806t
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ORDINANCE NO . ~ D
AN ORDINANCE AUTHORIZING THE ISSUANCE OF PUBLIC
UTILITY REVENUE BONDS FOR THE PURPOSE OF FINANCING
THE COST OF CONSTRUCTING AND EQUIPPING PUBLIC
UTILITY SYSTEM IMPROVEMENTS AT THE CITY OF WEST
MEMPHIS, ARKANSAS; PROVIDING FOR THE PAYMENT OF
THE BONDS; PRESCRIBING OTHER MATTERS RELATING
THERETO; AND DECLARING AN EMERGENCY.
WHEREAS, the City of West Memphis, Arkansas (the "City"), owns
and operates electric facilities, waterworks facilities and sewer facilities as
one inter-related municipal undertaking, the facilities of which constitute the
City's Public Utility System (all of the facilities will be herein sometimes
referred to as the "System"); and
WHEREAS, the City has determined that the constructing of improvements
consisting of extensions to the waterworks facilities and sewer facilities and
related improvements (the "improvements") are necessary; and
WHEREAS, the total estimated cost of the improvements is approximately
$1,990,000 and in order to finance the improvements, it is necessary that the
City issue Public Utility Revenue Bonds in the principal amount of $1, 000 , 000 ,
the balance of the costs being provided by a grant or grants from an agency or
agencies of the United States; and
WHEREAS, the City Council has previously caused to be sold and has
-:authorized the issuance of Public Utility Revenue Bonds, dated December 1, 1973,
in the (unconverted) principal amount of $1, 000 , 000 (the "1973 Utility Bonds "),
-for the purpose of financing the City's cost of the improvements (including the costs
.~of construction and equipment and expenses incidental thereto and to the financing);
:-and
WHEREAS, it is not possible to issue and deliver the 1973 Utiiiry Bonds,
~as authorized, because of litigation pending which challenges certain aspects of
the operation of the System and the power of the City to pass through (to users of
the System} costs of fuel/necessary to the operation of the System; and
9
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WHEREAS, due to adverse market changes, there is no assurance that
the 1973 Utility Bonds can in the future be issued and delivered on the terms
on which sold; and
WHEREAS, it is in the interest of the City that an alternative method
be found and implemented for the financing of the City's cost of the improve-
ments, in order that the accomplishment of the improvements may be commenced
without further delay; and
WHEREAS, upon due and thorough investigation, and the recommendation
of the West Memphis Utility Commission, it has been found and determined that
the best method of financing the immediate and pending costs to the City of
accomplishing the improvements is by the issuance of temporary utility revenue
bonds, in the principal amount of $750,000, with the bonds to be issued in series
from time to time as funds are need, all as set forth and described in this Ordinance.
i NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of
West Memphis, Arkansas:
Section 1 . The improvements shall be accomplished , and the Mayor
and City Clerk are hereby authorized to execute such documents and writings
and to take such other action as may be necessary or appropriate thereto.
The Council hereby finds and declares that the period of usefulness of the
improvements will be more than forty (40) years, which is longer than the term
of the bonds .
Section 2. Under the authority of the Constitution and laws of the State
of Arkansas, including particularly Act No. 131 of the Acts of Arkansas of 1933,
as amended , Act No. 132 of the Acts of Arkansas of 1933, as amended , and the
applicable decisions of the Supreme Court of the State of Arkansas, including
particularly City. of Harrison v. Braswell, 209 Ark. 1094, 194 S.W.2d 12 (1946),
Public Utility Revenue Bonds (Te mporary) (the "bonds" or the "Te mporary Bonds ") ~
are hereby authorized and ordered issued in the principal amount of $750,000 for
the purpose of accomplishing the improvements and paying necessary expenses
_~ ._
incidents 1 thereto and to the authorization and issuance of the bonds . The bond s
shall be issued in series, as funds are needed, with the initial series to be
designated the "Series A Bonds." The Series A Bonds shall be issued in the principal
amount of $500,000. The Series A Bonds shall be dated June 1, 1974, with interest
thereon payable semiannually on June 1 and December 1 of each year, commencing
December 1, 1974. The Serie s A Bond s sha 11 be numbered consecutively from
1-A to 100-A, inclusive, and shall be in the denomination of $5,000 each. The
Series A Bonds shall bear interest at the rate of 5-1/2% per annum and shall
mature on June 1, 1976 .
