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HomeMy WebLinkAbout14738[ t -f -__ J M M M ORDINANCE NO 46 14,738 AN ORDINANCE PROVIDING FOR THE ISSUANCE OF SEWER REVENUE BONDS BY THE CITY OF LITTLE ROCK, ARKANSAS FOR THE PURPOSE OF PAYING THE COST OF CONSTRUCTING THE LITTLE MAUMELLE SEWERAGE FACILITIES AND CERTAIN EXTENSIONS, BETTERMENTS, AND IMPROVEMENTS Ili CONNECTION THEREWITH; AUTHORIZING PUBLIC SALE OF THE BONDS; 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 "), has undertaken the construction of the Little Maumelle Sewerage facilities and certain extensions, betterments, and improvements in connection therewith-, all of which are additions to the sewer facilities of the City (the "System "); and WHEREAS, the Sewer 'Committee of the City, the membership of which consists of Catherine Hodges Hamilton, Louis J. Schaufele, Theodore C. .Treadway III, Gus Michael Vratsinas, and Woodson D. Walker, has had prepared by Garver +Garver, Inc.,. Little Rock, Arkansas, Consulting Engineers, an engineering report on providing sanitary sewer collection facilities for the Little Maumelle drainage area and estimates of cost of needed betterments and improvements (the "engineering report ") , which engineering report has been approved by the Sewer Committee and recommended to the Board of Directors of the City, and copies of which are on file in the offices of the City Clerk and the Manager of the System; and WHEREAS, the Board:of Directors has studied the engineering report and a report of the Manager and staff of the System which, generally stated, recommend a construction program consisting of the following components: (1) Little Maumelle Pump Station, Force Main, and Gravity Sewers; (2) Improvements to Cantrell Road Pump 'Station; (3) Improvements to Adams Field and Fourche Treatment: Plants; (4) Pumping Station Telemetry; and. (5) Rehabilitation of.- Infiltration -prone Sewers, together with needed and related :improvements and expenditures and, where necessary, the acquisition of lands and easements (all of which will be herein referred.: to as the "Improvements "); and WHEREAS,, the engineering report has estimated the cost. of that portion of the Improvements described in (1) and (2) above (including the furnishing of all labor, materials, and other services in connect ion;:, with the completion of such portion of 6_7 fl - / M M M M M M M M ,_the Improvements ,to be approximately $5,01000 and which the Manager and staff of the System estimate has increased since the date of the engineering report to be approximately $6,083,005, and the Manager and staff of the System have estimated the cost of that portion of the Improvements described in (3), (4), and (5) above (including the furnishing of all labor, materials, and other services in connection with the completion of such portion of the Improvements) to be approximately $2,354,800, for a total estimated cost of the Improvements to be approximately $8,437,805; and WHEREAS, the City is authorized under Act No. 132 of the Acts of the General Assembly of the State of Arkansas for the year 1933, as amended ( ''Act 132 "), to issue and sell revenue bonds for the purpose of financing the cost of constructing improvements and betterments to the System, including printing, legal, underwriting, and other expenses incidental to the issuance of the bonds; and WHEREAS, to secure funds necessary to finance the construction of the Improvements and the engineering, legal, and other costs incidental to the issuance of revenue bonds for these purposes (with it being comtemplated that additional moneys will be obtained from the existing cash reserves of the Sewer Committee and from other sources), the City has determined to issue revenue bonds upon the most favorable terms to the City and upon the most favorable terms and conditions to the users of the System of the City, in an aggregate principal amount of not to exceed Six Million Five Hundred Thousand Dollars ($6,500,000). NOW, THEREFORE, BE IT ENACTED BY THE BOARD OF DIRECTORS OF THE CITY OF LITTLE ROCK, ARKANSAS: Section 1. That the Improvements. be accomplished. The accomplishment of the .Improvements shall, be under the control and supervision of, and all details in connection therewith shall be handled by, the heretofore created and presently existing Sewer Committee, and the Sewer Committee shall make all contracts and agreements necessary or incidental to the performance of its duties and the execution of its powers. The Sewer Committee shall let all construction contracts pursuant to and in accordance with existing laws and shall require such performance bonds and insurance from the contractors as, in the judgment of the Sewer Committee, will fully insure the completion of the Improvements in accordance with the plans, specifications, and drawings of the consulting engineers so as to fully promote and protect the best interests of the City-and the registered owners of the revenue bonds authorized hereby. -2- 47 I A -f _ -] M M M . M M M M M M Section 2. !at under the authority 6 the Constitution and 48 laws of the State of Arkansas, including particularly Act 132, City of Little Rock, Arkansas Sewer Revenue Bonds, Series 1984 (the "Series 1984 Bonds "), are hereby authorized in the total principal amount of not to exceed Six Million Five Hundred Thousand Dollars ($6,500,000), the proceeds of the sale of which are necessary to provide sufficient funds, together with other funds available, to pay the cost of accomplishing the Improvements, including, without limitation, the acquisition of necessary rights -of -way, engineering fees, legal fees, and other necessary expenses incidental to the accomplishment of the Improvements, and to the issuance of the Series 1984 Bonds. The Series 1984 Bonds shall be issued. in fully registered form: without interest coupons, and payment of interest shall be by. check or draft mailed to the registered owners thereof as of the applicable record date. The principal of the Series 1984 Bonds shall be payable to the registered owners thereof at the principal corporate trust office of the Trustee and Paying Agent (the purchaser is being granted the right to designate the Trustee and Paying Agent, which shall be any state or national bank located in Little Rock, Arkansas, having a combined capital and surplus of not less than $10,000,000, with such designation to be set forth in a resolution of the Board 'of. the Directors of the City, hereafter referred to). The Series 1984 Bonds shall be issued in the aggregate principal amount (which shall not exceed $6,500,000), shall be dated, shall bear interest payable semiannually, and shall mature (or shall be subject_to mandatory sinking fund redemption) annually all as specified in a resolution. of the Board of Directors of the City, hereafter referred to. The Series 1984 Bonds shall be issued on a. parity of security with (i) the City. of Little Rock; Arkansas Sewer Revenue Bonds, dated February 1, 1966 (the "1966 Bonds "), issued under the authority of Ordinance No. 11,695 of the City duly adopted and passed December 20, 1965 ( "Ordinance No. 11,695 "), (i.i) the Department of Pollution Control and Ecology of the State of Arkansas Pollution Control Revenue Bonds, dated June 1, 1972 (the "1972 Bonds "), issued under the authority of State of Arkansas Resolution No. 19 -B duly adopted and passed September 22, 1972 ( "State Resolution No. 19 -B "), and which are secured by a pledge of revenues of the System derived from a Water Quality Control Charge levied by the City under the authority of Ordinance No. 12,632 of the City, duly adopted and passed April 4, 1972 ( "Ordinance No. 12,632 "), and (iii) the City of Little Rock, Arkansas Sewer Revenue Bonds, Series 1.981, dated May 1, 1981 (the "1981 Bonds "), issued under the authority of Ordinance No. 13,983 of the City duly adopted and .passed February 17,, 1981 ( "Ordinance No. 13,983 ") . The 1966 Bonds, the 1972 Bonds, the 1981 Bonds, the Series 1984 Bonds, and any -3 f. additional bond *ssued on a parity of sority therewith under 49 the terms and conditions of this Ordinance shall hereafter be collectively referred to as "Sewer Revenue Bonds." The City is hereby authorized to sell the Series 1984 Bonds at public sale on sealed bids in such manner and on such terms as the City shall deem to be in. the best interest of the City and users of the System which shall not be inconsistent with applicable provisions of this Ordinance. Section 3. That the actions of the City in accepting a bid for the Series 1984. Bonds. at the public sale thereof, in approving the designation by the purchaser of the Trustee and Paying Agent, in approving the aggregate principal amount of Series 1984 Bonds to be issued (not to exceed $6,500,000), in approving the details of the maturity and mandatory sinking fund redemption schedule, and in authorizing the form and use of an Official Statement in connection with the public offering of the Series 1984 Bonds shall be submitted to the Board of Directors for approval by resolution. The Series 1984 Bonds shall be numbered