking Board and-to each State Repository, if any, notice of any of the Listed Events, if
material.
SECTION 6.
Termination of Reporting Obligation. The County's obligations under this Disclosure
Agreement shall terminate upon the earlier to occur of the legal defeasance or final retirement of ail the 2004 B
Bonds.
SECTION7.
Dissemination A~ent. The County may, from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement and may discharge
any such Agent, with or without appointing a successor Dissemination Agent. If at any time there is not any other
designated Dissemination Agent, the County shall be the Dissemination Agent.
SECTION 8.
Amendment. Notwithstanding any other provision of this Disclosure Agreement, the
County may amend this Disclosure Agreement, if such ~amendment is supported by an opinion of independent
counsel with expertise in federal securities laws, to the effect that such amendment is permitted or required by the
Rule.
SECTION 9.
Additional Information.
Nothing in this Disclosure Agreement shall be deemed to
prevent the County from disseminating any other information, using the means of dissemination set forth in this
Disclosure Agreement or any other meansof communication or including any other information in any Annual
Regortor noticeof occurrence
of alisted:·-Event,in additionto thatwhichis requiredby thisDisdlos~
4~~
i :·I
-:-·
If:t~ei~buhtyc~hoo~ks:.tb;
i;idludeanyin~bnnatio;i
in ahk~nrius;lReportor-not~ce
of occurrence
df a Liste~~~t~'it;::.:
:::- : . : additioii~tothat.which
isspedlncsllg
~~:lby ~~l~~:~nt,
i~eCounty
shall
~ Iroql?li~qfi~
underthis Agreementto updates~i~uch
informationdr includeit m any future ~Annual
Reportor'noticeof ~occurri~ice
; ~i·i:ofa:Tr·i~~:~nti : ..;-; 1-SECTION 10.
Default.
Any person referr~d to in Section 11 (other than the County) may take Such
ac~~
aq~
be~~y
andappropri~,i~i~.p~;seeking
mandate
orspeciBe
pe~e~
~aus-i:
the~~
fo:'fiieItst~i~nu~l.:~t~jeIjS·~i~
Qtto giveiititic~bfa Listeci:Ei~ntl
~~;~__
i'-
majority
in aggregate
principal
amount
of Bondsoutstanding~may
takeSuchactions
as maybe necess~l~ind
:~iri~iatB iri~jludi;ig
S~icin~man~late~
b;i;:~~f~e petfo;ri~naiii~~
b;ycourt ord~r,to 'challenge-thea;cle~ac~b~~jr
information
provided
pursuantto thisDisclosure
Agreement,
or to enforceanyotherobligation
of the'Co~nty
hereunder. A default under this Disclosure Agreement shall not be deemed an event of default under the Resolution
or the 2004 B Bonds of the County, and the sole remedy under this Disclosure Agreement in the event of any failure
of the County to comply herewith shall be an action to compel performance. Nothing in this provision shall be
deemed to restrict the rights or remedies of any holder pursuant to the Securities Exchange Act of 1934,.the rules
and regulations promulgated thereunder, or other applicable laws.
SECTION 11. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the County,
the Participating Underwriters, and holders from time to time of the County's Bonds, and shall create no rights in
any other person or entity.
Date:
October
_, 2004
FAIRFAX
COUNTY,
VIRGINIA
By:
Edward L. Long, Jr.
Chief
VII-3
Financial
Officer
B
CONTENT
OF ANNUAL
REPORT
(a) FinancialInformation. UpdatedinformationconcerningGeneralFundrevenues,expenditures,
categoriesof expenditures,
fundbalances,assessedvalueof taxableproperty,tax rates,majortaxpayers,and tax
levies
and collections.
(b) DebtInformation.Updatedinformation
concerning
generalobligationbondsindebtedness,
including
bondsauthorized
andunissued,bondsoutstanding,
the ratiosof debtto the marketvalueof taxableproperty,debt
per capita, and debt service as a percentage of General Fund disbursements.
(c) DemographicInformation. Updateddemographic
information
respectingthe Countysuchas its
population, public school enrollment and per pupil expenditure.
(d) EconomicInformation. Updatedeconomicinformation
respectingthe Countysuch as income,
employment, unemployment, building permits and taxable sales data.
(e) RetirementPlans. Updatedinformationrespectingpensionand retirementplans for County
employees,
includinga summary
of membership,
revenues,expensesandactuarialvaluation(s)
of suchplans.
(f, Contingent
LiabilitU.-iA
gy~ ~f~-:~gation~ bther
~·~i
pCtlding against the County.
: I?gen~thef~e~goiri$
~i~~e i~~n~l~th~ end
6fthemost
recentfiscal
year:or~i~~.
Ib~st
recent
gracticable
~._~~ in~fbi·ri~ia~bn
fbr·~;ii~~~:l~~i~i'e;I~~dis
provided,lt
may
be~~i~nri~:ii~I~blunaudited.
Whereinfcbrmatibnhas
be~mo;ethan
a single period, comparable ini~n~t~oh
willin~~::~,~~J:for dies~i~.;~~:~:peilodsl~k;e
:validandavailab~.::;
~ ~~~~::
:·:%
s:-
: -i~~
or econqrme
m~Fo~ti~n
~r:the~ou~ g~a~~ni~ States
asal~·o~i`e
Iscbntemporaneo~y~
available
and,in thejudgment~the~~, ~nf~~la~~ve,
suchinformation
maybe included.
Where,
~n;thk
'ji;dgriient:
oftheCounty,
~inaccdmpanj·lng·;a~~_
is-~::to
narrative will be provided.
makedatapre~sent~t~d.
li~.mis~g;·~l-
O
VII-4
I:x·i-iNOTICE
OF FAILURE
[AUDITED
Re:
PUBLIC
ANNUAL
FAIRFAX
TO
COUNTY
IMPROVEMENT
ANNUAL
VIRGMIA
2004
NOS.:
Dated:
REPORT
STATEMENTS]
AND REFUNDING
SERIES
CUSIP
FILE
FINANCIAL
BONDS,
B
303820
,, 2005
NOTICEIS HEREBYGIVENthatFairfaxCounty,Virginiahasnotprovidedan AnnualReport[Audited
Annual
Financial
Statements]
asrequired
bySection
3 oftheContinuing
Disclosure
Agreement,
whichwasentered
intoinconnection
withtheabove-named
bondsissuedpursuant
tothatcertainResolution
adopted
onSeptember
13,
2004by the Boardof Supervisorsof the County,theproceedsof whichwereusedto financeandrefinancevarious
public improvementsin the County. [TheCountyanticipatesthatthe AnnualReport[AuditedAnnualFinancial
Statements] will be filed by
·]
Dated:
FAIRFAX COUNTY, VIRGINIA
O
By
VII5
1-
This page intentionally left blank
CERTIFICATE
AWARDING
REFUNDING,
AND
MAKING
OF
THE
CHIEF
FINANCIAL
OFFICER
$311,810,000
PUBLIC
IMPROVEMENT
AND
SERIES 2004 B, OF FATJRFAX COUNTY, VIRGINIA
CERTAIN
OTHER
DETERMINATIONS
I, Edward L. Long, Jr., Chief Financial Officer of Fairfax County, Virginia (the
"County"), pursuant to the authority delegated to me in Sections 5 and 7(a) of the resolution
adopted by the Board of Supervisors (the "Board") of Fairfax County, Virginia, on September
13, 2004 (the "Authorizing Resolution") to (i) accept the lowest bid for the Public Improvement
and RefUnding Bonds, Series 2004 B (the "Bonds") being offered competitively and (ii) make
certain determinations relating to the Bonds DO HEREBY CERTIFY:
Section 1. Bids received. (a) Advertisement was duly made calling for electronic bids
to be received via the PARITY Competitive Bidding System by the Board of Supervisors until
11:00 a.m., Fairfax, Virginia Time, September 23, 2004 for the purchase of $326,335,000 Public
Improvement and RefUnding Bonds, Series 2004 B, of Fairfax County, Virginia, dated October
19, 2004, maturing, subject to the right of prior redemption, October 1, in annual installments in
each of the years 2005 to 2024, inclusive.
(b)
The Initial Maturity Schedule las referred to in the Notice of Sale) was not
revised by 10:00 a.m., Fairfax, Virginia Time, September 23, 2004, and pursuant to the~Notice of
Sale became the Bid Maturity Schedule. The Bid Maturity Schedule las referred to in the Notice
of Sale) is set forth in the table below in this Section 1.
(c)
At 11:00 a.m. Fairfax, Virginia Time on September 23, 2004 bidding was
closed and the following bids for the bid aggregate principal amount of $326,33 5,000 were found
to have been submitted and to accord in all respects with the terms of the advertisement, each bid
posting a Financial Surety Bond for $3,263,350 payable to the order of the Director of the
Department of Finance ofFairfax County, Virginia:
A.
Lehman Brothers Inc. and associates offering to pay $355,509,767.80 for the
bonds bearing interest at the rates set forth below in Column I resulting in a true interest
cost
rate
of 3.563
1 15%.
B.
Morgan Stanley & Co. Incorporated
and associates offering to pay
$358,843,673.58 for the bonds bearing interest at the rates set forth below in Column II
resulting in a true interest cost rate of3.573902"/o.
C.
J.P. Morgan Securities Inc. and associates offering to pay $358,254,483.95 for the
bonds bearing interest at the rates set forth below in Column III resulting in a true interest
cost
rate
of 3.574182%.
D.
Merrili Lynch & Co. and associates offering to pay $352,463,010.62 for the bonds
bearing interest at the rates set forth below in Column IV resulting in a true interest cost
rate
NYI
5594603v1
of3.581213%.
Citigroup Global Markets Inc. and associates offering to pay $358,965,707.60
for the bonds bearing interest at the rates set forth below in Column V resulting in a true
interest
F.
cost
rate
of3.587023%.
UBS Financial Services Inc. and associates offering to pay $356,926,078.50
for the bonds bearing interest at the rates set forth below in Column VI resulting in a true
interest
cost
rate
of3.589810%.
Interest
Maturity Date
October 1, 2005
October
October
October
October
October
October
October
October
October
October
October
October
j October
October
October
October
October
October
October
Principal Amount
$10,365,000
1, 2006
1, 2007
1, 2008
1, 2009
1, 2010
1, 2011
1, 2012
1, 2013
1, 2014
1, 2015
1, 2016
1, 2017
1, 2018
1, 2019
1, 2020
1, 2021
1, 2022
1, 2023
1, 2024
17,220,000
17,130,000
21,155,000
20,950,000
20,785,000
20,720,000
20,705,000
20,690,000
20,670,000
20,585,000
20,425,000
20,270,000
13,250,000
13,165,000
9,650,000
9,650,000
9,650,000
9,650,000
9,650,000
Rate
Columns
Z
6.000%
n:
3.000%
III
5.500%
IV
5.000%
J1
6.000%
VI
6.000%
4.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
4.500
4.500
4.500
4.000
4. 125
4.250
4.250
3.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
4.125
4.250
4.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
4.100
4.125
4.250
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
4.000
4.500
4.500
4.500
4.500
4.500
4.500
4.500
4.250
4.250
3.500
5.000
5.000
4.500
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
4.500
4.250
5.250
5.000
5.000
5.000
5.000
5.000
5.000
5.250
5.250
5.000
5.000
5.000
5.000
5.000
4.000
4.000
4. 125
4.250
4.250
Section 2. Lowest Bid. The bid offering to purchase the Bonds at the lowest "True or
Canadian" interest cost, such cost to be determined by doubling the semiannual interest rate
(compounded semiannually) necessary to discount to the price bid the payments of the principal
of and the interest on the Bonds from their payment dates to October 19, 2004 is the bid of
Lehman Brothers Inc. and associates offering to pay $355,509,767.80 for the Bonds bearing
interest at the rates set forth in Column I of the foregoing tabulation.
Section3. Award and delivery of Bonds. The bid of Lehman Brothers Inc. and
associates is accepted, and the Bonds are awarded to Lehman Brothers Inc. and associates at the
adjusted purchase price of $339,764,421.45, such Bonds to bear interest at the rates set forth in
the table
in Section
5 of this Certificate.
In accordance
with the terms
of the Notice
of Sale the
Bid Maturity Schedule has been changed to produce the final annual principal amounts shown in
Section 5 of this Certificate.
)
inNewYorkCity.
NY1
5594603vI
Delivery of the Bonds is to be made on or about October 19, 2004
4. Pro
rata
reduction
of Bonds.
Pursuant
to the instructions
in Section
5 of the
Authorizing Resolution the principal amount ofPublic Improvement Bonds otherwise authorized
by Section I(a) of the Authorizing Resolution were reduced as follows:
Purpose
Original Authorization
School Improvements
$125,590,000
Adiusted Amount
$116,280,000
Parks and Park Facilities
13,920,000
13,920,000
Public Safety Facilities
Commercial and Redevelopment
Area Improvements
54,750,000
50,700,000
4,500.000
4,500.000
Total
$19 8,760, 000
$185,400,000
Section 5. Final Terms of the Bonds. The revisions to the Bid Maturity Schedule have
been communicated to Lehman Brothers Inc. and associates within twenty-four hours of the
County's receipt of the Initial Reoffering Terms las defined in the Notice of Sale) for the Bonds.
The final aggregate principal amount of the Bonds is $311,810,000. The Bonds shall be dated
October 19, 2004 and consist of $311,810,000 serial bonds that will mature on October 1 in the
years and in the final annual principal amounts, and will bear interest at the respective rates per
annum, as follows:
Maturities
Maturity Amounts
Interest Rate
2005
$ 9,270,000
2006
15,870,000
4.000
6.000%
2007
15,850,000
5.000
2008
2009
20,025,000
20,015,000
5.000
5.000
2010
19,995,000
5.000
2011
19,970,000
5.000
2012
19,935,000
5.000
2013
19,895,000
5.000
2014
2015
2016
2017
2018
2019
2020
2021
19,860,000
19,815,000
19,770,000
19,725,000
12,770,000
12,695,000
9,270,000
9,270,000
5.000
5.000
5.000
5.000
4.500
4.500
4.500
4.000
2022
9,270,000
4.125
2023
2024
9,270,000
9,270,000
4.250
4.250
Section 6. Redemption Provisions, Record Date, Interest Payment Dates.
The
interest payment dates and optional redemption provisions of the Bonds otherwise authorized by
the Authorizing Resolution were adjusted pursuant to the delegation of authority contained in
Sections 5 and 7(a) of the Authorizing Resolution as follows:
NYI
5594603vl
Payment Dates -- Interest on the Bonds is payable semiannually
on each April 1 and October I, commencing April i, 2005.
Optional Redemption Provisions -- The Bonds are subject to redemption
prior to maturity in whole or in part at any time on or after October 1, 2014 at a redemption price
of par plus accrued interest.
Section 7. Certificate within meaning of Resolution. This certificate is a Certificate
within the meaning of the Authorizing Resolution, and is executed pursuant to and in accordance
with the delegation of power authorized by and contained therein.
Dated as of September 23, 2004.
By:
Chief
Fairfax
NYI
5594603v1
Financial
County,
Vi
DISCLOSURE
AGREEMENT
This Continuing Disclosure Agreement (the "Disclosure Agreement") is executed and
delivered by Fairfax County, Virginia (the "County") in connection with the issuance by the
County of $311,810,000 aggregate principal amount of its Public Improvement and RefUnding
Bonds, Series 2004 B (the "Bonds"
or "2004 B Bonds") pursuant to the provisions
of a
resolution (the "Resolution") adopted on September 13, 2004, by the Board of Supervisors of the
County. The proceeds of the 2004 B Bonds are being used by the County to finance various
public improvements in the County. The County hereby covenants and agrees as follows:
SECTION 1. Purpose of the Disclosure Agreement.
This Disclosure Agreement is
being executed and delivered by the County for the benefit of the holders of the 2004 B Bonds
and in order to assist the Participating Underwriters (defined below) in complying with the Rule
(defined below). The County acknowledges that it is undertaking primary responsibility for any
reports, notices or disclosures that may be required under this Agreement.
SECTION2. Definitions.
In addition to the definitions set forth in the Resolution,
which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined
in this Section, the following capitalized terms shall have the following meanings:
"Annual Report" shall mean any Annual Report provided by the County pursuant to, and
as described in, Sections 3 and 4 of this Disclosure Agreement.
"Dissemination Agent" shall mean the County, acting in its capacity as Dissemination
Agent hereunder, or any successor Dissemination Agent designated in writing by the County and
which has filed with the County a written acceptance of such designation.
"Filing Date" shall have the meaning given to such term in Section 3(a) hereof.
"Fiscal Year" shall mean the twelve-month period at the end of which financial position
and results of operations are determined. Currently, the County's Fiscal Year begins July 1 and
continues through June 30 of the next calendar year.
"Holder" or "holder" shall mean, for purposes of this Disclosure Agreement, any person
who is a record
owner
or beneficial
owner
ofa
2004 B Bond.
"Listed Events" shall mean any of the events listed in subsection (b)(S)(i)(C) of the Rule,
which
are as follows:
principal and interest payment delinquencies
non-payment related defaults
unscheduled draws on debt service reserves reflecting financial difficulties
unscheduled
drawsoncreditenhancements
reflecting
financial
difficulties
substitution of credit or liquidity providers, or their failure to perform
tax opinions or events affecting the tax-exempt status of the 2004 B Bonds
modifications to rights of holders
bond
calls
defeasances
release, substitution, or sale of property securing repayment of the 2004 B Bonds
rating changes
"National Repository" shall mean any Nationally
Information Repository for purposes of the Rule.
Recognized
Municipal
Securities
"Participating Underwriter" shall mean any of the original underwriters of the County's
2004 B Bonds required to comply with the Rule in connection with the offering of such Bonds.
"Repository" shall mean each National Repository and each State Repository.
"Rule" shall mean Rule 15c2-12 adopted by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as the same may be amended from time to time.
"State Repository" shall mean any public or private depository or entity designated by the
State as a state depository for the purpose of the Rule. As of the date of this Agreement, there is
no State Repository.
SECTION 3. Provision of Annual Reports.
A.
The County shall, or shall cause the Dissemination Agent to, provide to each
Repository an Annual Report which is consistent with the requirements of Section 4 of this
Disclosure Agreement. Such Annual Report shall be filed on a date (the "Filing Date") that is
not later than March 31 after the end of any Fiscal Year (commencing with its Fiscal Year
ending June 30, 2005). Not later than ten (10) days prior to the Filing Date, the County shall
provide the Annual Report to the Dissemination Agent (if applicable). In such case, the Annual
Report (i) may be submitted as a single document or as separate documents comprising a
package, (ii) may cross-reference other information as provided in Section 4 of this Disclosure
Agreement and (iii) shall include the County's audited financial statements or, if audited
financial statements are not available, such unaudited financial statements as may be required by
the Rule. In any event, audited financial statements of the County must be submitted, if and
when available, together with or separately from the Annual Report.
B.
The annual financial statements of the County shall be prepared on the basis of
generally accepted accounting principles and will be audited. Copies of the audited annual
financial statements, which may be filed separately from the Annual Report, will be filed with
the Repositories when they become publicly available.
If the County fails to provide an Annual Report to the Repositories by the date
required in subsection (a) hereto or to file its audited annual financial statements with the
Repositories when they become publicly available, the County shall send a notice to the
Municipal Securities Rulemaking Board and any State Repository in substantially the form
attached
hereto
as Exhibit
B.
SECTION4.
Content of Annual Reports. Except as otherwise agreed, any Annual
Report required to be filed hereunder shall contain or incorporate by reference, at a minimum,
annual financial information relating to the County, including operating data, updating such
information relating to the County as described in Exhibit A, all with a view toward assisting
Participating Underwriters in complying with the Rule.
Any or all of such information may be incorporated by reference from other documents,
including official statements of securities issues with respect to which the County is an
"obligated person" (within the meaning of the Rule), which have been filed with each of the
Repositories or the Securities and Exchange Commission. If the document incorporated by
reference is a final official statement, it must be available from the Municipal Securities
Rulemaking Board. The County shall clearly identify each such other document so incorporated
by reference.
SECTION 5. Reporting of listed Events. The County will provide in a timely manner
to each National Repository or the Municipal Securities Rulemaking Board and to each State
Repository, if any, notice of any of the Listed Events, if material.
SECTION 6. Alternative Filing. The County may, in lieu of filing with the Repositories
the Annual Reports, Listed Events and other notices referred to in Sections 3(A), 3(C) and 5
make such filings with DisclosureUSA, the central post office of the Municipal Advisory
Council
ofTexas.
SECTION 7. Termination ofReportina Obligation. The County's obligations under this
Disclosure Agreement shall terminate upon the earlier to occur of the legal defeasance or final
retirement
of all the
2004
B Bonds.
SECTION 8. Dissemination Agent. The County
engage a Dissemination Agent to assist it in carrying out
Agreement and may discharge any such Agent, with
Dissemination Agent. If at any time there is not any other
County shall be the Dissemination Agent.
may, from time to time, appoint or
its obligations under this Disclosure
or without appointing a successor
designated Dissemination Agent, the
SECTION9.
Amendment.
Notwithstanding any other provision of this Disclosure
Agreement, the County may amend this Disclosure Agreement, if such amendment is supported
by an opinion of independent counsel with expertise in federal securities laws, to the effect that
such amendment is permitted or required by the Rule.
SECTION 10. Additional Information. Nothing in this Disclosure Agreement shall be
deemed to prevent the County from disseminating any other information, using the means of
dissemination set forth in this Disclosure Agreement or any other means of communication, or
including any other information in any Annual Report or notice of occurrence of a Listed Event,
addition· to that which is required by this Disclosure Agreement. If the County chooses to
include any information in any Annual Report or notice of occurrence of a Listed Event, in
addition to that which is specifically required by this Disclosure Agreement, the County shall
have no obligation under this Agreement to update such information or include it in any future
Annual Report or notice of occurrence of a Listed Event.
SECTION 11. Default. Any person referred to in Section 12 (other than the County) may
take such action as may be necessary and appropriate, including seeking mandateor specific
performance by court order, to cause the County to file its Annual Report or to give notice of a
Listed Event. The holders of not less than a majority in aggregate principal amount of Bonds
outstanding may take such actions as may be necessary and appropriate, including seeking
mandate or specific performance by court order, to challenge the adequacy of any information
provided pursuant to this Disclosure Agreement, or to enforce any other obligation of the County
hereunder. A default under this Disclosure Agreement shall not be deemed an event of default
under the Resolution or the 2004 B Bonds of the County, and the sole remedy under this
Disclosure Agreement in the event of any failure of the County to comply herewith shall be an
action to compelperformance.
Nothing in this provision shall be deemed to restrict the rights or
remedies of any holder pursuant to the Securities Exchange Act of 1934, the rules and
regulations promulgated thereunder, or other applicable laws.
SECTION 12. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit
of the County, the Participating Underwriters, and holders from time to time of the County's
Bonds, and shall create no rights in any other person or entity.
Date:
October
19, 2004
FAIRFAX
COUNTY,
VIRG
By:~i?vD~~
Edward
Chief
L. LtSIE~Z./Jr.
Financial
Officer
A
CONTENT
(a) Financial Information.
OF
ANNUAL
REPORT
Updated information concerning General Fund revenues,
expenditures, categories of expenditures, fUnd balances, assessed value of taxable property, tax
rates, major taxpayers, and tax levies and collections.
(b)
Debt Information.
Updated information concerning general obligation bonds
indebtedness, including bonds authorized and unissued, bonds outstanding, the ratios of debt to
the market value of taxable property, debt per capita, and debt service as a percentage of General
Fund
disbursements.
(c) Demographic Information.
Updated demographic information respecting the
County such as its population, public school enrollment and per pupil expenditure.
(d) Economic Information. Updated economic information respecting the County such
as income, employment, unemployment, building permits and taxable sales data.
(e) Retirement Plans. Updated information respecting pension and retirement plans for
County employees, including a summary of membership, revenues, expenses and actuarial
valuation(s) of such plans.
(f) Contingent Liabilities.
A summary of material litigation
contingent liabilities pending against the County.
and other material
In general, the foregoing will include information as of the end of the most recent fiscal
year or as of the most recent practicable date. Where information for the fiscal year just ended is
provided, it may be preliminary and unaudited.
Where information has historically been
provided for more than a single period, comparable information will in general be provided for
the same number of periods where valid and available. Where comparative demographic or
economic information for the County and the United States as a whole is contemporaneously
available and, in the judgment of the County, informative, such information may be included.
Where, in the judgment of the County, an accompanying narrative is required to make data
presented not misleading, such narrative will be provided.
B
NOTICE
OF
FAILURE
TO
FILE
ANNUAL
[AUDITED ANNUAL FINANCIAL
Re:
PUBLIC
FAIRFAX
COUNTY
IMPROVEMENT
VIRGINIA
AND REFUNDING
SERIES
CUSIP
REPORT
STATEMENTS]
NOS.:
2004
BONDS,
B
303820
Dated:
_, 2005
NOTICE IS HEREBY GIVEN that Fairfax County, Virginia has not provided an Annual
Report [Audited Annual Financial Statements] as required by Section 3 of the Continuing
Disclosure Agreement, which was entered into in connection with the above-named bonds issued
pursuant to that certain Resolution adopted on September 13, 2004 by the Board of Supervisors
of the County, the proceeds of which were used to finance and refrnance various public
improvements in the County. [The County anticipates that the Annual Report [Audited Annual
Financial Statements] will be filed by
·]
Dated :
FAZRFAX COUNTY,
By
NYI
5599806vl
VIRGINIA
08:11
703-515-8283
UCI-15-2004 18:24
PUBLIC
FINANCIAL
MGT
212553139~
PAGE
2125531390
02/05
P.B~BS
Moscllv)s Inv~sBrws S9rvlc+
99 Churc~h Street
Ne~N Y4ne New Yt~rk t0007
October15,2004
BillLeech
~
Mr.LenWales
·
Assistant Director of Finance
Fairfax (CoLnty OF)VA
rreSjdenfj~F~Or
~adit
PvMic
Fti~ar~~e!
rxoup
Te~ 212,553.47,3~
12000 Governr~ent Center Parkway
Suite
561
Fair4ax, VA 22035-0~74
Dear Mr. Wales:
We wish to itrtbnxtyou that on September 20, k~004,M~od~y's
Ra~i~ Committee reviewed and
assigneda ~itix~oZAaa to Pait-~ax(CQunryof) PIA'sGEn~d Ob]igation.BublicImp~ovt~m~rt
~ddS, Series 2004B.
in order forus to luainta~ the currency6~0U1'
ratings,we requestthat you provideon~ing
disclosure, including ~uuruai financial and statisticar information.
Moody's wifl monitor this rating and reserves the right, at its sole discretion, to revise Or
withdsa~ this rating at any time in the future.
The rating as well ay any revisions or withd~awa[sthereof, will be publicly disseminated by
Moody's through no~malprint and electronic media and ia response to verbal r~uests to Moody'Ec
rati~s
desk.
Should you have any questions re~arding the above, please do not hesitate to contact me or tbe
analyst assigned to this transaction, Patridr Mispa~eL at zr 2-5$3-7463.
Sincerely,
RillLeech
Vice PresidentlSenior
cc:
Credit Officer
Ms. JoAnnF Uarter
YllblicFiTlancialManagement, me., Suite 1130
4~01 North Pail·f~x Drive
Arlington, VA 22203
Mficer
08:11
763-516-0283
PUBLIC
I ~Fl;n/~nrr~O~P~1~·llcclililF
I·
STANDARD
&P001i'S
FINANCIAL
MGT
PP~GE
03/05
I ·~prr.rrePsa~*rara~a~
StevenJ. Murphy
oiano P. Brosen
IWdnagingDkector
Di~ctor
56WaterSrreq 3BU1
Floor
NewYbrk,NY1004id063
55Waterstreet 38thfkor
NBwYo4 NY1004~-0003
1e12~2438·2668
te121L43&74~
leve_murphS~9tand~dhndpoors.com
dii~Me_brosen~g91andardandpobrr.~,m
rele~noe no.: 13646
September 21, 2004
F;airfaxCounty
Officeof Management
and ~udget
12000GovernmentCenter Parkway- Suite 561
Fa~~ax, VA 2203$-0076
Attention.Mr. LconardP. Wales,Assistant Director
Re: US$326,335,000Fe~rfax
Court~y,
C~irginia,
G~a~nlObligalioh
~PublicIPn~proue~~nf~i
Refundi~gBculdr,Series200~B, daled~D8t~c~f~eliv~py,
d~~ June i, Z02d
Dear Mr. Wales:
Pursuant
toyourrequestfora Standard
&Poor'sratingontheabove-referenced
obligations,
we
havereviewedthe informationsut~mitt~d
to us and,subjectto the enclosed~ermsand Conditionr,
haveassigned
a ratingof(CPLPLA)1.
Standard&Poor'sviewstheoutlook~for
thisratingas stable.A
copy of the rationale supportingthe rating is enclosed.
Theratingis notinvestment,
financial,
orotheradviceandyoushouldnotandcannotrelyupon
theratinga$s~ch.Theratingis basedoni~foI-xn~atiw
s~rppli~d
to usbyyouorbyyouragentsbut
doesnotrepresent
anaudit.Weundertake
nodutyofduediligence
orindependent
verification
of
anyinformation.
Theassignment
ofa ~atingdoesnotcreatea fiduciary
rclatioaship
betweenus
andyouor betweenus and otherrecipientsofthe rating. Wehavenot consentedto andwillnot
consentto beingnamedan "expe~t"underdte applicablesecuritiesraws,includingwithout
limitation,
Section7 oftheSecurities
Actof 1933,Theratingis nota "marketrating"noris it a
recommendationto buy, hold, or sell the obligations.
T~his
letterconstitutesStandard& Poor'spermissionto youto disseminatethe above-assigned
ratingto interested
parties.Standard
& Poor'srese~v~s·the
rightto informits ownclients,
sut~sc~i~bers,
and the pub~icof the rating.
Stand~d& Poor'sreliesontheissurr/obligor
anditscounsel,accountants,
andotherexpertsfor
the accuracyandcompleteness
of the informationsubmittedin connectionwiththe rating. Tnis
ratingis basedon financialinformationand documentswereceivedpriorto the issuanceOfthis
letter. Standard& Poor'sassumesthatthe documentsyouhaveprovidedto us are fiTI~.Ifany
subsequent
changes~vere
rnadeinthefinaldocutnents,
youtnustnotifyus ofsuchchangesby
sendingus therevisedfinaldocumentswiththe changesclearlymarked.
To maintainthe rating, Standard~ZPoor's must receive all relevanttinancial informationas soon
as such ~nformationis available. Placing us on a distributionlist for this informationwould
08:11
Mr. Leonard
783-516-0283
PUBLIC
FINANCIAL
MGT
PAGE
P. Wales
Page2
September 21, 2004
facilitatethe process.Youmustpromptlynotifyus of all materialchangesin the ~fi~nandal
informationandthedocuments.Standard~t Poor'smaychange,suspend,withdraw,or placeon
CreditWatch
the ratingas a resultof changesin, or unavailability
od suchinformation.Standard
& Poor'sreservestherightto requestadditionalinformationif necessaryto maintainthe rating.
Please send all information
to:
Standard & Poor's Ratings Services
Public Finance Department
55 Water
Street
New York, NY 10042-0003
Standard& Poor's is pleased to be of serviceto you. ~Formore informationon Standard& Poor's,
please visit our website at www.standardand~~oors.com. ~fwe can.be of help in any other way,
please call or contact us at nylsublic~f~~nance(i~,standaFdandooors.com.
Thank you for choosing
Standard & Poor's and we look fonvard to wodcixlgwith you again.
Sincerely yours,
Standard & Poor's Ratings Services
a division of The McGrawlfIi~l Companies, Inc.
Managing
enclosures
cc:
Ms.3bAnneCarter,ManagingDirector
Public Financial Management
04/06
08:11
703-516-0283
PUBLIC
FINANCTAL
MGT
PAGE
05/06
FitchRatin~-s
One State St,eet PIPZe
~JewYor~,~Jy 10004
September
Ms. Leonard
. 7 212 908 0500 1 800 75 FITCH
www.fitchratings.com
29, 2004
Wales
County Debt Manager
Fairf2ucCounty, VA
12000 Govemrnent Center Parkway, Suite: 561
~airfax, Virginia 2203513074
Dear
Ms. Wales:
FitchRatingshas assignedone or moreratingsandlorotherwisetaken ratingaction(s),
as detailed an the attached Notice of Rating Action.
Ratings assigned by Pitchare based on documents and informationprovidedto us by
issuers,obligers,
andlortheirexpertsandagents,andare subjectto receiptofthefinalclosing
documents, Pitch does not audit or verify the truth or ~accuracy~~fsuch information.
It is important that Pitch be provided with all information that may be material to its
)
·
ratingsso that theycontinueto accuratelyreflectthe status of the ratedissues. Ratingsmay
be changed, withdrawn,suspended or placed on RatingWatch due to changes in, additionsto
or the inadequacy of information.
Rating's are not recommendations to buy, sell or hold securities. Ratings do not
commenton the adequacy of marketprice, the suitabilityof any secun'tyfor a particular
investor,or the tax-exe~mpt·
nature or taxabilityof payments made in respect of any sectirity.
Theassignment
bfa ~ating
byFitchsh'allnotconstitute
a consentbyFitchto use its
name as an expert in connectionwithany registrationstatement or other filingunder U.S.,
U.K.,or any otherrelevantsecuritieslaws.
We are pleasedto have hadthe opportunitjl
to be of serviceto you. ifwe can be of
furtherassistance, please feel free to contact us at any b'me.
Sincerely,
-----
--~--
~3 ~·~d,
Davidi. Litvack
Managing Director
Public
DTL/tv
Enc: Notice of Rating Action (Doc ID: 2561)
Finance
08:11
703-515-8283
PUBLIC
FINANCI~L
MGT
P~GE
06/05
FitchRatin~-s
N~ti~e of Rating Action
BandI)e~~ipyi~F~
~ha4ii:i·;::ii·-;~~~~
···:····(...
PlrAmwnt ~Wtit3e~
'~'';'4'
Fai~FdxCovnty,
VAOvtstandhg
General
Obligation
Bonds T1,618,000,000.
LongTemn-
Rat~nc~' Abion
~F_Pate
~·
""
AAA AfArmed
Notes
·u:.·%
::,~~ ~r·r·-·r,··.' .·~
2~Se~2004
ThsistinaOutlaak
IsStaM~
I)oc ID:2561
Pase 1 of 1
CERTIFICATE
CONCERNING
OFFICIAL
STATEMENT
I, Nancy Vehrs, Clerk to the Board of Supervisors of Fairfax County, Virginia, DO
HEREBY
CERTIFY
that the attached
Official
Statement
of Fairfax County,
Virginia,
dated
September 23, 2004 relating to the issuance of %311,810,000 Public Improvementand
Refunding Bonds, Series 2004 B, is substantially in the form of the draft of the Preliminary
Official Statement which was presented at the meeting of the Board of Supervisors of Fairfax
County, Virginia, duly called and held on September 13, 2004 and which was approved by the
Board of Supervisors by a resolution duly passed and adopted at the meeting.
WITNESS my hand and the official seal of the Board of Supervisors of Fairfax County,
Virginia,this 19'"dayof October,2004.
Z/~j~L···
k to the
Board of Supervisors
Fairfax County, Virginia
(SEAL)
NYI
5594603v1
the opinion of Bond Counsel, under existing law and assuming continuing compliance with the
provisions of the Internal Revenue Code of 1986, as amended, as described herein, interest on the Bonds will not be
includablein the gross incomeof the ownersthereoffor Federalincometax purposes. See "TAXMATTERS"
hereinfor certainprovisionsof the Codetlzatmayaffectthe tar treatmentof intereston the Bondsfor certain
bondholders.
NEW ISSUE
RATINGS:
Fitch..................................
AAA
FullBook-Entry
Moody's..............................Aaa
Standard
& Poor's..........
AAA
$3~1,8~0,000
Fairfax County, Virginia
Public Improvement and Refunding Bonds, Series 2004 B
Dated: Date of Delivery
Due: October 1, as shown below
Intereston the Bondswillbe payablesemi-annually
on eachApril1 and OctoberI, commencing
April1,
2005.
The Bondsare subjectto redemptionprior to maturityin wholeor in part at any time on or after October 1,
2014 at a redemption price of par plus accrued interest.
The Bondsare being issuedfor the purposeof financingvariouspublic improvementsand to refundcertain
outstanding bonds.
The Bonds will be generalobligationsof Fairfax County,Virginia,for the paymentof whichthe Board of
Supervisorsof the Countyis unconditionallyobligatedto levy and collectan annual ad valoremtax, unlimitedas to
rate or amount, upon all property in the County subject to local taxation.
MATURITY DATES, PRINCIPAL AMOUNTS, INTEREST RATES AND YIELDS"
Maturity
Principal
Interest
Maturity
Principal
Date
Amount
Rate
Yield
Date
Amount
6.00%
4.00
1.56%
1.64
2015
2016
$19,815,000
19,770,000
2005
2006
$9,270,000
15,870,000
Interest
Rate
Yield
5.00%
5.00
3.42%'C'
3.52'C'
2007
15,850,000
5.00
1.95
2017
19,725,000
5.00
~.62'C'
2008
20,025,000
5.00
2.23
2018
12,770,000
4.50
3.82'C'
2009
20,015,000
5.00
2.48
2019
12,695,000
4.50
3.91"'
2010
19,995,000
5.00
2.71
2020
9,270,000
4.50
4.00'C'
2011
2012
19,970,000
19,935,000
5.00
5.00
2.90
3.06
2021
2022
9,270,000
9,270,000
4.00
4.125
4.13
4.22
2013
19,895,000
5.00
3.20
2023
9,270,000
4.25
4.31
2014
19,860,000
5.00
3.31
2024
9,270,000
4.25
4.39
(c' Yieldto firstparcallonOctoberi, 2014.
TheBondsare ofSeredfordeliverywhen,as and ifissued, subjectto the approvingopinionofSidleyAustin
Brown& WoodLLP,NewYork,NewYork,BondCounsel.TheBondswillbe availablefordeliveryin NewYork,
New York,through thefacilities ofDTC on or about October 19, 2004.
This and the inside cover page contain certain information for quick reference only. They are not a
summary
of this issue.
Investors
must read the entire Official Statement
the making of an informed investment decision.
September 23, 2004
Initial reo~feringyields were furnished by the successful bidder.
to obtain information
essential to
County, Virginia
BOARD
OF SUPERVISORS
Gerald E. Connolly, Chairman
Sharon Bulova, Vice Chairman
Joan
M. DuBois
Michael R. Frey
Penelope A. Gross
Catherine M. Hudgins
Gerald W. Hyland
T. Dana
Kauffman
Elaine McConnell
Linda Q. Smyth
COUNTY
OFFICIALS
Anthony H. Griffin, County Executive
VerdiaL; Haywood,DeputyCountyExecutive
Robert A. Stalzer, Deputy County Executive
David P. Bobzien, County Attorney
EdwardL. Long,Jr., ChiefFinancial OfSicer
DavidJ. Molchany,ChieflnformationgfjTcer
RobertL. Mears,Director,DepartmentofFinance
SusanW. Datta,Director,Departmentof Managementand Budget
LeonardP. Wales,CountyDebtManager
FINANCIAL
ADVISOR
Public Financial Management, Inc.
4601 North Fairfax
Suite
Drive
1130
Arlington, Virginia 22203-1547
(703)741-0175
BOND COUNSEL
Sidley Austin Brown & Wood LLP
787 Seventh Avenue
New York, New York 10019
(212)839-5323
Forinformation
relatingto thisOfficialStatementpleasecontact:
Edward L. Long, Jr., Chief Financial Officer
Fairfax County, Virginia
12000 Government Center Parkway, Suite 552
Fairfax, Virginia 22035-0074
(703)324-2531
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mi
STATEMENT
FAIRFAXCOUNTY,VIRGINIA
Regarding
$311,810,000
Public Improvement and Refunding Bonds, Series 2004 B
INTRODUCTION
Thepurpose
ofthisOfficial
Statement,
whichincludes
thecoverandinsidecoverpagesandtheappendices
hereto, is to furnish information in connection with the sale by Fairfax County, Virginia (the 'Y3ounty"), of its
$311,814000
Public
Improvement
andRefunding
Bonds,
Series
2004B(the"Bonds"
orthe"2004BBonds").
THE
BONDS
Authorization And Purposes; Refunding Plan
TheBondswillbe issuedundera resolution
(the"Resolution")
adoptedby theBoardof Supervisors
of
FairfaxCounty(the"Boardof Supervisors")
on September
13,2004pursuant
to ArticleVII,Section10(b)of the
Constitution
of VirginiaandthePublicFinanceActof 1991,Chapter26,Title15.2,Codeof Virginia,1950as
amended (the "Act").
AportionoftheBondswillbeissuedtoprovidefundsinthefollowing
amounts
forthefollowing
purposes:
SchoolImprovements...................................~;~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
$ 116,280,000
ParksandParkFacilities................:.................~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
13,920,000
PublicSafetyFacilities.........................................~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
50,700,000
Commercial
andRedevelopment
AreaImprovements
..........................
4,500.000
Total
$ 185.400.000
A portionof the Bondsare authorizedto be issuedto providefunds,withotheravailablefunds,to refund
andtoredeempriortotheirrespective
maturities
thefollowing
outstanding
bondsoftheCountyreferred
tohereafter
as the "1997B Refunding
Candidates",
the "1998A Refunding
Candidates",
andthe "1999B Refunding
Candidates"and collectivelyas the "RefundingCandidates":
Series
of
CUSIP
Refunded
Bonds Principal
Amount
1997B
1998A
1999B
$36,000,000
45,600,000
50,160,000
Nos.
Maturities Redemption
Date Redemption
Price 303820
2006-2017 Decemberi, 2005
2007-2018
June 1, 2006
2008-2019 Decemberi, 2007
102%
102
102
SKI-SWS
TFI-TS3
WW0-XH2
Thepurposeof therefundingis to achievepresentvaluedebtservicesavings.
Upondeliveryandissuance
of theBondsby theCounty,proceeds
thereofwillbe usedto provideforthe
paymentand redemption
of the Refunded
Bondsby depositing
withWachovia
Bank,N.A.,as escrowagent,
pursuantto an escrowdeposit agreement,cash and non-callable,direct obligationsof the United Statesof America
thematuring
principal
ofandinterest
onwhich,together
withsuchcash,willbesufficient
to payallprincipal,
applicable
redemption
premiums,
andintereston theRefunded
Bondsto theirrespective
redemption
dates. The
sufficiency
of thecashandsecurities
deposited
withtheescrowagentto paythisprincipal
of,applicable
redemption
and interest on the Refunded
Minnesota.
Bonds
will
beverified
byMecladrey
&Pullen
LLP,
Minneapolis,
i)
below.
The
sources
anduses
oftheproceeds
oftheBonds
andother
available
funds
aresummarized
assetforth
Sources
Par amount of the Bonds
·····································.
$ 311,810,000
Net offering prermum..............~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
28,846,198
County contribution
""'~~~~~···-·············--··-····-·-·····-
3.150,000
TotalSources..............~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
~4~4~8~6~6~8
Uses
Public Improvements
""'·········-·······-········-··········-
Depositwith EscrowAgent """""'-'·········-··········
Underwriters'
discount...
~~~····-··················-··········-
$ 198,760,000
143,674,646
891,777
expenses..............~~~~~~~~~~~~~~~~~~~~~~~~~
479,775
"""""""""""""""...........-········--··-·
~8
Description
TheBondswillbedatedthedateoftheirdelivery,
willbearinterest
fromtheirdate,payable
semi-annually
oneachApril1 andOctober
1,commencing
Aprili, 2005,
atrates,andwillmature,
in amounts
onOctober
1 in
eachoftheyears2005through
2024,inclusive,
assetforthon thecoverpageof thisOfficialStatement.TheBonds
will
be issued
in
denominations of $5,000 and i"fegral multiples thereof under
the book-entry system of the
Depository
TrustCompany("DTC"),and
principal
and
interest
on
the
bonds
will
bepayable
in themanner
described
inAppendix
V,"BOOK-ENTRY
ONLYSYSTEM".
Optional Redemption
The Bondsmaturingon or beforeOctober
i, 2014,arenotsubject
to optional
redemption
beforetheir
maturity.
TheBonds
maturing
afterOctober
i, 2014,
aresubject
toredemption
priortomaturity,
attheoption
ofthe
County,fromany moneysavailablefor
suchpurpose
part tin integralmultiples
of $5,000)at anytime, onanydatenotearlierthanOctoberi, 2014,in wholeor in
together with the interest accrued
at a redemption
priceequalto theprincipal
amount
thereof,
totheredemption
dateontheprincipal
amount
toberedeemed.
Security
TheBondsare generalobligations
oftheCounty
forwhich
itsfullfaith
andcredit
areirrevocably
pledged.
ofSupervisors
shall,
in
ea~ch
year
while
any
of
the
Bonds
shall
be
outstanding,
levy
andcollect
anadvalorem
taxuponallproperty
in
The Act requires that the Board
of and the intereston the Bondsas the same
authorized
tobeleviedinthe·County.
theCounty
subject
tolocal
taxation
sufficient
topaytheprincipal
Shallbecome
due,whichtaxshallbein addition
to allothertaxes
State Aid Intercept
Theprovisions
of Section15.2-2659
of theAct,in substance,
directtheGovernor
of Virginia,
upon
Satisfactory
proofof defaultbytheCountyin the
ofprincipal
oforinterest
ontheBonds,
immediately
to
O'derthe Comptroller
of Virginiato withholdallpayment
further
payment
to
the
County
of
all
funds,
or
any
part
thereof,
appropriatedand payableby the Commonwealth
foranyandallpurposes
untilsuchdefaultis
'emedied.Foraslongasthedefaultcontinues, to theCounty
holders of such Bonds
thelaw
directs
theGovernor
torequire
theComptroller
topaytothe
0' fhe paying agent therefor
all of
the withheld
funds or asmuch as are
fo cure insofaras possible,the defaulton suchBonds.
necessary
to cure, or
TheGovernor
shall,assoonaspracticable,
givenoticeof
'1
1
suchdefaultandof theavailability
of funds
withthepaying
agent
orwiththeComptroller
bypublication
onetimein
a daily "ewspaper of general circulation
in the City of Richmond and by mail to the registered owners of such
Bonds. Althoughthe provisions
of
Section
15.2-2659
have
never
been
tested
ina Virginia
coua,
theAttorney
Generalof Virginiahasopinedthat
appropriated
funds
canbewithheld
pursuant
toitsprovisions.
Remedies
TheBonds
donotspecifically
provide
anyremedies
thatwould
beavailable
toa bondholder
iftheCounty
defaults
in thepayment
ofprincipal
ofor interest
ontheBonds,
nordotheycontain
a provision
fortheappointment
Ofa trusteeto protectand enforcethe interests
of thebondholders
upontheoccurrence
of suchdefault.If a
bondholder
doesnotreceive
payment
ofprincipal
or interestwhendue,theholdercouldseekto obtaina writof
mandamus
~oma courtof competent
jurisdiction
'e9uiringthe Boardof Supervisors
to levyandcollectan ad
valorem
tax,unlimited
as to rateor amount,
UpOn
allpropertyin theCountysubjectto localtaxation
sufficient
to
pay theprincipal of and the interest on
may be impracticable and difficult to
theBonds
asthesame
shall
become
due.Themandamus
remedy,
however,
enforce.
Theenforceability
ofrights
orremedies
withrespect
totheBonds
(butnot the validityof the Bonds)may
be limited
by
banlauptcy,
insolvency,
or
other
State
or
Federal
laws,
heretofore
orhereafter
enacted,
andequitable
principles
affecting
theenforcement
ofcreditors'
rights.
The
County
hasnever
defaulted
inthepayment
ofeither
principal
orinterest
onanyindebtedness.
No Litigation RespectingThe Bonds
No litigationis pendingor, to the
bestoftheCounty's
knowledge,
threatened
(a)torestrain
orenjoin
the
issuance,
saleor delivery
of anyof theBonds,
theapplication
oftheproceeds
thereof
orthepledge
oftaxrevenues
forpayment
oftheBonds,
Cb)inanywaycontesting
O'affecting
anyauthority
fortheissuance
or validity
of the
Bonds,(c) in anywaycontestingthe
existence
orpowers
oftheCounty
or(d)that,
ifdetermined
adversely
against
theCounty,wouldhavea materialadverse
effect
ontheCounty.
See
"FATRFAX
COUNTY
CONT~NGENT
LIABILITIESAND CLAIMS"for a
description
oflitigation
affecting
theCounty.
3
a
COUNTY
GENERAL
cai
DESCRIPTION
Overview
TheCounty
islocated
inthenortheastern
corner
ofVirginia
andencompasses
anareaof407square
miles.
Its currentestimated
population
is approximately
onemillion.TheCountyis partof theWashington,
D.C.
metropolitan
area,which
includesjurisdictions
inMaryland,
theDistrict
ofColumbia
andNorthern
Virginia
TheFairfax
County
government
is·organized
undertheUrbanCounty
Executive
formofgovernment
las
definedunder Virginialaw). The governingbodyof theCounty
is theBoardof Supervisors
whichmakespolicies
fortheadministration
oftheCounty.
TheBoard
ofSupervisors
iscomprised
oftenmembers:
theChairman,
elected
at large for a four-year term, and one member ~om each of nine districts,elected for a four-yearterm by the voters
of the district in which the member resides. The Board of Supervisorsappointsa CountyExecutiveto act as the
administrative
headoftheCounty.
TheCounty
Executive
serves
atthepleasure
oftheBoardofSupervisors,
carries
outthepolicies
established
by the Boardof Supervisors,
directsbusiness
andadministrative
procedures,
and
recommends
officers
andpersonnel
tobeappointed
bytheBoard
ofSupervisors.
(SeeAppendix
I.)
In Virginia, cities and counties are discrete units
completely surrounds the City of Fairfax and is
(See Appendix II.)
generally is
of goverunentand do not overlap. FairfaxCounty
adjacentto the City of FallsChurchand the City of Alexandria.
Property
withinthesecitiesis notsubject
to taxation
byFairfaxCounty,
andtheCounty
notrequired
toprovide
governmental
services
totheirresidents.
TheCounty
does,however,
provide
certainservices
to theresidents
ofcertainofthesecitiespursuant
to agreements
withsuchcities.
In FairfaxCountythereare locatedthreeincorporated
towns,Clifton,HerndonandVienna,whichare
underlying units of government withinthe County, and the ordinancesand regulations of the County are, with
certain
limitations
prescribed
byStatelaw,generally
effective
inthem.(SeeAppendix
m.) Property
inthesetowns
is subject to County taxationand the Countyprovidescertainservicesto theirresidents.Thesetownsmay incur
bonded indebtedness without the prior approval of the County (more fully discussed in
"FAIRFAXCOUNTY--DEBTADMINISTRATIOES?.
general obligation
Certain County Administrative and Financial Staff Members
Anthony
H.Griffin,
County
Ej(ecutive,
joinedFairfax
County
Government
in 1989afterserving
asFalls
Church,
Virginia
CityManager
forsixyears.Hewasappointed
County
Executive
effective
~Tanuary
17,2000.He
previouslyservedas DeputyCountyExecutivefor
theCounty.He hadpreviouslyservedas actingCountyManager
andDeputy
County
Manager
ofArlington
County,
Virginia.
Heis a graduate
ofHobart
College
in Geneva,
New
York,andholdsMaster'sDegreesin UrbanandRegional
Planning
andin UrbanAffairs,witha conceneation
in
UrbanManagement,
fromVirginia
Polytechnic
Institute
andStateUniversity.
VerdiaL. Haywood,
DeputyCountyExecutive,
joinedFairfaxCountyGovernment
in 1978as Executive
Assistant to the County Executive. Prior tojoiningFairfax
County,
Mr.Haywood
servedasSeniorBudgetAnalyst
fortheCityof Richmond,
Virginia.Mr.Haywood
holdsa Bachelor's
DegreewithHonors
fromAlcornState
University,
with a concentration
in Political
Scienceand Economics,and a Master's Degree in Public
Administration
~omtheUniversity
of Illinois.Healsowastherecipient
of a FordFoundation
GrantandIllinois
State Urban Fellowship.
RobertA. Stalzer,DeputyCountyExecutive,
joinedFairfaxCountyGovernment
on June5, 2000.
Mr.Stalzerpreviously
servedasTownManager
fortheTownofHerndon,
VA~om1988untilJune2000.Hewas
Director
ofPlanning
andZoningforRoanoke
County,
Virginia
~om1983until1988.Mr.Stalzerholdsa Bachelor
of Arts degree from Clark University,a Masterof Regional
andCityPlanningdegreefromthe University
of
Oklahoma and a Master of Business Administration degreefrom SyracuseUniversity. Mr. Stalzeris President-elect
of the VirginiaLocal GovernmentManagementAssociation.
--a
P. BobzienwasappointedCountyAttorneyby theBoard
ofSupervisors
effective
January
1993,
afterservingas a memberof theFairfaxCountyPlanning
Commission
andasChairman
oftheFairfaxCountyGoals
Advisory Commission.
past President
Heis thepastChairof theLocalGovernment
LawSectionof theVirginiaStateBar,the
associate
law firm
oftheLocalGovernment
Attomeys
ofVirginia,
andinJune2004became
the66"president
ofthe
Virginia
StateBar. Priorto assuming
hispresentposition
he servedas Assistant
Counsel
in theOfficeof
Professional
Responsibility
oftheUnitedStatesDepartment
ofJustice.From1975to 1979Mr.Bobzien
wasan
in the Fairfax
of Fitzgerald
andSmith.He alsoservedas aCaptainin the JudgeAdvocate
General'sCorpsin the UnitedStatesArmyfrom1971to 1975. Mr. Bobzienis a graduateof HolyCrossCollege
andholds
aJ.D.fromtheUniversity
ofVirginia
andanL.L.M.
inTaxation
~omGeorge
Washington
University.
Edward
L.Long,
Jr.,ChiefFinancial
Officer,
joinedtheCounty
in 1977asa Budget
Analyst.
Heserved
as
a Senior Budget Analyst from 1980 to 1983and
asAssistant
Director
from1983to 1989.Hewasappointed
Budget
Director in October 1989 and Chief Financial Officer in 1997. Mr. Long has a Bachelor's Degree in Political
Sciencefrom Emery & HenryCollegeand a Master's
Degreein UrbanStudiesfromtheUniversity
of Maryland
at
CollegePark. Hehasservedon theFairfax-Falls
ChurchCommunity
ServicesBoardandis activeandhasheld
offices·in numerousprofessionalorganizationsin the NorthernVirginiaregion. Mr. Longservesas an adjunct
professor
at George
MasonUniversity
andontheGover~nment
Finance
Officers
Association
(GFOA)
Standards
Committee
onGovernmental
Budgeting
andManagement.
In1993Mr.Longwasrecognized
bytheWashington
Metropolitan
GFOA
withtheAnnaLeeBerman
Award
forOutstanding
Leadership
inGovernmental
Finance.
DavidJ. Molchany,
ChiefInformation
Officer,
joinedtheCountyin 1995.As ChiefInformation
Officer
(CIO) for the Fairfax County Government,Mr. Molchanyis responsiblefor the managementof all aspectsof
information
and technology
neededto supportthe CountyGovernment
and its constituents.
His area of
responsibilityincludes the Departmentof Information
Technology,
the FairfaxCountyPublicLibraryandthe
Department
ofCableCommunications
andConsumer
Protection.
Heis alsoresponsible
forTheHealth
Insurance
PortabilityandAccountability
Act(HIPAA)compliance
Countywide.
He andhisdepartments
havebeenrecognized
by numerous organizations forinnovative
useof technology.
In 2002theBertelsmann
Foundation
of Germany
recognized
theCounty'sE-Goverunent
programas oneof the fourtop pacesettersin the world. In 2003Mr.
Molchany
wasrecognized
byGoverning
Magazine
asoneofthetoptenPublicOfficials
oftheYear.Heis also
activein manyprofessional
organizations
andhasbeenappointed
bytheGovernor
of Virginia
andtheGeneral
Assembly to serve on statewide councils and
commissionson technology. Previousemployershave includedSallie
Mae, AmericanManagementSystemsand ElectronicDataSystems.Mr. Molchanyis a 1983graduateof Juniata
College
andholdsa Bachelor
ofScience
degreeinMarketing
andComputer
Science.
RobertL. Mearswasappointed
as FairfaxCountyDirectorof the Department
of Financeeffective
September
7, 1999.From1989untilthen,heserved
asFinance
Director
oftheFairfax
County
PublicSchools.
He
joined the Schools staff in 1986 as a coordinator of the logisticsbudgetafterservicewiththe Countygovernment
since1981as a Management
Analyst.Duringhis timewiththe Countygovernment,
he servedon the
interdepartmentalprojectteamresponsiblefor implementation
ofthegovernment's
newautomated
financial
system.
Mr.Mearsreceived
hisBachelor's
Degree
in Sociology
fromtheCollege
of William
8rMaryandhisMaster's
Degreein PublicAdministration
~om the Universityof Northern Colorado. He is Treasurer of the Board of
Trustees
oftheFairfaxCountyEmployees'
Retirement
System(FCERS),
Chairman
of theInvestment
Committee
of
FCERS,
Treasurer
oftheBoardofTrustees
ofthePoliceOfficers
Retirement
System,
andTreasurer
oftheBoardof
Trusteesof the UniformedRetirementSystem.
effective
SusanW.Dattawasappointedas FairfaxCountyDirectorof the Departmentof Managementand Budget
August
Il, 2001.Shehadserved
astheassistant
director
oftheDepartment
ofManagement
andBudget
since
1993.Ms.Datta
received
herBachelor's
Degree
inAmerican
Government
fromtheUniversity
ofVirginia
and a Masters of Public Administration ~om the
University
of North Carolinaat Chapel Hill. Ms. Datta workedas
Assistant
totheCounty
Manager
inCatawba
County,
NorthCarolina,
from1984to 1987.ShejoinedtheFairfax
County
Department
ofManagement
andBudget
inMay1987asa budget
analyst
Leonard
P.Wales,
County
DebtManager,
joinedtheCounty
as a Budget
Analyst
in 1981andserved
as
Assistant Budget Director from 1989 to 2003.
Manager in December 2003. Mr. Wales has
He wasappointedto the newlycreatedpositionof CountyDebt
beenresponsiblefor coordinatingthe debtmanagement
programand
capitalconstruction
financing
for theCountyandaffiliated
subdivisions
since1986. He hasbeenactivein the
~I--
and has served in various volunteer positions including Chairman of the
Supervisory Committee for the
Captain
intheUnited
StatesNaval
Reserve,maintainingcontinuousactive and inactiveservice since 1976. Mr. Wales is a graduateof the University
ofVirginia
andholdsa MasterofUrbanAffairsdegreefromtheVirginia
Polytechnic and State University.
County Employees
As of December 2003, there were 32,865
full andpart timepositionsauthorizedfor the County. Of this
total.
21,422
were
authorized
bytheCounty
School
Board;
10.603
were
authorized
inother
activities
funded
directly
or supported by the General Fund of the
County;and840wereauthorized
inactivities
notsupported
bytheGeneral
Fund, principallythe IntegratedSewer System. FairfaxCountyemployeesare notrepresented
by unions. Fairfax
Countypublicschoolemployees
have,however,
organized
theFairfaxEducation
Association
andtheFairfax
County
Federation
ofTeachers
torepresent
theinterests
ofitsmembers
atpublic
hearings
andmeetings
before
the
CountySchoolBoardandthe Boardof Supervisors.GeneralCountyemployees' interestsare representedat these
types of meetingsby the EmployeesAdvisory
Councilandothergroupssuchas Police,FireandSheriffemployee
organizations.
Noneof theseorganizations
is empowered
to serveas negotiating
agentforits members
for
collectivebargainingpurposes.Collectivebargainingby
publicemployeesin Virginiais prohibitedby law,and
suchrestrictionhasbeenupheldby the SupremeCourtof Virginia.
GOVERNMENT
Reflecting its urban character, Fairfax
SERVICES
Countyprovidesa comprehensive
range of public services
characteristic
ofitsformofgovernment
under
Virginia
lawanditsintegral
position
within
theWashington
metropolitan area. The following subsections describe
principalgovernmental
servicesand servicesperformedin
conjunction with other governmental entities.
General Government
Administration
The County government center
complexis locatedin theFairfaxCenterareaandis accessible
by U.S.
Routes 50 and 29, near InterstateHighway 66. The674,943
squarefootgovernment
centerhousescoreCounty
servicesand agencies. Two adjacentCounty
officebuildings
provideanadditional
486,129
squarefeetofspaceand
house
primarily
human
services
andcommunity
development
agencies
anddepartments
oftheCounty.
Sixremote
governmental centers, in addition to the central
provide office space for members of the
government center complex, have been established.
The centers
Board of Supervisors,personnel,police,and buildinginspectors,and
provide
meeting
rooms
forcommunity
activities.
Inaddition,
during
FY2002,
theCounty
completed
andoccupied
a new135,000
square
footgovernmental
center
fordelivery
ofCounty
services
inthesoutheast
partoftheCounty.
Fairfax County has received nationalrecognitionfor manyadministrative
and managerialinnovations
which have been implemented in order to increase
theefficiency
ofCountyservices
andreducecosts.Forexample,
decentralization in the administration
of Countyprogramshas beenemphasizedin orderto augmentthe efficient
deliveryof Countyservices.In early2002,GoverningMagazinereleasedthe resultsof a comprehensiveevaluation
of management practices of 40 counties across the United States. This survey was conductedby the Government
Performance
Project
andtheMaxwell
School
ofPublic
Affahs
andCitizenship
atSyracuse
University.
Atotalof
fivemanagement
categories
wereevaluated,
including
Financial
Management,
Managing
forResults,
information
Technology,HumanResourceManagementandCapitalManagement.
FairfaxCountywasoneof onlytwocounties
to earn the highest overall rating of A- and Fairfax
any of the five managementcategories.
Countywasthe onlycountyto receiveno gradelessthanA- in
Tosupport
recent
realignment
ofCounty
functions,
significant
investments
arebeing
made
intheCounty's
informationtechnologycapabilities. In addition to the investmentsrelated to the projects outlined above, the
Countyis alsoreplacingand upgradingits PublicSafetycommunications
network;integratingexistingdatabases
into a single CorporateLand DevelopmentSystem;digitizingthe integratedmappingsystem;implementing
electronic imaging for the CircuitCourt land records; and utilizingongoingupgradesto provide
onlinepublicaccess
to the County's library collections.
e~E~s
i
Intheareaofrevenue
collection
andfinancial
management,
theCounty
hasinstituted
many
computer-
assistedprograms
in orderto increaseCountyrevenues
andmonitorcosts.Forits approximately
331,000taxable
land parcels, the Countyconductsannual assessmentsusing computer-assistedappraisalprogramssimilarto those
used throughoutthe Commonwealth.In addition,the Departmentof Financemaintainsa cash managementprogram
whichgenerateslong range cash flow projectionsfor the County,permittingthe efficientinvestmentof funds. An
internalauditstaff monitorsCountyactivitiesand performsboth financialand managementaudits.
