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ORD NO 37-1981 ORDINANCE NO. 2/if/ AN ORDINANCE AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION STREET IMPROVEMENT BONDS FOR THE PURPOSE OF IMPROVING STREETS WITHIN THE CITY OF VAN BUREN, ARKANSAS; LEVYING A TAX SUFFICIENT TO PAY THE PRINCIPAL OF AND INTEREST ON THE BONDS.; PRESCRIBING OTHER MATTERS RELATING THERETO; AND DECLARING AN EMERGENCY. WHEREAS, the City of Van Buren, Arkansas is a city of the first class (the "City and WHEREAS, by Ordinance No. 29 -1979, duly passed by the Citi Council of the City, and approved on the 20th day of August, 19, there was submitted to the qualified electors of the City the question of issuing, under Amendment No. 13 to the Constitu- tion of the State of Arkansas, General Obligation Street Improve- ment Bonds in the principal amount of $850,000 (the "bonds for the purpose of financing the cost of overlaying, sealing and generally improving streets within the corporate limits of the City (the "construction paying necessary expenses incidental thereto and paying the expenses of issuing the bonds; and WHEREAS, at the special election held October 9, 1979, a majority of the electors voting on the question approved the issuance of the bonds; NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Van Buren, Arkansas: Section 1. That the construction be accomplished. Section 2. That under the authority of the Constitu- tion and laws of the State of Arkansas, including particularly Amendment No. 13 to the Constitution of the State of Arkansas, City of Van Buren, Arkansas General Obligation Street Improvement Bonds are hereby authorized and ordered issued in the total principal amount of $850,000, the proceeds of the sale of which are necessary to provide sufficient funds for accomplishing the construction. The bonds shall be dated January 1, 1980, will bear interest at. the rate of 5% per annum, interest thereon will be payable on January 1, 1982 and on each January 1 thereafter, and the bonds will mature on January 1 in each of the years as follows (but shall be subject to redemption prior to maturity as hereinafter set forth): 15 YEAR AMOUNT 1983 $15,000 1984 15,000 1985 20,000 1986 15,000 1987 20,000 1988 20,000 1989 20,000 1990 25,000 1991 25,000 1992 25,000 1993 30,000 1994 25,000 1995 35,000 1996 30,000 1997 35,000 1998 40,000 1999 40,000 2000 40,000 2001 45,000 2002 45,000 2003 50,000 2004 55,000 2005 55,000 2006 60,000 2007 65,000 The bonds shall be numbered from R -1 upward in order of maturity and shall be delivered from time to time in numerical order as moneys are needed for the construction. There may be one or more bonds maturing in each year and the bonds shall be in such denominations as may be determined by the Mayor. The bonds will be issued as typewritten bonds, registered as to both principal and interest, payable to the registered owner, or assigns, as set forth hereinafter in the bond form. Payment of interest shall be by check or draft mailed to the registered owner thereof, without presentation or surrender of the bonds and such payments shall discharge the obligation of the City to the extent thereof. The City Clerk shall keep a payment record and make proper notations thereon of all payments of interest. Payment of principal shall be made upon surrender of the bonds to the City Clerk. Payment of principal and interest shall be in any coin or currency of the United States of America which, on the respective dates of payment, is legal tender for the payment of -2- public and private debts. When the principal of and interest on any bond have been fully paid, the bond shall be cancelled. The bonds shall be sold at public sale after advertise- ment in such publications as the Mayor shall determine will insure adequate notice and opportunity for bidding. The terms of the sale of the bonds and designation of the Trustee and Paying Agent (if necessary) shall be submitted to the City Council for approval by resolution. Notice of Sale for the bonds shall be in substantially the following form: -3- NOTICE OF SALE CITY OF VAN BUREN, ARKANSAS 5 %,GENERAL OBLIGATION STREET IMPROVEMENT BONDS DATED JANUARY 1, 1980 Notice is hereby given that the City of Van Buren, Arkansas (the "City will offer for sale on sealed bids its proposed issue of $850,000 City of Van Buren, Arkansas General Obligation Street Improvement Bonds, dated January 1, 1980 (the "Bonds The Bonds are being issued for the purpose of financing the cost of overlaying, sealing and generally improving streets within the corporate limits of the City, at an estimated cost of $850,000. The Bonds will bear interest at the rate of 5% per annum. The Bonds are being issued under the provisions of and pursuant to the authority contained in Amendment No. 13 to the Constitution of the State of Arkansas. The Bonds will be general obligations of the City secured by the full faith, credit and taxing power of the City under Amendment No. 13, including a continuing annual tax of five (5) mills on the dollar of the assessed valuation of the taxable real and personal property in the City, which will be pledged to the payment of the principal of and interest on the Bonds. The assessed valuation of the taxable real and personal property in the City for the year 1980, the latest assessment of record, is $22,082,975. The issuance of