164620
ORDINANCE NO. 16,462
•
AN ORDINANCE AUTHORIZING THE CONSTRUCTION OF
IMPROVEMENTS TO THE SEWER SYSTEM OF THE CITY
OF LITTLE ROCK, ARKANSAS; AUTHORIZING THE
ISSUANCE AND SALE OF SEWER REFUNDING AND
CONSTRUCTION REVENUE BONDS; PROVIDING FOR THE
PAYMENT OF THE PRINCIPAL OF AND INTEREST ON
THE BONDS; PRESCRIBING OTHER MATTERS RELATING
THERETO; AND DECLARING AN EMERGENCY.
M
J�tI
WHEREAS, the City of Little Rock, Arkansas (the "City ")
owns a Sewer System (the "System "), which is operated by the Sewer
Committee of the City (the "Committee "); and
WHEREAS, the Board of Directors and the Committee have
determined that extensions, betterments and improvements to the
System (the "improvements ") are necessary in order to make the
services of the System adequate for the needs of the City; and
WHEREAS, the Committee has caused to be prepared by the
engineering staff of the Little Rock Wastewater Utility a
preliminary report, general plans and estimates of cost for the
improvements that have been examined and approved by the Committee
and Board of Directors and a copy of which general plans are on
file in the office of the City Clerk and the Manager of the System
where they may be inspected by any interested person; and
WHEREAS, the City does not have available funds to pay
the estimated costs of $4,500,000 for the improvements but can
obtain the same by the issuance of sewer revenue bonds; and
WHEREAS, the Committee and the Board of Directors have
determined that the City will be able to receive a substantial
savings by refunding its Sewer Refunding and Construction Revenue
Bonds, Series 1987 (the 111987 Bonds ") authorized by Ordinance No.
15,260 of the City, adopted March 17, 1987, as supplemented by
Resolution No. 7,746 of the City, adopted April 1, 1987
(collectively, the 111987 Ordinance "); and
WHEREAS, the City can refund the 1987 Bonds and pay the
costs of the improvements by the issuance of Sewer Refunding and
Construction Revenue Bonds, Series 1993, in the principal amount of
$27,215,000 (the "bonds "); and
WHEREAS, the City and the Committee have made
arrangements for the sale of the bonds to Stephens Inc., Hill,
Crawford & Lanford Incorporated and Crews & Associates, Inc.
(collectively, the "Purchaser ") , at a price of $27,215,000 less
$240,852.75 of underwriters' discount less $41,882.50 of original
issuance discount plus accrued interest on the bonds from the date
of the bonds until the date of issuance (the "Purchase Price "),
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• • 390
pursuant to a Bond Purchase Agreement (the "Agreement ") which has
been presented to and is before this meeting; and
WHEREAS, the Preliminary Official Statement, dated July
12, 1993, offering the bonds for sale (the "Preliminary Official
Statement ") has been presented to and is before this meeting; and
WHEREAS, the City has outstanding an issue of its Sewer
Revenue Bonds, dated February 1, 1966 (the 111966 Bonds ") authorized
by Ordinance No. 11,695, adopted December 20, 1965 (the 111966
Ordinance "); and
WHEREAS, the Committee and the Board of Directors have
determined that it is in the best interest of the City to redeem
the 1966 Bonds from funds of the System held in connection with the
1966 Bonds; and
WHEREAS, the City has outstanding a Sewer Revenue Bond,
Series 1990 (the 111990 Bond ") authorized by Ordinance No. 15,966,
adopted November 20, 1990 (the 111990 Ordinance "); and
WHEREAS, the City has outstanding a Sewer Revenue Bond,
Series 1991 (the 111991 Bond "), authorized by Ordinance No. 16,030,
adopted April 2, 1991 (the 111991 Ordinance "); and
WHEREAS, the coverage test in the 1990 Ordinance and the
1991 Ordinance for securing the bonds with a lien on revenues of
the System prior to the lien on System revenues in favor of the
1990 Bond and the 1991 Bond has been met;
NOW, THEREFORE, BE IT ORDAINED by the Board of Directors
of the City of Little Rock, Arkansas:
Section 1. The improvements and the refunding of the
1987 Bonds shall be accomplished. The Mayor and City Clerk are
hereby authorized to take, or cause to be taken, all action
necessary to accomplish the refunding of the 1987 Bonds and to
execute all required contracts. The accomplishment of the
improvements shall be under the control and supervision of, and all
details in connection therewith shall be handled by, the Committee,
and the Committee shall make all contracts and agreements necessary
or incidental to the performance of its duties and the execution of
its powers. The Committee shall let all construction contracts
pursuant to and in accordance with existing laws and shall require
such performance bonds and insurance from the contractors as, in
the judgment of the Committee, will fully insure the completion of
the improvements in accordance with the plans and specifications
therefor.
Section 2. The Board of Directors hereby finds and
declares that the period of usefulness of the improvements will be
more than 25 years, which is longer than the term of the bonds.
