2324ORDINANCE NO. a3aL
AN ORDINANCE PROVIDING FOR THE ISSUANCE OF
MUNICIPAL AIRPORT REVENUE REFUNDING AND
IMPROVEMENT BONDS FOR THE PURPOSE OF
FINANCING AND REFINANCING THE COST OF
CONSTRUCTING IMPROVEMENTS TO THE CITY'S
AIRPORT FACILITIES; PROVIDING FOR THE PAYMENT OF
THE PRINCIPAL OF AND INTEREST ON THE BONDS;
PRESCRIBING OTHER MATTERS RELATING THERETO;
AND DECLARING AN EMERGENCY.
WHEREAS, the City of West Memphis, Arkansas (the "City") operates its
Municipal Airport (the "Airport"), and related properties and facilities, through its Airport
Commission (the "Airport Commission" or "Commission"); and
WHEREAS, the Airport Commission and the City Council have each determined
that improvements to the Airport, including particularly, without limitation, rehabilitation of an
existing runway (the "Improvements") should be made; and
WHEREAS, the City has outstanding its Municipal Airport Revenue Refunding
Bonds, Series 2007 (the "Series 2007 Bonds"); _arid
WHEREAS, the City Council has determined that it is in the best interest of the
City to refund the Series 2007 Bonds (the "Refunding"); and
WHEREAS, the City can accomplish the Improvements and the Refunding by the
issuance of its Municipal Airport Revenue Refunding and Improvement Bonds, Series 2013, in
the aggregate principal amount of $3,055,000 (the "Bonds"); and
WHEREAS, the Airport Commission has requested and recommended that the
City Council take the necessary steps to issue and sell the Bonds; and
WHEREAS, the City Council hereby finds. and declares that it would be in the
best interest of the City and its inhabitants that the Bonds be issued as requested by the Airport
Commission; and
WHEREAS, the Bonds (like the Series 2007 Bonds) will be secured by pledges -of
Airport Revenues (defined herein) and Surplus Utility Revenues (defined herein), subject to the
terms hereof; and
WHEREAS, the City is snaking arrangements for the sale of the Bonds to
Stephens Inc. (the "Purchaser"), at a purchase price of $3,016,269.20 (principal amount less net
original issue discount of $543.30 less underwriters discount of $38,187.50) plus accrued
interest (the "Purchase Price"), pursuant to a Bond Purchase Agreement (the "Agreement")
which has been presented to and is before this meeting; and
WHEREAS, the Preliminary official Statement, dated September 24, 2013,
offering the Bonds for sale (the "Preliminary official Statement") has been presented to and is
before this meeting; and
WHEREAS, the Continuing Disclosure Agreement between the City and
BancorpSouth Bank (the "Disclosure Agreement"), providing for the ongoing disclosure
obligations of the City -with respect to the Bonds, has been presented to and is before this
meeting;
Now, THEREFORE, BE IT ORDAINED by the City Council of the City of
West Memphis, Arkansas:
Section 1. The Improvements and the Refunding shall be accomplished. The
Mayor and City Clerk are hereby authorized to take, or cause to be taken, all action necessary to
accomplish the same and to execute all required:. contracts. The Series 2007 Bonds shall be
called for redemption on the date the Bonds are issued, or the first available date thereafter, at a
redemption price equal to the principal amount being redeemed plus accrued interest, if any.
Section 2. The Disclosure Agreement, in substantially the form submitted to
this meeting, is approved, and the Mayor is hereby authorized and directed to execute and deliver
the Disclosure Agreement on behalf of the City. The Mayor is authorized and directed to take all
action required on the part of the City to fulfill its obligations under the Disclosure Agreement.
Section 3. The City Council hereby finds and declares that the period of
usefulness of the Airport will be more ' than 30 years, which is longer than the term of the Bonds.
Section 4. The offer of the Purchaser for the purchase of the bonds from the
City at the Purchase Price for bonds bearing interest at the rates per annum, maturing and
otherwise subject to the terms and provisions hereafter in this ordinance set forth in detail is
hereby accepted and the Purchase Agreement, in substantially the form submitted to this
meeting, is approved and the Bonds are hereby sold to the Purchaser for the Purchase Price. The
Mayor is hereby authorized and directed to execute and deliver the Purchase ,Agreement on
behalf of the City and to take all action required on the part of the City to fulfill its obligations
under the Agreement.
Section 5. The Preliminary official Statement is hereby approved and the
previous use of the Preliminary official Statement by the Purchaser in connection with the sale
of the Bonds is hereby in all respects approved, ratified and confirmed, and the Mayor be, and is
hereby, authorized and directed, for and on behalf of the City, to execute the Preliminary official
Statement and the final official Statement in the name of the City for use in connection with the
sale of the Bonds as set forth in the Purchase Agreement.
Section 6. Under the authority of the Constitution and laws of the State of
Arkansas (the "State"), including particularly Arkansas Code of 1987 Annotated, Title 14,
Chapter 164, Subchapter 4, and Title 14, Chapter 199, Subchapter 1, City of west Memphis,
Arkansas Municipal Airport Revenue Refunding and Improvement Bonds, Series 2013, are
hereby authorized and ordered issued in the aggregate principal amount of $3,055,000 for the
purpose of accomplishing the Improvements and the Refunding, including costs incidental
0)
thereto, funding a debt service reserve and paying costs of issuance of the' Bonds. The Bonds
shall mature on May I in the years and in the amounts and shall bear interest as follows:
Year
(May1
Amount
Interest Rate
2014
$403000
1.000%
2015
9000
1.500
2016
905000
2.000
2017
90,000
2.000
2018
955004
2.000
2019
95,000
2.050
2020
100,00o
2.300
2021
1005000
2.550
2022
1053000
2.850
2023
1055000
3.000
2024
110,000
3.200
2025
110,000
3.350
2026
115,000
3.550
2027
120,000
3.650
2028
125,000
3.800
2029
130,000
3.950
2030
1351000
4.000
2031
1409000
4.000
2033
2955000
4.125
2038
8655000
4.500
The Bonds shall be dated November 1, 2013 and shall be issuable only as fully
registered bonds without coupons in the denomination of $5,000 or any integral multiple thereof.
Unless the City shall otherwise direct, the Bonds shall be numbered from 1 upward in order of
issuance. Each Bond shall have a CU S IP number.
The Bonds shall be registered initially in the name of Cede & Co., as nominee for
The Depository Trust Company ("DTC"), which shall be considered to be the registered owner
of the Bonds for all purposes under this Ordinance, including, without limitation, payment by the
City of principal of, redemption price, premium, if any, and interest on the Bonds, and receipt of
notices and exercise of rights of registered owners. There shall be one certificated, typewritten
Bond for each stated maturity date which shall be immobilized in the custody of DTC with the
beneficial owners having no right to receive the Bonds in the form of physical securities or
certificates. DTC ' and its participants shall be responsible for maintenance of records of the
ownership of beneficial interests in the Bonds by book -entry on the system maintained and
operated by DTC and its participants, and transfers of ownership of beneficial interests shall be
made only by DTC and its participants, by book -entry, the City having no responsibility therefor.
DTC is expected to maintain records of the positions of participants in the Bonds, and the
participants and persons acting through participants are expected to maintain records of the
purchasers of beneficial interests in the Bonds. The Bonds as such shall not be transferable or
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exchangeable, except for transfer to another securities depository or to another nominee of a
securities depository, without further action by the City.
