1583_ ORDINANCE NO. 1583 (#05-2018)
AN ORDINANCE AUTHORIZING .THE ISSUANCE AND SALE OF
FOURTEEN MILLION TWD HUNDRED EIGHTY-SEVEN THOUSAND
TWO HUNDRED SIXTY-THREE AND 94/200 DOLLARS
($14-287,263,94) OF A !NATER CAPITAL IMPROVEMENT
REVENUE REFUNDING BOND, SERIES 20181 BY THE CITY OF
JACKSONVILLE; ARKANSAS FOR THE PURPOSE OF REFUNDING
THE CITY'S OUTSTANDING WATER CAPITAL IMPROVEMENT
REVENUE BOND, SERIES 2011; PROVIDING FOR PA YMENT OF
THE PRINCIPAL AND INTEREST ON THE SERIES 2418 BOND;
AUTHORIZING EXECUTION AND DELIVERY OF A BOND
PURCHASE AGREEMENT PROVIDING FOR SALE OF THE SERIES
2018 BOND; AUTHORIZING AN AMENDED AND RESTATED
MORTGAGE AND SECURITY AGREEMENT; PRESCRIBING OTHER
MATTERS RELATING THERETO; AND, DECLARING AN
EMERGENCY
WHEREAS, the City of Jacksonville, Arkansas (the "City"), a City of the First class,
presently owns and operates water treatment, storage and distribution facilities as. part
of the City's Water System, known as Jacksonville Water Works (the "System"
WHEREAS, the City is authorized and empowered under the provisions of the
Constitution and laws of the State of Arkansas; including particularly Amendment 65
and ACA § 14-164-401 et. seq. (Reel. 1998 & 2015 Supp.) (as. from time to time
amended, the "Act") to. issue and sell its water revenue. bonds for the purpose of
financing and refinancing the cost of improvements to the System;
WHEREAS, pursuant to the provisions of Ordinance No. .1428 .(#16-2011) of the
City, adopted and approved on October 6., 2011, the City has: previously issued its
Water Capital Improvement Revenue Bond; Series 2011 (the "Series .2011 Band"), in
the original principal amount of Twenty-five Million Dollars ($251000,000.00.);
.WHEREAS, in order to secure funds .necessary to refund and redeem the. Series
2011..Bond. in whole, .the City has made arrangements for the issuance and sale of its
Water Capital Improvement Revenue Refunding Bond, Series 2018,. in the aggregate
principal amount of. Fourteen Million Two Hundred Eighty-seven Thousand Two Hundred
Sixty-three and 94/100 Dollars ($14;287,253.94) (the "Series 2018 Band'% to the
Arkansas Development Finance. Authority, as purchaser (the "Bondholder'% at a price of
par; which Series 2018 Bond shall bear interest at the rate of One Half of One Percent.
(0.5%) per annum, pursuant to a Bond Purchase Agreement (the "Bond. Purchase
Agreement" j among the City, the Bondholder and the Arkansas Natural Resources
Commission (the "Commission' };
WHEREAS, the City will also be required to pay to the Arkansas. Development
Finance Authority, as servicer with respect to the Series 2018. Bond (the "Authority"), a
1
ORDINANCE NO, 1583 (#05-2018)
Page Two
semiannual servicing fee equal to One Percent (1.00%) per annum of the outstanding
principal amount of the Series.20.18 Bond (the "Servicing Fee"}; and,
WHEREAS the City will pledge Water Works revenues and deliver an Amended. and
Restated Mortgage and Security Agreement to secure repayment of the Series 2018 Bond.
NOW, THEREFORE, BE IT ORDAINED BY THE CI7Y COUNCIL OF THE
CITY OF JA CKSON VILL Et ARKANSAS THAT;
SECTION ONE; The sale to the Bondholder of the City's Series 2018
Bond in the principal amount of Fourteen Million Two Hundred Eighty-seven Thousand
Two Hundred Sixty-three and 94/100 Dollars ($14,287;253,94) at a price of par, such
Series 2018 Bond to bear interest at the rate of One Half of One Percent (0.50%) per
annum. and to be subject to a Servicing Fee of One. Percent (1.00%) per annum and
otherwise be subject to the terms and provisions hereafter in this Ordinance set forth in
detail be and is hereby approved. The sale shall be accomplished by exchange of the
Series 2018 Bond for the Series 2011 Bond currently owned by the. Bondholder. The
Series 2011 Bond shall then be cancelled by the City. The Mayor is hereby authorized and
directed to execute and deliver the Bond Purchase Agreement on behalf of City .and to
take all action required on the part of City to fulfill its obligations under the Bond Purchase
Agreement. The Bond Purchase Agreement is hereby approved in substantially the form
submitted to this meeting with such changes as may be approved by the :Mayor, his
execution to constitute complete evidence of such approval,
SECTION 'MO: The City Council hereby finds and declares that the
period of usefulness of the System after the refunding of the Series 2011 Bond will be
more than Twenty (20) years, which is Longer than the term of the Series 2018 Bond.
