I am pleased to present the annual report of the Virginia Resources Authority ("VRA", "Authority"). This report and its accompanying Comprehensive Annual Financial Report ("CAFR") for the year ending June 30, 2017, is submitted pursuant to the requirements set forth in § 62.1-222 of the Code of Virginia, as amended.

VRA's attached 2017 CAFR sets forth the complete operating and financial statements for the Authority during the fiscal year. As required, an independent certified public accountant has performed an audit of the books and accounts of the Authority and has issued an unqualified opinion with no audit findings or management letter. The CAFR also includes supplemental information relating to the Water Facilities (§ 62.1-227), Water Supply (§ 62.1-236), Dam Safety (§ 10. 1-603.23), and the Airports (§ 5.1-30.9) revolving loan funds. In addition, the attached CAFR includes complete financial statements for VRA's signature Virginia Pooled Financing Program.

FY17 provided the VRA Board and staff with new challenges and new opportunities to support its state agency partners and Virginia communities with sound and innovative financing programs for infrastructure improvements. In early February 2017, VRA's long-time Board member and Board chairman, William G. O'Brien, died after a brief illness. Mr. O'Brien, who had retired after 26 years as County Administrator for Rockingham County and who later served as interim county administrator and interim town manager for several other Virginia counties and towns, was very well connected with Virginia local governments and was a tremendous resource to VRA. Mr. O'Brien was replaced on the Board with VRA's first active elected local government official, Martinsville City Councilwoman Jennifer Bowles. Ms. Bowles' appointment provided the VRA Board with the added perspective of an elected official committed to meeting the infrastructure needs of citizens and rate payers.

Also during FYI 7, the VRA Board and staff worked hard to address the financing needs and debt service requirements of borrowers experiencing financial challenges. Insuring that these borrowers met the terms of their financing agreements with VRA prompted the VRA Board and staff to develop a new financing program that provides financing for infrastructure projects to distressed communities and that also insure VRA's ability to maintain its own credit standing and not jeopardize the State's moral obligation pledge. This was accomplished through VRA's new V AHELPS program which allows VRA to serve as a conduit issuer for localities through a public bond issuance or direct bank placement. VAHELPS debt is not backed by the Commonwealth's moral obligation pledge.

Through its own financing programs and its partnership with select state agencies, VRA was able to attain several other significant achievements that included the financing of grants and loans across Virginia for 117 projects totaling $389.9 million and facilitating refunding opportunities for debt service savings of$10.5 million for 14 localities through the VRA Virginia Pooled Financing Program.

The VRA Board and staff are pleased with the achievements of the Authority over the last year and look forward to working with the Administration and the Legislature in addressing the infrastructure financing needs of Virginia localities.

Sincerely,

/s/ Jean F. Bass
Acting Executive Director