NEW ISSUE—BOOK-ENTRY ONLY RATINGS: Fitch: AA Moody’s: Aa2 Standard & Poor’s: AA (see “RATINGS” herein) In the opinion of Bond Counsel, under existing statutes and court decisions and assuming continuing compliance with certain tax covenants described herein, (i) interest on the Bonds is excluded from gross income for federal income tax purposes pursuant to Section 103 of the Internal Revenue Code of 1986 (the “Code”) and (ii) interest on the Bonds is not treated as a preference item in calculating the federal alternative minimum tax imposed on individuals and corporations under the Code; such interest, however, is included in the adjusted current earnings of certain corporations for purposes of calculating the alternative minimum tax imposed on such corporations. See “TAX MATTERS” herein for a description of certain provisions of law which may affect the federal tax treatment of interest on the Bonds. In addition, in the opinion of Bond Counsel, under the existing statutes of the Commonwealth of Virginia, interest on the Bonds is not includable in computing the Virginia income tax.
$7,935,000 City of Roanoke, Virginia GENERAL OBLIGATION PUBLIC IMPROVEMENT REFUNDING BONDS, SERIES 2004A
Dated: March 1, 2004 Due: August 1, as shown on the inside cover
This Official Statement has been prepared by the City of Roanoke to provide information on the Bonds. Selected information is presented on this cover page for the convenience of the reader. To make an informed decision regarding the Bonds, a prospective investor should read this Official Statement in its entirety.
Purpose The proceeds of the Bonds will be used to refund in advance of their stated maturities certain outstanding general obligation bonds of the City (see “INTRODUCTION” on page 1 of this Official Statement). Issued Pursuant to The Bonds will be issued pursuant to the Public Finance Act of 1991, Title 15.2, Chapter 26, of the Code of Virginia, 1950. The City Council of the City adopted a resolution on January 20, 2004 authorizing the issuance and sale of the Bonds. Security The Bonds will be general obligations of the City, and the full faith and credit of the City will be irrevocably pledged to the punctual payment of the principal of and premium, if any, and interest on the Bonds as they become due. Interest Payment Dates February 1 and August 1, beginning August 1, 2004 Redemption Provisions See inside cover Denomination $5,000 or whole multiples thereof Registration Book-entry only; Cede & Co., as nominee for The Depository Trust Company Registrar/Paying Agent Director of Finance, City of Roanoke, Virginia Financial Advisor BB&T Capital Markets, a Division of Scott & Stringfellow, Inc., Richmond, Virginia Bond Counsel Hawkins Delafield & Wood LLP, New York, New York Issuer Contact Director of Finance, City of Roanoke, (540) 853-2821
The Bonds are offered when, as and if issued, subject to approval of their validity by Hawkins Delafield & Wood LLP, New York, New York, Bond Counsel. It is expected that delivery of the Bonds to DTC will be made in New York, New York, on or about March 11, 2004.
Dated: February 25, 2004 MORGAN KEEGAN & COMPANY, INC. DAVENPORT & COMPANY LLC LEGG MASON WOOD WALKER, INC.
$7,935,000 CITY OF ROANOKE, VIRGINIA, GENERAL OBLIGATION PUBLIC IMPROVEMENT REFUNDING BONDS, SERIES 2004A (Base CUSIP Number 770077)
MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, YIELDS AND CUSIP NUMBERS
Year of Principal Interest CUSIP Year of Principal Interest CUSIP Maturity Amount Rate Yield Suffix Maturity Amount Rate Yield Suffix
2004 $ 65,000 2.00% 1.10% XE0 2011 $705,000 3.00% 2.80% XM2 2005 110,000 2.00 1.15 XF7 2012 690,000 3.00 3.06 XN0 2006 110,000 2.00 1.38 XG5 2013 680,000 3.125 3.21 XP5 2007 765,000 2.00 1.63 XH3 2014 670,000 3.25 3.39 XQ3 2008 745,000 2.25 2.00 XJ9 2015 660,000 3.375 3.57 XR1 2009 730,000 2.50 2.25 XK6 2016 650,000 3.50 3.69 XS9 2010 715,000 2.75 2.56 XL4 2017 640,000 3.625 3.81 XT7
(Accrued interest to be added)
OPTIONAL REDEMPTION
The Bonds maturing on or before August 1, 2014 are not subject to redemption prior to maturity. The Bonds maturing on and after August 1, 2015 (or portions thereof in installments of $5,000) are subject to redemption at the option of the City prior to their stated maturities, on or after August 1, 2014, in whole or in part from time to time on any date, in such order as may be determined by the City (except that, if at any time, less than all of the Bonds of a given maturity are called for redemption, the particular Bonds or portions thereof in installments of $5,000 of such maturity to be redeemed shall be selected by lot), upon payment of the following redemption prices (expressed as a percentage of the principal amount of the Bonds to be redeemed), together with the interest accrued thereon to the date fixed for the redemption thereof:
Redemption Dates Redemption Prices (Both Dates Inclusive) (Percentage of Principal Amount)
August 1, 2014 through July 31, 2015 101% August 1, 2015 and thereafter 100
See also “DESCRIPTION OF THE BONDS - Notice of Redemption”.
CITY OF ROANOKE, VIRGINIA
CITY COUNCIL
RALPH K. SMITH, Mayor
C. NELSON HARRIS, Vice Mayor
WILLIAM D. BESTPITCH
M. RUPERT CUTLER
ALFRED T. DOWE, JR.
BEVERLY T. FITZPATRICK, JR.
LINDA F. WYATT
______
CITY COUNCIL APPOINTED OFFICIALS
DARLENE L. BURCHAM, City Manager
JESSE A. HALL, Director of Finance
WILLIAM M. HACKWORTH, City Attorney
MARY F. PARKER, City Clerk
TROY A. HARMON, Municipal Auditor
______
HAWKINS DELAFIELD & WOOD LLP, Bond Counsel 67 Wall Street New York, New York 10005 (212) 820-9300
BB&T CAPITAL MARKETS, a Division of Scott & Stringfellow, Inc., Financial Advisor 2 South Ninth Street Richmond, Virginia 23219 (804) 649-3937
FOR ADDITIONAL INFORMATION Department of Finance, City of Roanoke 215 Church Avenue, S.W., Room 461 Roanoke, Virginia 24011 (540) 853-2821
The information contained in this Official Statement (which term shall be deemed to include Appendix A, Appendix B, Appendix C, Appendix D, Appendix E and Appendix F to this Official Statement and all documents incorporated herein by reference) has been obtained from the City and other sources deemed reliable. The information concerning DTC has been obtained from DTC. No representation is made, however, as to the accuracy or completeness of the information contained in this Official Statement, and nothing contained in this Official Statement is, or shall be relied upon as, a promise or representation by the City. This Official Statement is submitted in connection with the sale of the securities described in it and may not be reproduced or used, in whole or in part, for any other purpose. The information contained in this Official Statement is subject to change without notice and neither the delivery of this Official Statement nor any sale made by means of it shall, under any circumstances, create any implication that there have not been changes in the affairs of the City since the date of this Official Statement. No broker, dealer, sales representative or any other person has been authorized by the City to give any information or to make any representation other than as contained in this Official Statement in connection with the offering described in it and, if given or made, such other information or representation must not be relied upon as having been authorized by the City. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy any securities other than those described on the cover and inside cover pages, nor shall there be any offer to sell, solicitation of an offer to buy or sale of such securities by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. ______THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. TABLE OF CONTENTS Page INTRODUCTION ...... 1 DESCRIPTION OF THE BONDS ...... 1 Interest, Maturities and Places of Payment...... 1 Book-Entry Only Bonds ...... 1 Optional Redemption...... 1 Notice of Redemption...... 1 SECURITY FOR THE BONDS...... 2 PLAN OF REFUNDING...... 2 BONDHOLDER REMEDIES IN THE EVENT OF DEFAULT...... 2 RATINGS...... 3 LITIGATION AND CONTINGENT LIABILITIES...... 3 CERTIFICATE CONCERNING OFFICIAL STATEMENT ...... 4 APPROVAL OF LEGAL MATTERS...... 4 TAX MATTERS ...... 4 Opinion of Bond Counsel ...... 4 Certain Ongoing Federal Tax Requirements and Covenants ...... 5 Certain Collateral Federal Tax Consequences ...... 5 Original Issue Discount...... 5 Bond Premium ...... 6 Possible Government Action ...... 6 VERIFICATION ...... 6 UNDERWRITING ...... 6 FINANCIAL ADVISOR ...... 7 CONTINUING DISCLOSURE...... 7 OTHER MATTERS ...... 7 Appendix A The City of Roanoke ...... A-1 Appendix B Organizational Chart ...... B-1 Appendix C Independent Auditors’ Report and Audited Financial Statements of the City for the Fiscal Year Ended June 30, 2003 ...... C-1 Appendix D Proposed Form of Opinion of Bond Counsel...... D-1 Appendix E Description of The Depository Trust Company and the Book-Entry System ...... E-1 Appendix F Continuing Disclosure Certificate...... F-1
(i)
OFFICIAL STATEMENT
RELATING TO THE ISSUANCE OF
$7,935,000
CITY OF ROANOKE, VIRGINIA,
GENERAL OBLIGATION PUBLIC IMPROVEMENT REFUNDING BONDS, SERIES 2004A
INTRODUCTION
The purpose of this Official Statement, which includes the cover page and the appendices hereto, is to furnish information regarding the City of Roanoke, Virginia (the “City”), and its issuance and sale of $7,935,000 principal amount of General Obligation Public Improvement Refunding Bonds, Series 2004A (the “Bonds”).
The Bonds will be issued in accordance with the provisions of the Public Finance Act of 1991, Title 15.2, Chapter 26 of the Code of Virginia, 1950. The City Council of the City adopted a resolution on January 20, 2004 authorizing the issuance and sale of the Bonds.
The proceeds of the Bonds will be used to refund in advance of their stated maturities certain outstanding general obligation bonds of the City described under “PLAN OF REFUNDING” herein.
DESCRIPTION OF THE BONDS
Interest, Maturities and Places of Payment
The Bonds will be dated March 1, 2004, will bear interest from their date, payable on August 1, 2004 and semiannually on each February 1 and August 1 thereafter, at the rates per annum set forth on the inside cover page of this Official Statement and will mature on August 1 in each of the years and in the aggregate principal amounts set forth on the inside cover page of this Official Statement.
Book-Entry Only Bonds
The Bonds will be issued in fully-registered form in the denominations of $5,000 or whole multiples thereof and will be held by The Depository Trust Company (“DTC”), or its nominee, as securities depository with respect to the Bonds. Purchases of beneficial ownership interest in the Bonds will be made only in book-entry form and individual purchasers will not receive physical delivery of Bond certificates. Reference is made to Appendix E for a description of DTC and DTC’s book-entry system.
The Registrar and Paying Agent for the Bonds will be the Director of Finance of the City.
Optional Redemption
The Bonds are subject to redemption at the option of the City prior to their stated maturities as described on the inside cover page of this Official Statement.
Notice of Redemption
If any Bond (or any portion of the principal amount thereof in installments of $5,000) shall be called for redemption, notice of the redemption thereof, specifying the date, number and maturity of such Bond, the date and place or places fixed for its redemption, the premium, if any, payable upon such redemption, and if less than the entire principal amount of such Bond is to be redeemed, that such Bond must be surrendered in exchange for the principal amount thereof to be redeemed and a new Bond or Bonds issued equaling in principal amount that portion
of the principal amount thereof not to be redeemed, shall be mailed not less than thirty (30) days prior to the date fixed for redemption by first class mail, postage prepaid, to the registered owner of such Bond at his address as it appears on the books of registry kept by the Registrar for the Bonds as of the close of business on the forty-fifth (45th) day next preceding the date fixed for redemption. If notice of the redemption of any Bond (or portion thereof in installments of $5,000) shall have been given as aforesaid, and payment of the principal amount of such Bond (or the portion of the principal amount thereof to be redeemed) and of the accrued interest and premium, if any, payable upon such redemption shall have been duly made or provided for, interest on such Bond shall cease to accrue from and after the date so specified for the redemption thereof. So long as the Bonds are in book-entry only form, any notice of redemption will be given only to DTC or its nominee. The City shall not be responsible for providing any beneficial owner of the Bonds with any notice of redemption.
SECURITY FOR THE BONDS
The Bonds are general obligations of the City, and the full faith and credit of the City are irrevocably pledged to the punctual payment of the principal of and premium, if any, and interest on the Bonds as the same become due. In each year while the Bonds, or any of them, remain outstanding and unpaid, the City Council is authorized and required to levy and collect annually, at the same time and in the same manner as other taxes in the City are assessed, levied and collected, a tax upon all taxable property within the City, over and above all other taxes, authorized or limited by law and without limitation as to rate or amount, sufficient to pay when due the principal of and premium, if any, and interest on the Bonds to the extent other funds of the City are not lawfully available and appropriated for such purpose.
PLAN OF REFUNDING
The proceeds of sale of the Bonds, exclusive of the accrued interest thereon and the costs of issuance thereof, will be applied to the advance refunding of all or a portion of the $7,150,000 outstanding principal amount of the City’s General Obligation Public Improvement Bonds, Series 1997A, dated December 15, 1997, which mature on August 1 in each of the years 2007 through 2017 and which are subject to redemption and are to be redeemed on August 1, 2006 (the “Refunded Bonds”). Such proceeds will be deposited with SunTrust Bank, Richmond, Virginia, as Escrow Agent (the “Escrow Agent”), under an Escrow Deposit Agreement, dated as of March 1, 2004 (the “Escrow Deposit Agreement”), by and between the City and the Escrow Agent. Such proceeds will be invested in Government Obligations. The Government Obligations will mature and bear interest payable at times and in amounts sufficient to pay interest when due on the Refunded Bonds to their respective redemption dates and to pay the redemption prices of the Refunded Bonds on such dates. The City is undertaking the refunding of the Refunded Bonds described above in order to reduce its annual debt service expenditures.
BONDHOLDER REMEDIES IN THE EVENT OF DEFAULT
Section 15.2-2659 of the Code of Virginia, 1950, provides that, upon the affidavit of any owner or any paying agent of any general obligation bonds of a political subdivision of the Commonwealth of Virginia (including the City) in default as to payment of principal, premium or interest, the Governor shall immediately make a summary investigation and if such default is established to the Governor’s satisfaction, the Governor shall immediately make an order directing the State Comptroller to withhold all further payment to the political subdivision of all funds, or any part thereof, appropriated and payable by the Commonwealth to the political subdivision so in default for any and all purposes until such default is cured. The Governor shall, while such default continues, direct the payment of all such sums so withheld, or so much thereof as shall be necessary, to the owners of such bonds so in default, or the paying agent therefor, so as to cure, or to cure insofar as possible, the default on such bonds and the interest thereon. 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 State Comptroller by publication one time in a daily newspaper of general circulation in the City of Richmond and, in the case of registered bonds, by mail, to the registered owners of the Bonds. The State Comptroller advises that to date no order to withhold funds pursuant to Section 15.2-2659 has ever been issued. Although the provisions of Section 15.2-2659 have never been tested in a Virginia court, the Attorney General of Virginia has ruled that appropriated funds can be withheld by the
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Commonwealth pursuant to that section. In the fiscal year ended June 30, 2003, total direct appropriations paid by the Commonwealth to the City amounted to approximately $44.8 million.
Neither the Bonds, nor the proceedings with respect thereto, specifically provide any remedies which would be available to owners of the Bonds if the City defaults in the payment of principal of or premium, if any, or interest on the Bonds, nor do they contain any provisions for the appointment of a trustee to enforce the interests of the owners of the Bonds upon the occurrence of such default. Upon any default in the payment of the principal of or premium, if any, or interest on a Bond, the owner of such Bond could, among other things, seek to obtain a writ of mandamus from a court of competent jurisdiction requiring the City Council to assess, levy and collect an ad valorem tax, unlimited as to rate or amount, upon all property in the City subject to taxation by the City, sufficient to pay the principal of and premium, if any, and interest on the Bonds as the same shall come due and otherwise to observe the covenants contained in the Bonds and the proceedings with respect thereto. The mandamus remedy, however, may be impracticable and difficult to enforce. Further, the right to enforce payment of the principal of or premium, if any, or interest on the Bonds may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws and equitable principles, which may limit the specific enforcement of certain remedies.
Although Virginia law currently does not authorize such action, future legislation may enable the City to file a petition for relief under the United States Bankruptcy Code (the “Bankruptcy Code”) if it is insolvent or unable to pay its debts. Bankruptcy proceedings by the City could have adverse effects on bondholders including (a) delay in the enforcement of their remedies, (b) subordination of their claims to those supplying goods and services to the City after the initiation of bankruptcy proceedings and to the administrative expenses of bankruptcy proceedings and (c) imposition without their consent of a reorganization plan reducing or delaying payment of the Bonds. The Bankruptcy Code contains provisions intended to ensure that, in any reorganization plan not accepted by at least a majority of a class of creditors such as the holders of general obligation bonds, such creditors will have the benefit of their original claim or the “indubitable equivalent”. The effect of these and other provisions of the Bankruptcy Code cannot be predicted and may be significantly affected by judicial interpretation.
The City has never defaulted in the payment of either principal of or interest on any indebtedness.
RATINGS
Fitch Ratings, Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Services have assigned the Bonds the initial ratings set forth on the cover page of this Official Statement. An explanation of the significance of such ratings may only be obtained from the rating agency furnishing the same. The City furnished to such rating agencies the information contained in this Official Statement and certain publicly available materials and information about the City. Generally, rating agencies base their ratings on such materials and information, as well as investigations, studies, and assumptions of the rating agencies. Such ratings may be changed at any time, and no assurance can be given that they will not be revised downward or withdrawn entirely by either or all such rating agencies if, in the judgment of either or all, circumstances so warrant. Such circumstances may include, without limitation, changes in or unavailability of information relating to the City. Any such downward revision or withdrawal of any such ratings may have an adverse effect on the market price of the Bonds.
LITIGATION AND CONTINGENT LIABILITIES
The City Attorney reports that there is no litigation pending or, to his knowledge, threatened affecting the issuance of the Bonds or the security therefor. The City is a defendant in certain litigation arising in the ordinary course of operations and is subject to certain contingent liabilities, including the litigation and contingent liabilities described in Note 19 to the City’s financial statements included in Appendix C to this Official Statement. The City Attorney has reviewed the status of such litigation and is of the opinion that foreseeable liability, if any, in all of them would not have a material adverse effect upon the financial condition of the City. The City Attorney is also of the opinion that such litigation will not affect the validity of the Bonds or the ability of the City to levy ad valorem taxes for payment of the principal of and premium, if any, and interest on the Bonds.
