Loading...
20877 1 ORDINANCE NO. 20,877 2 3 AN ORDINANCE TO AUTHORIZE THE ISSUANCE OF A PROMISSORY 4 NOTE TO PROVIDE SHORT-TERM FINANCING UNDER AMENDMENT 5 NO. 78 TO THE ARKANSAS CONSTITUION FOR THE ACQUISITION, 6 CONSTRUCTION AND INSTALLATION OF REAL AND TANGIBLE 7 PERSONAL PROPERTY; TO DECLARE AN EMERGENCY; AND FOR 8 OTHER PURPOSES. 9 10 WHEREAS the City of Little Rock, Arkansas (the "City") is authorized and empowered under the 11 provisions of Amendment No. 78 to the Arkansas Constitution ("Amendment No. 78") and Act 1808 of 12 2001 (codified as Title 14,Chapter 78 of the Arkansas Code of 1987 Annotated)(the"Act"),to issue notes 13 and expend the proceeds thereof to finance all or a portion of the cost of acquiring, constructing and 14 installing real property or tangible personal property having an expected useful life of more than one(1)- 15 year; and, 16 WHEREAS,the City proposes to finance the acquisition,construction and equipping of the final phase 17 of the 12"'Street Station,the acquisition of fire vehicles and equipment and the acquisition and installation 18 of information technology equipment and software(collectively,the"Property to be Financed"); and, 19 WHEREAS, it is proposed that the City issue its promissory note in the principal amount of Five 20 Million,Nine Hundred Sixteen Thousand Dollars($5,916,000)(the"Note")under Amendment No. 78 and 21 the Act for the purpose of fmancing all or a portion of the costs of the Property to be Financed; and, 22 WHEREAS, the City intends to arrange for a loan (the "Loan") from a banking institution (the 23 "Lender")and to issue the Note to the Lender in consideration for the Loan; 24 NOW, THEREFORE,BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY 25 OF LITTLE ROCK,ARKANSAS: 26 Section 1: The Board of Directors hereby fmds that the Property to be financed is tangible personal 27 property or real property and will have a useful life of more than one (1)-year. The Board of Directors 28 further fords that the aggregate principal amount of the Note and the City's outstanding indebtedness issued 29 or incurred under Amendment No.78,does not exceed 5%of the assessed value of taxable property located 30 within the City as determined by the last tax assessment. 31 Section 2: Under the authority of the Constitution and laws of the State of Arkansas (the "State"), 32 including particularly Amendment 78 and the Act,the Note is hereby authorized and ordered issued in the 33 principal amount of Five Million,Nine Hundred Sixteen Thousand Dollars($5,916,000)for the purpose of [Page 1 of 4] 1 financing all or a portion of the costs of acquiring, constructing and installing the Property to be Financed 2 and paying expenses of issuing the Note. The Note shall be dated the date of issuance and shall bear interest 3 on the outstanding principal amount at a fixed rate not to exceed 5%per annum. The Note shall be repaid 4 in five substantially equal annual amortized installments of principal and interest, commencing one (1)- s year from the date of the Note and on the same day of each year thereafter, with the final installment due 6 five(5)years from the date of the Note. The Note shall be issued in fully registered form. The Note shall 7 be executed by the Mayor and the City Clerk and the seal of the City shall be affixed to the Note. 8 Section 3: The note shall be issued to the Lender in consideration for the Loan. The Lender shall be 9 selected by the City Manager based upon the commitment or proposal for the Loan that the City Manager 10 determines to have the lowest cost to the City. The City Treasurer is hereby authorized and directed to 11 solicit proposals or commitments for the Loan from at least three(3)banking institutions having offices in 12 the City, in such manner as shall be approved by the City Manager. The City Manager shall have the right 13 to reject any and all proposals and commitments. 