Section 3. The City has outstanding an issue of Sewer Revenue Refunding
and Improvement Bonds, dated June 1, 1945, authorized by Ordinance No i 107 of
the Ordinances of the City, adopted and approved on July 6, 1945 and an issue
of Sewer Revenue Bonds dated August 1, 1949, authorized by Ordinance No. 171
of the Ordinances of the City, adopted and approved on September 9, 1949
(herein sometimes referred to as the "1945 and 1949 Sewer Bonds"). In addition,
the City has outstanding an issue of Public Utility Bonds dated May 1, 1954,
authorized by Ordinance No. 275 of the Ordinances of the City, adopted and
approved on May 18, 1954 (herein sometimes referred to as the "1954 Utility
Bonds"); and the City has outstanding an issue of Public Utility Bonds dated
April 1, 195 6 , authorized by Ordinance No . 316 of the Ordinances of the City ,
adopted and approved on March 15, 1956, as amended (herein sometimes referred
to as the "1956 Utility Bonds"); and the City has outstanding an issue of Public
Utility Bond s d a ted July 1, 1963 , authorized by Ordinance No . 43 7 of the
Ordinances of the City, adopted and approved on June 20, 1963 (herein sometimes
referred to as the "1963 Utility Bonds"); and the City has outstanding an issue
of Public Utility Bonds dated June 1, 1967, authorized by Ordinance No. 526
of the Ordinances of the City, adopted and approved on April 20, 1967 (herein
sometimes referred to a s the " 196 7 Utility Bonds"); and the City has outstanding
an issue of Public Utility Bonds dated May 1, 1968, authorized by Ordinance
-~.. No . 5 63 of the Ordinances of the City , adopted and approved on June 6 , 19 6 8 ,
as amended by Ordinance No. 564 of the On~inances of the City, adopted and
approved on July 2, 1968 (herein sometimes referred to as the "1968 Utility
Bonds"); and the City has outstanding an issue of Public Utility Bond s dated
October 1, 1971, authorized by Ordinance No. 699 of the Ordinances of the City
adopted and approved on October 7, 1971 (herein sometimes referred to as the
"1971 Utility Bonds ") . The 1971 Utility Bonds , the 196 8 Utility Bonds , the 1967
Utility Bonds, the 1963 Utility Bonds and the 1956 Utility Bonds are issued on
a parity of security with each other and with the 1954 Utility Bonds. Also, it
is recognized that the City has made a conditional pledge of electric revenues
to an issue of Swimming Pool Revenue Bonds of the City dated March 1 , 1955 ,
a s set forth in Section 14 of Ordinance No . 295 of the Ordinances of the City
adopted and approved on February 1, 1955, and nothing in this Ordinance shall
be construed as impairing that conditional pledge of electric revenues to the
extent, and only to the extent, that the conditional pledge in favor of the March 1,
1955 Swimming Pool Revenue Bonds may be determined to be applicable to the
pledge of System revenues in favor of the bonds now being issued . The bonds
identified above in this Section 2 will be herein referred to collectively as the
"bonds of prior issues." The pledge of System revenues securing these Temporary
Bonds shall be subject and subordinate to the pledges of System revenues
securing the bonds of prior issues .
The bonds shall be negotiable coupon bonds payable to bearer but subject
to registration as to principal or as to principal and interest. Principal and interest
are payable at the principal office of Bank of West Memphis, West
Memphis, Arkansas (the "Trustee" and "Paying Agent"). Payment of interest when
registered as to interest may 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. The
bonds shall be subject to redemption prior to maturity as hereinafter set
forth .
Section 4. The bonds shall be executed on behalf of the City by the
Mayor and City Clerk and shall have irnpressed thereon the seal of the City.
The bonds may be signed by the facsimile signature of the Mayor but must be
signed by the manual signature of the City Clerk. The interest coupons
attached to the bonds may be signed by the facsimile signature of the Mayor.
The bonds, and interest thereon, shall not be general obligations of the City
but shall be special obligations,- payable solely from revenues derived from
operation of the Sy s to m (together with the proceeds of bonds to be issued , a s
hereinafter set forth), which revenues are hereby pledged and mortgaged for the
equal and ratable payment of the bonds, subject to the pledge securing the bonds
of prior issues, and shall be used for no other purpose than to pay interest on
the bonds, except as otherwise specifically provided in this Ordinance. The
bonds and interest thereon shall not constitute an indebtedness of the City
within any constitutional or statutory limitation. The City covenants that it
will sell and issue permanent bonds or other temporary bonds , prior to the
maturity of these Temporary Bonds, and that the required amount of the proceeds
thereof will be used to pay or redeem the Temporary Bonds .