SECTION THREE: Linder the authority of the Constitution and laws of the
State of Arkansas, including particularly Amendment 55 to the Constitution of the State of
Arkansas and the Act, the City of Jacksonville, Arkansas Water Capital Improvement
Revenue Refunding Bond, Series 2018 (the "Series 2018 Bond"), is hereby authorized to
be issued in the total principal amount of Fourteen Million Two Hundred Eighty-seven
Thousand. Two Hundred Sixty-three and 94/100 Dollars ($14,287,263.94), the proceeds
of the sale of which are necessary to provide sufficient funds to refund and redeem the
Series 2011 Bond in whole..
2
ORDINANCE NO. 1583 (#05-20I8)
Page .Three
The Series 2018 Bond shall bear. interest at the rate of One Half of One Percent. (0.5%)
per annum and shall be subject to a Servicing Fee of One Percent (1.00%) per annum based
upon a Three Hundred Sixty (350) day year of Twelve (12) consecutive Thirty (34) day months
compounded semiannually. The: Series 2018 Bond.shall be dated the date of its delivery to the
Bondholder, Principal, interest and the Servicing Fee shall be payable on April 15, 20.8,. and on
each April 15 and October 15 thereafter until the unpaid principalis. paid..in full as follows:
Date --Principal
1.000I0
Servicing Fee
0.5.000/0
Interest
Payment
Amount
Apr 15 2018.
$.747,714.94
$71 448:06
$35,718.04
$854,868.04
Oct 15, 20.18
753/321.00
67,710-00
33 849.00
854t868-00
-Apr 15, 2019
758,971.00
63;944.00
31,966.40
854;868.04
Oct 15, 2019
764f664.00
50,149.00
30,068.00
854,86.8.04
A r 15 2020
-770,399.00
56,326-00
28 156.00
854i868-00
Oct 15 2020
776 177.00
:52,474.00
26,23 .00
854,868.00
Apr i5 2021
781_ft;998.40
48 593.0.0
24;290.00
854 868.00
Oct 15, 2.42.1
787 863.00
44,.683.00
22,335.00
854,868:00
A r 15 2022
793 772.00
40F744.00
20,365.00
854,8.68:00
Oct 15, 2022
799;725.00
35,775.00
18,381.00
854,868.00
A r 15 2023
805,723.40
32,777.00
1.6,382.00
854,86.8.00.
Oct 15 2023
811 766.40
28,748.00
14 367.00
854,868.04
Apr 15 2024
817 854.00
24t690. 0.0
12;338.00
854f868.00
Oct 15, 2024
:823,9.88.00
20,600.00
10,293.40
854,868.00
A r 15, 2025
830,168.00
16,481.00
8,233.00.854,868.00
Oct 15 2025
836;394.00
12 334.00
6,158.00
854,868.00
_8 r 15, 2026
842,667.00
8,148.00
4,067:00
854,M8.00
Oct 15, 2026__
784,099.00
3,935.00
1,960.00
7891W9.00
The Series. 2018 Band shall be issued in the form of a single typewritten bond,
registered as to both principal and interest, payable to the Bondholder, or registered
assigns; as set forth hereinafter in the bond form, and shall be numbered R18=1.
Payment of principal and interest shall be by check or draft mailed to the.
Bondholder at its address shown on the registration books of the City which shall be
maintained by the City Clerk or his/her designee as Bond Registrar, without
presentation or surrender of the Series 2018 Bond (except upon final payment), and
such payments shall discharge the obligation of the City to the extent thereof. The
City Clerk or his/her designee shall keep a payment record and make proper notations
thereon of all payments of principal and interest.
.3
ORDINANCE NO1583 (#05-2018)
Page Four
Payment of principal and interest shall be in. any coin or currency of the United
States of America which, :as at the time of payment, shall be legal tender for the
payment. of debts due the United States of America.. When the principal of and
interest on the Series 2018. gond has been fully paid, it shall be delivered. to the City
:Clerk.and shall be canceled.
SECTION FOUR. -The Series 2018 Bond shall be executed on .behalf of
the City by its Mayor and City Clerk and. shall have impressed thereon the Seal of the City.
In order t0l pay the principal of and interest on the. Series 2018 Bond and the Servicing Fee
in connection therewith; there is hereby pledged. all of the revenues derived. from the.
operation of the Jacksonville Water Works the "Revenues"). The City and Water
Commission covenant and agree that all Revenues will be accounted for separately as
special funds on the books of the System and receipts of said Revenues will be deposited.
and will be, used solely as provided herein. The Series 2418 Bond is not a general
obligation of the City but is a special obligation,. the principal of and the interest on which,
and the Servicing Fee in connection therewith, are secured by a pledge of the Revenues
of the System.. The .principaI of and interest on the Series 2018 Bond. shall not constitute
an indebtedness of the City within the: meaning of any constitutional or statutory debt
limitation or restriction.
