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HomeMy WebLinkAbout22773 1 ORDINANCE NO. 22,773 2 3 AN ORDINANCE AUTHORIZING THE ISSUANCE OF A PORT 4 AUTHORITY REVENUE BOND; AUTHORIZING THE SALE OF 5 THE BOND AND THE EXECUTION OF A BOND PURCHASE 6 AGREEMENT AND A MORTGAGE, SECURITY AGREEMENT 7 AND FIXTURE FILING; PRESCRIBING OTHER MATTERS 8 RELATING THERETO; DECLARING AN EMERGENCY; AND FOR 9 OTHER PURPOSES. 10 11 WHEREAS,the City of Little Rock,Arkansas(the"City")owns a municipal port and related land and 12 facilities known as the Port of Little Rock(the "Port"),which is operated by the Little Rock Port Authority 13 (the "Authority")for and on behalf of the City;and 14 WHEREAS, as a part of the Port, the Authority operates the Little Rock Port Industrial Park (the 15 "Industrial Park"); and 16 WHEREAS,the Authority and the Board of Directors of the City have determined that there is a need 17 for the acquisition of land, rights-of-way, and easements for the expansion of the Industrial Park for future 18 economic development projects and any necessary costs associated therewith(collectively,the "Project"); 19 and 20 WHEREAS,the City can obtain the necessary funds to finance all or a portion of the Project and pay 21 costs of issuance by issuing its Port Authority Revenue Bond, Taxable Series 2026(the "Bond"); and 22 WHEREAS, First Security Bank, Searcy,Arkansas(the "Lender")has agreed to purchase the Bond as 23 evidence of a loan from the Lender,at a price of par; and 24 WHEREAS,the Bond will be secured by a pledge of Net Port Revenues (as hereinafter defined)and 25 a mortgage lien on the Project in favor of the Lender; and 26 WHEREAS, the pledge of Net Port Revenues in favor of the Bond shall be subordinate to the pledge 27 of Net Port Revenues in favor of the City's Port Authority Revenue Bonds,Taxable Series 2017(the"Series 28 2017 Bonds") and on a parity with the pledge of Net Port Revenues in favor of the City's Port Authority 29 Revenue Bond, Taxable Series 2021 (the"Series 2021 Bond"); and 30 WHEREAS,the following documents have been prepared in connection with the issuance of the Bond 31 and have been reviewed by the City, the Authority and Friday, Eldredge & Clark, LLP, Bond Counsel 32 (collectively, the "Bond Documents"): (a) a Bond Purchase Agreement between the City and the Lender 33 (the "Agreement") establishing the general provisions and details of the Bond, establishing the funds and 1 accounts relating to the Bond,and providing for the security and payment of the Bond and the rights of the 2 owner thereof and(b)a Mortgage,Security Agreement and Fixture Filing,or a similarly named instrument, 3 by the City in favor of the Lender dated the date of the Bond (the "Mortgage"), granting a lien on and 4 security interest in the properties comprising the Project; 5 NOW,THEREFORE, BE IT ORDAINED BY THE BOARD OF DIRECTORS OF THE CITY 6 OF LITTLE ROCK,ARKANSAS AS FOLLOWS: 7 Section 1. The Project shall be accomplished. The accomplishment of the Project shall be under the 8 control and supervision of, and all details in connection therewith shall be handled by, the Authority, and 9 the Authority shall make all contracts and agreements necessary or incidental to the performance of its 10 duties and the execution of its powers. 11 Section 2. Under the authority of the Constitution and laws of the State of Arkansas, including 12 particularly Title 14, Chapter 186, Subchapter 3 of the Arkansas Code of 1987 Annotated,the Bond,to be 13 designated "City of Little Rock, Arkansas Port Authority Revenue Bond, Taxable Series 2026," is hereby 14 authorized and ordered issued in the principal amount of$5,100,000,the proceeds of the sale of which are 15 necessary to provide all or a portion of the funds necessary to accomplish the Project and pay expenses of 16 issuing the Bond. 17 The Bond shall be dated the date of delivery to the Lender. The Bond shall bear interest at the Interest 18 Rate(as hereinafter defined). Interest shall be calculated on the basis of a 360-day year and actual number 19 of days elapsed. Interest on the Bond shall be payable annually commencing one year from the date of the 20 Bond. Commencing four years from the date of the Bond, principal of and interest on the Bond shall be 21 payable annually with the final payment due twenty years from the date of the Bond. An amortization 22 schedule will be provided by the Lender on or before the date the Bond is issued. A new amortization 23 schedule will be provided by the Lender on each Reset Date(hereinafter defined). 