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HomeMy WebLinkAbout187340 ORDINANCE NO. 181734 • AN ORDINANCE AUTHORIZING THE ISSUANCE OF A PROMISSORY NOTE TO PROVIDE SHORT -TERM FINANCING UNDER AMENDMENT NO. 78 TO THE ARKANSAS CONSTITUTION FOR THE ACQUISITION, CONSTRUCTION AND INSTALLATION OF REAL AND TANGIBLE PERSONAL PROPERTY; 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. 7811) and Act No. 1808 of 2001 (codified as Title 14, Chapter 78 of the Arkansas Code of 1987 Annotated) (the "Act "), to issue notes and to expend the proceeds thereof to finance all or a portion of the cost of acquiring, constructing and installing real property or tangible personal property having an expected useful life of more than one (1) year; and WHEREAS, pursuant to Resolution No. 11,227, adopted February 5, 2002, the City has acquired and installed vehicles and equipment and plans on acquiring and installing additional vehicles and equipment in fiscal year 2002; and WHEREAS, the City proposes to construct properties for the park and street departments and for the animal shelter; and WHEREAS, such properties heretofore described in the WHEREAS clauses of this Ordinance are hereinafter referred to collectively as the "Property;" and WHEREAS, it is proposed that the City issue its promissory note in the principal amount of $ (the "Note ") under Amendment No. 78 and the Act for the purpose of financing all or a portion of the costs of the acquisition, construction and installation of the Property; 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: 0 0 Section 1. The Board of Directors hereby finds that the Property is tangible personal property or real property and will have a useful life of more than one (1) year. The Board of Directors further find that the aggregate principal amount of the Note and the City's Promissory Note, dated February 11, 2002, does not exceed five percent (5°s) 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 the Act, the Note is hereby authorized and ordered issued in the principal amount of $ for the purpose of financing all or a portion of the costs of acquiring, constructing and installing the Property and paying expenses of issuing the Note. 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 6% per annum. The Note shall be repaid in five annual amortized installments of principal and interest, commencing one year from the date of the Note and on the same day of each year thereafter, with the final installment due five years from the date of the Note. Section 3. The Note shall be issued to the Lender in consideration 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. 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 S. (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 Property 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 Property 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. The City shall provide such financial information to the Lender as the Lender may reasonably request. 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: AUGUST 20 ATTEST: 11 //� � (SEAL) APPR LVED AS TO FORM: City Attorney 0% UTrk '- ®� . '- ;� 1.0 Ea : R -- . • Co 2002. APPROVED: Mayor CERTIFICATE 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. , 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 day of , 2002, 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 day of 2002. City Clerk (SEAL)