1937ORDINANCE NO. ig37
AN ORDINANCE PROVIDING FOR THE ISSUANCE OF
MUNICIPAL PORT REVENUE BONDS FOR THE PURPOSE
OF FINANCING THE COST OF CONSTRUCTING
IMPROVEMENTS TO THE CITY'S MUNICIPAL PORT
FACILITIES; PROVIDING FOR THE PAYMENT OF THE
PRINCIPAL OF AND INTEREST ON THE BONDS;
PRESCRIBING OTHER MATTERS RELATING THERETO;
AND DECLARING AN EMERGENCY.
WHEREAS, the City of West Memphis, Arkansas (the "City")
owns its municipal port (the "Port"), and related properties and
facilities, through its Port Authority (called "Port Authority" or
"Authority"); and
WHEREAS, the Authority has determined that improvements
must be constructed to the Port at a total estimated cost of
approximately $1,000,000, and has so reported to the City Council,
describing the needed improvements (which consist of the expansion
of road access, construction of a floating dock and related
facilities) (the "Improvements") , and it is proposed to finance the
cost by the use of port revenue bonds; and
WHEREAS, the Authority has requested and recommended that
the City Council take the necessary steps to issue and sell at this
time Port revenue bonds for the purpose of financing the
Improvements; and
WHEREAS, the City Council hereby finds and declares that
it would be in the best interest of the City and its inhabitants
for the Improvements to be accomplished and that Municipal Port
Revenue Bonds be issued as requested by the Authority; and
WHEREAS, the Series 2000 Bonds will be secured by pledges
of Port Revenues (defined herein) and Surplus Utility Revenues
(defined herein), subject to the terms hereof;
NOW, THEREFORE, BE IT ORDAINED by the City Council of the
City of West Memphis, Arkansas:
Section 1. The Improvements shall be accomplished. The
authority conferred by this Ordinance shall be carried out under
the control and supervision of, and all details in connection
therewith shall be handled by, the Port Authority.
Section 2. Under the authority of the Constitution and
laws of the State of Arkansas, including particularly Arkansas Code
of 1987 Annotated, Title 14, Chapter 164, Subchapter 4, and Title
14, Chapter 199, Subchapter 1, City of West Memphis, Arkansas
Municipal Port Revenue Bonds, Series 2000 (the "Series 2000
Bonds"), are hereby authorized and ordered issued in the total
f
principal amount of $1,125,000 for the purpose of financing the
costs of accomplishing the Improvements, including costs incidental
thereto, necessary reserves and certain costs of issuance of the
Series 2000 Bonds.
Section 3. The sale of the Series 2000 Bonds to Stephens
Inc. (the "Underwriter") pursuant to the terms and conditions set
out in the Bond Purchase Agreement relating thereto, which has been
submitted to and is before this meeting, at a price of
$1,102,781.25 plus accrued interest for Series 2000 Bonds bearing
interest, maturing and otherwise subject to the terms and
provisions hereafter in this Ordinance set forth in detail be, and
the same are hereby, approved and confirmed. The Bond Purchase
Agreement is approved and the Mayor is authorized to execute and
deliver it on behalf of the City. The Preliminary Official
Statement is hereby approved and the previous use of the
Preliminary Official Statement by the Underwriter in connection
with the sale of the Series 2000 Bonds is hereby in all respects
authorized, approved and confirmed, and the Mayor is hereby
authorized, empowered and directed, for and on behalf of the City,
to execute the Preliminary Official Statement and the final
Official Statement to be delivered to the Underwriter for use in
connection with the sale of the Series 2000 Bonds.
Section 4. The Series 2000 Bonds shall be dated July 1,
2000, with interest payable semiannually on January 1 and July 1 of
each year, commencing January 1, 2001, shall be numbered
consecutively from 1 upward, in order of issuance, and shall be in
the denomination of $5,000 or an integral multiple thereof. The
Series 2000 Bonds shall mature (on July 1) and bear interest as
follows:
Year Principal Interest Rate (~)
2005 $180,000 5.350
2010 230,000 5.600
2015 310,000 5.875
2020 405,000 6.250
The Series 2000 Bonds are subject to mandatory redemption
as set forth in Section 6 hereof.
Principal of and interest on the Series 2000 Bonds is
payable as follows:
2
Date Principal Interest Total
1/1/O1 $33,017.50 $33,017.50
7/1/01 $30,000 33,017.50 63,017.50
1/1/02 32,215.00 32,215.00
7/1/02 35,000 32,215.00 67,215.00
1/1/03 31,278.75 31,278.75
7/1/03 35,000 31,278.75 66,278.75
1/1/04 30,342.50 30,342.50
7/1/04 40,000 30,342.50 70,342.50
1/1/05 29,272.50 29,272.50
7/1/05 40,000 29,272.50 69,272.50
1/1/06 28,202.50 28,202.50
7/1/06 40,000 28,202.50 68,202.50
1/1/07 27,082.50 27,082.50
7/1/07 45,000 27,082.50 72,082.50
1/1/08 25,822.50 25,822.50
7/1/08 45,000 25,822.50 70,822.50
1/1/09 24,562.50 24,562.50
7/1/09 50,000 24,562.50 74,562.50
1/1/10 23,162.50 23,162.50
7/1/10 50,000 23,162.50 73,162.50
1/1/11 21,762.50 21,762.50
7/1/11 55,000 21,762.50 76,762.50
1/1/12 20,146.88 20,146.88
7/1/12 60,000 20,146.88 80,146.88
1/1/13 18,384.38 18,384.38
7/1/13 60,000 18,384.38 78,384.38
1/1/14 16,621.88 16,621.88
7/1/14 65,000 16,621.88 81,621.88
1/1/15 14,712.50 14,712.50
7/1/15 70,000 14,712.50 84,712.50
1/1/16 12,656.25 12,656.25
7/1/16 75,000 12,656.25 87,656.25
1/1/17 10,312.50 10,312.50
7/1/17 75,000 10,312.50 85,312.50
1/1/18 7,968.75 7,968.75
7/1/18 80,000 7,968.75 87,968.75
1/1/19 5,468.75 5,468.75
7/1/19 85,000 5,468.75 90,468.75
1/1/20 2,812.50 2,812.50
7/1/20 90,000 2,812.50 92,812.50
The Series 2000 Bonds shall be fully registered (as to
principal and interest), without coupons. Principal is payable at
the principal office of Community First Trust Company, Hot Springs,
Arkansas (the "Trustee" and "Paying Agent"). Payment of interest
shall be by check or draft mailed to the registered owner at the
address shown on the registration book of the City maintained by
the Trustee.
3
Section 5. The Series 2000 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 Series 2000 Bonds may
be signed by the facsimile signature of the Mayor and the facsimile
signature of the City Clerk. The Series 2000 Bonds, together with
interest thereon, shall be payable solely from the Pledged
Revenues, identified and described hereinbelow, which revenues are
hereby pledged and mortgaged for the equal and ratable payment of
the Bonds and shall be used for no other purpose than to pay the
principal, premium, if any, interest and Trustee's and Paying
Agent's fees on and in connection with the Bonds. The Series 2000
Bonds shall not constitute an indebtedness of the City within any
constitutional or statutory limitation.