If any securities depository determines not to continue to act as a securities
depository for the Bonds for use in a book -entry system, the City may establish a securities
depository/ book -entry system relationship with another securities depository. If the City does
not or is unable to do so, or upon request of the beneficial owners of all outstanding Bonds, the
City and the Trustee (hereinafter identified), after the Trustee has made provision for notification
of the beneficial owners by the then securities depository, shall permit withdrawal of the Bonds
from the securities depository, and authenticate and deliver Bond certificates in fully registered
form (in denominations of $5,000 or integral multiples thereof) to the assigns of the securities
depository or its nominee, all at the cost and expense (including costs of printing definitive
Bonds) of the City, if the City fails to maintain a securities depository/book-entry system, or of
the beneficial owners, if they request termination of the system.
Prior to issuance of the Bonds, the City shall have executed and delivered to DTC
a written agreement (the "Representation Letter") setting forth (or incorporating therein by
reference) certain undertakings and responsibilities of the City with respect to the Bonds so long
as the Bonds or a portion thereof are registered in the name of Cede & Co. (or a substitute
nominee) and held by DTC. Notwithstanding such execution and delivery of the Representation
Letter, the terms thereof shall not in any way limit the provisions of this Section or in any other
way impose upon the City any obligation whatsoever with respect to persons having interests in
the Bonds other than the registered owners, as shown on the registration books kept by the
Trustee. The Trustee shall take all action necessary for all representations of the City in the
Representation Letter with respect to the Trustee to at all times be complied with.
The authorized officers of the Trustee and the City shall do or perform such acts
and execute all such certificates, documents and other instruments as they or any of them deem
necessary or advisable to facilitate the efficient use of a securities depository for all or any
portion of the Bonds; provided that neither the Trustee nor the City may assume any obligations
to such securities depository or beneficial owners of Bonds that are inconsistent with their
obligations to any registered owner under this ordinance.
Interest on the Bonds shall be payable on May 1, 2014, and semiannually
thereafter on May 1 and November 1 of each year. Payment of each installment of interest shall
be made to the person in whose name the Bond is registered on the registration books of the City
maintained by BancorpSouth Bank, Stuttgart, Arkansas, as Trustee and Paying Agent (the
"Trustee"), at the close of business on the fifteenth day of the month (whether or not a business
day) next preceding each interest payment date (the "Record Date"), irrespective of any transfer
or exchange of any such Bond subsequent to such Record Date and prior to such interest
payment date.
Each Bond shall bear interest from the payment date next preceding the date on
which it is authenticated unless it is authenticated on an interest payment date, in which event it
shall bear interest from such date, or unless it is authenticated prior to the first interest payment
date, in which event it shall bear interest from November 1, 2013, or unless it is authenticated
during the period from the Record Date to the next interest payment date, in which case it shall
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bear interest from such interest payment date, or unless at the time of authentication thereof
interest is in default thereon, in which event it shall bear interest from the date to which interest
has been paid.
Only such Bonds as shall have endorsed thereon a Certificate of Authentication
substantially in the form set forth in Section 8 hereof (the "Certificate") duly executed by the
Trustee shall be entitled to any right or benefit under this ordinance. No Bond shall be valid and
obligatory for any purpose unless and until the Certificate shall have been duly executed by the
Trustee, and the Certificate upon any such Bond shall be conclusive evidence that such Bond has
been authenticated and delivered under this ordinance. The Certificate on any Bond shall be
deemed to have been executed if signed by an authorized officer of the Trustee, but it shall not
be necessary that the same officer sign the Certificate on all of the Bonds.
In case any Bond shall become mutilated or be destroyed or lost, the City shall, if
not then prohibited by law, cause to be executed and the Trustee may authenticate and deliver a
new Bond of like date, maturity and tenor in exchange and substitution for and upon cancellation
of such mutilated Bond, or in lieu of and in substitution for such Bond destroyed or lost, upon the
owner paying the reasonable expenses and charges of the City and Trustee in connection
therewith, and, in the case of a Bond destroyed or lost, his filing with the Trustee evidence
satisfactory to it that such Bond was destroyed or lost, and of his ownership thereof, and
furnishing the City and Trustee with indemnity satisfactory to them. The Trustee is hereby
authorized to authenticate any such new Bond. In the event any such Bond shall have matured,
instead of issuing a new Bond, the City may pay the same without the surrender thereof. Upon
the issuance of a new Bond under this Section, the City may require the payment . of a sum
sufficient to cover any tax or other governmental charge that may be imposed in relation thereto
and any other expenses (including the fees and expenses of the Trustee) connected therewith.
The City shall cause books to be maintained for the registration and for the
transfer of the Bonds as provided herein and in the Bonds. The Trustee shall act as the Bond
registrar.. Each Bond is transferable by the registered owner thereof or by his attorney duly
authorized in writing at the principal office of the Trustee. Upon such transfer a new fully
registered Bond or Bonds of the same maturity, of authorized denomination or denominations,
for the same aggregate principal amount will be issued to the transferee in exchange therefor.
No charge shall be made to any owner of any Bond for the privilege of transfer or
exchange, but any owner of any Bond requesting any such transfer or exchange shall pay any tax
or other governmental charge required to be paid with respect thereto. Except as otherwise
provided in the immediately preceding sentence, the cost of preparing each new Bond upon each
exchange or transfer and any other expenses of the City or the Trustee incurred in connection
therewith shall be paid by the City. The City shall not be required to transfer or exchange any
Bonds selected for redemption in whole or in part.
The person in whose name any Bond shall be registered shall be deemed and
regarded as the absolute owner thereof for all purposes, and payment of or on account of the
principal or premium, if any, or interest on any Bond shall be made only to or upon the order of
the registered owner thereof or his legal representative, but such registration may be changed as
hereinabove provided. All such payments shall be valid and effectual to satisfy and discharge
the liability upon such Bond to the extent of the sum or sums so paid.
5
d.
In any case where the date of maturity of interest on or principal of the Bonds or
the date fixed for redemption of any Bonds shall be a Saturday or Sunda or shall be in the State
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a legal holiday or a day on which banking institutions are authorized by law to close, then
payment of interest or principal (and premium, if any) need not be made on such date but may be
made on the next succeeding business day with the same force and effect as if made on the date
of maturity or the date fixed for redemption, and no interest shall accrue for the period after the
date of maturity or date fixed for redemption.
Section 7. The Bonds shall be executed on behalf of the City by the Mayor
and City Clerk and shall have impressed or imprinted thereon the seal of the City. The Bonds
may be signed by the manual or facsimile signature of the Mayor and the manual or facsimile
signature of the -City Clerk. The Bonds, together with interest thereon, shall be payable solei
from the Pledged Revenues, identified and described hereinbelow, which revenues are hereby
pledged and mortgaged for the equal and ratable payment of the Bonds. The Bonds shall not
constitute an indebtedness of the City within any constitutional or statutory limitation.
The Bonds are secured, as to Surplus Utility Revenues, on a parity of pledge with
the City's Municipal Port Revenue Bonds, Series 2000 (the "Port Bonds").
Section S. The Bonds and the Certificate 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:
REGISTERED
No.
Interest Rate:
Dated Date.-
Registered
ate:Registered Owner:
Principal Amount:
(Form of Bond)
UNITED S TATE S OF AMERICA
STATE OF ARKANSAS
COUNTY OF CRITTENDEN
CITY OF WEST MEMPHIS
MUNICIPAL AIRPORT REVENUE REFUNDING
AND IMPROVEMENT BOND
SERIES 2013
November 1, 2013
CEDE & CO.
KNOW ALL MEN BY THESE PRESENTS:
REGISTERED
Maturity Date: May 1,
CUSIP No.
