HomeMy WebLinkAbout854 (2)ORDINANCE NO. 6q
AN ORDINANCE PROVIDING FOR THE ISSUANCE OF WATER
AND SEWER REFUNDING REVENUE BONDS BY THE CITY OF
BATESVILLE, ARKANSAS, FOR THE PURPOSE OF REFUNDING
CERTAIN OUTSTANDING REVENUE BONDS (DESCRIBED IN THE
AUTHORIZING ORDINANCE); 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 Batesville, Arkansas (the "City")
owns and operates water and sewer facilities (which are
operated as an interrelated municipal undertaking and which
will be herein referred to as the "System");
WHEREAS, the System and its related properties and
facilities are being operated, managed and maintained by the
Batesville Utilities Commission (the "Utilities Commission");
WHEREAS, the City has outstanding an issue of Sewer
Revenue Bonds, dated February 1, 1967 (the "1967 Bonds") in
the original principal amount of $865,000 of which $731,000
are now outstanding; and
WHEREAS, the City has outstanding an issue of Waterworks
Revenue Bonds, dated October 1, 1961 (the "1961 Bonds") in
the original principal amount of $783,000 of which $541,000
are now outstanding, and an issue of Second Lien Water
System Revenue Bonds, dated April 1, 1965 (the "1965 Bonds")
in the original principal amount of $300,000 of which all
are outstanding; and
WHEREAS, the City Council of the City has determined
that by the issuance of $1,220,000 revenue bonds for the
refunding of the 1967 Bonds, the 1965 Bonds, and the 1961
Bonds, the City can thereby reduce present debt service
requirement by approximately $200,000, will realize other
benefits thereby and can establish an overall maturity
schedule to permit a total retirement of the bonded indebtedness
of the City and efficient operation and maintenance of the
System consistent with the lowest possible rate structure;
and
WHEREAS, in order to establish the refunding it is
necessary to purchase non -callable obligations issued or
guaranteed by the United States of America to be held in
trust for the benefit of the holders of the bonds being
refunded;
WHEREAS, the City Council of the City has examined the
proposal by Reynolds Securities, Inc., Little Rock, Arkansas,
for the purchase of such non -callable obligations and has
determined that the acceptance of such proposal will be in
the best interest of the City; and
WHEREAS, the City is authorized to issue refunding
bonds under the Constitution and laws of the State of Arkansas,
including Act No. 131 of 1933, as amended, Act No. 132 of
1933, as amended, Act No. 297 of 1937, as amended, and Act
No. 145 of 1967, as amended.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF
THE CITY OF BATESVILLE, ARKANSAS:
Section 1. The refunding of the 1967 Bonds, the 1965
Bonds, and the 1961 Bonds is hereby authorized.
Section 2. The City Council hereby finds and declares
the period of usefulness of the System is more than forty
(40) years.
Section 3. There are hereby authorized and ordered
sold and issued City of Batesville, Arkansas, Water and
Sewer Revenue Refunding Bonds in the principal amount of up to
$1,220,000 for the purpose of accomplishing the refunding of
the 1967 Bonds, the 1965 Bonds, and the 1961 Bonds, and
paying expenses incidental thereto and to the issuance of
the bonds. The bonds shall be dated August 1, 1976, and
shall mature on February 1 of each year at the interest rates
shown as follows:
DATE
RATE
AMOUNT
1977
5.00%
$27,000
1978
5.00%
29,000
1979
5.00%
30,000
1980
5.00%
32,000
1981
5.00%
33,000
1982
5.50%
35,000
1983
5.50%
37,000
1984
5.50%
401000
1985
5.50%
42,000
1986
5.50%
44,000
1987
5.75%
46,000
1988
6.00%
48,000
1989
6.00%
51,000
1990
6.20%
54,000
1991
6.20%
58,000
1992
6.30%
61,000
1993
6.30%
65,000
1994
6.40%
69,000
1995
6.40%
74,000
1996
6.40%
78,000
1997
6.50%
83,000
1998
6.50%
89,000
1999
6.50%
95,000
Interest on the bonds shall be payable on February l
and August 1 of each year, commencing February 1, 1977. The
bonds shall be numbered from 1 upwards and shall be in
substantially the form hereinafter set forth. The bonds
shall be subject to redemption prior to maturity as set
forth in the form of bond hereinafter. The Utilities Commission
is hereby authorized to sell the bonds at public sale on
sealed bids, and the Utilities Commission is authorized
(upon consultation with the City's fiscal agent) to distribute
a notice of sale and other descriptive documents for the
purpose of effecting a sale of the bonds on the best terms
obtainable. The sale of the bonds shall be approved by
resolution of the City Council, which resolution shall set
forth the terms of the bonds as they are being issued,
including interest rates, semiannual interest requirements,
annual principal and interest requirements, bond numbers,
denominations and the designation of a trustee and paying
agent.
Section 4. The bonds shall be executed on behalf of the
City by the Mayor and City Clerk and shall have impressed
thereon the seal of the City. The bonds may be executed
by the facsimile signature of the Mayor and the interest
coupons attached to the bonds may be executed by the facsimile
signature of the Mayor. Any facsimile signature of the
Mayor shall have the same force and effect as if personally
signed by him. The bonds must be executed by the manual
signature of the City Clerk. The bonds, together with interest
thereon, shall be payable solely from the Water and Sewer
Refunding Bond Fund as hereinafter set forth, and shall be
a valid claim of the holders thereof only against such fund
and the revenues pledged to such fund, which revenues are
hereby pledged and mortgaged for the equal and ratable payment
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of the bonds, and shall be used for no other purpose than to
pay the principal, interest, and trustee's and paying agent's
fees on the bonds, except as otherwise specifically provided
in this Ordinance. The bonds shall not be general obligations
of the City, but shall be special obligations, the principal
of and interest on which are secured by a pledge of net revenues
(gross revenues less operation and maintenance expenses) derived
from the operation of the System. The bonds and interest thereon
shall not constitute an indebtedness of the City within the
constitutional or statutory limitation.