SECTION FIVE; The Series 2018 Bond. shall. be in substantially the
following form, and the Mayor and City Clerk are hereby authorized and directed to
make all the recitals contained therein:
a
ORDINANCE NO 1583 (#05-2018)
Page Five
Registered
No. R1.8-1
United States of America
State of Arkansas
County of Pulaski
City of Jacksonville, Arkansas
Water Capital Improvement Revenue. Refunding Bond
Series .20 18
Registered Owner: ARKANSAS DEVELOPMENT FINANCE AUTHORITY
Registered
$14,287,263.94
Principal Amount: FOURTEEN MILLION TWO HUNDRED EIGHTY SEVEN. THOUSAND
TWO HUNDRED SIXTY THREE DOLLARS AND NINETY FOUR CENTS
($14,2871263.94)
Know.All .By These Presents:
That the City of Jacksonville, Arkansas, by and through the Jacksonville Water
Works (the "City"), hereby acknowledges itself to owe and for value received promises to
pay to the. order of the Arkansas' Development Finance Authority or registered assigns, but.
solely from the special fund provided therefor as hereinafter set forth, in lawful money of
the United States of America, the Principal Amount shown above, and to pay in like coin or
currency interest thereon at the. rate of One Half of One Percent (0.5%) per annum from
the date of each advance. A servicing. fee of One Percent (1.00%) per annum (the
"Servicing Fee` } shall also be. payable by the City to the Arkansas Development Finance
Authority or its successor in the same manner and upon. the same dates as interest hereon.
5
DRDrNANCE NO. 1583.(#05-2018)
Page Six
Principal, interest. and the. Servicing Fee `shall be payable on April 15, 20.18, and.
on each April 15 and October 15 thereafter until the unpaid principal is paid in full as
follows:
Date
Principal
14000/0
5ervicin Fee
0.5000/0
Interest
Payment
Amount
Apr 15, 2018
X747,714.94
$71,448:463.5,71$.40
$854;868.44
Oct 15; 2018
753,321.00.
67,710.00
33 849.00
854,868.00
A r 15 2019
758,971.00
63,944.00
31 966.40
854868.00
Oct 15 2019
764 664.00
60149-00
30,068:00
854 868.00
---Apr 15, 2020
770 399.00
56 326.00
.28,156.00
854;868.00
Oct 15, 2020
.776,1.77.00
52.474.00
26,230.00
854,868:04
Apr 15, 2021
781,998.00
48,593:00
24,290.00
854;858.00
Oct 15, 2021
.787,853.00
44,683.00
22,335-00
854,86.8.00
Apr 15 .2022
793,772.00
40,744.04
24,365.40
0
Oct 15:2022
799,725.00
3.6,775.00.
18F381.00
_854z868.0
W4,_068.00
A r 15 2023
805 723.00
32 777.00
15,382.00
854 868.04
Oct 15 2023_
811,766.00
28JMQ
14 367..04
854,868.00
A r 15, 2024
817,854.00
12,33.8.0.0
854,868.00
Oct 15, 2024
823 988.40
_24,690.00
20,600.00
10,293:00
854 868.40
A r 15; 2025
830,1.68.40
1.6,481.00
8,233.00
854,868.00
Oct.15, 2025
836,394.00
12,330.00
6,158:4.0
854;868:04
A r :15, 2026
842,667.04
8,148.00
4,457.00
85.4,868.00
Oct 15, 2026
784,099.Q4
.3 935.00
1,964.00
789,979.00
Payments of principal and interest due hereon shall be made except for final
payment, without presentation and surrender of this bond; directly to the Registered
Owner at its address shown on the registration book of the City maintained by the City
Clerk or her designee as Bond Registrar, and .such payments shall fully' discharge
the obligation of the City to the extent of the payments so made.
This bond is issued for the purpose of refunding and redeeming in whole the
City's outstanding Water Capital Improvement Revenue. Bond, Series 2011, and is
issued pursuant to and in full compliance with the Constitution and laws of the State of
Arkansas, including particularly .Amendment No. 65 to the Constitution of the State of
Arkansas ("Amendment 65") and Arkansas Code Annotated Sections 14-164-401 ef.seq.
(Reel. 1998 & 2015 Supp.) (as from time to time amended; the "Act"), and pursuant to
Ordinance No: 1583 (##05-2018) of the City, duly adopted and approved on the 15th day
of March, 2018 (the "Authorizing Ordinance"). Reference. is hereby made to the
6
ORDINANCE NO 1583 (#05-2018)
Page Seven
Authorizing Ordinance for the details of the nature and extent of the security and of the
rights and obligations of the City and; the Registered Owner of this bond.
This bond may be assigned only upon the written approval of the Arkansas
.Natural Resources Commission (the `'Commission"), and in order to effect such
assignment, the. assignor shall promptly notify the City Clerk by registered mail, and the
assignee shall surrender this bond along with a written assignment and. written approval
of the Commission to the City Clerk for transfer on the registration records.. Every
assignee shall take this bond subject to. all payments and prepayments of principal and
interest (as reflected. on the. Payment Record maintained by the City Clerk or her
designee) prior to such surrender for transfer.
This bond may not be prepaid prior to its final maturity on October 15, 2026.
This bond does not.. constitute an indebtedness of the City or the State of
Arkansas within the meaning of any constitutional or statutory limitation or provision,
and the taxing power of the City is not pledged .to the payment of the. principal of acid
interest on this bond.
