1448 000032
ORDINANCE NO, 1448(#10-12)
AN ORDINANCE AUTHORIZING A LOAN FOR THE COMPLETION OF CERTAIN
CAPITAL IMPROVEMENT PROJECTS BY ISSUANCE OF A PROMISSORY NOTE
WITH SECURITY PLEDGE; PROVIDING FOR PAYMENT OF THE PRINCIPAL OF
AND INTEREST ON THE NOTE;DECLARING AN EMERGENCY,AND, PRESCRIBING
OTHER MATTERS RELATING THERETO.
Whereas, the City Council of the City of Jacksonville, Arkansas (the "City"), has
determined it is in the best interest of its citizens to construct and install certain Capital
Improvements on real property owned by the City, including completion of the Public Safety
Building on Marshall Road, the addition of a Safe Room at the Jacksonville Senior Wellness
and Activity Center, and other Capital Improvement projects (the "Capital Improvements");
Whereas,the total cost of all such Capital Improvements is estimated to be Twelve
Million Four Hundred Thousand Dollars ($12,400,000.00), and the City has elected to finance
up to Three Million One Hundred Thousand Dollars ($3,100,000.00) of the cost of said
Capital Improvements and to expend available City funds to pay the remainder costs of said
Capital Improvements;
Whereas,through the competitive bidding process,the City can obtain financing from
First Arkansas Bank & Trust ("Lender") for up to Three Million One Hundred Thousand
Dollars ($3,100,000.00) of the cost of the Capital Improvements by issuing a Promissory
Note with Security Pledge in favor of Lender in the principal amount not to exceed Three
Million One Hundred Thousand Dollars ($3,100,000.00) (the "Note"); and,
Whereas, the City Council hereby finds and determines, in accordance with
information confirmed by the Mayor and Finance Director, that the obligations previously
issued under Amendment 78,together with the amount provided for herein,does not exceed
Five Percent (5%) of the assessed value of taxable property located within the City as
determined by the last tax assessment.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF JACKSONVILLE,ARKANSAS, THAT:
SECTION ONE. The City Council hereby finds that the Capital
Improvements to be constructed and installed will have a useful life of more than One (1)
year and that the principal amount of the Note, plus all other obligations heretofore incurred
by City under Amendment No. 78 to the Arkansas Constitution ("Amendment No. 78") and
ACA § 14-78-101 et. seq., does not exceed Five Percent (5%) of the assessed value of
taxable property located within the City as determined by the last tax assessment.
SECTION TWO. Under the authority of the Constitution and laws of the
State of Arkansas (the"State"), including, Amendment No. 78, the Mayor and City Clerk are
hereby authorized to execute and deliver, by and on behalf of City, a Promissory Note with
Security Interest in favor of Lender in the maximum principal amount of up to Three Million
One Hundred Thousand Dollars ($3,100,000.00) for the purpose of financing a portion of the
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ORDINANCE NO. 1448(#10-12)
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cost of construction and installation of said Capital Improvements. The Note shall be dated
within Sixty (60) days of the date of enactment of this Ordinance and shall be issuable only
as a fully registered Note without coupons. The Note shall evidence a multiple advance,
closed-end line of credit not to exceed Three Million One Hundred Thousand Dollars
($3,100,000.00), and the outstanding principal balance of the Note shall bear interest at the
fixed interest rate of Two and 249/1000 Percent (2.249%). The Note shall mature and be
payable in full on that date, which is Sixty (60) months from the issuance date of the Note
(the "Maturity Date"), and payments on the Note shall be as follows: (i) One (1) payment
equal to all accrued and unpaid interest,from the date of first disbursement, shall be due and
payable on that date which is Thirty (30) days from the date on which all funds have been
advanced on the Note; and, (ii) equal monthly installments of principal and interest shall be
due and payable on the same day of each successive month thereafter equal to that amount
which will fully and completely amortize the outstanding principal balance of the Note from
the date of the interest payment to the Maturity Date of the Note. The Note is due in full
upon the Maturity Date.
As security for the performance of the obligations of City pursuant to the Note,
coincident with the execution and delivery of the Note, there is authorized the execution by
the Mayor and City Clerk and delivery of a Security Agreement granting unto and in favor of
Lender (as Secured Party) a prior lien upon the General Revenue funds of City and any and
all deposit accounts into which said funds are maintained (the "Security Agreement").
Lender is authorized to file One (1) or more financing statements to perfect the lien granted
by the Security Agreement. As well, the Mayor and City Clerk are hereby authorized to
execute and deliver, by and on behalf of City, any and all other documents or instruments
which may be reasonably requested by Lender to finalize the transactions contemplated by
this Ordinance.
