21845 1 ORDINANCE NO.21,845
2
3 AN ORDINANCE TO AUTHORIZE THE CONSTRUCTION OF
4 BETTERMENTS AND IMPROVEMENTS TO THE WATER
5 RECLAMATION SYSTEM OF THE CITY OF LITTLE ROCK,
6 ARKANSAS; TO AUTHORIZE THE ISSUANCE OF A WATER
7 RECLAMATION SYSTEM REVENUE BOND, SERIES 2020, FOR THE
8 PURPOSE OF FINANCING THE COST THEREOF; PROVIDING FOR
9 THE PAYMENT OF THE PRINCIPAL AND INTEREST ON THE BOND;
10 AND FOR OTHER PURPOSES.
11
12 WHEREAS, the City of Little Rock, Arkansas (the "City") owns a Sewer System (the "System"),
13 which is now identified as a Water Reclamation System and is operated by the Water Reclamation
14 Commission of the City(the "Commission"); and,
15 WHEREAS,the.Commission has determined that betterments and improvements to the System(the
16 "Improvements") are necessary in order to improve handling of wet weather flows and the quality of
17 sanitary sewer service in the City; and,
18 WHEREAS,the Commission has caused to be prepared by the Engineering Staff of the Little Rock
19 Water Reclamation Authority a preliminary report containing a general description and estimates of cost
20 for the Improvements that have been examined and approved by the Commission and the Board of
21 Directors and a copy of which report is on file in the Office of the City Clerk and the Chief Executive
22 Officer of the System(the "CEO")where it may be inspected by any interested person; and,
23 WHEREAS,the City does not have available funds to pay the estimated costs of the Improvements,
24 including bond issuance costs, contingencies and interest during construction, but can obtain the same by
25 the issuance of a Water Reclamation System Revenue Bond(the"bond"); and,
26 WHEREAS, the City is making arrangements for the sale of a Fifty-One Million, Four Hundred
27 Thousand Dollars ($51,400,000.00) principal amount bond to the Arkansas Development Finance
28 Authority, as purchaser (the "Bondholder"), at a price of par for a bond bearing interest at the rate of
29 1.25% per annum pursuant to a Bond Purchase Agreement (the "Agreement") among the City, the
30 Bondholder and the Arkansas Natural Resources Commission ("ANRC"), which has been presented to
31 and is before this meeting; and,
32 WHEREAS,the City is authorized under Amendment No. 65 to the Arkansas Constitution and Title
33 14, Chapter 164, Subchapter 4, and Title 14, Chapter 235, Subchapter 2 of the Arkansas Code of 1987
34 Annotated(the "Authorizing Legislation"),to issue and sell the bond;and,
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1 WHEREAS,the City has outstanding(a) its Sewer Revenue Bond, Series 2007B (the "Series 2007B
2 Bond"), authorized by Ordinance No. 19,769, adopted June 19, 2007 (the "2007B Ordinance"); (b) its
3 Sewer Revenue Bond, Series 2009A (the "Series 2009A Bond"), authorized by Ordinance No. 20,074,
4 adopted March 10, 2009 (the "2009A Ordinance"); (c) its Sewer Refunding Revenue Bonds, Series 2011
5 (the "Series 2011 Bonds"), authorized by Ordinance No. 20,440, adopted June 7, 2011 (the "2011
6 Ordinance"); (d) its Sewer Revenue Bonds, Series 2012 (the "Series 2012 Bonds"), authorized by
7 Ordinance No. 20,604, adopted on July 17, 2012 (the "2012 Ordinance"); (e) its Sewer Revenue Bond,
8 Series 2013 (the "Series 2013 Bond"), authorized by Ordinance No. 20,711, adopted April 2, 2013 (the
9 "2013 Ordinance"); (f) its Sewer Refunding Revenue Bonds, Series 2014 (the "Series 2014 Bonds"),
10 authorized by Ordinance No. 20,937, adopted September 16, 2014 (the "2014 Ordinance"); (g) its Sewer
11 Refunding Revenue Bonds, Series 2015 (the "Series 2015 Bonds"), authorized by Ordinance No. 20,994,
12 adopted February 24, 2015 (the "2015 Ordinance"); (h) its Sewer Revenue Bond, Series 2016
13 (collectively, the "Series 2016A Bond"), authorized by Ordinance No. 21,258, adopted June 28, 2016, as
14 amended by Ordinance No. 21,844, adopted February 18, 2020 (the "2016A Ordinance"), (i) its Sewer
15 Refunding Revenue Bonds, Series 2016B (the "Series 2016B Bonds"), authorized by Ordinance No.
16 21,317, adopted October 18, 2016 (the "2016B Ordinance"), (j) its Water Reclamation System Revenue
17 Bonds, Series 2017 (the "Series 2017 Bonds"), authorized by Ordinance No. 21,479, adopted September
18 19, 2017 (the "2017 Ordinance"); and(k) its Water Reclamation System Revenue Bond, Series 2018 (the
19 "Series 2018 Bond"), authorized by Ordinance No. 21,553, adopted February 20, 2018 (the "2018
20 Ordinance"); and(1) its Water Reclamation System Revenue Bond, Series 2019 (the"Series 2019 Bond")
21 authorized by Ordinance No. 21,699,adopted February 19,2019 (the"2019 Ordinance"); and,.