The Series 2000 Bonds are secured, as to Surplus Utility
Revenues, on a parity of pledge with the City's outstanding
Municipal Airport Refunding and Improvement Revenue Bonds, Series
1991 (the "1991 Bonds") and the City's Municipal Airport Revenue
Bonds, Series 1999 (the "1999 Bonds").
The City reserves the right to issue Additional (parity)
Bonds, as set forth hereinbelow, and the term "Bonds" herein refers
to the Series 2000 Bonds and any such additional Bonds.
Only such Bonds as shall have endorsed thereon a
Certificate of Authentication substantially in the form set forth
in Section 6 hereof duly executed by the Trustee shall be entitled
to any right or benefit under the Authorizing Ordinance. Any such
certificate of the Trustee shall be conclusive evidence that such
Bond has been authenticated and delivered. It shall not be
necessary that the same officer of the Trustee sign the Certificate
of Authentication on all the Bonds.
If any Bond shall become mutilated or be destroyed or
lost, the City shall cause to be executed and the Trustee may
authenticate and deliver a new Bond of like date, number, maturity
and tenor in exchange and substitution for and upon cancellation of
such mutilated Bond, or in lieu of and in substitution for such
Bond destroyed or lost, upon the owner's paying the reasonable
expenses and charges of the City and Trustee in connection
therewith, and any applicable taxes or other charges, and, in the
case of a Bond destroyed or lost, its filing with the Trustee
evidence satisfactory to it that such Series 2000 Bonds were
destroyed or lost, and of its ownership thereof, and furnishing the
City and Trustee with indemnity satisfactory to them. The Trustee
is hereby authorized to authenticate any such new Series 2000 Bond.
In the event any such Series 2000 Bond shall have matured, the City
may pay the same without the surrender thereof.
Each Series 2000 Bond shall bear a CUSIP number, but the
absence of a CUSIP number shall not affect the validity of a Series
2000 Bond.
4
Any Series 2000 Bond may, at the option of the owner
thereof, be exchanged for a Series 2000 Bond or Bonds of any
authorized denomination or denominations, of the same maturity,
principal amount and interest rate as the Series 2000 Bond or Bonds
surrendered.
No charge shall be made to any owner of any Series 2000
Bond for the privilege of transfer or exchange, but any owner of
any Series 2000 Bond requesting any such transfer or exchange shall
pay any tax or other governmental charge required to be paid with
respect thereto. Except as otherwise provided in the immediately
preceding sentence, the cost of preparing each new Series 2000 Bond
upon each exchange or transfer and any other expenses of the City
or the Trustee incurred in connection therewith shall be paid by
the City.
In any case in which the date of maturity of interest on
or principal of the Series 2000 Bonds or the date fixed for
redemption of any Bonds shall be a day which is not a business day
(a "business day" being any day other than a Saturday or Sunday or
a day which in the State of Arkansas is a legal holiday or a day on
which banking institutions are authorized by law to close) payment
of interest or principal (and premium, if any) need not be made on
such date but may be made on the next succeeding day which is a
business day with the same force and effect as if made on the date
of maturity or the date fixed for redemption, and no interest shall
accrue for the period after the date of maturity or date fixed for
redemption.
Section 6. The Series 2000 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:
5
(Form of Bond)
REGISTERED (Face of Bond)
No.
UNITED STATES OF AMERICA
STATE OF ARKANSAS
COUNTY OF CRITTENDEN
CITY OF WEST MEMPHIS
MUNICIPAL PORT IMPROVEMENT REVENUE BOND
SERIES 2000
Interest Rate:
Dated Date:
Registered Owner:
Principal Amount:
_~
2000
REGISTERED
KNOW ALL MEN BY THESE PRESENTS:
That the City of West Memphis (the "City"), for value
received, hereby promises to pay, but solely from the source as
hereinafter provided and not otherwise, to the Registered Owner
shown above, upon the presentation and surrender hereof at the
principal office of Community First Trust Company, Hot Springs,
Arkansas, or its successor or successors, as Trustee and as Paying
Agent (herein referred to as the "Trustee"), on the Maturity Date
shown above, the Principal Amount shown above, in such coin or
currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts,
and to pay by check or draft interest thereon, but solely from the
source as hereinafter provided and not otherwise, in like coin or
currency, at the Interest Rate per annum shown above, payable
semiannually on the 1st days of January and July of each year,
until payment of such principal sum or, if this Bond or a portion
hereof shall be duly called for redemption, until the date fixed
for redemption, and to pay interest on overdue principal and
interest (to the extent legally enforceable) at the rate borne by
this Bond. Payment of each installment of interest shall be made
to the person in whose name this Bond is registered on the
registration books of the City maintained by the Trustee at the
close of business on the fifteenth day of the month (whether or not
a business day) next preceding each interest payment date (the
"Record Date"), irrespective of any transfer or exchange of this
Bond subsequent to such Record Date and prior to such interest
payment date. Interest is payable on the Series 2000 Bond from the
interest payment date next preceding the date on which this Series
2000 Bond is authenticated unless this Series 2000 Bond is
authenticated on an interest payment date, in which case it shall
bear interest from such date, or unless this Series 2000 Bonds is
authenticated prior to January 1, 2001, in which case it shall bear
Maturity Date:
CUSIP No.
6
interest from the Dated Date, or unless this Series 2000 Bond is
authenticated during the period from the Record Date (as somewhere
defined) to the next interest payment date, in which case it shall
bear interest from such interest payment date, or unless at the
time of authentication of this Series 2000 Bonds interest is in
default hereon, in which case it shall bear interest from the date
to which interest has been paid.
This Bond is one of an issue of City of West Memphis,
Arkansas Municipal Port Revenue Bonds, Series 2000, aggregating One
Million One Hundred Twenty-Five Thousand Dollars ($1,125,000), in
principal amount (the "Series 2000 Bonds"), and is issued for the
~, purpose of financing improvements to the City's Municipal Port (the
"Port"), paying costs incidental thereto, funding necessary
reserves and paying costs of issuance of the Series 2000 Bonds.
The Series 2000 Bonds are issued pursuant to and in full
compliance with the Constitution and laws of the State of Arkansas,
including particularly Title 14, Chapter 164, Subchapter 4 and
Title 14, Chapter 199, Subchapter 1 of the Arkansas Code of 1987
Annotated and pursuant to an ordinance of the City, duly adopted
and approved (the "Authorizing Ordinance"), and do not constitute
an indebtedness of the City within any constitutional or statutory
limitation. The Series 2000 Bonds are not general obligations of
the City but are special obligations payable from the revenues
derived from the operation of the Port. An amount of Port revenues
sufficient to pay the principal of and interest on the Bonds has
been duly pledged and set aside for that purpose. In addition, the
Series 2000 Bonds are secured by a pledge of Surplus Utility
Revenues, as defined and set forth in the Authorizing Ordinance.
Reference is hereby made to the Authorizing Ordinance for a
detailed statement of the terms and conditions upon which the
Series 2000 Bonds are issued, of the nature and extent of the
security for the Series 2000 Bonds, the conditions for the issuance
of additional (parity) Bonds and the rights and obligations of the
City, the Trustee and the holders of the Series 2000 Bonds.
