15441ORDINANCE N0, 15,441
AN ORDINANCE AUTHORIZING THE ISSUANCE OF
CAPITAL IMPROVEMENT BONDS; PLEDGING TAX
REVENUES SUFFICIENT TO PAY THE PRINCIPAL OF
AND INTEREST ON THE BONDS; PRESCRIBING OTHER
MATTERS RELATING THERETO; AND DECLARING AN
EMERGENCY.
WHEREAS, by Ordinance No. 15,338 duly adopted by the
Board of Directors on the 18th day of August, 1987, there was
submitted to the qualified electors of the City of Little Rock,
Arkansas, the question of the issuance of bonds in the following
maximum amounts for the following purposes:
$19,675,000 for the purpose of constructing,
reconstructing, repairing, straightening,
and widening of streets in the City,
including curbing, guttering and drainage
improvements;
$900,000 for the purpose of providing
additional drainage improvements in the
City;
$1,000,000 for the purpose of acquiring,
constructing and equipping a new police
substation in the City;
$8,690,000 for the purpose of acquiring,
renovating, constructing and equipping
public park improvements in the City,
including improvements to the Little Rock
Zoo;
$1,000,000 for the purpose of acquiring,
constructing or equipping two fire stations
in the City;
$2,000,000 for the purpose of acquiring,
constructing and equipping a new library
branch in the City;
$950,000 for the purpose of making
improvements to the Arkansas Arts Center;
$1,500,000 for the purpose of acquiring,
constructing and equipping a detention
center in the City;
76
0 -9?
,r--1
$1,500,000 to finance improvements to
Robinson Auditorium and the contiguous
plaza;
$800,000 for the purpose of matching on a
dollar for dollar basis funds provided by
the South Main Improvement District to be
used in constructing, repairing and
installing sidewalks, lighting and
right -of -way improvements in the South Main
Improvement District and for matching on a
dollar for dollar basis funds provided by
individual property owners and used for
restoring historic building facades in the
central business district;
$200,000 for the purpose of making
improvements to the Arkansas Museum of
Science and History in MacArthur Park;
$900,000 for the purpose of making
improvements to streets and sidewalks in the
Hillcrest, Ouapaw Quarter and Capitol Avenue
areas, including street lights and
right -of -way improvements; and
WHEREAS, due notice of the election was given as
required by law and the election was duly held on the 13th day
of October, 1987, at which election the electors approved the
issuance of bonds for each of said purposes; and
WHEREAS, the aggregate maximum amount of bonds
approved was $39,115,000; and
WHEREAS, the results of the election were announced by
the Mayor by a Proclamation duly published as required by law in
a newspaper of bona fide circulation in the City of Little Rock,
Arkansas; and
WHEREAS, pursuant to Ordinance No. 15,370, adopted
November 3, 1987, the City has fixed, established and levied a
tax of 3.434 mills on the dollar of assessed valuation (the
"Special Tax ") which will constitute a continuing annual tax to
be collected in 1988 and each year thereafter so long as
necessary to pay the principal of, interest on, and fees of the
bond registrar and paying agent and alternate paying agent in
connection with the bonds herein authorized; and
WHEREAS, the estimated aggregate cost of the purposes
approved is $39,115,000, but the City expects that a portion of
2
7'7
M
78
the required amount can be provided from investment earnings;
and
WHEREAS, bonds in the principal amount of $33,595,000
were duly advertised for sale, the said bonds to be dated
March 1, 1988, the interest thereon to be payable semiannually
on March 1 and September 1 of each year and with the bonds
maturing or subject to mandatory sinking fund redemption on
March 1 in each of the years 1989 to 2013, inclusive, all as
specified in the notice of sale; and
WHEREAS, said sale was duly held pursuant to
advertisement on the 17th day of February, 1988, and at said
sale Smith Barney, Harris Upham & Co. Incorporated (the
"purchaser ") bid and offered the price of $33,125,874.95 for
bonds bearing interest at the rates set out in Section 2,
resulting in a true (Canadian) interest cost of 7.4121% per
annum, and this being the best bid for said bonds, the bonds
should be sold to the purchaser for said price;
NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF
DIRECTORS OF THE CITY OF LITTLE ROCK, ARKANSAS:
Section 1. That the $33,595,000 of bonds are hereby
sold to the purchaser at the purchase price specified above.
Section 2. That under the authority of the
Constitution and laws of the State of Arkansas, including
particularly Amendment No. 62 to the Constitution of the State
of Arkansas, and the Local Government Bond Act of 1985 (Arkansas
Code of 1987 Annotated § §14- 164 -301, et. seg.), City of Little
Rock, Arkansas Capital Improvement Bonds are hereby authorized
and ordered issued in the total principal amount of $33,595,000.
The proceeds of the bonds, together with investment earnings
thereon, shall be used for the purposes specified in the
recitals of this Ordinance.
The bonds shall be dated March 1, 1988 and the
interest thereon shall be payable semiannually on March 1 and
September 1 of each year commencing September 1, 1988. The
bonds shall be fully registered bonds in the denomination of
$5,000 or an integral multiple thereof. The bonds shall be
initially issued in the denominations and registered in the
names of the registered owners specified by the purchaser.
