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16409• • c07 ORDINANCE NO. 16,409 AN ORDINANCE AUTHORIZING THE TRANSFER OF THE REVENUES FROM THE CITY OF LITTLE ROCK, ARKANSAS' WASTE DISPOSAL SYSTEM FROM THE CITY'S GENERAL FUND TO THE WASTE DISPOSAL REVENUE FUND; AUTHORIZING THE CONSTRUCTION OF BETTERMENTS AND IMPROVEMENTS TO THE WASTE DISPOSAL SYSTEM OF THE CITY; AUTHORIZING THE ISSUANCE AND SALE OF WASTE DISPOSAL REVENUE BONDS; PROVIDING FOR THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON THE BONDS; PRESCRIBING OTHER MATTERS RELATING THERETO; AND DECLARING AN EMERGENCY. WHEREAS, the City of Little Rock, Arkansas (the "City ") city of the first class, owns and operates a waste collection disposal system (the "System ") and budgeted appropriations for System in Ordinance No. 16,331; and , a and the WHEREAS, revenues derived from operation of the System are currently deposited into the City's General Fund; and WHEREAS, in order to finance construction of betterments and improvements to the System it is necessary to establish a Waste Disposal Revenue Fund and to deposit revenues from waste collection and disposal fees into the Waste Disposal Revenue Fund instead of the City's General Fund; and WHEREAS, the Board of Directors of the City (the "Board ") has determined that betterments and improvements to the System are necessary in order to comply with federal and State mandates and to make the services thereof adequate for the needs of the City and has caused to be prepared by The Mehlburger Firm, Inc., R. W. Beck and Associates, and Woodward -Clyde Consultants, qualified consulting engineers, a report, plans and specifications and estimates of cost for the proposed extensions, betterments and improvements to the System, all as described in detail in the plans and specifications (the "improvements "), which plans and specifications have been examined and approved by the Board and a copy of which plans and specifications are on file in the office of the Director of Public Works where they may be inspected by any interested person; and WHEREAS, there is no outstanding indebtedness of the System; and WHEREAS, the total estimated cost of the initial improvements is approximately $15,471,809. -a 4 M 2 ©8 WHEREAS, the estimated cost of the improvements and authorizing and issuing bonds to be financed by the City at this time is approximately $17,500,000; and WHEREAS, the most feasible approach for the City to accomplish the improvements together with other attendant costs is by the issuance of Waste Disposal Revenue Bonds, Series 1993, in the principal amount of not to exceed $17,500,000 (the "Bonds "); and NOW, THEREFORE, BE IT ORDAINED by the Board of Directors of the City of Little Rock, Arkansas: Section I. Transfer from General Fund. The Finance Department of the City of Little Rock is hereby authorized and directed to transfer the remaining unspent appropriations related to the System from the General Fund organizations contained in Schedule 1 to Ordinance No. 16,331 to the Waste Disposal Revenue Fund established pursuant to Section 3 of this Ordinance at such time as the related System revenues are required to be deposited into the Waste Disposal Revenue Fund by the terms of this Ordinance. Section 2. Transfer of Assets. The Finance Department of the City of Little Rock is hereby authorized to transfer such City assets to the new Waste Disposal Revenue Fund as are used by the System operations and that should be recorded in the Waste Disposal Revenue Fund in order to comply with generally accepted government accounting principles. Section 3. Establishment of Waste Disposal Revenue Fund. There is hereby established a Waste Disposal Revenue Fund. All revenues derived from the operation of the System shall no longer be deposited in the City's General Fund but shall be deposited into the Waste Disposal Revenue Fund created by this ordinance and dispersed as set forth herein. Section 4. Accomplishment of improvements. The improvements shall be accomplished. The Mayor and City Clerk are hereby authorized to take or cause to be taken all action necessary to accomplish the improvements and to execute all required contracts and documents. Section 5. Statutory Authority . Under the authority of the Constitution and laws of the State of Arkansas, including particularly Amendment 65 to the Constitution and Arkansas Code Annotated H 14- 232 -101 to 115 (the "Act ") and applicable decisions of the Supreme Court of the State of Arkansas, the City of Little Rock, Arkansas Waste Disposal Revenue Bonds, Series 1993, are hereby authorized and ordered issued in the principal amount of up to $17,500,000 for the purpose of accomplishing the improvements, paying necessary expenses incidental thereto and to the authorization and issuance of the Bonds. section 6. The Bonds. The Bonds shall mature on May 1 in the years 1995 to 2013. The Bonds will be sold pursuant to a Preliminary Official Statement and Official Notice of Sale, which are hereby approved, on Wednesday, May 5, 1993 at 11:00 a.m. After the sale the Bonds will be awarded to the lowest bidder and the principal amounts and interest rates for each maturity of Bonds will be confirmed at the meeting of the Board of Directors on May 11, 1993. The Bonds shall be issuable only as fully registered Bonds without coupons in the denomination of $5,000 or any integral multiple thereof. Unless the City shall otherwise direct, the Bonds shall be numbered from 1 upward in order of issuance. Each bond shall have a CUSIP number. Payment of each installment of interest shall be made to the person in whose name the Bond is registered on the registration books of the City maintained by the Trustee and Paying Agent (the "Trustee "), at the close of business on the fifteenth day of the month (whether or not a business day) next preceding each interest payment date (the "Record Date "), irrespective of any transfer or exchange of any such Bond subsequent to such Record Date and prior to such interest payment date. Only such Bonds as shall have endorsed thereon a Certificate of Authentication substantially in the form set forth in Section 6 hereof duly executed by the Trustee shall be entitled to any right or benefit under this Ordinance. No Bonds shall be valid and obligatory for any purpose unless and until such Certificate of Authentication shall have been duly executed by the Trustee, and such certificate of the Trustee upon any such Bonds shall be conclusive evidence that such Bond has been authenticated and delivered under this Ordinance. The Trustee's Certificate of Authentication on any Bond shall be deemed to have been executed if signed by an authorized officer of the Trustee, but it shall not be necessary that the same officer sign the Certificate of Authentication on all of the Bonds issued hereunder. In case any Bond issued hereunder shall become mutilated or be destroyed or lost, the City shall, if not then prohibited by law, cause to be executed and the Trustee may authenticate and deliver a new Bond of like date, number, maturity and tenor in exchange and substitution for and upon cancellation of such mutilated Bond, or in lieu of and in substitution for such Bond destroyed or lost, upon the holder's paying the reasonable expenses and charges of the City and Trustee in connection therewith, and, in the case of a Bond destroyed or lost, his filing with the Trustee evidence satisfactory to it that such Bonds were destroyed or lost, and of his ownership thereof, and furnishing the City and Trustee with indemnity satisfactory to them. The Trustee is hereby authorized to authenticate any such new Bond. In the event any such Bond shall have matured, instead of issuing a new Bond, the City may pay M M 0 0 the same without the surrender thereof. Upon the issuance of a new Bond under this Section 6, the City may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustees) connected therewith. The City shall cause books to be kept for the registration and for the transfer of the Bonds as provided herein and in the Bonds. The Trustee shall act as the Bond registrar. Each