consecutively as issued beginning with number one (1) and shall be in denominations of $5,000 and integral multiples thereof. The resolution of the Board of Directors, referred to above, shall set forth in detail .a maturity schedule reflecting the years, annual principal maturities and /or mandatory sinking fund redemptions, semiannual interest, and total principal and interest requirements. Thereafter, the Series 1984 Bonds shall be executed on behalf of the City by the Mayor and. City Clerk and shall have imprinted thereon a facsimile of the seal of the City. The facsimile signatures of the Mayor and the City Clerk may be used upon compliance with the provisions of Act No. 69 of the Acts of the General Assembly of the State of Arkansas for the year 1959, as amended. The facsimile signatures of the Mayor and the City Clerk shall have the same force and effect as if they had personally signed the Series 1984 Bonds. In case the person holding the office of Mayor or City Clerk, whose signature or a facsimile of whose signature shall appear on the Series 1984 Bonds, shall cease to be such officer before the delivery of the Series 1984 Bonds, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes, the same as if he or she had remained in office until delivery of the Series 1984 Bonds. The principal of and interest on the Series 1984 Bonds are secured by and payable solely out of the 1984 Sewer Revenue Bond Fund, as hereafter set forth. The Series 1984 Bonds shall be a valid claim of the bondholders only against such fund and the revenues pledged to such fund, which revenues are hereby pledged and mortgaged for the equal and ratable payment of the principal of, and premium, if any, and interest on, the Series 1984 Bonds, and shall be used for no other purpose except as in this Ordinance MEW ..,Specifically prl.ded. The principal o46nd interest on the Jr 0 Series 1984 Bonds shall not constitute an indebtedness of the City within any constitutional or statutory debt limitation or restriction. Section 4. That the Series 1984 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: -5- • (Form of Series 1984 BO) (FRONT OF BOND] REGISTERED REGISTERED NO. $ UNITED STATES OF AMERICA STATE OF ARKANSAS COUNTY OF PULASKI CITY OF LITTLE ROCK SEWER REVENUE BOND SERIES 1984 Interest Interest Maturity Commencement Rate: Date: Date: CUSIP: Registered Owner: Principal Amount: KNOW ALL MEN BY THESE PRESENTS: That the City of Little Rock, Arkansas (the "City "), hereby acknowledges itself to owe, and for value received promises to pay to the order of the Registered Owner shown above, or registered assigns, but solely from the special fund provided therefor as hereinafter set forth, in lawful money of the United States of America, upon the presentation and surrender of this bond, the Principal Amount shown above on the Maturity_ Date shown above, and to pay in like coin or currency interest thereon at the Interest Rate shown above from the Interest Commencement Date. shown above until paid, such interest to be payable semiannually on the first day of and of each year, commencing on the semiannual interest payment date next succeeding the Interest Commencement Date, payable by check or draft of Bank, in the City of Little Rock, Arkansas (the ''Trustee "), mailed to the Registered Owner hereof as of the applicable Record Date (as defined on the reverse hereof). Principal of this bond is hereby made payable to the Registered Owner at the principal corporate trust office of the Trustee in Little Rock, Arkansas. This bond is part of an issue of Sewer Revenue Bonds, Series 1984 (the "bonds "), aggregating Dollars ($ ), all of like tenor and effect, M 51 r r �■ � � r except as to der*ination, interest rate,Oturity, and right of 52 prior redemption, and are issued for the purpose of financing the cost of constructing extensions, betterments, and improvements to the Sewer System of the City. This bond and all bonds of this issue are issued. pursuant to and in full compliance with the Constitution and -laws of the State of Arkansas, particularly Act No. 132 of the Acts of the General Assembly of the State of Arkansas for the year 1933, as amended ( "Act 132 "), and pursuant to Ordinance No. of the Board of Directors of the City, duly adopted and approved on the day of , 1984, as supplemented by Resolution No. of the Board of Directors of the City, duly adopted and approved on the day of 1984 (collectively, the "Authorizing Ordinance ".), and do not constitute an indebtedness of the City within, any constitutional or statutory limitation. The City shall not be obligated to pay the principal of this bond or the interest hereon except from the special fund provided from the net revenues of the Sewer System [REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH HAVE THE SAME EFFECT AS IF SET FORTH IN THIS PLACE.] 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, by its Board of Directors, has caused this bond to be executed.in its name by the facsimile thereof, with the seal of the first day of ATTEST: [Facsimile Signature] City Clerk (FACSIMILE SEAL) signatures of the Mayor and City Clerk the City imprinted hereon, all as of 198 CITY OF LITTLE ROCK, ARKANSAS By [Facsimile Signature] Mayor -7- M TRU &E'S CERTIFICATE OF AUTHOICATION Jr 3 This is one of the bonds of the issue of Sewer Revenue Bonds, Series 1984, of the City of Little Rock, Arkansas, dated 1, 198 and aggregating $ in principal amount, described in the bond to which this certificate is attached. Printed on the reverse hereof is the complete text of the opinion of Rose Law Firm, a Professional Association, of Little Rock, Arkansas, a signed original of which is on file with the undersigned, delivered and dated the date of the original_ delivery of and payment for the bonds. ee By: (Authorized Signature). Date of Authentication: -8- ,. • (REVERSE OF BOND] • CITY OF LITTLE ROCK, ARKANSAS SEWER REVENUE BOND, SERIES 1984 ADDITIONAL PROVISIONS This bond is issued on a parity of security with (i) the City of Little Rock, Arkansas Sewer Revenue Bonds, dated February 1, 1966 (the "1966 Bonds "), issued under the authority of Ordinance No. 11,695 of the City, (ii) the Department of Pollution Control and Ecology of the State of Arkansas Pollution Control Revenue Bonds, dated June 1, 1972 (the "1972 Bonds "), issued under the authority of State of Arkansas Resolution No. 19 -B, and which are secured by a pledge of revenues of the Sewer System derived from a Water Quality Control Charge levied by the City under the authority of Ordinance No. 12,632 of the City, and (iii) the City of Little Rock, Arkansas Sewer 'Revenue Bonds, Series 1981, dated May 1, 1981 (the "1981 Bonds "), issued under the authority,of Ordinance No. 13,983 of the City. The bonds of this issue are not general obligations of the City, but are special obligations payable solely from net revenues derived from the operation of the Sewer System, an amount of which sufficient to pay the principal of, and premium, if any, and interest on, the bonds (ranking on a parity with the 1966 Bonds, the 1972 Bonds, and the 1981 Bonds) is to be set aside in a special fund for that purpose identified as the 1984 Sewer Revenue Bond Fund. Reference is made to the Authorizing Ordinance for a detailed statement of the nature and extent of security (the flow of Sewer Revenue Funds is First, to an Operation and Maintenance Fund; Second, to the Sewer Revenue Bond Fund securing the 1966 Bonds, the Department Bond Fund securing the 1972 Bonds, the 1981 Sewer Revenue Bond Fund securing the 1981 Bonds, the 1984 Sewer Revenue Bond Fund securing the bonds of this issue, and into any sewer revenue bond funds established in connection with additional bonds issued on a parity of security with the 1966 Bonds, the 1972 Bonds, the 1981 Bonds, and the bonds of this issue; and Third, to a Depreciation Fund), the rights and obligations of the City, the Trustee, and registered owners of the bonds, the terms and conditions upon which additional bonds may be issued on a parity of security with the 1966 Bonds, the 1972 Bonds, the 1981 Bonds, and the bonds of this issue, 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 to produce revenues adequate for the payment of the expenses of operation and maintenance of the Sewer System, to provide for the payment of the .principal of, and M 54 premium, if anyand interest on the bore of this issue, the 515 1966 Bonds, the 1972 Bonds, and the 1981 Bonds, which rank on a parity of security, as 'the same become due, and Trustee's and Paying Agent's fees, and to make the required deposit into the Depreciation Fund. Under the provisions of Act 132, a lien is fixed upon the land for any unpaid sewer charge, even though the use of the Sewer System is by a tenant or lessee instead of the owner, and pursuant thereto the Board of Directors has directed that suit will be brought to enforce the lien and to collect unpaid sewer charges. The bonds are subject to redemption prior to maturity in whole or in part, at the option of the City, in inverse order of maturity (and by lot .within a maturity) as follows: (1) from the unexpended proceeds of the sale of the bonds not needed for paying the cost of the construction work, on any interest payment date on and after 1, 198 at a redemption price equal to 100% of the principal amount of the bonds being redeemed plus accrued interest to the date of redemption; and (2) from funds from any other source on any interest payment date on and after 1, 19 at redemption prices (expressed as percentages of the principal amount of the bonds being redeemed), set forth in the table .below, plus accrued interest to the date of redemption: Redemption Dates Redemption Prices 1, 19 and 1, 19 1020 1, 19 and 1, 19 101 -1/20 1, 19 and 1, 19 101% 1, 19 and 1, 19 100 -1/2% 1, 19 and 1, 19 100% The bonds maturing 1, are subject to mandatory sinking fund redemption prior to maturity in part (the bonds to be redeemed to be selected by the Trustee by lot) on 1, and on. each 1 thereafter to and including 1, 1. 