Principal shall be payable to the registered owners thereof upon
presentation at the corporate trust office of the paying agent.
Each bond shall bear interest from its Interest Commencement
Date until paid at the rate specified below for its maturity.
The "Interest Commencement Date" for each bond shall be (i) the
last interest payment date for the bonds preceding the date of
3
authentication to which interest on the bonds has been paid or
made available for payment, or (ii) if the date of
authentication is an interest payment date to which interest on
the bonds has been paid or made available for payment, the date
of authentication, or (iii) if the date of authentication is
prior to the first interest payment date, the date of the bonds.
Payment of each installment of interest shall be made at the
time and in the manner specified in the bond form in Section 4.
The bonds shall be numbered from R -1 upward in order of issuance
and shall mature on March 1 of each year and bear interest as
follows:
Maturity
Date
Principal
Amount
Interest
Rata
3/1/89
$ 580,000
5.00%
3/1/90
605,000
5.20%
3/1/91
640,000
5.40%
3/1/92
675,000
5.60%
3/1/93
710,000
5.80%
3/1/94
750,000
6.00%
3/1/95
795,000
6.20%
3/1/96
845,000
6.40%
3/1/97
900,000
6.60%
3/1/98
960,000
6.70
0a
3/1/99
1,025,000
6.80;
3/1/00
1,095,000
6.90%
3/1/01
1,170,000
7.00%
3/1/02
1,250,000
7.10%
3/1/03
1,340,000
7.20%
3/1/04
1,435,000
7.30%
3/1/05
1,540,000
7.40%
3/1/06
1,655,000
7.40%
3/1/07
1,780,000
7.50%
3/1/08
1,910,000
7.50%
3/1/09
2,055,000
7.50%
3/1/10
2,210,000
7.50%
3/1/13
7,670,000
7.50%
Union National Bank of Little Rock, Little Rock,
Arkansas, is designated as bond registrar and paying agent.
Chemical Bank, New York, New 'cork, is designated alternate
paying agent.
Section 3. Definitions. In addition to other
definitions herein, capitalized terms used in this Ordinance
shall, unless the context requires a different meaning, have the
meanings specified below.
9
79
80
The term "Code" means the Internal Revenue Code of
1986, as amended.
The term "Debt Service" means the scheduled amount of
interest and amortization of principal payable on the bonds
during the period of computation, excluding amounts scheduled
during such period which relate to principal which has been
retired before the beginning of such period.
The term "Gross Proceeds" means the sum of the
following amounts:
(i) original proceeds, namely, net amounts received
by the City as a result of the sale of the bonds, excluding
original proceeds which become transferred proceeds (determined
in accordance with applicable Regulations) of obligations issued
to refund in whole or in part the bonds;
(ii) investment proceeds, namely, amounts received at
any time by or for the City, such as interest and dividends,
resulting from the investment of any original proceeds (as
referenced in clause (i) above) or investment proceeds (as
referenced in this clause (ii) in Nonpurpose Investments,
increased by any profits and decreased (if necessary, below
zero) by any losses on such investments, excluding investment
proceeds which become transferred proceeds (determined in
accordance with applicable Regulations) of obligations issued to
refund in whole or in part the bonds;
(iii) sinking fund proceeds, namely, amounts, other
than original proceeds or investment proceeds (as referenced in
clauses (i) and (ii) above) of the bonds, which are held in the
Bond Fund and any other fund to the extent that the City
reasonably expects to use such other fund to pay Debt Service on
the bonds;
(iv) Investment Property pledged as security for
payment of Debt Service on the bonds;
(v) amounts, other than as specified in this
definition, used to pay Debt Service on the bonds; and
(vi) amounts received as a result of investing
amounts described in this definition.
The term "Investment Property" means any security (as
said term is defined in Section 165(g)(2)(A) or (B) of the
Code), obligation, annuity contract or investment -type property,
excluding, however, obligations the interest on which is
I
excluded from gross income, under Section 103 of the Code, for
federal income tax purposes.
The term "Diet Proceeds ", when used with reference to
the bonds, means the face amount of the bonds, plus accrued
interest and premium, if any, less original issue discount,
The term "Dlonpurpose Investment" means any Investment
Property which is acquired with the Gross Proceeds of the bonds
and is not acquired in order to carry out the governmental
purpose of the bonds.
The term "Private Business Use" means use directly or
indirectly in a trade or business carried on by a natural person
or in any activity carried on by a person other than a natural
person, excluding, however, use by a state or local governmental
unit and use as a member of the general public.
The term "Purchase Price," for the purpose of
computation of the Yield of the bonds, has the same meaning as
the term "issue price" in Sections 1273(b) and 1274 of the Code,
and, in general, means the initial offering price of the bonds
to the public (not including bond houses and brokers, or similar
persons or organizations acting in the capacity of underwriters
or wholesalers) at which price a substantial amount of the bonds
of each maturity are sold or, if the bonds are privately placed,
the price paid by the first buyer of the bonds or the
acquisition cost of the first buyer.
