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ORDINANCE NO, 1508 (##01-2014)
AN ORDINANCE AUTHORIZING AN AMENDED LEASE/ PURCHASE AGREEMENT
FOR THE 911 COMMUNICATION DIGITAL EQUIPMENT BY MODIFICATION OFA
SHORT TERM PROMISSORY NOTE WITH SECURITY PLEDGE; PROVIDING FOR
PA YMENT OF THE PRINCIPAL OFAND INTEREST ON THE NOTE; DECLARING AN
EMERGENCY; AND, PRESCRIBING OTHER MA TTERS RELA TING THERETO,
Whereas, the City Council of the City of Jacksonville, Arkansas (the "City'), has
determined it is in the best interest of its citizens through passage of Ordinance No. 1438
(#26-2011) to purchase and install a digital 911 communication system during construction
and completion of the Public Safety Building on Marshall Road;
Whereas, the total cost of said Capital Improvement was estimated to be Two Million
Four Hundred Ninety-seven Thousand Five Hundred Twenty-six and 40/100 Dollars
($2,497,526.40). However, through budget restraints and additional costs applied, said
amount to complete the Lease/Purchase of all said equipment will require a slightly higher
total expenditure by the City;
Whereas, Motorola Solutions, Inc., the providing manufacturer of the digital
equipment installed, has provided a competitive rate for the additional equipment and costs
associated, and a competitive bidding process would be costly, counter-productive to City
emergency response operations, and will allow the City to complete payment of the
Lease/Purchase Agreement and maintain proper cash flow for continued operation of the
City; 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
OFIACKSONVILLE, ARKANSAS, THAT;
SECTION ONE, The City Council hereby finds that the digital 911
Communication System and Equipment/Capital Improvements purchased and installed in
the Public Safety Building will have a useful life of more than One (1) year and that the
principal amount of the accompanying Promissory 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
ORDINANCE NO. 1508 (#01-2014)
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hereby authorized to execute and deliver, by and on behalf of City, an Amended Promissory
Note with Security Interest in favor of Motorola Solutions, Inc. in the maximum increased
amount not to exceed Two Million Six Hundred Sixty-one Thousand Four Hundred
Thirty-four and 68/100 Dollars ($2,661,434.68) for the purpose of financing the
Lease/Purchase of the City's digital 911 Communication System as purchased and installed
at the Public Safety Building and already in use. The Amended 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 Two Million Six Hundred Sixty-one Thousand Four Hundred
Thirty-four and 68/100 Dollars ($2,661,434.68), and the outstanding principal balance of the
Note shall bear interest at the fixed interest rate of Three and 243/1000 Percent (3.243%).
The Note shall mature and be payable in full on the date of December 15, 2018, which is no
more than Sixty (60) months from the issuance date of the Amended Note (the "Maturity
Date"). Payments on the Note shall be as follows: (i) One (1) payment of One Hundred
Forty-seven Thousand Seven Hundred Fifty Dollars ($147,750.00); (ii) Thirty-four (34) equal
monthly installments of principal and interest at the rate of Twenty-seven Thousand Eleven
and 26/100 Dollars ($27,011.26) shall be due and payable on the same day of each
successive month thereafter equal to that amount, then Twenty-four (24) equal monthly
installments of principal and interest at the rate of Sixty-six Thousand Four Hundred Seventy
and 91/100 Dollars ($66,470.91) 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 Amended Note is due in full upon the Maturity Date, and it
shall replace the Original Note to include all debt incurred by the City under this obligation.
In no manner does this Ordinance authorize debt to exceed Two Million Six Hundred
Sixty-one Thousand Four Hundred Thirty-four and 68/100 Dollars ($2,661,434.68) for the
purpose of completion of the purchase and installation of said Capital Improvement.
As security for the performance of the obligations of City pursuant to the Amended
Note, there is authorized the execution by the Mayor and City Clerk and delivery of a Security
Interest Paragraph granting unto and in favor of Motorola Solutions, Inc. (as Secured Party)
a prior lien upon the 911 Digital Communication Equipment involved in the Lease/Purchase.
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 Motorola 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
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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
Amended Note is outstanding, a copy of said Audit Report shall be furnished to Motorola
upon request.
SECTION SIX, City agrees to prepare and adopt a Budget for each fiscal
year in accordance with Arkansas law and to furnish Motorola 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, and such a provision was included in the approved 2014
budget through passage of Ordinance 1507 (#38-2013).
SECTION SEVEN, If there be any default in the payment of the principal of
or interest on the Amended 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
Motorola, 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. Motorola
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 Motorola with respect thereto. No delay or omission of Motorola 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 Motorola 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, Motorola shall be entitled to recover from City all costs of such proceeding,
including reasonable attorneys' fees.
SECTION EIGHT, The terms of this Ordinance, the Amended Note, and the
Security Agreement shall constitute a contract between City and Motorola Solutions, Inc.,
and no variation or change in the undertaking herein set forth shall be made while the
Amended Note is outstanding, except as may be agreed in writing as between City and
Motorola Solutions, Inc.
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,
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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 Amended
Note to be "private activity bonds" within the meaning of Section 141 of the Code. The
Amended 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 Fifteenth (15th) day of the
Second (2"d) calendar month after the close of the calendar quarter in which the Amended
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.
APPROVED AND ADOPTED THIS ( '� DA Y OF JANUAR Y, 2014.
CITY OFJACK50_1VVILLE, ARKANSAS
Y ALE764ER, MAYOR