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ORDINANCE NO.
AN OIli~INANC'I; I'ROViItTi~TC; I'~~R TITI I~l;;ilnNCi' C)I' PUI~11C
U'I'ILI'I'`( Itl;l'UNL~INCa ANU IMI'ItOVl;~1-1I:N'1' IZEVI:NUI: BUNI);~
I'C~R 1'lIE PURPOSI: OT RI:I'UNDI~~.'(_, ChR'1'AlN OtIT;~'I'~1NI~LN~.;
REVL;NUI; BONDS (DESCRIBED IN Tlll: Al~'I'tl(~RI11N~:~
OI:DINANCI;) ANi:> hINANCING 'C11E CO'I' OI' CON:~'1'Ill1C'1'IiJC~
AND I:(JUI1'YING 1I~~1I'ROVi:M1;NTS TG '1'I-i1: 1'tlbLli.; U7'1L1'1'1'
SYSTEM-I Ol' TIIE CITY OI' Vti~EST i~~IER1PI115, AR1~INSAS;
PROVIDING I'OR THE PA1'I~~IENT OP TIIE PRINCII,AL OI' AND
INTEREST ON TIIE BONDS; PRESCRIBING OTI-TER MATTERS
REIATING TIIERETO; AND DEC1_~1RING AN EMERGENCY.
WHEREAS , the City of West Memphis , Arkansas (the "City") owns
and operates electric, water and sewer facilities as a single municipal
undertaking the facilities of which constitute the City's Public Utility
System (and which will be herein referred to as the "System"); and
WHEREAS, the City has outstanding the following issues of
bonds which are secured by pledges of revenues derived from the System
(referred to herein, collectively, as the "previous bonds"):
(1) Sewer Revenue Refundilig and Improvement Bonds , dated June 1 , 1945 .
(2) Sewer Revenue Bonds , dated A ugust 1 , 1949 .
(3) Public Utility Revenue Bonds , dated May 1 , 1954
(4) Public Utility Revenue Bonds , dated April 1 , 1956 .
(5) Public Utility Revenue Bonds , dated July 1 , 1963 .
(61 Public Utility Revenue Bonds , dated June 1 , 1967 .
(7) Public Utility Revenue Bonds , dated May 1 , 1968 .
(8) Public Utility Revenue Bonds , dated October 1 , 1971 .
(9) Public Utility Revenue Bonds (Temporary) , dated June 1 , 1974
and
WHEREAS , the City Council has determined that it is in the best
interest of the City that there be constructed and equipped improvements and
extensions to the System, including, generally stated, construction of a
water treatment plant, primary pumping plant and outfall lines, scwE r and
water replacement, the City's share of the cost of an I:nvironmcntal Protection
Agency evaluation study, acquisition of c-xisting plant in annexed area from
Arkansas Power and Light Company, c-onstrurtion of a pumping station anu
contingency for construction (the "imprc,v~;m~ nts"); anal
WHEREAS, plans and estimates of costs for the improvements hc[~.~c
been prepared by a qualified consulting engineer and are on file with the
City Clerk where they may he inspected by any interested person; rind
`~
ti
Page 2
WHEREAS, the total estimated cost of the improvements is
approximately $3,315,000 and a portion of the cost, $270,000, will be
financed by an agency or agencies of the United States, and the balance,
$3,045,000, must be provided by the City; and
WHEREAS , the City can finance its portion of the cost of the
improvements by the issuance of public utility revenue bonds; and
WHEREAS , it is necessary to the sale and issuance of public utility
revenue bonds on the best obtainable terms that the previous bonds be refunded,
and the City Council has determined that by the refunding of the previous bonds
the City will realize significant savings and will realize other significant bene-
fits (such as the removal of restrictions on the operation of the System and
restrictions on the financing of System improvements and the recovery of reserve
funds) ; and
WHEREAS , the City is authorized to issue bonds to accomplish the
refunding and the improvements under the Constitution and laws of the State
of Arkansas, including Act No. 131 of 1933, as amended, Act No. 132 of 1933,
as amended, Act No. 297 of 1937, as amended, and Act No. 145 of 1967, as
amended;
NOW , THEREFORE., BE IT ORDAINED by the City Council of the City
of West Memphis, Arkansas:
Section 1. The refunding and improvements shall be accomplished, and the
Mayor and City Clerk are hereby authorized to execute and deliver such
documents and writings and to take such other action as may be necessary or
appropriate thereto. The City Council hereby finds and declares that the period
of usefulness of the improvements is forty (40) years , which is longer than the
term o.f the bonds (identified below) .
Section 2 . Under the Crnstitution and laws of the State of Arkansas ,
including Act No. 131 of 1933, as amended, Act No. 132 of 1933, as amended,
Act No. 297 of 1937, as amended, and Act No. 145 of 1967, as amended, and
applicable decisions of the Supreme Court of the State of Arkansas , including
City of Harrison v. Braswell, 209 Ark. 1094, 194 S.W. 2d 12 (1946), City of
n
'~
Page 3
West Memphis , Arkansas Public Utility Refunding and Improvement Revenue
Bonds , Series 1976 (the "bonds ") , are hereby authorized and ordered issued
in the tota 1 principa 1. a mount of $5 , 730 , 000 , for the purposes of a ccomplishing
"the refunding of the previous bonds,financing the improvement's and paying
expenses incidental thereto and to the issuance of the bonds. The bonds
shall be dated May 1, 1976 and shall mature on May 1, of each year as
follows:
Date A mount
1977 105,000
1978 115,000
1979 120,000
1980 130,000
1981 135,000
1982 140,000
1983 150,000
1984 155,000
1985 165,000
1986 175,000
1987 185,000
1988 195,000
1989 205,000
1990 215,000
1991 230,000
1992 245,000
1993 260,000
1994 275,000
1995 295,000
1996 315,000
1997 335,000
1998 355,000
1999 380,000
2000 410,000
2001 440,000
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Page 4
Interest on the bonds shall be payable on May 1 and November 1
of each year, commencing November 1, 1976. The bonds shall be
numbered from 1 upwards and shall be in substantially the form hereinafter
set forth. The bonds shall be subject to redemption prior to maturity as set
W.