Bond is transferable by the registered owner thereof or by his attorney duly authorized in writing at the principal office of the Trustee. Upon such transfer a new fully registered Bond or Bonds of the same maturity, of authorized denomination or denominations, for the same aggregate principal amount will be issued to the transferee in exchange therefor. No charge shall be made to any owner of any Bond for the privilege of transfer or exchange, but any owner of any Bond requesting any such transfer or exchange shall pay any tax or other governmental charge required to be paid with respect thereto. Except as otherwise provided in the immediately preceding sentence, the cost of preparing each new Bond upon each exchange or transfer and any other expenses of the City or the Trustee incurred in connection therewith shall be paid by the City. The City shall not be required (i) to issue, transfer or exchange any Bond during a period beginning at the opening of business 15 days before any selection of Bonds of that maturity for redemption and ending at the close of business on the day of the first mailing of the relevant notice of redemption, or (ii) to transfer or exchange any Bonds selected for redemption in whole or in part. The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal or premium, if any, or interest of any Bond shall be made only to or upon the order of the registered owner thereof or his legal representative, but such registration may be changed as hereinabove provided. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. Neither the City nor the Trustee shall be affected by any notice to the contrary. In any case where the date of maturity of interest on or principal of the Bonds or the date fixed for redemption of any Bonds shall be Saturday or Sunday or shall be in the State of Arkansas a legal holiday or a day on which banking institutions are authorized by law to close, then payment of interest or principal (and premium, if any) need not be made on such date but may be made on the next succeeding business day not a Saturday or Sunday or a legal holiday or a day upon which banking institutions are authorized by law to close with the same force and effect as if 4 made on the date of maturity or the date fixed for redemption, and no interest shall accrue for the period after the date of maturity or date fixed for redemption. Section 7. Security for Bonds. The Bonds shall be executed on behalf of the City by the manual or facsimile signatures of the Mayor and City Clerk and shall have impressed, imprinted, engraved or lithographed thereon the seal of the City. The Bonds, together with interest thereon, are secured by and are payable solely from revenues derived from the System. System revenues are pledged and mortgaged for the equal and ratable payment of the Bonds. The Bonds and interest thereon shall not constitute an indebtedness of the City within any constitutional or statutory limitation. Section S. Form of Bonds. The Bonds and the Trustee's Certificate of Authentication shall be in substantially the following form, which will be finalized after the May 5, 1993 public sale, and the Mayor and City Clerk are hereby expressly authorized and directed to make all recitals contained therein: 5 REGISTERED No. (Form of Bond) UNITED STATE OF AMERICA STATE OF ARKANSAS COUNTY OF PULASKI CITY OF LITTLE ROCK WASTE DISPOSAL REVENUE BOND, SERIES 1993 0 M M Interest Rate: Maturity Date: Dated Date: Registered Owner: Principal Amount: Dollars ($ ) CUSIP No. KNOW ALL MEN BY THESE PRESENTS: That the City of Little Rock, County of Pulaski, State of Arkansas, (the "City ") , for value but solely from the source as otherwise, to the Registered OF received, hereby promises to pay, hereinafter provided and not mer shown above, or registered assigns, upon the presentation and surrender hereof at the principal corporate office of Arkansas, or its successor or successors, as Trustee and Paying Agent (herein referred to as the "Trustee "), on the Maturity Date shown above, the principal amount shown above, in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts and to pay by check or draft to the registered owner hereof interest thereon, but solely from the source as hereinafter provided and not otherwise, in like coin or currency from the date hereof at the Interest Rate per annum shown above, payable November 1, 1993 semiannually thereafter on the 1st day of May and November of each year, until payment of such principal sum or, if this Bond or a portion thereof shall be duly called for redemption, until the date fixed for redemption, and to pay interest on overdue principal and interest (to the extent legally enforceable) at the rate borne by this Bond. 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 Trustee at the close of business on the fifteenth day of the month (whether or not a business day) 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. M 212 • • This Bond is one of an issue of City of Little Rock, Arkansas Waste Disposal Revenue Bonds, Series 1993, aggregating Million Hundred Thousand Dollars ($ ) in principal amount (the "Bonds "), and is issued for the purpose of financing a part of the costs of the construction and equipment by the City of betterments and improvements to the City's waste disposal system (the "System "), paying necessary expenses incidental thereto and to the authorization and issuance of the Bonds. The Bonds are issued pursuant to and in full compliance with the Constitution and laws of the State of Arkansas, including particularly Arkansas Code Annotated §§ 14- 232 -101 to 115 (the "Act ") and applicable decisions of the Supreme Court of Arkansas, and pursuant to an ordinance of the Board of Directors of the City duly adopted and approved, and do not constitute an indebtedness of the City within any constitutional or statutory limitation. The Bonds are not general obligations of the City, but are special obligations payable solely from the revenues derived from the operation of the System. An amount of System revenues sufficient to pay the principal of and interest on the Bonds of this issue has been duly pledged and set aside into the Waste Disposal Revenue Fund created by Ordinance No. adopted and approved on , 1993, as amended (the "Authorizing Ordinance ") , under which the Bonds are authorized to be issued. Reference is hereby made to the Authorizing Ordinance for a detailed statement of the terms and conditions upon which the Bonds are issued, of the nature and extent of the security for the Bonds, and the rights and obligations of the City, the Trustee and the Bondholders. The City has fixed and has covenanted and agreed to maintain rates for the services of the System which shall be sufficient at all times to provide for the proper and reasonable expenses of operation and maintenance of the System and for the payment of the Bonds of this issue, including Trustee's and Paying Agent's fees, if any, as the same become due and payable, to establish and maintain a debt service reserve, to make the required deposit for the depreciation of the System, and to meet certain covenants if it issues bonds on a parity with the Bonds of this issue. (REFERENCE IS HEREBY MADE TO FURTHER PROVISIONS OF THIS BOND ON THE REVERSE SIDE HEREOF WHICH HAVE THE SAME EFFECT AS IF SET FORTH IN THIS PLACE.) 