Section 5. The bonds and coupons shall be in substantially
the following form, and the Mayor and City Clerk are hereby
expressly authorized and directed to make all recitals contained
therein:
UNITED STATES OF AMERICA
STATE OF ARKANSAS
COUNTY OF INDEPENDENCE
CITY OF BATESVILLE
% WATER AND SEWER REFUNDING REVENUE BOND
NO. $
KNOW ALL MEN BY THESE PRESENTS:
That the City of Batesville, Independence County,
Arkansas (the "City"), acknowledges itself to owe and, for
value received, hereby promise to pay to bearer, or if the
bond
is registered,
to the registered owner
hereof, solely
from
the special fund
provided as hereinafter
set forth, the
principal of
DOLLARS
in lawful money of the United States of America on the first
day of February, 19 , and to pay solely from the special
fund interest thereon at the rate of percent ( %)
per annum from the date hereof until paid. Interest is
payable semiannually on February 1 and August 1 of each
year, commencing February 1, 1977. Principal and interest
are payable at the principal office of
(the "Trustee"
and "Paying Agent"). Payment of interest, when registered
as to interest, may be by check or draft made payable to the
registered owner at his address reflected on the registration
book of the City.
This bond is one of a series of Water and Sewer Refunding
Revenue Bonds, aggregating $ in principal amount,
dated August 1, 1976, all of like tenor and effect except as
to number, rate of interest, maturity and rate of prior
redemption (the "bonds"), issued for the purpose of refunding
an issue of sewer revenue bonds, dated February 1, 1967, an
issue of waterworks revenue bonds, dated October 1, 1965, and an issue
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of second lien water system revenue bonds, dated April 1, 1965,
and paying necessary expenses incidental thereto and to the
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 Act No. 131 of 1933, as amended, Act No. 132 of 1933,
as amended, Act No. 297 of 1937, as amended, and Act No. 145
of 1967, as amended, and applicable decisions of the Supreme
Court of the State of Arkansas, including particularly City
of Harrison v. Braswell, 209 Ark. 1094, 194 S.W.2d 12 (1946),
and pursuant to an Ordinance of the City Council of the City,
duly adopted and approved, as supplemented by Resolution of
the City Council of the City, duly adopted and approved, being
Ordinance No.
day of , 19
and approved on the
, adopted and approved on the
, and Resolution No.
day of
, adopted
, 197 ,
(collectively referred to herein as the "Authorizing Ordinance"),
under which the bonds are authorized to be issued and to
which reference is hereby made for a statement of the nature
and extent of the security and the rights and obligations of
the City, the Trustee and the holders of the bonds. The City
has fixed and has covenanted and agreed to maintain rates for
services of the System which shall be sufficient at all times
at least to provide for the payment of the reasonable expenses
of operation and maintenance of the System, to provide for the
payment, when due, of the principal of and interest on the bonds,
with the Trustee's and Paying Agent's fees, as the same become
due and payable, to maintain required reserves, and to make
required deposits for the depreciation of the System.
The bonds are subject to redemption prior to maturity, at
the option of the City, in whole or in part, with there to be
no partial redemption of any bond, in inverse numerical order,
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at a price of the principal amount of the bonds being redeemed,
plus accrued interest to date of redemption on any interest
paying date from proceeds of the bonds in excess of amounts
needed to accomplish the refunding or from surplus water or
sewer revenues; on and after August 1, 1986 from funds from
any other source.
Notice of the call for redemption shall be published
one time in a newspaper of general circulation throughout
the State of Arkansas published in the City of Little Rock,
Arkansas, giving the number and maturity of each bond being
called, with the publication to be at least fifteen (15)
days prior to the redemption date, and after the date fixed
for redemption, each bond so called shall cease to bear
interest, provided funds for its payment are on deposit with
the Paying Agent at that time.• In addition, notice shall be
given by certified or registered mail to the registered
owner of each bond registered as to principal at the address
of such owner reflected on the bond registration book of the
bond registrar, and if all outstanding bonds shall be registered
as to principal, notice by certified or registered mail to
the registered owners thereof as aforesaid shall be sufficient,
and it shall not be necessary to publish notice of the call.
This bond may be registered as to principal or as to
principal and interest and may be discharged from such
registration in the manner, with the effect and subject to
the terms and conditions endorsed hereon. Subject to the
provisions for registration endorsed hereon, nothing contained
in this bond or in the Authorizing Ordinance shall affect or
impair the negotiability of this bond, and this bond shall
be deemed a negotiable instrument under the laws of the
State of Arkansas. This bond is issued with the intent that
the laws of the State will govern its construction.
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This bond shall not be valid until it shall have been
authenticated by the certificate hereon duly signed by the
Trustee.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all
acts, conditions and things required to exist, happen and to be
performed precedent to and in the issuance of the bonds have
existed, have happened and have been performed in due time,
form and manner, as required by law; that the indebtedness
represented by the bonds does not exceed any constitutional
or statutory limitations; and that sufficient revenues have
been pledged to and will be set aside for the payment of the
principal of and interest on the bonds.
IN WITNESS WHEREOF, the City of Batesville, Arkansas, by
v.. its City Council, has caused this bond to be signed by the
Mayor and City Clerk thereof (with the facsimile signature of
the Mayor and the manual signature of the City Clerk) and sealed
with the seal of the City, and has caused the interest coupons
attached to be signed by the facsimile signature of the Mayor,
all as of the first day of August, 1976.
ATTEST:
City Clerk
(SEAL)
CITY OF BATESVILLE, ARKANSAS
Mayor
C2
FORM OF COUPON
No.