This bond is not a general obligation of the City, but is a special limited
obligation payable solely from the revenues -derived from the operation of the City's
water system (the. "Revenues"). The City has covenanted, and agreed that all
Revenues will be accounted for separately as special funds on the books of the City,
and receipts of said Revenues will be deposited and will be used solely as provided in
the Authorizing Ordinance. Pursuant to the Authorizing Ordinance, an amount of
Revenues sufficient .to pay principal and interest on this bond as due shall be set aside
monthly in a special. fund created for that purpose identified as the 2018 Bond Fuad.
The City has fixed and has covenanted and agreed in the Authorizing Ordinance to
maintain rates for System services which shall be sufficient at all times to provide for
the payment. of the reasonable expenses of operation and maintenance of the System,
to provide for the payment of principal and interest on all indebtedness to which
Revenues are pledged as. the same shall become due, and to. establish and maintain
any required debt service reserves. Reference is made to the Authorizing Ordinance for
a detailed statement of the mature and extent of the security; and the rights and
obligations of the City and registered owner of this bond.
This bond is issued with the intent that the laws of the State of Arkansas will
govern its construction.
No recourse. shall be had for the payment of the principal of or premium, if any;
or interest on this bond or for any claim based %thereon or upon any obligation,
covenant, or agreement contained in this bond or in the Authorizing Ordinance against
any past, present or future alderman officer or employee of the City,. or any alderman,
officer or employee of any successor of the City, as such, either directly or through
the City or any successor of the City, under any rule of law of equity, statute, or
VI
ORDINANCE NO. 1583 (#05:201$)
Page Eight
constitution. or by the enforcement of any assessment or penalty or otherwise, and all
such liability of any such alderman, officer or employee as such is hereby expressly
Waived and released as a condition of and consideration for the issuance of this bond.
IT IS HEREBY CERTIFIED, RECITED, AND DECLARED that all acts, conditions and
things required by the Constitution and statutes of the State of Arkansas to exist,
happen and be performed precedent to.and in the issuance of this bond do exist,: 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 or violate any
constitutional or statutory limitation of indebtedness; and that provision has been made
for the payment of the principal of and interest on :this bond, as provided in the
Authorizing Ordinance.
IN WITNESS WHEREOF, the City of Jacksonville,. Arkansas has caused this bond
to be executed in its name by the manual signatures of. its Mayor and City Clerk,
thereunto. duly authorize, and its corporate seal to be affixed hereto, all. as. of the
day of March, 2018.
CITY DFIACKSONVILLE, ARXANSA S
ATTEST
Susan L. Da vitt, City Clerk
Gary Fletcher, Mayor
:8
ORDINANCE NO. 1583.(#05 2018)
Page Nine
Date of Re istration Name of Re istered Owner Signature of Ci Clerk
RECORD OF PAYMENT OF ADVANCES
Date of Advance*
Amount of
Advance
Total Principal
Outstanding
Signature of Vice
President of Arkansas.
Development Finance
Authority
April 16, 2018
$14,287,263.94
$14,287,263.94
the date of each advance shall be the interest commencement date from which
the principal amount of such advance bears interest and from which the Servicing Feeis
Calculated.
9
ORDINANCE NO. 1583 (#05-2018)
Page Ten
SECTION SIM The City has heretofore fixed rates for services of the
System by: Ordinance No. 13.68 (#114009) adopted. and approved on April 16, 2009 (the
`.Rate Ordinance), which rates are hereby ratified and confirmed. The City covenants. and
agrees that the rates established by the Rate Ordinance will produce. Gross :Revenues at
least sufficient to pay monthly operation and maintenance expenses of the System, to .pay
the principal of and interest on all indebtedness to which Revenues are pledged as the
same become due, to pay the Servicing Fee as. the same becomes due, and to create and
maintain. any required debt service. reserves (collectively, the "Required Payments"), The
City covenants always to maintain rates for System services (including increases as
necessary) sufficient to provide for the Required Payments.
.SECTION SEVEN' None of the facilities or services afforded by the
System shall be furnished without a charge being made therefor. In the event that the
City or any department, agency, or instrumentality thereof shall avail itself of the
facilities and services afforded by the System, the reasonable value of the service or
facilities so afforded shall be charged against the. City or such department, agency, or
instrumentality .and shall be paid for as the charges accrue. The revenues so received
shall be deemed to be revenues derived from the operation of the. System and shall be
used and accounted for in the. same manner as the other revenues derived from the
operation of the System.
SECTION EIGHT, The City covenants that it will continuously operate
the. System. as. a revenue-producing undertaking and will not sell or lease the same, or
any substantial portion thereof, without the prior written approval of the Bondholder
and the Commission; provided, however; that nothing herein shall be construed to
prohibit the City from making such dispositions of properties of the System and such
replacements and substitutions for properties of the System as shall be necessary or
incidental to the efficient operation of the System as a revenue-producing undertaking.