forth in the form of bond hereinafter. The bonds shall be sold at public sale,
and the Mayor is authorized (upon consultation with the City's fiscal agent)
to publish and distribute a notice of sale and other descriptive documents for
the purpose of effecting sale of the bonds on the best terms obtainable. Sale
of the bonds shall be approved by resolution of the City Council, which
resolution shall set forth the terms of the bonds as they are being issued,
including interest rates , semiannual interest requirements , annual principal
and interest requirements , bond numbers , denominations and the designation
of a trustee and paying agent. The Notice of Sale shall be in substantially
the following form:
NOTICE OF SALE
OF
CITY OF WEST MEMPHIS, ARKANSAS
PUBLIC UTILITY REFUNDING AND IMPROVEMENT
REVENUE BONDS, SERIES 1976
DATED MAY 1, 1976
The City of West Memphis, Arkansas (the "City") , hereby gives notice
that there will be sold on sea led bids on
May 6, 1976
a t 1:3 O p. m., loca 1 time
its proposed issue of $5 , 730,000 Public Utility Refunding and Improvement
Revenue Bonds, Series 1976, dated May 1, 1976 (the "bonds"). Interest
on the bonds will be payable, semiannually on May 1 and November 1 of
each year, commencing May 1, 1976. The bonds will mature annually on
May 1 of each year as follows (but shall be subject to redemption prior
to maturity as hereinafter set forth):
Date A mount
1977 105,000
1978 115,000
1979 120,000-
1980 130,000
1981 135,000
1982 140,000
1983 150,000
1984 155,000
1985 165,000
1986 175,000
1987 185,000
1988 195,000
lggg 205,000
1990 215,000
1991 230,000
1992 245,000
1993 260,000
1994. 275,000
1995 295,000
1996 315,000
1997 335,000
lggg 355,000
lggg 380,000
2000 410,000
2001 440,000
The bonds are being issued under the Constitution and laws of the
State of Arkansas , including specifically Act. No. 131 of 1933 , a s amended ,
Act No. 132 of 1933, as amended, Act no. 297 of 1937, as amended, and Act
No. 145 of 1967, as amended, and 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). The bonds will not be general
obligations of the City, but will be special obligations secured by a pledge
of and payable solely from revenues derived from the operation of the Electric,
Wa ter a nd Sewer System of the City (which the City operates a s a single ,
combined municipal undertaking (the "System")),and will not constitute an
indebtedness of the City within the meaning of any constitutional or statutory
limitation.
The bonds are being issued for the purpose of refunding all outstanding.
bonds of the City which are secured by pledges of System revenues ($4,024,000
in aggregate principal amount now outstanding) and for the purpose of financing
the cost to the City of constructing extensions, betterments and improvements
(the "improvements") to the System and paying expenses incidental thereto and
to the sale and issuance of the bonds.
The bonds will be subject to redemption prior to maturity, at the option
of the City, in whole or in part, with there to be no partial redemption of any
bond, in inverse numerical order as follows: (a) from proceeds of the bonds
in excess of the amounts needed. to accomplish the refunding and the improve-
ments on any interest payment date , at a price of the principal amount of the
bonds being redeemed plus accrued interest to the date of redemption; (b) from
funds from any source, on any interest payment date on and after May 1, 1988,
at a price of the principal amount being redeemed, plus accrued interest to date
of redemption, plus a premium as follows:
3% if redeemed May 1,
2 1/2% if redeemed May 1 ,
2% if redeemed May 1,
1 1/2% if redeemed May 1,
1% if redeemed May 1,
1/2% i.f redeemed May 1,
No premiu m if redee med May
1988 or November 1 , 1988;
1989 or November 1, 1989;
1990 or November 1 , 1990;
1991 or November 1 , 1991;
1992 or November 1, 1992;
1993 or November 1 , 1993;
1 , 1994 or thereafte r.
The bonds will be coupon bonds, payable to bearer, but subject to
registration as to principal or as to principal and interest, in the denomination
of $5 , OOU each.
Supplemental and dual coupons will not be permitted, and the bonds
shall not be subject to conversion. Bidders may specify no more than five (5)
rates of interest and the rates shall be subject to the following limitations:
1. No bond may bear intere st a t a ra to ,greater than 7% per annum .
2. The difference between the highest and lowest rates of interest
may not exceed 2% .
3. No bond may bear interest at a rate greater than that borne by
a.ny bond of la ter maturity.
4. Bonds of each maturity must bear interest at the same rate,
from date to maturity .
No bid of less than 97.5% of par and accrued interest will be entertained.
The award, if made, will be to the bidder whose bid results in the lowest net
interest cost to the City, to be determined by computing the aggregate interest
cost to the City at the rate bid from date to maturity and adding the amount of
any discount or deducting the amount of any premium bid.
The purchaser shall have the privilege of naming the Trustee and
Paying Agent (subjer.t to approval by the City) .
The City reserves the right to reject any and all bids. No contingent
provision may be included in any bid.
All expenses,. including, without limitation, bond printing, the Trustee's
authentication fee, financial consultant's fee and the fee of Smith, Williams,
Friday, Eldredge & Clark, Bond Counsel, upon whose approving opinion the bonds
will be issued, will be paid by the City.
All bids must be submitted on the Official Bid Form.
A certified or cashier's check, in an amount equal to 2% of the principal
amount of the bonds , must be enclosed with each bid , to be kept by the City a s
liquidated damages in the event that the bidder is awarded the sale of the bonds
and fails. to complete the purchase. Interest will not be paid on good faith
checks , but good faith checks of unsuccessful bidders will be promptly returned .