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CERTIFICATE CONCERNING OFFICIAL STATEMENT
The City will furnish a certificate dated as of the date of delivery of the Bonds, signed by the City Manager and the Director of Finance, stating that the descriptions and statements contained in the Official Statement on the date of sale and on the date of delivery of the Bonds were, and are, to the best of their knowledge, true and correct in all material respects and did not and do not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading. In such certificate, the City Manager and the Director of Finance may state that they did not independently verify the information indicated in the Official Statement as having been obtained or derived from sources other than the City but that they have no reason to believe such information is not accurate. Such certificate will also state that from the date of this Official Statement to the date of delivery of the Bonds there has been no material adverse change in the condition of the City (financial or otherwise) which affects the City’s ability to pay principal of and premium, if any, and interest on the Bonds or any other general obligation bonds of the City.
APPROVAL OF LEGAL MATTERS
Certain legal matters relating to the authorization and validity of the Bonds are subject to the approval of Hawkins Delafield & Wood LLP, New York, New York, Bond Counsel. The opinion of Bond Counsel approving the Bonds will be furnished at the expense of the City upon delivery of the Bonds and will be printed on the Bonds. The proposed form of the opinion of Bond Counsel is set forth as Appendix D to this Official Statement. Bond Counsel has not prepared this Official Statement and has not verified its accuracy, completeness or fairness. Accordingly, Bond Counsel will express no opinion of any kind as to the Official Statement, and its opinion will be limited to matters relating to the authorization and validity of the Bonds and to the exclusion of interest on the Bonds from gross income for purposes of federal and Virginia income taxation as described herein.
TAX MATTERS
Opinion of Bond Counsel
In the opinion of Hawkins Delafield & Wood LLP, Bond Counsel, New York, New York, under existing statutes and court decisions and assuming continuing compliance with certain tax covenants described herein, (i) interest on the Bonds is excluded from gross income for federal income tax purposes pursuant to Section 103 of the Internal Revenue Code of 1986 (the “Code”) and (ii) interest on the Bonds is not treated as a preference item in calculating the alternative minimum tax imposed on individuals and corporations under the Code; such interest, however, is included in the adjusted current earnings of certain corporations for purposes of calculating the alternative minimum tax imposed on such corporations. In rendering its opinion, Bond Counsel has relied on certain representations, certifications of fact and statements of reasonable expectations made by the City in connection with the Bonds, and Bond Counsel has assumed compliance by the City with certain ongoing covenants to comply with applicable requirements of the Code to assure the exclusion of interest on the Bonds from gross income under Section 103 of the Code.
In addition, in the opinion of Bond Counsel, under the existing statutes of the Commonwealth of Virginia, interest on the Bonds is not includable in computing the Virginia income tax.
Bond Counsel expresses no opinion regarding any other federal or State tax consequences with respect to the Bonds. Bond Counsel renders its opinion under existing statutes and court decisions as of the issue date, and assumes no obligation to update its opinion after the issue date to reflect any future action, fact or circumstance, or change in law or interpretation, or otherwise.
Bond Counsel expresses no opinion on the effect of any action hereafter taken or not taken in reliance upon an opinion of other counsel on the exclusion from gross income for federal income tax purposes of interest on the Bonds or under State and local tax law.
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Certain Ongoing Federal Tax Requirements and Covenants
The Code establishes certain ongoing requirements that must be met subsequent to the issuance and delivery of the Bonds in order that interest on the Bonds be and remain excluded from gross income under Section 103 of the Code. These requirements include, but are not limited to, requirements relating to use and expenditure of gross proceeds of the Bonds, yield and other restrictions on investments of gross proceeds and the arbitrage rebate requirement that certain excess earnings on gross proceeds be rebated to the federal government. Noncompliance with such requirements may cause interest on the Bonds to become included in gross income for federal income tax purposes retroactive to their issue date, irrespective of the date on which such noncompliance occurs or is discovered. The City has covenanted to comply with certain applicable requirements of the Code to assure the exclusion of interest on the Bonds from gross income under Section 103 of the Code.
Certain Collateral Federal Tax Consequences
The following is a brief discussion of certain collateral federal income tax matters with respect to the Bonds. It does not purport to address all aspects of federal taxation that may be relevant to a particular owner of a Bond. Prospective investors, particularly those who may be subject to special rules, are advised to consult their own tax advisors regarding the federal tax consequences of owning and disposing of the Bonds.
Prospective owners of the Bonds should be aware that the ownership of such obligations may result in collateral federal income tax consequences to various categories of persons, such as corporations (including S corporations and foreign corporations), financial institutions, property and casualty and life insurance companies, individual recipients of Social Security and railroad retirement benefits, individuals otherwise eligible for the earned income tax credit and taxpayers deemed to have incurred or continued indebtedness to purchase or carry obligations the interest on which is excluded from gross income for federal income tax purposes. Interest on the Bonds may be taken into account in determining the tax liability of foreign corporations subject to the branch profits tax imposed by Section 884 of the Code.
Original Issue Discount
“Original issue discount” (“OID”) is the excess of the sum of all amounts payable at the stated maturity of a Bond (excluding certain “qualified stated interest” that is unconditionally payable at least annually at prescribed rates) over the issue price of that maturity. In general, the “issue price” of a maturity means the first price at which a substantial amount of the Bonds of that maturity was sold (excluding sales to bond houses, brokers, or similar persons acting in the capacity as underwriters, placement agents, or wholesalers). In general, the issue price for each maturity of Bonds is expected to be the initial public offering price set forth on the inside cover page of this Official Statement. Bond Counsel further is of the opinion that, for any Bonds having OID (a “Discount Bond”), OID that has accrued and is properly allocable to the owners of the Discount Bonds under Section 1288 of the Code is excludable from gross income for federal income tax purposes to the same extent as other interest on the Bonds.
In general, under Section 1288 of the Code, OID on a Discount Bond accrues under a constant yield method, based on periodic compounding of interest over prescribed accrual periods using a compounding rate determined by reference to the yield on that Discount Bond. An owner’s adjusted basis in a Discount Bond is increased by accrued OID for purposes of determining gain or loss on sale, exchange, or other disposition of such Bond. Accrued OID may be taken into account as an increase in the amount of tax-exempt income received or deemed to have been received for purposes of determining various other tax consequences of owning a Discount Bond even though there will not be a corresponding cash payment.
Owners of Discount Bonds should consult their own tax advisors with respect to the treatment of original issue discount for federal income tax purposes, including various special rules relating thereto, and the State and local tax consequences of acquiring, holding and disposing of Discount Bonds.
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Bond Premium
In general, if an owner acquires a Bond for a purchase price (excluding accrued interest) or otherwise at a tax basis that reflects a premium over the sum of all amounts payable on the Bond after the acquisition date (excluding certain “qualified stated interest” that is unconditionally payable at least annually at prescribed rates), that premium constitutes “bond premium” on that Bond (a “Premium Bond”). In general, under Section 171 of the Code, an owner of a Premium Bond must amortize the bond premium over the remaining term of the Premium Bond, based on the owner’s yield over the remaining term of the Premium Bond, determined based on constant yield principles. An owner of a Premium Bond must amortize the bond premium by offsetting the qualified stated interest allocable to each interest accrual period under the owner’s regular method of accounting against the bond premium allocable to that period. In the case of a tax-exempt Premium Bond, if the bond premium allocable to an accrual period exceeds the qualified stated interest allocable to that accrual period, the excess is a nondeductible loss. Under certain circumstances, the owner of a Premium Bond may realize a taxable gain upon disposition of the Premium Bond even though it is sold or redeemed for an amount less than or equal to the owner’s original acquisition cost. Owners of any Premium Bonds should consult their own tax advisors regarding the treatment of bond premium for federal income tax purposes, including various special rules relating thereto, and State and local tax consequences, in connection with the acquisition, ownership, amortization of bond premium on sale, exchange or other disposition of premium Bonds.
Possible Government Action
Legislation affecting municipal bonds is regularly under consideration by the United States Congress. In addition, the Internal Revenue Service has established an expanded audit program for tax-exempt bonds. There can be no assurance that legislation enacted or proposed or an audit initiated by the Internal Revenue Service involving either the Bonds or other tax-exempt bonds will not have an adverse effect on the tax-exempt status or market price of the Bonds. There can be no assurance that legislation enacted or proposed after the date of issuance of the Bonds will not have an adverse effect on the tax-exempt status or market price of the Bonds.
VERIFICATION
McGladrey & Pullen, LLP, Minneapolis, Minnesota, will verify certain mathematical computations (a) as to the sufficiency of the moneys and investments deposited under the Escrow Deposit Agreement (i) to pay, when due, the interest on the Refunded Bonds from the date the Bonds are issued to the date fixed for the redemption of the Refunded Bonds; and (ii) to pay the redemption prices of the Refunded Bonds on the date fixed for the redemption of the Refunded Bonds; and (b) as to the yield on the Bonds and on the Government Obligations to be purchased with the proceeds of sale of the Bonds and deposited in escrow pursuant to the terms of the Escrow Deposit Agreement. See “PLAN OF REFUNDING” above.
UNDERWRITING
Morgan Keegan & Company, Inc., Davenport & Company LLC. and Legg Mason Wood Walker, Inc. (collectively, the “Underwriters”) have agreed to purchase the Bonds at an aggregate purchase price equal to the initial public offering prices of the Bonds, less an underwriting discount in the amount of $30,570.95, plus accrued interest on the Bonds from their date to the date of the delivery thereof and payment therefor, pursuant to the terms of a Purchase Contract, dated February 25, 2004 (the “Purchase Contract”), by and between the City and the Underwriters. The Purchase Contract provides that the obligation of the Underwriters is subject to certain conditions precedent and that the Underwriters will be obligated to purchase all of the Bonds if any of the Bonds are purchased. The Bonds may be offered to certain dealers (including dealers depositing such Bonds into investment trusts, account or funds) and others at prices lower than the initial public offering prices. After the initial public offering the public offering prices of the Bonds may be changed from time to time by the Underwriters.
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FINANCIAL ADVISOR
BB&T Capital Markets, a division of Scott & Stringfellow, Inc., Richmond, Virginia, is employed as financial advisor to the City of Roanoke in connection with the issuance of the Bonds.
CONTINUING DISCLOSURE
The City will execute and deliver to the purchasers of Bonds a Continuing Disclosure Certificate, the form of which is set forth as Appendix F to this Official Statement, pursuant to which the City will covenant and agree, for the benefit of the holders of the Bonds, consistent with Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, to provide: annual financial information and operating data for the City, including audited financial statements of the City for each fiscal year beginning on and after July 1, 2003; in a timely manner, notices of certain events with respect to the Bonds, if material, including (i) principal and interest payment delinquencies, (ii) non-payment related defaults, (iii) unscheduled draws on debt service reserves reflecting financial difficulties, (iv) unscheduled draws on credit enhancements reflecting financial difficulties, (v) substitution of credit or liquidity providers or their failure to perform, (vi) adverse tax opinions or events affecting the tax-exempt status of the Bonds, (vii) modifications to rights of Bondholders, (viii) certain bond calls, (ix) defeasances, (x) release, substitution or sale of property securing repayment of the Bonds and (xi) rating changes; and notice of any failure of the City to provide required annual financial information referred to above will be provided to each nationally recognized municipal securities information repository and the appropriate Virginia State information depository, if any. The notices of certain events referred to above will be provided to each nationally recognized municipal securities information repository, to the Municipal Securities Rulemaking Board and to the appropriate Virginia State information depository, if any. As of the date of this Official Statement, the following nationally recognized municipal securities information repositories have been approved by the SEC: Bloomberg Municipal Repository, DPC Data Inc., FT Interactive Data and Standard & Poor’s Securities Evaluations, Inc.; no Virginia State information depository has been designated for the Commonwealth of Virginia. An updated list of NRMSIRs may be obtained from the Securities and Exchange Commission (www.sec.gov). The continuing obligation of the City to provide annual financial information and notices referred to above will terminate with respect to the Bonds when the Bonds are no longer outstanding. Any failure by the City to comply with the foregoing will not constitute a default with respect to the Bonds.
OTHER MATTERS
The City Council has by resolution authorized the distribution of this Preliminary Official Statement. The City has deemed 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 information permitted to be omitted pursuant to Rule 15c2-12.
The references, excerpts and summaries of all documents referred to herein do not purport to be complete statements of the provisions of such documents, and reference is directed to all such documents for full and complete statements of all matters of fact relating to the Bonds, the security for the payment of the Bonds and the rights and obligations of the holders thereof.
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Additional information and copies of the City’s published financial statements and budgetary documents may be obtained upon request to the office of Director of Finance, City of Roanoke, 215 Church Avenue, S.W., Room 461, Roanoke, Virginia, 24011, Telephone (540) 853-2821, or from the City’s Financial Advisor, BB&T Capital Markets, a division of Scott & Stringfellow, Inc., 2 South Ninth Street, Richmond, Virginia 23219, Telephone (804) 649-3937.
THE CITY OF ROANOKE, VIRGINIA
By: /s/ RALPH K. SMITH Mayor
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APPENDIX A
THE CITY OF ROANOKE
General
Roanoke, the largest city in the Commonwealth of Virginia west of Richmond, is located at the southern end of the Shenandoah Valley, approximately 170 miles west of Richmond, 235 miles southwest of Washington, D.C. and 250 miles west of Norfolk. This position in the Southeast gives Roanoke ready access to nearly two-thirds of the total population of the United States, all within a 500-mile radius. Lying at the region’s crossroads of major rail and highway systems, the City serves as the principal trade, industrial, transportation, medical and cultural center of western Virginia.
Chartered as a city in 1884, Roanoke encompasses a land area of approximately 43 square miles. The City’s population of over 94,000 represents more than 40% of the population in its metropolitan area, which includes the neighboring City of Salem, the Town of Vinton and the Counties of Roanoke and Botetourt.
Government
The City operates under the Council-Manager form of government. The City Council formulates policies for the administration of the City. It is comprised of seven members elected on an at-large basis to serve four-year staggered terms. Officers of the City Council are the Mayor, elected directly by the voters to a four-year term, and a Vice Mayor who is selected on the basis of the highest popular vote in council elections and serves a two-year term.
The City Council appoints the City Manager to serve as the City’s chief administrative officer. The City Council also appoints the Director of Finance, the City Attorney, the City Clerk and the Municipal Auditor, each of whom reports directly to the City Council. The City Manager is responsible for implementing the policies of the City Council, directing business and administrative procedures and appointing departmental officials and certain other City employees. The City Manager is aided by two Assistant City Managers. An organizational chart of the Roanoke government is included as Appendix B to this Official Statement.
The operation of the public school system in Roanoke is the responsibility of the City School Board (the “School Board”). The City Council appoints the seven members of the School Board to serve three-year staggered terms. The Superintendent of Schools is appointed by the School Board. Local funding for operating public schools in the City is provided by an appropriation from the City’s General Fund to the School Fund. The School Board, however, is an autonomous policy-making body in matters governing education and therefore independent of the City Council.
The City Treasurer and the Commissioner of Revenue are local constitutional officers of the Commonwealth, elected by the residents of Roanoke. The City Treasurer is responsible for the collection of and accountability for all monies payable to the City. The Commissioner of Revenue prepares the levy of real estate, public service, business, professional and occupational licenses and personal property taxes as well as processes City residents’ Virginia income tax returns. The Sheriff, the Commonwealth’s Attorney and the Clerk of the Circuit Court are also local constitutional officers elected by City residents. All constitutional officers serve four-year terms except the Clerk of Circuit Court, who serves an eight-year term.
Awards and Recognition
National studies continue to rank the City among the best in the nation. In December, 2003, the Center for Digital Government chose Roanoke as the top digital city in its population category of 75,000 to 124,999 for the third year in a row. Roanoke was the only city in the nation to receive this distinction for three years. Not only was the City recognized for its citizen-friendly website, but also for offering free downtown wireless Internet service and regional public access kiosks. The Roanoke Valley also earned a four-star rating in Expansion Management magazine’s fifth annual Quality of Life Quotient for May 2003. The rating was based on a reasonable cost of living,
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affordable housing, low crime, excellent transportation access, good public schools, proximity to community colleges and universities, an educated workforce and low taxes. Expansion Management also ranked Roanoke the 37th “hottest city for expansions and relocations” in January of 2004.
The National Civic League recognized the City of Roanoke as an All America City in 1996, 1988, 1982, 1979 and 1952. Roanoke shares the distinction of winning this award five times with only one other city. The All America City award is a community evaluation process of citizen action and problem solving techniques, which emphasizes citizen participation in local government. Roanoke has also received numerous awards and recognition for its innovative programs by the Virginia Municipal League.
Roanoke City Council Vision Statement
The Roanoke City Council is committed to making Roanoke a community of excellence. The City Council, in conjunction with the City administration and Roanoke citizens, developed the following vision statement:
Roanoke, “The Star City”, appreciating its past and planning for a shining future, will be a community of excellence, providing an outstanding quality of life through educational, economic and cultural opportunities for all people who live, work and visit here.
Effective Government Roanoke City government will be a leading force in shaping and achieving the future of our community. We will be participatory, responsive and efficient, valuing diverse community involvement, public/private partnerships and regional cooperation. Citizens will be involved in the establishment of community priorities. Our facilitative government will bring together all available resources to meet the challenges of the 21st century.
Economy Roanoke, with its vibrant downtown, will be a dynamic, diversified regional center of commerce and tourism, competing effectively in the global economy. To enhance economic opportunities, we will promote regional cooperation, nurture growth in existing business and recruit attractive new business and industry. Roanoke will be a destination for people seeking a unique combination of scenic, cultural and recreational attractions.
Education Roanoke will be a “learning” community, providing the necessary educational resources and opportunities for all persons to develop to their maximum potentials. Through community involvement and the latest technology, we will provide quality public education. We will strengthen our cooperation with area colleges and universities and expand continuing education to promote an environment of life-long learning.
Quality of Life Roanoke will be a community where every person and every family is important and respected. We will be a community of stable, safe, caring and friendly neighborhoods. We will protect our natural environment and promote cultural, social, and recreational opportunities that encourage present and future generations to choose Roanoke as their home.
City Administrative Officials
Darlene L. Burcham, 58, City Manager, joined the City in January 2000. Prior to being appointed City Manager, she served the City of Norfolk as Director of Human Services from 1987–1989, as Assistant City Manager from 1989–1995, and as Deputy City Manager from 1995–1999. Before her arrival in Norfolk, Ms. Burcham served for eight years as Assistant County Administrator and Acting County Administrator in James City County (VA),
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serving for eight years before that as Director of Social Services for the City of Hampton (VA). Ms. Burcham has been involved in numerous committees, programs and initiatives throughout the Commonwealth of Virginia, earning many distinctions along the way. She currently serves on the boards of the Roanoke Valley Convention and Visitors’ Bureau, the Regional Alliance, the Roanoke Valley Regional Commission, the United Way, the Fifth Planning District and the Junior League Advisory Committee. She also serves on the Regional Partnership Executive Committee and is a member of the International City Management Association (ICMA) and the Virginia Local Government Management Association. Recently, the Governor selected her to serve on the Urban Policy Task Force. She is the Vice Chairman for the Virginia Innovations Group and the Secretary to the Virginia First Cities Coalition. She holds a bachelor’s degree in psychology from the College of William & Mary, a master’s degree in Social Administration from Virginia Commonwealth University and a certificate from Harvard University’s John F. Kennedy School of Government. In 2003, Ms. Burcham received her Certified Manager designation.