22 WHEREAS, the Bondholder proposes to pledge the bond as collateral for the payment of its
23 Revolving Loan Fund Revenue Bonds (the "ADFA Bonds") pursuant to its general bond resolution, as
24 amended or supplemented from time to time, to the bank or trust company to be named as trustee
25 thereunder(the "ADFA Trustee"); and,
26 WHEREAS,the City is required to pay to the Arkansas Development Finance Authority, as servicer
27 (the "Authority"), a servicing fee equal to 1% per annum of the outstanding principal amount of the bond
28 (the "Servicing Fee").
29 NOW,THEREFORE,BE IT ORDAINED BY THE BOARD OF DIRECTORS OF THE CITY
30 OF LITTLE ROCK,ARKANSAS:
31 Section 1. The Improvements shall be accomplished. The accomplishment of the Improvements
32 shall be under the control and supervision of, and all details in connection therewith shall be handled by,
33 the Commission, and the Commission shall make all contracts and agreements necessary or incidental to
34 the performance of its duties and the execution of its powers. The Commission shall let all construction
35 contracts pursuant to and in accordance with existing laws and shall require such Performance Bonds and
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1 insurance from the contractors as, in the judgment of the Commission, will fully insure the completion of
2 the Improvements in accordance with the plans and specifications therefor.
3 Section 2. The sale to the Bondholder of up to Fifty-One Million, Four Hundred Thousand Dollars
4 ($51,400,000) in principal amount of a bond from the City at a price of par for a bond bearing interest at
5 the rate of 1.25% per annum and otherwise subject to the terms and provisions hereafter in this ordinance
6 set forth in detail be, and is hereby approved and the bond is hereby sold to the Bondholder. The Mayor
7 is hereby authorized and directed to execute and deliver the Agreement on behalf of the City and to take
8 all action required on the part of the City to fulfill its obligations under the Agreement. The Agreement is
9 hereby approved in substantially the form submitted to this meeting with such changes as may be
10 approved by the Mayor,his execution to constitute complete evidence of such approval.
11 Section 3. The Board of Directors hereby finds and declares that the period of usefulness of the
12 Improvements will be more than thirty-five(35)years,which is longer than the term of the bond.
13 Section 4. Under the authority of the Constitution and laws of the State of Arkansas (the "State"),
14 including particularly the Authorizing Legislation, City of Little Rock, Arkansas Water Reclamation
15 System Revenue Bond, Series 2020 (the "bond") is hereby authorized and ordered issued in the principal
16 amount of Fifty-One Million, Four Hundred Thousand Dollars ($51,400,000), the proceeds of the sale of
17 which are necessary to provide sufficient funds for accomplishing the Improvements, paying expenses
18 incidental thereto and expenses of issuing the bond, and funding interest during construction.
19 The bond shall bear interest at the rate of 1.25% per annum based upon a 360-day year of twelve(12)
20 consecutive thirty (30)-day months. The bond shall be dated the date of delivery to the Bondholder.
21 Interest shall be payable on the first April 15th or October 15th after the bond is issued and on each April
22 15th October 15t thereafter. Principal shall be payable in installments on April 15, 2024, and each
23 October 15th and April 15th thereafter until the unpaid principal is paid in full as follows:
Date Amount Date Amount
04/15/24 $604,456 04/15/39 $845,514
10/15/24 611,256 10/15/39 855,026
04/15/25 618,133 04/15/40 864,645
10/15/25 625,087 10/15/40 874,372
04/15/26 632,119 04/15/41 884,209
10/15/26 639,230 10/15/41 894,157 •
04/15/27 646,421 04/15/42 904,215
10/15/27 653,694 10/15/42 914,388
04/15/28 661,048 04/15/43 924,674
10/15/28 668,485 10/15/43 935,078
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04/15/29 676,006 04/15/44 945,597
10/15/29 683,611 10/15/44 956,235
04/15/30 691,301 04/15/45 966,992
10/15/30 699,078 10/15/45 977,871
04/15/31 706,943 . 04/15/46 988,873
10/15/31 714,895 10/15/46 999,997
04/15/32 722,939 04/15/47 1,011,247
10/15/32 731,072 10/15/47 1,022,623
04/15/33 739,296 04/15/48 1,034,128
10/15/33 747,613 10/15/48 1,045,762
04/15/34 756,023 04/15/49 1,057,527
10/15/34 764,529 10/15/49 1,069,424
04/15/35 773,130 04/15/50 1,081,456
10/15/35 781,828 10/15/50 1,093,622
04/15/36 790,623 04/15/51 1,105,925
10/15/36 799,518 10/15/51 1,118,367
04/15/37 808,513 04/15/52 1,130,948
10/15/37 817,608 10/15/52 1,143,671
04/15/38 826,806 04/15/53 1,156,538
10/15/38 836,107 10/15/53 1,169,551
1 The bond will be registered as to both principal and interest, payable to the Bondholder, or registered
2 assigns,as set forth hereinafter in the bond form,and shall be numbered R-1.