14 Section 4: As provided in Amendment No. 78,the annual debt service payments on the Note in each 15 fiscal year shall be charged against and paid from the general revenues of the City for such fiscal year. For 16 the purpose of making the annual debt service payments, there is hereby, and shall be, appropriated to pay 17 the Note, an amount of general revenues of the City sufficient for such purposes. The City Treasurer is 18 hereby authorized and directed to withdraw from the General Fund of the City the amounts and at the times 19 necessary to make the annual debt service payments on the Note. 20 Section 5: The Board of Directors hereby finds that the Property to be Financed is a part of the property 21 that the Board of Directors anticipated would be paid for with the proceeds of a 3/8-Cent Sales and 22 Compensating Use Tax for capital projects approved by the voters at an election held on September 13, 23 2011 (the"Tax Proceeds"). The Board of Directors further finds that the use of Tax Proceeds to reimburse 24 the general fund for general revenues used to retire the principal installments of the Note is appropriate as 25 an expenditure of the Tax Proceeds for capital improvements. This shall not be construed as a pledged of 26 the Tax Proceeds to the payment of the Note. The Tax Proceeds are not pledged to the retirement of the 27 Note. 28 Section 6: (a) The City covenants with the owner of the Note(the"Owner")from time to time that it 29 shall not take any action or suffer or permit any action to be taken or condition to exist which causes or 30 may cause the interest payable on the Note to be included in gross income for federal income tax purposes. 31 Without limiting the generality of the foregoing, the City covenants with the Owner that the proceeds of 32 the sale of the Note will not be used directly or indirectly in such manner as to cause the Note to be treated 33 as an"arbitrage bond"within the meaning of Section 148 of the Internal Revenue Code of 1986,as amended 34 (the"Code"). [Page 2 of 4] 1 (b) The City covenants with the Owner that it will not use or permit the use of the Property 2 to be Financed or the proceeds of the Note, in such manner as to cause the Note to be a "private activity 3 bond"within the meaning of Section 141 of the Code. 4 (c) The City covenants with the owner that it will not reimburse itself from Note proceeds 5 for any costs paid prior to the date the Note is issued except in compliance with United States Treasury 6 Regulation No. 1.150-2. This ordinance shall constitute an"official intent"for purposes of the Regulation. 7 (d) The City covenants with the Owner that it will submit to the Secretary of the Treasury 8 of the United States,not later than the 15'day of the second calendar month after the close of the calendar 9 quarter in which the Note is issued, a statement concerning the Note which contains the information 10 required by Section 149€of the Code. 11 Section 7: The City shall provide such financial information to the Lender as the Lender may 12 reasonably request. 13 Section 8: The Mayor, City Manager, City Treasurer, City Attorney and City Clerk are hereby 14 authorized and directed, for an on behalf of the City, to perform all acts of whatever nature necessary to 15 effect and carry out the authority conferred by this ordinance and to execute all papers, documents, 16 certificates and other instruments that may be required for the carrying out of such authority or to evidence 17 the exercise thereof. 18 Section 9: Severability. In the event any title, section, paragraph, item, sentence, clause, phrase, or 19 word of this resolution is declared or adjudged to be invalid or unconstitutional, such declaration or 20 adjudication shall not affect the remaining portions of the resolution which shall remain in full force and 21 effect as if the portion so declared or adjudged invalid or unconstitutional were not originally a part of the 22 ordinance. 23 Section 10: Repealer. All laws, ordinances, resolutions, or parts of the same, which are inconsistent 24 with the provisions of this resolution are hereby repealed to the extent of such inconsistency. 25 Section 11: Emergency Clause. The Board of Directors hereby determines that the instigation and 26 completion of the projects hereinabove set forth are essential to the public health, safety and welfare of the 27 citizens of the City, and must be financed as quickly as possible; an emergency is, therefore, declared to 28 exist and this ordinance shall be in full force and effect from and after the date of its execution. 29 PASSED: May 20,2014 30 ATTEST: 31 / 32 \DOM( � �/7C `� ` / / 4",/. 33 Toya l�o inson Assists tl 'ity Clerk Mark Stodola,Mayor 34 �l [Page 3 of 4] 1 APPROVED AS TO LEGAL FORM: 3 : 4 Thomas M. Carpenrei`,City Atiney 5 // V 6 // 7 // 8 // 9 // 10 // 11 // 12 // 13 // 14 // 15 // 16 // 17 // 18 // 19 // 20 // 21 // 22 // 23 // 24 // 25 // 26 // 27 // 28 // 29 // 30 // 31 // 32 // 33 // 34 // [Page 4 of 41