Public
Works
Essential management,professionalengineering,design, and construction services in support of the
construction
of roads,sidewalks,trails,stormdrainage,streetlights,bus shelters,publicfacilities(exceptschools,
housing and parks) and sewers are provided through the Department of Public Works and Environmental Services.
The Departmentis also responsiblefor the acquisitionof land for, and timely constructionof, public facilities
projects contained in bond referenda questionsapproved by the voters of Fairfax County. Referendaquestions
approvedby Countyvotershave included$492.57million(excludingroads and ~ansportationimprovements)since
April 1988 for majorpublic facilities, including libraries, the County courthouse, police stations, fire stations,
juvenileand adultdetentionfacilities,mentalhealthfacilities,commercialrevitalizationprojects,publicsafety,
neighborhood
improvement
projectsandstormdrainageprojects.In addition,the Department
is responsible
for the
operationand maintenanceof sanitarysewerand stormdrainagesystems,refuse collectionand disposal,and
wastewater
treatment.
Wastewater generated in the County is treated at one County-owned treatment facility, four
intejurisdictionaltreatmentfacilitiesand one private treatmentfacility. The County-ownedtreatmentfacilityis the
Noman M. Cole, Jr., PollutionControl Plant (formerlythe Lower Potomac Pollution Control Plant). The four
intejurisdictional
treatmentfacili~ies
aretheDistrictof ColumbiaWaterandSewerAuthority'sBluePlainsFacility,
and plants operated by the Upper OccoquanSewage Authority("UOSA"),Arlington County and the Alexandria
Sanitation Authority ("ASA"). The private treatment facility is the Harbor View Wastewater Treatment Plant. The
County'streatmentcapacityin the six facilitiestotals 148milliongallonsper day ("mgd").
The Departmentmanagesand operatesthe I-95 SanitaryLandfilllocatedon approximately500 acres in the
southernportionof the County. This facilityis operatedon a "specialfund" basis, which utilizestippingfees to pay
for the operation and capital expenditures of the landfill. Since December 31, 1995, the landfill has been dedicated
to the disposalof ash whichis generatedby the incinerationof municipalsolid waste at the Arlington/Alexandria
Energy/ResourceRecoveryFacility and the Fairfax County Energy/ResourceRecoveryFacility ("E/RRF'). The
Countyhas initiatedclosureactivitieswhich involve placinga syntheticcap over the closed sectionof the landfill
along with landfill gas extractionwells and leachatecollectionsystems. Cappingactivity has been completedon
approximately150 acres of the site. The closure project is a multi-phaseconstructionproject which will be ongoing throughoutthe remaininglife of the facility. Dedicatedreserves are establishedfor this purpose, and the
Countyhas met the financialassurancerequirementsset forth by the VirginiaDepartmentof EnvironmentalQuality
regardingclosure and post-closurecare. Additionallandfill requirements,either debris or sanitary waste, are met
through separate contracts.
The E/RRF burns solid waste delivered to the facility from the County, the District of Columbia, Prince
WilliamCounty, and portionsof LoudounCountyand has a dependablecapacityrating of 63 megawatts("MW')
for sale to DominionVirginiaPower. FairfaxCounty and the Fairfax County Solid Waste Authority,which was
createdby the County,enteredinto a servicecontract(the "CovantaContract")in August 1987 with OgdenMartin
Systems of Fairfax (now, Covanta Fairfax, Inc.), under which Covanta Fairfax, Inc. was obligated to design,
construct, operate and maintain a 3,000 ton per day resource recovery facility at the I-95 Landfill Site. Covanta
Energy Corporation,of which Covanta Fairfax,Inc. is an indirectlywholly-ownedsubsidiary,has guaranteedthe
obligations of Covanta Fairfax, Inc. under the Covanta Contract.
Fairfax County is obligatedunder the Covanta Contract to deliver certain minimumannual tonnagesof
solid waste to the EIRRFand to pay CovantaFairfax, Inc. tipping fees for the disposal of such waste to provide
funds sufficientto pay the operatingcosts of the E/RRF and debt serviceon the bonds. The County's commitment
to deliver minimumquantitiesof solid waste to the E/RRF was based on 'now control" powers granted to the
County by the General Assembly of Virginia to direct private haulers of solid waste to the E/RRF. An adverse 1994
i
by theSupreme
Courtof theUnitedStateshascreateduncertainty
withregardto thepowerof local
governments
toenforce
flowcontrolordinances.
Thesupply
ofmunicipal
solidwastetotheE/RRF
maybesubject
tothecompetitive
pricingofalternative
disposal
sites.Inlightofthecompetitive
pressures,
andinorderto maintain
itswastestreamto theEIRRF,
in August
of 1998theCounty
beganto enterintocontracts
withwastehaulers,
providing
thema discount
on wastedisposal
feesif theycommit
to keeptheirwastewithintheCounty.On
September
14,1998,theCounty
BoardofSupervisors
passeda resolution
clarifying
itsintenttoenforce
onlyintra-
stateflowcontrol,whichis notimpacted
bythe1994Supreme
Courtdecision.OnNovember
23,1998,theBoard
ofSupervisors
approved
changes
totheCountyCode,ata publichearing,
whichprovide
forintra-state
flowcontrol.
OnAprilI, 2002,Covanta
Energy
Corporation
andCovanta
Fairfax,
Inc.(collectively,
"Covanta'?,
along
witha numberof theiraffiliates,
filedvoluntary
banlrruptcy
petitions
pursuantto Chapter11of Title11of the
UnitedStatesCode(the"Banlauptcy
Code")intheUnitedStatesBankruptcy
CourtfortheSouthern
DistrictofNew
York(the"Banlauptcy
Court").Thecaseswereassigned
docketnumbers
02-40826
through
02-40949.
On March5, 2004,the Banlrruptcy
Courtenteredanorder confirming
TheDebtors'SecondJointPlanof
Reorganization
UnderChapter
11oftheBanluvptcy
Code(the"Reorganization
Plan").TheReorganization
Plan
provides,
amongotherthings,thatCovanta
wouldassumetheCovanta
Contract
ontheEffective
Datelasdefinedin
theReorganization
Plan).OnMarch11,2004,Covanta
fileda noticewiththeBanlrruptcy
Courtstating
thatthe
Effective
DateoftheReorganization
Planoccurred
onMarch10,2004.Pursuant
tothetermsoftheReorganization
Planandthe orderof theBanlauptcyCourtconfirming
it, Covantais deemedto haveassumedtheCovantaContract
and is legallyobligatedto continueto operatethe E/RRFin accordancewith the CovantaContract.
During
EY2002,theE/RRF
processed
nearly1,028,000
tonsofmaterial,
andinFY2003,nearly1,094,000
tons,exceeding
theguaranteed
requirements
by97,250tonsand163,250
tons,respectively.
Basedonthesuccess
of
the contractwasteprogram,the Countyis continuingto offer a discountrate to haulersfor contractualwaste
quantities
duringFY2004andEY2005.Covanta
Fairfax,
Inc.isexpected
toexceed
1million
tonsprocessed
for
M 2004.
Tocomply
withlocaldirectives,
theCounty
hasinitiated
a comprehensive
wastereduction
andrecycling
program.Recycling
is mandatory
forallresidents
andbusinesses.
Onegoaloftherecycling
program,
toreducethe
municipal
solidwastestreamby 25 percent,
wasachieved
by thecloseof EY1992,3 yearsaheadof State
requirements.
Incalendar
year2003theCounty
recycled
approximately
32percentofthewastestreamIncalendar
year2004theCountyestimates
thattheamountrecycled
willagainbeat least32percentofthewastestreamwhen
alldataarecompiled.TheCounty's
wastereduction/recycling
effortsinclude:
recyciing
of glass,aluminum,
newspaper,
officepaper,ferrousmetals,cormgated
cardboard,
usedmotoroil,automobile
batteries,
grass,leaves
·i
andbrush(withthedistribution
of groundwoodmulchto Countycitizens).
Public
Schools
The FairfaxCountyPublicSchools(FCPS)is the largesteducationalsystemin the Commonwealth
of
Virginia
andisthetwelfth
largest
school
system
nationwide
whenranked
byenrollment.
Thesystem
isdirected
by
a twelve-person
SchoolBoardelectedby the citizensof FairfaxCountyto servefour-year
terms. A student
representative
witha one-yeartermparticipatesin the discussionsbutdoesnot vote. Becausethe SchoolBoardis
notempowered
to levytaxesor to incurindebtedness,
theoperating
costsofFCPSareprovided
bytheFederaland
Stategovernments
andbytransfers
fromtheGeneral
FundoftheCounty
totheSchool
Board.(Seethesubsection
hereinentitled''Expenditures
andTransfers"
in thesection
entitled
"FINANCIAL
INFORMATION.")
Capital
construction
funding
forpublicschool
facilities
isprovided
primarily
bythesaleofgeneral
obligation
bondsofthe
County.
FCPSis a highqualitysystem
offering
a variety
of programs.
Thereis a strongacademic
program
for
college-bound
students.
Approximately
90%ofFCPSgraduates
enrollinpost-secondary
educational
programs.
In
additionto the traditional academiccurriculum,the ThomasJeffersonHighSchoolfor Scienceand Technology
provides
a four-year
collegepreparatory
program
forstudents
whohavea stronginterest
andhighaptitude
in
mathematics,science,computerscience,engineering,or relatedprofessionalfields.
The schoolhas been designated
as one of the Governor's magnet schools for science and technology,and students ~om other NorthernVirginia
countiesare admittedon a tuitionpayingbasis.
·:
extensiveprogram for students pursuing oppoaunities in technical careers has also been developed.
Variouscourses are offered in business,health occupations,industrialtechnology,marketing,trade and industrial,
and work and family studiesprogramareas. In addition,there are specialprogramsoffered for giftedchildrenand
for handicapped
childrenages2 through21. A comprehensive
summerschoolprogramfor studentsin the general
academicprogram as.well as for special education students is offered. FCPS also provides an extensive adult
educationprogramofferingbasiceducationcoursesand generaleducation,vocationaland enrichmentprograms.
Over 80,000 persons have enrolled in the adult education program.
In FY 2004, the School Board operates 20 special education centers and 185 schools including 136
elementary,22 middle,21 high and 3 secondaryschools(grades7-12) and 3 alternativehigh schools. Among the
205 schools and centers operated by FCPS are a variety of special programs designed to enhance student
achievement. These include two elementarymagnet schools with County-wideenrollment,eight elementaryor
middle focus schools with specific curricular approaches,ten modified calendar schools, 26 foreign language
partial-immersionschools, and 11 InternationalBaccalaureateprograms at the middle and high school level.
Approximately19,143employeesare assignedto workin schoolsand 1,641positionsare non-schoolbased. These
positionsprovidesupportin areassuchas personnel,payroll,and maintenance
of facilities.Thereare 513 grant
funded positions.
In FY 2004,the averageelementaryclass size was estimatedto be 21.1 studentsper teacher. Kindergarten
classesare staffedwith a teacherand an instructionalassistantat a maximumclass size of 28 students. Elementary
schoolsare staffedwith pupil-teacherratios of 25.0 to 1 in grades 1 through3, with grade one classescapped at 25
students maximum. Grades 4 through 6 are staffed at a pupil-teacher ratio of 27.0 to i. At the middle school level,
the averagenumberof studentsper classroomteacher is 24.2 students,with an averageof 24.5 studentsper teacher
at the high school level.
Certainschoolsare identifiedas havingstudentswith specialneeds;these schoolshave a high variabilityin
test scores, a high mobilityrate, a large percentageof free and reduced price lunch eligible students,and a high
minority enrollment. Supplementary staffing is allotted to these schools.
Thirty-twoelementaryschoolsare designatedas special needs. Of this total, 22 are designatedas Excel
schools. The remaining13 schoolshave a reducedpupil-teacherratio of 21.0 to 1 in grades 1 through3 and 23.0 to
1 in grades4 through6; maximumkindergartenclass size is set at 24 students. In addition,22 elementaryschools
havea 15.5to 1 pupil-teacher
ratioand 24 havea 15 to 1 ratioin the firstgradeto provideadditionalsupportto
students with special needs. These schools were selected based on their status as special needs schools, Tide 1
schools,or schoolswith a high percentageof free and reducedpricelunch eligibleenrollment. Nine middleschools
and eight high schools are classified as special needs schools. These schools have additional staff, including
teachers, assigned to them. In addition, Project Excel provides students in 22 elementaryschools with further
reduced pupil-teacherratios, full day kindergartenand additionalstaff time for learning and enhancedacademic
programs.
FCPS providesa numberof studentinterventionprogramsfor the increasingpopulationof non-traditional
learners. These alternativehigh schoolsand programsand four Englishfor Speakersof OtherLanguagestransition
centers are operated throughoutthe County. The Summit Program is designed to help chronicallydisruptive
studentschangetheir behaviorsand attitudes. Theseprogramsare operatedat 12 sites throughoutthe County.
and2003
shown below, the number of students attending Fairfax County Public Schools increased between 1994
C~F
projected that enrollment will increase through 2009.
NumberofPoblic
Fiscal
Year
School
Students
1994 .................................................
1995 ........................................,........
137,495
140,097
1996 .................................................
143,040
1997 .................................................
1998 .................................................
145,805
148,036
1999 .................................................
151,418
2000 ....................;............................
154,523
2001 .................................................
158,331
2002 .................................................
161,385
2003 .................................................
163,386
I
'
;i
4
Enrollment
Proiections
2004 .................................................
2005 .................................................
164,667
166,780
2006 .................................................
168,959
2008 .................................................
173,207
2007.............................................;...171,126
i
Source: Fairfax County Public Schools
Fairfax County has achieved its status as a superior quality educational school system while maintaining
one of the lower per-pupil costs in the Washington metropolitan area The average per-pupil expenditures based on
FY 2004 approved budget operating costs for several Washington metropolitan areajurisdictions
Source:
Jurisdiction
Per-Pupil
Arlington County..........................................
City of Fails Church .....................................
City of Alexandria ......................... ............,
Montgomery County (Md.) ..........................
Fairfax County..............................................
Loudoun County...........................................
City of Manassas ....................................,....
Prince William County ................................
Prince George's County (Md.) .....................
$13,950
13,377
12,198
10,644
10,113
9,604
9,038
8,205
8,014
FY 2004 Metropolitan Area Boards of Education Guide, December 2003.
to
are as follows:
Expenditures
i
FCPScomparesfavorably
withotherarea schoolsystems.In the 2004NationalMeritScholarship
program210FCPSstudentswerenamedsemifinalists
and FCPSstudentsaccountedfor 52 percentof Virginia's
National Merit Scholarship semifinalists.
In addition,FCPSstudents'SATscorescomparefavorablywithstateand nationalaverageson Scholastic
Aptitude Tests administered by the College Board.
2003 Average Scholastic Aptitude Test Scores
United States
Virginia
Fairfax County
Verbal
Math
507
514
546
519
510
564
Total
1026
1024
1110
Source: Educational Testing Service
FCPSwasratedas a GoldMedalschooldistrict,the highestratingpossible,by ExpansionManagement
magazinein its 2002rankings.In its twelfthannualsurvey,the magazine'sEducationalQuotient("EQ")ranked
over 1,500schooldistricts.Accordingto the magazine,the EQ assistsin determiningwhichschoolsystemsare
likelyto producequalityworkersfor today'scomplexglobalmarkets.Themagazineemphasizes
thatschooldistrict
desirabilityis a majorfactorfor businessesin selectingthe rightcommunityfor expansionsand locations.FCPS
scored97 pointsout of a possible99 points,receivingthe highestratingin the metropolitan
Washingtonarea. In
2002,FCPSwasrankedin the top 20 districtsnationally.
In the last ten yearsmorethan$1.5billionin generalobligationbondshavebeenauthorizedby County
voters for school constructionprojects. In November 2003, Fairfax County voters authorized the Board of
Supervisorsto issue bondsin the aggregateamountof $290.61millionfor planningand constructionof new schools,
additions and renewals at existing schools, and other school improvements countywide. (See "FAIRFAX
COUNTY - CAPITAL IMPROVEMENT PROGRAM".)
Transportation
General
FairfaxCountyis servedby varioushighway,rail and air transportation
facilities.The CapitalBeltway
(InterstateHighway495),InterstateHighways95, 395,and66 andthe DullesToll Roadprovideaccessto all parts
of the Washingtonmetropolitan
area and majorsurfacetransportation
corridorsalongthe easternseaboard.The
WashingtonMetropolitanArea TransitAuthority("WMATA")rail system providesarea residents with one of the
largest and most modern regional transit systems in the world.
Twomajorairportsservethe Countywith dailynationaland internationalservice. WashingtonDulles
International
Airport,locatedalongthe County'swesternboundary,is alsothe site of a designatedForeignTrade
Zone. RonaldReaganWashingtonNationalAirport,locateda few miles east of the County,is accessibleby
InterstateHighways66 and 395.In 1987controlof thesefacilitieswas transferredby a 50-yearleasefromthe
FederalGovernment
to theMetropolitan
WashingtonAirportsAuthority("MWAA"),a publicauthoritycreatedby
intejurisdictionalcompactbetweenthe Commonwealthand the District of Columbia. In June 2003, the lease was
extended
to 2067.
Groundtransportation
hasreceivedsignificantattentionfromthe Countyin thepastfewyears,primarilyin
an effort to relieve traffic congestionalong the major arterialsleading to Washington,D.C. and also to facilitate
cross-County
movement,connecting
establishedand newlydevelopingcentersof commerceand industry.Efforts
have includedincreasedlocalfundingfor highwayimprovements,
establishmentof transportationimprovement
districts,creationof Countytransitsystems,continuedparticipationin WMATA,and otherimprovements
which
encourageincreased use of Metrorail, bus services andcarpooling. The County also participatesin a regional
commuterrail systemto expandthe familyof transportationservicesavailableto Countyresidents.
Since 1993, the Virginia General Assemblyhas authorizeda series of transportationbond authorization
billsforprojects
inNorthern
Virginia
Thelegislation
hasauthorized
over$540
million
inbonds
thatwould
be
servicedindividuallyfrom a varietyof sourcesincludingrecordationtax revenuesthat are collectedby the
Commonwealth
on propertytransactions,toll road revenues,and rightof way fees. Projectssupportedby these
bondshaveincludedverysignificantprojectsbenefitingFairfaxCountyincludingthe FairfaxCountyParkway,the
County's share of capitalcosts for the WashingtonMetropolitanArea TransitAuthorityMetrorailsystem,the Dulles
toll road and other smallerprojects in additionto significantprojectsin neighboringArlington,PrinceWilliamand
LoudounCountiesthat supportthe regionaltransportationnetwork.
Duringits 2000 session,the GeneralAssemblyapprovedthe VirginiaTransportationAct of 2000. The Act
providesfundingfor $2.64 billion in transportationprojects statewideover a six-yearperiod. These projectsare to
be funded through a variety of sources, including Federal Highway ReimbursementAnticipation Notes,
Commonwealthgeneral funds, re-estimates with revenues in the TransportationTrust Fund and the Highway
a
a
a
Maintenance Operating Fund, additional revenue from changes in fuel tax collection and several other sources. The
legislation contained numerous projects in Fairfax County, including improvements to U.S. Route 1, U.S. Route 29,
1-66,1-95,1-495,the FairfaxCountyParkway,and StateRoutes7 and 123. The Act alsoprovidesfundingfor a
number of regional projects includingthe extensionof rail in the Dulles Corridor,the replacementof the Wilson
Bridge,Metrorailparkingexpansion,Metrorailrollingstock replacementand commuterrail service. In addition,the
legislationincludedprovisionsfor payment of the debt service for the additionalbonds authorizedduringthe 1999
session of the General Assembly.
The Board of Supervisors has authorized an additional $165 million in general obligation bonds for
transportation purposes, subject to a favorable referendum on November 2, 2004.
Highway Improvements
In Virginia, the State is normally responsible for highway construction and maintenance.
However,
highway improvement needs in Fairfax County far exceed the highway revenues available from the State.
Approximately
$353 millionin road improvements,
authorizedby the votersin 1985, 1988and 1992County
referenda,were identifiedas critical. Countybond financinghas enabledthese improvementsto be undertakenat a
much earlierpoint as comparedto State improvementscheduleswhichare constrainedby currentState gasolinetax
rates and State-wideallocationformulae. The Countywill have no liabilityfor the operatingcosts for these roads as
they are, or will become,part of the State primaryand secondaryroad systemsand will be maintainedby the State.
Transportation
Improvement Districts
Transportation
Improvement
Districts
areanotherfinancing
alternative
forneededhighway
improvements.
The County,in partnershipwith LoudounCounty,a neighboringjurisdiction,formedthe Route28 Highway
Transportation Improvement District on December 21, 1987 (the "District"). The District was formed to accelerate
plannedhighway improvements proposed by the State to State Route 28 which connects State Route 7 in eastern
LoudounCountyto U.S.Route50 and InterstateHighway66 in westernFairfaxCounty,runningapproximately
parallelto the County'swesternborder. Theseinitialimprovements
are nowcomplete.StateRoute28 provides
~
access to Washington Dulles International Airport, along with the Dulles Access Road and the Dulles Toll Road
which connect the Capital Beltway to Dulles Airport.
The Districtis administeredby a Commissionappointedby the Boardsof Supervisorsof the two counties.
The District Commissionmay request the counties to subject the owners of property within the District to a
maximum additional tax assessment of 20 cents per $100 of assessed value in order to provide funds for
transportationimprovementswithin the District. The District currently imposes a tax of 20 cents per $100 of
assessedvalue. Taxes collected on property within the District located in Fairfax County are currentlyapplied to
debt serviceon the outstandingbonds of the CommonwealthTransportationBoard ("CTB") and the Fairfax County
EconomicDevelopmentAuthority("EDA")in respectof the Route28 project.
ii
& i
Representativesof Fairfax and LoudounCountiesand CI~Bhave entered into an agreement concerning a
planto finance
sixIliban(gradeseparated)
interchanges
forRoute28. Theserepresentatives
haveagreedto a
financingplanto providefundingfor theseinterchanges
throughthe issuanceof bonds by the Fairfax CountyEDA
in an amount
sufficient
to provide
approximately
$90million
andbondsbye~ to produce
an additional
$36
million
towards
thecostoftheseinterchanges
withdebtservice
onallthebondstobepayable
fromthetaxlevied
in
theDis~ict.Asa partofthisplantheCTBrefunded
alloftheoutstanding
bondsit issuedin 1992topermit
the
pledgeof the tax towardsits refunding
bonds,its newbondsandthe EDAbonds.CTBhasalsocommitted
an
additional
$67millionof VDOTallocations
and$14millionofNVTDbondstowards
thecostof construction.
It is
anticipated
thatall sixinterchanges
willbe completedby theendof 2006.
TheEDAcompleted
theissuance
of thefirstseriesof its bondsin October,
2003,to produce$30million
towardthecostof theinterchanges.
In August,2004,theEDAcompleted
theissuance
of thesecondseriesof its
bonds the effect of which was an additional
$60milliontowardthe cost of the interchanges.The Countieshave
eachagreedto restoreany amountdrawnon the debtservicereservefundfor the EDAbondsin the eventDistrict
revenues are insufficient to pay annual debt service. 'I~e Counties' obligations are subject to appropriation of funds
forthepurposeof restoring
thedebtservicereservefund. Revenues
collected
in excessof CTBandEDAdebt
servicerequirements
willbe heldin a Revenue
Stabilization
Fundequalto maximum
annualdebtserviceonthe
EDAbondsto paydebtservicepriorto anydrawon thedebtservicereservefund,in theeventannualDistrict
revenues
aretemporarily
insufficient
to payannualdebtservice.
Withrespectto theoutstanding
CTBbonds,in the
eventDistrictannualrevenuesare insufficientto pay annualdebt service,the differencebetweenthe CTBdebt
service
requirement
andtheamount
oftaxescollected
ispaidforoutoftheannual
allocation
ofVirginia
Department
of TransportationPrimarySystemHighwayfunds.
Underthetermsof theoriginalpetition,an additional
fourinterchanges
andwidening
of apomonof the
highway
~omsixtoeightlaneswould
bepermitted
tobefunded
fromDistrict
taxesifsufficient
fundsareavailable,
however
theDistrictis underno obligation
to fundtheseadditional
improvements
at thistime. Thetermof the
Disu-iet
expires
in2038,
butmaynotbeabolished
solong
asthere
areanyDistrict
obligations
remaining
outstanding.
AllcurrentCTBandplanned
EDAobligations
willbescheduled
toberetiredby2033.
Duringits 2001session,theVirginiaGeneralAssemblyapprovedlegislationthatallowsfor thecreationof
oneor morespecial~ansportation
taxingdistrictslocatedbetweenthe WestFallsChurchMe~orailstationandthe
DullesAirportareato providea meansof financingan extensionofrailservicein theDullesCorridor.Thestructure
ofanysuchdistrict
is modeled
aftertheexisting
Route28District.OnFebruary
23,2004,pursuant
to a petition
submittedby landowners
representing
approximately
67 percentof the assessedvalueof commercial
andindustrial
property
in theTysonsCornerandRestoncommercial
districts,
theBoardof Supervisors
formedthePhaseI Dulles
RailTransportation
Improvement
Dis~ict
toprovide
fundstosupport
theCounty's
shareofPhaseI ofa proposed
expansion
oftheMetrorail
system
toDulles
Airport
andbeyond.PhaseI willconstruct
approximately
11milesof
raillinethrough
theCounty's
primary
urbancenter,Tysons
Corner,
to Reston,
andwilltietheregion'ssecond
largestcommercialcenter to the regionalrail system.
TheCounty's
shareforPhaseI construction
isestimated
tobe$366.5
million,
or25percent
ofa projected
totalof$1.5billion
required
fortheproject.Thecurrent
planoffinance
callsforthefederal
government
toprovide
up to 50 percentof the fundingthroughfederalNew Startslegislation.In June 2004,federaltransitofficials
approvedthe startof preliminaryengineeringon the first phaseof expansionfromWestFallsChurchto Reston.
TheVirginia
Department
ofRailandPublic
Transportation
isexpected
toprovide
theremaining
25percent.
Funds
forfinancing
theCountyshareareto beprovided
froma realestatetaxlevyonallproperty
zonedforcommercial
andindustrial
useinthenewdistrict.
PhaseII oftheproject
which
willcomplete
the23milelinetoDulles
Airport
andbeyond
intoLoudoun
County
is expected
tocost$1.8billionof whichtheCounty's
shareis expected
to be
approximately
$172million,or approximately
9 percent.Theplanof financewillbe similarto thatof PhaseI;
however,
thelocal25percent
sharewillbeshared
between
Fairfax
County,
Loudoun
County
andtheWashington
Metropolitan
AirportsAuthority.TheCountyexpectsto receiveanotherpetitionin the nearfuturefrominterested
landownersto formanothertax districtcomprisingthe Reston-Herndon-Dulles
commercialdistrictsin orderto
providefundsforPhaseII financing.A specialimprovements
taxof up to $0.40per $100of theassessedfair
marketvalueofanytaxablecommercial
andindustrial
realestateinthedistrictcouldbelevied.However,
underthe
termsof thepetition
theBoardmaynotassessa taxgreaterthan$0.22per$100of assessed
valuepriorto the
issuance
of anybonds,andmaynotconstruct
a planof finance
thatwouldrequire
greaterthan$0.29per$100
Sp~~e~s~p~~~--l----,~-,-------_-,__r:__rT~-:
.:~~.-.;~r.-~~
-.~·~--I-~-~~~9i7-;~.--?rr~~-~
;i
growth in value of 1.5 percent per year. However;once debt is incurredthe Board will be bound only by''
thestatutorylimitof $0.40per$100. Thelocalplanof financeanticipates
atar levypriorto bondissuanceso as to
buildadequatereservesfor debt servicerequirements.On June21, 2004the Boardof Supervisorsapproveda
SpecialImprovements
Taxat a rateof $0.22per$100of assessedvalue,effectiveJuly 1,2004.
County Transit Systems
In an effort to provide an alternative to escalating Metrobus costs, the FAIRFAX CONNECTOR feeder bus
serviceto MetrorailStationshas operatedsince 1985 when 10 routes initially went into service. Since that time,
service expansion and restructuring has occurred as demand has increased and additional Metrorail Stations have
beenopened. The FAIRFAXCONNECTOR
currentlyoperates55 routesto 9 MetrorailStations,includingthe
Huntington,
Pentagon,WestFallsChurch,Van Dorn,Vienna-Fairfax-GMU,
DunnLoring-Merrifield,
FranconiaSpringfield,
PentagonCity,Eisenhower
AvenueandKingStreetStations.Privatecontractorswerehiredto operate
andmaintainthe service,andhavethe responsibility
to employandsuperviseall transitpersonnel,whilethe Board
of Supervisors
maintainscontroland approvesall policiesfor bus servicesuchas routesand servicelevels,fare
structures, and funding assistance.
The FATRFAXCONNECTORSystem is supported from the General Fund and fare box revenues.
Ridership has steadily increased since inception in 1985. The FAIRFAX CONNECTOR carried 7.6 million
passengersin FY 2003. FAIRFAXCONNECTOR
Systemexpenditures
totaled$23,915,922
in FY 2003including
capitalexpenditures.The Countyruns two permanentmaintenanceand garage facilitiesfor the FAIRFAX
CONNECTOR.
The CountyalsosponsorsFASTRAN,a paratransitsystemprimarilytransporting
clientsof four human
serviceagencies:the Fairfax-Falls
ChurchCommunity
ServicesBoard,the Department
of Community
and
RecreationServices,the DepartmentofFamilyServicesandthe HealthDepartment.Theclientsof theseagencies,
FYj
includingthose with low incomesand people with physicaland cognitivedisabilitieswho cannotdrive, find a ride,
use Metro or Connector buses, or afford taxi fares can use FASTRAN to reach essential programs and services.
2002funding
of $9,554,000
wasprovided
primarily
bytheclientagencies
fromoperating
fundsalreadydesignated
for transportation
servicein theirrespectiveprograms.This system,whichbeganin FY 1986,was designedto
providea centralized,more effectiveservicein lieu of programsindividuallyadministeredby each agency.
FASTRAN'sprivatesectorcontractorprovided535,685one-wayrides in FY 2002 for clientsneedingtrips to
medicalappointments,
employment,
therapy,seniorcenters,adultdayhealthcare,andotherpurposesas determined
by client agencies.
Metro Transit System
Since 1970,FairfaxCountyand the other majorpoliticalsubdivisions
in the Washington,
D.C.
metropolitanarea have contractedwith the WashingtonMetropolitanArea TransitAuthority("WMATA")to
finance,
construct
andoperatea 103-mile
subwayandsurfacerailtransitsystemknownas "Metrorail."
Funding
for
theconstruction
of the Metrorailsystemhascome~omdirectCongressional
appropriations
matchedby directlocal
contributions.
FiveInterimCapitalContributions
Agreements
betweenWMATA
andthe participating
political
jurisdictions
havebeenexecutedto date. Currently,theFifthInterimCapitalContributions
Agreement("ICCA-V')
governsthe scheduleand costs for the Federal and local shares of constructionof the final 13.5 miles of the 103mile Adopted Regional System ("ARS").
ZCCA-V,
executed
on January29, 1992,reflectedtheFederalauthorization
of $1.3billionto complete
construction
oftheARSby2001.Thisaccelerated
construction
schedule,
calledthe"FastTrack"program,
required
stableFederalappropriations
of $200millionperyearthroughFY 1998. Fiftymilliondollarswaspaidin FY 1999,
completingall federalpayments.Of the fourMetrorailsegments,the Franconia-Springfield
segment,whichis the
lastsegment
in FairfaxCountylandVirginia),
openedin June1997.In addition
segments
in Montgomery
County
Marylandand the Districtof Columbiahavebeencompleted.The last remainingsegmentopenedon January13,
2001.
In November,2002, the WMATABoard of Directorsadopted a new I0-year Capital Improvement Plan.
Thisis thefirstcomprehensive,
prioritized
transitplandeveloped
to maintain
the integrity
of theexistingcapital
p'
androllingstockof theMetrobus
andMetrorail
systems.Theplanalsoprovides
foradequate
systemaccess
and capacity growth to maintain current transit market share
in the future and an appropriatelevel of system
expansionto reachnewtransitmarkets.The plan as revisedin January2003establishedrequirements
for a $1.55
billionI~astructureRenewalProgram,and$625.1millionfor 120railcarsand$171millionfor 115newbusesand
ancillary
facilities
andsystemsforexpanded
serviceto meetexpanding
demand.
In conjunction
withotherpartners
inWMATA,
FairfaxCountywillbeconsidering
optionsforfunding
itsshareoftheserequirements.
Fundingsourcesfor FairfaxCounty'sMetrorail
construction
contributions
are:generalobligation
bond
proceeds,
Statebondproceeds
andStateaid. Through
June30,2003FairfaxCountyhadcontributed
approximately
$235.8 million toward Metrorail
construction,consisting of $130 million of County general obligation bond
proceeds,
$102.7millionof Stateaidfortransportation
and$3.1millionin credits.FairfaxCounty'sobligations
underICCA-Vto providelocalmatchingfundscurrentlytotal$113.2million.Since1993,theCommonwealth
has
authorized
over$93millionof Statetransportation
bondsto be allocated
forusein FairfaxCountyforsupportof
Metrorailconstruction,
replacement
of rollingstockand parkingexpansion.ICCA-Vlocalrequirements
are
reallocated every two years to reflect current conditions.
Funding
sourcesforWMATA
operating
assistance
are:theGeneral
Fund,gasoline
taxreceipts,Stateaid
andFederal
Operating
Assistance.
FairfaxCounty'sshareofthebusandrailoperating
subsidies
forEY1994-2003,
and the estimatefor FY 2004 are shownin the followingtable:
Fairfax County WMATA Operating Subsidies
(Millions of Dollars)
Rail Const.
Fiscal
Bus
Year
Rail
Operations'" Operations'
Manage-
mentl
ADA
Para-
transitl
Less Federal
Operating
Subsidies
Less
Less Gas
State
Tax
Aid2
12.642
.320
.435
2.325
20.164
3.589
1995.........
1996.........
29.921
29.424
13.261
13.793
.237
.194
.626
.844
2.316
1509
22.204
21.956
3.451
2.757
1997.........
27.197
1998.....;...
1999.........
2000.........
2001.........
2002.........
2003.........
2004test.)
25.108
24.199
24.541
25.001
26.247
25.495
28.011
14.067
1.389
1.122
28.086
4.723
.208
.270
.305
.000
.000
.000
.000
.000
.966
1512
2.029
2.707
2.552
3.595
4.938
1.125
0.000
0.000
0.000
0.000
0.000
0.000
27.682
27.850
28.654
19.898
26.720
25.433
23.871
Year
Reeeipts3 Credit
19944........ 33.606
15.714
14.974
19.815
17.644
18.844
20.139
18.588
Prior
5.104
4.108
6.840
11.903
10.240
10.949
10.550
Net
General
Fund
20.925
.119
.868
.399
1.309
0.000
1.409
.758
1.100
2.087
5574
15.956
17.166
8531
6.838
9.032
7.492
12.793
9583
10.750
11.540
Source:Fairfax
County
Department
ofTransportation
andDepartment
ofManagement
andBudget.
1
Theamounts
shown
foroperating
subsidies
forN 1994through
2003represent
actualdisbursements
inthoseyears.Adjustments
basedon
finalWMATA
annualaudited
figures
areincorporated
inthefiscalyearinwhichthecreditforanoverpayment
wasapplied
ora debited
amountwaspaidratherthanthefiscalyearinwhichthecreditordebitwaseamed,except
as notedbelow.
2
3
In 1983,
theVirginia
General
Assembly
enacted
legislation
permitting
theuseofStateaidforomnspoaation
to fundtransit
program
operating costs in addition to ~nsit program capital costs.
InJanuary
1980,theVirginia
General
Assembly
enacted
legislation
whichestablished
a 2 percent
retailgasoline
tax,tobededicated
to
mass~ansitcosts,inthoseNorthern
Virginia
jurisdictions
covered
bytheNorthem
Virginia
Transportation
Commission
("NVTC").
The
receipts
fromthistaxarepaidtoNVTC
which
thenallocates
thesefunds
toparticipating
jurisdictions
forpayment
oftransit
operating,
capital and debt service costs.
4
Rguresdonotinclude
a prioryearadjustment
(cost)of$219,772
whichwaspaidinFY1994withCounty
General
Funds.
5
Includes
other
service
enhancements.
TheAmericans
withDisabilities
Actrequitesthattransitsystems
provideparatransit
serviceforpassengers
withdisabilities.To complywiththeAct,WMATAbeganoperationof MetroAccess
on JuneI, 1994,withlimited
hoursofservice.Thehoursofoperation
wasexpanded
in November
1995,andfullservicebeganinJanuary1997.
The localjurisdictions,includingFairfaxCounty,will be responsiblefor fundingthe operatingdeficitassociated
withthisservice.In FY2003,FairfaxCounty'sshareof theoperatingdeficitwas$3.595million.
15
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Other
Transportation
Improve~nents
In conjunction
withdirecthighway
improvements
andparticipation
in WMATA
Metrobus
andMetrorail
operations,
theCounty
isexamining
otheralternatives
forcommuting
thatwillappeal
toa widevariety
ofcommuter
tastes, needs and economies.
Initiatives which have
been,or are nowbeing,implemented
includeexpansionof
parking
facilities
at Me~orail
stations,
establishment
of commuter
"ParkandRide"lots,implementation
of a
transportationsystems managementprogram in the Dulles corridor, and establishmentof a regional, publicly
operated ·commuter rail system.
Commuter
Park-and-Ride
Facilities
Fairfax
County
completed
a comprehensive
countywide
analysis
ofitsexisting
park-and-ride
facilities
and
projected
demand
forfuturefacilities
in February
1988.Fromthisstudy,twosignificant
capitalinitiatives
were
undertakenandover7,500structured
andsurfaceparkingspaceshavebeenprovided
at Metrorail
stationsin the
County.In additionanother1,086spaceswereprovidedthroughtheCounty'sSuburbanMobilityGrantApplication
to theFederalTransportation
Administration
("FTA")for threepark-and-ride
facilities.
DullesCorridorTransportation
Systems
Management
("TSM")Facilities
In 1989,FairfaxCounty
Department
ofTransportation
completed
theDullesAirportAccessRoadCorridor
Transit
Alternatives
Study.Thestudyrecommended
andtheBoardofSupervisors
endorsed
implementation
ofthe
Transportation
System
Management
("TSM')alternative
in sucha wayas to preserve
theoptionof futurerail
service
in theCorridor.
OnNovember
6, 1990,County
votersapproved
$36million
of general
obligation
bond
fundsforimplementation
oftheDullesTSMprogram.A grantapplication
wasforwarded
to theFTAinDecember
1990for$36.0million.FTAhasappropriated
$34.2million
ofFederal
discretionary
fundsforthisinitiative
thus
far.
TheprojectincludestwoParkandRidefacilitiesat RestonEastandHerndon-Monroe
as wellas twotransit
centers.
Thetransit
centers
located
atTysons-West*Park
andReston
TownCenter
willserveprimarily
aspassenger
transfer points, as buses meet at these transit centers on a prescribed schedule to permit ease of ~ansfer between
busesserving
various
areasoftheDulles
Corridor
andFairfax
County.Thepark-and-ride
facilities
include
2,627
parking spaces in two facilities.
Commuter
Rail
Fairfax
Countyas a member
of theNorthern
Virginia
Transportation
Commission
("NVTC")
andin
cooperation
withthe Potomac
and Rappahanock
Transportation
Commission
("PRTC~is a participating
jurisdiction
intheoperation
oftheVirginia
Railway
Express
('lrRE")commuter
railservice.AsofJune30,2003,
theservice
consisted
ofsixpeakperiod
tripsontheCSXTransportation
line~omFredericksburg
toUnionStation
in the Districtof Columbia
andsix peaktripson the NorfolkSouthernRailwaylinefromManassas
to Union
Station. Inaddition,
middayserviceisprovided
on bothlines. FiveFairfaxCountystationsarecurrentlyoperating.
TheMasterAgreement
callsfortheCountyto con~ibute
to capital,operating
anddebtservicecostsof the
VREon a proratabasisaccording
to its shareof ridershipandpopulation.Since1990NVTChassold$102.3
millionworthof bondsto finance
passenger
cars,locomotives,
yardfacilities
andstations.Underthetermsof the
MasterAgreement
debtserviceonthesebondswillbe fundedby StateandFederalfundsandVRErevenues.
TheVREFY2003Budget
identified
itsprincipal
sources
of revenue
as: stateandfederalaid(58.3
percent),
passenger
revenues
(26.3percent),
jurisdictional
subsidies
(10.1percent)andmiscellaneous
income(5.3
percent).TheCounty'sshareoftheM 2003commuter
railoperating
andcapitalbudgetwas$2.61million.
Parks, Recreation
and Libraries
Fairfax
County
provides
a variety
ofrecreational,
educational,
andcultural
activities
andservices
topeople
wholive,workandstudyinFairfax
County.
Infiscalyear2003,theFairfax
County
Public
Library
(the"Library")
-~-~:~II..-~~--~--
--~--?~--~;~--;--:
--m-·- ·.;;-.--::;-··m---:
more than 11 million loans and recordedmore than five million visits to its 21 branches,and reported more
than 2.1 million user visits to its Web site. The Library has more than 2.5 million books and other items in its
collection,
andmorethan600,000registeredcardholders.LastyeartheLibrary,whichwasrankedoneof thetop 10
librarysystemsin the UnitedStates,offeredmorethan4,000freeeventsandactivitiesforall ages,includingpuppet
showsfor toddlers,storytime for school-agedchildren,bookdiscussiongroupsfor teens,live authorvisitsfor adults
and Internet navigationclasses for seniors. The Library also makes library services available and accessible to
peoplewhohavedisabilitiesor are homebound.Thecommunity
showedits highregardandstrongsupportfor the
Libraryby donatingmorethan 162,000volunteerhoursto the librarysystemlast year. TheBoardof Supervisors
has authorizedan additional$52.5millionin generalobligationbondsfor librarypurposes,subjectto a favorable
referendum on November 2, 2004.
In addition,a varietyof recreational,
community,and humanservicesare providedby the Departmentof
Communityand RecreationServices for Countyresidents of all ages and incomes. These servicesinclude senior
adult programsand centers,therapeuticrecreationservicesfor individualswith disabilities;a varietyof youth
programsincludingrecreationalactivitiesat youth centers;community-basedrecreationalopportunitiesstructuredto
meettheneedsof the communities
in whichtheyare located;supportforFairfaxCounty'svariousvolunteersports
councilsand leagues;and a varietyof volunteeropportunitiesto supportactivitiesin any of these services.
Fairfax County has also been particularlyactive in developingand operatingan extensivepark system
whichprovidesa wide varietyof recreationalactivitiesand facilities. TheFairfax CountyParkAuthority("FCPA"),
whosemembersare appointedby the Board of Supervisors,operates389 parks encompassing22,546 acres. Since
March 1, 2000,the FCPAhas acquired,with Countysupport,over 4,200 acres of lands for park purposes. Facilities
operated by FCPA include recreational centers with swimming pools, fitness centers, racquetball courts, golf
courses, nature centers, lakefront marinas, miniature golf, amusements such as trains and carousels, tennis and
basketball courts, an ice rink, campgrounds,garden plots, extensive trails, historic properties, picnic shelters,
playgrounds,
openspaceandotheruniquefacilities.Collectively,
theparksystemis usedby 82%of FairfaxCounty
households annually.
The NoahernVirginiaRegionalParkAuthority("NVRPA"),
an independent
entityin whichthe County
participates,
alsooperates19parkscoveringapproximately
10,000acres. NVRPAis continuallyin the processof
completing,acquiring,developingor expandingits regionalpark facilities. In June 2003, the EDA issued revenue
bondsbackedby a contractwith the County,a portion of the proceeds,in the amountof $15,530,000,of whichwere
used to financea new 18-holepublic golf coursein the souther~part of the County.
On November 3, 1998, the County voters approved bond referenda that included $87 million of which $75
million is for FCPA projects including land acquisition,renovation of older parks and constructionof a new
recreationcenter and $12 million is for capital contributionsto the NVRPA. On November5, 2002, the voters
approved
a bondreferendum
of$20million
forparkpurposes
including
landacquisition
andparkimprovements.
The
Board
ofSupervisors
has
authonzed
anadditiooal
575
million
ingeneral
obligation
honda
forpark
pmpoEes Z
including land acquisition, park improvementsand capital contributionsto NVPRA, subject to a favorable
referendum on November 2, 2004.
Community Development
;I
In orderto enhancethe qualityof life andthe communityenvironment,
FairfaxCountyprovidesmany
directandindirectservices.TheCountyaddressesthehousing,revitalization,
employment
andtransportation
needs
of Countyresidents,and strives to provide and maintaina well-balancedenvironment,by adheringto a
comprehensive land use plan.
To meetlowandmoderateincomefamilyhousingneeds,theFairfaxCountyRedevelopment
and Housing
Authority("FCRHA")was establishedin February 1966, having been approved by a voter referendumin 1965.
Further, the County established the Department of Housing and Community Development to serve as the
professional
stafffor theFCRHAandto carryout theCounty'shousingandcommunitydevelopment
programs.In
FY 1985, the FCRHA and the Board of Supervisors entered into a Memorandum of Agreement which set forth the
workingrelationshipbetweenthe two entities. The Memorandum
of Agreementand resolutionsadoptedby the
FCRHA reaffirmed the County Executive as the Executive Director of the FCRHA.
4
F~I~HA~
ownsoradmiflisters
housing
developments
inFairfax
County
withstaff and funding provided
privateThe
from County, Federal, State and
sources. At the beginningof FY 2003the FCRHAwas assisting6,537
householdsin Fairfax CountythroughPublic Housing;the FairfaxCountyRentalPrpgram;Section8 Certificates,
Vouchersand project basedprograms. TheFCRHA
hasalsoprovided
financing
fora numberof privately
owned,
assisted housing developments with a total of 711
assistedunitsas wellas for privatelyowneddevelopments
without subsidies which reserve a total of 821 units for lower income tenants. Since FY 1993, a total of 965
AffordableDwellingUnits("ADUs")
havebeendeveloped
andsoldto moderate
income
homebuyers
through
the
First-Time Homebuyer's Program,
andmorethan335ADUsarein the.development
pipeline.In addition
a totalof
738 rental units for low and moderate income
households
have
been
developed
under
the
Affordable
Dwelling
Unit
Rental Program in private rental communities throughout the County, with another 303 rental ADU's in the
developmentpipeline. Also, in FY 2003, an estimated
$26millionin fundingwasavailablefor the County's
CommunityDevelopmentProgram These funds, derived ~om a varietyof sources,providea widespectrumof
activities designed to meet the needs
public services
oftheCounty's
lowandmoderate
income
population.
Projects
rangefrom
andhomeimprovement
programs
toneighborhood
drainage
androadimprovements.
Other services include efforts to increase local
employmentopportunities
by encouragingand retaining
businessand industrialdevelopment
throughthe County'sEconomicDevelopmentAuthority.
TheDepartment
of
Transportation
continually
monitors
theCounty's
transportation
system
tomaintain
a public
transportation
network
systemthat meetsthe needsof Countycitizens(morefullydiscussed
in the subsection
hereinentitled
'~ransportation'?.
In addition to the provisionof direct services,the Countyis responsiblefor all comprehensive
land use
functions including planning, zoning, economic development,
environmental
improvement,
community
conservation, and the preservation of historic landmarks. The Comprehensive
Plan for the Countyprovidesfor
orderly development through its policies and recommendations
that help to guidedecisionsregardingfuture
development within the County. The Comprehensive
Plan is reviewedperiodicallywith extensivecitizen
involvement to assure that it reflects community goals as
well as cuITent conditions and future trends. Almostall
zoningapplicationsprocessedin the Countyare in accordancewiththe Plan. The Countyhas receivednational
recognition
forthedevelopment
ofsucha thorough
andcoordinated
planning
process.
Integrated with the County's land use plan are programsto identify,documentand protectsignificant
historic, pre-historic and Civil
Warresources
frominappropriate
neighboring
development.
Staffin theDepartment
of Planning and Zoning (DPZ) act as a liaison with the
Architectural
ReviewBoardto monitordevelopment
within
the thirteenhistoricoverlaydistrictswhichwereestablished
andarenowrecognized
throughtheCommonwealth's
Certified
Local
Government
program.
Inaddition,
DPZmaintains
theCounty
Inventory
ofHistoric
Sitesofover
300 sites, buildingsand structuresestablishedthroughthe Fairfax County History Commission. The Cultural
Resource Protection Section of the FCPA identifies
and registerscountyprehistoricand historicalarchaeological
sites,currently
numbering
over2,500,withtheVirginia
Department
ofHistoric
Resources.
Health
and Welfare
The Countyprovidesan extensivearray of services which are designedto protect and promotethe health
and welfareof FairfaxCountycitizensthrougha decentralized
humanservicesprogram.TheCountyoperates
human
service
centers
in locationsconvenient
to residentsto providefinancial,medical,vocational
and social
services.
Based
onindividual
neehs,
thecenters
attempt
todefine
a comprehensive
assistance
planthatutilizes
the
servicesprovidedby all Countydepartments.
TheCountyprovides
medical,
dental,maternal
andchildhealthservices
at threeotherlocations
inaddition
to theservice
centers
andto themedically
indigent
at threeprimary
healthcarecenters.Preventive
andhealth
promotionservicesare providedby the Countytoschool-aged
childrenin all Countypublicschools.Mentalhealth,
mental
retardation,
alcohol
anddrugabuseandearlyintervention
services
areprovided
tofamilies
andindividuals
bytheFairfax-Falls
Church
Community
Services
Board("CSB").
TheCSBoperates
sixcommunity
mental
health
servicecenterswhichofferindividual,groupand community services focused on the mental health needs of the
population,various group homes for consumers,and several specialized treatment facilities. Other programs that
the Countyprovidesincludesubsidizedday care Programsfor seniorcitizensand childrenof low-income
families,
125 school-age child centers
(located
in thepublicschools)thatservemorethan8,500children
duringtheschool
~s~~_I~_~~:`-`~;p-a~·~a~~-----~-r-- ---i-;-~-~~I-~
:·
and more than 2,500 childrenduringthe summer,two specialneedscentersthat serveemotionallydisturbedor
physically
challenged
children,
andgrouphomesfor youthwithseriousemotional
disturbance.
Residential
il
treatment services are also offered in the areas of substance abuse as well as substance abuse outpatient and
specialized
day~eatmeb
programs.
Inaddition,
vocational
andresidential
programs
areprovided
forcitizens
with
mentalretardation.
In November 1988 and in November 1990, voters approved $16.8 million and $9.5 million,
respectively,in general obligationbonds for human services facilities. Facilitiesbuilt with the proceedsof these
bond referenda include a 70-bed therapeutic residence for substance abusers, a 30-bed substance abuse treatment
facility
co-located
witha 25-bed
detoxification
center,
a specialized
16-bed
treatment
facility
forclients
whoare
S
both mentally ill and substance abusers, and an assisted living facility for 36 adults with mentalillness. The Board
of Supervisorshas authorizedan additional$32.5 million in generalobligationbonds for human servicesfacilities
purposes, subject to a favorable referendum on November 2, 2004.
Financialassistanceand social servicesare availableto eligiblecitizensunder programsestablishedby the
State and Federal governments,as well as the County, and will be administeredby the Departmentof Family
Services. The Department will continue to implement welfare reform program activities while emphasizing
preventionand early interventioninitiatives. Programsservingseniorcitizenswithinthe Countyare jointly funded
by the Federal Cider AmericansAct, State, County and public/privatefunds. In FY 1986, the County began to
providea comprehensiveCountytransportationservice,FASTRAN,for qualifiedelderly,disabled,and low-income
persons. Transportation is provided by bus, van, or cab on a door-to-door basis to County programs, medical we,
and grocery and other personal shopping destinations (more fully discussed in the subsection herein entitled
''Iiansportation").
Judicial
Administration
Fairfax County's court system is one of the most sophisticated systems in Virginia in its use of advanced
case managementtechniquesand rehabilitationprograms. The Countyutilizes automatedsystemsto supportcase
docketingand recordretrieval,electronicfiling and imagingin the land recordationprocess,juror selection,service
of noticesand subpoenas,and the processingof criminaland trafficwarrantsand delinquenttax retrieval.
The County has undertaken rehabilitation efforts through the Juvenile and Domestic Relations District
Court and the Office of the Sheriff. These efforts include work trainingprogramsand counselingservice for both
adults and juvenile offenders. Additionally,residentialtreatmentservicesare providedfor juvenile offendersand a
work release program is provided for offenders confined in the County's Adult Detention Center.
As part of the 1998Public Safetybond referendumvoters approvedthe JudicialCenterExpansionproject
at a cost of $92.5 million including $33 million from anticipated State reimbursement associated with the Adult
DetentionCenterexpansion. The projectinvolvesthe additionof approximately312,000squarefeet to the existing
JenningsJudicialCenterand providesparkingto accommodate2,100 vehicles(a net increaseof 900 spaces). Staff
is currentlycompletingthe design developmentand constructionplan phases of the Judicial Center portion of the
project, with the summer of 2004 projected for the constructioncontract award. The parking s~ucture was
completedin January2003. As part of the 2002 Public Safety Bond Referendum,the voters approved$25 million
for the renovationof the older portionsof the JudicialCenter,originallybuilt in 1981.
Public Safety
The responsibilityfor public safety in Fairfax County is shared by a number of agencies. The Police
Department,whichis responsiblefor law enforcement,had an authorizedstrengthof 1,369swornpoliceofficersand
574 civilianpersonnelas of July 1, 2003. The agencyis accreditedby the VirginiaLaw EnforcementProfessional
StandardsCommission('lrLEPSC"). VLEPSC accreditationsignifiesthe department's compliancewith certain
standardswhichare specificto Virginialaw enforcementoperationsand administration.Thecommanders
of the
eight police district stations located throughoutthe County have considerablelatitude to tailor their operationsto
providepoliceservicesin ways mostresponsiveto the needs of their respectivecommunities,to includecommunity
policing endeavors. The departmentoperatesa variety of specializedunits, includinga helicopterdivisionwhich
operatestwo helicoptersto provide supportto generalpolice operations,traffic monitoringand emergencymedical
evacuationand rescue support. For the past 10 years, the County has maintainedone of the lowestrates of serious
crimes among jurisdictions in the WashingtonMetropolitanarea and among comparablesuburbanjurisdictions
·:
violent
the country.At the sametime,the PoliceDepartment
hascontinually
attaineda clearance
ratefor
crimes
such
as
murder,rape and robberyfar abovethe nationalaveragesfor such offenses. Citizen
participation in crime prevention is emphasized, with nearly 700 Neighborhood Watch groups involving
approximately
20,000volunteersthroughout
theCounty.
DuringEY 2002,the PoliceDepartment
createda CriminalIntelligence
Unitto providean effective
response
toorganized
criminal
activity
including
terrorist-related,
gangandbiascrimes.TheUnitisresponsible
for
dataentry,reviewandclassification
of information,
analysis,
linkdevelopment~
prioritization,
dissemination,
follow-up
investigations,
interviews,
maintaining
contactswithoutsideintelligence
groupsand conducting
surveillance
operations.
AnAuxiiiary
PoliceUnit,comprised
of up to 100trained,
unpaidcitizenvolunteers,
supplements
the PoliceDepartment's
paidpersonnel
by performing
a varietyof operational
andadministrative
functions.TheVolunteers
in PoliceService(VIPS)Program
hasalsobeenestablished
to provideadministrative
augmentation
to the PoliceDepartmentby utilizingthe skills of non-salaried,non-uniformed
volunteers.The
department
utilizes
manyapplications
ofthelatesttechnology
available,
including
serving
as leadagency
forthe
Northern
Virginia
Regional
Identification
System,
a computerized
fingerprint
comparison
systemwhichgreatly
enhances
andexpedites
theabilitiesof the 10participating
agencies
to identifylatentfingerprints
recovered
~om
crimescenes
withthoseofI~nown
offenders
inthedatabase.
TheCounty's
lawenforcement
training
needsaremet
byitsownCriminal
Justice
Academy
which
trainsnewofficers
andprovides
in-service
training
tomembers
ofthe
participating
agencies.
Thisfacility
includes
a drivertraining
trackandfirearms
training
range.Aneighthpolice
district
station
located
inthewestern
partoftheCounty
opened
onMay3,2003.Newfacilities
underdesign
include
replacement
PublicSafetyCommunications
andEmergency
Operations
Centers,
anda forensics
facility.Forthe
pasttenyears,FairfaxCountyhasmaintained
oneof thelowestpercapitacostforpoliceservicesof all thelocal
jurisdictionsin the Washingtonmetropolitanarea
Fireandrescueservices
areprovided
byapproximately
1,200paidfirefighters,
100paidcivilian
support
personnel
andapproximately
400operational
volunteers.
Thirty-five
fireandrescue
stations
arecurrently
operated
by the County.
Future station locations have been
identifiedto achieve a five-minuteresponsetime for fire and
basiclifesupport
anda six-minute
response
timeforadvanced
lifesupport.Thedepartment
operates
various
specialty
units,including
paramedic
enginecompanies,
a hazardous
materials
responseunit,a technical
rescue
operationsteam,an arsoncanineunitand a waterrescueteamwhosemembersare certifiedin swiftwaterrescue.
Thedepartment
alsosupports
regional,
nationaland international
emergency
responseoperations
through
maintaining and supporting the Urban Search and
RescueTeam('LUS&R").
UShR operatesunderthe auspicesof
theDepartment
ofHomeland
Security
fordomestic
responses
andis sponsored
bytheUnited
StatesAgency
for
International
Development/Office
of ForeignDisasterAssistance
for international
deployments.
In additionto
emergency
response,
thedepartment
provides
variousnon-emergency
services.FirePrevention
Division
personnel
testfireprotectionsystemsinpublicbuildings,inspectbusinessesfor firecodeviolationsanddeterminethe cause
andoriginofallfires,falsealarms
andbombings.
Thedepartment
receives
directtechnical
support
intheareasof
logistics,
procurement,
apparatus,
telecommunications
andinformation
technology
~omthe Support
Services
Division.
TheFiscalServices
Division
is responsible
formanagement
ofthedepartment's
finances
andbudget.
Personnel in the Safety and Personnel ServicesDivision
provide health and safety services to all County uniform
publicsafetypersonnel,
fireandrescuevolunteers
andapplicants,
inorder·
to maintain
a safeandhealthy
work
environment.
In addition,
theSafetyandPersonnel
Services
Division
is responsible
forrecruiting
andtesting
firefighterapplicantsand all personneland payroll functions. The HazardousMaterialsServicesSection
investigates hazardous materials releases, enforces local
andstatehazardousmaterialslaws, providesoversightfor
long-term
cleanup
sitesandsupports
otherCounty
agencies
andcommittees.
TheFireandRescue
Department
provides
morethan300,000
hoursoffirefighter
andemergency
medical
training
tocareerandvolunteer
firefighters
throughout
theyearusingindoor
andoutdoor
facilities.
Community
firesafety
andinjury
prevention
programs
area
majorfocusof thedepartment.
Education
programs
aredelivered
to audiences
rangingfrompre-school
children
to
senior
adults.
TheCountyalsooperatesa Computer
AidedDispatch
System,whichprovides
a computer
linkbetween
call takersand dispatchers
withinthe County'sPublicSafetyCommunications
Center(PSCC).Throughan
additional
computer
link,information
istransmitted
~omdispatchers
tomobile
dataterminals
withintheCounty's
police,fireandambulance
vehicles.TheCountyalsoutilizesautomated
systemsto processcourtorderedchild
supportand restitutionpaymentsand to supportjuvenilecase processinginformationfunctions.In addition,the
Countyalsohasan automateddoglicensingandinoculation
monitoring
system.
November
3, 1998,theCountyvotersapproved
bondreferenda
forpublicsafetyprojectsthatincluded
$7.42millionforexpansionof twoexistingPoliceStations,reconstruction
of a FireStation,construction
of onenew
Police Station and one new Fire Station.
OnNovember
5, 2002the votersauthorized
an additional
$60millionin generalobligation
bondsfor
PublicSafety
purposes.
Thisreferendum
included
approximately
$29million
fora replacement
PSCCIEmergency
Operations
Center,
$25millionfor
renovations
to theJennings
Judicial
Centerand$6millionforpriority
Fire
Station
renovations
andimprovements
toinclude
constructing
anappropriately·
located
hazardous
materials
response
team facility.
Water Supply Service
Waterserviceis provided
to theresidents
of FairfaxCountyeitherbyFairfaxWater,theCityof Fairfax,
theCityof FallsChurch,theTownof Herndon,
the Townof Viennaor individual
wells.FairfaxWater,which
operates
thelargest
watersystem
intheCommonwealth
ofVirginia,
wasestablished
bytheBoardofSupervisors
in
1957,underthe VirginiaWaterandWasteAuthorities
Act(Chapter51, Title15.2,Codeof Virginia,1950,as
amended),for the purposeof developinga comprehensive,
countywide
water
supply
system
through
theacquisition
ofexisting
systems
andtheconstruction
ofnewfacilities.
It is anindependent
bodyadministered
bya ten-member
boardappointedby
theFairfax
County
Boardof Supervisors.
Fairfax
Waterfinances
its capitalimprovements
through
theissuance
ofrevenue
bondswhich
arenotbacked
bythefullfaithandcreditoftheCounty
butprincipally
byrevenues
derived
~omcharges
forservices
rendered.
Fairfax
Water's
basicretailwatercharge
is$1.40per1,000
gallons,
plusa quarterly
service
charge
($5.50
formostsinglefamily
homes
andtownhouses).
Topayfortreatment
andpumping
capacity
whichis usedonlyduringperiods
of highdemand,
Fairfax
Wateralsoleviesa peakuse
charge
ofanadditional
$2.60per1,000
gallons
oncustomers
whoexceed
theirwinter
quarter
consumption
by6,000
J
gallonsor 30 percent,whicheveris greater. There also are fees for initial connection to the system and for opening,
closing or transferring an account.