3 Payment of principal and interest shall be by check or draft mailed to the Bondholder at its address
4 shown on the bond registration books of the City which shall be maintained by the City Clerk as Bond
5 Registrar, without presentation or surrender of the bond (except upon final payment) and such payments
6 shall discharge the obligation of the City to the extent thereof. The City Clerk shall keep a payment
7 record and make proper notations thereon of all payments of principal and interest.
8 Payment of principal and interest shall be in any coin or currency of the United States of America
9 which, as at the time of payment, shall be legal tender for the payment of debts due the United States of
10 America. When the principal of and interest on the bond have been fully paid, it shall be canceled and
11 delivered to the City Clerk.
12 Section 5. The bond shall be executed on behalf of the City by the Mayor and City Clerk and shall
13 have impressed thereon the Seal of the City. The bond is not a general obligation of the City but is a
14 special obligation, the principal of and interest on which, and Servicing Fee in connection therewith, are
15 secured by a pledge of and are payable from revenues derived from the System("Revenues"). The pledge
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1 of Revenues is subordinate to the pledge in favor of the Series 2007B Bond, the Series 2009A Bond,the
2 Series 2011 Bonds, the Series 2012 Bonds,the Series 2013 Bond,the Series 2014 Bonds,the Series 2015
3 Bonds, the Series 2016A Bond, the Series 2016B Bonds, the Series 2017 Bonds, the Series 2018 Bond
4 and the Series 2019 Bond (collectively, the "Prior Bonds"). The bond and interest thereon shall not
5 constitute an indebtedness of the City within any constitutional or statutory limitation.
6 Section 6. The bond shall be in substantially the following form and the Mayor and City Clerk are
7 hereby authorized and directed to make all the recitals contained therein:
8
9 (form of bond)
10
11 UNITED STATES OF AMERICA
12 STATE OF ARKANSAS
13 COUNTY OF PULASKI
14 CITY OF LITTLE ROCK
15 1.25%WATER RECLAMATION SYSTEM REVENUE BOND, SERIES 2020
16
17 No.R-1 $51,400,000
18
19 KNOW ALL MEN BY THESE PRESENTS:
20
21 That the City of Little Rock, Pulaski County, Arkansas (the "City"), for value received, hereby
22 acknowledges itself to owe and promises to pay to the Arkansas Development Finance Authority, or
23 registered assigns, solely from the special fund provided as hereinafter set forth,the principal sum of
24
25 FIFTY ONE MILLION FOUR HUNDRED THOUSAND DOLLARS
26 (or the total principal amount outstanding as reflected
27 by the Record of Payment of Advances attached hereto)
28
29 with interest on the unpaid balance of the total principal amount at the rate of 1.25% per annum from the
30 date of each advance. The principal and interest shall be payable in such coin or currency of the United
31 States of America as at the time of payment shall be legal tender for the payment of debts due the United
32 States of America.
33 Interest on the unpaid balance of the total principal amount shall be payable on October 15, 2020,and
34 on each April 15t October 15t thereafter. Principal shall be payable in installments on April 15, 2024,
35 and on each April 15t and October 15t thereafter until the unpaid principal is paid as follows:
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1
2 Date Amount
3
4 (There will be inserted the schedule set forth in Section 4 of this
5 Ordinance.)
6
7 Payments of the principal and interest installments due hereon shall be made, except for final
8 payment, without presentation and surrender of this bond, directly to the registered owner at his address
9 shown on the bond registration book of the City maintained by the City Clerk as Bond Registrar,and such
10 payments shall fully discharge the obligation of the City to the extent of the payments so made.
11 This bond is issued for the purpose of providing financing of the costs of constructing betterments
12 and improvements to the City's Sewer System which is now identified as a Water Reclamation System
13 (the "System"), interest during construction, and costs of authorizing and issuing this bond, and is issued
14 pursuant to and in full compliance with the Constitution and laws of the State of Arkansas (the "State"),
15 including particularly Title 14, Chapter 164, Subchapter 4 and Title 14, Chapter 235, Subchapter 2 of the
16 Arkansas Code of 1987 Annotated, and pursuant to Ordinance No. of the City, duly
17 adopted and approved on the 18th day of February 2020 (the "Authorizing Ordinance"). Reference is
18 hereby made to the Authorizing Ordinance for the details of the nature and extent of the security and of
19 the rights and obligations of the City and the registered owner of this bond.
