21216 1 ORDINANCE NO. 21,216
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 CONSTITUTION FOR THE ACQUISITION
6 AND INSTALLATION OF TANGIBLE PERSONAL PROPERTY; TO
7 PRESCRIBE OTHER MATTERS PERTAINING THERETO; TO
8 DECLARE AN EMERGENCY; AND FOR 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 No. 1808
12 of 2001 (codified as Title 14, Chapter 78 of the Arkansas Code of 1987 Annotated) (the "Act"), to issue
13 notes and to expend the proceeds thereof to finance all or a portion of the cost of acquiring, constructing
14 and installing real property or tangible personal property having an expected useful life of more than one
15 (1)-year; and,
16 WHEREAS,the City proposes to finance the acquisition of self-contained breathing apparatus for the
17 Little Rock Fire Department,the acquisition and installation of a fire suppression system for the City's main
18 information data center, the acquisition of vehicles and equipment, the acquisition and installation of
19 information technology equipment, including particularly, without limitation, fiber infrastructure, and the
20 acquisition and installation of new planning and permitting software and field devices (collectively, the
21 "Property to be Financed"); and,
22 WHEREAS, it is proposed that the City issue its promissory note in the principal amount of Four
23 Million, Five Hundred Twenty-Five Thousand Dollars ($4,525,000) (the "Note") under Amendment No.
24 78 and the Act for the purpose of financing all or a portion of the costs of the Property to be Financed;and,
25 WHEREAS, the City intends to arrange for a loan (the "Loan") from a banking institution (the
26 "Lender")and to issue the Note to the Lender in consideration for the Loan;
27 NOW, THEREFORE,BE IT ORDAINED BY THE BOARD OF DIRECTORS OF THE CITY
28 OF LITTLE ROCK,ARKANSAS:
29 Section 1: The Board of Directors hereby finds that the Property to be Financed is tangible personal
30 property and will have a useful life of more than one(1)-year. The Board of Directors further finds that the
31 aggregate principal amount of the Note and the City's outstanding indebtedness issued or incurred under
32 Amendment No. 78, does not exceed 5% of the assessed value of taxable property located within the City
33 as determined by the last tax assessment.
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1 Section 2: Under the authority of the Constitution and laws of the State of Arkansas (the "State"),
2 including particularly Amendment No. 78 and the Act,the Note is hereby authorized and ordered issued in
3 the principal amount of Four Million, Five Hundred Twenty-Five Thousand Dollars ($4,525,000) for the
4 purpose of financing all or a portion of the costs of acquiring and installing the Property to be Financed and
5 paying expenses of issuing the Note. The Note shall be dated the date of issuance and shall bear interest
6 on the outstanding principal amount at a fixed rate not to exceed 5%per annum. The Note shall be repaid
7 in five(5)substantially equal annual amortized installments of principal and interest,commencing one(1)-
8 year from the date of the Note and on the same day of each year thereafter, with the final installment due
9 five(5)years from the date of the Note. The Note shall be issued in fully registered form. The Note shall
10 be executed by the Mayor and the City Clerk and the seal of the City shall be affixed to the Note.
11 Section 3: The Note shall be issued to the Lender in consideration for the Loan. The Lender shall be
12 selected by the City Manager based upon the commitment or proposal for the Loan that the City Manager
13 determines to have the lowest cost to the City and the best terms. The City Treasurer is hereby authorized
14 and directed to solicit proposals or commitments for the Loan from at least three banking institutions having
15 offices in the City, in such manner as shall be approved by the City Manager. The City Manager shall have
16 the right to reject any and all proposals and commitments.
17 Section 4: As provided in Amendment No. 78,the annual debt service payments on the Note in each
18 fiscal year shall be charged against and paid from the general revenues of the City for such fiscal year. For
19 the purpose of making the annual debt service payments,there is hereby, and shall be, appropriated to pay
20 the Note, an amount of general revenues of the City sufficient for such purposes. The City Treasurer is
21 hereby authorized and directed to withdraw from the General Fund of the City the amounts and at the times
22 necessary to make the annual debt service payments on the Note.
23 Section 5: (a) The City covenants with the owner of the Note (the "Owner") from time to time that
24 it shall not take any action or suffer or permit any action to be taken or condition to exist which causes or
25 may cause the interest payable on the Note to be included in gross income for federal income tax purposes.
26 Without limiting the generality of the foregoing, the City covenants with the Owner that the proceeds of
27 the sale of the Note will not be used directly or indirectly in such manner as to cause the Note to be treated
28 as an"arbitrage bond"within the meaning of Section 148 of the Internal Revenue Code of 1986,as amended
29 (the "Code").
30 (b) The City covenants with the Owner that it will not use or permit the use of the Property
31 to be Financed or the proceeds of the Note, in such manner as to cause the Note to be a "private
32 activity bond" within the meaning of Section 141 of the Code.
33 (c) The City covenants with the Owner that it will not reimburse itself from Note proceeds
34 for any costs paid prior to the date the Note is issued except in compliance with United States
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1 Treasury Regulation § 1.150-2 (the "Regulation"). This ordinance shall constitute an "official
2 intent" for purposes of the Regulation.
3 (d) The City covenants with the Owner that it will submit to the Secretary of the Treasury
4 of the United States, not later than the 15' day of the second calendar month after the close of the
5 calendar quarter in which the Note is issued, a statement concerning the Note which contains the
6 information required by Section 149(e)of the Code.
7 Section 6: The City shall provide such financial information to the Lender as the Lender may
8 reasonably request.
9 Section 7: The Mayor, City Manager, City Treasurer, City Attorney and City Clerk are hereby
10 authorized and directed, for and on behalf of the City, to perform all acts of whatever nature necessary to
11 effect and carry out the authority conferred by this ordinance and to execute all papers, documents,
12 certificates and other instruments that may be required for the carrying out of such authority or to evidence
13 the exercise thereof.
14 Section 8: Severability. In the event any title, section, paragraph, item, sentence, clause, phrase, or
15 word of this Ordinance is declared or adjudged to be invalid or unconstitutional, such declaration or
16 adjudication shall not affect the remaining portions of this ordinance which shall remain in full force and
17 effect as if the portion so declared or adjudged invalid or unconstitutional were not originally part of this
18 Ordinance.
19 Section 9: Repealer. All laws, ordinances, resolutions, or parts of the same which are inconsistent
20 with the provisions of this Ordinance are hereby repealed to the extent of such.inconsistency.
21 Section 10: Emergency Clause. The Board of Directors hereby determines that the instigation and
22 completion of the projects hereinabove set forth are essential to the public health, safety and welfare of the
23 citizens of the City and must be financed as quickly as possible; an emergency is, therefore, declared to
24 exist and this Ordinance shall be in full force and effect from and after the date of its execution.
25 PASSED: April 19,2016
26 ATTR; APPROVED:
27 1/4 /
28 1/201.:311/ //if
/�,
29 .61ey,City Clerk Mark Stodola,Mayor
30 APPROVED AS TO LEGAL FORM:
31
32 A-64--t.,-es V4,
33 Thomas M. Carpente ,City torney
34 /I
35 II
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