ORD NO 20-2005 BLACKLINED 8/12/05
ORDINANCE NO.
AN ORDINANCE AUTHORIZING THE ISSUANCE OF SALES AND
USE TAX BONDS FOR THE PURPOSE OF FINANCING THE COST
OF CAPITAL IMPROVEMENTS; PLEDGING A 0.5% SALES AND
USE TAX TO PAY THE PRINCIPAL OF AND INTEREST ON THE
BONDS; PRESCRIBING OTHER MATTERS RELATING THERETO;
AND DECLARING AN EMERGENCY.
WHEREAS, there was submitted to the qualified electors of
the City of Van Buren, Arkansas (the "City the question of
issuing, under Amendment No. 62 to the Constitution of the State of
Arkansas (the "State and under Title 14, Chapter 164, Subchapter
3 of the Arkansas Code of 1987 Annotated (the "Authorizing
Legislation capital improvement bonds in the maximum principal
amount of $1,700,000 for the purpose of financing all or a portion
of the costs of library facilities, including particularly, without
limitation, acquiring, constructing, equipping and furnishing
library facilities, and any land acquisition and parking, street,
drainage and utility improvements related thereto or in support
thereof (the "Improvements and
WHEREAS, at the special election held July 12, 2005, a
majority of the electors voting on the question approved the
issuance of such bonds; and
WHEREAS, the City Council has determined to proceed with
accomplishing the Improvements and to issue $1,700,000 in aggregate
principal of capital improvement bonds designated as the "City of
Van Buren, Arkansas Sales and Use Tax Bonds, Series 2005 (the
"bonds and
WHEREAS, the City has made arrangements for the sale of
the bonds to Morgan Keegan Company, Inc. (the "Purchaser at a
price of "98.65% of par plus accrued interest (the "Purchase
Price pursuant to a Bond Purchase Agreement between the
Purchaser and the City (the "Purchase Agreement which has been
presented to and is before this meeting; and
WHEREAS, the Preliminary Official Statement, dated August
9, 2005, offering the bonds for sale (the "Preliminary Official
Statement has been presented to and is before this meeting; and
WHEREAS, the Limited Continuing Disclosure Agreement
between the City and "Bank of the Ozarks, "Little Rock, Arkansas
(the "Disclosure Agreement providing for the disclosure
obligations of the City with respect to the bonds, has been
presented to and is before this meeting;
NOW, THEREFORE, BE IT ORDAINED by the City Council of the
City of Van Buren, Arkansas:
Section 1. The Improvements shall be accomplished, and
the Mayor and City Clerk are hereby authorized to take all action
necessary in connection therewith and to execute all required
contracts and documents.
Section 2. The offer of the Purchaser for the purchase
of the bonds from the City at the Purchase Price, for bonds bearing
interest at the rates per annum, maturing and otherwise subject to
the terms and provisions hereafter in this Ordinance set forth in
detail be, and is hereby accepted and the Purchase Agreement, in
substantially the form submitted to this meeting, is approved and
the bonds are hereby sold to the Purchaser. The Mayor is hereby
authorized and directed to execute and deliver the Purchase
Agreement on behalf of the City and to take all action required on
the part of the City to fulfill its obligations under the Purchase
Agreement.
Section 3. The Preliminary Official Statement is hereby
approved and the previous use of the Preliminary Official Statement
by the Purchaser in connection with the sale of the bonds is hereby
in all respects approved and confirmed, and the Mayor be and he is
hereby authorized and directed, for and on behalf of the City, to
execute the Preliminary Official Statement and the final Official
Statement in the name of the City for use in connection with the
sale of the bonds as set forth in the Purchase Agreement.
Section 4. The Disclosure Agreement, in substantially
the form submitted to this meeting, is approved, and the Mayor is
hereby authorized and directed to execute and deliver the
Disclosure Agreement for and on behalf of the City. The Mayor is
authorized and directed to take all action required on the part of
the City to fulfill the City's obligations under the Disclosure
Agreement.
Section 5. Under the authority of the Constitution and
laws of the State, including particularly Amendment No. 62 to the
Constitution of the State and the Authorizing Legislation, the
bonds are hereby authorized and ordered issued in the total
principal amount of $1,700,000, the proceeds of the sale of which
are necessary to provide sufficient funds, along with other
available moneys, for accomplishing the Improvements, paying
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expenses incidental thereto and paying expenses of issuing the
bonds.
The bonds shall bear interest at the rates and shall
mature on September 1 in the amounts and in the years as follows:
Year
(September 1) Amount Interest Rate
2006 A $760,000 3.00%
2007 940,000 A 3.05
The bonds shall be issuable only as fully registered
bonds without coupons in the denomination of $5,000 or any integral
multiple thereof. Unless the City shall otherwise direct, the
bonds shall be numbered from 1 upward in order of issuance. Each
bond shall have a CUSIP number but the failure of a CUSIP number to
appear on any bond shall not affect its validity.
