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HomeMy WebLinkAbout2013-06-01 ORDINANCE NO.c?0/.3— Ub -70 AN ORDINANCE AUTHORIZING THE ISSUANCE OF A SALES AND USE TAX BOND FOR THE PURPOSE OF FINANCING A PORTION OF THE COSTS OF ACQUIRING, CONSTRUCTING AND EQUIPPING EXTENSIONS, BETTERMENTS AND IMPROVEMENTS TO THE SEWER FACILITIES OF THE CITY OF BATESVILLE, ARKANSAS; PROVIDING FOR THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON THE BOND; AND PRESCRIBING OTHER MATTERS RELATING THERETO. WHEREAS, there was submitted to the qualified electors of the City of Batesville, Arkansas (the "City") at a special election held March 10, 2009, the question of issuing capital improvement bonds in the maximum principal amount of $50,000,000 for the purpose of financing all or a portion of the costs of acquiring, constructing and equipping extensions, betterments and improvements to the City's sewer system (the "Improvements"); and WHEREAS, at the special election, a majority of the electors voting on the question approved the issuance of the bonds and the levy of a new sales and use tax at the rate of 1% (the "Tax") to retire the bonds; and WHEREAS, pursuant to Ordinance No. 2009-12-1 of the City duly adopted on December 22, 2009 ("Ordinance No. 2009-12-1"), the City has issued its Sales and Use Tax Bond, Series 2010 in the principal amount of $6,300,000 (the "Series 2010 Bond") for the purpose of financing a portion of the costs of the Improvements; and WHEREAS, pursuant to Ordinance No. 2011-06-03 of the City duly adopted on June 28, 2011 ("Ordinance No. 2011-06-03"), the City has issued its Sales and Use Tax Bond, Series 2011 in the principal amount of$20,000,000 (the "Series 2011 Bond") for the purpose of financing a portion of the costs of the Improvements; and WHEREAS, the City is making arrangements for the sale of a City of Batesville, Arkansas Sales and Use Tax Bond, Series 2013 (the "Series 2013 Bond") in the principal amount of $13,500,000 to the Arkansas Development Finance Authority, as purchaser (the "Bondholder"), at a price of par for a bond bearing interest at the rate of 1.50% per annum pursuant to a Bond Purchase Agreement (the "Agreement") among the City, the Bondholder and the Arkansas Natural Resources Commission (the "Commission"), which has been presented to and is before this meeting; and WHEREAS, the Series 2013 Bond is being issued pursuant to Ordinance No. 2009-12-1 as an "Additional Parity Bond" thereunder; and WHEREAS, the City is authorized, under the provisions of Amendment No. 62 to the Arkansas Constitution and the Arkansas Code of 1987 Annotated, Title 14, Chapter 164, Subchapter 3 (the "Authorizing Legislation"), to enter into the Agreement and to issue the Series 2013 Bond; and WHEREAS, the Bondholder proposes to pledge the Series 2013 Bond as collateral for the payment of its wastewater system revolving loan fund revenue bonds pursuant to its general bond resolution, as amended or supplemented from time to time, to the bank or trust company named or to be named as trustee thereunder; and WHEREAS, the City is required to pay to the Arkansas Development Finance Authority, as servicer (the "Authority"), a financing fee equal to 1% per annum of the outstanding principal amount of the Series 2013 Bond (the "Financing Fee"); NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Batesville, Arkansas: Section 1. The sale to the Bondholder of up to $13,500,000 in principal amount of the Series 2013 Bond from the City at a price of par for a bond bearing interest at the rate of 1.50% per annum and otherwise subject to the terms and provisions hereafter in this Ordinance set forth in detail is hereby approved and the Series 2013 Bond is hereby sold to the Bondholder. The Mayor is hereby authorized and directed to execute and deliver the 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. The Agreement is hereby approved in substantially the form submitted to this meeting, with such changes as may be approved by the Mayor, his execution to constitute complete evidence of such approval. Section 2. Under the authority of the Constitution and laws of the State of Arkansas (the "State"), including particularly the Authorizing Legislation, the Series 2013 Bond is hereby authorized and ordered issued in the principal amount of up to $13,500,000. The proceeds from the sale of the Series 2013 Bond are necessary to provide a portion of the funds to accomplish the Improvements, pay expenses incidental thereto and pay expenses of issuing the Series 2013 Bond. The Series 2013 Bond shall bear interest at the rate of 1.50% per annum based upon a 360-day year of twelve consecutive 30-day months. The Series 2013 Bond shall be dated the date of delivery to the Bondholder. Interest shall be payable on