The term "Regulations" means temporary and permanent
regulations promulgated under the Code.
The term "Yield" means that yield which, when used in
computing the present worth of all payments of principal and
interest on the bonds, produces an amount equal to the Purchase
Price of the bonds, all computed as prescribed in applicable
Regulations.
Section 4. The bonds shall be executed on behalf of
the City by the Mayor and City Clerk by their facsimile
signatures and a facsimile of the corporate seal of the City
shall be reproduced on each bond. The bonds shall be in
substantially the following form:
0
w� w� ■w wi w ■� w� wi w
i
(Face of Bond)
REGISTERED
ienON
w � w� w ■� �w
•
UNITED STATES OF AMERICA
STATE OF ARKANSAS
CITY OF LITTLE ROCK
CAPITAL IMPROVEMENT BOND
Interest Commencement Date:
Maturity Date:
Principal Amount:
Registered Owner:
REGISTERED
Interest Rate:
IP:
FAN
For value received, the City of Little Rock, Arkansas
(the "City "), promises to pay to the registered owner shown
above, or registered assigns, the principal amount shown above
on the Maturity Date identified above and to pay interest
(computed on the basis of a 360 -day year of twelve 30 -day
months) on such principal amount from the Interest Commencement
Date specified above until paid at the Interest Rate per annum
set forth above. Interest is payable on each March 1 and
September 1 after the Interest Commencement Date.
Principal of this bond is payable to the registered
owner, in lawful money of the United States of America, upon
presentation when due at the corporate trust office of Union
National Bank of Little Rock, Little Rock, Arkansas, the bond
registrar and paying agent, in Little Rock, Arkansas. Payment
of each installment of interest shall be made to the person in
whose name this bond is registered on the registration books of
the City maintained by the bond registrar at the end of the
fifteenth day of the month next preceding each interest payment
date (the "Record Date "), irrespective of any transfer or
exchange of this bond subsequent to such Record Date and prior
to such interest payment date. Such interest payments shall be
by check or draft drawn on the paying agent or, at the option of
the registered owner, drawn on Chemical Bank, New York, New
York, the alternate paying agent, and mailed to such registered
owner at the address appearing on such registration books.
This bond is issued under the authority of the
Constitution and laws of the State of Arkansas, including
particularly Amendment 62 to the Arkansas Constitution and the
Local Government Bond Act of 1985. It shall not be valid unless
the Certificate of Authentication shall have been signed by the
bond registrar.
7
•
This bond is one of an issue of bonds of the City
designated "Capital Improvement Bonds," dated March 1, 1988 (the
"bonds ") in the principal amount of $33,595,000.
(SEE THE REVERSE SIDE FOR ADDITIONAL PROVISIONS WHICH
HAVE THE SAME EFFECT AS IF FULLY SET FORTH IN THIS PLACE. )
IN WITNESS WHEREOF, the City has caused this bond to
be executed by its Mayor and City Clerk by their facsimile
signatures and a facsimile of its corporate seal to be
reproduced hereon.
CITY OF LITTLE ROCK, ARKANSAS
(facsimile signature)
Mayor
(facsimile signature)
City Clerk
(FACSIMILE SEAL)
CERTIFICATE OF AUTHENTICATION
This bond is one of the bonds described in the within
mentioned Ordinance and is one of the Capital Improvement Bonds,
dated March 1, 1988 of the City of Little Rock, Arkansas.
UNION NATIONAL BANK OF
LITTLE ROCK
Little Rock, Arkansas
Bond Registrar
By
Authorized Officer
8
83
(Back of Bond)
CITi' OF LITTLE ROCK, ARKANSAS
CAPITAL IMPROVEMENT BOND
ADDITIONAL PROVISIONS
M
This bond and the issue of which it forms a part are
limited tax general obligations of the City, payable from the
proceeds of a continuing annual tax of 3.434 mills on the dollar
of the assessed valuation of the taxable real and personal
property in the City (the "Special Tax ") levied by the Board of
Directors under the authority of Amendment No. 62 to the
Constitution of the State of Arkansas. The City hereby pledges
its full faith, credit and taxing power, including the said
Special Tax, for the payment of this bond and the issue of which
it forms a part. The Special Tay, shall be collected with the
property taxes payable in 1988 and continuing annually
thereafter until all of the bonds and interest thereon have been
paid in full. Because of the effect of Amendment 59 to the
Arkansas Constitution the rate of the Special Tax applicable to
personal property and the property of public utilities and
regulated carriers may be less than 3.434 mills on the dollar.
The bonds are not secured by any lien on or security
interest in any physical properties.
The bonds are issuable only in the form of fully
registered bonds in denominations of $5,000 or an integral
multiple thereof. The City, the bond registrar, the paying
agent and the alternate paying agent may deem and treat the
registered owner hereof as the absolute owner of this bond for
the purpose of receiving payment of or on account of principal
hereof and interest due hereon and for all other purposes, and
shall not be affected by any notice to the contrary.