Section 5. The bonds shall be in substantially the following form
(with appropriate changes to reflect the particular series) and the Mayor and
City Clerk are hereby expressly authorized and directed to make all recitals
contained therein:
UNITED STATES OF AMERICA _
STATE OF ARKANSAS
COUNTY OF CRITTENDEN
CITY OF WEST MEMPHIS
PUBLIC UTILITY REVENUE BOND (TEMPORARY)
SERIES A
No. A $5,000
KNOW ALL MEN BY THESE PRESENTS:
That the City of West Memphis, County of Crittenden, State of Arkansas
(the "City"), acknowledges itself to owe and for value received, hereby promises
to pay to bearer, or if this bond be registered to the registered owner hereof,
solely from the special fund provided as hereafter set forth, the principal sum of
FIVE THOUSAND DOLLARS ($5 , 000)
in lawful money of the United States of America on the first day of June, 1976,
and to pay solely from that special fund interest hereon at the rate of five and
one-half percent (5-1/2%) per annum, from date until paid . Interest is payable
semiannually on June 1 and December 1 of each year, commencing December 1,
1974. Principal and interest are payable at the principal office of Bank
of West Memphis, West Memphis, Arkansas (the "Trustee" and "Paying Agent").
Payment of interest, when registered as to interest, may be~by check or draft
mailed to the registered owner at his address reflected on the registration book
of the City maintained by the Trustee a s bond registrar.
This Serie s A Bond i s one of a serie s of City of West Memphis , Arka nsa s
Public Utility Revenue Bonds (Temporary), Series A, aggregating Five Hundred
Thousand Dollars ($500,000) in principal amount, dated June 1, 1974 (the "Series A
Bonds") , numbered from 1-A to 100-A , inclusive , all of like tenor and effect, except
as to number, and right of prior redemption, issued for the purpose of constructing
extensions, betterments and improvements (the "improvements") to the Electric,
Waterworks and Sewer facilities of the City (which facilities are operated as a
single, integrated municipal undertaking (the "System")) and paying necessary
expenses incidental thereto and to the issuance of the bonds. The Series A Bonds
are part of a total authorized issue of Seven hundred Fifty Thousand Dollars
($750,000) in principal amount, and the City has roserved the right to~issuo the
balance of the total authorized issue at a later time or times.
r
The bonds are issued pursuant to and in full compliance with the
Constitution and laws of the State of Arkansas, including particularly Act
~.- .No. 131 of the Acts of Arkansas of 1933, as amended, Act No. 132 of_the
Acts of Arkansas of 1933, as amended, and applicable decisions of the Supreme
Court of Arkansas, including particularly City of Harrison v. Braswell, 209 Ark.
.1094, 194 S.W.2d 12 (1946), and pursuant to Ordinance No. duly adopted
- ~ , 1974 (the "Authorizing Ordinance ") , and
.and approved on the day of
-•
tlo not constitute an indebtedness of the City within any constitutional or statutory
. ~ - limitation. The bonds are not general obligations of the City, but are special
obligations payable solely from the revenues derived from the operation of the
System (together with the proceeds of bonds to be issued, as set forth hereinafter
and in the Authorizing Ordinance). The pledge of revenues securing these bonds
is subordinate to the pledge of revenues securing the Public Utility Bonds of
the City dated May 1, 1954, the Public Utility Bonds of the City dated April 1, 1956,
the Public Utility Bonds of the City dated July 1, 1963 , the Public Utility Bonds of
the City dated June 1, 1967, the Public Utility Bonds of the City dated May 1,
- X196$ and the Public Utility Bonds of the Ciry dated October 1, -1971, and is subor-
dinate to the pledge securing certain outstanding Sewer Bonds of the City (and, to
-the extent applicable, to the conditional pledge of electric revenues securing an
.. ;issue of swimming pool revenue bonds of the City), all being described in the
- -:.-Authorizing Ordinance and referred to collectively herein as the "bonds of prior
issues." An amount of System revenues sufficient to pay the interest
- -on the bonds is to be set aside in a special fund for that purpose -
__ - _
.identified as the "1974 Public Utility Bond Fund" (the "Bond Fund"), created by
the Authorizing Ordinance. Reference may be had •to the Authorizing OrdirH nce
for a detailed statement of the nature and extent of the security ara3 the rights and
of obligations of the City, the Trustee and the holders of the bonds. The City
has fixed and has covenanted and agreed to maintain rates for the services of the
System which shall be sufficient at all times at least to provide for the payment
C
of the reasonable expenses of operation and maintenance of the System, provide
for the payment of principal, interest, and Trustee's and Paying Agent's fees
on all bonds of prior issues, provide for the interest and Trustee's and Paying
• Agent's fees on the bondsof this issue, and make required deposits for the
depreciation of the System. (There is no provision for required deposits into
the Bond Fund for payment of principa 1 of these bonds , for the reason that permanent
~ bonds or other temporary bonds will be issued prior to the maturity hereof aril the
required amount of the proceeds thereof used to pay or redeem these bonds , a s se t
- forth in the Authorizing Ordinance.) -
The bonds are subject to redemption prior to maturity, at the option of
the Cfty, in whole or in part, with there to be'no partial redemption of any bond,
• - .-
...