each April 15 and October 15 after the Series 2013 Bond is issued. Principal shall be payable in installments on October 15, 2016 and each April 15 and October 15 thereafter until the unpaid principal is paid in full as follows: 2 Date Amount Date Amount 10/15/16 $262,189 10/15/26 $336,136 04/15/17 265,466 04/15/27 340,337 10/15/17 268,784 10/15/27 344,592 04/15/18 272,144 04/15/28 348,899 10/15/18 275,546 10/15/28 353,261 04/15/19 278,991 04/15/29 357,676 10/15/19 282,478 10/15/29 362,147 04/15/20 286,009 04/15/30 366,674 10/15/20 289,584 10/15/30 371,257 04/15/21 293,204 04/15/31 375,899 10/15/21 296,869 10/15/31 380,597 04/15/22 300,579 04/15/32 385,354 10/15/22 304,337 10/15/32 390,171 04/15/23 308,141 04/15/33 395,049 10/15/23 311,993 10/15/33 399,987 04/15/24 315,893 04/15/34 404,986 10/15/24 319,842 10/15/34 410,049 04/15/25 323,839 04/15/35 415,174 10/15/25 327,887 10/15/35 420,364 04/15/26 331,986 04/15/36 425,630 The Series 2013 Bond will be registered as to both principal and interest, payable to the Bondholder, or registered assigns, as set forth hereinafter in the bond form, and shall be numbered R-1. Payment of principal and interest shall be by check or draft mailed to the Bondholder at its address shown on the bond registration books of the City which shall be maintained by the City Clerk as Bond Registrar, without presentation or surrender of the Series 2013 Bond (except upon final payment) and such payments shall discharge the obligation of the City to the extent thereof. The City Clerk shall keep a payment record and make proper notations thereon of all payments of principal and interest. Payment of principal and interest shall be in any coin or currency of the United States of America which, as at the time of payment, shall be legal tender for the payment of debts due the United States of America. When the principal of and interest on the Series 2013 Bond have been fully paid, it shall be canceled and delivered to the City Clerk. Section 3. The pledge of collections of the Tax (the "Pledged Revenues") in favor of the Series 2013 Bond is on a parity with the pledge in favor of the Series 2010 Bond and the Series 2011 Bond. The Series 2013 Bond is being issued as an Additional Parity Bond under Ordinance No. 2009-12-1 and shall be a part of "the bonds" within the meaning of such ordinance. In this regard, all provisions of Ordinance No. 2009-12-1 pertaining to "the bonds" shall inure and appertain to the Series 2013 Bond to the same extent and with like force and effect as if herein set out in full. The effect of the above provisions shall be to continue the 3 applicable provisions of Ordinance No. 2009-12-1 in full force and effect after the Series 2010 Bond and the Series 2011 Bond are paid or provision made therefor. Section 4. The Series 2013 Bond shall be in substantially the following form, and the Mayor and City Clerk are hereby authorized and directed to make all the recitals contained therein: (form of Series 2013 Bond) UNITED STATES OF AMERICA STATE OF ARKANSAS COUNTY OF INDEPENDENCE CITY OF BATESVILLE 1.50% SALES AND USE TAX BOND, SERIES 2013 No. R-1 $13,500,000 KNOW ALL MEN BY THESE PRESENTS: That the City of Batesville, Independence County, Arkansas (the "City"), for value received, hereby acknowledges itself to owe and promises to pay to the Arkansas Development Finance Authority, or registered assigns, solely from the special fund provided as hereinafter set forth,the principal sum of THIRTEEN MILLION FIVE HUNDRED THOUSAND DOLLARS (or the total principal amount outstanding as reflected by the Record of Payment of Advances attached hereto) with interest on the unpaid balance of the total principal amount at the rate of 1.50% per annum from the date of each advance. The principal and interest shall be payable 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 debts due the United States of America. Interest on the unpaid balance of the total principal amount shall be payable on 15, 20_ (the next April 15 or October 15 after the bond is issued) and on each April 15 and October 15 thereafter. Principal shall be payable in installments on October 15, 2016, and on each April 15 and October 15 thereafter until the unpaid principal is paid as follows: Date Amount (There will be inserted the schedule set forth in Section 2 of this Ordinance.) 