This bond is transferable, in whole or in part, only
upon delivery to the bond registrar of the bond, accompanied by
a written instrument of transfer in substantially the form
endorsed hereon, duly executed by the registered owner or his
attorney -in -fact or legal representative. Upon such transfer,
the bond registrar shall enter the transfer of ownership in the
registration books and shall authenticate and deliver in the
name or names of the new registered owner or owners a new fully
registered bond or bonds of authorized denominations of the same
maturity and interest rate for the aggregate principal amount of
the bond transferred at the earliest practicable time. There
shall be no charge to the transferor or transferee for any
transfer, except an amount or amounts sufficient to reimburse
the City and the bond registrar for any tax, fee or other
9
governmental charge required to
transfer. The City and the bond
to transfer any bond which has
whole or in part.
85-
be paid with respect to such
registrar shall not be required
been called for redemption in
The bonds maturing on and after March 1, 1999, are
subject to redemption prior to maturity at the option of the
City, in whole or in part, in inverse order of maturities (less
than all of the bonds of a single maturity to be selected by lot
by the paying agent in such manner as it may determine), on any
interest payment date on or after March 1, 1998, at a redemption
price equal to 100% of the principal amount thereof plus accrued
interest to the date of redemption.
The bonds maturing March 1, 2013, are also subject to
redemption in part (bonds or portions to be redeemed to be
selected by lot by the paying agent in such manner as it may
determine), on March 1, 2011, and March 1, 2012, at the
principal amount thereof plus accrued interest to the date of
redemption from mandatory sinking fund installments which are
required to be made in amounts sufficient to redeem on March 1
of each year the principal amount of such bonds specified for
each of the years shown below:
Year Amount
2011 $2,375,000
2012 2,550,000
2013 (maturity) 2,745,000
The City shall receive a credit against mandatory
sinking fund redemption requirements equal to 100% of the
principal amount of any Bonds maturing March 1, 2013 which shall
have been either (i) delivered to the paying agent not less than
45 days prior to any mandatory sinking fund redemption date, for
cancellation and discharge of mandatory sinking fund redemption
requirements, or (ii) redeemed other than in accordance with
mandatory sinking fund redemption requirements.
Bonds of denominations greater than $5,000 may be
redeemed partially in the amount of $5,000 or any integral
multiple thereof.
Notice of redemption identifying the bonds or portions
thereof to be redeemed shall be given by the paying agent, not
less than thirty nor more than sixty days prior to the date
fixed for redemption, by mailing a copy of the redemption notice
by first class mail, postage prepaid, to all registered owners
of bonds to be redeemed. Failure to mail an appropriate notice
or any such notice to one or more registered owners of bonds to
IM
0
M
be redeemed shall not affect the validity of the proceedings for
redemption of other bonds as to which notice of redemption is
duly given and in proper and timely fashion. All such bonds
thus called for redemption shall cease to bear interest on and
after the date fixed for redemption, provided funds for their
redemption are on deposit with the paying agent at that time.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all
acts conditions and things required to exist, happen and be
performed precedent to and in the issuance of this bond have
existed, have happened and have been performed in due time, form
and manner as required by law; that the indebtedness represented
by this bond and the issue of which it forms a part, does not
exceed any constitutional or statutory limitation; and that a
tax sufficient to pay the bonds has been duly levied in
accordance with Amendment No. 62 to the Constitution of the
State of Arkansas and made payable annually until all of the
bonds and interest thereon have been fully paid and discharged.
11
ABBREVIATIONS
87
The following abbreviations, when used in the
inscription on the face of the within bond, shall be construed
as though they were written out in full according to applicable
laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
UNIF TRANS MIN ACT - as Custodian for
(Gust) (Minor)
under the Uniform Transfers to Minors
Act of
(State)
Additional abbreviations may also be used though not in the list
above.
12
TRANSFER
Leo 9
FOR VALUE RECEIVED, the undersigned Transferor or
Transferors hereby sell, assign and transfer the within bond and
all rights thereunto to the Transferee or Transferees whose
name(s), address and social security or federal employer
identification number are shown below, and irrevocably
constitute and appoint as attorney to
transfer the within bond on the books kept for registration
thereof, with full power of substitution in the premises.
Name of Transferee(s):
Address of Transferee(s) (one address only):
Social Security or Federal Employer Identification No. of
Transferee(s) (one number only):
Dated:
Transferor
Transferor
NOTICE: No transfer will be issued in the name of the
Transferee(s), unless the signature(s) to this assignment
correspond with the name(s) appearing upon the face of the
within bond in every particular, without alteration or
enlargement or any change whatever and the Social Security or
Federal Employer Identification Number of the Transferee is
supplied.
Signature(s) of Transferor(s) Guaranteed:
NOTICE: Signature(s) must be guaranteed by a member firm of the
National Association of Securities Dealers or a commercial bank
or a trust company.
13
0 0
M M M M
89
Section 5. That in order to pal the bonds as they
mature or are called for redemption prior to maturity, with
interest thereon, there is hereby pledged all of the proceeds
derived from the Special Tax levied pursuant to Ordinance No.