The City has outstanding certain Municipal Airport
Refunding and Improvement Revenue Bonds, Series 1991 (the "1991
Bonds") and the City's Municipal Airport Revenue Bonds, Series 1999
(the "1999 Bonds"). The Series 2000 Bonds are secured, as to
Surplus Utility Revenues, on a parity of pledge with the City's
outstanding 1991 Bonds and 1999 Bonds.
(REFERENCE IS HEREBY MADE TO FURTHER PROVISIONS OF THIS
BOND ON THE REVERSE SIDE HEREOF WHICH HAVE THE SAME EFFECT AS IF
SET FORTH IN THIS PLACE.)
IN WITNESS WHEREOF, the City of West Memphis, Arkansas
has caused this Series 2000 Bond to be executed by its Mayor and
City Clerk, their manual or facsimile signatures thereunto duly
7
authorized, and its corporate seal to be impressed, lithographed or
imprinted on this Series 2000 Bond.
ATTEST:
CITY OF WEST MEMPHIS, ARKANSAS
By
City Clerk
(SEAL )
Mayor
(Reverse Side of Bond)
CITY OF WEST MEMPHIS, ARKANSAS
MUNICIPAL PORT REVENUE BOND,
SERIES 2000
The Series 2000 Bonds or portions thereof may be redeemed
at the option of the City, in whole or in part, in integral
multiples of $5,000, from funds from any source, in inverse order
of maturity (and by lot within a maturity in such manner as the
Trustee shall determine) in whole on any date and in part on any
interest payment date on and after July 1, 2005, at redemption
price (equal to the principal amount being redeemed plus accrued
interest to the redemption date.
The Series 2000 Bonds are subject to mandatory redemption
prior to maturity, selected by lot (determined by any method chosen
by the Trustee), at a price equal to the principal amount being
redeemed plus accrued interest to the date of redemption, on July 1
of each year as follows:
Bonds Due 2005 Bonds Due 2010
Year Principal Amount Year Principal Amount
a 2001 $30,000 2006 $40,000
2002 35,000 2007 45,000
2003 35,000 2008 45,000
2004 40,000 2009 50,000
2005 (maturity) 40,000 2010 (maturity) 50,000
Bonds Due 2015 Bonds Due 2020
Year Principal Amount Year Principal Amount
2011 $55,000 2016 $75,000
2012 60,000 2017 75,000
2013 60,000 2018 80,000
2014 65,000 2019 85,000
2015 (maturity) 70,000 2020 (maturity) 90,000
8
The Series 2000 Bonds are subject to mandatory redemption
prior to maturity, in part, in inverse order of maturity (and by
lot within a maturity, in such manner as the Trustee shall
determine) from proceeds of the Series 2000 Bonds not needed to
accomplish the Improvements, at any time, at a price of par plus
accrued interest to the date of redemption.
Notice of redemption identifying the Series 2000 Bonds or
portions thereof (which shall be $5,000 or a multiple thereof) to
be redeemed shall be given by the Trustee, not less than thirty
( 3 0 ) nor more than s ixty ( 6 0 ) days prior to the date f fixed f or
redemption, by mailing a copy of the redemption notice by first
class mail, postage prepaid, to all registered owners of Series
2000 Bonds to be redeemed. Failure to mail an appropriate notice
or any such notice to one or more registered owners of Series 2000
Bonds to be redeemed shall not affect the validity of the
proceedings for redemption of other Series 2000 Bonds as to which
notice of redemption is duly given in proper and timely fashion.
All such Series 2000 Bonds or portions thereof thus called for
redemption, and for the retirement of which funds are duly provided
in accordance with the Authorizing Ordinance prior to the date
fixed for redemption, will cease to bear interest on such
redemption date.
The Series 2000 Bonds are transferable by the registered
owner hereof in person or by his attorney-in-fact duly authorized
in writing at the principal corporate trust office of the Trustee,
but only in the manner, subject to the limitations and upon payment
of the charges provided in the Authorizing Ordinance, and upon
surrender and cancellation of this Series 2000 Bond. Upon such
transfer a new fully registered Series 2000 Bond or Series 2000
Bonds of the same series and maturity, of authorized denomination
or denominations, for the same aggregate principal amount, will be
issued to the transferee in exchange therefor. This Series 2000
Bond is issued with the intent that the laws of the State of
Arkansas shall govern its construction.
The City and the Trustee may deem and treat the
registered owner hereof as the absolute owner hereof for the
purpose of receiving payment of or on account of principal hereof
and premium, if any, hereon and interest due hereon and for all
other purposes, and neither the City nor the Trustee nor any paying
agent shall be affected by any notice to the contrary.
The Series 2000 Bonds are issuable only as fully
registered bonds in the denominations of $5,000 and any integral
multiple thereof. Subject to the limitations and upon payment of
the charges provided in the Authorizing Ordinance, Series 2000
Bonds may be exchanged for a like aggregate principal amount of
Series 2000 Bonds of the same maturity of other authorized
denominations.
9
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 the Series 2000 Bonds
do exist, have happened and have been performed in due time, form
and manner as required by law; that the indebtedness represented by
the Bonds, together with all obligations of the City, does not
exceed any constitutional or statutory limitation; and that the
above referred to revenues pledged to the payment of the principal
of and premium, if any, and interest on the Series 2000 Bonds as
the same become due and payable will be sufficient in amount for
that purpose.
This Series 2000 Bond shall not be valid or become
obligatory for any purpose or be entitled to any security or
benefit under the Authorizing Ordinance until the Certificate of
Authentication hereon shall have been signed by the Trustee.
(Form of Trustee's Certificate)
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds designated Municipal Port
Revenue Bonds, Series 2000, in and issued under the provisions or
the within mentioned Authorizing Ordinance.
TRUSTEE
By
Authorized Signature
Date of Authentication:
(Form of Assignment)
ASSIGNMENT
FOR VALUE RECEIVED,
hereby sells, assigns and transfers unto _
the within bond and all rights thereunder,
constitutes and appoints
to transfer the within bond on the books
thereof with full power of substitution in
DATE:
("Transferor"),
and hereby irrevocably
as attorney
kept for registration
the premises.
GUARANTEED BY: Transferor
NOTICE: Signature(s) must be guaranteed by a financial institution
acceptable to the Trustee.
10
Section 7. The City covenants that, so long as any Bonds
are outstanding under this Ordinance, it will cause the Port to be
operated as a revenue producing undertaking, to the end that the
Net Revenues of the Port will always be at least equal to 120 of
the aggregate maximum annual principal and interest requirements on
all outstanding Bonds. Failure to achieve the Net Revenues set
forth in this Section shall not constitute a default under this
Ordinance, provided that the City continues to operate the Port in
the manner calculated to achieve maximum net revenues. The City
shall report any such failure to the West Memphis Public Utility
Commission within sixty (60) days following the close of the fiscal
year in which such failure shall have occurred.
As used in this Ordinance, "Port Revenues" shall mean all
revenues, income, gains, rents and other revenues derived from the
operation of the Port, and "Net Revenues" shall mean all Port
Revenues less the amounts required to pay the costs of operation,
maintenance and repair, including all expense items properly
attributable to the operation and maintenance of the Port in
accordance with generally accepted accounting principles, excluding
depreciation, interest and amortization expenses.
