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Home My WebLink About195101 2 ORDINANCE NO. 19,510 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 CONSTRUCTION, AND INSTALLATION OF REAL AND TANGIBLE 7 PERSONAL PROPERTY; PROVIDING FOR THE PAYMENT OF THE 8 PRINCIPAL OF AND INTEREST ON THE NOTE; AND PRESCRIBING 9 OTHER MATTERS PERTAINING THERETO; AND DECLARING AN 10 EMERGENCY. 11 12 WHEREAS, the City of Little Rock, Arkansas (the "City ") is authorized and 13 empowered under the provisions of Amendment No. 78 to the Arkansas Constitution 14 ( "Amendment No. 78 ") and Act No. 1808 of 2001 (codified as Title 14, Chapter 78 of the 15 Arkansas Code of 1987 Annotated) (the "Act "), to issue notes and to expend the proceeds 16 thereof to finance all or a portion of the cost of acquiring, constructing, and installing real 17 property or tangible personal property having an expected useful life of more than one 18 year; and 19 WHEREAS, the City proposes to acquire vehicles for the Public Works, Police, Fire, 20 Parks, and Fleet Departments, acquire land and acquire, construct, and install facilities for 21 the Zoo, the Housing & Neighborhood Programs Department, and the Parks Department, 22 and acquire, construct, and install technology and equipment for the Housing & 23 Neighborhood Programs Department, the Community Programs Department, the Fire 24 Department, the City Attorney's Office, the Public Works Department, the Parks 25 Department, the Planning & Development Department, the Human Resources Department, 26 the Finance Department, and the Information Technology Department (collectively, the 27 "Property "); and [Page 1 of 5] 1 WHEREAS, it is proposed that the City issue its promissory note in the principal 2 amount of $6,550,000 (the "Note ") under Amendment No. 78 and the Act for the purpose of 3 financing all or a portion of the costs of the acquisition, construction, and installation of the 4 Property; and 5 WHEREAS, the City intends to arrange for a loan (the "Loan ") from a financial 6 institution (the "Lender ") and to issue the Note to the Lender at a price of par in 7 consideration for the Loan; 8 NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF DIRECTORS OF 9 THE CITY OF LITTLE ROCK, ARKANSAS,THAT: 10 Section 1. The Board of Directors hereby finds that the Property is real property or 11 tangible personal property having a useful life of more than one year. The Board of 12 Directors further finds that the sum of the principal amount of the Note and the aggregate 13 outstanding principal amount of the City's Promissory Notes dated February 11, 2002, 14 September 25, 2002, June 18, 2003, September 8, 2004, and March 31, 2005 does not exceed 15 five percent of the assessed value of taxable property located within the City as determined 16 by the last tax assessment completed before the issuance of the Note. 17 Section 2. Under the authority of the Constitution and laws of the State of Arkansas, 18 including particularly Amendment No. 78 and the Act, the Note is hereby authorized and 19 ordered issued in the principal amount of $6,550,000 for the purpose of financing all or a 20 portion of the costs of acquiring, constructing, and installing the Property and paying 21 expenses of issuing the Note. The Note shall be dated the date of issuance and shall bear 22 interest on the outstanding principal amount at a fixed rate not to exceed 5.0% per annum 23 (calculated on the basis of the actual number of days elapsed in a year of 365 days (366 days 24 in a leap year)). The Note shall be repaid in five substantially equal annual amortized 25 installments of principal and interest, commencing one year from the date of the Note and 26 continuing on the same day of each year thereafter, with the final installment due five years 27 from the date of the Note. The Note shall be issued in fully registered form. [Page 2 of 51 1 Section 3. The Note shall be issued to the Lender in consideration for the Loan. The 2 Lender shall be selected by the Mayor based upon the commitment or proposal for the 3 Loan that the Mayor determines to have the lowest cost to the City. The City Treasurer is 4 hereby authorized and directed to solicit proposals or commitments for the Loan from at 5 least three financial institutions having offices in Pulaski County or having requested to be 6 solicited, in such manner as shall be approved by the Mayor. The Mayor shall have the 7 right to reject any and all proposals and commitments. 