15,370, passed and adopted November 3, 1987 of 3.434 mills on
each dollar of assessed valuation to be collected with the tares
in the year 1988, which Special Tax shall continue annually
thereafter until all of the bonds authorized hereby and interest
thereon have been paid in full. The City covenants and agrees
that all revenues from said Special Tax shall be accounted for
separately as a special fund on the books of the City which is
hereby created and designated "1988 Bond Retirement Fund"
(hereinafter called "Bond Fund "). Uninvested Bond Fund moneys
shall be deposited in such depository or depositories as may be
designated from time to time by the Board of Directors. All
such deposits shall either be insured by the Federal Deposit
Insurance Corporation or secured by direct or fully guaranteed
obligations of the United States of America. Collections of the
Special Tax shall be used solely for the payment of the
principal of and interest on the bonds, fees of the bond
registrar, paying agent and alternate paling agent, and costs of
redemption, either at maturity or at redemption prior to
maturity. Moneys held for the credit of the Bond Fund may be
invested and investment income used as provided in Section 14.
Section 6. That for the prompt payment of the bonds
of this issue with interest, the City pledges its full faith,
credit and taring power, including a sufficient amount of the
tax described in Section 5.
Section 7. That in order to pay the principal of and
interest on the bonds as they mature and to pay mandatory
sinking fund installments for the partial redemption of term
bonds, there are hereby appropriated out of the proceeds of the
above referred to Special Tax, and if said proceeds be not
sufficient, then out of the general revenues of the City, the
sums necessary to promptly pay the principal of and interest on
the bonds as they mature or are subject to mandatory sinking
fund redemption according to the following schedule:
14
M
M M
M
Section B. That the bonds of this issue shall be
callable for payment prior to maturity in accordance with the
terms set out in the bond form in Section 4 of this Ordinance.
Section 9. That the Finance Director of the City is
hereby ordered and directed to place on deposit with the paying
agent, at least two (2) business days before the maturity,
redemption or interest payment date of any bond issued
hereunder, an amount from the funds herein appropriated equal to
the amount of such bond or interest, for the sole purpose of
paying the same, together with the customary paying agent's
fees. This instruction to the Finance Director is irrevocable
and may be enforced by mandamus.
Section 10. The bond registrar shall immediately
notify the City of each default in the payment of principal of
or interest on any bond and of any other default under the
15
•,
Principal Due
12 months
at Maturity or
Ended
Upon Sinking
Interest
March 1
Fund Redemption
March 1
September
1
Total
1988
$1,185,767.50
$1,185,767.50
1989
$ 580,000
$1,185,767.50
1,171,267.50
$2,937,035.00
1990
605,000
1,171,267.50
1,155,537.50
2,931,805.00
1991
640,000
1,155,537.50
1,138,257.50
2,933,795.00
1992
675,000
1,138,257.50
1,119,357.50
2,932,615.00
1993
710,000
1,119,357.50
1,098,767.50
2,928,125.00
1994
750,000
1,098,767.50
1,076,267.50
2,925,035.00
1995
795,000
1,076,267.50
1,051,622.50
2,922,890.00
1996
845,000
1,051,622.50
1,024,582.50
2,921,205.00
1997
900,000
1,024,582.50
994,882.50
2,919,465.00
1998
960,000
994,882.50
962,722.50
2,917,605.00
1999
1,025,000
962,722.50
927,872.50
2,915,595.00
2000
1,095,000
927,872.50
890,095.00
2,912,967.50
2001
1,170,000
890,095.00
849,145.00
2,909,240.00
2002
1,250,000
849,145.00
804,770.00
2,903,915.00
2003
1,340,000
804,770.00
756,530.00
2,901,300.00
2004
1,435,000
756,530.00
704,152.50
2,895,682.50
2005
1,540,000
704,152.50
647,172.50
2,891,325.00
2006
1,655,000
647,172.50
585,937.50
2,888,110.00
2007
1,780,000
585,937.50
519,187.50
2,885,125.00
2008
1,910,000
519,187.50
447,562.50
2,876,750.00
2009
2,055,000
447,562.50
370,500.00
2,873,062.50
2010
2,210,000
370,500.00
287,625.00
2,580,500.00
2011
2,375,000
287,625.00
198,562.50
2,950,250.00
2012
2,550,000
198,562.50
102,937.50
2,947,125.00
2013
2,745,000
102,937.50
2,950,875.00
Section B. That the bonds of this issue shall be
callable for payment prior to maturity in accordance with the
terms set out in the bond form in Section 4 of this Ordinance.
Section 9. That the Finance Director of the City is
hereby ordered and directed to place on deposit with the paying
agent, at least two (2) business days before the maturity,
redemption or interest payment date of any bond issued
hereunder, an amount from the funds herein appropriated equal to
the amount of such bond or interest, for the sole purpose of
paying the same, together with the customary paying agent's
fees. This instruction to the Finance Director is irrevocable
and may be enforced by mandamus.
Section 10. The bond registrar shall immediately
notify the City of each default in the payment of principal of
or interest on any bond and of any other default under the
15
•,
L-7
M M M M
authorizing ordinance of which the bond registrar has knowledge.