DOLLARS
That the City of west Memphis, County of Crittenden, State of Arkansas (the
"City"), for value received, hereby promises to pay, but solely from the source as hereinafter
provided and not otherwise, to the Registered owner shown above, upon the presentation and
surrender hereof at the corporate office of BancorpSouth Bank, Stuttgart, Arkansas, or its
successor -or successors, as Trustee and as Paying Agent (the "Trustee"), on the Maturity Date
shown above, the Principal Amount shown above, in such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of public and private
debts, and to pay by check or draft interest thereon, but solely from the source as hereinafter
provided and not otherwise, in like coin or currency, at the Interest Rate per annum shown
above, payable May 1, 2014 and semiannually thereafter on the 1 st days of May and November
of each year, until payment of such principal sum or, if this Bond. or a portion hereof shall be
duly called for redemption, until the date fixed for redemption, and to pay interest on overdue
principal and interest (to the extent legally enforceable) at -the rate borne by this Bond. Payment
of each installment of interest shall be made to the person in whose name this Bond is registered
on the registration books of the City maintained by the Trustee at the close of business on the
fifteenth day of the month (whether or not a business day) next preceding each interest payment
�� ►, � p y
date (the Record Date"), irrespective of any transfer or exchange of this Bond subsequent to
such Record Date and prior to such interest payment date.
This bond shall bear interest from the payment date next preceding the date on
which it is authenticated unless it is authenticated on an interest payment date, in which event it
shall bear interest from such date, or unless it is authenticated prior to the first interest payment
date, in' which event it shall bear interest from the Dated Date shown above, or unless it is
authenticated during the period from the Record Date to the next interest payment date, in which
case it shall bear interest from such interest payment date, or unless at the time of authentication
hereof interest is in default hereon, in which event it shall bear interest from the date to which
interest has been paid.
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC") to the Trustee for registration of
transfer, exchange, or payment and any certificate issued is registered in the name of Cede & Co.
or in such other name as is requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR To ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
This bond is one of an issue of City of West Memphis, Arkansas Municipal
Airport Revenue Refunding and Improvement Bonds, Series 2013, aggregating Three Million
Fifty -Five Thousand Dollars ($3,055,000), in principal amount (the "Bonds"), and is issued for
the purpose of financing improvements to the City's Municipal Airport (the "Airport") and
refunding bonds heretofore issued to refinance improvements to the Airport, paying costs
incidental thereto, funding a debt service. reserve and paying costs of issuance of the Bonds.
The Bonds are issued pursuant to and in full compliance with the Constitution and
laws of the State of Arkansas, including particularly Title 14, Chapter 164, Subchapter 4 and
Title 14, Chapter 199, Subchapter 1 of the Arkansas Code of 1987 Annotated and pursuant to
Ordinance No. of the City, duly adopted and approved on October 3, 2013 (the "Authorizing
h
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
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payable from the revenues derived from the operation of the Airport. An amount of Airport
revenues sufficient to pay the principal of and interest on the Bonds has been duly pledged and
set aside for that purpose. In addition, the Bonds are secured by a' pledge of Sul -plus Utilit
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Revenues, as defined and set forth in the Authorizing Ordinance. Reference is hereby made to
the Authorizing Ordinance for a detailed statement of the terms and conditions upon which the
Bonds are 'issued, of the nature and extent of the security for the Bonds, the conditions for the
issuance of additional bonds and the rights and obligations of the City, the Trustee and the
holders of the Bonds.
The Bonds are secured, as to Surplus Utility Revenues, on a parity of pledge with
the City's outstanding Municipal Port Revenue Bonds, Series 2000.
The Bonds are subject to optional, extraordinary and mandatory sinking fund
redemption as follows:
1. The Bonds are subject to redemption at the option of the City, from funds
from any source, on and after November 1, 201 S, in whole at any time or in part on any interest
payment date, at a redemption price equal to the principal amount being redeemed plus accrued
interest to the redemption date. If fewer than all of the Bonds shall be called for redemption, the
p a
particular maturities of the Bonds to be redeemed shall be selected by the City in its discretion.
If fewer than all of the Bonds of any one maturity shall be called for redemption, thep articular
Bonds or portion thereof to be redeemed from such maturity shall be selected by � lot b the
Trustee.
2. The Bonds must be redeemed from proceeds of the Bonds not needed for
the purposes intended, on any interest payment date, in whole or in part, at a price equal to the
principal amount being redeemed plus accrued interest to the redemption date, in 'inverse order of
maturity (and by lot within a maturity in such manner as the Trustee may determine).
}
3. To the extent not previously redeemed, the Bonds maturing on May 1 in the
years 2033 and 2038 are subject to mandatory sinking fund redemption by lot in such manner as
the Trustee shall determine, on May 1 in the years and in the amounts set forth below, at a
redemption price equal to the principal amount being redeemed plus accrued interest to the date
of redemption:
Bonds Maturing May 1, 2033
Principal
Years Amount
2032 $145,000
2033 (maturity) 15000
8
Bonds Maturing May 1, 2038
Principal
Years
Amount
2034
$160,000
2035
165,000
2036
1703000
2037
1809000
2038 (maturity)
190,000
The provisions for mandatory sinking fund redemption of the Bonds are subject to
the provisions of the Authorizing ordinance which permit the City to receive credit for Bonds
previously redeemed or for Bonds acquired by the City and surrendered to the Trustee.
In case any outstanding Bond is in a denomination greater than $5,000, each
$5,000 of face value of such Bond shall be treated as a separate Bond of the denomination of
$5,000.
Notice of redemption identifying the Bonds or portions thereof (which shall be
$5,000 or a multiple thereof) to be redeemed shall be given by the Trustee, not less than 30 nor
more than 60 days prior to the date fixed for redemption, by mailing a copy of the redemption
notice by first class mail, postage prepaid, or by other standard means, including facsimile and
electronic communication, to all registered owners of Bonds to be redeemed. Failure to mail or
send an appropriate notice or any such notice to one or more registered owners of Bonds to be
redeemed shall not affect the validity of the proceedings for redemption of other Bonds as to
which notice of redemption is duly given in proper and timely fashion. All such Bonds or
portions thereof thus called for redemption and for the retirement of which funds are duly
provided in accordance with the Authorizing ordinance prior to the date fixed for redemption
will cease to bear interest on such redemption date.
So long as the Bonds are in book -entry form, the Trustee shall provide all notices
regarding redemption to DTC; and DTC shall select Bonds for redemption. according to methods
adopted by DTC.
This Bond is transferable by the registered owner hereof in person or by his
attorney-in-fact duly authorized in writing at the principal corporate trust office of the Trustee,
but only in the manner, subject to the limitations and upon payment of the charges provided in
the Authorizing ordinance, and upon surrender and cancellation of this Bond. Upon such
transfer a new fully registered Bond or Bonds of the same maturity, of authorized denomination
or denominations, for the same aggregate principal amount, will be issued to the transferee in
exchange therefor. This Bond is issued with the intent that the laws of the State of Arkansas
shall govern its construction.
The City and the Trustee may deem and treat the registered owner hereof as the
absolute owner hereof for the purpose of receiving payment of or on account of principal hereof
and premium, if any, hereon and interest due hereon and for all other purposes, and neither the
City nor the Trustee nor any paying agent shall be affected by any notice to the contrary.
V,
The Bonds are issuable only as fully registered bonds in the denominations of
$5,000 and any integral multiple thereof. Subject to the limitations and upon payment of the
charges provided in the Authorizing Ordinance, Bonds may be exchanged for a like aggregate
principal amount of Bonds of the same maturity of other authorized denominations.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that- all acts,
conditions and things required to exist, happen and be performed precedent to and in the issuance
of the Bonds do exist, have -happened and have been performed in due time, form and manner as
required by law; that the indebtedness represented by the Bonds, together with all obligations of
the City, does not exceed any constitutional or statutory limitation; and that the above referred to
revenues pledged to the payment of the principal of and premium, if any, and interest on the as
the same become due and payable will be suff cient in amount for that purpose.