FairfaxWaterutilizestwosourcesof watersupply(09990949
RiverandPotomac
River),operates
associated
treatment,
transmission,
storage
anddis~ibution
facilities
andcurrently
provides
service
toapproximately
227,000meteredaccounts(representing
about293,000residential,
commercial,
industrial,
municipal
and
institutional
units)in FairfaxCounty
withan average
dailyconsumption
of about75 milliongallonsperday
C'mgd").
Inaddition,
Fairfax
Watersupplies
about50mgdtoothersuppliers
forresaleprincipally
intheCityof
Alexandria,
Loudoun
County
andPrinceWilliam
County.Theaverage
population
servedbyFairfaxWaterin 2003
isestimated
tohavebeen1,200,000
persons.
Thecombined
maximum
dailycapacity
ofthesupplyandtreatment
facilities is 262 mgd, which is sufficient to meet current demand.
Underan agreement
withtheBoardof Supervisors,
FairfaxWaterannually
submits
a ten-year
capital
improvement
program
whichis reviewed
andapproved
by the Boardas partof the County'stotalcapital
improvement
$552,582,000.
program.FairfaxWater's200410-yearCapitalImprovement
Programincludesprojectstotaling
ECONOMIC
FACTORS
Economic Development
Economic
development
activitiesof the Countyare carriedout throughthe FairfaxCountyEconomic
Development
Authority
(the"EDA")whosecommissioners
areappointed
bytheBoardof Supervisors.
TheEDA
promotes
FairfaxCountyas a premierlocationfor business
start-up,
relocation
andexpansion
and capital
investment.
It workswithnewandexistingbusinesses
to helpidentifytheirfacilityandsiteneedsandassistin
resolving
County-related
issues.Pursuant
toitsenabling
legislation,
theEDAencourages
investment
intheCounty
with tax-exemptindustrialrevenuebond financing.
i;
totalinventoryof officespacein the Countywasestimatedat 101.5millionsquarefeetat yearend
2003. Over 10.5 millionsquarefeet of office space was leased in FairfaxCountyas of year end 2003.
IndustriaVhybrid
spacein the countywasestimatedat 36.7 millionsquarefeet. The directvacancyratesfor the
officemarketand industrial/hybrid
marketswere 11.2percentand 7.9 percent,respectively,
as of yearend 2003.
FairfaxCountyis thefifteenthlargestofficemarketin theUnitedStates,accordingto CostarGroup.
The base of technology-oriented
companies,particularlyin computersoftwaredevelopment,computer
systemsintegration,telecommunications
and Internet-related
services,has servedas a strongmagnetfor the
expansionand attractionof businessand professionalservices. Diversifiedbusinessand financialservices,as well
as government
contractors,
haveaddedto thedemandforprimeofficespacein a numberof keyemployment
centers
throughoutthe County. Majorcorporationssuchas AmericanManagementSystems,BearingPoint,
Boot Alien
Hamilton,CapitalOne,FederalHomeLoanMortgageCorporation(FreddieMac),Gannett(USAToday),General
Dynamics,Mitre, MantechInternationaland the SLM Corporation(SallieMae) have locatedtheir corporate
headquarters in Fairfax County.
As of year end 2003, there were 80 hotels each with 75 or more rooms completedor under constructionin
theCounty,totalingmorethan 14,640hotelrooms. Hoteldevelopment
parallelscommercial
construction
in terms
of diversityof conceptanddesignwitha varietyof productandservicemixestall-suites,businessmeetingfacilities
and leisure facilities) in the marketplace. National chains such as AmeriSuites,Best Western, Comfort Inn,
Doubletree,EmbassySuites,HamptonInn, Hilton,HolidayInn, Hyatt,Marriott,Motel 6, Ritz-Carltonand Sheraton
currentlyoffer a widerangeof hotel facilitiesin the County.
The 16-mileDullesTollRoadprovidesaccessfromWashington,
D.C.throughTysonsCornerandRestonHerndon(thelargestbusinesscentersin the County)to Washington
DullesInternational
Airport('Dulles"),on the
County'swesternedge. Pursuantto legislationenactedby the VirginiaGeneralAssemblyat its 1995session,the
Commonwealth
sold$45.2millionin bondsfor the construction
of two additionallanes(fora totalof eightlanes)
for the DullesToll RoadbetweenInterstate495 in FairfaxCountyand Route28 (SullyRoad)in Fairfaxand
LoudounCounties. Additionally,a 1Cmileextensionof the DullesToll Road,the privately-financed
Dulles
Greenway,
connectstheairportwithLeesburg,westofFairfaxCountyin LoudounCounty.
DupesAirporthasexperienced
a significantincreasein servicelevelsanddemandin recentyears,serving
as a catalystfor corporateactivitiesdependenton immediate
accessto airtravel. Oneof thefastest-growing
airports
of the world's50 largestairports,DullesAirportservesnearly47,000passengersdailywithnonstopflightsto 71
U.S.citiesand directserviceto 37 foreignmarkets.On the eastcoast,the airportis the fifthlargestinternational
gateway. More than seventeenmillionpassengers,includingmore than 4 millioninternationaltravelers,flew in and
out of DuilesAirportin 2002. A multi-billion
dollarconstruction
programbeganin 2000,whichis addingtwo
parkinggarages,a fourthrunway,a newconcourse,pedestrianwalkwaysandan airporttrainsystem.
In December2003, the SmithsonianInstitute opened the new National Air and Space Museum (NASM)
DullesCenterfor thedisplayandcollectionof rareandhistoricaviationandspaceartifacts.TheStevenF. UdvarHazyCenter,a 761,000squarefootbuildinglocatedon 177acresat DullesAirport,willbe hometo morethan200
aircraftand 135spacecraftincludingthe spaceshuttleEnterpriseand the B-29 Superfortress
"EnolaGay". The
museum
welcomed
its millionth
visitor in June 2004.
The Boardof Supervisorsand the Countyhave supportedthe revitalizationand redevelopment
of the
County's more mature business areas. Residentialand commercialenhancementsto Annandale,Bailey
Crossroads/SevenCorners,the Lake Anne sectionof Reston,the Springfieldand McLeancentralbusinessdistricts,
Merrifieldand the RichmondHighwaycorridorin the southeasternportionof the Countyare underway,and a
numberof capitalimprovement
projectsin processor alreadycompletedhaveimprovedtheappearanceandquality
of life of these
communities.
Employment
Approximately
29,500payrollbusinesses,
includingcorporateandregionalheadquarters,
technology
firms,
sales and marketing offices, and business services are located in Fairfax County. Local businesses create
employmentin such diversifiedareas as computersoftwaredevelopmentand systemsintegration,government
h~2~a~,~-:l-~--.~~:~-----
------------------I----
;-TI-. -
ii-~.-i--C"--~'T~"-;"?-----~·
-j
Internet-relatedservices,wholesaleand retail trade, and financialservices. The followingtable presents
data on the numberof payrollestablishmentsand employmentby majorindustryclassificationin Fairfax Countyas
of fourth quarter 2003.
Businesses and Employment by Industry
Fairfax County, Virginia'
Industrial Classification
Number of
Average Payroll
Establishments
Employment for Ouarter
Agriculture
14
118
2
92
477
19
1,518
11,794
1,541
15,831
Construction
2,495
31,510
Transportation
Retail Trade
367
2,774
7,057
57,200
17,950
281,442
1,517
1,242
945
215
23,976
9,749
34,954
68,907
1
O
Mining
Manufacturing
Utilities
Wholesale Trade
·
Services2
Finance and Insurance
Real Estate
Information
LocaVState/Federal Government
Unclassified
Total
29.536
544.171
B
O
Source: VirginiaEmploymentCommission(VEC),CoveredEm~lovmentand Wagesin Virginia.FairfaxCounty.fourthquarter
2003.
1
Encludes selfemployed business owners.
2
The Servicescategoryincludesprofessionaland technicalservices,health care, managementservices,accommodationand food services,
and other activities, as well as membership organizations and trade associations.
:j
24
following
is a listofthe25largest
private,
basesector(non-retail)
employers
inFairfax
County
asof
Januarv 1, 2004.
Camp~n~Name
InovaHealthSystem
Northrop
Grumman
TypoTBusinea.
C~~nty~oymmt
HealthServices
Professional,
Scientific
and
Technical
BootAlienHamilton,
Inc.
Services
Professional,
Scientific
and
Technical
FederalHomeLoanMortgage
Corporation
~reddie Mac)
Computer
Sciences
Corporation
(CSC)
6,000-7,000
Services
Science
Applications
International
Corp.(SAIC) Professional,
Scientific
and
Technical
9,000-10,000
6,000-7,000
6,000-7,000
Services
Finance
andInsurance
3,000-4,000
Professional,
Scientific
and
3,000-4,000
Technical
Services
NavyFederal
CreditUnion
Lockheed
MartinCorporation
Finance
andInsurance
Professional,
Scientific
and
General
Dynamics
Professional,
Scientific
and
Technical
Technical
Services
2,000-3,000
Services
American
Management
Systems,
Inc.(AMS)
Raytheon
Company
Information/Software
Professional,
Scientific
and
NextelCommunications,
Inc.
Information/
Technical
3,000-4,000
2,000-3,000
2,000-3,000
2,000-3,000
Services
2,000-3,000
Telecommunications
FxxonMobil
Corporation
Wholesale
Trade(Petroleum
2,000-3,000
Products)
IBM
Professional,
Scientific
and
Technical
Verizon
2,000-3,000
Services
Information/
2,000-3,000
Telecommunications
MitreCorporation
Professional,
Scientific
and
Technical
Accenture
Professional,
Scientific
and
Technical
Electronic
DataSystems
Corporation
(EDS)
2,000-3,000
Services
2,000-3,000
Services
Information/
2,000-3,000
Data Processing
Gannett
Company
Information/
BranchBanking
andTrust(BB&T)
Sprint
Newspaper Publishing
Finance
andInsurance
Information/
2,000-3,000
1,000-2,000
1,000-2,000
Telecommunications
Titan
·
Professional,
Scientific
and
Technical
AT&T
1,000-2,000
Services
Information/
1,000-2,000
Telecommunications
BearingPoint
Professional,
Scientificand
Technical
IPTIndustries
Professional,
Scientific
and
Technical
1,000-2,000
Services
1,000-2,000
Services
Source:Fairfax
County
Economic
Development
Authority
andtheVirginia
Employment
Commission.
*Note:Employment
estimates
forseparate
facilities
ofthesamefirmhavebeencombined.
Employment
rangesaregivento
ensureconfidentiality
andarebasedonquarterly
employer
reportstotheVirginia
Employment
Commission.
TypeofBusiness
is
basedon 2-digitNorthAmericanIndustryClassificationSystem(NAICS)codes.
25
~--2--;:---·-q u---------~--l-;;·;:;-;
----*-·-·~. ;~~:~;:
;..--;-.-.;"-.-I--~
;;--;;;;;-:--:---;-in.*n;~i-~·-·:
~
in the Countyhas historically been, and continues to be, well below national averages. The
2003averageunemployment
rate was2.5%in the County.Stateandnational2003unemployment
rateswere4.1%
and 6.0%,respectively.The followingtable showsthe averageannualunemployment
rate in FairfaxCountyas
comparedwith the state and nationalaveragein the past decade:
Average Annual Unemployment
Calendar
Rates
Fairfax
State
of
United
Connty
Virginia
states
1994
1995
1996
1997
1998
3.1%
2.8
2.8
2.3
1.6
4.9%
4.5
4.4
4.0
4.9
6.1%
5.6
5.4
4.9
4.5
1999
2000
2001
2002
2003
1.6
1.2
2.3
3.0
2.5
2.8
2.2
3.5
4.3
4.1
4.2
4.0
4.8
6.2
6.0
Year
Source: Virginia Employment Commission.
Accordingto the VirginiaEmploymentCommission,the numberof jobs in the Countyaveraged524,232as
of March 2003. The number of jobs does not include self-employed persons, agricultural employment or non-
8
classified/otheremployment.The followingtable presentstotal nonagriculturalpayrollemploymentin recent years:
Nonagricultural
As of March
Nonagricultural
Employment in
Fairfax County
% Change
1994
1995
392,048
410,146
1996
1997
1998
Employment
As of March
Nonagricultural
Employment in
Fairfax Co~f~L
% Change
4.8
4.6
1999
2000
487,113
518,821
4.8
6.5
420,929
2.6
2001
541,132
4.5
443,734
464,945
5.4
4.8
2002
2003
524,298
524,232
(3.1)
0.0
Source: Virginia Employment Commission.
Population
Fairfax County's populationin 2004 is approximately1,027,500. In 1980,Fairfax County was the third
most populousjurisdiction in the Washington,D.C. primary metropolitanstatisticalarea, as defined by the U.S.
Bureauof the Census. By 1990,FairfaxCounty,with 818584 residents,had becomethe most populousjurisdiction
in the Washington,D.C. area, addingan averageof 22,000personsper year in the 1980s. Populationgrowthduring
the 1990s and to date has slowed somewhat in Fairfax County; on average, about 15,000 persons per year were
addedto thepopulationduringthisperiod.
j
i
~%R~'
26
County Population
Calendar Year
Population
1940 1950
1960
1970
1980
1990
2000
40,929
98,557
248,897
454,275
596,901
818,584
969,749
2001
2002
2003
2004
984,366
1,004,435
1,012,100
1,027,500
Source:U.S.Bureauof theCensus(1940-1990,
2000)andtheFairfaxCountyDepartment
of SystemsManagement
forHuman
Services.
The followingtable reflectsthe populationage distributionof Countyresidents:
Household Population Age Distribution, 2002
Fairfax County
2002
AgeGroup
Number
Percent(%)
Under20 years..................................................~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
276,856
27.9
20-34......................................................~~~~~~~:~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
186,769
18.8
35-54.....................................................~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
342,818
34.6
55-64......................i·····:----··--···--·-····--··-··-·-·-····-··-·--.--...........................................
102,935
10.4
65andOver ...........................................................~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
81.452
8.2
Total.........................................:........~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
990,830
100
Source:U.S.Bureau
oftheCensus,
2002American
Community
Survey.Household
population
excludes
persons
livingingroup
quarters facilities such as nursing homes, barracks, dormitories and correctional facilities.
27
on results of the 1990 Census, Fairfax County had the highest annual median household income
($59,284) of all the 3,141 counties in the United States. As of 2000, nearly 16 percent of County households had
annual family incomes of $154000 or more. In 2002, the Bureau of the Census estimated median household income
in Fairfax County at $85,310. The following table illustrates the 2002 household and family income distribution in
the County.
Annual Household
and Family Income Diftribution
Fairfax County, 2002
Income Level
Household
Under $25,000
$25,000-49,999
$50,000-74,999
$75,000-99,999
$100,000-149,999
$150,000 or more
Median
Note:
(by Percentage)
Famil~
7.6%
16.2
18.1
16.6
23.5
18.0
Income
5.1%
14.3
16.1
16.8
24.9
22.8
$85,310
$95,612
In 2002, the U.S. Bureau of the Census estimated that there were 363,100 households and 258,059 families in Fairfax
County. '%gmilies" are defined as those households containing two or more persons related by blood, marriage or
Source:
adoption.
U.S. Bureau of the Census, 2002 American Community Survey.
The followingtable showsthat total taxableretail sales in the Countyrose in the period 1994-2003,
reflecting increased income levels and the County's increasing importance as a regional commercial and retail
center. Declining taxable retail sales in 2001 and 2002 reflected the general economic downturn.
Per Capita Taxable Sales
Taxable
Sales tin Billions)
Population
1994
1995
1996
1997
1998
7.96
8.31
8.50
9.04
9.65
863,134
879,401
899,650
912,126
931,452
1999
2000
2001
2002
2003
10.62
11.32
11.01
11.13
11.68
946,371
969,749
984,366
1,004,435
1,012,100
Calendar
Sources:
Year
Per Capita
Taxable Sales
$ 9,221
9,453
9,448
9,910
10,357
Virginia Deparhnent of Taxation, Taxable Sales Based on Retail Sales Tax Revenues.
Fai~IfaxCounty Department of Systems Management for Human Services, and U.S. Bureau of the Census.
28
11,219
11,676
11,185
11,081
11,540
Activity
The following table illustrates trends in residential and commercial construction activity in the County:
ConstructionActivityBuildingPermits'
Estimated
Housing
Industrial
ResidentialProperties
Fiscal
Units
CommercialProperties
Estimated
Year
and
Startedz
Estimated
Number
Value (000's)
Number
Value (000's)
Number
1994 ..............................
1995 ........;.....................
1996 ..............................
1997 ..............................
1998 ..............................
23,254
23,577
23,086
21,059
21,700
$781,283
706,680
737,971
676,400
702,179
3,803
4,272
3,961
4,091
4,172
$288,274
236,737
230,300
247,646
699,012
6,528
4,482
4,361
3,942
2,263
1999
2000
2001
2002
23,446
30,178
23,154
20,863
794,121
995,247
806,139
771,174
4,345
4,735
4,455
3,624
572,489
719,885
671,805
459,000
4,687
4,067
3,802
3,735
19,095
820,046
3,561
306,909
2,577
..............................
..............................
..............................
..............................
2003 ..............................
Sources: ' FairfaxCountyDepartmentof PublicWorksand EnvironmentalServices.
2 FairfaxCountyDepartmentof SystemsManagementfor HumanServices.
Thefollowing
is a shortlistofmajorneworexpanded
officeprojectswithintheCounty
in2003:
New or Expanded
Name of Company
Commercial
Projects
Nature of Operations
Projected New/Additional
Employment
Dynamics Research Corporation
Mitre Corporation
Northrop Grumman
Information Technology
Information Technology
Information Technology
150
240
348
Proxtronics
UNISYS
Veridian
Information Technology
Information Technology
Information Technology
175
350
450
Telecommunications
450
Telecommunications
180
Telecommunications
150
AT&T
Government
Covad
Communications
Solutions
Equant
Online
Source:
Resources
FairfaxCountycconomc
Internet
Services
55
DevelopmentAuthority.
P
29
. -.-----~~~C---~]
Single-family
detachedhousingunits(excluding
mobilehomes)continue
to accountfora majority
of the
housingunitswithinFairfaxCdunty,representing
50.6%of thetotalin 2000.Townhouses
accounted
for24.3%;
gardenunits,high-andmid-riseunits,multiplexunitsandmobilehomestogether
madeuptheremaining
25.1%.As
OfJanuary2000, the medianmarket value of all
~s~~
ownedhousingunits,including
condominiums,
in FairfaxCounty
fheDepartment
of Systems
Management
forHuman
Services
to be 8226,825,
an increase
of
Housing Units by ~pe of Structure
1980
No.
_%
1990
No,
2000
%
No.
2002
%
No.
%
Sin~l~i~ly: 125,580
59.3 163,M953.9 181,591
50.6 184,156
49.7
Attached
34833 14.6 67,306 22.3
Multi-Family
Total
~Z~
87,171 24.3 90P65
24.4
26.1 72,129 23.8 90,19825.1 95.930 25.9
14an 02.444Urag 358.960
LQZLQ
370.551dMLn
Source: U.S. Bureauof the Census,U.S.Census
mobile homes, single-family attached
and elevator apartments.
ofHousing.
Single-family
detached
includes
allsingle-family
homesand
includesduplexes,
townhouses
andmultiplex
units.Multi-family
includes
garden,
mid-rise
Colleges and Universities
Seven institutionsof higher educationare located in FairfaxCounty:Averett
University,
GeorgeMason
University,
theRelierGraduate
Schoolof Management,
National-Louos
University,
Northern
Virginia
Community
College(NVCC),the VirginiaPolytechnic
Institute
andStateUniversity
andtheUniversity
ofVirginia
- thelatter
two locatedin the NorthernVirginiaGraduateCenter. For 2001-02GeorgeMasonhad an enrollmentof more than
23,400
students
in morethan100disciplines,
including
doctoralprograms.
TheNorthern
VirginiaCommunity
College has more than 60,000 students in
30credit-earning
programsand300,000studentsin non-creditcoursesand
public serviceactivitiesin five campusesin Northern
Virginia.American
University,
GeorgeWashington
University,CatholicUniversityand Virginia
Commonwealth
University
alsooperate
programs
in theCounty's
secondary
schools
andonmilitary
installations
within
theCounty.
Cultural
Amenities
Wolf Trap Farm Park for the
Performing
Arts,a culturalfacilityinternationally
renowned
forthenumber
and qualityof its ballet, symphony,concert,
andoperaofferings,
andtheonlynational
parkfortheperforming
arts
part
of
Fairfax
County.
The
County
also
assists
in
supporting
the
Fairfax
Symphony,an internationally
recognized94-member
orchestra
thatprovides
a variety
of musical
programs
and
outreachservicesto Countyresidents.
in the U.S., is located in the northern
Otherwell-known
attractions
intheCountyinclude
MountVernon,
thehome
of GeorgeWashington;
Woodlawn
Plantation,George
Washington's
wedding
gifttohisnephew;
andGunston
Hall,
home of George Mason, author of the U.S.
BillofRightsandthefrrstConstitution
ofVirginia.
30
nEBTaoMwrsTRanoN
Statement
of Bonded
Indebtedness
Pursuant to the Constitution of Virginia and the Act, a county in Virginia is authorized to issue general
obligation bonds secured by a pledge of its full faith and credit. For the payment of such bonds, the Board of
Supervisors of the County is required to levy, if necessary, an annual ad valorem tax on all property in the County
subject to local taxation.
The County had outstanding the following amounts of general obligation bonds as of June 30, 2004:
Purpose
Total General
Obligation Bonds
$ 994,890,208
School ........................................................................................................................
General Government..................................................................................................
Total General Obligation Bonded Indebtedness ......................................................
623.884.792
~hlS~ZZS~M~n
The County does not rely upon short-term borrowings to fund operating requirements.
Anthorized
but
Unissued
Bonds
The following chart presents by purpose Fairfax County's general obligation authorized but unissued bond
indebtedness
as of June 30, 2004:
Amount
D
Authorized Purpose
School Improvements ....................................................................................................
Transportation Improvements and Facilities.....,............................................................
Parks and Park Facilities .......................... .........,,.
..... .........,,,
...... .................... ...
Commercial and Redevelopment Area Improvements ..................................................
Human Services Facilities .............................................................................................
Adult Detention Facilities ..............................................................................................
Public Safety Facilities ..................................................................................................
Total Authorized but Unissued Bonds........... ..................... ........., .........,..... ...........,.
Limits
Authorized
but Unissued
$552,145,000
35,640,000
13,920,000
13,130,000
1,185,000
5,750,000
100.450.000
~22~224~MM
on Indebtedness
There is no legal limit on the amount of general obligation bonded indebtedness which Fairfax County can
at any time incur or have outstanding. However, all such indebtedness must be approved by voter referendum prior
to issuance. Since 1975, the Board of Supervisors has established as a financial guideline a self-imposed limit on
the average annual amount of bond sales. In April 2002, the Board of Supervisors increased the bond sale target to
$1.0 billion over a 5-year period or an average of $200 million annually, with the flexibility to expand to a
maximum of $225 million based on market conditions and/or priority needs in any given year. The actual amount of
bond -saIeswill be determined by construction funding requirements and municipal bond market conditions.
The Board of Supervisors also has imposed limits which provide that the County's long term debt should
not exceed 3% of the total market value of taxable real and personal property in the County. The limits also provide
that annual debt service should not exceed 10% of annual General Fund disbursements. These limits may be
changed by the Board of Supervisors, and they are not binding on future Boards of Supervisors of the County.
Other Tax Supported
Debt Obligations
The Board of Supervisors of the County directly or indirectly appoints all or a portion of the governing
body of several legally independent
local and regional authorities
that provide services to the County and its
constituents. Such authorities include those that issue revenue bonds that are not general obligation bonds of the
~~T'~--~-~~~
.~..~.-~-.:i·-~-i~-?--4-i-~-~----~·~i·--
--~--~~-----------------~-~'~
~ ·
andissuedebtsupported
directlyorcontingently
by appropriations
of taxrevenues
bytheCounty.Thefull
faith and credit of the County is not pledged to secure such bonds.
In March1994,theFairfaxCountyEconomicDevelopment
Authority(the
"EDA")issued$116,965,000
of
leaserevenue
bondsto financetheacquisition
fortheCountyoftwoofficebuildings
occupied
byCountyagencies
anddepartments.TheCountyis absolutelyandunconditionally
obligatedby thetermsof a leaseagreementwiththe
EDAto payamounts
equaltodebtserviceontheEDA'sbonds.TheCounty's
obligation
to makesuchpayments
is
subjectto the annualappropriation
by the Boardof Supervisors
of sufficientfundsfor suchpurpose. The
coincidental
termsof the bondsandthe leaseagreementextendto November15,2018. In October2003,theEDA
issued $85,650,000of lease revenuerefundingbonds, to refund $88,405,000of the 1994lease revenuebonds. The
County's obligationsremainthe same for the refundingbonds.
Beginningin 1996,the FairfaxCountyRedevelopment
and HousingAuthority("FCRHA")has issued
$26,290,000
of leaserevenuebondsin fourseriesto financetheconstruction/renovation
of fourcommunity
center
buildings,
oneadultdayhealthcarecenterandoneHeadStartfacility.TheCounty
is obligated
bythetermsoflease
agreements
withtheFCRHA
topayamounts
equaltodebtserviceontheFCRHA's
bonds.TheCounty's
obligation
tomakesuchpayments
is subjectto theannualappropriation
bytheBoardofSupervisors
offundsforsuchpurpose.
The coincidental terms of the various bonds and the lease agreements extend to May 1, 2029.
On November 18,
2002 the Boardof Supervisorsapproveda plan of financefor the renovationand expansionof the JamesLee
Community
Center.OnAugust26,2004FCRHAissued$10,870,000
millionof its leaserevenuebondspayable
~oma leaseobligation
withtheCountyundertermssimilartopreviously
mentioned
undertakings
forsuchpurpose.
InJuly2000,theFairfaxCountyBoardof Supervisors
enteredintoa MasterDevelopment
Agreement
with
a privatedeveloper
to financeandconstruct
a 135,000
squarefootgovernment
centerin thesoutheastern
regionof
theCounty.In November2000,$29,000,000
of Certificates
of Participation
("Certificates"
or "COPs'3wereissued,
secured
bya triplenetleaseontheproperty
between
theCountyandthedeveloper.
TheCountyis obligated
bythe
terms of the lease agreementto pay an amountequal to the debt serviceon the Certificates. The County accepted
thegovernment
centeras substantially
complete
in February
2002.TheCounty'sobligation
to makesuchpayments
is subjectto annualappropriation
by theBoardof Supervisors
of fundsfor suchpurpose.Thecoincidental
termsof
the lease and the Certificates extend to April 2032.
InJune2003,theEDAissued$70,830,000
ofrevenue
bonds(LaurelHillPublicFacilities
Project),
backed
by a contractwiththeCounty.Approximately
$55,300,000
of thebondsareallocable
to thefinancing
of a new
publichighschoolin thesouthern
partof theCountyand$15,530,000
ofthebondsareallocable
to thefinancing
of
a new 18-holepublicgolfcoursein the southernpart of the County.The Countyis obligatedby the termsof a
contract
withtheEDAtopayamounts
equalto debtserviceontheEDA'sbonds.TheCounty's
obligation
to make
suchpaymentsis subjectto the annualappropriation
by the Boardof Supervisorsof sufficientfundsfor such
purpose. The coincidentaltermsof the bondsand the contractextendto June i, 2033.
OnOctober29,2003,theEDAissued$33,375,000
transportation
contractrevenuebondsto provide$30
millionto theC~ forconstruction
of additional
interchanges
onRoute28in theRoute28Highway
Transportation
District,whichis partlyin FairfaxCountyandpartlyin Loudoun
County.TheEDAon August26,2004,issued
$57,410,000transportationcontract revenue bonds to provide an additional $60 million for constructionof the
interchanges.Allof theEDAbondswillbe payable,on a paritywithapproximately
$121million~TBbonds,~om
revenues
derivedfroma surcharge
of $0.20/$100
assessed
fairmarketvalueonthegeneralrealestateproperty
tax
leviedon commercialand industrialpropertieswithinthe District. In the event such revenuesallocatedto the EDA
bondsarenotsufficient
to paydebtserviceanda fundeddebtservicereserveis exhausted,
eachofFairfaxCounty
andLoudoun
Countyis,in effect,obligated,
subjectto annualappropriation
byitsboardofsupervisors,
to makeup
one-half of any deficiencies in a second debt service reserve that secures the bonds.
Lease Commitmentsand Contractual Obligations
The Countyleasescertainreal estate, equipmentand sewerfacilitiesunder variouslong-termlease
agreements. In addition, pursuant to contracts with Arlington County, the AlexandriaSanitationAuthority,the
Districtof Columbia
andtheUpperOccoquan
Sewage
Authority,
theCountyis obligated
to sharethecapitalcosts
associated debt service of certain facilities. Further information concerning these obligations is included in
Notes I and J to the Basic Financial Statements shown in Appendix IV.
Id February and March 1988, the EDA issued $237,180,000 of Series A revenue bonds and $14,900,000 of
Series B revenue bonds, respectively, to finance, on behalf of the Fairfax County Solid Waste Authority ("SWA"),
the construction of a 3,000 ton per day Energy/Resource Recovery Facility (the "E/RRF') to dispose of solid waste
originating from Fairfax County and the Dis~ict of Columbia. In March 1995, the County sold an option to
purchase refunding bonds to refund and redeem the Series A bonds. The option was sold to a financial institution
for $10.25 million. On November 4, 1998, the option was exercised and the refunding bonds were delivered to the
institution at certain agreed-upon interest rates. The proceeds of the bonds have been used to refund the Series A
bonds. The refunding bonds are secured solely by the revenues of the EIRRF, and neither the County, the EDA nor
the SWA is obligated to pay principal and interest thereon. Fairfax County is obligated under a service contract to
deliver certain minimum annual tonnages of solid waste to the E/RRF and to pay fees for the disposal of such waste
to provide funds sufficient to pay the E/RRF operation and maintenance costs and debt service on the bonds. The
Series B bonds have been retired.
See'%OVERNMENT
SERVICES
- Public Works".
In 1989 and 1990, the EDA issued $26,765,000 of parking revenue bonds to finance construction of
parking structures near the Vienna Metrorail Station and the Huntington Metrorail Station in Fairfax County. The
EDA refunded $21.46 million of these bonds in March 1998 with the proceeds of $12.93 million parking revenue
refunding bonds and other available funds. The remainder of the bonds issued in 1989 and 1990 have matured. The
EDA issued $25.735 million in bonds on November 10, 1999 to finance a second parking structure at the Vienna
Metrorail Station. The parking revenue bonds are payable under leases with the Washington Metropolitan Area
Transit Authority ("WMATA") from revenues to be derived by WMATA ~om parking surcharges at these and
other parking facilities in Fairfax County. In the event such revenues are not sufficient to pay debt service on the
parking revenue bonds and under certain other conditions, the County is, in effect, obligated, subject to annual
appropriation by its Board of Supervisors, to make payments to the EDA sufficient to pay such debt service.
In February
1990, the Northern Virginia Transportation
Commission
issued $79.4 million of bonds to
finance certain costs associated with the establishment of commuter rail services (the Virginia Railway Express) in
the northern area of Virginia surrounding Washington, D.C. Fairfax County has joined with other jurisdictions
through a Master Agreement to bear certain costs associated with operating and insuring the rail service as well as
servicing the debt issued by NVTC. The Master Agreement requires that the County's governmental officers
charged with preparing its annual budget include an amount equal to its share of the costs of the Virginia Railway
Express. Each jurisdiction's share is determined by a formula set out in the Master Agreement. Fairfax County's
share of this cost was $3.0 million
in FY 2004.
An additional
$23 million
in NVTC
commuter
rail revenue
bonds
was issued in early 1997 to purchase 13 new hi-level rail coaches. Debt service on these bonds is being funded
predominantly by State and Federal funds and VRE revenues.
In March 2000, the Fairfax County Park Authority issued a Note in the amount of $12,750,000, stated to
mature on July 31, 2001, to raise funds sufficient to purchase approximately 800 acres of open space in the western
region of the County for use as parks or park facilities. The Note, together with a portion of the accrued interest, has
been renewed annually, most recently on July 31, 2004, and is outstanding in the principal amount of $14,938,364
and, subject to four one-year renewals, is due July 31, 2005. The County is obligated by the terms of a payment
agreement with the FCPA to pay the FCPA amounts equal to the debt service on the renewal Note at its maturity.
The County's obligation to make such payments is subject to the appropriation by the Board of Supervisors of funds
for such purpose. The County intends to pay the FCPA from the proceeds of the sale of other parcels of County land
or other
available
funds.
Debt Service on Tax Supported
Debt Obligations
Total principal and interest payments on the County's outstanding tax supported debt obligations including
general obligation bonds, Literary Fund loans and other tax supported debt obligations are presented in the following
table:
T_-: --`~.-~·~--7i------~*-1-~--.---
~-~---------i---~-l-
Service
Schedule
- TaxSupported
DebtObligations
GeneralObligationBonds'
E~iscal Year
En~g~En~
principal Interest
Other
t
Tax
SnpnortedBebt
Obligations"
rincinal
Interest
Total"
$137,440,000
$74,614,489
%5J82,822$9,824422$227,661,734
'41,790,000
77,658,4045,951,0649,702,878235,102,346
2005
2006
2007
2008
141,755,000
71,396,829 6,255,695 9,425,410 228,832,933
136,500,000
64549,501 9,024,170 9,132,525 219,206,195
2009
131534000 58,111,235 10,315,068
2010
8,767,213
208,723,516
121,505,000 51,810,891
10,643,794 8,354,120
192,313,806
115,615,000
45,888,97910,977,652
7,904,744 180,386,374
107,685,000
40,368,33511,346,6477,438,694 166,838,676
99,850,000
35,311,24111,725,7836,915,445 153,802,469
2011
2012
2013
2014
94,400,00030,538,035 12,124067
6,335,397
143,393,498
5,731,886
130,787,048
2,875,056
90,311501
2015
86,420,000 26,080,660
2016
2017
2018
81.415,999
21,984,12313,009,0945,093,532 121501,748
75560,00017,98757313488,849 4,431,776 111,468,198
69,405,00014,347,87313,448,7733,747,192 100,948,838
2019
62,445,000 11,267,573 13,723,872
2020
54,655,000
8A14,830
5,229,151
2,382,770
46,830,0006,005,631 5,354,618
2,119,771
38,1",000 3970563 5.480,278 1,854261
28.200,0002,245,719 5,626,139 1,574,372
2021
2022
2023
2024
18455,000 1,004,288 2,108,724
2025-2034
Total
12,554~02
9,270,000
196,988
22,445,000
70,681,751
60,310,019
49,401,102
37,646,229
1,289,816
22,857,828
5,721,510
37,633,498
$1,798,825,000
$663,753,756
$206,611,762
$120,618,790
$2,789,809,308
1 Includes
debtservice
ontheUX)4
BBonds.
Does
not
include
bonds
that
will
berefunded
with
the2004
BBonds.
2
3
See'~Other
TaxSupported
DebtObligations".
Totalsmaynotaddduetorounding.
See also the discussion
oftaxes
levied
by
theRoute
28Highway
Transportation
Improvement
Disbict,
locatedpartlyin theCounty,to pay
debtservice
on CTB
and
EDA
bonds
under
"GOVERNMENT
SERVICES
Transportation
- Transportation
Improvement
Districts".
34
)
SewerRevenueBonds
In 1986, the County issued
million
$179
million
sewer
revenue
bonds
pursuant
toa
General
BondResolution
adopted
by$75
theBoard
ofofanauthorized
expendedto financethe expansionof the
Supervisors
(the"General
Bond
Resolution'?.
Theproceeds
were
wastewater
treatment
facilities
at theNoman
M.Cole,Jr.,Pollution
Control
Plant(fonnerly
theLowerPotomac
PoliutionConcrol
Plant)
~om36million
gallons
perdayC'mgd")
to54
expanding
facilities
at
the
District
of
Columbia's
Blue
Plains
Wastewater
Treatment
Plant.Thetreatment
capacity
of theBluePlains
mgdandtheCounty'sshareof thecostof
Plantexpanded
from309mgdto 370mgdandthe
County'sshare
increased
~om16.02
mgdto31.0mgd.In 1993,
thecountyissued$72;1million
sewerrevenue
'efunding
bondsto advance
refunda portion
ofits
sewer
revenue
bonds.InJuly1996,
theCounty
issuedtheremaining
authorized
butunissued
$104 Outsfanding
million
sewer
revenue
bonds
tofinance
additional
expansion
and
improvements
to its NomanM. Cole,Jr.,
Pollution
Control
Plant
The
Board
of
Supervisors
authorized,
and
the
County
called
forredemption
onNovember
15,2003,
allOftheCounty's$55,330,000
1993
sewer
revenue
bonds
Scheduled
tomature
onandafterNovember
15,2004;
therefore,
nodebtremains
outstanding
forthe1986or 1993
bonds.TheCounty
iscurrently
considering
a refunding
ofthe1996
bonds
fordebtservice
savings.
For indebtednessincurredafter
Optionunder the General Bond
adoption
oftheGeneral
Bond
Resolution,
theCounty
hasnotexercised
its
Resolution
toSewer
treat
such
indebtedness
asparity
indebtedness,
payable
onparwith
the
debtserviceon theCounty's
outstanding
Revenue
classifiedunderthe GeneralBondResolution
as
Bonds,and,therefore,suchindebtedness
has been
"subordinate
indebtedness".
Debtobligations
to theUpper
Occoquan
Sewage
Authority
~UOSA'?
andthe2001
and
2002StateRevolving
Fundloansthrough
theVirginia
Resources
Authority,
usedtopartially
finance
theplantimprovements
fortheAlexandria
Sanitation
Authority
(the
"ASA'), are treatedas subordinatedebt.
Wastewater
treatment
capacityandservices
arealsoprovided
totheIntegrated
SewerSystem
pursuant
to
co"tractswith ArlingtonCounty,the ASA,
the
Dishict
of
Columbia
and
the
UOSA,
whereby
the
County
is
obligatedto sharethecapitalcostsand
associated
debt
service
of
certain
facilities.
The
County's
obligations
to
such
entitiesare payablesolely~om the
revenues
ofthe
Integrated
Sewer
System
andarenotgeneral
obligations
ofthe
County.
Further
information
concerning
these
obligations
is includedin NotesI and~ to the BasicFinancial
Statements
shownin AppendixIV.
TheCountyhasenteredintoa serviceagreement
withASAthatobligates
theCountyfor60%ofthecostof
capacity of the ASA wastewater
treatment
plantand
ajoint
usesystem,
including
debtservice
onASAbonds
issued
forASAsystem
Improvements
where
theCounty
does
notOtherwise
provide
foritsshareofthecapital
costofsuch
improvements.
Themostrecentestimateof thecost
oftheimprovement
project
provided
byASA
totheCounty
wasapproximately
$320million.Whileapplications
forstategrants
havebeenmade,
therecanbenoassurance
that
stateor federalgrantswillbe receivedin the future.
TheCounty
obtained
permanent
funding
inEY2001
andagain
in EY 2002 for a portion of its
share
of
these
costs
from
theproceeds
oftwoloans
aggregating
$90million
from
the
Virginia
WaterFacilities
Revolving
Fund.
issued
totheFundtheCounty's
$40million
subordinated
sewerrevenuebondsbearinginterestat theThe
rateCounty
of 4.10%
per
annum
and
$50
million
subordinated
sewer
revenue
bonds
bearing
interest
attherateof3.758perannum,
in
evidence
ofitsobligation
torepay
theloans.
TheCounty
expects to provide the balance of its
Share
ofthecosts
ofASA's
improvement
project
from
other
borrowings
and
availableIntegratedSewerSystemfunds.
In January 1996, UOSA issued
$330.86
million
bonds:$288.60
million
bonds
tofinance
thecostof
expanding
itsadvanced
wastewater
treatment
plantfrom
32mgdto54mgdand$42.26
million
torefinance
certain
of its outstanding
bonds. In January2004,
UOSA
refunded
a portion
ofthisdebtfordebtservice
savings
and
accordingly
revised
theparticipating
member
jurisdictions'
debt
service
schedules.
Fairfruc
County
is
responsible
forapproximately
62.8%
ofthedebtservice
onUOSA's
bonds.
Thedebtserviceon theCounty's
sewer
revenue
bonds
andthesubordinate
obligations
payable
forcapacityunderits con~actwithUOSAoutstanding
asofJune30,2004arereflected
inthefollowing
table.
~___~_~~__
Fiscal
Se~e~e~e~S.
Year
EndinrrJune30
2005
2006
2007
uXos
2009
P~
$1.705,000
I$lo,ooo
1.925.ooo
2.045,000
2,170,000
Other
Sewer
Debt
Se~iee
Obligafions
Interest
SRFNRA
$5545399
$6,637.073
5~446540
53412493
5278,837
5,111~290
Oblirrations'
6.637,073
29385356
6,637~073 15.465,429
2014
2.940.000
4397,478
6,637,073
2015
U)16
2017
2018
2019
3.125,000
33U).00o
3530,000
3350,MX,
3,980.000
uno
4~30,000
20L1
4.495,000
Uszz
4775.900
5.075,000
2024-2034 37,860,000
Total
$96,874000
4~25;728
4,042,045
3,846.820
3,639~340
3,417,045
3,178,955
5925930
2657,100
5371.450
7,064,688
6,637,073
6.637,073
6.637973
6,637,073
14a7w16
16.077.878
L6.015,654
29397;792
30,017~204
30.029.194
34044798
16.077,402
30,051.953
16,076296
6,637~073
6,637,073
6,637,073
6,637.073
6,637,073
6,637.073
3,63W88
o
O
$87545,156 $116,468,022
28,889~233
29369,103
29.377;765
15,466,993
4985~290
4.eslA15
4;709~2~3
45~8,071
%28.885;454
14995.620
15ti65J37
15;462,855
2310,000
2,450,000
2605,ooo
2J70,MX)
Total
$14,997,982
6,637,073
6,6n,a73
6,637.073
2010
2011
U)12
2013
~
Subordinate
16,078506
16,078,818
16.077~255
30.064,097
34077,624
34092.711
34 103.668
16.076,005
34110,123
16,077~268
16.076.440
16.313;157
16311,177
97,875,681
$399~208.269
30.123~296
34134443
n383,645
23,757,627
142.800369
%700,091,447
cli
$ased
ontheColmty's
share
ofschedules
UoSA
debt
senriee.
Debt Ratios
The followingdata are presentedto show trends in the relationship
of the generalobligation
bond
indebtedness
of the Countyas
its estimatedpopulationand
Fund disbursements.
a percentage
oftheestimated
market
value
oftaxable
property
intheCounty
andto
fhetrend
ofgeneral
obligation
debtservice
requirements
asapercentage
ofGeneral
Trend of Net Debt as a Percentage of
Estimated Market Value of Taxable Property
FiscalYear
EndedJune30
NetBonded
Indebtedness'
Estimated
_MarketValuez
1994
1995
1996
1997
$1,110,177,500
1,136,368,575
1,167,504,650
1,219,735,725
$74,395,400,000
75302,700,000
78,155,100,000
80,853,900,000
1998
1,258,171,800
1999
1,314,377,875
2000
2001
2002
1,380,266,450
1,442,682,525
1,655,613,600
2003
1,779,461,575
Percentage
1.49%
1.50
1.49
1.51
83,471,400,000
1.51
87,086,700,000
1.51
92,692,600,000
101,048500,000
113,801,300,000
1.45
128,927,100,000
1.38
1.49
1.43
Source:
Fairfax
County
Department
ofTax
andDepartment
ofhlanagement
andBudget.
Beginningin FY 2002, the total includes Administration
Lease
Revenue
Bonds
fortheEDA
Government
Center
Roperties
andoutstanding
Certificatesof Participationfor the Soumoutstanding
County
Government
Center
inaddition
toGeneral
Obligation
Bonds,
Literary
Fund
loans
and
FCRHA Lease Revenue Bonds for Community Centers.
Beginning in FY 2003, the total also includes the Laurel Hill Public Facilifies
Revenue
Bonds.
2 Estimated
mad(et
value
isbased
onrecorded
values
asofJanuary
1ofmeprior
fiscal
year.
36
~j·
Per Capita
Debt Per
FiscalYear
Ended
Net Bonded
]Fstimated
Net Bonded
Indebtedness
Indebtedness' PoDnlationZPerCapita
1994
1995
1996
1997
1998
1999.
2000
2001
2002
2003
1
$ 1,110,177J00
863,134
1,136.368,575 879,401
1,167,504,650 899,650
1,219335,725 912,126
1,779,461,575
Capitaas
Percentageof
Per Capita
Income"
Income'
$ 1,286
3.59%
3.37
1,351
43,193
3.13
946;371
969,749
984,366
1,004,435
1,389
1,423
1,466
1,648
47,306
50,027
51,463
52,199
3.16
1,012,100
1,758
54,419
3.23
931,452
1,292
1,298
1,337
$ 35,779
37,201
38,482
40,330
1,258,171,800
1,314,377,875
1,380,266,450
1,442,682525
1,655,613,600
FairfaxCounty
Per Capita
3.47
3.32
2.94
2.&1
2.85
Source:Fairfax
County
Department
ofManagement
andBudgetBeginning
in FY2002,thetotalincludesGeneralObligation
Bondsand
othertaxsupported
debtpayable
~omtheGeneral
Fundincluding:
literary Fund loans,the outstandingRevenuebonds for the Economic
Development
Authority
Government
CenterPropemesa"dLaurel
HillPublic
Facilities,
theoutstanding
Certificates
ofParticipation
forthe
South
County
Government
Center,
andFCRHA
leaserevenue
bonds
forcommunity
centers.
2
Source:
Fairfax
County
Department
ofSystems
Management
forHuman
Services.
3
Source:Bureauof EconomicAnalysis,U.S.
Department
ofCommerce,
1994~2002;
Fairfax
County
Department
ofhlanagement
and
Budget2000-2003.
IncludesFairfaxCityandCity
of FallsChurch.
4
The Bureauof EconomicAnalysisre-benchmad(eddata back
to1994.DebtPerCapitaasPercentage
ofPerCapihIncome
forfiscalyears
1994
through
1999
was3.65,3.52,3.39,
3.35,3.23and3.16respectively.
37
~ns~---~~----------
------·----.----------~-.-._____
.._._____
Debt Service Requirements as a
Percentage of General Fund Disbursements
Fiscal
Year
Ended
Debt
Service
General
Fund
June 30
Reauirements
Disbursements
1994
$ 129,675,197
$ 1,394,808,186
Percentage
9.3%
1995
132,902~278
1,487,080,719
8.9
1996
1997
1998
142,754,018
152,571,474
162,970,744
1,602,457,378
1,682,606,121
1,756,990,140
8.9
9.1
9.3
1999
2000
2001
2002
2003
162,622554
176,004,197
183,740,487
190,097,946
212,106,642
1,849,587,185
1,982,577,128
2,148,334,971
2,292,016,724
2,447,015,916
8.8
8.9
8.6
8.3
8.7
Source: Fairfax County Department of Management and Budget Beginning in FY 2003, the total includes General Obligation
Bonds and other tax supported debt payable from the General Fund including: Literary Fund loans, the outstanding Revenue
bonds for the Economic Development Authority Government Center Properties and Laurel Hill Public Facilities, the outstanding
Certificates of Participation for the South County Government Center, and FCRHA lease revenue bonds foi community centers.
Underlying
Bonded Indebtedness
As of June 30, 2003, there was outstanding the following underlying bonded indebtedness of towns or
.districts within the boundaries of Fairfax County:
Town of Vienna
Storm Drainage/Street Improvement/Water
Sewer/Public Buildings
Town of Herndon
Recreational Complex/Water
Sewer/Recreational
Small District #1 of Dranesville
and
and
$16,523,333
12,514,596
Facilities
McLean Community Center
450.000
District
Total Underlying Indebtedness
$29.487.929
These underlying general obligation bonds are obligations of the respective town or district only and are
not obligations of Fairfax County and the full faith and credit of the County are not pledged to the payment of such
bonds
or notes.
The bonds, notes and other obligations of the Fairfax County Water Authority, the Fairfax County Park
Authority, the Fairfax County Industrial Development Authority, the Fairfax County Economic Development
Authority, the Fairfax County Redevelopment and Housing Authority, the Route 28 Highway Transportation
Improvement District, the Northern Virginia Health Center Commission, and the Northern Virginia Transportation
Commission are not obligations of the County.
38
h
BASE
DATA
Fairfax County reassesses more than 331,000 parcels of real property annually employing a computer
assisted mass reassessmentprogram for both residentialand non-residentialproperties. The performanceof the
annual assessment program as measured by assessment to sale ratios and coefficient of equity, referred to as the
Russell Index, is excellent. The Russell Index indicates the amount of deviation from the mean assessed value and
providesa measureof uniformityto the assessmentprocess. The InternationalAssociationof AssessingOfficers
considers an index of 15.0 or less to be good. For the reassessment effective Jannarv 1, 2004, the countywide
assessmentto sale price ratio was 0.91 and the RussellIndex was 6.0. See "GOVERNMENTSERVICES- General
Government Administration" for an explanation of the Russell Index.
The assessed value of the real estate tax base, as reported for 2004 in the main tax book for Fairfax County,
increased 12.04% in value from the prior year.
Thedatain thefollowing
fivetablesarepresented
to illustrate
trendsandcharacteristics
of theassessed
value of real and personal property which are major sources of County-derived revenue:
Assessed Value of Ad Taxable Property
(ooo~s)
Total
Fiscal
Real
Personal
Public Service
Corporation'
Assessed
Year
Property
Pronertv
Value
1995
1996
1997
1998
1999
$ 66,912,100
68,647,300
70,510,800
72,507,700
75,500,700
$ 6,775,400
7,539,300
8,257,400
8,620,700
9,070,800
$ 2,015,200
1,968,500
2,085,700
2,343,000
2,515,200
$ 75;702,700
78,155,100
80,853,900
83,471,400
87,086,700
2000
2001
2002
2003
2004
80,225,000
87,334,092
99, 172,800
114,155500
127,892,600
9,885,000
10,820,524
11,586,200
11,610,620
11,699,600
2,582,600
2,893,923
3,042,300
3,161,030
3,256,620
92,692,600
101,048,540
113,801,300
128,927,150
142,848,820
2005 test.)
142,656,080
11,700,440
3,153,480
157,510,000
Source: Actualvaluesare ~om the FairfaxCountyDepartmentof Tax Administrationas reportedin the EY 2003CAFRand the
FY 2005AdoptedBudgetPlan. Figuresare net of exoneratedassessmentsand tax relieffor the elderlyand disabled.
1
Pursuantto State statuteall Public ServiceCorporationreal propertyassessmentsare requiredto be made at 10056of estimatedmarket
value annually by the State Corporation Commission.
39
Rates per $100 Assessed
Real Estate-Regular and
Public
Q
Value(Fiscal
Year)
19%
1997
1998
1999
2000
2001
2002
2003
2004
2005
$1.16
$1.23
$1.23
$1.23
$1.23
$1.23
$1.23
$1.21
$1.16
$1.13
4.57
4.57
4.57
4.57
4.57
4.57
4.57
4.57
4.57
4.57
1.16
1.16
1.23
1.23
1.23
1.23
1.23
1.21
1.16
1.13
4.57
4.57
4.57
4.57
4.57
4.57
4.57
4.57
4.57
4.57
4.57
4.57
4.57
4.57
4.57
4.57
4.57
4.57
4.57
4.57
1.16
1.23
1.23
1.23
1.23
1.23
1.23
1.21
1.16
1.13
.01
.01
.01
.01
.01
.01
.01
.01
.01
.01
.01
.01
.01
.01
.01
.01
.01
.01
.01
.01
Service..........................
Personal Property-Regular.......
Personal Property-Pubhc
Service.....................................
Personal Property-Mining
and Manufacturing,
Machinery and Tools...............
Personal Property-Research
and Development.....................
Personal Property-Mobile
Homes
.....................................
Personal Property-Antique
Cars
.........................................
PersonalProperty-Special'...'...".
Source: Approved Fiscal Plans, FY 1996-2005.
1
Includes vehicles specially equipped for the handicapped;
privately owned vans used for van pools; vehicles belonging to volunteer fue and
rescue squad members; vehicles owned by auxiliary police; certain property of homeowners associations; aircraft to include flight
simulators; and motor vehicles owned by qualified elderly or disabled individuals an4 effective in FY 2000, boats.
Commercial-Indus~ial
Percentage of the
Total Assessed Value of Real Property
Fiscal Year'
Percent2
1995
19.58
1996
19.04
1997
19.56
1998
20.47
1999
21.84
2000
24.32
2001
25.37
2002
24.84
2003
21.97
2004
19.14
2005
18.20
Source: Fairfax County Department of Tax Administration. Assessed values are reported by State of Virginia Land Use Codes.
Vacant land is defined according to zoning classification.
1
Fiscal year property taxes are levied on prior year assessments.
2
Includes the Towns of Vienna, Herndon and Clifton.
40
9~
followingdata shows the assessedvalue of real
propertyof the 25 largestholdersof realpropertyin
the Countylas of January 1, 2004).
R
Pro~erhr
Owner
Prowrtv
rvpe
Total
Assessment
1
LehndorffTysons
Property
2
3
West GroupPropertiesLLC
PrentissProperties
Officeand Land
4
Dominion
Virginia
Power
PublicUtility
5
SmithPropertyHoldings
TysonsCornerRegionalShopCenter
VariousOffices,Retail,Ind.andLand
VariousCommercial
$ 485,820,295
453,206520
424,250515
358,671,418
257,888,285
6
FranconiaTwo
LP
Springfield
Mall
7
FairfaxCompany
Fair Oaks Mall
8
Washington
GasLightCo
PublicUtility
247.895,865
247,260,135
202,770,217
10
SpringfieldCampusLLC
Office,ShopCenterandLand
Continuing
CareRetirement
Community
190,398,370
178,961J75
11
12
13
GannettCompanyInc.
Office
Mobil Oil Corp.
PS BusinessParks LP
HQOfficeandVariousCommercial
IndustrialPark
169,940,580
14
USRPI LLC
Shopping
Centers
162,282,450
160,688,865
9
EOP Reston Town Center
15
West Mac Associates
16
WII~LP
Officeand Land
Offices,
Apartments,
Ind.andShopping
171,686,680
158,529,400
154,448,760
Centers
17
SummitProperties
Apartments
andLand
18
19
Mitre Corporation
Capital One Bank
Office
Office
20
CampusPoint RealtyCorp.
Office
21
Navy Federal Credit Union
22
ISTARNG LP
VariousOfficesandLand
148,218,635
146,674,540
141,827,810
140,527,065
Office
23
AvalonPropertiesInc.
Apartments
24
Pulte HomeCorp.
Residentialand Land
25
Verizon
Virginia
Inc.
PublicUtility
128,769,755
124,650,780
121,524,115
117,850,745
114.891.764
$5~24e6~9
Source:
Fairfax
County
Department
ofTaxAdministration.
Derived
from
lanuary
i, 2004
taxrolls.
As of January 1, 2004 the assessed value of the real
propertyof the 25 largestholdersof real propertyin the
County represented 3.60% of the total assessed
value
of
all
realproperty
in FairfaxCounty,excluding
taxexempt
properties. January i, 2004 assessments generate tax revenue in FY 2005.
41
Real and Personal Property
Tax Levies and Tax Collections
(ooo,s)
% of Current
Fiscal
Total
Year
Levy'
Current
%of
Collectionof
CoUections2
Levd Back
Taxes
1994 $1,025,807 $1,013,350
1995 1,058500 1,048,276
1996 1,103,903 1,095,762
1997 1,203,645 1,195,312
98.79
99.03
9926
99.31
1999
99.32
1998 1,254521 1,241,128 99.25
1,308,122
1,299,201
2000 1,394,627 1,385,239 99.33
2001
2002
1524,861 r,512~551
1,705,787 1,694398
2003
1,860,389
1,838,970
$18,224
13,000
11,490
6,479
1,267
12,088
13,795
Total Collection
& Back Taxes
of Current &
Collectedto
$1,031,574
1,061,276
1,107,252
1,201,791
Tax Levy
Back
Taxes
100.56
100.26
100.30
99.85
1,2A2,395
99.35
1,311,289
100.24
1,399,033
99.13
99.10
10;761
14,269
1523,312
1;704,667
98.80
17,529
1,856,499
100.32
99.90
99.93
99.79
Source: Comprehensive Annual Financial Reportsfor the FiscalYearsendedJune 30, 1994-2003.
I
The total levy is the levy for GeneralFundreal and
personal
propeay~.taxes
anddoesnotinclude
theproperty
taxlevyforSpecial
Revenue
Funds,e.g.forRefuseCollection
andCommunity
Centers.
2
Currentcollectionsdo not includetax collections.forthe
SpecialRevenueFundsor paymentsin lieuof taxes. As a resultof revised
accounting
procedures,
thecollectionof penaltyandinterestpaymentsforlatepaymentsof currenttaxesis includedin thecollectionof
current taxes rather than under the collection of back taxes.
3
Thepercentage
of levyis not thecollection
ratesincecurrentcollections
alsoincludepenaltyandinterestpaymentsforlatepaymentsof
current
taxes.
Section 58.1-3916 of the Code of
VirginiaauthorizesFairfaxCounty,pursuantto Section4-10-1of the
CountyCode, to imposea penalty of 10%for failureto pay taxeswhendue,withinterestto be due on suchtaxes
and penalty following the day such taxes are due at the rate of 10%per annumthe first year and at the rate
establishedpursuant to paragraph 6621 of theInternal
Revenue
Codeforthesecondandsubsequent
yearsof
delinquency.
FINANCIAL INFORMATION
Service
FFive-Year:~Fmmary
ofRevenues,
Expenditures
andFund
Balances
forGeneral,
Special
Revenne
andDebt
The financial data shown inthe
following
tablerepresent
a summary
forthefivefiscalyearsended
June30,
2003 of the revenues,expendituresand fundbalances
accounted
forin theprimary
government's
General
Fund,
SpecialRevenueFundsand DebtServiceFunds,and, in accordancewith StatementNo. 14 of the Governmental
Accounting
StandardsBoard,in the comparable,
primary
government-appropriated
fundsofthediscretely
reported
component units. The summaries for the five
fiscalyearsendedJune30, 2003havebeencompiledfromthe
financialstatementsof the Countyfor therespective
yearsandshouldbe readin conjunction
withthe related
financial statements and notes thereto.
i;r
42
1999
Revenues:
2000
YearsEndedJune30,
2001
2002
2003
Taxes'...............................~~~~~~~
$1,640,594,459
$1,690,371,422
$1.785,431,379
$1.898,192,584
$2,054,784,694
Permits, privilege fees and
regulatorylicenses...................
43,044.787
Finesandforfei~ures.........i..........
7,140533
Revenuefromthe use of moneyand
43,835,560
7,579,871
42,277,578
36,939,184
38,625,237
9.116533
10318,703
11,065,873
property...........................~~~~~~~~
58,159,188 64502,480 71.658.750 36.704,979 28,011,515
Charges for services and recovered
costs ...................................~~~~~
182,229,862
Intergovemmental
......................~
467,462,273
191,272,823
577,583,347
195,534.961
214,387.258
241,063,748
694134,884
784,912575
779,306,409
18,690,822
19,003,244
Miscellaneous
...................
.~..~~~~~~23.696,68420.701,792la,oru,at;~_
1Y,W~,244
17,601,692
Totalrevenues
.................
.........
52422,327,786
52,595,847,295
$2,812,844,907
%3,000,458,527
%3,170,459,168
Expenditures and transfers:
Generalgovernmentaladministration
$80,031,244
Judicialadministration
................
19502,814
Publicsafety...............................~
231,108,675
Publicworks.............................~~~ 113,140,139
Healthandwelfare......................
268,726,844
Parks,recreation
8rcultural.........
62,777,866
Community
development
.........,
79,995,482
Education"
Debtservice..............................~~
Nondepartmental28
.........,,.._.
Net
transfers
toother
funds6
.......
$ 87,400,231
21,408,526
256,155,919
124~495,828
299,285.489
66582,759
80,292,124
$ 84,251.292 $101,949,179 $109,811,931
24.162,805
30,891,025
34,094.538
289.032,001
379,702,367
409~258,168
137.550,684
142,189,150
155.020538
313,287,950
365,273.360
379,242,626
71,666,912
87,121981
87313,589
91,444,337
91906,803
96,435,266
1,192.010,103
1.331,052,353
1,446,628,160
1,518,075,351
176,262,542
184,970,872
96,500,551 106,035,082
193,211,342
120,577,637
1,580,926318
207,678~54
0
221.968,932
0
47 767.640 _
25.980,769
7 187
40,172,221
42,638,858
4/,,ol,wo
zs,Yao,76r
7,187,091
$2360,228,481
1
1
Total
expenditures
andtransfers.. $2360.228,481
92,600.318,041
$2,819,580,760
$2,950,768,239
$3,081,258,997
Excess (deficiency) of revenues
overexpenditures
andtransfers
Fundbalance,beginningofyear'
Adjustment of fund balance,
$ 62.099,305 $ (4,470,746) $(6,735,853)
321,061,166 383,115,957 377,374,210
Beginning
ofyear....................
0
Increase @ecrease) in Fund Balance
Reservesg.........................~~~~~~~~
Fundbalance,
endofyear...........
(1,333,746)"
(44J14)
62,745
0
390,376
$49.690,288
$89,200,171
371,028.733
431,583,220
10,972,2977
(108,098)
%383,115,957$ 377.374,210$ 371,028,733
$431,583,220
0
195,642
$520,979,033
Source:Comprehensive
Annual
Financial
Reports
fortheFiscalYearsEndedJune30,1999-2003.
1 Taxes
include
realestate,
personalproperty.
sales,
recordation.
business,
professional
andother
licenses
andmiscellaneous
othertaxes.
2
Pensioncontributionsto employeeretirementfunds,whichare includedin the Educationand Nondepartmental
expendituresfor 1999-2001
and allocatedto the appropriatefunctionsfor2002-2003.
foreachof thefivefiscalyearsendedJune30.1999through
2003.wereas
follows: 1999, $88,898,079; 2000,$91.228.972;
2001.$95.074.645,
2002,$95,789,400.
and2003.$102441,381.
3
Teachers'salariesaccountedfor in the SchoolOperatingFundare paid by contractovera twelve-month
periodendingin August.
Consequently, in order to reflect the total teachers'
salariesin theyeartheservicesarerendered,
anaccrualis madeat theendof eachfiscal
year for the payroll liability arising from those teachers'salaries
to bepaidin thefirsttwomonthsof'thesucceeding
fiscalyear.InFY1984
the County began a program to fund this
liability
totheFairfax
County
Public
Schools
overa l0-year
period.