Sealed bids will be received until the date and time specified above and
each bid shall be enclosed in a sealed envelope marked on the outside "Proposal
for City of West ME mphis ,Arkansas , Public Utility Refunding and Improvement
Revenue Bonds, dated May 1, 1976, Series 1976" and addressed to The
Honorable Joyce Ferguson, Mayor, West Memphis, Arkansas. The bids will
be opened at that time in the meeting place of the City Council, City Hall,
West Memphis , Arkansa s .
The award, if any, will be made within 24 hours after the receipt of
bids, and the City reserves the right to withhold the award for 24 hours.
Additional information and copies of Official Bid Forms may be obtained
from the undersigned or from UMIC, Inc. , P. O. Box 3783, Memphis, Tennessee
3 8103 .
This day of
1976.
CITY OF WEST MEMPHIS, ARKANSAS
By:
Mayor
i
~r
Page 9
Section 3. The 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 bonds may be executed by the facsimile signature of the Mayor and the
interest coupons attached to the bonds may be executed by the facsimile
signature of the Mayor. Any facsimile signature of the Mayor shall have the
same force and effect as a manual signature. The bonds must be
executed by the manual signature of the City Clerk. The bonds, togel:Iier
with interest thereon, shall be payable solely from the Public Utility Revenue
Bond Fund, as hereinafter set forth, and shall be a valid claim of the holders
thereof only against such fund and the revenues pledged to such fund, which
revenues are hereby pledged and morgaged for the equal and ratable payment
of the bonds , and shall be used for no other purpose than to pay the principal,
interest, and trustee's and paying agent's fees on the bonds , except as otherwise
specifically provided i.n this Ordinance . The bonds shall not be general
obligations of the City, but shall be special obligations, the principal of and
interest on which are secured by a pledge of net revenues (gross revenues
less operation and maintenance expenses) derived from the operation of the
System: The bonds and interest thereon shall not constitute an indebtedness
of the City within any constitutional or statutory limitation.
Section 4. The bonds and coupons 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:
UNITED STATES OF AMERICA
STATE OF ARKANSAS
COUNTY OF CRITTENDEN
CITY OF WEST MEMPHIS
PUBLIC UTILITY REVENUE REFUNDING AND IMPROVEMENT BOND,
SERIES 1976
No .
KNOW ALL MEN BY THESE PRESENTS:
$5,000
That the City of West Memphis , Crittenden County, 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 as hereinafter 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 May,' 19 ,
and.to pay solely from the special fund .interest thereon at the rate of
percent ( %) per annum from the date hereof until paid. Interest is
payable semiannually on May 1 and November 1 of each year, commencing
~. November 1 , 1976. Principal and interest are payable at the principal office
of (the "Trustee"
and "PayingAgent"). 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 as bond registrar.
This bond is one of an issue of Public Utility Revenue Refunding and
Improvement Bonds, Series 1976, aggregating $5,730,000 in principal amount,
dated May 1, .1976, all of Tike tenor and effect except as to number, denomination,
rate of interest , maturity and right of prior redemption. (the "bonds ") , issued for
the purpose of refunding bonds previously issued, financing the construction and
equipment of extensions, betterments and improvements (the "improvements") to
the. City's Public Utility System (an electric, water and sewer system operated
as a single municipal undertaking (the "System")), and paying necessary expenses
incidental thereto and to the issuance of the bonds.
Page 11
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 1933, as amended, Act No. 132 of 1933, as amended, Act No. 297 of 1937,
as amended, and Act No. 145 of 1967, as amended, and 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), and pursuant
to Ordinance No. ,duly adopted by the City Council and approved on the
day of
1976 (the "Authorizing Ordinance") , and do
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 net revenues of the System. An amount ~of
System revenue s sufficient to pay the principal and interest on the bonds is to
be set aside in a special fund for that purpose identified as "Public Utility
Revenue Bond Fund, " created by the Authorizing Ordinance , to which reference
is hereby made for a statement of the nature and extent of the security and the
rights and 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 services
of the System which shall be sufficient at all times at least to provide for the
payment of the reasonable expenses of operation and maintenance of the System,
to provide for the .payment , when due , of the principal of and interest on the
bonds , with Trustee's and Paying Agent's fees , as the same become due and
payable , to maintain required reserves , and to make required deposits for the
depreciation of the System .
The bonds are subject to redemption prior to maturity, at the option
of the City, in whole or in part, with there to be no partial redemption of any
bond, in inverse numerical order, as follows: (a) from proceeds of the bonds
in excess of amounts needed to accomplish the refunding and the improvements,
on any interest payment date, at a price of the principal amount of the bonds
being redeemed. plus accrued interest to the date of redemption; (b) from funds
from any source on any interest payment date on and after May 1, 1988, at a
price of the principal amount of the bonds being redeemed, plus accrued interest
to date of redemption, plus a premium as follows;
Page 12
3% if redeemed May 1,
2 1/2% if redeemed May 1 ,
2% if redeemed May 1,
1 1/2% if redeemed May 1,
1% if redeemed May 1,
1/2% if redeemed May 1,
No premiu m if redee med May
1988 or
1989 or
1990 or
1991 or
1992 or
1993 or
1, 199
November 1 , 1988;
November 1, 1989;
November 1, 1990;
November 1, 1991;
November 1 , 1992;
November 1 , 1993;
4 or thereafter.
Notice of the call for redemption shall be published one time in a
newspaper of general circulation throughtout 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 addition, notice shall be given
by certified or registered mail to the registered owner 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 ca 11 .
This 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 eridors.ed hereon, nothing contained in this bond or
in the Authorizing Ordinance shall affect or impair the negotiability of this bond,
and this bond shall be deemed a negotiable instrument under the laws of the
State of Arkansas. This bond is issued with the intent that the laws of the State of
Arkansas will govern its construction.
This bond shall not be valid until it shall have been authenticated by
the Certificate hereon duly signed by the Trustee.