the Bonds has been approved by the electors of the City at an election held for that purpose on October 9, 1979. The Bonds will be dated January 1, 1980, but will not bear interest prior to the date of their delivery. Interest will be payable on January 1, 1982 and on each January 1 thereafter, and the Bonds will mature on January 1 in each of the years as follows (but shall be subject to redemption prior to maturity as hereinafter set forth): -4- YEAR AMOUNT 1983 $15,000 1984 15,000 1985 20,000 1986 15,000 1987 20,000 1988 20,000 1989 20,000 1990 25,000 1991 25,000 1992 25,000 1993 30,000 1994 25,000 1995 35,000 1996 30,000 1997 35,000 1998 40,000 1999 40,000 2000 40,000 2001 45,000 2002 45,000 2003 50,000 2004 55,000 2005 55,000 2006 60,000 2007 65,000 Supplemental and dual coupons will not be permitted and the Bonds will not be subject to conversion. No bid of less than par will be entertained. The award, if made, will be to the bidder whose bid results in the lowest net interest cost to the City determined by computing the total interest cost from the date of the Bonds to maturity and deducting therefrom any premium bid. The Bonds will be callable for payment prior to maturity in inverse numerical order at a price of par and accrued interest as follows: From funds from any source on any interest payment date. The City will covenant that surplus tax collections, being collections from the 5 mill continuing annual tax in excess of the amount necessary to insure the prompt payment of the principal of, interest on and Trustee's and Paying Agent's fees in connection with the Bonds as the same become due, and to establish and maintain a debt service reserve in the amount of $68,200, must be used from time to time on each interest payment date as and to the extent available to redeem the outstanding Bonds. -5- The purchaser shall have the privilege of naming the Trustee and Paying Agent or the purchaser may specify that there shall be no Trustee or Paying Agent. The expenses of the issue, including, without limita- tion, the publication expense, printing of the Bonds, the authentication fee, and the fee of Friday, Eldredge Clark, Bond Counsel, Little Rock, Arkansas, will be paid by the City. The Bonds will be sold on sealed bids which will be received until o'clock .m., on the day of 1981. Each bid must be enclosed in a sealed envelope marked "Proposal for $850,000 City of Van Buren, Arkansas 5% General Obligation Street Improvement Bonds, dated January 1, 1980" and addressed to Mayor, City of Van Buren, Arkansas 72956. No contingent provisions may be included in any bid. The City reserves the right to reject any and all bids. Each bid, other than the bid of the United States of America, Farmers Home Administration, must be accompanied by a cashier's check in the amount of $17,000, issued by a bank that is a member of the Federal Deposit Insurance Corporation, payable to the City, to be kept as liquidated damages in the event the bidder is awarded the bonds and fails to complete the purchase. The Bonds will be issued and secured pursuant to the provisions of Ordinance No. of the City. For further information, address the undersigned or Friday, Eldredge Clark, The First National Building, Twentieth Floor, Little Rock, Arkansas 72201. GIVEN this day of 1981. CITY OF VAN BUREN, ARKANSAS By /s/ Robert E. (Gene) Bell Mayor INSTRUCTIONS: Publish this Notice once a week for three con- secutive weeks, with the first publication to be at least twenty (20) days prior to the sale date. Please send a copy of the first publication to Friday, Eldredge Clark, The First National Building, Twentieth Floor, Little Rock, Arkansas 72201, and furnish three proofs of publication after the Notice has been published the required three times. 0 -6- Section 3. That the bonds shall be executed on behalf of the City by the Mayor and City Clerk and shall have impressed thereon the seal of the City. Section 4. That the bonds shall be typewritten and in substantially the following form: 0 -7- C UNITED STATES OF AMERICA STATE OF ARKANSAS COUNTY OF CRAWFORD CITY OF VAN BUREN 5% GENERAL OBLIGATION STREET IMPROVEMENT BOND No R- KNOW ALL MEN BY THESE PRESENTS: That the City of Van Buren, Crawford County, Arkansas (the "City acknowledges itself to owe and for value received promises to pay to the registered owner, or assigns, the principal sum of DOLLARS in lawful money of the United States of America, on January 1, with interest thereon, at the rate of five percent (5 per annum from the interest commencement date hereof until paid. The principal and interest shall be payable in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of debts due the United States of America. Interest shall be payable on January 1, 1982 and annually thereafter on each January 1. This bond is one of an issue of City of Van Buren, Arkansas General Obligation Street Improvement Bonds, numbered from R -1 upward (the "bonds The bonds are issued for the purpose of financing the cost of overlaying, sealing and generally improving streets within the corporate limits of the City (the "construction Payments of interest due hereon shall be made, without presentation and surrender of this bond, directly to the registered owner at his address shown on the bond registration book of the City, maintained by the City Clerk as Bond Registrar, and such