0544
47.
ORDINANCE NO. 544
AN ORDINANCE AUTHORIZING THE ISSUANCE OF WATERWORKS SEWER REVENUE
BONDS FOR THE PURPOSE OF FINANCING THE COST OF CONSTRUCTING
IMPROVEMENTS TO THE WATERWORKS AND SEWER AT THE CITY OF JACKSONVILLE,
ARKANSAS: PROVIDING FOR THE PAYMENT OF THE BONDS; PRESCRIBING
OTHER MATTERS RELATING THERETO; AND DECLARING AN EMERGENCY.
WHEREAS, the City of Jacksonville, Arkansas (the "City"), owns and
operates waterworks sewer facilities (presently operated as a single system
and herein sometimes referred to as the "System"); and
WHEREAS, the City has determined that the constructing of extensions,
betterments and improvements to the System (the "improvements") is necessary;
and
WHEREAS, the total estimated cost of the improvements is approximately
$1,250,000 and in order to finance the improvements, it is necessary that
the City issue Water and Sewer Revenue Bonds in the principal amount of $1,250,000;
and
WHEREAS, the City has outstanding an issue of Waterworks and Sewer
Revenue Bonds, dated May 1, 1957 (the "1957 Bonds"), issued under and secured
by the provisions of Ordinance No. 89 of the Ordinances of the City, adopted
and approved on April 18, 1957 ("Ordinance No. 89"); and
WHEREAS, the City has outstanding an issue of Waterworks and Sewer
Revenue Bonds, dated January 1, 1960 (the "1960 Bonds") issued under and secured
by the provisions of Ordinance No. 103 of the Ordinances of the City, adopted
and approved on January 4, 1960 ("Ordinance No. 103"); and
WHEREAS, the City has outstanding an issue of Waterworks and Sewer
Revenue Bonds, Dated June 1, 1961 (the "1961 Bonds"), issued and secured by
the provisions of Ordinance No. 131 of the Ordinances of the City, adopted
and approved on June 8, 1961 ("Ordinance No. 131"); and
WHEREAS, the City has outstanding an issue of Waterworks and Sewer
Revenue Bonds, Series A, dated June 1, 1964, and an issue of Waterworks and
Sewer Revenue Bonds, Series B, dated June 1, 1964 (collectively referred to
as the "1964 Bonds"), issued under and secured by the provisions of Ordinance
No. 152 of the Ordinances of the City, adopted and approved on June 11, 1964
("Ordinance No. 152"); and
WHEREAS, the City has outstanding an issue of Water and Sewer Revenue
Bonds, dated April 1, 1973 (the "1973 Bonds"), issued under and secured by
the provisions of Ordinance No. 287 of the Ordinances of the City, adopted
and approved on March 8, 1973, and an implementing Resolution (collectively
referred to as "Ordinance No. 287"); and
WHEREAS, the bonds identified above will be herein referred to collec-
tively as the "bonds of prior issues," and the pledge of System revenues
securing these bonds shall be subject and subordinate to the pledges of System
revenues securing the bonds of prior issues;
NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of
Jacksonville, Arkansas:
~ <to
Section 1. The improvements shall be accomplished and the Mayor
and City Clerk are hereby authorized to execute such documents and writings
and to take such other action as may be necessary or appropriate thereto.
The Council hereby finds and declares that the period of usefulness of the
improvements will be more than forty (40) years, which is longer than the
term of the bonds.