This Bond shall not be valid or become. obligatory for any purpose or be entitled
to any security or benefit under the Authorizing Ordinance until the Certificate of Authentication
hereon shall have been signed by the Trustee.
THE CITY HAS DESIGNATED THIS BOND AS A "QUALIFIED TAX-
EXEMPT OBLIGATION" WITHIN THE MEANING OF SECTION 265(b) OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED.
IN WITNESS WHEREOF, the City of west Memphis, Arkansas has caused this
Bond to be executed by its Mayor and City Clerk, their manual or facsimile signatures thereunto
duly authorized, and its corporate seal to be impressed, on this Bond all as of the Dated Date
shown above.
ATTEST:
City Clerk .
(SEAL)
10
CITY OF WEST MEMPHIS, ARKANSAS
Lam
Mayor
(Form of Trustee's Certificate)
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds designated Municipal Airport Revenue Refunding
and Improvement Bonds, Series 2013, in and issued under the provisions of the within
mentioned Authorizing ordinance.
Date of Authentication:
B anc orp S outh Bank
Stuttgart, Arkansas
TRU S TEE
MD
(Form of Assignment)
ASSIGNMENT
Authorized Signature
FOR VALUE RECEIVED, ("Transferor"), hereby sells,
assigns and transfers unto the within bond and all rights
thereunder, and hereby irrevocably constitutes and appoints
as attorney to transfer the within bond on the books kept for registration thereof with full power
of substitution in the premises.
DATE:
Transferor
X11111TA age -110:�i�
NOTICE: Signature(s) must be guaranteed by a member of or participant in the
Securities Transfer Agents Medallion Program (STAMP), or in another signature guaranty
program recognized by the Trustee.
Section 9. The City covenants that, so long as any Bonds are outstanding
under this Ordinance, it will cause the Airport to be operated as a revenue --producing
undertaking, to the end that the Net Revenues of the Airport will always be at least equal to
110% of the aggregate maximum annual principal and interest requirements on all outstanding
Bonds and other bonds and obligations secured by Airport Revenues (collectively, "Airport
Bonds"). Failure to achieve the Net Revenues of the Airport as set forth in this Section shall not
I
constitute a default under this Ordinance, provided that the City continues to operate the Airport
in the manner calculated to achieve maximum Net Revenues of the Airport. The City shall
report any such failure to achieve the Net Revenues of the Airport to the west Memphis Public
Utility Commission within sixty (60) days following the close of the fiscal year in which such
failure shall have occurred.
As used in this Ordinance, "Airport Revenues" shall mean all revenues, income,
gains, rents and other revenues derived from the operation of the Airport, and "Net Revenues of
the Airport" shall mean all Airport Revenues less the amounts required to pay the costs of
operation, maintenance and repair, including all expense items properly attributable to the
operation and maintenance of the Airport in accordance with generally accepted accounting
principles, excluding depreciation, interest and amortization expenses.
Section 10. All Airport Revenues shall be deposited in such depository or
depositories as may be lawfully designated from time to time; subject, however, to the giving of
security as now or hereafter may be required by law, and provided that such depository or
depositories shall hold membership in the Federal Deposit Insurance Corporation ("FDIC") or
any successor entity. All deposits shall be in the name of the City or the Airport Commission
and shall be so designated as to indicate the particular fund to which the Airport Revenues
belong. Any deposit in excess of the amount insured by the FDIC shall be secured by direct or
fully guaranteed obligations of the United States of America unless invested as herein
authorized.
Section 11. (a) All Airport Revenues shall be deposited into a special fund
hereby created and designated "Airport Revenue Fund" (the "Airport Revenue Fund") in a bank
or banks selected by the Airport Commission that is a member of the FDIC. Revenues in the
Airport Revenue Fund are hereby pledged and shall be applied to the payment of the principal of
and interest on Airport Bonds (including the Bonds), to the maintenance of debt service reserves
at required levels, to the payment of the reasonable and necessary expenses of operation and
maintenance of the Airport, to the providing of the Depreciation Fund (as hereinafter defined)
and otherwise as described herein.
Section 12. (a) There shall first be transferred and paid from the Airport
Revenue Fund into a special fund hereby created with the Trustee and designated "Airport
Revenue Bond Fund, Series 2013" (the "Bond Fund"), the sums in the amounts and at the times
set forth in subsection (b) below.
(b) There shall be paid into the Bond Fund until all outstanding Bonds, with
interest thereon, have been paid in full or provision made for such payment, on the first business
day of each month a sum equal to 116 of the next installment of interest (or an amount sufficient
to provide for such interest installment by way. of equal monthly payments) and a sum equal to
1112 of the next installment of principal of the Bonds due during the then next twelve months
(either at maturity or in accordance with any mandatory redemption provisions) (or an amount
sufficient to provide for such principal installment by way of equal monthly payments), plus an
amount sufficient to provide for Trustee's fees and expenses and plus any arbitrage rebate due the
United States Treasury under Section 148 of the Internal Revenue Code of 1986, as amended
(the "Code"). Payments into the Bond Fund tluough April 2014 shall be increased as necessary
so that approximately level payments are made during that period in order to make the payments
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on the Bonds due through May 1, 2014. The City shall receive a credit against monthly deposits
into the Bond Fund from. Bond proceeds deposited therein, all interest earnings on moneys in the
Bond Fund, for transfers into the Bond Fund derived from earnings in the Debt Service Reserve
during the preceding month as hereinafter provided, and transfers therein directed by Section 30
hereof.
(c) There is hereby established within the Bond Fund a "Debt Service
Reserve," which shall be maintained in an amount equal to the lesser of (1) 10/0 of the original
principal amount of the Bonds or (2) the maximum annual debt service requirement on the
Bonds (the "Required Level"). If the Debt Service Reserve is ever reduced below the Required
Level, the monthly payments into the Bond Fund shall be increased by depositing therein the
first available Pledged Revenues (as defined in Section 17 below) after required deposits into the
Bond Fund in monthly amounts not less than amounts sufficient to cure the deficiency in twelve
equal deposits.
The Debt Service Reserve shall be valued by the Trustee, at market value, no less
frequently than annually, and any surplus therein (in excess of the Required level) shall be
promptly transferred to the Bond Fund. Any deficiency in the Debt Service Reserve on account
of the value thereof shall be corrected by the deposit therein of monthly amounts equal to not
less than the amounts sufficient to cure such deficiency in twelve equal deposits.
(d) If Airport Revenues are insufficient to make the required payment on the
first business day of any month into the Bond Fund, the amount of any such deficiency in the
payment made shall be added to the amount otherwise required to be paid into the Bond Fund on
the first business day of the next month.
The City shall, on April 25 and October 25 of each year, if necessary, pay to the
Trustee, for deposit into the Bond Fund, an amount of Surplus Utility Revenues necessary to
cause the moneys in the Bond Fund to be sufficient to make the payment on the Bonds due on
May 1 and November 1.
If for any reason there shall be a deficiency in the payments made into the Bond
Fund so that there are unavailable sufficient moneys therein to pay the principal of, interest on,
and Trustee's and Paying . Agent's fees and expenses in connection with the Bonds as the same
become due, any sums then held in the Debt Service Reserve shall be used to the extent
necessary to pay such principal, interest, and Trustee's and Paying Agent's fees and expenses.
The Debt Service Reserve shall be used solely as herein provided, but the moneys therein may be
invested as set forth below.
(e) The Trustee shall withdraw from the Bond Fund on the due date for the
principal and/or interest on any Bond, at maturity or redemption prior to maturity, an amount
equal to the amount of such Bond and interest due thereon for the sole purpose of paying the
same, together with the Trustee's fee and expenses. There shall also be withdrawn and paid to
the United States Treasury any arbitrage rebate due at the times and in the amounts required by
Section 148(f) of the Code. No withdrawal of funds from the Bond Fund shall be made for any
other purpose except as otherwise authorized in this ordinance.
