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ORDINANCE NO. 12,634 _
AN ORDINANCE PROVIDING FOR THE ISSUANCE OF
SEWER REVENUE BONDS (INTERIM) , BY THE CITY OF
LITTLE ROCK, ARKANSAS FOR THE PURPOSE OF
FINANCING THE COST OF CONSTRUCTING EXTENSIONS,
BETTERMENTS AND IMPROVEMENTS TO THE SANITARY
SEWER SYSTEM; 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 ") owns and
operates a Sanitary Sewer System (the "System "); and
WHEREAS, the City has undertaken the construction of extensions,
betterments and improvements to the System (the "improvements "); and
WHEREAS, the improvements include water pollution control facilities,
and the City is eligible for federal financial assistance under the provisions
of the Federal Water Pollution Control Act, 33 U.S.C.A. § 1151, et seq.; and
WHEREAS, permanent financing of the improvements is being obtained
from federal grant funds, a State Grant (hereinafter described), and available
City funds; and
WHEREAS, it is necessary to the obtaining of maximum federal
assistance that the City receive from the Department of Pollution Control
and Ecology of the State of Arkansas (the "Department ") a State Grant for a
portion of the costs of the water pollution control facilities, as authorized by
Act No. 108 of the Acts of Arkansas of 1971, as amended ( "Act No. 108"); and
WHEREAS, the City has applied to the Department for a State Grant
in an amount not to exceed $1,500,000; and
WHEREAS, in order to proceed expeditiously with the improvements,
including the water pollution control facilities, it is necessary for the City
to provide interim financing in anticipation of the State Grant, as authorized
by Act No. 108; and
WHEREAS, the City has outstanding at this time ari issue of Sewer '
Revenue Bonds, dated February 1, 1966, in the original principal amount of
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$8,280,000, issued under and secured by the provisions of Ordinance No.
11,695 of the Ordinances of the City, adopted and approved on December 20,
1965 (the 111966 Bonds "); and
WHEREAS, in order to obtain the necessary interim financing in
anticipation of the State Grant, it is proposed that there should be sold at
this time not to exceed $1,400,000 in principal amount of Sewer Revenue
Bonds (Interim) (the "Interim Bonds "), which Interim Bonds will-mature on
October 1, 1972, and will be permanently financed from proceeds of the
State Grant on or before that date (the Interim Bonds will be subordinate in
security to the pledge and lien on sewer revenues in favor of the 1966
Bonds) ; and
WHEREAS, the Board hereby finds and declares that it would be in
the best interests of the City and its inhabitants for the improvements to be
finished and that Sewer Revenue Bonds (Interim) be issued pursuant to the
request and recommendation of the Little Rock Sanitary Sewer Committee (the
"Sewer Committee "); and
WHEREAS, the City has made arrangements to sell Sewer Revenue
Bonds (Interim) , at a price of par and accrued interest for bonds bearing interest
at the rate of 6% per annum;
NOW, THEREFORE, BE IT ORDAINED by the Board of Directors of the
City of Little Rock, Arkansas:
Section 1. That the improvements be completed. The authority
conferred by this Ordinance shall be carried out under the control and super-
vision of, and all details in connection therewith, shall be handled by the
Sewer Committee. In this regard, in addition to the powers andduties of
the Sewer Committee existing under and by virtue of the laws of the State
of Arkansas, there is hereby conferred upon the Sewer Committee full and
complete power to carry out and accomplish the authority specified in this
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Ordinance pertaining to accomplishing the improvements, the operation of
the System and the collection, handling and disbursement of revenues,
including the execution and delivery of all contracts and instruments
necessary or incidental thereto or to evidence the exercise of the authority
herein conferred.
Section 2. That under the authority of the Constitution and laws of
the State of Arkansas, including particularly Act No. 132 of the Acts of Arkansas
of 1933, as amended, City of Little Rock, Arkansas Sewer Revenue Bonds
(Interim), are hereby authorized and ordered issued in the total principal
amount of not to exceed $1,400,000 for the purpose of paying a portion of
the costs of completing the improvements (which will be herein referred to as
the "Interim Bonds," the "bonds," "these bonds" or the "bonds of this issue ").