Section 2. Under the authority of the Constitution and laws of
the State of Arkansas, including particularly Act No. 131 of the Acts of Arkansas
of 1933, as amended, Act No. 132 of the Acts of Arkansas of 1933, as amended,
and applicable decisions of the Supreme Court of the State of Arkansas, including
City of Harrison v. Braswell, 209 Ark. 1094, 194 SW 2d 12 (1946), Water and
Sewer Revenue Bonds are hereby authorized and ordered and issued in the principal
amount of $1,250,000 for the purpose of accomplishing the improvements and
paying necesssary expenses incidental thereto and to the authorization and
issuance of the bonds. The bonds shall be dated August 1, 1979, with interest
thereon payable semiannually on February 1 and August 1 of each year, commencing
February 1, 1980. The bonds shall be numbered consecutively from 1 upward,
and shall be in the denomination of $5,000 each, or any integral multiple
thereof. The bonds shall bear interest at the rate of 7.43% per annum and
shall mature on August 1 of each of the years as follows:
1980 $25,000.00 1990 $ 60,000.00
1981 25,000.00 1991 65,000.00
1982 30,000.00 1992 70,000.00
1983 35,000.00 1993 75,000.00
1984 40,000.00 1994 85,000.00
1985 40,000.00 1995 85,000.00
1986 40,000.00 1996 90,000.00
1987 50,000.00 1997 100,000.00
1988 55,000.00 1998 105,000.00
1989 60,000.00 1999 115,000.00
The bonds shall be sold to Stephens Inc., Little Rock, Arkansas (the "purchaser")
at a price of par plus accrued interest from date of the bonds to date of delivery.
The bonds may be converted by the purchaser to an issue bearing a lower rate or
rates of interest, so long as such conversion is in accordance with the Universal
Bond Values Tables and so long as the City receives no less and pays no more than
if the bonds were not converted. Conversion of the bonds shall be subject
to approval of the City Council, and such approval shall be set forth in a
resolution adopted by the City Council, which resolution shall also set forth
the annual and semiannual requirements for principal and interest on the bonds
and such other details pertaining to the bonds as may be appropriate. The
bonds shall be subject to redemption prior to maturity as hereinafter set
forth.
The Trustee and Paying Agent for the bonds shall be First Jacksonville
Bank, Jacksonville, Arkansas.
Section 3. 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. The bonds, and interest thereon, shall not be general obligations of
the City but shall be special obligations, payable solely from revenues derived
from operation of the System, which revenues are hereby pledged and mortgaged
for the equal and ratable payment of the bonds, subject to the pledge securing
the bonds of prior issues, and shall be used for no other purpose than to
pay interest on the bonds, except as otherwise specifically provided in this
Ordinance. The bonds and interest thereon shall not constitute an indebtedness
of the City within any constitutional or statutory limitation.
Section 4. The bonds 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:
~f
3tJ..
UNITED STATES OF AMERICA
STATE OF ARKANSAS
COUNTY OF PULASKI
CITY OF JACKSONVILLE
% WATER AND SEWER REVENUE BOND
No.
$5,000
KNOW ALL MEN BY THESE PRESENTS:
That the City of Jacksonville, Pulaski County, State of Arkansas
(the "City"), acknowledges itself to owe and for value received, hereby promises
to pay to bearer, or if this bond be registered to the registered owner hereof,
solely from the special fund provided as hereinafter set forth the principal
sum of
FIVE THOUSAND DOLLARS
in lawful money of the United States of America on the first day of August,
19 , and to pay interest thereon at the rate of percent ( %) per
annum, from the date hereof until paid. Interest is payable semiannually
on February 1 and August 1 of each year, commencing February 1, 1980. Principal
and interest shall be payable at the principal office of First Jacksonville
Bank, Jacksonville, Arkansas (the "Trustee" and "Paying Agent"). Payment
of interest, when registered as to interest, may be by check or draft mailed
to the registered owner at his address reflected on the registration book
of the City maintained by the Trustee.
The bond is one of an issue of Water and Sewer Revenue Bonds, aggregating
Dollars ($ ), dated
August 1, 1979, numbered from 1 to , inclusive, all of like tenor and
effect except as to number, rate of interest, denomination, maturity and right
of prior redemption (the "bonds"), issued for the purpose of financing the
costs of constructing extensions, betterments and improvements to the City's
Water and Sewer System (the "System").
This bond may be registered as to principal or as to principal and
interest and may be discharged from such registration in the manner, with
the effect, and subject to the terms and conditions endorsed hereon. Subject
to the provisons for registration endorsed hereon, nothing contained in the
bond or in the Authorizing Ordinance shall affect or impair the negotiability
of this bond, and this bond shall be deemed a negotiable instrument under
the laws of the State of Arkansas and is issued with the intent that the laws
of the State of Arkansas will govern its construction.