On the first day of February, 19 the City of Batesville,
August,
Independence County, Arkansas, unless the bond to which this
coupon is attached is paid prior thereto, hereby promises to
pay to bearer, solely out of the special fund specified in
the bond to which this coupon is attached
DOLLARS
in such coin or currency as shall be legal tender for the payment
of debts due the United States of America at the principal office
of being six months'
interest then due on its Water and Sewer Revenue Refunding Bond,
dated August 1, 1976, and numbered
CITY OF BATESVILLE, ARKANSAS
By (facsimile signature
Mayor
On each of the bonds shall appear the following:
CERTIFICATE OF AUTHENTICATION
This is one of the bonds of the issue of the City of
Batesville, Arkansas, Water and Sewer Refunding Revenue Bonds,
dated August 1, 1976, and aggregating $ in principal
amount described in the bond to which this Certificate is
attached.
(Authorized Signature)
09
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PROVISIONS FOR REGISTRATION AND RECONVERSION
This bond may be registered as to principal alone on books
of the City, kept by the Trustee as bond registrar, upon presenta-
tion hereof to the bond registrar, which shall make mention of
such registration in the registration blank below, and this
bond may thereafter be transferred only upon an assignment duly
executed by the registered owner or his attorney or legal representa-
tive in such form as shall be satisfactory to the bond registrar,
such transfer to be made on such books and endorsed hereon by
the bond registrar. Such transfer may be to bearer, and therafter
transferability by delivery shall be restored but this bond
shall again be subject to successive registrations and transfers
as before. The principal of this bond, if registered, unless
registered to bearer, shall be payable only to or upon the order
of the registered owner or his legal representative. Interest
accruing on this bond will be paid only on presentation and
surrender of the attached interest coupons as they respectively
become due, and notwithstanding the registration of this bond
as to principal, the appurtenant interest coupons shall remain
payable to bearer and shall continue to be transferable by
delivery; provided, that if upon registration of this bond,
or at any time thereafter while this bond is registered in the
name of the owner, the unmatured coupons attached evidencing
interest to be thereafter paid hereon shall be surrendered to
said bond registrar, a statement to that effect will be endorsed
hereon by the bond registrar and thereafter interest evidenced
by such surrendered coupons may be paid by check or draft of
the bond registrar at the times provided herein to the registered
owner of this bond by mail to the address shown on the registration
books. This bond when so converted into a bond registered as
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to both principal and interest may be reconverted into a
coupon bond at the written request of the registered owner and
upon presentation at the office of said bond registrar. Upon
such reconversion the coupons representing the interest to
become due thereafter to the date of maturity will again be
attached to this bond and a statement will be endorsed hereon
by the bond registrar in the registration blank below whether
it is then registered as to principal or payable to bearer.
Date of Registration
Name of Registered Owner
Manner of
Registration
Signature of
Bond Registrar
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Section 6. The rates to be charged for the services
furnished by the System heretofore fixed by the ordinances
of the City Council, and the conditions, rights and obligations
pertaining thereto, as set forth in those ordinances, are hereby
ratified, confirmed and continued, including without limitation
the sewer rates set forth in Ordinance No. 740, adopted and
approved January 3, 1967, as amended by Ordinance No. 814,
adopted and approved July 11, 1972, and Ordinance No. 844,
adopted and approved April 8, 1975, and the water rates set
forth in Ordinance No. 681, adopted and approved September 19,
1961, as amended by Ordinance No. 712, adopted and approved
May 11, 1965, and Ordinance No. 813, adopted and approved
July 27, 1972.
The City covenants and agrees that the rates shall never
1%.
be reduced while any of the bonds are outstanding, and, if
necessary, from time to time, shall be increased to that
amount which will produce net revenues (net revenues being
defined as gross revenues less the expenses of operation and
maintenance of the System, including all expense items properly
attributable to the operation of the System under generally
accepted accounting principals applicable to municipal water
and sewer systems) at least sufficient to pay principal, interest,
and Trustee's and Paying Agent's fees when due, on all bonds
to which System revenues are pledged, to make required deposits
into the Depreciation Fund, and otherwise comply with the pro-
visions of ordinances authorizing bonds.
Section 7. None of the facilities or services affored by
the System shall be furnished without a charge being made
therefor. In the event that the City or any department, agency
or instrumentality thereof shall avail itself of the facilities
and services afforded by the System, the reasonable value of
the services or facilities so afforded shall be charged against
the City or such department, agency or instrumentality and shall
be paid for as the charges therefor accrue. The revenues so
received shall be deemed to be revenues derived from the opera-
tion of the System and shall be used and accounted for in the same
manner as any other revenue derived from the operation of the
System. Nothing herein however shall be construed as requiring
the City or any department, agency or instrumentality thereof
to avail itself of the facilities or services afforded by
the System.
Section 8. The Treasurer of the City shall be custodian
of the gross revenues derived from the operation of the
System and shall give bond for the faithful discharge of his
duties as such custodian. The amount of the bond shall at
all times be at least equal to the total funds in his custody
at any one time and shall be approved by the City Council
and the Trustee. All monies received by the Treasurer shall
be deposited by him in such depository or depositories for
the City as may be lawfully designated from time to time by
the City Council, but which must hold membership in the
Federal Deposit Insurance Corporation. All deposits shall
be in the name of the City and shall be so designated as to
indicate the particular funds to which the revenues belong.
Section 9. Water and Sewer Fund. All revenue derived
from the operation of the System shall be paid into a special
fund, which is hereby created and designated "Water and
Sewer Fund." The revenues in the Water and Sewer Fund are
hereby pledged and shall be applied to the payment of the
principal of and interest on the bonds, to the payment of
reasonable and necessary expenses of operation and maintenance
of the System, to the providing of the Depreciation Fund, and
otherwise as in this Ordinance expressly authorized.