20 This bond may be assigned with the written approval of the Arkansas Natural Resources Commission
21 ("ANRC"), and in order to effect such assignment the assignor shall promptly notify the City Clerk by
22 registered mail, and the assignee shall surrender this bond along with a written approval of ANRC to the
23 City Clerk for transfer on the registration records. Every assignee shall take this bond subject to all
24 payments and prepayments of principal and interest (as reflected by the Payment Record maintained by
25 the City Clerk),prior to such surrender for transfer.
26 This bond may be prepaid at the option of the City from funds from any source, in whole but not in
27 part, at any time on and after April 15, 2030, at a prepayment price equal to the principal amount
28 outstanding,plus accrued interest to the prepayment date.Notice shall be given of such prepayment to the
29 owner of this bond or registered assigns at least ninety (90) days prior to the prepayment date. Such
30 notice shall be in writing mailed to the address of the owner of this bond or registered assigns at the
31 address as reflected on the bond registration books of the City Clerk.
32 This bond does not constitute an indebtedness of the City within any constitutional or statutory
33 limitation or provision, and the taxing power of the City is not pledged to the payment of the principal of
34 or interest on this bond. This bond is a special obligation payable solely from the net revenues derived
35 from the operation of the System. In this regard, the pledge of net System revenues is subordinate to the
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1 pledge of System revenues to Sewer Revenue Bonds, Series 2007B, 2009A, 2012, 2013 and 2016, Sewer
2 Refunding Revenue Bonds, Series 2011, 2014, 2015 and 2016B and Water Reclamation System Revenue
3 Bonds, Series 2017,2018 and 2019, so long as any of such bonds are outstanding. A sufficient amount of
4 System revenues to pay principal and interest has been duly set aside and pledged as a special fund for
5 that purpose, identified as the "2020 ADFA Bond Fund," in the Authorizing Ordinance. The City has
6 fixed and has covenanted and agreed to maintain rates for use of the System which shall be sufficient at
7 all times to at least provide for the payment of the reasonable expenses of operation and maintenance of
8 the System,provide for the payment of the principal of and interest on all the outstanding bonds to which
9 System revenues are pledged as the same become due,to establish and maintain debt service reserves and
10 to provide a depreciation fund, all as set forth in the Authorizing ordinance. This bond is issued with the
11 intent that the laws of the State shall govern its construction.
12 IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things
13 required by the Constitution and statutes of the State to exist, happen and be performed precedent to and
14 in the issuance of this bond do exist, have happened and have been performed in regular and due time,
15 form and manner as required by law; that this bond does not exceed any constitutional or statutory
16 limitation of indebtedness; and that provision has been made for the payment of the principal of and
17 interest on this bond,as provided in the Authorizing Ordinance.
18 IN WITNESS WHEREOF, the City of Little Rock, Arkansas has caused this bond to be executed in
19 its name by its Mayor and City Clerk,thereunto duly authorized, and its corporate seal to be affixed,all as
20 of the day of ,2020.
21 CITY OF LITTLE ROCK,ARKANSAS
22 ATTEST: By
23 Mayor
24
25 City Clerk
26
27 (SEAL)
28 [A Registration Certificate and Record of Payment
29 of Advances shall be attached to the bond.]
30 Section 7. The City has heretofore fixed sewer rates by Ordinance No. 21,080, adopted on August 4,
31 2015. Reference is hereby made to such ordinance for the details thereof and other provisions pertaining
32 thereto,which sewer rates are hereby confirmed and continued as provided therein.
33 The City covenants and agrees that the rates established will produce Gross Revenues at least
34 sufficient to pay monthly operation, maintenance and funded depreciation expenses of the System, pay
35 the principal of and interest on all outstanding bonds and notes to which Revenues are pledged
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1 (collectively, "System Bonds"), as the same become due, pay the financing, servicing and administrative
2 fees in connection therewith as the same become due, and create and maintain any required debt service
3 reserves ("Required Payments"). The City covenants always to maintain rates (including increases as
4 necessary) which will provide for the Required Payments. The rates in effect for sewer service at this
5 time shall not be reduced without the prior written consent of ANRC and the Bondholder.
6 None of the facilities or services afforded by the System shall be furnished without a charge being
7 made therefor. In the event that the City or any department, agency or instrumentality thereof shall avail
8 itself of the facilities and services afforded by the System, the reasonable value of the service or facilities
9 so afforded shall be charged against the City or such department, agency or instrumentality and shall be
10 paid for as the charges accrue. The revenues so received shall be deemed to be revenues derived from the
11 operation of the System and shall be used and accounted for in the same manner as the other revenues
12 derived from the operation of the System.