213 IN WITNESS WHEREOF, the City of Little Rock, Arkansas, has caused this Bond to be executed by its Mayor and City Clerk, the facsimile signatures thereunto duly authorized and its corporate seal to be impressed, lithographed or imprinted on this Bond, all as of the Dated Date shown above. ATTEST: (facsimile signature) City Clerk ( S E A L ) 11 CITY OF LITTLE ROCK, ARKANSAS By (facsimile signature) Mayor 214 • (Reverse Side of Bond) • M The Bonds or portions thereof are subject to redemption prior to maturity at the option of the City, in whole or in part, from funds from any source, at any time on and after May 1, 2000 at a redemption price of par plus accrued interest to the redemption date. Notice of redemption identifying the Bonds or portions thereof (which shall be $5,000 or a multiple thereof) to be redeemed shall be given by the Trustee, not less than thirty (30) 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 be redeemed shall not affect the validity of the proceedings for redemption of other Bonds as to which notice of redemption is duly given in proper and timely fashion. All such Bonds or portions thereof thus called for redemption and for the retirement of which funds are duly provided in accordance with the Authorizing Ordinance prior to the date fixed for redemption will ceased to bear interest on such redemption date. This Bond is transferable by the registered owner hereof in person or by his attorney -in -fact duly authorized in writing at the principal corporate trust office of the Trustee, but only in the manner, subject to the limitation and upon payment of the charges provided in the Authorizing Ordinance, and upon surrender and cancellation of this Bond. Upon such transfer a new fully registered Bond or Bonds of the same maturity, of authorized denomination or denominations, for the same aggregate principal amount, will be issued to the transferee in exchange therefor. This Bond is issued with the intent that the laws of the State of Arkansas shall govern its construction. The City and the Trustee may deem and treat the registered owner hereof as the absolute owner hereof for the purpose of receiving payment of or on account of principal hereof and premium, if any, hereon and interest due hereon and for all other purposes, and neither the City nor the Trustee nor any paying agent shall be affected by any notice to the contrary. The Bonds are issuable only as fully registered Bonds in the denomination of $5,000 and any integral multiple thereof. Subject to the limitations and upon payment of the charges provided in the Authorizing Ordinance, fully registered Bonds may be exchanged for a like aggregate principal amount of fully registered Bonds of the same maturity of other authorized denominations. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required to exist, happen and be performed 215 0 precedent to and in the issuance of the Bonds do exist, have happened and have been performed in due time, form and manner as required by law; that the indebtedness represented by the Bonds, together with all obligations of the City, does not exceed any constitutional or statutory limitation; and that the above referred to revenues pledged to the payment of the principal of and premium, if any, and interest on the Bonds as the same become due and payable will be sufficient in amount for that purpose. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Authorizing Ordinance until the Certificate of Authentication hereon shall have been signed by the Trustee. 10 216 217 (Form of Trustee's Certificate) TRUSTEE'S CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds designated Series 1993 in and issued under the provisions of the within mentioned Authorizing ordinance. TRUSTEE By Authorized Signature (Form of Assignment) ASSIGNMENT FOR VALUE RECEIVED, ) "Transferor "), hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints ( "Transferee ") as attorney to transfer the within Bond on the books kept for registration thereof with full power of substitution in the premises. DATE: Transferor GUARANTEED BY: NOTICE: Signature(s) must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or a trust company. 11 0 0 M M M M Section 9. Waste Disposal Rates. The rates charged for services of the System heretofore fixed by the following ordinance of the City and the conditions, rights and obligations pertaining thereto, as set out in this ordinance, are hereby ratified, confirmed and continued: Waste Disposal Rates: Ordinance No. 16,410, adopted and approved April 20, 1993. The City covenants and agrees that while any of the Bonds are outstanding it will fix, charge and collect user fees, tipping fees, and all available reserves sufficient to produce operating revenues in any fiscal year sufficient to pay (i) operation and maintenance expenses of the System, (ii) each year's required payments of principal, premium, if any, and interest on the Bonds, (iii) to restore the Debt Service Fund to the Required Level, if necessary, and (iv) the required deposits into the Closure and Post - Closure Accounts. If necessary, the rates will be increased to produce net revenues (net revenues being defined as gross revenues less the expenses of operation and maintenance of the System, including all expense items, except depreciation and amortization expenses, properly attributable to the operation and maintenance of the System, under generally accepted accounting principles applicable to municipal utility systems), which are at least equal to 110% of debt service on the System. Section 10. Custodian of Revenues. The Treasurer of the City shall be custodian of the gross revenues derived from the operation of the System and that officer shall give Bond for the faithful discharge of his duties as such custodian. From and after the delivery of the Bonds, the System shall be continuously operated as a revenue - producing undertaking. All moneys received by the Treasurer shall be deposited by him in such depository or depositories for the City as may be lawfully designated from time to time by the City; subject, however, to the giving of security as now or as hereafter may be required by law, and provided that such depositories shall hold membership in the Federal Deposit Insurance Corporation. All deposits shall be in the name of the City and shall be so designated as to indicate the particular fund or account to which revenues belong. Any deposit in excess of the amount insured by the Federal Deposit Insurance Corporation shall be secured by Bonds or other direct or fully guaranteed obligations of the United States of America unless invested as herein authorized. Section il. operation of System. The City covenants that it will continuously operate the System as a revenue - producing undertaking; provided, however, that nothing herein shall be construed to prohibit the City from making such dispositions of properties of the System and such replacements and substitutions for properties of the System as shall be necessary or incidental to 12 218 M = M 0 M M • 219 the efficient operation of the System as a revenue - producing undertaking. Section 12. Establishment of Funds. The City hereby establishes the following funds, in addition to the Waste Disposal Revenue Fund established in Section 3 hereto: 1. Debt Service Reserve Fund; 2. Construction Fund; and 3. Rebate Fund. Section 13. Accounts in Waste Disposal Revenue Fund. The City shall establish within the Waste Disposal Revenue Fund the following accounts: (i) operation and Maintenance Account; (ii) Interest Account; (iii) Principal Account; (iv) Closure Account; (v) Post - Closure Account; (vi) Capital Reserve Account; (vii) Rate Stabilization Account; and (viii) Surplus Account. Section 14. operations and Maintenance Account, Interest Account and Principal Account. Revenues from the System in the Waste Disposal Revenue Fund shall be applied at the times, in the amounts, and in the priority, as follows: FIRST, the City shall deposit monthly into the Operation and Maintenance Account revenues from the System in an amount needed for the payment or the reasonable and necessary expenses of operation and maintenance of the System. SECOND, the City shall deposit monthly into the Interest Account revenues from the System in an amount equal to 1/6 of the interest payable on the Bonds on the immediately following Payment Date. THIRD, the City shall deposit monthly into the Principal Account revenues from the System in an amount equal to 1/12 of the principal of the Bonds payable on the immediately following Payment Date on which principal of the Bonds is due. FOURTH, if at any time the amounts on deposit in the Debt Service Reserve Fund are reduced to an amount less than the Required Level (as defined in Section 15 hereto), the City shall, from System revenues, immediately deposit into the Debt Service Reserve fund any amounts required to replenish