Section 8. All Port Revenues shall be deposited in such
depository or depositories as may be lawfully designated from time
to time; subject, however, to the giving of security as now or
hereafter may be required by law, and provided that such depository
or depositories shall hold membership in the Federal Deposit
Insurance Corporation ("FDIC") or any successor entity. All
deposits shall be in the name of the City or the Port Authority
and shall be so designated as to indicate the particular fund to
which the revenues belong. The Bond Fund (identified below) shall
be held by the Trustee. Any deposit in excess of the amount
insured by the FDIC shall be secured by direct or fully guaranteed
obligations of the United States of America unless invested as
herein authorized.
Section 9. All Port Revenues shall be deposited into the
"Port Revenue Fund" in a bank selected by the City that is a member
of the FDIC. Revenues in the Port Revenue Fund are hereby pledged
and shall be applied to the payment of the principal of and
interest on the Bonds, to the maintenance of debt service reserves
at required levels, to the payment of the reasonable and necessary
expenses of operation and maintenance of the Port, to the providing
of the Depreciation Fund and otherwise as described herein.
Section 10. (a) There shall be transferred and paid from
the Port Revenue Fund into a special trust fund, held by the
Trustee and hereby created and designated "Port Revenue Bond Fund"
(the "Bond Fund"), the sums in the amounts and at the times set
forth in subsection (b) below.
11
(b) There shall be paid into the Bond Fund until all
outstanding Bonds, with interest thereon, have been paid in full or
provision made for such payment, on the first business day of each
month a sum equal Lo 1/b oz zne next 1nSLallmenL or interest ana a
sum equal to 1/12 of the installment of principal due during the
then next twelve months (either at maturity or in accordance with
any mandatory redemption provisions) of the Bonds (provided that
the monthly amount with respect to interest not otherwise provided
for which is payable prior to the first interest payment date shall
be an amount equal to such payment divided by the number of full
months between the date of issuance and such interest payment date)
on all outstanding Bonds, plus an amount sufficient to provide for
Trustee's and Paying Agent's fees, on all outstanding Bonds. If
Additional Bonds are issued pursuant to the provisions of Section
14 hereof, payments into the Bond Fund shall be increased to
provide for monthly amortization of such Additional Bonds.
(c) There is hereby established and shall be maintained
within the Bond Fund a "Debt Service Reserve," initially funded
with Series 2000 Bond proceeds in an amount equal to the Required
Level (defined below). If Additional Bonds are issued on a parity
with the Series 2000 Bonds, the Debt Service Reserve must be
increased upon the issuance of such Additional Bonds, so that the
amount thereof is equal to the Required Level. The Debt Service
Reserve shall be established and maintained at an amount equal to
the least of (1) 10~ of the proceeds of the Bonds (including a like
amount with respect to any Additional Bonds) issued or (2) the
maximum annual debt service on all Bonds (including any Additional
Bonds) outstanding or (3) 1.25 times the average annual debt
service on all Bonds outstanding (the "Required Level"). If the
Debt Service Reserve is ever reduced below the Required Level, the
monthly payments into the Bond Fund shall be increased by
depositing therein the first available Pledged Revenues (as defined
in Section 14 below) after required deposits into the Bond Fund,
until the Debt Service Reserve is restored to the Required Level.
The Debt Service Reserve shall be valued by the Trustee,
at market value, no less frequently than annually, and any surplus
therein (in excess of the Required level) shall be promptly
transferred to the Bond Fund. Any deficiency in the Debt Service
Reserve on account of the value thereof shall be corrected by the
deposit therein of monthly amounts equal to not less than the
amounts sufficient to cure such deficiency in twelve equal
deposits.
(d) If Port Revenues are insufficient to make the
required payment on the first business day of any month into the
Bond Fund, the amount of any such deficiency in the payment made
shall be added to the amount otherwise required to be paid into the
Bond Fund on the first business day of the next month.
12
If for any reason there shall be a deficiency in the
payments made into the Bond Fund so that there are unavailable
sufficient moneys therein to pay the principal of, interest on, and
Trustee's and Paying Agent's fees in connection with the Bonds as
the same become due, any sums then held in the Debt Service Reserve
shall be used to the extent necessary to pay such principal,
interest, and Trustee's and Paying Agent's fees. The Debt Service
Reserve shall be used solely as herein provided, but the moneys
therein may be invested as set forth below.
(e) If a surplus shall exist in the Bond Fund over and
above the amount required for making all principal and interest
i~, payments during the next succeeding twelve month period and in
excess of the Required Level of the Debt Service Reserve, such
surplus shall first be applied to reimburse the Utility System for
any deposit to the Bond Fund (including the Debt Service Reserve)
pursuant to Section 14 hereof. Any balance remaining thereafter
shall be applied at the direction of the City to the payment of the
principal of and interest on the Bonds that may be called for
redemption prior to maturity or shall be deposited into the Port
Revenue Fund. Otherwise, moneys in the Bond Fund shall be used
solely for the payment of principal, premium, if any, and interest
on the Bonds and Trustee's and Paying Agent's fees.
The City shall withdraw from the Bond Fund on or before
the due date of any Bond or interest payable therefrom, at maturity
or redemption prior to maturity, and deposit with the Paying Agent,
an amount equal to the amount of such Bond or interest payment for
the sole purpose of paying the same, together with the Paying
Agent's fee.
Section 11. After the required payments have been made
into the Bond Fund, there shall be paid from the Port Revenue Fund
into a fund designated Port Operation and Maintenance Fund (the
"Operation and Maintenance Fund"), on the first business day of
each month, an amount sufficient to pay the reasonable and
necessary monthly expenses of operation, repair and maintenance of
the Port 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 expenses 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 the deficiency shall be added to
the amount otherwise required to be transferred and paid into the
fund 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 costs of operation and maintenance during the
13
remainder of the then current fiscal year and the next ensuing
fiscal year, such surplus may be transferred into the Bond Fund or
into the Depreciation Fund, to the extent of any deficit therein,
and, in the absence of any such deficit, to the Port Revenue Fund.
Section 12. After making the required payments into the
Bond Fund and Operation and Maintenance Fund, there shall be paid
from the Port Revenue Fund into the Port Depreciation Fund. After
making the required payments into the Bond Fund and Operation and
Maintenance Fund, there shall be paid from the Port Revenue Fund in
a fund designated Port Depreciation Fund (the "Depreciation Fund"),
on the first business day of each month, a sum equal to 3~ of the
Port Revenues for the preceding month (but not including, for this
purpose, extraordinary gains), to provide for new construction and
acquisition, for major replacements, and for extraordinary repairs
to the Port. The moneys in the Depreciation Fund shall be used
solely for such purposes and for the purpose of paying costs of
damage caused by unforeseen catastrophes, except that moneys in the
Depreciation Fund shall be used to the extent necessary at any time
to prevent default in the payment of principal, interest, and
Trustee's and Paying Agent's fees on the Bonds.
If in any fiscal year a surplus shall be accumulated in
the Depreciation Fund over and above the amount which shall be
necessary to cover probable replacement costs during the current
fiscal year and the next ensuing fiscal year, such surplus may be
transferred to the Bond Fund, to the extent of any deficit therein,
and, in the absence of any such deficit, to the Port Revenue Fund.
Any surplus in the Port Revenue Fund, after making all
required disbursements and making full provision for required
Funds, may be used, at the option of the City, for the redemption
of Bonds; for constructing additions and improvements to the Port;
or for any lawful municipal purpose.