4 Payments of the principal and interest installments due hereon shall be made, except for final payment, without presentation and surrender of this bond, directly to the registered owner at his address shown on the bond registration book of the City maintained by the City Clerk as Bond Registrar, and such payments shall fully discharge the obligation of the City to the extent of the payments so made. This bond is issued for the purpose of providing financing of a portion of the costs of acquiring, constructing and equipping extensions, betterments and improvements to the City's sewer system, and costs of authorizing and issuing this bond, and is issued pursuant to and in full compliance with the Constitution and laws of the State of Arkansas (the "State"), including particularly Amendment No. 62 to the Arkansas Constitution and the Arkansas Code of 1987 Annotated, Title 14, Chapter 164, Subchapter 3 (the "Authorizing Legislation"), and pursuant to Ordinance No. 2009-12-1 of the City, duly adopted and approved on the 22nd day of December, 2009, Ordinance No. 2011-06-03 of the City, duly adopted and approved on the 28th day of June, 2011, and Ordinance NocZOIZ—Clw-0I of the City, duly adopted and approved on the 25th day of June, 2013 (collectively, the "Authorizing Ordinance") and an election duly held on March 10, 2009 at which the majority of the legal voters of the City voting on the question approved the issuance of this bond. Reference is hereby made to the Authorizing Ordinance for the details of the nature and extent of the security and of the rights and obligations of the City and the registered owner of this bond. This bond may be assigned with the written approval of the Arkansas Natural Resources Commission (the "Commission"), and in order to effect such assignment the assignor shall promptly notify the City Clerk by registered mail, and the assignee shall surrender this bond along with a written approval of the Commission to the City Clerk for transfer on the registration records. Every assignee shall take this bond subject to all payments and prepayments of principal (as reflected by the Payment Record maintained by the City Clerk), prior to such surrender for transfer. This bond does not constitute an indebtedness of the City within any constitutional or statutory limitation or provision. This bond is a special obligation payable solely from a pledge of collections of the City's 1% sales and use tax, levied by Ordinance No. 2009-1-1 of the City duly adopted on January 13, 2009 under the authority of the Authorizing Legislation (the "Tax"), and the City hereby pledges its collections of the Tax for the payment of this bond. The pledge in favor of the bond is on a parity with the pledge in favor of the City's Sales and Use Tax Bond, Series 2010 (the "Series 2010 Bond") and the City's Sales and Use Tax Bond, Series 2011 (the "Series 2011 Bond"). The City has reserved the right in the Authorizing Ordinance to issue additional bonds, in the principal amount of $10,200,000, on a parity of security with this bond, the Series 2010 Bond and the Series 2011 Bond ("Additional Parity Bonds"). This bond may be prepaid, at the option of the City, in whole or in part at any time from Tax collections in excess of the amount necessary to insure the prompt payment of the principal of and interest on this bond, the Series 2010 Bond, the Series 2011 Bond and the Additional Parity Bonds ("Surplus Tax Collections") as the same becomes due at the prepayment price equal to the principal amount being prepaid plus accrued interest to the prepayment date. The City shall determine the bonds to be redeemed from Surplus Tax Collections. 5 This bond may also be prepaid at the option of the City from funds from any other source, in whole but not in part, at any time on and after October 15, 2023, at a prepayment price equal to the principal amount outstanding, plus accrued interest to the prepayment date, upon 90 days' notice. Notice shall be given of each prepayment in writing mailed to the address of the owner of this bond or registered assigns at the address as reflected on the bond registration books of the City Clerk. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required by the Constitution and statutes of the State to exist, happen and be performed precedent to and in the issuance of this bond do exist, have happened and have been performed in regular and due time, form and manner as required by law; that this bond does not exceed any constitutional or statutory limitation of indebtedness; and that provision has been made for the payment of the principal of and interest on this bond, as provided in the Authorizing Ordinance. IN WITNESS WHEREOF, the City of Batesville, Arkansas has caused this bond to be executed in its name by its Mayor and City Clerk, thereunto duly authorized, and its corporate seal to be affixed, all as of the day of , 2013. [The Bond shall contain signature spaces, a registration certificate and record of payment advances.] Section 5. (a) The City Treasurer shall set aside and make provision as set forth in (b) below from moneys in the special fund of the City heretofore created and designated "Sales and Use Tax Revenue Fund" (the "Revenue Fund") for the payment of the principal of and interest on the Series 2013 Bond by making a deposit as set forth in (b) below into an account of the City in a special fund to be created by the Bondholder (the "2013 ADFA Bond Fund") for the purpose of paying the principal of and interest on the Series 2013 Bond in the amounts specified in(b) below. (b) In order to pay interest on the Series 2013 Bond, there shall be deposited from moneys in the Revenue Fund into the 2013 ADFA Bond Fund on each April 15 and October 15 after the Series 2013 Bond is issued and delivered until April 15, 2016, the interest due on the Series 2013 Bond on such dates. Commencing on the first business day of each month thereafter, there shall be deposited into the 2013 ADFA Bond Fund from moneys in the Revenue Fund an amount equal to 1/6 of the amount of interest on and principal of the Series 2013 Bond next due. The deposit required herein shall be made contemporaneously with the deposit from the Revenue Fund into the 2010 ADFA Bond Fund required by Ordinance No. 2009-12-1 and into the 2011 ADFA Bond Fund required by Ordinance No. 2011-06-03. The obligation to make deposits into the 2010 ADFA Bond Fund, the 2011 ADFA Bond Fund and the 2013 ADFA Bond Fund shall be on a parity of lien, pledge and security. If the available moneys in the Revenue Fund are insufficient to make the required deposits in full, the available moneys shall be distributed between the 2010 ADFA Bond Fund, the 2011 ADFA Bond Fund and the 2013 ADFA Bond Fund in proportion to the required deposits. 6 (c) If moneys in the Revenue Fund are insufficient to make the required payment on or before the first business day of the following month into the 2013 ADFA 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 2013 ADFA Bond Fund on the first business day of the next month. (d) When the moneys held in the 2013 ADFA Bond Fund which represent payments by the City and interest earnings thereon or proceeds of investments therefrom (collectively, "City Funds") shall be and remain sufficient to pay in full the principal of and interest on the Series 2013 Bond, the City shall not be obligated to make any further payments into the 2013 ADFA Bond Fund. (e) All moneys in the 2013 ADFA Bond Fund representing City Funds shall be used solely for the purpose of paying the principal of and interest on the Series 2013 Bond and the City shall automatically receive a credit for the amount of such City Funds on hand in the 2013 ADFA Bond Fund and available for the payment of any principal and interest currently due on an interest or principal payment date irrespective of whether the Bondholder has applied or caused to be applied such funds on that date for such purpose. The City shall receive a credit for all earnings and income derived from the investment of the City Funds each April 15 and October 15 and such earnings and income shall be credited against the next six monthly payments. Section 6. After making the payments into the 2013 ADFA Bond Fund required by Section 5 hereof, into the 2010 ADFA Bond Fund, into the 2011 ADFA Bond Fund and into the bond funds for any Additional Parity Bonds, there shall be paid from the Revenue Fund the Financing Fee to the Authority. The Financing Fee shall be payable on each date interest on the Series 2013 Bond is due and shall be calculated on the same basis as interest on the Series 2013 Bond. The payment of the Financing Fee is expressly made subordinate to the payment of the principal of and interest on the Series 2013 Bond, the Series 2010 Bond, the Series 2011 Bond and any Additional Parity Bonds. Section 7. The City shall assure that (i) not in excess of 10% of the proceeds of the Series 2013 Bond 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 Series 2013 Bond during the term thereof is, under the terms of the Series 2013 Bond 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 proceeds of the Series 2013 Bond 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 Series 2013 Bond during the term thereof is, under the terms of the Series 2013 Bond 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 money used or to be used for a Private Business Use, then the excess over said 5% of proceeds of the Series 2013 7 Bond used for a Private Business Use shall be used for a Private Business Use related to the governmental use of the Improvements. The City shall assure that not in excess of 5% of the proceeds of the Series 2013 Bond are used, directly or indirectly, to make or finance a loan to persons other than state or local governmental units. As used in this Section, "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. Section 8. The principal and interest installments shall be prepayable prior to maturity as provided in the