-. in inverse numerical order, at"_a price of the principal amount of~the bonds being ... -: - -
-` •': redeemed , plus ,accrued interest to date of "redemption, as follows: (1) from -:
. .. .1
proceeds of the bonds in excess of the amount needed to accomplish the
improvements, on any interest payment date; and (2) from funds from any
source at any time on and after June 1, 1975. Notice of the call for
" redemption shall be published one- time in a newspaper of general circulation
-" - throughout the State of Arkansas published- in the City of Little Rock, Arkansas,
- giving the number and maturity of each bond being called , with the publication
- - ~to be at least fifteen (15) days prior to the redemption date, and after the date
. ".
- - - fixed for redemption each bond so called shall cease to bear interest, provided
- funds for its payment are on deposit with the Paying Agent at that time. In
w ~ ~ addition, notice shall be given by certified or registered mail to the registered
- owr~r of each bond registered as. to principal at the address of such owner
- .`
- reflected on the bond registration book of the bond registrar, and if all outstanding
bonds shall be registered as to principal notice by certified •or registered mail
to the registered owners thereof as aforesaid shall be sufficient, and it shall not
be necessary to publish notice of the call.
This Series A Bond may be registered as to principal or as to principal and
interest and may be discharged from such registration in the manner, with the effect,
and subject to the terms and conditions endorsed hereon. Subject to the provisions
for registration endorsed hereon, nothing contained in the bonds or in the
Authorizing Ordinance shall affect or impair the negotiability of the bonds, and
the bonds shall be deemed negotiable instruments under the laws of the State
of Arkansas and issued with the intent that the laws of the State of Arkansas
will govern their construction.
This Series A Bond shall not be valid until it shall have been authenticated
by the certificate hereon duly signed by the Trustee.
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 this bond have existed , have happened and have been
performed in due time, form and manner, as required by law; that the indebtedness
represented by this Series A Bond and the series of which it forms a part does
not exceed any constitutional or statutory limitation; and that revenues of the
System have been pledged to and will be set aside into the Bond Fund in accordance
with the provisions of the Authorizing Ordinance .
IN WITNESS WHEREOF, the City of West Memphis, Arkansas, by its
City Council, has caused this Series A Bond to be signed by the facsimile signature
of the Mayor and the manual signature of the City Clerk, and sealed with the
corporate seal of the City, and has caused the coupons attached hereto to be
executed by the facsimile signature of the Mayor, all as of the first day of
June , 19 74 .
CITY OF WEST MEMPHIS, ARKANSAS
ATTEST:
BY
i City Clerk
(SEAL)
(facsimile signature )
Mayor
(Form of Coupon) -
No.
On the first day of 19_, the City of West Memphis,
Arkansas, unless the bond to which this coupon is attached is paid prior
thereto, hereby promises to pay to bearer, solely out of the funds specified
in the bond to which this coupon is attached
- DOLLARS
in lawful money of the United States of America at the principal office of Bank -
of West Memphis, West Memphis, Arkansas, being ( ) months'
interest then due on its Public Utility Revenue Bond (Temporary), Series A, dated
June 1 , 1974 , and numbered -A .
CITY OF WEST MEMPHIS, ARKANSAS
By (facsimile signature)
Mayor
On each bond shall appear the following:
CERTIFICATE
This is to certify that this is one of the City of West Memphis, Arkansas
Public Utility Revenue Bonds (Temporary), Series A, dated June 1, 1974, mentioned
and described within.
BANK OF WEST MEMPHIS,
West Memphis, Arkansas
TRUSTEE
By
Authorized Signature
4
-PROVISIONS FOR RLGIS'i'I~1ITION 11Nll R)JCONVL'ItSION
- ~ ~ ~ This bond may be registered as to principal alone on bcol:s of the
City, maintained by the Trustee as bond registrar, upon presentation hereof
to the bond registrar, which. shall maY.e mention of such registration in the
x'egistration blank below, and this bond may thereafter be transferred only
=upon an assignment duly executed by the registered owner or his attorney or
~~ legal representative in such form as shall be satisfactory to the bond registrar,
such transfer to be made on such books and endorsed hereon by the bond .