The bonds shall be subject to redemption prior to maturity, in whole
or in part, in inverse numerical order, with there to be no partial redemption
of any bond, from funds from any source on any interest payment date on and
after August 1, 1982, at a redemption price of the principal amount being
refunded plus accrued interest to the redemption date.
Notice of the call for redemption shall be published one time in
a newspaper published in the City of Little Rock, Arkansas, and having a general
circulation throughout the State of Arkansas, giving the number and maturity
of each being called, with the publication to be at least fifteen (15) days
prior to the redemption date, and after the date fixed for redemption each
bond so called shall cease to bear interest, provided funds for its payment
are on deposit with the Paying Agent at that time. In addition, notice shall
be given by certified or registered mail, mailed fifteen (15) days prior
to the redemption date, to the owner of each bond registered as to principal
31.
at the address of such owner reflected on the bonds registration book, and
if all outstanding bonds shall be registered as to principal, notice by mail
to the registered owners thereof shall be sufficient, and it shall not be
necessary to publish notice of the call.
The bonds are issued pursuant to and in full compliance with the
Constitution and laws of the State of Arkansas, particularly Act No. 131 of
the Acts of Arkansas of 1933, as amended, Act No. 132 of the Acts of Arkansas
of 1933, as amended, and the applicable decisions of the Supreme Court of
the State of Arkansas, including City of Harrison v. Braswell, 209 Ark. 1094,
194 S.W. 2d 12 (1946), and pursuant to Ordinance No. of the City, duly
adopted and approved on the day of , 1979, and an implementing
resolution (collectively referred to as the "Authorizing Ordinance") and do
not constitute an indebtedness of the City within any constitutional or statutory
limitation. The bonds are not general obligations of the City but are special
obligations payable solely from and secured by a pledge of the net revenues
derived from the operation of the System, a sufficient amount of which has
been duly set aside as a special fund for that purpose and identified as the
"1979 Water and Sewer Revenue Bond Fund" created by the Authorizing Ordinance.
The lien, pledge and security of bonds of the City previously issued, described
in the Authorizing Ordinance (the "bonds of prior issues"). Reference is
hereby made to the Authorizing Ordinance for a detailed statement of the nature
and extent of the security, the rights and obligations of the City, the Trustee
and the holders and registered owners of the bonds and the terms and conditions
upon which the bonds are issued. The City has fixed and has covenanted and
agreed to maintain rates for water and sewer services which shall be sufficient
at all times to provide for the proper and reasonable expenses of operation
and maintenance of the System, to provide for the payment of the principal
of and the interest on the bonds of prior issues and these bonds as they mature,
and the Trustee's and Paying Agent's fees, to make provision for the depreciation
of the System and to maintain all funds at required levels.
This bond shall not be valid until it shall have been authenticated
by the certificate hereon duly signed by the Trustee.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions
and things required to exist, happen and be performed, 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 represented
by this bond does not exceed any constitutional or statutory limitation; and
that sufficient revenues have been pledged to and will be set aside into the
special fund provided in the Authorizing Ordinance for the purpose of paying
the principal and interest on the bonds.
IN WITNESS WHEREOF, the City of Jacksonville, Arkansas, has caused this
bond to be executed by the facsimile signature of the Mayor, the manual signature
of the City Clerk, and its corporate seal of the City to be affixed, and has
caused the interest coupons attached hereto to be executed by the facsimile
signature of its Mayor, all as of the first day of August, 1979.
ATTEST: CITY OF JACKSONVILLE, ARKANSAS
City Clerk
(facsimile signature)
Mayor
(SEAL)
32".
(Form of Coupon)
No.
$
February,
On the first day of August, 19 , the City of Jacksonville, Pulaski
County, Arkansas, unless the bond to which this coupon is attached is paid
prior thereto or unless the bond is registered as to interest in accordance
with the provisions pertaining thereto set forth in the bond, hereby promises
to pay to bearer, solely from the special fund referred to in the bond,
DOLLARS
in lawful money of the United States of America at the principal office of
First Jacksonville Bank, Jacksonville, Arkansas, being six (6) months' interest
then due on its Water and Sewer Revenue Bond, dated August 1, 1979 and numbered
CITY OF JACKSONVILLE, ARKANSAS
By (facsimile signature)
Mayor
On each bond shall appear the following:
CERTIFICATE
This is one of the bonds of the City of Jacksonville, Arkansas Water
and Sewer Revenue Bonds, dated August 1, 1979.