bond form in Section 4 hereof. Section 9. It is covenanted by the City with the Bondholder and the Commission that it will faithfully and punctually perform all duties with reference to the Tax required by the Constitution and laws of the State and by this Ordinance, including, without limitation, the collection of the Tax and applying the Pledged Revenues to the respective funds maintained pursuant to this Ordinance. If there be any default in the payment of the principal of or interest on the Series 2013 Bond, or if the City defaults in any 2013 ADFA Bond Fund requirement or in the performance of any of the other covenants contained in this Ordinance, the Bondholder may, by proper suit, compel the performance of the duties of the officials of the City under the laws of the State. No remedy herein conferred upon or reserved to the Bondholder is intended to be exclusive of any other remedy or remedies herein provided or provided by law, and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or given by law. No delay or omission of the Bondholder 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 default or an acquiescence therein; and every power and remedy given by this Ordinance to the Bondholder may be exercised from time to time and as often as may be deemed expedient. No waiver of any default shall extend to or affect any other existing or any subsequent default or defaults or impair any rights or remedies consequent thereon. Any costs of enforcement of the bonds or of any provision of this Ordinance, including reasonable attorney's fees, shall be paid by the City. The Authority may enforce all rights and exercise all remedies available to the Bondholder in the event the Financing Fee is not paid when due. Section 10. When the Series 2013 Bond has been executed and sealed as herein provided, it shall be delivered to the Bondholder upon payment of all or a portion of the purchase price in accordance with the Agreement. 8 The sale proceeds shall be deposited, as and when received, into a special fund of the City in a bank selected by the City that is a member of FDIC which is hereby created and designated "2013 Sales and Use Tax Bond Sewer Construction Fund" (the "Construction Fund"). The moneys in the Construction Fund shall be used for paying the costs, or reimbursing the City for the costs paid, in accomplishing the Improvements, expenses incidental thereto and the expenses of issuing the Series 2013 Bond approved in accordance with the Agreement. Payments from the Construction Fund shall be by check or voucher signed by the two persons designated by the City Council, and drawn on the depository. Each such check or voucher shall briefly specify the purpose of the expenditure. Section 11. (a) Moneys held for the credit of all funds created by this Ordinance shall, as nearly as may be practicable, be continuously invested and reinvested in direct obligations of, or obligations the principal of and interest on which are fully guaranteed by, the United States Government ("Government Obligations"), or other investments as may be from time to time authorized by law, which mature or which shall be subject to redemption by the holder, at the option of such holder, not later than the date or dates when the moneys will be needed for the purposes intended. (b) 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. (c) Moneys so invested in Government Obligations need not be secured by the depository bank. Section 12. The terms of this Ordinance shall constitute a contract between the City, the Bondholder and the Commission and no variation or change in the undertaking herein set forth shall be made while the Series 2013 Bond is outstanding unless consented to in writing by the Bondholder and the Commission. Section 13. The provisions of this Ordinance are hereby declared to be severable, and if any provision shall for any reason be held illegal or invalid, it shall not affect the validity of the remainder of this Ordinance. Section 14. Reference in this Ordinance to 'Bondholder" shall include the original Bondholder or any registered assign thereof. Section 15. All ordinances and resolutions and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. 9 PASSED: June 25, 2013 APPROVED: ATTEST: as Km,-,, M. Qa'. City Clerk (SEAL) 10 CERTIFICATE The undersigned, City Clerk of Batesville, Arkansas, hereby certifies that the foregoing pages are a true and perfect copy of Ordinance N -py , passed at a regular session of the City Council, held at the regular meeting place of the City Council at 5:30 o'clock p.m., on the 5th day of June, 2013, and that the Ordinance is of record in Ordinance Record Book No. , Page I I P, now in my possession. GIVEN under my hand and seal this 25h day of June, 2013. City Cleik (SEAL) 11