payments shall fully discharge the obligation of the City to the extent of the payments so made. Payment of principal of this bond shall be made upon presentation of this bond to the City Clerk. The bonds are issued pursuant to and in full compliance with the Constitution and laws of the State of Arkansas, parti- cularly Amendment No. 13 to the Constitution of the State of Arkansas, and pursuant to Ordinance No. of the City, passed and approved on the day of 1981 (the "Authorizing Ordinance and an election duly held at which the majority of the legal voters of the City voting on the question 0 voted in favor of the issuance of the bonds. Reference is hereby -8- made to the Authorizing Ordinance for the details of the nature and extent of the security and of the rights and obligations of the City and the registered owner of this bond. The bonds are general obligations of the City, payable from the proceeds of a continuing annual tax of five (5) mills on the dollar of the assessed valuation of the taxable real and personal property in the City (the "special tax levied by the City Council under the authority of Amendment No. 13 to the Constitution of the State of Arkansas, and the City hereby pledges its full faith, credit and taxing power, including the special tax, for the payment of the bonds. The City has covenanted and agreed that surplus tax collections, being collections from the special tax in excess of the amount necessary to insure the prompt payment of the principal of, and interest on the bonds as the same become due, and to establish and maintain a debt service reserve, must be used from time to time on each interest payment date as and to the extent available to redeem the outstanding bonds prior to maturity in inverse numerical order in increments of $1,000, at a redemption price equal to the principal amount being redeemed plus accrued interest to the redemption date. The bonds are also subject to redemption prior to maturity, in inverse numerical order, in whole or in part in increments of $1,000, at the option of the City, from funds from any other source on any interest payment date, at a redemption price equal to the principal amount being redeemed plus accrued interest to the redemption date. Notice of each call for redemption shall be given by first class mail to the registered owner of each bond being redeemed. The notice shall be mailed not less than 15 nor more than 60 days prior to the redemption date, and shall specify the bonds, or portions thereof, being redeemed, and the redemption date. Each bond or portion thereof called for redemption shall cease to bear interest on the redemption date, provided moneys for payment of the redemption price are available in the Bond Fund. The redemption price shall be paid upon surrender of the bond being redeemed, in whole or in part, to the City Clerk for cancellation or, in the case of a partial redemption, appropriate endorsement hereon. This bond may be assigned, and upon assignment the assignor shall promptly notify the City Clerk by registered mail, and the assignee shall surrender this bond to the City Clerk for transfer on the registration records. Every assignee shall take this bond subject to all payments of interest (as reflected by the Payment Record maintained by the City Clerk), prior to such surrender for transfer. -9- IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required to exist, happen and be performed, under the Constitution and laws of the State of Arkansas, particularly Amendment No. 13 to the Constitution of the State of Arkansas, precedent to and in the issuance of this bond have existed, have happened and have been performed in due time, form and manner as required by law; that the indebtedness repre- sented by this bond and the issue of which it forms a part does not exceed any constitutional or statutory limitation; and that a tax sufficient to pay the bonds and interest thereon has been duly levied in accordance with Amendment No. 13 to the Constitution of the State of Arkansas and made payable annually until all of the bonds and interest thereon have been fully paid and discharged. IN WITNESS WHEREOF, the City of Van Buren, Arkansas, has caused this bond to be executed in its name by its Mayor and City Clerk and its corporate seal to be affixed, on this day of 1981 (which shall be the interest commencement date for this bond), but as of the first day of January, 1980. CITY OF VAN BUREN, ARKANSAS ATTEST: By Mayor City Clerk (SEAL) -10- REGISTRATION CERTIFICATE Signature of Date of Registration: Name of Registered Owner: City Clerk RECORD OF PARTIAL REDEMPTION Principal Amount Principal Signature of Date of Redemption Redeemed Balance City Clerk -11- Section 5. That in order to pay the bonds as they mature, with interest thereon, there is hereby levied upon all taxable real and personal property within the City a continuing annual tax of five (5) mills (the "special tax on each dollar of assessed valution to be collected annually as long as may be necessary to pay the principal of, interest and Trustee's and Paying Agent's fees in connection with the bonds. The special tax will replace the five (5) mill tax presently being collected in connection with the City's General Obligation City Hall, Library, and Fire House Improvement Bonds, dated January 1, 1970, which bonds have been retired. The