1472 ORDINANCE NO, 1472(#3-13)
AN ORDINANCE AUTHORIZING A SHORT TERM LOAN AGREEMENT FOR
COMPLETION OF THE SHOOTING RANGE CAPITAL IMPROVEMENT PROJECT BY
ISSUANCE OF AN APPROPRIATE PROMISSORY NOTE WITH MORTGAGE
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 a Shooting Range
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Capital Improvement Project on real property owned by the City, to be located on Graham
Road, together with Improvement thereon (the "Capital Improvements");
Whereas,the total cost of the Capital Improvements is estimated to be Three Million
Dollars ($3,000,000.00), and the City has elected to finance the cost of said Capital
Improvements and to expend available City funds to pay for portions of said Capital
Improvements;
Whereas, through the competitive bidding process, the City obtained financing from
BancorpSouth ("Lender"), which has agreed to provide a short term loan of up to Three
Million Dollars ($3,000,000.00) of the cost of the Capital Improvements by issuing a
Promissory Note with Mortgage Security Pledge in favor of Lender in the principal amount
not to exceed Three Million Dollars ($3,000,000.00) (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 and qualifies as a bank qualified tax-exempt
obligation.
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 and
qualifies as a tax-exempt obligation.
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 and Mortgage in favor of Lender in the maximum principal amount up to
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ORDINANCE NO. 1472(#3-13)
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Three Million Dollars ($3,000,000.00) for the purpose of financing the cost of construction
and installation of said Capital Improvements. The Note, Mortgage, and other relevant
documents 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 Dollars
($3,000,000.00), and the outstanding principal balance of the Note shall bear interest at the
fixed interest rate of One and 80/100 Percent (1.80%). The Note shall mature and be
payable in full on a date certain, which is Sixty (60) months from the issuance date of the
Original Note (the "Maturity Date"). 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, and shall include all debt incurred by the City under this
obligation. In no manner does this Ordinance authorize this debt to exceed Three Million
Dollars ($3,000,000.00) for the purpose of financing the cost of construction and installation
of said Capital Improvement.
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 Mortgage Security Agreement granting unto and
in favor of Lender (as Secured Party) a lien upon the real property within Pulaski County
upon which the Shooting Range is to be constructed, as more particularly described as
follows:
The Southeast Quarter of Section 21, T-3-N, R-10-W, of Pulaski County,
Arkansas, containing One Hundred Sixty (160) acres, more or less.
Property a/k/a:Graham Road, Jacksonville, Arkansas
Pulaski Parcel No, 12R0570000700
As well, Lender is authorized to file One (1) or more financing statements to perfect
the lien granted by the Mortgage 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
transaction(s) contemplated by this Ordinance.
SECTION THREE, The Note and Mortgage documents 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
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ORDINANCE NO, 1472(#3-13)
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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(s)
is/are outstanding. Each budget shall make provision for the payment of debt service due
on the Note(s) in that fiscal year.
SECTION SEVEN. If there be any default in the payment of the principal of
or interest on the Note(s) 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 Mortgage
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 and Mortgage are
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
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ORDINANCE NO, 1472(#3-13)
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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.
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.
ROVED AND ADOPTED THIS 77-H DAY OF FEBRUARY, 2013.
C OF JACKSONVILLE,ARKANSAS
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GAR AriL HER, AYOR
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(SUSANL. DAVITT, C / CLERK ROa RT BA ;BURG, C A ORNEY