The bonds shall be registered initially in the name of
Cede Co., as nominee for the Depository Trust Company "DTC
which shall be considered to be the registered owner of the bonds
for all purposes under this Ordinance, including, without
limitation, payment by the City of principal of, redemption price,
premium, if any, and interest on the bonds, and receipt of notices
and exercise of rights of registered owners. There shall be one
certificated, typewritten bond for each stated maturity date which
shall be immobilized in the custody of DTC with the beneficial
owners having no right to receive the bonds in the form of physical
securities or certificates. DTC and its participants shall be
responsible for maintenance of records of the ownership of
beneficial interests in the bonds by book -entry on the system
maintained and operated by DTC and its participants, and transfers
of ownership of beneficial interests shall be made only by DTC and
its participants, by book entry, the City having no responsibility
therefor. DTC is expected to maintain records of the positions of
participants in the bonds, and the participants and persons acting
through participants are expected to maintain records of the
purchasers of beneficial interests in the bonds. The bonds as such
shall not be transferable or exchangeable, except for transfer to
another securities depository or to another nominee of a securities
depository, without further action by the City.
If any securities depository determines not to continue
to act as a securities depository for the bonds for use in a book
entry system, the City may establish a securities depository/ book
entry system relationship with another securities depository. If
the City does not or is unable to do so, or upon request of the
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beneficial owners of all outstanding bonds, the City and the
Trustee, after the Trustee has made provision for notification of
the beneficial owners by the then securities depository, shall
permit withdrawal of the bonds from the securities depository, and
authenticate and deliver bond certificates in fully registered form
(in denominations of $5,000 or integral multiples thereof) to the
assigns of the securities depository or its nominee, all at the
cost and expense (including costs of printing definitive bonds) of
the City, if the City fails to maintain a securities
depository /book -entry system, or of the beneficial owners, if they
request termination of the system.
Prior to issuance of the bonds, the City shall have
executed and delivered to DTC a written agreement (the
"Representation Letter setting forth (or incorporating therein by
reference) certain undertakings and responsibilities of the City
with respect to the bonds so long as the bonds or a portion thereof
are registered in the name of Cede Co. (or a substitute nominee)
and held by DTC. Notwithstanding such execution and delivery of
the Representation Letter, the terms thereof shall not in any way
limit the provisions of this Section or in any other way impose
upon the City any obligation whatsoever with respect to persons
having interests in the bonds other than the registered owners, as
shown on the registration books kept by the Trustee. The Trustee
shall take all action necessary for all representations of the City
in the Representation Letter with respect to the Trustee to at all
times be complied with.
The authorized officers of the Trustee and the City shall
do or perform such acts and execute all such certificates,
documents and other instruments as they or any of them deem
necessary or advisable to facilitate the efficient use of a
securities depository for all or any portion of the bonds; provided
that neither the Trustee nor the City may assume any obligations to
such securities depository or beneficial owners of bonds that are
inconsistent with their obligations to any registered owner under
this Ordinance.
Each bond shall be dated as of September 1, 2005.
Interest on the bonds shall be payable on March 1, 2006, and
semiannually thereafter on March 1 and September 1 of each year.
Payment of each installment of interest shall be made to the person
in whose name the bond is registered on the registration books of
the City maintained by A Bank of the Ozarks, Little Rock, Arkansas,
as Trustee and Paying Agent (the "Trustee at the close of
business on the fifteenth day of the month (whether or not a
business day) next preceding each interest payment date (the
"Record Date irrespective of any transfer or exchange of any
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such bond subsequent to such Record Date and prior to such interest
payment date, by check or draft mailed by the Trustee to such owner
at his address on such registration books. Principal of the bonds
shall be payable at the corporate trust office of the Trustee.
Each bond shall bear interest from the payment date next
preceding the date on which it is authenticated unless it is
authenticated on an interest payment date, in which event it shall
bear interest from such date, or unless it is authenticated prior
to the first interest payment date, in which event it shall bear
interest from September 1, 2005, or unless it is authenticated
during the period from the Record Date to the next interest payment
date, in which case it shall bear interest from such interest
payment date, or unless at the time of authentication thereof
interest is in default thereon, in which event it shall bear
interest from the date to which interest has been paid.
Only such bonds as shall have endorsed thereon a
Certificate of Authentication substantially in the form set forth
in Section 7 hereof (the "Certificate duly executed by the
Trustee shall be entitled to any right or benefit under this
Ordinance. No bond shall be valid and obligatory for any purpose
unless and until the Certificate shall have been duly executed by
the Trustee, and the Certificate of the Trustee upon any such bond
shall be conclusive evidence that such bond has been authenticated
and delivered under this Ordinance. The Certificate on any bond
shall be deemed to have been executed if signed by an authorized
officer of the Trustee, but it shall not be necessary that the same
officer sign the Certificate on all of the bonds.