George C. Snead, Jr., 58, has been Assistant City Manager for Operations since May 2001. He manages several departments within the City including Technology, General Services, Civic Facilities, Fire/EMS, Public Works and Utilities. Prior to May 2001, he was Assistant City Manager for Community Development, assigned in April 2000. Mr. Snead served as Director of Public Safety prior to being Assistant City Manager for Community Development. Before practicing public administration, he served as a member of the teaching faculty at Virginia Polytechnic Institute and State University. He holds a Bachelor of Science degree from the Citadel (1967) and a Master of Arts Degree from the University of North Carolina at Chapel Hill (1969). Mr. Snead is currently serving as a Board member of the Children’s Health Investment Program (CHIP) and the National Conference for Community and Justice and served as President of the Board from 1996–98. He has served as County Administrator, Craig County, Virginia, for seven years. Mr. Snead is a 2003 Graduate of Senior Executive Institute at University of Virginia Weldon Cooper Center for Public Service. He is a member of the International City Management Association (ICMA). On May 1, 2003, Mr. Snead achieved the designation as an ICMA Credentialed Manager. He has been active in the Roanoke Valley through the Regional Chamber of Commerce and the New Century Council.
Rolanda B. Russell, 50, has served the City as Assistant City Manager for Community Development since May 2001. Prior to this, she was Deputy City Manager/Assistant City Manager for the City of Decatur, Illinois. Ms. Russell received her Bachelor of Education from Southern Illinois University (1977). She also has certifications from Harvard University, John F. Kennedy School of Government (1999), Development Training Institute (1995) and the National Development Council (1991). She was awarded the Women of Excellence Award for Outstanding Women in Government and the Athena Award from the Chamber of Commerce.
Jesse A. Hall, 56, Director of Finance, was employed by the City in April 1975. Prior to becoming Director of Finance in February 2002, Mr. Hall served as Deputy Director of Finance for nine years and as Administrator of City Accounting Services for thirteen years, Assistant Municipal Auditor for two years and an Internal Auditor for three years. Mr. Hall, a certified public accountant, received a Bachelor of Science degree in accounting and a Masters degree in Business Administration from Virginia Polytechnic Institute and State University. He is a member of the American Institute of Certified Public Accountants, the Virginia Society of Certified Public Accountants and the Government Finance Officers Association of America and Canada. Mr. Hall is past President of the Virginia Government Finance Officers Association. Mr. Hall also serves as a Commissioner and Treasurer on the Roanoke Valley Detention Commission and as Secretary Treasurer for the City of Roanoke Pension Plan, and serves on the Virginia Municipal League’s Financial Policy Committee. Mr. Hall also served on the Board of Directors of the Roanoke Valley Federal Credit Union and the Roanoke Chapter of the Virginia Society of Certified Public Accountants.
William M. Hackworth, 55, has been City Attorney since July 1999. Prior to his appointment as City Attorney, Mr. Hackworth served as County Attorney for York County, Virginia, for over ten years. Prior to that, he served as a law clerk to the Honorable Ted Dalton, Judge, United States District Court for the Western District of Virginia (1973–1974), and as a trial attorney with the United States Department of Justice (1975–1977). He also served as an Assistant City Attorney for the City of Roanoke (1978–1988). He holds a Bachelor of Arts degree in political science from The Ohio State University (1970), a Juris Doctorate degree from the University of Virginia Law School (1973) and a Masters in Public Administration from the University of Virginia (1981). Mr. Hackworth
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was admitted to the Virginia State Bar in 1973 and is admitted to practice before the Supreme Court of the United States, the Supreme Court of Virginia, the United States Court of Appeals for the Fourth Circuit and the United States District Courts for the Eastern and Western Districts of Virginia. He is past President of the Local Government Attorneys of Virginia, past President of the York–Poquoson Bar Association, a past member of the Board of the Roanoke Bar Association, a member of the Section on State and Local Government Law of the American Bar Association, Local Government Attorneys of Virginia, General Laws Policy Committee of the Virginia Municipal League and the International Municipal Lawyers Association. He has authored various articles on municipal law issues.
Ann H. Shawver, 36, Deputy Director of Finance, joined the City in April 1994. Prior to becoming the Deputy Director of Finance, she served as Manager of Accounting Services for four years and Financial Systems Accountant for three years. Prior to joining the City, she was employed by KPMG LLP for approximately four years. Mrs. Shawver, a Certified Public Accountant, received a Bachelor of Business Administration from James Madison University (1989). She is a member of the American Institute of Certified Public Accountants, the Virginia Society of Certified Public Accountants, the Government Finance Officers Association and the Virginia Government Finance Officers Association. Mrs. Shawver served on the Board of Directors for the Roanoke Chapter of the Virginia Society of Certified Public Accountants for three years. She presently serves as Chair of the Regional Advisory Board of the Roanoke Valley SPCA.
Sherman M Stovall, 45, Acting Director of Management and Budget, has been employed by the City since 1994, serving in the positions of Grants Monitor, Budget/Management Analyst, Planning and Support Services Supervisor, and Budget Administrator. Mr. Stovall received his Bachelor of Arts degree in Management from Virginia Wesleyan College and a Master of Business Administration Degree from Marshall University. Mr. Stovall is active in the community, serving on the board of the YMCA Family Center Branch.
Governmental Services Provided by Roanoke
Roanoke provides a wide variety of governmental services to its residents. For budgetary purposes, the City organizes these services into the major program classifications discussed below.
Public Education
A seven-member School Board, the members of which are appointed by City Council, directs the Roanoke City Public School system. The cost of operating the system is accounted for in a separate School Fund which is reported as a discrete component unit in the City’s annual financial statements. The General Fund provides approximately 47% of the funding required to operate the school system, State monies 42%, Virginia sales tax 9%, and federal and other 2%. The School Board is responsible for the presentation of an annual budget request to the City Manager. The School Board is not empowered to levy taxes or incur indebtedness; therefore, public school capital facilities are provided by capital appropriations from the General Fund, the issuance of general obligation bonds by the City, Commonwealth of Virginia Literary Fund loans and Virginia Public School Authority bond funds.
Roanoke City Public Schools, a progressive urban school division, serves approximately 13,000 students in kindergarten through 12th grade. Including regional and preschool students, the number of students increases to approximately 13,500. The school system is committed to personalizing education so that all children are provided with a quality education and the proper environment in which to learn.
The School Board operates twenty-one elementary, six middle, two high and two alternative schools. It employs 1,150 instructional personnel. The overall student-teacher ratio is approximately 18 to 1, but the primary grade ratio is 16 to 1.
Student enrollment statistics for recent years reflect the stabilization of the City’s population and are as follows:
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School Year Number of Students*
1993-94 12,740 1994-95 12,850 1995-96 13,127 1996-97 13,215 1997-98 13,231 1998-99 13,201 1999-00 13,213 2000-01 13,202 2001-02 13,209 2002-03 13,185 ______*Excludes pre-school enrollment. Enrollment has grown by 550 students since 1990.
In addition to the regular curriculum, a wide spectrum of programs is available to provide students with special assistance and academic challenge.
• Approximately 50 distinct instructional programs are provided including a regional program for 265 gifted high school students in science and technology, a regional program for 200 alternative education students with non-traditional learning needs and a regional program for 225 special education students with disabilities requiring unique instructional techniques. The district offers 25 preschool classes for three-and four-year-old-children.
• Programs for the academically talented, such as Pupils Learning Appropriately Together (PLATO) at the elementary level and CITY SCHOOL, a downtown storefront school for 65 seniors emphasizing liberal arts education at the secondary level, provide the extra incentive needed to motivate students with exceptional ability, as well as the Center for the Humanities, an integrated curriculum combining history and language arts for 9th-11th graders.
• The Magnet School of the Visual and Performing Arts enables students to pursue concentrated training in dance, instrumental music, vocal music, theatre arts, photography and visual arts.
• The Magnet School Center for High Technology provides senior high school students with the opportunity to study the world of high technology and aviation using state-of-the-art equipment and techniques.
• The Magnet School for Aerospace Technology offers students the challenge of science, technology, and mathematics programs tied to the theme of space exploration.
• The Roanoke Valley Governor’s School for Science and Technology is a regional center for the study of science, mathematics, and computer applications. It provides a challenging and distinctive curriculum for highly motivated, college-bound students.
• The Blue Ridge Technical Academy, an employer-linked public charter school under the purview of the Roanoke City School Board, serves high school students interested in careers in information technology and health and medical science.
Roanoke City’s educational cost per pupil of $8,307 for FY2002-03 is close to the State average and similar to other urban areas in the Commonwealth. Teacher salaries in Roanoke are competitive with other urban localities in the State and region.
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Eighteen institutions of higher learning, enrolling over 65,000 students, are located within a 60-mile radius of Roanoke. Virginia Tech, which is located in Blacksburg, 35 miles from Roanoke, is a major educational institution with 24,000 students. Its College of Engineering is one of the largest in the nation and produces highly sought-after graduates. Other institutions within close proximity include Hollins University, Radford University, Roanoke College and Virginia Western Community College. The City provides annual financial support for a portion of the operating costs of the Virginia Cooperative Extension Service and Virginia Western Community College.
In July 1997, the Higher Education Authority was established for the purpose of expanding access to higher education by providing undergraduate, graduate and professional programs. The Higher Education Authority opened the Higher Education Center in September 2000 with a variety of curricula offered by it sixteen member agencies and institutions.
Public Safety
The City provides several programs and activities designed to safeguard the life and property of its residents and visitors. Included among these programs are law enforcement, fire services, emergency medical services, communications and emergency preparedness.
The Police Department is dedicated to providing efficient and effective law enforcement services. The protection of life, property and civil liberties for all people in a fair and equitable manner is the Department’s daily objective. The department has an authorized full-time staff of 244 sworn officers and 60 civilian employees.
The Police Department achieved national accreditation from the Commission on Accreditation for Law Enforcement (CALEA) in July 1994 and was re-accredited for a second time in 2002. The Police Department will not be up again for re-accreditation until 2005. Less than 5% of the national law enforcement agencies are accredited.
The Roanoke Police Department continues to practice community policing on a routine basis. The Police Department began active participation with community policing with the formation of the Community Oriented Police Effort (C.O.P.E. Unit) in 1991. The community policing philosophy involves a greater degree of community involvement than traditional policing. Officers participate with individuals, community groups and other agencies to enhance community safety and prevent disorder and crime. The mounted patrol and the bicycle patrol have increased the presence and involvement of the police beyond traditional activities.
While officers apply their expertise to safety and security issues, they are also involved in a wide range of public service concerns. One of the most visible aspects of the Department’s community policing efforts this past year was the opening of two satellite offices in the community. The offices, which are located in the Southeast and Northwest areas of the City, are an excellent example of partnerships with the community. These satellite offices allow officers to be more visible in the communities they police and foster open working relationships between citizens and officers. Another community policing initiative was the launch of a take home car program. Select officers are authorized to drive their patrol cars home on a regular basis. The program was designed to increase visibility and availability of uniformed police personnel within the City of Roanoke.
The Roanoke Police Department has also enacted an intensive Homeland Defense Training program that has prepared the Department’s officers and the community for possible terrorists attacks. The goal of the 40 hour training course is to teach first responding officers to identify potential targets and to implement a plan of action to protect citizens and property from the danger associated with acts of aggression. Another successful program that was launched was Project Lifesaver, which uses state of the art technology in assisting those who care for the victims of Alzheimer’s and related mental dysfunction disorders to locate people who become disoriented when they leave their primary residence.
The Roanoke Police Department moved into a new police station at 348 Campbell Avenue, S.W., in September 2001. This facility is the 24-hour police facility for the Roanoke Police Department. The new structure
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is only Phase I and is about half the space that will be occupied by a completed Police Department. Including property acquisition, architectural and engineering work, the cost of the new facility was $5.2 million for Phase I. Planning is underway for Phase II expansion of the Police Building which will include facilities for police administration, the crime laboratory and other departments still using the current police building annex. A future bond issue will partially fund this $7 million project. This is the first time in its history that the City has constructed a facility specifically designed as a police facility, as the Department has previously occupied spaces originally designed for other uses. Planning is also currently underway for a memorial for fallen officers to be erected directly in front of the building.
The City of Roanoke was first named a Certified Crime Prevention Community by the Department of Criminal Justice Services during Fiscal Year 2001, and has maintained this status ever since. The program encourages localities to develop and implement collaborative community safety plans. To obtain this certification, the City had to meet twelve core elements, relating to different types of services that are available to citizens and businesses of the City. Roanoke was one of only two jurisdictions in Virginia to receive this prestigious award.
Roanoke Fire-EMS is a full-service fire and emergency medical service agency providing basic and advanced pre-hospital life support, fire prevention and education programs, fire suppression services, arson detection, vehicle extrication and tactical heavy rescue. It also supports a regional hazardous materials team. In addition to housing firefighting and EMS personnel and apparatus, fire-EMS stations are neighborhood resources. Fire-EMS personnel at these sites help distribute important City documents, teach children about fire safety and provide a safe place for lost children and adults.
Firefighter/EMTs operate out of 13 stations, seven days a week, 24 hours a day, with 16 pieces of front-line fire apparatus, seven front-line EMS units, one medium-squad and one HazMat unit. A new fire station and administrative building is planned for the corner of Elm Avenue and Franklin Road. The project will cost $4.4 million to be funded by general obligation bonds to be issued in the future. Roanoke Fire-EMS answers approximately 3,500 fire and 15,000 EMS runs annually.
Roanoke Fire-EMS holds a Class 2 rating from the Insurance Service Organization, the highest rating given to a Virginia fire department, and one of only five such ratings awarded in the State. This rating helps the community by bringing lower insurance rates to homeowners and businesses. Being named a nationally accredited agency in 2002 changed both our status in the community and the nation, as Roanoke Fire-EMS is one of only 4 fire departments in the State to hold this distinguished status.
The E911 Center provides Enhanced 911 (E911) service twenty-four hours a day for wireline 911 calls. Wireless 911 calls from all six Roanoke Valley carriers are being answered in the City’s E911 Center. The City is currently working on implementing enhanced wireless 911 which will enable the dispatchers to locate the caller within 125 meters. The Emergency E911 center is equipped with a Computer Aided Dispatch (CAD) System with mapping capability for identifying the location of wireless callers. Upon an emergency, the dispatcher can provide basic medical information while sending the appropriate public safety personnel. Approximately 400,000 emergency calls, which include police complaints and fire and rescue, are received and processed each year.
The City of Roanoke and Roanoke County currently have a Regional 800 Mhz Trunking Voice Radio System to serve both jurisdictions and the Town of Vinton. Mutual aid channels enable communication and coordination between local jurisdictions whenever dual response is needed. The wireless Mobile Computing system has been expanded to a Regional System to include Roanoke County and the State Police. The Town of Vinton plans to join the Regional System in the near future. The City has an Automated Public Safety System which is comprised of (1) a Computer Aided Dispatching (CAD) System, (2) a Police Records Management System (RMS), (3) a wireless Regional Mobile Computing system and (4) a Jail Management System (JMS). This integrated Public Safety System will further enhance the efficiency and effectiveness of all public safety services.
The Telecommunications Division of the Department of Technology is responsible for the implementation, installations and management of the City’s Telephony and Private Radio network hardware and software. The Telecommunications Division consists of the Radio Shop and the Telephony sections.
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The Radio Shop is responsible for the maintenance, installation and design of all City Radio Systems which consist of 800 MHz Trunking and other repeater systems at the Jail, Civic Center and Valley Metro, closed circuit TV systems, intercom systems, paging systems, and mobile data systems.
The Telephony section is responsible for the operation, maintenance and billing associated with the New PBX Telephone System and the City’s 16 remote sites. It is also responsible for the management and billing of the remaining Centrex circuits and associated Data Circuits.
The Office of Environmental and Emergency Management serves the City by ensuring that department operations and activities are in compliance with local, State and Federal regulations. Furthermore, the Office is also responsible for preparing timely responses to emergency situations within the City, providing for public safety and protection of property 24 hours per day. Additionally, training, community outreach and educational awareness for both environmental and emergency management issues are coordinated through this office. Fostering partnerships with local businesses and local governments in promoting the importance of sound environmental and emergency management practices is another component of this office. The Office of Environmental and Emergency Management will continue to enhance the customer services needs of its internal and external customers in the field of environmental and emergency management.
Health and Human Services
The City provides a wide array of mandated and non-mandated human service programs to the citizens of Roanoke. These services include a network of protective, supportive and temporary financial services that assist citizens with achieving a realistic and attainable level of self-sufficiency. Temporary financial assistance is provided to eligible families and individuals through such programs as Temporary Assistance to Needy Families, Medicaid, Food Stamps, Auxiliary Grants, General Relief, State/Local Hospitalization and Energy Assistance. Protective, preventive and supportive services are provided through such programs as Child and Adult Protective Services, Foster Care and Adoptions, Prevention Services, Court Services, Child Care Services and Foster Care and Adoptive Home Recruitment. Employment Services are also available to assist eligible individuals in retaining, regaining or securing employment. The Department of Human Services also serves as the supervision for the Regional Virginia Institute of Social Services Training Activities (VISSTA).
The Parks and Recreation Department (which houses the Office on Youth) and the Police Department work together to create innovative prevention avenues such as the Youth Summer Intern program. The Office on Youth works specifically in the area of delinquency prevention for youth and families. The focus is to eliminate or reduce the environmental, community or policy factors leading to involvement in the juvenile justice and/or social services programs. Additionally, there is a public school and local government collaborative effort to provide after-school enrichment activities for elementary age youth and their parents.
The City operates a 15-bed Juvenile Crisis Intervention Center, a 12-bed male post-dispositional juvenile facility and an Outreach Detention Program capable of serving 24, that also provides electronic monitoring services. The Crisis Intervention Center and juvenile male probation facility provide counseling as well as enhanced youth and family outreach programs.
The Department of Human Services is responsible for administering the Comprehensive Services Act, which is charged with creating a collaborative system of child-centered, family-focused and community-based services and funding to address the strengths and needs of at-risk youths and their families. The Act combined the child and family services funding stream at the State and local level and mandated that the agencies assess, plan, develop and implement services to meet the identified needs of the community.
The Department of Human Services also includes support for the Health Department, Blue Ridge Behavioral Healthcare, Total Action Against Poverty and the Virginia Cooperative Extension Service. The Health Department provides health, dental and environmental services to City residents. Blue Ridge Behavioral Healthcare is the community services board charged with providing mental health, mental retardation and substance abuse programs. Total Action Against Poverty provides community and economic development assistance, health services, food and nutrition services, housing and energy conservation assistance, emergency assistance and A-8
education and employment opportunities. The Virginia Cooperative Extension Program provides residents with knowledge and skills to improve their quality of life through educational experiences.