SECTION NME; All revenues derived from the operation of the System
shall be paid irito a special fund which .is hereby established and designated the. "Water
Revenue Fund" {the "Revenue Fund"}. The revenues .so deposited in the Revenue Fund are
hereby pledged and shall be applied to the payment of the reasonable and necessary expenses
of operation, repair and maintenance of the System, to the payment of the principal at and.
interest on the Series 2018 Bond and to the providing of a Depreciation Fund, as hereafter set
forth.. The Revenue Fund, and the other special funds hereafter in this Authorizing Ordinance
provided for or referred to, shall .be maintained in such depositories of the City as shall from
time to time.be designated by the Jacksonville water Commission tttie "Water Commission'7,
10
ORDINANCE NO 1583 (#05-20I8)
Page Eleven
with all such depositories to hold membership in the Federal Deposit Insurance
Corporation (the "FDIC"), to be located in the State of Arkansas, and to have a capital
and surplus of not less. than Ten Million. Dollars ($10,000,000), and. with. all deposits in
any depository in excess of the amount insured by the FDIC to be secured by bonds or
other direct or fully guaranteed obligations of the United States of America unless
otherwise invested in. accordance with the provisions of Arkansas law.
SECTION TEN: There shall bepaid from the Revenue. Fund into a
fund which is hereby established and designated "Operation and Maintenance Fund, on
.or before the first business day of each month while the Series 2018. Bond is
outstanding, an amount sufficient to pay the reasonable and necessary monthly
expenses of operation; repair; and maintenance of the System for such month and from
which disbursements shall be made only for those purposes. Fixed annual charges such
as insurance premiums and the cost of major repair .and maintenance may be computed
and set. up on an annual basis, and One -Twelfth (1/12) of the amount thereof may be
paid into the Operation and Maintenance Fund each: month.
If in any month for any reason there shall be. a failure to transfer and pay the
required amount into the Operation and Maintenance Fund, the amount of any
deficiency shall be. added to the amount otherwise required to be transferred and paid
into said. Fund. in the next succeeding. month. If in any fiscal year a surplus shall be
accumulated in the Operation and Maintenance Fund over and above the amount which
shall be necessary to defray the reasonable and necessary cost of operation, repair, and.
maintenance of the°System during the remainder of the then current fiscal year and the
next ensuing fiscal year, such surplus may be transferred and deposited in :the ADFA
Water Bond Fund.. (hereinafter created or referred to) or to the Depreciation Fund
(hereinafter created or referred to) as the Water Commission may designate; provided,
however, that any such transfer into the ADFA Water Bond Fund shall be in addition to
all .other payments required to be made into such Fund, if any.
SECTION ELEVEN: (a) After making the monthly deposit .into the
Operation and Maintenance. Fund, there shall be transferred .and paid. from the Revenue
Fund (i) into a special fund, which is hereby established and designated "ADFA 2018
Water Capital Improvement Revenue Refunding Bond Fund" (the "ADFA Water Bond
Fund") the sums. in the amounts and at the times hereafter stated in subsection (b) for
the purpose of providing funds for the payment of the principal of and interest on the
Series 2018 Bond and the Servicing. Fees in connection therewith as the same become
due and (ii) into any water revenue bond fund. established in connection with the
additional bonds issued pursuant to Section Fifteen hereof on a parity of security with
the Series 2018 Bond, sums in the amounts and at times sufficient for payment of the
11
ORDINANCE NO 1583 (#05-2018)
Page Twelve
Principal of, premium, if any, and. interest on such additional Water revenue bonds and
the fees in connection therewith as the same become due, The ADFA Water Bond
Fund, and any water revenue bond funds established in connection with additional
bonds issued. on a parity of security therewith, shall hereafter be collectively referred to
as "Water Revenue: Borg Funds-"
(b} in orderto pay interest on the.Series 2018. Bond, there shall be deposited.
from moneys in the Revenue Fund, into the ADFA Water Bond Fund on. each April 15
and October 15 after the Series 2018. Bond is issued and delivered until and including
Dctober 15, 2026, the interest due on the Series 2018 Bond on such dates.
Commencing on the first business day of each month thereafter, there shall be
deposited from moneys. in the Revenue Fund into the ADFA Water Bond Fund an
amount equal to 1/6 of the amount of interest on and principal of the Series 2018 Bond
next due;
[c} If moneys in the Revenge Fund are insufficient to make the required
payment on or before the first business day of the following month into the ADFA Water
Bond Fund; then the amount of any such deficiency in the payment made shall be
added to the amount otherwise required to be paid into the ADFA Water Bond Fund.on
the first business day of the next month.;
(d) When the moneys held in the ADFA Water Bond Fund which represent
payments by the City and interest earnings thereon or proceeds of investments
therefrom (collectively, "City Funds") shall be and remain sufficient to pay in full the
principal of and interest. on the Series 2.018 Bond,. the City shall not be. obligated to
make any further payments .into the ADFA Water Bond Fund;
(e) All moneys in :the ADFA Water Bond Fund representing City Funds .shall .be
used .solely for the purpose of paying the principal of and interest on the Bond and the
City shall automatically receive.a credit for the amount of such City Funds on hand in
the ADFA Water Bond Fund and available for the payment of any principal and interest
currently due on an interest or principal payment date irrespective of whether the
Bondholder has applied or caused to be applied such funds on that. date for such
purpose.. The City shall receive .a credit for all earnings and income derived from the
investment of City . Funds each April 15 and. October 15 and such earnings and income
shall be credited against the next six monthly payments in substantially equal amounts;
and,.