City Clerk is directed to transmit a copy of this Ordinance to the County Clerk of Crawford County, Arkansas, to the end that the special tax may be extended on the tax books of the County and collected annually along with the other taxes until the bonds and interest thereon are paid in full or until adequate provision is made for their payment. The City covenants and agrees that all of the revenues from the special tax shall be placed in a separate fund which is hereby created and designated "General Obligation Improvement Bond Fund" (the "Bond Fund in a bank or banks designated from time to time by the City Council of the City holding membership in the Federal Deposit Insurance Corporation, and used solely for the payment of the principal of and interest on the bonds. The amount of the deposit in excess of that insured by the Federal Deposit Insurance Corporation must be continuously secured by bonds or other direct or fully guaranteed obligations of the United. States of America, except that moneys invested as hereinafter provided need not be so secured. Moneys in the Bond Fund may be invested in direct obligations of, or obligations the principal of and interest on which are guaranteed by, the United States of America, which mature or are subject to redemption at the option of the holder at or prior to the date the moneys will be needed to meet debt service requirements on the bonds (or within ten (10) years in the case of the Debt Service Reserve). All such investments shall be considered a part of the Bond Fund (or Debt Service Reserve) from which made (valued at the lower of cost or market) and all earnings and profits credited to, and all losses charged against, such fund. The City covenants that "surplus tax collections," being all revenues derived from the special tax in each year that are in excess of the amount necessary to insure the prompt payment of the principal of and interest on the bonds as they mature, will be applied as follows: (a) the first $6,820 shall be deposited in the "Debt Service Reserve," hereby created as an account within the Bond Fund, until the Debt Service Reserve has been established and remains in the amount of $68,200; (b) the balance shall be be used from time to time on January 1 of each year as and to the extent available for the redemption of bonds prior to maturity. Moneys in the Debt Service Reserve shall be used to pay principal of and interest on the bonds at maturity to the extent -12- to other moneys in the Bond Fund are not sufficient therefor. When the moneys in the Bond Fund, including the Debt Service Reserve, are sufficient to pay and redeem all outstanding bonds the collection of the special tax shall cease, no more deposits shall be made into the Bond Fund, and all outstanding bonds shall be retired on the next interest payment date. Section 6. That for the prompt payment of the bonds, with interest, the City hereby pledges its full faith, credit and taxing power, including the special tax levied in Section 5 of this Ordinance. Section 7. That in order to pay the principal of and interest on the bonds as they mature and as they are redeemed prior to maturity, there are hereby appropriated the entire proceeds of the special tax levied in Section 5 hereof, and if the proceeds be not sufficient to pay the principal of and interest on the bonds as they mature, then there are hereby appropriated sufficient additional funds out of the general revenues of the City to accomplish the payment at maturity. Section 8. That the bonds shall be callable for payment prior to maturity in accordance with the terms set out in the face of the bond form in Section 4 of this Ordinance. Section 9. That the Treasurer of the City is hereby ordered and directed to pay to the registered owner (from time to time) of each bond issued hereunder, an amount sufficient to pay, as due, all installments of interest and the principal of the bonds. Such payments are to be made from the funds herein appropriated. This instruction to the Treasurer is irrevocable and may be enforced by mandamus. Section 10. (a) If there be any default in the payment of the principal of and interest on the bonds, or if the City defaults in any Bond Fund requirement or in the performance of any other covenant contained in this Ordinance, the registered owner of any bond may, by proper suit compel the performance of the duties of the officials of the City under the Constitution and laws of the State of Arkansas and under this Ordinance. The registered owners of a majority in principal amount of outstanding bonds may, upon any such default, protect and enforce the rights of the registered owners by acceleration, instituting appropriate proceedings in law or equity or other action deemed necessary or desirable by such registered owners. (b) It is understood and intended that the registered owners of the bonds hereby secured shall have no right in any manner whatever by their action to affect, disturb or prejudice the security of this Ordinance, or to enforce any right hereunder -13- 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 that any individual rights of action or other right given by law are restricted by this Ordinance to the rights and remedies herein provided. (c) No remedy herein conferred upon or reserved to the registered owners is intended to be exclusive of