24 "Interest Rate"means a rate of interest per annum equal to the Prime Rate minus thirty-five basis points 25 (0.35%), as determined and reset in accordance with this provision. The Interest Rate shall be established 26 initially on the date the Bond is issued and shall remain fixed at such rate for a period of three (3) years 27 from the date of determination,on which date the Interest Rate shall be reset,and the Interest Rate shall be 28 reset every three (3) years thereafter (each such three-year period, a "Rate Period"). On the first day 29 following the expiration of each Rate Period (each such date, a "Reset Date"), the Interest Rate shall be 30 recalculated and reset to the Prime Rate in effect on such Reset Date minus thirty-five basis points(0.35%). 31 The newly determined Interest Rate shall remain in effect for the succeeding Rate Period until the next 32 Reset Date. 33 For purposes of this definition, "Prime Rate"means the rate of interest equal to the Wall Street Journal 34 Prime Rate,as in effect on the applicable date of determination.If the Wall Street Journal Prime Rate ceases Page 2 of 5 1 to be published, the Prime Rate shall be the prime rate or base rate announced by such other nationally 2 recognized financial institution as the Lender may designate in its reasonable discretion. Notwithstanding 3 the foregoing, in no event shall the Interest Rate for any Rate Period be less than five percent (5%) per 4 annum(the"Interest Rate Floor")or greater than seven and one-half percent(7.5%)per annum(the"Interest 5 Rate Cap"). If the Prime Rate minus thirty-five basis points (0.35%)would result in a rate of interest less 6 than the Interest Rate Floor, the Interest Rate for the applicable Rate Period shall be deemed to be five 7 percent(5%)per annum. If the Prime Rate minus thirty-five basis points(0.35%)would result in a rate of 8 interest greater than the Interest Rate Cap,the Interest Rate for the applicable Rate Period shall be deemed 9 to be seven and one-half percent(7.5%)per annum. 10 The Bond shall be subject to redemption at the option of the City, in whole or in part at any time at a 11 price equal to the principal amount outstanding plus accrued interest to the date fixed for redemption. 12 Section 3. The sale of the Bond to the Lender at a price of par pursuant to the Agreement,to evidence 13 the loan from the Lender,subject to the terms and provisions hereafter in this Ordinance set forth in detail, 14 is hereby approved, and the Bond is hereby sold to the Lender. The Mayor and the City Clerk are hereby 15 authorized to execute and deliver the Agreement. The Agreement is hereby approved in substantially the 16 form submitted to this meeting, with such changes as shall be approved by the Mayor and the City Clerk, 17 their execution to constitute conclusive evidence of such approval. 18 Section 4. The Bond shall be executed on behalf of the City by the Mayor and City Clerk and shall 19 have impressed thereon the seal of the City. The Bond is not a general obligation of the City but is a special 20 obligation,the principal of and interest on which are secured by a pledge of and are payable from Net Port 21 Revenues (as hereinafter defined). Revenues of the Port include revenues derived from the use of Port 22 facilities including particularly, without limitation, revenue derived from rates and charges imposed and 23 maintained for the use of the Port facilities and lease rentals under leases or payments under security 24 agreements or other instruments entered into pursuant to Title 14, Chapter 186, Subchapter 3 of the 25 Arkansas Code of 1987 Annotated("Port Revenues"). There is specifically excluded from"Port Revenues" 26 revenues derived from the operation of the Industrial Park; provided, however, that any terminal, railroad 27 and riverfront charges to customers located in the Industrial Park are specifically included in Port Revenues. 