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HomeMy WebLinkAbout18616• ORDINANCE NO. 18, 616 AN ORDINANCE AUTHORIZING THE ISSUANCE OF A PROMISSORY NOTE TO PROVIDE SHORT -TERM FINANCING UNDER AMENDMENT NO. 78 TO THE ARKANSAS CONSTITUTION FOR CAPITAL EQUIPMENT AND VEHICLES; AND PRESCRIBING OTHER MATTERS PERTAINING THERETO. WHEREAS, the City of Little Rock, Arkansas (the "City ") is authorized and empowered under the provisions of Amendment No. 78 to the Arkansas Constitution ( "Amendment No. 78 ") and Act No. 1808 of 2001 ( "Act No. 1808 "), to issue notes and to expend the proceeds thereof to finance all or a portion of the cost of acquiring and constructing real property or tangible personal property having an expected useful life of more than one (1) year; and WHEREAS, the City has acquired, pursuant to Resolution No. 11,144 of the City, adopted October 16, 2001, or proposes to acquire capital equipment and vehicles, including particularly, without limitation, the vehicles and equipment described on Exhibit A attached hereto (the "Equipment "); and WHEREAS, it is proposed that the City issue its promissory note in the principal amount of not to exceed $1,270,000 (the "Note ") under Amendment No. 78 and Act No. 1808 for the purpose of financing all or a portion of the costs of the acquisition of the Equipment; and WHEREAS, the City intends to arrange for a loan (the "Loan") from a banking institution (the "Lender ") and to issue the Note to the Lender in consideration for the Loan; NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF DIRECTORS OF THE CITY OF LITTLE ROCK, ARKANSAS: Section 1. The Board of Directors hereby finds that the Equipment will have a useful life of more than one (1) year, that the City has not heretofore incurred any obligations under Amendment No. 78 and that the maximum principal amount of the Note does not exceed five percent (5 %) of the assessed value of taxable property located within the City as determined by the last tax assessment. Section 2. Under the authority of the Constitution and laws of the State of Arkansas (the "State "), including particularly Amendment No. 78 and Act No. 1808, the Note is hereby authorized and ordered issued for the purpose of financing all or a portion of the costs of acquiring the Equipment and paying expenses of issuing the Note. The Note shall be in the principal amount necessary to pay the costs of the Equipment and issuance costs, as determined by the Mayor, but not to exceed $1,270,000. The Note shall be dated the date of issuance and shall bear interest on the outstanding principal amount at a fixed rate not to exceed 8% per annum. The Note shall be repaid in five annual amortized installments of principal and interest, commencing on December 1, 2002 and on December 1 of each year thereafter, with the final installment due on December 1, 2006. Section 3. The A shall be issued to the Lender in consid'Sration for the Loan. The Lender shall be selected by the Mayor based upon the commitment or proposal for the Loan that the Mayor determines to have the lowest cost to the City. In the event that two or more proposals or commitments have the same cost, the Mayor shall determine which one has the most favorable terms and select that banking institution as the Lender. The City Treasurer is hereby authorized and directed to solicit proposals or commitments for the Loan from at least three banking institutions having offices in the City, in such manner as shall be approved by the Mayor. The Mayor shall have the right to reject any and all proposals and commitments. Section 4. As provided in Amendment No. 78, the annual debt service payments on the Note in each fiscal year shall be charged against and paid from the general revenues of the City for such fiscal year. For the purpose of making the annual debt service payments, there is hereby, and shall be, appropriated to pay the Note, an amount of general revenues of the City sufficient for such purposes. The City Treasurer is hereby authorized and directed to withdraw from the General Fund of the City the amounts and at the times necessary to make the annual debt service payments on the Note. Section 5. (a) The City covenants with the owner of the Note (the "Owner ") from time to time 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 Note to be included in gross income for federal income tax purposes. Without limiting the generality of the foregoing, the City covenants with the Owner that the proceeds of the sale of the Note will not be used directly or indirectly in such manner as to cause the Note to be treated as an "arbitrage bond" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code "). (b) The City covenants with the Owner that it will not use or permit the use of the Equipment or the proceeds of the Note, in such manner as to cause the Note to be a "private activity bond" within the meaning of Section 141 of the Code. In this regard, the City covenants with the Owner that (i) it will not use (directly or indirectly) the proceeds of the Note to make or finance loans to any person, and (ii) that while the Note is outstanding the Equipment will only be used by state and local governmental entities and by other persons on a basis as members of the general public. (c) The City covenants with the Owner that it will not reimburse itself from Note proceeds for any costs paid prior to the date the Note is issued except in compliance with United States Treasury Regulation No. 1.150 -2. This Ordinance shall constitute an "official intent" for purposes of the Regulation. (d) The City covenants with the Owner that it will submit to the Secretary of the Treasury of the United States, not later than the 15th day of the second calendar month after the close of the calendar quarter in which the Note is issued, a statement concerning the Note which contains the information required by Section 149(e) of the Code. Section 6. If required by the Lender, the Mayor is hereby authorized to execute and deliver a loan agreement containing such covenants and provisions, including particularly, without limitation, those pertaining to financial reporting, defaults, rights and remedies, as shall be approved by the Mayor. 0 • Section 7. The Mayor and City Clerk, for and on behalf of the City, are hereby authorized and directed to do any and all things necessary to effect the issuance, execution, and delivery of the Note, and the performance of all acts of whatever nature necessary to effect and carry out the authority conferred by this Ordinance. The Mayor and City Clerk are hereby further authorized and directed, for and on behalf of the City, to execute all papers, documents, certificates and other instruments that may be required for the carrying out of such authority or to evidence the exercise thereof. Section 8. The provisions of this Ordinance are hereby declared to be separable, and if any section, phrase or provision shall for any reason be declared to be invalid, such declaration shall not affect the validity of the remainder of the sections, phrases and provisions. Section 9. All ordinances, resolutions and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. PASSED: December 18, 2001 ATTEST: NA CY WP 61), CITY CLERK APPROVED AS TO FORM: THOMAS M. CARPENTE CITY ATTORNEY APPROVED: b JI AILEY, MAYOR 0 CERTIFICATE 0 The undersigned, City Clerk of the City of Little Rock, Arkansas, hereby certifies that the foregoing pages are a true and perfect copy of Ordinance No. i9l )b , adopted at a regular session of the Board of Directors of the City of Little Rock, Arkansas, held at the regular meeting place of the City at _&_ o'clock p.m., on the I g day of December, 2001, and that the Ordinance is of record in Ordinance Record Book No. _, at page _, now in my possession. GIVEN under my hand and seal on this i q i k day of December, 2001. (SEAL) G`.�Y GITy r- -OF -x 0 EXHIBIT A • List of Vehicles/Equipment to be Financed 25 ton tandem gooseneck trailer Slope mower Emergency standby power system Vehicle lights, strobes, etc. Three motorcycles 41' Telescope Aerial Truck Radios Billiard Tables (2) Bleachers Automatic Vehicle Locator system equipment Computers Cisco Switch equipment Fiber optic cable installation HP Printers (10) Network Equipment Server Pumper trucks (2) Two Suburban Carryall's 58' Tree Trimming Truck