HomeMy WebLinkAboutOrdinance 2880 %c
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ORDINANCE NO .
AN ORDINANCE AUTHORIZING IMPROVEMENTS TO THE
FAYETTEVILLE MUNICIPAL AIRPORT , DRAKE FIELD ;
AUTHORIZING THE ISSUANCE OF AIRPORT REVENUE
BONDS ; PROVIDING FOR THE SECURITY AND PAYMENT
OF THE BONDS ; PRESCRIBING OTHER MATTERS
PERTAINING THERETO ; AND DECLARING AN
EMERGENCY .
WHEREAS , the Fayetteville Municipal Airport , Drake
Field ( the " Airport " ) is operated on behalf of and for the mutual _
benefit of the City of Fayetteville , Arkansas ( the " City " ) and the
citizens and inhabitants thereof , by the City , pursuant to Act No .
175 of the Acts of Arkansas of 1959 , as amended ; and
WHEREAS , upon necessary investigation it has been found
by the Board of Directors of the City that portable one - airplane
hangars ( hereafter referred to as " T - Hangars " ) should be acquired
by the City and held for rent to Airport users ; and
WHEREAS , the City has outstanding $ 575 , 000 in principal
amount of Municipal Airport Revenue Bonds , Series 1979 , dated May
1 , 1979 ( the " 1979 Bonds " ) , as authorized by Ordinance No . 2524 of
the City , adopted and approved April 17 , 1979 , as amended by Ordi -
nance No . 2533 , adopted and approved May 29 , 1979 ( collectively
the " 1979 Ordinance " ) ; and
WHEREAS , the total estimated cost of two ( 2 ) T -Hangars .
( the " improvements " ) is approximately $ 42 , 000 ; and
WHEREAS , the City can obtain sufficient funds to pay the
total estimated cost of the improvements by the issuance of
airport revenue bonds in the principal amount of $ 42 , 000 ; and
WHEREAS , the City has entered into a contract for the
sale of its Municipal Airport Revenue Bonds in the aggregate
principal amount of $ 42 , 000 to First National Bank , McIlroy Bank
and Northwest National Bank , all of Fayetteville , Arkansas ( the
" purchasers " ) at a purchase price of 100 cents on the dollar plus
accrued interest from the date of the Bonds to the date of delivery
to the purchasers ;
NOW , THEREFORE , BE IT ORDAINED by the Board of Directors
of the City of Fayetteville , Arkansas :
Section 1 . The acquisition of the improvements is
hereby authorized .
= N71 520
Section 2 . The sale of the bonds to the purchasers upon
the terms set forth above is hereby approved and confirmed .
Section 3 . To finance the cost of the improvements ,
including costs incidental thereto and incidental to the
financing , there are hereby authorized and ordered issued City of
Fayetteville , Arkansas , Municipal Airport Revenue Bonds , dated
January 1 , 1983 , in the aggregate principal amount of $ 42 , 000 ( the
" Bonds " ) .
The Bonds are authorized and issued under the authority
of the Constitution and laws of the State of Arkansas , including_
particularly Act No . 175 of 1959 , as amended .
The Bonds shall be issued as fully registered Bonds ,
registered as to principal and interest . The Bonds shall be
executed on behalf of the City by the Mayor and City Clerk ( one
signature may be facsimile , but one must be manual ) and shall have
impressed thereon the seal of the City . Payment of the Bonds shall
be made at the principal office of First National Bank ,
Fayetteville , Arkansas ( the " Trustee " and " Paying Agent " ) .
r Section 4 . The Bonds shall not be general obligations
of the City and shall not constitute an indebtedness of the City
within the meaning of any constitutional or statutory limitation ,
but shall be special obligations , secured by a pledge of and
payable solely from gross revenues derived from the operation of
the Airport , as specified in detail hereinafter in this Ordinance .
The lien , pledge and security of the Bonds are subordinate to the
lien , pledge and security of the 1979 Bonds . A sufficient amount
of the revenues derived from the operation of the Airport shall be
set aside and deposited in the " Airport Revenue Bond Fund , "
created and to be maintained pursuant to the provisions of this
Ordinance , to pay the principal of , interest on and Trustee ' s and
Paying Agent ' s fees in connection with the Bonds as due and
payable .
Section S . The Bonds will be dated January 1 , 1983 , and
interest on the Bonds will be payable semiannually on January 1
and July 1 of each year , commencing July 1 , 1983 . The Bonds shall
bear interest at the rate of 10% per annum . The Bonds will be
numbered , and will be in the denominations as follows : Bond No . R-
1 - $ 16 , 800 ; Bond No . R- 2 - $ 16 , 800 ; and Bond No . R- 3 - $ 8 , 400 . The
Bands shall mature in installments on January 1 of each year as set
forth in Section 9 hereof .