InFY1990.
thepayment
to
offsetthe unfundedliabilitywas deferredBeginning
inFY19~7payments
wereresumed
overa tenyearperiodata rateof$1.62million
peryear.AsofJune30,2003.theunfunded
liabilitywasapproximately
$4.9million.
4
Beginning
withFY2000.
Housing
Funds
arereported
asEnterprise
Funds.
Thebeginning
fundbalance
forFY2000wasrestated
toreflect
this change.
5
Fundbalanceincludes
amountsreservedforinventories
of supplies.
6
Theinterfundtransfersamongthe fundspresentedhavebeen eliminated
7
ForFY2002.beginning
balancewasrestatedto complywith theprovisions
of Governmental
Accounting
Standards
BoardInterpretation
No. 6, "Recognition and Measurement of Certain Liabilities and
Expenditures
in Governmental
FundFinancialStatements".
Beginning
fundbalancewasalsoadjustedfortheGiftFundwhichis nowincludedin theGeneralFund.
8
Effective
FY2002.nondepa~hnental
expenditures
areallocated
tospecific
functions.
9
Rscal yeats 1999-2002 have been restated for
comparison
purposesto reflectGAAPbasisandBudgetbasismeasurement
differences
now
reported
inthefunctional
lineitems,ratherthanaggregated
andreported
inthe"Increase
@ecrease)
inFundBalance
Reserves"
lineitem.
43
Policies
TheBoard
ofSupervisors
hasbeen
guided
bylongstanding
financial
policiesandguidelines
intheconduct
of financialmanagement.The governing
ofoffinancial
policy
is contained
within
theTenPrinciples
of
SoundFinancialManagement.
Adoptedbystatement
the Board
Supervisorsin 1975and amendedas neededto address
changing
economic
conditions
andmanagement
practices,
theTenPrinciples
havebeenreaffirmed
andhaveguided
each succeedingBoard of Supervisors
to
establish
strong
fiscal
management
tools
and
practices.
The
Ten
Principles
provide for the integrationof land
useplanning
withcapital
andoperating
budgets;
establish
guidelines
·forthe
development
of annualbalancedbudgets;stresstheimportance
ofmaintaining
positivecashbalances;
establish
firm
not to exceed limits to debt ratios; provideguidance
on cashmanagement,
internal
controls,
andperformance
measurement;
provideguidelinesrestrictingtheproliferation
ofunderlying
debtanduseofmoralobligations;
and
encourage the development of a diversified
economy
withintheCounty.
Other policies and tools that have been
adoption of budgetary guidelines, formal
reserves, capital improvement
designed
toenhance
theimpact
oftheTenPrinciples
include
annual
establishment
of various
expenditure,
revenue
andspecial
purpose
planning
guidelines,
policies
forriskmanagement,
guidelines
foracceptance
ofgrant
awards,andplanningforinformation
technology.
Various
tools
in
active
use
by
the
County
include
the
annual
budget,theCapitalImprovement
Program,
revenueand financialforecasts,and management
initiativessuchas a
performance
measurement
program,
informationtechnologyinitiatives.
a payforperformance
management
system,
worldorce
planning
andvarious
Certain Financial Procedures
Description ofFunds
The County's annualauditedfinancialstatements
by the Boardof
Supervisors and the School Board. The accountsof the Countyincludethe fundsadministered
are organized on the basis of funds, each of which is
considered
to be a separateaccounting
entity. Thetransactions
ineachfundareaccounted
forbyproviding
a
~ea~I~t~tur~~
Ofself-balancing
accounts
which
comprise
itsassets,
liabilities,
fund
balance,
revenues
and
Annual Financial Statements
The County's financialstatementshave been
andreported
onbyindependent
certified
public
accountantssince FY 1969. The FY 2003.audit was examined
performed
byKPMG,
LLP,Certified
PublicAccountants,
A~se~x~I~~D.C.
For
further
information
regarding
theCounty's
audit
seetheIndependent
Auditor's
ReportThe County maintains its
accounting
system
inaccordance
withthespecifications
oftheAuditor
ofPublic
Accounts
of theCommonwealth
of
Virginia.
Certain
adjustments
havebeenmade
topresent
theaccompanying
financial
statements
inaccordance
withgenerally
accepted
accountingprinciplesapplicableto governmental
units.
The Countyhas been awardeda Certificateof
Achievement
forExcelience
in Financial
Reporting
by the
Government
FinanceOfficersAssociation
of the United
StatesandCanadaforitsannualfinancial
statements
each
year sincethe fiscalyear endedJune 30, 197i.
The County's annual financialstatements
availablefor inspectionat the Officeof the Directorof the
Department
of Finance,1U)00Government
Centerare
Parkway,
Suite214,Fairfax,Virgini~t~22035.
See"FUTURE
FINANCIAL
INFORMATIO~'
and"AppendixVII--CONT~NUING
DISCLOSURE
AGREEMENT."
Budgetary Procedure
The Countyhas no legal authorityto borrowin anticipation
of futureyears'revenues,
exceptby the
issuanceof bondsor bondanticipation
notes.
i
I:--
Prior to the beginningof each fiscal
year,
theBoard
ofSupervisors
adopts
a budget
planconsisting
of
estimatedrevenues
for such fiscal year. On the basis
of the adopted budget plan, the
Boardof Supervisorsappropriatesfunds
andestablishes
taxratessufficient
toproduce
the
'evenues,contemplated
in the budgetplan.fortheexpenditures,
contemplated expenditures and
Theannual
budgeting
process
fora fiscal
yearbegins
inthefirstquarter
oftheprevious
fiscalyearwiththe
submission
byagency
directors
ofbudget
requests
totheDepartment
ofManagement
andBudget.During
the
secondquarter,budgetrequestsare reviewed
andmeetings
between
theCounty
Executive,
Deputy
County
to
discuss
agency
requests.
Upon
receipt
of
the
preliminary
budget
ofthe
CountySchoolBoardin thethirdquarter,
Executivesand agencydirectorsare held
Executive
prepares
aninitial
budget
forsubmission
tothe
Boardof Supervisors
and proposes theCounty
taxratessufficient
to produce
revenues
needed
to meetexpenditures
contemplated in the initial
budget
After
work
theBoard
ofSupervisors
andpublic
hearings
onthe
proposed
budget,
changes
are
madeand
the
finalsessions
budget
iswith
ofthefiscalyearforwhich
thebudget
isprepared.
adopted.
Taxratesareestablished
priortothebeginning
During the fiscal year,
reviews
ofrevenue
andexpenditures
areundertaken
bytheCounty
Department
of Management
andquarterly
Budget.
Onthebasisof thesereviews,
theBoardof Supervisors
revises
appropriations as needed or desired.
OnJanuary
25, 1982,theBoardof Supervisors
a financialpolicyrequiringmaintenance
of a
"managed
reserve"
intheGeneral
Fund
beginning
onJulyadopted
1, 1982at a levelnotlessthantwopercentof General
Fund disbursements. This reserve has
in thebudget
eachfiscalyear.Thisreserve
was
implemented
to providefortemporary beenincorporated
ofunforeseen
needs
ofanemergency
nature
andtopermit
orderly
adjustmentto changesresultingfrom financing
termination
of
revenue
sources
Ulrough
actions
of
other
governmental
bodies.
In 1985,the Boardalsoadopteda
policy
appropriations
during
quarterly
budget
reviews
which
provides
that
nonrecuning
revenues
shouldbeused
foron
either
capitalexpenditures
or othernonrecurring
expenditures
and that
quarterly review adjustments are not
September13, 1999, the Board of
toexceed
twopercent
oftheGeneral
Funddisbursements.
Inaddition,
on
Supervisors
established
aRevenue
Stabilization
Fund
with
agoal
ofreaching
threepercentof GeneralFunddisbursements.
Asof theendof FY2003,theRevenue
Stabilization
Fundwas
percent
of
General
Fund
disbursements.
This
reserve
is
designed
to
address
Ongoing
requirements
inyearsofsignificant.economic
downturn.
fundedat a levelof approximately
1.1
TheGovernment
FinanceOfficersAssociation
of the
United
StatesandCanada
("GFOA")
haspresented
the Award for Distinguished
toFairfax
County
foritsannual
budget
foreach
yearsince
the
fiscalyearbeginning
July1,Budget
1985.Presentation
In orderto receive
fhisaward,
a governmental
unitmustpublish
a budget
asa policy
document,
asanoperations
guide,
asa financial
planandasa
documentthat meets programcriteria
communications
medium.
InvestmentManagementPolicy
The County's Investmentand Cash
program
operates
underthedirection
oftheInvestment
Committee
comprisedof the ChiefFinancialManagement
Departmentof Managementand
Directorof the Departmentof Finance.
Officer,
theDirector
oftheDepartment
ofFinance,
theDirector
ofthe
Budget,
theDirector
oftheDepartment
ofTaxAdministration
andtheDeputy
theCounty'sinvestment
pohciesand
Guided
bya formal
investment
policy,
theCommittee
continually
reviews
strat~gies~-weekl~andmo~torsdaily~vestmentac~~~.
During
FY2003,theCounty's
average
portfolio
ate (whichincludesinvestments
in theGeneralFund,
Special
Revenue
FundsandEnterprise
Funds)was approximately
$1.7 billion. The fundsare investedin U.S.
Treasuryobligations,obligationsof the Federal
Home
LoanMortgage
Corporation,
Federal
Home
LoanBank,
Federal
Farm
Credit
Bank,
andFederal
National
Mortgage
Association,
bankers
acceptances,
commercial
paper
(ratedAI/P1orhigher),
certificates
ofdeposit,
mo"ey
market
mutual
fundslimited
toGoverument
Obligations,
and
repurchase agreements collateralized by U.S. Treasury
securities.
The County'sinvestmentpolicies
govern
thepooled
cashandgeneral
obligation
bondproceeds
portfolioprohibit investmentin instrumentswhich
leverage in its investments.
Z~
~--·q~g·lli
generally
referred
toasderivatives,
andtheCounty
doesnotemploy
i"
O
General Fund Revenues,Expenditures, Transfers andBeginning Fund Balance
The General Fund is maintainedby the County to account for revenue derived from County-widead
valorem taxes; other local taxes, licenses, fees, permits, charges for services, certain revenue from Federal and State
governments,and interestearnedon investedcash balancesof the GeneralFund and CapitalProjectFunds. General
Fund expendituresand transfersincludethe costs of general Countygovernment,transfersto the SchoolOperating
Fund to pay the local shareof operatingFairfaxCountypublic schools,and transfersto the Debt Serviceand Capital
ProjectsFundsto pay debt serviceon Countygeneralobligationbonds and for certaincapital improvementprojects.
General Fund Summary
Shownbeloware the County's revenues,expenditures,transfersand beginningfund balanceof the General
Fund for FY 1999 through EY 2003.
General Fund Revenues,Transfers and Be~nning Fund Balance
tin thousands)
Fiscal
General Property Taxes .................:........
OtherLocal Taxes..................................
Year
Ended
June
30
1999
2000
2001
20022
2003
$1,311,289
$1,336,728
$1,403,483
$1,516,094
$1,667,595
317,893
343,197
360,365
360,263
373,594
32,874
33,654
31,908
28,609
27,781
7,140
7,580
9,117
10,319
11,060
45,970
51,479
57,367
28,212
21,463
35,445
34,293
37,783
40,693
45,921
103,449
180,966
239,375
Permits, Privilege Fees and Regulatory
Licenses..............................................
Fines and Forfeitures.............................
Revenue ~om the Use of Money and
Property ..............................................
Charges for Services & Recovered
Costs ...................................................
Intergovenrmental..................................
315,653
322,110
Miscellaneous ........................................
Transfers In and Beginning Fund
Balance ...............................................
17
6,361
403
1,237
920
94,842
100,796
114,170
110,289
130,931
Adjustment to Beginning Fund
Balance ...............................................
Total.........................................
-$1,948,919
-$2,095,054
-$2,253,971
8,0461
$2,419,415
$2,601,375
Source: Comprehensive Annual Financial Reports for EY 1999-EY 2003.
1
ForFY2002,beginning
balancewasrestatedto complywith theprovisions
of Governmental
Accounting
Standards
BoardInterpretation
No.6, "Recognition
andMeasurement
of Ce~ainIlabilitiesandExpendihues
in Governmental
FundFmancialStatements".
Beginning
fund balancewas also adjustedfor the followingfundswhichare now includedin the GeneralFund: Gift Fund,ConsolidatedCommunity
Funding Pool Fund and Contributory Fund.
2
FY 2002 has been restatedfor comparisonpurposesto reflect gross activityin the Gift Fund (includedin the GeneralFund effectiveFY
2002 - see footnote i), rather than net activity.
46
General Fund Expenditures and Transfers
tin thousands)
Fiscal Year Ended June 30
1999
2000
2001
2002'
2003
Transferto
SchoolOperatingFund............
8 852,1288 897,413$ 988,001$ 1,079,912
8 1,168,875
Costs ofGeneral County Government.......
Transfer to Debt Service Funds .................
Transferto CapitalProjectFunds..............
Transfer to Metro Construction and
Operations Fund..............................~~~~~~~~
746,337
177,649
820,403
184,072
877,488
189,918
945,879
203,539
1,008,151
213,694
14,607
23,360
21,996
7,507
7,006
11,151
7,046
12,673
11,451
12,273
47,715
50,283
58,259
44,334
37,919
Other Transfers ........................~~~~~~~~~~~~~~~~~~
Total............................~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
$1,849,587
$1,982,577
$2,148,335
$2,292,622$2,447918
Source:Comprehensive
AnnualFinancialReportsforFY 1999-FY
2003.
1 FlI
2002
hasbeen
restated
forcomparison
purposes
toreflect
gross
activity
intheGiftFund
(included
intheGeneral
Fund
effective
FY
2002),ratherthan net activity.
Revenues
Thefollowingis a discussionof theGeneralFundrevenuestructure.
a
General Property Taxes -- An annual ad valorem tax is levied by the County on the assessed value of real
and tangiblepersonalpropertylocatedwithintheCountyas of January1 precedingthe fiscalyearin whichthe said
tax is due. The personal property tax on motorvehicleswhichacquiresitls withinthe Countyor have title
transferred on or after January 2 is proratedona monthlybasis. Realpropertyis assessedat 100%of its fairmarket
value. Personal property is also assessed at
100%ofits fairmarketvalue.Realproperty
taxesaredueJuly28and
December5 of the fiscalyearin whichtheyare levied. Thepaymentdateforpersonalpropertytaxesis October5.
Thepenaltyfor latepaymentis 10%of theamountdue,andintereston delinquenttaxesandpenaltiesaccruesat a
rate of 1% per annum for real
estateand5%per annumforpersonalproperty.In casesof propertyon which
delinquent
taxes
arenotpaidwithin
three
years,
theCounty
mayselltheproperty
atpublic
auction
topaythe
amounts due. There is no legal
limitatthepresent
timeontheproperty
taxrateswhich
maybeestablished
bythe
County. Propertytaxes (includingdelinquentpayments, penalties, and interest) accounted for 67.4% of total
General Fund revenues in EY 2003. However,this percentagedoes not includethe reimbursement
~om the
Commonwealthof Virginia for a portionof the personalpropertytax: Includingthe reimbursement
whichis
reflected in Intergovernmental revenue,the percentageof revenuefrompropertytaxes is 75.3%.A discussion
concerning the Commonwealth's
planto reducepersonalpropertytaxespaidbycitizensfollows.
During its 1998 Special Session, the General
Assembly
of Virginiaenactedlegislation
thatwillreduce
Personalpropertytaxesapplicableto individually
ownedmotorvehicles.Thereduction,whichwillapplyto thefirst
$20,000 in assessed value, is
Commonwealth
will
scheduled
to be phasedin overa fiveyearperiod.Thelegislation
statesthatthe
reimburse
localgovernments
fortherevenue
lostfromthereduction
inpersonal
property
tax
collections.In EY1999,the firstyearof implementation,
taxpayerswerebilled for the entire amountof tax levy and
received
a refund
of 12.5
percentof thetax on the first$20,000of the valueof theirpersonalvehiclefromthe
Commonwealth of Virginia
Vehicles
valued
lessthan$1,000
wererefunded
100percent.InFY2000,2001,and
2002 the Commonwealth'splan reduced PersonaiProperty
Taxespaidby citizensby 27.5percent,47.5percent,
and70 percentrespectively,
withoffsettingreimbursements
paidtotheCounty
bytheCommonwealth
ofVirginia.
In order to balance
)
the
State's
FY2003budget,
cartaxreliefwas~ozenat70%ofthetax.Theoriginal
planwasto
increase the reimbursement to 100% in EY 2003.
Depending
on Staterevenuegrowth,thepercentagewillremainat
70%
orincrease
to1006
aslong
asfunds
areappropriated
by theGeneralAssembly.TheCounty'stotalpersonal
47
property tax collections for EY 2003 were $466.5 million
millionreimbursed
by theCommonwealth
of Virginia
Other Local
Tares
comprised
of$271.1
million
paid
byt;upayers
and
5195.4
-TheCounty
leviesvarious
otherlocaltaxes,including
a I~blocalsalestax(collected
by the Stateandremittedto the County),a taxon
consumerutilitybillsbasedon consumption
for gas andelectric
servicesand 22.2% for telephoneon bills
forresidential
classesand22.2%forbillsupto
$1,600per monthfor commercialciasses. up to $50permonth
Also
included
in
this
category
is
a
cigarette
taxof5eperpack,property
recordationtaxes, an automobilelicense tax, and various business,professionaland occupational
licensestaxes.
Thesetaxesaccounted
for15.1%oftotalGeneral
Fundrevenues
inFY2003.
Pennits, Privilege Fees and
Regulatory
Lice~Fes
-- TheCountyrequires
thatlicenses
or permitsbe
in
the
County
and
that
fees
be
paid
for
services
provided
bycertain
Countydepartments.Theserevenuesrepresented1
obtainedin order to performcertain activities
.1% of total General Fund revenues for EY 2003.
Fines and Forfeitures-- The sourcesof revenuein this categoryincludecourt fines and penalties~om the
Circuit
Court
andtheGeneral
District
Court
andcourtfinesandcostsfromtheJuvenile
andDomestic
Relations
DistrictCourt. The finesare for trafficviolations,misdemeanors
andfelonies.In addition,
theCountyreceives
revenues from parking violations as
of General Fund revenues in FY 2003.
authorizedunder
theCountyCode.Revenues
in thiscategory
represented
0.4%
Revenuefromthe Use ofMoney MdProperty
--Theprincipal
sources
ofrevenue
fromtheuseofmoney
and property to the General Fund are
intereston GeneralFundandCapitalProjectFundinvestments
andminor
amounts
ofrevenue
~omthesaleandleaseofCountyequipmentandproperty.Theserevenuesrepresented0.9%of
General Fund revenues in FY 2003.
Chargesfor Servicesand RecoveredCosts -- The principalsources of revenueto the General Fund ~om
charges for services are CountyClerk fees, school age child
care fees, recreation fees, publication sales and various
other
services
forwhich
theCounty
charges
a fee.Revenues
inthiscategory
represented
1.985
ofGeneral
Fund
revenues in FY 2003.
Inrergovernmental
Revenue -
Intergovernmental
revenueis comprisedof revenuefrom the State and
revenue~om the Federalgovernment. Revenuesin this category represented 13.0% of General Fund revenues in
FY 2003. Thispercentageincludesthe
revenue
thattheCountyreceives
fromtheCommonwealth
asreimbursement
for the County's personalproperty
tax. Eachrevenuesourcewithinintergovernmental
revenueis discussedbelow:
Revenue from the State
-- TheCounty
is reimbursed
bytheCommonwealth
of Virginia
fora
portionofsharedexpenses
including
certainexpenditures
for socialservices,the sheriffsoffice,courts,the Office
of the CommonwealthAttorneyand otherconstitutionaloffices. Additionally,the Countyreceivesa share of the net
profits ~om the State Alcoholic
Beverage
Control
Board's
liquor
salesandStatecontributions
toassistinmeeting
law enforcementexpenditures.As mentionedin the sectionconcerningGeneralPropertyTaxes,the Commonwealth
alsoreimburses
theCountyfora portionof its personal
property taxon
vehicles. Zncludingthe reimbursement for
the County'spersonalpropertytax, revenues~om this category represent 11.1% of total General Fund revenues in
the fiscal year ended June 30, 2003.
General Fund revenue in EY 2003.
public school operations. These
Excluding
thisreimbursement,
revenue
fromthiscategory
represents
3.2%of
TheCounty
receives
a significant
amount
ofadditional
Stateaidinsupport
of
revenues
arecrediteddirectlyto theSchoolOperating
andSchoolLunch
Funds,
however,and are not reflectedin the GeneralFund.
Revenue from the Federal Government -- The principalsources of categoricalFederal aid to the
General Fund are Federal
grantmoneys
forairpollution
control
andFederal
TitleXXfundsprimarily
usedto
purchasefostercare, day care and protectiveservicesfor clientsof the Departmentof FamilyServices. This
revenue category represented 1.9% of General Fund revenues in FY 2003.
MiscellaneousRevenues-- The sourcesof revenue in this categoryincludethe saleof landandbuildings,
contract rebates, and other miscellaneous sources.
Fund revenue
in FY 2003.
These
revenue
sources accounted for less than 0.1% of General
and Transfers
Thefollowing
isadiscussion
ofthemajor
classifications
ofGeneral
Fundexpenditures
andtransfers.
Transferto School OperatingFund -- TheCountytransfersmoniesfromthe GeneralFundto the School
OperatingFund to paythe County's share
ofthecostsofoperating
publicschools
inFairfax
County.Thistransfer
represented approximately 47.8% of total disbursements
~omtheGeneralFundin thefiscalyearendedJune30,
2003.Thetransferto theSchoolOperating
Fundwasapproximately
75.9%oftotalreceipts
oftheSchoolOperating
Fund. Otherrevenuescrediteddirectlyto the SchoolOperatingand School LunchFunds includerevenuefrom the
FederalGovernment,
theCommonwealth
of Virginia,theCityofFairfax
(representing
tuitionofstudents
residing
in
~oC~t~U~hFe~f~
Who
attend
Fairfax
County
schools),
and
other
revenue
derived
locally
~om
sale
oftextbooks,
Costs of General County Govenunent-- The Countypays~omthe General
Fundthe costsof general
County government.
These costs
includeexpenditures
for generalgovernment
adminis~ation,
judicial
administration,public safety, public works, health and
welfare,parks,recreation
andcultural,andcommunity
development.
Thisclassification
wasapproximately
41.2%of total GeneralFund disbursementsin FY 2003.
Transfer to Debt Service Funds -
TheCountytransfers~om the GeneralFundto the DebtServiceFunds
amounts sufficient to pay principal and interest on
outstanding
CountyandSchooldebtincluding
generalobligation
bonds, South County GovernmentCenterCertificatesof Participation,EDA and FCRHAlease revenue bonds and
LiteraryFund loans. Transfersto the Debt ServiceFundsrepresented8.7% of total GeneralFund disbursementsin
FY 2003.
Tra~fer to Capital Project Funds -
TheCounty
transfers
monies
~omtheGeneral
FundtotheCapital
Project Funds to pay the cost of certain
capital
improvements.
TheGeneral
Fundtransfer
to theCapital
Project
Funds (except for the General Fund
transfer
for
Fairfax
County's
obligations
to
the
Washington
Metropolitan
Area
Transit Authority ('UTMATA"), which is discussed
below)represented
0.3%of totalGeneralFunddisbursements
in
FY 2003. Otherrevenuesof the CapitalProjectFundsconsistprimarilyof bondproceeds.
Transfer to Metro Construction and
and as such has agreed to make certain
OperationsFund- TheCountyis a memberjurisdictionof WMATA
capitalcontributions
in supportof theconstruction
byWMATA
of a rail
transit system to serve the Washingtonmetropolitan
area(whichincludes
theCounty)
andto paya portionof the
deficitincurredbyWMATAin theoperationof its bussystem
andrailsystemTheCounty
generally
hasusedbond
proceeds to fund its capital contributions
toWMATA
andhastransferred
monies
fromtheGeneral
Fundtopayits
share of the bus and rail operatingsubsidies. TheGeneral
Fundtransferto theMetroConstruction
andOperations
Fund to pay the County's share of the system'soperatingsubsidiesrepresented0.5% of total GeneralFund
disbursements in FY 2003.
See
thesubsection
hereinentitled'Transportation"
fora morecomplete
discussion
of
the County's obligationswith respectto WMATA.
Transfers to
variety of purposes.
OtherFunds- TheCountytransfers
moniesfromthe GeneralFundto otherfundsfor a
TheGeneral
Fundtransfer
tootherfundsincludes
transfers
totheCounty
Transit
Systems,
Information
Technology,
AgingGrantsandPrograms,Community-Based
FundingPool,HousingProgramsfor the
Elderly, Health Benefits Trust and
Equipment
Management
andTransportation
Agency.Transfers
to otherfunds
were 1.5%of total GeneralFund disbursementsin FY 2003.
Transfer to Revenue Stabilization
~om the General Fund to a Revenue
prolonged economic downturns.
Fund- Beginning
in FY 2000the Countybegantransferring
monies
Stabilization
Fundtoaddress
significant
revenue
reductions
duringsevere,
FY 2005 Budget
OnApril21,2003,theBoard
ofSupervisors
reaffirmed
andapproved
Budget
Guidelines
forEY2005.The
Boarddirectedthe CountyExecutiveto developa budgetfor FY 2005that limitsgrowthin expenditures
and the
School
Transfer
toprojected
increases
in revenue.In addition
theBoarddirectedthatall information
on theFY
49
2005 revenueand economicoutlook shouldbe forwardedto the Board for discussionin Fall 2003 so that guidance
to theCounty
Executive
regarding
thetaxrateaswellasthetransfer
totheSchools
couldbeprovided.
Balances
identified
throughout
thefiscalyear,andnotrequired
to supportexpenditures
ofa criticalnature,shouldbe heldin
reserve.Inordertoeliminate
structural
imbalances
between
Countyresources
andrequirements,
theBoarddirected
that both County and School resources should
beallocated
withconsideration
forthecontinued
availability
offunds.
All non-recurring funds should be directed toward
toward recurring expenses.
non-recurring
usesandrecurringresourcesshouldbe targeted
OnMay24,2004theBoardofSupervisors
adopted
therealestatetaxrateof$1.13per$100ofassessed
value, completing the adoption of the EY 2005 BudgetPlan. The adoptedFY 2005 budgetconformsto the Board's
budget
guidelines.
Disbursements
fromallactivities
total$4.65billion,
including
General
Funddisbursements
of
$2.73 billion,a 2.98 percent increaseover the EY 2004 RevisedBudgetPlan. TheFY 2005GeneralFundbudget
reflectsrevenuegrowthof $126.1million,or 4.85percent,entirelyfromrisingrealestateassessments.
Allother
sources
ofrevenue
areprojected
ata netdecrease
of$1.1million.Spending
increases
forCounty
services
havebeen
heldto a modest
increase
of 1.62percent
forbaseline
funding
adjustments
andrequirements
associated
withnew
facilities planned to come on-line in EY 2005.
In accordance
withtheBoard'sbudgetguidelines
the operating
transferincreaseto the FairfaxCountyPublicSchools
is equaltotheprojected
revenue
growthof6.57percent,
oran
$81.52
million
increase
intheSchool
transfer.TheEY2005budget
provides
forcontinuing
essential
services
at
current
levels,including
thecostof doingbusiness,
mandates,
contractual
obligations
andotherexisting
commitments, such as compensation and benefits.
In conjunction
withtheadoptionof theFY2005AdoptedBudget
Plan,theBoardof Supervisors
reaffirmed
andapproved
BudgetGuidelines
forFY2006.TheBoarddirectedthe
County Executiveto develop a budget for FY 2006that limitsgrowthin expenditures
to projectedincreasesin
revenue.
As a resultof actionstakenby the Boardof Supervisors
on September
13,2004,theFY2005Revised
BudgetPlantotals$5.90billion,including
General
Funddisbursements
of $2.81billion.Theincrease
overtheFY
Adopted Budget Plan includes a
number
of administrative
balances.2005
adjustmentsapprovedby the Board of Supervisors,
carryover
ofcertain
itemsapproved
inN 2004butnotyetexpended,
andthecarryover
ofunexpended
project
and
grant
CAPITAL IMPROVEMENT PROGRAM
In connection with the County's adoptedcomprehensive
landuse plan,the FairfaxCountyPlanning
Commission annually prepares and submits to theBoardofSupervisors,
a capitalimprovement
program
(the"CIP')
for the ensuing five-year period. TheCIPis designed
to balancetheneedforpublicfacilities
as expressed
bythe
Countylanduseplanwiththefiscalcapability
oftheCountytoprovideforthoseneeds.
TheCIPis anintegral
element
of theCounty's
budgeting
process.Thefive-year
document
servesasa
general planning guide for the construction of generalpurpose,schoolandpublicutilityprojectsin theCounty.The
CIP is updatedand approvedby the Board of Supervisors
eachyear. Thisannualreviewprocesspromptscareful
attention to the development of reliable capital
expenditure
andrevenue
estimates
andthetimelyscheduling
ofbond
referenda.
In connection with the CIP process, the Board of
Supervisors
has adoptedcertainpolicyguidelinesfor the
developmentand financingof the CIP. These guidelinesincludeself-imposed
restrictionson theissuanceof general
obligation
bondsdesignedto keepGeneralFundsupported
debtserviceexpenditures
less than 10%of total
Combined
General
Funddisbursements,
andto maintain
theratioof netbondedindebtedness
tothemarketvalueof
taxable property in the County at a level less than 3.0%
The Board of Supervisors continues to review
thoroughlythe County'sdebt programin lightof current
fiscal
conditions
andcapital
needs.Currently,
newbondsalesarelimited
toanaverage
of5200million
peryear
with a maximum limit of $225 million in a
$290,610,000 of additionai
single year. On November4, 2003, Countyvoters approved
bonds
tofinance
school
facilities.
Referenda
totaling
$325million
areplanned
forparks,
libraries, transportation, and human services in 2004. An additionalreferendumof approximately$350 million in
2005to financeschoolfacilities
is anticipated.
TheCIPforFiscalYears2005-2009
<withfutureFiscalYearsto
2014)wasapproved
by the Boardof Supervisors
on April26, 2004. TheCountyprogram
includes
new
-
--
...
i
renovationand renewalof schoolfacilities,parks, housing development,revitalization,storm water
management,public safetyand courts,libraries,humanservices,
solidwaste,sewersandtransportation.
Significant
capitalconstruction
activitytotaling$2.18billion,including
regional
parks,stateandfederal
transportation
projects
and water supply projects, is undertaken within
theCounty
of bene~tto County
residents,
butnotmanaged
or
fundeddirectlybytheCounty.Thetotalcapitalconstruction
activityplannedwithinthe countytotals$4.05billion
over the next five years.
RETIREMENT
The County administers
SYSTEMS
fourseparate
public
employee
retirement
systems
thatprovide
pension
benefits
for
variousclassesof Countyemployees(Educational
Employees
Supplemental
Retirement
System,PoliceOfficers
RetirementSystem,Employees'RetirementSystemand Uniformed
RetirementSystem).In addition,professional
County
School
Board
participate
ina plansponsored
andadministered
bytheVirginia
~'~m~:~;
~ys~e~m~girf;u
The Fairfax Countyretirementsystemsinvestmentsare managed by independent professional investment
managers. Investmentsin derivatives are not made for speculativepurposes but may be used by investment
managers to gain access to markets, to reduce risk, or to reducetransactioncosts. InvestmentManagersare
prohibited~om using leverageand options.
For further information
regardingthe County'sretirementsystems,see "BasicFinancialStatements--
NotestoFinancial
Statements
- NoteG" inAppendix
IV.
CONTINGENTLIABILITIES AND CLAIMS
The Countyis contingentlyliable withrespect
to lawsuitsandotherclaimsthatarisein the ordinarycourse
of its operations. See Note K in the
County'sFinancialStatementsAppendixIV to this OffrcialStatementfor
detailsas of the end of fiscalyear 2003.
APPROVAL OF LEGAL PROCEEDINGS
Legal mattersincidentto the authorizationand issuanceof the Bondsare subjectto the approvalof Sidley
Austin Brown & Wood LLP,
NewYork,NewYork,BondCounsel,
theproposed
formofwhose
opinion
isincluded
herein as Appendix VI.
TAX MATTERS
Opinion of Bond Counsel
Intheopinion
ofBondCounsel,
exceptasprovided
inthefollowing
sentence,
interest
ontheBondswill
in
not be includable
thegrossincomeof theownersof theBondsforpurposes
of Federalincometaxationunder
existing
law.Interest
ontheBonds
willbeincludable
inthegrossincome
oftheowners
thereof
retroactive
tothe
dateof issueof theBondsin the eventof a failureby the County
or theschoolboardof theCountyto complywith
applicable requirements of the Internal
Revenue
Codeof 1986,as amended
(the"Code"),
andtheirrespective
covenants regarding use, expenditure and investment of the proceedsof the Bondsand timelypaymentof certain
investment earnings to the United StatesTreasury;andno opinionis renderedby BondCounselas to the exclusion
firomgross income of the
intereston
theBondsforFederal
income
taxpurposes
onorafterthedateonwhichany
actionaffecting
suchcovenants
is takenupontheapproval
ofcounsel
otherthansuchfirm.
In the opinionof Bond Counsel,interest
ontheBonds
willnotbea specific
preference
itemforpurposes
of
the Federalindividualor corporatealternative
minimumtax. TheCodecontainsotherprovisionsthatcouldresultin
tax consequences, upon which Bond Counsel renders
no opinion, as a result of ownershipof such Bonds or the
inclusionin certaincomputations
(including,
withoutlimitation,thoserelatedto the corporatealternativeminimum
tax)of interestthatis excludedfromgrossincome.InterestontheBondsownedbya corporation
willbe included
in thecalculationof thecorporation's
Federal
alternative
minimum
taxliability.
Original Issue Discount
Theexcess,if any,of theamountpayableat maturity
ofanymaturity
oftheBondsovertheissueprice
thereofconstitutesoriginalissuediscount The
amount
oforiginal
issuediscount
thathasaccrued
andisproperly
allocableto an ownerof anymaturityof the Bonds
withoriginal
issuediscount
(a'~iscountBond")willbe
excluded~om grossincomefor Federalincometax purposes to the same extent as interest on the Bonds. In
general,the issuepriceof a maturityof the Bondsis the
firstpriceat whicha substantial
amountof Bondsof that
maturity
wassold(excluding
salestobondhouses,brokers
similar
persons
ororganizations
actinginthecapacity
ofunderwriters,
placement
agents,
orwholesalers)
andtheor
amountof original issue discountaccrues in accordance
witha constant
yieldmethod
based
onthecompounding
of interest. A purchaser'sadjustedbasisin a Discount
Bondis to be increasedby theamountof such
the sale or other dispositionof such
discount that accrues in each
accruing
discount
forpurposes
ofdetermining
taxable
gainorlosson
DiscountBonds
forFederal
mcome
taxpurposes.
Aportion
oftheoriginal
issue
year
toanownerofa Discount
Bondwhichis a corporation
willbeincluded
inthe
calculationof the corporation's
Federal
alternative
minimum
taxliability.
Inaddition,
original
issuediscount
that
accrues in each year to an
owner
ofaDiscount
isincluded
inthecalculation
ofthedistribution
requirements
ofcertainregulated
investment
companies
and Bond
may
result
in
some
of
the
collateral
Federal
income
tax
consequences
discussedbelow. Consequently,
owners
ofanyDiscount
Bond
should
beaware
thattheaccrual
oforiginal
issue
discountin eachyearmayresultin
analternative
minimum
taxliability,
additional
dis~ibution
requirements
orother
collateralFederalincometax consequences
although
theownerof suchDiscount
Bondhasnotreceived
cash
amibutable
tosuchoriginal
issuediscount
insuchyear.
The accrual of original issue discount and
saleor otherdisposition
of a
DiscountBondthatis not purchasedin the initial its effecton theredemption,
Bonds
is
Offering
at thefirstpriceat whicha substantial
amountof such
sold to the public may be determined according
to rules that differ from those describedabove. An owner
of a DiscountBond shouldconsulthis tax advisorswithrespectto the determination
for Federalincometax
purposesof the amountof originalissue discount
toBond.
suchDiscount
Bondandwithrespect
tostateand
localtaxconsequences
ofowning
anddisposing
ofwith
suchrespect
Discount
Original Issue Premium
Theexcess,if any,of the tax basisof Bondsto
as inventory,stockin tradeor for saleto customers a purchaser(otherthana purchaserwhoholdssuchBonds
intheordinary
course
ofbusiness)
overtheamount
payable
at
maturityis"bondpremium."Bondpremium
is amortized
overthetermof suchBondsforFederalincometax
purposes (or, in the case of a bond with bond
and yield may be requiredto be determined
premium
callable
priortoitsstated
maturity,
theamortization
period
onthe
ofanearlier
calldatethatresults
inthelowest
yieldonsuch
bond). Ownersof suchBondsare required
to basis
decrease
theiradjustedbasisin suchBondsby the amountof
yearsuchBondsareheld. Theamortizable
bondpremium
amortizablebondpremiumattributableto eachtaxable
on such Bonds attributable
premium on such Bonds is
foa taxable
yearisnotdeductible
forFederal
income
taxpurposes;
however,
bond
~eated
asanoffset
toqualified
stated
interest
received
onsuchBonds.
Owners
ofsuch
Bonds
should
consult
their
taxadvisors
withrespect
tothe
determination
forFederal
income
taxpurposes
ofthe
treatmentof bond premiumupon sale or
otherdisposition
ofsuchBondsandwithrespect
tothestateandlocaltax
consequencesof owningand disposingof such Bonds.
Collateral Tax Consequences
Ownershipof tax-exemptobligations
mayresultin collateral
taxconsequences
to certain
taxpayers,
including,
without
limitation,
financial
institutions,
property
and
casualty
insurance
companies,
certain
foreign
co'porations
doingbusinessin the UnitedStates,certainS Corporations
with
excess
passive
income,
individual
recipientspf Social Securityor railroad
retirement
benefits,
taxpayers
eligible
fortheearned
income
taxcreditand
faxpayers who may be deemed to have incurred
or continued
indebtedness
to purchase
or carrytax-exempt
obligations. Prospective purchasers of the Bonds should
consult their tax advisors as to the
applicabilityof any such
collateral consequences.
Legislation
affecting
municipal
securities
iSconstantly
being
considered
bytheUnited
States
Congress.
Therecanbenoassurance
thatlegislation
e"acted
after
the
date
of
issuance
of
the
Bonds
will
not
have
an
adverse
effectonthestatusoftheBonds.Legislative
or·regulatory
actions
and
proposals
may
also
affect
the
economic
value
ofthetaxexemption
orthemarketpriceoftheBonds.
FINANCIAL ADVISOR
The County has retained
PublicFinancial
Management,
Inc.,Arlington,
Virginia,
asfinancial
advisor
(the
"FFnancciaAdvisor'? in connectionwith
theissuance
oftheBonds.
Although
theFinancial
Advisor
assisted
inthe
Statement,
the
Financial
Advisor
is
not
obligated
to
undertake,
and
has
not
u"dertakento make,an independentverificationor
preparation and review of this Official
to assumeresponsibility
for the accuracy,
completeness,
or
fairnessof the information
contained
in the Official
Statement.
TheFinancial
Advisor
a financial
advisory,
~n~si~ntie~f
management
and
consulting
organization
and
isnot
engaged
inthe
business
ofisunderwriting
municipal
RATINGS
TheBondshavebeenrated"AAA"byFitchRatings
("Fitch"),
"Aaa"byMoody's
Investors
Service,
Inc.
("Moody's")and "AAA"by Standard&
Poor'S
Services,
a division
ofTheMcGraw-Hill
Companies,
Inc.
("Standard
drPoor's").TheCountyrequestedRatings
that
the
Bonds
be
rated
and
furnished
certain
information
to
Fitch,
Moody'sandStandard
&Poor's,including
certaininformation
thatis notincluded
inthisOfficial
Statement.
These ratings are not a recommendationto
ratingagencies
base
fheirratingson suchmaterials
andinformation,
as buy,sellorholdtheBonds.Generally,
wellasinvestigations,
studies
andassumptions
oftherating
agencies.Suchratingsmay be changedat
anytimeandnoassurance
canbegiventhattheywillnotberevised
downward
or withdrawn
entirelyby any or all
agencies,
if, in thejudgment
of anyor all,
circumstances
so warrant. Suchcircumstances of suchrating
mayinclude,
without
limitation,
change
in or unavailability
of
information
relatingto the County.
such
downward
revision
orwithdrawal
ofanyofsuch
ratings
may
have
an
adverseeffecton themarketpriceofAny
theBonds.
SALE AT COMPETITIVE BIDDING
The Bondswereawardedpursuantto electronic
competitive
biddingheld via Parityon Thursday,
September23, 2004to a groupof underwriters
Brothers
Inc.at a pricetotheCounty
thatresultsin
an underwriters'discountof $891,777from theledbyLehman
initialreoffering
pricesderived
fromtheyieldsshown
onthecover
page. Theunderwriters
havesuppliedthe information
as
to
the
initial
reoffering
yields
shown
on
the
coverpage.
Theunderwriters
mayofferto selltheBonds
prices derived
tocertain
andothers
atprices
lower
thantheinitialreoffering
fromtheyieldsshownonthecovei
page.dealers
CERTIFICATE
CONCERNING
OFFICIAL
STATEMENT
Concurrently
withthedeliveryof theBoncis,
oftheBoard
ofSupervisors
andtheCounty
Executive
oftheCountywillcertifythat,to thebestof theChairman
their
knowledge,
the
Official
Statement
did
not
asofitsdate,
anddoesnotasofthedateofdelivery
oftheBonds,containanyun~uestatement
of
a
material
fact
or
omit
to statea
materialfact whichshouldbe includedthereinfor
thepurpose
forwhichtheOfficial
Statement
is to beused,or
whichis necessaryin orderto makethe statementscontained
therein,
in
the
light
of
the
circumstances
underwhich
they weremade,not misleading.Such
certificate
will
also
state,
however,
that
the
Chairman
of
the
Boardof
Supervisors
and the CountyExecutive
of
the
County
did
not
independently
verify
the
information
indicated
inthis
OfficialStatementas having
been
obtained
or
derived
from
sources
other
than
the
County
and
its
officers
but
that
they have no reason to believe
thatsuchinformation
is notaccurate.
Any statements in this Official Statement
expressly so stated, are intended as such and not
involving
matters of opinion or estimates, whether or
not
as representations
of fact. Norepresentation
is madethatanyof the
estimates will be realized.
FUTURE FINANCIAL INFORMATION
On November 10, 1994, the Securities
and ExchangeCommission
("SEe? adoptedin finalformcertain
amendments(the "Amendments")to Rule 15c2-12underthe SecuritiesExchangeAct of 1934,as amended.In
general, the Amendmentsprohibit an underwriter
frompurchasingor sellingmunicipalsecuritiessold on or after
July 3, 1995,such as the Bonds,
unless
it
has
determined
thattheissuer
ofsuchsecurities
and/or
otherpersons
deemed to be material "obligatedpersons"have committedto provide(i) on an annualbasis,certainfinancial
information and operating data C~Annual
Reports"),and, if available,auditedfinancialstatements,
to each
Nationally Recognized
Municipal
Securities
Information
Repository
(a "NRMSIR~
and the relevantstate
information
depository(if any)and (ii) noticeof variouseventsdescribedin the Amendments,
if material("Event
Notices"),
to each NRMSTR or
theMunicipal
Securities
Rulemaking
BoardC'MSRB")
andto anysuchstate
informationdepository.EffectiveSeptember7, 2004with the concurrenceof the staffof the SEC,issuersand
"obligatedpersons"mayfile AnnualReports,EventNoticesand othernoticesrequiredby the Amendments
to be
filed with
fheNRMSIRs
andanyrelevant
state
information
depository
with
DisclosureUSA,
thecentral
postoffice
ofTheMunicipal
AdvisoIy
Council
ofTexas
("DisclosureUSA").
The County will covenant in
theContinuing
Disclosure
Agreement
(theformofwhich
appears
inAppendix
W) to be datedthe dateof deliveryoftheBonds
forthebenefit
oftheholders
oftheBondstoprovide
toeach
NRMSIRand to any Virginiainformationdepositorythat has beenformed,annually,not laterthanMarch31 of
each year commencingMarch 31,2005,
Annual
Reports
withrespect
toitself,asissuer.Similarly,
theCounty
will
with respect to the Bonds to each such NRMSIR or the MSRB and to any Virginia
provide Event Notices
information
depository.
Alternatively
to filingtheAnnual
Reports,
EventNotices
andothernotices
required
under
theNRMSIRs
andanyVirginia
information
depository,
theCounty
maymake
suchfilings
~'~PZj~sm~.fsus~h
The Countyhas not failedto complyas to its generalobligation
bondswithpreviousundertakings
with
regardtotheAmendments.
TheCounty'sfilingofitsannualreportandfinancial
statements
for
its
Integrated
Sewer
System's Enterprise Fund for the fiscal
yearendedJune30, 1999,pursuant
to an undertaking
madein connection
withits SewerRevenueBonds,Series1996,wasmadeapproximately
30 dayslate,and timelynoticeof suchlate
filing was givento each of the NRMSIRs. TheCounty'ssewerfilingsfor fiscalyears2000,2001,2002and2003
were timely made with each of the NRMSIRs.
APPROVALOF OFFICIAL STATEMENT
Theexecution
anddelivery
of thisOfficial
Statement
havebeendulyauthorized
bytheBoard
of
Supervisorsof the County.
BOARD OF SUPERVISORS
OF
FAIRFAX COUNTY, VIRGINIA
By: /s/ GeraldE. Connolly,Chairman
Qbr
Any statements in this Official Statement involving matters of opinion or estimates, whether or not
expressly so stated, are intended as such and not as representationsof fact. No representation is made that any of the
estimates
will be realized.
FUTURE
FINANCIAL
INFORMATION
On November 10, 1994, the Securities and Exchange Commission ~SEC") adopted in final form certain
amendments (the "Amendments") to Rule 15c2-12 under the Securities Exchange Act of 1934, as amended. In
gbneral, the Amendments prohibit an underwriter from purchasing or selling municipal securities sold.on or after
July 3, 1995, such as the Bonds, unless it has determined that the issuer of such securities and/or other persons
deemed to be material "obligated persons" have committed to provide (1) on an annual basis, certain financial
information and operating data ("Annual Reports"), and, if available, audited financial statements, to each
Nationally Recognized Municipal- Securities Information Repository (a "NRMSZR") and the relevant ·state
information depository (if any) and (ii) notice of various events described in the Amendments, if material ("Event
Notices"), to each NRMSIR or the Municipal Securities Rulemaking Board'("MSRB") and to any such state
information depository. Effective September 7, 2004 with the concurrence of the staff of the SEC, issuers and
"obligated persons" may file Annual Reports, Event Notices and other notices required by theAmendments to be
filedwith the NRMSIRs and any relevant state information depository with DisclosureUSA, the central post office
of The Municipal Advisory Coundil of Texas ("DDsccosureUSA").
The County will covenant in the Continuing Disclosure Agreement (the form of which appears in Appendix
VII)to be dated the date of delivery of the Bonds for the benefit of the holders of the Bonds to provide to each
NRMSIR: and to any Virginia information depository that has been formed, annually, not later than March 31 of
each year commencing March 31, 2005, -Annual Reports with respect·to itself as issuer. Similarly, the County will
provide Event Notices with respect to the Bonds to each such NRMSLR or the MSRB and ~to any Virginia
information depository. Alternatively to filing the Annual Reports, Event Notices and other notices required under
the Amendments with the NRMSIRS and any Virginia information depository, the County may make·such filings
with DisclosureUSA.
The County has not failed to comply as to its general obligation bonds with previous undertakings with
regard to the Amendments. The County's filing of its annual report and f~nancial statements for its Integrated Sewer
System's Enterprise Fund for the fiscal year ended June 30, 1999, pursuant to an undertaking made in Connection
with its Sewer Revenue Bonds, Series 1996, was made approximately 30 days late, and timely noticeof such late
filing was given to each of the NRMSIRs. The County's sewer filings for fiscal years 2000, 2001, 200i and 2003
were timely made with each of the NREVISIRs.
APPROVAL
OF
OFFICIAL
STATEMENT
The execution and delivery of this Official Statement have -been duly authorized by the Board of
Supervisors ofthe County.
BOARD
FAIRFAX
OF SUPERVISORS
C~UNTY,
VIR
By: /s/ Gerald E. Connol!y,
OF
.
Any statements in this Official
expressly sostated, are intended as such
Statement
involving
matters
ofopinion
orestimates,
whether
ornot
andnotasrepresentationsoffact.
Norepresentation
ismade
thatanyofthe
estimates will be realized.
'FZjTUbE
FINANCIAL
INFORMATION
On November 10, 1994, the Securities and
Exchange Commission C'SEC'?adoptedin final
form
amendments
(the"Amendments'?
to Rule
B
dertain
15c2-12
under
theSecurities
Exchange
Actof1934,
asamended.
In
general,
theAmendments
prohibit
anunderwriter
frompurchasing
orselling
municipal
securities
soldonorafter
July3, 1995,sdchas the Bonds,unlessithas
thattheissuer
ofsuch
securities
and/or
other
persons
deemedto be material
"obligated
persons" determined
havecommitted
provide
(i)onanannual
basis,
certain
financial
information
andoperating
data("Annual
Reports"),
and,to
if available,
audited
financial
statements,
to each
Nationally
Recognized
Municipal
Securities
Information
(4 "NRMSIR")
andthe relevant
state
information
depositor)
(ifany)and(ii)notice
ofvarious Rep~sitory
events
described
in
the
Amendments,if
material
("Event
Notices"),
to eachMIMSIR
or theMunicipal
Securities
Rulemaking
BoardC'MSRB")
andto anysuchstate
information
depository.~fective
September
7,2004
with
theconcurrence
ofthestaff
oftheSEC,
issuers
and
"obligatedpersons"may file Annual
Reports,
Event
Notices
andother
notices
required
bytheAmendments
tobe
filed~ith
theNRMSIRs
andanyrelevant
state
information
depository
withDisclosureUSA,
thecentral
postoffice
ofThe
Municipal
Advisory
Coundil
ofTexas
C'DisclosureUSA").
TheCounty
willcovenant
intheContinuing
Agreement(the
form
ofwhich
appears
inAppendix
VII)tobedatedthedateof delivery
of theBondsDisclosure
NRMSIR:
andto anyVirginiainformation
eachyearcommencing
March
forthebenefit
oftheholders
oftheBonds
toprovide
toeach
depository
thathasbeenformed,
annually,
notlater
thanMarch
31of
31,2005,Annual
Reports
with
respectto
itself,
asissuer.
Similarly,
theCounty
will
provide Event Notices with respect to
the Bonds to each Such NRMSIR or the
Alternatively
tofilingtheAnnual
MSRB
and ~to any Virginia
Reports,
Event
Notices
andother
notices.required
under
the
Amendments
withtheNRMSIRS
andanyVirginia
with DisclosureUSA.
iinformation
depository,
theCounty
maymake
suchfilings
TheCounty
hasnotfailedto complyas to
general
obligation
bonds
withprevious
undertakings
with
regard
totheAmendments.
TheCounty's
filing
ofitsits
annual
report
and
financial
statements
for
its
Integrated
Sewer
System's
Enterprise
Fund
forthefiscal
yearended
June30,
pursuant
toanundertaking
madeinconnection
withitsSewerRevenue
Bonds,Series1996,wasmade 1949,
approximately
30
days
late,
and
timely
notice
ofsuchlate
filing
wasgiven
toeach
oftheNRMSIRs.
TheCounty's
sewer
filings
for
fiscal
years
2000,
2001,
200i
and2003
weretimelymadewitheachof the NRMSIRs.
APPROVAL
OF OFFICIALSTATEMENT
The execution and
Supervisorsofthe County.
delivery
ofthisOfficial
Statement
havebeendulyauthorized
bytheBoard
of
BOARDOF SUPERVISORSOF
FAIRFAX
By: /s/ GeraldE. Connol!y,
1
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N
MONTGOMERY
COUNTY,
MARYLAND
LL)UDOUN COUNTY,
VIRGINIA
DISTRICll~of
FAIRFAX
CCKINTY.
·
CQLCIMBIA
PRINCE
GEORGE'S
COUNTY
MARYLAND
PRINCEWILLIAM
COUNTY,
VIRGINIA
CHARLES
STAFFORD
COUNTY,
MARYLAND
COUNTY
VIRGINIA
)CATIONS OF POLITICAL JURISDICTIONS
THE WASHINGTON METROPOLITAN
AREA
II-i
page
intentionally
left
blank.
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117
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FairCake Hospital
Fai~ax
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MountVemonHospital
RestonHospitel
Oovenmental
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Commercial
F~r~
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MasonGovenmentelCentK
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Bells~ Cmu~eds
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Center
WartSp~nglleld
Go~r~meotal
Center
Centreville
Fat Belvlor
Fmneade
Hemdon
Mdean
M~nl(ield
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~V
KPMG
LLP
2001M Street. NW
\rJashington. DC 20036
IndependentAuditors'Report
The Board of Supervisors
Countyof Fairfax,Virginia:
We haveauditedthe accompanying
financialstatements
of thegovernmental
activities,
thebusiness-type
activities,the aggregatediscretelypresented
component
units,eachmajorfund,andthe aggregate
remainingfundinformationof the Countyof Fairfax,Virginia(theCounty),
as of andfortheyearended
June30, 2003,whichcollectivelycomprisethe County'sbasicfinancialstatements.Thesebasicfinancial
statements are the responsibility oftheCounty
ofFairfax's
management.
Ourresponsibility
istoexpress
opinions on these basic financial
of the discretely
(FCRHA), a
statementsbasedon our audit.We did not auditthe financialstatements
presented
component
unitsoftheFairfax
County
Redevelopment
andHousing
Authority
discretely presented
respectively, of total assets and
componentunit of the County,representing2.26%and .28%,
revenues
of the aggregate discretelypresented
component
units. Those
financialstatementswereauditedby otherauditorswhose
reportsthereonhavebeen furnishedto us, and
our opinionon the County'saggregatediscretely
presented
component
unitsfinancialstatements,
insofar
as
it relates
totheamounts
included
forthediscretely
presented
component
unitsofFCRHA,
isbased
solely on the reports of the other auditors.
~e conducted
ourauditinaccordance
withauditing
standardsgenerally accepted in the United States of
America.
Thosestandards
requirethatweplanandperformthe audit to obtain reasonableassuranceabout
whether
thebasicfinancial
statements
arefreeofmaterial
misstatement.
Allfinancial
statements
of the
discretelypresentedcomponentunitsof theFCRHA
wereaudited
in accordance
withauditing
standards
generally accepted in the United States of America. An audit includesexamining,on a test basis, evidence
supporting the amounts and disclosures in the basic
financialstatements.
Anauditalsoincludesassessing
the accountingprinciplesused and significant
estimates
madebymanagement,
as wellasevaluating
the
overallbasic financia~statementpresentation.We believethatour auditand the reportsof the other
auditorsprovidea reasonable
basisforouropinion.
In our opinion, based on our audit and the reportsof otherauditors,the basicfinancialstatementsrefe
to abovepresentfairly,in all materialrespects,the respective
financialpositionof the governmental
activities, the business-typeactivities, the aggregate
discretely
presentedcomponent
units,eachmajor
fund,andthe aggregateremainingfundinformation
oftheCountyofFairfax,Virginia,
asofJune30,2003,
and the respective changes in financial
positionandcashflows.whereapplicable,
thereoffortheyearthen
ended in conformity withaccounting
principles
generally
accepted
intheUnitedStatesofAmerica.
~p~c~~ U-P
October 31, 2003
1111..__.~,.,..~._,.,_~__
1·-1
~PMGLLP.I U 5 CmiledIlabl*yP~nnerrt~ip..rme V 5
OFFAIRFAX,VIRGINIA
Statement
of Net Assets
June 30, 2003
Primary Government
Governmental
Total
Business-Type
Activities
Activities
Primary
Government
ASSETS
Equity in pooled cash and temporary
Cash
investments
693,718,244
79,253,749
772,971,993
22,998,597
22,998,597
61,091
24,531,053
716,067
in banks
Investments
Receivables
(net of allowances):
Accounts
Accrued interest
Property
24,531,053
654,976
taxes:
Delinquent
Not yet doe
Business license taxes - delinquent
Loans
Notes
Other
Due frorn intergovernmental units (net of allowances):
Property
tax
Due from primary
6,507,178
176,163,000
59,590,714
19,093,271
1,765,166
168,664
3,021,255
1,581,400
1,765,166
(168,664)
327,813
1,549
3,349,068
1,5821949
assets:
Equity in pooled cash and temporary
Cash with fiscal agents
Certificates of deposit - performance
investments
41,871,927
1,737,032
821,199
bonds
Investments
held
6,507,178
176,163,000
40,497,443
government
Due from component units
Interfund receivables
Inventories of supplies
Other assets
Land
19,492,398
1,704,872,746
2,151,125
15,530,000
4,960,234
15,152
relief:
Delinquent
Not yet due
Other
Restricted
19,492,398
1,704,872,746
2,151,125
15,530,000
4,960,234
15,152
for
76,326,342
140,8531415
24,767,970
182,725,342
1,737,032
821,199
101,094,312
sale
Capital assets:
Non-depreciable:
Land
Construction in progress
327,546,804
21,741,560
17,511,358
128,723,901
223,426,139
39,451,246
9,951,322
345,058,162
150,465,461
Depreciable:
Equipment
Library collections
Purchased capacity
Buildings and improvements
Infrastructure
Accumulated depreciation
Accumulated amortization
785,439,035
415,525,167
(458,710,126)
Deferred bond issuance costs (net of amortization)
Total assets
See accompanying
notes to the financial
8
1,743,105
4,172,549,464
statements.
IV-2
(316,660,990)
(53,575,391)
233,377,461
39,451,246
568,0801954
1,535,234,096
415,525, 167
(775,371,116)
(53,575,391)
1,044,849
1,392.059,855
2,787,954
5,564,609.319
568,080,954
749,795,061
1
EXB]BIT A
Total
Component
Total
Reclassifications
Reporting
ASSETS
290,846,269
1,0631818,262
Equity
inpooledcashandtemporary
investments
7,057,118
7,057,118 Cashinbanks
22,998,597
Investments
Receivables (net of allowances):
12,253,343
76,768
-
36,784,396
792,835
Accounts
Accrued interest
Property
19,492,398
1,704,872,746
Notyetdue
2,151,125
Business license taxes - delinquent
15,530,000
8,295,701
462,918
13,255,935
478,070
Loans
Notes
Other
Due from intergovernmental units (net of allowances):
Property tax relief:
Delinquent
6,507,178
176,163,000
30,799,528
Notyetdue
90,390,242
6,730,339
taxes:
Delinquent
Other
6,730,339 Due from primarygovernment
1,765,166
Due from component units
Interfund
4,563,916
receivables
7,912,984 Inventoriesof supplies
618,716
-
15,225,912
10,145,396
652,676
-
2,201,665
Other assets
Restricted
18,015,174
119,109,486
2,595,172
assets:
197,951,254 Equityin pooledcashand temporaryinvestments
11,882,428 Cashwithfiscalagents
1,473,875 Certificates
of deposit- performancebonds
21595,172
Investments
Land held for sale
Capital
assets:
Non-depreciable
331,133,123
676,191,285
309,594,921
460,060,382
:
Land
Construction
in progress
Depreciable:
152,484,434
24,385,069
1,904,795,887
·
385,861,895
63,836,315
Equipment
Librarycollections
568,080,954
Purchased capacity
3,440,029,983
415,525,167
(780,680,207)
(1,556,051,323)
(53,575,391)
478,298
2,350,530,471
Buildingsand improvements
Infrastructure
Accumulated
depreciation
Accumulated
amortization
3,266,252Deferredbondissuancecosts(net of amortization)
7,915,139,790
Totalassets
continued
1V-3
OFFAIRFAX,VIRGINIA
Sbtement
of Net Assets
June 30, 2003
Primary Government
Governmental
Business-type
Activities
Acb'vities
Total
Primary
Government
UABIUTIES
Accounts payable and accrued liabilities
Accrued salaries and benefits
g
46,758,918
28,142,846
Contractretainages
Accruedinterest payable
Due to primary
2,610,056
9,545,799
53,200,779
28,802,837
3,737,361
4,462,321
6,347,417
14,008,120
government
Due to component units
Matured bond principal and interest payable
Deferred
6,441,861
659,991
1,866,247
174,455
1,866,247
174,455
1,905,968,500
1,905,968,500
revenue:
Property taxes not yet due
Other
Performanceand other deposits
Long-term
31,155,471
73,063,597
liabilities:
Portion due or payable
within one year:
Generalobligationbonds payable, net
Revenuebonds payable, net
Notes
31,155,471
73,063,597
136,011,870
4,553,476
11,777,985
136,011,870
16,331,461
payable
Compensated absences payable
Landfillclosure and postclosure obligation
47,010,116
25,357,048
Obligationsunder capitalleases
Insurance and benefitclaimspayable
Other
8,234,068
14,721,454
2,842,789
1,149,396
48,159,512
25,357,048
8,234,068
14,721,454
2,842,789
Portion due or payable after one year:
Generalobligationbonds payable, net
Revenuebonds payable, net
Notes
1,464,798,886
173,692,445
1,464,798,886
635,325,502
payable
Compensatedabsences payable
Landfillclosureand postclosureobligation
Obligationsundercapital leases
28,812,652
37,379,250
37,904,218
Insurance and benefit claims payable
13,618,677
Other
Totalliabilities
NET
461,633,057
704,468
29,517,120
37,379,250
37,904,218
13,618,677
7,841,477
4,102,064,315
490.566,440
7,841,477
4,592,630.755
932,499,218
651,624,011
1,584,123,229
134,216,343
5,976,956
134,216,343
ASSETS
Invested in capitalassets, net of related debt
Restricted
for:
Grant programs
Sewer improvementsand nitrificationfacilities
5,976,956
Repair and replacement
Communitycenters
5,152,731
5,152,731
Housing
Capitalprojects
Debtservice
18,200,000
Unrestricted
(deficit)
Totalnet assets
See accompanying
notes to the financial
8
(891.343,756)
70,485,149
statements.