The City operates a central library with five branches, a law library and one bookmobile. The City libraries utilize a regional, automated system developed in cooperation with the City of Salem, Roanoke County and Botetourt County.
Parks and Recreation
The Parks and Recreation Department is a dedicated team committed to improving the quality of life for the citizens and visitors of Roanoke by providing recreational opportunities through diverse programs and facilities; promoting environmental stewardship through beautification, management, and care of public spaces; and positive youth development through planning, collaboration, and the coordination of services. The department consists of four Divisions (Administration, Parks, Recreation, and Youth Services), and consists of 83 full-time and over 200 seasonal staff members, and manages a budget of approximately $5.2 million.
The City’s park system includes many natural assets, including the 534-acre Mill Mountain Park. Located adjacent to the Blue Ridge Parkway, this regional park serves as a gateway to Roanoke for Parkway visitors. Within the park lies the Discovery Center, an award-winning interpretive center which also serves as an information center. Carvin’s Cove, at over 12,000 acres, is Roanoke’s largest park. It boasts a magnificent natural setting for boating, fishing, hiking, biking and picnicking. Roanoke has 1,351 acres of maintained park land include 69 parks, 8 community centers, 4 fitness centers, 42 ball fields, 56 tennis courts, 38 playgrounds, 2 Olympic-sized swimming pools, an indoor rock climbing center, 3 gymnasiums, a skate park, and the River’s Edge Sports Complex. Currently, there are over five miles of paved greenways which are maintained by Parks and Recreation. Approximately 25 additional miles of greenways are either in the planning stages or under development. Two additional parks (Brown-Robertson and Ridgewood Parks) are also scheduled for completion in the upcoming year.
The Administrative Division provides support to both internal and external customers. The Parks Planner is responsible for park and greenway planning, and facilitating community involvement with future park and facility designs. Marketing and Resource Development staff promote the Department’s mission and benefits within the community, and solicits support (both financial and in-kind) by developing partnerships and sponsorships. The secretarial staff assists customers with program registration and general information.
The Parks Division is responsible for the cleanliness and aesthetic appearance of the City’s parks. The Athletics/Park Maintenance staff provides turf and field maintenance for parks and athletic fields. The Horticulture section provides placement and care of hanging flower baskets in the Downtown Business District and maintenance of approximately 90 flower beds throughout the City. The Urban Forestry section is responsible for the maintenance of over 17,000 trees in City parks and along City streets, and plants over 800 new trees each year within parks and other city-owned properties. Additionally, staff maintains the skateboard park, playgrounds, and other amenities located within the parks. The “Adopt-a-Park” program involves the community in the care and preservation of its park system by utilizing volunteers to help keep parks clean.
The Recreation Division responds to the recreation needs of all ages by delivering a variety of leisure service programs and managing recreation facilities. The Outdoor Recreation section delivers environmental education and outdoor adventure program opportunities; the Athletics section provides youth and adult leagues, tournaments, and camps; the Fitness and Wellness section oversees senior citizen trips and programs, aquatic facilities and water safety, fitness centers and wellness classes and the Neighborhoods section operates community centers and develops programs by working with various community groups.
The Youth Services Division provides Roanoke’s youth opportunities to learn about the functions of government through student tours and student government days; promotes education through the focus areas of school commitments; improves quality of life by providing for participation in the City’s youth initiative programs, leadership training opportunities, and internship programs, which encourage work ethic, diversity, and employment
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opportunities for future citizens; and by coordinating a Summer Nutrition program, encouraging healthy lifestyles for our future adult citizens.
Public Works
The City provides for the engineering and development of physical facilities, maintenance of existing facilities and services to citizens. These essential functions are performed:
Engineering: The Engineering Division is in various stages of study, design and construction with over 100 active projects as part of a multi-million dollar Capital Improvement Program including inspections, study, design and construction of bridge structures, parking structures, streets, storm drains and City owned/leased buildings.
Solid Waste Management: Once-per-week collection service is provided to 38,000 residential units and apartment complexes, nightly pickup is provided in the downtown area, and Sunday morning pickup is provided to Market Square. A very successful recycling program is offered to all of the City’s residential neighborhoods.
Transportation Division: The City maintains 153 signalized intersections, 57 school flashers, 26 warning beacons and 24 miles of related interconnector cables, in addition to a municipal fire alarm system. The City contracts with American Electric Power to install and maintain approximately 9,588 street lights. Other services provided include pavement repair and maintenance, snow removal, structural repairs to bridges and culverts, drainage maintenance, alley maintenance, plus curb, gutter and sidewalk construction and repair, for more than 1,200 lane miles of streets and roads. An average of 62 lane miles of streets are resurfaced annually.
Fleet Management: This department provides required service and preventive maintenance to in excess of 830 items of vehicular and motorized equipment. They also manage the motor pool program and all vehicular/equipment procurement and disposal.
Department of Housing and Neighborhood Services
The Department of Housing and Neighborhood Services was created to be the catalyst for developing strong neighborhoods and improving quality of life in Roanoke’s neighborhoods. The Department has twenty-three (23) full-time employees who are responsible for code enforcement, housing development, and neighborhood Services.
The Department’s code enforcement division is responsible for the enforcement of all nuisance codes to maintain the health, safety and welfare of Roanoke’s citizens. Specifically, the code enforcement staff administers the zoning ordinance, property maintenance code, the residential rental inspection program, weeds and trash abatement, inoperable motor vehicle ordinance and the graffiti abatement program. During the past fiscal year, staff cited about 3,500 property owners for nuisance code violations. Of that number, over 90% were abated by the city or the property owners. Code enforcement is necessary because the city’s quality of life is reflected in its appearance —clean, attractive neighborhoods are needed in order to encourage economic investment, revitalization, and population retention.
The housing development division is responsible for providing a balanced, sustainable range of housing choices in all price ranges and design options throughout the city. Specifically, this function entails targeting federal housing and city resources to: revitalize our inner-city neighborhoods; promote homeownership and develop opportunities of “housing clusters” that offer a diversity of housing types, prices, and scale. During the past fiscal year, the city partnered with the local housing authority and non-profit housing providers to provide both affordable and market-rate housing. Staff also developed various educational, marketing and outreach programs to increase citizen awareness of the city’s existing housing programs and opportunities.
The neighborhood services division is responsible for organizing neighborhood associations into viable entities to help sustain quality of life in their neighborhoods. Specifically, neighborhood services provides technical assistance and training to neighborhood groups, manages the neighborhood development grants, creates
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neighborhood watch programs, leadership training, and manages the Citizen Service Center. The Citizen Service Center answers citizen information calls and manages the tracking system for complaints and requests for service. During the past fiscal year, the center processed over 22,000 requests for information, service and complaints. Customer service issues documented by staff through the customer relationship management software, Service! These issues are subsequently referred to the appropriate city departments or divisions for handling. There are currently twenty-two city divisions using Service! with the intent to have at least one Service! work station in each department.
Enterprises
The following facilities are operated as public enterprises:
Water Utility: The City provides water service to 34,500 active accounts. Construction of a micro-filtration plant at the City’s Crystal Spring location was completed in November 2002. At five million gallons per day, this facility is one of the largest micro-filtration plants in Virginia. Funding for this project was provided in part by the City’s 2002 general obligation bond issue. Improvements to the water system continue including construction of interconnections with Roanoke County, the City of Salem and the Town of Vinton to provide regional water supply options. To increase investment in water distribution infrastructure replacement, a water rate increase was implemented March 2003. Even with this increase, the City still maintains one of the lowest water rates in the State.
A joint agreement to purchase up to 4 million gallons per day of water from Roanoke County was reached in 1999 as a partial solution to a water shortage due to a drought. This agreement, and a subsequent drought in 2002, became the catalyst for the City and Roanoke County to explore formation of a regional water and wastewater authority. Agreed to in principle in February 2003, the City Council and the Roanoke County Board of Supervisors established the Western Virginia Water Authority (the “Water Authority”) by adopting concurrent resolutions in January, 2004. The Water Authority will provide both water service to citizens of both localities and water pollution control to a total of five localities. The Water Authority will be governed by a seven member board, with three members appointed by the City, three members appointed by the County and a seventh member appointed by the other six. Teams comprised of both City and County employees are addressing the many legal, financial and operational issues associated with the formation of the authority. An asset valuation and rate study are also underway with a goal of rate equalization in less than a ten-year period. The goal is to have the Water Authority operational on July 1, 2004.
Wastewater Treatment Utility: The City owns and operates a regional tertiary treatment facility that consistently meets regulatory limits, requiring one of the highest standards of treatment in the nation. Its current capacity is 42 million gallons per day, serving 29,000 City accounts and providing bulk service to four neighboring localities. Replacement of two main collection system interceptors and plant improvements totaling $60 million has been completed. Funding for the City’s share of these projects was provided by the City’s 1994 general obligation bond issue and retained earnings of the Water Pollution Control Fund. Additional improvements to the treatment facility totaling $47 million have been designed and will soon commence, with the City’s share of these funds coming from a loan secured from the Virginia Water Facilities Revolving Fund administered by the Virginia Resources Authority. Sewer rate increases effective July 2003 and July 2004 have been implemented to fund debt service for the loan.
Transit Company: The City owns the Greater Roanoke Transit Company to provide local mass transit bus service along seventeen separate routes. During the year ended June 30, 2003, ridership totaled 1,967,860 passengers.
Civic Facilities: Civic facilities include the Roanoke Civic Center and a 25,000-seat stadium. The Roanoke Civic Center has an 11,000-seat arena, a 2,444-seat auditorium, and a 12,000-square foot exhibition hall. It is home to the Roanoke Express East Coast Hockey League team and the Roanoke Dazzle National Basketball Development League team. Recent improvements to the facility include expanded food and beverage offerings with name brand products, enhanced services for patrons with disabilities, new roofing for the coliseum and auditorium, and a new fall protection system for the arena ceiling grid. New dressing room facilities as well as a new office building and training rooms have been added. These improvements were funded by $2.17 million in Series 2002 A-11
bond funds. The Civic Center also has plans for a second phase of renovations to be funded by future bonds of approximately $14 million. Those renovations include a new basketball playing floor, exhibition hall, loading dock, kitchen, ticket office, administrative offices, locker rooms and increased power wattage. The city is also nearly complete with the grading process of site preparation for its new Victory Stadium location just off Orange Avenue near the Civic Center. This project is budgeted at $18 million, funded in large part from the Series 2002 bonds, and will provide a capacity of 8,000 seats for sports, 12,000 to 18,000 seats for amphitheater events and add 750 parking spaces to be shared with the Civic Center.
Parking Fund: This fund accounts for the operating revenue and expenses which result from the operation of six City-owned and/or controlled structured parking garages and six City-owned and/or controlled surface parking lots. The City opened its newest parking garage, Gainsboro Garage, in December 2001. It was funded, in part, by $2.5 million in Series 2002 bond funds. Future plans call for construction of at least one additional garage in upcoming years to serve the downtown west area where the renovated YMCA and Jefferson Center facilities are located.
CERTAIN FINANCIAL PROCEDURES
Description of Funds
Roanoke’s Comprehensive Annual Financial Report includes the funds utilized to provide financial accountability for City operations. The accounts of the City are organized on the basis of funds, each of which is considered to be a separate accounting entity. The transactions in each fund are accounted for by providing a separate set of self-balancing accounts which comprise its assets, liabilities, fund balance, retained earnings, revenues and expenditures/expenses. The following is a description of the funds included in the City’s Comprehensive Annual Financial Report:
General Fund
The General Fund accounts for all revenues and expenditures which are not accounted for in the other funds. Included in the sources of revenue to the General Fund are general property taxes, other local taxes (including a 1% sales tax collected by the Commonwealth and remitted to the City), fines and forfeitures, licenses, permits and privilege fees, the City’s share of certain Commonwealth-collected revenues and reimbursement of certain City expenses shared by the Commonwealth.
Major General Fund expenditures include the costs of general administration, police, fire, libraries, parks, community development, public works, health and welfare, transfers to the School Fund, transfers to other funds to provide certain capital expenditures, transfers to the Debt Service Fund to pay for debt service on general government debt, and operating transfers to Enterprise and Internal Service Funds.
Debt Service Fund
The Debt Service Fund accounts for the general long term debt service of the City, including School debt. Bonded indebtedness related to the City’s Water, Water Pollution Control, Civic Facilities and Parking Enterprise Funds is accounted for in each of the respective Enterprise Funds. Capital leases of Enterprise and Internal Service Funds are recorded in the respective funds. Receipts of the Debt Service Fund consist of transfers from the General and School Funds and interest earnings.
Capital Projects Fund
This fund accounts for all transactions related to City capital improvement projects (other than the construction of enterprise facilities), which are financed principally through intergovernmental grants, the issuance of general obligation indebtedness, interest earnings and transfers from the General Fund.
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Enterprise Funds
These funds account for the operation, maintenance, construction and debt service on bonds related to activities that are operated in a manner similar to private business enterprises. Enterprise Funds include Transit Company (Bus Service), Water, Water Pollution Control, Civic Facilities, Parking and Market Building Operations. Revenues consist principally of charges for services.
Internal Service Funds
These funds are used to account for services provided by certain departments to other departments on a cost reimbursement basis. Internal Service Funds include Department of Technology, Fleet Management and Risk Management.
Fiduciary Funds
These funds account for the assets held in a trustee capacity or as an agent for others. The Fiduciary Funds include the Pension Trust Fund, which accounts for the operations of the City’s pension system, and Agency Funds, which account for assets held for the Fifth District Employment and Training Consortium (FDETC) and the Hotel Roanoke Conference Center Commission. The FDETC was discontinued in July 1, 2003.
Comprehensive Annual Financial Report (CAFR)
Since 1973, the City’s financial statements have been audited annually by independent certified public accountants. The most recently completed audit, for the fiscal year ended June 30, 2003, was performed by KPMG LLP, Certified Public Accountants, Roanoke, Virginia.
During fiscal year 2002, the City adopted GASB Statement No. 34, “Basic Financial Statements–and Management’s Discussion and Analysis–for State and Local Governments”. Using this model, the fund financial statements are very similar to the statements presented previously. The Comprehensive Annual Financial Report now includes entity-wide statements presented on the full accrual basis of accounting, a management‘s discussion and analysis which provides an analytical overview of the government’s financial activities and required supplementary information. A portion of the City’s infrastructure was capitalized retroactively upon adoption of GASB Statement No. 34. The City concurrently adopted a policy to depreciate eligible infrastructure assets.
The accounting policies and procedures utilized by the City are in accordance with generally accepted accounting principles. The modified accrual basis of accounting is used for the General, Debt Service, Special Revenue and Capital Projects Funds. Under this method, revenues are recognized in the accounting period in which they are objectively measurable and available. Expenditures, other than principal and interest on long-term debt and compensated absences, are recorded when the related liability is incurred. Principal and interest on long-term debt and compensated absences are recognized when due. Enterprise Funds, Internal Service Funds and the Pension Trust Fund are accounted for on the accrual basis of accounting. The City of Roanoke has received the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association of the United States and Canada every year since fiscal year 1974.
The activities of the City of Roanoke Schools are reported in a separate School fund. The School Board issues a separately published Comprehensive Annual Financial Report reflecting the operations of the public school system as a legally separate entity. In accordance with Government Accounting Standards Board Statement Number 14, the School Board’s operations are presented in the City’s annual financial report in the form of a discretely presented component unit.
The audited general purpose financial statements of the City for the fiscal year ended June 30, 2003 are set forth in Appendix C. The City’s comprehensive annual financial report is available from the Director of Finance, Noel C. Taylor Municipal Building, Room 461, 215 Church Avenue, S.W., P.O. Box 1220, Roanoke, Virginia 24011.
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Budgetary Procedures
The City Charter requires the City Manager to submit a balanced budget to City Council at least sixty days prior to the beginning of each fiscal year. The annual budget process begins during the second quarter of the previous fiscal year with the notification to department or agency heads of budget guidelines by the City Manager. Budget requests are then reviewed by a budget committee. Meetings between the budget committee and department heads are scheduled to review and discuss departmental requests. Upon completion of a detailed budget preparation process, the City Manager prepares an initial budget for submission to the City Council. Tax rates and fees for services sufficient to produce needed revenues are proposed at this time.
The proposed budget of the School Board is submitted to the City Manager for incorporation in the budget presentation to City Council. The City Manager may also make recommendations in the proposed budget regarding the total appropriation for the school system. City Council makes an annual appropriation for the School Fund and authorizes capital projects for the school system. Council is prohibited from controlling how funds are expended except that it has the right to appropriate funds to the School Fund according to such major categories as may be prescribed by the State Board of Education.
After work sessions with the City Council and public hearings, the budget, as may be amended, is adopted in final form by City Council. Tax rates are established prior to the beginning of the fiscal year for which the budget is prepared. During the fiscal year, monthly reviews of revenues and expenditures are undertaken by the Department of Finance, and monthly financial statements are prepared and presented to City Council. The City has received the distinguished Budget Presentation Award from the Government Finance Officer’s Association of the United States and Canada every year since 1986.
Financial Accounting Systems
As a progressive public entity, the City maintains its accounting and financial records in an automated environment, always weighing its growing needs and new technology against the financial benefits of change.
All financial and accounting records are maintained on the Advantage Financial System, a state-of-the-art product of American Management Systems, Incorporated (AMS), designed especially for local governments. Advantage is an integrated financial management system supporting the requirements for local government accounting and reporting established by the Governmental Accounting Standards Board (GASB). The City also utilizes the extended purchase order and fixed assets subsystems of Advantage and periodically updates the Advantage software.
The City’s payroll is processed by GEAC Payroll’s Human Resource Management System. The package is comprehensive, multi-functional, has excellent tracking facilities, and contains flexible management reporting capabilities. The City also utilizes an in-house, decentralized time entry system, allowing on-line input of exception-based employee payroll data. This system interfaces with the City’s payroll system. The GEAC payroll system interfaces with Advantage Financial to process accounting transactions resulting from each payroll. The payrolls for the City of Roanoke, the School Board and the Pension System are processed on the payroll system. GEAC software are updated on a regular basis to keep up with current changes in computer technology and financial regulations.
The City utilizes a third-party budget preparation subsystem which allows decentralized submission of departmental budget requests.
The City Treasurer uses IBM microcomputer-based cash registers to process all revenue collected for the City. The work stations interface through the City’s local area network to both the accounts receivable subsystem and Advantage Financial.
In keeping with the City’s overall policy to provide the most efficient and cost effective automation possible, a variety of operating environments are used, including Netware, NT\2000, Tandem Non-Stop, AS/400, OS 390, CICS, TSO, SQL, NDS, AIX, Linux, Solaris, Websphere and Domino. These processing platforms provide A-14
a wide diversity of technology capabilities for handling current and future internal organizational needs and e-government services. Disk and tape storage devices ensure continued processing and backup capability with minimal service down time in the case of a system problem.