Section 10. Water and Sewer Refunding Bond Fund.
(a) There shall be transferred from the Water and Sewer Fund
into a special fund which is hereby created and designated
"Water and Sewer Refunding Bond Fund" (the "Bond Fund") the
sums in the amounts and at the times hereinafter stated in
subsection (b) for the purpose of providing funds for the
payment of the principal of and interest on the bonds herein
authorized, with the Trustee's and Paying Agent's fees, and
for the maintenance of a debt service reserve.
(b) There shall be paid from the Water and Sewer Fund
into the Bond Fund, beginning on the first business day of
the month immediately following the month in which the bonds
are delivered, and continuing on the first business day of
each month thereafter until all outstanding bonds of this
issue with interest thereon have been paid in full, or
provisions made for their payment, a sum equal to one-sixth
(1/6) of the next installment of interest and one -twelfth
(1/12) of the next installment of principal, plus such
additional sums as are necessary to provide for the Trustee's
and Paying Agent's fees, on all outstanding bonds; provided,
however, that should the debt service reserve (established
pursuant to Section 14 hereof and required hereby to be
maintained in the Bond Fund) ever become impaired or be
reduced below the required level of an amount equal to the
average annual principal and interest requirements on the
bonds, the required monthly payment shall be increased to a
sum equal to one-fifth (1/5) of the next installment of
interest and one-tenth (1/10) of the next installment of
principal, plus an amount sufficient to provide for the
Trustee's and Paying Agent's fees, on all outstanding bonds,
until the impairment is cured or the debt service reserve is
increased to the required level, which their payment and
transfer shall be made from the first available monies from
the Water and Sewer Fund.
(c) If the revenues of the System are insufficient to
make the required payment on the first business day of the
following month into the Bond Fund, then the amount of any
such deficiency in the payment made shall be added to the
amount otherwise required to be paid into the Bond Fund on
the first business day of the next month.
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(d) If for any reason the City shall fail at any time
to make any of the required payments into the Bond Fund, any
sums then held as a debt service reserve shall be used to
the extent necessary in the payment of the principal of and
interest on the bonds, but such reserve shall be reimbursed
from the Water and Sewer Fund before any of the monies in
the Water and Sewer Fund shall be used for any other purpose
except for making the payments hereinabove required to be
made into the Operation and Maintenance Fund and into the
Bond Fund. The debt service reserve shall be used solely as
herein provided.
(e) When the monies held in the Bond Fund, including
the debt service reserve, shall be and remain sufficient to
pay the principal of and interest on all bonds then outstanding,
and the Trustee's and Paying Agent's fees, the Treasurer
shall not be obligated to make any further payments into the
Bond Fund.
(f) All monies in the Bond Fund shall be used solely
for the purpose of paying the principal of and interest on
the bonds, and the Trustee's and Paying Agent's fees, except
as herein specifically provided. If a surplus shall exist
in the Bond Fund over and above the amount required for
making all principal and interest payments during the succeeding
12 months on all outstanding bonds, and the Trustee's and
Paying Agent's fees, and over and above the debt service
reserve, such surplus may be applied to the payment of the
principal of and interest on any bond that may be called for
redemption prior to maturity.
(g) There shall be withdrawn from the Bond Fund at
least 10 days before the due date of any bond or interest
coupon issued hereunder and deposited with the Paying Agent
an amount equal to the amount of such bond or coupon for the
sole purpose of paying the same, together with the Paying
Agent's fees. Such deposits shall be at the sole risk of
the City and shall not operate as a payment of the bond or
coupon until so applied.
(h) The bonds shall be specifically secured by a
pledge of all the revenues required to be placed into the
Bond Fund. This pledge in favor of the bonds is hereby
irrevocably made according to the terms of this Ordinance,
and the City, the Utilities Commission and their officers
and employees shall execute, perform and carry out the terms
hereof in strict conformity with the provisions of this
Ordinance.
Section 11. Water and Sewer Operation and Maintenance Fund.
After making the monthly deposit in the Water and Sewer Refunding
Bond Fund, there shall be paid from the Water and Sewer Fund
into a fund which is hereby created and designated "Water and
Sewer Operation and Maintenance Fund" (the "Operation and .
Maintenance Fund"), on the first business day of each month
an amount sufficient to pay the reasonable and necessary
monthly expenses of operation, repair and maintenance of the
System for such month and from which disbursements shall be
made only for those purposes. Fixed annual charges such as
insurance premiums and the cost of major repair and maintenance
expenses may be computed and set up on an annual basis, and
one -twelfth (1/12) of the amount thereof may be paid into
the Operation and Maintenance Fund each month.
If in any month for any reason there shall be a failure
to transfer and pay the required amount into said fund, the
amount of any deficiency shall be added to the amount otherwise
required to be transferred and paid into said fund in the
next succeeding month. If in any fiscal year a surplus
shall be accumulated in the Operation and Maintenance Fund
over and above the amount which shall be necessary to
defray the reasonable and necessary costs of operation,
repair and maintenance of the System during the remainder of
the then current fiscal year and the next ensuing fiscal
year, such surplus may be transferred and deposited in the
Bond Fund (hereinafter created) or in the Depreciation Fund
(hereinafter created); provided, however, that any such
transfer into the Bond Fund shall be in addition to all
other payments required to be made into said fund.
Section 12.
Water and Sewer Depreciation Fund. After
making the required payments into the Bond Fund and the
Operation and Maintenance Fund, there shall be paid by the
Treasurer from the Water and Sewer Fund into a fund which is
hereby created and designated "Water and Sewer Depreciation
Fund" (the "Depreciation Fund"), on the first business day of
the month immediately following the month in which the bonds
are delivered and continuing on the first business day of each
month thereafter while any of the bonds are outstanding, 30
of the gross revenues of the System for the preceding month.