13 Section 8. All of the provisions of the 2007B Ordinance,the 2009A Ordinance,the 2011 Ordinance,
14 the 2012 Ordinance,the 2013 Ordinance,the 2014 Ordinance,the 2015 Ordinance,the 2016A Ordinance,
15 the 2016B Ordinance, the 2017 Ordinance the 2018 Ordinance and the 2019 Ordinance (the "Prior Bond
16 Ordinances") (including those incorporated therein by reference), as now in effect, and except those
17 provisions clearly inapplicable hereto, including, without limitation, the provisions pertaining to the
18 collection,the investment and the handling of Revenues and funds, and to the operation,maintenance and
19 care of the System, are hereby made applicable hereto and are incorporated herein by reference as though
20 fully set forth at this point. The effect of the above covenant shall be to continue the applicable
21 provisions in full force and effect even after the payment of the Prior Bonds and until the bond is paid, or
22 provision made therefor.
23 Section 9. The City covenants that it will continuously operate the System as a revenue-producing
24 undertaking and will not sell or lease the same, or any substantial portion thereof, without the prior
25 written approval of the Bondholder and ANRC;provided, however,that nothing herein shall be construed
26 to prohibit the City from making such dispositions of properties of the System and such replacements and
27 substitutions for properties of the System as shall be necessary or incidental to the efficient operation of
28 the System as a revenue-producing undertaking.
29 Section 10. (a) After making the required payments into the special fund heretofore created and
30 designated"Sewer Operation and Maintenance Fund" and into the bond funds for the Prior Bonds and any
31 additional bonds having a priority on the pledge of Revenues over the pledge in favor of the bond and
32 after paying the financing, servicing and administrative fees in connection with the Prior Bonds, there
33 shall be paid from the special fund heretofore created and designated "Sewer Fund" into an account of the
34 City in a special fund to be created by the Bondholder(the "2020 ADFA Bond Fund") for the purpose of
35 paying the principal of and interest on the bond the amounts specified in(b)below.
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1 (b) There shall be deposited from proceeds of the bond or, at the direction of the Commission, from
2 moneys in the Sewer Fund, into the 2020 ADFA Bond Fund on the first April 15t or October 15th after
3 the bond is issued and on each April 15th and October 15t thereafter until October 15, 2023, the interest
4 due on the bond on such dates. Commencing on the first business day of each month thereafter,there shall
5 be deposited from moneys in the Sewer Fund into the 2020 ADFA Bond Fund an amount equal to 1/6 of
6 the amount of interest on and principal of the bond next due.
7 (c) If Revenues are insufficient to make the required payment on or before the first business day of
8 the following month into the 2020 ADFA Bond Fund, then the amount of any such deficiency in the
9 payment made shall be added to the amount otherwise required to be paid into the 2020 ADFA Bond
10 Fund on the first business day of the next month.
11 (d) When the moneys held in the 2020 ADFA Bond Fund which represent payments by the City and
12 interest earnings thereon or proceeds of investments therefrom (collectively, "City Funds") shall be and
13 remain sufficient to pay in full the principal ofand interest on the bond,the City shall not be obligated to
14 make any further payments into the 2020 ADFA Bond Fund.
15 (e) All moneys in the 2020 ADFA Bond Fund representing City Funds shall be used solely for the
16 purpose of paying the principal of and interest on the bond and the City shall automatically receive a
17 credit for the amount of such City Funds on hand in the 2020 ADFA Bond Fund and available for the
18 payment of any principal and interest currently due on an interest or principal payment date irrespective
19 of whether the Bondholder has applied or caused to be applied such funds on that date for such purpose.
20 The City shall receive a credit for all earnings and income derived from the investment of the City Funds
21 each April 15t and October 15th and such earnings and income shall be credited against the next six (6)
22 monthly payments.
23 (f) The bond shall be specifically secured by a pledge of all Revenues required to be placed into the
24 2020 ADFA Bond Fund. This pledge in favor of the bond is hereby irrevocably made according to the
25 terms of this Ordinance, and the City and its officers and employees shall execute, perform and carry out
26 the terms thereof in strict conformity with the provisions of this Ordinance.
27 Section 11. After making the payments into the 2020 ADFA Bond Fund required by Section 10
28 hereof, there shall be paid from the Sewer Fund the Servicing Fee to the Authority. The Servicing Fee
29 shall be payable on each date interest on the bond is due and shall be calculated on the same basis as
30 interest on the bond. The payment of the Servicing Fee is expressly made subordinate to the payment of
31 the principal of and interest on the bond.