(f) The Series 2018 Bond shall be specifically secured by a pledge of all
Revenues required to. be. placed into the ADFA Water Bond Fund.. This pledge in favor
of the Bond is hereby irrevocably made. according to the terms of this Ordinance, and
the City and its officers and employees shall execute, perform and carry out the terms.
thereof in strict conformity With the provisions. of this Ordinance.
12
ORDINANCE NO 1.583 (#05:2818)
Page Thi►teen
SECTION TWELM After making the payments and deposits described in
Section Eleven hereof, .there shall be paid from the Revenue Fund, the Servicing Fee to
the Authority. The Servicing f=ee shall be payable on each date. interest on the Series
2018 Bond is. due and shall be calculated on the same basis as interest on the. Series
2018 Bond. The payment of the Servicing Fee is expressly made subordinate to the
payment of the principal of and interest on the Bond.
SECTION THIRTEEN. The City shall assure that: (i) noir in excess of. Ten
Percent (10010) of the proceeds of the Bond is used for Private Business Use if, in
addition, the payment of more than Ten Percent (10%) of the principal or Ten. Percent
(10%). of the interest due on the Series 2018 Bond during the term thereof is, under
the terms of the Series 2018 Bond or any underlying arrangement, directly or indirectly
secured by any interest in property used or to be used for a Private Business Use or in
payments in respect of property used or to be used for a Private Business Use or is to
be derived from payments, whether or not to the City,: in respect of property or
borrowed. moneys used or to be used for a Private Business Use; and, (ff) that, in the
event that bath (A) in excess of Five Percent. (5016) of the proceeds of the Series 2018
Bond are used for a Private Business Use; and, (B) an amount.in excess of Five Percent
(5%) of the principal or Five Percent (5%) of the interest due on the Series 2018 Bond
during the term thereof is, under the terms of the Series 2018 Bond or any .underlying.
arrangement, directly or indirectly, secured by any interest in property used or to be
used for said Private Business Use or in payments in respect of property used or to be
used .for said Private Business Use or is to be derived from payments, whether or not to
the City, in respect of property or borrowed money used or to be used for said Private
Business Use, then said excess over said Five Percent..(5%..) of proceeds. of the Series
2018 Bond used for a Private Business Use shall be used for a Private Business Use
related to the .governmental use of the Improvements.
The City shall assure that not in excess of Five Percent (5%) of the proceeds of
the Series 2018 Bond are used, directly or indirectly, to make or finance a loan to
persons other than state or focal governmental units.
As used in this Section, "Private Business Use" means use directly or indirectly in
a trade or business carried on :by a natural :person or in any activity carried on by a
person other than a natural person, excluding, however, use by a state. or local
governmental unit and use as a member of the general public.
The City covenants that it will not enter into any wholesale water contracts with
non-governmental entities or modify existing wholesale water contracts with non-
governmental entities if such contracts or modifications of existing contracts will cause
a violation of this Section.
13
ORDINANCE NO.. 1553 (#05:2018)
Page Fou►teen
SEMON FOURTEEN: The. principal and interest. installments shall not. be
prepayable prior to maturity of the Series 2018 Bond on Dctober.15, 2025.
SECTION FIFTEEN: As long as `the Series 2018 Bond is outstanding, the
City shall not issue or attempt to issue any bonds having or claimed to be entitled to a
priority of lien on Revenues over the lien securing. the Series 2018 gond, including any
and all future extensions, betterments and improvements to the System. except as
provided in this Section.
The City may issue additional revenue bonds to finance or pay the cosi of
constructing extensions, betterments and improvements to the System or to refund
outstanding System Obligations having a priority on or on a parity with the lien on
Revenues in favor of the Series 2018 Bond if there shall have been procured and filed
with the City Clerk and. the Bondholder a statement by a certified public accountant not
in the: regular employ of the City ("Accountant") reciting the opinion that: (i) the.
Available Revenues (Available Revenues being gross Revenues. less operation and
maintenance expenses) for the fiscal year preceding the year in which such additional
bonds are to be issued were not less than One Hundred Ten (110%) of the average
annual debt service requirements (including principal, interest and servicing and
administrative fees.) on all outstanding debt of the System to which revenues are
pledged and. the bonds then proposed to be issued plus: the average annual Servicing
Fee; or, (ii) the Available Revenues for the fiscal year succeeding the year in which. such
additional. bonds are to be issued are projected to be sufficient in amount; taking in
consideration any enacted increase in.. Revenues, to be not less than One Hundred Ten
(110%) of the Total Annual Debt Service: requirements (including principal; interest.and
servicing and administrative fees) on all outstanding debt of the System to which
Revenues are pledged, and the bonds then proposed to be issued plus the .average
annual. Servicing Fee.