IV-4
10,196,204
18,200,000
10,196,204
1_95.456,857
901,493,415
(785,886,899)
971,978,564
-
''
Aconclude
Total
Total
Component
Units
Reclassifications
Reporting
(See Note A-12)
Entity
LIABIUTIES
49,554,037
75,249,165
102,754,816
104,052,002
9,973,632
16,321,049
Contract
14,529,370
Accrued interest payable
521,250
1,765,166
-
1,765,166
1,866,247
174,455
Accounts payable and accrued liabilities
Accrued salaries and benefits
Due to primary government
Due to component units
Matured bond principal and interest
Deferred
1,905,968,500
12,014,572
1,345,858
-
43,170,043
74,409,455
136,011,870
790,154
24,806,356
17,314,095
-
9,647,165
21,400,318
133,945
-
-
18,331,888
10,741,077
-
17,074,839
361.980.999
(1,044,623,708)
taxes
Long-term liabilities:
Portion due or payable within one year:
General obligation bonds payable, net
17,121,615
24,806,356
65,473,607
Revenue bonds payable, net
Notes payable
Compensated absences payable
25,357,048
Landfill closure
17,881,233
36,121,772
Obligations under capital leases
Insurance and benefit claims payable
2,976,734
37,379,250
Landfill closure
56,236,106
24,359,754
Obligations under capital leases
Insurance and benefit claims payable
24.916,316
4,954.611,754
ASSETS
Invested in capital assets, net of related debt
Grant
5,152,731
120,659,273
1,988,549.472
1,059.149.620
-
improvements
Community
centers
Housing
-
Capital projects
Debt service
393.921,994 UnresWded(deficit)
2.960_,528.036Totalnet assets
IV-5
and nitrification
Repair and replacement
10,821,684
18,200,000
11,254,434
for:
programs
Sewer
700,000
(14,525,912)
-
obligation
Total liabilities
134,216,343
14,525,912
1,058,230
and postclosure
Other
Restricted
-
obligation
Revenue bonds payable, net
Notes payable
Compensated absences payable
5,976,956
10,821,684
and postclosure
Other
Portion due or payable after one year:
General obligation bonds payable, net
659,350,704
56,277,744
40,531,656
2,380,283,894
700,000
not yet due
Other
Performance and other deposits
NET
1,840,784,373
payable
revenue:
Property
1,464,798,886
24,025,202
56,277,744
11,014,536
retainages
facilities
OF FAIRFAX,VIRGINIA
Statement
of
For the f~cal year ended June 30, 2003
Program
Charges
Operating
for
Functions/Programs
Primary
Expenses
Revenues
Grants
Services
and
Contributions
Capital
Grants
and
Contributions
government:
Goveinmental
activities:
General government
3udicial adminis~ation
administration
Public safety
Public works
Health and welfare
Community development
Parks, recreation,
and cultural
Education - for Public Schools
Interest on long-term debt
Total governmental activities
Business-type
118,511,161
35,243,062
5,112,194
15,968,676
1,941,377
20,762,866
414,698,922
34,072,120
35,205,772
132,457,898
383,744,665
134,530,817
118,518,084
1,308,402,963
81,994,507
66,543,218
43,281,914
29,420,854
6,051,431
2,728,102,079
200.450.407
2,540,565
14,673,013
12,345,534
3,051,984
203,931,755
32,611.096
activities:
Public works - Sewer
Total business-type
126.953,197
126 953 197
activities
108,149,558
108,149,558
Totalprimarygovernment
2,855,055,276
Component
units:
Public Schools
Redevelopment
and Housing Authority
Park Authority
1,658,519,296
63,365,305
63,500,701
Economic
9,687,204
129,981,338
5,210,353
1,142,845
Development
Totalcomponentunits
Authority
7 035
308,599,965
77,510,685
19,058,739
27,165,350
203,931,755
102,397,834
37,604,475
4,681,750
3,012,835
92,797
123,734,774
140.002,309
7.787.382
revenues:
Taxes:
Real
property
Personal
property
Business
licenses
Local
sales
and
Consumers
Motor
use
utility
vehicle
decals
Recordation
Occupancy,
Grants
and
tobacco,
contributions
and
other
not
restricted
tospecificprograms
Revenue from the use of money and property
Share of Commonwealth's
lottery proceeds
Revenue from primary government
Other
Special item - gain on sale of land
Total general revenues
and special
Change
in net
~uly 1 2002
Net
~une
See
item
assets
Net assets
assets.
39,855,948
177
B 1,792,420,479
General
7,244,852
7,244,852
30.
accompanying
2003
notes
IV-6
to the
financial
statements.
A-i
Net (Expense) Revenue and Changes in Net Assets
Total
Governmental Business-Type TotalPrimary
Component
-·-·-
·--·---··-Ir·-J·-···~
Primary
government:
Governmental
activities:
(111,457,590)
(111,457,590)
General
government
1,488,480
1,488,480
3udicial
administration
(342,880,465)
(342,880,465)
Public safety
(41,554,463)
(41,554,463)
(210,481,413)
(210,481,413)
(87,554,076)
Publicworks
Healthand welfare
(87,554,076)
(111,323,808)
Community development
Parks, recreation,
and cultural
(111,323,808)
(1,305,350,979)
(1,305,350,979)
(81,994,507)
Education
(81,994,507)
(2,291,108,821)
Interest
(2.291,108.821)
- for Public
on long-term
(11.558,787)
Schools
debt
Totalgovernmental
activities
Business-type
-
administration
111,558,787)
- ·-·---~
(2,291,108.821)
(11.558,787)
(2,302,667,608)
activities:
Publicworks- Sewer
Totalbusiness-type
activities
- Total
primary
government
Component
(1,473,929,027)
(3,689,256)
(36,242,554)
units:
Public Schools
Redevelopmentand HousingAuthority
Park Authority
Economic Development Authority
General
revenues:
Taxes:
1,396,210,347
273,447,219
94,744,725
143,641;853
85,892,727
1,396,210,347
273,447,219
94,744,725
143,641,853
85,892,727
Real property
Personal property
Business
Local
Consumers
and
19,052,623
19,052,623
Motor
27,044,633
Recordation
17,788,607
17,788,607
4,365,535
197,619,418
26,207,247
281,543,994
1,226,913
4,773,038
1,362,783,747
9,666,618
?-----
___
3,735,683 (7,193,252)
~6
908,686,667
·-·---
use
utility
27,044,633
1971619,418
21,841,712
_
licenses
sales
vehicle
decals
Occupancy, tobacco,
Grants and contributions
to specific programs.
andother
not restricted
Revenuefrom the use of money and property
Share of Commonwealth's lottery proceeds
Revenue from primary government
Other
Special
item- gainonsaleofland
. - .---
Total general revenues and special item
(3,457,569) 139,098,296 Changein net assets
975,436,133 1,849,451,176Netassets,3uly1, 2002
rV-7
OFFAIRFAX,VIRGINIA
Balance
Governmental
June
EXHIBITA-2
Sheet
Funds
30, 2003
Nonmajor
Total
Governmental
Governmental
Funds
Funds
254,375,448
358,682,305
613,057,753
13,296,926
354,009
11,095,215
290,306
24,392,141
644,315
General
Fund
ASSETS
Equityin pooledcash and temporary investments
Receivables
9
(net of allowances):
Accounts
Accrued interest
Property
taxes:
Delinquent
Notyetdue
Businesslicensetaxes - delinquent
Loans
No~s
19,492,398
1,704,872,746
2,151,125
15,530,000
4,960,234
19,492,398
1,704,872,746
2,151,125
15,530,000
4,960,234
14,935.504
1,591,703
47,771
6,507,178
176,163,000
40,497,443
1,765,166
3,658,653
1,420,320
101,671
Due from intergovernmental units (net of allowances):
Property
tax relief:
Delinquent
Notyetdue
Other
Due from componentunits
Interfund receivables
Inventories of supplies
Other assets
Resbicted
6,507,178
176,163,000
25;~61,939
173,463
3,658,653
1,420,320
53.900
assets:
Equityin pooledcash and temporary investments
Cash withfiscal agents
Certificatesof deposit - performancebonds
584,032
821,199
Investments
-
Totalassets
UABIUTIES
AND
FUND
41,871,927
966,000
41,871,927
1,550,032
821,199
76.326,342
76.326.342
$
2.209,486,336
526,297.307
2.735.783.643
g
26,425,211
22,920,261
16,256,815
4,468,058
2,610,056
1,028,167
94,937
3,583,846
174,455
42,682,026
27,388,319
2,610,056
1,028,167
1,866,247
3,583,846
174,455
33,422,341
1,905,968,500
69,671,452
BALANCES
Liabilities:
Accountspayable and accrued liabilities
Accruedsalaries and benefits
Contract retainages
Accruedinterest payable
Due to componentunits
Interfund payables
Maturedbond principaland interest payable
Deferred
1,771,310
-
revenue:
Property taxes not yet due
Other
Performance
and~other
deposits
1,905,968,500
36,249,111
·
Total liabilities
Fund
10.368.767
2.056.029,223
72.007.442
2.128,036.665
731063,597
19,032,301
1,420,320
43,501,693
20,490,234
103,220,585
62,533,994
1,420,320
20,490,234
103,220,585
181,380,468
16,897,074
133,004,492
181,380,468
16,897,074
balances:
Reserved
for:
Encumbrances
Inventories of supplies
Long-termreceivables
Certain capitalprojects
Unreserved,
reported
in:
General fund
Special revenue funds
Debt service funds
Capital
_
_ 62,694,830
projects
133,004,492
funds
88.799.811
_ _ Totalfu_nd
balances
Totalliabilities
andfundbalances
See accompanying notes to the financial statements.
153.457,113
8
2,209.486.336
IV-8
88.799.811
454,289.865~--607~746~978
526,297.307
2.735.783.643
continued
OF FAIRFAX,VIRGINLA
Reconciliation
of the Balance
Governmental
Funds
EXRIBIT A-2
Sheet to the Statement
of Net Assets
concluded
June 30, 2003
Fund balances
Amounts
-Total
reported
Capital
funds
for governmental
assets
in the
governmental
used
g
activities
in governmental
in the statement
fund activities
are
of net assets
not financial
(Exhibit
resources
A) are different
and,
therefore,
607,746,978
because:
are not reported
funds:
Non-depreciable
assets:
Land
$
Cons~uction
Depreciable
325,608,116
in progress
21,741,560
assets:
Equipment
Library
161,821,164
collections
Buildings
39,451,246
and improvements
769,836,885
Infras6ucture
Total capital
415.525.167
assets
1,733,984,138
Less accumulated
depreciation
(412.297.905)
Some of the County's
receivables
will not be collected soon enough
and, therefore,
are reported
as deferred
revenue
in the funds:
Delinquent
taxes
Sales
to pay for the current
8
2,156,644
11,202,423
Other
471.803
Other long-term
not reported
assets are not available
in the funds.
to pay for current
period
expenditures
as expenditures
Internal
goods
service
funds
are used
and liabilities
of net
by management
of the internal
38,515,981
and therefore,
are
1,478,423
Costs incurred from the issuance
of long-term
debt are recognized
but are deferred
in the government-wide
statements.
statement
expendi~res
24,685,111
license
and use taxes
The assets
period's
(net of allowances):
Property
Business
1,321,686,233
service
to provide
funds
1,743,105
certain
are
in the fund statements,
included
and services
in governmental
to governmental
activib~es
funds.
in the
assets.
Assets:
Current
assets
Capital
4
82,898,394
assets
79,145,813
Less accumulated
depreciation
(46,412,221)
Liabilities
(36,025,203)
Long-term
liabilities related to governmental
fund activities
and, therefore,
are not reported
in the funds:
General
Revenue
obligation
bonds
Compensated
bonds
payable,
absences
Landfill closure
payable,
net
are not due and payable
8
(73,159,195)
obligation
(62,736,298)
(46,138,286)
Other
(10,684,266)
Accrued interest on long-term
of governmental
period
(178,245,921)
payable
Obligations under capital leases
Net assets
in the current
(1,600,810,756)
net
and postclosure
79,606,783
debt
18.517,632)
activities
(1.980,292,354)
B
IV-9
70,485,149
OFFAIRFAX,VIRGINIA
EXHIBITA-3
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental
Funds
For the f~eal year ended June 34 UH)3
General
Fund
Nonmajor
Governmental
Funds
Total
Governmental
Funds
~EVENUES
Taxes
Permits, privilege fees, and regulatory licenses
Intergovernmental
Charges for services
Fines and forfeitures
Developers' contributions
Revenue from the use of money and property
Recovered costs
Local mab~hinggrants
8
2,041,189,079
27,781,451
322,110,298
40,647,654
11,059,673
21,462,491
5,273,489
Gifts,donations,and conbibutions
920.120
Total revenues
13,595,615
10,843,786
93,649,463
116,956,434
6,200
5.758,057
3,873,664
7,207,526
7,597,376
294.383
2,054,784,694
38,625,237
415,759,761
157,604,088
11,065,873
5,758,057
25,336,155
12,481,015
7,597,376
1,214.503
2,470,444.255
259.782.504
2,730.226.759
94,946,860
32,445,476
374,718,524
58,241,853
237,431,727
49,793,866
72,052,471
1,168,875,267
13,965,809
1,642,065
30,875,394
98,889,251
143,083,415
72,271,160
37,467,072
138,097,076
108,912,669
34,087,541
405,593,918
157,131,104
380,515,142
122,065,026
109,519,543
1,306,972,343
241,482
6,997
2,734,567
206,676
78,573
21,407
6,153,375
2,194,716
411,944
20,820,903
3,846,477
1,603,049
9,912,626
4,578,204
1,873,190
2,436,198
418,941
23,555,470
4,053,153
1,681,622
9,934,033
10,731,579
1,873,190
Principal retirement
929,360
139,634,724
140,564,084
Interest and other charges
233,385
EXPENDTTURES
Current:
General government administration
3udicialadministration
Publicsafety
Public works
Health and welfare
Community development
Parks, recreation, and cultural
Education - for Public Schools
CapiLalou~ay:
General government adminisb`ation
~udicialadministration
Publicsafety
Publicworks
Health and welfare
Community development
Parks, recreation, and cultural
Education - for Public Schools
Debt
service:
Total exPenditures
Excess
(deficiency)
2.099.111.866
of revenues
SOURCES
81.949,450
2.901.995.006
371.332,389
/543.100.6361
(171.768.247~
(USES)
Transfers in
3,925.732
Transfersout
(349,294,037)
General obligation bonds issued
Lease revenue bonds issued
Capitalleases
Refunding bonds issued
351,542,120
(6,373,815)
355,467,852
(355,667,852)
206,884,788
75,625,920
1,077,364
183,893,333
206,884,788
75,625,920
11565,293
183,893,333
(344.880.376)
(183.541.600)
629.108,110
(183.541.600)
284,227.734
26,452,013
126,793,442
104,207,474
350,082,391
487,929
Paymentsto refundedbond escrowagent
Totalother financingsources (uses)
SPECIAL
802.883,140
over (under)
expenditures
OTHER FIHANCTNG
81,716.065
ITEM
Proceedsfrom the sale of land
18.200.000
Net change in fund balances
Fund balances, 3uly 1. 2002
Increase in reserve for inventoriesof supplies
Fundbalances.3une30. 2003
211.658
8
See accompanying notes to the financial statements.
153,457.113
-
454.289.865
18.200.000
130,659,487
476,875,833
211.658
_ 607,746.978
continued
IV-IO
OFFAIRFAX,VIRGINIA
ExIIIs~ A-3
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances
to the Statement
concluded
ofActivities
Governmental
Funds
For the f~eal year ended June 30, 2003
Net change in fund balances - Total governmental funds
d
130,659,487
Amounts reported for governmental activities in the statement of activities (Exhibit A-i) are different because:
Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of
capital assets is allocated over their estimated useful lives and reported as depreciation expense.
Capital outlays
54,684.186
Less depreciation expense
(51,276,383)
407,803
In the statement of activities, the gain or loss on the disposition of capital assets is reported. However, in the
governmental funds, only the proceeds from sales are reported, which increase fund balance. Thus, the
difference is the depreciated cost of the capital assets disposed.
(6,702,888)
Donations of capital assets increase net assets in the statement of activides, but do not appear in the
governmental funds because they are not financial resources.
17,568,039
Some revenues will not be collected for several months after the fiscal year ends, hence, they are not considered
'available" revenues and are deferred in the governmental funds. Deferred revenues increased (decreased)
by this amount
Delinquent
this year:
taxes:
Property
8
Business license
2,062,788
(262,260)
Sales and use taxes
and other taxes
1,237.512
Recovery from contractor
(2,000,000)
Other
89,798
1,127,838
The issuance of long-term debt is reported as financing sources in the governmental funds and thus, increase
fund balance. In the government-wide statements, however, issuing debt increases long-term liabilities
in the statement of net assets and does not affect the statement of activities. The following were issued:
Sen'es 2003A Refunding Bonds
Series 20038 General Obligation Bonds
EDA Lease Revenue Bonds - Laurel Hill Projects
(183,893,333)
(206,884,788)
(75.625,920)
Principalamounts of new capital leases
(1,565,293)
(467,969,334)
The net amount of costs incurred from the issuance of long-term debt are recognized as expenditures in the
fund statements, but are deferred in the government-wide statements.
913.112
Repayment of the principal amounts of long-term debt is reported as an expenditure or as an other financing use
when debt is refunded in governmental funds and thus, reduces fund balance. However, the principal payments
reduce the liabilities in the statement of net assets and do not result in an expense in the statement of activities.
Principal repayments of mab~red bonds and loans
Payment
to escrow
agent
to refund
bonds,
g
134,179,425
less
81,307,225 reported as interest expense
182,234.375
Principalpayments of capital leases
6.384.659
322,798,459
Interest on long-term debt is reported as an expenditure in the governmental funds when it is due. In the statement of
activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. This timing
difference
in interest
reporting
is as follows:
Accrued interest on bonds and loans
Accrued
interest
$
on capital leases
(166,906)
118,358
Other
307.806
259,258
Under the modified accrual basis of accounting used in the governmental funds, expenditures for the following are not
recognized until they mature. In the statement of activities, however, they are reported as expenses and liabilities as
they accrue.
The timing differences
Landfill closure
and postclosure
are as follows:
costs
$
Compensated absences
Other
3,033.434
(3,010.289)
(1,700,380)
(1,677,235)
Internal service funds are used by management to provide certain goods and services to governmental funds.
The change in net assets is reported with governmental activities.
Changein net assets of governmentalacbivib'es
6,351.144
8
IV-ii
3,735.683
Statement
of Net Assets
Propriet~I·g Funds
June 30, 2003
Business-Type
Adivities-
Governmental
Enterprise Fund
Integrated
Sewer
System
Activities Internal
Service
Funds
ASSETS
Current
assets:
Equity in pooled cash and temporary investments
79,253,749
Investments
19,298,597
Accounts receivable
138,912
Accruedinterest receivable
61,091
Due from intergovernmental units (net of allowance)
Interfund receivables
Inventories of supplies
Other assets
Totalcurrent assets
Noncurrent
Restricted
10,661
19,093,271
327,813
299,089
1,600,935
1,549
118,036,070
1,306
82,711.394
assets:
assets:
Equity in pooled cash and temporary investments
140,853,415
Cash withfiscalagents
187,000
Investments
24 767 970
Totalrestrictedassets
Capital
80,660,491
165,621,385
assets:Land
17,511,358
187,000
1,938,688
Construction in progress
128,723,901
Equipment
Purchased capacity
9,951,322
568,080,954
61,604,975
749,795,061
(316,660,990)
(53.575.391)
1,103,826,215
15,602,150
(46,412,221)
Buildingsand improvements
Accumulateddepreciation
Accumulatedamortization
Totalcapitalassets, net
Other
noncurrent
Investments
3,700,000
Deferredbondissuancecosts(netof amortization)
1,044.849
Totalother noncurrentassets
Totalnoncurrentassets
Totalassets
See accompanying
32,733,592
assets:
notes to the financial
-
4,744.849
$
statements.
IV-12
1,274,192,449
1,392,228,519
32,920.592
115,631,986
A-4
Business-Type
Activities-
Governmental
Enterprise Fund
Integrated
Sewer
Activities Internal
Service
UABIUTIES
Current
liabilities:
Accountspayable and accrued liabilities
Accruedsalaries and benefits
$
Contract retainages
6,441,861
659,991
3,737,361
Interfundpayables
168,664
Accrued interest payable
Revenue bonds payable, net
1,149,396
Insurance and benefit claims payable
28,397,579
21,394,368
liabilities:
Revenue bonds payable, net
461,633,057
Compensatedabsences payable
Insurance
and benefit
704,468
claims payable
in capital assets,
net of related
1,0121158
13,618,677
Totalnoncurrentliabilities
Totalliabilities
Restricted
1,651,415
14 721 454
Totalcurrentliabilities
Invested
190,080
4,462,321
11,777,985
Compensatedabsences payable
Noncurrent
4,076,892
754,527
462,337,525
490,735,104
debtNETASSETS
651,624,011
14,630i835
36,025,203
32,733,592
for:
Sewer improvements and nitrificationfacilities
Debtservice
Unrestricted
Totalnet assets
134,216,343
10,196,204
8
--~-
IV-13
105.456,857
901,493,415
46,873,191
79,606,783
OFFAIRFAX,
VIRGINIA
EXHIBIT
A-5
Statement of Revenues, Expenses, and Changes in Net Assets
proprietary Funds
For the fiscal year ended June 34 2003
Business-Type
Adivities-
Enterprise
Integrated
Fund
Sewer
System
OPERATING
Sales
Governmental
Activities Internal Service
Funds
REVENUES:
of services
9
81,506,869
Charges for services
Other
140,333,558
172.504
Total operating revenues
OPERATING
81,506,869
140,506,062
EXPENSES:
Personnel
services
Materials and supplies
Equipment operation and maintenance
Risk financing and benefit payments
Depreciation and amortization
Professional
consultant
18,666,356
21,1231809
11,649,401
3,029,100
31,622,292
63,467,509
9,209,347
32,043,471
and contractual
services
40,262,876
Other
6,396,452
142,696
Total operating expenses
Operating income (loss)
NONOPERATING
102,622,104
(21,115,235)
134,991,205
5.514,857
REVENUES (EXPENSES):
Availability fees
Intergovernmental
revenue
26,642,689
481,255
4,319,270
382,669
Interest expense
Amortization expense for bond issuance costs
Gain on disposal of capital assets
(24,251,996)
(79,097)
46.265
253,618
Interest
revenue
Total nonoperating revenues (expenses)
7,158,386
Income (loss) before con~ibutions and transfers
Capital contributions
Transfers
(13,956,849)
6,763,597
in
1,900,000
Transfers out
Change in net assets
Total net assets, ~uly i, 2002
Totalnet assets,~une30. 2003
See accompanying
636,287
6,151,144
notes to the financial
9
statements.
IV-14
(7,193,252)
908,686,667
(1,700,000)
6,351,144
73,255.639
901,493,415
79,606,783
OFFAIRFAX,
VIRGINIA
Statement
ErwsrTA-6
of Cash Flows
Proprietary
Funds
For the f~cal year ended June 30, 2003
Business-Type
Activities-
Enterprise
Governmental
Fund
Integrated
Sewer
Activities Internal
Service
CASH FLOWS FROM OPERATING ACTMTIES
Receiptsfromcustomersand users
Receipts from interfund
services
$
81,044,506
provided
140,567,144
Paymentsto suppliersand contractors
(50,555,642)
Payments
to employees
(18,535,324)
Claims and benefits
Payments
paid
for interfund
services
used
Net cash provided by operating activities
Payment
of loan to General
to other
(21,008,575)
(60,776,340)
CASH FLOWS FROM NONCAPTTAL FINANCING
Transfers
(14,244,248)
11 a~? ~ln
ACTIVTTIES
Fund
(630,809)
funds
(1,700,000)
Transfers from other funds
Net cash used by noncapital financingactivities
1.900.000
.,,,
CASH FLOWS FROM CAPTTALAND RELATED FINANCING ACTMTIES
Availability
fees received
Intergovernmentalrevenuereceived
Principal
Interest
payments
on sewer
payments
on sewer
26,642,689
481,255
revenue
bonds
revenue
bonds
(10,249,204)
(23,457,465)
Proceedsfromsale of capitalassets
49,604
Purchaseofcapitalassets,otherthanpurchasedcapacity
(14,368,789)
Acquisition of purchased
(30,215,213)
capacity
Net cash used
and related
CASH FLOWS FROM IMIESTING
activities
(51,117,123)
(8.456.730
ACTMTIES
Purchasesof restrictedinvestments(net)
Purchasesof investments(net)
Interest
780,541
(9,237,271)
(954,652)
(1,069,000)
received
4,370,577
Net cash provided by investino activities
925
Netincrease(decrease)in cash and cash equivalents
Cash and cash equivalents,.luly i, 2002
Cashandcashequivalents.
~une30,2003
$
387,907
387.907
(36,816,658)
10,688,897
256.923.822
69.971.594
220,107,164
80,660.491
Reconciliation of operating income Ooss) to net cash provided by operating activities:
Operating
income(loss)
8
(21,115.235)
5,514,857
32,043,471
9,209,347
Adjus~nents to reconcile operating income (loss) to net cash provided by operating activities:
Depreciation
and amortization
Change
in assets
Decrease
and
liabilities:
in accounts
receivable
172,538
(Increase)in intergovernmental
receivables
(Increase)in interfundreceivables
Decreasein inventoriesof supplies
(Increase)in other assets
Increasein accountspayableand accruedliabilities
Increasein accruedsalariesand benefits
Increase in interfund
Total adjustments
payables
to operating
Netcash
Noncash investing,
(460,815)
175,095
(1,549)
1,223,247
89,326
46,264
income (loss)
33.068.775
activities
capital,
and financing
11,953.540
activities:
Capitalcontributions- sewer linesand manholes
$
Increase in fair value of investments
See
accompanying
notes
to the financial
(111,452)
834,302
(1,081)
3,437,121
86,633
6,763,597
353 957
statements.
IV-15
13,673,672
19.1
OF FAIRFAX,VIRGINIA
EXHIBIT A-7
Statement ot %iduciary Net Assets
June 30, 2003
Pension
Trust
Agency
Funds
Funds
ASSETS
Equity In pooled cash and temporary
investments
9
10,185,689
Cash collateralfor securitieslending
Accounts receivable
Accrued
interest
and dividends
at fair
$
2,279,307
receivable
76,2?5
12,263,652
Receivable from sale of pension investments
Investments,
2,528,980
230,557,553
793
67,179,361
3,073,812,051
valueEquipment
_Totalassets
3,396,277,613
38,225,793
B
i
43.104,991
UABIUTIES
Accounts payable and accrued liabilities
Accrued salaries and benefits
Payable for purchase of pension investments
Liabilities
for collateral
received
lending agreements
Liabilities under reimbursement
Interfund payable
under
4,630,680
46,730
131,666,204
139,909
~
securities
230,557,553
agreements
41,952,139
4,352
10,800
Obligations under capital leases
1,008,591
$
NET
ASSETS
Heldin trust for pensionbenefits
See accompanying
notes to the financial
B
3,029.365;646
statements
N-16
43,104,991
e,
COUNTYOFFAIRFAX,VIRGINIA
EXHIBIT A-s
of Changes in Plan Net Assets
Pension
aust
Funds
For the f~cal Jrear ended June 30, 2003
Pension
Trust
Funds
ADDITIONS
Contribu~ons:
Employer
8
Plan members
Totalcontributions
Investment
From
67,934,751
41,887,319
109,822.070
income:
investment
activities:
Net appreciation in fair value of investments
Interest
55,534,960
75,664,963
Dividends
27,707,560
Total income from investment
Less investment
activities expenses:
activities
158 I 907 I 483
Management fees
11,905,221
Other
Total investment activities expenses
Net income from investment activities
From securities
1,350,316
13,255,537
145,651,946
lending activities:
Securities lending income
Less securitieslending
3,028,684
expenses:
Borrower rebates
2,156,843
Management fees
Total securities lending activities expenses
Net income from securities lending activities
Net investment income
Total additions
258,289
2,415,132
613,552
146,265,498
256,087,568
DEDUCTIONS
Benefits
Refunds of contributions
129,109,755
4,210,215
Administrative expenses
Total deductions
1,279,581
134,599,551
Net increase
121,488,017
Net assets, 3uly i, 2002
2.907.877,629
Netassets, 3une30, 2003
See accompanying
notes to the financial
$
statements.
rV-17
3,029,365,646
OFFAIRFAX,VIRGINLA
Combining Statement of Net Assets
Component Units
June 30, 2003
Redevelopment
Public
and
Schools
Housing
Park
Authority
Authority
20,147,838
15,208,182
ASSETS
Equity in pooled cash and temporary
Cash
investments
8
255,490,249
in banks
7,057,118
Receivables
(net of allowances):
Accounts
Accrued interest
252,529
42,131
11,955,680
30,655
Notes
8,295,701
Other
462,918
Due from intergovernmental
units
Due from primary government
Inventories
of supplies
Other
30,799,528
5,035,364
4,563,916
1,503,003
assets
Restricted
618,716
assets:
Equity in pooled cash and temporary
Cash with fiscal agents
Certificates
of deposit - performance
investments
15,225,912
10,145,396
652,676
bonds
Investments
Land
held
Capital
45,134
3,982
-
for sale
190,148
17,825,026
2,595,172
assets:
Non-depreciable:
Land
46,818,517
Construction
in progress
Depreciable:
Equipment
Library collections
Buildings and improvements
Accumulated
depreciation
Deferred bond issuance costs (net of amortization)
Total assets
See
accompanying
notes
financial
252,351,188
2,674,619
15,436,079
137,821,169
24,385,069
1,574,799,966
(611,742,783)
2,689,740
11,959,963
148,731,021
(67,625,003)
181,264,900
(101,305,726)
478,298
180,585,813
409,995.941
81,759,749.878
to the
31,963,418
291,484,223
statements.
IV-18
+!
A-9
Economic
Development
Authority
Total
Component
Units
ASSETS
290,846,269
7,057,118
Equity in pooled cash and temporary investments
Cashinbanks
Receivables (net of allowances):
12,253,343
76,768
8,295,701
462,918
191,972
30,799,528
6,730,339
4,563,916
618,716
Accounts
Accrued
Other
Due from intergovernmental units
Due from primary government
Inventories
18,015,174
2,595,172
of supplies
Otherassets
Restricted
15,225,912
10,145,396
652,676
interest
Notes
assets:
Equity in pooled cash and temporary investments
Cash with fiscal agents
Certificates of deposit - performance bonds
Investments
Land
Capital
held
for sale
assets:
Non-depreciable:
331,133,123
Land
309,594,921
Construction in progress
Depreciable
13,562
152,484,434
24,385,069
1,904,795,887
(6,695)
-
:
Equipment
Library collections
Buildings and improvements
(780,680,207)
Accumulated depreciation
478,298 Deferred bond issuance costs (net of amortization)
198,839 2.350,530,471
Totalassets
continued
rV-19
OFFAIRFAX,VIRGINIA
Combining Statement of Net Assets
Component Units
June 30, 2003
Redevelopment
Public
and Housing
Park
Schools
Authority
Authority
UABIUTIES
Accounts payable and accrued
Accrued salaries and benefits
Contract
liabilities
$
retainages
5,155,085
115,290
14,568,816
9,647,165
21,400,318
276,672
1,656,679
1,093,747
1,101,004
521,250
108,487
5,765,740
129,564
315,114
10,363,616
392,233
475,040
14,442,740
2,248,439
133,945
8,929,274
18,331,888
10,741,077
Other
12,204,566
56,277,744
441,550
1,544,839
Total liabilities
11,820,636
1,612,023
15,530,000
209.066,030
95,098,717
57,487,984
1,447,692,187
59,046,522
334,038,797
ASSETS
Invested
Restricted
in capital assets,
net of related
debt
for:
Repair and replacement
Housing
Capital projects
Debt service
700,000
10,821,684
14,525,912
1,058,230
Unrestricted (deficit)
102,991,661
Total net assets
See
2,680,691
1,876,702
liabilities:
Portion due or payable within one year:
Revenue bonds payable, net
Notes payable
Compensated
absences
payable
Obligations under capital leases
Insurance
and benefit claims payable
Other
Portion due or payable after one year:
Revenue bonds payable, net
Notes payable
Compensated
absences
payable
Obligations under capital leases
Insurance
and benefit claims payable
NET
9,255,392
318,288
9,696,960
Accrued interest payable
Due to primary government
Deferred revenue
Performance
and other deposits
Long-term
37,530,983
72,949,174
accompanying
8 1,550,683,848
notes
to the
financial
15,618,890
85,487,096
2,185,018
352,507,957
statements.
gj
A-9conclud
Economic
Total
Development
Component
Authority
Units
LIABILITIES
86,971
49,554,037
Accounts
105,001
75,249,165
Accrued
9,973,632
521,250
1,765,166
12,014,572
1,345,858
790,154
104,607
Contract
Due
328,268
interest
Notes
Compensated
payable
9,647,165
Obligations
21,400,318
Insurance
absences
under
Other
Notes
Compensated
18,331,888
Obligations
10,741,077
Insurance
17,074,839
361,980,999
payable
and
payable
capital
benefit
leases
claims
payable
Other
Total liabilities
ASSETS
Invested
Repair
in capital assets,
net of related
for:
and
replacement
Housing
14,525,912
Capitalprojects
120.659,273
absences
under
10,821,684
1,988,549,472
leases
claims payable
Portion due or payable after one year:
Revenue bonds payable, net
11,014,536
1,058,230
payable
capital
and benefit
56,277,744
700,000
(129,429)
government
17,314,095
Restricted
(136.296)
payable
to primary
24,806,356
1,840,784,373
liabilities
Performance
and other deposits
Long-term liabilities:
Portion due or payable within one year:
Revenue bonds payable, net
NET
6,867
accrued
benefits
Deferredrevenue
24,025,202
-
and
and
retainages
Accrued
133,945
31,689
payable
salaries
Debtservice
Unrestricted (deficit)
Totalnetassets
C
IV-21
debt
;OUNTYOF FAIRFAX,VIRGINIA
Statement ofActivities
:omponent Units
i~orthe fiscal year ended June 34 2003
Program
Charges
for
Functions/
Public
Progra ms
Grants
Expenses
- Services
81,658,519,296
77,510,685
and
Contributions
Capital
Grants
and
Contributions
Schools:
Education
Redevelopment
Community
Park
Revenues
Operating
and Housing Authority:
development
63,365,305
19,058,739
63,500,701
27,600,350
102,397,834
37,604,475
4,681,750
3,012,835
Authority:
Parks, recreation,
and cultural
Economic Development
Authority:
Community development
Total tomponent units
92,797
7.035,177
$1,792,420,479
General
124,169,774
140,002.309
7,787,382
revenues:
Grants and contributions
not restricted to specific
Revenue from the use of money and property
Share
of Commonwealth's
Revenue
lottery
from primary
programs
proceeds
government
Other
Total general
revenues
Change
in net assets
Net assets,
3uly
1, 2002
Net assets, ~une 30, 2003
See
accompanying
notes
to the
IV-22
financial
statements.
caiI
A-10
Net (Expense) Revenue and Changes in Net Assets
Economic
iotal
Public
Redevelopment
and Housing
Park
Development
Component
Schools
Authority
Authority
Authority
Units
(1,473,929,027)
-
(1,473,929,027)
(3,689,256)
(3,689,256)
(35,807,554)
(35,807,554)
(1.473.929.027)
(3.689.256)
(35.807.554)
(7.035.m)
(1.526;16~i~j~
274,938,165
467,350
4,773,038
1,303,653,903
7,141,029
1,590,973,485
117,044,458
1,433,639,390
560,240
2,525,589
3,085,829
(603,427)
86,090.523
6,170,829
199,323
52,096,923
7,032,921
281,108,994
1,226,913
4,773,038
1,362,783,747
58;467,075
7,032,921
9,666,618
1,659,559,310
22,659,521
329,848,436
8 1,550,683,848 85,487,096 352,507,957
(2,256)
139,098,296
(127,173)
1,849,451,176
(129,429)
1.988,549,472
-
IV-23
c,
~
174·2
IV-24
OFFAIRFAX,
VIRGINIA
NOTESTOTHEFINANCIAL
STATEMENTS
June 30, 2003
A.
SUMMARY
OFSIGNIFICANT
ACCOUNTING
POLICIES
The Countyof Fairfax,Virginia,(the County)is organizedunder the UrbanCounty Executiveform of
governmentlas definedunder Virginialaw). The governing
bodyof the Countyis the Boardof Supervisors
(theBoard),
which
makes
policies
fortheadministration
oftheCounty.
TheBoard
iscomprised
often
members: the Chairman,
electedat largefora four-year
term,andonememberfromeachofninesupervisor
districts,
electedfora four-year
termbythevotersofthedistrictin whichthememberresides.TheBoard
appoints
a County
Executive
toactastheadministrative
headoftheCounty.
TheCounty
Executive
servesat
thepleasureoftheBoard,carriesoutthepoliciesestablished
bytheBoard,directsbusinessand
administrative
procedures,
andrecommends
officers
andpersonnel
tobeappointed
bytheBoard.
Thefinancial
statements
oftheCounty
havebeenprepared
inconformity
withgenerally
accepted
accounting
principles(GAAP)as appliedto government
unitsin the UnitedStatesofAmerica.TheGovernmental
Accounting
Standards
Board
(GASB)
istheaccepted
primary
standard-setting
bodyforestablishing
governmental
accounting
andfinancial
reporting
principles.
TheCounty's
significant
accounting
policies
are described below.
i.
Reporting Entity
As required by GAAP,
theaccompanyingfinancial statements present the financial data of the
County
(theprimary
government)
anditscomponent
units.Thefinancial
dataofthecomponent
units are includedin the County's
basicfinancialstatementsbecauseof the significance
of their
operational
or financial
relationships
withtheCounty.TheCountyanditscomponent
unitsare
togetherreferredto herein as the reportingentity.
Blended Component Units
Blended
component
unitsareentities
thatarelegally
separate
fromtheCounty
butthataresoclosely
related
totheCounty
thattheyare,inessence,
extensions
oftheCounty.
Theblended
component
unitsthatare reportedas partof theprimarygovernmentare:
Solid WasteAuthorityof FairfaxCounty (SWA)- The SWAis considereda blended
componentunit becausethe Board of Supervisorscomprisesthe Board of Directorsof the
SWAand has the abilityto impose its will on the SWA. The SWAis authorizedunder the
Virginia
WaterandWasteAuthorities
ActandwascreatedbytheBoardonJune29,1987.
TheSWAhasfinansedtheconstruction
ofa solidwastetoenergyfacility,whichis
contractually
ownedandoperated
bya commercial
entityin accordance
withagreements
betweenthe County,the SWA,andthe commercialentity.Certainassetsof the commercial
entityarereported
bytheSWAin anagencyfund,theResource
Recovery
Fund.
TheCountyhasassumed
theresponsibility
forthemanagement
oversight
of thear.rangement
betweenthe SWAandthecommercialentityandfor providingsufficientsolidwasteto result
ina f~mancially
viableoperation;
thisactivityis reportedin a specialrevenuefundofthe
County,theEnergyResourceRecoveryFacilityFund. Separatefinancialstatementsarenot
prepared
for the SWA.
0
IV-25
DistrictOne - The Board of Supervisors created Small District One, which is located
-withinthe Dranesville Magisterial District, in 1970 to provide for the construction of a
community center and the operation of its social, cultural, educational, and recreational
facilities. This small district is reported as a separate special revenue fund of the County, the
McLean Community Center Fund, because it is governed by the Board, which has the ability
to impose its will on the small district. Separate financial statements are not prepared for
Small
District
One.
Small District Five - The Board of Supervisors created Small District Five, which is located
within the Dranesville and Hunter Mill Magisterial Districts, in 1975 to provide for the
construction of a community center and the operation of its social, cultural, educational, and
recreational facilities. This small district is reported as a separate special revenue fund of
the County, the Reston Community Center Fund, because it is governed by the Board, which
has the ability to impose its will on the smalldistrict. Separate financial statements are not
prepared for Small District Five.
Discretely Presented Component Units
The columns for the component units in the financial statements include the financial data of the
County's other component units. They are presented in separate columns to emphasize that they are
legally separate from the County. Separate financial statements of the component units can be
obtainedby writingto theFinancialReportingDivision,Departmentof Finance,12000Government.
Center Parkway, Suite 214, Fairfax, Virginia 22035. All of the component units have a fiscal year
end of June 30. The discretely presented component units are:
Fairfax County Public Schools (Pub~ic Schools) - Public Schools is responsible for
elementary and secondary education within the County. The School Board is elected by
County voters. Public Schools is fiscally dependent on the County; Public Schools
operations are funded primarily by the County's General Fund and the County issues general
obligation debt for Public Schools' capital projects.
Fairfax County Redevelooment and Housing~Authority (FCRHA) - FCRHA plans,
coordinates, and directs the low income housing programs within the County under the
Virginia Housing Authorities Law. FCRHA was approved by a voter referendum in
November 1965 and was activated by the Board of Supervisors in February 1966. FCRHA is
a political subdivision of and reports to the Commonwealth of Virginia. The Board appoints
FCRHA's Board of Commissioners, and the County provides certain managerial and related
financial
assistance
to FCRHA.
Fairfax County Park Authority (Park Aut4oritv) - The Park Authority was created by the
Board of Supervisors of the County on December 6, 1950, to maintain and operate the public
parks and recreational facilities located in the County. The Board appoints the Park
Authority's governing board, and the County provides funding for the Park Authority's
General Fund and one of its capital projects funds. A memorandum of understanding
currently in effect between the County and the Park Authority defines the roles of the County
and the Park Authority.
Fairfax County Economic Development Authority (EDA) - The EDA is an independent
authority legally authorized by an act of the Virginia General Assembly and was formally
created by resolutions of the Board of Supervisors.
The EDA's mission is to attract
businesses to Fairfax County and to work with the existing:businesses to retain them as they
expand and create new jobs. The EDA also operates the Fairfax County Convention and
V~sitorsBureau, established to attract business travelers, meetings, and conventions to the
IV-26
Q
The Board appoints the seven members of the EDA's commission-which appoints
the EDA's executive director. The Board appropriates funds annually to the EDA for
operatingexpendituresincurredin carryingout itsmission;
Related Org~anizations
TheBoardofSupervisors
is alsoresponsible
forappointing
themembersof
theboardsofther;airfax
County
Water
Authority
(FCWA)
andtheIndustrial
Development
Authority
ofrjairfax
County
~DAFC), but the County's accountability
doesnot extendbeyondmakingthe appointments.The
IDAFCdoes not have a significantoperationalor financialrelationship with the County. The FCWA
bills and collects for the sales of sewer services
on behalfof the County'ssewersystem.During
fiscal
year2003,
theFCWA
collected
approximately
$63million
onbehalf
oftheCounty,
andasof
June30,2003,the Countyhasreceivablesof approximately
$13.4millionduefromthe FCWA.
Joint
Venture
TheCounty
isa participant
intheUpperOccoquan
Sewage
Authority
(UOSA).
UOSA
is ajoint
venturecreatedundertheprovisions
oftheVirginia
WaterandWasteAuthorities
Actto construct,
finance,
andoperate
theregional
sewage
treatment
facility
intheupper
portion
oftheOccoquan
Watershed.UOSAwas formed on March 3, 1971,by a concurrentresolutionof the governing
bodiesof FairfaxandPrinceWilliamCountiesandthe Citiesof ManassasandManassasPark. The
governing
bodyofUOSAis aneight-member
boardofdirectors
consisting
oftwomembers
from
eachparticipating
jurisdiction
appointed
tofour-year
terms.TheUOSA
Board
ofDirectors
adopts
an annual operating budget based on projectedsewageflows.TheCountyhas no explicitand
measurable
interestin UOSAbutdoeshavean ongoing
financial
responsibility
foritsshareof
UOSA's
operating
costs,construction
costsandannualdebtservice.Complete
financial
statements
ofUOSAcanbeobtained
bywritingtoUOSA,P.O.Box918,Centreville,
Virginia
20122.
2,
Basis of Presentation
Government-wide Statements
Thestatement
ofnetassetsandthestatement
ofactivities
display
information
abouttheprimary
government(the County)and its componentunits. These statementsincludethe financialactivities
of theoverallgovernment,
exceptfor fiduciaryactivities.Eliminations
havebeenmadeto avoidthe
double-counting
ofinterfund
activities.Thesestatements
distinguish
between
thegovernmental
and
business-type
activities
oftheCounty.
Govemmentalactivities
generally
arefinanced
through
taxes,
intergovernmental revenues, and othernon-exchange
transactions. Business-typeactivitiesare
financed
primarily
byfeescharged
toextemalparties.
Likewise,
theprimary
government
isreported
separately
fromcertainlegallyseparatecomponent
unitsforwhichtheprimarygovernment
is
financially accountable.
Thestatement
ofactivities
presentsa comparison
betweendirectexpenses
andprogramrevenues
for
each activity of the County. Direct expensesare those that are specificallyassociatedwith a program
orfunctionand,therefore,
areclearlyidentifiable
to a particular
activity.Programrevenues
include
(a) fees, fines, and chargespaid by the recipientsof goods or servicesofferedby the programsand
(b)grantsandcontributions
thatarerestricted
to meettheoperations
orcapitalrequirements
ofa
classified
as programrevenues,includingall taxes, are
particular program. Revenues that are not
presented as general revenues.
IV-27
Financial Statements
Theaccountsof the reportingentity·are organizedon the basisof funds,eachof whichis considered
to be a separate accounting entity. Theoperationsof eachfundare accountedfor in a separateset of
self-balancing
accounts
comprised
of assets,liabilities,
fundequity,revenues,
andexpenditures
or
expenses,as appropriate. The fund financialstatementsprovideinformationabout the County's
funds,including
itsfiduciary
funds-and
blendedcomponent
units.Separate
statements
foreachfund
category-govemmental,
proprietary,
andfiduciary--are
presented.Theemphasis
offundfinancial
statements
is onmajorgovernmental
andenterprise
funds,witheachdisplayed
in a separatecolumn.
All remaininggovernmental
fundsareaggregatedandreportedas nonmajorfunds.
The County reports the following major fund types:
GeneralFund- The GeneralFundis the County'sprimaryoperatingfund,andit is usedto
accountfor all revenue sourcesand expenditureswhich are not requiredto be accountedfor
in other
funds.
Entert~rise
Fund- TheFairfaxCountyIntegrated
SewerSystem(SewerSystem)
is theonly
enterprise
fundof theCounty.Thisfundis usedto accountfor
thefinancing,
construction,
and operations of the countywide sewer system.
The Countyreportsthe followingnonmajorgovernmentalfund types:
SoecialRevenue
Funds- Thespecialrevenuefundsareusedto accountfortheproceeds
of
specificrevenuesources(otherthanmajorcapitalprojects)
thatarelegallyrestricted
to
expenditures for specified purposes.
DebtServiceFunds- Thedebtservicefundsareusedto accountfor the accumulation
of
resourcesfor,andthe paymentof, the generalobligationdebtserviceof the Countyandfor
the debt serviceof the lease revenuebonds and specialassessmentdebt. Includedin this
fundtypeis theSchoolDebtServiceFundastheCountyis responsible
forservicing
the
generalobligationdebtit has issuedon behalfof PublicSchools.
CapitalProiectsFunds- Thecapitalprojectsfundsareusedto accountforfinancial
resourcesusedfor all;generalconstruction
projectsotherthanenterprisefundconstruction;
The County reports the following additional fund types:
InternalServiceFunds- Thesefundsare proprietaryfundsusedto accountfor the provision
of generalliability,
malpractice,
andworkers?
compensation
insurance,
healthbenefitsfor
employees
andretirees,vehicleservices,
supplies,
document
services,
andtechnology
infrastructure
supportthatareprovidedto Countydepartmentson a costreimbursement
basis.
PensionTrustFunds- Theseare fiduciaryfundsusedto accountfor the assetsheldin trust
bytheCountyfortheemployees
andbeneficiaries
ofitsdefinedbenefitpensionplans- the
Employees'
Retirement
System,thePoliceOfficersRetirement
System,andtheUniformed
Retirement System.
used to account for monies received, held, and
Geencv Funds - These are fiduciaryfunds
disbursedon behalfof developers,welfarerecipients,the Commonwealth
of Virginia,the
recipientsof certain bond proceeds,and certain other local governments.
TV-28
Q
3. Measurement
Focus
and
Basis
ofAccouoting
Government-wide,
ProDrietarv.
andFiduciarv
FundStatements
The government-wide,proprietary,andpension
trustfundfinancial
statements
arereported
usingthe
economic
resources
measurement
focusandtheaccrualbasisof accounting.
Theagencyfundsalso
usetheaccrual
basisofaccounting
torecognize
assetsandliabilities.
Revenues
arerecorded
when
eatned, and expenses are recorded at the time liabilitiesare incurred,regardlessof when the related
cash flows take place. Non-exchangetransactions,
in whichthe Countygives(orreceives)value
without
directly
receiving
(orgiving)
equal
value
inexchange,
include
property
taxes,
grants,
and
entitlements. On an accrual basis, revenue from
propertytaxes is recognizedin the fiscal year for
whichthetaxesare levied.Revenuefromgrantsandentitlementsis recognizedin the fiscalyearin
which all eligibility requirements
havebeensatisfied.Forthepensiontrustfunds,bothmemberand
employer
contributions
toeachplanarerecognized
intheperiodinwhichthecontributions
aredue.
Benefits and refunds
plan.
are recognizedwhendueandpayablein accordancewiththe termsof each
Proprietaryfundsdistinguishoperatingrevenuesandexpensesfrom nonoperatingitems. Operating
revenues and expenses generally result fromproviding
servicesandproducinganddeliveringgoods
in connectionwith a proprietaryfund's principalongomgoperations.Forthe SewerSystem,
principal operating revenues include sales to existingcustomersfor continuingsewer service.
Operating expenses include the cost of sales
andservices,
administrative
expenses,
anddepreciation
on capitalassets. All revenuesand expensesnot meeting
thisdefinition
arereportedasnonoperating
revenuesandexpenses.Also,unbilledSewerSystemreceivables,net of an allowancefor
uncollectible accounts,
)
are recordedat year end to the extent they can be estimated.
Inpreparing
thefinancial
statements
of:the
enterprisefund, the County has not elected to apply the
optionprovidedin Paragraph7 of GASBStatementNo.20 titled"Accounting
andFinancial
Reporting
forProprietary
Funds
andOther
Governmental
Entities
thatuseProprietary
Fund
Accounting."Therefore,the reportingentityhas applied all FinancialAccountingStandardsBoard
(FASB)statementsand interpretationsissued on or beforeNovember30, 1989,exceptfor thosethat
conflictwithor contradictGASBpronouncements.
As a general rule, the effect of interfund
activity
hasbeeneliminatedfromthe government-wide
financial
statements.
Exceptions
to
this
generalrule
arecharges
between
thegovernment's
Sewer
System and various other functions
of the government;
eliminationof thesechargeswoulddistortthe
directcostsandprogramrevenues
reportedforthevariousfunctions
concerned.
GovernmentalFund FinancialStatements
Governmentalfunds are repoaed using the current financialresourcesmeasurementfocus and the
modifiedaccrualbasis of accounting. Underthismethod,revenuesare recognizedwhenmeasurable
andavailable.
Revenue
fromtheuseofmoney
andproperty
andfromintergovernmental
reimbursement grants is recorded as earned. Other revenues are considered available to be used to
pay liabilities
ofthecurrent
period
iftheyarecollectible
within
thecurrent
period
orwithin
45days
thereafter.The primaryrevenuessusceptibleto accrualincludeproperty,businesslicense,andother
local taxes and intergovemmentalrevenues.
In applyingthe susceptibleto accrualconceptto
intergovernmental revenues, the legalandcontractual
requirements
of theindividual
programs
are
used as guidance. Expenditures are recorded when the relatedfundliabilityis incurred,exceptthat
principal
andinterest
ongeneral
long-term
debtandcertain
othergeneral
long-term
obligations,
such
as compensated absences and landfill closure
)
andpostclosure
care costs, are recognizedonly to the
extent
they
have
matured.
General
capital
asset
acquisitions
arerepoaed
ascapital
outlays
in
rV-29
The issuanceof generallong-termdebt and acquisitions under capital leases
are reportedas other financingsources. The effect of interfundactivity has not been eliminatedfrom
the governmental fund financial statements.
4.
Pooled Cash and Temporary Investments
TheCountymaintainscashandtemporaryinvestmentsfor all fundsin a singlepooledaccount,
exceptforcertaincashandinvestmentsrequiredto be maintainedwithfiscalagentsor in separate
poolsoraccounts
in ordertocomplywiththeprovisions:of
bondindentures.
Thecomponent
units
alsoinvestinthepooledcashaccount.AsofJune30,2003,thepooledcashandtemporary
investments
havebeenallocated
betweentheCountyandtherespective
component
unitsbasedupon
theirrespectiveownershippercentages.Temporaryinvestmentsconsistof moneymarket
investments
thathavea remainingmaturityat the timeof purchaseof oneyearor lessandare
reportedat amortizedcost, whichapproximatesfair value. Interestearned, less an administrative
charge,is alloca~ted
generallyto therespectivefundsandcomponentunitsbasedon eachfund'sor
unit'sequityinthepooledaccount.In accordance
withtheCounty'slegallyadoptedoperating
budget,interestearned by certainfunds is assigneddirectlyto the GeneralFund.
FortheyearendedJune30,2003,interestearnedbycertainfundsassigned
directlytotheCounty's
General Fund isas follows:
Primary
Government
NonmajorGovernmentalFunds
Internal
$
Service Funds
Total primary
component
480.764
government
4.781.732
Units
Public Schools
FCRHA
Park Authority
Total component
Total reporting
5.
4,300,968
units
entity
1
2,277,458
33,441
1
17.545
2.328.444
IB
7.110.176
Cash and Cash Equivalents
Forpurposesof the statementsof cashflows,the amountsreportedas cashandcashequivalentsfor
theproprietary
fundtypesrepresent
amountsmaintained
inthereporting
entity'sinvestment
pool,as
theyareconsideredto be demanddepositsfor the purposeof complyingwithGASBStatement
No. 9, "ReportingCash Flows of Proprietaryand NonexpendableTrust Funds and Governmental
Entitiesthat use ProprietaryFundAccounting."
6.
Investments
Moneymarketinvestmentsthathavea remainingmaturityat the timeof purchaseof oneyearor less
arereportedat amortized
cost,whichapproximates
fairvalue.Otherinvestments
arereported
at fair
value.Securities
tradedona nationalorinternational
exchange
arevaluedat thelastreportedsales
priceat currentexchange
rates.Asset-backed
securities
arevaluedonthebasisoffutureprincipal
and interest paymentsand are discountedat prevailinginterestrates for similarinvestments.
Investmentpurchasesand sales are recordedas of the trade date. These transactionsare finalizedon
the settlement date, which is usually the trade date, but could be asmanyas three business days after
thetradedate. Cashreceivedas collateralon securitieslendingtransactionsandinvestmentsmade
with such cash are reported as assets and as related liabilities for collateral received.
IV-30
7. Derivatives
TheCountyRetirement
Systems
(theSystems),
whichincludetheEmployees'
~RS),PoliceOfficers
(PORS),
andUniformed
(URS)
Retirement
Systems,
aswellastheEducational
Retirement
System
(ERFC) of the Public
Schoolscomponent
unit,investinderivatives
aspennittedbytheCodeof
Virginia
andinaccordance
withpolicies
setbytheirrespective
Board
ofTrustees.
TheSystems
may
invest in various derivative instruments
on a limitedbasisin orderto increasepotentialearningsand
to
hedge
against
potentiallosses.
During
fiscalyear2003,
theSystems
invested
inthefollowing
derivative instruments that were
not reported in the financial statements as of June 30, 2003: futures
contracts,
interest
rateswaps,
options
onfutures
andswaps,
andcreditspreadswaps(spread
locks).
AsofJune30,2003,thePORSdidnothaveanyinvestments
inderivative
instruments
thatwerenot
reported in the financial statements.
An exchange-traded financial futures contract is a legally-bindingagreementto buy or sell a
financial
instrument
ina designated
futuremonth
ata priceagreed
uponbythebuyerandsellerat
initiation of the contract. Futures contracts
providea means to achieveexp~osures
to the market in a
moreefficient
wayandatlowertransaction
costs.TheERSentered
intofutures
contracts
inMay
andlune2003withmaturity
datesofJulyandSeptember
2003.AtJune30,2003,theERShad
futurescontracts
withnotionalandfairmarketvaluesin S&P500andRussell2000of$125.2
million;
foreign
equityof$28.6million;
foreign
currency
of$26.5million;
U.S.Treasury
of
negative$41.3million;andHangSengof $1.4million.TheURSenteredintofuturescontractsin
MayandJune2003,withmaturity
datesofMarchandJune2005.AtJune30,2003,theURShad
futurescontracts
withthenotionalvalueof$46.0millionandfairmarketvalueof $·11.2
million.
The ERFC entered
into
futures
contracts
fromAugust
2002toJune2003withmaturity
datesranging
fromSeptember
2003toApril2005.AtJune30,2003,theERFChadfuturescontracts
withthe
notional and fair market values, respectively, in money market futures of $49.0 million and $15.7
million;governmentswap futuresofnegative
$1.0millionandnegative$1.2million;government
futures of negative $5.7 million and negative$5.2million;and interestratefuturesof negative$32.9
million and negative $37.5 million. Themarketandinterestraterisksof holdingexchangetraded
futurescontractsarisefromadversechangesin marketpricesand interestrates. Theserisksare
equivalent
toholdingexposure
to theindexes.Counterparty
creditriskis modestbecausethefutures
clearinghousebecomesthe counterpartyto all transactions.
An interestrate swap is a bindingagreementbetweencounterparties to exchange periodic interest
payments
onsomepredetermined
dollarprincipal,
whichis calledthenotional
principal
amount.
Interestrateswapsareusedasrisk-neutral
substitutes
forphysicalsecurities
orto obtainnonleveragedexposurein marketswhereno physicalsecuritiesare available,suchas an interestrate
index.
The effective
dateoftheswapsfortheERSwasJune2003,witha maturity
dateofJune
2004.Payments
occurin JulyandOctober2003andJanuaryandApril2004.AtJune30,2003,the
notionalamountof interestrate swapsforthe ERStotaled$51.5million,andthe fairmarketvalue
Theeffectivedatesof the swapsfor the URSrangefromMarchto June
totaled negative $219,274.
2003,withmaturity
datesfromMarch2005toJune2008.AtJune30,2003,thenotionalamountof
interest rate swaps for the URS totaled $17.7 million,and the fair marketvalue totaled$101,537.
Thecounterparty
creditriskiscontrolled
bytheSystem's
investment
guidelines
andlimited
by
periodicresets
to
mark-to-market.
The
market
risk
is
equivalent
to
holding
the
exposure
to
the
index.
An option is a financial instrument that, in exchangefor the optionprice,givesthe optionbuyerthe
right,butnottheobligation,
tobuy(orsell)a financial
assetat theexercisepricefrom(orto)the
option seller withina specifiedtime periodor on a specified date (expiration date). Options are used
to
manageinterestrateandvolatility
exposure
oftheportfolio.TheURShadoptionsthatwere
written
between January and June 2003, bearing maturities from August to December 2003. Options
heldin theportfolio
at June30,2003,hada notionalvalueof negative
$22.7millionanda fair
marketvalueofnegative
$234,926.TheERFChadoptionsthatwerewritteninJanuary2002,
TV-31
a maturity date of April 1, 2005. Options held at June 30, 2003, had a notional value of $3.0
millionand a fair marketvalue of $O. Optionscan cause the effectivedurationof a portfolioto
changewith movementsin interestrates. To controlinterestrate risk, the durationchangepotential
of options over a wide range of best and worst case interest rate scenarios is monitored.
A credit spread swap (spread lock) is a swap used to adjust exposure to specific sectors and risks in a
portfolio by the most effective means possible. Spread locks are used to reduce risk, enhance
portfolio management flexibility, and gain exposure to the interest rate differential between two
market rates. PIMCO, on behalf of the URS, has entered into agreements to pay fured amounts
rangingfrom 12.25basis points to 13.25basis points over the reference20-yearU. S. Treasurybond.
The spread locks agreements existing at June 30, 2003, were written on April 30, 2003, and matured
on August 13, 2003. In addition, there was a mutual collateral agreement which each party could
exercise if the market value of the swap exceeded $250,000. The notional value of the spread locks
on June 30, 2003, was $5.9 million,while the fair market value totaled$29,602. Counterpartyrisk is
limitedby restrictingeligiblecounterpartiesto the highest credit rating organizationsin the industry.
Risk is also limited to the exchange of net-interest payments, not the instrument's underlying
notional
8.
value.
Inventories
The purchases method of accounting for inventories is used in the governmental funds. Under this
method, the cost is recorded as an expenditure at the time individual items are purchased. At year
end, a portion of the fund balance is reserved for the ending balances. This reserve is maintained to
indicate that a portion of the fund balance is not available for future appropriations. Inventories are
valued and carried on an average unit cost basis.
The consumptionmethodof accountingfor inventoriesis used in the proprietaryfund types. Under
this method,inventoriesare expensedas they are consumedas operatingsuppliesand spare parts in
the period to which they apply.
9.
Restricted
Assets
Restricted assets are liquid assets which have third-party limitations on their use. When both
restrictedand unrestrictedresourcesare availablefor use, it is the government'spolicy to uSe
restricted resources first, then unrestricted resources as they are needed.
Unspent amounts from the issuance of general obligation bonds arereported as restricted assets in
the County'scapital projectsfunds. The Countyalso holds certificatesof deposit purchasedby
developersunder the terms of performanceagreements. The Countymay require a developerto
enter into these agreementsin order to ensure that certain structuresand improvementsare
completed according to approved site plans. The certificates, issued by various financial institutions,
are released to the developer when the terms of the agreement have been satisfied. If the terms of the
agreement are not satisfied, the County uses the proceeds from the certificates to correct or complete
the project as necessary. The amount of the certificates held is reported as a restricted asset in the
General
Fund.
In accordance with the provisions of the 1985 General Bond Resolution, certain assets of the Sewer
Systemare restrictedfor specificfuture uses, such as repaymentof debt obligations,paymentson
construction projects, and extensions and improvements. Additionally, the State Water Control
Board (SWCB)regulationsrequirethe removalof ammonia-nitrogenfrom the dischargesfrom the
County's~NomanM. Cole, Jr. PollutionControlPlant and the Alexandriaand ArlingtonCounty
Wastewater Treatment Plants. Certain assets are restricted to fund the construction of
r~aots.