The sale of the bonds to the purchasers for the purchase price set forth in
the recitals of this Ordinance is hereby approved. The bonds may be de-
livered at one time or from time to time and shall bear interest at the rate
of 6% per annum from the interest commencement date noted on each bond
until paid. The bonds shall be dated April 1, 1972, with interest payable
at maturity, and shall mature on October 1, 1972.
The bonds shall be issued a s fully registered bonds (registered as to
principal and interest) , and principal and interest shall be paid by check mailed
by first class mail to the registered owner at the address reflected on the
registration books of the City maintained by the Trustee. They shall be in
any denomination which is a multiple of $1,000 and shall be numbered conse-
cutively from R -1 upwards. The bonds shall be in typewritten form and any
bond may be exchanged at any time upon not less than thirty (30) days notice
for bonds of smaller denominations (which must be in multiples of $1,000) with
any expenses necessarily incurred in connection with any such exchange to be
paid by the registered owner requesting the exchange.
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Section 3. The bonds shall be executed on behalf of the City by the
Mayor and City Clerk and shall have impressed thereon the seal of the City.
The principal of and interest on the bonds shall be payable solely out of the
Sewer Revenue Bond Fund (Interim) (hereinafter created) and shall be a valid
claim of the bondholders only against that Bond Fund and the revenues pledged
to that Bond Fund. The lien, pledge and security of the bonds are subordinate
to the lien, pledge and security of the 1966 Bonds. The bonds shall not
constitute an indebtedness of the City within any constitutional or statutory
limitation.
Section 4. That the bonds shall be in substantially the following
form and the Mayor and City Clerk are hereby authorized and directed to make
all recitals contained therein:
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UNITED STATES OF AMERICA
STATE OF ARKANSAS
COUNTY OF PULASKI
CITY OF LITTLE ROCK
6% SEWER REVENUE BOND (INTERIM)
No. R- $
KNOW ALL MEN BY THESE PRESENTS:
That the City of Little Rock, County of Pulaski, and State of Arkansas
(the "City "), acknowledges itself to owe, and for value received, hereby
promises to pay to
or assigns (the "payee ") on the first day of October, 1972, the principal sum of
DOLLARS
"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 debts due the United States
of America, and to pay interest on the principal sum hereof, at maturity or
upon prepayment prior to maturity, in like coin or currency, at the rate of
six percent (6 %) per annum from the interest commencement date hereof,
until the principal hereof has been paid in full. Payments of principal and
interest, including prepayments of principal as hereinafter provided, shall
be made by check mailed by first class mail to the registered owner hereof
at his address on the registration book of the City maintained by the Trustee.
Each payment shall be noted on a Payment Record maintained by the Trustee,
and all such payments shall fully discharge the obligation of the City hereon
to the extent of the payments' so made. The registered owner may present
this bond to the Trustee at any time for verification and completion of the
Payment Record attached hereto. Upon final payment of principal and interest,
this bond shall be submitted to the Trustee for cancellation and surrender to
the City. The Trustee of this bond is The Commercial National Bank of Little
Rock, Little Rock, Arkansas.
This bond is one of an issue of bonds authorized in the aggregate
principal amount of $1,400,000 (the "bonds" or "Interim Bonds ") being issued
for the purpose of paying a portion of the costs of completing certain improve-
ments to the Sewer System of the City and paying the expenses of
issuing the bonds (described in the Authorizing Ordinance hereinafter
referred to) .
The bonds are issued pursuant to and in full compliance with the
Constitution and laws of the State of Arkansas, including particularly Act No.