the Debt Service Reserve Fund to the Debt Service Requirement. FIFTH, after payment of items FIRST through FOURTH above, all 13 remaining System revenues shall be used as set forth in Sections 16 to 20 hereto. When the moneys held in the operation and Maintenance Account, Interest Account, Principal Account and Debt Service Reserve Fund, shall be and remain sufficient to pay the principal of, premium, if any, and interest on all of the Bonds then outstanding plus Trustee's and Paying Agent's fees, the City shall not be obligated to make any further payments into the Interest Account and Principal Account. It shall be the duty of the City to cause to be withdrawn from the Expense Account, Interest Account and Principal Account no later than three (3) days before the due date of any principal and /or interest on any Bond, at maturity or redemption prior to maturity, and deposited with the Trustee an amount equal to the amount of such Bond and interest due thereon for the sole purpose of paying the same, together with the Trustee and Paying Agent's fee. No withdrawal of funds from the Interest Account and Principal Account shall be made for any other purpose except as otherwise authorized in this Ordinance. The Bonds of this issue shall be specifically secured by a pledge of the net revenues of the System. Net revenues does not include monies held in the Rebate Fund or in the Closure and Post - Closure Accounts. This pledge in favor of the Bonds is hereby irrevocably made according to the terms of this Ordinance, and the City and its officers and employees shall execute, perform and carry out the terms thereof in strict conformity with the provisions of this Ordinance. Section 15. Debt Service Reserve Fund. (1) The Debt Service Reserve Fund is for the purpose of providing a reserve for payment of principal of and interest on the Bonds. The Debt Service Reserve Fund shall be held by the Trustee and maintained in the amount of the maximum annual debt service on the then outstanding Bonds (the "Required Level "). (b) Upon the issuance of the Bonds, there shall be deposited the maximum annual debt service on the then outstanding Bonds, in the Debt Service Reserve Fund. So long as the Debt Service Reserve Fund is maintained at the Required Level, all excess monies in the Debt Service Reserve Fund shall be transferred as set forth in paragraph (d) below. (c) Moneys held for the credit of the Debt Service Reserve Fund shall be used for payment of principal of and interest on Bonds for which Waste Disposal Revenue Fund moneys are not available and for no other purpose except as specifically permitted herein. If the amount held for the credit of the Debt Service Reserve Fund shall ever be less than the Required Level, the fund shall be restored to the Required Level in twelve (12) equal 14 • • 221 monthly payments. Monthly payments shall be made from the Waste Disposal Revenue Fund on the. first business day of each month after the required deposits into the Operation and Maintenance Account, the Interest Account and the Principal Account. (d) Moneys held for the credit of the Debt Service Reserve Fund which exceed the Required Level shall be withdrawn from the Debt Service Reserve Fund and deposited into the Waste Disposal Revenue Fund. (e) In lieu of depositing moneys into the Debt Service Reserve Fund, the requirements of this section may be satisfied by depositing with the Trustee a surety bond in the principal amount equal to the requirement, or portion, being satisfied. The surety bond must be issued by an insurance company rated AA or better by A. M. Best and must provide for payment to the Trustee, upon demand, of all or any part of the principal amount which may be needed for use for any purpose for which the Debt Service Reserve Fund moneys may be used under this Ordinance. Section 16. Closure Account. After making the required payments into the Operation and Maintenance Account, Interest Account, Principal Account and Debt Service Reserve Fund there shall be paid from the Waste Disposal Revenue Fund into the Closure Account of the Waste Disposal Revenue Fund annually on the last business day of each year while any of the Bonds of this issue are outstanding the amounts required by the Solid Waste Disposal Facility Criteria of the United States Environmental Protection Agency, 40 C.F.R. Part 258, and any regulations amendatory thereto. The moneys in the Closure Account shall be used solely for the purpose of paying the cost of closing the System landfill or federal or state mandated cleanup. The Trustee shall have no lien on or security interest in the Closure Account with respect to the payment of any fees, charges or expenses due to the Trustee under this Ordinance. In lieu of depositing moneys into the Closure Account, the requirements of this section may be satisfied by depositing with the Trustee a surety bond, letter of credit or insurance in the principal amount equal to the requirement, or portion, being satisfied, as set forth in 40 C.F.R. Part 258, and any regulations amendatory thereto. Section 17. Post - Closure Account. After making the required payments into the Operation and Maintenance Account, Interest Account, Principal Account, Debt Service Reserve Fund and Closure Account, there shall be paid from the Waste Disposal Revenue Fund to the Post - Closure Account of the Waste Disposal Revenue Fund, annually on the last business day of each year while any of the Bonds of this issue are outstanding the amounts required by the Solid Waste Disposal Facility Criteria of the United States Environmental Protection Agency, 40 C.F.R. Part 258, and any 15 I im M M M = M 0 0 regulations amendatory thereto. The moneys in the Post Closure Account shall be used soley for the purpose of paying the cost of post closure care of the System landfill or federal or state mandated cleanup. The Trustee shall have no lien on or security interest in the Post - Closure Account with respect to the payment of any fees, charges or expenses due to the Trustee under this Ordinance. In lieu of depositing moneys into the Post - Closure Account, the requirements of this section may be satisfied by depositing with the Trustee a surety bond, letter of credit or insurance as set forth in 40 C.F.R. Part 258, and any regulations amendatory thereto. Section 18. Capital Reserve Account. After making the requirement payments into the Operation and Maintenance Account, Interest Account, Principal Account, Debt Service Reserve Fund, Closure Account and Post - Closure Account, the Treasurer may deposit moneys into the Capital Reserve Account. The moneys in the Capital Reserve Account shall be used solely for the purpose of funding replacements of capital equipment for the System, except that moneys in the Capital Reserve Account shall be used to the extent necessary at any time to prevent the default in the payment of the principal and interest on the Bonds and the Trustee's and Paying Agent's fees. Section 19. Rate Stabilization Account. The Treasurer is hereby authorized and directed, after making the transfers or deposits pursuant to Sections 14 through 18, to transfer the moneys remaining in the Waste Disposal Revenue Fund from time to time into the Rate Stabilization Account. The City shall deposit in the Rate Stabilization Account the net proceeds from the sale of any System property as well as insurance and condemnation proceeds received as a result of damage, destruction or condemnation of any part of the System. Whenever there shall be a deficiency in any other account in the Waste Disposal Revenue Fund or the Debt Service Reserve Fund, the Treasurer may make good such deficiency from the Rate Stabilization Account. If and to the extent no such reimbursement obligation is outstanding, amounts in the Rate Stabilization Account may be paid out from time to time by the Treasurer into the Surplus Account. The money on deposit in the Rate Stabilization Account may be used for any one or more of the following purposes: (a) to be held in reserve for the purpose of stabilizing or moderating future rate increases (but not to reduce