FIRST JACKSONVILLE BANK
Jacksonville, Arkansas
TRUSTEE
By
Authorized Signature
33
PROVISIONS FOR REGISTRATION AND RECONVERSION
This Bond may be registered as to principal alone on books of the
City, kept by the Trustee as bond registrar, upon presentation hereof to the
bond registrar, which shall make mention of such registration in the registration
blank below, and this Bond may thereafter be transferred only upon an assignment
duly executed by the registered owner or his attorney or legal representative
in such form as shall be satisfactory to the bond registrar, such transfer
to be made on such books and endorsed hereon by the bond registrar. Such
transfer may be to bearer, and thereafter transferability by delivery shall
be restored, but this Bond shall again be subject to successive registrations
and transfers as before. The principal of this Bond, if registered, unless
registered to bearer, shall be payable only to or upon the order of the registered
owner or his legal representative. Interest accruing on this Bond will be
paid only on presentation and surrender of the attached interest coupons as
they respectively become due, and notwithstanding the registration of this
Bond as to principal, the appurtenant interest coupons shall remain payable
to bearer and shall continue to be transferable by delivery; provided, that
if upon registration of this Bond, or at any time thereafter while this Bond
is registered in the name of the owner, the unmatured coupons attached evidencing
interest to be thereafter paid hereon shall be surrendered to said bond registrar,
a statement to that effect will be endorsed hereon by the bond registrar and
thereafter interest evidenced by such surrendered coupons may be paid by check
or draft of the bond registrar at the times provided herein to the registered
owner of this Bond by mail to the address shown on the registration books.
This Bond when so converted into a bond registered as to both principal and
interest may be reconverted into a coupon bond at the written request of the
registered owner and upon presentation at the office of said bond registrar.
Upon such reconversion the coupons representing the interest to become due
thereafter to the date of maturity will again be attached to this Bond and
a statement will be endorsed hereon by the bond registrar in the registration
blank below whether it is then registered as to principal or payable to bearer.
Date of Registration: Name of Registered Owner
Manner of : Signature of
Registration: Bond Registrar
$~
Section 5. That the rates to be charged for services rendered by the
System heretofore fixed by ordinances of the City are hereby ratified and
confirmed.
That the City hereby covenants and agrees that there will be imposed
and collected such charges for the use of the System as will at all times
produce sufficient revenues to provide for the operation, maintenance and
repair of the System, to provide for the payment of the principal of and interest
on all outstanding bonds to the payment of which System revenues are pledged,
including the bonds of prior issues and these bonds, as the same become due,
to provide for Trustee and Paying Agent's fees, to make required deposits
for depreciation of the System and to maintain all Funds at required levels,
all as provided in ordinances and resolutions authorizing and securing such
bonds. This covenant shall include the agreement and obligation to increase
the charges from time to time as and to the extent necessary to produce sufficient
revenues to meet the above requirements.
Section 6. That the provisons, covenants, undertakings, stipulations,
and obligations of the City set forth in Resolution No.2, passed and approved
October 30, 1952, and Resolution No.3, passed and approved November 11, 1952
(which Resolutions authorized the issuance of Combined Waterworks and Sewer
Refunding and Improvement Bonds, dated December 1, 1952 (the "1952 Bonds")
and which 1952 Bonds have been refunded), Ordinance No. 89, Ordinance No.
103, Ordinance No. 121, Ordinance No. 152 and Ordinance No. 287, pursuant
to which the 1957 Bonds, the 1960 Bonds, the 1961 Bonds, the 1964 Bonds and
the 1973 Bonds were issued and secured and are presently outstanding, as such
Ordinances may, at any time, be amended, shall inure and appertain to the
bonds of this issue to the same extent and with like force and effect as if
set forth herein in full, except only insofar as the same may be expressly
inconsistent with the provisions of this Ordinance. In this regard, it is
understood that the 1952 Bonds have been refunded, and it is possible that
the 1957 Bonds, the 1960 Bonds, the 1961 Bonds, the 1964 Bonds and the 1973
Bonds, may be paid and retired prior to the payment of the outstanding bonds
of this issue, but that nevertheless the applicable provisons, covenants,
undertakings and stipulations for the operation of the System and for the
imposition, collection and application of the revenues from such operation
as set forth in the Resolutions and Ordinances referred to above shall continue
in force and effect and shall inure and appertain to the bonds hereby authorized
until their payment as above set forth.