Investment Management
The City’s investment and cash management program is directed by the City Treasurer and the Director of Finance.
The investment of City of Roanoke funds is in accordance with the Code of Virginia. The objectives of the City’s investment policy are to assure safety and repayment of principal, provide flexibility to meet cash requirements, accomplish the maximum investment of all available funds, allow the City to obtain the highest competitive yield on investments and insure investments are in compliance with the Reporting and Disclosure Regulations of the Governmental Accounting Standards Board. In accordance with investment policy, the City has never invested in instruments referred to as derivatives, and the City does not employ leverage in its investments.
During the fiscal year ended June 30, 2003, the City’s average portfolio size, including investments of the governmental funds, proprietary funds and fiduciary funds, except the Pension Trust Fund, was approximately $72 million. The funds are invested in U.S. Treasury/Agency obligations, repurchase agreements, the Local Government Investment Pool managed by the Commonwealth of Virginia, commercial paper (rated at least A1/P1 by Standard & Poor’s and Moody’s Investors Service, respectively) and corporate notes (rated at least Aa and AA by Moody’s Investors Service and Standard & Poor’s, respectively).
GENERAL FUND REVENUES AND EXPENDITURES
The following is a discussion of the General Fund revenue structure and major classifications of General Fund expenditures. See Appendix C for the general purpose financial statements of the City relating to the General Fund for the fiscal year ended June 30, 2003.
Revenues
General Property Taxes. An annual ad valorem tax is levied by City Council on the assessed value of real and personal property located within the City as of January 1 in the fiscal year preceding the fiscal year in which the tax is due. The ratio of the assessed value of real property to its estimated fair market value is 100% as required by the Code of Virginia. During a reassessment, all property values are examined and adjustments are made where necessary to guarantee that all property is assessed at market value. Real property taxes are payable in two installments, on October 5 and April 5 of the fiscal year in which they are levied. Personal property taxes are due on May 31, and are prorated in cases where a taxpayer owns the property only part of the year. In 1998, the Commonwealth of Virginia passed the Personal Property Tax Relief Act. The Personal Property Tax Relief Act prescribed a plan for phasing out the personal property tax on personal-use vehicles. The Commonwealth pays localities the phased out portion which is currently 75%. The penalty for late payment by citizens is 10% of the amount of taxes due. Interest on delinquent taxes and penalties accrue at a rate equal to the rate of interest established quarterly pursuant to Section §6621 of the Internal Revenue Code of 1986. The City’s current rate is 5%. For the fiscal year ended June 30, 2003, property taxes (including penalties for late payment of prior years’ taxes) represented 34% of total General Fund revenues.
Other Local Taxes. The City levies various other local taxes including a sales and use tax, a tax on consumer utility bills, business, professional and occupational license taxes, a cigarette tax, a transient lodging tax and a prepared food and beverage tax. Other local taxes represented 33% of total General Fund revenues for the year ended June 30, 2003.
Intergovernmental Revenue. The City receives revenue from the Commonwealth of Virginia for a portion of shared expenses including certain expenditures for social services, the operations of constitutional offices, non-categorical aid, law enforcement, highway construction and operation of jail facilities. Revenues from the
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Commonwealth of Virginia and Federal government represented 22% of total General Fund revenues in the fiscal year ended June 30, 2003. The School Fund also receives a significant amount of aid from the Commonwealth in support of the public school system.
Other Revenues. Other sources of revenue represented 11% of total General Fund revenues and include permits, fees, licenses, fines, forfeitures, rents, interest, charges for services and miscellaneous revenues. In an effort to broaden its revenue base, the City periodically conducts a cost analysis of all fees charged and services provided.
Expenditures
Costs of General City Government. Payments for the costs of the operation of the City government are made from the General Fund. Such costs include expenditures for general administration, judicial administration, public safety, public works, health and welfare services, community development and parks and recreation. This classification represented 62% of total General Fund expenditures and transfers during the fiscal year ended June 30, 2003.
Costs of Education. A portion of the taxes levied by the City fund the operation of the City of Roanoke Public Schools. The local funding of the School Fund Component Unit represented 24% of total expenditures and transfers from the General Fund in the fiscal year ended June 30, 2003.
Transfers to Debt Service Fund. Debt service requirements on City general government indebtedness are paid by a transfer from the General Fund to the Debt Service Fund. During the fiscal year ended June 30, 2003, such transfers represented 9% of total General Fund expenditures and transfers.
Transfer to Other Funds. Transfers are made to fund capital projects and provide local match on grants. Transfers are also made to proprietary funds in the form of operating subsidies or to fund capital projects. During the fiscal year ended June 30, 2003, such transfers represented 5% of the total General Fund expenditures and transfers.
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SUMMARY OF GENERAL FUND REVENUES AND EXPENDITURES
Presented below are the summarized financial data for the General Fund revenues and expenditures as budgeted for the fiscal year ending June 30, 2004 and the actual amounts for the five fiscal years ended June 30, 1999 through June 30, 2003. Data for the fiscal year ending June 30, 2004 represents the initial adopted budget for the year.
The summary statement for the fiscal years 1999 through 2003 has been compiled from the audited general purpose financial statements. Data for the fiscal year ended June 30, 2003 should be read in conjunction with the related general purpose financial statements and notes thereto appearing in Appendix C.
General Fund (a) Adopted Budget Fiscal Year Ending Fiscal Year Ended June 30 (b) June 30 (c) 1999 2000 2001 2002 2003 2004 Revenues: Local taxes (d) ...... $122,769,605 $128,227,820 $134,202,448 $137,329,042 $139,415,946 $144,366,874 Permits, fees and licenses...... 750,752 827,219 840,520 1,076,603 909,669 907,302 Fines and forfeitures ...... 904,067 923,556 818,982 1,103,113 1,244,283 1,296,130 Rents and interest...... 981,664 1,188,918 1,044,448 1,100,101 1,114,804 1,093,091 Intergovernmental...... 41,150,031(d) 44,273,330(d) 43,731,237(d) 45,586,345(d) 44,848,086 45,745,428 Charges for services...... 5,551,911 5,599,880 5,709,059 6,073,913 6,657,533 10,975,195 Miscellaneous ...... 354,518 297,103 295,247 600,109(e) 800,957(g) 416,874 Total revenues 172,462,548 181,337,826 186,641,941 192,869,225 194,991,278 204,800,894 Expenditures: General government...... 11,105,929 11,088,959 11,670,266 11,544,730 11,638,167 11,768,234 Judicial administration...... 4,321,274 4,520,239 5,523,902 5,744,286 5,982,484 6,546,633 Public safety ...... 39,151,476 43,550,133 44,029,624 45,261,524 44,908,836 49,690,290 Public works ...... 24,161,473 21,980,873 22,894,595 23,336,521 23,184,404 23,533,677 Health and welfare...... 25,045,201 25,463,295 24,992,857 26,830,719 27,528,710 28,508,080 Parks, recreation and cultural...... 4,290,781 4,471,440 4,645,232 4,896,025 4,542,865 5,349,619 Community development...... 2,703,133 3,281,671 3,983,755 5,001,639 5,378,400 5,669,584 Nondepartmental...... 6,932 19,402 13,075 68,037 73,633 2,354,631 Transfers: School Fund Component Unit..... 43,244,475 45,587,308 48,508,397 46,617,823 47,408,556 48,889,446 Debt service fund...... 9,339,142 10,323,904 9,686,166 12,266,899 16,847,042 15,342,832 Capital projects fund...... 4,115,836 4,680,598 6,834,318 6,439,336 4,945,967 981,102 Other funds ...... 4,563,041 4,101,595 3,793,635 7,153,034 5,759,792 6,167,766 Total expenditures and Transfers...... 172,048,693 179,069,417 186,575,822 195,160,573 198,198,856 204,800,894 Net increase (decrease) in Fund balance...... 413,855 2,268,409 66,119 (2,291,348) (3,207,578) -0- Fund balance, beginning of year .. 6,338,328 6,752,183 9,020,592 12,053,873(f) 9,762,435 6,554,857 Residual equity transfer ...... -0- -0- -0- -0- -0- -0-
Fund balance, end of year ...... $6,752,183 $9,020,592 $9,086,711 $9,762,435 $6,554,857 $6,554,857
______Notes: (a) The summary has been prepared in accordance with generally accepted accounting principles prescribed by the Governmental Accounting Standards Board (GASB). See the general purpose financial statements included in Appendix C for more detailed information. (b) The above summary presents audited actual revenues, expenditures and fund balances of the General Fund of the City for the five fiscal years ended June 30, 1999 through June 30, 2003. (c) The amounts shown for FY 2004 represent the City’s adopted budget. (d) To enhance year to year comparability, the portion of personal property tax paid by the Commonwealth of Virginia is classified as a local tax, which differs from the classification in the City’s Comprehensive Annual Financial Report (CAFR). The State share of personal property tax is classified as Intergovernmental Revenue in the CAFR. (e) Includes transfer of $112,008 resulting from closure of the Management Services Fund. (f) Fund balance restated due to the City’s change in availability period related to tax revenues. (g) Includes transfer of $349,445 resulting from closure of the Materials Control Fund.
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ECONOMIC AND DEMOGRAPHIC FACTORS
Population
The City of Roanoke is the Commonwealth’s largest city west of Richmond and the economic center of western Virginia. The metropolitan statistical area, of which the City is the focal point, includes the Cities of Roanoke and Salem, the Town of Vinton, and the Counties of Roanoke and Botetourt, with a population of 235,932 (2000). Recent population statistics for the City are presented below.
Population of the City of Roanoke
1950 (U.S. Census) ...... 91,921 1960 (U.S. Census) ...... 97,110 1970 (U.S. Census) ...... 92,115 1980 (U.S. Census) ...... 100,220 1990 (U.S. Census) ...... 96,509 2000 (U.S. Census) ...... 94,911 2001 (Weldon Cooper Center Estimate) ...... 95,000 2002 (Weldon Cooper Center Provisional Estimate) ...... 94,600
2000 Population by Age
1 - 19...... 23,455 20 - 24...... 5,746 25 - 44...... 28,948 45 - 54...... 13,098 55 - 59...... 4,555 60 - 64...... 3,549 65 - 84...... 13,362 85 +...... 2,198 Total ...... 94,911
2000 Population by Race*
White ...... 69.40% Black...... 26.70 Asian or other Pacific Islander ...... 2.20 Other Race...... 1.50 American Indian, Eskimo or Aleut...... 0.20 100.00% ______Source: Bureau of Economic Analysis Notes: Hispanics represent 1.5% of Roanoke’s population and are included as part of several categories.
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Personal Income
Median adjusted gross income for married couples in the City and in the Commonwealth of Virginia for the fiscal years 1997 through 2001 is shown in the table below:
Median Adjusted Gross Income (Married Couples)
1997 1998 1999 2000 2001
City of Roanoke $35,762 $37,906 $39,766 $41,191 $41,938 Commonwealth of Virginia 48,078 50,849 53,745 56,530 57,619 ______Source: University of Virginia Weldon Cooper Center for Public Service.
The following table compares per capita personal income for the City, the Commonwealth and the United States for recent calendar years: Per Capita Income 1997 1998 1999 2000 2001
City of Roanoke $22,855 $24,653 $25,600 $26,948 $27,898 Commonwealth of Virginia 26,385 27,968 29,794 31,120 32,338 United States 25,412 26,893 27,880 29,760 30,413 ______Source: Bureau of Economic Analysis.
Construction Activity
The following table presents data on construction activity in the City during recent years:
Value of Building Permits Commercial Residential Total
Year Number Valuation Number Valuation Number Valuation 1994 592 $36,783,239 1,404 $24,711,081 1,996 $61,494,320 1995 650 45,987,381 1,710 13,814,876 2,360 59,802,257 1996 578 28,274,653 1,590 21,936,194 2,168 50,210,847 1997 580 42,373,274 1,678 18,729,936 2,258 61,103,210 1998 569 49,600,839 1,652 28,920,020 2,221 78,520,859 1999 567 56,706,299 1,543 24,952,546 2,110 81,658,845 2000 575 89,654,863 1,363 31,155,220 1,938 120,810,083 2001 572 57,716,867 988 45,045,159 1,560 102,762,026 2002 499 64,101,308 875 36,855,003 1,374 100,956,311 2003 437 60,291,138 730 21,844,483 1,167 82,135,621 ______Source: City of Roanoke.
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Housing
The following data is presented to illustrate the nature of housing in Roanoke for recent years:
1998 1999 2000 2001 2002 2003
Number of Single-Family Units 27,793 27,916 28,071 28,132 28,417 28,557 Number of Multi-Family Units 15,822 15,926 15,994 15,994 16,149 16,289 Total 43,615 43,842 44,065 44,126 44,566 44,846
Median Single-Family Unit Value $61,700 $65,300 $68,100 $70,300 $74,026 $78,430 ______Source: City of Roanoke, Office of Real Estate Valuation.
Transportation
As detailed on the following page, economic activity in Roanoke is directly associated with the City’s position as the major trade and transportation center in western Virginia, a position the City enjoys due to its location at the intersection of major rail and highway routes and due to its major regional airport. The following is a brief description of transportation facilities and services provided.
Highways
Located approximately equidistant between New York City and Atlanta, Roanoke is connected to the nation’s network of interstate highways by Interstate 81, which runs north-south through the Shenandoah Valley of Virginia. U.S. Route 460, connecting the City to Virginia’s Tidewater port facilities and other interstate routes, provides direct east–west travel. U.S. 220 and 11 provide alternate arteries for automotive traffic in the City’s metropolitan statistical area. Interstate 581 connects the downtown and Roanoke Regional Airport directly with Interstate 81 and U.S. Route 220. Interstate 73, which will run from Michigan to South Carolina, is proposed to follow a route passing through Roanoke along Interstate 581.
Railroads
Roanoke was established in the late 1800s at the junction of the Norfolk and Western (N&W) and Shenandoah Valley railroads. Over the years, N&W and Southern Railway were consolidated into Norfolk Southern (NS), now one of the nation’s largest and most prosperous transportation companies. In 1999, Conrail was dismantled, with NS acquiring some lucrative lines from Conrail into the northeastern portion of the United States.
Local operations of Norfolk Southern include Accounting, Communications & Signals, Finance & Treasury, Information Technology, Internal Audit, Law Department – Claims, Maintenance of Way & Structures, Marketing, Material Management, Mechanical, Public Relations, Police, Research and Tests, Safety & Environmental, Tax and Transportation departments.
The railroad has been a major factor in Roanoke’s industrial development. In the early 1990s, two area governments formed the Roanoke Valley Resource Authority, which awarded Norfolk Southern the contract to transport solid waste by rail from the transfer station, east of downtown, to the regional landfill, 33 miles away.
Air Transport Services
Roanoke’s Woodrum Field, which is operated by the Roanoke Regional Airport Commission, is serviced by the regional affiliates of four major carriers including Delta Connection, Northwest Airlink, United Express and US Airways. These airlines offer thirty–five nonstop flights per day to nine destinations, including major hubs with hundreds of flights to cities beyond. Regional jet service is available from Roanoke to the five cities of Atlanta, Charlotte, Chicago, Cincinnati, and Pittsburgh.
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The Roanoke Regional Airport Commission owns and operates the airport. The Commission was created by legislation of the 1986 Virginia General Assembly. The City of Roanoke and the County of Roanoke each appoint members to the Commission.
In 2002, 299,039 passengers were enplaned at the airport, and 35,084 scheduled aircraft operations took place. Roanoke Regional Airport’s passenger service area extends outward over a hundred mile radius, encompassing at least nineteen counties, including three in West Virginia. The total population of this service area is over 940,000. In addition, an average of 123 general aviation aircraft are based at Roanoke. One full service and four specialty fixed base operators are located on the field, as well as the training area for the aviation magnet high school. General aviation landings and takeoffs in 2002 totaled 59,627.
In addition to air passenger carriers and general aviation users, four major air cargo companies fly into and out of the airport on a scheduled basis carrying 13,085 tons of airfreight in 2002. United States Customs service is available upon request.
The airfield consists of approximately 900 acres, with two runways. One runway is 5,800 feet long, and the other is 6,802 feet long to facilitate safe aircraft operations in adverse weather conditions. They are both equipped with instrument landing systems. A six gate, 95,000-square foot passenger terminal was opened in September 1989.
A $128.5 million upgrade of both runways and an expansion of the overflow parking lot is underway. Other projects include continuing redevelopment of the general aviation area, construction of a new FAA control tower, and the relocation of certain taxiways. In addition, a free advanced wireless system has been installed to permit passengers access to the Internet and e-mail.
Truck and Bus Service
A number of interstate carriers are authorized to operate in the area. Specialized trucking services in the region include hauling and rigging, tank trucks, household moving, and parcel delivery.
Passenger bus service is available via Greyhound Bus Lines, with numerous schedules daily for local and long distance travel.
The Greater Roanoke Transit Company, which is owned by the City, provides local bus service for over 1.9 million passengers annually along sixteen routes throughout the City and to specific destinations in Roanoke County, the City of Salem and the Town of Vinton. The Transit Company owns and operates a state of the art operations, maintenance and administrative facility and the Campbell Court Intermodal Transportation Center in Downtown Roanoke, which serves as the focal point of all but one of the bus routes. With a total fleet of 40 buses, the Transit Company operates 31 buses in the peak hours of operation and 18 buses in the non-peak hours. All 40 of the Transit Company’s buses are wheelchair accessible to better serve the community. The fleet consists of models dating 1991 through 2001.
Flood Remediation Efforts
The City has completed three of four phases of the Peters Creek Flood Reduction project, which provides flood reduction measures for the Peters Creek Watershed. The project included channel widening, replacement of four bridge structures, clearing of debris and the construction of detention basins to prevent storm water runoff. Phase four will protect the most vulnerable of the remaining flood prone structures in this area.
The Roanoke River Flood Reduction project, which was partially funded with general obligation bond proceeds, will be conducted in conjunction with the United States Army Corps of Engineers. This project consists of a combination of channel widening and levy construction along nine miles of the Roanoke River within the City and will reduce annual flood damages along the Roanoke River by approximately 50%.
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Commerce, Industry and Employment
The economy of the City is an integral part of the economy of the entire Roanoke metropolitan area. While the City, the Counties of Botetourt, Craig, Franklin and Roanoke, and the City of Salem have separate political identities, in economic terms, they function as a single unit with the City as their economic center. (Craig and Franklin counties were added to the MSA as of March 2003).
The pattern of much of Roanoke’s economy was established prior to 1920. Roanoke’s economic base, however, has become more varied since the economic recession of the late 1950’s. Today, Roanoke’s economy is well diversified, with 100% of all census–defined industries located within its boundaries. The economy of the City, as well as that of the entire Roanoke metropolitan area, is predominantly non–agricultural. The economic base consists of service industries, wholesale and retail trade, manufacturing, governmental activity, transportation and other non–farm activities.