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391
Section 3. The 1966 Bonds shall be redeemed on August 1,
1993 from System funds at the redemption price stated in the 1966
Ordinance. The Mayor and City Clerk are hereby authorized to take,
or cause to be taken, all action necessary to accomplish the same.
Section 4. The offer of the Purchaser for the purchase
of the bonds from the City at the Purchase Price for bonds bearing
interest at the rates per annum, maturing and otherwise subject to
the terms and provisions hereafter in this Ordinance set forth in
detail be, and is hereby accepted, and the Agreement, in
substantially the form submitted to this meeting, is approved and
the bonds are hereby sold to the Purchaser. The Mayor is hereby
authorized and directed to execute and deliver the Agreement on
behalf of the City and to take all action required on the part of
the City to fulfill its obligations under the Agreement.
Section 5. The Preliminary Official Statement is hereby
approved and the previous use of the Preliminary Official Statement
by the Purchaser in connection with the sale of the bonds is hereby
in all respects authorized and approved, and the Mayor be, and he
is hereby authorized and directed, for and on behalf of the City,
to execute the Preliminary Official Statement and the final
Official Statement as set forth in the Agreement.
Section 6. Under the authority of the Constitution and
laws of the State of Arkansas (the "State ") , including particularly
Title 14, Chapter 164, Subchapter 4, and Title 14, Chapter 235,
Subchapter 2 of the Arkansas Code of 1987 Annotated, City of Little
Rock, Arkansas Sewer Refunding and Construction Revenue Bonds,
Series 1993, are hereby authorized and ordered- issued in the
principal amount of $27,215,000 for the purpose of financing, along
with available funds of the System, the costs of the improvements,
refunding the 1987 Bonds, costs incidental thereto and expenses of
issuing the bonds and funding a debt service reserve. The bonds
shall bear interest at the rates and shall mature on the dates and
in the amounts as follows:
M M M M M
Date
M M M M M M
•
Principal
Amount
Date
•
JJ�
Principal
Amount
February
1, 1994
$270,000
February
1, 2003
$ 575,000
August 1,
1994
410,000
August 1,
2003
590,000
February
1, 1995
415,000
February
1, 2004
605,000
August 1,
1995
420,000
August 1,
2004
620,000
February
1, 1996
430,000
February
1, 2005
640,000
August 1,
1996
440,000
August 1,
2005
650,000
February
1, 1997
445,000
February
1, 2006
670,000
August 1,
1997
455,000
August 1,
2006
685,000
February
1, 1998
460,000
February
1, 2007
700,000
August 1,
1998
475,000
August 1,
2007
720,000
February
1, 1999
480,000
February
1, 2008
740,000
August 1,
1999
495,000
August 1,
2008
760,000
February
1, 2000
505,000
February
1, 2009
780,000
August 1,
2000
515,000
August 1,
2009
795,000
February
1, 2001
530,000
February
1, 2010
820,000
August 1,
2001
540,000
August 1,
2010
845,000
February
1, 2002
555,000
August 1,
2014
7,615,000
August 1,
2002
565,000
The bonds shall be dated September 1, 1993 and 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.
Interest on the bonds shall be payable on February 1,
1994, and semiannually thereafter on February 1 and August 1 of
each year. 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 Worthen Trust Co.,
Inc., Little Rock, Arkansas, as 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.
Each bond shall bear interest from the payment date next
preceding the date on which it is authenticated unless it is
authenticated on an interest payment date, in which event it shall
bear interest from such date, or unless it is authenticated prior
to the first interest payment date, in which event it shall bear
interest from September 1, 1993,or unless it is authenticated
during the period from the Record Date to the next interest payment
date, in which case it shall bear interest from such interest
payment date, or unless at the time of authentication thereof
interest is in default thereon, in which event it shall bear
interest from the date to which interest has been paid.
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393
only such bonds as shall have endorsed thereon a
Certificate of Authentication substantially in the form set forth
in Section 8 hereof (the "Certificate ") duly executed by the
Trustee shall be entitled to any right or benefit under this
Ordinance. No bond shall be valid and obligatory for any purpose
unless and until the Certificate shall have been duly executed by
the Trustee, and the Certificate upon any such bond shall be
conclusive evidence that such bond has been authenticated and
delivered under this Ordinance. The Certificate 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 on all of the bonds.
In case any bond 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 owner 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 bond was 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
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 Trustee) connected
therewith.
The City shall cause books 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
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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 on 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.
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 a Saturday or Sunday or shall be in the State 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 with the same force and effect as
if 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. 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 or imprinted 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
( "Revenues ") which are hereby pledged and mortgaged for the equal
and ratable payment of the bonds. The pledge of Revenues in favor
of the bonds shall be prior to the pledge in favor of the 1990 Bond
and the 1991 Bond. The bonds and interest thereon shall not
constitute an indebtedness of the City within any constitutional or
statutory limitation.
Section 8. The bonds and the Certificate shall be in
substantially the following form and the Mayor and City Clerk are
hereby expressly authorized and directed to make all recitals
contained therein:
M = M
REGISTERED
No.