Section 7. 1979 Water and Sewer Revenue Bond Fund. (a) That there
is hereby established with a bank, holding membership in the Federal Deposit
Insurance Corporation, to be designated by the City, a special fund in the
name of the City designated "1979 Water and Sewer Revenue Bond Fund" (the
"Bond Fund") which shall be maintained as long as any of the bonds are outstanding
and unpaid, and into which there shall be paid the sums in the amounts and
at the times hereinafter set forth in Subsection (b) for the purpose of providing
funds for the payment of the principal of, interest on and Trustee's and Paying
Agent's fees in connection with the bonds, according to the schedule to be
established after the terms of the conversion of the bonds shall have been
approved by the City Council, and as a debt service reserve.
~S
(b) There shall be deposited in the Bond Fund on the first business
day of each month until all outstanding bonds, principal and interest, have
been paid, or adequate provision made for such payment, a sum equal to one-
fifth (1/5) of the next installment of interest and one-tenth (1/10) of the
next installment of principal, and an amount sufficient to provide for the
Trustee's and Paying Agent's fees, on all outstanding bonds as they become
due; provided, however, that when there shall have been accumulated in the
Bond Fund a debt service reserve in the amount of one year's average principal
and interest requirements, so long as that debt service reserve is maintained
in that amount the monthly payments may be reduced to one-sixth (1/6) of the
next installment of interest and one-twelfth (1/12) of the next installment
of principal and an amount sufficient to provide for the Trustee's and Paying
Agent's fees, on all outstanding bonds.
(c) If the revenues of the System are insufficient to make the
required payment on the first business day of the following month into the
Bond Fund, then the amount of any such deficiency in the payment shall be
added to the amount otherwise required to be paid into the Bond Fund on the
first business day of the next month.
(d) If for any reason there shall be a failure to make any of the
required payments into the Bond Fund, any sums then held as a debt service
reserve shall be used to the extent necessary in the payment of the principal
of and interest on the bonds, but such reserve shall be reimbursed from the
first available moneys in the Waterworks and Sewer Revenue Rund. The debt
service reserve shall be used solely as herein provided.
(e) When the moneys in the Bond Fund, including the debt service
reserve, shall be and remain sufficient to pay the principal of and interest
on all the bonds then outstanding, and the Trustee's and Paying Agent's fees,
there shall be no further obligation to make payments into the Bond Fund.
(f) All moneys in the Bond Fund shall be used solely for the purpose
of paying the principal of and interest on the bonds, and the Trustee's and
Paying Agent's fees, as the same become due except that if at any time there
shall be accumulated in the Bond Fund a surplus 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 payable, and over and above the debt service reserve, such surplus may
be used for the redemption of bonds prior to maturity in the manner and pursuant
to the provisions hereof pertaining to redemption prior to maturity or for
any other lawful purpose.
(g) There shall be withdrawn from the Bond Fund at least two
(2) days before the maturity date of any principal or interest payment
and deposited with the Paying Agent an amount equal to the principal and
interest becoming due for the sole purpose of paying principal and interest,
together with the required amount of Trustee's and Paying Agent's fees,
and no withdrawals of funds from the Bond Fund shall be made for any other
purpose except in the case of an accumulated surplus as specified in (f)
above.
2,"..',\1",:":\.,,\,
CJ'~
(h) The bonds shall be specifically secured by a pledge of all revenue
required by this Ordinance to be placed into the Bond Fund. The pledge in
favor of the bonds is hereby irrevocably made according to the terms of this
Ordinance and the City and officers and employees of the City shall execute,
perform and carry out the terms thereof in strict conformity with the provisions
of this Ordinance.
(i) Notwithstanding any other provision hereof, the debt service
reserve shall never exceed the level of $187,500, and any excess shall be transferred
and deposited to the credit of the City's Waterworks and Sewer Fund.