32 Section 12. After making the required payments in accordance with Sections 10 and 11 hereof, there
33 shall be paid from the Sewer Fund into a special fund heretofore created and designated the "Sewer
34 Depreciation Fund" on or before the 15th day of each month while the bond is outstanding, three percent
35 (3%) of the Revenues which remain after the required payment into the Sewer Operation and
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1 Maintenance Fund has been made. Once the Sewer Depreciation Fund reaches an amount equal to the
2 greater of (a) the amount required by the Prior Bond Ordinances or (b) One Million, Eight Hundred
3 Thousand Dollars ($1,800,000) (the "Required Level"), the City shall not be required to make further
4 deposits into the Sewer Depreciation Fund; provided,however, that monthly deposits must resume, if the
5 Sewer Depreciation Fund drops below the Required Level, until such time as the Required Level is again
6 reached. The moneys in the Sewer Depreciation Fund shall be used solely for the purpose of paying the
7 cost of replacements made necessary by the depreciation of the System. If in any fiscal year a surplus
8 shall be accumulated in the Sewer Depreciation Fund over and above the Required Level and over and
9 above the amount necessary to defray the cost of the probable replacements during the then current fiscal
10 year and the next ensuing fiscal year, such surplus may be transferred and paid into the Sewer Fund.
11 Section 13. The City shall assure that(1)not in excess of 10%of the proceeds of the bond is used for
12 Private Business Use if, in addition,the payment of more than 10% of the principal or 10%of the interest
13 due on the bond during the term thereof is, under the terms of the bond or any underlying arrangement,
14 directly or indirectly secured by any interest in property used or to be used for a Private Business Use or
15 in payments in respect of property used or to be used for a Private Business Use or is to be derived from
16 payments,whether or not to the City, in respect of property or borrowed moneys used or to be used for a
17 Private Business Use; and(2)that, in the event that both (A) in excess of 5% of the proceeds of the bond
18 are used for a Private Business Use, and (B) an amount in excess of 5% of the principal or 5% of the
19 interest due on the bond during the term thereof is, under the terms of the bond or any underlying
20 arrangement, directly or indirectly, secured by any interest in property used or to be used for said Private
21 Business Use or in payments in respect of property used or to be used for said Private Business Use or is
22 to be derived from payments, whether or not to the City, in respect of property or borrowed money used
23 or to be used for said Private Business Use, then said excess over said 5% of proceeds of the bond used
24 for a Private Business Use shall be used for a Private Business Use related to the governmental use of the
25 Improvements.
26 The City shall assure that not in excess of 5% of the proceeds of the bond are used, directly or
27 indirectly,to make or finance a loan to persons other than state or local governmental units.
28 As used in this Section, "Private Business Use" means use directly or indirectly in a trade or business
29 carried on by a natural person or in any activity carried on by a person other than a natural person,
30 excluding, however, use by a State or Local Governmental unit and use as a member of the general
31 public.
32 Section 14. The principal and interest installments shall be prepayable prior to maturity as provided
33 in the bond form in Section 6 hereof.
34 • Section 15. As long as the bond is outstanding,the City shall not issue or attempt to issue any bonds
35 having or claimed to be entitled to a priority of lien on Revenues over the lien securing the bond,
[Page 10 of 15]
1 includingany and all future extensions, betterments and improvements to the System except as provided
2 in this Section.
3 The City may issue additional revenue bonds having a priority on or on a parity with the lien on
4 Revenues in favor of the bond to finance or pay the cost of constructing betterments and improvements to
5 the System or to refund outstanding System Bonds, if there shall have been procured and filed with the
6 City Clerk and the Bondholder a statement by a certified public accountant not in the regular employ of
7 the City (the "Accountant") reciting the opinion that (i) in the case of parity bonds either (A) the Net
8 Revenues (Net Revenues being gross Revenues less operation and maintenance expenses, but not
9 including depreciation) for the fiscal year preceding the year in which such additional bonds are to be
10 issued were not less than 110% of Total Annual Debt Service Requirements (Total Annual Debt Service
11 Requirements being the average annual debt service requirements (including principal, interest and
12 financing, servicing and administrative fees) on all outstanding System Bonds and the bonds then
13 proposed to be issued) or (B) the Net Revenues for the fiscal year succeeding the year in which such
14 additional bonds are to be issued are projected to be sufficient in amount, taking in consideration any
15 enacted increase in Revenues, to be not less than 110% of the Total Annual Debt Service Requirements,
16 or (ii) in the case of the senior lien bonds, either (A) the Net Revenues for the fiscal year preceding the
17 year in which such additional bonds are to be issued were not less than 120% of the Total Annual Debt
18 Service Requirements or (B) the Net Revenues for the fiscal year succeeding the year in which such
19 additional bonds are to be issued are projected to be sufficient in amount, taking into consideration any
20 enacted increase in Revenues,to be not less than 120%of the Total Annual Debt Service Requirements.