Section 13. Any surplus in the Port Revenue Fund, after
~, making all disbursements required by the provisions of this
Ordinance and making full provision for the funds herein provided,
may be used, at the option of the City, for the redemption of
Bonds; for constructing additions and improvements to the Port; or
for any lawful municipal purpose.
Section 14. (a) The City owns and operates its water,
sewer and electric utility facilities (these facilities being
referred to herein as the "System" or "Utility System"). The
Series 2000 Bonds are secured by a pledge of revenues derived from
the operation of the Port (the "Port Revenues") and, in addition,
by a pledge of "Surplus Utility Revenues," as defined below. The
Series 2000 Bonds are secured, as to Surplus Utility Revenues, on
a parity of pledge with the City's outstanding 1991 Bonds and 1999
Bonds. As used in this Ordinance, the term "Pledged Revenues"
refers to and includes Port Revenues and Surplus Utility Revenues.
14
The Surplus Utility Revenues which are pledged to the Series 2000
Bonds are those defined in Arkansas Code of 1987 Annotated §14-199-
101, being Utility System revenues remaining after adequate
provision has been made for expenses of operation, maintenance and
depreciation of the Utility System and all requirements (pertaining
to the payment of principal, interest and fees in connection with
bonds, and establishing and maintaining reserves) of ordinances
securing bonds, heretofore or hereafter issued, to finance or
refinance the cost of constructing, reconstructing, extending,
improving or equipping the Utility System, including any other
utility facilities owned by the City which are at the time declared
by the City Council to be interrelated municipal activities and
'~' concerning which utility (meaning here all such interrelated
activities, i.e., electric, sewer, water, gas, solid waste, or any
combination thereof) system revenue bonds are being issued, have
been fully met and complied with. Such bonds (or other
obligations), heretofore or hereafter issued, are referred to as
"Utility Bonds."
(b) In this regard, subject to compliance with its
covenants hereinafter set forth in this Section, it is understood
that this pledge of Surplus Utility Revenues shall not prohibit the
City from issuing Utility Bonds, or expending Utility System
revenues, for extensions and improvements to the Utility System
(including any interrelated utility facilities as referred to in
the preceding sentence) from time to time in the future. Any
pledge made of Utility System revenues to the payment of Utility
Bonds shall be superior to the pledge of Utility System revenues to
Bonds secured, in whole or in part, by Surplus Utility Revenues;
provided that such Utility Bonds shall be issued in compliance with
the requirements for the issuance of parity bonds set forth in the
Trust Indenture between the City and The First National Bank of
Chicago, Chicago, Illinois dated as of August 15, 1996, securing
the City's Public Utility System Revenue Bonds, 1996 Series A (the
"Utility Indenture"), including Section 204 thereof (which
requirements shall apply without regard to whether any of the
Utility Bonds authorized thereby are at the time outstanding).
However, the pledge of Surplus Utility Revenues herein made shall
~t~'~r be superior and prior to any pledge of Utility System revenues
~~ hereafter made to any bonds or other obligations of the City, other
than Utility Bonds, except that the City may issue Bonds secured by
a pledge of Surplus Utility Revenues and ranking on a parity with
the Series 2000 Bonds as to Surplus Utility Revenues if 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) Surplus Utility Revenues for the fiscal
year in which it is proposed to issue such Additional Bonds equal
not less than 140 of the maximum annual principal and interest
requirements on the outstanding Bonds and the Additional Bonds
proposed to be issued or (2) Surplus Utility Revenues for the next
ensuing fiscal year, as reflected by the written opinion of a duly
15
qualified consulting engineer not in the regular employ of the
City, equal not less than 140 of the maximum annual principal and
interest requirements for the Bonds outstanding and the Additional
Bonds proposed to be issued. For the purposes of the computation
required by this paragraph, additional amounts may be added to the
revenues of the completed fiscal year immediately preceding the
issuance of Additional Bonds, as follows: If, prior to the issuance
of the Additional Bonds and subsequent to the first day of the
preceding fiscal year, the City shall have increased its rates or
charges imposed for services of the Utility System there may be
added to the revenues of such fiscal year the additional revenues
which would have been received from the operation of the Utility
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. This pledge of Surplus Utility
Revenues to and in favor of the Bonds shall extend and apply to all
Utility System revenues, as above defined, but so long as the City
is not in default with reference to any of its covenants and
obligations pertaining to the Bonds, including, without limitation,
those covenants set forth in Section 10 of this Ordinance
pertaining to deposits in the Bond Fund, the entire amount of
Surplus Utility Revenues not required during any year while the
Bonds shall be outstanding for the payment of the principal of,
interest on, and Trustee's and Paying Agent's fees in connection
with the Bonds and maintaining required reserves at the required
levels may be used by the City for any lawful purpose.
The City covenants that it will comply with all
requirements of the Utility Indenture so long as it may be in
effect.
The City reserves the right to issue Additional Bonds, to
finance or refinance the cost of constructing any future extensions
or improvements to the Port, secured by a pledge of Port Revenues
ranking, with respect to Port Revenues, on a parity with the Series
2000 Bonds, provided that there shall have been procured and filed
with the Trustee a statement by an independent certified public
account not in the regular employ of the City reciting the opinion,
based upon necessary investigation, that Net Revenues of the Port
for the fiscal year immediately preceding the fiscal year in which
it is proposed to issue such additional Bonds shall equal not less
than 130 of the maximum annual principal and interest requirements
on all the then outstanding Bonds secured by pledges of Port
Revenues (including the Series 2000 Bonds and any Additional
(parity) Bonds) and the Additional Bonds then proposed to be
issued.
Bonds secured by a pledge of Port Revenues pursuant to
this subsection (c) may, at the option of the City, be additionally
secured by a pledge of Surplus Utility Revenues pursuant to
subsection (b) above.
16
Section 15. The Series 2000 Bonds shall be subject to
redemption prior to maturity in accordance with the terms set out
in Section 6 thereof.
Section 16. The City will keep proper books of accounts
and records (separate from all other records and accounts) in which
complete and correct entries shall be made of all transactions
relating to the operation of the Port and of the Utility System,
and such books shall be available for inspection by the holder of
any of the Bonds at reasonable times and under reasonable
circumstances. The City agrees to have these records audited by an
independent certified public accountant at least once each year.
A copy of each audit shall be delivered to the Trustee not later
than 180 days after the end of each fiscal year and shall be made
available to any bondholder making request therefor. In the event
that the City fails or refuses to make the audit, the Trustee, or
any holder of a Bond, may have the audit made, and the cost thereof
shall be charged against the Operation and Maintenance Fund.