Section 6 . The Bonds 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 ) :
2 = 1 ; 71 521
( Form of fully registered bond )
UNITED STATES OF AMERICA
STATE OF ARKANSAS
COUNTY OF WASHINGTON
CITY OF FAYETTEVILLE
MUNICIPAL AIRPORT REVENUE BOND
No . R- $
KNOW ALL MEN BY THESE PRESENTS :
That the City of Fayetteville , Washington County ,
Arkansas , a municipality under the laws of the State of Arkansas
( the " City " ) , for value received , promises to pay to the
registered owner hereof the principal sum of
DOLLARS
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 in like coin or currency interest on the
unpaid balance of said principal amount from the date hereof until
paid at the rate specified below , such interest to be payable on
January 1 and July 1 of each year commencing July 1 , 1983 .
Principal shall be payable in installments as follows :
Date
( January 1 ) Amount
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
Principal shall be payable at the principal office of First
National Bank , Fayetteville , Arkansas ( the " Trustee " and " Paying
Agent " ) . Payment of interest shall be by check or draft to the
registered owner as shown on the bond registration books of the
City maintained by the Trustee .
The Bonds shall bear interest at the rate of 10% per
annum .
3 �x',71 522
This Bond , designated " City of Fayetteville , Arkansas
Municipal Airport Revenue Bond , " is one of an issue of Bonds in the
principal amount of Fortv- two Thousand Dollars ( $ 42 , 000 ) , dated
January 1 , 1983 , and numbered R- 1 , R- 2 and R- 3 , all of like tenor
and effect except as to number , denomination , maturity and right
of prior redemption , issued for the purpose of financing - the cost
of improvements to the Fayetteville Municipal Airport , Drake
Field ( the " Airport " ) .
The Bonds are issued pursuant to and in full compliance
with the Constitution and laws of the State of Arkansas , including
particularly Act No . 175 of the Acts of Arkansas of 1959 , as--
amended , and pursuant to an ordinance of the Board of Directors of
the City , duly adopted and approved , 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 secured by and payable solely from the
gross revenues derived from the operation of the Airport . The •
lien , pledge and security of the Bonds are subordinate to the
lien , pledge and security of the Municipal Airport Revenue Bonds ,
Series 1979 , dated May 1 , 1979 . The Bonds are authorized by and
issued under Ordinance No . a g&) of the Ordinances of the City ,
duly adopted and approved on the 7tk day of 1982 ( the
" Authorizing Ordinance " ) , to which reference may be made for a
detailed statement of the terms and conditions upon which the
Bonds are issued , of the restrictions and conditions for the issu -
ance of parity bonds , of the nature and extent of the security , and
of the rights and obligations of the City , the Trustee and the
holders and registered owners of the Bonds . An amount of the
revenues of the Airport sufficient to provide for the payment of
the principal of , interest on and Trustee ' s and Paying Agent ' s
fees in connection with the Bonds as the same become due and
payable is to be set aside and paid into a special fund , designated
" Airport Revenue Bond Fund , " created by the Authorizing
Ordinance . The City has fixed and has covenanted to maintain
rates and charges for the services and facilities of the Airport
which shall be sufficient at all times to produce revenues
adequate in amount for the proper and reasonable expensees of
operation and maintenance of the Airport , to provide for the
payment of the principal of , interest on and Trustee ' s and Paying
Agent ' s fees in connection with all outstanding Bonds as due and
payable and to provide for the maintenance of required reserves ,
and to make the required deposits for depreciation of the Airport .
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 , from
funds from any source , on any interest paying date , at a price of
the principal amount of the Bonds being redeemed plus accrued
interest to the date of redemption .
4 �1 x',71 523
The Trustee , at the expense of the City , shall mail
notice of the call for redemption by first class mail placed in the
mails not less than fifteen ( 15 ) days prior to the date fixed for
redemption to the registered owner of any Bond called for
redemption , in whole or in part , addressed to such registered
owner ' s registered address . Each notice shall specify the Bond
numbers , the maturity dates and amounts of principal installments
being called , and the date on which the Bonds shall be presented
for payment . After the date specified in such call , the principal
amounts so called will cease to bear interest provided funds for
their payment have been deposited with the Trustee . The
registered owner of each Bond so called shall surrender his Bond -
to the Trustee for payment of the principal amount being redeemed .
and endorsement of such redemption payment hereon and notation on
the registration books or for cancellation if redeemed in full .
The holder of this Bond shall have no right to enforce
the provisions of the Indenture or to institute action to enforce
the covenants therein , or to take any action with respect to any
event of default under the Authorizing Ordinance , or to institute ,
appear in and defend any suit or other proceeding with respect
thereto , except as provided in the Authorizing Ordinance . In
certain events , on the conditions , in the manner and with the
effect set forth in the Authorizing Ordinance , the principal of
all the Bonds issued under the Authorizing Ordinance and then
outstanding may be declared and may become due and payable before
the stated maturity thereof , together with accrued interest
thereon .