1 at a redemption price equal to 100% of the principal amount of the bonds being redeemed plus accrued interest to the date of redemption, in the following amounts: Year Principal Amount -10- In the event any of the bonds or portions thereof are called for redemption as aforesaid,, notice thereof identifying the bonds or portions thereof to be redeemed will be given by mailing a copy of the redemption notice by first class mail at least fifteen (15) days prior to the date fixed for redemption to the Registered Owner of each bond to be redeemed as of the applicable Record Date at the address shown on the registration books. Failure to give any such notice by mailing, or any defect therein, shall not affect the validity of any proceeding for the redemption of any bond. with respect to which no such failure has occurred. All bonds or portions thereof so called for redemption will cease to bear interest after the specified redemption date provided funds for their redemption are on deposit at the place of payment at that time. Any notice mailed as provided in the preceding paragraph shall be conclusively presumed to have.been duly given, whether or not the Registered Owner receives the notice. This bond is transferable by the Registered Owner hereof in person or by his or her attorney duly authorized, only upon the books of the City kept for that purpose at the office of the Trustee, upon surrender of this bond together with a written instrument of transfer in form and with guaranty of signature satisfactory to the Trustee duly executed by the Registered Owner or his or her duly authorized attorney. Upon such transfer,. a new bond or bonds in the same aggregate principal amount will be issued to the transferee in exchange therefor as provided in the Authorizing. Ordinance, and upon payment of the charges therein. prescribed. The City, the Trustee, and the Paying Agent may deem and treat the person in whose name this bond is registered as the absolute owner hereof (whether or not this bond shall be overdue) for the purpose of receiving payment of, or on account of, principal hereof and premium, if any, and interest due hereon and for all other purposes. The bonds are issuable as fully registered bonds in denominations of $5,000 or any 'integral multiple thereof. Subject to the limitations and upon payment of the charges provided in the Authorizing Ordinance, the Registered Owner of any bond or bonds may surrender the same (together with a written instrument of transfer and guaranty of signature satisfactory to the Trustee duly executed by the Registered Owner or his or her. duly authorized attorney) in exchange for a like aggregate principal amount of bonds of other authorized denominations of the same maturity. -11- 56 The .Trustee *all not be required transfer or exchange 57 any bond during any period which begins on a Record Date for such bond and ends on the next succeeding interest payment date or redemption date, as the case may be. "Record Date" means (i) the 15th calendar day of the month next preceding any interest payment date of such bond; or (ii) the date of the mailing of notice calling such bond or portion thereof for redemption as herein provided. This bond is expressly made negotiable under Act 132 and is issued with the intent that the laws of the State of Arkansas will govern its construction. No recourse shall be had for the payment of the principal of, or premium, if any, or interest on, any of the bonds or for any claim based thereon or upon any obligation, covenant, or agreement contained in the bonds or the Authorizing Ordinance against' any past, present, or future director, officer, or employee of the City, or any incorporator, member, commissioner, director, trustee, officer, or employee of any successor of the City, as such, either directly or through the City or any successor of the City, under any rule of law or equity, statute, or constitution or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such incorporator, member, commissioner, director, trustee, officer, or employee as such is hereby expressly waived and released as a condition of and consideration for the issuance of any of the bonds. IT IS HEREBY CERTIFIED, RECITED, AND DECLARED that all acts, conditions, and things required to exist, happen, and be performed precedent to and in the issuance of this bond do exist, have happened, and have been performed in due time, form, and manner as required by law; that the indebtedness represented by the bonds of this issue does not exceed or violate any constitutional or statutory limitation; and that sufficient net revenues have been pledged to and will. be set aside into the 1984 Sewer Revenue Bond Fund, referred to above, for the payment of the principal of, and premium, if any, and interest on, the bonds of this issue. -12- M M M M M M M • ABBREVIATIONS • The following abbreviations, when used in the inscription on the face of this bond, shall be construed as though .they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common UNIF GIFT MIN ACT Custodian (Gust) (Minor) State Additional abbreviations may also be used, though not in the above list. FORM OF TRANSFER FOR VALUE RECEIVED, the undersigned, hereby sells, unto name, address, and Social Security of assignee) the within bond and hereby irrevocably constitutes and a attorney on the books: kept for registration substitution in the premises. Dated: Signature Guaranteed: assigns, and transfers (Please insert or other identifying number all rights thereunder, and ppoints to transfer the within bond thereof, with full power of NOTICE: The signature of this assignment must . correspond with the name as it appears upon the face of, the within bond in every particular, without alteration or enlargement or any change whatever. NOTICE: Signature(s) must be guaranteed by a member.firm of the New York Stock Exchange or a commercial bank or a trust company. -13- 9M M M M M. r M M M M M M M M. M Section 5. 1&) That the City coleants that it will continue in effect the present schedule of rates for sewer services and that the rates will not be reduced except as hereafter provided in this section, which schedule of rates was established by Ordinance No. 13,982, adopted and approved on the 17th day of February, 1981, as amended by Ordinance No. 14,303, adopted .and approved on the 7th day of September, 1982, to which reference is hereby made for a detailed statement of the rates, and the provisions of Ordinance No.. 13,982, as amended by Ordinance No. 14,303, are hereby incorporated herein as. though fully set forth at this point. (b) That the City covenants and agrees with the bondholders that the rates will produce a total revenue at least sufficient to pay the operation and maintenance expenses of the System, pay the principal of, and premium, if any, and interest on, the 1966 Bonds, the 1972 Bonds, the 1981 Bonds, and the Series 1984 Bonds and Paying Agent's fees in connection therewith, and make the required deposit into the Depreciation Fund. The City also covenants and agrees that the rates shall, from time to time, as and when necessary, be increased to such an amount as will provide revenues at least sufficient for the above purposes. (c) That the City further covenants and agrees that the rates shall never be reduced while any Sewer Revenue Bonds are outstanding, unless there is obtained from an independent certified public accountant a written opinion, based upon the number of customers and customer usage as reflected by the records of the Sewer Committee, that the proposed new rates will produce sufficient revenue to provide, for the cost of operation, repair, and depreciation of the System for the then next suceeding fiscal year and leave,a balance equal to at least one hundred forty percent (140 %) of the maximum amount that will become due in any year for principal, interest, and service charges on all Sewer Revenue Bonds then outstanding. (d) That none of the facilities or services afforded by the System shall be furnished without a charge being made therefor. In the event that the City ':or any department, agency, or instrumentality thereof