existing rates), and to transfer amounts so held in reserve to the Waste Disposal Revenue Fund at the discretion of the City during the KI 222 M M M M M Fiscal Year rate increases are to be moderated; 223 (b) to transfer on or about the end of any Fiscal Year to the Closure Account, Post - Closure Account, Capital Reserve Account, respectively, if and to the extent needed to either reconcile amounts actually deposited therein for that Fiscal Year with amounts budgeted for deposit therein for that Fiscal Year or to repay any temporary advances from any fund or account to the Debt Service Reserve Fund made pursuant to Section 15 hereof; (c) to transfer to the Closure Account, Post - Closure Account and Capital Reserve Account, respectively, if and to the extent such transfers are consistent with the System's capital budget and serve to reduce or avoid the need for the System to incur indebtedness in the future; (d) to pay the cost of renewals or replacements to the System or to pay the cost of extraordinary maintenance and repairs; (e) to pay other debts as liabilities of the System incurred in connection with the disposal of waste not otherwise provided for; or (f) to purchase or redeem any Bonds at a price not greater than 100% of the principal amount thereof (or, to the extent permitted by law, the then current optional redemption price for such series of Bonds) plus accrued interest. The Treasurer may transfer any balance remaining in the Rate Stabilization Account not held in reserve in accordance with Section (a) above to the Surplus Account at the end of each Fiscal Year. Section 20. Surplus Account. Any surplus after making all disbursements and providing for all accounts and of funds described in Section 14 through 19 above may be used, at the option of the City, for the redemption of the Bonds (and Bonds ranking on a parity with the Bonds as the City in its discretion shall determine) prior to maturity in accordance with their respective redemption provisions; for constructing extensions, betterments and improvements to the System; or for transfer to the General Fund of the City for use for any other lawful municipal purpose authorized by the City. Section 21. Construction Fund. When the Bonds have been executed, they shall be authenticated by the Trustee and the Trustee shall deliver the Bonds to the Purchaser upon payment in cash of the purchase price plus accrued interest ( "total sale proceeds "). The accrued interest plus the amount necessary to provide for interest payments until System revenues are available, if any amount be necessary, shall be remitted to the Treasurer for deposit into the Waste Disposal Revenue Fund. The remainder of 17 • • 224 total sale proceeds shall be remitted to the Trustee for deposit in trust into the Construction Fund established pursuant to Section 12 hereto. The moneys in the Construction Fund in excess of the amount insured by FDIC shall be continuously secured by Bonds or other direct or fully guaranteed obligations of the United States of America, except that any moneys invested as hereinabove authorized need not be so secured. The moneys in the Construction Fund shall be disbursed solely to reimburse the City for amounts advanced for the planning and engineering for the System, in payment of the costs of accomplishing the improvements, paying necessary expenses incidental thereto, paying interest during construction and paying expenses of issuing the Bonds not paid by the Purchaser. Disbursements shall be on the basis of checks or requisitions which shall contain at least the following information: the person to whom payment is being made; the amount of the payment; and the purpose by general classification of the payment. Each check or requisition must be signed by the Treasurer of the City, and in the case of all items of expense over which the consulting engineer shall exercise supervision (which shall include all expenses except engineering fees, legal fees, and expenses pertaining to the issuance of the Bonds) each check or requisition shall be accompanied by a certificate signed by the consulting engineer certifying his approval thereof. In the case of requisitions, the Trustee shall issue its check upon the Construction Fund payable to the person, firm or corporation designated in the requisition. The Trustee shall be required to keep accurate records as to all payments made on the basis of requisitions, and the City shall be required to keep accurate records of all payments made on the basis of checks. When the improvements have been completed and all required expenses paid and expenditures made from the Construction Fund for and in connection with the accomplishment of the improvements and the financing thereof, this fact shall be evidenced by a certificate signed by the person occupying the top managerial position of the System and by the consulting engineer, which certificate shall state, among other things, the date of the completion and that all obligations payable from the Construction Fund have been discharged. A copy of the certificate shall be filed with the Trustee, and upon receipt thereof the Trustee shall transfer any remaining balance in the Construction Fund to the Waste Disposal Revenue Fund. Section 22. Deposits to Construction Fund. From time to time during the construction of the improvements, the City may deposit when necessary surplus moneys in the Waste Disposal Revenue Fund into the Construction Fund to finance the costs of the improvements. Section 23. Rebate Fund. (a) The Rebate Fund shall be held in trust by the Trustee and, subject to paragraph (c) of this Section, shall be held for the benefit of the United States of 0 0 225 America. The Rebate Fund shall not be held for the benefit of the bondholders or the Trustee. The Trustee shall have no lien on or security interest in the Rebate Fund with respect to the payment of any fees, charges or expenses due to the Trustee under this Ordinance. (b) The City and the Trustee acknowledge that the exclusion of the interest paid on the Bonds from gross income for purposes of federal income taxation is dependent upon continued compliance with the provisions of Section 148 of the Internal Revenue Code of 1986 (the "Code "). The City shall, unless and until the City delivers to the Trustee a written opinion of counsel as described in paragraph (c) of this Section, make the determinations and take the actions required by this Section and make such further or different determinations and take such further or different actions as are necessary, in the opinion of counsel, to comply with the requirements of Section 148(f) of the Code and the regulations pertaining thereto. The City shall rebate to the United States, not later than sixty (60) days after the end of the five year period ending May 1, 1998, and not later than sixty (60) days after the end of each five -year period thereafter, an amount which ensures that at least ninety percent (90 %) of the Rebate Amount (as hereinafter defined) at the time of such payment will have been paid to the United States, and, within sixty (60) days after the payment or redemption of all principal of the Bonds, an amount sufficient to pay the remaining unpaid balance of the Rebate Amount, all in the manner and as required by Section 148 of the Code and the regulations pertaining thereto. As used herein, "Rebate Amount" means the amount described in Section 148(f) (2) of the Code, computed in accordance with the provisions of Section 148(f)(2) and the regulations pertaining thereto now or hereafter promulgated, including, until superseded, supplemented or amended by Treasury Regulations, Sections 1.103 -15AT and 1.148 -OT through 1.148 -9T, as applicable. The City shall determine the Rebate Amount as of the close of each five -year period and upon payment or redemption of all principal of the Bonds. To assist it in making the determination, the City may employ a firm of certified public accountants, a law firm or other specialist in the calculation of arbitrage rebate (the "Rebate Analyst ") . A "Rebate Report," stating the Rebate Amount and containing appropriate supporting documentation required to verify calculations of the Rebate Amount, shall be furnished by the City to the Trustee within thirty (30) days after the close of each five -year period and within thirty (30) days after payment or redemption of all principal of the Bonds. The Trustee shall be under no obligation to verify the calculations required in this Section 19(b) made by or on behalf of the City. The City and the Trustee shall retain copies of each Rebate Report until six years after final payment or redemption of all principal of the Bonds. Upon receipt of a Rebate Report, the City shall pay to the Trustee, for deposit into the Rebate Fund, the Rebate Amount so determined. 