This Bond shall not be valid until it shall have been
authenticated by the Trustee .
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 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
limitation ; and that a sufficient amount of the revenues derived
from the operation of the Airport Revenue Bond Fund for the
payment of the principal of , interest , and Trustee ' s and Paying
Agent ' s fees on the Bonds .
IN WITNESS WHEREOF , the City of Fayetteville , Arkansas ,
has caused this Bond to be executed by its Mayor and City Clerk ,
thereunto duly authorized ( one signature may be facsimile but one
must be manual ) , and its corporate seal to be affixed , all as of
the first day of January , 1983 .
5 mm2l71 524
CITY AYE mE ' r L ARKANSAS
By �C/ !/ F.F / j
'Mayor
ATTEST :
City Clerk
( SEAL )
-fIIYc" fl , .
._r
r .
6 ® �X71 525
TRUSTEE ' S CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds issued under the
provisions of the within mentioned Ordinance .
FIRST NATIONAL BANK
Fayetteville , Arkansas
TRUSTEE
By
Authorized Signature -
1f'$ 71 526
PROVISIONS FOR REGISTRATION AND TRANSFER
This Bond may be transferred only upon an assignment
duly executed by the registered owner or his attorney or legal
representative in such form as shall be satisfactory to the Bond
Registrar , such transfer to be made on such books and endorsed
hereon by the Bond Registrar . The principal of and interest on
this Bond shall be payable only to or upon the order of the
registered owner or his legal representative .
Signature of
Date of Registration : Name of Registered Owner Bond Registrar
i
52-7
Section 7 . That the City hereby covenants with the
holders and registered owners of the Bonds that there will be
imposed and collected such charges for the use of the Airport and
its facilities as will at all times produce sufficient revenues to
provide for the operation , maintenance and repair of the Airport ,
to provide for the payment of the principal of and interest on all
outstanding bonds to which Airport revenues are pledged ,
including the 1979 Bonds and the Bonds , as the same become due , to
provide for Trustee ' s and Paying Agent ' s fees , make required
deposits into the Depreciation Fund and to maintain all funds
provided for in ordinances and resolutions authorizing and
securing all such Bonds at required levels . The above covenants _
shall include the agreement and obligation to increase the charges
from time to time as and to the extent necessary to produce
sufficient revenues to meet the above requirements .
Section 8 . That the provisions , covenants ,
undertakings , and stipulations of the City set forth in the 1979
Ordinance , pursuant to which the 1979 Bonds were issued and
secured and are presently outstanding , as such Ordinance may , at
any time , be amended , shall inure and appertain to the Bonds of
this issue to the same extent and with like force and effect as if
set forth herein in full , except only insofar as the same may be
expressly inconsistent with the provisions of this Ordinance ,
including among other things , and without limitation , the
provisions of the 1979 Ordinance whereby there has been created
and is being maintained ( 1 ) an " Airport Fund " and for the payment
into that fund of all the income and revenue derived from the
operation of the Airport , disbursements therefrom and the per -
mitted use of surplus at any time remaining therein , ( 2 ) an
" Airport Operation and Maintenance Fund " and for the payment into
that fund of the required amounts and permitted disbursements
therefrom , and ( 3 ) an " Airport Depreciation Fund " and for the
payment into that fund of the required amounts and disbursements
therefrom , all as specified in the applicable sections of the 1979
Ordinance , are hereby continued , ratified and confirmed .
Section 9 . Airport Revenue Bond Fund . ( a ) There
shall be paid from the Airport Fund ( created by the 1979
Ordinance ) into a special fund which is hereby created and
designated " 1983 Airport Revenue Bond Fund " ( the " Bond Fund " ) the
sums in the amounts and at the times hereinafter stated in
subsection ( b ) for the purpose of providing funds for the payment
of the principal of and interest on the Bonds and the Trustee ' s and
Paying Agent ' s fees . The Bonds shall mature in principal
installments as follows :
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Date of Amount of Installment
Installment Bond Number
( January 1 ) R- 1 R- 2 R- 3 Total
1984 $ 1 , 200 $ 1 , 200 $ 600 $ 3 , 000
1985 1 , 200 11200 600 31000
1986 1 , 200 11200 600 31000
1987 11400 11400 700 31500
1988 1 , 600 1 , 600 800 4 , 000
1989 11600 1 , 600 800 41000
1990 11800 11800 900 41500
1991 2 , 000 2 , 000 1 , 000 50000 -
1992 2 , 200 2 , 200 11100 51500 ,
1993 2 , 600 2 , 600 1 , 300 6 , 500
( b ) There shall be paid into the Bond Fund on the first
business day of each month until all outstanding bonds of this
issue with interst thereon have been paid in full or provision
made for such payment , a sum equal to one - sixth ( 1/6 ) of the next
installment of interest and one - twelfth ( 1/ 12 ) of the next
installment of principal ( plus any additional amount that may be
necessary together with accrued interest received at the time of
the delivery of the Bonds fully to provide for the first interest
payment on the Bonds , if any additional amount be required ) , and
an amount sufficient to provide for the Trustee ' s and Paying
Agent ' s fees , on all outstanding Bonds .