(j) Notwithstanding any other provision hereof, any surplus in the
various funds and accounts maintained by the City for the operation, maintenance
and depreciation of the System in excess of reasonably expected requirements
for the operation, maintenance and depreciation of the System, based upon previous
experience and reasonable projections, shall be transferred to general funds
and accounts of the City or shall be applied to the redemption of bonds (these
bonds or bonds of prior issues) prior to maturity.
(k) The Bond Fund (except the debt service reserve) shall be depleted
at least once each year, except an amount not to exceed the greater of (a)
one year's earnings on the Bond Fund or (b) one-twelfth of the average annual
principal and interest requirements on the bonds.
Section 8. That the bonds shall be subject to redemption prior to
maturity in accordance with the provisions in the bond form appearing in Section
4 hereof.
Section 9. That after the bonds have been executed by the Mayor and
City Clerk and the seal of the City impressed as herein provided, they shall
be delivered to the Trustee which shall authenticate them and deliver them
to the purchaser upon receipt of the purchase price, including accrued interest
from August 1, 1979, to the date of delivery ("total sale proceeds"). The
total sale proceeds shall be disbursed as follows:
(1) The accrued interest shall be deposited in the Bond Fund.
(2) The balance of the total sale proceeds shall be deposited in
a special account designated "1979 Water and Sewer Construction Fund" (the
"Construction Fund"), in a bank to be designated by the City that is a member
of the Federal Deposit Insurance Corporation. The Construction Fund shall
be disbursed solely in payment of the cost of constructing the improvements
to the System, including engineering, legal and other necessary expenses incidental
thereto, but only on warrants, checks or vouchers signed by the Treasurer and
one other person designated by the City briefly specifying the nature of the
disbursement or expenditure and accompanied by a certificate signed by the
engineer for such construction that an obligation in a stated amount has been
incurred and to whom such obligation is owed, except that no such certificate
shall be required before payment of engineering fees, legal fees and the expenses
of issuing the bonds. The depository of the Construction Fund shall execute
an agreement to comply with the provisions of this Subsection.
When the construction of the improvements to the System has been
completed, this fact shall be evidenced by the filing with the Trustee and
with the depository in which the Construction Fund is deposited of a certificate
signed by the City Treasurer and by the consulting engineer. Upon receipt
of the above described certificate the depository with which the Construction
Fund is deposited shall payor transfer any remaining balance to the Bond Fund.
37
Section 10. (a) That moneys held for the credit of the Construction
Fund shall, as nearly as may be practicable, be continuously invested and reinvested
by the City in direct obligations of, or obligations the principal of and interest
on which, are unconditionally guaranteed by, the United States Government,
or in bank certificates of deposit, 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 the moneys will be needed.
(b) Moneys held for the credit of the Bond Fund or any other fund
may, at the option of the City, be invested and reinvested by the City in direct
obligations of, or obligations the principal of and interest on which, are
unconditionally guaranteed by, the United States Government, which shall mauture,
or which shall be subject to redemption by the holder thereof, at the option
of such holder, not later than ten (10) years from the date acquired.
(c) Obligations so purchased as an investment of moneys in any such
fund shall be at all times to be a part of such fund and the interest accruing
thereon and any profit realized from such investment shall be credited to such
fund, and any loss resulting from such investment shall be charged to such
fund.
(d) Moneys so invested need not be secured by the depository bank.
Section 11. That the City covenants that it will take no 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 and the
Trustee covenant 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.
Section 12. That as long as any of the bonds are outstanding, the
City shall not issue or attempt to issue any bonds claimed to be entitled to
a priority of lien on the revenues of the S~stem over the lien securing the
bonds of this issue, including the herein authorized and any and all future
extensions, betterments and improvements.