Certain
assets
areresllietadm
fundfhe
eonsrmcfion
ofnitrogen~'~s~e~;
nitmgen
IV-32
uses:
of June30, 2003,the SewerSystemhascashandinvestmentsthat are restrictedfor the foIlowing
Restricted
Assets
of the
Sewer
Extensionsand improvements
Nitrogenremovalfacilities
Long-termdebt service requirements
1 $119,216,343
1 15,000,000
21,208,838
Current debt service requirements
Total restricted assets
1
10.196
1 8165
In accordance with requirements of the U. S. Department
of HousingandUrbanDevelopment
and
the VirginiaHousingDevelopment
Authority,theFCRHAis requiredto maintaincertainrestricted
depositsand fundedreservesfor repairs and replacements.
TheParkAuthorityhasrestrictedassetsrepresentingthe amountof the debtservicereserve
requirement
pertaining
to itsoutstanding
revenuebonds,unspentamountsfromgeneralobligation
bondsissuedbytheCounty,andloanamountsreceived
fromtheCountyforcertaincapital
improvements.
ill,
Capital Assets
Capitalassets,including
land,buildings,
improvements,
equipment,
librarycollections,
purchased
capacity,
andinfrastructure,
thatindividually
cost$5,000ormore,withusefullivesgreaterthanone
yearare reportedin the proprietaryfundsandapplicablegovernmental
orbusiness-type
activities
columns
in thegovernment-wide
financial
statements.
TheCountyhascapitalized
general
infrastructure assets, including solid waste disposal facilities, storm water management facilities,
publicdrainagesystems,
masstransportation
facilities,
commercial
revitalization
improvements,
and
publictrailsandwalkways
thatwereacquiredor substantially
improved
subsequent
toJulyi, 1980.
The Countydoes not capitalizeroads and bridges as these belong to the Commonwealthof Virginia.
Purchased
capacity
consistsofpayments
madebytheSewerSystemunderintermunicipal
agreementswiththe Districtof ColumbiaWaterandSewerAuthority(BluePlains),UOSA,
Alexandria
Sanitatioi~
Authority
(ASA),Arlington
County,andPrinceWilliam
CountyService
Authority
(PWCSA)
fortheSewerSystem'sallocated
shareofimprovements
tocertainspecified
treatmentfacilitiesowned and operatedby thesejurisdictions.
Purchased capital assets are stated at
historical
cost or estimatedhistorical
cost.
Capital Assets
Donated capital assets are recorded at their
estimated fair market value as of the date of
Infrastructure
sewer lines
donation.
Capitalassetsaredepreciated/
Buildings
amortized over their estimated useful lives
using the straight-line method. The estimated
useful lives are shown in the table on the
right.
Purchasedcapacity
Improvements
Equipment
Librarycollections
Useful Lives
1
10 - 100 years
50 years
30- 50years
1
1
30 years
10 - 30 years
5 - 15 years
5 years
Nodepreciation
is takenin theyearof acquisition
forinfrastructure
andlibrarycollections;
depreciation/amoaization
onothercapitalassetscommences
whentheassetsarepurchased
or are
substantially
complete
andreadyforuse. Forconstructed
assets,allassociated
costsnecessary
to
bringsuchassetstothecondition
andlocationnecessary
fortheirintended
use,including
intereston
related debt with respect to the Sewer System, are initially capitalized as construction in progress
andaretransferred
tobuildings
orimprovements
whentheassetsaresubstantially
complete
and
ready for use.
IV-33
I
-
Compensated
Absences
All reporting entity employees earn annual leave based on a prescribed formula which allows
employees with less than ten years of service to accumulate a maximum of 240 hours and employees
with ten years or more of service to accumulate a maximum of 320 hours of annual leave as of the
end of each year. In addition, employees, except for Public Schools employees, may accrue
compensatory leave for hours worked in excess of their scheduled hours. Compensatory leave in
excess of 240 hours at the end of the calendar year is forfeited.
The current pay rate, including certain additional employer-related fringe benefits, is used to
calculate compensated absences accruals at June 30. The entire liability for compensated absences is
reported in the government-wide and proprietary fund statements, whereas, only the matured portion
resulting from employee resignations and retirements is reported in the governmental fund
statements.
12.
Net Assets
Net assets are comprised of three categories: Net assets invested in capital assets, net of related
debt; Restricted net assets; and Unrestricted net assets. The first category reflects the portion of net
assets which is associated with non-liquid, capital assets, less the outstanding debt (net) related to
these capital assets. The related debt (net) is the debt less the outstanding liquid assets and any
associated
unamortized
costs.
Restricted
net assets are restricted
assets, net of related debt.
Net
assets which are neither restricted nor related to capital assets, are reported as unrestricted net assets.
The County issues debt to finance the construction of school facilities for the Public Schools and
park facilities for the Park Authority component units because Public Schools does not have
borrowing or taxing authority and the Park Authority does not have taxing authority. The County
reports this debt, whereas the Public Schools and Park Authority report the related capital assets and
unspent bond proceeds. As a result, in the Statement of Net Assets (Exhibit A), the debt reduces
unrestricted net assets for the primary government, while the capital assets are reported in net assets
invested in capital assets, net of related debt and the unspent bond proceeds are reported in restricted
net assets for Public Schools and the Park Authority.
Because this debt is related to capital assets and restricted assets of the repoaingentity
as a whole,
the debt amount of $1,059.1 million is reclassified as shown below to present the total reporting
entity column of Exhibit A:
Reclassification
of Debt
Primary
Net
Assets
Invested
in capital
net of related
Restricted
Capital
Government
Units
81,584,123,229
1,840,784,373
Park
Total
Schools
Authority
Reporting
Facilities
Facilities
assets,
debt
projects
(954,217,364)
18,200,000
14,525,912
355,542,234
12,579,914
Unrestricted
net
for:
(90,406,344)
2,380,283,894
for:
Other
Total
Component
Issued
Public
120
assets
971
(14,525,912)
954
1.988.549.472
18,200,000
168,122,148
7
104
9
960
N-34
994
Encumbrances
The County uses encumbrance accounting, under which purchase orders, contracts, and other
commitments for the expenditure of funds are recorded to reserve that portion of the applicable
appropriation. Encumbrances represent the estii~ated amount of expenditures ultimately to result if
unperformed contracts and open purchase orders are completed. Encumbrances for the capital
projects funds do not lapse until the completion of the projects and are reported as reservations of
fund balance at year end. Funding forall other encumbrances lapses at year end and requires
reappropriation by the Board.
14.
Designations
of Unreserved
Fund Balances
Unreserved fund balances as of June 30, 2003, have the following significant designations:
nation
Primary
General
Amount
Government
Fund:
Revenue stahiliration during periods of economic downturn
Emergency needs and loss of revenue sources through actions
of other governments
Nonmajor Governmental
Funds:
Landfill closure and postclosure
costs
Solid waste disposal
Total
primary
government
Recovered
49,814,959
62,736,298
Ig
Comnonent
Unit - Park Authority
E.C. Lawrence Park expenditures
15.
29,253,999
154
1
Costs
Reimbursements from another government, organization, or private company for utilities, tuition
fees, vehicle insurance, and services rendered or provided to citizens are recorded as recovered costs
in the fund
16.
financial
statements.
Intermunicipal
Agreements
The Sewer System has entered into several intermunicipal agreements for the purpose of sharing
sewage flow and treatment facility costs (see Note J). The payments made to reimburse operating
costs and debt service requirements are recorded as expenses in the year due. Payments made to
fund the Sewer System's portion of facility expansion and upgrade costs are capitalized as purchased
capacity (see Note Fl. The Sewer System amortizes these costs over the period in which benefits are
expected to be derived, which is generally 30 years.
The City of Fairfax (the City) makes payments to the County for the City's share of certain
governmental services and debt service costs. Payments for governmental services such as court,
jail, custody, health, library, and County agent services are recorded as revenue in the General Fund.
Debt service payments represent the City's share of principal and interest and are recorded as
revenue in the County Debt Service Fund. In addition, the City pays the County a share of the local
portion of all public assistance payments and services including related administrative costs, which
is recorded as revenue in the GeneralFund. The City of Falls Church makes payments to the County
IV-35
the full cost of the local portionof public assistancepayments(includingallocatedadministrative
costs) and for the use of specialCountyhealth facilitiesby Falls Churchresidents. These payments
are recorded
as revenue
in the General
Fund.
The Countyand the cities of Fairfaxand Falls Churchcomprisethe Fairfax-FallsChurch
CommunityServicesBoard (CSB),establishedunder State mandatein 1969,to providemental
health, mental retardation and drug and alcohol abuse treatment services to residents of the three
jurisdictions.The CSB uses the Countyas its fiscal agent. The operationsof the CSB, including
paymentsreceivedfromthesecitiesfor servicesperformedby the County,are reportedin a special
revenue
fund.
17.
UseofEstimates
Thepreparationof financialstatementsin conformitywithGAAPrequiresmanagement
to make
estimatesand assumptionsthat affectcertain reportedamountsand disclosures. Accordingly,actual
results could differ from those estimates.
B.
DEPOSITS AND INVESTMENTS
i.
Deposits
At June 30, 2003, all of the reportingentity's depositswere coveredby federaldepositoryinsurance
or collateralized in accordance with the Virginia Security for Public Deposits Act (Act). The Act
providesfor the pooling of collateralpledged with the Treasurerof Virginiato securepublic deposits
as a class. No specificcollateralcan be identifiedas securityfor one public depositor,and public
depositors are prohibitedfromholding collateral in their name as security for deposits. The State
TreasuryBoard is responsiblefor monitoringcompliancewith the collateralizationand reporting
requirements
of theActandfor notifyinglocalgovernments
of complianceby banksand savingsand
loan associations. A multiple financial institution collateral pool that provides for additional
assessmentsis similarto depositoryinsurance. If any memberfinancialinstitutionfails, the entire
collateralpool becomesavailableto satisfythe claimsof governmentalentities. If the value of the
pool's collateralis inadequateto cover the loss, additionalamountswould be assessedon a pro rata
basis to the membersof the pool. Therefore,funds depositedin accordancewith the requirementsof
the Act are considered to be fully insured.
A summaryof the reportingentity's public depositsat June 30, 2003, is as follows:
Carrvins
Primary government
Component
units
Total reporting entity
8
1
I 8
Value
137,107,651
67,783,200
204,890,851
Bank
Balance
160,992,485
90.317
· 251
The bank balanceincludesthe pooledcash accountwhich,for reportingpurposes,has been allocated
betweenthe primary governmentand the participatingcomponentunits. The differencesbetween
carryingvalues and bank balancesgenerallyresult from checks outstandingand depositsin transit at
June 30, 2003.
IV-36
2 AllaHed
~m~estments
Exceptfor its pensionfunds,under the VirginiaInvestmentof PublicFundsAct, the reportingentity
is authorized to purchase the following investments:
·
Commercial paper
·
Money market funds
·
Bankers acceptances
·
Repurchase agreements
Medium term corporate notes
·
Local government investment pool
·
U. S. Treasury and agency securities
·
Obligations of the Asian Development Bank
·
Obligations of the African Development Bank
·
Obligations of the International Bank for Reconstruction and Development
·
Obligations of the Commonwealth of Virginia and its instrumentalities
·
Obligations of counties, cities, towns, and other public bodies located within the
Commonwealth of Virginia
·
Obligations of state and local government units located within other states
·
Savings accounts or time deposits in any bank or savings and loan association within the
Commonwealth that complies with the Act
The reporting entity's investment policy requires thatsecurities underlying repurchase agreements
must have a market value of at least 102 percent of the cost of the repurchase agreement. The
market value of the securities underlying repurchase agreements is monitored on a daily basis during
the year by the reportingentity to ensure compliancewith the policy.
3.
Pension
Fund
Investments
The authorityto establishpensionfunds is set forth in the Code of Virginia(the Code), which
authorizes the following investments for pension funds:
·
U. S. Treasury and agency securities
·
Obligations of the Commonwealth of Virginia and its instrumentalities
·
Obligations of counties, cities, towns, and other public bodies locatedwithin the
Commonwealthof Virginia
·
Obligations of state and local governmental units located within other states
·
Obligationsof the InternationalBank for Reconstructionand Development
·
Obligations of the Asian Development Bank
·
Obligations of the African Development Bank
In addition, the Code provides that the reporting entity may purchase other investments for pension
(including common and preferred stocks and corporate bonds) that meet the standard of
judgment and care set forth in the
Code.funds
rV-37
of Trustees' policies permit the pension funds to lend their securities to broker-dealers and
other entities (borrowers) for collateral that will be returned for the same securities in the future.
The pension funds' custodians are the agents in lending:the pension funds' domestic and
international securities for collateral of 102 and 105 percent, respectively, of the market valueof the
related security. The custodians receive cash, securities and irrevocable bank letters as collateral.
Ah securities loans can be terminated on demand by either the pension funds or the borrowers. Cash
collateral is invested in thelending agents' collective collateral investment pools. The pension funds
do not have the ability to pledge or sell securitiesreceivedas collateralin the absenceof borrower
default. The relationshipbetweenthe maturitiesof the investmentpools and the pensionfunds'
loans is affected by the maturities of securities loans made by other plan entities that invest cash
collateral in the investment pools, which the pension funds cannot determine.
The pensionfunds did not imposeany restrictionsduringthe period on the amountsof loansthe
lendingagents made on their behalf, and the agentshave agreedto indemnifythe pensionfunds by
purchasingreplacementsecurities,or returningthe cash collateralthereof, in the eventa borrower
fails to return loaned securities or pay distributions thereon. There were no such failures by any
borrower during the fiscal year, nor were there any losses during the period resulting from the
default of a borrower or lending agent. At year end, the pension funds had no credit risk exposure to
bor~owers because the amounts the pension funds owed the borrower exceeded the amounts the
borrowers owed the pension funds.
4.
Custodial
Credit Risk Categories
The reporting entity's investments are categorized to give an indication of the level of custodial
credit risk assumed by the entity as of June 30, 2003. Category 1 includes investments that are
insured or registered, or securities held by the reporting entity or its agent in the reporting entity's
name; Category 2 includes investments that are uninsured or unregistered, with securities held by
the counterparty's trust department or agent in the reporting entity's name. Category 3 includes
investments that are uninsured and unregistered, with securities held by the counterparty, or by its
trust department or agent but not in the reporting entity's name. Securities lent for securities and
irrevocable letters of credit collateral are classified according to the category of the collaterzll
received. All of the reporting entity's investments are Category 1 investments, except for mutual
funds, short-term investment funds, securities lending short-term collateral investment pools, and
investments held under securities loans with cash collateral, which are not categorized because such
investments are not evidenced by specific securities.
5.
Investments
at June 30, 2003
The reporting entity's investments as of June 30, 2003, are summarized below at carrying value:
INVESTMEMS
Primary
Pooled
AT 2006
30,
2003
Government
Investments:
Bankers acceptances
Commercial paper
U. S. Treasury securities
Mutual
funds
Repurchase
Total
9
175,775,264
305,259,412
265,034,271
62,171,541
agreements
pooled
25
investments
833
IV-38
IMIESTMEMSAT 3UNE30, 2003 (continued)
Nonmajor OovernmenLalFund - Moneymarketfunds
Is
7
Enterprise Fund - Integrated Sewer System:
Mutual funds and short-term
Repurchase agreements
U. S. Treasury
inves~nents
828,575
7,513,527
securities
16,712,920
Obligations
ofauthorities
ofthe commonwealth
ofVirginia
Totalenterprise
fund- IntegratedSewerSystem
Agency
711.495
47.766
Funds:
Mu~al funds and short-term
investments
6,501,889
Repurchase agreements
U. S. Treasury
4,603,884
secun~ties
27.120.
Totalagencyfunds
Pension
Trust
Uncategorized
I
investments
920,2461611
Securities
lending
short-term
collateral
investment
pool
Investmentsheldby broker-dealersundersecuritiesloanswithcash collateral:
Short-term
investments
Common and preferred
U. S. Treasury
48,889,711
93,432,509
securities
bonds
9,904,512
and notes
42,192,971
1 Investments:
Short-term
investments:
Time deposits
Repurchase
87,325,230
securities
Government
40,484,231
bonds
13,387,642
bonds
Common and preferred
Not on securities
U. S. Treasury
26,771,380
stock:
loan
On loan for securities
1,121,343,491
collateral
4,963,167
securities:
Not on securities
loan
On loan for securities
Asset-backed
24,000,000
agreements
Asset-backed
Corporate
230.557.553
12,729,740
stock
securities
Asset-backed
Category
793
Investments:
Mutual funds and short-term
Other
sa
Funds:
17,880,460
collateral
8,105,381
securities:
Not on securities
loan
On loan for securities
373,689,760
collateral
Otherbondsand notes- Noton securitiesloan
Total pension
trust
funds
'661,185
227
604
Total primary government
I s 4.300.550
IV-39
At 311818
30, 2003 <continued)
Comnonent
Pooled
Units
Investments:
Bankers acceptances
Commercial paper
U. S. Treasury securities
Mutual
B
57,477,690
99,818,400
86,664,967
20,329,803
funds
Repurchase
Total
agreements
pooled
investments
66
FCRHA- Repurchase agreements
Park Authority - Money market funds
Public Schools
- Pension
Uncategorized
Trust
190.148
17
fund:
Investments:
Mutual
funds
Money
market
252,618,665
funds
38,800,659
Securities
lending
short-term
collateral
investment
pool
130.776,104
investmentsheldby broker-dealersundersecuritiesloanswithcash collateral:
Short-term
investments
Common
U. S. Treasury
Category
50,271,357
securities
bonds
and
12,967,473
notes
22,522,904
1 Inves~nentr:
Short-term
inves~nents:
Commercial
paper
Asset-backed
Corporate
Common
.
36,199,394
securities
1,026,815
bonds
16,923,585
stock:
Not on securities
loan
On loan for securities
Preferred
595,749,596
collateral
1,108,469
stock
U. S. Treasury
Not on securities
Asset-backed
1,322,256
securities:
loan
On loan for securities
Other
37,529,192
securities
Asset-backed
Other
1,113,628
stock
8,263,351
collateral
2,359,176
securities
bonds
156,644,450
and notes
166
Total Public Schools - Pension trust fond
total
component
Reconciliation of the
Statements
of Net Assets
~532,456.406
units
to
rutalDCp~~ih
and~me.bnen~
1,823.140.746
Government
Governmentaland
Busine~s=rypeFiduciary
Activltiea Funds
A
A-
ComponentUnits
Total
Primary
Component Fiduciary
UnRr
Government
Funds
A
3-
Total
Component
bP~o~ed
Qshand
temporary
invesbnenh
J 772.971.9P3
12.716669785686.661
290.846.269290.890291.137.159
~fiscal agents
7,057,118
7.057.118
sh~dent activity funds
Ilateral for securities lending
230,557,553
ants
22,998,597 3,112,037,844
Id Assets:
inpooled
cashandtemporary
i
withfiscalagenb
~a~s~s~T
deposit
-performance
bonds
;h and investments
~osits,
including
Units
performance
182,725.342
1.737.032
1,607,669
14,626,436
14,626.436
130.776,104
3,135,036,441
1.401,680.302
130.776,104
1,401.680.302
182.725,342 15.225.912
1.737,032 f0.145,396
101
821.199
1
230,557,553
1,607,669
821.199 652.676
15 74
475 3
4.437
bonds
137,107.651
esbnenh
~osits
andinves~nenh
34
15.225,912
10,145.396
652.676
401
1
18
174
923.946
67.783.200
1.823.140.746
1.890.923.946
TV-40
"·
PROPERTYTAXES
Realestateis assessedon January1 eachyearat the estimatedfairmarketvalueof all landand
improvements. Real estate taxes
aredueinequalinstallments,
onJuly28andDecember
5. Unpaid
taxes
automatically
constitute
liensonrealpropertywhichmustbe satisfiedpriorto saleor transfer,andafterthree
years, foreclosureproceedingscan be initiated.
Personal property taxes on vehicles and businesspropertyare basedon the estimatedfairmarketvalueat
January 1 each year. The tax on a
vehiclemaybeproratedforthelengthoftimethevehiclehassitusin the
County. A declaration form is
required
tobefiled,andthereis a tenpercent
penalty
forlatefiling.Personal
property taxes together with
vehicle
decal
fees
are
onOctober
5,withcertain
exceptions.
Delinquency
noticesare sentbeforestatutory
measures,
such
asdue
the seizure
of propertyandthe placingof lienson bank
accounts andlor wages, are initiated.
Realestateandpersonalpropertytaxesnotpaidbytheduedatesareassessed
a tenpercentlatepayment
penaltyon thetax amount.Furthermore,
interestaccruesfromthefirstdayfollowing
theduedateat an
annual rate of ten percent forthefirstyearandthereafter
attheratesetbytheInternal
Revenue
Service.
The
net delinquenttaxes receivable,including
interestandpenalties,
asofJune30 2003,afterallowances
for
uncollectibleamounts,is $19,492,398,of which
$2,540,308
intaxrevenue
forfiscalyear
2003becauseit wascollected
within45daysafter
lune30. hasbeenincluded
Asrequired
byGAAP,theCountyreportsrealestateandpersonalpropertytaxes(netofallowances)
assessedfor calendaryear 2003 as receivables(netof taxescollectedin advance)anddeferredrevenue
becausetheCountyhasanenforceable
legalclaimto these resourcesat June 30 2003;however,these
resources,which amountto $1,905,968,500,willnotbeavailable
to theCountyuntilfiscalyear2004.
The 1998 Virginia GeneralAssemblyenacted the Personal Property Tax
Relief Act to provide
property tax
relief,scheduled
to bephasedinoverfiveyears,on the first $20,000of value of motor vehicles
not used for
business
purposes.Dueto budgetconstraints,
the2003Virginia
GeneralAssembly
hastemporarily
frozen
the tax reductionat 70 percent. The scheduledtax reductionsare reflectedin the County'sinvoicesto the
taxpayers. Following receipt bytheCounty
ofthereduced
taxamounts,
theCommonwealth
reimburses
the
County for the tax reductions
plus
certain
administrative
costs.
For
fiscal
year
2003,
this
revenue
from
the
Commonwealth totaled $195.434,234
andis reportedasintergovemmental
revenueintheGeneralFund.
TV-41
RECEIVABLES
Receivables and allowances for uncollectible receivables of the primary government at June 30, 2003,
consist of the following:
Nonmajor
Internal
General
Governmental
Enterprise
Service
Fund
Funds
Fund
Funds
Total
Total
Fiduciary
A
Funds
Primary
Government
ivables:
:counts
.crued interest
~operty
9
13,296,926
354.009
11,376,996
290,306
61,091
138,912
10,661
24,812,834
716.067
2,355.532
12,264,445
taxes:
Delinquent
Notyetdue
usiness license taxes - delinquent
sceivable from sale of pension
45;600,797
1,711,432,546
45,600.797
1,711,432,546
45,600,797
1,711,432,546
6,505,871
6,505,871
6,505,871
inves~nents
67,179.361
,ans
15,530,000
Dtes
15,530,000
4,960,234
Ireceivables
for
1.777
90
49
149
15,530,000
4,960,234
15
15
(281,781)
(281,781)
(26,108,399)
(6,559,800)
(26,108,399)
(6,559,800)
1
uncollecb'bles:
ccounts receivable
roperty
6
67.179,361
4,960.234
ther
vances
27.168,366
12,980,512
(281,781)
taxes:
Delinquent
Notyetdue
usiness
(26.108,399)
(6,559,800)
license
I allowances
for
taxes
- delinquent
4
4
uncollectibles
I net receivables
~e other receivables
191.740.167.204
amount
represents
31.875.755
the amount
61.091
149.573
1.772.268.775
due from fiduciary funds on a government-wide
81.799.338
1.854.068.113
basis.
Delinquent property taxes receivable from taxpayers in the General Fund as of June 30, 2003, consist of the
following:
Real
Year
of
2002
2001
2000
Prior
8
years
Total delinquent
Total
5,332,715
1,278,381
591,352
1.943
taxes
9.14
Penalty and interest
Total delinquent
Personal
Estate
taxes,
454
10,577,035
8,918,371
3,448,022
7
74
30
18
15,909,750
10,196;752
4,039,374
9
12
7
39,363,766
6,237,031
penalty
and interest
45,600,797
Allowances for uncollectibles
Net delinquent tax receivables
(26.108,399)
8 19,492,398
rV~2
7
Receivables of the component units, excluding fiduciary funds, at June 30, 2003, consist of the following:
Total
Public
Park
Schools
Component
FCRHA
Units
Receivables:
Accounts
Accrued interest
Notes
8
252,529
42,131
11,955,680
30,655
10,664,045
45,134
3,982
12,253,343
76,768
10,664,045
294,660
23,113,298
49,116
23,457,074
20.744
49.116
21
Other
18
Total receivables
Allowances
Total
net
for
uncollectibles
462
18
-
receivables
294
730
Amounts due to the primary government and component units from other governmental units at June 30,
2003, include the following:
Prima
Federal government
State
B
General
Fund
Funds
Fund
9,810,479
218,901
267,013
Enterprise
Component
Unit Public
Total
A
Schools
10,296,393
15,971,127
government:
Property
tax relief:
Delinquent
Allowance
Allowance
16,227,824
16,227,824
(9,720,646)
182,099,400
(9,720,646)
182,099,400
for
uncollectibles
Notyetdue
for
uncollectibles
Other
Local governments
Total intergovernmental
E.
Government
Nonmajor
Governmei~tal
units
(5,936,400)
23,672,138
1 22.788
208
117
4,967,069
157.956
14.93
504
110,700
1 763.670
19.093
71
(5,936,400)
28,749,907
20
414
2
60
14,650,902
177.499
30.799
INTERFUND BALANCES AND TRANSFERS
Payments for fringe benefits are
made throughthe GeneralFund
on behalf
of all funds
County. As a result, interfund
payables
primarily
represent
the
portionoffringebenefitstobe
paid by certainother fundsto
the GeneralFund. Interfund
receivables and payables are
also recorded
when
Interfund
Interfund
Receivables
of the
Primary
Government
General Fund
8
Nonmajor
Governmental
Funds
Enterprise
Fund
InternalServiceFunds
Fiduciary
Funds
Total primary government
3,658,653
299,089
3.583.846
168,664
190,080
15.152
I$
3,957,7421
3,957,742
funds
overdraw their share of pooled
Comoonent Unit
cash. All amounts are expected
to be paid within one year. The
Public Schools:
General Fund
9
composition of interfund
MajorGovernmentalFunds
balances as of June 30, 2003, is
Internal service Funds
as shownon the right.
Total component units
N-43
7,100,000
5,000,000
I
- 1
7.100.000
2,100
7.100
to/from primary government and component units represent amounts paid by one entity on behalf of the
otherentity.Dueto/fromprimarygovernment
andcomponent
unitsasofJune30,2003,areasfollows:
Receivable
Comoonent Units
Primary Government
Amount
Public Schools
Public Schools
Government-wide long-term obligation 8
General Fund
4,864,092
171,272
Park Authority
Park Authority
GeneralFund
NonmajorGovernmentalFund
1,408,066
94,937
EDA
General Fund
191
72
6.730
Total
Primary Government
Comoonent Unit
General Fund
FCRHA
NonmajorGovernmentalFunds
FCRHA
General Fund
Park Authority
g
64,976
1,591,703
108.487
1.765.166
Total
The primarypurposeof interfundtransfersis to providefundingfor operationsandcapitalprojects.
Interfundtransfersfor the year ended June 30, 2003, ate as follows:
Transfers
Primary
8
3,925,732
Nonmajor Governmental Funds
351,542,120
Internal Service Funds
900
Total primary government
Comnonent
357
349,294,037
6,373,815
1.700
357
52
Unit
Schools:
General Fund
Major Governmental Funds
Internal
Park
-Tran~fe~
Government
General Fund
Public
In
Service
8
29,153,500
28,860,258
Funds
293,242
-
Authority:
MajorGovernmentalFunds
Total component units
IV-44
163 7
3.163 17
6.717
16.717
F.
CAPITALASSETS
Capitalassetsactivityfor the primarygovernmentfor the year ended June 30, 2003, is as follows:
Balances
Primary
Government
Governmental
assets,
9
325,445,&11
6,998,307
(4,897,344)
327,546,804
52,122.448
377,568,289
28.849.776
35,848.083
(59.230,664)
f64.128.008)
21.741.560
349.288,364
213,749,719
33,458,568
690,802,643
58,906,867
23,647,481
5,992,678
33,898,023
1,831,502
(13,971,061)
223,426,139
39,451,246
724,700,666
60,738,369
376.552.368
1.373.470.165
38.972.799
104.342.483
(132,767,591)
(29,302,124)
(15,190,163)
(5,987,678)
(21,177,841)
(155,834,851)
(15,943,197)
(171,778,048)
(23,223,648)
(2,527,144)
(80.109,104)
(407.125,357)
966.344.808
(9.725.587)
(63,485.730)
40,856.753
Construction
inprogress
Totalcapitalassets,notbeingdepreciated
Capital
assets,
being depreciated:
Equipment
Librarycollections
Buildings
Improvements
Infrashucture
Totalcapitalassets,beingdepreciated
Less accumulated
depreciation
Librarycollections
Buildings
Improvements
Infrastructure
Totalaccumulated
depreciation
Totalcapitalassets,beingdepreciated,
net
capital
Business-type
assets,
net-
-
415.525.167
(13.971.061) 1.463.841.587
for:
Equipment
Governmental
activities
1,343,913.097
76.704.836
11,900,961
-
(150,168,754)
(25,750,792)
(89.834,691)
11.900,961 (458.710,126)
(2.070.100) 1.005,131.461
(66.198.108)
1.354,419,825
activities:
assets,
not being depreciated/amortized:
Land
17,346,080
165,278
117.678,608
135,024,688
14.648.472
14.813.750
(3.603.179)
(3.603.179)
128.723.901
146,235.259
9,353,179
537,865,741
55,221,333
947,112
30,215,213
(348,969)
9,951,322
568,080,954
55,221.333
685.599.012
1,288.039.265
8.974.716
40,137.041
694.573.728
(348.969) 1.327,827.337
(6,571,343)
(39,679,490)
(24,270,328)
(9391245)
(13,895,901)
(1,128,201)
345,632
(268.017.381)
(16.080.124)
(338,538.542)
(32.043,471)
949,500.723
8.093,570
Cons~uction
inprogress
Totalcapitalassets,notbeingdepreciated/amortized
Capital
,,..,,,.,,
not being depreciated:
Land
Capital
---. -----
activities:
Capital
Total
Balances
----
assets,
being depreciated/amortized:
Equipment
Purchasedcapacity
Buildings
Improvements
Totalcapitalassets,beingdepreciated/amortized
Less accumulated
17,511,358
depreciation/amortization
for:
Equipment
Purchasedcapacity
Buildings
Improvements
Totalaccumulateddepreciation/amortization
Totalcapitalassets,beingdeprea'ated/amortized,
net
Total capital assets, net - Business-type activities
Totalcapitalassets, net- Primarygovernment
1,084.525.411
8 2.428.438.508
IV-45
22,907.320
99,612,156
345.632
(3,337)
(3.606,516)
(7,164,956)
(53,575,391)
(25,398,529)
(284.097.505)
(370,236.381)
957.590.956
1.103.826.215
(69,804.624)2.458.246.040
assets activity for the component units for the year ended June 30, 2003, is as follows:
Balances
,mnonent
Pblic
Balances
3uh/ 1. 2002
Units
Increases
Decreases
3une 30, 2003
Schools
Capital
assets,
not being depreciat~d:
Land
9
43,410,537
3,407,980
300.848,525
344,259,062
126.489.907
129.897.887
(135,854.209)
(135.854.2091
291,484.223
338,302.740
129,255,868
20,678,288
737,127,063
12,474,731
3,706.781
11,243,491
(3,909,430)
137,821,169
24,385,069
748,370,554
701.764,145
1.588.825.364
124.665.267
152,090.270
(3.909.430)
826.429,412
1.737.006,204
(67,004,347)
(9,670,036)
(13,064,797)
(3,615,363)
3,235,904
(76,833,240)
(13,285,399)
(284,196,877)
(195.458.480)
(556.329.740)
1.032,495.624
1,326.754.686
(14,859,388)
(27.109.399)
(58,648.947]
93,441.323
223.339.210
Land
30,098,466
1,921,251
Constructionin progress
Totalcapitalassets, not beingdepreciated
10.942.126
41.040.592
1,755.325
3.676.576
Constructionin progress
Totalcapitalassets, not beingdepreciated
Capital
assets,
being depreciated:
Equipment
Library collections
Buildings
Improvements
Totalcapitalassets, beingdepreciated
Less accumulated
46,818,517
depreciation
for:
Equipment
Library collections
Buildings
Improvements
Totalaccumulateddepreciation
Totalcapitalassets, beingdepreciated;net
total capital assets, net - Public Schools
(299,056,265)
(222.567,879)
3,235.904
(611.742.783)
(673.526) 1.125,263,421
1136,527.735) 1.463.566.161
CRHA
Capital
Capital
assets,
assets,
not being depreciated:
31,963,418
2,674,619
34.638.037
(214.5075
(214.507)
148.731.021
151.420.761
(214.507)
(10.293,638)
being depreciated:
Equipment
Buildingsand improvements
fetal capitalassets, beingdepreciated
Less accumulated
(56,299)
(10,022.832)
(10.079.131)
deprecaaion
2,351,071
338,669
146.448.935
148,800.006
2,496.593
21835.262
2,689,740
for:
Equipment
Buildingsand improvements
Totalaccumulateddepreciation
Totalcapitalassets, beingdepreciated,net
Total capital assets, net- FCRHA
(2,391,115)
(93,250)
(2,484,365)
(60,007.939)
(62.399.0541
86.400,952
127,441.544
(5.132.699)
(5.225.949~
(2.390,687)
1.285.889
(65,140.638)
(67.625.003)
83,795,758
118,433.795
ark Authority
Capital
assets,
not being depreciated:
Land
246,872,703
5,478,485
Constructionin progress
Totalcapitalassets, not beingdepreciated
8,305.807
255.178.510
11.469.573
16.948,058
Capital
assets,
15,436.079
267.787.267
being depreciated:
Equipment
Buildings
and improvement;
Totalcapitalassets, beingdepreciated
Less accumulated
252,351,188
(4.339.301)
(4.339,3011
depreciation
11,589,747
702,781
(332,565)
11,959,963
176.925;599
188,515.346
4.339,301
5.042.082
(332.565)
181.264.900
193.224.863
(8,579,216)
(1,163,440)
289,525
(9,453,131)
(86.610.065)
(95,189.281)
93.326.065
348.504.575
(5.242.530)
(6.405,970)
(1.363.888)
15.584.170
z89.525
(43.040)
(4.382.341)
(91.852.595)
(101,305.726)
91,919.137
359.706.404
for:
Equipment
Buildingsand improvements
Totalaccumulateddepreciation
Totalcapitalassets, beingdepreciated,net
Total capital assets, net - Park Authority
DA
Capital assets, being depreciated - Equipment
7,002
6,560
Lessaccumulateddepreciation- Equipment
Total capital assets, net- EDA
(4.201)
2.801
(2.494~
4.066
'otal capital assets, net - Componentunits
$ 1.852.703.606
240.213.335
13,562
(6,695)
6,867
(151,203,714) 1.941.713.227
IV-46
I
and amortizationexpensefor the year ended June 30, 2003, charged to the functions of the
primary government and component units is as follows:
Primary
Governmental
Business-type
Activities
Activities
Component
Units
Government
General government administration
3udicialadministration
Public safety
Public works
Health and welfare
Community development
Parks, recreation, and cultural
g
8,420,610
1,246,143
9,220,686
10,558,238
3,906,827
12,755,839
8,168,040
32,043,471
In addition, depreciation on capital assets held by the County's
internal service funds is charged to the various functions
based
Com~onent
an their usage
Units
9,209,347
of the assets.
Public Schools
FCRHA
58,648,947
5,225,949
ParkAuthority
6,405,970
EDA
Total depreciation and amortization expense
i
494
63.485.730
043.471
70
G R&WBME~E~PIANS
Thereportingentityadministersthe followingfourseparatepublicemployeeretirementsystemsthatprovide
pensionbenefitsfor variousclasses of employees. In addition,professionalemployeesof Public Schools
participatein a plan sponsoredand administeredby the VirginiaRetirementSystem (VRS).
1.
Fairfax County Employees' Retirement System
Plan Description
TheFairfaxCountyEmployees'RetirementSystem(ERS)is a cost-sharingmultiple-employer
definedbenefitpensionplanwhichcoversonlyemployeesof thereportingentity.Theplancovers
full-timeandcertainpart-timeemployeesof thereportingentitywhoare not coveredby otherplans
of the reportingentity or the VRS. Informationregardingmembershipin the ERS is disclosedin
item
6 of this note.
Benefitprovisionsare estabhshedand may be amendedby Countyordinances, All benefitsvest at
five years of creditable service. To be eligible for normal retirement, an individual must meet the
followingcriteria:(0)attaintheage of 65 withfiveyearsof creditableservice,or (b) attaintheage
of 50 with age plus years of creditableservicebeing greater than or equal to 80. The normal
retirementbenefit is calculatedusing averagefinal compensation(i.e., the highest 78 consecutive
twoweekpayperiodsor the highest36 consecutivemonthlypayperiods)andyears(or partialyears)
of creditable service at date of termination. In addition, if normal retirement occurs before Social
Securitybenefits are scheduledto begin, an additionalmonthlybenefitis paid to retirees. Annual
cost-of-living
adjustmentsare providedto retireesandbeneficiaries
equalto the lesserof 4.0percent
or thepercentageincreasein theConsumerPriceIndexfor the Washington
ConsumerMetropolitan
IV-47
Service Area. The plan provides that unused sick leave creditmay be used in the calculation of
final compensation by projecting the final salary during the unused sick leave period. The
benefit for early retirement is actuarially reduced and payable at early termination.
The ERS issues a publicly available annual financial report that includes financial statements and
required supplementary information. That report may be obtained by writing to the Employees'
Retirement System, 10680 Main Street, Suite 280, Fairfax, VA 22030, orby calling (703) 279-8200.
Funding Policy
The contribution requirements of ERS members are established and may be amended by County
ordinances. Members may elect to join Plan A or Plan B. Plan A requires member contributions of
4.0 percent of compensation up to the Social Security wage base and 5.33 percent of compensation
in excess of the wage base. Plan B requires member contributions of 5.33 percent of compensation.
The reporting entity contributes at a contractually fixed rate of 6 percent of annual covered payroll.
This rate was established by the Board to cover the actuarially-determined normal cost plus
administrative expenses of the ERS. In the event the ERS's funded ratio (the ratio of the actuarial
value of assets to the actuarial accrued liability) exceeds 120 percent or falls below 90 percent, the
contribution rate will be adjusted to bring the funded ratio back within these parameters.
Annual
Pension
Cost
For theyears ended June 30, 2003, 2002, and 2001, the County's and Public Schools' annual pension
costs were equal to their annual required contributions (ARC), as follows:
Annual
Pension
Costs
2003
County
Public
iotal
8 26,707,817
Schools
18
for
Years
2002
22,800,675
9.700,304
8.283.130
36.408.121
31.083.805
Ended
~une
30
2001
21,993,157
7
29.960.984
For the year ended June 30, 2003, the actual contributions were $31,983,708 ($23,462,211 by the
County and $8,521,497 by Public Schools). For the years ended June 30, 2002 and 2001, the actual
contributions were equal to the annual pension costs, respectively.
The ARC for fiscal year 2003 were determined as part of the July i, 2001, actuarial valuation using
the entry age actuarial cost method. Significant actuarial assumptions used in the valuation include:
a.
b.
a rate of return on the investment of present and future assets of 7.5 percent per year
compounded annually, including an inflation component of 4.0 percent;
projected annual salary increases of 4.3 to 5.4 percent, including an inflation component of
4.0 percent; and
c.
post-retirement benefit increases of 3.0 percent compounded annually.
N-48
actuarialvalue of ERS's assets was determinedusing techniques that smooth the effects of
short-term volatility in the market value of investments
overa three-year
period.Anyexcessofthese
assets
over
actuarial
accruedliability
isamortized
asalevelpercentage
ofprojected
payrollon
a
rollingfifteen-yearweighted-average
basis. Ona weighted-average
basis,theremaining
amortization
period,
whichisclosedasofJulyI, 2002,is 15years.
Concentrations
The ERS does not have
investments
(other
thanIl.S.Government
andU.S.Government
guaranteed
obligations) in any oneorganization
thatrepresent5.0percentor moreofnet assetsheldin trustfor
pension benefits.
2.
FairfaxCountyPoliceOfficers
Retirement
System
Plan Description
The FairfaxCountyPolice OfficersRetirementSystem(PORS)
is a legallyseparatesingle-employer
definedbenefitpensionplan establishedundertheCodeofVirginiaTheplancovers
Countypolice
officerswho are not coveredby otherplansof the reportingentityor the VRSandformerPark
Police officers who elected to transfer to thePORSfromtheUniformed
Retirement
Systemeffective
January
22,1983.Information
regarding
membership
inthePORS
isdisclosed
initem6ofthis
note.
Benefit provisions are established
andmaybe amendedby Countyordinances.All benefitsvestat
fiveyearsofcreditable
service.Tobeeligiblefor normal retirement, an individual must meet the
following criteria: (a) if employedbeforeJuly 1, 1981; attain the age of 55
or have completed 20
yearsof creditableservice,or (b) if employedon or after July 1, 1981;attain the age of 55 or have
completed 25 years of creditable service.
Thenormalretirement
benefitis calculated
usingaverage
finalcompensation
andyears(orpartial
years)
ofcreditable
service
atdateoftermination.
Annual
cost-of-living adjustments
areprovided
toretirees
andbeneficiaries
equaltothelesserof4.0percent
or the percentage increase in
theConsumer
priceIndexfortheWashington
Consumer
Metropolitan
ServiceArea. The plan provides
thatunusedsickleavecreditmaybe usedin the calculationof
averagefinalcompensation
by projectingthefinalsalaryduringtheunusedsickleaveperiod.Tobe
eligible for early retirement, the
employee
musthave20yearsofcreditable
service
(doesnotapplyif
hiredbeforeJuly1, 1981).Thebenefitforearlyretirementis actuariallyreducedandpayableat
early termination.
ThePORS
issues
apublicly
available
annual
financial
report
thatincludes
financial
statements
and
required supplementary information. Thatreportmaybe obtainedby writingto thePoliceOff~cers
Retirement System, 10680 Main Street,Suite280,Fairfax,
VA22030,orbycalling(703)279-8200.
Funding Policy
:i
The contribution requirements
ofPORSmembers
areestablished
andmaybeamended
byCounty
ordinances. Member
contributions
arebasedon 12.0percentof compensation.
TheCounty
contributes
atafixedrateasdetermined
byanannual
actuarial
valuation,
unless
the
PORS's funding ratio falls outside of a pre-determined
corridor.Onceoutsidethe corridor,the rate
is either increased
ordecreased
to accelerate
ordecelerate
thefundinguntiltheratiofallsback
within the corridor The corridor for the PORS is a minimumfundingratio of 90 percentand a
maximum
funding
ratioof120percent.
Thefiscalyear2003employer
contribution
rateis17.3
percentof annualcoveredpayroll.
IV-49
Cost
FortheyearendedJune30,2003,theCounty'sannualpensioncostof $14,918,405
wasequalto its
annualrequired
contributions
(ARC),butmorethanits actualcontributions
of $12,923,806,
resulting
in a net pensionobligation(NPO) of $1,994,599reportedin the statementof net assets. For each of
the yearsendedJune30,2002and2001,the County'sannualpensioncostof $15,077,920and
$17,149,427,respectively,was equal to its ARC and actual contributions,
TheARCfor the yearendedJune30,2003,wasdetenninedas partof theJuly i, 2001,actuarial
valuation
usingtheent~iageactuarial
costmethod.Significant
actuarial
assumptions
usedinthe
valuation
a.
include:
a rateof returnon the investmentof presentandfutureassetsof 7.5percentperyear
compoundedannually,includingan inflationcomponentof 4.0 percent;
b.
projected
annualsalaryincreases
of4.5to 8.0percent,including
aninflationcomponent
of
c.
post-retirement
benefitincreasesof 3.0percentcompounded
annually.
4.0 percent; and
Theactuarialvalueof the PORS'sassetswasdeterminedusingtechniquesthat smooththe effectsof
shea-termvolatility
inthemarketvalueof investments
overa three-year
period.Anyexcessofthese
assetsovertheactuarial
accruedliabilityis amortized
as a levelpercentage
ofprojected
payrollona
fifteen-year
basis.Ona weighted-average
basis,theremaining
amortization
period,whichis closed
at July 1, 2002, is 15 years.
Concentrations
The PORSdoes not have investments(other than U. S. Governmentand U. S. Government
guaranteedobligations)in any one organizationthat represent5.0 percentor more of net assets held
in trust for pension benefits.
3.
Pairfax County Uniformed Retirement System
Plan Description
TheFairfaxCountyUniformedRetirementSystem(URS)is a single-employer
defmedbenefit
pensionplan.Theplancoversuniformed
employees
including
non-clerical
employees
oftheFire
andRescueDepartmentandOfficeof Sheriff,ParkPolice,HelicopterPilots,AnimalWardensand
GameWardenswhoare not coveredby otherplansof thereportingentityorthe VRS. Information
regarding membership in the URS is disclosed in item 6 of this note.
Benefitprovisionsare establishedand maybe amendedby Countyordinances.All benefitsvestat
five years of creditableservice. To be eligiblefor normalretirementan individualmust meet the
following
criteria:(a)attaintheageof 55withsixyearsofaeditableservice,or (b)complete
25
yearsof creditableservice.Thenormalretirementbenefitis calculatedusingaveragefinal
compensationand years (orpartial years) of creditableserviceat date of termination. Annual cost-
of-living
adjustments
areprovided
to retireesandbeneficiaries
equaltothelesserof 4.0percentor
thepercentage
increasein theConsumer
PriceIndexfortheWashington
Consumer
Metropolitan
ServiceArea. Theplanprovidesthatunusedsickleavecreditmaybe usedin the calculationof
averagefinalcompensation
byprojecting
thefinalsalaryduringtheunused·sickleaveperiod.Tobe
eligible for early retirement, employees musthave 20 years of creditable
early retirementis actuariallyreduced and payableat early termination.
rV-50
service.
The benefit for
URS issuesa publiclyavailableannualfinancialreport that includes fmancial statements and
required supplementary information. That report may be obtainedby writingto the Uniformed
Retirement
System,
1~80MainStreet,
Suite280,Fairfax,
VA22030,
orbycalling
(703)279-8200.
Fundine: Policy
The
contribution
requirements
ofURS
members
areestablished
andmaybeamended
byCounty
ordinances. Plan A members
weregiventhe opportunityto enrollin PlanB as of July 1, 1981andto
enroll in Plan C as of April i, 1997. From July 1, 1981throughMarch 31, 1997,all new hires were
enrolledin PlanB. PlanB membersweregiventhe opportunityto enrollin PlanD as of Aprili,
1997. FromApril i, 1997 forward all new hires are enrolledin Plan D. Plan A requires member
contributions of 4.0 percent of compensation
uptotheSocialSecuritywagebaseand5.75percentof
compensationin excessof the wage base. PlanB requiresmembercontributions
of 7.08percentof
compensation up to the Social Securitywagebaseand8.83percentof compensation
in excessof the
wagebase.PlanCrequires
member
contributions
of4.0percent
ofcompensation.
PlanDrequires
contributionsof 7.08 percentof compensation.
The County contributes at a fixed rate as detenninedby
an annual actuarial valuation, unless the
URS's funding ratio falls outsideof a pre-determined
corridor.Onceoutsidethe corridor,the rateis
either
increased
or decreasedto accelerateor deceleratethe fundinguntilthe ratiofallsbackwithin
the corridor. The corridor for the URS is a minimum funding ratio of 90 percent and a maximum
funding
ratioof120percent.
Thefiscal
year2003employer
contribution
rateis21.65
percent
of
annual covered payroll.
Annual Pension Cost
For the year ended June 30, 2003, the County's annual pension cost
of~$21,548,814wasequaltoits
annual required contributions
(ARC),
butlessthanitsactualcontributions
of$23,027,237,
resulting
in a negative
netpensionobligation
(NPO)of $1,478,423
reportedasan "otherasset"in the
statement
of net assets.
ForeachoftheyearsendedJune30,2002and2001,theCounty's
annual
pensioncost of $18,778,608and $18,818,351,respectively, was equal to its ARC and actual
contributions.
TheARCfortheyearendedJune30,2003,wasdetermined
aspartoftheJulyi, 2001,actuarial
valuationusing the entry age actuarialcost method. Significantactuarialassumptionsused in the
valuation
a.
b.
include:
a rateofreturnontheinvestment
ofpresent
andfutureassetsof7.5percent
peryear
compounded
annually,
including
aninflation
component
of4.0percent;
projectedannual salaryincreasesof 4.1 to 6.1 percent,includingan inflationcomponentof
4.0 percent; and
c.
post-retirement
benefitincreases
of 3.0percentcompoundedannually.
The actuarial value of URS's assets was determined using techniques that smooth the effects of
short-term
volatility
inthemarket
valueofinvestments
overathree-year
period.URS'sunfunded
actuarialaccruedliabilityis amortizedas a levelpercentageof projectedpayrollon a rollingfifteen-
year
basis.Theweighted
average
remaining
amortization
period,
whichisclosedatJulyi, 2002,is
15 years.
IV-51
TheURSdoesnot haveinvestments
(otherthanIl. S. Government
andU. S. Governmentguaranteed
obligations)
in any one organization
that represent5.0percentor moredf net assetsheldin trustfor
pension benefits.
4.
EducationalEmployees'
Supplementary
RetirementSystemofFairfaxCounty
Plan Description
TheEducationalEmployees'
Supplementary
RetirementSystemof FairfaxCounty(ERFC)is a
legallyseparatesingle-employer
retirement
systemestablished
undertheCodeofVitginia.The
ERFCcoversallfull-time
educational
andcivilserviceemployees
whoareemployed
bythePublic
Schoolsandwhoare not coveredby otherplansof the reportingentity.TheERFCcontainstwo
plans,ERFCandERFC2001.ERFCis theoriginaldefinedbenefitplaneffective
July1, 1973,and
remainsin effect. It is, however,closedto newmembers.EffectiveJuly 1, 2001,all new-hirefulltimeeducationalandcivilserviceemployeesare enrolledin theERFC2001plan. Thisnewdefined
benefitplanincorporatesastreamlinedstand-aloneretirementbenefitand allowsvested(afterfive
years)membersto have a one-timeirrevocableoption of transferringto a new definedcontribution
plan. Thedetailsof the newdefinedcontributionplanare stillbeingdevelopedandwillbe
incorporated into the plan document when finalized.
TheERFCandERFC2001plansprovideretirement,disability,and deathbenefitsto planmembers
andtheirbeneficiaries.Annualpost-retirement
increasesof 3.0percentareeffectiveeachMarch31.
Allbenefitsvestafterfiveyearsofcreditable
service.Benefitprovisions
areestablished
andmaybe
amended by the Fairfax County Public School Board: The ERFC plan supplements the Virginia
RetirementSystemplan. The benefit structureis designedto provide a level retirementbenefit
througha combinedERFCNRSbenefitstructure.TheERFC:2001planhasa stand-alonestructure.
Membercontributionsforthe ERFCandERFC2001plansare madethroughan arrangementwhich
resultsin a defe~alof taxeson the contributions.Furtheranalysisof membercontributionsmaybe
found in Article m of the ERFC and ERFC 2001 Plan Documents.
TheERFCandERFC2001plansprovidefor 12categoriesof benefitpayments.Minimum
eligibility
conditions
forreceiptof fullbenefitsrangefrommembers
attaining
theageof 55with25
yearsof creditableservicetocompletingfiveyearsof creditableservicepriorto age 65. A
descriptionof each of the 12 types of benefits paymentsis containedin the actuarialvaluationat
June 30, 2002. Total plan membershipfor the plans is disclosedin item 6 of this note.
TheERFCissuesa publiclyavailable
financial
reportthatincludesfinancialstatements
andrequired
supplementary
information.
Thatreportmaybeobtained
bywritingto theEducational
Employees'
Supplementary
RetirementSystem,8001ForbesPlace,Springfield,VA22151.
Funding: Policy
Thecontribution
requirements
for ERFCandERFC2001membersare establishedandmaybe
amendedby the ERFCBoardof Trustees.Ah membersare requiredto contribute2.0percentof
theircoveredsalaries.Theemployeris requiredto contributeat an actuariallydeterminedrate. For
fiscalyear2003,PublicSchoolsis requiredto contribute
4.0percentof annualcoveredpayrollfor
educationalemployeesand civil serviceemployees.
B~j
IV-52
PensionCast
Foreachof theyearsendedJune30,2003,2002,and2001,thePublicSchools'annualpensioncost
of $34,506,630,
$30,849,067,
and$29,145,883,
respectively,
wasequalto itsARCandactual
contributions.
TheARCfortheyearendedJune30,2003,wasdetermined
as partoftheJune30,2001,actuarial
valuation
usingtheentryageactuarialcostmethod.Significant
actuarial
assumptions
usedin the
valuation
a.
include:
a rate of return on the investmentof present and future assets of 7.5 percentper year
compounded
annually,includingan inflationcomponentof 4.0 percent;
b.
projected
annualsalaryincreases
of4.0to 8.2percent,including
aninflation
component
of
4.0 percent; and
c.
post-retirement
benefitincreasesof 3.0percentcompoundedannually.
Theactuarialvalueof theERFC'sassetswasdeterminedusingtechniquesthatsmooththe effectsof
short-term
volatility
inthemarketvalueofinvestments
overa five-year
period.Anyexcessof assets
overthe actuarialaccruedliabilityis amortizedas a levelpercentageof projectedpayrollovera
period of future years, which has never exceeded30 years. The remaining amortization period,
which is closed at June 30, 2002, was 30 years.
Concentrations
The ERFC plans do not have investments(otherthan U. S. Governmentand U. S. Government
guaranteed
obligations)
inanyoneorganization
thatrepresent5.0percentormoreof netassets
available
5.
for benefits.
Virginia Retirement System
Plan Description
PublicSchoolscontributesto the VirginiaRetirementSystem(VRS)on behalfof covered
professional
PublicSchools
employees.
VRSisa cost-sharing
multiple-employer
publicemployee
definedbenefitpensionplanadministered
bytheCommonwealth
ofVirginia
foritspoliticat
subdivisions.Allfull-time,salaried,permanentemployeesof participating
employersmust
participate in the VRS.
In accordance
withtherequirements
established
byStatestatute,theVRSprovides
retirement
and
disability
benefits,
annualcost-of-living
adjustments,
anddeathbenefitsto planmembers
and
beneficiaries.TheVRSissuesa publiclyavailableannualreportthatidcludesfinancialstatements
andrequired
supplementary
information
fortheVRS.Thisreportcanbeobtained
bywriting
tothe
Virginia
Retirement
System,
P.O.Box2500,Richmond,
VA23218-2500.
g
rV-53
Policy
Planmembersarerequiredby Statestatuteto contribute5.0percentof theirannuaicoveredsalaryto
the VRS. If a planmemberleavescoveredemployment,
the accumulated
contributions
plusinterest
earnedmaybe refunded.In accordancewithStatestatute,PublicSchoolsis requiredto contributeat
an actuariallydeterminedrate. Theratefor fiscalyear2003was3.77percentof annualcreditable
compensation.Statestatutemaybe amendedonlyby the Commonwealth
of VirginiaLegislature.
Public Schools' contributions to the VRS for the years ended June 30, 2003, 2002, and 2001, were
$33,837,799,$30,939,858,and $60,201,61, respectively,equal to the requiredand actual
contributions for each year.
6.
Current
Plan Membership
At July i, 2002(June30, 2002,for ERFC),the dateof the latestactuarialvaluations,membership
in
the reporting entity's plans consisted of:
Primarv
ERS
Retirees and beneficiariesreceiving benefits
Terminated employees entitled to, but not yet receiving, benefits
Activeemployees
Total number of plan members
4,164
413
14,185
18,762
Component
UnRPublic Schools
Government
PORS
657
9
1,192
1,858
URS
ERFC
663
24
1,625
2,312
6,375
1,362
16.074
23.811
Required
Supplementary
Information
Pensiontrend data, includingthe scheduleof fundingprogressand the scheduleof employer
contributions,can be found in the requiredsupplementaryinformationsectionimmediately
following the notes to the financial statements.
O
IV-54
RISK hlANAGEMENT
The reportingentity is exposedto variousrisks of loss relatedto torts, theft of, damageto, and destructionof
assets, errors and omissions, injuries to employees, and natural disasters.
TheCountyandPublicSchoolsmaintainself-insurance
internalservicefundsfor workers'compensation
claims and certainpropertyand casualtyrisks and for health insurancebenefits. The Countyand Public
Schoolsbelievethat it is more cost effectiveto managecertainrisks internallyrather than purchase
commercialinsurance. The FCRHA,ParkAuthority,and EDAparticipatein the County's self-insurance
program. Participatingfunds and agenciesare charged"premiums"which are computedbased on relevant
data coupledwith actual loss experienceappliedon a retrospectivebasis.
Liabilitiesare reportedin the self-insurancefunds when it is probablethat losses have occurredand the
amounts of the losses can be reasonably estimated. Liabilities include an amount for claims that have been
incurredbutnotreportedto date. Becauseactualclaimsliabilitiesdependon suchcomplexfactorsas
inflation,changesin governinglawsandstandards,andcourtawards,the processusedin computingclaims
liabilitiesis reevaluatedperiodically,to includean annual actuarialstudy,to take into considerationthe
history, frequency and severity of recent claims and other economic and social factors. These liabilities are
computedusing a combinationof actualclaims experienceand actuariallydeterminedamountsand include
any specific, incremental claim adjustment expenses and estimated recoveries.
The claimsliabilitiesin the self-insurancefunds are discountedat 5.5 percent at June 30, 2003 and 2002, to
reflect anticipatedinvestmentincome. Changesin the balancesof claims liabilitiesduringfiscal years 2003
and 2002
are as shown
below.
b
I
InLeinal
service
Fund.
Primary Government
Component Unit - Public Schools
Health
Self-Insurance
Liability balances, 3une 30, 2001
Claims and changes in estimates
Claims payments
Claims payments
Liability balances,
9 18,804,558
7,391,885
1
Liability balances, ~une 30, 2002
Claims and changes in estimates
3une 30, 2003
Health
Benefits
4,192,144
42,719,119
Insurance
18,960,866
2,032,032
(6,799,596)
(40,61_0994)
(4,991.539)
19,396,847
9,391,325
6,300,269
46,882,944
16,001,359
6,275,435
1
(7,543,626)
1 8 21,244,546
(46.087.628)
7,095.585
(6.022.257~
16.254.537
Benefits
Trust
10,039,133
113,611,060
(110.564.12
13,086,066
128,036,793
1125.236.001
15
In additionto the self-insuranceprogram,commercialpropertyinsuranceis carried for buildingsand
contentsplus certain large and costly items, such as fire apparatusand helicopters. Excessliabilityand
workers' compensationinsurancepoliciesare maintainedfor exposuresabove a $1,000,000self-insured
retention. Settledclaims have not exceededany of these commercialcoveragesin any of the past three fiscal
years.
IV-55
LONG-TERM OBLIGATIONS
Thefollowingis a summaryof changesin thegovernment-wide
long-termobligationsof the primary
governmentand componentunits for the year ended June 30, 2003 tin thousands):
Balance
~uly1.2002
Primary
Balance
Addibions
Due Within
Reductions ~une30.2003
OneYear
Government
Governmental
activities:
General obligation bonds payable:
Principal
amount
ofbondspayable
51.519,646 366,j34 (308,824) 1,577.156 132.620
Premium on bonds payable
5,025
Deferredamounton refundings
Revenue
bonds
(2,227)
24,444
(3,279)
(494)
186
28.975
(5,320)
4,178
(786)
payable:
Principal amount of bonds payable
Premium on bonds payable
106,650
70.830
4,796
(4,030)
173,450
4,796
4,240
314
Compensatedabsencespayable
Landfillclosureand postclosureobligation
72,558
65,770
48,251
(44,986)
(3.034)
75,823
621736
47,010
25,357
Obligations under capital leases
Insurance and benefit claims payable
50,958
25,697
1,565
56,274
(6,385)
(53,631)
46,138
28,340
8.234
14,721
(1,621)
4,864
1,995
2,185
960
450
1,621
Other:
Obligationto component unit
Net pension obligation
HUDSection 108 loan
Obligations for claims and judgments
Special assessment debt with governmental commitment
6,485
zoo
525
State LiteraryFundloans
Totalgovernmentalactivities
Business-type
Sewer
320
1.851.607
(115)
(200)
(75)
115
960
75
I89)
(423.298)
231
2.002.779
72
238.731
484,522
(10.249)
474,273
11.842
(926)
1.673
485.269
64
/1.037)
(il.ZZz)
(862)
1.854
475.265
(64)
1.149
12,927
574.470
activities:
revenue
bonds
payable:
Principal amount of bonds payable
Discounton bondspayable
Compensatedabsencespayable
Totalbusiness-typeactivities
Totallong-termliabilities- Primarygovernment
Comoonent
Public
1,995
2,300
960
1.218
1.218
82.336.876 575.688 (434.520) 2.478.044 251,658
Unitr
Schools
Compensatedabsencespayable
22,496
1.002
Obligations under capital leases
S
27.681
9,927
(9.629)
23.498
27,979
14,569
9.647
Insuranceand benefitclaimspayable
TotalPublicSchools
29.087
79,264
131.312
145.241
(131.258)
(140,887)
32.141
83.618
21,400
45,616
FCRHA
Revenue bonds payable
Notes payable
Compensated absences payable
11,972
67,697
840
859
61871
376
(311)
(7,927)
(382)
12,520
66,641
834
315
10,364
392
Other- Publichousing
loans
TotalFCR~A
1.803
82,312
8,106
(124)
(8.744)
1.679
81.674
134
11.205
(505)
13,230
530
Park
Authority
Revenue
bonds
payable:
Principal amount of bonds payable
Discounton bondspayable
Deferredamounton refundings
Revenue notes payable
Loans payable
Compensated
absencespayable
TotalParkAuthority
13.735
(94)
(895)
16.065
5
so
16,667
15,530
(18.289)
(89)
(845)
14,443
15,530
(5)
(50)
14,443
3.673
2.121
(1.934)
3,860
2,248
32.484
34.318
(20,673)
46.129
17.166
102
(96)
136
EDA
Compensatedabsencespayable
Totallong-termIlabillties
- Component
units
130
4 194~
187.76_7 (170.400) 211.557
105
74.092
Compensated
absencespayable,obligationsundercapitalleases,obligationto componentunit,and
obligationsfor claimsand judgmentsfor the primarygovernmentare liquidatedby the GeneralFund and
othergovemmentalfunds.