The additional bonds, the issuance of which is restricted and conditioned by this
Section, shall not be deemed to mean. bonds the security and source of payment of
which are subordinate and subject .to the priority of the Series 20.8 Bond and such
additional bonds may be issued without. complying with the terms..and. conditions of this
Section. The provisions of this.:Section may be waived by the holders of Seventy -Five
Percent (75%).1n principal amount of the Series 2018. Bond at any. time outstanding.:
SEC TION SIX TEEN. It is covenanted and agreed by the City with the
Bondholder, the Authority and: -ANRC that it will faithfully and punctually perform all
duties. with. reference to the System required by the Constitution and laws of the State
and by this Ordinance, including, without. limitation, the making and collecting of
reasonable and sufficient rates lawfully established for services rendered by the System,
14
ORDINANCE NO 2583 (#05-2018)
Page Fifteen
segregating Revenues and applying them to the respective funds maintained pursuant
to this Ordinance.
The: City covenants and agrees that the Bondholder shall have the protection of
all the provisions of the Authorizing Legislation, and that the City will diligently proceed
to enforce those provisions to the end of the Bondholder realizing fully upon its
security. And, if the City shall fail to proceed within Thirty {30} days after written
request shall. have been fled by the Bondholder, the Bondholder may proceed to
enforce all such provisions.
If there be any default in the payment of the principal of or interest on the Bond,
or if the City defaults in any ADFA Water Bond Fund requirement or in the performance
of any of the other covenants contained in this Ordinance, the. Bondholder may, by
proper suit, compel the performance of the duties of the officials of the City under the
laws of the State. In the case of a default in the payment of the principal of and
interest on the Series 2018 Bond, the Bondholder may 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 Bondholder 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 the Series 2018 Bond and interest outstanding and to apply
Revenues in conformity 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. No remedy herein conferred upon or reserved to the Bondholder is intended to be
exclusive of any other remedy or remedies herein provided or provided by .law, .and
every such remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or given by law. No delay or omission of the Bondholder 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 default or an acquiescence therein; and every
power and remedy given by this Ordinance to the Bondholder may be exercised from
time to time and as often as may be deemed expedient.
No waiver of any default shall extend to :or affect any other existing or any
subsequent default or defaults or impair any rights or remedies consequent thereon.
Any costs of enforcement of the Series 2018 Bond or of any provision of this Ordinance,
including reasonable attorney's Fees, shall be paid by the City. The Authority may -
enforce all rights and exercise all remedies available to the: Bondholder in the event the
Servicing Fee is not paid when due.
SECTION SEVENTEEN.• The terms of this Ordinance shall constitute a contract
among the City,.the Bondholder and ANRC and no variation or change in the
15
ORDINANCE NO 1583 (#05-2018)
Page Sixteen
undertaking herein set forth shall. be made .while the Series. 2018 Bond is outstanding
unless consented to in writing. by the Bondholder and ANRC.
SECTION EIGHTEEN: The City agrees that it .will keep proper records, books
and accounts relating to the operation of the System, which shall be kept separate from
all other records and accounts of the City, 'in which complete. and correct entries shall
be made of all transactionsrelating to the operation of the System in accordance with
generally accepted government accounting standards. Such books shall be available for
inspection by the Bondholder and ANRC, or the agent or the. representative of either, at
reasonable times and under reasonable circumstances. The City agrees to have these
records audited by an Accountant selected by the City at least once each year. The: City
agrees that it shall also furnish to the Bondholder and ANRC: (1) on or before Thirty
(30) days after the close of each fiscal year a statement. of the operations of the System
for the past fiscal year in form and content in the manner hereinafter specified; and, (2)
on .or before One Hundred Twenty (120) days after the close of each. fiscal year a copy
of the..audit report of the Accountant. The first report required by the last preceding
sentence shall contain at least the following information:
(a) Statement of income and expense for the System;
(b) Balance..sheet for the System;
(c) Schedule of insurance policies and fidelity bonds showing, with respect to
each policy and bond, the amount and nature of risk covered, the expiration date, and.
the name. of the insurer; and,
(d) Schedule of the number of customers (connected and unconnected to the
System) and showing. the rate schedule currently in effect.
The reports referred to above shall cover the operations of the System for all of
the last ensuing fiscal year. In the event the City fails or refuses to furnish or cause
such reports to be furnished, the Bondholder may have the reports.made, and. the cost
thereof shall be charged against the Operation and Maintenance. Fund.
SECTION NINETEEN; The City covenants and agrees that it will maintain
the System in good condition and operate it in an efficient mariner and at reasonable
cost. While the Series 2018 Bond is outstanding, the City agrees that to the. extent
comparable protection is not otherwise provided to the satisfaction of ANRC and the
Bondholder, it will insure, and at all times keep insured in a responsible insurance
company or companies selected by the City and authorized and qualified under the laws
of the State to assume the risk thereof, all above=ground structures of the System
against loss or damage thereto in amounts and against such risks as are customarily
insured against in connection With similar facilities and undertakings as the System. In
the event of loss, the proceeds of such insurance shall be applied solely inward the
16
ORDINANCE NO 1583 (#05-2018)
Page Seventeen
reconstruction, replacement or repair of the System, and in such event the City will,
with reasonable promptness, cause to be commenced and completed the
reconstruction, replacement and repair work. If such proceeds are more than sufficient
for such purposes, the balance remaining shall be deposited to the credit of the
Revenue. Fund, and If such proceeds shall be insufficient for such purposes, the
deficiency shall be supplied, first, from moneys in the Depreciation Fund, if .any, second,
from moneys in the Operation and Maintenance Fund, and third, from available moneys
in the Revenue Fund. Nothing herein shall. be construed as requiring the City to expend
any funds for reconstruction, replacement or repair of the System or for operation and
maintenance of the System or for premiums on its insurance which are derived from
sources other than insurance proceeds or Revenues, but nothing. herein shall be
construed as preventing the City from. doing so.