132 of the Acts of Arkansas of 1933, as amended, and pursuant to Ordinance
No. of the City, adopted and approved on the day of
1972 (the "Authorizing Ordinance ") and a resolution duly adopted by the
Little Rock Sanitary Sewer Committee on the day of , 1972, and
the bonds do not constitute an indebtedness of the City within any con-
stitutional or statutory limitation. The bonds are not general obligations
of the City, but are special obligations payable solely from revenues derived
from the operation of the Sewer System. An amount of such revenues sufficient
to pay the principal of and interest on the bonds is to be set aside in a special
fund for that purpose identified as the Sewer Revenue Bond Fund (Interim)
(created by the Authorizing Ordinance) . Reference is hereby made to the
Authorizing Ordinance for a detailed statement of the nature and extent of
the security, the rights and obligations of the City, the Trustee and the
holders and registered owners of the bonds and the terms and conditions
upon which the bonds are issued, including, without limitation, the covenant
of the City to maintain rates for sewer services which shall be sufficient at
all times to produce sufficient revenues to provide for the operation,
maintenance and repair of the Sewer System, to provide for the payment of
the principal of and interest on the Sewer Revenue Bonds of the City, dated
February 1, 1966 (the "1966 Bonds "), interest on these bonds and paying agent's
fees (there is no provision for required deposits out of the revenues into the Bond
Fund for the payment of principal prior to maturity of the bonds, it being con-
templated that the principal of the bonds will be paid or prepaid from the proceeds
of a grant from the Department of Pollution Control and Ecology of the State of
Arkansas as specified in Section 11 of the Authorizing Ordinance) , make the
required deposits into the Depreciation Fund and maintain all funds at the
levels required by the ordinances and resolutions authorizing and securing
all bonds to which Sewer System revenues are pledged. The lien, pledge
and security of the Interim Bonds are subordinate to the lien, pledge and
security of the 1966 Bonds, as specified in detail in the Authorizing Ordinance.
The principal of the bonds shall be subject to prepayment prior to
maturity, at the option of the City, in any amount without penalty, at a price
of par and accrued interest, from funds from any source, at any time. Moneys
available for prepayment shall be applied proportionately to all the outstanding
bonds. In the event of a partial prepayment, the holder shall surrender this
bond to the City for notation on the Payment Record attached hereto of the
amount of principal prepaid.
The City has applied to the Department of Pollution Control and Ecology
of the State of Arkansas for a State Grant (the "State Grant ") to finance the costs
of completing certain improvements to the Sewer System of the City. The Interim
Bonds are being issued to provide funds for this purpose prior to the time the
State Grant is received. The City covenants to use the first funds available from
the State Grant to pay or prepay the principal of the Interim Bonds. If, for any
reason the State Grant is not available on or before the maturity date of the
Interim Bonds, Sewer Revenue Bonds,in at least that principal amount sufficient
to pay, principal and interest, on or prior to maturity, all of the Interim Bonds
then outstanding, shall be promptly sold and issued by the City and the proceeds
applied to that purpose, all as specified in detail in the Authorizing Ordinance.
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Notice of any prepayment shall_be given at least fifteen (15) days
prior to the date fixed for such prepayment by first class mail to the registered
cxvner of this bond specifying the amount of principal to be prepaid and the
amount of accrued interest thereon to the date of such prepayment.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts,
conditions and things required to exist, happen and to be performed precedent
to and in the issuance of the bonds, have existed, have happened and have
been performed in due time, form and manner, as required by law; that the
indebtedness represented by the bonds does not exceed any constitutional or
statutory limitation; and that sufficient revenues have been pledged to and
will be set aside into the Bond Fund, referred to above, for the payment of
the principal of and interest on the bonds.
This bond shall not be valid until the Certificate of Authentication
hereon shall have been signed by the Trustee.
IN WITNESS WHEREOF, the City of Little Rock, Arkansas, has caused
this bond to be executed in its name by the Mayor and City Clerk, and its seal
to be affixed, all as of the first day of April, 1972.
ATTEST:
(SEAL)
The interest commencement date of this bond is
City Clerk
CITY OF LITTLE ROCK, ARKANSAS
Mayor
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This bond is one of the bonds described in the within mentioned
Ordinance.
THE COMMERCIAL NATIONAL BANK
OF LITTLE ROCK, Little Rock, Arkansas
By
Authorized Signature
ASSIGNMENT
For value received, the registered owner last listed below sells,
conveys, transfers, assigns and delivers this bond to the assignee last listed
below.