( c ) If the revenues of the Airport are insufficient to _
make the required payment on the first business day of the
following month into the Bond Fund , then the amount of any such
deficiency in the payment made shall be added to the amount
otherwise required to be paid into the Bond Fund on the first
business day of the next month .
( d ) When the moneys held in the Bond Fund 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 ,
there shall be no obligation to make any further payments into the
Bond Fund .
( e ) All moneys 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 when due and paying the Trustee ' s and Paying
Agent ' s fees , such surplus may be applied only to the payment of
the principal of and interest on any Bonds that may be called for
redemption prior to maturity or for the construction or equipment
of improvements to the Airport .
10
= 1x;71 529
( £ ) There shall be withdrawn from the Bond Fund at
least ten ( 10 ) days before the due date of any Bond , at maturity or
redemption prior to maturity , and deposited with the Paying Agent ,
an amount equal to the amount of sudh Bond for the sole purpose of
paying the same , together with the Paying Agent ' s fee , and no
withdrawal of funds from the Bond Fund shall be made for any other
purpose except as otherwise authorized in this Ordinance .
( g ) The Bonds of this issue shall be specifically
secured by a pledge of all the revenues required to be placed into
the Bond Fund . The pledge in favor of the Bonds is hereby
irrevocably made according to the terms of this Ordinance , and the -
City and its officers and employees shall execute , perform and
carry out the terms thereof in strict conformity with the
provisions of this Ordinance .
Section 10 . The City hereby agrees that all payments on
the Bonds and interest shall be made only as provided herein . All
Bonds paid or purchased either at or before maturity shall be can -
celled when such payment or purchase is made .
Section 11 . 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 Airport over the lien securing the Bonds of this issue ,
including the herein authorized and any and all future
improvements .
Nothing 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 improvements to the Airport ;
provided , however , the City shall not authorize or issue any such
additional bonds payable from the revenues derived from the
operation of the Airport and ranking on a parity of security with
these Bonds , except that :
( a ) Additional parity bonds in the principal amount of
not to exceed $ 250 , 000 in aggregate principal amount may be
issued , at one time or from time to time , on or before December 31 ,
1986 , for the purpose of financing additional T-Hangars .
( b ) Additional parity bonds may be issued from time to
time if there shall have been procured and filed with the City
Clerk and 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 the amount of
the net annual revenues of the Airport for the last completed
fiscal year , plus the amount of any increase in the net annual
revenues estimated to be derived , during the next succeeding
11
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I
fiscal year , from the proposed improvements and any increase in
the net annual revenues estimated to be derived , during the next
succeeding fiscal year , from any increase in the rates and charges
to be charged for the services and facilities of the Airport will
be equal to at least 150% of theaverage annual debt service
( principal , interest and Trustee ' s and Paying Agent ' s fees ) for
all the bonds payable from Airport revenues then outstanding , and
j the bonds then proposed to be issued . " Net annual revenues " are
defined as gross revenues less operating expenses , as determined
in accordance with recognized accounting practices .
I
In making the statement provided for by this Section
the certified public accountant may rely upon the written opinion .
of an independent qualified consulting engineer , not in the
regular employ of the City , as to the net annual revenues of the
Airport from the proposed improvements , and from any adjustment in
the rates and charges to be charged for the services and
facilities of the Airport for the next ensuing fiscal year .
The City reserves the right to issue bonds or other
obligations the security and source of payment of which is
subordinate to the pledge of revenues to these Bonds , without
regard to the restrictions set forth in this Section .
Section 12 . The Bonds shall be subject to redemption
prior to maturity in accordance with the terms set out in the Bond
form .
Section 13 . The City covenants that so long as any
Bonds authorized hereby 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 or otherwise dispose of
any substantial portion of the same .
Section 14 . The City covenants that it will 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 ( c ) of the
Internal Revenue Code .
Section 15 . When the Bonds have been executed and the
seal of the City impressed thereon , they shall be delivered to the
Trustee and the Trustee shall authenticate them and deliver them
to the purchasers upon payment in cash of the purchase price of
$ 42 , 000 , plus accrued interest from the date of the Bonds to the
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