SECTION TWENTY., There shall be a statutory mortgage lien upon the
water facilities of the System (including all extensions, improvements and betterments
now or hereafter existing) which shall exist in favor of the Bondholder, :and such water
facilities shall remain subject to such statutory mortgage. lien until payment in full of the
interest on and principal of the Series 2018 Bond. The statutory mortgage lien shall be
evidenced by an Amended and Restated Mortgage and Security Agreement (the
"Mortgage"), executed and delivered by the City, which Mortgage amends and restates
that certain Mortgage and Security Agreement dated.as of November 29, 2011.., and
recorded in the office of the Circuit/County Clerk. of Pulaski County, Arkansas on
November 29, 2011. The Mortgage is hereby approved in substantially the form
submitted to. this meeting with such changes as may be approved by the Mayor,. his
execution to constitute conclusive evidence of such approval,
SECTION TWENTY-ONE: The City agrees that the Bondholder may pledge the
Series 201.8 .Bond as security for the ADFA Bonds, and the. ADFA Trustee and/or the
municipal bond insurer for the ADFA Bonds may exercise any rights and remedies
available to the Bondholder under this Ordinance or the Agreement while the Series.
2018 Bond is pledged and/or the ADFA Bonds are insured. In addition, the City agrees.
that while the Series 2018 Bond is pledged and/or the. ADFA Bonds are insured, copies
of all financial information shall be furnished to the ADFA Trustee and/or the municipal
bond insurer.
SECTION TWENTY-TWO: Continuing Disclosure. In addition to the City's
responsibility to provide. financial information and operating data to ANRC under the
regulations of ANRC, the. City agrees that if ADFA notifies the City that it is deemed to
be an "obligated person" with respect to the ADFA Bonds [which is the Series 2018.
Bond issued or which may be issued to ADFA to provide all or a portion of the funds for
17
ORDINANCE NO. 1583 (#05-2018)
Page Eighteen
the. Series 2818 Bond), as defined in Securities and Exchange Commission Rule 15c2-12
of the Securities Exchange Act of 1934,.as amended (17 CFR Part .248. 240.15c2-12)
("Rule l5c2-12") it will.: (i) provide to ADFA complete audited financial statements for
the System within One Hundred Twenty (120) days of the close of its fiscal year for
each year while the Series 2018` Bond. is outstanding; and, (H) provide certain additional
financial and operating data. (including financial information of the City) as requested by
.ADFA to the requirements of Rule 15c2-12.
SECTION TWENTY-THREE: The provisions of this Ordinance are. hereby
declared to be separable, and. if any provision shall for any reason be held illegal or
invalid:, it shall not affect the validity of the remainder of this Ordinance.
SECTION TWENTY-FOLM. Reference in this Ordinance to "Bondholder"
shall include the original Bondholder or any registered assign thereof.
SECTION TWENTY-FIVE; All Ordinances and parts thereof in conflict
herewith are hereby repealed to the extent of such conflict.
SECTION TWENTY-SIX- It is hereby ascertained and declared that. the
planning, design :and. construction of betterments and improvements must be
accomplished as soon as possible in order to provide debt. service revenues for the
System adequate for the needs of the City and its inhabitants, without which the life,
health, safety and welfare thereof are jeopardized, and that the issuance of the bonds
and the taking of the other action authorized by this ordinance is necessary for the
accomplishment thereof.. 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.
18
ORDINANCE NO. 1583 (#45-2818)
Page Nineteen
APPROVED AND ADOPTED THIS 15TH DA Y OF MARCH, 2018,
OF]ACKSONVILLE, ARKANSAS
Fletcher, Mayor
A
Susan Davi , City Clerk/Treasurer
19
ORDINANCE NO. 1583 (#05-2418)
Page Twenty
CERTIFICATE
The Undersigned, City Clerk/Treasurer of the City of Jacksonville, Arkansas (the
"City"), hereby certifies that the foregoing pages are a true and perfect copy of
Ordinance No. 1583 (#05-2018), adopted at a regular session of the City Council, held
at the regular meeting place of the City Council at 7:00 p.m., on the 15th day of March,
2018, and that the Ordinance is of record and now in my possession.
Given under my hand and seal on this day of Ia � , 2018.
Susan Davitt, Qty Clerk/Treasurer
NOTICE: Ordinance 1583 (#05-7018) was approved by the City Council of
the City of Jacksonville. Arkansas on March 15, 2018, and unless suit is filed
challenging the Ordinance within thirty (30) days from the date of adoption
of the Ordinance, it will be final and non -appealable.
20