18860I ORDINANCE NO. 18,860
2
3 AN ORDINANCE AUTHORIZING THE ISSUANCE OF A
4 PROMISSORY NOTE TO PROVIDE SHORT -TERM
5 FINANCING UNDER AMENDMENT NO. 78 TO THE
6 ARKANSAS CONSTITUTION FOR THE ACQUISITION,
7 CONSTRUCTION AND INSTALLATION OF REAL AND
8 TANGIBLE PERSONAL PROPERTY; AND PRESCRIBING
9 OTHER MATTERS PERTAINING THERETO.
to
I 1 WHEREAS, the City of Little Rock, Arkansas (the "City") is authorized and
12 empowered under the provisions of Amendment No. 78 to the Arkansas Constitution
13 ( "Amendment No. 78 ") and Act No. 1808 of 2001 (codified as Title 14, Chapter 78 of the
14 Arkansas Code of 1987 Annotated) (the "Act "), to issue notes and to expend the
15 proceeds thereof to finance all or a portion of the cost of acquiring, constructing and
16 installing real property or tangible personal property having an expected useful life of
17 more than one (1) year; and
18 WHEREAS, pursuant to Resolution No. 11,470, adopted March 4, 2003, the City
19 has acquired and installed vehicles, equipment and other tangible personal property
20 and plans on acquiring and installing additional vehicles, equipment and other tangible
21 personal property in fiscal year 2003; and
22 WHEREAS, the City proposes to construct properties for the parks and fire
23 departments; and
24 WHEREAS, such properties heretofore described in the WHEREAS clauses of
25 this Ordinance are hereinafter referred to collectively as the 'Property;" and
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Ordinance
Awhon ring ShortTerm Finanang
For Real and Personal Property
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WHEREAS, it is proposed that the City issue its promissory note in the principal
2 amount of $4,250,000 (the "Note ") under Amendment No. 78 and the Act for the
3 purpose of financing all or a portion of the costs of the acquisition, construction and
4 installation of the Property; and
5 WHEREAS, the City intends to arrange for a loan (the "Loan ") from a banking
6 institution (the "Lender ") and to issue the Note to the Lender in consideration for the
7 Loan;
8 NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF DIRECTORS
9 OF THE CITY OF LITTLE ROCK, ARKANSAS:
10 Section 1. The Board of Directors hereby finds that the Property is tangible
11 personal property or real property and will have a useful life of more than one (1) year.
12 The Board of Directors further find that the aggregate principal amount of the Note and
13 the City's Promissory Notes, dated February 11, 2002 and September 25, 2002, does not
14 exceed five percent (5 %) of the assessed value of taxable property located within the
15 City as determined by the last tax assessment.
16 Section 2. Under the authority of the Constitution and laws of the State of
17 Arkansas (the "State "), including particularly Amendment No. 78 and the Act, the Note
18 is hereby authorized and ordered issued in the principal amount of $4,250,000 for the
19 purpose of financing all or a portion of the costs of acquiring, constructing and
20 installing the Property and paying expenses of issuing the Note. The Note shall be
21 dated the date of issuance and shall bear interest on the outstanding principal amount
22 at a fixed rate not to exceed 5.75% per annum. The Note shall be repaid in five annual
23 amortized installments of principal and interest, commencing one year from the date of
24 the Note and on the same day of each year thereafter, with the final installment due five
25 years from the date of the Note.
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Ordinance
Authorizing Short -Term Financing
For Real and Personal Property
I Section 3. The Note shall be issued to the Lender in consideration for the Loan.
2 The Lender shall be selected by the Mayor based upon the commitment or proposal for
3 the Loan that the Mayor determines to have the lowest cost to the City. The City
4 Treasurer is hereby authorized and directed to solicit proposals or commitments for the
5 Loan from at least three banking institutions having offices in the City, in such manner
6 as shall be approved by the Mayor. The Mayor shall have the right to reject any and all
7 proposals and commitments.
8 Section 4. As provided in Amendment No. 78, the annual debt service payments
9 on the Note in each fiscal year shall be charged against and paid from the general
10 revenues of the City for such fiscal year. For the purpose of making the annual debt
11 service payments, there is hereby, and shall be, appropriated to pay the Note, an
12 amount of general revenues of the City sufficient for such purposes. The City Treasurer
13 is hereby authorized and directed to withdraw from the General Fund of the City the
14 amounts and at the times necessary to make the annual debt service payments on the
15 Note.
16 Section 5. (a) The City covenants with the owner of the Note (the "Owner ")
17 from time to time that it shall not take any action or suffer or permit any action to be
18 taken or condition to exist which causes or may cause the interest payable on the Note
19 to be included in gross income for federal income tax purposes. Without limiting the
20 generality of the foregoing, the City covenants with the Owner that the proceeds of the
21 sale of the Note will not be used directly or indirectly in such manner as to cause the
22 Note to be treated as an "arbitrage bond" within the meaning of Section 148 of the
23 Internal Revenue Code of 1986, as amended (the "Code ").
24 (b) The City covenants with the Owner that it will not use or permit the use of
25 the Property or the proceeds of the Note, in such manner as to cause the Note to be a
26 "private activity bond" within the meaning of Section 141 of the Code. In this regard, the
27 City covenants with the Owner that (i) it will not use (directly or indirectly) the
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Ordinance
Author zing ShortTerm Financing
For Real and Personal Property
I proceeds of the Note to make or finance loans to any person, and (ii) that while the Note
2 is outstanding the Property will only be used by state and local governmental entities
3 and by other persons on a basis as members of the general public.
4 (c) The City covenants with the Owner that it will not reimburse itself from
s Note proceeds for any costs paid prior to the date the Note is issued except in
6 compliance with United States Treasury Regulation No. 1.150 -2. This Ordinance shall
7 constitute an 'official intent" for purposes of the Regulation.
8 (d) The City covenants with the Owner that it will submit to the Secretary of
9 the Treasury of the United States, not later than the 15th day of the second calendar
io month after the close of the calendar quarter in which the Note is issued, a statement
11 concerning the Note which contains the information required by Section 149(e) of the
12 Code.
13 Section 6. The City shall provide such financial information to the Lender as the
14 Lender may reasonably request.
15 Section 7. The Mayor and City Clerk, for and on behalf of the City, are hereby
16 authorized and directed to do any and all things necessary to affect the issuance,
17 execution, and delivery of the Note, and the performance of all acts of whatever nature
18 necessary to affect and carry out the authority conferred by this Ordinance. The Mayor
19 and City Clerk are hereby further authorized and directed, for and on behalf of the City,
20 to execute all papers, documents, certificates and other instruments that may be
21 required for the carrying out of such authority or to evidence the exercise thereof.
22 Section 8. The provisions of this Ordinance are hereby declared to be separable,
23 and if any section, phrase or provision shall for any reason be declared to be invalid,
24 such declaration shall not affect the validity of the remainder of the sections, phrases
25 and provisions.
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Ordinmce
Authontung ShortTerm Financing
For Real and Personal Property
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I Section 9. All ordinances, resolutions and parts thereof in conflict herewith are
2 hereby repealed to the extent of such conflict.
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4 PASSED: May 6, 2003.
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6 ATTEST:
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9 Nancy ood, eity Clerk
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it APPROVED AS TO FORM:
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13—°�
14 Thomas M. Carpenter, City ttorney
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APPROVED:
Jim iley, Mayor
Ordinance
Authorizing ShortTerm Finandng
For Neal and Personal Property