Any default in the payment of the principal of or interest on
any bond, and any default in the performance of any other
covenant herein which continues for 30 days after written notice
thereof is given to the City by the bond registrar shall
constitute an event of def .ilt. The bond registrar shall notify
the registered owners of '-he bonds of each event of default by
first class mail. The owners of not less than 10% in principal
amount of the bonds then outstanding may by proper suit compel
the performance of the duties of the officials of the City under
the Constitution and laws of the State of Arkansas and under
this Ordinance and protect and enforce the rights of the owners
by instituting appropriate proceedings at law or in equity or by
other action deemed necessary or desirable. If any default in
the payment of principal or interest continues for 30 days the
owners of not less than 50% in principal amount of the then
outstanding bonds may declare all outstanding bonds immediately
due and payable together with accrued interest thereon.
No one or more owners of the bonds shall have any
right in any manner by his or their action to affect, disturb or
prejudice the security of this Ordinance, or to enforce any
right hereunder except in the manner provided herein. All
proceedings at law or in equity shall be instituted, had and
maintained in the manner provided herein and for the benefit of
all owners of outstanding bonds. Any individual rights of
action are restricted by this Ordinance to the rights and
remedies herein provided. clothing shall, however, affect or
impair the right of an owner to enforce the payment of the
principal of and interest on any bond at and after the maturity
thereof.
No delay or omission of any owner of a bond to
exercise any right or power accrued upon any default shall
impair any such right or power or be construed to be a waiver of
any such default or acquiescence therein, and every power and
remedy given to the owners of the bonds may be exercised from
time to time and as often as may be deemed expedient.
The owners of not less than 500% in principal amount of
the bonds then outstanding shall have the right, during the
continuance of an event of default, to direct the time, method
and place of conducting any proceedings for any remedy of
bondholders, and may waive any default which shall have been
remedied before the entry of final judgment or decree in any
suit, action or proceeding or before the completion of the
enforcement of any other remedy. No such waiver shall extend to
or affect any other existing or subsequent default or defaults
or impair any rights or remedies consequent thereon.
16
01
60M
Section 11. The bond registrar, paying agent and
alternate paying agent shall each be responsible only for the
exercise of good faith and reasonable prudence in the execution
of its trust. The recitals in this Ordinance and in the face of
the bonds are the recitals of the City and not of the bond
registrar, paying agent and alternate paying agent.
The bond registrar and paving agent shall at all times
be a single bank with principal offices located in the City and
having capital and surplus of at least $25,000,000. The
alternate paying agent, if any, shall be a bank or trust company
whose principal corporate offices are located in New York., New
York. In rase of resignation or removal of either agent, the
successor must have the same qualifications. If an incumbent
agent fails to maintain the qualifications specified in this
paragraph, such failure shall i so facto be deemed a
resignation.
The bond registrar will maintain books for the
registration and transfer of ownership of the bonds. The
principal of all bonds, payable either at maturity or upon
redemption prior to maturity, shall be paid upon surrender of
the bond at the corporate trust office of the paying agent.
Interest shall be paid by check or draft drawn on the paying
agent or, at the option of a registered owner, drawn on the
alternate paying agent, and mailed to each registered owner at
the address shown on the registration books.
The bond registrar and paying agent may resign by
giving notice in writing to the City Clerk. Such resignation
shall be effective upon the appointment of a successor bond
registrar and paying agent_ by the City and acceptance of
appointment by the successor. If the City fails to appoint a
successor within 30 days of receiving notice of resignation, the
bond registrar and paying agent may apply to a court of
competent jurisdiction for appointment of a successor.
The alternate paying agent may resign by giving notice
in writing to the bond registrar and paying agent. Such
resignation shall be effective on the date specified in the
notice, but not less than 60 days after the giving of notice.
The registered owners of a majority in principal amount of
outstanding bonds may, but shall not be required to, appoint a
successor alternate paying agent.
The owners of a majority in principal amount of
outstanding bonds may at any time, with or without cause, remove
either the bond registrar and paying agent or the alternate
paying agent and appoint a successor. The City shall give
notice in writing to the owners of outstanding bonds of any
17
resignation, removal or appointment of a successor bond
registrar and paying agent or alternate paying agent.
The bond registrar and paying agent and the alternate
paying agent shall each be entitled to reasonable compensation
for its services hereunder.
Section 12. The original bond registrar and paying
agent and the original alternate paying agent and any successor
to either shall file a written acceptance and agreement to
execute the trust imposed upon it or them by this Ordinance, but
only upon the terms and conditions set forth in this Ordinance,
and subject to the provisions of this Ordinance, to all of which
the respective holders of the bonds agree. Such written
acceptance shall be filed with the City Clerk and a copy therein
shall be placed in the bond transcript. Any successor agent
shall have all the powers herein granted to the original agent.
Section 13. That the bonds herein authorized shall be
delivered to the bond registrar, which shall authenticate and
deliver them to the purchaser, or order, upon payment in Federal
Reserve funds of an amount equal to the purchase price specified
in the purchaser' bid, less the good faith deposit of $671,900,
plus accrued interest from March 1, 1988 to date of delivery.