0 395
(Form of Bond)
UNITED STATES OF AMERICA
STATE OF ARKANSAS
COUNTY OF PULASKI
CITY OF LITTLE ROCK
SEWER REFUNDING AND CONSTRUCTION
REVENUE BOND,
SERIES 1993
Interest Rate: % Maturity Date:
Dated Date: September 1, 1993
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 received, hereby promises to pay,
but solely from the source as hereinafter provided and not
otherwise, to the Registered owner shown above upon the
presentation and surrender hereof at the principal corporate office
of Worthen Trust Co., Inc., Little Rock, Arkansas, or its successor
or successors, as Trustee and Paying Agent (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 interest thereon,
but solely from the source as hereinafter provided and not
otherwise, in like coin or currency from the interest commencement
date specified below at the Interest Rate per annum shown above,
payable February 1, 1994 and semiannually thereafter on the first
days of February and August 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.
This bond shall bear interest from the payment date next
preceding the date on which it is authenticated unless it is
authenticated on an interest payment date, in which event it shall
3 °G
bear interest from such date, or unless it is authenticated prior
to the first interest payment date, in which event it shall bear
interest from the Dated Date shown above, or unless it is
authenticated during the period from the Record Date to the next
interest payment date, in which case it shall bear interest from
such interest payment date, or unless at the time of authentication
hereof interest is in default hereon, in which event it shall bear
interest from the date to which interest has been paid.
This bond is one of an issue of City of Little Rock,
Arkansas Sewer Refunding and Construction Revenue Bonds, Series
1993, aggregating Twenty Seven Million Two Hundred Fifteen Thousand
Dollars ($27,215,000) in principal amount (the "bonds "), and is
issued for the purpose of refunding certain outstanding bonds of
the City, financing certain costs of the acquisition, construction
and equipping by the City of extensions, betterments and
improvements to the City's sewer system (the "System ") , and paying
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 (the
"State ") , including particularly Title 14, Chapter 164, Subchapter
4 and Title 14, Chapter 235, Subchapter 2 of the Arkansas Code of
1987 Annotated, and pursuant to ordinance No. duly adopted
on ' 1993 1993 (the "Authorizing ordinance"), 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, prior
to the pledge in favor of the City's Sewer Revenue Bond, Series
1990 and the City's Sewer Revenue Bond, Series 1991. An amount of
net System revenues sufficient to pay the principal of and interest
on the bonds has been duly pledged and set aside into the 1993
Sewer Revenue Bond Fund created by the Authorizing Ordinance.
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
registered owners of the bonds. 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 principal of and interest on the
bonds, including Trustee's fees, as the same become due and
payable, to establish and maintain a debt service reserve and tc
make the required deposit for the depreciation of the System.
(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.)
3 °7
IN WITNESS WHEREOF, the City of Little Rock, Arkansas has
caused this bond to be executed by its Mayor and City Clerk, their
facsimile signatures thereunto duly authorized and its corporate
seal to be impressed or imprinted on this bond, all as of the Dated
Date shown above.
CITY OF LITTLE ROCK, ARKANSAS
ATTEST:
By (facsimile signature)
(facsimile signature) Mayor
City Clerk
(SEAL)
(Reverse Side of Bond)
CITY OF LITTLE ROCK, ARKANSAS
SEWER REFUNDING AND CONSTRUCTION
REVENUE BOND, SERIES 1993
The bonds shall be subject to optional and mandatory
sinking fund redemption as follows:
1. The bonds are also subject to redemption at the
option of the City, from funds from any source, in inverse order of
maturity (bonds within a maturity to be selected by lot in such
manner as the Trustee may determine) in whole at any time or in
part on any interest payment date on and after February 1, 2001, at
a redemption price (expressed as a percentage of the principal
amount being redeemed) plus accrued interest to the redemption date
as follows:
Redemption Dates Redemption Prices
February 1, 2001 through January 31, 2002 101%
February 1, 2002 through January 31, 2003 look%
February 1, 2003 and thereafter 100%
2. To the extent not previously redeemed, the bonds are
subject to mandatory sinking fund redemption by lot in such manner
as the Trustee shall determine, on the dates and in the amounts set
forth below, at a redemption price equal to the principal amount
being redeemed plus accrued interest to the date of redemption:
0
i
Date
February 1, 2011
August 1, 2011
February 1, 2012
August 1, 2012
February 1, 2013
August 1, 2013
February 1, 2014
August 1, 2014 (maturity)
P s 1 p
A 393
Principal Amount
865,000
890,000
910,000
935,000
965,000
990,000
1,015,000
1,045,000
The provisions for mandatory sinking fund redemption of
the bonds are subject to the provisions of the Authorizing
Ordinance which permit the City to receive credit for bonds
previously redeemed or for bonds acquired by the City and
surrendered to the Trustee.
In case any outstanding bond is in a denomination greater
than $5,000, each $5,000 of face value of such bond shall be
treated as a separate bond of the denomination of $5,000.
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 30 nor more
than 60 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
cease 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 limitations 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
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
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other purposes, and neither the City nor the Trustee 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 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.
(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.