SECTION THREE, The Note shall be in such form as shall be approved by the
Lender and the Mayor and City Clerk.
SECTION FOUR. As provided in Amendment No. 78, the debt service
payments on the Note in each fiscal year shall be charged against and paid from General
Revenues of City for such fiscal year. For the purpose of making the debt service payments,
there is hereby and shall be appropriated to pay the Note an amount of General Revenues of
the City sufficient for such purposes in each fiscal year of City. City covenants that for each
fiscal year in which the Note is outstanding, General Revenues of City shall exceed the
amount of debt service payments due on the Note in that fiscal year.
SECTION FIVE. City has its financial statements audited annually by an
independent auditor in compliance with State of Arkansas requirements. While this Note is
outstanding, a copy of said Audit Report shall be furnished to Lender upon request.
SECTION SIX. City agrees to prepare and adopt a Budget for each fiscal
year in accordance with Arkansas law and to furnish Lender with a copy of the same by
January 31st of each year, or within Thirty (30) days of adoption thereof, while the Note is
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outstanding. Each budget shall make provision for the payment of debt service due on the
Note in that fiscal year.
SECTION SEVEN. If there be any default in the payment of the principal of
or interest on the Note or in the performance of any of the other covenants contained in this
Ordinance, Lender may, in addition to any other remedies available to Lender, by proper
suit, compel the performance of the duties of the officials of City under the laws of Arkansas.
No remedy conferred upon or reserved to Lender is intended to be exclusive of any other
remedy or remedies, and every such remedy shall be cumulative and shall be in addition to
every other remedy given under this Ordinance or by law. Lender may waive any default
which shall have been remedied before the entry of final judgment or decree in any suit,
action or proceeding instituted under the provisions of this Ordinance or before the
completion of the enforcement of any other remedy, but no such waiver shall extend to or
affect any other existing or any subsequent default or defaults or impair any rights or
remedies of Lender with respect thereto. No delay or omission of Lender to exercise any
right or power accrued upon any default shall impair any such right of 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 Lender may be exercised from time to time and as
often as may be deemed expedient. In any proceeding to enforce the provisions of this
Ordinance, Lender shall be entitled to recover from City all costs of such proceeding,
including reasonable attorneys' fees.
SECTION EIGHT. The terms of this Ordinance, the Note, and the Security
Agreement shall constitute a contract between City and Lender, and no variation or change
in the undertaking herein set forth shall be made while the Note is outstanding, except as
may be agreed in writing as between City and Lender.
SECTION NINE. City covenants that it shall not take any action or suffer or
permit any action to be taken or conditions to exist which causes or may cause the interest
payable on the Note to be included in gross income for federal income tax purposes,
including, without limitation, any action in violation of the applicable provisions of the
Internal Revenue Code of 1986, and the Regulations thereunder. 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
Capital Improvements or the proceeds of the Note, in such manner as to cause the Note to
be "private activity bonds" within the meaning of Section 141 of the Code. The Note is
hereby designated as a "qualified tax-exempt obligation" within the meaning of Section
265(b)(3)(B) of the Code. City 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 Note is issued, a statement as required by Section
149(e) of the Code.
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SECTION TEN. City does not reasonably anticipate that more than Ten
Million Dollars ($10,000,000.00) of "qualified tax-exempt obligations," as that term is
defined in Section 265(b)(3)(D) of the Internal Revenue Code of 1986 ("the Code"), will be
issued by it and any subordinate, superior, or affiliated entities during the calendar year in
which the Agreement is executed. City further hereby designates the obligation evidenced
by the Agreement as comprising a portion of the Ten Million Dollars ($10,000,00.00) in
aggregate issues to be designated as "qualified tax exempt obligations" eligible for the
exemption contained in Section 265(b)(3)(D) of the Code.
SECTION ELEVEN. The provisions of this Ordinance are hereby declared to
be separable and if any provision shall for any reason be held illegal or invalid, such holding
shall not affect the validity of the remainder of this Ordinance.
SECTION TWELVE. All Ordinances and Resolutions or parts thereof in conflict
herewith are hereby repealed to the extent of such conflict.
SECTION THIRTEEN. This Ordinance, because of the immediate need to
continue construction of the Capital Improvements addressed herein for public safety and
financial savings, requires that an emergency is hereby declared. As a result, this Ordinance
shall take effect immediately upon passage and publication, as provided by and subject to
the requirements of applicable law.
APPROVED AND ADOPTED THIS 28TH DAY OF JUNE, 2012.
CITY 0 JACKSONVILLE,ARKANSAS
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GARY FL; i E 4 YOR
ATTEST:
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SUSAN • , VITT, CITY c LERKr1' n
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ROB.RT E. BA iRG, C ATTORNEY