shall avail itself of the facilities and services afforded by the System, the reasonable value of the service or facilities so afforded shall be charged against the City or such department, agency.,' or instrumentality and shall be paid for as the charges accrue... The revenues so received shall be deemed to be revenues derived from the operation of the System and shall be used and accounted for in the same manner as the other revenues derived from the operation of the System. Section 6. Sewer Fund. The System shall be continuously operated as a revenue producing undertaking and all revenues derived from the operation of the System shall be paid into a -14- M 60H special fund coted pursuant to the pwisions of Ordinance 60 No. 11,695 'and designate& "Sewer Fund." The revenues so deposited in the Sewer Fund are hereby pledged and shall be applied to the payment of the reasonable and necessary expenses of operation, repair, and maintenance of the. System, to the payment of the principal of, and premium, if any, and the interest on, the Sewer Revenue Bonds, to the establishment and maintenance of a reserve for contingencies, and to the providing of a Depreciation Fund, as hereafter set forth. The Sewer Fund, and the other special funds hereafter in this Ordinance provided for or referred to, shall be maintained in such depositories of the City as shall from time to time be designated by the Sewer Committee, with all such depositories to hold membership in the Federal Deposit Insurance Corporation, to be located in Little Rock, Arkansas, and to have a capital and surplus of not less than Ten Million Dollars ($10,000,000), and with all deposits in any depository in excess of the amount insured by the Federal Deposit Insurance Corporation to be secured by bonds or other direct or fully guaranteed obligations of the United States of America. section 7. Sewer Operation and Maintenance Fund. There shall be paid from the Sewer Fund into a fund created pursuant to the provisions of Ordinance No. 11,695 and designated "Sewer Operation and Maintenance Fund," on the first business day of each month while any Sewer Revenue Bonds are outstanding, an amount sufficient to pay the reasonable and necessary monthly expenses of operation, repair, and maintenance of the System for such month and from which disbursements shall be made only for those purposes. Fixed annual charges such as insurance premiums and the cost of major repair and maintenance expenses may be computed and set up on an annual basis, and one - twelfth (1/12) of the amount thereof may be paid into the Sewer Operation and Maintenance Fund each month. If in any month for any reason there shall be a failure to transfer and pay the required amount into Sewer Operation and Maintenance Fund, the amount of any deficiency shall be added to the amount otherwise required to 'be transferred and paid into said Fund in the next succeeding month. If in any fiscal year a surplus shall be accumulated in the Sewer Operation and Maintenance Fund over and above the amount which shall be necessary to defray the reasonable and necessary cost of operation, repair, and maintenance of the System during the remainder of the then current fiscal year and the next ensuing fiscal year, such surplus may be transferred and deposited in the Sewer Revenue Bond Funds (hereinafter created or referred to) or to the Sewer Depreciation Fund (created pursuant to the provisions of Ordinance No. 11,695) as the Sewer Committee may designate; provided, however, that any such transfer into the Sewer Revenue Bond Funds shall be in addition to all other payments required to be made into such Funds. -15- • 0 61 Section 8. 1984 Sewer Revenue Bond Fund. (a) After making the monthly deposit into the Operation and Maintenance Fund, there shall be transferred and paid from the Sewer Fund (i) into the 1966 Sewer Revenue Bond Fund created pursuant to the provisions of Ordinance No. 11,695 the sums required by Ordinance No. 11,695, (ii) into the 1972 Department Bond Fund created pursuant to the provisions of Resolution No. 19 -B the sums required by Resolution No. 19 -B, (iii) into the 1981 Sewer Revenue Bond Fund created pursuant to the provisions of Ordinance No. 13,983 the sums required by Ordinance No. 13,983, and (iv) into a special fund, which is hereby created and designated "1984 Sewer Revenue Bond Fund," the sums in the amounts and at the times hereafter stated in subsection (b) for the purpose of providing funds for the payment of the principal; of, and premium, if any, and interest on, the Series 1984 Bonds ".^ and the Paying Agent's fees in connection therewith as the same become due (at maturity or upon mandatory sinking fund redemption) according to the maturity schedule to be set out in the Resolution of the Board of Directors, hereinbefore referred to in Section 3 hereof, and to create and maintain a reserve for contingencies. The 1966 Sewer Revenue Bond Fund, the 1972 Department Bond Fund, the 1981 Sewer Revenue Bond Fund, the 1984 Sewer Revenue Bond Fund, and any sewer revenue bond funds established in connection with additional bonds issued on a parity of security therewith shall hereafter be collectively referred to as "Sewer Revenue Bond Funds." (b) There shall be paid from the Sewer Fund into the 1984 Sewer Revenue Bond Fund the following: (i) into a special account within the 1984 Sewer Revenue Bond Fund which is hereby created and designated "Debt Service Account," commencing on the first business day of the month succeeding the month in which the Series 1984 Bonds are originally issued and on the first business day of each month thereafter until all outstanding Series 1984 Bonds, principal, premium, if any, and interest, have been paid in full, or provision made for such payment, a sum equal to one -sixth (1/6) of the next installment of interest and one - twelfth (1/12) of the next installment of principal (at maturity or upon mandatory sinking fund redemption), plus an amount sufficient to pay the premium, if any, next due on the outstanding Series 1984 Bonds, plus an amount sufficient to provide for the Paying Agent's fees, on all outstanding Series 1984 Bonds; plus (ii) into a special account within the 1984 Sewer Revenue Bond Fund which is hereby created and designated "Reserve Account," commencing on the first business day of the month succeeding the month in which the Series 1984 Bonds are originally issued and on the first business day of -16- M M M M each month thereafter until all outstanding Series 1984 Bonds, principal, premium, if any, and interest, have been paid in full, or provision made for such payment, a sum equal to one -one hundred twentieth (1/120) of the Reserve Requirement (which shall be the maximum amount that will become due in any year, as reflected by a maturity and mandatory sinking fund redemption schedule to be set forth in the Resolution of the Board of Directors, hereinbefore referred to in Section 3 hereof, for principal of and interest on the outstanding Series 1984 Bonds); provided however than when in any year no principal of, or premium, if any, or interest on, the Series 1984 Bonds is in default and the amount in the Reserve Account is not less than the Reserve Requirement, and so long as the said Reserve. Requirement is maintained, the additional deposit of one -one; hundred twentieth (1/120) of the Reserve Requirement may be',,- suspended, but shall be resumed in the event that the amount in the Reserve Account becomes less than the Reserve Requirement for any reason. (c) If the revenues of the System are insufficient to make the required payments into the 1984 Sewer Revenue Bond Fund on the first business day of any month, then the amount of any deficiency in the payment shall be added to the amount otherwise required to be paid into the 1984 Sewer Revenue Bond Fund on the first business day the next month. (d) If for any reason there shall be a failure at any time to make any of the required payments into the Debt Service Account, any sums then held in the Reserve Account shall be used to the extent necessary for the payment of the principal of, and premium, if any, and interest on, the Series 1984 Bonds, and the Paying Agent's fees, but the Reserve Account shall be reimbursed from the Sewer Fund before any of the moneys in the Sewer Fund shall be used for any other purpose except for making the required monthly payments into the Operation and Maintenance Fund and the Sewer Revenue Bond Funds (including the Debt Service Account). The Reserve Account shall be used solely as herein provided. (e) When the moneys in the 1984 Sewer Revenue Bond Fund shall be and remain sufficient to pay the principal of, and premium, if any, and interest on, all Series 1984 Bonds then outstanding, and the Paying Agent's fees, there shall be no obligation to make any further payments into the 1984 Sewer Revenue Bond Fund. (f) All moneys in the 1984 Sewer Revenue Bond Fund shall be used solely for the payment of the principal of, and premium, if any, and interest on, the Series 1984 Bonds and the Paying Agent's fees, except as