.registrar. Such transfer may be to bearer, and thereafter transferability by
- - ~ ~ delivery shall be restored, but this bond shall again be subject to successive
- registrations and transfers as before. The principal of this bond, if registered,
- :. ~
-. unless registered to bearer, shall be payable only to or upon the order of the
.registered owner or his legal representative. Interest accruing on this bond
_ -'will be paid only on, presentation and surrender of the attached interest coupons
- - . •-
' ~.: as they respectively become due, and notwithstanding the registration of this
' -" bond as to principal, the appurtenant interest coupons shall remain payable to
~. bearer and shall continue to be transferable by delivery; provided, that if upon
~_ ~ =registration of this bond, or at any time thereafter while this bond is registered
'- -. fn the name of the owner, the unmatured~ coupons attached evidencing interest
- ~ .: --to be thereafter .paid hereon shall be surrendered to said bond registrar, a• ~ - -
- .~__.::_ statement to that effect will be endorsed hereon by the bond registrar and
thereafter interest evidenced by such surrendered coupons may be paid by
check or draft of the bond registrar at the times provided herein to the registered
' . owner of this bond by mail to the address shown on the registration books. This
• bond when so converted into a bond registered as to both principal and interest
maybe reconverted into a coupon bond at the written request of the registered
owner and upon presentation at the office of said bond registrar. Upon such
reconversion the coupons representing the interest to become due thereafter
to the date of maturity will again be attached to this bond and a statement
will be endorsed hereon by the bond registrar in the registration blank below
whether it is then registered as to principal or payable to bearer.
- -~ • :Manner .of :Signature of
Date of RPC~istration Name of Registered Owner • Rectistration ~: Bond Registrar_
-~ :
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•
~. - . -
.. ~ - -..
.. _ - - .. -
- - - ;~
' ~ .- .. -s
• ~
• ~ ~ .
• i
Section 6. The rates to be charged for electric services fur-
Wished by the System, the rates to be charged for water services furnished by
the System, and the rates to be charged for sewer services furnished by the
System by all heretofore adopted and presently effective ordinances of the
City Council, and the conditions, rights and obligations pertaining thereto,
as set out in those ~orilinances , are hereby ratified, confirmed and continued.
The City covenants and agrees that the rates shall never be reduced
while any of the bonds are outstanding unless there is obtained from an indepen-
dent certified public accountant a certificate that the net revenues of the System
(net revenues being defined as gross revenues less the e~:penses of. operation
and maintenance of the System, including all expense items properly attributable
to the operation and maintenance of the System under generally accepted account-
. ing principles applicable to municipal electric, water<n~orks and sewer systems),
~ ~ with the reduced rates, will always be equal to the amount required to be set
`..
aside-for the Depreciation Fund, and the amount necessary to comply with all
conditional pledges of any System revenues (on the assumption all payments will
have to be made to the full extent of the conditional pledges) , and leave a balance
equal to the amount necessary for paying principal and interest when due of the
1945 and 1949 Sewer Revenue Bonds, plus at least 200% of the aggregate average
annual principal and interest requirements on all outstanding bonds of the 1954
Utility Bonds , 195 6 Utility Bonds , 1963 Utility Bonds , 196 7 Utility Bonds , the
1968 Utility Bonds , the 1971 Utility Bonds , plus. a t least 200% of the annual
interest requirements on these bonds. The City further covenants and agrees
that the rates shall when necessary, from time to time, be increased in an amount
which will produce net revenues at least sufficient to provide the required deposit
into the Depreciation Fund , comply with all conditional pledges of any System
revenues, and leave a balance equal to the amount necessary for paying principal
and interest when due of the 1945 and 1949 Sewer Revenue Bonds and meeting
all principal and interest requirements of the 1954 Utility Bonds, 1956 Utility
Bonds , 1963 Utility Bonds , ].967 Utility Bonds , 196 $ iJtility Bonds , the 1971
Bonds, for paying interest when due on these bonds and for maintaining all
funds in connection therewith at the required level.
Section 7. 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
services or facilities so afforded shall be charged against the City or such depart-
ment, agency or instrumentality and sYrall be paid for as the charges therefor
accrue. The revenue 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 any other revenue derived from the operation of the System, provided,
however, that nothing herein shall be construed as requiring the City or any
department, agency or instrumentality thereof to avail itself of the facilities or
services afforded by the System.
Sect=• The System shall be continuously operated as a revenue
producing undertaking , and all moneys received from its operation shall be
deposited in such depository or depositories for the City as may be lawfully
designated from time to time by the Council, subject, however, to the giving of
security as now or as hereafter may be required by law, and provided that such
depositories shall hold membership in the Federal Deposit Insurance Corporation,
Section 9. All funds created by Ordinances of the City authorizing
and securing the outstanding bonds of prior issues shall remain unchanged by
this Ordinance and shall continue to be maintained by the City as required by
and pursuant to the provisions of those Ordinances. Also, all of the covenants,
restrictions, conditions and provisions set forth in those Ordinances, except
where expressly inconsistent with the provisions of this Ordinance, are hereby,
each and all, ratified and confirmed , and shall continue in force and inure to the
security and benefit of the bonds of this issue, as fully and as effectively as if
herein set out in full, it being the intention of this section to give the bonds of this
issue the full benefit of all such covenants, restrictions, conditions and provisions
as well as the full benefits of all applicable provisions of the Constitution and laws
of the State of Arkansas, subject to the priority of pledge in favor of the bonds of
prior issues, so long as any of the bonds of prior issues are outstanding.