The monies in the Depreciation Fund shall be used solely for
the purpose of paying the cost of replacements made necessary
by the depreciation of the System; provided, however, in the
event that no other funds are available therefor the monies
in the Depreciation Fund may be used to the extent necessary
to prevent a default in the payment of the principal of and
interest on the bonds as the same become due and payable.
If in any fiscal year a surplus shall be accumulated in
the Depreciation Fund over and above the amount necessary to
defray the cost of the probable replacements during the then
current fiscal year, and the next ensuing fiscal year, such
surplus may be transferred and paid into the Bond Fund;
provided, however, that such payments into the Bond Fund
shall be in addition to all other payments hereinbefore
required to be made into the Bond Fund.
Section 13. Any surplus in the Water and Sewer Fund
after making all distributions required by the provisions of
this Ordinance and making full provision for the other funds
herein provided may be used, at the option of the City and
Utilities Commission, for the redemption of bonds prior to
maturity in accordance with the redemption provisions herein
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set forth, for constructing extensions, betterments and
improvements to the City, or for any other lawful municipal
purpose.
Section 14. (a) Upon delivery of the bonds there
shall be transferred, from funds or accounts being maintained
pursuant to Ordinances authorizing and pertaining to the
1967 Bonds, the 1965 Bonds, and the 1961 Bonds, and deposited
in the Bond Fund, as a debt service reserve, hereby establish
an amount equal to the average annual principal and interest
requirements on the bonds, which amount shall be held and
used solely for the purposes as set forth in Section 10
hereof.
(b) After complying with (a) above, any monies now
being held in any fund or account being maintained pursuant
to the Ordinances authorizing and pertaining to the 1967
Bonds, the 1965 Bonds, or the 1961 Bonds, shall be transferred
to the corresponding fund or funds created and to be maintained
pursuant to the provisions of this Ordinance.
Section 15. The City hereby agrees that all payments
on the bonds and interest shall be made only through the
Paying Agent. All bonds paid at maturity or redemption
prior to maturity shall be cancelled when such payment is
made, together with all unmatured coupons appertaining
thereto, and shall not be reissued. All unpaid interest
coupons maturing on or prior to the date of such payment
shall continue to be payable to the respective bearers
thereof.
Section 16. As long as any of the bonds authorized and
issued under and pursuant to the provisions of this Ordinance
are outstanding, the City shall not issue or attempt to
issue any bonds claimed to be entitled to a priority of lien
on the revenues of the System over the lien securing the
bonds of this issue. Nothing contained in this Ordinance
shall be construed to prevent the issuance by the City of
additional bonds to finance or pay the cost of constructing
any future extensions, betterments or improvements to the
System; provided, however, the City shall not authorize or
issue any such additional bonds ranking on a parity with
these bonds unless and until (1) 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 System for the fiscal year immediately
preceding the fiscal year in which it is proposed to issue
such additional bonds shall equal not less than 135% of
the average annual principal and interest requirements on
the bonds and the bonds proposed to be issued. For the
purposes of the computation required by this paragraph,
additional amounts may be added to the net 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 such
preceding fiscal year, the City shall have increased its
rates or charges imposed for services of the System there
may be added to the net revenues of such fiscal year the
additional net revenues which would have been received from
the operation of the System during such fiscal year had such
increase been in effect throughout such fiscal year, as
reflected by a certificate of a duly qualified consulting
engineer not in the regular employ of the City and approved
by the Trustee.
The term "net revenues" as used in this Section shall
mean gross revenues of the System less the amounts required
to pay the costs of operation, maintenance and repair of the
System.
The additional bonds, the issuance of which is restricted
and conditioned by this Section, shall be understood to mean
bonds payable from the revenues of the System on a parity
with these bonds and shall not be deemed to include other
obligations the security and source of payment of which are
subordinate and subject to the priority of these bonds.
Section 17. It is covenanted and agreed by the City
and with the holders and registered owners of the bonds, or
any of them, that the City and the Utilities Commission will
faithfully and punctually perform all duties with reference
to the System required by the Constitution and laws of the
State of Arkansas, including the charging and collecting of
reasonable and sufficient rates, as herein specified, lawfully
established for services rendered by the System, the segregating
of the revenues of the System as herein required and the
applying of the revenues to the respective funds herein
created and referred to.
Section 18. The bonds authorized hereby and issued hereunder
shall be subject to redemption prior to maturity in accordance
with the terms set out in the bond form.
Section 19. 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 trans-
actions relating to the operation of the System, and such books
shall be available for inspection by the holder of any
of the bonds at reasonable times and under reasonable circum-
stances. The City agrees to have these records audited by an
on
N%NW independent certified public accountant at least once each
year, and a copy of the audit shall be delivered to the
Trustee and made available to interested holders and registered
owners. In the event the City fails or refuses to make the
audit, the Trustee, or any holder and registered owner of the
bonds may have the audit made, and the cost thereof shall be
charged against the Operation and Maintenance Fund.
Section 20
The City covenants and agrees that it will
maintain the System in good condition and operate the same
in an efficient manner and at reasonable cost. While any bonds
authorized hereby are outstanding, the City agrees that it will
insure and at all times keep, insured, in the amount of the
full insurable value thereof, in a responsible insurance company
or companies authorized and qualified under the laws of the
State of Arkansas to assume the risk thereof, properties of
the System, to the extent that such properties would be covered
by insurance by private companies engaged in similar types of
businesses, against loss or damage thereto from fire, lightning,
tornado, winds, riot, strike, civil commotion, malicious
damage, explosion, extended coverage and against any other loss
or damage from any other causes customarily insured against
by private companies engaged in similar types of businesses.