21 The additional bonds,the issuance of which is restricted and conditioned by this Section, shall not be
22 deemed to mean bonds the security and source of payment of which are subordinate and subject to the
23 priority of the bond and such additional bonds may be issued without complying with the terms and
24 conditions of this Section.
25 Section 16. It is covenanted and agreed by the City with the Bondholder, the Authority and ANRC
26 that it will faithfully and punctually perform all duties with reference to the System required by the
27 Constitution and laws of the State and by this ordinance, including, without limitation, the making and
28 collecting of reasonable and sufficient rates lawfully established for services rendered by the System,
29 segregating Revenues and applying them to the respective funds maintained pursuant to the Prior Bond
30 Ordinances and this ordinance.
31 The City covenants and agrees that the Bondholder shall have the protection of all the provisions of
32 the Authorizing Legislation, and that the City will diligently proceed to enforce those provisions to the
33 end of the Bondholder realizing fully upon its security. And, if the City shall fail to proceed within 30
34 days after written request shall have been filed by the Bondholder, the Bondholder may proceed to
35 enforce all such provisions.
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1 If there be any default in the payment of the principal of or interest on the bond, or if the City defaults
2 in any 2020 ADFA Bond Fund requirement or in the performance of any of the other covenants contained
3 in this ordinance, the Bondholder may, by proper suit, compel the performance of the duties of the
4 officials of the City under the laws of the State. In the case of a default in the payment of the principal of
5 and interest on the bond,the Bondholder may apply in a proper action to a court of competent jurisdiction
6 for the appointment of a receiver to administer the System on behalf of the City and the Bondholder with
7 power to charge and collect (or by mandatory injunction or otherwise to cause to be charged and
8 collected)rates sufficient to provide for the payment of the expenses of operation, repair and maintenance
9 and to pay the bond and interest outstanding and to apply Revenues in conformity with this ordinance.
10 When all defaults in principal and interest payments have been cured, the custody and operation of the
11 System shall revert to the City. No remedy herein conferred upon or reserved to the Bondholder is
12 intended to be exclusive of any other remedy or remedies herein provided or provided by law, and every
13 such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or given
14 by law. No delay or omission of the Bondholder to exercise any right or power accrued upon any default
15 shall impair any such right or power or shall be construed to be a waiver of any default or an acquiescence
16 therein; and every power and remedy given by this ordinance to the Bondholder may be exercised from
17 time to time and as often as may be deemed expedient.
18 No waiver of any default shall extend to or affect any other existing or any subsequent default or
19 defaults or impair any rights or remedies consequent thereon. Any costs of enforcement of the bond or of
20 any provision of this Ordinance, including reasonable attorney's fees, shall be paid by the City. The
21 Authority may enforce all rights and exercise all remedies available to the Bondholder in the event the
22 Servicing Fee is not paid when due.
23 Section 17. When the bond has been executed and sealed as herein provided, it shall be delivered to
24 the Bondholder upon payment of all or a portion of the purchase price in accordance with the Agreement.
25 Sale proceeds in the amount necessary to make all or a portion of the semiannual interest and Servicing
26 Fee payments due on each April 15th and October 15t to and including October 15, 2023, shall be
27 applied, unless otherwise directed by the Commission, to the payment of Servicing Fees and interest on
28 the bond on such dates. The balance of the sale proceeds shall be deposited, as and when received, in an
29 account of the City heretofore created and now designated as the "Little Rock Water Reclamation
30 Authority Construction Fund" (the "Construction Fund"). The proceeds of the bond in the Construction
31 Fund shall be used for directly paying, or reimbursing the City for, the costs paid in accomplishing the
32 Improvements, expenses incidental thereto and the expenses of issuing the bond approved in accordance
33 with the Agreement. Payments from the Construction Fund shall be by check or voucher signed by either
34 the CEO or such other person or persons designated by the Commission, and drawn on the depository.
35 Each such check or voucher shall briefly specify the purpose of the expenditure.
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1 Section 18. The terms of this ordinance shall constitute a contract among the City, the Bondholder
2 and ANRC and no variation or change in the undertaking herein set forth shall be made while the bond is
3. outstanding unless consented to in writing by the Bondholder and ANRC.
4 Section 19. The Commission will keep proper records, books and accounts relating to the operation
5 of the System, which shall be kept separate from all other records and accounts of the City, in which
6 complete and correct entries shall be made of all transactions relating to the operation of the System in
7 accordance with generally accepted government accounting standards. Such books shall be available for
8 inspection by the Bondholder and ANRC, or the agent or the representative of either, at reasonable times
9 and under reasonable circumstances. The City agrees to have these records audited by an Accountant
10 selected by the Commission at least once each year.
