205051
2
2011068103 Received: 1.1116/2011 3:59:07 PM
Recorded: 11/16/2011 04:02:36 PM Filed &
Recorded in Offic iI Records of Larry Ci :a. .ie,
PULASKI COUNTY CIRCUIT /COUNTY CLERK
ORDINANCE NO. 20,505 Fees $30.00
3 AN ORDINANCE AUTHORIZING THE ISSUANCE OF A PROMISSORY
4 NOTE TO PROVIDE SHORT -TERM FINANCING UNDER AMENDMENT
5 NO. 78 TO THE ARKANSAS CONSTITUTION FOR THE ACQUISITION
6 AND INSTALLATION OF REAL AND TANGIBLE PERSONAL
7 PROPERTY; PROVIDING FOR THE PAYMENT OF THE PRINCIPAL OF
8 AND INTEREST ON THE NOTE; TO DECLARE AN EMERGENCY; AND
9 FOR OTHER PURPOSES.
10
11 WHEREAS, the City of Little Rock, Arkansas (the "City ") is authorized and empowered under the
12 provisions of Amendment No. 78 to the Arkansas Constitution ( "Amendment No. 78 ") and Act No. 1808 of
13 2001 (codified as Title 14, Chapter 78 of the Arkansas Code of 1987 Annotated) (the "Act "), to issue
14 promissory notes and to expend the proceeds thereof to finance all or a portion of the cost of acquiring,
15 constructing, and installing real property or tangible personal property having an expected useful life of more
16 than one year; and
17 WHEREAS, the City proposes to acquire vehicles and equipment for the Fire, Public Works and
18 Waste Disposal Departments of the City (collectively, the "Property"); and
19 WHEREAS, it is proposed that the City issue a promissory note in the principal amount of $4,600,000
20 (the "Note ") under Amendment No. 78 and the Act for the purpose of financing all or a portion of the costs of
21 the acquisition and installation of the Property; and
22 WHEREAS, the City intends to arrange for a loan (the "Loan ") from a financial institution (the
23 "Lender ") and to issue the Note to the Lender at a price of par in consideration for the Loan; and
24 NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF DIRECTORS OF THE CITY
25 OF LITTLE ROCK, ARKANSAS, THAT:
26 Section 1. The Board of Directors hereby finds that the Property is real property or tangible personal
27 property having a useful life of more than one year. The Board of Directors further finds that the sum of the
28 principal amount of the Note and the aggregate outstanding principal amount of the City's Promissory Notes
29 dated May 1, 2007, July 19, 2007, and September 25, 2008, does not exceed 5% of the assessed value of
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taxable property located within the City as determined by the last tax assessment completed before the issuance
of the Note. ,,•�``�NE CIR",�'•,,
[Page 1 of 4] ; 9 �•\\
�ovNTV, P�',
1 Section 2. Under the authority of the Constitution and laws of the State of Arkansas, including
2 particularly Amendment No. 78 and the Act, the Notes are hereby authorized and ordered issued in the
3 principal amount of $4,600,000 for the purpose of financing all or a portion of the costs of acquiring and
4 installing the Property and paying expenses of issuing the Note. The Note shall be shall be dated the date of its
5 issuance and shall bear interest on the outstanding principal amount at a fixed rate not to exceed 5.5% per
6 annum (calculated on the basis of the actual number of days elapsed in a year of 365 days (366 days in a leap
7 year)). The Note shall be repaid in five (5) substantially equal annual amortized installments of principal and
8 interest, commencing one (1) -year from the date of the Note and continuing on the same day of each year
9 thereafter, with the final installment due five (5) years from the date of the Note. The Note shall be issued in
10 fully registered form.