In case any bond shall become mutilated or be destroyed
or lost, the City shall, if not then prohibited by law, cause to be
executed and the Trustee may authenticate and deliver a new bond of
like date, series, maturity and tenor in exchange and substitution
for and upon cancellation of such mutilated bond, or in lieu of and
in substitution for such bond destroyed or lost, upon the owner
paying the reasonable expenses and charges of the City and Trustee
in connection therewith, and, in the case of a bond destroyed or
lost, his filing with the Trustee evidence satisfactory to it that
such bond was destroyed or lost, and of his ownership thereof, and
furnishing the City and Trustee with indemnity satisfactory to
them. The Trustee is hereby authorized to authenticate any such
new bond. In the event any such bond shall have matured, instead
of issuing a new bond, the City may pay the same without the
surrender thereof. Upon the issuance of a new bond under this
Section, the City may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in
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relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith.
The City shall cause books for the registration and for
the transfer of the bonds as provided herein and in the bonds. The
Trustee shall act as the bond registrar. Each bond is transferable
by the registered owner thereof or by his attorney duly authorized
in writing at the principal office of the Trustee. Upon such
transfer a new fully registered bond or bonds of the same series
and maturity, of authorized denomination or denominations, for the
same aggregate principal amount will be issued to the transferee in
exchange therefor.
Bonds may be exchanged at the principal corporate trust
office of the Trustee for an equal aggregate principal amount of
bonds of any other authorized denomination or denominations of the
same series. The City shall execute and the Trustee shall
authenticate and deliver bonds which the registered owner making
the exchange is entitled to receive. The execution by the City of
any bond of any denomination shall constitute full and due
authorization of such denomination and the Trustee shall be thereby
authorized to authenticate and deliver such bond.
No charge shall be made to any owner of any bond for the
privilege of transfer or exchange, but any owner of any bond
requesting any such transfer or exchange shall pay any tax or other
governmental charge required to be paid with respect thereto.
Except as otherwise provided in the immediately preceding sentence,
the cost of preparing each new bond upon each exchange or transfer
and any other expenses of the City or the Trustee incurred in
connection therewith shall be paid by the City. Neither the
Trustee nor the City shall be required to transfer or exchange any
bonds selected for redemption in whole or in part.
The person in whose name any bond shall be registered
shall be deemed and regarded as the absolute owner thereof for all
purposes, and payment of or on account of the principal or premium,
if any, or interest on any bond shall be made only to or upon the
order of the registered owner thereof or his legal representative,
but such registration may be changed as hereinabove provided. All
such payments shall be valid and effectual to satisfy and discharge
the liability upon such bond to the extent of the sum or sums so
paid.
In any case where the date of maturity of interest on or
principal of the bonds or the date fixed for redemption of any
bonds shall be a Saturday or Sunday or shall be in the State a
legal holiday or a day on which banking institutions are authorized
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by law to close, then payment of interest or principal need not be
made on such date but may be made on the next succeeding business
day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall
accrue for the period after the date of maturity or date fixed for
redemption.
Section 6. The bonds shall be executed on behalf of the
City by the manual or facsimile signatures of the Mayor and City
Clerk and shall have impressed or imprinted thereon the seal of the
City.
Section 7. The bonds and the Trustee's Certificate shall
be in substantially the following form and the Mayor and City Clerk
are hereby expressly authorized and directed to make all recitals
contained therein:
(Form of Bond)
REGISTERED REGISTERED
No.
UNITED STATES OF AMERICA
STATE OF ARKANSAS
COUNTY OF CRAWFORD
CITY OF VAN BUREN
SALES AND USE TAX BOND
SERIES 2005
Interest Rate: °s Maturity Date: September 1,
Dated Date: September 1, 2005
Registered Owner: Cede Co.
Principal Amount: Dollars
CUSIP No.:
KNOW ALL MEN BY THESE PRESENTS:
That the City of Van Buren, County of Crawford, State of
Arkansas (the "City for value received, hereby promises to pay
to the Registered Owner shown above upon the presentation and
surrender hereof at the principal corporate trust office of Thank
of the Ozarks, Little Rock, Arkansas, or its successor or
successors, as Trustee and Paying Agent (the "Trustee on the
Maturity Date shown above, the Principal Amount shown above, 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 public and
private debts and to pay by check or draft to the Registered Owner
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shown above interest thereon, in like coin or currency from the
interest commencement date described below at the Interest Rate per
annum shown above, payable on each March 1 and September 1 after
the Dated Date shown above, until payment of such Principal Amount
or, if this bond or a portion hereof shall be duly called for
redemption, until the date fixed for redemption, and to pay
interest on overdue principal and interest (to the extent legally
enforceable) at the rate borne by this bond. Payment of each
installment of interest shall be made to the person in whose name
this bond is registered on the registration books of the City
maintained by the Trustee at the close of business on the fifteenth
day of the month (whether or not a business day) next preceding
each interest payment date (the "Record Date irrespective of any
transfer or exchange of this bond subsequent to such Record Date
and prior to such interest payment date.