Section 10. 1974 Public Utility Bond Fund . (a) There is hereby established
with a bank or banks that are members of the Federal Deposit Insurance Corporation,
to be designated by the City from time to time, a special trust fund in the name
of the City designated "1974 Public Utility Bond Fund" (the "Bond Fund ") ,which
shall be maintained as long as the bonds are outstanding and unpaid,. and into
which there shall be paid the sums in the amounts and in the times hereinafter
set forth in subparagraph (b) for the purpose of providing funds for the payment
of the interest on and trustee's and paying agent's fees in connection with the
bonds a s the same become due .
(b) Beginning on the first business day of the month after the delivery
of the bonds and continuing on the first business day of each month thereafter
there shall be paid into the Bond Fund from System revenues a sum equal to one-
sixth (1/6) of the next installment of interest (plus any additional amount that
may be necessary together with accrued interest received at the time of the
delivery of the bonds fully to provide for the first interest payment on the bonds)
and an amount sufficient to provide for the trustee's and paying agent's fees.
Additional amounts of System revenues may be deposited into the Bond Fund each
month and used for the purpose of redeeming the bonds if the City so elects but
it shall not be mandatory that any additional amounts be so deposited into the
Bond Fund .
Section 11. The bonds shall be subject to redemption prior to maturity
in accordance with the terms set out in the face of the bond form in Section 5
of this Ordinance.
Section 12 . So long a s the bonds are outstand ing the City shall
continuously operate the System as a revenue producing undertaking and, except
as permitted by the provisions of Section 18 hereof, shall not issue or attempt to
issue any bonds or incur any obligations on a parity of security with the bonds
of prior issues or issue any bonds or incur any obligations claimed to be entitled
to a priority of lien on, or pledge of, System revenues over the lien and pledge
in favor of the bonds of this issue, including revenues derived from the herein
authorized and any and all future extensions, betterments and improvements
to the System .
Section 13. The Trustee of the bonds issued hereunder shall be
Bank of West Memphis, West Memphis, Arkansas. 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 recitals of the City and not of the Trustee . The Trustee shall
not be required to to};e any action as Trustee unless it shall have been ,requested
to do so in writing by the holders and registered owners of not less than ten
per cent (10`%) in principal amount of the bonds of this issue 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 ten (10) day;, notice in writing to the City Cler};
and the majority in value of the holders and registered ovv~ners.of the out-
standing bonds of this issue at any time, with or without cause, may remove
the Trustee . Tn the event of a vacancy in the office of Trustee , either by
resignation or. by removal, the majority in value of•fihe•holders and registered
owners of the outstanding bonds of this issue may'a.ppoint a new Trustee, such
appoir~tment to be evidenced.•by a written instrument or instruments filed with
the City Clerk. Tf the majority in vela:: of the holders and registered owners
of the outstanding bonds of this issue shall fail to fill a vacancy within thi~~:y
(30) days aficr the same shall occur, then the City shall forthwith designate
a new Trustee by a dvritten instrument filed in the office of the City Clerk,
The original Trustee and any successor Trustee shall file a written acceptance
and agreement to execute the trust imposed upon i.t or tr~em by fihis Ordir~ance,
but only upc~a-c tl~:e terms and condition?s set forth in ti_1is Ordinance and suLj4~.t
to the provisions of this Ordinance, to all of which the respective holders and
registered o:~mers 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 tiie office of Trustee , the old Trustee which
has resigned or been removed shall cease to be Paying Agent.
Section 14. (a) If there be any default in the payment of the
principal of or interest on any of the bonds of this issue, or if the City defaults
in any Bond Fond requirements or in the performance of any of. the other covenan-:ts
contained anti set forth in this ordinance , the Trustee may, and upon the written
request of the holders of not Iess than ten per cent (10%) in principal amount
of the bonds of this issue then outstanding shall, by proper suit compel the
performance of the duties of the officials of the City under the laws of Arkansas .
And, ill tl7r Case of: a del:aul.t i.n the payment of. the: principal of and interest
on any of the outstanding bonds of this issue, the Tru tee rnay, and upon the
written request of holders of not less than ten per cent (1.0%) in principal a;nount
of the bonds of this issue than outstanding shall, apply in a proper action to
a court of competent jurisdiction for the appointment of a receiver to admiri.si:er
the System on b~ half of the City and the bondholders and registered owners
with power to cljarge and collect (or Ly mandatory injunction or otherwise to
cause to be charged and collected) rates sufficient to provide for the payment
of the e~;penses of operation, repair and maintenance and to pay any bonds
and interest outstanding and to apply the revenue i.n conformity with the Iaws
of ~.rkansas and with this ordinance . When all defaults in principal and interest
payments have 1~een cured, the custody and operation of the System shall
revert to the City .