The insurance policies are to be taken with companies approved
by the Trustee, are to carry a clause making them payable to
the Trustee as an additional insured as its interest may appear,
and are either to be placed in the custody of the Trustee or
satisfactory evidence of the insurance shall be filed with the
Trustee. In the event of loss, the proceeds of such insurance
shall be applied solely toward the reconstruction, replacement
or repair of the System, and in such event the City will, with
reasonable promptness, cause to be commenced and completed the
reconstruction, replacement and repair work. If such proceeds
are more than sufficient for such purposes, the balance remaining
shall be deposited to the credit of the Water and Sewer
Fund, and if such proceeds shall be insufficient for such
purposes, the deficiency shall be supplied, first, from
monies in the Depreciation Fund, and second, from monies in
the Operation and Maintenance Fund, and third, from surplus
monies in the Water and Sewer Fund. Nothing herein shall be
construed as requiring the City to expend any funds for
operation and maintenance of the System or for premiums on
its insurance which are derived from sources other than the
operation of the System, but nothing herein shall be construed
as preventing the City from doing so.
Section 21. The City covenants and agrees that so long
as any bonds authorized hereby are outstanding, that it will
not mortgage, pledge or otherwise encumber the System, or any
part thereof or any revenues derived from the operation thereof,
except as herein specifically provided, and will not sell,
lease or otherwise dispose of any substantial portion of the
same.
Section 22. There shall be a statutory mortgage lien
upon the water facilities, which shall exist in favor of the
holders and registered owners of the bonds until payment
in full of the interest on and principal of the bonds; provided,
however, that such statutory mortgage lien shall be interpreted
according to the decision of the Supreme Court of the State
of Arkansas in Cid of Harrison v. Braswell, supra.
Section 23.
The owner or owners of all improved property
lying within the area that will be served by the sewer facilities
are hereby directed and required, upon written request from
the City, to connect all toilet and waste water facilities
of such improved property with the sewer facilities. The
required notice by the City shall be given at least thirty (30)
days prior to the final date for connection, and if any property
owner shall fail to make such connection after having been
so requested in writing, the City hereby covenants and agrees
to institute appropriate proceedings in a court of competent
jurisdiction to compel such connection. Furthermore, any
property owner who fails or refuses to connect his improved
property with the sewer facilities after having been so requested
by the City shall be guilty of a misdemeanor and upon conviction
shall be fined in any sum not less than $2.00 and not more than
$10.00, and each day's failure or refusal after the expiration
of the time fixed in the notice to make the connection shall be
a separate offense; provided, however, that the provisions
hereof pertaining to a misdemeanor shall be effective only
in the event that the City Health Officer, or other duly designated
individual or board, has found and declared that such failure
on the part of any particular property owner constitutes a
hazard to the public health and safety of the City and its
inhabitants.
Section 24. (a) The City covenants and agrees that the
holders and registered owners of the bonds shall have the
protection of the provisions of Section 13 of Act No. 132 of
the Acts of Arkansas of 1933, as amended (Ark. Stat. Ann.
§19-4113 (Repl. 1968)) ("Act No. 132"), and the City will
diligently proceed to enforce the lien of unpaid sewer charges
against the premises served by the sewer facilities and to
collect the amount due, together with the penalty and expenses
authorized by Act No. 132. And, if the City shall fail to
proceed within thirty (30) days after written request shall have
been filed by the Trustee, the Trustee may, and upon the written
request of the holders and registered owners of not less than
ten percent (10%) in principal amount of the bonds then out-
standing shall, proceed to enforce the lien in accordance with
and pursuant to the authorization of Act No. 132.
C'A
(b) If there be any default in the payment of the
principal of or interest on any of the bonds, or if the City
defaults in any Bond Fund requirements or in the performance
of any of the other covenants contained and set forth in
this Ordinance, the Trustee may, and upon the written request
of the holders and registered owners of not less than ten
percent (loo) in principal amount of the bonds then outstanding
shall, by proper suit compel the performance of the duties
of the officials of the City under the laws of Arkansas. And,
in the case of a default in the payment of the principal of
and interest on any of the bonds, the Trustee may, and upon
the written request of holders or registered owners of not
less than ten percent (100) 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 System on behalf of the City and the holders
and registered owners with power to charge and collect (or
by mandatory injunction or otherwise to cause to be charged and
collected) rates sufficient to provide for the payment of the
expenses of operation, maintenance and repair and to pay any
bonds and interest outstanding and to apply the revenue in
conformity with the laws of Arkansas and with this Ordinance.
When all defaults in principal and interest payments have
been cured, the custody and operation of the System shall
revert to the City.
(c) No holder or registered owner of any of the out-
standing bonds shall have any right to institute any suit,
action, mandamus or other proceeding in equity or in law
for the protection or enforcement of any right under this
Ordinance or under the laws of Arkansas unless such holder
or registered owner previously shall have given to the Trustee
written notice of the default on account of which such suit,
action or proceeding is to be taken, and unless the holders and
`WAW
registered owners of not less than ten percent (10%) in
principal amount of the bonds then oustanding shall have made
written request of the Trustee after the right to exercise
such powers or right of action, as the case may be, shall
have accrued, and shall have afforded the Trustee a reasonable
opportunity either to proceed to exercise the powers herein
granted or granted by the laws of Arkansas, or to institute
such action, suit or proceeding in its name, and unless, also,
there shall have been offered to the Trustee 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 owners of the bonds hereby
secured shall have any right in any manner whatever by his
or their action to affect, disturb or prejudice the security
of this Ordinance, or to enforce any right hereunder except
in the manner herein provided, that all proceedings at law
or in equity shall be instituted, had and maintained in the
manner herein provided, that all proceedings at law or in
equity shall be instituted, had and maintained in the manner
herein provided and for the benefit of all holders and
registered owners of the outstanding bonds and coupons, and
that any individual rights of action or other right given
to one or more of such holders and registered owners by law
are restricted by this Ordinance to the rights and remedies
herein provided.