11 In the event the Commission fails or refuses to furnish or cause such reports to be furnished, the
12 Bondholder may have the reports made, and the cost thereof shall be charged against the Sewer Operation
13 and Maintenance Fund.
14 Section 20. The City covenants and agrees that it will maintain the System in good condition and
15 operate it in an efficient manner and at reasonable cost. While the bond is outstanding, the City agrees
16 that it will insure, and at all times keep insured, in the amount of the actual value thereof, in a responsible
17 insurance company or companies selected by the Commission and authorized and qualified under the
18 laws of the State to assume the risk thereof, all above-ground structures of the System against loss or
19 damage thereto from fire, lightning, tornado, winds, riot, strike, civil commotion, malicious damage,
20 explosion, and against loss or damage from any other causes customarily insured against in connection
21 with similar facilities and undertakings as the System. In the event of loss,the proceeds of such insurance
22 shall be applied solely toward the reconstruction, replacement or repair of the System, and in such event
23 the City will, with reasonable promptness, cause to be commenced and completed the reconstruction,
24 replacement and repair work. If such proceeds are more than sufficient for such purposes, the balance
25 remaining shall be deposited to the credit of the Sewer Fund, and if such proceeds shall be insufficient for
26 such purposes, the deficiency shall be supplied, first, from moneys in the Sewer Depreciation Fund,
27 second, from moneys in the Sewer Operation and Maintenance Fund, and third, from available moneys in
28 the Sewer Fund. Nothing herein shall be construed as requiring the City to expend any funds for
29 reconstruction,replacement or repair of the System or for operation and maintenance of the System or for
30 premiums on its insurance which are derived from sources other than insurance proceeds or Revenues,but
31 nothing herein shall be construed as preventing the City from doing so.
32 Section 21. The City agrees that the Bondholder may pledge the bond as security for the ADFA
33 Bonds, and the ADFA Trustee and/or the municipal bond insurer for the ADFA Bonds may exercise any
34 rights and remedies available to the Bondholder under this Ordinance or the Agreement while the bond is
35 pledged and/or the ADFA Bonds are insured. In addition, the City agrees that while the bond is pledged
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1 and/or the ADFA Bonds are insured, copies of all financial information shall be furnished to the ADFA
2 Trustee and/or the municipal bond insurer.
3 Section 22. In the event the offices of Mayor, City Clerk, CEO, Board of Directors, or Commission
4 shall be abolished, or any two or more of such offices shall be merged or consolidated, or in the event the
5 duties of a particular office shall be transferred to another office or officer, or in the event of a vacancy in
6 any such office by reason of death, resignation, removal from office, or otherwise, or in the event any
7 such officer shall become incapable of performing the duties of his office by reason of sickness, absence
8 from the City, or otherwise, all powers conferred and all obligations and duties imposed upon such office
9 or officer shall be performed by the office or officer succeeding to the principal function thereof, or by the
10 office or officer upon whom such powers, obligations,and duties shall be imposed by law.
11 Section 23.It is understood and agreed that the Commission, acting for and on behalf of the City, has
12 custody of and control over the System, operates, maintains and repairs the System and collects and
13 handles Revenues. Therefore, it is understood and agreed that even though there are some express
14 references to the Commission, all references herein to the City shall, when appropriate in view of the
15 authority and responsibility of the Commission, be construed to mean and include the Commission. So
16 long as the Commission operates the System for the City, performance by the Commission of any right or
17 obligation of the City hereunder shall be deemed performance by the City. The Commission presently
18 consists of Chris Marsh, Ganelle Holman,Debbie Shock, Schawnee Hightower,Lauren Ward,Richard L.
19 Mays,Jr. and Bill Flowers.
20 Section 24. The requirements of Ordinance No. 15,249, as they may relate to the authorization and
21 sale of the bond,are hereby waived.
22 Section 25. Reference in this ordinance to "Bondholder" shall include the original Bondholder or any
23 registered assign thereof.
24 Section 26. Severability. In the event any title, section, paragraph, item, sentence, clause, phrase, or
25 word of this ordinance is declared or adjudged to be invalid or unconstitutional, such declaration or
26 adjudication shall not affect the remaining portions of the ordinance which shall remain in full force and
27 effect as if the portion so declared or adjudged invalid or unconstitutional was not originally a part of the
28 ordinance.
29 Section 27. Repealer. All laws, ordinances, resolutions, or parts of the same, that are inconsistent
30 with the provisions of this ordinance,are hereby repealed to the extent of such inconsistency.
31 PASSED: February 18,2020
32 " `" : APPROVED:
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35 .us..i 1 any Clerk Frank Scott,Jr.
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1 APPROVED AS TO LEGAL FORM:
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4 Thomas M. Carpenter, City Atto (i ey
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