Section 17. The City covenants that it will maintain, or
cause to be maintained, the Port in good condition and operate the
same in an efficient manner and at reasonable cost. While any of
the Bonds are outstanding, the City agrees that, to the extent that
comparable protection is not otherwise provided to the satisfaction
of the Trustee, it will insure, or cause to be insured, and at all
times keep insured, in customary with regard to ports and like
facilities, in a responsible insurance company or companies
authorized and qualified under the laws of the State of Arkansas to
assume the risk thereof, properties of the Port, to the extent that
such properties would be covered by insurance by private companies
engaged in similar types of businesses (but in any event in such
amounts as will avoid co-insurance responsibilities), against loss
or damage thereto from fire and other perils included in extended
coverage insurance in effect in Arkansas. The insurance policies
are to carry a clause making them payable to the Trustee as its
interest may appear, and the satisfactory evidence of insurance is
to be placed in the custody of the Trustee. In the event of loss,
the proceeds of such insurance shall be applied solely toward the
reconstruction, replacement or repair of the Port, 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 Port
Revenue Fund, and if such proceeds shall be insufficient for such
purposes the deficiency shall be supplied first from moneys in the
Depreciation Fund and second from moneys in the Operation and
Maintenance Fund and third from surplus moneys in the Port Revenue
Fund. Nothing shall be construed as requiring the City to expend
any moneys for operation and maintenance of the Port or for
premiums on its insurance which are derived from sources other than
Port Revenues, but nothing shall be construed as preventing the
City from doing so.
17
Section 18. Bonds for the payment or redemption of which
moneys or Government Securities, as defined in Section 22 hereof,
which are not subject to call prior to maturity (except at the
option of the holder thereof) shall have been deposited with the
Paying Agent (whether upon or prior to the maturity or the
redemption date of such Bonds) shall be deemed to be paid and
discharged; provided, however, that if such Bonds are to be
redeemed prior to the maturity thereof, notice of such redemption
shall have been duly given or provided for. In determining the
sufficiency of the deposit there shall be considered the principal
amount of such Government Securities, the dates of maturity thereof
and interest to be earned thereon until the maturity of such
Government Securities.
Section 19. The City covenants that so long as any Bonds
are outstanding, that it will not mortgage, pledge or otherwise
encumber the Port, or any part thereof or any Port revenues derived
from the operation thereof, except as herein provided. Nothing
herein shall be construed to prohibit the City from disposing of
worn out or obsolete Port properties or from disposing of
properties not being used and not useful in the operation of the
System, provided that all revenues derived from the disposition of
such properties shall be deposited in the Port Revenue Fund.
Further, nothing herein shall be construed to limit the City in its
rights and obligations set forth in Sections 28 or 29 or to limit
the City in the amendment thereof.
Section 20. (a) If there be any default in the payment
of the principal of or interest on any of the Bonds, or if the City
defaults in any Bond Fund requirements or in the performance of any
of the other covenants contained and set forth in this Ordinance,
the Trustee may, and upon the written request of the holders and
registered owners of not less than ten percent (10~) in principal
amount of the Bonds then outstanding shall, by proper suit compel
the performance of the duties of the officials of the City under
the laws of Arkansas. And in the case of a default in the payment
of the principal of and interest on any of the Bonds, the Trustee
may, and upon the written request of holders or registered owners
of not less than ten percent (10~s) in principal amount of the Bonds
then outstanding shall, apply in a proper action to a court of
competent jurisdiction for the appointment of a receiver to
administer the Airport and the Utility System on behalf of the City
and the holders and registered owners with power to charge and
collect (or by mandatory injunction or otherwise to cause to be
charged and collected) rates sufficient to pay any Bonds and
interest outstanding and to apply the revenue in conformity with
the laws of Arkansas and with this Ordinance. When all defaults in
principal and interest payments have been cured, the custody and
operation of the Airport and the Utility System shall revert to the
City.
18
(b) No holder or registered owner of any of the
outstanding Bonds shall have any right to institute any suit,
action, mandamus or other proceeding in equity or at law for the
protection or enforcement of any right under this Ordinance or
under the laws of Arkansas unless such holder or registered owner
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 and registered owners of not less
than ten percent (10~) in principal amount of the Bonds 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 the laws 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 or registered owners of the
Bonds hereby secured shall have any right in any manner whatever by
his or their action to affect, any right hereunder except in the
manner herein provided, that all maintained in the manner herein
provided and for the benefit of all holders and registered owners
of all outstanding Bonds and that any individual rights of action
or other right given to one or more of such holders and registered
owners by law are restricted by this Ordinance to the rights and
remedies herein provided.
(c) All rights of action under this Ordinance or under
any of the Bonds secured hereby, enforceable by the Trustee, may be
€ enforced by it without the possession of any of the Bonds
appertaining thereto, and any such suit, action or proceeding
i instituted by the Trustee shall be brought in its name for the
benefit of all the holders and registered owners of such Bonds,
subject to the provisions of this Ordinance.
(d) No remedy herein 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 herein provided, and each and every
such remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or given by law.
(e) No delay or omission of the Trustee or of any
holders of the bonds 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 such default or an acquiescence
therein; and every power and remedy given by this Ordinance to the
19
Trustee and to the holders of the Bonds, respectively, may be
exercised from time to time and as often as may be deemed
expedient.
(f) 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 waiver 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 consequent thereon.
(g) The cost of any proceedings brought to enforce the
Bonds or any provision of this Ordinance, including reasonable
attorney's fees, shall be a debt of the City and shall be paid by
the City as incurred and billed by the Trustee.
Section 21. This Ordinance shall constitute a binding
contract between the City and the holders of the outstanding Bonds,
and the City will at all times strictly adhere to the terms and
provisions hereof and will fully discharge all of its obligations
hereunder. This Ordinance may be amended at any time for the
purpose of clarifying its terms, removing ambiguities or enhancing
the security for the Bonds. In addition, subject to the terms and
provisions set forth below 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, to consent to and approve the adoption by the City of such
ordinance supplemental to this Ordinance as shall be necessary or
desirable for the purpose of modifying, altering, amending, adding
to or rescinding in any particular, any of the terms or provisions
of this Ordinance or in any supplemental ordinance, except that
there shall not be permitted (a) an extension of the maturity of
the principal of or the interest on any Bond, 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 this Ordinance as now adopted, or
(d) the creation of 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 22. (a) Moneys held for the credit of the Debt
Service Reserve in the Bond Fund shall be invested and reinvested
in (i) direct or fully guaranteed obligations of the United States
of America (including any such securities issued or held in book-
entry form on the books of the Department of the Treasury of the
United States of America) ("Government Securities") or (ii) in time
deposits or certificates of deposit of banks, including the
Trustee, which are insured by the Federal Deposit Insurance
20
Corporation (the "FDIC"), or, if in excess of insurance coverage,
collateralized by Government Securities, or (iii) obligations
issued by the Government National Mortgage Association or (iv)
money market funds comprised exclusively of investments described
in (i) or (iii) above (collectively, "Permitted Investments") all
of which shall mature, or which shall be subject to redemption by
the holder thereof, at the option of such holder, not later than
five (5) years after the date of investment or the final maturity
date of the outstanding Bonds, whichever is earlier. The Trustee
shall so invest and reinvest pursuant to the direction of the City
and in the Trustee's discretion in the absence of any direct
instruction from the City.
(b) Moneys held for the credit of the Bond Fund (other
than the Debt Service Reserve) shall be invested and reinvested in
Permitted Investments, 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 or dates when the moneys will be
required for payment of the principal of and interest on the Bonds
when due. The Trustee shall invest and reinvest pursuant to the
direction of the City and in the Trustee's discretion in the
absence of any direct instructions from the City.
(c) Moneys held for the credit of the Construction Fund
and all other Funds established hereunder may be invested and
reinvested pursuant to the direction of the City in Permitted
Investments 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 or dates when such money will be required for
the purposes intended.