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Section 13. After the required payments have been made into the Bond Fund,
there shall be paid from the Airport Revenue Fund into a fund hereby created and designated
"Airport 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 Airport for such month and from which
disbursements shall be made only for those purposes. Fixed annual charges such as insurance
premiums and cost of major repair and maintenance expenses may be computed and set upon an
annual basis, and one -twelfth (1112) of the amount thereof may be paid into the Operation and
Maintenance Fund each month.
If in any month for any reason there shall be a failure to transfer and pay the
required amount into the operation and Maintenance Fund, the amount of the deficiency shall be
added to the amount otherwise required to be transferred and paid into the fund the next
succeeding month. If in any fiscal year a surplus shall be accumulated in the Operation and
Maintenance Fund over and above the amount which shall be necessary to defray the reasonable
and necessary costs of operation and maintenance during the remainder of the then current fiscal
year and the next ensuing fiscal year, such surplus may be transferred into the Bond Fund or into
the Depreciation Fund, to the extent of any deficit therein, and, in the absence of any such
deficit, to the Airport Revenue Fund.
Section 14. After making the required payments into the Bond Fund and the
Operation and Maintenance Fund, there shall be paid from the Airport Revenue Fund into a fund
hereby created and designated "Airport Depreciation Fund" (the "Depreciation Fund"), on the
first business day of each month while any of the Bonds are outstanding, a sum equal to S% of
the Airport Revenues for the preceding month (but not including, for this purpose, extraordinary
gains), to provide for new construction and acquisition, for major replacements, and for
extraordinary repairs to the Airport. The moneys in the Depreciation Fund shall be used solely
for such purposes and for the purpose of paying costs of damage caused by unforeseen
catastrophes.
If in any fiscal year a surplus shall be accumulated in the Depreciation Fund over
and above the amount which shall be necessary to cover probable replacement costs during the
current fiscal year and the next ensuing fiscal year, such surplus may be transferred to the Bond
Fund, to the extent of any deficit therein, and, in the absence of any such deficit, to the Airport
Revenue Fund.
Section 15. Any surplus in the Airport Revenue Fund, after making all
disbursements required by the provisions of this Ordinance and making full provision for the
funds herein provided, may be used, at the option of the City, for the redemption of Airport
Bonds; for constructing additions and improvements to the Airport; or for any, lawful municipal
purpose.
Section 16. The Bonds shall be subject to redemption prior to maturity in
accordance with the terms set out in the Bond form in Section S hereof. The City covenants and
agrees to cause to be paid into the Bond Fund sufficient funds to redeem the Bonds in the
amounts and on the dates set forth in the Bonds. Therefore, in calculating the monthly payments
to be deposited into the Bond Fund, the term "next installment of principal" shall include the
principal of the Bonds maturing on the next principal payment date and the principal of the
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Bonds which will be redeemed in accordance with the mandatory sinking fund redemption
provisions of the Bonds on the next interest payment date scheduled for such redemption.
The City may acquire Bonds by purchase at a price not in excess of par plus
accrued interest, inclusive of brokerage fees, and surrender to the Trustee any Bonds so acquired,
in exchange for which the City shall receive a credit under this ordinance in an amount equal to
the principal amount of the Bonds so acquired and surrendered, for and of the then next date for
mandatory sinking fund redemption of Bonds of the same maturity.
Section 17. (a) The City owns and operates its water, sewer and electric utility
facilities (these facilities being referred to herein as the "Utility System"). The Bonds are
secured by a pledge of Airport Revenues and, in addition, by a pledge of "Surplus Utility
Revenues," as defined below. As used in this ordinance, the terns "Pledged Revenues" refers to
and includes Airport Revenues and Surplus Utility Revenues. The Surplus Utility Revenues
which are pledged to the Bonds are those defined in Arkansas Code of 1987 Annotated § 14-199-
101, being Utility System revenues remaining after adequate provision has been made for
expenses of operation, maintenance and depreciation of the Utility System and all requirements
(pertaining to the payment of principal, interest and fees in connection with bonds, and
establishing and maintaining reserves) of ordinances or indentures securing bonds payable from
Utility System revenues, heretofore or hereafter issued, to finance or refinance the cost of
constructing, reconstructing, extending, improving or equipping the Utility System, including
any other utility facilities owned by the City which are at the time declared by the City Council
to be interrelated municipal activities and concerning which utility (meaning here all such
interrelated activities, i.e., electric, sewer, water, gas, solid waste, or any combination thereof)
system revenue bonds are being issued, have been fully met and complied with. Such bonds (or
other obligations), heretofore or hereafter issued, are referred to as "Utility Bonds."
(b) In this regard, subject to compliance with its covenants hereinafter set
forth in this Section, it is understood that this pledge of Surplus Utility Revenues shall not
prohibit the City from issuing Utility Bonds, or expending Utility System revenues, for
extensions and improvements to the Utility System (including any interrelated utility facilities as
referred to in the preceding sentence) from time to time in the future. Any pledge made of
Utility System revenues to the payment of Utility Bonds shall be superior to the pledge of Utility
System revenues to Bonds secured, in whole or in part, by Surplus Utility Revenues. However,
the pledge of Surplus Utility Revenues herein made shall be superior and prior to any pledge of
Utility System revenues hereafter made to any bonds or other obligations of the City, other than
Utility Bonds, except that the City may issue bonds secured by a pledge of Surplus Utility
Revenues and ranking on a parity with the Bonds as to Surplus Utility Revenues if there shall
have been procured and filed with the Trustee a statement by an independent certified public
accountant not in the regular employ of the City reciting the opinion, based upon necessary
investigation, that (1) Surplus Utility Revenues for the fiscal year next preceding the fiscal year
in which it is proposed to issue such additional bonds were equal to not less than 140% of the
maximum annual principal and interest requirements on the outstanding bonds secured by
Surplus Utility Revenues and the additional bonds proposed to be issued, (2) Surplus Utility
Revenues for the fiscal year in which it is proposed to issue such additional bonds equal not less
than 140% of the maximum annual principal and interest requirements on the outstanding bonds
secured by Surplus Utility Revenues and the additional bonds proposed to be issued, or (3)
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Surplus Utility Revenues for the next ensuing fiscal year, as reflected by the written opinion of a
duly qualified consulting engineer not in the regular employ of the City, will equal not less than
140% of the maximum annual principal and interest requirements for the outstanding bonds
secured by Surplus Utility Revenues and the additional bonds proposed to be issued. For the
purposes of the computation required by this paragraph, additional amounts may be added to the
revenues of the completed fiscal year immediately preceding the issuance of additional bonds, as
follows: if, prior to the issuance of the additional bonds and subsequent to the first day of the
preceding fiscal year, the City shall have increased its rates or charges imposed for services of
the Utility System there may be added to the revenues of such fiscal year the additional revenues
which would have been received from the operation of the Utility System during such fiscal year
had such increase been in effect throughout such fiscal year, as reflected by a certificate of a duly
qualified consulting engineer not in the regular employ of the City. This pledge of Surplus
Utility Revenues to and in favor of the Bonds shall extend and apply to all Utility System
revenues, as above defined, but so long as the City is not in default with reference to any of its
covenants and obligations pertaining to the Bonds, including, without limitation, those covenants
set forth in Section 12 of this Ordinance pertaining to deposits in the Bond Fund, the entire
amount of Surplus Utility Revenues not required during any year while the Bonds shall be
outstanding for the payment of the principal of, interest on, and Trustee's and Paying Agent's fees
and expenses in connection with the Bonds, the payment of arbitrage rebate in connection with
the Bonds and maintaining required reserves at the required levels may be used by the City for
any lawful purpose.