Services is the largest industry in the City, employing almost 29,000 or 41.1% of the labor base for first quarter, 2003. Healthcare-related activity accounts for approximately 30% of the service industry, due, in part, to Roanoke’s serving as the regional medical center of southwestern Virginia.
Trade is the second largest industry, covering a large county trade area region, with a combined population in excess of 940,000. This population is located within a one hour drive of downtown Roanoke and has effective buying income of over $11 billion. Roanoke’s per capita taxable sales in 2002 were $12,156, the highest in the Commonwealth of Virginia. Roanoke has had the highest per capita taxable sales in the Commonwealth of Virginia for ten of the eleven previous years.
Government is the third largest employer in the City, with 8,233 employees or 11.8% of the labor base for first quarter, 2003.
Finance, insurance and real estate ranked fourth with 4,948 employed. Banking institutions dot the City, constituting some of the area’s largest employers. Insurance companies are well represented as are real estate firms.
Manufacturing is the fifth largest industry in the City, employing 4,823 workers or 7% of the employment base. A broad range of manufacturing companies is represented, producing items from steel, bread and apparel to fiber optics, chemicals and communication systems.
Construction employs 4,134 or 5.9%, making it the sixth largest industry. Transportation and Communications is the seventh largest industry in the City, representing over 3,500 jobs, while utilities and information employ 2,304.
The City is home to 49.2% of the companies in the MSA and employs 53% of the area’s employees.
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MSA Major Private Employers as of September 2002
Approximate Employer Product or Industry Number of Employees
Carilion Health System Healthcare 7,047 Wachovia Banking 2,030 Norfolk Southern Corporation Transportation 1,970 Advance Stores Company, Inc. Auto Parts Distributor 1,955 Wal-Mart Retail 1,588 ITT Night Vision Equipment 1,560 Kroger Retail Grocery 1,467 Lewis–Gale Hospital Healthcare 1,388 Allstate Insurance Company Insurance 1,333 General Electric Drive Systems 1,133 Yokohama Tire Corporation Tire Manufacturer 1,021 Medical Facilities of America Healthcare 945 Lewis-Gale Clinic Healthcare 860 Home Shopping Network Fulfillment Services 368 Rowe Manufacturing Furniture Manufacturer 145 ______Source: Department of Economic Development
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Roanoke Metropolitan Area (Data Not Seasonally Adjusted)
March March 2002 2003 LABOR FORCE DATA (Place of Residence) Civilian Labor Force...... 136,559 132,385 Employment ...... 128,156 127,029 Unemployment ...... 4,336 4,785 Percent of Labor Force ...... 3.3% 3.6% State Rate (%)...... 4.0% 4.1% National Rate (%) ...... 6.1% 6.2% ESTABLISHMENT DATA (Place of Work) Nonagricultural Employment ...... 118,093 132,385 Manufacturing...... 16,346 13,967 Plastic & Rubber Products...... 1,413 1,218 Fabricated Metal...... 1,506 1,515 Electric and Electronic...... 1,860 1,556 Machinery Manufacturing ...... 2,157 538 Food Manufacturing ...... 821 1,036 Apparel Manufacturing...... 543 308 Printing and Publishing...... 641 608 Construction and Mining ...... 8,082 7,848 Transportation and Communications...... 5,931 5,678 Utilities ...... 378 350 Trade ...... 24,814 24,351 Retail ...... 18,821 18,442 Wholesale...... 5,993 5,909 Finance, Insurance & Real Estate ...... 8,733 8,545 Information ...... 2,901 2,586 Services...... 50,907 51,122 Government ...... 18,332 17,813 Federal...... 3,805 3,462 State & Local...... 14,527 14,352 ______Source: Virginia Employment Commission
Economic Development
The City of Roanoke continues to enjoy a historically high level of economic development activity. City Council is committed to creating jobs for its citizens and generating new sources of tax revenue by strengthening and diversifying the local economy. The following narrative highlights those activities occurring in the City.
Site and Building Development
Riverside Centre for Research and Technology
The Riverside Centre for Research and Technology (RCRT) is a proposed 110-acre technology park. Located along Jefferson Street and Reserve Avenue, this area has been designated as a redevelopment area. The Roanoke Redevelopment and Housing Authority has purchased most of the acreage in the area for the initial site of the Carilion Biomedical Institute (CBI). Carilion plans a 100,000-square foot, $10 million facility, to provide 15,000 square feet of flexible office space for emerging biotechnology firms. Located between Carilion Community Hospital and Carilion Roanoke Memorial Hospital, this area will also serve as a proving ground for research financed by CBI and conducted on the campuses of Virginia Tech and the University of Virginia.
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Based on the size of the developable property in the proposed redevelopment area, $175 million in capital expenditures is anticipated over the term of the project. This investment equates to $2,135,000 in real estate taxes, using the present tax rate. Approximately 2,500 employees could work in the area.
Within the area, a 1,000–space parking garage has been completed, while construction of a day care center and surgical center is underway. In October 2003, Carilion announced plans for a three-year, $105 million construction project. This new project will expand Carilion Roanoke Memorial Hospital with a five-floor addition to the current tower and a five-floor expansion outward. In addition, Carilion Community Hospital will close as an inpatient facility, but will become the site for Jefferson College of Health Sciences, allowing for expansion of the college from 650 to 1,200 students.
Roanoke Centre for Industry and Technology
The Roanoke Centre for Industry and Technology (RCIT) was initially a 300-acre, City–owned industrial complex located just minutes from Interstates 581 and 81. This industrial park was acquired, developed and marketed by the City. Eight sites in the original park have been utilized, leaving approximately 50 acres for additional development. Recognizing the economic potential of site availability, the City purchased an additional 140 acres in 1990. The additional land has been used for the expansion of the park, enabling the City to continue its excellent record of attracting top corporations, enhancing the tax base and creating jobs for its citizens. Site improvements continue with the grading of the last site in the 140–acre addition and extension of water and sewer lines and Blue Hills Drive. This expenditure of over $2 million will result in the City now having six ready–to–go sites of sizes ranging from seven to thirty–one acres. In September 1999, the City purchased an additional 56 acres for future prospects.
By the late 1990s, the revenue generated from the corporations located in the RCIT exceeded the cost incurred by the City for the original site acquisition and improvements to the park such as site preparation, utilities and extension of Blue Hills Drive. Present and future tax revenue will be used to continue this type of economic development. Current tax revenue exceeds $1.0 million annually.
The corporations located in RCIT employ in excess of 1,900 persons, have a combined investment in the Centre in excess of $139 million and occupy almost 1.8 million square feet of space. Corporations currently in the Centre include Crouse-Hinds, a division of Cooper Industries, R&K Engineering, Advance Auto, BellSouth Communications Systems, Elizabeth Arden, Orvis, InfoSeal, Virginia Utility Protection Services and Maple Leaf Bakery.
Heritage Point is a historic area located within RCIT. An 1800’s cabin has been restored, and a horse barn for the City’s Mounted Patrol is located here. Horses now have grazing areas, a shelter and pasture space.
Elizabeth Arden is currently constructing a 34,000-square foot expansion to its facility. Maple Leaf Bakery just completed a $12 million expansion and announced another $12 million expansion to its facility in 2003. In addition, a site was purchased by Semco Manufacturing, Inc in November 2003 and plans to construct a 60,000- square foot building, initially, with subsequent expansion to 100,000 square feet. This will represent a $4 million investment, adding 56 new employees by 2006.
Deanwood Industrial Park
Roanoke also developed the Deanwood Industrial Park, a site of 13 acres, located one-quarter of a mile from Interstate 581. Foot Levelers, Abal Material Handling, Azimuth, Inc. and Century Business Center constructed new facilities there. To meet the demand for industrial land in the Deanwood area, Deanwood Extension, a ten-acre tract of land with rail service available, was later developed in 1990. This area now houses Marco Supply Company, Quality Coffee and Mountain Spring Water, Magnets USA, HAMCO, VBS and Moody Polaris.
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Downtown Development
Current and proposed projects in the Central Business District represent an investment of almost $98 million.
In February 2003, downtown Roanoke was recognized by Southern Business & Development Magazine as one of the best downtowns in the South. The recognition reads, in part, Roanoke has “…the right balance. It is a great place to visit and a great place to live. Long a hub for commerce, business and entertainment, the 65-block area is well on its way to becoming a 24-hour downtown where you’ll find something to do at anytime.”
Between July 2000 and May 2002, seventeen new businesses located downtown adding 95 to the net count of downtown employees. Approximately $7.2 million in private and $340,000 million in public capital were invested in that time period.
One of the most significant developments in the downtown area was the Higher Education Center, across from the Hotel Roanoke and Conference Center which opened in September 2000. This $19 million project houses 16 agencies, private and public colleges and universities, including Hollins University, Virginia Polytechnic Institute and State University (Virginia Tech), Roanoke College and Radford University. Guided by community needs and interests, input from business and civic leaders and the experience of member institutions, programs are developed to bring a rich variety of educational resources. Distance learning technology plays a key role in the collaborative efforts characterizing many of the new educational offerings.
Eight Jefferson Place, is a downtown housing project currently being leased by the Roanoke Redevelopment and Housing Authority, in partnership with the Roanoke Foundation for Downtown, Inc. The former Norfolk Southern General Office Building South, donated by NS, has been turned into 87 apartments with rents ranging from $565 to $1,195. Total cost was $7 million.
In 2003, construction was completed on a $6.5 million parking garage to accommodate the Higher Education Center, the Eight Jefferson Place apartment complex and the Gainsboro development area.
A new free wireless Internet zone, or WiFi, was added to the offerings around the Market area in September 2003. Sponsored by the City of Roanoke, Downtown Roanoke, Inc. and the New Century Technology Council, this service will be expanded to Elmwood Park sometime in spring of 2004.
Symbolic of downtown development, the first new construction in the market area since 1917 was completed in October 2002. Adding to the mix of offerings in downtown was the renovation of the former Shenandoah Hotel. This building was refurbished through a partnership with Center in the Square, Mill Mountain Theater, the Commonwealth of Virginia and the City at a cost of $4.5 million. Housing an actors’ dormitory and educational facility, actors appearing in productions at Mill Mountain Theatre will live here while performing. Children from area schools will benefit from the educational offerings as well. The building is home to an expanded Twists and Turns.
Center in the Square purchased the former Norfolk and Western Railway passenger station and renovated the building for $6.8 million. The renovation was completed in November 2003 and now houses the Roanoke Valley Convention and Visitors Bureau’s visitor’s center and the $2.8 million museum of O. Winston Link Museum of railroad photographs and interactive railroad displays which opened January 11, 2004. The terminal will eventually serve as a stop for the proposed TransDominion Express, a passenger rail service.
Historic warehouse row is emerging as a center for Roanoke’s economic expansion. With more than 100,000 square feet of newly renovated high–tech space with fiber optic redundancy, flexible leases, wet lab capabilities, and a community of available techies, the area is being transformed into a cultivator for technology companies. Already, $1.7 million has been spent to renovate 26,000 square feet in the new e-town. In March 2003, the Vidette Group, a professional sales group working for a variety of companies, moved into e-town. Employing 30, the company invested $2.5 million. The Warehouse Row Business Center opened in December 2003 after a
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$2.7 million renovation. Already, Luna iMonitoriong, Xcellos and Jones, Glenn & Robinson have moved into the space.
Colonial Green will combine the city-owned 29 acres along Colonial Avenue with a developer to build 63 townhouses, 28 single family homes, 90 condominiums, and 40 live/work spaces, all ranging in price from $200- 275,000.
The Roanoke Times, the area’s daily newspaper, completed its $31 million expansion – a 47,000-square foot addition in October 2003. Their new linear press, a Heidelberg Mainstream 80, is the first of its kind in the United States. The 75–feet high building, with a glass-and-brick front, allows passers by to view the printing process.
The City pledged $4 million toward the construction of a new Art Museum of Western Virginia. This structure will be built on land donated by the City and will house an IMAX theater. Total cost is estimated at $40 million.
The Shaftman Performance Hall at the Jefferson Center provides performance opportunities for various cultural organizations such as the Roanoke Symphony, Roanoke Ballet Theater and Opera Roanoke.
Roanoke’s central YMCA has begun its $6.5 million expansion. The new 40,000-square foot facility will house an expanded aerobics room, elevated track, teen room and indoor aquatic complex. The City has pledged $2 million over a ten–year period, beginning with a $200,000 contribution in fiscal year 2002.
The City has committed $500,000 over five years toward the $5 million cost of renovating the Dumas Center for Artistic & Cultural Development. A new third floor will be added to the present building to create a home for Youth on the Yard Players, a theater based program for youth 10 to 15 years of age of all races and economic backgrounds. Once completed, the building will also become the new and expanded home of the Harrison Museum of African American Culture.
Transportation Improvements
All of Salem and parts of Campbell Avenues have been made into two–way streets. A task force composed of merchants, government representatives and others recommended this change to make downtown travel easier for tourists.
The Williamson Road Corridor Phase I Improvement Project, a revitalization effort, is complete at a cost of $340,000. Street resurfacing, sidewalks and landscaping were provided between Orange Avenue and Wayne Street. Construction of planted islands and turn lanes from Angell Avenue to Hershberger Road on Williamson Road will improve traffic flow.
The greenway from downtown to the new Riverside Centre for Research and Technology and onto Mill Mountain was completed and dedicated in September 2003. This greenway provides a mall from the Market area through an older industrial section to the new Riverside Center for Research and Technology, past some of the older and larger homes in the valley, all the way up Mill Mountain to the star.
Corporate Relocations
The following companies have established operations in Roanoke:
Cat Communications has purchased a building in the Roanoke Centre for Industry and Technology.
The Vidette Group and Luna iMonitoring are now operational in the new e-town.
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Existing Business — Retention and Expansion
Carilion Health System announced several projects over the course of this year. In addition to the renovations at Carilion Roanoke Memorial Hospital and Carilion Community Hospital mentioned previously, a new laundry, warehouse and food service facility will be constructed along Franklin Road. Carilion has also constructed and opened a clinic built along Colonial Avenue on land purchased from the City.
In July 2003, Maple Leaf Bakery started construction on a $12 million expansion to its present facility. Seventy additional employees will be hired.
Foot Levelers completed construction that doubled the size of its building in March 2002, spending approximately $3 million on a 30,000-square foot addition, to accommodate its new footwear line.
Virginia Trane completed its new distribution center in the private Highland Business Park near the airport in November 2002.
ProVox Technologies is in the process of doubling its workforce in downtown after receiving venture capital investments totaling $10.1 million in January 2003.
Blue Ridge Behavioral Healthcare, is renovating the former Burrell hospital and nursing home, a bankrupt property, and returning it to its original condition. This $6 million investment will create a hub for outpatient mental health services. The building permit was issued in November 2003.
Virtual IT, a technology company, invested $302,000 in moving to downtown.
The Roanoke Valley Regional SPCA is nearing completion of a new $5 million shelter and regional animal control facility. The new facilities will be called the Roanoke Valley SPCA Adoption and Education Center and the Roanoke Valley Regional Center for Animal Control and Protection. The new facilities will spread over 9,000 square feet with separate areas for cats, dogs, kittens, and puppies.
SoftSolutions, a software developer and a graduate of the New Century Venture Center small business incubator, moved into a 1925–era home with 16 employees.
The Rescue Mission of Roanoke has begun construction of its $7 million, 30,000-square foot Women’s and Children’s Center. There will be 48 beds in the family shelter and space for another 10 women in the transient program.
WDBJ–7 Television completed its state–of–the–art studio complex near the airport with a total investment of $5 million in 2002. This station now has digital broadcasting in addition to its regular features.
Elizabeth Arden started construction in November 2003 on a 34,000-square foot addition, adding 30 jobs.
Dixie Building Products spent $500,000 in October 2003 to move its operation to an upgraded building, doubling its size.
Atlantic Credit and Finance moved into a new, larger building on Orange Avenue in June 2003 after investing $8.5 million. Plans call for an additional 225 jobs at this site.
Major Shopping Malls and Retail Areas
Valley View Mall, with nearly 900,000 square feet of leasable space and over 150 retail stores, has continually generated in excess of $3.75 million in local tax revenue annually. Dick’s Sporting Goods opened a store here in fall 2003.
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Valley View Crossing, an extension of Valley View made possible by the new interchange off I–581, has seen rapid growth. Valley View Grande opened a new $10 million movie theater complex in 2000 and IHOP, Gateway, Best Buy and Target have all located in this area.
Towne Square Shopping Center, near Valley View, has anchors such as Sam’s Wholesale, Comfort Rest, and Fashion Bug. Great Additions, Ginger’s Jewelry, a Super Kroger grocery store and Lowe’s are also located there. The former Phar-Mor space is now occupied by Bed, Bath & Beyond as well as Marshall’s Department Store.
Home Depot occupies 108,000-square foot retail store near Valley View which employs 135.
Walgreens is now located on Williamson Road after a more than $3 million investment.
The strip mall on Hershberger near Valley View, is now home to Burlington Coat Factory and a larger Big Lots. In addition, two hotels – a 135-room Courtyard by Marriott and a 76-unit MainStay Suites – have opened in the area.
These retail areas, all in the vicinity of Valley View Mall, have created a “retail power center” for shoppers. They represent a combined investment in excess of $200 million. As a result of this retail power center, revitalized downtown, and additional strip malls developed in the 80s, Roanoke saw its retail sales increase by 47.6% from 1991 to 2001. Sales and Marketing Management magazine’s 2002 Survey of Buying Power placed Roanoke as 38th in the nation in per household retail sales.
TAX BASE DATA
The following data are presented to illustrate the trends and characteristics of the value of taxable property in Roanoke, property tax rates, tax collection experience, the ten largest holders of real property and taxable retail sales in the City during recent years.
Assessed Value of All Taxable Property
Public Total Total Real Personal Service Assessed Estimated Actual Year Property Property Corporations Value Value
1994 ...... $2,955,747,648 $473,846,551 $253,505,782 $3,683,099,981 $4,025,299,606 1995 ...... 3,030,908,552 541,915,101 257,393,454 3,830,217,107 4,218,199,122 1996 ...... 3,098,947,215 601,120,232 274,170,157 3,974,237,604 4,389,110,963 1997 ...... 3,242,372,927 630,035,420 266,770,541 4,139,178,888 4,580,521,097 1998 ...... 3,363,258,137 634,338,609 262,233,463 4,259,830,209 4,696,815,246 1999 ...... 3,569,735,816 664,808,637 277,115,700 4,511,660,153 4,973,182,727 2000 ...... 3,710,187,437 715,763,594 304,500,512 4,730,451,543 5,223,991,367 2001 ...... 3,843,131,277 737,575,710 339,256,291 4,919,963,278 5,432,186,896 2002 ...... 4,053,218,187 688,540,754 331,442,235 5,073,201,176 5,546,736,293 2003 ...... 4,251,342,652 685,231,130 320,712,924 5,257,286,706 5,719,526,388
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Property Tax Rates (Per $100 Assessed Value)
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Real Property...... $1.241 $1.23 $1.23 $1.23 $1.2252 $1.22 $1.2153 $1.21 $1.21 $1.21 Personal Property...... 3.45 3.45 3.45 3.45 3.45 3.45 3.45 3.45 3.45 3.45 Public Service Corporations ...... 1.241 1.23 1.23 1.23 1.2252 1.22 1.2153 1.21 1.21 1.21
______1 The real estate tax rate was $1.25 per $100 of assessed value from July 1, 1993 to December 31, 1993. Effective January 1, 1994, the rate became $1.23. 2 The real estate tax rate was $1.23 per $100 of assessed value from July 1, 1997 to December 31, 1997. Effective January 1, 1998, the rate became $1.22. 3 The real estate tax rate was $[1.22] per $100 from July 1, 1999 to December 31, 1999. Effective January 1, 2000, the rate became $1.21.