Thelandfillclosureandpostclosureobligationwillbe liquidatedby the Energy
Resource Recovery Facility Fund, a special revenue fund.
IV-56
i.
General Obligation Bonds
Generalobligationbondsare issuedto providefundingfor long-termcapital improvements.In
addition, they are issued to refund outstanding general obligation bonds when market conditions
enable the County to achieve significant reductions in its debt service payments. Such bonds are
direct obligationsof the County,and the full faith and credit of the County are pledgedas security.
The Countyis requiredto submitto public referendumfor authorityto issue generalobligation
bonds.
At June 30, 2003, the amount of general obligation bonds authorized and unissued is summarized as
follows tin thousands):
Bond
Purp_o_se
I
School improvements
Transportation
improvements
Parks and park facilities
1
1
Commercial and redevelopment
Neighborhood improvements
Human services facilities
Storm drainage improvements
area
improvements
I
Adult detention facilities
Public safety
~uvenile
Total
authorized
56,660
44,830
17,280
1,820
1,185
3,960
6,520
facilities
detention
Amount
~381,750
100i450
facilities
1
but unissued
bonds
Ir
900
615.355
The Commonwealthof Virginiadoes not imposea legal limit on the amount of generalobligation
indebtednessthat the Countycan incur or have outstanding, The Board of Supervisors,however,has
self-imposedbond limitsto providethat the County's net debt may not exceed three percentof the
total market value of taxable real and personal property in the County. In addition, the annual debt
service may not exceed ten percent of the annual General Fund disbursements. As a financial
guideline,the Boardof Supervisorsalso followsa self-imposedlimitationin total generalobligation
bond Lalesof $1 billionover a five-yearperiod or an averageof $200 million annually,with a
maximumof $225 millionin any given year. All self-imposedbond limits have been compliedwith
at June 30, 2003.
On March5, 2003,the Countyissued $171,165,000of Series 2005A GeneralObligationRefunding
Bonds dated February 1, 2003, with an average coupon interest rate of 4.59 percent. These bonds
were issued to currently refund $10,300,000 of outstanding Series 1993B Bonds, $132,845,000 of
outstanding Series 1993C Bonds, $1$,810,000 of outstanding Series 1994A Bonds, and $20,000,000
of outstanding Series 1995A Bonds with average coupon interest rates of 5.00, 5.30, 5.26, and 4.99
percent,respectively.Proceedsof $184,160,351,plus the County's $2,900,000total equity
contribution, were used to purchase U. S. Government securities which were deposited in an
irrevocableescrowfund to providefor the resourcesto redeem the Series 1993BBonds on April 10,
2003, the Series 1993C Bonds on May 1, 2003, and the Series 1994A and 1995A Bonds on June 1,
2003. The reacquisition prices exceeded the net carrying amounts of the refunded bonds by
$3,279,375,and this amountis being amortizedover the remaininglife of the refundedbonds. The
County refunded these bonds to reduce its total debt service payments over the next 9 years by
approximately $13.2 million and to obtain an economic gain (the difference between present values
of the debt service payments on the old and new debt) of approximately $12.8 million.
TV-57
In May 2003, the County issued $195,170,000 of Series 2003B General Obligation Public
Bonds dated May 15, 2003 to finance projects related to schools improvements, parks
and park facilities, public safety facilities, and other purposes.
Detailed information regarding the general obligation bonds outstanding as of June 30, 2003, is
contained
2.
in Section
Revenue
4 of this note.
Bonds
In March 1994, the EDA issued $116,965,000 of lease revenue bonds to finance the County's
acquisition of certain land and office buildings adjacent to its main government center. As the
County is responsible, under the related documents and subject to annual appropriation, to make
payments to a trustee sufficientt to pay principal and interest on the bonds, the related transactions,
including the liability for the bonds, have been recorded in the County's financial statements and not
in those
of EDA.
In October 1996, the FCRHA issued $6,390,000 of lease revenue bonds to finance the construction/
renovation of two community center buildings. In December 1998, the FCRHA issued $5,500,000 of
lease revenue bonds tofinance the renovation and expansion of a third community center building.
In May 1999, the FCRHA issued $1,000,000 of lease revenue bonds to finance the construction of an
adult day health care center to serve County residents. As the County is responsible, under the
related documents and subject to annual appropriation, to make payments to a trustee sufficient to
pay principal and interest on these bonds, the related transactions, including the liability for these
bonds, have been recorded in the County's financial statements and not in those of the FCRHA.
InJune2003,theEDAissued$70,830,000
of revenuebondsto financethedevelopment
and
construction of a public high school and a public golf course and related structures, facilities, and
equipment in the Laurel Hill area of the southern part of the County. As the County is responsible,
under the related documents and subject to annual appropriation, to make payments to a trustee
sufficient to pay principal and interest on the bonds, the related transactions, including the liability
for the bonds, have been recorded in the County's financial statements and not in those of EDA.
None of these revenue bonds nor the related payment responsibilities of the County are general
obligation debt of the County, and the full faith and credit of the County is not pledged to these
bonds for such payment responsibility.' Detailed information regarding the revenue bonds
outstanding as of June 30, 2003, is contained in Section 4 of this note.
3.
Sewer
Revenue
Bonds
In May 1993, the Sewer System issued of $72,100,000 of Series 1993 Sewei Revenue Refunding
Bonds,·with an average interest rate of 5.39 percent, to advance refund $64,500,000 of Series 1986
SewerRevenue. Bonds. The Series 1993 Refunding Bonds consist of $41,220,000 of serial bonds
bearing an average interest·rate of 4.86 percent, $22,395,000 of 5.5 percent term bonds due
November 15, 2013, and $8,485,000 of 5.65 percent term bonds due November 15, 2015. The term
bonds are subject to mandatory sinking fund redemption in varying amounts over fiscal years 2011
through 2016.
In July 1996, the Sewer System issued $104,000,000 of Series 1996 Sewer Revenue Bonds with an
average interest rate of 5.8 percent to fund the plant expansion of the wastewater treatment facilities
at theCounty's Noman M. Cole, Jr. Pollution Control Plant and other system improvements. These
Series 1996 bonds consist of $24,335,000 of serial bonds bearing an interest rate of 5.625 percent,
$17,705,000 of 5.7 percent term bonds due July 15, 2018, $23,970,000 of 5.8 percent term bonds due
IV-58
15, 2023, and $32,465,000 of 5 .875 percent term bonds due July 15, 2028. The $74,140,000 of
termbondsare subjectto mandatorysinkingredemptionin varyingamountsoverfiscalyears2015
through 2029.
The aforementioned sewer revenue bonds were issued in accordance with the GeneralBond
Resolutionadoptedby the Boardof Supervisorson July29, 1985,andarepayablefromandsecured
by the netrevenuegeneratedthroughthe SewerSystem'soperations.Accordingly,
the MasterBond
Resolutionincludesa ratecovenantunderwhichthe SewerSystemagreedthatit willcharge
reasonablerates for the use of and servicesrenderedby the SewerSystem. Furthermore,the Sewer
Systemwilladjustthe ratesfromtimeto timeto generatenet revenuessufficientto providean
amountequalto 100percentof its annualprincipalandinterestrequirements
andthe SewerSystem's
annualcommitments
to fundits proportionate
shareof otherjurisdictions'debtservicerequirements.
In addition,paymentof the principalandintereston all bondsis insuredby municipalbond
insurance policies.
In January1993,UOSA,ajoint venture,issued$63,310,000
of RegionalSewerSystemRevenue
RefundingBonds to refund certain outstandingbonds that had been issued to refund earlier bonds.
In January1996,UOSAissued$288,600,000
of RegionalSewerSystemRevenueBondsto finance
the cost of expanding the capacity of its wastewater treatment facilities from 32 MGD to 54 MGD
and$42,260,000
ofRegional
SewerSystemRevenue
Refunding
Bondsto refundcertainoutstanding
bondsthathadbeenissuedto financea priorexpansion.TheSewerSystem'sshareof thisdebtis
$240,773,145,
andit is subordinate
to the sewerrevenuebondsissuedby the SewerSystem.
In June 2001 and June 2002, the SewerSystemissued 20-yearsubordinatedsewerrevenuebonds in
the amountsof $40,000,000and $50,000,000,respectively,to the VirginiaWaterFacilities
RevolvingFund,actingby andthroughthe VirginiaResourcesAuthority.Theproceedshavebeen
usedto financea portionof the SewerSystem'sshareof incurredexpansionandupgradecostsof the
AlexandriaSanitationAuthority's wastewatertreatmentfacilities,which provideserviceto certain
Countyresidents.Thebondsbearinterestratesof 4.1 percentper annumand3.75percentper
annum,respectively,and collectivelyrequire semi-annualdebt servicepaymentsof $3,318,536. The
bondsare subordinated
to all outstandingpriorbondissuesof the SewerSystemandpaymentsfor
operation and maintenance expenses.
Detailed informationregardingthe sewer revenuebonds outstandingas of June 30, 2003, is
contained
in Section 4 of this note.
IV-59
County Debt and Related Interest to Maturity
The County's outstanding general obligation bonds, State Literary Fund loans, revenue bonds,
special assessment bonds, HUD Section 108 loans, Sewer System revenue bonds, and the related
interest to maturity as of June 30, 2003, are comprised of the following issues:
Total Principal
Outstanding
&
Annual
Interest
Rate
ries
,vernmental
:neral
Final
Maturity
(%)
Date
Date
Principal
Payments
(000)
Original
Issue
(000)
Principal
Outst~nding
(ooO)
Interest Payable
to Maturity
~000)
Interest Payable
b,MabJrity
(000)
activities:
Obligation
General
Issue
Bonds:
County:
Series
Series
Series
Series
Series
Series
Series
Series
1996A Public Improvement
1997A Public Improvement
1998A Public Improvement
1999A Public Improvement
1999A Refunding
19998 Public Improvement
ZOOOAPublic Improvement
20008 Public Improvement
4.75-5.50
5.00-6.00
4.50-5.00
4.13-5.00
4.13-5.00
5.00-5.50
5.00-5.50
4.25-5.13
05-15-96
05-15-97
05-15-98
04-01-99
04-01-99
12-01-99
04-01-00
12-01-00
06-01-16
06-01-17
06-01-18
06-01-19
06-01-19
12-01-19
06-01-20
12-01-20
~ 2.511-2,514
3,450
2,435
2,730
1,267-8,379
180
1,900
110-115
50,250
69.000
48,710
54,200
76.043
3,600
38,000
2,250
32.638
48,300
36.532
43,360
68,178
3.060
32,300
2,020
12,252
18.741
14,516
17.097
19886
1,423
15,098
879
44,890
67,041
51,048
60.457
88,064
4,473
47,398
2,899
Series
Series
Series
Series
Series
2001A Public Improvement
t001A Refunding
Z0OZA Public Improvement
ZOOZA Refunding
2003A Refunding
4.25-5.00 06-01-01
4.25-5.0006-01-01
3.50-5.00 06-01-02
3.50-5.00 06-01-02
2.25-5.0002-01-03
06-01-21
06-01-10
06-01-22
06-01-15
06-01-12
2,120
3,281-17,009
3,400
1;680-3,421
3,650-16,203
42,400
82,238
68,000
26,149
82,407
38,160
81,607
64,600
23,517
82,407
16,894
11,850
34206
6,722
15,556
55,054
93,457
94,806
30,239
97,963
2.00-5.00
06-01-23
3,315-3,330
Series 20038 Public Improvement
05-15-03
Total general obligation bonds - General County
66.490
66.490
30,560
97,050
709.737
623,169
211.670
834.839
Schools:
Series
Series
Series
1996A Public Improvement
1997A Public Improvement
19978 Public Improvement
4.75-5.50
5.00-6.00
4.50-5.00
05-15-96
05-15-97
12-01-97
06-01-16
06-01-17
12-01-17
3,194-3,196
3,750
3,000
63.900
75.000
60,000
41,542
52,500
45,000
15.594
20,364
16,688
n,136
72,864
61,688
Series 1998A Public Improvement
Series 1999A Public Improvement
Series 1999A Refunding
Series 19998 Public Improvement
Series ZODOAPublic Improvement
4.50-5.00
4.13-5.00
4.13-5.00
5.00-5.50
5.00-5.50
05-15-98
04-01-99
04-01-99
12-01-99
04-01-00
06-01-18
06-01-19
06-01-19
12-01-19
06-01-20
1,365
5,000
1,053-6,961
4,000
2,500
27.290
100,000
63,172
80,000
50,000
20,469
80,000
56,637
68,000
42.500
8,132
31,545
16,521
31,407
19,868
28,601
111,545
73,158
99,407
62~68
Series
Series
Series
Series
4.25-5.13
12-01-00
4.25-5.00
16-01-01
4.25-5.0006-01-01
3.50-5.00 06-01-02
12-01-20
06-01-21
06-01-10
06-01-22
2,500
4,000
2,284-11,836
6.500
50,000
80.000
57,227
130,000
45,000
72,000
56,788
123,500
19,835
31,873
8,246
n,744
64,835
103,873
65,034
181,244
Series 2002A Refunding
Series 2003A Refunding
3.50-5.00 06-01-02
2.25-5.0002-01-03
06-01-15
06-01-12
1,410-4,474
3,935-17,447
34,786
88,758
32,613
88,758
10,454
16,757
Series 20038 Public Improvement
2.00-5.00 05-15-03
06-01-23
20008Public
Improvement
2001A Public Improvement
2001A Refunding
2002A Public Improvement
6,430-6,435
Total generalobligation
bonds - Schools
Total general obligation bonds
128.680
1.088.813
S 1.798,550
IV-60
128,680
953.987
1.577.156
59,194
364,222
575,892
C
43,067
105,515
187.874
1.318,209
2.153,048
Interest
Series
Revenue
Rate
Principal
Issue Maturity Payments
Date Date
Bonds:
EDA Revenue
Principal
Annual
Final
Original
issue
000
Series1994(LeaseRevenue)
FCRHA Lease
5.25-5.5003-01-94 11-15-18$ 3.745-8,550
2.0-5.0 06-01-03 06-01-33
105-4,240
Revenue
Bonds:
Series 1996
5.10-5.55 09-15-96 06-01-17
Series
1998
3.70-4.8512-01-98
06-01-18 220-390
Series 1999
4.30-5.38 05-27-99
255-505
05-01-29
20-65
Total
revenue
bonds 4.15-6.67
HUDSection 108 Loan
07-01-01 08-01-21
Special Assessment Bonds - Small District One of the Dranesville District
(McLeanCommunityCenter)
to Maturity
000
Science
Lab#1
Science
Lab#2 Total
State Literary Fund
Revenue
70,830
6.390
5,500
92,150
48,248
140,398
70,830
47,705
118,535
5,100
2,341
7,441
965
835
4,405
1.000
1,784
6.189
1.800
173.450
100.913
274.363
115
2.300
2.185
1.289
3.474-
75
1.500
450
98
548
64
8
1,274
148
192
39
12
7
204
46
6.90-7.40 07-01-88 07-01-09
Total
governmental
activities
Business-type
activities:
116.965
200.685
State Literary Fund Loans - Schools:
3.2404-01-86
04-01-06
5.00
10-01-87
10-01-08
loans
---. ~--'---
Bonds:
Series1993 Refunding
5.00-5.6505-15-93 11-15-15 3;025-6,505
UOSA
BondsSubordinated
2.90-6.0001-12-93
07-01-293,431-15,574 240,773
Series1996 SewerImprovements 5.63-5.8807-01-96 07-15-28 1,510-7,300
Series2001Subordinated
4.1006-01-0102-01-21 1,401-2,910
3.75 09-01-02 03-01-22
881-3,538
SeriesZOOZ Subordinated
Total business-type
County
Outstanding to Ma~unty
000
Bonds:
Series 2003
Sewer
Outstanding
$
Principal InterestPayable InterestPayable
activib'es
bond
_
and loan indebtedness
72,100
58.660
230,100
104,000
98,475
40.000
50,000-
37.919
49,119
506.873
9 2.511,330
22,453
81,113
187.129
417,229
93,184
191,659
16,068
53,987
19,999
69,118
474,273
338.833
813.106
2,227.745
1,017.044
3.244.789
hincipalandinterestto maturitytinthousands)
fortheCounty'sgeneralobligation
bonds,revenue
bonds, other bonds and loans,
follows:
Governmental
General Obligation
Bonds
FiscalY
Interest
2004
9 132,620 73,019
2006
123,930 61,886
2005
2007
2008
Activities
Revenue
Bonds
Interest
4,240
23,632
8,216
262
136
13,055
22,386
7,968
156 575
7.697
48,965 32.569
58,600 19,193
29,315 5,588
4,735 1,826
262
151
198
123
650
417
197
575
460
5
728
173.450 100.913
111
244
61
1.406
Z)
IV-61
Total
Interest
11,842
5,045
2014-2018 320,930 75,860
2019-2023 139,390 15,400
2024-2028
System
163
124,125 56,582
7,815
Interest
Sewer
Revenue
Bonds
262
8,453
118,925 50,553
Loans
8,675
4,450
4,690
Business-Type Activities
Other Bonds and
128,421 67,386
2009-2013 488,815 175,206
2029-2033
Totals
and Sewer Systemrevenuebonds outstandingat June 30, 2003, are as
Interest
148,9~4
121288 23,025
145,421
14,319 21,701
143,687
15,115
90,405
98,679
97,335
98,361
474
20,993
92,574
68,273
44,682
20,613
954
141,937
142,052
628,835
478,784
2661500
103,096
105,489
99,015
92,624
86,374
79,354
300,766
163,570
65,731
22,439
28.469
227.745 1
17.044
In June1989,theFCRHAissued$6,120,000of 8.95percentElderlyBonds,Series1989A.On
August 29, 1996, on behalf of the Little River Glen project,the FCRHAissued FHA insured
mortgage
revenue
bondswithanoriginal
principal
amount
of$6,340,000
andinterest
rateswhich
varybetween
4.65and6.10percent
withfinalpayment
dueSeptember
1,2026,toredeem,
through
advancerefunding,the ElderlyBondson June 1, 1999.
In November1992,the FCRHAissued$3,910,000of speciallimitedobligationbonds,carryinga
couponinterestrate of 7.5 percent,payablesemi-annuallyand maturingJune 15, 2018. The
proceeds
ofthebondswereusedtofinance
thepurchase
oftheFCRHA's
FenderDriveoffice
building.
In June1998,theFCRHAissuedSeries1998LeaseRevenueBondswithan original
principal
amount
of$3,630,000
andaninterest
rateof4.71percent
withfinalpayment
dueJune15,
2018,to advancerefundtheoutstanding
speciallimitedobligation
bonds.Thenewbondsare
betweenFCRHAandthe
secured by the FCRHA's interestin paymentsundertheleaseagreements
County,wherebythe FCRHAleases its FenderDrive officebuildingto the Countywith a first deed
of truston the officebuilding.Proceedsfromthe newbondsalongwithothercashresources,
escrowaccountsto providefor all
totaling approximately $4,000,000, wereplacedin irrevocable
futuredebtservicepayments
ontheoldbonds,whichwillbe redeemed
onJune15,2018.These
bonds are not obligations of the County.
InAugust1997,FCRHA
issuedtax-exempt
revenuebondswitha principal
amounttotaling
$2,875,000
withaninterestrateof6.1percentandfinalpayments
dueJuly1,2027.The-land
building, and equipment of the Herndon Harbor House Limited Partnership are pledged as security
for thebonds. Proceedsfromthe bondswereplacedin irrevocableescrowaccountsto makea loan
to the Herndon Harbor House Limited Partnership to finance a portionof the cost for the acquisition,
construction, and equipping of the rental facility.
revenuebondswitha principalamounttotaling
In April 1998, FCRHA issuedtax-exempt
$1,700,000,
aninterestrateof5.25percent,and finalpayments
dueMarchi, 2028.In2001,a
principal
payment
of$825,000
wasdue,atwhichtimetheinterest
ratewaschanged
to6.15percent.
Theland,building,
andequipment
oftheCastellani
Meadows
LimitedPartnership
arepledgedas
security
forthenewbonds.Proceeds
fromthenewbondswereplacedinirrevocable
escrowac-
countsto make a loan to the CastellaniMeadowsLimitedPartnershipto finance a portion of the cost
for the acquisition,
construction,
andequippingof the rentalfacility.
InMay1999,
theFCRHA
issued
twomultifamily
housing
revenue
bondsintheprincipal
amounts
of
$225,000
and$1,775,000,
bearinginterestattheratesof4.875percentand5.5percent,respectively,
and havingfinal paymentdates of May i, 2009 and May i, 2029, respectively. The proceeds of
thesebondswereplacedin irrevocable
escrowaccounts
to providea loanto theHerndon
HarborII
LimitedPartnership
to financea portionof thecostsfortheacquisition,
construction,
andequipping
of the HerndonHarborrental property,which is pledgedas securityfor the bonds.
To permanentlyfinancecertainpublichousingprojects,theFCRHAissuedpublichousingnotesto
eachNovember1,until
the Federal Financing Bank. These notes arepayablein annualinstallments
maturityin 2015, with interestat 6.6 percent. They are securedby the projects' land, buildings,and
equipment. Principaland interestis paidannuallyby HUDundertheAnnualContributions
Contract.
To permanentlyfinance the Rosedalepublichousingproject,the FCRHAissuedpublichousing
bondsintheoriginalprincipal
amountof $1,260,000
withinterestat 5.0percentmaturing
Aprili,
2009. Principal and interest is paid semi-annuallyby HUDunder the Annual ContributionsContract.
IV-62
FCRHAPublic Housing bonds, notes, and loans payable as of June 30, 2003, excluding its
i
component units, are as follows:
Annual
Interest
Series
SecuredBy
Housing
Bonds
LittleRiver Glen rental property
Lease revenue bonds
FCRHA revenues
Tax-exempt revenue bonds
Multi-familyrevenue bonds
Multi-familyrevenue bonds
Total bonds payable - FCRHA
Herndon Harbor I - rental property
Herndon Harbor II - rental property
Castellani Meadows
Notes
Bank of America
Principal
Outstanding
(000~
(000)
100
6,340
5.760
125
3.630
3,010
16-30
30-40
14-20
2.875
2.000
1.700
16,545
944
1,961
845
12.520
13-18
20-35
30-40
363
400
550
278
298
432
21-31
615
530
7-12
35-49
285
50
55-205
1.072
1.112
5.690
500
1.700
796
302
2,555
150
555
155
195-205
5
3,100
3.775
80
1,550
2,215
45
varies
varies
25
500
1,510
325
1,318
30 day UBOR 08-23-99 08-01-17
Int only
215
215
2-16
4.71
06-15-18
6.10 0&01-97 07-01-27
4.875-5.50 05-01-99 05-01-29
6.15 04-01-98 03-01-28
Leland Road Group Home property
5.55 10-06-99 04-01-17
Town,
Mclean
8.50
3.00
6.45-9.15
5.36-7.66
8.00-9.25
04-01-95 04-01-05
07-12-98 04-01-10
02-01-92
varies
08-01-96
varies
02-01-91
varies
Various FCRHA rental pioperb'es
Various FCRHA rental properties
Various FCRHA rental properties
3.73-7.90
4.75-7.18
5.36-7.66
02-01-93
08-01-94
08-01-96
Various FCRW\rental properties
Cedar Ridge rental property
5.36-7.66 08-01-96
1.00 05-24-95
FCRHA rental
:
properties
-
varies
varies
varies
900/0 of
Minerva Fisher-Hall Group Home
DevelopmentAuthority
property
Penderbrook
8.d7 07-01-79 06-01-19
437
329
09-01-88
10-01-18
16-25
770
639
8.00
8.00
8.00
8.00
8.00
09-21-00
06-01-02
01-01-93
01-01-92
01-30-95
09-01-20
05-01-22
04-01-22
11-01-02
03-01-05
5-20
3-22
5-15
15-20
6-8
234
239
246
842
453
219
234
211
728
411
9.00-12.50
varies
varies
5-6
65
52
83% of
30 day UBOR
varies
varies
Int only
178
178
10-01-02
10-01-05
Int only
1.263
1.263
475
10,131
471
9,642
rental property
10.25
RollingRoad Group Home property
Patrick Street Group Home property
MountVernon Group Home property
West Ox Group Home property
First Stop Group Home property
within the
Home Improvement Loan Program
Various
properties
Various properties;
Sun Trust
Various
Bank
owned
by note
holders
Sun Trust Bank
properties
interim financing
- interim
financing
30 day UBOR
plus 0.5%
MidlandLoan Services
HopkinsGlen rental property
Cedar Ridge rental property
FairfaxCountyBoardof Supervisors UnsecuredBondAnb.cipaBon
Note
Unsecured Bond AnticipationNote
Unsecured Bond AnticipationNote
Unsecured Bond AnticipationNote
Unsecured Bond AnGcipationNote
Unsecured Bond AnticipationNote
Unsecured Bond AnticipationNote
Unsecured Bond AnticipationNote
Unsecured Bond AnBcipab~on
Note
Unsecured Bond AnticipationNote
WMF
HuntoonPaige
Cedar Ridgerentalproperty
FederalFinancing
Bank
Property,plant,and equipment
Totalmortgagenotes payable- FCRHA
Loans
01-31-04
04-01-13
07-01-12
Spn'ngfieldGreen rental pmpertie:
HopkinsGlen rental property
Various FCRHArental properties
Various FCRHArental properties
Stonegate Village rental property
Virginia Housing
note holders
11-01-97
08-25-98
06-25-99
Hills and
Section 108 interim financing
Housing
06-15-98
5.75
4.71
7.10
Various
Public
(00_0)
4.65-6.10 08-29-96 09-01-26 $
One University Plaza office building
United Community Ministries
Creighton Square
Cholster
U.S. Dept of Housing
and Urban Development
Various
Date
Original
Issue
Payable:
United Bank
SunTrust Bank
8
Date
Total
Principal
Payments
Payable:
Mortgage revenue bonds
Mortgage
Issue
Rate(%)
Final
Maturity
4.33 12-02-02 10-01-16
7.05 07-01-95 07-01-35
8
77-100
1.27 07-13-0107-13-03
Int only
700
700
1.27
1;27
1.27
1.27
1.27
1.27
1.27
1.27
1.27
Int only
Int only
Int only
Int. only
Int only
Int only
Int only
Int only
Int only
1,000
2.400
200
400
500
500
500
800
1,000
1,000
2,400
200
400
500
500
500
800
1.000
10-16-01 10-16-03
02-13-02 02-13-04
11,17-02 11-17-03
03-07-03 0307-05
05-06-03 05-06-05
02-21-03 02-21-05
03-20-03 03-20-05
05-06-0305-06-05
06-26-03 06-26-05
7.05 11-01-7009-01-10
6.60 07-09-8211-01-12
90-100
40-55
2.850
1.143
48.508
797
599
35.337
6.60 02-05-8211-01-15
5.00 04-01-6804-01-09
74-100
50-60
Z,348
1.260
3,608
9 68.660
1.309
370
1.679
49.536
Payable:
Public housing notes -
The projects' land, buildings, and
FederalFinancingBank
equipment
Publichousingbonds
Declarationof Trust
Totalpublichousingloanspayable- FCRHA
Totalpublichousingbonds,notes,and loanspayable- FCRHA
primarygovernment
IV-63
FCRHA's annual required principal payments on the bonds, notes, and loans payable, excluding
its component units, at June 30, 2003, are as follows:
component
Housing
Bonds
Mortgage
Payable
Principal
Interest
Fiscal Year
2004
9
Unit - FCRHA (Primarv
Notes
Covernment~
Public Housing
Payable
Principal
Interest
Loans
Payable
Principal
Interest
Total
Principal
Interest
315,114
710,278
8,350,683
1,768,777
133,945
105,130
8,799,742
2,584,185
2005
334,214
693,620
4,708,519
1,576,022
143,933
97,392
5,186,666
2,367,034
2006
358.577
675,716
2,164,409
1,400,478
149,695
88,630
2,672,681
2,164,824
2007
368,213
656,785
1,185,647
1,309,279
160,616
79,710
1,714;476
2,045,774
2008
393,143
637,236
1,200,854
1,225,940
166,926
70,149
1,760,923
1,933,325
2009-2013
2,326,247
2,832,662
7,127,672
4,825,212
684,597
210,528
10,138,516
7,868,402
2014-2018
3,065,455
2,105,327
2,546,961
3,316,798
239,072
29,606
5,851,488
5,451,731
2019-2023
2,453,781
1,306,191
1,910,625
2,511,602
4,364,406
3,817,793
2024-2028
2,795,378
437,906
1,952,846
1,846,680
4,748,224
2,284,586
2,775,293
1,024,233
2,884,851
1,026,990
1.413.754
106.161
1.413.754
2029-2033
109,558
21757
2034-2037
Totals
9 12.519.680
6.
10,058.478
Park Authority
35.337.263
20.911,182
1.678.784
681.145
49.535.727
106.161
31.650,805
Bonds, Loans, and Notes Payable
In February 1995, the Park Authority issued $13,870,000 of Park Facilities Revenue Bonds, Series
1995, to fund the construction of additional golf facilities for County residents and patrons. On
September 20, 2001, the Park Authority issued $13,015,000 of Park Facilities Revenue Refunding
Bonds, Series 2001, dated September 15, 2001, with an average interest rate of 4.36 percent to
advance refund $11,670,000 of the outstanding Series 1995 Bonds with an average interest rate of
6.62 percent.
In June 2003, the Park Authority received a $15,530,000 loan from the County to fund the
development and construction of a public golf course and related structures, facilities, and equipment
to be located in the Laurel Hill area of the southern part of the County.
Thebonds and loan ate solely the obligation of the Park Authority and are payable from the Park
Revenue Fund's revenues from operations, earnings on investments, and certain fund balance
reserves. The debt service requirements for the outstanding bonds and the loan payable to the
County are as follows:
Unit-
Fiscal
Year
2004
Revenue
Interest Rate
4.39 %
$
Bonds
530,000
Interest
537,446
Interest
Park
Loan Payable to County
Rate
Principal
Interest
- O/o S
687,362
Total
Principal
530;000
Interest
1,224,808
2005
2.95
555.000
515,809
687.362
555,000
1.203,171
2006
3.10
570.000
498,788
687,362
570,000
1,186,150
2007
2008
3.20
3.40
585,000
605,000
480,592
460,948
687,362
685.863
660,000
685,000
1.167,954
1,146,811
2009-2013
3.60-4.10
3,365,000
1,946,538
2014-2018
4.20-4.50
4,095,000
1,175,620
2.925,000
212,681
2019-2023
75,000
80,000
2.50-5.00
765,000
3,382,863
4,130,000
5,329,401
5.00
1,660.000
3,134,563
5,755,000
4.310,183
5.00
2,965.000
2,597,063
5,890.000
2,809,744
2024-2028
4.25
4,455,000
1,762.050
4,455,000
1,762,050
2029-2033
4.25
5.530,000
Totals
4.75
2.00
2.25
B 13.230.000
5.828.422
8 15.530.000
TV-64
724.625
15.036.475
5.530.000
28.760,000
724,625
20.864.897
fiscal year 2000, the Park Authorityissued a subordinated park facilities revenue note in the
amountof $12,750,000to financethe acquisitionof certainpropertiesfor use as parkland. Thenote
wasredeemedduringfiscalyear2002viathe issuanceof a newnotein the amountof the maturing
principalplusthe accruedinterest.A similarredemptionand issuanceoccurredin July2002. The
Countyhas agreedto providetheParkAuthoritywiththe fundsneededto meettheprincipaland
interestpaymentobligationsof this note from the County's GeneralFund. Relevantinformation
pertaining to these notes is as follows:
Issue Dates
Maturity Dates
March 30, 2000
7.
Principal
Interest Rate
3uIy 31, 2001 S 12,750,000
6.825 %
~uly 31, 2001
-luly 31, 2002
13,912,667
3.810
~uly 31, 2002
3uly 31, 2003
14,442,740
2.030
Conduit Debt Obligations
TheFCRHAis empoweredby theCommonwealth
of Virginiato issuetax-exemptbondson behalfof
qualifiedbusinessesto developor rehabilitatelowincomehousingwithinthe County.Principaland
intereston the tax-exemptbondsarepaidentirelyby the ownersof the properties,whohaveentered
intobindingcontractsto developor rehabilitatethe subjectproperties.The termsof the tax-exempt
bondsstipulatethatneithertheFCRHAnor the Countyguaranteesthe repaymentof principaland
interest to the bondholders.
A bondholder'ssole recoursein the event of default on the tax-exempt
bondsis to the subjectpropertyandthird-partybeneficiaries.Accordingly,
thesebondsarenot
reportedas liabilitiesin the accompanying
financialstatements.As of June30,2003,approximately
$174 million of such tax-exemptbonds are outstanding.
TheEDAis empoweredby the Commonwealth
of Virginiato issueIndustrialRevenueBonds(IRBs)
on behalfof businessesrelocatingandlorexpandingtheiroperationswithinthe County.Principal
andintereston the IRBsare paidentirelyby the businesses.Thetermsof the IRBsstipulatethat
neitherthe EDA nor the Countyguaranteesthe repaymentof principaland interestto the
bondholders.Accordingly,
thesebondsare notreportedas liabilitiesin the accompanying
financial
statements.As of June 30, 2003, the principalamountsoutstandingon these IRBs total
approximately $546.8 million.
8.
Defeasance
of Debt
Duringfiscalyear2003andin prioryears,theCountyhas defeasedcertainoutstandingbondsby
placingthe proceedsof newly issuedbonds in irrevocableescrowfunds to providefor all future debt
service payments on the old bonds. Accordingly, the escrow fund assets and the liabilities for the
defeased bonds are not included in the financial statements. As of June 30, 2003, the amount of
generalobligationbonds for the Countythat are outstandingbut considereddefeasedis
$178,955,000.
9.
Sanitary Landfill Closure and Postclosure Obligation
State and federal laws requirethe Countyto place a final cover on its I-95 SanitaryLandfillwhen it
stops acceptingwaste and to performcertain maintenanceand monitoringfunctionsat the site for 30
B
years after closure. The existing raw waste units are filled to capacity; whereas, the ash disposal
IV-65
continue to be used. As of June 30, 2003, closure expenditures have been incurred
forapproximately
55 percent of the area involved. The County holds permits that allow it to continue
using the landfill until approximately 2020.
The $62.7 million reported as the landfill closure and postclosure obligation at June 30, 2003,
represents the total estimated cost remaining to be incurred based on landfill capacity used to date.
The actual cost may vary due to inflation, changes in technology, or changes in regulations. It is
expected that the landfill closure and postclosure care costs will be funded from landfill tipping fees
and existing resources.
10.
Obligations
Under Capital Leases
The reporting entity has financed the acquisition of certain capital assets by entering into capital
lease agreements. The balance of capital assets, net, and the minimum obligations under these
capital lease agreements as of June 30, 2003, are as follows:
Primary
Government
Governmental
-
Activities
Component
Public
Balance
Asset
Class
$
2003
at 3une
30.
2003
3,261,336
Buildings
26,956,062
Improvements
2,643,193
Equipment
Less:
Balance
at 3une
Land
Unit -
Schools
32,132,841
Accumulated
depreciation
21,993,306
26.738
""'
19
3
~Fiscal
Year
8
Minimum
2004
$
Minimum
8,234,068
10,700,271
2005
6,697,254
8,427,415
2006
6,692,194
7,265,325
2007
3,790,236
3,805,486
2008
2,903,183
2009-2013
11,827,637
2014-2018
10,692,205
2019-2023
10,692,525
2024-2028
10,422,298
2029-2033
Total
minimum
8
obligations
Less: Portion representing
Present value of minimum
11.
Obligation
interest
obligations
to Component
443
80,237,043
30,198,497
34
46
27.979
755
9.444
Unit
The County has a liability of approximately $4.9 million to the Public Schools that originated in
1983 upon the recognition of teachers' compensation in the year services are rendered rather than
over the twelve-month contract period ending in August. The County agreed to fund the original
liability of approximately $46.4 million over a period of years beginning in fiscal year 1984.
Payments to Public Schools were deferred from fiscal years 1990 through 1996. In fiscal year 2003,
the County paid the seventh of ten equal annual installments of $1.62million from the General Fund
towards the remaining liability. This liability is included with "other" long-term liabilities in the
statement
of net assets.
IV-66
"·
LONG-TERM COMnaMENTS
i.
Washington Metropolitan Area ~ansit Authority (WMATA)
The County's commitments to WMATA are comprised of agreements to make capital contributions
for constructionof the rail transit system,contributionsfor replacementand improvementof railand
bus equipment,and paymentsof operatingsubsidiesand debt servicefor the rail, bus, and paratransit
systems. The County's commitments in each of these areas are summarized below.
_CaDitalContributions-
Rail Construction
Since 1970,theCounty and other localjurisdictionshave enteredinto five InterimCapital
ContributionAgreements(ICCA)with WIMATA.These agreementsare to providelocal funds to
match federalgovernmentappropriationsto fund the constructionof the 103-mileMetrorailAdopted
Regional System. The final 13.5 miles of construction were funded through ICCA-V and Public
Law 101-551. In approvingICCA-V,the jurisdictionsagreedto providelocal matching
contributionstotaling$780 millionover the life of the authorization.The agreementrequiresthe
County to provide $113.2 million in matching funds between fiscal years 1993 and 2004. The
Countyis providingthis matchthrougha combinationof state aid, state bonds,and locallygenerated
funds.
For fiscal year 2003, the County'sobligationof approximately$1.3 millionwas fundedwith County
general obligation bond proceeds. The County's total obligations to date of approximately $238.5
millionfor Metrorailconstructionhave been funded with $130.3millionof Countygeneral
obligationbond proceeds,$105.1millionof state aid providedto the CountythroughtheNorthern
Virginia Transportation Commission (NVTC), and $3.1 million of credits available at WMAIA. As
of June 30, 2003, the County is obligated to contribute an additional $1.0 million toward Metrorail
construction. It is anticipatedthat this obligationwill be paid from state aid providedthroughthe
NVTC and the proceeds of County general obligation bonds.
Capital Contributions - Bus and Rail Replacement and Rehabilitation
Each fiscal year, the County makes contributions for capital purchases for WMATA'sbus system and
to improve the reliability of capital equipment. The County's obligation of approximately $8.4
million for fiscal year 2003 was funded with $7.1 million of County general obligation bond
proceedsand $1.3 millionof state aid providedthroughthe NVTC. It is anticipatedthat the
County's obligations for fiscal year 2004 will be funded with state aid and County general obligation
bond
funds.
Operating Subsidies and Debt Service
The County and other localjurisdictions continue to contribute towardWMATA's def~citsresulting
from the operation of the Metrorail, Metrobus, and MetroAccess (paratransit) systems and the debt
service on federally guaranteed transit revenue bonds issued by ~MATA. For fiscal year 2003, the
County's obligation of approximately $52.4 million for operating subsidies and debt service was
funded with $10.7 million from the County's Metro Operations and Construction Fund and $41,7
million from state aid for transportation and regional gasoline tax receipts. It is anticipated that the
County's expenditures for fiscal year 2004 will be approximately $12.3 million.
IV-67
Virginia Railway Express (VRE)
The County,as a memberof the NVTCand in cooperationwith the Potomacand Rappahannock
TransportationCommission(PRTC),is a participatingjurisdictionin the operationof the VRE
commuter rail service. The service primarily consists of rush hour trips originating from Manassas,
Virginiaand from Fredericksburg,Virginiato UnionStationin Washington,DC. There are five
stations in Fairfax County.
In October 1989, the Board of supervisors of Fairfax County approved the Commuter Rail Master
Agreementand financialplans. The Master~Agreement
requiresthe Countyto contributeto capital,
operating,and debt servicecosts of the VRE on a pro rata basis accordingto its share of ridership
and population. In February 1990, NVTC sold $79.4 million in bonds to finance passenger cars,
locomotives,yard facilities,and stations. Approximately$6.0 millionof the bond proceedswere
made available to the County to assist with financing its local stations. The County's fiscal year
2003 contributionto VRE's commuterrail operating,capital,and debt servicecost was $2.6 million.
Also, the Countyhas been authorizedto apply $5.2 millionof generalobligationbond proceeds
toward the cost of commuter rail facilities within the County. Through June 30, 2003, approximately
$3.9 million of this amount has been expended.
3.
Operating
Lease Commitments
The Countyand the EDA lease real estate under variouslong-termlease agreements. Certain leases
containprovisionswhich allow for increasedrentalsbased upon increasesin real estate taxes and the
Consumer Price Index. Ail lease obligations are contingent upon the Board of Supervisors ·
appropriatingfunds for each fiscal year's payments. For fiscal year 2003, the County's and EDA's
t~~tal~pendituresr~.thaeoperatinglease~~uere$ll,091,~14a
~x
At June 30, 2003, the minimum long-term real estate lease commitments accounted for as operating
leases
were
as follows:
Government
Fiscal
Year
Governmental
9,851,415
7,953,321
7,198,739
5,842,397
4,499,205
787,850
882,058
902,762
929,845
834,528
2009-2013
2014-2018
9,933,804
3,316,982
834,922
2019-2023
564,186
2024-2028
274,853
123
Total
Intermunicipal
City ofAlexandria
Unit
EDA
2004
2005
2006
2007
2008
2029-2032
4.
Component
Activities
49
5.171.965
Agreements
Virginia. Sanitation Authority
The SewerSystemis obligatedunder an agreementwith the City ofAlexandria,Virginia,Sanitation
Authority(ASA)to share the constructionand operatingcosts and debt servicerequirementsfor its
sewagetreatmentfacility. Currently,the SewerSystemhas a capacityentitlementof 32.4 MGD,
whichis 60 percent of the facility's total capacityof 54 MGD. The Sewer System is allowed only
rV-68
non-voting representative at the meetings of the ASA and has no significant influence in the
management
of thetreatmentfacility.In addition,the SewerSystemhasno directongoingequity
interest in the assets or liabilities of the ASA.
TheASAfacilityis currentlyundergoingmajorimprovements
to meetnewwaterqualitystandards.
The Sewer Systempaid the ASA$13,238,249in f~scalyear 2003 to fund its share of the construction
costs, and it estimatesits share of the remainingconstructioncosts to be $35,350,000,of which
$21,600,000
is expected
to beincurred
infiscalyear2004andthebalanceoverfiscalyears2005to
2009. In addition,the SewerSystemmadepaymentsof $10,219,480to theASAduringfiscalyear
2003 for its share of the ASAs operating costs.
District of Columbia Water and Sewer Authority
TheSewerSystemis obligatedunderan intermunicipal
agreementbetweenthe County;the District
of Columbia@istrict);Montgomery
County,Maryland;PrinceGeorge'sCounty,Maryland;andthe
Washington
SuburbanSanitaryCommission
to sharethe constructionandoperatingcostsof the
District'sBluePlainsWastewater
TreatmentPlant,whichis operatedby the Districtof Columbia
Waterand SewerAuthority@CWASA).Currently,the SewerSystemhas a capacityentitlementof
31 MGD, whichis approximately8.4 percentof the Plant's total capacityof 370 MGD. The
DCWASAhas a Boardof Directorscomprisedof six membersfrom the District,two each from
Montgomery
andPrinceGeorge'sCounties,andonefromthe County.TheCountyhas no significant
controlover plant operationsand constructionand no ownershipinterest in the assets of DCWASA.
Anexpansionof the BluePlainsPlantfrom325MGDto 370MGDwascompletedduringfiscalyear
2003,andthePlantis currentlyundergoingamajorrenovationof its chemicaladditionsand sludge
disposal systems. The Sewer System paid the DCWASA $14,102,608 during fiscal year 2003 to
fundits shareof construction
costs,andit estimatesits shareof the remainingconstructioncoststo
be $62,900,000,
of which$17,200,000
is expectedto be incur~edin fiscalyear2004andthe balance
over fiscal years 2005 to 2010. In addition,the Sewer System made paymentsof $9,859,558to the
DCWASAduringfiscal year 2003 for its share of the Plant's operatingcosts.
UDDerOccoauan Sewage Authority
As described in Note A, the Upper Occoquan Sewage
Authority (UOSA) is ajoint venture createdunder
the
provisions of the Virginia Water and Waste Authorities
Actto bethesingleregionalentityto construct,
finance,andoperatetheregionalsewagetreatment
facilityfor the upper portion of the Occoquan
Watershed.
Anexpansion
ofthecapacity
of UOSA's
treatment
facilityfrom32MGDto 54MGDwas
completed during fiscal year 2003. Each jurisdiction's
allocated share of UOSA's capacity as of June 30,
2003, is as shown on the right.
Member
3urisdiction
Fa'rfax
County
Prince William County
cityOfMa"assas
CityofManassas
Park
Total
Capacity
D
27.5999
15.7971
7.6893
2.9137
54.0000
UOSA'scurrentoperatingexpenses,constructioncosts, and annualdebt servicepaymentsare funded
by each of the participatingjurisdictionsbased on their allocatedcapacity,with certain
modifications.
TheSewerSystemmadepaymentsto UOSAin fiscalyear2003of $7,593,754to pay
its share of UOSA's operating costs.
1~
IV-69
UOSA financial information as of and for the years ended June 30, 2002 and 2001 (the
most recent audited financial information available), is as shown below.
2002
Total
assets
Total
liabilities
8479,614,218
1
[389.882.667)
Totalequity
1$
Totalrevenue
Total expenses
1
Net
1$
income
$
89,731,551
50,093,649
(29.023
21.070.599
2001
476,454,006
1397.135.178
79,31
45,276,862
18.987
Arling~ton County. Virrjnia
The Sewer System is obligated under an agreement with Arlington County, Virginia, to share the
construction and operating costs of the sewage treatment facility owned and operated by Arlington
County. Currently, the Sewer System has a capacity entitlement of 3 MGD, which is 10 percent of
the facility's total capacity of 30 MGD. The Sewer System has no direct on-going equity interest in
the facility's assets and liabilities. Furthermore, the Sewer System has no significant influence over
the management of the treatment facility.
The Arlington facility is currently undergoing a majorupgrade to meet new water quality standards.
The Sewer System paid Arlington County $794,356 in fiscal year 2003 to fund its share of the
construction costs, and it estimates its share of the remaining construction costs to be $24,200,000,
of which $1,700,000 is expected to be incurred in fiscal year 2004 and the balance over fiscal years
2005 to 2009. In addition, the Sewer System made payments of $960,888 to Arlington County
during fiscal year 2003 for its share ofArlington's operating costs.
5.
Fairfax County Solid Waste Authority
(SWA) - Resource Recovery
During frscal year 1999, as a result of a call option, the EDA issued $195,505,000 of 1998 Series A
Resource Recovery Revenue Refunding Bonds, the proceeds of which, together with certain other
available funds, were used to refund all remaining outstanding 1988 Series Bonds, which were
initially issued to finance the construction of a 3,000 tons-per-day mass burn facility at the County's
landfill site near Interstate 95. The operation of the facility by an independent contractor
commenced in 1990. Solid waste is burned to produce electricity, which is sold to a local utility
company.
The bonds are not an obligation of the County; however, the County is obligated to deliver a
minimum annual tonnage of solid waste to the facility and to pay tipping fees for the disposal of such
waste sufficient to cover the operating costs of the facility and the debt service on the bonds. As of
June 30, 2003, $150,405,000 of the 1998 Series A Refunding Bonds are outstanding. Unspent bond
proceeds in the amount of $31,381,553, which include investment earnings, are reported in the
Resource Recovery Fund, an agency fund; certain unspent proceeds are reserved for debt service and
the remainder is available for solid waste disposal purposes.
6.
Long-term
Contracts
At June 30, 2003, the primary government had contractual commitments of $24,331,476 in the
capital projects funds and $146,351,000 in the Sewer System for construction of various sewer
projects. At June 30, 2003, the component units had contractual commitments of $71,960,622 and
IV-70
---
-
in the capitalprojectsfundsof the PublicSchoolsandtheParkAuthority,respectively,
construction of various
7.
projects.$17,470,630
Other Post-employment Benefits
The Board of Supervisorshas establisheda programto subsidizethe health benefit coverageof
certain retirees and certain survivingspouses. In order to participate,retirees must have reached the
age of 55 or be on disabilityretirementand must have health benefit coveragein a plan providedby
the County. There is no minimumnumberof years of servicerequiredto participatein this program.
The programallowsfor a $100 per monthsubsidyper participantand is fundedon a pay-as-you-go
basis. There are 1,819participantscurrentlyeligibleand receivingbenefitsin the program. For
fiscal year 2003, the cost of this programto the County was $2,197,557.
In addition, the Board of Supervisors has established a program to subsidize the continuation of term
life insurance,at reducedcoverageamounts,for retirees. Retireesgenerallypay for fifty percent of
their coverage amounts at age-banded premium rates, with the County incurring the balance of the
cost on a pay-as-you-go basis. There are approximately 2,500 participating retirees, and the cost of
this programto the County for fiscal year 2003 was approximately$200,000.
K.
CONTINGENT LLABILITIES
The Countyis contingentlyliable with respectto lawsuitsand other claims that arise in the ordinarycourse
of its operations. Althoughthe outcomeof these mattersis not presentlydeterminable,in the opinion of
Countymanagement,the resolutionof these matterswill not have a materialadverseeffect on the County's
financial
condition.
The County receives grant funds, principally from the federal government, for construction and various other
programs. Certain expendituresof these funds are subjectto audit by the grantor,and the County is
contingentlyliable to refundamountsreceivedin excess of allowableexpenditures. In the opinionof County
management, no material refunds will be required as a result of expenditures disallowed by the grantors.
L.
SPECIAL ITEM
in June 2003, the Countysold 46.8 acres of land locatedin the Laurel Hill area of the southernpart of the
Countyto a private developerfor developmentas a senior livingcampus and graduatedcare facility. The
sale proceedsof $18.2 millionwill be used to fund a portion of the cost of the public high schoolbeing
constructed on adjacent land.
N-71
6
V
BOOK-ENTRY
ONLY
SYSTEM
The Depository Trust Company ('?ITC'), New York, NY, will act as
(the "Bonds"). The Bonds will be issued as fully-registered securities registered
partnership nominee) or such other name as may be requested by an authorized
registered Bond certificate will be issued for each maturity of the Bonds and will
g
securities depository for the Bonds
in the name of Cede & Co. @TC's
representative of DTC. One fullybe deposited with DTC.
DTC is a limited-puIpose trust company organized under the New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a
'%learing corporation" within the meaning of the New York Uniform Commercial Code, and a '%learing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and
provides asset servicing for over 2 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt
issues, and money market instruments from over 85 countries that DTC's participants ("Direct Participants") deposit
with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities
transactions in deposited securities, through electronic computerized book-entry transfers and pledges between
Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct
Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations.
DTC is a wholly-owned subsidiary of The Depository Trust &
Clearing Corporation ~DTCC"). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members
of the National Securities Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing
Corporation, and Emerging Markets Clearing Corporation (NSCC, GSCC, MBSCC, and EMCC, also subsidiaries of
DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National
Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and
non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or
maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants").
DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the
Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com
Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which will
receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners
will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to
receive written confirmations providing details of the ~ansaction, as well as periodic statements of their holdings,
from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of
ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect
Participants acting on behalf of Beneficial Owners. Beneficial Owners willnot receive certificates representing
their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is
discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the
name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized
representative of DTC. The deposit of the Bonds with DTC and their registration in the name of Cede & Co. or such
other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts
such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will
remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications
by DTC to Direct Participants, by Direct Participants to
Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as may be in effect ~om time to time.
g
Redemption notices shall be sent to DTC. If less than all of the Bonds are being redeemed, DTC's practice
is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.
V-l
DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds
unlessauthorizedby a DirectParticipantin accordancewithDTC'sProcedures.Underits usualprocedures,DTC
mailsan OmnibusProxyto the Countyas soonas possibleaftertherecorddate. TheOmnibusProxyassignsCede
& Co.'s consentingor voting rights to those Direct Participantsto whose accountsthe Bonds are credited on the
recorddate (identifiedin a listingattachedto the OmnibusProxy).
Principalandinterestpaymentsonthe Bondwillbe madeto Cede& Co.,or suchother.nominee
as maybe
requestedby an authorizedrepresentative
of DTC. DTC'spracticeis to creditDirectParticipants'accountsupon
DTC's receipt of funds and correspondingdetail information~om the County, oa the payable date in accordance
withtheirrespectiveholdingsshownon DTC'srecords. Paymentsby Participantsto BeneficialOwnerswill be
governedby ~standinginstructionsand customarypractices,as is the case with securitiesheld for the accounts of
customersin bearerformor registeredin "s~eetname,"andwillbe the responsibility
of suchParticipantandnotof
DTC or the County, subject to any statutory or regulatoryrequirementsas may be in effect from time to time.
Paymentof principaland interestpaymentsto Cede& Co. (or suchother nomineeas may be requestedby an
authorizedrepresentative
of DTC)is the responsibility
of the County,disbursementof suchpaymentsto Direct
Participantswill be the responsibilityof DTC, and disbursementof such paymentsto the BeneficialOwners will be
the responsibility of Direct and Indirect Participants.
DTCmaydiscontinue
providingits servicesas depositorywithrespectto the Bondsat anytimeby giving
reasonablenoticeto theCounty.Undersuchcircumstances,
in theeventthata successordepositoryisnotobtained,
Bond certificates are required to be printed and delivered.
The Countymay decideto discontinueuse of the systemof book-entrytransfersthroughDTC (or a
successorsecuritiesdepository).In that event,Bond certificateswill be printedand delivered.
17teinformationin this sectionconcerningDTCand DTC'sbook-entrysystemhas bt~enobtained.from
sourcesthatthe Countybelievesto be reliable,burthe Countytakesno responsibilityfor
theaccuracythereo~
V-2
VI
SIDLEY
AUSTIN
BROWN
&WOOD
LLF
BEIJING
787
BRUSSELS
SEVENTH
AVENUE
LOS ANGELES
NEW YORK, NEW YORK 10019
TELEPHONE
CHICAGO
FACSIMILE
212
212
839
839
NEWYORK
5300
SAN FRANCISCO
5599
DALLAS
www.sidley.com
SHANGHAI
GENEVA
FOUNDED
SINGAPORE
HONG
1866
KONG
TOKYO
LONDON
WASHINGTON,
October
D.C.
,2004
Board of Supervisors
ofr;airfax County, Virginia
Fairfax, Virginia
We have examinedcertifiedcopies of the legal proceedings,includingthe election proceedingsand other
proofs submitted, relative to the issuance and sale of
$311,810,000
Fairfax County, Virginia
Public Improvement and Refunding Bonds, Series 2004 B
The bonds are dated the date of their delivery, mature in annual installments on October 1 in each of the
d
years2005to 2024,inclusive,bearinterestpayablesemiannuaily
on the Ist daysof AprilandOctoberin eachyear,
commencingApril 1, 2005,and are subjectto redemptionprior to their respectivematuritiesin the mannerand upon
the terms and conditionsset forth in the resolutionauthorizingthe issuanceof the bonds adoptedby the Board of
Supervisors ofr;airfax County on September 13, 2004.
We are of the opinion that such proceedings and proofs show lawful authority for the issuance and sale of
the bondspursuantto the Constitutionand laws of Virginia,and that the bonds constitutevalid and bindinggeneral
obligationsof Fairfax County, Virginia, for the payment of which the full faith and credit of said County are
pledged, and all taxable property in the County is subject to the levy of an ad valorem tax, without limitation as to
rate or amount, for the payment of the bonds and the interest thereon, which tax shall be in addition to all other taxes
authorizedto be levied in said County to the extent other funds of said County are not lawfully available and
appropriated for such purpose.
We are further of the opinion that, except as provided in the following sentence, interest on the bonds is not
includablein the gross incomeof the ownersof the bondsfor purposesof Federalincometaxationbased on existing
law. Interest on the bonds will be includable in the gross income of the owners thereof retroactive to the date of
issue of the bonds in the event of a failure by the County or the school board of the County to comply with
applicablerequirementsof the InternalRevenueCode of 1986,as amended(the "Code"), and covenantsregarding
use, expenditure and investment of bond proceeds and the timely payment of certain investment earnings to the
United States Treasury; and we render no opinion as to the exclusion from gross income of the interest on the bonds
for Federalincometax purposeson or after the date on whichany action is taken affectingsuch covenantsupon the
approval of counsel other than ourselves. Interest on the bonds is not a specific preference item for purposes of the
Federal individual or corporate alternative minimum taxes. The Code contains other provisions that could result in
tax consequences, as to which we render no opinion, as a result of ownership of bonds or the inclusion in certain
computations (including without Limitationthose related to the corporate alternative minimum tax) of interest that is
excluded from gross income.
Respectfully submitted,
ibb
VL-1
Appendix VII
CONTINUING
DISCLOSURE
AGREEMENT
This ContinuingDisclosureAgreement(the "DisclosureAgreement")is executedand deliveredby Fairfax
County,Virginia(the'Y=ounty")
in connectionwiththeissuanceby theCountyof $311,810,000
aggregateprincipal
amountof its PublicIm~rovementand RefundingBonds, Series2004 B (the "Bonds" or "2004 B Bonds")pursuant
to theprovisionsof a resolution(the"Resolution")
adoptedon September13,2004,by the Boardof Supervisors
of
the County. The proceedsof the 2004 B Bondsare being used by the Countyto financevariouspublic
improvementsin the County. The Countyherebycovenantsand agreesas follows:
SECTION1.
Pur~se of the DisclosureAmeement. This DisclosureAgreementis being executedand
deliveredby the Countyfor the benefitof the holdersof the 2004B Bondsandin orderto assistthe Participating
Underwriters(definedbelow) in complyingwith the Rule (definedbelow). The County acknowledgesthat it is
undertakingprimaryresponsibilityfor any reports,noticesor disclosuresthat may be requiredunder this Agreement.
SECTION 2.
Definitions. In addition to the definitions set forth in the Resolution, which apply to any
capitalizedterm used in this DisclosureAgreementunless otherwisedefinedin this Section,the following
capitalized terms shall have the following meanings:
"AnnualReport"shallmeananyAnnualReportprovidedby the Countypursuantto, andas describedin,
Sections 3 and 4 of this Disclosure Agreement.
'DisseminationAgent"shall meanthe County,actingin its capacityas DisseminationAgent hereunder,or
any successorDissemination
Agentdesignatedin writingby the Countyand whichhas filed withthe Countya
written acceptance ~f such designation.
"FilingDate" shall have the meaninggivento such term in Section3(a) hereof.
"Fiscal Year" shall mean the twelve-monthperiod at the end of which financial position and results of
operationsaredetermined.Currently,theCounty'sFiscalYearbeginsJuly I andcontinuesthroughJune30 of the
next calendar year.
"Holder" or "holdei' shall mean, for purposesof this DisclosureAgreement,any person who is a record
owner or beneficial
owner of a 2004B
Bond.
'Zisted Events" shall mean any of the events listed in subsection(b)(S)(i)(C)of the Rule, which areas
follows:
principal and interest payment delinquencies
non-payment related defaults
unscheduled draws on debt service reserves reflecting financial difficulties
unscheduled draws on credit enhancements reflecting financial difficulties
substitution of credit or liquidity providers, or their failure to perform
adversetax opinionsor eventsaffectingthe tax-exemptstatusof the 2004 B Bonds
modifications to rights of holders
bond
calls
W-l
release, substitution, or sale of property securing repayment of the 2004 B Bonds
rating changes
"Nattonaa Repository" shall mean any Nationally Recognized Municipal Securities Information Repository
for purposes of the Rule.
"Participating Underwriter" shall mean any of the original underwriters of the County's 2004 B Bonds
required to comply with the Rule in connection with the offering of such Bonds.
"Repository" shall mean each National Repository and each State Repository.
"Rule" shall mean Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as the same may be amended ~om time to time.
"State Repository" shall mean any public or private depository or entity designatedby the State as a state
depository for the purpose of the Rule. As of the date of this Agreement, there is no State Repository.
SECTION 3.
A.
Provision of Annual Reports.
The County shall, or shall cause the Dissemination Agent to, provide to each Repository an
AnnualReportwhich is consistentwith the requirementsof Section4 of this DisclosureAgreement. Such Annual
Report shall be filed on a date (the "Filing Date") that is not later than March 31 after the end of any Fiscal Year
(commencingwith its Fiscal Year endingJune 30, 2005). Not later than ten (10) days prior to the Filing Date, the
County shall provide the Annual Report to the Dissemination Agent (if applicable). In such case, the Annual Report
(i) may be submitted as a single document or as separate documents comprising a package, (ii) may cross-reference
other informationas providedin Section4 of this DisclosureAgreementand (iii) shall includethe County's audited
financial statements or, if audited financial statements are not available, such unaudited financial statements as may
be requiredby the Rule. In any event, audited financialstatementsof the County must be submitted,if and when
available, together with or separately from the Annual Report.
B.
The annual financial statements of the County shall be prepared on the basis of generally accepted
accounting principles and will be audited. Copies of the audited annual financial statements, which may be filed
separately ~om the Annual Report, will be filed with the Repositories when they become publicly available.
C.
If the County fails to provide an Annual Report to the Repositories by the date required in
subsection (a) hereto or to file its audited annual financial statements with the Repositories when they become
publicly available,the County shall send a notice to the MunicipalSecurities RulemakingBoard and any State
Repository in substantially the form attached hereto as Exhibit B.
SECTION 4.
Content of Annual Re~orts. Except as otherwise agreed, any Annual Report required to
be filed hereunder shall contain or incorporate by reference, at a minimum, annual financial information relating to
the County, including operating data, updating such information relating to the County as described in Exhibit A, all
with a view toward assisting Participating Underwriters in complying with the Rule.
Any or all of such information may be incorporated by reference from other documents, including official
statements of securities issues with respect to which the County is an "obligated person" (within the meaning of the
Rule), which have been filed with each of the Repositories or the Securities and Exchange Commission. If the
document incorporated by reference is a final official statement, it must be available from the Municipal Securities
Rulemaking Board. The County shall clearly identify each such other document so incorporated by reference.
W-2
SECTION5.
Rer,ortingof ListedEvents. The Countywill providein a timelymannerto each National
Repositoryor the MunicipalSecuritiesRulemakingBoardand to each State Repository,if any, notice of any of the
Listed Events, if material.
SECTION6.
AlternativeFiling. The County may, in lieu of filing with the Repositoriesthe Annual
Reports,Listed Events and other noticesreferredto in Sections3(A), 3(C) and 5 make such filings with
DisclosureUSA,the centralpost officeof the MunicipalAdvisoryCouncilof Texas.
SECTION7.
Terminationof ReportingObligation. The County's obligationsunder this Disclosure
Agreement shall terminate upon the earlier to occur of the legal defeasance or final retirement of all the 2004 B
Bonds.
SECTION8.
