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, 2018, is submitted pursuant to the requirements set forth in § 62.1-222 of the Code of Virginia, as amended.

VRA's attached 2018 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.

The Authority was established in 1984 as an independent political subdivision of the Commonwealth to offer an additional source of funding for local infrastructure projects, particularly to provide for safe drinking water, wastewater treatment and solid waste management. Since that time, additional areas of infrastructure investment have been made eligible for financing in the enabling legislation, reflecting the evolving capital improvement priorities of local governments and the Commonwealth. Starting in FY19, there are 19 project areas eligible for infrastructure financing. With a focus on innovative financial solutions, the Authority is able to significantly reduce the cost of financing projects for borrowers. Through low-cost, custom tailored financing through the pooled bond program, and through joint administration of revolving loan programs with state agencies partners, borrowers benefit from shared expenses and a straightforward and customer-friendly loan process. This allows local governments to provide the best services while demonstrating responsible stewardship of public dollars.

During FY18, the VRA Board and staff continued to address the financing needs and debt service requirements of counties, cities, towns and service authorities. This has included working to enhance the long-term financial health and stability of localities and the Commonwealth. VRA has been able to provide financing alternatives for infrastructure projects in fiscally distressed communities while maintaining its own credit standing and the Commonwealth's moral obligation pledge. At the same time, VRA increased the Authority's Portfolio Risk Management Reserve to provide greater credit enhancement and further protect the state's moral obligation pledge.

In FY18 VRA financed grants and loans across Virginia for 132 projects for $377 million in investment in our communities. VRA also facilitated refunding opportunities providing $12.6 million in net present value debt service savings for 10 localities through the VRA Virginia Pooled Financing Program. VRA delivers value to local governments while maintaining a strong financial position to ensure that the Authority can continue to provide financial solutions for infrastructure projects to improve the health, safety and general welfare of communities in the Commonwealth.

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

Sincerely,

/s/ Stephanie L. Hamlett
Executive Director