*4. (d) All rights of action under this Ordinance or under
any of the bonds secured hereby, enforceable by the Trustee,
may be enforced by it without the possession of any of the
bonds or coupons appertaining thereto, and any such suit, action
or proceeding instituted by the Trustee shall be brought in
its name for the benefit of all the holders and registered
owners of such bonds and coupons, subject to the provisions of
this Ordinance.
(e) No remedy herein conferred upon or reserved to
the Trustee or to the holders and registered owners of the
bonds is intended to be exclusive of any other remedy or
remedies herein provided, and each and every such remedy shall
be cumulative and shall be in addition to every other remedy
given hereunder or given by any other law.
(f) No delay or omission of the Trustee or of any holders
of registered owners of the bonds to exercise any right or
power accrued upon any default shall impair any such right or
power or shall be construed to be a waiver of any such default
or an acquiescence therein; and every power and remedy given by
this Ordinance to the Trustee and to the holders and registered
owners of the bonds, respectively, may be exercised from time to
time and as often as may be deemed expedient.
(g) The Trustee may, and upon the written request of the
holders and registered owners of not less than fifty percent
(500) in principal amount of the bonds then outstanding shall,
waive any default which shall have been remedied before the entry
of final judgment or decree in any suit, action or proceeding
instituted under the provisions of this Ordinance or before the
completion of the enforcement of any other remedy, but no such
waiver shall extend to or affect any other existing or any
subsequent default or defaults or impair any rights or remedies
consequent thereon.
OEM
nor►
Section 25.
e'er
When the bonds have been executed and the
seal of the City impressed as herein provided, they shall be
delivered to the Trustee and the Trustee shall authenticate
them and deliver them to the purchaser upon payment of the
purchase price plus accrued interest from August 1, 1976, to
the day of delivery ("bond proceeds"). The purchase price
shall be paid in federal funds and in the manner as set
forth in a letter of delivery instructions executed by the
Mayor and delivered to the Trustee.
As set forth in the letter of delivery instructions or
as set forth in the Trust Agreement (identified below), the
bond proceeds shall be delivered to Reynolds Securities,
Inc., the City's financial advisor -for the purpose of acquiring
for the City direct or fully guaranteed securities of the
United States (being any securities or guaranteed securities
supported by a pledge of the full faith and credit of the
United States) with such maturities and redemption provisions
as, together with available cash, will produce, as needed,
sufficient monies to pay principal, interest, and Trustee's
and Paying Agent's fees on the 1967 Bonds, the 1965 Bonds,
and the 1961 Bonds, as due and payable. The investment
securities and cash, if any, shall be identified in a Trust
Agreement executed by the Mayor and City Clerk, which Trust
Agreement shall provide that the investment securities, and
cash, if any, shall be held in trust for the security of the
1967 Bonds, the 1965 Bonds, and the 1961 Bonds, and shall
provide for the proper handling and disbursement of monies
held in trust thereunder for the payment of principal,
interest and Trustee's and Paying Agent's fees on the 1967
Bonds, the 1965 Bonds, and the 1961 Bonds, as due and payable.
The Mayor and City Clerk are authorized and directed to
enter into an appropriate Trust Agreement, and such writings
as may be necessarily incidental thereto, incorporating and
implementing the provisions of this Section. All monies
remaining after payment and redemption of all previous bonds
shall be remitted to the City for deposit and handling as
set forth in this Ordinance.
Section 26.
(a) Monies held for the credit of the
debt service reserve in the Bond Fund may be continuously
invested and reinvested pursuant to the directions of the
City in direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by
the United States of America, in certificates of deposit of
banks that are members of the Federal Deposit Insurance
Corporation, or other investments as may be, from time to
time, permitted by law, which shall mature, or which shall
be subject to redemption by the holder thereof, at the
option of such holder, not later than the date or dates when
the monies held for the credit of the Bond Fund shall be
required for the purposes intended.
(b) Monies held for the credit of any other fund may,
at the option of the City, be invested and reinvested pursuant
to the direction of the City in direct obligations of,
or obligations the principal of and interest on which are
unconditionally guaranteed by the United States of America, in
certificates of deposit on banks that are members of the
Federal Deposit Insurance Corporation, or other investments
as may be, from time to time, permitted by law, which shall
mature, or which shall be subject to redemption by the holder
thereof, at the option of such holder, not later than the date
or dates when the monies held for the credit of the particular
fund will be required for the purposes intended.
(c) Obligations so purchased as an investment of monies
in such fund shall be deemed at all times to be part of such
fund and the interest accruing thereon and any profit realized
from such investment shall be credited to such fund, and any
loss resulting from such investment shall be charged to such
fund.
(d) Monies so invested in United States Government obliga-
tions, as above defined, need not be secured by the depository
bank.
Section 27.
In the event the office of Mayor, City Clerk,
City Treasurer, Manager -Engineer of the Utilities Commission,
City Council, or attorney for the Utilities Commission shall be
abolished, or any two or more of such offices shall be merged or
consolidated, or in the event the duties of a particular office
shall be transferred to another office or officer, or in the
event of a vacancy in any such office by reason of death,
resignation, removal from office or otherwise, or in the event
any such officer shall become incapable of performing the duties
of his office by reason of sickness, absence from the City
or otherwise, all powers conferred and all obligations and duties
imposed upon such office or officer shall be performed by the
office or officer succeeding to the principal functions thereof,
or by the office or officer upon whom such powers, obligations
and duties shall be imposed by law.
Section 28.