IT IS HERi,I3Y CERTIFIED, RECITED AND DECLARED that all acts,
conditions and things required to exist, happen and to be performed precedent
to and in the issuance of the bonds have existed , have happened and have been
performed in due time, form and manner, as required by law; that the indebtedness
Page 13
represented by the bonds does not exceed any constitutional or statutory
limitation; and that sufficient revenues have been pledged to and will be set
aside for the payment of the principal of and interest on the bonds .
IN WITNESS WHEREOF , the City of West Memphis , Arkansas , by its
City Council, has caused this bond to be signed by the Mayor and City Clerk
thereof (with the facsimile signature of the Mayor and the manual signature of
the City Clerk) and sealed with the seal of the City, and has caused the
interest coupons attached to be signed by the facsimile signature of the Mayor,
all as of the first day of May, 1976.
CITY OF WEST MEMPHIS , ARKANSP,S
ATTEST:
By (facsimile signature)
Mayor
City Clerk
(SEAL)
Page 14
(Form of Coupon)
No .
On the first day of (May 1) (November 1) , 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 fund 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
• ,being six (6)
months interest then due on its Public Utility Revenue Refunding and Improvement
Bond, Series 1976, dated May 1, 1976, and numbered
CITY OF WEST MEMPHIS, ARKANSAS
By (facsimile signature)
Mayor
On each of the bonds shall appear the following;
CERTIFICATE OF AUTHENTICATION
This is one of the bonds of the issue of the City of West Memphis ,
Arkansas , Public Utility Revenue Refunding and Improvement Bonds , Series 1976 ,
dated May 1, 1976, described within.
By
(Authorized Signature)
Page 15
PROVISIONS FOR REGISTRATION AND RECONVERSION
This bond may be registered as to principal alone on books of 'the City,
kept by the Trustee as bond registrar, upon presentation hereof to 'the bond registrar,
which shall make mention of such regis'tra'tion in 'the registration blank below, and
this bond may thereafter be ~transf~rred 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 there-
after 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 registratiori of
this bond as 'to principal, 'the appurtenant in'teres't 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
in 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 o~~3--er 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 may be reconverted into a
coupon. bond at the written request of 'the registered owner and upon presentation
at the office of said bond registrar. Upon sur.,h reconversion the coupons repre-
stinting the .interest to become due thereafter to the date of maturity will again be
Page 16
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. The expense, if any, for a bond registered or
reconverted to bearer, shall be paid at the expense of the owner.
- -- -- -_.-- -~ti'Iann~~r o[ Si~_rnaturc of
Date of Rey istrati~n I~1~im~~ or. Rec istere~l Owner __R~ lst<<~tio:i }3~~tr_'. R~~c~i:;tr3r
Page 17
Section 5 . The rates to be charged for the services furnished by
the System, heretofore fixed by ordinances of the City duly adopted and
approved, and the conc]itions, rights and obligations pertaining thereto, as
set forth therr~in, 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
independent certified public accountant a certificate that the not revenues of the
System (net revenues being defined as gross revenues less the expenses of
operation and maintenance of the System, including all expense items properly
attributable to the operation and maintenance of the System under generally
accepted accounting principles applicable to municipal electric, water and
sewer systems), with the reduced rates, will always be equal to the amount
required to be deposited in the Depreciation Fund plus at least 200% of the
average annual principal and interest requirements on all outstanding bonds
payable from the revenues of the System. the City further covenants and agrees
that the rates if necessary, from time to time, shall be increased to that
amount which will produce net revenues at least sufficient to pay principal,
interest and Trustee's and Paying Agent's fees when due , on all bonds to which
System revenues are pledged, make required deposits into the Depreciation
Fund, and otherwise comply with the provisions of this Ordinance and all
ordinances authorizing bonds .
Section 6. 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
department, agency .or instrurnc~rlCality and shall be paid for as the charges therefor
accrue. the revenues so received shall be deemed to be revenues derived from
the operation of the System and shall be used and accounted for in the same
Page 18
manner as any other revenue derived from the operation of the System . Nothing
herein however 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.
Section 7. The System shall be continuously operated as a revenue
producing undertaking. All moneys received from the operation of the System
shall be deposited by him in such depository or depositories for the City as
may be lawfully designated from- time to time by the City Council, but
which must hold membership in the Federal Deposit Insurance Corporation.
All deposits shall be in the name of the City and shall be so designated as to
indicate the particular funds to which the revenues belong.
Section 8. Public Utility Fund. All revenues derived from
the operation of the System shall be paid into a special fund, which is
hereby created and designated "Public Utility Fund. " The revenues in the
Public Utility Fund are hereby pledged and shall be applied to the payment
of the reasonable and necessary expenses of operation and maintenance of
• the System, to the payment of the principal of and interest on the bonds, to
the providing of the Depreciation Fund, and otherwise as in this Ordinance
expressly. authorized.
Section 9. Public Utility Operation and Maintenance Fund.
There shall be paid from the Public Utility Fund into a fund which is hereby
created and designated "Public Utility 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 System for such month and
from which disbursements shall be made only for those. purposes . Fixed annual
Page 19
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 said fund, the amount of any deficiency shall be
added to the amount otherwise required to be transferred and paid into said
fund in the next succeeding month. If in any fiscal year a surplus shall be
accumulated in the Operation and Maintenance Fund over and a?~ove the amount
which shall be necessary to defray the reasonable and necessary costs of
operation, repair and maintenance of the System during the remainder of the
then current fiscal year and the next ensuing fiscal year, such surplus may be
transferred and deposited in the Bond Fund (hereinafter created) or in the
Depreciation Fund (hereinafter created); provided, however, that any such
transfer into the Bond Fund shall be in addition to all other payments required
to be made into the Bond Fund .
Section 10. Public Utility Revenue Bond Fund . (a) After making the
monthly deposit in the Operation and Maintenance Fund, there shall be
transferred from the Public Utility Fund into a special fund which is hereby
created and designated "Public Utility Revenue Bond Fund" (the "Bond Fund") the sums
in the amounts and at the times hereinafter stated in subsection (b) for the
purpose of providing funds for the payment of the principal of and interest
on the bonds herein authorized, with the Trustee's and Paying Agent's fees ,
and for the maintenance of a debt service reserve .