(b) No holder of any of the outstanding bonds of this issue shall
have any right to institute any suit, action, mand~imus or other proceeding in
equity or in la~tiT for the protection or enforcement of any right under this
ordinance or under the laws of Arkansas unless such holder previously shell
have given to th~ Trustee written notice of the default on account of which
suit, action or proceeding is to be taken, and unless the holders of not less
than ten per cent (10%) in principal amount of the bonds of this issue then
~,,, outstanding shall have made written request of the Trustee after the right to
exercise such pov~ers 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, onto 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 co!nply
with such request within a reaso?cable time, and such notification, request
and offer of indemnity arc hereby declared in every such case, at the option
of the Trustee, to be conditions precedeiil to the execution of: the powers and
trusts of this orda.nancc or to any other remedy hereunder. It is understood
ar~d intended that no one or more holders or registered owners of the bonds
hereby secured shall have any right in any manner v~hatever by his ar their
action to affect, disturb or prejudice the security of this ordinance, or to
enforce any right hereunder except in the manner herein provided ,that all
f.
proceedings at law or in equity shall be instituted, had and maintained in
the manner herein provided and for tl~e benefit of all holders of the outstanding
bonds and coupons , and that any individual rights of action or other right
given to one or more of such holders by law are restricted by this ordinance to
the rights and remedies herein provided.
(c) All. rights of action under this ordin~znre or under any of the
bands secured hereby, enforceable by tha Trustee , may ba enforced by it without
the possession of. any of the bonds or coupons appertaining thereto, and any
such suit, action or procec~di.ng instituted by the 7.'r.ustee shall be brought in
its name for the benefit of al.l the holders of such bands and coupons, subject
~ ~.
to the provisions of this ordinance .
(d) No remedy herein conferred upon or reserved to the Trustee
or to the holders and registered owners 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 any other law.
(e} No delay or omission of the Trustee or of any holders or
registered owners of fihe 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 vraiver of any such default or an acquiescence therein; and every power and
' rernedy given by this. ordinance to the Trustee and to the holders and registered
owners of the bands, respectively, may be exercised from time to time and as
often as may be deemed expedient.
~ (g) That the Trustee may, and upon the written request of the holders
and re istered owners of not less t}~an ten percent (10%) in principal amount of
g
-the bonds then outstanding shall, waive any default which shall have been
remedied before the entry of final judIIment or decree in any suit, action or
proceeding instituted under the provisions of this Ordinance or before the com-
pletion 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.
Section 15. V17hen the 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 tl-em to the purchaser upon
payment in cash of the purchase price of par plus accrued interest from
June 1, 1974 to the date of d~alivery (called "total sale proceeds"). The Trustee
shall handle the 1:ota1 sale proceeds as follows:
•a
(1) The Trustee shall deposit the amount of the accrued interest in
the Bond Fund .
(2) The Trustee shall pay expenses of the sale and issuance of the
bonds as directed by a letter of delivery instructions signed by the Mayor and
delivered to the Trustee .
(3) The Trustee shall deposit the remainder of the total sale proceeds
in a special account in the name of the City designated " 1974 Public Utility
Construction Fund" (called "Construction Fund") which shall be established -
and maintained in a depository designated by the City and holding membership
in the Federal Deposit Insurance Corporation. The moneys in the Construction
Fund ijz excel s of the amount i:isured by the Federal Deposit Insurance Corporation
shall be continuously secured by bonds or other direct or fully guaranteed obligations
of the United States of America, except that any moneys invested as hereinafter
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 bonds not paid by the purchaser. Disbursements shall be on the basis of
checks or requisitions which shall contain at least the following information:
the person to whom payment is being made; the amount of the payment; and tree
purpose of general classification of the payment. Each check or requisition
must be signed by the individual occupying the top managerial position of the
System, and in the case of all items of expense over which the Engineer shall
exercise supervision (which shall include all expenses except engineering fees,
legal fees, and expenses pertaining to the issuance of the bonds) each check or
requisition shall be accompanied by a certificate signed by the Engineer (or by
a representative thereof designated by the Engineer) certifying approval thereof.
In the case of requisitions, the depository shall issue its check upon the Construction:
Fund payable to the person, firm or corporation designated in the requisition.
The depository of the Construction Fund shall be required to keep records as to
all payments made on the basis of requisitions, and the West Memphis Utility
Commission shall keep records of all payments made on the basis of checks.