(1) From the proceeds of the sale of the bonds, there
shall be deposited in the Bond Fund the accrued interest.
(2) The balance of the proceeds shall be deposited in
an account designated 111988 Capital Improvement Fund"
(hereinafter called "Improvement Fund ") and shall be used solely
for the purposes hereinabove specified, for necessary expenses
incidental thereto, and for the expenses of the issuance of the
bonds. To the extent other moneys are not available for the
purpose, Improvement Fund moneys will also be used to pay
interest on the bonds due September 1, 1988.
Section 14, (a) Moneys held for the credit of the
Bond Fund shall, as nearly as may be practicable, be
continuously invested and re- invested by the City in direct
obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States
government, which shall mature or which shall be subject to
redemption by the holder thereof at the option of the holder not
later than the time the funds will be needed as determined by
the City, and in any event not more than ten (10) years after
the date of acquisition. Moneys held for the credit of the
Improvement Fund may be invested and reinvested by the City in
direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United
M
93
•
94
States government, having maturity dates or subject to
redemption by the holder on or prior to the date the funds will
be needed as determined by the City.
(b) Moneys held for the credit of the Improvement
Fund or Bond Fund and not invested shall be deposited in a
depository or depositories selected by the City. All such bank
deposits, including those in the form of certificates of
deposit, and any interest to be paid on accounts or certificates
shall at all times be either insured by the Federal Deposit
Insurance Corporation, or secured by a valid and perfected
pledge of collateral consisting of direct or fully guaranteed
obligations of the United States of America.
(c) Interest earned by investments or deposits of
either the Bond Fund or the Improvement Fund may be used by the
City for any municipal purpose.
Section 15. That the terms of the bonds and of this
Ordinance shall constitute a contract between the City and the
holders of the bonds. Except as provided below, no variation or
change in the undertakings herein set forth shall be made while
any of these bonds are outstanding. The owners of not less than
75% in aggregate principal amount of the bonds then outstanding
have the right, from time to time, to consent to the adoption by
the City of ordinances modifying any of the terms or provisions
contained in the bonds or this Ordinance; provided, however,
there shall not be permitted (a) any extension of the maturity
of the principal of or interest on any bond, or (b) a reduction
in the principal amount of any bond or the rate of interest
thereon, or (c) the creation of any additional pledge on the
revenues pledged to the bonds other than as authorized in the
original authorizing ordinance, or (d) a privilege or priority
of any bond or bonds over any other bond or bonds, or (e) a
reduction in the aggregate principal amount of the bonds
required for such consent.
Section 16. Tax Covenants. (a) The City covenants
that it will not take any action, or fail to take any action, if
any such action or failure to take action would adversely affect
the exclusion from gross income of the interest on the bonds
under Section 103 of the Code. The City will not directly or
indirectly use or permit the use of any proceeds of the bonds or
any other funds of the City, or take or omit to take any action
that would cause the bonds to be "arbitrage bonds" within the
meaning of Section 148(a) of the Code. To that end, the City
will comply with all requirements of Section 148 of the Code to
the extent applicable to the bonds.
19
(b) Private Business Use Limitation. The City shall
assure that not in excess of five percent (5%) of the Net
Proceeds of the bonds is used, directly or indirectly, for (i)
Private Business Uses, or (ii) to make or finance a loan (other
than loans constituting Nonpurpose Investments) to persons other
than state or local government units.
(c) Federal Guarantee Prohibition. The City shall not
take any action or permit or suffer any action to be taken if
the result of the same would be to cause the bonds to be
"federally guaranteed" within the meaning of Section 149(b) of
the Code and Regulations promulgated thereunder.
(d) Information Reporting. The Mayor of the City
shall, not later than the 15th day of the second calendar month
after the close of the calendar quarter in which the bonds are
issued, submit to the Secretary of the Treasury a statement
concerning the bonds which will. satisfy the requirements of
paragraph (2) of Section 149(e) of the Code and applicable
Regulations.
(e) Rebate Fund. There is hereby created on the
books of the City a special fund to be named the "Rebate Fund"
to be accounted for separately. Within the Rebate Fund there
shall be two accounts, an "Excess Earnings Account" and an
"Income Account." Not more than 30 days following the end of
each bond year (defined as a 12 -month period beginning March 1)
and within 60 days after retirement of all of the bonds, the
City shall determine, or cause to be determined, the Excess
Earnings Amount (defined below) as of the most recent
calculation date (defined as the last day of each bond year and
the date on which the last bond is retired) and the applicable
Income Amount (defined below). Following such determination, the
City shall promptly take one or more of the following actions:
(i) if the amount on deposit as of such calculation
date in the Excess Earnings Account is less that the Excess
Earnings Amount as of such calculation date, deposit to the
Excess Earnings Account moneys in an amount calculated by
the City as being sufficient to cause the amount on deposit
in the Excess Earnings Account to be equal to the Excess
Earnings Amount as of such calculation date; or
(ii) if the amount on deposit in the Excess Earnings
Account is greater than the Excess Earnings Amount as of
such calculation date, transfer the amount of such excess
to the Bond Fund: and
(iii) deposit the Income Amount to the Income Account.