The City covenants that it shall not take any
action or suffer or permit any action to be taken or condition
to exist which causes or may cause the interest payable on the
bonds to be subject to federal income taxation. Without limiting
the generality of the foregoing, the City covenants that the
proceeds of the sale of the bonds will not be used directly
or indirectly in such manner as to cause the bonds to be treated
as "arbitrage bonds" within the meaning of Section 103(d) of
the Internal Revenue Code of 1954, as amended.
Section 29.
The provisions of this Ordinance shall con-
stitute a binding contract between the City and the holders and
registered owners of the outstanding bonds and coupons issued
hereunder, and the City will at all times strictly adhere to
the terms and provisions hereof and fully discharge all of its
obligations hereunder. Subject to the terms and provisions
contained in this Section and not otherwise, the holders and
registered owners of not less than seventy-five percent (750) in
ow aggregate principal amount of the bonds then outstanding shall
have the right, from time to time, anything contained in this
Ordinance to thecontrary 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 herein contained shall permit or be construed as
permitting (a) an extension of the maturity of the principal of
or the interest on any bond issued hereunder, or (b) a reduction
in the principal amount of any bond or the rate of interest therein,
or (c) the creation of a lien upon or a pledge of revenues
other than as expressly authorized by the appropriate provisions
of this Ordinance as now adopted, or (d) the creation of a privilege
of priority of any bond or bonds over any other bond or bonds, or
(e) a reduction in the aggregate principal amount of the bonds
required for consent to such supplemental ordinance.
Section 30. The Mayor is hereby directed ?.o publish for one
insertion in The Batesville Guard, which is hereby found and
declared to be a newspaper published in the City and of general
circulation therein, this Ordinance, to which shall be attached
a Notice signed by him in substantially the following form:
9
NOTICE
Notice is hereby given that the City Council of the City
of Batesville, Arkansas, has adopted the ordinance hereinafter
set out; that the City contemplates the issuance of Water and
Sewer Revenue Refunding Bonds described in the Ordinance; that
any person interested may appear before the Council on the
1 :< 1976, at )J o'clock .m.,
at the usual meeting place of the Council held in the City and
present protests. At such hearing all objections and suggestions
will be heard, and the Council will take such action as is
deemed proper in the premises.
DATED this. day of 1976.
Section 31. The Trustee shall only be responsible for
the exercise of good faith and reasonable prudence in the
execution of its trust. The recitals in this Ordinance and
in the face of the bonds are the recitals of the City and
not of the Trustee. The Trustee shall not be required to
take any action as Trustee unless it shall have been requested
to do so in writing by the holders and registered owners of
not less than ten percent (100) in principal amount of the
bonds of this issue then outstanding and shall have been
offered reasonable security and indemnity against the costs,
expenses and liabilities to be incurred therein or thereby.
The Trustee may resign at any time by ten (10) days notice
in writing to the City Clerk and the majority in principal
amount of the holders and registered owners of the outstanding
bonds of this issue at any time, with or without cause, may
remove the Trustee. In the event of a vacancy in the office
of Trustee, either by resignation or by removal, the majority
in principal amount of the holders and registered owners of
the oustanding bonds of this issue may appoint a new Trustee,
such appointment to be evidenced by a written instrument or
instruments filed with the City Clerk. If the majority in
principal amount of the holders and registered owners of the
outstanding bonds of this issue shall fail to fill a vacancy
within thirty'(30) days after the same shall occur, then the
City shall forthwith designate a new Trustee by a written
instrument filed in the office of the City Clerk. The
original Trustee and any successor Trustee shall file a
written acceptance and agreement to execute the trust imposed
upon it or them by this Ordinance, but only upon the terms
and conditions set forth in this Ordinance and subject to the
provisions of this Ordinance, to all of which the respective
holders and registered owners of the bonds agree. Such written
N...
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acceptance shall be filed with the City Clerk and a copy
v.r
thereof shall be placed in the bond transcript. Any successor
Trustee shall have all the powers herein granted to the
original Trustee. In the event of a change in the office of
Trustee, the old Trustee which has resigned or been removed
shall cease to be Paying Agent.
Section 32. This Ordinance shall not create any right
of any kind and no right of any kind shall arise hereunder
pursuant to it until the bonds authorized by this Ordinance
shall be issued and delivered.
Section 33. If any provision of this Ordinance shall
for any reason be declared to be illegal or invalid, such declara-
tion shall not affect the validity of the remainder of the
*.w provisions of the Ordinance and to that event all provisions
of this Ordinance are hereby declared to be severable.
Section 34. All ordinances, resolutions and parts thereof
in conflict herewith, including specifically any parts of
the ordinances and resolutions authorizing and pertaining to
the previous bonds, that are in conflict herewith are hereby
repealed to the extent of such conflict.
Section 35. It is hereby ascertained and declared at an
immediate need exists for the refunding of the indebtedness
evidenced by the previous bonds, in order that the savings and
other significant benefits may be realized. It is, therefore,
declared that an emergency exists, and this Ordinance being
necessary for the immediate preservation of the public peace,
health and safety shall take effect and be in force from and
after its passage.
PASSED: v ��
1976.
r� APPROVED:
)e z�
ATTEST:
Mayor
City Clerk -
(SEAL)
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CAP" ,.�►
CERTIFICATE
The undersigned, City Clerk of the City of Batesville,
Arkansas, hereby certifies that the foregoing pages, numbered
1 to inclusive, are a true and perfect copy of
Ordinance No. ')--t , adopted at a j<<>
,�=�.�- session
of the City Council of the City, held at the regular meeting
place of the Council in the City at --7
o'clock
.m. , on the t,- da of
y `� 1976, and that
the Ordinance is of record in Ordinance Record Book No.
Page -7`1") now in m Possession.
y p ess.ion.
GIVEN under my hand and seal on this day of
1976.
(Seal)
City Clerk