11 Section 3. The Note shall be issued to the Lender in consideration for the Loan. The Lender shall be
12 selected by the City Manager based upon the commitment or proposal for the Loan that the City Manager
13 determines to have the lowest cost to the City. The City Treasurer is hereby authorized and directed to solicit
14 proposals or commitments for the Loan from at least three (3) financial institutions having offices in Pulaski
15 County, or having requested to be solicited, in such manner as shall be approved by the City Manager. The
16 City Manager shall have the right to reject any and all proposals and commitments.
17 Section 4. As provided in Amendment No. 78, the annual debt service payments on the Note in each
18 fiscal year shall be charged against and paid from the general revenues of the City for such fiscal year. For the
19 purpose of making the annual debt service payments, there is hereby, and shall be, appropriated to pay the
20 Note, an amount of general revenues of the City sufficient for such purposes. The City Treasurer is hereby
21 authorized and directed to withdraw from the General Fund of the City the amounts and at the times necessary
22 to make the annual debt service payments on the Note.
23 Section 5. The City covenants with the owner of the Note (the "Owner ") from time to time as follows:
24 (a) The City shall not take any action or suffer or permit any action to be taken or condition to exist
25 which causes or may cause the interest payable on the Note to be included in gross income for federal income
26 tax purposes. Without limiting the generality of the foregoing, the City covenants with the Owner that the
27 proceeds of the sale of the Note will not be used directly or indirectly in such manner as to cause the Note to be
28 treated as an "arbitrage bond" within the meaning of section 148 of the Internal Revenue Code of 1986, as
29 amended (the "Code ").
30 (b) The City will not use or permit the use of the Property or the proceeds of the Note in such manner
31 as to cause the Note to be a "private activity bond" within the meaning of section 141 of the Code.
[Page 2 of 41
1 (c) None of the gross proceeds of the Note will be used (directly or indirectly) either to make or
2 finance loans to persons other than state or local governmental units or in any trade or business carried on by
3 any person other than a State or local governmental unit or other than as a member of the general public.
4 (d) The City will take no action which would cause the Note to be "federally guaranteed" within the
5 meaning of the Code.
6 (e) The City will not reimburse itself from Note proceeds for any costs paid prior to the date the Note
7 is issued except in compliance with United States Treasury Regulation §1.150-2. This Ordinance shall
8 constitute an "official intent" for purposes of the Regulation.
9 (f) The City will submit to the Secretary of the Treasury of the United States, not later than the 15th
10 day of the second calendar month after the close of the calendar quarter in which the Note is issued, a
11 statement concerning the Note which contains the information required by section 149(e) of the Code.
12 Section 6. The City shall provide such financial information to the Lender as the Lender may
13 reasonably request.
14 Section 7. The Mayor, City Manager, City Clerk and City Treasurer, for and on behalf ofthe City, are
15 hereby authorized and directed to do any and all things necessary to effect the issuance, execution, and delivery
16 of the Note and the performance of all acts of whatever nature necessary to effect and carry out the authority
17 conferred by this Ordinance. The Mayor, City Manager, City Clerk and City Treasurer are hereby further
18 authorized and directed, for and on behalf of the City, to execute all papers, documents, certificates, and other
19 instruments that may be required for the carrying out of such authority or to evidence the exercise thereof.
20 Section 8. Severability. In the event any title, section, paragraph, item, sentence, clause, phrase, or
21 word of this ordinance is declared or adjudged to be invalid or unconstitutional, such declaration or
22 adjudication shall not affect the remaining portions of this ordinance, which shall remain in full force and
23 effect as if the portion so declared or adjudged invalid or unconstitutional was not originally a part of this
24 ordinance.
25 Section 9. Repealer. All ordinances or resolutions of the City in conflict herewith are hereby repealed
26 to the extent of such conflict.
27 Section 10. Emergency. The Board of Directors hereby determines that the Property must be acquired
28 and installed as soon as possible in order to alleviate immediate hazards to the health, safety, and welfare of the
29 City, its inhabitants, and their property, and that the Property can be acquired and installed only by the issuance
30 of the Notes. It is, therefore, declared that an emergency exists and this ordinance, being necessary for the
31 immediate preservation of the public peace, health, and safety, shall take effect and be enforced from and after
32 its passage.
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1 PASSED: November 15, 2011
2 ATTEST:
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6 Sus n ey, City Clerk
7 APPROV AS TO LEGAL FORM:
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10 z4 � Ki(
11 Thomas M. Carpenter, City littorney
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[Page 4 of 4]
APPROVED:
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Mark Stodola, Mayor