19 The Trustee shall separately account for the earnings from the investment of moneys in the Rebate Fund, and such earnings shall become a part of the Rebate Amount. moneys in the Rebate Fund shall be paid by the City to the United States at such times and in such amounts as are necessary to comply with the provisions of Section 148(f) of the Code and the regulations issued thereunder. Upon receipt by the Trustee of a written request of the City certifying that certain amounts in the Rebate Fund are not subject to rebate and an opinion of Bond Counsel (hereinafter defined) to the effect that failure to rebate such amounts will not cause interest on the Bonds to become includable in gross income of the bondholders for federal income tax purposes under existing laws, regulations, rulings and decisions, the Trustee shall transfer any such amounts to the credit of the waste Disposal Fund. Except as provided in the previous sentence, moneys in the Rebate Fund shall be applied solely to meet the City's rebate obligations. The term "Bond Counsel" means a law firm of nationally recognized standing in the field of tax - exempt municipal securities selected by the City and acceptable to the Trustee. The Trustee shall notify the City by first class mail posted at least 20 days before any Rebate Amount is due that such payment will be due. Failure to receive any such notice will not relieve the City of its obligations hereunder. The City shall verify to the Trustee at least annually from the date of delivery of the Bonds that (i) all requirements of this Section have been met on a continuing basis, (ii) adequate procedures have been established and are being complied with to ensure continuing compliance with the requirements of this Section, (iii) if applicable, the proper amounts have been deposited into the Rebate Fund, and (iv) if applicable, timely payments of all amounts due and owing to the United States Treasury from the Rebate Fund have been made. The provisions of this Section shall remain in full force and effect notwithstanding the defeasance of the Bonds. (c) Notwithstanding the foregoing, in the event the Trustee is furnished with a written opinion of Bond Counsel (as defined in paragraph (b) above), to the effect that it is not necessary under existing laws, regulations, rulings and decisions to pay any portion of earnings on investments held under this Indenture or otherwise to the United States in order to assure the exclusion from gross income for federal income tax purposes of interest on the Bonds, the requirements set forth in the preceding portions of this Section (with respect to the portion of such earnings specified in such opinion) need not be complied with and shall no longer be effective, and all amounts at the time on deposit in the Rebate Fund (to the extent covered by such opinion) shall be 20 M 227 transferred as specified in such opinion. Section 24. Additional Bonds. So long as any of the Bonds are outstanding, the City shall not issue or attempt to issue any Bonds which claim to be entitled to a priority of lien on the revenues of the System over the lien securing the Bonds of this issue. The City reserves the right to issue additional Bonds to finance or pay the cost of constructing any future extensions, betterments or improvements to the System, but the City shall not authorize or issue any such additional Bonds ranking on a parity with the outstanding Bonds of this issue unless and until there have been procured and filed with the City Clerk and the Trustee a statement by an independent certified public accountant not in the regular employ of the City reciting the opinion, based upon necessary investigation, that the net revenues of the System for the fiscal year immediately preceding the fiscal year in which it is proposed to issue such additional Bonds shall equal not less than 120% of the average annual principal and interest requirements on all the then outstanding Bonds payable from System revenues (including these Bonds and any subsequent parity Bonds) and the additional Bonds then proposed to be issued. The term "net revenues" means gross revenues of the System less the amounts required to pay the costs of operation, maintenance and repair of the System, determined in accordance with generally accepted accounting principles. In making the computation set forth above, the City, and the independent certified public accountant on behalf of the City, may treat any increase in rates for the System enacted during the fiscal year as having been in effect throughout such fiscal year and may include in gross revenues for such fiscal year the amount that would have been received had the increase been in effect throughout such fiscal year. Section 25. Redemption. The Bonds authorized hereby and issued hereunder shall be subject to redemption prior to maturity in accordance with the terms set out in the Bond form. Section 26. Books and Records. The City shall cause proper books of accounts and records to be kept (separate from all other records and accounts) in which complete and correct entries shall be made of all transactions relating to the operation of the System, and such books shall be available for inspection by the holder of any of the Bonds at reasonable times and under reasonable circumstances. The City agrees to have these records audited by an independent certified public accountant at least once each year, and a copy of the audit shall be delivered to the Trustee and made available to the registered owners of the Bonds. In the event that the City fails or refuses to make the audit, the Trustee, or any registered owner of the Bonds, may have the audit made, and the cost thereof shall be charged against the Waste Disposal Revenue Fund. 21 228 Section 27. Payments from Funds. Payments from the respective funds shall be made by check or voucher, signed by the Treasurer of the City, and drawn on the depository. Each such check or voucher shall briefly specify the purpose of the expenditure. Section 28. Cancellation of Bonds. The Bonds paid either at or before maturity shall be canceled and shall not be reissued. Section 29. Insurance. The City covenants and agrees that it will maintain the System in good condition and operate the same in an efficient manner and at reasonable cost. While any of the Bonds are outstanding, the City agrees that it will insure and at all times keep insured, in the amount of the actual value thereof, in a responsible insurance company or companies authorized and qualified under the laws of the State of Arkansas to assume the risk thereof, properties of the System, to the extent that such properties would be covered by insurance by private companies engaged in similar types of businesses against loss or damage thereto from fire and other perils included in extended coverage insurance in effect in Arkansas. The insurance policies are to be taken with companies approved by the Trustee and are to carry a clause making them payable to the Trustee as its interest may appear, and satisfactory evidence of said insurance shall be filed with the Trustee. In the event of loss, the proceeds of such insurance shall be applied solely toward the reconstruction, replacement or repair of the System, and in such event the City will, with reasonable promptness, cause to be commenced and completed the reconstruction, replacement and repair work. If such proceeds