REGISTERED OWNER ASSIGNEE
PAYMENT RECORD _
Principal Name of Paying
Principal Balance Interest Agent, Authorized
Date Payment Due Payment Official and Title
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Section 5. That the City and the Sewer Committee hereby covenant
with the holders and registered owners of the bonds that there will be imposed
and collected such charges for the use of the System as will at all times pro-
duce sufficient revenues to provide for the operation, maintenance and repair
of the System, to provide for the payment of the principal of and interest on
all outstanding bonds to which System revenues are pledged, including the
1966 Bonds and the Interim Bonds (interest only), as the same become due,
to provide for paying agent's fees, make required deposits into the Depreciation
Fund and to maintain all funds at required levels, all as provided in ordinances
and resolutions authorizing and securing all such bonds. The above covenant
shall include the agreement and obligation to increase the charges from
time to time as and to the extent necessary to produce sufficient revenues to
meet the above requirements.
Section 6. That the provisions, covenants, undertakings, stipulations
and obligations of the Sewer Committee and the City set forth in Ordinance No.
11,695, pursuant to which the 1966 Bonds were issued and secured and are
presently outstanding, as such Ordinance may, at any time, be amended, shall
inure and appertain to the bonds of this issue to the same extent and with like
force and effect as if set forth herein in full, except only insofar as the same
may be expressly inconsistent with the provisions of this Ordinance, including
among other things, and without limitation, the provisions of Ordinance No.
11,695 whereby there has been created and is being maintained (1) a "Sewer
Fund" and for the payment into that fund of all the income and revenue derived
from the operation of the System, disbursements therefrom and the permitted
use of surplus at any time remaining therein, (2) a "Sewer Operation and
Maintenance Fund" and for the payment into that fund of the required amounts
and permitted disbursements therefrom, (3) a "Sewer Revenue Bond Fund" and
for the payment into that fund of the required amounts and disbursements
therefrom, and (4) a "Sewer Depreciation Fund and for the payment into that
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fund of the required amounts and disbursements therefrom, all as specified in
the applicable sections of Ordinance No. 11 , 695, are hereby continued, ratified
and confirmed.
Section 7. Sewer Revenue Bond Fund (Interim) . (a) There is hereby
established with a bank or banks, holding membership in the Federal Deposit
Insurance Corporation, to be designated by the Sewer Committee from time to
time, a special trust fund in the name of the City designated "Sewer Revenue
Bond Fund (Interim) " (the "Bond Fund ") which shall be maintained as long as
the bonds are outstanding and unpaid, and into which there shall be paid the
sums in the amounts and at the times hereinafter set forth in subparagraph
(b) for the purpose of providing funds for the payment of the principal of,
interest on and Paying Agent's fees in connection with the bonds.
(b) Beginning on the first business day of the first month after the
delivery of the bonds and continuing on the first business day of each month
thereafter there shall be paid into the Bond Fund from System revenues a sum
equal to one -sixth (1/6) of the next installment of interest (plus any additional
amount that may be necessary to fully provide for the interest payments on
the bonds) and an amount sufficient to provide for the Paying Agent's fees.
Additional amounts of System revenues may be deposited into the Bond Fund
each month and used for the purpose of prepaying the principal of the bonds
if the City so elects but it shall not be mandatory that any additional amounts
be so deposited into the Bond Fund.
Section 8. That the bonds of this issue shall be subject to redemption
prior to maturity in accordance with the provisions in the bond form appearing
in Section 4 hereof.
Section 9. That 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
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be required to take any action as Trustee unless it shall have been notified
in writing and shall have been indemnified to its satisfaction against any
loss, damage, or expense on account of the taking of such action. The
Trustee may resign at any time by ten (10) days notice in writing to the City,
and the majority in value of the holders of the outstanding bonds of this issue
at any time may, with or without cause, remove the Trustee. Upon the
resignation or removal of a Trustee, the majority in value of the holders of
the outstanding bonds of this issue may name a new Trustee, but if such
holders do not name a new Trustee within thirty (30) days after a vacancy
occurs, the City shall forthwith name a new Trustee. The appointment of a new
Trustee shall be evidenced by a written instrument filed in the office of the
City Clerk. Any successor Trustee shall have all the powers herein granted
to the original Trustee.