Date of Authentication:
WORTHEN TRUST CO., INC.
Little Rock, Arkansas
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 as attorney to
001
transfer the within and on the books kept forregistration thereo;
with full power of substitution in the premises.
DATE:
Transferor
GUARANTEED BY:
NOTICE: Signature(s) must be guaranteed by a member of
or participant in the Securities Transfer Agents Medallion Program
(STAMP) , or in another signature guaranty program recognized by the
Trustee.
Section 9. The rates charged for services of the System
heretofore fixed by ordinances of the City and the conditions,
rights and obligations pertaining thereto, as set out in those
Ordinances, are hereby ratified, confirmed and continued. None of
the facilities or services afforded by the System shall be
furnished without a charge being made therefor. In the event that
the City or any department, agency, or instrumentality thereof
shall avail itself of the facilities and services afforded by the
System, the reasonable value of the service or facilities so
afforded shall be charged against the City or such department,
agency, or instrumentality and shall be paid for as the charges
accrue. The revenues so received shall be deemed to be Revenues
derived from the operation of the System and shall be used and
accounted for in the same manner as the other Revenues derived from
the operation of the System.
The City covenants and agrees that the rates shall never
be reduced while any of the bonds are outstanding unless there is
obtained from an independent certified public accountant
( "Accountant ") a certificate that the Net Revenues of the System
( "Net Revenues" being defined as gross Revenues less the expenses
of operation and maintenance of the System, including all expense
items properly attributable to the operation and maintenance of the
System under generally accepted accounting principles applicable to
municipal sewer facilities, excluding depreciation, interest and
amortization of deferred bond discount expenses), with the reduced
rates, will always be equal to the amount required to be set aside
for the Depreciation Fund (hereinafter identified), and leave a
balance equal to at least 130% of the average annual principal and
interest requirements on all outstanding bonds payable from
Revenues ( "System Bonds "). The City further covenants and agrees
that the rates shall, if and when necessary, from time to time, be
increased in such manner as will produce Revenues at least
sufficient to pay the principal and interest on all System Bonds
when due, to pay the operation and maintenance expenses of the
iya
System, and to deposit the amounts required to be paid into theLl� x
Depreciation Fund and the Debt Service Reserve in accordance with
this Ordinance.
The City covenants and agrees that the existing rates
will produce total Revenues at least sufficient to pay the
operation and maintenance expenses of the System, pay the principal
or and premium, if any, and interest on all outstanding System
Bonds and Trustee's fees in connection therewith, and make the
required deposit into the Debt service Reserve and the Depreciation
Fund.
Section 10. The system shall be continuously operated as
• revenue producing undertaking and all Revenues shall be paid into
• special fund created pursuant to the provisions of the 1966
Ordinance and designated "Sewer Fund." The Revenues so deposited
in the Sewer Fund are hereby pledged and shall be applied to the
payment of the reasonable and necessary expenses of operation,
repair and maintenance of the System, to the payment of the
principal of and premium, if any, and interest on System Bonds, to
the establishment and maintenance of a debt service reserve, and to
the providing of a Depreciation Fund, as hereafter set forth. The
Sewer Fund, and the other special funds hereafter in this Ordinance
provided for or referred to, shall be maintained in such
depositories of the City as shall from time to time be designated
by the Committee, with all such depositories to hold membership in
the Federal Deposit Insurance Corporation (the "FDIC "), to be
located in Little Rock, Arkansas, and to have a capital and surplus
of not less than $15,000,000, and with all deposits in any
depository in excess of the amount insured by the FDIC to be
secured by bonds or other direct or fully guaranteed obligations of
the United States of America unless invested in accordance with
Section 27 hereof.
Section 11. There shall be paid from the Sewer Fund into
a fund created pursuant to the provisions of the 1966 Ordinance and
designated "Sewer Operation and Maintenance Fund" on or before the
tenth day of each month while any bonds are outstanding, an amount
sufficient to pay the'reasonable and necessary monthly expenses of
operation, repair and maintenance of the System for such month and
from which disbursements shall be made only for those purposes.
Fixed annual charges such as insurance premiums and the cost of
major repair and maintenance expenses may be computed and set up on
an annual basis, and one - twelfth (1/12) of the amount thereof may
be paid into the Operation and Maintenance Fund each month.
If in any month for any reason there shall be a failure
to transfer and pay the required amount into Operation and
Maintenance Fund, the amount of any deficiency shall be added to
the amount otherwise required to be transferred and paid into such
fund in the next succeeding month. If in any fiscal year a surplus
shall be accumulated in the Operation and Maintenance Fund over and
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M = M
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402
above the amount which shall be necessary to defray the reasonable'
and necessary cost of operation, repair and maintenance of the
System during the remainder of the then current fiscal year and the
next ensuing fiscal year, such surplus may be transferred and
deposited in the Sewer Fund.