are more than sufficient for such purposes, the balance remaining shall be deposited to the credit of the Waste Disposal Revenue Fund. Nothing shall be construed as requiring the City to expend any moneys for operation and maintenance of the System or for premiums on its insurance which are derived from sources other than the operation of the System, but nothing shall be construed as preventing the City from doing so. Section 30. Defeasance. Bonds for the payment or full redemption of which moneys or Government Securities, as hereinafter defined, shall have been deposited with the Trustee (whether upon or prior to the maturity or the redemption date of such Bonds) shall be deemed to be paid and discharged; provided, however, that if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been duly given. "Government Securities" shall mean direct or fully guaranteed obligations of the United States of America, and in determining the sufficiency of the deposit there shall be considered the principal amount of such investment securities and interest to be earned thereon until the maturity of such investment securities. Section 31. Default. If there be any default in the payment of the principal of, premium, if any, or interest on any of the 22 0 0 M w M M Bonds, or if the City defaults in the performance of any of the other covenants contained in this Ordinance, the Trustee may, and upon the written request of the registered owners of not less than lot in principal amount of the then outstanding Bonds, shall, by proper suit, compel the performance of the duties of the officials of the City under the laws of Arkansas. And in the case of a default in the payment of the principal of, premium, if any, and interest on any of the Bonds, the Trustee may and upon written request of the registered owners of not less than 10% in principal amount of the then outstanding Bonds, shall apply in a proper action to a court of competent jurisdiction for the appointment of a receiver to administer the System on behalf of the City and the registered owners of the Bonds with power to charge and collect (or by mandatory injunction or otherwise to cause to be charged and collected) rates sufficient to provide for the payment of the expenses of operation, maintenance and repair and to pay any Bonds and interest outstanding and to apply the revenues in conformity with the laws of Arkansas and with this Ordinance. When all defaults in principal and interest payments have been cured, the custody and operation of the System shall revert to the City. No registered owner of any of the outstanding Bonds shall have any right to institute any suit, action, mandamus or other proceeding in equity or at law for the protection or enforcement of any power or right unless such holder previously shall have given to the Trustee written notice of the default on account of which such suit, action or proceeding is to be taken, and unless the registered owners of not less than ten percent (10 %) in principal amount of the Bonds then outstanding shall have made written request of the Trustee after the right to exercise such power or right of action, as the case may be, shall have accrued, and shall have afforded the Trustee a reasonable opportunity either to proceed to exercise the powers granted to the Trustee, or to institute such action, suit or proceeding in its name, and unless, also, there shall have been offered to the Trustee reasonable security and indemnity against the costs, expenses and liabilities to be incurred therein or thereby and the Trustee shall have refused or neglected to comply with such request within a reasonable time. Such notification, request and offer of indemnity are, at the option of the Trustee, conditions precedent to the execution of any remedy. No one or more registered owners of the Bonds shall have any right in any manner whatever by his or their action -to affect, disturb or prejudice the security of this Ordinance, or to enforce any right thereunder except the manner herein described. All proceedings at law or in equity shall be instituted, had and maintained in the manner herein described and for the benefit of all registered owners of the outstanding Bonds. No remedy conferred upon or reserved to the Trustee or to the registered owners of the Bonds is intended to be exclusive of any other remedy or remedies, and every such remedy shall be cumulative and shall be in addition to every other remedy given under this 23 XAJ M v M M M ordinance or by law. M M � M w No ON M on The Trustee may, and upon the written request of the registered owners of not less than fifty percent (50 %) in principal amount of the Bonds then outstanding shall, waive any default which shall have been remedied before the entry of final judgment or decree in any suit, action or proceeding instituted under the provisions of this Ordinance or before the completion of the enforcement of any other remedy, but no such waiver shall extend to or affect any other existing or any subsequent default or defaults or impair any rights or remedies consequent thereon. All rights of action under this Ordinance or under any of the Bonds secured hereby, enforceable by the Trustee, may be enforced by it without the possession of any of the Bonds, and any such suit, action or proceeding instituted by the Trustee shall be brought in its name for the benefit of all the registered owners of such Bonds, subject to the provisions of this Ordinance. No delay or omission of the Trustee or of any registered owners of the Bonds to exercise any right or power accrued upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy given by this Ordinance to the Trustee and to the holders and registered owners of the Bonds, respectively, may be exercised from time to time and as often as may be deemed expedient. In any proceeding to enforce the provisions of this Ordinance any plaintiff Bondholder shall be entitled to recover from the City all costs of such Proceeding, including reasonable attorneys' fees. 230 Section 32. Ordinance Constitutes Contract. This Ordinance shall constitute a binding contract between the City and the holders of the outstanding Bonds, and the City will at all times strictly adhere to the terms and provisions hereof and will fully discharge all of its obligations hereunder. Subject to the terms and provisions set forth below and not otherwise, the holders of not less than seventy -five percent (75 %) in aggregate principal amount of the Bonds and any parity Bonds then outstanding shall have the right, from time to time, to consent to and approve the adoption by the City of such ordinance supplemental to this Ordinance as shall be necessary or desirable for the purpose of modifying, altering, amending, adding to or rescinding in any particular, any of the terms or provisions of this Ordinance or in any supplemental ordinance, except that there shall not be permitted (a) an extension of the maturity of the principal of or the 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 a lien upon or a pledge of revenues other than as expressly authorized by this Ordinance as now adopted, or (d) the creation of a privilege of priority of any Bond or Bonds over any 24 231 other Bond or Bonds, or (e) a reduction in the aggregate principal amount of the Bonds required for consent to such supplemental ordinance. section 33. Investment of Funds and Accounts. (a) Moneys held for the credit of the Debt Service Reserve Fund shall be continuously invested and reinvested pursuant to the direction of the City Treasurer in direct or fully guaranteed obligations of the United States of America ( "Government Securities "), certificates of deposit of banks which are members of the Federal Deposit Insurance Corporation ( "FDIC ") , or other investments as may, from time to time, be permitted by law, all of which shall mature, or which shall be subject to redemption by the holder thereof, at the option of such holder, not later than ten (10) years after the date of investment. (b) Moneys held for the credit of the Construction Fund may, at the option of the Treasurer, be invested