General Property Tax Levies and Collections Total Collection of % of Current & Current & Delinquent Current % of Delinquent Delinquent Collected to Year Total Levy Collections Levy Collections Taxes Tax Levy
1994...... $56,144,978 $54,226,011 96.58% $1,895,518 $56,121,529 99.96% 1995...... 59,347,893 56,691,653 95.52 1,476,684 58,168,337 98.01 1996...... 62,745,572 59,566,959 94.93 1,625,306 61,192,265 97.52 1997...... 66,282,390 62,066,495 93.64 2,020,693 64,087,188 96.69 1998...... 66,827,109 63,697,526 95.32 1,975,645 65,673,171 98.27 1999...... 70,159,067 67,311,751 95.94 2,312,122 69,623,873 99.24 2000...... 73,493,399 70,188,175 95.50 2,288,511 72,476,686 98.62 2001...... 76,063,428 72,776,631 95.68 2,762,725 75,539,355 99.31 2002...... 76,830,266 74,888,488 97.47 2,795,510 77,683,998 101.11* 2003...... 78,984,813 76,880,908 97.34 3,012,105 79,893,013 101.15*
______*Collections exceeded levies due to increased collections in the current year of prior year levied amounts.
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Ten Largest Taxpayers
The following data shows the assessed value of the real and personal property of the ten largest holders of real and personal property in the City for the fiscal year ended June 30, 2003. Percentage of 2003 Assessed Total Assessed Taxpayer Description Valuation Valuation
Verizon...... Communications $79,437,253 1.51% American Electric Power ...... Public Utility 71,301,361 1.36 Norfolk Southern Railway...... Transportation 69,094,970 1.32 Hersh 1999 Ltd Partnership...... Shopping Mall 49,747,070 0.95 Spectacle Lens...... Eyecare Professionals 29,081,589 0.55 Faison Roanoke Office...... Office Building 26,563,400 0.51 Roanoke Gas Company...... Public Utility 23,453,924 0.45 Hotel Roanoke ...... Hotel 20,662,713 0.39 Roanoke Electric Steel ...... Primary Metals 20,606,223 0.39 IHC (Wyndham)...... Hotel 18,100,500 0.34 Total ...... $408,049,003 7.77% ______Source: City of Roanoke, Commissioner of Revenue.
Taxable Retail Sales
Calendar Year Total Retail Sales
1993 ...... $1,211,788,231 1994 ...... 1,301,510,177 1995 ...... 1,356,357,643 1996 ...... 1,399,471,748 1997 ...... 1,430,719,230 1998 ...... 1,485,135,075 1999 ...... 1,563,514,749 2000 ...... 1,595,600,205 2001 ...... 1,578,043,491 2002 ...... 1,588,424,788 2003 through June ………………………………... 753,351,153 ______Source: State Department of Taxation. Notes: Data exclude prescription drug sales.
DEBT ADMINISTRATION
Pursuant to the Constitution of Virginia and the Virginia Public Finance Act of 1991 (Chapter 26 of Title 15.2, Code of Virginia, 1950 (the “Act”), a city in Virginia is authorized to issue general obligation bonds secured by a pledge of its full faith and credit. In addition to the authority to issue general obligation bonds pursuant to the Act, the City is authorized to issue bonds under its Charter provided such issuance is approved at a referendum of voters in the City. In either case, for the payment of such bonds, the governing body of the City is required to levy, if necessary, an ad valorem tax on all property in the City subject to local taxation. The issuance by cities in Virginia
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of bonds or other interest bearing obligations is subject to a limitation of 10% of the assessed value of real property in the city subject to taxation as shown by the last preceding assessment for taxes. In determining the limitation, certain classes of indebtedness may be excluded, including revenue anticipation notes maturing in one year or less, general obligation bonds payable from a specific revenue producing undertaking and revenue bonds.
In September 1999, City Council adopted the City’s original Debt Policy. On April 7, 2003, City Council adopted a revised Debt Policy which includes several enhancements and revisions. Included in this policy are the following guidelines: Net debt will not exceed 5% of assessed value of real estate, non-proprietary general obligation debt service shall not exceed 10% of General Fund expenditures, and that tax-supported debt will be structured in a manner that not less than 50% of the aggregate outstanding tax-supported debt will be retired within ten years. The City monitors these ratios to ensure ongoing compliance with the Debt Policy. Furthermore, the annual budget and financial planning sessions held between City Council and the administration provides a forum for discussion of the City’s long term capital financing plans.
Including the Bonds described herein, the City will have outstanding $215,788,601 of general obligation bonds, Virginia Public School Authority (VPSA) bonds, Qualified Zone Academy Bonds (QZAB), literary loans, and capital leases as of February 1, 2004, as follows:
Public Improvements...... $108,839,245 School Projects ...... 59,923,334 Water Utilities...... 20,565,000 Water Pollution Control Utilities...... 15,080,000 Parking Garages...... 6,486,945 Civic Facilities...... 2,825,000 Department of Technology Fund Capital Lease ...... 0 Fleet Management Fund Capital Lease...... 1,289,077 Total...... $215,008,601
The public improvement and certain school indebtedness shown above is provided from the General Fund of the City. Water, Water Pollution Control, Civic Center and Parking bonds are paid from the Enterprise Funds of the City. If, however, monies in any of the Enterprise Funds should not be sufficient for such purpose, City Council is obligated to make such payment from the General Fund or from any other available monies.
The City has no outstanding short-term bond anticipation notes or revenue anticipation notes.
The City’s legal debt margin at June 30, 2003 was $228,258,345 as computed below:
Assessed Value of Real Estate, 2003...... $4,263,777,024 Legal Debt Limit, 10% of $4,093,537,567 ...... 426,377,702 Total Bonded Debt ...... $228,050,952 Other Long-Term Debt ...... 21,879,764 Less: Available in Debt Service Fund ...... (14,436,613) Enterprise Fund Supported Debt ...... (44,517,751) Section 108 Loan...... (4,105,000) Compensated Absences Payable — Primary Government...... (6,050,244) Compensated Absences Payable — School Fund Component Unit ... (3,524,314) Claims Payable - Primary Government ...... (8,200,206) 169,096,588 Legal Debt Margin...... $ 257,281,114
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Bond Amortization Schedules Total principal and interest payments, including debt service on the Bonds and excluding debt service on the Refunded Bonds, to retire all outstanding general obligation bonded indebtedness of the City are shown in the following tables: General Obligation Tax-Supported Indebtedness Outstanding Prior to Current Issue (Net of Debt Service on Refunded Bonds) Current Issue Fiscal Year Principal Interest Subtotal Principal Interest Subtotal Total
2004 $ 50,000 $ 1,260,364 $ 1,310,364 $ 1,310,364 2005 11,901,961 7,268,167 19,170,128 $ 65,000 $ 209,060 $ 274,060 19,444,188 2006 12,241,922 6,421,102 18,663,024 110,000 226,375 336,375 18,999,399 2007 12,391,269 5,876,814 18,268,083 110,000 224,175 334,175 18,602,258 2008 12,076,595 5,408,856 17,485,451 765,000 215,425 980,425 18,465,876 2009 12,318,146 4,928,630 17,246,776 745,000 199,393 944,393 18,191,169 2010 12,553,271 4,427,675 16,980,946 730,000 181,887 911,887 17,892,833 2011 11,704,023 3,936,975 15,640,998 715,000 162,931 877,931 16,518,929 2012 11,879,382 3,459,526 15,338,908 705,000 142,525 847,525 16,186,433 2013 12,047,282 2,972,553 15,019,835 690,000 121,600 811,600 15,831,435 2014 11,483,203 2,451,262 13,934,465 680,000 100,625 780,625 14,715,090 2015 8,059,392 1,979,295 10,038,687 670,000 79,112 749,112 10,787,799 2016 6,639,645 1,623,026 8,262,671 660,000 57,087 717,087 8,979,758 2017 6,423,219 1,303,870 7,727,089 650,000 34,575 684,575 8,411,664 2018 6,250,835 990,906 7,241,741 640,000 11,600 651,600 7,893,341 2019 6,009,829 695,885 6,705,714 6,705,714 2020 5,809,880 424,473 6,234,353 6,234,353 2021 2,906,634 214,542 3,121,176 3,121,176 2022 2,581,093 76,139 2,657,232 2,657,232 2023 75,000 8,300 83,300 83,300 2024 85,000 5,100 90,100 90,100 2025 85,000 1,700 86,700 86,700 Totals $165,572,581 $55,735,160 $221,307,741 $ 7,935,000 $1,966,372 $9,901,372 $231,209,113
Water, Water Pollution Control, Civic Center and Transportation Enterprise Fund General Obligation Indebtedness1 Fiscal Year Principal Interest Total
2004 - $ 188,173 $ 188,173 2005 $ 2,790,389 1,881,625 4,672,014 2006 2,887,082 1,734,630 4,621,712 2007 2,939,113 1,608,770 4,547,883 2008 2,991,144 1,483,252 4,474,396 2009 3,048,514 1,350,235 4,398,749 2010 3,115,883 1,213,413 4,329,296 2011 3,183,591 1,070,114 4,253,705 2012 3,266,229 918,341 4,184,570 2013 2,655,000 779,974 3,434,974 2014 2,700,000 655,815 3,355,815 2015 1,295,000 565,653 1,860,653 2016 1,370,000 515,153 1,885,153 2017 1,435,000 466,895 1,901,895 2018 1,500,000 413,575 1,913,575 2019 1,570,000 355,731 1,925,731 2020 1,640,000 294,763 1,934,763 2021 1,725,000 228,938 1,953,938 2022 1,805,000 157,919 1,962,919 2023 975,000 102,100 1,077,100 2024 1,010,000 62,400 1,072,400 2025 1,055,000 21,100 1,076,100 Totals $44,956,945 $16,068,567 $61,025,512 ______1 Includes debt service on bonds accounted for in the City’s water, water pollution control, civic center and transportation enterprise funds. The revenues derived from the operation of the City’s water and sewer systems have historically been sufficient to pay such debt service.
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Debt Ratios
The following data is presented to show trends in the relationship of the net general obligation bonded indebtedness of the City to its estimated population and to the assessed value of taxable property in the City. Debt to be repaid by Water, Water Pollution Control, Civic Facilities and Parking Enterprise Funds is excluded.
Ratio of Net General Obligation Bonded Debt to the Assessed Value of Taxable Property and Net Bonded Debt Per Capita Last Ten Fiscal Years
Net Amount Bonded Debt Payable Available Debt as a Net Total from In Debt Net Percentage of Bonded Fiscal Assessed Gross Bonded Enterprise Service Bonded Assessed Debt Year Population Value Debt Funds Fund Debt Value Per Capita
1994 96,765 $3,683,099,981 $125,001,887 $52,745,000 $7,785,724 $64,471,163 1.75% $ 666.27 1995 96,121 3,830,217,107 119,393,128 50,650,000 8,092,935 60,650,193 1.58 630.98 1996 95,479 3,974,237,604 149,450,742 48,695,000 8,797,456 91,958,286 2.31 963.13 1997 94,931 4,139,178,888 146,159,015 46,725,000 9,148,331 90,285,684 2.18 951.07 1998 93,797 4,259,830,209 157,555,231 44,806,346 11,336,503 101,412,382 2.38 1,081.19 1999 93,357 4,511,660,153 157,175,592 43,175,028 11,498,954 102,501,610 2.27 1,097.95 2000 94,911 4,730,451,543 193,100,761 41,118,710 13,134,073 138,847,978 2.94 1,462.93 2001 94,925 4,919,963,278 191,284,376 39,027,391 13,130,315 139,126,670 2.83 1,465.65 2002 94,500 5,113,520,556 242,386,234 47,001,072 14,289,750 181,095,412 3.54 1,916.35 2003 94,600 5,253,344,267 228,050,952 44,517,751 14,436,613 169,096,588 3.22 1,787.49
CAPITAL IMPROVEMENTS PROGRAM - FUTURE BORROWING REQUIREMENTS
Prior to adoption of the annual capital and operating budgets, the City Manager presents a capital improvement program (“CIP”) to City Council. In development of this plan, particular attention is focused upon the first year of the plan since it subsequently will be considered as the City Manager’s capital budget request for the ensuing fiscal year. The CIP presents each project in detail and provides extensive summary tables which assess the impact of the capital improvement program on the City debt position and borrowing policies.
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The current CIP covers the fiscal years 2004 through 2008, and provides for the following proposed expenditures and projected sources of funding as presented in the following tables:
Capital Improvement Program FY 2004-2008 Summary of Estimated Expenditures
Fiscal Year Ending June 30 Total Project Classification 2004 2005 2006 2007 2008 Cost
Public Buildings...... $2,310,023 $14,692,280 - $4,000,000 - $21,002,303 Economic Development ...... 8,669,289 5,377,500 $8,950,000 9,105,000 - 32,101,789 Public Schools...... 2,250,000 23,040,000 23,475,000 19,200,000 $19,200,000 87,165,000 Parks...... 1,430,819 8,238,118 709,309 709,309 709,309 11,796,863 Stormwater Management ...... 12,326,154 22,617,292 11,617,292 11,617,292 11,617,292 69,795,323 Streets, Sidewalks and Bridges...... 9,517,957 6,756,000 6,684,000 6,698,000 6,695,000 36,350,956 Water Pollution Control ...... 4,211,459 48,311,165 311,165 311,165 - 53,144,953 Market Building ...... 423,201 ----423,201 Civic Facilities ...... 32,895,865 - - - - 32,895,865 $74,034,767 $129,032,355 $51,746,766 $51,640,766 $38,221,601 $344,676,253
Sources of Funds: FY 2004 - 2008
Existing Capital Funds $4,175,000 Sale of Property 4,490,000 State Literary Fund Loans/VPSA Bonds 47,280,000 Intergovernmental Funding 97,303,550 Capital Improvement Reserve 743,191 General Revenue 16,863,840 Interest Earnings 5,091,532 Third Party Funding 295,555 Future General Obligation Bond Issue 139,401,979 Retained Earnings 28,146,606 Existing Capital Funds - Schools 885,000 $344,676,253
EMPLOYEE RETIREMENT PLANS
The City of Roanoke Pension Plan (Pension Plan) covers all City employees except for professional School Board employees and employees of certain constitutional officers who participate in the Virginia Retirement System (VRS). The Pension Plan is a defined benefit plan established by City Council and is included in the City’s financial statements as the Pension Trust Fund. The Pension Plan consists of the Employee’s Retirement System (ERS) for employees hired before July 1, 1984 and the Employee’s Supplement Retirement System (ESRS) for employees hired on or after July 1, 1984. City employees do not contribute to the Pension Plan. The City’s contribution rate is based on an actuarially determined amount. The Pension Plan received employer contributions of $3,653,019 in fiscal year 2002 and $3,970,354 in fiscal year 2003.
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Contribution rates for the most recent five years are as follows:
Year ended June 30, 1999...... 9.75% Year ended June 30, 2000...... 8.25 Year ended June 30, 2001...... 6.25 Year ended June 30, 2002...... 6.25 Year ended June 30, 2003...... 6.25
Retirement benefits for employees who are in the ERS are determined as a percentage of the highest twelve consecutive months of salary based on years of creditable service. Normal retirement age is age 60 or 30 years of service. The Pension Plan provides for early retirement after 20 years of service whereby employees receive a reduced retirement benefit.
Retirement benefits within the ESRS are determined as a percentage of the average of the highest 36 consecutive months of salary based on years of creditable service. For most employees, normal retirement age is age 50 with age and service equal to 80. Normal retirement age for firefighters and police officers is age 45 with age and service equal to 70. The system also provides for early retirement. Employees are vested after five years of creditable service.
At June 30, 2003, the latest valuation date, the actuarial value of net assets available for benefits of $312,377,881 exceeded the pension benefit obligation of $305,746,428 by $6,631,453. The market value of net assets as of the same date was $283,983,057. The Plan had fully funded its liability.
The Virginia Retirement System (VRS) is administered by the Commonwealth of Virginia. Professional School Board employees and Sheriff’s employees participate in VRS. Contribution rates, which are actuarially determined by the VRS, are intended to fund normal cost plus amortization of unfunded accrued liabilities over not more than a thirty year period. Employee contribution rates, which are paid by the employer, remain constant at five percent of covered payroll. The City assumes the employees’ share of these contributions. For the year ended June 30, 2003, the City contributed $452,828 on behalf of Sheriff’s employees, and the Schools contributed $5,093,347 on behalf of its employees, representing all required employer and employee contributions.
See Note 13 to general purpose financial statements included herein in Appendix C for more detailed information on the retirement systems as of the June 30, 2003 valuation date.
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APPENDIX C
APPENDIX D
[PROPOSED FORM OF OPINION OF BOND COUNSEL]
The Honorable Mayor and Council of the City of Roanoke, Virginia Roanoke, Virginia
Dear Mayor and Councilmembers:
CITY OF ROANOKE, VIRGINIA, GENERAL OBLIGATION PUBLIC IMPROVEMENT REFUNDING BONDS, SERIES 2004A, $7,935,000
At your request we have examined into the validity of an issue of Seven Million Nine Hundred Thirty-Five Thousand Dollars ($7,935,000) principal amount of General Obligation Public Improvement Refunding Bonds, Series 2004A (the “Bonds”), of the City of Roanoke, Virginia (the “City”). The Bonds are dated March 1, 2004; are issued in fully registered form in the denomination of $5,000 each or any integral multiple thereof; and are numbered from No. R-1 upwards in order of issuance. The Bonds mature on August 1 in each of the years and in the principal amounts set forth below, with the Bonds maturing in a particular year bearing interest from their date payable on August 1, 2004 and semiannually on each February 1 and August 1 thereafter at the rate per annum set forth opposite such year, to wit:
Year of Principal Interest Year of Principal Interest Maturity Amount Rate Maturity Amount Rate
2004 $ 65,000 2.00% 2011 $705,000 3.00% 2005 110,000 2.00 2012 690,000 3.00 2006 110,000 2.00 2013 680,000 3.125 2007 765,000 2.00 2014 670,000 3.25 2008 745,000 2.25 2015 660,000 3.375 2009 730,000 2.50 2016 650,000 3.50 2010 715,000 2.75 2017 640,000 3.625
The Bonds maturing on and after August 1, 2015 are subject to redemption at the option of the City prior to their stated maturities on or after August 1, 2014 upon the terms and conditions and at the prices stated therein.