Section 12. (a) After making the required monthly
deposits into the Operation and Maintenance Fund, there shall be
paid from the Sewer Fund into a special fund in the name of the
City which is hereby created and designated the 111993 Sewer Revenue
Bond Fund" (the "Bond Fund ") on or before the fifteenth day of each
month, commencing in September, 1993, until all outstanding bonds,
with interest thereon, have been paid in full or provision made for
such payment a sum equal to 1/6 of the next installment of
principal and interest due on the bonds; provided, however, that
payments made into the Bond Fund for the first five (5)months shall
be increased to 1/5 of the next installment of principal and
interest due on the bonds.
The City shall also pay into the Bond Fund such
additional sums as necessary to provide for the Trustee's fees and
expenses and any arbitrage rebate due the United States Treasury
under Section 148(f) of the Internal Revenue Code of 1986, as
amended (the "Code ") . The City shall realize a credit against
monthly deposits into the Bond Fund from bond proceeds deposited
therein, all interest earnings on moneys in the Bond Fund and all
transfers made from the Debt Service Reserve during the preceding
month.
There is hereby created, as a part of the Bond Fund, a
Debt Service Reserve which shall be maintained by the City in an
amount equal to 75% of the maximum annual principal and interest
requirements on the bonds and any parity bonds issued under Section
16 hereof or 10% of the aggregate principal proceeds of such bonds
as originally issued, whichever is lesser (the "Required Level ").
Should the Debt Service Reserve become impaired or be reduced below
the Required Level, the City shall make additional monthly payments
from the Sewer Fund until the impairment or reduction is corrected
within a twenty -four month period.
If for any reason the City should fail at any time to
make any of the required payments into the Bond Fund, any sums then
held in the Debt Service Reserve shall be used to the extent
necessary for the payment of principal of or interest on the bonds,
with Trustee's fees but the Debt Service Reserve shall be
reimbursed from the Sewer Fund before any moneys in the Sewer Fund
shall be used for any other purpose other than the making of
payments required to be made into the Operation and Maintenance
Fund and the Bond Fund. The Debt Service Reserve shall be used
solely as provided herein.
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If Revenues are insufficient to make the required payment
on the first business day of the following month into the Bond
Fund, the amount of any such deficiency in the payment made shall
be added to the amount otherwise required to be paid into the Bond
Fund on the first business day of the next month.
When the moneys held in the Bond Fund shall be and remain
sufficient to pay the principal of and interest on all of the bonds
then outstanding plus Trustee's fees and any arbitrage rebate due
as provided above, the City shall not be obligated to make any
further payments into the Bond Fund.
It shall be the duty of the City to cause to be withdrawn
from the Bond Fund at least five (5) business 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's fee. There shall also be withdrawn and paid to the
United States Treasury any arbitrage rebate due at the times and in
the amounts required by Section 148(f) of the Code. No withdrawal
of funds from the Bond Fund shall be made for any other purpose
except as otherwise authorized in this Ordinance.
The bonds shall be specifically secured by a pledge of
all Revenues. 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 13. After making the deposits into the Operation
and Maintenance Fund and the Bond Fund, there shall be transferred
from the Sewer Fund into the "ADFA Bond Fund" created by the 1990
Ordinance the amounts required by the 1990 Ordinance and the 1991
Ordinance to be paid into such fund.
Section 14. After making the required payments into
the operation and Maintenance Fund, the Bond Fund and the ADFA Bond
Fund, there shall be paid from the Sewer Fund into the "Sewer
Depreciation Fund" (the "Depreciation Fund ") created pursuant to
the provisions of the 1966 Ordinance on or before the 10th day of
each month while any bonds are outstanding, three percent (3 %) of
the Revenues which remain after the required payment into the
Operation and Maintenance Fund has been made. The moneys in the
Depreciation Fund shall be used solely for the purpose of paying
the cost of replacements made necessary by the depreciation of the
System. If in any fiscal year a surplus shall be accumulated in
the Depreciation Fund over and above the amount necessary to defray
the cost of the probable replacements during the then current
fiscal year and the next ensuing fiscal year, such surplus may be
transferred and paid into the Sewer Fund.
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Section 15. Any surplus in the Sewer Fund, after making
the required monthly deposits into the other funds as set forth
above, may be used, at the option of the City, for any lawful
purpose of the System, as approved by the Committee.
Section 16. So long as any of the Bonds are outstanding,
the City shall not issue or attempt to issue any bonds claimed to
be entitled to a priority of lien on Revenues over the lien
securing the bonds. The City reserves the right to issue
additional bonds to finance or pay the cost of making any future
extensions, betterments or improvements to the System, or to refund
bonds issued for such purposes, but the City shall not authorize or
issue any such additional bonds ranking on a parity with the bonds
unless and until there have been procured and filed with the City
Clerk and the Trustee a statement by an Accountant 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 System Bonds and
the additional bonds then proposed to be issued. The term "Net
Revenues" means gross Revenues less operation and maintenance
expenses other than depreciation, interest and amortization of
deferred bond discount expenses, determined in accordance with
generally accepted accounting principles. In making the
computation set forth above, the City, and the Accountant on behalf
of the City, may, based upon the opinion or report of a registered
professional engineer not in the regular employ of the City, treat
any increase in rates for the System enacted subsequent to the
first day of such preceding fiscal year as having been in effect
during or throughout such fiscal year and may include in gross
Revenues for such fiscal year the amount that would have been
received, based on such opinion or report, had the increase been in
effect during or throughout such fiscal year.