Unless this bond is presented by an authorized
representative of The Depository Trust Company, a New York
corporation "DTC to the Trustee for registration of transfer,
exchange or payment, and any certificate issued is registered in
the name of Cede Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede
Co. or to such other entity as is required by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as
the registered owner hereof, Cede Co., has an interest herein.
This bond shall bear interest from the payment date next
preceding the date on which it is authenticated unless it is
authenticated on an interest payment date, in which event it shall
bear interest from such date, or unless it is authenticated during
the period from the Record Date to the next interest payment date,
in which case it shall bear interest from such interest payment
date, or unless it is authenticated prior to the first interest
payment date, in which event it shall bear interest from the Dated
Date shown above, or unless at the time of authentication hereof
interest is in default hereon, in which event it shall bear
interest from the date to which interest has been paid.
This bond is one of an issue of City of Van Buren,
Arkansas Sales and Use Tax Bonds, Series 2005, aggregating One
Million Seven Hundred Thousand Dollars ($1,700,000) in aggregate
principal amount (the "bonds and is issued for the purpose of
financing all or a portion of the costs of library facility
improvements and paying expenses of authorizing and issuing the
bonds.
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The bonds are issued pursuant to and in full compliance
with the Constitution and laws of the State of Arkansas (the
"State particularly Amendment No. 62 to the Constitution of the
State and Title 14, Chapter 164, Subchapter 3 of the Arkansas Code
of 1987 Annotated (the "Authorizing Legislation and pursuant to
Ordinance No. m of the City, duly adopted on August 15, 2005
(the "Authorizing Ordinance and an election duly held at which
the majority of the legal voters of the City voting on the
questions approved the issuance of the bonds. Reference is hereby
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, the Trustee and the registered owners of the bonds. The
bonds are special obligations of the City, payable from and secured
by a first and prior pledge of the proceeds derived by the City
from a 0.5% sales and use tax (the "Tax levied by the City under
the Authorizing Legislation and Ordinance No. 06 -2005 of the City
duly adopted on April 18, 2005, and the City hereby pledges its
collections of the Tax for the payment of this bond.
The bonds are subject to extraordinary and optional
redemption prior to maturity as follows:
(1) The bonds shall be redeemed by the City from surplus
tax collections (defined below) on any interest payment date, in
whole or in part, at a redemption price equal to the principal
amount being redeemed plus accrued interest to the redemption date,
in inverse order of maturity and by lot within a maturity in such
manner as the Trustee may determine.
The City has covenanted in the Authorizing Ordinance that
surplus tax collections, being collections from the Tax in excess
of the amount necessary to insure the prompt payment of the
principal of, interest on and Trustee's and administrative fees in
connection with the bonds as the same become due.
(2) The bonds are subject to redemption at the option of
the City, from funds from any other source, on and after
September 1, 2006, in whole at any time or in part on any interest
payment date, at a redemption price equal to the principal amount
being redeemed plus accrued interest to the redemption date.
If fewer than all of the bonds shall be called for
redemption, the particular bonds or portion thereof to be redeemed
from such maturity shall be selected by lot by the Trustee.
In case any outstanding bond is in a denomination greater
than $5,000, each $5,000 of face value of such bond shall be
treated as a separate bond of the denomination of $5,000.
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Notice of redemption identifying the bonds or portions
thereof (which shall be $5,000 or a multiple thereof) to be
redeemed and the date they shall be presented for payment shall be
given by the Trustee, not less than 30 nor more than 60 days prior
to the date fixed for redemption, by mailing a copy of the
redemption notice by first class mail, postage prepaid, to all
registered owners of bonds to be redeemed. Failure to mail an
appropriate notice or any such notice to one or more registered
owners of bonds to be redeemed shall not affect the validity of the
proceedings for redemption of other bonds as to which notice of
redemption is duly given in proper and timely fashion. All such
bonds or portions thereof thus called for redemption and for the
retirement of which funds are duly provided in accordance with the
Authorizing Ordinance prior to the date fixed for redemption will
cease to bear interest on such redemption date.
This bond is transferable by the Registered Owner shown
above in person or by his attorney -in -fact duly authorized in
writing at the principal corporate trust office of the Trustee, but
only in the manner, subject to the limitations and upon payment of
the charges provided in the Authorizing Ordinance, and upon
surrender and cancellation of this bond. Upon such transfer a new
fully registered bond or bonds of the same maturity, of authorized
denomination or denominations, for the same aggregate principal
amount, will be issued to the transferee in exchange therefor.