any other remedy or remedies herein provided, and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or given by any law or by the Constitution of the State of Arkansas. (d) No delay or omission of the registered owners to exercise any right or power accrued upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein, and every power and remedy given by this Ordinance to the registered owners may be exercised from time to time and as often as may be deemed expedient. (e) The registered owners of a majority in principal amount of the outstanding bonds may 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 or impair any rights or remedies consequent thereon. Section 11. (a) That the bonds herein authorized to be executed shall be executed by the Mayor and City Clerk and the seal of the City impressed as herein provided, and shall be delivered to the purchaser from time to time as funds are needed upon payment in cash of the purchase price. The aggregate of the purchase price for all bonds is hereinafter referred to as "total sale proceeds." The City will deposit the sum of $68,200 in the Debt Service Reserve in the Bond Fund. (b) The balance of the total sale proceeds shall be deposited in a special account of the City hereby created and designated the "Construction Fund" in a bank that is a member of the Federal Deposit Insurance Corporation. The moneys in the Construction Fund shall be used for accomplishing the construction, paying expenses incidental thereto and paying the expenses of issuing the bonds, with any unexpended balance to be deposited in the Bond Fund. Disbursements from the Construction Fund shall be on the basis of checks or requisitions signed by the Treasurer of the City. -14- (c) Moneys on deposit in the Construction Fund in excess of the amount insured by the Federal Deposit Insurance Corporation must be continuously secured by bonds or other direct or fully guaranteed obligations of the United States of America; provided, however, moneys in the Construction Fund that are invested as hereinafter provided need not be so secured. Moneys in the Construction Fund may be invested in direct obligations of, or obligations the principal of and interest on which are guaranteed by, the United States of America, having maturity dates, or subject to redemption at the option of the holder, not later than the date or dates on which the moneys will be needed for accomplishing the construction. Section 12. (a) That the terms of this Ordinance shall constitute a contract between the City and the holders and registered owners of the bonds and no variation or change in the undertaking herein set forth shall be made while any of these bonds are outstanding, except as hereinafter set forth in subsection (b), and the holder or registered owner of any bonds may at any time for and on his own behalf or for and on behalf of all bondholders enforce the obligations of the City by a proper suit for that purpose. (b) Subject to the terms and provisions contained in this Section and not otherwise, the registered owners of sixty -six and two- thirds percent (66 -2/3 in principal amount of the 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 supplemental hereto as shall be necessary or desirable for the purpose of modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Ordinance or in any supplemental ordinance; provided, however, that nothing herein contained shall permit or be construed as permitting (a) an extension of the maturity of the principal of or the interest on any bond issued hereunder, or (b) a reduction in the principal amount of any bond or the rate of interest thereon or (c) the creation of a pledge of special tax revenues other than the pledge created by this Ordinance or (d) a reduction in the percentage of registered owners required to approve a supplemental ordinance. Section 13. 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 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 bonds will not.be used directly or indirectly in such manner as to cause the bonds to be treated as "arbitrage bonds" within the meaning of Section 103(c) of the Internal Revenue Code of 1954, as amended. -15- Section 14. That the provisions of this Ordinance are separable and in the event that any section or part thereof shall be held to be invalid, such invalidity shall not affect the remainder of this Ordinance. Section 15. That all ordinances and resolutions and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. Section 16. That this Ordinance shall not create any right of any character and no right of any character shall arise under or pursuant to it until one or more of the bonds authorized by this Ordinance shall be issued and delivered. Section 17. That it is hereby ascertained and declared that the above described construction to be financed out of the proceeds of the bonds authorized hereby is immediately needed for the preservation of the public peace, health and safety and to remove existing hazards thereto. The construction cannot be accomplished without the issuance of these bonds, and therefore, it is declared that an emergency exists and this Ordinance being necessary for the preservation of the public peace, health and safety shall be in force and take effect immediately upon and after its passage. PASSED: 1981. APPROV ATT Plat El City Clerk (SEAL) 411' -16-