20
95
96
In order to make the deposits required by clauses (i) and (iii)
above, the City shall promptly transfer moneys from any fund,
including the Bond Fund, to the appropriate account of the
Rebate Fund. 11.11 income earned on amounts on deposit in the
Excess Earnings Account shall be deposited, as received, to the
Income Account. All income earned on amounts on deposit in the
Income Account shall be retained in the Income Account. In
making the determination of the Excess Earnings Amount, the
Income Amount and the Rebate Amount (defined below), the City
may rely upon an opinion of nationally recognized bond counsel,
or certified public accountants nationally recognized as having
expertise with respect to such matters, to the effect that the
method of calculation utilized by the City complies with the
applicable provisions of the Code and the Regulations.
At any relevant date, if then required by reason of
Section 148(f) of the Code, the City shall remit to the United
States Treasury, in such manner as may be required or permitted
by the Code and the Regulations (including, without limitation,
the information return filed pursuant to Section 149(c) of the
Code), such amounts as are deposited in the Rebate Fund so that
the interest on the bonds will not be includable in gross income
for federal income tax purposes.
Records of the determinations with respect to the
Rebate Amount and the Rebate Fund shall be retained by the City
until six years after the retirement of all of the bonds.
As used in this subsection (e) :
The term "Excess Earnings Amount" means, as of any
calculation date, (a) the excess of (i) the aggregate amount
earned (computed in accordance with the rules of Section
1.103- 15AT(d)(2) of the Regulations) from the issue date to such
calculation date on all Nonpurpose Investments (other than
Nonpurpose Investments held in the Rebate Fund) acquired with
the Gross Proceeds of the bonds over (ii) the amount that would
have been earned from the issue date to such Calculation Date if
such Dlonpurpose Investments had been invested at a rate equal to
the actual 'field (calculated in accordance with Section
1.103- 15AT(d)(2)(ii) of the Regulations) on the bonds from the
issue date to such calculation date less (b) any Excess Earnings
Amount previously paid to the United States of America as part
of the Rebate Amount; provided that if the aggregate gross
earnings (including investment income on such earnings) on
Dlonpurpose Investments acquired with the Gross Proceeds of the
bonds allocated to the Bond Fund do not exceed $100,000 in a
bond year, such gross earnings during such bond year shall not
be taken into account in calculating such Excess Earnings
Amount.
21
M
• •
v v -
97
The term "Income F.mount" means, in the case of any
bond year as of the close of which the Excess Earnings Amount is
positive, that amount of income which is attributable to the
lesser of (a) the Excess Earnings Amount as of the calculation
date for that bond year, or (b) the amount by which such Excess
Earnings Amount as of such calculation date in question exceeds
the Excess Earnings Amount as of the calculation date for the
preceding bond year, but in either case only to the extent that
such income is earned from the close of the bond year in
question to the date of the next transfer of amounts to the
Excess Earnings Account required by this subsection.
The term "Rebate Amount" means, as of any calculation
date, the sum of (a) the Excess Earnings Amount plus (b) all
amounts on deposit in the Income Account of the Rebate Fund,
Section 17. Defeasance. When all of the bonds shall
have been paid or deemed paid, the pledge in favor of the bonds
shall be discharged and satisfied. A bond shall be deemed paid
when there shall have been deposited in trust with the bond
registrar and paying agent, as escrow agent under an escrow
deposit agreement requiring the escrow agent to apply the
proceeds of the deposit to pay the principal of and interest on
the bond as due at maturity or upon redemption prior to
maturity, moneys or Government Securities sufficient to pay when
due the principal of and interest on the bond. If the principal
of the bond is to become due by redemption prior to maturity,
notice of such redemption must have been duly given or provided
for. "Government Securities" shall mean direct or fully
guaranteed obligations of the United States of America,
noncallable, maturing on or prior to the maturity or redemption
date of the Bond. In determining the sufficiency of a deposit
there shall be considered the principal amount of such
Government Securities and interest to be earned thereon until
their maturity.
Section 18. That the provisions of this Ordinance are
separable and in the event that any section or part hereof shall
be held to be invalid, such invalidity shall not affect the
remainder of this Ordinance.
Section 19. That all ordinances and resolutions and
parts thereof in conflict herewith are hereby repealed to the
extent of such conflict.
Section 20. That this Ordinance shall not create any
right of any character and no right of any character shall arise
under or pursuant to it until the bonds authorized by this
Ordinance shall be issued and delivered.
22
w w w w w � w ■� �■ w� w w w w
Section 21. That it is hereby ascertained and
declared that there is an immediate and urgent need for the
construction or acquisition of the various municipal projects to
be financed by the issuance of the bonds above referred to in
order to protect the health, lives and property of the
inhabitants of the City. It is, therefore, declared that an
emergency exists and this Ordinance, being necessary for the
preservation of public peace, health and safety, shall take
effect and be in force .immediatel7 upon and after its adoption.
ADOPTED: February_l7_, 1988.
APPROVED:
ATTEST:
Celz By
. y r Lot ie ShacJ el£ord
City lerk Sane zech
23
90