(b) There shall be paid from the Public Utility Fund into the Bond Fund,
beginning 'on the first business day of the month immediately following the
month in which the bonds are delivered, and continuing on the first business
Page 20
day of each month thereafter until all outstanding bonds of this issue with
interest thereon have been paid in full, or provision made for such payment ,
a sum equal to one-sixth (1/6) of the next installment of interest and one-twelfth
(1/12) of the next installment of principal, plus such additional sums as
necessary to provide for the Trustee's and Paying Agent's fees , on all
~+ outstanding bonds; provided, however, that should the debt service reserve
(established pursuant to SeCtlon 13 hereof and required hereby to be maintained
in the Bond Fund) ever become impaired or be reduced below the required
level of an amount equal to the average annual principal and interest require-
ments on the bonds, the required monthly payment shall be increased, until
the impairment is cured or the debt service reserve is increased to the required
level, by transfer of the first available moneys from the Public Utility Fund
before any of the moneys in the Public Utility I'undshall be used for any other
purpose except for making the payments hereinabove required to be made into
the Operation and Maintenance Fund and into the Bond Fund.
(c) If the revenues of the System are insufficient to make the required
payment on the first business day of the following month into the Bond Fund,
then the amount of any such deficiency in the payment made shall be added to
the amount otherwise required to be paid into the Bond Fund on the first
business day of the next month.
(d) If for any reason the City shall fail at any time to make any
of the required payments into the Bond Fund, any sums then held as a debt
service reserve shall be used to the extent necessary in the payment of the
principal of and interest on the bonds , but such reserve shall be reimbursed
from the Public Utility Fund before any of the moneys in the Public Utility
Fund shall be used for any other purpose except for making the payments
hereinabove required to bemade into the Operation and Maintenance Fund and
into the Bond Fund. The debt service reserve shall be used solely as herein provided.
(e) When the moneys held in the Bond Fund, including the debt service
reserve, shall be and remain sufficient to pay the principal of and interest on
all bonds then outstanding, and the Trustee's and Paying Agent's fees, the
Treasurer shall not be obligated to make any further payments into the Bond Fund.
Page 21
(f) All moneys in the Bond Fund shall be used solely for the purpose
`r
of paying the principal of and interest on the bonds , and the Trustee's and Paying
Agent's fees, except as herein specifically provided. If a surplus shall exist
in the Bond Fund over and above the amount required for making all principal
and interest payments during the succeeding twelve months on all outstanding
bonds , and the Trustee's and Paying Agent's fees , and over and above the debt
service reserve, such surplus may be applied to the payment of the principal of
and interest on any bonds that may be called for redemption prior to maturity.
(g) It shall be the duty of the Treasurer to withdraw from the Bond Fund
at least ten (10) days before the maturity date of any bond or interest coupon
issued hereunder and to deposit with the Paying Agent a:~. amount equal to the
amount of such bond or coupon for the sole purpose of paying the same, together
with the customary Trustee's and Paying Agent's fees, and no withdrawal of
funds from the Bond Fund shall be made for any other purpose except as otherwise
authorized in this Orcli.nance,
(h) The bonds shall be specifically secured by a pledge of all the
revenues required to be placed into the Bond Fund. This pledge in favor of
the bonds is hereby irrevocably made according to the terms of this Ordinance,
and the City and its officers and employees shall execute, perform and carry
out the terms thereof in strict conformity with the .provisions of this Ordinance.
Section 11 . Public Utility Depreciation Fund. After making the
required payments into the Operation and Maintenance Fund and the Bond Fund,
there shall be paid from the Public Utility Fund into a fund which is hereby
created and designated "Public Utility Depreciation Fund" (the "Depreciation
Fund") , on the first business day of the month immediately following the month
in which the bonds are delivered and continuing on the first business day of each
month thereafter while any of the bonds are outstanding, 3% of the gross revenues
of.the System for the preceding month, The moneys in the Depreciation Fund
shall be used solely for the purpose of paying the cost 'of replacements made
Page 22
necessary by the depreciation of the System; provided, however, in the event
that no other funds are available therefor the moneys in the Depreciation Fund
may be used to the extent necessary to prevent a default in the payment of the
principal of and interest on the bonds .
If in any fiscal year a surplus shall be accumulated in the Depreciation
Fund over and above the amount necessary to defray the cost of the probable
replacements during the then current fiscal year, and the next ensuing fiscal
year, such surplus may be transferred and paid into the Bond Fund; provided,
however, that such payments into the Bond Fund shall be in addition to all other
payments hereinbefore required to be made into the Bond Fund.
.Section 12. Any surplus in the Public Utility Fund after making all
disbursements required by the provisions of this Ordinance and making full
provision for the other funds .herein provided may be used, at the option of
the City, for the redemption of bonds prior to maturity in accordance with
the redemption provisions herein set forth, for constructing extensions,
betterments and improvements to the System, or for any other lawful municipal
purpose .
Section 13. (a) Upon delivery of the bonds there shall be transferred,
from fisnds or accounts being maintained pursuant to ordinances authorizing and
pertaining to the previous bonds (or any issue thereof), and deposited in the
Bond Fund, as a debt service reserve, hereby established, an amount equal to
the average annual principal and interest requirements on the bonds, which
amount shall be held and used solely for the purposes and as set forth in Section
10 hereof .
(b) After complying with subsection (a) above , any moneys now being
held in any fund or account being maintained pursuant to the ordinances
authorizing and pertaining ,to the previous bonds (or any issue thereof) , shall
be transferred to the corresponding fund or funds created and to be maintained
pursuant to the provisions of this Ordinance .
Section 14. The City hereby agrees that all payments on the bonds and
interest shall be made only through the Paying Agent. All bonds paid at maturity
or redemption prior to maturity shall be canceled when such payment is made,
p;+yc 7.3
together with x+11 uc++n~~turc:cl coupons apl;crt~+lnlnc.7 thereto, and ;:hall ++ot be rc:l:;:;uc:d.