This bond is issued with the intent that the laws of the State
shall govern its construction.
The City and the Trustee may deem and treat the
Registered Owner shown above as the absolute owner hereof for the
purpose of receiving payment of or on account of principal hereof
and interest due hereon and for all other purposes, and neither the
City nor the Trustee shall be affected by any notice to the
contrary.
The bonds are issuable only as fully registered bonds in
the denomination of $5,000 and any integral multiple thereof.
Subject to the limitations and upon payment of the charges provided
in the Authorizing Ordinance, fully registered bonds may be
exchanged for a like aggregate principal amount of fully registered
bonds of the same maturity of other authorized denominations.
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,
particularly Amendment No. 62 to the Constitution of the State and
the Authorizing Legislation, precedent to and in the issuance of
this bond have existed, have happened and have been performed in
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due time, form and manner as required by law; that the indebtedness
GO represented 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 the Authorizing Legislation and
made payable until all of the bonds and interest thereon have been
fully paid and discharged.
This bond shall not be valid until it shall have been
authenticated by the Certificate hereon duly signed by the Trustee.
THE CITY HAS DESIGNATED THIS BOND AS A "QUALIFIED TAX
EXEMPT OBLIGATION" WITHIN THE MEANING OF SECTION 265(b) OF THE
CODE.
IN WITNESS WHEREOF, the City of Van Buren, Arkansas has
caused this bond to be executed by its Mayor and City Clerk and its
corporate seal to be impressed or imprinted on this bond, all as of
the Dated Date shown above.
CITY OF VAN BUREN, ARKANSAS
ATTEST:
Byc�.G /e, oGwzst/
t�U� Mayor
City Clerk
(SEAL)
(Form of Trustee's Certificate)
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This bond is one of the bonds issued under the provisions
of the within mentioned Authorizing Ordinance.
Date of Authentication:
A BANN OF THE OZARKS
A Little Rock, Arkansas
TRUSTEE
By
Authorized Signature
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(Form of Assignment)
ASSIGNMENT
FOR VALUE RECEIVED, "Transferor
hereby sells, assigns and transfers unto the within
bond and all rights thereunder, and hereby irrevocably constitutes
and appoints as attorney to transfer the within bond
on the books kept for registration thereof with full power of
substitution in the premises.
DATE:
Transferor
GUARANTEED BY:
NOTICE: Signature(s) must be guaranteed by a member of or
participant in the Securities Transfer Agents Medallion Program
(STAMP), or in another signature guaranty program recognized by the
Trustee.
Section 8. The City hereby expressly pledges and
appropriates all of the revenues derived by the City from the
City's 0.5% sales and use tax levied by Ordinance No. 06 -2005
passed April 18, 2005 (the "Tax to the payment of the principal
of and interest on the bonds when due at maturity or at redemption
prior to maturity and to the payment of the Trustee's and
administrative fees and expenses. The City covenants that the Tax
shall never be repealed or reduced while any of the bonds are
outstanding. The City further covenants to use due diligence in
collecting the Tax. Nothing herein shall prohibit the City from
increasing the Tax from time to time, to the extent permitted by
law, and no part of the revenues derived from any such increase
shall become part of the revenues pledged hereunder.
Section 9. (a) The City hereby designates Thank of the
Ozarks, A Little Rock, Arkansas as the bank which shall receive
collections of the Tax (the "Pledged Revenues from the State
Treasurer and the City covenants to file a written designation
thereof with the State Treasurer prior to the issuance of the
bonds. The Trustee shall deposit all collections of the Tax as and
when received into a special fund of the City in the Trustee which
is hereby created and designated "Sales and Use Tax Bond Fund" (the
"Bond Fund for the purpose of providing funds for the payment of
principal of and interest on the bonds as they become due at
maturity or at redemption prior to maturity and the Trustee's and
administrative fees and expenses. Moneys in the Bond Fund shall be
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used on each interest payment date in the following order of
priority as and when necessary:
(1) to pay the interest on the bonds then due; and
(2) to pay the principal of the bonds then due; and
(3) to make provision in the Bond Fund for payment of
one -half of the principal next due on the bonds if principal is not
due on such interest payment date; and
(4) to pay the Trustee's and administrative fees and
expenses then due; and
(5) to redeem bonds prior to maturity.
The Bond Fund shall, except as provided in this Section,
be depleted once a year except for a carryover amount not to exceed
the greater of (i) one year's earnings on the Bond Fund or (ii)
1/12 of the annual debt service on the bonds. Any moneys in the
Bond Fund shall, except as provided in this Section, be spent for
one of the above purposes within a thirteen -month period beginning
on the date of deposit, and any amount received from investment of
money held in the Bond Fund will be spent within a one -year period
beginning on the date of receipt.
