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1831w ~ w ~ ORDINANCE NO. ~ i AN ORDINANCE APPROVING AN INDUCEMENT AGREEMENT WITH STAFFORD RAILSTEEL; LLC, PROVIDING FOR INCENTIVES TO STAFFORD RAILSTEEL, LLC TO LOCATE ITS FACILITY IN THE CITY OF WEST MEMPHIS, ARKANSAS; APPROVING CREATION OF LOCAL GO`~],RNMENT RESERVE FUND TRUST. TO HOLD AND DISBURSE ~-LJNDS RELAITNG TO CERTAIN OF THE INCENTIVES OFFERED TO STAFFORD RAILSTEEL, LLC; DECLARINGANEMERGENCY AND FOR OTHER PURPOSES. yVHERF,AS, Stafford Railsteel, LLC, a limited liability company ("Stafford") plans to acquire control of approximately 1,200 acres ofland (the "Site") located in Crittenden County, Arkansas (the "Coup '), which has been annexed into the City of West Memphis, Arkansas (the "Ci ') and zoned appropriately for the intended use thereof by Stafford; yVHERF.AS, Stafford plans to construct a ferrous recycling facility on the Site with operations to include an electric arc furnace, a ladle metallurgy furnace, a continuous caster, preheat and reheat furnaces and a rolling mill, a rail welding facility, and other ancillary equipment, for the production ofhead-hardened steel rail and other steel products (the "Facilit '); WHEREAS, Stafford plans to develop the facility with an approximate total project cost and capital investment of $340 million and expects to employ in excess of 175 people at the Facility and to contribute substantially to the economic prosperity of the City and the County and to significantly benefit the City and County through the creation of needed jobs and by stimulating additional economic development; WHEREAS, Stafford has selected the Site and located it within the City based, in part, on the incentives and commitments offered by the City and the County; R'~~EREAS, the City desires that Stafford locate the Facility on the Site based, in part, on the positive economic impact associated with the Facility and the type of employment and expected average wage level at the Facility; WHEREAS, the City has determined that the potential jobs available at the Facility and the resulting payrolls and other economic benefits aze vitally important to the economic welfaze of the City, ~~ A~HEREAS, the City desires to proceed forwazd to memorialize the incentives offered to Stafford in an Inducement Agree (the "Agreement") and to set aside monies in a local government reserve fund trust established pursuant to the provisions of Ark Code Ann. § § 14-73- 101, et seq. (the "Trust") to fund the cost of the incentives agreed to by the City; WHEREAS, the City has determined that the total cost of its obligations under the Agreement will not exceed the excess revenues of the City for 1998; WHEREAS, the City is authorized to enter into the Inducement Agreement pursuant to the Municipalities and Counties IndustrialDevelopmentRevenueBondLaw(ArTc CodeAnn. §§ 14-164- 201, et seq.); and WHEREAS, the City desires to authorize the Mayor to execute and enter into the Agreement on behalf of the City and to take such action as may be necessary or desirable to establish the Trust. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF WEST MEMPHIS, ARKANSAS: SECTION 1. INDUCEMENT AGREEMENT -The City Council has reviewed the Agreement attached to this Ordinance as Exhibit "A" and incorporated herein by reference and understands all the provisions thereof, including the incentives to be offered to Stafford thereunder. The City Council has determined that the Agreement and the incentives set forth therein aze in the best interests of the City and aze necessary to promote the health, safety and welfare of the residents of the City. The Agreement and the incentives to be provided to Stafford set forth therein aze hereby approved by the City and the City Council hereby authorizes the Mayor to execute the Agreement in substantially in the form attached hereto together with such changes thereto as the Mayor may deem desirable or necessary and in the best interests ofthe City, his execution to constitute conclusive evidence of such approval. SECTION2. LOCAL GOVERNMENTRESERVEFUNDTRUST- Inorderto provide funds to meet the City's obligations to construct the infrastructure improvements described in the ' Agreement, the City Council hereby approves the establishment of a local government reserve fund pursuant to Arlc Code Ann. §§ 