(d) Obligations so purchased as an investment of moneys
in any fund shall be deemed at all times to be a part of such fund
and the interest accruing thereon and any profit realized from such
investments shall be credited to such fund, and any loss resulting
from such investment shall be charged to such fund.
Section 23. When the Series 2000 Bonds have been
executed and the seal of the City impressed as herein provided,
they shall be delivered to the Trustee, and the Trustee shall
authenticate them and deliver them to the Underwriter upon payment
in case of the purchase price of $1,102,781.25 plus accrued
interest from the Dated Date to the date of delivery ("total sale
proceeds"). The Trustee shall disburse such funds as set forth in
detail in a letter of delivery instructions and delivered to the
Trustee as follows:
(1) The Trustee shall deposit in the Bond Fund an amount
sufficient to provide for early maturing interest on the Series
2000 Bonds.
21
(2) The Trustee shall deposit an amount equal to the
Required Level into the Debt Service Reserve.
(3) The Trustee shall deposit the balance in a special
account designated "2000 Port Construction Fund" ("Construction
Fund") in the Trustee. The moneys in the Construction Fund in
excess of the amount insured by the FDIC shall be continuously
secured by Government Securities (though any moneys invested as
hereafter authorized need not be so secured). The moneys in the
Construction Fund shall be disbursed solely in payment of the costs
of accomplishing the Improvements, paying necessary expenses
incidental thereto and paying expenses of issuing the Series 2000
Bonds. Disbursements shall be on the basis of requisitions which
shall contain at least the following information: the person ro ~~~
whom payment is being made; the amount of t ent; and the ~-'~~
purpose by general classification of~tY a~ ent . Each requisitionG(~r~
must be signed by the Mayor and^e~e - ~__ ~ _~_~ L__ ~~,~
and in the case of all items of expense over which the
consulting engineer shall exercise supervision each requisition
shall be accompanied by a certificate signed by the consulting
engineer certifying approval thereof. The Trustee shall issue its
check upon the Construction Fund payable to the person, firm or
corporation designated in the requisition. The Trustee shall be
required to keep accurate records as to all payments made.
When the Improvements have been completed and all
required expenses paid and expenditures made from the Construction
Fund for and in connection with the accomplishment of the
Improvements and the financing thereof, this fact shall be
evidenced by a certificate signed by the Chairman of the Port
Authority, which certificate shall state, among other things, the
date of the completion and that all obligations payable from the
Construction Fund have been discharged. The certificate shall be
filed with the Trustee and upon receipt thereof the Trustee shall
transfer any remaining balance to the Bond Fund.
Section 24. In the event the office of Mayor, City
Clerk, City Treasurer, Port Authority or City Council shall be
abolished, or any two or more of such offices shall be merged or
consolidated, or in the event the duties of a particular office
shall be transferred to another office or officer, or in the event
of a vacancy in any such office by reason of death, resignation,
removal from office or otherwise, or in the event any such officer
shall become incapable of performing the duties of his office by
reason of sickness, absence from the City or otherwise, all powers
conferred and all obligations and duties imposed upon such office
or officer shall be performed by the office or officer succeeding
to the principal functions thereof, or by the office or officer
upon whom such powers, obligations and duties shall be imposed by
law.
22
Section 25. It is understood and agreed that the Port
Authority, acting for and on behalf of the City, has custody of and
control over the Port. Therefore, it is understood and agreed that
even though there are some express references to the Port
Authority, all references herein to the City shall, when
appropriate in view of the authority and responsibility of the Port
Authority, be construed to mean and include the Port Authority. To
this end, the Port Authority shall be obligated to perform all
covenants and obligations with reference to the Port and Port
Revenues, set forth herein, the performance of which are within its
authority and jurisdiction. It is understood and intended that the
bondholders have relied on, and are beneficiaries of, such
commitments of the Port.
It is further understood and agreed that all or portions
of the Port is and may continue to be leased to one or more persons
for operational purposes, including the maintenance and operation
of facilities and the accounting for and handling of revenues
derived therefrom. The City agrees to notify the Trustee of any
termination of any such operating lease or like arrangement, or of
the abandonment thereof by any such operator, within thirty (30)
days after such termination or abandonment.
Section 26. 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
sixty (60) days notice in writing to the City Clerk and the
majority in principal amount of the holders of the Bonds then
outstanding at any time, with or without cause, may remove the
Trustee. No such resignation by the Trustee shall be effective
until the successor Trustee has been chosen and has delivered
written acceptance of its duties hereunder. 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 of the
Bonds then outstanding 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
of the Bonds then outstanding 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 former Trustee and any successor
Trustee shall execute a written acceptance of the trust 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
23
holders 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 former Trustee which has resigned or been
removed shall cease to be Paying Agent and the successor Trustee
shall automatically become the Paying Agent.
Section 27. Anything herein to the contrary
notwithstanding, all rights of any holder of any Bond to or with
respect to any moneys or investments held in any fund hereunder
shall terminate at the expiration of two years plus six months from
the date of maturity of such Bond, whether by scheduled maturity or
by call for redemption prior to maturity in accordance with the
terms hereof .
Section 28. (a) The City covenants that it shall not
take any action or suffer or permit any action to be taken or
condition to exist which causes or may cause the interest payable
on the Series 2000 Bonds to be subject to federal income taxation.
Without limiting the generality of the foregoing, the City
represents and covenants that the proceeds of the Series 2000 Bonds
and the revenues pledged to the payment thereof 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 148 of
the Internal Revenue Code of 1986, as amended (the "Code").
(b) The City covenants that it will take no action which
would cause the Series 1999 Bonds to be "federally guaranteed"
within the meaning of Section 149(b) of the Code; specifically, (A)
the payment of any portion of principal or interest with respect to
the Series 2000 Bonds will not be guaranteed (directly or
indirectly) by the United States or any agency or instrumentality
thereof and (B) not more than 5~ of the proceeds of the Series 2000
Bonds (exclusive of proceeds invested for an initial temporary
period until needed for the purpose for which the Series 2000 Bonds
were issued and proceeds deposited into the Bond Fund) will be
invested (directly or indirectly) in federally insured deposits or
accounts. Nothing in this Section shall prohibit investments in
obligations issued by the United States Treasury.
(c) The 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 Series 2000 Bonds are issued, the
statement required by Section 149 (e) of the Code.
(d) Acquisition and construction of the Improvements
will commence subsequent to the date of adoption of this Ordinance
and as of such date no on-site work had been commenced in
connection with the construction of the Improvements and no off-
site fabrication of any portion of the Improvements had been
24
commenced; prior to such date no binding agreement in connection
with the acquisition, construction or equipping of the Improvements
has been entered into.
(e) The average maturity of the Series 2000 Bonds
(within the meaning of Section 147 (b) of the Code) will not exceed
120 of the average reasonably expected economic life of the
Improvements (within the meaning of Section 147 (b) of the Code) ,
determined with respect to any facility as of the later of the date
on which the Series 2000 Bonds are issued or the date on which the
facility is placed in service.
(f) So long as any of the Series 2000 Bonds are
outstanding, the City will not enter into any lease, service
contract, management contract or like arrangement with respect to
or related to any of the Improvements, for a term in excess of
thirty (30) days, without first obtaining and filing with the
Trustee an opinion of Bond Counsel (as defined in Section 29) to
the effect that such arrangement will not cause interest on the
Series 2000 Bonds to be subject to federal income tax.