(b) When the moneys in the Bond Fund shall be and remain
sufficient to pay (1) the principal of all the bonds then
outstanding, (2) interest on the bonds until the next interest
payment date and (3) the Trustee's and administrative fees and
expenses, there shall be no obligation to make any further payments
into the Bond Fund and any Pledged Revenues remaining in the Bond
Fund after the principal of, premium, if any and interest on the
bonds have been paid may be used by the City for any lawful
purpose.
(c) All moneys in the Bond Fund shall be used solely for
the purpose of paying the principal of and interest on the bonds,
the Trustee's and administrative fees and expenses. There shall be
established and maintained in the Bond Fund a Redemption Account
into which there shall be deposited all Pledged Revenues remaining
after making the applications required by clauses (1) through (4)
of subsection (a) above "Surplus Tax Collections Moneys in the
Redemption Account shall be used on the next available interest
payment date for the purpose of redeeming bonds in accordance with
clause (5) of subsection (a) above.
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(e) The Trustee is authorized and directed to withdraw
moneys from the Bond Fund from time to time as necessary for paying
principal of and interest on the bonds when due at maturity or at
redemption prior to maturity and for making other authorized Bond
Fund expenditures.
(f) The bonds shall be specifically secured by a pledge
of the Pledged Revenues, which pledge in favor of the bonds is
hereby irrevocably made according to the terms of this Ordinance,
and the City, and the officers and employees of the City, shall
execute, perform and carry out the terms thereof in strict
conformity with the provisions of this Ordinance.
Section 10. Any bond shall be deemed to be paid within
the meaning of this Ordinance when payment of the principal of and
interest on such bond (whether at maturity or upon redemption as
provided herein, or otherwise), either (i) shall have been made or
caused to be made in accordance with the terms thereof, or (ii)
shall have been provided for by irrevocably depositing with the
Trustee, in trust and irrevocably set aside exclusively for such
payment (1) cash sufficient to make such payment and /or (2)
Government Securities (as defined in Section 17 hereof) that are
direct obligations of the United States of America (provided that
such deposit will not cause any of the bonds to be classified as
"arbitrage bonds" within the meaning of Section 148 of the Internal
Revenue Code of 1986, as amended (the "Code)), maturing as to
principal and interest in such amounts and at such times as will
provide sufficient moneys to make such payment, and all necessary
and proper fees, compensation and expenses of the Trustee with
respect to which such deposit is made shall have been paid or the
payment thereof provided for to the satisfaction of the Trustee.
Any cash must be insured at all times by the Federal Deposit
Insurance Corporation "FDIC or otherwise collateralized with
Government Securities that are direct obligations of the United
States of America.
On the payment of any bonds within the meaning of this
Ordinance, the Trustee shall hold in trust, for the benefit of the
owners of such bonds, all such moneys and /or Government Securities.
When all the bonds shall have been paid within the
meaning of this Ordinance and if the Trustee has been paid its fees
and expenses the Trustee shall take all appropriate action to
cause (i) the pledge and lien of this Ordinance to be discharged
and cancelled, and (ii) all moneys held by it pursuant to this
Ordinance and which are not required for the payment of such bonds
to be paid over or delivered to or at the direction of the City.
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Section 11. The City covenants that it will not issue
any additional bonds, or incur any other obligation, secured by a
lien on or pledge of the Pledged Revenues.
Section 12. The bonds shall be callable for payment
prior to maturity in accordance with the terms set out in the bond
form set forth in Section 7 of this Ordinance. The City hereby
covenants to use Surplus Tax Collections to redeem the bonds on the
first available interest payment date in accordance with clause (5)
of Section 9(a) of this Ordinance.
Section 13. It is hereby covenanted and agreed by the
City with the owners of the bonds that the City will faithfully and
punctually perform all duties with reference to the Tax and the
bonds required by the Constitution and laws of the State and by
this Ordinance, including the collection of the Tax, as herein
specified and covenanted and the applying of the Pledged Revenues
as herein provided.
Section 14. The Trustee will keep or cause to be kept
proper books of accounts and records in which complete and correct
entries shall be made of all transactions relating to the Pledged
Revenues and such books shall be available for inspection by the
City, the Purchaser and the owner of any of the bonds at reasonable
times and under reasonable circumstances. The Trustee shall
furnish a report to the City on a monthly basis of all receipts and
disbursements of the Pledged Revenues received by the Trustee,
which monthly report shall commence one month following the first
month in which the Pledged Revenues are received by the Trustee.
Section 15. (a) If there be any default in the payment
of the principal of and interest on any of the bonds, or if the
City defaults in the performance of any covenant contained in this
Ordinance, the Trustee may, and shall, upon the written request of
the owners of not less than 10o in principal amount of the bonds
then outstanding, by proper suit compel the performance of the
duties of the officials of the City under the Constitution and laws
of the State and under this Ordinance, and to take any action or
obtain any proper relief in law or equity available under the
Constitution and laws of the State.