Nothing in this Ordinance shall be construed to prevent the issuance
by the City of additional bonds to finance or refinance the cost of constructing
any future extensions, betterments and improvements to the System; provided,
however, the City shall not authorize or issue any such additional bonds ranking
on a parity with these bonds, unless and until there shall have been procured
and filed with the Trustee a statement by an independent certified public accountant
not in the regular employ of the city reciting the opinion based upon necessary
investigation that (1) net revenues of the System for the fiscal year immediately
preceding the fiscal year in which it is proposed to issue such additional
bonds shall equal not less than 140% of the average annual principal and interest
requirements on all of the then outstanding bonds and the additional bonds
then proposed to be issued or (2) net revenues of the System for the fiscal
year next succeeding the fiscal year in which it is proposed to issue such
additional bonds, as reflected by a statement by an ind~pendent consulting
engineer not in the regular employ of the City, and approved by the Trustee,
and taking into account any rate increase then in effect, will equal not less
than 140% of the average annual principal and interest requirements on all
then outstanding bonds and the bonds then proposed to be issued. The term
" t " 1 h · d
ne revenues means gross revenues of the System ess t e amounts requlre
:)j?-
to pay the costs of operation, maintenance and repair of the System. For the
purpose of this computation, additional amounts may be added to the net revenues
of the completed fiscal year iUlluediately preceding the issuance of additional
bonds, as follows: If, prior to the issuance of the additional bonds and
subsequent to the first day of such preceding fiscal year, the City shall have
increased its rates or charges imposed for services of the System, there may
be added to the net revenues of such fiscal year the additional net revenues
which would have been received from the operation of the System during such
fiscal year had such increase been in effect throughout such fiscal year, as
reflected by a certificate of a duly qualified consulting engineer not in the
regular employ of the City and approved by the Trustee.
Section 13. (a) That the City convenants and agrees that the holders
and registered owners of the bonds shall have the protection of the provisions
of Ark. Acts of 1933, No. 132, ~ 13, as amended (Ark. Stat. Ann. ~19-4ll3
(Repl. 1968)) ("Act 132"), and that the City will diligently proceed to enforce
the lien of unpaid sewer charges against the premises served by the System and
to collect the amount due, together with the penalty and expenses authorized
by Act 132. And, if the City shall fail to proceed within thirty (30) days
after written request shall have been filed by the Trustee, the Trustee may,
and upon the written request of the holders of not less than ten percent (10%)
in principal amount of the bonds then outstanding shall, proceed to enforce
the lien in accordance with and pursuant to the authorization of Act 132.
(b) That if there be any default in the payment of the principal of
or interest on any bond, or if the City defaults in any Bond Fund requirement
or in the perfo'.Llllance of any of the other convenants contained and set forth
in this Ordinance, the Trustee may, and upon the written request of the holders
of not less than ten percent (10%) in principal amount of bonds then outstanding
shall, by proper suit, compel the performance of the duties of the officials
of the City as set forth in Act 132. And, in the case of a default in the
payment of the principal of and interest on any of the outstanding bonds, or
if the City fails to complete any other obligation which it herein assumes,
and such default shall continue for thirty (30) days thereafter, the Trustee
may, and upon the written request of the holders of not less than ten percent
(10%) in principal amount of bonds then outstanding shall, apply in a proper
action to a court of competent jurisdiction for the appointment of a receiver
to administer the System on behalf of the City and the bondholders with power
to charge and collect (or by mandatory injunction or otherwise to cause to
be charged and collected) rates sufficient to provide for the payment of the
expenses of operation, repair and maintenance and to pay any bonds and interest
outstanding to apply the revenue in conformity with the provisions of Act 132,
and with this Ordinance. When all defaults in principal and interest payments
have been cured, the custody and operation of the System shall revert to the
City.
(c) No holder of any of the bonds shall have any right to institute
any suit, action, mandamus or other proceeding in equity or at law for the
~q.
protection or enforcement of any power or right under this Ordi.nance or under
Act 132, unless such holder 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 holders of not less than ten percent (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 Act 132, or by the laws of the State of Arkansas, 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 costs, expenses 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 trusts of this
Ordinance or to any other remedy hereunder. It is understood and intended
that no one or more holders of the bonds hereby secured 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 holders of the outstanding bonds and coupons.
(d) That no remedy conferred upon or reserved to the Trustee or to
the holders of the bonds is intended to be exclusive of any other remedy or
remedies, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy given hereunder.
