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HomeMy WebLinkAbout200181 2 ORDINANCE NO. 20,018 3 AN ORDINANCE AUTHORIZING THE ISSUANCE OF A PROMISSORY 4 NOTE TO PROVIDE SHORT -TERM FINANCING UNDER AMENDMENT 5 NO. 78 TO THE ARKANSAS CONSTITUTION FOR THE ACQUISITION, 6 CONSTRUCTION, AND INSTALLATION OF REAL AND TANGIBLE 7 PERSONAL PROPERTY; PROVIDING FOR THE PAYMENT OF THE 8 PRINCIPAL OF AND INTEREST ON THE NOTE; PRESCRIBING OTHER 9 MATTERS PERTAINING THERETO; AND DECLARING AN 10 EMERGENCY. 11 12 WHEREAS, the City of Little Rock, Arkansas (the "City ") is authorized and 13 empowered under the provisions of Amendment No. 78 to the Arkansas Constitution 14 ( "Amendment No. 78 ") and Act No. 1808 of 2001 (codified as Title 14, Chapter 78 of the 15 Arkansas Code of 1987 Annotated) (the "Act "), to issue promissory notes and to expend 16 the proceeds thereof to finance all or a portion of the cost of acquiring, constructing, and 17 installing real property or tangible personal property having an expected useful life of 18 more than one year; and 19 WHEREAS, the City proposes to acquire vehicles, acquire land, and acquire, 20 construct, and install facilities, technology, and equipment for the City (collectively, the 21 "Property "); and 22 WHEREAS, it is proposed that the City issue its promissory note in the principal 23 amount of $4,991,500 (the "Note ") under Amendment No. 78 and the Act for the purpose 24 of financing all or a portion of the costs of the acquisition, construction, and installation of 25 the Property and for paying the costs of issuance of the Note; and [Page 1 of 5] Ordinance Authorizing s4,991,500 Short -term Financing for 2008 1 WHEREAS, the City intends to arrange for a loan (the "Loan ") from a financial 2 institution (the "Lender ") and to issue the Note to the Lender at a price of par in 3 consideration for the Loan; and 4 WHEREAS, it is desirable to comply with the provisions of U.S. Treasury Regulation 5 § 1.150 -2 in order to permit reimbursement to the City from proceeds of the Note of certain 6 expenditures which may be incurred prior to the issuance of the Note; 7 NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF DIRECTORS OF 8 THE CITY OF LITTLE ROCK, ARKANSAS, THAT: 9 Section 1. The Board of Directors hereby finds that the Property is real property or 10 tangible personal property having a useful life of more than one year. The Board of 11 Directors further finds that the sum of the principal amount of the Note and the aggregate 12 outstanding principal amount of the City's Promissory Notes dated September 8, 2004, 13 March 31, 2005, April 25, 2006, May 1, 2007, and July 19, 2007 does not exceed five percent 14 of the assessed value of taxable property located within the City as determined by the last 15 tax assessment completed before the issuance of the Note. 16 Section 2. Under the authority of the Constitution and laws of the State of Arkansas, 17 including particularly Amendment No. 78 and the Act, the Note is hereby authorized and 18 ordered issued in the principal amount of $4,991,500 for the purpose of financing all or a 19 portion of the costs of acquiring, constructing, and installing the Property and paying 20 expenses of issuing the Note. The Note shall be dated the date of its issuance and shall bear 21 interest on the outstanding principal amount at a fixed rate not to exceed 7.5% per annum 22 (calculated on the basis of the actual number of days elapsed in a year of 365 days (366 days 23 in a leap year)). The Note shall be repaid in five substantially equal annual amortized 24 installments of principal and interest, commencing one year from the date of the Note and 25 continuing on the same day of each year thereafter, with the final installment due five years 26 from the date of the Note. The Note shall be issued in fully registered form. [Page 2 of 5] 1 Section 3. The Note shall be issued to the Lender in consideration for the Loan. The 2 Lender shall be selected by the City Manager based upon the commitment or proposal for 3 the Loan that the City Manager determines to have the lowest cost to the City. The City 4 Treasurer is hereby authorized and directed to solicit proposals or commitments for the 5 Loan from at least three financial institutions having offices in Pulaski County or having 6 requested to be solicited, in the manner approved by the City Manager. The City Manager 7 shall have the right to reject any and all proposals and commitments. 