herein specifically provided. If a surplus shall exist in the 1984 Sewer Revenue Bond Fund over and -17- DEJ M above the amounteecessary to insure the oompt payment of the principal of, and premium, if any, and interest on, the Series 1984 Bonds•.as the same become due and the Paying Agent's fees and over and above the required reserve for contingencies, such surplus may be used, at the option of the Sewer Committee, for the redemption of the Series 1984 Bonds prior to maturity or for constructing extensions, betterments, and improvements to the System. (g) There shall be withdrawn from the 1984 Sewer Revenue Bond Fund at least five (5) days before the maturity or mandatory sinking fund redemption date of any Series 1984 Bond and five (5) days before any interest payment date for any Series 1984 Bond and deposited with the Paying Agent an amount equal to the amount of such Series 1984 Bond coming due (at maturity or upon mandatory sinking fund redemption) or premium, if any, or interest thereon for the sole purpose of paying the same, together with the Paying Agent's .fee. Such deposit shall be at the sole risk of the City and shall not operate as a payment of the Series 1984 Bonds or premium, if any, or interest thereon until so applied. Section 9. Sewer Depreciation Fund. After making the required payments into the Operation and Maintenance Fund and the Sewer Revenue Bond Funds, there shall be paid from the Sewer Fund into the "Sewer Depreciation Fund" created pursuant to the provisions of Ordinance No. 11,695 on the first business day of each month while any Sewer Revenue Bonds are outstanding, three percent (3 %) of the revenues of the System which remain after the required payment into the Operation and Maintenance Fund has been made. The moneys in the Sewer Depreciation Fund shall be used solely for the purpose of paying the cost of replacements made necessary by the depreciation of the System, provided,. however, that moneys in the Sewer Depreciation Fund may be used to the extent necessary to prevent a default in the payment of the principal of, and premium, if any., and interest on, any outstanding Sewer Revenue Bonds as the same become due (at maturity or upon mandatory sinking fund redemption). If in any. fiscal year a surplus shall be accumulated in the Sewer Depreciation Fund over and above the amount necessary to defray the cost of the probable replacements during the then current fiscal year and the next ensuing fiscal year, such surplus may be transferred and paid into the Sewer Revenue Bond Funds; provided, however, that such payments into the Sewer Revenue Bond Funds shall be in addition to all other payments required to be made into the Sewer Revenue Bond Funds, Section 10. That any surplus in the Sewer Fund, after making the required monthly deposits into the other funds as set forth above, may be used, at the option of the City, Elm M low M (a) for the redemption of Sewer Revenue Bonds prior to maturity in the manner and upon the terms set forth herein (or in the ordinances or resolutions authorizing the issuance of Sewer Revenue Bonds other than the Series 1984 Bonds) pertaining to redemption prior to maturity; or (b) for the construction of extensions, betterments, and improvements to the System (including payment of the principal of, and premium, if any, and interest on, bonds issued therefor); or (c) for any lawful purpose of the System, as approved by the ,Sewer Committee. Section 11. That the City hereby agrees that all payments on the Series 1984 Bonds, principal, premium, if any, and interest, shall be paid only through the designated Paying Agent. All Series 1984 Bonds paid or purchased either at or before maturity shall be cancelled when such payment or purchase is made and held by the Manager of the System and shall not be reissued. Section 12. That the System shall be operated on a fiscal year basis beginning January 1 and ending December 31 of each year. Section 13. That the Series 1984 Bonds shall be subject to redemption prior to maturity in the manner and upon the terms set forth in the bond form appearing in Section 4 hereof. Section 14. That as long as any of the Series 1984 Bonds authorized hereby are outstanding, the City shall not issue or attempt to issue any bonds or obligations having or claimed to be entitled to a priority of lien on the revenues of the System over the lien securing the Series 1984 Bonds, including the Improvements herein authorized and any and all future extensions, betterments, and improvements to the System. However, nothing in this Ordinance shall be construed to prevent the issuance by the City of additional bonds to refund any outstanding Sewer Revenue Bonds or to finance or pay.the cost of constructing any future extensions, betterments, and improvements to the System; provided, the City shall not authorize or issue any such additional bonds ranking on a parity with the outstanding Series 1984 Bonds unless and until (1) there shall have been procured and filed with the Trustee a statement by an independent certified public accountant not in the regular employ of the City reciting the opinion based upon necessary investigation that gross revenues derived from the operation of the System for the preceding fiscal year were -19- Me sufficient in aunt to provide for Oe annual cost of operation, repair, maintenance, and depreciation of the System after the then contemplated extensions, betterments, and improvements shall have been completed and placed in operation, and to leave a balance equal to at least one hundred forty percent (140° %) of the maximum amount that will become due in any year for principal, interest, and service charges on all Sewer Revenue Bonds then outstanding and the -Sewer Revenue Bonds then proposed to be issued; or (2) there shall have been procured and filed with the Trustee a statement by an independent certified public accountant not in the regular employ of the City or an independent consulting engineer not in the regular employ of the City reciting the opinion based upon necessary investigation that gross revenues to be derived from the operation of the System for the succeeding fiscal year will be sufficient in an amount to provide for the annual cost of operation, repair, maintenance,. and depreciation of the System taking into account the contemplated extensions, betterments, and improvements as if completed and placed in service, and to leave a balance equal to at' least one hundred forty percent (1400) of the maximum amount that will become due in any year for principal and interest and service charges on all Sewer Revenue Bonds then outstanding and the Sewer Revenue Bonds then proposed to be issued. The additional bonds, the issuance of which is restricted and conditioned by this Section 14, shall not be deemed to mean bonds or other obligations, the security and source of payment of which are subordinate and subject to the priority of the Sewer Revenue Bonds. Section 15. That it is covenanted and agreed by the City with the registered owners of the Series 1984 Bonds, or any of them, that the City and the Sewer Committee will faithfully and punctually perform all duties with reference to the System required by the Constitution and laws of the State of Arkansas, including the charging and collecting of reasonable and sufficient rates lawfully established for services rendered by the System, the segregating of the revenues of the System as herein required, and the applying of revenues to the respective funds herein created or referred to. Section 16. That the City and the Sewer Committee covenant and agree that they will maintain the System in good condition and operate the same in an efficient manner and at reasonable cost. While any Sewer Revenue Bonds are outstanding, the City and the Sewer Committee agree that they will insure and at all times keep insured, in the amount of the actual value thereof, in a responsible insurance company or companies authorized and qualified under the laws of the State of Arkansas to assume the risk thereof,. all properties of the System against loss or -20- M 65 damage from firolightning, tornado, wir*, riot, strike, civil commotion, malicious damage, explosion, and against loss or damage from any other causes customarily insured against by private companies engaged in a similar type of business. The insurance policies are to be taken with companies approved by the Sewer Committee and the Trustee, are to carry a clause making them payable to the Sewer Committee and Trustee as their interests may appear, and are either to be placed in the custody of the Trustee or satisfactory evidence of insurance shall be filed with the Trustee. In the event of loss, the proceeds of such insurance shall be applied solely toward the reconstruction, .replacement, or repair of. the System, and in such event the City and the Sewer Committee will, with reasonable promptness, cause to be commenced and completed the reconstruction, replacement, and repair work. If such proceeds are more than sufficient for such purposes, the balance remaining shall be deposited