14-73-101, et seq. and appropriates the sum of $ ~ million to such fund for the 1998 fiscal year. The amount appropriated to the local government reserve fund as well as the cost of the obligations undertaken by the City pursuant to the Agreement, when considered in light of the City's other obligations for the 1998 fiscal year, do not exceed the City's revenues for the 1998 fiscal year. Pursuant to Arf~ Code Ann. §§ 14-73-101, et seq, the City additi nal approves and authorizes the Mayor to enter into an agreement establishing the Trust with ~ as Trustee. The funds appropriated by this Ordinance shall be placed into the Trust pursuant to an agreement inform and substance satisfactory to the Mayor and in compliance with Arkansas laW. At a mim'm~, however, the agreement establishing the Trust shall contain the following provisions: `{ (A) A description of the improvements to be undertaken by the City under the Agreement; 2 ~- 1. (B) A covenant that the reserve funds will not be used for any purpose other than the purposes described in the agreement creating the Trust; C A covenant by the trustee that all sums in the reserve fund will invested by the trustee () in a manner consistent with the "prudent man" rule, as authorized and defined in by Ark. Code Ann. §§ 28-71-105 and 28-71-106; (D) A covenant by the trustee to disburse the reserve funds only to the contractor or to a trustee for bonds or notes issued to finance the improvements or to disburse the reserve funds in such manner that they will be applied to the acquisition, construction, reconstruction, remodeling, equipping, extending, operating, maintaining orproviding the improvements described in the Agreement; (E) A term for the agreement creating the Trust which shall not exceed twenty-one (21) years; (F) A provision that each payment to the reserve fund shall be a separate contract with the trustee and shall specifically limit the amount of payments to the reserve fund in any fiscal year to the amount of the appropriation to the reserve fund for that fiscal year; and (G) A provision providing for the payment of the Trustee's fee to be paid from the reserve funds held in the Trust. SECTION 3. IlViPLEMENTATION OF INCENTIVES -The Mayor is hereby authorized to take all action required or permitted under Arkansas law to commence implementation of the incentives described in the Agreement including, without limitation, commencing construction of the infrastructure improvements described in the Agreement SECTION 4. REPEAL -This Ordinance repeals any other prior ordinance to the extent such other ordinance is in conflict with this Ordinance as to any part. SECTION 5. SEVERABILII'Y -The Provisions hereof 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 hereof. SECTION 6. EMER(IEENCY -The jobs and economic development to be provided by the project being constructed by Stafford are of paramount importance to the residents of the City. The construction of the Facility will provide substantial employment and payrolls, thereby alleviating unemployment and otherwise benefitting the public healthy, safety and welfare of the City and the inhabitants thereof Stafford's decision to construct its Facility in the City has been induced by the 3 • • 'J incentives set forth in the Agreement. Stafford is not in the position to proceed forward with the project unless the City has agreed to and executed the Agreement and if the Agreement is not executed immediately, Stafford inay be forced to back out ofthe project. It is accordingly found and determined by the City Council that an emergency does exist, and this Ordinance is being necessary for the preservation of the public peace, health and safety, shall be in force and effect immediately upon its approval and adoption by the City Council. PASSED: ~ ~ 1998. APPROVED: ~~ ~ ~--_ Mayor (SEAL) 4 CERTIFICATE The undersigned, City Clerk of the City of West Memphis, Arkansas, hereby certifies that the foregoing pages are-a true and perfect copy of Ordinance No. 183? passed at a sp e c is 1 session of the City Council, held at the regular meeting place of the City Council at 5:30 o'clock p .m.; on the 21St day of July , 1998, and that the Ordinance is of record in Ordinance Record BookNo. -- ,Page -- ,now in my possession. GIVEN under my hand and seal this 21st day of July , 1998. Cler (SEAL)