(b) No owner of any bond 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 the Constitution and laws of the State unless
such owner previously shall have given to the Trustee written
notice of the default on account of which such suit, action or
proceeding is to be taken, and unless the owners of not less than
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10% in principal amount of the 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 the Constitution and laws of the State, or to
institute such action, suit or proceeding in its name, and unless,
also, there shall have been offered to the Trustee reasonable
security and indemnity against the cost, expense 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 option of the Trustee, to be
conditions precedent to the execution of the powers and trust of
this Ordinance or to any other remedy hereunder. It is understood
and intended that no one or more owners of the bonds shall have any
right in any manner whatever by his 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
owners of the outstanding bonds, and that any individual rights of
action or other right given to one or more of such owners by law
are restricted by this Ordinance to the rights and remedies herein
provided.
(c) All rights of action under this Ordinance or under
any of the bonds, enforceable by the Trustee, may be enforced by it
without the possession of any of the bonds, and any such suit,
action or proceeding instituted by the Trustee shall be brought in
its name and for the benefit of all the owners of the bonds,
subject to the provisions of this Ordinance.
(d) No remedy herein conferred upon or reserved to the
Trustee or to the owners of the bonds 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.
(e) No delay or omission of the Trustee or of any owners
of the bonds 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 Trustee and
to the owners of the bonds, respectively, may be exercised from
time to time and as often as may be deemed expedient.
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(f) The Trustee may, and upon the written request of the
owners of not less than a majority of the owners in principal
amount of the 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
or impair any rights or remedies consequent thereon.
Section 16. When the bonds have been executed and sealed
as herein provided, they shall be delivered to the Trustee, which
shall authenticate them and deliver them to or at the direction of
the Purchaser upon payment of the Purchase Price. The accrued
interest shall be deposited in the Bond Fund. The expenses of
issuing the bonds, as set forth in the delivery instructions to the
Trustee signed by the Mayor and City Clerk shall be paid from the
Purchase Price.
The balance of the Purchase Price shall be deposited with
the Trustee in a special account of the City hereby created and
designated the "2005 Library Bond Construction Fund" (the
"Construction Fund The moneys in the Construction Fund shall be
used for accomplishing the Improvements, paying expenses incidental
thereto and paying expenses of issuing the bonds. Moneys in the
Construction Fund shall also be used to pay the principal of and
interest on the bonds when due if moneys in the Bond Fund are not
sufficient for that purpose.
Disbursements shall be made from the Construction Fund on
the basis of requisitions which shall specify: the name of the
person, firm or corporation to whom payment is to be made; the
amount of the payment; and the purpose of the payment. Each
requisition must be signed by the Mayor and the City Clerk. The
Trustee shall keep records as to all payments made from the
Construction Fund.
When the bonds have been paid, the Trustee shall transfer
all moneys remaining in the Construction Fund to another
construction fund established by the City for the purpose of paying
any remaining costs of the Improvements.
Section 17. (a) Moneys held for the credit of the
Construction Fund may be invested and reinvested at the direction
of the City in Permitted Investments or other investments from time
to time permitted by law, which shall mature, or which shall be
subject to redemption by the holder thereof, at the option of such
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holder, not later than the date or dates when such money will be
required for the purposes intended.
(b) Moneys held for the credit of the Bond Fund shall be
invested and reinvested at the direction of the City in Permitted
Investments, 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 will be required for
payment of the principal of and interest on the bonds when due.
(c) Obligations so purchased as an investment of moneys
in any fund shall be deemed at all times to be a part of such fund
and the interest accruing thereon and any profit realized from such
investments shall be credited to such fund, and any loss resulting
from such investment shall be charged to such fund.
(d) "Permitted Investments are defined to mean
(1) Cash (insured at all times by the FDIC or otherwise
collateralized with obligations described in clause (2) below);
(2) Direct or fully guaranteed obligations of (including
obligations issued or held in book entry form on the books of) the
United States of America "Government Securities
(3) Time deposits or certificates of deposit of banks,
including the Trustee, which are members of the FDIC, to the extent
insured by the FDIC, or if in excess of insurance coverage, are
collateralized by Government Securities or other securities
authorized by State law to secure public deposits; and
(4) Investments in a money market fund consisting
primarily of Government Securities.
(e) All investments and deposits shall have a par value
(or market value when less than par), exclusive of accrued interest
at all times at least equal to the amount of money credited to such
funds and shall be made in such a manner that the money required to
be expended from any fund will be available at the proper time or
times.