to the credit of the Sewer Fund and if such proceeds shall be. insufficient for such purposes, the deficiency shall be supplied first, from moneys in the Sewer Depreciation Fund, and second, from moneys in the Sewer Operation and Maintenance Fund, and third, from. available moneys' in the Sewer Fund, Nothing herein shall be construed as requiring the City to expend any funds for operation and maintenance of the System or for premiums on insurance which are derived from sources other than the operation of the System, but nothing herein shall be construed as preventing the City from doing so. Section 17. That the City and the Sewer Committee covenant and agree that so long as any Sewer Revenue Bonds are outstanding, that they will not mortgage, pledge, or otherwise encumber the System, or any part _thereof or any revenues derived from the operation thereof, except as herein specifically provided, and will not sell, lease, or otherwise dispose of all or any substantial portion of the same. Section 18. That the Sewer Committee shall keep or cause to be kept proper books of accounts and records (separate from all other records and accounts of the City) in which complete and correct entries shall be made of all transactions relating to the construction of the herein authorized Improvements and relating to the operation of the System and its revenues. Such books shall be available for inspection by the registered. owners of any of the.Sewer Revenue Bonds at reasonable times and under reasonable circumstances. The City and the Sewer Committee agree to have these records audited by an independent certified public accountant at least once. each year, and a copy of the audit shall be delivered to the Trustee and any bondholder who shall request the same in writing from the Sewer Committee. In the event the City and the Sewer Committee fail or refuse to -21- w 66 makes the audit. & Trustee may, and upon west of the holders of not less than ten percent (10 %) in principal amount of the Sewer Revenue Bonds then outstanding shall, have the audit made, and the cost thereof shall be charged against the Sewer Operation and Maintenance Fund. In addition, at least once in each twelve (12) months period during the construction of the herein authorized Improvements, the City and the Sewer Committee shall cause an audit to be made by a certified public accountant covering all moneys pertaining to the construction fund (hereinafter created or referred to), and. the security held therefor and any investments thereof, and all disbursements made pursuant to requisitions filed by the Manager of the System, and copies of such audit shall be furnished to the Trustee and any bondholder who shall request the same in writing from the Sewer Committee. Section 19. That the owner or owners of all improved property lying within the area that will be served by the System, after the proposed Improvements have been completed, are hereby directed and required, upon written request from the Sewer Committee, to connect all toilet and waste water facilities of such improved property with the System; and the owners of property that is improved after the completion of the proposed Improvements shall, upon written request of the Sewer Committee, immediately connect the toilet and waste water facilities of such property with the System. The required notice by the Sewer Committee shall be given at least thirty (30) days prior to the final date for connection, and if any property owner shall fail to make such connection after having been so requested in writing, the City and the Sewer Committee hereby covenant and agree to institute appropriate proceedings in a court of .competent jurisdiction to compel such connection. Furthermore, any property owner who fails or refuses to connect his or her improved property with the System after having been so requested by the Sewer Committee shall be guilty of a misdemeanor and upon conviction shall be fined in any sum not less than $2 and no more than $10, and .each day's failure or refusal after the expiration of the time fixed in the notice to make the connection shall be a separate offense; provided, however, that the provisions hereof pertaining to a misdemeanor shall be effective only in the event that the City Health Officer, or other duly designated individual or board, has found and declared that such failure on the part of any particular property owner constitutes a hazard to the public health and safety of the City and its inhabitants. Section 20. (a) That the City covenants and agrees that the holders and registered owners of the Sewer Revenue Bonds shall have the protection of the provisions of Section 13 of Act 132, as amended (Ark. Stat. Ann. §19- 4113), and that the -22- 67 City will diligoly proceed to enforce to lien of unpaid sewer 6 8 charges against the premises served by the System and to collect the amount due together: with the' penalty and expenses authorized by. Act 132. If the City shall fail to proceed within thirty (30) days after written request shall have been filed by the Trustee, the Trustee may, and upon the written request of the holders and registered owners of not less than ten percent (l0 %) in principal amount of the Sewer Revenue Bonds then outstanding shall, proceed to enforce said lien in accordance with and pursuant to the authorization of Act 132. (b) That if there be any default in the, payment of the principal of, or premium, if any, or interest on, any Sewer Revenue Bonds,.or if the City defaults in any Sewer Revenue Bond Funds requirements or in the performance of any of the other covenants contained and set forth in this Ordinance (including, without limitation, failure on the part of the City to maintain the Reserve Requirement), or if there shall be filed by or against the City a petition in bankruptcy, the Trustee may, and upon the written request of the holders and registered owners of not less than ten percent (10 %) in principal amount of Sewer Revenue Bonds then outstanding shall, by proper suit compel the performance- :.of the duties of the officials of the City as set forth in Act 132. In the case of a default in payment of the principal of, and premium, if any; and interest on, any of the outstanding Sewer Revenue Bonds, or if the City fails to complete any other obligation which it herein assumes, and such default shall continue for thirty (30) days thereafter, the Trustee may, and upon the written request of the holders and registered owners of not less than ten percent (10 %) in principal amount of the Sewer Revenue Bonds then outstanding shall, apply. in. a proper action to a court of competent jurisdiction for the appointment of a receiver to administer the System on behalf of the City and the holders and registered owners of the Sewer Revenue Bonds, with power to charge and collect (or by mandatory injunction or otherwise to cause to be charged and collected) rates sufficient to provide for the payment of the expenses of operation, repair, and maintenance and to pay the Sewer Revenue Bonds, principal and interest, outstanding and to apply the revenues in conformity with the provisions of Act 132 and this Ordinance. When all defaults in principal, premium, and interest payments-have been. cured, the custody and operation of the System shall revert to the City. (c) No holder or registered owner of any of the outstanding Sewer Revenue Bonds shall have any right to institute any suit, action, mandamus, or other proceeding in equity or in law for the protection or enforcement of any right under this Ordinance or under Act 132, unless such holder or registered owner previously shall have given to the Trustee written notice of the -23- default on accou0 of which such suit, acen, or proceeding is to be taken, and unless. the holders and registered owners of not less than ten percent (10 %) in principal amount of the Sewer Revenue Bonds then outstanding. shall have made written request of the Trustee after the right to exercise such powers or right of action, as, the case may be, shall have accrued, and shall have afforded the Trustee a reasonable opportunity either to proceed to exercise the powers herein granted or granted by said Act 132 or the laws of the State of Arkansas, or to institute such action, suit, or proceeding in the Trustee's name, and unless, also, there shall have been offered to the Trustee reasonable security and indemnity against the costs, expenses, and liabilities to be incurred therein or thereby, and the Trustee shall. have refused or neglected to comply with such request within. a reasonable time, and such notification, request, and offer of indemnity are hereby declared in every such case, at the opt.ion of the Trustee, to be conditions precedent to. the execution of the powers and trusts of this Ordinance or to any other remedy hereunder. It is hereby declared and .intended that no one or more registered owners of the Series 1984. Bonds shall have any right in any manner whatever by his, her, or their action to affect, disturb, or prejudice the security of this Ordinance or to enforce any