X111 unpaid interest coupons maturing on or prior to the date of such payment
shall continue to be payable to the respective bearers thereof.
Section l5. As long as any of the bands authorized and issued under
and pursuant to the provisions of this Ordinance arc outstanding, the City shall
not issue or attempt to Issue any bonds chimed to be entitled to a priority cat
lien on the revenues of the System over the lien securing the bonds of this issue.
Nothing contained in this Ordinance shall be construed to prevent the issuance
by the City of additional bonds to finance or pay the cost of constructing any
future e~.~tensions, betterments or improvements to the System; provided, however,
the City shall not authorize or issue any•such additional bolds rail}:i:~g on a
parity with these bonds unless and until 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) net revenues of the System far the fiscal }'ear immediately
preceding the fiscal year in which it is proposed to issue such additional bonds
shall equal not less than 130%, of the average annual principal and interest
requirements on the bonds and the bonds proposed to be issued, or (2) if the City
shall have increased its rates or charges imposed for services of the System
prior to the issuance of additional bonds and subsequent to the first day of such
preceeding year, there may be added to the net revenues of such fiscal year the
additional net revenues which would have been received from the operation of the
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, in which event
the net revenues of the System for such fiscal year as so calculated shall equal
not less than 150% of the average annual principal and interest requirements on
the bonds and the bonds proposed to be issued.
1'a yr ?. 4
The term "net revenues" as used in this Sect ton sh711 mean dross revenues
of the System less the amounts required to pay the cost of opcrc~tic~n, mainte:narrce
and repair of the System.
~ihC i)dd1LlUnal bUnd5, th(? 1:iStranCC Of ~'~'hich 1S r('.'itll('tCd and c'Ui`.'lltlOn('d
by this Scr.tion, sh<~11 be unclerstoad to mc~~n k)onds pay~hlc iro:;, the -ev(~nues
of the System on a parity with thc?se bonds and ::hall not }:c~ d_~erned to include
other abliyt~tions the security and source of payment of '.vhich~ar(: subordir,nte
an(1 subject to the priority of tl)esc bonds.
Section 16. It is covenantee: and a~recd by the City and with the holders
and registered ov~'ners of the bonds, or any of them, tht)t the City ~~:ill f~~ithfully
and punctually perform all duties witi) reference to the S,r~tc~nl required by the
Constitution and laws of the State of Arkansas, including tha charging and
collecting of reasonable and sufficient rates, as herein specified, lawfully
established for services rendered by the System, the segregating of the
revenues of the System as herein required and the applying of th(~ revenues to
the respective funds herein created and referred to.
Section 17. The bonds authorized hereby and issued hereundc-r shall
be subject to redemption prior to maturity in accordance with the tc rms sc t
out in the bond forlt).
Section 18. The City will keep proper books of accounts an-:
records (separate from all other records and accounts) in :vhich r_omplete ~~ncl
correct entries shall be made of all transactions relating to the oper~~tion of the
System, and such boo}:s shall be available for inspection by the h~~lcic?r oI any
of the bonds at rcasonal~lc limes and unc:er reasonable circumst~~n; es. The CitS•
agrees to have thc?sc~ r(.'cc)rd_; audited 1)y an incicpendeatit certified }>u!)lic~
account~-nt t-t least once (?ach yc?ar, and ~-~ copy c,f thc~ auc}it shell i)c? (le~liv:?red
Page 25
to the Trustee and made available to interested holders and registered owners.
In the event the City fails or refuses to make the audit, the Trustee, or any
holder and registered- owner of the. bonds may have 'the audit made , and the
cost thereof shall be charged against the Operation and Maintenance Fund.
Section 19. The City covenants and agrees that it will maintain .
the System in good condition and operate the sa me in a n efficient ma nner a nd
at reasonable cost. While any bonds authorized hereby are outstanding; the
City agrees that it will insure and at all times keep insured, in the amount of
the full insurable value thereof, 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 System, to the extent that such properties would
be covered by insurance by private companies engaged in similar types of
businesses, against loss or damage thereto from fire, lightning, tornado, winds,
riot , strike , civil commotion , malicious damage , explosion , extended coverage
and against any other loss or damage from any other causes customarily insured
against by private companies engaged in similar types of businesses. The in-
surance policies are to be taken with companies approved by the Trustee, are to
carry a clause making them payable to the Trustee as an additional insured as
its interest may appear, and .are either to be placed in the custody of the Trustee
or satisfactory evidence of the insurance shall be filed with the Trustee. In the
event of loss , the proceeds of such insurance shall be applied solely toward
the reconstruction, replacement or repair of the System, and in such event the
City will, with reasonable promptness , cause to be commenced and completed
the reconstruction, replacement and repair work. If such proceeds are more than
sufficient for such purposes , the balance remaining shall be deposited to the
credit of the Public Utility 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 Public Utility
Page 26
Fund. Nothing herein shall be construed as requiring the City to expend any
funds for operation and maintenance of the System or for premiums on its insurance
which are derived from. sources other than, the. operation of the System , but nothing
herein shall be construed as preventing the City from doing so.
Section 20. The City covenants and agrees that so long as any
bonds authorized hereby are outstanding , that it will not mortgage , pledge or
otherwise encumber the System, or any part thereof or any revenues derived
from the operation thereof, except as herein specifically provided, and will
not sell, lease or otherwise dispose of any substantial portion of the same..
Section 21. There sriall be a statutory inorgage lien upon the
water facilities , which shall exist in favor of the holders and registered owners
of the bonds until payment in full of the interest on anal principal of the bonds;
provided, however, that such statutory mortgage lien shall be interpreted
according to the decision of the Supreme Court of the State of Arkansas in
City of Harrison v. Braswell, supra.
Section 22. The owner or owners of all improved property lying
within the area that will be served by the sewer facilities are hereby directed
and required, upon written request from the City, to connect .all toilet and
waste water facilities of such improved property with. the sewer facilities .