The City hereby covenants that it will comply with all covenants and obligations
of the City entered into with regard to any Utility Bonds so long as any Utility Bonds are
outstanding.
So long as any Bonds are outstanding under the provisions of this Ordinance, the
City shall not issue or attempt to issue any bonds claimed to be entitled to a priority of lien on the
Airport Revenues over the lien securing the Bonds.
The City reserves the right to issue additional bonds, to finance or refinance the
cost of constructing any future extensions or improvements to the Airports secured by a pledge of
Airport Revenues ranking, with respect to Airport Revenues, on aparity with the Bonds,
provided that 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 Net Revenues of the Airport for the fiscal year
immediately preceding the fiscal year in which it is proposed to issue such additional bonds shall
equal not less than 130% of the maximum annual principal and interest requirements on all the
then outstanding Airport Bonds (including the Bonds and any additional bonds) and the
additional bonds then proposed to be issued.
Bonds secured by a pledge of Airport Revenues pursuant to this subsection (b)
may, at the option of the City, be additionally secured by a pledge of Surplus Utility Revenues as
described above.
(c) Nothing herein shall preclude the City from issuing bonds or obligations
secured by a pledge or pledges of revenues subordinate to the pledges granted hereby.
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Section 18. The City will keep proper books of accounts and records (separate
from all other records and accounts) in which complete and correct entries shall be made of all
transactions relating to the operation of the Airport and of the Utility System, and such books
shall be available for inspection by the holder of any of the Bonds at reasonable times and under
reasonable circumstances. The City agrees to have these records audited by an independent
certified public accountant at least once each year. A copy of each audit shall be delivered to the
Trustee not later than 180 days after the end of each fiscal year and shall be made available to
any Bondholder making request therefor. In the event that the City fails or refuses to make the
audit, the Trustee, or any holder of a Bond, may have the audit made, and the cost thereof shall
be charged against the operation and Maintenance Fund.
Section 19. The City covenants that it will maintain the Airport in good
condition and operate the same in an efficient manner and at reasonable cost. while any of the
Bonds are outstanding, the City agrees that, to the extent that comparable protection is not
otherwise provided to the satisfaction of the Trustee, it will insure 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 laves of the State of Arkansas to assume the risk
thereof, properties of the Airport, to the extent that such properties would be covered by
insurance by private companies engaged in similar types of businesses (but in any event in such
amounts as will. avoid co-insurance responsibilities), against loss or damage thereto from fire and
other perils included in extended coverage insurance in effect in the State. The insurance
policies are to carry a clause making them payable to the Trustee as its interest may appear, and
the satisfactory evidence of insurance is to be placed in the custody of the Trustee. In the event
of loss, the proceeds of such insurance shall be applied solely toward the reconstruction,
replacement or repair of the Airport, 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 Airport Revenue Fund, and if such proceeds shall be insufficient for such
purposes the deficiency shall be supplied first from moneys in the Depreciation Fund and second
from moneys in the operation and Maintenance Fund and third from surplus moneys in. the
Airport Revenue Fund. Nothing shall be construed as requiring the City to expend any moneys
for operation and maintenance of the Airport or for premiums on its insurance which are derived
from sources other than Airport Revenues, but nothing shall be construed as preventing the City
from doing so.
Section 20. Any Bond shall be deemed to be paid within the meaning of this
Ordinance when payment of the principal of and interest on such Bond (whether at maturity or
upon redemption as provided herein, or otherwise), either (i) has been made or caused to be
made in accordance with the terms thereof, or (ii) has been provided for by irrevocably
depositing with the Trustee, in trust and irrevocably set aside exclusively for such payment, (1)
cash fully insured by the FDIC and/or fully collateralized with government Securities (as
defined in Section 24 hereof} sufficient to make such payment and/or (2) direct or fully
guaranteed obligations of (including obligations issued or held in book entry form on the books
of) the Department of the Treasury of the United States of America ("Investment Securities")
(provided that such deposit will not affect the tax exempt status of the interest on any of the
Bonds or cause any of the Bonds to be classified as "arbitrage bonds" within the meaning of
Section 148 of the Code), maturing as to principal and interest in such amounts and at such times
17
as will provide sufficient moneys to make such payment, and all necessary and proper fees,
compensation and expenses of the Trustee pertaining to the Bonds with respect to which such
deposit is made shall have been paid or the payment thereof provided for to the satisfaction of
the Trustee.
On the payment of any Bonds within the meaning of this ordinance, the Trustee
shall hold in trust, for the benefit of the owners of such Bonds, all such moneys and/or
Investment Securities.
When all the Bonds shall have been paid within the meaning of this ordinance, if
the Trustee has been paid its fees and expenses and if any arbitrage rebate is paid or provided for
to the satisfaction of the Trustee, the Trustee shall take all appropriate action to cause (i) the
pledge and lien of this ordinance to be discharged and cancelled, and (ii) all moneys held by it
pursuant to this ordinance and which are not required for the payment of such Bonds to be paid
over or delivered to or at the direction of the City. In determining the sufficiency of the deposit
of Investment Securities there shall be considered the principal amount of such Investment
Securities and interest to be earned thereon until the maturity of such Investment Securities.
Section 21. The City. covenants that so long as any Bonds are outstanding, it
will not mortgage, pledge or otherwise encumber the Airport, 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. Nothing herein shall be construed to
prohibit the City from disposing of worn out or obsolete Airport properties or from disposing of
properties not being used and not useful in the operation of the Airport, provided that all
revenues derived from the disposition of such properties shall be deposited in the Airport
Revenue Fund.
Section 22. (a) If there be any default in the payment of therind al of or
p p
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 the State. 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 for the appointment of a receiver to administer the Airport and the Utility
System on behalf of the City and the holders and registered owners with power to charge and
collect (or by mandatory injunction or otherwise to cause to be charged and collected) rates
sufficient to pay any Bonds and interest outstanding and to apply the revenue in conformity with
the laws of the, State and with this ordinance. when all defaults in principal and interest
payments have been cured, the custody and operation of the Airport and the Utility System shall
revert to the City.
(b) No holder or registered owner of any of the outstanding Bonds shall have
any right to institute any suit, action, mandamus or other proceeding in equity or at law for the
protection or enforcement of any right under this ordinance or under the laws of the State unless
I
-such holder or registered. owner previously shall have given to the Trustee written notice of the
default on account of which such suit, action or proceeding is to be taken, and unless the holders
and registered owners of not less than ten percent (10%) in principal amount of the Bonds shall
have made written request of the Trustee after the right to exercise such powers or right of
action, as the case may be, shall have accrued, and shall have afforded the Trustee a reasonable
opportunity either to proceed to exercise the powers herein granted or granted by the laws of the
State, or to institute such action, suit or proceeding in its name, and unless, also, there shall have
been offered to the Trustee reasonable security and indemnity against the costs, expenses and
liabilities to be incurred therein or thereby and the Trustee shall have refused or neglected to
comply with such request within a reasonable time, and such notification, request and offer of
indemnity are hereby declared in every such case, at the option of the Trustee, to be conditions
precedent to the execution of the powers and trusts of this Ordinance or to any other remedy
hereunder. It is understood and intended that no one or more holders or registered own_ ers of the
Bonds hereby secured shall have any right in any manner whatever by his or their action to
affect, any right hereunder except in the manner herein provided, that all maintained in the
manner herein provided and for the benefit of all holders and registered owners of all outstanding
Bonds and that any individual rights of action or other right given to one or more of such holders
and registered owners by law are restricted by this ordinance to the rights and remedies herein
provided.