(g) Costs of issuance of the Series 2000 Bonds which are
paid from proceeds of the Series 2000 Bonds shall not exceed an
amount equal to 2~ of such proceeds.
(h) No portion of the proceeds of the Series 2000 Bonds
will be applied to construct or equip office space, storage
facilities, training facilities, lodging facilities or retail
facilities unless there is presented to the Trustee an opinion of
Bond Counsel to the effect that such application will not adversely
affect the exemption of interest on the Series 2000 Bonds from
federal income tax.
Section 29. The City recognizes that the exclusion of
interest paid on the Series 2000 Bonds from gross income for
R purposes of regular federal income taxation is dependent upon
compliance with the provisions of Section 148 of the Code and
regulations thereunder. The City shall, unless and until the City
delivers to the Trustee an opinion of Bond Counsel as described in
the last paragraph of this Section, make the determinations and
take the actions hereinafter by this Section required and make such
further or different determinations and take such further or
different actions as are necessary, in the opinion of Bond Counsel,
to comply with the requirements of Section 148 (f) of the Code and
regulations issued or otherwise effective thereunder (the
"Regulations"). The Trustee, on behalf of, and at the direction of
the City, but only from funds provided by and on the basis of each
Rebate Certificate (defined below) shall rebate to the United
States, not later than sixty (60) days after the end of the Bond
Year ending December 31, and not later than sixty (60) days
after the end of each fifth Bond Year thereafter, an amount which
ensures that at least ninety percent (90~) of the Rebate Amount (as
25
hereinafter defined) will, at the time of required payment, be paid
to the United States, and within sixty (60) days after the payment
or redemption of all principal of any series of the Bonds, an
amount sufficient to pay the remaining unpaid balance of the Rebate
Amount, all in the manner and as required by Section 148 of the
Code and the Regulations pertaining thereto. As used herein,
"Rebate Amount" means the amount described in Section 148(f)(2) of
the Code, computed in accordance with the provisions of the Code,
computed in accordance with the provisions of Section 148 (f) (2) and
the Regulations pertaining thereto now or hereafter promulgated.
As used in this Section, "Bond Year" means the twelve-month (or
shorter in the case of the initial Bond Year) period ending on
December 31. As used in this Section, "Bond Counsel" means any
lawyer or firm of lawyers of national reputation with respect to
the obligations of public bodies and the exemption of interest
thereon from federal income tax and acceptable to the Trustee.
The City shall, within thirty (30) days after the close
of each Bond Year, furnish the Trustee either (i) a determination
verifying such determination and with any supporting documentation
required to calculate or evidence the Rebate Amount in accordance
with the Code and applicable Regulations (the "Annual Certificate")
or (ii) a written opinion of accountants not in the regular employ
of the City to the effect that the Rebate Amount accrued to the end
of such Bond Year, if any, is not material under generally accepted
auditing standards (the "Annual Opinion"). The City and the
Trustee shall retain copies of each Annual Certificate and Annual
Opinion until six years after final payment or redemption of all
principal of the Bonds of the affected series.
Upon receipt by the Trustee of the statement of the City
that certain amounts previously paid hereunder are not subject to
rebate and an opinion of Bond Counsel acceptable to the Trustee to
the effect that failure to rebate such amounts will not cause
interest on the Bonds to become includable in gross income of the
Holders thereof for regular federal income tax purposes under the
Code, Regulations and any then pending federal legislation, the
Trustee shall transfer any such amounts to the City.
The City shall verify at least annually from the date of
delivery of the Bonds that (i) all requirements of this Section
have been met on a continuing basis, (ii) adequate procedures have
been established and are being complied with to ensure continuing
compliance with the requirements of certificates executed and
delivered by the City in this regard upon the issuance of the
affected series of Bonds and (iii) if applicable, the proper
amounts have been paid to the Trustee.
The provisions of this Section shall remain in full force
and effect notwithstanding the payment or defeasance of the Bonds
hereunder.
26
Notwithstanding the foregoing, in the event that the
Trustee is furnished with an opinion of Bond Counsel acceptable to
the Trustee to the effect that it is not necessary under then
existing Regulations or any then pending federal legislation to pay
any portion of earnings on investments held hereunder or otherwise
to the United States in order to assure the exclusion from gross
income for regular federal income tax purposes of interest on the
Bonds, the requirements set forth in the preceding portion of this
Section (with respect to the portion of such earnings specified in
such opinion) need not be complied with and shall no longer be
effective and all amounts at the time held by the Trustee for the
purposes set forth in this Section (to the extent covered by such
opinion) shall be transferred as specified in such opinion.
Each payment required to be paid to the United States
shall be filed with the Internal Revenue Service Center,
Philadelphia, Pennsylvania 19255. Each payment shall be
accompanied by a copy of the Form 8038 (or like form then required)
originally filed with respect to the Bonds and a statement
summarizing the determination of the amount to be paid to the
United States.
All references to sections of the Code and to Regulations
thereunder include references to any successor section or sections
which set forth substantive provisions supplanting or superseding
those of the sections referred to.
The Trustee will agree to modification or rescission of
any provision of this Section in the event that there is delivered
to the Trustee an opinion of Bond Counsel, acceptable to the
Trustee, to the effect that such modification or rescission (a) is
necessary to preserve the exemption of interest on the Bonds from
regular federal income tax or (b) will not adversely affect such
regular federal income tax exemption.
Section 30. Nothing in this Ordinance expressed or
implied is intended or shall be construed to confer upon, or to
give to, any person or entity, other than the City, the Trustee,
and the registered owners of the bonds, any right, remedy or claim
under or by reason of this Ordinance or any covenant, condition or
stipulation hereof, and all covenants, stipulations, promises and
agreements in this Ordinance contained by and on behalf of the City
shall be for the sole and exclusive benefit of the City, the
Trustee, and the registered owners of the Bonds.
Section 31. 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 the Ordinance.
27
Section 32. This Ordinance shall not create any right of
any kind and no right of any kind shall arise hereunder pursuant to
it until the Series 2000 Bonds shall be issued and delivered.
Section 33. All ordinances and resolutions or parts
thereof, in conflict herewith are hereby repealed to the extent of
such conflict.
Section 34. It is hereby ascertained and declared that
the Improvements must be accomplished as soon as possible in order
to make the Port adequate for the needs of the City and its
inhabitants, without which the life, health, safety and welfare
thereof are jeopardized, that delay in the acquisition and
construction of the Improvements results in economic loss and that
the issuance of the Series 2000 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.
PASSED: June 1, 2000.
APPROVED:
ATTEST: i'lGc. `"-' iti;~j.^r-
Mayor
CIT _ C
28
CERTIFICATE
The undersigned, City Clerk of the City of West Memphis,
Arkansas, hereby certifies that the foregoing pages are a true and
correct copy of Ordinance No. 193''] adopted at a regular session
of the Council of the City of West Memphis, Arkansas, held at the
regular meeting place of the Council in the City at 1:30 p.m., on
~`''w the 1st day of June, 2000, and that the Ordinance is of record in
" Ordinance Record Book NO.LOOO PEtge now in my possession.
GIVEN under my hand and seal this (~-f- day of June, 2000.
City e ~
(SEAL)
'~ .
~,
,:s
,.+....
29