DisseminationAgent The County may, ~om time to time, appoint or engage a
DisseminationAgent to assist it in carryingout its obligationsunder this DisclosureAgreementand may discharge
any such Agent, with or withoutappointinga successorDisseminationAgent. If at any time there is not any other
designatedDisseminationAgent,the Countyshall be the DisseminationAgent.
SE~Z~ION
9.
Amendment. Notwithstandingany other provision of this DisclosureAgreement,the
Countymay amendthis DisclosureAgreement,if such amendmentis supportedby an opinionof independent
counsel with expertisein federal securitieslaws, to the effect that such amendmentis permittedor requiredby the
Rule.
SECTION10.
Additional Information. Nothing in this Disclosure Agreement shall be deemed to
prevent the County ~om disseminating any other information, using the means of dissemination set forth in this
DisclosureAgreementor any othermeansof communication,
or includingany otherinformationin any Annual
Reportor notice of occurrenceof a ListedEvent in additionto that whichis requiredby this DisclosureAgreement.
If the Countychoosesto includeany informationin any AnnualReportor noticeof occurrence of a Listed Event, in
additionto that which is specificallyrequired by this DisclosureAgreement,the County shall have no obligation
under this Agreementto update such informationor includeit in any future AnnualReport or notice of occurrence
of a Listed
Event.
SECTION11. Default. Any person referred to in Section 12 (other than the County) may take such
action as may be necessaryand appropriate,includingseekingmandateor specificperformanceby court order, to
cause the County to file its Annual Report or to give notice of a Listed Event. The holders of not less than a
majority in aggregate principal amount of Bonds outstandingmay take such actions as may be necessary and
appropriate,includingseekingmandate or specificperformanceby court order, to challengethe adequacyof any
informationprovided pursuant to this DisclosureAgreement,or to enforce any other obligationof the County
hereunder. A default under this Disclosure Agreement shall not be deemed an event of default under the Resolution
or the 2004 B Bonds of the County,and the sole remedyunderthis DisclosureAgreementin the event of any failure
of the County to comply herewith shall be an action to compelperformance. Nothing in this provision shall be
deemedto restrict the rights or remediesof any holder pursuantto the SecuritiesExchangeAct of 1934,the rules
and regulations promulgated thereunder, or other applicable laws.
SECTION 12. Beneficiaries. This DisclosureAgreementshall inure solely to the benefit of the County,
the ParticipatingUnderwriters,and holders ~om time to time of the County's Bonds, and shall create no rights in
any other person or entity.
Date:
October
_, 2004
FAIRFAX
COUNTY,
VIRGINIA
By:
Edward L. Long, Jr.
Q
ChiefFinancial
W-3
Officer
eio~
CONTENT
OF ANNUAL
REPORT
(a) Financial Information. Updated information concerning General Fund revenues, expenditures,
categories of expenditures, fund balances, assessed value of taxable property, tax rates, major taxpayers, and tax
levies
and collections.
(b) Debt Information. Updated information concerning general obligation bonds indebtedness, including
bonds authorized and unissued, bonds outstanding, the ratios of debt to the market value of taxable property, debt
per capita, and debt service as a percentage of General Fund disbursements.
(c) Demographic Information. Updated demographic information respecting the County such as its
population, public school enrollment and per pupil expenditure.
(d) Economic Information.
Updated economic infonnation respecting the County such as income,
employment, unemployment, building permits and taxable sales data.
(e) RetirementPlans. Updatedinformation
respectingpensionand retirementplansfor County
employees, including a summary of membership, revenues, expenses and actuarial valuation(s) of such plans.
(f) Contingent Liabilities.
A summary of material litigation and other material contingent liabilities
pending against the County.
In general, the foregoing will include information as of the end of the most recentfiscal year or as of the
most recent practicable date. Where information for the fiscal year just ended is provided, it may be preliminary and
unaudited. Where information has historically beenprovided for more than a single period, comparable information
will in general be provided for the same number of periods where valid and available. Where comparative
demographic or economic information for the County and the United States as a whole is contemporaneously
available and, in the judgment of the County, informative, such information may be included. Where, in the
judgment of the County, an accompanying narrative is required to make data presented not misleading, such
narrative will be provided.
W-4
-·-;--;I·- ·;··--·:-I-·=-·-·;---·-···-------=--···
--
- --
--
B~LB~IBITB
NOTICE
OF FAILURE
TO FILE
ANNUAL
IAUDITED ANNUAL FINANCIAL
Re:
FAIRFAX
COUNTY
PUBLIC IMPROVEMENT
CIJSIP
STATEMENTS]
VIRGINIA
AND REFUNDING
SERIES
2004
NOS.:
REPORT
BONDS,
B
303820
Dated:
,2005
NOTICEIS HEREBYGIVENthat FairfaxCounty,Virginiahas not providedan AnnualReport [Audited
Annual Financial Statements] as required by Section 3 of the Continuing Disclosure Agreement, which was entered
into in connectionwith the above-namedbonds issuedpursuantto that certain Resolutionadoptedon September13,
2004 by the Board of Supervisors of the County, the proceeds of which were used to finance and refinance various
public improvements in the County. [The County anticipates that the Annual Report CAuditedAnnual Financial
Statements] will be filed by
·]
Dated:
FAIRFAX
j)
By
ib
W-5
COUNTY,
VIRGINIA
8
CERTIFICATE
CONCERNING
OFFICIAL
STATEMENT
We, Gerald E. Connolly, Chairman of the Board of Supervisors of Fairfax County,
Virginia, and Anthony H. Griffin, County Executive, Fairfax County, Virginia, DO HEREBY
CERTIFY that, to the best of our knowledge, the Official Statement of Fairfax County, Virginia,
dated September 23, 2004 and describing the issue of $311,810,000 Public Improvement and
Refunding Bonds, Series 2004 B, did not as of its date, and does not as of the date of this
certificate, contain any untrue statement of a material fact or omit to state a material fact which
should be included therein for the purpose for which the Official Statement is to be used, or
which
is necessary
in order
to make
the statements
contained
therein,
in the light of the
circumstances under which they were made, not misleading and that we did not independently
verify the information indicated in the Official Statement as having been obtained or derived
from sources
believe
that
other than Fairfax
such
information
is not
County,
Virginia
and its officers
but we have no reason
accurate.
WITNESS our hands this 19'"day of October,2004.
Gerald
E. Connolly
Chairman
of the
Board of Supervisors
Fairfax County, Virginia
As~ci~-
Anthony
H. Griffin
County Executive
Fairfax County, Virginia
NYI
5594603v1
to
DEPOSIT
THIS ESCROW
DEPOSIT
AGREEMENT
AGREEMENT
dated as of October 19, 2004 by and
between Fairfax County (the "County"), a political subdivision of the Commonwealthof
Virginia, and Wachovia Bank, National Association, Richmond, Virginia, a national banking
association organized and existing under the laws of the United States of America, and any
successor thereto, as escrow agent (the "Escrow Agent"),
WITNESSET
H:
WHEREAS, the County has issued the following series of bonds pursuant to the
provisions of resolutions duly adopted by the Board of Supervisors of the County on November
17, 1997, April 27, 1998 and November 15, 1999 respectively (collectively, the "Bond
Resolutions"):
$60,000,000 Public Improvement Bonds, Series 1997 B, dated December 1, 1997
and issued on December 17, 1997, maturing December 1, 1998 to 2017, inclusive, and first
subject to optional redemption on December 1, 2005 (the "1997 B Bonds"); and
$76,000,000 Public Improvement Bonds, Series 1998 A, dated May 15, 1998 and
issued on June 10, 1998, maturing June 1, 1999 to 2018, inclusive, and first subject to optional
redemption on June 1, 2006 (the "1998 A Bonds"); and
$83,600,000 Public Improvement Bonds, Series 1999 B, dated December 1, 1999
and issued on December 16, 1999, maturing December 1, 2000 to 2019, inclusive, and first
subject to optional redemption on December 1, 2007 (the "1999 B Bonds"); and
WHEREAS, the County has determined to refUnd for debt service savings each of the
December 1, 2006 through 2017 maturities, inclusive, of the outstanding 1997 B Bonds (the
"1997 B RefUnded Bonds") and to give the Director of the Department of Finance of Fairfax
County, Virginia as bond registrar and paying agent for the 1997 B RefUnded Bonds (the "1997
B RefUnded Bonds Paying Agent") irrevocable instructions to call such 1997 B RefUnded Bonds
for redemption on December 1, 2005 at the applicable redemption price of 102% of the principal
amount of each 1997 B RefUnded Bond plus accrued interest to the redemption date; and
WHEREAS, the County has determined to refUnd for debt service savings each of the
June i, 2007 through 2018 maturities, inclusive, of the outstanding 1998 A Bonds (the "1998 A
RefUnded Bonds") and to give the Director of the Department of Finance of Fairfax County,
Virginia as bond registrar and paying agent for the 1998 A RefUnded Bonds (the "1998 A
RefUnded Bonds Paying Agent") irrevocable instructions to call the 1998 A RefUnded Bonds for
redemption on June i, 2006 at the applicable redemption price of 102% of the principal amount
of each 199& A Refunded Bond plus accrued interest to the redemption date; and
the County has determined to refund for debt service savings each of the
December 1, 2008 through 2019 maturities, inclusive, of the outstanding 1999 B Bonds (the
"1999 B RefUnded Bonds") and to give the Director of the Department of Finance of Fairfax
County, Virginia as bond registrar and paying agent for the 1999 B RefUnded Bonds (the "1999
B RefUnded Bonds Paying Agent") irrevocable instructions to call the 1999 B RefUnded Bonds
for redemption on December 1, 2007 at the applicable redemption price of 102% of the principal
amount of each 1999 B RefUnded Bond plus accrued interest to the redemption date; and
WHEREAS, the County has deposited with the Escrow Agent $143,355,561.25 (the
"Deposit") derived from a $2,830,000 contribution by the County and $140,525,561.25 of the
proceeds of the $311,810,000 Fairfax County, Virginia, Public Improvement and RefUnding
Bonds, Series 2004 B (the "RefUnding Bonds"), and has made arrangements for and has directed
the Escrow Agent to purchase from the Deposit the securities listed in Appendix A (the "Escrow
Securities"), that, without consideration of any reinvestment of the maturing principal and
interest on the Escrow Securities, will provide sufficient moneys, to enable the Escrow Agent to
pay to the registered owners, on behalf of the County and the RefUnded Bonds Paying Agents,
the RefUnded
Bonds
as follows:
to pay (a) the principal of, plus the aggregate redemption premium of $720,000.00
on, the 1997 B RefUnded Bonds on December 1, 2005 (the "1997 B RefUnded Bonds·
Redemption Date") and (b) the interest to accrue on the 1997 B RefUnded Bonds at the 1997 B
RefUnded Bonds Redemption Date all as set forth in appendix B-l; and
to pay (a) the principal of, plus the aggregate redemption premium of $912,000.00
on, the 1998 A RefUnded Bonds on June 1, 2006 (the "1998 A RefUnded Bonds Redemption
Date") and (b) when due and payable the interest to accrue on the 1998 A RefUnded Bonds to
and including the 1998 A RefUnded Bonds Redemption Date all as set forth in Appendix B-2;
and
to pay (a) the principal of, plus the aggregate redemption premium of
$1,003,200.00 on, the 1999 B RefUnded Bonds on December i, 2007 (the "1999 B RefUnded
Bonds Redemption Date") and (b) when due and payable the interest to accrue on the 1999 B
Refunded Bonds to and including the 1999 B RefUnded Bonds Redemption Date all as set forth
in Appendix B-3; and
WHEREAS, in order to insure that the procedures required for the redemption of the
RefUnded Bonds will be followed, the County and the Escrow Agent have agreed to enter into
this Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants
hereinafter set forth, the parties hereto agree as follows:
i.
Receipt of Verification Report.
Receipt of a true and correct copy of the
verification report (Appendix E to this Agreement) of McGladrey & Pullen, LLP, independent
certified public accountants, dated October 19, 2004 (the "Verification Report"), is hereby
acknowledged by the Escrow Agent.
Creation of and Deposits to Escrow Fund. There is hereby created and
established with the Escrow Agent a special, segregated and irrevocable escrow fUnd, designated
the "Fairfax County Public Improvement RefUnding Bonds 2004 B Escrow Fund" (the "Escrow
Fund"), to be held in the custody of the Escrow Agent as a trust fUnd for the benefit of the
holders of the RefUnded Bonds, and separate and apart from other fUnds of the County and the
Escrow Agent. The Escrow Agent hereby accepts the Escrow Fund and acknowledges the
receipt of, and deposit to the credit of the Escrow Fund, the Deposit, a portion of which has been
or is to be used to purchase the Escrow Securities listed in Appendix A.
3.
Investment of Escrow Fund. The Escrow Agent represents and acknowledges
that, on the date hereof it will use $143,355,561.25 of the Deposit to purchase the Escrow
Securities, described in Appendix A, in the principal amount of $143,355,548.00 at the
respective purchase prices indicated in Appendix A and credit such Escrow Securities to the
Escrow Fund.
The Escrow Agent fUrther represents that it will hold $13.25 of the Deposit
uninvested.
4.
· Sufficiency Representation.
(a) In sole reliance upon the Verification Report,
the County represents that the interest on and the maturing principal amounts of the Escrow
Securities in accordance with their terms (without consideration of any reinvestment of such
maturing principal and interest) are sufficient to assure that moneys will be available to the
Escrow Agent in the amounts and on the dates required to pay (i) the principal of and premium
on the RefUnded Bonds on their respective 1997 B RefUnded Bonds Redemption Date, the 1998
A Refunded Bonds Redemption Date and the 1999 B RefUnded Bonds Redemption Date
(collectively, the "Redemption Dates") and (ii) when due and payable, the interest to accrue on
the RefUndedBonds, to the respective Redemption Dates, all as described in Appendices B-l, B2, and B-3.
If the Escrow Securities thereinafter defined) shall be insufficient to make such
payments as they become due and payable, the County shall, from available moneys, timely pay
to the Escrow Agent for deposit to the Escrow Fund such additional amounts as may be required
to meet fUlly the amount so due and payable. Notice of any insufficiency in the Escrow Fund
shall be given by the Escrow Agent to the County as promptly as possible, but the Escrow Agent
shall in no manner be responsible for the County's failure to make any payments to the Escrow
Fund.
(b)
The Escrow Agent shall not be liable for the accuracy of the calculations as to the
sufficiency of the Escrow Securities and the Deposit to meet the payment requirements of the
Refi~nded Bonds, nor shall the Escrow Agent be liable for any deficiencies in the amounts
necessary to meet the payment requirements.
5.
Escrow Fund. The Escrow Agent shall hold the cash and the book-entry credits
of the Escrow Securities in the Escrow Fund at all times as a special and separate escrow fund
for the benefit of the holders of the RefUnded Bonds, wholly segregated from other fUnds and
securities on deposit with it, shall never commingle the Escrow Securities with other fUnds or
securities owned or held by it, and shall never at any time use, loan, or borrow the same in any
way other than as provided in this Agreement. The Escrow Fund is hereby irrevocably pledged
to the payment of the RefUnded Bonds in the amounts and on the dates set forth in Appendices
B-l, B-2, and B-3. Nothing herein contained shall be construed as requiring the Escrow Agent
to keep the identical money, or any part thereof, in the Escrow Fund if it is impractical, but
of an equal amount, except to the extent represented by the Escrow Securities, must
always be maintained on deposit in the Escrow Fund as an escrow fUnd held by the Escrow
Agent; and a special account for the Escrow Fund evidencing such holdings shall at all times,
until the termination of this Agreement in accordance with Paragraph 23 hereof, be maintained
on the books of the Escrow Agent, together with the Escrow Securities so purchased and any
cash on deposit therein.
6.
Investment Income. (a) The Escrow Agent shall from time to time collect and
receive the interest accruing and payable on the Securities and any Substituted Escrow Securities
las defined in Paragraph 7(b)) (collectively, the "Escrow Securities") and the maturing principal
amounts
of the Escrow
Securities
as the same become
due, and credit the same to the Escrow
Fund, so that the interest on and proceeds of the Escrow Securities, as the same become due, will
be available to meet the payment requirements of the Refunded Bonds, as shown in Appendices
B-l, B-2, and B-3 to this Agreement.
(b)
The County, in its capacity as the RefUnded Bonds Paying Agent, hereby
irrevocably instructs the Escrow Agent to apply the principal and interest received from the
Escrow Securities to the payment, for the account of the County, of the interest and premium on
and principal of the RefUnded Bonds. The Escrow Agent shall make such payments directly to
The Depository Trust Company ("DTC") for Cede & Co., as registered owner of the RefUnded
Bonds and the partnership nominee of DTC, in the amounts and at the times specified within
Appendices B-l, B-2, and B-3. Specific wire instructions for these payments on the RefUnded
Bonds are provided below:
Wire Instructions for Principal and Redemption Premium Payments:
JP Morgan Chase Bank, NYC
ABA
#021
000
021
For Credit of A/C Depository Trust Co.
Redemption Acct. - 066-027306
OBI = PPAICUSIP #/Redemption Date
DTC
Contact:
Phone:
FAX:
FrankBarton
(516) 227-4402
(516) 227-4510 (4511) and (4512)
Wire Instructions for Interest Payments:
JP Morgan Chase Bank, NYC
ABA
# 021
000
021
BNF = Depository Trust Co./Acct. - 066-026776
OBI - P/A - DDA
00508661n;Vire
DTC Contact: Hetty Bullen
Phone: (212) 855-4649
FAX: (212) 855-4778
match
control
number
fUrther direction will be required by the Escrow Agent upon receipt of this wire transfer
information.
7.
Reinvestment; Substitution. (a) Except as otherwise provided in this Paragraph
7, neither the County nor the Escrow Agent shall otherwise invest or reinvest any money in the
Escrow
Fund.
(b)
Upon the prior written request of the County and upon compliance with the
conditions hereinafter stated, the Escrow Agent shall sell, transfer or otherwise dispose of, or
request the redemption of Escrow Securities (or any previously acquired Substituted Escrow
Securities) as shall be specified in such request by the County and shall substitute for such
Escrow Securities (or Substituted Escrow Securities) direct obligations of or obligations the
principal of and interest on which are unconditionally guaranteed by the United States of
America designated by the County in such written request (the "Substituted Escrow Securities").
The Escrow Agent shall purchase the Substituted Escrow Securities with the proceeds derived
from the sale, transfer, disposition or redemption of the Escrow Securities (or previously
acquired Substituted Escrow Securities) and moneys, if any, provided by the County. No
substitution for the Escrow Securities (or previously acquired Substituted Escrow Securities)
shall be made by the Escrow Agent unless:
(i)
the Escrow Agent shall have received the opinion of Sidley Austin Brown
& Wood LLP, New York, New York, Bond Counsel, or other nationally
recognized bond counsel, designated by the County, stating that such substitution
will not adversely affect the exclusion from gross income for federal income tax
purposes of interest on the RefUnded Bonds or on the RefUnding Bonds and that
such substitution is permitted by this Agreement; and
(ii)
the Escrow Agent shall have received a verification report from an
independent certified public accountant or firm of independent certified public
accountants/financia1 consultants selected by the County, stating that the principal
of and interest on the Substituted Escrow Securities, together with any cash or
Escrow Securities (or any previously acquired Substituted Escrow Securities) in
the Escrow Fund for which substitution is not then being made, will be fUlly
sufficient, without reinvestment, to meet the payment requirements with respect to
the
(c)
Refunded
Bonds.
Investments in mutual fUnds or unit investment trusts are prohibited.
8.
No Liability. The Escrow Agent shall not be liable or responsible for any loss
resulting from any investment or reinvestment made in the Escrow Securities.
9.
Inviolability of Escrow Fund. In the event of the Escrow Agent's failure to
account for any fUnds or securities received by it for the County's account under this Agreement,
such funds and securities shall be and remain the property of the Escrow Fund, and the County
and the holders of the RefUnded Bonds shall be entitled to such preferred claims, and shall have
such first liens, upon such funds and securities as are enjoyed by a trust beneficiary. If for any
reason particular Escrow Securities or moneys cannot be identified, the Escrow Agent shall
as promptly as possible to make such identification. The moneys and securities received
by the Escrow Agent under this Agreement shall not be considered banking deposits by the
County, and the County shall have no right or title with respect thereto. The moneys and
securities so received by the Escrow Agent as Escrow Agent under this Agreement shall not be
subject to checks or drafts drawn by the County.
10.
Statements.
On or before the 25th day of each month commencing with
November 25, 2004, so long as the Escrow Fund is maintained under this Agreement, the Escrow
Agent shall forward to the County, addressed to the attention of the Director of the Department
ofr;inance, a statement in detail of the Escrow Securities, and the income and maturities thereof,
held and withdrawals of money from the Escrow Fund for the period from the last statement
furnished pursuant to this paragraph.
11.
Notice of Establishment
of Escrow Fund; Redemption.
(a) The County
directs the Escrow Agent, and the Escrow Agent agrees, to cause the notice of the establishment
of the Escrow Fund, and of the deposit of the Deposit and Escrow Securities to the Escrow Fund,
to be sent by certified mail, postage prepaid to the registered owners of the RefUnded Bonds, to
each Nationally Recognized Municipal Securities Information Repository and any Virginia State
Information Depository las such terms are contemplated by Rule 15c2-12 of the Securities
Exchange Commission under the Securities Exchange Act of 1934, as amended), within five (5)
days after the date of this Agreement, such notices to be in the forms set forth in Appendices D1, D-2. and D-3.
(bl) The County hereby specifically and irrevocably elects to redeem on the 1997 B
RefUnded Bonds Redemption Date the 1997 B RefUnded Bonds at the applicable redemption
price of 102% of the principal amount of each 1997 B RefUnded Bond plus accrued interest to
the 1997 B RefUnded Bonds Redemption Date, as set forth in Appendix B-l.
(b2) The County hereby specifically and irrevocably elects to redeem on the 1998 A
RefUnded Bonds Redemption Date the 1998 A RefUnded Bonds at the applicable redemption
price of 102% of the principal amount of each 1998 A RefUnded Bond plus accrued interest to
the 1998 A RefUnded Bonds Redemption Date, as set forth in Appendix B-2.
(b3) The County hereby specifically and irrevocably elects to redeem on the 1999 B
Refunded Bonds Redemption Date the 1999 B RefUnded Bonds at the applicable redemption
price of 102% of the principal amount of each 1999 B RefUnded Bond plus accrued interest to
the 1999 B RefUnded Bonds Redemption Date, as set forth in Appendix B-3.
(c)
The County directs the Escrow Agent, and the Escrow Agent agrees, to cause the
notices of redemption, to be sent by certified mail, postage prepaid to the registered owners of
the RefUnded Bonds at least 30 but not more than 60 days prior to the applicable Redemption
Dates. The County agrees to take all other steps necessary for the redemption thereof, as
provided in and in accordance with the applicable provisions of the Bond Resolutions. Notices
of such redemptions shall be in substantially the forms set forth in Appendices C-l, C-2, and C-
Escrow Agent shall also take the following actions with respect to such notice of
redemption:
(d)
Not less than thirty-five (35) days prior to the date of redemption, notice of such
redemption shall be given by (i) registered or certified mail, postage prepaid, (ii) telephonically
confirmed facsimile transmission or (iii) overnight delivery service to each Nationally
Recognized Municipal Securities Information Repository, any Virginia State Information
Depository and the following securities depository at the address and transmission number given,
or such other address or transmission number as may have been delivered in writing to the
Escrow Agent for such purpose not later than the close of business on the day before such notice
is given:
The Depository Trust Company
55 Water
Street
New York, New York
10041
Telephone: (212) 855-1000
Facsimile
transmission:
(212) 855-7232
(212) 855-7233
(e)
Not less than thirty-five (35) days prior to the date of redemption, notice of such
redemption shall be given by (i) registered or certified mail, postage prepaid, or (ii) overnight
delivery service to at least two of the following services selected by the Escrow Agent:
12.
(1)
Financial Information, Inc.'s Daily Called Bond Service;
(2)
FIS-Mergent Called Bond Record; or
(3)
Standard & Poor's J.J. Kenny Called Bond Record.
Duties of Escrow Agent.
The Escrow Agent shall have no responsibility to any
person in connection herewith except the responsibilities specifically provided herein and shall
not be responsible for anything done or omitted to be done by it except for its own negligence or
misconduct in the performance of any obligation imposed on it hereunder. The Escrow Agent,
except as herein specifically provided for, is not a party to, nor is it bound by nor need it give
consideration to the terms or provisions of any other agreement or undertaking between the
County and other persons, and the Escrow Agent assents to and is to give consideration only to
the terms and provisions of this Agreement. Unless it is specifically provided, the Escrow Agent
has no duty to determine or to inquire into the happening or occurrence of any event or
contingency or the performance or failure of performance of the County with respect to
arrangements or contracts with others, with the Escrow Agent's sole duty hereunder being to
safeguard the Escrow Fund and to dispose of and deliver the same in accordance with this
Agreement. If, however, the Escrow Agent is called upon by the terms of this Agreement to
determine the occurrence of any event or contingency, the Escrow Agent shall be obligated, in
making such determination, to exercise reasonable care and diligence, and in the event of error in
making such determination the Escrow Agent shall be liable for its own misconduct and its
negligence. In determining the occurrence of any such event or contingency, the Escrow Agent
request from the County or any other person such reasonable additional evidence as the
Escrow Agent in its discretion may deem necessary to determine any fact relating to the
occurrence of such event or contingency and, in this connection, may inquire and consult with
the County, among others, at any time. The Escrow Agent shall be entitled to rely upon such
evidence that it in good faith believes to be genuine. The Escrow Agent may consult with legal
counsel, and the opinion of such counsel shall be full and complete authority and protection to
the Escrow Agent as to any action taken or omitted by it in good faith and in accordance with
such opinion.
13.
Benefits of Agreement. This Agreement is between the County and the Escrow
Agent only, and, in connection herewith, the Escrow Agent is authorized by the County to rely
upon the representations of the County in connection with this Agreement, and the Escrow Agent
shall not be liable to any person in any manner for such reliance.
The duties of the Escrow
Agent hereunder shall only be to the County and the owners of the Refunded Bonds. Neither the
County nor the Escrow Agent shall assign or transfer or attempt to assign or transfer its interest
hereunder or any part thereof. Any such assignment or attempted assignment shall be in direct
conflict with this Agreement and shall be void and without effect.
14.
Reliance on Instruments.
The Escrow Agent may act upon any written notice,
request, waiver, consent, certificate, receipt, authorization, power of attorney, or other instrument
or document that the Escrow Agent in good faith believes to be genuine and to be what it
purports to be.
15.
Notices.
Any notice, authorization, request, or demand required or permitted to
be given between the parties hereunder shall be in writing and shall be deemed to have been duly
given when mailed by registered or certified mail, postage prepaid, addressed as follows:
to the County
--
Board of Supervisors of the County of Fairfax, Virginia
12000 Government Center Parkway
Fairfax, VA 22035
Attention: County Executive
With a copy to:
Department ofl;inance
Fairfax County, Virginia
12000 Government Center Parkway
Fairfax, VA 22035
Attention:
Director
to the Escrow
Agent --
Wachovia Bank, National Association
Corporate Trust Group - VA 9646
East Cary Street, 3rd Floor
Richmond,
VA. 23219
Attention:
S.A. McMahon,
Vice President
16.
Business Days. Whenever under the terms of this Agreement the performance
date of any act to be done hereunder shall fall on a day that is not a legal banking day in
Richmond, Virginia, and upon which the Escrow Agent is not open for business, the
performance thereof on the next succeeding business day of the Escrow Agent shall be deemed
to be in full compliance with this Agreement. Whenever time is referred to in this Agreement, it
shall be the time recognized by the Escrow Agent in the ordinary conduct of its respective
normal
business
transactions.
17.
Agreement Binding Upon Assigns. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective personal representatives, successors,
and assigns.
18.
Fee of Escrow Agent.
The compensation for the Escrow Agent under this
Agreement has been agreed upon by the Escrow Agent and the County and is to be paid from
funds other than the Deposit and Escrow Securities and the income thereon.
Any legal expenses, or any costs, charges or expenses associated with the mailing of any
notice with respect to the RefUnded Bonds under this Agreement of the Escrow Agent, shall be
paid by the County solely from funds of the County, and in no event shall such costs, charges or
expenses give rise to any claim against the Escrow Fund, the moneys of which are solely for the
benefit
of the holders
of the RefUnded
Bonds.
19.
Resignation of Escrow Agent. The Escrow Agent may resign and thereby
become discharged from the duties hereby created, by notice in writing given to the County not
less than sixty (60) days before such resignation shall take effect. The Escrow Agent shall
continue to serve as Escrow Agent until a successor is appointed. Such resignation shall take
effect immediately, however, upon the appointment of a new Escrow Agent hereunder, if such
new Escrow Agent shall be appointed before the time limited by such notice and such new
Escrow Agent shall have accepted the trusts hereof. In the event of a resignation, the Escrow
Agent shall be liable for all costs and expenses (but not including administrative fees) associated
with the appointment of a new Escrow Agent and the transfer of the responsibilities outlined in
this Agreement to the new Escrow Agent.
20.
Removal of Escrow Agent. The Escrow Agent may be removed at any time by
an instrument or concurrent instruments in writing, executed by the owners of not less than a
majority in aggregate principal amount of the RefUnded Bonds then outstanding, such
instruments to be filed with the County. A photographic copy of any instrument filed with the
County under the provisions of this paragraph shall be delivered by the County to the Escrow
Agent.
The Escrow Agent may also be removed at any time for any breach of trust or for acting
or proceeding in violation of, or for failing to act or proceed in accordance with, any provisions
this Agreement with respect to the duties and obligations of the Escrow Agent, by any court of
competent jurisdiction upon the application of the County or the owners of not less than a
majority in aggregate principal amount of the Refunded Bonds then outstanding.
21.
Appointment
of Successor Escrow Agent.
If at any time hereafter the Escrow
Agent shall resign, be removed, be dissolved or otherwise become incapable of acting, or shall
be taken over by any governmental official, agency, department or board, the position of Escrow
Agent shall thereupon become vacant. If the position of Escrow Agent shall become vacant for
any of the foregoing reasons or for any other reason, the County shall appoint an Escrow Agent
to fill such vacancy. The County shall notify the registered owners of any such appointment
made by it by mail, postage prepaid within sixty (60) days of such appointment.
At any time after such appointment by the County, and prior to the termination of this
Agreement in accordance with Paragraph 23, the owners of a majority in aggregate principal
amount of the RefUnded Bonds then outstanding, by an instrument or concurrent instruments in
writing, executed and filed with the County, may appoint a successor Escrow Agent that shall
supersede any Escrow Agent theretofore appointed by the County. Photographic copies of each
such instrument shall be delivered promptly by the County to the predecessor Escrow Agent and
to the Escrow Agent so appointed by the owners of the RefUnded Bonds.
If no appointment of a successor Escrow Agent shall be made pursuant to the foregoing
provisions of this section, the owner of any RefUnded Bond or the retiring Escrow Agent may
apply to any court of competent jurisdiction to appoint a successor Escrow Agent. Such court
may thereupon, after such notice, if any, as such court may deem proper and prescribe, appoint a
successor
Escrow Agent.
If the Escrow Agent shall merge into another banking or other similar institution with
trust powers, or if substantially all of the assets of the Escrow Agent shall otherwise be acquired
by any such banking or other similar institution, the surviving or acquiring institution shall be
substituted for the Escrow Agent as Escrow Agent and shall succeed to the rights and obligations
of the Escrow Agent hereunder without the necessity of execution of any instrument or the
taking of any other action by the Escrow Agent, such surviving or acquiring bank, or the County
and without giving any notice, by publication or othenvise, to anyone other than the County.
22.
Amendment.
This Agreement shall be irrevocable and may not be amended,
without the consent of all the owners of the RefUnded Bonds then unpaid; provided, however,
that this Agreement may be amended, without the consent of the owners of unpaid Refunded
Bonds, for the following purposes:
(a) the insertion of unintentionally omitted material or the correction of mistakes
or clarification of ambiguities;
(b) the pledging of additional security to the RefUnded Bonds;
(c) the deposit of additional cash or securities to the Escrow Fund; or
any other amendment that a rating agency then rating the RefUnded Bonds has
confirmed in writing will not result in a reduction in its respective ratings on the
Refunded
23.
Bonds.
Termination.
This Agreement
shall terminate on the date upon which the
Escrow Agent makes the final payment to DTC in an amount sufficient to pay the balance of the
principal of and interest coming due on the Refunded Bonds. Upon the final payment of all of
the Refunded Bonds and except as otherwise requested in writing by the County, the Escrow
Agent shall sell or redeem any Escrow Securities remaining in the Escrow Fund and shall remit
to the County the proceeds thereof, together with all other money, if any, then remaining in the
Escrow
Fund.
24.
Severability. If any one or more of the covenants or agreements provided in this
Agreement on the part of the County or the Escrow Agent to be performed are determined by a
court of competent jurisdiction to be contrary to law, such covenant or agreement shall be
deemed and construed to be severable from the remaining covenants and agreements herein
contained and shall in no way affect the validity of the remaining provisions of this Agreement.
25.
Counterparts.
This Agreement may be executed in several counterparts, all or
any of which shall be regarded for all purposes as one original and shall constitute and be but one
and the same instrument.
26.
Governing Law. This Agreement shall be governed by the domestic law of the
Commonwealth ofVirginia.
[Remainder of page intentionally left blank]
WITNESS WHEREOF, the parties hereto have each caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
Fairfax
County
By:
ame: GeraldE. Connolly
Title:
Wachovia
Chairman of the Board of Supervisors
Bank, National
By:
Name:
S.A.
McMahon
Title:
Vice
President
Association
WITNESS
WHEREOF,
the parties hereto have each caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
Fairfax County
By:
Name:
Title:
Wachovia
By:
GeraldE. Connolly
Chairman of the Board of Supervisors
Bank, National
Association
~7S~c~3~f~f~;Z1~7~7i~
Name:
S.A. McMahon
Title:
Vice President
A
ESCROW
SECURITIES:
Type
Maturity Date
Par
Coupon
SLGS
12/01/04
$2,947,531
SLGS
06/01/05
SLGS
Price
Cost
1.510%
100%
1,566,828
2.020
100
1,566,828
12/01/05
38,306,337
2.210
100
38,306,337
SLGS
06/01/06
47,636,621
2.440
100
47,636,621
SLGS
12/01/06
570,539
2.670
100
570,539
SLGS
06/01/07
578,156
2.830
100
578,156
SLGS
12/01/07
2.960
100
51,749,536
51,749,536
A-1
$2,947,531
B-l
Fairfax County, Virginia
Public Improvement Bonds,
Series
1997
B
Pay to the registered owner of the 1997 B RefUnded Bonds, the amounts shown in the Total Debt
Service column on the corresponding date.
Schedule
Period Ending
12/1/04
Principal
$
-
6/1/05
of Debt
Interest
$ 885,000
Service
Redemption
Premium
$
-
885,000
12/1/05
36,000,000
885,000
Total:
$36,000,000
$2,655,000
Total
Debt Service
$
885,000
885,000
$720,000
$720,000
37,605,000
$39,375,000
B-2
Fairfax County, Virginia
Public Improvement Bonds,
Series
1998
A
Pay to the registered owner of the 1998 A RefUnded Bonds, the amounts shown in the Total Debt
Service column on the corresponding dates.
Schedule
Period Ending
12/1/04
Principal
$
-
6/1/05
12/1/05
of Debt
Service
Interest
$1,135,250
Redemption
Premium
$
-
1,135,250
-
Total
Debt Service
$1,135,250
1,135,250
1,135,250
-
1,135,250
6/1/06
45,600,000
1,135,250
912,000
47,647,250
Total:
$45,600,000
$4,541,000
$912,000
$51,053,000
B-2-1
B-3
Fairfax County, Virginia
Public Improvement Bonds,
Series
1999
B
Pay to the registered owner of the 1999 B Refunded Bonds, the amounts shown in the Total Debt
Service column on the corresponding dates.
Schedule
Period Endin~
Principal
-
of Debt
Service
Interest
12/1/04
6/1/05
12/1/05
6/1/06
12/1/06
6/1/07
12/1/07
$
50,160,000
$1,352,230
1,352,230
1,352,230
1,352,230
1,352,230
1,352,230
1,352,230
Total:
$50,160,000
$9,465,610
-
B-3-1
Redemption
Premium
Total
Debt Service
$
1,003,200
$1,352,230
1,352,230
1,352,230
1,352,230
1,352,230
1,352,230
52,515,430
$1,003,200
$60,628,810
-
C-l
NOTICE
OF
REDEMPTION
Fairfax County, Virginia
PUBLIC
IMPROVEMENT
Maturing
December 1 of each of the years 2006 through 2017, inclusive
BONDS,
SERIES
1997
B, Dated
December
1, 1997
and
NOTICE IS HEREBY GIVEN to the owners of the following outstanding Fairfax
County, Virginia Public Improvement Bonds, Series 1997 B (the "Refunded Bonds"), that such
Bonds shall be redeemed on the date at the redemption price (expressed as a percentage of the
principal amount of such Bonds) referred to below together with the interest accrued thereon to
the redemption date:
REFUNDED
BONDS
Redemption Date: December 1, 2005
Maturity
Date
PrincipalAmount
InterestRate
RedemptionPrice
CUSIPNumbers'
12/1/06
$3,000,000
4.50%
102%
12/1/07
3,000,000
4.50
102
303820 SK1
303820 SL9
12/1/08
3,000,000
5.00
102
303820 SM7
12/1/09
12/1/10
3,000,000
3,000,000
5.00
5.00
102
102
303820 SN5
303820 SPO
12/1/11
12/1/12
3,000,000
3,000,000
5.00
5.00
102
102
303820 SQ8
303820 SR6
12/1/13
12/1/14
12/1/15
12/1/16
12/1/17
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
5.00
5.00
5.00
5.00
5.00
102
~ 102
102
102
102
303820
303820
303820
303820
303820
SS4
ST2
SU9
SV7
SW5
On their Redemption Date, the RefUnded Bonds shall become due and payable at their
Redemption Price (together with the interest accrued thereon to the Redemption Date), interest
on the RefUnded Bonds shall cease to accrue, and from and after the Redemption Date the
'The Countyshall not be responsiblefor the accuracyof the CUSIPnumbersprovidedabove. The CUSIPnumbers
are provided solely for the convenience of bondholders. The CUSIP numbers provided above are the original
"unrefunded" CUSIP numbers assigned upon the original issuance of the Refunded Bonds do not reflect subsequent
changes, ifany.
shall have no rights in respect thereof except to receive payment of the Redemption Price
plus accrued interest to the Redemption Date.
Payment of the Redemption Price will be made upon presentation and surrender of the
Refunded Bonds, on or after December 1, 2005, at the office of the Director, as provided below.
The RefUnded Bonds should be presented for payment as follows:
If mailed:
If hand
delivered:
Department ofFinance
12000 Government Center Parkway
Department ofFinance
12000 Government Center Parkway
Suite 214
Suite 214
Fairfax, Virginia 22035
Fairfax, Virginia 22035
Attention:
Attention:
Director
Director
If bonds are presented by mail, the manner of shipment of bonds is at the bondholder's
discretion; however, transmittal by insured, registered mail is suggested.
Under current federal law, a paying agent making payments of principal and interest on
municipal securities may be obligated to withhold tax from the remittances to registered owners
who are not "exempt recipients" and who fail to fUrnish the paying agent with a valid Taxpayer
Identification Number. Generally, individuals are not exempt recipients, whereas corporations
and certain other entities generally are exempt recipients. Registered owners of the RefUnded
Bonds who wish to avoid the imposition of this tax should submit certified Taxpayer
Identification Numbers when presenting their RefUnded Bonds for collection.
Fairfax County, Virginia
Dated:
C-1-2
C-2
NOTICE
OF
REDEMPTION
Fairfax County, Virginia
PUBLIC IMPROVEMENT
BONDS, SERIES 1998 A, Dated May 15, 1998 and Maturing
June 1 of each of the years 2007 through 2018, inclusive
NOTICE IS HEREBY GIVEN to the owners of the following outstanding Fairfax
County, Virginia Public Improvement Bonds, Series 1998 A (the "RefUnded Bonds"), that such
Bonds shall be redeemed on the date at the redemption price (expressed as a percentage of the
principal amount of such Bonds) referred to below together with the interest accrued thereon to
the redemption date:
REFUNDED
BONDS
Redemption Date: June 1, 2006
Maturity
Date
6/1/07
6/1/08
Principal
Amount
$3,800,000
3,800,000
InterestRate
4.75%
5.00
RedemptionPrice
102%
102
CUSLPNumbers'
303820 TFI
303820 TG9
6/1/09
3,800,000
5.00
102
303820 TH7
6/1/10
3,800,000
3,800,000
5.00
5.00
102
102
303820 TJ3
303820 TKO
6/1/12
3,800,000
5.00
102
303820 TL8
6/1/13
6/1/14
6/1/15
3,800,000
3,800,000
3,800,000
5.00
5.00
5.00
102
102
102
303820 TM6
303820 TN4
303820 TP9
6/1/16
6/1/17
3,800,000
3,800,000
5.00
5.00
102
102
303820 TQ7
303820 TR5
6/1/18
3,800,000
5.00
102
303820 TS3
On their Redemption Date, the Refunded Bonds shall become due and payable at their
Redemption Price (together with the interest accrued thereon to the Redemption Date), interest
on the RefUnded Bonds shall cease to accrue, and from and after the Redemption Date the
owners shall have no rights in respect thereof except to receive payment of the Redemption Price
plus accrued interest to the Redemption Date.
'The Countyshallnotbe responsible
forthe accuracyof the CUSIPnumbersprovidedabove. TheCUSIPnumbers
are provided solely for the convenience of bondholders. This column indicates the CUSIP numbers that were
assigned upon the original issuance of the Refunded Bonds and does not reflect subsequent changes, if any.
C-2-1
of the Redemption Price will be made upon presentation and surrender of the
RefUnded Bonds, on or after June 1, 2006, at the office of the Director, as provided below.
The RefUnded Bonds should be presented for payment as follows:
If mailed:
Ifhand
delivered:
Department ofl;inance
12000 Government Center Parkway
Department ofli;inance
12000 Government Center Parkway
Suite 214
Suite
214
Fairfax, Virginia 22035
Fairfax, Virginia 22035
Attention:
Attention:
Director
Director
If bonds are presented by mail, the manner of shipment of bonds is at the bondholder's
discretion; however, transmittal by insured, registered mail is suggested.
Under current federal law, a paying agent making payments of principal and interest on
municipal securities may be obligated to withhold tax from the remittances to registered owners
who are not "exempt recipients" and who fail to fUrnish the paying agent with a valid Taxpayer
Identification Number. Generally, individuals are not exempt recipients, whereas corporations
and certain other entities generally are exempt recipients.
Registered owners of the RefUnded
Bonds who wish to avoid the imposition of this tax should submit certified Taxpayer
Identification Numbers when presenting their Refunded Bonds for collection.
Fairfax County, Virginia
Dated:
C-2-2
C-3
NOTICE
OF
REDEMPTION
Fairfarr County, Virginia
PUBLIC
IMPROVEMENT
BONDS,
SERIES
1999
B, Dated
December
Maturing
December 1 of each of the years 2008 through 2019, inclusive
1, 1999
and
NOTICE IS HEREBY GIVEN to the owners of the following outstanding Fairfax
County, Virginia Public Improvement Bonds, Series 1999 B (the "Refunded Bonds"), that such
Bonds shall be redeemed on the date at the redemption price (expressed as a percentage of the
principal amount of such Bonds) referred to below together with the interest accrued thereon to
the redemption date:
REFUNDED
BONDS
Redemption Date: December 1, 2007
Maturity
Date
12/1/08
Principal
Amount
$4,180,000
InterestRate
RedemptionPrice
CUSLPNumbers'
5.00%
102%
303 820 WWO
12/1/09
4, 180,000
5.00
102
303820 WX8
12/1/10
4, 180,000
5.30
102
303820 WY6
12/1/11
12/1/12
4, 180,000
4, 180,000
5.40
5.50
102
102
303820 WZ3
303820 XA7
12/1/13
12/1/14
4, 180,000
4,180,000
5.50
5.50
102
102
303 820 XB5
303820 XC3
12/1/15
12/1/16
4, 180,000
4, 180,000
5.50
5.50
102
102
303 820 XD 1
303820 XE9
12/1/17
12/1/18
4, 180,000
4, 180,000
5.50
5.50
102
102
303820 XF6
303820 XG4
12/1/19
4, 180,000
5.50
102
303 820 XH2
On their Redemption Date, the RefUnded Bonds shall become due and payable at their
Redemption Price (together with the interest accrued thereon to the Redemption Date), interest
on the RefUnded Bonds shall cease to accrue, and from and after the Redemption Date the
owners shall have no rights in respect thereof except to receive payment of the Redemption Price
plus accrued interest to the Redemption Date.
'The Countyshall not be responsiblefor the accuracyof the CUSIPnumbersprovidedabove. The CUSIPnumbers
are provided solely for the convenience of bondholders. This column indicates the CUSIP numbers that were
assigned upon the original issuance of the Refunded Bonds and does not reflect subsequent changes, if any.
C-3-1
of the Redemption Price will be made upon presentation and surrender of the
RefUnded Bonds, on or after December 1, 2007, at the office of the Director, as provided below.
The RefUnded Bonds should be presented for payment as follows:
If mailed:
Ifhand
delivered:
Department ofr;inance
12000 Government Center Parkway
Department ofFinance
12000 Government Center Parkway
Suite 214
Suite 214
Fairfax, Virginia 22035
Fairfax, Virginia 22035
Attention:
Attention:
Director
Director
If bonds are presented by mail, the manner of shipment of bonds is at the bondholder's
discretion; however, transmittal by insured, registered mail is suggested.
Under current federal law, a paying agent making payments of principal and interest on
municipal securities may be obligated to withhold tax from the remittances to registered owners
who are not "exempt recipients" and who fail to furnish the paying agent with a valid Taxpayer
Identification Number. Generally, individuals are not exempt recipients, whereas corporations
and certain other entities generally are exempt recipients. Registered owners of the RefUnded
Bonds who wish to avoid the imposition of this tax should submit certified Taxpayer
Identification Numbers when presenting their RefUnded Bonds for collection.
Fairfax County, Virginia
Dated:
C-3-2
D-l
NOTICE
AND
NOTICE
TO
OWNERS
OF
ESTABLISHMENT
DEFEASANCE
OF
ESCROW
FUND
OF
Fairfag County, Virginia Public Improvement
Bonds Series 1997 B, Dated December 1,
1997
NOTICE IS HEREBY GIVEN to the owners of the Fairfax County, Virginia Public
Improvement Bonds described below (the "RefUnded Bonds"), that there has been deposited, in
trust, with Wachovia Bank, National Association, Richmond, Virginia, as escrow agent (the
"Escrow Agent"), United States Treasury obligations and cash in an amount that, together with
interest thereon, will provide for the payment in full of the interest on the Refunded Bonds to
their earliest redemption date, as set forth below, and the principal amount and applicable
redemption premium on the RefUnded Bonds on their redemption date.
REFUNDED
BONDS
Redemption Date: December 1, 2005
Maturity
Date
12/1/06
12/1/07
12/1/08
12/1/09
12/1/10
12/1/11
12/1/12
12/1/13
12/1/14
12/1/15
12/1/16
12/1/17
PrincipalAmount
$3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
InterestRate
4.50%
4.50
5.00
5.00
5.00
5.00
5.00
5.00
5.00
5.00
5.00
5.00
RedemptionPrice
102%
102
102
102
102
102
102
102
102
102
102
102
CUSIPNumbers'
303820
303820
303820
303820
303820
303820
303820
303820
303820
303820
303820
303820
SK1
SL9
SM7
SN5
SPO
SQ8
SR6
SS4
ST2
SU9
SV7
SW5
'The Countyshall not be responsiblefor the accuracyof the CUSIPnumbersprovidedabove. The CUSIPnumbers
are provided solely for the convenience of bondholders.
The CUSIP numbers provided above are the original
"unrefunded" CUSIP numbers assigned upon the original issuance of the Refunded Bonds do not reflect subsequent
changes, ifany.
is not a notice of redemption. The Bond Registrar and Paying Agent for the
RefUnded Bonds has been given irrevocable instructions to call the applicable Refunded Bonds,
and has been directed to give notice of the redemption not more than sixty (60), and at least
thirty (30), days before the respective redemption dates of the RefUnded Bonds. The principal on
all the Refunded Bonds will be payable at the office of the Director of Finance of Fairfax
County, Virginia, as the RefUnded Bonds Paying Agents.
Fairfax County, Virginia
Dated:
D-2
NOTICE
AND
NOTICE
TO OWNERS
OF
DEFEASANCE
ESTABLISHMENT
OF
ESCROW
FUND
OF
Fairfax County, Virginia Public Improvement
Bonds Series 1998 A, Dated May 15, 1998
NOTICE IS HEREBY GIVEN to the owners of the Fairfax County, Virginia Public
Improvement Bonds described below (the "Refunded Bonds"), that there has been deposited, in
trust, with Wachovia Bank, National Association, Richmond, Virginia, as escrow agent (the
"Escrow Agent"), United States Treasury obligations and cash in an amount that, together with
interest thereon, will provide for the payment in full of the interest on the RefUnded Bonds to
their earliest redemption date, as set forth below, and the principal amount and applicable
redemption premium on the RefUnded Bonds on their redemption date.
REFUNDED
BONDS
Redemption Date: June i, 2006
Maturity
Date
6/1/07
Principal
Amount
$3,800,000
InterestRate
RedemptionPrice
CUSIPNumbers'
4.75%
102%
303820 TFI
6/1/08
3,800,000
5.00
102
303820 TG9
6/1/09
6/1/10
3,800,000
3,800,000
5.00
5.00
102
102
303820 TH7
303820 TJ3
6/1/12
3,800,000
3,800,000
5.00
5.00
102
102
303820 TKO
303820 TL8
6/1/13
6/1/14
6/1/15
3,800,000
3,800,000
3,800,000
5.00
5.00
5.00
102
102
102
303820 TM6
303820 TN4
303820 TP9
6/1/16
3,800, 000
5.00
102
303 820 TQ7
6/1/17
6/1/18
3,800,000
3,800,000
5.00
5.00
102
102
303820 TR5
303820 TS3
'The Countyshall not be responsiblefor the accuracyof the CUSLPnumbersprovidedabove. The CUSIPnumbers
are provided solely for the convenience of bondholders. This column indicates the CUSIP numbers that were
assigned upon the original issuance of the Refunded Bonds and does not reflect subsequent changes, if any.
is not a notice of redemption.
The Bond Registrar and Paying Agent for the
RefUnded Bonds has been given irrevocable instructions to call the applicable RefUnded Bonds,
and has been directed to give notice of the redemption not more than sixty (60), and at least
thirty (30), days before the respective redemption dates of the RefUnded Bonds. The principal on
all the RefUnded Bonds will be payable at the office of the Director of Finance of Fairfax
County, Virginia, as the RefUnded Bonds Paying Agents.
Fairfax County, Virginia
Dated:
D-3
NOTICE
AND
NOTICE
TO
OWNERS
OF
DEFEASANCE
ESTABLISHMENT
OF
ESCROW
FUND
OF
Fairfax County, Virginia Public Improvement
Bonds Series 1999 B, Dated December 1,
1999
NOTICE IS HEREBY GIVEN to the owners of the Fairfax County, Virginia Public
Improvement Bonds described below (the "RefUnded Bonds"), that there has been deposited, in
trust, with Wachovia Bank, National Association, Richmond, Virginia, as escrow agent (the
"Escrow Agent"), United States Treasury obligations and cash in an amount that, together with
interest thereon, will provide for the payment in full of the interest on the RefUnded Bonds to
their earliest redemption date, as set forth below, and the principal amount and applicable
redemption premium on the RefUnded Bonds on their redemption date.
REFUNDED
BONDS
Redemption Date: December 1, 2007
Maturity
Date
Principal
Amount
12/1/08
$4,180,000
12/1/09
12/1/10
InterestRate
RedemptionPrice
CUSIPNumbersl
5.00%
102%
303820 WWO
4,180,000
4,180,000
5.00
5.30
102
102
303820 WX8
303820 WY6
12/1/11
12/1/12
4,180,000
4,180,000
5.40
5.50
102
102
303820 WZ3
303820 XA7
12/1/13
12/1/14
4,180,000
4,180,000
5.50
5.50
102
102
303 820 XB5
303 820 XC3
12/1/15
12/1/16
4,180,000
4,180,000
5.50
5.50
102
102
303820 XD1
303820 XE9
12/1/17
12/1/1 8
12/1/19
4, 180,000
4, 180,000
4, 180,000
5.50
5.50
5.50
102
102
102
303820 XF6
303 820 XG4
303820 XH2
'The Countyshall not be responsiblefor the accuracyof the CUSIPnumbersprovidedabove. The CUSIPnumbers
are provided solely for the convenience of bondholders. This column indicates the CUSLP numbers that were
assigned upon the original issuance of the Refunded Bonds and does not reflect subsequent changes, if any.
is not a notice of redemption.
The Bond Registrar and Paying Agent for the
RefUnded Bonds has been given irrevocable instructions to call the applicable Refunded Bonds,
and has been directed to give notice of the redemption not more than sixty (60), and at least
thirty (30), days before the respective redemption dates of the RefUnded Bonds. The principal on
all the RefUnded Bonds will be payable at the office of the Director of Finance of Fairfax
County, Virginia, as the RefUnded Bonds Paying Agents.
Fairfax County, Virginia
Dated
:
E
VERIFICATION
REPORT
E-l
NYI
5589399v3
'
''
I
'
I~I'
Fairfax County, Virginia
VerificationReport
October 19, 2004
L
C
rlC
I
I
I
I
r
II
Certified Public Accountants
Independent Accountant's VerificationReport
FairfaxCounty
VVachovia
BankNationalAssociation
Department
of Management
and Budget
1021EastOaryStreet,3'dFloor,VA9646
12000GovemmentCenter Parkway,Suite 561
Richmond,Virginia
Fairfax, Virginia
Public Financial Management, Inc.
SidleyAustinBrown&WoodLLP
4601NorthFairfaxDrive,Suite1130
787 Seventh Avenue
Arlington,Virginia
New York, New York
Pursuantto the requestof PublicFinancialManagement,
Inc.(the"Financial
Advisor")
on behalfofFairfaxCounty,
Virginia
(the"lssuer"),we haveperformed
certainprocedures,
as discussedbelow,inconnection
withthe Issuer's
proposedissuanceof$311,810,000
PublicImprovement
andRefunding
Bonds,Series20046,datedOctober19,
2004 (the "2004Bonds").
Proceedsfromthe 2004 Bondswillbe used in part and togetherwithother funds to advance refunda portionof three
ofthe Issuer'soutstanding
seriesof PublicImprovement
Bonds(collectively
referredto as the "Refunded
Bonds"),
as
summarized
below.
To Be Refunded
Amount
·
Series 1997B,dated December1, 1997 (the
"Refunded1997Bonds")
Maturities
Date and Price
12101106
12101105
through
$
36,000,000
12101117
06101107
·
Series 1998A,dated May15, 1998 (the "Refunded
1998Bonds")
through
$
45,600,000
06101118
12101108
·
Series 1999B,dated December1, 1999(the
"Refunded1999Bonds")
through
$
50,160,000
Optional
Redemption
12101119
at
102.00
06101106
at
102.00
12/01107
at
102.00
Theprocedureswereperformed
solelyto assistthe addresseesofthisreportinevaluating
the mathematical
accuracyofcertainschedulespreparedbythe Financial
Advisor
whichindicatethat:
·
there willbe sufficient funds available in an escrow account to be established on October 19, 2004 to pay the
remaining
debtservicepaymentsand redemption
premiums
relatedto the RefundedBonds(the"Escrow
Requirements"),
assumingthe RefundedBondsset forthabovewillbe redeemedat 102.00percentofparon
those redemptiondates set forthabove;
McGladrey
8.Pullen,LLPis a memberfirmofRSMIntemat'onal
an affiliationof separate and independent legal entities.
County, Virginia
SidleyAustinBrown8 WoodLLP
Wachovia
Bank National Association
Public Financial Management, Inc.
October 19, 2004
Page 2
·
the yieldon the UnitedStates TreasurySecurities- State and LocalGovernmentSeries (the "SLGS")to be
purchasedon October19, 2004 with2004 Bondproceeds (the "2004SLGS")is less than the arbitrageyieldon
the 2004 Bonds;
·
the yieldon the 1997 Prior-MoneySLGS,1998 Prior-MoneySLGS,and 1999PriorMoneySLGSlas defined
below)is equal to 2.2097661percent,2.4369645percent,and 2.9491207percent,respectively;and
·
the lowest mathematical arbitrage yield on the 2004 Bonds is achieved by treating (i) the Callable Premium
Bondslas definedbelow)as beingoptionallyredeemed at par on October1, 2014 and (ii)all other 2004 Bonds
as beingredeemed on theiroriginallyscheduledmaturitydates.
The procedureswe performedare summarizedbelow.
1. Weindependently
calculatedthefuturecash receiptsfromthe 2004SLGS(Exhibit
A-1)andthat portionofthe
SLGSto be purchasedwithfundsto be providedby the Issuer (the "Prior-Money
SLGS")attributableto (i)the
Refunded1997Bonds(the "1997Prior-MoneySLGS"),(ii)the Refunded1998 Bonds(the "1998Prior-Money
SLGS")and (iii)the Refunded1999 Bonds(the "1999Prior-MoneySLGS")(ExhibitA-2),comparedthe future
cash receipts to the Financial Advisor's schedules and found the future cash receipts to be in agreement.
2.
We independentlycalculatedthe EscrowRequirementsrelatedto the RefundedBondsusing informationfrom
the OfficialStatements for the Refunded Bonds, compared the Escrow Requirements to the Financial Advisor's
schedules and found the Escrow Requirements to be in agreement.
3.
Usingthe resultsof our independentcalculationsdescribedin procedures1 and 2 above and using an assumed
initialcash depositof $13.25to the escrowaccounton October19, 2004,we prepared an escrow accountcash
flowschedule (attached hereto as ExhibitA).The resultingcash flowschedule indicatesthat there willbe
sufficientfunds available in the escrow account to pay the Escrow Requirements on a timely basis.
4.
We comparedthe rate table date (i.e.,October8, 2004)set forthon the SLGSConfirmation
of Subscription
Receiptto FormPD 4262 Departmentof the Treasury- Bureauof the PublicDebt- SLGSTable for Use on
October8, 2004 (the "SLGSRate Table"),and foundthe dates to be the same.
5.
We comparedthe interestrate for each SLGSto the SLGSRate Tableand foundeach interestrate to be equal
to the applicablemaximumallowableinterestrate for use on October8, 2004.
6.
We comparedthe terms (i.e.,the principalamounts,interestrates, issue dates, maturitydates and firstinterest
paymentdates) of the SLGSto be acquiredon October19, 2004,as summarizedherein,to the finalSLGS
subscriptionformsprovidedby SidleyAustinBrown&WoodLLP;we foundthe terms to be in agreement.
7.
We comparedpertinentterms of the RefundedBonds(i.e.,debt servicepaymentdates, annual maturity
amounts,interestrates and optionalredemptionprovisions),as summan'zedon ExhibitsA-3throughA-5,to the
OfficialStatements for the Refunded Bonds provided by the Financial Advisor;we found the terms to be in
agreement.
8.
We independentlycalculatedthe initialreofferingprices of the 2004 Bondsusinginterestrates, reofferingyields
and optionalredemptionprovisionsprovidedby the FinancialAdvisorand comparedour resultsto those
providedby the FinancialAdvisor;we foundthe reofferingpricesto be in agreement.
County, Virginia
Sidley Austin Brown & Wood LLP
Wachovia
Bank National Association
Public Financial Management, Inc.
October19,2004
Page 3
9.
Usingthe resultsof our independentcalculationsdescribedin procedureNo. 8 above and usingan assumed
first optional redemption date of October 1, 2014 as provided by the Financial Advisor, we concluded that those
callable 2004 Bonds scheduled to mature in the years 2015 through 2020 (the "Callable Premium Bonds"),
which were initiallyreoffered at a price which exceeds 102.250, are the only callable 2004 Bonds that have
been issued at an issue pn'ce that exceeds the stated redemption pn'ce at maturity for each respective Callable
Premium Bond by more than one-fourth of one percent multipliedby the product of the stated redemption price
at maturityof such CallablePremiumBondand the numberof completeyears to the firstoptionalredemption
date of the 2004 Bonds (i.e., 102.250).
10. We independentlycalculatedthe yieldon the 2004 SLGS,the yieldson the Prior-MoneySLGS,and the
arbitrage yield on the 2004 Bonds, assuming a settlement date of October 19, 2004. The term "yield,"as used
herein, means that yield which, when used in computing the present value of all payments of principal and
intereston an obligation(adjusted,in the case of the:2004Bonds,to reflectthe assumed early redemptionof
the Callable Premium Bonds) compounded semiannually using a 301360-dayyear basis, produces an amount
equal to: in the case of the 2004 SLGS and the Prior-MoneySLGS, the purchase price of such securities; and,
in the case of the 2004 Bonds, the issue pn'ce to the public. The results of our yield calculations, which are
listed below, were compared to the yield calculations provided by the Financial Advisor; we found the yields to
be in agreement.
Yield
Exhibit
·
Yield on 2004 SLGS
2.6983680%
A-1
·
1997Prior-MoneySLGS
2.2097661%
A-2
·
1998Pn'or-Money
SLGS
2.4369645%
A-2
·
1999Prior-MoneySLGS
2.9491207%
A-2
·
Arbitrageyieldon 2004 Bonds
3.4366945%
B
Based on performing the agreed-upon procedures, we have found that those schedules provided by the Financial
Advisor,when comparedto those schedules preparedby us (attachedhereto as Exhibits),are arithmetically
accurate
and reflect, based on the assumptions set forth herein, thats
·
there willbe sufficientfunds available in the escrow account to pay the Escrow Requirements;
·
the yield on the 2004 SLGS is less than the arbitrage yield on the 2004 Bonds;
·
the yieldon the 1997Prior-MoneySLGS,1998 Prior-MoneySLGS,and 1999 Prior-MoneySLGSis equal to
2.2097661 percent, 2.4369645 percent, and 2.9491207 percent, respectively; and
·
the lowest mathematical arbitrage yield on the 2004 Bonds is achieved by treating (i) the Callable Premium
Bondsas beingoptionallyredeemed at par on October1, 2014 and (ii)all other 2004 Bondsas beingredeemed
on their originallyscheduled maturity dates.
County, Vir