Section 17. 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 full insurable value
thereof, in a responsible insurance company or companies selected
by the Committee and authorized and qualified under the laws of the
State 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, lightning, tornados, winds, riot,
strike, civil commotion, malicious damage, explosion and against
any other loss or damage from any other causes customarily insured
against by private companies engaged in similar types of business.
The insurance policies are to carry a clause making them payable to
the Committee and the Trustee as their interests may appear, and
are either to be placed in the custody of the Trustee or
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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 Sewer Fund, and if such proceeds
shall be insufficient for such purposes the deficiency shall be
supplied first from moneys in the Depreciation Fund and second from
moneys in the Operation and Maintenance Fund and third from surplus
moneys in the Sewer 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 18. The bonds shall be subject to redemption
prior to maturity in accordance with the terms set out in the bond
form. The City may acquire bonds by purchase at a price not in
excess of par plus accrued interest, inclusive of brokerage fees,
and surrender to the Trustee any bonds so acquired, in exchange for
which the City shall receive a credit under this ordinance in an
amount equal to the principal amount of the bonds so acquired and
surrendered, for and of the then next date for mandatory sinking
fund redemption of bonds of the same maturity.
Section 19. The Committee will keep proper books of
accounts and records (separate from all other records and accounts
of the City) 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 registered owner of
any of the bonds at reasonable times and under reasonable
circumstances. The City and the Committee agree to have these
records audited by an Accountant at least once each year, and a
copy of the audit shall be delivered to the Trustee and made
available to interested registered owners requesting the same in
writing. In the event that the City or the Committee fail or
refuse 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 Operation and Maintenance Fund.
Section 20. Any bond shall be deemed to be paid within
the meaning of this Ordinance when payment of the principal of and
interest on such bond (whether at maturity or upon redemption as
provided herein, or otherwise) , either (i) shall have been made or
caused to be made in accordance with the terms thereof, or (ii)
shall have been provided for by irrevocably depositing with the
Trustee, in trust and irrevocably set aside exclusively for such
payment (1) cash fully insured by the FDIC sufficient to make such
payment and /or (2) direct obligations of (including obligations
issued or held in book entry form on the books of) the Department
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of the Treasury of the United States of America ( "Investment
Securities ") (provided that such deposit will not affect the tax
exempt status of the interest on any of the bonds or cause any of
the bonds to be classified as "arbitrage bonds" within the meaning
of Section 148 of the Code), maturing as to principal and interest
in such amounts and at such times as will provide sufficient moneys
to make such payment, and all necessary and proper fees,
compensation and expenses of the Trustee shall have been paid or
the payment thereof provided for to the satisfaction of the
Trustee.
On the payment of any such bonds within the meaning of
this Ordinance, the Trustee shall hold in trust, for the benefit of
the owners of such bonds, all such moneys and /or Investment
Securities.
When all the bonds shall have been paid within the
meaning of this Ordinance, if the Trustee has been paid its fees
and expenses and if any arbitrage rebate due the United States
Treasury has been paid or provided for to the satisfaction of the
Trustee, the Trustee shall take all appropriate action to cause (i)
the pledge and lien of this ordinance to be discharged and
cancelled, and (ii) all moneys held by it pursuant to this
Ordinance and which are not required for the payment of such bonds
to be paid over or delivered to or at the direction of the City.
In determining the sufficiency of the deposit of Investment
Securities 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 21. If there be any default in the payment of
the principal of or interest on any of the bonds, or if the City
defaults in any Bond Fund requirement or 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 10% 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 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.
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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 owner 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 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 Ordinance or by law.
The Trustee may, and upon the written request of the
registered owners of not less than 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, 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
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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 registered owners of the bonds, respectively, may be
exercised from time to time and as often as may be deemed
expedient.
In any proceeding in which any plaintiff bondholder
prevails 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.
Section 22. (a) The terms of this Ordinance shall
constitute a contract between the City and the registered owners of
the bonds and no variation or change in the undertaking herein set
forth shall be made while any of these bonds are outstanding,
except as hereinafter set forth in subsections (b) and (c) , and the
owner of any bonds may at any time for and on his own behalf or for
and on behalf of all bondholders enforce the obligations of the
City by a proper suit for that purpose.
(b) The Trustee may consent to any variation or change
in this Ordinance without the consent of the owners of the
outstanding bonds in connection with the issuance of additional
parity bonds under this Ordinance or in order to cure any
ambiguity, defect or omission herein or to correct or supplement
any defective or inconsistent provisions contained herein as the
City may deem necessary or desirable and not inconsistent herewith
and which shall not adversely affect the interests of the owners of
the bonds.