,. .. i
(~
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 person occupying the top managerical
position of the System and by the Engineer, which certificate shall state, among
other things, the date of the completion and that all obligations payable from
the Construction Fund have been discharged . A copy of the certificate shall be
filed with the depository of the Construction Fund , and upon receipt thereof the
depository of the Construction Fund shall transfer any remaining balance in the
Construction Fund to the Bond Fund .
Section 16. The Mayor is hereby directed to publish for one insertion in
which is hereby found
and declared to be a newspaper published in the City and. of general. circulation
therein, this Ordinance, to which shall be attached a Notice signed by him in
substantially the following form:
NUTTCE
Notice is hereby given that the City Council of the City of West
Memphis, Arkansas, had adopted the ordinance hereinafter set out; that the City
contemplates the issuance of the Public Utility Revenue Bonds (Temporary) described
in the ordinance; that any person interested may appear before the Council
on the day of , 1974 , at o'clock , m. ,
at the usual meeting place of the Council held in the City and present protests.
At such hearing all objections and suggestions will be heard, and the Council
will take such action as is deemed proper in the premises.
DATED .this day of 1974.
Mayor
a
Section 17. (a) tiic~nrys held for the credit of the Construction Fund
or any other fund may be invested and reinvested pursuant to il~e: direction of
the City in direct obligations of , or obligations the principal of and interest
on which are unconditionally guaranteed hy, the U~iited States Government, or
Certificates of Deposit of ban};.s that arc me:nla:~rs of the federal Deposit
Insurance Corporation, which investments must mature not later than the date
or dates tLe r,ionGys held far the credit of the particular fund will be required for
the purposes intended (in the case of investments of moneys in the Construction
Fund the: City shall rely upon tho determinations of the consulting engineers as
to the dates the moneys in the Construction Fund ~~~ill be needed) .
(b) In~,~estments shall be deemed at all times a part of the applicable
fund and interest accruing thereon and ~~rofit realized from i.nvestr~~en'csshall be
credited to the applicable fund, and loascs resulting, frc..~ investments. Nl~.all bo
-~
charged to the applicable fund.
Section 18 . Since these Te mpcr~ry Bonds mature June 1, 1976 , it will
be necessary for the City to refund the bonds prior to their maturity., In this
regard the City contemplates the issuance of Public Utility Revenue Bonds for
furnishing the permanent financing of the City's costs of the improvements
including the amount necessary to refund these Temporary Bonds and to pay any
additional costs for further improvements that may be necessary at the time.
Therefore , ~ the City expressly covenants with the Trustee and with the holders of
these bonds that it will, prior to the maturity date of the bonds, issue Public
Utility Revenue Bonds in at least that principal amount sufficient to pay, principal
and interest, all outstanding bonds of this issue on or before maturity, and
continuously to operate the S}'stem as a revenue producing undertaking charging
sufficient rates for water, electric and sewer services to at least provide adequate
moneys for the payment of the reasonable expenses of operation and :maintenance
of the System, for the payment of the principal of, interest on, and trustee's and
paying agent's fees in connection with all outstanding bonds and for the discharge
4
of any contractual obligation, to which System revenues are pledged (including
particularly bonds that will be issued to accomplish the refunding of these bonds),
for making the required deposit for depreciation and for maintaining all funds at
required levels set forth in ordinances authorizing such bonds and contractual
obligations to the payment of which System revenues are pledged . It is understood
that such refunding, or refunding and new money, bonds may be issued on a parity
with any outstanding bonds of prior issues if the conditions required for the
issuance of parity bonds can then be complied with.
Suction 19. The City covenants that it will 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 bonds to be subject to federal income taxation. With-
out limiting the generality of the foregoing, the City covenants that the proceeds
of the sale of the bonds will not be used directly or indirectly in such manner as
to cause the bonds to be treated a s "arbitrage bonds" within the meaning of
Section 103 (d) of the Internal Revenue Code of 1954, as amended .
Section 20. 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.
Section 21. All ordinances and parts of ordinances in conflict herewith
are hereby repealed to the extent of such conflict.
Section 22. This Ordinance shall constitute a contract between the City
and the bondholders and no rights of any kind shall arise until the bonds
authorized herein are issued and delivered .
Section 23. Ordinance No. 799 adopted and approved March 26, 1974,
being the ordinance authorizing these 1973 Utility Bonds, is hereby rescinded.
Section 24. It is hereby ascertained and declared that the improvements
must be accomplished as soon as possible in order to make 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
~ t
accomplishmerit thereof. It is, therefore, declared that an emergency exists,
and this Ordinance being necessary for the immecliate preservation of the public
peace, health and safety shall taYe effect and be in force from and after its
passage .
PASSED: May 2 1974.
APPROVED
'l
ATTEST:
~ >
City C1erY
(SEAL)
Mayor