(c) All rights of action under this Ordinance or under any of the Bonds
secured hereby, enforceable by the Trustee, may be enforced by it without the possession of any
of the Bonds appertaining thereto, and any such suit, action or proceeding instituted by the
Trustee shall be brought in its name. for the benefit of all the holders and registered owners of
such Bonds, subject to the provisions of this ordinance.
(d) No remedy herein conferred upon or reserved to the Trustee or to the
holders of the Bonds is intended to be exclusive of any other remedy or remedies herein
provided, and each and every such remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or given by law.
(e) No delay or omission of the Trustee or of any holders of the Bonds to
exercise any right or power accrued upon any default shall impair any such right or power or
shall be construed to be a waiver of any such default or an acquiescence therein; and every
power and remedy given by this Ordinance to the Trustee and to the holders of the Bonds,
respectively, may be exercised from time to time and as often as may be deemed expedient.
(f) The Trustee may, and upon the written request of the holders of not less
than fifty percent (50%) in principal amount of the Bonds then outstanding shall waiver any
default which shall have been remedied before the entry of final judgment or decree in any suit,
action or proceeding instituted under the provisions of this Ordinance or before the completion of
the enforcement of any other remedy, but no such waiver shall extent to or affect any other
existing or any subsequent default or defaults or impair any rights or remedies consequent
thereon.
(g) In any proceeding to enforce the provisions of this Ordinance any plaintiff
Bondholder shall be entitled to recover from the City all costs of such proceeding, including
reasonable attorneys' fees.
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Section 23. (a) The terms of this Ordinance shall constitute a contract between
the- City and the registered owners of the Bonds and no variation or change in the undertaking
herein set forth shall be made while any of these Bonds are outstanding, except as hereinafter set
forth in subsections (b) and (c).
(b) The Trustee may consent to any variation or change in this ordinance to
cure any ambiguity, defect or omission in this ordinance or any amendment hereto, or to make
any change or variation which, in the opinion of the Trustee, is not materially adverse to the
Bondholders, without the consent of the owners of the outstanding Bonds.
(c) The owners of not less than 75% in aggregate principal amount of the
Bonds then outstanding shall have the right, from time 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 rescinding, in any particular, any of the terms or
provisions contained in this ordinance or in any supplemental ordinance; provided, however,
that nothing contained in this Section shall permit or be construed as permitting (a) an extension
of the maturity of the principal of or the interest on any Bond, or (b) a reduction in the principal
amount of any Bond or the rate of interest thereon, or (c) the creation of a lien or pledge superior
to the lien and pledge created by this ordinance, or (d) a privilege or 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 24. (a) Moneys held for the credit of the Debt Service Reserve in the
Bond Fund shall be invested and reinvested in (i) direct or fully guaranteed obligations of the
United States of America (including any such securities issued or held in book -entry form on the
books of the Department of the Treasury of the United States of America) ("Government
Securities"), (ii) direct obligations of an agency, instrumentality or government-sponsored
enterprise created by an act of the United States Congress and authorized to issue securities or
evidences of indebtedness, regardless of whether the securities or evidences of indebtedness are
guaranteed for repayment by the United States Government, (iii) certificates of deposit or
demand deposits of banks, including the Trustee, which are insured by FDIC or, if in excess of
insurance coverage, collateralized by Government Securities or other securities authorized by
State law to secure public funds or (iv) money market funds, including funds managed by the
Trustee, invested exclusively in Government Securities or investments described in (ii) above
(collectively, "Permitted Investments"), all of which shall mature, or which shall be subject to
redemption by the holder thereof, at the option of such holder, not later than five (5) years after
the date of investment or the final maturity date of the outstanding Bonds, whichever is earlier.
The Trustee shall so invest and reinvest pursuant to the direction of the City and in the Trustee's
discretion in the absence of any direct instruction from the City.
(b) Moneys held for the credit of the Bond Fund (other than the Debt Service
Reserve) shall be invested and reinvested in Permitted Investments, which shall matures or which
shall be subject to redemption by the holder thereof, at the option of such holder, not later than
the date or dates when the moneys will be required for payment of the principal of and interest
on the Bonds when due. The Trustee shall invest and reinvest pursuant to the direction of the
City and in the Trustee's discretion in the absence of any direct instructions from the City.
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(c) Moneys held for the credit of the Construction Fund and all other Funds
established hereunder or referenced hereby may be invested and reinvested in Permitted
Investments which shall mature, or which shall be subject to redemption by the holder thereof, at
the option of such holder, not later than the date or dates when such money will be required for
the purposes intended.
(d) obligations so purchased as an investment of moneys in any fund shall be
deemed at all times to be a part of such fund and the interest accruing thereon and any profit
realized from such investments shall be credited to such fund, and any loss resulting from such
investment shall be charged to such fund.
Section 25. when the Bonds have been executed, they shall be authenticated
by the Trustee and the Trustee shall deliver the Bonds to or at the direction of the Purchaser upon
payment of the Purchase Price. The accrued interest shall be deposited into the Bond Fund. The
expenses of issuing the Bonds as set forth in the delivery instructions to the Trustee signed by the
Mayor and City Clerk (the "Delivery Instructions") shall be deposited into a special account
created with the Trustee in the name of the City and designated "Cost of Issuance Fund, Series
2013." An amount equal to the Required Level shall be deposited into the Debt Service Reserve.
The amount necessary from the Purchase Price to refund the Series 2007 Bonds, along with
available moneys appropriated by Section 30 hereof, as set forth in the Delivery Instructions,
shall be deposited with the Trustee for the owners of the Series 2007 Bonds. The remainder of
the Purchase Price shall be remitted to the City for deposit into a special account in the name of
the City designated "Airport Construction Fund, Series 2013" (the "Construction Fund") in a
depository or depositories that are members of FDIC. 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. 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 the
purpose by general classification of the payment. Each check must be signed by at least two
persons designated by the Airport Commission.
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, if there are moneys in the Construction
Fund, shall be evidenced by a certificate signed by the Mayor, 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 or depositories of the Construction Fund, and a copy with the Trustee, and upon
receipt thereof the depository of the Construction Fund shall transfer any remaining balance to
the Trustee for deposit into the Bond Fund for the purpose of redeeming the Bonds.
Section 26. In the event that the office of Mayor, City Clerk, City Treasurer,
Airport Commission 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 perfon-ning 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
21
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 27. It is understood and agreed that the Airport Commission, acting for
and on behalf of the City, has custody of and control over the Airport, operates, maintains and
repairs the Airport and collects and handles Airport Revenues. Therefore, it is understood and
agreed that even though there are some express references to the Commission, all references
herein to the City shall, when appropriate in view of the authority and responsibility of the
p y
Commission, be construed to mean and include the Commission. To this end, the Commission
shall be obligated to perform all covenants and obligations with reference to the Airport and
Airport Revenues, set forth herein, the performance of which are within its authority and
jurisdiction. It is understood and intended that the bondholders have relied on, and are
benefi
Section 31. (a) The City covenants that it shall not take any action or suffer or
permit any action to be taken or condition to exist which causes or may cause the interest
payable on the Bonds to be included in gross income for federal income tax purposes. without
limiting the generality of the foregoing, the City represents and covenants that the proceeds of
the sale of the Bonds and Pledged Revenues will not be used directly or indirectly in such
manner as to cause the Bonds to be treated as "arbitrage bonds" within the meaning of Section
148 of the Code.