The required notice by the City shall be given at least thirty (30) days prior to
the final date for connection, and if any property owner shall fail to make such
connection after having been so requested in writing, the City hereby covenants
and agrees to institute appropriate proceedings in a court of competent juris-
diction to compel such connection. Furthermore, any property owner who fails
tir refuses to connect his improved property with the sewer facilities after
having been so requested by the City shall be guilty of a misdemeaner and
upon conviction shall be fined in any sum not less than $2.00 and not more
than $10.00 , and each day's failure or refusal after the expiration of the time
Page 27
fixed in the notice to make the connection shall be a separate offense; provided,
however, that the provisions hereof pertaining to a misdemeanor shall be effective
only in the event that the City Health Officer, or other duly designated individual
or board, has found and declared that such failure on the part of any particular
property owner constitutes a hazard to the public health and safety of the City
and its inhabitants .
Section 23. (a) The City covenants and agrees that the holders and
registered owners of the bonds shall have the protection of the provisions of
Section 13 of Act No. 132 of the Acts of Arkansas of 1933, as amended (Ark. Stat.
Ann. §19-4113 (Reel. 1968)) ("Act No. 132"), and the City will diligently proceed
to enforce the lien of unpaid sewer charges against the premises served by the
sewer facilities and to collect the amount due, together with the penalty and
expenses authorized by Act No. 132. And , if the City shall fa it to proceed
within thirty (30) days after written request shall have been filed by the Trustee,
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, proceed to enforce the lien in accordance with and pursuant
to the authorization of Act No. 132.
(b) 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%) in principal amount of the bonds then
outstanding shall, apply in a proper action to a court of competent jurisdiction
v
Page 2 8
for the appointment of a receiver to administer the 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 provide for the payment of the expenses of operation, main-
tenance and repair and 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 System shall revert to the City.
(c) No holder or registered owner of any of the outstanding bonds
shall have any right to institute any suit, action, mandamus or other proceed-
ing in equity or in 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 then outstandirr~ 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 rea son-
able 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 tl~ bonds
hereby secured shall have any right in any manner whatever by his or their
action to affect, disturb or prejudice the security of this Ordinance, or to
N
Page 2 9
enforce any right hereunder except in the manner herein provided, that all
proceedings at law or in equity shall be instituted, had and maintained in
the manner herein provided and for the benefit of all holders and registered
owners of the outstanding bonds and. coupons, 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 .
(d) 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 anyof the bonds or coupons appertaining thereto,
and any -such suit, action or proceeding instituted by the Trustee shall be
brought in its name for the benefit of al•1 the holders and registered owners
of such bonds and coupons, subject to the provisions of this Ordinance.
(e) 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.
(f) No delay or omission of the Trustee or of any holders or
registered owners 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 Trustee and to the holders and registered
owners of the bonds , respectively, may be exercised from time to time and as
often as may be deemed expedient.
(g) The Trustee may, and upon the written request of the holders and
registered owners of not less than fifty percent (50%) in principal amount of the
bonds then outstanding shall, waive any default which shall have been remedied
before the entry of final judgment or decree in any suit, action or proceeding
~ '
Page 3 0
r..
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.
Section 24. When 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 them to the purchaser upon
payment of the purchase price, plus accrued interest from the date of the bonds
to the date of delivery ("total sale proceeds"). The manner of payment of the
purchase price may be set forth in a letter of delivery instructions executed by
the Mayor and delivered to the Trustee.
(a) The portion of the total sale proceeds ne,ce,ssary to provide for the
refunding of the previous bonds shall be invested, as set forth in the letter
of delivery instructions or as set forth in the Trust Agreement (identified below) ,
in direct or fully guaranteed securities of the United States (being any securities
or guaranties of securities. supported by a pledge of the full faith and credit
of the United States) with such maturities and redemption provisions as, together
with available cash, will produce, as needed, sufficient moneys to pay principal,
interest , anal Trustee's and Paying Agent's fees on the previous bonds , as due
and payable. The investment securities and cash, if any, shall be identified
in a Trust Agreement executed by the Mayor and City Clerk, which Trust Agree-
ment shall provide that the investment securities, and cash, if any, shall be
held in trust for the security of the previous bonds and shall provide for the
proper handling and disbursement of moneys held in trust thereunder for the pay-
ment of principal, interest, and Trustee's and Paying Agent's fees on the previous
bonds , as due and payable . The Mayor and City Clerk are authorized and
directed to enter into the Trust Agreement, and such writings as may be
incidental thereto, incorporating and implementing the provisions of this Section.
All moneys remaining after payment and redemption of all previous bonds shall
be remitted to the City for deposit and handling as set forth in this Ordinance.
Page 31
(b) The balance of the total sale proceeds shall be handled an:.i disbursed as
follows:
(1) The accrued interest shall be deposited in the Bond Fund.
(2) The remaining balance of the total sale proceeds shall be deposited
in a special account of the City designated "Construction Fund" ("Construction
Fund") to be establis}red in a bank that is a member of the Federal Deposit
Insurance Corporation selected by the City. The Construction Fund shall be
disbursed solely in payment of costs and expenses of accomplishing the
improvements, including, without limitation, engineering, legal, expenses of
issuing the bonds, and other expenses, but only on warrants, checks or vouchers
signed by the Mayor or the City Clerk or the City Treasurer and the Manager of
the System briefly specifying the nature of the disbursements or expenditure,
and accompanied by a certificate signed by the consulting engineer that the
obligation has been incurred and to whom it is owed, except that no such
certificate shall be required before payment of engineering fees, legal fees
and the expenses of issuing the bonds.
When the construction of the improvements to the System has been
completed, this fact shall be evidenced by the filing with the Trustee and with
the depository in which the Construction Fund is deposited of a certificate
signed by the Manager of the System and by the consulting engineer. Upon
receipt of the above-described certificate, the depository with which the
Construction Fund is deposited shall pay or transfer any remaining balances,
pursuant to the written direction of the City, into the Bond Fund. Said payment
or transfer shall apply against current debt service requirements of the bond fund.