(c) The owners of not less than 75% in aggregate
principal amount of the bonds then outstanding shall have the
right, from time to time, anything contained in this Ordinance to
the contrary notwithstanding, to consent to and approve the
adoption by the City of such ordinance supplemental hereto 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 contained in this Ordinance or in any
supplemental ordinance; provided, however, that nothing contained
in this Section shall permit or be construed as permitting (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 or
pledge superior to the lien and pledge created by this 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 consent to such supplemental ordinance.
Section 23. 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
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Price. The accrued interest shall be remitted to the City
Treasurer for deposit into the Bond Fund. The expenses of issuing
the bonds as set forth in the delivery instructions to the Trustee
signed by the Mayor and City Clerk shall also be paid from the
Purchase Price (the "Delivery Instructions ") . The amount necessary
from the Purchase Price to refund the 1987 Bonds as set forth in
the Delivery Instructions shall be deposited into an escrow account
(the "Escrow Account ") with the trustee for the owners of the 1987
Bonds. The remainder of the Purchase Price shall be remitted to
the City Treasurer for deposit into a special account in the name
of the City designated "Sewer Revenue Bond Construction Fund"
( "Construction Fund ") in a depository selected by the Committee
that is a member of FDIC. The moneys in the Construction Fund in
excess of the amount insured by FDIC shall be continuously secured
by direct obligations of, or obligations the principal of and
interest on which, are unconditionally guaranteed by the United
States of America. The moneys in the Construction Fund shall be
disbursed solely 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. 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 City
Treasurer and co- signed by either the Manager or Finance Director
of the System. In the case of requisitions, the depository shall
issue its check upon the Construction Fund payable to the person,
firm or corporation designated in the requisition. The depository
of the Construction Fund 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 Manager, 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
depository of the Construction Fund, and a copy with the Trustee,
and upon receipt thereof the depository of the Construction Fund
shall transfer any remaining balance to the Bond Fund.
Section 24. In the event the office of Mayor, City
Clerk, City Treasurer, Committee or Board of Directors 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,
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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.
So long as the System is under the control of the
Committee, performance by the Committee of any obligation of the
City hereunder shall be deemed performance by the City. The
Committee presently consists of Henry C. Kelley, Jr., Patrick
Miller, Robert L. Lane, George S. Ivory and Brenda James.
Section 25. (a) The City covenants that it shall not take
any action or suffer or permit any action to be taken or conditions
to exist which causes or may cause the interest payable on the
bonds to be included in gross income for federal income tax
purposes. Without limiting the generality of the foregoing, the
City covenants that the proceeds of the sale of the bonds and
Revenues 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 Code.
(b) The City shall assure that (1) not in excess of 10%
of the Net Proceeds of the bonds is used for Private Business Use
if, in addition, the payment of more than 10% of the principal or
10% of the interest due on the bonds during the term thereof is,
under the terms of the bonds or any underlying arrangement,
directly or indirectly secured by any interest in property used or
to be used for a Private Business Use or in payments in respect of
property used or to be used for a Private Business Use or is to be
derived from payments, whether or not to the City, in respect of
property or borrowed moneys used or to be used for a Private
Business Use; and (ii) that, in the event that both (A) in excess
of 5% of the Net Proceeds of the bonds are used for a Private
Business Use, and (B) an amount in excess of 5% of the principal or
5% of the interest due on the bonds during the term thereof is,
under the terms of the bonds or any underlying arrangement,
directly or indirectly, secured by any interest in property used or
to be used for said Private Business Use or in payments in respect
of property used or to be used for said Private Business Use or is
to be derived from payments, whether or not to the City, in respect
of property or borrowed money used or to be used for said Private
Business Use, then said excess over said 5% of Net Proceeds of the
bonds used for a Private Business Use shall be used for a Private
Business Use related to the governmental use of the improvements or
the improvements financed or refinanced by the 1987 Bonds.
The City shall assure that not in excess of 5% of the Net
Proceeds of the bonds are used, directly or indirectly, to make or
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finance a loan to persons other than state or local governmental
units.
As used in this subsection (b) , the following terms shall
have the following meanings:
"Net Proceeds" means the face amount of the bonds, plus
accrued interest and premium, if any, less original issue discount,
if any, less any amounts deposited into the Debt Service Reserve
from bond proceeds.
"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.
(c) The City covenants that it will take no action which
would cause the bonds to be "federally guaranteed" within the
meaning of Section 149(b) of the Code. Nothing in this Section 25
shall prohibit investments in bonds issued by the United States
Treasury.
(d) The City covenants that it will submit to the
Secretary of the Treasury of the United States, not later than the
15th day of the second calendar month after the close of the
calendar quarter in which the bonds are issued, a statement
required by Section 149(e) of the Code.
(e) The City covenants that it will not reimburse itself
from proceeds of the bonds for costs paid prior to the date the
bonds are issued except in compliance with United States Treasury
Regulation No. 1.103 -18.