(e) That the Trustee may, and upon the written request of the holders
of not less than fifty percent (50%) in principal amount of the bonds then
outstanding shall, waive any default which shall have been remedied before
the entry of final jud~went 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 14. That the Trustee shall only be responsible for the exercise
of good faith and reasonable prudence in the execution of its trust. The
recitals in this Ordinance and in the face of 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 requested to do so in writing
by the holders of not less than ten percent (10%) in principal amount of the
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 at any time by ten (10) days notice in
writing to the City Clerk and the majority in principal amount of the holders
and registered owners of the outstanding bonds at any time, with or without
cause, may remove the Trustee. In the event of a vacancy in the office of
~.
Trustee, either by resignation or by removal, the majority in principal
amount of the holders and registered owners of the outstanding bonds may
appoint a new Trustee, such appointment to be evidenced by a written
instrument or instruments filed with the City Clerk. If the majority in
principal amount of the holders and registered owners of the outstanding
bonds shall fail to fill a vacancy within thirty (30) days after the same
shall occur, then the City shall forthwith designate a new Trustee by a
written instrument filed in the Office of the City Clerk. The original
Trustee and any successor Trustee shall file a written acceptance and
agreement to execute the trusts imposed upon it or them 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
holders and registered 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. In the event of a change in the office of
Trustee, the old Trustee which has resigned or been removed shall cease to
be Paying Agent.
Section 15. The City covenants that it will take no 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 and
the Trustee convenant 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 (d) of the
Internal Revenue Code.
Section 16. That the Mayor is hereby directed to publish for one
insertion in a newspaper published in Jacksonville, Arkansas, and of general
circulation therein, this Ordinance, to which shall be attached a notice signed
by him in substantially the following form:
NOTICE
Notice is hereby given that the City Council of the City of Jacksonville,
Arkansas, has adopted the Ordinance hereinafter set out; that the City con-
templates the issuance of Water and Sewer Revenue Bonds described in the
Ordinance; that any person interested may appear before the Council on the
day of , 1979, at o'clock .m., at the
usual meeting place of the Council held in Jacksonville, Arkansas, and present
protests. At such hearing all objections and suggestions will be heard, and
the Council will take such action as is deemed proper in the premises.
Dated this day of , 1979.
4 d '-./
r- I'~
Mayor
'fl.
Section 17. That the provisions of this Ordinance shall constitute
a binding contract between the City and the holders and registered owners of
the outstanding bonds and coupons, and the City will at all times strictly
adhere to the terms and provisions hereof and fully discharge all of its
obligations hereunder. Subject to the terms and provisions contained in this
Section and not otherwise, the holders of not less than seventy-five percent
(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 te1.111S 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 extention 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 lien upon or a pledge of revenues other than as expressly
authorized by the appropriate provisions of this Ordinance as now adopted, or
(d) a privilege of priority of any bond or bonds over any other bond or bonds,
or (e) a reduction in the aggregate principal amount of the bonds required
for consent to such supplemental ordinance.
Section 18. That this Ordinance shall not create any right of any
kind and no right of any kind shall arise hereunder pursuant to it until the
bonds shall be issued and delivered.
Section 19. That the provisions of this Ordinance are hereby declared
to be separable and if any provisions shall for any reason be held illegal
or invalid, such holding shall not affect the validity of the remainder of
the Ordinance.
Section 20. That all ordinances, resolutions and parts thereof in
conflict herewith are hereby repealed to the extent of such conflict.
Section 21. That it is hereby ascertained and declared that the present
water and sewer facilities are inadequate and by reason thereof there exists a
hazard to the life, property and welfare of the inhabitants of the City. The
herein authorized improvements are immediately necessary to alleviate the
hazard and can be accomplished only by the issuance of the bonds herein authorized.
It is, therefore, declared that an emergency exists, and this Ordinance, being
necessary for the immediate preservation of the public peace, health and safety,
shall take effect and be, in force from and after its passage.
PASSED: 1~ / .L , 1979.
f d-
ATTESTED:
APPROVED:
1Ib.lIMt~.. ~~~
Ci ty Cle:t&l
(SEAL)
p.
dP
Mayor .t' '
APPROVED AS TO FORM:
(~"'-,~...,..,.,. ~
\....
\-~,J) ~
Pa~ G. Groce, City Attorney