The Bonds recite that they are issued under and pursuant to and in full compliance with the Constitution and statutes of the Commonwealth of Virginia, including Chapter 26 of Title 15.2 of the Code of Virginia, 1950 (the same being the Public Finance Act of 1991), the Charter of the City, and a resolution and other proceedings of the Council of the City duly adopted and taken under the Public Finance Act of 1991, for the purpose of providing funds to refund in advance of their stated maturities certain outstanding general obligation public improvement bonds of the City.
We have examined (i) the Constitution and statutes of the Commonwealth of Virginia, (ii) certified copies of the aforementioned resolution and other proceedings of the Council of the City in connection with the authorization, issuance, sale and delivery of the Bonds, (iii) such other papers, instruments, documents and
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proceedings as we have deemed to be necessary or advisable and (iv) an executed and authenticated Bond of such issue.
In our opinion, the Bonds have been duly authorized and issued in accordance with the Constitution and statutes of the Commonwealth of Virginia and the Charter of the City and constitute valid and legally binding obligations of the City, and the City Council of the City is authorized and required to levy and collect annually, at the same time and in the same manner as other taxes of the City are assessed, levied and collected, a tax upon all taxable property within the City, over and above all other taxes, authorized or limited by law and without limitation as to rate or amount, sufficient to pay when due the principal of and premium, if any, and interest on the Bonds to the extent other funds of the City are not lawfully available and appropriated for such purpose.
It is to be understood that the rights of the holders of the Bonds and the enforceability thereof may be subject to judicial discretion, to the exercise of the sovereign police powers of the Commonwealth of Virginia and the constitutional powers of the United States of America and to valid bankruptcy, insolvency, reorganization, moratorium and other laws affecting the relief of debtors.
In our opinion, under existing statutes and court decisions, interest on the Bonds (i) is excluded from gross income for federal income tax purposes pursuant to Section 103 of the Internal Revenue Code of 1986 (the “Code”) and (ii) is not treated as an item of tax preference for purposes of the alternative minimum tax imposed on individuals and corporations under the Code; such interest, however, is included in the adjusted current earnings of certain corporations for purposes of calculating the alternative minimum tax imposed on such corporations. In rendering our opinion, we have relied on certain representations, certificates of fact and statements of reasonable expectations made by the City in connection with the Bonds, and we have assumed compliance by the City with certain ongoing covenants to comply with applicable requirements of the Code to assure the exclusion of interest on the Bonds from gross income under Section 103 of the Code.
It is our opinion that, for any Bond having original issue discount (a “Discount Bond”), original issue discount that has accrued and is properly allocable to the owners of the Discount Bonds under Section 1288 of the Code is excludable from gross income for federal income tax purposes to the same extent as other interest on the Bonds.
It is also our opinion that, under the existing statutes of the Commonwealth of Virginia, interest on the Bonds is not includable in computing the Virginia income tax.
We express no opinion regarding other federal or Commonwealth of Virginia tax consequences arising with respect to the Bonds. We are rendering our opinion under existing statutes and court decisions as of the issue date of the Bonds, and we assume no obligation to update our opinion after the issue date of the Bonds to reflect any future action, fact or circumstance, or change in law or interpretation, or otherwise. We express no opinion on the effect of any action taken in reliance upon an opinion of other counsel on the exclusion from gross income for federal income tax purposes of interest on the Bonds.
Very truly yours,
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APPENDIX E
DESCRIPTION OF THE DEPOSITORY TRUST COMPANY AND THE BOOK-ENTRY SYSTEM
The description which follows of the procedures and recordkeeping with respect to beneficial ownership interests in the Bonds, payments of principal of and premium, if any, and interest on the Bonds to The Depository Trust Company (“DTC”), New York, New York, its nominee, Participants, defined below, or Beneficial Owners, defined below, confirmation and transfer of beneficial ownership interests in the Bonds and other related transactions by and among DTC, Participants and Beneficial Owners is based solely on information furnished by DTC.
DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered Bonds registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Bond will be issued in the aggregate principal amount of each maturity of the Bonds and will be deposited with DTC.
DTC, the world’s largest depository, is a limited-purpose 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 “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing 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 investments 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 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 U.S. and non-U.S. securities brokers and dealers, banks, trust companies and clearing companies 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 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 transaction, 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 will not 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 requested by an authorized representative of DTC. The deposit of 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
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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 from time to time.
Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue 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.
Neither DTC nor Cede & Co. (nor such 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 Issuer 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).
Principal, premium and interest payments on the Bonds 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 Issuer or the Registrar and Paying Agent 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 the accounts of customers in bearer form or registered in “street name”, and will be the responsibility of such Participant and not of DTC, the Issuer or the Registrar and Paying Agent, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, premium and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Issuer or the Registrar and Paying Agent, 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 securities depository with respect to the Bonds at any time by giving reasonable notice to the Issuer or to the Registrar and Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, Bond certificates are required to be printed and delivered.
The Issuer may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered.
The information in this Appendix E concerning DTC and DTC’s book-entry system has been obtained from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof.
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APPENDIX F
CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate (the “Certificate”), dated as of March 1, 2004, is executed and delivered in connection with the issuance by the City of Roanoke, Virginia (the “City”), of $7,935,000 principal amount of General Obligation Public Improvement Refunding Bonds, Series 2004A, dated March 1, 2004 (the “Bonds”), and pursuant to a resolution duly adopted by the Council of the City on January 20, 2004 (such resolution being referred to herein as the “Resolution”). Capitalized terms used in this Certificate shall have the respective meanings specified above or in Article I hereof. Pursuant to the Resolution, the City agrees as follows:
ARTICLE I
Definitions
SECTION 1.1. Definitions. The following terms used in this Certificate shall have the following respective meanings:
(1) “Annual Financial Information” means, collectively, (i) the financial information and operating data with respect to the City for each fiscal year of the type contained in Appendix A to the Official Statement under the headings “GENERAL FUND REVENUES AND EXPENDITURES”, “SUMMARY OF GENERAL FUND REVENUES AND EXPENDITURES”, “TAX BASE DATA” (including the tables “Assessed Value of All Taxable Property”, “Property Tax Rates (Per $100 Assessed Value)”, “General Property Tax Levies and Collections”, “Ten Largest Taxpayers” and “Taxable Retail Sales” therein), “DEBT ADMINISTRATION” (including the information under the subheadings “Bond Amortization Schedules” and “Debt Ratios” therein), “CAPITAL IMPROVEMENT PROGRAM - FUTURE BORROWING REQUIREMENTS”, “EMPLOYEE RETIREMENT PLANS” and information contained in Appendix C to the Official Statement and (ii) information regarding amendments to this Certificate required pursuant to Sections 4.2(c) and (d) of this Certificate. Annual Financial Information shall include Audited Financial Statements, if available, or Unaudited Financial Statements.
The descriptions contained in clause (1) above of financial information and operating data constituting Annual Financial Information are of general categories of financial information and operating data. Where such descriptions include information that no longer can be generated because the operations to which it related have been materially changed or discontinued, a statement to that effect shall be provided in lieu of such information.
(2) “Audited Financial Statements” means the annual financial statements, if any, of the City, audited by such auditor as shall then be required or permitted by State law and the Resolution. Audited Financial Statements shall be prepared in accordance with GAAP for governmental units as prescribed by GASB; provided, however, that the City may from time to time, if required by federal or State legal requirements, modify the basis upon which its financial statements are prepared. Notice of any such modification shall be provided to each NRMSIR and the SID, and shall include a reference to the specific federal or State law or regulation describing such accounting basis.
(3) “Counsel” means Hawkins Delafield & Wood LLP or other nationally recognized bond counsel or counsel expert in federal securities laws, in each case acceptable to the City.
(4) “GAAP” means generally accepted accounting principles as prescribed from time to time for governmental units by GASB, the Financial Accounting Standards Board, or any successor to the duties and responsibilities of either of them.
(5) “GASB” means the Governmental Accounting Standards Board, or any successor to the duties and responsibilities thereof.
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(6) “Material Event” means any of the following events with respect to the Bonds, whether relating to the City or otherwise, if material:
(a) principal and interest payment delinquencies;
(b) non-payment related defaults;
(c) unscheduled draws on debt service reserves reflecting financial difficulties;
(d) unscheduled draws on credit enhancements reflecting financial difficulties;
(e) substitution of credit or liquidity providers, or their failure to perform;
(f) adverse tax opinions or events affecting the tax-exempt status of the security;
(g) modifications to rights of security holders;
(h) bond calls (other than scheduled mandatory sinking fund redemptions);
(i) defeasances;
(j) release, substitution or sale of property securing repayment of the securities; and
(k) rating changes.
(7) “MSRB” means the Municipal Securities Rulemaking Board established pursuant to the provisions of Section 15B(b)(1) of the Securities Exchange Act of 1934.
(8) “NRMSIR” means, at any time, a then-existing nationally recognized municipal securities information repository, as recognized from time to time by the SEC for the purposes referred to in the Rule. The NRMSIRs as of the date of this Certificate are Bloomberg Municipal Repository, DPC Data Inc., FT Interactive Data and Standard & Poor’s Securities Evaluations, Inc. Filing information relating to such NRMSIRs is set forth in Exhibit A hereto.
(9) “Official Statement” means the “final official statement” as defined in paragraph (f)(3) of the Rule.
(10) “Rule” means Rule 15c2-12 promulgated by the SEC under the Securities and Exchange Act of 1934 as amended (17 CFR Part 240, §240.15c2-12), as in effect on the date of this Certificate, including any official interpretations thereof issued either before or after the effective date of this Certificate which are applicable to this Certificate.
(11) “SEC” means the United States Securities and Exchange Commission.
(12) “SID” means, at any time, a then-existing State information depository, if any, as operated or designated as such by or on behalf of the State for the purposes referred to in the Rule. As of the date of this Certificate, there is no SID established for the State.
(13) “State” means the Commonwealth of Virginia.
(14) “Unaudited Financial Statements” means the same as Audited Financial Statements, except the same shall not have been audited.
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(15) “Underwriters” means Morgan Keegan & Company, Inc., Davenport & Company LLC, and Legg Mason Wood Walker, Inc.
ARTICLE II
The Undertaking
SECTION 2.1. Purpose. This Certificate shall constitute a written undertaking for the benefit of the holders of the Bonds, and is being executed and delivered solely to assist the Underwriters in complying with paragraph (b)(5) of the Rule.
SECTION 2.2. Annual Financial Information. (a) The City shall provide Annual Financial Information for the City with respect to each fiscal year of the City, commencing with fiscal year beginning July 1, 2003, by no later than six months after the end of the respective fiscal year, to each NRMSIR and the SID.
(b) The City shall provide, in a timely manner, notice of any failure of the City to provide the Annual Financial Information by the date specified in subsection (a) above to each NRMSIR, to the MSRB and to the SID.
SECTION 2.3. Audited Financial Statements. If not provided as part of Annual Financial Information by the dates required by Section 2.2(a) hereof, the City shall provide Audited Financial Statements, when and if available, to each NRMSIR and the SID.
SECTION 2.4. Material Event Notices. (a) If a Material Event occurs, the City shall provide, in a timely manner, a notice of such Material Event to each NRMSIR, to the MSRB and to the SID.
(b) Any such notice of a legal defeasance of Bonds shall state whether the Bonds to be defeased have been defeased to maturity or to redemption and the timing of such maturity or redemption.
SECTION 2.5. Additional Disclosure Obligations. The City acknowledges and understands that other State and federal laws, including but not limited to the Securities Act of 1933 and SEC Rule 10b-5 promulgated under the Securities Exchange Act of 1934, may apply to the City, and that, under some circumstances compliance with this Certificate, without additional disclosures or other action, may not fully discharge all duties and obligations of the City under such laws.
SECTION 2.6. Additional Information. Nothing in this Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Certificate or any other means of communication, or including any other information in any Annual Financial Information or notice of a Material Event, in addition to that which is required by this Certificate. If the City chooses to include any information in any Annual Financial Information or notice of a Material Event in addition to that which is specifically required by this Certificate, the City shall have no obligation under this Certificate to update such information or include it in any future Annual Financial Information or notice of a Material Event hereunder.
SECTION 2.7. No Previous Non-Compliance. The City represents that since July 3, 1995, it has not failed to comply in any material respect with any previous undertaking in a written contract or agreement specified in paragraph (b)(5)(i) of the Rule.
ARTICLE III
Operating Rules
SECTION 3.1. Reference to Other Documents. It shall be sufficient for purposes of Section 2.2 hereof if the City provides Annual Financial Information by specific reference to documents (i) either (1) provided to each NRMSIR existing at the time of such reference and the SID or (2) filed with the SEC or (ii) if such a document is an Official Statement, available from the MSRB.
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SECTION 3.2. Submission of Information. Annual Financial Information may be provided in one document or multiple documents, and at one time or in part from time to time.
SECTION 3.3. Material Event Notices. Each notice of a Material Event shall be captioned “Notice of Material Event” and shall prominently state the title, date and CUSIP numbers of the Bonds.
SECTION 3.4. Transmission of Information and Notices. Unless otherwise required by law and, in the City’s sole determination, subject to technical and economic feasibility, the City shall employ such methods of information and notice transmission as shall be requested or recommended by the herein-designated recipients of the City’s information and notices.
SECTION 3.5. Fiscal Year. (a) The City’s current fiscal year is July 1 - June 30, and the City shall promptly notify (i) each NRMSIR, (ii) the MSRB and (iii) the SID of each change in its fiscal year.
(b) Annual Financial Information shall be provided at least annually notwithstanding any fiscal year longer than 12 calendar months.
ARTICLE IV
Termination, Amendment and Enforcement
SECTION 4.1. Effective Date; Termination. (a) This Agreement shall be effective upon the issuance of the Bonds.
(b) The City’s obligations under this Certificate shall terminate upon legal defeasance, prior redemption or payment in full of all of the Bonds.
(c) This Certificate or any provision hereof, shall be null and void in the event that the City (1) delivers an opinion of Counsel, addressed to the City, to the effect that those portions of the Rule which require this Certificate or such provision, as the case may be, do not or no longer apply to the Bonds, whether because such portions of the Rule are invalid, have been repealed, or otherwise, as shall be specified in such opinion and (2) delivers copies of such opinion to each NRMSIR and the SID.
SECTION 4.2. Amendment. (a) This Certificate may be amended, by written certificate of the City Manager and the Director of Finance of the City, without the consent of the holders of the Bonds, if all of the following conditions are satisfied: (1) such amendment is made in connection with a change in circumstances that arises from a change in legal (including regulatory) requirements, a change in law (including rules or regulations) or in interpretations thereof, or a change in the identity, nature or status of the City or the type of business conducted thereby, (2) this Certificate as so amended would have complied with the requirements of the Rule as of the date of this Certificate, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances, (3) the City shall have received an opinion of Counsel addressed to the City, to the same effect as set forth in clause (2) above and further to the effect that the amendment does not materially impair the interests of the holders of the Bonds and (4) the City shall have delivered copies of such opinion and amendment to each NRMSIR and the SID.
(b) This Certificate may be amended, without the consent of the holders of the Bonds, if all of the following conditions are satisfied: (1) an amendment to the Rule is adopted, or a new or modified official interpretation of the Rule is issued, after the effective date hereof which is applicable to this Certificate, (2) the City shall have received an opinion of Counsel to the effect that performance by the City under this Certificate as so amended will not result in a violation of the Rule and (3) the City shall have delivered copies of such opinion and amendment to each NRMSIR and the SID.
(c) To the extent any amendment to this Certificate results in a change in the types of financial information or operating data provided pursuant to this Certificate, the first Annual Financial Information
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provided thereafter shall include a narrative explanation of the reasons for the amendment and the impact of the change in the type of financial information or operating data being provided.
(d) If an amendment is made pursuant to Section 4.2(a) hereof to the accounting principles to be followed by the City in preparing financial statements, the Annual Financial Information for the fiscal year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Such comparison shall include a qualitative and, to the extent reasonably feasible, quantitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information.
SECTION 4.3. Benefit; Third-Party Beneficiaries; Enforcement. (a) The provisions of this Certificate shall constitute a contract with and inure solely to the benefit of the holders from time to time of the Bonds, except that beneficial owners of Bonds shall be third-party beneficiaries of this Certificate. The provisions of this Certificate shall create no rights in any person or entity except as provided in this subsection (a) or subsection (b) of this Section 4.3.
(b) The obligations of the City to comply with the provisions of this Certificate shall be enforceable by the holders of the Bonds, including beneficial owners thereof. The rights of the holders of Bonds to enforce the provisions of this Certificate shall be limited solely to a right, by action in mandamus or for specific performance, to compel performance of the City’s obligations under this Certificate and the Resolution. In consideration of the third-party beneficiary status of beneficial owners of Bonds pursuant to subsection (a) of this Section 4.3, beneficial owners shall be deemed to be holders of Bonds for purposes of this subsection (b).
(c) Any failure by the City to perform in accordance with this Certificate shall not constitute a default under the Resolution and any rights and remedies provided by the Resolution upon the occurrence of a default shall not apply to any such failure.
(d) This Certificate shall be construed and interpreted in accordance with the laws of the State, and any suits and actions arising out of this Certificate shall be instituted in a court of competent jurisdiction in the State; provided, however, that to the extent this Certificate addresses matters of federal securities laws, including the Rule, this Certificate shall be construed in accordance with such federal securities laws and official interpretations thereof.
IN WITNESS WHEREOF, the undersigned have executed this Certificate as of the date first above written.
CITY OF ROANOKE, VIRGINIA
By: Title: City Manager
By: Title: Director of Finance
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EXHIBIT A to Continuing Disclosure Certificate
Filing information relating to the Nationally Recognized Municipal Securities Information Repositories (“NRMSIRs”) approved by the Securities and Exchange Commission (subject to change):
Bloomberg Municipal Repository FT Interactive Data 100 Business Park Drive Attention: NRMSIR Skillman, New Jersey 08558 100 William Street Telephone: (609) 279-3225 New York, New York 10038 Facsimile: (609) 279-5962 Telephone: (212) 771-6999 E-mail: [email protected] Facsimile: (212) 771-7390 (Secondary Market Information) (212) 771-7391 (Primary Market Information) E-mail: [email protected]
DPC Data Inc. Standard & Poor’s Securities Evaluations, Inc. One Executive Drive 55 Water Street, 45th floor Fort Lee, New Jersey 07024 New York, New York 10041 Telephone: (201) 346-0701 Telephone: (212) 438-4595 Facsimile: (201) 947-0107 Facsimile: (212) 438-3975 E-mail: [email protected] E-mail: [email protected]
An updated list of NRMSIRs may be found at the Securities and Exchange Commission website (www.sec.gov).
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