(b) The City shall assure that (i) not in excess of 10% of the Net Proceeds of
the Bonds is used for Private Business Use if, in addition, the payment of more than 10% of the
principal or 10% of the interest due on the Bonds during the term thereof is, under the terms of
the Bonds or any underlying arrangement, directly or indirectly secured by any interest in
property used or to be used for a Private Business Use or in payments in respect of property used
or to be used for a Private Business Use or is to be derived from payments, whether or not to the
City, in respect of property or borrowed moneys used or to be used for a Private Business Use;
and (ii) that, in the event that both (A) in excess of 5% of the Net Proceeds of the Bonds are used
for a Private Business Use, and (B) an amount in excess of 5% of the principal or 5% of the
interest due on the Bonds during the term thereof is, under the terms of the Bonds or any
underlying arrangement, directly or indirectly, secured by any interest in property used or to be
used for said Private Business Use or in payments in respect of property used or to be used for
said Private Business Use or is to be derived from payments, whether or not to the City, in
respect of property or borrowed money used or to be used for said Private Business Use, then
said excess over said 5% of Net Proceeds of the Bonds used for a Private Business Use shall be
used for a Private Business Use related to _the governmental use of the Airport.
The City shall assure that not in excess of 5% of the Net Proceeds of the Bonds
are used, directly or indirectly, to make or finance a loan to persons other than state or local
governmental units.
As used in this subsection (b), the following terms shall have the following
meanings:
"Net Proceeds" means the face amount of the Bonds, plus accrued interest and
original issue premium and less original issue discount and less the deposit into the Debt Service
Reserve from proceeds of the Bonds.
"Private Business Use" means use directly or indirectly in a trade or business
carried on by a natural person or in any activity carried on by a person other than a natural
person, excluding, however, use by a state or local governmental unit and use as a member of the
general public.
(c) The City covenants that it will take no action which would cause the
Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Code. Nothing
in this Section shall prohibit investments in obligations issued by the United States Treasury.
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(d) The City covenants that it will submit to the Secretary of the Treasury of
the United States, not later than the 15th day of the second calendar month after the close of the
calendar quarter in which the Bonds are issued, the statement required by Section 149(e) of the
Code.
(e) The Bonds are hereby designated as "qualified tax-exempt obligations"
within the meaning of the Code. The City represents that the aggregate principal amount of its
qualified tax-exempt obligations (excluding "private activity bonds" within the meaning of
Section 141 of the Code which are not "qualified 501 (c)(3) bonds' within the meaning of Section
145 of the Code), including those of its subordinate entities, issued in calendar year 2013 are not
anticipated to exceed $10,000,000.
The City further represents that (i) the aggregate principal amount of its tax-
exempt obligations (not including "private activity bonds" within the meaning of Section 141 of
the Code), including those of its subordinate entities, to be issued in calendar year 2013 will not
exceed $5,000,000 and (ii) at least 95% of the proceeds of the bonds will be expended for the
governmental activities of the City.
(f) The City covenants that it will, in compliance with the requirements of
Section 148(f) of the Code, pay with moneys in the Bond Fund to the United States Government
in accordance with the requirements of Section 148(f) of the Code, from time to time, an amount
equal to the sum of (1) the excess of (A) the amount earned on all Non -purpose Investments(as
therein defined) attributable to the Bonds, other than investments attributable to such excess over
(B) the amount which would have been earned if such Non -purpose Investments attributable to
the Bonds were invested at a rate equal to the Yield (as defined in the Code) on the Bonds, plus
(2) any income attributable to the excess described in (1), subject to the exceptions set forth in
Section 148 of the Code. The City further covenants that in order to assure compliance with its
covenants herein, it will employ a qualified consultant to advise the City in making the
determination required to comply with this subsection. Anything herein to the contrary
notwithstanding, the City need not comply with this provision if in the opinion of Bond Counsel
filed with the Trustee, the failure to comply would not affect the tax-exempt status of interest on
the Bonds for federal income tax purposes.
(g) The City covenants that it will retain all documents and records pertaining
to the Bonds, the Series 2007 Bonds, the Improvements and the improvements refinanced with
proceeds of the Series 2007 Bonds for the life of the Bonds plus an additional three (3) years.
Section 32. The Mayor is hereby authorized and directed to work with Friday,
Eldredge & Clark, LLP, as bond counsel, to develop, adopt and implement written procedures to
monitor compliance with federal tax requirements with respect to tax-exempt obligations of the
City. The Mayor is further authorized to appoint a Responsible Person who will have primary
responsibility for monitoring post -issuance tax compliance.
Section 33. The rates charged for services of the Utility System are hereby
ratified, confirmed and continued. Such rates are currently as follows:
Water Rates
First 1,500 gallons
Next 3,500 gallons
Next 45,000 gallons
All over 50,000 gallons
Type
Residential 314 inch
Commercial 314 inch
Industrial 314 inch
1 inch
1 112 inch
2 inch
3 inch
4 inch
6 inch
Sewer Rates
Minimum Meter Charge
$0.77 per 1,000 gallons
0.67 per 1,000 gallons
0.58 per 1,000 gallons
Minimum Meter Char e
$2.89
4.23
4.23
8.30
16.60
22.10
36.00
49.90
77.50
. Sewer rates for residential and commercial users are 132% of the charge for metered
water service. For residential service the months of October through May are utilized for the year.
Rates for industrial users are calculated on the same basis but with additional charges for various
pollutants.
F.1 ectrf rt R ntP
Charges for electric service consist of a fixed monthly charge (the "Electric
Charge") for residential and commercial customers and a demand charge for industrial customers
(the "Demand Charge"), plus in each case charges for actual usage (the "Usage Charge"). The
Electric Charges, the Demand Charges and the Usage Charges are as follows:
Electric Char e
Residential
Commercial
Demand Charge
Small Power Service
Large Power Service
Usage Charge
Residential
Commercial
$6.50 per month
11.00 per month
$2,100 per month
7,000 per month
$0.06 per KWH
$0.086 per KWH (first 2,100 KWH)
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Small Power Service
Large Power Service
0. 064 per KWH (over 2,100 KWH)
$7.00 per KW (in excess of 300 KW)
0.04 per KWH (energy charge)
$7.00 per KW (in excess of 1,000 KVO
0.0352 per KWH (energy charge)
The conditions, rights and obligations pertaining to rates of the Utility System, as
set out in the ordinances fixing such rates, are ratified, confirmed and continued.
Section 34. Nothing in this Ordinance expressed or implied is intended or shall
be construed to confer upon, or to give to, any person or entity, other than the City, the Trustee,
and the registered owners of the Bonds, any right, remedy or claim under or by reason of this
Ordinance or any covenant, condition or stipulation hereof, and all covenants, stipulations,
promises and agreements in this ordinance contained by and on behalf of the City shall be' for
the sole and exclusive benefit of the City, the Trustee, and the registered owners of the Bonds.
Section 35. Following adoption, this Ordinance shall be posted in the
following public places in the City: City Hall, Library, West Memphis Utilities, Airport and
Community Center.
Section 36. 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 37. 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 shall be issued and delivered.
Section 38. All ordinances and resolutions or parts thereof, in conflict herewith
are hereby repealed to the extent of such conflict.
Section 39. It is hereby ascertained and declared that the effectiveness of the
Refunding is a function of economic conditions, which are subject to change, and that the
issuance of the Bonds and the taking of the other action authorized by this Ordinance is
necessary for the accomplishment of the Refunding. 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: October 3, 2013.
ATTEST:
City Clerk
(SEAL)
26
APPROVED:
(;7
M-fyor
CERTIFICATE
The undersigned, City Clerk of the City of Nest Memphis, Arkansas, hereby
certifies that the foregoing pages are a true and correct copy of Ordinance No. AU I , adopted
at a regular session of the Council of the City of West Memphis, Arkansas, held at the regular
meeting place of the Council in the City at 1:30 p.m., on the 3rd day of October, 2013, and that
said Ordinance is of record in Ordinance Record Book No.
. ,Page , now in my
possession.
GIVEN under my hand and seal this 3rd day of October, 2013.
(SEAL),