8 Section 4. As provided in Amendment No. 78, the annual debt service payments on 9 the Note in each fiscal year shall be charged against and paid from the general revenues of 10 the City for such fiscal year. For the purpose of making the annual debt service payments, 11 there is hereby, and shall be, appropriated to pay the Note, an amount of general revenues 12 of the City sufficient for such purposes. The City Treasurer is hereby authorized and 13 directed to withdraw from the General Fund of the City the amounts and at the times 14 necessary to make the annual debt service payments on the Note. 15 Section 5. The City covenants with the owner of the Note (the "Owner ") from time 16 to time as follows: 17 (a) The City shall not take any action or suffer or permit any action to be taken or 18 condition to exist which causes or may cause the interest payable on the Note to be 19 included in gross income for federal income tax purposes. Without limiting the generality 20 of the foregoing, the City covenants with the Owner that the proceeds of the sale of the 21 Note will not be used directly or indirectly in such manner as to cause the Note to be 22 treated as an "arbitrage bond" within the meaning of section 148 of the Internal Revenue 23 Code of 1986, as amended (the "Code "). 24 (b) The City will not use or permit the use of the Property or the proceeds of the 25 Note in such manner as to cause the Note to be a "private activity bond" within the 26 meaning of section 141 of the Code. [Page 3 of 5] 1 (c) None of the gross proceeds of the Note will be used (directly or indirectly) either 2 to make or finance loans to persons other than state or local governmental units or in any 3 trade or business carried on by any person other than a state or local governmental unit or 4 other than as a member of the general public. 5 (d) The City will take no action which would cause the Note to be "federally 6 guaranteed" within the meaning of the Code. 7 (e) The City will not reimburse itself from Note proceeds for any costs paid prior to 8 the date the Note is issued except in compliance with United States Treasury Regulation 9 § 1.150 -2. This Ordinance shall constitute an "official intent" for purposes of the Regulation. 10 (f) The City will submit to the Secretary of the Treasury of the United States, not later 11 than the 15th day of the second calendar month after the close of the calendar quarter in 12 which the Note is issued, a statement concerning the Note which contains the information 13 required by section 149(e) of the Code. 14 Section 6. The City shall provide such financial information to the Lender as the 15 Lender may reasonably request. 16 Section 7. The Mayor, City Clerk, and City Treasurer, for and on behalf of the City, 17 are hereby authorized and directed to do any and all things necessary to effect the issuance, 18 execution, and delivery of the Note, and the performance of all acts of whatever nature 19 necessary to effect and carry out the authority conferred by this Ordinance. The Mayor, 20 City Clerk, and City Treasurer are hereby further authorized and directed, for and on 21 behalf of the City, to execute all papers, documents, certificates, and other instruments that 22 may be required for the carrying out of such authority or to evidence the exercise thereof. 23 Section 8. Severability. In the event any title, section, paragraph, item, sentence, 24 clause, phrase, or word of this ordinance is declared or adjudged to be invalid or 25 unconstitutional, such declaration or adjudication shall not affect the remaining portions of 26 this ordinance, which shall remain in full force and effect as if the portion so declared or 27 adjudged invalid or unconstitutional was not originally a part of this ordinance. [Page 4 of 5] 1 Section 9. Repealer. All ordinances or resolutions of the Cite in conflict herewith are 2 hereby repealed to the extent of such conflict. 3 Section 10. Emergency. The Board of Directors hereby determines that the 4 Improvements must be accomplished as soon as possible in order to alleviate immediate 5 hazards to the health, safety, and welfare of the City, its inhabitants, and their property, 6 and that the Improvements can be accomplished only by the issuance of the Note. It is, 7 therefore, declared that an emergency exists and this Ordinance, being necessary for the 8 immediate preservation of the public peace, health, and safety, shall take effect and be 9 enforced from and after its passage. 10 PASSED: March 21, 2006 11 ATTEST: 12 13 Nancy Wood/City Clerk 14 APP /I VED AS TO LEGAL FORM: 15 A00U' -" k. 16 Thomas M. Carpenter, City AEtorney 17 // 18 19 // 20 // 21 22 23 // 24 25 26 27 // APPROVED: 4�wl Aq�k� Jim D i ey, Mayor [Page 5 of 5]