Section 18. A Bank of the Ozarks, Little Rock, Arkansas
is hereby appointed to act as Trustee and Paying Agent pursuant to
this Ordinance. The Trustee shall be responsible for the exercise
of good faith and reasonable prudence in the execution of its
trusts. The recitals in this Ordinance and in the bonds 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
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requested to do so in writing by the owners of not less than 10% in
principal amount of 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 by giving 60 days' notice in writing to the City
Clerk and the owners of the bonds, and the majority in principal
amount of the owners of the outstanding bonds or the City, so long
as it is not in default hereunder, at any time, with or without
cause, may remove the Trustee. In the event of a vacancy in the
office of Trustee, the City shall designate a new Trustee by a
written instrument filed in the office of the City Clerk. The new
Trustee shall be a bank or a trust company duly authorized to
exercise trust powers and subject to examination by federal or
State authority, having a reported capital and surplus of not less
than $15,000,000. The Trustee and any successor Trustee shall file
a written acceptance and agreement to execute the trusts imposed
upon it 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 respective owners of the bonds
agree. Such written acceptance shall be filed with the City Clerk,
and a copy thereof shall be placed in the bond transcript. Any
successor Trustee shall have all the powers herein granted to the
original Trustee.
Section 19. (a) The terms of this Ordinance shall
constitute a contract between the City and the owners of the bonds
and no variation or change in the undertaking herein set forth
shall be made while any of the bonds are outstanding, except as
hereinafter set forth in subsections (b) and (c).
(b) The Trustee may consent to any variation or change in
this Ordinance that the Trustee determines is not to the material
prejudice of the owners of the bonds or in order to cure any
ambiguity, defect or omission in this Ordinance or any amendment
hereto without the consent of the owners of the bonds.
(c) The owners of not less than 75% in aggregate
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 contained
in this Section shall permit or be construed as permitting (1) an
extension of the maturity of the principal of or the interest on
any bond, or (2) a reduction in the principal amount of any bond or
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the rate of interest thereon, or (3) the creation of a pledge of
the Pledged Revenues superior to the pledge created by this
Ordinance, or (4) a privilege or priority of any bond or bonds over
any other bond or bonds, or (5) a reduction in the aggregate
principal amount of the bonds required for consent to such
supplemental ordinance.
Section 20. (a) 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 included in gross income for federal income tax
purposes. Without limiting the generality of the foregoing, the
City covenants that the proceeds of the sale of the bonds and the
Pledged Revenues 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 148 of the Code.
(b) The City represents that it has not used or
permitted the use of, and covenants that it will not use or permit
the use of the Improvements or the proceeds of the bonds, in such
manner as to cause the bonds to be "private activity bonds" within
the meaning of Section 141 of the Code. In this regard, the City
covenants that (i) it will not use (directly or indirectly) the
proceeds of the bonds to make or finance loans to any person, and
(ii) that while the bonds are outstanding the Improvements will
only be used by state or local governmental units or by persons on
a basis as members of the general public.
(c) The City covenants that it will not reimburse itself
from bond proceeds for any costs paid prior to the date the bonds
are issued except in compliance with United States Treasury
Regulation No. 1.150 -2 (the "Regulation This Ordinance shall
constitute an "official intent" for purposes of the Regulation.
(d) The bonds are hereby designated as "qualified
tax exempt obligations" within the meaning of the Code. The City
represents that the aggregate principal amount of its qualified
tax exempt obligations (excluding "private activity bonds" within
the meaning of Section 141 of the Code which are not "qualified
501(c)(3) bonds" within the meaning of Section 145 of the Code),
including those of its subordinate entities, issued in calendar
year 2005 are not expected to exceed $10,000,000.
The City further represents that (i) the aggregate
principal amount of its tax exempt obligations (not including
"private activity bonds" within the meaning of Section 141 of the
Code), including those of its subordinate entities, to be issued in
calendar year 2005 will not exceed $5,000,000, and (ii) at least
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95% of the proceeds of the bonds will be expended for the
Improvements.
Section 21. The City covenants that it will take no
action which would cause the bonds to be "federally guaranteed"
within the meaning of Section 149(b) of the Code. The City further
covenants 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
bonds are issued, a statement concerning the bonds which contains
the information required by Section 149(e) of the Code.
Section 22. In the event the office of Mayor, City Clerk,
City Treasurer or City Council 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
functions thereof, or by the office or officer upon whom such
powers, obligations and duties shall be imposed by law.
Section A 23. The provisions of this Ordinance are
separable and in the event that any section or part hereof shall be
held to be invalid, such invalidity shall not affect the remainder
of this Ordinance.
Section A 24. All ordinances and resolutions and parts
thereof in conflict herewith are hereby repealed to the extent of
such conflict.
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Section A 25. It is hereby ascertained and declared that
the Improvements are immediately needed for the preservation of the
public peace, health and safety and to remove existing hazards
thereto. The Improvements cannot be accomplished without the
issuance of the bonds, which cannot be sold at the interest rates
specified herein unless this Ordinance is immediately effective.
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: 44, ∎,(,(r /S, 2005.
APPROVED:
ATTEST:
LCX�
e Mayor
City Clerk
(SEAL)
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