28 "Net Port Revenues" means gross Port Revenues less the amounts required to pay the costs of operation, 29 maintenance and repair,including all expense items properly attributable to the operation and maintenance 30 of the Port in accordance with generally accepted accounting principles,excluding depreciation and interest 31 expenses. Net Port Revenues are hereby pledged and mortgaged for the payment of the Bond. The pledge 32 of Net Port Revenues in favor of the Bond is subordinate to the pledge in favor of the Series 2017 Bonds 33 and on a parity with the pledge in favor of the Series 2021 Bond. The Bond is further secured by a lien on 34 and security interest in the Project pursuant to the Mortgage. Notwithstanding anything herein to the Page 3 of 5 1 contrary, nothing shall prohibit the City or the Authority from using other revenues or moneys of the 2 Authority(excluding any moneys derived from taxes)to pay the principal of and interest on the Bond. 3 Section 5. There is hereby authorized the securing of the payment of the Bond by a mortgage lien on and 4 security interest in the Project. There is authorized the execution and delivery of the Mortgage,and the Mayor 5 and the City Clerk are hereby authorized to execute,acknowledge and deliver the Mortgage for and on behalf 6 of the City. The Mortgage is hereby approved in substantially the form submitted to this meeting, and the 7 Mayor is hereby authorized to confer with the Lender and others in order to complete the Mortgage,with such 8 changes as shall be approved by the Mayor and the City Clerk,their execution to constitute conclusive evidence 9 of such approval. 10 Section 6. 11 (a)The Mayor and City Clerk,for and on behalf of the City,and the Executive Director of the Port, 12 for and on behalf of the Authority, are hereby authorized and directed to do any and all things 13 necessary to effect the execution and delivery of the Agreement,the execution and delivery of the 14 Mortgage and the performance of all acts of whatever nature necessary to effect and carry out the 15 authority conferred by this Ordinance.The Mayor and the City Clerk are hereby further authorized 16 and directed, for and on behalf of the City and the Authority, to execute all papers, documents, 17 certificates and other instruments that may be required for the carrying out of such authority as to 18 evidence the exercise thereof.Further,if it is necessary in the future to modify or execute additional 19 documents concerning the Bond,the Agreement,the Mortgage,and the transactions contemplated 20 thereby, which, in the opinion of bond counsel and of the City Attorney, do not substantially alter 21 the duties or obligations of the City,this authorization to take all actions and to execute documents 22 shall remain in full force and effect. 23 (b) It is understood and agreed that the Authority,acting for and on behalf of the City,has custody 24 of and control over the Port,operates,maintains and repairs the Port and collects and handles Port 25 Revenues. Therefore, it is understood and agreed that even though there are some express 26 references to the Authority in the Bond Documents, all references therein to the City shall, when 27 appropriate in view of the authority and responsibility of the Authority, be construed to mean and 28 include the Authority. 29 Section 7. The City Clerk shall maintain, in the permanent records of the City, for inspection by any 30 interested person,a copy of the Agreement and the Mortgage. 31 Section 8. The requirements of Little Rock,Ark.,Ordinance No. 15,249(February 17, 1987), as they 32 may relate to the authorization and sale of the Bond,are hereby waived. 33 Section 9. Severability. In the event any title, section, paragraph, item, sentence, clause, phrase, or 34 word of this ordinance is declared or adjudged to be invalid or unconstitutional, such declaration or Page 4 of 5 1 adjudication shall not affect the remaining portions of the ordinance which shall remain in full force and 2 effect as if the portion so declared or adjudged invalid or unconstitutional was not originally a part of the 3 ordinance. 4 Section 10. Repealer. All laws,ordinances,resolutions,or parts of the same,that are inconsistent with 5 the provisions of this ordinance,are hereby repealed to the extent of such inconsistency. 6 Section 11. Emergency Clause. It is hereby ascertained and declared that the Project is immediately 7 needed for the preservation of the public peace, health and safety and to remove existing hazards thereto. 8 The Project cannot be accomplished without the issuance of the Bond, which cannot be sold at the interest 9 rate specified herein unless this Ordinance is immediately effective. Therefore, it is declared that an 10 emergency exists and this Ordinance being necessary for the preservation of the public peace, health and 11 safety shall be in force and take effect immediately upon and after its passage. 12 PASSED: May 5,2026 13 ATTEST: APPROVED: 14 15 16 Allison Segars,City Cl k rank Sco , r.,Mayor 17 APPROVED AS TO LEGAL FORM: 18 19 &► 20 Thomas M. Carpenter,City Attor!if y 21 // 22 // 23 // 24 // 25 // 26 // 27 // 28 // 29 // 30 // 31 // 32 // 33 // 34 // 35 // Page 5 of 5