8 Section 4. As provided in Amendment No. 78, the annual debt service payments on 9 the Note in each fiscal year shall be charged against and paid from the general revenues of 10 the City for that fiscal year. For the purpose of making the annual debt service payments, 11 there is hereby, and shall be, appropriated to pay the Note, an amount of general revenues 12 of the City sufficient for that purpose. The City Treasurer is hereby authorized and directed 13 to withdraw from the General Fund of the City the amounts and at the times necessary to 14 make the annual debt service payments on the Note. 15 Section 5. The City covenants with the owner of the Note as follows: 16 (a) The City shall not take any action or suffer or permit any action to be taken or 17 condition to exist which causes or may cause the interest payable on the Note to be 18 included in gross income for federal income tax purposes. Without limiting the generality 19 of the foregoing, the City covenants that the proceeds of the sale of the Note will not be 20 used directly or indirectly in a manner as to cause the Note to be treated as an "arbitrage 21 bond" within the meaning of section 148 of the Internal Revenue Code of 1986, as amended 22 (the "Code "). 23 (b) The City will not use or permit the use of the Property acquired, constructed, or 24 installed with the proceeds of the Note in a manner as to cause the Note to be a "private 25 activity bond" within the meaning of section 141 of the Code. 26 (c) None of the gross proceeds of the Note will be used (directly or indirectly) either 27 to make or finance loans to persons other than state or local governmental units or in any [Page 3 of 5] 1 trade or business carried on by any person other than a state or local governmental unit or 2 other than as a member of the general public. 3 (d) The City will take no action which would cause the Note to be "federally 4 guaranteed" within the meaning of the Code. 5 (e) The City will not reimburse itself from proceeds of the Note for any costs paid 6 prior to the date the Note is issued except in compliance with United States Treasury 7 Regulation § 1.150 -2. The City hereby declares its official intent pursuant to the Regulation 8 to reimburse itself for original expenditures made in planning, designing, acquiring, 9 constructing, installing, and equipping the Property, generally consisting of vehicles for the 10 police and fire departments, facilities and land for the mid -town police center, building 11 repairs, fire station, and Granite Mountain land purchase, and technology and equipment 12 for information technology and disaster recovery, between the date that is 60 days prior to 13 the date of adoption of this Ordinance and the date the Note is issued, plus a de minimis 14 amount and preliminary expenditures, with proceeds of the Note. 15 (f) The City will submit to the Secretary of the Treasury of the United States, not 16 later than the 15th day of the second calendar month after the close of the calendar quarter 17 in which the Note is issued, a statement concerning the Note which contains the 18 information required by section 149(e) of the Code. 19 Section 6. The City shall provide financial information to the Lender as the Lender 20 may reasonably request. 21 Section 7. The Mayor, City Clerk, City Manager, and City Treasurer, for and on 22 behalf of the City, are hereby authorized and directed to do any and all things necessary to 23 effect the issuance, execution, and delivery of the Note and the performance of all acts of 24 whatever nature necessary to effect and carry out the authority conferred by this 25 Ordinance. The Mayor, City Clerk, City Manager, and City Treasurer are hereby further 26 authorized and directed, for and on behalf of the City, to execute all papers, documents, [Page 4 of 5] 1 certificates, and other instruments that may be required for the carrying out or evidencing 2 the exercise of this authority. 3 Section 8. Severability. In the event any title, section, paragraph, item, sentence, 4 clause, phrase, or word of this ordinance is declared or adjudged to be invalid or 5 unconstitutional, such declaration or adjudication shall not affect the remaining portions of 6 this ordinance, which shall remain in full force and effect as if the portion so declared or 7 adjudged invalid or unconstitutional was not originally a part of this ordinance. 8 Section 9. Repealer. All ordinances or resolutions of the City in conflict herewith are 9 hereby repealed to the extent of such conflict. 10 Section 10. Emergency. The Board of Directors hereby determines that the Property 11 must be acquired, constructed, and installed as soon as possible in order to alleviate 12 immediate hazards to the health, safety, and welfare of the City, its inhabitants, and their 13 property, and that the Property can be acquired, constructed, and installed only by the 14 issuance of the Note. It is, therefore, declared that an emergency exists and this Ordinance, 15 being necessary for the immediate preservation of the public peace, health, and safety, shall 16 take effect and be enforced from and after its passage. 17 PASSED: August 19, 2008 18 ATTEST: APP D: 20 Nanc Wood, Clerk Mark Stodola, Mayor 21 APP OVED AS TO LEGAL FORM: 22 �� U. 23 Thomas M. Carpenter, City Attorney 24 // 25 26 // 27 [Page 5 of 5]