right hereunder except in the manner herein provided, that all proceedings at law or in equity shall be instituted, had, and maintained in the manner herein provided and for the benefit. of all holders and registered owners of the outstanding Sewer Revenue Bonds, and that any individual rights of action or other. right given to one or more of such holders and registered owners by law are restricted by this Ordinance to the rights and remedies herein provided. (d) That all rights and remedies enforceable by the Trustee may be enforced by it without the possession of any of the Series 1984 Bonds, and any such suit, action, or proceeding instituted by the Trustee shall be brought in its name for the benefit of all the holders and registered owners of all outstanding Sewer Revenue Bonds, subject to. the provisions of this Ordinance. (e) That no remedy conferred upon or reserved to the Trustee or the registered owners of the Series 1984 Bonds is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing or available at law or in equity. (f) That no delay or omission of the Trustee 'or any registered owners of the Series 1984 Bonds to exercise any right or power accrued upon any default shall impair any such right or -24- LOW power or shall Sconstrued to be a waive of any such default 70 or an acquiescence therein; and every power and remedy given by this Ordinance to the Trustee and the registered owners of the Series 1984 Bonds may be exercised from time to time and as often as may be deemed expedient. (g) That the Trustee may, and upon the written request of the holders and registered owners of not less than ten percent (10 %) in principal amount of Sewer Revenue Bonds then outstanding shall, waive any default which shall have been remedied before the entry of final judgment or decree in any suit, action, or proceeding instituted under the provisions of this Ordinance or before the completion of the enforcement of any other remedy, but no such waiver shall extend to or affect any other existing or any subsequent default or defaults of impair any rights or remedies consequent thereon. Section 21. That the Trustee shall only be responsible for the exercise of good faith and reasonable prudence in the execution of its trust. The recitals in this Ordinance and on the face of the Series 1984 Bonds, other than the Trustee's Certificate of Authentication appearing thereon, are the recitals of the City and not of the Trustee. The Trustee shall not be required to take any action as Trustee unless it shall have been requested to do so in writing by the holders and registered owners of not less than ten percent (10 %) in principal amount of the Sewer Revenue Bonds then outstanding and shall have been offered reasonable security and indemnity against the costs, expenses, and liabilities to be incurred therein or thereby. The Trustee may resign at any time upon ten (10) days' notice in writing to the City, and the majority in value of the registered owners. of the outstanding Series 1984 Bonds at any time, with or without .cause, may remove the Trustee. In the event of a vacancy in the office of Trustee, either by resignation or by removal, the majority in value of the registered owners of the outstanding Series 1984 Bonds may appoint a new Trustee, such appointment to be evidenced by a written instrument or instruments filed with the City Clerk. If the majority in value of the registered owners of the outstanding Series 1984 Bonds shall fail to fill a vacancy within thirty (30) days after the same shall occur, then the City shall forthwith designate a new Trustee by a written instrument filed in the office of the City Clerk. The original Trustee and any successor Trustee shall file a written acceptance and agreement to execute the trust imposed upon it'or them by this Ordinance, but only upon the terms and conditions set forth in this Ordinance and subject to the provisions of this Ordinance, to all of which the registered owners of the Series.1984 Bonds agree. Such written acceptance shall be filed with the City Clerk, and a copy thereof shall be placed in the -25- bond transcript . Any successor Trusteashall have all the 71 powers herein granted to the original Trustee. Any Trustee that resigns or is removed pursuant to the provisions hereof shall cease to be Paying Agent and any successor Trustee shall be and become Paying Agent. Section 22. That when the Series 1984 Bonds have been executed by the Mayor and City Clerk and the seal of the City imprinted thereon, as herein provided, they shall be delivered to the Trustee, which shall authenticate them and deliver them to the purchaser upon the payment of the purchase price. The total sale proceeds shall be handled as follows: (a) There shall be deposited into the 1984 Sewer Revenue Bond Fund the amount of the accrued interest paid by the, purchaser; and (b) The balance of the total sale proceeds shall be paid into a special fund of the City which is hereby created and designated "1984 Sewer Construction Fund" (the "Construction Fund "). The Construction Fund shall be maintained in a depository or depositories, designated by the Sewer Committee, which hold membership with the Federal Deposit Insurance Corporation, are located in Little Rock, Arkansas, and have a capital and surplus of not less than Ten Million Dollars ($10,000,000). The moneys in the Construction Fund in excess of the amount insured by the Federal Deposit Insurance Corporation shall be continuously secured by bonds or other direct or fully guaranteed obligations of the United States of America or shall be invested as hereafter authorized. The moneys in the Construction Fund shall be disbursed for the payment of the cost of accomplishing the Improvements, paying necessary .expenses and making necessary expenditures incidental thereto, paying engineering fees, paying legal fees, and paying the.expenses of the authorization and issuance of the Series 1984 Bonds. For each disbursement there shall be prepared a requisition signed by the Finance Director of the City and the Manager of the System stating in respect of each such payment: (1) The item number of the payment; (2) The name of the person, firm, or corporation to whom payment is due; (3) The amount to be paid; and (4) The purpose by general classification for which the obligation to be paid was incurred. -26- err r rN■ r� rr �■ rr r r r r r r r� �r Each requisaon shall be accompan9 by a certificate 72 signed by the Manager.of the System:certifying: (1) That obligations in the stated amounts have been incurred by the City and that each item thereof is a proper charge against the Construction Fund and has not been paid; (2) That there has not been filed with or served upon the Sewer Committee notice of 'any lien, right to lien, attachment upon, or claim affecting the right to receive payment of any of the moneys payable. to any of the persons, firms, or corporations named in such requisition, which has not been released or will not be released simultaneously . with the payment of such obligation;'and (3) That such requisition:. contains no item representing payment on account of any retained percentage which the City is at the date of such certificate entitled to retain.. In the case of all expenses over which the consulting engineers shall exercise supervision .(which generally shall include all expenses and expenditures with respect to that portion of the Improvements described in (1) and (2) of the third paragraph of this Ordinance except engineering fees, legal fees, expenses pertaining to the authorization and issuance of the Series 1984 Bonds, and incidental expenses not directly related to the construction), the applicable requisition shall be accompanied by a certificate signed by a duly authorized representative of the consulting engineers certifying approval thereof. One copy of each requisition with accompanying certificates shall be filed with the depository of the Construction Fund, one copy shall. be filed with the Manager of the. System, and one copy shall be 'filed with the Finance Director of the City. Upon receipt of each requisition the depository of the Construction Fund shall disburse funds to the City sufficient to pay the persons; firms, or corporations designated in the requisition. The funds disbursed shall be deposited in the existing "sewer construction fund'' of the City. from which said funds, in combination_;, with funds from other sources, shall be disbursed to :pay the cost of the Improvements. The City shall cause .each depository of the. Construction Fund to execute an appropriate agreement whereby it accepts it responsibilities as set forth above. When the Improvements have been cpmpleted and all authorized expenditures from the Construction Fund have been made, if there be any remaining balance in the Construction Fund, the City Finance Director and the Manager of the System shall file a certificate with the depository of the Construction Fund, with,a -27- w wr copy. of the cer*icate to be filed witiehe Trustee, stating that the Improvements have been —accomplished and that all