(f) The City covenants that it will, in compliance with
the requirements of Section 148(f) of the Code, pay with moneys in
the Bond Fund to the United States Government in accordance with
the requirements of Section 148(f) of the Code, from time to time,
an amount equal to the sum of (1) the excess of (A) the amount
earned on all Non- purpose Investments (as therein defined)
attributable to the bonds, other than investments attributable to
such excess over (B) the amount which would have been earned if
such Non - purpose Investments attributable to the bonds were
invested at a rate equal to the Yield (as defined in the Code) on
the bonds, plus (2) any income attributable to the excess described
in (1), subject to the exceptions set forth in Section 148 of the
Code. The City further covenants that in order to assure
compliance with its covenants herein, it will employ a qualified
consultant to advise the City in making the determination required
to comply with this subsection (f) . Anything herein to the
contrary notwithstanding this provision may be modified or
rescinded if in the opinion of Bond Counsel such modification or
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rescission will not affect the tax - exempt status of the bonds for
federal income tax purposes.
Section 26. 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 owners of
not less than 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 60 days' notice
in writing to the City Clerk and to the registered owners of the
bonds, and the majority in value of the registered owners 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
registered owners of the outstanding bonds may appoint a new
Trustee, such appointment to be evidenced by a written instrument
or instruments filed with the City Clerk. If the majority in value
of the registered owners of the outstanding bonds of this issue
shall fail to fill a vacancy within 45 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. Every
successor Trustee appointed pursuant to this Section shall be a
trust company or bank in good standing located in or incorporated
under the laws of the State, duly authorized to exercise trust
powers and subject to examination by federal or state authority.
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 owners 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. The Trustee's resignation shall become effective
upon the acceptance of the trusts by the successor Trustee.
Section 27. (a) Moneys held for the credit of the Bond
Fund shall be continuously invested and reinvested pursuant to the
direction of the Committee in direct or fully guaranteed
obligations of the United States of America ( "Government
Obligations ") or certificates of deposit or time deposits of banks,
including the Trustee, which are insured by FDIC or, if in excess
of insurance coverage, collateralized by Government Obligations
(collectively, "Permitted Investments ") , 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 the payment date for
interest or principal and interest.
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(b) Moneys held for the credit of the Debt Service
Reserve shall be invested and reinvested at the direction of the
Committee in Permitted Investments, 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 seven (7) years after the
date of investment or the maturity date of the bonds whichever is
earlier.
(c) Moneys held for the credit of any other fund shall
be continuously invested and reinvested pursuant to the direction
of the Committee in Permitted Investments 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 will be required
for purposes intended.
(d) obligations so purchased as an investment of moneys
in any fund shall be deemed at all times to be a part of such fund
and the interest accruing thereon and any profit realized from such
investments shall be credited to such fund, and any loss resulting
from such investment shall be charged to such fund, except that
interest earnings and profits on investments of moneys in the Debt
Service Reserve which increase the amount thereof above the
Required Level shall to the extent of any such excess be
transferred from time to time into the Bond Fund.
(e) Moneys so invested in Government Securities or in
certificates of deposit of banks to the extent insured by FDIC,
need not be secured by the depository bank or banks.
(f) All investments and deposits shall have a par value
(or market value when less than par) , exclusive of accrued interest
at all times at least equal to the amount of money credited to such
funds and shall be made in such a manner that the money required to
be expended from any fund will be available at the proper time or
times.
(g) Investments of moneys in all funds shall be valued
in terms of current market value as of the first day of each year,
except that direct obligations of the United States (State and
Local Government Series) in book -entry form shall be continuously
valued at par or face principal amount.
(h) The City covenants that it will make all arbitrage
rebate payments to the United States in accordance with Section
148(f) of the Code.
Section 28. All moneys in the 1987 Sewer Revenue Bond
Fund established pursuant to the 1987 Ordinance, including the debt
service reserve therein, are hereby appropriated and shall be used
as follows: the amount necessary to fund the Debt Service Reserve
25
in the Bond Funshall be used for that wrpose; the amount 4
necessary, after application of bond proceeds in accordance with
Section 23 hereof, to refund the 1987 Bonds shall be deposited into
the Escrow Account; and the balance shall be deposited into the
Bond Fund.
Section 29. It is covenanted and agreed by the City
with the registered owners of the bonds, or any of them, that the
City and the Committee will faithfully and punctually perform all
duties with reference to the System required by the Constitution
and laws of the State, including the charging and collecting of
reasonable and sufficient rates lawfully established for services
rendered by the System, the segregating of Revenues as herein
required, and the applying, of Revenues to the respective funds
herein created or referred to.
Section 30. The City covenants that it will not sell or
lease the same, or any substantial portion thereof; 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 the efficient operation of the
System as a revenue - producing undertaking. All revenues derived
from such dispositions shall be deposited into the Sewer Fund.
Section 31. Friday, Eldredge & Clark is hereby
appointed to act as Bond Counsel in connection with the issuance of
the bonds.
Section 32. 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 this Ordinance.
Section 33. All ordinances and resolutions or parts
thereof, in conflict herewith are hereby repealed to the extent of
such conflict.
M_
ccntinn *_ Tt iG herebv ascertain 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: July 28,
ATTEST:
As City Clerk
(SEAL)
1993.
APPROVED' /
Mayor, Jim Dailey
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415