and reinvested pursuant to the direction of the City in Government Securities, in certificates of deposit of banks which are members of FDIC, or other investments as may, from time to time, be permitted by law, which shall mature, or which shall be subject to redemption by the holder thereof, at the option of such holder, not later than the date or dates when such money will be required for the purposes intended. (c) Moneys held for the credit of any other fund or account shall be continuously invested and reinvested pursuant to the direction of the City Treasurer in Government Securities, or other investments as may, from time to time, be permitted by law, which shall mature, or which shall be subject to redemption by the holder thereof, at the option of such holder, not later than the date or dates when the moneys held for the credit of the particular fund or account will be required for purposes intended. (d) obligations so purchased as an investment of moneys in any fund or account shall be deemed at all times to be a part of such fund or account and the interest accruing thereon and any profit realized from such investments shall be credited to such fund or account, and any loss resulting from such investment shall be charged to such fund or account, except that interest earnings and profits on investments of moneys in the Debt Service Reserve Fund which increases the amount thereof above the Required Level shall to the extent of any such excess be transferred from time to time out of the Debt Service Reserve Fund into the Waste Disposal Revenue Fund. (e) Moneys so invested in Government Securities or in certificates of deposit of banks or savings and loan associations to the extent insured by FDIC need not be secured by the depository bank or banks. 25 Section 34. Pledge of Net Revenues. That the City pledges the net revenues (as defined in Section 9 of this Ordinance, which does not include monies held in the Rebate Fund or the Closure Fund or Post - Closure Accounts) of the System, which pledge shall exist in favor of the holders and registered owners of the Bonds, and such pledge shall remain in effect until payment in full of the interest on, premium, if any, and principal of the Bonds. Section 35. City officials. That in the event the office of Mayor, City Clerk, City Treasurer, or City Attorney shall be abolished, or any two or more of such offices shall be merged or consolidated, or in the event the duties of a particular office shall be transferred to another office or officer, or in the event of a vacancy in any such office by reason of death, resignation, removal from office or otherwise, or in the event any such officer shall become incapable of performing the duties of his office by reason of sickness, absence from the City or otherwise, all powers conferred and all obligations and duties imposed upon such office or officer shall be performed by the office or officer succeeding to the principal functions thereof, or by the office or officer upon whom such powers, obligations and duties shall be imposed by law. 232 Section 36. Encumbrances on system. The City covenants and agrees that so long as any Bonds authorized hereby are outstanding, that it will not mortgage, pledge or otherwise encumber the System, or any part thereof or any revenues derived from the operation thereof, except as herein specifically provided, and will not sell, lease or otherwise dispose of any substantial portion of the same. Nothing herein shall be construed to prohibit the City from disposing of worn out or obsolete System properties or from disposing of properties not being used and not useful in the operation of the System, provided that all revenues derived from the disposition of such properties shall be deposited in the Waste Disposal Fund. Section 37. The Trustee. The Trustee shall only be responsible 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 Trustee. The Trustee shall not be required to take any action as Trustee unless it shall have been requested to do so in writing by the holders of not less than ten percent (10 %) in principal amount of the Bonds then outstanding and shall have been offered reasonable security and indemnity against the costs, expenses and liabilities to be incurred therein or thereby. The Trustee may resign at any time by sixty (60) days notice in writing to the City Clerk, and the majority in value of the holders of the outstanding Bonds at any time, with or without cause, may remove the Trustee. In the event of a vacancy in the office of Trustee, either by resignation or by removal, the majority in value of the holders of the outstanding Bonds of this issue may appoint a new Trustee, such 26 r 233 appointment to be evidenced by a written instrument or instruments filed with the City Clerk. If the majority in value of the holders of the outstanding Bonds of this issue shall fail to fill a vacancy within thirty (30) days after the same shall occur, then the City shall forthwith designate a new Trustee by a written instrument filed in the office of the City Clerk. The original Trustee and any successor Trustee 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 thereof shall be placed in the Bond transcript. Any successor Trustee shall have all the powers herein granted to the original Trustee. Section 38. Termination of Rights. Anything herein to the contrary notwithstanding, all rights of any holder of any Bond hereunder to or with respect to any moneys or investments held in any Fund hereunder shall terminate at the expiration of two and one -half years from the date of maturity of such Bond, whether by scheduled maturity or by call for redemption prior to maturity in accordance with the terms hereof. Section 39. Tax Covenants. The City covenants that (a) it shall not take any action or suffer or permit any action to be taken or condition to exist which causes or may cause the interest payable on the Bonds to be subject to federal income taxation. Without limiting the generality of the foregoing, the City covenants that the proceeds of the sale of the Bonds will not be used directly or indirectly in such manner as to cause the Bonds to be treated as "arbitrage Bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code "). (b) It will not use or permit the use of the improvements or the proceeds of the Bonds in such manner as to cause the bonds to be private activity bonds within the meaning of Section 141 of the Code. (c) It will reference to the the State and by revenues of the S applying of the Ordinance. faithfully and punctually perform all duties with Bonds, required by the Constitution and laws of this Ordinance, including the collection of the tstem, as herein specified and covenanted, and the revenues of the System as provided in this Section 40. Severability. The provisions of this Ordinance are hereby declared to be separable and if any provision shall for any reason be held illegal or invalid, such holding shall not affect the validity of the remainder of the Ordinance. Section 41. No Rights Until Bonds Issued. This Ordinance shall not create any right of any kind and no right of any kind 27 234 shall arise hereunder pursuant to it until the Bonds shall be issued and delivered. Section 42. Repealer. All ordinances and resolutions or parts thereof, in conflict herewith are hereby repealed to the extent of such conflict. Section 43. Emergency. It is hereby ascertained and declared that the improvements must be accomplished as soon as possible in order to make the System adequate for the needs of the City and its inhabitants, without which the life, health, safety and welfare thereof are jeopardized, and that the issuance of the Bonds and the taking of the other action authorized by this Ordinance is necessary for the accomplishment thereof. It is, therefore, declared that an emergency exists and this Ordinance being necessary for the immediate preservation of the public peace, health and safety shall take effect and be in force from and after its passage. PASSED: April 20, 1993. ATTEST: City Clerk Robbie Hancock ( S E A L ) 90 APPROVED: ^^ c May r Tim Dailey