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C <br />• amount not to exceed $5,000,000 to finance the cost of improve- <br />ments to its water and sewer system; and <br />WHEREAS, the Authority was created by concurrent resolu- <br />tions adopted by the City of Charlottesville, Virginia (the <br />"City"), and the Board of County Supervisors of Albemarle County, <br />Virginia (the "County"), to serve the needs of the citizens of <br />the City and the County; and <br />WHEREAS, the Authority has requested the City Council of <br />the City and the Board of County Supervisors of the County to <br />join with the Authority to "designate" the Bonds as "qualified <br />tax-exempt obligations" for the purpose of Section 265(b)(3) of <br />the Internal Revenue Code of 1986, as amended (the "Code"), to <br />• improve the marketability of the Bonds and reduce the Authority's <br />cost of financing; and <br />• <br />WHEREAS, the Code generally requires all issuers of <br />tax-exempt bonds to rebate to the United States any arbitrage <br />profit derived from the investment of bond proceeds; and <br />WHEREAS, Section 148(f)(4)(C) of the Code provides an ex- <br />ception to such rebate requirement for governmental units with <br />general taxing powers, such as the City, that expect to issue not <br />more than $5,000,000 in tax-exempt bonds in any calendar year <br />(the "Small -Issuer Rebate Exception"); and <br />WHEREAS, the Code authorizes the City to allocate a por- <br />tion of its $5,000,000 annual limit to its "subordinate <br />entities," such as the Authority; and <br />-2- <br />