191571
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ORDINANCE O, 19J
AN ORDINANCE AUTHORIZING THE ISSUANCE OF A PROMISSORY
4 NOTE To PROVIDE SHORT-TERM FINANCING UNDER
AMENDMENT PTO. 78 TO THE ARKANSAS CONSTITUTIOI FOR THE
ACQUISITION, CONSTRUCTION AND INSTALLATION oT DEAL
AND TANGIBLE PERSONAL PROPERTY; AND PRESCRIBING OTHER
MATTERS PERTAINING TIN THERETO.
10 WHEREAS, the City of Little Dock, Arkansas (the "City" is authorized and
11 empowered under the provisions of Amendment No. 78 to the Arkansas Constitution
1 ("Amendment No. " and Act No. 1808 of 2001 codified. as Title 14, Chapter 78 of the
13 Arkansas Code of 1987 Annotated) (the "Act ", to Issue notes and to expend the proceeds
14 thereof to finance all or a portion of the cost of acquiring, constructing and installing real
1 property or tangible personal property having an expected useful life of more than one 1
16 year; and
17 WHEREAS, pursuant to Resolution No. 11,738, adopted April 20,2004, the City has
18 acquired, and insta ale l vehicles, q ipment and other tangible personal property and the
1 City plans on acquiring and Installmn additional vehicles, equ� m nt and other tangible
20 personal property in fiscal year 200 4; and
1 WHEREAS, the City Proposes to construct streetsca e improvements and properties
for the' Rived runt Park; and
WHEREAS, S, the City further proposes to acquire land and construct improvements
4 thereon for parking proses; and
WHEREAS, such properties heretofore described in the WHEREAS clauses of this
Ordinance are hereinafter referred to collectively as the "Property;" and
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1 WHEREAS, it is proposed that the City issue its promissory note in the principal
amount of $4,215,000 (the V'Note" ) under Amendment No. 78 and the Act for the purpose of
financing all or a portion of the costs of the acquisition, construction and installation of the
Property; and
WHEREAS, the City intends to arrange for a loan. (the "Loan" from a banki�-L
institution. (the "Lender" ) and to issue the Note to the Lender in consideration for the Loan;
NOW, THEREFORE, IT ORDAINED by the Board of Directors of the City of
Little Rock, Arkansas:
Section 1. The Board of Directors hereby finds that the Property is tangible personal
10 property or real property and Will have a useful lie of more than one 1 year. The Board
11 of Directors further find that the aggregate principal amount of the Note and the City's
12 Promissory Notes, dated February 11, 2002, September 25, 2002 and June 18, 2003, does not
13 exceed five percent 5% of the assessed value of taxable property located within the City as
14 determined by the last tax assessment,
15 section 2. Under the authority of the Constitution and laws of the state of Arkansas
1 (the "State"), including particularly Amendment No. 78 and the Act, the Note is hereby
17 authorized and ordered issued in the principal amount of $4,215,000 for the p ur o e of
18 financing all or a portion of the costs of acquiring, constructing and installing the Property
19 and paying expenses of issu -ing the Note. The Note shall be dated the date of issuance and
0 shall bear interest on the outstanding principal amount .t a fixed rate not to exceed 5.50%
21 per annum.. The Note shall be repaid in five annual amortized installments of principal and
interest, commencing one year from the date of the Note and on the same day of each year
thereafter, with the final installment due five years from the date of the Note.
24 section 3. 'the Note shall be issued to the Lender in consideration for the Loan. The
Lender shall be selected by the Mayor based upon the com- mitment oar ro p osal for the
Loan that the Mayor determines to have the lowest cost to the City. The City Treasurer is
hereby authorized and directed to solicit proposals or commitment for the Loan. from p �' at
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I least three banking institutions having offices in the City, in such manner as shall be
approved by the Mayor. The Mayor shall have the right to reject a n-y and all proposals and
commitments.
4- Section 4. As provided in Amendment No. 78, the annual debt service payments on
5 the Note in each fiscal year shall be charged against and paid from the g en.eral revenues of
the City for such fiscal year. For the purpose of making the annual debt service payments,
there is hereby, and shall be, appropriated to pay the Note, an amount of general revenues
of the city sufficient for such purposes. The City Treasurer is hereby authorized and
directed to withdraw from the General Fund of the city the amounts and at the tines
10 necessary to male the annual debt service payments on the Note.
11 Section 5. a The City covenants with the owner of the Note (the "Owner") from
12 time to time that it shall not take any action or suffer or permit any action to be taken or
13 condition to exist which causes or may cause the interest payable on the Note to be
14 included in gross income for federal income tax purposes. Without limitin g e th generality
ty
1.5 of the foregoing, the City covenants with the owner that the roceeds of the sale of the
16 Note will not be used directly or indirectly in such manner as to cause the Note to be
17 treated as an „arbitrage bond's within the m ara*ng of Section 148 of the Internal Revenue
-1 code of 1986, as amended (the "Code").
1 (b) The City covenants with the owner that it will not use or permit the use of the
0 Property or the proceeds of the Note, in such manner as to cause the Note to be a "private
1 activity bond" within the meaning of Section 141 of the Code. In this regard, the City
covenants with the Owner that i it will not use (directly or indirectly) the proceeds of the
Note to make or finance loans to any person, and (ii) that while the Note is outstandin g the
4 Property will be used by state and local governmental entities and by other persons on
2.5 a basis as members of the general public.
(c) The City covenants with the owner that it will not reimburse itself from Note
7 proceeds for any costs paid prior to the date the Note is issued except in compliance with
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1 United States Treasury Regulation No. 1.150-2. This ordinance shall constitute an "official
intent" for purposes of the Regulation..
d. The City covenants with the Owner that it will submit to the ecretar Y of the
Treasury of the United. States, not later than the 15th day of the second calendar month
after the close of the calendar quarter in which the Note is issued, a statement concerning
the Note which contains the information required by Section 149(e) of the Code.
Section 6. The City shall provide such financial information to the Leader as the
Lender may reasonably request.
Section 7. The Mayor, City Clerk and City Treasurer, for and on behalf of the City,
10 are hereby authorized and directed to do any and all things necessary to effect the issuance,
11 execution, and delivery of the Dote, and the performance of all acts of whatever nature
12 necessary to effect and carry out the authority conferred by this Ordinance. The Mayor,
1-3 City Clerk and City Treasurer are hereby further authorized and directed, for and on e .alf
4 of the City, to execute all papers, documents, certificates and other instruments that may be
1 required for the carrying out of such authority or to evidence the exercise thereof;
16 Section . The provisions of this ordinance are here declared to e separable, and
� p
17 if any section, prase or provision shall for any reason be declared to be invalid, such
18 declaration shall not affect the validity of the remainder of the sections, p hrases and
19 provisions.
o Section 9. All ordinances, resolutions and parts thereof in conflict herewith are
1 hereby repealed to the extent of such conflict.
2
PASSED: August 2, 2004
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1 ATTEST:
2
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4 N cy W od, City Clerk
APPROVID:
OWN
y
Willie Hiroo., Vice Mayor
5 APPROVED AS TO FORM:
7
9 Thomas M. Carpenter, City A orney
a. o /!
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