Section 25. (a) Moneys held for the credit of the debt service reserve
in the Bond Fund shall be continuously invested and reinvested pursuant to the
direction of the City in direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America, in certificates of deposit of banks that are members of the Federal
Deposit Insurance Corporation, or other investments as may be, from time to
Page 32
time, permitted by law, which shall mature, or which shall be subject to
redemption by the holder thereof, at the option of such holder, not later than
ten (10) years after the date of such investment .
(b) Moneys held for the credit of any other fund may, at the option of
the City, be invested and reinvested pursuant to the direction of the City in
direct obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America, in certificates
of deposit of banks that are members of the Federal Deposit Insurance Corporation,
or other investments as may be from time to time permitted by law, 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 held for
the credit of the particular fund will be required for,the purposes intended.
(c) Obligations so purchased as an investment of moneys in any such
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 investment shall be credited to such
fund, and any loss resulting from such investment shall be charged to such fund.
(d) Moneys so invested in United States Government obligations, as
above defined, -need not be secured by the depository bank.
Section 26. Bonds and coupons for the payment or redemption of which
.moneys or investment securities, as hereafter defined in this Section, shall have
been deposited in the Bond Fund (whether upon or prior to the maturity or the
redemption date of such bonds) shall be deemed to be paid within the meaning
of this Indenture; provided, however, that if such bonds are to be redeemed
prior to the maturity thereof, notice of such redemption shall have been duly
given. "Investment securities" shall mean direct or fully guaranteed obligations
of the United States of America maturing on or prior to the maturity or
redemption date of the bonds and in determining the sufficiency of the deposit
there shall be considered the principal amount of such investment securities and
interest to be earned thereon until the maturity of such investment securities .
Page 33
The City may at any time surren-der to the Trustee for cancellation
by it any bonds previously authenticated and delivered hereunder, together
with any unpaid coupons thereto belonging, which the City may have acquired
in any manner whatsoever, and such bonds and coupons , upon such surrender
and cancellation, shall be deemed to be paid and retired.
Section 27. In the event the office of Mayor, City Clerk, City
Treasurer, Manager of the System 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 .
Section 28. 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 bonds to be subject to federal income
taxation. Without 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 as "arbitrage bonds" within
the meaning of Section 103 (d) of the Internal Revenue Code of 1954, as amended.
Section 29. The provisions of this Ordinance shall constitute a
binding contract between the City and the holders and registered owners of the
outstanding bonds and coupons issued hereunder, and the City will at all times
strictly adhere to the terms and provisions horeof and fully discharge all of its
obligations hereunder. Subject to the terms and provisions contained in this
Section and not otherwise, tyre holders and registered owners of not less than
~. '
Page 34
seventy-five percent (75°i,) in aggregate principal amount of the bonds then
outstanding shall have the right, from tirne to time, anything contained in this
Ordinance to the contrary notwithstanding, to consent to and approve the adoption
by the City of such ordinance supplemental hereto as shall be necessary or
desirable for the purpose of modifying, altering, amending, adding to or re-
scinding, in any particular, any of the terms or provisions contained in this
Ordinance or in any supplemental ordinance; provided, however, that nothing
herein contained shall permit or be construed as permitting (a) an extension
of the maturity of the principal of or the interest on any bond issued hereunder,
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 the appropriate provisions of 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 30. The Mayor is hereby directed to publish for one insertion
in 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:
`r
Page 35
NOTICE
Notice is hereby given that the City Council of the City of West
Memphis , Arkansas , .has adopted the ordinance hereinafter set out; that the
~` City contemplates the issuance of Public Utility Revenue Refunding and
t Improvement Bonds described in the Ordinance; that any person interested may
appear before the Council on the day of 1976, 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 1976.
Mayor
ti •~ ~ ~ ~ ,
Page 36
Section 31. 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
and registered owners of not less than ten percent (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)
days notice in writing to the City Clerk and the majority in principal amount of
the holders and registered owners of the outstanding bonds of this issue at any
time, with or without cause., may remove the Trustee. 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 and registered owners of the outstanding bonds
of this issue 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 and registered owners of the outstanding bonds
of this issue 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 original Trustee and any
successor. Trustee shall file. a written acceptance and agree me nu to execute 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 holders and registered owners 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 old Trustee which has resigned or
been removed shall cease to be Paying Agent.
• ~`_ '~ ~ ,
Page 3 7
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 bonds
authorized by this Ordinance shall be issued and delivered.
Section 33. If any provision of this Ordinance shall for any reason
be declared to be illegal or invalid, such declaration shall not affect the
validity of the remainder of the provisions of the Ordinance and to that event all
provisions of this Ordinance are hereby declared to be severable .
_ Section 34. All ordinances, resolutions and parts thereof in conflict
herewith, including specifically any parts of the ordinances and rc solutions
authorizing and pertaining to the previous bonds, that are in conflict herewith
are hereby repealed to the extent of such conflict.
Section 3S . It is hereby ascertained and declared that an immediate need
exists for the refunding of the indebtedness evidenced by the previous bonds,
in order that the savings and other significant benefits may be realized. 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: ~ ~ /~/2 r ~' 1976.
ATTEST:
A PPROVE I):
i
--.._.
_ ~_'_' _T "~ Mayor
City Clerk
(SEAL)
C1:IZTIFICATE
The undersigned, City Clerl; of the City of West Memphis , Arkansas
hereby certifies that the foregoing pages, numbered 1 to 37, inclusive, arcs
a true and perfect copy of Ordinance No . 862 ,adopted at a regular
session of the City Council of the City held in the regular meetuig place of the
Council in the City at 1:30 o'clock p .m. , on the 15th day of April
1976, and that the Ordinance is of record in Ordinance Record Book No. ]1~ ,
Page 16 ,now in my possession.
1976.
GIVEN under my hand and seal on this 26th day of April ,
City Clerk
(SEAL)