authorized expenditures have been made and specifying the disposition to be made of the remaining balance in the Construction Fund. In this regard, any such remaining. balance may be used for.redeeming Series 1984 Bonds prior to maturity or transferred to the Sewer Fund, as shall be determined by the Sewer Committee. Upon receipt of such certificate, the depository of the Construction Fund shall disburse or transfer the remaining balance as directed in the certificate. Section 23. (a) That moneys held for the credit of the Construction Fund shall, as nearly as may be practicable, be maintained in such depositories of the City as may from time to time be designated by the Sewer Committee, with all such depositories to hold memberships in the Federal Deposit Insuarance Corporation, and with all deposits in any depository in excess of the amount insured by-the Federal Deposit Insurance Corporation to be continuously invested and reinvested by the Sewer Committee in direct obligations of, or obligations the principal of and_: interest on which are unconditionally guaranteed by, the United States Government, which shall mature, or which shall be subject to redemption by the holder thereof at the option of such holder, not later than six (6) months after the date of such investment, or in certificates of deposit or repurchase agreements issued by any state or national bank which shall have combined capital and surplus of not less than $10,000,000 (which may include the Trustee), such certificates or agreements, to the extent not insured by the Federal Deposit Insurance Corporation, to be secured by a pledge of direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States Government, having a market value, to be determined at intervals not exceeding six (6) months, exclusive of accrued interest, equal at least to the principal amount of such certificates of deposit or repurchase agreements. (b) Moneys held in the Reserve Account shall be continuously invested and reinvested by th6 Sewer Committee in direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States Government, which shall mature, or which shall be subject to redemption .by the holder thereof, at the option of such holder, not later than five (5) years after the date of such investment, or in certificates of deposit or repurchase agreements issued by any state or national bank which shall have combined capital and surplus of not less than $10,000,000 (which may include the Trustee), such certificates or agreements,, to the extent not insured by the Federal Deposit Insurance Corporation, to be secured by a pledge of direct obligations of, or obligations the principal of and interest on which are -28- 73 unconditionally guaranteed having a market value, exceeding six (6) months, at least to the principal or repurchase agreements. by, the Un A States Government, 74 to be determined at intervals not exclusive of accrued interest, equal amount of such certificates of deposit (c) Moneys held for the credit of any other fund or account may be invested and reinvested by the Sewer Committee in direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States Government, which shall mature, or which shall be subject to redemption by the holder thereof, at the option of such holder, not later than the date or dates when the moneys . he.ld for the credit of the particular fund will be required for the purposes intended, or in certificates of deposit or repurchase agreements issued by any state or national bank which shall have combined capital and surplus of not less than $10,000,000 (which may include the Trustee), such certificates or agreements, to the extent not.insured by the Federal Deposit Insurance Corporation, to be secured by a pledge of direct obligations of, or obligations the principal of and interest on which .are unconditionally guaranteed by, the United States Government, having a market value, to be determined at intervals not exceeding six (6) months, exclusive of accrued interest, equal at least to the principal amount of such certificates of deposit or repurchase agreements. (d) Obligations so purchased as an investment of moneys in any such fund shall be placed in the custody of the •.Trustee or at such place or places. as the Trustee may designate and shall be deemed at all times to be a part of such fund. The interest accruing thereon and any profit realized from such investment. shall be credited to such fund, and any loss resulting from such investment shall be charged to such fund; provided, however, that if earnings on investments of. moneys in the Reserve Account increase the amount thereof in excess of the Reserve Requirement, the earnings to the the extent of the excess may be transferred out of the Reserve Account and into the Debt Service Account and may be used as any other.moneys may be used in the 1984 Sewer Revenue Bond Fund. Section 24. The City covenants that it shall not take any action or suffer or permit any action to be taken or condition to exist which causes or may cause the interest payable on the Series 1984 Bonds to be subject to federal income taxation. without limiting the generality of the foregoing, the City covenants that the proceeds of the sale of the Series 1984 Bonds will not be used directly or indirectly in such manner as to cause the Series 1984 Bonds to be treated as ''arbitrage bonds" within the meaning of Section 103(c) of the Internal Revenue Code of 1954, as amended. -29- M M r M M Section 25. That in the event the office of Mayor, City Clerk, Finance Director, Manager of. the System, Board of Directors, or Sewer Committee shall be abolished, or any two or more of such offices shall be merged or consolidated, or in the event the duties of a particular office shall be transferred to another office or officer, or in the event of a vacancy in any such office by reason 'of death, resignation, removal from office, or otherwise, or in the event any such officer shall become incapable of performing the. duties of his office by reason of sickness, absence from the.City, or otherwise, all powers conferred and all obligations" and duties imposed upon such office or officer shall be performed by the office or officer succeeding to the principal function thereof, or by the office or officer upon whom such powers, obligations, and duties shall be imposed by law. Section 26. That the provisions of this ordinance shall constitute a binding contract between. the City and the registered owners of the Series 1984 Bonds issued hereunder, and the City will at all times strictly adhere to the terms and provisions hereof and fully discharge all of its obligations hereunder. Subject to the terms and provisions contained in this section and not otherwise, the registered owners of not less than seventy -five percent (75 %) in aggregate principal amount of the Series 1984 Bonds then outstanding shall have the right, from time to time, anything contained in this Ordinance to the contrary notwithstanding, to consent to and approve the adoption by the City of such ordinance or . ordinances supplemental hereto as shall be necessary or desirable for the purpose of modifying, altering, amending, adding to, or resinding, in any particular, any of the terms or provisions contained in this ordinance or in any supplemental ordinance or ordinances; provided, however, that nothing herein contained shall permit or be construed as permitting (a) an extension of the maturity of the principal of, or premium, if any, or the interest on, any Series 1984 Bond, or (b) a reduction in the principal amount of any Series 1984 Bond or the rate of interest thereon, or (c) the creation of a lien upon or a pledge of revenues other than the lien and pledge created by this Ordinance, or (d) a privilege of priority of any Series 1.984 Bond or Bonds over any other Series 1984 Bond. or Bonds, or (e) a reduction in the aggregate principal amount of the Series 1984 Bonds required for consent to such supplemental ordinance or ordinances. Section 27. That this Ordinance shall not create any right of any kind and no right of any kind shall arise hereunder or pursuant hereto until the Series 1984 Bonds authorized by this Ordinance shall be issued and delivered. -30- 75 Section 28. • That the provisions of this Ordinance are 7 6 hereby declared to•.be separable and if any provision shall for any reason be held illegal or invalid, such holding shall not affect the validity of the remainder of.this Ordinance.. Section 29. That all ordinances and parts of ordinances in conflict herewith are hereby repealed to the extent of such conflict. Section 30. That it is hereby ascertained and declared that the Improvements must be accomplished as soon as possible .in order to alleviate immediate hazards to the health, safety, and welfare of the City, its inhabitants, and their property, and that the Improvements can be accomplished only by the issuance of the Series 1984 Bonds. 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 enforced from and after its passage. PASSED: September 12, 1984 .ATTEST: City Cle (S E A L) RLF083184 -31-