Section 10. That after the bonds have been executed by the Mayor
and City Clerk and the seal of the City impressed as herein provided, they shall
be delivered to the Trustee which shall authenticate them, insert in the indicated
space at the end of the face of each bond the date of delivery as the interest
commencement date and deliver.them to the purchasers upon receipt of the pur-
chase price. Tln Trustee shall remit the proceeds of the sale of the bonds to
the Treasurer of the City and the Treasurer shall deposit the proceeds in a
special account in the name of the City designated "Sewer Construction Fund
(Interim)" in a bank that is a member of the Federal Deposit Insurance Corporation.
The moneys in the Construction Fund shall be disbursed solely for paying the
cost of accomplishing the improvements and paying expenses incurred in con-
nection with the authorization and issuance of the bonds. If any moneys remain
in the Construction Fund after the improvements are accomplished and the
expenses of authorizing and issuing the bonds are paid, the remaining moneys
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shall be deposited into the Bond Fund. Moneys held in the Construction
Fund may, at the option of and pursuant to the direction of the Sewer
Committee, be invested and reinvested in direct obligations of, or obli-
gations the principal of and interest on which are unconditionally guaranteed
by, the United States of America, in obligations of agencies of the United
States of America, or Bank Certificates of Deposit which shall mature, or
which shall be subject to redemption by the holder thereof, at the option of
the holder, not later than the date or dates when the moneys held for the
credit of the Construction Fund will be required for accomplishing the improve-
ments or paying the expenses of authorizing and issuing the bonds, as
determined by the Sewer Committee in its discretion. Any profit realized
from investments of moneys in the Construction Fund may be used by the
Sewer Committee for any lawful purpose.
Section 11. Since the bonds authorized hereby mature October 1,
1972, it may be necessary for the City to refund the bonds prior to their
maturity. In this regard, the City expects to pay or prepay the principal of
the Interim Bonds from the proceeds of the State Grant (hereinbefore described) .
If, for any reason the State Grant is not available on or before the maturity date
of the Interim Bonds, Sewer Revenue Bonds,in at least that principal amount
sufficient to pay, principal and interest, on or prior to maturity, all of these
bonds then outstanding, shall be promptly sold and issued by the City and the
proceeds applied to that purpose. The City and the Sewer Committee covenant
to continuously operate the System as a revenue - producing undertaking and
to impose and collect charges sufficient to at least provide adequate
moneys for the payment of the reasonable expenses of operation,
maintenance and repair of the System, for the payment of the principal of,
interest on and Paying Agent's fees in connection with all outstanding bonds
to which System revenues are pledged (including particularly bonds that will
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be issued to accomplish the refunding of the bonds of this issue), for making
the required deposits for depreciation and for maintaining of funds at required
levels as set forth in ordinances authorizing such bonds.
Section 12. It is understood and agreed that the Sewer Committee,
acting for and on behalf of the City, has custody of and control over the
System, operates, maintains and repairs the System and collects and handles
System revenues. Therefore, it is understood and agreed that all references
herein to the City shall, when appropriate in view of the authority and re-
sponsibility of the Sewer Committee, be construed to include the Sewer
Committee. To this end, the Sewer Committee, by resolution, will expressly
adopt and approve this Ordinance and the provisions hereof and thereby agree
to perform all covenants and obligations with reference to the System and
System revenues, set forth herein, the performance of which are within its
- authority and jurisdiction. It is understood and intended that the registered
owners of the bonds have relied on, and are beneficiaries of, such commitments
of the Sewer Committee.
Section 13. That this Ordinance shall not create any right of any
kind, and no right of any kind shall arise hereunder pursuant to it until the
bonds authorized by this Ordinance shall be issued and delivered.
Section 14. That the provisions of this Ordinance are hereby declared
to be separable and if any provisions shall for any reason be held illegal or
invalid, such holding shall not affect the validity of the remainder of the
Ordinance.
Section 15. That all ordinances, resolutions and parts thereof in
conflict herewith are hereby repealed to the extent of such conflict.
Section 16. That it is hereby ascertained and declared that the present
sewer facilities are inadequate and by reason thereof there exists a hazard to
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the life, property and welfare of the inhabitants of the-City. The herein
authorized improvements are immediately necessary to alleviate the hazard
and can be accomplished only by the issuance of the bonds herein authorized.
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 4 1972.
APPROVED
ATTEST:
0AMayor
City C rk
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